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Buying insurance (extended warranty or guarantee) on everyday goods / appliances? | I politely decline. Insurance is there to protect me against catastrophic financial loss (huge medical bills, owing a mortgage on a house that burned down, etc.) not a way to game the system and pay for routine expenses or repairs. |
Best way to start investing, for a young person just starting their career? | First off, I highly recommend the book Get a Financial Life. The basics of personal finance and money management are pretty straightforward, and this book does a great job with it. It is very light reading, and it really geared for the young person starting their career. It isn't the most current book (pre real-estate boom), but the recommendations in the book are still sound. (update 8/28/2012: New edition of the book came out.) Now, with that out of the way, there's really two kinds of "investing" to think about: For most individuals, it is best to take care of #1 first. Most people shouldn't even think about #2 until they have fully funded their retirement accounts, established an emergency fund, and gotten their debt under control. There are lots of financial incentives for retirement investing, both from your employer, and the government. All the more reason to take care of #1 before #2! Your employer probably offers some kind of 401k (or equivalent, like a 403b) with a company-provided match. This is a potential 100% return on your investment after the vesting period. No investment you make on your own will ever match that. Additionally, there are tax advantages to contributing to the 401k. (The money you contribute doesn't count as taxable income.) The best way to start investing is to learn about your employer's retirement plan, and contribute enough to fully utilize the employer matching. Beyond this, there are also Individual Retirement Accounts (IRAs) you can open to contribute money to on your own. You should open one of these and start contributing, but only after you have fully utilized the employer matching with the 401k. The IRA won't give you that 100% ROI that the 401k will. Keep in mind that retirement investments are pretty much "walled off" from your day-to-day financial life. Money that goes into a retirement account generally can't be touched until retirement age, unless you want to pay lots of taxes and penalties. You generally don't want to put the money for your house down payment into a retirement account. One other thing to note: Your 401K and your IRA is an account that you put money into. Just because the money is sitting in the account doesn't necessarily mean it is invested. You put the money into this account, and then you use this money for investments. How you invest the retirement money is a topic unto itself. Here is a good starting point. If you want to ask questions about retirement portfolios, it is probably worth posting a new question. |
Is it bad practice to invest in stocks that fluctuate by single points throughout the day? | Its hard to write much in those comment boxes, so I'll just make an answer, although its really not a formal answer. Regarding commissions, it costs me $5 per trade, so that's actually $10 per trade ($5 to buy, $5 to sell). An ETF like TNA ($58 per share currently) fluctuates $1 or $2 per day. IXC is $40 per share and fluctuates nearly 50 cents per day (a little less). So to make any decent money per trade would mean a share size of 50 shares TNA which means I need $2900 in cash (TNA is not marginable). If it goes up $1 and I sell, that's $10 for the broker and $40 for me. I would consider this to be the minimum share size for TNA. For IXC, 100 shares would cost me $4000 / 2 = $2000 since IXC is marginable. If IXC goes up 50 cents, that's $10 for the broker and $40 for me. IXC also pays a decent dividend. TNA does not. You'll notice the amount of cash needed to capture these gains is roughly the same. (Actually, to capture daily moves in IXC, you'll need a bit more than $2000 because it doesn't vary quite a full 50 cents each day). At first, I thought you were describing range trading or stock channeling, but those systems require stop losses when the range or channel is broken. You're now talking about holding forever until you get 1 or 2 points of profit. Therefore, I wouldn't trade stocks at all. Stocks could go to zero, ETFs will not. It seems to me you're looking for a way to generate small, consistent returns and you're not seeking to strike it rich in one trade. Therefore, buying something that pays a dividend would be a good idea if you plan to hold forever while waiting for your 1 or 2 points. In your system you're also going to have to define when to get back in the trade. If you buy IXC now at $40 and it goes to $41 and you sell, do you wait for it to come back to $40? What if it never does? Are you happy with having only made one trade for $40 profit in your lifetime? What if it goes up to $45 and then dips to $42, do you buy at $42? If so, what stops you from eventually buying at the tippy top? Or even worse, what stops you from feeling even more confident at the top and buying bigger lots? If it gets to $49, surely it will cover that last buck to $50, right? /sarc What if you bought IXC at $40 and it went down. Now what? Do you take up gardening as a hobby while waiting for IXC to come back? Do you buy more at lower prices and average down? Do you find other stocks to trade? If so, how long until you run out of money and you start getting margin calls? Then you'll be forced to sell at the bottom when you should be buying more. All these systems seem easy, but when you actually get in there and try to use them, you'll find they're not so easy. Anything that is obvious, won't work anymore. And even when you find something that is obvious and bet that it stops working, you'll be wrong then too. The thing is, if you think of it, many others just like you also think of it... therefore it can't work because everyone can't make money in stocks just like everyone at the poker table can't make money. If you can make 1% or 2% per day on your money, that's actually quite good and not too many people can do that. Or maybe its better to say, if you can make 2% per trade, and not take a 50% loss per 10 trades, you're doing quite well. If you make $40 per trade profit while working with $2-3k and you do that 50 times per year (50 trades is not a lot in a year), you've doubled your money for the year. Who does that on a consistent basis? To expect that kind of performance is just unrealistic. It much easier to earn $2k with $100k than it is to double $2k in a year. In stocks, money flows TO those who have it and FROM those who don't. You have to plan for all possibilities, form a system then stick to it, and not take on too much risk or expect big (unrealistic) rewards. Daytrading You make 4 roundtrips in 5 days, that broker labels you a pattern daytrader. Once you're labeled, its for life at that brokerage. If you switch to a new broker, the new broker doesn't know your dealings with the old broker, therefore you'll have to establish a new pattern with the new broker in order to be labeled. If the SEC were to ask, the broker would have to say 'yes' or 'no' concering if you established a pattern of daytrading at that brokerage. Suppose you make the 4 roundtrips and then you make a 5th that triggers the call. The broker will call you up and say you either need to deposit enough to bring your account to $25k or you need to never make another daytrade at that firm... ever! That's the only warning you'll ever get. If you're in violation again, they lock your account to closing positions until you send in funds to bring the balance up to $25k. All you need to do is have the money hit your account, you can take it right back out again. Once your account has $25k, you're allowed to trade again.... even if you remove $15k of it that same day. If you trigger the call again, you have to send the $15k back in, then take it back out. Having the label is not all bad... they give you 4x margin. So with $25k, you can buy $100k of marginable stock. I don't know... that could be a bad thing too. You could get a margin call at the end of the day for owning $100k of stock when you're only allowed to own $50k overnight. I believe that's a fed call and its a pretty big deal. |
New to investing — I have $20,000 cash saved, what should I do with it? | This advice will be too specific, but... With the non-retirement funds, start by paying off the car loan if it's more than ~3% interest rate. The remainder: looks like a good emergency fund. If you don't have one of those yet, you do now. Store it in the best interest-bearing savings account you can find (probably accessible by online banking). If you wish to grow your emergency fund beyond $14-20,000 you might also consider some bonds, to boost your returns and add a little risk (but not nearly as much risk as stocks). With the Roth IRA - first of all, toss the precious metals. Precious metals are a crisis hedge and an advanced speculative instrument, not a beginner's investment strategy for 40% of the portfolio. You're either going to use this money for retirement, or your down payment fund. If it's retirement: you're 28; even with a kid on the way, you can afford to take risks in the retirement portfolio. Put it in either a targe-date fund or a series of index funds with an asset allocation suggested by an asset-allocation-suggestion calculator. You should probably have north of 80% stocks if it's money for retirement. If you're starting a down-payment fund, or want to save for something similar, or if you want to treat the IRA money like it's a down-payment fund, either use one of these Vanguard LifeStrategy funds or something that's structured to do the same sort of thing. I'm throwing Vanguard links at you because they have the funds with the low expense ratios. You can use Vanguard at your discretion if it's all an IRA (and not a 401(k)). Feel free to use an alternative, but watch the expense ratios lest they consume up to half your returns. |
How should I pay off my private student loans that have a lot of restrictions? | Excellent question and it is a debate that is often raised. Mathematically you are probably best off using option #1. Any money that is above and beyond minimum payments earns a pretty high interest rate, about 6.82% in the form of saved interest payments. The problem is you are likely to get discouraged. Personal finance is a lot about behavior, and after working at this for a year, and still having 5 loans, albeit a lower balance, might take a bit of fight out of you. Paying off such a large balance, in a reasonable time, will take a lot of fight. With the debt snowball, you pay the minimum to the student loan, save in an outside account, and when it is large enough, you execute option #2. So a year from now you might only have three loans instead of five. If you behaved exactly the same your balance would be higher after that year then using the previous method. However often one does not behave the same. Because the goals are shorter and more attainable it is easier to delay some gratification. The 8 dollars you are saving in your weekly gas budget, because of low prices, is meaningful when saving for a 4K goal, where it is meaningless when looking at it as a 74K goal. With the 4K goal you are more apt to put that money in your savings, where the 74K goal you might spend it on a latte. For me, the debt snowball worked really well. With either option make sure that excess payments actually go to a reduction in principle not a prepayment of interest. Given this you may be left with no option. For example if method #1 you only prepay interest, you are forced to use option #2. |
Investment strategy for retired couple | The safest investment in the United States is Treasures. The Federal Reserve just increased the short term rate for the first time in about seven years. But the banks are under no obligation to increase the rate they pay. So you (or rather they) can loan money directly to the United States Government by buying Bills, Notes, or Bonds. To do this you set up an account with Treasury Direct. You print off a form (available at the website) and take the filled out form to the bank. At the bank their identity and citizenship will be verified and the bank will complete the form. The form is then mailed into Treasury Direct. There are at least two investments you can make at Treasury Direct that guarantee a rate of return better than the inflation rate. They are I-series bonds and Treasury Inflation Protected Securities (TIPS). Personally, I prefer the I-series bonds to TIPS. Here is a link to the Treasury Direct website for information on I-series bonds. this link takes you to information on TIPS. Edit: To the best of my understanding, the Federal Reserve has no ability to set the rate for notes and bonds. It is my understanding that they can only directly control the overnight rate. Which is the rate the banks get for parking their money with the Fed overnight. I believe that the rates for longer term instruments are set by the market and are not mandated by the Fed (or anyone else in government). It is only by indirect influence that the Fed tries to change long term rates. |
If a country can just print money, is global debt between countries real? | Debt can be denominated either in a currency the country controls or a currency the country doesn't control. If the debt is denominated in a currency the country controls then they have the option of "printing their way out of it". That option doesn't come for free, it will devalue their currency on the global market and hurt savers in their country but it is an option. If the debt is denominated in a currency the country does not control then they don't have that option. As I understand it the US debt is in the first category. It's denominated in US dollars so the US government could if they so wished print their way out of it. On the other hand greece's debt is denominated in euros putting them at the mercy of european bankers. |
How might trading volume affect future share price? | As said previously, most of the time volume does not affect stock prices, except with penny stocks. These stocks typically have a small volume in the 3 or 4 figure range and because of this they typically experience very sharp rises and drops in stock prices, contrasting normal stocks that go up and down constantly every minute. Volume is not one thing you should be looking at when analyzing a stock in most cases, since it is simply the number of people of trades made in a day. That has no effect on the value of the company, whereas looking at P/E ratios, dividend growth, etc all can be analyzed to see if a company is growing and is doing well in its field. If I buy an iPhone, it doesn't matter if 100 other people or 100,000 other people have bought it as well, since they won't really affect my experience with the product. Whereas the type of iPhone I buy will. |
Other ETFs of world bonds and stocks (Alternatives to VT and BND)? | Here is another choice I like, iShares JPMorgan USD Emerging Markets Bond (EMB) Here is the world ETFs |
Are bonds really a recession proof investment? | You're mixing up two different concepts: low-risk and recession-proof. I'll assume I don't need to explain risk: there is always risk, regardless what form you keep your assets in. With bonds, the interest rate is supposed to reflect the risk. If a company offers bonds with too low an interest rate for the risk level, few people will buy them. While if a company offers bonds with too high an interest rate for the level of risk, they are gypping themselves. So a bond is a slightly more transparent investment from a risk assessment perspective, but that doesn't mean the risk is necessarily low: if you buy a bond with a 20% effective annual yield, that means there is quite a high risk that the underlying company will fold (unless inflation is in the double-digit range as well, in which case a 20% yield is not that much). Whereas with a stock, no parameter directly tells you anything about the risk. Recession-proof is not the same thing as low-risk. Recession-proof refers to investing in (or holding debt for) industries that perform better in a recession. http://www.investopedia.com/articles/stocks/08/industries-thrive-on-recession.asp. |
Stock Certificate In two names | The common way to frame the "should I sell" question is ask yourself "would you buy it today at the current price". If you wouldn't, sell it. Is sounds like this may be a paper certificate. You will have to research how to present the certificate to a broker to trade it, or if the company has a direct shareholder program. I have periodically been offered to sell "odd lots" to shareholder programs which, if one exists, may be less hassle than other options. As a part of this, your mother's estate administrator should decide if the estate is selling it's interest, or giving it's interest to heirs before the sale. |
How can I build up my credit history when I have nearly none | You're going to have a huge problem getting approved for anything as long as you have an unpaid bill on your report. Pay it and make sure its reported as paid in full - ASAP. Once that settled, your credit will start to improve slowly. Can't do anything about that, it will take time. You can make the situation improve a bit faster by lending money to yourself and having it reported regularly on your report. How? Easy. Get a secured credit card. What does it mean? You put X amount of money in a CD and the bank will issue you a credit card secured by that CD. Your credit line will be based on the amount in that CD, and you'll probably pay some fees to the bank for the service (~$20-50/year, shop around). You might get lucky and find a secured card without fees, if you look hard enough. Secured cards are reported as revolving credit (just as any other credit card) and are easy to get because the bank doesn't take the risk - you do. If you default on your payments - your CD goes to cover the debt, and the card gets cancelled. But make absolutely sure that you do not default. Charge between 10% and 30% of the credit limit each month, not more. Pay the balance shown on your credit card statement in full every month and by the due date shown on your monthly statement. It will take a while, but you would typically start noticing the improvement within ~6-12 months. Stop applying for stuff. Not store cards, not car loans, you're not going to get anything, and will just keep dragging your scores down. Each time you have a pull on your report, the score goes down. A lot of pulls, frequent pulls - the score goes down a lot. Lenders can see when one is desperate, and no-one wants to lend money to desperate people. Optimally lenders want to lend money to people who doesn't need loans, but in order to keep the business running they'll settle for slightly less - people who don't usually need loans, and pay the loans they do have on time. You fail on both, as you're desperate for a loan and you have unpaid bills on your report. |
Get a loan with low interest rate on small business | I am going to assume your location is the US. From what I am seeing it is unlikely you will get a loan other than some government backed thing. You are a poor risk. At 7k/month, you have above average household income. The fact that all of your income "is being washed off somewhere" is a behavior problem, not a mathematical one. For example, why do you have a car payment? You should purchase a car for cash. Failing that, given reasonable rent (1100), reasonable car payment (400), insurances (300), other expenses (1000), you should clear at least 4000 per month in cash flow. Where is that money going? Here tracking spending and budgeting is your friend. Figure out the leaks in your budget and fix them. By cutting back, and perhaps working a second job or somehow earning more you could have a down payment for a home in as little as 10 months. That is not a very long time. Similarly we can discuss the grocery store. Had you prepared for this moment three years ago you could have bought the store for cash. This would have eliminated a bunch of risk and increase the likelihood of this venture's success. If you had started this one year ago, you could have gone in with a significant down payment. The bank would see this as a good risk if you wanted to borrow the remainder. Instead the bank sees you as a person as a poor risk. You spend every dime you make without much concern for the future or possible negative events (by implication of your question). If you cannot handle the cash flows of regular employment well, how can you handle the cash flows of a grocery business? It is far more complex, and there is far less room for error. So how do you get a loan? I would start with learning on how to manage your personal finance well prior to delving into the world of business. |
Where can I trade FX spot options, other than saxobank.com? | Have you looked at ThinkorSwim, which is now part of TD Ameritrade? Because of their new owner, you'll certainly be accepted as a US customer and the support will likely be responsive. They are certainly pushing webinars and learning resources around the ThinkorSwim platform. At the least you can start a Live Help session and get your answers. That link will take you to the supported order types list. Another tab there will show you the currency pairs. USD is available with both CAD and JPY. Looks like the minimum balance requirement is $25k across all ThinkorSwim accounts. Barron's likes the platform and their annual review may help you find reasons to like it. Here is more specific news from a press release: OMAHA, Neb., Aug 24, 2010 (BUSINESS WIRE) -- TD AMERITRADE Holding Corporation (NASDAQ: AMTD) today announced that futures and spot forex (foreign exchange) trading capabilities are now available via the firm's thinkorswim from TD AMERITRADE trading platform, joining the recently introduced complex options functionality. |
Official Bank Check | The legal department at the Bank left me a message telling me that the bank check was paid & the recipient got the funds. Call up the bank and find out who the recipient was. Generally it can only be cashed by the person whose name is on it - the original business partner to whom it was intended. It is unlikely to be cashed by the attorney, unless he misrepresented the facts to the bank and got the funds. My question is how could he have cashed it without the original bank check? The other possibility is your mom lost this check, went to the bank and requested them to cancel this and reissue a fresh banker's check and give it to the business partner - in which case the check you had was worthless. You would need to work with the bank and ask them for details. However without the details of the original bank check that you found, it would be difficult for the bank to help you. |
My boss wants to buy me a gift. How do I account for taxes for this? | Gifts given and received between business partners or employers/employees are treated as income, if they are beyond minimal value. If your boss gives you a gift, s/he should include it as part of your taxable wages for payroll purposes - which means that some of your wages should be withheld to cover income, social security, and Medicare taxes on it. At the end of the year, the value of the gift should be included in Box 1 (wages) of your form W-2. Assuming that's the case, you don't need to do anything special. A 1099-MISC would not be appropriate because you are an employee of your boss - so the two of you need to address the full panoply of employment taxes, not just income tax, which would be the result if the payment were reported on 1099-MISC. If the employer wants to cover the cost to you of the taxes on the gift, they'll need to "gross up" your pay to cover it. Let's say your employer gives you a gift worth $100, and you're in a 25% tax bracket. Your employer has to give you $125 so that you end up with a gain of $100. But the extra $25 is taxable, too, so your employer will need to add on an extra $6.25 to cover the 25% tax on the $25. But, wait, now we've gotta pay 25% tax on the $6.25, so they add an extra $1.56 to cover that tax. And now they've gotta pay an extra $.39 . . . The formula to calculate the gross-up amount is: where [TAX RATE] is the tax rate expressed as a percentage. So, to get the grossed-up amount for a $100 gift in a 25% bracket, we'd calculate 1/(1-.25), or 1/.75, or 1.333, multiply that by the target gift amount of $100, and end up with $133.33. The equation is a little uglier if you have to pay state income taxes that are deductible on the federal return but it's a similar principle. The entire $133.33 would then be reported as income, but the net effect on the employee is that they're $100 richer after taxes. The "gross-up" idea can be quite complicated if you dig into the details - there are some circumstances where an additional few dollars of income can have an unexpected impact on a tax return, in a fashion not obvious from looking at the tax table. If the employer doesn't include the gift in Box 1 on the W-2 but you want to pay taxes on it anyway, include the amount in Line 7 on the 1040 as if it had been on a W-2, and fill out form 8919 to calculate the FICA taxes that should have been withheld. |
Nanny taxes and payroll service | Whether to employ a payroll service to handle the taxes (and possibly the payroll itself) is a matter that depends on how savvy you are with respect to your own taxes and with using computers in general. If you are comfortable using programs such as Excel, or Quicken, or TurboTax, or TaxAct etc, then taking care of payroll taxes on a nanny's wages all by yourself is not too hard. If you take a shoebox full of receipts and paystubs to your accountant each April to prepare your personal income tax returns and sign whatever the accountant puts in front of you as your tax return, then you do need to hire a payroll service. It will also cost you a bundle since there are no economies of scale to help you; there is only one employee to be paid. |
Am I liable for an auto accident if I'm a cosigner but not on the title, registration, or insurance policy? | You can be sued if some random stranger that you never had any interaction with gets in an accident. There is really no barrier to people suing you if they get it in their head that they want to. Winning that lawsuit is another matter entirely. Whether you would be held liable and lose the lawsuit depends on whether someone can convince a court that you are partially responsible for a financial loss. Not sure how anyone could possibly successfully argue that in this situation. |
Does the Black-Scholes Model apply to American Style options? | The difference between an American and European option is that the American option can be exercised at any time, whereas the European option can be liquidated only on the settlement date. The American option is "continuous time" instrument, while the European option is a "point in time" instrument. Black Scholes applies to the latter, European, option. Under "certain" (but by no means all) circumstances, the two are close enough to be regarded as substitutes. One of their disciples, Robert Merton, "tweaked" it to describe American options. There are debates about this, and other tweaks, years later. |
Calculation, timing, and taxes related to profit distribution of an S-corp? | We will bill our clients periodically and will get paid monthly. Who are "we"? If you're not employed - you're not the one doing the work or billing the client. Would IRS care about this or this should be something written in the policy of our company. For example: "Every two months profits get divided 50/50" They won't. S-Corp is a pass-through entity. We plan to use Schedule K when filing taxes for 2015. I've never filled a schedule K before, will the profit distributions be reflected on this form? Yes, that is what it is for. We might need extra help in 2015, so we plan to hire an additional employee (who will not be a shareholder). Will our tax liability go down by doing this? Down in what sense? Payroll is deductible, if that's what you mean. Are there certain other things that should be kept in mind to reduce the tax liability? Yes. Getting a proper tax adviser (EA/CPA licensed in your State) to explain to you what S-Corp is, how it works, how payroll works, how owner-shareholder is taxed etc etc. |
How to find out if a company is legit? | It depends greatly from place to place, but nothing beats the Internet reviews' research. If you can't find anything digging slightly deeper than the impressive home page, then you probably should be worried. As it seems that you are. Specifically, I do these: @JohnFX mentions a valid point: check for physical presence. Check that the office address is a real office and not a PO box or residential; call the number and see who answers it (if you call several times during different hours and the same person answers - that's probably a one-man operation). But that doesn't always help because short-term renting an office is not all that hard and getting a call-centre outsourced to a third-world country doesn't cost all that much. It definitely helps if you're dealing with someone local, but if you're in Sweden and checking out a suspicious operation in Cyprus - this is definitely not enough. |
Do companies that get taken-over have to honour the old gift card/certificate? | It depends completely on the nature of the takeover. When a business is bought, the new owner takes on the obligations of the prior owner, the debts don't just go away. When a business files for bankruptcy, its debts may get discharged, and gift card holders can easily be the first ones to get nothing back. A case in point was Sharper Image who stopped honoring gift cards even while the doors were open as they filed for bankruptcy. |
My Co-Signer is the Primary Account Holder for my Car Loan - Does this affect my credit? | It sounds like your father got a loan and you are making the payments. If your name and SSN are not on the loan then you are not getting credit for making the payments your father is. So it will not affect your credit. If you are on the loan as a secondary borrower it will affect your credit but not substantially on the positive but could affect it substantially on the negative side. Since your father is named as the primary borrower you will probably need to talk with him about it first. If this is a mistake the 2 of you will need to work together with the bank to get it corrected. Since your father is currently listed first the bank is probably going to be unable(even if they are willing) to make a change to the loan now with out his explicit permission. In addition if the loan is in your fathers name, if it is a vehicle loan, then the car is most likely in your fathers name as well. Most states require that the primary signatory on a vehicle loan also be the primary owner on the title to the vehicle. If your fathers name is the primary name on the title then you would have to retitle the car to refinance in your name. |
What implications does having the highest household debt to disposable income ratio have on Australia? | Stock market Tends to follow the DJIA and FTSE, so unlikely to see an Australia-only crash, especially while resources are doing so well. If China's growth slows before other ailing sectors improve, a downturn becomes more likely and the potential severity of the downturn increases. Economy A huge question to which I would refer you to Steve Keen: http://www.debtdeflation.com/blogs/ See A Fork in the Road. Housing Market It's a bubble, stupid! Seriously, it's as though the Aussies waited for the US to get done and then simply borrowed the copy book. There are a multitude of articles out there about likely outcomes from where the housing market is and where it's going. See this for a sample of what's out there: http://blogs.forbes.com/greatspeculations/2010/07/26/aussie-housing-bubble-gets-popped-with-chinese-credit-crash/ Note: All three of the areas you raise - economy, stock mkt, housing - are so intertwined that it's tricky separating them out. A lot of reading on Steve Keen's site can help. |
Why does the calculation for percentage profit vary based on whether a position is short vs. long? | There are different perspectives from which to calculate the gain, but the way I think it should be done is with respect to the risk you've assumed in the original position, which the simplistic calculation doesn't factor in. There's a good explanation about calculating the return from a short sale at Investopedia. Here's the part that I consider most relevant: [...] When calculating the return of a short sale, you need to compare the amount the trader gets to keep to the initial amount of the liability. Had the trade in our example turned against you, you (as the short seller) would owe not only the initial proceeds amount but also the excess amount, and this would come out of your pocket. [...] Refer to the source link for the full explanation. Update: As you can see from the other answers and comments, it is a more complex a Q&A than it may first appear. I subsequently found this interesting paper which discusses the difficulty of rate of return with respect to short sales and other atypical trades: Excerpt: [...] The problem causing this almost uniform omission of a percentage return on short sales, options (especially writing), and futures, it may be speculated, is that the nigh-well universal and conventional definition of rate of return involving an initial cash outflow followed by a later cash inflow does not appear to fit these investment situations. None of the investment finance texts nor general finance texts, undergraduate or graduate, have formally or explicitly shown how to resolve this predicament or how to justify the calculations they actually use. [...] |
What ways are there for us to earn a little extra side money? | It depends on where you live and how you can think out of the box on earning little extra income on the side. If you live in North America and based on the needs in your city, you can try out these ideas. Here is what one of my friend has done, The family has two kids and the wife started a home day care as she was already taking care of two kids anyways. Of course, she had to be qualified and she took the relevant child care classes and got certified, which took six months. And she is managing 4 kids in addition to her two kids bringing in at least 2000$ per month in addition. And my friend started a part time property management business on the side, with one client. For example there is always work on real estate whether its going up or going down. You have to be involved locally to increase your knowledge on real estate. You can be a property manager for local real estate investors. If its going down, you can get involved in helping people sell and buy real estate. Be a connector, bring the buyers and sellers together. |
Capital Gains Tax with Multiple 'buy' Transactions per Stock (U.S.) | From 26 CFR 1.1012(c)(1)i): ... if a taxpayer sells or transfers shares of stock in a corporation that the taxpayer purchased or acquired on different dates or at different prices and the taxpayer does not adequately identify the lot from which the stock is sold or transferred, the stock sold or transferred is charged against the earliest lot the taxpayer purchased or acquired to determine the basis and holding period of the stock. From 26 CFR 1.1012(c)(3): (i) Where the stock is left in the custody of a broker or other agent, an adequate identification is made if— (a) At the time of the sale or transfer, the taxpayer specifies to such broker or other agent having custody of the stock the particular stock to be sold or transferred, and ... So if you don't specify, the first share bought (for $100) is the one sold, and you have a capital gain of $800. But you can specify to the broker if you would rather sell the stock bought later (and thus have a lower gain). This can either be done for the individual sale (no later than the settlement date of the trade), or via standing order: 26 CFR 1.1012(c)(8) ... A standing order or instruction for the specific identification of stock is treated as an adequate identification made at the time of sale, transfer, delivery, or distribution. |
How are stock buybacks not considered insider trading? | Companies already have to protect themselves against employees trading the company's shares with insider information. They typically do that in a number of ways: Taken together, this tends to mostly mitigate the risk of employees trading with insider information, though it's probably not perfect. In practice, the company itself's knowledge of insider information is the same as that of its senior management. So it makes sense for a company to be allowed to trade under the same conditions as its senior management. From https://corpgov.law.harvard.edu/2013/03/14/questions-surrounding-share-repurchases/ : If the company is repurchasing outside of a Rule 10b5-1 trading plan, it should limit its purchases to open window periods when officers and directors are able to buy and sell securities of the company. In addition, the company also can choose to disclose any material non-public information prior to any share repurchase if it is in possession of material non-public information at a time when it is seeking to make a share repurchase outside of a Rule 10b5-1 trading plan. As mentioned in the quote, a company can also set up a trading plan in advance (at a time when it doesn't have inside information) to be executed unconditionally in the future. Then even if the company comes into possession of inside information, it won't be using this knowledge to direct trades. |
Converting annual interbank rates into monthly rates | The formula you're looking for is Thus, from 3% p.a. you get ca. 0.247% per month. However, as you see 0.25% is a good approximation (generally, small rates give good approximation). |
Are banks really making less profit when interest rates are low? | profit has nothing to do with the level of interest rates. Is this correct? In theory, yes. The difference that you're getting at is called net interest margin. As long as this stays constant, so does the bank's profit. According to this article: As long as the interest rate charged on loans doesn't decline faster than the interest rate received on deposit accounts, banks can continue to operate normally or even reduce their bad loan exposure by offering lower lending rates to already-proven borrowers. So banks may be able to acquire the same net interest margin with lower risk. However the article also mentions new research from a federal agency: Their findings show that net interest margins (NIMs) get worse during low-rate environments, defined as any time when a country's three-month sovereign bond yield is less than 1.25%. So in theory banks should remain profitable when interest rates are low, but this may not actually be the case. |
Growth rate plus dividend yieid total? | The sum of the dividend yield plus capital growth is called total return. In your examples, you get to a total return of 7% through several different (and theoretically equivalent) paths. That is the right way of thinking. |
How can I register a UK business without providing a business address? | You don't have to provide your personal home address per se. You can provide a legal address where Companies house can send across paper correspondence to. Companies house legally requires an address because directors are liable to their shareholders(even if you are the only shareholder) and to stop them from disappearing just like that with shareholder's money. Moreover your birth date will also be visible on websites which provide comapnies information. You can ask these websites to stop sharing your personal information. Every company must have a registered office within the UK which is the official legal address of the company. It must be a physical address (i.e. not a PO Box without a physical location) as Companies House will use this address to send correspondence to. To incorporate a private limited company you need at least one director, who has to be over 16 years of age. You may also have a secretary, but this is optional. The information you will need to supply for each officer includes: You may also have officers that are companies or firms, and for these you will need to supply the company or firm name, its registered office address, details of the legal form of the company, where it is registered and if applicable its registration number. |
Does dollar cost averaging really work? | Dollar cost averaging moderates risk. But you pay for this by giving up the chance for higher gains. If you took a hundred people and randomly had them fully buy into the market over a decade period, some of those people will do very well (relative to the rest) while others will do very poorly (relatively). If you dollar cost average, your performance would fall into the middle so you don't fall into the bottom (but you won't fall into the top either). |
Any sane way to invest in both funds and stocks with UK ISA? | A lot of ISA's allow both shares and funds as well as gilts, Hargreaves Lansdown comes to mind as does the Alliance Trust. Some penalise (charging wise) securities vs UT (unit trusts) funds but in that case just go for a low cost IT (Investment Trust) ISA and hold individual shares as well as pooled investments in the Big IT's. I think you might have to be an "approved investor" to buy gilts. |
Understanding SEC Filings | There are a whole host of types of filings. Some of them are only relevant to companies that are publicly traded, and other types are general to just registered corps in general. ... and many more: http://reportstream.io/explore/has-form Overall, reading SEC filings is hard, and for some, the explanations of those filings is worth paying for. Source: I am currently trying to build a product that solves this problem. |
Differences in taxes paid for W2 employee vs. 1099 contractor working on sites like ODesk.com? | Yes, you've summarized it well. You may be able to depreciate your computer, expense some software licenses and may be home office if you qualify, but at this scale of earning - it will probably not cover for the loss of the money you need to pay for the additional SE tax (the employer part of the FICA taxes for W2 employees) and benefits (subsidized health insurance, bonuses you get from your employer, insurances, etc). Don't forget the additional expense of business licenses, liability insurances etc. While relatively small amounts and deductible - still money out of your pocket. That said... Good luck earning $96K on ODesk. |
why do I need an emergency fund if I already have investments? | Given that the 6 answers all advocate similar information, let me offer you the alternate scenario - You earn $60K and have an employer offering a 50% match on all deposits. All deposits. (Note, I recently read a Q&A here describing such an offer. If I see it again, I'll link). Let the thought of the above settle in. You think about the fact that $42K isn't a bad salary, and decide to deposit 30%, to gain the full match on your $18K deposit. Now, you budget to live your life, pay your bills, etc, but it's tight. When you accumulate $2000, and a strong want comes up (a toy, a trip, anything, no judgement) you have a tough decision. You think to yourself, "after the match, I am literally saving 45% of my income. I'm on a pace to have the ability to retire in 20 years. Why do I need to save even more?" Your budget has enough discretionary spending that if you have a $2000 'emergency', you charge it and pay it off over the next 6-8 months. Much larger, and you know that your super-funded 401(k) has the ability to tap a loan. Your choice to turn away from the common wisdom has the recommended $20K (about 6 months of your spending) sitting in your 401(k), pretax deposited as $26K, and matched to nearly $40K, growing long term. Note: This is a devil's advocate answer. Had I been the first to answer, it would reflect the above. In my own experience, when I got married, we built up the proper emergency fund. As interest rates fell, we looked at our mortgage balance, and agreed that paying down the loan would enable us to refinance and save enough in mortgage interest that the net effect was as if we were getting 8% on the money. At the same time as we got that new mortgage, the bank offered a HELOC, which I never needed to use. Did we somehow create high risk? Perhaps. Given that my wife and I were both still working, and had similar incomes, it seemed reasonable. |
How to rescue my money from negative interest? | In Switzerland you should have access to many brokers with fair rates, e.g. Interactive Brokers. Going through them you then put the money in various Swiss stocks like Roche, Novartis, Swisscom, Credit Suisse, Logitech, etc. No stock should be more than 10% of the total. Since you pay 0% taxes on investment profits, you really should invest. By going through a broker instead of your bank, you can cash out at any time without losing outrageous fees for the stock commissions (often 2% for banks, around 0% for brokers). If you're employed you can also ask your employer to increase the amount of your salary that goes to the pension (2. Säule), which is not limited like the 7000 you mentioned (3.Säule). |
How to correct a tax return filed electronically and already approved? | Simply file an amended return to correct the mistake. This happens all the time and is a standard procedure that every legitimate tax pro can handle. You can work it out with the tax pro about whose mistake it was and who should pay for the additional service. |
Planning to invest in stock, age 16 | First of all, since you're 16 - you will not invest in anything. You cannot, you're a minor. You cannot enter contracts, and as such - you cannot transact in property. Your bank accounts are all UGMA accounts. I.e.: your guardian (or someone else who's the trustee on the account) will be the one transacting, not you. You can ask them to do trades, but they don't have to. They must make decisions in your best interest, which trades may not necessarily be. If however they decide to make trades, or earn interest, or make any other decision that results in gains - these are your gains, and you will be taxed on them. The way taxes work is that you're taxed on income. You're free to do with it whatever you want, but you're taxed on it. So if you realized gains by selling stocks, and reinvested them - you had income (the gains) which you did with whatever you felt like (reinvested). The taxman doesn't care what you did with the gains, the taxman cares that you had them. For losses it is a bit more complicated, and while you can deduct losses - there are limitations on how much you can deduct, and some losses cannot be deducted at all when realized (like wash sale losses or passive activity losses). When you have stock transactions, you will probably need to file a tax return reporting the transactions and your gains/losses on them. You may end up not paying any tax at all, but since the broker is reporting the transactions - you should too, if only to avoid IRS asking why you didn't. This, again, should be done by your guardian, since you personally cannot legally sign documents. You asked if your gains can affect your parents' taxes. Not exactly - your parents' taxes can affect you. This is called "Kiddie Tax" (unofficially of course). You may want read about it and take it into account when discussing your investments with your guardian/parents. If kiddie tax provisions apply to you - your parents should probably discuss it with their tax adviser. |
What is the benefit of investing in retirement plan versus investing directly in stocks yourself? | In the US, the key to understanding the benefits of retirement accounts is to understand capital gains taxes and how they work. Retirement accounts are designed for making investments throughout your career, then after several decades of contributions, withdrawing that money to pay for your needs when your full-time employment has concluded. Normally when you invest money in a brokerage account, if the value of your investment increases, and you sell in less than a year, those investments are considered short-term gains and taxed as ordinary income. If you hold that same investment for over a year, the same investment is taxed at a lower capital gains rate (depending on which tax bracket you are in during that year, the amount due could be up to 20%, but much lower than your regular income tax rate). When you place your money in a retirement account, you are choosing to either pay the tax due on the income when you put it in the account, or put the money in tax free and pay the tax when you withdraw (these are called tax-deferred accounts). When you have money invested several decades, the raw dollar amount increases greatly, but inflation is also reducing the value of those dollars. Imagine you bought some bonds that payed 4% over 40 years, but inflation was 2% during those same years. When you sell those bonds 40 years later, you will owe capital gains on the entire gain even though half of the gain came from inflation. Retirement accounts allow you to buy and sell according to your investment needs and goals without any consideration about whether the gains are short-term or long-term, and they also allow you to pay taxes just once, either when you put it in, or when you take it out, with no worries about whether you're paying taxes on inflated gains. |
Who can truly afford luxury cars? | Not a direct answer, but... a friend pointed out to me that z proper luxury limo, if loaded with four sales reps going to the same meeting, is cheaper than airfares would be and lets them hold a planning meeting en route. Yeah, most of it is conspicuous consumption. But some of the road yachts have legitimate uses. |
Economics of buy-to-let (investment) flats | but the flat would be occupied all the time. Famous last words. Are you prepared to have a tenant move in, and stop paying rent? In the US, it can take 6 months to get a tenant out of the apartment and little chance of collecting back rent. I don't know how your laws work, but here, they do not favor the landlord. The tiny sub 1% profit you make while funding principal payments is a risky proposition. It seems to me that even normal repairs (heater, appliances, etc) will put you to the negative. On the other hand, if this property has bottomed in terms of price and it rises in value, you may have a nice profit. But if you are just renting it out, it feels like it's too close to call. By the way, if you can go with a 30yr fixed, I'd suggest that. This would get you to a better cash flow sooner. A shorter mortgage simply means more money to principal each month. EDIT - as far as equity goes, at the beginning it seems the equity build up is really from your pocket, definitely so by switching from the 30 to the 15. What is your goal? The assumption I may have made is you wish to be a real estate investor with multiple properties. Doing so means saving up for the next down payment. Given the payoff time even if the property ran a high profit, I imagine you'd want to focus on cash flow, minimize the monthly expense, maximize what you can take each month to save for the next down payment. It's your choice, years from now to have one paid property, or 3 properties each with that 30% down payment, and let time be your friend. |
Why the need for human brokers while there are computers? | There are still human brokers on the floor primarily due to tradition. Their numbers have certainly dwindled, however, and it's reasonable to expect the number of floor traders to decrease even more as electronic trading continues to grow. A key reason for human brokers, however, is due to privacy. Certain private exchanges such as dark pools maintain privacy for high profile clients and institutional investors, and human brokers are needed to execute anonymous deals in these venues. Even in this region, however, technology is supplanting the need for brokers. I don't believe there is any human-broker-free stock exchange, but Nasdaq and other traditionally OTC (over the counter) exchanges are as close as it gets since they never even had trading floors. |
Is it worth it to buy TurboTax Premier over Deluxe if I sold investments in a taxable account? | For tax year 2014, TurboTax Deluxe no longer supports Schedule D.* TurboTax Premier is required if you need to use Schedule D. Alternatively, H&R Block Tax Software Deluxe will handle Schedule D at a fraction of the cost of TurboTax Premier. Update: Beginning with tax year 2015, TurboTax has reversed their disastrous decision and put the functionality back into Deluxe, making it once again an acceptable choice for the OP's situation. See this answer for more details. H&R Block Deluxe still handles this at less cost. * Technically**, TurboTax Deluxe does include Schedule D and other schedules in what they call form mode; however, if you decide to use them, TurboTax Deluxe cripples itself, eliminating many of the features on this chart that you may have gotten used to, such as interview guidance and e-file. ** See https://xkcd.com/1475/ |
Insurance, healthcare provider, apparent abuse, lack of transparency | Just as with any other service provider - vote with your wallet. Do not go back to that doctor's office, and make sure they know why. It's unheard of that a service provider will not disclose the anticipated charges ahead of time. A service provider saying "we won't tell you how much we charge" is a huge red flag, and you shouldn't have been dealing with them to begin with. Now you know. how can we ever get health care costs under control if there's so little transparency? I'm assuming you're in the US. This is not going to change, since there's no profit in not screwing the customers. As long as health-care is a for-profit industry, you should expect everyone in it being busy figuring out a way for money to move from your wallet to their. That's what capitalism is about. |
FHA Reduction Notices From Third-Party Companies - Scam? Or Something To Consider? | This is obviously a spam mail. Your mortgage is a public record, and mortgage brokers and insurance agents were, are and will be soliciting your business, as long as they feel they have a chance of getting it. Nothing that that particular company offers is unique to them, nothing they can offer you cannot be done by anyone else. It is my personal belief that we should not do business with spammers, and that is why I suggest you to remember the company name and never deal with them. However, it is up to you if you want to follow that advice or not. What they're offering is called refinance. Any bank, credit union or mortgage broker does that. The rates are more or less the same everywhere, but the closing fees and application fees is where the small brokers are making their money. Big banks get their money from also servicing the loans, so they're more flexible on fees. All of them can do "streamline" refinance if your mortgage is eligible. None if it isn't. Note that the ones who service your current mortgage might not be the ones who own it, thus "renegotiating the rate" is most likely not an option (FHA backed loans are sold to Fannie and Freddie, the original lenders continue servicing them - but don't own them). Refinancing - is a more likely option, and in this case the lender will not care about your rate on the old mortgage. |
How do share dilution scams make money? | For this to work, those who control the dilution must also control their salaries because the only way for them to be paid off when it's the corporation itself selling is to gain access to the proceeds. When a corporation sells newly issued equity, the corporation itself owns the money. To at least have the appearance of propriety, the scammers must be paid those proceeds. Both actions imply that the board is captured by the scammers. There are many corporations that seem to do this even with persistently large market capitalizations. The key difference between this and pump-and-dump is that its a fraudulent group of investors selling in this case instead of the corporation itself. A detailed simple example Corporations are mandated by law to be little oligarchies; although, "republic" is now becoming more appropriate with all of the new shareholder rights. A corporation is controlled at root by the board of directors who are elected by the shareholders. The board has no direct operational control, as that is left to the "king", the CEO; however, the board does control what everyone wants access to: the money. Board members have all sorts of legal qualitative mandates on how to behave, and they've functioned fairly decently efficiently over the long run, but there are definitely some bad apples. Boards are somewhat intransigent since it's difficult to hold board elections, and usually only specific board members are put up for election by a shareholder vote, so a bad one has the potential to really get stuck in there. Once a bad one is in there, they don't care because they know it will be tough to get them out, so they run roughshod over the company's purse. Only the board can take action on major funding such as the CEO's operating budget, board compensation, financing, investment, etc, some with shareholder approval, some without. The corporation itself owns all of those assets, but the board controls them. In this example, they scheme with most likely the top executive, but a rubber stamp top executive could allow a lower rung to scheme with the board, but the board is always constant until the law is changed. Because there's no honor amongst thieves, the board votes which can require some combination of executive and shareholder approval are taken very close together: sell shares, increase salaries to key executive schemers, increase board compensation. The trusting shareholders believe this is in the best interests of the company at large so go along. So the money flows from existing & new shareholders to the corporation now controlled by a malicious board and then finally to the necessary malicious executive and the vital malicious board. |
Personal finance app where I can mark transactions as “reviewed”? | On mint, you can create your own tags for transactions. So, you could create a tag called "reviewed" and tag each transaction as reviewed once you review it. I've done something similar to this called "reimbursable expense" to tag which purchases I made on behalf of someone else who is going to pay me back. |
Where can I trade FX spot options, other than saxobank.com? | If you have a big pocket there are quite a few.. not sure if they take us clients though. Vcap, Barclays, Icap, Fixi, Fc Stone, Ikon.. Then there are probably a few banks that have x options also but i don't know if a private investor can trade them. A few im not sure if they have fx options or if they are "good": GFTFOREX, Gain capital, XTB, hmslux, Ifx Markets, Alpari, us.etrade.com Betonmarkets might be something if you are interested in "exotic options" maybe? |
Are mutual funds safe from defaults? | The only way for a mutual fund to default is if it inflated the NAV. I.e.: it reports that its investments worth more than they really are. Then, in case of a run on the fund, it may end up defaulting since it won't have the money to redeem shares at the NAV it published. When does it happen? When the fund is mismanaged or is a scam. This happened, for example, to the fund Madoff was managing. This is generally a sign of a Ponzi scheme or embezzlement. How can you ensure the funds you invest in are not affected by this? You'll have to read the fund reports, check the independent auditors' reports and check for clues. Generally, this is the job of the SEC - that's what they do as regulators. But for smaller funds, and private (i.e.: not public) investment companies, SEC may not be posing too much regulations. |
How much does it cost to build a subdivision of houses on a large plot of land? | You can hire a builder to build for you on a lot that you would be happy to live on with utilities already connected. Subdividing a large piece of land gets a little more complicated. What easements exist, and what new easements would need to be created when connecting utilities? Would all of the lots already have street access, or do you need to dedicate some of the land to building a new road in the subdivision? Also, I edited your post because 83,000sqft is 1.9 acres. Building homes on .19 acre parcels (assuming no need for a road to take another 15% of the lot) reduces the value of the homes that you are building. You should run the numbers with 6 houses and see how attractive the math looks. Also, you should look for updated numbers on cost to build. Custom homes are likely closer to $275-$350 (where an architect is involved with drawing the plans). |
How can a school club collect money using credit cards? | Large and small universities have procedures in place regarding the use of the universities name, logo, facilities, and budget. They should have in place guidelines regarding the collection and use of funds from members, and participants. These guidelines are what allows you to have an account with the university. Generally these are not kept in the credit union but are with the university treasurer. I would approach this as if I knew nothing about how to get an officially recognized club or organization started. They should then provide you with all the rules and policies regarding money for student organizations. These policies may also discuss how to collect cash, checks, and credit cards. Some universities also allow the use of special card readers to process the special debit card attached to your university ID. The 10% fee charged by the university is typical. They will need to account for your funds, while maintaining their tax exempt status. If you get fully inline with their policies that will allow you to avoid tax issues. |
I'm thinking of getting a new car … why shouldn't I LEASE one? | I have an eight year old Kia Spectra that my wife is after me to replace -- but it hadn't been giving me any trouble at all. Soon after she started telling me I should replace it soon it started having problems; compressor, tires, and so on. How did she know? Anyway, so now I'm looking -- not ready to buy yet, but I'm looking. The reason I won't be leasing is mileage. I live 45 miles from where I work, so with incidental driving, I put at least 100 miles a day on a car. That's about 26,000 miles a year if I do nothing but drive back and forth to work. On a monthly basis the lease is advertised as being less than most payments, but that is with a mileage limitation. Since most leases I've looked at top out the mileage well below that mark I won't be leasing. I am looking at the new cars that are available now -- but I don't plan on buying until next year, and buying a lightly used car that is only a year to two old. So I'm looking at what I will be buying while I can still find information about them. So yeah, mileage is a strong reason why I'm not considering leasing. |
Why would anyone want to pay off their debts in a way other than “highest interest” first? | There are non-financial costs to having a debt: you need to remember to make monthly payments, perhaps keep track of changing interest rates, be aware of conditions of the debt, archive the related paperwork. Life is simpler with fewer debts, and that has value. Of course, if the difference in interest rate is large, then that is more important and the higher interest should be paid off first. But if the difference is only half a percentage point or so, you may decide that having fewer debts is in itself worth the bit of extra interest you pay. |
To pay off a student loan, should I save up a lump sum payoff payment or pay extra each month? | As someone in the very same position as you here is what I suggest: Have $1,000 for each possible large expense you currently have. For example, house, car, pregnant wife, etc. As someone who only has a car (living at home still) I only have $1,000 in my eFund (emergency fund). The ABSOLUTE rest of my money goes to paying off the loans as soon as possible. I mean ever single dollar. There is no point for investing unless you have a really good return on investment. I am not too sure how common returns of 6.8% are, but that seems above average. If in fact you're just stashing it in a bank account at ~1%, you're doing it wrong. Getting out of debt is not only just about the financial benefits but the emotional benefits too. It feels really nice to not owe anybody anything. Good luck man! P.S. Try using a tracker like ReadytoZero to show how much you're losing a day by remaining in debt. This will better help you understand if your investments are making you money or losing your money. |
Investment Options for 14-year old? | When I was about your age I had the same kind of situation. I asked my bank about possible options and one of them was a guaranteed reserve. You lock the money away for a certain amount of years and you get a guaranteed amount of interest on it. I don't know what the current rate is at the moment so you'll have to ask your bank. The good thing about premium bonds is that you can access the money quickly at any time so you could always get premium bonds until you decide what to do with it. If I were you though, I'd make sure my parents didn't have control over my money. Whatever option you choose, keep your money in your name. |
Is gold really an investment or just a hedge against inflation? | Another answer to this question occurred to me as I started learning more about historical uses for gold etc. Perhaps it's a crackpot idea, but I'm going to float it anyway to see what you folks think. Investing in Gold is an indirect investment in the Economy and GDP of the nation of India. To that extent is it only a hedge against inflation, so long as the indian economy grows at a more rapid rate than your local inflation rate. Fact, India currently consumes more than 1/3 of gold production, predominantly in the form of Jewelry. And their demand has been growing rapidly, up 69% just between 2009 and 2010 alone. I can't find too many historial consumption numbers for India, but when you look at past articles on this subject, you see phrases like 'one forth' and '20%' being used only a few years go to describe India's consumption levels. Fact, India has virtually no domestic sources of gold. India’s handful of gold mines produce about 2.5 tonnes of the metal each year, a fraction of the country’s annual consumption of about 800 tonnes. Fact. Indian Culture places high value on gold as a visible demonstration of wealth. Particularly in situations such In Indian weddings where the bride brings in gold to show her family's status and wealth and it forms part of the dowry given to bride. It is believed that a bride wearing 24k gold on their wedding to bring luck and happiness throughout the married life. Fact, the recent trends in outsourcing, Indian citizens working abroad sending money home, etc have all lead to a influx of foreign cash to the Indian economy and explosive GDP growth. See the following chart and compare the period of 2000-current with a chart showing the price of gold in other answer here. Notice how the curves parallel each other to a large degree Potentially unfounded conclusion drawn from above numbers. The rapid growth of the Indian economy, coupled with a rich cultural tradition that values gold as a symbol of wealth, along with a sudden rise in 'wealthy' people due to the economy and influx of foreign cash, has resulted in skyrocketing demand for gold from India, and this large 'consumption' demand is the most likely explanation for the sudden rise in the price of gold over the last several years. Investors then jump on the 'rising price bandwagon' as especially does anyone that can make a profit from selling gold to those seeking to get on said bandwagon. As such, as long as indian cultural tradition remains unchanged, and their economy remains strong, the resulting increasing demand for gold will sustain current and perhaps increased prices. Should there be any sudden collapse in the Indian GDP, gold will likely tumble in parallel. disclaimer: not an expert, just observations based off the data I've seen, there may be other parts to the picture of 'gold demand' that I've not considered. |
Can a Covered Call be called away before the expiration date? | They can sell a lower price call if they expect the stock to plummet in the near term but they are bullish on the longer term. What they are looking to do is collect the call premium and hope it expires worthless. And then again 'hope' that the stock will ultimately turn around. So yes, a lot of hoping. But can you explain what you mean by 'my brokerage gives premiums for prices lower than the current price'? Do you mean you pay less in commissions for ITM calls? |
Investing thought experiment | Yes, if your assumptions are correct then your conclusions are correct. But your assumptions are never correct, and so this thought experiment doesn't tell us anything useful. |
How can online trading platforms be trustworthly? | Most investors vote with their wallets. I expect ZERO glitches from a trading platform. If someone was actually causing trades to fail maliciously, their reputation would immediately suffer and their business would dry up over night. You can't just play dumb and not respond to a button click. I can watch and replay the traffic I'm sending out to their server and see if they are responding to verify this. If their system goes down and has no redundancy, that is their fault and opens them to lawsuits. No trading platform could withstand scrutiny from its users if it was dishonest in the scenario you imagine. |
Figuring flood insurance into financing cost | Self-insure a $250K+ house that's deemed to be in a flood zone? Wake up, have coffee. If you don't change your mind, have another cup. |
What factors of a stock help determine its potential | Knowing the answer to this question is generally not as useful as it may seem. The stock's current price is the consensus of thousands of people who are looking at the many relevant factors (dividend rate, growth prospects, volatility, risk, industry, etc.) that determine its value. A stock's price is the market's valuation of the cash flows it entitles you to in the future. Researching a stock's value means trying to figure out if there is something relevant to these cash flows that the market doesn't know about or has misjudged. Pretty much anything we can list for you here that will affect a stock's price is something the market knows about, so it's not likely to help you know if something is mispriced. Therefore it's not useful to you. If you are not a true expert on how important the relevant factors are and how the market is reacting to them currently (and often even if you are), then you are essentially guessing. How likely are you to catch something that the thousands of other investors have missed and how likely are you to miss something that other investors have understood? I don't view gambling as inherently evil, but you should be clear and honest with yourself about what you are doing if you are trying to outperform the market. As people become knowledgeable about and experienced with finance, they try less and less to be the one to find an undervalued stock in their personal portfolio. Instead they seek to hold a fully diversified portfolio with low transactions costs and build wealth in the long term without wasting time and money on the guessing game. My suggestion for you is to transition as quickly as you can to behave like someone who knows a lot about finance. |
Does a US LLC owned by a non-resident alien have to pay US taxes if it operates exclusively online? | As you said, in the US LLC is (usually, unless you elect otherwise) not a separate tax entity. As such, the question "Does a US LLC owned by a non-resident alien have to pay US taxes" has no meaning. A US LLC, regardless of who owns it, doesn't pay US income taxes. States are different. Some States do tax LLCs (for example, California), so if you intend to operate in such a State - you need to verify that the extra tax the LLC would pay on top of your personal tax is worth it for you. As I mentioned in the comment, you need to check your decision making very carefully. LLC you create in the US may or may not be recognized as a separate legal/tax entity in your home country. So while you neither gain nor lose anything in the US (since the LLC is transparent tax wise), you may get hit by extra taxes at home if they see the LLC as a non-transparent corporate entity. Also, keep in mind that the liability protection by the LLC usually doesn't cover your own misdeeds. So if you sell products of your own work, the LLC may end up being completely worthless and will only add complexity to your business. I suggest you check all these with a reputable attorney. Not one whose business is to set up LLCs, these are going to tell you anything you want to hear as long as you hire them to do their thing. Talk to one who will not benefit from your decision either way and can provide an unbiased advice. |
What's the best application, software or tool that can be used to track time? | A free solution that I've been using is Task Coach. It has tasks, subtasks, categories, and all the stuff you would expect from a time tracking program. It also counts each distinct period spent on a task as a separate "effort" that you can add comments, for example to remind you what that chunk of time was spent on. |
What financial data are analysed (and how) to come up with a stock recommendation? | The short answer: it depends. The long answer.. Off the top of my head, there are quite a number of factors that an analyst may look at when analyzing a stock, to come up with a recommendation. Some example factors to look at include: The list goes on. Quite literally, any and all factors are fair game for a recommendation. So, the question isn't really what analysts do with financial data, it is what do analysts do with financial data that meets your investment needs? As an example, if you have two analysts, one who is focused on growth stocks, and one who is focused on dividend growth, they may have completely different views on a company. If both analysts were to analyze Apple (AAPL) 5 years ago, the dividend analyst would likely say SELL or at the most HOLD, because back then Apple did not have a dividend. However, an analyst focused on growth would likely have said BUY, because Apple appeared to be on a clear upward trend in terms of growth. Likewise, if you have analysts who are focused on shorting stocks, and ones who are focused on deep value investing, the sell analyst may be selling SELL because they are confident the stock will go down in price, so you can make money on the short position. Conversely, the deep value investor may be saying BUY, because they believe that based on the companies strong balance sheet, and recent shake-ups in management the stock will eventually turn around. Two completely different views for the same company: the analyst focused on shorting is looking to make money by capitalizing on falling share price, while the analyst focused on deep value is looking for unloved companies in a tailspin whom s/he believe will turn around, the thesis being that if you dollar-cost-average as the price drops, when it corrects, you'll reap the rewards. That all said, to answer the question about what analysts look for: So really, you should be looking for analysts who align with your investment style, and use those recommendations as a starting point for your own purchases. Personally, I am a dividend investor, so I have passed many BUY recommendations from analysts and my former broker because those were based on growth stories. That does not mean that the analysts, my former broker, or myself, are wrong. But we were all incorrect given the context of how I invest, and what they recommend. |
Stock market order execution | When you are placing an order with an online broker you should already know what exchange or exchanges that stock trades on. For example if you look up under Yahoo Finance: Notice how News Corp is traded both on the ASX and the Nasdaq. The difference is the shares traded on the ASX have the extension .AX, that is how you know the difference between them. When you are putting orders in with your online broker you will need to select the exchange you wish your order to go to (if your broker allows trading on multiple exchanges). So you should always know which exchange your order goes to. |
Online transaction - Money taken out late | Debit Cards have a certain processing delay, "lag time", before the transaction from the vendor completes with your bank. In the US it's typically 3 business days but I have seen even a 15 day lag from Panera Bread. I guess in the UK, payment processors have similar processing delays. A business is not obliged to run its payment processing in realtime, as that's very expensive. Whatever be the lag time, your bank is supposed to cover the payment you promised through your card. Now if you don't have agreements in place (for example, overdraft) with your bank, they will likely have to turn down payments that exceed your available balance. Here is the raw deal: In the end, the responsibility to ensure that your available balance is enough is upon you (and whether you have agreements in place to handle such situations) So what happened is very much legal, a business is not obliged to run its payment processing in realtime and no ethics are at stake. To ensure such things do not happen to me, I used to use a sub-account from which my debit card used to get paid. I have since moved to credit cards as the hassle of not overdrawing was too much (and overdraft fees from banks in the US are disastrous, especially for people who actually need such a facility) |
What is the difference between equity and assets? | Accounts track value: at any given time, a given account will have a given value. The type of account indicates what the value represents. Roughly: On a balance sheet (a listing of accounts and their values at a given point in time), there is typically only one equity account, representing net worth, I don't know much about GNUCash, though. Income and expenses accounts do not go on the balance sheet, but to find out more, either someone else or the GNUCash manual will have to describe how they work in detail. Equity is more similar to a liability than to assets. The equation Assets = Equity + Liabilities should always hold; you can think of assets as being "what my stuff is worth" and equity and liabilities together as being "who owns it." The part other people own is liability, and the part you own is equity. See balance sheet, accounting equation, and double-entry bookkeeping for more information. (A corporate balance sheet might actually have more than one equity entry. The purpose of the breakdown is to show how much of their net worth came from investors and how much was earned. That's only relevant if you're trying to assess how a company has performed to date; it's not important for a family's finances.) |
How do I find the value of British Energy Nuclear Power Notes? | This BBC article says that nuclear power notes came about when the French energy company EDF purchased British Energy in 2008: The note changes in value with wholesale energy prices and power output levels from British Energy's existing nuclear stations. EDF Energy's website describes these notes under the section titled "Nuclear Power Notes": When EDF acquired British Energy in January 2009, Nuclear Power Notes were issued to British Energy shareholders who chose to take them in lieu of 74 pence of cash per British Energy share held. The Nuclear Power Notes are ten year financial instruments (2009 – 2019) which give ex British Energy shareholders a continuing interest in the “EDF Energy Nuclear Generation Fleet”. They are traded on the ICAP Securities & Derivatives Exchange (formerly known as the PLUS Quoted exchange). Each year a pre-defined calculation is performed to determine whether any cash will be paid to Nuclear Power Note holders. The calculation is dependent on the nuclear output of the EDF Energy Nuclear Generation Fleet (“Eligible Nuclear Output”) and market power prices (“Power Prices”). This calculation may or may not result in a cash payment each year to Nuclear Power Note holders. The MWh/TWh are figures you see are measures of watt-hours, i.e. energy output. The value of nuclear power notes is tied to this output. Looking at the most recent statement (June 2013), you can see a line that looks like this: Month Ahead Price in respect of July 2013: 47.46 GBP/MWh which is an energy spot price for the output of the nuclear plants. I'm not entirely sure of the relationship between this and the payment to shareholders, but if you look at the 2012 Yearly Payment Calculation Notice on the same page, you'll see this in the first section: (a) the Yearly Payment for the period 1 January 2012 to 31 December 2012, (the Relevant Year ) payable in respect of each CVR on 31 January 2013 shall be zero; The payments were also zero for 2010 and 2011. The 2009 calculation notice, however, states that (a) the Yearly Payment for the period 1 January 2009 to 31 December 2009, (the Relevant Year) payable in respect of each CVR on 31 January 2010 shall be 11.497164 pence stated to 6 decimal places I presume that payment would have appeared in whatever account holds these notes, e.g. your brokerage account. Technically, the financial statements above refer to a Contingent Value Rights (CVR) instrument, which is a derivative linked to the Nuclear Power Notes. This site sums it up better than I can: The British Energy CVRs were created by the issue of nuclear power notes (NPNs) to the target’s shareholders who opted to take up this alternative. The NPNs were issued by Barclays Bank plc and were linked to guaranteed contingent value rights instruments that were issued to Barclays by EDF’s acquisition vehicle (Lake Acquisitions) and which were ultimately guaranteed by EDF Energy plc (Lake CVRs). Barclays is required to make yearly payments to noteholders for 10 years, the amount of which is limited to the corresponding amount paid by Lake Acquisitions to Barclays for the Lake CVRs. Basically, there is a chain of payments through these derivatives that eventually links back to nuclear energy output. |
Ex-dividend date and time zones | Ex-Date is a function of the exchange, as well as the dividend. Consider Deutsche Bank AG, DB on the NYSE, DKR on Xetra. For a given dividend, each exchange sets the ex-date for trades on that exchange. (See http://www.sec.gov/answers/dividen.htm for a description of how it works in the US; other exchanges/countries are similar.) This ex-date is normally based on the dividends record date, which is when you must be on the company's books as a shareholder to receive the dividend, and based on when trades for an exchange are settled. The ex-date is the first date for which trades on that date will not settle until after the record date. This means that the ex-date can be different for different exchanges. If you sell your shares on an exchange before the ex-date for that exchange, you will not get the dividend. If you sell your shares on or after the ex-date for the exchange, you do not get the dividend. So it depends on the time zone of the exchange. Most stock exchanges trade T+3, but this can still come into play if there are bank holidays in different countries at different times. |
Bed and Breakfast, Same Day Capital Gains UK | The 'same day rule' in the UK is a rule for matching purposes only. It says that sales on any day are matched firstly with purchases made on the same day for the purposes of ascertaining any gain/loss. Hence the phrase 'bed-and-breakfast' ('b&b') when you wish to crystalise a gain (that is within the exempt amount) and re-establish a purchase price at a higher level. You do the sale on one day, just before the market closes, which gets matched with your original purchase, and then you buy the shares back the next day, just after the market opens. This is standard tax-planning. Whenever you have a paper gain, and you wish to lock that gain out of being taxed, you do a bed-and-breakfast transaction, the idea being to use up your annual exemption each and every year. Of course, if your dealing costs are high, then they may outweigh any tax saved, and so it would be pointless. For the purpose of an example, let's assume that the UK tax year is the same as the calendar year. Scenario 1. Suppose I bought some shares in 2016, for a total price of Stg.50,000. Suppose by the end of 2016, the holding is worth Stg.54,000, resulting in a paper gain of Stg.4,000. Question. Should I do a b&b transaction to make use of my Stg.11,100 annual exemption ? Answer. Well, with transaction costs at 1.5% for a round-trip trade, suppose, and stamp duty on the purchase of 0.5%, your total costs for a b&b will be Stg1,080, and your tax saved (upon some future sale date) assuming you are a 20% tax-payer is 20%x(4,000-1,080) = Stg584 (the transaction costs are deductible, we assume). This does not make sense. Scenario 2. The same as scenario 1., but the shares are worth Stg60,000 by end-2016. Answer. The total transaction costs are 2%x60,000 = 1,200 and so the taxable gain of 10,000-1,200 = 8,800 would result in a tax bill of 20%x8,800 = 1,760 and so the transaction costs are lower than the tax to be saved (a strict analysis would take into account only the present value of the tax to be saved), it makes sense to crystalise the gain. We sell some day before the tax year-end, and re-invest the very next day. Scenario 3. The same as scenario 1., but the shares are worth Stg70,000 by end-2016. Answer. The gain of 20,000 less costs would result in a tax bill for 1,500 (this is: 20%x(20,000 - 2%x70,000 - 11,100) ). This tax bill will be on top of the dealing costs of 1,400. But the gain is in excess of the annual exemption. The strategy is to sell just enough of the holding to crystallise a taxable gain of just 11,100. The fraction, f%, is given by: f%x(70,000-50,000) - 2%xf%x70,000 = 11,100 ... which simplifies to: f% = 11,100/18,600 = 59.68%. The tax saved is 20%x11,100 = 2,220, versus costs of 2%x59.58%x70,000 = 835.52. This strategy of partial b&b is adopted because it never makes sense to pay tax early ! End. |
Am I liable for an auto accident if I'm a cosigner but not on the title, registration, or insurance policy? | It might be possible to sue you successfully if someone brought evidence that your brother was absolutely totally unsuitable to drive a car because of some character flaw, and without your financial help he wouldn't have been able to afford a car. So helping a brother to buy a car, if that brother is a drinking alcoholic, or has only a faked driver's license and you know it, that could get you into trouble. A not unsimilar situation: A rental car company could probably be sued successfully if they rented a car to someone who they knew (or maybe should have known) was disqualified from driving and that person caused an accident. |
What is the equation for an inflation adjusted annuity held in perpetuity? | Let P denote the amount of the investment, R the rate of return and I the rate of inflation. For simplicity, assume that the payment p is made annually right after the return has been earned. Thus, at the end if the year, the investment P has increased to P*(1+R) and p is returned as the annuity payment. If I = 0, the entire return can be paid out as the payment, and thus p = P*R. That is, at the end of the year, when the dust settles after the return P*R has been collected and paid out as the annuity payment, P is again available at the beginning of the next year to earn return at rate R. We have P*(1+R) - p = P If I > 0, then at the end of the year, after the dust settles, we cannot afford to have only P available as the investment for next year. Next year's payment must be p*(1+I) and so we need a larger investment since the rate of return is fixed. How much larger? Well, if the investment at the beginning of next year is P*(1+I), it will earn exactly enough additional money to pay out the increased payment for next year, and have enough left over to help towards future increases in payments. (Note that we are assuming that R > I. If R < I, a perpetuity cannot be created.) Thus, suppose that we choose p such that P*(1+R) - p = P*(1+I) Multiplying this equation by (1+I), we have [P(1+I)]*(1+R) - [p*(1+I)] = P*(1+I)^2 In words, at the start of next year, the investment is P*(1+I) and the return less the increased payout of p*(1+I) leaves an investment of P*(1+I)^2 for the following year. Each year, the payment and the amount to be invested for the following year increase by a factor of (1+I). Solving P*(1+R) - p = P*(1+I) for p, we get p = P*(R-I) as the initial perpetuity payment and the payment increases by a factor (1+I) each year. The initial investment is P and it also increases by a factor of (1+I) each year. In later years, the investment is P*(1+I)^n at the start of the year, the payment is p*(1+I)^n and the amount invested for the next year is P*(1+I)^{n+1}. This is the same result as obtained by the OP but written in terms that I can understand, that is, without the financial jargon about discount rates, gradients, PV, FV and the like. |
Algorithmic trading in linux using python | In Japan, there's a competition well-lasting since 2004 or so where you can run your own software agent in a virtual market. Market data is updated from the real world everyday. And if your agent proves good, the organizer puts it into the real market. The language is unfortunately limited to Java only to my knowledge. OS is not limited since your agent is supposed to run on the organizer's environment. English might not be well supported on their web site... |
Some stock's prices don't fluctuate widely - Is it an advantages? | Oracle specifically is paying a dividend with a current yield of about 1.4% annually and has appreciated nearly 50% over the last 5 years. Granted, the past doesn't guarantee the future but the company has paid a pretty steady dividend since 2009. If you're buying as part of an employee program you would presumably be holding the shares for a long time and the daily and even monthly movements aren't terribly relevant to a long term holding period. Additionally, you may be able to buy the shares at a discount to the market price as part of your employee program. You probably also won't pay any transaction fee. |
Should I put more money down on one property and pay it off sooner or hold on to the cash? | I'd suggest taking all the money you have saved up and putting in a mutual fund and hold off on buying a rental property until you can buy it outright. I know it seems like this will take forever, but it has a HUGE advantage: I know it seems like it will take forever to save up the money to buy a property for cash, but in the long run, its the best option by far. |
Are lottery tickets ever a wise investment provided the jackpot is large enough? | A lot of these answers are really weak. The expected value is pretty much the answer. You have to also though, especially as many many millions of tickets are purchased--make part of the valuation the odds of the jackpot being split x ways. So about 1 in 290--> the jackpot needs to be a take-home pot of $580 million for the $2 ticket. Assume the average # of winners is about 1.5 so half the time you're going to split the pot, bringing the valuation needed for the same jackpot to be $870 million. It's actually somewhat not common to have split jackpots because the odds are very bad + many people pick 'favourite numbers'. |
If the U.S. defaults on its debt, what will happen to my bank money? | If you are actually referring to all the political rhetoric and posturing over the debt ceiling issue. That's a long ways from the US actually defaulting on paying debts. A lot of government offices might shut down, but I expect anyone holding US debt to be paid off. (they have the printing presses after all) If that's what you are referring to, based on the LAST time that the governement had to shut down because they didn't raise the debt ceiling, it won't be a big deal. Last time, no debt was defaulted on, a bunch of the less essential government offices shut down for a few days, and the stock market did a collective 'meh' over the whole thing. It was basically a non event. I've no reason to expect it will be different this time. (btw, where were all these republican budget cutters hiding when 10 years ago they started with a nearly balanced budget, and ended up blowing up the national debt by about 80% in 8 years time? (from roughly $6B to $11B) I wish they'd been screaming about the debt as much then as they are now. Not that there isn't ample blame to go around, and both sides have not been spending in ways that make a drunken sailor look like the paragon of a fiscal conservative, but to hear nearly any of them tell it, their party had nothing to do with taking us from a balanced budget to the highest burn rate ever while they were in control (with a giant financial crisis through in as pure 'bonus') |
What is the Blue Line in these stock Charts? | The curved lines (on my screen orange, yellow and pink) are simple moving averages. The fuchsia and blue straight lines are automatically generated trend lines. Those lines are attempting to show how a stock is trending by showing potential bounce points and are commonly used in technical analysis (TA). |
Buying a multi-family home to rent part and live in the rest | Disadvantage is that tenant could sue you for something, and in an unfavorable judgement they would have access to your house as property to possess. You could lose the house. Even if you make an LLC to hold the house, they'll either sue you or the LLC and either way you could lose the house. This might be why the landlord is moving to Florida where their house cannot be possessed in a judgement because of the state's strong homestead exemption ;) |
What reason would a person have to use checks in stores? | Rational reason. They like this method of paying. There is a delay between writing the check and having the money removed from the account. Their checkbook makes a carbon copy of the check, so they can update their balance easier. They can leave the store and update their checkbook register, or the spreadsheet or their Quicken or budget application data. They don't have to try and remember the amount, store name or date. |
Clarify Microsoft's explanation of MIRR | The value does change from 12.61% to 13.48%. The difference between re-investing cashflows at 14% vs 12% is not big enough to change the rounded value. Edit: The initial cashflow is discounted at t0, meaning it's already equal to its present value and the finance rate doesn't have an effect. It does impact future outgoing cashflows, as you've noted. |
In the USA, does the income tax rate on my wages increase with the amount of money in my bank account? | I know that if you make more, you pay more, but do those who have more, not make more, pay higher income tax? In general, no. In most locales, income tax is based on income, not on wealth. I am retired. I have little income but a fair amount of wealth. I play very little income tax. (But I do pay other kinds of taxes.) Here's a scenario. 2 people of average wealth with similar situations have the same job with equal pay. After 5 years, their situations haven't changed and they still earn equal pay, but now one has $40,000 in their account and the other $9,000. Does one now pay higher income tax because he has more in his account or does he pay the same because he makes the same? In most locales, you pay income tax on everything that is counted as income. Your salary is income. In some cases, earned interest is income. But aside from the earned interest from your bank accounts, neither the $40,000 nor the $9,000 is income. Your huge mansion isn't income. Your expensive car isn't income. The huge amount of land you own isn't income. The pricey artwork on your walls isn't income. You don't pay income tax on any of these, but your local may impose other taxes on these (such as property tax, etc.) [Note: consult the tax laws of your specific locale if you want to know details.] |
Negative properties of continuously compounded returns | You cannot use continuous compounding for returns less than or equal to 100% because a natural logarithm can only be taken for a positive amount. This answer includes the accurate way to ascertain r, for which many people use an approximation. For example, using -20% monthly return for 12 months:- -0.2 -0.223144 0.0687195 Checking: 0.0687195 True Now trying -100% monthly return:- -1. Indeterminate Why? Because a natural logarithm can only be taken for a positive amount. So the latter calculation can not be done using (logarithmic) continuous compounding. Of course, the calculation can still be done using regular compounding. For -100% the results go to zero in the first month, but -150% produces a more interesting result: -1.5 -11920.9 |
Medical Bill Consolidation | There are definitely ways to retroactively consolidate medical bills -- there's an entire industry of companies offering debt consolidation (many of which are scummy/predatory, be careful! See https://www.consumer.ftc.gov/articles/0150-coping-debt and some decent articles at http://blog.readyforzero.com/are-there-legitimate-debt-consolidation-loans and http://blog.readyforzero.com/how-to-find-a-reputable-debt-consolidation-company). In general, what you are looking to do is take out a loan, possibly at a better interest rate than whatever you are being charged currently, and pay off the medical bills. If you are not paying interest on the medical bills and are just being allowed to spread out the payments, you are already golden and should just put up with the ups and downs. If you have any equity in a home, take out a home equity loan or line of credit, pay off your medical bills. Rates are still great right now. Even if you have no home equity to tap, if you have a steady job you might be able to get a nice small loan from a local bank or peer-to-peer lending site. Do your homework and only work with reputable companies, especially if doing things online. |
Stocks: do Good Till Cancelled orders get executed during after hours? | You typically need to specify that you want the GTC order to be working during the Extended hours session. I trade on TD Ameritrade's Thinkorswim platform, and you can select DAY, GTC, EXT or GTC_EXT. So in your case, you would select GTC_EXT. |
Why is the total 401(k) contribution limit (employee + employer) so high? | Some 401k plans allow you to make "supplemental post-tax contributions". basically, once you hit the pre-tax contribution limit (17.5k$ in 2014), you are then allowed to contribute funds on a post-tax basis. Because of this timing, they are sometimes called "spillover" contributions. Usually, this option is advertised as a way of continuing to get company match even if you accidentally hit the pre-tax limit. But if you actually pay attention to your finances, it is instead a handy way to put away additional tax-advantaged money. That said, you would only want to use this option if you already maxed out your pre-tax and Roth options since you don't get the traditional tax break on contributions or the Roth tax break on the earnings. However, when you leave the company, you can transfer the post-tax money directly into a Roth IRA when you transfer the pre-tax money, match, and earnings into a traditional IRA. |
Can I deduct taxes for home office as a freelance computer software developer? | You can do it, provided that the bedroom is ONLY set up as an office. That is, no bed, TV or other stuff. You can stretch it a bit, considering a TV is also a monitor, a couch is also a visitor couch. Whatever route you choose you have to be able to justify what everything is doing there in case of a visit from the authorities. I am (was) in exactly the same situation for two years and had no problem deducting ~30% of the housing costs. That is, the usage of bathroom and utilities is calculated as proportional to the surface area given to the office. It might make more sense to move into a larger apartment just so you can have one designated office room. Edit: the above applies in Germany, YMMV, IANAL, etc. EU is pretty consistent though in regulations and as far as I know the above aplies in most EU countries. |
Mortgage or not? | In addition to the other answers, I think you would also need to account for the increased utility and maintenance costs on the more expensive house. Typically it is recommended to budget 1% to 4% the cost of the home per year for routine maintenance. While it likely won't cost that much every year, you will have those expensive items come up (e.g. roof, HVAC) that come up periodically. The larger house will also cost more to heat/cool. Depending on where you live could also have increased property taxes. |
Do I pay a zero % loan before another to clear both loans faster? | Wow, you guys get really cheap finance. here a mortage is 5.5 - 9% and car loans about 15 - 20%. Anyway back to the question. The rule is reduce the largest interest rate first ("the most expensive money"). For 0% loans, you should try to never pay it off, it's literally "free money" so just pay only the absolute minimum on 0% loans. Pass it to your estate, and try to get your kids to do the same. In fact if you have 11,000 and a $20,000 @ 0% loan and you have the option, you're better to put the 11,000 into a safe investment system that returns > 0% and just use the interest to pay off the $20k. The method of paying off the numerically smallest debt first, called "snowballing", is generally aimed at the general public, and for when you can't make much progress wekk to week. Thus it is best to get the lowest hanging fruit that shows progress, than to try and have years worth of hard discipline just to make a tiny progress. It's called snowballing, because after paying off that first debt, you keep your lifestyle the same and put the freed up money on as extra payments to the next target. Generally this is only worth while if (1) you have poor discipline, (2) the interest gap isn't too disparate (eg 5% and 25%, it is far better to pay off the 25%, (3) you don't go out and immediately renew the lower debt. Also as mentioned, snowballing is aimed at small regular payments. You can do it with a lump sum, but honestly for a lump sum you can get better return taking it off the most expensive interest rate first (as the discipline issue doesn't apply). Another consideration is put it off the most renewable finance. Paying off your car... so your car's paid off. If you have an emergency, redrawing on that asset means a new loan. But if you put it off the house (conditional on interest rates not being to dissimilar) it means you can often redraw some or all of the money if you have an emergency. This can often be better than paying down the car, and then having to pay application fees to get a new unsecured loan. Many modern banks actually use "mortgage offsetting" which allows them to do this - you can keep your lump sum in a standard (or even fixed term) and the value of it is deducted "as if" you'd paid it off your mortgage. So you get the benefit without the commitment. The bank is contracted for the length of the mortgage to a third party financier, so they really don't want you to change your end of the arrangement. And there is the hope you might spend it to ;) giving them a few more dollars. But this can be very helpful arragement, especially if you're financing stuff, because it keeps the mortgage costs down, but makes you look liquid for your investment borrowing. |
How can I trade in U.S stock exchange living in India by choosing the broker in U.S? | i have been trading with dollarbird Trading firm for past 1 year there is absolutly no problem everything is fine you can google them to find anything about them.they have provided me with LASER trading platform which requires a bit of training as in to know the software but i can say one thing trading in US Equity market exp. is very diffrent from indian market they are very mature market and highly liqd and have good volatality to trade best equity market to trade with great trading platform you should have a exp. to trade on US equity it is diffrent |
Credit card issued against my express refusal; What action can I take? | As far as the banker himself goes, it's a customer service issue. WF is not going to tell you about their internal discipline (or oughtn't, anyway), other than potentially to confirm that the banker does or does not still work there; that's the closest they should get to telling you about it. I'm a (very) former retail manager, and that's absolutely the most I'd ever do in a case like this; and trust me, even with good customer service reps, you get requests to fire someone a lot, sometimes valid, sometimes not. You did the correct thing from your end: you brought the issue to their attention. Despite the quota, it's (hopefully) not permitted to sign people up without their permission (since that's illegal!), and I can say that in my retail experience, with these promotions with great incentive to cheat in this manner, one of the main things our loss prevention department did was to monitor data to see if people were illicitly signing people up for cards or otherwise cheating the system. That could be a very bad thing from a customer service point of view and from a legal point of view. What you should have done (or possibly did, but it's not clear in your post) is, after you reported the issue, asked for a re-contact on a particular date in the future - not "after you've looked into it", but "Next friday I would like to get a call from you to discuss the resolution." Again, they're not going to tell you the discipline, but they should tell you at least that they've investigated it and will make sure it doesn't happen again, or similar. It's possible they will want more information from you at this point, and this is a useful way to make sure that request doesn't fall off of their plate. They should be able to, at least, tell you if there was a perceived issue on their end - it might be something meaningless to you, like "He thought you said to sign up", or something more descriptive, like "He pushed the button to send you a notice, but our computer system screwed that up and made it an application". You never know these days how easy it is to screw these things up. Now, they certainly should have fixed the issues on your end. Hopefully they did whatever you needed them to do banking-wise, or else you withdrew your money and went somewhere else. If not, follow up with that supervisor's supervisor, or go up a level or two to a regional director or equivalent. They may not be able to cancel the card for you, but the other banking-related things they certainly should fix. The card you probably just have to cancel and be done with. As far as the misuse of personal information, one thing I'd consider doing is placing a freeze on your credit report. Then this could never have happened - you would have to lift it to have your report pulled to be given the card. This is not free, though, so consider this before doing this. |
What to do with your savings in Japan | As an alternative to investing you'll find at least some banks eg. Rakuten that will give you preferential interest rates(still 0.1% though) just for opening a free brokering account. As this is still your individual savings account your money is as safe as it was before opening your account. I certainly wouldn't buy to hold any stock or fund that is linked to the Nikkei right now. Income stocks outside of the 225 may be safer, but you'd still need to buy enough of them that their individual results don't affect your bottom line. |
Rental Application Fees | Slightly abbreviated version of the guidance from NOLO.com California state law limits credit check or application screening fees landlords can charge prospective tenants and specifies what landlords must do when accepting these types of fees. (Cal. Civ. Code § 1950.6.) Here are key provisions: I am not a lawyer, but it would seem you have two options if you catch a landlord violating these rules. An idea to avoid the whole problem in the first place: Get a copy of your credit report yourself and take a copy with you to meet the landlord. If they want an application fee, ask why they need it making it clear you know the above law. If they say for a credit report offer to give them a copy in lieu of the fee. |
How to spend more? (AKA, how to avoid being a miser) | People who choose "good enough" (satisficers) tend to be happier than people who choose "the best" (maximizers), see link. So decide you want to be a satisficer for most decisions, and then work at it: deliberately limit the amount of time you spend on a small decision, and celebrate a non-optimal decision. Decide to be good to yourself, and say it out loud. Practice the skill. |
Why ever use a market order? | What you are saying is a very valid concern. After the flash crash many institutions in the US replaced "true market orders" (where tag 40=1 and has no price) with deep in the money limit orders under the hood, after the CFTC-SEC joint advisory commission raised concerns about the use of market orders in the case of large HFT traders, and concerns on the lack of liquidity that caused market orders that found no limit orders to execute on the other side of the trade, driving the prices of blue chip stocks into the pennies. We also applaud the CFTC requesting comment regarding whether it is appropriate to restrict large order execution design that results in disruptive trading. In particular, we believe there are questions whether it is ever appropriate to permit large order algorithms that employ unlimited use of market orders or that permit executions at prices which are a dramatic percentage below the present market price without a pause for human review So although you still see a market order on the front end, it is transformed to a very aggressive limit in the back end. However, doing this change manually, by selling at price 0 or buying at 9999 may backfire since it may trigger fat finger checks and prevent your order from reaching the market. For example BATS Exchange rejects orders that are priced too aggressively and don't comply with the range of valid prices. If you want your trade to execute right now and you are willing to take slippage in order to get fast execution, sending a market order is still the best alternative. |
What happens when the bid and ask are the same? | This question is impossible answer for all markets but there are 2 more possibilities in my experience: |
How does the spread on an orderbook affect shorting? | A bid is an offer to buy something on an order book, so for example you may post an offer to buy one share, at $5. An ask is an offer to sell something on an order book, at a set price. For example you may post an offer to sell shares at $6. A trade happens when there are bids/asks that overlap each other, or are at the same price, so there is always a spread of at least one of the smallest currency unit the exchange allows. Betting that the price of an asset will go down, traditionally by borrowing some of that asset and then selling it, hoping to buy it back at a lower price and pocket the difference (minus interest). So, let's say as per your example you borrow 100 shares of company 'X', expecting the price of them to go down. You take your shares to the market and sell them - you make a market sell order (a market 'ask'). This matches against a bid and you receive a price of $5 per share. Now, let's pretend that you change your mind and you think the price is going to go up, you instantly regret your decision. In order to pay back the shares, you now need to buy back your shares as $6 - which is the price off the ask offers on the order book. Because of this spread, you have lost money. You sold at a low price and bought at a high price, meaning it costs you more money to repay your borrowed shares. So, when you are shorting you need the spread to be as tight as possible. |
Save money in company for next year | As was once famously said, Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes. — Benjamin Franklin, 1789 It's very likely that either the company or you personally is going to have to pay taxes on that money. Really the only way to avoid it would be if the company spent that money on next year's expenses, and paid the bill before the end of this year. Of course you can only do that if the recipient is willing to receive their money so far in advance, which isn't necessarily the case since they would pay more taxes this year as a result. As for whether it's better to have the company pay the tax or for you to do as your accountant suggests, there are a lot of factors that go into that equation, and my gut feeling is that your accountant already ran it both ways and is suggesting the better choice. |
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