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Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Why buy insurance? ### Answer: You don't mention what kind of insurance you're talking about, but I'll just address one angle on the question. For some kinds of insurance, such as health insurance (in...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Why buy insurance? ### Answer: It's not a betting game, insurance policy is not akin to a casino bet. While the odds are probably low, the damage of an event may be devastating. Insurance allows mitig...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Why buy insurance? ### Answer: Most people buy insurance because it is legally required to own a car or to have a mortgage. People want to own homes and to have personal transportation enough that the...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Why buy insurance? ### Answer: The odds could very well be in your favor, even when the insurance company expects profit. What matters to you is not the expected amount of money you'll have, but the e...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Why buy insurance? ### Answer: People's value of money is not always linear. Consider an individual with $1000 in the bank. I'm going to look at amounts of debt by orders of magnitude: Now its prett...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Why buy insurance? ### Answer: For big values the loss becomes negligible. Say you have a 10% chance to get 10 million $/€/Whatever, expected value 1m. You sell that chance for 990k, which loses you 1...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Why buy insurance? ### Answer: There are several insurance products that I buy for legal reasons: Both of these protect me from lawsuits and fines. Many people buy similar products to protect their bu...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Why buy insurance? ### Answer: There are many situations where injecting a certain amount of cash at the right time may reap rewards far in excess of the value of the cash injected. For example, if so...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Why buy insurance? ### Answer: Apart from legal requirements to have insurance, e.g. 3rd party car that other answers have covered well. We can think of all insurance as protecting our “usable” income...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Why buy insurance? ### Answer: The fundamental flaw here is conflating net worth with utility, at least failing to recognize that there's a nonlinear relationship between the two. In the extreme exam...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Why buy insurance? ### Answer: Lots of people make poor decisions in crises. Some panic, and don't make any decision at all. Insurance for affordable things can provide emotional security: If someth...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Why buy insurance? ### Answer: Insurance is bought for peace of mind and to divert disaster. Diverting disaster is a good/great thing. If your house burned down, if someone hit your car, or some ot...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Why buy insurance? ### Answer: I keep it simple. Here's what I learned when I took Personal Financial Planning: Insurance is for low likelihood, high-impact events. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Why buy insurance? ### Answer: The definition of insurance is the transfer of risk. Thus, you're paying for transferring of a risk (of an item/property) to the insurer (carrier), so that they bear the...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Why buy insurance? ### Answer: First of all, insurance never covers the cost of the item, it is almost always a partial payout at best. For example, a typical house in the Northeast US where I live th...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What investments are positively related to the housing market decline? ### Answer: A possibility could be real estate brokerage firms such as Realogy or Prudential. Although a brokerage commission is ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What investments are positively related to the housing market decline? ### Answer: During the actual decline, there's very little money to be made and a lot to lose. When housing prices tank, everybod...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Deduct Health Care Premiums for Family When Employer Only Pays for Me ### Answer: You can deduct what you pay for your own and your family's health insurance regardless of whether it is subsidized by ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Live in California but work for Illinois-based company ### Answer: California and New York are very aggressive when it comes to revenue and taxes. As such, mere having an employee in these States crea...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Live in California but work for Illinois-based company ### Answer: They might be concerned with having to charge sales tax in California if they have a single employee in California, creating a nexus ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What are the real risks in “bio-technology” companies? ### Answer: Note: My sister works for one of the largest clinical development, testing, and commercialization companies so I know some of the key...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What are the real risks in “bio-technology” companies? ### Answer: The risk is that everything could go wrong in any phase at any time or they could run out of cash and go bankrupt waiting for results...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What are the real risks in “bio-technology” companies? ### Answer: Be wary of pump and dump schemes. This scheme works like this: When you observe that "From time to time the action explodes with 100 ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Taxing GoFundMe Donations ### Answer: I'm going to post this as an answer because it's from the GoFundMe website, but ultimately even they say to speak with a tax professional about it. Am I responsi...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Taxing GoFundMe Donations ### Answer: The $20k limit seems to be (from another answer) the threshold for GoFundMe to report the campaign. However, such a report does not change the taxability of the i...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Taxing GoFundMe Donations ### Answer: To echo part of stannius' response. If it's taxable, there would be tax on $19,999, just a bit less than on $20,000. Your uncle may have a credential, and members...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Taxing GoFundMe Donations ### Answer: From WePay (GoFundMe's payment processor) support. I received only gifts and donations. Will I receive a Form 1099-K? As of 2015, the IRS has clarified that We...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Sleazy Bait and Switch Marketing — Is this legal? ### Answer: This is completely disgusting, utterly unethical, deeply objectionable, and yes, it is almost certainly illegal. The Federal Trade Commiss...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Sleazy Bait and Switch Marketing — Is this legal? ### Answer: But.. what I really want to know.... is it illegal, particularly the clause REQUIRING a trade in to qualify for the advertised price? Th...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Please explain the relationship between dividend amount, stock price, and option value? ### Answer: There are a few reason why the stock price decreases after a dividend is paid: What's the point of ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Please explain the relationship between dividend amount, stock price, and option value? ### Answer: 4) Finally, do all companies reduce their stock price when they pay a dividend? Are they required to...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Please explain the relationship between dividend amount, stock price, and option value? ### Answer: The exchanges artificially push the price of the stock down on the ex-div date. Often the impact of ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Please explain the relationship between dividend amount, stock price, and option value? ### Answer: Regarding: 1) What's the point of paying a dividend if the stock price automatically decreases? Do...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Please explain the relationship between dividend amount, stock price, and option value? ### Answer: 1) What's the point of paying a dividend if the stock price automatically decreases? Don't the sha...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Is it wise for an independent contractor to avoid corporation tax by planning to only break even each year? ### Answer: IANAL (and nor am I an accountant), so I can't give a definitive answer as to le...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Is it wise for an independent contractor to avoid corporation tax by planning to only break even each year? ### Answer: First, point: The CRA wants you to start a business with a "Reasonable expectati...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Tax me more: Can I pay extra to the government so I don't have to deal with all this paperwork? ### Answer: In a word, no. If your income is high enough to have to file a return, you have to file a r...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Tax me more: Can I pay extra to the government so I don't have to deal with all this paperwork? ### Answer: Actually, if you don't care about paying a bit more, either hire an accountant and dump the...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Tax me more: Can I pay extra to the government so I don't have to deal with all this paperwork? ### Answer: Currently, the answer is no, you cannot get out of filing a tax return. As noted in the co...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Tax me more: Can I pay extra to the government so I don't have to deal with all this paperwork? ### Answer: Perhaps the real question you are asking is "How can the tax code be fixed to make it simpl...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What does “check payable to” mean? ### Answer: It is your name, or the fictitious name under which you operate. For example, if your freelance front end is called "Zolani the 13th, LLC", then that's t...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What does “check payable to” mean? ### Answer: They are basically asking for the name of the legal entity that they should write on the check. You, as a person, are a legal entity, and so you can have...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Why small retail stores ask for ID with a credit card while big don't ### Answer: Because large stores do not pay their cashiers enough that the companies can dock the employees' pay if they allow a b...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Why small retail stores ask for ID with a credit card while big don't ### Answer: Probably because large chains can absorb the loss from fraud better than small stores do. Thus, small stores want to ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What is the difference between hedging and diversification? How does each reduce risk? ### Answer: Hedging - You have an investment and are worried that the price might drop in the near future. You do...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What is the difference between hedging and diversification? How does each reduce risk? ### Answer: The difference is in the interrelation between the varied investments you make. Hedging is about spec...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How to evaluate an annuity ### Answer: Guaranteed 8.2% annual return sounds too good to be true. Am I right? Are there likely high fees, etc.? You're right. Guaranteed annual return is impossible, e...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How to evaluate an annuity ### Answer: Annuities are usually not good deals. Commissions to the salesman can be as high as 9% of the initial premium. They're not scams, just not the best deals for mos...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How to evaluate an annuity ### Answer: You can get no load annuities through some no-load financial companies like Vanguard so to start with I'd see how what she is being offered compares with somethi...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How to evaluate an annuity ### Answer: You need to see that prospectus. I just met with some potential new clients today that wanted me to take a look at their investments. Turns out they had two se...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How to calculate my real earnings from hourly temp-to-hire moving to salaried employee? ### Answer: Get some professional accounting help. You're going to have to pay for everything out of the fee you...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How to calculate my real earnings from hourly temp-to-hire moving to salaried employee? ### Answer: This arrangement is a scam to get around certain tax and benefits laws, both State and Federal. I kn...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How to calculate my real earnings from hourly temp-to-hire moving to salaried employee? ### Answer: Here's an alternative. There are hundreds, maybe thousands, of contract engineering firms ("job shop...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How to calculate my real earnings from hourly temp-to-hire moving to salaried employee? ### Answer: If you are a temp-to-hire, or you are asked to setup a company then you are not an employee. They ex...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How to calculate my real earnings from hourly temp-to-hire moving to salaried employee? ### Answer: I would not assume they would pay for any benefits. You will be responsible for paying entirely for ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Tax consequences of changing state residency? ### Answer: It also depends on where you work. If you move your home and your job then the date you establish residency in the new state is the key date. ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Tax consequences of changing state residency? ### Answer: I did the reverse several years ago, moving from NH to MA. You will need to file Form 1-NR/PY for 2017, reporting MA income as a part-year res...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Is buying a home a good idea? ### Answer: IF the price of the property (1) increases A LOT, you will just break even, on the huge expenses of home owning. IF the price of the property (2) increases A ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Is buying a home a good idea? ### Answer: Once you paid it off, you don't pay rent anymore. That is the major advantage. Also, you can do any change you want to it. Many people consider it an investme...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Is buying a home a good idea? ### Answer: Buying a house may save you money compared with renting, depending on the area and specifics of the transaction (including the purchase price, interest rates,...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Is buying a home a good idea? ### Answer: The New York Times offer a remarkably detailed Buy vs Rent calculator. You enter - From all of this, it advises the break-even rent, when monetarily, it's eq...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Is buying a home a good idea? ### Answer: A home actually IS a terrible investment. It has all the traits of something you would NEVER want to plunge your hard-earned money into. The only way that buy...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Is buying a home a good idea? ### Answer: It certainly seems like you are focusing on the emotional factors. That's your blind spot, and it's the surest path to a situation where your husband gets to...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How come the government can value a home more than was paid for the house? ### Answer: When a house is sold at a foreclosure auction, the selling bank usually does not provide the guarantees that a no...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How come the government can value a home more than was paid for the house? ### Answer: The real answer why the government is "allowed" to do something is because they are the government and they make ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How come the government can value a home more than was paid for the house? ### Answer: The property tax valuation and the fair market price are NOT one and the same. They track each other, correlate ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How come the government can value a home more than was paid for the house? ### Answer: Keep in mind, there are times that house is in such bad shape that it's going to need 6 months of renovations, in...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How come the government can value a home more than was paid for the house? ### Answer: From my perspective I suspect that if the government use the paid price, people will start to buy at very low nom...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Why would a car company lend me money at a very low interest rate? ### Answer: Because the federal government won't use the money to buy a car thus generating profits for the car company. The aim of c...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Why would a car company lend me money at a very low interest rate? ### Answer: This is "incentive financing". Simply put, the car company isn't in the business of making money by buying government bon...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Why would a car company lend me money at a very low interest rate? ### Answer: Here I thought I would not ever answer a question on this site and boom first ten minutes. First and foremost I am in th...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Why would a car company lend me money at a very low interest rate? ### Answer: In addition to the other answers, also consider this: Federal bond interest rates are nowhere near the rates you mentione...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Why would a car company lend me money at a very low interest rate? ### Answer: They aren't actually. It appears to be a low interest rate, but it doesn't cover their true cost of capital. It is a sale...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Why would a car company lend me money at a very low interest rate? ### Answer: The car company loans you money at 1 or 2% because it is part of the incentive to get you to buy the car. Car company tr...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Can increasing my tax withholding from my full-time job cover FICA taxes for my freelance work? ### Answer: Technically you owe 'self-employment' taxes not FICA taxes because they are imposed under a ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: In Canada, how much money can I gift a friend or family member without them being taxed on it? ### Answer: Canada doesn't seem to have a gift tax. http://www.taxtips.ca/personaltax/giftsandinheritance...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: In Canada, how much money can I gift a friend or family member without them being taxed on it? ### Answer: When you give a gift to another person or receive a gift from another person there is no impa...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: In Canada, how much money can I gift a friend or family member without them being taxed on it? ### Answer: If the person gifting the property owed any debt to Canada Revenue Agency on the date of gift...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Can I write off (deduct) expenses in a period where my corporation makes no money? ### Answer: Your corporation would file a corporate income tax return on an annual basis. One single month of no reve...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: When do I pay taxes if I'm self employed? ### Answer: I strongly recommend that you talk to an accountant right away because you could save some money by making a tax payment by January 15, 2014. You ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Offshore bank account with online International wire-transfer facility for Indians ### Answer: Well first off, I would advice you to do this research yourself. You should not base your selection off ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Offshore bank account with online International wire-transfer facility for Indians ### Answer: India does allow Resident Indians to open USD accounts. Most leading National and Private Banks offer th...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Offshore bank account with online International wire-transfer facility for Indians ### Answer: All Indian Banks are offering USD accounts known as multicurrency account, where you can hold your fund,...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Preferred vs Common Shares in Private Corporation ### Answer: Preferred dividends and common dividends are completely separate transactions. There's not a single "dividend" payment that is split betw...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Preferred vs Common Shares in Private Corporation ### Answer: To follow up on Quid's comment, the share classes themselves will define what level of dividends are expected. Note that the terms 'common...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Borrowing money and then investing it — smart or nart? ### Answer: The biggest concern is how you get $250,000 in unsecured credit. It's unlikely that you will be loaned that amount at a percentage lo...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Borrowing money and then investing it — smart or nart? ### Answer: I will use 10% of this 20K to pay the loan back on an annual basis agreement An annual payment of 0.8% ($2,000 / $250,000) is nowhere...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Borrowing money and then investing it — smart or nart? ### Answer: Theory of Levered Investing Borrowing in order to increase investment exposure is a time-honored and legitimate activity. It's the o...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Borrowing money and then investing it — smart or nart? ### Answer: There are two fundamental flaws to your plan: Supposing that you can get a loan with an interest rate that is less than the profit yo...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Borrowing money and then investing it — smart or nart? ### Answer: It's incredibly foolish because it fails to use the investments as collateral to secure the loan. So instead of paying 5% or less for...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Bonus issue - Increasing share capital ### Answer: Fully Paid up Partly Paid up: A company may issue stock to you which is only partly paid up, for example, a company may issue a stock of face value 1...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Bonus issue - Increasing share capital ### Answer: This is what is called "stock dividend". In essence the company is doing a split, the difference is in financial accounting and shouldn't concern you...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Bonus issue - Increasing share capital ### Answer: Fully paid up Shares issued in which no more money is required to be paid to the company by shareholders on the value of the shares. When a company i...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How to calculate my estimated taxes. 1099 MISC + Self Employment ### Answer: There is a shortcut you can use when calculating federal estimated taxes. Some states may allow the same type of estimatio...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How to calculate my estimated taxes. 1099 MISC + Self Employment ### Answer: This is wrong. It should be or Now, to get back to self-employment tax. Self-employment tax is weird. It's a business ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How to calculate my estimated taxes. 1099 MISC + Self Employment ### Answer: There are a couple of things that are missing from your estimate. In addition to your standard deduction, you also have a p...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How to calculate my estimated taxes. 1099 MISC + Self Employment ### Answer: One way to do these sorts of calculations is to use the spreadsheet version of IRS form 1040 available here. This is provi...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Proper etiquette for loans from friends ### Answer: The standard approach is to reach an agreement and put it in writing. What you agree upon is up to you, but in the US if you want to avoid gift tax...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What items are exempt from the VAT? [U.K.] ### Answer: Some items are VAT Exempt or Reduced, but in short you will pay it on almost any all consumer goods. Assuming you are a visitor to the UK from a ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What items are exempt from the VAT? [U.K.] ### Answer: I'm thinking about visiting the UK and I'm wondering which things are affected by the VAT and which are not. Most consumer goods are subject to V...