Question
stringlengths 14
166
| Answer
stringlengths 3
13.1k
|
|---|---|
When should I walk away from my mortgage?
|
I'm in a similar situation, but I live in a state that doesn't allow mortgagees to "walk away" without recourse. I would consider a short sale or otherwise abandoning the property if: At the end of the day, real estate is an investment, and you don't realize gains or losses until you close the position. The "ra, ra" crowd that thought that real estate was going to boom forever in 2006 was just as wrong as the "bad news bears" crowd that thinks that real estate will never recover either. Investments rise and fall. Many people who bought houses in the 1980's boom (recall the S&L crisis) were underwater for years until prices started rising in the mid-90's. You haven't lost money until you realize that loss.
|
What happens to my stocks when broker goes bankrupt?
|
If you are using a US broker, you are protected by SIPC up to $500,000. SIPC also oversees the liquidation of the broker itself, either by appointing a trustee, or by directly contacting clients. If they are able to transfer accounts to a healthy broker before bankruptcy, they will do so, but if not, you will need to file a claim with them.
|
Disputing Items to Improve Credit Report
|
A few points: The reason your lender is asking you to be above 580 is because that is the magic number for an FHA loan where your down payment would be only 3.5% (the US Government effectively subsidizes the rest of your down pmt). If you had a score lower than that (but still above 500), you will need to put 10% down which is still less than the typical 20% down pmt that many of us make. It's not that you can't get a loan with a score < 580. It's that you don't qualify for the "maximum financing" thru FHA. You should do some research and decide if you even want an FHA loan. And keep in mind, you will throw away some money every month towards PMI (mortgage insurance) if you do FHA. Many insist on 20% down pmt to avoid that. How exactly these two items will effect your score is another question. It's possible that having accounts added back as revolving accounts could negatively / not positively effect it. It will likely effect it in some way and I'm not 100% which way or if it would be very significant. You may want to dispute both of those items regardless if you can't afford anything but an FHA loan. If that's the case, then you may have nothing to lose. You might also want to shop around for mortgage lenders. And look for a "portfolio lender." These type of lenders general have more flexibility in who they can lend to and the type of loans.
|
I have $100,000 in play money… what to do?
|
nan
|
Has anyone created a documentary about folks who fail to save enough for retirement?
|
To answer your question, Retirement Revolution may fit the bill to some extent. I'd also like to address some of the indirect assumptions that were made in your bullet points. I'm convinced that the best way to overcome this is not simply to hold down a good job with COLAs every year, max out your IRA accounts and 401(k)s, invest another 10-20% on top, and live off of the savings and whatever Social Security decides to pay you. Instead, the trick is to not retire -- to make a transition into an income-producing activity that can be done in the typical retirement years, hopefully one that is closer to one's calling (i.e., more fulfilling). This takes time, not money. If people just shut off the TV and spent the time building up a side business that has a high passive component, they'd stand a much better chance of not outliving their money.
|
Mortgage refinancing fees
|
tl;dr: I think you can find a much better deal. Doing a strait refi will cost you some amount of money. However, a 2.5% fee ont top of closing costs seems really high. You can get a quote from Quicken loans pretty quick and compare their fee. Also I would check with a local bank, preferably one you already do business with. The 2.5% is probably their commission for originating the loan. If you are in the Southeast I have had great luck with Regions bank. They are large enough, but also small enough. Please know that I have no affiliation with either company. BTW the rate also seems high. Doing a quick search of Bank Rate, it seems you can get 3.25% with zero fee as of this writing. The worse deal they show is 3.46 with a .75% fee, much better than you were quoted. If you can afford it I would also encourage you to think outside the box. A client of mine was able to obtain a Home Equity Loan (not line of credit) to replace their mortgage. They went for a 7 year pay off, with the loan in first position, at a rate about .75 below the then current 15 year rate. The key was there was zero closing costs. It saved them quite a bit of money. Also look at a 10 year fixed. It might not be much more than you are paying now.
|
Negative properties of continuously compounded returns
|
You cannot use continuous compounding for returns less than or equal to 100% because a natural logarithm can only be taken for a positive amount. This answer includes the accurate way to ascertain r, for which many people use an approximation. For example, using -20% monthly return for 12 months:- -0.2 -0.223144 0.0687195 Checking: 0.0687195 True Now trying -100% monthly return:- -1. Indeterminate Why? Because a natural logarithm can only be taken for a positive amount. So the latter calculation can not be done using (logarithmic) continuous compounding. Of course, the calculation can still be done using regular compounding. For -100% the results go to zero in the first month, but -150% produces a more interesting result: -1.5 -11920.9
|
How to get 0% financing for a car, with no credit score?
|
Yes, of course it is. Car dealers are motivated to write loans even more than selling cars at times. When I bought a new car for the first time in my life, in my 40's, it took longer to get the finance guy out of my face than to negotiate and buy the car. The car dealer selling you the used car would be happy to package the financing into the selling price. Similar to how 'points' are used to adjust the actual cost of a mortgage, the dealer can tinker with the price up front knowing that you want to stretch the payment out a bit. To littleadv's point, 3 months isn't long, I think a used car dealer wold be happy to work with you.
|
Is it possible to take advantage of exceptions to early withdrawal penalties on a 401(k)?
|
Your question doesn't make much sense. The exceptions are very specific and are listed on this site (IRS.GOV). I can't see how you can use any of the exceptions regularly while still continuing being employed and contributing. In any case, you pay income tax on any distribution that has not been taxed before (which would be a Roth account or a non-deductible IRA contribution). Including the employer's match. Here's the relevant portion: The following additional exceptions apply only to distributions from a qualified retirement plan other than an IRA:
|
Is there an academic framework for deciding when to sell in-the-money call options?
|
If any academic framework worked, your teachers would be the richest people on the planet. However, you must read up on macro and micro economic factors and make an educated guess where the market(or stock) would be at the date of expiry. Subtract the Strike Price from your determined price and calculate your potential profit. Then, if you are getting paid more or less the same thing as of today, sell it and switch to a safer investment till expiry (For example:- Your potential profit was $10, but you are getting $9 as of today, you can sell it and earn interest(Safer investment) for the remaining time.) Its just like buying and selling stocks. You must set a target and must have a stop loss. Sell when you reach that target, and exit if you hit the stop loss. If you have none of these, you will always be confused(Personal experience).
|
Is ScholarShare a legitimate entity for a 529 plan in California?
|
To mhoran's point, yes, the company, TIAA-CREF is valid. I'd focus on the expenses - Their S&P fund (Index US Large Cap Equity Portfolio) shows a .11% total fee. You might choose this one, or others, but this number looks great to me. We are in an investment world where fees are still often over 1%, and we are conditioned to think anything less is a good fee. For me, the goal is less than .25% in your retirement fund, college savings, etc.
|
When can you use existing real estate as collateral to buy more?
|
Generally, when you own something - you can give it as a collateral for a secured loan. That's how car loans work and that's how mortgages work. Your "equity" in the asset is the current fair value of the asset minus all your obligations secured by it. So if you own a property free and clear, you have 100% of its fair market value as your equity. When you mortgage your property, banks will usually use some percentage loan-to-value to ensure they're not giving you more than your equity now or in a foreseeable future. Depending on the type and length of the loan, the LTV percentage varies between 65% and 95%. Before the market crash in 2008 you could even get more than 100% LTV, but not anymore. For investment the LTV will typically be lower than for primary residence, and the rates higher. I don't want to confuse you with down-payments and deposits as it doesn't matter (unless you're in Australia, apparently). So, as an example, assume you have an apartment you rent out, which you own free and clear. Lets assume its current FMV is $100K. You go to a bank and mortgage the apartment for a loan (get a loan secured by that apartment) at 65% LTV (typical for condos for investment). You got yourself $65K to buy another unit free and clear. You now have 2 apartments with FMV $165K, your equity $100K and your liability $65K. Mortgaging the new unit at the same 65% LTV will yield you another $42K loan - you may buy a third unit with this money. Your equity remains constant when you take the loan and invest it in the new purchase, but the FMV of your assets grows, as does the liability secured by them. But while the mortgage has fixed interest rate (usually, not always), the assets appreciate at different rates. Now, lets be optimistic and assume, for the sake of simplicity of the example, that in 2 years, your $100K condo is worth $200K. Voila, you can take another $65K loan on it. The cycle goes on. That's how your grandfather did it.
|
How does conversion of Secured Convertible Notes work?
|
Let's assume that the bonds have a par value of $1,000. If conversion happens, then one bond would be converted into 500 shares. The price in the market is unimportant. Regardless of the share price in the market, the income per share would be increased by the absence of $70 in interest expense. It would be decreased by the lost tax deduction. It would be further diluted by the increase in 500 shares. Likewise, the debt would be extinguished and the equity section increased. Whether it increased or decreased on a per share basis would depend upon the average amount paid in per share in the currently existing structure, adjusted for changes in retained earnings since the initial offering and for any treasury shares. There would be a loss in value, generally, if it is trading far from $2.00 because it would be valued based on the market price. Had the bond not converted, it would trade in the market as a pure bond if the stock price is far below the strike price and as an ordinary pure bond plus a premium if near enough to the strike price in a manner that depends upon the time remaining under the conversion privilege. I cannot think of a general case where someone would want to convert below strike and indeed, barring a very strange tax, inheritance or legal situation (such as a weird divorce), I cannot think of a case where it would make sense. It often does not make sense to convert far from maturity either as the option premium only vanishes well above $2. The primary case for conversion would be where the after-tax dividend is greater than the after-tax interest payment.
|
Is there a correlation between self-employment and wealth?
|
The key to becoming wealthy as a self-employed person is the drive to be successful. A driven person, who starts their own company (or companies, should they fail), will find success. Assuming that you define success as the accumulation of wealth, then yes, self-employment is correlated with wealth. But as matt mentions in the comments, there is no casual (in the statistical sense) relationship between self-employment and wealth. While I can't say for sure, I would argue that drive is more important that the employment situation.
|
Wisest option to pay for second career education
|
To me it sounds like you need to come up with 67K (30+37), part of the time you can work in the current job, part of the time you could work a lower paying part time job (for a year). Lets assume that you can earn 15K for that year, and you can save 5K from your current job. (I'd try and save more, but what ever you can do.) 67 - 15 - 5 = 47 I'd sell the investment property. First you will have some funds to throw at this need, second you expense should go down as you don't have a payment on this property. 47 - 26 = 21 You have 32K in cash which is a lot for someone in your expense range. Six months would be 15K, so I would use some of that cash: 21 - 17 = 4 Now you are really close. If needed I'd use the investments to cover the last 4k or even more of the on hand cash. However, could you do something to reduce that amount further ...like working more.
|
What should I be doing to protect myself from identity theft?
|
I believe the answer is that to protect yourself it is good to get credit protection so you will be notified when new credit is taken in your name. Also, you can use http://www.annualcreditreport.com/ to look at your credit report. HINT: While you do that, and while you are in the TransUnion report, you will have the option to DISPUTE adverse items. I always suggest that people dispute everything adverse. That puts the onus on the other parties to produce evidence to TransUnion within 30 days attesting to the validity of the adverse item. You would be surprised how many will simply drop off your report after doing that. Everybody should do this Here is a direct address for TransUnion: https://dispute.transunion.com/dp/dispute/landingPage.jsp ==> Once the disputes are finalized, the results get communicated to the other two bureaus. It is amazing how well it works. It can raise your credit score significantly. It really helps to watch your credit report yourself, and also to get whatever protection is offered that may help protect you against others opening new accounts in your name.
|
Why ever use a market order?
|
The purpose of a market order is to guarantee that your order gets filled. If you try to place a limit order at the bid or ask, by the time you enter your order the price might have moved and you might need to keep amending your limit order in order to buy or sell, and as such you start chasing the market. A market order will guarantee your order gets executed. Also, an important point to consider, is that market orders are often used in combination with other orders such as conditional orders. For example if you have a stop loss (conditional order) set at say 10% below your buy price, you might want to use a market order to make sure your order gets executed if the price drops 10% and your stop loss gets triggered, making sure that you get out of the stock instead of being stuck with a limit order 10% below your buy price whilst the stock keeps falling further.
|
How does one value Facebook stock as a potential investment?
|
The amount of hype and uneducated investors/speculators driving its prices up. Just by that I would say its prices are inflated. Bear in mind that Facebook don't sell anything tangible. They can go down as fast as they went up. Most of their income is ad based and single-product oriented, and as such highly dependent on usage and trends (remember MySpace?). Having said that, all the other "classic" valuation techniques are still valid and you should utilize them.
|
Why does short selling require borrowing?
|
Selling short is simply by definition the selling, then later re-buying of stock you don't initially own. Say you tally your entire portfolio balance: the quantity of each stock you own, and your cash assets. Let's call this your "initial position". We define "profit" as any increase in assets, relative to this initial position. If you know a particular stock will go down, you can realize a profit by selling some of that stock, waiting for the price to go down, then buying it back. In the end you will have returned to your initial position, except you will have more cash. If you sell 10 shares of a stock valued at £1.50, then buy them back at £1.00, you will make a £5.00 profit while having otherwise returned to your previous position. If you do the same, but you initially owned 1000 shares, sold just 10 of those, then bought 10 back, that's still a profit of £5.00. Selling short is doing the same thing, but with an initial and ending balance of 0 shares. If you initially own 0 shares, sell 10, then buy 10 back, you return to your initial position (0 shares) plus a profit of £5.00. (And in practice you must also pay a borrowing fee to do this.) The advantage of selling short is it can be done with any stock, not just those currently owned.
|
What do brokers do with bad stock?
|
Market makers, traders, and value investors would be who I'd suspect for buying the stock that is declining. Some companies stocks can come down considerably which could make some speculators buy the stock at the lower price thinking it may bounce back soon. "Short sellers" are out to sell borrowed stocks that if the stock is in free fall, unless the person that shorted wants to close the position, they would let it ride. Worthless stocks are a bit of a special case and quite different than the crash of 1929 where various blue chip stocks like those of the Dow Jones Industrials had severe declines. Thus, the companies going down would be like Apple, Coca-Cola and other large companies that people would be shocked to see come down so much yet there are some examples in recent history if one remembers Enron or Worldcom. Stocks getting delisted tend to cause some selling and there are some speculators may buy the stock believing that the shares may be worth something only to lose the money possibly as one could look at the bankrupt cases of airlines and car companies to study some recent cases here. Circuit breakers are worth noting as these are cases when trading may be halted because of a big swing in prices that it is believed stopping the market may cause things to settle down.
|
ETF S&P 500 with Reinvested Dividend
|
The problem there is that there's a tax due on that dividend. So, if you wish, you can buy the ETF and specify to reinvest dividends, but you'll have to pay a bit of tax on them, and keep track of your basis, if the account isn't a retirement account.
|
Is it normal that US Treasury bills(0.07%) yield smaller than interest rate(0.25%)?
|
I have been charting the CPI reported inflation rate vs . the yeald on the 10-year T-note. Usually, the two like to keep pace with each other. Sometimes the T-note is a bit higher than the inflation rate, sometimes the inflation rate is a bit higher than the T-note yeald. One does not appear to follow the other, but (until recently) the two do not diverge from each other by much. But all that changed recently and I am without an explanation as to why. Inflation dropped to zero (or a bit negative) yet the yeald on the 10-year T-note seemed to seek 2%. Edit: If you give this response a downvote then please be kind enough to explain why in a comment. Edit-2: CPI and 10-year T-note are what I have tracked, and continue to track. If you do not like my answer then provide a better one, yourself.
|
How do I calculate tax liability on the turnover of a small vendor?
|
There are quite a few questions as to how you are recording your income and expenses. If you are running the bakery as a Sole Proprietor, with all the income and expense in a business account; then things are easy. You just have to pay tax on the profit [as per the standard tax bracket]. If you running it as individual, you are still only liable to pay tax on profit and not turnover, however you need to keep a proper book of accounts showing income and expense. Get a Accountant to do this for you there are some thing your can claim as expense, some you can't.
|
ETF's for early retirement strategy
|
This is the chart going back to the first full year of this fund. To answer your question - yes, a low cost ETF or Mutual fund is fine. Why not go right to an S&P index? VOO has a .05% expense. Why attracted you to a choice that lagged the S&P by $18,000 over this 21 year period? (And yes, past performance, yada, yada, but that warning is appropriate for the opposite example. When you show a fund that beat the S&P short term, say 5 years, its run may be over. But this fund lagged the S&P by a significant margin over 2 decades, what makes you think this will change?
|
Alternative means of salary for my employees
|
There are several local currency initiatives in the US list here. Most are attempts to normalize a value as a living wage, or encourage local consumption networks. If you are in the catchment region of one of these, see if you can get a grant or loan to get started (if you are willing to buy into the philosophy of the group such as a $10 minimum wage) m
|
Why might it be advisable to keep student debt vs. paying it off quickly?
|
I see two advantages to not paying student loan debt off more quickly: For #1, however, there are plenty of other ways to build credit and I don't see this as being worth the downsides of not paying off the debt more quickly. In fact, in the United States student loan debt cannot be written off if you go bankrupt. This is important to know and understand. I would generally advise you to pay down your student loans as quickly as you can reasonably do so.
|
How are bonds affected by the Federal Funds Rate?
|
The federal funds rate is one of the risk-free short-term rates in the economy. We often think of fixed income securities as paying this rate plus some premia associated with risk. For a treasury security, we can think this way: (interest rate) = (fed funds rate) + (term premium) The term premium is a bit extra the bond pays because if you hold a long term bond, you are exposed to interest rate risk, which is the risk that rates will generally rise after you buy, making your bond worth less. The relation is more complex if people have expectations of future rate moves, but this is the general idea. Anyway, generally speaking, longer term bonds are exposed to more interest rate risk, so they pay more, on average. For a corporate bond, we think this way: (interest rate) = (fed funds rate) + (term premium) + (default premium) where the default premium is some extra that the bond must pay to compensate the holder for default risk, which is the risk that the bond defaults or loses value as the company's prospects fall. You can see that corporate and government bonds are affected the same way (approximately, this is all hand-waving) by changes in the fed funds rate. Now, that all refers to the rates on new bonds. After a bond is issued, its value falls if rates rise because new bonds are relatively more attractive. Its value rises if rates on new bonds falls. So if there is an unexpected rise in the fed funds rate and you are holding a bond, you will be sad, especially if it is a long term bond (doesn't matter if it's corporate or government). Ask yourself, though, whether an increase in fed funds will be unexpected at this point. If the increase was expected, it will already be priced in. Are you more of an expert than the folks on wall-street at predicting interest rate changes? If not, it might not make sense to make decisions based on your belief about where rates are going. Just saying. Brick points out that treasuries are tax advantaged. That is, you don't have to pay state income tax on them (but you do pay federal). If you live in a state where this is true, this may matter to you a little bit. They also pay unnaturally little because they are convenient for use as a cash substitute in transactions and margining ("convenience yield"). In general, treasuries just don't pay much. Young folk like you tend to buy corporate bonds instead, so they can make money on the default and term premia.
|
Is there a debit card that earns miles (1 mile per $1 spent) and doesn't have an annual fee?
|
I have an American Airlines VISA with miles that has no annual fee, but only because I request that they waive the fee each year. Word to the wise - they've never refused.
|
Pay Yourself With Credit Card Make Money With Cash Back [duplicate]
|
The idea is old as dirt, and some millions of people had it before you. Credit card swipes cost you between 2.4 and 4.5%, depending on the cards, the provider, and the amounts, plus potentially a fixed small amount per swipe. Of course, a 2% cash back card cost more than 2% to swipe; and a 3% cash back card cost more than 3% to swipe; those guys are not morons.
|
Who puts out buy/sell orders during earnings reports or other scheduled relevant information?
|
The early bird catches the worm. The first person who makes use of the information gains! That is why hedge funds pay billions of dollars to place their routers right at the center of wall street. Moreover, the information is not always correct. The article you are reading may be a rumor spread by someone on wall street.Then there is speculation and that is factored into the price. For example:- In spite of all the bad news from Greece, the market still continued to rise. This was because, everyone had an idea about what was going to happen and the price was factored in way before Greece actually defaulted. The game is way more complicated than it seems. If everyone sat down and read reports, opportunities to make millions of dollars would have been lost in those few seconds. (Please note:- I do not mean reading reports is bad)
|
Announcement of rights offering (above market price) causing stock price increase [duplicate]
|
This seemed very unrealistic, I mean who would do that? But to my immense surprise the market price increased to 5.50$ in the following week! Why is that? This is strange. It seems that people mistakenly [?] believe that the company should be at 5.5 and currently available cheap. This looks like irrational behaviour. Most of the past 6 months the said stock in range bound to 4.5 to 5. The last time it hit around 5.5 was Feb. So this is definitely strange. If the company had set a price of 6.00$ in the rights offering, would the price have increased to 6$? Obviously the company thinks that their shares are worth that much but why did the market suddenly agree? Possibly yes, possible no. It can be answered. More often the rights issue are priced at slight discount to market price. Why did this happen? Obviously management thinks that the company is worth that much, but why did the market simply believe this statement without any additional information? I don't see any other information; if the new shares had some special privileges [in terms of voting rights, dividends, etc] then yes. However the announcements says the rights issues is for common shares.
|
Is there any online personal finance software without online banking?
|
neobudget.com is a website that does exactly what you are describing. It is set up for electronically using the envelope system of budgeting. Disclosure: neobudget was founded by a former coworker of mine.
|
How to prevent myself from buying things I don't want
|
We all buy stuff from time to time that only satisfies us for a short time. I was able to locate a few expenses that fall under that category. I see a lot answers that focus on not getting these things. I'm going to tell you how to at least attempt to have your cake and eat it too. If you can get these things without paying for them, or by paying pennies on the dollar for them, you'll no longer want to buy them at full price. Begin by making a list of the items you can't stop thinking about. Go to your local library and look for relevant items that are on your list. If they are not yet available, request that the library purchase them, and reserve them for when the items come in. Yes, libraries are usually tax-supported, but to give back, if you can't afford to contribute to the Library immediately, you can still promote their fund-raising or book/media-drive efforts. If you don't mind buying things that may be second hand, thrift stores and garage or yard sales can have anything. The ones near you may have one or two items on your list of things you were looking for - for pennies on the dollar. Other items might be things you can share with friends. Borrow or swap things until you get bored of them. If you don't have a network of friends with shared interests, there may be a local freecycle or relevant meetup group you can join. The key here is to try to contribute more than you take (and you probably have things you don't need that you can start with trading), and don't keep careful score. The upshot is you'll not only save money but make friends while doing it. You can sometimes have your cake and eat it too. These recommendations can get you the short-term happiness you were looking for, without spending the money. And when the happiness is gone, you won't feel like you need to hang on to the item indefinitely - you can pass it on for others to enjoy.
|
How can I raise finance to build a home for my family
|
As I see it, there are 2 potential solutions - Joining with another person or 2, and buying a house with multiple bedrooms. I am in the US, and I've seen immigrants living in tight accommodations that would seem unacceptable to most of us. But, with the combined incomes, they were able to buy the house and quickly pay for it, and then buy another. $800/mo is about $5/hr. Below US minimum wage. Use your skills to take on additional work on line. A virtual assistant position can increase your income quite a bit. Keep in mind, as someone on the other side of the world, my advice may not be practical for you, these are just my thoughts.
|
What do people mean when they talk about the central bank providing “cheap money”? What are the implications for the stock market?
|
Companies with existing borrowings (where borrowings are on variable interest rates) or in the case with fixed interest rates - companies that get new borrowings - would pay less interest on these borrowings, so their cost will go down and profits up, making them more attractive to investors. So, in general lower interest rates will make the share market a more attractive investment (than some alternatives) as investors are willing to take on more risk for potentially higher returns. This will usually result in the stock market rising as it is currently in the US. EDIT: The case for rising interest rates A central bank's purpose when raising interest rates is to slow down an economy that is booming. As interest rates rise consumers will tighten up their spending and companies will thus have less revenue on top of higher costs for maintaining existing borrowing (with variable rates) or new borrowing (with fixed rates). If rates are higher companies may also defer new borrowings to expand their business. This will eventually lead to lower profits and lower valuation for these companies. Another thing that happens is that as banks start increasing interest for saving accounts investors will look for safety where they can get a higher return (than before) without the risk of the stock market. With lowering profits and valuations, and investor's money flowing out of shares and into the money market, so will company share prices drop (although this may lag a bit with the share market still booming due to greed. But once the boom stops watchout for the crash).
|
If I put a large down payment (over 50%) towards a car loan, can I reduce my interest rate and is it smart to even put that much down?
|
Can you reduce your interest rate? Talk to the lender. Maybe. Probably not. The rate reflects their perception of how much of a risk they're taking with the loan. But if all you're borrowing is $2000, the savings that you might get out of any adjustment to the rate is not going to be all that significant. Sure, it would be nice, but it's not going to be enough to make or break your decision to buy this car. The big savings will be that you're paying interest on a much smaller loan, which means you can reduce your payments and/or pay it off more quickly. REMINDER: NEVER TALK TO AN AUTO DEALER ABOUT FINANCING UNTIL AFTER THE PRICE OF THE CAR HAS BEEN NAILED DOWN -- otherwise they will raise the purchase price to cover the cost of offering you an apparently cheap loan.
|
How to choose a good 401(k) investment option?
|
There are not as many options here as you fear. If you have no other investments outside this 401K it is even easier. Outside accounts include IRA, Roth IRA, taxable investments (mutual funds, ETF, individual stocks), Employee stock purchase plans. Amount: make sure you put enough in to get all the company match. I assume that in your case the 9% will do so, but check your documents. The company match will be with pre-tax funds. Roth vs Regular 401K? Most people in their lifetime will need a mix of Roth and Regular retirement accounts. You need to determine if it is better for you to pay the tax on your contributions now or later. Which accounts? If you are going to invest in a target date fund, you can ignore the rest of the options. The target date fund is a mixture of investments that will change over the decades. Calculate which one fits your expected retirement date and go with it. If you want to be able to control the mix, then you will need to pick several funds. The selection depends on what non-401K investments you have. Now here is what I considered the best advice. Decide Roth or regular, and just put the money into the most appropriate target date fund with the Roth/regular split you want. Then after the money starts flowing into your account, research the funds involved, the fees for those funds, and how you want to invest. Then move the money into the funds you want. Don't waste another day deciding how to invest. Just get started. The best part of a 401K, besides the match, is that you can move money between funds without worrying about taxes. If you realize that you want to put extra emphasis on the foreign stocks, or Mid-cap; just move the funds and redirect future contributions.
|
What are the economic benefits of owning a home in the United States?
|
It is almost a sure thing that the housing market will crash again hugely.For this reason I prefer to own several houses that way when it does no one can ask for their money back and leave me homeless. Current economics suggest a fall of between 40-60% from 2011 prices meaning that if you have bought a house in the last 12 years you can wave bye bye to any and all equity, and this will happen very soon. I recommend saving your money and buying a house outright (like I did 3 times) from someone who has spent 12 years or so paying a mortgage.
|
How can I withdraw money from my LLC?
|
Generally, unless you explicitly elect otherwise, LLCs are transparent when it comes to taxes. So the money in the LLC is your money for tax purposes, there's no need to pay yourself a salary. In fact, the concept of salary for LLC members doesn't exist at all. It is either distributions or guaranteed payments (and even that is mostly relevant to multi-member LLCs). The only concern is the separation of personal and LLC finances - avoiding commingling. Mixing your personal and business expenses by using the same accounts/cards for both business and personal spending may cause troubles when it comes to the liability protection in case of a lawsuit. I'd suggest discussing this with a FL-licensed attorney. Bottom line - technically the withdrawal is just writing yourself a check from the business account or moving money between your personal and business accounts. If you're a sole member - you need not more than that. Make sure the operating agreement explicitly empowers you to do that, of course. There are no tax consequences, but as I mentioned - there may be legal consequences.
|
Credit card closed. Effect on credit score (USA)
|
As documented in MyFICO (http://www.myfico.com/credit-education/whats-in-your-credit-score/), there are several factors that affect credit scores. Payment history (35%) The first thing any lender wants to know is whether you've paid past credit accounts on time. This is one of the most important factors in a FICO® Score. As @Ben Miller mentioned, checking your credit report to determine whether or not late payments were reported to credit bureaus will give you a sense of whether or not this was effected. You mentioned several bounced payments, which certainly could have caused this. This would be my largest concern with a closed account, is to investigate why and what was reported to the bureaus, and in turn, other lenders. Also, since this has the highest impact on credit scores (35%), it's arguably, the most important. This is further detailed here, which details the public record and late payment effect on your score. Amounts owed (30%) Having credit accounts and owing money on them does not necessarily mean you are a high-risk borrower with a low FICO® Score....However, when a high percentage of a person's available credit is been used, this can indicate that a person is overextended, and is more likely to make late or missed payments. Given that this card was closed, whatever your credit limit was is now no longer added into your total credit limit. However, your utilization on that card is gone (assuming it gets paid off), depending on any other credit lines, and since you reported "heavy use" that could be a positive impact, though likely not. Length of credit history (15%) In general, a longer credit history will increase your FICO® Scores. However, even people who haven't been using credit long may have high FICO Scores, depending on how the rest of the credit report looks. Depending how old your card was, and particularly since this was your only credit card, it will likely impact your average age of credit lines, depending on other lines of credit (loans etc) you have open. This accounts for about 15% of your score, so not as large of an impact as the first two. Credit mix in use (10%) FICO Scores will consider your mix of credit cards, retail accounts, installment loans, finance company accounts and mortgage loans. Given that this was your only credit card, your loan mix has been reduced (possibly to none). New credit (10%) Research shows that opening several credit accounts in a short period of time represents a greater risk - especially for people who don't have a long credit history. This focuses on credit inquiries, which as you mentioned, you will likely have another either re-opening this credit card or opening another at some point in the future. Regardless, paying off the rest of that card is a priority, as interest rates on average credit cards are over 13%, and often higher (source). This rate comes into play when not paying the balance in full every month, and also as @Ben Miller suggested, I would not utilize a credit card without being able to pay it in full. It can often be a dangerous cycle of debt.
|
Should I buy ~$2200 of a hot stock or invest elsewhere?
|
Can you afford to lose the $2200? If not, the answer is don't buy the stock. No one can tell you if a stock will continue to go up. But the general rule is that the more hype there is on a stock, the more likely it is that it's reached a top and is due for a downward correction soon. Also note that the more expectation there is for a company, the more negatively the market will react if the company's earnings report comes in even slightly below expectation, or if the company hints at a slowdown in the future. If that buyback doesn't happen you mentioned, expect the stock to drop a lot. Only a really positive surprise news announcement will make it continue to rise on earnings day. If you really want to buy this stock, my advice would be to learn about chart patterns and other basic technical analysis to have at least some idea of whether the stock is due for a correction soon. (If you see it grow in a hockey-stick shape upward, it probably is.)
|
How should I begin investing real money as a student?
|
I think you have a really good idea, kudos to it. It will be difficult to break eve, and while you stressed the fact that you are ready to part with this money, it would be interesting for you not to part with this money just for the sake of trading. You will be frustrated because you are "winning" and breaking even or even losing money in the process. Think about that. For somebody with limited experience the derivatives market carries a very high risk also as everything in this matters carries high or very high yield. Trading futures on margin can actually work but I think you will need a bit more money. Check the mini contracts of infinity futures and calculate the commissions. You will be paying more for a contract, yes. you will need more money for your maintenance margin, yes, but if you day-trade and you have a cheapo broker this will be substantially lower. Gold contracts pay about 10 to 1 so a mini contract of 33 ounces will pay you 33 dollars per 1 dollar move. Your commissions will be about 4/5 usd in a discount broker and you will need to pay some exchange house fees, maybe about 15% of your trade will be fees. Check the contract specs and costs. As somebody said before, they wouldn't recommend trading on margin but with an account of that side I wouldn't know anything else. Trading physical gold on margin could also be an option. Just my 2 cents.
|
What's a good free checking account?
|
Here's a hack for getting the "free" checking that requires direct deposit. Some effort to set up, but once everything is in place, it's all autopilot. (If your transfer into savings is higher than your transfer out of savings, you'll build up a nice little stash over time.) I don't know if there are deposit amounts or frequencies that you must have to qualify for the free account, if these are public or secret, or if this works everywhere. If anyone else has experience using this kind of hack, please leave a comment.
|
Why buy insurance?
|
Insurance is bought for peace of mind and to divert disaster. Diverting disaster is a good/great thing. If your house burned down, if someone hit your car, or some other devastating event (think medical) happened that required a more allocation than you could afford the series of issues may snowball and cause you to lose a far greater amount of money than the initial incident. This could be in the form of losing work time, losing a job, having to buy transportation quickly paying a premium, having to incur high rate debt and so on. For the middle income and lower classes medical, house, and medical insurance certainly falls into these categories. Also why a lot of states have buyout options on auto insurance (some will let you drive without insurance by proving bonding up to 250K. Now the other insurance as I have alluded to is for peace of mind mainly. This is your laptop insurance, vacation insurance and so on. The premise of these insurances is that no matter what happens you can get back to "even" by paying just a little extra. However what other answers have failed to clarify is the idea of insurance. It is an agreement that you will pay a company money right now. And then if a certain set of events happen, you follow their guidelines, they are still in business, they still have the same protocols, and so on that you will get some benefit when something "disadvantageous" happens to you. We buy insurance because we think we can snap our fingers and life will be back to normal. For bigger things like medical, home, and auto there are more regulations but I could get 1000 comments on people getting screwed over by their insurance companies. For smaller things, almost all insurance is outsourced to a 3rd party not affiliated legally with a business. Therefore if the costs are too high they can simply go under, and if the costs are low they continue helping the consumer (that doesn't need help). So we buy insurance divert catastrophe or because we have fallen for the insurance sales pitch. And an easy way to get around the sales pitch - as the person selling you the insurance if you can have their name and info and they will be personally liable if the insurance company fails their end of the bargain.
|
Tax considerations for selling a property below appraised value to family?
|
Is this legal? If the purpose of the sale at that price is to defraud somebody else, you could have a legal issue. For example if the purpose was to make yourself appear poorer to make you eligible for government aid; Or to increase your chances of getting a college grant; or to not have to pay money to your spouse as part of a divorce settlement; or if there is an unwritten part of the transaction for the sibling to sell the house back to in a few years when you no longer need to appear poor. The answer by @littleadv covers the tax complications. I do have one additional point. The sale can't be a short sale. The bank will never approve. The short sale can only be approved when the bank is convinced that there are no viable purchasers at a level to get all their money back. Your sibling is not an arms length transaction.
|
Can gold prices vary between two places or country at the same time?
|
The market prices for futures and depository ETFs like GLD and IAU are pretty consistent. Prices for physical gold at retail can vary dramatically. At a coin store that I was at a few weeks ago, there was a very wide buy/sell spread on commonly available gold coins.
|
Clarification on options jargon regarding spreads
|
Yes. It seems to me you got it right. On my site, Stock Options Cafe, my last post was an illustration of a bullish call spread. In this case, I bought a 50 call, and sold the 60 call. This is a debit order as I was paying money, not collecting a new premium.
|
How best to grow my small amount of money starting at a young age? [duplicate]
|
(Congrats on earning/saving $3K and not wanting to blow it all on immediate gratification!) I currently have it invested in sector mutual funds but with the rise and fall of the stock market, is this really the best way to prepare long-term? Long-term? Yes! However... four years is not long term. It is, in fact, borderline short term. (When I was your age, that was incomprehensible too, but trust me: it's true.) The problem is that there's an inverse relationship between reward and risk: the higher the possible reward, the greater the risk that you'll lose a big chunk of it. I invest that middle-term money in a mix of junk high yield bond funds and "high" yield savings accounts at an online bank. My preferences are HYG purchased at Fidelity (EDIT: because it's commission-free and I buy a few hundred dollars worth every month), and Ally Bank.
|
In the USA, why is the Free File software only available for people earning less than $62k?
|
Regardless of the source of the software (though certainly good to know), there are practical limits to the IRS 1040EZ form. This simplified tax form is not appropriate for use once you reach a certain level of income because it only allows for the "standard" deduction - no itemization. The first year I passed that level, I was panicked because I thought I suddenly owed thousands. Switching to 1040A (aka the short form) and using even the basic itemized deductions showed that the IRS owed me a refund instead. I don't know where that level is for tax year 2015 but as you approach $62k, the simplified form is less-and-less appropriate. It would make sense, given some of the great information in the other answers, that the free offering is only for 1040EZ. That's certainly been true for other "free" software in the past.
|
What are the benefits to underwriters in a secondary offering?
|
Your impression about banks and bankers is very wrong. Wall street banks can and often do lose in transactions. In fact, banks go bankrupt and/or require massive bailouts to survive because they sometimes lose a ton of money. The business of investment banking often involves bearing risk for customers, which, by definition, means they lose some of the time. Generally the risks they take on individual transactions are not large enough to bring the whole bank down, but sometimes they are. Banking is a job like any other, except that it has more risk than most. Anyway, to your point, how do underwriters make money on shares that fall in value before the sale? On the commission. The issuing company will normally pay the investment bank a percentage of the funds raised in the offering, regardless of the price. Of course, it's possible for the bank to still lose money if their contract stipulates a minimum price and they are not able to meet it. In that case, the bank may lose on that offering, contradicting your preconceived notion. By the way, one other question implicit in your post: Why was the secondary offering considered bad news? If the CEO and other insiders have private information that indicates that the stock is overvalued, then doing a secondary offering at the inflated price will greatly enrich them. Because this happens some times, investors are wary about secondary offerings. This makes companies that would otherwise do a secondary offering shy away from it, even if shares are not overpriced. Therefore if a company is doing a secondary offering, the market is likely to worry that the stock is overvalued even at a reduced price.
|
Gauge the strength of the resistance level of a stock just using EMA
|
Firstly, you mean resistance not support, as a support is below the current price and resistance is above the price. Secondly using a MA as support or resistance would mean that that support or resistance level would move up or down as the price moved up or down and would not be static at $25. Generally stocks will range trade more often than they will be trending (either up or down), so a stock can be range trading between a support and resistance levels for months and even years, and usually the longer it range trades for, the bigger the outbreak (either up or down) will be when it does happen. Using a MA (especially shorter dated ones) as support or resistance (or as a up or down trend line) works better when a stock is already trending up or down. When a stock is moving sideways it will tend to keep crossing above and below the MA, and you will be whipsawed if you try to use them as your trigger for entry in these situations. Compare the two charts below: In the first chart the stock is up-trending for over 6 months and the 50d EMA is being used as a support or up-trending line. As long as the price does not break through and close under the 50d EMA then the uptrend continues. You could use this EMA line as a means of entering the stock when prices move towards the EMA and bounce off it back up again. Or you could use it as your stop loss level, so if price closes below the EMA line you would sell your position. In the second chart, the stock has been range trading between the support line at about $21.80 and the resistance line at about $25.50 for 10 months. In this case the price has been moving above and below the 50d EMA during these 10 months and you may have been whipsawed many times if you were trading each break above or below the 50d EMA. A better strategy here would be to buy the stock as it approached the support line and bounces up off it and then close and reverse your position (go short) when the price approached the resistance line and bounces down off it. Edit: When range trading you would have your stops just below the support line when going long and just above the resistance line when going short, that way if it does break through support or resistance and starts trending you will be covered. So this shows that different strategies should be used when a stock is trending to when it is range trading. MAs are better used as entry signal during an established uptrend or downtrend than when a stock is range trading.
|
UK: Personal finance book for a twenty-something
|
I will definitely recommend the following books The above books will open lot of eyes to exactly know what you are doing with your personal finances in a day to day basis.These books will surely be in the top of my list which I will be giving away to my kins in my later stage. The concepts are universally the same, feel free to skip the chapters which were US based. I live in UK and I read most of the above books in late twenties, it surely made lot of changes and also drastically improved my personal finance acumen. I wish I have read these books in my early twenties.
|
Do other countries have the equivalent of Australia's Negative Gearing?
|
I would say similar rules apply in the US. If you have a net loss from rental property, you certainly can claim that loss against your personal income. There are various rules around this though that make it a bit less clear cut. If you are a "real estate professional", which basicly means you spend at least 750 hours per year working on your rental properties (or related activities), then all losses are deductible against any other ordinary income you have. If you aren't a "real estate professional", then your rental income is considered a "passive activity" and losses you can count against regular income are limited to $25,000 per year (with a carry-forward provision) and begin to phase out entirely if your income is between $100,000 and $150,000. So, the law here is structured to allow most small-time investors to take rental real estate losses against their ordinary income, but the income phase-out provision is designed to prevent the wealthy from using rental property losses to avoid taxation.
|
Money transfer from India to USA
|
The liabilities are the same regardless of the route, besides tax evasion schemes such as handing the money to her as cash. Taxes will run up to half of the amount. The best routes are: Western union, moneygram, and similar services- about 2k You are allowed to gift 14k tax free. You can increase this amount by sending to multiple trusted people. See here. https://turbotax.intuit.com/tax-tools/tax-tips/Tax-Planning-and-Checklists/The-Gift-Tax-Made-Simple/INF12127.html The gifter pay taxes, the giftee does not- unless the gifter fails to pay. Let me know which route you prefer. If you do a bank transfer then you will have to work that out with your bank. If you chose to do a wire transfer, yes. Yes, if it's no more than about $2000.
|
How a company can afford to give away so many shares as part of its ESOP
|
Companies theoretically have an infinite number of equity units at their disposal. Issuance must be approved according to its founding contracts. If an equity is trading on an open market then the price of each unit issued in lieu of cash compensation is known. Even if an equity doesn't trade openly, bidders can be solicited for a possible price or an appraisal. This can be a risky route for the potentially compensated. Market capitalizations are frequently generally approximately equal to the sales of a company. Salaries and wages are frequently generally two thirds of sales. It is indeed expensive for the average company to compensate with equity, thus so few do, usually restricting equity compensation to executives and exceptional laborers. Besides, they frequently have enough cash to pay for compensation, avoiding transaction costs. For companies in growth industries such as technology or medicine, their situations are usually reversed: cash constrained yet equity abundant because of large investment and dearly priced equities. For a company trading at a market capitalization multiplied by forty times the revenue, compensating with equity is inexpensive.
|
Physical Checks - Mailing
|
Lets say you owed me $123.00 an wanted to mail me a check. I would then take the check from my mailbox an either take it to my bank, or scan it and deposit it via their electronic interface. Prior to you mailing it you would have no idea which bank I would use, or what my account number is. In fact I could have multiple bank accounts, so I could decide which one to deposit it into depending on what I wanted to do with the money, or which bank paid the most interest, or by coin flip. Now once the check is deposited my bank would then "stamp" the check with their name, their routing number, the date, an my account number. Eventually an image of the canceled check would then end up back at your bank. Which they would either send to you, or make available to you via their banking website. You don't mail it to my bank. You mail it to my home, or my business, or wherever I tell you to mail it. Some business give you the address of another location, where either a 3rd party processes all their checks, or a central location where all the money for multiple branches are processed. If you do owe a company they will generally ask that in the memo section in the lower left corner that you include your customer number. This is to make sure that if they have multiple Juans the money is accounted correctly. In all my dealings will paying bills and mailing checks I have never been asked to send a check directly to the bank. If they want you to do exactly as you describe, they should provide you with a form or other instructions.
|
GAAP or non-GAAP numbers in nasdaq.com?
|
You're interpreting things correctly, at least at a high level. Those numbers come from the 10Q filing and investor summary from Microsoft, but are provided to NASDAQ by Zacks Investment Research, as noted on the main page you linked to. That's a big investment data firm. I'm not sure why they reported non-GAAP Microsoft numbers and not, say, AAPL numbers; it's possible they felt the non-GAAP numbers reflect things better (or have in the past) for some material reason, or it's possible they made a typo, though the last three quarters at least all used non-GAAP numbers for MSFT. MSFT indicates that the difference in GAAP and non-GAAP revenue is primarily deferred revenue (from Windows and Halo). I did confirm that the SEC filing for MSFT does include the GAAP number, not the non-GAAP number (as you'd expect). I will also note that it looks like the 10Q is not the only source of information. Look at ORCL for example: they had in the March 2016 report (period ending 2/29/16) revenues of .50/share GAAP / .64/share non-GAAP. But the NASDAQ page indicates .59/share for that quarter. My suspicion is that the investment data firm (Zack's) does additional work and includes certain numbers they feel belong in the revenue stream but are not in the GAAP numbers. Perhaps MS (and Oracle) have more of those - such as deferred software revenues (AAPL has relatively little of that, as most of their profit is hardware).
|
Is it bad practice to invest in stocks that fluctuate by single points throughout the day?
|
Eventually, you'll end up buying a stock at or near a high-water mark. You might end up waiting a few years before you see your "guaranteed" $100 profit, and you now have $5K to $10K tied up in the wait. The more frequently you trade, the faster your money gets trapped. There are two ways to avoid this problem: 1) Do it during strong bull markets. If everything keeps going up you don't need to worry about peaks...but then why would you keep cashing out for $1 gains? 2) Accurately predict the peaks. If you can see the future, why would you keep cashing out for $1 gains? Either way, this strategy will only make your broker happy, $8 at a time.
|
How can I cash out a check internationally?
|
I've been a landlord and also a tenant. I have been able to deposit money in an account, where I have the account number, and/or a deposit slip. In a foreign bank you can deposit by a machine if in the bank or someone is there for you and knows the account number. With regards to cashing a check in another country, it is up to the bank and the time is at least 14 to 21 business days, with a fee is added. As of a winning check, since its in your name, if you are in another country sign the check, for deposit only with a deposit slip and send it to your out of country bank by FedEx - you will have a tracking number, where as regular mail it might get there in 3 months. I hope by now you came to your solution.
|
How to motivate young people to save money
|
In the United States you can't, because the average millennial in the United States has no opportunity to save money. Either you get a college education, then you will be burdened with a student loan. The cost of college education skyrocketed in the past decades. It is now practically impossible to enter the workforce without a huge debt, unless you are one of the lucky few who has rich and generous parents. Or you skip college. But college is the only way in the United States to obtain a generally accepted qualification, so you won't get any job which pays enough to save any money. As soon as that student loan is paid off, you need to get another loan for you house which you pay off for several decades. As soon as the house debt is paid off, you will be old and develop some medical problems. The medical bills will come in and you will be in debt again. So when in their life are millennials supposed to save money?
|
Is paying off your mortage a #1 personal finance priority?
|
Paying off your mortgage early being good is a myth. It is great for the chronic overspenders to have their mortgage paid off so when they rack up credit card bills and get behind, well they still hae a place to stay. But for those who are more logical with their money paying off your mortgage early in current conditions makes no sense. You can get a 30 year loan well below 4%. Discounting taxes for your average family you would have a rate floating below 3%. So reasons that paying off your mortgage should be almost LAST (given current low long-term interest rates): The first thing you should do is take care of any high interest debt. I would say that anything more than 7-8%, including all credit card debt should be focus #1. putting money into your retirement savings is #1. You will earn way more than 3% over the long-run. you can earn a higher return in the market. Even with a very conservative portfolio you can clear 5-6%, which will still clear more than 3% after taxes. for those who say you can't be sure about the market... well if the market did bad for 30 years in a row no one will have money and the house will also be worthless. if a disaster happens to your house and you own it, your money is gone. In many cases you would be able to declare bankruptcy and let the bank take the property as is. there are just too many examples but if you are paying off your house early, you lose the flexible/liquid money that you now have tied up in the house. Now the reasons for paying down your mortgage are really easy too: you don't trust your spending habits you want to move up in houses and you want to make sure that you have at least 20% down on future house to skip PMI.
|
What happens if futures contract seller defaults?
|
MD-Tech answered: The answer is in your question: derivatives are contracts so are enforced in the same way as any other contract. If the counterparty refuses to pay immediately they will, in the first instance be billed by any intermediary (Prime Broker etc.) that facilitated the contract. If they still refuse to pay the contract may stipulate that a broker can "net off" any outstanding payments against it or pay out using deposited cash or posted margins. The contract will usually include the broker as an interested party and so they can, but don't need to, report a default (such that this is) to credit agencies (in some jurisdictions they are required to by law). Any parties to the trade and the courts may use a debt collection agency to collect payments or seize assets to cover payment. If there is no broker or the counterparty still has not paid the bill then the parties involved (the party to the trade and any intermediaries) can sue for breach of contract. If they win (which would be expected) the counterparty will be made to pay by the legal system including, but not limited to, seizure of assets, enforced bankruptcy, and prison terms for any contempts of court rulings. All of this holds for governments who refuse to pay derivatives losses (as Argentina did in the early 20th century) but in that case it may escalate as far as war. It has never done so for derivatives contracts as far as I know but other breaches of contract between countries have resulted in armed conflict. As well as the "hard" results of failing to pay there are soft implications including a guaranteed fall in credit ratings that will result in parties refusing to do business with the counterparty and a separate loss of reputation that will reduce business even further. Potential employees and funders will be unwilling to become involved with such a party and suppliers will be unwilling to supply on credit. The end result in almost every way would be bankruptcy and prison sentences for the party or their senior employees. Most jurisdictions allow for board members at companies in material breach of contract to be banned from running any company for a set period as well. edit: netting off cash flows netting off is a process whereby all of a party's cash flows, positive and negative, are used to pay each other off so that only the net change is reflected in account balances, for example: company 1 cash flows netting off the total outgoings are 3M + 500k = 3.5M and total incomings are 1.2M + 1.1M + 1.2M = 3.5M so the incoming cash flows can be used to pay the outgoing cash flows leaving a net payment into company1's account of 0.
|
How to start investing/thinking about money as a young person?
|
I think "Rich Dad Poor Dad" is a good read for understanding the basics of personal finance in a non-technical format before actually starting investing.
|
What's the catch in investing in real estate for rent?
|
It is easier to get a loan on a rental than a flip, which is a huge advantage to rental properties. Leverage allows you to increase your returns and make more money off appreciation and higher rents. I use ARMs to finance my rental properties that are amortized over 30 years. I have to put 20 percent down, but my portfolio lender lets me get as many loans as I want. Because I put 20 percent down on my rental properties and they still have great cash flow I can buy three times as many properties as I could with cash purchases. Buying more rental properties amplifies the other advantages like cash flow, equity pay down and the tax advantages.
|
How to determine how much to charge your business for rent (in your house)?
|
It depends on the structure of your business. Are you a sole proprietor filing Schedule C on your 1040, or an S-corp, or part of a partnership? The treatment of a home office will differ depending on business entity.
|
Help: Being charged interest on a loan for which I received no statements telling me of this debt for the past 15 years. Surprise!
|
This sounds like a shady trick. I would consult with a consumer debt lawyer in your area. Most county bar associations in the US have a referral service, where they recommend a local lawyer and there is a reduced fee for the initial visit. I think the statute of limitations is 10 years in most cases, but it depends on where you live. From these bare details,I think they don;t have much of a case. Go see a lawyer and don't let them harrass you.
|
Tenant wants to pay rent with EFT
|
It's safe. You give people those numbers every time you write a check. If a check is forged, and doesn't have your signature on it, the bank has to return the money to you; they get it back from the other bank, who takes whatever action it deems necessary against the forger. They've been doing this for a few hundred years, remember.
|
Can a shareholder be liable in case of bankruptcy of one of the companies he invested in?
|
Not normally, for a limited liability company anyway. In extreme circumstances a court may "lift the veil" of incorporation and treat shareholders as if they were partners. If you are an office bearer or a director that is found to have breached duties/responsibiities then that is another matter. Dim views can be taken of shonky arrangents for companies formed for activites not of a bona fide business nature too.
|
Should I buy a house with a friend?
|
I did this about 8 years ago with a buddy in Chicago for the reasons specified in the original post. As other posters have suggested, we discussed a lot of the same questions listed above, figured out the possible scenarios, and then had a lawyer draw up a contract. We bought a 3 bedroom house, and rented out the 3rd bedroom. Overall, it was a great experience. We both built equity while having a renter pay a third of the mortgage. Plus the property tax and interest on the loan were tax deductible. Compared with renting an apartment, it made us a lot more money. In the end, we sold the house, and split the profits. Assuming you have the personalities to make it work, I say go for it.
|
What are the reasons to get more than one credit card?
|
There is almost no reason to get a second credit card - this is a very good arrangement for your creditor but not for you. Credit cards have high rates of interest which you have to pay unless you pay the credit off every month. Therefore, increasing your total credit capacity should not be your concern. Since internet technology lets you pay off your balance in minutes online, there is no reason to have multiple cards in order to avoid running out of a balance. If, on the other hand, you do not pay your existing card off every month, than getting another card can be even more dangerous, since you're increasing the amount of debt you take on. I'd say at most it would make sense for you to grab a basic VISA, since most places do not accept AMEX. I would also considering cancelling the AMEX if you get the VISA, for reasons above.
|
Should I buy a house or am I making silly assumptions that I can afford it?
|
Having convinced myself that there is no point of paying someone's else mortgage Somewhat rhetorical this many years later, but I expect some other kid forcefed the obsession with propping up the housing market might be repeating the nonsense about "paying someone else's mortgage" and read this. Will you be buying your own farm to grow your own food, or are you happy with people using the money you spend on food for a mortgage? How about clothes? Will you be weaving your own clothes because you don't want money you spend on clothes to pay someone else's mortgage? What's special about the money you pay for rent that you get annoyed at how someone else spends it? Don't get a mortgage just because you don't like the idea of how other people might spend the money that's no longer yours after you pay them with it. As an aside, at your age with your income and no debt, you could be sensibly investing a lot of money. If you did that for five years, you'd be in a much better position that you would be tying yourself to whatever current scheme the UK is using to desperately prop up house prices.
|
Why do new car loans, used car loans, and refinanced loans have different rates and terms?
|
New car loans, used car loans, and refinances have different rates because they have different risks associated with them, different levels of ability to recoup losses if there is a default, and different customer profiles. (I'm assuming third party lender for all of these questions, not financing the dealer arranges, as that has other considerations built into it.) A new car loan is both safer to some extent (as the car is a "known" risk, having no risk of damage/etc. prior to purchase), but also harder to recoup losses (because new cars immediately devalue significantly, while used cars keep more of their value). Thus the APRs are a little different; in general for the same amount a new car will be a bit lower APR, but of course used car loans are typically lower amounts. Refinance is also different; customer profile wise, the customer who is refinancing in these times is likely someone who is a higher risk (as why are they asking for a loan when they're mostly paid off their car?). Otherwise it's fairly similar to a used car, though probably a bit newer than the average used car.
|
Is this mortgage advice good, or is it hooey?
|
add the interest for the next 5 payments and divide that by how much you paid on the principal during that time Let's see - on a $200K 6% loan, the first 5 months is $4869. Principal reduction is $1127. I get 4.32 or 432%. But this is nonsense, you divide the interest over the mortgage balance, and get 6%. You only get those crazy numbers by dividing meaningless ratios. The fact that early on in a mortgage most of the payment goes to interest is a simple fact of the the 30 year nature of amortizing. You are in control, just add extra principal to the payment, if you wish. This idea sounds like the Money Merge Account peddled by UFirst. It's a scam if ever there was one. I wrote about it extensively on my site and have links to others as well. Once you get to this page, the first link is for a free spreadsheet to download, it beats MMA every time and shows how prepaying works, no smoke, no mirrors. The second link is a 65 page PDF that compiles nearly all my writing on this topic as I was one of the finance bloggers doing what I could to expose this scam. I admit it became a crusade, I went as far as buying key word ads on google to attract the search for "money merge account" only to help those looking to buy it find the truth. In the end, I spent a few hundred dollars but saved every visitor the $3500 loss of this program. No agent who dialoged with me in public could answer my questions in full, as they fell back on "you need to believe in it." I have no issue with faith-based religion, it actually stands to reason, but mortgages are numbers and there's order to them. If you want my $3500, you should know how your system works. Not one does, or they would know it was a scam. Nassim Taleb, author of "The Black Swan" offered up a wonderful quote, "if you see fraud, and do not say 'fraud,' you are a fraud." The site you link to isn't selling a product, but a fraudulent idea. What's most disturbing to me is that the math to disprove his assertion is not complex, not beyond grade school arithmetic. Update 2015 - The linked "rule of thumb" is still there. Still wrong of course. Another scam selling software to do this is now promoted by a spin off of UFirst, called Worth Unlimited. Same scam, new name.
|
Are REIT worth it and is it a good option to generate passive income for a while?
|
Other individuals answered how owning an REIT compares to an individual real estate investment, but did not answer your second question as readily, "are REITs a good option to generate passive income for awhile?". The "awhile" part is quite important in answering this question. If your intentions are to invest for a relatively short time period (say, 7 years or less), it may be especially advantageous to invest in a REIT. The foremost advantage comes from significantly lower transaction fees (stock/ETF trades are practically/potentially free today) compared to purchasing real estate, which involves inspection+titling fees/taxes/broker fees, which in a round-trip transaction (purchase and sale) would come to ~10%. The secondary advantage to owning a REIT is they are much more liquid than a property. If you wanted to sell your investment at a given point in time, you can easily log into your brokerage and execute your transaction, while liquidating an investment property will take time on market/potentially tossing tenants/fixing up place, etc. On the other hand, illiquid investments have generally yielded higher historical returns according to past research.
|
Bond prices: Why is a high yield sometimes too good to be true?
|
Those are the expected yields; they are not guaranteed. This was actually the bread and butter of Graham Newman, mispriced bonds. Graham's writings in the Buffett recommended edition of Securities Analysis are invaluable to bond valuation. The highest yielder now is a private subsidiary of Société Générale. A lack of financial statements availability and the fact that this is the US derivatives markets subsidiary are probably the cause of the higher rates. The cost is about a million USD to buy them. The rest will be similar cases, but Graham's approach could find a diamond; however, bonds are big ticket items, so one should expect to pay many hundreds of thousands of USD per trade.
|
Since many brokers disallow investors from shorting sub-$5 stocks, why don't all companies split their stock until it is sub-$5
|
A stock split can force short sellers of penny stocks to cover their shorts and cauuse the price to appreciate. Example: Someone shorts a worthless pump and dump stock, 10,000 shares at .50. They have to put up $25,000.00 in margin ($2.50 per share for stocks under $2.50). The company announces a 3 to 1 split. Now the short investor must come up with $50,000.00 additional margin or be be "bought in". The short squeeze is on.
|
How can I get the most value from my employer's ESPP?
|
A 15% discount does not necessarily mean it is a good investment. The stock price can go down at any point. 15% discount might mean you are getting a little better deal than the average cat.
|
Protecting savings from exceptional taxes
|
Over the last few years I've read quite a bit about monetary history. I've developed two very important rules from this study: If you follow these two rules you will be able to weather almost any governmental or banking crisis.
|
What to sell when your financial needs change, stocks or bonds?
|
You are right about the stock and index funds, with dollar cost averaging over several years, the daily price of the security (especially a dividend paying security) will not matter* because your position will have accumulated larger over several entry points, some entries with cheaper shares and some entries with more expensive shares. In the future your position will be so large that any uptick will net you large gains on your original equity. *not matter being a reference to even extreme forms of volatility. But if you had all your equity in a poor company and tanked, never to rise again, then you would still be in a losing position even with dollar cost averaging. If your only other holdings are bonds, then you MAY want to sell those to free up capital.
|
Why ever use a market order?
|
What you are saying is a very valid concern. After the flash crash many institutions in the US replaced "true market orders" (where tag 40=1 and has no price) with deep in the money limit orders under the hood, after the CFTC-SEC joint advisory commission raised concerns about the use of market orders in the case of large HFT traders, and concerns on the lack of liquidity that caused market orders that found no limit orders to execute on the other side of the trade, driving the prices of blue chip stocks into the pennies. We also applaud the CFTC requesting comment regarding whether it is appropriate to restrict large order execution design that results in disruptive trading. In particular, we believe there are questions whether it is ever appropriate to permit large order algorithms that employ unlimited use of market orders or that permit executions at prices which are a dramatic percentage below the present market price without a pause for human review So although you still see a market order on the front end, it is transformed to a very aggressive limit in the back end. However, doing this change manually, by selling at price 0 or buying at 9999 may backfire since it may trigger fat finger checks and prevent your order from reaching the market. For example BATS Exchange rejects orders that are priced too aggressively and don't comply with the range of valid prices. If you want your trade to execute right now and you are willing to take slippage in order to get fast execution, sending a market order is still the best alternative.
|
Growth of unrealized gains in tax-managed index funds
|
Right now, the unrealized appreciation of Vanguard Tax-Managed Small-Cap Fund Admiral Shares is 28.4% of NAV. As long as the fund delivers decent returns over the long term, is there anything stopping this amount from ballooning to, say, 90% fifty years hence? I'd have a heck of a time imagining how this grows to that high a number realistically. The inflows and outflows of the fund are a bigger question along with what kinds of changes are there to capital gains that may make the fund try to hold onto the stocks longer and minimize the tax burden. If this happens, won't new investors be scared away by the prospect of owing taxes on these gains? For example, a financial crisis or a superior new investment technology could lead investors to dump their shares of tax-managed index funds, triggering enormous capital-gains distributions. And if new investors are scared away, won't the fund be forced to sell its assets to cover redemptions (even if there is no disruptive event), leading to larger capital-gains distributions than in the past? Possibly but you have more than a few assumptions in this to my mind that I wonder how well are you estimating the probability of this happening. Finally, do ETFs avoid this problem (assuming it is a problem)? Yes, ETFs have creation and redemption units that allow for in-kind transactions and thus there isn't a selling of the stock. However, if one wants to pull out various unlikely scenarios then there is the potential of the market being shut down for an extended period of time that would prevent one from selling shares of the ETF that may or may not be as applicable as open-end fund shares. I would however suggest researching if there are hybrid funds that mix open-end fund shares with ETF shares which could be an alternative here.
|
How does order matching happen in stock exchanges?
|
To answer your question in its entirety there's more information we need (exchange, session, traded security, order type, etc.). Most exchanges support partial fills, that is your order will be partially executed and modified. In your example, you'd get an execution of 10 shares at $100, and your order ticket will be modified to $100 for 990 shares. Like John Bensin explained, there are ways to prevent partial filling through order modifiers (e.g. Fill-or-Kill). My addition here is, there are also ways to prevent the other bit, i.e. do the partial fill but don't keep a modified order in the system. You'd have to mark the order Immediate-or-Cancel (IoC). In your case you'd be partially filled (10 @$100) and that's it. For the remaining 990 shares you'd have to enter a new order.
|
What are investment options for young married couple with no debt that have maxed out retirement savings?
|
You can't max out your retirement savings. There are vehicles that aren't tax-advantaged that you can fund after you've exhausted the tax-advantaged ones. Consider how much you want to put into these vehicles. There are disadvantages as well as advantages. The rules on these can change at any time and can make it harder for you to get your money out. How's your liquid (cash) emergency fund? It sounds like you're in a position to amass a good one. Don't miss this opportunity. Save like crazy while you can. Kids make this harder. Paying down your mortgage will save you interest, of course, but make sure you're not cash-poor as a result. If something happens to your income(s), the bank will still foreclose on you even if you only owe $15,000. A cash cushion buys you time.
|
How can rebuilding a city/large area be considered an economic boost?
|
You are not wrong. This is called the "Broken Window" fallacy in economics. Imagine if 20% of a population was employed to go around breaking windows. This would stimulate the economy as many people would have to be employed to make new windows, repair the broken windows, etc.. The problem is that everyone would have been better off if they didn't have to spend their valuable resources on repairing a perfectly functioning window. Although many people will be employed to rebuild Japan, this doesn't improve the standard of living for the folks in Japan.
|
Shorting: What if you can't find lenders?
|
You at least have some understanding of the pitfalls of shorting. You might not be able to borrow stock. You might not be able to buy it back when the time comes. You're moves are monitored, so you can't "run away" because the rules are enforced. (You don't want to find out how, personally.) "Shorting" is a tough, risky business. To answer your implicit question, if you have to ask about it on a public forum like this, you're not good enough to do it.
|
I have around 60K $. Thinking about investing in Oil, how to proceed?
|
One possibility would be to invest in a crude oil ETF (or maybe technically they're an ETP), which should be easily accessible through any stock trading platform. In theory, the value of these investments is directly tied to the oil price. There's a list of such ETFs and some comments here. But see also here about some of the problems with such things in practice, and some other products aiming to avoid those issues. Personally I find the idea of putting all my savings into such a vehicle absolutely horrifying; I wouldn't contemplate having more than a small percentage of a much more well diversified portfolio invested in something like that myself, and IMHO it's a completely unsuitable investment for a novice investor. I strongly suggest you read up on topics like portfolio construction and asset allocation (nice introductory article here and here, although maybe UK oriented; US SEC has some dry info here) before proceeding further and putting your savings at risk.
|
Why do financial institutions charge so much to convert currency?
|
Banks do of course incur costs on currency transactions. But they're not as high as the fee charged to the customer. Most banks in most places lose a lot of money on operating bank accounts for customers, and make the money back by charging more than their costs for services like currency exchange. If you don't choose to pay those fees, use an online service instead. But bear in mind that if everyone does so then banks will be forced to charge higher fees for current accounts.
|
What are the scenarios if mining company around 4c decides to halt stock trading due to capital raising?
|
It appears that the company in question is raising money to invest in expanding its operations (specifically lithium production but that is off topic for here). The stock price was rising on the back of (perceived) increases in demand for the company's products but in order to fulfil demand they need to either invest in higher production or increase prices. They chose to increase production by investing. To invest they needed to raise capital and so are going through the motions to do that. The key question as to what will happen with their stock price after this is broken down into two parts: short term and long term: In the short term the price is driven by the expectation of future profits (see below) and the behavioural expectations from an increase in interest in the stock caused by the fact that it is in the news. People who had never heard of the stock or thought of investing in the company have suddenly discovered it and been told that it is doing well and so "want a piece of it". This will exacerbate the effect of the news (broadly positive or negative) and will drive the price in the short run. The effect of extra leverage (assuming that they raise capital by writing bonds) also immediately increases the total value of the company so will increase the price somewhat. The short term price changes usually pare back after a few months as the shine goes off and people take profits. For investing in the long run you need to consider how the increase in capital will be used and how demand and supply will change. Since the company is using the money to invest in factors of production (i.e. making more product) it is the return on capital (or investment) employed (ROCE) that will inform the fundamentals underlying the stock price. The higher the ROCE, the more valuable the capital raised is in the future and the more profits and the company as a whole will grow. A questing to ask yourself is whether they can employ the extra capital at the same ROCE as they currently produce. It is possible that by investing in new, more productive equipment they can raise their ROCE but also possible that, because the lithium mines (or whatever) can only get so big and can only get so much access to the seams extra capital will not be as productive as existing capital so ROCE will fall for the new capital.
|
Why does Charles Schwab have a Mandatory Settlement Period after selling stocks?
|
It's important to understand that, in general, security transactions involve you and a relatively unknown entity with your broker standing in the middle. When you sell through Schwab, Schwab needs to receive the funds from the other side of the transaction. If Schwab gave you access to the funds immediately, it would essentially be a loan until the transaction settles after funds and securities change hands. If Schwab made funds available to you as soon as they were received, it might still be two days until the money is received; because the other side also has three days. Guaranteed one day settlement would have to include receipt of funds from the buyer in one day and Schwab can't control that. You need to remember this transaction likely includes at least one party in addition to you and Schwab. Here's the SEC page related to the three day settlement period, About Settling Trades in Three Days: T+3
|
Is there a way to roll over short-term gains and avoid capital gain tax
|
If the investments are in a non-retirement, taxable account, there's not much you can do to avoid short-term capital gains if you sell now. Ways to limit short-term capital gains taxes: Donate -- you can donate some of the stock to charity (before selling it). Transfer -- you can give some of the stock to, say, a family member in a lower tax bracket. But there are tons of rules, gift limits, and won't work for little kids or full time students. They would still pay taxes at their own rate. Protect your gains by buying puts. Wait it out until the long-term capital gains rate kicks in. This allows you to lock in your gains now (but you won't benefit from potential future appreciation.) Buying puts also costs $, so do the ROI calculation. (You could also sell a call and buy a put at the same time and lock in your gains for certain, but the IRS often looks at that as locking in the short-term capital gain, so be careful and talk to a tax professional if you are considering that method.) Die. There's a "step-up" basis on capital gains for estates. source: http://www.forbes.com/2010/07/30/avoid-capital-gains-tax-anschutz-personal-finance-baldwin-tax-strategy.html
|
Dad paying for my new home in cash. How can I buy the house from him?
|
There are quite some options, but without additional information, I can only provide examples. Last year I had the option to buy a house, but I decided against it because in my area it is getting harder and harder every year to sell it at a reasonable price. But if I had bought a house, my mother would have lent me the money, with me paying it back to her over the years on 3% interest. So it would have been some kind of a private loan. But my mom would never have taken ownership of the house, since it was not her intention to own it in any way. (Does your dad intend to own the house and rent it to you? If yes, and if you are comfortable with renting instead of buying, then this is an option.) The second option, the one we discarded because of the additional cost, is that I could have taken a loan, paying 4.5% interest to the bank, which would then pay under 1% to my mom, and keep the rest. Banks always want to make profit, and this profit has to come from somewhere - from the difference between the interest rates. If your dad has 230k on the bank, and you owe 230k to the bank, you are better off if you keep the bank out - at least as long as your dad is comfortable with lending you money, and you are comfortable with owing him money. (my gf would never borough money from her mother, because her mother would always play the "you are in my debt" card - on each and every visit, and whenever she needed help in any way...) So the key is: What does your dad feel comfy with - and what do you feel comfy with. If possible, keep the banks out, but set up a written contract between you and your dad.
|
Has anyone compared an in-person Tax Advisor to software like Turbo Tax?
|
so far the only thing that I can think of that would make me want to go with H&R Block is the guarantee that they offer ( for a fee ) that says they will help you if you are ever audited for a tax return that you filed through them, but I think that is given for both the software and the in person tax preparation. so I guess if you like to ask lots of questions and get the answers nearly immediately I would go with an in person tax preparation person, if they can't answer all your questions then that is something else to think about all together.
|
Why do non-electronic stock exchanges (with floor traders) still exist?
|
Non-electronic stock exchanges still exist because they used to exist. There are a lot of people in trading firms who grew up with floor trading and don't want to give it up, either because they feel more comfortable with it or because they might lose their job if they went away from it.
|
Stocks: do Good Till Cancelled orders get executed during after hours?
|
You typically need to specify that you want the GTC order to be working during the Extended hours session. I trade on TD Ameritrade's Thinkorswim platform, and you can select DAY, GTC, EXT or GTC_EXT. So in your case, you would select GTC_EXT.
|
Settling before T+3?
|
It is possible but unlikely. Securities firms would prefer never to settle externally; rather, they prefer to wait until the liabilities can be netted. They are forced to make and take payment in three business days. The reason why is because settlement is costly in the same way as any other business would prefer to build trade credit instead of taking or making payment rapidly. The only circumstance where a financial firm would wish to take full delivery is when a counterparty is no longer trusted to be solvent.
|
Can't the account information on my checks be easily used for fraud?
|
When an someone as esteemed and smart as Donald Knuth tells you the chequing system is busted it's time to close your cheque account, or I guess live with the associated risk. Answer to question, yes your account information can be used to commit fraud on you via your bank.
|
Connection between gambling and trading on stock/options/Forex markets
|
There is economic value added to the marketplace, by having many investors trading stocks. The stock market itself can be thought of as a tool which provides additional 'liquidity' to the marketplace. Liquidity is the ease with which you can convert your assets into cash (for example, how quickly could you sell your car if you needed money to pay a medical bill?). Without a stock market, funds would be very illiquid - an investor would likely need to post advertisements to have other people consider buying his/her shares. Until the match between a buyer and seller is found, the person with the shares can't use the cash they need. On the other side of the transaction, are people who have an appetite for risk. This means that, for various reasons, they are willing to take on more risk than you, if it pays off on average (they are young [and have many years of salary earnings in front of them], or they are rich [can afford to lose money sometimes if it pays off on average]). Consider this like a transaction between your insurance broker - you don't want to pay for a new car if you get in an accident, and you're willing to pay total annual premiums that, on average, will cost more than that same car over time. You don't want the risk, but the insurance company does - that's how they make money. So by participating in any marketplace, you are providing value, in the form of liquidity, and by allowing the market to allocate risk to those willing to take it on.
|
Investment property information resources
|
I personally found the "For Dummies" books, on property investment, very helpful and a great primer. I found them unbiased and very informative, laying out the basic principles. Depending on your knowledge it can provide you with enough of a foundation to have an informed conversation with banks/real estates etc. Watch the markets for a while (at least 6 months) to know what prices vendors will be expecting and rents tenants will be expecting, most property magazines will also contain a suburb summary in the back. When you get closer to purchase make sure to ask your bank for the RP Data reports on the properties you are looking at, the banks will typically provide these for free. I also set out some points for myself which I made clear for myself at the beginning: This might provide a good starting point and really narrow down your research options as generic research on property investment can be overwhelming. I ended up with a 3 Bedder in western Sydney that has so far happily paid for itself. Building a good relationship with real estate agents and attending lots of open homes/auctions and talking to other investors can only help. I was once told if you attend free property investment seminars you will always learn at least one new thing (be it statistics, methodologies, finance options etc ), with that in mind always keep a level head, leave your wallet at home and don't sign up to anything. At the end of the day keep a cool head, don't stop reading and rush nothing.
|
Auto balancing portfolio through new purchases
|
Finding the "optimal" solution (and even defining what optimal is) would probably take a lot of searching of all the possible combinations of stocks you could buy, given that you can't buy fractional shares. But I'd guess that a simple "greedy" algorithm should get you close enough. For any given portfolio state, look at which stock is furthest below the target size - e.g. in your example, S3 is 3.5% away whereas S1 is only 3.1% away and S2 is over-sized. Then decided to buy one stock of S3, recalculate the current proportions, and repeat until you can't buy more stocks because you've invested all the money. If you have to pay a transaction fee for each kind of stock you purchase you might want to calculate this in larger lot sizes or just avoid making really small purchases.
|
401K - shift from agressive investment to Money Market
|
If you look at history, it shows that the more people predict corrections the less was the chance they came. That doesn't prove it stays so, though. 2017 is not any different than other years in the future: Independent of this, with less than ten years remaining until you need to draw from your money, it is a good idea to move away from high risk (and high gain); you will not have enough time to recover if it goes awry. There are different approaches, but you should slowly and continuously migrate your capital to less risky investments. Pick some good days and move 10% or 20% each time to low-risk, so that towards the end of the remaining time 90 or 100% are low or zero risk investments. Many investment banks and retirement funds offer dedicated funds for that, they are called 'Retirement 2020' or 'Retirement 2030'; they do exactly this 'slow and continuous moving over' for you; just pick the right one.
|
Subsets and Splits
No community queries yet
The top public SQL queries from the community will appear here once available.