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Replacement for mint.com with a public API?
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Yodlee's Moneycenter is the system that powered Mint.com before Intuit bought them. It works great for managing accounts in a similar fashion to Mint. They have a development platform that might be worth checking out.
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Stock exchanges open on Saturday
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According to Wikipedia as well as this stock market trading-hours website, the Tehran Stock Exchange is open Saturday through Wednesday.
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How can a freelancer get a credit card? (India)
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Typically Banks look for a steady source of income or savings based on which they issue a credit card. If you can't show that build a cash balance and show it. For Example if you have an PPF account with say SBI, they issue you a card with a limit of around 50% of the balance in PPF. No other documentation is required. Similarly if you have Fixed Deposits for a large amount quite a few Banks would give you a Credit Card. My wife has a credit card because she had a good balance [around 100,000 INR] for around a year, the Bank kept calling her and offered her a card.
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Paid by an American company but working from France: where should I pay taxes?
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There's nothing wrong with your reasoning except that you expect the tax laws to make perfect sense. More often than not they don't. I suggest getting in touch with a professional tax preparer (preferably with a CPA or EA designation), who will be able to understand the issue, including the relevant portions of the French-US tax treaty, and explain it to you. You will probably also need to do some reporting in France, so get a professional advice from a French tax professional as well. So, in my tax return, can I say that I had no US revenue at all during this whole year? I doubt it.
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Is there an online service that provides public company information through a public API?
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I don't know of any free API's for these data, but I'll provide what information I can. Compiling all of this information from the EDGAR system and exposing an interface to it requires a fair amount of work and maintenance, so it's usually market data companies that have the motivation and resources to provide such interfaces. I know of a few options that may or may not be close to what you're looking for. The SEC provides FTP access to the EDGAR system. You could download and parse the text files they provide. Yahoo Finance provides summary files of financial statements (e.g., GOOG) as well as links to the full statements in the EDGAR system. Once again, parsing may be your only option for these data. Xignite, a proprietary market data provider, provides a financial statement API. If you need these data for a commercial application, you could contact them and work something out. (Frankly, if you need these data for a commercial application, you're probably better off paying for the data) The Center for Research into Security Prices provides data from financial statements. I believe it's also exposed through several of their API's. As with most financial data, CRSP is sort of a gold standard, although I haven't personally used their API to fetch data from financial statements, so I can't speak for it specifically. This answer on StackOverflow mentions the quantmod R package and mergent. I can't vouch for either of those options personally. Unfortunately, you'll probably have to do some parsing unless you can find a paid data provider that's already compiled this information in a machine-readable format.
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Does a growing economy mean the economy is becoming less efficient?
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Growth and efficiency can occur independently of each other. For instance, if an economy consists of one inefficient business and then a second more efficient business opens to compete agains the first the overall efficiency increases while the economy grows. New industries tend to be inefficient at the beginning (since initiation is more important than optimisation) and then become more efficient over time. Agriculture is an amazingly efficient business if you consider how many people now produce the amount of food we consume in comparison to only 100 years ago. Plus, efficiency is not only about producing extra widgets. You could produce the same number of widgets for lower cost. Outsourcing to China (taking advantage of their lower cost of production) increases the efficiency of the US economy, but also increases the efficiency of the Chinese economy (since extra work is created producing more things). Lower costs in the US lead to increased investment in other production. Increased production in China leads to the rising wages there. Growth can be achieved in both places for very different reasons. So, no, growth doesn't have to come about through less efficiency.
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Will I be liable for taxes if I work for my co. in India for 3 months while I am with my husband in UK
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For information about the UK situation, check the government website at http://www.hmrc.gov.uk/incometax/tax-arrive-uk.htm It all depends on the time. If I read it right (but you should check yourself) you can stay almost six months at a time, but at most 3 months on average over 4 years. Above this limit, you should either avoid the situation, or get professional advice, because things will be complicated.
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Why do grocery stores in the U.S. offer cash back so eagerly?
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It doesn't cost them anything, they don't pay commission on you taking cash-back. But it brings customers to the stores because these customers would rather buy something and use cash-back to get cash, than go to an ATM and pay the ATM commission.
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How is unmarketable stock valued for tax purposes?
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How you are taxed will depend on what kind of stock awards they are. The value will be determined by the company that issues it, and appropriate tax forms will be sent to you to include with your taxes. The way the value is determined is an accounting question that is off-topic here, but the value will be stated on your stock award paperwork. If you are awarded the stock directly then that value will be taxed as ordinary income. If you are awarded options, then you can purchase the stock to start the clock on long-term capital gains, but you will not incur any tax liability through the initial purchase. If the company is sold privately and you have held the stock for over 1 year, then yes, it will be taxed as a long-term capital gain. If you receive/exercise the stock less than 1 year before such an acquisition, then it will be considered a short-term capital gain and will be taxed as ordinary income.
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I'm thinking of getting a new car … why shouldn't I LEASE one?
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It's a very simple equation. If we forget about the stress and limitations that come with the so-called "lease", and make the following assumptions: Then after 3 years of using this new car: I will never understand why people still "lease" a car. Even for very low income people who have to have a car, financing a per-owned decent car would do, but it's just "show off" seduction and lure that either unknowing minded or idiot teenagers fall for.
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Determining the minimum dividend that should be paid from my S corporation
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There are no dividends from S-Corp. There are distributions. Big difference. S-Corps fill form 1120S and schedule K-1 per shareholder. In the schedule all the income of your S-Corp will be assigned to various categories that you will later copy to your personal tax return as your personal income. It is not dividend income. The reason people prefer to take distributions from their S-Corps instead of salary is because you don't pay SE taxes on the distributions. That is also the reason why the IRS forces you to pay yourself a reasonable salary. But the tax rate on the income, all of it, is your regular income tax rate, unless the S-Corp income is categorized in a preferred category. The fact that its an S-Corp income doesn't, by itself, allow any preferential treatment. If you're learning the stuff as you go - you should probably get in touch with a tax professional to advise you. All the S-Corp income must be distributed. Its not a matter of "avoiding paying the tax", its the matter of "you must do it". Not a choice. My answer was not intended or written to be used, and it cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer (circ 230 disclaimer).
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Which U.S. online discount broker is the best value for money?
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I agree, Schwab representatives are easy to reach and very helpful. I also like Vanguard for their low mutual fund fees, so I do my retirement stuff with them, but it took forever to get in touch with a representative just to ask a simple question. Now that they are lowering their rates to 8.95 per trade (effective January 19th), the value for your money is even better.
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See list of stock trades for day
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You can see all the (millions) of trades per day for a US stock only if you purchase that data from the individual exchanges (NYSE, NASDAQ, ARCA, ...), from a commercial market data aggregator (Bloomberg, Axioma, ...), or from the Consolidated Tape Association. In none of that data will you ever find identifying information for the traders. What you are recalling regarding the names of "people from the company" trading company stock is related to SEC regulations stating that people with significant ownership of company stock and/or controlling positions on the company board of directors must publicize (most of) their trades in that stock. That information can usually be found on the company's investor relations website, or through the SEC website.
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If a stock doesn't pay dividends, then why is the stock worth anything?
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Since I'm missing the shortest and simplest answer, I'll add it: A car also doesn't offer dividends, yet it's still worth money. A $100 bill doesn't offer dividends, yet people are willing to offer services, or goods, or other currencies, to own that $100 bill. It's the same with a stock. If other people are willing to buy it off you for a price X, it's worth at least close to price X to you. In theory the price X depends on the value of the assets of the company, including unknown values like expected future profits or losses. Speaking from experience as a trader, in practice it's very often really just price X because others pay price X.
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Pay via Debit Card or Bank's portal
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There are reward points that you have already mentioned. Some banks also give reward points for netbanking transfer, although very few and less than debit card. On a fraudulent site, debit card adds a layer, if compromised, easy to change. i.e just hot list the card, get a new card issued. Netbanking quite a few banks have incorrect implementation and difficult to change the login ID / User ID. The dispute resolution mechanism is well established as there is master or visa network involved. The ease of doing transaction is with netbanking as for card one has to remember 16 digits, expiry, cvv. The entire process of card usage is multiparty, on slow connection if something goes wrong, it takes 3 days to figure out. In netbanking it is instantaneous. You just login to bank and see if the debit has gone through.
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Possible to purchase multiple securities on 1 transaction?
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No, this is not generally possible, as each security purchase is booked as a separate order => hence separate transaction. You can do this through purchasing of a fund, i.e.: purchasing one share of a ETF will get you a relative share of the ETF holdings, but the actual holdings are not up to you then.
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Get financial reports on Canadian companies
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www.sedar.com is the official site that provides access to most public securities documents and information filed by public companies and investment funds with the Canadian Securities Administrators (CSA) in the SEDAR filing system. Now, I'm guessing - I think the doc is MDA - Management’s Discussion and Analysis of Financial Condition and Results of Operations. At least this is what appears listed for many companies.
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60% Downpayment on house?
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If you decide you need the extra money, you can always go refinance and get more cash out. At the end of the day, though, if you pay off your house sooner you can invest more of your income sooner; that's just a matter of discipline.
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How does owning a home and paying on a mortgage fit into family savings and investment?
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Unless you plan to sell your home and live in a box during your retirement I wouldn't consider it an investment that is a viable replacement for a retirement account. Consider this: Even if housing prices DO go way up, you still need a place to live. When you sell that house and try to buy another one to live in, you will find that the other houses went up in price too, negating your gain. The only way this might work is if you buy a much bigger house than you will need later and trade down to pull out some equity, or consider a reverse-mortgage for retirement income.
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How to calculate how much house I can afford?
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There is no simple way to calculate how much house any given person can afford. In the answer keshlam gave, several handy rules of thumb are mentioned that are used as common screening devices to reject loans, but in every case further review is required to approve any loan. The 28% rule is the gold standard for estimating how much you can afford, but it is only an estimate; all the details (that you don't want to provide) are required to give you anything better than an estimate. In the spirit of JoeTaxpayer's answer I'm going to give you a number that you can multiply your gross income by for a good estimate, but my estimate is based on a 15 year mortgage. Assuming a 15 year mortgage with a 3% interest rate, it will cost $690.58 per $100,000 borrowed. So to take those numbers and wrap it up in a bow, you can multiply your income by 3.38 and have the amount of mortgage that most people can afford. If you have a down-payment saved add it to the number above for the total price of the home you can buy after closing costs are added in. Property taxes and insurance rates vary widely, and those are often rolled into the mortgage payment to be paid from an escrow account, banks may consider all of these factors in their calculators but they may not be transparent. If you can't afford to pay it in 15 years, you really can't afford it. Compare the same $100k loan: In 30 years at 4% you pay about $477/month with a total of about $72k in interest over the life of the loan. In 15 years at 3% you pay about $691/month but the total interest is only $24k, and you are out of the loan in half of the time. The equity earned in the first 5 years is also signficantly different with 28.5% for the 15 year loan vs. 9.5% on the 30 year loan. Without straying too far into general economics, 15 year loans would also have averted the mortgage crisis of 2008, because more people would have had enough equity that they wouldn't have walked out on their homes when there was a price correction.
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Should I set a stop loss for long term investments?
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You should definately have a stop loss in place to manage your risk. For a time frame of 5 to 10 years I would be looking at a trailing stop loss of 20% to 25% off the recent high. Another type of stop you could use is a volatility stop. Here the more volatile the stock the larger the stop whilst the less volatile the stock the smaller the stop. You could use 3 or 4 x Weekly ATR (Average True Range) to achieve this. The reason you should always use a stop loss is because of what can happen and what did happen in 2008. Some stock markets have yet to fully recover from their peaks at the end of 2007, almost 9 years later. What would you do if you were planning to hold your positions for 5 years and then withdrawal your funds at the end of June 2021 for a particular purpose, and suddenly in February 2021 the market starts to fall. By the time June comes the market has fallen by over 50%, and you don't have enough funds available for the purpose you planned for. Instead if you were using a trailing stop loss you would manage to keep at least 75% of the peak of your portfolio. You could even spend 10 minutes each week to monitor your portfolio for warning signs that a downtrend may be around the corner and adjust your trailing stop to maybe 10% in these situations, protecting 90% of the peak of your portfolio. If the downtrend does not eventuate you can adjust your trailing back to a higher percentage. If you do get stopped out and shortly after the market recovers, then you can always buy back in or look for other stocks and ETFs to replace them. Sure you might lose a bit of profits if this happens, but it should always be part of your investment plan and risk management how you will handle these situation. If you are not using stop losses, risk management and money management you are essentially gambling. If you say I am going to buy these stocks and ETFs hold them for 10 years and then sell them, then you are just hoping to make gains - which is essentially gambling.
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Why do only a handful of Canadian companies have options trading on their stocks?
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First, your question contains a couple of false premises: Options in the U.S. do not trade on the NYSE, which is a stock exchange. You must have been looking at a listing from an options exchange. There are a handful of options exchanges in the U.S., and while two of these have "NYSE" in the name, referring to "NYSE" by itself still refers to the stock exchange. Companies typically don't decide themselves whether options will trade for their stock. The exchange and other market participants (market makers) decide whether to create a market for them. The Toronto Stock Exchange (TSX) is also a stock exchange. It doesn't list any options. If you want to see Canadian-listed options on equities, you're looking in the wrong place. Next, yes, RY does have listed options in Canada. Here are some. Did you know about the Montreal Exchange (MX)? The MX is part of the TMX Group, which owns both the Toronto Stock Exchange (TSX) and the Montreal Exchange. You'll find lots of Canadian equity and index options trading at the MX. If you have an options trading account with a decent Canadian broker, you should have access to trade options at the MX. Finally, even considering the existence of the MX, you'll still find that a lot of Canadian companies don't have any options listed. Simply: smaller and/or less liquid stocks don't have enough demand for options, so the options exchange & market makers don't offer any. It isn't cost-effective for them to create a market where there will be very few participants.
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Prepaying a loan: Shouldn't the interest be recalculated like a shorter loan?
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Loans do not carry an "interest balance". You can not pay off "all the interest". The only way to reduce the interest to zero is to pay off the loan. Otherwise, the interest due each month is some percentage of the outstanding principal. Think of it from the bank's perspective: they've invested some amount of money in you, and they expect a return on that investment in the form of interest. If you somehow paid in 16 years all the interest the bank expected to receive in 30 years, you've been scammed.
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Why would you ever turn down a raise in salary?
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In the UK, the government has recently announced that Child Benefit will no longer be paid to those who earn over £44k. This means that if you currently earn £43,999, and your employer offers you a raise of £10 per annum to £44,009, then you could be over £1k worse off as a result.
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Discount Rate vs. IRR
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The IRR is the Discount Rate r* that makes Net Present Value NPV(r*)==0. What this boils down to is two ways of making the same kind of profitability calculation. You can choose a project with NPV(10%)>0, or you can choose based on IRR>10%, and the idea is you get to the same set of projects. That's if everything is well behaved mathematically. But that's not the end of this story of finance, math, and alphabet soup. For investments that have multiple positive and negative cash flows, finding that r* becomes solving for the roots of a polynomial in r*, so that there can be multiple roots. Usually people use the lowest positive root but really it only makes sense for projects where NPV(r)>0 for r<r* and NPV(r)<0 for r>r*. To try to help with your understanding, you can evaluate a real estate project with r=10%, find the sum future discounted cash flows, which is the NPV, and do the project if NPV>0. Or, you can take the future cash flows of a project, find the NPV as a function of the rate r, and find r* where NPV(r*)==0. That r* is the IRR. If IRR=r*>10% and the NPV function is well behaved as above, you can also do the project. When we don't have to worry about multiple roots, the preceding two paragraphs will select the same identical sets of projects as meeting the 10% return requirement.
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Put idle savings to use while keeping them liquid
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Since you're coming out of college, you're probably a new investor and don't know too much about stocks, etc. I was in the same situation as well. I wanted to keep my cash 'liquid' and wanted to make low risk investments. What I ended up doing was investing the majority of my money in higher interest GICs (Guaranteed Investment Certificate) and keeping the rest in my chequing/savings account. I understand that GICs aren't exactly the most liquid asset out there. However, instead of investing it all into 1 GIC, I put them in to smaller increments with varying lock-in times and roll-over options. I.e. for 15000 keep $3000 on hand in your account 2x$1000 invested for 2 years 4x$1000 invested for 1 year 3x$1000 invested for 180 days 3x$1000 invested for 90 days When you find that you run out of cash from your $3000, you'll have a GIC expiring soon. The 'problem' with GICs is that redeeming them before the maturity period usually incurs a penalty in the form of no interest. Keeping them in smaller increments allows you to redeem only the amount you need without losing too much interest. At maturity, if you don't need the money, you can just have the GIC renew. The other problem with GICs, is that interest rates, though better than savings accounts, aren't that much more. You're basically just fighting off inflation. The benefit is that on maturity, you are guaranteed your principal and the interest. This plan is easy to implement if your bank/credit union allows you to create and manage GICs online.
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Remote jobs and incidental wage costs: What do I have to consider?
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An employee costs the company in four ways: Salary, taxes, benefits, and capital. Salary: The obvious one, what they pay you. Taxes: There are several taxes that an employer has to pay for the privilege of hiring someone, including social security taxes (which goes to your retirement), unemployment insurance tax (your unemployment benefits if they lay you off), and workers compensation tax (pays if you are injured on the job). (There may be other taxes that I'm not thinking of, but in any case those are the main ones.) Benefits: In the U.S. employers often pay for medical insurance, sometimes for dental, life, and disability. There's usually some sort of retirement plan. They expect to give you some number of vacation days, holidays, and sick days where they pay you even though you're not working. Companies sometimes offer other benefits, like discounts on buying company products, membership in health clubs, etc. Capital: Often the company has to provide you with some sort of equipment, like a computer; furniture, like a chair and desk; etc. As far as the company is concerned, all of the above are part of the cost of having you as an employee. If they would pay a domestic employee $60,000 in salary and $20,000 in taxes, then assuming the same benefits and capital investment, if a foreign employee would cost them $0 in taxes they should logically be willing to pay $80,000. Any big company will have accountants who figure out the total cost of a new employee in excruciating detail, and they will likely be totally rational about this. A smaller company might think, "well, taxes don't really count ..." This is irrational but people are not always rational. I don't know what benefits they are offering you, if any, and what equipment they will provide you with, if any. I also don't know what taxes, if any, a U.S. company has to pay when hiring a remote employee in a foreign country. If anybody on here knows the answer to that, please chime in. Balanced against that, the company likely sees disadvantages to hiring a foreign remote employee, too. Communication will be more difficult, which may result in inefficiency. My previous employer used some contractors in India and while there were certainly advantages, the language and time zone issues caused difficulties. There are almost certainly some international bureaucratic inconveniences they will have to deal with. Etc. So while you should certainly calculate what it would cost them to have a domestic employee doing the same job, that's not necessarily the end of the story. And ultimately it all comes down to negotiations. Even if the company knows that by the time they add in taxes and benefits and whatever, a domestic employee will cost them $100,000 a year, if they are absolutely convinced that they should be able to hire an Austrian for $60,000 a year, that might be the best offer you will get. You can point out the cost savings, and maybe they will concede the point and maybe not.
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How to reconcile performance with dividends?
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Just look at the published annualized returns, which are inclusive of distributions and fees. From the Vanguard website: Average annual returns include changes in share price and reinvestment of dividends and capital gains.
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Theoretically, if I bought more than 50% of a company's stocks, will I own the company?
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I believe Tom Au answered your key question. Let me just add in response to, "What if someone was just simply rich to buy > 50%, but does not know how to handle the company?" This happens all the time. Bob Senior is a brilliant business man, he starts a company, it is wildly successful, then he dies and Bob Junior inherits the company. (If it's a privately owned company he may inherit it directly; if it's a corporation he inherits a controlling interest in the stock.) Bob Junior knows nothing about how to run a business. And so he mismanages the company, runs it into the ground, and eventually it goes bankrupt. Stock holders lose their investment, employees lose their jobs, and in general everyone is very unhappy. I suppose it also happens that someone gets rich doing thing A and then decides that he's going to buy a business that does thing B. He has no idea how to run a business doing thing B and he destroys the company. I can't think of any specific examples of this off the top of my head, but I've heard of it happening with people who make a ton of money as actors or professional athletes and then decide to start a business.
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The life cycle of money
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Echoing JohnF, and assuming you mean the physical, rather than abstract meaning of money? The abstract concept obviously isn't replaced (unless the currency is discredited, or like the creation of the Euro which saw local currencies abandoned). The actual bits of paper are regularly collected, shredded (into itty-bitty-bits) and destroyed. Coinage tends to last a lot longer, but it also collected and melted down eventually. Depends on the country, though. No doubt, many people who took a gap year to go travelling in points diverse came across countries where the money is a sort of brown-grey smudge you hold with care in thick wadges. The more modern economies replace paper money on a dedicated cycle (around three years according to Wikipedia, anyway).
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How to rescue my money from negative interest?
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You obviously pay your taxes in Switzerland and are employed (judging from your comments on your maximum possible contribution to the 3. Säule). Under these circumstances, your best best may well be to pay into the occupational pension system ("Einkauf in die 2. Säule"). Essentially, you can add funds to your pension plan to match non-existent employer contributions from times you spent studying etc. The 2. Säule is usually defensively invested in bonds, so it's not a completely secure investment. In addition, it's a pretty fixed investment, since you can only get your money out if you buy a house or leave Switzerland for good. However, your entire payment into the 2. Säule is tax deductible, so the tax effect in itself should be a very attractive bit of "interest". Your pension plan can inform you about the maximum possible Einkauf.
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Does the sale of personal items need to be declared as income on my income taxes?
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I doubt it. In the States you would only owe tax if you sold such an item at a profit. "garage sales" aren't taxable as they are nearly always common household items and sale is more about clearing out one's attic/garage than about profit. Keep in mind, if I pay for a book, and immediately sell it for the same price, there's no tax due, why would tax be due if I sell for a loss?
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Why do banks encourage me to use online bill payment?
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Most transactions that the bank performs for you are electronic ACH transactions, so the costs to them are minimal in the long run. Most banks do it now to keep up with the competition. Almost every bank does it now, so they have to do it to attract new business and keep existing customers. Also, the more you rely on the bank and use them to pay bills, the more they learn about you over time and can use that data in overall marketing plans. It's easier for them to record it into their system if it is all electronic to begin with.
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Are market orders safe?
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A market sell order will be filled at the highest current "bid" price. For a reasonably liquid stock, there will be several buy orders in line, and the highest bid must be filled first, so there should a very short time between when you place the order and when it is filled. What could happen is what's called front running. That's when the broker places their own order in front of yours to fulfill the current bid, selling their own stock at the slightly higher price, causing your sale to be filled at a lower price. This is not only unethical but illegal as well. It is not something you should be concerned about with a large broker. You should only place a market order when you don't care about minute differences between the current ask and your execution price, but want to guarantee order execution. If you absolutely have to sell at a minimum price, then a limit order is more appropriate, but you run the risk that your limit will not be reached and your order will not be filled. So the risk is a tradeoff between a guaranteed price and a guaranteed execution.
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What Happens to Bank Stocks If Country Defaults
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The prices seem very low even considering the risk? The prices are low because of the risk. Nothing happens to the banks if the sovereign defaults. However, the sovereign debt holders - lose some or all the money they lent to that sovereign. Incidentally, many banks invest in the treasury bonds of various countries, especially those they're located in. They also invest in other companies that rely on the government, or the currency. If that dependency is too high - the bank may fail. If the dependency is not high, or non-existent - the bank will survive. If the bank fails - yes, your shares will be wiped out, that's what happens with bankrupt companies. If you considering investing in banks in a country that you think may default - research them and see how much investments they have that will be affected by that default.
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Why do people buy stocks that pay no dividend?
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I don't know why there is so much confusion on such a simple concept. The answer is very simple. A stock must eventually pay dividends or the whole stock market is just a cheap ponzi scheme. A company may temporarily decided to reinvest profits into R&D, company expansion, etc. but obviously if they promised to never pay dividends then you can never participate in the profits of the company and there is simply no intrinsic value to the stock. For all of you saying 'Yeah but the stock price will go up!', please people get a life. The only reason the price goes up is in anticipation of dividend yield otherwise WHY would the price go up? "But the company is worth more and the stock is worth more" A stocks value is not set by the company but by people who buy and sell in the open market. To think a stock's price can go up even if the company refuses to pay dividends is analogous to : Person A says "Hey buy these paper clips for $10". But those paper clips aren't worth that. "It doesn't matter because some fool down the line will pay $15". But why would they pay that? "Because some fool after him will pay $20" Ha Ha!
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Why are wire transfers and other financial services in Canada so much more expensive than in Europe?
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Transaction fees are part of the income for banks, and as we know they are profit making corporations just like any other Company. The differene is that instead of buying and packing and Selling groceries, they buy and package and sell Money. Within the rules and the market they will try to maximize their profit, exactly like Apple or GM or Walmart and so on. Sweden and Holland are part of the European union and the leaders of the union has defined (by law) that certain types of transactions should be done without fees. In order to transfer Money from your Swedish account to the Dutch account you do what is called a SEPA transaction, which should be done in one day without cost to you as a customer. Reference: https://en.wikipedia.org/wiki/Single_Euro_Payments_Area Gunnar
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Buying back a covered Call
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Your three options are: Options 2 and 3 are obviously identical (other than transaction costs), so if you want to keep the stock, go for option 1, otherwise, go for option 3 since you have the same effect as option 2 with no transaction costs. The loss will likely also offset some of the other short term gains you mentioned.
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Effect on Bond asset allocation if Equity markets crash?
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what will happen to the valuation of Tom's bond holdings after the equity crash? This is primarily opinion based. What will happen is generally hard to predict. Bond Price Bump due to Demand: Is a possible outcome; this depends on the assumption that the bonds in the said country are still deemed safe. Recent Greece example, this may not be true. So if the investors don't believe that Bonds are safe, the money may move into Real Estate, into Bullion [Gold etc], or to other markets. In such a scenario; the price may not bump up. Bond Price Decline due to Rising Interest Rates: On a rising interest rates, the long-term bonds may loose in value while the short term bonds may hold their value. Related question How would bonds fare if interest rates rose?
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Does a stock really dip in price on the ex-dividend date? And why would it do this?
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This effect has much empirical evidence as googling "dividend price effect evidence" will show. As the financial economic schools of thought run the gamut so do the theories. One school goes as far to call it a market inefficiency since the earning power thus the value of an equity that's affected is no different or at least not riskier by the percentage of market capitalization paid. Most papers offer that by the efficient market hypothesis and arbitrage theory, the value of an equity is known by the market at any point in time given by its price, so if an equity pays a dividend, the adjusted price would be efficient since the holder receives no excess of the price instantly before payment as after including the dividend since that dividend information was already discounted so would otherwise produce an arbitrage.
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Solid reading/literature for investment/retirement/income taxes?
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For the mechanices/terms of stock investing, I recommend Learn to Earn by Peter Lynch. I also like The Little Book of Common Sense Investing by John Bogle. It explains why indexing is the best choice for most people. For stock picking, a good intro is The Little Book of Value Investing by Chris Brown. And then there is The Intelligent Investor by Ben Graham. IMO, this is the bible of investing.
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How can I diversify investments across currencies in ISA?
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Just buy a FTSE-100 tracker. It's cheap and easy, and will hedge you pretty well, as the FTSE-100 is dominated by big mining and oil companies who do most of their business in currencies other than sterling.
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Paid cash for a car, but dealer wants to change price
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Your son is in the right. But he broke the "unwritten" rules, which is why the car dealer is upset. Basically, cars are sold in the United States at a breakeven price. The car company makes ALL its money on the financing. If everyone bought "all cash," the car companies would not be profitable. No one expected anyone, least of all your son, a "young person," to pay "all cash." When he did, they lost all the profit on the deal. On the other hand, they signed a contract, your son met all the FORMAL requirements, and if there was an "understanding" (an assumption, actually), that the car was supposed to be financed, your son was not part of it. Good for him. And if necessary, you should be prepared to back him up on court.
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Should I get a personal loan to pay on my mortgage to go “above water” to qualify for a refinance?
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Let's say you owe $200K (since you didn't mention balance. If you do, I'd edit my response), and can get 4.5%. You'd save 1.5% or about $3K/yr the first few years. If a $12K paydown is all that's between you and and refi I'd figure out a way. There are banks that are offering refi's under the HARP program if your current mortgage is owned by FNMA or FMAC which permit even if under water. So, the first step is research to see if you can refi exactly what's owed, failing that, shop around. A 401(k) loan will not appear as a loan on your credit report, that may be one way to raise the $12K. The best thing you can do is put all the savings into the 401(k) to really get it going.
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Who performs the blocking on a Visa card?
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The request to block the money is made by the Party who sells the product. Based on this request the Bank blocks the funds. Subsequently the Party who sold the product makes a charge against this block. Just to give an easy example; So in the online train booking there are multiple messages sent between the Bank and SNCF. Something has gone wrong. It looks like the message from Bank sending back the Block reference number to SNCF has not reached. So as per Bank there is a Block and as per SNCF there is no block. Keep chasing SNCF to issue a letter so that you can send it to the Bank and get the Block removed. Typically the Blocks by the Bank are for a period of 30 days and if there is no charge against that block it automatically gets reversed.
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Does “cash in lieu of dividend” incur any tax consequences in an IRA?
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In a (not Roth) IRA, withdrawals are generally already taxed as regular income. So there should be no tax disadvantage to earning payment in lieu of dividends. It's possible that there is an exception for IRAs but I was unable to find one and I cannot see the reason for one since the dividend tax rate is usually lower than the income tax rate (which is why some company owners elect to receive part of the company profits via dividend rather than all through their salary).
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Does the IRS reprieve those who have to commute for work?
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You cannot deduct commute expenses. Regarding your specific example, something to consider is that if the standard of living is higher in San Francisco, presumably the wages are higher too. Therefore, you must make a choice to trade "time and some money for commuting costs" for "even more money" in the form of higher wages. For example, if you can make $50K working 2 hours away from SF, or $80K working in SF, and it costs you $5K extra per year in commute costs, you still come out ahead by $25K (minus taxes). If it ends up costing $20K more to live in SF (due to higher rent/mortgage/food/etc), some people choose to trade 4 extra hours of commuting time to put that extra $20K in their pocket. It's sort of like having an extra part time job, except you get paid to read/watch tv/sleep on the job (assuming you can take a train to work).
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What happened when the dot com bubble burst?
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Two big things: In many ways, the early internet people were correct -- in 2011 we are much more productive as a society than we were in 1991. (Which comes with downsides, such as high unemployment) The bubble was a result of over-estimating those improvements and under-estimating the time required to yield those productivity gains.
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Book or web site resources for an absolute beginner to learn about stocks and investing?
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The Winning Investor http://winninginvestor.quickanddirtytips.com/ This is a blog and a podcast. Load a bunch of these onto your iPod and start listening. Stikky Stock Charts http://www.amazon.com/Stikky-Stock-Charts-professionals-smart/dp/1932974008 This is a beginner's guide on how to read charts. Lots of charts, not too many words.
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Is it possible to get life insurance as a beneficiary before the person insured dies?
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Generally no. It does not make sense for insurance company to alter terms and if there are such rules it can be subject to misuse.
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Is there a term for the risk of investing in an asset with a positive but inferior return?
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In my opinion the risk is about the lost opportunity cost. You can find a lot of articles about it on the net. In big shortcut opportunity cost takes place each time you have to choose between two or more options and the tradeoff effect have its price. It is defined as value of best alternative solution. Quite good definition from wikipedia is as follows: In microeconomic theory, the opportunity cost of a choice is the value of the best alternative forgone, in a situation in which a choice needs to be made between several mutually exclusive alternatives given limited resources. Assuming the best choice is made, it is the "cost" incurred by not enjoying the benefit that would be had by taking the second best choice available Note that opportunity cost is not the sum of the available alternatives when those alternatives are, in turn, mutually exclusive to each other – it is the value of the next best use. As you probalby think, this situation often happens in financial world, where investors always seek best from their point of view way to invest capital.
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Tax exemption on personal loan interest component in India
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Am I eligible for the tax exemption if yes then under which section. Generally Personal loans are not eligible for tax exemption. Only housing loans from qualified institutions are eligible for tax deduction. As per the income tax act; The house should be in your name. The home loans taken from recognised institutions are fully qualified under section 24B and 80C. This means you can claim Interest exemption under 24B and Principal repayment under 80C. The Act also specifies that loan can be taken from friends/relatives for construction of property and will be eligible for Interest exemption under 24B only. The principal will not be eligible for exemption under 80C. Read the FAQ from Income Tax India. There has to be certificate showing how much interest was paid on the said loan. Further there should be records/receipts on how the money was spent. There is difference of opinion amongst CA. It is best you take a professional advise.
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No transaction fee ETF trades - what's the catch?
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what is the mechanism by which they make money on the funds that I have in my account? Risk drives TD Ameritrade to look for profits, Turukawa's storytelling about 100,000$ and 500$ is trivial. The risk consists of credit risk, asset-liability risk and profit risk. The third, based on Pareto Principle, explains the loss-harvesting. The pareto distribution is used in all kind of decentralized systems such as Web, business and -- if I am not totally wrong -- the profit risk is a thing that some authorities require firms to investigate, hopefully someone could explain you more about it. You can visualize the distribution with rpareto(n, shape, scale) in R Statistics -program (free). Wikipedia's a bit populist description: In the financial services industry, this concept is known as profit risk, where 20% or fewer of a company's customers are generating positive income while 80% or more are costing the company money. Read more about it here and about the risk here.
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Paying restaurants in cash instead of credit card - how signficant is this?
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Credit cards charge about 2% fee from merchants. This is already priced into the restaurant menu. Generally, dealing with cash will not cost the merchant significantly less since he needs to make more trips to the bank, pay fees for frequent cash deposits (banks charge per operation), and maintain a safe location for storage of that cash. Bottom line - I doubt it makes any significant difference to the restaurant owner.
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How is not paying off mortgage better in normal circumstances?
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The reason is that although the American economy is functioning normally, mortgage rates are stupid-low, and are below a prudent expectation of long-term (30 year) rates of return in the market. I manage endowments, so I say "prudent" in the context of endowment investment, which is the picture of caution and subject to UPMIFA law (the P being prudent). What's more, there are tax benefits. Yes, you pay 15% long-term capital gains tax on investment income. But your mortgage interest is tax deductible at your "tax bracket" rate of 25, 28 or 33% - this being the tax you would pay on your next dollar of earned income. And in the early years of a mortgage, mortgage payments are nearly 100% interest. So even if it's a wash: you gain $10k in the market but pay $10k in mortgage interest -- you pay $1500 tax on the gains, but the interest deduction redudes tax by $2800. So you are still $1300 ahead. TLDR: the government pays us to do this.
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Should I sell my stocks when the stock hits a 52-week high in order to “Buy Low, Sell High”?
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You asked for advice, so I'll offer it. Trying to time the market is not a great strategy unless you're sitting in front of a Bloomberg terminal all the time. Another person answering your question suggests the use of index funds; he's likely to be right. Look up "asset allocation." What you want to do is decide that you want your portfolio to contain, for example: If one of your stock holdings goes up far enough that you're out of your target asset allocation ranges, sell some of it and buy something in another asset class,s so you're back in balance. That way you lock in some profit when things go up, without losing access to potential future profits. The same applies if something goes down; you buy more of that asset class by selling others. This has worked really well for me for 30+ years.
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Long vs. short term capital gains on real estate
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No, it's not all long-term capital gain. Depending on the facts of your situation, it will be either ordinary income or partially short-term capital gain. You should consider consulting a tax lawyer if you have this issue. This is sort of a weird little corner of the tax law. IRC §§1221-1223 don't go into it, nor do the attendant Regs. It also somewhat stumped the people on TaxAlmanac years ago (they mostly punted and just declared it self-employment income, avoiding the holding period issue). But I did manage to find it in BNA Portfolio 562, buried in there. That cited to a court case Comm'r v. Williams, 256 F.2d 152 (5th Cir. 1958) and to Revenue Ruling 75-524 (and to another Rev. Rul.). Rev Rul 75-524 cites Fred Draper, 32 T.C. 545 (1959) for the proposition that assets are acquired progressively as they are built. Note also that land and improvements on it are treated as separate assets for purposes of depreciation (Pub 946). So between Williams (which says something similar but about the shipbuilding industry) and 75-524, as well as some related rulings and cases, you may be looking at an analysis of how long your property has been built and how built it was. You may be able to apportion some of the building as long-term and some as short-term. Whether the apportionment should be as to cost expended before 1 year or value created before 1 year is explicitly left open in Williams. It may be simpler to account for costs, since you'll have expenditure records with dates. However, if this is properly ordinary income because this is really business inventory and not merely investment property, then you have fully ordinary income and holding period is irrelevant. Your quick turnaround sale tends to suggest this may have been done as a business, not as an investment. A proper advisor with access to these materials could help you formulate a tax strategy and return position. This may be complex and law-driven enough that you'd need a tax lawyer rather than a CPA or preparer. They can sort through the precedent and if you have the money may even provide a formal tax opinion. Experienced real estate lawyers may be able to help, if you screen them appropriately (i.e. those who help prepare real estate tax returns or otherwise have strong tax crossover knowledge).
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Why buy SPY when there is S&P500?
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The S&P500 is an index, not an investment by itself. The index lists a large number of stocks, and the value of the index is the price of all the stocks added together. If you want to make an investment that tracks the S&P500, you could buy some shares of each stock in the index, in the same proportions as the index. This, however, is impractical for just about everyone. Index mutual funds provide an easy way to make this investment. SPY is an ETF (exchange-traded mutual fund) that does the same thing. An index CFD (contract for difference) is not the same as an index mutual fund. There are a number of differences between investing in a security fund and investing in a CFD, and CFDs are not available everywhere.
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Does a rescheduled conference call generally mean “something's wrong” with a company?
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Insiders (those who are aware of non-public material information, not necessarily employees) are the ones who actually cannot sell once they learned about whatever, by law. Martha Stewart went to jail for that. Any such deviation from the norm triggers abnormal response and avalanche of rumors, so by default investors assume something bad and try to minimize the loss. When dealing with a tiny company (market cap of less than 15M) with a tiny market volume (6.2M), the swings can be very significant. For such a small company, it is safe to assume that something happened that lead them to delay the conference call, and since they didn't tell what happen, investors assume the worst. It might end up as the CEO and CFO having bad stomach after celebrating 100% growth in revenue they were going to announce, but you'll have to wait and see....
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What are the tax liabilities for an Indian citizen working in the US?
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Tax liability in US: You would need to determine if you are a resident alien or non resident alien. Resident alien are taxed normally as per US citizens. For the annual remuneration you have quoted it would be in the range of 25%. Refer http://www.moneychimp.com/features/tax_brackets.htm To determine if you are resident alien or non resident alien, you need to be present for certain period in US. There is also an exemption even if you meet this you can still be treated as non resident alien if your tax home is outside US [India in this case] Refer to the link for details to determine your category, the durations are for number of days in financial year, hence it matters when you are in US and the exact durations. http://www.irs.gov/taxtopics/tc851.html Also note that if you are assessed as resident alien, even the income from India will be taxed in US unless you declare there is no income in India. Tax liability in India: The tax liability in India would be depending on your NRI status. This again is tied to the financial year and the number of days you are in country. While the year you are going out of India you need to be away for atleast 183 days for you be considred are NRI. So if you are treated as Indian resident, you would have to pay tax in India on entire income. In the worst case, depending on the period you travel and the dates you travel, you could get classified as citizen in US as well as India and have to pay tax at both places. India and US do not have a dual tax avoidance treaty for individuals. Its there for certain category like small business and certain professions like teacher, research etc.
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Why are American-style options worth more than European-style options?
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According to the book of Hull, american and european calls on non-dividend paying stocks should have the same value. American puts, however, should be equals to, or more valuable than, european puts. The reason for this is the time value of money. In a put, you get the option to sell a stock at a given strike price. If you exercise this option at t=0, you receive the strike price at t=0 and can invest it at the risk-free rate. Lets imagine the rf rate is 10% and the strike price is 10$. this means at t=1, you would get 11.0517$. If, on the other hand, you did'nt exercise the option early, at t=1 you would simply receive the strike price (10$). Basically, the strike price, which is your payoff for a put option, doesn't earn interest. Another way to look at this is that an option is composed of two elements: The "insurance" element and the time value of the option. The insurance element is what you pay in order to have the option to buy a stock at a certain price. For put options, it is equals to the payout= max(K-S, 0) where K=Strike Price and St= Stock price. The time value of the option can be thought of as a risk-premium. It's difference between the value of the option and the insurance element. If the benefits of exercising a put option early (i.e- earning the risk free rate on the proceeds) outweighs the time value of the put option, it should be exercised early. Yet another way to look at this is by looking at the upper bounds of put options. For a european put, today's value of the option can never be worth more than the present value of the strike price discounted at the risk-free rate. If this rule isn't respected, there would be an arbitrage opportunity by simply investing at the risk-free rate. For an american put, since it can be exercised at any time, the maximum value it can take today is simply equals to the strike price. Therefore, since the PV of the strike price is smaller than the strike price, the american put can have a bigger value. Bear in mind this is for a non-dividend paying stock. As previously mentioned, if a stock pays a dividend it might also be optimal to exercise just before these are paid.
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Frequency of investments to maximise returns (and minimise fees)
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Okay, I think I managed to find the precise answer to this problem! It involves solving a non-linear exponential equation, but I also found a good approximate solution using the truncated Taylor series. See below for a spreadsheet you can use. Let's start by defining the growth factors per period, for money in the bank and money invested: Now, let S be the amount ready to be invested after n+1 periods; so the first of that money has earned interest for n periods. That is, The key step to solve the problem was to fix the total number of periods considered. So let's introduce a new variable: t = the total number of time periods elapsed So if money is ready to invest every n+1 periods, there will be t/(n+1) separate investments, and the future value of the investments will be: This formula is exact in the case of integer t and n, and a good approximation when t and n are not integers. Substituting S, we get the version of the formula which explicitly depends on n: Fortunately, only a couple of terms in FV depend on n, so we can find the derivative after some effort: Equating the derivative to zero, we can remove the denominator, and assuming t is greater than zero, we can divide by the constant ( 1-G t ): To simplify the equation, we can define some extra constants: Then, we can define a function f(n) and write the equation as: Note that α, β, γ, G, and R are all constant. From here there are two options: Use Newton's method or another numerical method for finding the positive root of f(n). This can be done in a number of software packages like MATLAB, Octave, etc, or by using a graphics calculator. Solve approximately using a truncated Taylor series polynomial. I will use this method here. The Taylor series of f(n), centred around n=0, is: Truncating the series to the first three terms, we get a quadratic polynomial (with constant coefficients): Using R, G, α, β and γ defined above, let c0, c1 and c2 be the coefficients of the truncated Taylor series for f(n): Then, n should be rounded to the nearest whole number. To be certain, check the values above and below n using the formula for FV. Using the example from the question: For example, I might put aside $100 every week to invest into a stock with an expected growth of 9% p.a., but brokerage fees are $10/trade. For how many weeks should I accumulate the $100 before investing, if I can put it in my high-interest bank account at 4% p.a. until then? Using Newton's method to find roots of f(n) above, we get n = 14.004. Using the closed-form approximate solution, we get n = 14.082. Checking this against the FV with t = 1680 (evenly divisible by each n + 1 tested): Therefore, you should wait for n = 14 periods, keeping that money in the bank, investing it together with the money in the next period (so you will make an investment every 14 + 1 = 15 weeks.) Here's one way to implement the above solution with a spreadsheet. StackExchange doesn't allow tables in their syntax at this time, so I'll show a screenshot of the formulae and columns you can copy and paste: Formulae: Copy and paste column A: Copy and paste column B: Results: Remember, n is the number of periods to accumulate money in the bank. So you will want to invest every n+1 weeks; in this case, every 15 weeks.
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Who can truly afford luxury cars?
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It very much depends on whether you want to drive around in an expensive car, or whether you want an expensive car parked on your driveway. And whether you want to buy a new car, or a used one. And whether you know a reliable garage that doesn't rip you off or not. For example, if my wife who drives maybe 5,000 miles a year wanted a 5 series BMW, we could buy a five year old one with 120,000 miles, for about £120 per month purchase price if it lasts 6 years. 11 year old and 150,000 miles should be no problem for that kind of car. So that's quite affordable. For me, driving 25,000 miles a year, the numbers are quite different. Fact is, if you drive around in my wider neighbourhood, you will sometimes see very expensive cars parked in front of very rundown houses. Some people find it more important to drive around in an expensive car than to live in a nice place. That's priorities. Many people can afford expensive cars if they rearrange their priorities (and I'm not saying it's a good thing). PS. If you want to be seen in an expensive car (for example, you take your wife out), you can always rent a car for a day or two.
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Primary Residence to Investment Property - Changing PMI Terms
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You could be in a bit of a bind. I wouldn't push it any more until you read your loan papers very carefully. Going back to the lender for a refinance after you converted it to a rental (presumably without their knowledge) is risky. I doubt they'd let you refinance anyway, as the house is underwater. If the loan is performing then I wouldn't think they'd look too hard for reasons to upset the flow of checks by calling the loan due, but if you brazenly advertise the change of property use to them they may reconsider. Read your loan papers carefully to see what they can do before you lean on them too much. As for managing the finances on that property, I'd build up a cushion to deal with the fact that your payment is going to shoot up considerably in year 8. Also consider building up a side business to get another income stream going to compensate as well. You have a little time before it shoots up.
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Are buying and selling futures based on objective data?
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If you hold a future plus enough cash collateral it is economically equivalent to owning the underlying asset or shorting the underlying asset. In general financial assets such as stock indices have a positive expected return - that's the main difference between investing and gambling. There's nothing that special about futures, they are just another contractual form of asset ownership. Well, one difference is that regulations or brokerages allow individual investors more leverage with options and futures than with straight borrowing. But this is more a regulatory issue than a conceptual issue with the securities themselves. In theory regulators or brokers could require you to hold enough collateral to make a future equivalent to buying the underlying.
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How are people able to spend more than what they make, without going into debt?
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Rich people use debt for various reasons. The question should not assume that billionaires don't use debt. They also pay lower interest rates on that debt because they have enough collateral that their debt is safer than a typical mortgage. Many rich people will use interest only mortgages on their primary residences so that they can keep their stock earning at higher growth rates than the mortgage interest that they are paying all while writing off a portion of that mortgage interest on their taxes. Taking an artificially low salary and receiving equity for the larger portion of compensation is also a tax strategy to limit the amount of taxes owed on that income. If paid directly in stock grants, that will count as income, but if paid in options, then the purchased stock will only be taxed at the lower capital gains rates if the stock is held for a year after the options are exercised. Every billionaire will have complicated tax avoidance strategies that will require multi-year planning for the best long-term minimization of taxes. Debt is a strategic part of that planning. Also consider that a major part of that upscale lifestyle (corporate jets, fancy meals, etc.) is on the company dime because the CEO is always on the clock. As long as he is meeting with business prospects or doing other company business, those expenses will be justified for the corporation and not attributed as income.
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Auto Loan and Balance Transfer
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This is what your car loan would look like if you paid it off in 14 months at the existing 2.94% rate: You'll pay a total of about $277 in interest. If you do a balance transfer of the $10,000 at 3% it'll cost you $300 up front, and your payment on the remaining $5,000 will be $363.74 to pay it off in the 14 month period. Your total monthly payment will be $1,099.45; $5,000 amortized at 2.94% for 14 months plus $10,300 divided by 14. ($363.74 + 735.71). Your interest will be about $392, $300 from the balance transfer and $92 from the remaining $5,000 on the car loan at 2.94%. Even if your lender doesn't credit your additional payment to principal and instead simply credits future payments, you'd still be done in 15 months with a total interest expense of about $447. So this additional administration and additional loan will save you maybe about $55 over 14 or 15 months.
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What are the reasons to get more than one credit card?
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I keep one card just for monthly bills (power company,car loan, etc.). This one is unlikely to get hacked so I won't have to go change the credit card information on my monthly bills. I pay the credit card from my bank account. I just don't want a lot of businesses with direct access to my bank account.
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How did I end up with a fraction of a share?
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It's not that uncommon but it doesn't usually come from standard purchases. Investopedia explains: Definition of 'Fractional Share' A share of equity that is less than one full share. Fractional shares usually come about from stock splits, dividend reinvestment plans (DRIPs) and similar corporate actions. Normally, fractional shares cannot be acquired from the market. However, there is at least one investment firm that markets itself as offering fractional shares. Fractional investing makes more sense, since an investor's perspective is to invest a certain number of dollars into equity, not to buy a certain number of shares that closely mirror the dollar commitment.
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How to understand adding or removing “liquidity” in stock markets with market/non-market orders?
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Not all limit orders add liquidity, but all market orders remove liquidity presuming there is liquidity to remove. A liquidity providing order is one that is posted to the limit book. If an order, even a limit order, is filled before being posted to the limit book, it removes liquidity. Liquidity is measured by a balance and abundance of quantities posted on the limit book and the best spread between the lowest ask and the highest bid.
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Is Peter Lynch talking about the Dividend Adjusted PEG Ratio in this quote?
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Essentially, yes, Peter Lynch is talking about the PEG Ratio. The Price/Earnings to Growth (PEG) Ratio is where you take the p/e ratio and then divide that by the growth rate (which should include any dividends). A lower number indicates that the stock is undervalued, and could be a good buy. Lynch's metric is the inverse of that: Growth rate divided by the p/e ratio. It is the same idea, but in this case, a higher number indicates a good value for buying. In either case, the idea behind this ratio is that a fairly priced stock will have the p/e ratio equal the growth rate. When your growth rate is larger than your p/e ratio, you are theoretically looking at an undervalued stock.
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How do I figure out the next step in deciding to sell my home to the market or to a uniquely interested buyer?
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We considered similar big renovations when putting our house on the market. The answer turns out to be pretty simple; unless you do renovation-type work as your day job, or have really good friends in the residential contracting business, sell as-is. You will virtually never get back the full price of bringing in a gen-con to renovate any space in your home; you do that when you want to spend the extra to make your home exactly what you wanted, so you can live in it for decades and get the enjoyment out of it. If you're trying to turn a profit with the renovation, like house-flippers do professionally, you look for easy repairs/renos, buy good-looking but inexpensive materials, and do the labor yourself. Whether you sell to the market or to a specifically-interested buyer is your call, but I will caution you that a specifically-interested buyer is going to be looking for a deal, or a steal. When marketing our house, we met with three different realtors. The first one was very overoptimistic about what we could list for (basically assuming that we could get the same price as a fully-upgraded version of our same floor plan with a pool out back). She also had a to-do list a mile long, and my wife and I both noticed that she looked very apprehensive about the house when looking around, even as she reassured us that selling it would be no trouble. We eventually realized why she was so apprehensive, and fired her before we got even halfway through her to-dos, which included major landscaping, new kitchen floors and countertops, etc, which would have cost us thousands and would not have gotten the house price even close to the target. The second one took a look at our half-finished refinish and told us to stop everything we were doing to update the minor stuff like paint and fixtures, saying we were putting lipstick on a pig; she would market the house to some cash buyers she knew personally, for about 80% of the list price our first realtor quoted, and implied that we should be kissing her boots for finding us a buyer willing to take the house off our hands at all. During the tour, she pointed out "problems" with the house that weren't even there, like foundation issues such as sloping floors, in an attempt to scare us into going with her strategy. We sniffed that out pretty quickly, showed her the door at the end of the initial consult and never called back. This, by the way, is the kind of thing you want to avoid; unless your home is really dilapidated or torn apart with unfinished major renos, it should have decent value on the market and you shouldn't have to resort to a cash buyer looking for a flip or a rental property on the cheap. Just like Goldilocks, our third choice was just right. He saw all the same comparables, toured our house, and recommended that we offer about $20k less than the fully-upgraded version (but still about $20k more than the second realtor was estimating), targeting a "real" buyer and not an investor or flipper, but at a price that would make the lack of upgrades more acceptable. We finished the paint and finish projects we started, brought in a weekend's worth of scheduled showings, and our house was under contract for full price within 3 days, giving us the extra $20k worth of down payment to put into our new house. In summary, I highly recommend a realtor, because the one we eventually listed with worked his butt off on the business side while we fixed up the house. However, make sure you find the right one; realtors are ultimately in business for themselves, and their ultimate interest is in getting your house sold and getting you into a new one. That is what gets them paid. Some of them will do it the right way, working the deal with other realtors and their prospective buyers to get you what you need. Others will take the easy way out, at your expense, either giving you bad advice about how to present and price your home so that you end up on the market for 6 months with no offers, or handing your house to their business buddies at a discount.
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It's possible to short a stock without paying interest?
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It is possible and it depends on your strategy. As short selling interest rates are annual and levied monthly at a prorated rate. Interest rates are also low in general, with the exception of hard to borrow stocks. Therefore you can maintain a short position for weeks on end and notice nothing. Months even, if the position itself has already gained in your favor. There is no additional fee for opening the short position. Although some brokers have a "locate" fee, if it is hard to borrow the stock and they need to go find some shares to short. So you can do it as much as you like.
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Why doesn't Graham consider gold as an investment?
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During Graham's career, gold and currency were the same thing because of the gold standard. Graham did not advise investing in currencies, only in bonds and stocks, the latter only for intelligent speculation. Graham died a couple of years after Nixon closed the gold window, ending the gold standard. Gold may be thought of as a currency even today, as endowments and other investors use it as a store of value or for diversification of risks. However, currency or commodities investing does not seem Graham-like. How could you reliably estimate intrinsic value of a currency or commodity, so that you can have a Graham-like margin of safety after subtracting the intrinsic value from the market value? Saying that gold is "clearly underpriced in today's market" is just hand-waving. A Graham analysis such as "net net" (valuing stocks by their current tangible assets net of all liabilities) is a quantitative analysis of accounting numbers audited by CPAs and offers a true margin of safety.
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Townhouse or stand-alone house for a first home?
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First, some general advice that I think you should consider A good rule of thumb on home buying is to wait to buy until you expect to live in the same place for at least 5 years. This period of time is meant to reduce the impact of closing costs, which can be 1-5% of your total buying & selling price. If you bought and sold in the same year, for example, then you might need to pay over 5% of the value of your home to realtors & lawyers! This means that for many people, it is unwise to buy a home expecting it to be your 'starter' home, if you already are thinking about what your next (presumably bigger) home will look like. If you buy a townhouse expecting to sell it in 3 years to buy a house, you are partially gambling on the chance that increases in your townhome's value will offset the closing costs & mortgage interest paid. Increases in home value are not a sure thing. In many areas, the total costs of home ownership are about equivalent to the total costs of renting, when you factor in maintenance. I notice you don't even mention renting as an option - make sure you at least consider it, before deciding to buy! Also, don't buy a house expecting your life situation to 'make up the difference' in your budget. If you're expecting your girlfriend to move in with you in a year, that implies that you aren't living together now, and maybe haven't talked about it. Even if she says now that she would move in within a year, there's no guarantee that things work out that way. Taking on a mortgage is a commitment that you need to take on yourself; no one else will be liable for the payments. As for whether a townhouse or a detached house helps you meet your needs better, don't get caught up in terminology. There are few differences between houses & townhomes that are universal. Stereotypically townhomes are cheaper, smaller, noisier, and have condo associations with monthly fees to pay for maintenance on joint property. But that is something that differs on a case-by-case basis. Don't get tricked into buying a 1,100 sq ft house with a restrictive HOA, instead of a 1,400 sq ft free-hold townhouse, just because townhouses have a certain reputation. The only true difference between a house and a townhouse is that 1 or both of your walls are shared with a neighbor. Everything else is flexible.
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How should we prioritize retirement savings, paying down debt, and saving for a house?
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Pay the debt down. Any kind of debt equals risk. No debt equals no risk and a better chance to have that money earn you income down the road once it's invested. That and you will sleep so much better knowing you have ZERO debt. You 6 month emergency fund is probably good. Remember to keep it at 6 months living expenses (restaurants don't count as living expenses).
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Corporate Equity Draw vs Income
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You tagged with S-Corp, so I assume that you have that tax status. Under that situation, you don't get taxed on distributions regardless of what you call them. You get taxed on the portion of the net income that is attributable to you through the Schedule K that the S-Corp should distribute to you when the S-Corp files its tax return. You get taxed on that income whether or not it's distributed. If you also work for the small business, then you need to pay yourself a reasonable wage. The amount that you distribute can be one factor in determining reasonableness. That doesn't seem to be what you asked, but it is something to consider.
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What is the rationale behind brokerages establishing tiers/levels for options trading?
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Option tiers are broker specific, according mostly to their business model and presumably within the bounds of FINRA Rule 2111 (Suitability). The tier system can be as complex as E*Trade or as simple as none with Interactive Brokers. The suitability is determined presumably by compliance presumably by the legal history of the rule. The exact reasoning is political, effected by the relevant party composition of the legislature and executive. The full legal history will have the judiciary's interpretations of legislation and policy. Cash and margin rules are dictated primarily by the Federal Reserve and more precisely by FINRA and the SEC. This is the only distinction made by IB.
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How does the purchase of shares on the secondary market benefit the issuing company?
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Stock trading (as opposed to IPO) doesn't directly benefit the company. But it affects their ability to raise additional funds; if they're valued higher, they don't need to sell as many shares to raise a given amount of money. And the stockholders are part owners of the company; their votes in annual corporate meetings and the like can add up to a substantial influence on the company's policies, so the company has an interest in keeping them (reasonably) happy. Dividends (distributing part of the company's profits to the stockholders) are one way of doing so. You're still investing in the company. The fact that you're buying someone else's share just means you're doing so indirectly, and they're dis-investing at the same time.
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Are reimbursements from company taxable,and do I need to deduct them?
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I'm assuming that you're in the US. In that case, the answer is that it depends on how your company set up its reimbursement plan. The IRS recognizes "accountable" and "nonaccountable" plans. Accountable plans have to meet certain requirements. Anything else is nonaccountable. If you are reimbursed according to an accountable plan, this is not income and should not be reported to the IRS at all. If you are reimbursed under a nonaccountable plan, then this is income but you might be able to get a deduction on your tax return if you itemize. Most established companies have accountable plans for normal business expenses. More detail from IRS: http://www.tax.gov/TaxabilityCertainFringeBenefits/pdf/Accountable_v_Nonaccountable_Plans_Methods_of_Reimbursing_Employees_for_Expense.pdf
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Which U.S. online discount broker is the best value for money?
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If you have at least $25,000, Wells Fargo is the place to be, as you get 100 free trades per account. I have three investment accounts with them and get 100 free trades in each a year, though I only ever actually use 10-20. i can't vouch for their phone service as I've never needed it, but free is very hard to beat in the "value for money" department. Update: Apparently in some states the requirement is $50,000. However, they count 10% of your mortgage as well as all deposit and investment accounts toward that balance.
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Can you step up your cost basis indefinitely via the 0% capital gains rate?
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Your real question, "why is this not discussed more?" is intriguing. I think the media are doing a better job bringing these things into the topics they like to ponder, just not enough, yet. You actually produced the answer to How are long-term capital gains taxed if the gain pushes income into a new tax bracket? so you understand how it works. I am a fan of bracket topping. e.g. A young couple should try to top off their 15% bracket by staying with Roth but then using pretax IRA/401(k) to not creep into 25% bracket. For this discussion, 2013 numbers, a blank return (i.e. no schedule A, no other income) shows a couple with a gross $92,500 being at the 15%/25% line. It happens that $20K is exactly the sum of their standard deduction, and 2 exemptions. The last clean Distribution of Income Data is from 2006, but since wages haven't exploded and inflation has been low, it's fair to say that from the $92,000 representing the top 20% of earners, it won't have many more than top 25% today. So, yes, this is a great opportunity for most people. Any married couple with under that $92,500 figure can use this strategy to exploit your observation, and step up their basis each year. To littleadv objection - I imagine an older couple grossing $75K, by selling stock with $10K in LT gains just getting rid of the potential 15% bill at retirement. No trading cost if a mutual fund, just $20 or so if stocks. The more important point, not yet mentioned - even in a low cost 401(k), a lifetime of savings results in all gains being turned in ordinary income. And the case is strong for 'deposit to the match but no no more' as this strategy would let 2/3 of us pay zero on those gains. (To try to address the rest of your questions a bit - the strategy applies to a small sliver of people. 25% have income too high, the bottom 50% or so, have virtually no savings. Much of the 25% that remain have savings in tax sheltered accounts. With the 2013 401(k) limit of $17,500, a 40 year old couple can save $35,000. This easily suck in most of one's long term retirement savings. We can discuss demographics all day, but I think this addresses your question.) If you add any comments, I'll probably address them via edits, avoiding a long dialog below.
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Optimal Asset Allocation
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When you have multiple assets available and a risk-free asset (cash or borrowing) you will always end up blending them if you have a reasonable objective function. However, you seem to have constrained yourself to 100% investment. Combine that with the fact that you are considering only two assets and you can easily have a solution where only one asset is desired in the portfolio. The fact that you describe the US fund as "dominating" the forign fund indicates that this may be the case for you. Ordinarily diversification benefits the overall portfolio even if one asset "dominates" another but it may not in your special case. Notice that these funds are both already highly diversified, so all you are getting is cross-border diversification by getting more than one. That may be why you are getting the solution you are. I've seen a lot of suggested allocations that have weights similar to what you are using. Finding an optimal portfolio given a vector of expected returns and a covariance matrix is very easy, with some reliable results. Fancy models get pretty much the same kinds of answers as simple ones. However, getting a good covariance matrix is hard and getting a good expected return vector is all but impossible. Unfortunately portfolio results are very sensitive to these inputs. For that reason, most of us use portfolio theory to guide our intuition, but seldom do the math for our own portfolio. In any model you use, your weak link is the expected return and covariance. More sophisticated models don't usually help produce a more reasonable result. For that reason, your original strategy (80-20) sounds pretty good to me. Not sure why you are not diversifying outside of equities, but I suppose you have your reasons.
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Do people tend to spend less when using cash than credit cards?
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First, let me answer the question the best way I can: I don't know if there are any studies other than those that have already been mentioned. Now, let's talk about something more interesting: You don't need to base your behavior on any study, even if it is scientific. Let's pretend, for example, that we could find a scientifically valid study that shows that people spend 25% more when using a credit card than they do when spending cash. This does not mean that if you use a credit card, you will spend 25% more. All it means is that the average person spending with a credit card spends more than the average person paying cash. But there are outliers. There are plenty of people who are being frugal while using a credit card, and there are others who spend too much cash. Everyone's situation is different. The idea that you will automatically spend less by using cash would not be proven by such a study. When hearing any type of advice like this, you need to look at your own situation and see if it applies to your own life. And that is what people are doing with the anecdotal comments. Some say, "Yep, I spend too much if I use a card." Others say, "Actually, I find that when I have cash in my wallet, I spend it on junk." And both are correct. It doesn't matter what the study says the average person does, because you are not average. Now, let's say that you are a financial counselor who helps people work through disastrous financial messes. Your client has $20,000 in credit card debt and is having trouble paying all his bills. He doesn't have a budget and never uses cash. Probably the best advice for this guy is to stop using his card and start paying cash. It doesn't take a scientific study to see that this guy needs to change his behavior. For what it is worth, I keep a strict budget, keeping track of my spending on the computer. The vast majority of my spending is electronic. I find tracking my cash spending difficult, and sometimes I find that when I have cash in my wallet, it seems to disappear without a trace. :)
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How can I check my credit score?
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Since no one else answered this part of your question yet: Checking your own credit score or report will not affect it in any way. It only hurts you when someone looks it up to run a credit check at your request for the purpose of possibly getting a loan, for example a car dealership. This only hurts it a tiny bit, and is not worth worrying about unless you are going to 20 different car dealerships who each do a check. However, it is a good idea not to let them run your credit until you are seriously ready to buy a car. In fact, it is better to just get financing somewhere else and not let them run it at all.
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How to prevent myself from buying things I don't want
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To me, your question emphasizes something I've heard many times before: personal finance is as much or more about behavior than it is about mathematics or "head knowledge". Sure, you know you shouldn't be wasting a lot of money on something you will use very infrequently, but how do you make this behavior stick? Here are a few tricks that might help: The other aspects of your question really touch more on psychology than finance. But getting yourself into a discipline habit with money will help. And realizing the full cash price of items in relation to how much your disposable income is will help you get control of your impulses, as you review your budget monthly, and keep limit yourself using the envelope system. But honestly, everybody wants stuff they don't have, it's human nature. The key is finding ways to put physical limits and guards on yourself to keep you from obeying the self-destructive impulses.
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After Market Price change, how can I get it at that price?
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The price of the last trade... Is the price of the last trade. It indicates what one particular buyer and seller agreed upon. There is absolutely no requirement that one of them didn't offer too much or demand too little, so this is nearly meaningless as an indication of what anyone else will be willing to offer or demand. An average of trades across a sufficiently large number of transactions might indicate a rough consensus about the value of a stock, but transactions will be clustered around that average and the average itself moves over time. Either you offer to sell or buy at a particular price, wait for that price, and risk the transaction not taking place at all if nobody agrees, or you do a spot transaction and get the best price at that nanosecond (which may not be the best in the next nanosecond). Or you tell the broker what the limits are that you consider acceptable, trading these risks off against each other. Pick the one which comes closest to your intent and ignore the fact that others may be getting a slightly different price. That's just the way the market works. "If his price is lower, why didn't you buy it there?" "He's out of stock." "Well, come back when I'm out of stock and I'll be unable to sell it to you for an even better price!"
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Expecting to move in five years; how to lock mortgage rates?
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If interest rates have gone up, don't sell when you move. Refinance to lock in a low rate and rent out your current house when you move. Let the rent pay your new mortgage.
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How is a probability cone read?
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A number of ways exist to calculate the chances of a particular outcome. Options, for example, use current price, cost of money, and volatility among other factors to price the chance of an underlying asset reaching a certain price in a certain timeframe. A graphical forecast simply puts these calculations into a visual format. That said, it appears the image you offer shows the prediction as it existed in the past along with how the stock has done since. A disclaimer - The odds of a fair die being rolled to a given number are 1 in 6. It's a fact. With stocks, on the other hand, models try to simulate real life and many factors can't be accounted for.
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Investing thought experiment
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Yes, if your assumptions are correct then your conclusions are correct. But your assumptions are never correct, and so this thought experiment doesn't tell us anything useful.
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Where on schedule C should a PO Box Rental fee go?
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Turbotax community had a similar question. They claim you just put it into "Office Expense". I never understood why there are so many categories when they are just summed up and subtracted from your income. How can you possibly get in trouble for putting something in a wrong column if the final tax liability doesn't change.
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Does a rescheduled conference call generally mean “something's wrong” with a company?
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Does the market automatically assume a rescheduled call means something major, like the auditors aren't signing the financials, is going on? Yes. (If so, why?) People - including investors - are emotional. And suspicious. And paranoid. Financial discussions tend to make everything sound like a cold, clinical science, and to some degree that is true. But you should never look past something much more simple - people are people. And of course, once all is said and done, acts like a reschedule often do mean something is up. So you've now got a nice mix of fact and emotion. Does it mean that 95% of the shares' holders are insiders who all decided to sell when they learned about whatever is causing the delay in the con call? No. See Littleadv's answer.
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Does a stay at home mom need term life insurance?
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Absolutely! Just because a spouse doesn't have a taxable income, doesn't mean they aren't providing real, tangible benefit to the family economy with an important job. As tragic as it is to consider losing your spouse, are you truly in a position to replace everything they do you for you? Knowing what they do for you and appreciating the effort your spouse gives is important, but don't sell short the dollar amount of what they provide. Your life insurance policy should be to keep you whole. Without your spouse, you will need childcare. You might need domestic services to the home. What about a nanny or similar service? Would $50K cover that until your child is an adult? There are a number of added expenses in the short and long term that would occur if a spouse died. How much for a funeral? Obviously you know the amount and term depends on the age of your kid. But I think you should really try to account for the number of daily hours you spouse puts in, and try to attach a cost to those hours. Then buy insurance for them just as you would for a wage earning. For example, buy a policy that is 10x the annual cost for services it would take to compensate for your spouse. Your tolerance for risk and cost can adjust it up and down from there.
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Life insurance policy
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First off, I would question why do you need a LI policy? While you may be single are you supporting anyone? If not, and you have some money saved to cover a funeral; or, your next of kin would be able to pay for final expenses then you probably don't have a need. In, general, LI is a bad investment vehicle. I do not know hardly anything about the Indian personal finance picture, but here in the US, agents tout LI as a wonderful investment. This can be translated as they make large commissions on such products. Here in the US one is far better off buying a term product, and investing money elsewhere. I image it is similar in India. Next time if you want to help a friend, listen to his sales presentation, give some feedback, and hand him some cash. It is a lot cheaper in the long run.
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Is 6% too high to trade stocks on margin?
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6% isn't "too high" in terms of market rates at the moment, however it's a very subjective question whether it's too high for you. The real question to determine is if paying 6%, can you make more than 6% return (to cover the costs plus your profit)? As for a rule of thumb, there's none I know of, however your best bet is to take the time to model it in Excel (not difficult). It's different for each portfolio or investment. Something with a high standard deviation of returns is already high risk, adding margin to it only makes it worse. So, long story short is that, "it depends".
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Scam or Real: A woman from Facebook apparently needs my bank account to send money
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Absolute scam. Any time anyone asks you to open a bank account so they can send you money and then you have to send some portion of it back to them, it's a guarantee that it's a scam. What happens is that your dad will deposit the check and transfer it to this woman, then the check will bounce (or turn out to be fake altogether) and your dad will be on the hook for the money to the bank. These schemes are dependent on the fact that people want hope and believe in quick, easy money, and it works as long as the con artists are able to get the 'mark' (the person who deposits the check and sends them the money) to send the money before the check (always drawn on some obscure foreign bank) has a chance to clear. This is another variation of a long-running type of bank scam, and if you get involved, you'll regret it. I hope you can keep your dad from getting involved, because it will create a financial mess and affect his credit as well. The basic premise of this scam is this: In the interests of providing good customer service, most banks will make some or all of a deposit available right away, even though the check hasn't cleared. The scammer has you withdraw the money (either a cashier's check, have you send a wire transfer, etc) immediately and send it to them. Eventually the check is returned because it is The bank charges the check back against your account, often imposing pretty substantial penalties and fees, so you as the account holder are left without the money you sent the scammer and all of the fees. This is the easy version of events. You could end up in legal trouble, depending on the nature of the scam and what they determine your involvement to be. It will certainly badly affect your banking history (ChexSystems tracks how we all treat bank accounts, much like the credit agencies do with our credit), so you may have trouble opening bank accounts. So there are many consequences to this to think about, and it's why you JUST SAY NO!! Don't walk away from this -- RUN!!!
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Why are credit cards preferred in the US?
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There are several reasons why credit cards are popular in the US: On the other hand, debit cards do not have any of these going for them. A debit card doesn't make much money for the bank unless you overdraw or something, so banks don't have incentive to push you to use them as much. As a result they don't offer rewards other benefits. Some people say the ability to spend more than you have is a downside of a credit card. But it's really an upside. The behavior of doing that when it isn't needed is bad, but that's not the card's fault, it's the users'. You can get a credit card with a very small limit if this is an issue for you. The question I find interesting is why debit cards are more popular in your home country. I can't think of any advantage they offer besides free cash back. But most people in the US don't use cash much either. I have to think in your home country the banks have a different revenue model or perhaps your country isn't as eager to offer tons of easy credit to everyone as the US is.
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Can you deduct hobby expenses up to hobby income in Canada?
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Yes, your business needs to be in the business of making money in order for you to deduct the expenses associated with it. I suppose in theory this could mean that if you take in $10,000 and spend $30,000 every year, you not only don't get a net deduction of $20,000 (your loss) but you have to pay tax on $10,000 (your revenue). However this is super fixable. Just only deduct $9500 of your expenses. Tada! Small profit.For all the gory details, including how they consider whether you have an expectation of profits, see http://www.cra-arc.gc.ca/E/pub/gl/p-176r/p-176r-e.html This "expectation of profit" rule appears to apply to things like "I sell home décor items (or home decorating advice) and therefore need to take several multi week trips to exotic vacation destinations every year and deduct them as business expenses." If you're doing woodworking or knitting in your home and selling on Etsy you don't particularly have any expenses. It's hard to imagine a scenario where you consistently sell for less than the cost of materials and then end up dinged on paying tax on revenue.
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Analysis of Valuation-Informed Indexing?
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My reaction to this is that your observation @D.W. is spot on correct: It sounds like long-term market timing: trying to do a better job than the rest of the market at predicting, based upon a simple formula, whether the market is over-priced or under-priced. I read the post by the founder of Valuation Informed Indexing, Rob Bennet. Glance at the comments section. Rob clearly states that he doesn't even use his own strategy, and has not owned, nor traded, any stocks since 1996! As another commenter summarizes it, addressing Rob: This is 2011. You’ve been 100% out of stocks — including indexes — since 1996? That’s 15 years of taking whatever the bond market, CDs or TIPS will yield (often and currently less than 2%)... I’m curious how you defend not following your own program even as you recommend it for others? Rob basically says that stocks haven't shown the right signals for buying since 1996, so he's stuck with bonds, CD's and fixed-income instead. This is a VERY long-term horizon point of view (a bit of sarcasm edges in from me). Answering your more general question, what do I think of this particular Price/ Earnings based ratio as a way to signal asset allocation change i.e. Valuation Informed Investing? I don't like it much.
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401(k) not fully vested at time of acquisition
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Unfortunately, the money that is not vested is not yours. It belongs to your employer. They have promised to give it to you after you have been with the company for a certain length of time, but if you aren't still with the company after that time, no matter what the reason, the money never becomes yours. Sorry to hear about this. It would have been nice if your company had waived the vesting requirement like this guy's employer did, but I don't think they are required to do so, unfortunately. If it's a lot of money, you could ask an attorney, but as @JoeTaxpayer said, AT&T and IBM probably know what they are doing.
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