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Pros and cons of investing in a cheaper vs expensive index funds that track the same index
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Cheaper would refer to the fees of a fund rather than the share price, IMO. Are 2 quarters worth more or less than 10 nickels? This is another way to express your question though most open-end funds bought directly from the fund family or through fund supermarkets would do fractional shares that may be better than going through ETFs though there can be some brokers like Sharebuilder that used to do fractional shares though not necessarily having the best execution as I recall.
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New car price was negotiated as a “cash deal”. Will the price change if I finance instead?
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So there are a few angles to this. The previous answers are correct in saying that cash is different than financing and, therefore, the dealer can rescind the offer. As for financing, the bank or finance company can give the dealership a "kickback" or charge a "fee" based on the customer's credit score. So everyone saying that the dealers want you to finance....well yes, so long as you have good credit. The dealership will make the most money off of someone with good credit. The bank charges a fee to the dealership for the loan to a customer with bad credit. Use that tactic with good credit...no problem. Use that tactic with bad credit.....problem.
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Is Cost of Living overstated?
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I live in Upstate NY. It's a great, reasonable cost place to live -- provided that you have a job. In NYC, there are probably a few hundred jobs with duties similar to mine in a 45-minute radius. Upstate, there may be 5-6.
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How do you determine “excess cash” for Enterprise Value calculations from a balance sheet?
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You're not missing anything. Excess cash is somewhat of a nebulous concept. To different people it means different things. The answer is that excess cash varies for each company depending on their business. For instance, some companies need very high amounts of working capital. A company may be increasing their inventories and therefore will require more cash on their balance sheet to fund growth. If a company always needs this extra cash, some investors prefer to leave that cash out of a valuation because the company cannot run profitably without it. Think about what happens to your calculation of Enterprise Value if you subtract excess cash as opposed to cash. Excess cash is always less than cash. Therefore by subtracting excess cash you increase EV. Since one common valuation metric is EV/EBITDA, a higher numerator will make the stock seem more expensive - that is the EV/EBITDA ratio will seem higher when using excess cash as opposed to cash. So using excess cash in your valuation methodology is basically a conservative concept. Depending on the business 20% of revenues seem way too high as a reserve for excess cash. 2% is a much better rule of thumb.
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What are the advantages of a Swiss bank account?
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For an American it nearly impossible to open a Swiss bank account. Even a Swiss person want to open a bank account, we have to fill out a document, which asks us if we have a greencard or other relationships with the united states. Some Swiss banks have transferred the money of Americans to Singapore to protect their clients. So you see, the Swiss banks do very much for their clients. And yes, we don't ask very much about money ;) And we are a politically neutral country, but we like the United States more than Russia and of course we have enemies, like the ISIS
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Company A is buying company B, what happens to the stock?
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I think the correct statement is that Expedia wants to buy Orbitz for $12/share. The market price is $11, which means there is somebody willing to sell for that price. But you can't say that a stock price of $11 means that everybody is willing to sell for that price. And Expedia is unlikely to bid $12/share for just 40% of Orbitz shares; they'll want at least a controlling majority.
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Is there a way to open a U.S. bank account for my LLC remotely?
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Yes, it is possible. Although there may be red tape for a business account, Alliant Credit Union offers completely online signup and their representatives are reachable by email. You'll probably need to send in the LLC articles this way http://www.alliantcu.com/checking-accounts.html (as pointed out by @littleadv this site defaults to "personal checking" accounts, there is a business checking tab which doesn't generate a direct link, some might miss that) And even if there are a ton of regulations that some pencil pushers at larger banks anecdotally cite (without citing), there will be enough banks that don't care. Good Luck
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How frequently should I request additional credit?
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I do this all the time, my credit rating over time plotted on a graph looks like saw blades going upward on a slope I use a credit alert service to get my credit reports quarterly, and I know when the credit agencies update their files (every three months), so I never have a high balance at those particular times Basically, I use the negative hard pulls to propel my credit score upwards with a the consequentially lowered credit utilization ratio, and the credit history. So here is how it works for me, but I am not an impulse buyer and I wouldn't recommend it for most people as I have seen spending habits: Month 1: charge cards, pay minimum balance (raises score multiple points) Month 2: PAY OFF ALL CREDIT CARDS, massive deleveraging using actual money I already have (raises score multiple points) Month 3: get credit report showing low balance, charge cards, pay minimum balance ask for extensions of credit, AND followup on new credit line offers (lowers score several points per credit inquiry) Month 4: charge cards, pay minimum balance, discretionally approving hard pulls - always have room for one or two random hard pulls, such as for a new cell phone contract, or renting a car, or employment, etc Month 5: PAY OFF CREDIT CARDS using actual money you have. (the trick is to NEVER really go above a 15% credit utilization ratio, and to never overleverage. Tricky because very quickly you will get enough credit to go bankrupt) Month 6: get credit report showing low balances, a slight dip in score from last quarter, but still high continue.
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Is there an ETF or Mutual Fund which tracks James O'Shaugnessy's Trending 25 stock strategy?
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Funds can't limit themselves to a small number of stocks without also limiting themselves to a small amount of total investment. I think 25 companies is too small to be practical from their point of view.
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Are lottery tickets ever a wise investment provided the jackpot is large enough?
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Mathematically speaking there would be a point where the expected value EV of purchasing every possible ticket would be favorable but only if you take in account both the jackpot payout and the lesser payouts of all the wining tickets however practically speaking since the powerball has a liability payout limit which means they dont have to pay out more money than they took in you cant beat the house ( or the government)
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How to spend more? (AKA, how to avoid being a miser)
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I spend hours researching two comparable products to try to save $3. Me too! I have also argued for hours with customer support to get $5/month off a bill (that's $60/year!), and I feel guilty every time I eat out or do something remotely luxurious, like getting fries with my $1 McChicken. Geez, even when I play video games, I hate spending the in-game currency. For me, it's obsessive-compulsive traits that cause it, but please note that I'm not claiming @Eddie has them. Just speaking for myself here, but I hope it helps. I still struggle with my miserliness, but I can share what works for me and what doesn't. I don't think I'm valuing my time nearly as much as I should. Me neither, but knowing that doesn't help; it makes it worse. For me, putting a dollar amount on how much I value my time does not work because that just complicates the problem and amplifies how much time I spend solving that multi-variable optimization problem. Consider trying to convince Monk not to avoid germs in order to build antibodies; it just makes him think more about germs, raising anxiety and making easy decisions (use a handkerchief to touch doorknobs) into a hard decision (should I touch it or should I not?). It also amplifies the regret whenever you finally make a certain choice ("what if I did the calculation wrong?" or "what if I'm going to get sick tomorrow because I touched that doorknob?"). Making the problem more complicated isn't the solution. So how to make it simpler? Make the decision ahead of time! For me, budgets are the key to reducing the anxiety associated with financial decision making. Every six months or so, my wife and I spend hours deciding how much to spend per month on things. We can really take our time analyzing it because we only have to do it occasionally. Once we set $50/month for restaurants, I no longer have to feel like a loser every time we eat out -- similarly for discretionary spending and everything else. TBH, I'm not sure exactly why it works -- why I don't regret the dollar amounts we put on every budget -- but it really does help. I join my coworkers for lunch on Fridays because I already decided that was okay. At that point, I can focus my OC-tendencies on eating every last gram of organic matter on my plate. Without directly touching the ketchup bottle, of course. :) Again, just speaking for myself, but having budgets has done wonders for my stress level with respect to finances. For me, budgets are less about restricting my spending and more about permitting me to spend! It's not perfect, but it helps. (Not that it's relevant, but I reworded this answer about 20 times and only hit 'Post' with great effort to suppress the need to keep editing it! I'll be refreshing every 30 seconds for updates.)
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Peer to peer lending in Canada?
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Yes and no, P2P Capital Markets is similar concept but is more geared towards business loans. Community Lend used to offer this service but has stopped.
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What should I do with $4,000 cash and High Interest Debt?
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If it were me, I would pay off the 23%er. That is as long as you don't borrow anymore. Please consider "your hair on fire" and get that 26%er paid off as soon as possible. From my calculations your big CC is sitting at 26% has a balance of 20K. Holy cow girl, what in the world? The goal here is to have that paid off in less than one year. Get another job, work more than you have in your life. Others may disagree as it is more efficient to pay down the 26%er. However, if you pay it all of within the year the difference only comes to $260. If you gain momentum, which is important in changing your financial life, that $260 will be meaningless. With focus, intensity, and momentum you can get this mess cleaned up sooner than you think. However, if you are going to continue to rack up credit card debt at these rates, it does not matter what you do.
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What is the opposite of a sunk cost? A “sunk gain”?
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In the second example you are giving up future free cash flows in exchange for a capital gain on the original investment. With that respect the money you will not gain will be the difference of the future cash flows ( net of related costs) minus the net gain on the panel you have sold. The financial result can be considered as the opposite of a sunk cost, that is a cost you have already incurred ( and cannot be recovered) vs net future gains you are giving up. In more sophisticated financial terms we are talking about the benefit-cost ratio: ( from Investopedia)
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Why would a person not want to purchase a Personal Liability (Umbrella) insurance policy?
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The two questions inherent in any decision to purchase an insurance plan is, "how likely am I to need it?", and "what's the worst case scenario if I don't have it?". The actuary that works for the insurance company is asking these same questions from the other end (with the second question thus being "what would we be expected to have to pay out for a claim"), using a lot of data about you and people like you to arrive at an answer. It really boils down to little more than a bet between you and the insurance company, and like any casino, the insurer has a house edge. The question is whether you think you'll beat that edge; if you're more likely than the insurer thinks you are to have to file a claim, then additional insurance is a good bet. So, the reasons you might decide against getting umbrella insurance include: Your everyday liability is low - Most people don't live in an environment where the "normal" insurance they carry won't pay for their occasional mistakes or acts of God. The scariest one for most is a car accident, but when you think of all the mistakes that have to be made by both sides in order for you to burn through the average policy's liability limits and still be ruined for life, you start feeling better. For instance, in Texas, minimum insurance coverage levels are 50/100/50; assuming neither party is hurt but the car is a total loss, your insurer will pay the fair market value of the car up to $50,000. That's a really nice car, to have a curbside value of 50 grand; remember that most cars take an initial hit of up to 25% of their sticker value and a first year depreciation of up to 50%. That 50 grand would cover an $80k Porsche 911 or top-end Lexus ES, and the owner of that car, in the U.S. at least, cannot sue to recover replacement value; his damages are only the fair market value of the car (plus medical, lost wages, etc, which are covered under your two personal injury liability buckets). If that's a problem, it's the other guy's job to buy his own supplemental insurance, such as gap insurance which covers the remaining payoff balance of a loan or lease above total loss value. Beyond that level, up into the supercars like the Bentleys, Ferraris, A-Ms, Rollses, Bugattis etc, the drivers of these cars know full well that they will never get the blue book value of the car from you or your insurer, and take steps to protect their investment. The guys who sell these cars also know this, and so they don't sell these cars outright; they require buyers to sign "ownership contracts", and one of the stipulations of such a contract is that the buyer must maintain a gold-plated insurance policy on the car. That's usually not the only stipulation; The total yearly cost to own a Bugatti Veyron, according to some estimates, is around $300,000, of which insurance is only 10%; the other 90% is obligatory routine maintenance including a $50,000 tire replacement every 10,000 miles, obligatory yearly detailing at $10k, fuel costs (that's a 16.4-liter engine under that hood; the car requires high-octane and only gets 3 mpg city, 8 highway), and secure parking and storage (the moguls in Lower Manhattan who own one of these could expect to pay almost as much just for the parking space as for the car, with a monthly service contract payment to boot). You don't have a lot to lose - You can't get blood from a turnip. Bankruptcy laws typically prevent creditors from taking things you need to live or do your job, including your home, your car, wardrobe, etc. For someone just starting out, that may be all you have. It could still be bad for you, but comparing that to, say, a small business owner with a net worth in the millions who's found liable for a slip and fall in his store, there's a lot more to be lost in the latter case, and in a hurry. For the same reason, litigious people and their legal representation look for deep pockets who can pay big sums quickly instead of $100 a month for the rest of their life, and so very few lawyers will target you as an individual unless you're the only one to blame (rare) or their client insists on making it personal. Most of your liability is already covered, one way or the other - When something happens to someone else in your home, your homeowner's policy includes a personal liability rider. The first two "buckets" of state-mandated auto liability insurance are for personal injury liability; the third is for property (car/house/signpost/mailbox). Health insurance covers your own emergency care, no matter who sent you to the ER, and life and AD&D insurance covers your own death or permanent disability no matter who caused it (depending on who's offering it; sometimes the AD&D rider is for your employer's benefit and only applies on the job). 99 times out of 100, people just want to be made whole when it's another Average Joe on the other side who caused them harm, and that's what "normal" insurance is designed to cover. It's fashionable to go after big business for big money when they do wrong (and big business knows this and spends a lot of money insuring against it), but when it's another little guy on the short end of the stick, rabidly pursuing them for everything they're worth is frowned on by society, and the lawyer virtually always walks away with the lion's share, so this strategy is self-defeating for those who choose it; no money and no friends. Now, if you are the deep pockets that people look for when they get out of the hospital, then a PLP or other supplemental liability insurance is definitely in order. You now think (as you should) that you're more likely to be sued for more than your normal insurance will cover, and even if the insurance company thinks the same as you and will only offer a rather expensive policy, it becomes a rather easy decision of "lose a little every month" or "lose it all at once".
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Retirement planning 401(k), IRA, pension, student loans
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None of your options seem mutually exclusive. Ordinarily nothing stops you from participating in your 401(k), opening an IRA, qualifying for your company's pension, and paying off your debts except your ability to pay for all this stuff. Moreover, you can open an IRA anywhere (scottrade, vanguard, etrade, etc.) and freely invest in vanguard mutual funds as well as those of other companies...you aren't normally locked in to the funds of your IRA provider. Consider a traditional IRA. To me your marginal tax rate of 25% doesn't seem that great. If I were in your shoes I would be more likely to contribute to a traditional IRA instead of a Roth. This will save you taxes today and you can put the extra 25% of $5,500 toward your loans. Yes, you will be taxed on that money when you retire, but I think it's likely your rate will be lower than 25%. Moreover, when you are retired you will already own a house and have paid off all your debt, hopefully. You kind of need money now. Between your current tax rate and your need for money now, I'd say a traditional makes good sense. Buy whatever funds you want. If you want a single, cheap, whole-market fund just buy VTSAX. You will need a minimum of $10K to get in, so until then you can buy the ETF version, VTI. Personally I would contribute enough to your 401(k) to get the match and anything else to an IRA (usually they have more and better investment options). If you max that out, go back to the 401(k). Your investment mix isn't that important. Recent research into target date funds puts them in a poor light. Since there isn't a good benchmark for a target date fund, the managers tend to buy whatever they feel like and it may not be what you would prefer if you were choosing. However, the fund you mention has a pretty low expense ratio and the difference between that and your own allocation to an equity index fund or a blend of equity and bond funds is small in expectation. Plus, you can change your allocation whenever you want. You are not locked in. The investment options you mention are reasonable enough that the difference between portfolios is not critical. More important is optimizing your taxes and paying off your debt in the right order. Your interest rates matter more than term does. Paying off debt with more debt will help you if the new debt has a lower interest rate and it won't if it has a higher interest rate. Normally speaking, longer term debt has a higher interest rate. For that reason shorter term debt, if you can afford it, is generally better. Be cold and calculating with your debt. Always pay off highest interest rate debt first and never pay off cheap debt with expensive debt. If the 25 year debt option is lower than all your other interest rates and will allow you to pay off higher interest rate debt faster, it's a good idea. Otherwise it most likely is not. Do not make debt decisions for psychological reasons (e.g., simplicity). Instead, always chose the option that maximizes your ultimate wealth.
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How should I interpret this industry research?
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As BobbyScon said in the comments, invest in a company that is developing in that field. Or invest in a company which supplies that field. The people who got rich in the California gold rush were those selling shovels and other miners' supplies. Or bet against whatever you think this will displace. If automobiles are the hot new thing, it might be a bad time to invest in harness leather. Or ... figure out how else it might impact the economy and invest appropriately. But you have to do that evaluation yourself. Or ignore it and stick with your existing strategy, which should have been diversified enough to deliver reasonable results whether this sector takes off or not. Remember that if someone gives you a free tip, they are probably just hoping to pump up the value of their own stock rather than help you.
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Everyone got a raise to them same amount, lost my higher pay than the newer employees
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This question is largely opinion based but I wanted to balance out the people jumping on you. There are lots of factors that go into salary/pay, such as what you contribute to the company and whather you go above or beyond whats expected of you. I would say seniority is one factor, or at least there is a case to be made that it is important. If someone has worked 5 years for me, that is five years that I have not had to search, interview, and train a replacement. I am not a business owner but I do employ people and when someone quits its an extremely stressful process. Not having to go through that, again in my opinion, is worth a small bump in pay. I cant comment on if its fair or not. That is opinion. What is fact is that whenever a broad group of people are given a pay raise for arbitrary reasons and other employees arent, its creates discontent, it hurts morale, employees leave, and in severe cases the business becomes crippled. So Im not sure if its fair, but is it a bad idea? Generally. See here and I highly recommend going here for anyone who thinks dramatically raising pay 'because its the right thing to do' is a good idea
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incorrect printed information on check stock
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Probably a bad assumption, but I'm assuming your in the United States. Keep in mind, that the check number is printed in 2 places on the front of each check. First, in the upper right corner, and also along the bottom edge on of the check. Since the check number is scanned by the bank from the bottom edge of the check, covering or otherwise modifying the check number on the upper left corner will have no effect on the check number that is recorded when the check is processed. And, you can't modify or cover the numbers or place any marks in the area of the numbers along the bottom of the check as this will likely interfere with processing of checks. So, modifying the check numbers will not work. Your choices are basically to: The check numbers are not used in any way in clearing the check, the numbers are only for your convenience, so processing checks with duplicate numbers won't matter. The check numbers are recorded when processed at your bank so they can be shown on your printed and online statements. The only time the check number might be important is if you had to "stop payment" on a particular check, or otherwise inquire about a particular check. But this should not really be an issue because by the time you have used up the first batch of checks, and start using the checks with duplicate numbers, the first use of the early duplicate numbered checks will be sufficiently long ago that there should not be any chance of processing checks with duplicate numbers at the same time. You didn't mention how many checks you have with duplicate numbers, or how frequently you actually write checks so that may play a part in your decision. In my case, 100 checks will last me literally years, so it wouldn't be a problem for me.
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What's the average rate of return for some of the most mainstream index funds?
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This page from simplestockinvesting.com gives details of total returns for the S&P500 for each decade over the last 60 years, including total returns for the entire 60 year period. It is important to understand that, from an investors point of view, the total return includes both the change in index value (capital gain) plus dividends received. This total then needs to be adjusted for inflation to give the "total real return". As noted in the analysis provided, 44% of the total return from the S&P500 over the last 80 years comes from dividends. For the DowJones30, this site provides a calculator for total returns and inflation adjusted total returns for user selected periods. Finding comparable analysis for the NASDAQ market is more difficult. The NASDAQ market site provides gross values for total returns over fixed periods, but you will then need to do the arithmetic to calculate the equivalent average annual total returns. No inflation adjusted values for "real" returns are provided, so again you will need to combine inflation data from elsewhere and do the arithmetic.
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How can I tell what is “real” Motley Fool advice?
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The Fools have a range of advice from common-sense to speculative, aimed at different audiences (one hopes). As always, don't take anyone's word for it; think it through and decide whether the risk/reward ratio is really in your favor and how much you can afford to risk. They're good on the basics, but the more advanced they get, the more risk there is that they've got it wrong. That last is true of any advisor unless they have information that the rest of us don't. You can learn some things from their explanations of their reasoning without necessarily taking their conclusions as gospel.
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Starting a new job. Help me with retirement/debt planning please!
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I would go with your alternative idea: get rid of the debt as fast as possible. You have $32k of debt. It's a lot, but with your new $90k salary, do you think you could get rid of it all in 12 months? See if you can make that happen. Once the debt is gone, you'll be in a position to invest as much as you want and keep all your gains. You are worried about sacrificing future money in your investments, but if you eliminate the debt over the next year, this will be minimized. Just lose the debt.
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I am under 18 years old, in the US, my parents have terrible credit, how can I take out a loan?
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I am 17 and currently have a loan out for a car. My parents also have terrible credit, and because I knew this I was able to get around it. Your co-signer on your loan does not have to be your parent, at least in Wisconsin, I used my grandmother, who has excellent credit, as my cosigner. With my loan, we had made it so it doesn't hurt her credit if I don't get my payments in on time, maybe this is something for you to look into.
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What retirement plans/options should i pick for a relatively unstable career path?
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Your retirement plan shouldn't necessarily be dictated by your perceived employment risks. If you're feeling insecure about your short-term job longevity and mid-career prospects, you will likely benefit from a thoughtful and robust emergency fund plan. Your retirement plan is really designed to fund your life after work, so the usual advice to contribute as much as you can as early as you can applies either way. While a well-funded retirement portfolio will help you feel generally more secure in the long run (and worst case can be used earlier), a good emergency fund will do more to address your near-term concerns. Both retirement and emergency fund planning are fundamental to a comprehensive personal finance plan. This post on StackExchange has some basic info about your retirement options. Given your spare income, you should be able to fully fund an IRA and your 401K every year with some left over. Check the fees in your 401K to determine if you really want to fully fund the 401K past employer matching. There are several good answers and info about that here. Low-cost mutual funds are a good choice for starting your IRA. There is a lot of different advice about emergency funds (check here) ranging from x months salary in savings to detailed planning for each of your expenses. Regardless of which method you chose, it is important to think about your personal risk tolerance and create a plan that addresses your personal needs. It's difficult to live life and perform well at work if you're always worried about your situation. A good emergency plan should go a long way toward calming those fears. Your concern about reaching mid-life and becoming obsolete or unable to keep up in your career may be premature. Of course your mind, body, and your abilities will change over the years, but it is very difficult to predict where you will be, what you will be doing, and whether your experience will offset any potential decrease in your ability to keep up. It's good to think ahead and consider the "what-ifs", but keep in mind that those scenarios are not preordained. There isn't anything special about being 40 that will force you into a different line of work if you don't want to switch.
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How do i get into investing stocks [duplicate]
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Spend your first 50 euros on research materials. Warren Buffett got started as a boy by reading every book in the Library of Congress on investing and stock market analysis. You can research the company filings for Canadian companies at http://www.sedar.com, U.S companies at http://www.edgar.com, and European companies at https://www.gov.uk/government/organisations/companies-house. Find conflicting arguments and strategies and decide for yourself which ones are right. The Motley Fool http://www.fool.ca offers articles on good stocks to add to your portfolio and why, as well as why not. They provide a balanced judgement instead of just hype. They also sell advice through their newsletter. In Canada the Globe & Mail runs a daily column on screening stocks. Every day they present a different stock-picking strategy and the filters used to reach their end list. They then show how much that portfolio would have increased or decreased as well as talking about some of the good & bad points of the stocks in the list. It's interesting to see over time a very few stocks show up on multiple lists for different strategies. These ones in my opinion are the stocks to be investing in. While the Globe's stock picks focus on Canadian and US exchanges, you might find the strategies worthwhile. You can subscribe to the digital version at http://www.theglobeandmail.com Once you have your analytical tools ready, pick any bank or stock house that offers a free practice account. Use that account and their screening tools to try out your strategies and see if you can make money picking stocks. My personal stock-picking strategy is to look for companies with: - a long uninterrupted history of paying dividends, - that are regularly increased, - and do not exceed the net profit per share of the company - and whose share price has a long history of increasing These are called unicorn companies, because there are so very few of them. Another great read is, "Do Stocks Outperform Treasury Bills?" by Hendrik Bessembinder. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2900447 In this paper the author looks at the entire history of the U.S. stock universe and finds that less than 4% of stocks are responsible for 100% of the wealth creation in the U.S. stock market. He discusses his strategies for picking the winners, but it also suggests that if you don't want to do any research, you could pick pretty much any stock at random, short it, and wait. I avoid mutual funds because they are a winner only for the fellas selling them. A great description on why the mutual fund industry is skewed against the investor can be found in a book called "The RRSP Secret" by Greg Habstritt. "Unshakeable" by Tony Robbins also discusses why mutual funds are not the best way to invest in stocks. The investor puts up 100% of the money, takes 100% of the risk, and gets at best 30% of the return. Rich people don't invest like that.
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Should we park our money in our escrow account?
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The likely outcome of adding extra money to your escrow account is that the bank will send you a check for excess funds at the end of the year (or whenever your property tax and insurance payments are processed). Could you just redeposit that money immediately? Possibly. I bet most banks wouldn't care and would just follow the routine of clearing the excess from the account next time they process payments. I've never received a 1099 for interest in an escrow account. It is possible that when you start earning enough interest that a 1099 is required by law ($10/year) that the bank gets a little more aggressive about pushing your money back to you. I'm not sure why that hassle is any better than just opening up your average internet savings account (many don't have any of the fees you mentioned) and parking it there with a similar interest rate. You can deposit and withdraw using ACH transactions that post by the next business day. That said, unless they do start rejecting your money, there aren't a lot of downsides in your plan.
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Is it prudent to sell a stock on a 40% rise in 2 months
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Sell half. If it's as volatile as you say, sell it all and buy on another dip. No one can really offer targeted advice based on the amount of information you have provided.
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Estimated Taxes after surge in income
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You will not necessarily incur a penalty. You can potentially use the Annualized Income Installment method, which allows you to compute the tax due for each quarter based on income actually earned up to that point in the year. See Publication 505, in particular Worksheet 2-9. Form 2210 is also relevant as that is the form you will use when actually calculating whether you owe a penalty after the year is over. On my reading of Form 2210, if you had literally zero income during the first quarter, you won't be expected to make an estimated tax payment for that quarter (as long as you properly follow the Annualized Income Installment method for future quarters). However, you should go through the calculations yourself to see what the situation is with your actual numbers.
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Tracking down stocks I own
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There's two possibilities. One is that the broker declared your account abandoned and turned over your account to the state. If that happened, it should turn up here: http://missingmoney.com The second is that the broker is still holding your stock. I'd start by contacting the company's transfer agent.
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Can capital loss in traditional IRA and Roth IRA be used to offset taxable income?
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Edited in response to JoeTaxpayer's comment and OP Tim's additional question. To add to and clarify a little what littleadv has said, and to answer OP Tim's next question: As far as the IRS is concerned, you have at most one Individual Retirement Account of each type (Traditional, Roth) though the money in each IRA can be invested with as many different custodians (brokerages, banks, etc.) and different investments as you like. Thus, the maximum $5000 ($6000 for older folks) that you can contribute each year can be split up and invested any which way you like, and when in later years you take a Required Minimum Distribution (RMD) from a Traditional IRA, you can get the money by selling just one of the investments, or from several investments; all that the IRS cares is that the total amount that is distributed to you is at least as large as the RMD. An important corollary is that the balance in your IRA is the sum total of the value of all the investments that various custodians are holding for you in IRA accounts. There is no loss in an IRA until every penny has been withdrawn from every investment in your IRA and distributed to you, thus making your IRA balance zero. As long as you have a positive balance, there is no loss: everything has to come out. After the last distribution from your Roth IRA (the one that empties your entire Roth IRA, no matter where it is invested and reduces your Roth IRA balance (see definition above) to zero), total up all the amounts that you have received as distributions from your Roth IRA. If this is less than the total amount of money you contributed to your Roth IRA (this includes rollovers from a Traditional IRA or Roth 401k etc., but not the earnings within the Roth IRA that you re-invested inside the Roth IRA), you have a loss that can be deducted on Schedule A as a Miscellaneous Deduction subject to the 2% AGI limit. This 2% is not a cap (in the sense that no more than 2% of your AGI can be deducted in this category) but rather a threshold: you can only deduct whatever part of your total Miscellaneous Deductions exceeds 2% of your AGI. Not many people have Miscellaneous Deductions whose total exceeds 2% of their AGI, and so they end up not being able to deduct anything in this category. If you ever made nondeductible contributions to your Traditional IRA because you were ineligible to make a deductible contribution (income too high, pension plan coverage at work etc), then the sum of all these contributions is your basis in your Traditional IRA. Note that your deductible contributions, if any, are not part of the basis. The above rules apply to your basis in your Traditional IRA as well. After the last distribution from your Traditional IRA (the one that empties all your Traditional IRA accounts and reduces your Traditional IRA balance to zero), total up all the distributions that you received (don't forget to include the nontaxable part of each distribution that represents a return of the basis). If the sum total is less than your basis, you have a loss that can be deducted on Schedule A as a Miscellaneous Deduction subject to the 2% AGI threshold. You can only deposit cash into an IRA and take a distribution in cash from an IRA. Now, as JoeTaxpayer points out, if your IRA owns stock, you can take a distribution by having the shares transferred from your IRA account in your brokerage to your personal account in the brokerage. However, the amount of the distribution, as reported by the brokerage to the IRS, is the value of the shares transferred as of the time of the transfer, (more generally the fair market value of the property that is transferred out of the IRA) and this is the amount you report on your income tax return. Any capital gain or loss on those shares remains inside the IRA because your basis (in your personal account) in the shares that came out of the IRA is the amount of the distribution. If you sell these shares at a later date, you will have a (taxable) gain or loss depending on whether you sold the shares for more or less than your basis. In effect, the share transfer transaction is as if you sold the shares in the IRA, took the proceeds as a cash distribution and immediately bought the same shares in your personal account, but you saved the transaction fees for the sale and the purchase and avoided paying the difference between the buying and selling price of the shares as well as any changes in these in the microseconds that would have elapsed between the execution of the sell-shares-in-Tim's-IRA-account, distribute-cash-to-Tim, and buy-shares-in-Tim's-personal account transactions. Of course, your broker will likely charge a fee for transferring ownership of the shares from your IRA to you. But the important point is that any capital gain or loss within the IRA cannot be used to offset a gain or loss in your taxable accounts. What happens inside the IRA stays inside the IRA.
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Should I purchase a whole life insurance policy? (I am close to retirement)
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I'll start by saying that if this is being explored to scratch a specific itch you have then great, if this was a cold call it's probably safe to ignore it. Certain whole life products (they vary in quality by carrier) can make sense for very high earners who are looking for additional tax preferred places to store money. So after you IRA, 401(k), etc options are maxed out but you still have income you'd like to hide from taxes whole life can be a potential vehicle because gains and death benefit are generally exempt from income taxes. Be on the look out for loads charged to your money as it comes in to the policy. Life insurance in general is meant to keep your dependents going without having to sell off assets in the event of your death. People may plan for things like school tuition, mortgage/property tax for your spouse. If you own a business with a couple of partners it's somewhat common for the partners to buy policies on each other to buyout a spouse to avoid potential operating conflicts. Sometimes there can be estate planning issues, if you're looking to transfer assets when you ultimately pass it can make sense to form a trust and load cash in to a whole life policy because death benefits can be shielded from income tax and the estate tax calculation; the current estate tax exemption is about $5.5 million today (judging from your numbers you might actually be close to that including the net value of the homes). Obviously, though, the tax rules are subject to change and you need to be deliberate in your formation of the trust in order to effectively navigate estate tax issues. You seem to have a very solid financial position from this perspective it looks like your spouse would be in good shape. If you are specifically attempting to manage potential estate tax liability you should probably involve an financial planner with experience forming and managing trusts; and you should be very involved with the process because it will absolutely make your finances more complicated.
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Should I consider my investment in a total stock market fund “diverse”?
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Typically investing in only two securities is not a good idea when trying to spread risk. Even though you are in the VTI which is spread out over a large amount of securites it should in theory reduce portfolio beta to zero, or in this case as close to it as possible. The VTI however has a beta of 1.03 as of close today in New York. This means that the VTI moves roughly in exact tandem as "the market" usually benched against the S&P 500, so this means that the VTI is slightly more volatile than that index. In theory beta can be 0, this would be akin to investing in T-bills which are 'assumed' to be the risk free rate. So in theory it is possible to reduce the risk in your portfolio and apply a more capital protective model. I hope this helps you a bit.
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Is the Yale/Swenson Asset Allocation Too Conservative for a 20 Something?
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I think Swenson's insight was that the traditional recommendation of 60% stocks plus 40% bonds has two serious flaws: 1) You are exposed to way too much risk by having a portfolio that is so strongly tied to US equities (especially in the way it has historically been recommend). 2) You have too little reward by investing so much of your portfolio in bonds. If you can mix a decent number of asset classes that all have equity-like returns, and those asset classes have a low correlation with each other, then you can achieve equity-like returns without the equity-like risk. This improvement can be explicitly measured in the Sharpe ratio of you portfolio. (The Vanguard Risk Factor looks pretty squishy and lame to me.) The book the "The Ivy Portfolio" does a great job at covering the Swenson model and explains how to reasonably replicate it yourself using low fee ETFs.
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Has anyone compared an in-person Tax Advisor to software like Turbo Tax?
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Generally speaking no person or program is really going to be able to help you lower your current tax burden, most tax decisions are done well before you reach the tax time. You either qualify for the deduction/credit or your don't. Where a good accountant will really be able to help you out is in planning that will limit your future tax burden. Particularly if you run a small business or are very wealthy you will probably want to consider using an accountant. I would always avoid the large scale tax prep places like HR Block they provide the same or lower quality service for a higher price than the software. I run a small business and do my own taxes using turbo tax, but my business isn't overly complex Sole prop, no employees, couple 1099's simple expenses (nothing to amortize) etc.
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How and Should I Invest (As a college 18 year old with minimal living expenses)?
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While others have made a good case for how you may want to save and spend I just want to take a moment to comment on Acorn and Robinhood. Having never used either of them, I would stick to the seasoned professionals for my long term investment relationship. I'm sure they have the right licensing and proper SIPC coverage etc, but I wouldn't, personally, trust my money to an entity that's almost entirely funded by venture capital. I would stick to a company that exists and is profitable on it's own. All of the major brokerage houses (Vanguard, Schwab, ETrade, Scottrade, etc) in the US give account holders access to a list of ETFs and Mutual Funds with zero load on deposits, no or low minimum account balances, no or low investment minimums, and no commissions. With access to these no cost options, I wouldn't waste time with an entity that exists because of it's investor fund raising abilities.
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The U.S. National Debt: What is it, where did it come from, and how does it work?
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nan
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What emergencies could justify a highly liquid emergency fund?
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Visa card expired while on the other side of the world. Visa from other bank declined for suspected fraud. "You should have told us you were going to a country that has lots of fraud." Nearest ATM, twelve kilometers.
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Extended family investment or pay debt and save
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Here's a little different perspective. I'm not going to talk about the quality of the investment, the expected return, or any of the other things you normally talk about when evaluating investments. This is about family, and the most important thing here is the relationships. What you need to do here is look at the different possible scenarios and figure out how each of these would make you feel. Only you can evaluate this. For example, here are some questions to ask yourself: I know how I would answer these questions, but that wouldn't help you any. But the advice I would give you is, assuming you have this money to lose, and are also investing elsewhere, evaluate this solely on the basis of the effect on your family relationships. The only other piece of advice I would give you is to knock out that student loan and car loan debt as fast as you possibly can. Minimize your investments until that debt is gone, so you can get rid of it even faster.
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Why do gas stations charge different amounts in the same local area?
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When I ran a gas station, our price was largely set by our neighbors-- the other gas stations in the area. We couldn't go below the current cost of replacement gas, but other than that we wanted to be at .05 over the average. (We got away with charging more because we were the last station on a major road.) Everybody else did the same thing. Also, we only set prices once a day, early in the morning before the commuter rush. Changing prices while somebody is pumping gas Was Not Done, for fairly obvious reasons. So, you'd get these ripples of price-changing, as one station changed its price, and then all its neighbors would react to that the next day, and then THEIR neighbors would change the day after that, and so on.
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Why would anyone want to pay off their debts in a way other than “highest interest” first?
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I wouldn't advocate it, but one reason to pay a lower interest rate is if you have $990 on a $1000 limit credit card with 6% interest and $5000 on a $15k limit card at 10% interest. Having $500 to pay in a month and putting it on the lower interest would free up a greater percentage of credit on that card and could potentially help your credit rating I believe. I think having $1000 on 10 different credit cards w/ $15k limit reflects better than $10k on one $15k card, regardless of interest rates. Personally I think that's dumb b/c having the extra credit available is an opportunity to get into trouble a lot easier.
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Brent crude vs. USD market value
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I don't think the two are particularly linked. While Brick is right in that the price of oil is denominated in dollars, I don't think that's responsible for most of the movement here. Oil has been weak for intrinsic reasons related to oil: supply/demand imbalance, largely. (Oil also was way over-priced back when it was > $100 a barrel; a lot of that was due to worries about instability in the Middle East.) The dollar has been strong for other, separate intrinsic reasons. The American economy has had a stronger rebound than Europe or Asia; while we were hit hard in the 2008 recession, we rebounded pretty quickly from a whole-economy point of view (we still have a lot of weaknesses in terms of long-term unemployment, but that doesn't seem to be hurting our productivity much). Pick another time period, and you won't necessarily see the same matching path (and I would even say that those paths don't match particularly well). Marketwatch covered this for example; other sites show similar things. There is a weak correlation, but only in the short term, or for specific reasons.
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How to negotiate when you have something to give back?
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NEVER combine the negotiations for trade-in of an old car and purchase of a new one (and/or financing), if you can avoid doing so. Dealers are very good at trading off one against the other to increase their total profit, and it's harder for you to walk away when you have to discard the whole thing. These are separate transactions, each of which can be done with other parties. Treat them as such.
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Is it easier for brokers to find shares to short in premarket?
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The shares available to short are a portion of those shares held by the longs. This number is actually much easier to determine outside of active trading hours, but either way doesn't really impact the matter at hand since computers are pretty good at counting things. If your broker is putting up obstacles to your issuing sell short limit orders in the pre-market then there is likely some other reason (maybe they reserve that function to "premium" account holders?)
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Why is OkPay not allowed in the United States?
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Here's the real reason OKPay (actually the banks they interface with) won't accept US Citizens. The Foreign Account Tax Compliance Act Congress passed the Foreign Account Tax Compliance Act (FATCA) in 2010 without much fanfare. One reason the act was so quiet was its four-year long ramp up; FATCA did not really take effect until 2014. Never before had a single national government attempted, and so far succeeded in, forcing compliance standards on banks across the world. FATCA requires any non-U.S. bank to report accounts held by American citizens worth over $50,000 or else be subject to 30% withholding penalties and possible exclusion from U.S. markets. By mid-2015, more than 100,000 foreign entities had agreed to share financial information with the IRS. Even Russia and China agreed to FATCA. The only major global economy to fight the Feds is Canada; however it was private citizens, not the Canadian government, who filed suit to block FATCA under the International Governmental Agreement clause making it illegal to turn over private bank account information. Read more: The Tax Implications of Opening a Foreign Bank Account | Investopedia http://www.investopedia.com/articles/personal-finance/102915/tax-implications-opening-foreign-bank-account.asp#ixzz4TzEck9Yo Follow us: Investopedia on Facebook
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Are solar cell panels and wind mills worth the money?
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These are two rather distinct questions; only one of which is relevant to a Money web site. In general, the investment is questionable. Leaving aside the green feel-good factor, you need to look at a total cost of ownership (TCO) and payback on the asset. Neither is cheap as such. There are DIY windmill plans, but you likely still need a commercial battery charger/inverter/controller setup. Government incentives, depending on where you live, may change the story considerably. Many jurisdictions around the globe have both incentives to install and then power-feed-in tariffs if you sell back excess power. Your latitude also has an impact on your total available solar energy, along with regular weather patterns for both cloud cover and wind. One of the cheapest solar projects can be hot-water. Particularly if you have a pool, or even for domestic use, if you use a lot. All that said, given the green feel-good factor, if you want a small set of solar panels and have the space/budget, go ahead! You can add more later. For the second question: it is indeed possible to live off grid. Some remote houses do just this, and the methods to accomplish it vary. The number one thing you need to do is work on a power budget; and be both ruthless as well as realistic. Fridge, freezer, AC, furnace, plasma TV, etc. Depending on your climate and preferences, these may not all be possible for an off-grid lifestyle. (Of course, if you get a propane fridge and have a truck come by once a month, does that count as off-grid?)
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How to transfer money to yourself internationally?
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I use XE.com for almost the same purpose. They have free transfer options, such as ACH withdrawals and deposits. I normally do a online bill payment through my international bank to XE, and have them deposit it in the US via ACH. It takes 1-3 business days, and there's no fee beyond their small percentage (about 1.25%) on top of the exchange rate.
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Why do stock prices of retailers not surge during the holidays?
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That's a pretty good question for a six-year-old! In addition to the good answers which point out that expectations are priced in, let's deny the premises of the question: Sales do not increase the value of a company; a company could be, for example, losing money on every sale. Share prices are (at least in theory) correlated with profits. So let's suppose that company X is unprofitable 320 days a year and is relying upon sales in late November and December to be in the black for the year. (Hence "black Friday".) Carefully examine the supposition of this scenario: we have a company that is so unprofitable that it must gamble everything on successfully convincing bargain hunting consumers in a weak economy to buy stuff they don't actually need from them and not a competitor. Why would this inspire investor confidence? There are plenty of companies that fail to meet their sales targets at Christmas, for plenty of reasons.
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Why does selling and then rebuying stock not lead to free money?
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I think the simple answer to your question is: Yes, when you sell, that drives down the price. But it's not like you sell, and THEN the price goes down. The price goes down when you sell. You get the lower price. Others have discussed the mechanics of this, but I think the relevant point for your question is that when you offer shares for sale, buyers now have more choices of where to buy from. If without you, there were 10 people willing to sell for $100 and 10 people willing to buy for $100, then there will be 10 sales at $100. But if you now offer to sell, there are 11 people selling for $100 and 10 people buying for $100. The buyers have a choice, and for a seller to get them to pick him, he has to drop his price a little. In real life, the market is stable when one of those sellers drops his price enough that an 11th buyer decides that he now wants to buy at the lower price, or until one of the other 10 buyers decides that the price has gone too low and he's no longer interested in selling. If the next day you bought the stock back, you are now returning the market to where it was before you sold. Assuming that everything else in the market was unchanged, you would have to pay the same price to buy the stock back that you got when you sold it. Your net profit would be zero. Actually you'd have a loss because you'd have to pay the broker's commission on both transactions. Of course in real life the chances that everything else in the market is unchanged are very small. So if you're a typical small-fry kind of person like me, someone who might be buying and selling a few hundred or a few thousand dollars worth of a company that is worth hundreds of millions, other factors in the market will totally swamp the effect of your little transaction. So when you went to buy back the next day, you might find that the price had gone down, you can buy your shares back for less than you sold them, and pocket the difference. Or the price might have gone up and you take a loss.
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Any reason to keep IRAs separate?
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I don't know about keeping different rollover IRAs separate. But I know that there is a reason to keep rollover IRAs separate from other traditional IRAs -- if you want to roll them back into a 401(k) in the future, some 401(k)s only allow funds that were rolled over from a 401(k) originally.
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Do the proceeds from selling an option immediately convert to buying power in a margin account?
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Yes. I heard back from a couple brokerages that gave detailed responses. Specifically: In a Margin account, there are no SEC trade settlement rules, which means there is no risk of any free ride violations. The SEC has a FAQ page on free-riding, which states that it applies specifically to cash accounts. This led me to dig up the text on Regulation T which gives the "free-riding" rule in §220.8(c), which is titled "90 day freeze". §220.8 is the section on cash accounts. Nothing in the sections on margin accounts mentions such a settlement restriction. From the Wikipedia page on Free Riding, the margin agreement implicitly covers settlement. "Buying Power" doesn't seem to be a Regulation T thing, but it's something that the brokerages that I've seen use to state how much purchasing power a client has. Given the response from the brokerage, above, and my reading of Regulation T and the relevant Wikipedia page, proceeds from the sale of any security in a margin account are available immediately for reinvestment. Settlement is covered implicitly by margin; i.e. it doesn't detract from buying power. Additionally, I have personally been making these types of trades over the last year. In a sub-$25K margin account, proceeds are immediately available. The only thing I still have to look out for is running into the day-trading rules.
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Conservative ways to save for retirement?
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I'd say that because you are young, even the 'riskier' asset classes are not as risky as you think, for example, assuming conservatively that you only have 30 years to retirement, investing in stocks index might be a good option. In short term share prices are volatile and prone to bull and bear cycles but given enough time they have pretty much always outperformed any other asset classes. The key is not to be desperate to withdraw when an index is at the bottom. Some cycles can be 20 years, so when you need get nearer retirement you will need to diversify so that you can survive without selling low. Just make sure to pick an index tracker with low fees and you should be good to go. A word of warning is of course past performance is no indication of a future one, but if a diversified index tracker goes belly up for 20+ years, we are talking global calamity, in which case buy a shotgun and some canned food ;)
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When should I open a “Line of credit” at my bank?
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There are two basic types of lines of credit typically offered at a retail bank: Overdraft line of credit is essentially a revolving personal loan that you can draw upon as needed or automatically draw on when you overdraw on your checking account. Typically with a commercial bank there is a fee to use the automatic overdraft in addition to interest. Some credit unions don't charge a fee. Interest is typically computed using average daily balance. A Home equity line of credit is a revolving loan that is secured against your home. Interest on home-improvement related expenses is deductible. Since the bank gets a lien on your home, the rates are low. Sometimes you can even get debit cards that will hit the line. I think these are a good idea if:
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What investments are positively related to the housing market decline?
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During the actual decline, there's very little money to be made and a lot to lose. When housing prices tank, everybody loses; the banks are exposed to higher risk of mortgage defaults, insurers start having to pay out more for "gas leaks" claiming over-leveraged homes, realtors starve because their commissions go down (even as foreclosures put more homes on the market) and people faced with financial uncertainty will stay put in their current homes instead of moving elsewhere. And homebuilders and contractors go broke because nobody wants to spend cash on a new home or major reno that looks like a losing investment. There can be some bright spots. Smaller hardware stores will make money as people do relatively small DIY projects to improve the condition of their current home. The larger stores get this business too, but it tends to be more than offset by the loss of contractor business (FAR more lucrative, and something the ACEs and True-Values don't really get in on). Of course the "grave-robbers" do well; gold buyers, auctioneers, pawn shops, repo firms; these guys eat well when other people are defaulting on loans or have to sell their stuff for fast cash. Most of these businesses are not publicly traded. One thing that was seen was increased revenues at discount retailers like Wal-Mart, Dollar General etc. When things are bad, people in the middle class who had avoided these stores for image or morality reasons learn to swallow their pride and buy discount store brands for half the price of national brand names. That lessens the blow felt by the discount retailers as overall consumer spending decreases; the pie shrinks, but the discount retailers get a bigger slice of the mandatory spending on food, clothing, etc (and the higher-level retailers get it in the shorts). When the pie starts to grow again as consumer spending picks back up, the discount retailers retain their percentage for a while, as the fickle middle class can afford to buy more from the discount retailer but can't yet afford to take their business back to the shopping mall stores. This produces a flatter, "offset" price graph for discount retailers through the business cycle; they don't lose as early or as much as everyone else in a major downturn, and they turn it around sooner while everyone else may still be on the way down, but as everything gets better for everyone on the upswing it's less great for the discount guys, as they start losing customers and their dollars to competitors with better stuff, even as the ones they keep spend more. This doesn't generally manifest as a true negative correlation, but it can be a good hedge. The number one money-making investment in a tanking economy is gold. When things go down the crapper, everyone wants gold, so if you see the train wreck coming far enough in advance, you can make a big move to gold and really make some money off that investment. For instance, when the first whispers about ARM adjustments and mass defaults reached the public consciousness in mid-2005, gold bullion jumped from about $400 to over $700 in a nine-month period. It cooled off again in 06-07 but only to about $600/oz, and then in late 07 it steadily climbed to peak at $1000/oz; even if you got in late, an investment of $1000 in July '07 in "bulk" gold would have netted you $650 in one year; that's a 65% APY. Then the economy hit bottom and a lot of investors ditched gold for investments they thought would pull back out of their holes quickly; For just a little while in '08 gold was down to $700 again. Then came all the government reports; unemployment not budging, home prices still declining, a lot of banks still hiding just how bad their position was. If you had seen that it was going to be bad, bad, bad, like a lot of now-billionaire hedge fund investors did, a $1000 investment in gold in July 05, and then cashing out at the tops of the peaks and buying back in at the major troughs, would be worth almost $4000 today. That's a 400% return over 7 years, or an annual average yield of 57%. There simply hasn't been anything like that in the last 7 years.
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What option-related strategies are better suited to increasing return potential?
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I think you need to be very careful here. Covered calls don't reduce risk or increase performance overall. If they did, every investment manager would be using them. In a typical portfolio, over the long term, the gains you give up when your stock goes beyond the strike of your calls will negate the premiums you receive over time. Psychologically, covered calls are appealing because your gains happen over a long period and this is why many people suggest it. But if you believe the Black-Scholes model (used for pricing options) this is what the model predicts over the long term - that you won't do any better than just holding stock (unless you have some edge other traders don't). Now you say you want to reduce diversification and raise your risk. Keeping in mind that there is no free lunch, there are several ways to reduce your risk but they all come at a price. For simplicity, there are three elements to consider - risk, potential gain and cash. These are tradeoffs and you can't simultaneously make them all favorable. You must trade one or more of them to gain in the others. Let's say you wanted to concentrate into a few stocks... how could you counteract the additional risk? 1) Covered calls: very popular strategy usually intended (erroneously) for increasing returns. You get the bonus of cash along with marginally less risk. But you give up a substantial amount of potential return. You won't have blowout returns if you do this. You still face substantial risk. 2) Collar your stock: You sell a covered call while using the cash from the sale to buy puts for protection. You give up potential gains, you're neutral on cash but gain significantly on reducing risk. 3) Use calls as proxy for stock: You don't hold stock but only calls in equivalent delta to the stock you would have held. Substantially lower risk while still having potential gain. Your tradeoff is the cash you have to pay for the calls. When using this, one must be very, very careful not to overleverage. 4) Puts as protection for stocks: This is basically the same as #3 in tradeoffs. You won't overleverage and you also get dividends. But for the most part it's the same. These are the main ways to reduce the risk you gain by concentrating. Options themselves are far broader. But keep in mind that there is no free money. All these techniques involve tradeoffs that you have to be aware of.
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Why does capital gains tax apply to long term stock holdings?
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In Australia we have a 50% capital gain discount if you hold the asset for more than 12 months, whether it is in shares, property or other assets. The main reason is to encourage people to invest long-term instead of speculating or trading. The government sees speculation or short term trading as more risky than long term investing for the everyday mum and dad investor, so rewards people it sees taking the lower risk long term view. In my opinion, long term investing, short term trading and speculation can all be risky for someone who is unedutated in the financial markets, and the first rule of investing should be to consider the asset itself and not the tax implications.
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Do you avoid tax when taking a home equity loan?
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You'll be taxed when you sell the house, but not before that (or if you do some other transaction that realizes the gain, talk to your real estate attorney or accountant for more details). A Home Equity line-of-credit is simply a secured loan: it's a loan, conditioned on if you fail to pay it back, they have a lien on your house (and may be able to force you to sell it to pay the loan back).
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Is stock in a company considered a good or a service, or something else?
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Stock is ownership. And whether the thing you own is a good or service irrelevant. The ownership itself is all that matters. Ownership = service ??? Ownership = good ??? Maybe the problem is your trying to fit a verb into a noun-based categories?
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Can I prove having savings without giving out the account number?
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Have you been rejected from a rental for a specific reason (leading to this question)? Landlords are in the business of exchanging space for regular payments with no drama. Anything they ask in an application should be something to minimize the risk of drama. The "happy path" optimistic goal is that you pay your rent by the due date every month. If your income is not sufficient for this, demonstrating you have assets and would be able to pay for the full term of the lease is part of the decision to enter into the lease with you. In the non-happy-path, say you fall off the face of the earth before ending the lease. The landlord could be owed several months of rent, and could pursue a legal judgment on your assets. With a court order, they can make the bank pay out what is owed; having bank information reduces the landlord's cost and research efforts in the event the story has degenerated to this point (in the jargon of landlording, this means the tenant is "collectable"). While of course you could have zeroed out your accounts or moved money to a bank you didn't tell the landlord in the meantime, if you are not the bad actor in this story, you probably wouldn't have. If you get any kind of "spidey-sense" about a landlord or property at all there is probably a better rental situation in your city. You also want to minimize drama. If the landlord is operating like a business, they're not in this to perform identity theft. If the landlord is sloppy, or has sloppy office workers, that would be different. In the event sharing your asset information truly bothers you, and the money is for rental expense anyway, you could offer to negotiate a 1 year prepaid rental (of course knock another 5%-10% off for time value of money and lower risk to landlord) if you're sure you wouldn't want to leave early.
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Are my parents ripping me off with this deal that doesn't allow me to build my equity in my home?
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Ripped off may be too strong as it implies intent - I'm hopeful it's just bad logic or terminology. I would say better agreements would be: Borrowing money from family/friends is always risky. If you and your parents are comfortable with the situation and can reliably keep records of how much is owed at any given time (and how much of the $500/mo is interest) then the loan might be a good option. If not, and your parents don't need the income stream from the loan, then I would recommend the second option since it's much cleaner. In any case, make sure everything is in writing and the proper legal procedures are followed (just as if you had borrowed the money from a bank). That means either filing a mortgage with the county for option 1 or having both parties on the deed, and having the ownership percentages in writing.
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Do I make money in the stock market from other people losing money?
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Because I feel the answers given do not wholely represent the answer you are expecting, I'd like to re-iterate but include more information. When you own stock in a company, you OWN some of that company. When that company makes profit, you usually receive a dividend of those profits. If you owned 1% of the company stock, you (should) recieve 1% of the profits. If your company is doing well, someone might ask to buy your stock. The price of that stock is (supposed) to be worth a value representative of the expected yield or how much of a dividend you'd be getting. The "worth" of that, is what you're betting on when you buy the stock, if you buy $100 worth of coca cola stock and they paid $10 as dividend, you'd be pretty happy with a 10% growth in your wealth. Especially if the banks are only playing 3%. So maybe some other guy sees your 10% increase and thinks, heck.. 10% is better than 3%, if I buy your stocks, even as much as 6% more than they are worth ($106) I'm still going to be better off by that extra 1% than I would be if I left it in the bank.. so he offers you $106.. and you think.. awesome.. I can sell my $100 of cola shares now, make a $6 profit and buy $100 worth of some other share I think will pay a good dividend. Then cola publicises their profits, and they only made 2% profit, that guy that bought your shares for $106, only got a dividend of $2 (since their 'worth' is still $100, and effectively he lost $4 as a result. He bet on a better than 10% profit, and lost out when it didn't hit that. Now, (IMHO) while the stock market was supposed to be about buying shares, and getting dividends, people (brokers) discovered that you could make far more money buying and selling shares for 'perceived value' rather than waiting for dividends to show actual value, especially if you were not the one doing the buying and selling (and risk), but instead making a 0.4% cut off the difference between each purchase (broker fees). So, TL;DR, Many people have lost money in the market to those who made money from them. But only the traders and gamblers.
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Can stock market gains be better protected under an LLC arrangement?
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The thing you get wrong is that you think the LLC doesn't pay taxes on gains when it sells assets. It does. In fact, in many countries LLC are considered separate entities for tax properties and you have double taxation - the LLC pays its own taxes, and then when you withdraw the money from the LLC to your own account (i.e.: take dividends) - you pay income tax on the withdrawal again. Corporate entities usually do not have preferential tax treatment for investments. In the US, LLC is a pass-though entity (unless explicitly chosen to be taxed as a corporation, and then the above scenario happens). Pass-through entities (LLCs and partnerships) don't pay taxes, but instead report the gains to the owners, which then pay taxes as if the transaction was their personal one. So if you're in the US - investing under LLC would have no effect whatsoever on your taxes, or adverse effect if you chose to treat it as a corporation. In any case, investing in stocks is not a deductible expense, and as such doesn't reduce profits.
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If I get cash compensation for my stocks (following a merger for example) does that qualify for capital gains tax?
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In the US this is considered a sale, and the proceeds will be taxed as if you've sold the stocks in any other way. The decision about the treatment (capital, ordinary, etc) is dependent on what kind of stock that is, how you acquired it, how long have you held it, etc. If it is a regular stock that you bought as an investment and held it for more than a year - then it will likely to be a capital gain treatment. However, this is only relevant for the US taxation. Since you're a UK person, you should also check how it is handled in the UK, which may or may not be different.
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What's the difference between Term and Whole Life insurance?
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Whole life is life insurance that lasts your whole life. Seriously. Since the insurance company must make a profit, and since they know they will always pay out on a whole life policy, whole life tends to be very expensive, and has lower "death" benefits than a term policy. Some of these policies are "paid-up" policies, meaning that they are structured so that you don't have to pay premiums forever. But what it amounts to is that the insurance company invests your premiums, and then pays you a smaller "dividend," much like banks do with savings accounts. Unless you are especially risk-averse, it is almost always a better decision to get an inexpensive term policy, and invest the money you save yourself, rather than letting the insurance company invest it for you and reap most of the benefits. If you are doing things properly, you won't need life insurance your whole life, as retirement investments will eventually replace your working income.
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Does FIFO cost basis applies across multiple accounts?
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You decide on a cost bases attribution yourself, per transaction (except for averaging for mutual funds, which if I remember correctly applies to all the positions). It is not a decision your broker makes. Broker only needs to know what you've decided to report it to the IRS on 1099, but if the broker reported wrong basis (because you didn't update your account settings properly, or for whatever else reason) you can always correct it on form 8949 (columns f/g).
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How to prevent misusing my Account details
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This is more legal and less personal finance question. You should immediately lodge a police complaint mentioning that some persons are using your PAN card details for activities not authorized by you. In the meantime also engage the services of a CA and reply back to income tax authorities. Do not ignore the notice.
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Static and Dynamic, Major/Minor Support and Resistance in Stock Trading/Investing
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Simply static support or resistance levels are ones that do not change with time. Two examples include horizontal lines and trend lines. Dynamic support or resistance levels are ones that change with time. A common example of a dynamic support/resistance are Moving Averages.
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Can I use FOREX markets to exchange cash?
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Because the standard contract is for 125,000 euros. http://www.cmegroup.com/trading/fx/g10/euro-fx_contractSpecs_futures.html You don't want to use Microsoft as an analogy. You want to use non financial commodities. Most are settled in cash, no delivery. But in the early 80's, the Hunt brothers caused a spectacular short squeeze by taking delivery sending the spot price to $50. And some businesses naturally do this, buying metal, grain, etc. no reason you can't actually get the current price of $US/Euro if you need that much.
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Ideal investments for a recent college grad with very high risk tolerance?
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If you have been putting savings away for the longer term and have some extra funds which you would like to take some extra risk on - then I say work yourself out a strategy/plan, get yourself educated and go for it. If it is individual shares you are interested then work out if you prefer to use fundamental analysis, technical analysis or some of both. You can use fundamental analysis to help determine which shares to buy, and then use technical analysis to help determine when to get into and out of a position. You say you are prepared to lose $10,000 in order to try to get higher returns. I don't know what percentage this $10,000 is of the capital you intend to use in this kind of investments/trading, but lets assume it is 10% - so your total starting capital would be $100,000. The idea now would be to learn about money management, position sizing and risk management. There are plenty of good books on these subjects. If you set a maximum loss for each position you open of 1% of your capital - i.e $1,000, then you would have to get 10 straight losses in a row to get to your 10% total loss. You do this by setting stop losses on your positions. I'll use an example to explain: Say you are looking at a stock priced at $20 and you get a signal to buy it at that price. You now need to determine a stop price which if the stock goes down to, you can say well I may have been wrong on this occasion, the stock price has gone against me so I need to get out now (I put automatic stop loss conditional orders with my broker). You may determine the stop price based on previous support levels, using a percentage of your buy price or another indicator or method. I tend to use the percentage of buy price - lets say you use 10% - so your stop price would be at $18 (10% below your buy price of $20). So now you can work out your position size (the number of shares to buy). Your maximum loss on the position is $2 per share or 10% of your position in this stock, but it should also be only 1% of your total capital - being 1% of $100,000 = $1,000. You simply divide $1,000 by $2 to get 500 shares to buy. You then do this with the rest of your positions - with a $100,000 starting capital using a 1% maximum loss per position and a stop loss of 10% you will end up with a maximum of 10 positions. If you use a larger maximum loss per position your position sizes would increase and you would have less positions to open (I would not go higher than 2% maximum loss per position). If you use a larger stop loss percentage then your position sizes would decrease and you would have more positions to open. The larger the stop loss the longer you will potentially be in a position and the smaller the stop loss generally the less time you will be in a position. Also as your total capital increases so will your 1% of total capital, just as it would decrease if your total capital decreases. Using this method you can aim for higher risk/ higher return investments and reduce and manage your risk to a desired level. One other thing to consider, don't let tax determine when you sell an investment. If you are keeping a stock just so you will pay less tax if kept for over 12 months - then you are in real danger of increasing your risk considerably. I would rather pay 50% tax on a 30% return than 25% tax on a 15% return.
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Why can't you just have someone invest for you and split the profits (and losses) with him?
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Written with some mild snark , but no insult intended, because financial stuff can be ridiculously confusing... Looked at another way, you're basically asking if the Biblical "Parable of the Talents" can be implemented as a business model. You as the investor wish to be the "master", with the entity doing the investing playing the part of the "servant". Since the law prohibits actual servitude as described in scripture, the model must substitute a contractual profit- and loss-sharing scheme. OK, based on what you've proposed, and by way of example, let's say you invested a thousand dollars. You give the investment service your money. At the end of a year, they give you back - Your capital ($1000) - Plus 1/2 of any profits OR - Less 1/2 of any losses So let's say the worst happens and they lose ALL of it. According to your proposal, they have to cover 1/2 of the loss. You end up with $500...but they end up with LESS than nothing. They will be in a deficit situation because all the expense was theirs. They don't just fail to make a profit. They go in the hole. It doesn't matter what percentages you use. Regardless of how the loss is shared, you've only guaranteed YOU can't lose all your money. The company CAN. Given a large enough investment, or enough market fluctuation, a big shared loss could shut down a smaller firm. To summarize: - You want a service that charges you nothing - Does all the work of expertly managing and investing your capital - Takes on part of the risk you would normally bear - (on top of their usual risk and liability) - Agrees to do so solely for a percentage of any return (where higher returns will likely involve a higher degree of risk) - AND that guarantees, after just 1 year, you'll get X% of your capital back, no matter what. Win or lose. - Even if the market crashes and all your capital, and theirs, is wiped out Superbest, um, to be serious briefly: what you're proposing is, if nothing else, inherently unfair and inequitable. I believe you intended it as a mutually beneficial scenario, but the real-world imbalance in risk and reward prevents it being so. Any financial service that would accept those terms along with the extra degree of risk would be fiscally irresponsible. From a business standpoint it's an untenable model, and no company would build on it. It would be tantamount to corporate suicide. The requirement that a service promise to give you back X% of your money, no matter how great the loss, makes your proposal impossible. You need to think about how much all this costs, realistically, as well what kind of returns you can actually expect. And that more risk for higher return is exactly what a service could NOT take a chance on if it had to "share" investors' losses. Besides, it's not really sharing, now is it? They will always lose more than you, always end up in a negative situation, unable even to recoup costs. Circumstances beyond their control could result in a drop in the value that not only wipes out any profit, but requires them to pay YOU for work performed and expenses incurred on your behalf. Why would they let anyon double-dip like that? Yeah, we all prefer getting something for nothing...but you want valuable services and for them to pay you money for the privilege of providing them? I totally agree that would be fantastic, but in this world even "free" doesn't come cheap anymore. And getting back to costs: Without consistent income the service would have nowhere to work and no resources to work with. No office, computer, phone, electricity, Internet, insurance, payroll, licensing, training, maintenance, security, lobbying, etc., etc., etc. Why do people always forget overhead? There's a reason these services operate the way they do. Even the best are working with fairly slim margins in a volatile sector. They're not into 1-year gambles unlikely to cover their cost of doing business, or having to pay for a negative return out of their own pocket. Look, if you're the Biblical master asking your servant to manage things, overhead is built-in. You're taking all the risk as well. You're paying for all three servants' food, home, clothing, etc, plus you had to buy the servants themselves. So its reasonable that you reap the reward of their labor. You paid for it, and you didn't even punish the servant who buried your money in a hole. The two good servants may have done the legwork, but you took on the burden of everything else. In your proposed service, however, contrary to the servant's usual role, the servant - i.e., the company - would be assuming a portion of your risk on top of their own, yet without any guarantee of profit, income, or even coverage of costs. They're also subject to regulations, fees, liability, legal stuff, etc. that you're not, against most of which you are indemnified and held harmless. If they agree to cover a share of your loss, it exposes to greater liability and more related risk. It robs them of resources they need to invest in their own business, while at the same time forcing them to do all the work. As a result, your model doesn't give such a service a fighting chance. Getting it off the ground and lasting past the first-year payouts would require more luck than skill. They'd be better off heading to Vegas and the blackjack table, where the only overhead is a cheap flight and room, where the odds and rules don't change overnight, and they at least get free drinks. If none of the equivalents satisfies, then the Biblical parable appears to describe your only option for obtaining exactly what you want: Move to a country where slavery is legal and buy an investor :-) Cheers, c
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Why invest for the long-term rather than buy and sell for quick, big gains?
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The price of a shares reflects the expected future returns of that company. If it does not someone will notice and buy until it does. Look at this chart http://www.finanzen.net/chart/Arcandor (click on max), that's a former DAX company, so one of the largest german companys. Now it's bankrupt. Why do you think you are the only one who is going to notice? There are millions of people and even more computers, some a going to be smarter than you. Of course that does not happen to everyone but who knows. Is Volkswagen going to survive the current crisis? Probably. Is it coming back to former glory in the next half year? Who knows? Here comes the obvious solution: Don't buy single stocks, spread it out over many companies, some will shine, some will plument and you get the average. Oh that's an index, how convinent. Now if there were a way to save on all these transaction costs you're incurring...
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Did basically all mutual funds have a significant crash in 2008?
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The literal answer to your question is that a number of different types of mutual funds did not have significant downturns in 2008. Money Market Funds are intended to always preserve capital. VMMXX made 2.77% in 2008. It was a major scandal broke the buck, that its holders took a 3% loss. Inverse funds, which go up when the market goes down, obviously did well that year (RYARX), but if you have a low risk tolerance, that's obviously not what you're looking for. (and they have other problems as well when held long-term) But you're a 24-year-old talking about your retirement funds, you should have a much longer time horizon, at least 30 years. Over a period that long, stocks have never had negative real (inflation-adjusted) returns, dating back at least to the civil war. If you look at the charts here or here, you can see that despite the risk in any individual year, as the period grows longer, the average return for the period gets tighter and tighter. If you look at the second graph here, you see that 2011 was the first time since the civil war that the trailing 30-year return on t-bills exceeded that for stocks, and 1981-2011 was period that saw bond yields drop almost continuously, leading to steady rise in bond prices. Although past performance is no guarantee of future results, everything we've seen historically suggests that the risk of a broad stock-market portfolio held for 30 years is not that large, and it should make up the bulk of your holdings. For example, Vanguard's Target retirement 2055 fund is 90% in stocks (US + international), and only 10% in bonds.
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Pay off credit card debt or earn employer 401(k) match?
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Agree with Randy, if debt and debt reduction was all about math, nobody would be in debt. It is an emotional game. If you've taken care of the reasons you're in debt, changed your behaviors, then start focusing on the math of getting it done faster. Otherwise, if you don't have a handle on the behaviors that got you there, you're just going to get more rope to hang yourself with. I.e., makes sense to take a low-interest home equity loan to pay off high-interest credit card debt, but more likely than not, you'll just re-rack up the debt on the cards because you never fixed the behavior that put you into debt. Same thing here, if you opt not to contribute to "pay off the cards" without fixing the debt-accumulating behaviors, what you're going to do is stay in debt AND not provide for retirement. Take the match until you're certain you have your debt accumulation habits in check.
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How can I diversify $7k across ETFs and stocks?
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You don't really have a lot of money, and that isn't a criticism as much as that you are limited to diversification. For example, I would estimate you can only have one or two stocks for a buy-write scheme. Secondly you may be only to buy one fund with a high minimum investment, and a second fund with a smaller minimum investment. Thirdly there is not a whole lot of money to make a large difference. One options might be to look at iShares since your are with Fidelity. Trading those are commission free and the minimum investment is one share. They offer many sector funds. Since you were in a CD ladder you might be looking for stability of principle. If so you can look at USMV and PFF. If you can tolerate a little more volatility DGRO. Having said that you seem interested in doing some buy-writes. Why not mix and match? Pick a stock, like INTC (for example not a recommendation), and buy-write with half the money and some combination of iShares for the rest.
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Dealing with event driven market volatility
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If you are worried about elections think about writing some calls against your long positions to help hedge. If you have MSFT (@ $51.38 right now) you could write a MSFT Call for lets say $55. You can bank $170 per 100 shares (let's say you write it at 1.70) (MSFT 01/20/2017 55.00 C 1.73 +0.01 Bid: 1.69 Ask: 1.77) If MSFT goes down a lot you will have lost $170 less per 100 shares than you would have because you wrote an option for $170. You will in fact be break even if the stock falls to 49.68 on the Jan Strike Date. If MSFT goes up $3.50 you will have made $170 and still have your MSFT stock for a net gain of $520. $170 in cash for the premium and your stock is now worth $350 more. If MSFT goes up $3.62 or more you will have made the max $530ish and have no MSFT left potentially losing additional profit if the stock goes up like gang busters. So is it worth it for you to get $170 in cash now and risk the stock going up more than $5 between now and Jan. That is the decision to make here.
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Got charged ridiculous amount for doctor's walk in visit. What are my options?
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To answer the specific question of whether you can get the bill reduced without hurting your credit, yes, as long as the bill never goes to collections, there's no reason it should ever show up on your credit report. Will they reduce your bill without sending it to collections first? Maybe. All you can do is ask.
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Why would a bank take a lower all cash offer versus a higher offer via conventional lending?
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One other point to consider is that cash offers often include no contingencies. That is, the offer comes in and if the seller signs then the deal is done, without any chance that the buyer backs out. As you can imagine, this is an attractive option in some situations.
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Convention for adding ishares (ETFs) into personal accounts
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What account you put it in depends on why you have those different accounts. First, if you have them due to regulatory requirements, then you of course must follow said regulations. I doubt that's the case here. Otherwise, you might be splitting based on how they trade (ETFs trade as stocks) or you could be splitting based on how you build a portfolio out of them. When you build a non-speculative stock portfolio, you typically want to limit your holdings in a single stock to a fairly small portion of your portfolio (say, 3%) to limit your exposure to bad stuff happening to a single company. That doesn't apply nearly a much to mutual funds, especially index funds. ETFs are much more like mutual funds here. You can also, of course, create an ETF account and put them there. You also say you have a market index account, what is that used for?
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Sales Tax: Rounded Then Totaled or Totaled Then Rounded?
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Tax is often calculated per item. Especially in the days of the internet, some items are taxable and some aren't, depending on the item and your nexus. I would recommend calculating and storing tax with each item, to account for these subtle differences. EDIT: Not sure why this was downvoted, if you don't believe me, you can always check with Amazon: http://www.amazon.com/gp/help/customer/display.html/ref=hp_468512_calculated?nodeId=468512#calculated I think they know what they're talking about. FINAL UPDATE: Now, if someone goes to your site, and buys something from your business (in California) and the shipping address for the product is Nevada, then taxes do not have to be collected. If they have a billing address in California, and a shipping address in Nevada, and the goods are shipping to Nevada, you do not have to declare tax. If you have a mixture of tangible (computer, mouse, keyboard) and intangible assets (warranty) in a cart, and the shipping address is in California, you charge tax on the tangible assets, but NOT on the intangible assets. Yes, you can charge tax on the whole order. Yes for most businesses that's "Good enough", but I'm not trying to provide the "good enough" solution, I'm simply telling you how very large businesses run and operate. As I've mentioned, I've done several tax integrations using software called Sabrix (Google if you've not heard of it), and have done those integrations for companies like the BBC and Corbis (owned and operated by Bill Gates). Take it or leave it, but the correct way to charge taxes, especially given the complex tax laws of the US and internationally, is to charge per item. If you just need the "good enough" approach, feel free to calculate it by total. Some additional reading: http://en.wikipedia.org/wiki/Taxation_of_Digital_Goods Another possible federal limitation on Internet taxation is the United States Supreme Court case, Quill Corp. v. North Dakota, 504 U.S. 298 (1992),[6] which held that under the dormant commerce clause, goods purchased through mail order cannot be subject to a state’s sales tax unless the vendor has a substantial nexus with the state levying the tax. In 1997, the federal government decided to limit taxation of Internet activity for a period of time. The Internet Tax Freedom Act (ITFA) prohibits taxes on Internet access, which is defined as a service that allows users access to content, information, email or other services offered over the Internet and may include access to proprietary content, information, and other services as part of a package offered to customers. The Act has exceptions for taxes levied before the statute was written and for sales taxes on online purchases of physical goods.
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Should I use a TSP loan?
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I don't have experience with TSP in particular, but they look to be roughly the same as 401(k) loans. If the "G Fund rate" is equal to the yield of government bonds, then your main risk is the risk that yields increase, which means the interest you're paying is less than what you would have earned on the investments. Here are some other things to consider: For any car loan, I would borrow as little as possible with as short a term as possible. To me, the interest savings and additional risks from borrowing from your retirement isn't worth it.
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Is it a good idea to rebalance without withdrawing money?
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Rebalancing has been studied empirically quite a bit, but not particularly carefully and actually turns out to be very hard to study well. The main problem is that you don't know until afterward if your target weights were optimal so a bad rebalancing program might give better performance if it strayed closer to optimal weights even if it didn't do an efficient job of keeping near the target weights. In your particular case either method might be preferred depending on a number of things: You can see why there isn't a generally correct answer to your question and the results of empirical studies might very wildly depending on the mix of assets and risk tolerance. Still if your portfolio is not too complicated you can estimate the costs of the two methods without too much trouble and figure out if it is worthwhile to you. EDIT In Response to Comment Below: Your example gets at what makes rebalancing so hard empirically but also generally pretty easy in practice. If you were to target 75% Equity (25% bonds?) and look at returns only for 30 years the "best" rebalancing method would be to never rebalance and just let 75% equity go to near 100% as equity has better long term returns. This happens when you look only at returns as the final number and don't take into account the change in risk in your portfolio. In practice, most people that are still adding (or subtracting in retirement) to a retirement portfolio are adding (removing) a significant amount compared to the total amount in their portfolio. In the case you discribe, it is cheaper (massively cheaper in the presence of load fees) just to use new capital to trade toward your target, keeping your risk profile. New money should be large enough to keep you near enough your target. If you just estimate the trading costs/fees in both cases I think you'll see just how large the difference is between the two methods this will dwarf any small differences in return over the long run even if you can't trade back all the way to your target.
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When filing a US 1065 as a General Partnership, do we combine our expenditures for a home office?
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Your home doesn't belong to the partnership, it belongs to you. So you can (if qualified) deduct home office usage as a business expense on your individual tax return. Same goes to your partner. Similarly any other unreimbursed expense.
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How could USA defaulting on its public debt influence the stock/bond market?
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The default scenario that we're talking about in the Summer of 2011 is a discretionary situation where the government refuses to borrow money over a certain level and thus becomes insolvent. That's an important distinction, because the US has the best credit in the world and still carries enormous borrowing power -- so much so that the massive increases in borrowing over the last decade of war and malaise have not affected the nation's ability to borrow additional money. From a personal finance point of view, my guess is that after the "drop dead date" disclosed by the Treasury, you'd have a period of chaos and increasing liquidity issues after government runs out of gimmicks like "borrowing" from various internal accounts and "selling" assets to government authorities. I don't think the markets believe that the Democrats and Republicans are really willing to destroy the country. If they are, the market doesn't like surprises.
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How to find out if I have a savings account already?
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If you know what bank your parents used, call them and ask. (Or you might have to go there and show id). Chances are if such an account exists, it would be at the same bank. You can also search for unclaimed property. Here's the information link for Florida.
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Shares; are they really only for the rich/investors?
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I think small sums invested regularly over long-term can do good for you, things to consider: I would go with an index fund and contribute there there regularly.
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How to determine contractor hourly rate and employee salary equivalents?
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Here are a few points to consider: Taxes: As a consultant, you will be responsible for the employer portion of the Social Security and Medicare taxes, and you might have to pay for state unemployment insurance and state disability insurance, as well. Office expenses: As a consultant, you may be required to buy your own laptop, pay for your own software licenses and buy other office-related supplies. For higher-end services, you may be setting up a complete office and even hire your own secretary and other support staff. Benefits: As a consultant, you will be responsible for your own health insurance, retirement plan and other benefits that an employer would ordinarily provide. Education: Your employer will likely pay for books and magazine subscriptions and send you to seminars, in order to keep your skills current; your client won't. Liability: Consultants face certain liabilities that employees don't, and have to factor the cost of insuring against those risks into their rate. Let's say you're a software developer, and your faulty code causes a nuclear plant's reactor core to overheat and melt down. As an employee, you'll get fired. As a consultant, you will get sued. Even consultants in low-risk fields can easily shell out thousands of dollars per year for a basic general liability policy. Sales & marketing: Don't forget that when your contract ends, you will have expenses associated with finding your next client, including the opportunity cost of not getting paid for your services during that time. All these factors contribute to your overhead, which you have to roll into your consulting rate. You should also add a margin of profit -- after all, as you're in business for yourself, you should be compensated for taking this entrepreneurial risk. If you're looking for a quick over-the-thumb rule, you can figure that your equivalent consulting rate should be about twice what you would be paid hourly as an employee. Assuming you work 2,000 hours a year, if you would receive a $100,000 salary, your hourly rate should be $100. Of course, this is only a very rough guideline. Ultimately, your rate will mostly be influenced by how established you are and how much your services are in demand.
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Can I Accept Gold?
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You can accept almost anything mutually agreeable to you and the other party as payment. That's the definition of "barter". If you agree to trade manufactured goods for livestock, as long as both parties agree on the terms, I'm not aware of any law that would prohibit it. I hedged with "almost" because of course you can't accept something that is explicitly illegal. Like you can't say you'll accept cocaine as payment. Less obviously, there are laws regulating the sale of guns, nuclear fuel, agricultural products, etc. You'd still have to pay taxes, and it can get complicated to determine the taxable value of the transaction. Sorry, but you can't avoid taxes by getting your income in something other than cash.
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Why invest in becoming a landlord?
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with 150K € to invest to "become a landlord" you have several options: Pay for 100% of one property, and you then will make a significant percentage of the monthly rent as profit each month. That profit can be used to invest in other things, or to save to buy additional properties. At the end of the 21 years in your example, you can sell the flat for return of principal minus selling expenses, or even better make a profit because the property went up in value. Pay 20% down on 5 flats, and then make a much a smaller profit per flat each month due to the mortgage payment for each one. At the end of the 21 years sell the flats. Assuming that a significant portion of the mortgage is paid off each flat will sell for more than the mortgage balance. Thus you will have 5 nice large profits when you sell. something in between 1 and 5 flats. Each has different risks and expenses. With 5 rental properties you are more likely to use a management company, which will add to your monthly cost.
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Buy securities at another stock exchange
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In a simple statement, no doesn't matter. Checked on my trade portal, everything lines up. Same ISIN, same price(after factoring in FX conversions, if you were thinking about arbitrage those days are long gone). But a unusual phenomenon I have observed is, if you aren't allowed to buy/sell a stock in one market and try to do that in a different market for the same stock you will still not be allowed to do it. Tried it on French stocks as my current provider doesn't allow me to deal in French stocks.
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How to incentivize a real-estate broker to find me a cheap house
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From your profile, I see you are in Israel. The process is probably different from in the US. In the US, an agent is usually happy to work with a buyer. After all, When I list a house, there are potential buyers all over my state and elsewhere. The best thing you can do is first, have your financing in order. A bank will be able to tell you how much you can afford and how much they'll lend you. If you approach an agent and tell them the exact range of price, area you're interested in, and other specifics such as number of bedrooms, etc, that agent should be happy to find houses to fit your request. Obviously, an agent listing million dollar homes, busy with those all day, is not going to want to handle a buyer looking for a $200K home. But in the end, the real estate agents aren't all listing high end, and someone is moving the smaller houses as well. Often, an office will have a call center where agents who are less busy will answer the phone hoping to get a client that will bring a sale. That's one way to go. The other is word of mouth. Just ask others who you work with or socialize with if they know a good agent. In my case, I'd be happy to get such a referral.
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What should I do with $4,000 cash and High Interest Debt?
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If we're including psychological considerations, then the question becomes much more complicated: will having a higher available credit increase the temptation to spend? Will eliminating 100% of a small debt provide more positive reinforcement than paying off 15% of a larger debt? Etc. If we're looking at the pure financial impact, the question is simpler. The only advantage I see to prioritizing the lower interest card is the float: when you buy something on a credit card, interest is often calculated for that purchase starting at the beginning of the next billing cycle, rather than immediately from the purchase date. I'm not clear on what policies credit card companies have on giving float for credit cards with a carried balance, so you should look into what your card's policy is. Other than than, paying off the higher interest rate card is better than paying off the lower interest rate. On top of that, you should look into whether you qualify for any of the following options (presented from best to worst):
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What are some good books for learning stocks, bonds, derivatives e.t.c for beginner with a math background?
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Start with Options, Futures and Other Derivatives by John Hull.
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When to hire an investment professional?
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Lifecycle funds might be a suitable fit for you. Lifecycle funds (aka "target date funds") are a mutual fund that invests your money in other mutual funds based on how much time is left until you need the money-- they follow a "glide-path" of reducing stock holdings in favor of bonds over time to reduce volatility of your final return as you near retirement. The ones I've looked at don't charge a fee of their own for this, but they do direct your portfolio to actively managed funds. That said, the ones I've seen have an "acquired" expense ratio of less than what you're proposing you'd pay a professional. FWIW, my current plan is to invest in a binary portfolio of cheap mutual funds that track S&P500 and AGG and rebalance regularly. This is easy enough that I don't see the point of adding in a 1 percent commission.
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Variations of Dual momentum
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There's a few layers to the Momentum Theory discussed in that book. But speaking in general terms I can answer the following: Kind of. Assuming you understand that historically the Nasdaq has seen a little more volatility than the S&P. And, more importantly, that it tends to track the tech sector more than the general economy. Thus the pitfall is that it is heavily weighted towards (and often tracks) the performance of a few stocks including: Apple, Google (Alphabet), Microsoft, Amazon, Intel and Amgen. It could be argued this is counter intuitive to the general strategy you are trying to employ. This could be tougher to justify. The reason it is potentially not a great idea has less to do with the fact that gold has factors other than just risk on/off and inflation that affect its price (even though it does!); but more to do with the fact that it is harder to own gold and move in and out of positions efficiently than it is a bond index fund. For example, consider buying physical gold. To do so you have to spend some time evaluating the purchase, you are usually paying a slight premium above the spot price to purchase it, and you should usually also have some form of security or insurance for it. So, it has additional costs. Possibly worth it as part of a long-term investment strategy; if you believe gold will appreciate over a decade. But not so much if you are holding it for as little as a few weeks and constantly moving in and out of the position over the year. The same is true to some extent of investing in gold in the form of an ETF. At least a portion of "their gold" comes from paper or futures contracts which must be rolled every month. This creates a slight inefficiency. While possibly not a deal breaker, it would not be as attractive to someone trading on momentum versus fundamentals in my opinion. In the end though, I think all strategies are adaptable. And if you feel gold will be the big mover this year, and want to use it as your risk hedge, who am I or anyone else to tell you that you shouldn't.
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Is buying a lottery ticket considered an investment?
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Although this has been touched upon in comments, I think the following line from the currently accepted answer shows the biggest issue: There is a clear difference between investing and gambling. The reality is that the difference isn't that clear at all. Tens of comments have been written arguing in both directions and looking around the internet entire essays have been written arguing both positions. The underlying emotion that seems to shape this discussion primarily is whether investing (especially in the stock market) is a form of gambling. People who do invest in this way tend to get relatively emotional whenever someone argues that this is a form of gambling, as gambling is considered a negative thing. The simple reality of human communication is that words can be ambiguous, and the way investors will use the words 'investments' and 'gambles' will differ from the way it is used by gamblers, and once again different from the way it's commonly used. What I definitely think is made clear by all the different discussions however is that there is no single distinctive trait that allows us to differentiate investing and gambling. The result of this is that when you take dictionary definitions for both terms you will likely end up including lottery tickets as a valid form of investment. That still however leaves us with a situation where we have two terms - with a strong overlap - which have a distinctive meaning in communication and the original question whether buying lottery tickets is an investment. Over on investorguide.com there is an absolutely amazing strongly recommended essay which explores countless of different traits in search of a difference between investing and gambling, and they came up with the following two definitions: Investing: "Any activity in which money is put at risk for the purpose of making a profit, and which is characterized by some or most of the following (in approximately descending order of importance): sufficient research has been conducted; the odds are favorable; the behavior is risk-averse; a systematic approach is being taken; emotions such as greed and fear play no role; the activity is ongoing and done as part of a long-term plan; the activity is not motivated solely by entertainment or compulsion; ownership of something tangible is involved; a net positive economic effect results." Gambling: "Any activity in which money is put at risk for the purpose of making a profit, and which is characterized by some or most of the following (in approximately descending order of importance): little or no research has been conducted; the odds are unfavorable; the behavior is risk-seeking; an unsystematic approach is being taken; emotions such as greed and fear play a role; the activity is a discrete event or series of discrete events not done as part of a long-term plan; the activity is significantly motivated by entertainment or compulsion; ownership of something tangible is not involved; no net economic effect results." The very interesting thing about those definitions is that they capture very well the way those terms are used by most people, and they even acknowledge that a lot of 'investors' are gambling, and that a few gamblers are 'investing' (read the essay for more on that). And this fits well with the way those two concepts are understood by the public. So in those definitions normally buying a lottery ticket would indeed not be an investment, but if we take for example Vadim's operation example If you have $1000 and need $2000 by next week or else you can't have an operation and you will die (and you can't find anyone to give you a loan). Your optimal strategy is to gamble your $1000, at the best odds you can get, with a possible outcome of $2000. So even if you only have a 1/3 chance of winning and getting that operation, it's still the right bet if you can't find a better one. this can suddenly change the perception and turn 'gambling' into 'high-risk investing'.
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Teaching school kids about money - what are the real life examples of math, budgeting, finance?
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My education on this topic at this age range was a little more free-form. We were given a weeklong project in the 6th grade, which I remember pretty clearly: Fast forward 6 years (we were 12). You are about to be kicked out of your parents' house with the clothes on your back, $1,000 cash in your pocket, your high school diploma, and a "best of luck" from your parents. That's it. Your mission is to not be homeless, starving and still wearing only the clothes on your back in 3 months. To do this, you will find an apartment, a job (you must meet the qualifications fresh out of high school with only your diploma; no college, no experience), and a means of transportation. Then, you'll build a budget that includes your rent, estimated utilities, gasoline (calculated based on today's prices, best-guess fuel mileage of the car, and 250% of the best-guess one-way distance between home and job), food (complete nutrition is not a must, but 2000cal/day is), toiletries, clothing, and anything else you want or need to spend your paycheck or nest egg on. Remember that the laundromat isn't free, and neither is buying the washer/dryer yourself. Remember most apartments aren't furnished but do have kitchen appliances, and you can't say you found anything on the side of the road. The end product of your work will be a narrative report of the first month of your new life, a budget for the full 3 months, plus a "continuing" budget for a typical month thereafter to prove you're not just lasting out the 3 months, and all supporting evidence for your numbers, from newspaper clippings to in-store mailers (the Internet and e-commerce were just catching on at the time, Craigslist and eBay didn't exist yet, and not everyone had home Internet to begin with). Extra Credit: Make your budget work with all applicable income and sales taxes. Extra Extra Credit: Have more than your original $1000 in the bank at the end of the 3 months, after the taxes in the Extra Credit. This is a pretty serious project for a 12-year-old. Not only were we looking through the classified ads and deciphering all the common abbreviations, we were were taking trips to the grocery store with shopping lists, the local Wal-Mart or Target, the mall, even Goodwill. Some students had photos of their local gas station's prices, to which someone pointed out that their new apartment would be on the other side of town where gas was more expensive (smart kid). Some students just couldn't make it work (usually the mistakes were to be expected of middle-class middle-schoolers, like finding a job babysitting and stretching that out full-time, only working one job, buying everything new from clothes to furniture, thinking you absolutely need convenience items you can do without, and/or trying to buy the same upscale car your dad takes to work), though most students were able to provide at least a plausible before-tax budget. A few made the extra credit work, which was a lot of extra credit, because not only were you filling out a 1040EZ for your estimated income taxes, you were also figuring FICA and Social Security taxes which even some adults don't know the rates for, and remember, no Internet. Given that the extra-extra credit required you to come out ahead after taxes (good luck), I can't remember that anyone got that far. The meta-lesson that we all learned? Life without a college education is rough.
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Taxes due for hobbyist Group Buy
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From the poster's description of this activity, it doesn't look like he is engaged in a business, so Schedule C would not be appropriate. The first paragraph of the IRS Instructions for Schedule C is as follows: Use Schedule C (Form 1040) to report income or loss from a business you operated or a profession you practiced as a sole proprietor. An activity qualifies as a business if your primary purpose for engaging in the activity is for income or profit and you are involved in the activity with continuity and regularity. For example, a sporadic activity or a hobby does not qualify as a business. To report income from a nonbusiness activity, see the instructions for Form 1040, line 21, or Form 1040NR, line 21. What the poster is doing is acting as a nominee or agent for his members. For instance, if I give you $3.00 and ask you to go into Starbucks and buy me a pumpkin-spice latte, you do not have income or receipts of $3.00, and you are not engaged in a business. The amounts that the poster's members are forwarding him are like this. Money that the poster receives for his trouble should be reported as nonbusiness income on Line 21 of Form 1040, in accordance with the instructions quoted above and the instructions for Form 1040. Finally, it should be noted that the poster cannot take deductions or losses relating to this activity. So he can't deduct any expenses of organizing the group buy on his tax return. Of course, this would not be the case if the group buy really is the poster's business and not just a "hobby." Of course, it goes without saying that the poster should document all of this activity with receipts, contemporaneous emails (and if available, contracts) - as well as anything else that could possibly be relevant to proving the nature of this activity in the event of an audit.
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From Facebook's perspective, was the fall in price after IPO actually an indication that it went well?
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There could be an impact on Facebook because just before the IPO, Morgan Stanley apparently sent information to selected clients that their analysts had just lowered their valuation of the company. There were also reports yesterday that the lowered valuation came about because Facebook sent some revised preliminary estimates of second quarter earnings (showing lower than expected earnings) to Morgan Stanley, and least one talking head said that Facebook might also face charges depending on what the cover letters and the e-mails back and forth between Facebook and Morgan Stanley said. Investigations have already been opened. Yes, a company wants to sell the stock being offered at the IPO at the highest price possible, but if it misled the public when offering the stock for sale (through its underwriters), it can also be liable, possibly even criminally liable. Material added in Edit: In fact, a lawsuit has already been filed in the US District Court in Manhattan in this matter. Whether the SEC ever does anything about the matter remains to be seen.
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Why is Google's current nasdaq market cap almost twice the current share price * the No. of shares outstanding?
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http://mobile.nytimes.com/blogs/economix/2014/04/02/the-many-classes-of-google-stock/ Are you counting both class A and other share classes?
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Meaning of capital market
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Just to clarify, In wikipedia when it says It is defined as a market in which money is provided for periods longer than a year They are referring to the company which is asking for money. So for example the stock market provides money to the issuing company of an IPO, indefinitely. Meaning the company that just went public is provided with money for a period longer than a year. The definition in Investopedia basically says the same thing Wikipedia does it is just phrased slightly different and leaves out the "for periods longer than a year". For example Wikipedia uses the term "business enterprises" and "governments" while Investopedia uses the term private sector and public sector, in this context "business enterprise" is "private sector" and "governments" is "public sector" So in the sense of the length debt is issued yes, money market would be the opposite of a capital market but both markets still offer a place for governments and companies to raise money and both are classified as financial markets.
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Oversimplify it for me: the correct order of investing
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Great questions -- the fact that you're thinking about it is what's most important. I think a priority should be maximizing any employer match in your 401(k) because it's free money. Second would be paying off high interest debt because it's a big expense. Everything else is a matter of setting good financial habits so I think the order of importance will vary from person to person. (That's why I ordered the priorities the way I did: employer matching is the easiest way to get more income with no additional work, and paying down high-interest debt is the best way to lower your long-term expenses.) After that, continue to maximize your income and savings, and be frugal with your expenses. Avoid debt. Take a vacation once in a while, too!
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