> And for a brand new company, you can sure as shit guarantee that as an owner, you'll be held personally liable.  You are personally liable for any debt you personally sign off on yes. But you are not personally responsible for more than that debt. So if you take a 30 thousand dollar loan to start your business, your company hasn't been profitable and lost 20 thousand and your employees sue the company for 25 thousand. The company has 10 thousand to pay that with. The owner is still liable to pay the lender the 30 thousand, but has no obligation to the employees of the 25 thousand they are suing for.


The article links to William Bernstein’s plan that he outlined for Business Insider, which says: Modelling this investment strategy Picking three funds from Google and running some numbers. The international stock index only goes back to April 29th 1996, so a run of 21 years was modelled.  Based on 15% of a salary of $550 per month with various annual raises: Broadly speaking, this investment doubles the value of the contributions over two decades. Note:  Rebalancing fees are not included in the simulation. Below is the code used to run the simulation.  If you have Mathematica you can try with different funds.    Notice above how the bond index (VBMFX) preserves value during the 2008 crash.  This illustrates the rationale for diversifying across different fund types.


The issue for you seems to be the sequence of events. Presumably, there will be a gain in the fund. In one year, you have a fund worth $100,000 and the $8500 your netted from the $10,000 dividend. (Dividends are taxed at 15% for most of us. If your taxable income is under $38K single, it's $0) An $8500 net return for the year. Now, if there were no initial dividend, and at the end of a full year, your $100K grew to $110K, and then gave you the $10K dividend, you might not be so unhappy. Even on day 2, you now have a fund worth $90K with a basis of $100K, and the promise of future dividends or cap gains. When you sell, the first $10K of gain from this point will effectively be tax free due to this quick drop.  To directly answer the last few sentences, dividends and cap gains are different. And different still, for the way a fund processes them.


You’ve really got three or four questions going here… and it’s clear that a gap in understanding one component of how bonds work (pricing) is having a ripple effect across the other facets of your question. The reality is that everybody’s answers so far touch on various pieces of your general question, but maybe I can help by integrating. So, let’s start by nailing down what your actual questions are:  1. Why do mortgage rates (tend to) increase when the published treasury bond rate increases? I’m going to come back to this, because it requires a lot of building blocks. 2. What’s the math behind a bond yield increasing (price falling?)  This gets complicated, fast. Especially when you start talking about selling the bond in the middle of its time period. Many people that trade in bonds use financial calculators, Excel, or pre-calculated tables to simplify or even just approximate the value of a bond. But here’s a simple example that shows the math.  Let’s say we’ve got a bond that is issued by… Dell for $10,000. The company will pay it back in 5 years, and it is offering an 8% rate. Interest payments will only be paid annually. Remember that the amount Dell has promised to pay in interest is fixed for the life of the bond, and is called the ‘coupon’ rate. We can think about the way the payouts will be paid in the following table:   As I’m sure you know, the value of a bond (its yield) comes from two sources: the interest payments, and the return of the principal. But, if you as an investor paid $14,000 for this bond, you would usually be wrong. You need to ‘discount’ those amounts to take into account the ‘time value of money’. This is why when you are dealing in bonds it is important to know the ‘coupon rate’ (what is Dell paying each period?). But it is also important to know your sellers’/buyers’ own personal discount rates. This will vary from person to person and institution to institution, but it is what actually sets the PRICE you would buy this bond for.  There are three general cases for the discount rate (or the MARKET rate). First, where the market rate == the coupon rate. This is known as “par” in bond parlance. Second, where the market rate < the coupon rate. This is known as “premium” in bond parlance. Third, where the market rate > coupon rate. This is known as a ‘discount’ bond.  But before we get into those in too much depth, how does discounting work? The idea behind discounting is that you need to account for the idea that a dollar today is not worth the same as a dollar tomorrow. (It’s usually worth ‘more’ tomorrow.) You discount a lump sum, like the return of the principal, differently than you do a series of equal cash flows, like the stream of $800 interest payments. The formula for discounting a lump sum is:  Present Value=Future Value* (1/(1+interest rate))^((# of periods)) The formula for discounting a stream of equal payments is:  Present Value=(Single Payment)* (〖1-(1+i)〗^((-n))/i) (i = interest rate and n = number of periods) **cite investopedia So let’s look at how this would look in pricing the pretend Dell bond as a par bond. First, we discount the return of the $10,000 principal as (10,000 * (1 / 1.08)^5). That equals $6,807.82.  Next we discount the 5 equal payments of $800 as (800* (3.9902)). I just plugged and chugged but you can do that yourself. That equals $3,192.18. You may get slightly different numbers with rounding.  So you add the two together, and it says that you would be willing to pay ($6,807.82 + $3,192.18) = $10,000. Surprise! When the bond is a par bond you’re basically being compensated for the time value of money with the interest payments. You purchase the bond at the ‘face value’, which is the principal that will be returned at the end.  If you worked through the math for a 6% discount rate on an 8% coupon bond, you would see that it’s “premium”, because you would pay more than the principal that is returned to obtain the bond [10,842.87 vs 10,000]. Similarly, if you work through the math for a 10% discount rate on an 8% coupon bond, it’s a ‘discount’ bond because you will pay less than the principal that is returned for the bond [9,241.84 vs 10,000].  It’s easy to see how an investor could hold our imaginary Dell bond for one year, collect the first interest payment, and then sell the bond on to another investor. The mechanics of the calculations are the same, except that one less interest payment is available, and the principal will be returned one year sooner… so N=4 in both formulae.  Still with me? Now that we’re on the same page about how a bond is priced, we can talk about “Yield To Maturity”, which is at the heart of your main question.  Bond “yields” like the ones you can access on CNBC or Yahoo!Finance or wherever you may be looking are actually taking the reverse approach to this. In these cases the prices are ‘fixed’ in that the sellers have listed the bonds for sale, and specified the price. Since the coupon values are fixed already by whatever organization issued the bond, the rate of return can be imputed from those values.  To do that, you just do a bit of algebra and swap “present value” and “future value” in our two equations.  Let’s say that Dell has gone private, had an awesome year, and figured out how to make robot unicorns that do wonderful things for all mankind. You decide that now would be a great time to sell your bond after holding it for one year… and collecting that $800 interest payment. You think you’d like to sell it for $10,500. (Since the principal return is fixed (+10,000); the number of periods is fixed (4); and the interest payments are fixed ($800); but you’ve changed the price... something else has to adjust and that is the discount rate.) It’s kind of tricky to actually use those equations to solve for this by hand… you end up with two equations… one unknown, and set them equal. So, the easiest way to solve for this rate is actually in Excel, using the function =RATE(NPER, PMT, PV, FV). NPER = 4, PMT = 800, PV=-10500, and FV=10000. Hint to make sure that you catch the minus sign in front of the present value… buyer pays now for the positive return of 10,000 in the future.  That shows 6.54% as the effective discount rate (or rate of return) for the investor. That is the same thing as the yield to maturity. It specifies the return that a bond investor would see if he or she purchased the bond today and held it to maturity.  3. What factors (in terms of supply and demand) drive changes in the bond market? I hope it’s clear now how the tradeoff works between yields going UP when prices go DOWN, and vice versa. It happens because the COUPON rate, the number of periods, and the return of principal for a bond are fixed. So when someone sells a bond in the middle of its term, the only things that can change are the price and corresponding yield/discount rate.  Other commenters… including you… have touched on some of the reasons why the prices go up and down. Generally speaking, it’s because of the basics of supply and demand… higher level of bonds for sale to be purchased by same level of demand will mean prices go down. But it’s not ‘just because interest rates are going up and down’. It has a lot more to do with the expectations for 1) risk, 2) return and 3) future inflation. Sometimes it is action by the Fed, as Joe Taxpayer has pointed out. If they sell a lot of bonds, then the basics of higher supply for a set level of demand imply that the prices should go down. Prices going down on a bond imply that yields will go up. (I really hope that’s clear by now). This is a common monetary lever that the government uses to ‘remove money’ from the system, in that they receive payments from an investor up front when the investor buys the bond from the Fed, and then the Fed gradually return that cash back into the system over time.  Sometimes it is due to uncertainty about the future. If investors at large believe that inflation is coming, then bonds become a less attractive investment, as the dollars received for future payments will be less valuable. This could lead to a sell-off in the bond markets, because investors want to cash out their bonds and transfer that capital to something that will preserve their value under inflation. Here again an increase in supply of bonds for sale will lead to decreased prices and higher yields.  At the end of the day it is really hard to predict exactly which direction bond markets will be moving, and more importantly WHY. If you figure it out, move to New York or Chicago or London and work as a trader in the bond markets. You’ll make a killing, and if you’d like I will be glad to drive your cars for you.  4. How does the availability of money supply for banks drive changes in other lending rates?  When any investment organization forms, it builds its portfolio to try to deliver a set return at the lowest risk possible. As a corollary to that, it tries to deliver the maximum return possible for a given level of risk.  When we’re talking about a bank, DumbCoder’s answer is dead on. Banks have various options to choose from, and a 10-year T-bond is broadly seen as one of the least risky investments. Thus, it is a benchmark for other investments.  5. So… now, why do mortgage rates tend to increase when the published treasury bond yield rate increases? The traditional, residential 30-year mortgage is VERY similar to a bond investment. There is a long-term investment horizon, with fixed cash payments over the term of the note. But the principal is returned incrementally during the life of the loan.  So, since mortgages are ‘more risky’ than the 10-year treasury bond, they will carry a certain premium that is tied to how much more risky an individual is as a borrower than the US government.  And here it is… no one actually directly changes the interest rate on 10-year treasuries. Not even the Fed. The Fed sets a price constraint that it will sell bonds at during its periodic auctions. Buyers bid for those, and the resulting prices imply the yield rate. If the yield rate for current 10-year bonds increases, then banks take it as a sign that everyone in the investment community sees some sign of increased risk in the future. This might be from inflation. This might be from uncertain economic performance. But whatever it is, they operate with some rule of thumb that their 30-year mortgage rate for excellent credit borrowers will be the 10-year plus 1.5% or something. And they publish their rates.


Yes you can. You should talk to your tax advisor re the specific expenditures that can be accounted as startup-costs (legal fees are a good candidate, for example). If they add up to significant amounts (>$5K), you'll have to capitalize them over a certain period of time, and deduct from your business' income. This is not a tax advice.:-)


SMSFs are generally prohibited from acquiring assets from related parties (whether it is purchased by the SMSF or contributed into the fund). There are some exceptions to the above rule for acquiring related party assets, including: • Listed securities (ie shares, units or bonds listed on an approved stock exchange, such as the ASX) acquired at market value. • Business real property (ie freehold or leasehold interests in real property used exclusively in one or more businesses) acquired at market value. • An in-house asset where the acquisition would not result in the level of the fund’s in-house assets exceeding 5%. • Units in a widely held unit trust, such as a retail ,managed fund. In-house asset rules An ‘in-house asset’ is generally defined as: • An investment by an SMSF in a related company or trust (ie a fund owns shares in a related company or units in a related trust). • An asset of an SMSF that is leased to a related party. • A loan made by an SMSF to a related company or trust. An investment, lease or loan that is an in-house asset is not prohibited, but is limited to 5% of the market value of the fund’s assets. The Answer: If your pre-owned Western Australian Rock Lobster fishery quota units are not included in the exceptions then you cannot transfer them into your SMSF.


There is a shortcut you can use when calculating federal estimated taxes.  Some states may allow the same type of estimation, but I know at least one (my own--Illinois) that does not. The shortcut: you can completely base your estimated taxes for this year on last year's tax return and avoid any underpayment penalty.  A quick summary can be found here (emphasis mine): If your prior year Adjusted Gross Income was $150,000 or less, then   you can avoid a penalty if you pay either 90 percent of this year's   income tax liability or 100 percent of your income tax liability from   last year (dividing what you paid last year into four quarterly   payments). This rule helps if you have a big spike in income one year,   say, because you sell an investment for a huge gain or win the   lottery. If wage withholding for the year equals the amount of tax you   owed in the previous year, then you wouldn't need to pay estimated   taxes, no matter how much extra tax you owe on your windfall. Note that this does not mean you will not owe money when you file your return next April; this shortcut ensures that you pay at least the minimum allowed to avoid penalty. You can see this for yourself by filling out the worksheet on form 1040ES.  Line 14a is what your expected tax this year will be, based on your estimated income.  Line 14b is your total tax from last year, possibly with some other modifications.  Line 14c then asks you to take the lesser of the two numbers.  So even if your expected tax this year is one million dollars, you can still base your estimated payments on last year's tax.


"Hi, ""guy"" here! This was me. I think we have a PNC shill on our hands. Anyway, slrrp you're missing the point, I was called and asked specifically about why I'm buying bitcoin and was then told that PNC wants nothing to do with bitcoin. That is news. Me refusing to answer the question is not news, it is not about the response from me or them, it's about the initial impetus to call me."


"Since doodle77 handled arbitrage, I'll take goodwill.  Goodwill is an accounting term that acts much like a ""plug"" account: you add/subtract to it the amount that makes everything balance.  In the case of goodwill, it generally only applies to mergers & acquisitions.  The theory (and justification) is this: firms buy other firms at prices other than the market price (usually higher), and it is assumed that this is because the acquirer values its acquisition more than other people do.  But whether you use historical prices or market prices when you add (subtract) assets and liabilities to to (from) your balance sheet, this will never add up, because you paid more (less) than the assets are worth in the market, so more (less) cash flowed out than assets flowed in.  The difference goes into the goodwill account, so firms with a large goodwill account are ones that have made lots of acquisitions."


between two people purchasing a house together, one with good and one with bad credit, will having both persons on the loan raise the interest rates. If the house deed is on both names, generally the Bank would insist the loan should also be on both of your names. This to ensure that Bank has enough leverage to recover the house in case of default. If one of you has bad credit, bank would raise the interest rate, assumption that bad credit would drag the good credit and force him to some activities / actions that could stretch the finance of one with good credit. If timely payments are not made, it would make your good credit to bad. If the house deed is on only on your name and you can get the loan on your own, this would be a better position. If the house deed is on only on your name and you would like to loan to be on both names, then the positive side is credit score of the person with bad credit would start showing improvement over period, provided both of you make timely payments. As pointed out by keshlam, there are enough question where people have entered into agreement without deciding what would happen if they separate. There is no right / wrong answer. It would be best you decide how it would be with respect to the ownership in the house and with respect to payments and if in worst case you part ways, how the settlement should look like.


Investing is really about learning your own comfort level.  You will make money and lose money. You will make mistakes but you will also learn a great deal. First off, invest in your own financial knowledge, this doesn't require capital at all but a commitment. No one will watch or care for your own money better than yourself. Read books, and follow some companies in a Google Finance virtual portfolio. Track how they're doing over time - you can do this as a virtual portfolio without actually spending or losing money.  Have you ever invested before? What is your knowledge level? Investing long term is about trying to balance risk while reducing losses and trying not to get screwed along the way (by people).  My personal advice: Go to an independent financial planner, go to one that charges you per hour only. Financial planners that don't charge you hourly get paid in commissions. They will be biased to sell you what puts the most money in their pockets. Do not go to the banks investment people, they are employed by the banks who have sales and quota requirements to have you invest and push their own investment vehicles like mutual funds. Take $15k to the financial planner and see what they suggest. Keep the other $5K in something slow and boring and $1k under your mattress in actual cash as an emergency. While you're young, compound interest is the magic that will make that $25k increase hand over fist in time. But you need to have it consistently make money. I'm young too and more risk tolerant because I have time. While I get older I can start to scale back my risk because I'm nearing retirement and preserve instead of try to make returns.


I wouldn't only consider the entry/exit cost per trade. That's a good comparison page by the way. I would also consider the following. This depends if you are planning on using your online broker to provide all the information for you to trade. I have lower expectations of my online broker, not meant to be harsh on the online brokers, but I expect brokers to assist me in buying/selling, not in selecting. Edit: to add to the answer following a comment. Here are three pieces of software to assist in stock selection


You should probably get a professional tax advice, as it is very specific to the Philipines tax laws and the US-Philippine tax treaty. What I know, however, is that if it was the other way around - you paying a foreigner coming to the US to consult you - you would be withholding 30% of their pay for the IRS which they would be claiming for refund on their own later. So if the US does it to others - I'm not surprised to hear that others do it to the US.  Get a professional advice on what and how you should be doing. In any case, foreign taxes paid can be used to offset your US taxes using form 1116 up to some extent.


"If you haven't been a US resident (not citizen, different rules apply) at the time you sold the stock in Europe but it was inside the same tax year that you moved to the US, you might want to have a look at the ""Dual Status"" part in IRS publication 519."


"It's viable for you,  but the ""investor"" is either stupid or willing and able to write off the investment as a gift for a friend in need, knowing it will probably end the friendship.  The banks make their money off of indebtedness, with the highest returns being on the highest risk loans . If the bank isn't willing to give you that debt on your own,  it's because they already know it's a bad debt. In this case,  trust the banks. If you can't come up with the downpayment on your own, you won't be able to meet your other commitments on this contract."


ETFs trade on specific exchanges. If your broker deals with those exchanges, you should have access to the ETF. If your broker does not deal with that exchange, then you will not have access through that broker. This is different than, say, mutual funds, which don't trade on the exchanges are proprietary to certain brokerages or financial institutions.


The only reason I can think of is that the bonds are bought automatically by some investment pools, groups or institutions. That will stop very quickly once the management finds some other place to put the money.


Is there evidence of Russian money laundering through bitcoin or is this your assumption? As I understand it laundering through btc would require you to explain why your wallet has millions in it, doesn't seem useful  Edit: unless you maybe distributed the bitcoin to fake users and had them spend it on your own digital services? Would people be able to track the coins through the ledger and see that you're indirectly circulating coins from your personal wallet to your business one? I don't know I'm in too deep now


"In the US you are not required to have a corporation to use business expenses to offset your income. The technical term you need is ""deducting business expenses"", and in matters of taxes it's usually best to go straight to the horse's mouth: the IRS's explanations Deducting Business Expenses  Business expenses are the cost of carrying   on a trade or business. These expenses are usually deductible if the   business operates to make a profit.  What Can I Deduct? Cost of Goods   Sold, Capital Expenses, Personal versus Business Expenses, Business Use   of Your Home, Business Use of Your Car, Other Types of Business Expenses None of this requires any special incorporation or tax arrangements, and are a normal part of operating a business.  However, there is a bit of a problem with your scenario. You said you ""invested"" into a business, but you mentioned buying specific things for the business which is not generally how one accounts for investment. If you are not an owner/operator of the business, then the scenario is not so straight-forward, as you can't simply claim someone else's business expenses as your own because you invested in it. Investments are taxed differently than expenses, and based upon your word choices I'm concerned that you could be getting yourself into a bit of a pickle. I would strongly advise you to speak with a professional, such as a Certified Public Accountant (CPA), to go over your current arrangement and advise you on how you should be structuring your ongoing investment into this shared business. If you are investing you should be receiving equity to reflect your ownership (or stock in the company, etc), and investments of this sort generally cannot be deducted as an expense on your taxes - it's just an investment, the same as buying stock or CDs. If you are just buying things for someone else's benefit, it's possible that this could be looked upon as a personal gift, and you may be in a precarious legal position as well (where the money is, indeed, just a gift). And gifts of this sort aren't deductible, either.  Depending on how this is all structured, it's possible that you should both consider a different form of legal organization, such as a formal corporation or at least an official business partnership. A CPA and an appropriate business attorney should be able to advise you for a nominal (few hundred dollars, at most) fee. If a new legal structure is advisable, you can potentially do the work yourself for a few hundred dollars, or pay to have it done (especially if the situation is more complex) for a few hundred to a few thousand. That's a lot less than you'd be on the hook for if this business is being accounted for improperly, or if either of your tax returns are being reported improperly!"


Very good answers as to how 0% loans are typically done.  In addition, many are either tied to a specific large item purchase, or credit cards with a no interest period.  On credit card transactions the bank is getting a fee from the retailer, who in turn is giving you a hidden charge to cover that fee.  In the case of a large purchase item like a car, the retailer is again quite likely paying a fee to cover what would be that interest, something they are willing to do to make the sale.  They will typically be less prone to deal as low a price in negotiation if you were not making that deal, or at times they may offer either a rebate or special low to zero finance rates, but you don't get both.


Do I pay tax to the US and then also pay it in India for my income, or   does my American partner, who holds 15% of the monthly income, pay tax   in the US for his income? Of course you do, what kind of question is this? You have income earned in the US by a US entity, and the entity is taxed. Since LLC is a disregarded entity - the tax shifts to you personally. You should file form 1040NR. You should also talk to a tax professional who's proficient in the Indo-US tax treaty, since it may affect your situation.


"It is absolutely normal for your investments to go down at times. If you pull money out whenever your investments decrease in value, you lock in the losses.  It is better to do a bit of research and come up with some sort of strategy about how you will manage your investments.  One such strategy is to choose a target asset allocation (or let the ""target date"" fund choose it for you) and never sell until you need the money for retirement.  Some would advocate various other strategies that involve timing the market.  The important thing is that you find a strategy that you can live with and that provides you with enough confidence that you won't buy and sell at random.  Acting on gut feelings and selling whenever you feel queasy will likely lead to worse outcomes in the long run."


A rather good IRS paper on the topic states that a donation of a business' in-kind inventory would be  Under IRC 170(e)(1), however, the fair market value must be   reduced by the amount of gain that would not be long-term capital gain if the   property had been sold by the donor at the property's fair market value (determined   at the time of the contribution). Under this rule, deductions for donated inventory   are limited to the property's basis (generally its cost), where the fair market value   exceeds the basis.  There are references to IRC regulations in a narrative context you may find helpful: This paper goes on for 16 pages describing detailed exceptions and the political reasons for the exceptions (most of which are concerned with encouraging the donation of prepared food from restaurants/caterers to hunger charities by guaranteeing a value for something that would otherwise be trashed valueless); and a worked out example of fur coats that had a cost of goods of $200 and a market value of $1000.


If you move money - you don't need to pay any taxes. If the money was not there before and magically appeared at some point and now you want to move it - you'll have to explain a thing or two to the IRS and FinCEN. Generally, if you're a green card holder - you pay taxes on your worldwide income. So if you have a foreign account that earns interest - that interest is taxable to you in the US. In the year you earned it, not in the year you moved the money to the US. There are also reporting requirements (FBAR notably, and others). If you haven't filed FBAR with regards to the accounts which you now want to move, and especially if that also includes unreported income (interest and other) - you may find yourself in a very deep s#!t. Sorry, very deep troubles. Talk to a tax adviser (EA/CPA licensed in your State). A proper consultation is warranted, if you haven't had one already. You might need a tax attorney.


In THEORY, you don't have to pay income tax in such a situation. In actual fact, the transaction looks suspicious because the money went into your account.  Presumably, the money should have gone OUT of your account in equal amount.  Having allowed all this to happen, what you need to do is to DOCUMENT this activity ASAP. The first thing to do is to retain the paperwork showing the sending of the funds to the third party. The second thing to do is to ask your friend for a letter dated TODAY (don't use an earlier date) as to why the money was delivered into your account, and corroborating the fact that it was sent to the third party. Then if the IRS comes calling, you will have documentation to prove your point and protect yourself.


Much like any human interaction, a successful phone conversation rests on making a good first impression. Consequently, your customers would rather talk to a professional who is polite, patient, and knows his stuff rather than to a novice who stumbles over every word.


"Alternative Minimum Tax is based not just on your income, but moreso on the deductions you use. In short, if you have above the minimum AMT threshold of income (54k per your link), and pay a tiny amount of tax, you will pay AMT. AMT is used as an overall protection for the government to say ""okay, you can use these deductions from your taxable income, but if you're making a lot of money, you should pay something, no matter what your deductions are"". This extra AMT can be used to reduce your tax payment in a future year, if you pay regular tax again. For example - if you have 60k in income, but have 60k in specific deductions from your income, you will pay zero regular tax [because your taxable income will be zero]. AMT would require you to pay some tax on your income above the minimum 54k threshold, which might work out to a few thousand bucks. Next year, if you have 60k in income, but only 15k in deductions, then you would pay some regular tax, and would be able to offset that regular tax by claiming a credit from your AMT already paid.  AMT is really a pre-payment of tax paid in years when you have a lot of deductions. Unless you have a lot of deductions every single year, in which case you might not be able to get all of your AMT refunded in the end. Wikipedia has a pretty good summary of AMT in the US, here: https://en.wikipedia.org/wiki/Alternative_minimum_tax.  If you think AMT is unfair (and maybe in some cases you might pay it when you think it's ""unfair""), look at the root causes of paying AMT listed in that Wikipedia article: I am not trying to convince you that AMT is fair, just that it applies only when someone already has a very low tax rate due to deductions. If you have straight salary income, it would only apply in rare scenarios."


"Yes- you do not realize gains or losses until you actually sell the stock.  After you sell the initial stocks/bonds you have realized the gain.  When you buy the new, different stocks you haven't realized anything until you then sell those. There is one exception to this, called the ""Wash-Sale Rule"".  From Investopedia.com: With the wash-sale rule, the IRS disallows a loss deduction from the   sale of a security if a ‘substantially identical security' was purchased within 30 days before or after the sale.  The   wash-sale period is actually 61 days, consisting of the 30 days before   and the 30 days after the date of the sale. For example, if you bought   100 shares of IBM on December 1 and then sold 100 shares of IBM on   December 15 at a loss, the loss deduction would not be allowed.   Similarly, selling IBM on December 15 and then buying it back on   January 10 of the following year does not permit a deduction. The   wash-sale rule is designed to prevent investors from making trades for   the sole purpose of avoiding taxes."


I do this often and have never had a problem.  My broker is TD Ameritrade and they sent several emails (and even called and left a message) the week of expiry to remind me I had in the money options that would be expiring soon. Their policy is to automatically exercise all options that are at least $.01 in the money.  One email was vaguely worded, but it implied that they could liquidate other positions to raise money to exercise the options.  I would have called to clarify but I had no intention of exercising and knew I would sell them before expiry. In general though, much like with margin calls, you should avoid being in the position where the broker needs to (or can do) anything with your account. As a quick aside:  I can't think of a scenario where you wouldn't be able to sell your options, but you probably are aware of the huge spreads that exist for many illiquid options.  You'll be able to sell them, but if you're desperate, you may have to sell at the bid price, which can be significantly (25%?) lower than the ask.  I've found this to be common for options of even very liquid underlyings.  So personally, I find myself adjusting my limit price quite often near expiry.  If the quote is, say, 3.00-3.60, I'll try to sell with a limit of 3.40, and hope someone takes my offer.  If the price is not moving up and nobody is biting, move down to 3.30, 3.20, etc. In general you should definitely talk to your broker, like others have suggested.  You may be able to request that they sell the options and not attempt to exercise them at the expense of other positions you have.


Are you planning to not pay taxes? Any time someone has income in the U.S., it is subject to U.S. taxes. You must file tax returns (and pay taxes if necessary) if you have income above a certain threshold, regardless of whether you're not authorized to work or not. If you plan to intentionally not pay taxes, then that's a whole other matter from working without authorization. Working without authorization is an immigration issue. It probably violates the conditions of your status, which will make you to automatically lose your status. That may or may not affect when you want to want to visit, immigrate to, or get other immigration benefits in the U.S. in the future; and at worst you may be deported. It's a complicated topic, but not really relevant for this site.


"The problem is that if you sold off in 2010 you missed on out the market practically doubling itself. I would definitely be kicking myself.  No, it's not sustainable but no one knows what the market is going to do compared to other assets. Is the economy going to grow into the market, is it going to double dip? ""When"" is a key factor here."


What if there is only one trading day and the volume is smaller than   the open interest on that one trading day. This is assuming there is   no open interest before that day? I pulled this from a comment. This can't happen. We have zero open interest on day one. On day 2, I buy 10 contracts. Volume is 10 and now open interest is also 10. Tomorrow, if I don't sell, open interest starts at 10 and will rise by whatever new contracts are traded.   This is an example. I removed the stock name. This happens to be the Jan'17 expiration. The 10 contract traded on the $3 strike happen to be mine. You can see how open interest is cumulative, representing all outstanding contracts. It's obvious to me the shares traded as high as $5 at some point which created the interest (i.e. the desire) to trade this strike. Most activity tends to occur near the current price.


What would you do if you had the check?  Probably destroy it.  The goal is to render it uncashable.  One way to do such is to have it shredded.   If you are uncomfortable leaving them to destroy it, then swing by and pick it up.  Alternatively offer to send them a self addressed and stamped envelope.  I am sure they will accommodate if you ask nicely.


"The major bureaus use the Fair Isaac scoring model, for the most part.  Here's an excerpt from a web site (Versions of the FICO scoring model) to explain: One of the first things a newcomer to this board learns is the difference between FICO and FAKO scores. FAKO refers to the non-FICO scores offered by various companies. FAKO scores have little value since few of them are used by lenders and they do not match closely to FICO scores.    But even when you stick with FICO scores, confusion can ensue because FICO scores have many different editions, versions, and variations. On a single day, a consumer could theoretically have dozens of different FICO scores, depending on which version and credit agency is used to produce the score.   This post provides a summary of the various FICO versions. Please offer any corrections or updates, and they will be edited in.   The FICO scoring model with its familiar range of 300 to 850 was first introduced in 1989. Since then, FICO has released five major revisions:   1995, 1998, 2004, 2008, and 2014.  Each ""edition"" uses a different formula and produces a different score.   When a new FICO edition is released, many lenders continue using an older version for years before ""upgrading."" The 1995 revision is no longer in common use, but later editions are still used by lenders.   Most FICO editions are commonly known by the year of introduction:  FICO 98, FICO 04, and FICO 08 (although FICO now calls it FICO Score 8, without the zero).   The most recent edition is FICO Score 9 introduced in 2014.   As of 2014, FICO Score 8 is the most commonly used. However, most mortgage lenders use FICO 04 for Equifax and Transunion, and FICO 98 for Experian.   In addition to the ""classic"" version, FICO offers ""Industry Option"" versions customized for auto loans, credit cards, installment loans, personal finance loans, and insurance. These have a score range of 250 to 900, so the scores are not fully comparable with ""classic"" versions. As of 2015, Auto and Bankcard scores are available from myFICO as described here.  Citibank provides the Equifax FICO 8 Bankcard score free each month to credit cards holders.   Each credit agency (Transunion, Equifax, and Experian) uses a customized version of each FICO edition. As a result, a consumer's FICO scores from each agency may differ even when all credit information is identical among the agencies.   Because there are many FICO versions, when a score is received, it's helpful to know which version it is. If a lender provides a credit score, ask for details such as which credit agency was used, which FICO edition was used, and whether the score is an Industry Option version. The lender may not always be willing or able to provide the answers, but it doesn't hurt to ask.  Transunion   Official name:   FICO Risk Score Classic 98    Common name:  TU-98   Available directly to consumers:   No    Real-world score range:  336 to 843     (as shown on page 16 of this Transunion document)   Equifax   Official name:   Equifax FICO Score 4  (also known as Equifax Beacon 96)   Common name:   EQ-98   This version appears to be seldom used, but a poster reported it used on a mortgage application in 2014.   Available directly to consumers:   No   Experian   Official name:   Experian FICO Score 2  (also known as Experian FICO Risk Model v2)   Common name:   EX-98   Available directly to consumers:   from myFICO when buying a product that includes all 19 available scores (as described here).  Some credit unions such as PSECU provide it free each month to members.   Real-world score range:   320 to 844     (as shown on this Experian document) Most mortgage lenders use FICO 04 for Equifax and Transunion, and FICO 98 for Experian.   All three scores will normally be pulled and the middle score (not the average) will be used by the lender. Transunion   Official name:   Transunion FICO Score 4  (also known as Transunion FICO Risk Score Classic 04)   Common name:  TU-04   Available directly to consumers:   from myFICO as described here.   Real-world score range:   309 to 839     (as shown on page 16 of this Transunion document)   Equifax   Official name:   Equifax FICO Score 5  (also known as Equifax Beacon 5.0)   Common name:   EQ-04   Available directly to consumers:   from myFICO as described here.  Also available from Equifax when buying FICO score (as a one-time purchase with the ""Score Power"" product available here, or as part of credit monitoring available here).  Some credit unions such as DCU provide it free each month to members.    Real-world score range:   334 to 818   Experian   Official name:   Experian FICO Score 3 (also known as Experian FICO Risk Model v3)   Common name:   EX-04   Available directly to consumers:   from myFICO when buying a product that includes all 19 available scores (as described here).   Real-world score range:   325 to 850     (as shown on this Experian document) Transunion   Official name:   Transunion FICO Score 8  (also known as Transunion FICO 8 Risk Score or FICO Risk Score Classic 08)   Common name:   TU-08   Available directly to consumers:   from myFICO as described here. Some credit card issuers such as Discover, Barclays, and Walmart provides it free each month.   Real-world score range:   341 to 850     (as shown on page 15 of this Transunion document)   Equifax   Official name:   Equifax FICO Score 8  (also known as Equifax Beacon 09)   Common name:   EQ-08   Available directly to consumers:   from myFICO as described here.    Real-world score range:   300  to 850   Experian   Official name:   Experian FICO Score 8  (also known as Experian FICO Risk Model v8)   Common name:   EX-08   Available directly to consumers:   from myFICO as described here.   Real-world score range:   316  to 850     (as shown on this Experian document) How FICO Score 8 differs from previous versions is explained here.    In May 2014, a poster named android01 received 850 scores from all three credit agencies, as described in this post.    In June 2014, a poster named fused received 850 scores from all three credit agencies, as described in this post.   This 2011 press release describes a study of FICO Score 8 scores.   From a sample of 250,000 credit reports, it found 0.02% had a score of 850, or about 1 out of every 5000 persons. In 2014, FICO announced a new version called FICO Score 9.  More info here. As of February 2016, the score is now available directly to consumers, as described here. This New York Times article  says FICO 9 includes two important changes:    unpaid debts that result in collection actions will no longer have a negative effect on a score if the debt has been paid.    unpaid medical debts will have less negative effect on scores. In 2001, FICO released a new scoring model called NextGen.   It is claimed to be an improvement over ""classic"" FICO models because it tracks more factors.  But it has failed to catch on with lenders because its score range of 150 to 950 is incompatible with the familiar 300 to 850 range, requiring lenders to recalculate cutoff scores and revise many rules and policies.  Only a small percentage of lenders reportedly use NextGen. Transunion   Official name:   Precision   Available directly to consumers:    No   Equifax   Official name:   Pinnacle   Available directly to consumers:   In 2014, Pentagon Federal Credit Union (PenFed) began to provide this score free to its credit card holders, as discussed in this post.   Experian   Official name:   FICO Advanced Risk Score   Available directly to consumers:    No I included all of this to make the point that there are many variations of the scoring models, and all of them are customized to one degree or another by each of the major bureaus as a means of giving their models more credibility, as far as they're concerned. To your question about coming up with a ""fair"" scoring model, can you propose what makes current scoring models unfair?  I think it's a safe assumption to make that the financial community has already had a substantial amount of input into how the current scoring models work.  To think otherwise implies that the credit bureaus are just kinda ""winging it"" with whatever they think is best.  Their models are designed to give their client creditors the best scoring model possible based on what those creditors have stated is important to them. There isn't a unified single scoring model out there, and the bureaus definitely won't share the details of their modifications.  You can always come up with your own custom model, but how it compares to what's widely used, that's anyone's guess. I hope this helps. Good luck!"


This analysis misses the opportunities the Roth IRA presents to those with special access. It assumes that all money grows at the same rate, with investments at regular intervals. These assumptions hold for normal workers, but not for the privileged.  Suppose, for example, that in a single year you have limited access to a security that is an acorn you know will grow into a mighty oak; for this example, this security will grow 1000x over some short period of time. For simplicity, assume both the value of acorns you can buy and the the maximum IRA contribution in this year is $5K.  After the short acorn growth period, the after tax values are: There is a minor difference in the amount of money you need to buy the acorns (pre v. post tax), but this is negligible relative to the amount of cash you can assume you have on hand to have special access.  The Atlantic provides an acorn example from private equity (not used with a Roth) and this Washington Post article describes someone with non-publicly traded startup stocks and a Roth.


"First check: Do you have all the insurances you need? The two insurances everyone should have are: Another insurance you might want to get is a contents insurance (""Hausratsversicherung""). But if you don't own any super-expensive furniture or artworks, you might also opt to self-insure and cover it with: Priority 2: Emergency fund. Due to the excellent healthcare and welfare system in Germany, this is not as important as in many other countries. But knowing that you have a few thousand € laying around in liquid assets in case something expensive breaks down can really help you sleep at night. If you decide not to pay for contents insurance, calculate what it would cost you if there is a fire in your apartment and you would have to replace everything. That's how large your emergency fund needs to be. You also need a larger emergency fund if you are a homeowner, because as a homeowner there might always be an emergency repair you have to pay for. Priority 3: Retirement. Unless there will be some serious retirement reforms in the next 40 years (and I would not bet on that!), the government-provided pension will not be enough to cover your lifestyle cost. If you don't want to suffer from poverty as a senior citizen you will have to build up a retirement plan now. Check which options your company provides (""Betriebliche Altersvorsorge"") and what retirement options you have which give you free money from the government (""Riester-Rente""). Getting professional advise to compare all the options with each other can be really beneficial. Priority 4: Save for a home. In the long-run, owning a home is much cheaper than renting one. Paying of a mortgage is just like paying rent - but with the difference that the money you pay every month isn't spent. Most of it (minus interest and building maintenance costs) stays your capital! At one point you will have paid it off and then you never have to pay rent in your life. It even secures the financial future of your children and grandchildren, who will inherit your home. But few banks will give you a good interest rate if you have no own capital at all. So you should start saving money now. Invest a few hundred € every month in a long-term portfolio. You might also get some additional free money for this purpose from your employer (""Vermögenswirksame Leistungen"")."


From the IRS Section 1091. Loss from Wash Sales of Stock or Securities  Section 1091(a) provides that in the case of any loss claimed to have been sustained from any sale or other disposition of shares of stock or securities where it appears that, within a period beginning 30 days before the date of such sale or disposition and ending 30 days after such date, the taxpayer has acquired (by purchase or by an exchange on which the entire amount of gain or loss was recognized by law),or has entered into a contract or option so to acquire, substantially identical stock or 3 securities, then no deduction shall be allowed under § 165 The document is not long, 4 pages, and should be read to see the intent. It's tough to choose the one snippet, but the conclusion is this is the definitive response to that question.  A purchase within an IRA or other retirement account can create a wash sale if such a purchase would be a wash sale otherwise, i.e. the fact that it's a retirement account doesn't avoid wash rules.


You should consider dollar cost averaging your investments. Retirement account is perfect for that - it's long term with periodic deposits. Overall, by investing in stocks now for a long term, you'll benefit more because the stocks are at their low(er) point.


I understand your point now. When I first read your comment, I gathered that you were making a prediction of a 50% drop (thus my comment about the fool's errand of making predictions).  I now see that you were commenting on the high price volatility of gold and silver.


How is it possible that long term treasury bonds, which the government has never defaulted on, can hold more risk as an ETF then the stock market index? The risk from long-term bonds isn't that the government defaults, but that interest rates go up before you get paid, so investors want bonds issued more recently at higher interest rates, rather than your older bonds that pay at a lower rate (so the price for your bonds goes down). This is usually caused by higher inflation rates which reduce the value of the interest that you will be paid. Do you assume more risk investing in bond ETFs than you would investing in individual bonds? If you are choosing the right ETFs, there should be a lower amount of risk because the ETFs are taking care of the difficult work of buying a variety of bonds.  Are bond ETFs an appropriate investment vehicle for risk diversification? Yes, if you are investing in bonds, exchange traded funds are an appropriate way to buy them. The markets for ETFs are usually very liquid.


Dividends are not paid immediately upon reception from the companies owned by an ETF. In the case of SPY, they have been paid inconsistently but now presumably quarterly.


"Do I understand correctly, that we still can file as ""Married filing   jointly"", just add Schedule C and Schedule SE for her? Yes. Business registration information letter she got once registered   mentions that her due date for filing tax return is January 31, 2016.   Does this prevent us from filing jointly (as far as I understand, I   can't file my income before that date)? IRS sends no such letters. IRS also doesn't require any registration. Be careful, you might be a victim to a phishing attack here. In any case, sole proprietor files a regular individual tax return with the regular April 15th deadline. Do I understand correctly that we do not qualify as ""Family   partnership"" (I do not participate in her business in any way other   than giving her money for initial tools/materials purchase)? Yes. Do I understand correctly that she did not have to do regular   estimated tax payments as business was not expected to generate income   this year? You're asking or saying? How would we know what she expected? In any case, you can use your withholding (adjust the W4) to compensate."


"> Wall St ripped off retail investors pretty good  ""Ripped off"" ?  How about ""retail investors did not sufficiently research and think about the company, invested poorly""  Seriously, a 20 minute thought experiment pre-IPO of ""is Facebook worth $100bn, and does it have growth prospects?"" ought to immediately discount the stock. The smart money was always on ""short it as soon as you can""  If you're making investment decisions like ""Hey, I know what that company is. I use facebook!"" you deserve to lose money."


"Buying pressure is when there are more buy orders than sell orders outstanding.  Just because someone wants to buy a stock doesn't mean there's a seller ready to fill that order.  When there's buying pressure, stock prices rise.  When there's selling pressure, stock prices fall. There can be high volume where buying and selling are roughly equal, in which case share prices wouldn't move much. The market makers who actually fill buy and sell orders for stock will raise share prices in the face of buying pressure and lower them in the face of selling pressure.  That's because they get to keep the margin between what they bought shares from a seller for and what they can sell them to a new buyer for.  Here's an explanation from InvestorPlace.com about ""buying pressure"": Buying pressure can basically be defined as increasingly higher demand for a particular stock's shares. This demand for shares exceeds the supply and causes the price to rise. ... The strength or weakness of a stock determines how much buying or selling interest will be required to break support and resistance areas. I hope this helps!"


Three things prevent you from doing this: Credit cards generally don't accept other credit cards as payment.  You could do this with a cash advance or balance transfer, but Cash advances and balance transfers usually have fees associated with them, negating any reward you might earn. Your card might have a no-fee balance transfer promotion going, but Cash advances and balance transfers generally aren't eligible for rewards.


"A lot of credit card companies these days uses what they call ""daily interest"" where they charge the interest rate for the number of days till you pay off what you spent. This allows them to make more money than the ""period billing"".  The idea of credit, theoretically, is that there isn't really a day when you can borrow without paying interest - in theory"


"You're missing a very important thing: YEAR END values in (U.S.) $ millions unless otherwise noted So 7098 is not $7,098.  That would be a rather silly amount for Coca Cola to earn in a year don't you think?  I mean, some companies might happen upon random small income amounts, but it seems pretty reasonable to assume they'll earn (or lose) millions or billions, not thousands. This is a normal thing to do on reports like this; it's wasteful to calculate to so many significant digits, so they divide everything by 1000 or 1000000 and report at that level.  You need to look on the report (usually up top left, but it can vary) to see what factor they're dividing by. Coca Cola's earnings per share are $1.60 for FY 2014, which is 7,098/4450 (use the whole year numbers, not the quarter 4 numbers; and here they're both in millions, so they divide out evenly).   You also need to understand that ""Dividend on preferred stock"" is not the regular dividend; I don't see it explicitly called out on the page you reference.  They may not have preferred stock and/or may not pay dividends on it in excess of common stock (or at all)."


The Khan Academy has a huge series on finance (Sal Khan used to work at a hedge fund before he started his magnum opus): http://www.khanacademy.org/#core-finance  Some are pretty basic stuff, but he does have some interesting commentary and snippets of more interesting topics. They're all very low-commitment and bite-sized.


Looking at the numbers quickly,  if he makes this amount for the entire year, single, no kids, no investment income, standard deduction only, his taxable income will be about $110,000.*  That puts him in the 28% tax bracket.  His federal tax would be:  $18,481.25 plus 28% of the amount over $90,750 Which comes out to about $23,800 in tax liability.  His federal withholding is $26,047 for the year, so with absolutely no deductions whatsoever, he will be getting a tax refund of about $2200. I'm not very familiar with the California tax return, but it is entirely possible that he would get a decent sized refund from the state as well.  This means that his tax refund could be about the size of an extra paycheck.  He may want to consider increasing his allowances, which would make his paychecks bigger and his tax refund smaller. That having been said, taxes are high, no doubt about it.  Remember that when you are in the voting booth.  :) * Here is how I got the taxable income number for the year:


"Yep. You're single, you're possibly still a dependent on your parent's taxes (in lieu of rent), and you're finally bringing home bacon instead of bacon bits. Welcome to the working world. Let's say your gross salary is the U.S. median of $50,000. With bi-weekly checks (26 a year; common practice) you're getting $1923.08 per paycheck. In the 2013 ""Percentage Method"" tax tables, here's how your federal withholding is calculated as a single person paid biweekly: Federal taxes are computed piecewise; the amount up to A is taxed at X%, then the amount between A and B is taxed at Y%, so if you make $C, between A and B, the tax is (A*X) + (C-A)*Y. The amount A*X is included in the ""base amount"" for ease of calculation. Back to our example; let's say you're getting $1923.08 gross wages per check. That puts you in the 25% marginal bracket. You pay the sum of all lesser brackets (which is the ""base amount"" of the 25% bracket), plus the 25% marginal rate on every dollar that falls within the bracket. That's 191.95 + (1923.08 - 1479) * .25 = 191.95 + (444.08 * .25) = 191.95 + 111.02 = $302.97 per paycheck. The ""effective"" tax rate on the total amount, as if you were being charged a flat tax, is 15.75%, and this is just for the federal income tax. Add to this MA state income taxes (5.25% flat tax), FICA (aka Medicare; 1.45% flat) and SECA (aka Social Security; 6.2% up to a ""wage base"" that $50k doesn't even approach), and your effective tax rate on each dollar you earn is 15.75% + 5.25% + 1.45% + 6.2% = 28.65%. This doesn't include any state unemployment taxes that may be withheld separately, but as the rate I come up with is pretty darn close to what you've figured (meaning I slightly overestimated your gross income and thus your effective tax rate), my bet is that SUTA's either employer-paid in MA, or it's just part of MA state income tax. It gets better, at least at the federal level: The amount of your state income taxes is tax-deductible at the federal level if you itemize your deductions. That may not be a factor for you as you'd have to come up with more than $6,100 of other tax-deductible expenses to make itemizing the better option than taking the standard deduction (big-ticket items are mortgage expenses other than principal payments, hospital stays such as for childbirth or major accident, and state and local taxes such as sales, property and income). If you can claim yourself as a dependent (meaning your parents can't), then $150 of each check ($3,900 of your annual salary) is no longer taxed for federal withholding, lowering the amount of money taxed at the 25% marginal rate. You effectively save $37.50 biweekly ($975 annually) in taxes. Get married and file jointly, and your spouse, her personal exemption, and an extra standard deduction amount (if you don't itemize) go on your taxes. The tax rates for married couples filing jointly are also lower; they're currently calculated (or were in 2012) to be the same as if two equal earners were to file separately, so if your spouse doesn't work, your taxes on the single income are calculated at the rates you'd get if you earned half as much. It doesn't work out to half the taxes, but it is a significant ""marriage advantage"". Have kids, and each one is another little $3,900 tax write-off. It's nowhere near the cost of having or raising the child, but it helps, and having kids isn't about the money. Owning a home, making charitable deductions, having medical expenses, etc are a toss-up. The magic number in 2013 is $12,200 for a married couple, $6,100 for a single person. If your mortgage interest, insurance premiums, property taxes, medical expenditures, charitable donations, any contributions from your take-home pay to a tax-deferred savings account (typically these accounts are paid into by your employer as a ""pre-tax deduction"" and never show up as taxable income, but you could just as easily move money from your take-home pay into tax-deferred savings) and any other tax-deductible payments add up to more than 12 large, then itemize. If not, take your standard deduction. As a single taxpayer just starting out in life, you probably don't have any of these types of expenditures, certainly not enough to give up the SD. I did the math on my own taxes in 2012, and was surprised at how little the government actually gets of my paycheck when all's said and done. Remember back in the summer of 2012 when everyone was mad at Romney for making millions and only paying an effective income tax rate of 14%, which was compared to the middle class's marginal rate of 25-28%? Well, my family of 3, living on a little more than the median income from one earner (me), taking the married standard deduction, three personal exemptions, and a little extra for student loan interest, paid an effective federal income tax rate of something like 3.5%. Of course, the FICA and SS taxes don't allow any deductions (not even for retirement savings), so add in the 4.2% SS (in 2012) and 1.45% FICA and the full federal gimme was more like 9-10%."


"Both models understand that the value of a company is the sum total of all cashflows in the future, discounted back to the present. They vary in their definition of ""cash"". The Gordon Growth model uses dividends as a proxy for cashflow, under the assumption that this is the only true cash received by shareholders. (In theory, counting cash is meaningless if there's no eventual end-game where the accumulated cash is divvied up amongst the owners.) The Gordon model is best used to value companies that have an established, reliable dividend. The company should be stable, and the payout ratio high. GG will underestimate the value of firms that consistently maintain a low payout ratio, and instead accumulate cash. There are multiple DCF models. A firm valuation measures all cash available to both equity and debt holders. A traditional equity valuation measures all cash that can be claimed by shareholders. While the latter seems most intuitive and pertinent to a shareholder, the former is very good at showing what a company can do regardless of their choice of capital structure. A small add-on to a firm valuation is the concept of EVA, or economic value add, where the return on capital (all capital -- both debt and equity) is compared to the blended cost of capital. The DCF model is more flexible (optimistic?) than the Gordon in its approach to cash. The approach can be applied to many types of companies, at every stage in their maturity, even if they don't pay a dividend. A simplistic, or single-stage DCF is similar to the Gordon. The assumption is that the company is fully mature, growing at a rate perhaps just slightly above inflation, forever. For younger companies a multi-stage DCF can be employed, where you forecast fairly confident numbers for the next 3-5 years, then 3-5 years beyond that the forecast is less certain, but assumed to be slowing growth, and a generally maturing, stabilizing company. And then the steady-state stage is tacked on to the end. You'll want to check out Professor Aswath Damodaran's website: http://pages.stern.nyu.edu/~adamodar/ . He addresses all this and so much more, and has a big pile of spreadsheets freely downloadable to get you started. I also highly recommend his book ""Investment Valuation"". It's the bible on the topic."


As someone who works for a company that deploys POS systems in Canada, I can tell you that your best bet would be to have a configuration option that lets the client decide what to do. If they have a business practice that would allow for a sale total to be $0.01 or $0.02, they should first evaluate their business practice.  If you're building a POS system to deploy in Canada, I'm sure you have access to resources (potential clients) who would already know how they would want to handle this. Ask them.


"Given the current low interest rates - let's assume 4% - this might be a viable option for a lot of people.  Let's also assume that your actual interest rate after figuring in tax considerations ends up at around 3%.  I think I am being pretty fair with the numbers. Now every dollar that you save each month based on the savings and invest with a higher net return of greater than 3% will in fact be ""free money"".  You are basically betting on your ability to invest over the 3%.  Even if using a conservative historical rate of return on the market you should net far better than 3%.  This money would be significant after 10 years.   Let's say you earn an average of 8% on your money over the 10 years.  Well you would have an extra $77K by doing interest only if you were paying on average of $500 a month towards interest on a conventional loan.  That is a pretty average house in the US.  Who doesn't want $77K (more than you would have compared to just principal).  So after 10 years you have the same amount in principal plus $77k given that you take all of the saved money and invest it at the constraints above. I would suggest that people take interest only if they are willing to diligently put away the money as they had a conventional loan.  Another scenario would be a wealthier home owner (that may be able to pay off house at any time) to reap the tax breaks and cheap money to invest. Pros: Cons: Sidenote:  If people ask how viable is this.  Well I have done this for 8 years.  I have earned an extra 110K.  I have smaller than $500 I put away each month since my house is about 30% owned but have earned almost 14% on average over the last 8 years.  My money gets put into an e-trade account automatically each month from there I funnel it into different funds (diversified by sector and region).  I literally spend a few minutes a month on this and I truly act like the money isn't there.  What is also nice is that the bank will account for about half of this as being a liquid asset when I have to renegotiate another loan."


Such an offer has negative value, so it's hard to see how it would make sense to accept it. The offer has two components, one part that you gain and one part that you lose. The gain is that half your losses are covered. The cost is that half your profits are lost. For that to be a net benefit to you, you would have to expect that you will gain more from this than you will lose from it. That is, you must expect that the investment has negative value. But if you expect that the investment has negative value, why are you investing? This also doesn't really align incentives between the two parties. The person choosing the investment is not incurring opportunity cost (because they have no funds locked up) while you are. So they have an incentive to be conservative that you do not. For example, say I could make 1% in an ultra low risk CD. The person choosing the investments has an incentive to put me in something that he only expects to make around 0.5% (because he gets to keep half the profits and it costs him nothing). Whereas I'd rather just put the money in a CD (because I get to keep 1% instead just half of 0.5%).


The company may not permit a transfer of these options. If they do permit it, you simply give him the money and he has them issue the options in your name.  As a non-public company, they may have a condition where an exiting employee has to buy the shares or let them expire.  If non-employees are allowed to own shares, you give him the money to exercise the options and he takes possession of the stock and transfers it to you.  Either way, it seems you really need a lawyer to handle this. Whenever this kind of money is in motion, get a lawyer.  By the way, the options are his. You mean he must purchase the shares, correct?


If you are trading CFDs, which are usually traded on margin, you will usually be charged an overnight financing fee for long positions held overnight and you will receive an overnight financing credit for short positions held overnight. Most CFD brokers will have their overnight financing rates set at + or - 2.5% or 3% from the country's official interest rates. So if your country's official interest rate is 5% and your broker uses + or - 2.5%, you will get a 2.5% credit for any short positions held overnight and pay 7.5% fee for any long positions held overnight. In Australia the official interest rate is 2.5%, so I get 0% for short positions and pay 5% for long positions held overnight. If you are looking to hold positions open long term (especially long positions) you might think twice before using CFDs to trade as you may end up paying quite a bit in interest over a long period of time. These financing fees are charged because you are borrowing the funds to open your positions, If you buy shares directly you would not be charged such overnight financing fees.


As long as you can get a cash advance on the credit card if you need it, then you're not putting the money beyond use if you use it to pay down card debt, you're just putting it where it gets the best rate of return.


> Are you saying that OP was just unlucky because he didn't realize that forex wasn't covered under SIPC?  Pretty much.  Opening an investing account has tons of T&C.  You're not going to read every single bit of it.


"In your case, I believe the answer is that you don't owe any taxes, if your deductions exceed your income. There is something called the Alternate Minimum Tax to catch ""rich"" people, who claim ""too many"" deductions. Basically, it taxes their ""gross"" income at a lower rate, but allows them no deductions if they make $175,000 or more. You are not in that tax ""bracket."""


If his credit union participates in the national Co-Op, then he will be able to withdraw money at any participating credit union. He could just bring cash a check out in his name, just like he would at home.


Tax accountant here.  The money is yours and you can do what ever you want with it. Just make sure to put it on the books as Loan Receivable and have an Interest Income account.


Capital One's normal master card is known to approve people with limited or bad credit history. If not that look into a secured credit card.  You put down a deposit of $200 or more and you get that much in credit, sometimes more.


Yeah, that's what I do, just buy the indices and forget it. My portfolio is so boring it's elegant, and makes money too.  4.5% YTD and 5.9% in 2016, not bad for a 30/70 stock bond split for this 70-year-old. Oh, did I tell you my costs are .06%! I am enjoying the freedom of my retirement.


The calculation is to figure out how many dollars you get in return for the amount of dollars you spend. In your case, you know you get 1000 points for $1000 dollars, and can redeem one movie ticket for 1000 points. Therefore, Granted that you could also redeem a $8-9 ticket, making your return 0.8-0.9%.  In addition, this can get more complicated for some points cards that may give out free points, and is especially so if there's an intermediary such as AIR MILES, for which points can be earned in numerous ways. To get really nitty gritty, you could to keep a spreadsheet where you list number of dollars spent, number of points gained, number of points redeemed, and value of reward received. Thus, you can figure out exactly what your cost is for each point (second factor from above), as well as the ultimate value of each point with respect to rewards redeemed (first factor). I'm considering doing that myself since I'm prone to spreadsheet addiction, but this method is likely overkill for most points cards.


Yes. Not doing so would be like turning down a raise. The best advice in almost every situation is to at least contribute up to the amount that the company will match so you get the full benefit. One thing to clarify that you might not be understanding. The vesting period is only for the money the company matches, not your own investment. Even if you leave the company before the account is vested or fully vested, you can transfer to a 401k at your new employer, or roll over into an IRA, or take as taxable income (and pay a penalty if it is an early withdrawal), all your contributions together with any investment gains or losses that have occurred. Ditto whatever part of your employer match that has vested by the time you leave. Often, the employer matching contributions are invested in the  same funds in the same proportions that you have chosen for your own contributions and thus will have incurred the same gains or losses as your own contributions, but  what you are entitled to take with you is the part that has vested. Also, you mention that it is unlikely that you will stay the entire 5 years. However, if you plan to at least stay a couple of years it makes sense to get the 20%, 40%, etc. of the match that you vest during your stay. Again, it's free money.


"Those advantages you've described (tax treatment and employee match) are what you receive in exchange for ""locking up"" the money. Ultimately it's a personal choice of whether that tradeoff makes sense for you situation (I'll echo the response that the real answer to your question is planning). Roth options (either 401K or IRA) may be good compromises for you, since you can withdraw those contributions (but not the earnings) without any penalty, since you've already paid taxes on them. Another avenue to explore may be a self-directed IRA or a Solo 401(k), depending on your circumstances and eligibility. In both cases, there are plan providers that structure the plan to allow you to use the money to invest in things besides traditional stocks, bonds, and mutual funds (often referred to as ""checkbook control"" accounts). They are very commonly used among Real Estate investors (this thread from BiggerPockets has quite a bit of info). You'd want to consult with an accountant or financial adviser before going down that path."


It depends on the market that you participate in. Stock markets are not zero sum as JoeTaxpayer explained. On the other hand, any kind of derivative markets (such as options or futures) are indeed zero sum, due to the nature of the financial instruments that are exchanged. Those markets tend to be more unforgiving. I don't have evidence for this, but I believe one of the reasons that investors so often lose their money is psychology. The majority of us as humans are not wired to naturally make the kinds of rigorous and quick decisions that markets require, especially if day trading. Some people can invest time and energy to improve themselves and get over that. Those are the ones who succeed.


"If you make $10 in salary, $5 in interest on savings, and $10 in dividends, your income is $25, not $10. If you have a billion dollars in well-invested assets, you can take a loan against those assets and the interest payment on the loan will be smaller than the interest you earn on the assets. That means your investment will grow faster than your debt and you have a net positive gain. It makes no sense to do this if the value of your asset is static. In that case, you would be better off just to withdraw from the asset and spend it directly, since a loan against that static asset will result in you spending your asset plus interest charges. If you have a good enough rate of return on your investment, you may actually be able to do this in perpetuity, taking out loan after loan, making the loan payments from the loan proceeds, while the value of your original asset pool continues to grow. At any given time, though, a severe downturn in the market could potentially leave you with large debts and insufficient value in your assets to back the debt. If that happens, you won't be getting another loan and the merry-go-round will stop spinning. It's a bit of a Ponzi scheme, in a way. The U.S. government has done exactly this for a long time and has gotten away with it because the dollar has been the world's reserve currency. You could always get a loan against the value of the U.S. currency in the past. Those days may be dwindling, with more countries choosing alternative currencies to conduct business with and the dollar becoming comparatively weaker into the foreseeable future. If you have savings, you can spend more than you make, which will put you into debt, then you can draw down your savings to pay that debt, and at the end of the month you will be out of debt, but have less in savings. You cannot do this forever. Eventually, you run out of savings. If you have no savings, you immediately go into debt and stay there when you spend more than you make. This is simple arithmetic. If you have no savings, but you own assets (real estate, securities, a collection of never-opened Beatles vinyl records, a bicycle), then you could spend more than you make, and be in debt, but have the potential to liquidate assets to pay off all or part of the debt. This depends on finding a buyer and negotiating a price that helps you enough to make a real difference. If you have a car, and you owe $10 on it, but you can only find a buyer willing to pay $8 for the car, that doesn't help you unless you can refinance the $2 and your new payment amount is lower than the old payment amount. But then you're still $2 in debt on the car even though you no longer possess it, and you've still increased your debt by spending more than you made. If you stay on this path, sooner or later you will not have any assets left and you will be in debt, plain and simple. As a wrinkle in the concrete example, let's say you have stock options with your employer. This is a form of a ""call."" You could also purchase a call through a broker in the stock market, or for a commodity in the futures market. That means you pay up front for the right to buy a specific amount of an asset at a fixed price (usually with an expiration date). You don't own the stock, you just have the right to buy it at the call price, regardless of the current market value when you buy it. In the case of employee stock options, your upfront cost is in the form of a vesting schedule. You have to remain employed for a set time before a specific number of stocks become eligible for you to purchase at your option price (the stocks ""vest"" on a certain date). Remain employed longer, and more stocks may vest, depending on your contract. If you quit or are terminated before that date, you forfeit your options. If you stick around through your vesting schedule, you pay real money to buy the stock at your option price. It only makes sense to do this if the market value of the stock is higher than your option price. If the current market value is lower than your option price, you're better off just buying the asset at the current market value, or waiting and  hoping that the value increases before your contract expires. You could drive yourself into debt by spending more than you make, but still have a chance to eliminate your debt by exercising your call/option and then re-selling the asset if it is worth more than what you pay for it. But you may have to wait for a vesting period to elapse before you can exercise your option (depending on the nature of your contract). During this waiting period, you are in debt, and if you can't service your debt (i.e. make payments acceptable to your creditors) your things could get repossessed. Oh, don't forget that you'll also pay a brokerage fee to sell the asset after you exercise your option. Further, if you have exhausted your savings and nobody will give you a loan to exercise your stock (or futures) options, then in the end you would be even further in debt because you already paid for the call, but you are unable to capitalize it and you'll lose what you already paid. If you can get a loan to exercise your option, but you're a bad credit risk, chances are good that the lender will draft a contract requiring you to immediately pay back the loan proceeds plus a fee out of the proceeds of re-selling the stock or other asset. In fact the lender might even draft a contract assigning ownership of your options to them, and stipulating that they'll pay you what's left after they subtract their fee. Even if you can get a traditional loan, you will pay interest over time. The end result is that your debt has still cost you very real money beyond the face value of the debt. Finally, if the asset for which you have a call has decreased in value lower than the current market value, you would be better off buying it directly in the market instead of exercising your option. But you'll pay transaction fees to do that, and the entire action would be pure speculation (or ""investment""), but not an immediate means to pay off your debt. Unless you have reliable insider trading information. But then you risk running afoul of the law. Frankly it might be better to get a loan to pay off your debt than to buy an ""investment"" hoping the value will increase, unless you could guarantee that the return on your investment would be bigger than the cumulative interest and late fees on your debt (or the risk of repossession of your belongings). Remember that nothing you owe a debt on is actually yours, not your house, not your car, not your bicycle, not your smartphone. Most of the time, your best course of action is to make minimum payments on your lowest-interest debts and make extra payments on your highest interest debt, up to the highest total payment you can tolerate (set something aside in a rainy day fund just in case). As you pay off the highest-interest debt, shift the amount you were paying on that debt to make extra payments on your next highest-interest debt until that one is paid off, and repeat on down the line until you're out of debt, then live within your means so that you don't find yourself working at McDonald's because you don't have a choice when you're in your 80's."


A 401(k) is an investment just like any other investment. You generally get two types of return lumped into that number, but there can be more and you should read your funds prospectus carefully. If you aren't investing in direct companies, you're using mutual funds for instance, then you should read the funds prospectus to see how they handle these situations for the underlying securities they hold for you. Although I think this is the basic answer to the question as you asked.


I don’t see this area turning around anytime soon. It’s extremely poverty ridden . Plus I believe a lot of the stipulations in buying one of these $100 homes is that you rehab it and live in it.   I’m not positive on the details though.   Last time this area was wealthy was during the al Capone era. He had a lot of money in it. But even that was ilegal money.


Technically you owe 'self-employment' taxes not FICA taxes because they are imposed under a different law, SECA. However, since SE taxes are by design exactly the same rates as combining the two halves of FICA (employer and employee) it is quite reasonable to treat them as equivalent. SE taxes (and income tax also) are based on your net self-employment income, after deducting business expenses (but not non-business items like your home mortgage, dependent exemptions, etc which factor only into income tax). You owe SE Medicare tax 2.9% on all your SE net income (unless it is under $400) adjusted down by 7.65% to compensate for the fact that the employer half of FICA is excluded from gross income before the employee half is computed. You owe SE Social Security tax 12.4% on your adjusted SE net income unless and until the total income subject to FICA+SECA, i.e. your W-2 wages plus your adjusted SE net income, exceeds a cap that varies with inflation and is $127,200 for 2017. OTOH if FICA+SECA income exceeds $200k single or $250k joint you owe Additional Medicare tax 0.9% on the excess; if your W-2 income (alone) exceeds this limit your employer should withhold for it. However the Additional Medicare tax is part of 'Obamacare' (PPACA) which the new President and Republican majorities have said they will 'repeal and replace'; whether any such replacement will affect this for TY 2017 is at best uncertain at this point. Yes SE taxes are added to income tax on your 1040 with schedule SE attached (and schedule C/CEZ, E, F as applicable to your business) (virtually so if you file electronically) and paid together. You are supposed to pay at least 90% during the year by having withholding increased on your W-2 job, or by making 'quarterly' estimated payments (IRS quarters are not exactly quarters, but close), or any combination. But if this is your first year (which you don't say, but someone who had gone through this before probably wouldn't ask) you may get away with not paying during the year as normally required; specifically, if your W-2 withholding is not enough to cover your increased taxes for this year (because of the additional income and SE taxes) but it is enough to cover your tax for the previous year and your AGI that year wasn't over $150k, then there is a 'safe harbor' and you won't owe any form-2210 penalty -- although you must keep enough money on hand to pay the tax by April 15. But for your second year and onwards, your previous year now includes SE amounts and this doesn't help. Similar/related:


"Yes, this is a miscellaneous itemized deduction. https://www.irs.gov/publications/p529/ar02.html For this to impact your taxes, you have to be itemizing deductions (have total deductions greater than standard deduction), and the total of all miscellaneous deductions needs to exceed the ""2% floor"" described in the IRS link above."


"One common rule of thumb: you can probably get 4% or better returns on your investments ('""typical market rate of return is 8%, derate to allow for inflation and off years). Figure out what kind of income you will want in retirement and divide by 0.04 to get the savings you need to accumulate to support that.   This doesn't allow for the fact that your needs are also going to increase with inflation; you can make a guess at that and use an inflated needs estimate.  Not sophisticated,  not precise, but it's a quick and dirty ballpark estimate. And sometimes it's surprisingly close to what a proper model would say."


No, if you are a nonresident alien, you cannot deduct sales tax. You can only deduct state income tax. 1040NR Schedule A (which is page 3 of 1040NR) does not contain an option for sales tax, like 1040 Schedule A does. If you are a resident alien, then you can deduct sales tax.


For the present if you can't figure out anything big with a small budget,  then start something small e.g Make brownies,  bake cakes etc experiment and put up your name tag on the product and see if your friends buy some stock from you,  then link them all on facebook.  If you are good with your product,  people wouldn't care a lot about the packaging add-ons or frills and if orders start coming consistently well, then implement your book build systems, jack up prices,  etc. But don't blow all your cash on day one if don't have a queue waiting for your goodies.


You are correct. She cannot claim the initial loss of $1,000 on her taxes, she can only report the $500 profit. However, the IRS does allow her to add the $1,000 loss to the basis cost of her replacement shares. e.g.


Paying off the high-interest debt is a good first start. Paying interest, or compound interest on debt is like paying somebody to make you poor. As for your 401k, you want to contribute enough to get the full match from your employer. You might also consider checking out the fees associated with your 401k with an online fee analyzer. If it turns out you're getting reamed with fees, you can reduce them by fiddling with your investments. Checking your investment options is always a good idea since jobs frequently change them. Opening an IRA is a good call. If you're eligible for both Roth and Traditional IRAs, consider the following: Most financial institutions (brokers or banks) can help you open an IRA in a matter of minutes. If you shop around, you will find very cheap or even no fee options. Many brokers might try to get your business by giving away something for ‘free.' Just make sure you read the fine print so you understand the conditions of their promotional offer.  Whichever IRA you choose, you want to make sure that it's managed properly. Some people might say, ‘go for it, do it yourself’ but I strongly disagree with that approach. Stock picking is a waste of time and market timing rarely works.  I'd look into flat fee financial advisors. You have lots of options. Just make sure they hear you out, and can design/execute an investment plan specific to your needs At a minimum, they should: Hope this is helpful.


"As you clarified in the comments, it is not a contract work but rather an additional temporary assignment with the same employer. You were paid for it in form of a ""bonus"" - one time irregular payment, instead of regular periodic payments. Irregular wage payments fall under the flat rate withholding rule (the 25% for Federal, some States have similar rules for State withholding). This is not taxes, this is withholding. Withholding is money the employer takes from your salary and forwards to the IRS on the account of your tax liability, but it is not in itself your tax liability. When you do your annual tax return, you'll calculate the actual tax you were supposed to pay, and the difference between what was withheld and your actual tax will be refunded to you (or owed by you, if not enough was withheld). You can control the regular pay withholding using W4 form."


I think the advice Bob is being given is good. Bob shouldn't sell his investments just because their price has gone down. Selling cheap is almost never a good idea. In fact, he should do the opposite: When his investments become cheaper, he should buy more of them, or at least hold on to them. Always remember this rule: Buy low, sell high. This might sound illogical at first, why would someone keep an investment that is losing value? Well, the truth is that Bob doesn't lose or gain any money until he sells. If he holds on to his investments, eventually their value will raise again and offset any temporary losses. But if he sells as soon as his investments go down, he makes the temporary losses permanent. If Bob expects his investments to keep going down in the future, naturally he feels tempted to sell them. But a true investor doesn't try to anticipate what the market will do. Trying to anticipate market fluctuations is speculating, not investing. Quoting Benjamin Graham: The most realistic distinction between the investor and the speculator is found in their attitude toward stock-market movements. The speculator's primary interest lies in anticipating and profiting from market fluctuations. The investor's primary interest lies in acquiring and holding suitable securities at suitable prices. Market movements are important to him in a practical sense, because they alternately create low price levels at which he would be wise to buy and high price levels at which he certainly should refrain from buying and probably would be wise to sell. Assuming that the fund in question is well-managed, I would refrain from selling it until it goes up again.


I suspect you will need to consult with a tax professional on this one.  In New York you would need to continue to file returns even if you did no business there until the partnership is dissolved.  But I have no idea if Cali has anything rules like that.  I would suspect since the partnership is on going the answer is no.  Even though you plan no further business in Cali the potential exists that you could return there(even if only in theory).


If you're in the USA and looking to retire in 10 years, pay your Social Security taxes? :P Just kidding. Do a search for Fixed Rate Annuities.


It really depends on the type of business  you are running.  If there is any chance of liability, you should protect yourself with an LLC.  Then it is much more difficult for them to sue and take personal assets.  For example, if you are a wedding photographer, you would want to be an LLC in case you lose someones pictures.


if rent, health care, college, doctor fees, drug prescription fees, lawyer fees, car repair mechanic fees weren't so expensive, then Americans would be living the good life, enjoying cheap deflationary books on Amazon and the no-change-in-price-for-the-last-decade prices of electronics, cars, and consumer goods from Wal-mart and newegg.


"If one takes a slightly more expansive view of the word ""saving"" to include most forms of durable asset accumulation, I think the reason some do and most don't is a matter of a few factors, I will include the three that seem obvious to me: Education Most schools in the US where I live do not offer personal finance courses, and even when they do, there is no opportunity for a student to practice good financial habits in that classroom setting. I think a simple assignment that required students to track every penny that they spend over the period of a few months would help them open their eyes to how much money is spent on trivial things that they don't need. Perhaps this would be more effective in a university setting where the students are usually away from home and therefore more responsible for the spending that occurs on their own behalf. Beyond simple education about personal finances, most people have no clue how the various financial markets work. If they understood, they would not allow inflation to eat away at their savings, but that's a separate topic from why people do not save. Culture Since much of the education above isn't happening, children get their primary financial education from their parents. This means that those who are wealthy teach their children how to be wealthy, and those who are poor pass on their habits to children who often also end up poor. Erroneous ideas about consumption vs. investment and its economic effects also causes some bad policy encouraging people to live beyond their means and use credit unwisely, but if you live in a country where the average person expects to eat out regularly and trade in their automobiles as soon as they experienced their highest rate of depreciation, it can be hard to recognize bad financial behavior for what it is. Collective savings rates reflect a lot of individuals who are emulating each other's bad behavior. Discipline Even when someone is educated about finances, they may not establish good habits of budgeting regularly, tracking spending, and setting financial goals. For me, it helps to be married to someone who has similar financial goals, because we budget monthly and any major purchases (over $100 or so) must be agreed upon at the beginning of the month (with obvious exceptions for emergencies). This eliminates any impulsive spending, which is probably 90% of the battle for me. Some people do not need to account to someone else in order to spend wisely, but everyone should find a system that works for them and helps them to maintain some financial discipline."