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Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Will credit card payment from abroad be suspicious as taxable income? ### Answer: US bank deposits over $10K only need to be reported to FinCEN (Financial Crimes Enforcement Network- a bureau of the US Department of Treasury) if the deposits are made in cash or other money instruments where the source cannot be traced (money orders, traveler checks, etc). Regular checks and wires don't need to be reported because there is a clear bank trail of where the money came from. If your family member is giving you money personally (not from a business) from a bank account which is outside of the US, then you only need to report it if the amount is over $100K. Note, you would need to report that regardless of whether the money was deposited into your US bank account, or paid directly to your credit cards on your behalf, and there are stiff penalties if you play games to try to avoid reporting requirements. Neither deposit method would trigger any taxable income for the scenario you described. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How can I improve my auto insurance score? ### Answer: Move to a small town in an insurance friendly state. - Certian states like Florida are considered high risk for doing business for insurance companies. Get a (relatively)new midsize sedan in white, tan, or brown. These colors are the least likely to get stolen and the modern midsized sedan is considered the safest vehicles to drive. Drive less than 100 miles a month - The less you drive the less likely you are to be involved in an accident Go 9 years with no claims, tickets, or late payments and maintain a valid drivers license and Insurance. Drivers who go for long periods with out incident are more likely to be safe drivers. Have an income in upper middle class. Drivers in this bracket tend to be statistically safer drivers and are the least likely to be involved in fraud. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How can I improve my auto insurance score? ### Answer: Auto Insurance score is in no way related to your driving habits, instead it is based on your credit usage. You are often punished for having more than one or two hard inquires in a year and they also frown upon having many lines of credit even though that helps your credit utilization. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How can I improve my auto insurance score? ### Answer: As a recent college grad who switched to his own car insurance, many of the things I did myself are reflected here. The #1 thing I did was find out what coverages I had, what coverages some friends of mine had (car enthusiasts mostly - they're the most informed on this stuff), and then figured out what kind of coverages I wanted. From there, I went around getting quotes from anyone and everyone and eventually built out a sizeable spreadsheet that made it obvious which company was going to offer me the best rate at a given coverage level. Something else to remember - not all insurance companies look at past accidents and violations (speeding, etc) the same. In my search, I found some have a 3-year scope on accidents and violations, while others were as much as 5 years. So, if your driving record isn't a shining example (mine isn't perfect), you could potentially save money by considering insurance through a company that will see fewer violations/incidents than another because of the size of their scope. I ended up saving $25/mo by choosing a company that had a 3-year scope, which was on the cusp of when my last violation/incident occurred. Insurance companies will also give out discounts for younger drivers based on GPA average. If you have kids and they maintain a high GPA, you might be able to get a discount there. Not all companies offer it, so if they do it's worth finding out how much it is ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Computer vendor not honoring warranty. What's the next step? ### Answer: You're probably best off going to a different store to fix the computer. Right now you don't have "damages." You could sue him but, there's no thing to sue for. If you sue for your original costs, you'd have to return the computer and probably only receive a portion of your original costs, less court filing fees. If you have someone else fix your computer you can sue him for the cost to fix your computer. You'll take him to small claims court, win or lose you probably won't get anything from him. If you win, you'll have a piece of paper (judgement) that says, "Yep, that guy owes you money" if you lose you won't even have that. You could report him to the BBB or some other business agency but that doesn't help you fix the computer. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Computer vendor not honoring warranty. What's the next step? ### Answer: The issue yo have to consider is that under many state laws, you must give a merchant three opportunities to correct an issue before you can sue them, so check with your state before considering that option. Here's a link to the Federal Trade Commission's warranty information page, which may give you some ideas about what your options are. Keep in ind, if you let someone else work on the computer rather than the store you bought it from, you might give the guy a valid claim in court to throw out your lawsuit! Many times, warranties will spell out the conditions under which repair work can or must be done, so make sure you follow every step to the letter in order to preserve your claim. I would strongly suggest that you start creating a paper trail for your claim. Start by writing a very precise and detailed letter to the store owner, with copies of all relevant documents (your receipts, warranty papers, etc.) included. Explain the entire history, including what steps you've taken to date to get him to honor the warranty. Offer him the option to let you take the computer to another shop for repairs at his expense. Then, send the letter by certified mail, return receipt requested, to the store owner so that he can't deny receiving your letter. This is all in order to make the best case you can for your claim just in case you do have to sue him. Do not take the computer to anyone else until or unless he tells you in writing that he is willing to let you do that. You don't want to risk him arguing that the other shop is responsible for the problems now. I hope this helps. Good luck! ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Computer vendor not honoring warranty. What's the next step? ### Answer: Give him a second chance to fix it. Some computer problems are hard to nail down. THIS: So you're a tech. It's common to work a problem, do procedure A and B that should've fixed it, test repeatedly to make sure it's fixed, and hand it back to the customer... and then the customer, under his operating conditions, has it fail again. If it comes back to you, you have the foreknowledge that A and B didn't work. And you immediately try C and get it fixed. This knowledge does not magically transfer to other shops. So the user goes into Yelp Mode and storms off angry to another shop... they blindly try A and B again, burn in, send him home, it fails again, user's even madder. This is how computers DON'T get fixed. 5% discount for cash is reasonable. If you want to know why that's normal, sign up for Square. Credit cards and checks have a significant overhead, including the risk of bounces and chargebacks, and that adds up to about 5%. Only a few businesses actively solicit it, but many family-owned businesses would accept it if you offered. So firstoff, does the shop give you a creep factor other than your feelings about him not fixing it the first time? If so, cut your losses and bolt. You will definitely need to pay cash to have this fixed properly. Otherwise take it back to him and give him a chance to fix it properly. Having dealt with a lot of customers, what you say sounds an awful lot like "problem so minor I was able to use it for 9 months before bothering to get it fixed which I'm only doing because the warranty is ending", and therefore, "I am resentful about having to give it up for an extended period of time to have it fixed because the problem Just Isn't That Important". If that's true, you're in a values conflict and you might just be better off recognizing that. Cheap PCs are cheap. But the vast majority of niggling PC problems are not in fact hardware problems, they are just MS-Windows being MS-Windows. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Why haven't there been personal finance apps or softwares that use regression modeling or A.I.? ### Answer: What would they be trying to predict? The value YNAB and Mint provide is objective truth about what you've spent. They can force you to think about the tradeoffs inherent in budgeting by showing that you've overspent one category, and making you decide where to find the money to cover it. They can call your attention to a credit card swipe that's larger than you intended, to a subscription you didn't intend to keep, etc. by just generally getting you to read and think about your transaction history and the sums of transactions per category and overall. Prediction doesn't really enter into it. One way to understand Mint's business model is as a service that collects training data for machine learning models that do try to predict things, such as how stock prices will move or whether users will click on certain ads. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Why haven't there been personal finance apps or softwares that use regression modeling or A.I.? ### Answer: How would they make money from it? They sell you the software for $100 (US example; could as easily be 100 Euros or 10,000 Japanese Yen). You use it to make recommendations on your blog. Your blog becomes rich from advertising. They sold $100 worth of software. If they spent $1 million in labor developing it, they're way behind. Another problem is that the software would stop working and need adjusted periodically. This is easy to do on a server but annoying on a PC. And who pays for the adjustments? Put both those things together, and it's a lot easier to do on a server. Another advantage is that a server can get a better data feed as well. Pay a premium for the detailed information rather than relying on public sources. And people are used to renting server access where they expect to buy software once. Another issue is that they are unlikely to beat the market this way. Yes, AIs have done so. But that's the latest AI, constantly adjusted. This is going to be a previous generation AI. It's more likely to match the market. And we already have a way to match the market: an index fund. If someone had a brilliant AI, the best use would probably be to sell it to a fund manager. The fund manager could then use the AI to find opportunities for its existing investors. Note that a $10 billion fund with a 10% return that gives a .1% commission would be paying $1 million. And that has no marketing or packaging overhead. Think $10 billion is a lot? Fidelity has $2 trillion. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Why haven't there been personal finance apps or softwares that use regression modeling or A.I.? ### Answer: Consumer facing finance is heavily regulated. You are liable for the recommendations you make; if they are based on a black box you risk problems when sued. It is difficult to explain in a court of law why a neural network came to a particular conclusion. It is much easier to provide advice (models) in the "educated counterparty" market. Not only do institutional investors in general expect to pay for a quality advice (consumers in general expect to get online advice for free) but the legal implications are different. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Ordering from Canada, charged in CAD or USD? ### Answer: Typically, businesses always charge their 'home' currency, so if the shop is in Canada, you will pay Canadian Dollars. Normally you don't have any choices either. Your credit card company will convert it to your currency, using the current international currency exchange rate (pretty good), plus a potential fee between 0 and 5% - depending on your credit card (not so good). If it is a significant amount, or you plan to do that more than once, and if you have multiple credit cards, check first to see which one has the lowest international fee; 0% is not uncommon, but neither is 3 or 4%. If it's a 10$ thingy, it's probably not worth the time; but 4% of 1000 is already 40$... As of right now, the currency exchange rate is 1.33, so you would pay ~75 USD; plus the potential fee, 0$ - 4$. Understand that this exchange rate is floating continuously; it probably won't change much, but it will change. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Are credit histories/scores international? ### Answer: Currently the credit history are not International but are local. Many countries don't have a concept of credit history yet. Having said that, if you are moving to US, depending on your history in your country, you can ask the same bank to provide you with a card and then start building history. For example in India I had a card with Citi Bank and when I moved to US for a short period, I was given a card based on my India Card, with equivalent credit in USD. If you are moving often internationally, it would make sense to Bank with a leading bank that provide services in geographies of your interest [Citi, HSBC, etc] and then in a new country approach these institutions to get you some starting credit for you to build a history. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Are credit histories/scores international? ### Answer: It's not just that credit history is local; it's that it's a private business run for profit. The "big three" credit bureaus in the US are Experian, Equifax and Transunion. They collect information on debt usage and abuse from various companies in the US, and charge a fee to provide that information (and their judgement of you) to companies interested in offering you further credit. But there's nothing stopping a company from collecting international credit histories, or specialized credit histories either (for instance, there's a company called ChexSystems which focuses on retail purchase financing (mostly auto) and checking account abuse, while ignoring other types of lending). That being said, I don't know of any companies which currently collect international credit histories. Perhaps in Europe, with more nations in close geographic proximity, there would be, but not in North America. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Are credit histories/scores international? ### Answer: Credit history is local, so when you move to the US you start with the blank slate. Credit history length is a huge factor, so in the first year expect that nobody would trust you and you may be refused credit or asked for deposits. I was asked for deposits at cell phone company and refused for store cards couple of times. My advice - get a secured credit card (that means you put certain sum of money as a deposit in the bank and you get credit equal to that sum of money) and if you have something like a car loan that helps too (of course, you shouldn't buy a car just for that ;) but if you're buying anyway, just know it's not only hurting but also helping when you pay). Once you have a year or two of the history and you've kept with all the payments, you credit score would be OK and everybody would be happy to work with you. In 4-5 years you can have excellent credit record if you pay on time and don't do anything bad. If you are working it the US, a lot of help at first would be to take a letter from your company on an official letterhead saying that you are employed by this and that company and are getting salary of this and that. That can serve as an assurance for some merchants that otherwise would be reluctant to work with you because of the absence of credit history. If you have any assets overseas, especially if they are held in a branch of international bank in US dollars, that could help too. In general, don't count too much on credit for first 1-2 years (though you'd probably could get a car loan, for example, but rates would be exorbitant - easily 10 percentage points higher than with good credit), but it will get better soon. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Are credit histories/scores international? ### Answer: Some countries in European Union are starting to implement credit history sharing, for example now history from polish bureau BIK and German Schufa are mutually available. Similar agreements are planned between polish BIK and bureaus in the Netherlands and United Kingdom. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Any problem if I continuously spend my credit card more than normal people? ### Answer: How will going from 75% Credit Utilization to 0% Credit Utilization affect my credit score? might answer your question if US based. In the US, what counts is what shows on the bill. I've run $20K through a card with a $10K limit, but still ended the month under $2K by making extra payments. As long as you stay ahead of the limit by making mid-cycle payments, I see no issue with this strategy. If you keep running $30K/mo through a card with a $10K limit, the bank will eventually catch this and raise your limit as you will have proven you are more credit worthy. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Any problem if I continuously spend my credit card more than normal people? ### Answer: Sometimes when you are trying to qualify for a loan, the lender will ask for proof of your account balances and costs. Your scheme here could be cause for some questions: "why are you paying $20-30k to your credit card each month, is there a large debt you haven't disclosed?". Or perhaps "if you lost your job, would you be able to afford to continue to pay $20-30k". Of course this isn't a real expense and you can stop whenever you want, but still as a lender I would want to understand this fully before loaning to someone who really does need to pay $20-30k per month. Who knows this might hiding some troublesome issues, like perhaps a side business is failing and you're trying to keep it afloat. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Is there a rule of thumb to help “Sanity check” insurance costs? ### Answer: Your best bet would be to find an independent Property and Casualty Insurance agent and buy through him/her. Insurance agents make a commission, yes - BUT - the cost to consumer is THE SAME whether you buy through an agent or through directly through the company. Any P&C agent would be happy to run your numbers for you and tell you what the cheapest deal is. Just make sure you find someone who writes for several different large insurers. Obviously, some P&C Insurance agents are slick salesy types, which can get annoying, but if you find someone nice, he or she can help you out at no cost to you (they are paid by the insurance company they place the business with). If you are straightforward with the agent about exactly what your needs, they can get you quotes quickly and save you a lot of time and hassle. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Using a Roth IRA instead of a college savings account ### Answer: One problem with this plan is that the individual must have earned income to contribute to a Roth IRA. If you have an infant, unless she is the new Gerber baby or something like that, there is probably no legitimate way for her to earn income. If you own a business and have kids who are older, you can employ them to do work for you, but they must really do work and earn around the market rate for that work. Otherwise, it is unlikely that they will be able to earn enough to fund an IRA until they are teenagers. When they are old enough to work, you can "match" their earnings by contributing the same amount to a Roth IRA on their behalf, but this will not give you the amount of contributions and growth time that you were counting on. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Using a Roth IRA instead of a college savings account ### Answer: The problem with this plan is that in order for your children to put money in their own IRA, they need earned income of their own. If your child doesn't have $3000 in earned income for the year, you won't be able to put the $3000 into their Roth IRA. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How long does it take for money to transfer into a mastercard? ### Answer: In a nutshell, as long as they (Sparkasse) choose to. I work with banks where it happens the moment I submit the transaction (so the next screen already shows the new totals), and I work with banks that make it take 3 days. In the past, Sparkasse and Raifeissenkassen were especially famous to take a looong time ('Wir nehmen mehr als Geld und Zinsen...' - they supposedly work with the money inbetween, as it is gone from the source account but not arrived in the target account yet); that might have changed (or not). Probably Sparkasse has a statement in their fineprint on how long they make it take. I would expect one business day in today's environment, but I didn't look it up. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Should I stockpile nickels? ### Answer: At one point it was illegal to melt silver coins in the US, but it is legal now. I don't know that will happen with copper coins, but that's what happened with silver coins. Accumulating nickels and leaving them as-is (in their spendable state) is legal. It's also a way to take physical ownership of copper. I expect to see more sales of nickels based on weight. People are already selling high-copper-content cents on eBay, by weight. There are machines in production that sort the zinc ones from the copper ones. Gresham's Law has small business backing. ;) Copper cents are already worth twice their face value in the copper content. Nickels will get up there, too. They are awfully heavy and bulky relative to their value, though. Precious metals give you better bang for your ounce. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Should I stockpile nickels? ### Answer: Probably a big fat NO. Update re this edit: NOTE: I'm not suggesting that I melt the coins. I'm just suggesting that I hold onto the nickels and sell them later when they are worth more than 5 cents. For example, you can sell coins with silver in them for far above their face value. This is silly as an investment. Right up there with stockpiling cars. :) The increase in value will likely never be enough to make the cost/hassle of storage worth it. As MrChrister states, it is a fine idea as a collection, but not as a stockpile. Edit (from the comments): I am surprised I did not latch onto this in the previous update. Silver is considered a previous metal, nickel and copper are not. BTW, the U.S. nickel is 25% nickel and 75% copper. Also, how in the world do you plan on actually selling a stockpile of nickels? ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Should I stockpile nickels? ### Answer: Stockpile? No. Keep a few around? Sure, if you are a collector. I used to collect pennies and I thought the steel pennies from WWII were neat. I do believe I paid about $0.01 for them at the coin shop. They might be worth $0.15 if in great condition today. No harm in finding $20 worth of really nice nickels, maybe in chronological order and from the different mints. Put them in a collector case so they stay nice and chuck them in your fireproof safe with your house deed and insurance policies. But I don't think you are going to hit it particularly big, but it might be a nice thing to pass along as an inheritance. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Should I stockpile nickels? ### Answer: It seems like a lot of hassle to make a few bucks. $1,000 in nickels would weight 100kg. I'd rather put my money in ING or into a bond mutual fund like VBMFX. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Should I stockpile nickels? ### Answer: The question I think is not: "What is a certain material worth in a coin" but "What is a certain material worth in a coin and how much does it cost to get it out of there". Just because something contains a certain element doesn't mean that you can get to it cheaply. Also as George Marian said: I don't think that it is legal to melt coins. So if the time comes you would first have to find a company willing to process the coins etc. Also you should not only compare what it is worth now and at a later time but also what that money would be worth if you put it into a high yielding savings account or something like that. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Should I stockpile nickels? ### Answer: Trying to engage in arbitrage with the metal in nickels (which was actually worth more than a nickel already, last I checked) is cute but illegal, and would be more effective at an industrial scale anyway (I don't think you could make it cost-effective at an individual level). There are more effective inflation hedges than nickels and booze. Some of them even earn you interest. You could at least consider a more traditional commodities play - it's certainly a popular strategy these days. A lot of people shoot for gold, as it's a traditional hedge in a crisis, but there are concerns that particular market is overheated, so you might consider alternatives to that. Normal equities (i.e. the stock market) usually work out okay in an inflationary environment, and can earn you a return as they're doing so.... and it's not like commodities aren't volatile and subject to the whims of the world economy too. TIPs (inflation-indexed Treasury bonds) are another option with less risk, but also a weaker return (and still have interest rate risks involved, since those aren't directly tied to inflation either). ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Should I stockpile nickels? ### Answer: I agree with George. I'll also add that you have to think about the cost of melting the coins for their raw materials. Not exactly free in terms of equipment, facilities and energy costs. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Should I stockpile nickels? ### Answer: The collectible value of coins will probably increase with the underlying metal value. I'd collect coins for that reason and because I enjoy collecting them. I wouldn't recommend buying bags of rolled nickels or anything though. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Should I stockpile nickels? ### Answer: You would have to collect an awful lot to make it profitable. The melting process alone will cost an arm and a leg. Go silver hunting with rolls of Half dollars. You might strike it lucky with rolls of Kennedy's. Its good fun too :) 1964 Kennedy's 90% silver 1965-1970 Kennedy's 40% silver I go looking on ebay collecting for typo errors on pre 1920's British silver coinage. Picked up a George 3rd 1816 Shilling for £3....worth £30....but even if your doing it just for the silver content, you can pick up a real bargain. Just think of how your going to offload them. Here in the UK its easy because there is a huge market for Numismatic coins. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Should I pay more than 20% down on a home? ### Answer: The more you put down now, the less money you are borrowing. 30yrs of interest adds up. Even paying a small amount at the beginning of the mortgage can turn into a huge savings over the life of the loan. That's why you'll find advice to make extra mortgage payments in the beginning. The question is: Do you have a better use for that money? In particular, do you have any higher-interest debt (higher APR than your mortgage) that needs to be paid off? You generally want to take care of those first. Beyond that can you invest the extra down payment money elsewhere (eg stock market) and get a better return than your mortgage rate? (don't forget about taxes on investment profits). If so, that money will do more good there. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Should I pay more than 20% down on a home? ### Answer: One big factor that no one has mentioned yet is whether you believe in a deflationary or inflationary future. Right now, we are leaning towards a deflationary environment so it makes sense to pay off more of the debt. (If you make just one extra payment a year, you will have paid off your house 7 years early). However, should this change (depending on government and central bank policy) you may be better off putting down the very minimum. In a year or three from now, you should have a clearer picture. In the meanwhile, here is a recent Business Week article discussing both sides of the argument. http://www.businessweek.com/magazine/content/10_28/b4186004424615.htm ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Should I pay more than 20% down on a home? ### Answer: First of all, realize that buying a home isn't really an investment. It is cheaper to rent. In recent years, people were able to sell their houses for astronomical profits, but that won't be happening much in the future. Additionally, there are many hidden costs of owning a home. Regarding the mortgage interest tax deduction, don't buy a house just to get this. It is like spending $1 to get back some amount of money less than $1. So just keep that in mind. Are you debt free? If not, pay off your other debts before buying a home. I follow the advice of Dave Ramsey, so I'll echo it here. Make sure you have an emergency fund and no debt. At this point I think you are ready to buy a house. When you do, put down as much as you can; above 20% if possible. Then get a 15 year fixed rate mortgage. At this point, start saving for your kid's college (if you believe in that) and paying down your home. Having no mortgage is a dream many people never have. I cannot wait until I have no mortgage. Don't get suckered into getting a high priced loan. Pay down as much of the price of the house as possible up front. This gives you flexibility too. What if you need to sell quickly? Well, you will have equity from the get-go, so this will be much easier. Good luck with your purchase! ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Should I pay more than 20% down on a home? ### Answer: The primary reason to put 20% down on your home is to avoid paying PMI (private mortgage insurance). Anyone who buys a house with a down-payment of under 20% is required to pay for this insurance (which protects the lender in case you default on your loan). PMI is what enables people to buy homes with as little as 3-5% down. I would recommend against paying more than 20%, because having liquidity for emergency funds, or other investments will give you the sort of flexibility that's good to have when the economy isn't so great. Depending on whether the house you purchase is move-in ready or a fixer-upper, having funds set aside for repairs is a good idea as well. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Should I pay more than 20% down on a home? ### Answer: I'd stick with 20% down. Truth is - we don't know enough about you. Are you single and staying that way? How is your retirement savings doing? As others asked, any other debt? You can put 20% down, take a breath and see how it's going. I did just that, the 20%. We then had a baby, and 5 nanny-years to pay for. When she was gone, all that money went to the mortgage, and after refinancing (with no points no closing) we have 7 years to go. Just under 20 years beginning to end. During that time we've saved for college (just about fully funded) and for retirement (both with matched 401(k) accounts). Remember, if you lose your job, a house with a lower mortgage means nothing when there's still the next payment due. But that cushion of cash can be handy. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Should I pay more than 20% down on a home? ### Answer: Leverage increase returns, but also risks, ie, the least you can pay, the greater the opportunity to profit, but also the greater the chance you will be underwater. Leverage is given by the value of your asset (the house) over the equity you put down. So, for example, if the house is worth 100k and you put down 20k, then the leverage is 5 (another way to look at it is to see that the leverage is the inverse of the margin - or percentage down payment - so 1/0.20 = 5). The return on your investment will be magnified by the amount of your leverage. Suppose the value of your house goes up by 10%. Had you paid your house in full, your return would be 10%, or 10k/100k. However, if you had borrowed 80 dollars and your leverage was 5, as above, a 10% increase in the value of your house means you made a profit of 10k on a 20k investment, a return of 50%, or 10k/20k*100. As I said, your return was magnified by the amount of your leverage, that is, 10% return on the asset times your leverage of 5 = 50%. This is because all the profit of the house price appreciation goes to you, as the value of your debt does not depend on the value of the house. What you borrowed from the bank remains the same, regardless of whether the price of the house changed. The problem is that the amplification mechanism also works in reverse. If the price of the house falls by 10%, it means now you only have 10k equity. If the price falls enough your equity is wiped out and you are underwater, giving you an incentive to default on your loan. In summary, borrowing tends to be a really good deal: heads you win, tails the bank loses (or as happened in the US, the taxpayer loses). ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Should I pay more than 20% down on a home? ### Answer: A few thoughts off the top of my head: Advantages of more than 20% down: Disadvantages of more than 20% down: ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What are the tax implications of lending to my own LLC? ### Answer: It'll be just like any other loan you make, on your end, and receive, on your LLC's end. You pay taxes on the interest received, and your LLC can deduct the interest paid. Do make sure you set it up properly, however: If you want to loan money to your business, you should have your attorney draw up paperwork to define the terms of the loan, including repayment and consequences for non-repayment of the loan. It should be clear that the loan is a binding obligation on the part of the company. As a recent Tax Court case notes, the absence of such paperwork negates the loan. For tax purposes, the loan is an "arms length" transaction, being treated like any other debt. From: http://biztaxlaw.about.com/od/financingyourstartup/f/investinbusiness.htm ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What are the tax implications of lending to my own LLC? ### Answer: It looks like you'd just be charging yourself interest and paying yourself back, because it's a pass-through entity, as I'm sure you know. (This assumes you're the only member of the LLC.) It all depends on how much money you want inside the protective cover of the LLC, and for how long. It doesn't seem to make much difference how you get the cash in or out, or how complicated or easy you make it for yourself. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Double-entry bookkeeping: How to account for non-monetary taxable benefits received from employer? ### Answer: I can say that I got X dollars from an account like "Income:Benefits"... but where do I credit that money to? "Expenses:Groceries" Yes doesn't feel right, since I never actually spent that money on food, You did, didn't you? You got food. I'm guessing there's an established convention for this already? Doubt it. Established conventions in accounting are for businesses, and more specifically - public companies. So you can find a GAAP, or IFRS guidelines on how to book benefits (hint: salary expense), but it is not something you may find useful in your own household accounting. Do what is most convenient for you. Since it is a double-booking system - you need to have an account on the other side. Expenses:Groceries doesn't feel right? Add Expenses:Groceries:Benefits or Expenses:Benefits or whatever. When you do your expense and cash-flow reports - you can exclude both the income and the expense benefits accounts if you track them separately, so that they don't affect your tracking of the "real" expenses. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Moving 401k balance into self-directed IRA ### Answer: Your question asks "how" but "if" may be your issue. Most companies will not permit an external transfer while still employed, or under a certain age, 55 or so. If yours is one of the rare companies that permits a transfer, you simply open an IRA with the broker of your choice. Schwab, Fidelity, eTrade, or a dozen others. That broker will give you the paperwork you need to fill out, and they initiate the transfer. I assume you want an IRA in which you can invest in stocks or funds of your choosing. A traditional IRA. The term "self-directed" has another meaning, often associated with the account that permits real estate purchases inside the account. The brokers I listed do not handle that, those custodians have a different business model and are typically smaller firms with fewer offices, not country-wide. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Working remotely from Canada for a US company. How to get paid? ### Answer: I'm no lawyer and no expert, so take my remarks as entertainment only. Also see this question. If you have a U.S. SSN which is eligible for work, they may be able to pay you on 1099 basis with your SSN as a sole proprietor, unless they have some personal reason for avoiding that. So perhaps try asking about that specifically. HR policies can be weird and tricky, maybe a nudge in the right direction will help. Not What You Asked: regardless, I might recommend you register as an LLC and get an EIN (sort of SSN for companies) for a variety of reasons. It's called a "limited liability" company for a reason. You may also have an easier time reaping various business-related rewards, like writing off expenses. If you do so, consider a state with no income tax like Wyoming. (Or, for convenience sake, WA if you live in BC, or maybe NH if you live in Ontario.. etc.) ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: New York State - NY Tax on Foreign Sourced Income for NY Non-Resident ### Answer: For Non-Resident filers, New York taxes New York-sourced income. That includes: real or tangible personal property located in New York State (including certain gains or losses from the sale or exchange of an interest in an entity that owns real property in New York State); services performed in New York State; a business, trade, profession, or occupation carried on in New York State; and a New York S corporation in which you are a shareholder (including installment income from an IRC 453 transaction). There are some exclusions as well. It is all covered in the instructions to form IT-203. However, keep in mind that "filing" as non-resident doesn't make you non-resident. If you spend 184 days or more in New York State, and you have a place to stay there - you are resident. See definitions here. Even if you don't actually live there and consider yourself a CT resident. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Am I responsible for an annual fee on a credit card I never picked up? ### Answer: Have you signed anything? If not - then tell them you don't know who they are and have not agreed to pay. If you did sign that piece of paper at the airport, then you have probably agreed to pay. Either way, it won't go away. As you've already discovered, ignoring things doesn't make them go away. You should make an effort, as hard as it may be, and call them. Notify them that you have never asked for this card, never activated it, and in fact never had it in your possession. You should stress out that it was issued without your authorization, which is probably illegal. And you wish the account to be closed and the charge reversed. Otherwise it will just grow and make your life miserable. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Am I responsible for an annual fee on a credit card I never picked up? ### Answer: In the end, I was not required to pay the fee. After some frustrating initial attempts, I ended up writing a letter and sending a copy to card services, customer support, complaints and the legal department. It basically said: 1 - I never signed anything. 2 - I spoke to a very aggressive person at the airport who told me that she was just taking down my information in order to send information about the card, and that I was under no obligation 3 - I never received a card, activated a card, or used a card. 4 - I want this charge canceled immediately 5 - If this ever shows up on my credit report, I will contact my lawyer regarding this unscrupulous business practice. After that I received a notice in the mail confirming that everything had been cancelled and all charges were reversed. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Medical Bill Consolidation ### Answer: There are definitely ways to retroactively consolidate medical bills -- there's an entire industry of companies offering debt consolidation (many of which are scummy/predatory, be careful! See https://www.consumer.ftc.gov/articles/0150-coping-debt and some decent articles at http://blog.readyforzero.com/are-there-legitimate-debt-consolidation-loans and http://blog.readyforzero.com/how-to-find-a-reputable-debt-consolidation-company). In general, what you are looking to do is take out a loan, possibly at a better interest rate than whatever you are being charged currently, and pay off the medical bills. If you are not paying interest on the medical bills and are just being allowed to spread out the payments, you are already golden and should just put up with the ups and downs. If you have any equity in a home, take out a home equity loan or line of credit, pay off your medical bills. Rates are still great right now. Even if you have no home equity to tap, if you have a steady job you might be able to get a nice small loan from a local bank or peer-to-peer lending site. Do your homework and only work with reputable companies, especially if doing things online. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Medical Bill Consolidation ### Answer: In short, no, or not retroactively. There really are multiple companies involved, each of which bills you separately for the services they provided. This can be partly avoided by selecting either a high-end health plan with lower out-of-pocket maximum, (costs more up front, of course) or by selecting a genuine Health Management Organization (not a PPO) which gathers more of the services into a single business. Either of these would result in fewer cash payments needing to be sent. But I don't know of any way to simplify things after the fact. Even if there was a consolidation service, you would have to forward the bills to them, which really wouldn't be any easier than just paying the bills. (I'm assuming you are in the US, where we have a health insurance system rather than a health system. Other countries may handle this differently.) ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: If I deposit money as cash does it count as direct deposit? ### Answer: Well, it's directly depositing money in your account, but Direct Deposit is something completely different: https://en.wikipedia.org/wiki/Direct_deposit Direct deposits are most commonly made by businesses in the payment of salaries and wages and for the payment of suppliers' accounts, but the facility can be used for payments for any purpose, such as payment of bills, taxes, and other government charges. Direct deposits are most commonly made by means of electronic funds transfers effected using online, mobile, and telephone banking systems but can also be effected by the physical deposit of money into the payee's bank account. Thus, since the purpose of DD is to eliminate checks, I'd say, "no", depositing cash directly into your account does not count as the requirement for one Direct Deposit within 90 days. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: If I deposit money as cash does it count as direct deposit? ### Answer: As RonJohn points out, direct deposit is something very different. What's going on here is that they are trying to exclude the "customers" that open the account simply for the premium and then close it again as soon as the terms of the offer have been met. Most people have only one regular source of direct deposit money, either their paycheck or a retirement check. This acts to make it hard for them to simply take the offer and run. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Do I have to explain the source of all income on my taxes? ### Answer: As a gift, the responsibility lays with the giver to file a 709 with their taxes for gifting to a single entity (barring certain exclusions) an amount over $14,000 within the (2017) tax year. https://www.irs.gov/pub/irs-pdf/i709.pdf If this person is a foreign entity from outside the country, you might need to provide in your tax filing a form 3520 https://www.irs.gov/businesses/gifts-from-foreign-person The reporting limits are: more than $100,000 from a foreign estate or non-resident alien, or more than $15,102 from a foreign company. If you don't know who/where the money came from i.e. cash, it would be considered found money and fall under income (not a gift). ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Do I have to explain the source of all income on my taxes? ### Answer: Do I have to explain the source of all income on my taxes? "Yes, you do", say the ghosts of Ermenegildo and Mary Cesarini. https://turbotax.intuit.com/tax-tips/general/what-to-know-about-taxes-on-found-property/L9BfdKz7N The Cesarinis argued to the IRS that the money wasn’t income, and so it should not be taxed as such. The IRS wasn’t swayed by the couple’s argument. The case went to federal court, and the IRS won. “Found” property and money has been considered taxable income ever since. The IRS plainly states that taxpayers must report “all income from any source," even income earned in another country, unless it is explicitly exempt under the U.S. Tax Code. This covers a wide range of miscellaneous income, including gambling winnings. According to the Cesarini decision, money you find isn’t explicitly exempt. The tax impact won’t be significant if you find an item of property with a fair market value of only $500 and are in the 25% tax bracket. You’ll owe the IRS $125 ($500 x .25 = $125). However, if you are a finder and keeper of $10,000, your tax burden will be $2,500 ($10,000 x .25 = $2,500). ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Do I have to explain the source of all income on my taxes? ### Answer: This is a case where you sit down with an advisor or two. There are legal, and tax issues. When you deposit the cash, or buy a car with it, the large cash transaction will trigger a notice to the US Government. So they will eventually find out. Before you get to that point you need to know what obligations and consequences you will be facing. Because you don't know if it was a gift, or found money, or if the owner will be back looking for you to return it; therefore you need expert advice. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Do I have to explain the source of all income on my taxes? ### Answer: You can report it as illegal income and you don't have to elaborate any further. For instance, spirit the cash off to a state where pot is legal and set up a dispensary. That is not legal at the Federal level, so it is in fact "illegal income" vis-a-vis your Form 1040 and that's all you say. Make sure you look, walk, and quack like a fairly successful pot distributor. That will most likely be the end of their inquiry, since they're not terribly driven to investigate the income you do report. Having to give 33% of it to the IRS is generally strong motivation for folks to not report fake income. You're not claiming the money is from pot, you're allowing them to infer it. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Do I have to explain the source of all income on my taxes? ### Answer: @RonJohn's answer for pallet of $20's is right for the specific case. For the general case of all income, it depends on whether or not the the source of the income was potentially criminal. https://www.forbes.com/sites/timtodd/2015/11/16/a-win-for-the-5th-amendment-at-the-tax-court/ I am not a lawyer, but reading that article, one needs to provide the total amount, but not the source if there's a risk of self-incrimination. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Do I have to explain the source of all income on my taxes? ### Answer: Well, that's probably not even all of it. If that stranger did his taxes properly, then he already paid about a third of it to the government because wherever he got it from it was income for him and thus it must have been taxed. Now, the remainder is in your hands and yes, according to US law it is now your income and so now you too, must pay about a third of it to the government, and yes you are supposed to explain where it came from. Be careful giving it to somebody else or it'll be taxed yet again. disclaimer: I am not a US citizen ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Do I have to explain the source of all income on my taxes? ### Answer: Nah. Fill it in on the line that says "Other Income" with type of "5th Amendment". There's lots of reasons why you might want to do this, and it's the government's job to find out which one, and they're not allowed to use the bare fact that you put 5th Amendment there to open an investigation. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Do I have to explain the source of all income on my taxes? ### Answer: Appears to be a hypothetical question and not really worth answering but... Must it be explained.. no, not until audited. It's saying that for everything reported on a tax return, people have to include an explanation for everything, which you do not, unless you want to make some type of 'disclosure' which is a different matter. Must it be reported.. Yes, based on info presented. All income is taxable unless "specifically exempted" per the US Tax code or court cases. Gift vs Found Income... it's not 'found' income as someone gave (gifted) the money to him. Generally, gifts received are not taxable and don't have to be reported. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Buying a building with two flats, can I rent one out and still get a residential mortgage? ### Answer: It depends on the terms of the mortgage. Generally speaking, residential mortgages specifically prohibit letting out a property without the bank's express permission -- but as you say, that tends to assume that the whole property is being let, not just a part of it. Conversely, buy-to-let mortgages generally prohibit living in the property yourself! The final arbiter as to what is allowed under a mortgage is the mortgage provider; so the safest option is to speak to one or more banks, and see what they say. (Note that if you're changing the use of part of a property from business to residential, you may need to apply for permission; check with your local council.) ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Buying a building with two flats, can I rent one out and still get a residential mortgage? ### Answer: I'd talk to a solicitor and see if you can structure the purchase in a way that breaks the property into three pieces. One would be the freehold of the whole building, one would be a long lease on the downstairs part (on which you would get a residential mortgage) and one would be a long lease on the upstairs flat (on which you would get a buy-to-let mortgage). Since there's essentially no price premium for freehold as opposed to long lease, you should be able to raise enough money from the two mortgages to fund the purchase. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Buying a building with two flats, can I rent one out and still get a residential mortgage? ### Answer: NO Even worse, most BTL(buy to let) lenders will not lend if you are going to be living in the property. There are very few lenders that will touch something like this. It is likely you will also need to use bridging for the time the building work takes at something like 1.5% per month! Try posting the question to http://www.propertytribes.com/ as there are a few UK mortgage experts on that site. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Buying a building with two flats, can I rent one out and still get a residential mortgage? ### Answer: The simple answer is to get a residential mortgage first, and once you have secured the loan, do whatever you want. The bank only cares about what risk they are taking on the day of closing and won't care afterwards so long as you pay the mortgage on time. Residential mortgages are going to give you better rates than rentals, generally. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Which Benjamin Graham book should I read first: Security Analysis or Intelligent Investor? ### Answer: I would recommend reading Intelligent Investor first. It was written slightly more recently (1949) than Security Analysis (1934). More important is that a recently revised edition* of Intelligent Investor was published. The preface and appendix were written by Warren Buffett. Intelligent Investor is more practical as an introduction for a novice. You may decide not to read Security Analysis at all, as it seems more like an academic text or professional's guide i.e. for accounting. Benjamin Graham's Intelligent Investor remains relevant. It is used, successfully, as a guide for value investing, despite the hysteria of market sentiment and day-to-day variations, even extreme volatility. For example, I just read a nice article about applying the value investing principles extolled in Intelligent Investor a few weeks ago. It was written in the context of current markets, which is amazing, to be so applicable, despite the passage of decades. For reference, you might want to glance at this book review (published in March 2010!) of the original 1934 edition of Security Analysis. * The URL links to a one-paragraph summary by U.S. News & World Report. It does not link to a book sales website! ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Which Benjamin Graham book should I read first: Security Analysis or Intelligent Investor? ### Answer: I would start with The Intelligent Investor. It's more approachable than Security Analysis. I read the revised edition which includes post-chapter commentary and footnotes from Jason Zweig. I found the added perspective helpful since the original book is quite old. Warren Buffet has called Intelligent Investor "the best book about investing ever written." (Source) I would suggest that endorsement ranks it before the other. :) Security Analysis is more detailed and, perhaps, oriented at a more professional audience – though individual investors would certainly benefit from reading it. Security Analysis is used as a textbook on value investing in some university-level business & finance courses. (p.s. If you haven't yet heard about William Bernstein's The Intelligent Asset Allocator, I also recommend adding it to your reading list.) ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Which Benjamin Graham book should I read first: Security Analysis or Intelligent Investor? ### Answer: First The Intelligent Investor and then the 1962 edition Security Analysis - which is out of print, you can get it on Amazon.com used or ebay. Then you can read the edition backward but the 1962 edition is the best - IMHO. And don't forget The Rediscovered Benjamin Graham and Benjamin Graham on Value Investing by Jane Lowe ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Which Benjamin Graham book should I read first: Security Analysis or Intelligent Investor? ### Answer: If you're looking to learn more about investing for personal use (as opposed to academic interest), I'd recommend something like The Ages of the Investor instead. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Which Benjamin Graham book should I read first: Security Analysis or Intelligent Investor? ### Answer: Having thought about it, I decided to start with another book by the same author : "The Interpretation of Financial Statements". I do not have a sufficiently strong basis to know what either "The Intelligent Investor" or "Security Analysis" are even about. Yeah, I might understand things, but I wouldn't grasp the essence, as I would be too busy figuring out what I didn't understand and miss the forest for the trees. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Which Benjamin Graham book should I read first: Security Analysis or Intelligent Investor? ### Answer: Read the Security Analysis. I believe if you read it completely, you will have a real good chance of succeeding at making good money. If you find the book hard to read just go through it and underline under the text as you read it. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What exactly is a wealth management platform? ### Answer: It's a tech buzzword. OK I'm being a bit glib. A Wealth Management Platform is a software system designed to help people track their investment portfolios and research new investments. Sometimes, trusts and small investment firms will use these platforms as well but they will often have more specialized separate systems for portfolio tracking and research. There is a large variety of platforms out there all trying to be the best platform for you... or someone else. Some will have websites and be open to all with money and some will be applications and only target some types of investors. Some will have robo-advising (Wealthfront), a human adviser (Merrill) or have none at all. Some will have nice graphical tools to track your portfolio or great research tools or both (I try not to recommend products on this site). Some can be designed to nudge you into their ideology (Vanguard). All, though, have a technology team behind them to make investing easier for you (or their investment advisers) or to sell you their products. You get the picture. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What exactly is a wealth management platform? ### Answer: Most businesses have some sort of software to manage their client data. Most of these various software and/or services are industry specific. Black Diamond seems to be a client management tool targeting investment advisers. From the black diamond site Reach an unparalleled level of productivity and transform your client conversations. You don't need one of these unless you're a professional investment adviser with so many clients you can't track them yourself or need more robust reporting or statement generation tools. For your purposes most regular brokers, Fidelity, Schwab, Vanguard, TD, etc, have more than enough tools for the retail level investor. They have news feeds, security analysis papers, historical data, stock screeners, etc. You, a regular retail investor doesn't need to buy special software, your broker will generally provide these things as part of the service. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What do I need to be aware of if I choose to resell property early (in Alberta)? ### Answer: You will have no problem doing this for one home and living in it for one or two years. There's a recent court case with around six homes bought and sold by the same person in that time frame. That's what you've probably heard about. There's no hard and fast rule about when it becomes a business but here are some highlights from that court case. Among the criteria developed by the case law, the following are of note: Constantin v. The Queen, 2014 TCC 327 (CanLII) ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Is there lesser or no tax on assets? ### Answer: US federal tax law distinguishes many types of income. For most people, most of their income is "earned income", money you were paid to do a job. Another category of income is "capital gains", money you made from the sale of an asset. For a variety of reasons, capital gains tax rates are lower than earned income tax rates. (For example, it is common that much of the gain is not real profit but inflation. If you buy an asset for $10,000 and sell it for $15,000, you pay capital gains tax on the $5,000 profit. But what if prices in general since you bought the asset have gone up 50%? Then your entire profit is really inflation, you didn't actually make any money -- but you still have to pay a tax on the paper gain.) So if you make your money by investing in assets -- buying and selling at a profit -- you will pay lower taxes than if you made the same amount of money by receiving a salary from a job, or by running a business where you sell your time and expertise rather than an asset. But money made from assets -- capital gains -- is not tax free. It's just a lower tax. It MIGHT be that when combined with other deductions and tax credits this would result in you paying no taxes in a particular year. Maybe you could avoid paying taxes forever if you can take advantage of tax loopholes. But for most people, making money from capital gains could result in lower taxes per dollar of income than someone doing more ordinary work. Or it could result in higher taxes, if you factor in inflation, net present value of money, and so on. BTW Warren Buffet's "secretary" is not a typist. She apparently makes at least $200,000 a year. http://www.forbes.com/sites/paulroderickgregory/2012/01/25/warren-buffetts-secretary-likely-makes-between-200000-and-500000year/#ab91f3718b8a. And side note: if Warren Buffet thinks he isn't paying enough in taxes, why doesn't he voluntarily pay more? The government has a web site where citizens can voluntarily pay additional taxes. In 2015 they received $3.9 million in such contributions. http://www.treasurydirect.gov/govt/reports/pd/gift/gift.htm ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Is there lesser or no tax on assets? ### Answer: Tax Shield would be known as: A tax shield is a reduction in taxable income for an individual or corporation achieved through claiming allowable deductions such as mortgage interest, medical expenses, charitable donations, amortization and depreciation. These deductions reduce a taxpayer's taxable income for a given year or defer income taxes into future years. Tax shields lower the overall amount of taxes owed by an individual taxpayer or a business. I know of various real estate investors that will use depreciation as noted above to reduce their tax liability though others can use other deductions. Fortune has this on Buffett's taxes in 2015: Here’s the breakdown of Buffett’s income taxes for 2015, according to the statement: ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Shifting income to 401k ### Answer: This will be difficult to achieve. It can be done, but it's very rare to have an agreement where your employer is willing to max out your contribution limit unless you are a partner in the business or a family relation. In this situation the extra employer money would probably come from a profit sharing contribution. If your employer increases your match, others are correct that your employer would have to increase the match for everyone. Not so with a profit sharing contribution. This is assuming 2 things though: Both of those are BIG if's, and I'd say 99% of the time it's not gonna happen for either of those two reasons. Your chances are better if you don't own >5% of the company, don't make over $120,000/year, and are related to you employer. Good luck! ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Shifting income to 401k ### Answer: Assumptions made for this answer, they may not be true for anybody: For the numbers part we will assume you are single and make 96,000 per year. Unknowns: how long you have to wait post accumulation to convince the bank you really do make $96,000 per year. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Does this plan make any sense for early 20s investments? ### Answer: The plan doesn't make sense. Don't invest your money. Just keep it in your bank account. $5000 is not a lot, especially since you don't have a steady income stream. You only have $1000 to your name, you can't afford to gamble $4000. You will need it for things like food, books, rent, student loans, traveling, etc. If you don't get a job right after you graduate, you will be very happy to have some money in the bank. Or what if you get a dream job, but you need a car? Or you get a job at a suit & tie business and need to get a new wardrobe? Or your computer dies and you need a new one? You find a great apartment but need $2500 first, last & security? That money can help you out much more NOW when you're starting out, then it will when you're ready to retire in your 60's. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Does this plan make any sense for early 20s investments? ### Answer: I'm not following what's the meaning of "open a mutual fund". You don't open a mutual fund, you invest in it. There's a minimum required investment ($2000? Could be, some funds have lower limits, you don't have to go with the Fidelity one necessarily), but in general it has nothing to do with your Roth IRA account. You can invest in mutual funds with any trading account, not just Roth IRA (or any other specific kind). If you invest in ETF's - you can invest in funds just as well (subject to the minimums set). As to the plan itself - buying and selling ETF's will cost you commission, ~2-3% of your investment. Over several months, you may get positive returns, and may get negative returns, but keep in mind that you start with the 2-3% loss on day 1. Within a short period of time, especially in the current economic climate (which is very unstable - just out of recession, election year, etc etc), I would think that keeping the cash in a savings account would be a better choice. While with ETF you don't have any guarantees other than -3%, then with savings accounts you can at least have a guaranteed return of ~1% APY (i.e.: won't earn much over the course of your internship, but you'll keep your money safe for your long term investment). For the long term - the fluctuations of month to month don't matter much, so investing now for the next 50 years - you shouldn't care about the stock market going 10% in April. So, keep your 1000 in savings account, and if you want to invest 5000 in your Roth IRA - invest it then. Assuming of course that you're completely positive about not needing this money in the next several decades. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Does this plan make any sense for early 20s investments? ### Answer: I would wait, and invest that money in a Roth IRA. Because taxes are paid on the contributions to a Roth IRA, you can withdraw the contributions at any time, tax and penalty-free. In addition, you can withdraw contributions and earning to purchase your first home. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Does this plan make any sense for early 20s investments? ### Answer: I think it's great idea. Many large brokerages give customers access to a pretty sizable list of zero commission, zero load funds. In this list of funds will certainly be an S&P 500 index. So you can open your account for free, deposit your $1,000 for free and invest it in an S&P index for no cost. You'll pay a very negligible amount in annual expense fees and you'll owe taxes on your gain if you have to use the money. I don't follow the school of thought that all investment money should be in retirement account jail. But I think if you have your spending under control, you have your other finances in order and just want to place money somewhere, you're on the right track with this idea. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How is someone tax exempt at Walmart in Canada? ### Answer: The short answer is you're tax exempt if the tax laws say you are. There are a bunch of specific exemptions based on who you are, what you're buying and why. Taking British Columbia as an example. One exemption is supplies for business use: Some exemptions are only available to certain purchasers in certain circumstances. These exemptions include: You can also claim an exemption if you are buying "adult size" clothing for a child under 15 years. Farmers are exempt from sales tax on various goods and services. First Nations individuals are exempt in some circumstances. And so on and so on. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How is someone tax exempt at Walmart in Canada? ### Answer: Note that folks may also be shopping for supplies for a nonprofit tax-exempt organization. I made such a purchase a few weeks ago. Whatever the legal basis of the exception, you need to be able to prove to the store that you have it. If you can't, they must collect the tax. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: If something is coming into my account will it be debit or credit in my account? ### Answer: The bank will make this even more confusing because they use the terms from their own perspective. From the bank's perspective (printed on your statements) credit: Money into your account (increases the bank's liabilities) debit: Money out of your account (decrease bank liabilities) From your perspective: It depends on the nature of the transfer of money, but here are the most common for a personal account. Income into your account: Credit Expenses out of your account: Debit Payment on a loan made for an asset (house/car): Credit for the loan account, debit for the equity account for the car/house/etc. Yes, it's complicated. Neither credits nor debits are always a + or -. That's why I agree with the advice of the others here that double-entry accounting is overkill for your personal finances. Note: I simplified the above examples for the purpose of clarity. Technically every transaction in double entry accounting includes both a credit and a debit (hence the "double" in the name). In fact, sometimes a transaction involves more than one credit or debit, but always at least one of each. Also, this is for EACH party. So any transaction between you and your bank involves at least FOUR debits and/or credits when all involved are considered. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: If something is coming into my account will it be debit or credit in my account? ### Answer: It sounds like you're mixing a simple checkbook register with double-entry bookkeeping. Do you need a double-entry level of rigor? Otherwise, why not have two columns, one for income (like a paycheck) and one for expenses (like paying a cable bill)? Then add up both columns and then take the difference of the sums to get your increase or decrease for the time period. If you want to break up income and expenses further, then you can do that too. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: If something is coming into my account will it be debit or credit in my account? ### Answer: I agree with mbhunter's suggestion of labeling your columns, 'income' and 'expenses'. However, to answer your question, money coming in (a paycheque, for example) is credited to your account. Money going out (a utility bill, for example) is debited from your account. There's no real 'why'... this is simply the definition of the words. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: If something is coming into my account will it be debit or credit in my account? ### Answer: If you are considering this to be an entry for your business this is how you would handle it.... You said you were making a balance sheet for monthly expenses. So on the Balance Sheet, you would be debiting cash. For the Income Statement side you would be crediting Owner's Equity to balance the equation: Assets = Liabilities + Owner's Equity So if you deposited $100 to your account the equation would be affected thus: $ 100 in Assets (Debit to Cash Account) = 0 Liabilities - $100 (Credit to Owner's Equity) It is correctly stated above from the bank's perspective that they would be "Crediting" you account with $100, and any outflow from the bank account would be debiting your account. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: If something is coming into my account will it be debit or credit in my account? ### Answer: The bank "credit's" your account for money coming into it. In double entry accounting, you always have a debit and a credit to balance the accounts. As an Example: for $500 that the bank credited to your checking account, you would post a debit to Cash and a Credit to Income Earned. The accounting equation is: Assets = Liabilities + Owner's Equity $500 = $500 Cash is the "Asset" side of the equation, Income is part of Owner's Equity, and so is the Credit side... to make the equation balanced. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: If something is coming into my account will it be debit or credit in my account? ### Answer: Most bank registers (where you write down entries) show deposits (+) to account as a CREDIT. Payments, fees, and withdrawals are DEBITs to your bank accounnt. On loans such as credit card accounts, a credit to your loan account is a payment or other reductions of the amount you owe. A charge to your account is a DEBIT to you loan account. They did this just to confuse us! ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How much is university projected to cost in Canada in 18 years? ### Answer: For a Canadian university education, an October 2009 article at Canada.com says: [...] The study estimates the total price tag of an undergraduate degree at a whopping $137,013 for students living away from home and $101,426 for those staying at home. [...] ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How much is university projected to cost in Canada in 18 years? ### Answer: The College Board offers a calculator. (Targeted to US residents; not sure how the figures will differ for Canada and other countries.) Keep in mind that college costs typically increase faster than inflation. When I attended in 2001-2005, my college's tuition costs increases ranged from 4 to 6%. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How much is university projected to cost in Canada in 18 years? ### Answer: Here's a great Canadian college/university cost calculator I used; found at Canadian Business - they say: Our tool is divided into three easy steps. First, calculate the tuition cost for the university and faculty you wish to attend. Then, calculate any additional fees for residence (on campus student housing), meal plans, athletics, health and student services. This will give you the total cost a student will pay at a Canadian university in 2006/7. Once you know the total annual cost, take the third step to calculate the total cost for the duration of the course of study. Of course, this only calculates what it will cost you NOW, not eighteen years from now, but it's a good start :) ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How much is university projected to cost in Canada in 18 years? ### Answer: I personally do not buy any those so-call forecasts - look no further than the economic forecasts by those experts with PhDs over the last decade or so. Truth is there are too many factors that affects the tuition fees that far down the road (think inflation, cost of living, the method for which the education is being delivered, anticipated salary for the teachers, the ratio of schools and students, your children's ability to obtain scholarship money, and etc). Put in what you can afford for RESP - I put in $2000 annually per child to take maximum advantage of the 20% government matching. And be prepare to augment that with additional fund in 18 years. I am prepared to take on significant loans if my children both decided and qualified for graduated studies in specialized fields in a prestige universities - I have had met people with graduate degrees from Harvard and Cambridge and the obscure sum they (or their parents) paid on tuition are about as good investment as I have ever seen. Education is one of the best gifts any parent could give to their child. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How can I improve my credit score if I am not paying bills or rent? ### Answer: For those who are looking to improve credit for the sake of being able to obtain future credit on better terms, I think a rewards credit card is the best way to do that. I recommend that you only use as many cards as you need to gain the best rewards. I have one card that gives 6% back on grocery purchases, and I have another card that gives 4% back on [petrol] and 2% back on dining out. Both of those cards give only 1% back on all other purchases, so I use a third card that gives 1.5% back across the board for my other purchases. I pay all of the cards in full each month. If there was a card that didn't give me an advantage in making my purchases, I wouldn't own it. I'm generally frugal, so I know that there is no psychological disadvantage to paying with a card. You have to consider your own spending discipline when deciding whether paying with cards is an advantage for you. In the end, you should only use debt when you can pay low interest rates (or as in the case of the cards above, no interest at all). In the case of the low interest debt, it should be allowing you to make an investment that will pay you more by having it sooner than the cost of interest. You might need a car to get to work, but you probably don't need a new car. Borrow as little as you can and repay your loans as quickly as you can. Debt can be a tool for your advantage, but only if used wisely. Don't be lured in by the temptation of something new and shiny now that you can pay for later. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How can I improve my credit score if I am not paying bills or rent? ### Answer: So you work, and give a small irregular amount to you parents. You live with very low expenses. Assuming you make a bit below the average salary in the UK, you should be able to save around £1000. If you found a part time job could you save double? I bet you could. So why do you need credit? Why do you need a credit score? Having poor or no credit can be remedied by having a large down payment. Essentially the bank asks, if this person could afford the payment of this loan why have they not been saving the money? You could save the money and either buy the thing(s) you desire with cash (the smartest), or put 50% down. Putting 50% or more down turns you into a good credit risk despite having no credit history. In case you missed it: why not just save the money and buy it for cash? Why have compounding interest working against you? Why do you want to work for the bank? Making the interest payments on loans in order to build a credit score is just silly. It is an instance of a "tail wagging the dog". ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How can I improve my credit score if I am not paying bills or rent? ### Answer: Any kind of credit contract such as a mobile phone contract (could be SIM only or with a handset) would also help increase your number of accounts and demonstrate a track record of responsible management and repayments. If you have a Pay As You Go phone at present consider a SIM only contract with the same network, and if your parents currently pay for your phone consider if it would be worth switching it into your own name. Also make sure that you are registered on the Electoral Role at your permanent address and have at least a minimum payment direct debit set up on your credit card (even though you state you intend to repay in full) to make sure you don't forget a payment as this will disproportionately affect your score when combined with young age and few other accounts. Lastly ensure that you have a decent amount of "head room" on your rolling credit accounts like credit cards and aren't using more than 80% of the credit available to you through your monthly spending, if necessary by asking for an increased limit from your company (and then not using it). ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How can I improve my credit score if I am not paying bills or rent? ### Answer: One of the other things you could do to improve your score would be along the lines of what Pete said in his answer, but using the current financial climate to your advantage. I'm not sure what interest rates are available to you in the UK, but I currently have 4 lines of credit aside from my house. One is a credit card I use for every day purchases and like you pay off immediately with every statement. The other three are technically credit cards, however all three were used to make purchases with 0% financing. The one was for a TV I bought that even gave me 5% off if I pay it off within 6 months. That cash has been sitting in my savings since the day I bought it. I'm making regular payments on all three, but not having to pay any interest. My credit score dropped 25 points with the one as it was an elective medical expense (Visian eye surgery), so for the time the balance is near my credit limit. However, that will bounce back up as the balance lowers. My score was also able to take that hit and still be very high. If you don't have 0% (or very close) available, your better bet would be to follow the other suggestions about saving for a sizable down payment, or other every day expenses like a cell phone. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How can I improve my credit score if I am not paying bills or rent? ### Answer: You can improve your credit score simply by being an authorized user on someone's credit card account. They don't even physically have to give you a card to use, they can just add you to the account as an authorized user and your credit score will be affected. Be forewarned though, it can be negatively impacted as well. Only participate in such a scheme if it's with someone trustworthy and reliable. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How can I improve my credit score if I am not paying bills or rent? ### Answer: When you say "promptly paying off the outstanding balance", do you mean you pay it off literally as soon as you have incurred the debt? It is important to actually let the debt post on a statement before you pay it off. If you pay it off before the statement posts then this won't help your credit at all. Once the statement posts you can pay the entire balance off before the due date and you will still pay no interest. Assuming you are allowing the balance to actually post on your statements, you can simply continue to do this and your credit score will improve over time as your account(s) get older and you show that you are reliable. The only other way to improve your credit score is to open more accounts. In the short term this will actually hurt your score, as it will decrease your average age of account and add an inquiry. However in the mid-long term, this will improve your score as having more accounts of a variety of types is better for your score. Having an installment loan such as an auto loan or home loan is good for your score as it is different from a credit card - however you should definitely not engage in one of these unless it makes financial sense for other reasons. Don't add debt just to build your credit score. You could just open more credit cards. Like I said it will hurt your score in the short term but improve it in the mid-long term. Open cards with a variety of benefits so you can use them for different things to get better rewards. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How can I improve my credit score if I am not paying bills or rent? ### Answer: US based so I don't know how closely this translates to the UK, but generally speaking there are three things that contribute to a strong credit score. Length/volume of credit history. This is a combination of how many accounts appear in your history along with how long they have been open. Having a series of accounts that were maintained in good standing looks better than only having one. Maintaining an account in good standing for a prolonged period (3+ years) is better than a bunch of short term items. "Ideally" your credit history should contain a mix of term loans that were paid per contract and a few (1?) revolving account that shows ongoing use. The goal is to show that you can handle ongoing obligations responsibly, and manage multiple things at the same time. Utilization. Or how much you currently owe vs how much people have agreed to lend you. Being close to your limits raises questions about whether or not you can really handle the additional debt. Having large availability raises questions about whether you would be able to handle it if you suddenly maxed things out. Finding the correct middle point can be challenging, the numbers I have seen thrown around most by the "experts" is 20-30% utilization. Recent Activity. Or how much new debt have you taken on? If someone is opening lots of new accounts it raises red flags. Shopping around for a deal on a auto loan or mortgage before settling on one is fine. Opening 5 new credit lines in the past 6 months, probably going to knock you down a bit. One of the concerns here is have you had the accounts long enough to demonstrate that you will be able to handle them in the long term. One route that was suggested to me in my early years was to go take out a 6mo loan from a bank, and just place the money in a CD while I made the payments. Then repeat with a longer term. Worst case, you can cash out the CD to pay off the loan in an emergency, but otherwise it helps show the type of history they are looking for. All that said, I have to agree with Pete B's answer. Don't play the credit game if you don't really need to. Or play it just enough to stay in the game and plan your finances to avoid relying on it. (Advice I wish I had taken long ago.) ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How can I improve my credit score if I am not paying bills or rent? ### Answer: If credit scoring works in the UK like it does in the US, then I think the fact that you own+use a credit card and pay off your everyday expenses will give you perfectly good credit. Just keep doing what you're doing. I have seen people in the United States with very high credit scores based solely upon owning & occasionally using a credit card, paid in full and on time every month. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How can I improve my credit score if I am not paying bills or rent? ### Answer: An activity which can help improve your credit score and actually make you money is stoozing. It's a little complicated but can be beneficial to do. Using either a credit card which allows fee free money withdrawals from cashpoints or building up debt using your credit card gives you access to your credit amount. You then use a long term 0% balance transfer card to transfer the debt which you pay off at the minimum rate. It's 0% so no costs are associated except for the initial fee paid for the balance transfer amount. The money that would have been used to pay off the credit amount (or money withdrawn from a cashpoint) can then be deposited in a savings account so you are now earning interest on the credit balance. Continuing to make monthly minimum payments via direct debit will help improve your credit rating and the savings money will earn interest. (it is also available if you suddenly need to pay off the 0% card) ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How can I improve my credit score if I am not paying bills or rent? ### Answer: Buy a car. Vehicle loans, like mortgages, are installment loans. Credit cards are revolving lines of credit. In the US, your credit score factors in the different types of credit you have. Note that there are several methods for calculating credit scores, including multiple types of FICO scores. You could buy a car and drive for Uber to help cash flow the car payments and/or save for your next purchase. As others have suggested, you should be very careful with debt and ask critical questions before taking it on. Swiping a credit card is more about your behavior and self-control than it is logic and math. And if you ever want to start a business or make multi-million dollar purchases (e.g. real estate), or do a lot of other things, you'll need good credit. ###end

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