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Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | How do I explain why debt on debt is bad to my brother? | This is not the case with your brother only. There are many business which run on this premise. It goes till the time all the conditions are in control and get busted when things goes out of way. You have mentioned the loan amount and not the monthly repayment amount. Even if you say, a new loan will not solve his pro... |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | How do I explain why debt on debt is bad to my brother? | I'm not sure how much living expenses are there but half of $12,600 in the US would be a decent monthly income. I agree that debt on debt would just add to his problems, sort of like quicksand, the interest will just makes a person sink deeper and deeper. It seems like it might take some more radical options here to... |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | Would parking at a parking lot near or in my residence prevent me from paying for it with my transit FSA? | No, it doesn't look like you can use the employee benefit to pay for parking near your home. The definition for "qualified parking" is in the Internal Revenue Code Section 132 ("Certain Fringe Benefits") (f) (5) (c): (C) Qualified parking The term “qualified parking” means parking provided to an employee on or near the... |
Share your insights or perspective on the financial matter presented in the input. | Do property taxes get deducted 100% from the Annual Tax Return or only a fraction of them? | If your deductions are higher than the standard deduction, you will be able to subtract property taxes from your income. In your example, that means that taxes are computed based on $95,000. In 2011, the standard deduction varies between $5,800 (single filer) and $11,600 (married filing jointly). Tax credits are subtra... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | Do property taxes get deducted 100% from the Annual Tax Return or only a fraction of them? | In 2012, the standard deduction is $5950 for a single person. Let's assume you are very charitable, and by coincidence you donate exactly $5950 to charity. Everything that falls under itemized deductions would then be deductible. So, if your property tax is $6000, in your example - Other adjustments come into play, ... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | Do property taxes get deducted 100% from the Annual Tax Return or only a fraction of them? | To bring more clarity to the issue, Viriato will be entitle to deduct property tax depending upon whether he is claiming standard deduction (which varies on some factors including filling as married or single) or itemized deduction. If he is claiming, itemized deduction Example 1 is correct. Example 2 suffers from anot... |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | Do property taxes get deducted 100% from the Annual Tax Return or only a fraction of them? | Any deductable expense will reduce your taxable income not your tax payable. Your Example 1 above is correct and gives you 100% deduction. It is like having a business where your sales are $100,000 and your expenses in making the sales is $40,000. The expenses are your tax deductions and reduce your profits on which yo... |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | Few questions related to Balance sheet and Income Statement? | 1.) There is no logic in this question, because when there is an increase in net income for the year it will be in the form of something, ie it can be cash and cash equivalent like cash in hand or cash at bank. So as your ques says if there is increase in net income of 20 then asset side also increase by 20(cash) which... |
Share your insights or perspective on the financial matter presented in the input. | international student tax deduction while trading | So, my question is what is the limit below which I don't have to pay taxes while trading. I just invested $10. Do I have to pay taxes for this too? what are the slabs? Any income is subject to tax. That said, investing $10 will probably not generate much of income, even at the discount brokers most of it will be wasted... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | Unmarried Couple Splitting up with Joint Ownership of Home | Despite the unmarried status, you need to see a lawyer. Essentially you have a business with this person owning a home as the asset, and a mortgage for which you are responsible for. A lawyer needs to examine any paperwork you have and with knowledge of your particular jurisdiction's laws can advise you on the proper... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | Unmarried Couple Splitting up with Joint Ownership of Home | Because you're not married, its a partnership agreement, and unless there's a written contract, either the two of you agree on how to handle the home, or it's off to court you go. If you were both supposed to pay for the home, and he failed to for a a while, that would put him in breach of contract which I would think ... |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | What does a CFP do? | A Certified Financial Planner has passed a licensing exam and will advise you and help you reach your financial goals. A good CFP can help you a lot, especially if you are unsure how to set up your insurance, investment, savings, and financial plans on your own. You do not need a CFP to get a life insurance policy. If ... |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | What does a CFP do? | CFP stands for "Certified Financial Planner", and is a certification administered by the CFP board (a non-government non-profit entity). This has nothing to do with insurance, and CFP are not insurance agents. Many States require insurance agents to be explicitly licensed by the State as such, and only licensed insuran... |
Share your insights or perspective on the financial matter presented in the input. | Is legal sending dollars to someone in Mexico, and sending them back for profit? | It is certainly legal to transfer money between people, no matter how often, as long as the money is not originally from illegal sources. If you are gaining in the process, you need to pay taxes on your (net) gain, as on any income; but as always, taxed income is still income. Consider the accumulating transaction cost... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | Should I prioritize retirement savings inside of my HSA? | Unquestionably I think the priority should be funding retirement through ROTH/IRA/401K over HSA extra. Obviously you need to fund your HSA for reasonable and expected medical expenses. Also there is some floor to your more traditional retirement funding. Beyond that what does one do with excess dollars? Given the la... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | Should I prioritize retirement savings inside of my HSA? | You would want to prioritize Roth and retirement over HSA. As the HSA is only for health and dental expenses, which you will always have, overfunding it will put you in a bit of a pickle for all of the life involved. For example, even if you or a loved one develop a strange & expensive ailment, the HSA will only cover ... |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | High credit utilization, some high interest - but credit score not overly bad. How to attack debt in this situation? | You need to pay off the entire balance of 7450 as soon as possible. This should be your primary financial goal at this point above anything else. A basic structure that you can follow is this: Is the £1500 balance with the 39.9% interest rate the obvious starting point here? Yes, that is fine. But all the cards and ove... |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | High credit utilization, some high interest - but credit score not overly bad. How to attack debt in this situation? | The bottom line is you have an income problem. Your car payment seems very high relative to your income and your income is very low relative to your debt. Can you work extra jobs or start a small business to get that income up? In the US it would be fairly easy to work some part time jobs to get that income up abou... |
Share your insights or perspective on the financial matter presented in the input. | High credit utilization, some high interest - but credit score not overly bad. How to attack debt in this situation? | While paying off your debt quickly is obviously desirable it is simply not going to be possible. Even with tight budgeting I think you will struggle to put more than £500 or so per month towards your debt. I would keep trying to move the highest interest debt onto something cheaper, be it a loan, a balance transfer cre... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | Meanings of “price of the derivative” | @Tim - in this case, a futures contract isn't like an options contract. It's simply a method of entering into an agreement for delivery at a future date. While the speculators appear to have taken over, there are practical examples of use of the futures market. I am a gold miner and I see that my cost is $1200/oz giv... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | Meanings of “price of the derivative” | No, it means what it says. Prices change, hence price of the derivative can go down even if the price of the underlying doesn't change (e.g. theta decay in options). |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | Super-generic mutual fund type | You can also create a CD ladder (say 1/3 in a 6 month CD, 1/3 in a 1 year CD, 1/3 in a 2 year CD) with half of your emergency fund money. You always want to leave some of it in a liquid account so you can get at it immediately without any interest penalty. CD's provide higher interest than a savings account. By stag... |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | Super-generic mutual fund type | Since this is your emergency fund, you generally want to avoid volatility while keeping pace with inflation. You really shouldn't be looking for aggressive growth (which means taking on some risk). That comes from money outside of the emergency fund. The simplest thing to do would be to shop around for a different sa... |
Share your insights or perspective on the financial matter presented in the input. | Super-generic mutual fund type | Congrats on having such a nice emergency fund. That's pretty substantial. I don't want to be the one to suggest the One Investment To Rule Them All because I might be wrong. :) I'd investigate other avenues for investment. Here are a few (in no particular order): My two cents but I think you're wise to be wary of in... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | Super-generic mutual fund type | It sounds like you want a place to park some money that's reasonably safe and liquid, but can sustain light to moderate losses. Consider some bond funds or bond ETFs filled with medium-term corporate bonds. It looks like you can get 3-3.5% or so. (I'd skip the municipal bond market right now, but "why" is a matter for ... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | Super-generic mutual fund type | Since you already have twice your target in that emergency fund, putting that overage to work is a good idea. The impression that I get is that you'd still like to stay on the safe side. What you're looking for is a Balanced Fund. In a balanced fund the managers invest in both stocks and bonds (and cash). Since you ha... |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | Super-generic mutual fund type | If you are looking for an index index fund, I know vanguard offers their Star fund which invests in 11 other funds of theirs and is diversified across stocks, bonds, and short term investments. |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | Should I collect receipts after paying with a card? | Keeping a receipt does allow you to verify that the expected amount was charged/debited it also can help when you need to return an item. Regarding double charging, the credit card companies look for that. If the same card is used at the same vendor for the same exact amount in a short period of time the credit card c... |
Share your insights or perspective on the financial matter presented in the input. | Should I collect receipts after paying with a card? | I've seen many people sign a restaurant credit card receipt and walk away. Easy enough for the wait staff to add a tip and total. I doubt this is a high risk area compared to others, but in general, why not take the receipt for verification, or in the case of a good that can be returned, the receipt might be needed. |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | Should I collect receipts after paying with a card? | It surely doesn't HURT to keep a receipt. I tend to pile up receipts in my desk drawer, never look at them, and then every few months throw them all out. If a vendor writes a receipt by hand or if the cash register is not tied in to the credit card system, keeping a receipt could give you evidence against mistakes or f... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | Should I collect receipts after paying with a card? | It is probably safe to throw away the receipt. Without a system to process and store receipts, they are of little use. With regards to personal finances I'm guilty of preaching without practicing 100% of the time, but here are some arguments for keeping receipts. To reconcile your statement to receipts before paying t... |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | Should I collect receipts after paying with a card? | In this answer, I won't elaborate on the possibilities of fraud (or pure human error), because something can always go wrong. I will, however, explain why I think you should always keep receipts. When the (monthly or so) time comes to pay your credit card bill, your credit card company sends you a list of transactions.... |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | Should I exchange my Scottish pounds for English ones? | Scottish banknotes are promissary notes of the banks issuing them. Their value will be paid in UK legal tender any time as long as the issuing bank is in business. So they are not going to lose value unless the issuing bank goes bakrupt. Scottish notes may be refused, outside of Scotland, at least, by merchants at thei... |
Share your insights or perspective on the financial matter presented in the input. | Cheapest USD to GBP transfer | Use a remitting service such as Ria Money Transfer. Almost all these services allow you to transfer upto $2999 at a time. So, you would be able to transfer the entire amount of $4500 within 2 business days(There is a monthly limit too, but it will definitely be more than $4500). There are no fees to use these services,... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | Contributing factors to historical increase in trading volume | Prior to 1975, commissions for trading stock on the NYSE were fixed at 1% of the amount of the trade. In 1975, the SEC made fixed commission rates illegal, giving rise to discount brokers offering much reduced commission rates. Simultaneously, Electronic Communications Networks (ECNs) gained market share as alternati... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | Contributing factors to historical increase in trading volume | It's not primarily more people investing. In the 1980s stock exchanges went from open outcry trading floors where all trades involved actually exchanging pieces of paper to electronic trading. Once that happened, it wasn't long before most trades were executed by computer programs rather than human beings, turning stoc... |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | Do mutual fund companies deliberately “censor” their portfolios/funds? | Do mutual funds edit/censor underperforming investments to make their returns look better, and if so, is there any way one can figure out if they are doing it? No, that's not what the quote says. What the quote says is that the funds routinely drop investments that do not bring the expected return, which is true. T... |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | Do mutual fund companies deliberately “censor” their portfolios/funds? | There is a survivorship bias in the mutual fund industry. It's not about individual stocks in which those funds invest. Rather, it's in which funds and fund companies/families are still around. The underperforming funds get closed or merged into other funds. Thus they are no longer reported, since they no longer exist.... |
Share your insights or perspective on the financial matter presented in the input. | Do mutual fund companies deliberately “censor” their portfolios/funds? | If I invest in individual stocks I will, from time to time, sell stocks that aren't performing well. If the value of my portfolio has gone up by 10%, then the value of my portfolio has gone up by 10%, regardless of whether selling those stocks is labeled as "delete[ing] failures". Same thing for mutual funds: selling u... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | Is it accurate to say that if I was to trade something, my probability of success can't be worse than random? | The stock market is not a zero-sum game. Some parts are (forex, some option trading), but plain old stock trading is not zero sum. That is to say, if you were to invest "at random", you would on average make money. That's because the market as a whole makes money - it goes up over time (6-10% annually, averaged over ... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | Is it accurate to say that if I was to trade something, my probability of success can't be worse than random? | One key piece missing from your theory is the bid/ask spread. If you buy a stock for $10, you usually can't immediately turn around and sell it for $10. You can only sell it for whatever someone is willing to pay for it. So virtually any random investment (stocks, bonds, forex, whatever) immediately loses a small amou... |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | Is it accurate to say that if I was to trade something, my probability of success can't be worse than random? | I'm just trying to visualize the costs of trading. Say I set up an account to trade something (forex, stock, even bitcoin) and I was going to let a random generator determine when I should buy or sell it. If I do this, I would assume I have an equal probability to make a profit or a loss. Your question is what a mathem... |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | Is it accurate to say that if I was to trade something, my probability of success can't be worse than random? | If i do this, I would assume I have an equal probability to make a profit or a loss. The "random walk"/EMH theory that you are assuming is debatable. Among many arguments against EMH, one of the more relevant ones is that there are actually winning trading strategies (e.g. momentum models in trending markets) which inv... |
Share your insights or perspective on the financial matter presented in the input. | Is it accurate to say that if I was to trade something, my probability of success can't be worse than random? | It seems to be that your main point is this: No matter what, my chances cannot be worse than random and if my trading system has an edge that is greater than the percentage of the transaction that is transaction cost, then I am probabilistically likely to make a profit? In general, yes, that is true, but... Consider th... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | Is it accurate to say that if I was to trade something, my probability of success can't be worse than random? | The previous answers make valid points regarding the risks, and why you can't reasonably compare trading for profit/loss to a roll of the die. This answer looks at the math instead. Your assumption: I have an equal probability to make a profit or a loss. Is incorrect, for the reasons stated in other answers. However, t... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | Is it accurate to say that if I was to trade something, my probability of success can't be worse than random? | In theory, in a perfect world, what you state is almost true. Apart from transaction fees, if you assume that the market is perfectly efficient (ie: public information is immediately reflected in a perfect reflection of future share value, in all share prices when the information becomes available), then in theory any ... |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | Is it accurate to say that if I was to trade something, my probability of success can't be worse than random? | Don't compare investing with a roll of the dice, compare it with blackjack and the decision to stand or hit, or put more money on the table (double down or increase bet size) , based on an assessment of the state of the table and history. A naive strategy of say "always hitting to 16" isn't as awful as randomly hittin... |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | Self assessment expenses - billing date or payment date? | Unless you're running a self-employed business with a significant turnover (more than £150k), you are entitled to use cash basis accounting for your tax return, which means you would put the date of transactions as the payment date rather than the billing date or the date a debt is incurred. For payments which have a l... |
Share your insights or perspective on the financial matter presented in the input. | Why is a stock that pays a dividend preferrable to one that doesn't? | Check out the questions about why stock prices are what they are. In a nutshell, a stock's value is based on the future prospects of the company. Generally speaking, if a growth company is paying a dividend, that payment is going to negatively affect the growth of the business. The smart move is to re-invest that capit... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | Why is a stock that pays a dividend preferrable to one that doesn't? | The ultimate reason to own stock is to receive cash or cash equivalents from the underlying security. You can argue that you make money when stock is valued higher by the market, but the valuation should (though clearly not necessarily is) be based on the expected payout of the underlying security. There are only three... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | Why is a stock that pays a dividend preferrable to one that doesn't? | One reason to prefer a dividend-paying stock is when you don't plan to reinvest the dividends. For example, if you're retired and living off the income from your investments, a dividend-paying stock can give you a relatively stable income. |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | Why is a stock that pays a dividend preferrable to one that doesn't? | Dividend paying stocks are not "better" In particular shareholders will get taxed on the distribution while the company can most likely invest the money tax free in their operations. The shareholder then has the opportunity to decide when to pay the taxes when they sell their shares. Companies pay dividends for a c... |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | Work on the side for my wife's company | My understanding (I am not a lawyer or tax expert) is that you are not allowed to work for free, but you can pay yourself minimum wage for the hours worked. There are probably National Insurance implications as well but I don't know. The main thing is, though, that if HMRC think that you've set up this system as a tax ... |
Share your insights or perspective on the financial matter presented in the input. | Work on the side for my wife's company | In the US, you'd run the risk of being accused of fraud if this weren't set up properly. It would only be proper if your wife could show that she were involved, acting as your agent, bookkeeper, etc. Even so, to suggest that your time is billed at one rate but you are only paid a tiny fraction of that is still a high ... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | Work on the side for my wife's company | Depending on how much freelance work we're talking about you could set up a limited company, with you and your wife as directors. By invoicing all your work through the limited company (which could have many other benefits for you, an accountant/advisor would... well, advise...) it's the company earning the money, not ... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | Comparing/reviewing personal health insurance plans for the self-employed | I was in your situation a few years ago and I discovered something that worked perfectly for me - a local health insurance broker. I met with her, discussed my needs, reviewed the options with her, then acted. She received a commission from the insurer, so it cost me nothing. I would certainly follow a similar approach... |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | Comparing/reviewing personal health insurance plans for the self-employed | Here's an old-ish article from the NYT that discusses this. |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | Comparing/reviewing personal health insurance plans for the self-employed | Health insurance is tough, as you know, because the offerings vary dramatically by State, and there is the added complication of the Affordable Care Act, which depending on where and who you are has had either a good or bad impact on the available options. If you are a sole proprietor or other business person, I'd advi... |
Share your insights or perspective on the financial matter presented in the input. | what are the benefits of setting up an education trust fund for children? | Well, first off, if your children are NZ citizens, they can borrow money at 0% interest for tertiary education and I don't see any benefit to not taking free money. A saving account is your money, and will accrue a little bit of interest and you will pay tax on that. A family trust (I hope this is what you mean by trus... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | devastated with our retirement money that we have left | I'm going to discuss this, in general, as specific investment advice isn't allowed here. What type of account is the $60K in now? I mean - Is it in a 401(k), IRA or regular account/CD/money market? You are still working? Does your company offer any kind of matched 401(k)? If so, take advantage of that right up the lev... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | devastated with our retirement money that we have left | It sounds like the kinds of planners you're talking to might be a poor fit, because they are essentially salespersons selling investments for a commission. Some thoughts on finding a financial planner The good kind of financial planner is going to be able to do a comprehensive plan - look at your whole life, goals, and... |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | devastated with our retirement money that we have left | I'll be blunt. |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | devastated with our retirement money that we have left | When you say: I am 48 and my husband is 54. We have approx. 60,000.00 left in our retirement accounts. We want to move our money into something so our money will grow. We've been looking at annunities. We've talked to 4 different advisors about what is best for us. Bad mistake, I am so overwhelmed with the differ... |
Share your insights or perspective on the financial matter presented in the input. | devastated with our retirement money that we have left | The answers you've received already are very good. I truly sympathize with your situation. In general, it makes sense to try to build off of existing relationships. Here are a few ideas: I don't know if you work for a small or large company, or local/state government. But if there is any kind of retirement planning thr... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | devastated with our retirement money that we have left | Get a job, if you don't have one right now. Take deductions from your paycheck for an IRA or 401K if the company has one. |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | Can rent be added to your salary when applying for a mortgage? | The decision as to what counts as income is up to the bank. You'll need to ask them whether or not rental income can be included in the total. I can offer some anecdotal evidence: when I applied for a mortgage to buy my home, I already had a rental property with a buy-to-let mortgage on it. Initially the bank regarded ... |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | Can rent be added to your salary when applying for a mortgage? | I am in Australia, but I think the banks in the UK would use similar wrkings. Your options 1 and 2 are basically no. Why would the bank consider your wife to be paying you rent when you live together. These are the type of practices that led to the GFC, and since then practices have been tightened. Regarding option 3, ... |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | Can rent be added to your salary when applying for a mortgage? | The days are long gone when offered mortgages were simply based on salary multiples. These days it's all about affordability, taking into account all incomes and all outgoings. Different lenders will have different rules about what they do and don't accept as incomes; these rules may even vary per-product within the sa... |
Share your insights or perspective on the financial matter presented in the input. | Can rent be added to your salary when applying for a mortgage? | I can answer Scenario #3. If you are purchasing a property with buy-to-let intentions […] can you use the rental income exclusively to fund the mortgage repayments? Yes – this is exactly how buy-to-let mortgage applications are evaluated. Lenders generally expect you to fund the mortgage payments with rent. They look... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | Effect on Bond asset allocation if Equity markets crash? | what will happen to the valuation of Tom's bond holdings after the equity crash? This is primarily opinion based. What will happen is generally hard to predict. Bond Price Bump due to Demand: Is a possible outcome; this depends on the assumption that the bonds in the said country are still deemed safe. Recent Greece e... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | Effect on Bond asset allocation if Equity markets crash? | I agree that the cause of the crash can make a huge difference in the effect on the bond market. Here's a few other possibilities: All that to say that there's no definitive answer as to how the bond market will respond to an equity crash. Bonds are much more highly correlated to equities lately, but that could be due... |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | Estate taxes and the top 1 percent by net worth | Of course, you've already realized that some of that is that smaller estates are more common than larger estates. But it seems unlikely that there are four times as many estates between $10 and $11 million as above that range. People who expect to die with an estate subject to inheritance tax tend to prepare. I do... |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | Estate taxes and the top 1 percent by net worth | There are two main reasons for the difference between these two numbers: While there are a few people that are wildly wealthy, most of the people with more than 10 million have between 10-50 million dollars. These people shield most of their estate and in the end the tax only effects a small portion of even the wealth... |
Share your insights or perspective on the financial matter presented in the input. | Estate taxes and the top 1 percent by net worth | There are two key reasons: Consider a family of four, two kids and two adults, that has a net worth of $20 million. Each of these four people live in a top 1% household. But any of those four people can die, and their estate will not pay any estate tax. Both kids and one spouse can die, and still no estate tax will be ... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | Estate taxes and the top 1 percent by net worth | Data is a funny thing. There are many different ways of constructing data sets. Keep in mind, the cite you linked is fine, I follow this kind of site when I am data mining. They got their data from the Government, and there's no reason to doubt its validity. Keep in mind, it's a survey. They extrapolate from a survey o... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | Strategies for putting away money for a child's future (college, etc.)? | Saving for college you have a couple of options. 529 plans are probably the best bet for most people wanting to save for their kids college education. You can put a lot of money away ~$300k and you may get a state tax deduction. The downside is if you're kid doesn't go to college you may end up eating the 10% penalty.... |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | Strategies for putting away money for a child's future (college, etc.)? | (Congratulations on the little one on the way.) I'd recommend saving outside of tax-advantaged accounts. Pay your taxes and be done with them. I'd recommend putting your old-age fund first before shelling out a lot of money for college. I'd recommend not shelling out a lot of money for college. Ideally, none. There ... |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | Strategies for putting away money for a child's future (college, etc.)? | Being in the same situation, and considering that money doesn't need to be available until 2025, I just buy stocks. I plan to progressively switch to safer options as time passes. |
Share your insights or perspective on the financial matter presented in the input. | Strategies for putting away money for a child's future (college, etc.)? | Saving for school is [fundamentally] no different than saving for any other major purchase: in addition to some of the great answers already provided, here are a couple other thoughts: Just to have the [simplified] numbers handy: If you can increase that to $2000/yr, after 18 years: One final thought - I would personal... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | Strategies for putting away money for a child's future (college, etc.)? | Others have given some good answers. I'd just like to chime in with one more option: treasury I-series bonds. They're linked to an inflation component, so they won't lose value (in theory). You can file tax returns for your children "paying" taxes (usually 0) on the interest while they're minors, so they appreciate tax... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | Strategies for putting away money for a child's future (college, etc.)? | I know this is a little off the wall but I bought a rental property for my son's tuition. The tenants pay down the mortgage for the next 12 years and it (hopefully) also appreciates in value. Worst case scenario is I come out with a rental and a kid with no education. He doesn't go then there's no skin off my back. |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | What are my chances at getting a mortgage with Terrible credit but High income | With bad credit but good income, I would simply save a large down payment. You're much more likely to get a mortgage with 25% down and a history of recently saving that 25% to show. |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | What are my chances at getting a mortgage with Terrible credit but High income | I also am paying roughly twice as much in rent as a mortgage payment would be on the type of house I have been looking at, so I'd really like to purchase a house if possible. Sounds like I need to rain on your parade a bit: there's a lot more to owning a house than the mortgage. Property tax, insurance, PMI, and mainte... |
Share your insights or perspective on the financial matter presented in the input. | What are my chances at getting a mortgage with Terrible credit but High income | First step, pull a copy of your credit report, and score. You should monitor that score and do what you can to bring it up. Your chances are far better if (a) you first save a sizable downpayment, and (b) go with a local bank that doesn't just write the mortgage and sell it. Better still, go to that local bank and inqu... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | What are my chances at getting a mortgage with Terrible credit but High income | The bottom line, is that you are doing the right thing now: correcting your past indiscretions. Get those collections taken care of, then start saving for a down payment. Of course, during this time, you should pay your bills early or on time. During that time your credit will improve dramatically. I bet that this w... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | Saving for a down payment on a new house, a few years out. Where do we put our money next? | If you're absolutely certain that you won't buy a house within a year or so, I'd still be tempted to put some of the money into short-term CDs (ie, a max of 12 months). I think that at the moment CDs are a bit of a mug's game though because you'd hardly find one that offers better interest rates than some of the few sa... |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | Saving for a down payment on a new house, a few years out. Where do we put our money next? | In October 2011 in the United States, you just don't have any options. Save your money in a savings account and that is the best you can do. Your desire to buy a house means you are a saver not an investor, and you risk tolerance on this pile of money is 0. Save it in a bank account; I highly doubt chasing an interes... |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | Saving for a down payment on a new house, a few years out. Where do we put our money next? | Rewards cards charge the merchant more to process. So the card is making money when you use it. So if your concern is for the cards going away because they are losing money... That is not going to happen because you use it too much. If their business model has them losing money because they are giving away more rewa... |
Share your insights or perspective on the financial matter presented in the input. | Does investing in a company support it? | Would you consider the owner of a company to be supporting the company? If you buy stock in the company you own a small part of that company. Your purchase also increases the share price, and thus the value of the company. Increased value allows the company to borrow more money to say expand operations. The affect that... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | Does investing in a company support it? | We're not "helping" the company in a comparable sense to donating money to a non-profit. As you wrote, investing in a company deals with ownership and in a sense, becoming a part owner of a company, even if it is a minor ownership, indicates that we sense it has some sort of value, whether that's ethical, financial or... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | Does investing in a company support it? | As others have said, it simply makes you a part owner. Even if you have ethical objections to a company's behavior, I'd argue that investing in it and using the proxy votes to influence the company's decisions might be even more ethical than not investing. |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | Does investing in a company support it? | As said by others, buying shares of a company will not support it directly. But let's think about two example companies: Company A, which has 90 % stocks owned by supporters, and Company B, which has only 1 % of stocks owned by supporters. Both companies release bad news, for example profits have decreased. In Company ... |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | Why buy insurance? | Because people are Risk Averse. Suppose that you own an asset worth $10,000 to you. Suppose that each year, the asset has 1% chance of being stolen (or completely broken). The expected value is 99% x 10,000 + 1% x $0 = $9,900. This is the average outcome if you do not buy insurance. Now consider two mutually exclusi... |
Share your insights or perspective on the financial matter presented in the input. | Why buy insurance? | Discussions around expected values and risk premiums are very useful, but there's another thing to consider: cash flow. Some individuals have high value assets that are vital to them, such as transportation or housing. The cost of replacing these assets is prohibitive to them: their cashflow means that their rate of ... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | Why buy insurance? | As someone who has worked for both an insurance carrier and an insurance agent, the reason people buy insurance is two fold: to spread risk out, and to get the benefits (when applicable) of approaching risk as a group. What you are really doing when you buy insurance is you are buying in to a large group of people who ... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | Why buy insurance? | Regarding auto insurance, you have to look at the different parts. In the United Sates most states do require a level of specific coverage for all drivers. That is to make sure that if you are at fault there is money available to pay the victims. That payment may be for damage to their car or other property, but it als... |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | Why buy insurance? | One reason is that insurance gives you tranquility. Without insurance, you live with the uncertainty of not knowing if/when disaster is going to strike. Insurance allows you to trade this uncertainty for regular monthly/yearly payments. |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | Why buy insurance? | There's an old saying among commodities producers... If it's likely to happen, but won't kill you, you hedge (save/"self-insure", options, futures). If it's not likely to happen, but would kill you, you insure. Hedging and insuring are both about managing risk. If you feel there is no risk at all, you don't need to do... |
Share your insights or perspective on the financial matter presented in the input. | Why buy insurance? | (Disclosure - I am a real estate agent, involved with houses to buy/sell, but much activity in rentals) I got a call from a man and his wife looking for an apartment. He introduced itself, described what they were looking for, and then suggested I google his name. He said I'd find that a few weeks back, his house burne... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | Why buy insurance? | This is just an addition to base64's answer. In order to maximize your overall wealth (and wellbeing) in a long run, it is not enough to look only at the expected value (EV). In his example of always keeping $9850 or having $10000 99% of the time, EV in the second case is greater ($9900 > $9850) and if you are Bill Ga... |
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