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Freehold and Leasehold for Pub/Bar?
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In the strictest sense of the words, Freehold and leasehold mean what you think they do. Freehold is that you own it outright and leasehold is a rental situation. That being said, there are scenarios like what Peter K. mentioned in his comment, where you're purchasing the building and business outright, but the land it sits on is actually being leased from a separate land-owner. You may also be seeing the business itself being offered as freehold or leasehold. In this case, you may be purchasing the business of the pub from a pub company, but the building the pub resides in is leased from a property owner. The "pub" would be the business plan, decor, alcohol partnerships, etc. but not the physical structure in which it resides. You should really look into hiring an Estate Agent to help you find what you're looking for. They will be able to assist in narrowing down your list, and may know of opportunities you're not seeing in ads.
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Applying for and receiving business credit
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Banks will usually look at 2 years worth of tax returns for issuing business credit. If those aren't available (for instance, for recently formed businesses), they will look at the personal returns of the owners. Unfortunately, it sounds like your friend is in the latter category. Bringing in another partner isn't necessarily going to help, either; with only two partners / owners, the bank would probably look at both owners' personal tax returns and credit histories. It may be necessary to offer collateral. I'm sorry I can't offer any better solutions, but alternative funding such as personal loans from family & friends could be necessary. Perhaps making them partners in exchange for capital.
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Is there a candlestick pattern that guarantees any kind of future profit?
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I did a historical analysis a few years back of all well-known candlestick patterns against my database of 5 years worth of 1-minute resolution data of all FTSE100 shares. There wasn't a single pattern that showed even a 1% gain with 60% reliability. Unfortunately I don't have spread data other than for a handful of days where I recorded live prices rather than minutely summaries, but my suspicion is that most of the time you wouldn't even earn back the spread on such a trade.
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Should I buy a home or rent in my situation?
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If I were you, I would rent. Wait to buy a home. Here is why: When you say that renting is equal in cost to a 30-year mortgage, you are failing to consider several aspects. See this recent answer for a list of things that need to be considered when comparing buying and renting. You have no down payment. Between the two of you, you have $14,000, but this money is needed for both your emergency fund and your fiancée's schooling. In your words: "we can’t reeaallllly afford a home." A home is a big financial commitment. If you buy a home before you are financially ready, it will be continuous trouble. If you need a cosigner, you aren't ready to buy a home. I would absolutely advise whoever you are thinking about cosigning for you not to do so. It puts them legally on the hook for a house that you can't yet afford. You aren't married yet. You should never buy something as big as a home with someone you aren't married to; there are just too many things that can go wrong. (See comments for more explanation.) Wait until you are married before you buy. Your income is low right now. And that is okay for now; you've been able to avoid the credit card debt that so many people fall into. However, you do have student loans to pay, and taking on a huge new debt right now would be potentially disastrous for you. Your family income will eventually increase when your fiancée gets her degree and gets a job, and at that time, you will be in a much better situation to consider buying a house. You need to move "ASAP." Buying a house when you are in a hurry is a generally a bad idea. When you look for a home, you need to take some time looking so you aren't rushed into a bad deal that you will regret. Even if you decide you want to buy, you should first find a place to rent; then you can take your time finding the right house. To answer your question about escrow: When you own a house, two of the required expenses that you will have besides the mortgage payment are property taxes and homeowner's insurance. These are large payments that are only due once a year. The bank holding the mortgage wants to make sure that they get paid. So to help you budget for these expenses and to ensure that these expenses are paid, the bank will add these to your monthly mortgage payment, and set them aside in a savings account (called an escrow account). Then when these bills come due once a year, they are paid for out of the escrow account.
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Understanding the symbols next to the Ticker
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I don't understand what the D, to the right of APPLE INC, means. This means the graph below is for the "D". There is selection at top and you can change this to Minutes [5,20,60,etc], Day, Week [W], Month [M] I'm not understanding how it can say BATS when in actuality AAPL is listed on the NASDAQ. Do all exchanges have info on every stock even from other exchanges and just give them to end-users at a delayed rate? BATS is an exchange. A stock can be listed on multiple exchange. I am not sure if AAPL is also listed on BATS. However looks like BATS has agreement with major stock exchanges to trade their data and supplies this to trading.com
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Does an employee have the right to pay the federal and state taxes themselves instead of having employer doing it?
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No. An employer is legally obliged to deduct taxes from your pay cheque and send them to the IRS. The only way round that is to either provide evidence of deductions that would reduce your tax bill to nothing, or to become self-employed.
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How to account for a shared mortgage in QuickBooks Online?
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How you should record the mortgage payments depends on if you are trying to achieve correct accounting, according to the standards, or if you are just tracking everything for you and your friends. If you're just keeping track for personal reasons, I'd suggest that you set up your check (or journal entry, your preference) how you'd like it to be recorded. Then, memorize that transaction. This allows you to use it as many times as you need to, without having to set it up each time. (Also note: there is no way to record a transaction that decreases cash and increases equity.) If you're trying to keep track of everything according to accounting standards, which it should be if you've set up an official business, then you have a lot more tracking to do with each payment. Mortgage payments technically do not affect the equity accounts of the owners. Each mortgage payment should decrease the bank balance, increase interest expense and decrease the mortgage balance, not to mention tracking any escrow account you may have. The equity accounts would be affected if the owners are contributing funds to the bank account, but equity would increase at the time the funds are deposited, not when the mortgage payments are made. Hope this helps!
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Can I pay taxes using bill pay from my on-line checking account?
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And if you need to pay business taxes outside of the regular US 1040 form, you can use the IRS' Electronic Federal Tax Payment System (EFTPS). Basically, you enroll your bank accounts, and you can make estimated, penalty, etc. payments. The site can be found here.
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Should I negotiate a lower salary to be placed in a lower tax bracket?
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If your employer offers a 401k retirement plan then you can contribute a portion of your salary to your retirement and that will lower your effective income to remain in the 15% bracket (although as others have pointed out, only the dollars that exceed the 15% bracket will be taxed at the higher rate anyway). AND if your employer offers any kind of 401k matching contribution, that's effectively a pay-raise or 100% return on investment (depending on how you prefer to look at it).
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Who creates money? Central banks or commercial banks?
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A central bank typically introduces new money into the system by printing new money to purchase items from member banks. The central bank can purchase whatever it chooses. It typically purchases government bonds but the Federal Reserve purchased mortgage-backed-securities (MBS) during the 2008 panic since the FED was the only one willing to pay full price for MBS after the crash of 2008. The bank, upon receipt of the new money, can loan the money out. A minimum reserve ratio specifies how much money the bank has to keep on hand. A reserve ratio of 10% means the bank must have $10 for every $100 in loans. As an example, let's say the FED prints up some new money to purchase some office desks from a member bank. It prints $10,000 to purchase some desks. The bank receives $10,000. It can create up to $100,000 in loans without exceeding the 10% minimum reserve ratio requirement. How would it do so? A customer would come to the bank asking for a $100,000 loan. The bank would create an account for the customer and credit $100,000 to the customer's account. There is a problem, however. The customer borrowed the money to buy a boat so the customer writes a check for $100,000 to the boat company. The boat company attempts to deposit the $100,000 check into the boat company's bank. The boat company's bank will ask the originating bank for $100,000 in cash. The originating bank only has $10,000 in cash on hand so this demand will immediately bankrupt the originating bank. So what actually happens? The originating bank actually only loans out reserves * (1 - minimum reserve ratio) so it can meet demands for the loans it originates. In our example the bank that received the initial $10,000 from the FED will only loan out $10,000 * (1-0.1) = $9,000. This allows the bank to cover checks written by the person who borrowed the $9,000. The reserve ratio for the bank is now $1,000/$9,000 which is 11% and is over the minimum reserve requirement. The borrower makes a purchase with the borrowed $9,000 and the seller deposits the $9,000 in his bank. The bank that receives that $9,000 now has an additional $9,000 in reserves which it will use to create loans of $9,000 * (1 - 0.1) = $8100. This continual fractional reserve money creation process will continue across the entire banking system resulting in $100,000 of new money created from $10,000. This process is explained very well here.
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Is there a return-on-investment vs risk graph anywhere?
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There may well be several such graphs, I expect googling will turn them up; but the definition of risk is actually quite important here. My definition of risk might not be quite the same as yours, so the relative risk factors would be different. For example: in general, stocks are more risky than bonds. But owning common shares in a blue-chip company might well be less risky than owning bonds from a company teetering on the edge of bankruptcy, and no single risk number can really capture that. Another example: while I can put all my money in short-term deposits, and it is pretty "safe", if it grows at 1% so that my investment portfolio cannot fund my retirement, then I have a risk that I will run out of money before I shuffle off this mortal coil. How to capture that "risk" in a single number? So you will need to better define your parameters before you can prepare a visual aid. Good Luck
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Is it legal if I'm managing my family's entire wealth?
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Aside from the fact that there are massive problems with taxes, liability, fiduciary responsibility, and (assuming you're accepting any sort of compensation at all) licensing. The mere fact that you're asking this question indicates that you're probably not suitably qualified to handle this for others. Why not have someone qualified handle this?
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Debit cards as bad as credit cards?
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This sounds more like a behavioral than a debit card issue to me TBH. Did you put the money you're putting away into a separate savings account that you (mentally) labelled 'for investment'? That's pretty much what I do (and I have a couple of savings accounts for exactly that reason) and even though I know I've got $x in the savings accounts, the debit card I carry only lets me spend money from my main bank account. By the time I've transferred the money, the urge to spend has usually gone away, even though it often only takes seconds to make the transfer.
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What can I replace Microsoft Money with, now that MS has abandoned it?
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I use GnuCash which I really like. However, I've never used any other personal finance software so I can't really compare. Before GnuCash, I used an Excel spreadsheet which works fine for very basic finances. Pros Cons
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Looking to buy a property that's 12-14x my income. How can it be done?
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It is your choice to have "insignificant income", and that has consequences. One is that you cannot borrow money to purchase a home independent of your credit score. In order to purchase a home you must also have the ability to repay in addition to a good history. IMHO your question suggest that you have a unrealistic outlook on life. If you cannot come up with 10K, how can you afford a home? What happens when the HVAC system goes out? While I certainly hope you meet and exceed your goals, you can change your whole world by simply getting a job at a fast food restaurant. When you are not working you can then do the entrepreneurship thing. Life is often a choice of priorities. If you choose to "back-burner" the entrepreneur dream, for a time, and choose to focus on earning the best possible wage. Then perhaps you could afford to purchase a place of your own.
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Why is the highest quintile the only quintile whose wealth exceeds its income?
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In a business environment, this phenomenon could be easily explained by 'operational leverage'. Operational leverage is the principle that increasing revenues by a small amount can have a disproportionately large impact on net income. Consider this example: you run a business that rents out a factory and produces goods to sell to consumers. The rent costs you $10k / month, and all of your other costs depend on how many goods you produce. Assume each good gives you $10 in profit, after factoring your variable costs. If you sell 1,000 units, you break-even, because your variable profit will pay for your rent. If you sell 1,100 units, you make $1,000 net profit. If you sell 1,200 units, you double your overall profit, making $2,000 for the month. Operational leverage is the principle that adding incremental revenue will have a greater impact than the revenue already received, because your fixed costs are already 'paid for'. Similarly in personal finance, consider these scenarios: You have $1,000 in monthly expenses, and make $1,000 - your monthly savings (and therefore your wealth) will be zero. You have $1,000 in monthly expenses, and make $1,100 - your monthly savings will be $100 per month. You have $1,000 in monthly expenses, and make $1,200 - increasing your income by ~10% has allowed your monthly savings double, at $200 per month. You have $1,000 in monthly expenses, and make $2,000 - your monthly savings are 5 times higher, when your income only increased by ~80%. Now in the real world, when someone makes more money, they will increase their expenses. This is because spending money can increase one's quality of life. So the incline does not happen quite so quickly - as pointed out by @Pete & @quid, there comes a point where increased spending provides someone with less increase in quality of life - at that point, savings really would quickly ramp up as income increases incrementally. But assuming you live the same making $2,000 / month as $1,000 / month, you can save, every month, a full month's worth of living expenses. This doesn't even factor in the impact of earning investment income on those savings. As to why the wealth exceeds income at that specific point, I couldn't say, but what I've outlined above should show how it is quite reasonable that the data is as-reported.
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How accurate is Implied Volatility in predicting future moves?
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How accurate is Implied Volatility in predicting future moves? How would you measure this? If the implied volatility says that there's a 1% chance that a stock will double, and it doubles, was it "right"? You could also say that it says there's a 99% change that it doesn't double, so was it "wrong"? What you could measure is the variance of daily returns over a time period, and see how well that compares to implied volatility, but there's no way to compare IV with the absolute price movement. If a stock goes up 0.01 each day, then the variance is 0 (the daily returns are the same each day), but over 250 the stock would go up $2.50.
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Putting the gordon equation into practice
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The Gordon equation does not use inflation-adjusted numbers. It uses nominal returns/dividends and growth rates. It really says nothing anyone would not already know. Everyone knows that your total return equals the sum of the income return plus capital gains. Gordon simply assumes (perfectly validly) that capital gains will be driven by the growth of earnings, and that the dividends paid will likewise increase at the same rate. So he used the 'dividend growth rate' as a proxy for the 'earnings growth rate' or 'capital gains rate'. You cannot use inflation-removed estimates of equity rates of return because those returns do not change with inflation. If anything they move in opposite directions. Eg in the 1970's inflation the high market rates caused people to discount equity values at larger rates --- driving their values down -- creating losses.
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A friend wants to use my account for a wire transfer. Is this a scam or is it legitimate?
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A friend since July online and big business talks and trust/money forwards. Usually a question "is this a scam or legitimate?" is hard to answer since obviously scams are modelled after legitimate stories (or they'd easily fail). If there were bookmakers for "scam or legitimate", this one would easily gather odds of 10000:1. The only plausible reason for this to be legitimate would be to defraud the scam-or-legitimate bookmakers. At any rate, Exxon is a large company and has to obey labor laws. They cannot set up operations in a manner where their workers may not have access to their salary for prolonged times without easy remedy. Drop communications immediately, don't open them, don't read them. They hook you with emotional investment. They will redouble efforts if it appears you are slipping out of their reach. Explanations will become more plausible, more pressing, more emotionally charged. You are a big promising fish and they won't let you swim off without a serious struggle to rehook you. Hand your communication so far to law enforcement. That may help with not having to figure this out on your own.
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Carry-forward of individual losses, with late-filed past taxes [US]
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The 2012 return was due 4/15/2013 (I'm assuming it didn't fall on a weekend). No late filing penalty if there was no tax due, but he has until 4/15/2016 to file for a refund or to document anything that should have carried forward.
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Is equity research from large banks reliable?
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They aren't necessarily trustworthy. Many institutions claim to have a "Chinese Wall" between their investment banking arms and analysis arms. In practice, these walls have sometimes turned out to be entirely imaginary. That is, analysis is published with an eye to what is good for their investment banking business. One of the most notorious cases of this was Henry Blodget, an analyst with Merrill Lynch during the dot-com bubble. Blodget became a star analyst after he correctly predicted Amazon would hit $400/share within a year. However some of his later public analysis dramatically conflicted with his private comments. Famously when he started covering GoTo.com, rating it as "neutral to buy", he was asked "What's so interesting about Goto except banking fees????" Blodget replied, "nothin". Eventually he was permanently banned from the securities industry.
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Why do so many NFL (pro football) players have charities?
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BobbyScon's answer really covers this, but perhaps isn't sufficiently explicit. Reason 1 of the quotation is the largest, by far: Get an Immediate Tax Deduction, but Give Later: You get the tax deduction when the foundation is funded, then make your charitable gifts over time. Having a "personal" foundation means that you make donations whenever it is appropriate from a personal finance point of view, but then actually perform the charitable giving in a time that is convenient. So you fund the foundation on Dec. 31, say; that gets the money out of your hands, and out of your taxable income, for the prior tax year. Then you're not required to do anything else with that money until a time and place where it's convenient to you. In many cases, they set it up not as a foundation but as a Donor Advised Fund. These are of late becoming extremely popular among the wealthy, largely the ease of setting them up and the above. The other major advantage of a Donor Advised Fund is simplicity in tax season: you have exactly one charitable donation recipient, with one receipt (or one set of them if you donate over time).
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Should I Purchase Health Insurance Through My S-Corp
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I'm not sure about reimbursement, you'll have to talk to a tax adviser (CPA/EA licensed in your State). From what I know, if you pay your own insurance premiums - they're not deductible, and I don't think reimbursements change that. But again - not sure, verify. However, since you're a salaried employee, even if your own, you can have your employer cover you by a group plan. Even if the group consists of only you. Then, you'll pay your portion as part of the pre-tax salary deduction, and it will be deductible. The employer's portion is a legitimate business expense. Thus, since both the employee and the employer portions are pre-tax - the whole cost of the insurance will be pre-tax. The catch is this: this option has to be available to all of your employees. So if you're hiring an employee a year from now to help you - that employee will be eligible to exactly the same options you have. You cannot only cover owner-employees. If you don't plan on hiring employees any time soon, this point is moot for you, but it is something to keep in mind down the road as you're building and growing your business.
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Can someone help me understand my student loans?
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Paying the minimum balance on a loan can be DEVASTATING and is highly UN-RECOMMENDED. It is important you understand your loan and the terms associated with it. Loans are given for a period of time but if you pay the minimum it does NOT mean you will pay it all off by the end. When paying a loan money is applied to the interest first and any extra amount is then applied to the principle. Here's an example: If I have a $12 loan for 1 year. The interest is 100%. My minimum payment each month is $1. If I pay that minimum only I will be stuck paying $12 at the end of the loan. Why you ask? because each month I'm being charged $1 interest and the payment I am making is only going towards that interest. However if I paid $2 instead now $1 goes to the principal (the original $12 I borrowed). This means that next month I will only be charged interest on $11 dollars instead of $12. You need to know how much is going towards the interest of your loan and how much is going towards the principle you can speak with your bank about this and they will help you understand. In many cases they actually provide you with the numbers on your statment with examples of how long it would take to payoff your loan with minimum only and how long it would take if you added an extra x amount each month. I recommend using the Snowball Method to pay of your debt. It's simple and effective. How much you should add to each monthly payment depends on how much you can afford to add. Here are some calculators you can play around with: CNN Money Bank Rate Calc Edit: So with the additional information you provided we can estimate that you have about 2200 free cash flow each month(that's your cash after you pay all your bills). We can put away 500 each month for a rainy day fund, just to be safe.(job loss, accidents, or anything we can't predict) So assuming that is all your expenses including the money you spend on entertainment. That leaves you with $1700 you can add on to your loan payments. So you can pay off your third loan in 1 month. Then add the remaining balance to the 2nd loan. With this income it should take you less then a year to pay off all your loans.
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Can't the account information on my checks be easily used for fraud?
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Yes, those numbers are all that is needed to withdraw funds, or at least set online payment of bills which you don't owe. Donald Knuth also faced this problem, leading him to cease sending checks as payment for finding errors in his writings.
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What is the opposite of a hedge?
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I'd say the opposite of hedging is speculating. If you are convinced an asset will appreciate in value, or rather the probability of gains is enough to induce you to hold the asset, you are a speculator. There are lots of ways of speculating, including holding risky assets without hedging that risk and possibly magnifying that risk and return via leverage or the embedded leverage in a derivative contract. Generally speaking, if in expectation you are paying to reduce your risk, you are a hedger. If you are (in expectation) being paid to bear the risk that otherwise someone else would bear, you are a speculator. The word speculation has been tainted by politicians and others trying to vilify the practice, but at the end of the day it's what we are all doing when we buy stock or any other risky asset.
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Canada: New mortgage qualification rules, 2010: Why, what, & when in effect?
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The new mortgage qualification rules were introduced to cool a hot Canadian housing real estate market. The rules are a pre-emptive measure intended to avoid a bubble (and later crash) in real estate. The government wants to make sure anybody buying a house can handle higher interest rates. Those rates, currently at record lows, are expected to go up later this year and into the future. The tighter mortgage rules include: Borrowers will need to qualify against a minimum standard 5-year fixed rate mortgage, even if they'll contract their mortgage at a lower or variable rate. Previously, the 3-year fixed rate mortgage was used as the minimum qualification standard. The amount a homeowner can borrow in a refinanced mortgage drops to 90% of the home value, down from 95% of the home value. A home is not meant to be an ATM machine. Anybody wanting to borrow to buy an investment property – i.e. a property that won't be their principal residence – will need a 20% downpayment instead of a 5% downpayment. The new rules go into effect April 19th, 2010. However, according to the backgrounder (see below): Exceptions would be allowed after April 19 where they are needed to satisfy a binding purchase and sale, financing, or refinancing agreement entered into before April 19, 2010. Definitive information about the new rules can be found at the Department of Finance of Canada. Specifically, refer to: Some additional news media sources:
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How fast does the available amount of gold in the world increase due to mining?
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For the last few years around 2,500 metric tonnes of gold have been produced each year. This is on top of existing supply of 160,000 metric tonnes. Existing yearly production is around 1.5% of the existing supply. Charts from here.
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What could cause a stock to trade below book value?
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all of these examples are great if you actually believe in fundamentals, but who believes in fundamentals alone any more? Stock prices are driven by earnings, news, and public perception. For instance, a pharma company named Eyetech has their new macular degeneration drug approved by the FDA, and yet their stock price plummeted. Typically when a small pharma company gets a drug approved, it's off to the races. But, Genetech came out said their macular degeneration drug was going to be far more effective, and that they were well on track for approval.
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Which practice to keep finances after getting married: joint, or separate?
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This particular topic has probably been beaten to death already. But from the other comments, it seems that splitting finances them is a popular solution on this forum. I can see the individual benefit of this - makes it easy to go buy whatever you want. But it can hurt too. What if the situation changes, and you are no longer employed? Your setup will cause stress because now you are having to ask your spouse to pay for everything. If this works for you - congratulations. But, fights may ensue - divorce may follow. I would like to offer an alternative. In my situation, I bring home a paycheck, while my wife does not. In this case, each of us paying 50% would simply not work. Not to say my wife doesn't work - she works her butt off cleaning house, raising kids, etc. What we do is have any money that comes in go into a pot. We budget (Oh no, the B-word!) out regular expenses (lights, gas, rent). Anything that isn't allocated goes towards retirement savings (In the US, an IRA is an Individual Retirement Account), or towards a war-chest for big project (such as home ownership). And each of us gets the same "blow money" allowance every week that we can do with as we please. Keep in mind, using this mentality allows the possibility of me staying home at some point in the future when my wife goes back to her dream job. And there is no financial stress about "whom owns what", or "who paid for what". We own it because we decided to pay for it.
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If gold's price implodes then what goes up?
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Ok, I think what you're really asking is "how can I benefit from a collapse in the price of gold?" :-) And that's easy. (The hard part's making that kind of call with money on the line...) The ETF GLD is entirely physical gold sitting in a bank vault. In New York, I believe. You could simply sell it short. Alternatively, you could buy a put option on it. Even more risky, you could sell a (naked) call option on it. i.e. you receive the option premium up front, and if it expires worthless you keep the money. Of course, if gold goes up, you're on the hook. (Don't do this.) (the "Don't do this" was added by Chris W. Rea. I agree that selling naked options is best avoided, but I'm not going to tell you what to do. What I should have done was make clear that your potential losses are unlimited when selling naked calls. For example, if you sold a single GLD naked call, and gold went to shoot to $1,000,000/oz, you'd be on the hook for around $10,000,000. An unrealistic example, perhaps, but one that's worth pondering to grasp the risk you'd be exposing yourself to with selling naked calls. -- Patches) Alternative ETFs that work the same, holding physical gold, are IAU and SGOL. With those the gold is stored in London and Switzerland, respectively, if I remember right. Gold peaked around $1900 and is now back down to the $1500s. So, is the run over, and it's all downhill from here? Or is it a simple retracement, gathering strength to push past $2000? I have no idea. And I make no recommendations.
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In US, is it a good idea to hire a tax consultant for doing taxes?
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Good professional tax advice is expensive. If your situation is simple, then paying someone doesn't give you more than you could get from a simple software package. In this case, doing your own taxes will save you money this year, and also help you next year, as your situation grows steadily more complex. If you don't do your own taxes when you're single with a part time job, you'll never do it when you have a family, a full time job, a side business, and many deductions. Learning how to do your taxes over time, as your 'tax life' becomes complex, is a valuable skill. If your situation is complex, you will need pay a lot to get it done correctly. Sometimes, that cost is worthwhile. At bare minimum, I would say 'attempt to do your taxes yourself, first'. This will force you to organize your files, making the administrative cost of doing your return lower (ie: you aren't paying your tax firm to sort your receipts, because you've already ordered them nicely with your own subtotals, everything perfectly stapled together). If your situation is complex, and you find a place to get it done cheaply (think H&R Block), you will not be getting value for service. I am not saying a low-end tax firm will necessarily get things wrong, but if you don't have a qualified professional (read: university educated and designated) doing your return, the complexities can be ignored. Low-end tax firms typically hire seasonal staff, train them for 1-2 weeks, and mostly just show them how to enter tax slips into the same software you could buy yourself. If you underpay for professional services, you will pay the price, metaphorically speaking. For your specific situation, I strongly recommend you have a professional service look at your returns, because you are a non-resident, meaning you likely need to file in your home country as well. Follow what they do with your return, and next year, see how much of it you can do yourself. Before you hire someone, get a fee quote, and shop around until you find someone you are comfortable with. $1k spent now could save you many headaches in the future.
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How to find out if I have a savings account already?
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If you're in the UK, there's a free service here that lets you trace lost bank accounts. If you're in a different country, try Googling to see if that country has a similar service.
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How to compute real return including expense ratio
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Returns reported by mutual funds to shareholders, google, etc. are computed after all the funds' costs, including Therefore the returns you see on google finance are the returns you would actually have gotten.
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Beyond RRSP deductions, how does a high income earner save on taxes?
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That's not especially high income, and while I can't speak for Canadians, most of us south of the border just pay the tax. There are tax-advantged retirement savings plans, and charitable donations are often offset by a tax credit, and there are some tax incentives for mortgages, and so on.. but generally the right answer is to just accept that the income tax money was never yours to begin with.
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Why do requirements after a margin call vary?
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I believe the reasons:
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Lending to the bank
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The easiest way would be to set up a common savings account. Most of them pay some meager interest rate, and over one night it would be especially meager. A Certificate of Deposit is another way, but you'd have to lock the funds in for an extended period of time.
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Long term drip (dividend reinvestment plan) stock
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There are ETFs and mutual funds that pay dividends. Mutual funds and ETFs are quite similar. Your advisor is correct regarding future funds you invest. But you already had incurred the risk of buying an individual stock. That is a 'sunk cost'. If you were satisfied with the returns you could have retained the HD stock you already owned and just put future moneys into an ETF or mutual fund. BTW: does your advisor receive a commission from your purchase of a mutual fund? That may have been his motivation to give you the advice to sell your existing holdings.
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How to Calculate Profit and Loss for trading position?
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Month to date For the month to date (MTD), the price on Feb 28th is $4.58 and the price on March 16th is $4.61 so the return is which can be written more simply as The position is 1000 shares valued at $4580 on Feb 28th, so the profit on the month to date is Calendar year to date For the calendar year to date (YTD), the price on Dec 31st is $4.60 and the price on Feb 28th is $4.58 so the return to Feb 28th is The return from Feb 28th to March 16th is 0.655022 % so the year to date return is or more directly So the 2011 YTD profit on 1000 shares valued at $4600 on Dec 31st is Year to date starting Dec 10th For the year to date starting Dec 10th, the starting value is and the value on Dec 31st is 1000 * $4.60 = $4600 so the return is $4600 / $4510 - 1 = 0.0199557 = 1.99557 % The year to date profit is therefore Note - YTD is often understood to mean calendar year to date. To cover all the bases state both, ie "calendar YTD (2011)" and "YTD starting Dec 10th 2010". Edit further to comment For the calendar year to date, with 200 shares sold on Jan 10th with the share price at $4.58, the return from Dec 31st to Jan 10th is The return from Jan 10th to Feb 28th is The return from Feb 28th to March 16th is The profit on 1000 shares from Dec 31st to Jan 10th is $4600 * -0.00434783 = -$20 The profit on 800 shares from Jan 10th to Feb 28th is zero. The profit on 800 shares from Feb 28th to March 16th is So the year to date profit is $4.
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When the market crashes, should I sell bonds and buy equities for the inevitable recovery?
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In a comment you say, if the market crashes, doesn't "regress to the mean" mean that I should still expect 7% over the long run? That being the case, wouldn't I benefit from intentionally unbalancing my portfolio and going all in on equities? I can can still rebalance using new savings. No. Regress to the mean just tells you that the future rate is likely to average 7%. The past rate and the future rate are entirely unconnected. Consider a series: The running average is That running average is (slowly) regressing to the long term mean without ever a member of the series being above 7%. Real markets actually go farther than this though. Real value may be increasing by 7% per year, but prices may move differently. Then market prices may revert to the real value. This happened to the S&P 500 in 2000-2002. Then the market started climbing again in 2003. In your system, you would have bought into the falling markets of 2001 and 2002. And you would have missed the positive bond returns in those years. That's about a -25% annual shift in returns on that portion of your portfolio. Since that's a third of your portfolio, you'd have lost 8% more than with the balanced strategy each of those two years. Note that in that case, the market was in an over-valued bubble. The bubble spent three years popping and overshot the actual value. So 2003 was a good year for stocks. But the three year return was still -11%. In retrospect, investors should have gone all in on bonds before 2000 and switched back to stocks for 2003. But no one knew that in 2000. People in the know actually started backing off in 1998 rather than 2000 and missed out on the tail end of the bubble. The rebalancing strategy automatically helps with your regression to the mean. It sells expensive bonds and buys cheaper stocks on average. Occasionally it sells modest priced bonds and buys over-priced stocks. But rarely enough that it is a better strategy overall. Incidentally, I would consider a 33% share high for bonds. 30% is better. And that shouldn't increase as you age (less than 30% bonds may be practical when you are young enough). Once you get close to retirement (five to ten years), start converting some of your savings to cash equivalents. The cash equivalents are guaranteed not to lose value (but might not gain much). This gives you predictable returns for your immediate expenses. Once retired, try to keep about five years of expenses in cash equivalents. Then you don't have to worry about short term market fluctuations. Spend down your buffer until the market catches back up. It's true that bonds are less volatile than stocks, but they can still have bad years. A 70%/30% mix of stocks/bonds is safer than either alone and gives almost as good of a return as stocks alone. Adding more bonds actually increases your risk unless you carefully balance them with the right stocks. And if you're doing that, you don't need simplistic rules like a 70%/30% balance.
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What U.S. banks offer two-factor authentication (such as password & token) for online banking?
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Bank of America supports two-factor authentication using SMS messages, similar to PayPal. You can enable the feature from Online Banking under Customer Service -> SafePass Settings. Update: Over the weekend of July 28th, 2012, the SafePass control on the authentication page was updated to simple HTML + JavaScript instead of Flash, so that it is now possible to login from Safari on iOS, among others.
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What's the benefit of buying shares in a wholly owned subsidiary if you own parent company stock?
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The parent company is likely to own other assets, which can be badly performing. Spinoffs are typically the better performers. There are also other factors, for example certain big funds cannot invest in sectors like tobacco or defense and for conglomerates it makes sense to spin those assets off to attract a wider investor audience.
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Best way to day trade with under $25,000
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You avoid pattern day trader status by trading e-mini futures through a futures broker. The PDT rules do not apply in the futures markets. Some of the markets that are available include representatives covering the major indices i.e the YM (DJIA), ES (S&P 500) and NQ (Nasdaq 100) and many more markets. You can take as many round-turn trades as you care to...as many or as few times a day as you like. E-mini futures contracts trade in sessions with "transition" times between sessions. -- Sessions begin Sunday evenings at 6 PM EST and are open through Monday evening at 5 PM EST...The next session begins at 6 pm Monday night running through Tuesday at 5 PM EST...etc...until Friday's session close at 5 PM EST. Just as with stocks, you can either buy first then sell (open and close a position) or short-sell (sell first then cover by buying). You profit (or lose) on a round turn trade in the same manor as you would if trading stocks, options, ETFs etc. The e-mini futures are different than the main futures markets that you may have seen traders working in the "pits" in Chicago...E-mini futures are totally electronic (no floor traders) and do not involve any potential delivery of the 'product'...They just require the closing of positions to end a transaction. A main difference is you need to maintain very little cash in your account in order to trade...$1000 or less per trade, per e-mini contract...You can trade just 1 contract at a time or as many contracts as you have the cash in your account to cover. "Settlement" is immediate upon closing out any position that you may have put on...No waiting for clearing before your next trade. If you want to hold an e-mini contract position over 2 or more sessions, you need to have about $5000 per contract in your account to cover the minimum margin requirement that comes into play during the transition between sessions... With the e-minis you are speculating on gaining from the difference between when you 'put-on' and "close-out" a position in order to profit. For example, if you think the DJIA is about to rise 20 points, you can buy 1 contract. If you were correct in your assessment and sold your contract after the e-mini rose 20 points, you profited $100. (For the DJIA e-mini, each 1 point 'tick' is valued at $5.00)
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First Time Home Buyers - Down Payment, PMI and Points
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The question Why would refinancing my mortgage increase my PMI, even though rates are lower? contains a decent discussion of PMI. It's based on the total amount you borrow, not just the difference to 80% LTV. For easy math, Say you put 15% down on a $100K house. Your PMI is 1.1%, not on the 'missing' $5000, but on the $85000 balance. So you are paying $935/yr extra due to the $5000 you didn't have available. In addition to the mortgage itself. Even at 90% LTV, you'd pay $990/yr for the fact that you are short $10,000. Other than this discussion of PMI calculations, Chad's answer is pretty thorough.
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CD interest rate US vs abroad, is there a catch?
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Part 1 Quite a few [or rather most] countries allow USD account. So there is no conversion. Just to illustrare; In India its allowed to have a USD account. The funds can be transfered as USD and withdrawn as USD, the interest is in USD. There no conversion at any point in time. Typically the rates for CD on USD account was Central Bank regulated rate of 5%, recently this was deregulated, and some banks offer around 7% interest. Why is the rate high on USD in India? - There is a trade deficit which means India gets less USD and has to pay More USD to buy stuff [Oil and other essential items]. - The balance is typically borrowed say from IMF or other countries etc. - Allowing Banks to offer high interest rate is one way to attract more USD into the country in short term. [because somepoint in time they may take back the USD out of India] So why isn't everyone jumping and making USD investiments in India? - The Non-Residents who eventually plan to come back have invested in USD in India. - There is a risk of regulation changes, ie if the Central Bank / Country comes up pressure for Forex Reserves, they may make it difficut to take back the USD. IE they may impose charges / taxes or force conversion on such accounts. - The KYC norms make it difficult for Indian Bank to attract US citizens [except Non Resident Indians] - Certain countries would have explicit regulations to prevent Other Nationals from investing in such products as they may lead to volatility [ie all of them suddenly pull out the funds] - There would be no insurance to foreign nationals. Part 2 The FDIC insurance is not the reason for lower rates. Most countires have similar insurance for Bank deposits for account holdes. The reason for lower interst rate is all the Goverments [China etc] park the excess funds in US Treasuries because; 1. It is safe 2. It is required for any international purchase 3. It is very liquid. Now if the US Fed started giving higher interest rates to tresaury bonds say 5%, it essentially paying more to other countries ... so its keeping the interest rates low even at 1% there are enough people [institutions / governemnts] who would keep the money with US Treasury. So the US Treasury has to make some revenue from the funds kept at it ... it lends at lower interest rates to Bank ... who in turn lend it to borrowers [both corporate and retail]. Now if they can borrow cheaply from Fed, why would they pay more to Individual Retail on CD?, they will pay less; because the lending rates are low as well. Part 3 Check out the regulations
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Can you sell a security through a different broker from which it was purchased?
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Many brokers allow you to transfer shares to another broker without selling them. It depends on what kind of account and who the broker is for what forms you might have to fill out and what other hoops you might have to jump through.
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Paying extra on a mortgage. How much can I save? [duplicate]
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When is the best time to pay? At the end of each year? If you save $1,000 each month at 1% so as to pay $12,000 at EOY on a 4.75% loan, you've lost "4.75% - 1% = 3.75%" over that year. (And that's presuming you put the money in a "high yield" online savings account.) Thus, the best time to pay is as soon as you have the money. EDIT: This all assumes that you have an emergency fund (more than the bare minimum $1K), zero other debt with a higher rate than 4.75% and that you are getting the full company match from 401(k).
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What can make a stock price rise without good news or results?
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It could be an endless number of reasons for it. It could simply just be a break through a long term resistance causing technical traders to jump in. It could be an analyst putting out a buy recommendation. If fundamentals have not changed then maybe the technicals have changed. Momentum could have reached an oversold position causing new buyers to enter the market. Without knowing the actual stock, its fundamentals and its technicals, no one will ever know exactly why.
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I'm 23 and was given $50k. What should I do?
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The best option for maximizing your money long-term is to contribute to the 401(k) offered by your employer. If you park your inheritance in a savings account you can draw on it to augment your income while you max out your contributions to the 401(k). You will get whatever the employer matches right off the bat and your gains are tax deferred. In essence you will be putting your inheritance into the 401(k) and forcing your employer to match at whatever rate they do. So if your employer matches at 50 cents on the dollar you will turn your 50 thousand into 75 thousand.
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Calculate time to reach investment goals given starting balance?
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Here's a formula; I had to go over to SEMath, use their MathJax to compose the answer and then paste this screen shot. As a result, I can't fix a typo: "ST" is the same as "St"
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Is there an advantage to keeping a liquid emergency fund if one also has an untapped line of credit?
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An emergency fund is your money, sitting in a bank, that you can use for emergency purposes. A line of credit is somebody else's money, that they've provisionally promised to let you borrow. But they can change their mind at any time.
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Purchasing first car out of college
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The .9% looks great, but it's not as relevant as the cost of the car itself. There are those who believe that one should never own a new car, that the first X years/miles of a car's life are the most expensive. The real question is how your budget is allocated. Is the car payment a small sliver or a large slice? How big is the housing wedge?
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Should you always max out contributions to your 401k?
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I think better advice would be always max out your 401K at least to the level that the company provides a match. For example, my company will match 50% up to 10% of your salary. Good luck finding another investment with a guaranteed immediate 50% return. Beyond the company match, it is probably good advice to put as much in the 401K as you can afford if you aren't disciplined enough to invest that money on your own. Otherwise it depends on a number of factors as to whether it is better to invest on your own or in the company plan.
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What can my relatives do to minimize their out of pocket expenses on their fathers estate
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Sure, it's irresponsible for an executor to take actions which endanger the estate. But what about passivity or inaction? Put it another way. Is it the obligation of the executor to avoid making revenue for the estate? Think about it - what a silly idea! Consider a 12-unit apartment building full of rent paying tenants. A tenant gives notice and leaves. So do 4 more. With only 7/12 tenants, the building stops being a revenue center and becomes a massive money pit. Is that acceptable? Heck no! Realistically this will be managed by a property management company, and of course they'll seek new tenants, not stopping merely because the owner died. This situation is not different; the same fiscal logic applies. The counter-argument is usually along the lines of "stuff might happen if you rent it out"... true. But the stuff that happens to abandoned houses is much worse, and much more likely: squatters, teen "urban explorers", pot growers, copper thieves, winter pipe freeze flooding and wrecking interiors, etc. Don't take my word on it -- ask your insurer for the cost of insuring an abandoned house vs. a rented one. Renting brings a chunk of cash that comes in from tenants - $12,000/year on a $1000/mo. rental. And that will barely pay the bills if you have a young mortgage on a freshly purchased house at recent market rates. But on an old mortgage, renting is like printing money. That money propagates first to the estate (presumably it is holding back a "fix the roof" emergency fund), and then to the beneficiaries. It means getting annual checks from the estate, instead of constantly being dunned for another repair. But I don't care about making revenue (outside of putting back a kitty to replace the roof). Even if it was net zero, it means the maintenance is being done. This being the point. It is keeping the house in good repair, occupied, insured, and professionally managed -- fit and ready for the bequest's purpose: occupancy of an aunt. What's the alternative? Move an aunt into a house that's been 10 years abandoned? Realistically the heirs are going to get tired/bored of maintaining the place at a total cash loss, maintenance will slip, and you'll be moving them into a neglected house with some serious issues. That betrays the bequest, and it's not fair to the aunts. Rental is a very responsible thing to do. The executor shouldn't fail to do it merely out of passivity. If you decide not to do it, there needs to be a viable alternative to funding the home's decent upkeep. (I don't think there is one). Excluding a revenue-producing asset from the economy is an expensive thing to do.
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How are the $1 salaries that CEOs sometimes take considered legal?
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Part of your first link has this statement that I suspect you are missing: However, Section 13(a)(1) of the FLSA provides an exemption from both minimum wage and overtime pay for employees employed as bona fide executive, administrative, professional and outside sales employees. Note that executive is in that list. As for the additional note: To qualify for exemption, employees generally must meet certain tests regarding their job duties and be paid on a salary basis at not less than $455 per week. Generally which means, "in most cases; usually." is not a universal qualifier and thus exceptions can exist. I'd imagine that restricted stock could be a way around some of the rules as there would be a monetary value there in the case of the stock for companies of a particular size.
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Changes in Capital Gains Tax in the US - Going to 20% in 2011?
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For the record, now that 2011 is here we know that the capital gains tax rate didn't change. Congress extended it for two more years. This shows the uncertainty in trying to maximize earnings based on future changes to the tax code.
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If I put dividend-paying stocks in my IRA, where does the dividend go when paid?
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The dividend goes into the IRA (either reinvested automatically or remains as cash until you invest it, per your choice). You're not taxed on this dividend (IRA is a taxed-deferred account - you're taxed on the distributions, but not on the capital gains within the account).
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Vanguard Target Retirement Fund vs. Similar ETF Distribution (w/ REIT)
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Target Date Funds automatically change their diversification balance over time, rebalancing and reassigning new contributions to become progressively more protective of what you've already earned. (As opposed to other funds which continue to maintain the same balance of investments until you explicitly move the money around.) You can certainly make that same evolution manually; we all used to do that before target funds were made available, and many of us still do so. I'm still handling the relative allocations by hand. But I'm also close to my retirement target, so a target fund wouldn't be changing that much more anyway, and since I'm already tracking the curve... Note that if you feel a bit braver, or a bit more cautious, than the "average investor" the target fund was designed for, you can tweak the risk/benefit curve of a Target Date Fund by selecting a fund with a target date a bit later or earlier, respectively, than the date at which you intend to start pulling money back out of the fund.
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What is the difference between “good debt” vs. “bad debt”?
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First of all debt is a technology that allows borrower to bring forward their spending; it's a financial time machine. From borrowers point of view debt is good when it increases overall economic utility. A young person wants to bring up a family but cannot afford the house. Had they waited for 30 years they would have reached the level of income and savings to buy the house for cash. By the time it might be too late to raise a family, sure they'd enjoy the house for the last 20 years of their life. But they would loose 30 years of utility - they could have enjoyed the house for 50 years! So, for a reasonable fee, they can bring the spending forward. Another young person might want to enjoy a life of luxury, using the magical debt time machine and bringing forward their future earnings. They might spend 10 years worth of future earnings on entertainment within a year and have a blast. Due to the law of diminishing marginal utility - all that utility is pretty much wasted, but they'll still will need to make sacrifices in the future. The trick is to roughly match the period of debt repayment to the economic life of the purchase. Buying a house means paying over 30 years for an asset that has an economic life of 80 years+, given that the interest fee is reasonable and the house won't loose it's value overnight that's a good debt. Buying a used car with a remaining life of 5 years and financing its with a seven years loan - is not a good idea. Buying a luxurious holiday that lasts a fortnight with 2 years of repayments, i.e. financing non-essential short term need with medium term debt is insane. The other question is could the required utility be achieved through a substitute at a lower cost without having to bring the spending forward or paying the associated fee.
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Why do consultants or contractors make more money than employees?
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Note too that being a contractor means that you will unavoidably have periods between contracts; you tend to be out of work more often than a salaried employee would. You need to set your rates so your average income, including those down times, adds up to a living wage including all those benefits that aren't being covered. If a company hires a contractor, they understand that this is part of the trade-off. They avoid making a long-term commitment when they don't have a long-term need, and they accept that this convenience may cost a bit more in the short term.
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Is it better to miss the dividend and buy the undervalued stock?
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I guess the answer lies in your tax jurisdiction (different countries tax capital gains and income differently) and your particular tax situation. If the price of the stock goes up or down between when you buy and sell then this counts for tax purposes as a capital gain or loss. If you receive a dividend then this counts as income. So, for instance, if you pay tax on income but not on capital gains (or perhaps at a lower rate on capital gains) then it would pay you to sell immediately before the stock goes ex-dividend and buy back immediately after thereby making a capital gain instead of receiving income.
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Would it make sense to take a loan from a relative to pay off student loans?
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Personally, I avoid making business deals with friends and relatives. There's just too much of a possibility that things can go wrong. Let's assume that you're honest people and you have no intention of cheating your mother-in-law. Still, all sorts of things could happen that could make it difficult for you to repay the loan. You could lose your job. You could get some big medical expense. Etc. Then what happens? Then your financial problems become family problems. There's a strong temptation when people borrow from relatives to make paying the loan the lowest priority in their budget. "I know I promised to pay \$X per month, but things are really tight right now and Mom should understand." Maybe she does understand and can manage without it. But maybe not. And then it becomes a family fight. "You promised you'd pay it back." "And we will, we're having a hard time right now. Can't you just give us a break?" Etc. Or she might have some extra expense, and say, "Hey, can't you pay a little more this month? I really need some extra cash." "I'm sorry, we're struggling just to make the regular payments, we can't." "Well I was willing to loan you all this money. The least you could do is pay me back when I need it." Etc. You can end up ruining family relationships over money. Your wife can find herself in the position of having to choose whether to side with her mother or her husband. Etc. I'm sure plenty of people do things like this and it works out just great. But there are big risks. And by the way, apparently this was your idea, not your mother-in-laws. I wonder what her reaction is. Is she eager to help out her daughter and son-in-law and had nothing in particular to do with the money anyway? Or is she feeling very imposed on? It's one thing to ask relatives to let you borrow their car for the weekend. Asking someone to loan you $50,000 is a very big request. If one of my kids asked me to loan them $50,000 from my retirement fund, I'd consider that a very presumptuous request. (Unless they needed the money for life-saving surgery for my grandchild or some such.)
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Should I open a credit card when I turn 18 just to start a credit score?
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Not only should you do this, you should tell your friends to do it too. Especially if a parent comes in to the bank with the child, banks fall over themselves to provide a card to someone whose only income is allowance. Really. Later, if you're 21 and your car broke and you don't get paid for another 11 days, NOBODY will lend you the money (or those money mart places that charge 300% a year will) to fix it. Never mind score (and yes for sure having a good score will be a result, and a good one) just having the card for emergencies makes all the difference to your early twenties. My kids have several friends who now can't get credit cards (some are students, some are underemployed) and end up missing paid days of work due to car troubles they can't pay to fix, or using those payday lenders, or other things that keep you poor. Get one while you can. Using it sensibly means you will have a great credit score in a decade or so, but just plain having it is worth more than you can know if you're not 18 yet.
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Why are currency forwards needed?
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Can't I achieve the exact same effect and outcome by exchanging currency now and put that amount of USD in a bank account to gain some interest, then make the payment from one year from now? Sure, assuming that the company has the money now. More commonly they don't have that cash now, but will earn it over the time period (presumably in Euros) and will make the large payment at some point in time. Using a forward protects them from fluctuations in the exchange rate between now and then; otherwise they'd have to stow away USD over the year (which still exposes them to exchange rate fluctuations).
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Can I register for VAT to claim back VAT without selling VAT applicable goods? (UK)
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As far as I know any business can register for VAT regardless of the nature of the business. If all the goods you sell (or services you provide) are VAT-exempt or zero-rated then you will get refunds from HMRC on VAT your business pays. Any business whose non-VAT exempt turnover (which would include zero-rated goods and services provided) exceeds the registration threshold must register, again even if that means they are "forced" to claim refunds. So the only question would be whether your rather nebulous activities were enough to qualify you as a business or organisation to which the VAT regime applies at all. The one-liner answer to that is generally, if goods or services are provided in return for a charge, there’s a business activity for VAT purposes Inevitably there's a much bigger body of statute and case law and it won't always be obvious whether the one-liner answer applies or not to a particular activity so it may be necessary to seek specialist advice.
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What assets would be valuable in a post-apocalyptic scenario?
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Bullets, canned goods, and farm supplies that don't need gas (e.g. seed, feed, plows).
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How do I know when I am financially stable/ready to move out on my own?
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One major concern with moving out on your own is can you afford rent each month, be it an apartment or a house payment. You'll hear people say that anywhere from 25% to 40% of your monthly after-tax income should go to housing. 40% seems very high to me and quite risky. I'd go for closer to 30% of your monthly after-tax income and not any higher, but that's just my opinion. I had a friend that moved out of his parents house about the same time that I did. He bought himself a house, and then he immediately started looking for roommates to help pay for his house. It really was a good idea, and I wish that I'd been in a position to do the same, because I'm sure that it saved him a lot of money for the first couple of years. Apart from that, my only advise would be to get a house if you can afford it. 1) Interest rates are very low right now, and 2) if you're paying rent to someone (for an apartment or whatever) then you're just throwing your hard-earned money away. Good luck!
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How to share income after marriage and kids?
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I think the problem is that you've made a math error. This child would not be costing you 300 per month, it will be costing you 1400 per month. 1100 of this is in a donation of salable hours rather than cash, but helpfully you have a number right there as to how much someone is willing to pay for these hours so the math is still doable. So, if you are indeed splitting your expenses fifty-fifty, you should chip 1100 into the pot to match your wife's contribution. It would make the most sense, I think, to have your part of this contribution cover some of your mutual expenses, and if any is left over, save it up for the day that your child would cost more than that 300 in a month - when you need extra clothes, or have to replace something they destroyed, or want to pay for extra opportunities (camps, educational games, lessons), or a a savings that can be used for major future expenses (higher education, first car, milestone celebrations, safety net when starting out). Of course, if your family is indeed a priority, you might consider making an equal investment in your family - say, half your income (1800) to match half her time going into the building of the family. After all, the decision to start a family should be an investment of time and value, not just a minimum bid for expenses. And again, any extra can be spent on mutual expenses, saved up for future costs, or left as your child's "savings" for major expenses or safety net. I suppose I should mention that you perhaps could get away with covering half her contribution (550 per month, on the face of it), as that should also "balance" out the monthly expenses. Even this much would be enough to put her back into the green on her covering her own costs. Of course, in this case you might want to take into account that while she's working 38,5 hours per week now, running a household is, I've heard, more closely equivalent to a 60-hour week, plus or minus being "on call" for a further 100 hours a week. Trying to calculate the absolute minimum payment on your part to match the investment of hours on hers is likely to be a bit more tricky than just matching the salable hours not worked, if you're set on income ratios and splitting costs "as they are". Also, you might want to rethink your criteria for sharing income completely or what makes certain divisions of costs "unfair". You mention one reason it would be unfair is that you have a "more stressful job" - well, your job may well be more stressful than her job now, but it is likely to be less so than raising a child (her new job). As for investment of time and energy for your education entitling you to a larger amount of pay, again, raising a child is likely to be a larger investment of time, money, and anxiety than your education, but her pay (or even share of the costs) doesn't seem to be balanced in response. I'm not gonna tell you what is fair, that's for you to work out, just suggesting you really think it through before deciding what would be fair or not.
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What should I do about proxy statements?
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On most proxy statements (all I have ever received) you have the ability to abstain from voting. Just go down the list and check Abstain then return the form. You will effectively be forfeiting your right to vote. EDIT: According to this, after January 1, 2010 abstaining and trashing the voting materials are the same thing. Prior to January 1, 2010 your broker could vote however they wanted on your behalf if you chose not to vote yourself. The one caveat is this seems to only apply to the NYSE (unless I am reading it wrong). So not sure about stocks listed on the NASDAQ.
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Are there any catches with interest from banks? Is this interest “too good to be true”?
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Tax won't be an issue. You have a personal tax free allowance of £7475 this coming year, so your first £7475 will be tax free. 1.09% is pretty abysmal (sorry - but we've wrecked the economy for you young fullas), so you'll only earn about £84 a month. Not as awesome as you were expecting I think. Would recommend getting advice on other means of generating an income with your 100k. Because if you bought a cheap flat (cheap enough to own without a mortgage), you could probably earn between £300-£400 a month fairly comfortably. (I'm not suggesting you become a landlord, just that interest rates currently suck)
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Does a stock holder profit from a reverse-stock split?
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These are not real gains. Wherever you're looking this up, the prices are not adjusted for corporate actions. In a reverse stock split the price of a single share multiplies by five, but as a shareholder you hold only one share after for every five that you did before.
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Any experience with maxing out 401(k)?
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On #1: One way to make it less painful is to "split" your raises between yourself and your 401k. That is, if you get a 2% raise, increase your contribution to the 401K by 1% and keep the other 1%. Keep doing this until you are maxed out. You won't miss money you never had nearly as much as money you were used to living on. On #2: Yes, go with the Roth. Another consideration: If you are ever going to max out your 401K it is best to do it early even if you have to cut back later than to wait. Take advantage of the extra investment time while you are young.
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I'm an American in my mid 20's. Is there something I should be doing to secure myself financially?
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On average, you should be saving at least 10-15% of your income in order to be financially secure when you retire. Different people will tell you different things, but really this can be split between short term savings (cash), long term savings (401ks, IRAs, stocks & bonds), and paying down debt. That $5k is a good start on an emergency fund, but you probably want a little more. As justkt said, 6 months' worth is what you want to aim for. Put this in a Money Market account, where you'll earn a little more interest but won't be penalized from withdrawing it when its needed (you may have to live off it, after all). Beyond that, I would split things up; if possible, have payroll deductions going to a broker (sharebuilder is a good one to start with if you can't spare much change), as well as an IRA at a bank. Set up a separate checking account just for rent and utilities, put a month's worth of cash in there, and have another payroll deduction that covers your living expenses + maybe 5% put in there automatically. Then, set up automatic bill payments, so you don't even have to think about it. Check it once a month to make sure there aren't any surprises. Pay off your credit cards every month. These are, by far, the most expensive forms of credit that most people have. You shouldn't be financing large purchases with them (you'll get better rates by taking a personal loan from a bank). Set specific goals for savings, and set up automatic payroll deductions to work towards them. Especially for buying a house; most responsible lenders will ask for 20% down. In today's market, that means you need to write a check for $40k or $50k. While it's tempting to finance up to 100% of the property value, it's also risky considering how volatile markets can be. You don't want to end up owing more on the property than it's worth two years down the road. If you find yourself at the end of the month with an extra $50 or so, consider your savings goals or your current debt instead of blowing it on a toy. Especially if you have long term debt (high balance credit cards, vehicle or property loans), applying that money directly to principal can save you months (or years) paying it back, and hundreds or thousands of dollars of interest (all depending on the details of the loan, of course). Above all, have fun with it :) Think of your personal net worth as you do your Gamer score on the XBox, and look for ways to maximize it with a minimum of effort or investment on your part! Investing in yourself and your future can be incredibly rewarding emotionally :)
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How can I spend less?
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One things about psychology - people spend more money when its an abstract concept instead of having cold, hard cash. What does this mean? People spend more money when they use credit cards for day to day purchases. While I still use a credit card for day to day purchases, there's a big difference between bringing $200 to costco to pay for groceries and laying out 10 $20 bills vs swiping a card when you see a number flash on the screen. If you're truly looking to reduce expenses, keep this in mind.
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Opening a bank account with cash: How should bills be presented?
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In the US, banks, businesses and the government stack cash. That's how you should present it to them.
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How to deduct operational loss from my personal income tax?
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I'm not an accountant, and you should probably get the advice of one to be sure about what to do. However, if the business is a sole-proprietorship, you'd complete a Schedule C for the business, and you'd end up with a loss at the end. If the investment you made in the business is considered to be entirely or partially "at risk" per the IRS definition, you'd get to claim all or part of the loss as a reduction in your income. If the business was an LLC, then you're beyond my already limited knowledge. There may be some other considerations based on whether this was really a business vs a hobby, and whether or not you're going to try to continue with the business, or whether you've shut it down. I'm not sure about those parts, but they'd be worth exploring with an accountant.
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Losing Money with Norbert's Gambit
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There's a possibility to lose money in exchange rate shifts, but just as much chance to gain money (Efficient Market Hypothesis and all that). If you're worried about it, you should buy a stock in Canada and short sell the US version at the same time. Then journal the Canadian stock over to the US stock exchange and use it to settle your short sell. Or you can use derivatives to accomplish the same thing.
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Can an ETF, open at a price other than what the pre-market was at?
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If you're talking about an ETF trading on Arca, it's probably because of the opening auction: The match price is the price that maximizes the volume that can be executed within the Auction Collars. The Core Open Auction will use the match price closest to the closing price of the previous trading day (based on normal market hours) if more than one indicative match price is valid. The core opening auction doesn't really take the opening session activity into account, as you can see - the market runs an auction and whatever price clears the most volume, within certain limits, is the opening print.
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Does a larger down payment make an offer stronger?
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There is some element of truth to what your realtor said. The seller takes the house off the market after the offer is accepted but the contract is contingent upon, among other things, buyer securing the financing. A lower down payment can mean a higher chance of failing that. The buyer might be going through FHA, VA or other programs that have additional restrictions. If the buyer fails to secure a financing, that's weeks and months lost to the seller. In a seller's market, this can be an important factor in how your bid is perceived by the seller. Sometimes it even helps to disclose your credit score, for the same reason. Of course for your situation you will have to assess whether this is the case. Certainly do not let your realtor push you around to do things you are not comfortable with. Edit: A higher down payment also helps in the situation where the house appraisal does not fare well. As @Dilip Sarwate has pointed out, the particular area you are interested in is probably a seller's market, thus giving sellers more leverage in picking bids. All else equal, if you are the seller with multiple offers coming in at similar price level, would you pick the one with 20% down or 5% down? While it is true that realtors have their own motives to push through a deal as quickly as possible, the sellers can also be in the same boat. One less mortgage payment is not trivial to many. It's a complicated issue, as every party involved have different interests. Again, do your own due diligence, be educated, and make informed decisions.
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UK: Personal finance book for a twenty-something
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As you are in UK, you should think in terms of Tax Free (interest and accumulated capital gains) ISA type investments for the long term AND/OR open a SIPP (Self Invested Pension Plan) account where you get back the tax you have paid on the money you deposit for your old age. Pensions are the best bet for money you do not need at present while ISAs are suitable for short term 5 years plus or longer.
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First time homeowner and getting a mortgage?
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I second the suggestions for your local credit union and asking co-workers who might also be in the process of a home purchase. Additionally, you want to educate yourself as much as possible so that you can ask questions about the calculations responsible for the differences. I got different values starting from the various online automatic quotes all the way through to the GFE and it was not obvious to me. You can also sign-up for free workshops for first time home buyers, though most of the material will be a breeze it helps you get worksheets going and lists going for documentation that you need to gather. You might want to start at the HUD site and explore. Especially the Borrower's Rights. The cost booklet was very helpful for me to interpret the GFE, but honestly I didn't appreciate it the first time it was handed to me. Finally, you might meet qualifications to take advantage of FHA programs; the waitlists discourage everyone including the loan brokers, but you want to at least be aware of programs that can help.
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“Business day” and “due date” for bills
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It's likely that your bill always shows the 24th as the due date. Their system is programmed to maintain that consistency regardless of the day of the week that falls on. When the 24th isn't a business day it is good to error on the side of caution and use the business day prior. It would have accepted using their system with a CC payment on the 24th because that goes through their automated system. I would hazard a guess that because your payment was submitted through your bank and arrived on the 23rd it wasn't credited because a live person would have needed to be there to do it and their live people probably don't work weekends. I do much of my bill paying online and have found it easiest to just build a couple days of fluff into the schedule to avoid problems like this. That said, if you call them and explain the situation it is likely that they will credit the late charge back to you.
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What are “preferred” stocks? How are they different from normal (common) stocks?
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I seem not to be able to comment on the first answer due to reputation, so I'll aim to enhanced the first answer which is generally good but with these caveats: 1) Dividends are not "guaranteed" to preferred shareholders. Rather, preferred shareholders are normally in line ahead (i.e. in preference to or "preferred") of common shareholders in terms of dividend payment. This is an extremely important distinction, because unlike investments that we generally consider "guaranteed" such as CDs (known as GICs in Canada), a company's board can suspend the dividend at anytime for long periods of time without significant repercussions -- whereas a missed payment to a bank or secured bondholder can often push a company into bankruptcy very quickly. 2) Due to point 1), it is extremely important to know the "convenants" or rules sorrounding both the preferred shares you are buying and the other more senior creditors of that issuing company (i.e. taxes (almost always come first), banks loans, leases, bonds etc.). It is also important to know if a particular preferred share has "cumulative" dividends. You generally only want to buy preferred's that have "cumulative" dividends, since that means that anytime the company misses a payment, they must pay those dividends first before any other dividends at the same or lower priority in the future. 3) Unlike a common stock, your upside on a preferred stock is relatively fixed: you get a fixed share of the company's profit and that's it, whereas a common shareholder gets everything that's left over after interest and preferred dividends are paid. So if the company does really well you will theoretically do much better with common stock over time. For the above reasons, it is generally advisable to think of preferred shares as being more similar to really risky bonds in the same company, rather than similar to common stock. Of course, if you are an advanced investor there are a lot more variables in play such as tax considerations and whether the preferred have special options attached to them such conversion into common shares.
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Distribution rules LLC vs. S-Corp
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It's actually the other way around. Distributions in an LLC are usually based on each member's equity share, although the operating agreement can specify how often such distributions are made. Shareholders in a corporation can receive dividends, but those are determined by the corporation's board and can vary depending on the class of stock each shareholder owns. Preferred-class shareholders, who may hold a smaller overall fraction of the company's outstanding shares than the common stock shareholders, may receive disproportionately larger dividends per share than common stock shareholders, which is one of the (many) reasons that preferred stock is a better choice when it is available. Take, for instance, what Berkshire Class "A" shareholders receive in dividends per year compared to Class "B" shareholders. Here's a good link from LegalZoom that can explain what you're asking about: Explanation of LLC distributions I hope this helps. Good luck!
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What is the PEG ratio? How is the PEG ratio calculated? How is the PEG ratio useful for stock investing?
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PEG is Price/Earnings to Growth. It is calculated as Price/Earnings/Annual EPS Growth. It represents how good a stock is to buy, factoring in growth of earnings, which P/E does not. Obviously when PEG is lower, a stock is more undervalued, which means that it is a better buy, and more likely to go up. Additional References:
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Should I buy or lease a car given that its not a super luxury car and I only drive 15 miles/d on avg?
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Which to do is determined by how you like to consume cars. If you don't drive a lot and like to get a new car every 2-3 years, leasing is often the better choice. If you drive a lot or want to keep a car longer than 3 years, you're normally better buying.
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“No taxes to be paid with owning Berkshire”
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It depends on your investment profile but basically, dividends increase your taxable income. Anyone making an income will effectively get 'lower returns' on their investments due to this effect. If you had the choice between identical shares that either give a dividend or don't, you'll find that stock that pays a dividend has a lower price, and increases in value more slowly than stock that doesn't. (all other things being equal) There's a whole bunch of economic theory behind this but in short, the current stock price is a measure of how much the company is worth combined with an estimation of how much it will be worth in the future (NPV of all future dividends is the basic model). When the company makes profit, it can keep those profits, and invest in new projects or distribute a portion of those profits to shareholders (aka dividends). Distributing the value to shareholders reduces the value of the company somewhat, but the shareholders get the money now. If the company doesn't give dividends, it has a higher value which will be reflected in a higher stock price. So basically, all other things being equal (which they rarely are, but I digress) the price and growth difference reflects the fact that dividends are paying out now. (In other words, if you wanted non-dividend shares you could get them by buying dividend shares and re-investing the dividend as new shares every time there was a payout, and you could get dividend-share like properties by selling a percentage of non-dividend shares periodically). Dividend income is taxable as part of your income right away, however taxes on capital gains only happen when you sell the asset in question, and also has a lower tax rate. If you buy and hold Berkshire Hatheway, you will not have to pay taxes on the gains you get until you decide to sell the shares, and even then the tax rate will be lower. If you are investing for retirement, this is great, since your income from other sources will be lower, so you can afford to be taxed then. In many jurisdictions, income from capital gains is subject to a different tax rate than the rest of your income, for example in the US for most people with money to invest it's either 15% or 20%, which will be lower than normal income tax would be (since most people with money to invest would be making enough to be in a higher bracket). Say, for example, your income now is within the 25% bracket. Any dividend you get will be taxed at that rate, so let's say that the dividend is about 2% and the growth of the stock is about 4%. So, your effective growth rate after taxation is 5.5% -- you lose 0.5% from the 25% tax on the dividend. If, instead, you had stock with the same growth but no dividend it would grow at a rate of 6%. If you never withdrew the money, after 20 years, $1 in the dividend stock would be worth ~$2.92 (1.055^20), whereas $1 in the non-dividend stock would be worth ~$3.21 (1.06^20). You're talking about a difference of 30 cents per dollar invested, which doesn't seem huge but multiply it by 100,000 and you've got yourself enough money to renovate your house purely out of money that would have gone to the government instead. The advantage here is if you are saving up for retirement, when you retire you won't have much income so the tax on the gains (even ignoring the capital gains effect above) will definitely be less then when you were working, however if you had a dividend stock you would have been paying taxes on the dividend, at a higher rate, throughout the lifetime of the investment. So, there you go, that's what Mohnish Pabrai is talking about. There are some caveats to this. If the amount you are investing isn't large, and you are in a lower tax bracket, and the stock pays out relatively low dividends you won't really feel the difference much, even though it's there. Also, dividend vs. no dividend is hardly the highest priority when deciding what company to invest in, and you'll practically never be able to find identical companies that differ only on dividend/no dividend, so if you find a great buy you may not have a choice in the matter. Also, there has been a trend in recent years to also make capital gains tax progressive, so people who have a higher income will also pay more in capital gains, which negates part of the benefit of non-dividend stocks (but doesn't change the growth rate effects before the sale). There are also some theoretical arguments that dividend-paying companies should have stronger shareholders (since the company has less capital, it has to 'play nice' to get money either from new shares or from banks, which leads to less risky behavior) but it's not so cut-and-dried in real life.
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Why do stock prices change? [duplicate]
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In addition to D. Stanley's very fine answer, the price of stocks change as a result of changing market conditions and the resulting investor estimation of its effect on the company's future earnings. Take these examples. Right now, in the USA, there is a housing shortage; that is, there are fewer houses available for purchase than there are willing buyers. Investors will correctly assume that the future earnings of home builders will be higher than they were, say ten years ago. Seeking to capitalize on these higher earnings, they will try to buy the stocks. However, the current owners of the stock, potentially the sellers, know the same thing as the investor-buyer and therefore demand a premium to entice a sale. The price of the stock has risen. The reverse is true, also. Brick and mortar retailers are declining as more consumers prefer on-line retail shopping. The current owners of these stocks will probably want to sell their stock before it is worth even less. The investor-buyer also knows the same facts; that future earnings will most likely be less for these companies. The potential buyer offers a very low price to entice a sale. The price of the stock has fallen. Finally, the price of stocks rise and fall with general market conditions. As an example, assume that next months jobs report is released showing that 350,000 new jobs were created in July. Investors will believe that if companies are hiring, then the companies are doing well; they are selling products and services at a higher than expected rate, requiring that they add new employees. They will also conclude that those 350,000 new employees will be spending their salaries to buy not just food, clothing and shelter, but also a few luxuries like a newer car, a TV, perhaps even a new home (please see paragraph 2!). All of these companies will have more business, more earnings and, likely, a higher stock price.
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I got my bank account closed abruptly how do I get money out?
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This is very possibly a scam. The way the scam works is that the scammers send you a letter and demand you call the telephone number. But the telephone number belongs to the scammers, not the bank. When you call the number, they will 'authenticate' you by asking you a bunch of questions. They will then have enough information to call the bank and pretend to be you, and transfer out all of your money. What you need to do is to find the telephone number for your bank without making use of this letter. For example, look at a previous bank statement, or find the telephone number on the bank's website. Call that number and discuss this letter. If you have already called the number in the letter and if you have the slightest reason to believe it is not valid, stop reading. This is an emergency. Immediately call a legitimate number at the bank. Explain the situation and note that you believe your information has been compromised. Why are you still reading? Do it now.
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What can I replace Microsoft Money with, now that MS has abandoned it?
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I've been budgeting with MS Money since 2004 and was pretty disappointed to hear it's being discontinued. Budgeting is actually a stress-relieving hobby for me, and I can be a bit of a control-freak when it comes to finances, so I decided to start early looking for a replacement rather than waiting until MS Money can no longer download transactions. Here are the pros and cons of the ones I've tried (updated 10/2010): You Need A Budget Pro (YNAB) - Based on the old envelopes system, YNAB has you allot money from each paycheck to a specific budget category (envelope). It encourages you to live on last money's income, and if you have trouble with overspending, that can be a great plan. Personally, I'm a big believer in the envelope concept, so that's the biggest pro I found. Also, it's a downloaded software, so once I've bought it (for about $50) it's mine, without forced upgrades as far as I've seen. The big con for me was that it does not automatically download transactions. I would have to sign on to each institution's website and manually download to the program. Also, coming from Money, I'm used to having features that YNAB doesn't offer, like the ability to store information about my accounts. Overall, it's forward-thinking and a good budgeting system, but will take some extra time to download transactions and isn't really a comprehensive management tool for all my financial needs. You can try it out with their free trial. Mint - This is a free online program. The free part was a major pro. It also looks pretty, if that's important to you. Updating is automatic, once you've got it all set up, so that's a pro. Mint's budgeting tools are so-so. Basically, you choose a category and tell it your limit. It yells at you (by text or email) when you cross the line, but doesn't seem to offer any other incentive to stay on budget. When I first looked at Mint, it did not connect with my credit union, but it currently connects to all my banks and all but one of my student loan institutions. Another recent improvement is that Mint now allows you to manually add transactions, including pending checks and cash transactions. The cons for me are that it does not give me a good end-of-the-month report, doesn't allow me to enter details of my paychecks, and doesn't give me any cash-flow forecasting. Overall, Mint is a good casual, retrospective, free online tool, but doesn't allow for much planning ahead. Mvelopes - Here's another online option, but this one is subscription-based. Again, we find the old envelopes system, which I think is smart, so that's a pro for me. It's online, so it downloads transactions automatically, but also allows you to manually add transactions, so another pro. The big con on this one is the cost. Depending on how you far ahead you choose to pay (quarterly, yearly or biannually), you're paying $7.60 to $12 per month. They do offer a free trial for 14 days (plus another 14 days offered when you try to cancel). Another con is that they don't provide meaningful reports. Overall, a good concept, but not worth the cost for me. Quicken - I hadn't tried Quicken earlier because they don't offer a free trial, but after the last few fell short, I landed with Quicken 2009. Pro for Quicken, as an MS Money user is that it is remarkably similar in format and options. The registers and reports are nearly identical. One frustration I'd had with Money was that it was ridiculously slow at start-up, and after a year or so of entering data, Quicken is dragging. Con for Quicken, again as an MS Money user, is that it's budgeting is not as detailed as I would like. Also, it does not download transactions smoothly now that my banks all ask security questions as part of sign-in. I have to sign in to my bank's website and manually download. Quicken 2011 is out now, but I haven't tried it yet. Hopefully they've solved the problem of security questions. Quicken 2011 promises an improved cash-flow forecast, which sounds promising, and was a feature of MS Money that I have very much missed. Haven't decided yet if it's worth the $50 to upgrade to 2011.
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Should I get an accountant for my taxes?
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A reason to get an accountant is to avoid penalties for possible mistakes. That is, if you make a mistake, the IRS can impose penalties on you for negligence. If the professional makes the SAME mistake, the burden of proof for "negligence" shifts to the IRS, which probably means that you'll pay more taxes and interest, but NO penalties; hiring an accountant is prima facie evidence of NOT being negligent. I would get an accountant since this the first time for you in the present situation, when mistakes are most likely. If you feel that s/he did the same for you that you would have done for yourself, then you might go back to doing your own taxes in later years.
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Question about being a resident
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I am assuming you are asking for Tax purposes. In Oregon, there is a distinction between Full-Year and Partial-Year residency for Tax purposes. You are most likely considered a Partial-Year resident since you moved into the state last year. However, there are also special conditions under which you might be considered a Full-Year resident, so check out the state's tax residency rules here
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Are Certificates of Deposit worth it compared to investing in the stock market?
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A CD is guaranteed to pay its return on maturation. So if you need a certain amount of money at a specific time in the future, the CD is a more reliable way of getting it. The stock market might give you more money or less. More is obviously OK. Less is not if you're planning to pay basic expenses with it, e.g. food, rent, etc. Most retirement portfolios will have a mix of investments. Some securities (stocks and bonds), some guaranteed returns (CDs, treasuries), and some cash equivalents (money market, savings, and checking accounts). Cash equivalents are good for short term expenses and an emergency fund. Guaranteed returns are good for medium term expenses. Securities are good for the long term. Once retired, the general system is to maintain enough cash equivalents for the next few months of expenses and emergencies. Then schedule CDs for the next few years so that you have a predictable amount. Finally, keep the bulk of your wealth in securities. As you get older, your potential emergencies increase and your need for savings decreases, so the mix shifts more and more to the cash equivalents and guaranteed returns and away from securities. CDs have limited use prior to retirement (and the couple years right before retirement), mainly saving up for a large purchase like a house, car, or major appliance. Even there if you have the option of delaying the purchase, that might allow you to use securities instead. Perhaps some of your emergency fund in a short term CD that you keep rolling over. Note that the problem isn't so much that securities will fall. It's that they'll fall right when you need the money. So rather than sell 1% of your securities to meet your needs, you have to sell 2%. That's a dead weight loss of 1% that you have to deduct from your returns. That roughly matches the drop from the height of 2007 to the trough of 2009 of the S&P 500. And it was 2012 before it recovered. If in 2007, you had put the 1% of your portfolio in a two-year CD, you'd be ahead even at zero interest in 2009.
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What should one look for when opening a business bank account?
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From my experience, I opened a business account to handle my LLC which owns a rental property. The account process and features were similar to shopping for a personal checking account. There would be fees for falling below a minimum balance, and for wanting a paper statement. In my case, keeping $2000 avoids the fee, and I pull the statements online and save the PDFs. Once open for a certain amount of time, you might be able to get credit extended based on the money that flows through that account. The online access is similar to my personal checking, as is the sending of payments electronically.
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Do Square credit card readers allow for personal use?
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Yes. From their TOS: "By creating a Square Account, you confirm that you are either a legal resident of the United States, a United States citizen, or a business entity...".
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Why people still look for “naked” short-sellng stocks instead of short selling CFDs
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Investopedia has a nice article on this here The Key benefit looks like better returns with lower capital. The disadvantage is few brokers offering that can be trusted. Potentially lower return due to margins / spreads. Higher leverage and can become an issue.
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Why is the total 401(k) contribution limit (employee + employer) so high?
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Some 401k plans allow you to make "supplemental post-tax contributions". basically, once you hit the pre-tax contribution limit (17.5k$ in 2014), you are then allowed to contribute funds on a post-tax basis. Because of this timing, they are sometimes called "spillover" contributions. Usually, this option is advertised as a way of continuing to get company match even if you accidentally hit the pre-tax limit. But if you actually pay attention to your finances, it is instead a handy way to put away additional tax-advantaged money. That said, you would only want to use this option if you already maxed out your pre-tax and Roth options since you don't get the traditional tax break on contributions or the Roth tax break on the earnings. However, when you leave the company, you can transfer the post-tax money directly into a Roth IRA when you transfer the pre-tax money, match, and earnings into a traditional IRA.
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Is compounding interest on investments a myth?
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The S&P 500 index from 1974 to present certainly looks exponential to me (1974 is the earliest data Google has). If you read Jeremy Siegel's book there are 200 year stock graphs and the exponential nature of returns on stocks is even more evident. This graph only shows the index value and does not include the dividends that the index has been paying all these years. There is no doubt stocks have grown exponentially (aka have grown with compound interest) for the past several decades and compounded returns is definitely not a "myth". The CAGR on the S&P 500 index from 1974 to present has been 7.54%: (1,783 / 97.27) ^ (1 / 40) - 1 Here is another way to think about compounded investment growth: when you use cash flow from investments (dividends, capital gains) to purchase more investments with a positive growth rate, the investment portfolio will grow exponentially. If you own a $100 stock that pays 10% dividends per year and spend the dividends every year without reinvesting them, then the investment portfolio will still be worth $100 after 40 years. If the dividends are reinvested, the investment portfolio will be worth $4,525 after 40 years from the many years of exponential growth: 100*(1 + 10%)^40
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Paying restaurants in cash instead of credit card - how signficant is this?
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The biggest advantage to small business owners paid in cash is not that it might save the 2 or 3 percent that would go to the credit card company. The biggest advantage is that they have the opportunity to keep the transaction entirely off the books and pocket the cash without paying income tax or sales tax, especially when no receipt is given, or when it's a service instead of a product being sold, or when it's an approximately-tracked inventory unit going out the door. Although it's illegal, it's widely done, and it's also often a temptation for employees to try and get away with doing it too.
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At what point should I begin paying off student loans?
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All great answers. The only thing I didn't see mentioned was that student loans are not dischargable in a bankruptcy. So for example if you took money that could have gone to student loans and poured it into other debt, then for some reason declared bankruptcy later, your student load debt would remain while other debt would be discharged; essentially that money would have been better spent on the student loan. This isn't to advocate that you should pay down student loans with the intent of declaring bankruptcy, or that this makes it a better decision necessarily, just a factor that is sometimes forgotten.
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