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Figuring out an ideal balance to carry on credit cards [duplicate] | I think this advice to carry a balance each month is nonsense. You're just wasting money that way. Personally, I have always paid off my credit cards every month for as long as I can remember, and my credit score is only 8 points below the max. The bigger factors by far are: It might be good advice to charge a small amount each month on your credit cards each month in order to keep seldom-used accounts active (remember, longer payment history is better), but there's no reason not to pay off the balance to avoid the interest charges. In short, the "ideal balance" to carry month-to-month on a credit card is zero. |
Are stocks always able to be bought and sold at market price? | Many of the Bitcoin exchanges mimic stock exchanges, though they're much more rudimentary offering only simple buy/sell/cancel orders. It's fairly normal for retail stock brokerage accounts to allow other sorts of more complex orders, where once a certain criteria is met, (the price falls below some $ threshold, or has a movement greater than some %) then your order is executed. The space between the current buy order and the current sell order is the bid/ask spread, it's not really about timing. Person X will buy at $100, person Y will sell at $102. If both had a price set at $101, they would just transact. Both parties think they can do a little bit better than the current offer. The width of the bid/ask spread is not universal by any means. The current highest buy order and the current lowest sell order, are both the current price. The current quoted market price is generally the price of the last transaction, whether it's buy or sell. |
What governs the shape of price history graphs? | I agree with @Turukawa that the x-axes need to be the same to make a direct comparison. However, the graphs you linked make me think of introductory calculus: If you time averaged plots, speculative investments (gold, housing) seem to have many large concave up time periods and the dow jones has many concave down sections. Using the concavity test: If the first derivative tells you about the rate of change, the second derivative tells you about the rate of change of rate of change. Remember back to Physics 101: 1st derivative is velocity & second derivative is acceleration. It would be interesting to have the same time scales for your plots & compare these accelerations between the two. I suspect the more volatile investments would have larger (in magnitude) accelerations during boom/bust cycles than less speculative investments. |
Is it ever a good idea to close credit cards? | Credit scoring has changed recently and the answer to this question will have slightly changed. While most points made here are true: But now (as of July 2017) it is possible having a large available credit balance can negatively effect your credit score directly: ... VantageScore will now mark a borrower negatively for having excessively large credit card limits, on the theory that the person could run up a high credit card debt quickly. Those who have prime credit scores may be hurt the most, since they are most likely to have multiple cards open. But those who like to play the credit card rewards program points game could be affected as well. source |
60% Downpayment on house? | If you decide you need the extra money, you can always go refinance and get more cash out. At the end of the day, though, if you pay off your house sooner you can invest more of your income sooner; that's just a matter of discipline. |
Is engaging in stocks without researching unwise? | Stock recommendations and price history are an unwise way to invest. People that recommend stocks are usually compensation for recommending it. They are paid directly by third parties, that can be paid in shares, they can simply own the stock themselves and if the stock goes up they can sell it to new investors at a higher price (or even a lower price, they may not actually care) Price history does not tell you a complete picture, what kind of price history are you even looking at: "this stock went up, let me buy now at the very top and hope it goes higher, am I too late" "this stock went down let me avoid it" if you don't know why, what, who, when, assets, debt, etc, you shouldn't be buying the stock. |
What type of investments should be in a TFSA, given its tax-free growth and withdrawal benefits? | I think "optimal" is a term that needs to be better qualified - what's optimal investment for one person is not necessary optimal for another, as it depends on the investor's time horizon, risk tolerance, and investment knowledge. I would personally put fix-income (or products that generates incomes that CRA considers as "interest") products in the TFSA so the gains aren't taxed at all. I would consider putting preferred shares in this account as well, since dividend incomes are taxed higher than capital gain and preferred shares don't usually change in price unless the company's ability to pay the dividends are in-doubt. I don't want to put common equities in TFSA as that would take away your ability to leverage past losses to reduce future capital gains. If you are using TFSA as a way to accelerate saving for a near-term purchase, then you definitely want to employ fix-income products as the underlying saving vehicle, since market volatility would be your enemy (unless you are feeling very lucky). If you are using TFSA as a way to supplement your registered retirement saving account, then you can treat it the same way you would invest in your RRSP. |
Can two companies own stock in each other? | Yes, this happens a lot. And in many cases companies don't even know this is happening. Collateralized Debt Obligations frequently contain pieces of the same financial products, where it is not obvious what the underlying asset is. It gets complicated to explain, but I can make an analogy to a portfolio of stocks you might create. Your portfolio contains companies and those companies also own some of the other companies in your same portfolio. The value of all the companies in your portfolio are very interrelated even though you thought you made diversified investments, under the idea that they can't all do poorly at the exact same time. Except they can, if the value of the company's shares are solely based on the value of other company's shares, but nobody noticed that none of them have an actual robust operations. This was a key factor of the financial disaster around 2008, but this problem was solved with the addition of additional disclaimers that all investors agree to, so they know what they are buying |
I forgot to write the name on the check | If you forgot to put the name on the "pay to the order of" line then anybody who gets their hands on the check can add their name to the check and deposit it at their bank into their account. If it goes to the correct person they will have an easy time making sure that the check is made out correctly. They don't have to worry about that picky teller who doesn't know what to do with a check made out to Billy Smith and a drivers license for Xavier William Smith. On the other hand... a criminal will also be able to make sure it is processed exactly the way they want it. If I made it out to a small business or a person I would let them know. You might not have a choice but to wait and see what happens if it was sent to a large business, the payment processing center could be a long way from where you will be calling. |
Multiple hard inquiry for a single loan from car dealer? | Each goes to a different agency. Yes, it is normal that the lender queries more than one agency. |
What is a Student Loan and does it allow you to cover a wide range of expenses relating to school? | Student loan is a class of unsecured loan. The characteristics that define a student loan are, primarily, that it is a loan that is intended to be used by someone who is currently a student. Beyond that, though, there are many variations. The different kinds of requirements usually have to do with who is eligible for the loan, and with what the loan is allowed to be used to pay. Some loans have other limitations, such as only being allowed to be directly paid to the institution. Some student loans are federally guaranteed (meaning the Federal Government will repay the bank if you default). Those have a lower interest rate, typically, and often have more stringent requirements, such as only full-time students being eligible, being need-based, and limitations on what the loan's funds can be used for. See studentaid.ed.gov for more information. Many private student loans have quite lax limitations. Some for example have nearly no limitation as to what they can fund; many are allowed to be taken out by part-time students and even non-degree-seeking students in some cases. Private loans usually have somewhat higher rates (as they're entirely unsecured) to go along with the lower restrictions and higher borrowing limits. You'd have to see the specific details of any particular loan to know what it's allowed to pay for, so if you choose this route, know what you plan to use it to pay for before you go looking. |
Does receiving a 1099-MISC require one to file a tax return even if he normally would not be required to file? | Does he need to file a tax return in this situation? Will the IRS be concerned that he did not file even if he received a 1099? No. However, if you don't file the IRS may come back asking why, or "make up" a return for you assuming that the whole amount on the 1099-MISC is your net earnings. So in the end, I suspect you'll end up filing even though you don't have to, just to prove that you don't have to. Bottom line - if you have 1099 income (or any other income reported to the IRS that brings you over the filing threshold), file a return. |
Where should a young student put their money? | It really is dependent upon your goals. What are your short term needs? Do you need a car/clothing/high cost apartment/equipment when you start your career? For those kinds of things, a savings account might be best as you will need to have quick access to cash. Many have said that people need two careers, the one they work in and being an investor. You can start on that second career now. Open up some small accounts to get the feel for investing. This can be index funds, or something more specialized. I would put money earmarked for a home purchase in funds with a lower beta (fluctuation) and some in index funds. You probably would want to get a feel for what and where you will actually be doing in your career prior to making a leap into a home purchase. So figure you have about 5 years. That gives you time to ride out the waves in the market. BTW, good job on your financial situation. You are set up to succeed. |
What does it mean if a company pays a quarterly dividend? How much would I get quarterly? | Google is a poor example since it doesn't pay a dividend (and doesn't expect to), so let's use another example with easy numbers. Company X has a stock price of $100, and it pays a quarterly dividend (many companies do). Let's assume X pays a dividend of $4. Dividends are always quoted in annual terms, as is dividend yield. When a company says that they pay "quarterly dividends," it means that the company pays dividends every quarter, or every 3 months. BUT, if a company has a $4 dividend, you will not receive $4 every quarter per share. You will receive $4/4 = $1 per share, every quarter. So over the course of a fiscal year, or 4 quarters, you'll get $1 + $1 + $1 + $1 = $4 per share, which is the annual dividend. The dividend yield = annual dividend/stock price. So in this case, company X's div. yield will be $4/$100 * 100 = 4%. It's important to note that this is the annual yield. To get the quarterly yield, you must divide by 4. It's also important to note that the yield fluctuates based on stock price, but the dividend payment stays constant unless the company states an announcement. For a real world example, consider Intel Corp. (TICKER: INTC) http://finance.yahoo.com/q?s=INTC The share price is currently $22.05, and the dividend is $0.84. This makes the annual yield = $0.84/$22.05 * 100 = 3.80%. Intel pays a quarterly dividend, so you can expect to receive $0.21 every quarter for every share of Intel that you own. Hope that clears it up! |
Should I buy a house with a friend? | I did this about 8 years ago with a buddy in Chicago for the reasons specified in the original post. As other posters have suggested, we discussed a lot of the same questions listed above, figured out the possible scenarios, and then had a lawyer draw up a contract. We bought a 3 bedroom house, and rented out the 3rd bedroom. Overall, it was a great experience. We both built equity while having a renter pay a third of the mortgage. Plus the property tax and interest on the loan were tax deductible. Compared with renting an apartment, it made us a lot more money. In the end, we sold the house, and split the profits. Assuming you have the personalities to make it work, I say go for it. |
Why do mutual fund trading limitations exist? e.g. 90 day transfer limits? | Mutual funds (that are not exchange-traded funds) often need to sell some of their securities to get cash when a shareholder redeems some shares. Such transactions incur costs that are paid (proportionally) by all the shareholders in the fund, not just the person requesting redemption, and thus the remaining shareholders get a lower return. (Exchange-traded funds are traded as if they are shares of common stock, and a shareholder seeking a redemption pays the costs of the redemption). For this reason, many mutual funds do not allow redemptions for some period of time after a purchase, or purchases for some period of time after a redemption. The periods of time are chosen by the fund, and are stated in the prospectus (which everyone has acknowledged has been received before an investment was made). |
If an index goes up because an underlying company issues more shares, what happens to the ETF | If a stock that makes up a big part of the Dow Jones Industrial Average decided to issue a huge number of additional shares, that will make the index go up. At least this is what should happen, since an index is basically a sum of the market cap of the contributing companies. No, indices can have various weightings. The DJIA is a price-weighted index not market-cap weighted. An alternative weighting besides market-cap and price is equal weighting. From Dow Jones: Dow Jones Industrial Average™. Introduced in May 1896, the index, also referred to as The Dow®, is a price-weighted measure of 30 U.S. blue-chip companies. Thus, I can wonder what in the new shares makes the index go up? If a stock is split, the Dow divisor is adjusted as one could easily see how the current Dow value isn't equal to the sum or the share prices of the members of the index. In other cases, there may be a dilution of earnings but that doesn't necessarily affect the stock price directly as there may be options exercised or secondary offerings made. SO if the index, goes up, will the ETF DIA also go up automatically although no additional buying has happened in the ETF itself? If the index rises and the ETF doesn't proportionally, then there is an arbitrage opportunity for someone to buy the DIA shares that can be redeemed for the underlying stocks that are worth more in this case. Look at the Creation and Redemption Unit process that exists for ETFs. |
How to secure one's effort when working on a contract? | I don't think you need to bother with trust accounts. The point of a trust account is holding funds that aren't yours yet. You take a retainer fee that you have yet to earn. As you work, you bill your hourly rate, your client signs off and you take possession of the funds. You're going to work a project, you'll take a partial payment as a deposit and partial payment upon completion. But this is a payment to you, not money transferred to you to hold until you earn it at a later date. Your contract can specify remedies for missing a deadline, or any other thing that could happen. |
Where can I find a definition of psychological barriers with respect to marketable securities? | I think "Psychological Pricing" is a similar phenomenon to what you are looking for. This is where retailers use certain numbers in prices because those prices are more appealing to consumers. Since stocks - and in your case bitcoin - have prices, they too will be more or less appealing at different prices based on psychology alone. |
Scam or Real: A woman from Facebook apparently needs my bank account to send money | The other answers describe why this is highly likely to be a scam. This answer describes why you don't want to get involved, even in the unlikely case that it isn't a scam. I'm describing this using US law (which I'm not particularly familiar with, so if I go astray I'd suggest others fix any flaws in this answer), but most other countries have similar laws as these laws are all implementations of a small number of international treaties have very large memberships. The service you describe (accepting money transfers from one party and transferring them to another) is one which, if you engage in it for profit, would classify you as a "financial institution" under 31 USC 5312, specifically paragraph (a)(2)(R): any other person who engages as a business in the transmission of funds, including any person who engages as a business in an informal money transfer system Because you would be acting as a financial institution: Failure to follow such requirements can lead to a fine of up to $250,000 or a 5 year prison sentence (31 USC 5322). See also: Customer Identification Program and Know Your Customer. |
What does the average log-return value of a stock mean? | Knowing the log return is useful - the log return can help you to work out the annual return over the period it was estimated - and this should be comparable between stocks. One should just be careful with the calculation so that allowance for dividends is made sensibly. |
How can I live outside of the rat race of American life with 300k? | the short answer: yes. The long answer depends on what you mean by modest living. As others have noted, living off a $300k principle involves risks, but the entire future has risk. By "getting out of the rat race" I hope you don't mean become a slug on the couch. Peruse mr. Money Mustache at https://www.mrmoneymustache.com/. One can live very frugally yet very well in some parts of the US. |
Is it really possible to get rich in only a few years by investing? | You are probably right that using a traditional buy and hold strategy on common equities or funds is very unlikely to generate the types of returns that would make you a millionaire in short order. However, that doesn't mean it isn't possible. You just have to accept a more risk to become eligible for such incredible returns that you'd need to do that. And by more risk I mean a LOT more risk, which is more likely to put you in the poorhouse than a mansion. Mostly we are talking about highly speculative investments like commodities and real estate. However, if you are looking for potential to make (or more likely lose) huge amounts of money in the stock market without a very large cache of cash. Options give you much more leverage than just buying a stock outright. That is, by buying option contracts you can get a much larger return on a small movement in the stock price compared to what you would get for the same investment if you bought the stock directly. Of course, you take on additional risk. A normal long position on a stock is very unlikely to cause you to lose your entire investment, whereas if the stock doesn't move far enough and in the right direction, you will lose your entire investment in option contracts. |
Buying a house. I have the cash for the whole thing. Should I still get a mortgage to get the homeowner tax break? | Except for unusual tax situations your effective interest rate after taking into account the tax deduction will still be positive. It is simply reduced by your marginal rate. Therefore you will end up paying more if the house is financed than if it is bought straight out. Note this does not take into account other factors such as maintaining liquidity or the potential for earning a greater rate of return by investing the money that would otherwise be used to pay for the house |
Which is better when working as a contractor, 1099 or incorporating? | It makes no difference for tax purposes. If you are 1099, you will pay the same amount of taxes as if you formed a corporation and then paid yourself (essentially you are doing this as a 1099 contractor, just not formally). Legally, I don't know the answer. I would assume you have some legal protections by forming an LLC but practically I think this won't make any difference if you get sued. |
Using pivot points to trade in the short term | What are Pivot Points? Pivot Points indicate price levels that are of significance in technical analysis of securities. Pivot Points are used to provide clarity for a trader as they are a predictive indicator of where a security might go. There are at least 6 different types of Pivot Points (Woodie Pivot Point, Fibonacci Pivot, Demark etc..) and they are different based on their formulas but generally serve the same concept. I will be answering your question using the Camarilla Pivot Point formula. Camarilla Pivot Point Formula Generally any Pivot Point formula uses a combination of the Open, High, Low and Close of the previous timeframe. Since you are technically a swing trader indicated by say between a couple of days to a couple of weeks, as I don't want to do day trading you should use a weekly 5 to 30 minute chart but you can also use a daily chart as well. So for example if you use a daily chart, you would use the Open, High, Low and Close of the previous day. Example of fictitious stock: MOSEX (Money Stack Exchange) 01/14/16: Open: 10.25, High: 12.55, Low: 9.65, Close: 11.50 On 01/15/16: R4 Level: 13.10, R3 Level: 12.30, R2 Level: 12.03, R1 Level: 11.77, Pivot Point: 11.23, S1 Level: 11.23, S2 Level: 10.97, S3 Level: 10.70, S4 Level: 9.91 R = Resistance, S = Support How to identify these Pivot Points? Most charting software already have built in overlays that will identify the pivot points for you but you can always find and draw them yourself with an annotation tool. Since we are using the Camarilla Pivot Point formula, the important Pivot Point levels are the R4 which is considered as the Breakout Pivot, the S4 which is considered as the Breakdown Pivot. R3 and S3 are Reversal Pivot Points. Once identify the Pivot Points how should you proceed in a trade? This is the million dollar question and without spoon feeding you requires you to come up with your own strategy. To distinguish yourself from being a novice and pro trader is to have a strategy in a trade. Now I don't really have the time to look for actual charts to provide examples with but generally this is what you should look for to proceed in a trade: Potential Buy/Short Signals: Potential Sell Signals: If a stock moves above the R3 Level but then crosses below it, this would be a sell signal. This is confirmed when their is a lower lower then the candle that first crosses below it. Sell a stock when S4 Level is confirmed. See above for the confirmation. Other Useful Tips: Use the Pivot Point as your support or resistance. The Pivot Point levels can be used for your stop loss. For example, with an S3 reversal buy signal, the S4 should be used as a stop loss. Conversely, the Pivot Point levels can also be used for your target prices. For example, with an S3 reversal buy signal, you should take some profits at R3 level. You should also use a combination of other indicators to give you more information to confirm if a signal is correct. Examples of a good combination is the RSI, MACD and Moving Averages. Read that book in my comment above!! |
How can I check my credit score? | Check with your bank. As of January, 2015, the following banks and credit unions are offering free credit-scores: Announced, in the pipeline: Source: Banks to offer FICO credit scores for free Personal Experience: I've been receiving free FICO score from my credit union for more than 6 months now. Advice: Most people have multiple bank/credit-union accounts. The FICO score will be the same whoever offers it. If none of your financial institutions offer you a free credit-score then you may opt for free services like creditkarma.com or other paid services. Please note that a credit-score is number summarizing your credit-report and should not be confused. In the news: |
$700 guaranteed to not be touched for 15 years+, should I put it anywhere other than a savings account? | (Since you used the dollar sign without any qualification, I assume you're in the United States and talking about US dollars.) You have a few options here. I won't make a specific recommendation, but will present some options and hopefully useful information. Here's the short story: To buy individual stocks, you need to go through a broker. These brokers charge a fee for every transaction, usually in the neighborhood of $7. Since you probably won't want to just buy and hold a single stock for 15 years, the fees are probably unreasonable for you. If you want the educational experience of picking stocks and managing a portfolio, I suggest not using real money. Most mutual funds have minimum investments on the order of a few thousand dollars. If you shop around, there are mutual funds that may work for you. In general, look for a fund that: An example of a fund that meets these requirements is SWPPX from Charles Schwabb, which tracks the S&P 500. Buy the product directly from the mutual fund company: if you go through a broker or financial manager they'll try to rip you off. The main advantage of such a mutual fund is that it will probably make your daughter significantly more money over the next 15 years than the safer options. The tradeoff is that you have to be prepared to accept the volatility of the stock market and the possibility that your daughter might lose money. Your daughter can buy savings bonds through the US Treasury's TreasuryDirect website. There are two relevant varieties: You and your daughter seem to be the intended customers of these products: they are available in low denominations and they guarantee a rate for up to 30 years. The Series I bonds are the only product I know of that's guaranteed to keep pace with inflation until redeemed at an unknown time many years in the future. It is probably not a big concern for your daughter in these amounts, but the interest on these bonds is exempt from state taxes in all cases, and is exempt from Federal taxes if you use them for education expenses. The main weakness of these bonds is probably that they're too safe. You can get better returns by taking some risk, and some risk is probably acceptable in your situation. Savings accounts, including so-called "money market accounts" from banks are a possibility. They are very convenient, but you might have to shop around for one that: I don't have any particular insight into whether these are likely to outperform or be outperformed by treasury bonds. Remember, however, that the interest rates are not guaranteed over the long run, and that money lost to inflation is significant over 15 years. Certificates of deposit are what a bank wants you to do in your situation: you hand your money to the bank, and they guarantee a rate for some number of months or years. You pay a penalty if you want the money sooner. The longest terms I've typically seen are 5 years, but there may be longer terms available if you shop around. You can probably get better rates on CDs than you can through a savings account. The rates are not guaranteed in the long run, since the terms won't last 15 years and you'll have to get new CDs as your old ones mature. Again, I don't have any particular insight on whether these are likely to keep up with inflation or how performance will compare to treasury bonds. Watch out for the same things that affect savings accounts, in particular fees and reduced rates for balances of your size. |
Why do people buy insurance even if they have the means to overcome the loss? | There are a couple of reasons that a person might choose to use insurance even if they could handle the financial loss if something went wrong. They know their risk better than the insurance company. While it might seem odd at first glance that an individual can be better at assessing risk than a large company with thousands of actuaries. There are limits to the amount of knowledge that an insurance company can have or use to price their insurance products. For instance if you were a very aggressive driver but didn't have any recent tickets or accidents because you were in college and didn't have a car on a regular basis, but now you have a job and drive 30 miles to work every day. You know your risk is relatively high but the insurance company sees you as relatively low risk and aren't able to price that extra risk into your premium. Just because a person can survive financial after losing something like a car or a house doesn't mean it isn't desirable to pay a small price to mitigate that risk. If you are using your savings to pay for an emergency then that money needs to be semi liquid in case you need it limiting your investment options. Where as if you purchase insurance you pay a small amount of money to be able to invest the rest of your money. Liquidity is a big deal particularly if you are a small business and investing into your business where your money can make your more money but you may or may not be able to access that money very easily. |
What does Chapter 11 Bankruptcy mean to an investor holding shares of a Chapter 11 Company? | If you've got shares in a company that's filed for U.S. Chapter 11 bankruptcy, that sucks, it really does. I've been there before and you may lose your entire investment. If there's still a market for your shares and you can sell them, you may want to just accept the loss and get out with what you can. However, shares of bankrupt companies are often delisted once bankrupt, since the company no longer meets minimum exchange listing requirements. If you're stuck holding shares with no market, you could lose everything – but that's not always the case: Chapter 11 isn't total and final bankruptcy where the company ceases to exist after liquidation of its assets to pay off its debts. Rather, Chapter 11 is a section of the U.S. Bankruptcy Code that permits a company to attempt to reorganize (or renegotiate) its debt obligations. During Chapter 11 reorganization, a company can negotiate with its creditors for a better arrangement. They typically need to demonstrate to creditors that without the burden of the heavy debt, they could achieve profitability. Such reorganization often involves creditors taking complete or majority ownership of the company when it emerges from Chapter 11 through a debt-for-equity swap. That's why you, as an investor before the bankruptcy, are very likely to get nothing or just pennies on the dollar. Any equity you may be left holding will be considerably diluted in value. It's rare that shareholders before a Chapter 11 bankruptcy still retain any equity after the company emerges from Chapter 11, but it is possible. But it varies from bankruptcy to bankruptcy and it can be complex as montyloree pointed out. Investopedia has a great article: An Overview of Corporate Bankruptcy. Here's an excerpt: If a company you've got a stake in files for bankruptcy, chances are you'll get back pennies to the dollar. Different bankruptcy proceedings or filings generally give some idea as to whether the average investor will get back all or a portion of his investment, but even that is determined on a case-by-case basis. There is also a pecking order of creditors and investors of who get paid back first, second and last. In this article, we'll explain what happens when a public company files for protection under U.S. bankruptcy laws and how it affects investors. [...] How It Affects Investors [...] When your company goes bankrupt, there is a very good chance you will not get back the full value of your investment. In fact, there is a chance you won't get anything back. [...] Wikipedia has a good article on Chapter 11 bankruptcy at Chapter 11, Title 11, United States Code. |
At what interest rate should debt be used as a tool? | It's not so much the rate of the debt as it is the total cost of the debt relative to the gain you expect to see from using it to purchase something of value. I've known people who were quite happy to pay 12% on personal loans used to buy investment properties for flipping. They're happy to pay that because conventional loans from banks require too much documentation and out-of-pocket expense. For some investors, 12% without all of the documentation burden is money well spent. So if I'm the investor, and the interest on this 12% loan is $5,000 and I can flip a property for $20,000 after all of the other expenses, then the 12% loan was an enabler to netting $15,000 profit. |
Primerica: All it claims to be? | I was a Primerica representative, left to be on my own, and then returned. Insurance is one matter that depends on the individual. Some do not need it. For example, when I was an independent agent with an independent marketing organization (IMO) (oh yes! multi-level is everywhere, dont kid yourself) I had an upline as well. We were pushed to sell final expense [burial insurance]. As an ethical agent, I believe this is a bad business practice. Primerica does not sell unneeded insurance to old people. How can you justify selling the elderly, insurance to cover them for $10,000, at almost 100 to 150 a month? I told my elderly potential clients, after seeing they live on a tight budget, that they were better off purchasing a cremation policy or funeral package than burial insurances as it would save them money in the long run. Primerica is right in saying they are the only ones out there catering to the Working Class and Middle-America. Where else can you start an Individual Retirement Account (IRA) with $25 a month? Nowhere! All the other insurance producers want more money. They don't want to spend their time with what they call "losers". I love showing Poor people how the Rich get richer. Poor people should know the truth. |
How do you declare an interest free loan? | In principle, the US taxes both income and gifts. Simply thinking good thoughts is not necessarily sufficient to avoid filing or payment obligations. Giving somebody money with no repayment date, no interest, and no enforceable note looks an awful lot like either income or a gift. A loan normally has interest, money sitting in a savings account is insured, and other investments generally have an expected return. Why would somebody give a loan with no interest, with only flexible or informal payment expectations, in a way where it has neither deposit insurance nor any expectation of net returns? That looks a lot like a gift - at the very least, a gift of the time value and the default risk. The IRS definitely polices loan rates. The latest release is Revenue Ruling 2014-13. The AFR is useful for tax concepts such as Original Issue Discount (when issuers sell low-interest or no-interest bonds or loans at less than face value, attempting to recharacterize interest income as return of principal), various grantor trusts (e.g. GRATs), and so forth. It's a simple way for the IRS to link to market rates of interest. Documentation and sufficient interest, as well as clear payment schedule (and maybe call or demand rights) make it a bona fide loan. There is no real way for the IRS to distinguish between an informal arrangement and a post-hoc lie to conceal a gift. Moreover, an undocumented loan is generally difficult to enforce, so it looks less like a true loan. The lender declares the interest payments as income on his Form 1040, line 8a and if necessary Schedule B. |
Do Americans really use checks that often? | When you start at a new job here in the U.S., the default means of payment is usually a paper check. Most folks will quickly set up direct deposit so that their employer deposits their paycheck directly into their personal bank account - the incentive to do so is that you receive your funds faster than if you deposit a paper check. Even if you set up direct deposit on your first day on the job, you may still receive your first paycheck as a paper check simply because the wheels of payroll processing turn slowly at some (large) companies. A counter example is a self-employed contractor - perhaps a carpenter or house painter. These folks are paid by their customers, homeowners and such. Many larger, well established contracters now accept credit card payments from customers, but smaller independents may be reluctant to set up a credit card merchant account to accept payment by card because of all the fees that are associated with accepting credit card payments. 3% transaction fees and monthly service fees can be scary to any businessman who already has very thin profit margins. In such cases, these contractors prefer to be paid by check or in cash for the simple reason that there are no fees deducted from cash payments. There are a few folks here who don't trust direct deposit, or more specifically, don't trust their employer to perform the deposit correctly and on time. Some feel uncomfortable giving their bank info to their employer, fearing someone at the company could steal money from their account. In my experience, the folks who prefer a paper paycheck are often the same folks who rush to the bank on payday to redeem their paychecks for cash. They may have a bank account (helps with check cashing) but they prefer to carry cash. I operate in a manner similar to you - I use a debit card or credit card (I only have one of each) for nearly all transactions in daily life, I use electronic payments through my bank to pay my regular bills and mortgage, and I receive my paycheck by direct deposit. There have been periods where I haven't written or received paper checks for so long that I have to hunt for where I put my checkbook! Even though I use a debit card for most store purchases, the bank account behind that debit card is actually a checking account according to the bank. Again, the system defaults to paper checks and you have the option of going electronic as well. Before we judge anyone who doesn't use direct deposit or who prefers to be paid in cold hard cash, consider that direct deposit is a luxury of stability. Steady job, home, etc. Direct deposit doesn't make sense for a contractor or day laborer who expect to work for a different person each day or week. I don't think this is all that unique to the US. There are people in every city and country who don't have long-term employment with a single employer and therefore prefer cash or paper check over electronic payments. I'd be willing to bet that this applies to the majority of people on the planet, actually. |
Recommended education path for a future individual investor? | For a job doing that kind of stuff, what is PREFERRED is 4 year undergrad at ivy league school + 2 year MBA at ivy league school, and then several more years of experience, which you can sort of get by interning while in school this will of course saddle you with debt, which is counterintuitive to your plans basically, the easy way up is percentage based compensation. without knowing the right people, you will get a piss poor salary regardless of what you do, in the beginning. so portfolio managers earn money by percentage based fees, and can manage millions and billions. real estate agents can earn money by percentage based commissions if they close a property and other business venture/owners can do the same thing. the problem with "how to trade" books is that they are outdated by the time they are published. so you should just stick with literature that teaches a fundamental knowledge of the products you want to trade/make money from. ultimately regardless of how you get/earn your initial capital, you will still need to be an individual investor to grow your own capital. this has nothing to do with being a portfolio manager, even highly paid individuals on wall street are in debt to lavish expenditures and have zero capital for their own investments. hope this helps, you really need to be thinking in a certain way to just quickly deduce good ideas from bad ideas |
How much is inflation? | FYI...prices don't always go up. Inflation is a monetary phenomenon. I'm simplifying greatly here: if more money is printed (or the money supply increases through fractional reserve banking) and it is chasing the same amount of goods then prices will go up. Conversely, if money is held constant and the economy becomes more productive, producing more goods, then a constant amount of money is chasing an increasing amount of goods and prices go down. After the Civil War the greenback went back to being on a gold standard in 1879. After 1879 greenbacks could be redeemed for gold. Gold restricts money growth since it is difficult to obtain. Here are the price and wage indexes from 1869 - 1889 (from here): Notice from 1879 to 1889 that wholesale and consumer prices fall but wages start to increase. Imagine your salary staying the same (or even increasing) but the prices of items falling. Still don't think inflation is a monetary phenomenon? Here is a CPI chart from 1800 to 2007: Notice how the curve starts to go drastically up around 1970. What happen then? The US dollar went off the gold-exchange standard and the US dollar became a purely fiat currency backed by nothing but government decree which allows the Federal Reserve to print money ad nauseum. |
Why do stocks tend to trade at high volumes at the end of (or start) the trading day? | The shift to trading at the close began in 2008. Traders did not want to be caught off guard by surprise news and there was a lot of volatility during the financial crisis, so they would close their position in the evening. Thats how it began. There are two reasons why it sticks around. First, there has been an increase usage of index funds or passive funds. These funds tend to update their positions at the end of the day. From the WSJ: Another factor behind the shift has been the proliferation of passively managed investments, such as index funds. These funds aim to mimic an index, like the S&P 500, by owning the shares that comprise it. Index funds don’t trade as often as active investors, but when they do, it is typically near the market close, traders say. That is because buying or selling a stock at its closing price better aligns their performance with the index they are trying to emulate. The second reason is simply that volume attracts volume. As a result of whats mentioned above, you have a shift to end of day trading, and the corrolary to that is that there is a liquidity shortage from 10am to 3pm. Thus, if you want to buy or sell a stock, but there are few buyers or sellers around, you will significant move the price when you enter your order. Obviously this does not affect retail traders, but imagine hedge funds entering or closing a billion dollar position. It can make a huge impact on price. And one way to mitigate that is to wait until there are more market participants to take the other end of your trade, just as at the end of the day. So this is a self-reinforcing trend that has begun in the markets and will likely stick around. http://www.wsj.com/articles/traders-pile-in-at-the-close-1432768080 |
How are startup shares worth more than the total investment funding? | The net worth is based on an estimate of how much he would get if he relinquished his stake. The total funding is based on how much he has relinquished thus far. Suppose I have a candy jar with 100 candies. I'm not sure how much these candies are worth, so I start off by selling 10% of the jar for $10. Now I have 90 candies and $10, a total value of $100. Then someone comes along offering $100 for another 10% (of the original jar, or 10 candies), which I accept. Now I have 80 candies and $110. Since I value each candy at $10 now, I calculate my worth as $910. Then I do another deal selling 10% for $1000. Now I have $1110 in cash and 70 candies valued at $100 each. My total worth is now $8110 (cash + remaining candies), while the candy jar has only received $1110 in funding. Replace candies with equity in The Facebook, Inc. and you get the idea. |
What are the usual terms of a “rent with an option to buy” situation? | In most cases an rent with option to buy is structured as follows: The renter/buyer will place a deposit/premium (not the same as a security deposit) that purchases the option( the right ) to buy the home at a future date at a specific price. The renter / buyer will often pay extra rent in addition to market rent. Many times this additional rent is contracted to be applied to the purchase price of the home. The risks to the renter/buyer are as follows: Also, something to note: Many people will recommend that you use the additional rents to be applied specifically towards the downpayment. Be wary of this. There are no institutional lenders available today that will allow the additional rent money to be applied towards your downpayment. That means you must come up with the downpayment in cash before closing. The additional rent payments can be used towards the price. Hope that helps. Good luck! |
Why companies appear in several stock exchanges? | The case you are looking at is rather special, because the Chinese government for the longest time did not allow foreigners to invest in Chinese stocks. The ADRs explained in @DStanley's answer are a way around that restriction; recently there are some limited official ways, In general, it is perfectly normal for a stock to appear on different exchanges, in different currencies, and it's all the "real" stock. Because remember: a stock exchange is really nothing more than a fancy place for people to buy and sell stocks. There is absolutely no reason why a specific stock should only be traded in one place. Companies that have decided to be publically tradeable generally want to be traded in as many exchanges as possible, because it makes the stock more liquid, which helps their shareholders. Individual exchanges have different requirements for a stock to be listed for trading there, some may even do it without the company's explicit approval. |
How do I track investment performance in Quicken across rollovers? | Hmm, this site says If you use Quicken, you enter a new transaction of type "Corporate Acquisition (stock for stock)." You put investor shares as the "Company acquired", Admiral shares as the "Acquiring company", and the conversion ratio 0.7997754 as the "New shares issued per held share" number. Seems crazy, but maybe that's the way. Edit: This sucks. In the comments, you can see that people have to manually correct the share price for every transaction because of rounding problems. |
Should I fund a move by borrowing or selling other property assets? | It is a lot easier to make money when you are not in debt. If you can sell the apartment, get rid of your existing mortgage and buy the new house outright, that is probably the best course of action. |
Is investing into real estate a good move for a risk-averse person at the moment | Real estate is never a low-risk investment. I'd keep your money in the bank, and make sure that you don't have more in any one bank than is guaranteed in the event of bank failure. If your bank account is in Greece, Italy, Spain, Portugal or Ireland, I'd consider moving it to Eurozone country that's in better shape, as there's just a slight possibility of one or more of those countries exiting the Eurozone in a disorderly fashion and forcibly converting bank accounts to a new and weak currency. |
I might use a credit card convenience check. What should I consider? | Well, you might take a minor hit to your credit score. This is snapshot of my credit utilization written for an article on my site. The point there was that zero card use actually dinged the score, but for you, going over the 20% level is the risk. It's not too large a hit, depending how high the utilization goes. I'd not lose sleep over it. Kind of you to help. |
Is This A Scam? Woman added me on LinkedIn first, then e-mailed offering me millions of dollars [duplicate] | This is totally a scam. I didn't read the whole thing. Didn't need to after I read "abandoned sum of 22.5 million" which implied part of it was yours to take after you do something for them.. Logically speaking.. No stranger would disclose this to you. |
In the USA, does the income tax rate on my wages increase with the amount of money in my bank account? | besides accrued interest But that's important. 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? If they are interest bearing accounts, then yes the guy with the $40K balance will pay a little more* income tax than the guy with $9K. * If the account earns 1%/ann and the $40K and $9K have been in there all year, then the big account will earn $401.84 interest, and the smaller will earn $90.41. |
Should I Use an Investment Professional? | Agree with the above poster regarding causation vs. correlation. Unless you can separate out the variables questions like this are somewhat impossible to answer. Additionally, one of the fundamental issues is the Agency Problem. Depending on the fee structure the advisor might be more interested in their own self benefit then yours. |
How to protect a Stock you still want to own from a downturn? | Of the two, an option is a more reliable but more expensive means to get rid of a stock. As sdg said, a put option is basically an insurance policy on the stock; you pay a certain price for the contract itself, which locks in a sale price up to a particular future date. If the stock depreciates significantly, you exercise the option and get the contract price; otherwise you let the contract expire and keep the stock. Long-term, these are bad bets as each expired contract will offset earnings, but if you foresee a near-term steep drop in the stock price but aren't quite sure, a put option is good peace of mind. A sell stop order is generally cheaper, but less reliable. You set a trigger price, say a loss of 10% of the stock's current value. If that threshold is reached, the stop order becomes a sell order and the broker will sell the stock on the market, take his commission (or a fixed price depending on your broker) and you get the rest. However, there has to be a buyer willing to buy at that price at the moment the trigger fires; if a stock has lost 10% rapidly, it's probably on the way down hard, and the order might not complete until you realize a 12% loss, or a 15%, or even 20%. A sell stop limit (a combination stop order and limit order) allows you to say that you want to sell if the stock drops to $X, but not sell if it drops below $X-Y. This allows you to limit realized losses by determining a band within which it should be sold, and not to sell above or below that price. These are cheaper because you only pay for the order if it is executed successfully; if you never need it, it's free (or very cheap; some brokers will charge a token service fee to maintain a stop or stop limit). However, if the price drops very quickly or you specify too narrow a band, the stock can drop through that band too quickly to execute the sell order and you end up with a severely depreciated stock and an unexercised order. This can happen if the company whose stock you own buys another company; VERY quickly, both stocks will adjust, the buying company will often plummet inside a few seconds after news of the merger is announced, based on the steep drop in working capital and/or the infusion of a large amount of new stock in the buying company to cover the equity of the purchased company. You end up with devalued stock and a worthless option (but one company buying another is not usually reason to sell; if the purchase is a good idea, their stock will recover). Another option which may be useful to you is a swaption; this basically amounts to buying a put option on one financial instrument and a call on another, rolled into one option contract specifying a swap. This allows you to pick something you think would rise if your stock fell and exchange your stock for it at your option. For example, say the stock on which you buy this swaption is an airline stock, and you contract the option to swap for oil. If oil surges, the airline's stock will tank sharply, and you win both ways (avoiding loss and realizing a gain). You'd also win if either half of this option realized a gain over the option price; oil could surge or the airline could tank and you could win. You could even do this "naked" since its your option; if the airline's stock tanks, you buy it at the crashed price to exercise the option and then do so. The downside is a higher option cost; the seller will be no fool, so if your position appears to be likely, anyone who'd bet against you by selling you this option will want a pretty high return. |
What is the difference between a bond and a debenture? | Some additional links which explain their differences. But mostly as @bstpierre says, both are very similar and in some cases the terms may be used inter changeably |
Why do Americans have to file taxes, even if their only source of income is from a regular job? | Why is the US still working with paper checks when Europe went digital about a decade ago? Tax filing is just another area in which the US is lagging. Modernizing it costs money, and the US is quite close to bankruptcy (as seen by the repeated government shutdowns). Also, the US tax code is quite complicated. For instance, I doubt there's anyone who has a full and complete list of all allowed deductions. Some comments wonder about multiple incomes. This doesn't require tax filing either. My local tax authority just sends me a combined statement with data from 2 employers and 2 banks, and asks me to confirm the resulting payment. This is possible because tax number usage is strictly regulated. SSN abuse in the US presumably makes this problematic. |
Does a SIM only cell phone contract help credit rating? | I'm not sure if there are nuances between countries and appreciate your question is specifically about the US, but in the UK, mobile phone contracts, including SIM only, as seen by the chat in this experion website chat shows that mobile contracts are included in credit ratings for 6 years. |
Why not pay in full upfront for a car? | In general I'd say, yeah, if you can pay cash, pay cash. If you pay cash, then by definition you pay zero interest. If you get a loan, you'll pay interest. Most people get a loan to buy a car because they don't have the cash. Possible reasons not to pay cash when you could: One: Technically you can pay cash, but if you did, you would have little or no reserve for emergencies. Like if the car costs, say, $20,000.00, and you have $20,010.00 in your bank account, then technically you could afford to pay cash, but you probably shouldn't, because you don't want to have just $10 left. What if tomorrow something comes up? Two: Arguably, you have a place to invest money that pays more than the interest on the loan. Like say you can get a car loan for, whatever the going rate is today, say 6%. And you know a place to invest your money that is very safe and almost guaranteed to pay 10%. It would make sense to borrow to buy the car, invest the cash, and then withdraw money from the investment to make the payments on the car. You'd end up 4% ahead. There are a lot of catches to that strategy, though. The biggest is that the more the investment pays, the more likely that it is risky. If you thought the investment would pay 10% but it ends up paying only 4%, then you will lose money by this strategy. Also, there's the psychological element: Many people SAY and fully INTEND to invest their money, but then find other things they want to buy and so spend it instead. If you pay cash, you're committed. |
1.4 million cash. What do I do? | For what it's worth, the distribution I'm currently using is roughly ... with about 2/3 of the money sitting in my 401(k). I should note that this is actually considered a moderately aggressive position. I need to phone my advisor (NOT a broker, so they aren't biased toward things which are more profitable for them) and check whether I've gotten close enough to retirement that I should readjust those numbers. Could I do better? Maybe, at higher risk and higher fees that would be likely to eat most of the improved returns. Or by spending far more time micromanaging my money than I have any interest in. I've validated this distribution using the various stochastic models and it seems to work well enough that I'm generally content with it. (As I noted in a comment elsewhere, many of us will want to get up into this range before we retire -- I figure that if I hit $1.8M I can probably sustain my lifestyle solely on the income, despite expected inflation, and thus be safely covered for life -- so this isn't all that huge a chunk of cash by today's standards. Cue Daffy Duck: "I'm rich! I'm wealthy! I'm comfortably well off!" -- $2M, these days, is "comfortably well off.") |
Reasons behind a large price movement of a penny stock without any recent news releases? | Yes, in my humble opinion, it can be "safe" to assume that — but not in the sense that your assumption is necessarily or likely correct. Rather, it can be "safe" in the respect that assuming the worst — even if wrong! — could save you from a likely painful and unsuccessful speculation in the highly volatile stock of a tiny company with no revenue, no profits, next to no assets, and continued challenges to its existence: "There is material uncertainty about whether the Company will be able to obtain the required financing. This material uncertainty casts significant doubt about the Company’s ability to continue as a going concern." As a penny stock, they are in good company. Still, there are a variety of other reasons why such a stock might have gone up, or down, and no one [here] can say for sure. Even if there was a news item, any price reaction to news could just amount to speculation on the part of others having enough money to move the stock. There are better investments out there, and cheaper thrills, than most penny stocks. |
Micro-investing: How to effectively invest frequent small amounts of money in equities? | (For people looking at this question many years later...) Schwab and Fidelity offer a wide selection of commission-free ETFs. You need an initial purchase amount, though, of (when last I checked at Schwab) $1,000. |
Any good software for value investment? | As @littleadv and @DumbCoder point out in their comments above, Bloomberg Terminal is expensive for individual investors. If you are looking for a free solution I would recommend Yahoo and Google Finance. On the other side, if you need more financial metrics regarding historic statements and consensus estimates, you should look at the iPad solution from Worldcap, which is not free, but significantly cheaper then Bloomberg and Reuters. Disclosure: I am affiliated with WorldCap. |
What is considered high or low when talking about volume? | Volume is really only valuable when compared to some other volume, either from a historical value, or from some other stock. The article you linked to doesn't provide specific numbers for you to evaluate whether volume is high or low. Many people simply look at the charts and use a gut feel for whether a day's volume is "high" or "low" in their estimation. Typically, if a day's volume is not significantly taller than the usual volume, you wouldn't call it high. The same goes for low volume. If you want a more quantitative approach, a simple approach would be to use the normal distribution statistics: Calculate the mean volume and the standard deviation. Anything outside of 1.5 to 2.0 standard deviations (either high or low) could be significant in your analysis. You'll need to pick your own numbers (1.5 or 2.0 are just numbers I pulled out of thin air.) It's hard to read anything specific into volume, since for every seller, there's a buyer, and each has their reasons for doing so. The article you link to has some good examples of using volume as a basis for strengthening conclusions drawn using other factors. |
Payroll reimbursments | After reading OP Mark's question and the various answers carefully and also looking over some old pay stubs of mine, I am beginning to wonder if he is mis-reading his pay stub or slip of paper attached to the reimbursement check for the item(s) he purchases. Pay stubs (whether paper documents attached to checks or things received in one's company mailbox or available for downloading from a company web site while the money is deposited electronically into the employee's checking account) vary from company to company, but a reasonably well-designed stub would likely have categories such as Taxable gross income for the pay period: This is the amount from which payroll taxes (Federal and State income tax, Social Security and Medicare tax) are deducted as well as other post-tax deductions such as money going to purchase of US Savings Bonds, contributions to United Way via payroll deduction, contribution to Roth 401k etc. Employer-paid group life insurance premiums are taxable income too for any portion of the policy that exceeds $50K. In some cases, these appear as a lump sum on the last pay stub for the year. Nontaxable gross income for the pay period: This would be sum total of the amounts contributed to nonRoth 401k plans, employee's share of group health-care insurance premiums for employee and/or employee's family, money deposited into FSA accounts, etc. Net pay: This is the amount of the attached check or money sent via ACH to the employee's bank account. Year-to-date amounts: These just tell the employee what has been earned/paid/withheld to date in the various categories. Now, OP Mark said My company does not tax the reimbursement but they do add it to my running gross earnings total for the year. So, the question is whether the amount of the reimbursement is included in the Year-to-date amount of Taxable Income. If YTD Taxable Income does not include the reimbursement amount, then the the OP's question and the answers and comments are moot; unless the company has really-messed-up (Pat. Pending) payroll software that does weird things, the amount on the W2 form will be whatever is shown as YTD Taxable Income on the last pay stub of the year, and, as @DJClayworth noted cogently, it is what will appear on the W2 form that really matters. In summary, it is good that OP Mark is taking the time to investigate the matter of the reimbursements appearing in Total Gross Income, but if the amounts are not appearing in the YTD Taxable Income, his Payroll Office may just reassure him that they have good software and that what the YTD Taxable Income says on the last pay stub is what will be appearing on his W2 form. I am fairly confident that this is what will be the resolution of the matter because if the amount of the reimbursement was included in Taxable Income during that pay period and no tax was withheld, then the employer has a problem with Social Security and Medicare tax underwithholding, and nonpayment of this tax plus the employer's share to the US Treasury in timely fashion. The IRS takes an extremely dim view of such shenanigans and most employers are unlikely to take the risk. |
Why do people always talk about stocks that pay high dividends? | If you assume the market is always 100% rational and accurate and liquid, then it doesn't matter very much if a company pays dividends, other than how dividends are taxed vs. capital gains. (If the market is 100% accurate and liquid, it also doesn't really matter what stock you buy, since they are all fairly priced, other than that you want the stock to match your risk tolerance). However, if you manage to find an undervalued company (which, as an investor, is what you are trying to do), your investment skill won't pay off much until enough other people notice the company's value, which might take a long time, and you might end up wanting to sell before it happens. But if the company pays dividends, you can, slowly, get value from your investment no matter what the market thinks. (Of course, if it's really undervalued then you would often, but not always, want to buy more of it anyway). Also, companies must constantly decide whether to reinvest the money in themselves or pay out dividends to owners. As an owner, there are some cases in which you would prefer the company invest in itself, because you think they can do better with it then you can. However, there is a decided tendency for C level employees to be more optimistic in this regard than their owners (perhaps because even sub-market quality investments expand the empires of the executives, even when they hurt the owners). Paying dividends is thus sometimes a sign that a company no longer has capital requirements intense enough that it makes sense to re-invest all of its profits (though having that much opportunity can be a good thing, sometimes), and/or a sign that it is willing, to some degree, to favor paying its owners over expanding the business. As a current or prospective owner, that can be desirable. It's also worth mentioning that, since stocks paying dividends are likely not in the middle of a fast growth phase and are producing profit in excess of their capital needs, they are likely slower growth and lower risk as a class than companies without dividends. This puts them in a particular place on the risk/reward spectrum, so some investors may prefer dividend paying stocks because they match their risk profile. |
Dividends Growing Faster than Cost of Capital | I don't think the method falls short, it's the premise that is wrong. If the dividend stream really did grow faster than the cost of capital indefinitely, eventually the company behind the share would become larger than the entire economy. Logically, at some point, the growth must slow down. |
Recovering over-contribution to Social Security between two employers? | This is a common occurrence when somebody has multiple jobs in one year. The employer can't know if you have reached the annual limit. They know to stop when you have hit the maximum for their company, but don't have information on the other jobs. In fact the IRS doesn't let them factor in the other jobs. They have to keep making their payment until you hit the max for their company. When you fill out the 1040 there will be a line that checks that the total social security amount for each person was not over the annual limit. The extra will be refunded when you file your taxes. In the future if this happens again you can adjust your withholding to minimize the overage. For the example given in the question to get the 4K extra sooner, increase the number of allowances on the W-4. You can under withhold federal income tax because you will over withhold social security tax. |
Why are earning credit card rewards often tied to groceries and gas? | Every reward program has to have a funding source. If the card gives you x percent back on all purchases. That means that their business is structured to entice you to pump more transactions through the system. Either their other costs are lower, or the increased business allows them to make more money off of late fees, and interest. If the card has you earn extra points for buying a type of item or from a type of store (home stores improvement in the Spring), they are trying to make sure you use their card for what can be a significant amount of business during a small window of time. Sometimes they cap it by saying 5% cash back at home improvement stores during the spring but only on the first $1500 of purchases. That limits it to $75 maximum. Adding more business for them, makes more money for them. Groceries and gas are a good year round purchase categories. Yes there is some variation depending on the season, and the weather, but overall there is not an annual cliff once the season ends. Gas and groceries account for thousands of dollars a year these are not insignificant categories, for many families are recession proof. If they perceive a value from this type of offer they will change their buying behavior. My local grocery store has a deal with a specific gas station. This means that they made a monetary deal. Because you earn points at the grocery store and spend points at the gas station, the grocery store is paying some compensation to the gas station every time you use points. The gas station must be seeing an increase in business so theoretically they don't get 100% compensation from the grocery store. In cases where credit cards give airline miles, the credit card company buys the miles from the airline at a discount because they know that a significant number of miles will never be used. |
Should I replace bonds in a passive investment strategy | Bonds still definitely have a place in many passive portfolios. While it is true that interest rates have been unusually low, yields on reasonable passive bond exposures are still around 2-4%. This is significantly better than both recent past inflation and expected inflation both of which are near zero. This is reasonable if not great return, but Bonds continue to have other nice properties like relatively low risk and diversification of stock portfolios (the "offset[ing] losses" you mention in the OP). So to say that bonds are "no longer a good idea" is certainly not correct. One could say bonds may no longer be a good idea for some people that have a particularly high risk tolerance and very high return requirements. However, to some extent, that has always been true. It is worth remembering also that there is some compelling evidence that global growth is starting to broadly slow down and many people believe that future stock returns and, in general, returns on all investments will be lower. This is much much harder to estimate than bond returns though. Depending on who you believe, bond returns may actually look relatively better than the have in the past. Edit in response to comment: Corporate bond correlation with stocks is positive but generally not very strong (except for high-yield junk bonds) so while they don't offset stock volatility (negative correlation) they do help diversify a stock portfolio. Government bonds have essentially zero correlation so they don't really offset volatility as much as just not add any. Negative correlation assets are generally called insurance and you tend to have to pay for them. So there is no free lunch here. Assets that reduce risk cost money, assets that add little risk give less return and assets that are more risky tend to give more return in the long run but you can feel the pain. The mix that is right for you depends on a lot of things, but for many people that mix involves some corporate and government bonds. |
Military Separation | It's not usually a good idea to buy a house as an investment. Buy a house because you want the house, not for an investment. Your money will make more money invested somewhere other than a house. Additionally, based on talking about renting rooms to pay the mortgage and the GI bill, I assume you are planning on going to school and not working? I am not that familiar with VA loans, but I imagine they will require you show some form of income before they are willing to give you a loan. 14% returns over the long run are very good, but last year the market was up almost 30%, if you were only at 14% for last year you left quite a bit on the table. I would advise against individual stocks for investments except as a hobby. Put the majority of your investments into ETF's/low fee mutual funds and keep a smaller amount that you can afford to lose in stocks. |
Pay down on second mortage when underwater? | I'd split whatever cash flow you have between saving money and paying down the 20% loan. The fact that you are carrying an unrealized loss isn't really too relevant -- unless you have plans to walk away from the loan or go bankrupt, it doesn't really matter until you sell. You're either going to repay now or later. |
Pros and cons of investing in a cheaper vs expensive index funds that track the same index | As has been pointed out, one isn't cheaper than the other. One may have a lower price per share than the other, but that's not the same thing. Let's pretend that the total market valuation of all the stocks within the index was $10,000,000. (Look, I said let's pretend.) You want to invest $1,000. For the time being, let's also pretend that your purchasing 0.01% of all the stock won't affect prices anywhere. One company splits the index into 10,000 parts worth $1,000 each. The other splits the same index into 10,000,000 parts worth $1 each. Both track the underlying index perfectly. If you invest $1,000 with the first company, you get one part; if you invest $1,000 with the second, you get 1,000 parts. Ignoring spreads, transaction fees and the like, immediately after the purchase, both are worth exactly $1,000 to you. Now, suppose the index goes up 2%. The first company's shares of the index (of which you would have exactly one) are now worth $1,020 each, and the second company's shares of the index (of which you would have exactly 1,000) are worth $1.02 each. In each case, you now have index shares valued at $1,020 for a 2% increase ($1,020 / $1,000 = 1.02 = 102% of your original investment). As you can see, there is no reason to look at the price per share unless you have to buy in terms of whole shares, which is common in the stock market but not necessarily common at all in mutual funds. Because in this case, both funds track the same underlying index, there is no real reason to purchase one rather than the other because you believe they will perform differently. In an ideal world, the two will perform exactly equally. The way to compare the price of mutual funds is to look at the expense ratio. The lower the expense ratio is, the cheaper the fund is, and the less of your money is being eroded every day in fees. Unless you have some very good reason to do differently, that is how you should compare the price of any investment vehicles that track the same underlying commodity (in this case, the S&P 500). |
Why don't share prices of a company rise every other Friday when the company buys shares for its own employees? | Let's take an example: IBM has about 430,000 employees worldwide. Assume the average yearly salary is $80K (it's probably less, since a lot of jobs are offshore). If every employee took 10% of their pay as stock, that's $132 million every two weeks. But IBM's market capitalization is about $153 billion, so stock purchases would be less than 0.1% of that. |
Where to find out conversion ratio between General Motors bonds and new GM stock? | Looks like the result got decided recently, with a little uncertainty about exactly how much is the total allowed claims: http://www.wilmingtontrust.com/gmbondholders/plan_disclosure.html http://www.wilmingtontrust.com/gmbondholders/pdf/GUC_Trust_Agreement.pdf They give the following example: Accordingly, pursuant to Section 5.3 of the GUC Trust Agreement, a holder of a Disputed Claim in the Amount of $2,000,000 that was Allowed in the amount of $1,000,000 (A) as of the end of the first calendar quarter would receive: Corresponding to the Distribution to the Holders of Initial Allowed Claims: Corresponding to the First Quarter Distribution to Holders of Units: Total: |
Should I buy a home or rent in my situation? | You said 2 things that made me think you are one of the rare young couples barely making it but should attempt to buy rather than rent anyway.... Around my area, renting a place is about equivalent to just paying a monthly mortgage of a 30yr 3.5% APR of a home priced at around $250,500. and... Our ideal price range would be $100,000-160,000 with a 25-30yr mortgage at 3.5 - 5.4% The other answers suggesting that you should rent and the reasons given were excellent ones but because of those 2 points you made, this tells me that you would be willing to live in a much much more basic house if you owned rather than rented. Many renters rent rather than buy because they want a really nice place for their money and are willing to spend what it takes to get a nice place, but not you. If you buy, you would be willing to take a place worth half or even less than half what you would get if you rented. That tells me you might accept a place that needs a little work. Perhaps you and/or your fiancée have some skills needed to do a little of the work yourself. I hope you decide to buy rather than rent if you can swing it, and instead of taking a 2nd job, spend all your spare time working on your little investment. It's possible that by the time you're done fixing that house up some, through your own creative efforts or through the help you might get from your friends, you could end up with a $250,000 house, own it, and reap all the great benefits of owning rather than renting...or...better yet, sell that place for a nice profit, then turn around and buy the next one already fixed up with your newly acquired great credit to help you with the new mortgage, and ready for you to move in and enjoy. It's how my wife and I got started (only we didn't have the benefit of historically low interest rates) and if we can do it, I believe you can too. Here are a couple tips that might help out....1) Don't spend a lot of money to fix the place...try to find the time to do the simpler tasks yourself. If you don't have the skills, you can learn them on youtube or by picking the brains of all the great willing people working at your local discount home project superstore. 2) Cosmetics go a long way towards increasing the value of a house. a) needs paint and b) needs carpet but not a) major structural damage and b) needs roof. Regarding some of your other points... HOA, hopefully if you buy in a formal community, the HOA should be less than $200. If it's more than that, it might be harder to do as I suggest. Closing Costs, probably more like 4 - 5% Taxes, monthly if included in mortgage, normally quarterly or semi-annually if not Utilities...you're budgeting quite high for that. Depending on your area, you might only spend an average of $200/month, maybe even less. Insurance...see answer for taxes Regular maintenance, $1K a year might be about right but we better include irregular also, which comes up more often than you might think when owning, let's say $2 - $3 a year. Unexpected costs. Expect the unexpected but if the place needs a new roof or something big like that, then you didn't do your homework before buying. |
Buying a more expensive house as a tax shelter (larger interest deduction)? | Depending on the state you live in paying interest on a mortgage opens up other tax deduction options: Real estate taxes, Car tax, donations. See schedule A http://www.irs.gov/pub/irs-pdf/f1040sa.pdf The shocking bottom line is that it never works to your advantage in the short term. Owning your house: But there are big risks, ask anybody stuck with a house they can't sell. But it doesn't scale. You spend 10K more to save 2.5K in taxes. Buy because you want to, not to reduce taxes. |
Question about being a resident | This sort of involves personal finance, and sort of not. But it's an interesting question, so let's call it on topic? Short answer: yes. Long answer: it depends who's asking. If you're trying to qualify for in-state tuition, for example, you need to have been in state for a certain amount of time. For tax purposes, the first year you move to a new state you need to file part-time resident returns in your previous and current state of residency |
how much of foreign exchange (forex/fx) “deep liquidity” is really just unbacked leverage and what is the effect? | First it is worth noting the two sided nature of the contracts (long one currency/short a second) make leverage in currencies over a diverse set of clients generally less of a problem. In equities, since most margin investors are long "equities" making it more likely that large margin calls will all be made at the same time. Also, it's worth noting that high-frequency traders often highly levered make up a large portion of all volume in all liquid markets ~70% in equity markets for instance. Would you call that grossly artificial? What is that volume number really telling us anyway in that case? The major players holding long-term positions in the FX markets are large banks (non-investment arm), central banks and corporations and unlike equity markets which can nearly slow to a trickle currency markets need to keep trading just for many of those corporations/banks to do business. This kind of depth allows these brokers to even consider offering 400-to-1 leverage. I'm not suggesting that it is a good idea for these brokers, but the liquidity in currency markets is much deeper than their costumers. |
Should I invest in the world's strongest currency instead of my home currency? | The best thing is to diversify across multiple currencies. USD and EUR seem reliable. But not 100% reliable to keep all your investments in this types of currencies. Invest part of your savings in USD, part - in EUR, and part in your home country's currency. Apart from investing I recommend you to have certain sum in cash and certain on your bank account. |
TD Webbroker.ca did not execute my limit sell order even though my stock went .02 over limit | What happened here is pretty obvious: You were trying to sell 2000 shares and apparently didn't mark your order to permit partial execution. While they had a buyer at 94.66 they didn't want 2000 shares. Thus your order went unfilled. |
Are quarterly earnings released first via a press release on the investor website, via conference call, or does it vary by company? | the financial information is generally filed via SEDAR (Canada) or SEC (US) before the conference call with the investment community. This can take before either before the market opens or after the market closes. The information is generally distribute to the various newswire service and company website at the same time the filing is made with SEDAR/SEC. |
Are stock index fund likely to keep being a reliable long-term investment option? | When you are putting your money in an index fund, you are not betting your performance against other asset classes but rather against competing investments withing the SAME asset class. The index fund always wins due to two factors: diversity, and lower cost. The lower cost attribute is essentially where you get your performance edge over the longer run. That is why if you look at the universe of mutual funds (where you get your diversification), very few will have beaten the index, assuming they have survived. -Ralph Winters |
Pay off debt with RRSPs, or refinance and roll into Mortgage? | I would personally look at consolidating your debt at a lower interest rate by refinancing your mortgage. I would leave any retirement funds alone unless it was absolutely necessary to touch it with no other avenues available. However, once you have consolidated your debt into the mortgage I would pay more than the minimum amount so that you don't take too long to pay it off. I would put about 50% of the freed-up cash flow back into the repayments, that way you will be paying more debt off quicker and you will have additional cash flow to help your monthly budget. Another good point would be to go through your monthly budget to see if there is any expenses you could reduce or eliminate. |
What are institutional investors? | FINRA defines institutional investors as: Institutional investors include banks, savings and loan associations, insurance companies, registered investment companies, registered investment advisors, a person or entity with assets of at least $50 million, government entities, employee benefit plans and qualified plans with at least 100 participants, FINRA member firms and registered persons, and a person acting solely on behalf of an institutional investor. From: http://www.finra.org/industry/issues/faq-advertising Based on Rules 2210(a)(4) and 4512(c). Institutional investors are expected to understand market risks and as a result, disclosure requirements are much lower (perhaps no SEC filings and no prospectus). |
Why are options created? | At my soon to be legendary Stock Options Cafe, I recently wrote an article "Betting On Apple at 9 to 2." It described a trade in which a 35% move in a stock over a fixed time (2 years) would result in a 354% gain in one's bet. In this case, the options serve to create remarkable leverage for speculators. In general, option help provide liquidity and extend the nature of the risk/reward curve. There are option trades that range from conservative (e.g. a 'covered call') to wildly speculative, as the one I described above. |
Why does ExxonMobil's balance sheet show more liabilities than assets? | Even assuming you were reading the balance sheet correctly it means nothing. What banks mostly care about is cash flow. Do they have enough extra money to make the payments on whatever they borrow? I have never had a credit card company ask me about assets--they don't care. They care about income with which to pay the credit card bill. Have a solid record of paying your bills and enough income to pay back what you are trying to borrow and you'll have an excellent credit rating no matter what your net worth. Whether you are one person or a megacorporation makes no difference. |
Are BIC and SWIFT code the same things? | IBAN -> is International Bank Account Number. The number is constructed in such a way that it uniquely identifies your account in the world. I.e. it has a country in it, Bank (and branch) and the actual account number. This is an international standard adopted by the EU, Australia and NZ. Going forward it would be sufficient to just quote the IBAN for payment without any other details. BIC, SWIFT Code, SWIFT BIC, SWIFT ID [all mean the same] is a Bank Identifier Code [More correctly Business Identifier Code] that is again an International standard and used on all International payments. The SWIFT BIC is constructed as Hence SWIFT BIC can be 8 Chars or 11 Chars. The additional 3 Chars help bank identify the Branch where the account is held and where the payment needs to be made. So LOYDGB2L is the main head office If your branch is, say, in Canary Wharf, the SWIFT BIC would be LOYDGB21 [21-> Canary Wharf] with a 3 digit branch added. |
What do I need as documentation in order to pay taxes in the Netherlands? | The Dutch tax office is pretty decent, although slightly overburdened. Don't expect a lot of help, but they're not generally known for making a lot of problems. Digital copies are fine, for instance. They will send you your first VAT notice. You probably would have known if your company would have been incorporated, so I'll assume you're just trading as a natural person. That means you still have to file VAT returns, but the business income is just filed annually as "other income". For the VAT part, you'll need to invoice your customers. Keep a copy of those invoices for your own bookkeeping, and keep track of the matching customer payments. Together these form the chief evidence of your VAT obligation. You also have a VAT deduction from your purchases (it's a Value-Added Tax, after all). Again, keep receipts. The usual VAT period is 3 months, so you'd pay VAT 4 times a year. But if you would pay less than 1883 euro, you might not need to pay at all and just need to file annually The income part is easy with the receipts you had for VAT purposes anyway. Dutch Tax Office, VAT, in English |
How to get a grip on finance? | I think this question is perfectly on topic, and probably has been asked and answered many times. However, I cannot help myself. Here are some basics however: Personal Finance is not only about math. As a guy who "took vector calculus just for fun", I have learned that superior math skills do not translate into superior net worth. Personal finance is about 50% behavior. Take a look at the housing crisis, car loans, or payday lenders and you will understand that the desire to be accepted by others often trumps the math surrounding a transaction. Outline your goals What is it that you want in life? A pile of money or to retire early? What does your business look like? How much cash will you need? Do you want to own a ton of rental properties? How does all this happen (set intermediate goals). Then get on a budget A budget is a plan to spend your money in advance. Stick to it. From there you can see how much money you have to implement various goals. Are your goals to aggressive? This is really important as people have a tendency to spend more money then they have. Often times when people receive a bonus at work, they spend that one bonus on two or three times over. A budget will prevent this from happening. Get an Emergency Fund Without an emergency fund, you be subject to the financial whims of people involved in your own life and that of the broader marketplace. Once you have one, you are free to invest with impunity and have less stress in a world that deals out plenty. Bad things will happen to you financially, protect against them. The best first investments are simple: Invest in yourself. Find a way to make a very healthy income with upward mobility. Also get out and stay out of debt. These things are not sexy, but they pay off in the long run. The next best investment is also simple: Index funds. These become the bench mark for all other investments. If you do not stand a good chance of beating the S&P 500 index fund, why bother? Just dump the money in the fund and sleep well at night. |
How long do credit cards keep working after you disappear? | how can I keep my website running for posterity after I die? If this is the real problem, incorporate a non-profit corporation or have a lawyer set up a foundation. Those will survive after your death and their bank accounts with them. You might even find someone willing to do this for you. It sounds like a neat business. Collect the ad revenue, charge a fee, pay the web hosting. Heck, this is a decent deal for a web host. Provide the web hosting; collect the ad revenue. |
Using P/E Ratio of an ETF to decide on asset mix | P/E is a useful tool for evaluating the price of a company, but only in comparison to companies in similar industries, especially for industries with well-defined cash flows. For example, if you compared Consolidated Edison (NYSE:ED) to Hawaiian Electric (NYSE:HE), you'll notice that HE has a significantly higher PE. All things being equal, that means that HE may be overpriced in comparison to ED. As an investor, you need to investigate further to determine whether that is true. HE is unique in that it is a utility that also operates a bank, so you need to take that into account. You need to think about what your goal is when you say that you are a "conservative" investor and look at the big picture, not a magic number. If conservative to you means capital preservation, you need to ensure that you are in investments that are diversified and appropriate. Given the interest rate situation in 2011, that means your bonds holding need to be in short-duration, high-quality securities. Equities should be weighted towards large cap, with smaller holdings of international or commodity-associated funds. Consider a target-date or blended fund like one of the Vanguard "Life Strategy" funds. |
Is having a 'startup fund' a good idea? | Saving money for the future is a good thing. Whether spending those savings on a business venture makes sense, will depend on a few factors, including: (1) How much money you need that business to make [ie: will you be quitting your job and relying on the business for your sole income? Or will this just be a hobby you make some pocket change from?] (2) How much the money the business needs up front [some businesses, like simple web design consulting, might have effectively $0 in cash startup costs, where starting a franchise restaurant might cost you $500k-$1M on day 1] (3) How risky it is [the general stat is that something like 50% of all new businesses fail in their first year, and I think for restaurants that number is often given as 75%+] But if you don't have a business idea yet, and save for one in the future but never get that 'perfect idea', the good news is that you've saved a bunch of money that you can instead use for retirement, or whatever other financial goals you have. So it's not the saving for a new business that is risky, it's the spending. Part of good personal financial management is making financial goals, tracking your progress to those goals, and changing them as needed. In a simpler case, many people want to own their own home - this is a common financial goal, just like early retirement, or starting your own business, or paying for your kids' college education. All those goals are helped by saving money, so your job as someone mindful of personal finances, is to prioritize those goals in accordance to what is important for you. |
Is Pension Benefit Information (aboutmyletter.com) legitimate? | I have no personal knowledge of this company; I've only looked over what I found on the web. Overall, my judgement is that Pension Benefit Information, Inc. of San Rafael, CA is likely legitimate and aboutmyletter.com is one of two sites run by them (the other being pbinfo.com). These two sites are registered to Pension Benefit Information, Inc. (aboutmyletter uses Network Solutions privacy service but gives the company name; pbinfo uses their name and San Rafael address.) They are in the BBB. The president (of the 8 employee Co.), Susan McDonald, has testified (PDF on .gov site) before Congress about business uses of SSNs. They made a (very schlocky) video, which has an interview with McDonald after several canned, generic, "impressive" introductions. I found the interview convincing of a person actually running a small, real business of this type. A short version is on their site, long version here. There are some queries about their legitimacy online (like this one), but I found nothing negative on them, and one somewhat positive. One article talks about the suspicions they run into when contacting participants, and has some advice. Also, scammers are unlikely to pay the U.S. Postal Service money to send paper letters. So what are the dangers? Money or identity. So don't pay them any fees (now or later), especially since it looks like their clients (retirement funds) pay on the other side. As for identity information: What's in the letter? Don't they show that they already know a bunch about you? Old employer? Maybe the last four digits of your SSN? Your address (if this is not the forwarded-by-IRS type of contact letter). Other things, maybe? What information would you be giving up if you did respond to them fully? You could try contacting your old company directly (mentioning PBI, Inc,), although on their website PBI says you'll have to go through them. (They probably get paid for each successful contact, and deserve it.) Still, responding through mail or telephone to PBI seems like the reasonable thing to do. |
What are the advantages of a Swiss bank account? | For an American it nearly impossible to open a Swiss bank account. Even a Swiss person want to open a bank account, we have to fill out a document, which asks us if we have a greencard or other relationships with the united states. Some Swiss banks have transferred the money of Americans to Singapore to protect their clients. So you see, the Swiss banks do very much for their clients. And yes, we don't ask very much about money ;) And we are a politically neutral country, but we like the United States more than Russia and of course we have enemies, like the ISIS |
I started some small businesses but need help figuring out taxes. Should I hire a CPA? | The only professional designations for people allowed to provide tax advice are Attorney, EA or CPA. Attorney and CPA must be licensed in the State they practice in, EA's are licensed by the Federal government. Tax preparers are not allowed to provide any tax advice, unless they hold any of these designations. They are only allowed to prepare your tax forms for you. So no, tax preparer is not a solution. Yes, you need to talk to a tax adviser (EA/CPA licensed in your State, you probably don't need a tax attorney). You should do that before you start earning money - so that you can plan properly and understand what expenses you can incur and how they're handled with regards to your future income tax payments. You might also want to consider a bookkeeping service (many EA/CPA offices offer the bookkeeping as well). But that you can also do yourself, not all that complicated if you don't have tons of transactions and accounts. |
If accepting more than $10K in cash for a used boat, should I worry about counterfeiting? | I'd not do business under these terms. A bill of sale needs a signature, right? Your signature is your word, and your word is your bond. I wouldn't participate in such a fraud, nor would I accept this sum of cash, who knows its origins? |
Must ETF companies match an investor's amount invested in an ETF? | The point here is actually about banks, or is in reference to banks. They expect you know how a savings account at a bank works, but not mutual funds, and so are trying to dispel an erroneous notion that you might have -- that the CBIC will insure your investment in the fund. Banks work by taking in deposits and lending that money out via mortgages. The mortgages can last up to 30 years, but the deposits are "on demand". Which means you can pull your money out at any time. See the problem? They're maintaining a fiction that that money is there, safe and sound in the bank vault, ready to be returned whenever you want it, when in fact it's been loaned out. And can't be called back quickly, either. They know only a little bit of that money will be "demanded" by depositors at any given time, so they keep a percentage called a "reserve" to satisfy that, er, demand. The rest, again, is loaned out. Gone. And usually that works out just fine. Except sometimes it doesn't, when people get scared they might not get their money back, and they all go to the bank at the same time to demand their on-demand deposits back. This is called a "run on the bank", and when that happens, the bank "fails". 'Cause it ain't got the money. What's failing, in fact, is the fiction that your money is there whenever you want it. And that's really bad, because when that happens to you at your bank, your friends the customers of other banks start worrying about their money, and run on their banks, which fail, which cause more people to worry and try to get their cash out, lather, rinse repeat, until the whole economy crashes. See -- The Great Depression. So, various governments introduced "Deposit Insurance", where the government will step in with the cash, so when you panic and pull all your money out of the bank, you can go home happy, cash in hand, and don't freak all your friends out. Therefore, the fear that your money might not really be there is assuaged, and it doesn't spread like a mental contagion. Everyone can comfortably go back to believing the fiction, and the economy goes back to merrily chugging along. Meanwhile, with mutual funds & ETFs, everyone understands the money you put in them is invested and not sitting in a gigantic vault, and so there's no need for government insurance to maintain the fiction. And that's the point they're trying to make. Poorly, I might add, where their wording is concerned. |
What happens if my order exceeds the bid or ask sizes? | You should check with your broker. I asked my broker a similar question just 2 weeks ago. With their market orders they will be filled within 3 points from the current market bid/ask. If there is any remaining it will be placed as a limit order at 3 points away from the bid/ask price. For example, if the current ask is 100 @ $1.00 followed by 500 @ $1.01, 300 @ $1.02 and 100 @ $1.03; if you were to place a buy market order for 1000 shares you would get 100 filled at $1.00, 500 filled at $1.01, 300 filled at $1.02 and 100 filled at $1.03. If, on the other hand, you were to place a buy market order for 2000 shares you would get 100 filled at $1.00, 500 filled at $1.01, 300 filled at $1.02 and 100 filled at $1.03, with the remaining 1000 of your order being placed as a limit order at $1.03. Again, check with your broker, as they may be different in how they treat their market orders. |
Is Amazon's offer of a $50 gift card a scam? | a free $50 looks too good to be true. As others already pointed out, these offers are common to many cards that want you to build loyalty towards a particular company (e.g. airlines cards give lots of mileage for a decent initial spend). Should I get this card for the $50? Why and/or why not? How much do you spend on Amazon, or are planning to do so in future? This offer has been around for ages (earlier they used to offer much smaller amounts of $20 for signing up) and you never saw it. So probably, you won't be really using the site frequently. In that case, its just a matter of whether $50 is worth the hassle for you to sign up and then later cancel (if you don't want to manage another new card). The hit to credit score is likely to be minimal unless you do such offers often. As such, for a person who rarely buys on Amazon I wouldn't advise you to sign up for this card, there are better rewards cards that are not as tied to a particular site (such as Chase Freedom, Discover etc.) If however, you are a regular shopper but just never noticed this prompt earlier; then it is worthwhile to get this - or even consider the Prime version, which you will get or be automatically upgraded to if the account has Prime membership. That gives 5% back instead of 3% on Amazon. |
Is it bad etiquette to use a credit or debit card to pay for single figure amounts at the POS | Generally, I consider it bad etiquette to inconvenience others. I would recommend cash for small purchases. Try to offer as close to the required amount as possible. Don't pay with several dollars worth of change if you can avoid it. You shouldn't need to carry a lot of cash. When you do don't make it obvious. |
How is not paying off mortgage better in normal circumstances? | Lets do the math, using your numbers. We start off with $100K, a desire to buy a house and invest, and 30 years to do it. Scenario #1 We buy a house for $100K mortgage at 5% interest over 30 years. Monthly payment ends up being $536.82/month. We then take the $100K we still have and invest it in stocks, earning an average of 9% annually and paying 15% taxes. Scenario #2 We buy a house for our $100K cash, and then, every month, we invest the $536.82 we would have paid for the mortgage. Again, investments make 9% annually long term, and we pay 15% taxes. How would it look in 30 years? Scenario #1 Results: 30 years later we would have a paid off house and $912,895 in investments Scenario #2 Results: 30 years later we would have a paid off house and $712,745 in investments Conclusion: NOT paying off your mortgage early results in an additional $200,120 in networth after 30 years. That's 28% more. Therefore, not paying off your mortgage is the superior scenario. Caveats/Notes/Things to consider Play with the numbers yourself: |
what are the downsides of rolling credit card debt in this fashion | Awesome, you are a math guy. Very good for you. In theory, what you are proposing, should work out great as the math works out great. However have you taken a economics or finance coursework? The math that they do in these class will leave a most math guys uncomfortable with the imprecision even when one is comfortable with chaos theory. Personal finance is worse. If it were about math things like reverse mortgages, payday lenders, and advances on one income tax returns would not exist. The risk derived from the situation you describe is one born out of behavior. Sometimes it is beyond control of the person attempting your scheme. Suppose one of these happen: In my opinion the market is risky enough without borrowing money in order to invest. Its one thing to not pay extra principle to a mortgage in order to put that money in play in the market, it is another thing to do what you are suggesting. While their may be late fees associated with a mortgage payment, a fixed rate mortgage will not change if you late on payment(s). On these balance transfer CC schemes they will jack your rate up for any excuse possible. I read an article that the most common way to end up with a 23%+ credit card was to start out with a 0% balance transfer. One thing that is often overlooked is that the transfer fee paid jacks up the stated rate of the card. In the end, get out of consumer debt, have an emergency fund, then start investing. Building a firm financial foundation is the best way to go about it. Without one it will be difficult to make headway. With one your net worth will increase faster then you imagined possible. |
What is the difference between a bad/bounced check and insufficient funds? | There is no difference they are both insufficient in 1 form or another.Bad slang for any check the bank won't cash, for any reason, Ie. insf. unreadable amount, acct or routing number, the acct.has been closed, or you didn't write the check(fraud). Bounced is slang for bank returned check unpaid.I wrote a bad check but it didn't bounce.The check is still insufficient but the bank didn't return it. $500.00 is the felony threshold in okla. less than $500.00 is a misdemeanor. but insf. fees ranging from ($25.00 to $50.00 vendor returned check fee + amount of check) x (bank insf fees of $25 to $50)is an effective deterent. |
How does revenue shared with someone else go into my tax return in Canada? | Generally, report your $150,000. If/when the the tax collectors notice the anomaly, they'll attempt to contact you to remedy it. I can't speak for Canada, but in the US, it's pretty orderly. The IRS requests additional information or proof and only open it up into a full blown audit if the suspect wrongdoing. In your case, you could show a business agreement detailing the revenue split proving you correctly reported. This is only for your consideration. I strongly recommending finding and keeping a professional tax advisor. |
How can I improve my credit score if I am not paying bills or rent? | If credit scoring works in the UK like it does in the US, then I think the fact that you own+use a credit card and pay off your everyday expenses will give you perfectly good credit. Just keep doing what you're doing. I have seen people in the United States with very high credit scores based solely upon owning & occasionally using a credit card, paid in full and on time every month. |
Which credit card is friendliest to merchants? | Cash is king. PIN-based debit transactions are cheap. In terms of credit cards, a regular (ie. not a gold card) with no rewards has the lowest rates. Bigger merchants with lots of card volume likely have better deals that make the differences less pronounced. |
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