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Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | Can my employer limit my maximum 401k contribution amount (below the IRS limit)? | YMMV, but I don't accept non-answers like that from HR. Sometimes you need to escalate. Usually when I get this sort of thing, I go to my boss and he asks them the question in writing and they give him a better answer. (HR in most companies seem to be far more willing to give information to managers than employees.) O... |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | Why do people buy new cars they can not afford? | There are many reasons for buying new versus used vehicles. Price is not the only factor. This is an individual decision. Although interesting to examine from a macro perspective, each vehicle purchase is made by an individual, weighing many factors that vary in importance by that individual, based upon their specific... |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | Why do people buy new cars they can not afford? | If everyone bought used cars, who would buy the new cars so that everyone else could buy them used? Rental car companies? Your rant expresses a misunderstanding of fundamental economics (as demand for used cars increases, so will prices) but economics is off-topic here, so let me explain why I bought a new car—that I a... |
Share your insights or perspective on the financial matter presented in the input. | Why do people buy new cars they can not afford? | Two reasons: Many people make lots of financial decisions (and other kinds of decisions) without actually running any numbers to see what is best (or even possible). They just go with their gut and buy things they feel like buying, without making a thoroughgoing attempt to assess the impact on their finances. I share... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | Why do people buy new cars they can not afford? | I had a 2000 Chevy Cavalier until late 2011. It worked well, but was very definitely at the end of its life. This was a low-end car, certainly, but I dispute your claim that cars last 20 - 25 years. Consumer Reports apparently says the average life expectancy of a new vehicle is around 8 years or 150,000 miles. When it... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | Why do people buy new cars they can not afford? | The car you dream of might not be available in your local used car market. Or if it is, there might be something wrong with it. Here are some reasons that a person might want to buy a new car. Basically, if you have a picture in your mind of what your next car should look like, it is easier to shop for a new car: New... |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | Why do people buy new cars they can not afford? | Many reasons So in general you are paying more for peace of mind when you buy a new car. You expect everything to be working and if not you can take it back to the dealer to have them fix it for free. |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | Why do people buy new cars they can not afford? | I would answer your question very simply: marketing works. "If you don't have a new F-150, you are not a real man." for men, and "If you don't have a new Honda Pilot your kids are in danger." for woman. One observation that reinforces this are the amount of new(er) Buicks on the road. Five years ago, they were prett... |
Share your insights or perspective on the financial matter presented in the input. | Why do people buy new cars they can not afford? | Most people today (and maybe regardless of era) are irrational and don't properly valuate many of their purchases, nor are they emotionally equipped to do the math properly, including projection into the future and applying probabilities. This compounds. Imagine that each individual is bound to others by a rubber band... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | Why do people buy new cars they can not afford? | If you don't know how to fix your own car or have time to take car parts off of a car at a junk yard, the average amount of money per month you spend on repairing an old car will be greater than the amount of money you spend per month on a new car payment. This is because car repair shops are charging $85 per hour for ... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | Do I still need to file taxes with the Canadian government if I am working in the U.S. on a TN visa for a few years? | You are considered a Canadian resident if you have "significant residential ties to Canada". Because your wife lives in Canada, you therefore are a resident. Even by working temporarily in the US, you are still considered a "factual resident" of Canada. Due to that, your second question is irrelevant. |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | Do I still need to file taxes with the Canadian government if I am working in the U.S. on a TN visa for a few years? | The other answer has mentioned "factual resident", and you have raised the existence of a U.S./Canada tax treaty in your comment, and provided a link to a page about determining residency. I'd like to highlight part of the first link: You are a factual resident of Canada for tax purposes if you keep significant resid... |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | I was given a 1099-misc instead of a w-2 what are my next steps? | I agree that you should have received both a 1099 and a W2 from your employer. They may be reluctant to do that because some people believe that could trigger an IRS audit. The reason is that independent contractor vs employee is supposed to be defined by your job function, not by your choice. If you were a contractor ... |
Share your insights or perspective on the financial matter presented in the input. | Does doing your “research”/“homework” on stocks make any sense? | Doing your homework means to perform what's more accurately called "fundamental analysis". According to proponents of fundamental analysis (FA), it is possible to accurately determine how much a stock should trade for and then buy or sell the stock based on whether it trades above or below this target price. This targe... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | Does doing your “research”/“homework” on stocks make any sense? | TL;DR: Sure, "do your own homework" is sometimes a cop out. But that doesn't mean we shouldn't do our homework. I agree that in many cases this is a cop-out by commentators. However, even if you believe in perfect market efficiency, there is benefit in "doing your homework" for many reasons. One of which you already me... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | Does doing your “research”/“homework” on stocks make any sense? | The markets are not as information efficient as some might have you believe. But on the contrary, looking up what the aggregate professional analysts have said is also part of "doing your homework" |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | Does doing your “research”/“homework” on stocks make any sense? | In fact markets are not efficient and participants are not rational. That is why we have booms and busts in markets. Emotions and psychology play a role when investors and/or traders make decisions, sometimes causing them to behave in unpredictable or irrational ways. That is why stocks can be undervalued or overvalued... |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | Why do interest rates increase or decrease? | My answer is specific to the US because you mentioned the Federal Reserve, but a similar system is in place in most countries. Do interest rates increase based on what the market is doing, or do they solely increase based on what the Federal Reserve sets them at? There are actually two rates in question here; the Wikip... |
Share your insights or perspective on the financial matter presented in the input. | Why do interest rates increase or decrease? | Fundamentally interest rates reflect the time preference people place on money and the things money can buy. If I have a high time preference then I prefer money in my hand versus money promised to me at some date in the future. Thus, I will only loan my money to someone if they offer me an incentive which would be a... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | For very high-net worth individuals, does it make sense to not have insurance? | Yes, and the math that tells you when is called the Kelly Criterion. The Kelly Criterion is on its face about how much you should bet on a positive-sum game. Imagine you have a game where you flip a coin, and if heads you are given 3 times your bet, and if tails you lose your bet. Naively you'd think "great, I should ... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | For very high-net worth individuals, does it make sense to not have insurance? | I think the key to this question is your last sentence, because it's applicable to everyone, high net-worth or not: How would one determine whether they are better off without insurance? In general, insurance is a net good when the coverage would prevent a 'catastrophic' event. If a catastrophic event doesn't happen, o... |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | For very high-net worth individuals, does it make sense to not have insurance? | There are 2 maxims that help make sense of insurance: Following those 2 rules, "normal" insurance makes sense. Can't afford to replace your car? insure it. Can afford to lose your TV? Don't insure it. People with a net worth in the low millions have very similar insurance needs to the middle class. For example, they mi... |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | For very high-net worth individuals, does it make sense to not have insurance? | The point of insurance is to trade high variable costs for much lower fixed costs. The question isn't whether you can afford what would be a catastrophic event for anyone else, but whether it would be better to pay a small amount regularly vs. a possibly larger amount occasionally. One of the reasons to buy insurance i... |
Share your insights or perspective on the financial matter presented in the input. | For very high-net worth individuals, does it make sense to not have insurance? | It depends. "High net worth individuals" is very subjective. Lets say a person is worth 1.5 million. High, but not super high. For one, they should have an umbrella policy. Until your net worth is above 300K, you really don't need an umbrella policy. They should insure their home and cars, but should probably ha... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | For very high-net worth individuals, does it make sense to not have insurance? | The general answer to this is "yes". When you're dealing with single-digit millionaires, the answer is that their insurance habits and needs are basically the same as everyone else. When you get into the double digit and triple digit millionaires, or people worth billions, they have additional options, but those basi... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | For very high-net worth individuals, does it make sense to not have insurance? | Simply put, it makes sense from the moment you can afford the loss without negative consequences. For example, if your car costs $20000 and you happen to have another $20000 laying around, you can choose not to insure your car against damage. In the worst case, you can simply buy a new one. However, not insuring your c... |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | For very high-net worth individuals, does it make sense to not have insurance? | There is an economic, a social and a psychological side to the decision whether to buy insurance or not, and if yes, which one. Economically, as you say already in your question, an insurance is on average a net loss for the insured. The key word here is "average". If you know that there are many cancer cases in your... |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | For very high-net worth individuals, does it make sense to not have insurance? | I'm going to take a very crude view of this: Suppose that you have an event that would cost $100,000 if it occurred. If there's a 10% chance that it'll happen to you and the insurance costs less than $10,000, you'll make a profit "on average." This is, of course, assuming that you could afford a $100,000 loss. If you c... |
Share your insights or perspective on the financial matter presented in the input. | For very high-net worth individuals, does it make sense to not have insurance? | While a lot of the answers focus on cost to replace and how much money you should have for tangible goods. There are a few more issues to consider. However before we get started, these issues are not related to ones net worth. They are related to other factors. Having money certainly helps, but someone worth only $10 ... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | For very high-net worth individuals, does it make sense to not have insurance? | The point about insurance is solidarity. Think about this: In London a few hundred years ago people first started insuring their houses against fire. There were several insurance companies, and if you used one you got a marker on your house. So if your house caught fire they would come and check, and they would put the... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | For very high-net worth individuals, does it make sense to not have insurance? | I think that insurance is one of the best things ever created for this reasons: |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | For very high-net worth individuals, does it make sense to not have insurance? | Let's face it: most people pay more in insurance premiums than they "get back" in claims. I put "get back" in quotes because, with very few exceptions, the money paid out in claims does not go to the insured, but to others, such as doctors and hospitals. But even if you ignore the question who does the money actually... |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | For very high-net worth individuals, does it make sense to not have insurance? | Indeed, there is conservation of money. If the insurance companies have those big buildings and television commercials and CEOs, then that money comes from only one place: the insurance premiums of customers. To say insurance is a good deal is either The benefit and cost of insurance for most: Indeed, of all the answ... |
Share your insights or perspective on the financial matter presented in the input. | For very high-net worth individuals, does it make sense to not have insurance? | Everyone is usually better off without insurance. A very few people are much better off with insurance. Insurance is a gamble and when you lose, you win. Very few people lose badly enough to win. Most people just pay money into insurance and never get as much back as they pay in. For most people, in most lives, in... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | At tax time, what is the proper way to report cryptocurrency earnings and fiat income when you've started with “nothing”? | In 2014 the IRS announced that it published guidance in Notice 2014-21. In that notice, the answer to the first question describes the general tax treatment of virtual currency: For federal tax purposes, virtual currency is treated as property. General tax principles applicable to property transactions apply to transac... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | Relative worth of investment versus spending for the economy | I don't think that there's a specific number or index that gives you what you're looking for. I think the closest thing to it would be the velocity of money, which is a measure of how often money changes hands. Also, for what it's worth, I believe that this concept is controversial in some circles. |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | Relative worth of investment versus spending for the economy | I believe you're looking for some sort of formula that will determine how changes in savings, investing, and spending will affect economic growth. If such a formula existed (and worked) then central planning would work since a couple of people could pull some levers to encourage more savings, or more investing, or mor... |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | Which % of the global economy is considered “emerging”? | The company that runs the fund (Vanguard) on their website has the information on the general breakdown of their investments of that fund. They tell you that as of July 31st 2016 it is 8.7% emerging markets. They even specifically list the 7000+ companies they have purchased stocks in. Of course the actual investment a... |
Share your insights or perspective on the financial matter presented in the input. | Recommended finance & economy book/blog for a Software Engineer? | Start at Investopedia. Get basic clarification on all financial terms and in some cases in detail. But get a book. One recommendation would be Hull. It is a basic book, but quite informative. Likewise you can get loads of material targeted at programmers. Wilmott's Forum is a fine place to find coders as well as financ... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | Recommended finance & economy book/blog for a Software Engineer? | Another good economic comment blog is Naked Capitalism. |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | Recommended finance & economy book/blog for a Software Engineer? | For economics I recommend mises or these videos to get you started. For daily critical analysis of financial markets, keynesian government policies, and other interesting reading I recommend zerohedge. I've learned more about financial markets and government regulations by reading the comments section on zerohedge art... |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | How does the debt:GDP ratio affect the country's economy? | Is it not that bad? Depends how bad is bad. The problems causes by a government having large debt are similar to those caused by an individual having large debt. The big issue is: More and more of your income goes to paying interest on the debt, and is thus not available for spending on goods and services. If it gets b... |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | What is the effect of a high dollar on the Canadian economy, investors, and consumers? | It depends primarily on how the Canadian economy is designed i.e export oriented or import oriented. If you look at this, it shows more or less equal amount of exports and imports. For the specific case of Canada, the exports would become costlier, because of a costlier dollar, but at the same time imports would become... |
Share your insights or perspective on the financial matter presented in the input. | What are the benefits of opening an IRA in an unstable/uncertain economy? | IRAs have huge tax-advantages. You'll pay taxes when you liquidate gold and silver. While volatile, "the stock market has never produced a loss during any rolling 15-year period (1926-2009)" [PDF]. This is perhaps the most convincing article for retirement accounts over at I Will Teach You To Be Rich. An IRA is just a ... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | What are the benefits of opening an IRA in an unstable/uncertain economy? | Regarding investing in gold vs. stocks, I don't think I could say it better than Warren Buffett: You could take all the gold that's ever been mined, and it would fill a cube 67 feet in each direction. For what that's worth at current gold prices, you could buy all -- not some -- all of the farmland in the Uni... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | What are the benefits of opening an IRA in an unstable/uncertain economy? | Even Gold lost 1/2 of it's value between 1980 and 2000. You would not have fared well if you retired during that period heavily invested in Gold. http://www.usagold.com/reference/prices/history.html You said yourself that one can not foresee what the future will bring. At least IRA's force you to into dollar cost ave... |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | What are the benefits of opening an IRA in an unstable/uncertain economy? | You bring up a valid concern. IRAs are good retirement instruments as long as the rules don't change. History has shown that governments can change the rules regarding retirement accounts. As long as you have some of your retirement assets outside of an IRA I think IRAs are good ways to save for retirement. It's not ... |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | What are the benefits of opening an IRA in an unstable/uncertain economy? | Yes, it's possible to withdraw money without penalty but you have to do it in a special way. For example you have to withdraw the same amount every year until you retire: Tapping Your IRA Penalty-Free as for unstable economy - you can trade many instruments in your IRA. you can do bonds, mutual funds, stocks, ETFs or ... |
Share your insights or perspective on the financial matter presented in the input. | What are the benefits of opening an IRA in an unstable/uncertain economy? | As I stated in my comment on @JCotton's answer, the only way you benefit by putting your money in an IRA or other tax-deferred vehicle is if you expect to have a lower tax rate when you withdraw than when you put the money in. If you look at @JCotton's numbers and remember to pay taxes when you withdraw the money in 3... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | What are the benefits of opening an IRA in an unstable/uncertain economy? | Your are mixing multiple questions with assertions which may or may not be true. So I'll take a stab at this, comment if it doesn't make sense to you. To answer the question in the title, you invest in an IRA because you want to save money to allow you to retire. The government provides you with tax incentives that mak... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | Why is everyone saying how desperately we need to save money “in this economy”? | You ask a few different, though not unrelated, questions. Everywhere you turn today, you hear people talk about how much they need to save or how important it is to find a good deal on things "in this economy". They use phrases like "now more than ever" and "in these uncertain times". It seems to be a lot ... |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | Why is everyone saying how desperately we need to save money “in this economy”? | As you point out in your question your risk level is personal. If you really believe your job is stable there is no more risk. However the overall evidence is that most jobs are less stable, and if you do lose your job you're likely going to be out of work for a while. One thing to consider though is that if you hav... |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | Why is everyone saying how desperately we need to save money “in this economy”? | I would add to the other excellent answers that another factor besides just high unemployment numbers is the fear people have regarding the "financial" aspects of the country, that is the value of stocks and the value of the dollar. When the economy is sluggish it means people aren't buying enough, therefore companies... |
Share your insights or perspective on the financial matter presented in the input. | Why is everyone saying how desperately we need to save money “in this economy”? | It's all about risk. In 1990, expressing the idea of the US defaulting on debt payments would result in you being labelled as a crank. Yet in 2011, the President and Speaker of the House played chicken with the credit of the United States, and have a date to do it again in December 2011. |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | Why is everyone saying how desperately we need to save money “in this economy”? | Saving some money for the future is a good idea. But how much to save is a tough question. I retired with a small fraction of what the experts said I would need. Three years later, I can confidently say I did not even need what I had saved. |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | Why is everyone saying how desperately we need to save money “in this economy”? | This was called Financial repression by Edward S. Shaw and Ronald I. McKinnon from Stanford (https://en.wikipedia.org/wiki/Financial_repression). Financial repression is the situation, when government is stealing from people, who rely heavily on saving, rather then on spending. Meaning that your saving rates will be a ... |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | Will I get taxed on withdrawals from Real Cash Economy games? | Situation #1: I keep playing, and eventually earn 1000 PED. I withdraw this. Will I get taxed? If so, by how much? This is probably considered an "award", so whatever your country taxes for lottery/gambling winnings would be applicable. If there's no specific taxation on this kinds of income - then it is ordinary inc... |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | Will I get taxed on withdrawals from Real Cash Economy games? | Income from a hobby is tax exempt under Dutch law. To consider whether it's hobby, a few rules are applied such as: How much time do you spend on the activity? And is the hourly wage low? Obviously, having a boss is a sure sign of it not being a hobby. The typical example is making dolls and selling them on a crafts fa... |
Share your insights or perspective on the financial matter presented in the input. | Investment / Savings advice in uncertain economy | $23,000 Student Loans at 4% This represents guaranteed loss. Paying this off quickly is a conservative move, while your other investments may easily surpass 4% return, they are not guaranteed. Should I just keep my money in my savings account since I want to keep my money available? Or are there other options I have... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | Investment / Savings advice in uncertain economy | An alternative to a savings account is a money market account. Not a bank "Money Market" account which pays effectively the same silly rate as a savings account, but an actual Money Market investment account. You can even write checks against some Money Market investment accounts. I have several accounts worth about ... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | Where should I park my money if I'm pessimistic about the economy and I think there will be high inflation? | For diversification against local currency's inflation, you have fundamentally 3 options: Depending on how sure you are on your prediction, and what amount of money you're willing to bet to "short the country", you might also consider a mix of approaches from the above. Good luck. |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | Where should I park my money if I'm pessimistic about the economy and I think there will be high inflation? | If you think your cash will buy fewer goods in the future due to inflation, are there goods you will want or need in the future that you can purchase now? I think the cost of storage would need to be less than the inflation in price for this to make sense. If you used commodity trading there may not actually be a stora... |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | Where should I park my money if I'm pessimistic about the economy and I think there will be high inflation? | Given those assumptions (which I happen to think are reasonable) it seems to me the obvious place is to buy non-Australian assets, such as the Vanguard VTS (total US share market) and VEU (world ex-US) ETFs, and perhaps also some international fixed-interest ETFs. I think keeping a certain amount of cash would be pru... |
Share your insights or perspective on the financial matter presented in the input. | Where should I park my money if I'm pessimistic about the economy and I think there will be high inflation? | Taking into account your POV I would recommend mostly goods that will be harder to obtain, precious metals (not only gold) and forex (although the forex aproach depends on some other country not having troubles with it's own economy which in a world as interconnected as ours by internet and all the new technologies doe... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | Where should I park my money if I'm pessimistic about the economy and I think there will be high inflation? | Typically in a developed / developing economy if there is high overall inflation, then it means everything will rise including property/real estate. The cost of funds is low [too much money chasing too few goods causes inflation] which means more companies borrow money cheaply and more business florish and hence the st... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | Where should I park my money if I'm pessimistic about the economy and I think there will be high inflation? | Apart from some of the excellent things others say, you could borrow money in AUD and invest that in another currency (that's risky but interesting) if the AUD interest rate is low and the other countries interest rate is higher, you'll eventually win. Also, look at what John Paulson did in 2007, 2008... I wish I'd tho... |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | Where should I park my money if I'm pessimistic about the economy and I think there will be high inflation? | The best investment is always in yourself and increasing your usable skills. If you invest the money in expanding your skills, it won't matter what the economy does, you will always be useful. |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | How is gold shared in worldwide economies? | Money is no longer backed by gold. It's backed by the faith and credit of the issuing government. A new country,say, will first trade goods for dollars or other currency, so its ownership of gold is irrelevant. Its currency will trade at a value based on supply/demand for that currency. If it's an unstable currency, in... |
Share your insights or perspective on the financial matter presented in the input. | How is gold shared in worldwide economies? | You might want to read about about the Coase Theorem. "In law and economics, the Coase theorem, attributed to Ronald Coase, describes the economic efficiency of an economic allocation or outcome in the presence of externalities. The theorem states that if trade in an externality is possible and there are no transactio... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | How is gold shared in worldwide economies? | I think you are asking a few questions here. Why is gold chosen as money? In a free market there are five characteristics of a good money: Gold and silver meet all five characteristics. Diamonds are not easily divisible which is why they are not normally used as money. Copper, Iron, and lead are not scarce enough - y... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | Totally new to finance, economy, where should I start? | A couple of good books I enjoyed and found very understandable (regarding the stock market): As for investment information you can get lost for days in Investopedia. Start in the stock section and click around. The tutorials here (free) give a good introduction to different financial topics. Regarding theoretical know... |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | Totally new to finance, economy, where should I start? | If you're looking to invest using stocks and shares, I recommend you set up an account at something like Google Finance - it is free and user-friendly with lots of online help. You can set up some 'virtual cash' and put it into a number of stocks which it'll track for you. Review your progress and close some positions ... |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | Totally new to finance, economy, where should I start? | I'd start with learning how to read a company's financial statement and their annual report. I would recommend reading the following: All three books are cheap and readily available. If you really want to enhance your learning, grab a few annual reports from companies' websites to reference as you learn about different... |
Share your insights or perspective on the financial matter presented in the input. | Totally new to finance, economy, where should I start? | I'm going to be a bit off topic and recommend 'The Only Investment Book You'll Ever Need' by Andrew Tobias. It doesn't start with describe the workings of the stock market. Instead, it starts with making sure you have a budget and have your basic finances in order BEFORE going into the stock market. This may not sound ... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | Entering the stock market in a poor economy | Forecasts of stock market direction are not reliable, so you shouldn't be putting much weight on them. Long term, you can expect to do better in stocks, but obtaining this better expected return has the danger of "buying in" to the market at a particularly bad moment, leading to a substantially lower return. So mitig... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | Entering the stock market in a poor economy | Buy low and sell high. Right now stocks are cheap (or at least cheapish). If you wait for better forecasts, the price will be higher. They might go down still farther, but no one knows for sure when that will happen, or where the bottom is -- despite what the talking heads on TV say. Remember that what you really c... |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | Entering the stock market in a poor economy | Well, you probably already know this, but no-one can guarantee you results...in any economic climate. Even traditionally low risk investments now seem higher risk to people when the economic forecasts are grim. That being said, 0.5% is pretty low. So, where does that leave you? Why not start with a risk tolerance an... |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | Entering the stock market in a poor economy | Are you kidding? The stock markets just took a nose dive this week. Perfect buying opportunity. Just be sure to dollar cost average your way in to avoid excessive timing risk. |
Share your insights or perspective on the financial matter presented in the input. | Entering the stock market in a poor economy | If you have a long enough time horizon, investing in the stock market while in a bad economy can turn out to be a very smart decision. If you need access to your capital in the short-term, 1-2 years, then it is probably a bad decision. If you have the ability to ride out the next few years, then you may be buying secur... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | Entering the stock market in a poor economy | Wow I love some of these answers. Remember why you are investing in the first place. For me I like Dividend stocks and Dividend Capturing. Here is why. With over 3500 dividend stock companies paying out dividends this year, that means I can get a dividend check almost every day. What about if the stock goes down you a... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | How should residents of smaller economies allocate their portfolio between domestic and foreign assets? | why should I have any bias in favour of my local economy? The main reason is because your expenses are in the local currency. If you are planning on spending most of your money on foreign travel, that's one thing. But for most of us, the bulk of our expenses are incurred locally. So it makes sense for us to invest ... |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | How should residents of smaller economies allocate their portfolio between domestic and foreign assets? | We face the same issue here in Switzerland. My background: Institutional investment management, currency risk management. My thoughs are: Home Bias is the core concept of your quesiton. You will find many research papers on this topic. The main problems with a high home bias is that the investment universe in your smal... |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | How can a 'saver' maintain or increase wealth in low interest rate economy? | Since the other answers have covered mutual funds/ETFs/stocks/combination, some other alternatives I like - though like everything else, they involve risk: Example of how these other "saving methods" can be quite effective: about ten years ago, I bought a 25lb bag of quinoa at $19 a bag. At the same company, quinoa is... |
Share your insights or perspective on the financial matter presented in the input. | How can a 'saver' maintain or increase wealth in low interest rate economy? | Personally, I invest in mutual funds. Quite a bit in index funds, some in capital growth & international. |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | How can a 'saver' maintain or increase wealth in low interest rate economy? | I think this is a good question with no single right answer. For a conservative investor, possible responses to low rates would be: Probably the best response is somewhere in the middle: consider riskier investments for a part of your portfolio, but still hold on to some cash, and in any case do not expect great resul... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | If our economy crashes, and cash is worthless, should i buy gold or silver | Neither. Food, fuel, and tools. Books on how to make and use basic tools -- the books published for farmers who want to kluge their own solutions might be helpful. Heck, help defend a library; it will be beyond price as soon as things settle out a bit. Having skills like blacksmithing and knowing how to teach could go ... |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | Why are some countries' currencies “weaker”? | 1:30 is not stronger than 1:79. These are just numbers. Trading 1:120 in 2008 and 1:79 now vs. trading 1:31 in 2008 vs 1:30 now is much better criteria to look at to evaluate the strength of the currency, and if you look at that you can see that the Japanese Yen is significantly stronger than the Bhat. While Yen gained... |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | Why are some countries' currencies “weaker”? | The answer from littleadv perfectly explains that the mere exchange ratio doesn't say anything. Still it might be worth adding why some currencies are "weak" and some "strong". Here's the reason: To buy goods of a certain country, you have to exchange your money for currency of that country, especially when you want to... |
Share your insights or perspective on the financial matter presented in the input. | Why are some countries' currencies “weaker”? | You may as well ask why a piece of wood is 25 centimeters long but only 10 inches. Most units of measure are very arbitrary. Somebody decides that this amount of heat or distance or money is a convenient unit, and so that's what they use. Suppose that tomorrow the government issued a whole new currency that had 10 time... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | Why is economic growth so important? | One of the best answers to this question that I've ever read is in a paper published by Robert Lucas in the Journal of Economic Perspectives. That journal is meant to a be a place for experts to write about their area of expertise (in economics) for a general but still technically-minded audience. They recently opened ... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | Why is economic growth so important? | If you have an increasing population but a steady supply of wealth then there will be a perceived effect of decline. As the average person can afford less and less. If inflation is factored in this effect is accelerated as the value of money is reduced but the availability of that money is as well. In this model tho... |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | Why is economic growth so important? | Wealth is not distributed equally in any economy. And, even if it were, differentiation between people would lead to different interests being expressed in different ways. As people either attempt to earn more (to improve their situation) or different people express those interests in different ways (saving money to g... |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | Why is economic growth so important? | There is an economic principle called "non-satiation," which translated into plain English means "people always want more." (This was best illustrated in the movie, Oliver Twist, "Please sir, can I have MORE?") Over time, most people won't be satisfied with "things as they are." Which is why growth is so important. Man... |
Share your insights or perspective on the financial matter presented in the input. | Why is economic growth so important? | nan |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | What is the main purpose of FED increase and decrease interest rate? | When inflation is high or is rising generally interest rates will be raised to reduce people spending their money and slow down the rate of inflation. As interest rates rise people will be less willing to borrow money and more willing to keep their money earning a good interest rate in the bank. People will reduce thei... |
Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. | what's the best option to save money on everyday expenses? | There is a saying in business: what gets measured gets done. Track every expense you make. Later, look over what you have learned. If 5% of your total budget is going to something frivolous, maybe you could halve it? If 1% or 0.1% is going to that frivolous expense, there's not much to be gained even by eliminating it.... |
Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering | What implications does having the highest household debt to disposable income ratio have on Australia? | Stock market Tends to follow the DJIA and FTSE, so unlikely to see an Australia-only crash, especially while resources are doing so well. If China's growth slows before other ailing sectors improve, a downturn becomes more likely and the potential severity of the downturn increases. Economy A huge question to which I w... |
Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. | What implications does having the highest household debt to disposable income ratio have on Australia? | I'd like to see a credible source for "the highest", but it's certainly fairly high. Household debt could be broadly categorized as debt for housing and debt for consumption. Housing prices seem very high compared to equivalent rental income. This is generating a great deal of debt. Keynes(?) said that "if something ... |
Share your insights or perspective on the financial matter presented in the input. | What implications does having the highest household debt to disposable income ratio have on Australia? | It is basically the same situation what US was when the crash happened. People took on debt without the means to pay, even with awful credit records. But the problem isn't the debt people take on themselves, but with the limited disposable income they have how efficiently can their debts be serviced. And how do banks w... |
Offer your thoughts or opinion on the input financial query or topic using your financial background. | What economic growth rate is required to halve U.S. unemployment? | Two points. |
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