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Is it a good idea to get an unsecured loan to pay off a credit card that won't lower a high rate? | Why not just get another credit card and transfer the balance? Many of them will give you special perks like x months of no interest for doing so. Also, once you call to actually cancel the card you will see for sure whether they really have any power to negotiate rates. From their perspective 15% APR is more than 0%APR which is what they'd get if they lose your business. |
Negative properties of continuously compounded returns | What you're missing is the continuous compounding computation doesn't work that way. If you compound over n periods of time and a rate of return of r, the formula is e^(r*n), as you have to multiply the returns together with a mulitplicative base of 1. Otherwise consider what 0 does to your formula. If I get a zero return, I have a zero result which doesn't make sense. However, in my formula I'd still get the 1 which is what I'm starting and thus the no effect is the intended result. Continuous compounding would give e^(-.20*12) = e^(-2.4) = .0907 which is a -91% return so for each $100 invested, the person ends up with $9.07 left at the end. It may help to picture that the function e^(-x) does asymptotically approach zero as x tends to infinity, but that is as bad as it can get, so one doesn't cross into the negative unless one wants to do returns in a Complex number system with imaginary numbers in here somehow. For those wanting the usual compounding, here would be that computation which is more brutal actually: For your case it would be (1-.20)^12=(0.8)^12=0.068719476736 which is to say that someone ends up with 6.87% in the end. For each $100 had in the beginning they would end with $6.87 in the end. Consider someone starting with $100 and take 20% off time and time again you'd see this as it would go down to $80 after the first month and then down to $64 the second month as the amount gets lower the amount taken off gets lower too. This can be continued for all 12 terms. Note that the second case isn't another $20 loss but only $16 though it is the same percentage overall. Some retail stores may do discounts on discounts so this can happen in reality. Take 50% off of something already marked down 50% and it isn't free, it is down 75% in total. Just to give a real world example where while you think a half and a half is a whole, taking half and then half of a half is only three fourths, sorry to say. You could do this with an apple or a pizza if you want a food example to consider. Alternatively, consider the classic up and down case where an investment goes up 10% and down 10%. On the surface, these should cancel and negate each other, right? No, in fact the total return is down 1% as the computation would be (1.1)(.9)=.99 which is slightly less than 1. Continuous compounding may be a bit exotic from a Mathematical concept but the idea of handling geometric means and how compounding returns comes together is something that is rather practical for people to consider. |
Do people tend to spend less when using cash than credit cards? | One study found that, while people using gift certificates bought no more items than those who used cash, they tended to spend more per item. In "Study 3" the paper "Monopoly money: The effect of payment coupling and form on spending behavior", sets up a case where shoppers are given $50 in cash and $50 in gift certificates (the leftover of which can be exchanged for cash). They were asked to choose different brands and types of items to buy. They study found that There was no difference in the number of items purchased as a function of payment form for scrip However means across all product categories show that participants spent more per item when they were given [the gift certificate] |
Are cashiers required to check a credit card for a signature in the U.S.? | Per their merchant agreements, Visa and MasterCard say that the signature on the back of the card is the proper way to identify the card holder. If a card is not signed, the merchant is supposed to check your ID and make you sign the card before accepting it for payment. Merchants are not allowed the require an ID for paying with a signed card. Of course, store employees rarely know all these things. Some will gladly accept an unsigned card. Some will try to make you show your ID. |
Why does it look like my 401k loan default was not paid by my 401k account balance? | There are multiple reasons why this may have happened: 1.) I couldn't tell in your question whether or not you had already paid off the loan before requesting the rollover. But if the loan was defaulted - then the $9k left in your account is not distributable, but is there to pay back the remaining balance on your loan. The $9k will be treated as income, and will be taxed - you will receive a 1099-R detailing the taxes you'll owe. I don't know why this wasn't done when they did your rollover distribution. Typically it all happens at the same time - but it can vary depending on the administrator. 2.) Do you get some type of safe harbor discretionary match, or profit sharing contribution? If so - perhaps this contribution was made after your account was liquidated. So now there is residual money in your account and it is treated as a new distribution, which incurs a new $60 distribution fee. 3.) Stock - if some of your investments were in stock - these take a few extra days to liquidate. Typically a TPA/Recordkeeper would wait until ALL of the funds are liquidated before issuing the rollover. But some companies may be shady and do it separately - incurring an additional $60 distribution fee. If this was the case - I would go to your former employer's HR and tell them whats happening and to start looking for a new 401(k) administrator! I hope this helps :-) Good luck! |
Why buy insurance? | This is just an addition to base64's answer. In order to maximize your overall wealth (and wellbeing) in a long run, it is not enough to look only at the expected value (EV). In his example of always keeping $9850 or having $10000 99% of the time, EV in the second case is greater ($9900 > $9850) and if you are Bill Gates than you should not take an insurance in this case. But if your wealth is a lot less than that you should take an insurance. Take a look at Kelly criterion and utility functions. If I offer you to take 100 million dollars (no strings attached) or to take a risk to get 200 million dollars 60% of the time (and $0 40% of the time), would you take that risk? You shouldn't but Bill Gates should take that risk because that would be a very good investment for him. Utility functions can help you choose if you want an insurance or not. Maybe you want to insure your house because the value of the house is a large percentage of your wealth but on the other hand you don't need to insure your car if it is very easy for you to afford another one (but not easy to afford another house). Lets calculate what your wealth should be in order not to take this $150 insurance on a $10000 item. If you pay $150 for an insurance you have guaranteed $9850. But choosing not to take an insurance is the same as betting $9850 in order to gain $150 99% of the time. By using Kelly criterion formula fraction of the wealth needed to make this bet is: [p*(b+1)-1]/b = [0.99*(150/9850+1) -1]/ (150/9850) = 1/3. That means that if your wealth greater than $29950 you don't need an insurance. But if you want to be sure it is advised to use fractional Kelly betting (for example you could multiply fraction by 1/2) and in that case if your wealth is more than $59900 you don't need an insurance for this item. |
What's the difference between “Index” and “Accumulation” tracker funds? | Whenever a website mentions Hypothetical Growth of $100, $1,000, or $10,000, it assumes that that investor himself will reinvest the dividend. This is true whether you look at Morningstar or Financial Times. Unless the website does not have dividend data, e.g. Google Finance. If you want to compare the account value after withdrawing dividends: Since the Income class pays dividends annually, there will be 1 jumps per year. For example, the 2013 dividend payment: and the 2014 dividend payment: |
Received mysterious K-1 form, seeking answers | SXL is a Master Limited Partnership so all of the income is pass-through. Your equity purchase entitles you to a fraction of the 66% of the company that is not owned by Energy Transfer Partners. You should have been receiving the K-1s from SXL from the time that you bought the shares. Without knowing your specific situation, you will likely have to amend your returns for at most 6 years (if the omitted amount of gross income exceeds 25% of your gross income originally stated as littleadv has graciously pointed out in the comments) and include Schedule E to report the additional income (you'll also be able to deduct any depreciation, losses etc. that are passed through the entity on that form, so that will offset some of the gains). As littleadv has recommended, speak with a tax professional (CPA/EA or attorney) before you take any further steps, as everyone's situation is a bit different. This Forbes article has a nice overview of the MLP. There's a click-through to get to it, but it's not paywalled. |
Can expenses for attending stockholders meetings be deducted in U.S. income taxes? | Nope, not deductible. It's true that some investment expenses are deductible, mainly as "miscellaneous itemized expenses", though only the amount that exceeds 2% of your adjusted gross income. But as explained in IRS Pub 550, which lays out the relevant rules: Stockholders' meetings. You cannot deduct transportation and other expenses you pay to attend stockholders' meetings of companies in which you have no interest other than owning stock. This is true even if your purpose in attending is to get information that would be useful in making further investments. |
Should I have a higher credit limit on my credit card? | I'm not sure that OP was asking if he/she personally should have more available credit, so I will answer the other interpretation: should that particular card have a higher limit? The answer is "no." The range varies vastly by issuer. Starting limits vary widely from issuer to issuer even with identical credit histories. Some issuers never automatically increase the limit, some periodically conduct account reviews to determine if an increase is warranted. Some like to see higher spending habits each month. Personally, my cards range from $500 to $25000, and the high and low extremes are the same age. You can search for tips on how often to request increases for your particular card, or what kind of spending habits the issuer prefers. An important note: You do not need to carry a balance to make the issuer happy. You never need to pay a cent in credit card interest. |
As an employer, how do I start a 401k or traditional IRA plan? | Here is a nice overview from Vanguard on some options for a small business owner to offer retirement accounts. https://investor.vanguard.com/what-we-offer/small-business/compare-plans I would look over the chart and decide which avenue is best for you and then call around to investment companies (Vanguard, Fidelity, etc. etc.) asking for pricing information. |
Why would you ever turn down a raise in salary? | I would turn down a 20% raise in salary without thinking, if they would offer that I can have a 4 day work week. I even take a 10% cut for this! |
Buying a small amount (e.g. $50) of stock via eToro “Social Trading Network” using a “CFD”? | As many people here have pointed out, a CFD is a contract for difference. When you invest in stock at eToro, you buy a CFD reflecting a bid on the price movement of the underlying stock, however, you do not actually own the stock or hold any rights shareholders have. The counterparty to the CFD is eToro. When you close your position, eToro shall pay you the amount representing the difference between your buy and sell price for each stock. I suggest you read the following article about CFDs, it explains everything clearly and thoroughly: http://www.investopedia.com/articles/stocks/09/trade-a-cfd.asp#axzz2G9ZsmX3A As some of the responders have pointed out, and as is mentioned in the article, a broker can potentially misquote the prices of underlying assets in order to manipulate CFDs to their advantage. However, eToro is a highly reputable broker, with over 2 million active accounts, and we guarantee accurate stock quotes. Furthermore, eToro is regulated in Europe (Germany, UK, France, etc.) by institutions that exact strict regulations on the CFD trading sector, and we are obligated to comply with these regulations, which include accurate price quoting. And of course, CFD trading at eToro has tremendous benefits. Unlike a direct stock investment, eToro allows you to invest as much or as little as you like in your favorite stocks, even if the amount is less than the relevant stock price (i.e. fraction stocks). For example: if you invest $10 in Microsoft, and on the day of execution eToro’s average aggregated price was $30 after a spread of 0.1%, you will then have a CFD representing 0.33 stocks of Microsoft in your eToro account. In addition, with eToro you can invest in stock in the context of a social trading network, meaning that you can utilize the stock trading expertise of other trader to your advantage by following them, learning their strategies, and even copying their stock investments automatically. To put it briefly, you won’t be facing the stock market alone! Before you make a decision, I suggest that you try stock trading with an eToro demo account. A free demo account grants you access to all our instruments at real market rates, as well as access to our social network where you can view and participate in trader discussions about trading stocks with eToro, all without risking your hard earned money. Bottom line – it’s free, there are no strings attached, and you can get a much firmer idea of what trading stocks with eToro is like. If you have any further questions, please don’t hesitate to contact us through our site: www.etoro.com. |
Should I charge my children interest when they borrow money? | I think there's value in charging family members/friends interest if it will make them take the loan seriously. The problem is that if you're thinking about charging interest because the person seems to be borrowing from you too cavalierly, it may be too late to make them take it seriously. In the situation you describe, if you're concerned about the loans being paid back, I think you need to have a serious conversation with the kids and make it clear you expect them to pay the loans back on whatever schedule you agreed to. If, based on your knowledge of your kids, you think charging interest would help motivate them to do this, great. If not, charging interest is unlikely to accomplish anything that the conversation itself won't accomplish. If you haven't previously outlined a specific schedule or set of expectations for how you want to be paid back, just doing that (in writing) may be enough to make them realize it's not a joke. The conventional wisdom is that you shouldn't lend money to anyone unless you're either a) okay with never being paid back; or b) willing to pursue legal remedies to ensure you're paid back. Most people aren't willing to sue their own family members over small loans, which means in most cases it's not a good idea to loan money to family unless you're "okay with" never being repaid (whatever level of "okay with" makes sense for you). I should note that I don't have kids; my advice here is just how I would handle it if I were considering loaning money to my brother or a close friend or the like. This means I don't really know anything about "teaching the kids about the real world", but I have to say my hunch is that if your kids are 25+ and married, it's too late to radically change their views on how "the real world" works; unless they had a very sheltered early adulthood, they've been living in the real world for too long and will have their own ideas of how it works. |
What happens to all of the options when they expire? | Options that are not worth exercising just expire. Options that are worth exercising are typically exercised automatically as they expire, resulting in a transfer of stock between the entity that issued the option and the entity that holds it. OCC options automatically exercise when they expire if the value of the option exceeds the transaction cost for the stock transfer (1/4 point to 3/4 point depending). |
How many days does Bank of America need to clear a bill pay check | I cannot answer the original question, but since there is a good deal of discussion about whether it's credible at all, here's an answer that I got from Bank of America. Note the fine difference between "your account" and "our account", which does not seem to be a typo: The payment method is determined automatically by our system. One of the main factors is the method by which pay to recipients prefer to receive payments. If a payment can be issued electronically, we attempt to do so because it is the most efficient method. Payment methods include: *Electronic: Payment is sent electronically prior to the "Deliver By" date. The funds for the payment are deducted from your account on the "Deliver By" date. *Corporate Check: This is a check drawn on our account and is mailed to the pay to recipient a few days before the "Deliver By" date. The funds to cover the payment are deducted from your account on the "Deliver By" date. *Laser Draft Check: This is a check drawn on your account and mailed to the pay to recipient a few days before the "Deliver By" date. The funds for the payment are deducted from your account when the pay to recipient cashes the check, just as if you wrote the check yourself. To determine how your payment was sent, click the "Payments" button in your Bill Pay service. Select the "view payment" link next to the payment. Payment information is then displayed. "Transmitted electronically" means the payment was sent electronically. "Payment transaction number" means the payment was sent via a check drawn from our account. "Check number" means the payment was sent as a laser draft check. Each payment request is evaluated individually and may change each time a payment processes. A payment may switch from one payment method to another for a number of reasons. The merchant may have temporarily switched the payment method to paper, while they update processing information. Recent changes or re-issuance of your payee account number could alter the payment method. In my case, the web site reads a little different: Payment check # 12345678 (8 digits) was sent to Company on 10/27/2015 and delivered on 10/30/2015. Funds were withdrawn from your (named) account on 10/30/2015. for one due on 10/30/2015; this must be the "corporate check". And for another, earlier one, due on 10/01/2015, this must be the laser draft check: Check # 1234 (4 digits) from your (named) account was mailed to Company on 09/28/2015. Funds for this payment are withdrawn from your account when the Pay To account cashes the check. Both payments were made based on the same recurring bill pay payment that I set up manually (knowing little more of the company than its address). |
How to spend more? (AKA, how to avoid being a miser) | The key question is this - What brings you happiness? How much is this behavior actually making you miserable? It's possible, and important, to find balance between frugality and as you say, being a miser. It's also important to understand the diminishing return, and to value not just your hour of time but your happiness-hour. By this I mean there's a distinction between an hour arguing with a customer service rep and spending an hour on a project yourself. There are countless people who push a lawn mower around every Saturday even though they have the money to hire a mowing company. Fresh air, exercise, quiet time, for them it makes sense. We pick and choose. The happy mower is in a good place. The miserable mower who hates doing it and just won't spend the money, not so much. Frugal simply means not wasteful, but it can be misunderstood to mean cheap. When our brand of TP is on sale, I'll use coupons, and stock up. Unless you visited and peeked into a cabinet, all seems normal. A visit to a friend's summer home taught us the value of packing a few rolls for a weekend visit into the unknown. Her cheap brand was like sandpaper and every item in her house was a strange brand I'd never heard of, including food items well beyond expiration. She took cheap to a new level. In the end, this question is less about finance than about psychology. |
Do I need multiple credit monitoring services? | Monitoring all three is good practice. That way, you will be notified as soon as there is a hard pull on any of your reports. Most financial institutions only pull one of your three reports to open new credit. If you're only monitoring one, you won't be alerted to new accounts until about a month passes and they are reported to all three. By this time, restoration will be much, much more difficult than if you called the financial institution immediately to say "that's not me!" |
Relation between inflation rates and interest rates | Possibly but not necessarily, though that can happen if one looks at the US interest rates in the late 1970s which did end with really high rates in the early 1980s. Generally interest rates are raised when inflation picks up as a way to bring down inflation. |
Is it a good practice to keep salary account and savings account separate? | My wife and I do this. We have one account for income and one for expenditures (and around 7 others for dedicated savings.) Doing this we are forcing ourselves to keep track of all expenditures as we have to manually transfer funds from one to the other, we try to do this periodically (every Wednesday) and then keep the expenditures within what is actually on the account. It is a really good way to keep track of everything. Bear in mind that our bank provides a fast handy smartphone app where we both can check our account as well as transfer funds in less than 10 seconds. (Fingerprint authentication, instant funds transfer as well as zero fees for transfers.) Right now we have a credit card each attached to the expenditures account, but earlier we only had a debit card each and no credit cards. Meaning that when the weekly funds ran out we where simply not able to pay. We did this to mimic living only on cash and when the cash runs out you simply have to stop buying stuff. And at the same time we could accrue quite a bit of savings. I would definitely recommend this if you have problems with over expenditures. |
What options do I have at 26 years old, with 1.2 million USD? | Others have given a lot of advice about how to invest, but as a former expat I wanted to throw this in: US citizens living and investing overseas can VERY easily run afoul of the IRS. Laws and regulations designed to prevent offshore tax havens can also make it very difficult for expats to do effective investing and estate planning. Among other things, watch out for: US citizens owe US income tax on world income regardless of where they live or earn money FBAR reporting requirements affect foreign accounts valued over $10k The IRS penalizes (often heavily) certain types of financial accounts. Tax-sheltered accounts (for education, retirement, etc.) are in the crosshairs, and anything the IRS deems a "foreign-controlled trust" is especially bad. Heavy taxes on investment not purchased from a US stock exchange Some US states will demand income taxes from former residents (including expats) who cannot prove residency in a different US state. I believe California is neutral in that regard, at least. I am neither a lawyer nor an accountant nor a financial advisor, so please take the above only as a starting point so you know what sorts of questions to ask the relevant experts. |
How do amortization schedules work and when are they used? | Amortization is the process by which your loan balance decreases over time. For both mortgages and credit card balances, your interest charges are based on what you owe. The calculation of the balance is a little different, but it still is based on what you owe. You're observing correctly that most of the first payments on a mortgage are interest. This stands to reason since an amortization schedule (for a fixed-rate mortgage) is constructed on the assumption that you're making your payments equally over the course of the mortgage. Since you owe more at the beginning, you accrue more interest, and a larger fraction of your payment is interest. Near the end, you owe little, and most of your payment, therefore, is principal. |
Is technical analysis based on some underlying factors in the market or do they work simply because other people use them? | Technical analysis is based more on psychology than anything else. As an example, if an analyst estimates or believes that a stock is undervalued, or simply wants to re-balance their portfolio, then they will buy some amount, moving the price up. Others in the market see the upwards move as the start of an upwards trend, an indication that the stock is undervalued or perhaps even that an insider is trading ahead of better than expected data from the firm. They then buy the stock creating a self-fulfilling prophecy and pulling more traders in as they see an upward trend being confirmed. This is even more pronounced in a bear market as fear is an even stronger driver. When a trader sees a stock is falling they are more likely to jump to the conclusion that it is due to expected poor performance of the firm and that the firm and the economy are both in trouble and going down than to think that it is simply a retrenching or a large investor re-balancing etc. To quote Credit Suisse [1] A chart is a mirror of the mood of the crowd and not of the fundamental factors. Thus, technical analysis is the analysis of human mass psychology. Therefore, it is also called behavioral finance. The underlying truth that makes technical analysis work is that people are predictably irrational, at least in the short run and tend to follow the same patterns of thought. references: [1] https://www.credit-suisse.com/pwp/pb/pb_research/technical_tutorial_de.pdf [2] http://www.amazon.com/The-Psychology-Technical-Analysis-Profiting/dp/1557385432 [3] CFA level 1 syllabus |
Is the MBA an overrated degree/qualification? | It depends on what you want it for If it is just salary then maybe not, for instance, some MBA programs may suggest their graduates make $100,000 per year, but you work in an oil field barely finishing high school and make $300,000 a year. If you go for the MBA right now, you may miss your chance to work in the oil industry for another few years (or weeks), but at the same time, the MBA lasts forever (although, real world experience is also relevant) and it may give you a leg up when you are 50 years old in the unemployment line (or maybe not, because you are overqualified) everything in life is a cost/benefit analysis Passing the GRE lasts for five years, so keep that in mind |
Should I fund a move by borrowing or selling other property assets? | It depends what rate mortgage you can get for any extra loans... If you remortgage you are likely to get a rate of 3.5-4%... depending who you go with. With deposit accounts in the UK maying around 1% (yes, you can get more by tying it up for longer but not a huge amount more) clearly you're better off not having a mortgage rather than money in the bank. Does your 8k income allow for tax? If it does, you are getting 6% return on the money tied up in the flat. If you are getting 6% after tax on the invested money, that's way better than you would get on any left over cash paid into an investment. Borrowing money on a mortgage would cost you less than 6%... so you are better off borrowing rather than selling the flat. If you are getting 6% before tax... depending on your tax rate... it probably makes very little difference. You'd need to work out how much an extra 80k mortgage would cost you, how much the 50k on deposit would earn you and how much you make after tax. There is a different route. Set up a mortgage on the rental flat. You can claim the interest payment off the flat's income... reduce your tax bill so the effective mortgage rate on the flat would be less than what you could get with a mortgage on the new house. Use the money from the flat's mortgage to finance the difference in house price. In fact from a tax view, you may be better off having a mortgage free house and maxing out the mortgage on the flat so you can write off as much as possible against your tax bill. All of the above assume ... that the flat is rented all the time. The odd dry spell on the flat could influence the sums a lot. All of the above assume that your cash flow works whichever route you choose. As no-one on stack exchange has all of the numbers for your specific circumstances it may be worth talking to a tax accountant. They could advise you properly, knowing the numbers, which makes the best sense for you in terms of overall cost, cash flow, risk and so on. |
Entering the stock market in a poor economy | If you have a long enough time horizon, investing in the stock market while in a bad economy can turn out to be a very smart decision. If you need access to your capital in the short-term, 1-2 years, then it is probably a bad decision. If you have the ability to ride out the next few years, then you may be buying securities at an extremely low valuation. Take AAPL and MSFT for example. These are both technology stocks, which is by far the hottest sector in the economy now, and you can buy both of these companies for less than 13x earnings. Historically, you would have had to pay 20x or higher for high tech growth companies, but today you can buy these stocks at discounted valuations. Now AAPL may have a large market capitalization and a high stock price, but the simple fact is they are growing their earnings very quickly, they have best in class management, and they have $100 billion in cash and $50 billion in annual cash flow generation and you can buy the stock for a historically low multiple. |
Query regarding international transaction between governments | $USD, electronic or otherwise, are not created/destroyed during international transactions. If India wants to buy an F-16s, at cost $34M USD, they'll have to actually acquire $34M USD, or else convince the seller to agree to a different currency. They would acquire that $34M USD in a few possible ways. One of which is to exchange INR (India Rupees) at whatever the current exchange rate is, to whomever will agree to the opposite - i.e., someone who has USD and wants INR, or at least is willing to be the middleman. Another would be to sell some goods or services in the US (for USD), or to someone else for USD. Indian companies undoubtedly do this all the time. Think of all of those H1B workers that are in the news right now; they're all earning USD and then converting those to INRs. So the Indian government can just buy their USD for INR, directly or more likely indirectly (through a currency exchange market). A third method would be to use some of their currency stores. Most countries have significant reserves of various foreign currencies on hand, for two reasons: one to simplify transactions like this one, and also to stabilize the value of their own currency. A less stable currency can be stabilized simply by the central bank of that country owning USD, EUR, Pounds Sterling, or similar stable-value currencies. The process for an individual would be essentially the same, though the third method would be less likely available (most individuals don't have millions in cash on hand from different currencies - although certainly some would). No government gets involved (except for taxes or whatnot), it's just a matter of buying USD in exchange for INRs or for goods or services. |
How much of my capital should I spend on subscribing to a stock research company? | You should spend zero on your stock research company. If the management of the company actually had persistent skill in picking stocks, they would not be peddling their knowledge to the retail market for a few hundred dollars. They would rake in millions and billions by running a huge hedge fund and buy themselves a private island or something. Unfortunately for them, hedge fund investors are not as gullible as retail investors and are more likely to sue when they discover they have been lied to. Many stock "research" companies are trying to manipulate you into paying too high a price for stocks. They buy a small stock, recommend it, and then sell it at the artificially (and temporarily) high price. Others are simply recommending stocks pretty much at random. You could do that just as well as they can, and for free. Portfolio performance evaluation is a complex problem. The research company knows that its recommendations will "make good money" about half the time and that's enough to bring in a lot of uninformed people. To know whether your portfolio actually did well you need to know how much risk there was in the portfolio and how a competing "dumb" portfolio with similar characteristics fared over the same time period. And you need to repeat the experiment enough times (or long enough) to know the outcome wasn't luck. I can say confidently that your portfolio performance doesn't back up the claim that the research company has skill above and beyond luck. Much less $599 worth of skill. I can also say very confidently that there are no investors with a total of 20 thousand dollars to invest for whom purchasing stock recommendations is worth the cost, even if those recommendations do have some value. Real stock information is valuable only to large investors because the per-dollar value is low. Please do not give money to or otherwise support a semi-criminal "stock research" enterprise. |
Why would my job recruiter want me to form an LLC? | I don't know about the US, but in the UK this is common practice, even required in some situations, and not sketchy at all. It's perfectly legal, saves you tax, and protects you from a legal standpoint. (i.e. what if you break something and your employer wants to sue you?) This is what companies are for, they are legal entities that are separate from an individual. There is no requirement for a company to have more than one employee. |
What reason would a person have to use checks in stores? | It's because they're used to it and it works for them. Everything other reason is meh. Used to, you could float a check to payday... have no money in the account, yet write a check a couple days before payday because you know that's how long it takes for the check to get to your bank and when it does, you'll have the money. But most (if not all) business that still accept checks (a dying subset, for sure) electronically present the check now. They take it from your hand, run it through a machine at the register, and it immediately clears the bank, just like a debit card would. We're nearing the end of the check era, atleast on personal accounts. Kids growing up now won't even know what a check is, aside from it's namesake on a type of bank account. |
What is the opposite of a hedge? | I'd say the opposite of hedging is speculating. If you are convinced an asset will appreciate in value, or rather the probability of gains is enough to induce you to hold the asset, you are a speculator. There are lots of ways of speculating, including holding risky assets without hedging that risk and possibly magnifying that risk and return via leverage or the embedded leverage in a derivative contract. Generally speaking, if in expectation you are paying to reduce your risk, you are a hedger. If you are (in expectation) being paid to bear the risk that otherwise someone else would bear, you are a speculator. The word speculation has been tainted by politicians and others trying to vilify the practice, but at the end of the day it's what we are all doing when we buy stock or any other risky asset. |
Free/open source Unix software that pulls info from all my banks/brokers/credit cards? | Buxfer is a personal-finance web app which you might like. It's not open-source. But at least none of your complaints about financeworks.intuit.com apply to Buxfer. Buxfer offers a piece of software you can download to your own PC, called Firebux. This macro-recording software provides automation that helps you download statements and upload them to Buxfer. So you never have to give Buxfer any of your bank or brokerage usernames or passwords. Buxfer and Firebux are both free of charge. Wesabe, another personal-finance web app, also used to offer data-uploader software, but Wesabe has now gone out of business. |
Why do 10 year-old luxury cars lose so much value? | I think this can be answered by answering the question "Who buys 10 year old cars?". Generally speaking those buyers are very price conscious. They are looking to save money on transportation rather than following the herd of people participating in the car payments merry-go-round. The cost of parts, repairs, and gasoline for those cars do not go down over time. Remember that many of those cars require the use of premium gasoline. This drastically reduces demand for those vehicles, thus lowers the price. Luckily I have a really good and reasonable mechanic near me, and I can float repairs and the higher gas. I love driving my 1999 Mercedes and it is one of the least expensive cars that I have owned while also being one of the most comfortable. |
New car cash vs finance | The question is about the dealer, right? The dealer isn't providing this financing to you, Alfa is, and they're paying the dealer that same "On the Road" price when you finance the purchase. So the dealer gets the same amount either way. The financing, through Alfa, means your payments go to Alfa. And they're willing to give you 3,000 towards purchase of the car at the dealer in order to motivate those who can afford payments but not full cash for the car. They end up selling more cars this way, keeping the factories busy and employees and stockholders happy along the way. At least, that's how it's supposed to work out. |
When can you use existing real estate as collateral to buy more? | @victor has the most descriptive and basic idea on how this is done. The only thing I would add is that one benefit to real estate is that you can control how much the property is worth. By increasing rents and making the property one of the best in the neighborhood, you increase the value. As for the comment that this is the type of investing that caused the 1929 stock market crash, there are many other aspects that are overlooked. Taking equity out of real estate has been happening long before and after the depression. People do it all the time by taking out home equity loans, just not everyone uses it to purchase another investment. |
What do brokerage firms do? | Off the top of my head, a broker: While there are stock exchanges that offer direct market access (DMA), they (nearly) always want a broker as well to back the first two points I made. In that case the broker merely routes your orders directly to the exchange and acts as a custodian, but of course the details heavily depend on the exchange you're talking about. This might give you some insight: Direct Market Access - London Stock Exchange |
Washington State tax filing extension? | Washington State doesn't have a state income tax for individuals, so unless you've got a business there's nothing to file. Find out more on their website. |
In a competitive market, why is movie theater popcorn expensive? | Theaters make pennies off the tickets if any money at all. Their profits come from the concession stand. If a theater priced their popcorn 50 cents less than a nearby competing theater the few if any customers that notice and seek those small savings would be far less than the losses due to charging less. They compete to get you there: providing better sound systems, seating, screens -- even taking a loss on tickets with special deals (like Tuesday bargains). Once inside profit is made by customers willing to pay the concession price premium, and sour patch kids for 15 cents more isn't going to be a deal breaker. |
Are banks really making less profit when interest rates are low? | I've read this claim many times in the news: banks are making less profit from the lending business when interest rates are historically low. The issue with most loans is they can be satisfied at any time. When you have falling interest rates it means most of the banks loans are refinanced from nice high rates to current market low interest rates which can significantly reduce the expected return on past loans. The bank gets the money back when it wants it the least because it can only re-lend the money at the current market (lower) interest rates. When interest rates are increasing refinance and early repayment activity reduces significantly. It's important to look at the loan from the point of view of the bank, a bank must first issue out the entire principal amount. On a 60 month loan the lender has not received payments sufficient to satisfy the principal until around 50th or 55th month depending on the interest rate. If the bank receives payment of the outstanding amount on month 30 the expected return on that loan is reduced significantly. Consider a $10,000, 60 month loan at 5% apr. The bank is expected to receive $11,322 in total for interest income of $1,322. If the loan is repaid on month 30, the total interest is about $972. That's a 26% reduction of expected interest income, and the money received can only be re-lent for yet a lower interest rate. Add to this the tricky accounting of holding a loan, which is really a discounted bond, which is an asset, on the books and profitability of lending while interest rates are falling gets really funky. And this doesn't even examine default risk/cost. |
What is a good asset allocation for a 25 year old? | Check out some common portfolios compared: Note that all these portfolios are loosely based on Modern Portfolio Theory, a theory of how to maximize reward given a risk tolerance introduced by Harry Markowitz. The theory behind the Gone Fishin' Portfolio and the Couch Potato Portfolio (more info) is that you can make money by rebalancing once a year or less. You can take a look at 8 Lazy ETF Portfolios to see other lazy allocation percentages. One big thing to remember - the expense ratio of the funds you invest in is a major contributor to the return you get. If they're taking 1% of all of your gains, you're not. If they're only taking .2%, that's an automatic .8% you get. The reason Vanguard is so often used in these model portfolios is that they have the lowest expense ratios around. If you are talking about an IRA or a mutual fund account where you get to choose who you go with (as opposed to a 401K with company match), conventional wisdom says go with Vanguard for the lowest expense ratios. |
I want to invest in Gold. Where do I go and buy it? | I do not know anything about retail investing in India, since I am in the US. However, there are a couple of general things to keep in mind about gold that should be largely independent of country. First, gold is not an investment. Aside from a few industrial uses, it has no productive value. It is, at best, a hedge against inflation, since many people feel more comfortable with what they consider "real" money that is not subject to what seems to be arbitrary creation by central banks. Second, buying tiny amounts of gold as coin or bullion from a retail dealer will always involve a fairly significant spread from the commodity spot price. The spot price only applies to large transactions. Retail dealers have costs of doing business that necessitate these fees in order for them to make a profit. You must also consider the costs of storing your gold in a way that mitigates the risk of theft. (The comment by NL7 is on this point. It appeared while I was typing this answer.) You might find this Planet Money piece instructive on the process, costs, and risks of buying gold bullion (in the US). If you feel that you must own gold as an inflation hedge, and it is possible for residents of India, you would be best off with some kind of gold fund that tracks the price of bullion. |
What are the tax benefits of a LLC vs a sole proprietorship? | This is going to vary tremendously from country to country (and even from state to state, in some cases). In general, though: Sole proprietorship: LLC: There are a lot of permutations depending on local law. One thing that isn't actually much of an advantage is the "limited liability" component of the LLC. Simply put: for a really small company the majority shareholders are usually going to be "forced" to stand surety for the company in their personal capacity. Limited liability only becomes available once the company has quite a lot of cash/assets (or the illusion of a lot of cash/assets). Update - noticed two further questions that appear very similar: Should all of these be merged? |
Is it taxable if someone return me money? | The $10,000 is not taxable to either of you, but the $500 is taxable income to you - and a deductible business expense for your friend. |
What is the difference between “good debt” vs. “bad debt”? | I think people are conflating two orthogonal sets of terms. Unsecured/secured and good/bad are not synonyms. Debt may be secured or unsecured. If I take a loan against a car or house it is typically secured, so the object is collateral against the loan. Bad debt in financial terms is a loan that is not expected to be recovered. A bank might write off a loan or a portion of a loan as bad debt if the borrower goes bankrupt or into administration for example. Both secured and unsecured loans may be considered bad debt. I think the context in which the question is being asked is how to distinguish between sensible and inadvisable borrowing. An extreme example of inadvisable borrowing would be to buy a PC on a store card. PCs devalue very quickly and a store card may charge 30% APR, so paying the minimum off each month would mean paying more than twice the sticker price for a product that is now worth less than half the original borrowed amount. On the other hand, a 3% mortgage when borrowing less than 60% of the value of a property is a good bet from a lender's perspective, and would be a good debt to have (not as good as no debt, but better thhan a high APR one). |
Online Return Policies | If you paid by credit card, file a dispute with the credit card company. They will credit you the money immediately while they investigate. The burden of proof will then be on the merchant. Keep your documents handy in case you need them: USPS receipt, proof of delivery, copies of all correspondance, etc. File the credit card chargeback now, because there are time limits. The FTC has more information. |
Is there strategy to qualify stock options with near expiry date for long term capital gain tax? | According to page 56 of the 2015 IRS Publication 550 on Investment Income and Expenses: Wash sales. Your holding period for substantially identical stock or securities you acquire in a wash sale includes the period you held the old stock or securities. It looks like the rule applies to stocks and other securities, including options. It seems like the key is "substantially identical". For your brokerage / trading platform to handle these periods correctly for reporting to IRS, it seems best to trade the same security instead of trying to use something substantially identical. |
Beginner dividend investor - first steps | How do I start? (What broker do I use?) We don't make specific recommendations because in a few years that might not be the best recommendation any more. You are willing to do your own research, so here are some things to look for when choosing a broker: What criticism do you have for my plan? Seeking dividend paying stock is a sensible way to generate income, but share prices can still be very volatile for a conservative investor. A good strategy might be to invest in several broad market index and bond funds in a specific allocation (for example you might choose 50% stocks and 50% bonds). Then as the market moves, your stocks might increase by 15% one year while bonds stay relatively flat, so at the beginning of the next year you can sell some of your stocks and buy bonds so that you are back to a 50-50 allocation. The next year there might be a stock market correction, so you sell some of your bonds and buy stock until you are back to a 50-50 allocation. This is called rebalancing, and it doesn't require you to look at the market daily, just on a regular interval (every 3 months, 6 months, or 1 year, whatever interval you are comfortable with). Rebalancing will give you greater gains than a static portfolio, and it can insulate you from losses when the stock market panics occasionally if you choose a conservative allocation. |
(How) can I print my own checks on my printer on regular paper? | There are certain standards that modern checks need to meet. These aren't required by law, but banks today generally insist on them. If you are able to meet these standards and print your own checks at home, you are allowed to do so. One way this is commonly done is with purchased check blanks and check printing software. Office supply stores sell check blanks that fit into standard computer printers. This check paper includes the necessary security features of checks, and using the check printing software, you can print your personal information, including your name & address, your bank's name and address, and your account numbers. The account numbers on the bottom of the checks are called the MICR code, which stands for Magnetic Ink Character Recognition. Normally, these numbers were printed with special magnetic ink, which was used in automated check reading machines. Checks that you purchase from your bank still use magnetic ink; however, modern check readers are optical, and don't require magnetic ink. So you should be able to print checks with your printer using standard ink/toner, and not have a problem. Without purpose-specific check printing software, you could still buy blank check paper from the store, and with a little trial-and-error you could print using Excel. The biggest challenge with doing this would be printing the MICR code: you would probably need to install an MICR font on your computer and play around with the size and location until you get it where you want it. Doing a little Googling, I see that there are some check printing Excel templates out there, but I haven't tried any of these, and it is unclear to me whether they actually print the MICR, or whether they assume that you have blank checks with the MICR account number and check numbers already printed. Without purchasing blank check paper, you won't have any of the security features, such as microprinting, watermarks, erasure protection, anti-photocopying background, etc. As you mentioned, if you are depositing checks via mobile phone app, as some banks now allow, none of these security features are doing any good. The problem, however, is that you are not writing checks for yourself; you are writing checks to other people, and you have no way of knowing whether or not their banks are going to give them trouble with your checks. There is enough check fraud out there that lots of bank tellers are very cautious. I recommend sticking with check paper that has the security features because, if nothing else, it will make your check look more like a real check. |
Are BIC and SWIFT code the same things? | BIC and IBANN are used in EU (and some other OECD countries) for inter bank transfers. SWIFT is used everywhere for interbank transfers. In the US - IBAN system is not (yet, hopefully) available, so you have to use SWIFT. The codes may look the same, but these are different systems. More details here. |
Why is day trading considered riskier than long-term trading? | Day trading is an attempt to profit on high frequency signal changes. Long term investing profits on low frequency changes. What is the difference? High Frequency Signal = the news of the day. This includes things like an earnings report coming out, panic selling, Jim Cramer pushing his "buy buy buy" button, an oil rig blowing up in the ocean, a terrorist attack in some remote region of the globe, a government mandated recall, the fed announcing an interest rate hike, a competitor announcing a new product, hurricanes, cold winters, a new health study on child obesity, some other company in the same sector missing their earnings, etc. Think daily red and green triangles on CNBC: up a buck, down a buck. Low Frequency Signal = The long term effectiveness of a company to produce and sell a product efficiently plus the sum of the high frequency signal over a long period of time. Think 200 day moving average chart of a stock. No fast changes, just, long term trends. Over time, the high frequency changes tend to negate each other. To me, long term investing is wiser because the low frequency signal is dominated by a companies ability to function well over time. That in turn is driven by the effectiveness of its leadership coupled with the skill and motivation of its employees. You are betting on the company and its people. Pseudo-random shorterm forces, which you can't control, play less of a role. The high frequency signal, on the other hand, is dominated by sporadic and unpredictable forces that typically can't be controlled by the company. It has some tinge of randomness about it. Trying to invest on that random component is not investing at all, it is gambling (akin to "investing" in that next coin flip coming up heads) I understand the allure of high frequency trading. Look at the daily chart of a popular stock and focus on the up and down ticks. Mathematically, you could make a killing if you could just stack all those upticks on top of each other. If only it was that easy. |
How will I pay for college? | First, it's clear from your story that you very likely should be able to receive some financial aid. That may be in the form of loans or, better, grants in which you just get free money to attend college. For example, a Pell grant. You won't get all you'd need for a free ride this way, but you can really make a dent in what you'd pay. The college may likely also provide financial aid to you. In order to get any of this, though, you have to fill out a FAFSA. There are deadlines for this for each state and each college (there you would ask individually). I'd get looking into that as soon as you can. Do student loans have to be paid monthly? Any loan is a specific agreement between a lender and a borrower, so any payment terms could apply, such as bimonthly or quarterly. But monthly seems like the most reasonable assumption. Generally, you should assume the least favorable (reasonably likely) terms for you, so that you are prepared for a worst-case scenario. Let's say monthly. Can I just, as I had hoped, borrow large sums of money and only start paying them after college? Yes. That is a fair summary of all a student loan is. Importantly, though, some loans are federal government subsidized loans for which the interest on the loan is paid for you as long as you stay in college + 6 months (although do check that is the current situation). Unsubsidized loans may accrue interest from the start of the loan period. If you have the option, obviously try hard to get the subsidized loans as the interest can be significant. I made a point to only take subsidized loans. WARNING: Student loans currently enjoy a (nearly?) unique status in America as being one of the only loan types that are not forgivable in bankruptcy. This means that if you leave college with $100,000 in debt that begins accruing interest, there is no way for you to get out of it short of fleeing the country or existence. And at that point the creditors may come after your mother for the balance. These loans can balloon into outrageous amounts due to compounding interest. Please have a healthy fear of student loans. For more on this, listen to this hour long radio program about this. Would a minimum wage job help, Of course it will "help" but will it "help enough"? That depends on how much you work. If you make $7.50/hr and work 20 hrs/week for all but 3 weeks of the year, after taxes you will be adding about $6,000 to offset your costs. In 3 years of college (*see below), that's $18,000, which, depending on where you go, is not bad at helping defray costs. If you are at full-time (40 hrs), then it is $12k/yr or $36k toward defraying costs. These numbers are nothing to sniff at. Do you have any computer/web/graphics skills? It's possible you could find ways to make more than minimum wage if you learn some niche IT industry skill. (If I could go back and re-do those years I wouldn't have wasted much time delivering pizzas and would have learned HTML in the 90s and would have potentially made some significant money.) would college and full-time job be manageable together? That's highly specific to each situation (which job? how far a commute to it? which major? how efficient are you? how easily do you learn?) but I would say that, for the most part, it's not a good idea, not only for the academic-achievement side of it, but the personal-enrichment aspect of college. Clubs, sports, relationships, activities, dorm bull sessions, all that good stuff, they deserve their space and time and it'd be a shame to miss out on that because you're on the 2nd shift at Wal-Mart 40hrs/week. How do I find out what scholarships, grants, and financial aid I can apply for? Are you in a high school with a career or guidance counselor? If so, go to that person about this as a start. If not, there are tons of resources out there. Public libraries should have huge directories of scholarships. The Federal Student Loan program has a website. There are also a lot of resources online found by just searching Google for scholarships--though do be careful about any online sources (including this advice!). Sermon: Lastly, please carefully consider the overall cost vs. benefit to you. College in 2012 is anything but cheap. A typical price for a textbook is $150 or more. Tuition and board can range over $40k at private colleges. There is a recent growing call for Americans to re-think the automatic nature of going to college considering the enormous financial burden it puts many families under. Charles Murray, for one, has put out a book suggesting that far too many students go to college now, to society's and many individuals' detriment (he's a controversial thinker, but I think some of his points are valid and actually urgent). With all that said, consider ways to go to college but keep costs down. Public colleges in your state will almost always be significantly cheaper than private or out-of-state. Once there, aim for As and Bs--don't cheat yourself out of what you pay for. And lastly, consider a plan in which you complete college in three years, by attending summer courses. This website has a number of other options for helping to reduce the cost of college. |
My boss wants to buy me a gift. How do I account for taxes for this? | The way I have seen this done in the past is the business will withhold taxes on the amount of the gift. Very much like receiving a bonus. There are probably other ways to do it where taxes are avoided like you boss could buy the gift for you personally. Not sure about all the legal ways to avoid taxes on this. |
Can i have NRE accounts without OCI card? | No, you do not need an OCI card to continue to have an NRE or NRO account. You are now classified as a PIO -- Person of Indian Origin -- (and you don't need to have a PIO card issued by the Government of India to prove it) and are entitled to use NRE and NRO accounts just as you were when you were a NRI (NonResident Indian). But, you should inform the banks where you have NRE and NRO accounts that you have changed citizenship, and they may need to go through their KYC (Know Your Customer) process with you all over again. If you don't get an OCI Card, you will need to have an Indian visa stamped into your new US passport to visit India, and please do remember to send your Indian passport to the nearest Indian Consulate for cancellation. Keep the surrender certificate and cancelled passport in your safe deposit box forever; your grandchildren will need it to get visas to visit India. (My granddaughter just did). If you do get an OCI Card, you will need to have an OCI stamp put into your new US passport, and when you renew your US passport, you will need to get the new one stamped too (and pay the fee for that, of course). You cannot enter India with just an OCI Card and a US passport without the OCI stamp in it; that stamp is vital. If you move from one residential address in the US to another, you will need to get a new OCI Card issued because, unlike the US "green card", the OCI card has your residential address on it. Once again, a fee is involved. All these processes take many weeks because the whole paperwork has to go to the Ministry of External Affairs in New Delhi, and meanwhile, your passport is not available to you for a trip to Europe or Japan or Taiwan or China if you need to go there on business (or for pleasure). |
I want to invest and save for my house downpayment at the same time | Yes you should invest; and yes you should save for the house down payment. These should be two separate pools of money and the goals and time frames for them are different. With a 3 year time frame for the down payment on the house, the risk you should accept should be essentially zero. That means it is less of an investment and more plain vanilla savings account, or maybe a higher interest account, or a CD. The worst thing to have happen would be to try and save for the house while the value of your investment keeps dropping. You have to decide how to allocate your income between retirement accounts and saving for the house, while still meeting all your other obligations. The exact balance depends on how much you need to save for retirement, and things such as rules for the company match. |
First time home buyer. How to negotiate price? | First of all, never ask a realtor for advice. The realtor represents the SELLER. Blankip's advice above is by far the most accurate of the previous answers. The first step is to estimate the market. Look at past sales in the neighborhood over time, and from them estimate the prospects for the house at different time durations. Based on other sales, how fast do you think the house will sell at a given price? 60 days, 90 days, a year? If a house is high priced, that means the seller is prepared to wait. He is saying "I am happy to wait a year to find somebody who will pay this." Next, who is the owner? Young professional? Retiring couple? Landlord? Flipper? Who is it? The more you know about the owner, the better. Everybody has a time table, you need to find out what that is. Next, what is YOUR timetable? You need the house by the end of the month, or by the end of the year, or never, which is it? Objectively rate the house. Plusses and minuses. Good houses are those which everybody else hates and you love. You will get the best price there. (Assuming you need to find a house in 90 days) Based on these considerations determine the lowest price you think the owner will accept in a 30-day time frame. Make a written offer with an address and email, no phone number. If he comes back with a counter offer, ignore it. If for some reason a realtor has your number and calls you, tell them "My written offer speaks for itself. I have nothing further to say." It is very important not to entertain haggling or counter offers. Don't even pick up the phone. He has your WRITTEN offer. He can email or write you: I accept. If the 30-days elapse, move onto your #2 choice and make a more aggressive offer. If that doesn't work, go to choice #3 and accept the listed price. This strategy may seem counter-intuitive because the natural tendency for people is to want to communicate. Trust me: the way to succeed in a negotiation is to NOT communicate. Make your offer and that is that. That is the pro way to do it, and will produce the best result for a short-term situtation. Long term situation If you are an investor ("flipper"), or have a lot of time to wait/spend, you can use a different strategy which involves pressuring the seller. What you do here is find a property you want in which the owner is vulnerable. That means someone who is old, bankrupt, out of work, indicted and on their way to prison or already in prison, etc. Bank owned properties fall into this category. In this case you figure out the 6-month price or however long you are willing to work on it. Then you pester the person. Become their buddy. Visit them in prison. Take the bank officer to lunch. Show up on holidays. Invite them to Thanksgiving. Start a relationship. Every two weeks you pester them. Want to sell yet? Want to sell yet? You basically harass them until they capitulate. Maybe it takes 6 months. Maybe it takes 2 years. Eventually they will give in. By this means you can get a much better deal than in strategy 1 above, but it takes a lot more time and effort and is appropriate more for an investor. |
If the co-signer on my car loan dies, can the family take the car from me like they're threatening to? | I think Joe is right, it seems that you will get the car once grandpa passes. It clearly states that on the DMV page. I would work like crazy to get this car paid off ASAP. Work extra and see if you can get it paid off in less than a year. Once paid off, have grandpa sign it over to you. This is a really toxic situation that you can reduce somewhat by having the car in your name only. Learn from this: have a will and keep it up to date. There is going to be a lot of fighting over the assets that grandpa leaves behind. You don't want that to be your legacy, and you don't want to tarnish your grandfathers memory by participating in such nonsense. My concern is why you have such poor credit. Understand that poor credit is a choice of behavior and there is no one to blame but yourself. I would recommend to stop borrowing completely until this car is paid off and all of your obligations are paid back (that is if you have items that are in collections). No vacations, no eating out, etc... Work don't spend. |
What's the average rate of return for some of the most mainstream index funds? | This page from simplestockinvesting.com gives details of total returns for the S&P500 for each decade over the last 60 years, including total returns for the entire 60 year period. It is important to understand that, from an investors point of view, the total return includes both the change in index value (capital gain) plus dividends received. This total then needs to be adjusted for inflation to give the "total real return". As noted in the analysis provided, 44% of the total return from the S&P500 over the last 80 years comes from dividends. For the DowJones30, this site provides a calculator for total returns and inflation adjusted total returns for user selected periods. Finding comparable analysis for the NASDAQ market is more difficult. The NASDAQ market site provides gross values for total returns over fixed periods, but you will then need to do the arithmetic to calculate the equivalent average annual total returns. No inflation adjusted values for "real" returns are provided, so again you will need to combine inflation data from elsewhere and do the arithmetic. |
Investing in stocks with gross income (not yet taxed) cash from contract work? | In most jurisdictions, you want to split the transactions. Why? Because you want to report capital gains on your investment income, and this will almost always be taxed at a lower rate than employment income. See Wikipedia's article for more information about capital gains. In Canada, you pay tax on 50% of your realized capital gains. There are also ways to shelter your gains from tax; in Canada, TFSA, in the US, I believe these are 'roth' accounts. I actually think you have to split the transactions, at least in Canada and the U.S., though I'm not absolutely sure. Regardless, you want to do so if you plan on making money with your investments. If you plan on making a loss, please contact me as I'm happy to accept the money you are planning on throwing away. |
Where can I find a Third Party Administrator for a self-directed solo 401K? | You setup a self-directed solo 401k by paying a one time fee for a company to setup a trust, name you the sole trustee, and file it with the IRS. None of these companies offer TPA because it opens them up to profit leaching liability. After you have your trust setup, you can open a brokerage account or several with any of the big names you want (Vanguard, Fidelity, Ameritrade, etc), or just use the money to flip houses, do P2P lending, whatever, the world is your investment oyster. If the company has recurring fees you need to ask what is going on because if they aren't offering TPA services, then what the heck could they be charging you for? I did see one company, I think it was IRA Financial Group, that had the option of having a CPA do TPA for you for a recurring fee, but I would pass on that. The IRS administration requirements are typically just the 5500-EZ that you have to file as a hard copy by July 31 if your investments are worth more than $250k, on December 31. Yes, you have to get the actual form from the IRS, write on it with a pen and mail it to them every year, barbaric. You can either have your accountant do it or do it yourself. If you're below $250k just google solo 401k rule change two or three times a year and don't try to launder money. If anything, the rules will loosen with time, I don't imagine the Republican Congress cracking down on small business owners any time soon. |
Option on an option possible? (Have a LEAP, put to me?) | I can sell a PUT on it a bit out of the money, and I seemingly "win" either way: i.e. make money on selling the PUT, and either I get to pick up the stock cheaper if XYZ goes down, or the PUT expires worthless. In 2008, I see a bank stock (pick one) trading at $100. I buy that put from you, a $90 strike, and pay you $5 for the option. The bank blew up, and trades for a dollar. I then buy the $1 share and sell it to you for $90. You made $500 on the sale of the put, but lost $8900 when it went bad. You don't win either way, there is a chart you can construct (or a table) showing your profit or loss for every price of the underlying stock. When selling a put, you need to know what happens if the stock goes to zero since the odds of such an occurrence is non-trivial. A LEAP is already an option. With the new coding scheme for options, I'm not sure there's really any distinction between a LEAP and standard option, the LEAP just starts with a long-till-expiration time. There are no options on LEAPS that I am aware of, as they are options already. |
Digital envelope system: a modern take | My wife and I use a digital form of the envelope system. We call it a budget; we record how much we want to allocate each month to spend--for each category of expense--in a spread sheet. Why use prepaid cards? Why not open a bunch of bank accounts and use debit cards from each if you want to separate the money? You could also keep a ledger for each account that you spend from on a smart phone or even in a physical ledger. The reason for the envelope method is that it psychologically hurts some people to physically part with cash. Once you digitize it in some factor, you lose what is the primary touted benefit, and it's no longer the envelope system. The secondary benefit that--once the budget for one category is gone, it's gone--is only as good as the discipline you have to not rob cash from another envelope; why is this any easier than the discipline of not debiting beyond the bottom of the ledger? So a budget IS a digital version of the envelope system; once the physical cash is removed from the equation, it's definitely not the envelope system. Sorry for the contrarian take on this question, but I've never been a fan of the envelope system for many of the reasons you have described. I guess I'm too young for the cash psychology to work for me. |
If I were to get into a life situation where I would not be able to make regular payments, do lenders typically provide options other than default? | For insight on what will happen, I suggest looking at the situation from the lender's perspective: If your setbacks are temporary, and you are likely to get back on your feet again, they will protect their investment by making accommodations, and probably charging you extra fees along the way. If your financial hardship seems irredeemable, they probably try to squeeze you for as much as possible, and then eventually take your house, protecting their investment as best they can. If they are going to foreclose, they may be reluctant to do it quickly, as foreclosure is expensive, takes man power, and looks bad on their books. So it may get pushed off for a Quarter, or a fiscal year. But if you are asking if they'll help you out from the goodness of their heart, well, a bank has no heart, and creditors are interested in ROI. They'll take the easiest path to profit, or failing that, the path to minimum financial losses. The personal consequences to you are not their concern. Once you realize this, it may change your thinking about your own situation. If you think you have a path to financial recovery, then you need to make that clear to them, in writing, with details. Make a business case that working with you is in their own best interests. If you cannot make such a case, recognize that they'll likely squeeze you for as much as possible in penalties, fees, interest payments, etc, before eventually foreclosing on you anyway. Don't play that game. If your home is a lost cause financially, plan how to get out from it with the smallest losses possible. Don't pay more than you need to, and don't throw good money after bad. |
Saving $1,000+ per month…what should I do with it? | Daniel, first of all, I'm jealous of your predicament. That said, I think you've gotten some good advice already, so I won't repeat what's been said. But I will throw out a few ideas that haven't come up. My first thought is that you may be underestimating upcoming expenses. It sounds like your current expenses are low, and that's great! I'm impressed that you're living below your means, and looking for the best way to use your extra cash. But you may not be thinking of a few things. You have a girlfriend, and maybe your relationship isn't such that you are planning a wedding quite yet. But, regardless of whether your current girlfriend is your future life partner or not, if you think marriage may be in your future at all, you'll save yourself a lot of stress if you've got some savings for a wedding in place before you're ready to commit. Next, what are you driving? If it's a good car that you expect to last you another 10 years, you're probably ok right now. But if you may need to replace your vehicle in the next few years, start saving now and you may be able to buy it outright. (I expect your interest rate on financing a car would be higher than your current student loan rates, so I would save for a car before paying down loans with such beautiful rates.) A house has already been discussed, and there was also mention of additional education, and both of those require a solid financial plan that begins far in advance. In summary, I think you need a lot more than $5K in savings. Sure, have some fun, and take advantage of opportunities to travel, etc, as they come along, but if you're able to bump your savings by $500 to $1000/month, I think you'll really be glad you did. When it comes time for a new car, or you find you're ready to settle down, it will be nice to have somewhere to draw from, and if there's only $5K in your savings, you may come to regret choices you made when you were 22. |
What percent of my salary should I save? | Its been years since I lived there, but I found Seattle to be pretty expensive. Housing costs seem out of line with expected salaries. Coming from Puerto Rico you might be shocked how expensive it is to live there, and also how infrequently you see the sun. Your question is highly subjective. One person would need 100K to cover those things you are talking about, while others would need less then 30K. Also where you live in the Seattle area makes a difference. Will you be in Redmond or Bothell? Housing costs vary considerably. One nice thing about that part of the country is can be very inexpensive to vacation. A fishing license, a packed lunch, and a bit of gas is all that is necessary to really enjoy that part of the country. Back in the day I used to ski Steven's Pass during the week, and the lift tickets were a 1/3 of the weekend rate. Having hiking/camping gear and or a bicycle is also a good way to enjoy life. Bottom line I would make a budget, and go from there. If you intend on retiring in PR, then you would need a lot less then if you choose to remain in Seattle so even that is subjective. Perfect Example, Marysville, which is way out of town so a commute would be a problem. However, unlike many parts south of Seattle, it is safe and nice. ~200K for a 1200 sq ft home. Holy cow. Here in Orlando, figure about 130K for the same home with less of a commute. And you will see the sun more than 5 days per year. |
Loan to son - how to get it back | I think you've made a perfectly valid suggestion, and, if your son is struggling somewhat financially now, one that may be very welcome. If you agree to forgive the debt at this time in lieu of a similar amount forgone in future inheritance, it will eliminate the never ending interest-only payments, free up $200+ a month for you son on a tight budget, and improve your own credit score once you pay off the credit line. It's also, in my opinion, a good idea to be open about this in advance with your other children heirs so that everyone will understand what is expected during the eventual probate. My paternal grandfather was the recipient of a great deal of financial largess from his wealthy mother during her life, and it was fully understood by him, her, and his siblings, that in exchange he would not share in her estate when she passed. He didn't, there were no problems, and he and his siblings stayed close for the rest of their lives. |
Can housing prices rise faster than incomes in the long run? | When over the long term housing costs in a area rise faster than wages rise, the demographic of who lives in the area changes. The size and income parameters change. A region that was full of young singles is now populated with couples with adult children, that means that the businesses and amenities have to change. At a national level it isn't sustainable unless other items change. The portion of monthly income that can be safely allocated to housing would have to change. One adjustment could be the the lengthening of home loan periods, thus dropping the monthly payment. This has been seen with car loans, over the last few decades the length of loans has increased. In interesting related event could be the change in deduction of mortgage interest and property tax. If this was to change abruptly, there could be an abrupt change the estimated value of housing, because the calculus of affordability would change. |
Is it possible to trade CFD without leverage? | If you don't need leverage, then it's a better idea to just buy the underlying sock itself. This will net you the following benefits: Leverage is for speculating. If you don' want to be leveraged, then invest long term. |
Is there a law or regulation that governs the maximum allowable interest amount that can be charged on credit cards or in agreements where credit is extended? | In the US, usury is complicated and depends on the type of account, the bank charter and the where the bank makes credit decisions. Most major US credit cards are issued by entities in Utah, South Dakota and Delaware. None of these states have usury limits. Many states have usury limits. In New York, for example a loan may not exceed 16% interest, if the institution is supervised by the State. Credit card issuers are usually chartered as "National Associations" (ie Federally chartered banks regulated by the Comptroller of the Currency). There is no Federal usury statute, and Federally chartered banks are allowed to "export" many of the regulations of the state where credit decisions are made. Small states like South Dakota basically design their banking regulations to meet the needs of the banks, which are major employers. |
Should I pay off my credit card online immediately or wait for the bill? | I have money withdrawn near when the bill is due (not early at all) and my credit score is top-notch. It's far, far more important that you don't pay late. I don't think paying early earns you brownie points with FICO. Now, if you have an interest-bearing checking account, and if you pay your balance in full each month, and are very, very organized, then paying at the last minute, but on time, lets you take full advantage of the free float that the credit card issuer gives you. If you have trouble rubbing two brain cells together when it comes to bills (like I do sometimes) then either set up auto-deduct from your checking account or pay the bill as soon as it comes in. |
I'm 23 and was given $50k. What should I do? | I'd be tempted to pay off the 35k in student loans immediately, but if you have to owe money, it's hard to beat zero percent. So I don't think I would pay it all off. Maybe cut it in half to make it a more comfortable payment. Currently, you are looking at $6K a year to pay them off, which is about 20% of your income. Cut that in half and you will sleep better! Definitely pay off the medical and credit cards. You're probably paying 20% on that. Clean it up. If you need a car, buy yourself a car. You have no savings, so I would put the rest in some kind of money market savings account. You are at an age where many people go through frequent changes. Maybe you get your own place, and you'll need to furnish it. Maybe you go back to school. Maybe you get married or have kids. Maybe you take a year off and backpack through Europe or Asia. You have a nice little windfall that puts you in a nice position to enjoy being young, so I would not lock it up into a 401k or other long term situation. |
What are the common moving averages used in a “Golden Cross” stock evaluation? | Not sure why this hasn't received any answers yet... the link to the investopedia page you posted explains it pretty well, however when you hear about a golden cross in the media, it is most likely a reference to the 50-day SMA crossing above the 200-day SMA. In general, a golden cross consists of a short term MA that was previously below a long term MA crossing above that LT MA, however the most common reference will imply a 50/200 day cross because this is considered as a stronger signal (compared to shorter MAs). With that said, it's important to realize that the golden cross is just one of many technical analysis "signals", and the entire field of technical analysis is considered controversial, to say the least. Many studies, such as those examined in A Random Walk Down Wall Street, have found that after transactions costs are considered (e.g., the commissions you pay to your broker on every trade), "charting" is a losing proposition in the end. |
Personal Loan: How to define loan purpose | I would imagine that it goes beyond purpose and also addresses the demographic as a poor credit risk. Those seeking a post secondary education are a poor credit risk. They are at the beginning of their careers so tend to have low income, a short credit history, and a very short time of managing money on their own. Also many don't know how to work. This later fact, to me, is a great predictor of financial success. Reading into the financial data surrounding student loans, it pretty easy to see that this demographic makes poor money decisions. I live near a state university. A large percentage of students drive late model luxury cars, frequent expensive bars and restaurants, and wear pretty nice clothes. They also graduate with, on average 60K in student loans. Keep in mind a 4 year degree could be had for about 30K and could be paid for working a part time job. And that, to me, is the wisdom in bank's decision. Sure they will loan you all the money you want with a government guarantee. However, once that disappears they will not you money for unnecessary purposes. |
What steps are required to transfer real estate into a LLC? | especially considering it has a mortgage on it (technically a home equity loan on my primary residence). I'm not following. Does it have a mortgage on it, or your primary residence (a different property) was used as a security for the loan? If it is HELOC from a different property - then it is really your business what to do with it. You can spend it all on casinos in Vegas for all that the bank cares. Is this a complicated transaction? Any gotchas I should be aware of before embarking on it? Obviously you should talk to an attorney and a tax adviser. But here's my two cents: Don't fall for the "incorporate in Nevada/Delaware/Wyoming/Some other lie" trap. You must register in the State where you live, and in the State where the property is. Incorporating in any other State will just add complexity and costs, and will not save you anything whatsoever. 2.1 State Taxes - some States tax LLCs. For example, in California you'll pay at least $800 a year just for the right of doing business. If you live in California or the property is in California - you will pay this if you decide to set up an LLC. 2.2 Income taxes - make sure to not elect to tax your LLC as a corporation. The default for LLC is "disregarded" status and it will be taxed for income tax purposes as your person. I.e.: IRS doesn't care and doesn't know about it (and most States, as well). If you actively select to tax it as a corporation (there's such an option) - it will cost you very dearly. So don't, and if someone suggest such a thing to you - run away from that person as fast as you can. Mortgages - it is very hard to get a mortgage when the property is under the LLC. If you already have a mortgage on that property (the property is the one securing the loan) - it may get called once you transfer it into LLC, since from bank's perspective that would be transferring ownership. Local taxes - transferring into LLC may trigger a new tax assessment. If you just bought the property - that will probably not matter much. If it appreciated - you may get hit with higher property taxes. There are also many little things - once you're a LLC and not individual you'll have to open a business bank account, will probably need a new insurance policy, etc etc. These don't add much to costs and are more of an occasional nuisance. |
Should I include my hard assets as part of my net worth? | Net worth is interesting as it can have a different number assigned depending on your intent. The number I focus on is my total retirement account and any brokerage account. I purposely exclude the value of my house.* This tells me how much I'm able to invest. My heir would look at it a bit differently. She'd have the cash not only from the house, but from every bit of our possessions that can be sold. For my own purposes, knowing I have a piece of art that might sell for $xxx doesn't mean much, except for insurance purposes. In your case, if the coins are gold, and held for investment, count them. If they were your grandfather's and you plan to leave them to your own grandkids, I'd leave them out. * I make this point for two reasons - as someone with an eye toward retirement, the house doesn't get included in the 4% return math that I apply to the retirement and stock accounts. Also, in our situation, even when we downsize at retirement, the move isn't likely to pull much cash out of the house, it will be a lateral move. For those who plan to move from a McMansion in the suburbs of NY or Boston to a modest home in a lower cost of living elsewhere, that difference may be very important, and should be taken into account. This is simply how we handle this. |
How can we determine how much income our savings could generate if we purchase an annuity? | Note that it isn't always clear that "turning it all into an annuity" is the right answer. Annuities are essentially insurance policies -- you're paying them a share of your income to guarantee a specific payout. If you outlive the actuarial tables, that may be a win. If the market crashes, that may be a win. But I'm increasingly hearing the advice that staying in investments (albeit in a very conservative position) may pay better longer. There are tools which will do monte-carlo modelling based on what the market has done in the past. You give them your estimate of how much in today's dollars would be needed to "maintain your lifestyle", and they'll tell you how much savings you need -- and what form you might want to keep those savings in -- to have good odds of being able to live entirely off the earnings and never touch the capital My employer makes such a tool available to us, and in fact Quicken has a simpler version built into it; it's nice that the two agree. |
Can company owners use lay offs to prevent restricted stock from vesting before an acquisition? | Depending on your local laws, such a layoff may be an unlawful act. If the whole purpose of the lay-off is to strip the employees of their RSU's, the employer may be liable and get sued. However, you have to check that with a lawyer licensed in your jurisdiction. In many places there are no laws against this. In any case, you may claim that there was no good faith/just cause in the action and still sue the employer. Mere threat of a lawsuit may thwart the whole deal, so I suggest the employees to lawyer up and talk to the employer. That, by the way, will require to create a union - a representative body for the employees. In some places that by itself may be a just cause for termination (in some extremely anti-union jurisdictions, I would guess if there were some they would be in the US). Bottom line - talk to a lawyer. |
Treatment of web domain ownership & reselling for tax purposes: Capital asset, or not? | As others have said, please talk to a professional adviser. From my quick research, domain names can only be amortized as 197 intangible if it's used for the taxpayer's business. For example, if Corp A pays $200,000 for corpa.com and uses that to point to their homepage, they can amortize it over 15 years as a 197 intangible. (Please refer to this IRS memo https://www.irs.gov/pub/irs-wd/201543014.pdf.) The above memo does not issue any guidance in your case, where domains are purchased for investment or resale. Regarding domain names, the U.S. Master Depreciation Guide (2016) by CCH says: Many domain names are purchased in a secondary market from third parties [...] who register names and resell them at a profit. These cost must be capitalized because the name will have a useful life of more than one year. The costs cannot be amortized because a domain name has no useful life. So your decision to capitalize is correct, but your amortization deductions may be challenged by the IRS. When you sell your domain, the gain will be determined by how you treat these assets. If you treat your domains as 197 intangibles, and thus had ordinary deductions through amortization, your gain will be ordinary. If you treated them as capital assets, your gain will be a capital gain. Very conceptually, and because the IRS has not issued specific guidelines, I think holding domain names for resale is similar to buying stock of a company. You can't amortize the investment, and when you sell, the gain or loss is a capital gain/loss. |
Finance the land on a non-financeable house? | Some lenders will make loans for vacant land, others will not. You have to discuss with local bank what are your plan for the land: live in the old mobile home; install a new mobile home; build a new house; Sell it to a developer; use it for camping... Is the property part of a development with other mobile homes? If so there may be complications regarding the use and rights of the property. Some local jurisdictions also want to eliminate mobile homes, so they may put limitations on the housing options. |
How much money do I need to have saved up for retirement? | Invest in kids, not pension - they never inflate. Without kids your retirement will be miserable anyway. And with them you'll be good. Personally, I do not believe that that our current savings will be worth it in 30 years in these times. |
What does inflation mean to me? | Everyone buys different kinds of goods. For example I don't smoke tobacco so I'm not affected by increased tobacco prices. I also don't have a car so I'm not affected by the reduced oil prices either. But my landlord increased the monthly fee of the apartment so my cost of living per month suddenly increased more than 10% relative to the same month a year before. This is well known, also by the statistical offices. As you say, the niveau of the rent is not only time- but also location specific, so there are separate rent indices (German: Mietspiegel). But also for the general consumer price indices at least in my country (Germany) statistics are kept for different categories of things as well. So, the German Federal Statistical Office (Statistisches Bundesamt) not only publishes "the" consumer price index for the standard consumer basket, but also consumer price indices for oil, gas, rents, food, public transport, ... Nowadays, they even have a web site where you can put in your personal weighting for these topics and look at "your" inflation: https://www.destatis.de/DE/Service/InteraktiveAnwendungen/InflationsrechnerSVG.svg Maybe something similar is available for your country? |
Should I buy ~$2200 of a hot stock or invest elsewhere? | Your debt is insane. Forget investing, pay off your debt. You owe 100% of your salary, with only one smallish asset (6K in the bank). Sure you have a car, but the value of the car is falling rapidly and can be taken to near zero by a simple accident. Once you have your debts paid off (or at least to a reasonable level) you can think about investing. The 401K is the best place to start as you alluded to. Okay so you have some money left over and you want to do some other investing. What is the goal of that investing? If your desire is to learn about the stock market, and play a bit, then sure, by a few shares of some hot stock. If your goal is to buy a house, then a savings account is probably best. It all depends on what you want to do. |
what are the pros and cons of structured deposits? | Say we are in 'normal times.' Passbook rates are 5% or so. Longer rates, 6-7%. I offer you a product with these terms, for $10,000 I will return a "Guaranteed" $10,000 in 6 years and based on the stock market, 1% for every 2% the S&P is up beyond 10% at maturity. As the seller of this product, I take $6666, and buy a fixed investment, 6 years at 7% in treasuries will return the $10000. Really. I then take the $3334 and buy out of the money calls on the S&P each year to capture the gains, if any, and to deliver on my promise. This is one example of a structured deposit offering. They can have nearly any terms one can imagine. Tied to any product. S&P, Crude Oil, Gold. Whatever. |
Owner-Financed home sale or Land Contract — how to handle the transaction and the ongoing entity? | Great question, but I'm thinking you'll want to get a professional who can look at your specific situation and do it right. I wouldn't go solely on advice here. Having said that, though, my decidedly non-professional advice: The other alternative is to take a bit of a profit hit, and demand that the seller pay cash. Then the transaction becomes much easier and quicker. But again, I urge you to have a pro look at this! |
Do I have to repay the First-Time Homebuyers tax credit if I refinance? | No. As long as you live in the house for 3 years, it's yours to keep. Financing has nothing to do with that. |
Mortgage sold to yet another servicer. What are my options? | You would need to check the original mortgage papers you signed with the originators. Chances are you agreed to allow the mortgage to be sold and serviced by other parties. Refinancing would also put you in the same boat unless you got them to take that clause out of the mortgage/refinance papers. Also, chances are most small banks and originators simply can not keep mortgages on their books. There are also third parties that service loans too that do not actually own the mortgages as well. This is another party that could be involved out of many in your mortgage. I would also not worry about 127/139 complaints out of 1,100,000 loans. Most probably were underwater on their mortgage but I am sure a few are legitimate complaints. Banks make mistakes (I know right!). Anyway, good luck and let me know if you find out anything different. |
Do I pay a zero % loan before another to clear both loans faster? | Keep in mind that by fully paying off one of your loans, you will reduce your minimum repayments. This will make you feel richer than you actually are. This will make you buy stuff that it seems like you can afford, probably putting some of it on credit. As you can't actually afford this, this will leave you, in a years time, with the same amount of debt you have now or more, but with a slightly bigger tv. Assuming your home loan has no penalties for paying off extra, then put all 11k into there to keep your monthly repayments as high as possible. |
Will prices really be different for cash and cards? | There are many gas stations where I live that already have different prices if you pay for cash vs. credit. In addition, some small businesses are doing this as well. My wife bought a birthday cake from a bakery. If you paid with cash, you saved 5%. |
How to calculate the number of months until a loan is paid off (given principal, APR and payment amount)? | The formula for determining the number of payments (months) you'll need to make on your loan is: where i=monthly interest rate (annual rate / 12), A=loan amount (principal), and P=monthly payment. To determine the total interest that you will pay, you can use the following formula: where P=monthly payment, N=number of payments (from above formula), and A=loan amount (principal). A quick example: using the numbers in the screenshot above ($10,000 loan, $500 monthly payment, 10% APR), the number of payments ends up to be 21.97 (which means that payment number 22 is slightly less than the rest). In the second formula, you take that number times your $500 payment and determine that you have paid $10,984.81 over the course of the entire loan period. Subtracting the principal, you have paid $984.81 in total interest. On your spreadsheet, the function you are looking for is NPER: NPER(rate, payment_amount, present_value, [future_value, end_or_beginning]) rate - The interest rate. (This should be the monthly rate, or the annual rate divided by 12.) payment_amount - The amount of each payment made. (For a loan payment, this should be a negative number.) present_value - The current value of the annuity. (The initial principal of the loan) future_value - [ OPTIONAL ] - The future value remaining after the final payment has been made. (This should be 0, the default if omitted.) end_or_beginning - [ OPTIONAL - 0 by default ] - Whether payments are due at the end (0) or beginning (1) of each period. |
I'm in the U.S. What are vehicles to invest in international stocks? | You can look into specific market targeted mutual funds or ETF's. For Norway, for example, look at NORW. If you want to purchase specific stocks, then you'd better be ready to trade on local stock exchanges in local currency. ETrade allows trading on some of the international stock exchanges (in Asia they have Hong Kong and Japan, in Europe they have the UK, Germany and France, and in the Americas they have the US and Canada). Some of the companies you're interested in might be trading there. |
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%). |
Put idle savings to use while keeping them liquid | Since you're coming out of college, you're probably a new investor and don't know too much about stocks, etc. I was in the same situation as well. I wanted to keep my cash 'liquid' and wanted to make low risk investments. What I ended up doing was investing the majority of my money in higher interest GICs (Guaranteed Investment Certificate) and keeping the rest in my chequing/savings account. I understand that GICs aren't exactly the most liquid asset out there. However, instead of investing it all into 1 GIC, I put them in to smaller increments with varying lock-in times and roll-over options. I.e. for 15000 keep $3000 on hand in your account 2x$1000 invested for 2 years 4x$1000 invested for 1 year 3x$1000 invested for 180 days 3x$1000 invested for 90 days When you find that you run out of cash from your $3000, you'll have a GIC expiring soon. The 'problem' with GICs is that redeeming them before the maturity period usually incurs a penalty in the form of no interest. Keeping them in smaller increments allows you to redeem only the amount you need without losing too much interest. At maturity, if you don't need the money, you can just have the GIC renew. The other problem with GICs, is that interest rates, though better than savings accounts, aren't that much more. You're basically just fighting off inflation. The benefit is that on maturity, you are guaranteed your principal and the interest. This plan is easy to implement if your bank/credit union allows you to create and manage GICs online. |
If something is coming into my account will it be debit or credit in my account? | It sounds like you're mixing a simple checkbook register with double-entry bookkeeping. Do you need a double-entry level of rigor? Otherwise, why not have two columns, one for income (like a paycheck) and one for expenses (like paying a cable bill)? Then add up both columns and then take the difference of the sums to get your increase or decrease for the time period. If you want to break up income and expenses further, then you can do that too. |
How can I decide whether do a masters even if I have go into debt after doing it? | I did some research and I found a very interesting article that had exactly my case as an example ( person has an undergrad from a nice University in the relative field and wants to do a masters to get a job in a high tech company). Here is the source. Consider “Susan:” She has an undergraduate degree from the University of Washington in Computer Science, and is considering applying to a master’s program at UW or an equivalent program. She’s hoping afterwards to land a job at a top tech company. So far, she’s only been able to get jobs with startups and smaller-name companies. A master’s degree probably wouldn’t make sense for Susan. It might help her to land a job at a top tech company, but she could also do that by working at a startup for a year or two and spending some time developing her skill set through personal projects. If she did it that way, she’d probably be a lot richer in the end. |
501(3)(c) to donators for trophy party | The good news is that your parent organization is tax exempt and your local organization might be. The national organization even has guidelines and even more details. Regarding donations they have this to say: Please note: The law requires charities to furnish disclosure statements to donors for such quid pro quo donations in excess of $75.00. A quid pro quo contribution is a payment made partly as a contribution and partly for goods or services provided to the donor by the charity. An example of a quid pro quo contribution is when the donor gives a charity $100.00 in consideration for a concert ticket valued at $40.00. In this example, $60.00 would be deductible because the donor’s payment (quid pro quo contribution) exceeds $75.00. The disclosure statement must be furnished even though the deductible amount does not exceed $75.00. Regarding taxes: Leagues included under our group exemption number are responsible for their own tax filings with the I.R.S. Leagues must file Form 990 EZ with Schedule A if gross receipts are in excess of $50,000 but less than $200,000. Similar rules also apply to other youth organizations such as scouts, swim teams, or other youth sports. |
In a reverse split, what happens to odd lots? | There are two reasons to do a reverse split. Those partial shares will then be turned into cash and returned to the investors. For large institutional investors such as mutual funds or pension funds it results in only a small amount of cash because the fund has merged all the investors shares together. If the company is trying to meet the minimum price level of the exchange they have little choice. If they don't do the reverse split they will be delisted. If the goal is to reduce the number of investors they are using one of the methods of going private: A publicly held company may deregister its equity securities when they are held by less than 300 shareholders of record or less than 500 shareholders of record, where the company does not have significant assets. Depending on the facts and circumstances, the company may no longer be required to file periodic reports with the SEC once the number of shareholders of record drops below the above thresholds. A number of kinds of transactions can result in a company going private, including: |
If USA defaults on its debt, will the T bond holder get back his money | The only party that can pay back a government bond is the government that issued it itself. In the case of Argentina, US vulture funds have won cases against it, but it has yet to pay. The best one can do to collect is to sue in a jurisdiction that permits and hope to seize the defaulted government's assets held in such jurisdiction. One could encourage another state to go to war to collect, but this is highly unlikely since a state that doesn't repay is probably a poor state with nothing much to loot; besides, most modern governments do not loot the conquered anymore. Such a specific eventuality hasn't happened in at least a lifetime, anyways. It is highly unlikely that any nation would be foolish enough to challenge the United States considering its present military dominance. It is rare for nations with medium to large economies to spurn their government obligations for long with Argentina as the notable exception. Even Russia became current when they spontaneously disavowed their government debt during the oil collapse of 1998. Countries with very small economies such as Zimbabwe are the only remaining nations that try to use their central banks to fund debt repayments if they even repay at all, but they quickly see that the destruction caused by hyperinflation neither helps with government debt nor excessive government expenditure. Nevertheless, it could be dangerous to assume that no nation would default on its debt for any period of time, and the effects upon countries with defaulted government debt show that it has far reaching negative consequences. If the US were to use its central bank to repay its government obligations, the law governing the Federal Reserve would have to be changed since it is currently mandated to "maintain long run growth of the monetary and credit aggregates commensurate with the economy's long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices and moderate long-term interest rates." The United States Treasury has no power over the Federal Reserve thus cannot force the Federal Reserve to betray its mandate by purchasing government debt. It should be noted that while Japan has a government debt twice its GDP, it also has a persistent slight deflation which has produced incredibly low interest rates, allowing it to finance government debt more easily, a situation the US does not enjoy. For now, the United States seems to be able to pay expenditures and finance at low interest rates. At what ratio of government debt to GDP that would cause interest rates to climb thus put pressure on the US's ability to repay does not seem to be well known. |
Chase bank not breaking large bills for non-account holders | Yes it is (legal). There is of course no law requiring any business you walk in to break your money. What made you think there would be? Being a bank in the US (and in other countries) has some legal consequences, but none of them relates to 'having to do business with anyone that walks in', neither 'having to break bills for people' (not even for established customers). Yes, it was historically commonplace for most banks to do all money-breaking for free, but that does not establish any obligation to do it. Maybe the FED is required to do that, but that won't help you if you don't live near either. |
Why and why would/wouldn't a company split their stock? | From Investopedia, A stock split is usually done by companies that have seen their share price increase to levels that are either too high or are beyond the price levels of similar companies in their sector. The primary motive is to make shares seem more affordable to small investors even though the underlying value of the company has not changed. From Wikipedia, It is often claimed that stock splits, in and of themselves, lead to higher stock prices; research, however, does not bear this out. What is true is that stock splits are usually initiated after a large run up in share price...stock splits do increase the liquidity of a stock; there are more buyers and sellers for 10 shares at $10 than 1 share at $100. Some companies have the opposite strategy: by refusing to split the stock and keeping the price high, they reduce trading volume. Berkshire Hathaway is a notable example of this. Something more to munch on, Why Warren Buffett Is Against Stock Splits. |
Are warehouse clubs like Costco and Sam's Club worth it? | I'm guessing it depends on how much you'd be paying for membership. If you save more than the membership costs you and you actually use the products you buy and they don't get thrown away, then it's worth it. I'm not a member of a warehouse club but I do have a membership for another wholesale outlet, so I know a little bit about buying in bulk. You need to take the same approach to buying goods wholesale as you would in an ordinary outlet, and do a few more things besides. Things like writing a list and sticking to it, making that list logically, so that you minimise the amount of time you spend walking around the shop. The less you see, the less you are likely to buy. Don't be taken in by offers, it's only a bargain if it's something you would have bought anyway. Don't shop on an empty stomach or with you children. And with bulk buying, you have to stick to things with long dates, unless your family gets through something at a phenomenal rate. Things like pet food are good, sugar too if you do a lot of home baking, that kind of thing. Toilet paper and kitchen roll are great to buy in bulk if you have the storage space and toothbrushes are good too. You'll always need them, always need to replace them, they don't take up much space and don't have a use by. The rules differ from family to family. Look at what your family uses and how much time it takes to get through something. That's the best place to start. |
I am an American citizen but have never lived in the US. Do I need to fill a W8-BEN or a W-9? | Your employer can require a W8-BEN or W-9 if you are a contractor, and in some special cases. I believe this bank managing your stock options can as well; it's to prove you don't have "foreign status". See the IRS's W-9 instructions for details. |
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