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Need a loan to buy property in India. What are my options? | There are P2P lending sites like prosper.com and lendingclub.com (both have 35K limit) where you can take out a personal loan. Don't expect the rate to be nowhere close to a secured loan like a mortgage or a car loan. |
How to calculate S corporation distribution from past K-1s? | Phil's answer is correct. Just to add to his response: Distributions are not taxable events -- you already paid your taxes, so you can take out $50k or $52k and the IRS is not concerned. You can simply write yourself a check for any amount you choose! To answer your specific question: to match your K1 losses and profit exactly, you could take out $50k. But that might leave the business strapped for cash. One way to decide how much to take out is to use your balance sheet. Look at your retained earnings (or just look at the business bank account balance), subtract however much cash you think you need to keep on hand for operations, and write yourself a check for the rest. |
How to hedge against specific asset classes at low cost | I wonder in this case if it might be easier to look for an emerging markets fund that excludes china, and just shift into that. In years past I know there were a variety of 'Asian tiger' funds that excluded Japan for much the same reason, so these days it would not surprise me if there were similar emerging markets funds that excluded China. I can find some inverse ETF's that basically short the emerging markets as a whole, but not one that does just china. (then again I only spent a little time looking) |
Employer skipped payments, should I allow them to defer payment until Jan 2017? | TL;DR: The difference is $230. Just for fun, and to illustrate how brackets work, let's look at the differences you could see from changing when you're paid based on the tax bracket information that Ben Miller provided. If you're paid $87,780 each year, then each year you'll pay $17,716 for a total of $35,432: $5,183 + $12,532 (25% of $50,130 (the amount over $37,650)) If you were paid nothing one year and then double salary ($175,560) the next, you'd pay $0 the first year and $42,193 the next: $18,558 + $23,634 (28% of $84,410 (the amount over $91,150)) So the maximum difference you'd see from shifting when you're paid is $6,761 total, $3,380 per year, or about 4% of your average annual salary. In your particular case, you'd either be paying $35,432 total, or $14,948 followed by $20,714 for $35,662 total, a difference of $230 total, $115 per year, less than 1% of average annual salary: $5,183 + $9,765 (25% of $39,060 (the amount $87,780 - $11,070 is over $37,650)) $18,558 + $2,156 (28% of $7,700 (the amount $87,780 + $11,070 is over $91,150)) |
Do altcoin trades count as like-kind exchanges? (Deferred capital gains tax) | Just a thought because this is a really good question: Would the buying and selling of blockchain based digital currency, using other blockchain based digital currencies, be subject to like kind treatment and exempt from capital gains until exchanged for a non-blockchain based good or service (or national currency) Suppose someone sells 1 bitcoin to buy 100 monero. Monero's price and bitcoin's price then change to where the 100 monero are 3 bitcoins. The person gets their bitcoin back and has 66.67 monero remaining. This scenario could be: Suppose someone sells 1 bitcoin at $1000 to buy 100 monero at $10. Bitcoin crashes 80% to $200 while monero crashes to only $6 per monero. $6 times 100 is $600 and if the person gets their bitcoin back (at $200 per bitcoi), they still lost money when measured in US Dollars if they move that bitcoin back to US dollars. In reading the IRS on bitcoin, they only care about the US dollar value of bitcoin or monero and in this example, the US dollar value is less. The person may have more bitcoins, but they still lost money if they sell. |
Should I pay more into company pension, or is there a better way to save? | In the UK you have an allowance of £40,000 per annum for tax relief into a pension. This amount includes both your and your employer's contributions. If you earn more than £150,000 per annum this allowance starts to reduce and if you earn less than the allowance, your allowance is limited to what you earn. You can also carry over unused allowance from up to 3 years previously. If you stick within this allowance you won't pay tax on your pension contributions, if you go over the excess will be subject to tax. Salary exchange normally lets you avoid the National Insurance value of your contribution being taxed. If you paid your own money into your pension (without going through salary exchange), your contributions would have the 20% basic rate of tax credited to them and if you're a higher rate taxpayer you could reclaim the difference between the basic rate of tax and the higher rate of tax you pay but the National Insurance you've paid on your own money would not be reclaimable. You can't get the money back you've paid into your pension till you are are 58 (given that you are 27 now), the minimum age has risen from its historic 55 for your age group. That's the pension trade off, you forgo tax now in the expectation that, once retired, you will be paying tax at a lower rate (because your income will be lower and you are much less likely to be subject to higher rate taxation) in return for locking in your money till you're older. Your pension income will be subject to tax when you eventually take it. There are other options such as ISAs which have lower annual limits (£20,000 currently) and on which your contributions do not attract tax relief, but which are not taxed as income when you eventually spend them. ISAs and pensions are not mutually exclusive so if you have the money, you can do both. It's up to you to determine what mix of savings will be appropriate to generate income for your eventual retirement. If you are living in some other country when you retire your pension will be paid net of UK tax. You might then be able to claim (or pay) any difference between that and your local tax rate depending on what agreement exists between the UK government and the other country's government. |
Is there any reason not to put a 35% down payment on a car? | I suggest you buy a more reasonably priced car and keep saving to have the full amount for the car you really want in the future. If you can avoid getting loans it helps a lot in you financial situation. |
What did John Templeton mean when he said that the four most dangerous words in investing are: ‘this time it’s different'? | This refers to the faulty idea that the stock market will behave differently than it has in the past. For example, in the late 1990s, internet stocks rose to ridiculous heights in price, to be followed soon after with the Dot-Com Bubble crash. In the future, it's likely that there will be another such bubble with another hot stock - we just don't know what kind. Saying that "this time it will be different" could mean that you expect this bubble not to burst when, historically, that is never the case. |
What does “profits to the shareholders jumped to 15 cents a share” mean? | It's a way to help normalize the meaning of the earnings report. Some companies like Google have a small number of publicly traded shares (322 Million). Others like Microsoft have much larger numbers of shares (8.3 Billion). The meaning depends on the stock. If it's a utility company that doesn't really grow, you don't want to see lots of changes -- the earnings per share should be stable. If it's a growth company, earnings should be growing quickly, and flat growth means that the stock is probably going down, especially if slow growth wasn't expected. |
How to reconcile these contradictory statements about the effect of volume on stock price? | These statements aren't necessarily contradictory. In the first case, investors are bearish because they anticipate selling in the future (because all the interested buyers have bought, so all that remains in the short run are people willing to sell and therefore drive down the price). In the second case, the trend is strengthened because the increase in volume indicates that the price movement interested a lot of traders. The trend could be bullish or bearish. The statements aren't contradictory because the second case could very well lead to the first case. For example, if an increase in price is coupled with an increase in volume, this could indicate that the positive trend is strengthening (second case). Traders are becoming more interested in the price move, so they buy. However, once all of the traders who are willing to enter the market long do so, we're in the first case. Investors realize that all of the traders who were interested in buying have bought, so they become bearish because they expect selling to start soon. |
How do I go about finding an honest & ethical financial advisor? | Most individuals do not need a personal financial advisor. If you are soon entering the world of work, your discretionary investments should be focused on index funds that you commit to over the long run. Indeed, the best advice I would give to anyone just starting out would be: For most average young workers, a financial advisor will just give you some version of the information above, but will change you for it. I would not recommend a financial advisor as a necessity until you have seriously complicated taxes. Your taxes will not be complicated. Save your money. |
US Citizen Buying Rental Property in Canada | You've asked a number of questions. I can answer a few. I've quoted your question before each answer. What are the ins and outs of a foreigner like myself buying rental property in Canada? This is a pretty broad question which can address location, finances, basic suggestions etc. Here's some things to consider: Provincial considerations: Some ins and outs will depend on what province you are considering and what area in that Province. If you plan on owning in Montreal, for example, that's in the province of Quebec and that means you (or someone) will need to be able to operate in the French language. There are other things that might be different from province to province. See stat info below. Canadian vs. US Dollar: Now might be a great time to buy property in Canada since the Canada dollar is weak right now. To give you an idea, at a non-cash rate of 1.2846, a little over $76,000 US will get you over $100k Canadian. That's using the currency converter at rbcroyalbank.com. Taxes for non-resident rental property owners: According to the T4144 Income Tax Guide for Electing Under Section 216 – 2015: "When you receive rental income from real or immovable property in Canada, the payer, such as the tenant or a property manager, has to withhold non-resident tax at the rate of 25% on the gross rental income paid or credited to you. The payer has to pay us the tax on or before the 15th day of the month following the month the rental income is paid or credited to you." If you prefer to send a separate Canadian tax return, you can choose to elect under section 216 of the Income Tax Act. A benefit of this way is that "electing under section 216 allows you to pay tax on your net Canadian-source rental income instead of on the gross amount. If the non-resident tax withheld by the payer is more than the amount of tax payable calculated on your section 216 return, [they] will refund the excess to you." You can find this guide at Canada Revenue's site: http://www.cra-arc.gc.ca/E/pub/tg/t4144/README.html Stats: A good place for stats is the Canada Mortgage and Housing Corporation (CMHC). So, if you are interesting in vacancy rates for example, you can see a table that will show you that the vacancy rate in Ontario is 2.3% and in British Columbia it's 1.5%. However, in New Brunswick it's 8%. The rate for metropolitan areas across Canada is 2.8%. If you want to see or download this table showing the vacancy rates by province and also by metropolitan areas, go to the Canada Mortgage and Housing Corporation site http://www.cmhc.ca/housingmarketinformation/. You can get all sorts of housing information, reports and market information there. I've done well with Condos/Town-homes and would be interested in the same thing over there. Is it pretty much all the same? See the stat site mentioned above to get market info about condos, etc. What are the down payment requirements? For non-owner occupied properties, the down payment is at least 20%. Update in response to comments about being double taxed: Regarding being taxed on income received from the property, if you claim the foreign tax credit you will not be double taxed. According to the IRS, "The foreign tax credit intends to reduce the double tax burden that would otherwise arise when foreign source income is taxed by both the United States and the foreign country from which the income is derived." (from IRS Topic 856 - Foreign Tax Credit) About property taxes: From my understanding, these would not be claimed for the foreign tax credit but can be deducted as business expenses. There are various exceptions and stipulations based on your circumstance, so you need to read Publication 856 - Foreign Tax Credit for Individuals. Here's an excerpt: "In most cases, only foreign income taxes qualify for the foreign tax credit. Other taxes, such as foreign real and personal property taxes, do not qualify. But you may be able to deduct these other taxes even if you claim the foreign tax credit for foreign income taxes. In most cases, you can deduct these other taxes only if they are expenses incurred in a trade or business or in the production of income. However, you can deduct foreign real property taxes that are not trade or business expenses as an itemized deduction on Schedule A (Form 1040)." Disclaimers: Sources: IRS Topic 514 Foreign Tax Credit and Publication 856 Foreign Tax Credit for Individuals |
Will getting a second credit card help my credit rating? | This very much depends how you use that second line of credit and what your current credit is. There are of course many more combinations buy you can probably infer the impact based on these cases. Your credit score is based on your likely hood of being profitable to a creditor should they issue you credit. This is based on your history of your ability to manage your credit. Having more credit and managing it well shows that you have a history of being responsible with greater sums of money available. If you use the card responsibly now then you are more likely to continue that trend than someone with a history of irresponsibility. Having a line but not using it is not a good thing. It costs the creditor money for you to have an account. If you never use that account then you are not showing that you can use the account responsibly so if you are just going to throw the card in a safe and never access it then you are better off not getting the card in the first place. |
Does this plan make any sense for early 20s investments? | I think it's great idea. Many large brokerages give customers access to a pretty sizable list of zero commission, zero load funds. In this list of funds will certainly be an S&P 500 index. So you can open your account for free, deposit your $1,000 for free and invest it in an S&P index for no cost. You'll pay a very negligible amount in annual expense fees and you'll owe taxes on your gain if you have to use the money. I don't follow the school of thought that all investment money should be in retirement account jail. But I think if you have your spending under control, you have your other finances in order and just want to place money somewhere, you're on the right track with this idea. |
Taking Losses To Save On Tax | Tax questions require that you specify a jurisdiction. Assuming that this is the US, you owe Federal income tax (at the special long-term capital gains tax rate) on the net long-term capital gains (total long-term capital gains minus total long-term capital losses) and so, yes, if these two were your only transactions involving long-term holdings, you would pay long-term capital gains tax on $3000-$50 = $2950. Many States in the US don't tax long-term capital gains at special rates the way the Federal Government does, but you still pay taxes on the net long-term capital gains. I suspect that other countries have similar rules. |
When is Cash Value Life Insurance a good or bad idea? | Here's what I'd consider: |
Huge return on investment, I feel like im doing the math wrong | Your math is correct. These kind of returns are possible in the capital markets. (By the way, Google Finance shows something completely different for $CANV than my trading console in ThinkorSwim, ToS shows a high of $201, but I believe there may have been some reverse splits that are not accurately reflected in either of these charts) The problems with this strategy are liquidity and timing. Let's talk about liquidity, because that is a greater factor here than the random psychological factors that would have affected you LONG LONG before your $1,000 allowance was worth a million dollars. If you bought $1000 worth of this stock at $.05 share, this would have been 20,000 shares. The week of October 11th, 2011, during the ENTIRE WEEK only 5,000 shares were traded. From this alone, you can see that it would have been impossible for you to even acquire 20,000 shares, for yourself at $.05 because there was nobody to sell them to you. We can't even look at the next week, because there WERE NO TRADES WHATSOEVER, so we have to skip all the way to November 11th, where indeed over 30,000 shares were traded. But this pushed the price all the way up to $2.00, again, there was no way you could have gotten 20,000 shares at $.05 So now, lets talk about liquidation of your shares. After several other highs and lows in the $20s and $30s, are you telling me that after holding this stock for 2 years you WOULDN'T have taken a $500,000 profit at $25.00 ? We are talking about someone that is investing with $1,000 here. I have my doubts that there was no time between October 2011 and January 2014 that you didn't think "hm this extra $100,000 would be really useful right now.. sell!" Lets say you actually held your $1,000 to $85.55 there were EXACTLY TWO DAYS where that was the top of the market, and in those two days the volume was ~24,000 shares one day and ~11,000 shares the next day. This is BARELY enough time for you to sell your shares, because you would have been the majority of the volume, most likely QUADRUPLING the sell side quotes. As soon as the market saw your sell order there would be a massive selloff of people trying to sell before you do, because they could barely get their shares filled (not enough buyers) let alone someone with five times the amount of shares that day. Yes, you could have made a lot of money. Doing that simplistic math does not tell you the whole story. |
What is considered a business expense on a business trip? | The IRS Guidance pertaining to the subject. In general the best I can say is your business expense may be deductible. But it depends on the circumstances and what it is you want to deduct. Travel Taxpayers who travel away from home on business may deduct related expenses, including the cost of reaching their destination, the cost of lodging and meals and other ordinary and necessary expenses. Taxpayers are considered “traveling away from home” if their duties require them to be away from home substantially longer than an ordinary day’s work and they need to sleep or rest to meet the demands of their work. The actual cost of meals and incidental expenses may be deducted or the taxpayer may use a standard meal allowance and reduced record keeping requirements. Regardless of the method used, meal deductions are generally limited to 50 percent as stated earlier. Only actual costs for lodging may be claimed as an expense and receipts must be kept for documentation. Expenses must be reasonable and appropriate; deductions for extravagant expenses are not allowable. More information is available in Publication 463, Travel, Entertainment, Gift, and Car Expenses. Entertainment Expenses for entertaining clients, customers or employees may be deducted if they are both ordinary and necessary and meet one of the following tests: Directly-related test: The main purpose of the entertainment activity is the conduct of business, business was actually conducted during the activity and the taxpayer had more than a general expectation of getting income or some other specific business benefit at some future time. Associated test: The entertainment was associated with the active conduct of the taxpayer’s trade or business and occurred directly before or after a substantial business discussion. Publication 463 provides more extensive explanation of these tests as well as other limitations and requirements for deducting entertainment expenses. Gifts Taxpayers may deduct some or all of the cost of gifts given in the course of their trade or business. In general, the deduction is limited to $25 for gifts given directly or indirectly to any one person during the tax year. More discussion of the rules and limitations can be found in Publication 463. If your LLC reimburses you for expenses outside of this guidance it should be treated as Income for tax purposes. Edit for Meal Expenses: Amount of standard meal allowance. The standard meal allowance is the federal M&IE rate. For travel in 2010, the rate for most small localities in the United States is $46 a day. Source IRS P463 Alternately you could reimburse at a per diem rate |
Ways to get individual securities from ETF's | ETFs are legally required to publicly disclose their positions at every point in time. The reason for this is that for an ETF to issue shares of ETF they do NOT take cash in exchange but underlying securities - this is called a creation unit. So people need to know which shares to deliver to the fund to get a share of ETF in exchange. This is never done by retail clients, however, but by nominated market makers. Retail persons will normally trade shares only in the secondary market (ie. on a stock exchange), which does not require new shares of the ETF to be issued. However, they do not normally make it easy to find this information in a digestible way, and each ETF does it their own way. So typically services that offer this information are payable (as somebody has to scrape the information from a variety of sources or incentivise ETF providers to send it to them). If you have access to a Bloomberg terminal, this information is available from there. Otherwise there are paid for services that offer it. Searching on Google for ETF constituent data, I found two companies that offer it: See if you can find what you need there. Good luck. (etfdb even has a stock exposure tool freely available that allows you to see which ETFs have large exposure to a stock of your choosing, see here: http://etfdb.com/tool/etf-stock-exposure-tool/). Since this data is in a table format you could easily download it automatically using table parsing tools for your chosen programming language. PS: Don't bother with underlying index constituents, they are NOT required to be made public and index providers will normally charge handsomely for this so normally only institutional investors will have this information. |
My friend wants to put my name down for a house he's buying. What risks would I be taking? | Both of you sit down with a lawyer who practices in real estate and foreclosures, and hash out every single possibility of what could conceivably go wrong, with nothing out of bounds. Come up with a reasonable and fair plan for resolving each situation, that you are willing to commit to, life and breath, for real, no exit. Put all of it into a legal commitment between you two. However this is a fearless, searching and even ruthless contemplation, requiring a level of intimacy and personal responsibility you may not be comfortable with. and there's absolutely no room for dancing around unspoken questions. So in essence, it puts the hardest stuff up-front. If you put that much thought and honesty into it, you'll probably be OK. But you probably won't want to be that honest, or won't want to do the deal after you do. |
Question about Tax Information from a Prospectus | At the end of each calendar year the mutual fund company will send you a 1099 form. It will tell you and the IRS what your account earned. You will see boxes for: You will end up paying taxes on these, unless the fund is part of a 401K or IRA. These taxes will be due even if you never sold any shares. They are due even if it was a bad year and the value of your account went down. Most if not all states will levy an income tax yon your dividends and capital gains each year. When you sell your shares you may also owe income taxes if you made a profit. The actual taxes due is a more complex calculation due to long term vs short term, and what other gains or losses you have. Partial sales also take into account which shares are sold. |
Typical return for an IRA? How can I assess if my returns were decent? | To me it looks pretty good (10% per year is a pretty good return). Lagging behind the indexes is normal, it is hard to beat the indexes over a long period of time, the longer the period - the lesser the chances to succeed. However, half a year is a relatively short period of time, and you should check your investments a little bit deeper. I'm assuming you're not invested in one thing, so you should check per investment, how it is performing. If you have funds - check each fund against the relevant index for that fund, if you have stocks - check against the relevant industry indexes, etc. Also, check the fees you pay to each fund and the plan, they come out of your pocket, lowering the return. |
Does home equity grow with the investment put into the house? | If I have a house that its market value went from $100k to $140k can I get HELOC $40K? Maybe - the amount that you can borrow depends on the market value of the house, so if you already have $100k borrowed against it, it will be tough to borrow another $40k without paying a higher interest rate, since there is a real risk that the value will decrease and you will be underwater. Can I again ask for HELOC after I finish the renovation in order to do more renovation and maybe try to end up renovating the house so its value raises up to $500k? I doubt you can just "renovate" a house and increase its market value from $140k to $500K. Much of a house's value is determined by its location, and you can quickly outgrow a neighborhood. If you put $360k in improvements in a neighborhood where other homes are selling for $140k you will not realize nearly that amount in actual market value. People that buy $500k houses generally want to be in an area where other homes are worth around the same amount. If you want to to a major renovation (such as an addition) I would instead shop around for a Home Improvement Loan. The main difference is that you can use the expected value of the house after improvements to determine the loan balance, instead of using the current value. Once the renovations are complete, you roll it and the existing mortgage into a new mortgage, which will likely be cheaper than a mortgage + HELOC. The problem is that the cost of the improvements is generally more than the increase in market value. It also helps you make a wise decision, versus taking out a $40k HELOC and spending it all on renovations, only to find out that the increase in market value is only $10k and you're now underwater. So in your case, talk to a contractor to plan out what you want to do, which will tell you how much it will cost. Then talk to a realtor to determine what the market value with those improvements will be, which will tell you how much you can borrow. It's highly likely that you will need to pay some out-of-pocket to make up the difference, but it depends on what the improvements are and what comparable homes sell for. |
UK: Personal finance book for a twenty-something | I would always recommend the intelligent investor by Benjamin Graham the mentor of warren buffet once you have a basic knowledge ie what is a share bond guilt etc In terms of pure investment the UK is fairly similar the major difference is the simpler tax structure, ISA allowance and the more generous CGT regime. |
What can cause rent prices to fall? | In the US, the government effectively sets a price floor for rents with a concept called "prevailing rent" for government subsidy. Even the crappiest, minimally compliant hovel is ultimately worth whatever the government will issue housing vouchers for. Rent can and does fluctuate for the higher end of the market. Basically in most places the available, cheap credit has a negative impact on rent prices, and tighter, costlier credit increases demand and rents. Local economic events have an impact too. If the company closes in a company town, people leave. |
Can I Accept Gold? | Yes. But the question is do you want to have gold? If you are going to buy gold anyway, and if you can get a good conversion rate between USD:gold, then why not? If you are looking to use your earnings on things that you cannot buy using gold, then I'd recommend you take USD instead. Have fun! |
Advantage of credit union or local community bank over larger nationwide banks such as BOA, Chase, etc.? | Fees mostly. BOA, for example, just announced $5/month for for all debit cards. Chase has foreign transaction fees, mostly hidden. BOA once famously raised interest rates on credit card holders to 28%, legally. Also, some people do not like patronizing a bank with CEOs that bankrupt the company and then get multi-million dollar golden parachutes. Finally some people have a problem with banks or institutions that suspend accounts based on political or unproven legal proceedings (ala Wikileaks and BOA). Credit unions are less like to be involved in this sort of activity since they are not privately traded, and as such they are not ruled by shareholders who demand bottom line results at all costs. |
Why should we expect stocks to go up in the long term? | The last 300 years of civilization have been amazingly atypical. We have experienced industrial revolution after industrial revolution. Economic revolutions that would have changed the world in 1000 AD show up as noise. Coal, Canal, Rail, Trade, Electricity, Refrigeration, Oil, Gas, Nuclear, Assembly Line, Vacuum Tube, Mass Education, Transistor, Integrated Circuit, Nano-tech, Antibiotics, Slaying of absolute Poverty, Democratic, Feminism, Superhighway, Automobile, Airplane, and on and on and on. A cascade of miracles and world-shaking events that have intertwined and together generated a many century long economic singularity that has upended the entire world and generated today's world. The question you should ask, is tomorrow going to be like today? And the answer is yes; in weather, and in economics, the most likely bet bet is always "things keep on going like they have in the short term". But next week? Next month? That is often not much like today. There is reason to believe that the yield on the above revolutions will continue to propel the economy forward, and that there are multiple promising new revolutions on the horizon. But barring that kind of world-shaking revolution, you are not going to maintain a 5% real return on investment over another centuries for the stock market. The value of investments has to go up by a factor of over 100 in order for that to happen, and the US stock market is already close to 20 trillion dollars. For it to have a market cap of 2 quadrillion dollars the world economy will have to be much larger than it is today. And to be that much larger, the world would have to be a much stranger place that values very different things. We are currently roughly a K-type 0.72 civilization. A simple linear expansion of our power of 100x brings us up to K-type 0.92, which is going to cook the planet from waste heat (not from CO2, but just from the waste heat of the energy it uses!) Efficiency can mitigate this, but only to a degree. 100x more efficient technology is going to less believable than a beanstalk and space colonies. If you believe that the stock market is going to continue to grow at 5%/year for the next century, start investing in really out-there technologies. Gene editing, virtual and augmented reality, space beanstalks and private lift, miraculously cheap energy storage, etc. Because simply refining the technology of today won't get us there. Modern industrial civilization has been a miracle factory. That is what pulled off that growth rate. If the miracles stop coming, so does the growth. There is a road to it. It would involve clean energy, mass personal automation and friendly (not smarter than human) AI, and the entire world lifted up to the standard of living of the top 3% of the USA on average. But it is far from guaranteed. |
What expenses do most people not prepare for that turn into “emergencies” but are not covered by an Emergency Fund? | While it is true that homeowners insurance will cover emergencies, it is very important to check and make sure that your policy is covering everything that it needs to. A great example is what happened to all of those without flood insurance in Tennessee last year. You may opt not to get additional coverage, but then you should make sure that you are setting aside funds for such a catastrophe. |
Why do 10 year-old luxury cars lose so much value? | They are overpriced to begin with. One reason is the fact that they are luxury cars. A second, related reason, is that they tend to push the technology envelope. All cars depreciate drastically the minute they are driven off the lot. This a good argument for buying a car that is 1-2 years old. The higher you are, the more you can fall. Repairs and maintenance are typically still expensive on these cars, due to relative rarity and the lack of necessary expertise. Here is where that advanced technology bites you. This is a reason that a 5 year old Civic may be worth more than than a 10 year old Benz. It may simply not be worth the hassle of maintaining/repairing a luxury car. This is especially true for an aging luxury car. There are some people that only buy domestic, precisely because of the maintenance costs. Also, a 10 year old car is still a 10 year old car, regardless of the make. (There are a few notable exceptions, like the NSX.) Hondas and Toyotas have a great reputation for reliability and (long-term) total cost of ownership. "Better" is a subjective issue, that depends on a variety of variables. A Civic is certainly not better in terms of technology, comfort, etc. But, it is likely better in terms of maintenance, reliability, etc. Which "better" you focus on, is up to you. |
What exactly can a financial advisor do for me, and is it worth the money? | A financial planner can help with investments, insurance, estate planning, budgeting, retirement planning, saving for college, tax planning/prep, and other money topics. One way to get a sense is to look at this Certified Financial Planner topic list. Another idea is to look at this book (my favorite I've read) which covers roughly a similar topic list in a concise form: http://www.amazon.com/Smart-Simple-Financial-Strategies-People/dp/0743269942 It could not hurt at all to read that before deciding to visit a planner, so you have baseline knowledge. By the way, look for the CFP certification which is a generalist certification. A CFP might also have a deeper cert in certain topics or connect you with someone who does. For example: You really want a generalist (CFP) who may have an additional credential as well. The idea is to holistically look at what you're trying to accomplish and all finance-related areas. Especially because there may be tradeoffs. The CFP would then refer you to or work with lawyers, accountants, etc. Importantly, some advisors are fiduciaries (must act in your interests) and some are not. In particular many stockbrokers are neither qualified planners (no CFP or equivalent) nor are they fiduciaries. Stay away. There are several models for paying a financial planner, including: There's an organization called NAPFA (napfa.org) for fiduciary non-commission-based planners. Membership there is a good thing to look for since it's a third party that defines what fee-only means and requires the no-commissions/fiduciary standard. Finally, the alternative I ended up choosing was to just take the CFP course myself. You can do it online via correspondence course, it costs about the same as 1 year of professional advice. I also took the exam, just to be sure I learned the stuff. This is the "extreme DIY" approach but it is cheaper over time and you know you are not going to defraud yourself. You still might do things that are counterproductive and not in your interests, but you know that already probably ;-) Anyway I think it's equivalent to about a quarter's worth of work at a decent college, or so. There are about 6 textbooks to dig through. You won't be an experienced expert at the end, but you'll know a lot. To get an actual CFP cert, you need 3 years experience on top of the courses and the exam - I haven't done that, just the book learning. Someone who puts "CFP" after their name will have the 3 years on top of the training. Some editorial: many planners emphasize investing, and many people looking for planners (or books on finance) emphasize investing. This is a big mistake, in my view. Investing is more or less a commodity and you just need someone who won't screw it up, overcharge, and/or lose your money on something idiotic or inappropriate. Some people are in plain-bad and inappropriate investments, don't get me wrong. But once you fix that and just get into anything decent, your biggest planning concerns are probably elsewhere. On investments, I'd look for a planner to just get you out of overpriced annuities and expensive mutual funds you may have been sold (anything you were sold by a salesperson is probably crap). And look for them to help you decide how much to invest, and how much in stocks vs. bonds. Those are the most important investment decisions. |
Is compounding interest on investments a myth? | Compound growth isn't a myth, it just takes patience to experience. A 10% annual return will double the investment not in 10 years, but just over 7. Even though a mortgage claims to use simple interest, if your loan is 5% and there's 14 years to go, $100 extra principal will knock off $200 from the final payment. The same laws of compounding and Rule of 72 are at play. |
Funneling money from a Traditional IRA to a Roth IRA using Options: Is my method possible and tax legal? | I am not a lawyer, but I can't think of a reason this is illegal (something that would be illegal would be to "trade with yourself" across the accounts to try to manipulate stock or option prices). I don't think you're "funneling," you're doing "asset location" which is a standard tax planning strategy. http://news.morningstar.com/articlenet/article.aspx?id=154126&t1=1303874170 discusses asset location. I'd be more concerned about whether it makes sense. |
How useful is the PEG Ratio for large cap stocks? | It is not so useful because you are applying it to large capital. Think about Theory of Investment Value. It says that you must find undervalued stocks with whatever ratios and metrics. Now think about the reality of a company. For example, if you are waiting KO (The Coca-Cola Company) to be undervalued for buying it, it might be a bad idea because KO is already an international well known company and KO sells its product almost everywhere...so there are not too many opportunities for growth. Even if KO ratios and metrics says it's a good time to buy because it's undervalued, people might not invest on it because KO doesn't have the same potential to grow as 10 years ago. The best chance to grow is demographics. You are better off either buying ETFs monthly for many years (10 minimum) OR find small-cap and mid-cap companies that have the potential to grow plus their ratios indicate they might be undervalued. If you want your investment to work remember this: stock price growth is nothing more than You might ask yourself. What is your investment profile? Agressive? Speculative? Income? Dividends? Capital preservation? If you want something not too risky: ETFs. And not waste too much time. If you want to get more returns, you have to take more risks: find small-cap and mid-companies that are worth. I hope I helped you! |
Should I worry too much about saving my 20% down before buying my first house? | The only problem that I see is that by not giving the 20% right away, you might need to pay PMI for a few months. In addition, in the case of conventional loans, I heard that banks will not remove the PMI after reaching 80% LTV without doing an appraisal. In order to be removed automatically, you need to reach 78% LTV. Finally, I think you can get a better interest by giving 20% down, and you can get a conventional loan instead of a FHA loan, which offers the option to avoid the PMI altogether (on FHA, you have two PMIs: one upfront and one monthly, and the monthly one is for the life of the loan if you give less than 10%). |
How does the Pension system work in Poland? | littleadv's answer gives a concise summary of the system as it stands now, but much more changed than just the portion of the mandatory contribution that was diverted to the private plan. In broad terms, the balances of your accounts and your future benefit won't change. It's only the source of these benefits that's changing. The Bloomberg article describes the changes this way: The state will take over the amount of bonds that pension funds held as of end of Sept. 3 and turn them into pension liabilities in the state-run social security system... The state will assume control of 51.5 percent of pension-fund assets, including bonds guaranteed by the government and “other non-stock assets” After the change, Polish workers that held bonds in the private portion of their retirement portfolios will instead have more payments from the state-run pension system. The balances of your retirement portfolio and your future benefits shouldn't change, but the reality may depend on how the state pension system is managed and any future changes the government implements. The effect this change will have on future benefits isn't clear, because the change may simply delay the problem of high levels of outstanding sovereign debt, not solve it. The government stated that because increasing numbers of workers invested their money in private pension funds, less money went into the government's fund, which forced them to issue sovereign debt in order to cover the shortfall in their current pension liabilities. The government's recent cancellation of government bonds in the hands of private pensions will decrease their overall outstanding debt, but in exchange, the government is increasing its future pension liabilities. Years down the road, the government may find that they need to issue more sovereign debt to cover the increased pension liabilities they're taking on today. In other words, they may find themselves back in the same situation years down the road, and it's difficult to predict what changes they might make at that time. |
What is the basis of an asset that is never depreciated? | That's tricky, actually. First, as the section 1015 that you've referred to in your other question says - you take the lowest of the fair market value or the actual donor basis. Why is it important? Consider these examples: So, if the relative bought you a brand new car and you're the first title holder (i.e.: the relative paid, but the car was registered directly to you) - you can argue that the basis is the actual money paid. In essence you got a money gift that you used to purchase the car. If however the relative bought the car, took the title, and then drove it 5 miles to your house and signed the title over to you - the IRS can argue that the car basis is the FMV, which is lower because it is now a used car that you got. You're the second owner. That may be a significant difference, just by driving off the lot, the car can lose 10-15% of its value. If you got a car that's used, and the donor gives it to you - your basis is the fair market value (unless its higher than the donor's basis - in which case you get the donor's basis). You always get the lowest basis for losses (and depreciation is akin to a loss). Now consider the situation when your relative is a business owner and used the car for business. He didn't take the depreciation, but he was entitled to. IRS can argue that the fact that he didn't take is irrelevant and reduce the donor's basis by the allowable depreciation. That may bring your loss basis to below the FMV. I suggest you take it to a tax professional licensed in your state who will check all the facts and circumstances of your situation. Your relative might be slapped with a gift tax as well, if the car FMV is above certain amount (currently the exemption is $14000). |
Why do card processing companies discourage “cash advance” activities | I thought this was because credit card companies charge the retailer a fee to accept credit card payments. If you spend $100, the retailer pays $1 (or whatever percentage they have negotiated) to the credit card provider. Handing over $100 cash and paying $1 fee to Visa means a loss to the retailer. The same transaction on $100 worth of product means the loss is accepted out of the profit margin which the retailer accepts to attract custom. |
How to spend more? (AKA, how to avoid being a miser) | Time is money. If those hours spent researching to save $3 made you a better profit than you would have otherwise had buying the more expensive product and using the rest of the time to make more than $3, then you came out on top. If you consider this general premise in every spending decision you make, you should always feel that you made the right choice. |
what is difference between stock and dividend? | stocks represent ownership in a company. their price can go up or down depending on how much profit the company makes (or is expected to make). stocks owners are sometimes paid money by the company if the company has extra cash. these payments are called dividends. bonds represent a debt that a company owes. when you buy a bond, then the company owes that debt to you. typically, the company will pay a small amount of money on a regular basis to the bond owner, then a large lump some at some point in the future. assuming the company does not file bankrupcy, and you keep the bond until it becomes worthless, then you know exactly how much money you will get from buying a bond. because bonds have a fixed payout (assuming no bankrupcy), they tend to have lower average returns. on the other hand, while stocks have a higher average return, some stocks never return any money. in the usa, stocks and bonds can be purchased through a brokerage account. examples are etrade, tradeking, or robinhood.com. before purchasing stocks or bonds, you should probably learn a great deal more about other investment concepts such as: diversification, volatility, interest rates, inflation risk, capital gains taxes, (in the usa: ira's, 401k's, the mortgage interest deduction). at the very least, you will need to decide if you want to buy stocks inside an ira or in a regular brokerage account. you will also probably want to buy a low-expense ration etf (e.g. an index fund etf) unless you feel confident in some other choice. |
Any experience with maxing out 401(k)? | Don't forget to also build up an emergency fund - retirement saving is important, but you don't want to be caught in a situation where you need money for an emergency (lose your job, get hit by a bus, etc.) and it's all locked away in your 401(k). |
Does a stock really dip in price on the ex-dividend date? And why would it do this? | The stock should fall by approximately the amount of the dividend as that is what is paid out. If you have a stock trading at $10/share and it pays a $1/share dividend, the price should drop to $9 as what was trading before the dividend was paid would be both the dividend and the stock itself. If the person bought just for the dividend then it would likely be neutral as there isn't anything extra to be gained. Consider if this wasn't the case. Wouldn't one be able to buy a stock a few days before the dividend and sell just after for a nice profit? That doesn't make sense and is the reason for the drop in price. Similarly, if a stock has a split or spin-off there may be changes in the price to reflect that adjustment in value of the company. If I give you 2 nickels for a dime, the overall value is still 10 cents though this would be 2 coins instead of one. Some charts may show a "Dividend adjusted" price to factor out these transactions so be careful of what prices are quoted. |
What's the best way to make money from a market correction? | The best way to make money during a market correction is to be a financial services company handling transactions for people who think they can beat the market, and charging a percentage commission on each transaction, while keeping your own money somewhere nice and safe, stable and low-fee. |
Where do large corporations store their massive amounts of cash? | For tax optimization, cash is stored mostly overseas, according to the New York Times. For Apple, everytime a song or an app is bought in Europe, Africa or Middle East, money flows to iTunes Sàrl, in Luxemburg. Royalties on patents flow internally from Apple in California to Apple in Ireland. Then profits flow to the Carribean. The problem is that cash cannot be brought back to the USA without huge taxes. |
Selecting between investment vehicles for income | You have a comparatively small sum to invest, and since you're presumably expecting to go to college.university soon, where you may well need the money, you also have a short timescale for your investment. I don't think anything stock-related would be good for you -- you need a longer timescale for stock market investments, at least five years and preferably ten or more. I don't know the details of Australian savings, but I'd suggest just finding a bank that is giving a good interest rate for a one-year fixed-term savings account. |
Would the effects of an anticipated default by a nation be mostly symbolic? | It will affect Greeks as any bankruptcy affects the bankrupt. They already started reducing their welfare policies and government hand-outs. Default would mean that the government isn't able to meet its obligations. It's not only the external obligations, it's also the internal obligations - pensions, social security benefits, healthcare, public services, military (and the Greeks are in constant confrontation with the neighboring Turkey, with several armed conflicts throughout the years) - all that will get hit. Yes, they will get affected much more, definitely. |
How to measure a currencies valuation or devaluation in relevance to itself | The measure of change of value of a currency in relation to itself is inflation (or deflation). |
I am not VAT registered. Do I need to buy from my supplier with excl VAT prices or incl VAT? | If an item costs £10 excluding VAT, and you buy it from a VAT registered company, you will have to pay £12. You sell it for any price you like, and you don't add VAT. Let's say you set the price at £15 and sell 1000 items for £15. You take £15,000, you spent £12,000, you make £3,000 profit in your pocket and you'll pay taxes according to your profits (£3,000). It doesn't really matter that VAT was involved, it just affects the price that you pay. If you mostly trade with private customers and not with companies, being not VAT registered is a good idea, since by not having to add VAT you can keep your prices lower. It's different if you trade mostly with VAT-registered companies. In that example, if private customers are willing to pay £15 but not more, if you were VAT registered, you couldn't just charge £15 + VAT = £18, because your customers would stop buying. So you'd have to charge £12.50 + VAT = £15 and make less money. But if you sell to a company, it doesn't make a difference to them if they pay £15 without VAT or £15 + VAT = £18. You have to send the VAT to HMRC, but you can subtract the £2,000 that you paid yourself, so you make £2,000 more profit. |
How can I predict which way mortgage rates are moving? | Mortgage rates generally consist of two factors: The risk premium is relatively constant for a particular individual / house combination, so most of the changes in your mortgage rate will be associated with changes in the price of money in the world economy at large. Interest rates in the overall economy are usually tied to an interest rate called the Federal Funds rate. The Federal Reserve manipulates the federal funds rate by buying and/or selling bonds until the rate is something they like. So you can usually expect your interest rate to rise or fall depending on the policies of the Federal Reserve. You can predict this in a couple of ways: The way they have described their plans recently indicates that will keep interest rates low for an extended period of time - probably through 2014 or so - and they hope to keep inflation around 2%. Unless inflation is significantly more than 2% between now and then, they are extremely unlikely to change that plan. As such, you should probably not expect mortgage interest rates in general to change more than infinitesimally small amounts until 2014ish. Worry more about your credit score. |
Portfolio Diversity : invest $4000 into one account or $1000 into 4 accounts? | You spread money/investment across different accounts for different reasons: All this is in addition to diversification reasons. Investing all your money into one stock, bond, Mutual fund, ETF is risky if that one segment of the economy/market suffers. There is a drawback to diversification of accounts. Some have minimum amounts and fee structures. In the original question you asked about 1,000 per account. That may mean that some accounts may be closed to you. In other cases they will charge a higher percentage for fees for small accounts. Those issues would disappear long before you hit the 1,000,000 per account you mentioned in your comment. One problem can occur with having too much diversification. Having dozens of funds could mean that the overlap between the funds might result in over investing in a segment because you didn't realize that one stock segment appeared in 1/3 of the funds. |
Overnight charges for brokers holding stocks? | If you are trading CFDs, which are usually traded on margin, you will usually be charged an overnight financing fee for long positions held overnight and you will receive an overnight financing credit for short positions held overnight. Most CFD brokers will have their overnight financing rates set at + or - 2.5% or 3% from the country's official interest rates. So if your country's official interest rate is 5% and your broker uses + or - 2.5%, you will get a 2.5% credit for any short positions held overnight and pay 7.5% fee for any long positions held overnight. In Australia the official interest rate is 2.5%, so I get 0% for short positions and pay 5% for long positions held overnight. If you are looking to hold positions open long term (especially long positions) you might think twice before using CFDs to trade as you may end up paying quite a bit in interest over a long period of time. These financing fees are charged because you are borrowing the funds to open your positions, If you buy shares directly you would not be charged such overnight financing fees. |
Any good software for value investment? | I had the same problem and was looking for a software that would give me easy access to historical financial statements of a company, preferably in a chart. So that I could easily compare earnings per share or other data between competitors. Have a look at Stockdance this might be what you are looking for. Reuters Terminal is way out of my league (price and complexity) and Yahoo and Google Finance just don't offer the features I want, especially on financials. Stockdance offers a sort of stock selection check list on which you can define your own criterion’s. Hence it makes no investment suggestions but let's you implement your own investing strategy. |
Add $5000 to existing retirement account | You cannot contribute directly to that 401k account if you no longer work at the sponsoring company - you have to be on their payroll. You can, however, roll the 401k over into an IRA, and contribute to the IRA. Note that in both cases, you are only allowed to contribute from earned income (which includes all the taxable income and wages you get from working or from running your own business). As long as you are employed (and have made more than $5k this year) you should have no problem. I am not certain whether contributing your $5k to a roth IRA would help you achieve your tax goals, someone else here certainly can advise. |
Do people tend to spend less when using cash than credit cards? | I don't think that there is any good way a study can average this and bring a useful result: The core problem is that there are people that will spend more money than they should, if they become technically able to, and the credit card is just one of the tools they abuse for that (similar to re-financing with cash-outs, zero percent loans, etc.). On the other side, there are people who control and understand their spending, and again, the mechanism of payment is irrelevant for them. Studies measure some mix between the groups, and come up with irrelevant correlations that have no causality. If you think any tool or mechanics got you in financial trouble, think again: your spending habits and lack of understanding or care get you in financial trouble - nothing else. In a world where it is considered cool to 'don't understand math', it is no surprise that so many people can't control their finances. |
Receiving important daily wires from abroad? | You can receive all the Money in your Bank. By Problem if you mean whether it will raise any alarms at the Bank. Most likely yes, such kind of activity would trigger AML. Bank would flag this off to regulators and questions would be asked. If you are doing a Legitimate business, its not an issue. Maintain a proper record of the transaction and pay your taxes. As funds are large 80 K a month, it makes sense to seek to advice of a Laywer and CA to help you keep thing in order. |
Is it possible for all the owners of a stock to gain or lose money at the same time? | The Owners of stock keep changing with every Buy and Sell. Hence its theoritically possible that everyone makes or loses money. Say the price was $10 when everyone purchased the stock. If the stock is doing good and the markets are good, the stock will move up to $12. Everyone sells the stock to someone else. So all the Old owners have made $2. Now after some period of time, the stock / company is not doing so well, and the markets are bad, so the stock falls to $11, everyone sells. So all the current owners make a loss of $1. However in normal market conditions, there are Owners who have purchased stock at different price points and have held it irrespective of whether the price has gone above their purchase price or below their purchase price. |
Is short selling a good hedging strategy during overzealous market conditions? | Short selling can be a good strategy to hedge, but you have almost unlimited downside. If a stock price skyrockets, you may be forced to cover your short by the brokerage before you want to or put up more capital. A smarter strategy to hedge, that limits your potential downside is to buy puts if you think the market is going down. Your downside is limited to the total amount that you purchased the put for and no more. Another way to hedge is to SELL calls that are covered because you own the shares the calls refer to. You might do this if you thought your stock was going to go down but you didn't want to sell your shares right now. That way the only downside if the price goes up is you give up your shares at a predetermined price and you miss out on the upside, but your downside is now diminished by the premium you were paid for the option. (You'd still lose money if the shares went down since you still own them, but you got paid the option premium so that helps offset that). |
What is the best way to learn investing techniques? | All the things you suggest are good, but I think like everything else the key is practice. Study some topics, then try them out. There are many many sites out there that have free or cheap virtual trading. |
Is it a good practice to keep salary account and savings account separate? | It possibly could have made sense historically when interest rates were higher. In the UK, you used to get negligible (if any) interest on a current (checking) account, but could get modest interest from a savings account, so transferring the bulk of your salary to a savings account and paying from there (or transferring back to the current account when needed) could make some sense (but even then was probably not worth the effort). Nowadays (at least in the UK), most (easy access) savings accounts pay very little interest, but there are current accounts (example list here from comparison site) that pay more interest provided you go through several hoops. Typically you have to pay your salary (or a minimum number of £000s per month) into the account, and have a minimum number of direct debits going out. Some have fees, some only last for a year. |
Why is the stock market closed on the weekend? | Simply, most of the above given 'answers' are mere 'justifications' for a practice that has become anachronistic. It did make sense once in the past, but not any more. Computers and networks can run non-stop 24/7; even though the same human beings cannot be expected to work 24/7, we have invented the beautiful concept of multiple shifts; banks may be closed during nights and weekends, but banking is never closed in the internet era; ...The answer must lie in the vested interests of a few stakeholder groups - or - it could just be our difficult to change habits. |
How are they earning money in the movie “Trading Places”? | Sell 200 at 142. What does that mean? I haven't seen the movie, so I won't try to put anything in story context. "Sell 200 at 142" means to sell 200 units (usually shares, but in this case it would likely be gallons or barrels of orange juice or pounds or tons of frozen juice). In general, this could mean that you have 200 units and want to sell what you have. Or you could borrow 200 units from someone and sell those--this is called a naked short. In this case, it seems that what they are selling is a futures contract. With a futures contract, you are promising to obtain orange juice by some future date and sell it for the agreed price. You could own an orange grove and plan to turn your oranges into juice. Or you could buy a futures contract of oranges to turn into juice. Or you could arbitrage two futures contracts such that one supplies the other, what they're doing here. In general people make profits by buying low and selling high. In this case they did so in reverse order. They took the risk of selling before they had a supply. Then they covered their position by purchasing the supply. They profited because the price at which they bought was lower than the price at which they sold. The reason why this is necessary is that before buying the oranges, the orange juice makers need to know that they can make a profit. So they sell orange juice on the futures market. Then they know how much they can afford to pay for oranges on a different market. And the growers know how much they can get for oranges, so they can pay people to water and pick them. Without the futures markets, growers and orange juice makers would have to take all the risk themselves. This way, they can share risks with each other and financiers. Combined with insurance, this allows for predictable finances. Without it, growers would have to be wealthy to afford the variation in crop yields and prices. |
What one bit of financial advice do you wish you could've given yourself five years ago? | Do your homework on all types bonds and other lower-risk instruments, including bond funds and ETFs. I left too much money sitting around as cash over the last 5 years. |
In a competitive market, why is movie theater popcorn expensive? | The cost of the popcorn is simply the hidden extension of the price the consumer pays for the movie ticket. Similar to the tips in the restaurant. And movie theaters do not compete by lowering the unit price. Instead to maintain the revenue per customer they try to offer more value - bigger screen, better sound, more comfortable seats, etc. That is why the price of the popcorn just like the price of the ticket itself does not go down in the competitive market. |
My tenant wants to pay rent through their company: Should this raise a red flag? | I disagree with the other respondents. If your tenant is an individual, renting in their individual capacity, there is no reason they need your SSN. They will not be sending a 1099 to you. If your tenant is a business, then your property is not a residential property. It is at least a "corporate housing", and you would have noticed that the contract was signed by a company representative in the capacity of being a company representative, not an individual person. In that case, that representative would also ask you to fill a form W9, on which your tax ID should be reported. I would suggest let the tenant figure out their tax avoidance issues without you being involved. |
Tax implications of holding EWU (or other such UK ETFs) as a US citizen? | You will not be able to continue filing with TurboTax if you invest in foreign funds. Form 8261 which is required to report PFIC investments is not included. Read the form instructions carefully - if you don't feel shocked and scared, you didn't understand what it says. The bottom line is that the American Congress doesn't want you do what you want to do and will punish you dearly. |
How credible is Stansberry's video “End of America”? | I know nothing about the guy, but I think the "premium" products (Penny stock recommendations, a newsletter devoted to earning 12% per year, every year, etc) sold by his firm speak for themselves. |
Stock portfolio value & profit in foreign currency | It's very simple. Use USDSGD. Here's why: Presenting profits/losses in other currencies or denominations can be useful if you want to sketch out the profit/loss you made due to foreign currency exposure but depending on the audience of your app this may sometimes confuse people (like yourself). |
I've got $100K to invest over the next 2 to 7 years. What are some good options? | One of the things I would suggest looking into is peer-to-peer lending. I do lendingclub.com, but with a lot less money, and have only done it a short period of time. Still my return is about 13%. In your case you would probably have to commit to about 3.5 years to invest your money. Buy 3 year notes, and as they are paid off pull the money out and put into a CD or money market.. They sell notes that are 3 or 5 year and you may not want to tie your money up that long. |
Is it unreasonable to double your investment year over year? | Nobody has consistently doubled their investment year after year, not even the "greats" like George Soros and Warren Buffett. Mr. Buffett's average annual returns have been over 20% for over 50 years. That's about twice the American average of 10%-11% a year. So Mr. Buffett has been "twice as good as average" for his adult life. That's like having a 200 IQ. And in a poll taken in 2000, he was rated the greatest portfolio manager of all time. No lesser person could hope to do better. What has happened is that people may double their investment in ONE year, then "give some back" the following year. Or else go through several years of "average" 10%-15% returns. The reason is that they will have an investment style that works for one particular market, but not for all markets, so they will have to wait for their "best" market, to have their "best" year. |
Friend was brainwashed by MLM-/ponzi investment scam. What can I do? | The title of your question basically asks: What can I do? And you state this regarding the meeting and “advice” they gave towards criticism of their method: While this they also indoctrinated that you should avoid talking to people talking bad about it (or say it is scam) because you gain no money from them and they just want to destroy your business. First, you really cannot do anything to “save” your friend if they have bought this nonsense. You are right, it’s a scam. But past stating as such to your friend, there is not much you can do past shielding yourself. The reality is this: Any scenario you are in where you cannot ask basic questions and get a reasonable response or are given—at least—the option to walk away unscathed or uninsulated is basically a cult-like mentality. Simple as that. If the first thing someone tells you is “Don’t listen to others, just listen to me…” then you need to excuse yourself to go to the bathroom or something and just leave. From my personal experience meeting people who are successful and have power, they always—and I mean always—ask questions and are critical of things they invest in… Whether that investment is time, money or just basic mental energy. Rich people are just like you and me! Except they have more money so they can take bigger risks. Critical thinking and the ability to walk away from something are key life skills. Now others have talked salesman psychology which is on point. But here is something else you brought up in your question: He also wants to use his position as respected member of multiple local youth and other communities to get their members as referals or in his words “…to give them the oppurtunity to also simply earn money.” Okay, so you can set personal boundaries between you and this clown, but you cannot stop him. But if he plans on targeting people and organizations in your community, you can warn them about him and his behavior and this scam. Chances are other people will know right away it’s a scam, but honestly if you feel the need to help others, that’s the most reasonable thing you can do to help them. But whatever you do, don’t take any of this emotional crap personally. If anything, maybe you can learn some reverse salesman techniques to get this “friend” to disengage. Such as only meeting with them in public and if they say something really vile to you, repeating what they said back to them as a question… Maybe even louder so everyone can hear. Remember a harsh reality of life: Public shaming can work to change someone’s behavior but you never want to do something like that unless you have utterly no choice. That last bit of advice is pretty harsh, but the reality is at some point you need to do something to “smack” reality into the situation. |
Are personal finance / money management classes taught in high school, anywhere? | Did a little bit of digging, and found this article, from Staples High School in Westport, Connecticut. Hopefully this will be a growing trend. They say: A personal financial management class will now be offered at the beginning of the upcoming school year (2011-2012). According to the course catalogue, the focus of this course will be using mathematics as a tool in developing financial literacy skills. Topics covered in the course will include: earnings, banking, credit cards, loans, taxes, insurance, investing, loans, budgeting, and buying personal property. “In a perfect world, everyone would be required to take a personal finance course,” Principal John Dodig said. |
What are the options for a 19-year-old college student who only has about $1000? | The "$1000 is no money at all" people are amusing me. Way back in the mists of time, a very young me invested on the order of ~$500 in a struggling electronics manufacturer I had a fondness for. An emotional investment, not much money, but enough that I could get a feel for what it was like owning stock in something. That stock's symbol was AAPL. This is admittedly a rare outcome, but $1000 invested over the long term isn't not worth doing. If for no other reason then when the OP has "real" money, he'll have X+$1000 invested rather than X, assuming 0% return, which I doubt. It's a small enough amount that there are special considerations, but it's a solid opportunity for learning how the market works, and making a little money. Anyway, my advice to the OP is as follows: |
Is there a benefit, long term, to life insurance for a youngish, debt, and dependent free person? | If there are no dependents, there is no need for life insurance. You mention getting insurance when it is not needed, to protect you against some future risk. If you have a policy and a disease crops up that would normally make you un-insurable, you can keep your insurance for the rest of the term. The cost for this would be very high. You would have to have a term that would last decades to cover you until some future child is out of college. If you never have somebody that depends on you for income, there never is a need for life insurance. |
How much does it cost to build a subdivision of houses on a large plot of land? | The estimated cost of $200 sqft of living space is achievable by builders who are following one the their standard plans. They build hundreds of homes each year across the region using those standard plans. They have detailed schedules for constructing those homes, and they know exactly how many 2x4s are need to build house X with options A, F, and P. They buy hundreds of dishwashers and get discounts. That price also includes the cost of the raw land and the required improvements of the property. You need to know the zoning for that land. You need to know what you can build by right, and what you can get exceptions for. You don't want to pay $600 K and then find out you can only build a 1 level house and you can only use 1/4 acre. You would need to start with a design and then have the architect and the builder and a real estate lawyer look over the property. Then they can give you an estimate of what it would cost to put that design on that property. 83k sqft? I mean it can accommodate at least 10 houses. It depends on what is the minimum lot size. If the maximum allowable density is three houses per acre you can get 6 in 2.2 acres, but if the minimum lot size is supposed to be 5 acres, then you will need an exception just to build one house. And exceptions involve paperwork, hearings and lawyers. |
Confused about employee stock options: How do I afford these? | the short answer is: No. you do not HAVE to pay $125,000.00 at the end of your first year. that is only the amount IF you decide to exercise. *fine print: But if you leave or get let go (which happens quite frequently at top tier Silicon Valley firms), you lose anything that you don't exercise. you're basically chained by a pair of golden handcuffs. in other words, you're stuck with the company until a liquidation event such as IPO or secondary market selling (you can expect to spend a few years before getting anything out of your stocks) Now, it's hard to say whether or not to exercise at that time, especially given we don't know the details of the company. you only should exercise if you foresee your quitting, anticipate getting fired, AND you strongly feel that stock price will keep going up. if you're in SF bay, i believe you have 10 years until your options expire (at which point they are gone forever, but that's 10 years and usually companies IPO well within 7 years). i would recommend you get a very good tax advisor (someone that understands AMT and stock options tax loopholes/rules like the back of their hand). I'm going to take a long shot and assume that you got an amazing offer and that you got a massive amount of ISOs from them. so i'll give this as an advice - first, congrats on owning a lot on paper today if you're still there. you chose to be an early employee at a good tech company. However, you should be more worried about AMT (alternative min tax). you will get enslaved by the IRS if you exercise your shares and can't pay the AMT. suppose, in your fictional scenario, your stock options increase 2x, on paper. you now own $1 Mil in options. but you would be paying $280000 in taxes if you chose to exercise them right now. Now, unless you can sell that IMMEDIATELY on the secondary market, i would highly advise you not to exercise right now. only exercise your ISOs when you can turn around and sell them (either waiting for IPO, or if company offers secondary market approved trading). |
Why might it be advisable to keep student debt vs. paying it off quickly? | Congratulations for achieving an important step in the road to financial freedom. Some view extending loan payment of loans that allow the deduction of interest as a good thing. Some view the hit on the credit score by prematurely paying off an installment loan as a bad thing. Determining the order of paying off multiple loans in conjunction with the reality of income, required monthly living expense, and the need to save for emergencies is highly individualized. Keeping an artificial debt seems to make little sense, it is an expensive insurance policy to chase a diminishing tax benefit and boost to a credit score. Keep in mind it is a deduction, not a credit, so how much you save depends on your tax bracket. It might make sense for somebody to extend the loan out for an extra year or two, but you can't just assume that that advice applies in your situation. Personally I paid off my student loan early, as soon as it made sense based on my income, and my situation. I am glad I did, but for others the opposite made more sense. |
What would happen if the Euro currency went bust? | The result would be catastrophic. The almost-reserve currency would collapse which would produce a medium sized depression, perhaps same with with 2008-now, or even larger, since don't forget, that one was produced from a housing bubble existing in only a part of the american economy; imagine what would happen if almost the full size of the economy (Europe) would collapse, even if Europe isn't as much "connected". But reality here is, there's no chance to that. The real reason you hear those rumors is that America (along with minor partners like the British Sterling) want to bring down the Euro for medium-term benefit. e.g. Several economists get on Bloomberg announcing they are short selling the Euro. Irony is, all this is helping the Euro since selling and short-selling and selling and short-selling helps massively its liquidity. It's like several nay sayers actually making a politician famous with their spite. |
Can't the account information on my checks be easily used for fraud? | Yes, and there are almost no checks (no pun intended) on people pulling money from your account using a routing number. It is an EXTREMELY insecure system. If you want a real Halloween scare, read this article: Easy Check Fraud Technique Draws Scrutiny. Unfortunately you just have to live with it. If you are curious why this loophole is allowed to continue, consider how hard it is to close it without undermining the convenience of checks. Short of you going to the bank with each person you write a check to and showing ID to validate the transaction, I don't see how you could continue to use a negotiable instrument like this without such a security hole. The ultimate answer is going to have to be replacing checks with other means of payment. |
Can I buy only 4 shares of a company? | Yes you can. it's called Odd Lot |
How much time would I have to spend trading to turn a profit? | It depends on how you define trading. If you're looking at day-trading, where you're probably going to be in a highly-leveraged position for minutes or hours, the automated traders are probably going to kill you. But, if you have a handful (less than a dozen) equities, and spend about an hour or so every week conducting research, you have a good chance of doing pretty well. You need to understand the market, listen to the earnings calls, and understand the factors that contribute to the bottom line of your investments. You should not be trading for the sake of trading, you're trading to try to achieve the best returns. Beware of dogmatists and people selling products that align with their dogma. Warren Buffet invests in companies for an extremely long investment window. Mr. Buffet also expends significant resources to gain a deep understanding of the fundamentals of the businesses that he invests in and the factors affecting those fundamentals. Buffet does not buy an S&P 500 index fund and whistle dixie. |
Shorting stocks: Indicators that a stock will drop? | First utilize a security screener to identify the security profiles you are looking to identify for identifying your target securities for shorting. Most online brokers have stock screeners that you can utilize. At this point you may want to look at your target list of securities to find out those that are eligible for shorting. The SHO thresold list is also a good place to look for securities that are hard to borrow to eliminate potential target securities. http://regsho.finra.org/regsho-Index.html Also your broker can let you know the stocks that are available for borrowing. You can then take your target securities and then you can look at the corporate filings on the SEC's Edgar site to look for the key words you are looking for. I would suggest that you utilize XBRL so you can electronically run your key word searched in an automated manner. I would further suggest that you can run the key word XBRL daily for issuer filings of your target list of securities. Additional word searches you may want to consider are those that could indicate a dilution of the companies stock such as the issuance of convertible debt. Also the below link detailing real short interest may be helpful. Clearing firms are required to report short interest every two weeks. http://www.nasdaq.com/quotes/short-interest.aspx |
Are Exchange-Traded Funds (ETFs) less safe than regular mutual funds? | If anything, the price of an ETF is more tightly coupled to the underlying holdings or assets than a mutual fund, because of the independent creation/destruction mechanism. With a mutual fund, the price is generally set once at the end of each day, and the mutual fund manager has to deal with investments and redemptions at that price. By the time they get to buying or selling the underlying assets, the market may have moved or they may even move the market with those transactions. With an ETF, investment and redemption is handled by independent "authorized participants". They can create new units of the ETF by buying up the underlying assets and delivering them to the ETF manager, and vice versa they can cancel units by requesting the underlying assets from the ETF manager. ETFs trade intraday (i.e. at any time during trading hours) and any time the price diverges too far from the underlying assets, one of the authorized participants has an incentive to make a small profit by creating or destroying units of the ETF, also intraday. |
What is a decent rate of return for investing in the markets? | What do you think is a reasonable rate of return? A reasonable rate really breaks down into three things: opportunity cost, what you need, and risk appetite. Opportunity cost comes into play because whatever returns you make should at least exceed, after expenses, the next best option. Typically the "next best option" is the risk free return you can get somewhere else, which is typically a savings account or some other (safe) investment vehicle (e.g. a guaranteed investment certificate/GIC, bonds, etc). But, this opportunity cost could also be an alternative investment (e.g. an index ETF), which is not necessarily risk free (but it may represent the next best option). Risk appetite comes down to the amount of risk you are willing to take on any investment, and is completely subjective. This is typically "how much can you sleep with losing" amount. What you need is the most subjective element. All things being equal (e.g. identical risk profiles, access to same next-best-thing to invest in), if your cost of living expenses are only expected to go up 2% per year, but mine are expected to go up 3% per year, then my reasonable rate of return must exceed 3%, but yours must only exceed 2%. That said, an appropriate return is whatever works for you, period. Nobody can tell you otherwise. For your own investing, what you can do is measure yourself against a benchmark. E.g. if your benchmark is the S&P 500, then the S&P 500 SPDR ETF is your opportunity cost (e.g. what you would have made if you didn't do your own investing). In that way, you are guaranteed the market return (caveat: the market return is not guaranteed to be positive). As an aside.. Don't ever, ever, ever let someone else handle your money, unless you want somebody else have your money. There is nothing wrong with letting someone else handle your money, provided you can live with the triple constraint above. Investing takes time and effort, and time and effort equals opportunity. If you can do something better with the time and effort you would spend to do your own investing, then by all means, do it. Think about it: if you have to spend 1 day a month managing your own investments, but that day costs you $100 in foregone income (e.g. you are a sole proprietor, so every day is a working day), that is $1,200 per year. But if you can find an investment advisor who will manage your books for you, and costs you only $500 per year, what is the better investment? If you do it yourself, you are losing $1,200. If you pay someone, you are losing $500. Clearly, it is cheaper to outsource. Despite what everyone says, not everyone can be an investor. Not everyone wants to live with the psychological, emotional, and mental effort of looking up stocks, buying them, and then second guessing themselves; they are more than happy to pay someone to do that (which also lets them point the finger at that person later, if things go sideways). |
Why do investors buy stock that had appreciated? | Imagine how foolish the people that bought Apple at $100 must have felt. It was up tenfold for the $10 it traded at just years prior, how could it go any higher? Stocks have no memory. A stock's earnings may grow and justify the new higher price people are willing to pay. When FB came public, I remarked how I'd analyze the price and felt it was overvalued until its earnings came up. Just because it's gone down ever since, doesn't make it a buy, yet. |
Personal finance software for Mac that can track stocks and mutual funds? (Even manual updating of share prices will do.) | I'm using iBank on my Mac here and that definitely supports different currencies and is also supposed to be able to track investments (I haven't used it to track investments yet, hence the 'supposed to' caveat). |
Paid cash for a car, but dealer wants to change price | I'm sorry to hear you've made a mistake. Having read the contract of sale we signed, I do not see any remedy to your current situation. However, I'm interested in making sure I do not take advantage of you. As such, I'll return the vehicle, you can return my money plus the bank fees I paid for the cashiers check, tax, title, and registration, and I will look at buying a vehicle from another dealership. This seems to be the most fair resolution. If I were to pay for your mistake at a price I did not agree to, it would not be fair to me. If you were to allow this vehicle to go to me at the price we agreed to, it wouldn't be fair to you. If I were to return the car and begin negotiations again, or find a different car in your lot, it would be difficult for us to know that you were not going to make a similar mistake again. At this point I consider the sale final, but if you'd prefer to have the vehicle back as-is, returning to us the money we gave you as well as the additional costs incurred by the sale, then we will do so in order to set things right. Chances are good you will see them back down. Perhaps they will just cut the additional payment in half, and say, "Well, it's our mistake, so we will eat half the cost," or similar, but this is merely another way to get you to pay more money. Stand firm. "I appreciate the thought, but I cannot accept that offer. When will you have payment ready so we can return the car?" If you are firm that the only two solutions is to keep the car, or return it for a full refund plus associated costs, I'd guess they'd rather you keep the car - trust me, they still made a profit - but if they decide to have it returned, do so and make sure they pay you in full plus other costs. Bring all your receipts, etc and don't hand over the keys until you have the check in hand. Then go, gladly, to another dealership that doesn't abuse its customers so badly. If you do end up keeping the car, don't plan on going back to that dealership. Use another dealership for warranty work, and find a good mechanic for non-warranty work. Note that this solution isn't legally required in most jurisdictions. Read your contract and all documentation they provided at the time of sale to be sure, but it's unlikely that you are legally required to make another payment for a vehicle after the sale is finalized. Even if they haven't cashed the check, the sale has already been finalized. What this solution does, though, is put you back in the driver's seat in negotiating. Right now they are treating it as though you owe them something, and thus you might feel an obligation toward them. Re-asserting your relationship with them as a customer rather than a debtor is very important regardless of how you proceed. You aren't legally culpable, and so making sure they understand you aren't will ultimately help you. Further, dealerships operate on negotiation. The primary power the customer has in the dealership is the power to walk away from a deal. They've set the situation up as though you no longer have the power to walk away. They didn't threaten with re-possession because they can't - the sale is final. They presented as a one-path situation - you pay. Period. You do have many options, though, and they are very familiar with the "walk away" option. Present that as your chosen option - either they stick with the original deal, or you walk away - and they will have to look at getting another car off the lot (which is often more important than making a profit for a dealership) or selling a slightly used car. If they've correctly pushed the title transfer through (or you, if that's your task in your state) then your brief ownership will show up on carfax and similar reports, and instantly reduces the car's worth. Having the title transfer immediately back to the dealership doesn't look good to future buyers. So the dealership doesn't want the car back. They are just trying to extract more money, and probably illegally, depending on the laws in your jurisdiction. Reassert your position as customer, and decide now that you'll be fine if you have to return it and walk away. Then when you communicate that to them, chances are good they'll simply cave and let the sale stand as-is. |
historical stock data starting from 1900 | Good day! Did a little research by using oldest public company (Dutch East India Company, VOC, traded in Amsterdam Stock Exchange) as search criteria and found this lovely graph from http://www.businessinsider.com/rise-and-fall-of-united-east-india-2013-11?IR=T : Why it is relevant? Below the image I found the source of data - Global Financial Data. I guess the answer to your question would be to go there: https://www.globalfinancialdata.com/index.html Hope this helps and good luck in your search! |
Computer vendor not honoring warranty. What's the next step? | The issue yo have to consider is that under many state laws, you must give a merchant three opportunities to correct an issue before you can sue them, so check with your state before considering that option. Here's a link to the Federal Trade Commission's warranty information page, which may give you some ideas about what your options are. Keep in ind, if you let someone else work on the computer rather than the store you bought it from, you might give the guy a valid claim in court to throw out your lawsuit! Many times, warranties will spell out the conditions under which repair work can or must be done, so make sure you follow every step to the letter in order to preserve your claim. I would strongly suggest that you start creating a paper trail for your claim. Start by writing a very precise and detailed letter to the store owner, with copies of all relevant documents (your receipts, warranty papers, etc.) included. Explain the entire history, including what steps you've taken to date to get him to honor the warranty. Offer him the option to let you take the computer to another shop for repairs at his expense. Then, send the letter by certified mail, return receipt requested, to the store owner so that he can't deny receiving your letter. This is all in order to make the best case you can for your claim just in case you do have to sue him. Do not take the computer to anyone else until or unless he tells you in writing that he is willing to let you do that. You don't want to risk him arguing that the other shop is responsible for the problems now. I hope this helps. Good luck! |
What considerations are there for making investments on behalf of a friend? | There's a sizable community of people and fiscal advisers who advocate not managing the money at all. Set your passive investor friend with automatic bank draft into a simple three/four fund portfolio of low cost index funds and never never ever trade. See https://www.bogleheads.org/RecommendedReading.php You might be able to beat the stock market for a few years, but probably not over the long term. Most mutual fund professionals don't. Playing with your own money is one thing: playing with other people's money is a whole other ball game. |
Shared groceries expenses between roommates to be divided as per specific consumption ratio and attendance | When I was in grad school (at an engineering school) my apartment-mates and I came up with this formula: Worked marvelously. |
What intrinsic, non-monetary value does gold have as a commodity? | This was answered wonderfully in a recent Planet Money podcast: Why Gold?. Here are some higlights of gold: If listening to podcasts isn't your thing, read this summary. |
Does gold's value decrease over time due to the fact that it is being continuously mined? | Does gold's value decrease over time due to the fact that it is being continuously mined? Remember that demand increases and decreases - we've had seven years or so of strong demand increase and the corresponding price increase suggests there is a lack of gold coming into the market rather than too much. Also, bear in mind that mining the stuff on any scale is hazardous and requires massive investment in infrastructure and time. Large mines frequently take seven to ten years to come on-stream - hardly an elastic enterprise. |
Why are currency forwards needed? | e.g. a European company has to pay 1 million USD exactly one year from now While that is theoretically possible, that is not a very common case. Mostly likely if they had to make a 1 million USD payment a year from now and they had the cash on hand they would be able to just make the payment today. A more common scenario for currency forwards is for investment hedging. Say that European company wants to buy into a mutual fund of some sort, say FUSEX. That is a USD based mutual fund. You can't buy into it directly with Euros. So if the company wants to buy into the fund they would need to convert their Euros to to USD. But now they have an extra risk parameter. They are not just exposed to the fluctuations of the fund, they are also exposed to the fluctuations of the currency market. Perhaps that fund will make a killing, but the exchange rate will tank and they will lose all their gains. By creating a forward to hedge their currency exposure risk they do not face this risk (flip side: if the exchange rate rises in a favorable rate they also don't get that benefit, unless they use an FX Option, but that is generally more expensive and complicated). |
Accounting for splits in a stock price graph | One way that is common is to show the value over time of an initial investment, say $10,000. The advantage of this is that it doesn't show stock price at all, so handles splits well. It can also take into account dividend reinvestment. Fidelity uses this for their mutual funds, as can be seen here. Another option would be to compute the stock price as if the split didn't happen. So if a stock does a 2:1 split, you show double the actual price starting at that point. |
Can I get a mortgage from a foreign bank? | You definitely used to be able to (see this BBC article from 2006), and I would imagine that you still can, although I also imagine that it would be more difficult than it used to be, as with all mortgages. EDIT: And here's an article from last year about Chinese banks targeting the UK mortgage market. |
What are dividends, when are they paid, and how do they affect my position? | Dividends are declared by the board of directors of a corporation on date A, to stock holders of record on date B (a later date). These stockholders then receive the declared dividend on date C, the so-called payment date. All of these dates are announced on the first (declaration) date. If there is no announcement, no dividend will be paid. The stock typically goes down in price by approximately the amount of the dividend on the date it "goes ex," but then moves in price to reflect other developments, including the possibility of another declaration/payment, three months hence. Dividends are important to some investors, especially those who live on the income. They are less important to investors who are out for capital gains (and who may prefer that the company reinvest its money to seek such gains instead of paying dividends). In actual fact, dividends are one component of "total" or overall return. The other component is capital gains, and the sum of the two represents your return. |
Record retention requirements for individuals in the U.S.? | Here is an IRS Publication 552 covering records retention The publication covers many areas, including proof of income, bank statements, old tax returns. There is a table that talks about how long to keep the records. In general it is 3 to 6 years. But for property it is 3 to 6 years after you dispose of the property. |
If an option's price is 100% made up of its intrinsic value, is there a way to guarantee a non-loss while having a chance at a profit? | Yes, one such strategy is dividend arbitrage using stock and in the money options. You have to find out which option is the most mispriced before the ex-dividend date. |
Bank statements - should I retain hardcopies for tax or other official purposes (or keep digital scanned copies)? | In the UK Directgov don't specify anything more than "records", which leads me to think that a digital copy might be acceptable. With regards to bank statements, individuals (i.e. not self-employed, or owning a business) need to keep them for between 12 and 15 months after your tax return, depending on when you filed it. Source: Record keeping (individuals and directors) - Directgov |
Financing Education through Credit Card or Student Loans | I would use student loans and avoid credit card debt if debt is your only option. Here are the advantages I see: Disadvantages: |
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