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Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | Will I be liable for taxes if I work for my co. in India for 3 months while I am with my husband in UK | The finance team from your company should be able to advise you. From what I understand you are Indian Citizen for Tax purposes. Any income you receive globally is taxable in India. In this specific case you are still having a Employee relationship with your employer and as such the place of work does not matter. You a... |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | Will I be liable for taxes if I work for my co. in India for 3 months while I am with my husband in UK | Generally all the countries have similar arrangement regarding Income Tax, if you live in the UK for more than you stay in India for a given year then the Indian authorities won't be able to tax you but you might come under the UK Tax Law. |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | Will I be liable for taxes if I work for my co. in India for 3 months while I am with my husband in UK | For information about the UK situation, check the government website at http://www.hmrc.gov.uk/incometax/tax-arrive-uk.htm It all depends on the time. If I read it right (but you should check yourself) you can stay almost six months at a time, but at most 3 months on average over 4 years. Above this limit, you should ... |
Share your insights or perspective on the financial matter presented in the input. | Buying insurance (extended warranty or guarantee) on everyday goods / appliances? | Generally, a polite decline. However, I have dealt with sales people who take first refusal as a "test" response, and decide to go into the details anyway. The longer they talk the more robust my responses. See this Telegraph article that discusses why their experts think it's a ripoff, and why you should check your cr... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | Buying insurance (extended warranty or guarantee) on everyday goods / appliances? | IMO it's usually not worth it and here's why. There's a statistical distribution of how likely a unit may fail depending on its age. Probability is high for a short period after the unit comes into use because there are parts that were not thoroughly tested and manufacturing defects. Then all those defective parts fail... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | Buying insurance (extended warranty or guarantee) on everyday goods / appliances? | On most of the consumer electronics it would not make much sense to get Insurance. Mostly these are not priced right [are typically priced higher]. IE there is no study to arrive at equivalent claim rates as in motor vehicle. Further on most of the items there is adequate manufacturing warranty to take care of initial ... |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | Buying insurance (extended warranty or guarantee) on everyday goods / appliances? | I politely decline. Insurance is there to protect me against catastrophic financial loss (huge medical bills, owing a mortgage on a house that burned down, etc.) not a way to game the system and pay for routine expenses or repairs. |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | Buying insurance (extended warranty or guarantee) on everyday goods / appliances? | I decline politely. The cost of the insurance policy has two components: The actual cost of a likely repair + profit. If I set aside the cost of a likely repair myself, then I get to keep the profit. If the item doesn't break, I get to keep the "repair" money too :) |
Share your insights or perspective on the financial matter presented in the input. | Buying insurance (extended warranty or guarantee) on everyday goods / appliances? | Most of the consumer products that you buy at retail these days are commodity priced, and have been for a long time. Margins are thin, so if there are retail salespeople milling about, their compensation isn't coming from the TV or computer with a 6% gross margin. It comes from the extended warranty programs (which are... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | Buying insurance (extended warranty or guarantee) on everyday goods / appliances? | I usually say "no thank you", but if the salesperson gets pushy I say "if I need insurance, I guess I won't buy the product because I only want to buy quality that will last a good long while" I have never actually walked away from a purchase because I generally research these things ahead of time, but I think I mean i... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | Buying insurance (extended warranty or guarantee) on everyday goods / appliances? | One important issue that has yet to be covered is the cost (to you) in terms of paperwork, lost time, and phone calls that you have to make to claim the insurance. Such insurance claims often are very low priority on their customer service queues (for obvious reasons, since they have already made the sale). Therefore,... |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | Buy tires and keep car for 12-36 months, or replace car now? | If the car is in otherwise good shape, it's always less expensive to keep it longer. Think of it this way: you have to buy new tires no matter what. It's just a question of whether or not those new tires are attached to a new car or your current car. |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | Buy tires and keep car for 12-36 months, or replace car now? | I don't see how anyone could give you a hard-and-fast formula, unless they know where to get some applicable statistics. Because several factors here are not a straight calculation. If you don't replace the tires but keeping driving the car, what is the increased probability that you will get into an accident because o... |
Share your insights or perspective on the financial matter presented in the input. | Buy tires and keep car for 12-36 months, or replace car now? | I tend to agree with Rocky's answer. However it sounds like you want to look at this from the numbers side of things. So let's consider some numbers: I'm assuming you have the money to buy the new car available as cash in hand, and that if you don't buy the car, you'll invest it reasonably. So if you buy the new car... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | Buy tires and keep car for 12-36 months, or replace car now? | It depends how detailed you want to get in your calculation, but fundamentally, 1K < 25K. On a very basic level, divide the cost (less what you sell it for) by the time you'll have the car for. If you junk it, $1K/12 month = $83/month to buy tires to have a car for a year. If you sell it for $1K, then it become $0/m... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | Buy tires and keep car for 12-36 months, or replace car now? | Would you buy this used car, in its current condition but with new tires, for the price of the tires? If so, buy the tires. |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | Buy tires and keep car for 12-36 months, or replace car now? | New tires will increase the resale value of the car; while not by the full cost of the tires, it will not be entirely a sunk cost. You'd need to factor that in and find out how much the new tires increase the resale value of the car to determine how much they would truly cost you. However, I suspect they would cost yo... |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | Buy tires and keep car for 12-36 months, or replace car now? | There are a few factors I like to consider when I'm reasoning financially over my households cars. How many KMs will the car travel each year because I like to factor in how often tires will need to be changed, how much tires for my models cost as well as how gas efficient they are. Knowing how much the car is driven a... |
Share your insights or perspective on the financial matter presented in the input. | Buy tires and keep car for 12-36 months, or replace car now? | If You use the car regulary, I don't think that driving on the bald tires for 3 years is a reasonable option. Have You considered buying used tires? Those will be cheaper and will last till You get to replace the car. |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | Investment strategy for retired couple | The safest investment in the United States is Treasures. The Federal Reserve just increased the short term rate for the first time in about seven years. But the banks are under no obligation to increase the rate they pay. So you (or rather they) can loan money directly to the United States Government by buying Bills, N... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | Investment strategy for retired couple | You need to have them consult with a financial adviser that has a focus on issues for seniors. This is because they are beyond the saving for retirement phase and are now in the making-their-money-last phase. They also have issues related to health insurance, IRA RMDs, long term care insurance. The adviser will need to... |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | Investment strategy for retired couple | After retirement nobody want to get low on cash. So, the best way to stay safe is to make some investments. Compare the saving with regular expenses and invest the rest. You can put some money in short-term reserves such as bank accounts, market funds, and deposit certificates. You will not be able to make much money o... |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | Calculating required rate of return for an income-generating savings account | Line one shows your 1M, a return with a given rate, and year end withdrawal starting at 25,000. So Line 2 starts with that balance, applies the rate again, and shows the higher withdrawal, by 3%/yr. In Column one, I show the cumulative effect of the 3% inflation, and the last number in this column is the final balanc... |
Share your insights or perspective on the financial matter presented in the input. | Can i short securities in a normal(non-margin) account | The broker will charge borrowing fees and sometimes a charge called "hard-to-borrow fee". Other than that you will earn interest on the cash you get from selling the stocks, but you will have to pay dividends. This is because someone else (the party you sold the stocks off to) will now get the dividends and the party ... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | Can i short securities in a normal(non-margin) account | Exact rules may be different depending on the size of the investor, the specific broker, and the country. For both the US and Canada, short sales occur only through one's margin account. And shares that are borrowed for shorting only come from a margin account. Shares held in a cash account are not available for shor... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | Can someone recommend a book that discusses the differences between types of financial statements? | I would recommend "How to Read a Financial Report : For Managers, Entrepreneurs, Lenders, Lawyers, and Investors" by John A. Tracy for the following reasons: I also think the book would bridge the gap nicely between a broad understanding of finance and a more serious technical know-how. |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | Can someone recommend a book that discusses the differences between types of financial statements? | Why Stocks go up and Down by William H Pike is a great source if you are looking to interpret statements for stock analysis. This book really starts from the beginning and clearly explains with a running example of a fake company. |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | Life insurance policy | From the details you have given it looks like you have "Unit Linked" insurance policy. In such policies a part of the premium goes towards the "Insurance", the balance is invested into "Mutual Funds / stock Market". It is generally not advisable to have "Unit Linked" policy compared to pure "Term" policy. Generally the... |
Share your insights or perspective on the financial matter presented in the input. | Life insurance policy | First off, I would question why do you need a LI policy? While you may be single are you supporting anyone? If not, and you have some money saved to cover a funeral; or, your next of kin would be able to pay for final expenses then you probably don't have a need. In, general, LI is a bad investment vehicle. I do n... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | Life insurance policy | I would like to add to the answer provided by Dheer. I think under some ULIPs you need not pay premium after 3 years and you can take the money back after 5 years (something like that, read your policy statement of course). Since the money is invested in Stock markets and since generally people say the longer money sta... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | What happen in this selling call option scenario | But what happen if the stock price went high and then go down near expiry date? When you hold a short (sold) call option position that has an underlying price that is increasing, what will happen (in general) is that your net margin requirements will increase day by day. Thus, you will be required to put up more money... |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | Are there any disadvantages to DHA Investment Properties? | A quick online search for "disadvantages of defence housing australia investment properties" turns up a several articles that list a few possible disadvantages. I can't vouch for these personally because I'm not familiar with the Australian rental market, but they may all be things to keep in mind. I quote verbatim whe... |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | Are there any disadvantages to DHA Investment Properties? | I think the strongest reason against DHA purchases (I don't consider them investments) is points 3 and 5 mentioned above. The resale market is only to other investors that are convinced its a good investment.If you can't sell to owner occupiers, you've just removed the MAJORITY of your potential pool of people to resel... |
Share your insights or perspective on the financial matter presented in the input. | Are there any disadvantages to DHA Investment Properties? | Along with the above reasons, the fact that DHA are under investigation by the Federal Police, should be a red flag to any potential investor. The Federal Police aren't called in over parking fines. The rules that are in place for effective and appropriate management appear to have been compromised. I would like to se... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | Are there any disadvantages to DHA Investment Properties? | Well, I am an investor/ Lessor under DHA properties. Oflate, DHA lost it identity as a Govt agency and try to imitate a worst (not the best) real eastate agent. Every year rental valuation is a drama or waste of time and money to lessor. They pull down the rent by 10 to 22% and ask for a secondary valuation for no reas... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | Why have candlestick charts overlaps? | Remember that prices refer to discrete events in the market - trades - it is easily possible that the highest price for a trade in the next period is lower than the highest price in the current one as someone in the current period may be willing to pay more in this period than anyone in the next. The ending price of a ... |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | Why have candlestick charts overlaps? | The market is simply gapping at these times, some news may have come out that makes the market gap on the open from its previous close. Being FX, the market in one country might be trading and then at the start of the hour trading in a different country may commence, causing a small gap in price. Generally many things ... |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | How to get a down payment for your next home? Use current home as the down payment on the new one? | This is of course a perfectly normal thing to happen. People trade up to a bigger house every day. When you've found a bigger house you want to move to and a buyer for your existing one, you arrange 'closing dates' for both i.e. the date on which the sale actually happens. Usually you make them very close, either on th... |
Share your insights or perspective on the financial matter presented in the input. | How to get a down payment for your next home? Use current home as the down payment on the new one? | What you're looking at is something called "Bridge-Financing". Essentially, it allows you to borrow your down-payment from the bank, using your old home as collateral. The interest rate varies, but if you get the bridge from the same institution as your new mortgage, they will often be a bit flexible. You take poss... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | How to get a down payment for your next home? Use current home as the down payment on the new one? | I know you've clarified that you're in the US, but in case anyone else comes across this question: in the UK this is completely normal (including if you still have outstanding mortgage on your current home). We end up with long "chains" of buyers and sellers all completing / moving on the same day so that the proceeds ... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | Should retirement fund be equal to amount of money needed for financial independence? | It depends what you mean. Finance Independence and Retirement Early (FI/RE) are two overlapping ideas. If you plan to retire early and spend the same amount of money every year (adjusted for inflation), then you need to save twenty-times your yearly spending to satisfy the 4% Safe Withdrawal rule of thumb. Carefully no... |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | Should retirement fund be equal to amount of money needed for financial independence? | I want to know ideally how much should a person save for retirement funds? A person should save enough such that your total retirement resources will equal the amount you personally need for a comfortable retirement at the point in time when the person desires to retire. If you want to retire at 40, you may need to s... |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | Should I put more money down on one property and pay it off sooner or hold on to the cash? | I'm a little confused on the use of the property today. Is this place going to be a personal residence for you for now and become a rental later (after the mortgage is paid off)? It does make a difference. If you can buy the house and a 100% LTV loan would cost less than 125% of comparable rent ... then buy the house... |
Share your insights or perspective on the financial matter presented in the input. | Should I put more money down on one property and pay it off sooner or hold on to the cash? | I'd suggest taking all the money you have saved up and putting in a mutual fund and hold off on buying a rental property until you can buy it outright. I know it seems like this will take forever, but it has a HUGE advantage: I know it seems like it will take forever to save up the money to buy a property for cash, bu... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | Should I put more money down on one property and pay it off sooner or hold on to the cash? | I would go with the 2nd option (put down as little as possible) with a small caveat: avoid the mortgage insurance if you can and put down 20%. Holding your rental property(ies)'s mortgage has some benefits: You can write off the mortgage interest. In Canada you cannot write off the mortgage interest from your primary ... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | Should I put more money down on one property and pay it off sooner or hold on to the cash? | My figuring (and I'm not an expert here, but I think this is basic math) is: Let's say you had a windfall of $1000 extra dollars today that you could either: a. Use to pay down your mortgage b. Put into some kind of equity mutual fund Maybe you have 20 years left on your mortgage. So your return on investment with cho... |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | Should I put more money down on one property and pay it off sooner or hold on to the cash? | I would go with option B. That is safer, as it would leave you with more options, in case of an unexpected job loss or an emergency. |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | Why YTM is higher than current yield in discount bond | Say you buy a bond that currently costs $950, and matures in one year, at $1000 face value. It has one coupon ($50 interest payment) left. The coupon, $50, is 50/950 or 5.26%, but you get the face value, $1000, for an additional $50 return. This is why the yield to maturity is higher than current yield. If the maturity... |
Share your insights or perspective on the financial matter presented in the input. | Calculate Future Value with Recurring Deposits | Using the following values: The formula for the future value of an annuity due is d*(((1 + i)^t - 1)/i)*(1 + i) See Calculating The Present And Future Value Of Annuities In an annuity due, a deposit is made at the beginning of a period and the interest is received at the end of the period. This is in contrast to an or... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | Calculate Future Value with Recurring Deposits | Let's break this into two parts, the future value of the initial deposit, and the future value of the payments: D(1 + i)n For the future value of the payments A((1+i)n-1) / i) Adding those two formulas together will give you the amount of money that should be in your account at the end. Remember to make the appropriat... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | If a put seller closes early, what happens to the buyer? | The original option writer (seller) can close his short position in the contracts he wrote by purchasing back matching contracts (i.e. contracts with the same terms: underlying, option type, strike price, expiration date) from any others who hold long positions, or else who write new matching contract instances. Rather... |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | If a put seller closes early, what happens to the buyer? | You're assuming options traded on the open market. To close open positions, a seller buys them back on the open market. If there's little on offer, this will drive the price up. |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | If a put seller closes early, what happens to the buyer? | An option is freely tradable, and all options (of the same kind) are equal. If your position is 0 and you sell 1 option, your new position in that option is -1. If the counterparty to your trade buys or sells more options to close, open, or even reopen their position afterwards, that doesn't matter to your position at ... |
Share your insights or perspective on the financial matter presented in the input. | Is Investments by Bodie just an expanded version of Essentials of Investments? | Reading the descriptions on Amazon.com it appears Investments is a graduate text and Elements of Investments is the undergraduate version of the text. |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | Is Investments by Bodie just an expanded version of Essentials of Investments? | They are actually both undergraduate texts; however, Investments is FAR more complex. Essentials of Investments really waters down the statistical and mathematical notation while Investments does not. Investments also has an entire section (4-5 chapters) called options, futures, and other derivatives while Essential... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | What headaches will I have switching from Quicken to GnuCash? | I have not used Quicken; I've used GnuCash exclusively. It feels a bit rough with the UI: Balancing that, the data is stored in a gzip-compressed xml file. The compression is also optional, so you can save it as a plain xml file. This means that you have some hope of recovery if you wind up with a corrupted file. (An... |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | What headaches will I have switching from Quicken to GnuCash? | The best way to answer this question is to try. GnuCash is free, so setting it up and giving it a go shouldn't be too hard. After all, what really matters is how helpful the program is for your purposes. One aspect of personal finance that stops me from jumping to GnuCash/KMyMoney/MoneyDance is the ability to download ... |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | What headaches will I have switching from Quicken to GnuCash? | It's been a long time since I've used MS Money and/or Quickbooks (never Quicken), but I've used GnuCash over the past year or so. It works, but it does suffer from some usability problems. Some of the UI is clunky. Data entry sequences are a little harder than they should be. Reports could be a little prettier. But ove... |
Share your insights or perspective on the financial matter presented in the input. | What headaches will I have switching from Quicken to GnuCash? | Instead of gnucash i suggest you to use kmymoney. It's easier |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | The doctor didn't charge the health insurance in time, am I liable? | This has a straightforward answer. It's likely that your doctor and the hospital have no responsibility to ensure that your insurance claim is filed in a timely manner. They bill you whether you or they get reimbursed by insurance, or not. The insurance company is more than happy not to pay you any way they can. Sorry ... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | The doctor didn't charge the health insurance in time, am I liable? | I work for a health billing company. It is completely the provider's responsibility to bill your health insurance in a timely manner if they have your health insurance information on file (it sounds like they did). If you can gather a copy of your EOB (Explanation of Benefits) from your health insurance, it will likely... |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | The doctor didn't charge the health insurance in time, am I liable? | I was in a similar situation years back and I refused to pay the bill. My point of view was that I provided the hospital with all information needed to submit the claim in a timely matter and that I should not be held responsible for their failure to do so. In the end they waived the charges. So while technically I mig... |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | The doctor didn't charge the health insurance in time, am I liable? | The hospital likely has a contract with your insurance company which makes them obligated to bill the insurance before billing you! I had a similar occurrence that was thrown out when my insurance company provided a copy of a contract with the hospital to the judge. So if there is an agreement they must file with the i... |
Share your insights or perspective on the financial matter presented in the input. | The doctor didn't charge the health insurance in time, am I liable? | That is your bill because the services were performed for you. You still can negotiate with the doctor however. Suggest that while you aren't willing to pay the full share, you will pay the negotiated amount he would have actually gotten from the insurance company (or some fraction thereof). Doc did make a mistake,... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | The doctor didn't charge the health insurance in time, am I liable? | I had a similar issue take place at a hospital when the repeatedly billed the "wrong me" -- a stale insurance record left behind from when I was a dependent on my parent's insurance a decade earlier. They ended up billing me for anesthesia when I had a major surgery (everything else was billed to the correct insurance.... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | The doctor didn't charge the health insurance in time, am I liable? | Here's my thought - call the insurance company back. Ask them to just tell you what the "reasonable and customary" approved payment would be. Offer that exact amount to the hospital, it's what they would have gotten anyway, and you learned a cheap lesson. |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | The doctor didn't charge the health insurance in time, am I liable? | If you read all that paperwork they made you fill out at the emergency room, there is probably something in there explicitly stating that you owe any bills you rack up regardless of what happens with the insurance company. They generally have a disclaimer that filing for you with your insurance company is a courtesy se... |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | Paying Off Principal of Home vs. Investing In Mutual Fund | Excellent answers so far, so I will just add one additional consideration: liquidity. Money invested in a mutual fund (exclusive of retirement accounts with early withdrawal penalties) has a relatively high liquidity. Whereas excess equity in your home from paying down early has very low liquidity. To put it simply: If... |
Share your insights or perspective on the financial matter presented in the input. | Paying Off Principal of Home vs. Investing In Mutual Fund | Naturally the advice from JoeTaxpayer and dsimcha is correct, every situation is different. I will get reckless, go nuts and make a recommendation! You are young, childless for the time being. Do the following with your money: ALTERNATE IDEA for #6 Fix yourself up for the long term first, then have a bit of fun, then... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | Paying Off Principal of Home vs. Investing In Mutual Fund | I was going to ask, "Do you feel lucky, punk?" but then it occurred to me that the film this quote came from, Dirty Harry, starring Clint Eastwood, is 43 years old. And yet, the question remains. The stock market, as measured by the S&P has returned 9.67% compounded over the last 100 years. But with a standard deviat... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | Paying Off Principal of Home vs. Investing In Mutual Fund | I wouldn't pay down your mortgage faster until you have a huge emergency fund. Like two years' worth of expenses. Once you put extra money toward principal you can't get it out unless you get a HELOC, which costs money. You're in a position now to build that up in a hurry. I suggest you do so. Your mortgage is exce... |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | Paying Off Principal of Home vs. Investing In Mutual Fund | Paying off the debt is low-risk, low-reward. You're effectively guaranteed a 4% return. If you buy a mutual fund, you're going to have to take some risk to have a decent chance of getting better than 4% and change return in the long run, which probably means a fund that invests primarily in stocks. Buying a stock mu... |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | Paying Off Principal of Home vs. Investing In Mutual Fund | Other answers are already very good, but I'd like to add one step before taking the advice of the other answers... If you still can, switch to a 15 year mortgage, and figure out what percentage of your take-home pay the new payment is. This is the position taken by Dave Ramsey*, and I believe this will give you a bett... |
Share your insights or perspective on the financial matter presented in the input. | Paying Off Principal of Home vs. Investing In Mutual Fund | The mathematically correct answer is to invest, because you'll get a higher rate of return. I think that answer is bunk -- owning your home free and clear is a huge burden lifted off of your shoulders. You're at an age where you may find a new job, business, personal or other opportunities will be easier to take advant... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | Paying Off Principal of Home vs. Investing In Mutual Fund | I'm probably going to get a bunch of downvotes for this, but here's my not-very-popular point of view: I think many times we tend to shoot ourselves in the foot by trying to get too clever with our money. In all our cleverness, we forget a few basic rules about how money works: It's better to have 0 debt and a small am... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | How do I calculate the dwelling coverage I need from the information I have? | This is where an insurance agent is very useful. They will help you choose appropriate coverage, based on local rebuilding costs, the build quality of your house (higher quality or historic/semi-historic construction requires a different type of coverage), etc. They can also help advise you on things like the need for ... |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | How do I calculate the dwelling coverage I need from the information I have? | Never take the first quote. Consider what it would really cost to replace the house -- to rebuild and pay for living while you do so (including demolition, etc.) and/or pay off the mortgage and return your equity if it is a financed property. Most insurances will have a limit on how much coverage you can get based on ... |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | How do I calculate the dwelling coverage I need from the information I have? | You can't compare the different quotes unless they have the same numbers to work with. The big companies should use similar models to come up with values for the contents. In many cases they will assume some standard values for things like appliances. Yes you have a stove, but unless it is commercial grade they won't c... |
Share your insights or perspective on the financial matter presented in the input. | Analyst estimates for an insurance company | Something to consider is how broad is Yahoo! Finance taking in their data for making some comparisons. For example, did you look at the other companies in the same industry? On the Industry page, the Top Life Insurance Companies by Market Cap are mostly British companies which could make things a bit different than y... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | Why are options created? | The main reason is that you move from the linear payoff structure to a non-linear one. This is called convexity in finance. With options you can design a payoff structure in almost any way to want it to be. For example you can say that you only want the upside but not the downside, so you buy a call option. It is obvio... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | Why are options created? | Do you need to buy car insurance? If you do, you are buying to open a put option. |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | 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, o... |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | Why are options created? | In general economic theory, there are always two markets created based on a need for a good; a spot market (where people who need something now can go outbid other people who need the same thing), and a futures market (where people who know they will need something later can agree to buy it for a pre-approved price, ev... |
Share your insights or perspective on the financial matter presented in the input. | Buying a House and Taking Part of 20% to move initial payment date forward | In the prior PMI discussions here, it's been stated that the bank is not obligated to remove PMI until the mortgage's natural amortization puts the debt at 78% LTV. So, paying in advance like this will not automatically remove the PMI. Nor will a lump sum payment be certain to move the next payment ahead a year. If it... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | What happens if one brings more than 10,000 USD with them into the US? | The US Customs and Border Protection website states that there is no limit to the amount of currency that can be brought into or taken out of the US. There is no limit on the amount of money that can be taken out of or brought into the United States. However, if a person or persons traveling together and filing a joi... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | What happens if one brings more than 10,000 USD with them into the US? | Since all the other answers thus far seem to downplay the risk (likelihood) of the money being seized, I figure I may as well make my comment an answer. Unless you happen to have your legal team travelling with you and your suitcase of cash, you should expect that you'll be questioned extensively, so that any sign of n... |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | What happens if one brings more than 10,000 USD with them into the US? | The $10,000 mark is not a ceiling in importing cash, but rather a point where an additional declaration needs to be made (Customs Form 4790). At 1 million, I suspect you might be in for a bit of an interview and delay. Here's an explanation of what happens when the declaration isn't made: https://www.cbp.gov/newsroom/l... |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | What happens if one brings more than 10,000 USD with them into the US? | Once you declare the amount, the CBP officials will ask you the source and purpose of funds. You must be able to demonstrate that the source of funds is legitimate and not the proceeds of crime and it is not for the purposes of financing terrorism. Once they have determined that the source and purpose is legitimate, th... |
Share your insights or perspective on the financial matter presented in the input. | What happens if one brings more than 10,000 USD with them into the US? | Bad plan. This seems like a recipe for having your money taken away from you by CBP. Let me explain the biases which make it so. US banking is reliable enough for the common citizen, that everyone simply uses banks. To elaborate, Americans who are unbanked either can't produce simple identity paperwork; or they got ... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | Are long-term bonds risky assets? | Bonds have multiple points of risk: This is part of the time value of money chapter in any finance course. Disclaimer - Duff's answer popped up as I was still doing the bond calculations. Similar to mine but less nerdy. |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | Are long-term bonds risky assets? | In the quoted passage, the bonds are "risky" because you CAN lose money. Money markets can be insured by the FDIC, and thus are without risk in many instances. In general, there are a few categories of risks that affect bonds. These include: The most obvious general risk with long-term bonds versus short-term bonds to... |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | Are long-term bonds risky assets? | AAA bonds are safe, as far as the principal goes. If you buy long term bonds today (at very low rates) and the interest rate goes up to 10% in 5 years, the current value of the bonds will decrease. But if you hold the bonds till maturity, you will almost certainly (barring MBS scenarios) get the expected principal and ... |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | Are long-term bonds risky assets? | In truth there is no such thing as a risk-free asset. That is why your textbook feels the need to add the qualifier "for practical purposes," meaning that the risk of a money market account is so much lower than virtually any other asset class that it can reasonably be approximated as risk free. The main risk of any b... |
Share your insights or perspective on the financial matter presented in the input. | Are long-term bonds risky assets? | Long-term bonds -- any bonds, really -- can be risky for two main reasons: return on principal, or return of principal. The former is a problem if interest rates are low (which they are now in the US) because existing bonds will fall in price if interest rates rise. The second is a problem if the lender defaults: IO... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | Can I get a discount on merchandise by paying with cash instead of credit? | I bought a car a few years ago. The salesman had the order, I knew the car I wanted and we had a price agreed on. When I refused the payment plan/loan, his manager came over and did a hard sell. "99% of buyers take the financing" was the best he could do. I told him I was going to be part of the 1%. With rates so low, ... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | Can I get a discount on merchandise by paying with cash instead of credit? | Cash is very effective at getting a discount when buying from individuals (craigslist, garage sales, estate sales, flea markets, etc.). I'll make an offer, then thumb through the cash while they consider it. There eyes will dart back and forth between my eyes and the cash as they decide whether to take my offer. Ca... |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | Can I get a discount on merchandise by paying with cash instead of credit? | There are two fundamentally different reasons merchants will give cash discounts. One is that they will not have to pay interchange fees on cash (or pay much lower fees on no-reward debit cards). Gas stations in my home state of NJ already universally offer different cash and credit prices. Costco will not even take ... |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | Can I get a discount on merchandise by paying with cash instead of credit? | Slightly off topic... Not merchandise, but I paid for various doctor's appointments with cash (as opposed to paying with health insurance). I'd call ahead of time and notify them that I'd be paying in cash. I got ridiculous discounts, sometimes even less than the copay. I do not know why this discrepancy exists and ... |
Share your insights or perspective on the financial matter presented in the input. | How could USA defaulting on its public debt influence the stock/bond market? | This is a speculative question and there's no "correct" answer, but there are definitely some highly likely outcomes. Let's assume that the United States defaults on it's debt. It can be guaranteed that it will lose its AAA rating. Although we don't know what it will drop to, we know it WILL be AA or lower. A triple-A... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | How could USA defaulting on its public debt influence the stock/bond market? | The default scenario that we're talking about in the Summer of 2011 is a discretionary situation where the government refuses to borrow money over a certain level and thus becomes insolvent. That's an important distinction, because the US has the best credit in the world and still carries enormous borrowing power -- so... |
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