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Why do shareholders participate in shorting stocks? | Because they receive compensation (generally interest + dividends) for loaning out the shares. I own an asset X. Somebody else wants to borrow asset X for some time period. I agree to loan them asset X in return for some form of compensation (generally a rate of interest plus, in this specific case, any dividend pa... |
What risks are there acting as a broker between PayPal and electronic bank transfers? | Another reason to think it's a scam: fake paypal email notifications are a thing. I've seen one that was quite convincing (but it wasn't mine to properly analyse or report), so the intial payment may be a fake from another account belonging to the scammer, and you've just transferred money to the scammer. The fake ema... |
When should I walk away from my mortgage? | The worth of a credit score (CS) is variable. If you buy your stuff outright with 100% down then your CS is worthless. If you take a loan to buy stuff then it is worth exactly what you save in interest versus a poor score. But there is also the "access" benefit of CS where loans will no longer be available to you, for... |
How does the importance of a cash emergency fund change when you live in a country with nationalized healthcare? | The issue is how likely you will have zero income for six months, and what are your monthly expenses. If you know the maximum medical bill you face that may allow you to save a smaller amount. But you still have to protect for that loss of income. The interuption could be because of job loss, medical emergency, or othe... |
Sales Tax: Rounded Then Totaled or Totaled Then Rounded? | First of all to answer the basic question "Is one method correct? Might it depend on local laws?" Yes it does depend on local laws. Because ultimately the business will have to file forms with the sate/county/city. These forms are going to ask for the total sales based on the tax category (tax free, x%, y%). Each tran... |
Should I continue to invest in an S&P 500 index fund? | You have a good thing going. One of the luxuries of being invested in an index fund for the long term is that you don't have to sweat the inevitable short term dips in the market. Instead, look at the opportunity that presents itself on market dips: now your monthly investment is getting in at a lower price. "Buy low, ... |
Buying real estate with cash | I've been prompted to turn my comments into an answer - Disclosure - I am a Realtor. I work for an investor for whom an offer on a house he will buy describes him as a "cash buyer." This phrase most often means one of two things - The buyer has funds that are liquid enough to either wire the cash or produce a cashier... |
How to help a financially self destructive person? | You can't help people that don't want help, period. It just doesn't work, and you will waste your time and energy while making the other person mad. Both sides end up in the same place they started except now they are frustrated with each other. In a normal situation I would advise to stop enabling her by giving her mo... |
Trying to figure out my student loans | Is there anything here I should be deathly concerned about? A concern I see is the variable rate loans. Do you understand the maximum rate they can get to? At this time those rates are low, but if you are going to put funds against the highest rate loan, make sure the order doesn't change without you noticing it. What ... |
give free budgeting advice | The counsel of a friend doesn't come with a legal or professional liability. The key to doing this sort of thing successfully is to respect boundaries. You are providing advice and discussion, not taking over your friend's life. |
Short Term Capital Gains tax vs. IRA Withdrawal Tax w/o Quarterly Est. Taxes | Bottom line is this: there's no "short term capital gains tax" in the US. There's only long term capital gains tax, which is lower than the regular (aka ordinary) tax rates. Short term capital gains are taxed using the ordinary tax rates, depending on your bracket. So if you're in the 25% bracket - your short term gain... |
Offsetting the tax on vested RSUs with short term capital loss | No. The gain on RSU is not a capital gain, it is considered wages and treated as part of your salary, for tax purposes. You cannot offset it with capital losses in excess of $3000 a year. If you have RSUs left after they vest, and you then sell them at gain, the gain (between the vesting price and the sale price) is ca... |
Home Renovations are expensive.. Should I only pay cash for them? | It depends on your situation. If your floor is broken, fix it. If you don't have $1,000 on hand, spend appropriately. It seems silly to be doing ROI calculations on the potential impact on resale value. It's sillier to blow money frivolously, whether you do so with cash or credit. I'm assuming that if you have a broke... |
“Debt Settlement Order” Text Spams – How do they work? | There are likely to be two approaches: An autodialer of any description would be more than capable of sending an SMS or initiating a direct telephone call with any set of telephone numbers. Such autodialiers can run off a personal computer via VoIP or some such third-party. As to getting the numbers, it can be either... |
Is there data and proof that a diversified portfolio can generate higher returns than the S&P 500 Index? | Is it POSSIBLE? Of course. I don't even need to do any research to prove that. Just some mathematical reasoning: Take the S&P 500. Find the performance of each stock in that list over whatever time period you want to use for your experiment. Now select some number of the best-performing stocks from the list -- any numb... |
In Canada, how much money can I gift a friend or family member without them being taxed on it? | When you give a gift to another person or receive a gift from another person there is no impact on your taxes. You do not have to report certain amounts in your income, including the following: ... -most gifts and inheritances; http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/rprtng-ncm/nttxd-eng.html If y... |
Student loan payments and opportunity costs | I'll use similar logic to Dave Ramsey to answer this question because this is a popular question when we're talking about paying off any debt early. Also, consider this tweet and what it means for student loans - to you, they're debt, to the government, they're assets. If you had no debt at all and enough financial as... |
What college degree should I pursue to learn about stock and forex markets? | There are several paths of study you could undertake. If you want to learn the fundamentals of the stock market and become a financial analyst, then finance, economics, and accounting (yes, accounting) are all good to study either on your own or in an institution. Furthermore, if you want to study a specific industry, ... |
Mortgage or not? | I often say "don't let the tax tail wag the investing dog." I need to change that phrase a bit to "don't let the tax tail wag the mortgage dog." Getting a tax deduction on a 4% mortgage basically results (assuming you already itemize) in an effective 3% rate mortgage. The best way to avoid tax is save pretax in a 401(k... |
Should I be worried that I won't be given a receipt if I pay with cash? | If this is because he wants to avoid paying taxes, will I get in trouble if I agree to have him work on my vehicle? You should check your state and local sales tax laws to be certain, but in my state you have no liability if he does not pay his taxes. That's his problem, not yours. The biggest risk for you is if some... |
Should I take out a bigger mortgage, or pay a greater cash deposit? | At a minimum, I would save 20-30k, because you need to have both a safety net and some money for home repairs. Very few people move into a house and then do zero repairs - painting, usually, at a minimum, and there's almost always something that comes up pretty soon after. Even if you're buying a condo, you'll want t... |
Can I use balance transfer to buy car? | You do not say what country you are in. This is an answer for readers in the UK. Most normal balance transfer deals are only for paying off other credit cards. However there are "money transfer" deals that will pay the money direct to your bank account. The deals aren't as good as balance transfer deals but they are of... |
Prepaying a loan: Shouldn't the interest be recalculated like a shorter loan? | Your thinking is unfortunately incorrect; an amortising loan (as opposed to interest only loans) pay down, or amortise, the principal with each payment. This means that the amount that is owed at prepayment will always be less than the total borrowed, and is also why some providers make a charge for prepayment. The "fa... |
In the stock market, why is the “open” price value never the same as previous day's “close”? | Besides overnight news events and auction mechanisms there is a more fundamental reason the price of a stock is always moving. Theoretically the stock price will move slightly even in the unlikely scenario that absolutely nothing of interest happens during the entire night. Let me go into that in some more detail: St... |
Should I pay off my car loan within the year? | Typically the power of capitalized interest would work in your favor and you could carry the loan paying it down while investing the original sum which would earn interest. BUT you aren't going to get any sort of return to compare with 15% so pay off that loan immediately. Also contrary to popular belief (and reiterate... |
Any other options for cash-out/construction loans? | For alternative financing, pursue a line of credit or a Home Equity Line of Credit. (From the comments of @ChrisInEdmonton and @littleadv on the original question) |
Historical company performance data | The S&P report (aka STARS report) for each company has 10 years of financial data. These reports are available free at several online brokers (like E-Trade) if you have an account with the brokerage. |
What do these options trading terms mean? | The two dimensions are to open the trade (creating a position) and to buy or sell (becoming long or short the option). If you already own an option, you bought it to open and then you would sell it to close. If you don't own an option, you can either buy it to open, or sell it (short it) to open. If you are already sho... |
Is there a list of OTC stocks being added to the major exchanges? | Check your broker's IPO list. Adding a new stock to a stock exchange is called "Initial Public Offering" (IPO), and most brokers have a list of upcoming IPO's in which their clients can participate. |
Lending to the bank | This will happen automatically when you open an interest-bearing account with a bank. You didn't think that banks just kept all that cash in a vault somewhere, did you? That's not the way modern banking works. Today (and for a long, long time) banks will keep only a small fraction of their deposits on hand (called... |
Car Loan upside down--refinance before selling? | As for refinancing: Many institutions charge up-front fees when doing any type of vehicle loan. Typically this is in the neighborhood of 1% the value of the loan, with a floor of $100 (although this may vary by lender). However, for the loan the be secured by the vehicle, the principle value must be less than the colla... |
What if I sell an stock that is going to give an stock dividend after the ex-date but before the payable date | I know that in the case of cash dividends I will get the dividend as long as I bought the stock before the ex-date but what happens in the case of an stock dividend? This is same as cash dividends. You would receive the additional stock. |
What does the phrase “To make your first million” mean? | I've not heard it used in any way other than one's net worth reaching a million. No 30 yr old lawyer brags that his cumulative income just passed $1M because he may not have saved a dime of it. |
Why do some stocks have trading halts and what causes them? | The company may have put a trading halt due to many reasons, most of the time it is because the company is about to release some news to the market. To stop speculation driving the price up or down, it puts a halt on trading until it can get all the information together and release it to the market. This could be news ... |
Can heavy demand for options drive up or down a stock price? | You will tend to find as options get closer to expiry (within 2 months of expiry) they tend to be traded more. Also the closer they are to being in the money they more they are traded. So there tends to be more demand for these options than long dated ones that are far out of the money. When there is this higher demand... |
Is there any data that shows how diversifying results in better returns than just sticking to an all-stock portfolio? | This paper by a Columbia business school professor says: The standard 60%/40% strategy outperforms a 100% bond or 100% stock strategy over the 1926-1940 period (Figure 5) and over the 1990-2011 period (Figure 6). This is based on actual market data from those periods. You can see the figures in the PDF. These are per... |
Bi-weekly payment option | One point that I don't see covered in the other answers yet: How does this affect the months that have 5 weeks. Do we actually lose two weeks a year? I get paid every two weeks, and pay day is always a Friday. Some months, I get paid 3 times - which is always great. If you live within your means, it's like an extra p... |
Switching Accountants - who does the audit review for past years? | It depends on what you paid for, but usually audit support is an unrelated engagement to the return preparation. If the accountant made a professional mistake, you can request correction and compensation from that accountant, other than that any accountant can help you with audit regardless of who prepared the return. ... |
Should I get cash from credit card at 0% for 8 months and put it on loans? | If there is any fee at all on the cash advance, and zero interest on the student loans (for now), it's not worth it mathematically. And for only 8 months of "free" money, it's rare for it to be worth it overall. You need to save a significant amount either by having a good net interest rate (e.g., saving 20% on anothe... |
Is dividend included in EPS | No, dividends are not included in earnings. Companies with no earnings sometimes choose to pay dividends. Paying the dividend does not decrease earnings. It does of course decrease cash and shows up on the balance sheet. Many companies choose to keep the dividend at a fixed rate even while the business goes through... |
If you buy something and sell it later on the same day, how do you calculate 'investment'? | Not sure if your question is on topic, but the investment is only $9 because that is maximum amount of money the merchant ever needed to start up the business. He put in $9, started turning a profit, and never looked back. |
If I have a lot of debt and the housing market is rising, should I rent and slowly pay off my debt or buy and roll the debt into a mortgage? | What you propose is to convert unsecured debt into secured debt. Conversion of unsecured debt into secured debt is not generally a good idea (several reasons). The debt you currently owe does not have assets securing the debt, so the creditor knows they are exposed to risk, and may be more willing to negotiate or rela... |
How do I invest in emerging markets | Morningstar is often considered a trusted industry standard when it comes to rating mutual funds and ETFs. They offer the same data-centric information for other investments as well, such as individual stocks and bonds. You can consult Morningstar directly if you like, but any established broker will usually provide ... |
Is compounding interest on investments a myth? | This post may be old anyhow here's my 2 cents. Real world...no. Compounding is overstated. I have 3 mutual funds, basically index funds, you can go look them up. vwinx, spmix, spfix in 11 years i've made a little over 12,000 on 50,000 invested. That averages 5%. That's $1,200 a year about. Not exactly getting rich on ... |
What is the rationale behind stock markets retreating due to S&P having a negative outlook on the USA? | When people (even people in the media) say: "The stock market is up because of X" or "The stock market is down because of Y", they are often engaging in what Nicolas Taleb calls the narrative falacy. They see the market has moved in one direction or another, they open their newspaper, pick a headline that provides a pl... |
How to tell if an option is expensive | An option, by definition, is a guess about the future value of the stock. If you guess too aggressively, you lose the purchase price of the option; if you guess too conservatively, you may not take the option or may not gain as much as you might have. You need to figure out what you expect to happen, and how confident ... |
How to account for personal baby sitter? | You said your mother-in-law lives with you. Does she pay rent, or are you splitting the cost of housing? That would also have to figured into the equation. If you had a business you would now have to declare the expense on your business taxes. This would also then be income for her, which she would have to account for... |
Is the stock market a zero-sum game? | No. Share are equity in companies that usually have revenue streams and/or potential for creating them. That revenue can be used to pay out dividends to the shareholders or to grow the company and increase its value. Most companies get their revenue from their customers, and customers rarely give their money to a compa... |
Why is a home loan (mortgage) cheaper than gold loan? | My doubt is whether Govt./Reserve Bank of India gives any explicit incentives to banks to offer cheaper home loans ? Currently NO. In the past Loan against GOLD was considered priority sector lending [Loans to poor and agriculture etc]. Every Bank need to lead around 25% to priority sector. Hence quite a few Banks gave... |
Can I negotiate a 0% transaction fee with my credit card company? | TL;DR summary: 0% balance transfer offers and "free checks usable anywhere" rarely are a good deal for the customer. 0% rate balance transfer offers (and the checks usable anywhere including payment of taxes) come with a transaction fee because the credit card company is paying off the balance on the other card (or t... |
Should I buy or lease a car given that its not a super luxury car and I only drive 15 miles/d on avg? | Leasing is not exactly a scam, but it doesn't seem to be the right product for you. The point of leasing over buying is that it turns the capital purchase of a car which needs to be depreciated for tax purposes into what is effectively a rental expense. Rent is an expense that can be deducted directly without depreci... |
How does stock dilution work in relation to share volume? | Let me answer with an extreme example - I own the one single share of a company, and it's worth $1M. I issue 9 more shares, and find 9 people willing to pay $1M for each share. I know find my ownership dropped by 90%, and I am now a 10% owner of a business that was valued at $1M but with an additional $9M in the bank f... |
What happen in this selling call option scenario | But what happen if the stock price went high and then go down near expiry date? When you hold a short (sold) call option position that has an underlying price that is increasing, what will happen (in general) is that your net margin requirements will increase day by day. Thus, you will be required to put up more money... |
Is it possible for the average person to profit on the stock market? | Of course. "Best" is a subjective term. However relying on the resources of the larger institutions by pooling with them will definitely reduce your own burden with regards to the research and keeping track. So yes, investing in mutual funds and ETFs is a very sound strategy. It would be better to diversify, and not to... |
Is it practical to take actual delivery on a futures contract, and what is the process? | Not all futures contracts are deliverable. Some futures are specified as cash settlement only. In the case of deliverable contracts, part of the specification of a futures contract will be the delivery locations. As per my answer to your previous question, please see the CME Rulebook for details of delivery points fo... |
Would the purchase of a car for a business through the use of a business loan be considered a business expense? | You don't say what country you live in. If it's the U.S., the IRS has very specific rules for business use of a car. See, for starters at least, http://www.irs.gov/publications/p463/ch04.html. The gist of it is: If you use the car 100% for business purposes, you NEVER use it to drive to the grocery store or to your fri... |
Are online mortgage lenders as good as local brick-and-mortar ones? | I had a pretty good experience with Lending Tree, although they are a mortgage broker, not a lender themselves. |
Should I pay a company who failed to collect VAT from me over 6 months ago? | It looks like businesses selling services (like software downloads) from outside the EU to the UK have to register for VAT if the amount of such sales goes over the UK VAT registration threshold: [If] the value of the taxable supplies you make is over a specified threshold [then] you must register for VAT So it seems... |
How to calculate stock price (value) based on given values for equity and debt? | There is no formula for calculating a stock price based on the financials of a company. A stock price is set by the market and always has a component built into it that is based on something outside of the current valuation of a company using its financials. Essentially, the stock price of a company per share is whatev... |
What is “financial literacy” and how does one become “financially literate”? | Wikipedia has a nice definition of financial literacy (emphasis below is mine): [...] refers to an individual's ability to make informed judgments and effective decisions about the use and management of their money. Raising interest in personal finance is now a focus of state-run programs in countries inclu... |
Does the stock market create any sort of value? | With regards to "the stock market," there are actually two markets involved here: PRIMARY MARKET Value is created in the primary market where capital is exchanged for a residual interest in an opportunity. As a theoretical example, if a person operating solo (or with a small team) were to discover or create a breakthr... |
What's the general principle behind choosing saving vs. paying off debt? | Debt creates risk. Plain and simple. Comparing interest rates of debt vs. possible investing. To me, it is all meaningless. When you are in debt, you options are limited. If you are not in debt, you have more freedom. To me, it is a no brainer. Become debt free ASAP. |
Why does gold have value? | Gold has value because for the most of the history of mankind's use of money, Gold and Silver have repeatedly been chosen by free markets as the best form of money. Gold is durable, portable, homogeneous, fungible, divisible, rare, and recognizable. Until 1971, most of the world's currencies were backed by Gold. In ... |
standard method for learning more about a specific sector? (particularly biotech sector) | The important piece here is not necessarily understanding intimate details of biological engineering per se, but rather understanding how the business operates as a singular unit. It is also important to understand the business case for a firm, the evolution of demand for its products/services and the cost of its reven... |
Finding stocks following performance of certain investor, like BRK.B for Warren Buffet | Since nobody seems to have an answer here is the list I've came up so far: I'll keep adding to the list - also feel free to edit or comment if can add to the list. |
Determining the basis for capital gain [duplicate] | If you make money in currency speculation (as in your example), that is a capital gain. A more complicated example is if you were to buy and then sell stocks on the mexican stock exchange. Your capital gain (or loss) would be the difference in value in US dollars of your stocks accounting for varying exchange rates. ... |
Is a credit card deposit a normal part of the vehicle purchase process | Unfortunately, it's not unusual enough. If you're looking for a popular car and the dealer wants to make sure they aren't holding onto inventory without a guarantee for sale, then it's a not completely unreasonable request. You'll want to make sure that the deposit is on credit card, not cash or check, so you can dis... |
How to make a decision for used vs new car if I want to keep the car long term? | This is my opinion as a car nut. It depends on what you want out of a car. For your situation (paying cash, want to keep the car long-term but also save money) I recommend seriously considering a slightly used vehicle, maybe 2 or 3 years old, or a "certified pre-owned vehicle". Reasons: Much less expensive than a brand... |
Why can Robin Hood offer trading without commissions? | They mostly make money off of the spread between your order and the spread of the buy and sell currently in the market. As others have previously explained, their buy/sell spreads are a little lacklustre. |
I'm an American in my mid 20's. Is there something I should be doing to secure myself financially? | First of all, make sure you have an emergency fund. Ideally this should be at least 6 months of living expenses in an easily accessible place. Do you have any credit card debt, school debt, or other debt? Work towards becoming debt free, especially of higher interest debt and debt on things that are only depreciating... |
How can I work out how much a side-job contracting will be taxed for? | Being self-employed, your "profit" is calculated as all the bills you send out, minus all business-related cost that you have (you will need a receipt for everything, and there are different rules for things that last for long time, long tools, machinery). You can file your taxes yourself - the HRS website will tell y... |
Is there any way to attach a statement of explanation while submitting a tax return electronically using Free Fillable Forms? | Depending on what you need to explain, you can submit your electronic return without the supplemental information and subsequently mail a Form 8453 with the additional information. This is helpful for form 8489, for example, where you need to list every transaction reported by your stock broker on a 1099-B. See https... |
Should I buy out my brother on a property we will inherit before making improvements? | In the end you, your dad, and your brother should come to an agreement so there's no surprises or unfulfilled expectations, but here's my opinion: If you can afford to make the additions now: I would offer to pay fully for the addition, with the understanding that the additional value that it generates is yours. That ... |
Renters Liability in Case of Liability Claims for Property Damage or Fire | The truth is anyone can sue anyone for anything. So yes you could be sued, but the more important part to measure is the probability of success. While this is probably more of a legal stack exchange question, in order for a successful suit there has to be proven at least some negligence on your part in the situation... |
Are there Investable Real Estate Indices which track Geographical Locations? | Not to my knowledge. Often the specific location is diversified out of the fund because each major building company or real estate company attempts to diversify risk by spreading it over multiple geographical locations. Also, buyers of these smaller portfolios will again diversify by creating a larger fund to sell to ... |
How do you calculate the rate of return (ROR) when buying and selling put options? | RoR for options you bought is fairly easy: (Current Value-Initial Cost)/Initial Cost gives you the actual return. If you want the rate of return, you need to annualize that number: You divide the return you got above by the number of days the investment was in place, and then multiply that number by the number of days ... |
Receive credit card payment sending my customer details to a credit card processing company? | Yes, there are a bunch. I have used Paypal and it worked quite nicely. I see endless ads these days for Square, a tiny card reader that you plug into a smartphone that lets you swipe the card. (With Paypal you have to type in the credit card number.) |
Are lottery tickets ever a wise investment provided the jackpot is large enough? | Firstly, playing the lottery is not investing it is gambling. The odds in gambling are always against you and with the house. Secondly, no one would ever give you a payout of 3 to 1 when the odds are 50:50, unless they were looking to give away money. Even when you place your chips on either red or black on a roulette... |
Boyfriend is coowner of a house with his sister, he wants to sell but she doesn't | It seems likely that the mortgage is not in your boyfriend's name because he never would have qualified if he can't even afford utilities after paying the mortgage. It also seems unfair that his sister continues to have a 50% share of the equity if your boyfriend has been making the entire payment on the mortgage every... |
Do I just let an options conversion/reversal trade go to expiration? | To Chris' comment, find out if the assignment commission is the same as the commission for an executed trade. If that does affect the profit, just let it expire. I've had spreads (buy a call, sell a higher strike call, same dates) so deep in the money, I just made sense to let both exercise at expiration. Don't panic ... |
Are leverage/ko products the only reasonable way to trade stocks? | There's no free lunch. Here are some positions that should be economically equivalent (same risk and reward) in a theoretically-pure universe with no regulations or transaction costs: You're proposing to buy the call. If you look at the equivalent, stock plus protective put, you can quickly see the "catch"; the protect... |
Total price of (AAPL option strike price + option cost) decreases with strike price. Why? | Think about it this way. If the strike price is $200, and cost of the option is $0.05. $200 + $0.05 is $200.05. That does not mean that the price of buying the option is more. Neither is the option writer going to pay you $70 to buy the contract. When you are buying options, you can only have a limited downside and th... |
I am a contractor with revenue below UK's VAT threshold. Should I register for VAT? | If I remember correctly, once you're about to exceed the threshold you really don't have a choice and have to register for VAT. As DumbCoder mentions, the quarterly VAT returns isn't that much of a hassle, plus if you fall under a certain threshold, you can sign up for the annual accounting scheme for VAT, which means ... |
How to choose a good 401(k) investment option? | The vanguard funds are all low fee your employer has done a good job selecting their provider for 401(k). I would do a roth if you can afford it as taxes are at a historical low. Just pick the year you want to get your money if you will need your money in 2040 pick Vanguard Target Retirement 2040 Fund. Its that sim... |
Will my Indian debit card work in the U.S.? | You can use the debit card for practically any purchase that you make. You'll have to take the usual precautions and then a few additional ones. Cards make your life really easy and convenient with some basic precautions. All the best for your travel and stay in the USA. My two cents. |
Can a company have a credit rating better than that of the country where it is located? | In one personal finance book I read that if a company is located in a country with credit rating X it can't have credit rating better (lower - i.e. further from AAA level) than X. This is simply wrong. Real world evidence proves it wrong. Automatic Data Processing (ADP), Exxon Mobile (XOM), Johnson & Johnson (JNJ), and... |
Should I pay off my credit card online immediately or wait for the bill? | I'm really going to go against the crowd here--paying it too fast could be a problem. The thing is you want them reporting that you paid the bill as agreed. To do that you need to pay the bills--which means you need to leave the charges there to get billed for. Paying less than the total is fine, paying as soon as th... |
Does it make sense to buy a house in my situation? | Just echoing the other answers here. You're not ready yet. 3% down, or no money down loans are what got so many of us into trouble these last few years. It sounds like you make a pretty good living and are able to squirrel away money despite paying rent. Let me suggest something that I haven't seen here yet. Save up f... |
First time investor wanting to invest in index funds especially Vanguard | Congratulations on deciding to save money and choosing to invest it. One thing to know about mutual funds including index funds is that they typically require a minimum investment of a few thousand dollars, $3000 being a typical amount, unless the investment is in an IRA in which case $1000 might be a minimum. In some ... |
What options do I have at 26 years old, with 1.2 million USD? | Until you get some financial education, you will be vulnerable to people wanting your money. Once you are educated, you will be able to live a tidy life off this-- which is exactly why this amount was awarded to you, rather than some other amount. They gave you enough money. This is not a lottery win. I mean "fin... |
Should I buy a home or rent in my situation? | First, let me mention that the reasons mentioned this far for renting are excellent ones. But, I disagree. Second, I would like to mention that I'm just a regular Joe, not an accountant, or a realtor. That said, I was in a similar situation not that long ago. I ended up renting, but I wish I hadn't. You should check ou... |
Is it OK to use a credit card on zero-interest to pay some other credit cards with higher-interest? | Many people who do transfer a balance from one credit card to another have no clue as to what is going on and how credit cards work. If you transfer a balance from one credit card to another, you are charged a fee of anywhere from 3% upwards (subject to a minimum of $10 or so) up front. If Credit Card A has balance $10... |
The Asset Allocation Paradox | I recommend you take a look at this lecture (really, the whole series is enlightening), from Swenson. He identifies 3 sources of returns: diversification, timing and selection. He appears to discard timing and selection as impossible. A student kinda calls him out on this. Diversification reduces risk, not increase ret... |
Form 1040 - where to place my stipend? | Some of the 45,000 might be taxable. The question is how was the stipend determined. Was it based on the days away? The mile driven? The cities you worked in? The IRS has guidelines regarding what is taxable in IRS Pub 15 Per diem or other fixed allowance. You may reimburse your employees by travel days, miles, or so... |
Have my parents been bilked? If so, what to do? | If they made deposits 20 years ago, and none since, the S&P is up over 300% since then. i.e. a return of $40,000 on $10,000 invested. We wouldn't expect to see that full return, as a prudent mix of stock and bonds (or any treasury bills/CDs, etc) would lower the overall return during this period. Advice "Transfer the ... |
Is human interaction required to open a discount brokerage account? | You definitely do not need human interaction to open an account at Schwab. You just need to provide a social security number and US drivers license. See http://www.schwab.com/public/schwab/investing/accounts_products/accounts/brokerage_account You can do it online or through the mail. They usually have some questions a... |
Naked calls and buying the stock later | Has anyone done this before? I'm sure someone has, but it doesn't completely remove any price risk. Suppose you buy it at 10 and it drops to 5? Then you've lost 5 on the stock and have no realized gain on the option (although you could buy back the option cheaply and exist the position). To completely remove price ri... |
Why do people invest in mutual fund rather than directly buying shares? | How on earth can you possibly know what is going on in individual company X? The sole exception is if it is your own company. The stock markets of the world are in fact a nest of sharks. The big sharks essentially make money out of the little sharks. Some little sharks manage not to be eaten, and grow bigger. Good ... |
Project future trend of a stock with high positive autocorrelation | Auto-correlation is a statistical concept for measuring repeating patterns in series. In stocks it is of particular interest as if future prices can be reliably guessed from past prices a lot of money could be made. Note, even in cases where auto-correlations are high and persistent (near 1) there is still some poss... |
Are Forex traders forced to use leverage? | Actually, most of the forex traders do not prefer the practice of leveraging. In forex trading, a contract signed by a common trader is way more than any common man can afford to risk. It is not a compulsion for the traders to use leveraging yet most of the traders practice it. The other side of it is completely differ... |
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