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Do other countries have the equivalent of Australia's Negative Gearing? | I would say similar rules apply in the US. If you have a net loss from rental property, you certainly can claim that loss against your personal income. There are various rules around this though that make it a bit less clear cut. If you are a "real estate professional", which basicly means you spend at least 750 hours per year working on your rental properties (or related activities), then all losses are deductible against any other ordinary income you have. If you aren't a "real estate professional", then your rental income is considered a "passive activity" and losses you can count against regular income are limited to $25,000 per year (with a carry-forward provision) and begin to phase out entirely if your income is between $100,000 and $150,000. So, the law here is structured to allow most small-time investors to take rental real estate losses against their ordinary income, but the income phase-out provision is designed to prevent the wealthy from using rental property losses to avoid taxation. |
Most effective Fundamental Analysis indicators for market entry | Fundamental Analysis can be used to help you determine what to buy, but they won't give you an entry signal for when to buy. Technical Analysis can be used to help you determine when to buy, and can give you entry signals for when to buy. There are many Technical Indicator which can be used as an entry signal, from as simple as the price crossing above a moving average line and then selling when the price crosses back below the moving average line, to as complicated as using a combination of indicators to all line up for an entry signal to be valid. You need to find the entry signals that would suit your investing or trading and incorporate them as part of your trading plan. If you want to learn more about entry signals you are better off learning more about Technical Analysis. |
What considerations are there for making investments on behalf of a friend? | There's a sizable community of people and fiscal advisers who advocate not managing the money at all. Set your passive investor friend with automatic bank draft into a simple three/four fund portfolio of low cost index funds and never never ever trade. See https://www.bogleheads.org/RecommendedReading.php You might be able to beat the stock market for a few years, but probably not over the long term. Most mutual fund professionals don't. Playing with your own money is one thing: playing with other people's money is a whole other ball game. |
Employee stock option plan with undefined vesting? | An option without the vesting period and the price at which one can exercise the option is of not much value. If vesting is determined by board, then at any given point in time they can change the vesting period to say 3, 5, 10 years any number. The other aspect is at what price you are allowed to exercise the option, ie if the stock is of value 10, you may be given an option to buy this at 10, 20 or 100. This has to be stated upfront for you to know the real value. On listing if the value is say 80, then if you have the option to exercise at 10, or 20 you would make money, else at 100 you loose money and hence choose not to exercise the option. However your having stuck around the company for "x" years in anticipation of making money would go waste. Without a vesting period or the price to exercise the option, they are pretty much meaningless and would depend on the goodwill of the founders |
What is a good 5-year plan for a college student with $15k in the bank? | I just checked TCF's rates, and they only pay a miserly rate of 0.25%. Banks like Capital One or Sallie Mae pay about 1.15%, which is more than 4x, though still nothing great. Do you expect to use these funds in 5 years (e.g. for down payment on a house), or could you contribute them to an IRA? |
Do ETF dividends make up for fees? | Any ETF has expenses, including fees, and those are taken out of the assets of the fund as spelled out in the prospectus. Typically a fund has dividend income from its holdings, and it deducts the expenses from the that income, and only the net dividend is passed through to the ETF holder. In the case of QQQ, it certainly will have dividend income as it approximates a large stock index. The prospectus shows that it will adjust daily the reported Net Asset Value (NAV) to reflect accrued expenses, and the cash to pay them will come from the dividend cash. (If the dividend does not cover the expenses, the NAV will decline away from the modeled index.) Note that the NAV is not the ETF price found on the exchange, but is the underlying value. The price tends to track the NAV fairly closely, both because investors don't want to overpay for an ETF or get less than it is worth, and also because large institutions may buy or redeem a large block of shares (to profit) when the price is out of line. This will bring the price closer to that of the underlying asset (e.g. the NASDAQ 100 for QQQ) which is reflected by the NAV. |
If I put a large down payment (over 50%) towards a car loan, can I reduce my interest rate and is it smart to even put that much down? | The real answer is to talk to the bank. In the case of the last car loan I got, the answer is "no". When I asked them about rates, they gave me a printed sheet that listed the loan rates they offered based on how old the car was, period. I forget the exact numbers but it was like: New car: 4%, 1 year old: 4.5%, 2-3 years old 5%, etc. I suspect that at most banks these days, it's not up to the loan officer to come up with what he considers reasonable terms for a loan based on whatever factors you may bring up and he agrees are relevant. The bank is going to have a set policy, under these conditions, this is the rate, and that's what you get. So if the bank includes the size of the down payment in their calculations, then yes, it will be relevant. If they don't, than it won't. The thing to do would be to ask your bank. If you're only borrowing $2000, and you've managed to save up $11,000, I'd guess you can pay off the $2,000 pretty quickly. So as Keshlam says, the interest rate probably isn't all that important. If you can pay it off in a year, then the difference between 5% and 1% is only $80. If you're buying a $13,000 car, I can't imagine you're going to agonize over $80. BTW I've bought two cars in the last few years with about half the cost in cash and putting the rest on my credit card. (One for me and one for my daughter.) Then I paid off the credit card in a couple of months. Sure, the interest rate on a credit card is much higher than a car loan, but as it was only for a few months, it made very little real difference, and it took zero effort to arrange the loan and gave me total flexibility in the repayment schedule. Credit card companies often offer convenience checks where you pay like 3% or so transaction fee and then 0% interest for a year or more, so it would just cost the 3% up front fee. |
Should I pay cash or prefer a 0% interest loan for home furnishings? | Read the terms and conditions very carefully. Many zero percent deals have a requirement that you pay back at a certain date, and if you don't, you'll have to pay some enormous percentage. Nobody will remind you of the date, because the lender has the secret hope that you will forget. |
Why does Charles Schwab have a Mandatory Settlement Period after selling stocks? | That is the standard set by most securities exchanges: T+3 : trades complete three days after the bargain has been struck. |
What are the risks of Dividend-yielding stocks? | The risk in a divident paying stock can come from 2 sources. The business of the company, or the valuation of the stock at the time you buy. The business of the company relates to how they are running things, the risks they are taking with the company, innovations in their pipeline, and their competitive landscape. You can find all sorts of examples of companies that paid nice dividends but didn't end so well... Eastman Kodak, Enron, Lehman brothers, all used to pay very nice dividends at some point... On the other hand you have the valuation. The company is running great, but the market has unrealistic expectations about it. Think Amazon and Yahoo back in 2001... the price was way too high for the company's worth. As the price of a stock goes up, the return that you get from its future cash flows (dividends) goes down (and viceversa). If you want to go deep into the subject, check out this course from Chicago U they spend a lot of time talking about dividends, future returns from stocks and the risk rewards of finding stocks by methods such as these. |
Please help me understand reasons for differences in Government Bond Yields | These are yields for the government bonds. EuroZone interest rates are much lower (10 times lower, in fact) than the UK (GBP zone) interest rates. The rates are set by the central banks. |
Downside to temporarily lowering interest rates? | This is brilliant for AmEx; they make a cut off of every transaction you do, so even if you pay it off before you ever pay interest, they still may take some. Balance transfers, on the other hand, generally have a transfer fee that locks in a percent, depending on the offer. For your own sake, it can be a good deal if you Considering that they make some money, it makes sense why they offer people this - merchants, as you'll read from Nerd Wallet, are paying extra to use credit cards. |
Does negative P/E ratio mean stock is weak? | P/E is the number of years it would take for the company to earn its share price. You take share price divided by annual earnings per share. You can take the current reported quarterly earnings per share times 4, you can take the sum of the past four actual quarters earnings per share or you can take some projected earnings per share. It has little to do with a company's actual finances apart from the earnings per share. It doesn't say much about the health of a company's balance sheet, and is definitely not an indicator for bankruptcy. It's mostly a measure of the market's assumptions of the company's ability to grow earnings or maintain it's current earnings growth. A share price of $40 trading for a P/E ratio of 10 means it will take the company 10 years to earn $40 per share, it means there's current annual earnings per share of $4. A different company may also be earning $4 per share but trade at 100 times earnings for a share price of $400. By this measure alone neither company is more or less healthy than the other. One just commands more faith in the future growth from the market. To circle back to your question regarding a negative P/E, a negative P/E ratio means the company is reporting negative earnings (running at a loss). Again, this may or may not indicate an imminent bankruptcy. Increasing balance sheet debt with decreasing revenue and or earnings and or balance sheet assets will be a better way to assess bankruptcy risk. |
Layman's guide to getting started with Forex (foreign exchange trading)? | Starting with the Dummy Forex account is a wise move for every new forex trader. Do forex trading with a dummy account at least for a year. Startling directly with real money is a terribly costly move. Therefore, it is wise to have a solid trading strategy to execute. Make sure that your strategy is realistic and practical. Most importantly, using your dummy forex account, it is must for you to make at least one or two profits in a year. At last, be sure to invest money that you can recover without any tension. |
How can I determine which stores are regarded as supermarkets for a rewards credit card? | Contact AmEx. They are the only ones who might have a current list. |
What drives the stock of bankrupt companies? | With debts exceeding assets by a billion dollars, this activity likely comes from penny stock speculators and "pump and dump" schemers. There is no rational expectation that the stock is even worth multiple pennies when the company is that far upside-down on its debts. Even if the debts could be restructured in a chapter 11, the equity shares would likely lose all of their value in the bankruptcy proceedings. Shareholders are at the bottom of the totem-pole when debts are being adjusted by the courts. |
Where can I find all public companies' information? | MattMcA definitely gave you excellent advice and said a lot of what I would say to you. Most databases that are going to give you the most comprehensive information, but in a well formatted way, are going to require subscriptions or a fee. You should try to visit a library, especially one at a university, because they may likely have free access for you. At my alma mater the preferred database among students was LexisNexis Corporate Affiliations. http://www.corporateaffiliations.com/ With this company directory, you get public and private company profiles. You can use Corporate Affiliation’s MergerTrak™ and get full coverage on current and past mergers and acquisitions. I definitely think this is a business database you should look into. You have nothing to lose seeing as they have a free trial. Just to add, there’s always a business news feed on the homepage. As I just checked now, this one caught my interest: For Marvel Comics, A Renewed Digital Mission. |
What happens if a purchase is $0.02 in Canada? | I think it should be free. Why? I had a coupon for 35, I bought something for 35.01 including taxes and total to pay was 0.01, rounded to 0.00. I think it's almost the same scenario. |
Why can't the government simply payoff everyone's mortgage to resolve the housing crisis? | Could it be done? Yes, it could, subject to local law. A variant of such an approach has been suggested for those countries experiencing collapse of demand. One might consider whether whether it applied to secured loans (such as mortgages), unsecured loans, or both; whether it would be capped at a certain absolute (say £100k) or proportional (first 50%) of each mortgage; whether it would cover first homes only, or all homes; and so on. These details would radically change the feasibility and consequences of any such intervention. See the related question: https://economics.stackexchange.com/q/146/104 Such a policy of debt cancellation would have several consequences beyond initial stimulation of demand, that would need additional policies to deal with them. Inflation The resultant surge in demand would, in the absence of any other intervention, result in a massive surge in inflation. There are some interesting questions about whether this burst of inflation would be a one-off, or not. One could make an argument that as housing has become much more affordable (at least for home-owners), it would increase the downward pressure on wages, which would be in itself counter-inflationary in the medium-long term. Nevertheless, it would be injecting much more money into the economy than has been seen in QE to date, so the risks would be of extraordinarily high inflation, which might or might not get entrenched. In order to manage the short-term risk, and long-term inflation expectations, it might be necessary to incorporate a lot of tightening, either fiscal (higher taxes and/or lower public spending), or monetary: (higher interest rates, unwinding QE, new requirements for higher core capital for banks) Moral hazard There are risks of moral hazard for individuals: however, as a society, we were prepared to accept the moral hazard for financial institutions and their staff, so that may or may not be an issue: it is likely to be a question of long-term expectations. If the expectation is that this is at most a once-in-a-lifetime occurrence, then the consequential risk from moral hazard ought to be lower. Excess profits to lenders Lenders will typically work on the basis of a certain proportion of defaults, so paying off all loans effectively gives them an artificial boost to their profits. Worsening balance of payments There is to a degree a prisoners' dilemma facing nations here. Pressing the reset-button on personal debt across many of the countries experiencing demand-collapse would benefit all of them. However, if just one such country were to do it alone, they alone would increase domestic demand, resulting in a large increase in imports, but no significant increase in exports. |
Why do consultants or contractors make more money than employees? | In addition to the other answers, consultants and contractors face a real risk (though admittedly small) of not getting paid. The more short-term the gigs are, the higher the risk of not getting paid for a particular job. As an employee, there are laws to ensure that you get your paycheck. As a contractor, you're just another creditor. I know a couple of contractors (software engineers) who have had difficulty collecting after a job. (I'm not even sure one ever got paid the full amount.) I also personally witnessed a contractor show up for a job who was then told by the company that they unilaterally decided that they would pay half of their pre-arranged rate. |
Should I take contributions out of my Roth IRA to live off of? | Take another job. From a personal finance perspective this is the wrong reason to dip into a retirement account. You will lose so much ground towards actually retiring. Sure you won't be taxed, but you will be missing so much opportunity where that money won't be working for your retirement. The off-topic answer to take to the start-ups stackexchange site is: don't quit your day job until your business plan is written out and you have an idea of where to get your startup capital. |
What are the pitfalls of loaning money to friends or family? Is there a right way to do it? | There are two levels to consider here: That said, before loaning/giving anyone money ask yourself if it is good for them. If they have problems managing their money, or holding down a job, and you give them money, they are just going to come back for more later. In this type of situation, you shouldn't give/loan them money. But on the other hand, if a friend or family member has hit a rough patch and you know they are the kind of person that will be on their feet again soon, and you have nothing to lose, give them the money. |
I received a share of Apple stock. Now what? | Congratulations! You own a (very small) slice of Apple. As a stockholder, you have a vote on important decisions that the company makes. Each year Apple has a stockholder meeting in Cupertino that you are invited to. If you are unable to attend and vote, you can vote by proxy, which simply means that you register your vote before the meeting. You just missed this year's meeting, which was held on February 26, 2016. They elected people to the board of directors, chose an accounting firm, and voted on some other proposals. Votes are based on the number of shares you own; since you only own one share, your vote is very small compared to some of the other stockholders. Besides voting, you are entitled to receive profit from the company, if the company chooses to pay this out in the form of dividends. Apple's dividend for the last several quarters has been $0.52 per share, which means that you will likely receive 4 small checks from Apple each year. The value of the share of stock that you have changes daily. Today, it is worth about $100. You can sell this stock whenever you like; however, since you have a paper certificate, in order to sell this stock on the stock market, you would need to give your certificate to a stock broker before they can sell it for you. The broker will charge a fee to sell it for you. Apple has a website for stockholders at investor.apple.com with some more information about owning Apple stock. One of the things you'll find here is information on how to update your contact information, which you will want to do if you move, so that Apple can continue to send you your proxy materials and dividend checks. |
How to find historical stock price for a de-listed or defunct company? | Such data is typically only available from paid sources due to the amount of research involved in determining the identity of delisted securities, surviving entities in merger scenarios, company name changes, symbol changes, listing venue changes, research of all capital events such as splits, and to ensure that the data coverage is complete. Many stocks that are delisted from a major exchange due to financial difficulties are still publicly tradeable companies with their continuing to trade as "OTC" shares. Some large companies even have periods where they traded for a period of their history as OTC. This happened to NYSE:NAV (Navistar) from Feb 2007 to July 2008, where they were delisted due to accounting statement inaccuracies and auditor difficulties. In the case of Macromedia, it was listed on NASDAQ 13 Dec 1993 and had its final day of trading on 2 Dec 2005. It had one stock split (2:1) with ex-date of 16 Oct 1995 and no dividends were ever paid. Other companies are harder to find. For example, the bankrupt General Motors (was NYSE:GM) became Motoros Liquidation Corp (OTC:MTLQQ) and traded that way for almost 21 months before finally delisting. In mergers, there are in two (or more) entities - one surviving entity and one (or more) delisted entity. In demergers/spinoffs there are two (or more) entities - one that continues the capital structure of the original company and the other newly formed spun-off entity. Just using the names of the companies is no indication of its history. For example, due to monopoly considerations, AT&T were forced to spinoff multiple companies in 1984 and effectively became 75% smaller. One of the companies they spunoff was Southwestern Bell Corporation, which became SBC Communications in 1995. In 2005 SBC took over its former parent company and immediately changed its name to AT&T. So now we have two AT&Ts - one that was delisted in 2005 and another that exists to this day. Disclosure: I am a co-owner of Norgate Data (Premium Data), a data vendor in this area. |
How can I invest my $100? | Sure. For starters, you can put it in a savings account. Don't laugh, they used to pay noticeable interest. You know, back in the olden days. You could buy an I-bond from Treasury Direct. They're a government savings bond that pays a specified amount of interest (currently 0%, I believe), plus the amount of the inflation rate (something like 3.5% currently, I believe). You don't get paid the money -- the I-bond grows in value till you sell it. You can open a discount brokerage account, and buy 1 or more shares of stock in a company you like. Discount brokerages generally have a minimum of $500 or so, but will waive that if you set the account up as an IRA. Scot Trade, for instance. (An IRA, in case you didn't know, is a type of account that's tax free but you can't touch it till you turn 59 1/2. It's meant to help you save for retirement.) Incidentally, watch out of "small account" fees that some brokerages might charge you. Generally they're annual or monthly charges they'd charge you to cover their costs on your account -- since they're certainly not going to make it in commissions. That IRA at Scot Trade is no-fee. Speaking of commissions, those will be a big chunk of that $100. It'll be like $7-$10 to buy that stock -- a pretty big bite. However, many of these discount brokerages also offer some mutual funds for no commission. Those mutual funds, in turn, have minimums too, but once again if your account's an IRA many will waive the minimum or set it low -- like $100. |
Where can I get interesting resources on Commodities? | I would recommend that go through some forums where commodities topics be discussed so that if you have some issues related any point in commodities investment you will easily get your question sort out. |
NYSE vs. Nasdaq - can I tell what exchange a ticker traded on, based solely on the ticker? | Things are in fact more complicated. It really depends what you mean by "ticker" and who gave you this ticker. There is several codes to identify a security: The Bloomberg code contains a code to identify the exchange as in ALU:FP the FP part refers to Euronext Paris. The RIC code works the same way but with a different convention. Exchanges are identified by the MIC code.(they are in fact divided in market segments with each market segment having a main market segment) ISIN and SEDOL codes do not provide informations about the exchange so they are usually given with a MIC. There is no guarantee that Reuters and Bloomberg won't use the same company code to refer to different company. But they usually use the exchange ticker. This ticker is requested by each company and can be anything. They are accepted most of the time. But sometimes to avoid confusion some requests are rejected. (For instance FBI ticker was refused) For more info read: The evolution of ticker symbols Financial providers like Bloomberg provides services to be informed when a security is added/removed from a market. |
How can I determine if a debt consolidation offer is real or a scam? | I think in such situations a good rule of thumb may be - if you are asked to pay significant sums of money upfront before anything is done, stop and ask yourself, what would you do if they don't do what they promised? They know who you are, but usually most you know is a company name and phone number. Both can disappear in a minute and what are you left with? If they said they'd pay off the debt and issue the new loan - fine, let them do it and then you pay them. If they insist on having money upfront without delivering anything - unless it's a very big and known and established company you probably better off not doing it. Either it's a scam or in the minuscule chance they are legit you still risking too much - you're giving money and not getting anything in return. |
Hiring freelancers and taxes | I am not a lawyer or a tax accountant, but from the description provided it sounds to me like you have created two partnerships: one in which you share 50% of Bob's revenue, and another in which you share 50% of the revenue from the first partnership. If this is the case, then each partnership would need to file form K-1 and issue a copy to the partners of that partnership. I think, but I'm not sure, that each partnership would need an Employer Identification Number (EIN; you can apply for and receive these online with the IRS). You would only pay tax on the portion of profits that are assigned to you on the K-1. (If you've accidentally created a partnership without thinking through all the ramifications, you probably want to straighten this out. You can be held liable for the actions of your partners.) On the other hand, if your contract with Bob explicitly makes you a contractor and not a partner, then Bob should probably be issuing a 1099 to you. Similarly for you and Joe -- if your contract with Joe makes him a subcontractor, then you may need to get an EIN and issue him a 1099 at the end of the year. The money you pay to Joe is a business expense, and would be deducted from the profits you show on your Schedule C. In my opinion, it would be worth the $200 fee paid to a good CPA to make sure you get this right. |
If someone gives me cash legally, can my deposit trigger an audit for them? | Why would you even accept 75K in cash? If anything is going to trigger an audit, this will be it. 75K in cash deposited will look like money laundring, so you better have a paper trail ready to prove this is legal or this won't end well. |
Why would a company have 2 listings on the same exchange? | A company can issue different kinds of shares. For example, some kinds of shares may get preference in dividends or payment in event of (company) bankruptcy. Preferred shares are an example of this. A company might have several kinds of preferred shares and a 'common stock'. Here is a good explanation. See too the Wikipedia article about preferred stock. Toronto-Dominion Bank (TD) is an example of a company that has fourteen different preferred share issues, each with its own listing on the Toronto Stock Exchange (TSE) and symbol. TD has one kind of common stock, which is also listed on the TSE. However, TD common equity trades much more actively than the preferred shares. Remember that preferred stock is a different security type than common stock e.g. common has voting rights, preferred does not. |
How to invest with a low net worth | You most definitely can invest such an amount profitably, but it makes it even more important to avoid fees, um, at all costs, because fees tend to have a fixed component that will be much worse for you than for someone investing €200k. So: Edit: The above assumes that you actually want to invest in the long run, for modest but relatively certain gains (maybe 5% above inflation) while accepting temporary downswings of up to 30%. If those €2000 are "funny money" that you don't mind losing but would be really excited about maybe getting 100% return in less than 5 years, well, feel free to put them into an individual stock of an obscure small company, but be aware that you'd be gambling, not investing, and you can probably get better quotes playing Roulette. |
The doctor didn't charge the health insurance in time, am I liable? | This has a straightforward answer. It's likely that your doctor and the hospital have no responsibility to ensure that your insurance claim is filed in a timely manner. They bill you whether you or they get reimbursed by insurance, or not. The insurance company is more than happy not to pay you any way they can. Sorry if this is harsh, but it's up to you to follow through. See also here. |
How is a long call and short stock portfolio equivalent to lending money | hmmm. I think it's because in both cases, you must pay for it up front, before the positions are closed out. You own nothing except the right to buy the stock re: the call, and the obligation to buy the stock re: the short. You buy a call, but must borrow the stock, for which you must put some margin collateral and there is a cost to borrow. You pay for that, of course. I wouldn't call it lending though. |
Are there any viable alternatives to Paypal for a small site? | I found out about Google checkout today, it looks like it may meet my needs, but I'd still be interested to find out about other options. |
How is taxation for youtube/twitch etc monetization handled in the UK? | The difference between a hobby and a business is income. Yes, every country I know of allows you to do something as a hobby until it becomes profitable and then change it into a business once it becomes likely to turn a profit. There's usually a limit in terms of how much profit or revenue you can make before it must be declared as business. I'm sure someone else will mention the exact numbers for the UK. |
Dealership made me the secondary owner to my own car | Imagine that, a car dealership lied to someone trusting. Who would have thought. A big question is how well do you get along with your "ex"? Can you be in the same room without fighting? Can you agree on things that are mutually beneficial? The car will have to be paid off, and taken out of his name. The mechanics on how to do this is a bit tricky and you may want to see a lawyer about it. Having you being the sole owner of the car benefits him because he is no longer a cosigner on a loan. This will help him get additional loans if he chooses, or cosign on his next gf's car. And of course this benefits you as you "own" the car instead of both of you. You will probably have to refinance the car in your name only. Do you have sufficient credit? Once this happens can you pay off the car in like a year or so? If you search this site a similar questions is asked about once per month. Car loans are pretty terrible, in the future you should avoid them. Cosigning is even worse and you should never again participate in such a thing. Another option is to just sell the car and start over with your own car hopefully paid for in cash. |
How can I stop wasting food? | Try to choose less perishable items. Besides canned and bottled are adequate for some foods, and frozen foods for a wider range, such as vegetables and prepared foods. Dairy has a limited life, but some types live longer, like yogurt. Fruits like apples and oranges will last a good deal longer in the fridge (bananas too, but the peels discolor). Bread items and leafy vegetables just won't keep long for fresh use; pick them up when you're actually about to use them. (Keeping bread in the freezer for toasting works well, though.) |
Car financed at 24.90% — what can I do? | Anytime you borrow money at that rate, you are getting ripped off. One way to rectify this situation is to pay the car off as soon as possible. You can probably get a second job that makes $1000 per month. If so you will be done in 4 months. Do that and you will pay less than $300 in interest. It is a small price to pay for an important lesson. While you can save some money refinancing, working and paying the loan off is, in my opinion a better option. Even if you can get the rate down to 12%, you are still giving too much money to banks. |
How to choose a company for an IRA? | I use TIAA-Cref for my 403(b) and Fidelity for my solo 401(k) and IRAs. I have previously used Vanguard and have also used other discount brokers for my IRA. All of these companies will charge you nothing for an IRA, so there's really no point in comparing cost in that respect. They are all the "cheapest" in this respect. Each one will allow you to purchase their mutual funds and those of their partners for free. They will charge you some kind of fee to invest in mutual funds of their competitors (like $35 or something). So the real question is this: which of these institutions offers the best mutual and index funds. While they are not the worst out there, you will find that TIAA-Cref are dominated by both Vanguard and Fidelity. The latter two offer far more and larger funds and their funds will always have lower expense ratios than their TIAA-Cref equivalent. If I could take my money out of TIAA-Cref and put it in Fidelity, I'd do so right now. BTW, you may or may not want to buy individual stocks or ETFs in your account. Vanguard will let you trade their ETFs for free, and they have lots. For other ETFs and stocks you will pay $7 or so (depends on your account size). Fidelity will give you free trades in the many iShares ETFs and charge you $5 for other trades. TIAA-Cref will not give you any free ETFs and will charge you $8 per trade. Each of these will give you investment advice for free, but that's about what it's worth as well. The quality of the advice will depend on who picks up the phone, not which institution you use. I would not make a decision based on this. |
Taking partial capital loss purely for tax purposes | Note that the rules around wash sales vary depending on where you live. For the U.S., the wash sale rules say that you cannot buy a substantially identical stock or security within 30 days (before or after) your sale. So, you could sell your stock today to lock in the capital losses. However, you would then have to wait at least 30 days before purchasing it back. If you bought it back within 30 days, you would disqualify the capital loss event. The risk, of course, is that the stock's price goes up substantially while you are waiting for the wash sale period. It's up to you to determine if the risk outweighs the benefit of locking in your capital losses. Note that this applies regardless of whether you sell SOME or ALL of the stock. Or indeed, if we are talking about securities other than stocks. |
FX losses on non-UK mortgage for UK property - tax deductable? | I spoke to HMRC and they said #1 is not allowable but #2 is. They suggested using either their published exchange rates or I could use another source. I suggested the Bank of England spot rates and that was deemed reasonable and allowable. |
Rate of return of stock index | The return from one day to the next is based on the Day's closing price. To be clear - opening prices can be quite different from the prior day close. In your example, they are pretty close, but this is not always the case. Just pull a larger data set to observe this. The above aside, dividends are not reflected in the index, so, after a dividend has occurred, you'd need to account for this if you are looking for true total return. In 2011, the S&P closed at 1257.60 vs a 2010 year end 1257.64. The return, however was 2.11%, not zero, after accounting for the dividends. To me, articles that suggest the yearly return was zero are inaccurate and misleading. |
I have savings and excess income. Is it time for me to find a financial advisor? | Is my financial status OK? You have money for emergencies in the bank, you spend less than you earn. Yes, your status is okay. You will have a good standard of living if nothing changes from your status quo. How can I improve it? You are probably paying more in taxes than you would if you made a few changes. If you max out tax advantaged retirement accounts that would reduce the up-front taxes you are paying on your savings. Is now a right time for me to see a financial advisor? The best time to see a financial advisor is any time that your situation changes. New job? Getting married? Having a child? Got a big promotion or raise? Suddenly thinking about buying a house? Is it worth the money? How would she/he help me? If you pick an advisor who has incentive to help you rather than just pad his/her own pockets with commissions, then the advice is usually worth the money. If there is someone whose time is already paid for, that may be better. For example, if you get an accountant to help you with your taxes and ask him/her how to best reduce your taxes the next year, the advice is already paid-for in the fee you for the tax help. An advisor should help you minimize the high taxes you are almost certainly paying as a single earner, and minimize the stealth taxes you are paying in inflation (on that $100k sitting in the bank). |
Buying a building with two flats, can I rent one out and still get a residential mortgage? | The simple answer is to get a residential mortgage first, and once you have secured the loan, do whatever you want. The bank only cares about what risk they are taking on the day of closing and won't care afterwards so long as you pay the mortgage on time. Residential mortgages are going to give you better rates than rentals, generally. |
Diversify or keep current stock to increase capital gains | The biggest challenge with owning any individual stock is price fluctuation, which is called risk. The scenarios you describe assume that the stock behaves exactly as you predict (price/portfolio doubles) and you need to consider risk. One way to measure risk in a stock or in a portfolio is Sharpe Ratio (risk adjusted return), or the related Sortino ratio. One piece of advice that is often offered to individual investors is to diversify, and the stated reason for diversification is to reduce risk. But that is not telling the whole story. When you are able to identify stocks that are not price correlated, you can construct a portfolio that reduces risk. You are trying to avoid 10% tax on the stock grant (25%-15%), but need to accept significant risk to avoid the 10% differential tax ($1000). An alternative to a single stock is to invest in an ETF (much lower risk), which you can buy and hold for a long time, and the price/growth of an ETF (ex. SPY) can be charted versus your stock to visualize the difference in growth/fluctuation. Look up the beta (volatility) of your stock compared to SPY (for example, IBM). Compare the beta of IBM and TSLA and note that you may accept higher volatility when you invest in a stock like Tesla over IBM. What is the beta of your stock? And how willing are you to accept that risk? When you can identify stocks that move in opposite directions, and mix your portfolio (look up beta balanced portolio), you can smooth out the variability (reduce the risk), although you may reduce your absolute return. This cannot be done with a single stock, but if you have more money to invest you could compose the rest of your portfolio to balance the risk for this stock grant, keep the grant shares, and still effectively manage risk. Some years ago I had accumulated over 10,000 shares (grants, options) in a company where I worked. During the time I worked there, their price varied between $30/share and < $1/share. I was able to liquidate at $3/share. |
What would be the signs of a bubble in silver? | @fennec is right, no one knows. Here's a link that may help: http://pragcap.com/silver-prices-display-some-bubbly-characteristics I don't follow markets enough to comment, but I have read enough of Cullen's stuff to know he's not off his rocker. |
Is the I.T. function in banking considered to be on the expense side, as opposed to revenue side? | I must point that without the IT - no-one in the bank generates any revenue. Not to mention the fraud prevention and informational security. To the best of my knowledge - IT in banks and financial institutoins are paid very well for their services, and they earn every penny of it. IT is not just online banking or computer support. IT is the whole underlying infrastructure of the modern banking. Investor without the proper links to the stock exchanges will go elsewhere, loans that cannot be evaluated fast enough (using of course the IT infrastructure) will be taken from someone else, CD's for which the interest is calculated manually will probably not be as attractive as the CD's managed by the computers at the bank next door, credit and debit transactions, ACH, direct deposit, etc - cannot be done without IT. So IT is not expense, IT is infrastructure (and that is "operations" in the budget books). Every function of the bank that generates revenue - relies and depends on it. |
Pros / cons of being more involved with IRA investments [duplicate] | diversifying; but isn't that what mutual funds already do? They diversify and reduce stock-specific risk by moving from individual stocks to many stocks, but you can diversify even further by selecting different fund types (e.g. large-cal, small-cap, fixed- income (bond) funds, international, etc.). Your target-date fund probably includes a few different types already, and will automatically reallocate to less risky investments as you get close to the target date. I would look at the fees of different types of funds, and compare them to the historical returns of those funds. You can also use things like morningstar and other ratings as guides, but they are generally very large buckets and may not be much help distinguishing between individual funds. So to answer the question, yes you can diversify further - and probably get better returns (and lower fees) that a target-date fund. The question is - is it worth your time and effort to do so? You're obviously comfortable investing for the long-term, so you might get some benefit by spending a little time looking for different funds to increase your diversification. Note that ETFs don't really diversify any differently than mutual funds, they are just a different mechanism to invest in funds, and allow different trading strategies (trading during the day, derivatives, selling short, etc.). |
Working Capital Definition | As you say, if you delay paying your bills, your liabilities will increase. Like say your bills total $10,000 per month. If you normally pay after 30 days, then your short-term liabilities will be $10,000. If you stretch that out to pay after 60 days, then you will be carrying two months worth of bills as a short-term liability, or $20,000. Your liabilities go up. Assume you keep the same amount of cash on hand after you stretch out your payments like this as you did before. Now your liabilities are higher but your assets are the same, so your working capital goes down. For example, suppose you kept $25,000 in the bank before this change and you still keep $30,000 after. Then before your working capital was $25,000 minus $10,000, or $15,000. After it is $25,000 minus $20,000, or only $5,000. So how does this relate to cash flow? While presumably if the company has $10,000 per month in bills, and their bank balance remains at $25,000 month after month, then they must have $10,000 per month in income that's going to pay those bills, or the bank balance would be going down. So now if they DON'T pay that $10,000 in bills this month, but the bank account doesn't go up by $10,000, then they must have spent the $10,000 on something else. That is, they have converted that money from an on-going balance into cash flow. Note that this is a one-time trick. If you stretch out your payment time from 30 days to 60 days, then you are now carrying 2 months worth of bills on your books instead of 1. So the first month that you do this -- if you did it all at once for all your bills -- you would just not pay any bills that month. But then you would have to resume paying the bills the next month. It's not like you're adding $10,000 to your cash flow every month. You're adding $10,000 to your cash flow the month that you make the change. Then you return to equilibrium. To increase your cash flow every month this way, you would have to continually increase the time it takes you to pay your bills: 30 days this month, 45 days the next, 60 the next, then 75, 90, etc. Pretty soon your bills are 20 years past due and no one wants to do business with you any more. Normally people see an action like this as an emergency measure to get over a short-term cash crunch. Adopting it as a long-term policy seems very short-sighted to me, creating a long-term relationship problem with your suppliers in exchange for a one-shot gain. But then, I'm not a big corporate finance officer. |
Need exit strategy for aging mother who owns aging rental properties, please | I debated whether to put this in an answer or a comment, because I'm not sure that this can be answered usefully without a lot more information, which actually would then probably make it a candidate for closing as "too localized". At the very least we would need to know where (which jurisdiction) she is located in. So, speaking in a generic way, the options available as I see them are: Contact the mortgage companies and explain she can't continue to make payments. They will likely foreclose on the properties and if she still ends up owing money after that (if you are in the US this also depends on whether you are in a "non-recourse" state) then she could be declared bankrupt. This is rather the "nuclear option" and definitely not something to be undertaken lightly, but would at least wipe the slate clean and give her some degree of certainty about her situation. Look very carefully at the portfolio of properties and get some proper valuations done on them (depending on where she is located this may be free). Also do a careful analysis of the property sales and rental markets, to see whether property prices / rental rates are going up or down. Then decide on an individual basis whether each property is better kept or sold. You may be able to get discounts on fees if you sell multiple properties in one transaction. This option would require some cold hard analysis and decision making without letting yourselves get emotionally invested in the situation (difficult, I know). Depending on how long she has had the properties for and how she came to own them, it MIGHT be an option to pursue action against whoever advised her to acquire them. Clearly a large portfolio of decaying rental properties is not a suitable investment for a relatively elderly lady and if she only came by them relatively recently, on advice from an investment consultant or similar, you might have some redress there. Another option: could she live in one of the properties herself to reduce costs? If she owns her own home as well then she could sell that, live in the one of the rentals and use the money saved to finance the sale of the other rentals. Aside from these thoughts, one final piece of advice: don't get your own finances tangled up in hers (so don't take out a mortgage against your own property, for example). Obviously if you have the leeway to help her out of your budget then that is great, but I would restrict that to doing things like paying for grocery shopping or whatever. If she is heading for bankruptcy or other financial difficulties, it won't help if you are entangled too. |
Is it a good strategy to +cash out refi every six months? | When you refinance, there is cost (guess: around $2000-$3000) to cover lawyers, paperwork, surveys, deed insurance, etc. etc. etc. Someone has to pay that cost, and in the end it will be you. Even if you get a "no points no cost" loan, the cost is going to be hidden in the interest rate. That's the way transactions with knowledgeable companies works: they do business because they benefit (profit) from it. The expectation is that what they need is different from what you need, so that each of you benefits. But, when it's a primarily cash transaction, you can't both end up with more money. So, unless value will be created somewhere else from the process (and don't include the +cash, because that ends up tacked onto the principle), this seems like paying for financial entertainment, and there are better ways to do that. |
Is there a way to monitor when executives or leaders in a company sell off large holdings? | Exec Insiders have to file with the SEC and some sites like secform4.com track it. But many insiders have selling programs where the sell the same amount every month or quarter so you would have to do your homework to determine if there are real signals in the activity. |
What is Systematic about Systematic Investment Plan (SIP) and who invented it? | According to https://en.wikipedia.org/wiki/Systematic_Investment_Plan it's nothing but a fancy term for plain old dollar cost averaging. |
Should I fund retirement with a static asset allocation or an age based glide path? | I think not. I think a discussion of optimum mix is pretty independent of age. While a 20 year old may have 40 years till retirement, a 60 year old retiree has to plan for 30 years or more of spending. I'd bet that no two posters here would give the same optimum mix for a given age, why would anyone expect the Wall Street firms to come up with something better than your own gut suggests? |
Can I exchange rental property for REIT stock with 1031? | would buying the stock of a REIT qualify as a 'Like-Kind' exchange? Short answer, no. Long answer, a 1031 (Starker) exchange only applies to real estate. From the Wikipedia page on the topic: To qualify for Section 1031 of the Internal Revenue Code, the properties exchanged must be held for productive use in a trade or business, or for investment. Stocks, bonds, and other properties are listed as expressly excluded by Section 1031 of the Internal Revenue Code, although securitized properties are not excluded. A REIT, being stock in a real estate company, is excluded from Section 1031. |
Better to rent condo to daughter or put her on title? | @Pete B.'s answer is good, but there's an important note to consider for tax purposes. It's too large for a comment, so I'm adding it as an answer. And that is: you cannot claim the property as a rental property under certain conditions. This affects things like claiming mortgage interest (which you don't have), and depreciation in value (which a rental is allowed). See IRS topic 415 for details, but I've included an important excerpt below with emphasis added: If you rent a dwelling unit to others that you also use as a residence, limitations may apply to the rental expenses you can deduct. You're considered to use a dwelling unit as a residence if you use it for personal purposes during the tax year for more than the greater of: ... A day of personal use of a dwelling unit is any day that it's used by: Talk to a tax accountant to better understand the ramifications of this, but it's worth noting that you can't just rent it to her for a paltry sum and be able to take tax advantages from this arrangement. |
Which credit card is friendliest to merchants? | Back when they started, Discover undercut Visa and Amex fees by about a point. This was also true when I worked for a mail-order computer retailer in the '90s: if a customer asked us which credit cards we took, we were told to list Discover first (and AmEx last) because Discover had the lowest merchant charges. Possibly this is no longer true today, but for quite a while it was a significant selling point of the Discover card to merchants, and a reason why many did sign on. (A reason some stores did not sign on was that Discover was owned by Sears, and many businesses that competed with Sears didn't like the idea of sending any of their profits to the competition.) Today, Discover also owns Diners Club and the fees for those cards are higher. |
How to manage currency risk in international investing | Let's make a few assumptions: You have several ways of achieving (almost) that, in ascending complexity: Note that each alternative will have a cost which can be small (forwards, futures) or large (CFDs, debit) and the hedge will never be perfect, but you can get close. You will also need to decide whether you hedge the unrealised P&L on the position and at what frequency. |
Investing for Dummys | Books are a great place to start, Jason Kelly's The Neatest Little Guide to Stock Market Investing will give you a broad foundation of the stock & bond market. |
Resources on how to be a short term trader? | The problem is that while there are a lot of statistics that can be created from basic market data such as prices and volume, along with the fundamentals of the company, I think that if you talk to 8 different day traders, you'll get 12 different theories of how to interpret and trade based on those numbers. Also quite likely, the more successful someone is at day trading, the more closely they are likely to guard their secrets and not want to divulge them. If there was any uniform concensus, they you'd see all the daytraders doing the same thing, and moving as a group, shortly after which you'd get 'contra' folks who would try to gain by moving in opposition, or 'predicta' folks who would try to front-run the pack. and.... (I think you can see where this leads) A better idea might be to just work on educating your-self firstly with regard to nomenclature and terms, and then move on to reading some stuff about how markets work etc. I'd suggest starting with a book like 'Wall Street Words' and/or 'A Random Walk Down Wall Street' since both are great introductions to things, and move on from there. Note that both of those books have gone through multiple editions, so be sure to get the most recent one (especially if you are trying to save money and buy a used version) You are also likely to find an nearly endless supply of 'seminars' that will offer to teach you somebody's proven method for a fee, or for 'free' but after which you find our you need to use their special tools or data sources etc (which cost money) to use their 'system' (either of which makes me think that their system can't be that great if they figure it's a surer thing to charge for 'teaching' or 'tools/services' than it is to use their system, otherwise they'd just shut up, practice what they preach and make money that way instead) It might be worth attending the free ones just to get exposure to someone's theory on how to game the system, provided you are 'not an easy mark' and can withstand the high pressure sales pitch for their books/software/services etc that pays their bills and almost invariably comes along with such a seminar. |
Where do countries / national governments borrow money from? | There no legal framework that allows states like the US or countries in Europe to default on their debt. Should congress pass a law to default the US supreme court is likely to nullify the law. |
I made an investment with a company that contacted me, was it safe? | Just browsed their website. Not a single name of anybody involved. Their application process isn't safe(No https usage while transferring private information). And considering they contacted you rather than you contacting them, I will be very wary about how they got my details. And they are located in Indonesia. And a simple google takes me to a BOILER SCAM thread. So all in all you have been scammed. Try asking for your money back, but may not be that helpful. Next time before giving your money to somebody, do some due diligence. These type of scams aren't new and are very common. |
What is the best way to invest in gold as a hedge against inflation without having to hold physical gold? | Investing in gold without having physical gold is not really a hedge against inflation. GLD is really more for speculation, not protection against serious inflation. If there is any kind of inflation worth really protecting yourself against then one thing you will notice at its onset is a divergence in the price of physical and GLD; with GLD offering very little protection if any against inflation. Ultimately holders of GLD will demand physical metal and the physical price will rise and the paper price will fall. I would advise you to study physical gold before you purchase GLD for that reason. EDIT: Just adding this to my answer - I don't know why I didn't put it in before, and I hasten to add that I'm not an expert though a little investigation will show you that this is at least one option for owning gold. If you think of having the physical gold yourself at one end of the spectrum and buying GLD at the other; so that you don't need to take physical delivery, there is another scenario which I understand is in between (and sorry I don't actually know what it's referred to as) but it's where you buy the physical gold but instead of taking delivery the bars are stored for you in a vault - these bars are numbered and you actually own what you have paid for and theoretically you could go and visit your gold and actually remove it because it's your gold - as opposed to having paper GLD which in my understanding is a "right to take physical delivery" of gold - and this is slightly different - of course unlike GLD you actually have to pay a storage fee and of course unlike having the physical gold buried in your garden or something you are not entirely secure against say a robbery of the vault, and you are also depending on the company not to sell the same bar to more than one person - but that's the only think that their reputation is built on, and a company like that would live or die by the reputation - ( and of course you might lose the proverbial gold buried in the garden either, so nothing's 100% secure anyway really ) |
What constitutes illegal insider trading? | It becomes illegal when it is both material and nonpublic information. Material being defined as: Information that you would want and significantly alters the perception of the stock. To your point -- "materiality" is really up to the courts Nonpublic This is a little easier to define, but need to be careful if the information is disclosed selectively -- ie to just a small number of investment analysts -- this may still be nonpublic There is also an exception to this -- Mosaic Theory - This is the research you are referring to where the analyst calls up suppliers, etc and obtains information that is nonmaterial (wouldn't move the price of the security) but using experience and combined with public information creates something that is meaningful and could move the price of the security. This is perfectly legal. Material examples: |
Given a certain yearly savings, how much can I spend on a capital improvement? NPV of future cash flow | For this, the internal rate of return is preferred. In short, all cash flows need to be discounted to the present and set equal to 0 so that an implied rate of return can be calculated. You could try to work this out by hand, but it's practically hopeless because of solving for roots of the implied rate of return which are most likely complex. It's better to use a spreadsheet with this capability such as OpenOffice's Calc. The average return on equity is 9%, so anything higher than that is a rational choice. Example Using this simple tool, the formula variables can easily be input. For instance, the first year has a presumed cash inflow of $2,460 because the insurance has a 30% discount from $8,200 that is assumed to be otherwise paid, a cash inflow of $40,000 to finance the sprinklers, a cash outflow of $40,000 to fund the sprinklers, a $400 outflow for inspection, and an outflow in the amount of the first year's interest on the loan. This should be repeated for each year. They can be input undiscounted, as they are, for each year, and the calculator will do the rest. |
How can a 529 plan help me save for my child's college education? | If you're ready to start a 529 account, it makes a big difference which state you choose (some states have excessive fees). It doesn't have to be your own state, but some states give you tax incentives to stay in-state. What you need to do is check out Clark Howard's 529 Guide and check to see if your state is in the "good" list. If not, then pick out a good state. |
How can I find hotel properties to buy other than using Google? | Probably the easiest way to invest in hotel rooms in the U.S. is to invest in a Real Estate Investment Trust, or REIT. REITs are securities that invest in real estate and trade like a stock. There are different REITs that invest in different things: some own office buildings, some residential rentals, some hold mortgages, and some are diversified in lots of different types of real estate. There are also REITs that are exclusively invested in hotels. REITs are required to pay out at least 90% of their profits as dividends, and there are tax advantages to investing in REITs. You can search for a REIT on REIT.com's Searchable Directory. You can select a type (Lodging/Resorts), a stock exchange (NYSE), investment sector (equity), and a listing status (public), and you'll see lots of investments for you to consider. |
How to pay for Alzheimer's care? | See Paying for Care | Caregiver Center | Alzheimer's Association. Notable excerpts: For most individuals 65 or older, Medicare is the primary source of health care coverage. However, private insurance, a group employee plan or retiree health coverage also may be in effect. [...] In addition to Medicare, the person with dementia may qualify for a number of public programs. These programs provide income support or long-term care services to people who are eligible. This includes Social Social Security Disability Income (SSDI) for workers younger than 65, Supplemental Security Income (SSI), Medicaid, veteran benefits, and tax deductions and credits. [...] Many community organizations provide low-cost or even free services, including respite care, support groups, transportation and home-delivered meals. You also may consider informal care arrangements using family, friends, neighbors, faith communities and volunteer groups. |
At what age should I start or stop saving money? | As AskAboutGadgets notes, there's no lower age limit. You current age (24) is a pretty good one; you'll have four decades or so for your money to grow and compound, allowing it to become a veritable fortune when you're ready to retire if you invest it fairly aggressively. |
Setting up auto-pay. Should I use my bank that holds mortage or my personal bank? | Depending on your bank you may receive an ACH discount for doing automatic withdrawals from a deposit account at that bank. Now, this depends on your bank and you need to do independent research on that topic. As far as dictating what your extra money goes towards each month (early payments, principal payments, interest payments) you need to discuss that with your bank. I'm sure it's not too difficult to find. In my experience most banks, so long as you didn't sign a contract on your mortgage where you're penalized for sending additional money, will apply extra money toward early payments, and not principal. I would suggest calling them. I know for my student loans I have to send a detailed list of my loans and in what order I want my extra payments toward each, otherwise it will be considered an early payment, or it will be spread evenly among them all. |
What is the difference between “good debt” vs. “bad debt”? | From what I've heard in the past, debt can be differentiated between secured debt and unsecured debt. Secured debt is a debt for which something stands good such as a mortgage on your house. You have a debt, but that debt is covered by the value of an asset and if you needed to free yourself of the debt, then you could by selling that asset. This is what is known as "good" debt. Unsecured debt is debt that is incurred where the only thing that is available to pay it back is your income. An example of this is credit card debt where you purchase something that couldn't be sold again to pay off the debt. This is know as "bad" debt. You have to be careful about thinking that house debt is always "good" debt because the house stands good for it though. The problem with that is that the house could go down in value and then suddenly your "good" debt is "bad" debt (or no longer secured). Cars are very risky this way because they go down in value. It is really easy to get a car loan where before long you are upside down. This is the problem with the term "good" debt. The label makes it sound like it is a good idea to have that debt, and the risk associated with having the debt is trivialized and allows yourself to feel good about your financial plan. Perhaps this is why so many houses are in foreclosure right now, people believed the "good" debt myth and thought that it was ok to borrow MORE than the home was worth to get into a house. Thus they turned a secured debt into an unsecured debt and put their residence at risk by levels of debt they couldn't afford. Other advice I've heard and tend to agree with, is that you should only borrow for a house, an education and maybe a car (danger on that last one), being careful to buy a modest house, car etc that is well within your means to repay. So if you do have to borrow for a car, go for basic transportation instead of the $40,000 BMW. Keep you house payment less than 1/4th of your take home pay. Pay off the school loans as quickly as possible. Regardless of the label, "good" "bad" "unsecured" "secured", I think that less debt is better than more debt. There is definitely such a thing as too much "good" debt! |
Equity - date of offer, or date of joining? | TL;DR: The date they were granted. (Usually, this follows both an offer and acceptance.) It's not uncommon for a new vesting clock to start when there's a new round of funding coming in, because the investors want to make sure the key people are going to be engaged and incentivized going forward from that point. They don't lower their expectations for how long they want folks engaged based on the person having started earlier. Non-institutional investors may have the same concerns as institutional investors here and use the same vesting strategy to address them. Primary recognition of the benefits from having had people start earlier or be there longer (so long as it correlates with having gotten more done) is embedded in the valuation (which affects how much founders' shares are diluted in the raise). |
Friend was brainwashed by MLM-/ponzi investment scam. What can I do? | Chances are high your friend isn't in it for the money, but the community or some vague dream of having a future income-generating side business because he can't get a loan for a 7-11 franchise. I run a few successful online businesses and had an import/export so naturally I run into these guys looking for advice on selling their MLM wares easier. I always point out they can make a lot of money cutting out the middle man MLM distributor and buy the same products from eBay or the same local supplier the MLM uses for a fraction of costs...then collect all the profit sans kickbacks to their host MLM goon/sponsor/father. I've never had anyone that bailed on the MLM, but I could see their eyes gloss over after they realized their own middle man is holding them back from making a lot of money (assuming they could offload that stuff). People actually in it for the money tend to bail (better sales job exist, MLM dreams don't pay rent, etc.) so you'll probably just need to isolate your friend from these losers somehow. You could investigate his sponsor and find out how much money he's actually making....if he tells your friend he's rich, but you find out he lives in the slums with his mom, your friend might bail on friendship/association with the group out of sheer disgust. It's the friends, not the logic you need to attack. His MLM friends would consider it a betrayal if he left them so you need to show him it's the MLM group that's betrayed his friendship. Point out all the long-term members driving junky cars to events who brag about their $$$. Laugh at the piss poor finance credentials of the local group leaders....ask where the investor perks are and suggest the sponsor/leaders are just hording them. Point out that he's a success and the fellow team members are just milking him to prop up their failing investments/sales/recruitment numbers. Nobody wants to let a team down....but the team isn't good enough for him. Deep down he knows the logic is questionable or at least risky/improbable, but his faith in the good intentions of his MLM cohorts is high.....crush that faith and all he's left with is bad finance tips or cheap protein shakes. |
Buying insurance (extended warranty or guarantee) on everyday goods / appliances? | Most of the consumer products that you buy at retail these days are commodity priced, and have been for a long time. Margins are thin, so if there are retail salespeople milling about, their compensation isn't coming from the TV or computer with a 6% gross margin. It comes from the extended warranty programs (which are not insurance and do not have regulated underwriting standards), which are typically sold at a 65-95% gross margin. So that $200 warranty most likely costs the retailer $50. The salesman gets $15-25. I paid for my college education working at a CompUSA selling these things, along with other high margin items that paid commission. In most cases, you aren't getting much coverage anyway. Most products carry a 1 year warranty, and using most "gold" or "platinum" credit cards doubles a manufacturer's warranty by up to 1 year. So with most transactions, you are already walking away with a 2 year warranty. Warranties or service plans make sense for durable goods that cost alot and are expected to last a long time and/or require regular maintenance. I think they especially make sense if your budget is really tight -- a fixed maintenance cost can be an asset to some people because they can plan around it. Examples of this include: service plans for a furnace, boiler or water heater or a car if you're buying a manufacturer-endorsed service/maintenance plan from a dealer. |
Simple and safe way to manage a lot of cash | If this money is intended to be used for retirement and depending on how old "older" is, it sounds a little risky to be putting too much money in a stock based mutual fund. While the CDs may seem like crappy investments right now, it is important to down-shift risk as you get closer to retirement because this person won't have as much time to recover if the markets take another big dip. |
Should one only pursue a growth investing approach for Roth IRAs | For me the aggressive approach makes sense since I have a longer time horizon before I need to withdraw the funds. This style should also match your personality and you should have the patience and appetite to deal with market fluctuations which can be wild in some cases (as we saw in 2008-2009). Not an easy question to answer since everyone's situation is different and everyone has to make their own decisions. |
First time investor wanting to invest in index funds especially Vanguard | Congratulations on deciding to save money and choosing to invest it. One thing to know about mutual funds including index funds is that they typically require a minimum investment of a few thousand dollars, $3000 being a typical amount, unless the investment is in an IRA in which case $1000 might be a minimum. In some cases, automated monthly investments of $50 or $100 might need to be set up if you are beginning with a small balance. There is nothing wrong with your approach. You now should go and look at the various requirements for specific index funds. The Fidelity and Vanguard families are good choices and both offer very low-cost index funds to choose from, but different funds can have different requirements regarding minimum investments etc. You also have a choice of which index you want to follow, the S&P 500 Index, MidCap Indexes, Small-Cap Indexes, Total Stock Market Indexes etc., but your choice might be limited until you have more money to invest because of minimum investment rules etc. Most important, after you have made your choice, I urge you to not look every day, or even every month, to see how your investment is doing. You will save yourself a lot of anxiety and will save yourself from making wrong decisions. Far too many investors ignore the maxim "Buy Low, Sell High" and pull money out of what should be long-term investments at the first flicker of a downturn and end up buying high and selling low. Finally, the time is approaching when most stock funds will be declaring dividends and capital gains distributions. If you invest now, you may end up with a paper profit on which you will have to pay taxes (in non-tax-advantaged accounts) on your 2012 tax return (this is called "buying a dividend"), and so you might want to spend some time investigating now, but actually make the investment in late December after your chosen fund has made its distributions (the date for this will be on the fund's web site) or in early 2013. |
Relation between interest rates and currency for a nation | From Indian context, there are a number of factors that are influencing the economic condition and the exchange rate, interest rate etc. are reflection of the situation. I shall try and answer the question through the above Indian example. India is running a budget deficit of 4 odd % for last 6-7 years, which means that gov.in is spending more than their revenue collection, this money is not in the system, so the govt. has to print the money, either the direct 4% or the interest it has to pay on the money it borrows to cover the 4% (don't confuse this with US printing post 2008). After printing, the supply of INR is more compared to USD in the market (INR is current A/C convertible), value of INR w.r.t. USD falls (in simplistic terms). There is another impact of this printing, it increases the money supply in domestic market leading to inflation and overall price rise. To contain this price rise, Reserve Bank of India (RBI) increases the interest rates and increases Compulsory Reserve Ratio (CRR), thus trying to pull/lock-up money, so that overall money supply decreases, but there is a limit to which RBI can do this as overall growth rate keeps falling as money is more expensive to borrow to invest. The above (in simplistic term) how this is working. However, there are many factors in economy and the above should be treated as it is intended to, a simplistic view only. |
Ballpark salary equivalent today of “healthcare benefits” in the US? | There is some magic involved in that calculation, because what health insurance is worth to you is not necessarily the same it is worth for the employer. Two examples that illustrate the extreme ends of the spectrum: let's say you or a family member have a chronic or a serious illness, especially if it is a preexisting condition - for instance, cancer. In that case, health insurance can be worth literally millions of dollars to you. Even if you are a diabetic, the value of health insurance can be substantial. Sometimes, it could even make financial sense in that case to accept a very low-paying job. On the other extreme of the scale, if you are very young and healthy, many people decide to forego insurance. In that case, the value of health insurance can be as little as the penalty (usually, 2% of your taxable income, I believe). |
Should I use regular or adjusted close for backtesting? | If you want to monitor how well you did in choosing your investments you will want to use stock prices that account for the dividends and splits and other changes (not just the closing price). The adjusted close will include these changes where the straight close will not include them. Using the adjusted close you will get your true percentage change. For example I have a stock called PETS that paid an $0.18 dividend in July 2015. The adjusted closes before that day in July are all $0.18 lower per share. Say the closing price had been unchanged at $20.00. The close prices would say I made no profit, but the adjusted closing price would say I made $0.18 per share on this investment because the adjusted close would read $19.82 in June 2015 but would read $20.00 in August 2015 (just like the closing price). The adjusted close allows me to know my true profit per share. |
Why might a brokerage firm stop offering a particular ETF commission free? | Forbes has an article investigating this. Here are the key parts: On line at the bottom of the list of funds there is an entire screen of grey-faded micro print which includes this telling disclosure: TD Ameritrade receives remuneration from certain ETFs (exchange-traded funds) that participate in the commission-free ETF program for shareholder, administrative and/or other services. In other words, TD Ameritrade is now enforcing a pay-to-play for their so-called commission-free exchange-traded funds. They are willing to forego their $6.95 trading commission in favor of remuneration directly from the ETF vendors. Because Vanguard refuses to pay such money to custodians, they are no longer being allowed to play. and Joseph Giannone, a TD Ameritrade spokesman, was quoted as saying, "With any business decision, client needs are paramount, but the underlying economics of programs can’t be ignored. ... In line with industry practices, certain providers pay servicing, administrative or other fees. Vanguard elected not to be a part of the new program." So basically it sounds like Vanguard, and presumably iShares as well, were unwilling to pay TD Ameritrade to continue offering their ETFs commission-free. |
What's an economic explanation for why greeting cards are so expensive? | It'll all about the marketing. If you don't get a "real" greeting card for that important birthday or anniversary or whatever, the recipient may thing you're being cheap for using a card you printed out yourself. So you pay $6 for a card because you feel like you have to. Hallmark advertises with those sappy TV commercials for a very good reason. The margins on the product are sky-high, and they spend a good chunk of that money on marketing the product. Perfume is the same way: super cheap to make, low barrier to entry, and the popular ones command a high price. |
What's the difference between Buy and Sell price on the stock exchange [duplicate] | The same as when you are buying a car. If a dealer quotes 10k and you quote 8k. 8k is the buy price and 10k is the sell price. Somebody might quote 8.5k and another dealer might quote 9.5k. The the new price that you see on your screen is 8.5k(Best buy price) and 9.5k(Best sell price). When the buyer and seller agree to an amount, the car(In your case stock) is traded. |
Question about being a resident | One thing to consider besides what rules Oregon has, is what rules your old state have. Of course the lack of income tax in Nevada means that most people are trying to convince their new state they are still a resident of Nevada. You are a full-year Oregon resident if you live in Oregon all year. You are also a full-year Oregon resident, even if you live outside Oregon, if all of the following are true: Part-year resident: You are a part-year resident if you moved into or out of Oregon during the tax year. The requirement for financial life means that you should: change all your Nevada banks to Oregon banks; Change all your mail to Oregon; Sell any property or end any leases you have in Nevada. Or course you need to research the rules for in state college tuition, death with dignity if any apply to you. In border areas you must be careful to establish residency for children to attend public schools. Some families try to cheat to get their children into a better school. |
Paid credit card bill, but money didn't leave my checking account [duplicate] | You probably don't need to call the bank. Today is Sunday, so three days ago was probably Friday (or Thursday depending on how you count the days). Banks normally don't post transactions on weekends - and transactions that do happen on the weekend sometimes don't get posted until Tuesday. I would give it till Tuesday and then call them if you still don't see it show up on your account. |
Most common types of financial scams an individual investor should beware of? | Cosigning on a loan. More broadly any exchange of value between family members or friends. Despite good intentions, these often go awry. |
When are investments taxed? | An investment is sold when you sell that particular stock or fund. It doesn't wait until you withdraw cash from the brokerage account. Whether an investment is subject to long term or short term taxes depends on how long you held that particular stock. Sorry, you can't get around the higher short term tax by leaving the money in a brokerage account or re-investing in something else. If you are invested in a mutual fund, whether it's long or short term depends on when you buy and sell the fund. The fact that the fund managers are buying and selling behind your back doesn't affect this. (I don't know what taxes they have to pay, maybe you really are paying for it in the form of management fees or lower returns, but you don't explicitly pay the tax on these "inner" transactions.) Your broker should send you a tax statement every year giving the numbers that you need to fill in to the various boxes of your income tax form. You don't have to figure it out. Of course it helps to know the rules. If you've held a stock for 11 1/2 months and are planning to sell, you might want to consider waiting a couple of weeks so it becomes a long term capital gain rather than short term and thus subject to lower tax. |
Whats the difference between day trading and flipping and their tax implications? | Flipping usually refers to real-estate transaction: you buy a property, improve/renovate/rehabilitate it and resell it quickly. The distinction between flipper and investor is similar to the distinction between trader and investor, even though the tax code doesn't explicitly refer to house flipping. Gains on house flipping can be considered as active business gain or passive activity income, which are treated differently: passive income goes on Schedule E and Schedule D, active income goes on Schedule C. The distinction between passive and active is based on the characteristics of the activity (hours you spent on it, among other things). Trading income can similarly be considered as either passive (Schedule D/E treatment) or active (Schedule C treatment). Here's what the IRS has to say about traders: Special rules apply if you are a trader in securities, in the business of buying and selling securities for your own account. This is considered a business, even though you do not maintain an inventory and do not have customers. To be engaged in business as a trader in securities, you must meet all of the following conditions: The following facts and circumstances should be considered in determining if your activity is a securities trading business: If the nature of your trading activities does not qualify as a business, you are considered an investor... Investor, in this context, means passive income treatment (Schedule D/E). However, even if your income is considered active (Schedule C), stock sale proceeds are not subject to the self-employment tax. As you can see, there's no specific definition, but the facts and circumstances matter. You may be considered a trader by the IRS, or you may not. You may want to be considered a trader (for example to be able to make a mark-to-market election), or you may not. You should talk to a professional tax adviser (EA/CPA licensed in your State) for more details and suggestions. |
How do I interpret these income tax numbers for Chinese public company Dangdang Inc. (DANG)? | It was not taxed in the previous years because it wasn't in profit. The amount for 2010 is more due to accounting treatment, on account of "Deferred Domestic Income Tax". The figures are at http://data.cnbc.com/quotes/DANG/tab/7.2 You can search for a better understanding of Deferred Domestic Income Tax, a brief explanation is at http://www.investopedia.com/terms/d/deferredincometax.asp |
Online sites for real time bond prices | FINRA lets you view recent trades, but as stated in the other answer bonds are illiquid and often do not trade frequently. Therefore recent trades prices are only a rough estimate of the current price that would be accepted. http://finra-markets.morningstar.com/BondCenter/Default.jsp |
What are some time tested passive income streams? | Any kind of savings account is a passive income stream. |
Why would a company care about the price of its own shares in the stock market? | Investors are typically a part of the board of directors of the company. Because of their ownership in the company, they have a vested interest in its stock price. The same is true for management also in cases where they hold a certain percentage of equity in the company. Their incentives also get aligned to the stock price. |
Theoretically, if I bought more than 50% of a company's stocks, will I own the company? | The person holding the majority of shares can influence the decisions of the company. Even though the shareholder holds majority of the shares,the Board of Directors appointed by the shareholders in the Annual General Meeting will run the company. As said in the characteristics of the company,the owners and the administrators of the company are different. The shareholder holding majority of the shares can influence the business decisions like appointing the auditor,director etc. and any other business decisions(not taken in the ordinary business) that are taken in the Annual General Meeting. |
Stocks: do Good Till Cancelled orders get executed during after hours? | You'd have to check the rules for your broker to make sure that the term is being used in its usual sense, but the typical answer to your question is "no." A GTC will execute during market hours. You would need to explicitly specify extended hours if you want to execute outside of market hours (which your broker may or may not support). |
Can I lose more on Forex than I deposit? | It's the same as with equities. If you're just buying foreign currencies to hold, you can't lose more than you invest. But if you're buying derivatives (e.g. forward contracts or spread bets), or borrowing to buy on margin, you can certainly lose more than you invest. |
What are the differences between an investment mortgage and a personal mortgage? | It's just a guess, as I'm from the UK and am unfamiliar with the term "investment" mortgage but is it one where you are buying the property in order to rent it out, and make money from it, rather than to live in? In the UK we call those "buy to let" mortgages and one of the main differences is that you have to have a higher deposit to get that type. |
How does Big Money work? (i.e. stocks, Enron, net worth) | 1) You ignore dividends. You can hold your 10 million shares and never sell them and still get cash to live on if the security pays dividends. McDonalds stock pays 3% in dividends (a year). If you owned 10 million shares of McDonalds you would get 75,000 every three months. I am sure you could live on 25,000 a month. 2) Enron was an energy company. They sold energy and made a profit (or rather were supposed to). Enron didn't make their money by selling stock. McDonalds makes their money by selling hamburgers (and other food). The income of a company comes from their customers, not from selling stock. 3) IF you sold all of your 10 million shares within a short time frame it, likely, would drive the price of the stock down. But you do not need a billion dollars to live on. If you sold 1000 shares each month you would have plenty for buying cars and pizza. Selling 1000 shares may drive the price of the stock down for a minute or two. But the rest of the transactions, for that security made the same day, would quickly obscure the effect you had on the stock. 4) When you buy stock your money does not (usualy) go to the company. If I were to buy 100 shares of McDonalds, McDonalds would not get $11670.That money is (usually) paid to a 'Market Maker' who, in turn, will use the cash to buy MCD from other individual shareholders (presumably for less than 116.70 a share). |
Estimate probability distribution of profit on investment | There is no simple answer to that, because no one knows exactly what the probability distribution of S&P 500 returns is. Here is a sketch of one possible way to proceed. Don't forget step 4! The problem is that the stock market is full of surprises, so this kind of "backtesting" can only reliably tell you about what already happened, not what will happen in the future. People argue about how much you can learn from this kind of analysis. However, it is at the least a clearly defined and objective process. I wouldn't advise investing your whole nest egg in anything based just on this, but I do think that it is relevant information. |
Is there a legal deadline for when your bank/brokerage has to send your tax forms to you? | Many of the custodians (ie. Schwab) file for an extension on 1099s. They file for an extension as many of their accounts have positions with foreign income which creates tax reporting issues. If they did not file for extension they would have to send out 1099s at the end of January and then send out corrected forms. Obviously sending out one 1099 is cheaper and less confusing to all. Hope that helps, |
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