ok fuck it then, you'd rather discuss how to pass the CFA five times a week? enjoy!  by the way - if you're going to be so condescending with your information - at least be correct when doing so. Ireland and Greece have both taken on debt to support failing banks - whether or not they did before the crisis, and whether or not it is only a small  % of total deficit, is irrelevant to his question. this is the entire reason direct recapitalizing has been implemented with ESF - to prevent further deterioration of country balance sheets


To start with gold has value because it is scarce, durable, attractive and can be made into jewellery. But that does not explain its current value. In the current economic climate, it is difficult for many investors to get a positive return on conventional investments such as equities or bonds. I theorise that, in such conditions, investors decide to park their money in gold simply because there are few other good options. This in itself drives the price of gold up, making it a better investment and causing a speculative boom. As you will see here, here, and here the gold price is negatively correlated with stock market indices.


The value does change from 12.61% to 13.48%. The difference between re-investing cashflows at 14% vs 12% is not big enough to change the rounded value. Edit: The initial cashflow is discounted at t0, meaning it's already equal to its present value and the finance rate doesn't have an effect. It does impact future outgoing cashflows, as you've noted.


"JoeTaxpayer's answer adequately explained leverage and some of your risks.   Your risks also include: The firm's risk is that you will figure out a way to leave them with a negative account that contributes to another customer's profit and yet you disappear in a way that makes the negative account impossible to collect. Another risk is that you are not who you say you are, or that the money you invest is not yours.  These are called ""know your customer"" risks."


The home owner will knock 20% off the price of the house. If the house is worth $297K, then 20% is just a discount your landlord is offering.  So your actual purchase price is $237K, and therefore a bank would have to lend you $237K. Since the house is worth more than the loan, you have equity.  20% to be more accurate.  Another way to say is, the bank only wants to loan you 80% of the value of the item securing the loan. If you default on day one, they can sell the house to somebody else for $296K and get a 20% return on their loan. So this 20% you are worried about isn't actually money that anybody gives anybody else, it is just a concept.


Uh - yeah, and free land. Trust me. If Bezos said that he would build in Houston, or Memphis - the cities in question would immediately sign over the deed to hundreds of acres of land at no charge.    Walmart does the same shit when the open distribution centers.


"A.1 and B.1 are properly balanced, but ""Business Expense"" is an expense, not an asset. The T entries should be timestamped.  The time should be equal to the time on the credit card receipts.  This will make audit and balancing easier. A or B can be used, but if the the business is to be reimbursed for personal expenses, the accounts should be renamed to reflect that fact. More explicit account names could be ""Business expense - stationary"" and ""Personal expense - lunch"" or even better ""Personal expense - cammil - lunch"".  With a consistent format, the account names can be computer parsed for higher resolution and organization, but when tallying these high resolution accounts, debits & credits should always be used. When it comes time to collect from employees, only accounts with ""Personal expense"" need be referenced.  When it comes time to collect from ""cammil"", only net accounts of ""Personal expense - cammil"" need be referenced. An example of higher resolution, to determine what ""cammil"" owes, would be to copy the main books, reverse any account beginning with ""Personal expense - cammil"", and then take the balance.  Using the entries in the question as an example, here's the account to determine ""cammil""'s balance: Now, after all such balancing entries are performed, the net credit ""Personal expense - cammil"" is what ""cammil"" owes to the business. The scheme for account names should be from left to right, general to specific."


What are you babbling about? He's saying that buybacks are essentialy a return of capital, which is what they are. Only to go one with arguments that do not debunk and are heavily intertwined with personal beliefs and subjectivism doesn't nothing to change this.


Banking, transactions carried on by any individual or firm engaged in providing financial services to consumers, businesses, or government enterprises. In the broadest sense, banking consists of safeguarding and transfer of funds, leading or facilitating loans, guaranteeing creditworthiness, and exchange of money. These services are provided by such institutions as commercial banks, savings banks, trust companies, finance companies, and merchant banks or other institutions engaged in investment banking. A narrower and more common definition of banking is the acceptance, transfer, and, most important, creation of deposits. This includes such depository institutions as commercial banks, savings and loan associations (more common in the United States), building societies, and mutual savings banks. All countries subject banking to government regulation and supervision, normally implemented by central banking authorities. For further information on central banks and investment banking, see the relevant articles.


If you and your wife are owners, your tickets might be a business expense against the rental income. 'Might' as in the IRS will be happy to audit you, seeing the kids went as well and prorating the expense as say 25% was really business, the rest, family vacation.  If this $4000 write off is the make or break for this deal, don't do it.


Assuming that you have capital gains, you can expect to have to pay taxes on them. It might be short term, or long term capital gains. If you specify exactly which shares to sell, it is possible to sell mostly losers, thus reducing or eliminating capital gains.  There are separate rules for 401K and other retirement programs regarding down payments for a house. This leads to many other issues such as the hit your retirement will take.


I have a very similar situation doing side IT projects.  I set up an LLC for the business, created a separate bank account, and track things separately.  I then pay myself from the LLC bank account based on my hours for the consulting job.  (I keep a percentage in the LLC account to pay for expenses.)  I used to do my taxes myself, but when I created this arrangement, I started having an accountant do them.  An LLC will not affect your tax status, but it will protect you from liability and make things more accountable come tax time.


I am not going to discuss legality, because with family members you are able to give a lot of guidance and assistance without running into legal issues.  The biggest problem is that when they transfer the funds to you and you invest the money, all the tax rates and tax limits are determined by your situation; plus you have more investments than you should have so you hit those limits and brackets quicker. For example: In the United states a person can put $5,500 or $6,500 into a IRA or Roth IRA each year. If you combine the funds for three with your funds then you are giving up three quarters of the amount that you can invest in that type of account. The decision regarding Roth or not depends on age and income level. But now their decision is related to what is best based on your situation. The ability to even deduct IRA deposits would be based on your situation. Of course for taxable accounts the tax rate is determined by your income, not theirs. If they want you to have the ability to make investment decisions for them, then power of attorney is the way to go. The money is deposited in their name, and all the rules and tax rates are determined by their situation. You make sure they have all the information they need to login and review the accounts, but you make the all the moves within and between accounts.


"Imagine two restaurants. One has prices 15% higher than the other, and the owner pays this 15% to his wait staff in the form of higher wages. The other has lower prices, but the average customer gifts 15% to their waiter. Clearly, in the first restaurant, the 15% the wait staff receives is taxable income. It is traditional salary. What legitimate, economic justification is their for treating the second restaurant any differently? Imagine a grocery store in a small town that offered long-time customers a ""pay nothing"" option but made it clear that they'd be subject to social ostracism and no longer welcome in the store if they didn't gift 85% of the usual cost of the items. The customers would save on sales tax and the grocer would argue that all that money was gifts, not income. Of course this doesn't work. The IRS, and the laws, don't care very much about what you call things. They care about the underlying economic reality. If the money was part of the payment for the services rendered, regardless of how it was delivered, what the parties called it, or whether the obligation to pay was legal or social, it's still a payment for the service and it's still taxable. You would have to be able to argue to the IRS that it really was a gift and wasn't any form of payment for the service received. Otherwise, it's just a scheme to evade taxes."


Are there any other losses that can be expected beyond the above? The lender may have to invest some money into the house in order to get it in shape to sell. Also, while the lender possesses the house they are liable to the property taxes and possibly utilities. are there any statutes or pressures to motivate the financial institution to get fair price when the property is sold? The lender is motivated to at least break even when selling the property in order to limit losses on their investment. This means they are very motivated to seek a higher price, but they're also motivated to sell the property quickly in order to limit their losses due to property taxes. Usually the lender takes a loss of the investment if foreclosure occurs; only 10 percent to 20 percent  of auctioned foreclosed houses did yield a surplus. When the lender sells the foreclosed property using a realtor, they're motivated to sell it as quickly as possible so long as they break even. In this case there is little motivation to sell the property for a surplus. If the property is being sold via auction, then time is not a factor and the lender will just sell to the highest bidder.


She seems to be paying an inordinate amount of money for car payments. $850/month is just too high. She may be able to get by on public transit, depending on where she lives, but if not, she needs to look at selling her car and picking up a cheap second-hand vehicle. Public transit would probably save her $750/month. Going to a cheaper car should still save her $300 - $400/month. Next, phone and cable. These are certainly nice, but they are rarely necessities. I do not have cable t.v., for example. I do have a cell phone, and I do have Internet (a requirement of my job), but no cable t.v. She may be able to save some money there. My guess is that she could save $125/month here, though I may be biased on how much it costs to heat a Canadian home in our cold, cold winters. And, of course, the college payment. $900 - $1000 a month? I understand that she is paying this so that your sister can attend college. That's very nice, but it certainly sounds like your mother cannot afford that. On the other hand, if this is repayment of college expenses already incurred, there may be no choice here. Rent, at $1625/month. I have no idea what that gets you in NJ, but perhaps she could rent out a room. It's not inconceivable that she could bring in $1000/month from doing so, though obviously that's going to very much depend on the real estate/rental market where you live. Alternatively, she could move out and move in with someone else and that should certainly get her share of the rent down to $800 - $1000/month or thereabouts, and most likely cut her utility bills, also. I've identified a number of places where she can save money. No doubt, the budget is tight, but I think she's spending on far more than just bare essentials. One thing that concerns me here is that she appears to have no emergency funds and very little for entertainment, other than cable t.v. If at all possible, she needs to cut her budget down so that she is not living paycheque to paycheque and has money to cover, for example, emergency car repairs. And I'd really like to see her have more than $50/month for expenses (which I'm guessing is entertainment). It may not be possible, of course, but I would most definitely say she should not be paying for your sister's college if this places her in such dire financial risk. Easier said than done, of course. Most certainly, I would not even consider cutting the health insurance, by the way. Another approach would be to look at how her expenses will go down when your sister is done school and perhaps cleared up other expenses. It may be worth borrowing from family and friends, knowing that in a year, her expenses will go down $500/month. That makes her budget manageable. Additionally, the debt repayment presumably will finish at some point. The point I'm trying to make is that, in a year, her budget will be just about manageable, and she may be able to get there with smaller trims in the immediate future.


I remember like 20 years ago someone did an experiment where Peter Lynch, elementary school kids, and an ape, all picked stocks in a situation similar to this. The result was almost the same, with the elementary school kids coming out slightly better  Picking correct stocks is a craps shoot, as the market is an emotional entity, and in the short run, even educated guesses don't give an edge. People like Peter Lynch eventually win of course because of discipline, long term goals, and knowledge of tools like derivatives


The cost of an extra 30 days is $1459.80


I live in one of the highest cost of living areas in my country.  For the cost of less than half the down payment my spouse and I have saved up for a house we could easily buy a home in most of the lower cost of living areas (and several homes in, say, Detroit). As for the rest of your question, though, we've chosen not to live that way.  Because, like all high cost of living areas, ours is near a city there are more free and inexpensive things to do than you would think at first.  While others in our area think a great time is pre-gaming drinks at a nice bar, an expensive restaurant, then some more drinks we've taught ourselves how to make great meals from scratch using sale and inexpensive ingredients from the grocery store and often do that on weekends, topped off by a movie from the redbox that we promptly return the next day.  We have chosen friends who will hang out with us over potluck dinners and board games instead of out on the town.  On weekend days we visit free museums, do hikes, wander around revitalized downtown strips, or play at the local parks.  Our groceries, as I mentioned, are sale items or use coupons and we go for less expensive meats and produce.  We visit our local farmer's market for fun, not to buy the expensive produce.  We might find ourselves wandering through the mall to window shop, but when it comes time to actually buy clothing or goods for the apartment we shop around for up to months to find a good deal. Plenty of our friends have money enough to spend, and the most debt they are usually wallowing in is a big car payment, no consumer debt.  At the same time I have trouble imagining some of them buying a house any time soon, because they simply can't be saving all that much (since I know their incomes).  They may eventually be able to afford a condo and ride rising housing prices to a townhome and then a house - it's what lots of people do around here, loosing buckets money in realtor fees and closing costs along the way.  Even with these choices, it's hard to view my friends as selfish knowing that most of them give around 10% of their income to charity. There are probably plenty of people around here swimming in debt (somebody recently asked in a Q&A with the local paper editors how she could stop going to the city's most expensive restaurants and start living within her means when she only liked expensive places), but lots of folks can stretch themselves and afford to get by while wasting a lot of money.  It's not what my spouse and I have chosen to do, because we want to be able to live very responsibly and plan for a rainy day, but the longer you live with and around the money that tends to permeate high cost of living areas, the more it will seem normal to you. Also, if it's really $1000/mo for a 2 br. apartment, your cost of living is still lower than mine is. If I were you I wouldn't try to acclimate myself to the spendy habits of your surroundings.  Instead I'd find friends who are frugal and work on maintaining your good financial habits.  If you ever want one of those $4, $5, or $6K (plus!) houses, you're going to need them.


House as investment is not a good idea. Besides the obvious calculations don't forget the property tax, home maintenance costs and time, insurance costs, etc. There are a lot of hidden drains on the investment value of the house; most especially the time that you have to invest in maintaining it. On the other hand, if you plan on staying in the area, having children, pets or like do home improvements, landscaping, gardening, auto repair, wood/metal shopping then a house might be useful to you. Also consider the housing market where you are. This gets a bit more difficult to calculate but if you have a high-demand rental market then the house might make sense as an investment if you can rent it out for more than your monthly cost (including all of those factors above). But being a landlord is not for everyone. Again more of your time invested into the house, you have to be prepared to go months without renting it, you may have to deal with crazy people that will totally trash your house and threaten you if you complain, and you may need to part with some of the rent to a management company if you need their skills or time. It sounds like you are just not that interested right now. That's fine. Don't rush. Invest your money some other way (i.e.: the stock market). More than likely when you are ready for a house, or to bail your family out of trouble (if that's what you choose to do), you'll have even more assets to do either with.


You will need to buy a stock before the ex-dividend date to receive the dividends. You can sell a stock on the ex-dividend date or after and you will receive the dividends. So if the ex-dividend date is the 5th August, you need to buy before the 5th and you can sell on the 5th or after, to receive the dividends. Definitions from the ASX: Record date The Record Date is 5.00pm on the date a company closes its share   register to determine which shareholders are entitled to receive   the current dividend.  It is the date where all changes to   registration details must be finalised.   Ex dividend date The ex dividend date occurs two business days before the company's   Record Date. To be entitled to a dividend a shareholder must have   purchased the shares before the ex dividend date. If you purchase   shares on or after that date, the previous owner of the shares (and   not you) is entitled to the dividend. A company's share price may move up as the ex dividend date approaches   and then fall after the ex dividend date.


As someone in the very same position as you here is what I suggest: Have $1,000 for each possible large expense you currently have. For example, house, car, pregnant wife, etc. As someone who only has a car (living at home still) I only have $1,000 in my eFund (emergency fund). The ABSOLUTE rest of my money goes to paying off the loans as soon as possible. I mean ever single dollar. There is no point for investing unless you have a really good return on investment. I am not too sure how common returns of 6.8% are, but that seems above average. If in fact you're just stashing it in a bank account at ~1%, you're doing it wrong.  Getting out of debt is not only just about the financial benefits but the emotional benefits too. It feels really nice to not owe anybody anything.  Good luck man!    P.S. Try using a tracker like ReadytoZero to show how much you're losing a day by remaining in debt. This will better help you understand if your investments are making you money or losing your money.


"It looks like these types of companies have to disclose the health of their accounts to CFTC (Commodity Futures Trading Commission). That is the gist I get at least from this article about the traders that lost money due to the Swiss removing the franc’s cap against the euro. The article says about the U.S. retail FOREX brokerage: Most of FXCM’s retail clients lost money in 2014, according to the company’s disclosures mandated by the CFTC. The percentage of losing accounts climbed from 67 percent in the first and second quarters to 68 percent in the third quarter and 70 percent in the fourth quarter. Side note: The Swiss National Bank abandoned the cap on the currency's value against the euro in mid-January 2015. But above paragraph provides data on FXCM’s retail clients in 2014. It could consequently be concluded that, even without ""freak events"" (such as Switzerland removing the franc cap), it is more likely for an investor to NOT make a profit on the FOREX market. This is also in line with what ""sdfasdf"" and ""Dario Fumagalli"" say in their answers."


I am not a lawyer.  I do however own an LLC. It's setup as a partnership with 50/50 ownership.  You can do it as a sole proprietorship.    In basic terms, if you separate your money and assets from the money and assets of the company then you are personally immune from lawsuit and thus your personal assets are safe.  You have to set it up right (fairly cheap) and keep the records right (ie never mix personal and company assets ) but it provides a nice legal buffer and in some cases tax benefits.    Do not construe this as legal or accountanting advice.  Speak with pros to understand and get it set up right.  But it's worth it.


Stuff I wish I had known, based on having done the following: Obtained employment at a startup that grants Incentive Stock Options (ISOs);  Early-exercised a portion of my options when fair market value was very close to my strike price to minimize AMT; made a section 83b) election and paid my AMT up front for that tax year. All this (the exercise and the AMT) was done out of pocket. I've never see EquityZen or Equidate mention anything about loans for your exercise. My understanding is they help you sell your shares once you actually own them. Stayed at said startup long enough to have my exercised portion of these ISOs vest and count as long term capital gains;  Tried to sell them on both EquityZen and Equidate with no success, due to not meeting their transaction minimums.  Initial contact with EquityZen was very friendly and helpful, and I even got a notice about a potential sale, but then they hired an intern to answer emails and I remember his responses being particularly dismissive, as if I was wasting their time by trying to sell such a small amount of stock. So that didn't go anywhere. Equidate was a little more friendly and was open to the option of pooling shares with other employees to make a sale in order to meet their minimum, but that never happened either.  My advice, if you're thinking about exercising and you're worried about liquidity on the secondary markets, would be to find out what the minimums would be for your specific company on these platforms before you plunk any cash down. Eventually brought my request for liquidity back to the company who helped connect me with an interested external buyer, and we completed the transaction that way. As for employer approval - there's really no reason or basis that your company wouldn't allow it (if you paid to exercise then the shares are yours to sell, though the company may have a right of first refusal). It's not really in the company's best interest to have their shares be illiquid on the secondary markets, since that sends a bad signal to potential investors and future employees.


I don't have any experience in this, but this is my academic understanding of business pricing.  The LOWEST amount a seller would accept is the liquidation value. For a B&B, what would the value of the land, the house, the furnishings, accounts payable, etc. be if it had to be sold today, minus any liabilities.  The amount the seller would like to pay for is going to be a multiple of its annual earnings. One example of this is the discounted cash flow analysis. You determine the EBITDA, the earnings a company generated, before interest,  depreciation, taxation and amortization.  Once you have this amount, you can project it out in perpetuity, or you use an industry multiplier.  Perpetuity:  You project this value out in perpituity, discounted by the going interest rate. In other words, if you project the business will earn $100,000/year, the business should grow at a 5% rate, and the going interest rate is 8%. Using a growing perpetuity formula, one value of a business would be: 100,000 / (.08 - .03) = $2,000,000.  This is a very high number, and the seller would love to get it.  It's more common to do a multiple of the EBIDTA. You can do some research into the valuation of the particular industry to figure out the EBIDTA multiplier for the industry. For example, this article suggests that the 2011 EBITDA multiplier for hospitality industries is 13.8. (It's valuing large hotel chains, but it's a start). So the value of this B&B would be around $1,380,000. Here is an online SME valuation tool to help with the EBIDTA multiple based valuation. Also, from my research, it looks like many small business use Seller Discretionary Earnings  (SDE) instead of EBITDA. I don't know much about it, but it seems to serve a similar purpose as EBITDA.  A potential buyer should request the financial statements of the business for the last few years to determine the value of the business, and then can negotiate with the owner a price. You would probably want to enlist a broker to help you with the transaction.


From a wealth management perspective, almost every one of my clients that owns a business has it in some sort of trust. Mostly for estate planning purposes. So it wouldn't surprise me if that's what he was talking about.  But I would straight up just ask to clarify. Can't hurt to ask, and I'd love to hear what he meant.


"After looking at the comments, and your replies it seems that your mind is made up: ""You will always be able to obtain 0% credit, and nothing bad will ever happen"". Credit cards that offer 0% on balance transfers are very rare.  Most have a transfer fee of some kind, which acts like an interest rate.  This is a change that probably happened 10 years ago without much fanfare.  From this you can draw a lesson: what changes will come in the future? This site and others a full of ""tales of woe"" where people were playing musical chairs with credit, and when the music stopped, there was no chairs in sight.  Job loss, medical expenses, unexpected taxes, natural disasters can all effect one's ability to make payments on time and happen.  Once payments start being missed or are late, things tend to avalanche from there.  It has happened to me, and loved ones. The pain and suffering is not worth it.  Get out of debt. You claim that you are investing the money instead of paying on the debt, and you are making the delta between your prevailing investment rate 7%.  Did you include the balance transfer fee in your calculations?    First off your investments could lose money.  While 2015 was mostly flat, we have not had a correction in a long time.  Some say we are long overdue.   Secondly, how much money are we really talking about here?  Say there is not a balance transfer fee, you could be guaranteed 7%, and you are floating $10K.  Congratulations in this mythical scenario you just made $700. If $700 changes your life dramatically perhaps it is time for a second job.  This way you can earn that every two weeks (working part time) rather than every year.  Now that will really change your life.  By applying this amount of mental energy to make $700, what opportunities are you missing?   Pay off the debt, you will be much better off in the long run."


"If the OP is saving 33% if his/her current income, he/she doesn't want or need yet more income from investments right now. The advice on ""diversifying"" in the other answers is the standard ""investment advisor"" response to beginner's questions, and has two advantages for the advisor: (1) they won't get sued for giving bad advice and (2) they can make a nice fat commission selling you some very-average-performance products (and note they are selling you ""investment industry products,"" not necessarily ""good investment opportunities"" - advisors get paid commission and bonuses for selling more stuff, not for selling good stuff).  My advice would be to drip-feed some of your excess income into the emerging market sector (maybe 1/3 or 1/4 of the excess), with the intention of leaving it there untouched for up to 20 or 30 years, if need be. At some unknown future time, it is almost certain there will be another EM ""boom,"" if only because people have short memories. When that happens, sell up, take your profits, and do something less risky with them.  You might consider putting another slice of your excess income into the commodities sector. I don't know when the oil price will be back at $150 or $200 a barrel, but I would be happy to bet it will happen sometime in the OP's lifetime... Since you apparently have plenty of income and are relatively young, that is the ideal time to adopt a risky investment strategy. Even if you lose your entire investment over the next 5 years, you still have another 20 years to recover from that disaster. If you were starting to invest at age 56 rather than 26, the risk/reward situation would be very different, of course."


There are different options here.  Either way, ensure that you have a paper trail of all your payments. When in doubt, speak to a lawyer, there are many who offer free consultations.


Your rate of return for paying off this loan is 9%, and that's guaranteed. For reference, the best rate of return on a 10-year FDIC-insured certificate of deposit today is 3%. There's definitely something out there with better returns than paying off your loans, but there's definitely not going to be anything with better risk-adjusted returns than paying off your loans. Investors dream of guaranteed 9% rates of return. If you had something that could provide a guaranteed 9% rate of return, wannabe investors would be lining up at your door and tripping over each other to outbid each other until it actually closer to a 3% rate of return. :P (Postscript. Depending on whether your loans are tax-deductible and what your inflation expectations are, you could adjust those rates to make the comparison more accurate. But at 3% vs 9% the picture's pretty clear.)


"To be able to truly short something you technically need to be able to borrow the security so you can sell it.  There needs to be a system for borrowing in place to be able to do this which is very robust for large U.S. stocks but doesn't exist for CDOs mainly due to the complex legal structures around them.   However, the word ""short"" is commonly used in finance to mean profiting from a loss of value of something.  So the use in the movie title, though a bit confusing, was fine. Credit Default Swaps are not technically insurance as you don't need own the thing you are ""insuring"" (and for a few other reasons).  However, I agree with the movie that thinking of them as insurance is a pretty good way to understand them.  As you are playing a monthly premium to for a contract that pays out when something goes very wrong.   However, the movie was a little fast a loose as CDS of various types were regularly traded well before the bubble even started.  Though maybe not that particular type of CDS.  So while they may have been ""expensive"" it was the easiest route and reasonable idea."


"You are right on track with your idea of setting up a separate account for invoiced income. Create a new account with the type other asset and call it ""Receivables"" (or something similar). Every time you invoice a client, enter a credit to this account with the amount of the invoice. Once the client pays and you deposit a check, enter a transfer from the ""Receivables"" account to the bank account. EDIT I overlooked that you wish to account for not-yet-invoiced income. I think that's a bad idea. It will become confusing and will give you the false sense that your financial condition is better than it really is. There are plenty of stories about businesses that have stellar sales, but fail because of lack of cash flow (the business' bills become due before it gets paid by its own customers)."


If the firm treats you as an employee then they are treated as having a place of business in the UK and therefore are obliged to operate PAYE on your behalf - this rule has applied to EU States since 2010 and the non-EU EEA members, including Switzerland, since 2012. If you are not an employee then your main options are: An umbrella company would basically bill the client on your behalf and pay you net of taxes and NI.  You potentially take home a bit less than you would being 100% independent but it's a lot less hassle and potentially makes sense for a small contract.


The key word you forgot to include from Slide 29 is: Free-Riding Investopedia defines free-riding as: In the context of a brokerage firm, a free rider problem refers to a situation where a client has been allowed to purchase shares without actually paying for them, and then subsequently sells the shares (ideally for profit). The problem with this scenario is that the client, if allowed to free ride, can profit from a stock trade without actually using any of his or her own capital. This is illegal. I have not heard of any issues with this type of action being a problem with trading accounts in Australia, nor have I been able to find any such rules on the ASX website or any of by brokers websites. So I think this may be an issue in the USA but not Australia. You should check the rules in any other countries you wish to trade in.


"Joke warning: These days, it seems that rogue trading programs are the big market makers (this concludes the joke) Historically, exchange members were market makers. One or more members guaranteed a market in a particular stock, and would buy whatever you wanted to sell (or vice-versa). In a balanced market -- one where there were an equal number of buyers and sellers -- the spread was indeed profit for them. To make this work, market makers need an enormous amount of liquidity (ability to hold an inventory of stocks) to deal with temporary imbalances. And a day like October 29, 1929, can make that liquidity evaporate. I say ""historically,"" because I don't think that any stock market works this way today (I was discussing this very topic with a colleague last week, went to Wikipedia to look at the structure of the NYSE, and saw no mention of exchange members as market makers -- in fact, it appears that the NYSE is no longer a member-based exchange). Instead, today most (all?) trading happens on ""electronic crossing networks,"" where the spread is simply the difference between the highest bid and lowest ask. In a liquid stock, there will be hundreds if not thousands of orders clustered around the ""current"" price, usually diverging by fractions of a cent. In an illiquid stock, there may be a spread, but eventually one bid will move up or one ask will move down (or new bids will come in). You could claim that an entity with a large block of stock to move takes the role of market maker, but it doesn't have the same meaning as an exchange market maker. Since there's no entity between the bidder and asker, there's no profit in the spread, just a fee taken  by the ECN. Edit: I think you have a misconception of what the ""spread"" is. It's simply the difference between the highest bid and the lowest offer. At the instant a trade takes place, the spread is 0: the highest bid equals the lowest offer, and the bidder and seller exchange shares for money. As soon as that trade is completed, the spread re-appears. The only way that a trade happens is if buyer and seller agree on price. The traditional market maker is simply an entity that has the ability to buy or sell an effectively unlimited number of shares. However, if the market maker sets a price and there are no buyers, then no trade takes place. And if there's another entity willing to sell shares below the market maker's price, then the buyers will go to that entity unless the market's rules forbid it."


Stock price is based on supply and demand. Unless the stock you are looking to buy usually has very low volume trading 100 shares isn't likely to have any effect on price. There are many companies that have millions or tens of millions of shares trade daily. For stocks like that 100 shares is barely a trivial percentage of the daily volume. For thinly traded stocks you can look at the bid and ask size but even that isn't likely to get you an exact answer. Unless you are trading large volumes your trade will have no effect on the price of shares.


Are there particular, established businesses that provide these   services? Yes! There are many fee-based financial advisors that provide such services. These might help:  http://www.ricedelman.com/galleries/default-file/how-to-choose-financial-advisor.pdf http://www.ricedelman.com/cs/education/article?articleId=990#.Us7cyPRDt1Y


"A **Synthetic CDO** is the devil incarnate.  From the CDS buyer (aka Insurance buyer's) point of view: if you want *protection* on some credit/debt-security/loan and **can't find a willing counterparty**, just get ""investors in a CDO"" to supply it, in small portions in mass!  The poor tranche buyers won't even be aware that their **""tranche LOSS""** constitutes final full default-recovery payment on the defaulted credit to the CDS buyer.   CDOs are making a come back (slowly but surely) b/c there's a lot of ""JUNK"" accumulated in the **""Levered Loan/Mezzanine Market""**. So industry finds it's favored vehicle to dispose of said junk, hiding behind two counterparties couched in different semantic cloaks: ""CDS BUYER"" on one side, and ""CDO INVESTOR"" on the other.  To boot, red-meat free-market publications like WSJ then say (asif) ""O, buyers are dying for yield, there's great demand"". LOL. This completely obfuscates fact that a humble cdo investor is **entering the INSURANCE BIZ** against some very dodgy ""assets"".  (would you insure stage IV cancer patients for $1mn at annual premium of, say $5000?)"


Given your clarifying points, it sounds like you are running both businesses as one combined business. As such, you should be able to get just a single HST number and use that. However, let me please urge you to contact a professional accountant and possibly a lawyer, as it is very unusual to be performing these services without a business license, and you may be exposing yourself to civil penalties and placing your personal assets (e.g. your house) at risk. Additionally, it may be beneficial for you to run these as businesses as you can likely write off (more of) your expenses.


FI funds don't always drop in rising rate environments, and can outperform thanks to simple bond math and the way the indexes are built.  It's one of the places where it's very easy to argue in favour of some form of active management.


I believe it.  Violin lessons - $5k/year Piano lessons - $5K/year Sports - $5k/year (or more) daycare/kindergarten - $10-20-?/year (depending on where you live) private school (or higher taxes if you want a decent public school) - ??? a lot...   and either one of the parents has to go part time and lose income,you you have to hire someone to help (just taking kids to all the lessons is a second job...)


The question is always one of whether people think they can reliably predict that the option will be a good bet. The closer you get to its expiration, the easier it is to make that guess and the less risk there is. That may either increase or decrease the value of the option.


The value premium would state the opposite in fact if one looks at the work of Fama and French. The Investment Entertainment Pricing Theory (INEPT) shows a graph with the rates on small-cap/large-cap and growth/value combinations that may be of interest as well for another article noting the same research. Index fund advisors in Figure 9-1 shows various historical returns up to 2012 that may also be useful here for those wanting more detailed data. How to Beat the Benchmark is from 1998 that could be interesting to read about index funds and beating the index in a simpler way.


If you're talking about an ETF trading on Arca, it's probably because of the opening auction: The match price is the price that maximizes the volume that can be executed within the Auction Collars. The Core Open Auction will use the match price closest to the closing price of the previous trading day (based on normal market hours) if more than one indicative match price is valid. The core opening auction doesn't really take the opening session activity into account, as you can see - the market runs an auction and whatever price clears the most volume, within certain limits, is the opening print.


I have sold cars before to individuals and always just received cash.  I would think as long as the amount is less than $10,000.00 and the buyer is serious they will get there with the cash.  Of course there is no possible way to guarantee the cash will not be counterfeit.


In the short term the market is a popularity contest In the short run which in value investing time can extend even to many years, an equity is subject to the vicissitudes of the whims by every scale of panic and elation. This can be seen by examining the daily chart of any large cap equity in the US.  Even such large holdings can be affected by any set of fear and greed in the market and in the subset of traders trading the equity. Quantitatively, this statement means that equities experience high variance in the short rurn. in the long term [the stock market] is a weighing machine In the long run which in value investing time can extend to even multiple decades, an equity is more or less subject only to the variance of the underlying value. This can be seen by examining the annual chart of even the smallest cap equities over decades.  An equity over such time periods is almost exclusively affected by its changes in value. Quantitatively, this statement means that equities experience low variance in the long run.


Mathwise, I absolutely agree with the other answers.  No contest, you should keep getting the match.  But, just for completeness, I'll give a contrarian opinion that is generally not very popular, but does have some merit.   If you can focus on just one main financial goal at a time, and throw every extra dollar you have at that one focus (i.e., getting out of debt, in your case), you will make better progress than if you're trying to do too many things at once.  Also, there something incredibly freeing about being out of debt that has other beneficial impacts on your life. So, if you can bring a lot of focus to the credit card debt and get it paid off quickly, it may be worth deferring the 401(k) investing long enough to do that, even though it doesn't make as much mathematical sense.  (This is essentially what Dave Ramsey teaches, BTW.)


The presence of the 401K option means that your ability to contribute to an IRA will be limited, it doesn't matter if you contribute to the 401K or not. Unless your company allows you to roll over 401K money into an IRA while you are still an employee, your money in the 401K will remain there. Many 401K programs offer not just stock mutual funds, but bond mutual funds, and international funds. Many also have target date funds. You will have to look at the paperwork for the funds to determine if any of them meet your definition of low expense. Because any money you have in those 401K funds is going to remain in the 401K, you still need to look at your options and make the best choice. Very few companies allow employees to invest in individual stocks, but some do. You can ask your employer to research other options for the 401K. The are contracting with a investment company to make the plan. They may be able to switch to a different package from the same company or may need to switch companies. How much it will cost them is unknown. You will have to understand when their current contract is up for renewal.  If you feel their current plan is poor, it may be making hiring new employees difficult, or ti may lead to some employees to leave in search of better options. It may also be a factor in the number of employees contributing and how much they contribute.


"1) Don't buy a house as an investment. Buy a house because you've reached the point in your life where you don't expect to move in the next five years and you'd prefer to own a house (with its advantages/disadvantages) than to rent (with its advantages/disadvantages). Thinking of houses primarily as investments is what caused the housing bubble, crash, and Great Recession. 2) Before buying a house for cash, look at the available mortgage interest rates versus market rate of return. Owning the house outright is slightly lower stress, but using the house as the basis for a ""leveraged investment"" may be financially wiser. (I compromised; I paid 50% down and took a mortgage for the other 50%.) 3) 1 year is short-term. Your money doesn't belong in the market if you're going to need it in the short term. If you really intend to pull it back out that soon, I'd stick with CD/money-market kinds of instruments. 4) Remember that while a house is illiquid, it is possible to take out home equity loans... so money you put into a house isn't completely inaccessible. You just can't move elsewhere as easily."


"This is not an end-all answer but it'll get you started I have been through accounting courses in college as well as worked as a contractor (files as sole proprietor) for a few years but IANAA (I am not an accountant). Following @MasonWheeler's answer, if you're making that much money you should hire a bean counter to at least overlook your bookkeeping. What type of business? First, if you're the sole owner of the business you will most likely file as a sole proprietorship. If you don't have an official business entity, you should get it registered officially asap, and file under that name. The problem with sole proprietorships is liability. If you get sued, not only are your business' assets vulnerable but they can go after your personal assets too (including house/cars/etc). Legally, you and your business are considered one and the same. To avoid liability issues, you could setup a S corporation. Basically, the business is considered it's own entity and legal matters can only take as much as the business owns. You gain more protection but if you don't explicitly keep your business finances separate from your personal finances, you can get into a lot of trouble. Also, corporations generally pay out more in taxes. Technically, since the business is it's own entity you'll need to pay yourself a 'reasonable salary'. If you skip the salary and pay yourself the profits directly (ie evade being taxed on income/salary) the IRS will shut you down (that's one of the leading causes of corporations being shut down). You can also pay distribute bonuses on top of that but it would be wise to burn the words 'within reason' into your memory first. The tax man gets mad if you short him on payroll taxes.  S corporations are complicated, if you go that route definitely seek help from an accountant. Bookkeeping If you're not willing to pay a full time accountant you'll need to do a lot of studying about how this works. Generally, even if you have a sole proprietorship it's best to have a separate bank account for all of your business transactions. Every source/drain of money will fall into one of 3 categories... Assets - What your business owns: Assets can be categorized by liquidity. Meaning how fast you can transform them directly into cash. Just because a company is worth a lot doesn't necessarily mean it has a lot of cash. Some assets depreciate (lose value over time) whereas some are very hard to transform back into cash based on the value and/or market fluctuations (like property). Liabilities - What you owe others and what others owe you: Everything you owe and everything that is owed to you gets tracked. Just like credit cards, it's completely possible to owe more than you own as long as you can pay the interest to maintain the loans. Equity - the net worth of the company: The approach they commonly teach in schools is called double-entry bookkeeping where they use the equation: In practice I prefer the following because it makes more sense: Basically, if you account for everything correctly both sides of the equation should match up. If you choose to go the sole proprietorship route, it's smart to track everything I've mentioned above but you can choose to keep things simple by just looking at your Equity. Equity, the heart of your business... Basically, every transaction you make having to do with your business can be simplified down to debits (money/value) increasing and credits (money/value) decreasing. For a very simple company you can assess this by looking at net profits. Which can be calculated with: Revenues, are made up of money earned by services performed and goods sold. Expenses are made up of operating costs, materials, payroll, consumables, interest on liabilities, etc. Basically, if you brought in 250K but it cost you 100K to make that happen, you've made 150K for the year in profit. So, for your taxes you can count up all the money you've made (Revenues), subtract all of the money you've paid out (Expenses) and you'll know how much profit you've made. The profit is what you pay taxes on. The kicker is, there are gray areas when it comes to deducting expenses. For instance, you can deduct the expense of using your car for business but you need to keep a log and can only expense the miles you traveled explicitly for business. Same goes for deducting dedicated workspaces in your house. Basically, do the research if you're not 100% sure about a deduction. If you don't keep detailed books and try to expense stuff without proof, you can get in trouble if the IRS comes knocking. There are always mythical stories about 'that one guy' who wrote off his boat on his taxes but in reality, you can go to jail for tax fraud if you do that. It comes down to this. At the end of the year, if your business took in a ton of money you'll owe a lot in taxes. The better you can justify your expenses, the more you can reduce that debt. One last thing. You'll also have to pay your personal federal/state taxes (including self-employment tax). That means medicare/social security, etc. If this is your first foray into self-employment you're probably not familiar with the fact that 1099 employers pick up 1/2 of the 15% medicare/social security bill. Typically, if you have an idea of what you make annually, you should be paying this out throughout the year. My pay as a contractor was always erratic so I usually paid it out once/twice a year. It's better to pay too much than too little because the gov't will give you back the money you overpaid. At the end of the day, paying taxed sucks more if you're self-employed but it balances out because you can make a lot more money. If as you said, you've broken six figures, hire a damn accountant/adviser to help you out and start reading. When people say, ""a business degree will help you advance in any field,"" it's subjects like accounting are core requirements to become a business undergrad. If you don't have time for more school and don't want to pay somebody else to take care of it, there's plenty of written material to learn it on your own. It's not rocket surgery, just basic arithmetic and a lot of business jargon (ie almost as much as technology)."


Automated Clearing House transactions are used in the US for direct deposit of pay checks and direct debit of many payments for accounts such as mortgages, credit cards, car loans, insurance premiums, etc. The reason they take one or more business days to clear is that the transactions are accumulated by each processor in the network during the day and processed as a batch at the end of each business day.  The ACH network processes 20+ billion transactions per year worth $40 trillion, (estimates based on 2012 figures).


No chance.. cars are much easier to repossess and the cost of doing so is less. People aren't quite as leveraged on autos as they were on homes. Even with a worst case scenario 7 year loan people are usually in par within 3-4 years, in that timeframe on a 30 year mortgage you've barely started paying the interest down. Even at the height of the housing crisis auto loan losses were manageable.. when people were losing their homes at a record pace you'd think they would skip the car payments to make the mortgage. That wasn't the case, people generally kept paying their car notes even when the house was going away. Losing your car is actually much more troublesome to most people.. they will make that payment over all others.


Yes in order for you to short a stock, some one has to be willing to lend it to you to short, the more people that want to short this stock, the higher the borrowing rate is to short it. in some instances such as groupon so many people are shorting it that there are practically no shares left to short and if you do end up getting some it would be at a very high borrowing cost.


The daily Volume is usually compared to the average daily volume over the past 50 days for a stock.  High volume is usually considered to be 2 or more times the average daily volume over the last 50 days for that stock, however some traders might set the crireia to be 3x or 4x the ADV for confirmation of a particular pattern or event. The volume is compared to the ADV of the stock itself, as comparing it to the volume of other stocks would be like comparing apples with oranges, as difference companies would have different number of total stocks available, different levels of liquidity and different levels of volatility, which can all contribute to the volumes traded each day.


The beta of a stock can be interpreted as the average relative movement of a stock with respect to the movement of a market index. In your case, the stock will move on average by 0.8. Thus over a longer time horizon, not on a daily, weekly basis.


The alternative isn't too bad. Invest in a regular account. The dividends and cap gains will see favorable tax treatment. In my opinion, much of the magic of the retirement account is with 401(k) matched deposits.  The benefit you'll miss is the long term opportunity to skim income off the top, at say, 25%, have it grow, and then withdraw it at a much lower average tax rate. If that benefit doesn't outweigh the fear of the 10%, stick with my first thought above.


Better in terms of what? less taxes paid? or more money to save for retirement? In terms of retirement, it would be better for you to keep the condo you currently have for at least two reasons: You wouldn't incur the penalties and fees from buying and selling a home. Selling and buying a home comes with a multitude of fees and expenses that aren't included in your estimation. You aren't saddled with a mortgage payment again. You aren't paying a mortgage payment right now. If you set aside the amount you would be paying towards that, it more than covers your taxes, with plenty left over to put towards retirement.


In theory*, if a company has 1m shares at $10 and does a 10 for 1 split, then the day after it has 10m shares at $1 (assuming no market move). So both the price and the number of share change, keeping the total value of the company unchanged. Regarding your BIS, I suspect that the new number of shares has not been reported yet because it's an ETF (the number of shares in issue changes everyday due to in/out flows). Your TWX example is not ideal either because there was a spin off on the same day as the stock split so you need to separate the two effects. * Some studies have documented a positive stock split effect - one of the suggested reasons is that the stock becomes more liquid after the split. But other studies have rejected that conclusion, so you can probably safely consider that on average it will not have a material effect.


"If you forgot to put the name on the ""pay to the order of"" line then anybody who gets their hands on the check can add their name to the check and deposit it at their bank into their account. If it goes to the correct person they will have an easy time making sure that the check is made out correctly. They don't have to worry about that picky teller who doesn't know what to do with a check made out to Billy Smith and a drivers license for Xavier William Smith. On the other hand... a criminal will also be able to make sure it is processed exactly the way they want it. If I made it out to a small business or a person I would let them know. You might not have a choice but to wait and see what happens if it was sent to a large business, the payment processing center could be a long way from where you will be calling."


long deep ITM calls is equivalent to owning the equity.  You're going to pay alot and hence will start off in a hole already, and you aren't getting too much leverage there at all depending how deep ITM you go.  Covariance scales, but assuming B-S in order to get nice scaling and ignoring the risks you are actually taking with options (unlimited down-size ie you can lose your entire investment in the option, people forget this) will screw you unless you really know what you are dong.  Leverage means increasing your risk.  long dep ITM is not obtaining much leverage and therefore not risking too much.  but you aren't going ot get 3-4x leverage this way.  you get leverage by saying: oh, i have 100, i could invest in 1 share of stock OR I could buy 100 worth of some option.  If I pick a deep ITM (think strike = 0) it's identical to owing the stock.  If i pick ATM, i have a ~50/50 chance of wining, so i should be able to double my upside.  If I go OTM, i can increase my exposure to the upside while increasing hte chance that my options expire worthless.  So really, i have no idea why deep ITM do what you are trying to do.  and If you don't either, you probably shouldn't do it.


So from Investopedia - Who actually declares a dividend states that the Board of Directors of a company sets the 4 key dates: As these dates are chosen by the Board of Directors, either by internal corporate convention or special situation. Conceivably a Board may choose a Payable Date greater than 2 weeks which may make sense if their accounting partners are unavailable, i.e. extended national holiday. I assume that any period of time longer that what may seem reasonable and customary will be a topic at the next shareholder meeting.


When you sell a stock that you own, you realize gains, or losses. Short-term gains, realized within a year of buying and selling an asset, are taxed at your maximum (or marginal) tax rate. Long term-gains, realized after a year, are taxed at a lower, preferential rate. The first thing to consider is losses. Losses can be cancelled against gains, reducing your tax liability. Losses can also be carried over to the next tax year and be redeemed against those gains. When you own a bunch of the same type of stock, bought at different times and prices, you can choose which shares to sell. This allows you to decide whether you realize short- or long-term gains (or losses). This is known as lot matching (or order matching). You want to sell the shares that lost value before selling the ones that gained value. Booking losses reduces your taxes; booking gains increases them. If faced with a choice between booking short term and long term losses, I'd go with the former. Since net short-term gains are taxed at a higher rate, I'd want to minimize the short-term tax liability before moving on to long-term tax liability. If my remaining shares had gains, I'd sell the ones purchased earliest since long-term gains are taxed at a lower rate, and delaying the booking of gains converts short-term gains into long-term ones. If there's a formula for this, I'd say it's  (profit - loss) x (tax bracket) = tax paid


The value to you of a tax free fund is going to depend largely on your current marginal tax bracket. For example if you had a regular MM that was paying 1% and it was taxable, then your net off that one percent would be  If the tax free MM fund pays .75% then you would be a tiny bit ahead using it, if you are in the 28% bracket, but you would be behind if you are in anything lower than 25%   The primary market (IMHO) for Tax Free money market funds is for high wealth individuals who are in the 33 OR 35 percent brackets


"Anytime you do work without any payment until the work is complete, you are effectively extending credit to the party receiving your service. How much credit you are willing to extend will vary greatly, depending on the amount and the trustworthiness of the party. For example, if you are charging $50 for something, you probably won't bother to collect money upfront, whereas if you are charging $5,000 you probably would collect some upfront. But if the party you are working for is a large financially sound company, the number may be even much higher than $5K as you can trust you will be paid. Obviously there are many factors that go into how much credit you are willing to extend to your customer. (This is why credit reports exist for banks to determine how much credit to extend to you.) As for the specific case you are asking about, which may be classified as a decent amount of work for a small business, I would default to having a written scope of work, a place in the document for both parties to sign, and specify 50% upfront payment and 50% payment at completion. When you receive the signed document and the upfront payment (and possibly even after the check clears), you begin work. I would call this my ""default contract"" and adjust according to your needs depending on the size of the job and the trustworthiness of the customer. As for your question about how to deposit the check, that depends on what type of entity you are. If you are a sole proprietor you should ask for the checks to be made out to you. If you are a business then the checks should be made out to your business name. You don't need ""in trust"" or anything similar because your customer, after paying the upfront fee, must trust that you will do the work you promise to do, just like you have to trust that after completing the work you will receive the final payment. This is the reason the default is 50% before and after. Both parties are risking (roughly) the same amount. Tip: having done the ""default"" contract many times in my career, both as a sole proprietor and a business owner, I can assure you there is a big difference between a potential customer agreeing to something in advance, and actually writing a check. The upfront payment definitely helps weed out those that were never going to end up paying you, even if their intentions were good. Tip 2: be as specific as possible as to what the scope of work will include. If you don't, particularly with software, they'll be adding feature after feature and expecting it to be ""included""."


Heck no, don't spend more! I saved a ton of money when I got my first real job. You won't always be able to do this.  Save a bundle while you can.


"Oh I see, as a ""Chicagoan""? Well I guess if you were from Detroit, Stockton, Mammoth Lakes, Jefferson County, Harrisburg, Central Falls, or Boise County you might understand why it might be necessary to force a government entity to actually back up their retirement plans with real investments."


Seek professional advice as duffbeer703 has suggested already.  Very important! Consider incorporating.  If your income will fluctuate year to year, you can keep profit in the corporation, taxed in its hands at the Canadian small business rate, since such corporate income below $500,000 would likely qualify for the small business deduction. You could pay  retained earnings to yourself as dividends over more than one year in order to lessen the personal tax burden. If you don't incorporate, all your profits in the year they are earned are taxed at personal income tax rates, and with our progressive income tax system, taking the tax hit all in one year can be expensive.  However, if this project is a one-off and you're not likely to continue working like this, you might not want the overhead of a corporation.  Taxes aside, there are also legal issues to consider vis-a-vis incorporating, or not. A professional can help you make this decision.   Yes, you can claim deductions for reasonable business expenses, whether or not you are incorporated. No, you can't do free work on the side and claim it as donations.  It's nice to volunteer, but you wouldn't get a charitable tax credit for your time, only for money or goods donated. Consider opening an RRSP so you can start saving for retirement and get a tax deduction for any contributions you make.  This is but one strategy to reduce your tax.  There are others.  For instance, if you are a student, you perhaps have some unused tuition credits that you could claim in your first year with higher income. Oh, and seek professional advice!   ;-)


> QE is used to buy debt.  That's correct.  Those mortgage securities are **owed** to the US.   The difference in interest between the mortgage interest and the interest the treasury is paying out is returning   > How about we go the route Japan has gone?  Non-sequitur.  And I notice you didn't answer the question, perhaps due to the typo.  Why do \[you\] conflate QE with the debt?


"I believe that your option contracts will become ""non-standard"" and will be for a combination of ACE stock and cash.  The allocation between stock and cash should follow that of the acquisition parameters of the underlying - probably with fractional shares converted to cash. Hence 1 call contract for 100 shares of CB will become 1 call contract for 60 shares of ACE + $6293 cash + a cash correction for the 0.19 fractional share of ACE that you would have had claim to get.  The corrections should be 0.19 sh x $62.93/sh."


"First, one would 'not' want to be the guarantor as it would likely appear as a debt on their credit. In some cases this can be good, but not always.  I'd suggest a homeowners meeting. A reverse auction where you say ""Would anyone like to get the condo fee waived for 12 months in return for guaranteeing the loan?"" If no hands go up, you have an issue. But if even one hand goes up, you have the guarantor. Then you ask if there are any objections. Anyone who objects is welcome to bid fewer, say 10 months. Ideally, you see a dozen hands go up, and you just count down until one one remains. When I lived in a condo the fee was $250. If I were one of the older residents who planned to stay, I'd do it for one or two month's fees."


Never said I was, I'm definitely not. I'm an engineer and I do this on the side. But professionals go broke every day, and let's have this discussion again after silver and gold go past $300 and $5000 for the 1000th time in history of this system.


Patti - I realize, of course, that you pose an either/or question. It seems the question closes the door on other potential solutions.


Scenario #2 is most likely will generate the best long-term financial outcome. If your friends emergency fund is truly excessive and can afford to be reduced by the amount required to payoff the vehicle loan then that will save a few dollars. Scenario #3 is not an approach I would recommend. However, if your friend has to choose between paying off the loan or maxing his Roth... Making a few assumptions regarding the loan, I figure it is probably a 4 year - $13.5k. Which means he is paying somewhere below $40 a month in interest.  As JAGnalyst speaks to people often over estimate the spread they can make with another investment compared to the interest rate on a loan. However, the effect of compounded, tax-free returns can not be ignored when you are discussing a 22 year old person contributing to a Roth IRA.  Doing some calculations, assuming the car is being paid off on the first payment your friend will save just under $1000. The total interest that would have been paid over the life of the loan. If your friend adds $3600, approximately one year of payments, to their Roth IRA contributions -- just once. Assuming a 3.5% avg return and a retirement age of 65, the $3600 will be worth just south of $16k; a $12,400 return. Using the same investment return and tax assumptions and simplifying the $1000 savings as if it was all realized as a lump sum at the time of paying off the loan. That $1000 invested in a non-tax-advantaged investment (because the whole discussion is based on if the friend had to pick and lose the opportunity for the one year to make the additional Roth IRA contribution) would return $3047.


"See Publication 505, specifically the section on ""Annualized Income Installment Method"", which says: If you do not receive your income evenly throughout the year (for example, your income from a repair shop you operate is much larger in the summer than it is during the rest of the year), your required estimated tax payment for one or more periods may be less than the amount figured using the regular installment method. The publication includes a worksheet and explanation of how to calculate the estimated tax due for each period when you have unequal income.  If you had no freelance income during a period, you shouldn't owe any estimated tax for that period. However, the process for calculating the estimated tax using this method is a good bit more complex and confusing than using the ""short"" method (in which you just estimate how much tax you will owe for the year and divide it into four equal pieces).  Therefore, in future years you might want to still use the equal-payments method if you can swing it.  (It's too late for this year since you missed the April deadline for the first payment.)  If you can estimate the total amount of freelance income you'll receive (even though you might not be able to estimate when you'll receive it), you can probably still use the simpler method.  If you really have no idea how much money you'll make over the year, you could either use the more complex computation, or you could use a very high estimate to ensure you pay enough tax, and you'll get a refund if you pay too much."


You should talk to a financial fiduciary (make sure they are a fiduciary, not all planners are) about investing your money.  Even ultra safe investments such as treasury bonds will beat the 1% interest rate offered by your savings account (the yield on the 5 year treasury is currently around 2%).


If you know what you are doing, bear markets offer fantastic trading opportunities. I'm a futures and futures options trader, and am equally comfortable trading long or short, although I have a slight preference for the short side, in that moves are typically much quicker to the down side.


Consider the following scenario at a small business: As a business owner I have 10k in the bank at the moment. I have a one time expense of 4k that will not directly impact the growth of my business. I can choose to pay the 4k out of the 10 in the bank and then put the rest towards business growth. Assuming a 10% annual return on capital at the end of this transaction I am left with $6,600. Now if instead I chose to pay the 4k with a business credit card I have that only carries a 7.9% interest rate what would happen is that I incur a 4k balance that I have to pay off in a year and put 10k towards my business. Now, this is a simplified case that does not take into account the effective interest on the card and the minimum monthly payments. That being said, what happens in the end of the year is that I owe $4316 to my credit card but I now have 11k  in the bank, due to business growth. That leaves me with $6,684 after a year's worth of operations, which is better than my original $6,600. This is a small scale scenario though, but the basic idea is that if you can put the money towards growth that is better than the interest you are paying to the card, you win. The risks of course include missing a payment and incurring a penalty, not being able to grow your money at the rate you thought, and so on. Hope this explains things a bit.


Check out some common portfolios compared: Note that all these portfolios are loosely based on Modern Portfolio Theory, a theory of how to maximize reward given a risk tolerance introduced by Harry Markowitz. The theory behind the Gone Fishin' Portfolio and the Couch Potato Portfolio (more info) is that you can make money by rebalancing once a year or less.  You can take a look at 8 Lazy ETF Portfolios to see other lazy allocation percentages. One big thing to remember - the expense ratio of the funds you invest in is a major contributor to the return you get.  If they're taking 1% of all of your gains, you're not.  If they're only taking .2%, that's an automatic .8% you get.  The reason Vanguard is so often used in these model portfolios is that they have the lowest expense ratios around.  If you are talking about an IRA or a mutual fund account where you get to choose who you go with (as opposed to a 401K with company match), conventional wisdom says go with Vanguard for the lowest expense ratios.


Always a good time to buy gold. Think less in terms of commodities, more in terms of true money that can not be inflated out of existence. Buy it as cheap as you can, hold it for as long as possible. The historical graphs never lie and it proves time and time again its a good store of value. I would never think of it in terms of a speculative bet though. If it does reward you, its because the global currency system is broken. I think its broken, it may reward you. But never expect it to reward you. In the short term (2-3 years), the gold price can be manipulated. In the long term (10 years) less so.


If interest rates are negative, a 0% load might still be profitable.


Hey iDade  I work for a bulge bracket firm on a top 10 institutional consulting team in the United States, before I go in depth on anything, I would like to know what exactly you do not fully understand in this list. I do not want to offend you by going into basics, but I also do not want to give you information you already are comfortable with.


"In the Netherlands specifically, there are several reasons to pay extra off on your mortgage. First, house prices have dropped significantly in the last several years.  They are rising slowly now, but it's region specific and you can still borrow more than 100% of the price of the house.  Under these conditions, if you choose to sell your house and the outstanding mortgage amount is greater than the value of your house, you are left with a gap (restschuld) to finance.  I think the rules have changed recently around this, allowing you to finance this gap with a new mortgage, but this is not a good idea.  The tax implications of this are likely to be complicated in the long run and your new house may not cover this gap for some time. Second, the less you owe on your house, the lower mortgage rates you can get.  Mortgages in the Netherlands usually fall into categories based on percentage of the auction price at a foreclosure sale (executiewaarde).  If you pay more of your mortgage off, you may qualify for a lower interest rate, possibly making refinancing interesting.  This is especially important if interest rates continue to drop but the value of your house does not increase or even decreases. Third, if you choose to keep your house and rent it out, the banks in the Netherlands have very strict rules on this if you want to do it above board.  I've read that some banks require the mortgage amount (NB not the value you may have built up in a linked savings or insurance account) to be less than 50% of the foreclosure auction price (executiewaarde).  Also, related to point 2, if you have something other than a linear or annuity mortgage, you will need to refinance to do this as the tax advantages around savings mortgages ([bank]spaarhypotheken) do not apply if it is not used as your own residence. Finally, if you choose to sell and you are in the happy position of having the value of your house be greater than the value of your mortgage (you have an overwaarde), there may still be some obstacles.  Any value you have accumulated in a linked savings or life insurance account is not available until after you sell your house.  Extra value derived purely from the difference between mortgage value and sale price may be easier to deal with. EDIT: As a final note, I've made extra payments on both a ""Spaarhypotheek"" (linked life insurance) and a ""Bankspaarhypotheek"" (linked savings account).  In one, the principal paid each month reduced and the mortgage lifetime stayed the same.  In the other, the principal paid each month stayed the same and the lifetime reduced.  In both cases, interest payments were less each month.  I would contact your mortgage provider to understand what the expected impact of extra payments will be."


Since I'm a glass half full kind of guy --- take this opportunity to learn WHY ~~investing~~ gambling the majority of your money in a 3x levered ETF is a terrible idea.  Consider the $3k cheap tuition that can save you from being a moron later once you actually have some capital to invest.  This sub can help with some suggested reading.


You are calculating using different methods.  For example, to obtain 6.45% 6.44647 This is effectively the same as the money-weighted return calculation. In arriving at 6.06% you have calculated the true time-weighted return. Both answers are right, but they are different measures. To use time-weighted returns you need to know the value of the investment at the time of every cash flow. Modified Dietz uses a simple approximation to avoid that requirement.  Money-weighted return gives results that are more accurate for back calculating than Modified Dietz, (also without requiring interim valuations), but the calculation is more complex. See How to Calculate your Portfolio's Rate of Return for a decent reference.


Taxes are the least of your concerns. Your friends need licenses. Although this COULD be avoided entirely with certain craftily worded disclaimers and exemptions and the WAY that money is given to them.


The other commenters have a point.  You're going to have a hard time succeeding without the right structure at work.  That said, you can look into sales methodologies like MEDDIC.  These methods are commonly deployed at B2B companies which it sounds like you are.


Is investing in a Roth retirement account only better if you will be in a higher    tax bracket in retirement? If you are pushing up against the contribution limits, a Roth account may allow you to save more money in tax-advantaged accounts. In your example, you are putting $100 pre-tax in a traditional account vs $85 post-tax in a Roth account. But if there are limits, and the limits are the same for traditional or Roth accounts (as they currently are for US 401(k) accounts), you can effectively put more into a Roth account, where the limit applies to the post-tax amount, than a traditional account, where the limit applies to the pre-tax amount. If so, is there any case in which a traditional retirement account is better than a Roth account? It is smart to have some money in a traditional account, because the first amount of money you earn or withdraw each year (up to the standard deduction) is taxed at 0%, which is probably less than your current rate. And the next bit of money is taxed at only 10%, which may also be less than your current marginal rate. Of course, things may change by the time you retire, but it is probably safe to assume that we will still have some kind of progressive (income bracketed) tax structure.


It depends on how much equity you have in your home. Scenario 1: Your home is worth $100K, and your current mortgage is for $100K (or more which means you are underwater.) In this case you can't get a 2nd mortgage because: That being said, you can use different portions of equity in your home as collateral for multiple mortgages, as long as none of the equity overlaps, but you may need permission from the primary mortgage bank first, for example: Scenario 2: Your home is worth $100K, and your current mortgage is for $80K meaning you currently have $20K in equity. It is possible to get a 2nd mortgage or home equity line of credit for $20K. As a side note, if your loan agent is telling you to use a different bank, it sounds like she is trying (and willing) to do something shady. If you are in Scenario 1, I'd find a new agent.


"Your broker, Ameritrade, offers a variety of Exchange Traded Funds (ETFs) that you can buy and sell with zero commission.  An ETF is like a mutual fund, but you buy and sell shares the same way you buy and sell shares of stocks.  From your point of view, the relevance of this is that you can buy and sell as many or as few shares as you like, even down to a single share.  Note that to get the commission-free trades on the available ETFs you have to sign up for it in your account profile.  Be sure to do that before you enter any buy orders. You'll want to start by looking at the Ameritrade's list of commission-free ETFs.  Notice that they are divided into different categories:  stocks, bonds, international, and commodities.  Which categories you pick from will depend on your personal investing goals, time horizon, risk tolerance, and so on.  There are lots of questions and answers on this site that talk about asset allocation.  You should read them, as it is the most important decision you will make with your portfolio. The other thing you want to be aware of is the expense ratio for each fund.  These expenses reduce the fund's return (they are included in the calculation of the net asset value of the shares), so lower is definitely better.  Personally, I wouldn't even consider paying more than about 0.10% (commonly read ""10 basis points"" or ""10 bp"") for a broad-based domestic stock fund.  For a sectoral fund you might put up with as much as 20 bp in expenses.  Bond funds tend to be a little more expensive, so maybe allow as much as 25 bp, and likewise for international funds.  I've never invested in commodity funds, so I'll let someone else opine on appropriate expense ratios for those. Once you've decided what funds you want (and have signed up for commission-free trades), all you have to do is enter the trade orders.  The website where you manage your account has tutorials on how to do that.  After that you should be all set. Good luck with your investing!"


My interpretation of that sentence is that you can't do the buying/selling of shares outright (sans margin) because of the massive quantity of shares he's talking about.  So you have to use margin to buy the stocks. However, because in order to make significant money with this sort of strategy you probably need to be working dozens of stocks at the same time, you need to be familiar with portfolio margin.  Since your broker does not calculate margin calls based on individual stocks, but rather on the value of your whole portfolio, you should have experience handling margin not just on individual stock movements but also on overall portfolio movements. For example, if 10% (by value) of the stocks you're targeting tend to have a correlation of -0.8 with the price of oil you should probably target another 10% (by value) in stocks that tend to have a correlation of +0.8 with the price of oil.  And so on and so forth.  That way your portfolio can weather big (or even small) changes in market conditions that would cause a margin call on a novice investor's portfolio.


My employer matches 6% of my salary, dollar for dollar. So you have a great benefit. The self-directed side has no fees but $10 trades. No option trading. Yours basically allows you to invest your own funds, but not the match. It's a restriction, agreed, but a good plan.


I am a very light TurboTax user and have expensed a laptop in the past (since it was used exclusively for work) and used the itemized deduction there and has no issues.  Just not sure if there was a limit or anything of note to realize ahead of time.  Thanks!


I'm the contrarian in the crowd. I think credit scores and debt are the closest thing to evil incarnate. You're in good company. The absence of a credit score simply means the agencies have insufficient data in their behavioral model to determine how profitable your business would be to the bank. The higher your score, the more likely the bank is to make a profit from your loan.  IMHO, you're better off building up cash and investment reserves than a credit history. With sufficient reserves,  you will be able to shop around for a bank that will give you a good rate, if you ever do need a loan.  You'll be surprised at how quickly you get in a position where you don't need a loan if you save and invest wisely. I used to have a (high) credit score,  and I was miserable about it because there were always bills due. I gave up debt 14 years ago, paid the last debt 7 years ago, and have never. been happier. Raising kids without debt (or credit score) is much more fun than with debt.


I live in MA. Median price value here is $410K. Depending on location a $410K house here can be a ranch from 1950 needing a complete overhaul, a 1970's split level, a 4 bedroom Colonial in Central MA or a condo somewhere close to Boston. These homes are decidedly nothing special, and certainly not where the 1% live. There are plenty of houses that list in the $750s in my town that go on and off the market really quickly, generally purchased by a two-earner family making decent (but not 1%er) money. Think engineers, doctors, sales and marketing execs, managers.   Source : https://www.bostonglobe.com/business/2017/07/25/median-home-price-massachusetts-tops-for-first-time/rVsP7BwWZCtKwP9BqZQOKJ/story.html


"5-8 years is not quite long term.  Until the naughts (the 2001-10 decade), advisors were known to say that the S&P was always positive given a 10 year holding period. Now, we're saying 15 years is always positive looking back.  One can easily pull S&P return data which would let you run numbers showing the range of returns for the 5-8 yr period you have in mind. A bit of extra effort and you can include the dollar cost averaging factor.  This wouldn't produce a guarantee, but a statistical range of expected returns over your time horizon. Then a decision like ""with a 1/4 chance of losing 25% of my money, should I stay with this plan?"" This is just an example. The numbers for 1900-2014 look like this -  In any 5 year period, an average return of 69.2% (note 1.69 means a 69% gain). Of the 111 5 year periods, 14 were negative with the worst being a 46% loss. I maintain 5 years is not really long term, but the risk is relatively low of being in the red."


"Each individual situation merits a fresh approach.  Working in venture capital, I've learned that the weights are always shifting and taking a ""one size fits all"" approach to business is probably the most foolish thing one can do."


We specialize in the events and wedding parties producing newness photo booths & other equipment for fun purposes using high technology. Our organization has a wedding photographer in USA. A contract should also include a copy of the photographer's terms and conditions and this must be visible to the clients before they sign the contract. The professional companies or as individual freelancers and you can select from any one of these. Some couples tend to look at the cheaper affordable photographers to serve at the lucky occasion.


I'm also self employed. Your circumstances may be different, but my accountant told me there was no reason to pay more than 100% of last years' taxes. (Even if this years' earnings are higher.) So I divide last year by 4 and make the quarterlies. As an aside, I accidentally underpaid last year (mis-estimated), and the penalty was much smaller than I expected.


You don't need a credit score. After I paid off my house mortgage many years ago I had this discussion with my mortgage agent (now bank VP). Your credit score is not a measure your ability to repay. It is a behavioral model and a statistical measure of the likelihood that the banks will make money off of you when they give you a loan, and a marketing tool that the banking industry uses to sell you long term and short term debt (mortgages and credit cards). Statistically speaking, people who close out major loans change their behaviors, and the model captures this change in behavior. In my own case, even though I have a credit history and sufficient cash is the bank to buy my next home outright, I have no credit score . What the model says is that people with my behavioral profile are not likely to take a loan, and if they did take one, they would pay it back so quickly that the bank would not even recoup the cost of initiating the loan. In short, people with my profile are bad news for the loans side of the bank. Thanks @quid for suggesting I capture this and post it as an answer


The contract is not very clear. As much as I can understand it will still help if you make part prepayments. In an Rule 78 or Actuarial method, the schedule is drawn up front and the break-up of interest and principal for each month is calculated ahead. At the beginning both the reducing balance method as well as Actuarial method will give the same schedule.  However in Actuarial method, if you make part prepayments, they get applied to the future principals, the interest are ignored. However the future interests are not reduced. Example: Say your schedule looks something like this; Monthly Payments say 100; Month | Principal | Interest 1 | 10 | 90 2 | 20 | 80 3 | 30 | 70 4 | 40 | 60 5 | 50 | 50 6 | 60 | 40 7 | 70 | 30 8 | 80 | 20 9 | 90 | 10 So lets say you have made 3 payments of 100, in the 4th month if you make 150 [in addition to 100], it would get applied to the principal of 4th, 5th and 6th month. So essentially you would save interest of 4th, 5th and 5th month. It would also reduce the total payments to 6. i.e. you will only have 7th, 8th, 9th due. The next payment you make of 100 will get applied to row 7. The disadvantage of this method over reducing balance is that the interest calculated for rows 7,8,9 don't change compared to reducing balance. However if you prepay in full, the unearned interest is calculated and returned as per the Actuarial Tables.


I assert not so. Even if we assume a zero sum game (which is highly in doubt); the general stock market curves indicate the average player is so bad that you don't have to be very good to have better that 50/50 averages. One example: UP stock nosedived right after some political mess in Russia two years ago. Buy! Profit: half my money in a month. I knew that nosedive was senseless as UP doesn't have to care much about what goes on in Russia. Rising oil price was a reasonable prediction; however this is good for railroads, and most short-term market trends behave as if it is bad.


I was specifically talking about property tax which doesn't increase that much with income. But state and local income taxes ratio makes a lot of sense since there are still lots of people that depend on a salary at 1million$ AGI.


I actually used to work at SBUX back in the day, it was pretty heavily emphasized in training -- we were instructed to explain that to customers when they ask, and I am pretty sure it is all over their bags / boards in the shops.


Residents of Canada must pay Canadian income tax on their worldwide income (source: Wikipedia). However, there is a tax treaty between the U.S. and Canada; I haven't read it, but my guess is that it will allow you to claim a tax credit in Canada for the capital gains tax you have paid to the U.S.


Haven't read this but will, thanks.  I would agree with you that there are certain aspects and forms of private equity that could be considered reprehensible. First, carried interest probably isn't the fairest thing in the world. But that's not going to last much longer. I think you could also argue that SOME hostile takeovers approach the reprehensible. An example off the top of my head would be Carl Icahn and TWA. I would argue on the whole, however, that most hostile takeovers are accretive in the sense that you're taking out management that is either being tremendously negligent, or destroying value all together.   In both of those instances you can make succinct and well thought out arguments. But this isn't what's happening with Bain. On the whole I would disagree and argue that PE backed restructurings are accretive to the economy as a whole.


Experience and friendly service – As not many people would be aware of the process, it is important for every individual to be aware of the norms before starting online incorporation. A professional organization can give you better information and education about the process, as Delaware incorporation comes with a lot of norms to be followed by every firm or a company.


"Unfortunately, Australian bureocrats made it impossible to register a small business without making the person's home address, full name, date of birth and other personal information available to the whole world. They tell us the same old story about preventing crime, money laundering and terrorism, but in fact it is just suffocating small business in favour of capitalistic behemoths. With so many weirdos and identity thieves out there, many people running a small business from home feel unsafe publishing all their personal details. I use a short form of my first name and real surname for my business, and reguraly have problems cashing in cheques written to this variation of my name. Even though I've had my account with this bank for decades and the name is obviously mine, just a pet or diminitive form of my first name (e.g. Becky instead of Rebecca). This creates a lot of inconvenience to ask every customer to write the cheque to my full name, or make the cheque ""bearer"" (or not to cross ""or bearer"" if it is printed on the cheque already). It is very sad that there is protection for individual privacy in Australia, unless you can afford to have a business address. But even in this case, your name, date of birth and other personal information will be pusblished in the business register and the access to this information will be sold to all sorts of dubious enterprises like credit report companies, debt collectors, market researchers, etc. It seems like Australian system is not interested in people being independent, safe, self-sufficient and working for themselves. Everyone has to be under constant surveliance."


I don't see anything in this forum on the leverage aspect, so I'll toss that out for discussion.  Using generic numbers, say you make a $10k down payment on a $100,000 house. The house appreciates 3% per year. First year, it's $103,000. Second year, $106090, third it's 109,272.70. (Assuming straight line appreciation.) End of three years, you've made $9,272.70 on your initial $10,000 investment, assuming you have managed the property well enough to have a neutral or positive cash flow. You can claim depreciation of the property over those rental years, which could help your tax situation.   Of course, if you sell, closing costs will be a big factor. Plus... after three years, the dreaded capital gains tax jumps in as mentioned earlier, unless you do a 1031 exchange to defer it.