"This is not intended as legal advice, and only covers general knowledge I have on the subject of wills as a result of handling my own finances.   Each state of the USA has its own laws on wills and trusts.  You can find these online.  For example, in Kentucky I found state laws here:  http://www.lrc.ky.gov/krs/titles.htm and Title XXXIV is about wills and trusts.  I would recommend reading this, and then talking to a lawyer if it is not crystal clear.   Generally, if a lawyer does not draft your will, then either (1) you have no will, or (2) you use a form or computer program to make a will, that must then be properly witnessed before it is valid.  If you don't have it witnessed properly, then you have no will.  In some states you can have a holographic will, which means a will in your own handwriting.  That's when you have that 3am heart attack, and you get out a pad of paper and write ""I rescind all former wills hereby bequeathing everything to my mistress Samantha, and as to the rest of you go rot in hell. "" One issue with these is that they have to get to court somehow, and someone has to verify the handwriting, and there are often state laws about excluding a current spouse, so you can guess for yourself whether that one might disappear in the fireplace when another family member finds it next to the body or if a court would give it validity. And there can be logic or grammar problems with do it yourself wills, made in your own handwriting, without experience or good references on how to write things out.  Lawyers who have done a bunch of these know what is clear and makes sense.  (1) In Tennessee, where I live, an intestate's property, someone who died with no will, is divided according to the law.  The law looks to find a spouse or relatives to divide the property, before considering giving it to the state.  That might be fine for some people.  It happened once in my family, and was resolved in court with minimal red tape.  But it really depends on the person.  Someone in the middle of an unfinalized divorce, for instance, probably needs a will help to sort out who gets what.   (2) A form will is valid in Tennessee if it is witnessed properly.  That means two witnesses, who sign in yours' and each others' presence.  In theory they can be called to testify that the signature is valid.  In practice, I don't know if this happens as I am not a lawyer. I have found it difficult to find witnesses who will sign a form will, and it is disconcerting to have to ask friends or coworkers for this sort of favor as most people learn never to sign anything without reading it.  But a lawyer often has secretaries that do it...  There is a procedure and a treaty for international wills, which I know about from living overseas. To streamline things, you can get the witnesses to each sign an affidavit after they signed the will.  The affidavit is sworn written testimony of what happened, that they saw the person sign their will and sign in each others' presence, when, where, no duress, etc.  If done correctly, this can be sufficient to prove the will without calling on witnesses.  There is another option (3) you arrange your affairs so that most of your funds are disbursed by banks or brokers holding your accounts.  Option (3) is really cheap, most stock brokers and banks will create a Transfer-On-Death notice on your account for free.  The problem with this is that you also need to write out a letter that explains to your heirs how to get this money, and you need to make sure that they will get the letter if you are dead.  Also, you can't deal with physical goods or appoint a guardian for children this way.  The advantage of a lawyer is that you know the document is correct and according to local law and custom, and also the lawyer might provide additional services like storing the will in his safe.  You can get personalized help that you can not get with a form or computer program."


"Collateralized & Secured are interchangeable terms. Note the following two quotes from wikipedia (links below): ""A secured loan is a loan in which the borrower pledges some asset (e.g. a car or property) as collateral for the loan, which then becomes a secured debt owed to the creditor who gives the loan."" http://en.wikipedia.org/wiki/Secured_loan ""In lending agreements, collateral is a borrower's pledge of specific property to a lender, to secure repayment of a loan."" http://en.wikipedia.org/wiki/Collateral_%28finance%29 This website also uses the terms interchangeably: http://www.wisegeek.org/what-is-a-collateral-loan.htm Loan & Line of Credit are not interchangeable terms.  In a loan, you receive a one time disbursement & repay it over a fixed amortization schedule. (Think home mortgage) In a line of credit, you can pay back & re-borrow from your credit line as often as you need. (Think credit card or Home Equity Line of Credit)"


"Assuming the numbers work out roughly the same (and you can frankly whip up a spreadsheet to prove that out), a defined benefit scheme that pays out an amount equal to an annuitized return from a 401(k) is better.  The reason is not monetary - it is that the same return is being had at less risk. Put another way, if your defined benefit was guaranteed to be $100/month, and your 401(k) had a contribution that eventually gets to a lump sum that, if annuitized for the same life expectancy gave you $100/month, the DB is better because there is less chance that you won't see the money. Or, put even simpler, which is more likely? That New York goes Bankrupt and is relieved of all pension obligations, or, the stock market underperforms expectations.  Neither can be ruled out, but assuming even the same benefit, lower risk is better. Now, the complication in your scenario is that your new job pays better.  As such, it is possible that you might be able to accumulate more savings in your 401(k) than you might in the DB scheme.  Then again, even with the opportunity to do so, there is no guarantee that you will.  As such, even modelling it out really isn't going to dismiss the key variables. As such, can I suggest a different approach?  Which job is going to make you happier now?  Part of that may be money, part of that may be what you are actually doing.  But you should focus on that question. The marginal consideration of retirement is really moot - in theory, an IRA contribution can be made that would equalize your 401(k), negating it from the equation.  Grant you, there is very slightly different tax treatment, and the phaseout limits differ, but at the salary ranges you are looking at, you could, in theory, make decisions that would have the same retirement outcome in any event. The real question is then not, ""What is the effect in 20 years?"" but rather, which makes you happier now?"


Here is a simple answer: Most merchants do not charge customers, but you can.


Yahoo provides dividend data from their Historical Prices section, and selecting Dividends Only, along with the dates you wish to return data for. Here is an example of BHP's dividends dating back to 1998. Further, you can download directly to *.csv format if you wish: http://real-chart.finance.yahoo.com/table.csv?s=BHP.AX&a=00&b=29&c=1988&d=06&e=6&f=2015&g=v&ignore=.csv


This isn't totally wrong- there are hedge funds that are long 150% of AUM and short 50%. However, Rentech has said that holding a position for 8 seconds is long for them, so that's not what they're doing. I'd assume the 4X leverage most just refers to option positions that have delta 4 on average. They also may be borrowing money, which they can probably do extremely cheaply since they have a 35 year track record showing they're essentially risk-free.


Your comment regarding your existing finances is very relevant and helpful. You need to understand that generally in personal finance circles, when a strong earning 22 year-old is looking for a loan it's usually a gross spending problem.   Their car costs $1,000 /month and their bar tabs are adding up so the only logical thing to do is get a loan.  Most 22-year-olds don't have a mortgage soaking up their income, or a newborn.   With all of this in mind I essentially agree with DStanley and, personally, and many people here would probably disagree, I'd stop the 401(K) contribution and use that money to pay the debt.  You're still very young from a retirement standpoint, let the current balance ride and forego the match until the debt is paid.  I think this is more about being debt free at 22 quickly than it's about how much marginal money could be saved via 401(k) or personal loan or this strategy or that strategy.  I think at your age, you'll benefit greatly from simply being debt free. There are other very good answers on this site and other places regarding the pitfalls of a 401(k) loan.  The most serious of which is that you have an extremely limited time to pay the entire loan upon leaving the company.  Failure to repay in that situation incurs tax liability and penalties.   From my quick math, assuming your contribution is 8% of $70,000 /year, you're contributing something in the neighborhood of $460/month to your 401(k).  If you stopped contributing you'd probably take home a high $300 number net of taxes.  It'll take around 20 months to pay the loan off using this contribution money without considering your existing payments, in total you're probably looking at closer to 15 months.  You'll give up something in the neighborhood of $3,500 in match funds over the repayment time.   But again, you're 22, you'll resume your contributions at 24; still WAY ahead of most people from a retirement savings standpoint.  I don't think my first retirement dollar was contributed until I was about 29.  Sure, retirement savings is important, but if you've already started at age 22 you're probably going to end up way ahead of most either way.  When you're 60 you're probably not going to bemoan giving up a few grand of employer match in your 20s. That's what I would do. Edit: I actually like stannius's suggestion in the comments below.  IF there's enough vested in your plan that is also available for withdrawal that you could just scoop $6,500 out of your 401(k) net of the 10% penalty and federal and state taxes (which would be on the full amount) to pay the debt, I'd consider that instead of stopping the prospective contributions.  That way you could continue your contributions and receive the match contributions on a prospective basis.  I doubt this is a legitimate option because it's very common for employers to restrict or forbid withdrawal of employee and/or employer contributions made during your employment, but it would be worth looking in to.


Also - the more credit facilities you have, the risikier you get. Say Company A lends you $8.000 for a down-payment - let's say you then go out and max out your other 100k facilities - you now have debt of 108k. What guarantee does the Company A have of repayment? Fewer credit facilities = better chance of getting a new loan.


Sounds like he's just had the theory playing in his head since someone told him they did that instead of just purchasing it and going in to payments.  Perhaps I need to sit down and calculate it for my clueless self.


"Although this has been touched upon in comments, I think the following line from the currently accepted answer shows the biggest issue: There is a clear difference between investing and gambling. The reality is that the difference isn't that clear at all. Tens of comments have been written arguing in both directions and looking around the internet entire essays have been written arguing both positions. The underlying emotion that seems to shape this discussion primarily is whether investing (especially in the stock market) is a form of gambling. People who do invest in this way tend to get relatively emotional whenever someone argues that this is a form of gambling, as gambling is considered a negative thing. The simple reality of human communication is that words can be ambiguous, and the way investors will use the words 'investments' and 'gambles' will differ from the way it is used by gamblers, and once again different from the way it's commonly used. What I definitely think is made clear by all the different discussions however is that there is no single distinctive trait that allows us to differentiate investing and gambling. The result of this is that when you take dictionary definitions for both terms you will likely end up including lottery tickets as a valid form of investment.  That still however leaves us with a situation where we have two terms - with a strong overlap - which have a distinctive meaning in communication and the original question whether buying lottery tickets is an investment. Over on investorguide.com there is an absolutely amazing strongly recommended essay which explores countless of different traits in search of a difference between investing and gambling, and they came up with the following two definitions: Investing: ""Any activity in which money is put at risk for the purpose of making a profit, and which is characterized by some or most of the following (in approximately descending order of importance): sufficient research has been conducted; the odds are favorable; the behavior is risk-averse; a systematic approach is being taken; emotions such as greed and fear play no role; the activity is ongoing and done as part of a long-term plan; the activity is not motivated solely by entertainment or compulsion; ownership of something tangible is involved; a net positive economic effect results."" Gambling: ""Any activity in which money is put at risk for the purpose of making a profit, and which is characterized by some or most of the following (in approximately descending order of importance): little or no research has been conducted; the odds are unfavorable; the behavior is risk-seeking; an unsystematic approach is being taken; emotions such as greed and fear play a role; the activity is a discrete event or series of discrete events not done as part of a long-term plan; the activity is significantly motivated by entertainment or compulsion; ownership of something tangible is not involved; no net economic effect results."" The very interesting thing about those definitions is that they capture very well the way those terms are used by most people, and they even acknowledge that a lot of 'investors' are gambling, and that a few gamblers are 'investing' (read the essay for more on that). And this fits well with the way those two concepts are understood by the public. So in those definitions normally buying a lottery ticket would indeed not be an investment, but if we take for example Vadim's operation example If you have $1000 and need $2000 by next week or else you can't have an operation and you will die (and you can't find anyone to give you a loan). Your optimal strategy is to gamble your $1000, at the best odds you can get, with a possible outcome of $2000. So even if you only have a 1/3 chance of winning and getting that operation, it's still the right bet if you can't find a better one. this can suddenly change the perception and turn 'gambling' into 'high-risk investing'."


Looks like there are no specific rule in India to prevent Wash sales. See the link below.  http://economictimes.indiatimes.com/wealth/personal-finance-news/investors-can-rejig-portfolio-book-short-term-loss-to-save-tax/articleshow/7812788.cms?intenttarget=no


I am sure there would be many views on the above topic, my take is that DIY takes the following: Now, for many, one or more of the other factors are missing. In this case, it is probably best to go for a financial adviser. There are others who have some of the above in place and are interested but probably cannot spend enough time. For them a middle ground of Mutual Funds probably is a good choice. Here they get to choose the fund they invest in and the fund manager manages the fund. For the people who have the above more or less in place and also are willing to take risk and learn, they probably can do a DIY for a while and find out the actual result. Just my views and opinion.


There are many ways to calculate the return, and every way will give you a different results in terms of a percentage-value. One way to always get something meaningful - count the cash. You had 977 (+ 31) and in the end you have 1.370, which means you have earned 363 dollars. But what is your return in terms of percentage? One way to look at it, is by pretending that it is a fund in which you invest 1 dollar. What is the fund worth in the beginning and in the end? The tricky part in your example is, you injected new capital into the equation. Initially you invested 977 dollars which later, in the second period became worth 1.473. You then sold off 200 shares for 950 dollars. Remember your portfolio is still worth 1.473, split between 950 in cash and 523 in Shares. So far so good - still easy to calculate return (1.473 / 977 -1 = 50.8% return). Now you buy share for 981 dollars, but you only had 950 in cash? We now need to consider 2 scenarios. Either you (or someone else) injected 31 dollars into the fund - or you actually had the 31 dollars in the fund to begin with. If you already had the cash in the fund to begin with, your initial investment is 1.008 and not 977 (977 in shares and 31 in cash). In the end the value of the fund is 1.370, which means your return is 1.370 / 1.007 = 36%. Consider if the 31 dollars was paid in to the fund by someone other than you. You will then need to recalculate how much you each own of the fund. Just before the injection, the fund was worth 950 in cash and 387 in stock (310 - 200 = 110 x 3.54) = 1.339 dollars - then 31 dollars are injected, bringing the value of the fund up to 1.370. The ownership of the fund is split with 1.339 / 1.370 = 97.8% of the value for the old capital and 2.2% for the new capital. If the value of the fund was to change from here, you could calculate the return for each investor individually by applying their share of the funds value respective to their investment. Because the value of the fund has not changed since the last period (bullet 3), the return on the original investment is (977 / 1.339 - 1 = 37.2%) and the return on the new capital is (31 / 31 = 0%). If you (and not someone else) injected the 31 dollar into the fund, you will need to calculate the weight of each share of capital in each period and get the average return for each period to get to a total return. In this specific case you will still get 37.2% return - but it gets even more comlex for each time you inject new capital.


Your taxable income is your total income from however many sources of income you have. If you are in employment and doing self-employed job at the same time, your taxable income will be a combination of both incomes.  For example if in employment you make £10000 and self employed you make another £10000 - your total income is £20000 and this is your taxable income.  And even if your self-employed job does not bring you more than personal allowance, how would HMRC know that without you filling-in tax return?


Are mortgages always sold for less than the remaining principal? No, they're almost always sold for more than that. The buyer will take a loss if the homeowner pays off the loan immediately, but that's very unlikely. The buyer is hoping that the owner will payoff the loan as scheduled and they'll make a tidy profit from the interest charged. The originator now makes their profit immediately and has their capital back so they can make more loans.


"In Italy (even with taxes that are more than 50% on income) owning garages is generally a good business, as you said: ""making money while you sleep"", because of no maintainance. Moreover garages made by real concrete (and not wood like in US) are still new after 50 years, you just repaint them once every 20 years and you change the metal door gate once every 30 years. After 20 years you can be sure the price of the garage will be higher than what you paied it (at least for the effect of the inflation, after 20 years concrete and labour work will cost more than today). The only important thing before buying it is to make sure it is in an area where people are eager to rent it. This is very common in Italian cities' downtown because they were built in dark ages when cars did not exists, hence there are really few available parkings."


Paying off the debt is low-risk, low-reward.  You're effectively guaranteed a 4% return.  If you buy a mutual fund, you're going to have to take some risk to have a decent chance of getting better than 4% and change return in the long run, which probably means a fund that invests primarily in stocks.  Buying a stock mutual fund is high-risk, high reward, especially when you're in significant debt.  On the other hand, 4% and change is very low-interest.  If you wanted to buy stocks on margin, financing stock investments directly with debt, you'd pay a heck of a lot more.  Bottom line:  It comes down to your personal risk tolerance.


"In general, a lack of endorsement (meaning nothing written by the receiver on the back of the check) is equivalent to it being endorsed ""as deposit only"" to a bank that the depositor has an account with. (See Uniform Commercial Code §4-205.) That is, the bank that receives a deposit without any endorsement promises to the banks that process the check along the line all the way back to your bank, that they properly deposited the money into the account of the entity that the check was made out to. With checks being processed with more and more automation, it's getting fairly common for there to be little writing needed on the check itself, as the digital copy gets submitted to the banking system for clearing. If you're concerned about there being some sort of fraud, that perhaps the entity that you're sending money to isn't the ones that should be getting it, or that they're not actually getting the money, or something like that, that's really an entirely different concern. I would expect that if you were saying that you paid something, and the payee said that you hadn't, that you would dispute the transaction with your bank. They should be able to follow the electronic trail to where the money went, but I suspect they only do so as part of an investigation (and possibly only in an investigation that involved law enforcement of some type). If you're just curious about what bank account number your deposit went into, then it just looks like you're the one trying to commit some sort of fraud (even if you're just being curious), and they don't have much incentive to try to help you out there."


How does paying off a mortgage early work? Example: I have a 30 year fixed rate mortgage of 3.5%, the amount borrowed is $300,000. I have just inherited $300,000. I am in the first year of the mortgage. Can I give the bank the $300,000 to clear the mortgage, or must I pay off the total interest that was agreed upon for the 30 year term? This depends on the country regulation and your agreement. Generally speaking the calculations are on daily reducing balance. so you just pay 300K I'm curious why the bank would let you do this, since they will lose out on a lot of profit


"The key part of your question is the ""so far"".  So you didn't need a credit card today, or yesterday, or last month - great!  But what about tomorrow?  The time may come when you really need to spend a little more than you have, and a credit card will let you do that, at a very modest cost if you pay it off promptly (no cost, if paid within 30 days). I learned this when I was traveling and stranded due to bad weather.  I had almost nothing in my bank account at the time, and while I actually did have a small student-type credit card, I came really close to having to sleep at the train station when I didn't have enough for another night in a hotel. As an example, if you have close friends or family living across the country, and something tragic were to happen, would you be able to pay for a flight to attend the funeral?  What if you'd recently had an accident and a big medical bill (it doesn't take much, a broken arm can cost $10,000)?  Perhaps you have a solid nest egg, but breaking a CD ahead of schedule or taking short-term capital gains on a mutual fund will usually cost more than one or two months of interest payments."


It appears to me that the tax code gives significant advantages to being a corporation as opposed to being a person due to the relative ease of legal tax avoidance.   As an individual, avoiding taxes is much harder than it is for a corporation.   I mean, why can't I claim my deficit last year as an operating loss and use it to offset my taxes?  I mean suppose I had to borrow money to afford food, that's pretty vital to my business (staying alive) operations. Why can't I offset my income with my borrowing like a corporation can?


"Don't put money in things that you don't understand. ETFs won't kill you, ignorance will. The leveraged ultra long/short ETFs hold swaps that are essentially bets on the daily performance of the market. There is no guarantee that they will perform as designed at all, and they frequently do not. IIRC, in most cases, you shouldn't even be holding these things overnight. There aren't any hidden fees, but derivative risk can wipe out portions of the portfolio, and since the main ""asset"" in an ultra long/short ETF are swaps, you're also subject to counterparty risk -- if the investment bank the fund made its bet with cannot meet it's obligation, you're  may lost alot of money. You need to read the prospectus carefully. The propectus re: strategy. The Fund seeks daily investment results, before fees and expenses, that correspond to twice the inverse (-2x) of the daily performance of the Index. The Fund does not seek to achieve its stated investment objective over a period of time greater than a single day. The prospectus re: risk. Because of daily rebalancing and the compounding of each day’s return over time, the return of the Fund for periods longer than a single day will be the result of each day’s returns compounded over the period, which will very likely differ from twice the inverse (-2x) of the return of the Index over the same period. A Fund will lose money if the Index performance is flat over time, and it is possible that the Fund will lose money over time even if the Index’s performance decreases, as a result of daily rebalancing, the Index’s volatility and the effects of compounding. See “Principal Risks” If you want to hedge your investments over a longer period of time, you should look at more traditional strategies, like options. If you don't have the money to make an option strategy work, you probably can't afford to speculate with leveraged ETFs either."


Yah, I haven't played in this space very much. My only exposure was visiting a weather insurance company who wanted the fund I was at to take the other side of their bets - paying us a fixed amount and having us cover them whenever their losses were over a certain amount for the month. It looked like a pretty bad deal, but apparently some multi-strat hedge-fund eventually went with it for the uncorrelated beta.


1) Yes, both of your scenarios would lead to earning $10 on the transaction, at the strike date. If you purchased both of them (call it Scenario 3), you would make $20. 2) As to why this transaction may not be possible, consider the following: The Call and Put pricing you describe may not be available. What you have actually created is called 'arbitrage' - 2 identical assets can be bought and sold at different prices, leading to a zero-risk gain for the investor. In the real marketplace, if an option to buy asset X in January cost $90, would an option to sell asset X in January provide $110?  Without adding additional complexity about the features of asset x or the features of the options, buying a Call option is the same as selling a Put option [well, when selling a Put option you don't have the ability to choose whether the option is exercised, meaning buying options has value that selling options does not, but ignore that for a moment]. That means that you have arranged a marketplace where you would buy a Call option for only $90, but the seller of that same option would somehow receive $110.  For added clarity, consider the following: What if, in your example, the future price ended up being $200? Then, you could exercise your call option, buying a share for $90, selling it for $200, making $110 profit. You would not exercise your put option, making your total profit $110. Now consider: What if, in your example, the future price ended up being $10? You would buy for $10, exercise your put option and sell for $110, making a profit of $100. You would not exercise your call option, making your total profit $100. This highlights that if your initial assumptions existed, you would earn money (at least $20, and at most, unlimited based on a skyrocketing price compared to your $90 put option) regardless of the future price. Therefore such a scenario would not exist in the initial pricing of the options. Now perhaps there is an initial fee involved with the options, where the buyer or seller pays extra money up-front, regardless of the future price. That is a different scenario, and gets into the actual nature of options, where investors will arrange multiple simultaneous transactions in order to limit risk and retain reward within a certain band of future prices.  As pointed out by @Nick R, this fee would be very significant, for a call option which had a price set below the current price. Typically, options are sold 'out of the money' initially, which means that at the current share price (at the time the option is purchased), executing the option would lose you money. If you purchase an 'in the money' option, the transaction cost initially would by higher than any apparent gain you might have by immediately executing the option. For a more realistic Options example, assume that it costs $15 initially to buy either the Call option, or the Put option. In that case, after buying both options as listed in your scenarios you would earn a profit if the share price exceeded $120 [The $120 sale price less the $90 call option = $30, which is your total fee initially], or dropped below $80 [The $110 Put price less the $80 purchase price = $30]. This type of transaction implies that you expect the price to either swing up, or swing down, but not fall within the band between $80-$120. Perhaps you might do this if there was an upcoming election or other known event, which might be a failure or success, and you think the market has not properly accounted for either scenario in advance. I will leave further discussion on that topic [arranging options of different prices to create specific bands of profitability / loss] to another answer (or other questions which likely already exist on this site, or in fact, other resources), because it gets more complicated after that point, and is outside the root of your question.


In the US, you would probably look at a certificate of deposit (CD).   I imagine there is a similar financial product in the UK, but don't know first hand.   I think it is wise to be risk averse in this situation, but be aware that your interest rate will be dismal for guaranteed returns.


I have researched this question extensively in previous years as we have notoriously high taxes in California, while neighboring a state that has zero corporate income tax and personal income tax. Many have attempted pull a fast one on the California taxation authorities, the Franchise Tax Board, by incorporating in Nevada or attempting to declare full-year residence in the Silver State. This is basically just asking for an audit, however.  California religiously examines taxpayers with any evidence of having presence in California. If they deem you to be a resident in California, and they likely will based on the fact that you live in California (physical presence), you will be subject to taxation on  your worldwide income. You could incorporate in Nevada or Bangladesh, and California will still levy its taxation on any business income (Single Member LLCs are disregarded as separate corporate entities, but still taxed at ordinary income rates on the personal income tax basis). To make things worse, if California examines your Single Member LLC and finds that it is doing business in California, based on the fact that its sole owner is based in California all year long, you could feasibly end up with additional penalties for having neglected to file your LLC in California (California LLCs are considered domestic, and only file in California unless they wish to do business in other states; Nevada LLCs are considered foreign to California, requiring the owner to file a domestic LLC organization in Nevada and then a foreign LLC organization in California, which still gets hit with the minimum $800 franchise fee because it is a foreign LLC doing business in California).  Evading any filing responsibility in California is not advisable. FTB consistently researches LLCs, S-Corporations and the like to determine whether they've been organized out-of-state but still principally operated in California, thus having a tax nexus with California and the subsequent requirement to be filed in California and taxed by California. No one likes paying taxes, and no one wants to get hit with franchise fees, especially when one is starting a new venture and that minimum $800 assessment seems excessive (in other words, you could have a company that earns nothing, zero, zip, nada, and still has to pay the $800 minimum fee), but the consequences of shirking tax laws and filing requirements will make the franchise fee seem trivial in comparison.  If you're committed to living in California and desire to organize an LLC or S-Corp, you must file with the state of California, either as a domestic corporation/LLC or foreign corporation/LLC doing business in California. The only alternatives are being a sole proprietor (unincorporated), or leaving the state of California altogether. Not what you wanted to hear I'm sure, but that's the law.


There are a lot of open questions about if this is your only accessible money or if you have other emergency funds, and if you have any retirements savings and when do you plan to retire, but leaving this all aside: You currently pay 2.65% on the mortgage, and you make less on savings (maybe 1 or 1.5%). So putting the savings into the mortgage makes you the difference, which is a good deal. However, you need to reflect this with your risk-averisty, and your long term goals, and look at potential even better deals. For example, you could put the savings into higher risk/higher gain investments (let’s assume index funds), and make 6 - 10% per year in average. That obviously is a lot more. Why would you not want to do that? Investing like this is a long term plan. If this is your only savings/emergency fund, or if you need the money within the next five years, you should not do it; it could catch you in a bad market situation, and then it might be a severe loss. If you are sure you don’t need it for at least five if not ten years, invest it and keep the mortgage, you will easily beat its interest rate. If you are risk-averse, and can’t sleep with your savings doing loopings while you watch, that is also not a plan for you. There are many things to consider, and your personal situation is relevant for the decision. Consider all options, and be sure to always have a emergency fund remaining. It is also not black and white - there are options in between of your two propositions - pay some in, and keep some for emergencies.


Minimizing tracking error and offering good redemption liquidity is the priority. A few concerns off the top of my head are entrants and exits of the S&P 500. Vanguard needs to dump a good amount of one stock quickly and purchase another big stake simultaneously. Everyone also knows that the large orders are coming so trying to do it efficiently is one challenge. When a company in the S&P 500 spins off a stock as a dividend, you could be holding on to a bunch of shares in a new stock that you need to get rid off. Again, a lot of selling at once, need to keep costs of that low.


"I think the issue you are having is that the option value is not a ""flow"" but rather a liability that changes value over time. It is best to illustrate with a balance sheet. The $33 dollars would be the premium net of expense that you would receive from your brokerage for having shorted the options. This would be your asset. The liability is the right for the option owner (the person you sold it to) to exercise and purchase stock at a fixed price. At the moment you sold it, the ""Marked To Market"" (MTM) value of that option is $40. Hence you are at a net account value of $33-$40= $-7 which is the commission. Over time, as the price of that option changes the value of your account is simply $33 - 2*(option price)*(100) since each option contract is for 100 shares. In your example above, this implies that the option price is 20 cents. So if I were to redo the chart it would look like this If the next day the option value goes to 21 cents, your liability would now be 2*(0.21)*(100) = $42 dollars. In a sense, 2 dollars have been ""debited"" from your account to cover your potential liability. Since you also own the stock there will be a credit from that line item (not shown). At the expiry of your option, since you are selling covered calls, if you were to be exercised on, the loss on the option and the gain on the shares you own will net off. The final cost basis of the shares you sold will be adjusted by the premium you've received. You will simply be selling your shares at strike + premium per share (0.20 cents in this example)"


"Easiest thing ever. In fact, 99% of people are loosing money. If you perform worse then 10% annually in cash (average over 5-10 years), then you better never even think about trading/investing. Most people are sitting at 0%..-5% annually. They win some, loose some, and are being outrun by inflation and commissions. In fact, fall of market is not a big deal, stock indexes are often jump back in a few months. If you rebalance properly, it is mitigated. Your much bigger enemy is inflation. If you think inflation is small, look at gold price over past 20 years. Some people, Winners at first, grow to +10%, get too relaxed and start to grow already lost position. That one loose trade eats 10% of their portfolio. Only there that people realize they should cut it off, when they already lost their profits. And they start again with +0%. This is hard thing to accept, but most of people are not made for that type of business. Even worse, they think ""if I had bigger budget, I would perform better"", which is kind of self-lie."


"I gather from your mention of ""stamp duty"" that you're in Britain?  I'm only familiar with US cards, but for them I can't see that there is any reason (other than a lack of self-discipline) not to use a credit card wherever possible, especially these days. 1) There are plenty of cards with no annual fee. 2) You get anywhere from 1-5% discount/cash back on purchases. 3) Many will give you sign-up bonuses, and a year or more of zero interest.  (So you put that money in your investment account, and odds are you make a profit on it.) 4) Even after the introductory 0% interest period, you get on average about a month of 0% interest between purchase and due date, during which period the money can be earning interest for you. I've made a good many thousands of dollars over the years doing this.  Again, the only drawback I can see is that you may not have the self-discipline to pay off the accounts before they start charging interest."


"Prices reflect all available information. (Efficient markets hypothesis) A lot can happen between the time a stock closes on one day and opens on another. Particularly in a heavily traded stock such as IBM. Basically, you have a different ""information set"" the following day, which implies a different price. The instances where you are most likely to have a stock where the price opens at the same price is at the previous close is a thinly traded stock on which you have little information, meaning that the ""information set"" changes less from day to day."


The obligation is contractual, so you need to read the contract to answer your question. However, since you paid for the service provided, I see no way they can force you buy any other service from them. They cannot file your tax returns without your explicit consent (on a form dedicated to that, dated and having the numbers matching the return filed - not something you can sign before the actual return is ready). Worst case they can claim you owe them more money, but since you paid for the services provided, I can't see how they can have that stand in court as well. Bottom line - even if the contract has such an obligation, I cannot see how it can be enforced. As to the mistake they noted... I wouldn't rely on H&R Block advice in any matter. Very likely, the person you were talking to was not even licensed to provide tax advice. You're lucky if the person has passed CRTP exams (in California they're legally required), but I seriously doubt their clerks are EAs or CPAs (the only designations other than a lawyer legally allowed to provide tax advice). Tax preparers (CRTPs included) are only allowed to provide advice pertaining to the preparation of the tax return they're currently engaged to prepare. Claiming income is sourced or not sourced in NY is borderline, IMHO. If they got it wrong (and to me it sounds as they did) you can sue them for damages. If your situation is tricky and it is too late to get an appointment with a proper adviser - file an extension (form 4868) and deal with it after the April busy season.


If you are making regular periodic investments (e.g. each pay period into a 401(k) plan) or via automatic investment scheme in a non-tax-deferred portfolio (e.g. every month, $200 goes automatically from your checking account to your broker or mutual fund house), then one way of rebalancing (over a period of time) is to direct your investment differently into the various accounts you have, with more going into the pile that needs bringing up, and less into the pile that is too high. That way, you can avoid capital gains or losses etc in doing the selling-off of assets. You do, of course, take longer to achieve the balance that you seek, but you do get some of the benefits of dollar-cost averaging.


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"A good question -- there are many good tactical points in other answers but I wanted to emphasize two strategic points to think about in your ""5-year plan"", both of which involve around diversification: Expense allocation: You have several potential expenses. Actually, expenses isn't the right word, it's more like ""applications"". Think of the money you have as a resource that you can ""pour"" (because money has liquidity!) into multiple ""buckets"" depending on time horizon and risk tolerance. An ultra-short-term cushion for extreme emergencies -- e.g.  things go really wrong -- this should be something you can access at a moment's notice from a bank account. For example, your car has been towed and they need cash. A short-term cushion for emergencies -- something bad happens and you need the money in a few days or weeks. (A CD ladder is good for this -- it pays better interest and you can get the money out quick with a minimal penalty.) A long-term savings cushion -- you might want to make a down payment on a house or a car, but you know it's some years off. For this, an investment account is good; there are quite a few index funds out there which have very low expenses and will get you a better return than CDs / savings account, with some risk tolerance. Retirement savings -- $1 now can be worth a huge amount of money to you in 40 years if you invest it wisely. Here's where the IRA (or 401K if you get a job) comes in. You need to put these in this order of priority. Put enough money in your short-term cushions to be 99% confident you have enough. Then with the remainder, put most of it in an investment account but some of it in a retirement account. The thing to realize is that you need to make the retirement account off-limits, so you don't want to put too much money there, but the earlier you can get started in a retirement account, the better. I'm 38, and I started both an investment and a retirement account at age 24. They're now to the point where I save more income, on average, from the returns in my investments, than I can save from my salary. But I wish I had started a few years earlier. Income: You need to come up with some idea of what your range of net income (after living expenses) is likely to be over the next five years, so that you can make decisions about your savings allocation. Are you in good health or bad? Are you single or do you have a family? Are you working towards law school or medical school, and need to borrow money? Are you planning on getting a job with a dependable salary, or do you plan on being self-employed, where there is more uncertainty in your income? These are all factors that will help you decide how important short-term and long term savings are to your 5-year plan. In short, there is no one place you should put your money. But be smart about it and you'll give yourself a good head start in your personal finances. Good luck!"


75k is short of the 'highly compensated' category.  Most US citizens in that pay range would consider paying someone to do their taxes as an unnecessary expense.  Tax shelters usually don't come into play for this level of income.  However, there are certain things which provide deductions. Some things that make it better to pay someone:   Use the free online tax forms to sandbox your returns.  If all you're concerned about is ensuring you pay your taxes correctly, this is the most cost efficient route. If you want to minimize your tax burden, consult with a CPA.  Be sure to get one who is familiar with resident aliens from your country and the relevant tax treaties. The estimate you're looking at may be the withholding, of which you may be eligible for a refund for some part of that withholding.   Tax treaties likely make sure that you get credit on each side for the money paid in the other.  For example, as a US citizen, if I go to Europe and work and pay taxes there, I can deduct the taxes paid in Europe from my tax burden in the US.  If I've already paid more to the EU than I would have paid on the same amount earned in the US, then my tax burden in the US is zero.  By the same token, if I have not paid up to my US burden, then I owe the balance to the US.  But this is way better than paying taxes to your home country and to the host country where you earned the money.


I suggest to start charging slightly more than needed to cover expenses. All you need is to show profit. It doesn't have to be significant - a couple of hundred of dollars of consistent yearly profit should suffice to show a profitable business. Then you can deduct on Schedule C all the related expenses. The caveat is that the profit (after the deduction of the expenses will be a bit smaller) will be subject to not only income tax but also the self-employment tax. But at least you'll pay tax on profit that is not entirely phantom. I remember suggesting you getting a professional consultation on this matter a while ago. You should really do that - talk to a EA/CPA licensed in your state, it may be well worth the $100-200 fee they'll charge for the consultation (if at all...).


Yes, you can send in a 2012 1040-ES form with a check to cover your tax liability. However, you will likely have to pay penalties for not paying tax in timely fashion as well as interest on the late payment. You can have the IRS figure the penalty and bill you for it, or you can complete Form 2210 (on which these  matters are figured out) yourself and file it with your Form 1040. The long version of Form 2210 often results in the smallest extra amount due but is considerably more time-consuming to complete correctly. Alternatively, if you or your wife have one or more paychecks coming before the end of 2012, it might be possible to file a new W-4 form with the HR Department with a request to withhold additional amounts as Federal income tax. I say might because if the last paycheck of the year will be issued in just a few days' time, it might already have been sent for processing, and HR might tell you it is too late. But, depending on the take-home pay, it might be possible to have the entire $2000 withheld as additional income tax instead of sending in a 1040-ES. The advantage of doing it through withholding is that you are allowed to treat the entire withholding for 2012 as satisfying the timely filing requirements. So, no penalty for late payment even though you had a much bigger chunk withheld in December, and no interest due either.  If you do use this approach, remember that Form W-4 applies until it is replaced with another, and so  HR will continue to withhold the extra amount on your January paychecks as well.  So, file a new W-4 in January to get back to normal withholding. (Fix the extra exemption too so the problem does not recur in 2013).


The PAYE tax and NI will be deducted as usual. Send HMRC a P85 form to tell them you're emigrating, and they will refund the tax.


A friend tweeted a similar question regarding student loans, and I responded with Student Loans and Your First Mortgage.  The punchline is that you need to be aware of the 28/36 ratios in a bank qualifying you for your mortgage. Even though you have a house, you may not be aware of this.  Simply put, 28% of gross monthly income can be used to qualify for your house burden, loan, taxes, etc. 36% for total debt. So the student loan may fit in that 8% gap, and paying it all off reduces the cash you have without helping you borrow more money.  3-5 years is short term, and to that part of the question, this money should not be invested in anything at risk. A 3 year treasury or CD would be it, in my opinion.


I know a guy on a much higher rate than me, about £500 per day, and he claims to pay around 18% tax which has me bewildered He will be showing expenses, which are deductible. Check with your accountant about expenses, which can be legally claimed as expenses. This is the main benefit of operating through a limited company. Legtimate business expenses can be claimed, which you cannot do if you are a permanent employee. Your friend might also be claiming false expenses, with a shady accountant. If HMRC does decide to give a call, he might have to pay n times the money he has saved till now. And my suggestion is always ask your accountant first. He(she) knows the legal stuff, so he(she) would give you the legally correct options. If you aren't comfortable with him(her), you can always change accountants. holiday pay, sick pay and job security You miss those that is why you are paid at a rate much higher than an employee.  benefit of a limited company  You can arrange your salary to pay no PAYE and take the rest as dividends. You willn't have to pay PAYE on that. Secondly if you have a partner(s), all of you can be paid dividends without paying PAYE(if you don't cross the threshold).


It looks like RK is encouraging tax fraud. Suggesting that one have their business cover personal expenses sounds like the advice that got Leona Helmsley in hot water.


Yes (most likely). If you are exchanging investments for cash, you will have to pay tax on that - disregarding capital losses, capital loss carryovers, AGI thresholds, and other special rules (which there is no indication of in your question). You will have to calculate the gain on Schedule D, and report that as income on your 1040. This is the case whether you buy different or same stocks.


In the United States, when applying for credit cards, proof of income is on an honor system. You can make $15k a year and write on your application that you make $150k a year. They don't check that value other than to have their computer systems figure out risk and you get a yes or no. It was traditionally easy to attain credit, but that got tightened in 2008/2009 with the housing crisis. This is starting to change again and credit is flowing much more easily.


In Keynes' day, money was gold. Convertible at a fixed exchange rate. His recommendation was that the government saved gold in good times, to ensure that it wouldn't run out of gold in the bad times.  That particular advice has zero relevance to a government that only borrows its own free-floating currency, as governments do not and can not run out of their own free-floating currency.


"Short answer: NO.  Do NOT buy a house.  Houses are a ""luxury"" good (see Why is a house not an investment?).  Although the experience of the early 2000s seemed to convince most people otherwise, houses are not an investment.  Historically, it has usually been cheaper to rent, because owning a house has non-pecuniary benefits such as the ability to change things around to exactly the way you like them.  Consult a rent vs. buy calculator for your area to see if your area is exceptional.  I also would not rely on the mortgage interest deduction for the long term, as it seems increasingly likely the Federal government will do away with it at some point. The first thing you must do is eliminate your credit card and other debts.  Try to delay paying your lawyers and anyone else who is not charging you interest (or threatening to harm you in other ways) as long as possible.  Save enough money to maintain your current standard of living for 6 months should you lose your job, then put the rest in your 401(k). Another word of advice: learn to live with less.  Your kids do not need separate bedrooms.  Hopefully one day the time will come when you can afford a larger house, but it should not be your highest priority.  You and your kids will all be worse off in the end should you have unexpected financial difficulties and you have overextended yourself to buy a house. Now that your credit score is up, see if you can renegotiate your credit card loans or negotiate a new loan with lower interest."


It is not necessarily proportional. 401k are all unique per the plan and how they are set up. It is impossible to find any two exactly alike. You should have separate buckets of the money types. Pre tax, after tax, roth, employer contribution,etc... If the plan is good you may have a Source Specific Withdraw option which allows you to take only roth or pretax at your choosing. They should track the growth of each bucket separately. It does indeed appear complicated but just think of it as different buckets of cash store in the same vault. Most people end up rolling over the 401k into an ira when they retire for flexibility to get out from under the plan rules. When you do this you will create a roth ira and a traditional ira. Then you can pick and choose when you want to take what type of money.


Oh it is ok. I was a little confused, because I tried to read up on future options and options as much as possible, and to still get question marks worried me. I mean to my knowledge, options can be traded as is without margin, while futures do need margin. If you are a starving artist, you can see the draw of not having to have margin to keep track of, but be able at the same time to learn about another market to trade in (commodities).


The problem is, you are trying to qualify for a loan that has a 25% down payment using money you don't have, which defeats the purpose of having a down payment. The best thing to do is have your parents buy the house for you. You then rent the house from them where your rent is equal to the mortgage + x. Your parents then put x into savings account for you and then once you have 25% in that account, they gift it to you and you purchase the house from them using that 25% as the downpayment for the mortgage.


You're confused because the source you cite leaves out one number that isn't relevant to the argument they're making: total costs. The number you're expecting, $9 x 365 or $3285 is the total cost of buying the jewelry which, when subtracted from the $3650 sales volume gives us the net profit of $365.  The investment is the amount of money original put into a system our company. In this case the merchant bought his first piece of jewelry for $9, sold it for $10, took one dollar in profit and used the other 9 to reinvest by buying a new piece of jewelry. We can extend the analogy further. After 9 days of selling, the merchant will posses $18, allowing him to now buy 2 pieces of jewelry each morning and sell them for $20. Every day his costs will be $18 and he'll turn a $2 profit, all with the original investment of $9.


Do you realise that the examples you have given are for stock splits not for dividends, that is why the date payable is before the ex-date for the split. The payments for the split occur on 30th June and the first day the stock trades with the new split is on the next trading day, being the ex-date, 1st July.


"If the IRS changes your return in any way (including math errors) - they send a letter explaining the change and the reasons for it. You should read that letter, it will answer your question (Usually its a CP12 notice). If you didn't receive it - you can call them and ask to resend it (they're unlikely to answer over the phone, but you can try asking). I'm confused by your using the word ""estimate"". Your tax return is not supposed to be estimate, it supposed to be precise. Why are you considering your tax return ""estimate""? If your filed tax return shows refund of $X and you received $X+$180 - then as I said, a letter of explanation from the IRS is due. If you don't know what the refund amount on your return is and you're trying to ""estimate"" it now - you better get a copy of that return."


With a $40,000 payment there is a 100% chance that the owner will be claiming this as a business expense on their taxes.  The IRS and the state will definitely know about it, and the risk of interest and penalties if it is not claimed as income make the best course of action to see a tax adviser. Because taxes will not be taken out by the property owner, the tax payer should also make sure that the estimated $10,000 in federal taxes, if they are in the 25% tax bracket, doesn't trigger other tax issues that could result in penalties, or the need to file quarterly taxes next year. This kind of extra income could also result in a change or an elimination of a health care subsidy. A unexpected mid-year  change could trigger the need to refund the subsidy received this year via the tax form next April.


"In most industries it's really hard to tell if Bob is in a minority or not. Why do people not subscribe after their x months of a free trial? How do you know that? The good thing about ""Bob"" is that he's willing to tell you the reason why *at least* one person fell out of the funnel. That's very valuable information."


"In the UK there are Premium Bonds, http://www.nsandi.com/. In simple terms these get you a ""raffle ticket"" for each £1 you invest. Each month multiple tickets are drawn and they each win between £25 and £1m. Your capital does not go down but you aren't guaranteed to win. So you can't lose your money but there's potential to not make any either."


He has included this on Schedule D line 1a, but I don't see any   details on the actual transaction. It is reported on form 8949. However, if it is fully reported in 1099-B (with cost basis), then you don't have to actually detail every position. Turbotax asked me to fill in individual stock sales with proceeds and cost basis information. ... Again, it seems to be documented on Schedule D in boxes 1a and 8a. See above. I received a 1099-Q for a 529 distribution for a family member. It was   used for qualified expenses, so should not be taxable. Then there's nothing to report. I believe I paid the correct amounts based on my (possibly flawed) understanding of estimated taxes. His initial draft had me paying a penalty. I explained my situation for the year, and his next draft had the   penalties removed, with no documentation or explanation. IRS assesses the penalty. If you volunteer to pay the penalty, you can calculate it yourself and pay with the taxes due. Otherwise - leave it to the IRS to calculate and assess the penalty they deem right and send you a bill. You can then argue with the IRS about that assessment. Many times they don't even bother, if the amounts are small, so I'd suggest going with what the CPA did.


To add a little to mhoran_psprep's answer, the clause in question is not binding in perpetuity but only for the duration of the construction loan.  I assume that you are getting the loan from a bank rather than through  the builder.  The way a construction loan works is that the bank  agrees to loan you a certain amount of money for you to pay the builder but you don't get the money upfront to hold  till the construction is complete, or to pay to the builder each month. Each month, or whenever a major phase of the construction is completed, the builder submits a request for payment of (say) $X to you stating what part of the  whole work has been completed and attaching lien waivers from all the subcontractors that did any part of the work that they have been paid in full.  It is up to you to verify  (for your own protection) that the work has in fact been completed and that the work is satisfactory.  If everything looks OK, you send the  request (together with the lien waivers) to the bank which sends its own home inspector to verify that the work has in fact been completed. After the inspector's OK, the bank pays the builder $X  (more commonly $0.95X or $0.9X) and gets a lien waiver from the builder in the amount of the payment.  At this point, the amount that you  owe the bank increases by the amount paid. This goes on till the  house is completed, the municipality or county issues a Certificate  of Occupancy (meaning that that august body is satisfied that  there are no building code violations etc. and the place is  habitable) and the penultimate request for payment is made. Penultimate because a good construction contract withholds  some amount (5% or 10%) of the money owed to the builder  for anywhere from three  months to a year to ensure that the builder will come back  and fix things that were done incorrectly but not noticed  till the house was lived in. (For example, one drywall nail had penetrated an electrical wire creating leakage. This was not discovered during inspection - flip the switch; light turns on? yes, so flip the switch back and move on - but when the light was turned on for three hours after the house was occupied, an electrical fire began inside the wall!)  So, after this settle-down period is over, the builder submits the final payment request and gives a final lien waiver to the effect that everything owed to him has been paid. It is during this period of time that the bank wants to make sure that you don't take on additional loans or debts, or make any material changes to the facts that the bank used in assessing your credit-worthiness and making the decision to loan you the money. Hence the clause that is causing you to worry.  Construction loans usually are at higher interest rates than regular mortgages so that once construction is complete, it is in your best interest to replace the construction loan (paying off its mortgage) with a regular home-owner loan and mortgage.  If you get the regular mortgage from the same bank, you might be able to get some of the fees waived while going to another bank will mean that appraisal fee, termite inspection fee, etc will have to be paid. But in either case, the prohibition against buying that Beemer will disappear; just don't take out that auto loan between the mortgage application and the closing on the regular mortgage as mhoran_psprep's buyer did!


sometimes we advise very old or incapacitated people to apply the refund to the next year as check writing from time to time & mailing may be a hassle for them.


"AFAIK, there are two kinds of taxes your web freelancing income may be subject to in Quebec: On the income taxes:  The net income you realize from your web freelancing activities would be considered taxable income.  Assuming you are not operating as an incorporated business, you would need to declare the freelancing income on both your federal and provincial tax returns.  You should be able to deduct certain costs related to your business – for instance, if you paid for software, hosting, domain name registration, etc.  That is, only the profit from your business would be subject to income tax.  With income and expenses arising from self-employment, you may want to use a professional to file your taxes. On the sales taxes: You may also need to charge federal GST and provincial QST (Quebec Sales Tax) on your services:  You must enroll and charge GST and QST once you exceed the ""small supplier"" revenue threshold of $30,000 measured over four consecutive quarters.  (You can still choose to enroll for GST/QST before you reach that amount, but over that amount enrollment becomes mandatory.  Some businesses enroll before the threshold is reached so they can claim input tax credits for tax paid on expenses, but then there's more paperwork – one reason to perhaps avoid enrolling until necessary.) In Quebec, the Ministère du Revenu du Québec administers both GST (on behalf of the federal government) as well as provincial QST.  Be sure to also check out their informative booklet, Should I Register with Revenu Quebec? (PDF).  See also General Information Concerning the QST and the GST/HST (PDF)."


I guess Bitcoin are not that popular yet and hence there are no specific regulations. If currently it gets debated, it would be treated more like a Pre-Paid card or your Paypal account. As you have already paid taxes on the $$ you used to buy the Bitcoins there is no tax obligation as long as you keep using it to buy something else. The other way to look at it is as a commodity. If you have purchased a commodity and it has appreciated in value in future you may be liable to pay tax on the appreciated value. Think of it as a if you bought a house with the $$ and sold it later.   Once more serious trade starts happening, the governments around the world would bring in regulations. Till then there is nothing to worry about.


The 20%+ returns you have observed in the mutual funds are not free money.  They are compensation for the risk associated with owning those funds.  Given the extraordinarily high returns you are seeing I would expect extremely high risk.  This means there is a good possibility of extreme losses at some point.  By putting a lot of money in those mutual funds you are taking a gamble that may or may not pay off. Assuming what your friend is paying you for rent is fair, you are not losing money on your house relative to the market.  You are earning less because you are invested in a less risky asset.  If you want a higher return, you should borrow some money (or sell your house) and invest in the market.  You may make more money that way. But if you do that, you will have a larger chance of losing a lot of money at some point.  That's the way risk works.  No one can promise a 20% return on a risky asset, they can only hint that it may do in the future what it did in the past. A reasonable approach to investment is to get invested in lots of different things: stocks, bonds, real estate.  If you are afraid of risk and willing to earn less, keep more money in safe assets.  If you are willing to take big risks in exchange for the possibility of high returns, move more assets into risky stuff.  If you want extreme returns and are willing to take extreme risk, borrow and use the money to invest in risky assets. As you look over investment options, remember that anything that pays high returns most likely has high risk as well.


Household debt as a percentage of disposable income rose from 68% in 1980 to a peak of 128% in 2007, prior to dropping to 112% by 2011.  The typical American family's income has fallen every year since 2007 by 2011 it had fallen back to 1997 levels.   So where is the money going to come from to pay off all this new debt?


"Supply and Demand, pure and simple! There are two basic forms of this - a change in the quantity demanded/supplied at any given price, and a true change in the amount of demand/supply itself. Please note that this can be distinct from the underlying change in the value of the company and/or its expected future cash flows, which are a function of both financial performance and future expectations. If more people want the stock that are willing to sell it at a given price at a given point in time, sellers will begin to offer the stocks at higher prices until the market is no longer willing to bear the new price, and vice versa. This will reduce the quantity of stocks demanded by buyers until the quantity demanded and the quantity supplied once again reach an equilibrium, at which point a transaction occurs. Because people are motivated to buy and sell for different reasons at different times, and because people have different opinions on a constant flow of new information, prices change frequently. This is one of the reasons why executives of a recent IPO don't typically sell all of their stock at once. In addition to legal restrictions and the message this would send to the market, if they flooded the market with additional quantities of stock supplied, all else being equal, since there is no corresponding increase in the quantity demanded, the price would drop significantly. Sometimes, the demand itself for a company's stock shifts. Unlike a simple change in price driven by quantity supplied versus quantity demanded, this is a more fundamental shift. For example, let's suppose that the current demand for rare earth metals is driven by their commercial applications in consumer electronics. Now if new devices are developed that no longer require these metals, the demand for them will fall, regardless of the actions of individual buyers and sellers in the market. Another example is when the ""rules of the game"" for an industry change dramatically. Markets are behavioral. In this sense prices are most directly driven by human behavior, which hopefully is based on well-informed opinions and facts. This is why sometimes the price keeps going up when financial performance decreases, and why sometimes it does not rise even while performance is improving. This is also why some companies' stock continues to rise even when they lose huge sums of money year after year. The key to understanding these scenarios is the opinions and expectations that buyers and sellers have of that information, which is expressed in their market behavior."


Yes, you can do what you are contemplating doing, and it works quite well. Just don't get the university's payroll office too riled by going in each June, July, August and September to adjust your payroll withholding! Do it at the end of the summer when perhaps most of your contract income for the year has already been received and you have a fairly good estimate for what your tax bill will be for the coming year. Don't forget to include Social Security and Medicare taxes (both employee's share as well as employer's share) on your contract income in estimating the tax due. The nice thing about paying estimated taxes via payroll deduction is that all that tax money can be counted as having been paid in four equal and timely quarterly payments of estimated tax, regardless of when the money was actually withheld from your university paycheck. You could (if you wanted to, and had a fat salary from the university, heh heh) have all the tax due on your contract income withheld from just your last paycheck of the year! But whether you increase the withholding in August or in December, do remember to change it back after the last paycheck of the year has been received so that next year's withholding starts out at a more mellow pace.


"There are two places to start, the spending side and the income side. Many (in the personal finance blogosphere) have pointed out that frugal has its limits. You can only live so cheaply, eat so little, turn the heat down so much.  Your income and your wife's income has no limit. Not to put this all in her lap, but why isn't she working? Between the two of you, there are hundreds of things you can consider doing that will generate a few hundred dollars a week extra income.  You said ""we can live fairly comfortably paycheck-to-paycheck and routinely put some money into savings,"" but you are still paying off debt, and don't have the emergency fund to handle the routine things that come around on a regular basis. The difference between breaking even, and making extra money, is the ability to fund that account. It's important to have a defined plan to pay the remaining debt, and build your fund in as short a time period as you can.  As Bren stated, you need to plan for the unexpected. I don't know what appliance will go this year or what day it will break, I just know something will happen and I have the funds to pay for it. The extra income is vital to a workable plan."


"From the IRS page on Estimated Taxes (emphasis added): Taxes must be paid as you earn or receive income during the year, either through withholding or estimated tax payments. If the amount of income tax withheld from your salary or pension is not enough, or if you receive income such as interest, dividends, alimony, self-employment income, capital gains, prizes and awards, you may have to make estimated tax payments. If you are in business for yourself, you generally need to make estimated tax payments. Estimated tax is used to pay not only income tax, but other taxes such as self-employment tax and alternative minimum tax. I think that is crystal clear that you're paying income tax as well as self-employment tax. To expand a bit, you seem to be confusing self-employment tax and estimated tax, which are not only two different things, but two different kinds of things.  One is a tax, and the other is just a means of paying your taxes. ""Self-employment tax"" refers to the Social Security and Medicare taxes that you must pay on your self-employment income.  This is an actual tax that you owe.  If you receive a W-2, half of it is ""invisibly"" paid by your employer, and half of it is paid by you in the form of visible deductions on your pay stub.  If you're self-employed, you have to pay all of it explicitly. ""Estimated tax"" does not refer to any actual tax levied on anyone.  A more pedantically correct phrasing would be ""estimated tax payment"".  Estimated taxes are just payments that you make to the IRS to pay tax you expect to owe.  Whether you have to make such payments depends on how much tax you owe and whether you've paid it by other means.  You may need to pay estimated tax even if you're not self-employed, although this would be unusual.  (It could happen, for instance, if you realized large capital gains over the year.)  You also may be self-employed but not need to pay estimated tax (if, for instance, you also have a W-2 job and you reduce your withholding allowances to have extra tax withheld). That said, if you earn significant income from self-employment, you'll likely have to make estimated tax payments.  These are prepayments of the income tax and Social Security/Medicare taxes you accrue based on your self-employment income. As Pete B. mentioned in his answer, a possible reason that your estiamtes are low is because some taxes have already been withheld from the paychecks you received so far during the year (while you were an employee).  These represent tax payments you've already made; you don't need to pay that money a second time, but you may need to make estimated tax payments for your income going forward."


"I assume you are filing US taxes because you are a US citizen, resident alien, or other ""US person"". If you have a total of $10,000 or more in assets in non-US accounts, you are required to file FinCEN Form 114, Report of Foreign Bank and Financial Accounts, also known as FBAR, to report those accounts.  See Comparison of Form 8938 and FBAR Requirements.  Note this refers to the total balance in the account (combined with any other accounts you may have); the amount you transferred this year is not relevant.  Also note that the FBAR is filed separately from your income tax return (it does not go to the IRS), though if you have over $50,000 in offshore assets you may also have to file IRS Form 8938. Simply reporting those accounts does not necessarily mean you will owe extra taxes.  Most US taxes are based on income, not assets. According to the page linked, the maximum penalty for a ""willful"" failure to report such accounts is a fine of $100,000 or 50% of the assets in question, whichever is greater, in addition to possible criminal sanctions. There may be other US filing requirements that I don't know about, so you may want to consult a tax professional.  I do not know anything about your filing requirements under Indian law."


"Do you not understand my example at all?  You are better off having an $8M open position (by not selling) than $6.67M in cash (by selling).  It's literally as simple as 8M > 6.67M.  And before someone argues that ""you will eventually have to sell the 8M open position, at which point it'll be worth only ~5M after taxes"" - no, you don't necessarily ""have"" to sell it. You can keep it forever and live off the dividends, or by borrowing against it, or you can pass it onto heirs in a tax-free or at least more tax efficient way, etc."


When your debt is forgiven, you have to consider the amount written off as an ordinary income item (with the exclusion of the debt originated from the purchase of primary home). If you're trying to write the debt off from your taxes - then it won't work. Even if you can expense the debt forgiveness, you will incur tax liability on your personal taxes side, and in addition you'll be out of cash in your business. So basically you'll end up paying it with after tax money, exactly the thing you're trying to avoid. In addition, you're dealing with related persons here, which means that the loss deduction might not be allowed (depends on the actual details of the transaction), so you might actually end up paying more taxes with this scheme that just paying off the loan directly (if your business pays taxes separately from your person). A loss on the sale or exchange of property between related persons is   not deductible. This applies to both direct and indirect transactions,   but not to distributions of property from a corporation in a complete   liquidation. For the list of related persons, see Related persons   next.


You can't directly contribute more. However, it seems that there is something you can do that can achieve a similar effect. You can withdraw your entire account (principal + earnings, though in your case that's less than the principal), and then contribute up to the $5500 contribution limit again. The end result is that you put in a net amount of $500, and the account ends up with $5500, which is what you want. The first step is a return of contributions made for the contribution year before the tax filing deadline for that year. This kind of withdrawal is not subject to tax, and counts as if you never made the contribution at all. Since you are considered to have never made a contribution, you still have $5500 that you can contribute before you hit the limit.


"It sounds good, but perhaps they've overlooked several things that would need to be addressed before anything like this could work well.  1) If there is a leak in the overall flow, such as a HFT hedge fund sucking money out of the markets at an enormous rate into a tax haven, such a system would just perpetuate the existing rise of the superwealthy entities. They still get richer without spending much in return.  2) As described they have only talked about one government, one nation, one monetary recycling system, as if nations are closed boxes. They are not. Money flows across borders with ease. Nations **compete** to maximise the amount of assets they hold within their borders at any given time. These can be fixed capital assets too. So nothing prevents the ""global equity investment"" they mention from starting to resemble all the powerful corporations concentrated in a single favoured nation over time. That would represent a lot of political power concentrated in ways that are not necessarily favourable to individual sovereign national legal systems elsewhere.  It is possible that this could mean that nations would compete to lower taxes to zero to attract corporations, thereby risking bankrupting governments unless the income from the global equity index compensated enough. At 6% it won't match current tax rates.  The second point also means that nations cannot unilaterally decide to implement this unless they have a guaranteed additional inflowing income from transnational activities that could compensate for excessive outflow."


Publication 17 is a start. From that pub -   I don't know what the stipend was for or whether is was tax free. So I can't say for sure, myself.


That sucks.  If BofA is taking responsibility for the insurance payment, then they should..., well, take responsibilty - full responsibility.  I hope these people get reimbursed fairly.  Didn't their insurance company contact them about the policy?  If not, I'd certainly be shopping for a new insurance company, and possibly I'd include them in a lawsuit.  The insurance company should be contacting the bank **and** their customer.  Mine sent me a couple of letters, saying a copy was sent to the bank (although I think they still had the original bank, not BofA).  But BofA had recently paid the premium, so they ignored it - basically dropped the ball.  When I got the 2nd letter from the insurance company, I called again, and the guy at BofA got right on the ball, checked it out, and fixed it very quickly, then helped me cancel my escrow so I could handle it directly in the future.  Perhaps I was lucky to get someone who cared about their job enough to follow through.  But I also jumped in to make sure it got taken care of, so if he hadn't, I would have been bothering them until they did.


Reducing your income by 20k is guaranteed to lower your tax bill by less than 20k (because there are no tax rates greater than 100%).  Your goal shouldn't be to minimize taxes but to maximize total net income.


Yes. If I own a call, an American call option can be exercised at my wish. A European call can only be exercised at expiration, by the way.  Your broker doesn't give you anything but a current quote for a given strike price. There are a number of good option related questions here. A bit of searching and reading will help you understand the process.


How you use the metric is super important.   Because it subtracts cash, it does not represent 'value'.  It represents the ongoing financing that will be necessary if both the equity plus debt is bought by one person, who then pays himself a dividend with that free cash.   So if you are Private Equity, this measures your net investment at t=0.5, not the price you pay at t=0.  If you are a retail investor, who a) won't be buying the debt, b) won't have any control over things like tax jurisdictions, c) won't be receiving any cash dividend, etc etc .... the metric is pointless.


You pay it this tax year.  Whether that's now due to W-2 withholding, or later with your 1040 next year, or with your 1040-ES all depends on your particular situation.


If these are children that may be employed, in a few years, it may well be worth walking them through some basics of the deductions around employment, some basic taxes, uses of banks, and give them enough of a basis in how the economy of the world works.  For example, if you get a job and get paid $10/hour, that may sound good but how much do various things eat at that so your take-home pay may be much lower?  While this does presume that the kids will get jobs somewhere along the way and have to deal with this, it is worth making this part of the education system on some level rather than shocking them otherwise. Rather than focusing on calculations, I'd be more tempted to consider various scenarios like how do you use a bank, what makes insurance worth having(Life, health, car, and any others may be worth teaching on some level), and how does the government and taxes fit into things. While I may be swinging more for the practical, it is worth considering if these kids will be away in college or university in a few years, how will they handle being away from the parents that may supply the money to meet all the financial needs?


Don't forget the risk of not finding tenants and having your property be empty. Or having bad tenants who destroy the place. Or just spending all your time  (because time is money) on general upkeep/maintenance (or, if you subcontract that out, making sure a decent job was done)


if you have a work-sponsored retirement plan  A 401k plan counts as a work-sponsored retirement plan. If you are a highly compensated employee (this is $115,000 for 2012), even your 401k contributions are limited.  Given that, is there any difference at all between having a traditional IRA and a normal, taxable (non-retirement) investment account?  You should consider a Roth IRA if you are making too much for a traditional IRA. When you make even more, then you can't contribute to a Roth, but can only contribute post-tax money to a traditional IRA.  Use Form 8606 to keep track of non-deductable contributions over the years. Publication 590 is the official IRS explanation of what is deductable or not.


That doesn't sound like dollar cost averaging. That sounds like a form of day trading. Dollar cost averaging is how most people add money to their 401K, or how they add money to some IRA accounts. You are proposing a form of day trading.


"Why is nobody providing a service that is basically: Give me your money. I will invest it as I see fit. A year later I will return the capital to you, plus half of any profits or losses. This means that if your capital under my management ends up turning a profit, I will keep half of those profits, but if I lose you money, I will cover half those losses. Because they can already make lots of money by just charging people an unconditional fee and not having to cover their losses.  Why take on the risk of having to cover your losses when they can just take a percentage of your assets and stick you with any losses? In addition, as Charles E. Grant mentioned in a comment on another answer, if a person has both sufficient capital to cover your losses and sufficient confidence in their investing acumen that they don't think they will have to do so, they have little need for your money.  Rather than take half the gains on your money, they will invest their own money (they must have some, or else they can't guarantee your losses) and take all the gains. Your scheme would only be plausible as a partnership between a person with investing skills but little capital, and another person with ample capital and less skill.  In that case, the investment whiz could genuinely benefit from access to the bankroller's capital.  As quid noted in chat, this does exist in the form of ad-hoc private equity arrangements between individuals.  However, such a setup is unlikely to exist as an ""off-the-shelf product"" marketed at retail investors, because financial institutions have more capital than any individual retail investor -- and, more generally, anyone with sufficient skill to pull this off will (at least in theory) quickly accumulate enough capital that they can negotiate a less risky payment plan."


If you are going to be a long term investor you are only going to buy and hold. You will not sell. Thus future price is not relevant. Only dividend payout is relevant. Divide the dividend by the price you paid to get the yeald.  Edit:  once again the sitesite will not allow me to add a comment, so I have to edit a previous post...  What you call 'active investor' is not really investing, it is speculating. When you try to 'buy low, sell high' you have, at best, a 50-50 chance of picking the low. You then pay a commission on that buy. After you buy then you have a 50-50 chance, at best, of picking the high. You also have to pay the commission on the sell. 50% times 50% is 25%.So you have, at best a 25% chance of buying low and selling high. You are churning your account which makes money for the broker whether you make money or not. If, instead, you buy and hold a dividend paying security then the going price is irrelevant. You paid for the security once and do not have to pay for it again. Meanwhile the dividends roll in forever. 'Buy low, sell high' is a fools game. Warren Buffet does not do it, he buys and holds.


I'm guessing you're talking about options given to employees. The company can issue stock options at whatever strike price it wants. The difference between the strike price and the actual market value is considered income to the employee. You can get the options at $0 strike just as well (although companies generally just give RSUs instead in this case).


"After learning about things that happened in the ""flash crash"" I always use limit orders. In an extremely rare instance if you place a market order when there is a some glitch, for example some large trader adds a zero at the end of their volume, you could get an awful price.  If I want to buy at the market price, I just set the limit about 1% above the market price. If I want to sell, I set the limit 1% below the market price. I should point out that your trade is not executed at the limit price. If your limit price on a buy order is higher than the lowest offer, you still get filled at the lowest offer. If before your order is submitted someone fills all offers up to your limit price, you will get your limit price. If someone, perhaps by accident, fills all orders up to twice your limit price, you won't end up making the purchase. I have executed many purchases this way and never been filled at my limit price."


Only if (or to put it even more bluntly, when) they default. If your friend / brother / daughter / whoever needs a cosigner on a loan, it means that people whose job it is to figure out whether or not that loan is a good idea have decided that it isn't.  By co-signing, you're saying that you think you know better than the professionals. If / when the borrower defaults, the lender won't pursue them for the loan if you can pay it.  You're just as responsible for the loan payments as the original borrower, and given that you were a useful co-signer, probably much more likely to be able to come up with the money.  The lender has no reason to go after the original borrower, and won't.  If you can't pay, the lender comes after both of you. To put it another way:  Don't think of cosigning as helping them get a loan.  Think of it as taking out a loan and re-loaning it to them.


"You may want, or at least be thinking of, the annualized method described in Pub 505 http://www.irs.gov/publications/p505/ch02.html#en_US_2015_publink1000194669 (also downloadable in PDF) and referred to in Why are estimated taxes due ""early"" for the 2nd and 3rd quarters only? . This doesn't prorate your payments as such; instead you use your income and deductions etc for each of the 3,2,3,4-month ""quarters"" to compute a prorated tax for the partial year, and pay the excess over the amount already paid. If your income etc amounts are (nearly) the same each month, then this computation will result in payments that are 3,2,3,4/12ths of 90% of your whole-year tax, but not if your amounts vary over the year. If you do use this method (and benefit from it) you MUST file form 2210 schedule AI with your return next filing season to demonstrate that your quarterly computations, and payments, met the requirements. You need to keep good per-period (or per-month) records of all tax-relevant amounts, and don't even try to do this form by hand, it'll drive you nuts; use software or a professional preparer (who also uses software), but I'd expect someone in your situation probably needs to do one of those anyway. But partnership puts a wrinkle on this. As a partner, your taxable income and expense is not necessarily the cash you receive or pay; it is your allocated share of the partnership's income and expenses, whether or not they are distributed to you. A partnership to operate a business (like lawyers, as opposed to an investment partnership) probably distributes the allocated amounts, at least approximately, rather than holding them in the partnership; I expect this is your year-end draw (technically a draw can be any allowed amount, not necessarily the allocated amount). In other words, your husband does earn this money during the year, he just receives it at the end. If the year-end distribution (or allocation if different) is significant (say more than 5% of your total income) and the partnership is not tracking and reporting these amounts (promptly!) for the IRS quarters -- and I suspect that's what they were telling you ""affects other partners"" -- you won't have the data to correctly compute your ""quarterly"" taxes, and may thus subject yourself to penalty for not timely paying enough. If the amount is reasonably predictable you can probably get away with using a conservative (high-side) guess to compute your payments, and then divide the actual full-year amounts on your K-1 over 12 months for 2210-AI; this won't be exactly correct, but unless the partnership business is highly seasonal or volatile it will be close enough the IRS won't waste its time on you. PS- the ""quarters"" are much closer to 13,9,13,17 weeks. But it's months that matter."


As always with investments, it depends on your risk adversity. I don't want to repeat the content of hundreds of recommendations here, so just the nutshell: (For qualified investments,) the more risk you are willing to take, the more returns you'll get. The upper end is the mutual funds and share market, where you have long-term expectations of 8 - 10 % (and corresponding risks of maybe +/- 50% per year), the lower end is a CD, where you can expect little to no interest, corresponding to little to no risk. Investing in shares/funds is not 'better' than investing in CDs, it is different. Not everybody likes financial roller-coasters, and some people mainly consider the high risk, which gives them sleepless nights; while others just consider the expected high long-term gains as all that counts. Find out what your personal risk adversity is, and then pick accordingly.


There are too many nuances to the question asked to explore fully but here are a few points to keep in mind. If you are a cash-basis taxpayer (most individuals are), then you are not required to pay taxes on the money that has been billed but not received as yet.  If you operate on an accrual basis, then the income accrues to you the day you perform the service and not on the day you bill the client. You can make four equal payments of estimated tax on the due dates, and if these (together with any income tax withholding from wage-paying jobs) are at least 90% of your tax liability for that year, then you owe no penalties for underpayment of tax regardless of how your income varied over the year. If your income does vary considerably over the year (even for people who only have wages but who invest in mutual funds, the income can  vary quite a bit since mutual funds typically declare dividends and capital gains in December), then you can pay different amounts in each quarterly installment of estimated tax. This is called the annualization method (a part of Form 2210 that is best avoided unless you really need to use it).  Your annualized income for the payment due on June 15 is 2.4 = 12/5 times your taxable income through May 31. Thus, on Form 2210, you are allowed to assume that your average monthly taxable income  through May 31 will continue for the rest of the year. You then compute the tax due on that annualized income and you are supposed to have paid at least 45% of that amount by June 15. Similarly for September 15 for which you look at income through August 31, you use a multiplier of 1.5 = 12/8 and need to pay 67.5% of the tax on the annualized income, and so on.  If you miscalculate these numbers and pay too little tax in any installment, then you owe penalties for that quarter.  Most people find that guesstimating the tax due for the entire year and paying it in equal installments is simpler than keeping track of nuances of the annualized method. Even simpler is to pay 100% of last year's tax in four equal installments (110% for high earners) and then no penalty is due at all. If your business is really taking off and your income is going to be substantially higher in one year, then this 100%/110% of last year's tax deal could allow you to postpone a significant chunk of your tax bill till April 15.


As Pete B says, something is not adding up. If your story is correct you should still have the legitimate check from your employer. If that is the case, your solution is simple. You    If you do not have the good cheque then you are in deep trouble - because then either you didn't have it (in which case you have been lying to us) or you cashed it and spent the money (which means you knew that you had given the bad cheque to the liquor store). Either of those mean you have been deliberately perpetrating a fraud. As for the consequences - be aware that passing a bad cheque is a crime, and if the store reports it as such, it is not unlikely that the police will want to investigate. If they decide you did this deliberately you could be arrested, and you might well end up in jail.  We will do you the favour of assuming that you still have the good cheque, and option 1 is possible.