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How to do thorough research into a company to better understand whether to buy stock?
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So, first -- good job on making a thorough checklist of things to look into. And onto your questions -- is this a worthwhile process? Even independent of specific investing goals, learning how to research is valuable. If you decided to forgo investing in stocks directly, and chose to only invest in index funds, the same type of research skills would be useful. (Not to mention that such discipline would come in handy in other fields as well.) What other 80/20 'low hanging fruit' knowledge have I missed? While it may not count as 'low hanging fruit', one thing that stands out to me is there's no mention of what competition a company has in its field. For example, a company may be doing well today, but you may see signs that it's consistently losing ground to its competition. While that alone may not dissuade you from investing, it may give you something to consider. Is what I've got so far any good? or am I totally missing the point. Your cheat sheet seems pretty good to me. But a lot depends on what your goals are. If you're doing this solely for your education and experience, I would say you've done well. If you're looking to invest in a company that is involved in a field you're passionate about, you're on the right track. But you should probably consider expanding your cheat sheet to include things that are not 'low hanging fruit' but still matter to you. However, I'd echo the comments that have already been made and suggest that if this is for retirement investments, take the skills you've developed in creating your cheat sheet and apply that work towards finding a set of index funds that meet your criteria. Otherwise happy hunting!
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Ballpark salary equivalent today of “healthcare benefits” in the US?
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For the person being hired this is a tricky situation. Specially with the new laws. There is no real magic number that can be applied as a lot will depend on what benefits you want, and what is actually available. This will really shift the spectrum quite a bit. Under the affordibal care act, everyone has to have insurance or pay a ?fine? (were really not sure what to call this yet) but there are two provisions that really mess with the numbers you look at as an employee. First, the cost of heath care has skyrocketed. So the same benefits that you had 5 years ago now cost maybe 10-15 times as much as they used to. This gets swept under the rug a bit because the "main costs" of insurance has only increased a tiny amount. What this actually comes down to is does your new ACA approved heath plan cover exactly the benefits you need, or does it cut corners. Sorry this is complicated, and I don't mean it to come off as a speech against the ACA so I will give an example. My wife has RA, she really has it under control with the help of her RA doctor. This is not something she ever wants to change. Because she has had RA from the age of 15, and because it's degenerative, she doesn't want to spend 5 years working with a new doctor to get to the same place she is with her current doctor. In addition, the main drugs she takes for RA are not covered under any ACA plan, nor are the "substitutions" that her doctor makes (we are trying to have kids so she has to be off the main meds, and a couple of the things this doctor has tried has been meds that reduce inflammation, are pregnancy safe, but are not for the treatment of RA) You now have to take into effect rather the cost of health insurance + the cost of the things now not covered by the heath insurance + the out of pocket expenses is worth the insurance. Second the ACA has set up provisions to straight up trick those people that have lower income and are not paying close attention. When shopping for insurance, they get quotes like "$50 a month" or "$100 a month". The truth is that the remainder of the actual cost is deducted from their tax returns. This takes consideration, because if you thing your paying $50 a month for insurance but your really paying $650 then you need to make sure your doing your math right. Finally, you need to understand how messed up things are right now in the US with heath care. Largely this goes unreported. I'm not really sure why. But in order to do this I will have to give examples. For my wife to see a specialist (her RA doctor) the co-pay is $75. So she goes to the doctor, he charges her $75 and bills the insurance $200. The insurance pays the doctor $50. With out insurance, the visit costs $50. At first you want to blame the doctor for cheating the system, but the doctor has to pay for hours of labor to get the $50 back from the insurance company. From the doctors perspective it's cheaper to take the $50 then it is to charge the insurance company. And by charging the insurance company he has no control over the cost of the co pay. He essentially has to charge more to make the same money and the patient gets the shaft in the process. Another example, I got strep throat last year. I went to the walk in clinic, paid $75, saw the doctor got my Z-Pack for $15, went home crawled in bed and got better. My wife (who still had separate insurance from before the marriage) got strep throat (imagen that) went to the same clinic, they charged her $200 for the visit ($50 co-pay) and $250 for the z-pack ($3 co-pay). The insurance paid the clinic $90 for the visit and $3 for the drugs. Again the patient is left out in this scenario. In this case it worked better for my wife, unless you account for the fact that to get that coverage she had to pay $650/month. My point is that when comparing costs of heathcare with insurance, and without out insurance, its often times much cheaper for the practices to have you self pay then it is for them to go through the loops of trying to insurance to make them whole. This creates two rates. Self pay rates and Insured rates. When your trying to figure out the cost of not having insurance then you need to use the self pay rates. These can be vastly different. So as an employee you need to figure out your cost of heath care with insurance, and your cost of heath care without insurance. Then user those numbers when your trying to negotiate a salary. The problem is that there is no magic number to use for this because the cost will very a lot. For us, it was cheaper to not have insurance. Even with a pre-existing condition that takes constant attention, it's just better if we set aside $500 a month then it is to try to pay $750 a month. That might not hold true for everyone. For some people or conditions it may be better to pay the $750 then to try to handle it themselves. So for my negotiations I would go with x+$6,000 without insurance or x+$4,500 with insurance. Now as an employer it's a lot simpler. Usually you have a "group plan" that offers you a pretty straight $x per year per person or $y per year per family. So you can offer exactly that. Salary - $x or Salary - $y. AS a starting point. However this is where negotiations start. If your offering me $50,500 and insurance, I would rather just have $57,000 and no insurance. Of course your real cost is only $55,000 cause you don't care about my heath care costs only about insurance costs. So you try to negotiate down towards $55,000 and no insurance. But that's not good enough for me. So I either go else where and you loose talent, or I accept $50,500 and insurance (or somewhere in between).
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Is this trick enough to totally prevent bankrupcy in a case of a crash?
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Your strategy fails to control risk. Your "inversed crash" is called a rally. And These kind of things often turn into bigger rallies because of short squeezes, when all the people that are shorting a stock are forced to close their stock because of margin calls - its not that shorts "scramble" to close their position, the broker AUTOMATICALLY closes your short positions with market orders and you are stuck with the loss. So no, your "trick" is not enough. There are better ways to profit from a bearish outlook.
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Advice on preserving wealth in a volatile economic/political country
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You might find some of the answers here helpful; the question is different, but has some similar concerns, such as a changing economic environment. What approach should I take to best protect my wealth against currency devaluation & poor growth prospects. I want to avoid selling off any more of my local index funds in a panic as I want to hold long term. Does my portfolio balance make sense? Good question; I can't even get US banks to answer questions like this, such as "What happens if they try to nationalize all bank accounts like in the Soviet Union?" Response: it'll never happen. The question was what if! I think that your portfolio carries a lot of risk, but also offsets what you're worried about. Outside of government confiscation of foreign accounts (if your foreign investments are held through a local brokerage), you should be good. What to do about government confiscation? Even the US government (in 1933) confiscated physical gold (and they made it illegal to own) - so even physical resources can be confiscated during hard times. Quite a large portion of my foreign investments have been bought at an expensive time when our currency is already around historic lows, which does concern me in the event that it strengthens in future. What strategy should I take in the future if/when my local currency starts the strengthen...do I hold my foreign investments through it and just trust in cost averaging long term, or try sell them off to avoid the devaluation? Are these foreign investments a hedge? If so, then you shouldn't worry if your currency does strengthen; they serve the purpose of hedging the local environment. If these investments are not a hedge, then timing will matter and you'll want to sell and buy your currency before it does strengthen. The risk on this latter point is that your timing will be wrong.
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Does FHA goes hand in hand with PMI ?
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FHA insured loans must 'go hand in hand' with PMI, because the FHA element is the insurance itself. The FHA isn't actually giving you a loan, that's coming from a lender; instead, the FHA is insuring the loan, at some cost to you - but allowing a loan to folks who may not be able to afford it normally (lower down payment requirements and a somewhat cheaper PMI). FHA-insured loans may be lower rates in some cases than non-FHA insured loans because of this backing; that's because they make it easier for people of poorer credit histories with smaller down payments to get a house in the first place. Those people would tend to have a harder time getting a loan, and be charged sometimes usurious rates to get it. Low down payment and mediocre credit history (think 580-620) mean higher risk, even beyond the risk directly coming from the poor loan to value ratio. Comparing this table of Freddie Mac rates to this table of FHA-backed loan rates, the loan rates seem comparable (though somewhat lagging in changes in some cases). FHA loans are not nearly the size or complexity of loan population as Freddie Mac, so be wary of making direct comparisons. Looking into this in more detail, pre-collapse (before 12/07), FHA rates were a bit lower - average rate was about .5 points lower - but starting with 12/07, FHA average rates were usually higher than Freddie Mac rates for 30 year fixed loans: in 1/2009 for example they were almost a point higher. As of the last data I see (5/13) the rates were within 0.1 points most months. This may be in part because Freddie Mac had looser requirements to get a loan pre-collapse, then tightened significantly, then started to loosen some (also around June 2013, rates climbed significantly due to some signals from the Fed, although they're almost back to their lows thanks to the Fed again). These are averages across all loans, so you get some noise as a result. Loan interest rates are very personal, in general: they depend on your credit, your house and down payment, and your bank (which varies by your location). The best thing to do is to shop around yourself and just see what you get, and ask your lender any questions you have: if you pick a local lender with a good service history and who is willing to talk to you in person (ie, has a direct phone number), you'll have no trouble getting answers.
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Does my net paycheck decrease as the year goes on due to tax brackets filling up?
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Most countries with income tax, including the USA, design their withholding system so that in straightforward cases, tax is withheld from each month's paycheck on an annualized basis: tax for a month is calculated on the assumption that you will keep earning the same monthly amount for the rest of the year, and the withholding is set so that the tax is spread evenly across the year. Another way of putting that is that in practice you only get the tax brackets allocated proportionately throughout the year - so up till the end of August you'll only have been assigned 8/12 of the $37450 bracket, and so on. So if your income doesn't change and your general tax affairs don't change, your paycheck also shouldn't change. If your income is irregular or changes during the year then things can get more complicated. As other answers have noted, withholdings are calculated according to tables that normally just take into account that specific month's income. There are various possible changes to your tax affairs that might cause the withholdings to change. For example there'd be an impact from any change in your contributions to tax advantaged things like health insurance or retirement, health or education savings. You might also use form W-4 to change your withholdings yourself. Note that even with a regular income that doesn't change through the year, you might find yourself either owing money or being owed a refund when you file your taxes after the end of the year. It's worth making sure that your W-4 accurately records the allowances you are entitled to, to minimize or eliminate this adjustment.
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Why do banks finance shared construction as mortgages instead of financing it directly and selling the apartments in a building?
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Grade 'Eh' Bacon answers it well, the issue is risk. To explain further, when a bank issues a loan, that loan comes with certain legal rights. If the bank decided to partner with a construction company, many of those rights to collect would be gone. Debt is treated differently than equity in the legal system. Banks are good at debt, investors are good at equity. We also oversimplify it by asking why banks don't prefer equity to debt. Some investment banks also like to deal in equity, so it's probably an inaccurate assumption that you start with.
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Is it accurate to say that if I was to trade something, my probability of success can't be worse than random?
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The previous answers make valid points regarding the risks, and why you can't reasonably compare trading for profit/loss to a roll of the die. This answer looks at the math instead. Your assumption: I have an equal probability to make a profit or a loss. Is incorrect, for the reasons stated in other answers. However, the answer to your question: Can I also assume that probabilistically speaking, a trader cannot do worst than random? Is "yes". But only because the question is flawed. Consequently it's throwing people in all directions with their answers. But quite simply, in a truly random environment the worst case scenario, no matter how improbable, is that you lose over and over again until you have nothing left. This can happen in sequential rolls of the dice AND in trading securities/bonds/whatever. You could guess wrong for every roll of the die AND all of your stock picks could become worthless. Both outcomes result in $0 (assuming you do not gamble with credit). Tell me, which $0 is "worse"? Given the infinite number of plays that "random" implies, the chance of losing your entire bankroll exists in both scenarios, and that is enough by itself to make neither option "worse" than the other. Of course, the opposite is also true. You could only pick winners, with an unlimited upside potential, but again that could happen with either dice rolls or stock picks. It's just highly improbable. my chances cannot be worse than random and if my trading system has an edge that is greater than the percentage of the transaction that is transaction cost, then I am probabilistically likely to make a profit? Nope. This is where it all falls apart. Just because your chances of losing it all are similarly improbable, does not make you more likely to win with one method or the other. Regression to the mean, when given infinite, truly random outcomes, makes it impossible to "have an edge". Also, "probabilistically" isn't a word, but "probably" is.
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Blog income taxes?
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If thinking about it like a business you normally only pay taxes on Net income, not gross. So Gross being all the money that comes in. People giving you cash, checks, whatever get deposited into your account. You then pay that out to other people for services, advertisement. At the end of the day what is left would be your 'profit' and you would be expected to pay income tax on that. If you are just an individual and don't have an LLC set up or any business structure you would usually just have an extra page to fill out on your taxes with this info. I think it's a schedule C but not 100%
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Is 0% credit card utilization worse than 1-20% credit card utilization for any reason other than pure statistics?
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Credit Scores / Rates are based on sometimes simple and sometimes quite complex Statistical Models (Generalised Linear Models, Neural Networks, Regression and Classification Trees, Mixture Models, etc).This depends on whether it is something more general like FICO or what large banks develop in-house. In any case, there are many legislation-dependent factors (Qualitative such as education, occupation security, sex, etc, payment history; or Quantitative such as age, liquidity and leverage ratios, etc). Now, most model that are used today are propriety and closely held trade secrets. The most important reason for this is actually because of the databases that feed the models. More better quality data is what makes the real difference ... although at the cutting-edge, the mathematicians/statisticians/computer scientists that design the algorithms will make a huge difference. Now, back to the main thing: The Credit Score/Rate is meant to be used only as an indicator for representing the Probability of Default ("How likely you are to default on your obligation towards me?" is what it means and that is largely based upon "Has company/he/she honoured his financial obligations?") of a certain consumer. In more sophisticated models, they may also use your industry sector or occupational and financial security to predict the future behaviour. However, this "Credit Score" has meaning only in relation to a "Credit Limit" ("Can you pay back my $X?"). The credit limit on the other hand is defined by your income level, debt/asset, etc). As a credit risk analyst, whether we are dealing with large corporate loans, mortgages, personal loans, etc), the principles are the same: One thing to consider is that factors considered in determining a credit score usually do not have a simple linear relationship. Consumer Profile types such as utilisation rate are a lot more about EFFECT than CAUSE: The most important thing is to honour your obligations, whether you pay before or after you spend makes little difference, so long as you pay in full and prior to maturity, your rate/score will improve with time. Financial Institutions have many ways to make money of everyone. Some, such as interest rates and fees are directly charged to you and some are charged to your goods-and-services providers. That has no bearing on your score. Sometimes it even makes sense to take on customers with rock-bottom ratings, lend them lots of money, and charge them to dirt. As you may well know, the recent financial crisis - with ongoing after-shocks and tremors - was the result of such practices.
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Do I need a business credit card?
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I would suggest at least getting a personal card that you only use for business expenses, even if you don't opt for a business card. It makes it very clear that expenses on that card are business expenses, and is just more professional. The same goes for a checking account, if you have one of those. It makes it easier to defend if you are ever audited, and if you use an accountant or tax preparer.
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Why would I pick a specific ETF over an equivalent Mutual Fund?
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There are times when investing in an ETF is more convenient than a mutual fund. When you invest in a mutual fund, you often have an account directly with the mutual fund company, or you have an account with a mutual fund broker. Mutual funds often have either a front end or back end load, which essentially gives you a penalty for jumping in and out of funds. ETFs are traded exactly like stocks, so there is inherently no load when buying or selling. If you have a brokerage account and you want to move funds from a stock to a mutual fund, an ETF might be more convenient. With some accounts, an ETF allows you to invest in a fund that you would not be able to invest in otherwise. For example, you might have a 401k account through your employer. You might want to invest in a Vanguard mutual fund, but Vanguard funds are not available with your 401k. If you have access to a brokerage account inside your 401k, you can invest in the Vanguard fund through the associated ETF. Another reason that you might choose an ETF over a mutual fund is if you want to try to short the fund.
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One of my stocks dropped 40% in 2 days, how should I mentally approach this?
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Have the reasons you originally purchased the stock changed? Is the company still sound? Does the company have a new competitor? Has the company changed the way they operate? If the company is the same, except for stock price, why would you change your mind on the company now? ESPECIALLY if the company has not changed, -- but only other people's PERCEPTION of the company, then your original reasons for buying it are still valid. In fact, if you are not a day-trader, then this COMPANY JUST WENT ON SALE and you should buy more. If you are a day trader, then you do care about the herd's perception of value (not true value) and you should sell. DAY TRADER = SELL BUY AND HOLD (WITH INTELLIGENT RESEARCH) = BUY MORE
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Paying tax for freelance work while travelling
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Having freelanced myself in South America I could give you a sound advice BUT you would first need to answer some questions. 1) How long do you plan on being in South America? At the end of 2017 will you be back in Ireland or still being in South America? In other words was is your country of residence for tax purposes on Dec. 31 2017 ? That is the key element to consider. Link 2) In latin America you can freelance with a legal working permit BUT in all these countries more than 50% of the economy is under the table. In all these countries expatriate work under the table. The question you need to answer is then: Who will be your employer, a company or the owner of this company? Working undeclared in Latin America is very common, what are the risks? The legal risks depend on the country and their laws. In which country will you travel? How long will you stay there? You will have a tourist visa or a working visa? 3) An important detail, your health. Check how long you can be out of Ireland without loosing your social health benefits in Ireland? In my country, if I am abroad for more than 180 days, I loose my national health coverage. Evaluate the amount of days you will be out of Ireland and where you want to be on Dec. 31th. That could change a lot of things in your life.
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What's the difference between Buy and Sell price on the stock exchange [duplicate]
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To add to @Victor 's answer; if you are entering a market order, and not a limit order (where you set the price you want to buy or sell at), then the Ask price is what you can expect to pay to purchase shares of stock in a long position and the Bid price is what you can expect to receive when you sell stock you own in a long position.
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Is there a dollar amount that, when adding Massachusetts Sales Tax, precisely equals $200?
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No. $188.23 has $11.76 tax = $199.99 $188.24 has $11.77 tax - $200.01 So, unless the based price contained the half cent for $188.235, the register would never show $200.00 even. How does the receipt to customer look?
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Switch from DINK to SIWK: How do people afford kids?
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It is simple: G-d provides :). EDIT: By "it" I mean the answer to the question asked. Raising kids is not so simple; G-d does provide :).
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Where does the stock go in a collapse?
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Just before a crash or at the start of the crash most of the smart money would have gotten out, the remaining technical traders would be out by the time the market has dropped 10 to 15%, and some of them would be shorting their positions by now. Most long-term buy and hold investors would stick to their guns and stay in for the long haul. Some will start to get nervous and have sleepless nights when the markets have fallen 30%+ and look to get out as well. Others stay in until they cannot stand it anymore. And some will stick it out throughout the downturn. So who are the buyers at this stage? Some are the so called bargain hunters that buy when the market has fallen over 30% (only to sell again when it falls another 20%), or maybe buy more (because they think they are dollar cost averaging and will make a packet when the price goes back up - if and when it does). Some are those with stops covering their short positions, whilst others may be fund managers and individuals looking to rebalance their portfolios. What you have to remember during both an uptrend and a downtrend the price does not move straight up or straight down. If we take the downtrend for instance, it will have lower lows and lower highs (that is the definition of a downtrend). See the chart below of the S&P 500 during the GFC falls. As you can see just before it really started falling in Jan 08 there was ample opportunity for the smart money and the technical traders to get out of the market as the price drops below the 200 MA and it fails to make a higher peak. As the price falls from Jan 08 to Mar 08 you suddenly start getting some movement upwards. This is the bargain hunters who come into the market thinking the price is a bargain compared to 3 months ago, so they start buying and pushing the price up somewhat for a couple of months before it starts falling again. The reason it falls again is because the people who wanted to sell at the start of the year missed the boat, so are taking the opportunity to sell now that the prices have increased a bit. So you get this battle between the buyers (bulls) and seller (bears), and of course the bears are winning during this downtrend. That is why you see more sharper falls between Aug to Oct 08, and it continues until the lows of Mar 09. In short it has got to do with the phycology of the markets and how people's emotions can make them buy and/or sell at the wrong times.
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I received $1000 and was asked to send it back. How was this scam meant to work?
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I've skimmed through the answers given and I'd like do add another possible scenario. I've recently heard about this exact thing happening to someone only the money originally was a loan taken in the receivers name. 1) Scumbag finds out personal data – including social number, bank account and phone – of Innocent Victim. 2) Scumbag takes out a loan in the name of Innocent Victim. The money are sent to IV's account. 3) Scumbag calls IV saying 'Oh, I've made a mistake, blah, blah, yada, yada. Could you please send the money back to me? My bank account is...' 4) Innocent Victim, being the good guy that he/she is, of course want to help out and send the money to Scumbag. 5) Scumbag makes a cash withdrawal and is no longer anywhere to be found and Innocent Victim is left with a loan but no money.
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Does bull/bear market actually make a difference?
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The main difference between a bull market and a bear market is due the "the leverage effect". http://www.princeton.edu/~yacine/leverage.pdf The leverage effect refers to the observed tendency of an asset’s volatility to be negatively correlated with the asset’s returns. Typically, rising asset prices are accompanied by declining volatility, and vice versa. The term “leverage” refers to one possible economic interpretation of this phenomenon, developed in Black (1976) and Christie (1982): as asset prices decline, companies become mechanically more leveraged since the relative value of their debt rises relative to that of their equity. As a result, it is natural to expect that their stock becomes riskier, hence more volatile. More volatile assets in a bear market are not such good investments as less volatile assets in a bull market.
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How to split stock earnings?
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Let's suppose your friend gave your $100 and you invested all of it (plus your own money, $500) into one stock. Therefore, the total investment becomes $100 + $500 = $600. After few months, when you want to sell the stock or give back the money to your friend, check the percentage of profit/loss. So, let's assume you get 10% return on total investment of $600. Now, you have two choices. Either you exit the stock entirely, OR you just sell his portion. If you want to exit, sell everything and go home with $600 + 10% of 600 = $660. Out of $660, give you friend his initial capital + 10% of initial capital. Therefore, your friend will get $100 + 10% of $100 = $110. If you choose the later, to sell his portion, then you'll need to work everything opposite. Take his initial capital and add 10% of initial capital to it; which is $100 + 10% of $100 = $110. Sell the stocks that would be worth equivalent to that money and that's it. Similarly, you can apply the same logic if you broke his $100 into parts. Do the maths.
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What pension options are there for a 22 year old graduate in the UK?
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Major things to consider: If you're expecting to look at the property market: it might prove to be sensible to start doing it now, since the market is just recovering, and (IMHO warning -I'm not a professional investor, just a random guy on the internet) prices still hasn't caught up with value fundamentals. check out cash ISA's for a 24-36 month timeframe; most do a reasonable 3-4% AER, with the current inflation rate being around 4%, this will, at the very least, make sure your money doesn't loose it's purchasing power. Finally, a word of caution: SIPPs have a rather rubbish AER rates. This, by itself, wouldn't be much of a problem on a 30-40 years timeframe, but keep the (current, and historically strictly monotonically increasing) 4% inflation rate in mind: this implies the purchasing power of any money tied in these vehicles will loose it's purchasing power, in a compounding manner. Hope this helps, let me know if you have any questions.
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Google Finance: Input Parameters For Simple Moving Averages
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I looked at this a little more closely but the answer Victor provided is essentially correct. The key to look at in the google finance graph is the red labled SMA(###d) would indicate the period units are d=days. If you change the time axis of the graph it will shift to SMA(###m) for period in minutes or SMA(###w) for period in weeks. Hope this clears things up!
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High dividend stocks
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Future tax increases on dividends are likely. The Wall Street Journal says. "The millions of Americans who receive dividend income ... need to begin adjusting their investment strategy accordingly." (ref) "Last week the Senate Budget Committee passed a fiscal 2011 budget resolution that includes an increase in the top tax rate on dividends to 39.6% from the current 15%—a 164% increase." ... "You can expect fewer businesses either to offer or increase dividend payouts."
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For what dates are the NYSE and U.S. stock exchanges typically closed?
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Stumbled upon this question, I've found the updated dates for 2016 and 2017 in a more permanent location. https://www.nyse.com/markets/hours-calendars
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How do I get rid of worthless penny stocks if there is no volume (so market/limit orders don't work) and my broker won't buy them from me?
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Your broker should be able to answer this. Many brokers will buy it from you for the cost of a commission, if there's no legit buyer.
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Multi-Account Budgeting Tools/Accounts/Services
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IngDirect has this concept of sub accounts inside a main account - that might be perfect for what you are looking for. To clarify, you basically have one physical account with logical sub account groupings.
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Pay off credit card debt or earn employer 401(k) match?
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For easy math, say you are in the 25% tax bracket. A thousand deposited dollars is $750 out of your pocket, but $2000 after the match. Now, you say you want to take the $750 and pay down the card. If you wait a year (at 20%) you'll owe $900, but have access to borrow a full $1000, at a low rate, 4% or so. The payment is less than $19/mo for 5 years. So long as one is comfortable juggling their debt a bit, the impact of a fully matched 401(k) cannot be beat. Keep in mind, this is a different story than those who just say "don't take a 401(k) loan." Here, it's the loan that offers you the chance to fund the account. If you are let go, and withdraw the money, even at the 25% rate, you net $1500 less the $200 penalty, or $1300 compared to the $750 you are out of pocket. If you don't want to take the loan, you're still ahead so long as you are able to pay the cards over a reasonable time. I'll admit, a 20% card paid over 10+ years can still trash a 100% return. This is why I add the 401(k) loan to the mix. The question for you - jldugger - is how tight is the budget? And how much is the match? Is it dollar for dollar on first X%?
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Applying for and receiving business credit
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I'm afraid the great myth of limited liability companies is that all such vehicles have instant access to credit. Limited liability on a company with few physical assets to underwrite the loan, or with insufficient revenue, will usually mean that the owners (or others) will be asked to stand surety on any credit. However, there is a particular form of "credit" available to businesses on terms with their clients. It is called factoring. Factoring is a financial transaction whereby a business sells its accounts receivable (i.e., invoices) to a third party (called a factor) at a discount in exchange for immediate money with which to finance continued business. Factoring differs from a bank loan in three main ways. First, the emphasis is on the value of the receivables (essentially a financial asset), not the firm’s credit worthiness. Secondly, factoring is not a loan – it is the purchase of a financial asset (the receivable). Finally, a bank loan involves two parties whereas factoring involves three. Recognise that this can be quite expensive. Most banks catering to small businesses will offer some form of factoring service, or will know of services that offer it. It isn't that different from cheque encashment services (pay-day services) where you offer a discount on future income for money now. An alternative is simply to ask his clients if they'll pay him faster if he offers a discount (since either of interest payments or factoring would reduce profitability anyway).
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Is there ACH analogue in Asia?
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ACH as offered in US is a very broad and versatile network used for a range of business case. There is no other network as versatile. In Europe UK has BACS as equivalent about 50-70% of what US-ACH offers. Most European countries also have ACH [Collectively Called ACH, have 90% of the layouts that are identical, called by different names domestically, different business capabilities and rules]. Most countries in Asia also have similar networks. For example in India there is ECS now replaced by NACH. In Singapore/Indonesia/Thailand/Malaysia they have Giro's. China has CNAPS and BEPS. So essentially every country has addressed the business need differently and bis.org has a decent over-view country wise on the clearing systems available.
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Why are there many small banks and more banks in the U.S.?
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As an addendum to PeterK's answer, once upon a time, there were many Savings and Loan Associations (S&Ls) that acted as small banks, accepting savings deposits from people and lending money for home mortgages to local residents. Some of these S&Ls were chartered Federally with deposits insured by the FSLIC (similar to the FDIC which still insures deposits in banks) while others had State charters and used the State equivalent of FSLIC as the insurer. To induce people to save with S&Ls instead of banks, S&Ls paid higher rates of interest on their savings accounts than banks were permitted to do on bank savings accounts. Until 1980, S&Ls were not permitted to make consumer or commercial loans, have checking accounts, issue credit cards, etc., but once the US Congress in its wisdom permitted this practice, this part of the business boomed. (Note for @RonJohn: Prior to 1980, S&Ls offered NOW accounts on which "checks" (technically, Negotiated Orders of Withdrawal) could be written but they were not checks in the legal sense, and many S&Ls did not return these paid "checks" with the monthly statement as all banks did; writing a "check" while pressing hard created a carbon copy that could be used as proof of payment). In just a few years' time, many S&Ls crashed because they were not geared to handle the complexities of the new things that they were permitted to do, and so ran into trouble with bad loans as well as outright fraud by S&L management and boards of directors etc. After the disappearance of most S&Ls, many small banks (often with State charters only) sprang up, and that's why there are so many banks in the US. Mortgage lending is a lucrative business (if done right), and everyone wants to get into the business. Note that 4 branches of Bank of America in a Florida town is not a sign of many banks; the many different banks that the OP noticed in Maine is.
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Good way to record currency conversion transactions in personal accounting software?
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Here's what the GnuCash documentation, 10.5 Tracking Currency Investments (How-To) has to say about bookkeeping for currency exchanges. Essentially, treat all currency conversions in a similar way to investment transactions. In addition to asset accounts to represent holdings in Currency A and Currency B, have an foreign exchange expenses account and a capital gains/losses account (for each currency, I would imagine). Represent each foreign exchange purchase as a three-way split: source currency debit, foreign exchange fee debit, and destination currency credit. Represent each foreign exchange sale as a five-way split: in addition to the receiving currency asset and the exchange fee expense, list the transaction profit in a capital gains account and have two splits against the asset account of the transaction being sold. My problems with this are: I don't know how the profit on a currency sale is calculated (since the amount need not be related to any counterpart currency purchase), and it seems asymmetrical. I'd welcome an answer that clarifies what the GnuCash documentation is trying to say in section 10.5.
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Bank of the Sierra: Are they legit? How can the checking interest APY be so high?
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I believe MrChrister's answer is correct: Since they're FDIC insured, they are "legit." Second, on the seemingly too-good-to-be-true rate: They're basically making up the difference on other fees (not necessarily paid by you) in order to offer you the higher-than-market rate. I'd like to point out two things not mentioned about the current rate offer, though: The high 4.09% APY advertised is only on balances up to $25,000; anything over that threshold is at a lower 1.01% APY. The offer also states in the footnotes: "Rates may change after the account is opened." You might want to see if they have a good history of paying higher than average interest rates. You wouldn't want to switch only to find out the promotional rate was a teaser that soon gets reduced.
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How Emini/Minifuture price is set against its underlaying instrument?
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The market sets prices and the way JP Morgan or any other bank or organization determines the price it's willing to deal in would be proprietary business information.
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What do “cake and underwear” stocks refer to?
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I interpret that to mean "vice" stocks and necessities. "Cake" may just be a nicer way of saying "sin" (see The Virtues of Vice Stocks) and includes "lesser sins" like sweets and soda in the group. "Underwear" likely means things that people are going to buy regardless of the economy - daily staples, which are generally safer stocks.
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Can I claim a tax deduction for working from home as an employee? I work there 90% of the time
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90% sounds like "principal place of business" but check these IRS resources to make sure.
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Does a bid and ask price exist for indices like the S&P500?
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The equation you show is correct, you've simply pointed out that you understand that you buy at the 'ask' price, and later sell at the 'bid.' There is no bid/ask on the S&P, as you can't trade it directly. You have a few alternatives, however - you can trade SPY, the (most well known) S&P ETF whose price reflects 1/10 the value or VOO (Vanguard's offering) as well as others. Each of these ETFs gives you a bid/ask during market hours. They trade like a stock, have shares that are reasonably priced, and are optionable. To trade the index itself, you need to trade the futures. S&P 500 Futures and Options is the CME Group's brief info guide on standard and mini contracts. Welcome to SE.
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Should I Use an Investment Professional?
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Let me start with something you might dismiss as trite - Correlation does not mean Causation. A money manager charging say, 1%, isn't likely to take on clients below a minimum level. On the other hand, there's a long debate regarding how, on average, managed funds don't beat the averages. I think that you should look at it this way. People that have money tend to be focused on other things. A brain surgeon making $500K/yr may not have the time, nor the inclination to want to manage her own money. I was always a numbers person. I marveled at the difference between raising 1.1 to the 40th power, getting 45.3 (i.e. Getting 45.3 times your investment after 40 years at 10%) vs 31.4 at 9%. That 1% difference feels like nothing, but after a lifetime, 1/3 of your money has been skimmed off the top. the data show that one can do better by simply putting their money into a mix of S&P index and cash, and beat the average money manager over time, regardless of convoluted 12 asset class allocations. Similarly - There are people who use a 'tax guy.' In quotes because I mean this as an individual whom they go to, year after year, not a storefront. My inlaws used to go to one, and I was curious what they got for their money. Each year he sent them a form. 3 pages they needed to fill in. Every cell made its way into the guy's tax program. The last year, I went with them to pick up the tax return. I asked him if he noticed that they might benefit from small Roth conversions each year, or by making some of their IRA RMD directly to charity. He kindly told me "That's not what we do here" and whisked us away. I planned both questions in advance. The Roth conversion was a strategy that one could agree made sense or dismiss as convoluted for some clients. But. The RMD issue was very different. They didn't have enough Schedule A deductions to itemize. Therefore the $3000 they donated each year wasn't impacting their return. By donating directly from their IRAs, this money would avoid tax. It would have saved them more than the cost of the tax guy, who charged a hefty fee, in my opinion. It seemed to me, this particular strategy should be obvious to one whose business is preparing returns.
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Is there any circumstance in which it is necessary to mark extra payments on a loan as going to “principal and not interest”?
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The mortgage I got last year through Wells Fargo explicitly indicates in its terms that excess payment will be considered against future payments (i.e., pay $500 extra in January and you owe $500 less in February) unless indicated otherwise. It goes on to state that with electronic payments you do not get to specify where excess payment goes, so excess payment made electronically always goes toward future payments. If you want to make excess payments toward principal, you must actually send them a check and your payment stub, with the appropriate box ticked. This won't be very different for other major banks, I wouldn't imagine.
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How do I find an ideal single fund to invest all my money in?
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A single fund that reflects the local currency would be an index fund in the country. Look for mutual funds which provide for investing on the local stock index. The fund managers would handle all the portfolio balancing for you.
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Do I owe taxes in the US for my LLC formed in the US but owned by an Indian citizen?
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This is a complicated question that relies on the US-India Tax Treaty to determine whether the income is taxable to the US or to India. The relevant provision is likely Article 15 on Personal Services. http://www.irs.gov/pub/irs-trty/india.pdf It seems plausible that your business is personal services, but that's a fact-driven question based on your business model. If the online training is 'personal services' provided by you from India, then it is likely foreign source income under the treaty. The 'fixed base' and '90 days' provisions in Article 15 would not apply to an India resident working solely outside the US. The question is whether your US LLC was a US taxpayer. If the LLC was a taxpayer, then it has an obligation to pay US tax on any worldwide income and it also arguably disqualifies you from Article 15 (which applies to individuals and firms of individuals, but not companies). If you were the sole owner of the US LLC, and you did not make a Form 8832 election to be treated as subject to entity taxation, then the LLC was a disregarded entity. If you had other owners, and did not make an election, then you are a partnership and I suspect but cannot conclude that the treaty analysis is still valid. So this is fact-dependent, but you may be exempt from US tax under the tax treaty. However, you may have still had an obligation to file Forms 1099 for your worker. You can also late-file Forms 1099 reporting the nonemployee compensation paid to your worker. Note that this may have tax consequences on the worker if the worker failed to report the income in those years.
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Why do card processing companies discourage “cash advance” activities
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Square does not care if you run a $10 transaction to test the system. They are concerned with its use to move meaningful amounts of money. The only people who do this will be the Dunning-Kruger gang, who only think they are clever. Because of course Square will hunt them down, sue, garnish and/or prosecute them! But the expense of doing so is all on Square, making it a total lose. The cheapest resolution is to not let it happen in the first place. The ~3% cash advance fees, lack of rewards points, and the higher interest rate are not just for profiteering. They reflect, and pay for, the higher risk of loaning money via cash advance: to put it indelicately, the risk of default. Cash advance credit limits are often much lower than purchase limits. If a merchant is selling himself phantom merchandise to get easy cash advances, it means he is not using regular ways of borrowing money. Perhaps because he can't, because he has exhausted his other opportunities to borrow, risk managers have cut him off. Square has no reason to care either way; but the issuing bank does, and through Visa etc., they will disallow this behavior. ** PayPal Here's rate used here instead of Square's, to simplify math.
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Research for Info
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quid's link should give you a definitive answer, but just to set expectations, here's an article from the UPI: Essex Chemical Corp. has agreed to be acquired by Dow Chemical Co. in a $366 million, $36-a-share deal ... Any shares that remain outstanding after the merger will be converted into the right to receive $36 each in cash, the companies said. There's no mention of exchange for Dow stock, so it's likely that you would get $36 for this share of stock, if anything.
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How can I tell what is “real” Motley Fool advice?
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These advertisements try to take advantage of the short term memory loss of older people. If you keep an old person watching long enough they will forget why they started watching in the first place. Yet they trust themselves and assume that it was for a good reason. So the long winded salespitch succeeds with older people who tend to have more money to invest anyway. Yes, I think that Motley Fool has jumped the shark.
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How much should a new graduate with new job put towards a car?
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I think the answer to how much you "should" spend depends on a few more questions: Once you answer these questions I think you'll have a better idea of what you should spend. If you have no financial goals then what kind of car you buy doesn't really matter. But if your goals are to build and accumulate wealth both in the short and long term then you should know that, by the numbers, a car is terrible financial investment. A new car loses thousands of dollars in value the moment you drive it off the lot. Buy the cheapest, reliable commuter you can ($5k or less) and use the extra money to pay off your debts. Then once your debts are paid off start investing that money. If you continue this frugal mindset with your other purchases (what house to buy, what food to eat, what indulgences to indulge in, etc...) and invest a bit, I think you'll find it pretty easy to create a giant amount of wealth.
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property owned 50/50 between my brother and me
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Not sure what you are talking about. The house isn't part of a business so neither of you can deduct half of normal maintenance and repairs. It is just the cost of having a house. The only time this would be untrue is if the thing that you are buying for the house is part of a special deduction or rebate for that tax year. For instance the US has been running rebates and deductions on certain household items that reduce energy - namely insulation, windows, doors, and heating/cooling systems (much more but those are the normal things). And in actuality if your brother is using the entire house as a living quarters you should be charging him some sort of rent. The rent could be up to the current monthly market price of the home minus 50%. If it were my family I would probably charge them what I would pay for a 3% loan on the house minus 50%. Going back to the repairs... Really if these repairs are upgrades and not things caused by using the house and "breaking" or "wearing" things you should be paying half of this, as anything that contributes to the increased property value should be paid for equally if you both are expecting to take home 50% a piece once you sell it.
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Why do cash back credit cards give a higher rate for dining and gasoline purchases?
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Don't really know but I can guess. Firstly, everyone thinks the price of gas is too high. You drive to work every day, and gas is basically the only product who's price is advertised from the street! From that perspective. So mentally, I argue, we overvalue an extra 1 percent discount on gas. It's only worth maybe 60 cents a month to me, but worth a lot of other interchance fees for the credit card company. Secondly, gas stations are a prime robbery target. Credit cards mean less cash in the till. And less chance for employees to steal from the till, and less chance of counterfit money. Finally, it's a competitive market. If stations don't accept a card, they'll lose business to elsewhere. There's a gas station on either side of an intersection, and you can always tell which station is a few cents cheaper because it's the one with customers fueling up while the other one is a ghost town. They feel they have to compete on convenience or go under, and the credit card companies recruit you into the game with higher cash back rewards.
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Is trading stocks easier than trading commodities?
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There are a number of ways trading stocks is easier than commodities: But the main and most important reason is that over long periods stocks in general will tend to outperform inflation as you are investing money in enterprises that generally try to become more productive over time. Whereas commodities in the long term tend to rise only at the pace of inflation (this is kind of the definition of inflation actually). So even uninformed investors that pick stocks at random will generally do better than someone doing the same in commodities even before the higher commodities trading fees are taken into account. Also your orange example may be harder than you think. Once the news that a drought is an issue the price of oranges will almost immediately change well before the oranges come to market! So unless you can predict the drought before anyone else can you won't be able to make money this way.
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Why doesn't change in accounts receivable on balance sheet match cash flow statement?
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Increase in A/R in balance sheet includes the A/R of acquired businesses. Change in A/R in cash flow statement might say "excluding effects of business acquisitions".
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Why should we expect stocks to go up in the long term?
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I feel something needs to be addressed The last 100 years have been a period of economic prosperity for the US, so it's no surprise that stocks have done so well, but is economic prosperity required for such stock growth? Two world wars. The Great Depression. The dotcom bust. The telecom bust. The cold war. Vietnam, Korea. OPEC's oil cartel. The Savings and Loans crisis. Stagflation. The Great Recession. I could go on. While I don't fully endorse this view, I find it convincing: If the USA has managed 7% growth through all those disasters, is it really preposterous to think it may continue?
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Are there common stock price trends related to employee option plans?
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There's an odd anomaly that often occurs with shares acquired through company plans via ESPP or option purchase. The general situation is that the share value above strike price or grant price may become ordinary income, but a sale below the price at day the shares are valued is a capital loss. e.g. in an ESPP offering, I have a $10 purchase price, but at the end of the offering, the shares are valued at $100. Unless I hold the shares for an additional year, the sale price contains ordinary W2 income. So, if I see the shares falling and sell for $50, I have a tax bill for $90 of W2 income, but a $50 capital loss. Tax is due on $90 (and for 1K shares, $90,000 which can be a $30K hit) but that $50K loss can only be applied to cap gains, or $3K/yr of income. In the dotcom bubble, there were many people who had million dollar tax bills and the value of the money netted from the sale couldn't even cover the taxes. And $1M in losses would take 300 years at $3K/yr. The above is one reason the lockup date expiration is why shares get sold. And one can probably profit on the bigger companies stock. Edit - see Yelp down 3% following expiration of 180 day IPO lock-up period, for similar situation.
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Do I owe taxes in the US for my LLC formed in the US but owned by an Indian citizen?
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You're doing business in the US and derive income from the US, so I'd say that yes, you should file a non-resident tax return in the US. And in Connecticut, as well, since that's where you're conducting business (via your domestic LLC registered there). Since you paid more than $600 to your contractor, you're probably also supposed to send a 1099 to him on that account on behalf of your LLC (which is you, essentially, if you're the only member).
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How can I save on closing costs when buying a home?
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According to Realtor.com, there are a variety of options to save on closing costs: A general Google search on "how to reduce closing costs" will return a lot of results on other people's experiences, as well as tips and tricks.
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Should I finance a new home theater at 0% even though I have the cash for it?
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I have abused 0% interest programs time and time again, but only because my wife and I are assiduous about paying our bills on time. We've mostly taken advantage of it with bigger purchases that we've done through Lowe's or Home Depot (eg - washing machines, carpeting, stove, fridge), but its been well worth it. There are two rules that we set for ourselves whenever we do a 0% interest program -- 1) We have the money already in savings so that we can easily pay it off at any time 2) We agree to pay our monthly bill on time There's nothing quite like using another person's money to buy your things, while keeping your money to gain interest in a savings account.
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A stock just dropped 8% in minutes and now all of a sudden the only way to buy is on the ask, what does this mean?
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You have to look at stocks just like you would look at smaller and more illiquid markets. Stock trade in auction markets. These are analogous to ebay or craigslist, just with more transparency and liquidity. There is no guarantee that a market will form for a particular stock, or that it will sustain. When a stock sells off, and there are no bids left, that means all of the existing bidder's limit orders got filled because someone sold at those prices. There is nothing fishy about that. It is likely that someone else wants to sell even more, but couldn't find any more bidders. If you put a bid you would likely get filled by the shareholder with a massive position looking for liquidity. You could also buy at the ask.
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What is the best credit card for someone with no credit history
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Consider getting yourself a gas card. Use it for a year. Make your payments on time. Then reapply for a credit card.
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Short selling - lender's motivation
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As the other answer said, the person who owns the lent stock does not benefit directly. They may benefit indirectly in that brokers can use the short lending profits to reduce their fees or in that they have the option to short other stocks at the same terms. Follow-up question: what prevents the broker lending the shares for a very short time (less than a day), pocketing the interest and returning the lenders their shares without much change in share price (because borrowing period was very short). What prevents them from doing that many times a day ? Lack of market. Short selling for short periods of time isn't so common as to allow for "many" times a day. Some day traders may do it occasionally, but I don't know that it would be a reliable business model to supply them. If there are enough people interested in shorting the stock, they will probably want to hold onto it long enough for the anticipated movement to happen. There are transaction costs here. Both fees for trading at all and the extra charges for short sale borrowing and interest. Most stocks do not move down by large enough amounts "many" times a day. Their fluctuations are smaller. If the stock doesn't move enough to cover the transaction fees, then that seller lost money overall. Over time, sellers like that will stop trading, as they will lose all their money. All that said, there are no legal blocks to loaning the stock out many times, just practical ones. If a stock was varying wildly for some bizarre reason, it could happen.
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How to estimate federal and state taxes likely to be due on my side income?
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Most states that have income tax base their taxes on the income reported on your federal return, with some state-specific adjustments. So answering your last question first: Yes, if it matters for federal, it will matter for state (in most cases). For estimating the tax liability, I would not use the effective rate but rather use the rate for your highest tax bracket and apply that to your estimated hobby income, assuming that you primary job income won't be wildly higher or lower than last year. As @keshlam noted in a comment, this income is coming on top of whatever else you earn, so it will be taxed at your top rate. Finally, I'd check again whether this is really "hobby" income or if it is "self-employment" income. Self-employment income will be subject to self-employment tax, which comes on top of the regular income tax.
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Value of credit score if you never plan to borrow again?
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You're definitely not the first to pose this question. During the peak of the housing crisis I noticed a decent amount of very high dollar properties get abandoned to their fates. Individuals who can afford the mortgage on a 5 million dollar home don't necessarily need their credit to survive so it made more sense to let the asset (now a liability) go and take the hit on their credit for a few years. Unsecured debt, as mentioned is a little trickier because its backed by default by your personal estate. If the creditor is active they will sue you and likely win unless there are issues with their paperwork. Thing is though, you might escape some impacts of the debt to your credit rating and you might not "need" credit, but if you were to act as a wealthy person and not "new money" you would observe the significant value of using credit. credit allows you to leverage your wealth and expand the capacity of your money to import your overall wealth picture. It may prove best to learn that and then make more wealth on your winnings than take the short sighted approach and welch on the debt.
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Price movement behaviour before earnings announcements
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In principle, the stock price should see no change in the days leading up to an earnings announcement, and then at the moment of the announcement, the stock price should move in the direction of the earnings surprise (relative to the market's belief of what earnings were going to be). In practice, stock prices tend to drift a little in the direction of the surprise shortly before the announcement and the associated price jump. This could be because smart investors were able to replicate the computations to predict the announcement or because information gets illegally leaked ahead of the announcement. So I guess your bullet point B is a likely scenario. Note that hedging activity in the options market will not affect stock price one way or another. Options transfer risk from one party to another but net to zero. Intense hedging activity may be able to push up the price of options (increasing the implied volatility), but it shouldn't affect the price of a stock one way or the other. For this reason, bullet point A is not the case. Note that price behavior after the announcement is also interesting: it seems to take some time to reach the correct price instead of jumping directly to it as economists would predict. This phenomenon is known as post earnings announcement drift.
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Should I pay off my student loan before buying a house?
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It depends on the terms. Student loans are often very low interest loans which allow you to spread your costs of education over a long time without incurring too much interest. They are often government subsidized. On the other hand, you often get better mortgage rates if you can bring a down payment for the house. Therefore, it might be more beneficial for you to use money for a down payment than paying off the student load.
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How to decide if I should take my money with me or leave it invested in my home country?
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The key is whether you plan to stay in Sweden forever, or plan to move back to Brazil after completion of 2 years. If you have not decided, best is stay invested in Brazil. Generally markets factor in currency prices so if you move the money into Krona and try and move it back it would in ideal market be more or less same. In reality it may be more or less and can't be predicted.
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Why call option price increases with higher volatility
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Let's say a stock trades at $100 right now, and you can buy a $100 call option. When you buy the call option (and the money you paid is gone), one of two things can happen: The share price goes up, or the share price goes down. If the share price goes up, you profit. If the share price goes down, you don't lose! Because once the shares are below $100, you don't exercise the call option, and you don't lose any money. So if you have a share that is rock solid at $100, you don't make money. If you have a share where the company owner took some ridiculous risk, and the shares could go to $200 or the company could go bankrupt, then you have a 50% chance to make $100 and a 50% chance to not lose anything. That's much more preferable.
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Will a credit card issuer cancel an account if it never incurs interest?
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I've got a card that I've had for about 25 years now. The only time they charged me interest I showed it was their goof (the automatic payment failed because of their mistake) and they haven't cancelled it. No annual fee, a bit of cash back. The only cards I've ever had an issuer close are ones I didn't use.
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What are the benefits of opening an IRA in an unstable/uncertain economy?
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You bring up a valid concern. IRAs are good retirement instruments as long as the rules don't change. History has shown that governments can change the rules regarding retirement accounts. As long as you have some of your retirement assets outside of an IRA I think IRAs are good ways to save for retirement. It's not possible to withdraw the money before retirement without penalty. Also, you will be penalized if you do not withdraw enough when you do retire.
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Is there any reason to choose my bank's index fund over Vanguard?
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Extortionate expense ratio aside, comparing the fund to the vanguard balanced fund (with an expense ratio of 0.19%) shows that your bank's fund has underperformed in literally every shown time period. Mind you, the vanguard fund is all US stocks and bonds which have done very well whereas the CIBC fund is mostly Canadian. Looking at the CIBC top 10 holdings does seem to suggest that it's (poorly) actively managed instead of being an index tracker for what that's worth. Maybe your bank offers cheaper transaction costs when buying their own funds but even then the discount would have to be pretty big to make up for the underperformance. Basically, go Vanguard here.
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If I want a Credit Card offered through a different Credit Union should I slowly transition my banking to that CU?
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As has been stated, you don't need to actively bank with a credit union to apply for one of their credit cards. That said, one benefit to having account activity, and significant capital with a CU, is to increase the likelihood of having a larger credit line granted to you, when you do apply. If you are going to use the card sparingly however, then this is a non issue. That said, if you really want to maximize card benefits, then you want to look for cards with large sign up bonuses (e.g. Chase Sapphire, or Ink Bold if you have a business) and sign up exclusively for those bonuses. These cards offer rewards in excessive value of $1000 in travel services (hotels/plane tickets), or $500 cash back if you prefer straight cash back redemptions. If you prefer to keep it really simple, you can sign up for a cash back card, like the Amex Fidelity, which offers 2% cash back everywhere, with no annual fee (albeit the cash back is through their investment account, which you don't actually have to 'invest' with). Personally, I have the Penfed card, and use it exclusively for gas (5% cash back). I also have a Charles Schwab bank account, which I keep funded exclusively for ATM withdrawals (free ATM usage, worldwide, 100% fee reimbursement). I use the accounts exclusively for the benefit they provide me, and no more and have never had an issue. I also have 3 dozen other credit cards which I signed up for exclusively for the sign up bonus, but that's outside the scope of this question. I only mention it because you seem to believe it is difficult to get approved for a new credit line. If your credit is good however, you won't have a problem. For a small idea, of how to maximize credit card bonus categories, I would advise you read this. As mentioned in the article, its possible to get rewards almost everywhere you shop. In short, anytime you use cash, you are missing out on a multitude of benefits a credit card offers you (e.g. see the benefits of a visa signature card) in addition to points/cash back.
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What can I replace Microsoft Money with, now that MS has abandoned it?
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Check the Financial section in this list of Open Source Software
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When is the right time to buy a new/emerging technology?
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As you said, the next generation will be cheaper and more efficient. Same for the generation after that. From a financial standpoint, there isn't a steadfast theory that supports when to buy the technology. It comes down to primarily personal issues. As far as I know, Musk's claims about the cost were relating to a traditional slate roof, not a traditional asphalt shingle roof. I can't recall if he explicitly said one way or the other, but I have yet to see any math that supports a comparison to asphalt shingles. If you look at all of the demos and marketing material, it's comparisons to various styles of tile roofing, which is already more expensive than asphalt shingles. Do you feel it's worth it to invest now, or do you think it would be more worth it to invest later when the costs are lower? A new roof will last 10-20 years (if not longer...I'm not a roof expert). Do you need a new roof yet? Are your electricity bills high enough that the cost of going solar will offset it enough? Can you sell unused power back to your power company? I could go on, but I think you get the point. It's entirely a personal decision, and not one that will have a definitive answer. If you keep waiting to make a purchase because you're worried that the next generation will be cheaper and more efficient, then you're never going to make the purchase.
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For young (lower-mid class) investors what percentage should be in individual stocks?
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I don't believe the decision is decided by age or wealth. You only stock pick when a) you enjoy the process because it takes time and if you consider it 'work' then the cost will probably not be offset by higher returns. b) you must have the time to spend trading, monitoring, choosing, etc. c) you must have the skills/experience to 'bring something to the table' that you think gives you an edge over everyone else. If you don't then you will be the patsy that others make a profit off.
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What return are you getting on your money from paying down a mortgage on a rental property?
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As Chris pointed out: If your expenses are covered by the income exactly, as you have said to assume, then you are basically starting with a $40K asset (your starting equity), and ending with a $200K asset (a paid for home, at the same value since you have said to ignore any appreciation). So, to determine what you have earned on the $40K you leveraged 5x, wouldn't it be a matter of computing a CAGR that gets you from $40K to $200K in 30 years? The result would be a nominal return, not a real return. So, if I set up the problem correctly, it should be: $40,000 * (1 + Return)^30 = $200,000 Then solve for Return. It works out to be about 5.51% or so.
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Where I can find the exact time when a certain company's stock will be available in the secondary market?
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Very often, the word secondary market is used synonymously with the stock market as we all know it. In this case, the primary market would be the "closed" world of VCs, business angels, etc to which stock market investors do not have access, e.g. the securities are not trading on a public stock market.
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I spend too much money. How can I get on the path to a frugal lifestyle?
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Agree wholeheartedly with the first point - keep track! It's like losing weight, the first step is to be aware of what you are doing. It also helps to have a goal (e.g. pay for a trip to Australia, have X in my savings account), and then with each purchase ask 'what will I do with this when I go to Australia' or 'how does this help towards goal x?' Thrift stores and the like require some time searching but can be good value. If you think you need something, watch for sales too.
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Are these really bond yields?
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that would imply that a 30Y US Treasury bond only yields 2.78%, which is nonsensically low. Those are annualized yields. It would be more precise to say that "a 30Y US Treasury bond yields 2.78% per year (annualized) over 30 years", but that terminology is implied in bond markets. So if you invest $1,000 in a 30-year T-bond, you will earn roughly 2.78% in interest per year. Also note that yield is calculated as if it compounded, meaning that investing in a 30-year T-bind will give you a return that is equivalent to putting it in a savings account that earns 1.39% interest (half of 2.78%) every 6 months and compounds, meaning you earn interest on top of interest. The trade-off for these low yields is you have virtually no default risk. Unlike a company that could go bankrupt and not pay back the bond, the US Government is virtually certain to pay off these bonds because it can print or borrow more money to pay off the debts. In addition, bonds in general (and especially treasuries) have very low market risk, meaning that their value fluctuates much less that equities, even indicies. S&P 500 indices may move anywhere between -40% and 50% in any given year, while T-bonds' range of movement is much lower, between -10% and 30% historically).
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Why doesn’t every company and individual use tax-havens to pay less taxes?
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I believe that an understanding of the taxation system can help to understand our place in it, and how that impacts each of our personal finances. I will try to remain unbiased here but this is a somewhat subjective question, so please bear with me if you disagree on any point. Some of these tax savings are well-advertised, and can be used by many people, such as tax credits for mass-transit passes which exists in some countries. But some of these tax savings are things you never heard of before, until it winds up on the news. Why do some people seem to get tax savings that you and I cannot get, and why do those people always seem to have so much more money than us? A simplistic answer can show this in three parts: (1) The source of one's income; (2) Transaction costs; and (3) "tax loopholes". Tax savings occur proportionately to one's income, and if the savings apply to investment income, they occur proportionately to one's wealth. If someone living paycheck to paycheck with a minimal amount in a bank account "saves tax on investment income", they might reduce their taxable interest from $50 to $0. That's because they simply don't have any other investment income to reduce. All of their income comes in the form of employment, which is typically very hard to save taxes on. Most governments have a very firm grasp on the taxation of employment income, because it is a huge proportion of income in the country (and therefore has the largest amount of tax associated), and because it is very straightforward (work for someone = employment income). A more cynical person than I might point out that investment income is earned by the very wealthy, who can afford to lobby for politicians to pass favourable investment income laws. Even very straightforward tax saving opportunities may cost money to enable. The simplest example would be: if a tax saving opportunity is so complicated that an average person can't understand it themselves, then an accountant, lawyer, or banker will need to be the one to explain it. And that can cost you money. If your tax isn't so much to begin with, then the transaction costs to achieve the tax savings could be higher than the tax savings themselves. For example, most countries have tax savings / deferrals if you start a corporation. These rules typically exist to promote investment in the local economy. But someone who earns $10k in a side-business might not be able to afford the $3k in incorporation costs just to save $2k in taxes. The more income and wealth you have, the more these transaction costs become worthwhile. I'm going to generally define "tax loopholes" for the purposes of this answer as something where a somewhat arbitrary situation allows for taxes that a layman would consider unfair or unexpected. This often occurs with good intentions but poor legislation - the government tries to provide a benefit to a deserving group or to promote an activity, but ends up allowing another group to take advantage. For example in Canada, there existed until a few years ago tax saving rules about passing on wealth to children at lower tax rates, only when a close family member is near-death [setting up a 'testamentary trust' between a grandparent and a grandchild could in some circumstances allow that trust to be created with additional 'tax brackets', meaning more income would be taxed at a less-than top tax rate before being distributed to the grandchildren]. The rules were put in place with the idea that "oh gee, a family member has died, and the dang ol' family is grieving so hard they can't distribute the wealth to the next generation for a few months on account of all the crying. We should make it so that the estate is taxed like a person, and if they earn only a little income, they have a low tax rate, and they only get taxed at the full rate if they have a lot of income". Seems reasonable enough, but if a family is ready to pass on wealth at the same time as someone is nudging the bucket with their foot, a morbid discussion with your lawyer and accountant could set your children up for life with forever reduced taxes on massive inheritances. In the case of the Panama / Paradise leaks, tax savings are due to all 3 of the above: Those who have massive wealth (and therefore earn the majority of their income from investments instead of employment) can afford the transaction costs associated with taking advantage of specific "tax loopholes". The simplest example of which is just that income earned in a foreign country might have a lower tax rate than income earned domestically. This is often a result of "cracks" in the foreign tax treaties between countries, which exist generally to promote business between countries and prevent double-taxing individuals who need activity in both countries for whatever reason. Take for example the "Apple loophole". Apple has operations around the world. Some activity occurs in low-tax jurisdictions. Apple reports a high percentage of the value of R&D as being associated with those jurisdictions. Those branches in low-tax jurisdictions charge the high-tax branches (such as the US) with fees for use of their valuable research. So much of Apple's income is reported in those foreign jurisdictions. It won't be taxed in the US until Apple "repatriates" the cash back to the US. Until then, the cash sits in the foreign jurisdiction, accruing less tax. This and similar rules can be used by individuals wealthy enough to hold corporations in foreign jurisdictions with low tax rates. How each particular rule / "loophole" works will depend on the nature of a specific case - tax law is complex, and the rules between countries are even more so. These foreign tax loopholes are closing every year. It is getting harder and harder to hide money offshore, and it is getting less and less likely that you will be able to find a country with juuuust the right loopholes for your own offshore wealth. These types of news leaks will only help to expedite those changes.
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Is keeping old credit cards and opening new credit cards with high limits and never using an ideal way to boost credit scores?
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Your plan will work to increase your total credit capacity (good for your credit score) and reduce your utilization (also good). As mentioned, you will need to be careful to use these cards periodically or they will get closed, but it will work. The question is whether this will help you or not. In addition to credit capacity and utilization, your credit score looks at things like These factors may hurt you as you continue to open accounts. You can easily get to the stage where your score is not benefitting much from increased capacity and it is getting hurt a lot by pulls and low average age. BTW you are correct that closing accounts generally hurts your score. It probably reduces average age, may reduce maximum age, reduces your capacity, and increases your utilization.
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How to respond to a customer's demand for payment extension?
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In the event that payment is not made by the due date on the invoice then the transaction is essentially null and void and you can sell the work to another client. For your particular situation I would strongly suggest that you implement a sales contract and agreement of original transfer of work of art for any and all future sales of your original works of art. In this contract you need to either enforce payment in full at time of signing or a deposit at signing with payment in full within (X) amount of days and upon delivery of item. In your sales contract you will want to stipulate a late fee in the event that the client does not pay the balance by the date specified, and a clause that stipulates how long after the due date that you will hold the artwork before the client forfeiting deposit and losing rights to the work. You will also want to specify an amount of time that you provide as a grace period in the event client changes their mind about the purchase, and you can make it zero grace period, making all sales final and upon signing of the agreement the client agrees to the terms and is locked into the sale. In which point if they back out they forfeit all deposits paid. I own a custom web design business and we implement a similar agreement for all works that we create for a client, requiring a 50% deposit in advance of work being started, an additional 25% at time of client accepting the design/layout and the final 25% at delivery of finished product. In the event that a client fails to meet the requirements of the contract for the second or final installment payments the client forfeits all money paid and actually owes us 70% of total quoted project price for wasting our time. We have only had to enforce these stipulations on one client in 5 years! The benefit to you for requiring a deposit if payment is not made in full is that it ensures that the client is serious about purchasing the work because they have put money in the game rather than just their word of wanting to purchase. Think of it like putting earnest money down when you make an offer to buy a house. Hope this helps!
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Is it a bet on price fluctuations and against the house?
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The answer depends on the specific instrument to which you are referring. It is possible to make straight bets that are cash-settled and in which the underlying commodity or instrument will never be bought or sold. It is also possible to have such a contract be settled in the underlying (if the cash value is appropriate, then the cash settlement can be used to purchase the underlying directly, if necessary). Physical delivery was predominant until the last few decades. Most traders, as opposed to hedgers or strategics, are going to prefer cash-settled contracts as opposed to physical delivery. It is possible to make trades with a brokerage firm such that the firm pays if the trader wins the bet. The firm will typically find parties on the other side to even out this bet and leave itself neutral as to the outcome (plus a small premium it charges each side for the cost of making the market). The cost charged to one contracting party should be set by the dealer in relation to prices being charged to parties making the opposite, matching bet (in this way, brokers are following market price, while traders are setting it). Financially, options and contracts can be settled for cash or for the underlying, and they can be made directly with the opposite bettor or with a neutral dealer.
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Is it true that if I work 6 months per year, it is better than to work for 1 calendar year and take a break for 1 year?
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Yes, if you can split your income up over multiple years it will be to your advantage over earning it all in one year. The reasons are as you mentioned, you get to apply multiple deductions/credits/exemptions to the same income. Rather than just 1 standard deduction, you get to deduct 2 standard deductions, you can double the max saved in an IRA, you benefit more from any non-refundable credits etc. This is partly due to the fact that when you are filing your taxes in Year 1, you can't include anything from Year 2 since it hasn't happened yet. It doesn't make sense for the Government to take into account actions that may or may not happen when calculating your tax bill. There are factors where other year profit/loss can affect your tax liability, however as far as I know these are limited to businesses. Look into Loss Carry Forwarded/Back if you want to know more. Regarding the '30% simple rate', I think you are confusing something that is simple to say with something that is simple to implement. Are we going to go change the rules on people who expected their mortgage deduction to continue? There are few ways I can think of that are more sure to cause home prices to plummet than to eliminate the Mortgage Interest Deduction. What about removing Student Loan Interest? Under a 30% 'simple' rate, what tools would the government use to encourage trade in specific areas? Will state income tax deduction also be removed? This is going to punish those in a state with a high income tax more than those in states without income tax. Those are all just 'common' deductions that affect a lot of people, you could easily say 'no' to all of them and just piss off a bunch of people, but what about selling stock though? I paid $100 for the stock and I sold it for $120, do I need to pay $36 tax on that because it is a 'simple' 30% tax rate or are we allowing the cost of goods sold deduction (it's called something else I believe when talking about stocks but it's the same idea?) What about if I travel for work to tutor individuals, can I deduct my mileage expenses? Do I need to pay 30% income tax on my earnings and principal from a Roth IRA? A lot of people have contributed to a Roth with the understanding that withdrawals will be tax free, changing those rules are punishing people for using vehicles intentionally created by the government. Are we going to go around and dismantle all non-profits that subsist entirely on tax-deductible donations? Do I need to pay taxes on the employer's cost of my health insurance? What about 401k's and IRA's? Being true to a 'simple' 30% tax will eliminate all 'benefits' from every job as you would need to pay taxes on the value of the benefits. I should mention that this isn't exactly too crazy, there was a relatively recent IRS publication about businesses needing to withhold taxes from their employees for the cost of company supplied food but I don't know if it was ultimately accepted. At the end of the day, the concept of simplifying the tax law isn't without merit, but realize that the complexities of tax law are there due to the complexities of life. The vast majority of tax laws were written for a reason other than to benefit special interests, and for that reason they cannot easily be ignored.
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When is it better to rent and when is better buy in a certain property market?
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The Motley Fool suggested a good rule of thumb in one of their articles that may be able to help you determine if the market is overheating. Determine the entire cost of rent for a piece of property. So if rent is $300/month, total cost over a year is $3600. Compare that to the cost of buying a similar piece of property by dividing the property price by the rent per year. So if a similar property is $90,000, the ratio would be $90,000/$3600 = 25. If the ratio is < 20, you should consider buying a place. If its > 20, there's a good chance that the market is overheated. This method is clearly not foolproof, but it helps quantify the irrationality of some individuals who think that buying a place is always better than renting. Additionally, Alex B helped me with two additional sources of information for this: Real Estate is local, all the articles here refer to the US housing market. Bankrate says purchase price / annual rate in the US has a long term average of 16.0. Fool says Purchase Price/Monthly Rent: 150 is good buy, 200 starts to get expensive This answer is copy pasted from a similar question (not the same so I did not vote to merge) linked here..
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Why should I choose a business checking account instead of a personal account?
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Some benefits of having a business checking account (versus a personal checking account) are: The first 3 should be pretty easy to determine if they are important to you. #4 is a little more abstract, though I see you have an LLC taxed as a sole proprietorship, and so I'm guessing protecting your personal assets may have been one of the driving reasons you formed the LLC in the first place. If so, "following through" with the business account is advised.
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What to sell when your financial needs change, stocks or bonds?
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The answer may be a compromise... if your goal is to make bonds a larger part of your portfolio, sell both stocks and bonds in a 4:1 ratio. or (3:1 or whatever works for you) Also, just as you dollar-cost-average purchases of securities, you can do the same thing on the way out. Plan your sales and spread them over a period of time, especially if you have mutual funds.
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Is there any US bank that does not charge for incoming wire transfers?
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Schwab High Yield Investor Checking does not charge for incoming wires.
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Why ADP does not accurately withhold state and federal income tax (even if W4 is correct)?
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ADP does not know your full tax situation and while the standard exemption system (actually designed by the IRS not ADP) works fairly well for most people it is an approximation. This system is designed so most people will end up with a small refund while some people will end up owing small amounts. So, while it is possible that ADP has messed up the calculations it is unlikely this is the cause. The most likely cause is that approximation ends ups making you pay less tax during the year than you actually owe. A few people like your friend may end up owing large amounts due to various circumstances. It is always your responsibility to make sure you pay enough tax throughout the year. While this technically means that you need to do your taxes every quarter during the year to make sure you pay the correct tax during the year, for most people this ends up being unnecessary as the approximation works fine. It is possible the exemption system failed your friend, but much more commonly people owe penalties because they put the wrong number of exemptions or had other side income. On a related note, most people in finance would argue that your situation where you owe some money at tax time, but not so much that you have to pay a penalty, is actually the best way to go. Getting a tax refund actually means you paid more tax than you needed to. This is similar to giving an interest-free loan to the government.
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Why trade futures if you have options
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That question makes assumptions that don't hold in general As to why to deal with futures: Well, there's just one contract per maturity date, not a whole chain of contracts (options come at different strike prices). That in turn means that all the liquidity is in that one contract and not scattered across the chain. Then, moreover, it depends what underlying contracts you're talking about. Often, especially when dealing with commodities, there is no option chain on the spot product but only options on the futures contracts. In summary, the question is somewhat bogus. Options and futures evolved historically and independently, and were not meant to be substitutable by one another. So their rights and obligations are just a historical by-product and not their defining feature. I suggest you refine it to a specific asset class.
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I am turning 18 and I am a Student, I need strategies on building great credit soon. Where should I start?
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The details of credit score calculation tend to change periodically, but the fundamentals are mostly consistent. Pay your bills, keep your average account age high, overpay your credit card minimums, and keep your overall debt low. And do soft pulls on your credit report to see what's happening. First, the simplest route: pay all your bills early or on time. Automatic deduction may be useful in this regard, especially for bills with predictable amounts. A corollary to this tip is to never leave an unpaid bill. What often happens to young people is in the course of moving around they leave the final bill unpaid and it gets reported to collections. Make sure you follow up online with all bills, even after canceling the service. Second, average account age and oldest account age matter. Open an account like a credit card and never close it, so you'll have an older account (hopefully a zero-fee card). Try to keep other accounts open rather than closing them (no need to cancel a zero-fee credit card) so your average account age stays higher. A card that works on internal systems (like a gift card) is not going to show up on a credit report; a card that works like any VISA/MC is likely going to show up. The rule of thumb is if they need your SSN to run a credit check for the application, then the card will appear on a credit report. You can pull your credit report to find out if the card is listed (you may have to allow time for lag before the card appears, but I'm not sure how long that might be). Third, a tip for extra credit score is to pay more than the minimum required on credit card bills. You can achieve this by either using your credit card at least once a month or by leaving a small hanging balance each month so there's always something to overpay next month. Credit card reporting will be either: unpaid, underpaid, minimum paid, or overpaid. Minimum payment helps your score and overpayment helps more. If you can use your credit card every month, that will give you something to overpay every month. Otherwise, you can leave a small debt left on the card but still pay over the monthly minimum. However, your total debt load, especially debt carried on your cards, counts against your score; aim for less than 10% of your limit. Finally, of course, is to pull your credit report periodically. You need to know what others are seeing. Since debt load utilization matters, make sure the reported card maximum is correct on your credit report. Talk to your bank or account issuer if the limit is wrong. If a collection appears, then you need to handle it. Often you can negotiate with the collector, but be careful to negotiate how they will report the resolution. You want them to agree to remove any negative information (either in exchange for payment or because of a mistake). Failing that, you want them to mark it paid in full or satisfied in full; letting them notate your score that you only partially paid is what you want to avoid, since it most signals someone with cash flow problems and credit issues. They control their reporting to credit bureaus, so if the person on the phone demurs, ask to speak to their supervisor or someone with negotiating authority. Try to get any agreements in writing. Remember that your total debt load is a factor in your credit score. Home loans and student loans do affect credit score. If you take on a smaller home loan, then it will affect your credit less harshly (and leave you with smaller monthly payments).
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Non-EU student, living in Germany, working for a Swiss company - taxes?
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Finally, I got response from finance center: "It doesn't matter where do you study, what does matter is where you live. So, once you live in Germany, you pay taxes in Germany. And it doesn't matter who you work for." So, there are two options to pay taxes: it's paid by an employer or an employee: If I would work for Swiss company, I need to show how much money I make every month (or year) to Finance Center.
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Assessed value of my house
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I had the same thing happen to my house. I bought it in 2011 for 137,000, which was the same as the FHA appraised value (because FHA won't guarantee a loan for more than their appraiser thinks its worth). January of last year, I get the letter from the tax office and see that my house has been assessed at only 122,000. I was shocked too, until I read a similar document that Phil told you to read. The short of it is, no matter what the tax assessor calls their calculation, it is an assessment. It was mass-produced along with everyone else's in your neighborhood by looking at its specs on paper (acreage, house square footage, age, beds/baths) and by driving by your home to see its general condition. The fact that your lawn may be less well-kept than the last time they drove by could have affected the decision a little. It's very unlikely to have been a major determinant of the assessment. The assessment value affects taxes, and taxes only. It is, in most states, a matter of public record, and so it could be used by a potential buyer to negotiate a lower price. However, everyone in the housing business knows that the assessed value is not the market value, and the buyer's agent will be encouraging their client to make a more realistic bid. This "assessed value" is not an "appraisal value". An appraisal is done by someone actually walking into and through your home, inspecting the general condition inside and out, to try to make a fair evaluation of what the home is actually worth. That number is almost always going to be more than the assessment value, because it takes into account all the amenities of the home; the current fixtures, the well-kept (or recently-replaced) flooring, the energy-efficient HVAC and hot water system, etc etc. It also takes into account recent comparables; what have other houses, with the same general statistics, the same amenities, relatively close in location, sold for recently? That will still generally be different from the true market value of the home. That value is nothing more or less than what a potential buyer will pay to have it at the time you decide to sell it, and that in turn depends 100% on your potential buyers' myriad situations. Someone may lowball even the assessed value because they're looking for a deal and hoping you're desperate; you just reject the offer. Someone may be looking at comparables indicating the house is maybe overpriced by $10k. You can counter and try to come to an agreement. Or, your potential buyer could work five minutes from your house, and be willing to pay at or above your asking price because the next best possibility is another 10 miles away. Since you aren't looking to sell the home, none of this matters, except to determine any escrow payments you might be making towards property taxes. Just keep making your mortgage payment, and don't worry about it. If you really wanted to, you could petition the state for a second opinion, but you think the value should be higher; if they agree with you, they'll raise the assessed value and you'll pay more in taxes. Why in the world would you want to do that?
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What market conditions favor small cap stocks over medium cap stocks?
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I think to answer this question it is best for you to learn more about why people diversify through asset allocation. Look at related questions involving Asset Allocation here. I've asked a couple questions about asset allocation - I think you'll find the top rated answer on this post useful.
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I'm 20 and starting to build up for my mortgage downpayment, where should I put my money for optimal growth?
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The highest growth for an investment has historically been in stocks. Investing in mature companies that offer dividends is great for you since it is compound growth. Many oil and gas companies provide dividends.
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Are there any investment strategies which take advantage of an in-the-money option price that incorporates no “time value”?
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you asked for strategies which use deep in the money options: dividend mispricing can use deep in the money options, basically its an arbitrage play on ex-dividend dates. and any kind of spread can use deep in the money options, depending on how wide you want your spread to be
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Side work and managing finances?
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I have done similar software work. You do not need an LLC to write off business expenses. The income and expenses go on Schedule C of your tax return. It is easy to write off even small expenses such as travel - if you keep records. The income should be reported to you on a 1099 form, filled out by your client, not yourself. For a financial advisor you should find one you can visit with personally and who operates as a "fee-only" advisor. That means they will not try to sell you something that they get a commission on. You might pay a few $hundred per visit. There are taxes that you have to pay (around 15%) due to self-employment income. These taxes are due 4 times a year and paid with an "estimated tax" form. See the IRS web site, and in particular schedule SE. Get yourself educated about this fast and make the estimated tax payments on time so you won't run into penalties at the end of the year.
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Making $100,000 USD per month, no idea what to do with it
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Your #1 problem is the Government both in it's form as a taxation outfit and as a 'law and order' outfit. You'd be very surprised at how fast a bank seizes your bank account in response to a court order. Purchase 100 Mexican 50 Peso Gold (1.2 oz/ea). These coins are cheap (lowest cost to get into) and will not be reportable on sale to taxing authorities. That money is out of the banking system and legal system(s). Do not store them in a bank! You need to find a tax strategist, probably a former IRS agent / CPA type. With the rest remaining money... There's an old saying, Don't fight the Fed. As well as "The trend is your friend". So, the Fed wants all savers fully invested right now (near 0 interest rates). When investing, I find that if you do exactly opposite what you think is the smart thing, that's the best thing. Therefore, it follows: 1) Don't fight the Fed 2) Do opposite of smart 3) Do: Fight the Fed (and stay 100% out of the market and in cash) We're looking like Japan so could remain deflationary for decades to come. Cash is king...
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What is meant by “unexpected expenses” in my 401k plan?
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IANAL, but it sounds like indemnification language. They are saying they have the option to charge expenses to participants if they would like. It should say explicitly (you mention that it does) who the 'default payer' is. Unexpected expenses could be anything that's not in the normal course of business. I know that doesn't help much, but some examples may be plan document restatements or admin expenses from plan failures/corrections. We have language in some of our PFDs that say in the absence of revenue-sharing a participants' share of expenses may be higher. Yes, 'from participant accounts' means they have the authority to deduct from your 401k account.
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Best buying price on stock marketing based on market depth detail (CSE atrad tool)
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When I first started working in finance I was given a rule of thumb to decide which price you will get in the market: "You will always get the worst price for your deal, so when buying you get the higher ask price and when selling you get the lower bid price." I like to think of it in terms of the market as a participant who always buys at the lowest price they can (i.e. buys from you) and sells at the highest price they can. If that weren't true there would be an arbitrage opportunity and free money never exists for long.
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Square reported my credit card transactions as personal income?
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Square is a company. They need to detail as part of their corporate taxes all of their expenses. The money they collected for you, and sent to you, is not income for themselves. Their tax form included the amount of money they sent you, along with either your Social Security Number of corporate tax id. The IRS computers match the information regarding expenses to the information regarding income. In this case the expense listed by Square didn't match-up with a line of your tax forms for that year. The IRS now sees that as unreported income. If you didn't tell them about other expenses you had, they can only assume your expenses were zero. Congratulations you have a business. Unfortunately the Federal, state and local governments now will want to know about your business. You may have to fill out multiple years worth of tax forms and other required forms. Yes, you should getting professional accounting and tax help.
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Could the loan officer deny me even if I have the money as a first time home buyer?
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I’ve been in the mortgage business for nearly 15 years. Your question is sort of multi-faceted and I’m surprised by some of these answers I’ve read! Anyway, I digress. Yes, you can be denied even if you have money for a down payment. One of the BIGGEST factors lenders are now required to take into account when approving mortgages now is a person’s “Ability to Repay.” Whether your traditional mortgages like Conventional, FHA, USDA, or VA loans, or even an “in-house” mortgage from a local bank —either way, the lender MUST be able to verify someone’s ability to repay. Your issue is that you won’t have any verifiable income until May. A couple people have answered correctly in that 1) if you have a firm offer letter that can be verified with the employer, and 2) you can use your education/college to substitute for a two year work history as long as you’re graduating with and working in the same line of work. Some programs require proof of 30 days of pay history once you actually start earning paychecks; some programs will use the offer letter as long as you will start earning paychecks within a certain number of days after the note date (basically when the payments start). Also I’m making the assumption that there is some sort of credit history that can be verified. Most lenders want at least a couple of accounts reporting a history just to show good use of credit and showing that you can manage your finances over a longer period of time. Just about every lender has some sort of minimum FICO score requirement. I hope this helps. If you have questions, just reply in a comment.
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Pay down the student loan, or buy the car with cash?
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Here's another way to look at this that might make the decision easier: Looking at it this way you can turn this into a financial arbitrage opportunity, returning 2.5% compared to paying cash for the vehicle and carrying the student loan. Of course you need to take other factors into account as well, such as your need for liquidity and credit. I hope this helps!
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How does AMT/state taxes work for stock options in California?
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Does this technically mean that she has to pay AMT on $400,000? Yes. Well, not exactly 400,000. She paid $1 per share, so 390,000. And if so, is %28 the AMT for this sum? (0.28 * $400,000 = $112,000)? Or does she have to include her salary on top of that before calculating AMT? (Suppose in the fake example that her salary is $100,000 after 401k). All her income is included in calculating the AMT, minus the AMT exemption amount. The difference between the regular calculated tax and the calculated AMT is then added to the regular tax. Note that some deductions allowed for the regular calculation are not allowed for the AMT calculation. How does California state tax come into play for this? California has its own AMT rules, and in California any stock option exercise is subject to AMT, unless you sell the stock in the same year. Here's a nice and easy to understand write up on the issue from the FTB. When would she have to pay the taxes for this huge AMT? Tax is due when income is received (i.e.: when you exercise the options). However, most people don't actually pay the tax then, but rather discover the huge tax liability when they prepare to submit their tax return on April 15th. To avoid that, I'd suggest trying to estimate the tax and adjust your withholding using form W4 so that by the end of the year you have enough withheld. Suppose in the worst case, the company goes completely under. Does she get her massive amounts of tax back? Or if it's tax credit, where can I find more info on this? That would be capital loss, and only up to $3K a year of capital loss can be deducted from the general income. So it will continue offsetting other capital gains or being deducted $3K a year until it all clears out. Is there any way to avoid this tax? (Can she file an 83b election?) You asked and answered. Yes, filing 83(b) election is the way to go to avoid this situation. This should be done within 30 days of the grant, and submitted to the IRS, and a copy attached to the tax return of the grant year. However, if you're considering exercise - that ship has likely sailed a long time ago. Any advice for Little Susie on how she can even afford to pay that much tax on something she can't even sell anytime soon? Don't exercise the options? Should she take out a loan? (e.g. I've heard that in the extreme case, you can find angel investors who are willing to pay all your taxes/strike price, but want 50% of your equity? I've also heard that you can sell your illiquid shares on SecondMarket?) Is she likely to get audited by IRS for pulling something like this? You can take a loan secured by shares you own, there's nothing illegal in it. If you transfer your shares - the IRS only cares about the taxes being paid, however that may be illegal depending on the terms and the conditions of the grant. You'll need to talk to a lawyer about your situation. I suggest talking to a licensed tax adviser (EA/CPA licensed in your State) about the specifics concerning your situation.
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Does dollar cost averaging really work?
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If you define dollar cost cost averaging as investing a specific dollar amount over a certain fixed time frame then it does not work statistically better than any other strategy for getting that money in the market. (IE Aunt Ruth wants to invest $60,000 in the stock market and does it $5000 a month for a year.) It will work better on some markets and worse on others, but on average it won't be any better. Dollar cost averaging of this form is effectively a bet that gains will occur at the end of the time period rather than the beginning, sometimes this bet will pay off, other times it won't. A regular investment contribution of what you can afford over an indefinite time period (IE 401k contribution) is NOT Dollar Cost Averaging but it is an effective investment strategy.
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