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[ { "docid": "226201", "title": "", "text": "How about opening a Coffee shop section in the bookshop to generate some cash flow per month to offset some of the expenses ? Off course success of this venture will depend on where the location of shop is, how big it is and whether people are coffee enthusiast in that region. Since the rent/mortgage ( the major expense) is already taken care of all you have to do is invest in one time expenses for : Interior (hip these days - rustic expose brick walls, nostalgic filament light, chalk board menu, etc ) Seating (big communal table, lounge couch, some regular table chairs,some out door seats if weather is good) ...and the ugly licencing and approval. Throw in some social media marketing, SEO, yelp,urbanspoon, tripadvisor, etc If the bookstore is old, I am assuming it might have the old world charm & character which could attract lot of coffee enthusiast. The unique and competitive edge of this coffee shop could be its historic charm , which no other competitor can achieve. Would definitely beat the staryuks. Even if no one shows up , only recurring additional expense will be barrista wages. The interior , seating and coffee m/c costs can be minimized by savvily shopping stuff on community sites like craigslist, gumtree etc. I beleive if you are in US , everything could be set up under 6K. Later on premade food items like bananacake, raw cacao balls, toasted panini sandwich etc. can be added. If one has 3 key ingredients in food industry - Location, Vibe and taste, then there is high probability that they will succeed. At the same time one should be cognizant that 95 % of business fail in first 3 years and therefore they should have an exit plan. Unfortunately if your business does not work, then you exit cost would be just getting rid of the equipment & furniture. Just to put in perspective, some Dunkin Donut shops that I was researching in North East were clearing between 1/2 to 1 mil per year. As it is the current damage per month is 10k, if this business offsets even some of the damage it would be worth while. So the cost of keeping the pride of 91 yo dad can potentially reduce from 10k to 2-3 k. Who knows if it takes off , one day it could be a good sustainable business and might turn into a win-win situation for you and your father. I have made lot of assumption without knowing the facts like- you are located in US, you have risk appetite, bookshop is not in industrial area but some prime retail area like this : ... etc. While I am at it { giving unsolicited advise that is}.. Currently the books in the bookshop are very old books that it published by itself. Nobody is interested in reading these books. Due to his previous excitement of getting editors and publishing books, there are thousands of books that need to be kept in storerooms. They don’t move because people hardly buy any books from this bookshop. To help the old published book sales why not convert the old books to ebooks using providers like 'Blueleaf-book-scanning' and publish the books on amazon kindle,itunes & play store. The books will be available online forever and they might get exposure to tons of book enthusiast around the world. I heard at one of our client's MDS ( mass digitization system ) project , they had in-house robot scanning machine like Treventus Pardon me if none of the above gibberish applies to your situation , but hpefully SE community might have some fun reading this for kicks and giggles . Cheers and good luck. Source: I am US person in Australia, operated restaurant / bar in US , visited 100's of coffee shops, consulting for living, ...and a dreamer { :-) hard not to imagine from the short post}." } ]

[ { "docid": "515440", "title": "", "text": "\"My father imparted this advice to me when I was a teenager, and it hasn't failed me yet. > Pay yourself first What this means is that the first \"\"bill\"\" you pay should always be your savings. Preferably in a way that automatically comes out of your paycheck or account without requiring you to take an active step to make it happen. I save a ton of money, but I am no more disciplined than anyone else. I just realized that over the years of progressing in my career that I gradually got higher and higher salaries, yet never had a substantial increase in the money I had leftover in my bank at the end of the month despite the fact that I make about 8x the money I used to live reasonably comfortably on. Therein is the point, we spend whatever money we see, so you almost have to hide it from yourself. First, participate to the fullest in your company's 401k if they offer it. After a while you will adjust naturally to the net take home pay and won't miss the savings you are accumulating. Absent that, or in addition to that, set up a separate bank or investment account and arrange an automatic transfer from your checking account every month. Then set up automatic investing in CD's or some other less-liquid-than-cash investment so you it is just enough hassle to get at the money that you won't do it on a whim. It sounds too simple, but it works.\"" }, { "docid": "257077", "title": "", "text": "Maybe if it required immense talent or skill it would. All you really need to do is be able to handle people for several hours a day, which is a prerequisite to any job. Instead you get a bunch of salty, usually snotty individuals with zero marketable skills who couldn't get a job elsewhere or are lazy and know they can slack off like shit and not get fired working there. My best friend and roommate was one of those people and he worked there a year and barely got the minimum raises. Everyday he bitched about how dumb everyone he worked with was despite the fact he's one of the dumbest people I know. He thought the world owed him something and he didn't care how he got it. That was about 60% of the people there that I knew. On the other hand, the other 40% of people I knew working there were still young kids, but didn't think every person with a somewhat dumb question was an idiot. They showed up on time, got their work done, and were pleasant to be around despite having a shitty job. They were the same age and from the same background as my friend, but they didn't come to work with a chip on their shoulder. After several months most of them had been promoted to higher positions or even assistant managers, they were making considerably more money and had more responsibility. They could not be replaced the next day by someone with no training or experience and were worth even more to the company than their time a dozen former peers who acted like assholes. If you let your starting salary or position dictate your attitude toward a job, you're never going to get anywhere in life. The world doesn't owe a huge salary and benefits. I'm hardly arguing for big companies that can and do treat employees badly, but having seen what that sometimes consists of, I don't tend to get my panties in a bunch over it anymore. I've worked my fair share of shit jobs in the beating sun and sweltering heat for shit money, and I didn't treat people like shit because of it. Hell I actually really enjoyed one of them. The difference is I never thought the world owed me something because two people had the idea to fuck one night." }, { "docid": "439003", "title": "", "text": "If your parents can afford to shell out $1,250 a month for 5 years, they would pretty much have the debt paid off, provided the credit card companies don't start playing games with rates. If that payment is too high, maybe you could kick in $5k every few months to knock the principal down. If they think the business can keep puttering along without losing more money, that may be the way to go. Five years is long enough that the business or property may have recovered some value. Another option, depending on the value of the home, could be a reverse mortgage. I don't know how the economy has affected those programs, but that might be a good option to get the debt cleared away. My grandfather was in a similar position back in the 70's. He owned taverns in NYC that catered to an industrial clientele... the place was booming in the 60s and my grandfather and his brother owned 4 locations at one point. But the death of his brother, post-Vietnam malaise, suburban exodus and shutting of industry really hurt the business, and he ended up selling out his last tavern in 1979 -- which was a dark hour in NYC history and real estate values. A few years later, that building sold for a tremendous amount of money... I believe 10x more. I don't know whether there was a way for his business to survive for another 5-7 years, as I was too young to remember. But I do remember my grandfather (and my father to this day) being melancholy about the whole affair. It's hard to have to work part-time in your 60's and be constantly reminded that your family business -- and to some degree a part of your life -- ended in failure. The stress of keeping things afloat when you're broke is tough. But there's also a mental reward from getting through a tough situation on your own. Good luck!" }, { "docid": "40729", "title": "", "text": "Goddamit, Benzinga and their clickbait headlines. OK, Rant over. The bit about having zero hobbies unrelated to work (1) sounds like classic Wall Street, nothing new there and (2) seems like a great way for most of us non-superheroes to burn out. I read fiction, play with my kids, work out, etc. More sustainable for a great many of us I would think." }, { "docid": "386720", "title": "", "text": "You remind me a lot of myself as I was thinking about marriage. Luckily for me, my wife was much smarter about all this than I was. Hopefully, I can pass along some of her wisdom. Both of us feel very strongly about being financially independent and if possible we both don't want to take money from each other. In marriage, there is no more financial independence. Do not think in those terms. Life can throw so many curve balls that you will regret it. Imagine sitting down with your new bride and running through the math. She is to contribute $X to the family each month and you are to contribute $Y. Then next thing you know, 6 months later, she has cancer and has to undergo expensive and debilitating treatment. There is no way she can contribute her $X anymore. You tell her that is okay and that you understand, but the pressure weighs down on her every day because she feels like she is not meeting your expectations. Or alternatively, everything goes great with your $X, $Y plan. A few years down the road your wife is pregnant, so you revisit the plan, readjust, etc. Everything seems great. When your child is born, however, the baby has a severe physical or mental handicap. You and your wife decide that she will quit her job to raise your beautiful child. But, the whole time, in the back of her mind she can't get out of her head that she is no longer financially independent and not living up to your expectations. These stresses are not what you want in your marriage. Here is what we do in my family. Hopefully, some of this will be helpful to you. Every year my wife and I sit down and determine what our financial goals are for the year. How much do we want to be putting in retirement? How much do we want to give to charity? Do we want to take any family vacations? We set goals together on what we want to achieve with our money. There is no my money or her money, just ours. Doesn't matter where it comes from. At the beginning of every month, we create a budget in a spreadsheet. It has categories like (food, mortgage or rent, transportation, clothing, utilities) and we put down how much we expect to spend on each of those. It also has categories for entertainment, retirement, charity, cell phones, internet, and so on. Again, we put down how much we expect to spend on each of those. In the spreadsheet, we also track how much income we expect that month and our totals (income minus expenses). If that value is positive, we determine what to do with the remainder. Maybe we save some for a rainy day or for car repairs. Maybe we treat ourselves to an extra fancy dinner. The point is, every dollar should be accounted for. If she wants to go to dinner with some friends, we put that in the budget. If I want a new video game, we put that in the budget. Once a week, we take all our receipts and tally up where we spent our money. We then see how we are doing on our budget. Maybe we were a little high in one category and lower than expected in another. We adjust. We are flexible. But, we go over our finances often to make sure we are achieving our goals. Some specific goals I'd recommend that the two of you consider in your first such yearly meeting: You get out of life what you put into it, and you will get out of your finances what the two of you put into them. By being on the same page, your marriage will be much happier. Money/finances are one of the top causes of divorce. If you two are working together on this, you are much more likely to succeed." }, { "docid": "297288", "title": "", "text": "\"Thirty thousand in credit card debt is a \"\"big elephant to eat\"\" so to speak. But you do it by taking a bite at a time. One positive is that you do not want to borrow from your 401K. Doing so is a horrible idea. The first question you have to ask yourself and understand, is how you accumulated 30K in credit card debt in the first place? Most people get there by running up a relatively small amount, say 5K, and playing the zero transfer game a few times. Then add in a late payment, and a negative event or two (like the car breaking down or a trip to the emergency room) and poof a large amount of credit card debt. Obviously, I have no idea if this is how you got there, and providing some insight might help. Also, your age, approximate income, and other debts might also help provide more insight. I assume you are still working and under age 59.5 as you are talking about borrowing from your 401K. Where I come from is that my wife (then girlfriend) found ourselves under stifling debt a few years ago. When we married, we became very intentional and focused on ridding ourselves of debt and now sit completely debt free (including the house). During our debt payoff time, we lived off of less than 25% of our salary. We both took extra jobs when we were able. Intensity was our key. If I were you, I would not refi the house. There are costs associated with this and why would you put more debt on your home? I might cash out the annuity provided that there are no negative tax consequences and depending on how much you can get for it. Numbers are the key here. However, I feel like doing so will not retire this debt. The first thing you need to do is get on a written budget. A game plan for spending and stick to it. If you are married, your spouse has to be part of this process. The budget has to be fresh each month, and each month you and your wife should meet. To deviate from the budget, you will also need to have a meeting. My wife and I still do this despite being debt free and enjoying very healthy incomes. Secondly, it is about cutting expenses. Cable: off. No eating out or vacations. Cut back on cell phone plans, only basic clothing. Gift giving is of the $5 variety and only for those very close to you. Forget lattes, etc. Depending on your income I would cut 401K contributions to zero or only up to the company match (if your household income is above 150K/year). Third, it is about earning more. Ebay, deliver pizzas, cut grass, overtime, whatever. All extra dollars go to credit card balance reduction. At a minimum, you should find an extra $1000/month; however, I would shoot for 2K. If you can find 2K, you will be done with this in 13 months. I know the math doesn't work out for that, but once you get momentum, you find more. How good will it feel to be out from under this oppression next March? I know you can do this without cashing in the annuity or refinancing. Do you believe it?\"" }, { "docid": "509266", "title": "", "text": "I just graduated from college and I am already planning my retirement. ... in terms of money sitting in my bank account post retirement, assuming Ii have $250,000 what is the highest interest that I can earn with it? Assuming you are 22, and will retire in 45 years at age 67. There is no way to predict interest rates. When I was 22 and just out of college I started putting money into a bank account to save for a down payment. The rate for a savings account was 6%. That means that every month I made 1/2 of one percent. Today that same credit union offers a money maker account with a minimum balance of $100,000 that pays 0.25% for the year. What I made in a month would take two years to make today. Keep in mind we also can't estimate your pay in the last year before retirement, or the inflation rate for the next 45 years, or the mortgage rate, or the availability of Social Security, or the returns of the S&P for 45 years. It is great you are starting to think about this today. But you will have to keep adjusting parts of your plan as the years go by: You may have to factor in children, your medical situation... Even if the interest rates recover you may not want to put all your post retirement money in the bank. Most people can't sustain the required flow of money for their 30 years of retirement from savings accounts. As for today. FDIC (or similar accounts from credit unions) will not have rates approaching 3%. It can't even approach that 3% rate via multi-year CDs. My credit union has a 6 year CD for almost 2%. If the goal of the money is safety then don't expect to find those high rates now. Some institutions may offer high rates without that FDIC protection, but that is risky." }, { "docid": "310871", "title": "", "text": "I have this exact same issue. Event the dollar amounts are close. Here is how I am looking at the problem. Option 1: Walk away. Goodbye credit for 7+ years. Luckily I can operate in cash with the extra $800 per month, but should I have a non medical emergency I might be SOL. With a family I am not sure I am willing to risk it. What if my car dies the month after I quit paying and the bank chooses to foreclose? What if my wife or I lose our job and we have no credit to live? Option 2: Short sale. Good if I can let it happen. I might or might not be on the hook for the balance depending on the state. If I am on the hook, okay, suck but I could live. If I am not on the hook, it is going to hurt my credit the same as foreclosure. It isn't easy, you need an experienced real estate agent and a willing bank. Option 3: Keep paying. I am going for this. At the moment I can still afford the house even though it is at the expense of some luxuries in my live. (Cable TV, driving to work, a new computer). I am wagering the market fixes itself in the next several years. Should the S hit the fan in most any manner, the mortgage is the first thing I stop paying. I don't know what other options I have. I can't re-fi; too upside down. I can't sell; the house isn't worth the mortgage (and I don't have the cash for the balance). I can't walk away; the credit hit wouldn't be worth the monthly money gain. I have no emotions about the house. I am in a real bad investment and getting out now seems like a good idea, but I am going to guess that having the house 10 years from now is better than not. I don't care about the bank at all, nor do I feel I owe them the money because I took the loan. They assumed risk loaning me the money in the first place. The minute it gets worse for me than for the bank; I will stop paying. Summary Not much to do without a serious consequence. I would suggest holding out for the very long term if you feel you can. The best way to minimize the bad investment is to ride it out and pray it gets better. I am thinking I am a landlord for the next 10 years." }, { "docid": "212589", "title": "", "text": "One point that I don't see covered in the other answers yet: How does this affect the months that have 5 weeks. Do we actually lose two weeks a year? I get paid every two weeks, and pay day is always a Friday. Some months, I get paid 3 times - which is always great. If you live within your means, it's like an extra paycheck. All other months, I get paid two times. How many months a year do I get paid 3 times? 2. It will always be two, because there are 12 months. If you get paid twice a month, that's 24 pay checks, which is 2 shy of 26 pay checks - what we would expect if we were paid every two weeks. That means those 2 extra pay checks need to fall somewhere, and they will be on the months where your pay day is hit 5 times. For example, in 2014, there are 4 months with 5 Fridays: Jan May Aug Oct I got paid the second Friday of January, so I only got 2 checks in January. I will be paid on the first Friday of May, which means I will get 3 checks in May. My other triple-check month this year is October, so of course I am only going to be paid twice in August." }, { "docid": "580168", "title": "", "text": "\"Trying to figure out how much money you have available each day sounds like you're making this more complicated than it needs to be. Unless you're extremely tight and you're trying to squeeze by day by day, asking \"\"do I have enough cash to buy food for today?\"\" and so on, you're doing too much work. Here's what I do. I make a list of all my bills. Some are a fixed amount every month, like the mortgage and insurance premiums. Others are variable, like electric and heating bills, but still pretty predictable. Most bills are monthly, but I have a few that come less frequently, like water bills in my area come every 3 months and I have to pay property taxes twice a year. For these you have to calculate how much they cost each month. Like for the water bill, it's once every 3 months so I divide a typical bill by 3. Always round up or estimate a little high to be safe. Groceries are a little tricky because I don't buy groceries on any regular schedule, and sometimes I buy a whole bunch at once and other times just a few things. When groceries were a bigger share of my income, I kept track of what I spent for a couple of months to figure out an average per month. (Today I'm a little richer and I just think of groceries as coming from my spending money.) I allocate a percentage of my income for contributions to church and charities and count this just like bills. It's a good idea to put aside something for savings and/or paying down any outstanding loans every month. Then I add these up to say okay, here's how much I need each month to pay the bills. Subtract that from my monthly income and that's what I have for spending money. I get paid twice a month so I generally pay bills when I get paid. For most bills the due date is far enough ahead that I can wait the maximum half a month to pay it. (Worst case the bill comes the day after I pay the bills from this paycheck.) Then I keep enough money in my checking account to, (a) Cover any bills until the next paycheck and allow for the particularly large bills; and (b) provide some cushion in case I make a mistake -- forget to record a check or make an arithmetic error or whatever; and (c) provide some cushion for short-term unexpected expenses. To be safe, (a) should be the total of your bills for a month, or as close to that as you can manage. (b) should be a couple of hundred dollars if you can manage it, more if you make a lot of mistakes. If you've calculated your expenses properly and only spend the difference, keeping enough money in the bank should fall out naturally. I think it's a lot easier to try to manage your money on a monthly basis than on a daily basis. Most of us don't spend money every day, and we spend wildly different amounts from day to day. Most days I probably spend zero, but then one day I'll buy a new TV or computer and spend hundreds. Update in response to question What I do in real life is this: To calculate my available cash to spend, I simply take the balance in my checking account -- assuming that all checks and electronic payments have cleared. My mortgage is deducted from my checking every month so I post that to my checking a month in advance. I pay a lot of things with automatic charges to a credit card these days, so my credit card bills are large and can't be ignored. So subtract my credit card balances. Subtract my reserve amount. What's left is how much I can afford to spend. So for example: Say I look at the balance in my checkbook today and it's, say, $3000. That's the balance after any checks and other transactions have cleared, and after subtracting my next mortgage payment. Then I subtract what I owe on credit cards. Let's say that was $1,200. So that leaves $1,800. I try to keep a reserve of $1,500. That's plenty to pay my routine monthly bills and leave a healthy reserve. So subtract another $1,500 leaves $300. That's how much I can spend. I could keep track of this with a spreadsheet or a database but what would that gain? The amount in my checking account is actual money. Any spreadsheet could accumulate errors and get farther and farther from accurate values. I use a spreadsheet to figure out how much spending money I should have each month, but that's just to use as a guideline. If it came to, say, $100, I wouldn't make grandiose plans about buying a new Mercedes. If it came to $5,000 a month than buying a fancy new car might be realistic. It also tells me how much I can spend without having to carefully check balances and add it up. These days I have a fair amount of spending money so when, for example, I recently decided I wanted to buy some software that cost $100 I just bought it with barely a second thought. When my spending money was more like $100 a month, lunch at a fast food place was a big event that I planned weeks in advance. (Obviously, I hope, don't get stupid about \"\"small amounts\"\". If you can easily afford $100 for an impulse purchase, that doesn't mean that you can afford $100 five times a day every day.) Two caveats: 1. It helps to have a limited number of credit cards so you can keep the balances under control. I have two credit cards I use for almost everything, so I only have two balances to keep track of. I used to have more and it got confusing, it was easy to lose track of how much I really owed, which is a set up for getting in trouble.\"" }, { "docid": "429375", "title": "", "text": "Well I ship and receive so much through FedEx, USPS and UPS all the drivers in my area know me and they each have intensive notes in the system regarding how to deliver my packages so that's not a problem I have. If they just left packages outside I would lose thousands of dollars a day in stolen merchandise and supplies." }, { "docid": "4044", "title": "", "text": "Just to offer another alternative, consider Certificates of Deposit (CDs) at an FDIC insured bank or credit union for small or short-term investments. If you don't need access to the money, as stated, and are not willing to take much risk, you could put money into a number of CDs instead of investing it in stocks, or just letting it sit in a regular savings/checking account. You are essentially lending money to the bank for a guaranteed length of time (anywhere from 3 to 60 months), and therefore they can give you a better rate of return than a savings account (which is basically lending it to them with the condition that you could ask for it all back at any time). Your rate of return in CDs is lower a typical stock investment, but carries no risk at all. CD rates typically increase with the length of the CD. For example, my credit union currently offers a 2.3% APY on a 5-year CD, but only 0.75% for 12 month CDs, and a mere 0.1% APY on regular savings/checking accounts. Putting your full $10K deposit into one or more CDs would yield $230 a year instead of a mere $10 in their savings account. If you go this route with some or all of your principal, note that withdrawing the money from a CD before the end of the deposit term will mean forfeiting the interest earned. Some banks may let you withdraw just a portion of a CD, but typically not. Work around this by splitting your funds into multiple CDs, and possibly different term lengths as well, to give you more flexibility in accessing the funds. Personally, I have a rolling emergency fund (~6 months living expenses, separate from all investments and day-to-day income/expenses) split evenly among 5 CDs, each with a 5-year deposit term (for the highest rate) with evenly staggered maturity dates. In any given year, I could close one of these CDs to cover an emergency and lose only a few months of interest on just 20% of my emergency fund, instead of several years interest on all of it. If I needed more funds, I could withdraw more of the CDs as needed, in order of youngest deposit age to minimize the interest loss - although that loss would probably be the least of my worries by then, if I'm dipping deeply into these funds I'll be needing them pretty badly. Initially I created the CDs with a very small amount and differing term lengths (1 year increments from 1-5 years) and then as each matured, I rolled it back into a 5 year CD. Now every year when one matures, I add a little more principal (to account for increased living expenses), and roll everything back in for another 5 years. Minimal thought and effort, no risk, much higher return than savings, fairly liquid (accessible) in an emergency, and great peace of mind. Plus it ensures I don't blow the money on something else, and that I have something to fall back on if all my other investments completely tanked, or I had massive medical bills, or lost my job, etc." }, { "docid": "9035", "title": "", "text": "I feel like the new mlm schemes are 'pay a thousand dollars for my blue print which will help you develop the business of your dreams and earn 100k a month!' A lady contacted me about training because she couldn't afford one of those 'courses'. And I was like a) I have ten years experience in this I did not decide to do it overnight and b) it's high pressure and stressful as f." }, { "docid": "296354", "title": "", "text": "We've all seen Reddit do some amazing things. Is there a place that this can be cross-posted to? (I'm new, and using my phone). Somewhere that will get a little more front page attention than r/business I'm thinking get Florida residents to know about this. Reddit has changed the votes of politicians, changed the minds of large companies (go daddy), and raised hundreds of thousands of dollars for pet causes out of sympathy. Surely we can help these folks. How hard can it be to get a small insurance company to lose its reputation and more importantly, a vast majority of its customers. If you didn't read the whole article, read it. If you're not pissed, I'd be surprised. Let's do it for what's right, for the little guy, for books > insurance companies. Help this family maintain what's theirs. Upvote, x-post, share, and stop this injustice. Nothing is impossible." }, { "docid": "303718", "title": "", "text": "I have several as well, (acquired the same way as you) and I am happy with the idea. They are very stable and that is the reason they pay so little. I don't think you can get a low risk and medium (or high) return. The interest does reset every six months so you do get a bit of the market, should the fed set interest rates higher, you bonds will eventually reflect that. Bonds and Certificates of Deposit are just one element of your investment portfolio. Put the money you can't lose into bonds, the money you can into higher risk stocks. Bonds are great from our grandparent's perspective because they are NOT going to lose value. (My grandparents were depression era folks who wanted that stability) They are trivial to give as gifts. Most other investment forms require a heavy bit more of legal work I would think." }, { "docid": "59817", "title": "", "text": "I don't get why someone in his situation doesn't just hire a small team of financial planners, ask them to make the majority of their money as safe as possible, and then receive an allowance you can burn worry free every month. The amount of capital he's earned, his money could be working for him to generate all the disposable income one needs. I guess it still comes back to discipline and habits, if the allowance isn't giving him enough to buy a new fancy car every month he'll probably start to dip into his investments. I think what is really going to kill Mayweather's fortunes, is his gambling habit. He sinks hundreds of thousands of dollars on bets routinely. Eventually that will catch up with him." }, { "docid": "145901", "title": "", "text": "What is your focus in your finance coursework? Investments? Wealth management? Corporate finance? Find something that compliments your desired path. Finance in-and-of itself is one of the most marketable business degrees available (if not THE most), and anything to show you're well-rounded will help get a job. Don't add real estate as a minor. Most school teach across a $eme$ter what you can learn in a month or two when studying to get your RE license. So, pay thousands of tuition dollar$, or pay the several hundred bucks for your test/course materials. Experience: finance degree, now a commercial real estate broker" }, { "docid": "134332", "title": "", "text": "I would not prepay a loan with a 3.79 rate, with just a tiny bit of inflation that's nearly free money. I would always seek to first max out a tax deferred savings program before making investments that are not receiving preferential tax treatment. (outside of emergency money, which you say is already dealt with) Especially since you effectively get an immediate return on the investment = to your marginal tax rate. (or to look at it another way, it takes a much smaller amount of money 'out of pocket' in order to make the investment) Every thousand you could put into a tax deferred account now, is generally equivalent to putting in several times that amount 20 years from now. OTOH Once you've maxed out the tax deferred savings, or if you need to set aside money for large purchase with a big time horizon that is short of retirement age, then making regular monthly investments in a no-load index fund with a quality company is a great way to go as you will be taking advantage of Dollar Cost Averaging, and a good deal of diversity, which is a great way to put money into the market. Just make sure you are investing in a fairly broad index, such as the S&P500 and not a little dinky 30 stock index like the Dow." }, { "docid": "40665", "title": "", "text": "\"Your dad may have paid an \"\"opportunity cost\"\" for that outright purchase. If the money he saved had been invested elsewhere, he may have made more money. If he was that well off, then his interest rate should have been the lowest possible. My own father is a multi-millionaire (not myself) and he could afford to have paid for his house outright. He didn't though. To do so would have meant cashing in on several investments. I don't know his interest rate but let's say it was 2.5%. If he invests that million dollars into something he expects to get a 7% return on in the same period, then he would make more money by borrowing the money. Hence, he would be paying an opportunity cost. Assuming you need to work, some jobs will also do background or credit checks. Credit cards can be used by well off people to actually make them money by offering rewards (compared to straight cash transactions). The better your credit history, the better the cards/rewards you can get. You can build that credit history better by having these loans and making timely payments.\"" } ]

[ { "docid": "77618", "title": "", "text": "\"Believe it or not, unless you directly contact an accountant with experience in this field or a lawyer, you may have a tough time getting a direct answer from a reputable source. The reason is two fold. First, legally defining in-game assets is exceptionally difficult from a legal/taxation stand point. Who really owns this data? You or the company that has built the MMO and manages the servers containing all of the data? You can buy-and-sell what is effectively \"\"data\"\" on their servers but the truth is, they own the code, the servers, the data, your access rights, etc. and at any point in time could terminate everything within their systems. This would render the value of your accounts worthless! As such, most countries have overwhelmingly avoided the taxation of in-game \"\"inventory\"\" because it's not really definable. Instead, in game goods are only taxed when they are exchanged for local currency. This is considered a general sale. There may be tax codes in your region for the sale of \"\"digital goods\"\". Otherwise, it should be taxed as sale a standard good with no special stipulations. The bottom line is that you shouldn't expect to find much reliable information on this topic, on the internet. Law's haven't been welled defined, regarding in-game content worth and taxing of sales and if you want to know how you should pay your taxes on these transactions, you need to talk to a good accountant, a lawyer or both.\"" } ]

[ { "docid": "44617", "title": "", "text": "\"There are no guarantees in the stock market. The index fund can send you a prospectus which shows what their results have been over the past decade or so, or you can find that info on line, but \"\"past results are not a guarantee of future performance\"\". Returns and risk generally trade off against each other; trying for higher than average results requires accepting higher than usual risk, and you need to decide which types of investments, in what mix, balance those in a way you are comfortable with. Reinvested dividends are exactly the same concept as compounded interest in a bank account. That is, you get the chance to earn interest on the interest, and then interest on the interest on the interest; it's a (slow) exponential growth curve, not just linear. Note that this applies to any reinvestment of gains, not just automatic reinvestment back into the same fund -- but automatic reinvestment is very convenient as a default. This is separate from increase in value due to growth in value of the companies. Yes, you will get a yearly report with the results, including the numbers needed for your tax return. You will owe income tax on any dividends or sales of shares. Unless the fund is inside a 401k or IRA, it's just normal property and you can sell or buy shares at any time and in any amount. Of course the advantage of investing through those special retirement accounts is advantageous tax treatment, which is why they have penalties if you use the money before retirement. Re predicting results: Guesswork and rule of thumb and hope that past trends continue a bit longer. Really the right answer is not to try to predict precise numbers, but to make a moderately conservative guess, hope you do at least that well, and be delighted if you do better... And to understand that you can lose value, and that losses often correct themselves if you can avoid having to sell until prices have recovered. You can, of course, compute historical results exactly, since you know how much you put in when, how much you took out when, and how much is in the account now. You can either look at how rate of return varied over time, or just compute an average rate of return; both approaches can be useful when trying to compare one fund against another... I get an approximate version of this reported by my financial management software, but mostly ignore it except for amusement and to reassure myself that things are behaving approximately as expected. (As long as I'm outperforming what I need to hit my retirement goals, I'm happy enough and unwilling to spend much more time on it... and my plans were based on fairly conservative assumptions.) If you invest $3k, it grows at whatever rate it grows, and ten years later you have $3k+X. If you then invest another $10k, you now have $3k+X+10k, all of which grows at whatever rate the fund now grows. When you go to sell shares or fractional shares, your profit has to be calculated based on when those specific shares were purchased and how much you paid for them versus when they were sold and how much you sold them for; this is a more annoying bit of record keeping and accounting than just reporting bank account interest, but many/most brokerages and investment banks will now do that work for you and report it at the end of the year for your taxes, as I mentioned.\"" }, { "docid": "4188", "title": "", "text": "\"You will make a profit in nominal dollars (or nominal units of whatever currency you used to buy the token). Whether you'll make a profit in real dollars depends on inflation, and in practice whether it would be possible to sell your existing tokens to someone else for the new price. Suppose when the price was 50 U (50 \"\"units\"\", since you didn't specify a currency), you bought one token. Today you can either spend 52 U for a token, and get a liter of milk, or you can spend your existing token (for which you paid 50 U) and get a liter of milk. It looks like you are making a profit of 2 U by spending your token. However, whether that profit is real or illusory depends on what else you could do with the token. For instance, suppose that, since the price of a token is now 52 U, you will have no trouble finding someone who wants to buy your token from you for 52 U. If you sell your token for 52 U, you'll still only be able to buy 1 L of milk. So if you measure your wealth in milk, you have made no profit: in the past you had a token representing 1 L of milk, and today you still have a token representing 1 L of milk. Suppose now that in the past, when a token cost 50 U, a hamburger also cost 50 U. Suppose further that a hamburger now costs 52 U. So you can sell your token for 52 U, but that 52 U will still only buy you one hamburger. So, again, if you measure your wealth in hamburgers, your have made no profit. In the past, you could have sold your token and bought a hamburger; today, you can still sell your token and buy a hamburger, and you'll have nothing left over, so you have gained nothing. If, on the other hand, the price of a hamburger today is still 50 U, then you call sell your token for 52 U, buy a hamburger for 50 U, and still have 2 U left over. You have made a profit. What this all goes to show is that, in practice, the idea of \"\"profit\"\" depends on the overall economy, and whether you could exchange the currency units you have in your possession for a greater quantity of goods than you could in the past. Whether this is possible depends on the relative changes in price of various goods. In other words, if you get your money by selling Product A, and later you buy Product B, you may or may not make a profit depending on how the prices of the two products moved relative to one another. Also, in your hypothetical setup, the \"\"currency\"\" (the token) is directly linked to the value of a single good, so you can always at least get 1 L of milk for your token. Most real currency is not bound to specific goods like your milk token, so it is possible for your currency to lose value in an absolute sense. For instance, suppose you sell a book for $5. The $5 is not a \"\"book token\"\" and you cannot rely on being able to exchange it for a book in the future; in the future, all books may cost $10, and the prices of all goods may rise similarly, so your currency will actually be worth less no matter how you try to use it. This could happen with the milk token if the milkman announces that henceforth 1 L of milk will cost 2 tokens; your existing token suddenly loses half its value. In sum, it is easy to calculate whether you made a profit in currency units. What is harder is to calculate whether you made a profit in \"\"real terms\"\" (often referred to as \"\"real dollars\"\" or \"\"inflation-adjusted dollars\"\", or the equivalent in your favorite currency). The reason this is hard is because the idea of \"\"real dollars\"\" is fundamentally linked to the possibility of exchanging currency for goods (and services), and so it depends what goods you're buying. Inflation statistics published by governments and the like use a \"\"basket\"\" of goods to approximate the overall price movements in the economy as a whole.\"" }, { "docid": "137444", "title": "", "text": "\"Why does the value of gold go up when gold itself doesn't produce anything? Why do people invest in gold? Your perception, that the value of gold goes up in the long run, is based on the price of gold measured in your favorite paper currency, for example the US Dollar. An increasing price of gold means that in the visible gold market, market participants are willing to exchange more paper currency units for the same amount of gold. There are many possible reasons for this: While HFT became extremely important for the short term price movements, I will continue with long term effects, excluding HFT. So when - as a simple thought experiment - the amount of available paper currency units (US $ or whatever) doubles, and the amount of goods and services in an economy stay the same, you can expect that the price of everything in this economy will double, including gold. You might perceive that the value of gold doubled. It did not. It stayed the same. The number of printed dollars doubled. The value of gold is still the same, its price doubled. Does the amount of paper currency units grow over time? Yes: https://research.stlouisfed.org/fred2/series/BASE/ In this answer my term \"\"paper currency units\"\" includes dollars that exist only as digits in bank accounts and \"\"printing currency\"\" includes creating those digits in bank accounts out of thin air. So the first answer: gold holds its value while the value of paper currency units shrinks over time. So gold enables you to pass wealth to the next generation (while hiding it from your government). That gold does not produce anything is not entirely true. For those of us mortals who have only a few ounces, it is true. But those who have tons can lease it out and earn interest. (in practice it is leased out multiple times, so multiple that gain. You might call this fraud, and rightfully so. But we are talking about tons of gold. Nobody who controls tons of physical gold goes to jail yet). Let's talk about Fear. You see, the perceived value of gold increases as more paper currency is printed. And markets price in expected future developments. So the value of gold rises, if a sufficient number of wealthy people fear the the government(s) will print too much paper currency. Second Answer: So the price of gold not only reflects the amount of paper currency, it is also a measurement of distrust in government(s). Now you might say something is wrong with my argument. The chart mentioned above shows that we have now (mid 2015) 5 times as much printed currency units than we had 2008. So the price of gold should be 5 times as high as 2008, assuming the amount of distrust in governments stayed the same. There must be more effects (or I might be completely wrong. You decide). But here is one more effect: As the price of gold is a measurement of distrust in governments (and especially the US government since the US Dollar is perceived as the reserve currency), the US government and associated organizations are extremely interested in low gold prices to prove trust. So people familiar with the topic believe that the price of gold (and silver) is massively manipulated to the downside using high frequency trading and shorts in the futures markets by US government and wall street banks to disprove distrust. And wall street banks gain huge amounts of paper currency units by manipulating the price, mostly to the downside. Others say that countries like china and russia are also interested in low gold prices because they want to buy as much physical gold as possible. Knowing of the value that is not reflected by the price at the moment. Is there one more source of distrust in governments? Yes. Since 1971, all paper currencies are debt. They receive their value by the trust that those with debt are willing and able to pay back their debt. If this trust is lost, the downward manipulation (if you think that such a thing exists) of the gold and silver prices in the futures markets might fail some day. If this is the case (some say when this is the case). you might see movements in gold and silver prices that bring them back to equilibrium with the amount of printed paper currencies. In times of the roman empire you got a good toga and a pair of handmade shoes for an ounce of gold. In our days, you get a nice suite and a good pair of shoes for an ounce of gold. In the mean time, the value of each paper currency in the history of each country went to zero and the US $ lost 98% of its initial value. As long as there is not enough distrust, more paper currency is made in equity markets and bond markets on average. (Be aware that you earn that currency only after you were able to sell at this price, not while you hold it) Gerd\"" }, { "docid": "300709", "title": "", "text": "The uptick rule is gone, but it was weakly reintroduced in 2010, applied to all publicly traded equities: Under the terms of the rule, a circuit breaker would be triggered if a stock falls by 10% or more in a single day. At that point, short selling would only be allowed if the price is above the current national best bid, a restriction that would apply for the rest of the day and the whole of the following day. Derivatives are not yet restricted in such ways because of their spontaneous nature, requiring a short to increase supply; however, this latest rule widens options spreads during collapses because the exemption for hedging is now gone, and what's more a tool used by options market makers, shorting the underlying to offset positive delta, now has to go to the back of the selling line during a panic. Bonds are not restricted because for one there isn't much interest in shorting because bonds usually don't have enough variance to exceed the cost of borrowing, and many do not trade frequently enough because even the cost to trade bonds is expensive, so arranging a short in its entirety will be expensive. The preferred method to short a bond is with swaps, swaptions, etc." }, { "docid": "483676", "title": "", "text": "No, this isn't possible, especially not when you're trading a highly liquid stock like Apple. When you put in your buy order at $210, any other traders that have open limit sell orders with the correct parameters, e.g. price and volume, will have their order(s) filled. This will occur before you can put in your own sell order and purchase your own shares because the other orders are listed on the order book first. In the US, many tax-sheltered accounts like IRA's have specific rules against self-dealing, which includes buying and selling assets with yourself, so such a transaction would be prohibited by definition. Although I'm not entirely sure if this applies to stocks, the limitation described in the first paragraph still applies regardless. If this were possible, rest assured that high-frequency traders would take advantage of this tactic to manipulate share prices. (I've heard critics say that this does occur, but I haven't researched it myself or seen any data about it)" }, { "docid": "523431", "title": "", "text": "\"If you're a US citizen, money earned while in the US is sourced to the US. So you can't apply FTC/FEIE to the amounts attributable to the periods of your work while in the US even if it is a short business trip. Tax treaties may affect this. Most tax treaties have explicit provisions to exclude short trips from the sourcing rules, however due to the \"\"saving clause\"\" these would probably not apply to you if you're a US citizen - you'll need to read the relevant treaty. Your home country should allow credit for the US taxes paid on the US-sourced income, and the double-taxation avoidance provision should apply in this case. The technicalities depend on your specific country. You would probably not just remove it from the taxable income, there probably is a form similar to the US form 1116 to calculate the available credit.\"" }, { "docid": "773", "title": "", "text": "For the US government, they've just credited Person B with a Million USD and haven't gained anything (afterall, those digits are intangible and don't really have a value, IMO). Two flaws in this reasoning: The US government didn't do anything. The receiving bank credited the recipient. If the digits are intangible, such that they haven't gained anything, they haven't lost anything either. In practice, the role of governments in the transfer is purely supervisory. The sending bank debits the sender's account and the receiving bank credits the recipient's account. Every intermediary makes some money on this transaction because the cost to the sender exceeds the credit to the recipient. The sending bank typically receives a credit to their account at a correspondent bank. The receiving bank typically receives a debit from their account at a correspondent bank. If a bank sends lots of money, eventually its account at its correspondent will run dry. If a bank receives lots of money, eventually its account at its correspondent will have too much money. This is resolved with domestic payments, sometimes handled by governmental or quasi-governmental agencies. In the US, banks have an account with the federal reserve and adjust balances there. The international component is handled by the correspondent bank(s). They also internally will credit and debit. If they get an imbalance between two currencies they can't easily correct, they will have to sell one currency to buy the other. Fortunately, worldwide currency exchange is extremely efficient." }, { "docid": "103842", "title": "", "text": "Does the 5 year rule apply on the After-tax 401k -> Roth 401k -> Roth IRA conversion of the 20000 (including 10000 earnings that was originally pre-tax)? No. The after-tax amounts are not subject to the 5 years rule. The earnings are. How does this affect Roth IRA withdrawal ordering rules with respect to the taxable portion of a single conversion being withdrawn before the non-taxable portion? Taxable portion first until exhausted. To better understand how it works, you need to understand the rationale behind the 5-year rule. Consider you have $100K in your IRA (traditional) and you want to take it out. Just withdrawing it would trigger a 10K statutory penalty, on top of the taxes due. But, you can use the backdoor Roth IRA, right? So convert the 100K, and then it becomes after-tax contribution to Roth IRA, and can be withdrawn with no penalty. One form filled ad 10K saved. To block this loophole, here comes the 5 years rule: you cannot withdraw after-tax amounts for at least 5 years without penalty, if the source was taxable conversion. Thus, in order to avoid the 10K penalty in the above situation, you have a 5-year cooling period, which makes the loophole useless for most cases. However amounts that are after tax can be withdrawn without penalty already, even from the traditional IRA, so there's no need in the 5 years cooling period. The withdrawal attribution is in this order: Roth IRA rollovers are sourced to the origin. E.g.: if you converted $100 to the Roth IRA at firm X and then a year later rolled it over to firm Y - it doesn't affect anything and the clock is ticking from the original date of the conversion at firm X. 5-year period applies to each conversion/rollover from a qualified retirement plan (see here). Distributions are applied to the conversions in FIFO order, so in one distribution, depending on the amounts, you may hit several different incoming conversions. The 5 years should be check on each of them, and the penalty applied on the amounts attributable to those that don't have enough time. 5-year period for contributions applies starting from the beginning of the first year of the first contribution that established your Roth IRA plan. The penalty applies to the amounts that were included in your gross income when conversion occurred, i.e.: doesn't apply on the amounts converted from after-tax sources. Note the difference from the traditional IRA - distributions from pre-tax sources are prorated between the non-deductible (basis) amounts and the deductible/earnings amounts (taxable). That is why the taxable amounts are first in the ordering of the distributions." }, { "docid": "416789", "title": "", "text": "Equal sized gains and losses in alternating years would lead to an unjust positive tax. On the contrary. If I can take my gains at the long term rate (15%) in even years, but take losses in odd years, up to $3000, or let them offset short term gains at ordinary rate, I've just gamed the system. What is the purpose of the wash sale rule? Respectfully, we here can do a fine job of explaining how a bit of tax code works. And we can suggest the implication of those code bits. But, I suspect that it's not easy to explain the history of particular rules. For wash sale, the simple intent is to not let someone take a loss without actually selling the stock for a time. You'd be right to say the +/- 30 days is arbitrary. I'd ask you to keep 2 things in mind if you continue to frequent this board -" }, { "docid": "113632", "title": "", "text": "First, you need to see if you actually qualify as a dependent under IRS rules; in short: While there may be exceptions to the cohabitation rule, I am not sure what those could be. The takeaway is that if your parent is wishing to claim you as a dependent, they must be responsible for supporting the majority of your living expenses (e.g. food and shelter). If this is the case, then the next question is to look at how the impact of the exemptions play out. In your situation, I would guess that your mother is correct: your taxable income is likely to be so low that if you do not take an exemption for yourself, you probably would still have zero or minimal tax liability; but if you mother claims you as a dependent, she will be able to take a deduction. In the case of your grants and loans, the loans should not be taxable income since these need to be repaid (presumably, with future earnings). Federal grants may be taxable--basically, the portion of the grant that is used solely for paying educational expenses toward a specific degree (tuition and books) is non-taxable, but the remainder may be subject to tax. As for tax credits, you would need to see how much you would get and how they would apply to you. The bottom line is, there are too many variables to say for certain what the best approach would be, so both your and your mother's returns must be prepared under each scenario (you as her dependent, versus you claiming a personal exemption)." }, { "docid": "594784", "title": "", "text": "If you're a US citizen/resident - you pay taxes on your worldwide income regardless of where you live. The logic is that Americans generally don't agree to the view that there's more than one country in the world. If you're non-US person, not physically present in the US, and provide contract work for a US employer - you generally don't pay taxes in the US. The logic is that the US doesn't actually have any jurisdiction over that money, you didn't earn it in the US. That said, your employer might withheld tax and remit it to the IRS, and you'll have to chase them for refund. If you receive income from the US rental property or dividends from a US company - you pay income tax to the US on that income, and then bargain with your home tax authority on refunds of the difference between what you paid in the US and what you should have paid at home. You can also file non-resident tax return in the US to claim what you have paid in excess. The logic is that the money sourced in the US should be taxed in the US. You earned that money in the US. There are additional rules to more specific situation, and there are also bilateral treaties between countries (including a US-Canadian treaty) that supersede national laws. Bottom line, not only that each country has its own laws, there are also different laws for different situations, and if some of the international treaties apply to you - it further complicates the situation. If something is not clear - get a professional advice form a tax accountant licensed in the relevant jurisdictions (in your case - any of the US states, and the Canadian province where you live)." }, { "docid": "321049", "title": "", "text": "What is your risk tolerance? Personally I invest about $5k in digital currency as an experiment. A lot of people told me I am stupid, which I agree at some point. I plan to let the money sit for 5~10 years. I can tell you there is a lot of emotion in the digital currency though." }, { "docid": "466950", "title": "", "text": "\"Having savings only in your home currency is relatively 'low risk' compared with other types of 'low diversification'. This is because, in a simple case, your future cash outflows will be in your home currency, so if the GBP fluctuates in value, it will (theoretically) still buy you the same goods at home. In this way, keeping your savings in the same currency as your future expenditures creates a natural hedge against currency fluctuation. This gets complicated for goods imported from other countries, where base price fluctuates based on a foreign currency, or for situations where you expect to incur significant foreign currency expenditures (retirement elsewhere, etc.). In such cases, you no longer have certainty that your future expenditures will be based on the GBP, and saving money in other currencies may make more sense. In many circumstances, 'diversification' of the currency of your savings may actually increase your risk, not decrease it. Be sure you are doing this for a specific reason, with a specific strategy, and not just to generally 'spread your money around'. Even in case of a Brexit, consider: what would you do with a bank account full of USD? If the answer is \"\"Convert it back to GBP when needed (in 6 months, 5 years, 30, etc.), to buy British goods\"\", then I wouldn't call this a way to reduce your risk. Instead, I would call it a type of investment, with its own set of risks associated.\"" }, { "docid": "102237", "title": "", "text": "An instant 15% profit sounds good to me, so you can't go wrong selling as soon as you are able. Here are a couple other considerations: Tax implications: When you sell the stock, you have to pay taxes on the profit (including that 15% discount). The tax rate you pay is based on how long you wait to sell it. If you wait a certain amount of time (usually 2 years, but it will depend on your specific tax codes) before you sell, you could be subject to lower tax rates on that profit. See here for a more detailed description. This might only apply if you're in the US. Since you work for the company, you may be privy to a bit more information about how the company is run and how likely it is to grow. As such, if you feel like the company is headed in the right direction, you may want to hold on the the stock for a while. I am generally wary of being significantly invested in the company you work for. If the company goes south, then the stock price will obviously drop, but you'll also be at risk to be laid off. As such you're exposed much more risk than investing in other companies. This is a good argument to sell the stock and take the 15% profit.* * - I realize your question wasn't really about whether to sell the stock, but more for when, but I felt this was relevant nonetheless." }, { "docid": "52622", "title": "", "text": "\"I also don't know the specific details for Finland and/or Belgium, however many countries have tax treaties, which generally prevent double taxation (i.e., paying tax in both countries on the same base income). Being that both Finland and Belgium are EU member states, I'm quite certain there's a provision that covers this, and the same would apply: You pay taxes on what you earn while in Finland to Finland, and to Belgium what you earn while in Belgium. All of this is similar to what you presented, however there's also a section where you'd declare how much taxes were paid in other countries. One other thing to note, which will be the determining factor in the above, is whether EU law requires you to change residence to BE for the time you're there. If not then you'll be paying taxes in Finland the entire time on the entire amount. This comes from an Irish governmental site: \"\"By working in another member state and by transferring your residence there, you are likely to become \"\"resident for tax purposes\"\" there. The definition of fiscal residence varies from one member state to another. You must comply with the laws of the country where you have established your residence. The laws on personal taxation vary considerably from one member state to another and you may be liable for taxation in more than one country. In general, you are subject to income tax in the country where you are living but this may not be the case if you are a “posted worker” – see below. In general, property is taxed in the country in which it is situated but, again, there are variations. Tax agreements have been concluded between most of the member states of the EU, which are intended to avoid double taxation, if you derive income from different countries. In general, national fiscal rules must respect the fundamental principle of non-discrimination against nationals of another EU country.\"\"\"" }, { "docid": "568534", "title": "", "text": "There are two ways to measure the value of money in the past. 1) As Victor mentioned there are inflation statistics covering the last 100 or so years that value the currency against an ever-changing basket of goods. This is sufficient when measuring general inflation over the period of the hundred years where there is data. This is how it was measured in your example. 2) For older time periods or where a value comparison is required between specific items (particularly where these were not in the basket of goods used for the inflation calculation) Historical records of the price of comparable goods can be used. This is in effect the same as mark to market valuations for illiquid financial instruments and requires poring through records to find the price of either a comparable basket of goods to one that would be used for inflation calculations today or a comparable set of items. An example of this is finding the value of a particular type of house (say a terraced house in London) in the 19th Century compared to the same house today by finding records of how much comparable houses would sell for, on average, then and now. This second measure is also used where the country in question didn't or doesn't keep reliable inflation statistics which may well be true of Colombia in the 90s. This means that there is a chance that this way of estimating Escobar's wealth in today's terms may have also been used. Another notable reason to use this methodology is that (unless you are using exchange rates in purchasing power parity terms) the value of money held in different currencies is different. This is even true today as the value of $1 in INR in India is likely to be higher than the value of a dollar in the US in terms of what you can buy. Using this methodology allows for a more accurate comparison in values where different countries and currencies are involved." }, { "docid": "35810", "title": "", "text": "Making a game is hard enough, focus on that. If/when you start getting close to having something to sell, then if you're serious and want the company to grow into a full time venture, briefly consult with a lawyer and possibly accountant to set this up. It will save you a lot of time researching what you have to do and a lot of headache from potentially doing things wrong. If you want to try to do it on your own, I'd recommend getting a book on starting a business because there is more to know than a single post can cover. You'll probably have to file for a DBA (doing business as) at your city hall in order to be allowed to refer to yourself as the name of your company (otherwise you have to use your personal name). Initiating that will likely initiate annual business taxes in your town in addition to the cheap filing fee. You also want to consider how you will handle trademark (of your business and game) and copyright (of your game). If this is going to grow, you'll have to have contracts written for either employees or for freelancers who might produce assets for you. You may also need to consider writing an EULA for your game, privacy policies, etc. Additionally, you'll likely have to file with your state to collect and send sales tax. You'll also want to meticulously track costs and revenue related to your business. Formally starting a business will likely open you up to property, sales and income tax. For example, where I am, was even taxed on the equipment the business uses (e.g. computers). This is why it makes sense to wait until you're closer to having a product before you try to formally start a business and to consult with professionals on the best way. The type of business you should form will depend on the scope you plan for the company and the amount of time/money you're willing to put in. A sole proprietorship (what you are by default) means there is no difference legally/financially between you as an individual and you as a company. This may be suitable if this is just a hobby, but not if you intend it to grow because that means any lawsuit directed at your company and its money is also directed at you and your money. The differences between an LLC and corporation are more nuanced and involve differences in legal and tax treatment, however, they both shield you from the previously mentioned problem. If you want this to be more than a hobby you should form either an LLC or a corporation. Do some research on the differences and how they might apply to you and in your state." }, { "docid": "570453", "title": "", "text": "Making or losing income (via selling shares) is the taxable event, not moving the income you made to and from an account. The only exception would be a special account such as an IRA, and then there would be rules specific to that account structure about when you can withdraw money and what the tax consequences are." }, { "docid": "459096", "title": "", "text": "How can I correctly account for having money in different currencies, without currency transfers or currency fluctuations ending up as gains or losses? In my view, your spreadsheet should be in multiple currencies. i.e. if you have gained some in specific currency, make a note of it in that specific currency. If you have spent something in a specific currency, then make a note accordingly. You can use an additional column for reporting this in a neutral currency say GBP. If you are transferring the money from account of one currency to account of another; change the balances as appropriate with the actual conversion rate. If you need this record keeping for tax purposes, then get a proper advise from accountant." } ]

[ { "docid": "568501", "title": "", "text": "It's used as a reference column: In journals folio coloumn is used to mention the reference or “address” of ledger in which the journal entry has been posted thus giving an easy access and also easily understanding whether all the entries has been posted in the relevant accounts or not." } ]

[ { "docid": "231578", "title": "", "text": "I don't know of any books, but there are a lot of good white papers on the subject if you take the time to look for them. For example, Moody's has a white paper on their LGD model (LossCalc) that explains their calibration methodology. Searching for academic papers on the subject is really the only way to go, because credit risk is a field that really is just being explored. Really only since 2006 have banks started to actively try to use a risk rating model that incorporates PD and LGD. This is because of data insufficiency - banks just didn't keep active and centralized loan level data that is required to calibrate the models. tl;dr: Use the internet - it is your friend." }, { "docid": "97337", "title": "", "text": "Finance and accounting go together like peanut butter and jelly. Having said that, you really should (read: need [to]) determine what part of finance you're interested in, because that's the only way to give you an informed answer as to whether you should pursue a CPA / CFA / MBA. With all of that in mind, your post -- in my opinion -- really comes across as you sounding like you don't want to put in the work to pass the CPA. If that's the case, finance is *really* not the field you want to be in. Lastly, experience is not a substitute for having your CPA license, but rather a compliment." }, { "docid": "424439", "title": "", "text": "Every listed company needs to maintain book of accounts, when you are investing in companies you would have to look at what is stated in the books and along with other info decide to invest in it." }, { "docid": "320578", "title": "", "text": "I have been following some of these threads. Some of them are really old. I have read used recording to equity accounts to resolve the imbalance USD issue. The thing I noticed is that all my imbalances occur when paying bills. I took all the bills and set them up as vendor accounts, entered the bills in the new bills, and used the process payment when paying bills. The imbalance issue stopped. It makes sense. The system is a double entry. That's it will credit and debit. Assets accounts are increased with a debit and decreased with a credit. Equity accounts are increased with a credit and decreased with a debit. ie; Say you have an monthly insurance bill for $100. You enter it into the new vendor bill. This credits Accounts Payable. When paying the bill it credits checking, debits account payable, credits vendor account, debits the expense insurance. In short for each credit there has to be a debit for the books to balance. When there is no account for it to record to it will record in Imbalance USD to balance the books." }, { "docid": "185306", "title": "", "text": "It might help the poster if you recommended some of those? I recommended the ones I know of specifically in that field I know to be good. Perhaps you could do the same? I also really like the books in this list: http://www.fool.com/Specials/2000/sp001107a.htm Note, Gorilla Game is, IMO the weakest of the bunch." }, { "docid": "258997", "title": "", "text": "\"The lottery is not a scam. It really does what it says it does, the odds are just tremendously not in your favor. MLMs promise a business opportunity where there isn't one and the only real money comes from signing up new people. I've been dragged to a number of these things. The last one was maybe ten years ago, it was a ACN meeting at a co-worker's house. The invitation was vague, a number of other co-workers were going, and there was free food. I immediately knew what it was when they started the presentation. I listened as they went on about the untold riches and working for yourself and all of the usual crap. Then they told us that we could ask questions. Anything we wanted. Well, OK. Thing is, they don't get many people showing up to these things who are both lawyers and accountants. Like me. I started asking for financial documents, tax returns, verified audits, the form of the contract between ACN and you, and a few federal regulations. That did not go over so well. I pointed out that it was all standard due diligence. I added that I would be happy to sign a non-disclosure agreement before showing me the books. As you might guess, they didn't have any real answers and the guy doing the presentation looked like he wanted to punch me in the face. Nobody signed up. If you end up in at one of these meetings, start asking questions about the books. You want to see them. You want to see tax returns. You want to see audits from CPA firms. Offer to sign a non-disclosure agreement. These are all very normal things in the business world. Say you had a factory that makes widgets and you decide to sell the factory for $100,000. I'm an interested buyer. I would ask to see your books, returns and a statement from your CPA verifying these things. A non-disclosure agreement is common and totally fair. That way, I could verify the financials. If someone wants you to sign up for a MLM, ask to see the books. You'll shut it down almost immediately. If they get upset, use the phrase \"\"due diligence\"\" and say that it is standard business procedure. Because it is.\"" }, { "docid": "134765", "title": "", "text": "\"My opinion - this subreddit should be about discussing the industry. This venue should be for those already established in the field - those able and willing to contribute insightful perspectives and notions to the group. We should have dialogues on current events, case studies on previous events, how we were involved in said happenings, what our perspectives were etc. Even a place to share and critique write-ups on investment ideas. For those that are \"\"dying to get into the field\"\".. For 90% of us, I can assure you, we were there. I sure as hell know I was. Finance, or at least investment banking, trading, etc. is one of, if not the most, competitive fields to enter into directly out of college. All of us had a lot of questions. All of us were worried and anxious. Those that succeeded, however, didn't spend time asking anonymous people on the internet if they had a shot. They went out, worked their asses off and did what they needed to do. I'm 6 months into a full time investment banking gig in one of the most prestigious groups at perhaps the most highly regarded investment bank in the world. There isn't a day that goes by that I don't wonder how in the fucking fuck I got to be where I am at. But this shouldn't be the place to discuss it. There's so many other venues - r/financialcareers, wallstreetoasis, etc - that cater to such concerns. Though I don't post much (partly a side affect of working 120 hours a week) Reddit needs a place to discuss the happenings of the financial world. There are a lot of redditors that work in finance. The problem, however, is that there really isn't a place to discuss the field. At least for me, I tend to only visit the subreddit every now and then because I know it will be convoluted with career questions. Make this subreddit a subreddit about what's happening in finance. Redirect posts about financial careers to the appropriate forum. It's that simple.\"" }, { "docid": "385692", "title": "", "text": "\"The real betrayal is that the so-called education system can't be bothered to teach people anything useful. I had a \"\"bank book\"\" (savings account) in *fifth grade*. We learned to operate checking accounts in sixth, and compound interest the next year. What happened?\"" }, { "docid": "77618", "title": "", "text": "\"Believe it or not, unless you directly contact an accountant with experience in this field or a lawyer, you may have a tough time getting a direct answer from a reputable source. The reason is two fold. First, legally defining in-game assets is exceptionally difficult from a legal/taxation stand point. Who really owns this data? You or the company that has built the MMO and manages the servers containing all of the data? You can buy-and-sell what is effectively \"\"data\"\" on their servers but the truth is, they own the code, the servers, the data, your access rights, etc. and at any point in time could terminate everything within their systems. This would render the value of your accounts worthless! As such, most countries have overwhelmingly avoided the taxation of in-game \"\"inventory\"\" because it's not really definable. Instead, in game goods are only taxed when they are exchanged for local currency. This is considered a general sale. There may be tax codes in your region for the sale of \"\"digital goods\"\". Otherwise, it should be taxed as sale a standard good with no special stipulations. The bottom line is that you shouldn't expect to find much reliable information on this topic, on the internet. Law's haven't been welled defined, regarding in-game content worth and taxing of sales and if you want to know how you should pay your taxes on these transactions, you need to talk to a good accountant, a lawyer or both.\"" }, { "docid": "559407", "title": "", "text": "I actually don't have a finance/accounting background but a much more technical background within my sector and had some general finance knowledge. However, most have finance/accounting degrees I work with, and then learn their sector. Many (a third?) straight out of school, most associates with just a few years of experience in finance/accounting related jobs, not necessarily equity research. Don't fret about not having much luck so far, keep looking for a good opening and understand that a lot of jobs in finance/accounting fields can lead you to other positions." }, { "docid": "204473", "title": "", "text": "If you've already done some micro and macro, you are on the right track to learn finance. What you should study next depends on what kind of finance you want to know more about. Is it M&amp;A and corporate finance, more macro would not help much, but maybe some financial accounting. You could see if you could get your hands on a corporate finance text book since they are a good starting place to learn more about finance in general (and such a book is a relatively easy read). Much finance, however, requires good quantitative skills so probability, statistics, linear algebra and calculus, and their applications to finance, is never a bad thing to look into. This would open up for understanding e.g. derivatives that played a huge role in the financial crisis and in financial markets today." }, { "docid": "440522", "title": "", "text": "Understandably, it appears as if one must construct the flows oneself because of the work involved to include every loan variation. First, it would be best to distinguish between cash and accrued, otherwise known as the economic, costs. The cash cost is, as you've identified, the payment. This is a reality for cash management, and it's wise that you wish to track it. However, by accruals, the only economic cost involved in the payment is the interest. The reason is because the rest of the payment flows from one form of asset to another, so if out of a $1,000 payment, $100 is principal repayment, you have merely traded $100 of cash for $100 of house. The cash costs will be accounted for on the cash flow statement while the accrued or economic costs will be accounted on the income statement. It appears as if you've accounted for this properly. However, for the resolution that you desire, the accounts must first flow through the income statement followed next instead of directly from assets to liabilities. This is where you can get a sense of the true costs of the home. To get better accrual resolution, credit cash and debit mortgage interest expense & principal repayment. Book the mortgage interest expense on the income statement and then cancel the principal repayment account with the loan account. The principal repayment should not be treated as an expense; however, the cash payment that pays down the mortgage balance should be booked so that it will appear on the cash flow statement. Because you weren't doing this before, and you were debiting the entire payment off of the loan, you should probably notice your booked loan account diverging from the actual. This proper booking will resolve that. When you are comfortable with booking the payments, you can book unrealized gains and losses by marking the house to market in this statement to get a better understanding of your financial position. The cash flow statement with proper bookings should show how the cash has flowed, so if it is according to standards, household operations should show a positive flow from labor/investments less the amount of interest expense while financing will show a negative flow from principal repayment. Investing due to the home should show no change due to mortgage payments because the house has already been acquired, thus there was a large outflow when cash was paid to acquire the home. The program should give some way to classify accounts so that they are either operational, investing, or financing. All income & expenses are operational. All investments such as equities, credit assets, and the home are investing. All liabilities are financing. To book the installment payment $X which consists of $Y in interest and $Z in principal: To resolve the reduction in principal: As long as the accounts are properly classified, GnuCash probably does the rest for you, but if not, to resolve the expense: Finally, net income is resolved: My guess is that GnuCash derives the cash flow statement indirectly, but you can do the entry by simply: In this case, it happily resembles the first accrued entry, but with cash, that's all that is necessary by the direct method." }, { "docid": "531781", "title": "", "text": "\"Yes, I did. I won't deny it. But, as I said in my original post - \"\"I don't know much about this subject [finances]\"\". Well, that's why I came here to ask a question. I don't know what \"\"trusted\"\" sources are in this field - it's not as if there are real scientific journals in this field as in biology (my profession). So... is this a problem in your view?\"" }, { "docid": "79411", "title": "", "text": "\"This is not an end-all answer but it'll get you started I have been through accounting courses in college as well as worked as a contractor (files as sole proprietor) for a few years but IANAA (I am not an accountant). Following @MasonWheeler's answer, if you're making that much money you should hire a bean counter to at least overlook your bookkeeping. What type of business? First, if you're the sole owner of the business you will most likely file as a sole proprietorship. If you don't have an official business entity, you should get it registered officially asap, and file under that name. The problem with sole proprietorships is liability. If you get sued, not only are your business' assets vulnerable but they can go after your personal assets too (including house/cars/etc). Legally, you and your business are considered one and the same. To avoid liability issues, you could setup a S corporation. Basically, the business is considered it's own entity and legal matters can only take as much as the business owns. You gain more protection but if you don't explicitly keep your business finances separate from your personal finances, you can get into a lot of trouble. Also, corporations generally pay out more in taxes. Technically, since the business is it's own entity you'll need to pay yourself a 'reasonable salary'. If you skip the salary and pay yourself the profits directly (ie evade being taxed on income/salary) the IRS will shut you down (that's one of the leading causes of corporations being shut down). You can also pay distribute bonuses on top of that but it would be wise to burn the words 'within reason' into your memory first. The tax man gets mad if you short him on payroll taxes. S corporations are complicated, if you go that route definitely seek help from an accountant. Bookkeeping If you're not willing to pay a full time accountant you'll need to do a lot of studying about how this works. Generally, even if you have a sole proprietorship it's best to have a separate bank account for all of your business transactions. Every source/drain of money will fall into one of 3 categories... Assets - What your business owns: Assets can be categorized by liquidity. Meaning how fast you can transform them directly into cash. Just because a company is worth a lot doesn't necessarily mean it has a lot of cash. Some assets depreciate (lose value over time) whereas some are very hard to transform back into cash based on the value and/or market fluctuations (like property). Liabilities - What you owe others and what others owe you: Everything you owe and everything that is owed to you gets tracked. Just like credit cards, it's completely possible to owe more than you own as long as you can pay the interest to maintain the loans. Equity - the net worth of the company: The approach they commonly teach in schools is called double-entry bookkeeping where they use the equation: In practice I prefer the following because it makes more sense: Basically, if you account for everything correctly both sides of the equation should match up. If you choose to go the sole proprietorship route, it's smart to track everything I've mentioned above but you can choose to keep things simple by just looking at your Equity. Equity, the heart of your business... Basically, every transaction you make having to do with your business can be simplified down to debits (money/value) increasing and credits (money/value) decreasing. For a very simple company you can assess this by looking at net profits. Which can be calculated with: Revenues, are made up of money earned by services performed and goods sold. Expenses are made up of operating costs, materials, payroll, consumables, interest on liabilities, etc. Basically, if you brought in 250K but it cost you 100K to make that happen, you've made 150K for the year in profit. So, for your taxes you can count up all the money you've made (Revenues), subtract all of the money you've paid out (Expenses) and you'll know how much profit you've made. The profit is what you pay taxes on. The kicker is, there are gray areas when it comes to deducting expenses. For instance, you can deduct the expense of using your car for business but you need to keep a log and can only expense the miles you traveled explicitly for business. Same goes for deducting dedicated workspaces in your house. Basically, do the research if you're not 100% sure about a deduction. If you don't keep detailed books and try to expense stuff without proof, you can get in trouble if the IRS comes knocking. There are always mythical stories about 'that one guy' who wrote off his boat on his taxes but in reality, you can go to jail for tax fraud if you do that. It comes down to this. At the end of the year, if your business took in a ton of money you'll owe a lot in taxes. The better you can justify your expenses, the more you can reduce that debt. One last thing. You'll also have to pay your personal federal/state taxes (including self-employment tax). That means medicare/social security, etc. If this is your first foray into self-employment you're probably not familiar with the fact that 1099 employers pick up 1/2 of the 15% medicare/social security bill. Typically, if you have an idea of what you make annually, you should be paying this out throughout the year. My pay as a contractor was always erratic so I usually paid it out once/twice a year. It's better to pay too much than too little because the gov't will give you back the money you overpaid. At the end of the day, paying taxed sucks more if you're self-employed but it balances out because you can make a lot more money. If as you said, you've broken six figures, hire a damn accountant/adviser to help you out and start reading. When people say, \"\"a business degree will help you advance in any field,\"\" it's subjects like accounting are core requirements to become a business undergrad. If you don't have time for more school and don't want to pay somebody else to take care of it, there's plenty of written material to learn it on your own. It's not rocket surgery, just basic arithmetic and a lot of business jargon (ie almost as much as technology).\"" }, { "docid": "568197", "title": "", "text": "\"First, please allow me to recommend that you do not try gimmickry when financials do give expected results. It's a sure path to disaster and illegality. The best route is to first check if accounts are being properly booked. If they are then there is most likely a problem with the business. Anything out of bounds yet properly booked is indeed the problem. Now, the reason why your results seem strange is because investments are being improperly booked as inventory; therefore, the current account is deviating badly from the industry mean. The dividing line for distinguishing between current and long term assets is one year; although, modern financial accounting theorists & regulators have tried to smudge that line, so standards do not always adhere to that line. Therefore, any seedlings for resale should be booked as inventory while those for potting as investment. It's been some time since I've looked at the standards closely, but this used to fall under \"\"property, plant, & equipment\"\". Generally, it is a \"\"capital expenditure\"\" by the oldest definition. It is not necessary to obsess over initial bookings because inventory turnover will quickly resolve itself, so a simple running or historical rate can be applied to the seedling purchases. The books will now appear more normal, and better subsequent strategic decisions can now be made.\"" }, { "docid": "220828", "title": "", "text": "\"standard NFC-for-payments ... reads a straight copy of the card details ... does not generate any one-time-use card number ... does not employ any over-the-air encryption or even a challenge-response system [?] The normal contactless payment process does involve transaction-specific cryptographic-signatures. However what process is used depends on the vendor equipment and the scheme (Visa, Mastercard, Amex, ...) A \"\"Magstripe mode\"\", if supported, allows the card number and expiry date to be read. There is a good description at Level2Kernel which covers \"\"Magnetic Stripe Mode\"\" and \"\"EMV Mode\"\" etc for each scheme (Mastercard, Visa etc do things differently). MasterCard Contactless MasterCard transactions can be performed in either EMV mode or Mag-Stripe mode. After Entry Point has initiated a transaction the MasterCard Kernel issues a Get Processing Options command. In the response from the card a data object called the Application Interchange Profile (AIP) determines whether the transaction will continue in either EMV Mode or Mag-Stripe Mode. The AIP also determines if “On-device cardholder verification” (CDCVM) is supported. EMV Mode (M/Chip) The commands exchanged with the card for EMV Mode closely resemble those used for an EMV contact transaction, with Read Record commands being used to retrieve all the card data, followed by a Generate Application Cryptogram (GENAC) request to obtain a unique, transaction-specific, cryptogram from the card. Once all of these exchanges have been completed, the card can be removed from the RF field. However, unlike for contact transactions, not all the transaction processing occurs before the card exchanges have been completed. This is to optimise the contactless transaction performance by reducing the amount of time the card is required to remain in the RF field. (my emphasis) According to VISA UK Our technology uses the chip on your card to generate unique cryptograms (that’s techie speak for a type of puzzle that consists of a short piece of encrypted or encoded text) and digital signatures to protect your payments. Digital signatures are like handwritten signatures in some ways – but they are much more difficult to forge. (my emphasis) According to the UK Card Association Rumour: A fraudster can steal my details from my contactless card. Fact: You have to be extremely close to someone for their gadget to be able to read your card - and even then all they would ever get is the card number and expiry date. That’s the same information you see by simply looking at the front of any card.There’s no way anyone can get the security code on the back of the card, your name and address, or bank account details. The vast majority of online retailers require additional details like these and others to make a purchase. However, according to a Guardian newspaper report of 2015-07-25: Researchers bought cheap, widely available card scanners from a mainstream website to see if they could “steal” key details from a contactless card. They tested 10 different credit and debit cards, that were meant to be coded to “mask” personal data, and were able to read crucial data that was meant to be hidden. It then went shopping with the information it had obtained and was able to successfully place orders for items including a £3,000 television set. So yes, even in the civilized world, our security is undermined by a combination of: How does Apple Pay work? See Apple Pay Must Be Using the Mag-Stripe Mode of the EMV Contactless Specifications Clearly, Apple Pay must following the EMV contactless specifications of books C-2, C-3 and C-4 for MasterCard, Visa and American Express transactions respectively. More specifically, it must be following what I called above the “mobile phone profile” of the contactless specifications. It must be implementing the contactless mag-stripe mode, since magnetic stripe infrastructure is still prevalent in the US. It may or may not be implementing contactless EMV mode today, but will probably implement it in the future as the infrastructure for supporting payments with contact cards is phased in over the next year in the US.\"" }, { "docid": "486818", "title": "", "text": "I work for an electronics distribution company as part of their Accounting team and I hate it. I love doing month-end/year-end stuff because it actually engages my mind, but I hate doing A/P and A/R data entry stuff for a good majority of the year. At this point, I feel like switching career paths to something more engaging or another career in the accounting field." }, { "docid": "328086", "title": "", "text": "There's a few different types of investments you could do. As poolie mentioned, you could split your money between the Vanguard All World ex-US and Vanguard Total Stock Market index. A similar approach would be to invest in the Vanguard Total World Stock ETF. You wouldn't have to track separate fund performances, at the downside of not being able to allocate differential amounts to the US and non-US markets (Vanguard will allocate them by market cap). You could consider investing in country-specific broad market indices like the S&P 500 and FTSE 100. While not as diversified as the world indices, they are more correlated with the country's economic outlook. Other common investing paradigms are investing in companies which have historically paid out high dividends and companies that are under-valued by the market but have good prospects for future growth. This gets in the domain of value investing, which an entire field by itself. Like Andrew mentioned, investing in a mutual fund is hassle-free. However, mutual fees/commissions and taxes can be higher (somewhere in the range 1%-5%) than index funds/ETF expense ratios (typically <0.50%), so they would have to outperform the market by a bit to break-even. There are quite a few good books out there to read up about investing. I'd recommend The Intelligent Investor and Millionaire Teacher to understand the basics of long-term investing, but of course, there are many other equally good books too." }, { "docid": "202224", "title": "", "text": "\"Your debits and credits are perfect. Now, it comes down to a choice of how you want your accounts organized, financially speaking. In terms of taxes, it's recommended you keep a separate set of books just like a corporation and account for them strictly according to law. It's best not to credit phone expenses since it will no longer show on your net reports. A better alternative would be \"\"Phone reimbursement\"\". With that, you can not only see if you've been compensated but also how much you're personally managing these expenses by checking the annual \"\"Phone expense\"\" account. This is all up to personal preference, but so long as you're properly balancing your accounts, you can introduce any level of resolution you wish. I prefer total resolution when it comes to financial accounting. Also, it is not good practice to debit away \"\"Salary\"\". The net of this account will be lower and distorted. An expense reimbursement is not salary anyways, so the proper bookings will follow below. Finally, if GnuCash is calling \"\"Salary\"\" an income account, this is unfortunate. The proper label would be \"\"revenue\"\" since \"\"income\"\" is a net account of expenses from revenue in the income identity. Entries With this, your books will become clearer: your cash assets will remain as clear as you had organized them, but now your income statement will provide higher resolution.\"" } ]

[ { "docid": "385929", "title": "", "text": "An expense is an expense. You can deduct your lease payment subject to some limitations, but you don't make out by having more expenses. Higher expenses mean lower profit. Is leasing better than owning? It depends on the car you'd buy. If your business doesn't benefit from flashiness of your car, then buying a quality used car (a few years old at most) would probably be a wiser decision financially. I'd think hard about whether you really need an up-to-date car." } ]

[ { "docid": "207997", "title": "", "text": "You can ask the client to pay you through the LLC. In that case you should invoice them from the LLC and have them pay the invoice. If they pay you personally, you can always make a capital contribution to the LLC and use that money to buy equipment. The tax implications for a single person LLC providing professional services are the same for you either way: income is income whether it's from your LLC or an employer. It's different for the employer if they are giving you a W2 vs a 1099. So it doesn't matter much for you. If the LLC is buying equipment, make sure you get enough revenue through the LLC to at least offset those expenses." }, { "docid": "539805", "title": "", "text": "You can negotiate a no penalty for early payment loan with dealerships sometimes. Dealerships will often give you a better price on the car when you finance through them vs paying cash, so you negotiate in a 48 month finance, after you've settled on the price THEN you negotiate the no penalty for early payment point. They'll be less likely to try to raise the price after you've already come to an agreement. My dad has SAID he does this when buying cars, but that could just be hearsay and bravado. Has said he will negotiate on the basis of a long term lease, nail down a price then throw that clause in, then pay the car off in the first payment. Disclaimer: it's...um not a great way to do business though if you plan to purchase a new car every 2-3 years from the same dealer. Do it once and you'll have a note in their CRM not to either a) offer price reductions for financing or b) offer no penalty early payment financing." }, { "docid": "299211", "title": "", "text": "\"-Alain Wertheimer I'm a hobbyist... Most (probably all) of those older items were sold both prior to my establishing the LLC This is a hobby of yours, this is not your business. You purchased all of these goods for your pleasure, not for their future profit. The later items that you bought after your LLC was establish served both purposes (perks of doing what you love). How should I go about reporting this income for the items I don't have records for how much I purchased them for? There's nothing you can do. As noted above, these items (if you were to testify in court against the IRS). \"\"Losses from the sale of personal-use property, such as your home or car, aren't tax deductible.\"\" Source Do I need to indicate 100% of the income because I can't prove that I sold it at a loss? Yes, if you do not have previous records you must claim a 100% capital gain. Source Addition: As JoeTaxpayer has mentioned in the comments, the second source I posted is for stocks and bonds. So at year begin of 2016, I started selling what I didn't need on eBay and on various forums [January - September]. Because you are not in the business of doing this, you do not need to explain the cost; but you do need to report the income as Gross Income on your 1040. Yes, if you bought a TV three years ago for a $100 and sold it for $50, the IRS would recognize you earning $50. As these are all personal items, they can not be deducted; regardless of gain or loss. Source Later in the year 2016 (October), I started an LLC (October - December) If these are items that you did not record early in the process of your LLC, then it is reported as a 100% gain as you can not prove any business expenses or costs to acquire associated with it. Source Refer to above answer. Refer to above answer. Conclusion Again, this is a income tax question that is split between business and personal use items. This is not a question of other's assessment of the value of the asset. It is solely based on the instruments of the IRS and their assessment of gains and losses from businesses. As OP does not have the necessary documents to prove otherwise, a cost basis of $0 must be assumed; thus you have a 100% gain on sale.\"" }, { "docid": "577479", "title": "", "text": "\"I recently moved out from my parents place, after having built up sufficient funds, and gone through these questions myself. I live near Louisville, KY which has a significant effect on my income, cost of living, and cost of housing. Factor that into your decisions. To answer your questions in order: When do I know that I'm financially stable to move out? When you have enough money set aside for all projected expenses for 3-6 months and an emergency fund of 4-10K, depending on how large a safety net you want or need. Note that part of the reason for the emergency fund is as a buffer for the things you won't realize you need until you move out, such as pots or chairs. It also covers things being more expensive than anticipated. Should I wait until both my emergency fund is at least 6 months of pay and my loans in my parents' names is paid off (to free up money)? 6 months of pay is not a good measuring stick. Use months of expenses instead. In general, student loans are a small enough cost per month that you just need to factor them into your costs. When should I factor in the newer car investment? How much should I have set aside for the car? Do the car while you are living at home. This allows you to put more than the minimum payment down each month, and you can get ahead. That looks good on your credit, and allows refinancing later for a lower minimum payment when you move out. Finally, it gives you a \"\"sense\"\" of the monthly cost while you still have leeway to adjust things. Depending on new/used status of the car, set aside around 3-5K for a down payment. That gives you a decent rate, without too much haggling trouble. Should I get an apartment for a couple years before looking for my own house? Not unless you want the flexibility of an apartment. In general, living at home is cheaper. If you intend to eventually buy property in the same area, an apartment is throwing money away. If you want to move every few years, an apartment can, depending on the lease, give you that. How much should I set aside for either investment (apartment vs house)? 10-20K for a down payment, if you live around Louisville, KY. Be very choosy about the price of your house and this gives you the best of everything. The biggest mistake you can make is trying to get into a place too \"\"early\"\". Banks pay attention to the down payment for a good reason. It indicates commitment, care, and an ability to go the distance. In general, a mortgage is 30 years. You won't pay it off for a long time, so plan for that. Is there anything else I should be doing/taking advantage of with my money during this \"\"living at home\"\" period before I finally leave the nest? If there is something you want, now's the time to get it. You can make snap purchases on furniture/motorcycles/games and not hurt yourself. Take vacations, since there is room in the budget. If you've thought about moving to a different state for work, travel there for a weekend/week and see if you even like the place. Look for deals on things you'll need when you move out. Utensils, towels, brooms, furniture, and so forth can be bought cheaply, and you can get quality, but it takes time to find these deals. Pick up activities with monthly expenses. Boxing, dancing, gym memberships, hackerspaces and so forth become much more difficult to fit into the budget later. They also give you a better credit rating for a recurring expense, and allow you to get a \"\"feel\"\" for how things like a monthly utility bill will work. Finally, get involved in various investments. A 401k is only the start, so look at penny stocks, indexed funds, ETFs or other things to diversify with. Check out local businesses, or start something on the side. Experiment, and have fun.\"" }, { "docid": "205742", "title": "", "text": "You need to look at the numbers when you're ready to transact. What your crossover is worth now, what the truck will lease for then, what financing deals may or may not be available will all change. I'm not sure why you've already decided you will lease the truck, perhaps you're planning to take advantage of some kind of business write off. I would personally never put anything down on a lease, though I have argued with people on here about that particular decision. The reality is you need to look at the numbers. Some banks will adjust the interest you pay on your lease to account for your down payment, some don't. Consider a $9,000 lease, $250 per month for 36 months. Consider you pay $1,000 up front as a down payment. Example 1: $1,000 lowers the amount due on the lease to $8,000 lowering your monthly payment to $222.22 from $250, the downpayment has accomplished nothing. Over the 36 months you will have still paid the same $9,000. Example 2: $1,000 up front changes the amount owed and other fees generally applicable to a lease (gap insurance etc) and your payment drops to $215, your total over the lease is now $8,740 ($1,000 down and $7,740 in payments). You need to look at the numbers. In general if you know you will be purchasing the truck at the end of the lease it's more financially advantageous to just purchase it from the start." }, { "docid": "427522", "title": "", "text": "\"Having just gone through selling a car, I can tell you that CarMax will most likely not be the best solution. I recently sold my '09 Pontiac Vibe which had a KBB and Edmonds value (private party sale) of around $6k. Trade-in value was around $4,800. I took it to the local CarMax for a quote, and they came back with $3,500. Refinancing is tricky. Banks have a set limit on how old a car they will finance. Many won't even offer financing if the vehicle has over 100k miles. We looked at refinancing our other car, and even getting the APR down over a point we would only have saved $15/mo or so. Banks typically offer much higher interest rates for used non-dealership cars and refinancing than they do for new cars, or even used cars purchased from a dealership. Assuming you have 2-3 years left on your loan, I don't think that refinancing would save you enough to be worth considering. CarMax sells cars in 1 of 2 ways. They are also up front with you about the process. They do not reference KBB or Edmonds or any other valuation tool other than their own internal system. They either take the car, spruce it up a bit, then resell it on their lot, or they sell it at auction. If they determine your car will be sold at auction, then they will offer you a rock bottom price. The determining factors that come into play include age of the car, mileage, and of course overall condition. If you Mini is still in good shape and doesn't have a lot of miles, then they may try to resell it on their lot, for which they could offer you closer to personal-sale price than trade-in. How many 2007's are for sale in your area? How much are they selling for? I did sell them a truck back in 2005 and received $200 more than KBB valued it for, but it was in great shape, only a couple of years old, relatively low mileage, and it was in high demand. God bless the South and their love for trucks! I ended up selling my Pontiac to another local car dealership. They offered me $5,300 (after negotiating, leaving the dealership, then negotiating more over the phone). It took me a day and a half and really very little effort. I have several friends that have gone through the same thing with selling cars, and all have had similar luck going to other dealerships, where prices can be negotiated, rather than CarMax. CarMax has no incentive to \"\"settle\"\" or forgive your loan. If you really want to pay it off, save up what you believe the difference will be, then shop your car around the local dealerships and get prices for your Mini. Remember that dealers have to turn a profit, so be reasonable with your negotiation. If you can find comparable vehicles in your area listed for $X,000 then knock $1,500 off that price and tell the dealerships that's what you want.\"" }, { "docid": "406377", "title": "", "text": "I know I came a little late to this discussion but let me give you my opinion. I think that purchasing the BMW is a terrible investment for obvious reasons. Once you drive the car off the dealer's lot the car loses anywhere from 5-10k in value immediately. Its a terrible investment and something that you will regret in the future. However, whether you buy it now or you hold off we all know you are eventually still going to get it. I graduated college and was in a similar situation as the one you are now. I started making 60k after college and leased a brand new BMW. Like I said it was a terrible investment, but I do not regret it for one day. Ive had so much fun in that car that I can't even begin to explain. We only live once and you don't want to be one of those guys that looks back and says I should've this I should've that, JUST DO IT. We all know it won't be possible when you have a wife and kids so just splurge now and be responsible later LOL." }, { "docid": "67663", "title": "", "text": "In the U.S., most car dealers provide lease financing through one company (usually a subsidiary of the auto manufacturer). Whereas they provide loan financing through a variety of companies, some of whom offer very high interest rate loans and sell the loans as collateralized debt obligations (CDOs). Have you checked whether Chase or First Tech Credit Union offers a suitable car lease?" }, { "docid": "509535", "title": "", "text": "\"—they will pull your credit report and perform a \"\"hard inquiry\"\" on your file. This means the inquiry will be noted in your credit report and count against you, slightly. This is perfectly normal. Just don't apply too many times too soon or it can begin to add up. They will want proof of your income by asking for recent pay stubs. With this information, your income and your credit profile, they will determine the maximum amount of credit they will lend you and at what interest rate. The better your credit profile, the more money they can lend and the lower the rate. —that you want financed (the price of the car minus your down payment) that is the amount you can apply for and in that case the only factors they will determine are 1) whether or not you will be approved and 2) at what interest rate you will be approved. While interest rates generally follow the direction of the prime rate as dictated by the federal reserve, there are market fluctuations and variances from one lending institution to the next. Further, different institutions will have different criteria in terms of the amount of credit they deem you worthy of. —you know the price of the car. Now determine how much you want to put down and take the difference to a bank or credit union. Or, work directly with the dealer. Dealers often give special deals if you finance through them. A common scenario is: 1) A person goes to the car dealer 2) test drives 3) negotiates the purchase price 4) the salesman works the numbers to determine your monthly payment through their own bank. Pay attention during that last process. This is also where they can gain leverage in the deal and make money through the interest rate by offering longer loan terms to maximize their returns on your loan. It's not necessarily a bad thing, it's just how they have to make their money in the deal. It's good to know so you can form your own analysis of the deal and make sure they don't completely bankrupt you. —is that you can comfortable afford your monthly payment. The car dealers don't really know how much you can afford. They will try to determine to the best they can but only you really know. Don't take more than you can afford. be conservative about it. For example: Think you can only afford $300 a month? Budget it even lower and make yourself only afford $225 a month.\"" }, { "docid": "338663", "title": "", "text": "But.. what I really want to know.... is it illegal, particularly the clause REQUIRING a trade in to qualify for the advertised price? The price is always net of all the parts of the deal. As an example they gave the price if you have $4000 trade in. If you have no trade in, or a trade in worth less than 4K, your final price for the new car will be more. Of course how do you know that the trade in value they are giving you is fair. It could be worth 6K but they are only giving you a credit of 4K. If you are going to trade in a vehicle while buying another vehicle the trade in should be a separate transaction. I always get a price quote for selling the old car before visiting the new car dealer. I do that to have a price point that I can judge while the pressure is on at the dealership.. Buying a car is a complex deal. The price, interest rate, length of loan, and the value of the trade in are all moving parts. It is even more complex if a lease is involved. They want to adjust the parts to be the highest profit that you are willing to agree to, while you think that you are getting a good deal. This is the fine print: All advertised amounts include all Hyundai incentives/rebates, dealer discounts and $2500 additional down from your trade in value. +0% APR for 72 months on select models subject to credit approval through HMF. *No payments or 90 days subject to credit approval. Value will be added to end of loan balance. 15MY Sonata - Price excludes tax, title, license, doc, and dealer fees. MSRP $22085- $2036 Dealer Discount - $500 HMA Lease Cash - $500 HMA Value Owner Coupon - $1000 HMA Retail Bonus Cash - $500 HMA Military Rebate - $500 HMA Competitive Owner Coupon - $400 HMA College Grad Rebate - $500 HMA Boost Program - $4000 Trade Allowance = Net Price $12149. On approved credit. Certain qualifications apply to each rebate. See dealer for details. Payment is 36 month lease with $0 due at signing. No security deposit required. All payment and prices include HMA College Grad Rebate, HMA Military Rebate, HMA Competitive Owner Coupon and HMA Valued Owner Coupon. Must be active military or spouse of same to qualify for HMA Military Rebate. Must graduate college in the next 6 months or within the last 2 years to qualify for HMA College Grad rebate. Must own currently registered Hyundai to qualify for HMA Valued Owner Coupon. Must own qualifying competitive vehicle to qualify for HMA Competitive Owner Coupon." }, { "docid": "436119", "title": "", "text": "It looks like you'd just be charging yourself interest and paying yourself back, because it's a pass-through entity, as I'm sure you know. (This assumes you're the only member of the LLC.) It all depends on how much money you want inside the protective cover of the LLC, and for how long. It doesn't seem to make much difference how you get the cash in or out, or how complicated or easy you make it for yourself." }, { "docid": "318676", "title": "", "text": "\"Village? Are you in the states? I am not saying start a car dealership, I am saying look for cars that are sold below the value they usually go for. This takes a bit of time and effort of looking at each car and seeing what they generally sell for. Blue book is a decent indicator, but do not go solely on that alone. Go to a car auction, and write down each car you can, judge each car, the mileage, and condition, and see what it goes for at auction. Then go to other areas and find other similar cars and see what they are sold for there. Build up a database of sorts, and the cars with the best margins, and preferably higher turnover, and get those. This is not a \"\"business\"\" per say, it is a way to make money and learn the market for a while. Once you get a good bit of general knowledge, and build up a lot more money, then you could likely start a car dealership. Depending on your area you will likely need a good 50k to get started, maybe more depending on insurance and lease agreements.\"" }, { "docid": "516631", "title": "", "text": "I might be missing something, but I always understood that leasing is about managing cash-flow in a business. You have a fixed monthly out-going as opposed to an up-front payment. My accountant (here in Germany) recommended: pay cash, take a loan (often the manufactures offer good rates) or lease - in that order. The leasing company has to raise the cash from somewhere and they don't want to make a loss on the deal. They will probably know better than I how to manage that and will therefore be calculating in the projected resale value at the end of the leasing period. I can't see how an electric car would make any difference here. These people are probably better informed about the resale value of any type of car than I am. My feeling is to buy using a loan from the manufacturer. The rates are often good and I have also got good deals on insurance as a part of that package. Here in Germany the sales tax (VAT) can be immediately claimed back in full when the loan deal is signed." }, { "docid": "362778", "title": "", "text": "The major reason to start an LLC for side work is if you want the additional personal liability protection afforded by one. If you're operating as a sole proprietor, you may be exposing yourself to liability: debts and judgments against your business can put your personal assets at risk! So, if you're intending to continue and grow your side work in the future, you ought to consider the LLC sooner than later. It's also an important legal decision and you should consider seeking a professional opinion. The Wall Street Journal has a brief guide titled How to Form an LLC. Here are some notable excerpts: A limited liability company, or LLC, is similar to a partnership but has the legal protections of personal assets that a corporation offers without the burdensome formalities, paperwork and fees. [...] Some states charge annual fees and taxes that can diminish the economic advantage of choosing to become an LLC. Among LLC advantages: pass-through taxation – meaning the profits and losses “pass through” the business to the individuals owning the business who report this information on their own personal tax returns. The result can be paying less in taxes, since profits are not taxed at both the business level and the personal level. Another plus: Owners aren’t usually responsible for the company’s debts and liabilities. [...] Also check out onstartups.com's Startup 101: Should You Form An Inc. or An LLC? Here are some additional articles that discuss the advantages / disadvantages of forming an LLC:" }, { "docid": "7311", "title": "", "text": "Which way would save the most money? Paying of the car today would save the most money. Would you borrow money at 20% to put it in a savings account? That's effectively what she is doing by not paying off the car. If it were me, I would pay off the car today, and add the car payment to my savings account each month. If the car payment is $400, that's $1,500 a month that can be saved, and the $12k will be back in 8 months. That said - remember that this is your GIRLFRIEND, not a spouse. You are not in control (or responsible for) her finances. I would not tell her that she SHOULD do this - only explain it to her in different ways, and offer advice as to what YOU would do. Look together at how much has been paid in principal and interest so far, how much she's paying in interest each month now, and how much she'll pay for the car over the life of the loan. (I would also encourage her not to buy cars with a 72-month loan, which I'm guessing is how she got here). In the end, though, it's her decision." }, { "docid": "273480", "title": "", "text": "\"This question has been asked and answered before. Financially, owning a car will be more economical than leasing one in most cases. The reason for this is that leasing arrangements are designed to make a profit for the leasing company over and above the value of the car. A leasing company that does not profit off their customers will not be in business for long. This is a zero-sum game and the leasing customer is the loser. The lion's share of the customer losses are in maintenance and in the event of an accident or other damage. In both cases, leasing arrangements are designed to make a large profit for the owner. The average customer assumes they will never get into an accident and they underestimate the losses they will take on the maintenance. For example, if both oxygen sensors need to be replaced and it would have cost you $800 to replace them yourself, but the leasing company charges you $1200, then BOOM! you just lost $400. If the car is totaled, the customer will lose many thousands of dollars. Leasing contracts are designed to make money for the owner, not the customer. Another way leasing agents make money is on \"\"required maintenance\"\". Most leasing contracts require the leasor to perform \"\"required\"\" maintenance, oil changes, tire rotations, etc. Also, with newer cars manufacturers recalls are common. Those are required as well. Nearly nobody does this maintenance correctly. This gives the agent the excuse to charge the customer thousands of dollars when the vehicle is returned. Bills of $4000 to $6000 on a 3 year lease for failure to perform required maintenance are common. Its items like this that allow the leasing agent to get a profit on what looks like a \"\"good deal\"\" when the customer walked in the door 3 years previously. The advantage of leasing is that it costs less up front and it is more convenient to switch to a different car because you don't have to sell the car.\"" }, { "docid": "546329", "title": "", "text": "The LLC (not you) is probably in debt to the California FTB. Any LLC registered in California must pay at least $800 a year, until it is officially dissolved (i.e.: notice of cancellation/dissolution properly filed with the California Secretary of State). The FTB may come after members (including you) personally, if it can prove that the failure to pay was due to your negligence. Talk to a CA-licensed EA/CPA about how to resolve this. Otherwise, at least from what you've described, there were no other taxable events. LLC is a disregarded entity, so the IRS doesn't care about it much anyway (unless someone was stupid enough to elect it to be taxed as a corporation, that is). Keep in mind that when in doubt - you are always better off with a professional (a CPA/EA licensed in your State) advice." }, { "docid": "288189", "title": "", "text": "This is me going off my assumptions here... With Lyft, I think you'd be right. Most people are doing it as a part-time gig and would otherwise own/lease a car. With Uber, most people are doing it as a career. Most drivers are former taxi drivers. Uber has started promoting programs to help drivers lease new cars with -- I'd assume -- discounted rates. Thus, Uber is promoting its drivers to make a financial commitment to get new cars but is still treating them as independent contractors who can be terminated from the system without cause and are subject to Uber's whims to reduce or change the business model/pricing structure. It's a huge risk for drivers to take, and I fear most aren't accurately assessing the risk when they sign up." }, { "docid": "107536", "title": "", "text": "Supposedly this also means that I am free from having to pay California corporate taxes? Not in the slightest. Since you (the corporate employee) reside in CA - the corporation is doing business in CA and is liable for CA taxes. Or, does this mean I am required to pay both CA taxes and Delaware fees? (In this case, minimal, just a paid agent from incorporate.com) I believe DE actually does have corporate taxes, check it out. But the bottom line is yes, you're liable for both CA and DE costs of doing corporate business (income taxes, registered agents, CA corp fee, etc). Is there any benefit at all for me to be a Delaware C-Corp or should I dissolve and start over. Or just re-incorporate as California LLC Unless you intend to go public anytime soon or raise money from VCs/investors - there's no benefit whatsoever in incorporating in DE. You should seek a legal advice with an attorney, of course, since benefits are legal issues (usually related to choosing jurisdiction for litigation etc). If you're a one-person freelancer, doing C-Corp was not the best decision as well. Tax-wise you'd be much better off with a S-Corp, or a LLC - both pass-through and have no (Federal) entity-level taxes. Corporate rates are generally higher than individual rates, and less deductions can be taken. In California, check with a CPA/EA licensed in the State, since both S-Corp and LLC would be taxed, and taxed differently." } ]

[ { "docid": "374258", "title": "", "text": "\"From Wikipedia: Managerial accounting is used primarily by those within a company or organization. Reports can be generated for any period of time such as daily, weekly or monthly. Reports are considered to be \"\"future looking\"\" and have forecasting value to those within the company.** Financial accounting is used primarily by those outside of a company or organization. Financial reports are usually created for a set period of time, such as a fiscal year or period. Financial reports are historically factual and have predictive value to those who wish to make financial decisions or investments in a company. At my university, managerial accounting focused more on the details of how costs were managed in the company, the future of the business, etc. while the courses that were considered financial accounting were more from the point of view of a financial analyst or investor, like you said. The financial accountancy material covered analysis of financial statements and the associated investment decisions, among other things. These areas overlapped in areas like the production of financial statements, since the company also needs to consider how analysts will interpret these statements, and dividend policy, corporate tax accounting, etc. The Wikipedia articles on managerial accounting and financial accounting may provide helpful information as well. Disclaimer: I took an introductory accounting course in university and nothing more, so my knowledge of the course structures, even at my alma mater, is secondhand recollection at best. I'm sure there are more similarities and differences of which I'm unaware, and I would assume that forensic accountants, auditors, etc. dabble in both these areas and others.\"" } ]

[ { "docid": "210347", "title": "", "text": "\"APY stands for Annual Percentage Yield, a calculation done by the financial institution to make simple comparisons of account value after 1 year between competing accounts. The APY includes the effects of compound interest regardless of the rate of interest, so the simple answer is: no, your return is only your principle multiplied by the APY after a year. Credit Unions are more member participatory than a bank, so the name \"\"share\"\" implies that you own a share of the credit union and it's future. It's possible that the CU could elect to pay a dividend on top of your interest rate. Since you have the option to credit the dividend to the share certificate account or another place, it seems that interest would be paid on the dividends left in the SC on the compounding schedule at the contracted rate. You would have to look at the terms of the account to verify precisely when the dividend is payed, whether it's a value above and beyond the interest, and how it is compounded into our account.\"" }, { "docid": "372808", "title": "", "text": "You can perfectly well manage their wealth without transferring their money into your account first. Just make them open their own account on their name then ask them for credentials and then manage their money from within their own account. That way everyone will be taxed according to their wealth (which is probably advantageous but you probably have to help them with the paperwork) and it is clear at every time what belongs to whom and your relatives can at every time access their wealth. These are big advantages (for them). This keeps you at the role of an adviser (a very active one though) which should have almost zero legal ramifications for you unless you try to deceive your relatives. You may want to shift wealth between accounts to minimize tax burdens, but that comes at the risk that should the family relations get worse this might result in anger. You could open up a registered society, all members getting shares and voting rights, making you the CEO, but that should be a lot of paperwork and maybe only a good idea for large amounts of money. If you decide to transfer money between accounts of different persons this is like a gift. It might invoke a gift tax in your area. All in all, I strongly advise you to make them all open up their own accounts and then just operate the accounts and manage their wealth in their name. Sell it to them as the solution that retains them maximum ownership." }, { "docid": "427365", "title": "", "text": "What you want is a position transfer, likely by ACATS. This is a transfer from one IRA to another without having to liquidate positions to do so. In effect, the brokerage firm is just transferring records from your existing IRA to your new IRA. You will need to watch out to make sure your new IRA account can hold your positions for this to work. For example, some brokerages allow you to hold fractional shares but others don't. (The fractional share amounts would be sold automatically prior to transfer.) Another example might be different fund families could be allowed between different brokerages. The general process is open your new IRA account, initiate the ACATS xfer from your new account, your old IRA account brokerage sends the positions over, and after a week or so your new IRA brokerage notifies you that everything is transferred. I've switched IRAs a couple times via this mechanism and never been charged a fee, but I've always stuck with the larger brokerages like Fidelity, TD Ameritrade, and Interactive Brokers." }, { "docid": "327060", "title": "", "text": "\"Buy term and invest the difference is certainly the standard recommendation, and for good reason. When you start looking at some sample numbers the \"\"buy term and invest the difference\"\" strategy starts to look very good. Here are the rates I found (27 yr old in Texas with good health, non-smoker, etc): $200k term life: $21/month $200k whole life: $177/month If you were to invest the difference in a retirement account for 40 years, assuming a 7% rate of return (many retirement planning estimates use 10%) you would have $411,859 at the end of that period. (If you use 10% that figure jumps to over $994k.) Needless to say, $400k in a retirement account is better than a $200k death benefit. Especially since you can't get the death benefit AND the cash value. Certainly one big difficulty is making sure you invest that difference. The best way to handle that is to set up a direct deposit that goes straight from your paycheck to the retirement account before it even touches your bank account. The next best thing would be an automatic transfer from your bank account. You may wonder 'What if I can no longer afford to invest that money?' First off, take a second and third look at your finances before you start eating into that. But if financial crisis comes and you truly can't afford to fund your own life insurance / retirement account then perhaps it will be a good thing you're not locked into a life insurance policy that forces you to pay those premiums. That extra freedom is another benefit of the \"\"buy term and invest the difference\"\" strategy. It is great that you are asking this question now while you are young. Because it is much easier to put this strategy into play now while you are young. As far as using a cash value policy to help diversify your portfolio: I am no expert in how to allocate long term investments after maxing out my IRA and 401k. (My IRA maxes out at $5k/year, another $5k for my wife's, another $16.5k for my 401k.) Before I maxed that out I would have my house paid for and kid's education saved for. And by then it would make sense to pay a financial adviser to help you manage all those investments. They would be the one to ask about using a cash value policy similar to @lux lux's description. I believe you should NEVER PUT YOUR MONEY INTO SOMETHING YOU DON'T UNDERSTAND. Cash value policies are complex and I don't fully understand them. I should add that of course my calculations are subject to the standard disclaimer that those investment returns aren't guaranteed. As with any financial decision you must be willing to accept some level of risk and the question is not whether to accept risk, but how much is acceptable. That's why I used 7% in my calculation instead of just 10%. I wanted to demonstrate that you could still beat out whole life if you wanted to reduce your risk and/or if the stock market performs poorly.\"" }, { "docid": "302521", "title": "", "text": "This is similar to your TFSA question. While the S in RRSP or TFSA stands for savings, it does not stipulate exactly what instruments you use to build up those savings. With few exceptions, you can hold any type of investment in either an RRSP or TFSA. Thus, do not think of them as savings accounts per se, but more like umbrella accounts, or plans. It's actually the financial industry that creates these misnomers of so-called RRSPs, which are usually GICs or balanced mutual funds held inside an RRSP plan, or TFSAs, which are literally savings accounts held inside a TFSA plan. The most versatile accounts are the self-directed RRSP or TFSA accounts, usually through a discount broker, where you can purchase many different types of investments inside your registered accounts, including stocks, bonds, mutual funds, GICs, gold, etc. Thus a share purchase plan held inside an RRSP is completely eligible and may be a sensible investment for retirement savings." }, { "docid": "293389", "title": "", "text": "\"This is the sad state of US stock markets and Regulation T. Yes, while options have cleared & settled for t+1 (trade +1 day) for years and now actually clear \"\"instantly\"\" on some exchanges, stocks still clear & settle in t+3. There really is no excuse for it. If you are in a margin account, regulations permit the trading of unsettled funds without affecting margin requirements, so your funds in effect are available immediately after trading but aren't considered margin loans. Some strict brokers will even restrict the amount of uncleared margin funds you can trade with (Scottrade used to be hyper safe and was the only online discount broker that did this years ago); others will allow you to withdraw a large percentage of your funds immediately (I think E*Trade lets you withdraw up to 90% of unsettled funds immediately). If you are in a cash account, you are authorized to buy with unsettled funds, but you can't sell purchases made on unsettled funds until such funds clear, or you'll be barred for 90 days from trading as your letter threatened; besides, most brokers don't allow this. You certainly aren't allowed to withdraw unsettled funds (by your broker) in such an account as it would technically constitute a loan for which you aren't even liable since you've agreed to no loan contract, a margin agreement. I can't be sure if that actually violates Reg T, but when I am, I'll edit. While it is true that all marketable options are cleared through one central entity, the Options Clearing Corporation, with stocks, clearing & settling still occurs between brokers, netting their transactions between each other electronically. All financial products could clear & settle immediately imo, and I'd rather not start a firestorm by giving my opinion why not. Don't even get me started on the bond market... As to the actual process, it's called \"\"clearing & settling\"\". The general process (which can generally be applied to all financial instruments from cash deposits to derivatives trading) is: The reason why all of the old financial companies were grouped on Wall St. is because they'd have runners physically carting all of the certificates from building to building. Then, they discovered netting so slowed down the process to balance the accounts and only cart the net amounts of certificates they owed each other. This is how we get the term \"\"bankers hours\"\" where financial firms would close to the public early to account for the days trading. While this is all really done instantly behind your back at your broker, they've conveniently kept the short hours.\"" }, { "docid": "228396", "title": "", "text": "from my experience working in the family business, the first step is to make sure you HAVE the authority, one of the problems I encountered was that we were given managerial positions were we not empowered to do anything, which created many problems which comes to my second point, make sure you have clear roles and responsibilities, you have to know what you should be doing, if you don't, find out asap what you and your other managers are supposed to do, and lastly, make sure there is accountability and every family member and employees must be treated equally so that if your employees or you yourself don't do something you are supposed to do, you can be held accountable for your actions, you won't believe how easy family members get special treatment, how family members miss deadlines and nobody cares, and how family members are managers when really they are just daddy's spoiled puppets being there to be peons (not to think), and Facebook more than usual. I recommend you read all literature you can get your hands on on dealing with family Enterprises and how to deal with common issues, good luck, I for one am desperately searching for jobs outside the family business because I can't take it anymore." }, { "docid": "568197", "title": "", "text": "\"First, please allow me to recommend that you do not try gimmickry when financials do give expected results. It's a sure path to disaster and illegality. The best route is to first check if accounts are being properly booked. If they are then there is most likely a problem with the business. Anything out of bounds yet properly booked is indeed the problem. Now, the reason why your results seem strange is because investments are being improperly booked as inventory; therefore, the current account is deviating badly from the industry mean. The dividing line for distinguishing between current and long term assets is one year; although, modern financial accounting theorists & regulators have tried to smudge that line, so standards do not always adhere to that line. Therefore, any seedlings for resale should be booked as inventory while those for potting as investment. It's been some time since I've looked at the standards closely, but this used to fall under \"\"property, plant, & equipment\"\". Generally, it is a \"\"capital expenditure\"\" by the oldest definition. It is not necessary to obsess over initial bookings because inventory turnover will quickly resolve itself, so a simple running or historical rate can be applied to the seedling purchases. The books will now appear more normal, and better subsequent strategic decisions can now be made.\"" }, { "docid": "469738", "title": "", "text": "I don't know if it's legal but your talking about arbitraging the rates between a personal savings account and a business account. I also don't know those rates but will venture to guess that they are not materially different, after taking into account the cost of setting up and registering an LLC, for it to be worth the time and effort." }, { "docid": "172518", "title": "", "text": "\"There's no difference between \"\"individual\"\" and \"\"business\"\" in this context. What is a personal transaction that involves credit card? You have a garage sale? Its business. You sell something on craigslist - business. Want to let people pay for your daughter's girlscout cookies - business. There's no difference between using Paypal (which has its own credit card reader, by the way) and Square in this context. No-one will ask for any business licenses or anything, just your tax id (be it SSN or EIN). Its exactly the same as selling on eBay and accepting credit cards through your Paypal account, conceptually (charge-back rules are different, because Square is a proper merchant account, but that's it).\"" }, { "docid": "522718", "title": "", "text": "\"&gt; Also, if accounting suddenlly decides to hire a bunch of new employees why should the cost for the computers come out of IT's budget? What does it even mean for something \"\"to come out of IT's budget?\"\" As far as I can tell, what it means is that you don't understand the difference between a planning tool and a t-account. &gt; As long as IT's budget is subserviant to the whims of other departments you can't really call it a budget at all. Rather, it is just a pool of money that anyone can dip in to. Budgets aren't pools of money at all, they're planning tools. Actual pools of money are t-accounts. I am nearly 100% certain that your IT department doesn't not have its own t-account, though once the distinction between budgets and t-accounts are so thoroughly confused that you are commonly saying things \"\"come out of our budget,\"\" the next logical step can appear to be inter-departmental charge-backs. The reality is that business expenses are driven by growth and constrained by cash flow. Managers must learn how to produce budgets that anticipate growth, so that cash flow can be managed by the accountants, and so that executives can make decisions about priorities. Doing inter-department charge-backs is a way of doing this in an organization whose relationships are so fucked up that you can't do it by actually talking to each other. Have fun with that.\"" }, { "docid": "166441", "title": "", "text": "\"Your bank is maintaining different states for transactions, and changing the state depending on real-world events and the passage of time. withdraw €100 from my bank account on 30 September […] my bank does not process the transaction until 2 October. The bank probably have that transaction marked as “pending” on 30 September, and “cleared” on 2 October. transfer €100 from Bank A to Bank B, Bank A's statement dates the transaction on 20 September, but Bank B dates it as coming in on 22 September. Similarly, bank A will have the transaction marked as “pending” initially. Bank B won't have a corresponding transaction at all, until later; they'll have it “pending” too, until they confirm the transfer. Then (probably at different times from each other) the banks will each mark the corresponding transactions “cleared”. The bookkeeping software that I use doesn't seem to allow for this \"\"transfer time\"\" between accounts. When I enter a transfer from one account to another, they both have to have the same date. You may want to learn about different bases of accounting. The simpler option is “cash-based” accounting. The simplification comes from assuming transactions take no time to transfer from one account to another, and are instantly available after that. Your book-keeping software probably books using this simpler basis for your personal finances. The more complex “accrual-based” accounting tracks each individual transaction through multiple states – “pending”, “transfer”, “cleared”, etc. – with state changes at different times – time of trade, time of settlement, etc. – to more accurately reflect the real world agreements between parties, and different availability of the money to each party. So if your book-keeping program uses “cash basis”, you'll need to pick which inaccuracy you want: book the transfer when you did it, or book the transfer when the money is available at the other end.\"" }, { "docid": "319627", "title": "", "text": "Hmm, I see so the difference between a capital account flow and a current account flow is whether the capital belongs to a citizen of the country or not. You mentioned that moving to a country i.e. immigration is also another remittance flow. So if a country suddenly received a large number of rich immigrants, it would show up as an increase in the current account?" }, { "docid": "89161", "title": "", "text": "\"You ask about the difference between credit and debit, but that may be because you're missing something important. Regardless of credit/debit, there is value in carrying two different cards associated with two different accounts. The reason is simply that because of loss, fraud, or your own mismanagement, or even the bank's technical error, any card can become unusable for some period of time. Exactly how long depends what happened, but just sending you a new card can easily take more than one business day, which might well be longer than you'd like to go without access to any funds. In that situation you would be glad of a credit card, and you would equally be glad of a second debit card on a separate account. So if your question is \"\"I have one bank account with one debit card, and the only options I'm willing to contemplate are (a) do nothing or (b) take a credit card as well\"\", then the answer is yes, take a credit card as well, regardless of the pros or cons of credit vs debit. Even if you only use the credit card in the event that you drop your debit card down a drain. So what you can now consider is the pros and cons of a credit card vs managing an additional bank account -- unless you seriously hate one or more of the cons of credit cards, the credit card is likely to win. My bank has given me a debit card on a cash savings account, which is a little scary, but would cover most emergencies if I didn't have a credit card too. Of course the interest rate is rubbish and I sometimes empty my savings account into a better investment, so I don't use it as backup, but I could. Your final question \"\"can a merchant know if I give him number of debit or credit card\"\" is already asked: Can merchants tell the difference between a credit card and embossed debit card? Yes they can, and yes there are a few things you can't (or might prefer not to) do with debit. The same could even be said of Visa vs. Mastercard, leading to the conclusion that if you have a Visa debit you should look for a Mastercard credit. But that seems to be less of an issue as time goes on and almost everywhere in Europe apparently takes both or neither. If you travel a lot outside the EU then you might want to be loaded down with every card under the sun, and three different kinds of cash, but you'd already know that without asking ;-)\"" }, { "docid": "37110", "title": "", "text": "\"The Tax Court ruling Todd mentioned was that you can only do one roll-over in a 12-months period. I.e.: if you have already done a roll over (even if it is between different accounts) - you cannot do it again between any of your IRA accounts for 12 months. So for the \"\"60-days loan\"\" trick to work you must ensure that: You haven't done a roll-over within the last 12 months; and You're not going to do a roll-over within the next 12 months. Note, that the Tax Court took into the consideration that the IRS pub. 590 was explicitly saying that you can do multiple roll-overs as long as different accounts are involved. The Court ruled, that the IRS instructions are NOT a legal authority. I.e.: the IRS can write in the instructions whatever they want, but if it contradicts the law (as it did in this case) - the law always prevails. This is only for indirect rollovers (where you actually get the money and then re-deposit it within 60 days), trustee to trustee rollovers are not limited. This limitation is codified in 26 U.S. Code § 408(d)3(B).\"" }, { "docid": "489278", "title": "", "text": "The deposit insurance isn't provided by the bank; it's provided by the Singapore Deposit Insurance Corporation (SDIC). In the event that the bank fails or is declared insolvent, the SDIC will pay deposit holders their total balance in all accounts with that bank, up to S$50,000. If you hold S$60,000 in all of your insured accounts, you'll only receive S$50,000 if the bank fails. The SDIC provides an example page with sample calculations, and this is exactly what they show. If you deposit an amount greater than $S50,000, it's only insured up to S$50,000. So does it mean one should open multiple accounts under different banks to spread the money around and maintain only S$50,000 in one deposit account? This is one option. The calculations page I linked to above gives this reminder: Deposits are not insured separately in each branch office of a DI Scheme member i.e. all your eligible accounts maintained with different branches of a DI Scheme member are aggregated and insured up to S$50,000. This seems like common sense, but it's important to remember that if you open an account with two branch offices of Bank A, your deposits are aggregated and insured up to S$50,000. The SDIC insurance is per institution (called a Deposit Insurance Member), not per branch. If you hold S$45,000 in each branch office, for a total of S$90,000, you're still only insured up to S$50,000 for that bank. If you want to spread out your accounts between multiple banks, make sure they're different banks, not just different branches. Another option, if it applies to you, is to open a joint account with your spouse. In the FAQ page, the SDIC gives this example under point 14: if you and your husband have a joint account with S$70,000, and you have a separate account of S$20,000, your total deposits of S$55,000 will be covered to the maximum of S$50,000. The deposit of $S70,000 is split evenly between the spouses, so in the eyes of the SDIC, each are holding S$35,000. Then, the husband's additional S$20,000 is added to S$35,000 for a total of S$50,000. This is then insured up to S$50,000 as usual. I'm sure there are other options specific to Singapore that I'm not aware of; if you're well above the limit, i.e. holding millions of dollars, I'm sure a professional accountant in Singapore could guide you further." }, { "docid": "457989", "title": "", "text": "\"In answering your question as it's written: I don't think you're really \"\"missing\"\" something. Different banks offer different rates. Online banks, or eBanking solutions, such as CapitalOne, Ally, Barclays, etc., typically offer higher interest rates on basic savings accounts. There are differences between Money Market accounts and Standard Savings accounts, but primarily it comes down to how you can access your cash. This may vary based on bank, but Ally has a decent blurb about it: Regular savings accounts are easy to open and, when you choose an online bank like Ally Bank, you tend to get interest rates that are more competitive than brick-and-mortar counterparts, according to Bankrate.com. Additionally, as a member of the FDIC, Ally Bank gives you peace of mind knowing that the money in your Ally Bank Online Savings Account is insured to the maximum allowed by the law. Money market accounts are easy to open, too. And again, online banks may offer better rates than traditional banks. Generally, you have a bit more flexibility of access with a money market account than you do with a savings account. You can access funds in your Ally Bank Money Market Account through electronic fund transfers, checks, debit cards and ATM withdrawals. With savings accounts, your access is limited to electronic funds transfers or telephone withdrawals (and in-person withdrawals at traditional banks). Both types of accounts are subject to federal transaction limits. Here's a bit more information about a Money Market Account and why the rate might be a little bit higher (from thesimpledollar.com): A money market deposit account is a bit different. The restrictions on what a bank can do with that money are somewhat looser – they can often invest that money in things such as treasury notes, certificates of deposit, municipal bonds, and so on in addition to the tight restrictions of a normal savings accounts. In other words, the bank can take your money and invest it in other investments that are very safe. Now outside of your question, if you have $100K that you want to earn interest on, I'd suggest looking at options with higher rates of return rather than a basic savings account which will top out around 1% or so. What you do with that money is dependent on how quickly you need access to it, and there are a lot of Q&A's on this site that cover suggestions.\"" }, { "docid": "347946", "title": "", "text": "\"To answer your question briefly: net income is affected by many things inside and outside of management control, and must be supplemented by other elements to gain a clear picture of a company's health. To answer your question in-depth, we must look at the history of financial reporting: Initially, accounting was primarily cash-based. That is, a business records a sale when a customer pays them cash, and records expenses when cash goes out the door. This was not a perfectly accurate system, as cashflow might be quite erratic even if sales are stable (collection times may differ, etc.). To combat problems with cash-based accounting, financial reporting moved to an accrual-based system. An accrual is the recording of an item before it has fully completed in a cash transaction. For example, when you ship goods to a customer and they owe you money, you record the revenue - then you record the future collection of cash as a balance sheet item, rather than an income statement item. Another example: if your landlord charges you rent on December 31st for the past year, then in each month leading up to December, you accrue the expense on the income statement, even though you haven't paid the landlord yet. Accrual-based accounting leaves room for accounting manipulation. Enron is a prime example; among other things, they were accruing revenue for sales that had not occurred. This 'accelerated' their income, by having it recorded years before cash was ever collectible. There are specific guidelines that restrict doing things like this, but management will still attempt to accelerate net income as much as possible under accounting guidelines. Public companies have their financial statements audited by unrelated accounting firms - theoretically, they exist to catch material misstatements in the financial statements. Finally, some items impacting profit do not show up in net income - they show up in \"\"Other Comprehensive Income\"\" (OCI). OCI is meant to show items that occurred in the year, but were outside of management control. For example, changes in the value of foreign subsidiaries, due to fluctuations in currency exchange rates. Or changes in the value of company pension plan, which are impacted by the stock market. However, while OCI is meant to pick up all non-management-caused items, it is a grey area and may not be 100% representative of this idea. So in theory, net income is meant to represent items within management control. However, given the grey area in accounting interpretation, net income may be 'accelerated', and it also may include some items that occurred by some 'random business fluke' outside of company control. Finally, consider that financial statements are prepared months after the last year-end. So a company may show great profit for 2015 when statements come out in March, but perhaps Jan-March results are terrible. In conclusion, net income is an attempt at giving what you want: an accurate representation of the health of a company in terms of what is under management control. However it may be inaccurate due to various factors, from malfeasance to incompetence. That's why other financial measures exist - as another way to answer the same question about a company's health, to see if those answers agree. ex: Say net income is $10M this year, but was only $6M last year - great, it went up by $4M! But now assume that Accounts Receivable shows $7M owed to the company at Dec 31, when last year there was only $1M owed to the company. That might imply that there are problems collecting on that additional revenue (perhaps revenue was recorded prematurely, or perhaps they sold to customers who went bankrupt). Unfortunately there is no single number that you can use to see the whole company - different metrics must be used in conjunction to get a clear picture.\"" }, { "docid": "97977", "title": "", "text": "Keep in mind that in order to fund your online casino account, you either had to provide credit/debit card info, or you had to give them your bank account number band routing number already. Now, assuming you've seen no fraudulent activity on your account(s) since then, and it was you who initiated the contact with them, what they're asking for is not totally unreasonable, nor is it all that unusual. MANY companies require you to provide account/routing info to do financial business with them, which doesn't automatically equate to nefarious purposes, so don't let yourself go down that rabbit hole unless there's some other serious red flag to the situation which you haven't shared with us. It is a bit odd they'd send you a check for a portion of the winnings, but maybe that's to demonstrate good faith on their part as to why they need you to provide them information to send the remainder of your winnings. That being said, the suggestion to open a bank account solely for purposes of receiving your winnings is a good one. I would go a step further and, once the transfer is made, go to the bank in person and withdraw it in cash. Then you can deposit it into your regular bank account without there being any possible connection between the two, just in case you decide to indulge your fears about this. Good luck!" } ]

[ { "docid": "344928", "title": "", "text": "\"Wyoming is a good state for this. It is inexpensive and annual compliance is minimal. Although Delaware has the best advertising campaign, so people know about it, the reality is that there are over 50 states/jurisdictions in the United States with their own competitive incorporation laws to attract investment (as well as their own legislative bodies that change those laws), so you just have to read the laws to find a state that is favorable for you. What I mean is that whatever Delaware does to get in the news about its easy business laws, has been mimicked and done even better by other states by this point in time. And regarding Delaware's Chancery Court, all other states in the union can also lean on Delaware case law, so this perk is not unique to Delaware. Wyoming is cheaper than Delaware for nominal presence in the United States, requires less information then Delaware, and is also tax free. A \"\"registered agent\"\" can get you set up and you can find one to help you with the address dilemma. This should only cost $99 - $200 over the state fees. An LLC does not need to have an address in the United States, but many registered agents will let you use their address, just ask. Many kinds of businesses still require a bank account for domestic and global trade. Many don't require any financial intermediary any more to receive payments. But if you do need this, then opening a bank account in the United States will be more difficult. Again, the registered agent or lawyer can get a Tax Identification Number for you from the IRS, and this will be necessary to open a US bank account. But it is more likely that you will need an employee or nominee director in the United States to go in person to a bank and open an account. This person needs to be mentioned in the Operating Agreement or other official form on the incorporation documents. They will simply walk into a bank with your articles of incorporation and operating agreement showing that they are authorized to act on behalf of the entity and open a bank account. They then resign, and this is a private document between the LLC and the employee. But you will be able to receive and accept payments and access the global financial system now. A lot of multinational entities set up subsidiaries in a number of countries this way.\"" } ]

[ { "docid": "450925", "title": "", "text": "How to send the full loan amount from Saudi Arabia (money exchange), because I have a money transfer limit? There is no limit for sending money into India. Just use the right banking channel and transfer the funds. If I sent to India, what about tax and all that in India? In a financial year if you are outside of India for more than 182 days, you are Non-Resident for tax purposes. Any money you earn outside of India is tax free in India. i.e. there is no tax for this funds in India. If it is possible to send the money, to whom do I have to send it (my account, or my parents account) Whatever is convenient, preferably to your own NRE/NRO account. Any documents I have to show for tax issues (in case tax) You have to establish that you are NRI and hence this funds are not taxable. Hence its best you transfer into NRE/NRO account. If you transfer to your parents account, you would need a gift deed to make this non-taxable to your parents. I have savings account my self in Axis Bank, for the past 3 years I am paying taxes, if I send to my Axis Bank account how can I withdraw the full amount (10 lakhs (1,000,000)) on single day Withdrawal is possible by cash or cheque You can write a check, do a NEFT/RTGS transfer to your loan account, you can withdraw cash by giving some notice time to the Branch Manager of your Branch." }, { "docid": "75195", "title": "", "text": "I have a very similar situation doing side IT projects. I set up an LLC for the business, created a separate bank account, and track things separately. I then pay myself from the LLC bank account based on my hours for the consulting job. (I keep a percentage in the LLC account to pay for expenses.) I used to do my taxes myself, but when I created this arrangement, I started having an accountant do them. An LLC will not affect your tax status, but it will protect you from liability and make things more accountable come tax time." }, { "docid": "234510", "title": "", "text": "\"TL;DR: Get a tax adviser (EA/CPA licensed in your State) for tax issues, and a lawyer for the Operating Agreement, labor law and contract related issues. Some things are not suitable for DIY unless you know exactly what you're doing. We both do freelance work currently just through our personal names. What kind of taxes are we looking into paying into the business (besides setup of everything) compared to being a self proprietor? (I'm seeing that the general answer is no, as long as income is <200k, but not certain). Unless you decide to have your LLC taxed as a corporation, there's no change in taxes. LLC, by default, is a pass-through entity and all income will flow to your respective tax returns. From tax perspective, the LLC will be treated as a partnership. It will file form 1065 to report its income, and allocate the income to the members/partners on schedules K-1 which will be given to you. You'll use the numbers on the K-1 to transfer income allocated to you to your tax returns and pay taxes on that. Being out of state, will she incur more taxes from the money being now filtered through the business? Your employee couldn't care less about your tax problems. She will continue receiving the same salary whether you are a sole proprietor or a LLC, or Corporatoin. What kind of forms are we looking into needing/providing when switching to a LLC from freelance work? Normally we just get 1099's, what would that be now? Your contract counterparts couldn't care less about your tax problems. Unless you are a corporation, people who pay you more than $600 a year must file a 1099. Since you'll be a partnership, you'll need to provide the partnership EIN instead of your own SSN, but that's the only difference. Are LLC's required to pay taxes 4 times per year? We would definitely get an accountant for things, but being as this is side work, there will be times where we choose to not take on clients, which could cause multiple months of no income. Obviously we would save for when we need to pay taxes, but is there a magic number that says \"\"you must now pay four times per year\"\". Unless you choose to tax your LLC as a corporation, LLC will pay no taxes. You will need to make sure you have enough withholding to cover for the additional income, or pay the quarterly estimates. The magic number is $1000. If your withholding+estimates is $1000 less than what your tax liability is, you'll be penalized, unless the total withholding+estimates is more than 100% of your prior year tax liability (or 110%, depending on the amounts). The LLC would be 50% 50%, but that work would not always be that. We will be taking on smaller project through the company, so there will be times where one of us could potentially be making more money. Are we setting ourselves up for disaster if one is payed more than the other while still having equal ownership? Partnerships can be very flexible, and equity split doesn't have to be the same as income, loss or assets split. But, you'll need to have a lawyer draft your operational agreement which will define all these splits and who gets how much in what case. Make sure to cover as much as possible in that agreement in order to avoid problems later.\"" }, { "docid": "423597", "title": "", "text": "If I had to start with one thing about Dave's Philosophy it would be: Zero Debt. Dave Ramsey doesn't believe in going into debt for anything, except a house for residence (and he's conservative about how much debt there as well). This is his biggest differentiating feature from Clark Howard or some of the others. His main points are (Some duplication of Yishai) His radio show is available on many US radio stations with internet streams. I use WSJS, where he is available from Noon to 3PM Eastern." }, { "docid": "486443", "title": "", "text": "My answer is with respect to the United States. I have no idea about India's regulatory environment. You are opening yourself up to massive liabilities and problems if you deposit their money in your account. I managed investment accounts as a private investment advisor for years (those with less than 15 clients were not required to register) until Dodd-Frank changed the rules. Thus you would have to register as an advisor, probably needing to take the series 65 exam (or qualifying some other way, e.g. getting your CFP/CFA/etc...). I used a discount broker/dealer (Scottrade) as the custodian. Here's how it works: Each client's account was their own account, and I had a master account that allowed me to bill their accounts and manage them. They signed paperwork making me the advisor on their account. I had very little accounting to handle (aside from tracking basis for taxed accounts). If you take custody of the money, you'll have regulatory obligations. There are always lots of stories in the financial advisor trade publications about advisors who go to jail for screwing their clients. The most common factor: they took custody of the assets. I understand why you want a single account - you want to ensure that each client gets the same results, right? Does each client want the same results? Certainly the tax situation for each is different, yes? Perhaps one has gains and wants to take losses in one year, and the other doesn't. If their accounts are managed separately, one can take losses while the other realizes gains to offset other losses. Financial advisors offer these kinds of accounts as Separately Managed Accounts (SMAs). The advisors on these kinds of accounts are mutual funds managers, and they try to match a target portfolio, but they can do things like realize gains or losses for clients if their tax situation would prefer it. You certainly can't let them put retirement accounts into your single account unless the IRS has you on their list of acceptable custodians. I suggest that you familiarize yourself thoroughly with the regulatory environment that you want to operate under. Then, after examining the pros and cons, you should decide which route you want to take. I think the most direct and feasible route is to pass the Series 65, register as an investment advisor, and find a custodian who will let you manage the assets as the advisor on the account. Real estate is another matter, you should talk to an attorney, not some random guy on the internet (even if he has an MBA and a BS in Real Estate, which I do). This is very much a state law thing." }, { "docid": "349424", "title": "", "text": "\"As you are earning an income by working in India, you are required to pay tax in India. If you contract is of freelance, then the income earned by you has to be self declared and taxes paid accordingly. There are some expenses one can claim, a CA should be able to guide you. Not sure why the Swiss comapny is paying taxes?. Are they depositing this with Income Tax, India, do they have a TAN Number. If yes, then you don't need to pay tax. But you need to get a statement from your company showing the tax paid on behalf of you. You can also verify the tax paid on your behalf via \"\"http://incometaxindia.gov.in/26ASTaxCreditStatement.asp\"\" you cna register. Alternatively if you have a Bank Account in India with a PAN card on their records, most Banks provide a link to directly see\"" }, { "docid": "454537", "title": "", "text": "\"It might be best to step back and look at the core information first. You're evaluating an LLC vs a Corporation (both corporate entities). Both have one or more members, and both are seen similarly (emphasis on SIMILAR here, they're not all the same) to the IRS. Specifically, LLC's can opt for a pass-through tax system, basically seen by the IRS the same way an S-Corp is. Put another way, you can be taxed as a corporate entity, or it's P/L statements can \"\"flow through\"\" to your personal taxes. When you opt for a flow-through, the business files and you get a separate schedule to tie into your taxes. You should also look at filing a business expense schedule (Schedule C) on your taxes to claim legitimate business expenses (good reference point here). While there are several differences (see this, and this, and this) between these entities, the best determination on which structure is best for you is usually if you have full time employ while you're running the business. S corps limit shares, shareholders and some deductions, but taxes are only paid by the shareholders. C corps have employees, no restrictions on types or number of stock, and no restrictions on the number of shareholders. However, this means you would become an employee of your business (you have to draw monies from somewhere) and would be subject to paying taxes on your income, both as an individual, and as a business (employment taxes such as Social Security, Medicare, etc). From the broad view of the IRS, in most cases an LLC and a Corp are the same type of entity (tax wise). In fact, most of the differences between LLCs and Corps occur in how Profits/losses are distributed between members (LLCs are arbitrary to a point, and Corps base this on shares). Back to your question IMHO, you should opt for an LLC. This allows you to work out a partnership with your co-worker, and allows you to disburse funds in a more flexible manner. From Wikipedia : A limited liability company with multiple members that elects to be taxed as partnership may specially allocate the members' distributive share of income, gain, loss, deduction, or credit via the company operating agreement on a basis other than the ownership percentage of each member so long as the rules contained in Treasury Regulation (26 CFR) 1.704-1 are met. S corporations may not specially allocate profits, losses and other tax items under US tax law. Hope this helps, please do let me know if you have further questions. As always, this is not legal or tax advice, just what I've learned in setting several LLCs and Corporate structures up over the years. EDIT: As far as your formulas go, the tax rate will be based upon your personal income, for any pass through entity. This means that the same monies earned from and LLC or an S-corp, with the same expenses and the same pass-through options will be taxed the same. More reading: LLC and the law (Google Group)\"" }, { "docid": "322838", "title": "", "text": "How much amount can we transfer from India to the USA? Is the limit per year? As I understand your father in law is Indian Citizen and his tax paid earnings need to be transferred outside of India. Under the Liberalized Remittance Scheme by RBI, one can transfer upto 2,50,000 USD. Please check with your Bank for the exact paperwork. A form 15CA and 15CB [by CA] are required to establish taxes have been paid. What documents we have to present to the bank? See above. Should money be transferred to company's account(Indian Company) to USA company? or can be transferred to my husband's account. Transfer of funds by a Indian Company to US Company has some restrictions. Please check with CA for details. If you father in law has sold the Indian Company and paid the taxes in India; he can transfer the proceeds to his son in US as per the Liberalized Remittance Scheme. Can they just gift the whole amount to my husband? What will be the tax implication on my husband's part in USA and on my father in law in India. The whole amount can be gifted by your father in law to your husband [his son]. There is no tax implication in India as being an Indian resident, gift between close relatives is tax free. There is no tax implication to your husband as he is a US Citizen and as per gift tax the person giving the gift should be paying the applicable taxes. Since the person gifting is not US Citizen; this is not applicable." }, { "docid": "245766", "title": "", "text": "The best way is to approach your bank and fill out a transfer form to send USD to your US account (if you are visiting India). They will require quite a number of proof (AADHAR, PAN, Passport) copies. Otherwise speak to your bank about how to do a wire transfer from your India A/C to US; after de-moitization regulations have tightened, the best course of action would be to speak to your bank directly." }, { "docid": "425597", "title": "", "text": "\"And yet, the same law that these individuals and companies use to lower their taxes applies for every citizen and company of the country. Thus, in principle, every individual and company could make use of these methods. Clearly, they do not. Why? Misconception number 1. How did you conclude they do not? Because NY Times didn't spend time doing an expose' on your plumber? The Panama Papers and the Paradise Papers contain the files from merely three companies that help in this large industry. This is a story about poor IT policies of three companies. A potential reason could be the price charged to set up and maintain these services. This is a significant deterrent. The costs of forming offshore entities are perpetuated by the expensive lawyers, registered agents and incompetent government representatives in these tiny jurisdictions. (For what its worth, even most United States are pretty incompetent at these administrative processes. Really only a few financial centers and a few exceptions have it all streamlined.) These are scale problems primarily. The incompetence of different nation/state's public sectors will make you realize everything you take for granted. The main message emerging from Panama Papers, Paradise Papers, and the like, is that it is the rich, powerful and famous who make use of and benefit from tax havens. But not exclusively for tax purposes. Newspapers, and even the organization leaking this information, is driving clicks to a gullible and impressionable public. I've talked with ICIJ (who release and push the discussion on the Panama/Paradise Papers), they really do believe in their \"\"tax expose'\"\" angle, but lack any consideration of how business work. 'Tax Haven'. These are sovereign nations with due process with democratically elected legislatures who looked at their budget and realized they don't need to fund their government via passive taxes. Their governments offer a good and service that people want, and it provides enough revenues to their governments. Many of these jurisdictions have well evolved corporate laws for fast evolving business models. For example, The Segregated Portfolio Company in the British Virgin Islands is more well defined and supported by clearer case law and is more useful entity than a Series LLC in the few United States that support it. There are at least a dozen reasons why someone would use a \"\"tax haven\"\", where only one of them is \"\"tax\"\".\"" }, { "docid": "469738", "title": "", "text": "I don't know if it's legal but your talking about arbitraging the rates between a personal savings account and a business account. I also don't know those rates but will venture to guess that they are not materially different, after taking into account the cost of setting up and registering an LLC, for it to be worth the time and effort." }, { "docid": "97083", "title": "", "text": "\"especially considering it has a mortgage on it (technically a home equity loan on my primary residence). I'm not following. Does it have a mortgage on it, or your primary residence (a different property) was used as a security for the loan? If it is HELOC from a different property - then it is really your business what to do with it. You can spend it all on casinos in Vegas for all that the bank cares. Is this a complicated transaction? Any gotchas I should be aware of before embarking on it? Obviously you should talk to an attorney and a tax adviser. But here's my two cents: Don't fall for the \"\"incorporate in Nevada/Delaware/Wyoming/Some other lie\"\" trap. You must register in the State where you live, and in the State where the property is. Incorporating in any other State will just add complexity and costs, and will not save you anything whatsoever. 2.1 State Taxes - some States tax LLCs. For example, in California you'll pay at least $800 a year just for the right of doing business. If you live in California or the property is in California - you will pay this if you decide to set up an LLC. 2.2 Income taxes - make sure to not elect to tax your LLC as a corporation. The default for LLC is \"\"disregarded\"\" status and it will be taxed for income tax purposes as your person. I.e.: IRS doesn't care and doesn't know about it (and most States, as well). If you actively select to tax it as a corporation (there's such an option) - it will cost you very dearly. So don't, and if someone suggest such a thing to you - run away from that person as fast as you can. Mortgages - it is very hard to get a mortgage when the property is under the LLC. If you already have a mortgage on that property (the property is the one securing the loan) - it may get called once you transfer it into LLC, since from bank's perspective that would be transferring ownership. Local taxes - transferring into LLC may trigger a new tax assessment. If you just bought the property - that will probably not matter much. If it appreciated - you may get hit with higher property taxes. There are also many little things - once you're a LLC and not individual you'll have to open a business bank account, will probably need a new insurance policy, etc etc. These don't add much to costs and are more of an occasional nuisance.\"" }, { "docid": "121393", "title": "", "text": "\"I work in the legal services industry, selling these products for a competitor of theirs who shall remain nameless. The LLC filing itself in most cases is a simple fill in the blank form. You can likely file yourself either online or through the mail, depending on the state. Only a handful require an original document. You can apply for the EIN for free on the IRS website and usually have it within a few minutes. If you already have someone assisting with your annual LLC taxes you wouldn't need their services for that either. If their compliance kit involves any business licensing research, it may be worthwhile - but you can also order those services a la carte from vendors like LLX and BusinessLicenses.com. What you're really paying for is the registered agent service - the address for public record with the state so they know where to send any service of process - and you're paying for the convenience of a \"\"one stop shop\"\" instead of handling all the legwork yourself.\"" }, { "docid": "133299", "title": "", "text": "Payment of taxes for your personal return filed with the IRS always come from your personal account, regardless of how the money was earned. Sales tax would be paid from your business account, so would corporate taxes, if those apply; but if you're talking about your tax payments to the IRS for your personal income that should be paid from your personal account. Also, stating the obvious, if you're paying an accountant to handle things you can always ask them for clarification as well. They will have more precise answers. EDIT Adding on for your last part of the question I missed: In virtually all cases LLC's are what's called a pass through entity. For these entities, all income in the eyes of the federal government passes directly through the entity to the owners at the end of each year. They are then taxed personally on this net income at their individual tax rate, that's the very abridged version at least. The LLC pays no taxes directly to the federal government related to your income. Here's a resource if you'd like to learn more about LLC's: http://www.nolo.com/legal-encyclopedia/llc-basics-30163.html" }, { "docid": "570639", "title": "", "text": "\"Transferring the money or keeping it in US does has no effect on taxes. Your residency status has. Assuming you are Resident Alien in US for tax purpose and have paid the taxes to IRS and you are \"\"Non-Resident\"\" Indian for tax purposes in India as you are more than 182 outside India. How would it effect my Tax in US and India If you are \"\"Non-Resident\"\" in India for tax purposes, there is no tax liability of this in India. I have transferred an amount of approx 15-20k$ to Indian Account (not NRE) By RBI regulation, if you are \"\"Non-Resident\"\" then you should get your savings account converted to \"\"NRO\"\". You may not may not choose to open an NRE account. To keep the paper work clear it helps that you open an NRE account in India. Any investment needed ? Where do i need to declare if any ? These are not relevant. Note any income generated in India, i.e. interest in Savings account / FDs / Rent etc; taxes need to be paid in India and declared in US and taxes paid in US as well. There is some relief under DTAA. There are quite a few question on this site that will help you clarify what needs to be done.\"" }, { "docid": "582571", "title": "", "text": "\"You're confusing so many things at once here...... First thing first: we cannot suggest you what to do business-wise since we have no idea about your business. How on Earth can anyone know if you should sell the software to someone or try to distribute to customers yourself? How would we know if you should hire employees or not? If you say you don't need employees - why would you consider hiring them? If you say you want to sell several copies and have your own customers - why would you ask if you should sell your code to someone else? Doesn't make sense. Now to some more specific issues: I heard sole proprietary companies doesn't earn more than 250k and it's better to switch to corporation or LLC etc. because of benefits. I heard it was snowing today in Honolulu. So you heard things. It doesn't make them true, or relevant to you. There's no earning limit above which you should incorporate. You can be sole proprietor and make millions, and you can incorporate for a $10K/year revenue business. Sole proprietorship, incorporation (can be C-Corp or S-Corp), or LLC - these are four different types of legal entity to conduct business. Each has its own set of benefits and drawbacks, and you must understand which one suits you in your particular situation. For that you should talk to a lawyer who could help you understand what liability protection you might need, and to a tax adviser (EA/CPA licensed in your state) who can help you understand the tax-related costs and benefits of each choice. On the other hand I heard that if I create LLC company, in case of failure, they can get EVERYTHING from me, what's this all about? No. This is not true. Who are \"\"they\"\", how do you define \"\"failure\"\", and why would they get anything from you at all? Even without knowing all that, your understanding is wrong, because the \"\"LL\"\" in LLC stands for LIMITED liability. The whole point of forming LLC or Corporation is to limit your own personal liability. But mere incorporation or forming LLC doesn't necessarily mean your liability is limited. Your State law defines what you must do for that limited liability protection, and that includes proper ways to run your business. Again - talk to your lawyer and your tax adviser about what it means to you. I'm totally unfamiliar with everything related to taxes/companies/LLC/corporation etc Familiarize yourself. No-one is going to do it for you. Start reading, ask specific questions on specific issues, and get a proper legal and tax advice from licensed professionals.\"" }, { "docid": "299211", "title": "", "text": "\"-Alain Wertheimer I'm a hobbyist... Most (probably all) of those older items were sold both prior to my establishing the LLC This is a hobby of yours, this is not your business. You purchased all of these goods for your pleasure, not for their future profit. The later items that you bought after your LLC was establish served both purposes (perks of doing what you love). How should I go about reporting this income for the items I don't have records for how much I purchased them for? There's nothing you can do. As noted above, these items (if you were to testify in court against the IRS). \"\"Losses from the sale of personal-use property, such as your home or car, aren't tax deductible.\"\" Source Do I need to indicate 100% of the income because I can't prove that I sold it at a loss? Yes, if you do not have previous records you must claim a 100% capital gain. Source Addition: As JoeTaxpayer has mentioned in the comments, the second source I posted is for stocks and bonds. So at year begin of 2016, I started selling what I didn't need on eBay and on various forums [January - September]. Because you are not in the business of doing this, you do not need to explain the cost; but you do need to report the income as Gross Income on your 1040. Yes, if you bought a TV three years ago for a $100 and sold it for $50, the IRS would recognize you earning $50. As these are all personal items, they can not be deducted; regardless of gain or loss. Source Later in the year 2016 (October), I started an LLC (October - December) If these are items that you did not record early in the process of your LLC, then it is reported as a 100% gain as you can not prove any business expenses or costs to acquire associated with it. Source Refer to above answer. Refer to above answer. Conclusion Again, this is a income tax question that is split between business and personal use items. This is not a question of other's assessment of the value of the asset. It is solely based on the instruments of the IRS and their assessment of gains and losses from businesses. As OP does not have the necessary documents to prove otherwise, a cost basis of $0 must be assumed; thus you have a 100% gain on sale.\"" }, { "docid": "382908", "title": "", "text": "Can I work on 1099 from my own company instead of on W2? The reason is on W2 I can't deduct my commute, Health Insurance and some other expenses while on 1099 I think I can able do that. Since I am going to client place to work not at my own office, I am not sure whether I should able to do that or not. If you have LLC, unless you elected to tax it as a corporation, you need neither 1099 nor W2. For tax purposes the LLC is disregarded. So it is, from tax perspective, a sole proprietorship (or partnership, if multiple members). Being a W2 employee of your own LLC is a bad idea. For all these above expenses, which can I use company's debit/credit card or I need to use only my personal debit/credit card? It would be better to always use a business account for business purposes. Doesn't matter much for tax per se, but will make your life easier in case of an audit or a legal dispute (limited liability protection may depend on it). If I work on 1099, I guess I need to file some reasonable taxes on quarterly basis instead of filing at year end. If so, how do I pay my tax on quarterly basis to IRS? I mean which forms should I file and how to pay tax? Unless you're a W2 employee, you need to do quarterly estimate payments using form 1040-ES. If you are a W2 employee (even for a different job, and even if it is not you, but your spouse with whom you're filing jointly) - you can adjust your/spouse's withholding using form W4 to cover the additional tax liability. This is, IMHO, a better way than paying estimates. There are numerous questions on this, search the site or ask another one for details." }, { "docid": "193842", "title": "", "text": "You would need to pay tax on the 10% gain. Was this money loaned from your NRE account? Is there paperwork to show that there was this loan given? If yes then it would be easy to get this back into NRE account. Once in NRE account you can move this back to US without any issue. If not, then you can get this into NRO account. From NRO account you would need to consult a CA to do some paperwork [essentially certifying that you have paid all taxes due] so that funds can be remitted outside. Edit: Looks like you have completed all formalities. A credit to NRE Account can only happen from funds outside of India. However a credit from India into NRE account can happen under some circumstances, like Loan give and received back. You would need a CA in India to help you complete the formalities. The tax is due in India as this was due to gain in India. As you are US resident for tax purposes, and US taxes global income, this is taxable in US as well. You can claim relief in US to the extent of taxes paid in India. India and US have DTAA." } ]

[ { "docid": "181697", "title": "", "text": "If this is a pre-authorized automatic billing, and if you have signed any contract with the merchant, cancelling may not block any future charges from the merchant. Happens with gyms, magazines, memberships quite often. There is a time period after the cancellation this will occur, then it'll be completely dead." } ]

[ { "docid": "583321", "title": "", "text": "\"You should dispute the transaction with the credit card. Describe the story and attach the cash payment receipt, and dispute it as a duplicate charge. There will be no impact on your score, but if you don't have the cash receipt or any other proof of the alternative payment - it's your word against the merchant, and he has proof that you actually used your card there. So worst case - you just paid twice. If you dispute the charge and it is accepted - the merchant will pay a penalty. If it is not accepted - you may pay the penalty (on top of the original charge, depending on your credit card issuer - some charge for \"\"frivolous\"\" charge backs). It will take several more years for either the European merchants to learn how to deal with the US half-baked chip cards, or the American banks to start issue proper chip-and-PIN card as everywhere else. Either way, until then - if the merchant doesn't know how to handle signatures with the American credit cards - just don't use them. Pay cash. Given the controversy in the comments - my intention was not to say \"\"no, don't talk to the merchant\"\". From the description of the situation it didn't strike me as the merchant would even bother to consider the situation. A less than honest merchant knows that you have no leverage, and since you're a tourist and will probably not be returning there anyway - what's the worst you can do to them? A bad yelp review? You can definitely get in touch with the merchant and ask for a refund, but I would not expect much to come out from that.\"" }, { "docid": "490955", "title": "", "text": "\"Executive summary: It sounds like the merchant just did an authorization then cancelled that authorization when you cancelled the order, so there was never an actual charge so you'll never see an actual refund and there's no money to \"\"claim\"\". More detail: From your second paragraph, it sounds like they just did an authorization but never posted the transaction. A credit card authorization is basically the merchant asking your credit card company \"\"Does sandi have enough credit to pay this amount and if so please reserve that amount for a bit.\"\" The authorization will decrease the total credit you have available on the card, but it's not actually a charge, so if your billing cycle ends, it won't show up on your statement. Depending on which company issued your credit card, you may be able to see the authorization online, usually labelled something like \"\"Pending transactions\"\". Even if your credit card company doesn't show pending transactions, you'll see a decrease in your available credit, however you shouldn't see an increase in your balance. The next step, and the only way the original merchant gets paid, is for the merchant to actually post a transaction to your card. Then it becomes a real charge that will show up on your next credit card statement and you'll be expected to pay it (unless you dispute the charge, but that's a different issue). If the charge is for the same amount as the authorization, the authorization will go away (it's now been converted to an actual charge). If the amounts are different, or the merchant never posts a transaction, the authorization will be removed by your credit card company automatically after a certain amount of time. So it sounds like you placed the order, the merchant did an authorization to make sure you could pay for it and to reserve the money, but then you cancelled the order before the merchant could post the transaction, so you were never really charged for it. The merchant then cancelled the authorization (going by the start of your third paragraph). So there was never an actual transaction posted, you were never charged, and you never really owed any money. Your available credit went down for a bit, but now should be restored to what it was before you placed the order. You'll never see an actual refund reflected on your credit card statement because there was no actual transaction.\"" }, { "docid": "61706", "title": "", "text": "Here's one reason that's being overlooked in answers so far. (@ChrisInEdmonton, this is for your comment on @Chad's answer.) How do credit card companies make money? Sure, there's interest charges, but those are offset significantly by the cost of borrowing money, and by people defaulting on their debt / entering bankruptcy. The other way they make money is by processing transactions. They get a cut of whatever you buy. If you're a high-income person, and you're going to process a lot of expenditures with this credit card, your business is worth more. They will be willing to bribe you with things like cash-back, frequent flier miles, and insurance on your auto rentals, so that they can be your #1 go-to card. (This works in concert with the way that some credit card vendors with richer clientele overall - American Express - get to charge higher merchant fees for access to these customers' wallets. But that was mentioned in other answers.) If you're not a high-income person, your business is worth less. If you go somewhere asking for credit, they're going to try and give you a card which will earn them the most money - which probably isn't the one where they give you back 50% of their transaction fee in rewards. It's a calculated risk, since they still have to compete against cash, debit cards, and all the other credit card companies, so they don't have you totally over a barrel, but you shouldn't expect as many freebies, either." }, { "docid": "231796", "title": "", "text": "The U.S. bankruptcy laws no longer make it simple to discharge credit card debt, so you can't simply run up a massive tab on credit cards and then just walk away from them anymore. That used to be the case, but that particular loophole no longer exists the way it once did. Further, you could face fraud charges if it can be proven you acted deliberately with the intent to commit fraud. Finally, you won't be able to rack up a ton of new cards as quickly as you might think, so your ability to amass enough to make your plan worth the risk is not as great as you seem to believe. As a closing note, don't do it. All you do is make it more expensive for the rest of us to carry credit cards. After all, the banks aren't going to eat the losses. They'll just pass them along in the form of higher fees and rates to the rest of us." }, { "docid": "456887", "title": "", "text": "&gt;&gt; Hey! Do you mind giving your credit card to the waiter... &gt; I'm not especially fond of that, but it's easy to report fraud to the bank and most of the time the bank will reverse the charges. No kidding! Of course, even I give credit cards to waiters. What do I care? **As you said, you are not liable to any fraud on your credit card.** None at all!!!! It's only Merchant, not the credit card company, that pay the price for fraud... **and you pay higher prices to cover for losses from fraud.** &gt; The PIN situation is different because a mugging is life-threatening. Nonsense! Mugging at the ATM is so rare, each ATM has a camera. **In any case, I am not talking about using PIN to withdraw money!** I am talking about PIN to authorize charges on a credit card or ATM card. &gt;&gt; We already determined that nobody even care about signatures or check them. &gt; You can't use a stolen card at an ATM with a signature. Huh? You totally got it wrong what I said, or, you argue for the sake of argument. **I am saying that cards that require you to enter a PIN cannot be used used when stolen or copied. Yes or no?** **On the other hand, cards that require signature can be used when stolen or copied because signature is a worthless method to validate the charge. Yes or no?** LASTLY, my Costco credit card has a picture of me on it. **Question for you, since for some reason you argue so much against PINs: Wouldn't a picture on the card better than a signature?** Yes or no? Do you see? There are so many ways to make this system so much more secure and fraud proof... but, ON PURPOSE, the credit card companies don't want that... because they are not liable for fraud. Simple as that." }, { "docid": "492578", "title": "", "text": "So, my questions: Are payment cards provide sufficient security now? Yes. If so, how is that achieved? Depending on your country's laws, of course. In most places (The US and EU, notably), there's a statutory limit on liability for fraudulent charges. For transactions when the card is not present, proving that the charge is not fraudulent is merchants' task. Why do online services ask for all those CVV codes and expiration date information, if, whenever you poke the card out of your wallet, all of its information becomes visible to everyone in the close area? What can I do to secure myself? Is it? Try to copy someones credit card info next time you're in the line at the local grocery store. BTW, some of my friends tend to rub off the CVV code from the cards they get immediately after receiving; nevertheless, it could have already been written down by some unfair bank employee. Rubbish." }, { "docid": "261161", "title": "", "text": "\"This question is likely to be closed as a product recommendation request. But if you are willing to change the question a bit, perhaps to \"\"How do I avoid having my debit card declined when I know I have good funds\"\" it becomes a reasonable general question. And my answer follows. I can tell you the same thing happens to those of us with credit cards. It can happen when your buying pattern changes. Suddenly buying a lot of merchandise, especially away from home. Nothing like having your card declined while with relatives you visit or while on vacation. I'd talk to the bank and ask for advice how to avoid this. I've called my card issuer to tell them I'll in X city for these dates, to expect charges from there. That seems to work well.\"" }, { "docid": "91927", "title": "", "text": "Actually BofA never charged for their debit card usage. It was all heresy from the media because Wells Fargo and Chase Bank were actually charging their customers. As to your credit card, you know that you can close that at anytime and pay off whatever owing balance you have left with it still closed." }, { "docid": "526989", "title": "", "text": "\"Not only does the interest get charged from Day 1 on new purchases as long as you have a revolving balance, but the credit card agreement often says something to the effect that any partial payment is applied first to the interest to date, and then transfer balances on which no interest is being charged and so the bank is losing money on it, then to other transfer balances and cash advances (and no refund of that 3% fee that was collected up front on the cash advance) and finally to the purchases starting from the most recent back to the oldest one. Even the FAQ on my card site says in simple language \"\"We apply payments and credits at our discretion, including in a manner most favorable or convenient for us.\"\" (see mhoran_psprep's answer). The moral is indeed what Dheer has already told you: do not carry a revolving balance on a credit card and if you have a revolving balance, pay it off as soon as possible, Do not wait for the end of the grace period; if possible, pay it off the day the statement is issued, or if you can make only a partial payment, make it as soon as possible. Make multiple partial payments each month if you have cash flow problems, or improve your cash flow by forgoing one or more of the many Grande Vente Mocharino Espresso Lattes you consume each day. Credit card debt is close to the worst kind of debt that you can have, and it is best to get out from under as soon as possible. Remember, there is effectively no grace period as long as you have a revolving balance on your credit card. You are paying interest for every one of those days.\"" }, { "docid": "65982", "title": "", "text": "There are a couple of things to consider. First, in order to avoid interest charges you generally just need to pay the statement balance before the statement due date. This is your grace period. You don't need to monitor your activity every day and send immediate payments. If you're being really tight with money, you can actually make a little profit by letting your cash sit in an interest bearing account before you pay your credit card before the due date. Second, credit card interest rates are pretty terrible, and prescribed minimum payments are comically low. If you buy furniture using your credit card you will pay some interest, be sure to pay way more than the minimum payment. You should avoid carrying a balance on a credit card. At 20% interest the approximate monthly interest charge on $1,000 is $16.67. Third, if you carry a balance on your credit card you lose the interest grace period (the first point above) on new charges. If you buy your couch, and carry the balance, when you buy a soda at 7-11, the soda begins to accrue interest immediately. If you decide to carry a balance on a credit card, stop using that card for new charges. It generally takes two consecutive billing period full balance payments to restore the grace period. Fourth, to answer your question, using a credit card to carry a balance has no impact on your score. Make your payments on time, don't exceed your limits, keep your utilization reasonable. The credit agencies have no idea if you're carrying a balance or how much interest you're paying. To Appease the people who think point four needs more words: Your credit report contains your limit, your reported balance (generally your statement balance), and approximate minimum payment. There is no indication related to whether or not the balance contains a carried balance and/or accrued interest. The mere fact of carrying a balance will not impact your credit score because the credit reporting bureaus don't know you're carrying a balance. Paying interest doesn't help or hurt your score. Obviously if your carried balance and interest charges push your utilization up that will impact your score because of the increased utilization. Make your payments on time, don't exceed your limits, keep your utilization reasonable and your score will be fine." }, { "docid": "26695", "title": "", "text": "You can't ask insurers to use a particular score -- they have a state-approved underwriting model that they must follow consistently. Insurance companies make money by not paying claims, and poor credit score (including limit access to credit) increases the probability that you will file a small claim. Why? If you get into a minor accident (say $750 of damage) and have a $500 deductible, you are much less likely to file a claim to get $250 if you have access to a cash or credit lines to make the repairs yourself. If you feel that you are going to be penalized for closing credit card accounts, the solution is simple -- don't close them. Other than an event where you need to sever a relationship with a co-owner of an account (ie, you break up with your significant other, dissolve a business, etc) or avoid paying an annual fee, there is no advantage to you closing a revolving credit account, ever. If you cannot control your spending, throw the card in the shredder. Eventually, the credit card company will close your account for inactivity, which affects your credit to a lesser degree. (The big exception is if you carry sufficient balances on other cards, your credit utilization ratio goes up materially.)" }, { "docid": "143596", "title": "", "text": "\"Your total debt is equal to your total non-credit debt (student loans, car loans) + your total available credit. This is the truth of the \"\"low balance\"\" fear from lenders that you had heard about. Your credit utilization is across all of your cards. So if you have two cards, both with 15K limits and one is maxed out and one is empty, that is 50% utilization. If you have both cards with 7.5K balances, that is also 50% utilization. For the 8 cards that are paid off and still open, after you buy a house, I'd close any cards you aren't using. Not everyone will agree with this. If possible, I would close the 8 cards now and pay off the 15K balance before buying a house. If it's hard to pay it off now, it will be harder when you have a mortgage and home maintenance costs. If you want to buy the house before you pay off all of your credit card debt, I'd still close the 8 cards that are already paid off and pay down your last card to 4K (or less) to get under 25% utilization. The credit rating bureaus do not publish exactly how a different utilization rate of credit will affect your score, but it is known that lower utilization will improve your score. FICO calls this \"\"Proportion of credit lines used (proportion of balances to total credit limits on certain types of revolving accounts)\"\" Also, the longevity of your credit history is based on type of account (credit cards, car loans, etc.) so if you keep one credit card open, you still keep your long \"\"history\"\" with credit cards on your credit report. FICO calls this \"\"Time since accounts opened, by specific type of account\"\"\"" }, { "docid": "370508", "title": "", "text": "I'm in the US, and I can't speak for all credit cards, but I have done this in the past. I've paid extra on my credit card, and had a positive balance on my credit card account. The purchases made after paying extra were applied to the balance, and if there was money left over on the statement closing date, I didn't owe anything that month. Of course, I didn't incur any interest charges, but I never pay interest anyway, as I always pay my statement in full each month and never take a cash advance on my credit card. You could call your credit card company and ask them what will happen, or if you are feeling adventurous, you could just send them some extra money and see what happens. Most likely, they will just apply it to your account and give you a positive balance." }, { "docid": "213370", "title": "", "text": "Debit cards with the Visa or Mastercard symbol on them work technically everywhere where credit cards work. There are some limitations where the respective business does not accept them, for example car rentals want a credit card for potential extra charges; but most of the time, for day-to-day shopping and dining, debit cards work fine. However, you should read up the potential risks. A credit card gives you some security by buffering incorrect/fraudulent charges from your account, and credit card companies also help you reverse incorrect charges, before you ever have to pay for it. If you use a debit card, it is your money on the line immediately - any incorrect charge, even accidential, takes your money from your account, and it is gone while you work on reversing the charge. Any theft, and your account can be cleaned out, and you will be without money while you go after the thief. Many people consider the debit card risk too high, and don't use them for this reason. However, many people do use them - it is up to you." }, { "docid": "83452", "title": "", "text": "\"recently there has been an increase in Companies charging a Credit Card surcharge, the current law does not fix the amount so therefore company's can set there own surcharges, which means you can pay different surcharges at different places. In the \"\"Money\"\" magazine a couple of months ago there was an interesting article that discussed a possible cap that was going to be introduced to cut down on the fluctuations of Credit Card surcharges as some places are generating revenue by abusing the Credit Card surcharge. Something to keep in mind is to ensure when using a Debit card you are not charged the surcharge. some businesses will treat the Debit card the same as a Credit Card.\"" }, { "docid": "321199", "title": "", "text": "\"When you buy something with your credit card, the store pays a fee to the credit card company, typically a base fee of 15 to 50 cents plus 2 to 3% of the purchase. At least, that's what it was a few years back when I had a tiny business and I wanted to accept credit cards. Big chain stores pay less because they are \"\"buying in bulk\"\" and have negotiating power. Just because you aren't paying interest doesn't mean the credit card company isn't making money off of you. In fact if you pay your monthly bill promptly, they're probably making MORE off of you, because they're collecting 2 or 3% for a month or less, instead of the 1 to 2% per month that they can charge in interest. The only situation I know where you can get money from a credit card company for free is when they offer \"\"convenience checks\"\" or a balance transfer with no up-front fee. I get such an offer every now and then. I presume the credit card company does that for the same reason that stores give out free samples: they hope that if you try the card, you'll continue using it. To them, it's a marketing cost, no different than the cost of putting an ad on television.\"" }, { "docid": "173929", "title": "", "text": "My recommendation is to not ask for a credit increase, but just increase the utilization of one card if you have multiple cards, and decrease the utilization of the others, and continue paying off all cards in full each month. In a few months, you will likely be offered a credit increase by the card that is getting increased use. The card company that is getting the extra business knows that you are paying off big bills each month and keeping your account in good standing, and they will likely offer you a credit increase all by themselves because they want to keep your business. If no offer is forthcoming, you can call the card company and ask for a credit increase. If they refuse, tell them that you will be charging very little on the card in the future (or even canceling your card, though that will cause a hit on your credit score) because of their refusal, and switch your high volume to a different card." }, { "docid": "216540", "title": "", "text": "You know those perks/benefits that you don't want to give up? Those are funded by the fees you are trying to eliminate by paying cash. The credit card company makes money by interest, merchant fees, and other fees such a annual fees. They give you perks to generate more transactions, thus bringing in more merchant fees. For a small business they need to balance the fee of the credit card transaction with the knowledge that it is convenient for many customers. Some small businesses will set a minimum card transaction level. They do this because the small transaction on a credit card will be more expensive because the credit card company will charge 2% or 50 cents whichever is larger. Yes a business does figure the cost of the cards into their prices, but they can get ahead a little bit if some customers voluntarily forgo using the credit card." }, { "docid": "59023", "title": "", "text": "\"According to an article on Bankrate.com from 2011, yes, it can hurt your credit: With individual liability accounts, the employee holds all responsibility for the charges, even if the company pays the issuer directly. Joint liability means the company and employee share the responsibility for payments, says Mahendra Gupta, author of the RPMG survey. In both cases, if the card isn't paid and the account becomes delinquent, it will pop up on the employee's credit report and dent his or her credit score, says Barry Paperno, consumer affairs manager at myFICO.com. It doesn't matter if the company was supposed to make the payment; the repercussions fall on the employee. \"\"It will impact your score no differently than if you were late on one of your own accounts,\"\" Paperno says. Usually, with corporate credit cards, the employee is liable along with the employer for charges on the card. The intent is to provide the employee with an incentive not to misuse the card. However, this can be a problem if your company is late in paying bills. In the distant past, I had a corporate credit card. I was not supposed to have to pay the bill, but I did receive a bill in the mail every month. And occasionally, the payment was late. In my case, these late payments never showed up on my credit report. I can't remember now whether or not this card was reported on my credit report at all. And I remember being told when I got the card that I was jointly responsible for the card with the company. However, your experience may be different. Do the on-time payments show up on your credit report? If so, that may be an indication that a late payment might appear.\"" } ]

[ { "docid": "162684", "title": "", "text": "You should contact the Company who purchased your visa balance and ask/write the following questions: 1. Dispute the charge from Emusic.com as invalid. 2. Instruct that no future charges will be accepted. 3. How come Emusic.com was allowed to debit your account? 4. When did they purchased your visa account? 5. Ask for written verification that they purchased your account from the original company? such as a bill of sale? 6. Ask if the company is a registered debt collector in your state? 7. The FAIR DEBT COLLECTION PRACTICES ACT (FDCPA) may apply to your circumstance(s) and provide for $1,000 in damages to the consumer and $1,000 attorney fees from a third party debt collector per violation. You may want to seek the advice of an attorney to help determine if you have a good cause to sue the company and Emusic. If you did not receive anything form Emusic.com or your contract/agreement ended without a cancelation/early termination fee, ALso, file a written dispute with Emusic.com. Check your credit report. Many companies automatically charge your accounts through automatic payments after termination of the agreement because they get away with it in the U.S., if the consumer does not take steps to dispute the current charge and stop future charges from occurring in the future. Never use auto pay unless required and the service is essential. When using auto pay use a dedicated account not your main checking account. It is less of a pain in the neck to close the account if its your 2nd or 3rd checking account and not your only account." } ]

[ { "docid": "526989", "title": "", "text": "\"Not only does the interest get charged from Day 1 on new purchases as long as you have a revolving balance, but the credit card agreement often says something to the effect that any partial payment is applied first to the interest to date, and then transfer balances on which no interest is being charged and so the bank is losing money on it, then to other transfer balances and cash advances (and no refund of that 3% fee that was collected up front on the cash advance) and finally to the purchases starting from the most recent back to the oldest one. Even the FAQ on my card site says in simple language \"\"We apply payments and credits at our discretion, including in a manner most favorable or convenient for us.\"\" (see mhoran_psprep's answer). The moral is indeed what Dheer has already told you: do not carry a revolving balance on a credit card and if you have a revolving balance, pay it off as soon as possible, Do not wait for the end of the grace period; if possible, pay it off the day the statement is issued, or if you can make only a partial payment, make it as soon as possible. Make multiple partial payments each month if you have cash flow problems, or improve your cash flow by forgoing one or more of the many Grande Vente Mocharino Espresso Lattes you consume each day. Credit card debt is close to the worst kind of debt that you can have, and it is best to get out from under as soon as possible. Remember, there is effectively no grace period as long as you have a revolving balance on your credit card. You are paying interest for every one of those days.\"" }, { "docid": "204288", "title": "", "text": "I am not aware of a version of Interac available in the U.S., but there are alternative ways to receive money: Cheque. The problem with mailed cheques is that they take time to deliver, and time to clear. If you ship your wares before the cheque has cleared and the cheque is bad, you're out the merchandise. COD. How this works is you place a COD charge on your item at the post office in the amount you charge the customer. The post office delivers the package on the other end when the customer pays. The post office pays you at the time you send the package. There is a fee for this, talk to your local post office or visit the Canada Post website. Money order. Have your U.S. customers send an International Money Order, not a Domestic Money Order. Domestic money orders can only be cashed at a U.S. post office. The problem here is again delivery time, and verifying your customer sent an International Money Order. It can be a pain to have to send back a Domestic Money Order to a customer explaining what they have to do to pay you, even more painful if you don't catch the error before shipping your wares. Credit Card. There are a number of companies offering credit card processing that are much cheaper than a bank. PayPal, Square, and Intuit are three such companies offering these services. After I did my investigations I found Square to be the best deal for me. Please do your own research on these companies (and banks!) and find out which one makes the most sense for you. Some transaction companies may forbid the processing of payment for e-cig materials as they my be classed as tobacco." }, { "docid": "143596", "title": "", "text": "\"Your total debt is equal to your total non-credit debt (student loans, car loans) + your total available credit. This is the truth of the \"\"low balance\"\" fear from lenders that you had heard about. Your credit utilization is across all of your cards. So if you have two cards, both with 15K limits and one is maxed out and one is empty, that is 50% utilization. If you have both cards with 7.5K balances, that is also 50% utilization. For the 8 cards that are paid off and still open, after you buy a house, I'd close any cards you aren't using. Not everyone will agree with this. If possible, I would close the 8 cards now and pay off the 15K balance before buying a house. If it's hard to pay it off now, it will be harder when you have a mortgage and home maintenance costs. If you want to buy the house before you pay off all of your credit card debt, I'd still close the 8 cards that are already paid off and pay down your last card to 4K (or less) to get under 25% utilization. The credit rating bureaus do not publish exactly how a different utilization rate of credit will affect your score, but it is known that lower utilization will improve your score. FICO calls this \"\"Proportion of credit lines used (proportion of balances to total credit limits on certain types of revolving accounts)\"\" Also, the longevity of your credit history is based on type of account (credit cards, car loans, etc.) so if you keep one credit card open, you still keep your long \"\"history\"\" with credit cards on your credit report. FICO calls this \"\"Time since accounts opened, by specific type of account\"\"\"" }, { "docid": "567201", "title": "", "text": "\"A bona-fide company never needs your credit card details, certainly not your 3-digit-on-back-of-card #, to issue a refund. On an older charge, they might have to work with their merchant provider. But they should be able to do it within the credit card handling system, and in fact are required to. Asking for details via email doesn't pass the \"\"sniff test\"\" either. To get a credit card merchant account, a company needs to go through a security assessment process called PCI-DSS. Security gets drummed into you pretty good. Of course they could be using one of the dumbed-down services like Square, but those services make refunds ridiculously easy. How did you come to be corresponding on this email address? Did they initially contact you? Did you find it on a third party website? Some of those are fraudulent and many others, like Yelp, it's very easy to insert false contact information for a business. Consumer forums, even moreso. You might take another swing at finding a proper contact for the company. Stop asking for a cheque. That also circumvents the credit card system. And obviously a scammer won't send a check... at least not one you'd want! If all else fails: call your bank and tell them you want to do a chargeback on that transaction. This is where the bank intervenes to reverse the charge. It's rather straightforward (especially if the merchant has agreed in principle to a refund) but requires some paperwork or e-paperwork. Don't chargeback lightly. Don't use it casually or out of laziness or unwillingness to speak with the merchant, e.g. to cancel an order. The bank charges the merchant a $20 or larger investigation fee, separate from the refund. Each chargeback is also a \"\"strike\"\"; too many \"\"strikes\"\" and the merchant is barred from taking credit cards. It's serious business. As a merchant, I would never send a cheque to an angry customer. Because if I did, they'd cash the cheque and still do a chargeback, so then I'd be out the money twice, plus the investigation fee to boot.\"" }, { "docid": "50000", "title": "", "text": "\"What is a good bank to use for storing my pay? Preferrably one that has free student accounts. Can I save money from my paychecks directly to a Canadian bank Otherwise, can I connect my bank account to my Canadian account online? Any (almost...) bank in the US has free college checking accounts. If the bank you entered doesn't - exit, and step into the one next door which most likely will. The big names - Wells Fargo, Bank Of America, Chase, Bank of the West, Union Bank, Citi etc - all have it. Also, check your local credit union. Do I need any ID to open a bank account? I have Canadian citizenship and a J-1 visa Bring your passport and a student card/driving license (usually 2 ID's required). What form of money should I take with me? Cash? Should I apply for a debit card? Can I use my Canadian credit card for purchasing anything in the states? (Canadian dollar is stronger than US dollar currently, so this could be to my advantage?) There's some fuss going on about debit cards right now. Some big banks (Bank of America, notably) decided to charge fees for using it. Check it, most of the banks are not charging fees, and as far as I know none of the credit unions are charging. So same thing - if they charge fees for debit card - step out and move on to the next one down the street. Using debit card is pretty convenient, cash is useful for small amount and in places that don't accept cards. If you're asking about how to move money from Canada - check with your local (Canadian) bank about the conversion rates and fees for transfers, check cashing, ATM, card swipes, etc - and see which one is best for you. When I moved large amounts of money across the border, I chose wire transfer because it was the cheapest, but for small amounts many times during the period of your stay it may be more expensive. You can definitely use your Canadian credit/debit card in the States, you'll be charged some fee by your credit card company, and of course the conversion rate. How much tax does I have to pay at the end of my internship? Let's assume one is earning $5,000 per month plus a one time $5,000 housing stipend, all before taxes. Will I be taxed again by the Canadian government? $5K for internship? Wow... You need to talk to a tax specialist, there's probably some treaty between the US and Canada on that, and keep in mind that the State of California taxes your income as well. What are some other tips I can use to save money in the California? California is a very big place. If you live in SF - you'll save a lot by using the MUNI, if your internship is in LA - consider buying an old clunker if you want to go somewhere. If you're in SD - just enjoy the weather, you won't get it in Canada. You'll probably want a \"\"pay as you go\"\" wireless phone plan. If your Canadian phone is unlocked GSM - you can go to any AT&T or T-Mobile store and get a pre-paid SIM for free. Otherwise, get a prepaid phone at any groceries store. It will definitely be cheaper than paying roaming charges to your Canadian provider. You can look at my blog (I'm writing from California), I accumulated a bunch of saving tips there over the years I'm writing it.\"" }, { "docid": "220032", "title": "", "text": "So My question is. Is my credit score going to be hit? Yes it will affect your credit. Not as much as missing payments on the debt, which remains even if the credit line is closed, and not as much as missing payments on other bills... If so what can I do about it? Not very much. Nothing worth the time it would take. Like you mentioned, reopening the account or opening another would likely require a credit check and the inquiry will add another negative factor. In this situation, consider the impact on your credit as fact and the best way to correct it is to move forward and pay all your bills on time. This is the number one key to improving credit score. So, right now, the key task is finding a new job. This will enable you to make all payments on time. If you pay on time and do not overspend, your credit score will be fine. Can I contact the creditors to appeal the decision and get them to not affect my score at the very least? I know they won't restore the account without another credit check). Is there anything that can be done directly with the credit score companies? Depending on how they characterize the closing of the account, it may be mostly a neutral event that has a negative impact than a negative event. By negative events, I'm referring to bankruptcy, charge offs, and collections. So the best way to recover is to keep credit utilization below 30% and pay all your bills and debt payments on time. (You seem to be asking how to replace this line of credit to help you through your unemployment.) As for the missing credit line and your current finances, you have to find a way forward. Opening new credit account while you're not employed is going to be very difficult, if not impossible. You might find yourself in a situation where you need to take whatever part time gig you can find in order to make ends meet until your job search is complete. Grocery store, fast food, wait staff, delivery driver, etc. And once you get past this period of unemployment, you'll need to catch up on all bills, then you'll want to build your emergency fund. You don't mention one, but eating, paying rent/mortgage, keeping current on bills, and paying debt payments are the reasons behind the emergency fund, and the reason you need it in a liquid account. Source: I'm a veteran of decades of bad choices when it comes to money, of being unemployed for periods of time, of overusing credit cards, and generally being irresponsible with my income and savings. I've done all those things and am now paying the price. In order to rebuild my credit, and provide for my retirement, I'm having to work very hard to save. My focus being financial health, not credit score, I've brought my bottom line from approximately 25k in the red up to about 5k in the red. The first step was getting my payments under control. I have also been watching my credit score. Two years of on time mortgage payments, gradual growth of score. Paid off student loans, uptick in score. Opened new credit card with 0% intro rate to consolidate a couple of store line of credit accounts. Transferred those balances. Big uptick. Next month when utilization on that card hits 90%, downtick that took back a year's worth of gains. However, financially, I'm not losing 50-100 a month to interest. TLDR; At certain times, you have to ignore the credit score and focus on the important things. This is one of those times for you. Find a job. Get back on your feet. Then look into living debt free, or working to achieve financial independence." }, { "docid": "35530", "title": "", "text": "Because your friend isn't going to like the ~2% charge they have to pay to the credit card company on the $10,000 purchase. Credit card companies make money off of transactions. The cardholder normally doesn't pay any transaction fees (and in fact can make a profit via rewards), but the merchant has to pay a certain amount of money to the credit card company for the transaction. In this case, the apartment owners ate the charge, likely because it was easier for them to send a check than to refund the cost of the fee through the credit card company. If you started doing this a lot to take advantage of this, I would imagine they would get smart and refuse your business (it'll be pretty obvious what you're doing if you're not signing any leases)." }, { "docid": "370508", "title": "", "text": "I'm in the US, and I can't speak for all credit cards, but I have done this in the past. I've paid extra on my credit card, and had a positive balance on my credit card account. The purchases made after paying extra were applied to the balance, and if there was money left over on the statement closing date, I didn't owe anything that month. Of course, I didn't incur any interest charges, but I never pay interest anyway, as I always pay my statement in full each month and never take a cash advance on my credit card. You could call your credit card company and ask them what will happen, or if you are feeling adventurous, you could just send them some extra money and see what happens. Most likely, they will just apply it to your account and give you a positive balance." }, { "docid": "52250", "title": "", "text": "It sounds like your current loan is in your name. As such, you are responsible for paying it. Not your family, you. It also sounds like the loan payments are regularly late. That'll likely drastically affect your credit rating. Given what you've said, it doesn't surprise me that you were declined for a credit card. With the information on your credit report, you are a poor risk. Assuming your family is unable to pay loan on time (and assuming you aren't willing to do so), you desperately need to get your name off the loan. This may mean selling the property and closing out the loan. This won't be enough to fix your credit, though. All that will do is stop making your credit worse. It'll take a few years (five years in Canada, not sure how many years in India) until this loan stops showing up on your credit report. That's why it is important to do this immediately. Now, can a bank give you a loan or a credit card despite bad credit? Yes, absolutely. It all depends on how bad your credit is. If the bank is willing to do so, they'll most likely charge a higher interest rate. But the bank may well decide not to give you a loan. After all, your credit report shows you don't make your loan payments on time. You may also want to request your own copy of your credit report. You may have to pay for this, especially if you want to see your score. This could be valuable information if you are looking to fix your finances, and may be worth the cost. If you are sure it's just this one loan, it may not be necessary. Good luck! Edit: In India CIBIL is the authority that maintains records. Getting to know you exact score will help. CIBIL offers it via TransUnion. The non-payment will keep appearing on your record for 3 years. As you don't have any loans, get a credit card from a Bank where you have Fixed Deposits / PPF Account as it would be easier to get one. It can then help you build the credit." }, { "docid": "386668", "title": "", "text": "These are the things to focus on... do not put yourself in debt with a car, there are other better solutions. 1) Get a credit card (Unless you already have one) -Research this and get the best cash back or points card you can get at the best rate. - Start with buying gas and groceries every month do not run the balance up. - Pay the card off every single month. (THIS IS IMPORTANT) - Never carry a balance above 25% of your credit limit. - Every 8 months or so call your credit card company and ask for a credit line increase. They should be able to do this WITHOUT pulling your credit you are only looking for the automatic increment that they can automatically approve. This will help increase your available credit and will help keep your credit utilization low. Only do this is you are successfully doing the other bullet points above. 2) Pay all of your bills on time, this includes everything from water, electricity, phone bill, etc. never be late. Setup automatic payments if you can. 3) Minimize the number of hard credit inquiries. -This is particularly important when you are looking for your mortgage lender. Do not let them pull your credit automatically. You should be able to provide them your credit score and other information and get quotes from those lenders. Do not let them tell you then can't do this... they can. 4)Strategically plan when you close a credit line, closing them will do two things, lower your credit limit often times increasing your credit utilization, and it may hurt your average age of credit. Open one credit card and keep it forever. *Note: Credit Karma is a great tool, you should check your score monthly and see how your efforts are influencing your score. I also like Citi credit cards because they will provide you monthly with your FICO Score which Credit Karma will only provide TransUnion and Equifax. This is educational information and you should consider talking to a banker/lender who can also give you more detailed instructions on how to get your credit improved so that they can approve you for a loan. Many people can get their score above 720 in 1-2 years time going from no credit doing the steps described above. It does take time be patient and don't fall for gimmicks." }, { "docid": "541469", "title": "", "text": "I have looked at the conditions of a car rental company, and I believe it provides the answers: Upon pick up of your vehicle, you must present a valid credit card (*) used to make the booking and which must be in the driver´s name. If you do not have a valid credit card we will accept your debit card when you pick up your vehicle. However, as we cannot reserve credit to cover the potential damage or refueling costs, you will need to take SuperCover and a fuel tank of fuel at the start of the rental. We will refund the value of the unused fuel at the end of the rental unless otherwise agreed with you. (*) VISA, MasterCard and American Express are accepted. Credit card or Third Party Insurance IMPORTANT: In case of damage, we will charge you the incurred amount up to the excess. You will then need to reclaim this amount from the provider of the credit card or third party insurer. We strongly recommend that you fully read and understand the terms and conditions of any cover provided by your chosen provider before you decline any of our optional services. Without our SuperCover, should you damage the vehicle during your rental period, we will charge you the corresponding amount up to the excess, regardless of whether you can subsequently reclaim this amount from the provider of the credit card or the third party insurer. In the event you would like to dispute any of the above mentioned charges you should send your request by mail or email to the Firefly location state on your rental agreement. https://global.fireflycarrental.com/qualifications-ES.html From that, we can conclude that : It's likely that disputes with customers in case of damage cost a lot to car rental companies, and for the 2 above reasons, demanding a credit card may alleviate it." }, { "docid": "198349", "title": "", "text": "\"Check whether you're being charged a \"\"Cash advance\"\" fee with your withdrawals, because it's being withdrawn from your credit card account. If that's happening to you, then having a positive balance on your credit card account will dramatically reduce the fees. Quoting from my answer to a similar question on Travel Stack Exchange: It turns out that even though \"\"Cash advance fee - ATM\"\" has \"\"ATM\"\" in it, it doesn't mean that it's being charged by the ATM you're withdrawing from. It's still being charged by the bank of your home country. And depending on your bank, that fee can be minimized by having a positive balance in your credit card account. This isn't just for cards specially marketed at globehoppers and globeshoppers (mentioned in an answer to a similar question), but even for ordinary credit cards: Help minimise and avoid fees An administrative charge of 2% of the value of the transaction will apply to each cash advance made on your card account, where your account has a negative (debit) balance after the transaction has been posted to it. A minimum charge of $2.50 and a maximum charge of $150 will apply in these circumstances. Where your account has a positive (credit) balance after the transaction has been posted to it, a charge of $2.50 will apply to the transaction. Any such charge will appear on your credit card statement directly below the relevant cash advance. A $2.50 charge if your account is positive, versus $20 if the account is negative? That's a bit of a difference!\"" }, { "docid": "550496", "title": "", "text": "Keeping a receipt does allow you to verify that the expected amount was charged/debited it also can help when you need to return an item. Regarding double charging, the credit card companies look for that. If the same card is used at the same vendor for the same exact amount in a short period of time the credit card company will flag the transaction. They assume either a mistake was made, or fraud is being attempted. The most likely result is that the transaction is denied. A dishonest vendor can write down the card number, expiration date and CVV number. Then after you leave make up a new transaction for any amount they want. You of course wouldn't have a paper receipt for this fraudulent transaction. The key is reviewing your transaction history every few days: looking for unexpected amounts, locations, or number of transactions." }, { "docid": "407870", "title": "", "text": "1.Charges or Fee: These are only applicable if you buy something use Credit Card and do not payback in time. Otherwise if you just have a Credit Card, most of them are free. There are some that charge annual fee. You will know when you apply for a card. 2a. Depoist Money [Voucher]: You can deposit money on your card account by check, or online transfer or by visiting the Bank Branch. I am not sure what Voucher you are talking about. You will have to find that out from the company that issued the voucher. 2b. Withdraw from ATM: Withdrwals are charged typically 5%, plus fixed Rs 50. Plus interest if you have not paid back in time. Are you are having excess money, there will be no interest charge. Check with the card on the exact charges. 3.Excess transfer to Bank: The excess can be transferred to Bank account by making a request to the Card Company and giving out the details. The Card Company would have a defined timeline for this. Most of the Banks that issue cards have a policy not to keep excess deposits longer. What you are trying to do it not a routine transaction and depends what you are trying to achieve." }, { "docid": "354716", "title": "", "text": "Credit card fees on a credit card used for personal expenses are not tax deductible. Credit card fees on a business credit card are deductible on schedule C (or whatever form you're using to report business income and expenses). If you are using the same card for both business and personal ... well, for starters, this is a very bad idea, because it creates exactly the question you're asking. If that's what you're doing, stop, and get separate business and personal cards. If you have separate business and personal cards -- and use the business card only for legitimate business expenses -- then the answer is easy: You can claim a schedule C deduction for any service charges on the business card, and you cannot claim any deduction for any charges on the personal card. In general, though, if you have an expense that is partly business and partly personal, you are supposed to figure out what percentage is business, and that is deductible. In an admittedly brief search, I couldn't find anything specifically about credit cards, but I did find this similar idea on the IRS web site: Generally, you cannot deduct personal, living, or family expenses. However, if you have an expense for something that is used partly for business and partly for personal purposes, divide the total cost between the business and personal parts. You can deduct the business part. For example, if you borrow money and use 70% of it for business and the other 30% for a family vacation, you can deduct 70% of the interest as a business expense. The remaining 30% is personal interest and is not deductible. Refer to chapter 4 of Publication 535, Business Expenses, for information on deducting interest and the allocation rules. (https://www.irs.gov/businesses/small-businesses-self-employed/deducting-business-expenses) So, PROBABLY, you could add up all the charges you made on the card, figure out how much was for business and how much for personal, calculate the business percentage, and then deduct this percentage of the service fees. If the amount involved is not trivial, you might want to talk to an accountant or a lawyer." }, { "docid": "467581", "title": "", "text": "\"There are two things I can think of that might be different in other countries: Until 2013, American Express, Visa and MasterCard prevented businesses from charging extra for credit card usage, and credit card surcharges still illegal in several states. Since credit card companies add a surcharge to credit card purchases, and merchants can't pass that onto credit card users, they just make everyone pay extra instead. Since everyone gets charged the credit card surcharge, you might as well use a credit card and recoup some of that via \"\"rewards\"\" points. Almost all credit cards here have grace periods, where you won't be charged interest if you pay back your loans in full within some period of time (at least 21 days). This makes credit cards attractive to people who don't need a loan, but like the convenience that credit cards provide (not carrying cash, extra insurance, better fraud protection). Apparently grace periods aren't required by law here, so this might be common in other countries as well.\"" }, { "docid": "173929", "title": "", "text": "My recommendation is to not ask for a credit increase, but just increase the utilization of one card if you have multiple cards, and decrease the utilization of the others, and continue paying off all cards in full each month. In a few months, you will likely be offered a credit increase by the card that is getting increased use. The card company that is getting the extra business knows that you are paying off big bills each month and keeping your account in good standing, and they will likely offer you a credit increase all by themselves because they want to keep your business. If no offer is forthcoming, you can call the card company and ask for a credit increase. If they refuse, tell them that you will be charging very little on the card in the future (or even canceling your card, though that will cause a hit on your credit score) because of their refusal, and switch your high volume to a different card." }, { "docid": "583321", "title": "", "text": "\"You should dispute the transaction with the credit card. Describe the story and attach the cash payment receipt, and dispute it as a duplicate charge. There will be no impact on your score, but if you don't have the cash receipt or any other proof of the alternative payment - it's your word against the merchant, and he has proof that you actually used your card there. So worst case - you just paid twice. If you dispute the charge and it is accepted - the merchant will pay a penalty. If it is not accepted - you may pay the penalty (on top of the original charge, depending on your credit card issuer - some charge for \"\"frivolous\"\" charge backs). It will take several more years for either the European merchants to learn how to deal with the US half-baked chip cards, or the American banks to start issue proper chip-and-PIN card as everywhere else. Either way, until then - if the merchant doesn't know how to handle signatures with the American credit cards - just don't use them. Pay cash. Given the controversy in the comments - my intention was not to say \"\"no, don't talk to the merchant\"\". From the description of the situation it didn't strike me as the merchant would even bother to consider the situation. A less than honest merchant knows that you have no leverage, and since you're a tourist and will probably not be returning there anyway - what's the worst you can do to them? A bad yelp review? You can definitely get in touch with the merchant and ask for a refund, but I would not expect much to come out from that.\"" }, { "docid": "298729", "title": "", "text": "\"I completely agree with @littleadv in favor of using the credit card and dispute resolution process, but I believe there are more important details here related to consumer protection. Since 1968, US citizens are protected from credit card fraud, limiting the out-of-pocket loss to $50 if your card is lost, stolen, or otherwise used without your permission. That means the bank can't make you pay more than $50 if you report unauthorized activity--and, nicely, many credit cards these days go ahead and waive the $50 too, so you might not have to pay anything (other than the necessary time and phone calls). Of course, many banks offer a $50 cap or no fees at all for fraudulent charges--my bank once happily resolved some bad charges for me at no loss to me--but banks are under no obligation to shield debit card customers from fraud. If you read the fine print on your debit card account agreement you may find some vague promises to resolve your dispute, but probably nothing saying you cannot be held liable (the bank is not going to lose money on you if they are unable to reverse the charges!). Now a personal story: I once had my credit card used to buy $3,000 in stereo equipment, at a store I had never heard of in a state I have never visited. The bank notified me of the surprising charges, and I was immediately able to begin the fraud report--but it took months of calls before the case was accepted and the charges reversed. So, yes, there was no money out of my pocket, but I was completely unable to use the credit card, and every month they kept on piling on more finance fees and late-payment charges and such, and I would have to call them again and explain again that the charges were disputed... Finally, after about 8 months in total, they accepted the fraud report and reversed all the charges. Lastly, I want to mention one more important tool for preventing or limiting loss from online purchases: \"\"disposable\"\", one-time-use credit card numbers. At least a few credit card providers (Citibank, Bank of America, Discover) offer you the option, on their websites, to generate a credit card number that charges your account, but under the limits you specify, including a maximum amount and expiration date. With one of these disposable numbers, you can pay for a single purchase and be confident that, even if the number were stolen in-transit or the merchant a fraud, they don't have your actual credit card number, and they can never charge you again. I have not yet seen this option for debit card customers, but there must be some banks that offer it, since it saves them a lot of time and trouble in pursuing defrauders. So, in short: If you pay with a credit card number you will not ever have to pay more than $50 for fraudulent charges. Even better, you may be able to use a disposable/one-time-use credit card number to further limit the chances that your credit is misused. Here's to happy--and safe--consumering!\"" } ]

[ { "docid": "156326", "title": "", "text": "Wow, I had never heard of this before but I looked into it a bit and Mikey was spot on. It seems that if you don't pay attention to the fine print when making credit card purchases (as most of us tend to skip) many companies have stipulations that allow continued charges if they are recurring fees (monthly, yearly, etc.) even after you have cancelled the card." } ]

[ { "docid": "583321", "title": "", "text": "\"You should dispute the transaction with the credit card. Describe the story and attach the cash payment receipt, and dispute it as a duplicate charge. There will be no impact on your score, but if you don't have the cash receipt or any other proof of the alternative payment - it's your word against the merchant, and he has proof that you actually used your card there. So worst case - you just paid twice. If you dispute the charge and it is accepted - the merchant will pay a penalty. If it is not accepted - you may pay the penalty (on top of the original charge, depending on your credit card issuer - some charge for \"\"frivolous\"\" charge backs). It will take several more years for either the European merchants to learn how to deal with the US half-baked chip cards, or the American banks to start issue proper chip-and-PIN card as everywhere else. Either way, until then - if the merchant doesn't know how to handle signatures with the American credit cards - just don't use them. Pay cash. Given the controversy in the comments - my intention was not to say \"\"no, don't talk to the merchant\"\". From the description of the situation it didn't strike me as the merchant would even bother to consider the situation. A less than honest merchant knows that you have no leverage, and since you're a tourist and will probably not be returning there anyway - what's the worst you can do to them? A bad yelp review? You can definitely get in touch with the merchant and ask for a refund, but I would not expect much to come out from that.\"" }, { "docid": "52250", "title": "", "text": "It sounds like your current loan is in your name. As such, you are responsible for paying it. Not your family, you. It also sounds like the loan payments are regularly late. That'll likely drastically affect your credit rating. Given what you've said, it doesn't surprise me that you were declined for a credit card. With the information on your credit report, you are a poor risk. Assuming your family is unable to pay loan on time (and assuming you aren't willing to do so), you desperately need to get your name off the loan. This may mean selling the property and closing out the loan. This won't be enough to fix your credit, though. All that will do is stop making your credit worse. It'll take a few years (five years in Canada, not sure how many years in India) until this loan stops showing up on your credit report. That's why it is important to do this immediately. Now, can a bank give you a loan or a credit card despite bad credit? Yes, absolutely. It all depends on how bad your credit is. If the bank is willing to do so, they'll most likely charge a higher interest rate. But the bank may well decide not to give you a loan. After all, your credit report shows you don't make your loan payments on time. You may also want to request your own copy of your credit report. You may have to pay for this, especially if you want to see your score. This could be valuable information if you are looking to fix your finances, and may be worth the cost. If you are sure it's just this one loan, it may not be necessary. Good luck! Edit: In India CIBIL is the authority that maintains records. Getting to know you exact score will help. CIBIL offers it via TransUnion. The non-payment will keep appearing on your record for 3 years. As you don't have any loans, get a credit card from a Bank where you have Fixed Deposits / PPF Account as it would be easier to get one. It can then help you build the credit." }, { "docid": "328760", "title": "", "text": "Yes, they're referring to the credit card dispute (chargeback) process. In the case of dispute, credit card company will refund/freeze your charge so you don't have to pay until the dispute is resolved (or at all, if resolved in your favor). If the dispute is resolved in your favor, your credit card company will charge back the merchant's service provider which in turn will charge back (if it can) the merchant itself. So the one taking the most risk in this scenario is the merchant provider, this is why merchants that are high risk pay significantly higher fees or get dropped." }, { "docid": "520205", "title": "", "text": "Patience is the key here, I hate to say! There are five factors to FICO credit scores: Payment history is adversely affected by late payments - so always pay on time, otherwise your report will be haunted for seven years! 👻 Credit utilization has to do with how much of your available credit is currently in use - lower is better, but 0% isn't good either because they want to see that you're using credit. 10% or less is a good goal, and try to keep any single card balance to 30% or less when its statement close date rolls around. Credit history is based on the average age of all of your accounts, cards or otherwise, the older the better. Don't close either of your other cards (because that would cause your average account age to fall), and make sure to use the store card at least occasionally, because lenders sometimes decide to close unused lines of credit. Credit mix has to do with the different types of credit you hold and is why your bank's website suggested taking out a loan. It also has to do with the number of accounts overall; I've never found a satisfactory answer for what the sweet spot is, but I suspect it's in the 6-12 range? You wouldn't want to get several new ones at the same time because... New credit is affected by the credit inquiries (hard pulls) that occur when you apply for new cards or loans. Inquiries stay on your report for two years before falling off. This is almost certainly where your score dropped. You also mentioned not knowing if some hospital bills are still affecting your score. You'll want to review your credit reports and find out, plus checking your credit reports regularly is a really great habit to get into because errors (and fraud) can and do happen. There are three credit reporting agencies: Experian, Equifax, and TransUnion, and you'll want to review all three. You can get one free report from each of them every year: https://www.usa.gov/credit-reports It can take a couple of months for a new credit account to show up on your credit report, so your score should recover and go even higher once that happens. Sit tight, as annoying as that is!" }, { "docid": "181855", "title": "", "text": "\"Well, I answered a very similar question \"\"Credit card payment date\"\" where I showed that for a normal cycle, the average charge isn't due for 40 days. The range is 35-55, so if you want to feel good about the float just charge everything the day after the cycle closes, and nothing else the rest of the month. Why is this so interesting? It's no trick, and no secret. By the way, this isn't likely to be of any use when you're buying gas, groceries, or normal purchases. But, I suppose if you have a large purchase, say a big TV, $3000, this will buy you extra time to pay. It would be remiss of me to not clearly state that anyone who needs to take advantage of this \"\"trick\"\" is the same person who probably shouldn't use credit cards at all. Those who use cards are best served by charging what they can afford to pay at that moment and not base today's charges on what paychecks will come in by the due date of the credit card bill.\"" }, { "docid": "456147", "title": "", "text": "It is the people who you bought the ticket from. Blocking is frequently done by hotels, gas stations, or rental car companies. Also, for anything where the credit card might be used to cover any damages or charges you might incur later as part of the transaction. In essence, they are reserving part of your credit limit, ostensibly to cover charges they reasonably expect you might incur. For example, when you start pumping gas using a credit card they may block out $100 to make sure you don't pump a full tank and your credit card is declined because you ran over your limit at $3. In general, the blocks clear fairly quickly after you settle up with the company on your final bill. You can also ask the company to clear the block, but I don't think they are required to by law in any specific time period. It may be up to their (and your) agreement with the credit card company. Normally it isn't an issue and you don't even notice this going on behind the scenes, but if you keep your credit card near its limit, or use a debit card it can lead to nasty surprises (e.g. they can make you overdraw your account). One more reason not to use debit cards. More information is available here on the Federal Trade Commission's website." }, { "docid": "44223", "title": "", "text": "The biggest risk is Credit Utilization rate. If you have a total of $10,000 in revolving credit (ie: credit card line) and you ever have more than 50% (or 33% to be conservative) on the card at any time then your credit score will be negatively impacted. This will be a negative impact even if you charge it on day one and pay it off in full on day 2. Doesn't make much sense but credit companies are playing the averages: on average they find that people who get close to maxing their credit limit are in some sort of financial trouble. You're better off to make small purchases each month, under $100, and pay them off right away. That will build a better credit history - and score." }, { "docid": "407313", "title": "", "text": "Put one of your monthly bills on it. (Utility bill, Netflix, monthly donation to charity, etc.) I have several automatic, recurring monthly charges on my credit card. If you don't have any current monthly bills that you want to switch, contact the Red Cross, or a charity of your choice. They would be very happy to charge your credit card once a month. Alternatively, it might be okay to let it close." }, { "docid": "386668", "title": "", "text": "These are the things to focus on... do not put yourself in debt with a car, there are other better solutions. 1) Get a credit card (Unless you already have one) -Research this and get the best cash back or points card you can get at the best rate. - Start with buying gas and groceries every month do not run the balance up. - Pay the card off every single month. (THIS IS IMPORTANT) - Never carry a balance above 25% of your credit limit. - Every 8 months or so call your credit card company and ask for a credit line increase. They should be able to do this WITHOUT pulling your credit you are only looking for the automatic increment that they can automatically approve. This will help increase your available credit and will help keep your credit utilization low. Only do this is you are successfully doing the other bullet points above. 2) Pay all of your bills on time, this includes everything from water, electricity, phone bill, etc. never be late. Setup automatic payments if you can. 3) Minimize the number of hard credit inquiries. -This is particularly important when you are looking for your mortgage lender. Do not let them pull your credit automatically. You should be able to provide them your credit score and other information and get quotes from those lenders. Do not let them tell you then can't do this... they can. 4)Strategically plan when you close a credit line, closing them will do two things, lower your credit limit often times increasing your credit utilization, and it may hurt your average age of credit. Open one credit card and keep it forever. *Note: Credit Karma is a great tool, you should check your score monthly and see how your efforts are influencing your score. I also like Citi credit cards because they will provide you monthly with your FICO Score which Credit Karma will only provide TransUnion and Equifax. This is educational information and you should consider talking to a banker/lender who can also give you more detailed instructions on how to get your credit improved so that they can approve you for a loan. Many people can get their score above 720 in 1-2 years time going from no credit doing the steps described above. It does take time be patient and don't fall for gimmicks." }, { "docid": "354716", "title": "", "text": "Credit card fees on a credit card used for personal expenses are not tax deductible. Credit card fees on a business credit card are deductible on schedule C (or whatever form you're using to report business income and expenses). If you are using the same card for both business and personal ... well, for starters, this is a very bad idea, because it creates exactly the question you're asking. If that's what you're doing, stop, and get separate business and personal cards. If you have separate business and personal cards -- and use the business card only for legitimate business expenses -- then the answer is easy: You can claim a schedule C deduction for any service charges on the business card, and you cannot claim any deduction for any charges on the personal card. In general, though, if you have an expense that is partly business and partly personal, you are supposed to figure out what percentage is business, and that is deductible. In an admittedly brief search, I couldn't find anything specifically about credit cards, but I did find this similar idea on the IRS web site: Generally, you cannot deduct personal, living, or family expenses. However, if you have an expense for something that is used partly for business and partly for personal purposes, divide the total cost between the business and personal parts. You can deduct the business part. For example, if you borrow money and use 70% of it for business and the other 30% for a family vacation, you can deduct 70% of the interest as a business expense. The remaining 30% is personal interest and is not deductible. Refer to chapter 4 of Publication 535, Business Expenses, for information on deducting interest and the allocation rules. (https://www.irs.gov/businesses/small-businesses-self-employed/deducting-business-expenses) So, PROBABLY, you could add up all the charges you made on the card, figure out how much was for business and how much for personal, calculate the business percentage, and then deduct this percentage of the service fees. If the amount involved is not trivial, you might want to talk to an accountant or a lawyer." }, { "docid": "551879", "title": "", "text": "In the UK there is a significant difference between taking money out of a bank account and out of a credit card account. Banks typically require explicit authorisation before they will transfer money out of a bank account - for example a direct debit agreement. (North American banks are much less strict, and will transfer your money to any reasonably reputable financial organization who asks for it - don't get me started!). However credit cards run very differently. Essentially the onus is on the vendor to get the authorization, which is why you can sign a credit card slip at the corner store, or give your credit card details over the phone, or fill in an online form, and have your credit card account charged. When you signed the credit card agreement you agreed to let people do this. It's also why the credit card company will reverse a transaction if you claim it was unauthorized. So essentially PayPal is like the specialty store you phone up to order something and give your credit card details to - they have just as much authorization to charge your account. Your only protection is that the credit card company will investigate any transactions you claim are fraudulent, and will reimburse you if it is- even if they can't recover the money themselves." }, { "docid": "198349", "title": "", "text": "\"Check whether you're being charged a \"\"Cash advance\"\" fee with your withdrawals, because it's being withdrawn from your credit card account. If that's happening to you, then having a positive balance on your credit card account will dramatically reduce the fees. Quoting from my answer to a similar question on Travel Stack Exchange: It turns out that even though \"\"Cash advance fee - ATM\"\" has \"\"ATM\"\" in it, it doesn't mean that it's being charged by the ATM you're withdrawing from. It's still being charged by the bank of your home country. And depending on your bank, that fee can be minimized by having a positive balance in your credit card account. This isn't just for cards specially marketed at globehoppers and globeshoppers (mentioned in an answer to a similar question), but even for ordinary credit cards: Help minimise and avoid fees An administrative charge of 2% of the value of the transaction will apply to each cash advance made on your card account, where your account has a negative (debit) balance after the transaction has been posted to it. A minimum charge of $2.50 and a maximum charge of $150 will apply in these circumstances. Where your account has a positive (credit) balance after the transaction has been posted to it, a charge of $2.50 will apply to the transaction. Any such charge will appear on your credit card statement directly below the relevant cash advance. A $2.50 charge if your account is positive, versus $20 if the account is negative? That's a bit of a difference!\"" }, { "docid": "216540", "title": "", "text": "You know those perks/benefits that you don't want to give up? Those are funded by the fees you are trying to eliminate by paying cash. The credit card company makes money by interest, merchant fees, and other fees such a annual fees. They give you perks to generate more transactions, thus bringing in more merchant fees. For a small business they need to balance the fee of the credit card transaction with the knowledge that it is convenient for many customers. Some small businesses will set a minimum card transaction level. They do this because the small transaction on a credit card will be more expensive because the credit card company will charge 2% or 50 cents whichever is larger. Yes a business does figure the cost of the cards into their prices, but they can get ahead a little bit if some customers voluntarily forgo using the credit card." }, { "docid": "11936", "title": "", "text": "\"What you have is usually called a pre-paid credit card. You pay some money (Indian Rupees) to the credit card company, and then you can use the card to pay for purchases etc in foreign (non-Indian) currencies upto the remaining balance on the card. If a proposed charge exceeds the remaining balance, the transaction will be declined when you try to use the card. There might be multiple ways that the card is set up, e.g. it might be restricted to charge purchases denominated in US dollars alone, or you might be able to use it anywhere in the world (except India). The balance on the card might be denominated in INR, or in US$, say. In the latter case, the exchange rate at which your INR payment was converted into the $US balance is fixed and agreed to at the time of the original payment: you paid INR 70K (say) and the balance was set to US$ 1000 even though the exchange rate on the open market would have given you a few more US dollars. In the former case with the balance denominated in INR, a charge of US$ 100, say, would be converted to INR at a fixed agreed-upon rate, or at the current exchange rate that the Visa or MasterCard network is using, plus (typically) a 3% fee currency exchange fee, and your balance in INR will decrease accordingly. With all that as prologue, if you made a purchase from Walmart USA and later returned it for a credit, it should increase your credit card balance appropriately. You may be whacked with currency conversion fees along the way depending on how your card is set up, but with a US$-denominated card, a credit of US$100 should increase your card balance by US$100. So, that $US 100 can be spent on something else instead. In short, the card is your \"\"bank\"\" account. You cannot spend more than the remaining balance on the card just like you cannot withdraw more money from your bank account than you have in the account, and you can recharge your card by making more INR payments into it so as to increase the available balance. But it is like a current account in that you are unlikely to earn interest on the balance the way you do with a savings account. So what if you are back in India and have no further use of this card? Can you get your balance back as cash or deposit into your regular bank account? Call the Customer Help line, or read the card agreement you signed.\"" }, { "docid": "21576", "title": "", "text": "\"TL;DR summary: 0% balance transfer offers and \"\"free checks usable anywhere\"\" rarely are a good deal for the customer. 0% rate balance transfer offers (and the checks usable anywhere including payment of taxes) come with a transaction fee because the credit card company is paying off the balance on the other card (or the tax or the electric bill) in the full amount of $X as stated on the other card statement or on the tax/electric bill). This is in contrast to a purchase transaction where if you buy something for $X, you pay the card company $X but the card company pays the merchant something less than $X$. (Of course, the merchant has jacked up the sale price of the item to pass on the charge to you.) Can you get the credit card company to waive the transaction fee? You can try asking them but it is unlikely that you will succeed if your credit score is good! I have seen balance transfer offers with no transaction fees made to people who have don't have good credit scores and are used to carrying a balance on their credit cards. I assume that the company making the offer knows that it will make up the transaction fee from future interest payments. A few other points to keep in mind with respect to using a 0% balance transfer offer to pay off a student loan (or anything else for that matter):\"" }, { "docid": "484261", "title": "", "text": "Generally most businesses will not, but it's not uncommon. Not sure about other countries, but in Australia merchants here generally have to pay VISA or Mastercard a commission if the consumer chooses to use credit. So even if they don't levy a charge, they may have a minimum purchase amount which you can use credit cards for. Amongst some of the ones who do include... Pretty much all of the budget airlines like (Virgin) airlines. I think there's been some outrage with them cause they charge $4.50 per person per trip which in some cases is greater than the transaction cost they have to pay to the credit card companies. Aldi Supermarket link they're kind of a budget supermarket. You got to pay for shopping bags and also charge 1% more for credit card. On a side note, we also have a thing called EFTPOS here (http://en.wikipedia.org/wiki/EFTPOS) which is a debit card network. I think this network charges less commission because generally, a lof of businesses that charge for credit may not charge for EFTPOS. I also feel EFTPOS is also more secure as it requires a pin number, unlike a credit card which requires a signature." }, { "docid": "453147", "title": "", "text": "No credit card company would ever give a card with either no credit limit or that was not in credit (for prepaid cards) because they would earn no money from it. The company's income is entirely derived from fees that they charge you for balances and interest on those balances so a 0 limit card would be worthless to them. Getting a prepaid card and letting the balance hit 0 might be a way around this but the fees that you will be charged , and will become a debt in your name, when the billing system tries to take the first paid month's cost from the card and fails will be exorbitant. They may go so far as dwarfing the actual cost but the one thing that they will certainly do is lower your credit rating so this is not a good idea." }, { "docid": "401254", "title": "", "text": "\"I'm going to go with \"\"ridiculous notion.\"\" :) The vast majority of businesses are legitimate, run by honest people trying to earn a living for themselves and their employees. These days, almost all of them accept credit cards. Crooked businesses are a very small minority. When a bad business over charges you, you dispute the charge, and you get your money back. But that's not all that happens. The bad merchant pays penalties for this, and if it happens more than a couple of times, the merchant loses their merchant account with their bank, which means that they lose their ability to accept credit card payments anymore. A crooked business is not able to rob people via credit card for very long at all. A whitelist would certainly not be able to include every legitimate business. And a blacklist would never be able to be kept up-to-date, as bad businesses come and go continuously; as soon as a business was added to the blacklist, they would lose their merchant account and would no longer need to be on the list. What you are describing is very rare. My brother once had a bad experience with a tech support company where they were repeatedly charging him for a service they never performed. But a credit card chargeback took care of it. If that company made a habit of that, I'm sure that they got in trouble with their bank. Instead, the most common credit card fraud happens when crooks use your credit card at perfectly legitimate businesses. But your whitelist/blacklist wouldn't help you with that at all.\"" }, { "docid": "293363", "title": "", "text": "\"As documented in MyFICO (http://www.myfico.com/credit-education/whats-in-your-credit-score/), there are several factors that affect credit scores. Payment history (35%) The first thing any lender wants to know is whether you've paid past credit accounts on time. This is one of the most important factors in a FICO® Score. As @Ben Miller mentioned, checking your credit report to determine whether or not late payments were reported to credit bureaus will give you a sense of whether or not this was effected. You mentioned several bounced payments, which certainly could have caused this. This would be my largest concern with a closed account, is to investigate why and what was reported to the bureaus, and in turn, other lenders. Also, since this has the highest impact on credit scores (35%), it's arguably, the most important. This is further detailed here, which details the public record and late payment effect on your score. Amounts owed (30%) Having credit accounts and owing money on them does not necessarily mean you are a high-risk borrower with a low FICO® Score....However, when a high percentage of a person's available credit is been used, this can indicate that a person is overextended, and is more likely to make late or missed payments. Given that this card was closed, whatever your credit limit was is now no longer added into your total credit limit. However, your utilization on that card is gone (assuming it gets paid off), depending on any other credit lines, and since you reported \"\"heavy use\"\" that could be a positive impact, though likely not. Length of credit history (15%) In general, a longer credit history will increase your FICO® Scores. However, even people who haven't been using credit long may have high FICO Scores, depending on how the rest of the credit report looks. Depending how old your card was, and particularly since this was your only credit card, it will likely impact your average age of credit lines, depending on other lines of credit (loans etc) you have open. This accounts for about 15% of your score, so not as large of an impact as the first two. Credit mix in use (10%) FICO Scores will consider your mix of credit cards, retail accounts, installment loans, finance company accounts and mortgage loans. Given that this was your only credit card, your loan mix has been reduced (possibly to none). New credit (10%) Research shows that opening several credit accounts in a short period of time represents a greater risk - especially for people who don't have a long credit history. This focuses on credit inquiries, which as you mentioned, you will likely have another either re-opening this credit card or opening another at some point in the future. Regardless, paying off the rest of that card is a priority, as interest rates on average credit cards are over 13%, and often higher (source). This rate comes into play when not paying the balance in full every month, and also as @Ben Miller suggested, I would not utilize a credit card without being able to pay it in full. It can often be a dangerous cycle of debt.\"" } ]

[ { "docid": "192366", "title": "", "text": "The idea is to positively identify you with properly issued government ID. If you show up with your passport, visa, and another form of government-issued identification which the banker can recognize and use (for example - international driver's license, a US-State driver's license, EU internal ID, etc) - it will be quick and painless. Usually, at least two distinct forms of identification are required from foreigners: passport and something else, and not the visa stamped in a passport, that just shoes to show your status upon your W9/W8 requirements may be based. You'll probably be asked for a TIN before any payments are made to you by the bank. If you don't have anything credible to show as your identification it will be equally quick and painless, except that you'd be leaving without a bank account. If your identity cannot be established properly there and then - they will not serve you." } ]

[ { "docid": "305907", "title": "", "text": "To transfer US$30,000 from the USA to Europe, ask your European banker for the SWIFT transfer instructions. Typically in the USA the sending bank needs a SWIFT code and an account number, the name and address of the recipient, and the amount to transfer. A change of currency can be made as part of the transfer. The typical fee to do this is under US$100 and the time, under 2 days. But you should ask (or have the sender ask) the bank in the USA about the fees. In addition to the fee the bank may try to make a profit on the change of currency. This might be 1-2%. If you were going to do this many times, one way to go about it is to open an account at Interactive Brokers, which does business in various countries. They have a foreign exchange facility whereby you can deposit various currencies into your account, and they stay in that currency. You can then trade the currencies at market rates when you wish. They are also a stock broker and you can also trade on the various exchanges in different countries. I would say, though, they they mostly want customers already experienced with trading. I do not know if they will allow someone other than you to pay money into your account. Trading companies based in the USA do not like to be in the position of collecting on cheques owed to you, that is more the business of banks. Large banks in the USA with physical locations charge monthly fees of $10/mo or more that might be waived if you leave money on deposit. Online banks have significantly lower fees. All US banks are required to follow US anti-terrorist and anti-crime regulations and will tend to expect a USA address and identity documents to open an account with normal customers. A good international bank in Europe can also do many of these same sorts of things for you. I've had an account with Fortis. They were ok, there were no monthly fees but there were fees for transactions. In some countries I understand the post even runs a bank. Paypal can be a possibility, but fees can be high ~3% for transfers, and even higher commissions for currency change. On the other hand, it is probably one of the easiest and fastest ways to move amounts of $1000 or less, provided both people have paypal accounts." }, { "docid": "151853", "title": "", "text": "\"In no particular order: - Plumbers are not the kind of trade where advertising to end-customers is very effective. People don't generally write down phone numbers and keep track of them on the basis that \"\"I'll probably need a plumber some day, and I might never have any way to way to learn their phone number unless I write this down right now.\"\" - References through other tradesmen are worth 10x as much as references through end-customers. Get a network of electricians and carpenters and HVAC guys referring to you, and vice-versa. - Especially in the early stages, do whatever it takes to make it right with every customer. A lot of tradesmen offer sloppy low-ball estimates to get the business, and then get stuck explaining why the bill is 3x higher. Nobody is ever going to give you a positive review or referral in that situation. - Forget about your hourly rate and focus on building the business, even if it means losing money on some jobs. Employees get paid by the hour, owners get paid based on satisfied customers. You will make some mistakes in the beginning. Plan to eat them. Eventually, you will make less mistakes, and will learn to price variability into the job. - Don't work with impossible customers, but do whatever it takes to keep lucrative customers happy. A lot of tradesmen get this completely wrong. 20% of your customers will produce 80% of your profits, usually. Do whatever it takes to keep them happy, and avoid the customers who want 80% of your business but who produce 0% profit. - Don't be a dick. Give good customers clear and fair estimates, and tell them where and how you are charging a markup. Don't pick a fight if the guy up the road is charging less, and don't give the customer shit for not knowing how to compare quotes. Show them the meaningful difference in your estimate, explain to them why it's not worth your time to match lowball quotes for junk work, and let them make the decision. - Do every job right. This is something that pays off in the long-run, exponentially. If you can't do it right, don't take it. Make sure that everyone who has ever done business with you comes out happy and satisfied that you were the best option available. - Having the lowest price might get you the most business in the first couple of years, but doing the best work will earn you the most profits and will help build a multi-million-dollar business in the decades to come.\"" }, { "docid": "24165", "title": "", "text": "Update: here is a message the seller just sent me. Does this make sense? I spoke with my bank again and they explained it a little better for me. I guess how it works is they will print out something for you that is called an affidavit in lieu of title that states they are no longer the lein holder and to release it to you. You then take that to the dol and they get it put in your name. He says that's how they do it all the time. When we get to the bank, the teller just verifies the check and I deposit it and they release the funds to pay off the account and that's when you would get the paperwork. You would be there for the whole process so nothing is sketchy. Sorry it's such a pain, I didn't understand how that worked. We've never sold a car with a loan on it before." }, { "docid": "114527", "title": "", "text": "Context: assessed project as part of a tech internship in an investment bank, working in small groups, task: to design an app using a financial solution that has an ethical impact. We came up with (what I hope) is the smart sounding idea of an app for impoverished farmers in developing countries who lack the information and market access that larger or unionised farmers would have. The app would use some kind of decision tree (which may grow with machine learning) to assess the best kind of crops to grow given the region and local conditions for max profitability, and would provide access to some kind of derivatives market, and insurance, allowing the farmers a consistent income. Struggling with the specifics of how the business/finance side of things would work. Let's assume the bank builds the app and puts it on the app-store as part of some charitable initiative. 1) Would the farmers go directly to the bank to price and purchase derivatives on their crops? 2) Options/futures/forwards - which is most appropriate, or would it make sense to offer all three? 3) Is there any way this could be adjusted to provide regular payments, with a lump sum at the end? Would this be something the bank chooses to do, or is there an existing financial instrument for this kind of setup? 4) How does this tie in with the commodities markets (or is that what the derivatives already are?) 5) Probably a long-shot but any chance of know-your-customer implementations for countries with terrible infrastructure? 6) (probably a dumb question) Say the farmer sells an option on his crops, would this be sold directly to the bank or a 3rd party who'd be more interested in actually buying the crop? Or is this a far too simplistic view? Basically who would the farmer actually deliver the crops to? 7) Any other issues/oversights? Any ideas to make this sound somewhat viable? It doesn't have to strictly be realistic in any sense, but it also can't be flat-out incorrect! tyvm in advance, edited to make questions clearer" }, { "docid": "149032", "title": "", "text": "It depends on your bank and your terms of service, but using the card one way or the other may affect things such as how long it takes to process, what buyer protections you have, etc. It also affects the store as I believe they are charged differently for debit vs credit transactions." }, { "docid": "585269", "title": "", "text": "\"(Since you used the dollar sign without any qualification, I assume you're in the United States and talking about US dollars.) You have a few options here. I won't make a specific recommendation, but will present some options and hopefully useful information. Here's the short story: To buy individual stocks, you need to go through a broker. These brokers charge a fee for every transaction, usually in the neighborhood of $7. Since you probably won't want to just buy and hold a single stock for 15 years, the fees are probably unreasonable for you. If you want the educational experience of picking stocks and managing a portfolio, I suggest not using real money. Most mutual funds have minimum investments on the order of a few thousand dollars. If you shop around, there are mutual funds that may work for you. In general, look for a fund that: An example of a fund that meets these requirements is SWPPX from Charles Schwabb, which tracks the S&P 500. Buy the product directly from the mutual fund company: if you go through a broker or financial manager they'll try to rip you off. The main advantage of such a mutual fund is that it will probably make your daughter significantly more money over the next 15 years than the safer options. The tradeoff is that you have to be prepared to accept the volatility of the stock market and the possibility that your daughter might lose money. Your daughter can buy savings bonds through the US Treasury's TreasuryDirect website. There are two relevant varieties: You and your daughter seem to be the intended customers of these products: they are available in low denominations and they guarantee a rate for up to 30 years. The Series I bonds are the only product I know of that's guaranteed to keep pace with inflation until redeemed at an unknown time many years in the future. It is probably not a big concern for your daughter in these amounts, but the interest on these bonds is exempt from state taxes in all cases, and is exempt from Federal taxes if you use them for education expenses. The main weakness of these bonds is probably that they're too safe. You can get better returns by taking some risk, and some risk is probably acceptable in your situation. Savings accounts, including so-called \"\"money market accounts\"\" from banks are a possibility. They are very convenient, but you might have to shop around for one that: I don't have any particular insight into whether these are likely to outperform or be outperformed by treasury bonds. Remember, however, that the interest rates are not guaranteed over the long run, and that money lost to inflation is significant over 15 years. Certificates of deposit are what a bank wants you to do in your situation: you hand your money to the bank, and they guarantee a rate for some number of months or years. You pay a penalty if you want the money sooner. The longest terms I've typically seen are 5 years, but there may be longer terms available if you shop around. You can probably get better rates on CDs than you can through a savings account. The rates are not guaranteed in the long run, since the terms won't last 15 years and you'll have to get new CDs as your old ones mature. Again, I don't have any particular insight on whether these are likely to keep up with inflation or how performance will compare to treasury bonds. Watch out for the same things that affect savings accounts, in particular fees and reduced rates for balances of your size.\"" }, { "docid": "101993", "title": "", "text": "It's because they're used to it and it works for them. Everything other reason is meh. Used to, you could float a check to payday... have no money in the account, yet write a check a couple days before payday because you know that's how long it takes for the check to get to your bank and when it does, you'll have the money. But most (if not all) business that still accept checks (a dying subset, for sure) electronically present the check now. They take it from your hand, run it through a machine at the register, and it immediately clears the bank, just like a debit card would. We're nearing the end of the check era, atleast on personal accounts. Kids growing up now won't even know what a check is, aside from it's namesake on a type of bank account." }, { "docid": "576269", "title": "", "text": "Unfortunately not. Even if the credit card balance is positive (i.e. customer has overpaid the credit card account), you cannot withdraw cash (for free) - as any cash withdrawal is subject to 12.9% interest - even if repaid in full at the end of the month! The clarity credit card is one of the best cards for overseas spending, as its load free (no fees for purchases abroad) and it gives near perfect exchange rates. If your balance is positive, you start at £0, then fund that credit card account from your bank account £500. You can then spend on your credit card, and when your next bill is due at the end of the month - they will use that extra £500 sitting in your account first, and ask for the remainder from you. i.e. scenario1: scenario 2: It is better in my opinion, to set up a direct debit to always clear out the full amount on your credit card. That way, you have cash in your bank account for emergencies (getting £500 back from a credit card will take a few days to process as opposed to having the ability to withdraw cash from the cashpoint 24/7). And once the direct debit is paid automatically at the end of the month, there are no fees - voila your credit card is almost like a debit card, spend on it when you like, it gets paid automatically, no hassle, no worries. This approach does take a careful mindset though, as you need to know your credit limits and also you need to ensure your bank account has enough to pay off the direct debit at the end of the month. Otherwise those darn fees will get you (and hurt your credit rating). For cash spending, you will want to either take cash with you (check online here for best rates & get the money well in advance to avoid fees). Also in some countries the exchange rate is better there, than in the UK, google will help you here. If you dont like the idea of carrying large sums of cash with you can use a prepaid card like CaxtonFX, which is one of the better ones out there. The other well known ones are FairFX and Travelex Cash Passport." }, { "docid": "37189", "title": "", "text": "\"Your question points out how most fractional reserve banks are only a couple of defaults away from insolvency. The problem arises because of the terms around the depositors' money. When a customer deposits money into a bank they are loaning their money to the bank (and the bank takes ownership of the money). Deposit and savings account are considered \"\"on-demand\"\" accounts where the customer is told they can retrieve their money at any time. This is a strange type of loan, is it not? No other loan works this way. There are always terms around loans - how often the borrower will make payments, when will the borrower pay back the loan, what is the total time frame of the loan, etc.. The bank runs into problems because the time frame on the money they borrowed (i.e. deposits) does not match the time frame on the money they are lending.\"" }, { "docid": "185403", "title": "", "text": "Believe it or not, this is done as a service to you. The reason for this has to do with a fundamental difference between a credit card account and a checking account. With a credit card account, there is no money in the account; every charge is borrowed money. When you get to your credit limit, your credit transactions will start getting declined, but if the bank does for some reason let one get approved, it's not a big deal for anyone; it just means that you owe a little more than your credit limit. Note that (almost) every credit card transaction today is an electronic transaction. A checking account, however, has real money in it. When it is gone, it is gone. When a balance inquiry is done, the bank has no way of knowing how many checks you've written that have not been cashed yet. It is a customer's responsibility to know exactly how much money is available to spend. If you write more checks than you have money for in your account, technically you have committed a crime. Unfortunately, there are too many people now that are not taking the responsibility of calculating their own checking account balance seriously, and bad checks are written all the time. When a bank allows these transactions to be paid even though you don't have enough money in your account, they are preventing a crime from being committed by you. The fee is a finance charge for loaning you the money, but it is also there to encourage you not to spend more than you have. Even if you use a debit card, it is still tied to a checking account, and the bank doesn't know if you have written enough checks to overdraw your account or not. It is still your responsibility to keep track of your own available balance. Every time this happens to you, thank the bank as you pay this fee, and then commit to keeping your own running balance and always knowing how much you have left in your account." }, { "docid": "127559", "title": "", "text": "\"Why? Because they can get away with it, of course. In short - why not? You may want to read the answers to this similar question (my answer is the one accepted by the OP). Who has the money? The banks, who else. I have found that some banks are capable of sending/receiving ACH transfers faster than others. I have accounts in two banks, lets call them A and B. If I send money (push) from A to B, it may take several days. But if I decide to pull the money from A to B by originating the transaction through my account at B - the money arrives the next day! So the actual transfer only takes a night, one business day. Its just the direction that matters - if the bank has to give the money out, it will do all it can (including taking 2-3 days for \"\"processing\"\") to keep the money as long as possible. But when another bank charges them - they have no choice but to pay. By the way, bank B behaves better - when I send the money from my account at B, it arrives to A the next day as well. Try a similar experiment. Instead of originating the transaction at the sender bank - try to originate it at the receiver bank, see how long it takes then for the money to appear on your account after it disappeared from the other one.\"" }, { "docid": "262152", "title": "", "text": "Anything can be insured for the right price... this product is offered for devices at higher risk, which would be logical purpose of owner needing coverage for a specific length of time. Typically this would be a type of adverse selection, but TROV targets customers that typically would not require insurance on their device, but as you said they may be traveling and putting their devices at added risk. Like all insurance companies, their Loss Ratio (Losses/Premiums) will depend on the law of large numbers and spread of risk. As we know, the majority of the time trips are taken, electronics make it back home safely. Like many tech companies, their advantage over conventional insurers is likely low overhead costs. Being on a mobile platform, they likely have a fraction of the claims handling cost of a conventional insurer. Payments are likely automated by linking bank accounts, so there is little transaction cost burden on this company. In short, their operation is likely highly automated with few staff and low expenses, allowing them to take on a higher loss ratio than conventional insurers and still leave room for profit. Without having ever used this service, I can tell you they likely price in anticipated fraud, the same way Walmart prices in inventory loss (shoplifting) into their prices. I personally would share your concern that it'd be difficult to combat fraud on such a platform, especially with no claims adjusters whom are typically the first line of defense. Again, I answer this never having used their service, but I work as an Analyst at a large insurer and these would be my assumptions based on what I know of TROV." }, { "docid": "279480", "title": "", "text": "\"This answer is based on my understanding of the US banking system. We have check cashing businesses here too, which are just like what you describe, except for the spelling :-) Let's consider what \"\"cash it for free at the bank\"\" really means, and why it might not be an option for everyone. One key issue is \"\"which bank?\"\" As an example, suppose that I have an account at ABC Bank. I take out my checkbook for that account and write you a check for $500. (Terminology: In this case, I am the drawer or maker of the check, ABC Bank is the drawee bank, and you, user54609, are the payee. Disclaimer: \"\"You\"\" here is meant as a generic pronoun and I do not mean to insinuate that anything here actually applies to you personally.) There are two common things you might do with the check: If you have an account at some bank, say XYZ Bank, you might take the check to XYZ Bank and deposit it in your account. (You might be able to do this through an ATM, mobile app, or by mail, instead of in person.) XYZ Bank does not have a way to verify with certainty that the check is valid (e.g. they don't know what my signature looks like, nor whether I actually have $500 in my account at ABC), so they send it to ABC Bank, which verifies the check and transfers $500 to XYZ. (This is usually done through a central clearinghouse, such as the Federal Reserve in the US, and in some cases an image of the check may be sent electronically, instead of the physical check.) This process takes some time, so XYZ may not make the $500 available to you right away - there may be a hold period before you can withdraw that $500 from your account. You could take the check to ABC Bank, in person. They will verify on the spot that the check is valid and that you are in fact user54609. If everything looks good, they will hand you $500 in cash (perhaps subtracting a fee of a few dollars). Now we can see some possible problems with each of these approaches. For 1: Maybe you don't have a bank account at all. There are many possible reasons: You don't have enough money to meet the minimum balance that a bank account would require. You used to have an account, but you overdrew or otherwise misused an account, so the bank closed it. They then entered you in a registry such as ChexSystems which ensures that other banks know about this, and so no other bank will open a new account for you. You immigrated to the country illegally and cannot get the documents (driver's license, social security number, etc) that a bank normally requires to open an account. You simply don't like the idea of keeping your money in a bank. Maybe you do have an account at XYZ Bank, but it's in another town. You need the cash today, so you can't use mail or a mobile app, and third-party ATMs usually don't accept deposits. Maybe you need to spend the money today, and XYZ Bank would place a hold. For 2: ABC Bank may not have a branch you can conveniently visit. Maybe the nearest one is a long way away, in another city or across the country. Or maybe ABC is an online bank with no physical branches at all. Maybe it's in the same city, but you don't have transportation to get you there. Or maybe it's simply less convenient than the check-cashing business on the corner. Maybe it is after usual banking hours, or a weekend, and ABC Bank is closed, but you need cash now. In any of these situations, \"\"cash it at the bank\"\" might not be a viable option, and so you might reasonably turn to a check cashing business instead. As you say, you will pay a much higher fee there, but maybe it is worth it to you, or you just don't have any choice. Another possibility, of course, is that you are poorly educated about the banking system, and you don't really understand that 1 and 2 are options, or how to go about them. But there's this storefront on the corner that says \"\"Check Cashing\"\", so this seems like a low-stress, uncomplicated way to exchange this piece of paper for money. As such, there certainly are people who legitimately might want to cash a valid check at a check-cashing business. Check cashing business do of course take some risk of fraud, since they can't necessarily verify the check. There are sometimes steps they can take to minimize this risk. Sometimes they can call ABC Bank and check that I have sufficient money in my account. Maybe they'll only accept certain kinds of checks, such as payroll checks from well-known companies for which you can produce a matching pay stub. And they can demand identification from you (perhaps allowing more flexible options than a bank), which helps ensure that you are the payee, and would make you easier to track down if you did commit fraud. But they will probably lose some money this way, so they will have to make their fees high enough to cover those losses.\"" }, { "docid": "293122", "title": "", "text": "\"First, there are not necessarily two accounts involved. Usually the receiving party can take the check to the bank on which it is drawn and receive cash. In this case, there is only one bank, it can look to see that the account on which the check is drawn has sufficient funds, and make an (essentially irrevocable) decision to pay the bearer. (Essentially irrevocable precisely because the bearer did not necessarily have to present account information.) The more usual case is that the receiving party deposits the check into an account at their own bank. The receiving party's bank then (directly or indirectly - in the US via the Federal Reserve) presents the check to the paying party's bank. At that point if the there are insufficient funds, the check \"\"bounces\"\" and the receiving party's account will be debited. The receiving party's bank knows that account number because, in this case, the receiving party is a customer of the bank. This is why funds from check deposits are typically not available for immediate withdrawal.\"" }, { "docid": "357108", "title": "", "text": "Although if you count only your data, it would be quite less 10 MB, multiply this by 1 million customers and you can see how quickly the data grows. Banks do retain data for longer period, as governed by country laws, typically in the range of 7 to 10 years. The online data storage cost is quite high 5 to 10 times more than offline storage. There are other aspects, Disaster recover time, the more the data the more the time. Hence after a period of time Banks move the data into Archive that are cheaper to store but are not available to online query, plus the storage is not optimized for search. Hence retrieval of this data often takes few days if the regulator demands or court or any other genuine request for data retrieval." }, { "docid": "38571", "title": "", "text": "\"The answer probably varies with local law, and you haven't said where you're located. In most or all US states, it appears that after some statutory length of time, the bank would transfer the money to the state government, where it would be held indefinitely as \"\"unclaimed property\"\" in the name of the recipient (technically, the payee, the person to whom the check is made payable). This process is called escheatment. Most states publish a list of all unclaimed property, so at some later date the payee could find their name on this list, and realize they were entitled to the funds. There would then be a process by which the payee could claim the funds from the state. Usually the state keeps any interest earned on the money. As far as I know, there typically wouldn't be any way for you, the person who originated the payment, to collect the money after escheatment. (Before escheatment, if you have the uncashed check in your possession, you can usually return it to the bank and have it refunded to you.) I had trouble finding an authoritative source explaining this, but a number of informal sources (found by Googling \"\"cashier check escheatment\"\") seem to agree that this is generally how it works. Here is the web site for a law firm, saying that in California an uncashed cashier's check escheats to the state after 3 years. Until escheatment occurs, the recipient can cash the check at any time. I don't think that cashier's checks become \"\"stale\"\" like personal checks do, and there isn't any situation in which the funds would automatically revert to you.\"" }, { "docid": "271459", "title": "", "text": "\"Why isn't the above the business model of a loan? It is the model of some types of loans. It's called a \"\"Line of credit\"\" (LOC). I have two them, one for my business, and one for me personally. (Why does this question exist:) Is it an 30-year loan or a 10-year loan? As you mentioned, the concept of term doesn't exist for these types of loans. As long as I pay the interest and don't go over the max of my credit limit, I could keep the money indefinitely. Due to this, lines of credit almost always have a variable interest rate. (In the US they are tied to the Prime rate.) (Why does this question exist:) If you pay extra, do you want the extra to go toward the interest or toward the principal? Again, this concept also doesn't exist with a LOC. There is a minimum payment that you must make each month, but there is nothing that prevents you from making the minimum payment and then immediately taking the exact payment you made back out again. Of course this increases the total you owe, and eventually you would hit your maximum credit limit and would no longer be able to take the full payment back out. Years ago I maxed out my business line and didn't have enough money to make the payment so my bank was nice enough to raise my limit for me (so I could take enough out to make the payment), but if I did that multiple times I'm sure they would have eventually said no. Fortunately my clients finally paid me and I paid off the line, but I still keep the LOC today even though I rarely use it. By the way, beyond traditional LOCs, they also exist in other forms, both secured and unsecured. A common secured product in the US is a 2nd lien holder to a home (the first being the mortgage), called a HELOC (Home Equity Line Of Credit). Many banks also offer unsecured LOCs on a checking account which they sometimes call \"\"overdraft protection\"\". Update: based on a comment to this answer, I now realize that the full question now becomes something similar to: Given that the Line of Credit loan model exists, why aren't all loans like this? or, refining it further: What advantages do other loan types have over the Line of Credit model, specifically finite term loans? A main advantage of a term loan over a line of credit is that the bank knows when they will get the money back. If every loan a bank made was a LOC product, and no one ever paid it back, then they'd eventually run out of money. That's obviously an oversimplification but the principle (pun intended) holds. To prevent this the bank would have to call due the loan, and doing this usually leaves customers angry. Years ago I had a business LOC with a bank that discontinued their business LOC product, and called every customer's loan due. I had a balance and they offered to convert it to a 5 year term loan, which I did, but I was so mad at them that I switched banks and paid off the term loan shortly after. Another advantage of a term loan is it forces the customer to be a little more responsible. Lines of credit can be dangerous for those that misuse it because if the amount owed is driven up due to bad behavior, there is nothing to force the bad behavior to stop. A perfect example of this can be found with governments. Some governments borrow money until their line of credit is used up, and then they just keep increasing their credit limit. There is no incentive for the officials in charge of the government to stop doing this because it isn't even their money. If those lines of credits were converted to term loans, the government would be forced to increase revenue and/or decrease expenses, which is the only way to get out of debt. Some other advantages of term loans over a LOC:\"" }, { "docid": "587032", "title": "", "text": "\"The simple answer is that, even though mortgages can go for 10, 15, 20 and 30 year terms in the U.S., they're typically backed by bonds sold to investors that mature in 10 years, which is the standard term for most bonds. These bonds, in the open market, are compared by investors with the 10-year Treasury note, which is the gold standard for low-risk investment; the U.S. Government has a solid history of always paying its bills (though this reputation is being tested in recent years with fights over the debt ceiling and government budgets). The savvy investor, therefore, knows that he or she can make at least the yield from the 10-year T-note in that time frame, with virtually zero risk. Anything else on the market is seen as being a higher risk, and so investors demand higher yields (by making lower bids, forcing the issuer to issue more bonds to get the money it needs up front). Mortgage-backed securities are usually in the next tier above T-debt in terms of risk; when backed by prime-rate mortgages they're typically AAA-rated, making them available to \"\"institutional investors\"\" like banks, mutual funds, etc. This forms a balancing act; mortgage-backed securities issuers typically can't get the yield of a T-note, because no matter how low their risk, T-debt is lower (because one bank doesn't have the power to tax the entire U.S. population). But, they're almost as good because they're still very stable, low-risk debt. This bond price, and the resulting yield, is in turn the baseline for a long-term loan by the bank to an individual. The bank, watching the market and its other bond packages, knows what it can get for a package of bonds backed by your mortgage (and others with similar credit scores). It will therefore take this number, add a couple of percentage points to make some money for itself and its stockholders (how much the bank can add is tacitly controlled by other market forces; you're allowed to shop around for the lowest rate you can get, which limits any one bank's ability to jack up rates), and this is the rate you see advertised and - hopefully - what shows up on your paperwork after you apply.\"" }, { "docid": "65461", "title": "", "text": "First, let me fill in the gaps on your situation, based on the numbers you've given so far. I estimate that your student loan balance (principal) is $21,600. With the variable rate loan option that you've presented, the maximum interest rate you could be charged would be 11.5%, which would bring your monthly payment up to that $382 number you gave in the comments. Your thoughts are correct about the advantage to paying this loan off sooner. If you are planning on paying off this loan sooner, the interest rate on the variable rate loan has less opportunity to climb. One thing to be cautious of with the comparison, though: The $1200 difference between the two options is only valid if your rate does not increase. If the rate does increase, of course, the difference would be less, or it could even go the other way. So keep in mind that the $1200 savings is only a theoretical maximum; you won't actually see that much savings with the variable rate option. Before making a decision, you need to find out more about the terms of this variable rate loan: How often can your rate go up? What is the loan rate based on? I'm not as familiar with student loan variable rate loans, but there are other variable rate loans I am familiar with: With a typical adjustable rate home mortgage, the rate is locked for a certain number of years (perhaps 5 years). After that, the bank might be allowed to raise the rate once every period of months (perhaps once every year). There will be a limit to how much the rate can rise on each increase (perhaps 1.0%), and there will be a maximum rate that could be charged over the life of the loan (perhaps 12%). The interest rate on your mortgage can adjust up, inside of those parameters. (The actual formula used to adjust will be found in the fine print of your mortgage contract.) However, the bank knows that if they let your rate get too high above the current market rates, you will refinance to a different bank. So the mortgage is typically structured so that it will raise your rate somewhat, but it won't usually get too far above the market rate. If you knew ahead of time that you would have the house paid off in 5 years, or that you would be selling the house before the 5 years is over, you could confidently take the adjustable rate mortgage. Credit cards, on the other hand, also typically have variable rates. These rates can change every month, but they are usually calculated on some formula determined ahead of time. For example, on my credit card, the interest rate is the published Prime Rate plus 13.65%. On my last statement, it said the rate was 17.15%. (Of course, because I pay my balance in full each month, I don't pay any interest. The rate could go up to 50%, for all I care.) As I said, I don't know what determines the rate on your variable rate student loan option, and I don't know what the limits are. If it climbs up to 11.5%, that is obviously ridiculously high. I recommend that you try to pay off this student loan as soon as you possibly can; however, if you are not planning on paying off this student loan early, you need to try to determine how likely the rate is to climb if you want to pick the variable rate option." } ]

[ { "docid": "78117", "title": "", "text": "The company I work with uses Intuit QuickBooks Online and have had zero problems with it. The functionality is effective and it fits the size of our company as well. (Not huge, but I wouldn't consider it a 'small business') Also, you can try a 30 day free trial. QuickBooks Simple Start focuses on small business accounting, so for this reason it has a cleaner interface and is simple to use. QuickBooks Simple Start compared to Quicken Home This article doesn't exactly have a bright light shining on Quickbooks, but I think it's fair to show you other alternatives: http://www.pcmag.com/article2/0,2817,2382514,00.asp [Note that it is from 2011]" } ]

[ { "docid": "345530", "title": "", "text": "I use GNUCash. It's a bit more like Quickbooks than plain Quicken, but it's not all that complicated. Probably the most difficult part is understanding the idea of income accounts. Benefits: For short term planning, I use scheduled transactions. If I'm spending more than I have, it'll show up here. Every paycheck and dollar spent or invested is recorded with the exact date I anticipate it will happen, 30 days in advance. If that would overdraw my checking account, the Future Minimum Balance field will go negative and red. This lets me move float to higher interest savings and retirement funds, and avoids overdraft fees or other mishaps. By looking 30 days ahead in detail, I have enough time to transfer from illiquid assets. For longer term planning, I keep a spreadsheet around that plans out annual expenses. If I'm spending more than I earn, it shows up here. I estimate everything: expenses, savings, taxes, and income. I need this because I have a lot of expenses that are far less frequent than monthly or paycheck-ly. The beauty of it is that once I've got it in place, I can duplicate the sheet and consider tweaks for say taking a new job or moving, or even just changing an insurance plan (probably less relevant for those with access to NHS). Especially when moving to take a new job, it's not as straightforward as comparing salaries, and thus having a document for the status quo to start from lets you focus on the parts that changed." }, { "docid": "73427", "title": "", "text": "Funds earned and spent before opening a dedicated business account should be classified according to their origination. For example, if your business received income, where did that money go? If you took the money personally, it would be considered either a 'distribution' or a 'loan' to you. It is up to you which of the two options you choose. On the flip side, if your business had an expense that you paid personally, that would be considered either a 'contribution of capital' or a 'loan' from you. If you choose to record these transactions as loans, you can offset them together, so you don't need two separate accounts, loan to you and loan from you. When the bank account was opened, the initial deposit came from where? If it came from your personal funds, then it is either a 'contribution of capital' or a 'loan' from you. From the sound of your question, you deposited what remained after the preceding income/expenses. This would, in effect, return the 'loan' account back to zero, if choosing that route. The above would also be how to record any expenses you may pay personally for the business (if any) in the future. Because these transactions were not through a dedicated business bank account, you can't record them in Quickbooks as checks and deposits. Instead, you can use Journal Entries. For any income received, you would debit your capital/loan account and credit your income account. For any expenses, you would debit the appropriate expense account and credit your distribution/loan account. Also, if setting up a loan account, you should choose either Current Asset or Current Liability type. The capital contribution and distribution account should be Equity type. Hope this helps!" }, { "docid": "181549", "title": "", "text": "How about finding a friend with Paypal and sending them the money so they can pay your bill using a card? Withdrawals from Paypal are typically instant now." }, { "docid": "505134", "title": "", "text": "\"I am perfectly qualified to not use an accountant. I am a business professor, and my work crosses over into accounting quite a bit. I would certainly find a CPA that is reputable and hire them for advice before starting. I know a physicist who didn't do that and found they ended up with $78,000 in fines. There are a number of specific things an accountant might provide that Quickbooks will not. First and foremost, they are an outsider's set of eyes. If they are good, they will find a polite way to say \"\"you want to do what?!?!?!\"\" If they are good, they won't fall out of their chair, their jaw won't drop to the floor, and they won't giggle until they get home. A good accountant has seen around a hundred successful and unsuccessful businesses. They have seen everything you may have thought of. Intelligence is learning from your own mistakes, wisdom is learning from the mistakes of others. Accountants are the repositories of wisdom. An accountant can point out weaknesses in your plan and help you shore it up. They can provide information about the local market that you may not be aware of. They can assist you with understanding the long run consequences of the legal form that you choose. They can assist you in understanding the trade-offs of different funding models. They can also do tasks that you are not talented at and which will take a lot of time if you do it, and little time if they do it. There is a reason that accountants are required to have 160 semester hours to sit for the CPA. They also have to have a few thousand field hours before they can sit for it as well. There is one thing you may want to keep in mind though. An accountant will often do what you ask them to do, so think about what you want before you visit the accountant. Also, remember to ask the question \"\"is there a question I should have asked but didn't?\"\"\"" }, { "docid": "519963", "title": "", "text": "I don't think it has to be either-or. You can profitably invest inside the SIMPLE. (Though I wouldn't put in any more than the 1% it takes to get the match.) Let's look at some scenarios. These assume salary of $50k/year so the numbers are easy. You can fill in your own numbers to see the outcome, but the percentages will be the same. Let it sit in cash in the SIMPLE. You put in 1%, your employer matches with 1%. Your account balance is $1,000 (at the end of the year), plus a small amount of interest. Cost to you is $500 from your gross pay. 100% return on your contributions, yay! Likely 0-1% real returns going forward; you'll be lucky to keep up with inflation over the long term. Short term not so bad. Buy shares of index ETFs in the SIMPLE; let's assume the fee works out to 10%. You put in 1%, employer matches 1%. Your contributions are $500, fees are $100, your balance is $900 in ETFs. 80% instant return, and possible 6-7% real long term returns going forward. Buy funds in the SIMPLE; assume the load is 5%, management fee is 1% and you can find something that behaves like an index fund (so it is theoretically comparable to above). 1% from you, 1% from employer. Your contributions are $500, load fees are $50, your balance is $950. 90% instant return, and possible 5-6% real long term returns going forward (assuming the 6-7% real returns of equities are reduced by the 1% management fee). (You didn't list out the fees, and they're probably different for the different fund choices, so fill in your own details and do the math.) Invest outside the SIMPLE in the same ETFs or equivalent no load index funds; let's assume you can do this with no fees. You put in the same 1% of your gross (ignoring any difference that might come from paying FICA) into a self directed traditional IRA. At the end of the year the balance is $500. So deciding whether or not to take the match is a no brainer: take it. Deciding whether you should hold cash, ETFs, or (one of two types of) funds in your SIMPLE is a little trickier." }, { "docid": "107092", "title": "", "text": "Your account entries are generally correct, but do note that the last transaction is a mixture of the balance sheet and income statement. If Quickbooks doesn't do this automatically then the expense must be manually removed from the balance sheet. The expense should be recognized on the balance sheet and income statement when it accrues, and it accrues when the prepaid rent is extinguished when consumed by the landlord, so that is when the second entry in your question should be booked. The cash flow statement will reflect all of these cash transactions immediately." }, { "docid": "323215", "title": "", "text": "We are one of the guaranteed web based business online store in the United States, where you can purchase any wellbeing items skin inside moderate costs. Envyzen offers you universes best clench hand class abstains from food supplement and Diet pills on the web, which gives you muscle body and decreased, increment vitality. In the event that an all-characteristic thing, for example, Envy Instant Face Lift is truly normal, it will likewise be more conservative. This is on account of those 100 % normal parts are promptly accessible, and there is no assembling procedure locked in." }, { "docid": "288995", "title": "", "text": "\"&gt; For instance, one of his sage-like pieces of advice is to put a clause in your contract saying \"\"subject to the approval of all business partners\"\". Then if you feel like backing out, you claim that your cat is your business partner and he didn't like the deal. I am not making this up. I'm no contract lawyer, but shouldn't the signature on the contract mean a binding approval of its terms for the signer and everyone they implicitly represent? I mean, otherwise, what power does the signature hold for the other party, if the signee can just claim later that their unspecified business partner doesn't like your face?\"" }, { "docid": "318612", "title": "", "text": "I work for Businessfriend and would love to answer these questions. Now mind you, we are in beta, so we don't expect the site to work perfectly yet, but I do hope you guys explore it. We see our selves very different from Linkedin, matter of fact we don't compare ourselves to Linkedin at all. Our site does not stop at networking, we provide common business utilities behind a social ecosystem to ideally improve productivity at work. Our tools consist of a calendar, to do list, chat (instant message), and plenty more. I went ahead and set up a demo account for you guys to use if you are interested, because this is set up with my own email I am going to only leave it live for a week. The login is Email: [email protected] Password: Password123. I have added 3 Businessfriend team members to the contacts so you can talk to us directly and let us know what you think. You will be connected with Philip Diehl (me), Nick Alesi, and Rob Rosales. Enjoy! -Phil" }, { "docid": "115584", "title": "", "text": "\"Putting them on line 10 is best suited for your situation. According to Quickbooks: Commissions and Fees (Line 10) Commissions/fees paid to nonemployees to generate revenue (e.g. agent fees). It seems like this website you are using falls under the term \"\"nonemployees\"\".\"" }, { "docid": "451170", "title": "", "text": "Your long-term saving targets will include retirement, kids' college, house, etc. Medium-term might be your college, or a car. Short-term might be a vacation somewhere or a new laptop. In all cases saving, then spending money you do have is better than spending money you don't have. I think that's the first takeaway of this truism. However, I also believe 10% is said as a retirement target. Retirement is very important and this advice is stressed by many financial planners because it's very easy to underestimate how expensive it is. By the same token, it's recommended that you spend 2 months' salary on an engagement ring, and that particular truism can be traced back to a DeBeers ad. I personally don't know whether 10% as a retirement target is sage - it sounds right but I haven't followed it for a variety of reasons. Please corroborate against multiple sources and apply to your own financial person." }, { "docid": "231947", "title": "", "text": "\"Don't worry about it. The State doesn't care about rounding error. All you need to do is say \"\"We charge our prices with tax included\"\" - you know, like carnivals and movie theaters. Then follow the procedures your state specifies for computing reportable tax. Quite likely it wants your pre-tax sales total for the reporting period. To get that, total up your gross sales that you collected, and divide by (1 + tax rate). Just like DJClayworth says, except do it on total sales instead of per-item. If you need to do the split per-transaction for Quickbooks or something, that's annoying. What Quickbooks says will be pennies off the method I describe above. The state don't care as long as it's just pennies, or in their favor.\"" }, { "docid": "445306", "title": "", "text": "Conceptually, the entries are: Yes. And since you're the sole owner, your basis will equal to the equity balance on the balance sheet. Keep in mind the book and tax basis will probably be different, so you may want to keep a separate calculation to track the tax basis. There is no journal additional journal entry for this. If you're using bookkeeping software, be sure to research its book-closing/closing entries feature, as it is handled differently depending on the software. For example Quickbooks doesn't explicitly close its books, but re-computes the balance sheet dynamically depending on the selected date range." }, { "docid": "70109", "title": "", "text": "\"Without divulging too many specifics. Net income is 73k. Total income is 136k. Filed as an S-Corp. Using Quickbooks to classify expenses etc. I know its not much information but I don't know what to look out for, like \"\"whoa, net income is 73k, you gotta spend that!\"\" I have a CPA but isn't offering much in the terms of \"\"help\"\" and \"\"explanation\"\". Thanks for your time!\"" }, { "docid": "188028", "title": "", "text": "\"I'm not sure if this answer is going to win me many friends on reddit, but here goes... There's no good reason why they couldn't have just told him the current balance shown on their records, BUT... **There are some good reasons why they can't quote a definitive \"\"payoff\"\" balance to instantly settle the account:** It's very possible to charge something today, and not have it show up on Chase's records until tomorrow, or Monday, or later. There are still places that process paper credit-card transactions, or that deal with 3rd-party payment processors who reconcile transactions M-F, 9-5ish, and so on. - Most transactions these days are authorized the instant you swipe the card, and the merchant won't process until they get authorization back from the CC company. But sometimes those authorizations come from third-party processors who don't bill Chase until later. Some of them might not process a Friday afternoon transaction until close-of-business Monday. - Also, there are things like taxicab fares that might be collected when you exit the cab, but the record exists only in the taxi's onboard machine until they plug it into something else at the end of the shift. - There are still some situations (outdoor flea-markets, auctions, etc) where the merchant takes a paper imprint, and doesn't actually process the payment until they physically mail it in or whatever. - Some small businesses have information-security routines in place where only one person is allowed to process credit-card payments, but where multiple customer service reps are allowed to accept the CC info, write it down on one piece of paper, then either physically hand the paper to the person with processing rights, or deposit the paper in a locked office or mail-slot for later processing. This is obviously not an instant-update system for Chase. (Believe it or not, this system is actually considered to be *more* secure than retaining computerized records unless the business has very rigorous end-to-end info security). So... there are a bunch of legit reasons why a CC company can't necessarily tell you this instant that you only need to pay $x and no more to close the account (although there is no good reason why they shouldn't be able to quote your current balance). What happens when you \"\"close an account\"\" is basically that they stop accepting new charges that were *made* after your notification, but they will still accept and bill you for legit charges that you incurred before you gave them notice. So basically, they \"\"turn off\"\" the credit-card, but they can't guarantee how much you owe until the next billing cycle after this one closes: - You notify them to \"\"close\"\" the account. They stop authorizing new charges. - Their merchant agreements basically give the merchant a certain window to process charges. The CC company process legit charges that were made prior to \"\"closing\"\" the account. - The CC company sends you the final statement *after* that window for any charges has expired, - When that final statement is paid (or if it is zero), *THAT* is when the account is settled and reported to Equifax etc as \"\"paid\"\". So it's hard to tell from your post who was being overly semantic/unreasonable. If the CC company refused to tell the current balance, they were just being dickheads. But if they refused to promise that the current balance shown is enough to instantly settle the account forever, they had legit reasons. Hope that helps.\"" }, { "docid": "230961", "title": "", "text": "Linking the card is primarily to give you (and Paypal) a fall-back option for funding your spending if your bank account doesn't have sufficient funds to process the charge. If the bank account has sufficient funds, it will work fine in many cases without a credit card. If you have both linked (bank and a credit card), Paypal will transfer funds immediately, as Paypal knows it has an option for getting the funds if the bank has insufficient funds. However, if you have no credit card linked or remove your only card: If you remove your only card and have a confirmed bank account, you’ll no longer be able to make instant bank payments. Instead they’ll be sent as eChecks, which take 3 to 4 working days to process. This may not matter in many cases, but it may delay things some. There may also be services who require immediate payment (and won't support PayPal if it's not immediate). There may also be some functional limitations. The one I see is primarily that some services that are geo-location-specific, Spotify for one example, use the credit card to verify that you are in a particular location (in Spotify's case, for licensing purposes). They don't seem to accept Paypal unless it's linked to a credit or debit card (even if it's verified via a bank account). I'm not sure if this is common with other services, but it's something to consider." }, { "docid": "509365", "title": "", "text": "I started my business about 4 years ago. I heard bad things about Quickbooks for Mac so I steered clear. I used an open source program called GnuCash and it does a good job. It's free and fairly easy to set up." }, { "docid": "540285", "title": "", "text": "My bank (USAA) moves money to and from a USAA brokerage account instantly. They also have instant transfers from their money market funds to checking, savings, and brokerage. It takes the 3 days to go to another institution, though." }, { "docid": "520922", "title": "", "text": "You actually don't need an accountant. They'll be expensive and at this early a stage unnecessary - what you need is a good bookkeeper who can keep track of what comes in and what goes out. You'll need that to know if you're making money or not and to show the government at the end of the year. Get a copy of QuickBooks and pick up Bookkeeping for Dummies to at least get a sense for what's going on. Have you registered as a sole proprietorship? Make sure you have a vendor's permit so you can legally sell your services in Ontario. You may need to collect HST, in which case you'll need to register for an HST # and submit it on a quarterly basis. Whatever you do, don't fuck with the government - they can freeze your bank accounts to get money they're owed. You need to keep money on hand to pay for any taxes you might owe on the business, ESPECIALLY if it's a sole proprietorship where you'll be tempted to treat profit as income. You don't want to end up with nothing in the bank at the end of the year and $40k owing to the CRA. Get a separate bank account - don't mix personal and business, it's messy. Expense everything you reasonably can." } ]

[ { "docid": "391841", "title": "", "text": "\"Note: Specific to UK. I can't recommend anything higher than Crunch - they act as your accountant and have their own cloud accounting software, so it's more expensive than just using cloud accounting software, but if you use an accountant to do your year-end anyway, then they cost about the same as using cloud accounting software plus using an accountant to do your year-end. The thing I like (as a software development contractor) is that I don't have to know or worry about different ledger accounts, or journal entries, or any of the other weird accounting things, etc. Most cloud accounting software claim to simplify accounting \"\"so that you can concentrate on running your business\"\" whereas the reality is that you still have to spend ages learning how to be an accountant just to fill it in correctly. With Crunch that's actually true, it does actually make it simple. I've used Crunch, Sage, and Xero, so my sample-set isn't very big - just thought I'd share my experiences. If you value your time and get annoyed by having to create multiple internal transfers between different ledgers just to do something simple, it's for you. This probably sounds like a sales pitch, but I have nothing to do with them and nothing to gain by recommending them. The only reason I'm so passionate is I started a new business to do an online shop and tried to use Crunch, but they don't do retail businesses. Only contractors/freelancers or simple service-based businesses (their software is geared up specifically for that which I guess is why it's more simple than the others). Anyway, so now I'm annoyed at having to use the more complicated ones.\"" } ]

[ { "docid": "584187", "title": "", "text": "The amount you are earning in the savings account is insignificant, since you would only have the money in the account for 1 month after purchasing the car. The instant 1.5% cashback (or travel mile reward), on the other hand, can be significant. However, it is not normal for a car dealership to allow you to put $16k on a credit card. The reason is that the fees that the dealer has to pay to process your credit card would be too burdensome. Car dealers have a much smaller profit margin on their sales than a typical retail store, so if the dealer has to pay 3 or 4% of the sales price in credit card fees, it just eats up too much of their profit. If the dealer does allow you to put the entire purchase price on a credit card, be aware that they have already factored in their processing fees into the price. You might be able to get a better than 1.5% discount by offering to pay with cash instead." }, { "docid": "70109", "title": "", "text": "\"Without divulging too many specifics. Net income is 73k. Total income is 136k. Filed as an S-Corp. Using Quickbooks to classify expenses etc. I know its not much information but I don't know what to look out for, like \"\"whoa, net income is 73k, you gotta spend that!\"\" I have a CPA but isn't offering much in the terms of \"\"help\"\" and \"\"explanation\"\". Thanks for your time!\"" }, { "docid": "479659", "title": "", "text": "\"To begin with, bear in mind that over the time horizon you are talking about, the practical impact of inflation will be quite limited. Inflation for 2017 is forecast at 2.7%, and since you are talking about a bit less than all of 2017, and on average you'll be withdrawing your money halfway through, the overall impact will be <1.3% of your savings. You should consider whether the effort and risk involved in an alternative is worth a few hundred pounds. If you still want to beat inflation, the best suggestion I have is to look at peer-to-peer lending. That comes with some risk, but I think over the course of 1 year, it's quite limited. For example, Zopa is currently offering 3.1% on their \"\"Access\"\" product, and RateSetter are offering 2.9% on the \"\"Everyday\"\" product. Both of these are advertised as instant access, albeit with some caveats. These aren't FSCS-guaranteed bank deposits, and they do come with some risk. Firstly, although both RateSetter and Zopa have a significant level of provision against bad debt, it's always possible that this won't be enough and you'll lose some of your money. I think this is quite unlikely over a one-year time horizon, as there's no sign of trouble yet. Secondly, there's \"\"liquidity\"\" risk. Although the products are advertised as instant access, they are actually backed by longer-duration loans made to people who want to borrow money. For you to be able to cash out, someone else has to be there ready to take your place. Again, this is very likely to be possible in practice, but there's no absolute guarantee.\"" }, { "docid": "335375", "title": "", "text": "\"Once again I offer some sage advice - \"\"Don't let the tax tail wag the investing dog.\"\" Michael offers an excellent method to decide what to do. Note, he doesn't base the decision on the tax implication. If you are truly indifferent to holding the stock, taxwise, you might consider selling just the profitable shares if that's enough cash. Then sell shares at a loss each year if you have no other gains. That will let you pay the long term gain rate on the shares sold this year, but offset regular income in years to come. But. I'm hard pressed to believe you are indifferent, and I'd use Michel's approach to decide. Updated - The New Law is simply a rule requiring brokers to track basis. Your situation doesn't change at all. When you sell the shares, you need to identify which shares you want to sell. For older shares, the tracking is your responsibility, that's all.\"" }, { "docid": "15631", "title": "", "text": "I think the key thing is flexibility - the money is not tied in with the offset mortgage. If you find a better investment, you can always take some of it out and put it towards that instead. Once it matures, if there is nothing good to reinvest in, then it can go back into the offset mortgage. Once you have had money in the offset account, even if you take it out, you have already (irreversibly) saved money on your mortgage. Right now you would be pressed to find an instant access ISA with a rate higher than 1.5%, so if you need immediate access, then the offset account seems good. On the other hand, for retirement, you might be saving longer term, and then you can get an ISA rate of 3%, currently, which may be better for a part of the money (or perhaps the upcoming Lifetime ISA with 25% yearly bonus may make sense for part of the money), if you do not need easy access to all of it. As Dilip says, this assumes you want safe investments." }, { "docid": "460175", "title": "", "text": "Custom fields are limited to non-calculated values. Read more here: http://qbblog.ccrsoftware.info/2008/07/custom-fields-in-quickbooks/ To do this you will need an add-on. I would reccomend CCRQInvoice, but only because its the only one I've tried and it worked. More here (this is an order form example, but it works): http://ccrqblog.ccrsoftware.info/adding-calculated-fields-to-order-forms/ The product info is here: http://www.ccrsoftware.com/CCRQInvoice/InvoiceQ.htm" }, { "docid": "188028", "title": "", "text": "\"I'm not sure if this answer is going to win me many friends on reddit, but here goes... There's no good reason why they couldn't have just told him the current balance shown on their records, BUT... **There are some good reasons why they can't quote a definitive \"\"payoff\"\" balance to instantly settle the account:** It's very possible to charge something today, and not have it show up on Chase's records until tomorrow, or Monday, or later. There are still places that process paper credit-card transactions, or that deal with 3rd-party payment processors who reconcile transactions M-F, 9-5ish, and so on. - Most transactions these days are authorized the instant you swipe the card, and the merchant won't process until they get authorization back from the CC company. But sometimes those authorizations come from third-party processors who don't bill Chase until later. Some of them might not process a Friday afternoon transaction until close-of-business Monday. - Also, there are things like taxicab fares that might be collected when you exit the cab, but the record exists only in the taxi's onboard machine until they plug it into something else at the end of the shift. - There are still some situations (outdoor flea-markets, auctions, etc) where the merchant takes a paper imprint, and doesn't actually process the payment until they physically mail it in or whatever. - Some small businesses have information-security routines in place where only one person is allowed to process credit-card payments, but where multiple customer service reps are allowed to accept the CC info, write it down on one piece of paper, then either physically hand the paper to the person with processing rights, or deposit the paper in a locked office or mail-slot for later processing. This is obviously not an instant-update system for Chase. (Believe it or not, this system is actually considered to be *more* secure than retaining computerized records unless the business has very rigorous end-to-end info security). So... there are a bunch of legit reasons why a CC company can't necessarily tell you this instant that you only need to pay $x and no more to close the account (although there is no good reason why they shouldn't be able to quote your current balance). What happens when you \"\"close an account\"\" is basically that they stop accepting new charges that were *made* after your notification, but they will still accept and bill you for legit charges that you incurred before you gave them notice. So basically, they \"\"turn off\"\" the credit-card, but they can't guarantee how much you owe until the next billing cycle after this one closes: - You notify them to \"\"close\"\" the account. They stop authorizing new charges. - Their merchant agreements basically give the merchant a certain window to process charges. The CC company process legit charges that were made prior to \"\"closing\"\" the account. - The CC company sends you the final statement *after* that window for any charges has expired, - When that final statement is paid (or if it is zero), *THAT* is when the account is settled and reported to Equifax etc as \"\"paid\"\". So it's hard to tell from your post who was being overly semantic/unreasonable. If the CC company refused to tell the current balance, they were just being dickheads. But if they refused to promise that the current balance shown is enough to instantly settle the account forever, they had legit reasons. Hope that helps.\"" }, { "docid": "170932", "title": "", "text": "“CEOs who recognize their lack of capital-allocation skills (which not all do) will often try to compensate by turning to their staffs, management consultants, or investment bankers. Charlie and I have frequently observed the consequences of such ‘help.’ On balance, we feel it is more likely to accentuate the capital-allocation problem than to solve it.” -- [Warren Buffet](http://www.fool.com.au/2013/08/28/warren-buffett-sage-for-the-ages/)" }, { "docid": "476562", "title": "", "text": "I just wanted to let people know of a strange little way bankruptcy works in society when dealing with individuals and when dealing with businesses. If I as a person declare bankruptcy, my credit score goes downhill. I find loans have higher interest rates, some people won't lend the amounts I want, and I have to pay more up front. If as a business I declare bankruptcy, my individual credit score (not business) does not suffer AT ALL. My business likely will have a harder time getting loans, that is unless someone buys me out or I collapse the business and start a new business, maybe even the exact same business with the same clients. I personally, am not held accountable for anything (unless I was a sole proprietor of course and didn't incorporate). That to me, is the major problem. Corporations mean never having to say you're sorry. No matter how high up you are, you are never individually accountable for your actions. In fact, I highly suggest anyone considering bankruptcy simply form a corporation, dump their debt assets into it, and then have the corporation declare bankruptcy. Viola, instant clean credit score and all your debts are paid. Just watch out for [vicarious liability :p](http://en.wikipedia.org/wiki/Vicarious_liability)" }, { "docid": "121230", "title": "", "text": "\"Here are some things you want to look at for evaluating a bank or credit union for your regular spending accounts: Convenience. Do they have a branch in a convenient location for you? Do they have no-fee ATMs near you? Website. If you are like me, you will spend more time on the bank's website than you do inside a branch. Some bank's websites are great, some are terrible. Unfortunately, this is generally difficult to evaluate until you actually get an account. You want a website that is easy to use. It should allow you to easily move money between your accounts, get instant lists of transactions, show you your monthly statements, and have a billpay feature that works well. If you use budgeting software that interfaces online with your bank, you want to ensure that it works well with your bank. Fee structure. Some banks will nickel-and-dime you to death. Watch out for minimum balance fees and ATM fees. Banks and credit unions usually have a fee schedule page on their website that lists every fee they charge, making it easy to compare different banks. I would not be very concerned about interest rates for savings. Currently, all savings accounts have a universally terrible interest rate. Therefore, I wouldn't base my bank choice on the interest rate. Sure, one might offer double the interest rate of another, but double \"\"next-to-nothing\"\" is still \"\"next-to-nothing.\"\" When you accumulate enough savings that you want to start maximizing your earnings, you can look for a better rate at another bank to move your savings to, and you can keep your checking account at the bank with the best convenience and fee structure. In my limited experience, I have had better luck with credit unions than with banks when it comes to fees.\"" }, { "docid": "415514", "title": "", "text": "\"You need one \"\"company file\"\" for each company that you want to track through QuickBooks. Looks like, in your case, that is at least the PM and the PH (as you labeled them in your question). The companies that just hold property and pay utilities might be simple enough that you don't need the full power of QB, in which case you might just track their finances on a spread sheet. Subsidiary companies will probably appear as \"\"assets\"\" of some sort on the books of the parent company. This set-up probably does limit liability at some level, but it's going to create a lot of overhead for your that incurs some expense either in your time or in actual fees paid. You should really consider whether the limitations on liability balance against those costs. (Think ahead to what you're going to do when you have to file taxes on this network of companies, whether you need separate insurance policies for each instead of getting one policy covering multiple properties, etc.)\"" }, { "docid": "40628", "title": "", "text": "\"There's no law in California that says you have to have a cash register. Logging cash sales manually, as you are doing, is fine. A cash register would help you track your cash sales as you describe. Some POS software will also allow you to log cash transactions, but it sounds like you just use a credit card processing web site or application, not a full-fledged POS system. In any case, for a small business, one option might be to get a cash register to log your cash sales, and continue to process credit cards the way you are (or continue as you are doing). Come tax season, use the output from both systems to calculate your income. You might want to consider an accounting software like Quickbooks so you can reconcile your income and expenses and statements from different sources. Also, as with any small business, it's worth your while to consult a tax accountant to make sure you're doing everything \"\"by the books\"\". Once you're set up properly, keeping the books in order becomes routine and easy.\"" }, { "docid": "53544", "title": "", "text": "A matching pension scheme is like free money. No wait, it actually IS free money. You are literally earning 100% interest rate on that money the instant you pay it in to the account. That money would have to sit in your credit card account for at least five years to earn that kind of return; five years in which the pension money would have earned an additional return over and above the 100%. Mathematically there is no contest that contributing to a matching pension scheme is one of the best investment there is. You should always do it. Well, almost always. When should you not do it?" }, { "docid": "80009", "title": "", "text": "Firstly well done on building a really sold base of savings. An emergency fund needs to have two key characteristics: Be enough to get you through a typical emergency event (often seen as approx. ~6 months’ salary in your style of situation assuming you have no dependents etc) Be liquid and available to you instantly if an emergency arises Once you have decided how much you will need for 1), you then generally find the best interest available on an instant access savings account and leave it there. It's important to note that because you need it very liquid and very secure you will basically never make (nor should you expect to make) any sizeable rate of interest on your emergency fund. Once this is done, whatever left should be invested in an asset/mix of assets that best fit your risk profile - of which long term bonds are a completely legitimate option, but it's hard to say without knowing more about your long term aims/liabilities/job market etc." }, { "docid": "274369", "title": "", "text": "A checking account is instant access. It can be tapped via check or debit card. A savings account is supposed to be used to accumulate cash for a goal that is is longer term or for an emergency. Many people need to separate these funds into different accounts to be able to know if they are overspending or falling short on their savings. In the United States the Federal Reserve also looks at these accounts differently. Money in a checking account generally can't be used to fund loans, money in a savings account can be used as a source of loans by the bank. An even greater percentage of funds in longer term accounts can be used to fund loans. This includes Certificates of Deposit, and retirement accounts." }, { "docid": "323215", "title": "", "text": "We are one of the guaranteed web based business online store in the United States, where you can purchase any wellbeing items skin inside moderate costs. Envyzen offers you universes best clench hand class abstains from food supplement and Diet pills on the web, which gives you muscle body and decreased, increment vitality. In the event that an all-characteristic thing, for example, Envy Instant Face Lift is truly normal, it will likewise be more conservative. This is on account of those 100 % normal parts are promptly accessible, and there is no assembling procedure locked in." }, { "docid": "71569", "title": "", "text": "You can move money in and out of the business at will, just keep track of every transaction. Ideally you'd use an accounting software like QuickBooks or similar. Create a Capital Contributions account and every time you put money into the business checking account record it as a Capital Contribution. Likewise, if you take money out of the business, it comes from your capital accounts. (You can create a separate Capital Distributions account in your accounting software, or just use a single account for contributions and distributions). Money coming in and out of those capital accounts is not taxable because you will pay taxes based on net earnings regardless of whether or not you have distributed any profits. So there's no need to make a loan to the company, which would have tax consequences. To reimburse yourself for purchases already made, submit an expense report to the company. If the company is unfunded right now, you can make a capital contribution to cover current expenses, submit the expense report, and wait until you have some profits before paying out the expense report or making any distributions. Welcome to entrepreneurship." }, { "docid": "230961", "title": "", "text": "Linking the card is primarily to give you (and Paypal) a fall-back option for funding your spending if your bank account doesn't have sufficient funds to process the charge. If the bank account has sufficient funds, it will work fine in many cases without a credit card. If you have both linked (bank and a credit card), Paypal will transfer funds immediately, as Paypal knows it has an option for getting the funds if the bank has insufficient funds. However, if you have no credit card linked or remove your only card: If you remove your only card and have a confirmed bank account, you’ll no longer be able to make instant bank payments. Instead they’ll be sent as eChecks, which take 3 to 4 working days to process. This may not matter in many cases, but it may delay things some. There may also be services who require immediate payment (and won't support PayPal if it's not immediate). There may also be some functional limitations. The one I see is primarily that some services that are geo-location-specific, Spotify for one example, use the credit card to verify that you are in a particular location (in Spotify's case, for licensing purposes). They don't seem to accept Paypal unless it's linked to a credit or debit card (even if it's verified via a bank account). I'm not sure if this is common with other services, but it's something to consider." }, { "docid": "509365", "title": "", "text": "I started my business about 4 years ago. I heard bad things about Quickbooks for Mac so I steered clear. I used an open source program called GnuCash and it does a good job. It's free and fairly easy to set up." } ]

[ { "docid": "100655", "title": "", "text": "\"If your meaning of \"\"asset protection\"\" is buying gold and canned food in the name of a Nevada LLC because some radio guy said so, bad idea. For a person, if you have assets, buy appropriate liability limits with your homeowner/renter insurance policy or purchase an \"\"umbrella\"\" liability policy. This type of insurance is cheap. If you don't have assets, it may not be worth the cost of insuring yourself beyond the default limits on your renter's or homeowner's policy. If you have a business, you need to talk to your insurance agent about what coverage is appropriate for the business as a whole vs. you personally. You also need to talk to your attorney about how to conduct yourself so that your business interests are separated from your personal interests.\"" } ]

[ { "docid": "128077", "title": "", "text": "\"The question you should be asking yourself is this: \"\"Why am I putting money into a 401(k)?\"\" For many people, the answer is to grow a (large) nest egg and save for future retirement expenses. Investors are balancing risk and potential reward, so the asset categories you're putting your 401(k) contribution towards will be a reflection on how much risk you're willing to take. Per a US News & World Report article: Ultimately, investors would do well to remember one of the key tenants of investing: diversify. The narrower you are with your investments, the greater your risk, says Vanguard's Bruno: \"\"[Diversification] doesn't ensure against a loss, but it does help lessen a significant loss.\"\" Generally, investing in your employer's stock in your 401(k) is considered very risk. In fact, one Forbes columnist recommends not putting any money into company stock. FINRA notes: Simply stated, if you put too many eggs in one basket, you can expose yourself to significant risk. In financial terms, you are under-diversified: you have too much of your holdings tied to a single investment—your company's stock. Investing heavily in company stock may seem like a good thing when your company and its stock are doing well. But many companies experience fluctuations in both operational performance and stock price. Not only do you expose yourself to the risk that the stock market as a whole could flounder, but you take on a lot of company risk, the risk that an individual firm—your company—will falter or fail. In simpler terms, if you invest a large portion of your 401(k) funds into company stock, if your company runs into trouble, you could lose both your job AND your retirement investments. For the other investment assets/vehicles, you should review a few things: Personally, I prefer to keep my portfolio simple and just pick just a few options based on my own risk tolerance. From your fund examples, without knowing specifics about your financial situation and risk tolerance, I would have created a portfolio that looks like this when I was in my 20's: I avoided the bond and income/money market funds because the growth potential is too low for my investing horizon. Like some of the other answers have noted, the Target Date funds invest in other funds and add some additional fee overhead, which I'm trying to avoid by investing primarily in index funds. Again, your risk tolerance and personal preference might result in a completely different portfolio mix.\"" }, { "docid": "384536", "title": "", "text": "Since you seem determined to consider this, I'd like to break down for you why I believe it is an incredibly risky proposition: 1) In general, picking individual stocks is risky. Individual stocks are by their nature not diversified assets, and a single company-wide calamity (a la Volkswagen emissions, etc.) can create huge distress to your investments. The way to mitigate this risk is of course to diversify (invest in other types of assets, such as other stocks, index funds, bonds, etc.). However, you must accept that this first step does have risks. 2) Picking stocks on the basis of financial information (called 'fundamental analysis') requires a very large amount of research and time dedication. It is one of the two main schools of thought in equity investing (as opposed to 'technical analysis', which pulls information directly from stock markets, such as price volatility). This is something that professional investors do for a living - and that means that they have an edge you do not have, unless you dedicate similar resources to this task. That information imbalance between you and professional traders creates additional risk where you make determinations 'against the grain'. 3) Any specific piece of public information (and this is public information, regardless of how esoteric it is) may be considered to be already 'factored into' public stock prices. I am a believer in market efficiency first and foremost. That means I believe that anything publically known related to a corporation ['OPEC just lowered their oil production! Exxon will be able to increase their prices!'] has already been considered by the professional traders currently buying and selling in the market. For your 'new' information to be valuable, it would need to have the ability to forecast earnings in a way not already considered by others. 4) I doubt you will be able to find the true nature of the commercial impact of a particular event, simply by knowing ship locations. So what if you know Alcoa is shipping Aluminium to Cuba - is this one of 5 shipments already known to the public? Is this replacement supplies that are covering a loss due to damaged goods previously sent? Is the boat only 1/3 full? Where this information gets valuable, is when it gets to the level of corporate espionage. Yes, if you had ship manifests showing tons of aluminum being sold, and if this was a massive 'secret' shipment about to be announced at the next shareholders' meeting, you could (illegally) profit from that information. 5) The more massive the company, the less important any single transaction is. That means the super freighters you may see transporting raw commodities could have dozens of such ships out at any given time, not to mention news of new mine openings and closures, price changes, volume reports, etc. etc. So the most valuable information would be smaller companies, where a single shipment might cover a month of revenue - but such a small company is (a) less likely to be public [meaning you couldn't buy shares in the company and profit off of the information]; and (b) less likely to be found by you in the giant sea of ship information. In summary, while you may have found some information that provides insight into a company's operations, you have not shown that this information is significant and also unknown to the market. Not to mention the risks associated with picking individual stocks in the first place. In this case, it is my opinion that you are taking on additional risk not adequately compensated by additional reward." }, { "docid": "12623", "title": "", "text": "I would say your decision making is reasonable. You are in the middle of Brexit and nobody knows what that means. Civil society in the United States is very strained at the moment. The one seeming source of stability in Europe, Germany, may end up with a very weakened government. The only country that is probably stable is China and it has weak protections for foreign investors. Law precedes economics, even though economics often ends up dictating the law in the long run. The only thing that may come to mind is doing two things differently. The first is mentally dropping the long-term versus short-term dichotomy and instead think in terms of the types of risks an investment is exposed to, such as currency risk, political risk, liquidity risk and so forth. Maturity risk is just one type of risk. The second is to consider taking some types of risks that are hedged either by put contracts to limit the downside loss, or consider buying longer-dated call contracts using a small percentage of your money. If the underlying price falls, then the call contracts will be a total loss, but if the price increases then you will receive most of the increase (minus the premium). If you are uncomfortable purchasing individual assets directly, then I would say you are probably doing everything that you reasonably can do." }, { "docid": "104741", "title": "", "text": "\"Like Jeremy T said above, silver is a value store and is to be used as a hedge against sovereign currency revaluations. Since every single currency in the world right now is a free-floating fiat currency, you need silver (or some other firm, easily store-able, protect-able, transportable asset class; e.g. gold, platinum, ... whatever...) in order to protect yourself against government currency devaluations, since the metal will hold its value regardless of the valuation of the currency which you are denominating it in (Euro, in your case). Since the ECB has been hesitant to \"\"print\"\" large amounts of currency (which causes other problems unrelated to precious metals), the necessity of hedging against a plummeting currency exchange rate is less important and should accordingly take a lower percentage in your diversification strategy. However, if you were in.. say... Argentina, for example, you would want to have a much larger percentage of your assets in precious metals. The EU has a lot of issues, and depreciation of hard assets courtesy of a lack of fluid currency/capital (and overspending on a lot of EU governments' parts in the past), in my opinion, lessens the preservative value of holding precious metals. You want to diversify more heavily into precious metals just prior to government sovereign currency devaluations, whether by \"\"printing\"\" (by the ECB in your case) or by hot capital flows into/out of your country. Since Eurozone is not an emerging market, and the current trend seems to be capital flowing back into the developed economies, I think that diversifying away from silver (at least in overall % of your portfolio) is the order of the day. That said, do I have silver/gold in my retirement portfolio? Absolutely. Is it a huge percentage of my portfolio? Not right now. However, if the U.S. government fails to resolve the next budget crisis and forces the Federal Reserve to \"\"print\"\" money to creatively fund their expenses, then I will be trading out of soft assets classes and into precious metals in order to preserve the \"\"real value\"\" of my portfolio in the face of a depreciating USD. As for what to diversify into? Like the folks above say: ETFs(NOT precious metal ETFs and read all of the fine print, since a number of ETFs cheat), Indexes, Dividend-paying stocks (a favorite of mine, assuming they maintain the dividend), or bonds (after they raise the interest rates). Once you have your diversification percentages decided, then you just adjust that based on macro-economic trends, in order to avoid pitfalls. If you want to know more, look through: http://www.mauldineconomics.com/ < Austrian-type economist/investor http://pragcap.com/ < Neo-Keynsian economist/investor with huge focus on fiat currency effects\"" }, { "docid": "199237", "title": "", "text": "\"This is basically what financial advisers have been saying for years...that you should invest in higher risk securities when you are young and lower risk securities when you get older. However, despite the fact that this is taken as truth by so many financial professionals, financial economists have been unable to formulate a coherent theory that supports it. By changing the preferences of their theoretical investors, they can get solutions like putting all your investments in a super safe asset until you get to a minimum survival level for retirement and then investing aggressively and many other solutions. But for none of the typically assumed preferences does investing aggressively when young and becoming more conservative as you near retirement seem to be the solution. I'm not saying there can be no such preferences, but the difficulty in finding them makes me think maybe this idea is not actually correct. Couple of problems with your intuition that you should think about: It's not clear that things \"\"average out\"\" over time. If you lose a bunch of money in some asset, there's no reason to think that by holding that asset for a while you will make back what you lost--prices are not cyclical. Moreover, doesn't your intuition implicitly suggest that you should transition out of risky securities as you get older...perhaps after having lost money? You can invest in safe assets (or even better, the tangency portfolio from your graph) and then lever up if you do want higher risk/return. You don't need to change your allocation to risky assets (and it is suboptimal to do so--you want to move along the CAL, not the curve). The riskiness of your portfolio should generally coincide (negatively) with your risk-aversion. When you are older and more certain about your life expectancy and your assets, are you exposed to more or less risks? In many cases, less risks. This means you would choose a more risky portfolio (because you are more sure you will have enough to live on until death even if your portfolio takes a dive). Your actual portfolio consists both of your investments and your human capital (the present value of your time and skills). When you are young, the value of this capital changes significantly with market performance so you already have background risk. Buying risky securities adds to that risk. When you are old, your human capital is worth little, so your overall portfolio becomes less risky. You might want to compensate by increasing the risk of your investments. EDIT: Note that this point may depend on how risky your human capital is (how likely it is that your wage or job prospects will change with the economy). Overall the answer to your question is not definitively known, but there is theoretical evidence that investing in risky securities when young isn't optimal. Having said that, most people do seem to invest in riskier securities when young and safer when they are older. I suspect this is because with life experience people become less optimistic as they get older, not because it is optimal to do so. But I can't be sure.\"" }, { "docid": "576361", "title": "", "text": "I'm aware that banks have foreclosed properties as assets on their balance sheets -- those that they haven't been able to sell yet. But, housing prices nationally are down 50% from their peak. How can you seriously make price-fixing allegations against the banks when prices are about half of what they were at the peak of the bubble, when - I think we can all agree on this point - real estate was pretty decentralized?" }, { "docid": "426268", "title": "", "text": "First consider the basic case of what you are asking: you expect to have a future obligation to pay interest, and you are concerned that the rate when you pay it, will be higher than the rate today. In the simplest case, you could theoretically hedge that risk by buying an asset which pays the market interest rate. As the interest rate rises, increasing your costs, your return on this asset would also increase. This would minimize your exposure to interest rate fluctuations. There are of course two problems with this simplified solution: (1) The reason you expect to pay interest, is because you need/want to take on debt to purchase your house. To fully offset this risk by putting all your money in an asset which bears the market interest rate, would effectively be the same as just buying your house in cash. (2) The timing of the future outflow is a bit unique: you will be locking in a rate, in 5 years, which will determine the payments for the 5 years after that. So unless you own this interest-paying asset for that whole future duration, you won't immediately benefit. You also won't need / want to buy that asset today, because the rates from today to 2022 are largely irrelevant to you - you want something that directly goes against the prevailing mortgage interest rate in 2022 precisely. So in your specific case, you could in theory consider the following solution: You could short a coupon bond, likely one with a 10 year maturity date from today. As interest rates rise, the value of the coupon bond [for it's remaining life of 5 years], which has an implied interest rate set today, will drop. Because you will have shorted an asset dropping in value, you will have a gain. You could then close your short position when you buy your house in 5 years. In theory, your gain at that moment in time, would equal the present value of the rate differential between today's low mortgage rates and tomorrow's high interest rates. There are different ways mechanically to achieve what I mention above (such as buying forward derivative contracts based on interest rates, etc.), but all methods will have a few important caveats: (1) These will not be perfect hedges against your mortgage rates, unless the product directly relates to mortgage rates. General interest rates will only be a proxy for mortgage rates. (2) There is additional risk in taking this type of position. Taking a short position / trading on a margin requires you to make ongoing payments to the broker in the event that your position loses money. Theoretically those losses would be offset by inherent gains in the future, if mortgage rates stay low / go lower, but that offset isn't in your plan for 5 years. (3) 5 years may be too long of a timeline for you to accurately time the maturity of your 'hedge' position. If you end up moving in 7 years, then changes in rates between 2022-2024 might mean you lose on both your 'hedge' position and your mortgage rates. (4) Taking on a position like this will tie up your capital - either because you are directly buying an asset you believe will offset growing interest rates, or because you are taking on a margin account for a short position (preventing you from using a margin account for other investments, to the extent you 'max out' your margin limit). I doubt any of these solutions will be desirable to an individual looking to mitigate interest rate risk, because of the additional risks it creates, but it may help you see this idea in another light." }, { "docid": "367558", "title": "", "text": "Yes, it's considered the students asset, regardless of the custodian aspect. I don't know how you'd propose to put it in a retirement account, even with the earned income to facilitate this, the limit is $5500/yr. The larger issue is parental income. That and parental assets. Tough to game that part of the system to get aid. In the end, one should look to scholarships, both merit and non merit based to maximize college support." }, { "docid": "244641", "title": "", "text": "Assets can be acquired in different ways and for different purposes. I will only address common legal ways of acquiring assets. You can trade one asset for another asset. This usually takes place in the form of trading cash or a cash equivalent for an asset. The asset received should be of equal or greater value than the asset given in the eyes of the purchaser in order for the trade to be rational. Take this example: I am selling a bike that has been sitting on my porch for a few months. It's worth about $25 to me. My friend, Andy, comes by and offers $90 for it. I happily accept. Andy valued the bike at $110. This transaction produced value for both parties. I had a value benefit of $65 (90 - 25) and Andy had a value benefit of $20 (110 - 90). You can receive an asset as a gift or an inheritance. Less common, but still frequent. Someone gives you a gift or a family member dies and you receive an asset you did not own previously. You can receive an asset in exchange for a liability. When you take out a loan, you receive an asset (cash) which is financed by a liability (loan payable). In your case: Why would I buy a mall if having assets worth the same amount as the mall? I must value the mall more than the assets I currently have. This may stem from the possibility of greater future returns than I am currently making on my asset, or, if I financed the purchase with a liability, greater future returns than the cost associated with payment on the principal and interest of the liability." }, { "docid": "564554", "title": "", "text": "I think a greater problem would be the protection of your property right. China hasn't shown much respect for the property rights of its own citizens - moving people off subsistence farms in order to build high-rise apartments - so I'm not certain that a foreigner could expect much protection. A first consideration in any asset purchase should always be consideration of the strength of local property law. By all accounts, China fails." }, { "docid": "1577", "title": "", "text": "If I buy VUSA from one exchange, can I sell it in a different exchange, assuming my brokerage account lets me trade in both exchanges? Or is it somehow tied to the exchange I bought it from? This doesn't happen for all securities and between all stock exchanges. So that is dependent on broker and country. I checked for VUSA with Selftrade. They categorically refused allowing me to trade in VUSA in different exchanges. I can only buy and sell in same currency only, albeit sell(buy) in the same exchange where I buy(sell) from. Should be the same behaviour for all brokers for us mere mortals, if you are a bank or a millionaire than that might be a different question. The VUSA you quote is quoted in GBP in LSE and in EUR in AEX, and the ETF has been created by an Irish entity and has an Irish ISIN. As Chris mentioned below, happens between US and Canadian exchanges, but not sure it happens across all exchanges. You cannot deal in inter-listed stocks in LSE and NYSE. Since it's the same asset, its value should not vary across exchanges once you compensate for exchange rates, right? Yes, else it opens up itself for arbitrage (profit without any risk) which everybody wants. So even if any such instance occurs, either people will exploit it to make the arbitrage profit zero (security reflects the equilibrium price) or the profit from such transaction is so less, compared with the effort involved, that people will tend to ignore it. Anyways arbitrage profit is very difficult to garner nowadays, considering the super computers at work in the market who exploit these discrepancies, the moment they see them and bring the security right to the zero arbitrage profit point. If there's no currency risk because of #2, what other factors should I consider when choosing an exchange to trade in? Liquidity? Something else? Time difference, by the time you wake up to trade in Japan, the Japanese markets would have closed. Tax implications across multiple continents. Law of the land, providing protection to investors. Finding a broker dealing in markets you want to explore or dealing with multiple brokers. Regulatory headaches." }, { "docid": "205522", "title": "", "text": "What you propose is to convert unsecured debt into secured debt. Conversion of unsecured debt into secured debt is not generally a good idea (several reasons). The debt you currently owe does not have assets securing the debt, so the creditor knows they are exposed to risk, and may be more willing to negotiate or relax terms on the debt, should you encounter problems. When you provide an asset to secure debt, you lose freedom to sell that asset. When you incur debt their is usually a spending problem that needs to be corrected, which is typically not fixed when a refinance solution is used. You do not mention interest rate, which would be one benefit to conversion of unsecured to secured debt, so you probably are not gaining adequate benefit from the conversion strategy. This strategy is often contemplated using 'cash-out' refinancing to borrow against a home you already own, and the (claimed) benefit is often to lower the interest rate on the debt. Your scenario is more complicated in that you have not purchased the home (yet). Though it may be a good idea to purchase a home, that choice depends on a different set of considerations (children, job stability, rental vs. buy costs, lifestyle, expected appreciation, etc) from how to best handle a large debt (income vs. expenses, how to increase income or reduce expenses, lifestyle, priorities, etc). Another consideration is that you already have a problem with the large debt owed to one (set of) creditor(s), and you have a plan which would shift the risk/exposure to another (set of) creditor(s) who may have been less complicit in accruing the original debt. Was the debt incurred jointly during the marriage, and something you accepted responsibility to repay? You mention that you make great income, and you specify one expense (rent), but you neither provided the amount of income, total of all your expenses, nor your free cash flow amount, nor any indication of percentages spent on rent, essential expenses, lifestyle, nor amount available to retire debt. Since you did not provide specifics, we can take a look at three scenarios, scenario #1, $4000/month income scenario #1, $6000/month income scenario #1, $8000/month income Depending upon your income and choices, you might have < $500/month to pay towards debt, or as much as $3000/month to pay towards debt, and depending upon interest rate (which OP did not provide), this debt could take < 2 years to pay or > 5 years to pay. Have you accepted the responsibility for the debt? It will be a tough task to repay the debt. And you will learn that debt comes with a cost as you repay it. One problem people often encounter when they refinance debt is they have not changed the habits which produced the debt. So they often continue their spending habits and incur new unsecured debt, landing them back in the same problem position, but with the increased secured debt combined with additional new unsecured debt. Challenge yourself to repay a specific portion of the debt in a specific time, and consider ways to reduce your expenses (and/or increase your income) to provide more money to repay the debt quicker. As you also did not disclose your assets, it is hard to know whether you could repay a portion of the debt from assets you already own. It makes sense to sell assets that have a low (or zero) return to repay debt that has a high interest rate. Perhaps you have substantial assets that you are reluctant to sell, but that you could sell to repay a large part of the debt?" }, { "docid": "519608", "title": "", "text": "I think that some asset classes should be better protected from arbitrage. Its not possible to prevent either greed or information asymmetry so high market volatility will continue to get worse. However, secondary transactions directly or indirectly involving assets of a protected class: * Food - agriculture futures, farm land mortgages, seed licenses, etc... * Housing - Resales, mortgages, any mortgage derivatives * Medicine - Insurance policies, drug licenses, medical debt * Education - Debt and derivatives Should be heavily taxes to discourage destructive arbitrage. This will not hurt investment (in the capitalist sense) because such transactions are purely speculative." }, { "docid": "509253", "title": "", "text": "\"My gut reaction is how legal is his statement? *\"\"So where am I going with all this? It's quite simple. If any new taxes are levied on me, or my company, as our current President plans, I will have no choice but to reduce the size of this company... So, when you make your decision to vote, ask yourself, which candidate understands the economics of business ownership and who doesn't? Whose policies will endanger your job? Answer those questions and you should know who might be the one capable of protecting and saving your job.\"\"* If an employer sent this to me I'd seriously consider that a threat in regards against how I practice my political beliefs. It undermines my right to educate myself.\"" }, { "docid": "434279", "title": "", "text": "\"Here is the \"\"investing for retirement\"\" theoretical background you should have. You should base your investment decisions not simply on the historical return of the fund, but on its potential for future returns and its risk. Past performance does not indicate future results: the past performance is frequently at its best the moment before the bubble pops. While no one knows the specifics of future returns, there are a few types of assets that it's (relatively) safe to make blanket statements about: The future returns of your portfolio will primarily be determined by your asset allocation . The general rules look like: There are a variety of guides out there to help decide your asset allocation and tell you specifically what to do. The other thing that you should consider is the cost of your funds. While it's easy to get lucky enough to make a mutual fund outperform the market in the short term, it's very hard to keep that up for decades on end. Moreover, chasing performance is risky, and expensive. So look at your fund information and locate the expense ratio. If the fund's expense ratio is 1%, that's super-expensive (the stock market's annualized real rate of return is about 4%, so that could be a quarter of your returns). All else being equal, choose the cheap index fund (with an expense ratio closer to 0.1%). Many 401(k) providers only have expensive mutual funds. This is because you're trapped and can't switch to a cheaper fund, so they're free to take lots of your money. If this is the case, deal with it in the short term for the tax benefits, then open a specific type of account called a \"\"rollover IRA\"\" when you change jobs, and move your assets there. Or, if your savings are small enough, just open an IRA (a \"\"traditional IRA\"\" or \"\"Roth IRA\"\") and use those instead. (Or, yell at your HR department, in the event that you think that'll actually accomplish anything.)\"" }, { "docid": "113786", "title": "", "text": "\"There are two umbrellas in investing: active management and passive management. Passive management is based on the idea \"\"you can't beat the market.\"\" Passive investors believe in the efficient markets hypothesis: \"\"the market interprets all information about an asset, so price is equal to underlying value\"\". Another idea in this field is that there's a minimum risk associated with any given return. You can't increase your expected return without assuming more risk. To see it graphically: As expected return goes up, so does risk. If we stat with a portfolio of 100 bonds, then remove 30 bonds and add 30 stocks, we'll have a portfolio that's 70% bonds/30% stocks. Turns out that this makes expected return increase and lower risk because of diversification. Markowitz showed that you could reduce the overall portfolio risk by adding a riskier, but uncorrelated, asset! Basically, if your entire portfolio is US stocks, then you'll lose money whenever US stocks fall. But, if you have half US stocks, quarter US bonds, and quarter European stocks, then even if the US market tanks, half your portfolio will be unaffected (theoretically). Adding different types of uncorrelated assets can reduce risk and increase returns. Let's tie this all together. We should get a variety of stocks to reduce our risk, and we can't beat the market by security selection. Ideally, we ought to buy nearly every stock in the market so that So what's our solution? Why, the exchange traded fund (ETF) of course! An ETF is basically a bunch of stocks that trade as a single ticker symbol. For example, consider the SPDR S&P 500 (SPY). You can purchase a unit of \"\"SPY\"\" and it will move up/down proportional to the S&P 500. This gives us diversification among stocks, to prevent any significant downside while limiting our upside. How do we diversify across asset classes? Luckily, we can purchase ETF's for almost anything: Gold ETF's (commodities), US bond ETF's (domestic bonds), International stock ETFs, Intl. bonds ETFs, etc. So, we can buy ETF's to give us exposure to various asset classes, thus diversifying among asset classes and within each asset class. Determining what % of our portfolio to put in any given asset class is known as asset allocation and some people say up to 90% of portfolio returns can be determined by asset allocation. That pretty much sums up passive management. The idea is to buy ETFs across asset classes and just leave them. You can readjust your portfolio holdings periodically, but otherwise there is no rapid trading. Now the other umbrella is active management. The unifying idea is that you can generate superior returns by stock selection. Active investors reject the idea of efficient markets. A classic and time proven strategy is value investing. After the collapse of 07/08, bank stocks greatly fell, but all the other stocks fell with them. Some stocks worth $100 were selling for $50. Value investors quickly snapped up these stocks because they had a margin of safety. Even if the stock didn't go back to 100, it could go up to $80 or $90 eventually, and investors profit. The main ideas in value investing are: have a big margin of safety, look at a company's fundamentals (earnings, book value, etc), and see if it promises adequate return. Coke has tremendous earnings and it's a great company, but it's so large that you're never going to make 20% profits on it annually, because it just can't grow that fast. Another field of active investing is technical analysis. As opposed to the \"\"fundamental analysis\"\" of value investing, technical analysis involves looking at charts for patterns, and looking at stock history to determine future paths. Things like resistance points and trend lines also play a role. Technical analysts believe that stocks are just ticker symbols and that you can use guidelines to predict where they're headed. Another type of active investing is day trading. This basically involves buying and selling stocks every hour or every minute or just at a rapid pace. Day traders don't hold onto investments for very long, and are always trying to predict the market in the short term and take advantage of it. Many individual investors are also day traders. The other question is, how do you choose a strategy? The short answer is: pick whatever works for you. The long answer is: Day trading and technical analysis is a lot of luck. If there are consistent systems for trading , then people are keeping them secret, because there is no book that you can read and become a consistent trader. High frequency trading (HFT) is an area where people basically mint money, but it s more technology and less actual investing, and would not be categorized as day trading. Benjamin Graham once said: In the short run, the market is a voting machine but in the long run it is a weighing machine. Value investing will work because there's evidence for it throughout history, but you need a certain temperament for it and most people don't have that. Furthermore, it takes a lot of time to adequately study stocks, and people with day jobs can't devote that kind of time. So there you have it. This is my opinion and by no means definitive, but I hope you have a starting point to continue your study. I included the theory in the beginning because there are too many monkeys on CNBC and the news who just don't understand fundamental economics and finance, and there's no sense in applying a theory until you can understand why it works and when it doesn't.\"" }, { "docid": "19224", "title": "", "text": "I wrote a detailed answer about variable annuities on another question, but I want to include one specific situation where a variable annuity may be the right course of action. (For the sake of simplicity, I'm quoting directly from that answer): Three-quarters of US states protect variable annuity assets from creditors. Regular IRA's don't benefit from protection under the Employee Retirement Income Security Act (ERISA) and may therefore be more vulnerable to creditors. If you're a potential target for lawsuits, e.g. a doctor worried about medical malpractice suits, variable annuities may be an option for you. As always, you should consult a legal/tax professional to see if this might be a good option for you to consider. The SEC also has a fantastic publication on variable annuities that provides a great deal of information. It's not directly related to this question because it doesn't necessarily focus on the circumstances in which they might be a good fit for you, but it's educational nevertheless and should give you more than enough information to properly evaluate any policy you're looking to buy." }, { "docid": "315972", "title": "", "text": "You may be in a situation where buying is preferred, especially because you can enter the market in a strong position - with a 20% down payment. If you have the financial ability to assume the risk of owning, you may be better off. I would consider two things. Renting is purchasing a service. You are buying the flexibility to move with minimum hassle and the landlord is assuming the risk of owning the asset (property). They will make money on you, like any service provider. Buying is purchasing an asset. You are buying the underlying asset and assume all the risks associated with it. This is large, unforeseen maintenance, fees, taxes, depreciation, etc... Some of these risks were passed to you as a renter, but some were not. Just like purchasing $400k in stock, if you have to sell when the market is down, you lose big. You win if you can hold. Unlike a stock, real estate will eat your cash in taxes and repairs unless it is rented. If you are willing to be a long-distance landlord, this may work out. Understand that property management fees will eat into your rent income and being long-distance will give more potential for a bad tenant to ruin your property value. These and other factors (e.g. vacancy rate) will increase your risk of loss and should be considered. Some of this will be your preference, since you will spend much more time dealing with buying/selling/property management as opposed to a more clean rental situation. Is this hassle worth the savings? For many, yes; others, no. Finally, I hope this calculator can help clarify some of the financial aspects for you. http://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html?_r=0 Good Luck!" }, { "docid": "189678", "title": "", "text": "\"Remember that risk should correlate with returns, in an investment. This means that the more risk you take on, the more return you should be receiving, in an efficient marketplace. That's why putting your money in a savings account might earn you <1% interest right now, but putting money in the stock market averages ~7% returns over time. You should be very careful not to use the word 'interest' when you mean 'returns'. In your post, you are calling capital gains (the increase in value of owned property) 'interest'. This may be understating in your head the level of risk associated with property ownership. In the case of the bank, they are not in the business of home construction. Rather than take that risk themselves, they would rather finance many projects being done by construction companies that know the business. The bank has a high degree of certainty of getting its money back, because its mortgages are protected by the value of the property. Part of the benefit of an efficient marketplace is that risk gets 'bought' by individuals who want it. This means that people with a low-risk tolerance (such as banks, people on fixed incomes, seniors, etc.) can avoid risk, and people with a high risk tolerance (stock investors, young people with high income, etc.) can take on that risk for higher average returns. The bank's reasoning should remind you of the risk associated with property ownership: increases in value are not a sure thing. If you do not understand the risk of your investment, you cannot be certain that you are being well compensated for that risk. Note also that most countries place regulations on their banks that limit the amount of their funds that can be placed in 'higher risk' asset classes. Typically, this something along the lines of \"\"If someone places a deposit with your bank, you can only invest that deposit in a low-risk debt-based asset [ie: you can take money deposited by customer A and use it to finance a mortgage for customer B]\"\". This is done in an attempt to prevent collapse of the financial sector, if risky investments start failing.\"" } ]

[ { "docid": "180696", "title": "", "text": "A lot of loans are taken out on a fixed rate basis, so the rate is part of the contract and is therefore covered by contract law. If the loan is taken out on a variable basis then in principle the rate can rise within the terms of the contract. If a particular lender tries to raise its rates out of line with the market then its customers will seek alternative, cheaper, loans and pay off their expensive loan if they can. If rates rise sharply in general due to unusual politico-economic circumstances then those with variable rate loans can find themselves in severe trouble. For example the base rate in the UK (and therefore variable mortgage rates closely tied to it) spiked sharply in the late 80s which caused severe stress to a lot of borrowers and undoubtedly pushed some into financial difficulties." } ]

[ { "docid": "570466", "title": "", "text": "\"When \"\"people say\"\", each person is referring to whatever he/she is looking at. Interest rates tend to move roughly the same, but often there is a bias regarding long vs. short term. In the US right now, short term interest rates are very low but there is a lot of chatter saying they will rise in the future. The differential between long term rates and short term rates is high compared to historical norms, suggesting that the market believes this chatter. You can also look at the differences in rates between different quality levels. If the economy is improving, the difference in rate for lower rated debt vs. higher rated debt decreases as people think the chance of businesses failing is decreasing. Right now, any interest rate you look at is well below long term historical averages, so asserting that interest rates are low is quite safe.\"" }, { "docid": "39503", "title": "", "text": "\"I think that pattern is impossible, since the attempt to apply the second half would seem to prevent executing the first. Could you rewrite that as \"\"After the stock rises to $X, start watching for a drop of $Y from peak price; if/when that happens, sell.\"\" Or does that not do what you want? (I'm not going to comment on whether the proposed programmed trading makes sense. Trying to manage things at this level of detail has always struck me as glorified guesswork.)\"" }, { "docid": "61346", "title": "", "text": "Is it true that due the to the increase in interest rates that inflation is likely to increase as well? It is typically the reverse where inflation causes interest rates to rise. Interest rates fundamentally reflect the desire for people to purchase future goods over present day goods. If I loan money to someone for 5 years I lose the ability to use that money. In order to entice me to loan the money the borrower would have to offer me an incentive, that is, they would have to give me additional money at the end of that 5 years. This additional money is the interest rate and it reflects the desire of people to spend money in the future versus the present day. If offered the same amount of money today versus 5 years from now almost everyone would chose to take the money now. Money in the present is more valuable than the same amount of money in the future. Interest rates would still exist even with a currency that could not be printed. I would still prefer to have the currency today than in the future. If the currency is continually devalued (i.e. the issuer is printing more of the currency) than borrowers may charge additional interest to compensate for the loss in purchasing power when they make a loan. Also, it is hard to compare interest rates and inflation. Inflation is very difficult to calculate. New products and services, as well as ever changing consumer desires, continually change the mixture of goods in the market so it is nearly impossible to compare a basket of goods today to a basket of goods 5, 10, 20, or 30 years ago." }, { "docid": "358736", "title": "", "text": "Companies with existing borrowings (where borrowings are on variable interest rates) or in the case with fixed interest rates - companies that get new borrowings - would pay less interest on these borrowings, so their cost will go down and profits up, making them more attractive to investors. So, in general lower interest rates will make the share market a more attractive investment (than some alternatives) as investors are willing to take on more risk for potentially higher returns. This will usually result in the stock market rising as it is currently in the US. EDIT: The case for rising interest rates A central bank's purpose when raising interest rates is to slow down an economy that is booming. As interest rates rise consumers will tighten up their spending and companies will thus have less revenue on top of higher costs for maintaining existing borrowing (with variable rates) or new borrowing (with fixed rates). If rates are higher companies may also defer new borrowings to expand their business. This will eventually lead to lower profits and lower valuation for these companies. Another thing that happens is that as banks start increasing interest for saving accounts investors will look for safety where they can get a higher return (than before) without the risk of the stock market. With lowering profits and valuations, and investor's money flowing out of shares and into the money market, so will company share prices drop (although this may lag a bit with the share market still booming due to greed. But once the boom stops watchout for the crash)." }, { "docid": "517750", "title": "", "text": "As of now in 2016, is is safe to assume that mortgage rates would/should not get back to 10%? What would the rates be in future is speculation. It depends on quite a few things, overall economy, demand / supply, liquidity in market etc ... Chances are less that rates would show a dramatic rise in near future. Does this mean that one should always buy a house ONLy when mortgage rates are low? Is it worth the wait IF the rates are high right now? Nope. House purchase decision are not solely based on interest rates. There are quite a few other aspects to consider, the housing industry, your need, etc. Although interest rate do form one of the aspect to consider specially affordability of the EMI. Is refinancing an option on the table, if I made a deal at a bad time when rates are high? This depends on the terms of current mortgage. Most would allow refinance, there may be penal charges breaking the current mortgage. Note refinance does not always mean that you would get a better rate. Many mortgages these days are on variable interest rates, this means that they can go down or go up. How can people afford 10% mortgage? Well if you buy a small cheaper [Less expensive] house you can afford a higher interest rate." }, { "docid": "183531", "title": "", "text": "The literal answer to your question 'what determines the price of an ETF' is 'the market'; it is whatever price a buyer is willing to pay and a seller is willing to accept. But if the market price of an ETF share deviates significantly from its NAV, the per-share market value of the securities in its portfolio, then an Authorized Participant can make an arbitrage profit by a transaction (creation or redemption) that pushes the market price toward NAV. Thus as long as the markets are operating and the APs don't vanish in a puff of smoke we can expect price will track NAV. That reduces your question to: why does NAV = market value of the holdings underlying a bond ETF share decrease when the market interest rate rises? Let's consider an example. I'll use US Treasuries because they have very active markets, are treated as risk-free (although that can be debated), and excluding special cases like TIPS and strips are almost perfectly fungible. And I use round numbers for convenience. Let's assume the current market interest rate is 2% and 'Spindoctor 10-year Treasury Fund' opens for business with $100m invested (via APs) in 10-year T-notes with 2% coupon at par and 1m shares issued that are worth $100 each. Now assume the interest rate goes up to 3% (this is an example NOT A PREDICTION); no one wants to pay par for a 2% bond when they can get 3% elsewhere, so its value goes down to about 0.9 of par (not exactly due to the way the arithmetic works but close enough) and Spindoctor shares similarly slide to $90. At this price an investor gets slightly over 2% (coupon*face/basis) plus approximately 1% amortized capital gain (slightly less due to time value) per year so it's competitive with a 3% coupon at par. As you say new bonds are available that pay 3%. But our fund doesn't hold them; we hold old bonds with a face value of $100m but a market value of only $90m. If we sell those bonds now and buy 3% bonds to (try to) replace them, we only get $90m par value of 3% bonds, so now our fund is paying a competitive 3% but NAV is still only $90. At the other extreme, say we hold the 2% bonds to maturity, paying out only 2% interest but letting our NAV increase as the remaining term (duration) and thus discount of the bonds decreases -- assuming the market interest rate doesn't change again, which for 10 years is probably unrealistic (ignoring 2009-2016!). At the end of 10 years the 2% bonds are redeemed at par and our NAV is back to $100 -- but from the investor's point of view they've forgone $10 in interest they could have received from an alternative investment over those 10 years, which is effectively an additional investment, so the original share price of $90 was correct." }, { "docid": "376709", "title": "", "text": "\"anything that produces steady income will produce a \"\"real return\"\" (return above inflation) in a zero-interest rate environment: Note, however, that all of these will decline in value if interest rates rise.\"" }, { "docid": "52299", "title": "", "text": "That's true, though I feel he means it more in terms of hindsight. Yes, low interest rates will cause the stock market, as a whole, to rise. Though it is not actionable by us prior to the rise or fall in rates because we can never know before it happens. We're then left with only one real way of making money in the market and that's the purchase of undervalued companies with all the aforementioned criteria." }, { "docid": "565441", "title": "", "text": "What are you using the analysis for? If your analyzing your interest rate risk then you want to determine decay rates for your non-maturity deposits. Assuming your bank uses ALM software to produce your Earnings-at-Risk (EAR) and Economic Value of Equity (EVE) metrics, the decay rate assumptions make a big difference in those numbers. Most ALM models have default assumptions that may not be correct for your institution, and as a result are giving you EAR and EVE numbers that are not at all accurate. Basically you want to have some analysis that proves how you are bucketing your NMDs (3,6,9, 12, 24 months?). Are your deposits sticky or are they affected by small changes in interest rates? You can look at historical numbers to determine how your deposits behave, but be sure to go back more than 3-4 years as deposit behavior has been pretty abnormal since 2008 with rates near zero. Similarly, you may want to try and identify 'surge' deposits that came into your bank due to the low rate environment and as soon as rates rise they will move into higher earning assets (stocks, bond, money markets)." }, { "docid": "253960", "title": "", "text": "Long-term bonds -- any bonds, really -- can be risky for two main reasons: return on principal, or return of principal. The former is a problem if interest rates are low (which they are now in the US) because existing bonds will fall in price if interest rates rise. The second is a problem if the lender defaults: IOU nothing. No investment is riskless. Short-term bonds command a lower interest rate than long-term bonds (usually) because of their quicker maturity, but short-term bonds carry risk just like long-term bonds (though the interest rate risk is lower, sometimes quite a bit lower, than for long-term bonds)." }, { "docid": "499166", "title": "", "text": "It's all about risk. These guidelines were all developed based on the risk characteristics of the various asset categories. Bonds are ultra-low-risk, large caps are low-risk (you don't see most big stocks like Coca-Cola going anywhere soon), foreign stocks are medium-risk (subject to additional political risk and currency risk, especially so in developing markets) and small-caps are higher risk (more to gain, but more likely to go out of business). Moreover, the risks of different asset classes tend to balance each other out some. When stocks fall, bonds typically rise (the recent credit crunch being a notable but temporary exception) as people flock to safety or as the Fed adjusts interest rates. When stocks soar, bonds don't look as attractive, and interest rates may rise (a bummer when you already own the bonds). Is the US economy stumbling with the dollar in the dumps, while the rest of the world passes us by? Your foreign holdings will be worth more in dollar terms. If you'd like to work alternative asset classes (real estate, gold and other commodities, etc) into your mix, consider their risk characteristics, and what will make them go up and down. A good asset allocation should limit the amount of 'down' that can happen all at once; the more conservative the allocation needs to be, the less 'down' is possible (at the expense of the 'up'). .... As for what risks you are willing to take, that will depend on your position in life, and what risks you are presently are exposed to (including: your job, how stable your company is and whether it could fold or do layoffs in a recession like this one, whether you're married, whether you have kids, where you live). For instance, if you're a realtor by trade, you should probably avoid investing too much in real estate or it'll be a double-whammy if the market crashes. A good financial advisor can discuss these matters with you in detail." }, { "docid": "356669", "title": "", "text": "The financially best choice depends on which has a lower interest rate and what your other debts are. If you have significant other debts with a higher interest rate, it may make good sense to sign up for the longer-term loan and use your extra money to pay those down first. Then pay down your mortgage with large payments. If you don't have significant other debts, then it is likely a good idea to take a shorter term loan because those tend to have lower interest rates. In either case, remember that the required loan payments are the minimum payments. You can always pay more, and in many cases you should. The objective here is to pay as little interest over the course of your life as is feasible. I don't think it makes too much sense to gamble on whether or not interest rates will rise in the future. They may or may not over the life of your loan and you are not in a position to know which. They are low now, so they can be compared to your existing loans usefully. That is enough information to make rational decisions today." }, { "docid": "372657", "title": "", "text": "\"Let's talk interest rates on your junk bonds. Even after all that the US has been through (and is still going through), the United States dollar is widely regarded as one of the safest safe havens for your money. As such it serves as a de facto baseline against which all other investments can be measured, the bar everyone has to pass: if you could earn 4% on a 5-year US Treasury bond, or earn 4% on anything else over the next 5 years, you pick the Treasury bond. In many ways this means that the interest rate on a Treasury bond is the closest single measure we have to the price of money all by itself. If someone is loaning you money, they could be loaning it to the Treasury instead; they are losing out by making this loan to you, and must charge you at least this rate just to break even. But most people/governments/countries aren't as credit-worthy as the US Treasury. A few are (the US treasury isn't magical, after all, just really good at what it does), but generally they are not. There is a possibility when loaning money to these entities that you will not get your money back. That is risk. All entities have some risk (even the US treasury!), and some have more than others; \"\"junk bonds\"\" have a somewhat elevated level of this risk. Now, you don't just take a risk on for free (unless you're being charitable or something, but I hope you can find better beneficiaries of charity than the average junk bond). You need to be compensated for that risk. Lenders will demand compensation commensurate with that risk - or they will just walk away without making any loans or buying any bonds because it's not worth it. The difference between the interest rate on a US Treasury bond and the interest rate on another bond, such as a junk bond, is the risk premium - the cost of carrying that risk. Therefore you can see that the interest rate on a junk bond is the price of money plus the risk premium. Now, the Federal Reserve adjusts the price of money from time to time, by buying and selling US Treasury bonds until the price is something they like. This means that one component of interest rate on a junk bond is the interest rate on the US Treasury bond, and it is effectively controlled by the Federal Reserve (through that layer of indirection). The other component of the interest rate on a junk bond is the risk premium. It's not generally possible to know in advance whether or not some company will actually default. People have to guess, and decide how comfortable they are taking that risk. This means that risk is more expensive (and interest rates are higher) when they think the companies in question are going through some hard times, and risk will also be more expensive when people decide that they can't take as many risks (perhaps they've already lost some money and need to take additional steps to protect the rest). It's definitely very hard for an individual to decide what the risk on a particular bond is. The good news is that you generally don't have to. There are a bunch of rich jerks, hedge funds, retirement funds, insurance companies, and other investment entities out there who spend all day looking at things like bonds, trying to estimate the risk. Their willingness to exploit minuscule differences between the interest rate on a bond and the real risk means that the average bond on the market will be fairly priced, according to what all those people think. Plenty of them can still be wrong, mind you (cf. mortgage-backed securities) but in the general case the price of any security reflects all the information everyone in the world has on it on average, so if you're wrong you're in good company. When you buy a nice diversified bond fund, you have access to a bunch of bonds at a pretty-standard price. So that's interest rates for you. But you asked about prices. As it turns out, they're the same thing! - just expressed slightly differently. One way or another a bond is essentially meant to be a stream of payments worth a certain amount in the end - this is why you'll hear them referred to sometimes as a \"\"fixed-income security\"\". The interest rate is essentially the difference between the price you pay now, and the value you receive later, except expressed as a rate. Technically, you could structure the bonds differently (e.g. does the bond pay little bits of interest as you go along, or just pay one big lump sum in the end?) but you can use Math to convert between these two situations, and figure out how much money is worth which when, so it doesn't really matter. Anyway. This means that rising interest rates means lower bond prices on bonds you already own (and falling interest rates means higher bond prices). So if the Federal Reserve increases interest rates, the face value of your bond funds will fall. Also, if people think that the companies issuing the bonds are too risky, the face value of those bonds will also fall. (You were probably expecting the latter effect, though.) Mind you, you will still get the same amount of future money out of them as you would otherwise: that's why they're fixed-income securities. However, a higher interest rate means \"\"I can get more money in the future for less money now\"\", and so people will be willing to pay you less for your bond in the present. This is known as interest rate risk. It is higher on longer term bonds, because those have more time to earn interest.\"" }, { "docid": "143591", "title": "", "text": "There's a bit of working backwards that's required. This is a summary of a spreadsheet I wrote which helps to get to the answer. What you see here is that at age 25, one might have saved about a half year's salary, assuming they worked 5 years. The numbers grow exponentially to at 65, about 15 years salary saved. This will allow a withdrawal of about 60% final income each year using the 4% guideline. More will come from Social Security in the States to get closer to 100%. The sheet start with assumptions, a 10% per year rate of saving, and an 8% annual return. Salary is assumed to rise 3% per year. One can choose their age, enter their current numbers and their own assumptions. I had to include some numbers and at the time, 8% seemed reasonable. Not so sure today. What I do like is the concept of viewing savings in terms of 'years salary' as this leads to replacement rate. Will $1M be enough for you? Only you can answer that. But the goal of 80-100% replacement income is reasonable and this sheet can be used to understand the goals along the way. (note, the uploaded sheet had 15% saving rate, not the 10 I thought. I used 15 to show a 10% saving along with a 5% match to one's 401(k). Those interested are welcome to enter their own numbers. The one objection I've seen is the increase to salary. Increases tend to be higher in the first 20 than the second, or so I'm told.)" }, { "docid": "65461", "title": "", "text": "First, let me fill in the gaps on your situation, based on the numbers you've given so far. I estimate that your student loan balance (principal) is $21,600. With the variable rate loan option that you've presented, the maximum interest rate you could be charged would be 11.5%, which would bring your monthly payment up to that $382 number you gave in the comments. Your thoughts are correct about the advantage to paying this loan off sooner. If you are planning on paying off this loan sooner, the interest rate on the variable rate loan has less opportunity to climb. One thing to be cautious of with the comparison, though: The $1200 difference between the two options is only valid if your rate does not increase. If the rate does increase, of course, the difference would be less, or it could even go the other way. So keep in mind that the $1200 savings is only a theoretical maximum; you won't actually see that much savings with the variable rate option. Before making a decision, you need to find out more about the terms of this variable rate loan: How often can your rate go up? What is the loan rate based on? I'm not as familiar with student loan variable rate loans, but there are other variable rate loans I am familiar with: With a typical adjustable rate home mortgage, the rate is locked for a certain number of years (perhaps 5 years). After that, the bank might be allowed to raise the rate once every period of months (perhaps once every year). There will be a limit to how much the rate can rise on each increase (perhaps 1.0%), and there will be a maximum rate that could be charged over the life of the loan (perhaps 12%). The interest rate on your mortgage can adjust up, inside of those parameters. (The actual formula used to adjust will be found in the fine print of your mortgage contract.) However, the bank knows that if they let your rate get too high above the current market rates, you will refinance to a different bank. So the mortgage is typically structured so that it will raise your rate somewhat, but it won't usually get too far above the market rate. If you knew ahead of time that you would have the house paid off in 5 years, or that you would be selling the house before the 5 years is over, you could confidently take the adjustable rate mortgage. Credit cards, on the other hand, also typically have variable rates. These rates can change every month, but they are usually calculated on some formula determined ahead of time. For example, on my credit card, the interest rate is the published Prime Rate plus 13.65%. On my last statement, it said the rate was 17.15%. (Of course, because I pay my balance in full each month, I don't pay any interest. The rate could go up to 50%, for all I care.) As I said, I don't know what determines the rate on your variable rate student loan option, and I don't know what the limits are. If it climbs up to 11.5%, that is obviously ridiculously high. I recommend that you try to pay off this student loan as soon as you possibly can; however, if you are not planning on paying off this student loan early, you need to try to determine how likely the rate is to climb if you want to pick the variable rate option." }, { "docid": "7332", "title": "", "text": "\"It all has to do with risk and reward. The risk is that interest rates will rise. To entice you to go with the variable, they make it so it is cheaper if interest rates never rise. Your job is to guess whether interest rates are likely to go up or not. In a first approximation, you should go fixed. The bank employs very smart people whose entire job is to know whether interest rates will go up or not. Those people chose the price difference between the two, and it's sure to favour the bank. That is, the risk of extra payments you'll make on the variable is probably more than the enticement. But, some people can't sleep at night if their payments (or more realistically, the interest part of their payments) might double. If that's you, go fixed. If that's not you, understand that the enticement actually has to be turned up a bit, to get more people to go variable, because of the sleeping-at-night feature. Think long and hard about your budget and what would happen if your payment jumped. If you could handle it, variable might be the better choice. Personally, I have been taking \"\"variable\"\" on my mortgage for decades (and now I don't have one) and never once regretted it. I also counselled my oldest child to take variable on her mortgage. Over this century so far, if rates ticked up, they didn't tick up to the level the fixed was offered at. Mostly they have sat flat. But if ever there was a world in which \"\"past performance does not predict future results\"\" it would be interest rate trends. Do your own research.\"" }, { "docid": "107697", "title": "", "text": "The article John cites says no correlation, but this chart from the article says otherwise; One sees the rate drop from 14% to 4% and housing rise from an index of 50 to near 190. (reaching over to my TI BA-35 calculator) I see that at 14%, $1000/mo will buy $84,400 worth of mortgage, but at 4%, it will buy $209,500. 2-1/2 times the borrowing power for the same payment. But wait, my friends at West Egg tell me that inflation means I can't compare $1000 in 1980 to the same $1000 in 2010. The $1,000 inflates to $2611 (i.e. an income rising only with inflation, no more) and that can fund a mortgage for $546,900. This is 6.5 times the original borrowing power, yet the housing index 'only' rose 3.8X. See that crazy chart? Housing actually got cheaper from 1980 to the peak. Statistics can say whatever you wish. Interest rate change drove all the change in housing prices, but not quite as much as it should have. To answer your question - I expect that when rates rise (and they will) housing prices will take a hit. In today's dollars, a current $1000 borrows (at 4%) nearly $210K, but at 6%, just $167K. If rates took a jump from these record lows, that's the nature of the risk you'd take." }, { "docid": "375253", "title": "", "text": "how do these margins vary over time Depends on a lot of factors. The bank's financial health, bank's ongoing business activities, profits generated from it's other businesses. If it is new to mortgages, it mightn't take a bigger margin to grow its business. If it is in the business for long, it might not be ready to tweak it down. If the housing market is down, they might lower their margin's to make lending attractive. If their competitors are lowering their margins, the bank in question might also. Do they rise when the base rate rises, or fall, or are they uncorrelated? When rates rise(money is being sucked out to curb spending), large amount of spending decreases. So you can imagine margins will need to decrease to keep the mortgage lending at previous levels. Would economic growth drive them up or down? Economic growth might make them go up. Like in case 1, base rates are low -> people are spending(chances are inflation will be high) -> margins will be higher(but real value of money will be dependent on inflation) Is there any kind of empirical or theoretical basis to guess at their movement? Get a basic text book on macroeconomics, the rates and inflation portion will be there. How the rates influence the money supply and all. It will much more sense. But the answer will encompass a mixture of all conditions and not a single one in isolation. So there isn't a definitive answer. This might give you an idea of how it works. It is for variable mortgage but should be more or less near to what you desire." }, { "docid": "71861", "title": "", "text": "Certainly, yes, a zero coupon bond can go down in price. If interest rates rise before your bond matures, the price of the bond will go down – and the longer to maturity, the more it will tend to drop. Depending on when you bought and how much interest rates rise, you can incur a capital loss. The bond is guaranteed to be worth a certain amount at maturity as long as the issuer hasn't defaulted, but before maturity the market price of the bond will fluctuate, primarily based on interest rate movements. In fact, zero coupon bonds are even more interest-rate-sensitive than regular bonds (which have periodic coupon interest payments.)" } ]

[ { "docid": "493963", "title": "", "text": "Interest rates are market driven. They tend to be based on the prime rate set by the federal reserve bank because of the tremendous lending capacity of that institution and that other loan originators will often fund their own lending (at least in part) with fed loans. However, there is no mandatory link between the federal reserve rate and the market rate. No law stipulates that rates cannot rise or fall. They will rise and fall as lenders see necessary to use their capital. Though a lender asking 10% interest might make no loans when others are willing to lend for 9%. The only protection you have is that we are (mostly) economically free. As a borrower, you are protected by the fact that there are many lenders. Likewise, as a lender, because there are many borrowers. Stability is simply by virtue of the fact that one market participant with inordinate pricing will find fewer counterparties to transact." } ]

[ { "docid": "24822", "title": "", "text": "I don't like REITs because they are more closely correlated to the movement of the stock market. They don't really do the job of diversifying a portfolio because of that correlation. When the stock market dropped in 2008, REITs were hammered as well because the housing bubble burst. Bonds went up, and if you rebalanced (sold the bonds to buy more stock) then you came out much further ahead when the stock market recovered. The point of adding bonds for diversification is that they move in the opposite direction of equities; blunting the major drops (and providing buying opportunities). REITs don't fit that bill. REITs are not undergoing a correction like bonds because the price of real estate is a function of housing supply and buyer demand. Rising interest rates only make it a little harder for buyers to buy, so the effect of rising interest rates on real estate prices is muted. The other effects on real estate prices (more wealth in the economy for buyers) pushes in the opposite direction of the rising interest rates." }, { "docid": "260535", "title": "", "text": "Regardless. It’s a guaranteed 5.x%. Reducing student loans also allows you other benefits; i.e. reduces your credit risk allowing you to pull out more credit at a cheaper rate in the future etc. Unless you strongly believe in current bull market continuing.. (there is a high overvaluation from market principles atm and it has been the longest rise in history), you should go for the guaranteed change. Additionally, if your loan is pegged to variable interest rates such as the fed funds rate, be cognizant that the fed will probably continue rising rates for the near future of good times continue, meaning your rates will go up while markets go down. Long story short, would recommend paying down debt unless you’re quite confident in your skills. Edit: quick note that if you can do both, this is the best option." }, { "docid": "39503", "title": "", "text": "\"I think that pattern is impossible, since the attempt to apply the second half would seem to prevent executing the first. Could you rewrite that as \"\"After the stock rises to $X, start watching for a drop of $Y from peak price; if/when that happens, sell.\"\" Or does that not do what you want? (I'm not going to comment on whether the proposed programmed trading makes sense. Trying to manage things at this level of detail has always struck me as glorified guesswork.)\"" }, { "docid": "388391", "title": "", "text": "\"So \"\"Operation Twist\"\" is actually a pretty simple concept. Here's the break down: The Fed sells short-term treasury bonds that it already holds on its books. Short-term treasury bonds refer to - bonds that mature in less than three years. Then: Uses that money to buy long term treasury bonds. Long-term treasury bonds refer to - bonds that mature in six to 30 years The reason: The fed buys these longer-term treasuries to lower longer-term interest rates and encourage more borrowing and spending. Diving deeper into how it works: So the Fed can easily determine short-term rates by using the Federal funds rate this rate has a direct effect on the following: However this does not play a direct role in influencing the rate of long-term loans (what you might pay on a 30-year fixed mortgage). Instead, long-term rates are determined by investors who buy and sell bonds in the bond market, which changes daily. These bond yields fluctuate depending on the health of the economy and inflation. However, the Fed funds rate does play an indirect role in these rates. So now that we know a little more about what effects what rate, why does lower long-term rates in treasuries influence my 30yr fixed mortgage? Well when you are looking for a loan you are entering a market and competing against other people, by people I mean anyone looking for money (e.g: my grandmother, companies, or the US government). The bank that lends you money has to decide weather the deal you are offering them is better then another deal on the market. If the risk of lending to one person is the same as the risk of lending to another, the bank will make whichever loan yields the higher interest rate. The U.S. government is considered a very safe borrower, so much so that government bonds are considered almost “risk free”, but because of the lower risk the rate of return is lower. So now the bank has to factor in this risk and make its decision weather to lend you money, or the government. So, if the government were to go to the market and buy its own long-term bonds it is adding demand in the market causing the price of the bond to rise in effect lowering the interest rate (when price goes up, yield goes down). So when you go back and ask for a loan it has to re-evaluate and decide \"\"Is it worth giving this money to Joe McFreeBeer instead and collecting a higher yield?\"\" (After all, Joe McFreeBeer is a nice guy). Here's an example: Lets say the US has a rating of 10 out of 10 and its bonds pay a 2% yield. Now lets say for each lower mark in rating the bank will lend at a minimum of 1% higher and your rating is 8 of 10. So if you go to market, the lowest rate you can get will be 4%. Now lets say price rises on the US treasury and causes the rate to go down by 1%. In this scenario you will now be able to get a loan for 3% and someone with a rating of 7 of 10 would be able to get that 4% loan. Here's some more info and explinations: Why is the Government Buying Long-Term Bonds? What Is 'Operation Twist'? A Q&A on US Fed Program Federal Reserve for Beginners Federal Open Market Committee\"" }, { "docid": "52299", "title": "", "text": "That's true, though I feel he means it more in terms of hindsight. Yes, low interest rates will cause the stock market, as a whole, to rise. Though it is not actionable by us prior to the rise or fall in rates because we can never know before it happens. We're then left with only one real way of making money in the market and that's the purchase of undervalued companies with all the aforementioned criteria." }, { "docid": "494553", "title": "", "text": "\"Why do banks charge a significantly lesser rate for a 15 yr. fixed mortgage than a 30yr. (though they know it will not earn them the same amount of money)? A simplistic model of where banks get the money to lend to borrowers is that they \"\"borrow\"\" money from investors that want to earn a return on the money that they provide. The actual mechanics of that process are much more complicated, but the gist is that if those investors want to tie their money up for a longer period, they expect to get a higher return, thus 30-year mortgages require a higher interest rate than 15-year mortgages. In addition, the \"\"usual\"\" consensus in the market is that interest rates will rise in the future, so interest rates for longer-term loans are higher While it's true that the bank gets \"\"more money\"\" overall from a higher-rate mortgage, the fact that that additional money doesn't come until several years into the loan (and that money loses value over time due to inflation) makes a lower-rate 15 year mortgage roughly equivalent to a higher-rate 30-year mortgage.\"" }, { "docid": "322049", "title": "", "text": "I think this question is very nearly off-topic for this site, but I also believe that a basic understanding of the why the tax structure is what it is can help someone new to investing to understand their actual tax liability. The attempt at an answer I provide below is from a Canadian & US context, but should be similar to how this is viewed elsewhere in the world. First note that capital gains today are much more fluid in concept than even 100 years ago. When the personal income tax was first introduced [to pay for WWI], a capital gain was viewed as a very deliberate action; the permanent sale of property. Capital gains were not taxed at all initially [in Canada until 1971], under the view that income taxes would have been paid on income-earning assets all along [through interest, dividends, and rent], and therefore taxing capital gains would be a form of 'double-taxation'. This active, permanent sale was also viewed as an action that an investor would need to work for. Therefore it was seen as foolish to prevent investors from taking positive economic action [redistributing their capital in the most effective way], simply to avoid the tax. However today, because of favourable taxation on capital gains, many financial products attempt to package and sell capital gains to investors. For example, many Canadian mutual funds buy and sell investments to earn capital gains, and distribute those capital gains to the owners of the mutual fund. This is no longer an active action taken by the investor, it is simply a function of passive investing. The line between what is a dividend and what is a capital gain has been blurred by these and similar advanced financial products. To the casual investor, there is no practical difference between receiving dividends or capital gain distributions, except for the tax impact. The notional gain realized on the sale of property includes inflation. Consider a rental property bought in 1930 for $100,000, and sold in 1960 for $180,000, assuming inflation between 1930 and 1960 was 70%. In 1960 dollars, the property was effectively bought for 170k. This means the true gain after accounting for inflation is only $10k. But, the notional gain is $80k, meaning a tax on that capital gain would be almost entirely a tax on inflation. This is viewed by many as being unfair, as it does not actually represent true income. I will pause to note that any tax on any investment at all, taxes inflation; interest, for example, is taxed in full even though it can be almost entirely inflationary, depending on economic conditions. A tax on capital gains may restrict market liquidity. A key difference between capital gains and interest/rent/dividends, is that other forms of investment income are taxed annually. If you hold a bond, you get taxed on interest from that bond. You cannot gain value from a bond, deferring tax until the date it matures [at least in Canada, you are deemed to accrue bond interest annually, even if it is a 0 coupon bond]. However, what if interest rates have gone down, increasing the value of your bond, and you want to sell it to invest in a business? You may choose not to do this, to avoid tax on that capital gain. If it were taxed as much as regular income, you might be even more inclined to never sell any asset until you absolutely have to, thus restricting the flow of capital in the market. I will pause here again, to note that laws could be enacted to minimize capital gains tax, as long as the money is reinvested immediately, thus reducing this impact. Political inertia / lobbying from key interests has a significant impact on the tax structure for investments. The fact remains that the capital gains tax is most significantly an impact on those with accrued wealth. It would take significant public support to increase capital gain tax rates, for any political party to enact such laws. When you get right down to it, tax laws are complex, and hard to push in the public eye. The general public barely understands that their effective tax rate is far lower than their top marginal tax rate. Any tax increases at all are often viewed negatively, even by those who would never personally pay any of that tax due to lack of investment income. Therefore such changes are typically made quietly, and with some level of bi-partisan support. If you feel the capital gains tax rules are illogical, just add it to the pile of such tax laws that exist today." }, { "docid": "446633", "title": "", "text": "\"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.\"" }, { "docid": "130388", "title": "", "text": "To avoid risk from rising interest rates, get a fixed rate mortgage. For the life of the mortgage your principal and interest payments will remain the same. Keep in mind that the taxes and insurance portion of your monthly payment may still go up. Because you own the property, the costs to maintain the property are your responsibility. If you rented this would be the responsibility of the owner of the property; if the cost to repair and maintain goes up so does the rent. Because you are the owner your annual costs to repair and maintain may go up over time. The way to eliminate risk of loss of value is to never move, until the mortgage is paid off. You will know exactly what principal and interest will cost you over the life of the loan. When you sell that will be essentially return on your payments. You don't know if the loss of value is due to world, national, regional, local or individual circumstances. so hedging is tough. If the fact that the mortgage is 95% is what makes you nervous, your biggest risk is risk of being upside down. That risk is greatly reduced by increasing the amount of the down payment. That decreases the risk that the value will be below the mortgage amount if due to unforeseen circumstances you have to sell immediately. The money will still be lost due to decrease in value, but you aren't forced to bring cash to the settlement table if you need to sell." }, { "docid": "461435", "title": "", "text": "Well, a proper answer needs a few more details: 1) What's your marginal tax bracket? (A CD is just plain silly for someone in a high tax bracket and in a high tax state) 2) What's your state of residence? 3) Do you have a 401k to draw on for a house loan in case of badly timed volatility? 4) What does will the rest of our investment portfolio look like in case of a sudden rise in interest rates? Depending on the answers to those questions, the mix of investments could be anywhere from: Tell me more about bracket/state/other investment mix and I can suggest something." }, { "docid": "31581", "title": "", "text": "When interest rates rise, the price of bonds fall because bonds have a fixed coupon rate, and since the interest rate has risen, the bond's rate is now lower than what you can get on the market, so it's price falls because it's now less valuable. Bonds diversify your portfolio as they are considered safer than stocks and less volatile. However, they also provide less potential for gains. Although diversification is a good idea, for the individual investor it is far too complicated and incurs too much transaction costs, not to mention that rebalancing would have to be done on a regular basis. In your case where you have mutual funds already, it is probably a good idea to keep investing in mutual funds with a theme which you understand the industry's role in the economy today rather than investing in some special bonds which you cannot relate to. The benefit of having a mutual fund is to have a professional manage your money, and that includes diversification as well so that you don't have to do that." }, { "docid": "362730", "title": "", "text": "Because they believe that negative interest rates will force people to push capital around, and promote investment to avoid the negative interest rates associated with having your cash sitting in an account. Most likely they will be banning cash within the next 10 years anyway which will prevent you from being able to keep it yourself. You will either need to: or" }, { "docid": "539320", "title": "", "text": "There do not appear to be any specific legal measures to prevent bankruptcies. In fact, they seems to be part of the means for which rates are raised, for the consequent aim of lowering inflation. See: The Budgetary Implications of Higher Federal Reserve Board Interest Rates by Dean Baker, Center for Economic and Policy Research. The Federal Reserve Board (Fed) is widely expected to start raising interest rates some time in 2015. The purpose of higher interest rates is to slow the economy and prevent inflation. This is done by reducing the rate of job creation and thereby reducing the ability of workers to achieve wage gains." }, { "docid": "150607", "title": "", "text": "\"In England, currently and for most of the last fifty years, the standard length of the mortgage term is 25 years. A mortgage can be either a capital-and-interest mortgage, or interest-only. In the former, you pay off part of the original loan each month, plus the interest on the amount borrowed. In the latter, you only pay interest each month, and the original amount borrowed never reduces: you pay premiums on a life insurance policy, additionally, which is designed to pay off the original sum borrowed at the end of the 25 years. No one in England thinks that a 25 year loan has any drawbacks. The main point to appreciate is that the longer the period of the loan, the less you need to pay each month, because you are repaying the original loan - the capital - over a longer period of time. Thus, in principle, a mortgage is easier to repay the longer the term is, because the monthly payment is less. If you have a 12 year mortgage, you must pay back the original amount borrowed in half the time: the capital element in your payment each month is double what it would be if repaid over 25 years - i.e. if repaid over a period twice as long. Only if the borrower is less than 25 years away from retirement is a 25 years mortgage seen as a bad idea, by the lender - because, obviously, the lender relies on the borrower having an income sufficient to keep up the repayments. There are many complicating factors: an interest-only mortgage, where you pay back the original amount borrowed from the maturity proceeds from a life policy, puts you in a situation where the original capital sum never reduces, so you always pay the same each month. But on a straight repayment mortgage, the traditional type, you pay less and less each month as time goes by, for you are reducing the capital outstanding each month, and because that is reducing so is the amount of interest you pay each month (as this is calculated on the outstanding capital amount). There are snags to avoid, if you can. For example, some mortgage contracts impose penalties if the borrower repays more than the due monthly amount, hence in effect the borrower faces a - possibly heavy - financial penalty for early repayment of the loan. But not all mortgages include such a condition. If house prices are on a rising trend, the market value of the property will soon be worth considerably more than the amount owed on the mortgage, especially where the mortgage debt is reducing every month, as each repayment is made; so the bank or other lender will not be worried about lending over a 25 year term, because if it forecloses there should normally be no difficulty in recovering the outstanding amount from the sale proceeds. If the borrower falls behind on the repayments, or house prices fall, he may soon get into difficulties; but this could happen to anyone - it is not a particular problem of a 25 year term. Where a default in repayment occurs, the bank will often suggest lengthening the mortgage term, from 25 years to 30 years, in order to reduce the amount of the monthly repayment, as a means of helping the borrower. So longer terms than 25 years are in fact a positive solution in a case of financial difficulty. Of course, the longer the term the greater the amount that the borrower will pay in total. But the longer the term, the less he will pay each month - at least on a traditional capital-and-interest mortgage. So it is a question of balancing those two competing factors. As long as you do not have a mortgage condition that penalises the borrower for paying off the loan more quickly, it can make sense to have as long a term as possible, to begin with, which can be shortened by increasing the monthly repayment as fast as circumstances allow. In England, we used to have tax relief on mortgage payments, and so in times gone by it did make sense to let the mortgage run the full 25 years, in order to get maximum tax relief - the rules were very complex, but it tended to maximise your tax relief by paying over the longest possible period. But today, with no income tax relief given on mortgage payments, that is no longer a consideration in this country. The practical position is, of course, that you can never tell how long it might take you to pay off a mortgage. It is a gamble as to whether your income will rise in future years, and whether your job will last until your mortgage is paid off. You might fall ill, you might be made redundant, you might be demoted. Mortgage interest rates might rise. It is never possible to say that you \"\"can\"\" pay off the loan in a short time. If you hope to do so, the only matters that actually fall within your control are the conditions of the mortgage contract itself. Get a good lawyer. Tell him to watch out for early-redemption penalties. Get a good financial adviser. Tell him to work out what you will need to pay in additional premiums on your life policy if you are considering taking an interest-only mortgage. Try to fix your mortgage rate in the first few years, for as long as possible, so that in your most vulnerable period, with the greatest amount owing, you are insulated against unexpected interest rate fluctuations. Only the initial conditions can be controlled, so it might be prudent to take as long a term as possible, even though a prudent borrower will leave himself room to reduce that term, and a prudent lender will leave room to extend it, in case of unpredictable changes in the financial circumstances. In England, most lenders are, in my experience, reluctant to grant mortgages for less than 25 years. That is simply a policy. Rightly or wrongly, the borrower usually has no choice about the length of the mortgbage term. Hence, in the UK it can be difficult to find a choice of interest rates based on differing mortgage terms. I am aware that the situation in the USA is rather different, but if I personally were faced with the choice I would be uncomfortable about taking on a short term mortgage, because of the factors I have outlined above.\"" }, { "docid": "401952", "title": "", "text": "\"In general, yes. If interest rates go higher, then any existing fixed-rate bonds - and hence ETFs holding those bonds - become less valuable. The further each bond is from maturity, the larger the impact. As you suggest, once the bonds do mature, the fund can replace them at a market price, so the effect tails off. The bond market has a concept known as \"\"duration\"\" that helps reason about this effect. Roughly, it measures the average time from now to each payout of the bond, weighted by the payout. The longer the duration, the more the price will change for a given change in interest rates. The concept is just an approximation, and there are various slightly different ways of calculating it; but very roughly the price of a bond will reduce by a percentage equal to the duration times the increase in interest rates. So a bond with a duration of 5 years will lose 5% of its value for a 1% rise in interest rates (and of course vice-versa). For your second question, it really depends on what you're trying to achieve by diversifying - this might be best as a different question that gives more detail, as it's not very related to your first question. Short-term bonds are less risky. But both will lose value if the underlying company is in trouble. Gilts (government bonds) are less risky than corporate bonds.\"" }, { "docid": "103830", "title": "", "text": "Nobody can predict the affects of Brexit but it is wise to consider them. We saw the pound weaken after the vote to leave and it is possible the pound will weaken further after Brexit and this devaluation could be quite dramatic. If that happens it is likely to increase inflation, UK inflation has gone from under 1% around the time of the referendum to 3% today and it could well go higher. https://www.rateinflation.com/inflation-rate/uk-historical-inflation-rate If inflation continues to increase, the Bank of England is likely to put up interest rates, as it has historically done this to hedge against inflation. We have been living in a world of artificially low interest rates since the global crash of 2008 as the BoE has tried to stimulate recovery with lower rates. The rates cannot continue at this level if inflation starts to rise. http://www.thisismoney.co.uk/money/news/article-2387744/Base-rate-vs-inflation-chart-How-tell-things-really-got-better.html That in turn will put up mortgage rates. So for example if you have a £100k mortgage at 3.92% (currently this is a reasonable rate to have) your repayments will be £523 a month. If your mortgage rate goes up to say 7% then your repayments are £707 a month, if it goes up to 10% then it's £909 a month and so on. There is a mortgage calculator you can use to try playing with different amounts here: https://www.moneysavingexpert.com/mortgages/mortgage-rate-calculator My advice would therefore be try to get as small a mortgage as you can and make sure you can afford it quite comfortably, in case rates go up and you need to find a few hundred pounds a month extra. There are other risks from Brexit as well, house prices could fall as people decide not to buy properties due to excessive interest rates! Overall nobody knows what will happen but it is good to be planning ahead for all eventualities. ** I am not a financial advisor, this advice is given in good faith but with no financial qualification." }, { "docid": "460755", "title": "", "text": "From Indian context, there are a number of factors that are influencing the economic condition and the exchange rate, interest rate etc. are reflection of the situation. I shall try and answer the question through the above Indian example. India is running a budget deficit of 4 odd % for last 6-7 years, which means that gov.in is spending more than their revenue collection, this money is not in the system, so the govt. has to print the money, either the direct 4% or the interest it has to pay on the money it borrows to cover the 4% (don't confuse this with US printing post 2008). After printing, the supply of INR is more compared to USD in the market (INR is current A/C convertible), value of INR w.r.t. USD falls (in simplistic terms). There is another impact of this printing, it increases the money supply in domestic market leading to inflation and overall price rise. To contain this price rise, Reserve Bank of India (RBI) increases the interest rates and increases Compulsory Reserve Ratio (CRR), thus trying to pull/lock-up money, so that overall money supply decreases, but there is a limit to which RBI can do this as overall growth rate keeps falling as money is more expensive to borrow to invest. The above (in simplistic term) how this is working. However, there are many factors in economy and the above should be treated as it is intended to, a simplistic view only." }, { "docid": "69184", "title": "", "text": "\"One alternative to bogleheadism is the permanent portfolio concept (do NOT buy the mutual fund behind this idea as you can easily obtain access to a low cost money market fund, stock index fund, and bond fund and significantly reduce the overall cost). It doesn't have the huge booms that stock plans do, but it also doesn't have the crushing blows either. One thing some advisers mention is success is more about what you can stick to than what \"\"traditionally\"\" makes sense, as you may not be able to stick to what traditionally makes sense (all people differ). This is an excellent pro and con critique of the permanent portfolio (read the whole thing) that does highlight some of the concerns with it, especially the big one: how well will it do in a world of high interest rates? Assuming we ever see a world of high interest rates, it may not provide a great return. The authors make the assumption that interest rates will be rising in the future, thus the permanent portfolio is riskier than a traditional 60/40. As we're seeing in Europe, I think we're headed for a world of negative interest rates - something in the past most advisers have thought was very unlikely. I don't know if we'll see interest rates above 6% in my lifetime and if I live as long as my father, that's a good 60+ years ahead. (I realize people will think this is crazy to write, but consider that people are willing to pay governments money to hold their cash - that's how crazy our world is and I don't see this changing.)\"" }, { "docid": "32744", "title": "", "text": "You are not missing something basic. Putting money in the bank will cost you in terms of purchasing power. The same thing has been true in the US and other places for a long time now. The real interest rate is negative--there is too much aggregate wealth being saved compared to the number of profitable lending opportunities. That means any truly risk-free investment will not make as much money as you will lose to inflation. If the real interest rate appears to be positive in your home country it means one of the following is happening: Capital controls or other barriers are preventing foreigners from investing in your home country, keeping the interest rate there artificially high Expected inflation is not being measured very accurately in your home country Inflation is variable and unpredictable in your home country, so investors are demanding high interest rates to compensate for inflation risk. In other words, bank accounts are not risk-free in your home country. If you find any securities that are beating inflation, you can bet they are taking on risk. Investing in risky securities is fine, but just understand that it's not a substitute for a risk-free bank account. Part of every interest rate is compensation for the time-value-of-money and the rest is compensation for risk. At present, the global time-value-of-money is negative." } ]

[ { "docid": "383889", "title": "", "text": "To protect yourself from an increase in interest rates get a fixed rate loan. The loan terms: interest rate, number of payments, monthly payments will be fixed for the loan. Of course if rate for the rest of the market drops during the period of the loan, you may be able to refinance the loan. But if you can't refinance, or won't refinance, the drop in rates for the rest of the market doesn't help you. If you want to be able to have your rate float you can get a variable rate loan. Of course it can float up, or it can float down. So you take that risk. Because of that risk adjustable rate loans start at a lower rate. If the market interest rate drops far enough many people will refinance into a fixed rate loan at a lower rate than they could have gotten at the start. For adjustable rate loans the lender, during the application process, details how the rate is determined. It is pegged to be x% above some national or international interest rate that they don't have any control over. If that base rate moves then your loan rate may move. They also specify how often it will adjust, and the maximum it can adjust between each adjustments and over the entire life of the loan. That rate that starts initially lower than the fixed rate loan is the enticement that many people have to pick an adjustable rate loan. Some do it because they believe they will payoff the loan before the rates get too high, or they will see enough increase in income so they can afford the higher monthly payment if rates rise. If they are wrong about these things they may find themselves in trouble. The terms of the adjustable rate loan still have to follow the terms of the contract: the lender can't change the % offset or the source used to used to set interest rate." } ]

[ { "docid": "292475", "title": "", "text": "When inflation is high or is rising generally interest rates will be raised to reduce people spending their money and slow down the rate of inflation. As interest rates rise people will be less willing to borrow money and more willing to keep their money earning a good interest rate in the bank. People will reduce their spending and invest less into alternative assets but instead put more into their bank savings. When inflation is too low and the economy is starting to slow down generally interest rates will be raised to encourage more spending to restart the economy again. As interest rates drop more will take their saving out of their bank accounts as is starts to earn very little in interest rate and more will be willing to borrow as it becomes cheaper to borrow. People will start spending more and investing their money outside of bank savings." }, { "docid": "552792", "title": "", "text": "\"Aside from the calculations of \"\"how much you save through reducing interest\"\", you have two different types of loan here. The house that is mortgaged is not a wasting asset. You can reasonably expect that in 2045 it will have retained its worth measured in \"\"houses\"\", against the other houses in the same neighbourhood. In money terms, it is likely to be worth more than its current value, if only because of inflation. To judge the real cost or benefit of the mortgage, you need to consider those factors. You didn't say whether the 3.625% is a fixed or variable rate, but you also need to consider how the rate might compare with inflation in the long term. If you have a fixed rate mortgage and inflation rises above 3.625% in future, you are making money from the loan in the long term, not losing what you pay in interest. On the other hand, your car is a wasting asset, and your car loans are just a way of \"\"paying by installments\"\" over the life of the car. If there are no penalties for early repayment, the obvious choice there is to pay off the highest interest rates first. You might also want to consider what happens if you need to \"\"get the $11,000 back\"\" to use for some other (unplanned, or emergency) purpose. If you pay it into your mortgage now, there is no easy way to get it back before 2045. On the other hand, if you pay down your car loans, most likely you now have a car that is worth more than the loans on it. In an emergency, you could sell the car and recover at least some of the $11,000. Of course you should keep enough cash available to cover \"\"normal emergencies\"\" without having to take this sort of action, but \"\"abnormal emergencies\"\" do sometimes happen!\"" }, { "docid": "315974", "title": "", "text": "If you have a 20,000 balance and a 8.75% interest rate, you should be paying between $145 and $150 in interest each month, with the balance going to principal. (0.0875/12=0.007292, and that times 20,000 is 145.83; as interest is compounded daily, it'll be a little higher than that.) If the minimum is below $145, then you are not covering the interest; I suspect that is what is happening here, and they're reporting interest paid that wasn't covered in a prior month (assuming you have some months where you only pay the statement minimum, which is less than the total accrued interest). Assuming you're in the US (or most other western countries), your loan servicer should be explaining the exact amount each payment that goes to principal and interest. I recommend calling them up and finding out exactly why it's not consistent; what should be happening, assuming you pay more than the amount of interest each month, is the interest should go down (very) slowly each month and the amount paying off principal should go up (also slowly). EG: Etc., until eventually the interest is zero and your loan is paid off. It probably won't go this quickly for this size of loan - you're only paying off a tiny percentage of principal each month, $50/$20000 or 1/400th - so you won't make too much headway at this rate. Even adding another $25 would make a huge difference to the length of the loan and the amount of interest paid, but that's another story. You will eventually at this rate pay off the loan (at $200 a month for all 12 months); this isn't dissimilar to a 30 year mortgage in terms of percent interest to principal (in fact, it's better!). $50 a month times twelve is $600; 400 payments would take care of it (so a bit over 30 years). However, as you go you pay more principal and less interest, so you will actually pay it off in 15 years if you continue paying $200 a month exactly. What you may be seeing in your case is a combination of things: In months you pay less (ie, $100, say), the extra $45 in interest needs to go somewhere. It effectively becomes part of the principal, but from what I've seen that doesn't always happen directly - ie, they account it differently at least for a short time (up to a year, in my experience). This is because of tax laws, if I understand correctly - the amount you pay in interest is tax-deductible, but not the amount of the principal - so it's important for you to have as much called 'interest' as possible. Thus, if you pay $100 this month and $200 next month, that total of $300 is paying ~$290 of interest and $10 of principal, just as if you'd paid it $150 each month. If you had any penalties, such as for late payments, those come out off the top before interest; they may sometimes take that out as well. All in all, I strongly suggest having an enforced minimum (on your end) of the interest amount at least; that prevents you from being in a situation where your loan grows. If you can't always hit $200, that's fine; but at least hit $150 every single month. Otherwise you have a never ending cycle of student loan debt that you really don't want to be in. Separately, on the $1000 payment: As long as you make sure it's not assigned in such a way that the lender only accepts a month's worth at a time (which shouldn't happen, but there are shady lenders), it shouldn't matter what is called 'principal' and what is called 'interest'. The interest won't go up just because you're making a separate payment (it'll go down!). The portion that goes to interest will go to paying off the amount of interest you owe from the time of your last payment, plus any accrued but unpaid interest, plus principal. You won't have the option of not paying that interest, and it doesn't really matter anyway - it's all something you owe and all accruing interest, it only really matters for accounting and taxes. Double check with your lender (on the phone AND on their website, if possible) that overpayments are not penalized and are applied to principal immediately (or within a few days anyway) and you should be fine." }, { "docid": "577578", "title": "", "text": "\"The federal funds rate is one of the risk-free short-term rates in the economy. We often think of fixed income securities as paying this rate plus some premia associated with risk. For a treasury security, we can think this way: (interest rate) = (fed funds rate) + (term premium) The term premium is a bit extra the bond pays because if you hold a long term bond, you are exposed to interest rate risk, which is the risk that rates will generally rise after you buy, making your bond worth less. The relation is more complex if people have expectations of future rate moves, but this is the general idea. Anyway, generally speaking, longer term bonds are exposed to more interest rate risk, so they pay more, on average. For a corporate bond, we think this way: (interest rate) = (fed funds rate) + (term premium) + (default premium) where the default premium is some extra that the bond must pay to compensate the holder for default risk, which is the risk that the bond defaults or loses value as the company's prospects fall. You can see that corporate and government bonds are affected the same way (approximately, this is all hand-waving) by changes in the fed funds rate. Now, that all refers to the rates on new bonds. After a bond is issued, its value falls if rates rise because new bonds are relatively more attractive. Its value rises if rates on new bonds falls. So if there is an unexpected rise in the fed funds rate and you are holding a bond, you will be sad, especially if it is a long term bond (doesn't matter if it's corporate or government). Ask yourself, though, whether an increase in fed funds will be unexpected at this point. If the increase was expected, it will already be priced in. Are you more of an expert than the folks on wall-street at predicting interest rate changes? If not, it might not make sense to make decisions based on your belief about where rates are going. Just saying. Brick points out that treasuries are tax advantaged. That is, you don't have to pay state income tax on them (but you do pay federal). If you live in a state where this is true, this may matter to you a little bit. They also pay unnaturally little because they are convenient for use as a cash substitute in transactions and margining (\"\"convenience yield\"\"). In general, treasuries just don't pay much. Young folk like you tend to buy corporate bonds instead, so they can make money on the default and term premia.\"" }, { "docid": "327432", "title": "", "text": "\"You are correct that it could refer to any of the types of interest rates that you've mentioned. In general, though, phrases such as \"\"rising interest rates\"\" and \"\"falling interest rates\"\" refer to the Federal Funds Rate or LIBOR. These are the interest rates at which banks in the U.S. and U.K., respectively, are lending money to each other.\"" }, { "docid": "65461", "title": "", "text": "First, let me fill in the gaps on your situation, based on the numbers you've given so far. I estimate that your student loan balance (principal) is $21,600. With the variable rate loan option that you've presented, the maximum interest rate you could be charged would be 11.5%, which would bring your monthly payment up to that $382 number you gave in the comments. Your thoughts are correct about the advantage to paying this loan off sooner. If you are planning on paying off this loan sooner, the interest rate on the variable rate loan has less opportunity to climb. One thing to be cautious of with the comparison, though: The $1200 difference between the two options is only valid if your rate does not increase. If the rate does increase, of course, the difference would be less, or it could even go the other way. So keep in mind that the $1200 savings is only a theoretical maximum; you won't actually see that much savings with the variable rate option. Before making a decision, you need to find out more about the terms of this variable rate loan: How often can your rate go up? What is the loan rate based on? I'm not as familiar with student loan variable rate loans, but there are other variable rate loans I am familiar with: With a typical adjustable rate home mortgage, the rate is locked for a certain number of years (perhaps 5 years). After that, the bank might be allowed to raise the rate once every period of months (perhaps once every year). There will be a limit to how much the rate can rise on each increase (perhaps 1.0%), and there will be a maximum rate that could be charged over the life of the loan (perhaps 12%). The interest rate on your mortgage can adjust up, inside of those parameters. (The actual formula used to adjust will be found in the fine print of your mortgage contract.) However, the bank knows that if they let your rate get too high above the current market rates, you will refinance to a different bank. So the mortgage is typically structured so that it will raise your rate somewhat, but it won't usually get too far above the market rate. If you knew ahead of time that you would have the house paid off in 5 years, or that you would be selling the house before the 5 years is over, you could confidently take the adjustable rate mortgage. Credit cards, on the other hand, also typically have variable rates. These rates can change every month, but they are usually calculated on some formula determined ahead of time. For example, on my credit card, the interest rate is the published Prime Rate plus 13.65%. On my last statement, it said the rate was 17.15%. (Of course, because I pay my balance in full each month, I don't pay any interest. The rate could go up to 50%, for all I care.) As I said, I don't know what determines the rate on your variable rate student loan option, and I don't know what the limits are. If it climbs up to 11.5%, that is obviously ridiculously high. I recommend that you try to pay off this student loan as soon as you possibly can; however, if you are not planning on paying off this student loan early, you need to try to determine how likely the rate is to climb if you want to pick the variable rate option." }, { "docid": "544020", "title": "", "text": "When the inflation rate increases, this tends to push up interest rates because of supply and demand: If the interest rate is less than the inflation rate, then putting your money in the bank means that you are losing value every day that it is there. So there's an incentive to withdraw your money and spend it now. If, say, I'm planning to buy a car, and my savings are declining in real value, then if I buy a car today I can get a better car than if I wait until tomorrow. When interest rates are high compared to inflation, the reverse is true. My savings are increasing in value, so the longer I leave my money in the bank the more it's worth. If I wait until tomorrow to buy a car I can get a better car than I would be able to buy today. Also, people find alternative places to keep their savings. If a savings account will result in me losing value every day my money is there, then maybe I'll put the money in the stock market or buy gold or whatever. So for the banks to continue to get enough money to make loans, they have to increase the interest rates they pay to lure customers back to the bank. There is no reason per se for rising interest rates to consumers to directly cause an increase in the inflation rate. Inflation is caused by the money supply growing faster than the amount of goods and services produced. Interest rates are a cost. If interest rates go up, people will borrow less money and spend it on other things, but that has no direct effect on the total money supply. Except ... you may note I put a bunch of qualifiers in that paragraph. In the United States, the Federal Reserve loans money to banks. It creates this money out of thin air. So when the interest that the Federal Reserve charges to the banks is low, the banks will borrow more from the Feds. As this money is created on the spot, this adds to the money supply, and thus contributes to inflation. So if interest rates to consumers are low, this encourages people to borrow more money from the banks, which encourages the banks to borrow more from the Feds, which increases the money supply, which increases inflation. I don't know much about how it works in other countries, but I think it's similar in most nations." }, { "docid": "265477", "title": "", "text": "\"It depends on what your plans for the future are.. Taking out a loan is not a bad thing if it is at a good rate and under good terms and you are sure you can handle the payments. If you buy the car with cash you may be giving up the opportunity to later get a great rate on that $8k. However, you are probably not utilizing that $20k to make as much interest as you'd then be paying if you did take the $8k on loan. Since you say \"\"house fund\"\" I assume you are saving to make a down payment on a new house. If you plan to buy that house within the next 6 months the hard pulls on your credit report from applying for the car loan will probably ding your credit score for the next 6 months which might cost you on your mortgage rate. However, if you don't plan to buy for a few more years and if you've never had a car payment before then the auto loan would actually be adding diversity to your credit history and in the long run would help your score. Another factor to consider is the loan-to-value ratio you are shooting for. LTV affects the interest rate, requirements for private mortgage insurance, etc.. Mortgage rates are at an all-time low and lower than auto-rates, so depending on the terms of the house purchase that $8k might be better spent on the car than the house. In short, if you want to buy the house soon (rates are loooow, market is a buyer's market), and you need that $8k to get a better mortgage rate or prevent you from being required to buy PMI you should probably put it toward the house. Otherwise you should probably put it toward the car. Last piece of advice. If you absolutely must buy a house and a car in the same short time-frame, do them both on the same day so that your credit score is not dinged before applying for one or the other. With mortgages this may be difficult considering the longer closing procedures, but try to time it so that your credit is getting checked by the mortgage broker and the auto lender on the same day.\"" }, { "docid": "360199", "title": "", "text": "In general, prices are inversely proportional to rates; however, accurate interest rate prediction would make one worthy of managing a large credit derivative hedge fund. This is not to say that interest rates cannot go up in Canada since the world is currently undergoing a resource bust, and the United States has begun exporting more oil, even trying to recently open the market to Europe, both of which Canada is relatively dependent upon. Also, to say that Canada currently has the most overpriced real estate is an oversight to say the least considering China currently has entire cities that are empty because prices are too high. A ten to twenty percent drop in real estate prices would probably be a full blown financial crisis, and since mortgage rates are currently around 2.5%, a one to two hundred basis point rise could mean a nearly 50% decrease in real estate prices if interest payments are held constant. Canada would either have to start growing its economy at a much higher rate to encourage the central bank to raise rates to such a height, or oil would have to completely collapse suddenly to cause a speculatively possible collapse of CAD to encourage the same. The easiest relationship to manipulate between prices and rates is the perpetuity: where p is the price, i is the interest payment, and r is the interest rate. In this case, an increase of r from 2.5% to 4.5% would cause a 44.5% decrease in p if i is held constant. However, typical Canadian mortgages seem to mature in ten years at a fixed rate, so i cannot be held constant, and the relationship between r and p is less strong at earlier maturities, thus the most likely way for prices to collapse is for a financial collapse as described above." }, { "docid": "183531", "title": "", "text": "The literal answer to your question 'what determines the price of an ETF' is 'the market'; it is whatever price a buyer is willing to pay and a seller is willing to accept. But if the market price of an ETF share deviates significantly from its NAV, the per-share market value of the securities in its portfolio, then an Authorized Participant can make an arbitrage profit by a transaction (creation or redemption) that pushes the market price toward NAV. Thus as long as the markets are operating and the APs don't vanish in a puff of smoke we can expect price will track NAV. That reduces your question to: why does NAV = market value of the holdings underlying a bond ETF share decrease when the market interest rate rises? Let's consider an example. I'll use US Treasuries because they have very active markets, are treated as risk-free (although that can be debated), and excluding special cases like TIPS and strips are almost perfectly fungible. And I use round numbers for convenience. Let's assume the current market interest rate is 2% and 'Spindoctor 10-year Treasury Fund' opens for business with $100m invested (via APs) in 10-year T-notes with 2% coupon at par and 1m shares issued that are worth $100 each. Now assume the interest rate goes up to 3% (this is an example NOT A PREDICTION); no one wants to pay par for a 2% bond when they can get 3% elsewhere, so its value goes down to about 0.9 of par (not exactly due to the way the arithmetic works but close enough) and Spindoctor shares similarly slide to $90. At this price an investor gets slightly over 2% (coupon*face/basis) plus approximately 1% amortized capital gain (slightly less due to time value) per year so it's competitive with a 3% coupon at par. As you say new bonds are available that pay 3%. But our fund doesn't hold them; we hold old bonds with a face value of $100m but a market value of only $90m. If we sell those bonds now and buy 3% bonds to (try to) replace them, we only get $90m par value of 3% bonds, so now our fund is paying a competitive 3% but NAV is still only $90. At the other extreme, say we hold the 2% bonds to maturity, paying out only 2% interest but letting our NAV increase as the remaining term (duration) and thus discount of the bonds decreases -- assuming the market interest rate doesn't change again, which for 10 years is probably unrealistic (ignoring 2009-2016!). At the end of 10 years the 2% bonds are redeemed at par and our NAV is back to $100 -- but from the investor's point of view they've forgone $10 in interest they could have received from an alternative investment over those 10 years, which is effectively an additional investment, so the original share price of $90 was correct." }, { "docid": "327556", "title": "", "text": "\"You are asking multiple questions here, pieces of which may have been addressed in other questions. A bond (I'm using US Government bonds in this example, and making the 'zero risk of default' assumption) will be priced based on today's interest rate. This is true whether it's a 10% bond with 10 years left (say rates were 10% on the 30 yr bond 20 years ago) a 2% bond with 10 years, or a new 3% 10 year bond. The rate I use above is the 'coupon' rate, i.e. the amount the bond will pay each year in interest. What's the same for each bond is called the \"\"Yield to Maturity.\"\" The price adjusts, by the market, so the return over the next ten years is the same. A bond fund simply contains a mix of bonds, but in aggregate, has a yield as well as a duration, the time-and-interest-weighted maturity. When rates rise, the bond fund will drop in value based on this factor (duration). Does this begin to answer your question?\"" }, { "docid": "108486", "title": "", "text": "\"Note: I am making a USA-assumption here; keep in mind this answer doesn't necessarily apply to all countries (or even states in the USA). You asked two questions: I'm looking to buy a property. I do not want to take a risk on this property. Its sole purpose is to provide me with a place to live. How would I go about hedging against increasing interest rates, to counter the increasing mortgage costs? To counter increasing interest rates, obtaining a fixed interest rate on a mortgage is the answer, if that's available. As far as costs for a mortgage, that depends, as mortgages are tied to the value of the property/home. If you want a place to live, a piece of property, and want to hedge against possible rising interest rates, a fixed mortgage would work for these goals. Ideally I'd like to not lose money on my property, seeing as I will be borrowing 95% of the property's value. So, I'd like to hedge against interest rates and falling property prices in order to have a risk neutral position on my property. Now we have a different issue. For instance, if someone had opened a fixed mortgage on a home for $500,000, and the housing value plummeted 50% (or more), the person may still have a fixed interest rate protecting the person from higher rates, but that doesn't protect the property value. In addition to that, if the person needed to move for a job, that person would face a difficult choice: move and sell at a loss, or move and rent and face some complications. Renting is generally a good idea for people who (1) have not determined if they'll be in an area for more than 5-10 years, (2) want the flexibility to move if their living costs rises (which may be an issue if they lose wages), (3) don't want to pay property taxes (varies by state), homeowner's insurance, or maintenance costs, (4) enjoy regular negotiation (something which renters can do before re-signing a lease or looking for a new place to live). Again, other conditions can apply to people who favor renting, such as someone might enjoy living in one room out of a house rather than a full apartment or a person who likes a \"\"change of scenes\"\" and moves from one apartment to another for a fresh perspective, but these are smaller exceptions. But with renting, you have nothing to re-sell and no financial asset so far as a property is concerned (thus why some real estate agents refer to it as \"\"throwing away money\"\" which isn't necessarily true, but one should be aware that the money they invest in renting doesn't go into an asset that can be re-sold).\"" }, { "docid": "461435", "title": "", "text": "Well, a proper answer needs a few more details: 1) What's your marginal tax bracket? (A CD is just plain silly for someone in a high tax bracket and in a high tax state) 2) What's your state of residence? 3) Do you have a 401k to draw on for a house loan in case of badly timed volatility? 4) What does will the rest of our investment portfolio look like in case of a sudden rise in interest rates? Depending on the answers to those questions, the mix of investments could be anywhere from: Tell me more about bracket/state/other investment mix and I can suggest something." }, { "docid": "599499", "title": "", "text": "This is more of an interesting question then it looks on first sight. In the USA there are some tax reliefs for mortgage payments, which we don’t have in the UK unless you are renting out the property with the mortgage. So firstly work out the interest rate on each loan taking into account any tax reliefs, etc. Then you need to consider the charges for paying off a loan, for example often there is a charge if you pay off a mortgage. These days in the UK, most mortgagees allow you to pay off at least 10% a year without hitting such a charge – but check your mortgage offer document. How interest is calculated when you make an early payment may be different between your loans – so check. Then you need to consider what will happen if you need another loan. Some mortgages allow you to take back any overpayments, most don’t. Re-mortgaging to increase the size of your mortgage often has high charges. Then there is the effect on your credit rating: paying more of a loan each month then you need to, often improves your credit rating. You also need to consider how interest rates may change, for example if you mortgage is a fixed rate but your car loan is not and you expect interest rates to rise, do the calculations based on what you expect interest rates to be over the length of the loans. However, normally it is best to pay off the loan with the highest interest rate first. Reasons for penalties for paying of some loans in the UK. In the UK some short term loans (normally under 3 years) add on all the interest at the start of the loan, so you don’t save any interest if you pay of the loan quicker. This is due to the banks having to cover their admin costs, and there being no admin charge to take out the loan. Fixed rate loans/mortgagees have penalties for overpayment, as otherwise when interest rates go down, people will change to other lenders, so making it a “one way bet” that the banks will always loose. (I believe in the USA, the central bank will under right such loans, so the banks don’t take the risk.)" }, { "docid": "388391", "title": "", "text": "\"So \"\"Operation Twist\"\" is actually a pretty simple concept. Here's the break down: The Fed sells short-term treasury bonds that it already holds on its books. Short-term treasury bonds refer to - bonds that mature in less than three years. Then: Uses that money to buy long term treasury bonds. Long-term treasury bonds refer to - bonds that mature in six to 30 years The reason: The fed buys these longer-term treasuries to lower longer-term interest rates and encourage more borrowing and spending. Diving deeper into how it works: So the Fed can easily determine short-term rates by using the Federal funds rate this rate has a direct effect on the following: However this does not play a direct role in influencing the rate of long-term loans (what you might pay on a 30-year fixed mortgage). Instead, long-term rates are determined by investors who buy and sell bonds in the bond market, which changes daily. These bond yields fluctuate depending on the health of the economy and inflation. However, the Fed funds rate does play an indirect role in these rates. So now that we know a little more about what effects what rate, why does lower long-term rates in treasuries influence my 30yr fixed mortgage? Well when you are looking for a loan you are entering a market and competing against other people, by people I mean anyone looking for money (e.g: my grandmother, companies, or the US government). The bank that lends you money has to decide weather the deal you are offering them is better then another deal on the market. If the risk of lending to one person is the same as the risk of lending to another, the bank will make whichever loan yields the higher interest rate. The U.S. government is considered a very safe borrower, so much so that government bonds are considered almost “risk free”, but because of the lower risk the rate of return is lower. So now the bank has to factor in this risk and make its decision weather to lend you money, or the government. So, if the government were to go to the market and buy its own long-term bonds it is adding demand in the market causing the price of the bond to rise in effect lowering the interest rate (when price goes up, yield goes down). So when you go back and ask for a loan it has to re-evaluate and decide \"\"Is it worth giving this money to Joe McFreeBeer instead and collecting a higher yield?\"\" (After all, Joe McFreeBeer is a nice guy). Here's an example: Lets say the US has a rating of 10 out of 10 and its bonds pay a 2% yield. Now lets say for each lower mark in rating the bank will lend at a minimum of 1% higher and your rating is 8 of 10. So if you go to market, the lowest rate you can get will be 4%. Now lets say price rises on the US treasury and causes the rate to go down by 1%. In this scenario you will now be able to get a loan for 3% and someone with a rating of 7 of 10 would be able to get that 4% loan. Here's some more info and explinations: Why is the Government Buying Long-Term Bonds? What Is 'Operation Twist'? A Q&A on US Fed Program Federal Reserve for Beginners Federal Open Market Committee\"" }, { "docid": "531758", "title": "", "text": "In the scenario where interest rates rise to anything like normal, interest payments on the debt will quickly explode to be a huge portion of the budget, forcing deep cuts in other areas. Holding interest rates near zero forever just isn't sustainable." }, { "docid": "393925", "title": "", "text": "Many of the major indices retreated today because of this news. Why? How do the rising budget deficits and debt relate to the stock markets? It does seem strange that there is a correlation between government debt and the stock market. But I could see many reasons for the reaction. The downgrade by S&P may make it more expensive for the government to borrow money (i.e. higher interest rates). This means it becomes more expensive for the government to borrow money and the government will probably need to raise taxes to cover the cost of borrowing. Rising taxes are not good for business. Also, many banks in the US hold US government debt. Rising yields will push down the value of their holdings which in turn will reduce the value of US debt on the businesses' balance sheets. This weakens the banks' balance sheets. They may even start to unload US bonds. Why is there such a large emphasis on the S&P rating? I don't know. I think they have proven they are practically useless. That's just my opinion. Many, though, still think they are a credible ratings agency. What happens when the debt ceiling is reached? Theoretically the government has to stop borrowing money once the debt ceiling is reached. If this occurs and the government does not raise the debt ceiling then the government faces three choices:" }, { "docid": "141565", "title": "", "text": "\"Bingo, great question. I'm not the original poster, \"\"otherwiseyep\"\", but I am in the economics field (I'm a currency analyst for a Forex broker). I also happen to strongly disagree with his posts on the origin of money. To answer your question: the villagers are forced to use the new notes by their government, which demands that their income taxes be paid with the new currency. This is glossed over by otherwiseyep, which is unfortunate because it misleads people who are new to economics into believing the system of fiat money we have now is natural/emergent (created from the bottom-up) and not enforced from the top-down. Legal tender laws enforced in each nation's courts mean that all contracts can be settled in the local fiat currency, regardless of whether the receiver of the money wants a different currency. These laws (and the income tax) create an artificial \"\"root demand\"\" for the fiat currency, which is what gives it its value. We don't just *decide* that green paper has value. We are forced to accumulate it by the government. Fiat currencies are not money. We call them money, but in fact they are credit derivatives. Let me explain: A currency's value is inextricably tied to the nation's bond market. When investors buy a nation's bonds, they are loaning that nation money. The investor expects to receive interest payments on the bonds. The interest rate naturally rises as the bonds are perceived to be more-risky, and naturally falls as the bonds are perceived to be less-risky. The risk comes from the fact that governments sometimes get really close to not being able to pay their interest payments. They get into so much debt, and their tax-revenue shrinks as their economy worsens. That drives up the interest rate they must pay when they issue new bonds (ie add debt). So the value of a currency comes from tax revenue (interest payments). If a government misses an interest payment, or doesn't fully pay it, the market considers this a \"\"credit event\"\" and investors sell their bonds and freak out. Selling bonds has the effect of driving interest rates even higher, so it's a vicious cycle. If the government defaults, there's massive deflation because all debt denominated in that currency suddenly skyrockets due to the higher interest rates. This creates a chain of cascading defaults - one person defaults, which leads another person, and another, and so on. Everyone was in debt to everyone else, somewhere along the chain. In order to counteract this deflation (which ultimately leads to the kind of depression you saw in 1930's US), governments will print print print, expanding the credit supply via the banks. So this is what you see happening today - banks are constantly being bailed out all over the Western world, governments are cutting programs to be able to meet their interest payments, and central banks are expanding credit supplies and bailing out their buddies. Real money has ZERO counterparty risk. What is counterparty risk? It's just the risk that the guy who owes you something won't honor his debt. Gold and silver and salt and oil aren't IOU's. So they can be real money.\"" }, { "docid": "150607", "title": "", "text": "\"In England, currently and for most of the last fifty years, the standard length of the mortgage term is 25 years. A mortgage can be either a capital-and-interest mortgage, or interest-only. In the former, you pay off part of the original loan each month, plus the interest on the amount borrowed. In the latter, you only pay interest each month, and the original amount borrowed never reduces: you pay premiums on a life insurance policy, additionally, which is designed to pay off the original sum borrowed at the end of the 25 years. No one in England thinks that a 25 year loan has any drawbacks. The main point to appreciate is that the longer the period of the loan, the less you need to pay each month, because you are repaying the original loan - the capital - over a longer period of time. Thus, in principle, a mortgage is easier to repay the longer the term is, because the monthly payment is less. If you have a 12 year mortgage, you must pay back the original amount borrowed in half the time: the capital element in your payment each month is double what it would be if repaid over 25 years - i.e. if repaid over a period twice as long. Only if the borrower is less than 25 years away from retirement is a 25 years mortgage seen as a bad idea, by the lender - because, obviously, the lender relies on the borrower having an income sufficient to keep up the repayments. There are many complicating factors: an interest-only mortgage, where you pay back the original amount borrowed from the maturity proceeds from a life policy, puts you in a situation where the original capital sum never reduces, so you always pay the same each month. But on a straight repayment mortgage, the traditional type, you pay less and less each month as time goes by, for you are reducing the capital outstanding each month, and because that is reducing so is the amount of interest you pay each month (as this is calculated on the outstanding capital amount). There are snags to avoid, if you can. For example, some mortgage contracts impose penalties if the borrower repays more than the due monthly amount, hence in effect the borrower faces a - possibly heavy - financial penalty for early repayment of the loan. But not all mortgages include such a condition. If house prices are on a rising trend, the market value of the property will soon be worth considerably more than the amount owed on the mortgage, especially where the mortgage debt is reducing every month, as each repayment is made; so the bank or other lender will not be worried about lending over a 25 year term, because if it forecloses there should normally be no difficulty in recovering the outstanding amount from the sale proceeds. If the borrower falls behind on the repayments, or house prices fall, he may soon get into difficulties; but this could happen to anyone - it is not a particular problem of a 25 year term. Where a default in repayment occurs, the bank will often suggest lengthening the mortgage term, from 25 years to 30 years, in order to reduce the amount of the monthly repayment, as a means of helping the borrower. So longer terms than 25 years are in fact a positive solution in a case of financial difficulty. Of course, the longer the term the greater the amount that the borrower will pay in total. But the longer the term, the less he will pay each month - at least on a traditional capital-and-interest mortgage. So it is a question of balancing those two competing factors. As long as you do not have a mortgage condition that penalises the borrower for paying off the loan more quickly, it can make sense to have as long a term as possible, to begin with, which can be shortened by increasing the monthly repayment as fast as circumstances allow. In England, we used to have tax relief on mortgage payments, and so in times gone by it did make sense to let the mortgage run the full 25 years, in order to get maximum tax relief - the rules were very complex, but it tended to maximise your tax relief by paying over the longest possible period. But today, with no income tax relief given on mortgage payments, that is no longer a consideration in this country. The practical position is, of course, that you can never tell how long it might take you to pay off a mortgage. It is a gamble as to whether your income will rise in future years, and whether your job will last until your mortgage is paid off. You might fall ill, you might be made redundant, you might be demoted. Mortgage interest rates might rise. It is never possible to say that you \"\"can\"\" pay off the loan in a short time. If you hope to do so, the only matters that actually fall within your control are the conditions of the mortgage contract itself. Get a good lawyer. Tell him to watch out for early-redemption penalties. Get a good financial adviser. Tell him to work out what you will need to pay in additional premiums on your life policy if you are considering taking an interest-only mortgage. Try to fix your mortgage rate in the first few years, for as long as possible, so that in your most vulnerable period, with the greatest amount owing, you are insulated against unexpected interest rate fluctuations. Only the initial conditions can be controlled, so it might be prudent to take as long a term as possible, even though a prudent borrower will leave himself room to reduce that term, and a prudent lender will leave room to extend it, in case of unpredictable changes in the financial circumstances. In England, most lenders are, in my experience, reluctant to grant mortgages for less than 25 years. That is simply a policy. Rightly or wrongly, the borrower usually has no choice about the length of the mortgbage term. Hence, in the UK it can be difficult to find a choice of interest rates based on differing mortgage terms. I am aware that the situation in the USA is rather different, but if I personally were faced with the choice I would be uncomfortable about taking on a short term mortgage, because of the factors I have outlined above.\"" } ]

[ { "docid": "539320", "title": "", "text": "There do not appear to be any specific legal measures to prevent bankruptcies. In fact, they seems to be part of the means for which rates are raised, for the consequent aim of lowering inflation. See: The Budgetary Implications of Higher Federal Reserve Board Interest Rates by Dean Baker, Center for Economic and Policy Research. The Federal Reserve Board (Fed) is widely expected to start raising interest rates some time in 2015. The purpose of higher interest rates is to slow the economy and prevent inflation. This is done by reducing the rate of job creation and thereby reducing the ability of workers to achieve wage gains." } ]

[ { "docid": "544020", "title": "", "text": "When the inflation rate increases, this tends to push up interest rates because of supply and demand: If the interest rate is less than the inflation rate, then putting your money in the bank means that you are losing value every day that it is there. So there's an incentive to withdraw your money and spend it now. If, say, I'm planning to buy a car, and my savings are declining in real value, then if I buy a car today I can get a better car than if I wait until tomorrow. When interest rates are high compared to inflation, the reverse is true. My savings are increasing in value, so the longer I leave my money in the bank the more it's worth. If I wait until tomorrow to buy a car I can get a better car than I would be able to buy today. Also, people find alternative places to keep their savings. If a savings account will result in me losing value every day my money is there, then maybe I'll put the money in the stock market or buy gold or whatever. So for the banks to continue to get enough money to make loans, they have to increase the interest rates they pay to lure customers back to the bank. There is no reason per se for rising interest rates to consumers to directly cause an increase in the inflation rate. Inflation is caused by the money supply growing faster than the amount of goods and services produced. Interest rates are a cost. If interest rates go up, people will borrow less money and spend it on other things, but that has no direct effect on the total money supply. Except ... you may note I put a bunch of qualifiers in that paragraph. In the United States, the Federal Reserve loans money to banks. It creates this money out of thin air. So when the interest that the Federal Reserve charges to the banks is low, the banks will borrow more from the Feds. As this money is created on the spot, this adds to the money supply, and thus contributes to inflation. So if interest rates to consumers are low, this encourages people to borrow more money from the banks, which encourages the banks to borrow more from the Feds, which increases the money supply, which increases inflation. I don't know much about how it works in other countries, but I think it's similar in most nations." }, { "docid": "356669", "title": "", "text": "The financially best choice depends on which has a lower interest rate and what your other debts are. If you have significant other debts with a higher interest rate, it may make good sense to sign up for the longer-term loan and use your extra money to pay those down first. Then pay down your mortgage with large payments. If you don't have significant other debts, then it is likely a good idea to take a shorter term loan because those tend to have lower interest rates. In either case, remember that the required loan payments are the minimum payments. You can always pay more, and in many cases you should. The objective here is to pay as little interest over the course of your life as is feasible. I don't think it makes too much sense to gamble on whether or not interest rates will rise in the future. They may or may not over the life of your loan and you are not in a position to know which. They are low now, so they can be compared to your existing loans usefully. That is enough information to make rational decisions today." }, { "docid": "401818", "title": "", "text": "There are many things that can make a company's share price go up or down. Generally, over the long term, the more consistently profitable a company is the more its share price will go up. However, there are times when a company may not be making any profits yet but its share price still goes up. This can be due to forecasts that the company will start making profits in the near future. Sometimes a company may report increased profits from the previous year but makes less than what the market was expecting it to make. This can cause its share price to fall, as the market is disappointed in the results. In the shorter term greed, fear and speculation can make a company's share price move irrationally. When you think the share price should be going up it suddenly falls, and Vis-versa. When interest rates are low, companies with higher dividend yields (compared to bank account interest rates) become high in demand and their shares generally go up in price. As the share price goes up the dividend yield will be reduced unless the company continues to increase the dividend it distributes to shareholders. When interest rates start to rise these companies become less favourable as they are seen as higher risk comparable to similar returns from having one's money in the safety of the bank. This can cause the share prices to fall. These are just some of the reasons that make a company's share price move up or down. As humans are an irrational bunch often ruled by emotions, sometimes the reasons share prices move in a particular direction can be quite confusing, but that is the nature of the financial markets." }, { "docid": "322049", "title": "", "text": "I think this question is very nearly off-topic for this site, but I also believe that a basic understanding of the why the tax structure is what it is can help someone new to investing to understand their actual tax liability. The attempt at an answer I provide below is from a Canadian & US context, but should be similar to how this is viewed elsewhere in the world. First note that capital gains today are much more fluid in concept than even 100 years ago. When the personal income tax was first introduced [to pay for WWI], a capital gain was viewed as a very deliberate action; the permanent sale of property. Capital gains were not taxed at all initially [in Canada until 1971], under the view that income taxes would have been paid on income-earning assets all along [through interest, dividends, and rent], and therefore taxing capital gains would be a form of 'double-taxation'. This active, permanent sale was also viewed as an action that an investor would need to work for. Therefore it was seen as foolish to prevent investors from taking positive economic action [redistributing their capital in the most effective way], simply to avoid the tax. However today, because of favourable taxation on capital gains, many financial products attempt to package and sell capital gains to investors. For example, many Canadian mutual funds buy and sell investments to earn capital gains, and distribute those capital gains to the owners of the mutual fund. This is no longer an active action taken by the investor, it is simply a function of passive investing. The line between what is a dividend and what is a capital gain has been blurred by these and similar advanced financial products. To the casual investor, there is no practical difference between receiving dividends or capital gain distributions, except for the tax impact. The notional gain realized on the sale of property includes inflation. Consider a rental property bought in 1930 for $100,000, and sold in 1960 for $180,000, assuming inflation between 1930 and 1960 was 70%. In 1960 dollars, the property was effectively bought for 170k. This means the true gain after accounting for inflation is only $10k. But, the notional gain is $80k, meaning a tax on that capital gain would be almost entirely a tax on inflation. This is viewed by many as being unfair, as it does not actually represent true income. I will pause to note that any tax on any investment at all, taxes inflation; interest, for example, is taxed in full even though it can be almost entirely inflationary, depending on economic conditions. A tax on capital gains may restrict market liquidity. A key difference between capital gains and interest/rent/dividends, is that other forms of investment income are taxed annually. If you hold a bond, you get taxed on interest from that bond. You cannot gain value from a bond, deferring tax until the date it matures [at least in Canada, you are deemed to accrue bond interest annually, even if it is a 0 coupon bond]. However, what if interest rates have gone down, increasing the value of your bond, and you want to sell it to invest in a business? You may choose not to do this, to avoid tax on that capital gain. If it were taxed as much as regular income, you might be even more inclined to never sell any asset until you absolutely have to, thus restricting the flow of capital in the market. I will pause here again, to note that laws could be enacted to minimize capital gains tax, as long as the money is reinvested immediately, thus reducing this impact. Political inertia / lobbying from key interests has a significant impact on the tax structure for investments. The fact remains that the capital gains tax is most significantly an impact on those with accrued wealth. It would take significant public support to increase capital gain tax rates, for any political party to enact such laws. When you get right down to it, tax laws are complex, and hard to push in the public eye. The general public barely understands that their effective tax rate is far lower than their top marginal tax rate. Any tax increases at all are often viewed negatively, even by those who would never personally pay any of that tax due to lack of investment income. Therefore such changes are typically made quietly, and with some level of bi-partisan support. If you feel the capital gains tax rules are illogical, just add it to the pile of such tax laws that exist today." }, { "docid": "265477", "title": "", "text": "\"It depends on what your plans for the future are.. Taking out a loan is not a bad thing if it is at a good rate and under good terms and you are sure you can handle the payments. If you buy the car with cash you may be giving up the opportunity to later get a great rate on that $8k. However, you are probably not utilizing that $20k to make as much interest as you'd then be paying if you did take the $8k on loan. Since you say \"\"house fund\"\" I assume you are saving to make a down payment on a new house. If you plan to buy that house within the next 6 months the hard pulls on your credit report from applying for the car loan will probably ding your credit score for the next 6 months which might cost you on your mortgage rate. However, if you don't plan to buy for a few more years and if you've never had a car payment before then the auto loan would actually be adding diversity to your credit history and in the long run would help your score. Another factor to consider is the loan-to-value ratio you are shooting for. LTV affects the interest rate, requirements for private mortgage insurance, etc.. Mortgage rates are at an all-time low and lower than auto-rates, so depending on the terms of the house purchase that $8k might be better spent on the car than the house. In short, if you want to buy the house soon (rates are loooow, market is a buyer's market), and you need that $8k to get a better mortgage rate or prevent you from being required to buy PMI you should probably put it toward the house. Otherwise you should probably put it toward the car. Last piece of advice. If you absolutely must buy a house and a car in the same short time-frame, do them both on the same day so that your credit score is not dinged before applying for one or the other. With mortgages this may be difficult considering the longer closing procedures, but try to time it so that your credit is getting checked by the mortgage broker and the auto lender on the same day.\"" }, { "docid": "460755", "title": "", "text": "From Indian context, there are a number of factors that are influencing the economic condition and the exchange rate, interest rate etc. are reflection of the situation. I shall try and answer the question through the above Indian example. India is running a budget deficit of 4 odd % for last 6-7 years, which means that gov.in is spending more than their revenue collection, this money is not in the system, so the govt. has to print the money, either the direct 4% or the interest it has to pay on the money it borrows to cover the 4% (don't confuse this with US printing post 2008). After printing, the supply of INR is more compared to USD in the market (INR is current A/C convertible), value of INR w.r.t. USD falls (in simplistic terms). There is another impact of this printing, it increases the money supply in domestic market leading to inflation and overall price rise. To contain this price rise, Reserve Bank of India (RBI) increases the interest rates and increases Compulsory Reserve Ratio (CRR), thus trying to pull/lock-up money, so that overall money supply decreases, but there is a limit to which RBI can do this as overall growth rate keeps falling as money is more expensive to borrow to invest. The above (in simplistic term) how this is working. However, there are many factors in economy and the above should be treated as it is intended to, a simplistic view only." }, { "docid": "575241", "title": "", "text": "Part 1 Quite a few [or rather most] countries allow USD account. So there is no conversion. Just to illustrare; In India its allowed to have a USD account. The funds can be transfered as USD and withdrawn as USD, the interest is in USD. There no conversion at any point in time. Typically the rates for CD on USD account was Central Bank regulated rate of 5%, recently this was deregulated, and some banks offer around 7% interest. Why is the rate high on USD in India? - There is a trade deficit which means India gets less USD and has to pay More USD to buy stuff [Oil and other essential items]. - The balance is typically borrowed say from IMF or other countries etc. - Allowing Banks to offer high interest rate is one way to attract more USD into the country in short term. [because somepoint in time they may take back the USD out of India] So why isn't everyone jumping and making USD investiments in India? - The Non-Residents who eventually plan to come back have invested in USD in India. - There is a risk of regulation changes, ie if the Central Bank / Country comes up pressure for Forex Reserves, they may make it difficut to take back the USD. IE they may impose charges / taxes or force conversion on such accounts. - The KYC norms make it difficult for Indian Bank to attract US citizens [except Non Resident Indians] - Certain countries would have explicit regulations to prevent Other Nationals from investing in such products as they may lead to volatility [ie all of them suddenly pull out the funds] - There would be no insurance to foreign nationals. Part 2 The FDIC insurance is not the reason for lower rates. Most countires have similar insurance for Bank deposits for account holdes. The reason for lower interst rate is all the Goverments [China etc] park the excess funds in US Treasuries because; 1. It is safe 2. It is required for any international purchase 3. It is very liquid. Now if the US Fed started giving higher interest rates to tresaury bonds say 5%, it essentially paying more to other countries ... so its keeping the interest rates low even at 1% there are enough people [institutions / governemnts] who would keep the money with US Treasury. So the US Treasury has to make some revenue from the funds kept at it ... it lends at lower interest rates to Bank ... who in turn lend it to borrowers [both corporate and retail]. Now if they can borrow cheaply from Fed, why would they pay more to Individual Retail on CD?, they will pay less; because the lending rates are low as well. Part 3 Check out the regulations" }, { "docid": "362730", "title": "", "text": "Because they believe that negative interest rates will force people to push capital around, and promote investment to avoid the negative interest rates associated with having your cash sitting in an account. Most likely they will be banning cash within the next 10 years anyway which will prevent you from being able to keep it yourself. You will either need to: or" }, { "docid": "327432", "title": "", "text": "\"You are correct that it could refer to any of the types of interest rates that you've mentioned. In general, though, phrases such as \"\"rising interest rates\"\" and \"\"falling interest rates\"\" refer to the Federal Funds Rate or LIBOR. These are the interest rates at which banks in the U.S. and U.K., respectively, are lending money to each other.\"" }, { "docid": "261407", "title": "", "text": "Whether or not Uber/Lyft are taxi services only matters to determine if they need to follow taxi regulations, which are meant to protect customers. From looking at Uber and Lyft's performance, however, they provide better service at a better price than taxis, so what are those regulations actually protecting us from? This isn't about these guys trying to get around the law anymore, the business model has been shown to be highly effective, and the laws need to be changed to allow for this new model that benefits consumers more than what we had before. The hurdle now is that the taxi companies have an interest in keeping the barrier to entry high to prevent competition, and that means preventing Uber and Lyft from getting around those barriers." }, { "docid": "141565", "title": "", "text": "\"Bingo, great question. I'm not the original poster, \"\"otherwiseyep\"\", but I am in the economics field (I'm a currency analyst for a Forex broker). I also happen to strongly disagree with his posts on the origin of money. To answer your question: the villagers are forced to use the new notes by their government, which demands that their income taxes be paid with the new currency. This is glossed over by otherwiseyep, which is unfortunate because it misleads people who are new to economics into believing the system of fiat money we have now is natural/emergent (created from the bottom-up) and not enforced from the top-down. Legal tender laws enforced in each nation's courts mean that all contracts can be settled in the local fiat currency, regardless of whether the receiver of the money wants a different currency. These laws (and the income tax) create an artificial \"\"root demand\"\" for the fiat currency, which is what gives it its value. We don't just *decide* that green paper has value. We are forced to accumulate it by the government. Fiat currencies are not money. We call them money, but in fact they are credit derivatives. Let me explain: A currency's value is inextricably tied to the nation's bond market. When investors buy a nation's bonds, they are loaning that nation money. The investor expects to receive interest payments on the bonds. The interest rate naturally rises as the bonds are perceived to be more-risky, and naturally falls as the bonds are perceived to be less-risky. The risk comes from the fact that governments sometimes get really close to not being able to pay their interest payments. They get into so much debt, and their tax-revenue shrinks as their economy worsens. That drives up the interest rate they must pay when they issue new bonds (ie add debt). So the value of a currency comes from tax revenue (interest payments). If a government misses an interest payment, or doesn't fully pay it, the market considers this a \"\"credit event\"\" and investors sell their bonds and freak out. Selling bonds has the effect of driving interest rates even higher, so it's a vicious cycle. If the government defaults, there's massive deflation because all debt denominated in that currency suddenly skyrockets due to the higher interest rates. This creates a chain of cascading defaults - one person defaults, which leads another person, and another, and so on. Everyone was in debt to everyone else, somewhere along the chain. In order to counteract this deflation (which ultimately leads to the kind of depression you saw in 1930's US), governments will print print print, expanding the credit supply via the banks. So this is what you see happening today - banks are constantly being bailed out all over the Western world, governments are cutting programs to be able to meet their interest payments, and central banks are expanding credit supplies and bailing out their buddies. Real money has ZERO counterparty risk. What is counterparty risk? It's just the risk that the guy who owes you something won't honor his debt. Gold and silver and salt and oil aren't IOU's. So they can be real money.\"" }, { "docid": "7332", "title": "", "text": "\"It all has to do with risk and reward. The risk is that interest rates will rise. To entice you to go with the variable, they make it so it is cheaper if interest rates never rise. Your job is to guess whether interest rates are likely to go up or not. In a first approximation, you should go fixed. The bank employs very smart people whose entire job is to know whether interest rates will go up or not. Those people chose the price difference between the two, and it's sure to favour the bank. That is, the risk of extra payments you'll make on the variable is probably more than the enticement. But, some people can't sleep at night if their payments (or more realistically, the interest part of their payments) might double. If that's you, go fixed. If that's not you, understand that the enticement actually has to be turned up a bit, to get more people to go variable, because of the sleeping-at-night feature. Think long and hard about your budget and what would happen if your payment jumped. If you could handle it, variable might be the better choice. Personally, I have been taking \"\"variable\"\" on my mortgage for decades (and now I don't have one) and never once regretted it. I also counselled my oldest child to take variable on her mortgage. Over this century so far, if rates ticked up, they didn't tick up to the level the fixed was offered at. Mostly they have sat flat. But if ever there was a world in which \"\"past performance does not predict future results\"\" it would be interest rate trends. Do your own research.\"" }, { "docid": "499166", "title": "", "text": "It's all about risk. These guidelines were all developed based on the risk characteristics of the various asset categories. Bonds are ultra-low-risk, large caps are low-risk (you don't see most big stocks like Coca-Cola going anywhere soon), foreign stocks are medium-risk (subject to additional political risk and currency risk, especially so in developing markets) and small-caps are higher risk (more to gain, but more likely to go out of business). Moreover, the risks of different asset classes tend to balance each other out some. When stocks fall, bonds typically rise (the recent credit crunch being a notable but temporary exception) as people flock to safety or as the Fed adjusts interest rates. When stocks soar, bonds don't look as attractive, and interest rates may rise (a bummer when you already own the bonds). Is the US economy stumbling with the dollar in the dumps, while the rest of the world passes us by? Your foreign holdings will be worth more in dollar terms. If you'd like to work alternative asset classes (real estate, gold and other commodities, etc) into your mix, consider their risk characteristics, and what will make them go up and down. A good asset allocation should limit the amount of 'down' that can happen all at once; the more conservative the allocation needs to be, the less 'down' is possible (at the expense of the 'up'). .... As for what risks you are willing to take, that will depend on your position in life, and what risks you are presently are exposed to (including: your job, how stable your company is and whether it could fold or do layoffs in a recession like this one, whether you're married, whether you have kids, where you live). For instance, if you're a realtor by trade, you should probably avoid investing too much in real estate or it'll be a double-whammy if the market crashes. A good financial advisor can discuss these matters with you in detail." }, { "docid": "375253", "title": "", "text": "how do these margins vary over time Depends on a lot of factors. The bank's financial health, bank's ongoing business activities, profits generated from it's other businesses. If it is new to mortgages, it mightn't take a bigger margin to grow its business. If it is in the business for long, it might not be ready to tweak it down. If the housing market is down, they might lower their margin's to make lending attractive. If their competitors are lowering their margins, the bank in question might also. Do they rise when the base rate rises, or fall, or are they uncorrelated? When rates rise(money is being sucked out to curb spending), large amount of spending decreases. So you can imagine margins will need to decrease to keep the mortgage lending at previous levels. Would economic growth drive them up or down? Economic growth might make them go up. Like in case 1, base rates are low -> people are spending(chances are inflation will be high) -> margins will be higher(but real value of money will be dependent on inflation) Is there any kind of empirical or theoretical basis to guess at their movement? Get a basic text book on macroeconomics, the rates and inflation portion will be there. How the rates influence the money supply and all. It will much more sense. But the answer will encompass a mixture of all conditions and not a single one in isolation. So there isn't a definitive answer. This might give you an idea of how it works. It is for variable mortgage but should be more or less near to what you desire." }, { "docid": "130388", "title": "", "text": "To avoid risk from rising interest rates, get a fixed rate mortgage. For the life of the mortgage your principal and interest payments will remain the same. Keep in mind that the taxes and insurance portion of your monthly payment may still go up. Because you own the property, the costs to maintain the property are your responsibility. If you rented this would be the responsibility of the owner of the property; if the cost to repair and maintain goes up so does the rent. Because you are the owner your annual costs to repair and maintain may go up over time. The way to eliminate risk of loss of value is to never move, until the mortgage is paid off. You will know exactly what principal and interest will cost you over the life of the loan. When you sell that will be essentially return on your payments. You don't know if the loss of value is due to world, national, regional, local or individual circumstances. so hedging is tough. If the fact that the mortgage is 95% is what makes you nervous, your biggest risk is risk of being upside down. That risk is greatly reduced by increasing the amount of the down payment. That decreases the risk that the value will be below the mortgage amount if due to unforeseen circumstances you have to sell immediately. The money will still be lost due to decrease in value, but you aren't forced to bring cash to the settlement table if you need to sell." }, { "docid": "388391", "title": "", "text": "\"So \"\"Operation Twist\"\" is actually a pretty simple concept. Here's the break down: The Fed sells short-term treasury bonds that it already holds on its books. Short-term treasury bonds refer to - bonds that mature in less than three years. Then: Uses that money to buy long term treasury bonds. Long-term treasury bonds refer to - bonds that mature in six to 30 years The reason: The fed buys these longer-term treasuries to lower longer-term interest rates and encourage more borrowing and spending. Diving deeper into how it works: So the Fed can easily determine short-term rates by using the Federal funds rate this rate has a direct effect on the following: However this does not play a direct role in influencing the rate of long-term loans (what you might pay on a 30-year fixed mortgage). Instead, long-term rates are determined by investors who buy and sell bonds in the bond market, which changes daily. These bond yields fluctuate depending on the health of the economy and inflation. However, the Fed funds rate does play an indirect role in these rates. So now that we know a little more about what effects what rate, why does lower long-term rates in treasuries influence my 30yr fixed mortgage? Well when you are looking for a loan you are entering a market and competing against other people, by people I mean anyone looking for money (e.g: my grandmother, companies, or the US government). The bank that lends you money has to decide weather the deal you are offering them is better then another deal on the market. If the risk of lending to one person is the same as the risk of lending to another, the bank will make whichever loan yields the higher interest rate. The U.S. government is considered a very safe borrower, so much so that government bonds are considered almost “risk free”, but because of the lower risk the rate of return is lower. So now the bank has to factor in this risk and make its decision weather to lend you money, or the government. So, if the government were to go to the market and buy its own long-term bonds it is adding demand in the market causing the price of the bond to rise in effect lowering the interest rate (when price goes up, yield goes down). So when you go back and ask for a loan it has to re-evaluate and decide \"\"Is it worth giving this money to Joe McFreeBeer instead and collecting a higher yield?\"\" (After all, Joe McFreeBeer is a nice guy). Here's an example: Lets say the US has a rating of 10 out of 10 and its bonds pay a 2% yield. Now lets say for each lower mark in rating the bank will lend at a minimum of 1% higher and your rating is 8 of 10. So if you go to market, the lowest rate you can get will be 4%. Now lets say price rises on the US treasury and causes the rate to go down by 1%. In this scenario you will now be able to get a loan for 3% and someone with a rating of 7 of 10 would be able to get that 4% loan. Here's some more info and explinations: Why is the Government Buying Long-Term Bonds? What Is 'Operation Twist'? A Q&A on US Fed Program Federal Reserve for Beginners Federal Open Market Committee\"" }, { "docid": "355156", "title": "", "text": "The only fair thing to do is to let each of you pay their own loans. That way, your brother will probably get out of debt faster and starts saving or investing (assuming equal down payments), while you'll be stuck with your loan for a while longer. If you want to minimize the interests you have to pay, you could simply borrow money from your brother. That way, he'll contribute towards your loans, and you will know exactly how much you owe him. Your brother may lend you money interest-free, or you could agree on an interest rate which is lower than what you pay on your loans, which will somewhat compensate your brother and still be beneficial to you. It still won't be fair though, because your brother might be able to invest his extra money with better interest rate, and lending money to you would prevent that." }, { "docid": "65461", "title": "", "text": "First, let me fill in the gaps on your situation, based on the numbers you've given so far. I estimate that your student loan balance (principal) is $21,600. With the variable rate loan option that you've presented, the maximum interest rate you could be charged would be 11.5%, which would bring your monthly payment up to that $382 number you gave in the comments. Your thoughts are correct about the advantage to paying this loan off sooner. If you are planning on paying off this loan sooner, the interest rate on the variable rate loan has less opportunity to climb. One thing to be cautious of with the comparison, though: The $1200 difference between the two options is only valid if your rate does not increase. If the rate does increase, of course, the difference would be less, or it could even go the other way. So keep in mind that the $1200 savings is only a theoretical maximum; you won't actually see that much savings with the variable rate option. Before making a decision, you need to find out more about the terms of this variable rate loan: How often can your rate go up? What is the loan rate based on? I'm not as familiar with student loan variable rate loans, but there are other variable rate loans I am familiar with: With a typical adjustable rate home mortgage, the rate is locked for a certain number of years (perhaps 5 years). After that, the bank might be allowed to raise the rate once every period of months (perhaps once every year). There will be a limit to how much the rate can rise on each increase (perhaps 1.0%), and there will be a maximum rate that could be charged over the life of the loan (perhaps 12%). The interest rate on your mortgage can adjust up, inside of those parameters. (The actual formula used to adjust will be found in the fine print of your mortgage contract.) However, the bank knows that if they let your rate get too high above the current market rates, you will refinance to a different bank. So the mortgage is typically structured so that it will raise your rate somewhat, but it won't usually get too far above the market rate. If you knew ahead of time that you would have the house paid off in 5 years, or that you would be selling the house before the 5 years is over, you could confidently take the adjustable rate mortgage. Credit cards, on the other hand, also typically have variable rates. These rates can change every month, but they are usually calculated on some formula determined ahead of time. For example, on my credit card, the interest rate is the published Prime Rate plus 13.65%. On my last statement, it said the rate was 17.15%. (Of course, because I pay my balance in full each month, I don't pay any interest. The rate could go up to 50%, for all I care.) As I said, I don't know what determines the rate on your variable rate student loan option, and I don't know what the limits are. If it climbs up to 11.5%, that is obviously ridiculously high. I recommend that you try to pay off this student loan as soon as you possibly can; however, if you are not planning on paying off this student loan early, you need to try to determine how likely the rate is to climb if you want to pick the variable rate option." }, { "docid": "360199", "title": "", "text": "In general, prices are inversely proportional to rates; however, accurate interest rate prediction would make one worthy of managing a large credit derivative hedge fund. This is not to say that interest rates cannot go up in Canada since the world is currently undergoing a resource bust, and the United States has begun exporting more oil, even trying to recently open the market to Europe, both of which Canada is relatively dependent upon. Also, to say that Canada currently has the most overpriced real estate is an oversight to say the least considering China currently has entire cities that are empty because prices are too high. A ten to twenty percent drop in real estate prices would probably be a full blown financial crisis, and since mortgage rates are currently around 2.5%, a one to two hundred basis point rise could mean a nearly 50% decrease in real estate prices if interest payments are held constant. Canada would either have to start growing its economy at a much higher rate to encourage the central bank to raise rates to such a height, or oil would have to completely collapse suddenly to cause a speculatively possible collapse of CAD to encourage the same. The easiest relationship to manipulate between prices and rates is the perpetuity: where p is the price, i is the interest payment, and r is the interest rate. In this case, an increase of r from 2.5% to 4.5% would cause a 44.5% decrease in p if i is held constant. However, typical Canadian mortgages seem to mature in ten years at a fixed rate, so i cannot be held constant, and the relationship between r and p is less strong at earlier maturities, thus the most likely way for prices to collapse is for a financial collapse as described above." } ]

[ { "docid": "407540", "title": "", "text": "Sales tax permits come from the state in which your business is operating. You need a business license first for them to issue you one. US sales taxes are collected by the business and remitted to the government, you need the permit in order to do this. A bigger question is whether it's legal for you to engage in business in the first place. What is your visa status?" } ]

[ { "docid": "528880", "title": "", "text": "Here're some findings upon researches: Two main things to watch out for: Estate tax and the 30% tax withholding. These 2 could be get around by investing in Luxembourg or Ireland domiciled ETF. For instance there's no tax withholding on Ireland domiciled ETF dividend, and the estate tax is not as high. (source: BogleHead forums) Some Vanguard ETF offered in UK stock market: https://www.vanguard.co.uk/uk/mvc/investments/etf#docstab. Do note that the returns of S&P 500 ETF (VUSA) are adjusted after the 30% tax withholding! Due to VUSA's higher TER (0.09%), VOO should remain a superior choice. The FTSE Emerging Markets and All-World ETFs though, are better than their US-counterparts, for non-US residents. Non-US residents are able to claim back partials of the withhold tax, by filing the US tax form 1040NR. In 2013, non-US resident can claim back at least $3,900. Kindly correct me if anything is inaccurate." }, { "docid": "141458", "title": "", "text": "\"Not really, no. The assumption you're making—withdrawals from a corporation are subject to \"\"[ordinary] income tax\"\"—is simplistic. \"\"Income tax\"\" encompasses many taxes, some more benign than others, owing to credits and exemptions based on the kind of income. Moreover, the choices you listed as benefits in the sole-proprietor case—the RRSP, the TFSA, and capital gains treatment for non-registered investments—all remain open to the owner of a small corporation ... the RRSP to the extent that the owner has received salary to create contribution room. A corporation can even, at some expense, establish a defined benefit (DB) pension plan and exceed individual RRSP contribution limits. Yes, there is a more tax-efficient way for small business owners to benefit when it comes time to retirement. Here is an outline of two things I'm aware of: If your retirement withdrawals from your Canadian small business corporation would constitute withdrawal from the corporation's retained earnings (profits), i.e. income to the corporation that had already been subject to corporate income tax in prior years, then the corporation is able to declare such distributions as dividends and issue you a T5 slip (Statement of Investment Income) instead of a T4 slip (Statement of Remuneration Paid). Dividends received by Canadian residents from Canadian corporations benefit from the Dividend Tax Credit (DTC), which substantially increases the amount of income you can receive without incurring income tax. See TaxTips.ca - Non-eligible (small business) dividend tax credit (DTC). Quote: For a single individual with no income other than taxable Canadian dividends which are eligible for the small business dividend tax credit, in 2014 approximately $35,551 [...] could be earned before any federal* taxes were payable. * Provincial DTCs vary, and so combined federal/provincial maximums vary. See here. If you're wondering about \"\"non-eligible\"\" vs. \"\"eligible\"\": private small business corporation dividends are generally considered non-eligible for the best DTC benefit—but they get some benefit—while a large public corporation's dividends would generally be considered eligible. Eligible/non-eligible has to do with the corporation's own income tax rates; since Canadian small businesses already get a big tax break that large companies don't enjoy, the DTC for small businesses isn't as good as the DTC for public company dividends. Finally, even if there is hardly any same-year income tax advantage in taking dividends over salary from an active small business corporation (when you factor in both the income tax paid by the corporation and the individual), dividends still allow a business owner to smooth his income over time, which can result in a lower lifetime average tax rate. So you can use your business as a retained earnings piggy bank to spin off dividends that attract less tax than ordinary income. But! ... if you can convince somebody to buy your business from you, then you can benefit from the lifetime capital gains exemption of up to $800,000 on qualifying small business shares. i.e. you can receive up to $800K tax-free on the sale of your small business shares. This lifetime capital gains exemption is a big carrot—designed, I believe, to incentivize Canadian entrepreneurs to develop going-concern businesses that have value beyond their own time in the business. This means building things that would make your business worth buying, e.g. a valued brand or product, a customer base, intellectual property, etc. Of course, there are details and conditions with all of what I described, and I am not an accountant, so please consult a qualified, conflict-free professional if you need advice specific to your situation.\"" }, { "docid": "347186", "title": "", "text": "Tax liability in US: You would need to determine if you are a resident alien or non resident alien. Resident alien are taxed normally as per US citizens. For the annual remuneration you have quoted it would be in the range of 25%. Refer http://www.moneychimp.com/features/tax_brackets.htm To determine if you are resident alien or non resident alien, you need to be present for certain period in US. There is also an exemption even if you meet this you can still be treated as non resident alien if your tax home is outside US [India in this case] Refer to the link for details to determine your category, the durations are for number of days in financial year, hence it matters when you are in US and the exact durations. http://www.irs.gov/taxtopics/tc851.html Also note that if you are assessed as resident alien, even the income from India will be taxed in US unless you declare there is no income in India. Tax liability in India: The tax liability in India would be depending on your NRI status. This again is tied to the financial year and the number of days you are in country. While the year you are going out of India you need to be away for atleast 183 days for you be considred are NRI. So if you are treated as Indian resident, you would have to pay tax in India on entire income. In the worst case, depending on the period you travel and the dates you travel, you could get classified as citizen in US as well as India and have to pay tax at both places. India and US do not have a dual tax avoidance treaty for individuals. Its there for certain category like small business and certain professions like teacher, research etc." }, { "docid": "397920", "title": "", "text": "I heard that a C-Corp being a one person shop (no other employees but the owner) can pay for the full amount 100% of personal rent if the residence is being used as a home office. Sure. Especially if you don't mind being audited. Technically, it doesn't matter how the money gets where it goes as long as the income tax filings accurately describe the tax situation. But the IRS hates it when you make personal expenses from a business account, even if you've paid the required personal income tax (because their computers simply aren't smart enough to keep up with that level of chaos). Also, on a non-tax level, commingling of business and personal funds can reduce the effectiveness of your company's liability protection and you could more easily become personally liable if the company goes bankrupt. From what I understand the 30% would be the expense, and the 70% profit distribution. I recommend you just pay yourself and pay the rent from your personal account and claim the allowed deductions properly like everyone else. Why & when it would make sense to do this? Are there any tax benefits? Never, because, no. You would still have to pay personal income tax on your 70% share of the rent (the 30% you may be able to get deductions for but the rules are quite complicated and you should never just estimate). The only way to get money out of a corporation without paying personal income tax is by having a qualified dividend. That's quite complicated - your accounting has to be clear that the money being issued as a qualified dividend came from an economic profit, not from a paper profit resulting from the fact that you worked hard without paying yourself market value." }, { "docid": "271920", "title": "", "text": "\"In the United States, regulation of broker dealer credit is dictated by Regulation T, that for a non-margin account, 100% of a trade must be funded. FINRA has supplemented that regulation with an anti-\"\"free rider\"\" rule, Rule 4210(f)(9), which reads No member shall permit a customer (other than a broker-dealer or a “designated account”) to make a practice, directly or indirectly, of effecting transactions in a cash account where the cost of securities purchased is met by the sale of the same securities. No member shall permit a customer to make a practice of selling securities with them in a cash account which are to be received against payment from another broker-dealer where such securities were purchased and are not yet paid for. A member transferring an account which is subject to a Regulation T 90-day freeze to another member firm shall inform the receiving member of such 90-day freeze. It is only funds from uncleared sold equities that are prohibited from being used to purchase securities. This means that an equity in one's account that is settled can be sold and can be purchased only with settled funds. Once the amount required to purchase is in excess of the amount of settled funds, no more purchases can be made, so an equity sold by an account with settled funds can be repurchased immediately with the settled funds so long as the settled funds can fund the purchase. Margin A closed position is not considered a \"\"long\"\" or \"\"short\"\" since it is an account with one loan of security and one asset of security and one cash loan and one cash liability with the excess or deficit equity equal to any profit or loss, respectively, thus unexposed to the market, only to the creditworthiness of the clearing & settling chain. Only open positions are considered \"\"longs\"\" or \"\"shorts\"\", a \"\"long\"\" being a possession of a security, and a \"\"short\"\" being a liability, because they are exposed to the market. Since unsettled funds are not considered \"\"longs\"\" or \"\"shorts\"\", they are not encumbered by previous trades, thus only the Reg T rules apply to new and current positions. Cash vs Margin A cash account cannot purchase with unsettled funds. A margin account can. This means that a margin account could theoretically do an infinite amount of trades using unsettled funds. A cash account's daily purchases are restricted to the amount of settled funds, so once those are exhausted, no more purchases can be made. The opposite is true for cash accounts as well. Unsettled securities cannot be sold either. In summation, unsettled assets can not be traded in a cash account.\"" }, { "docid": "43217", "title": "", "text": "There's no requirement of US citizenship to open a bank account in the US. Any person, citizen or not, can do that. I don't know where this assumption of yours come from, but it is false. So the easiest solution is to open a bank account for your nephew next time he visits the US and get him an ATM card from that account. You can then deposit money to that account as much as you want (beware of the gift tax consequences). If he doesn't want to travel to the US and cannot open a US bank account remotely from Russia (which is probably the case), then follow the @BrenBarn's suggestion: have him open a bank account in Russia and just wire money there. Having a foreigner tapping freely into your own personal bank account may cause legal issues both with regards to gift tax and money laundering provisions that require you to certify that the money on the account is yours only. Also, check if there's an issue for a Russian resident to have control over foreign accounts (there's definitely such an issue for a US resident, Russians are generally not far behind when it comes to government oppression)." }, { "docid": "203889", "title": "", "text": "We have a house here in India worth Rs. 2 Crores. We want to sell it and take money with us. Selling the house in India will attract Capital Gains Tax. Essentially the price at which you sell the property less of the property was purchased [or deemed value when inherited by you]. The difference is Capital Gains. You have to pay tax on this gains. This is currently at 10% without Indexation and 20% with Indexation. Please note if you hold these funds for more than an year, you would additionally be liable for Wealth tax at 1% above Rs 50 lacs. Can I gift this whole amount to my US Citizen Daughter or what is the maximum limit of Gift amount What will be the tax liability on me and on my Daughter in case of Gift Whether I have to show it in my Income Tax Return or in my Daughter's Tax Return. What US Income Tax Laws says. What will be the procedure to send money as Gift to my Daughter. Assuming you are still Indian citizen when to gift the funds; From Indian tax point of you there is no tax to you. As you daughter is US citizen, there is no gift tax to her. There is no limit in India or US. So you can effectively gift the entire amount without any taxes. If you transfer this after you become a US Resident [for tax purposes], then there is a limit of USD 14,000/- per year per recipient. Effective you can gift your daughter and son-in-law 14,000/- ea and your husband can do the same. Net 14,000 * 4 USD per year. Beyond this you either pay tax or declare this and deduct it from life time estate quota. Again there is no tax for your daughter. What are the routes to take money from India to US Will the money will go directly from my Bank Act.to my Daughter's Bank Account. Will there will be wire transfer from bank to bank Can I send money through other money sender Certified Companies also. The best way is via Bank to Bank transfer. A CA Certificate is required to certify that taxes have been paid on this funds being transferred. Under the liberalized remittance scheme in India, there is a limit of USD 1 Million per year for moving funds outside of India. So you can move around Rs 6-7 Crore a year." }, { "docid": "417866", "title": "", "text": "\"Payment gateways such as Square do not normally withhold tax. It is up to you to pay the appropriate tax at tax time. That having been said, Square does report your payments to the IRS on a form 1099-K if your payments are large enough. According to Square, you'll get a 1099-K from them if your total payments for the year add up to $20,000 AND more than 200 transactions. Whether or not they report on a 1099-K, you are required to pay the appropriate taxes on your income. So now the question becomes, \"\"Do I have to pay income tax on the proceeds from my garage sale?\"\" And the answer to that question is usually not. When you sell something that you previously purchased, if you sell it for more than you paid for it, you have a capital gain and need to pay tax on that. However, generally you sell things in a garage sale at a loss, meaning that there is no tax due. If you make more than $20,000 at your garage sale and the IRS gets a 1099-K, the IRS might be curious as to how you did that with no capital gain. So if you sell any big ticket items (a bulldozer, for example), you should keep a record of what you paid for it, so you can show the loss to the IRS in the event of an audit.\"" }, { "docid": "11979", "title": "", "text": "Here's how I think about money. There are only 3 categories / contexts (buckets) that my earned money falls into. Savings is my emergency fund. I keep 6 months of total expenses (expenses are anything in the consumption bucket). You can be as detailed as you want with this area but I tend to leave a fudge factor. In other words, if I estimate that I spend approximately $3,000 a month in consumption dollars then I'll save $3,500 times 6 in the bank. This money needs to be liquid. Some people use a HELOC, other people use their ROTH contributions. In any case, you need to put this money some place you can get access to it in case you go from accumulation (income exceed expenses) to decumulation mode (expenses exceed income). This money is distinct from consumption which I will cover in paragraph three. Investments are stocks, bonds, income producing real estate, small businesses, etc. These dollars require a strategy. The strategy can include some form of asset allocation but more importantly a timeline. These are the dollars that are working for you. Each dollar placed here will multiply over time. Once you put a dollar here it shouldn't be taken out unless there is some sort of catastrophe that your savings can't handle or your timeline has been achieved. Notice that rental real estate is included so liquidating stocks to purchase rental real estate is NOT considered removing investment dollars. Just reallocating based on your asset allocation. This bucket includes 401k's, IRAs, all tax-sheltered accounts, non-sheltered brokerage accounts, and rental real estate. In general your primary residence is not included in this bucket. Some people include the equity of their primary residence in the investment column but it can complicate the equation and I prefer to leave it out. The consumption bucket is the most important bucket and the one you spend the most time with. It requires a budget. This includes your $5 magazine and your $200 bottle of wine. Anything in this bucket is gone. You can recover a portion of it by selling it on ebay for $3 (these are earned dollars) but the original $5 is still considered spent. The reason your thought process in this area is distinct from the other two, the decisions made in this area will have the biggest impact on your personal finances. Warren Buffett was famous for skimping on haircuts because they are worth thousands of dollars down the road if they are invested instead. Remember this is a zero-sum game so every $1 not consumed is placed in one of the other buckets. Once your savings bucket is full every dollar not consumed is sent to investments. Remember to include everything that does not fit in the other two buckets. Most people forget their car insurance, life insurance, tax bill at the end of the year, accountant bill, etc. In conclusion, there are three buckets. Savings, which serve as your emergency bucket. This money should not be touched unless you switch from accumulation to decumulation. Investments, which are your dollars that are working for you over time. They require a strategy and a timeline. Consumption, which are your monthly expenses. These dollars keep you alive and contribute to your enjoyment. This is a short explanation of my use of money. It can get as complicated and detailed as you want it to be but as long as you tag your dollars correctly you'll be okay IMHO. HTH." }, { "docid": "308048", "title": "", "text": "It is absolutely legal. While studying on a F-1 you would typically be considered a non-resident alien for tax purposes. You can trade stocks, just like any other foreigner having an account with a US- or non-US based brokerage firm. Make sure to account for profit made on dividends/capital gain when doing your US taxes. A software package provided by your university for doing taxes might not be adequate for this." }, { "docid": "13496", "title": "", "text": "An Indian citizen who is not a resident of India (an NRI) or a Person of Indian Origin (a PIO) is not permitted to sell or gift immovable property in India (real property for US readers) to another NRI or PIO; the property must be sold or gifted to a resident of India. So, assuming that the property in question is in India, you cannot sell it to your NRI friend." }, { "docid": "166977", "title": "", "text": "If you sell through an intermediate who sets up the shop for you, odds are they collect and pay the sales tax for you. My experience is with publishing books through Amazon, where they definitely handle this for you. If you can find a retailer that will handle the tax implications, that might be a good reason to use them. It looks like Etsy uses a different model where you yourself are responsible for the sales tax, which requires you to register with your state (looks like this is the information for New York) and pay the taxes yourself on a regular basis; see this link for a simple guide. If you're doing this, you'll need to keep track of how much tax you owe from your sales each month, quarter, or year (depending on the state laws). You can usually be a sole proprietor, which is the easiest business structure to set up; if you want to limit your legal liability, or work with a partner, you may want to look into other forms of business structure, but for most craftspeople a sole proprietorship is fine to start out with. If you do a sole proprietorship, you can probably file the income on a 1040 Schedule C when you do your personal taxes each year." }, { "docid": "291011", "title": "", "text": "Hi We are looking to connect with UK medical technology companies and other relevant people who could help us complete a project we are currently working on. We are currently representatives of a consortium of Drs based in the Middle East and Iran. With the lifting of international sanctions by the 5+1 group of nations and JCPOA in early 2016, on Iran, has resulted in our clients being very interested in purchasing and becoming official distributors off medical equipment from the UK. I have had some lengthy discussions with this team in Dubai and Tehran, and I'm told the the domestic Persian market has a very deep sense of of affiliation with German, Italian and French companies, whom have been involved more in the Persian Gulf region than Britain since 2012. One key point I did however notice is the demand and respect that British Tech commands. This has encouraged our team to take on this project to help these guys access the products they require. They are interested in buying from UK manufacturing and reselling it as official distributors to the domestic Persian markets 80million population. They are also very interested in collaborating with and acquiring the licences to UK medical technologies, which they would like to then buy the rights too or licence/franchise for their locality and they have the capacity to invest in manufacturing this product in the Middle East, working in conjunction with the UK companies. An example of how this has worked in the past is the French car manufacturer working in collaboration with Iranian Engineering company to produce and manufacture Peugeot Pars car. Which looks very much like a peugeot 405 but is infact designed and developed specifically for the local market and is also manufactured locally. This is a huge success and we feel we can imitate its success in our plan too. I have been in discussions with a number of sources where I could possibly complete this project through. I have come to know from my research globally within this sector that there are approx 3500 medical technology companies registered in the UK. All specialising in various fields. I was wondering is there a database anywhere which I can't access to see whom and where these companies are exactly in the UK. I have until now established that between 70-80% of companies worldwide in MED Tech field are based in or affiliated with either the USA or Israel, with the majority of the remaining 20% of companies being European or Japanese. There are also many collaborations between Euro companies which was quiet pleasing for me to see. We fully understand that the USA under Trump have reinstated the sanction for USA. However our understanding is that we in the UK are not at present restricted by Sanctions to trade with Iranian companies. We strongly feel that the British medical technology sector here in the UK could benefit considerably it could also help It to progress and grow to take a bigger global Market share as well bring in 100s of millions in revenues for the UK economy. We strongly feel that with Brexit negotiations in the pipeline, as well as the geo political situation that the world finds itself in right now, that this is the right time to work in collaboration with this consortium and help them with completion of this project successfully and lawfully. We strongly feel though that the due diligence carried in any trade deals needs to be within a framework of EU, UK regulations and in compliance with any UN or other sanctions we are un aware off. We had been planning to use due diligence guidelines from the USA when dealing with Iranian companies, however we feel this is the main reason why France and Germany along with Italy are winning all the contracts in Iran, and with the help of relevant government departments we would like to develop our own plan for this based on the current situation. We would like this to be the beginning of a number of high level trade deals we are in negotiations with right now with high level Middle Eastern business consortiums, in Dubai, Doha, Muscat, Tehran, Kuwait. We feel Britain has missed it to France and Germany when it comes to Iran, and would like to work with all the relevant departments to create a due diligence plan which is effective and helps us reach our goals. I would appreciate any advice you can give us in this respect. Thanks Alfie Star Senior project manager [email protected] http://www.commodustrade.com" }, { "docid": "385221", "title": "", "text": "As the name says, its for income earned in a Foreign country. If you have been paying US income tax on this while living in the US, nothing is going to change here. You should be informing yourself on how to avoid double taxation in your new country of residence. Passive income earned abroad (dividends, interest) also do not fall under this exemption. The purpose of the Foreign Earned Income Exclusion is to make it easy for expats who work abroad to avoid double income taxation without going through the complicated process of applying for tax credits. The US is the only industrial country that taxes its residents regardless of where they reside. That is also why it only goes to about $100,000 a year. If you are a high earner, they want to make it more difficult. Also as a side note, since you are going to be abroad for a year. I will point out that if you have more than $10,000 in foreign accounts at any point in the year you need to declare this in an FBAR form. This is not advertised as well as it should be and carries ridiculous penalties for non-compliance. I can't count the number of times I have heard a US expat say that they were unaware of this." }, { "docid": "558618", "title": "", "text": "What taxes will I have to pay to India? Income earned outside of India when your status is Non-Resident Indian, there is no tax applicable. You can repatriate the funds back to India within 7 years without any tax event. Someone else may put an answer about US taxes." }, { "docid": "257980", "title": "", "text": "\"Here are some important things to think about. Alan and Denise Fields discuss them in more detail in Your New House. Permanent work. Where do you want to live? Are there suitable jobs nearby? How much do they pay? Emergency fund. Banks care that you have \"\"reserves\"\" (and/or an unsecured line of credit) in case you have a run of bad luck. This also helps with float the large expenses when closing a loan. Personal line of credit. Who are you building for? If you are not married, then you should consider whether building a home makes that easier, or harder. If you hope to have kids, you should consider whether your home will make it easier to have kids, or harder. If you are married (or seriously considering it), make sure that your spouse helps with the shopping, and is in agreement on the priorities and choices. If you are not married, then what will you do if/when you get married? Will you sell? expand? build another house on the same lot? rent the home out? Total budget. How much can the lot, utilities, permits, taxes, financing charges, building costs, and contingency allowance come to? Talk with a banker about how much you can afford. Talk with a build-on-your-lot builder about how much house you can get for that budget. Consider a new mobile or manufactured home. But if you do choose one, ask your banker how that affects what you can borrow, and how it affects your rates and terms. Talk with a good real estate agent about how much the resale value might be. Finished lot budget. How much can you budget for the lot, utilities, permits required to get zoning approval, fees, interest, and taxes before you start construction? Down payment. It sounds like you have a plan for this. Loan underwriting. Talk with a good bank loan officer about what their expectations are. Ask about the \"\"front-end\"\" and \"\"back-end\"\" Debt-To-Income ratios. In Oregon, I recommend Washington Federal for lot loans and construction loans. They keep all of their loans, and service the loans themselves. They use appraisers who are specially trained in evaluating new home construction. Their appraisers tend to appraise a bit low, but not ridiculously low like the incompetent appraisers used by some other banks in the area. (I know two banks with lots of Oregon branches that use an appraiser who ignores 40% of the finished, heated area of some to-be-built homes.) Avoid any institution (including USAA and NavyFed) that outsources their lending to PHH. Lot loan. In Oregon, Washington Federal offers lot loans with 30% down payments, 20-year amortization, and one point, on approved credit. The interest rate can be a fixed rate, but is typically a few percentage points per year higher than for a mortgage secured by a permanent house. If you have the financial wherewithal to start building within two years, Washington Federal also offers short-term lot loans. Ask about the costs of appraisals, points, and recording fees. Rent. How much will it cost to rent a place to live, between when you move back to Oregon, and when your new home is ready to move into? Commute. How much time will it take to get from your new home to work? How much will it cost? (E.g., car ownership, depreciation, maintenance, insurance, taxes, fuel? If public transportation is an option, how much will it cost?) Lot availability. How many are there to choose from? Can you talk a farmer into selling off a chunk of land? Can you homestead government land? How much does a lot cost? Is it worth getting a double lot (or an extra large lot)? Utilities. Do you want to live off the grid? Are you willing to make the choices needed to do that? (E.g., well, generator, septic system, satellite TV and telephony, fuel storage) If not, how much will it cost to connect to such systems? (For practical purposes, subtract twice the value of these installation costs from the cost of a finished lot, when comparing lot deals.) Easements. These provide access to your property, access for others through your property, and affect your rights. Utility companies often ask for far more rights than they need. Until you sign on the dotted line, you can negotiate them down to just what they need. Talk to a good real estate attorney. Zoning. How much will you be allowed to build? (In terms of home square footage, garage square footage, roof area, and impermeable surfaces.) How can the home be used? (As a business, as a farm, how many unrelated people can live there, etc.) What setbacks are required? How tall can the building(s) be? Are there setbacks from streams, swamps, ponds, wetlands, or steep slopes? Choosing a builder. For construction loans, banks want builders who will build what is agreed upon, in a timely fashion. If you want to build your own house, talk to your loan officer about what the bank expects in a builder. Plansets and permits. The construction loan process. If you hire a general contractor, and if you have difficulties with the contractor, you might be forced to refuse to accept some work as being complete. A good bank will back you up. Ask about points, appraisal charges, and inspection fees. Insurance during construction. Some companies have good plans -- if the construction takes 12 months or less. Some (but not all) auto insurance companies also offer good homeowners' insurance for homes under construction. Choose your auto insurance company accordingly. Property taxes. Don't forget to include them in your post-construction budget. Homeowners' insurance. Avoid properties that need flood insurance. Apply a sanity check to flood maps -- some of them are unrealistic. Strongly consider earthquake insurance. Don't forget to include these costs in your post-construction budget. Energy costs. Some jurisdictions require you to calculate how large a heating system you need. Do not trust their design temperatures -- they may not allow for enough heating during a cold snap, especially if you have a heat pump. (Some heat pumps work at -10°F -- but most lose their effectiveness between 10°F and 25°F.) You can use these calculations, in combination with the number of \"\"heating degree days\"\" and \"\"cooling degree days\"\" at your site, to accurately estimate your energy bills. If you choose a mobile or manufactured home, calculate how much extra its energy bills will be. Home design. Here are some good sources of ideas: A Pattern Language, by Christopher Alexander. Alexander emphasizes building homes and neighborhoods that can grow, and that have niches within niches within niches. The Not-So-Big House, by Sarah Susanka. This book applies many Alexander's design patterns to medium and large new houses. Before the Architect. The late Ralph Pressel emphasized the importance of plywood sheathing, flashing, pocket doors, wide hallways, wide stairways, attic trusses, and open-truss or I-joist floor systems. Lots of outlets and incandescent lighting are good too. (It is possible to have too much detail in a house plan, and too much room in a house. For examples, see any of his plans.) Tim Garrison, \"\"the builder's engineer\"\". Since Oregon is in earthquake country -- and the building codes do not fully reflect that risk -- emphasize that you want a building that would meet San Jose, California's earthquake code.\"" }, { "docid": "428533", "title": "", "text": "\"If you have income - it should appear on your tax return. If you are a non-resident, that would be 1040NR, with the eBay income appearing on line 21. Since this is unrelated to your studies, this income will not be covered by the tax treaties for most countries, and you'll pay full taxes on it. Keep in mind that the IRS may decide that you're actually having a business, in which case you'll be required to attach Schedule C to your tax return and maybe pay additional taxes (mainly self-employment). Also, the USCIS may decide that you're actually having a business, regardless of how the IRS sees it, in which case you may have issues with your green card. For low income from occasional sales, you shouldn't have any issues. But if it is something systematic that you spend significant time on and earn significant amounts of money - you may get into trouble. What's \"\"systematic\"\" and how much is \"\"significant\"\" is up to a lawyer to tell you.\"" }, { "docid": "43350", "title": "", "text": "You should very much nail down your planned expenses and profit. However beyond that you may have some better options to avoid taxation assuming all your plans go well. You should take into account the ability to avoid taxes on the sale of a primary residence. You could build the spec house, then move into the spec house. You could then sell the primary (avoiding any profit less than $500k filing jointly, assuming you meet the Home Sale Tax Exclusion requirements). You can then in another two years or so sell the spec house if you want and again avoid up to $500k in profit. http://www.nolo.com/legal-encyclopedia/the-250000500000-home-sale-tax-exclusion.html" }, { "docid": "552138", "title": "", "text": "\"The country from which you purchase stock cannot charge you tax on either income or capital gains. Taxation is based on residency, so even when you purchase foreign stock its the tax laws of Malaysia (as your country of residence) that matter. At the time of writing, Malaysia does not levy any capital gains tax and there is no income tax charged on dividends so you won't have to declare or pay any tax on your stocks regardless of where you buy them from. The only exception to this is Dividend Withholding Tax, which is a special tax taken by the government of the country you bought the stock from before it is paid to your account. You do not need to declare this tax as it his already been taken by the time you receive your dividend. The US withholding tax rate on dividends is 30%, although this can be reduced to 15% if there as a tax treaty in place between the US and your country of residence. Malaysia does have a double taxation agreement with the US (see here: http://www.mida.gov.my/env3/index.php?page=double-taxation-agreement) but it is flagged as a \"\"limited\"\" agreement. You'd need to find the full text of the agreement to see whether a reduced rate of dividend withholding tax would be available in the Malaysia/US treaty. See my other answer for more details on withholding taxes and how to partially reclaim under a double tax treaty: What is the dividend tax rate for UK stock Note: Although the taxation rules of both countries are similar, I am a resident of Singapore not Malaysia so I can't speak from first hand experience, but current Malaysia tax rates are easy to find online. The rest of this information is common to any non-US/UK resident investor (as long as you're not a US person).\"" } ]

[ { "docid": "73891", "title": "", "text": "Disclaimer: I am not a tax specialist You probably need a sales tax permit if you're going to sell goods, since just about every state taxes goods, though some states have exemptions for various types of goods. For services, it gets tricker. There is a database here that lists what services are taxed in what states; in Wyoming, for example, cellphone services and diaper services are taxed, while insurance services and barber services are not. For selling over the internet, it gets even dicier. There's a guide on nolo.com that claims to be comprehensive; it states that the default rule of thumb is that if you have a physical presence in a state, such as a warehouse or a retail shop or an office, you must collect tax on sales in that state. Given your situation, you probably only need to collect sales tax on customers in Wyoming. Probably. In any event, I'd advice having a chat with an accountant in Wyoming who can help walk you through what permits may or may not be needed." } ]

[ { "docid": "558618", "title": "", "text": "What taxes will I have to pay to India? Income earned outside of India when your status is Non-Resident Indian, there is no tax applicable. You can repatriate the funds back to India within 7 years without any tax event. Someone else may put an answer about US taxes." }, { "docid": "166977", "title": "", "text": "If you sell through an intermediate who sets up the shop for you, odds are they collect and pay the sales tax for you. My experience is with publishing books through Amazon, where they definitely handle this for you. If you can find a retailer that will handle the tax implications, that might be a good reason to use them. It looks like Etsy uses a different model where you yourself are responsible for the sales tax, which requires you to register with your state (looks like this is the information for New York) and pay the taxes yourself on a regular basis; see this link for a simple guide. If you're doing this, you'll need to keep track of how much tax you owe from your sales each month, quarter, or year (depending on the state laws). You can usually be a sole proprietor, which is the easiest business structure to set up; if you want to limit your legal liability, or work with a partner, you may want to look into other forms of business structure, but for most craftspeople a sole proprietorship is fine to start out with. If you do a sole proprietorship, you can probably file the income on a 1040 Schedule C when you do your personal taxes each year." }, { "docid": "541682", "title": "", "text": "If you are paid by foreigners then it is quite possible they don't file anything with the IRS. All of this income you are required to report as business income on schedule C. There are opportunities on schedule C to deduct expenses like your health insurance, travel, telephone calls, capital expenses like a new computer, etc... You will be charged both the employees and employers share of social security/medicare, around ~17% or so, and that will be added onto your 1040. You may still need a local business license to do the work locally, and may require a home business permit in some cities. In some places, cities subscribe to data services based on your IRS tax return.... and will find out a year or two later that someone is running an unlicensed business. This could result in a fine, or perhaps just a nice letter from the city attorneys office that it would be a good time to get the right licenses. Generally, tax treaties exist to avoid or limit double taxation. For instance, if you travel to Norway to give a report and are paid during this time, the treaty would explain whether that is taxable in Norway. You can usually get a credit for taxes paid to foreign countries against your US taxes, which helps avoid paying double taxes in the USA. If you were to go live in Norway for more than a year, the first $80,000/year or so is completely wiped off your US income. This does NOT apply if you live in the USA and are paid from Norway. If you have a bank account overseas with more than $10,000 of value in it at any time during the year, you owe the US Government a FinCEN Form 114 (FBAR). This is pretty important, there are some large fines for not doing it. It could occur if you needed an account to get paid in Norway and then send the money here... If the Norwegian company wires the money to you from their account or sends a check in US$, and you don't have a foreign bank account, then this would not apply." }, { "docid": "574060", "title": "", "text": "\"Context: My parents overseas (Japan) sent me a little over $100,000 to cover an expensive tuition payment and moderate living expenses in 2014. They are not US residents, Green card holders or citizens. They did not remit the tuition payment directly to the school. I am a resident (for tax). This is enough to answer yes. That's basically the set of requirements for filing: you received >$100K from a non-US person and you yourself are a US person. You have to report it, and unless it is taxable income - it is a gift. Taxable income is reported on the form 1040, gifts are reported on the form 3520. The fact that in Japan it is not considered a gift is irrelevant. Gift tax laws vary between countries, some (many) don't have gift taxes at all. But the reporting requirement is based on the US law and the US definition of \"\"gift\"\". As I said above, if it is not a gift per the US law, then it is taxable income (and then you report all of it regardless of the amount and pay taxes). Had they paid directly to the institution, you wouldn't need to count it as income/gift to you because you didn't actually receive the money (so no income) and it went directly to cover your qualified education expenses (so no gift), but this is not the case in your situation. Whether or not this will be reported by the IRS back to Japan - I don't know, but it was probably already reported to the authorities in Japan by the banks through which the transfers went through. As to whether it will trigger an audit - doesn't really matter. It was, most likely, reported to the IRS already by the receiving banks in the US, so not reporting it on your tax return (either as income or on form 3520) may indeed raise some flags.\"" }, { "docid": "344283", "title": "", "text": "\"While @JB's \"\"yes\"\" is correct, a few more points to consider: There is no tax penalty for withdrawing any time from a taxable investment, that is, one not using specific tax protections like 401k/IRA or ESA or HSA. But you do pay tax on any income or gain distributions you receive from a taxable investment in a fund (except interest on tax-exempt aka \"\"municipal\"\" bonds), and any net capital gains you realize when selling (or technically redeeming for non-ETF funds). Just like you do for dividends and interest and gains on non-fund taxable investments. Many funds have a sales charge or \"\"load\"\" which means you will very likely lose money if you sell quickly typically within at least several months and usually a year or more, and even some no-load funds, to discourage rapid trading that makes their management more difficult (and costly), have a \"\"contingent sales charge\"\" if you sell after less than a stated period like 3 months or 6 months. For funds that largely or entirely invest in equities or longer term bonds, the share value/price is practically certain to fluctuate up and down, and if you sell during a \"\"down\"\" period you will lose money; if \"\"liquid\"\" means you want to take out money anytime without waiting for the market to move, you might want funds focussing on short-term bonds, especially government bonds, and \"\"money market\"\" funds which hold only very short bonds (usually duration under 90 days), which have much more stable prices (but lower returns over the longer term).\"" }, { "docid": "593197", "title": "", "text": "\"Can the companies from USA give job to me (I am from New Zealand)? Job as being employee - may be tricky. This depends on the labor laws in New Zealand, but most likely will trigger \"\"nexus\"\" clause and will force the employer to register in the country, which most won't want to do. Instead you can be hired as a contractor (i.e.: being self-employed, from NZ legal perspective). If so, what are the legal documents i have to provide to the USA for any taxes? If you're employed as a contractor, you'll need to provide form W8-BEN to your US employer on which you'll have to certify your tax status. Unless you're a US citizen/green card holder, you're probably a non-US person for tax purposes, and as such will not be paying any tax in the US as long as you work in New Zealand. If you travel to the US for work, things may become tricky, and tax treaties may be needed. Will I have to pay tax to New Zealand Government? Most likely, as a self-employed. Check how this works locally. As for recommendations, since these are highly subjective opinions that may change over time, they're considered off-topic here. Check on Yelp, Google, or any local NZ professional review site.\"" }, { "docid": "347186", "title": "", "text": "Tax liability in US: You would need to determine if you are a resident alien or non resident alien. Resident alien are taxed normally as per US citizens. For the annual remuneration you have quoted it would be in the range of 25%. Refer http://www.moneychimp.com/features/tax_brackets.htm To determine if you are resident alien or non resident alien, you need to be present for certain period in US. There is also an exemption even if you meet this you can still be treated as non resident alien if your tax home is outside US [India in this case] Refer to the link for details to determine your category, the durations are for number of days in financial year, hence it matters when you are in US and the exact durations. http://www.irs.gov/taxtopics/tc851.html Also note that if you are assessed as resident alien, even the income from India will be taxed in US unless you declare there is no income in India. Tax liability in India: The tax liability in India would be depending on your NRI status. This again is tied to the financial year and the number of days you are in country. While the year you are going out of India you need to be away for atleast 183 days for you be considred are NRI. So if you are treated as Indian resident, you would have to pay tax in India on entire income. In the worst case, depending on the period you travel and the dates you travel, you could get classified as citizen in US as well as India and have to pay tax at both places. India and US do not have a dual tax avoidance treaty for individuals. Its there for certain category like small business and certain professions like teacher, research etc." }, { "docid": "43350", "title": "", "text": "You should very much nail down your planned expenses and profit. However beyond that you may have some better options to avoid taxation assuming all your plans go well. You should take into account the ability to avoid taxes on the sale of a primary residence. You could build the spec house, then move into the spec house. You could then sell the primary (avoiding any profit less than $500k filing jointly, assuming you meet the Home Sale Tax Exclusion requirements). You can then in another two years or so sell the spec house if you want and again avoid up to $500k in profit. http://www.nolo.com/legal-encyclopedia/the-250000500000-home-sale-tax-exclusion.html" }, { "docid": "206442", "title": "", "text": "\"It is important to remember that the stock price in principle reflects the value of the company, so the market cap should drop upon issuance of the the dividend. However, the above reasoning neglects to consider taxes, which make the question a bit more interesting. The key fact is that different investors are going to get taxed on the dividend to varying degrees, ranging from 20% for qualified dividends in the USA for a high-income individual in a taxable account (and even worse for non-qualified dividends) to 0% for tax-exempt nonprofits, retirement accounts, and low-income individuals. The high-tax investors are going to be a bit averse to paying tax on that dividend, whereas the tax-free investors are not. Hence in a tax-rational market the tax-free investors are going to be the ones buying right before a dividend and the tax-paying investors will be buying right afterwards. Tax-exempt investors could in principle make some amount of money buying dividends to keep them off the tax-paying investors' books. (Of course, the strategy could backfire if too many people did it all at once.) That said, the tax-payers have the tax disincentive to prevent them from fully exploiting the opposite strategy of selling just before a dividend. In particular, they are subject to capital gains tax when they sell at a profit (unless they have enough compensating capital losses), and it is to their after-tax profit to defer taxation by not trading. That said, the stock market has well-known irrationality when it comes to considering tax consequences, so logic based on assumed rationality of the market does not always apply to the extent one would expect. The foremost example of tax-irrationality is the so-called \"\"dividend paradox\"\", which basically states that corporations should favor stock buybacks (or perhaps loan repayment) to the complete exclusion of dividends because capital gains are taxed less harshly than dividends in a variety of ways, some of which are subtle: 1) Historically (although not currently in the USA for qualified dividends) the tax rate was higher for dividends. (In Canada, for example, dividends are taxed at twice the rate of capital gains.) 2) If you die holding appreciated stock then you (meaning your heirs) completely escape US the capital gains tax on the accrual during your lifetime. 3) Capital gains tax can be deferred by simply not selling. In comparison to dividends, this is roughly equivalent to getting a tax-free loan from the government which is invested for profit and paid at a later date after inflation has eaten away at the real value of the loan. For example, if all your stock investments increase by 10%/year but you sell every year, in a high-tax bracket situation you're total after-tax return will be only 8% per year. In contrast, if you hold the same investments for many many years and then sell, your total return will be nearly 10% per year, because you only pay 20% once (at the end). 4) A capital gain can often be neutralized by a capital loss in another stock, so that no tax results. If you loose money on a stock that is paying dividends, you're still going to have to pay tax on that dividend. There are companies that borrow money to pay out that taxable-dividend each quarter, which seems like gross tax malpractice on the part of the CFO. (If the dividend paradox doesn't make sense, first consider the case that you owned ALL the shares of a company. It wouldn't matter to you at all on a pre-tax basis whether you got a $1000 company buyback or a $1000 dividend, because after the buyback/dividend you'd still own the entire company and $1000. The number of shares would be reduced, but objecting that you owned fewer shares after the buyback would be like saying you have become shorter if your height is measured in inches rather than centimeters.) [Of course, in the case of many shareholders you can get burned by failing to sell into the buyback when the share price is too high, but that is another matter.]\"" }, { "docid": "11979", "title": "", "text": "Here's how I think about money. There are only 3 categories / contexts (buckets) that my earned money falls into. Savings is my emergency fund. I keep 6 months of total expenses (expenses are anything in the consumption bucket). You can be as detailed as you want with this area but I tend to leave a fudge factor. In other words, if I estimate that I spend approximately $3,000 a month in consumption dollars then I'll save $3,500 times 6 in the bank. This money needs to be liquid. Some people use a HELOC, other people use their ROTH contributions. In any case, you need to put this money some place you can get access to it in case you go from accumulation (income exceed expenses) to decumulation mode (expenses exceed income). This money is distinct from consumption which I will cover in paragraph three. Investments are stocks, bonds, income producing real estate, small businesses, etc. These dollars require a strategy. The strategy can include some form of asset allocation but more importantly a timeline. These are the dollars that are working for you. Each dollar placed here will multiply over time. Once you put a dollar here it shouldn't be taken out unless there is some sort of catastrophe that your savings can't handle or your timeline has been achieved. Notice that rental real estate is included so liquidating stocks to purchase rental real estate is NOT considered removing investment dollars. Just reallocating based on your asset allocation. This bucket includes 401k's, IRAs, all tax-sheltered accounts, non-sheltered brokerage accounts, and rental real estate. In general your primary residence is not included in this bucket. Some people include the equity of their primary residence in the investment column but it can complicate the equation and I prefer to leave it out. The consumption bucket is the most important bucket and the one you spend the most time with. It requires a budget. This includes your $5 magazine and your $200 bottle of wine. Anything in this bucket is gone. You can recover a portion of it by selling it on ebay for $3 (these are earned dollars) but the original $5 is still considered spent. The reason your thought process in this area is distinct from the other two, the decisions made in this area will have the biggest impact on your personal finances. Warren Buffett was famous for skimping on haircuts because they are worth thousands of dollars down the road if they are invested instead. Remember this is a zero-sum game so every $1 not consumed is placed in one of the other buckets. Once your savings bucket is full every dollar not consumed is sent to investments. Remember to include everything that does not fit in the other two buckets. Most people forget their car insurance, life insurance, tax bill at the end of the year, accountant bill, etc. In conclusion, there are three buckets. Savings, which serve as your emergency bucket. This money should not be touched unless you switch from accumulation to decumulation. Investments, which are your dollars that are working for you over time. They require a strategy and a timeline. Consumption, which are your monthly expenses. These dollars keep you alive and contribute to your enjoyment. This is a short explanation of my use of money. It can get as complicated and detailed as you want it to be but as long as you tag your dollars correctly you'll be okay IMHO. HTH." }, { "docid": "9158", "title": "", "text": "I believe that tax will be withheld (at 30%?) on dividends paid to non-residents. You can claim it back if your country has a tax treaty with the USA, but you will need to file. You probably also need to file a W-series withholding form (eg a W9-BEN). Interesting question. I would like to hear a more definitive answer." }, { "docid": "561695", "title": "", "text": "\"The short answer is that there is no US tax due if all you are doing is moving assets held abroad to the US. Whether you are a \"\"returning\"\" US citizen (or will continue your residence in the Philippines) is not relevant to this. The long answer is that you may be liable for a lot of other fines and taxes if you have not been doing any of several things correctly. As a US citizen, you are required to declare your worldwide income on your US income tax returns. Have you been filing US income tax returns during your time abroad? and have you been declaring the income that you have received from non-US sources each year? This includes wages, interest, dividends, capital gains, rental income from real estate, gambling income, lottery winnings, Nobel prizes, everything. If you have been paying income tax to other countries on this income, then it is generally possible to get a deduction for this tax payment from the income that will be taxed by the US (or a credit for the tax payment against your US Federal income tax liability) depending on the existence of tax treaties or (when the US Senate refuses to approve a tax treaty) a Double Taxation Avoidance Agreement between the US and other countries. In some cases, foreign earned income up to a certain limit is not taxed by the US at all. Even if you have been filing US income tax returns correctly, and can thus account for the $45,000 in your savings account, or you received that money as a gift or inheritance and can account for it on that basis, have you been filing reports with the US Treasury since the year when the total value of all your foreign bank accounts and other financial assets (stocks and bonds etc but not real estate) first exceeded $10,000? In prior years, this was a matter of filling out and submitting Form TD F 90-22.1 but more recently (since 2010?), you need to fill out and submit FinCEN Form 114. Have you been submitting the required documentation all along? Note that there are severe penalties for failure to fine FinCEN Form 114, and these penalties do not get waived by tax treaties. In summary, you might (or you might not) have several other tax or legal issues to worry about than just taxes on the transfer of your money from the Philippines to the US.\"" }, { "docid": "299591", "title": "", "text": "The home owner does not start foreclosure, the bank decides when to foreclose. Therefore you cannot really decide a time to foreclose if you are trying to time the decision. The process You miss payments, and the banks will send you a late notice for the missing payments. Expect many notices. The bank will call you at home, on your cell phone and at work. They will mail you letters regarding the missing payments. If you continue to miss payments, the bank will probably demand the loan be paid in full. You will owe the bank the full balance of the principle, all past due interest, all past due late charges and junk fees. The bank won't even take a normal monthly payment from you should you try to pay your regular payment again. Some law enforcement will notify you on the bank's intent to foreclose. The bank has begun legal proceedings. Legal notices are published in the local newspaper. Soon the notices and the legal waiting period will expire. Court proceedings happen. The court will then allow the bank to foreclose. Notices to into the paper again about the updated status of the foreclosure. The house is sold at auction. Money from the auction is used to pay taxes owned, then mortgages, then other liens or creditors who file. Further debt for the home owner Taxes When sold, if the mortgage debt exceeds the home's fair market value, US Federal Tax rules say the selling price as the fair market value. The fair market value can still be higher than the tax basis (which I think is the value of the house at the time of original purchase plus improvements.). If the fair market value is higher, you will own taxes on sale. However tax rules in the US say if you have owned the home more than two years and make less than $250,000 in the transaction ($500,000 if married) you will not owe any tax. State taxes can be different. Additionally, if the mortgage lender forgives the debt and doesn't create a deficiency, that income is taxable as well. This is more an more common these days. There are exceptions if the home is your primary residence. This whole process an take several months to occur, but depends on where you live. If you continue to live in the home after the auction, the new owner must evict you from the property which is another set of legal proceedings. Your credit and ability to buy are home will be damaged for the next several years. I am not so sure on how PMI works for the banks, but I know they are getting some money back." }, { "docid": "269646", "title": "", "text": "I find that there are two violation of law , prima facie , if someone earns money by depositing in the online account and then not reporting it ( including in his total income for the year ) and not bringing in India. Income Tax Act violation 1. It is simply comcealment liable for penalty & prosecution under I.T.Act. 2. You should know that anyone who is resident of India as per income Tax Act and having taxable income ( gross total income exceeding exemption limit) will have to fill up the column in his/her income tax return whether Previously these column were not in the Income Tax Return. So , now anyone who is liable to file return of Income can be tried for false return if he has hiddne assets aborad. 2. FEMA violation RBI permits remittance under Liberalized Remittance Scheme. However this scheme can not be used for certain purpose . It is important to examine whether RBI prohibits use of remittance for any entity or business you have described. You can read following FAQ on RBI site Q. 30. What are the prohibited items under the Scheme? Ans. The remittance facility under the Scheme is not available for the following: i) Remittance for any purpose specifically prohibited under Schedule-I (like purchase of lottery tickets/sweep stakes, proscribed magazines, etc.) or any item restricted under Schedule II of Foreign Exchange Management (Current Account Transactions) Rules, 2000; ii) Remittance from India for margins or margin calls to overseas exchanges / overseas counter-party; iii) Remittances for purchase of FCCBs issued by Indian companies in the overseas secondary market; iv) Remittance for trading in foreign exchange abroad; v) Remittance by a resident individual for setting up a company abroad; vi) Remittances directly or indirectly to Bhutan, Nepal, Mauritius and Pakistan; vii) Remittances directly or indirectly to countries identified by the Financial Action Task Force (FATF) as “non co-operative countries and territories”, from time to time; and viii) Remittances directly or indirectly to those individuals and entities identified as posing significant risk of committing acts of terrorism as advised separately by the Reserve Bank to the banks. You will have to examine , if the remittance was NOT done for purpose not allowed by RBI under LRS . If you clear this , you can say there is no violation and your violation is restricted to I.T.Act only." }, { "docid": "256395", "title": "", "text": "With a question like this you should talk to a tax professional who knows about international tax and knows about both the UK and the country you will be working in. They will give you up to date advice on what can be an extremely complex question. However to get you started I'll tell you what I was told when I did this nearly twenty years ago. It's all about whether you are resident in the UK for tax purposes or not. If you are, you will pay UK tax. If not, you wont (assuming you are being paid outside the UK - check with your professional exactly what is involved). In those days you could be counted as 'non resident' if you spent a complete period of twelve months outside the UK. You can make occasional visits to the UK without invalidating that. Again, check exactly how much you are allowed to return while still being not resident. Usually you will have to pay tax in the country where you are resident, but check the rules there. With some skilful timing you may be able to be considered non-resident in bouth countries, at least for some of the time. Again, your tax professional will know. The bank account question - again get a professional. I don't think it's a problem, but you may have to establish that you are being paid in the foreign country. In general you are going to need an account in the country where you work, so if its a problem get paid there and transfer any money you need in the UK." }, { "docid": "428533", "title": "", "text": "\"If you have income - it should appear on your tax return. If you are a non-resident, that would be 1040NR, with the eBay income appearing on line 21. Since this is unrelated to your studies, this income will not be covered by the tax treaties for most countries, and you'll pay full taxes on it. Keep in mind that the IRS may decide that you're actually having a business, in which case you'll be required to attach Schedule C to your tax return and maybe pay additional taxes (mainly self-employment). Also, the USCIS may decide that you're actually having a business, regardless of how the IRS sees it, in which case you may have issues with your green card. For low income from occasional sales, you shouldn't have any issues. But if it is something systematic that you spend significant time on and earn significant amounts of money - you may get into trouble. What's \"\"systematic\"\" and how much is \"\"significant\"\" is up to a lawyer to tell you.\"" }, { "docid": "124630", "title": "", "text": "In the United States taxes on the sale of a principal residence are based on the difference between the sale price and the cost of the home. Assuming you meet the requirements you can shelter 250,000 or 500,000 of gains from the sale of your principal residence. This calculation is not related to the loan balance. The basic equation is sales price minus purchase price. It get a little more complex because some costs to purchase and sell the home are included in the calculation, or if you made renovations to the house that will increase your costs and decrease your gains. Trying to decrease the loan balance just before selling the house would just be paying yourself that money at the settlement table. It could save you some money on interest between now and settlement but emptying your bank account to save a few bucks doesn't seem worth it. I would also prefer to have the money in the bank to pay for some expenses that will popup getting the house sold, you moving, and the settlement date." }, { "docid": "588345", "title": "", "text": "\"This sounds like a FATCA issue. I will attempt to explain, but please confirm with your own research, as I am not a FATCA expert. If a foreign institution has made a policy decision not to accept US customers because of the Foreign Financial Institution (FFI) obligations under FATCA, then that will of course exclude you even if you are resident outside the US. The US government asserts the principle of universal tax jurisdiction over its citizens. The institution may have a publicly available FATCA policy statement or otherwise be covered in a new story, so you can confirm this is what has happened. Failing that, I would follow up and ask for clarification. You may be able to find an institution that accepts US citizens as investors. This requires some research, maybe some legwork. Renunciation of your citizenship is the most certain way to circumvent this issue, if you are prepared to take such a drastic step. Such a step would require thought and planning. Note that there would be an expatriation tax (\"\"exit tax\"\") that deems a disposition of all your assets (mark to market for all your assets) under IRC § 877. A less direct but far less extreme measure would be to use an intermediary, either one that has access or a foreign entity (i.e. non-US entity) that can gain access. A Non-Financial Foreign Entity (NFFE) is itself subject to withholding rules of FATCA, so it must withhold payments to you and any other US persons. But the investing institutions will not become FFIs by paying an NFFE; the obligation rests on the FFI. PWC Australia has a nice little writeup that explains some of the key terms and concepts of FATCA. Of course, the simplest solution is probably to use US institutions, where possible. Non-foreign entities do not have foreign obligations under FATCA.\"" }, { "docid": "241804", "title": "", "text": "my tax liabilities in India on my stock profit in US You would need to pay tax on the profit in India as well after you have become resident Indian. India and US have a double tax avoidance treaty. Hence if you have already paid tax in US, you can claim benefit and pay balance if any. For example if you US tax liability is 20 USD and Indian liability is USD 30, you just need to pay 10 USD. If the Indian tax liability is USD 20 or less you don't need to pay anything. what if in future I transfer all my US money to India? The funds you have earned in US while you were Non-Resident is tax free in India. You can bring it back any-time within a period of 7 years." } ]

[ { "docid": "140977", "title": "", "text": "Yes, legitimate, documented, expenses are written off against that income." } ]

[ { "docid": "349672", "title": "", "text": "The answer is simple. You can generally claim a deduction for an expense if that expense was used to derive an income. Of course social policy sometimes gets in the way and allows for deductions where they usually wouldn't be allowed. Your rent is not tax deductible because this expense is not used to derive your income. If however you were working from your home, example - you had a home based business, and you dedicated a part of your home for your work, say an office, then part of your rent may then become tax deductible." }, { "docid": "524879", "title": "", "text": "\"Yes, your business needs to be in the business of making money in order for you to deduct the expenses associated with it. I suppose in theory this could mean that if you take in $10,000 and spend $30,000 every year, you not only don't get a net deduction of $20,000 (your loss) but you have to pay tax on $10,000 (your revenue). However this is super fixable. Just only deduct $9500 of your expenses. Tada! Small profit.For all the gory details, including how they consider whether you have an expectation of profits, see http://www.cra-arc.gc.ca/E/pub/gl/p-176r/p-176r-e.html This \"\"expectation of profit\"\" rule appears to apply to things like \"\"I sell home décor items (or home decorating advice) and therefore need to take several multi week trips to exotic vacation destinations every year and deduct them as business expenses.\"\" If you're doing woodworking or knitting in your home and selling on Etsy you don't particularly have any expenses. It's hard to imagine a scenario where you consistently sell for less than the cost of materials and then end up dinged on paying tax on revenue.\"" }, { "docid": "97636", "title": "", "text": "Does it make sense to report withheld tax income as an additional income? Is it required by the IRS? Is $T deductible? This is what is called imputed income. The ticket is an income for you, but the company doesn't want you to pay tax on it. But you have to. But they want to be nice to you and give you the ticket on their buck. But that's the law. So what have the accountants invented? Imputed income. The company raises your salary in the amount of taxes paid (+some, but that's negligible), in addition to the actual ticket. So it seems, to you, that you got the ticket for free. The IRS doesn't see the ticket, it just sees that you got a $T+$X bonus and paid $T taxes. The fact that the $X you got in form of a ticket doesn't matter to them. Re your edit - you cannot deduct anything, since you can only deduct unreimbursed expenses, whereas $X is not at all an expense for you (you didn't buy that ticket, the company did), and $T is taxes, which are not deductible (its not an expense). In other words, had C not have been nice, I would be in a better position! No. Your net pay shouldn't be affected, technically, so from your perspective you just got a plane ticket for free. Had C not been nice, you would still not be able to deduct the whole cost of $X, because unreimbursed employee expenses have a 2% AGI threshold." }, { "docid": "70488", "title": "", "text": "If the fee is paid directly from the account, then unfortunately no, you can not deduct it. It's probably too late now, but in the future you can ask the financial institution if they will allow you to write them a separate check to cover the fees. If they allow that then you can preserve your tax free account balance, and potentially deduct the fees too. More details here. Update: as discussed in the comments below, a strict interpretation of the IRS description of deductible investment expenses may not include expenses for a Roth IRA, even if they are paid outside of the account. However, there seems to be conflicting interpretations of this IRS rule, so I would advise speaking to an accountant or the IRS directly for clarification. But even if you determine you cannot deduct the fees, paying for them outside of the Roth is still a good idea because it enables you to maintain a higher balance in your tax advantaged account." }, { "docid": "338700", "title": "", "text": "It sounds like something is getting lost in translation here. A business owner should not have to pay personal income tax on business expenses, with the caveat that they are truly business expenses. Here's an example where what you described could happen: Suppose a business has $200K in revenue, and $150K in legitimate business expenses (wages and owner salaries, taxes, services, products/goods, etc.) The profit for this example business is $50K. Depending on how the business is structured (sole proprietor, llc, s-corp, etc), the business owner(s) may have to pay personal income tax on the $50K in profit. If the owner then decided to have the business purchase a new vehicle solely for personal use with, say, $25K of that profit, then the owner may think he could avoid paying income tax on $25K of the $50K. However, this would not be considered a legitimate business expense, and therefore would have to be reclassified as personal income and would be taxed as if the $25K was paid to the owner. If the vehicle truly was used for legitimate business purposes then the business expenses would end up being $175K, with $25K left as profit which is taxable to the owners. Note: this is an oversimplification as it's oftentimes the case that vehicles are partially used for business instead of all or nothing. In fact, large items such as vehicles are typically depreciated so the full purchase price could not be deducted in a single year. If many of the purchases are depreciated items instead of deductions, then this could explain why it appears that the business expenses are being taxed. It's not a tax on the expense, but on the income that hasn't been reduced by expenses, since only a portion of the big ticket item can be treated as an expense in a single year." }, { "docid": "442142", "title": "", "text": "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...)." }, { "docid": "367754", "title": "", "text": "I feel the need to separate my freelance accounts from my personal accounts. Yes, you should. Should I start another savings account or a current account? Do you need the money for daily spending? Do you need to re-invest in your business? Use a current account. If you don't need the money for business expenses, put it away in your savings account or even consider term deposits. Don't rule out a hybrid approach either (some in savings account, some in current account). What criteria should I keep in mind while choosing a bank? (I thought of SBI since it has a lot of branches and ATMs). If you are involved in online banking and that is sufficient for most of your needs, bank and ATM locations shouldn't matter all that much. If you are saving a good chunk of money, you want to at least have that keep up with inflation. Research bank term deposit interest rates. The tend to be higher than just having your money sit in a savings account. Again, it depends on how and when you expect to need the money. What do I keep in mind while paying myself? Paying yourself could have tax implications. This depends on how are set up to freelance. Are you a business entity or are you an individual? You should look in to the following in India: The other thing to consider is rewarding yourself for the good work done. Pay yourself a reasonable amount. If you decide to expand and hire people going forward, you will have a better sense of business expenses involved when paying salaries. Tips on managing money in the business account. This is a very generic question. I can only provide a generic response. Know how much you are earning and how much your are putting back in to the business. Be reasonable in how much you pay yourself and do the proper research and paperwork from a taxation point of view." }, { "docid": "522671", "title": "", "text": "When you pay interest on a loan used to fund a legitimate investment or business activity, that interest becomes an expense that you can deduct against related income. For example, if you borrowed $10k to buy stocks, you could deduct the interest on that $10k loan from investment gains. In your case, you are borrowing money to invest in the stock of your company. You would be able to deduct the interest expense against investment gain (like selling stock or receiving dividends), but not from any income from the business. (See this link for more information.) You do not have to pay taxes on the interest paid to your father; that is an expense, not income. However, your father has to pay taxes on that interest, because that is income for him." }, { "docid": "349424", "title": "", "text": "\"As you are earning an income by working in India, you are required to pay tax in India. If you contract is of freelance, then the income earned by you has to be self declared and taxes paid accordingly. There are some expenses one can claim, a CA should be able to guide you. Not sure why the Swiss comapny is paying taxes?. Are they depositing this with Income Tax, India, do they have a TAN Number. If yes, then you don't need to pay tax. But you need to get a statement from your company showing the tax paid on behalf of you. You can also verify the tax paid on your behalf via \"\"http://incometaxindia.gov.in/26ASTaxCreditStatement.asp\"\" you cna register. Alternatively if you have a Bank Account in India with a PAN card on their records, most Banks provide a link to directly see\"" }, { "docid": "47957", "title": "", "text": "Yes, but make sure you issue a 1099 to these freelancers by 1/31/2016 or you may forfeit your ability to claim the expenses. You will probably need to collect a W-9 from each freelancer but also check with oDesk as they may have the necessary paperwork already in place for this exact reason. Most importantly, consult with a trusted CPA to ensure you are completing all necessary forms correctly and following current IRS rules and regulations. PS - I do this myself for my own business and it's quite simple and straight forward." }, { "docid": "84963", "title": "", "text": "\"Your corporation would file a corporate income tax return on an annual basis. One single month of no revenue doesn't mean much in that annual scheme of things. Total annual revenue and total annual expenses are what impact the results. In other words, yes, your corporation can book revenues in (say) 11 of 12 months of the year but still incur expenses in all months. Many seasonal businesses operate this way and it is perfectly normal. You could even just have, say, one super-awesome month and spend money the rest of the year. Heck, you could even have zero revenue but still incur expenses—startups often work like that at first. (You'd need investment funding, personal credit, a loan, or retained earnings from earlier profitable periods to do that, of course.) As long as your corporation has a reasonable expectation of a profit and the expenses your corporation incurs are valid business expenses, then yes, you ought to be able to deduct those expenses from your revenue when figuring taxes owed, regardless of whether the expenses were incurred at the same approximate time as revenue was booked—as long as the expense wasn't the acquisition of a depreciable asset. Some things your company would buy—such as the computer in your example—would not be fully deductible in the year the expense is incurred. Depreciable property expenses are deducted over time according to a schedule for the kind of property. The amount of depreciation expense you can claim for such property each year is known as Capital Cost Allowance. A qualified professional accountant can help you understand this. One last thing: You wrote \"\"write off\"\". That is not the same as \"\"deduct\"\". However, you are forgiven, because many people say \"\"write off\"\" when they actually mean \"\"deduct\"\" (for tax purposes). \"\"Write off\"\", rather, is a different accounting term, meaning where you mark down the value of an asset (e.g. a bad loan that will never be repaid) to zero; in effect, you are recognizing it is now a worthless asset. There can be a tax benefit to a write-off, but what you are asking about are clearly expense deductions and not write-offs. They are not the same thing, and the next time you hear somebody using \"\"write off\"\" when they mean \"\"deduction\"\", please correct them.\"" }, { "docid": "153377", "title": "", "text": "\"Hobby expenses are not tax deductible. Business expenses are, but only if it's a bona fide business. First they look at profitability: if you reported a net profit (i.e. paid taxes) in your first 3 years, they will believe you rant on Youtube for a living. Remember, by the time they get around to auditing you, you'll likely be well into, or through, your third year. There is an exception for farms. Other than that, if you lose money year after year, you better be able to show that you look, walk and quack like a business; and one with a reasonable business reason for delayed profitability. For instance Netflix's old business model of mailing DVDs had very high fixed infrastructure expense that took years to turn profitable, but was a very sensible model. They're fine with that. Pets.com swandived into oblivion but they earnestly tried. They're fine with that too. You can't mix all your activities. If you're an electrician specializing in IoT and smart homes, can you deduct a trip to the CES trade show, you bet. Blackhat conference, arguable. SES? No way. Now if you had a second business of a product-reco site which profited by ads and affiliate links, then SES would be fine to deduct from that business. But if this second business loses money every year, it's a hobby and not deductible at all. That person would want separate accounting books for the electrician and webmaster businesses. That's a basic \"\"duck test\"\" of a business vs. a hobby. You need to be able to show how each business gets income and pays expense separate from every other business and your personal life. It's a best-practice to give each business a separate checking account and checkbook. You don't need to risk tax penalties on a business-larva that may never pupate. You can amend your taxes up to 3 years after the proper filing date. I save my expense reciepts for each tax year, and if a business becomes justifiable, I go back and amend past years' tax forms, taking those deductions. IRS gives me a refund check, with interest!\"" }, { "docid": "389654", "title": "", "text": "I am also neither an attorney nor a tax advisor. Yes, the rent money you pay to your friend is taxable income, but suddenly all kinds of expenses around the house - including a fraction of the interest paid on the mortgage - become tax deductible. For example, let's say that the mortgage is $1000 / month and you pay your friend $500 / month. If you live in 50% of the house, then he can deduct 50% (plus or minus) of the expenses associated with owning the house, including: All of these things (50% of them, anyway) become tax deductible. It'd be quite possible for him to take a loss on the endeavor and actually reduce his taxes every year. Until it comes time to sell; selling a property that has been used as a rental is more taxable than selling a property that has been a personal residence." }, { "docid": "484352", "title": "", "text": "\"11 / 111 / 11111 looks like the (old) tax number: it is used by the tax office to know who you are, it isn't good at all for the spanish company. It would even change when you move inside Germany. VAT IDs are not exclusive to GmbHs (but a GmbH always has one). As freelancers you can get at VAT ID but you don't always have to. The tax office offers a \"\"small business\"\" treatment (§ 19 UStG) for freelancers, kind of an opt-out for the VAT ID. As you do not have a VAT ID, this is probably your case. It means So what to do? If I were you, I'd write them that according to §19 UStG and the European Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, TITLE XII CHAPTER 1 \"\"Special scheme for small enterprises\"\" you were not assigned a VAT ID, and VAT is not applicable to your bill. The fact that VAT is not applicable in this case does not mean that they are allowed to refuse payment. I heard a rumour (but don't really know) that a number similar to the VAT ID is planned also for freelancers (Wirtschafts-IDNr.). You could go to your tax office and ask them about. Maybe that yields a number that satisfies spanish burocracy. AFAIK, you can go to your tax office and ask them to give you a real VAT number. But careful: that has the serious drawback that you have to do do an advance VAT estimate and pay that to the tax office at least quarterly (for bigger business monthly). And (AFAIK) you are not allowed to change back to the small business treatment for several years.\"" }, { "docid": "89157", "title": "", "text": "My understanding is that it works as you describe. Is this really a loophole? You could call it that if you want, but let's look at what really is happening. You get the tax deduction when you put money into the HSA, not when you take money out. And you can only put money in when you have the HSA-eligible High Deductible Health Plan (HDHP) in place. While you had the non-HSA eligible plan in place (presumably a more expensive low deductible health plan), you somehow incurred $5000 of out-of-pocket expenses. This is real money that you had to pay out. Finally, you went back to the HDHP and began contributing to the HSA again, taking the tax deduction as you put money in, subject to the contribution limits. The money that is in the HSA is yours, and you had legitimate out-of-pocket medical expenses. Are you really cheating anybody out of anything if you choose to take that money back out? I don't think so." }, { "docid": "187085", "title": "", "text": "During World War II, the United States (US) instituted wage and price controls. To attract better employees, companies would offer benefits to get around salary limits. Health insurance was one of the more successful benefits. At that time, income taxes were newer and there were many ways to evade them. Companies could generally deduct expenses. So at that time, health care was deductible because everything was. And at that time, only wages were taxable compensation from employer to employee. Since that time, many other benefits have become non-deductible for employers, e.g. housing or the reduced deduction for meals and entertainment. But health care is generally regarded as different, as a necessity. While everyone needs to eat, not everyone needs to eat at a $100 a meal restaurant. People who need expensive health care really need it. People who eat expensive food just prefer it. And of course, health care is more intermittent where food is relatively consistent. You don't need ten thousand calories one day and zero the next. But some families have no health care expenses in a year while another might have cancer or a pregnancy. Note that medical care expenses can be deducted for individuals if they are large enough in aggregate and you itemize. And of course both businesses and workers have incentives to maintain the current system with deductibility. Health insurance is a common benefit. Housing is not (although it's worth noting that travel housing and meals are deductible). So there have been few people impacted by making housing taxable while many people would be impacted by taxable health insurance. You can deduct health insurance costs if self-employed. It's also not true that health insurance is the only benefit with preferential tax treatment. Retirement and child care are also deductible. Even meals and housing can be deducted in certain circumstances. The complex rules about what and how much is deductible. There have been rumbles about normalizing the tax treatment of health insurance and medical care, but there is a lot of opposition. Insurance companies oppose making all healthcare expenses deductible, as that reduces their effective benefit. They would prefer only insurance premiums be deductible. Traditionally employed individuals oppose making health insurance taxable, as that would increase their taxes. So the situation persists. There isn't quite enough support to move in either direction, although the current compromise is economically silly." }, { "docid": "130631", "title": "", "text": "\"In the US you are not required to have a corporation to use business expenses to offset your income. The technical term you need is \"\"deducting business expenses\"\", and in matters of taxes it's usually best to go straight to the horse's mouth: the IRS's explanations Deducting Business Expenses Business expenses are the cost of carrying on a trade or business. These expenses are usually deductible if the business operates to make a profit. What Can I Deduct? Cost of Goods Sold, Capital Expenses, Personal versus Business Expenses, Business Use of Your Home, Business Use of Your Car, Other Types of Business Expenses None of this requires any special incorporation or tax arrangements, and are a normal part of operating a business. However, there is a bit of a problem with your scenario. You said you \"\"invested\"\" into a business, but you mentioned buying specific things for the business which is not generally how one accounts for investment. If you are not an owner/operator of the business, then the scenario is not so straight-forward, as you can't simply claim someone else's business expenses as your own because you invested in it. Investments are taxed differently than expenses, and based upon your word choices I'm concerned that you could be getting yourself into a bit of a pickle. I would strongly advise you to speak with a professional, such as a Certified Public Accountant (CPA), to go over your current arrangement and advise you on how you should be structuring your ongoing investment into this shared business. If you are investing you should be receiving equity to reflect your ownership (or stock in the company, etc), and investments of this sort generally cannot be deducted as an expense on your taxes - it's just an investment, the same as buying stock or CDs. If you are just buying things for someone else's benefit, it's possible that this could be looked upon as a personal gift, and you may be in a precarious legal position as well (where the money is, indeed, just a gift). And gifts of this sort aren't deductible, either. Depending on how this is all structured, it's possible that you should both consider a different form of legal organization, such as a formal corporation or at least an official business partnership. A CPA and an appropriate business attorney should be able to advise you for a nominal (few hundred dollars, at most) fee. If a new legal structure is advisable, you can potentially do the work yourself for a few hundred dollars, or pay to have it done (especially if the situation is more complex) for a few hundred to a few thousand. That's a lot less than you'd be on the hook for if this business is being accounted for improperly, or if either of your tax returns are being reported improperly!\"" }, { "docid": "472824", "title": "", "text": "You are either VAT registered or you are not VAT registered. If you are not VAT registered, then you are not allowed to charge customers VAT, and you cannot reclaim VAT that you are paying. You are however allowed to deduct the cost of goods including VAT from your expenses. So if you buy a computer for £1000 + £200 VAT, and you can deduct the computer as an expense to reduce your profits that you pay income tax for, then the expense is £1,200 and not just £1,000. If you are VAT registered, then you MUST charge every customer 20% VAT. Business customers don't mind at all, but private customers will be happier if you don't charge VAT because your bills will be a lot lower. You take all the VAT that you received, then subtract all the VAT that you paid for business expenses and that you have invoices for, and send the remainder to HMRC four times a year. (The reason that businesses don't mind paying VAT is because they can in turn deduct the VAT they pay you from the VAT that they received and for every pound they give you, they give one pound less to HMRC). Note that when you have expenses that are deductible from your profits, you can now only deduct the cost excluding VAT. On the other hand, the VAT you receive doesn't count as income and doesn't lead to profits that you need to pay income tax for. It's your decision whether you want to be VAT registered or not, unless your revenue exceeds some limit (somewhere between £70,000 and £80,000 per year) where you must register for VAT." }, { "docid": "144190", "title": "", "text": "You can receive funds from US Client as an individual. There is no legal requirement for you to have a company. If the transactions are large say more than 20 lacs in a year, its advisable to open a Private Ltd. Although its simple opening & Registering a company [A CA or a Laywer would get one at a nominal price of Rs 5000] you can do yourself. Whatever be the case, its advisable to have seperate accounts for this business / professional service transactions. Maintain proper records of the funds received. There are certain benefits you can claim, a CA can help you. Paying taxes in Advance is your responsibility and hence make sure you keep paying every quarter as advance tax. Related questions Indian citizen working from India as freelancer for U.S.-based company. How to report the income & pay tax in India? Freelancer in India working for Swiss Company Freelancing to UK company from India How do I account for money paid to colleagues out of my professional income?" } ]

[ { "docid": "201954", "title": "", "text": "If it's a legitimate cost of doing business, it's as deductible as any other cost of doing business. (Reminder: be careful about the distinctions between employee and contractor; the IRS gets annoyed if you don't handle this correctly.)" } ]

[ { "docid": "327263", "title": "", "text": "First of all, Dilip's answer explains well how the business deductions generally work. For most (big) expenses you depreciate it. However, in some cases you need to capitalize it, which is another accounting method. When you capitalize your expense, it becomes part of the basis of the product you're creating. Since you're an engineer, this might be relevant for you. Talk to your tax adviser. How exactly you deduct/depreciate/capitalize things, and what expense goes which way depends greatly on the laws and jurisdictions. Even in the US, different states have different laws, and the IRS and State laws don't have to conform (unfortunately). For example, the limitations on Sec. 179 deduction in 2010-2011 were 20 times higher on Federal level than in the State of California. This could have lead to cases where you fully deducted your expense on your Federal tax return, but need to continue and depreciate it on your State return (or vice versa). Good tax adviser is crucial to avoid or manage these cases." }, { "docid": "524879", "title": "", "text": "\"Yes, your business needs to be in the business of making money in order for you to deduct the expenses associated with it. I suppose in theory this could mean that if you take in $10,000 and spend $30,000 every year, you not only don't get a net deduction of $20,000 (your loss) but you have to pay tax on $10,000 (your revenue). However this is super fixable. Just only deduct $9500 of your expenses. Tada! Small profit.For all the gory details, including how they consider whether you have an expectation of profits, see http://www.cra-arc.gc.ca/E/pub/gl/p-176r/p-176r-e.html This \"\"expectation of profit\"\" rule appears to apply to things like \"\"I sell home décor items (or home decorating advice) and therefore need to take several multi week trips to exotic vacation destinations every year and deduct them as business expenses.\"\" If you're doing woodworking or knitting in your home and selling on Etsy you don't particularly have any expenses. It's hard to imagine a scenario where you consistently sell for less than the cost of materials and then end up dinged on paying tax on revenue.\"" }, { "docid": "153377", "title": "", "text": "\"Hobby expenses are not tax deductible. Business expenses are, but only if it's a bona fide business. First they look at profitability: if you reported a net profit (i.e. paid taxes) in your first 3 years, they will believe you rant on Youtube for a living. Remember, by the time they get around to auditing you, you'll likely be well into, or through, your third year. There is an exception for farms. Other than that, if you lose money year after year, you better be able to show that you look, walk and quack like a business; and one with a reasonable business reason for delayed profitability. For instance Netflix's old business model of mailing DVDs had very high fixed infrastructure expense that took years to turn profitable, but was a very sensible model. They're fine with that. Pets.com swandived into oblivion but they earnestly tried. They're fine with that too. You can't mix all your activities. If you're an electrician specializing in IoT and smart homes, can you deduct a trip to the CES trade show, you bet. Blackhat conference, arguable. SES? No way. Now if you had a second business of a product-reco site which profited by ads and affiliate links, then SES would be fine to deduct from that business. But if this second business loses money every year, it's a hobby and not deductible at all. That person would want separate accounting books for the electrician and webmaster businesses. That's a basic \"\"duck test\"\" of a business vs. a hobby. You need to be able to show how each business gets income and pays expense separate from every other business and your personal life. It's a best-practice to give each business a separate checking account and checkbook. You don't need to risk tax penalties on a business-larva that may never pupate. You can amend your taxes up to 3 years after the proper filing date. I save my expense reciepts for each tax year, and if a business becomes justifiable, I go back and amend past years' tax forms, taking those deductions. IRS gives me a refund check, with interest!\"" }, { "docid": "66943", "title": "", "text": "\"The bill proposed to \"\"Under existing law, employers may take tax deductions for the costs associated with moving jobs out of the country. The proposed legislation would have eliminated that, and used the resulting new revenue to fund a 20 percent tax credit for the costs companies run up \"\"insourcing\"\" labor back into the U.S.\"\" From http://abcnews.go.com/m/blogEntry?id=16816660 as found by beermethestrength. I will explain this in an example below. Lets use allen edmonds. I manufacture shoes and sell them in the US. The facts we will assume is Revenue or sales is $100. Manufacturing cost is $50. Tax rate is 10%. Therefore, Profit before tax is $100 -$50 = $50. Tax is $5. Net profit is $45. However, suppose offshoring to Canada saves money. They say please and thank you at every opportunity and the positive work environment allows them to work faster. Correspondingly to make the same number of shoes our costs has decreased because we pay less for labour. The manufacturing cost decreases to $30. However, we incur costs to move such as severance payments to layoff contracted employees. (I promise to hire you and pay $1 a year for 2 years. I fire you at the end of the first year. To be fair, I pay you $1) However, it can be any legitimate expense under the sun. In this case we suppose this moving cost is $10. Revenue or sales is $100. Manufacturing cost is $30. Moving cost is $10. Tax rate is 10%. Profit before tax is $100 -$40 = $60. Tax is $6. Net profit is $54. Yay more jobs for Canadians. However, the legislation would have changed this. It would have denied that moving expense if you were moving out of the country. Therefore, we cannot consider $10 worth of expenses for tax purposes. Therefore Revenue or sales is $100. Manufacturing cost is $30. Tax rate is 10%. Profit before tax for tax purposes is $100 - $30 = $70. Tax is $7. Net profit for tax purposes is $63. However, my accounting/net/real profit is $53. I must deduct the $10 associated with moving. The difference between the two scenarios is $1. In general our net profit changes by our moving cost * our tax rate. There is no tax break associated with moving. In Canadian tax, any business expense in general can be deducted as long as it is legitimate and not specifically denied. I am uncertain but would assume US tax law is similar enough. Moving expenses in general are legitimate and not specifically denied and therefore can be deducted. Offshoring and onshoring are seen as legitimate business activities as in general companies do things to increase profit. (forget about patriotism for the moment). The bill was to make offshoring more expensive and therefore fewer companies would find offshoring profitable. However, republicans defeated this bill in congress. Most likely the house For completeness let us examine what would happen when we onshore (bring jobs from canada to us :( ). In our example, silly unions demand unrealistically high wages and increase our cost of manufacturing to $50 again. We decide to move back to the US because if it is the same everywhere for the sake of silly national pride we move our jobs back to the US. We incur the same moving cost of $10. Therefore we have Revenue or sales is $100. Manufacturing cost is $50. Moving cost of $10. Tax rate is 10%. Profit before tax for tax purposes is $100 - $60 = $40. Tax is $4. However, we are given a 20% tax credit for moving expense. $10 * .2 = 2. The government only assess us tax of 2. Net profit is $38. Tax credits are a one time deal so profit in the future will be $100 -$50 - $5 = $45. Same as the first example. insourcing = onshoring , outsourcing = offshoring for the purposes of this article. Not quite the same in real life.\"" }, { "docid": "291079", "title": "", "text": "There are too many qualifying questions like martial status, dependent status, annual income, etc. Your answer is most likely in the Form Pub 970 you referenced: Adjustments to Qualified Education Expenses If you pay qualified education expenses with certain tax-free funds, you cannot claim a deduction for those amounts If the grant is tax free, you can not claim deductions up to that amount. Even if you were able to expense all the educational expenses you list, I doubt you can exceed the grant disbursement disbursement amount. I'm not a tax professional, so take my advice for what it is worth." }, { "docid": "581265", "title": "", "text": "\"In the US tax system, you cannot \"\"write-off\"\" capital assets. You have to depreciate them, with very specific exceptions. So while you may be purchasing $4500 of equipment, your deduction may be significantly less. For example, computers are depreciated over the period of 5 years, so if you bought a $1000 computer - you write off $200/year until it is completely depreciated, not $1000 at once. There are exceptions however, for example - IRC Sec. 179 is one of them. But you should talk to a tax adviser (EA/CPA licensed in your State) about whether it is applicable to the specific expense you want to \"\"write off\"\" and to what extent. Also, keep in mind that State laws may not conform to the Federal IRC. While you may be able to use Sec. 179 or other exceptions and deduct your expenses on your Federal return, you may end up with a whole different set of deductions on your State return. And last but not least: equipment that you depreciated or otherwise \"\"wrote off\"\" that is later sold - is income to you, since depreciation/deduction reduces basis. Ah, and keep in mind - the IRS frowns upon Schedule C business that consistently show losses. If you have losses for more than 3 in the last 5 years - your business may be classified as \"\"hobby\"\", and deductions may be disallowed. But the bottom line is that yes, it is possible to end up with 0 tax liability with business income offset by business deductions. However, not for prolonged periods of time (not for years consistently, but first year may fly). Again - you should talk to a licensed tax adviser (EA/CPA licensed in your State). It is well worth the money. Do not rely on answers on free Internet forums as a tax advice - it is not.\"" }, { "docid": "546372", "title": "", "text": "You better consult with a tax adviser (EA or CPA) on this, my answer doesn't constitute such an advice. Basically, you're selling stuff on Kickstarter. No matter how they call it (projects, pledges, rewards - all are just words), you're selling stuff. People give you money (=pledges) and in return you're giving them tangible or intangible goods (=rewards). All the rest is just PR. So you will pay taxes on all the money you get, and you will be able to deduct some of the expenses (depends on whether its a business or a hobby, the deduction may be full or limited). It doesn't matter if you use LLC or your own account from the financial/taxation point of you, but it matters legally. LLC limits your personal liability, but do get a legal advice on this issue, and whether it is at all relevant for you. If you raise funds in 2012 you pay taxes on the money in 2012. If you go into production in 2013 - you can deduct expenses in 2013. If you're classified as a hobby, you'll end up paying full taxes in 2012 and deducting nothing in 2013. Talk to a tax adviser." }, { "docid": "107536", "title": "", "text": "Supposedly this also means that I am free from having to pay California corporate taxes? Not in the slightest. Since you (the corporate employee) reside in CA - the corporation is doing business in CA and is liable for CA taxes. Or, does this mean I am required to pay both CA taxes and Delaware fees? (In this case, minimal, just a paid agent from incorporate.com) I believe DE actually does have corporate taxes, check it out. But the bottom line is yes, you're liable for both CA and DE costs of doing corporate business (income taxes, registered agents, CA corp fee, etc). Is there any benefit at all for me to be a Delaware C-Corp or should I dissolve and start over. Or just re-incorporate as California LLC Unless you intend to go public anytime soon or raise money from VCs/investors - there's no benefit whatsoever in incorporating in DE. You should seek a legal advice with an attorney, of course, since benefits are legal issues (usually related to choosing jurisdiction for litigation etc). If you're a one-person freelancer, doing C-Corp was not the best decision as well. Tax-wise you'd be much better off with a S-Corp, or a LLC - both pass-through and have no (Federal) entity-level taxes. Corporate rates are generally higher than individual rates, and less deductions can be taken. In California, check with a CPA/EA licensed in the State, since both S-Corp and LLC would be taxed, and taxed differently." }, { "docid": "349424", "title": "", "text": "\"As you are earning an income by working in India, you are required to pay tax in India. If you contract is of freelance, then the income earned by you has to be self declared and taxes paid accordingly. There are some expenses one can claim, a CA should be able to guide you. Not sure why the Swiss comapny is paying taxes?. Are they depositing this with Income Tax, India, do they have a TAN Number. If yes, then you don't need to pay tax. But you need to get a statement from your company showing the tax paid on behalf of you. You can also verify the tax paid on your behalf via \"\"http://incometaxindia.gov.in/26ASTaxCreditStatement.asp\"\" you cna register. Alternatively if you have a Bank Account in India with a PAN card on their records, most Banks provide a link to directly see\"" }, { "docid": "316074", "title": "", "text": "\"I've been in a similar situation before. While contracting, sometimes the recruiting agency would allow me to choose between being a W2 employee or invoicing them via Corp-2-Corp. I already had a company set up (S-Corp) but the considerations are similar. Typically the C2C rate was higher than the W2 rate, to account for the extra 7.65% FICA taxes and insurance. But there were a few times where the rate offered was identical, and I still choose C2C because it enabled me to deduct many of my business expenses that I wouldn't have otherwise been able to deduct. In my case the deductions turned out to be greater than the FICA savings. Your case is slightly different than mine though in that I already had the company set up so my company related costs were \"\"sunk\"\" as far as my decision was concerned. For you though, the yearly costs associated with running the business must be factored in. For example, suppose the following: Due to these expenses you need to make up $3413 in tax deductions due to the LLC. If your effective tax rate on the extra income is 30%, then your break even point is approximately $8K in deductions (.3*(x+3413)=3413 => x = $7963) So with those made up numbers, if you have at least $8K in legitimate additional business expenses then it would make sense to form an LLC. Otherwise you'd be better off as a W2. Other considerations:\"" }, { "docid": "507107", "title": "", "text": "A non-resident alien is only allowed for deductions connected to producing a US-sourced income (See IRC Sec. 873). Thus you can only deduct things that qualify as business expenses, and State taxes on your wages. In addition you can deduct a bunch of stuff explicitly allowed (like tax preparation, charitable contributions, casualty losses, etc) but sales tax is not in that list." }, { "docid": "391619", "title": "", "text": "It would be unusual but it is possible that the expenses could be very high compared to your income. The IRS in pub 529 explains the deduction. You can deduct only unreimbursed employee expenses that are: Paid or incurred during your tax year, For carrying on your trade or business of being an employee, and Ordinary and necessary. An expense is ordinary if it is common and accepted in your trade, business, or profession. An expense is necessary if it is appropriate and helpful to your business. An expense doesn't have to be required to be considered necessary. The next part lists examples. I have cut the list down to highlight ones that could be large. You may be able to deduct the following items as unreimbursed employee expenses. Damages paid to a former employer for breach of an employment contract. Job search expenses in your present occupation. Legal fees related to your job. Licenses and regulatory fees. Malpractice insurance premiums. Research expenses of a college professor. Rural mail carriers' vehicle expenses. Tools and supplies used in your work. Work clothes and uniforms if required and not suitable for everyday use. Work-related education. If the term of employment was only part of the year, one or more of the these could dwarf your income for the year. Before deducting something that large be sure you can document it. I believe the IRS computers would flag the return and I wouldn't be surprised if they ask for additional proof." }, { "docid": "187085", "title": "", "text": "During World War II, the United States (US) instituted wage and price controls. To attract better employees, companies would offer benefits to get around salary limits. Health insurance was one of the more successful benefits. At that time, income taxes were newer and there were many ways to evade them. Companies could generally deduct expenses. So at that time, health care was deductible because everything was. And at that time, only wages were taxable compensation from employer to employee. Since that time, many other benefits have become non-deductible for employers, e.g. housing or the reduced deduction for meals and entertainment. But health care is generally regarded as different, as a necessity. While everyone needs to eat, not everyone needs to eat at a $100 a meal restaurant. People who need expensive health care really need it. People who eat expensive food just prefer it. And of course, health care is more intermittent where food is relatively consistent. You don't need ten thousand calories one day and zero the next. But some families have no health care expenses in a year while another might have cancer or a pregnancy. Note that medical care expenses can be deducted for individuals if they are large enough in aggregate and you itemize. And of course both businesses and workers have incentives to maintain the current system with deductibility. Health insurance is a common benefit. Housing is not (although it's worth noting that travel housing and meals are deductible). So there have been few people impacted by making housing taxable while many people would be impacted by taxable health insurance. You can deduct health insurance costs if self-employed. It's also not true that health insurance is the only benefit with preferential tax treatment. Retirement and child care are also deductible. Even meals and housing can be deducted in certain circumstances. The complex rules about what and how much is deductible. There have been rumbles about normalizing the tax treatment of health insurance and medical care, but there is a lot of opposition. Insurance companies oppose making all healthcare expenses deductible, as that reduces their effective benefit. They would prefer only insurance premiums be deductible. Traditionally employed individuals oppose making health insurance taxable, as that would increase their taxes. So the situation persists. There isn't quite enough support to move in either direction, although the current compromise is economically silly." }, { "docid": "441023", "title": "", "text": "In addition to the 10%/7.5% limitation mentioned in the answer by mgkrebbs (which means that very few people can take advantage of the deduction), itemized deductions reduce taxes only when the total of all the itemized deductions exceeds the standard deduction available to the taxpayer. People with mortgaged homes have a leg up on this because they can include the mortgage interest and property taxes on Schedule A whereas those who rent their living space cannot. In other words, not having sufficient other itemized deductions can make the really ill person with medical bills large enough to exceed the 10% limitation suffer the double whammy of not getting a tax reduction for any part of the huge medical expense." }, { "docid": "406418", "title": "", "text": "\"The piece is a little misguided at best and poor journalism at worst. The problem lies in the difference between what's deductible for individuals and what's deductible for corporations. The short version of the story is that corporations can deduct a hell of a lot more things than individuals can. Individual deductions are spelled out in the Internal Revenue Code. Stuff like medical expenses (above 7.5% of your AGI), certain educational things, etc. For corporations, the basic rule is that they can deduct any \"\"ordinary and necessary\"\" business expenses. That includes operating, travel, interest, employee, etc. I wish that the article had cited specific sections of the Code if this was some kind of loophole or something, but alas, it appears that they didn't. That leads me to believe that these companies are deducting the portion not paid to the government as a business expense. ~~For what it's worth, I don't believe that a company can deduct those expenses for tax purposes unless it's to \"\"protect their business interests.\"\" My assumption (I don't have the time or desire to search case law right now) is that settlements with the US Government are considered to fall under that definition.~~ **EDIT** - See my comment [here](http://www.reddit.com/r/business/comments/11dbzu/federal_regulators_have_lauded_a_series_of/c6ll7ez) for the relevant Treasury Regulation dealing with this.\"" }, { "docid": "194308", "title": "", "text": "Well, if you were a business, and your food and rent and travel expenses were business expenses, and you paid out less money than you earned, you *would* get a refund. If you can prove that an expense is tax deductible, then that's just what it is. For businesses, a net operating loss is tax deductible." }, { "docid": "472824", "title": "", "text": "You are either VAT registered or you are not VAT registered. If you are not VAT registered, then you are not allowed to charge customers VAT, and you cannot reclaim VAT that you are paying. You are however allowed to deduct the cost of goods including VAT from your expenses. So if you buy a computer for £1000 + £200 VAT, and you can deduct the computer as an expense to reduce your profits that you pay income tax for, then the expense is £1,200 and not just £1,000. If you are VAT registered, then you MUST charge every customer 20% VAT. Business customers don't mind at all, but private customers will be happier if you don't charge VAT because your bills will be a lot lower. You take all the VAT that you received, then subtract all the VAT that you paid for business expenses and that you have invoices for, and send the remainder to HMRC four times a year. (The reason that businesses don't mind paying VAT is because they can in turn deduct the VAT they pay you from the VAT that they received and for every pound they give you, they give one pound less to HMRC). Note that when you have expenses that are deductible from your profits, you can now only deduct the cost excluding VAT. On the other hand, the VAT you receive doesn't count as income and doesn't lead to profits that you need to pay income tax for. It's your decision whether you want to be VAT registered or not, unless your revenue exceeds some limit (somewhere between £70,000 and £80,000 per year) where you must register for VAT." }, { "docid": "257168", "title": "", "text": "\"A tax return is a document you sign and file with the government to self-report your tax obligations. A tax refund is the payment you receive from the government if your payments into the tax system exceeded your obligations. As others have mentioned, if an extra $2K in income generated $5K in taxes, chances are your return was prepared incorrectly. The selection of an appropriate entity type for your business depends a lot on what you expect to see over the next several years in terms of income and expenses, and the extent to which you want or need to pay for fringe benefits or make pretax retirement contributions from your business income. There are four basic flavors of entity which are available to you: Sole proprietorship. This is the simplest option in terms of tax reporting and paperwork required for ongoing operations. Your net (gross minus expenses) income is added to your wage income and you'll pay tax on the total. If your wage income is less than approximately $100K, you'll also owe self-employment tax of approximately 15% in addition to income tax on your business income. If your business runs at a loss, you can deduct the loss from your other income in calculating your taxable income, though you won't be able to run at a loss indefinitely. You are liable for all of the debts and obligations of the business to the extent of all of your personal assets. Partnership. You will need at least two participants (humans or entities) to form a partnership. Individual items of income and expense are identified on a partnership tax return, and each partner's proportionate share is then reported on the individual partners' tax returns. General partners (who actively participate in the business) also must pay self-employment tax on their earnings below approximately $100K. Each general partner is responsible for all of the debts and obligations of the business to the extent of their personal assets. A general partnership can be created informally or with an oral agreement although that's not a good idea. Corporation. Business entities can be taxed as \"\"S\"\" or \"\"C\"\" corporations. Either way, the corporation is created by filing articles of incorporation with a state government (doesn't have to be the state where you live) and corporations are typically required to file yearly entity statements with the state where they were formed as well as all states where they do business. Shareholders are only liable for the debts and obligations of the corporation to the extent of their investment in the corporation. An \"\"S\"\" corporation files an information-only return similar to a partnership which reports items of income and expense, but those items are actually taken into account on the individual tax returns of the shareholders. If an \"\"S\"\" corporation runs at a loss, the losses are deductible against the shareholders' other income. A \"\"C\"\" corporation files a tax return more similar to an individual's. A C corporation calculates and pays its own tax at the corporate level. Payments from the C corporation to individuals are typically taxable as wages (from a tax point of view, it's the same as having a second job) or as dividends, depending on how and why the payments are made. (If they're in exchange for effort and work, they're probably wages - if they're payments of business profits to the business owners, they're probably dividends.) If a C corporation runs at a loss, the loss is not deductible against the shareholders' other income. Fringe benefits such as health insurance for business owners are not deductible as business expenses on the business returns for S corps, partnerships, or sole proprietorships. C corporations can deduct expenses for providing fringe benefits. LLCs don't have a predefined tax treatment - the members or managers of the LLC choose, when the LLC is formed, if they would like to be taxed as a partnership, an S corporation, or as a C corporation. If an LLC is owned by a single person, it can be considered a \"\"disregarded entity\"\" and treated for tax purposes as a sole proprietorship. This option is not available if the LLC has multiple owners. The asset protection provided by the use of an entity depends quite a bit on the source of the claim. If a creditor/plaintiff has a claim based on a contract signed on behalf of the entity, then they likely will not be able to \"\"pierce the veil\"\" and collect the entity's debts from the individual owners. On the other hand, if a creditor/plaintiff has a claim based on negligence or another tort-like action (such as sexual harassment), then it's very likely that the individual(s) involved will also be sued as individuals, which takes away a lot of the effectiveness of the purported asset protection. The entity-based asset protection is also often unavailable even for contract claims because sophisticated creditors (like banks and landlords) will often insist the the business owners sign a personal guarantee putting their own assets at risk in the event that the business fails to honor its obligations. There's no particular type of entity which will allow you to entirely avoid tax. Most tax planning revolves around characterizing income and expense items in the most favorable ways possible, or around controlling the timing of the appearance of those items on the tax return.\"" }, { "docid": "84963", "title": "", "text": "\"Your corporation would file a corporate income tax return on an annual basis. One single month of no revenue doesn't mean much in that annual scheme of things. Total annual revenue and total annual expenses are what impact the results. In other words, yes, your corporation can book revenues in (say) 11 of 12 months of the year but still incur expenses in all months. Many seasonal businesses operate this way and it is perfectly normal. You could even just have, say, one super-awesome month and spend money the rest of the year. Heck, you could even have zero revenue but still incur expenses—startups often work like that at first. (You'd need investment funding, personal credit, a loan, or retained earnings from earlier profitable periods to do that, of course.) As long as your corporation has a reasonable expectation of a profit and the expenses your corporation incurs are valid business expenses, then yes, you ought to be able to deduct those expenses from your revenue when figuring taxes owed, regardless of whether the expenses were incurred at the same approximate time as revenue was booked—as long as the expense wasn't the acquisition of a depreciable asset. Some things your company would buy—such as the computer in your example—would not be fully deductible in the year the expense is incurred. Depreciable property expenses are deducted over time according to a schedule for the kind of property. The amount of depreciation expense you can claim for such property each year is known as Capital Cost Allowance. A qualified professional accountant can help you understand this. One last thing: You wrote \"\"write off\"\". That is not the same as \"\"deduct\"\". However, you are forgiven, because many people say \"\"write off\"\" when they actually mean \"\"deduct\"\" (for tax purposes). \"\"Write off\"\", rather, is a different accounting term, meaning where you mark down the value of an asset (e.g. a bad loan that will never be repaid) to zero; in effect, you are recognizing it is now a worthless asset. There can be a tax benefit to a write-off, but what you are asking about are clearly expense deductions and not write-offs. They are not the same thing, and the next time you hear somebody using \"\"write off\"\" when they mean \"\"deduction\"\", please correct them.\"" } ]

[ { "docid": "47957", "title": "", "text": "Yes, but make sure you issue a 1099 to these freelancers by 1/31/2016 or you may forfeit your ability to claim the expenses. You will probably need to collect a W-9 from each freelancer but also check with oDesk as they may have the necessary paperwork already in place for this exact reason. Most importantly, consult with a trusted CPA to ensure you are completing all necessary forms correctly and following current IRS rules and regulations. PS - I do this myself for my own business and it's quite simple and straight forward." } ]

[ { "docid": "472824", "title": "", "text": "You are either VAT registered or you are not VAT registered. If you are not VAT registered, then you are not allowed to charge customers VAT, and you cannot reclaim VAT that you are paying. You are however allowed to deduct the cost of goods including VAT from your expenses. So if you buy a computer for £1000 + £200 VAT, and you can deduct the computer as an expense to reduce your profits that you pay income tax for, then the expense is £1,200 and not just £1,000. If you are VAT registered, then you MUST charge every customer 20% VAT. Business customers don't mind at all, but private customers will be happier if you don't charge VAT because your bills will be a lot lower. You take all the VAT that you received, then subtract all the VAT that you paid for business expenses and that you have invoices for, and send the remainder to HMRC four times a year. (The reason that businesses don't mind paying VAT is because they can in turn deduct the VAT they pay you from the VAT that they received and for every pound they give you, they give one pound less to HMRC). Note that when you have expenses that are deductible from your profits, you can now only deduct the cost excluding VAT. On the other hand, the VAT you receive doesn't count as income and doesn't lead to profits that you need to pay income tax for. It's your decision whether you want to be VAT registered or not, unless your revenue exceeds some limit (somewhere between £70,000 and £80,000 per year) where you must register for VAT." }, { "docid": "144783", "title": "", "text": "What a coincidence! This was an exam question for my business law class. The main reason why individuals are not allowed to deduct expenses is because income tax revenue would be zero. The reason being, if an individual is allowed to deduct expenses he/she would spend 100% of their income and deduct it all on their tax returns, which would mean he/she would pay virtually no income tax. This is bad for the gov't and the economy. It's bad for the gov't because they loose tax revenue, and it's bad for the economy because people would not have any savings for tough times, which can send the economy into a negative spiral." }, { "docid": "442142", "title": "", "text": "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...)." }, { "docid": "349672", "title": "", "text": "The answer is simple. You can generally claim a deduction for an expense if that expense was used to derive an income. Of course social policy sometimes gets in the way and allows for deductions where they usually wouldn't be allowed. Your rent is not tax deductible because this expense is not used to derive your income. If however you were working from your home, example - you had a home based business, and you dedicated a part of your home for your work, say an office, then part of your rent may then become tax deductible." }, { "docid": "379580", "title": "", "text": "For simplicity, I would subtract the expense from the gross income before accounting for taxes. Using your example, if g is gross income, r is your tax rate, and e is your deductible expense: You got the same answer because of the distributive property of multiplication, but I believe conceptually it makes more sense to deduct the expense before accounting for taxes." }, { "docid": "169026", "title": "", "text": "\"There are a number of federal tax deductions and credits available for education expenses. They are too numerous to describe here, but the place to get full details is IRS Pub 970. Note that many, but not all, of them require that you be enrolled in a degree program; since this does not seem to be the case for you, you would not be eligible for those programs. None of them is as simple / generous as \"\"deduct the full amount of your tuition with no limits\"\". Also note that there are restrictions on using more than one of these deductions or credits in any given tax year. You might pay special attention to Chapter 12, \"\"Business Deduction for Work-Related Education\"\". In particular, this program allows you to deduct transportation expenses under some conditions, which does not seem to be the case for the other programs. But also note carefully the restrictions. In particular, \"\"Education that is part of a program of study that will qualify you for a new trade or business is not qualifying work-related education.\"\" So if you are not already working in the field of IT, you may not be eligible for this deduction.\"" }, { "docid": "144190", "title": "", "text": "You can receive funds from US Client as an individual. There is no legal requirement for you to have a company. If the transactions are large say more than 20 lacs in a year, its advisable to open a Private Ltd. Although its simple opening & Registering a company [A CA or a Laywer would get one at a nominal price of Rs 5000] you can do yourself. Whatever be the case, its advisable to have seperate accounts for this business / professional service transactions. Maintain proper records of the funds received. There are certain benefits you can claim, a CA can help you. Paying taxes in Advance is your responsibility and hence make sure you keep paying every quarter as advance tax. Related questions Indian citizen working from India as freelancer for U.S.-based company. How to report the income & pay tax in India? Freelancer in India working for Swiss Company Freelancing to UK company from India How do I account for money paid to colleagues out of my professional income?" }, { "docid": "550345", "title": "", "text": "Salaries and etc are a business expense and chargeable against revenue for tax purposes. It is NOT tax deductible but it is an expense on an income statement in calculating net profit (after tax). You could say salary &amp; etc are tax effective but not tax deductible." }, { "docid": "202645", "title": "", "text": "For stocks, bonds, ETF funds and so on - Taxed only on realised gain and losses are deductible from the gain and not from company's income. Corporate tax is calculated only after all expenses have been deducted. Not the other way around. Real estate expenses can be deducted because of repairs and maintenance. In general all expenses related to the operation of the business can be deducted. But you cannot use expenses as willy nilly, as you assume. You cannot deduct your subscription to Playboy as an expense. Doing it is illegal and if caught, the tours to church will increase exponentially. VAT is only paid if you claim VAT on your invoices. Your situation seems quite complicated. I would suggest, get an accountant pronto. There are nuances in your situation, which an accountant only can understand and help." }, { "docid": "65095", "title": "", "text": "As an individual freelancer, you would need to maintain a book of accounts. This should show all the income you are getting, and should also list all the payments incurred. This can not only include the payments to other professionals, but also any hardware purchased, phone bills, any travel and entertainment bills directly related to the service you are offering. Once you arrive at a net profit figure, you would need to file this as your income. Consult a tax professional and he can help with how to keep the records of income and expenses. i.e. You would need to create invoices for payments, use checks or online transfers for most payments, segregate the accounts, one account used for this professional stuff, and another for your personal stuff, etc. In a normal course the Income Tax Department does not ask for these records, however whenever your tax returns get scrutinized on a random basis, they would ask for all the relevant documentations." }, { "docid": "134494", "title": "", "text": "\"Yep. You're single, you're possibly still a dependent on your parent's taxes (in lieu of rent), and you're finally bringing home bacon instead of bacon bits. Welcome to the working world. Let's say your gross salary is the U.S. median of $50,000. With bi-weekly checks (26 a year; common practice) you're getting $1923.08 per paycheck. In the 2013 \"\"Percentage Method\"\" tax tables, here's how your federal withholding is calculated as a single person paid biweekly: Federal taxes are computed piecewise; the amount up to A is taxed at X%, then the amount between A and B is taxed at Y%, so if you make $C, between A and B, the tax is (A*X) + (C-A)*Y. The amount A*X is included in the \"\"base amount\"\" for ease of calculation. Back to our example; let's say you're getting $1923.08 gross wages per check. That puts you in the 25% marginal bracket. You pay the sum of all lesser brackets (which is the \"\"base amount\"\" of the 25% bracket), plus the 25% marginal rate on every dollar that falls within the bracket. That's 191.95 + (1923.08 - 1479) * .25 = 191.95 + (444.08 * .25) = 191.95 + 111.02 = $302.97 per paycheck. The \"\"effective\"\" tax rate on the total amount, as if you were being charged a flat tax, is 15.75%, and this is just for the federal income tax. Add to this MA state income taxes (5.25% flat tax), FICA (aka Medicare; 1.45% flat) and SECA (aka Social Security; 6.2% up to a \"\"wage base\"\" that $50k doesn't even approach), and your effective tax rate on each dollar you earn is 15.75% + 5.25% + 1.45% + 6.2% = 28.65%. This doesn't include any state unemployment taxes that may be withheld separately, but as the rate I come up with is pretty darn close to what you've figured (meaning I slightly overestimated your gross income and thus your effective tax rate), my bet is that SUTA's either employer-paid in MA, or it's just part of MA state income tax. It gets better, at least at the federal level: The amount of your state income taxes is tax-deductible at the federal level if you itemize your deductions. That may not be a factor for you as you'd have to come up with more than $6,100 of other tax-deductible expenses to make itemizing the better option than taking the standard deduction (big-ticket items are mortgage expenses other than principal payments, hospital stays such as for childbirth or major accident, and state and local taxes such as sales, property and income). If you can claim yourself as a dependent (meaning your parents can't), then $150 of each check ($3,900 of your annual salary) is no longer taxed for federal withholding, lowering the amount of money taxed at the 25% marginal rate. You effectively save $37.50 biweekly ($975 annually) in taxes. Get married and file jointly, and your spouse, her personal exemption, and an extra standard deduction amount (if you don't itemize) go on your taxes. The tax rates for married couples filing jointly are also lower; they're currently calculated (or were in 2012) to be the same as if two equal earners were to file separately, so if your spouse doesn't work, your taxes on the single income are calculated at the rates you'd get if you earned half as much. It doesn't work out to half the taxes, but it is a significant \"\"marriage advantage\"\". Have kids, and each one is another little $3,900 tax write-off. It's nowhere near the cost of having or raising the child, but it helps, and having kids isn't about the money. Owning a home, making charitable deductions, having medical expenses, etc are a toss-up. The magic number in 2013 is $12,200 for a married couple, $6,100 for a single person. If your mortgage interest, insurance premiums, property taxes, medical expenditures, charitable donations, any contributions from your take-home pay to a tax-deferred savings account (typically these accounts are paid into by your employer as a \"\"pre-tax deduction\"\" and never show up as taxable income, but you could just as easily move money from your take-home pay into tax-deferred savings) and any other tax-deductible payments add up to more than 12 large, then itemize. If not, take your standard deduction. As a single taxpayer just starting out in life, you probably don't have any of these types of expenditures, certainly not enough to give up the SD. I did the math on my own taxes in 2012, and was surprised at how little the government actually gets of my paycheck when all's said and done. Remember back in the summer of 2012 when everyone was mad at Romney for making millions and only paying an effective income tax rate of 14%, which was compared to the middle class's marginal rate of 25-28%? Well, my family of 3, living on a little more than the median income from one earner (me), taking the married standard deduction, three personal exemptions, and a little extra for student loan interest, paid an effective federal income tax rate of something like 3.5%. Of course, the FICA and SS taxes don't allow any deductions (not even for retirement savings), so add in the 4.2% SS (in 2012) and 1.45% FICA and the full federal gimme was more like 9-10%.\"" }, { "docid": "66943", "title": "", "text": "\"The bill proposed to \"\"Under existing law, employers may take tax deductions for the costs associated with moving jobs out of the country. The proposed legislation would have eliminated that, and used the resulting new revenue to fund a 20 percent tax credit for the costs companies run up \"\"insourcing\"\" labor back into the U.S.\"\" From http://abcnews.go.com/m/blogEntry?id=16816660 as found by beermethestrength. I will explain this in an example below. Lets use allen edmonds. I manufacture shoes and sell them in the US. The facts we will assume is Revenue or sales is $100. Manufacturing cost is $50. Tax rate is 10%. Therefore, Profit before tax is $100 -$50 = $50. Tax is $5. Net profit is $45. However, suppose offshoring to Canada saves money. They say please and thank you at every opportunity and the positive work environment allows them to work faster. Correspondingly to make the same number of shoes our costs has decreased because we pay less for labour. The manufacturing cost decreases to $30. However, we incur costs to move such as severance payments to layoff contracted employees. (I promise to hire you and pay $1 a year for 2 years. I fire you at the end of the first year. To be fair, I pay you $1) However, it can be any legitimate expense under the sun. In this case we suppose this moving cost is $10. Revenue or sales is $100. Manufacturing cost is $30. Moving cost is $10. Tax rate is 10%. Profit before tax is $100 -$40 = $60. Tax is $6. Net profit is $54. Yay more jobs for Canadians. However, the legislation would have changed this. It would have denied that moving expense if you were moving out of the country. Therefore, we cannot consider $10 worth of expenses for tax purposes. Therefore Revenue or sales is $100. Manufacturing cost is $30. Tax rate is 10%. Profit before tax for tax purposes is $100 - $30 = $70. Tax is $7. Net profit for tax purposes is $63. However, my accounting/net/real profit is $53. I must deduct the $10 associated with moving. The difference between the two scenarios is $1. In general our net profit changes by our moving cost * our tax rate. There is no tax break associated with moving. In Canadian tax, any business expense in general can be deducted as long as it is legitimate and not specifically denied. I am uncertain but would assume US tax law is similar enough. Moving expenses in general are legitimate and not specifically denied and therefore can be deducted. Offshoring and onshoring are seen as legitimate business activities as in general companies do things to increase profit. (forget about patriotism for the moment). The bill was to make offshoring more expensive and therefore fewer companies would find offshoring profitable. However, republicans defeated this bill in congress. Most likely the house For completeness let us examine what would happen when we onshore (bring jobs from canada to us :( ). In our example, silly unions demand unrealistically high wages and increase our cost of manufacturing to $50 again. We decide to move back to the US because if it is the same everywhere for the sake of silly national pride we move our jobs back to the US. We incur the same moving cost of $10. Therefore we have Revenue or sales is $100. Manufacturing cost is $50. Moving cost of $10. Tax rate is 10%. Profit before tax for tax purposes is $100 - $60 = $40. Tax is $4. However, we are given a 20% tax credit for moving expense. $10 * .2 = 2. The government only assess us tax of 2. Net profit is $38. Tax credits are a one time deal so profit in the future will be $100 -$50 - $5 = $45. Same as the first example. insourcing = onshoring , outsourcing = offshoring for the purposes of this article. Not quite the same in real life.\"" }, { "docid": "153377", "title": "", "text": "\"Hobby expenses are not tax deductible. Business expenses are, but only if it's a bona fide business. First they look at profitability: if you reported a net profit (i.e. paid taxes) in your first 3 years, they will believe you rant on Youtube for a living. Remember, by the time they get around to auditing you, you'll likely be well into, or through, your third year. There is an exception for farms. Other than that, if you lose money year after year, you better be able to show that you look, walk and quack like a business; and one with a reasonable business reason for delayed profitability. For instance Netflix's old business model of mailing DVDs had very high fixed infrastructure expense that took years to turn profitable, but was a very sensible model. They're fine with that. Pets.com swandived into oblivion but they earnestly tried. They're fine with that too. You can't mix all your activities. If you're an electrician specializing in IoT and smart homes, can you deduct a trip to the CES trade show, you bet. Blackhat conference, arguable. SES? No way. Now if you had a second business of a product-reco site which profited by ads and affiliate links, then SES would be fine to deduct from that business. But if this second business loses money every year, it's a hobby and not deductible at all. That person would want separate accounting books for the electrician and webmaster businesses. That's a basic \"\"duck test\"\" of a business vs. a hobby. You need to be able to show how each business gets income and pays expense separate from every other business and your personal life. It's a best-practice to give each business a separate checking account and checkbook. You don't need to risk tax penalties on a business-larva that may never pupate. You can amend your taxes up to 3 years after the proper filing date. I save my expense reciepts for each tax year, and if a business becomes justifiable, I go back and amend past years' tax forms, taking those deductions. IRS gives me a refund check, with interest!\"" }, { "docid": "389654", "title": "", "text": "I am also neither an attorney nor a tax advisor. Yes, the rent money you pay to your friend is taxable income, but suddenly all kinds of expenses around the house - including a fraction of the interest paid on the mortgage - become tax deductible. For example, let's say that the mortgage is $1000 / month and you pay your friend $500 / month. If you live in 50% of the house, then he can deduct 50% (plus or minus) of the expenses associated with owning the house, including: All of these things (50% of them, anyway) become tax deductible. It'd be quite possible for him to take a loss on the endeavor and actually reduce his taxes every year. Until it comes time to sell; selling a property that has been used as a rental is more taxable than selling a property that has been a personal residence." }, { "docid": "291079", "title": "", "text": "There are too many qualifying questions like martial status, dependent status, annual income, etc. Your answer is most likely in the Form Pub 970 you referenced: Adjustments to Qualified Education Expenses If you pay qualified education expenses with certain tax-free funds, you cannot claim a deduction for those amounts If the grant is tax free, you can not claim deductions up to that amount. Even if you were able to expense all the educational expenses you list, I doubt you can exceed the grant disbursement disbursement amount. I'm not a tax professional, so take my advice for what it is worth." }, { "docid": "310612", "title": "", "text": "\"You should probably have a tax professional help you with that (generally advisable when doing corporation returns, even if its a small S corp with a single shareholder). Some of it may be deductible, depending on the tax-exemption status of the recipients. Some may be deductible as business expenses. To address Chris's comment: Generally you can deduct as a business on your 1120S anything that is necessary and ordinary for your business. Charitable deductions flow through to your personal 1040, so Colin's reference to pub 526 is the right place to look at (if it was a C-corp, it might be different). Advertisement costs is a necessary and ordinary expense for any business, but you need to look at the essence of the transaction. Did you expect the sponsorship to provide you any new clients? Did you anticipate additional exposure to the potential customers? Was the investment (80 hours of your work) similar to the costs of paid advertisement for the same audience? If so - it is probably a business expense. While you can't deduct the time on its own, you can deduct the salary you paid yourself for working on this, materials, attributed depreciation, etc. If you can't justify it as advertisement, then its a donation, and then you cannot deduct it (because you did receive something in return). It might not be allowed as a business expense, and you might be required to consider it as \"\"personal use\"\", i.e.: salary.\"" }, { "docid": "14609", "title": "", "text": "\"ITR-4 is for incorporated business. For freelancing, You can fill ITR 2 and declare the freelancing income as \"\"income from other source\"\". Refer to the Income Tax website for more details\"" }, { "docid": "531442", "title": "", "text": "\"According to this post on TurboTax forums, you could deduct it as an \"\"Unreimbursed Employee\"\" expense. This would seem consistent with the IRS Guidelines on such deductions: An expense is ordinary if it is common and accepted in your trade, business, or profession. An expense is necessary if it is appropriate and helpful to your business. An expense does not have to be required to be considered necessary. Office rent is not listed explicitly among the examples of deductible unreimbursed employee expenses, but this doesn't mean it's not allowed. Of course you should check with a tax professional if you want to be sure.\"" }, { "docid": "338700", "title": "", "text": "It sounds like something is getting lost in translation here. A business owner should not have to pay personal income tax on business expenses, with the caveat that they are truly business expenses. Here's an example where what you described could happen: Suppose a business has $200K in revenue, and $150K in legitimate business expenses (wages and owner salaries, taxes, services, products/goods, etc.) The profit for this example business is $50K. Depending on how the business is structured (sole proprietor, llc, s-corp, etc), the business owner(s) may have to pay personal income tax on the $50K in profit. If the owner then decided to have the business purchase a new vehicle solely for personal use with, say, $25K of that profit, then the owner may think he could avoid paying income tax on $25K of the $50K. However, this would not be considered a legitimate business expense, and therefore would have to be reclassified as personal income and would be taxed as if the $25K was paid to the owner. If the vehicle truly was used for legitimate business purposes then the business expenses would end up being $175K, with $25K left as profit which is taxable to the owners. Note: this is an oversimplification as it's oftentimes the case that vehicles are partially used for business instead of all or nothing. In fact, large items such as vehicles are typically depreciated so the full purchase price could not be deducted in a single year. If many of the purchases are depreciated items instead of deductions, then this could explain why it appears that the business expenses are being taxed. It's not a tax on the expense, but on the income that hasn't been reduced by expenses, since only a portion of the big ticket item can be treated as an expense in a single year." } ]

[ { "docid": "137171", "title": "", "text": "As you have income from Business / Profession, you would need to use form ITR4S" } ]

[ { "docid": "347004", "title": "", "text": "Manufacturer of Quartz Powder in India http://quartzpowdermanufacturers.com/supplier-of-quartz-powder-in-india.php Shri Vinayak Industries is a prominent supplier and Manufacturer of Quartz Powder in India. Quartz is the most common mineral which is composed of silicon and oxygen and its chemical composition is silicon dioxide, SiO2. It is chief component of igneous, sedimentary and metamorphic rocks. Quartz is very durable and its durability makes it most commanding mineral. Its size varies from small particles to metric ton. Quartz Stone in its pure form is colorless, but generally it is colored by impurities" }, { "docid": "360629", "title": "", "text": "\"Do I need to pay taxes in India in this scenario? For India tax purposes, you would still qualify as \"\"Resident Indian\"\". As a resident Indian you have to pay taxes on Global income. It is not relevant whether you transfer the money back to India to keep in US. The income is generated and taxable. Depending on your contract, presumably you are working as a free lance; certain expenses are allowed to be deducted from your income, for example if you purchase equipment to help carry out the work, stay / entertainment costs, etc. Consult a professional CA who should be able to guide you on what is eligible and what is not. The balance along with your other income will be taxed as per tax brackets. There is exemption for certain category of workers, mostly in entertainment industry where such income is not taxable. This does not apply to your case.\"" }, { "docid": "13987", "title": "", "text": "Political systems do not have to be intertwined with economic systems, as China demonstrates. By most rankings (Cato, Heritage, etc) China actually has a bit more economic freedom than India. I don't necessarily think that China's development path needs to be copied to India. But I would take a very strong look at what China has done and how. The results are unbelievable. If you think that India's democratic system is superior, then it should be even easier and faster for India to achieve similar or better results." }, { "docid": "286825", "title": "", "text": "There is no difference in taxation in India if you transfer every month or bulk. If you use specialized remittance services from leading Indian Banks, there would be little difference in fees. Assuming you are keeping the funds in NRE account in India and hold it in GBP, you get a slight better rate of interest that what you would get in UK. The interest would not be taxable in India, however it would be in UK. If you convert the funds at hold it in NRE, Rupee account, you would get still better rate of interest. However you are taking the Fx risk when you try and convert this back to GBP incase you decide to stay on. There are no right or wrong answers Edit: There is no limit on the amount of funds earned as NRE that can be got into India tax free. There is a time limit of 7 Years to get the funds back to India tax free. From a tax point of view if you transfer into NRE account its easy. If you transfer into Normal Savings account you would need some paperwork." }, { "docid": "456773", "title": "", "text": "Give a cheque. You can. Your friend would have to deposit this in a Bank that does this service. Not all Banks offer this service in US. It generally would take 1-3 months for the funds to reach. Give a dollar-denominated cheque You can NOT write check on a Rupee account and put USD. You can definitely buy a USD Draft generally payable in the US. There would be some charge for you here and send it by courier, post. It would get paid into your friends account in about a week. Do a SWIFT transfer Yes you can. You may need to walk into a Branch and fill up forms. If the amount is more than specified limit a CA certificate is required. Am I correct in understanding Yes Use my ATM card in the US Yes you can. Specialised money transfer services like Western Union Transfer money out of India is not allowed by Money Transfer services" }, { "docid": "404175", "title": "", "text": "Bitfinexnetwork is a portfolio management program headquartered in London (UK). We already have a plant set-up that mines ethereum and G-CAS. Our plant or mining pool is in China. We mine crypto currencies and trade them further. People buy servers and lease back to us. When they lease them back, we offer them to participate in the output that we receive in the form of ‘’fixed returns’’. Bitfinexnetwork is India’s first portfolio management program that has a physical presence in sec 63, Noida. To maintain transparency among our members, anyone is allowed to come and meet us and have complete knowledge about the crypto world. We have taken official API from Bitfinex.com for trading purpose. Just to clarify, this is the only relationship between Bitfinex.com and Bitfinexnetwork.com. Our goal is to make mining and trading accessible to all users regardless of age, location, investment, technical nouse or experience. We want to give our customers an opportunity to try out cryptocurrency mining and earn Bitcoin as a reward. On a larger scale, we hope to contribute to the development of mining services and subsequently to the development, establishment and adoption of Bitcoin both as a currency and as an economic system" }, { "docid": "75235", "title": "", "text": "The ownership of the house depends on what the original deed transferring title at the time of purchase says and how this ownership is listed in government records where the title transfer deed is registered. Hopefully the two records are consistent. In legal systems that descended from British common law (including the US), the two most common forms of ownership are tenancy in common meaning that, unless otherwise specified in the title deed, each of the owners has an equal share in the entire property, and can sell or bequeath his/her share without requiring the approval of the others, and joint tenancy with right of survivorship meaning that all owners have equal share, and if one owner dies, the survivors form a new JTWROS. Spouses generally own property, especially the home, in a special kind of JTWROS called tenancy by the entirety. On the other hand, the rule is that unless explicitly specified otherwise, tenancy in common with equal shares is how the owners hold the property. Other countries may have different default assumptions, and/or have multiple other forms of ownership (see e.g. here for the intricate rules applicable in India). Mortgages are a different issue. Most mortgages state that the mortgagees are jointly and severally liable for the mortgage payments meaning that the mortgage holder does not care who makes the payment but only that the mortgage payment is made in full. If one owner refuses to pay his share, the others cannot send in their shares of the mortgage payment due and tell the bank to sue the recalcitrant co-owner for his share of the payment: everybody is liable (and can be sued) for the unpaid amount, and if the bank forecloses, everybody's share in the property is seized, not just the share owned by the recalcitrant person. It is, of course, possible to for different co-owners to have separate mortgages for their individual shares, but the legalities (including questions such as whose lien is primary and whose secondary) are complicated. With regard to who paid what over the years of ownership, it does not matter as far as the ownership is concerned. If it is a tenancy in common with equal shares, the fact that the various owners paid the bills (mortgage payments, property taxes, repairs and maintenance) in unequal amounts does not change the ownership of the property unless a new deed is recorded with the new percentages. Now, the co-owners may decide among themselves as a matter of fairness that any money realized from a sale of the property should be divided up in accordance with the proportion that each contributed during the ownership, but that is a different issue. If I were a buyer of property titled as tenancy in common, I (or the bank who is lending me money to make the purchase) would issue separate checks to each co-seller in proportion to the percentages listed on the deed of ownership, and let them worry about whether they should transfer money among themselves to make it equitable. (Careful here! Gift taxes might well be due if large sums of money change hands)." }, { "docid": "454563", "title": "", "text": "If you are tax-resident in the US, then you must report income from sources within and without the United States. Your foreign income generally must be reported to the IRS. You will generally be eligible for a credit for foreign income taxes paid, via Form 1116. The question of the stock transfer is more complicated, but revolves around the beneficial owner. If the stocks are yours but held by your brother, it is possible that you are the beneficial owner and you will have to report any income. There is no tax for bringing the money into the US. As a US tax resident, you are already subject to income tax on the gain from the sale in India. However, if the investment is held by a separate entity in India, which is not a US domestic entity or tax resident, then there is a separate analysis. Paying a dividend to you of the sale proceeds (or part of the proceeds) would be taxable. Your sale of the entity containing the investments would be taxable. There are look-through provisions if the entity is insufficiently foreign (de facto US, such as a Subpart-F CFC). There are ways to structure that transaction that are not taxable, such as making it a bona fide loan (which is enforceable and you must pay back on reasonable terms). But if you are holding property directly, not through a foreign separate entity, then the sale triggers US tax; the transfer into the US is not meaningful for your taxes, except for reporting foreign accounts. Please review Publication 519 for general information on taxation of resident aliens." }, { "docid": "13496", "title": "", "text": "An Indian citizen who is not a resident of India (an NRI) or a Person of Indian Origin (a PIO) is not permitted to sell or gift immovable property in India (real property for US readers) to another NRI or PIO; the property must be sold or gifted to a resident of India. So, assuming that the property in question is in India, you cannot sell it to your NRI friend." }, { "docid": "193993", "title": "", "text": "He acts as an US agent. What economics works in US now will not work for India. We have to look at how US had economics in the early 1900s or post Depression since that is the point India is in. Given that, I doubt this guy has the capacity to go with Modi way and stand up against international banks. In general that is what my grip with Statistics and economics in general. It is your vintage armchair knowledge with little net positive impact on day to day lives of the average citizen." }, { "docid": "288559", "title": "", "text": "In any case you need a CA. Please consult one. I am selling a plot of land that I own in India. This would be treated as capital gains event and you would owe taxes on the gains. I would like to purchase an apartment in India for my parents use. Yes you can. You maybe able to offset some gains on land sale against the apartment. Would like to gift part the money (about INR 20 lakhs) towards my US born son's college education in the US. As you are NRI; Under FEMA, you can transfer funds from your NRO account to US. A form 15CAB and 15CB need to be submitted to the bank to enable transer." }, { "docid": "531306", "title": "", "text": "Can I Send the money back to my personal account of my mother/father in India? Yes you can. Do I need to pay any tax here in US or my parents back in India? There is no tax in India to your parents as it's treated as gift and is tax free between close relatives. In US you would need to pay gift tax if amount is more than USD 16000 a year. See other questions on this site for gift tax rules in US." }, { "docid": "327271", "title": "", "text": "\"I do not know anything about retail investing in India, since I am in the US. However, there are a couple of general things to keep in mind about gold that should be largely independent of country. First, gold is not an investment. Aside from a few industrial uses, it has no productive value. It is, at best, a hedge against inflation, since many people feel more comfortable with what they consider \"\"real\"\" money that is not subject to what seems to be arbitrary creation by central banks. Second, buying tiny amounts of gold as coin or bullion from a retail dealer will always involve a fairly significant spread from the commodity spot price. The spot price only applies to large transactions. Retail dealers have costs of doing business that necessitate these fees in order for them to make a profit. You must also consider the costs of storing your gold in a way that mitigates the risk of theft. (The comment by NL7 is on this point. It appeared while I was typing this answer.) You might find this Planet Money piece instructive on the process, costs, and risks of buying gold bullion (in the US). If you feel that you must own gold as an inflation hedge, and it is possible for residents of India, you would be best off with some kind of gold fund that tracks the price of bullion.\"" }, { "docid": "450925", "title": "", "text": "How to send the full loan amount from Saudi Arabia (money exchange), because I have a money transfer limit? There is no limit for sending money into India. Just use the right banking channel and transfer the funds. If I sent to India, what about tax and all that in India? In a financial year if you are outside of India for more than 182 days, you are Non-Resident for tax purposes. Any money you earn outside of India is tax free in India. i.e. there is no tax for this funds in India. If it is possible to send the money, to whom do I have to send it (my account, or my parents account) Whatever is convenient, preferably to your own NRE/NRO account. Any documents I have to show for tax issues (in case tax) You have to establish that you are NRI and hence this funds are not taxable. Hence its best you transfer into NRE/NRO account. If you transfer to your parents account, you would need a gift deed to make this non-taxable to your parents. I have savings account my self in Axis Bank, for the past 3 years I am paying taxes, if I send to my Axis Bank account how can I withdraw the full amount (10 lakhs (1,000,000)) on single day Withdrawal is possible by cash or cheque You can write a check, do a NEFT/RTGS transfer to your loan account, you can withdraw cash by giving some notice time to the Branch Manager of your Branch." }, { "docid": "149577", "title": "", "text": "This is an 'Ordinary' bank account and not a NRO or NRI account, as I have a PAN card, Aadhar card etc and use an Indian address As you are NRI, you cannot hold an Ordinary Savings account in India. Please have this converted to NRO ASAP. It should be a simple paperwork. Will it be better and easier for my sister to transfer this inheritance money from my 'ordinary' bank account into her bank account and then have my sister 'Gift' me the money under LRS OR is it advisable to go through the lengthy procedure of opening NRO account, then filling in 15CB, 15CA, getting RBI permission and using form A2 to transfer the funds. If my sister transfers the money into her bank account, will this be considered as income for her and will she need to pay taxes on it (even though the money in my account is from inheritance). The right process would be to have your account converted to NRO, and complete the formality of 15CB, 15CA. There is no taxes if you transfer the funds to your sister and she transfers the funds back to you. From Indian Taxes point of view, this is gift between close relatives and there is no taxation." }, { "docid": "317529", "title": "", "text": "\"My tax preparing agent is suggesting that since the stock brokers in India does not have any US state ITINS, it becomes complicated to file that income along with US taxes Why? Nothing to do with each other. You need to have ITIN (or, SSN more likely, since you're on H1b). What brokers have have nothing to do with you. You must report these gains on your US tax return, and beware of the PFIC rules when you do it. He says, I can file those taxes separately in India. You file Indian tax return in India, but it has nothing to do with the US. You'll have to deal with the tax treaty/foreign tax credits to co-ordinate. How complicated is it to include Indian capital gains along with US taxes? \"\"How complicated\"\" is really irrelevant. But in any case - there's no difference between Indian capital gains and American capital gains, unless PFIC/Trusts/Mutual funds are involved. Then it becomes complicated, but being complicated is not enough to not report it. If PIFC/Trusts/Mutual funds aren't involved, you just report this on Schedule D as usual. Did anybody face similar situation More or less every American living abroad. Also the financial years are different in India and US Irrelevant.\"" }, { "docid": "171242", "title": "", "text": "Some banks give you an indemnity form that will allow them to clear the payment available in a different name. This is usually in case the name on the cheque is slightly misspelled. For example, color (American) could be spelt as colour (British). In India for example, names can often be spelt in multiple ways. the indeminity form is common place." }, { "docid": "16562", "title": "", "text": "As a thought experiment I suppose we can ask where dividends came from and what would be different if they never existed. The VOC or Dutch East India Companywas the first to IPO, sell shares and also have a dividend. There had been trade entrepot before the VOC, the bulk cog (type of sea-going ship) trade in the Hanseatic League, but the VOC innovation was to pool capital to build giant spice freighters - more expensive than a merchant partnership could likely finance (and stand to lose at sea) on their own but more efficient than the cogs and focused on a trade good with more value. The Dutch Republic became rich by this capital formed to pursue high value trade. Without dividends this wouldn't have been an innovation in seventeenth century Europe and enterprises would be only as large as say the contemporary merchant family networks of Venice could finance. So there could be large partnerships, family businesses and debt financed ventures but no corporations as such." }, { "docid": "488566", "title": "", "text": "Yes. The bank is right. The funds need to be deposited in NRO account. Under the liberalised remittance scheme, you can transfer upto 1 million USD per year. There are prescribed forms that need to be signed by a CA (essentially stating taxes are paid). You can then move this out of India." } ]

[ { "docid": "587689", "title": "", "text": "Yes, somebody could buy the shares, receive the dividend, and then sell the shares back. However, the price he would get when he sells the shares back is, ignoring other reasons for the price to change, exactly the amount he paid minus the dividend." } ]

[ { "docid": "70389", "title": "", "text": "Is it safe to invest in a portfolio of dividend stocks yielding 7-9% with the money borrowed at 3-4% from one of these brokerages? Yes and no. It depends on your risk profile! Any investment has its risks of losing your capital, but not investing is a guaranteed risk, as you will be guaranteed to fall behind the rate of inflation. Regarding investing on margin, this can increase your gains but can also increase your loses. Regarding the stock market - when investing in stocks you should not only look at the dividend rate but also the capital gain or loss potential. Remember in regards to investing on margin, if the share price drop too much you can get a margin call no matter how much dividend you are getting. It is no use gaining 9% in dividend yield per year if you are losing 15% or more in capital each year. Also, what is the risk of the dividend rate being cut back or dividends not being paid at all in the future? These are some of the risks you should consider before investing and derive a risk management plan as part of your investment plan before you invest. No investment is totally safe or risk free, but it is less risky than not investing at all, as long as you understand the risks involved and have a risk management plan in place as part of your overall investment plan." }, { "docid": "185020", "title": "", "text": "\"Dividends are paid based on who owns the security on a designated day. If a particular security pays once per year, you hold 364 days and sell on the day before the \"\"critical\"\" day, you get no dividend. This is not special to 401(k) or to DRIP. It's just how the system works. The \"\"critical\"\" day is the day before the posted ex-dividend date for the security. If you own at the end of that day, you get the dividend. If you sell on that day or before, you do not. Your company changing providers is not in itself relevant. The important factor is whether you can still hold your same investments in the new plan. If not, you will not get the dividend on anything that you currently hold but \"\"sell\"\" due to the change in providers. If you can, then you potentially get the dividend so long as there's no glitch in the transition. Incidentally, it works the other way too. You might end up getting a dividend through the new plan for something that you did not hold the full year.\"" }, { "docid": "415034", "title": "", "text": "\"Well, everyone knows that a lot of funds have a strict policy to own a market-cap based part of shares from all listed companies above a certain threshold. Now, if I would go and inflate my share price and market cap, they would be forced to buy in; you can argue that this is \"\"just exploiting a weakness of the market\"\", but for me that's simply fraud.\"" }, { "docid": "267986", "title": "", "text": "&gt; I simply stated that the only way to control prices across a community is through central authority. Why control prices when we can change incomes? You're looking at it the wrong way. Why can't people afford decent homes, medical care, education? Perhaps it's because the fruit of their labor is being exploited, taken from them and transferred unjustly to the upper class." }, { "docid": "348092", "title": "", "text": "\"Two possibilities that I can think of: 1) They recognize that it is stealing and just choose to do it anyway because of the unlikelihood of getting caught or punished. 2) They see an ethical distinction between stealing and \"\"gaming the system\"\" wherein if the store opens up a loophole it is not wrong to exploit it. EDIT: Note that these are just my theories for the motivations of the people who are participating in this, my own personal opinions are not necessarily reflected in this post.\"" }, { "docid": "456470", "title": "", "text": "What is a dividend? Essentially, for every share of a dividend stock that you own, you are paid a portion of the company’s earnings. You get paid simply for owning the stock! For example, let’s say Company X pays an annualized dividend of 20 cents per share. Most companies pay dividends quarterly (four times a year), meaning at the end of every business quarter, the company will send a check for 1/4 of 20 cents (or 5 cents) for each share you own. This may not seem like a lot, but when you have built your portfolio up to thousands of shares, and use those dividends to buy more stock in the company, you can make a lot of money over the years. The key is to reinvest those dividends! Source: http://www.dividend.com/dividend-investing-101/what-are-dividend-stocks/ What is an ex dividend date Once the company sets the record date, the ex-dividend date is set based on stock exchange rules. The ex-dividend date is usually set for stocks two business days before the record date. If you purchase a stock on its ex-dividend date or after, you will not receive the next dividend payment. Instead, the seller gets the dividend. If you purchase before the ex-dividend date, you get the dividend. Source: https://www.sec.gov/answers/dividen.htm That said, as long as you purchased the stock before 6/4/17 you are entitled to the next dividend. If not, you'll get the following one after that." }, { "docid": "168123", "title": "", "text": "\"It could be just as exploitable given the current system. Also, who is this \"\"owner\"\"? A large shareholder of a public corporation isn't just going to come into 16 houses. There's a board of directors, and about a million other shareholders, including those in blackrock and vangaurd who have nothing to gain from allowing such corruption. A private company's owner who decided to buy himself a house on the company's dime and not tell the IRS can do so at his peril regardless of tax policy. I still don't understand the point.\"" }, { "docid": "179716", "title": "", "text": "So a company can exploit cheap labour overseas, but their cash cannot help pension funds of people from abroad? Multinational Corporations have no national identity. Their profits shouldn't be regarded as being gotten in just one country. If Apple's offshore money gives a guy in Bangladesh a better pension, they can buy a nice Japanese scooter, which in turn allows a Japanese girl to buy an iPod. I'm an idealist, yes. I wish people would stop dividing this world up with fictitious borders and stop with the whole 'us vs them' thing." }, { "docid": "452055", "title": "", "text": "1.) Corporations are very lean. They can't cut any jobs because all the jobs they were able to cut have been cut. 2.) They pay the lowest wages possible without causing mass turnover. 3.) They have already added all the global customers who can still pay for their service or product. But, they can still turn a profit if they invite illegals to do the work for 5 dollars an hour. So don't worry investors. There is still one more thing you can exploit." }, { "docid": "512947", "title": "", "text": "Ex-Date is a function of the exchange, as well as the dividend. Consider Deutsche Bank AG, DB on the NYSE, DKR on Xetra. For a given dividend, each exchange sets the ex-date for trades on that exchange. (See http://www.sec.gov/answers/dividen.htm for a description of how it works in the US; other exchanges/countries are similar.) This ex-date is normally based on the dividends record date, which is when you must be on the company's books as a shareholder to receive the dividend, and based on when trades for an exchange are settled. The ex-date is the first date for which trades on that date will not settle until after the record date. This means that the ex-date can be different for different exchanges. If you sell your shares on an exchange before the ex-date for that exchange, you will not get the dividend. If you sell your shares on or after the ex-date for the exchange, you do not get the dividend. So it depends on the time zone of the exchange. Most stock exchanges trade T+3, but this can still come into play if there are bank holidays in different countries at different times." }, { "docid": "92516", "title": "", "text": "First, you need to understand that not every investor's goals are the same. Some investors are investing for income. They want to invest in a profitable company and use the profit from the company as income. If that investor invests only in stocks that do not pay a dividend, the only way he can realize income is to sell his investment. But he can invest in companies that pay a regular dividend and use that income while keeping his investment intact. Imagine this: Let's say I own a profitable company, and I offer to sell you part ownership in that company. However, I tell you this upfront: no matter how much profit our company makes, you will never get a penny from me. You will be getting a stock certificate - a piece of paper - and that's it. You can watch the company grow, and you can tell yourself you own it, but the only way you will personally benefit from your investment would be to sell your piece to someone else, who would also never see a penny in profit. Does that sound like a good investment? The fact of the matter is, stocks in companies that do not distribute dividends do have value, but this value is largely based on the potential of profits/dividends at some point in the future. If a company vows never ever to pay dividends, why would anyone invest? An investment would be more of a donation (like Kickstarter) at that point. A company that pays dividends is possibly past their growth stage. That doesn't necessarily mean that they have stopped growing altogether, but remember that an expansion project for any company does not automatically yield a good result. If a company does not have a good opportunity currently for a growth project, I as an investor would rather get a dividend than have the company blow all the profit on a ill-fated gamble." }, { "docid": "391752", "title": "", "text": "After searching a bit and talking to some investment advisors in India I got below information. So thought of posting it so that others can get benefited. This is specific to indian mutual funds, not sure whether this is same for other markets. Even currency used for examples is also indian rupee. A mutual fund generally offers two schemes: dividend and growth. The dividend option does not re-invest the profits made by the fund though its investments. Instead, it is given to the investor from time to time. In the growth scheme, all profits made by the fund are ploughed back into the scheme. This causes the NAV to rise over time. The impact on the NAV The NAV of the growth option will always be higher than that of the dividend option because money is going back into the scheme and not given to investors. How does this impact us? We don't gain or lose per se by selecting any one scheme. Either we make the choice to get the money regularly (dividend) or at one go (growth). If we choose the growth option, we can make money by selling the units at a high NAV at a later date. If we choose the dividend option, we will get the money time and again as well as avail of a higher NAV (though the NAV here is not as high as that of a growth option). Say there is a fund with an NAV of Rs 18. It declares a dividend of 20%. This means it will pay 20% of the face value. The face value of a mutual fund unit is 10 (its NAV in this case is 18). So it will give us Rs 2 per unit. If we own 1,000 units of the fund, we will get Rs 2,000. Since it has paid Rs 2 per unit, the NAV will fall from Rs 18 to Rs 16. If we invest in the growth option, we can sell the units for Rs 18. If we invest in the dividend option, we can sell the units for Rs 16, since we already made a profit of Rs 2 per unit earlier. What we must know about dividends The dividend is not guaranteed. If a fund declared dividends twice last year, it does not mean it will do so again this year. We could get a dividend just once or we might not even get it this year. Remember, though, declaring a dividend is solely at the fund's discretion; the periodicity is not certain nor is the amount fixed." }, { "docid": "61193", "title": "", "text": "Do not confuse the DIV (%) value and the dividend yield. As you can see from this page, the DIV (%) is, as you say, 165%. However, the dividend yield is 3.73% at the time of writing. As the Investopedia page referenced above says: The payout ratio is calculated as follows: Annual Dividends per Share / Earnings per Share. which means that the dividends being paid out are more than the earnings of the company: In extreme cases, dividend payout ratios exceed 100%, meaning more dividends were paid out than there were profits that year. Significantly high ratios are unsustainable." }, { "docid": "420267", "title": "", "text": "Yes, absolutely. Consider Microsoft, Updated Jan. 17, 2003 11:59 p.m. ET Software giant Microsoft Corp., finally bowing to mounting pressure to return some of its huge cash hoard to investors, said it will begin paying a regular annual dividend to shareholders. From Wall Street Journal. Thus, for the years prior to 2003, the company didn't pay dividends but changed that. There can also be some special one-time dividends as Microsoft did the following year according to the Wall Street Journal: The $32 billion one-time dividend payment, which comes to $3 for each share of Microsoft stock, could be a measurable stimulus to the U.S. economy -- and is expected to arrive just in time for holiday shopping. Course companies can also reduce to stop dividends as well." }, { "docid": "65295", "title": "", "text": "The owner of a long futures contract does not receive dividends, hence this is a disadvantage compared to owning the underlying stock. If the dividend is increased, and the future price would not change, there is an arbitrage possibility. For the sake of simplicity, assume that the stock suddenly starts paying a dividend, and that the risk free rate is zero (so interest does not play a role). One can expect that the future price is (rougly) equal to the stock price before the dividend announcment. If the future price would not change, an investor could buy the stock, and short a futures contract on the stock. At expiration he has to deliver the stock for the price set in the contract, which is under the assumptions here equal to the price he bought the stock for. But because he owned the stock, he receives the announced dividend. Hence he can make a risk-free profit consisting of the divivends. If interest do play a role, the argument is similar." }, { "docid": "55701", "title": "", "text": "Yes the company can still pay dividends even if they aren't making a profit. 1) If the firm has been around, it might have made profits in the past years, which it might be still carrying (check for retained earnings in the financial statements). 2) Some firms in the past have had taken up debt to return the money to shareholders as dividends. 3) It might sell a part of it's assets and return the gain as dividends. 4) They might be bought by some other firm, which returns cash to shareholders to keep them happy. It pays to keep an eye on the financial statements of the company to check how much liquid money they might be carrying around to pay shareholders as dividends. They can stop paying dividends whenever they want. Apple didn't pay a dividend while Steve Jobs was around, even though they were making billions in profits. Many companies don't pay dividends because they find it more beneficial to continue investing in their business rather than returning money to shareholders." }, { "docid": "151871", "title": "", "text": "\"Their is no arbitrage opportunity with \"\"buying dividends.\"\" You're buying a taxable event. This is a largely misunderstood topic. The stock always drops by the amount if the dividend on the ex date. The stock opens that day trading \"\"ex\"\" (excluding) the dividend. It then pays out later based in the shareholders on record. There is a lot of talk about price movement and value here. That can happen but it's from trading not from the dividend per se. Yes sometimes you do see a stock pop the day prior to ex date because people are buying the stock for the dividend but the trading aspect of a stock is determined by supply and demand from people trading the stock. The dividends are paid out from the owners equity section of the balance sheet. This is a return of equity to shareholders. The idea is to give owners of the company some of their investment back (from when they bought the stock) without having the owners sell the shares of the company. After all if it's a good company you want to keep holding it so it will appreciate. Another similar way to think of it is like a bonds interest payment. People sometimes forget when trading that these are actual companies meant to be invested in. Your buying an ownership in the company with your cash. It really makes no difference to buy the dividend or not, all other things constant. Though market activity can add or lose value from trading as normal.\"" }, { "docid": "352484", "title": "", "text": "\"In financial theory, there is no reason for a difference in investor return to exist between dividend paying and non-dividend paying stocks, except for tax consequences. This is because in theory, a company can either pay dividends to investors [who can reinvest the funds themselves], or reinvest its capital and earn the same return on that reinvestment [and the shareholder still has the choice to sell a fraction of their holdings, if they prefer to have cash]. That theory may not match reality, because often companies pay or don't pay dividends based on their stage of life. For example, early-stage mining companies often have no free cashflow to pay dividends [they are capital intensive until the mines are operational]. On the other side, longstanding companies may have no projects left that would be a good fit for further investment, and so they pay out dividends instead, effectively allowing the shareholder to decide where to reinvest the money. Therefore, saying \"\"dividend paying\"\"/\"\"growth stock\"\" can be a proxy for talking about the stage of life + risk and return of a company. Saying dividend paying implies \"\"long-standing blue chip company with relatively low capital requirements and a stable business\"\". Likewise \"\"growth stocks\"\" [/ non-dividend paying] implies \"\"new startup company that still needs capital and thus is somewhat unproven, with a chance for good return to match the higher risk\"\". So in theory, dividend payment policy makes no difference. In practice, it makes a difference for two reasons: (1) You will most likely be taxed differently on selling stock vs receiving dividends [Which one is better for you is a specific question relying on your jurisdiction, your current income, and things like what type of stock / how long you hold it]. For example in Canada, if you earn ~ < $40k, your dividends are very likely to have a preferential tax treatment to selling shares for capital gains [but your province and specific other numbers would influence this]. In the United States, I believe capital gains are usually preferential as long as you hold the shares for a long time [but I am not 100% on this without looking it up]. (2) Dividend policy implies differences in the stage of life / risk level of a stock. This implication is not guaranteed, so be sure you are using other considerations to determine whether this is the case. Therefore which dividend policy suits you better depends on your tax position and your risk tolerance.\"" }, { "docid": "67253", "title": "", "text": "\"is it worth it? You state the average yield on a stock as 2-3%, but seem to have come up with this by looking at the yield of an S&P500 index. Not every stock in that index is paying a dividend and many of them that are paying have such a low yield that a dividend investor would not even consider them. Unless you plan to buy the index itself, you are distorting the possible income by averaging in all these \"\"duds\"\". You are also assuming your income is directly proportional to the amount of yield you could buy right now. But that's a false measure because you are talking about building up your investment by contributing $2k-$3k/month. No matter what asset you choose to invest in, it's going to take some time to build up to asset(s) producing $20k/year income at that rate. Investments today will have time in market to grow in multiple ways. Given you have some time, immediate yield is not what you should be measuring dividends, or other investments, on in my opinion. Income investors usually focus on YOC (Yield On Cost), a measure of income to be received this year based on the purchase price of the asset producing that income. If you do go with dividend investing AND your investments grow the dividends themselves on a regular basis, it's not unheard of for YOC to be north of 6% in 10 years. The same can be true of rental property given that rents can rise. Achieving that with dividends has alot to do with picking the right companies, but you've said you are not opposed to working hard to invest correctly, so I assume researching and teaching yourself how to lower the risk of picking the wrong companies isn't something you'd be opposed to. I know more about dividend growth investing than I do property investing, so I can only provide an example of a dividend growth entry strategy: Many dividend growth investors have goals of not entering a new position unless the current yield is over 3%, and only then when the company has a long, consistent, track record of growing EPS and dividends at a good rate, a low debt/cashflow ratio to reduce risk of dividend cuts, and a good moat to preserve competitiveness of the company relative to its peers. (Amongst many other possible measures.) They then buy only on dips, or downtrends, where the price causes a higher yield and lower than normal P/E at the same time that they have faith that they've valued the company correctly for a 3+ year, or longer, hold time. There are those who self-report that they've managed to build up a $20k+ dividend payment portfolio in less than 10 years. Check out Dividend Growth Investor's blog for an example. There's a whole world of Dividend Growth Investing strategies and writings out there and the commenters on his blog will lead to links for many of them. I want to point out that income is not just for those who are old. Some people planned, and have achieved, the ability to retire young purely because they've built up an income portfolio that covers their expenses. Assuming you want that, the question is whether stock assets that pay dividends is the type of investment process that resonates with you, or if something else fits you better. I believe the OP says they'd prefer long hold times, with few activities once the investment decisions are made, and isn't dissuaded by significant work to identify his investments. Both real estate and stocks fit the latter, but the subtypes of dividend growth stocks and hands-off property investing (which I assume means paying for a property manager) are a better fit for the former. In my opinion, the biggest additional factor differentiating these two is liquidity concerns. Post-tax stock accounts are going to be much easier to turn into emergency cash than a real estate portfolio. Whether that's an important factor depends on personal situation though.\"" } ]

[ { "docid": "307505", "title": "", "text": "The moment the dividend is announced, especially from a company that doesn't normally pay dividends, the dividend is factored into everybody's analysis. In the absence of any other news the price of apple would be expected to drop once the dividend in locked in. Why would I buy shares from you at full price one day after the dividend is paid, if I will have to wait for the next dividend? Also keep in mind the dividend was announced on July 24th, and is given to shareholders of record on August 13th. You are way behind the curve." } ]

[ { "docid": "414505", "title": "", "text": "\"The key difference I've found between a stock split and a stock dividend – of the exact same stock and class, as opposed to a spin-off – seems to be from the company's own accounting perspective. There doesn't appear to be any actual transfer of value to the shareholder with either kind of transaction; i.e. in theory, each transaction would be immaterial to the value of your holdings. With respect to the company's accounting, a stock split affects the par value of the shares, whereas a stock dividend reduces the retained earnings account in order to increase paid-in or contributed capital. I found a good online source which explains the history behind this accounting difference: McGraw-Hill - Intermediate Accounting eBook, 6/e - Chapter 18 - Stock Dividends and Splits. Small quote: [...] Besides being based on fallacious reasoning, accounting for stock dividends by artificially reclassifying “earned” capital as “invested” capital conflicts with the reporting objective of reporting shareholders' equity by source. Despite these limitations, this outdated accounting standard still applies. Since neither the corporation nor its shareholders apparently benefits from stock dividends, why do companies declare them?23 Occasionally, a company tries to give shareholders the illusion that they are receiving a real dividend. Another reason is merely to enable the corporation to take advantage of the accepted accounting practice of capitalizing retained earnings. Specifically, a company might wish to reduce an existing balance in retained earnings—otherwise available for cash dividends—so it can reinvest the earned assets represented by that balance without carrying a large balance in retained earnings. [...] There's a lot more on that page, before and after, worth reading. From another book: Google Books - Comparative Income Taxation, a Structural Analysis - page 314 - Stock Dividends. Small quote: The distribution of dividends in the form of stock or \"\"bonus\"\" shares to existing shareholders typically involves a transfer for corporate law purposes of retained earnings into stated capital. It can been [sic] viewed as a deemed distribution of a cash dividend to the shareholders followed by a corresponding contribution to capital or as solely as an event at the corporate level which has no effect on the shareholders whose economic interest in the corporation is unchanged by the receipt of additional shares. The systems have taken varied approaches to the stock dividend problem. The treatment is in part a function of the rules dealing with distributions of stated capital. [emphases above are mine] [... continues w/descriptions of different countries' tax treatments of the kinds of stock dividends. Includes U.S., Sweden, Japan, Netherlands, Canada, Australia, U.K., France, Germany. ...] As far as why a corporation might want to capitalize earnings and reduce the equity otherwise available for dividends, I can only imagine that, ignoring taxes for a moment, that it may have something to do with capital ratios that need to be maintained for financing or regulatory purposes? Yet, I remain curious. If I discover more on this then I'll update my answer. Additional resources:\"" }, { "docid": "245117", "title": "", "text": "The dividend yield can be used to compare a stock to other forms of investments that generate income to the investor - such as bonds. I could purchase a stock that pays out a certain dividend yield or purchase a bond that pays out a certain interest. Of course, there are many other variables to consider in addition to yield when making this type of investment decision. The dividend yield can be an important consideration if you are looking to invest in stocks for an income stream in addition to investing in stocks for gain by a rising stock price. The reason to use Dividend/market price is that it changes the dividend from a flat number such as $1 to a percentage of the stock price, which thus allows it to be more directly compared with bonds and such which return a percentage yeild." }, { "docid": "197047", "title": "", "text": "Ok you're looking at this in a very confusing way. First, as said by CapitalNumb3rs, the dividend yield is the dividends paid in the year as a percent of the stock price. Given this fact then if the stock price moves down and the dividend stays the same then the yield increases. Company's don't usually pay out on a yield basis, that's mostly just a calculation to measure how strong a dividend is. This could mean either A. The stock is underpriced and will rise which will lower the yield to a more normal level or B. the company is not doing as well and eventually the dividends will decrease to a point where the yield again looks more normal. Second off let's look at it in a more realistic way that still takes into account your assumptions: **YEAR 1** 1. Instead of assuming buying 35% let's put this into a share amount. Let's say there are 1,000,000 shares so you just bought 350k shares for $700k. You paid a price of $2/share. Let's assume the market decides that's a fair price and it stays that way through the end of year 1. This gives us a market capitalization of $2 million. 2. The dividend paid out at year 1 is $60k so you could calculate on a per share basis which would be a dividend of $60k / 1 million shares or a $0.06 dividend per share. Our stock price is still at $2.00 so our yield comes out to $0.06 / $2.00 or 3.0% **YEAR 2** Assuming no additional shares issued there are still a total of 1 million shares outstanding. You owned 350k and now want to purchase another 50k (5% of outstanding share float). The market price you are able to purchase the 50k shares at has now changed which means that share price is now valued at $1.50 / share. We have a dividend paid out at $100k, which comes out to a dividend per share of $0.10. We have a share value of $1.50 and the $0.10 dividend per share giving us a new yield of 6.66%. **CONCLUSION:** There are many factors that can cause a company's stock price to fluctuate, some of it is hype based but some of it is a result of material changes. In your case the stock went down 25%. In most scenarios where a stock would have that much decline it would likely either not have been paying a dividend in the first place or would maybe not be paying one for much longer. Most companies that pay dividends are larger and more mature companies with a steady, healthy and predictable cash flow. Also most companies that are that size would not trade a stock under $3.00, I know this is just an example but the scenario is definitely a bit extreme in terms of the price drop and dividend increase. Again the yield is just a calculation that depends on the dividend that is usually planned in advance and the stock price that can fluctuate for many reasons. I hope this made everything more clear and let me know if you have any other questions." }, { "docid": "151871", "title": "", "text": "\"Their is no arbitrage opportunity with \"\"buying dividends.\"\" You're buying a taxable event. This is a largely misunderstood topic. The stock always drops by the amount if the dividend on the ex date. The stock opens that day trading \"\"ex\"\" (excluding) the dividend. It then pays out later based in the shareholders on record. There is a lot of talk about price movement and value here. That can happen but it's from trading not from the dividend per se. Yes sometimes you do see a stock pop the day prior to ex date because people are buying the stock for the dividend but the trading aspect of a stock is determined by supply and demand from people trading the stock. The dividends are paid out from the owners equity section of the balance sheet. This is a return of equity to shareholders. The idea is to give owners of the company some of their investment back (from when they bought the stock) without having the owners sell the shares of the company. After all if it's a good company you want to keep holding it so it will appreciate. Another similar way to think of it is like a bonds interest payment. People sometimes forget when trading that these are actual companies meant to be invested in. Your buying an ownership in the company with your cash. It really makes no difference to buy the dividend or not, all other things constant. Though market activity can add or lose value from trading as normal.\"" }, { "docid": "445030", "title": "", "text": "front running does not mean what you think it means. Front running involves getting access to customer orders and trading for your own account ahead of them. This is spoofing, or quote stuffing, which involves placing fake orders to induce other HFT algorithms to do stupid things you can exploit." }, { "docid": "311214", "title": "", "text": "To follow up on Quid's comment, the share classes themselves will define what level of dividends are expected. Note that the terms 'common shares' and 'preferred shares' are generally understood terms, but are not as precise as you might believe. There are dozens/hundreds of different characteristics that could be written into share classes in the company's articles of incorporation [as long as those characteristics are legal in corporate law in the company's jurisdiction]. So in answering your question there's a bit of an assumption that things are working 'as usual'. Note that private companies often have odd quirks to their share classes, things like weird small classes of shares that have most of the voting rights, or shares with 'shotgun buyback clauses'. As long as they are legal clauses, they can be used to help control how the business is run between various shareholders with competing interests. Things like parents anticipating future family infighting and trying to prevent familial struggle. You are unlikely to see such weird quirks in public companies, where the company will have additional regulatory requirements and where the public won't want any shock at unexpected share clauses. In your case, you suggested having a non-cumulative preferred share [with no voting rights, but that doesn't impact dividend payment]: There are two salient points left related to payout that the articles of incorporation will need to define for the share classes: (1) What is the redemption value for the shares? [This is usually equal to the cost of subscribing for the shares in the first place; it represents how much the business will need to pay the shareholder in the event of redemption / recall] (2) What is the stated dividend amount? This is usually defined at a rate that's at or a little above a reasonable interest rate at the time the shares are created, but defined as $ / share. For example, the shares could have $1 / share dividend payment, where the shares originally cost $50 each to subscribe [this would reflect a rate of payment of about 2%]. Typically by corporate law, dividends must be paid to preferred shares, to the extent required based on the characteristics of the share class [some preferred shares may not have any required dividends at all], before any dividends can be paid to common shares. So if $10k in dividends is to be paid, and total preferred shares require $15k of non-cumulative dividends each year, then $0 will be paid to the common shares. The following year, $15k of dividends will once again need to be paid to the preferred shares, before any can be paid to the common shares." }, { "docid": "106087", "title": "", "text": "The S&P 500 is an index, you can't buy shares of an index, but you can find index funds to invest in. Each company in that fund that pays dividends will do so on their own schedule, and the fund you've invested in will either distribute dividends or accumulate them (re-invest), this is pre-defined, not something they'd decide quarter to quarter. If the fund distributes dividends, they will likely combine the dividends they receive and distribute to you quarterly. The value you've referenced represents the total annual dividend across the index, dividend yield for S&P500 is currently ~1.9%, so if you invested $10,000 a year ago in a fund that matched the S&P 500, you'd have ~$190 in dividend yield." }, { "docid": "584090", "title": "", "text": "An alternative options strategy to minimize loss of investment capital is to buy a put, near the money around your original buy price, with a premium less than the total dividend. The value of the put will increase if the stock price falls quickly. Likely, a large portion of your dividend will go towards paying the option premium, this will however ensure that your capital doesn't drop much lower than your buy price. Continued dividend distributions will continue to pay to buy future put options. Risks here are if the stock does not have a very large up or down movement from your original buy price causing most of the dividend to be spent on insuring your position. It may take a few cycles, but once the stock has appreciated in value say 10% above buying price, you can consider either skipping the put insurance so you can pocket the dividend, or you can bu ythe put with a higher strike price for additional insurance against a loss of gains. Again, this sacrifices much of the dividend in favor of price loss, and still is open to a risk of neutral price movement over time." }, { "docid": "185020", "title": "", "text": "\"Dividends are paid based on who owns the security on a designated day. If a particular security pays once per year, you hold 364 days and sell on the day before the \"\"critical\"\" day, you get no dividend. This is not special to 401(k) or to DRIP. It's just how the system works. The \"\"critical\"\" day is the day before the posted ex-dividend date for the security. If you own at the end of that day, you get the dividend. If you sell on that day or before, you do not. Your company changing providers is not in itself relevant. The important factor is whether you can still hold your same investments in the new plan. If not, you will not get the dividend on anything that you currently hold but \"\"sell\"\" due to the change in providers. If you can, then you potentially get the dividend so long as there's no glitch in the transition. Incidentally, it works the other way too. You might end up getting a dividend through the new plan for something that you did not hold the full year.\"" }, { "docid": "221499", "title": "", "text": "If your account drops close to zero, Wells Fargo will choose that moment to apply their monthly maintenance fees so they can also apply overdraft fees. Its not that they are irresponsible, its that a much better equipped entity is exploiting the situation to bleed them dry." }, { "docid": "572351", "title": "", "text": "Instead of giving part of their profits back as dividends, management puts it back into the company so the company can grow and produce higher profits. When these companies do well, there is high demand for them as in the long term higher profits equates to a higher share price. So if a company invests in itself to grow its profits higher and higher, one of the main reasons investors will buy the shares, is in the expectation of future capital gains. In fact just because a company pays a dividend, would you still buy it if the share price kept decreasing year after year? Lets put it this way: Company A makes record profits year after year, continually keeps beating market expectations, its share price keeps going up, but it pays no dividend instead reinvests its profits to continually grow the business. Company B pays a dividend instead of reinvesting to grow the business, it has been surprising the market on the downside for a few years now, it has had some profit warnings lately and its share price has consistently been dropping for over a year. Which company would you be interested in buying out of the two? I know I would be interested in buying Company A, and I would definitely stay away from Company B. Company A may or may not pay dividends in the future, but if Company B continues on this path it will soon run out of money to pay dividends. Most market gains are made through capital gains rather than dividends, and most people invest in the hope the shares they buy go up in price over time. Dividends can be one attractant to investors but they are not the only one." }, { "docid": "326413", "title": "", "text": "\"Stock has value to the buyer even if it does not currently pay dividends, since it is part ownership of the company (and the company's assets). The owners (of which you are now a part) hire managers to make a \"\"dividend policy decision.\"\" If the company can reinvest the profits into a project that would earn more than the \"\"minimum acceptable rate of return,\"\" then they should do so. If the company has no internal investment opportunities at or above this desired rate, then the company has an obligation to declare a dividend. Paying out a dividend returns this portion of profit to the owners, who can then invest their money elsewhere and earn more. For example: The stock market currently has, say, a 5% rate of return. Company A has a $1M profit and can invest it in a project with an expected 10% rate of return, so they should do so. Company B has a $1M profit, but their best internal project only has an expected 2% rate of return. It is in the owners' best interest to receive their portion of their company's profit as a dividend and re-invest it in other stocks. (Others have pointed out the tax deferrment portion of dividend policy, so I skipped that)\"" }, { "docid": "580576", "title": "", "text": "&gt; they can be taxed at the long term capital gains rate, whereas dividends are subject to a higher tax rate. That's not true, is it? I'm fairly sure they're taxed at the same rate now. Buybacks are still better for shareholders, though, because those who don't want to sell have the option of just holding the stock. With dividends, everyone gets a dividend and the associated tax hit, whether they want it or not. Edit: Oh, right. Ordinary dividends are taxed as ordinary income; qualified dividends are not. But aren't qualified dividends the modal type?" }, { "docid": "70389", "title": "", "text": "Is it safe to invest in a portfolio of dividend stocks yielding 7-9% with the money borrowed at 3-4% from one of these brokerages? Yes and no. It depends on your risk profile! Any investment has its risks of losing your capital, but not investing is a guaranteed risk, as you will be guaranteed to fall behind the rate of inflation. Regarding investing on margin, this can increase your gains but can also increase your loses. Regarding the stock market - when investing in stocks you should not only look at the dividend rate but also the capital gain or loss potential. Remember in regards to investing on margin, if the share price drop too much you can get a margin call no matter how much dividend you are getting. It is no use gaining 9% in dividend yield per year if you are losing 15% or more in capital each year. Also, what is the risk of the dividend rate being cut back or dividends not being paid at all in the future? These are some of the risks you should consider before investing and derive a risk management plan as part of your investment plan before you invest. No investment is totally safe or risk free, but it is less risky than not investing at all, as long as you understand the risks involved and have a risk management plan in place as part of your overall investment plan." }, { "docid": "150514", "title": "", "text": "\"You are missing the fact that the company can buy back its own shares. For simplicity, imagine the case that you own ALL of the shares of XYZ corporation. XYZ is very profitable, and it makes $1M per year. There are two ways to return $1M to you, the shareholder: 1) The company could buy back some fraction of your shares for $1M, or 2) The company could pay you a $1M dividend. After (1) you'd own ALL of the shares and have $1M. After (2) you'd own ALL of the shares and have $1M. After (1) the total number of shares would be fewer, but saying you owned less of XYZ would be like complaining that you are shorter when your height is measured in inches than in centimeters. So indeed, a buyback is an alternative to a dividend. Furthermore, buybacks have a number of tax advantages over dividends to taxable shareholders (see my answer in Can I get a dividend \"\"free lunch\"\" by buying a stock just before the ex-dividend date and selling it immediately after?). That said, it is important to recognize the shareholders who are less savvy about knowing when to accept the buyback (by correctly valuing the company) can get burned at the profit of the savvy shareholders. A strategy to avoid being burned if you aren't price savvy is simply to sell a fraction in order to get your pro rata share of the buyback, in many respects simulating a dividend but still reaping some (but not all) of the tax advantages of a buyback.\"" }, { "docid": "506447", "title": "", "text": "Firstly, investors love dividend paying company as dividends are proof of making profit (sometimes dividend can be paid out of past profits too) Secondly, investor cash in hand is better than potential earnings by the company by way of interest. Investor feels good to redeploy received cash (dividend) on their own Thirdly, in some countries dividend are tax free income as tax on dividends has already been paid. As average tax on dividend is lower than maximum marginal tax; for some investor it generates extra post tax income Fourthly, dividend pay out ratio of most companies don't exceed 30% of available fund for paying (surplus cash) so it is seen as best of both the world Lastly, I trust by instinct a regular dividend paying company more than not paying one in same sector of industry" }, { "docid": "478291", "title": "", "text": "\"In the US, dividends are presently taxed at the same rates as capital gains, however selling stock could lead to less tax owed for the same amount of cash raised, because you are getting a return of basis or can elect to engage in a \"\"loss harvesting\"\" strategy. So to reply to the title question specifically, there are more tax \"\"benefits\"\" to selling stock to raise income versus receiving dividends. You have precise control of the realization of gains. However, the reason dividends (or dividend funds) are used for retirement income is for matching cash flow to expenses and preventing a liquidity crunch. One feature of retirement is that you're not working to earn a salary, yet you still have daily living expenses. Dividends are stable and more predictable than capital gains, and generate cash generally quarterly. While companies can reduce or suspend their dividend, you can generally budget for your portfolio to put a reliable amount of cash in your pocket on schedule. If you rely on selling shares quarterly for retirement living expenses, what would you have done (or how much of the total position would you have needed to sell) in order to eat during a decline in the market such as in 2007-2008?\"" }, { "docid": "170318", "title": "", "text": "It depends on your investment profile but basically, dividends increase your taxable income. Anyone making an income will effectively get 'lower returns' on their investments due to this effect. If you had the choice between identical shares that either give a dividend or don't, you'll find that stock that pays a dividend has a lower price, and increases in value more slowly than stock that doesn't. (all other things being equal) There's a whole bunch of economic theory behind this but in short, the current stock price is a measure of how much the company is worth combined with an estimation of how much it will be worth in the future (NPV of all future dividends is the basic model). When the company makes profit, it can keep those profits, and invest in new projects or distribute a portion of those profits to shareholders (aka dividends). Distributing the value to shareholders reduces the value of the company somewhat, but the shareholders get the money now. If the company doesn't give dividends, it has a higher value which will be reflected in a higher stock price. So basically, all other things being equal (which they rarely are, but I digress) the price and growth difference reflects the fact that dividends are paying out now. (In other words, if you wanted non-dividend shares you could get them by buying dividend shares and re-investing the dividend as new shares every time there was a payout, and you could get dividend-share like properties by selling a percentage of non-dividend shares periodically). Dividend income is taxable as part of your income right away, however taxes on capital gains only happen when you sell the asset in question, and also has a lower tax rate. If you buy and hold Berkshire Hatheway, you will not have to pay taxes on the gains you get until you decide to sell the shares, and even then the tax rate will be lower. If you are investing for retirement, this is great, since your income from other sources will be lower, so you can afford to be taxed then. In many jurisdictions, income from capital gains is subject to a different tax rate than the rest of your income, for example in the US for most people with money to invest it's either 15% or 20%, which will be lower than normal income tax would be (since most people with money to invest would be making enough to be in a higher bracket). Say, for example, your income now is within the 25% bracket. Any dividend you get will be taxed at that rate, so let's say that the dividend is about 2% and the growth of the stock is about 4%. So, your effective growth rate after taxation is 5.5% -- you lose 0.5% from the 25% tax on the dividend. If, instead, you had stock with the same growth but no dividend it would grow at a rate of 6%. If you never withdrew the money, after 20 years, $1 in the dividend stock would be worth ~$2.92 (1.055^20), whereas $1 in the non-dividend stock would be worth ~$3.21 (1.06^20). You're talking about a difference of 30 cents per dollar invested, which doesn't seem huge but multiply it by 100,000 and you've got yourself enough money to renovate your house purely out of money that would have gone to the government instead. The advantage here is if you are saving up for retirement, when you retire you won't have much income so the tax on the gains (even ignoring the capital gains effect above) will definitely be less then when you were working, however if you had a dividend stock you would have been paying taxes on the dividend, at a higher rate, throughout the lifetime of the investment. So, there you go, that's what Mohnish Pabrai is talking about. There are some caveats to this. If the amount you are investing isn't large, and you are in a lower tax bracket, and the stock pays out relatively low dividends you won't really feel the difference much, even though it's there. Also, dividend vs. no dividend is hardly the highest priority when deciding what company to invest in, and you'll practically never be able to find identical companies that differ only on dividend/no dividend, so if you find a great buy you may not have a choice in the matter. Also, there has been a trend in recent years to also make capital gains tax progressive, so people who have a higher income will also pay more in capital gains, which negates part of the benefit of non-dividend stocks (but doesn't change the growth rate effects before the sale). There are also some theoretical arguments that dividend-paying companies should have stronger shareholders (since the company has less capital, it has to 'play nice' to get money either from new shares or from banks, which leads to less risky behavior) but it's not so cut-and-dried in real life." }, { "docid": "124368", "title": "", "text": "You can argue that cash dividend is a kind of split as well by this logic. The stock price on ex-dividend gets a hit coincidental with the dividend to be paid, so one can argue that the investor has the same cash value on the day the dividend was paid as if it wouldn't be paid at all. However, for the company to distribute stocks instead of cash may be advantageous if they have low cash reserves but significant amount of treasury stocks, and the stocks are of high liquidity. It is also a way for the company to release treasury stocks without diluting the current shareholders and creating taxable income to the company, that's an important factor to consider. This is in fact the real answer to your question. The main difference between split and stock dividend is that in split, the stock distributions proportions don't change. With stock dividend - they do. While the outstanding share proportions do not change, total proportions do, because of the treasury stocks being distributed. So company has less stocks in its vaults, but everyone else still has the same proportions of ownership. Compare this to split: company's treasury stocks would be split as well, and it would continue essentially sitting on the same proportion of stocks. That shift of treasury stocks to the outside shareholders - this is what makes it a dividend." } ]

[ { "docid": "115553", "title": "", "text": "No, the dividends can't be exploited like that. Dividends settlement are tied to an ex-dividend date. The ex-dividend, is the day that allows you to get a dividend if you own the stock. Since a buyer of the stock after this date won't get the dividend, the price usually drop by the amount of the dividend. In your case the price of a share would lose $2.65 and you will be credited by $2.65 in cash such that your portfolio won't change in value due to the dividend. Also, you can't exploit the drop in price by short-selling, as you would be owing the dividend to the person lending you the stock for the short sale. Finally, the price of the stock at the ex-dividend will also be affected by the supply and demand, such that you can't be precisely sure of the drop in price of the security." } ]

[ { "docid": "267986", "title": "", "text": "&gt; I simply stated that the only way to control prices across a community is through central authority. Why control prices when we can change incomes? You're looking at it the wrong way. Why can't people afford decent homes, medical care, education? Perhaps it's because the fruit of their labor is being exploited, taken from them and transferred unjustly to the upper class." }, { "docid": "51602", "title": "", "text": "\"Dividends can also be automatically reinvested in your stock holding through a DRIP plan (see the wikipedia link for further details, wiki_DRIP). Rather than receiving the dividend money, you \"\"buy\"\" additional stock shares your with dividend money. The value in the DRIP strategy is twofold. 1) your number of shares increases without paying transaction fees, 2) you increase the value of your holding by increasing number of shares. In the end, the RIO can be quite substantial due to the law of compounding interest (though here in the form of dividends). Talk with your broker (brokerage service provider) to enroll your dividend receiving stocks in a DRIP.\"" }, { "docid": "168123", "title": "", "text": "\"It could be just as exploitable given the current system. Also, who is this \"\"owner\"\"? A large shareholder of a public corporation isn't just going to come into 16 houses. There's a board of directors, and about a million other shareholders, including those in blackrock and vangaurd who have nothing to gain from allowing such corruption. A private company's owner who decided to buy himself a house on the company's dime and not tell the IRS can do so at his peril regardless of tax policy. I still don't understand the point.\"" }, { "docid": "572351", "title": "", "text": "Instead of giving part of their profits back as dividends, management puts it back into the company so the company can grow and produce higher profits. When these companies do well, there is high demand for them as in the long term higher profits equates to a higher share price. So if a company invests in itself to grow its profits higher and higher, one of the main reasons investors will buy the shares, is in the expectation of future capital gains. In fact just because a company pays a dividend, would you still buy it if the share price kept decreasing year after year? Lets put it this way: Company A makes record profits year after year, continually keeps beating market expectations, its share price keeps going up, but it pays no dividend instead reinvests its profits to continually grow the business. Company B pays a dividend instead of reinvesting to grow the business, it has been surprising the market on the downside for a few years now, it has had some profit warnings lately and its share price has consistently been dropping for over a year. Which company would you be interested in buying out of the two? I know I would be interested in buying Company A, and I would definitely stay away from Company B. Company A may or may not pay dividends in the future, but if Company B continues on this path it will soon run out of money to pay dividends. Most market gains are made through capital gains rather than dividends, and most people invest in the hope the shares they buy go up in price over time. Dividends can be one attractant to investors but they are not the only one." }, { "docid": "420267", "title": "", "text": "Yes, absolutely. Consider Microsoft, Updated Jan. 17, 2003 11:59 p.m. ET Software giant Microsoft Corp., finally bowing to mounting pressure to return some of its huge cash hoard to investors, said it will begin paying a regular annual dividend to shareholders. From Wall Street Journal. Thus, for the years prior to 2003, the company didn't pay dividends but changed that. There can also be some special one-time dividends as Microsoft did the following year according to the Wall Street Journal: The $32 billion one-time dividend payment, which comes to $3 for each share of Microsoft stock, could be a measurable stimulus to the U.S. economy -- and is expected to arrive just in time for holiday shopping. Course companies can also reduce to stop dividends as well." }, { "docid": "348092", "title": "", "text": "\"Two possibilities that I can think of: 1) They recognize that it is stealing and just choose to do it anyway because of the unlikelihood of getting caught or punished. 2) They see an ethical distinction between stealing and \"\"gaming the system\"\" wherein if the store opens up a loophole it is not wrong to exploit it. EDIT: Note that these are just my theories for the motivations of the people who are participating in this, my own personal opinions are not necessarily reflected in this post.\"" }, { "docid": "293048", "title": "", "text": "\"In the unlikely case that noone finds a way to extract resources from the company and distribute them to shareholders periodically in a way that's de facto equivalent to dividends, any company can be dissolved. The assets of the company would be sold for their market value, the liabilities would have to be settled, and the net result of all this (company cash + sale results - liabilities) would be distributed to shareholders proportionally to their shares. The 'liquidation value' is generally lower than the market value of a company as an ongoing concern that's making business and earning profit, but it does put a floor on it's value - if the stock price is too low, someone can buy enough stock to get control of the company, vote to dissolve it, and make a profit that way; and the mere fact that this can happen props up the stock price. Companies could even be created for a limited time period in the first hand (which has some historical precedent with shareholders of 'trading companies' with lifetime of a single trade voyage). Imagine that there is some company Megacorp2015 where shareholders want to receive $1M of its cash as \"\"dividends\"\". They can make appropriate contracts that will form a new company called Megacorp2016 that will take over all the ongoing business and assets except $1M in cash, and then liquidate Megacorp2015 and distribute it's assets (shares of Megacorp2016 and the \"\"dividend\"\") among themselves. The main difference from normal dividends is that in this process, you need cooperation from any lenders involved, so if the company has some long-term debts then they would need agreement from those banks in order to pay out \"\"dividends\"\". Oh, and everyone would have to pay a bunch more to lawyers simply to do \"\"dividends\"\" in this or some other convoluted way.\"" }, { "docid": "93971", "title": "", "text": "For all stocks, expected Dividends are a part of the price it is traded for - consider that originally, the whole idea of stocks was to participate in the earnings of the company = get dividends. The day the dividend is paid, that expectation is of course removed, and thereby the stock value reduced by just the amount of dividend paid. You will see that behavior for all stocks, everywhere. The dividend in your example is just uncommonly high relative to the stock price; but that is a company decision - they can decide whatever amount they want as a dividend. In other words, the day before dividend payments, investors value the stock at ~14 $, plus an expected dividend payment of 12 $, which adds to 26 $. The day after the dividend payment, investors still value the stock at ~14 $, plus no more dividend payment = 0 $. Nothing changed really in the valuation." }, { "docid": "72189", "title": "", "text": "Why do people talk about stock that pay high dividends? Traditionally people who buy dividend stocks are looking for income from their investments. Most dividend stock companies pay out dividends every quarter ( every 90 days). If set up properly an investor can receive a dividend check every month, every week or as often as they have enough money to stagger the ex-dates. There is a difference in high $$ amount of the dividend and the yield. A $1/share dividend payout may sound good up front, but... how much is that stock costing you? If the stock cost you $100/share, then you are getting 1% yield. If the stock cost you $10/share, you are getting 10% yield. There are a lot of factors that come into play when investing in dividend stocks for cash flow. Keep in mind why are you investing in the first place. Growth or cash flow. Arrange your investing around your major investment goals. Don't chase big dollar dividend checks, do your research and follow a proven investment plan to reach your goals safely." }, { "docid": "464834", "title": "", "text": "&gt;I get the idea behind it but certainly you would agree that it can be seen as a selfish mindset. Yes, but capitalism is selfish and wage-labor is exploitation in the first place. If you want people caring for the group goals, getting absorbed, and giving their all to the team, you don't hire wage/salary workers, you inspire a band of brothers." }, { "docid": "522792", "title": "", "text": "No, it is not. If that were the case, you would have no such thing as a growth stock. Dividends and dividend policies can change at any time. The primary reason for investment in a company is access to a firm's earnings, hence the idea of P/E. Dividends are factored in with capital appreciation, but studies have shown that dividends are actually detrimental to future growth. They tend to allow easier access to shareholders because of the payouts, reducing the cost of equity. But, if you reduce the growth rate as well, sensitivity tables can demonstrate deterioration or stagnation over time. Some good examples are GE and Microsoft." }, { "docid": "146639", "title": "", "text": "Normally, in a war everybody suffers and the entire economy goes down. Military contractors do better than average, but the average sucks. The way to take advantage of knowing a war is coming is to leave as soon as possible. There are strategic materials that can become valuable in a war, but such investments are generally very specialized and not something an ordinary investor would be in a position to exploit. The most profitable businesses in war are food, oil, and ammunition." }, { "docid": "253005", "title": "", "text": "\"Understand that buying a Starbucks gift card at the grocery store to receive 6% back on your coffee rather than 6% back on your groceries is an exploit of a flaw in the benefits program, not a feature. It's definitely not a blanket yes or no answer, the only way to find out is to try. Separately, I don't know why you would find this \"\"concerning.\"\" This will vary greatly between merchants and cards. There will always be new points churning exploits, they don't last forever and you can't expect every customer service rep to be well versed in methods employed to juice cardmember programs. Hell, a number of years ago one person figured out that he could buy rolls of $1 coins from the US treasury with free shipping and no additional fees. This guy was literally buying thousands of dollars of cash each month to deposit and pay his credit card bill; completely against the terms of the treasury program for distributing the $1 coins. A number of people had their cards and points/cash back revoked for that one.\"" }, { "docid": "322417", "title": "", "text": "\"Yes, they are, and you've experienced why. Generally speaking, stocks that pay dividends will be better investments than stocks that don't. Here's why: 1) They're actually making money. They can finagle balance sheets and news releases, but cash is cash, it tells no lies. They can't fake it. 2) There's less good they can do with that money than they say. When a business you own is making money, they can do two things with it: reinvest it into the company, or hand it over to you. All companies must reinvest to some degree, but only a few companies worth owning can find profitable ways of reinvesting all of it. Having to hand you, the owner, some of the earnings helps keep that money from leaking away on such \"\"necessities\"\" like corporate jets, expensive printer paper, or ill-conceived corporate buyouts. 3) It helps you not freak out. Markets go up, and markets go down. If you own a good company that's giving you a nice check every three months, it's a lot easier to not panic sell in a downturn. After all, they're handing you a nice check every three months, and checks are cash, and cash tells no lies. You know they're still a good company, and you can ride it out. 4) It helps others not freak out. See #3. That applies to everyone. That, in turn means market downturns weigh less heavily on companies paying solid dividends than on those that do not. 5) It gives you some of the reward of investing in good companies, without having to sell those companies. If you've got a piece of a good, solid, profitable, growing company, why on earth would you want to sell it? But you'd like to see some rewards from making that wise investment, wouldn't you? 6) Dividends can grow. Solid, growing companies produce more and more earnings. Which means they can hand you more and more cash via the dividend. Which means that if, say, they reliably raise dividends 10%/year, that measly 3% dividend turns into a 6% dividend seven years later (on your initial investment). At year 14, it's 12%. Year 21, 24%. See where this is going? Companies like that do exist, google \"\"Dividend Aristocrats\"\". 7) Dividends make growth less important. If you owned a company that paid you a 10% dividend every year, but never grew an inch, would you care? How about 5%, and it grows only slowly? You invest in companies, not dividends. You invest in companies to make money. Dividends are a useful tool when you invest -- to gauge company value, to smooth your ride, and to give you some of the profit of the business you own. They are, however, only part of the total return from investing -- as you found out.\"" }, { "docid": "71511", "title": "", "text": "\"You have to be the owner of record before the ex-dividend date, which is not the same day as the date the dividend is paid. This also implies that if you sell on or after the ex-dividend date, you'll still get the dividend, even if you no longer own the stock. Keep in mind, also, that the quoted price of the stock (and on any open orders that are not specifically marked as \"\"do not reduce\"\") on its ex-dividend date is dropped by the amount of the dividend, first thing in the morning before trading starts. If you happen to be the first order of the day, before market forces cause the price to move, you'll end up with zero gain, since the dividend is built into the price, and you got the same value out of it -- the dividend in cash, and the remaining value in stock. As pointed out in the comments (Thanks @Brick), you'll still get a market price for your trade, but the price reduction will have had some impact on the first trade of the day. Source: NYSE Rule 118.30 Also, remember that the dividend yield is expressed in annualized terms. So a 3% yield can only be fully realized by receiving all of the dividend payments made by the company for the year. You can, of course, forget about individual companies and just look for dividends to create your own effective yield over time. But, see the final point... Finally, if you keep buying and selling just to play games with the dividends, you're going to pay far more in transaction fees than you will earn in dividends. And, depending on your individual circumstances, you may end up paying more in capital gains taxes.\"" }, { "docid": "529032", "title": "", "text": "Adding to webdevduck's answer: Before you calculate your profits, you can pay money tax-free into a pension fund for the company director (that is you). Then if you pay yourself dividends, if you made lots of profit you don't have to pay it all as dividends. You can take some where the taxes are low, and then pay more money in later years. What you must NOT do is just take the money. The company may be yours, but the money isn't. It has to be paid as salary or dividend. (You can give the company director a loan, but that loan has to be repaid. Especially if a limited company goes bankrupt, the creditors would insist that loans from the company are repaid). After a bit more checking, here's the optimal approach, perfectly legal, expected and ethical: You pay yourself a salary of £676 per month. That's the point where you get all the advantages of national insurance without having to pay; above that you would have to pay 13.8% employers NI contributions and 12% employee's NI contributions, so for £100 salary the company has to pay £113.80 and you receive £88.00. Below £676 you pay nothing. You deduct the salary from your revenue, then you deduct all the deductible business costs (be wise in what you try to deduct), then you pay whatever you want into a pension fund. Well, up to I think £25,000 per year. The rest is profit. The company pays 19% corporation tax on profits. Then you pay yourself dividends. Any dividends until your income is £11,500 per year are tax free. Then the next £5,000 per year are tax free. Then any dividends until income + dividends = £45,000 per year is taxed at 7.5%. It's illegal to pay so much in dividends that the company can't pay its bills. Above £45,000 you decide if you want your money now and pay more tax, or wait and get it tax free. Every pound of dividend above £45,000 a year you pay 32.5% tax, but there is nobody forcing you to take the money. You can wait until business is bad, or you want a loooong holiday, or you retire. So at that time you will stay below £45,000 per year and pay only 7.5% tax." }, { "docid": "70389", "title": "", "text": "Is it safe to invest in a portfolio of dividend stocks yielding 7-9% with the money borrowed at 3-4% from one of these brokerages? Yes and no. It depends on your risk profile! Any investment has its risks of losing your capital, but not investing is a guaranteed risk, as you will be guaranteed to fall behind the rate of inflation. Regarding investing on margin, this can increase your gains but can also increase your loses. Regarding the stock market - when investing in stocks you should not only look at the dividend rate but also the capital gain or loss potential. Remember in regards to investing on margin, if the share price drop too much you can get a margin call no matter how much dividend you are getting. It is no use gaining 9% in dividend yield per year if you are losing 15% or more in capital each year. Also, what is the risk of the dividend rate being cut back or dividends not being paid at all in the future? These are some of the risks you should consider before investing and derive a risk management plan as part of your investment plan before you invest. No investment is totally safe or risk free, but it is less risky than not investing at all, as long as you understand the risks involved and have a risk management plan in place as part of your overall investment plan." }, { "docid": "67253", "title": "", "text": "\"is it worth it? You state the average yield on a stock as 2-3%, but seem to have come up with this by looking at the yield of an S&P500 index. Not every stock in that index is paying a dividend and many of them that are paying have such a low yield that a dividend investor would not even consider them. Unless you plan to buy the index itself, you are distorting the possible income by averaging in all these \"\"duds\"\". You are also assuming your income is directly proportional to the amount of yield you could buy right now. But that's a false measure because you are talking about building up your investment by contributing $2k-$3k/month. No matter what asset you choose to invest in, it's going to take some time to build up to asset(s) producing $20k/year income at that rate. Investments today will have time in market to grow in multiple ways. Given you have some time, immediate yield is not what you should be measuring dividends, or other investments, on in my opinion. Income investors usually focus on YOC (Yield On Cost), a measure of income to be received this year based on the purchase price of the asset producing that income. If you do go with dividend investing AND your investments grow the dividends themselves on a regular basis, it's not unheard of for YOC to be north of 6% in 10 years. The same can be true of rental property given that rents can rise. Achieving that with dividends has alot to do with picking the right companies, but you've said you are not opposed to working hard to invest correctly, so I assume researching and teaching yourself how to lower the risk of picking the wrong companies isn't something you'd be opposed to. I know more about dividend growth investing than I do property investing, so I can only provide an example of a dividend growth entry strategy: Many dividend growth investors have goals of not entering a new position unless the current yield is over 3%, and only then when the company has a long, consistent, track record of growing EPS and dividends at a good rate, a low debt/cashflow ratio to reduce risk of dividend cuts, and a good moat to preserve competitiveness of the company relative to its peers. (Amongst many other possible measures.) They then buy only on dips, or downtrends, where the price causes a higher yield and lower than normal P/E at the same time that they have faith that they've valued the company correctly for a 3+ year, or longer, hold time. There are those who self-report that they've managed to build up a $20k+ dividend payment portfolio in less than 10 years. Check out Dividend Growth Investor's blog for an example. There's a whole world of Dividend Growth Investing strategies and writings out there and the commenters on his blog will lead to links for many of them. I want to point out that income is not just for those who are old. Some people planned, and have achieved, the ability to retire young purely because they've built up an income portfolio that covers their expenses. Assuming you want that, the question is whether stock assets that pay dividends is the type of investment process that resonates with you, or if something else fits you better. I believe the OP says they'd prefer long hold times, with few activities once the investment decisions are made, and isn't dissuaded by significant work to identify his investments. Both real estate and stocks fit the latter, but the subtypes of dividend growth stocks and hands-off property investing (which I assume means paying for a property manager) are a better fit for the former. In my opinion, the biggest additional factor differentiating these two is liquidity concerns. Post-tax stock accounts are going to be much easier to turn into emergency cash than a real estate portfolio. Whether that's an important factor depends on personal situation though.\"" }, { "docid": "141458", "title": "", "text": "\"Not really, no. The assumption you're making—withdrawals from a corporation are subject to \"\"[ordinary] income tax\"\"—is simplistic. \"\"Income tax\"\" encompasses many taxes, some more benign than others, owing to credits and exemptions based on the kind of income. Moreover, the choices you listed as benefits in the sole-proprietor case—the RRSP, the TFSA, and capital gains treatment for non-registered investments—all remain open to the owner of a small corporation ... the RRSP to the extent that the owner has received salary to create contribution room. A corporation can even, at some expense, establish a defined benefit (DB) pension plan and exceed individual RRSP contribution limits. Yes, there is a more tax-efficient way for small business owners to benefit when it comes time to retirement. Here is an outline of two things I'm aware of: If your retirement withdrawals from your Canadian small business corporation would constitute withdrawal from the corporation's retained earnings (profits), i.e. income to the corporation that had already been subject to corporate income tax in prior years, then the corporation is able to declare such distributions as dividends and issue you a T5 slip (Statement of Investment Income) instead of a T4 slip (Statement of Remuneration Paid). Dividends received by Canadian residents from Canadian corporations benefit from the Dividend Tax Credit (DTC), which substantially increases the amount of income you can receive without incurring income tax. See TaxTips.ca - Non-eligible (small business) dividend tax credit (DTC). Quote: For a single individual with no income other than taxable Canadian dividends which are eligible for the small business dividend tax credit, in 2014 approximately $35,551 [...] could be earned before any federal* taxes were payable. * Provincial DTCs vary, and so combined federal/provincial maximums vary. See here. If you're wondering about \"\"non-eligible\"\" vs. \"\"eligible\"\": private small business corporation dividends are generally considered non-eligible for the best DTC benefit—but they get some benefit—while a large public corporation's dividends would generally be considered eligible. Eligible/non-eligible has to do with the corporation's own income tax rates; since Canadian small businesses already get a big tax break that large companies don't enjoy, the DTC for small businesses isn't as good as the DTC for public company dividends. Finally, even if there is hardly any same-year income tax advantage in taking dividends over salary from an active small business corporation (when you factor in both the income tax paid by the corporation and the individual), dividends still allow a business owner to smooth his income over time, which can result in a lower lifetime average tax rate. So you can use your business as a retained earnings piggy bank to spin off dividends that attract less tax than ordinary income. But! ... if you can convince somebody to buy your business from you, then you can benefit from the lifetime capital gains exemption of up to $800,000 on qualifying small business shares. i.e. you can receive up to $800K tax-free on the sale of your small business shares. This lifetime capital gains exemption is a big carrot—designed, I believe, to incentivize Canadian entrepreneurs to develop going-concern businesses that have value beyond their own time in the business. This means building things that would make your business worth buying, e.g. a valued brand or product, a customer base, intellectual property, etc. Of course, there are details and conditions with all of what I described, and I am not an accountant, so please consult a qualified, conflict-free professional if you need advice specific to your situation.\"" } ]

[ { "docid": "196939", "title": "", "text": "In an ideal world Say on 24th July the share price of Apple was $600. Everyone knows that they will get the $ 2.65 on 16th August. There is not other news that is affecting the price. You want to go in and buy the shares on 16th Morning at $600 and then sell it on 17th August at $600. Now in this process you have earned sure shot $2.65/- Or in an ideal world when the announcement is made on 24th July, why would I sell it at $600, when I know if I wait for few more days I will get $2.65/- so i will be more inclined to sell it at $602.65 /- ... so on 16th Aug after the dividend is paid out, the share price will be back to $600/- In a real world, dividend or no dividend the share price would be moving up or down ... Notice that the dividend amount is less than 1% of the stock price ... stock prices change more than this percentage ... so if you are trying to do what is described in paragraph one, then you may be disappointed as the share price may go down as well by more than $2.65 you have made" } ]

[ { "docid": "70389", "title": "", "text": "Is it safe to invest in a portfolio of dividend stocks yielding 7-9% with the money borrowed at 3-4% from one of these brokerages? Yes and no. It depends on your risk profile! Any investment has its risks of losing your capital, but not investing is a guaranteed risk, as you will be guaranteed to fall behind the rate of inflation. Regarding investing on margin, this can increase your gains but can also increase your loses. Regarding the stock market - when investing in stocks you should not only look at the dividend rate but also the capital gain or loss potential. Remember in regards to investing on margin, if the share price drop too much you can get a margin call no matter how much dividend you are getting. It is no use gaining 9% in dividend yield per year if you are losing 15% or more in capital each year. Also, what is the risk of the dividend rate being cut back or dividends not being paid at all in the future? These are some of the risks you should consider before investing and derive a risk management plan as part of your investment plan before you invest. No investment is totally safe or risk free, but it is less risky than not investing at all, as long as you understand the risks involved and have a risk management plan in place as part of your overall investment plan." }, { "docid": "572351", "title": "", "text": "Instead of giving part of their profits back as dividends, management puts it back into the company so the company can grow and produce higher profits. When these companies do well, there is high demand for them as in the long term higher profits equates to a higher share price. So if a company invests in itself to grow its profits higher and higher, one of the main reasons investors will buy the shares, is in the expectation of future capital gains. In fact just because a company pays a dividend, would you still buy it if the share price kept decreasing year after year? Lets put it this way: Company A makes record profits year after year, continually keeps beating market expectations, its share price keeps going up, but it pays no dividend instead reinvests its profits to continually grow the business. Company B pays a dividend instead of reinvesting to grow the business, it has been surprising the market on the downside for a few years now, it has had some profit warnings lately and its share price has consistently been dropping for over a year. Which company would you be interested in buying out of the two? I know I would be interested in buying Company A, and I would definitely stay away from Company B. Company A may or may not pay dividends in the future, but if Company B continues on this path it will soon run out of money to pay dividends. Most market gains are made through capital gains rather than dividends, and most people invest in the hope the shares they buy go up in price over time. Dividends can be one attractant to investors but they are not the only one." }, { "docid": "452055", "title": "", "text": "1.) Corporations are very lean. They can't cut any jobs because all the jobs they were able to cut have been cut. 2.) They pay the lowest wages possible without causing mass turnover. 3.) They have already added all the global customers who can still pay for their service or product. But, they can still turn a profit if they invite illegals to do the work for 5 dollars an hour. So don't worry investors. There is still one more thing you can exploit." }, { "docid": "480808", "title": "", "text": "Let me answer by parts: When a company gives dividends, the share price drops by the dividend amount. Not always by that exact amount for many different reasons (e.g. there are transaction costs if you reinvest, dividend taxes, etc). I have tested that empirically. Now, if all the shareholders choose to reinvest their dividends, will the share price go back up to what it was prior to the dividend? That is an interesting question. The final theoretical price of the company does not need to be that. When a company distributes dividends its liquidity diminish, there is an impact on the balance sheet of the company. If all investors go to the secondary market and reinvest the dividends in the shares, that does not restore the cash in the balance sheet of the company, hence the theoretical real value of the company is different before the dividends. Of course, in practice there is not such a thing as one theoretical value. In reality, if everybody reinvest the dividend, that will put upward pressure over the price of the company and, depending on the depth of the offers, meaning how many orders will counterbalance the upward pressure at the moment, the final price will be determined, which can be higher or lower than before, not necessarily equal. I ask because some efts like SPY automatically reinvest dividends. So what is the effect of this reinvestment on the stock price? Let us see the mechanics of these purchases. When a non distributing ETF receives cash from the dividends of the companies, it takes that cash and reinvest it in the whole basket of stocks that compose the index, not just in the companies that provided the dividends. The net effect of that is a small leverage effect. Let us say you bought one unit of SPY, and during the whole year the shares pay 2% of dividends that are reinvested. At the end of that year, it will be equivalent to having 1.02 units of SPY." }, { "docid": "352484", "title": "", "text": "\"In financial theory, there is no reason for a difference in investor return to exist between dividend paying and non-dividend paying stocks, except for tax consequences. This is because in theory, a company can either pay dividends to investors [who can reinvest the funds themselves], or reinvest its capital and earn the same return on that reinvestment [and the shareholder still has the choice to sell a fraction of their holdings, if they prefer to have cash]. That theory may not match reality, because often companies pay or don't pay dividends based on their stage of life. For example, early-stage mining companies often have no free cashflow to pay dividends [they are capital intensive until the mines are operational]. On the other side, longstanding companies may have no projects left that would be a good fit for further investment, and so they pay out dividends instead, effectively allowing the shareholder to decide where to reinvest the money. Therefore, saying \"\"dividend paying\"\"/\"\"growth stock\"\" can be a proxy for talking about the stage of life + risk and return of a company. Saying dividend paying implies \"\"long-standing blue chip company with relatively low capital requirements and a stable business\"\". Likewise \"\"growth stocks\"\" [/ non-dividend paying] implies \"\"new startup company that still needs capital and thus is somewhat unproven, with a chance for good return to match the higher risk\"\". So in theory, dividend payment policy makes no difference. In practice, it makes a difference for two reasons: (1) You will most likely be taxed differently on selling stock vs receiving dividends [Which one is better for you is a specific question relying on your jurisdiction, your current income, and things like what type of stock / how long you hold it]. For example in Canada, if you earn ~ < $40k, your dividends are very likely to have a preferential tax treatment to selling shares for capital gains [but your province and specific other numbers would influence this]. In the United States, I believe capital gains are usually preferential as long as you hold the shares for a long time [but I am not 100% on this without looking it up]. (2) Dividend policy implies differences in the stage of life / risk level of a stock. This implication is not guaranteed, so be sure you are using other considerations to determine whether this is the case. Therefore which dividend policy suits you better depends on your tax position and your risk tolerance.\"" }, { "docid": "311214", "title": "", "text": "To follow up on Quid's comment, the share classes themselves will define what level of dividends are expected. Note that the terms 'common shares' and 'preferred shares' are generally understood terms, but are not as precise as you might believe. There are dozens/hundreds of different characteristics that could be written into share classes in the company's articles of incorporation [as long as those characteristics are legal in corporate law in the company's jurisdiction]. So in answering your question there's a bit of an assumption that things are working 'as usual'. Note that private companies often have odd quirks to their share classes, things like weird small classes of shares that have most of the voting rights, or shares with 'shotgun buyback clauses'. As long as they are legal clauses, they can be used to help control how the business is run between various shareholders with competing interests. Things like parents anticipating future family infighting and trying to prevent familial struggle. You are unlikely to see such weird quirks in public companies, where the company will have additional regulatory requirements and where the public won't want any shock at unexpected share clauses. In your case, you suggested having a non-cumulative preferred share [with no voting rights, but that doesn't impact dividend payment]: There are two salient points left related to payout that the articles of incorporation will need to define for the share classes: (1) What is the redemption value for the shares? [This is usually equal to the cost of subscribing for the shares in the first place; it represents how much the business will need to pay the shareholder in the event of redemption / recall] (2) What is the stated dividend amount? This is usually defined at a rate that's at or a little above a reasonable interest rate at the time the shares are created, but defined as $ / share. For example, the shares could have $1 / share dividend payment, where the shares originally cost $50 each to subscribe [this would reflect a rate of payment of about 2%]. Typically by corporate law, dividends must be paid to preferred shares, to the extent required based on the characteristics of the share class [some preferred shares may not have any required dividends at all], before any dividends can be paid to common shares. So if $10k in dividends is to be paid, and total preferred shares require $15k of non-cumulative dividends each year, then $0 will be paid to the common shares. The following year, $15k of dividends will once again need to be paid to the preferred shares, before any can be paid to the common shares." }, { "docid": "61787", "title": "", "text": "I think Wikipedia offers a very good explanation: A dividend reinvestment program or dividend reinvestment plan (DRIP) is an equity investment option offered directly from the underlying company. The investor does not receive quarterly dividends directly as cash; instead, the investor's dividends are directly reinvested in the underlying equity. The investor must still pay tax annually on his or her dividend income, whether it is received or reinvested. This allows the investment return from dividends to be immediately invested for the purpose of price appreciation and compounding, without incurring brokerage fees or waiting to accumulate enough cash for a full share of stock. So essentially, a dividend reinvestment plan is offered by companies directly, allowing investors to bypass brokerages, and immediately re-invests dividends rather than paying them out in cash. Investopedia also gives a straighforward definition: A plan offered by a corporation that allows investors to reinvest their cash dividends by purchasing additional shares or fractional shares on the dividend payment date. A DRIP is an excellent way to increase the value of your investment. Most DRIPs allow you to buy shares commission free and at a significant discount to the current share price. Most DRIPS don't allow reinvestments much lower than $10. I had a hard time finding a comprehensive listing of companies that offered DRPs (or DRIPs), but MyDollarPlan.com offers these suggestions: Finding a Dividend Reinvestment Plan: Computershare offers one-stop shopping for hundreds of dividend reinvestment plans. They offer a searchable list that can be filtered to easily find a dividend reinvestment plan that fits your needs. You can also use OneShare. Probably the best way to find out if a company offers a dividend reinvestment plan is to visit the company website. Most companies have an Investor Relations area that will highlight the various options available to shareowners. For example: Coca-Cola, Disney, and Wal-Mart. Hope this helps! @YMCbuzz" }, { "docid": "456470", "title": "", "text": "What is a dividend? Essentially, for every share of a dividend stock that you own, you are paid a portion of the company’s earnings. You get paid simply for owning the stock! For example, let’s say Company X pays an annualized dividend of 20 cents per share. Most companies pay dividends quarterly (four times a year), meaning at the end of every business quarter, the company will send a check for 1/4 of 20 cents (or 5 cents) for each share you own. This may not seem like a lot, but when you have built your portfolio up to thousands of shares, and use those dividends to buy more stock in the company, you can make a lot of money over the years. The key is to reinvest those dividends! Source: http://www.dividend.com/dividend-investing-101/what-are-dividend-stocks/ What is an ex dividend date Once the company sets the record date, the ex-dividend date is set based on stock exchange rules. The ex-dividend date is usually set for stocks two business days before the record date. If you purchase a stock on its ex-dividend date or after, you will not receive the next dividend payment. Instead, the seller gets the dividend. If you purchase before the ex-dividend date, you get the dividend. Source: https://www.sec.gov/answers/dividen.htm That said, as long as you purchased the stock before 6/4/17 you are entitled to the next dividend. If not, you'll get the following one after that." }, { "docid": "3118", "title": "", "text": "Dividends are normally paid in cash, so don't generally affect your portfolio aside from a slight increase to 'cash'. You get a check for them, or your broker would deposit the funds into a money-market account for you. There is sometimes an option to re-invest dividends, See Westyfresh's answer regarding Dividend Re-Investment Plans. As Tom Au described, the dividends are set by the board of directors and announced. Also as he indicated just before the 'record' date, a stock which pays dividends is worth slightly more (reflecting the value of the dividend that will be paid to anyone holding the stock on the record date) and goes down by the dividend amount immediately after that date (since you'd now have to hold the stock till the next record date to get a dividend) In general unless there's a big change in the landscape (such as in late 2008) most companies pay out about the same dividend each time, and changes to this are sometimes seen by some as 'indicators' of company health and such news can result in movement in the stock price. When you look at a basic quote on a ticker symbol there is usually a line for Div/yeild which gives the amount of dividend paid per share, and the relative yeild (as a percentage of the stock price). If a company has been paying dividends, this field will have values in it, if a company does not pay a dividend it will be blank or say NA (depending on where you get the quote). This is the easiest way to see if a company pays a dividend or not. for example if you look at this quote for Google, you can see it pays no dividend Now, in terms of telling when and how much of a dividend has been paid, most financial sites have the option when viewing a stock chart to show the dividend payments. If you expand the chart to show at least a year, you can see when and how much was paid in terms of dividends. For example you can see from this chart that MSFT pays dividends once a quarter, and used to pay out 13 cents, but recently changed to 16 cents. if you were to float your mouse over one of those icons it would also give the date the dividend was paid." }, { "docid": "478291", "title": "", "text": "\"In the US, dividends are presently taxed at the same rates as capital gains, however selling stock could lead to less tax owed for the same amount of cash raised, because you are getting a return of basis or can elect to engage in a \"\"loss harvesting\"\" strategy. So to reply to the title question specifically, there are more tax \"\"benefits\"\" to selling stock to raise income versus receiving dividends. You have precise control of the realization of gains. However, the reason dividends (or dividend funds) are used for retirement income is for matching cash flow to expenses and preventing a liquidity crunch. One feature of retirement is that you're not working to earn a salary, yet you still have daily living expenses. Dividends are stable and more predictable than capital gains, and generate cash generally quarterly. While companies can reduce or suspend their dividend, you can generally budget for your portfolio to put a reliable amount of cash in your pocket on schedule. If you rely on selling shares quarterly for retirement living expenses, what would you have done (or how much of the total position would you have needed to sell) in order to eat during a decline in the market such as in 2007-2008?\"" }, { "docid": "189142", "title": "", "text": "\"Dividend yields can also reflect important information about the company's status. For example, a company that has never lowered or stopped paying dividends is a \"\"strong\"\" company because it has the cash/earnings power to maintain its dividend regardless of the market. Ideally, a company should pay dividends for at least 10 years for an investor to consider the company as a \"\"consistent payer.\"\" Furthermore, when a company pays dividend, it generally means that it has more cash than it can profitably reinvest in the business, so companies that pay dividends tend to be older but more stable. An important exception is REIT's and their ilk - to avoid taxation, these types of funds must distribute 90% of their earnings to their shareholders, so they pay very high dividends. Just look at stocks like NLY or CMO to get an idea. The issue here, however, is two fold: So a high dividend can be great [if it has been paid consistently] or risky [if the company is new or has a short payment history], and dividends can also tell us about what the company's status is. Lastly, taxation on dividend income is higher than taxation on capital gains, but by reinvesting dividends you can avoid this tax and lower your potential capital gain amount, thus limiting taxes. http://www.tweedy.com/resources/library_docs/papers/highdiv_research.pdf is an excellent paper on dividend yields and investing.\"" }, { "docid": "168123", "title": "", "text": "\"It could be just as exploitable given the current system. Also, who is this \"\"owner\"\"? A large shareholder of a public corporation isn't just going to come into 16 houses. There's a board of directors, and about a million other shareholders, including those in blackrock and vangaurd who have nothing to gain from allowing such corruption. A private company's owner who decided to buy himself a house on the company's dime and not tell the IRS can do so at his peril regardless of tax policy. I still don't understand the point.\"" }, { "docid": "506447", "title": "", "text": "Firstly, investors love dividend paying company as dividends are proof of making profit (sometimes dividend can be paid out of past profits too) Secondly, investor cash in hand is better than potential earnings by the company by way of interest. Investor feels good to redeploy received cash (dividend) on their own Thirdly, in some countries dividend are tax free income as tax on dividends has already been paid. As average tax on dividend is lower than maximum marginal tax; for some investor it generates extra post tax income Fourthly, dividend pay out ratio of most companies don't exceed 30% of available fund for paying (surplus cash) so it is seen as best of both the world Lastly, I trust by instinct a regular dividend paying company more than not paying one in same sector of industry" }, { "docid": "1198", "title": "", "text": "Yes, as long as you own the shares before the ex-dividend date you will get the dividends. Depending on your instructions to your broker, you can receive cash dividends or you can have the dividends reinvested in more shares of the company. There are specific Dividend ReInvestment Plans (or DRIPs) if you are after stock growth rather than income from dividend payments." }, { "docid": "107218", "title": "", "text": "It is a bit more complicated than whether it pays more or less dividends. You should make your decision based on how well the company is performing both fundamentally and technically. Concentrating mainly on the fundamental performance for this question, most good and healthy companies make enough profits to both pay out dividends and invest back into the company to keep growing the company and profits. In fact a good indication of a well performing company is when their dividend per share and earnings per share are both growing each year and the dividends per share are less than the earnings per share (that way you know dividends are being paid out from new profits and not existing cash holdings). This information can give you an indication of both a stable and growing company. I would rather invest in a company that pays little or no dividends but is increasing profits and growing year after year than a company that pays higher dividends but its profits are decreasing year after year. How long will the company continue to pay dividends for, if it starts making less and less profits to pay them with? You should never invest in a company solely because they pay dividends, if you do you will end up losing money. It is no use making $1 in dividends if you lose $2+ because the share price drops. The annual returns from dividends are often between 1% and 6%, and, in some cases, up to 10%. However, annual returns from capital gains can be 20%, 50%, 100% or more for a stable and growing company." }, { "docid": "464834", "title": "", "text": "&gt;I get the idea behind it but certainly you would agree that it can be seen as a selfish mindset. Yes, but capitalism is selfish and wage-labor is exploitation in the first place. If you want people caring for the group goals, getting absorbed, and giving their all to the team, you don't hire wage/salary workers, you inspire a band of brothers." }, { "docid": "92516", "title": "", "text": "First, you need to understand that not every investor's goals are the same. Some investors are investing for income. They want to invest in a profitable company and use the profit from the company as income. If that investor invests only in stocks that do not pay a dividend, the only way he can realize income is to sell his investment. But he can invest in companies that pay a regular dividend and use that income while keeping his investment intact. Imagine this: Let's say I own a profitable company, and I offer to sell you part ownership in that company. However, I tell you this upfront: no matter how much profit our company makes, you will never get a penny from me. You will be getting a stock certificate - a piece of paper - and that's it. You can watch the company grow, and you can tell yourself you own it, but the only way you will personally benefit from your investment would be to sell your piece to someone else, who would also never see a penny in profit. Does that sound like a good investment? The fact of the matter is, stocks in companies that do not distribute dividends do have value, but this value is largely based on the potential of profits/dividends at some point in the future. If a company vows never ever to pay dividends, why would anyone invest? An investment would be more of a donation (like Kickstarter) at that point. A company that pays dividends is possibly past their growth stage. That doesn't necessarily mean that they have stopped growing altogether, but remember that an expansion project for any company does not automatically yield a good result. If a company does not have a good opportunity currently for a growth project, I as an investor would rather get a dividend than have the company blow all the profit on a ill-fated gamble." }, { "docid": "221499", "title": "", "text": "If your account drops close to zero, Wells Fargo will choose that moment to apply their monthly maintenance fees so they can also apply overdraft fees. Its not that they are irresponsible, its that a much better equipped entity is exploiting the situation to bleed them dry." }, { "docid": "106087", "title": "", "text": "The S&P 500 is an index, you can't buy shares of an index, but you can find index funds to invest in. Each company in that fund that pays dividends will do so on their own schedule, and the fund you've invested in will either distribute dividends or accumulate them (re-invest), this is pre-defined, not something they'd decide quarter to quarter. If the fund distributes dividends, they will likely combine the dividends they receive and distribute to you quarterly. The value you've referenced represents the total annual dividend across the index, dividend yield for S&P500 is currently ~1.9%, so if you invested $10,000 a year ago in a fund that matched the S&P 500, you'd have ~$190 in dividend yield." } ]

[ { "docid": "13217", "title": "", "text": "\"In addition to the other answers it's also noteworthy that the stock exchanges themselves adjust the price quotes via their ex-div mechanism. All limit orders present in the book when the stock goes ex-div will be adjusted by the dividend. Which means you can't even get \"\"accidentally\"\" filled in the very unlikely case that everyone forgot to adjust their quotes.\"" } ]

[ { "docid": "245117", "title": "", "text": "The dividend yield can be used to compare a stock to other forms of investments that generate income to the investor - such as bonds. I could purchase a stock that pays out a certain dividend yield or purchase a bond that pays out a certain interest. Of course, there are many other variables to consider in addition to yield when making this type of investment decision. The dividend yield can be an important consideration if you are looking to invest in stocks for an income stream in addition to investing in stocks for gain by a rising stock price. The reason to use Dividend/market price is that it changes the dividend from a flat number such as $1 to a percentage of the stock price, which thus allows it to be more directly compared with bonds and such which return a percentage yeild." }, { "docid": "67253", "title": "", "text": "\"is it worth it? You state the average yield on a stock as 2-3%, but seem to have come up with this by looking at the yield of an S&P500 index. Not every stock in that index is paying a dividend and many of them that are paying have such a low yield that a dividend investor would not even consider them. Unless you plan to buy the index itself, you are distorting the possible income by averaging in all these \"\"duds\"\". You are also assuming your income is directly proportional to the amount of yield you could buy right now. But that's a false measure because you are talking about building up your investment by contributing $2k-$3k/month. No matter what asset you choose to invest in, it's going to take some time to build up to asset(s) producing $20k/year income at that rate. Investments today will have time in market to grow in multiple ways. Given you have some time, immediate yield is not what you should be measuring dividends, or other investments, on in my opinion. Income investors usually focus on YOC (Yield On Cost), a measure of income to be received this year based on the purchase price of the asset producing that income. If you do go with dividend investing AND your investments grow the dividends themselves on a regular basis, it's not unheard of for YOC to be north of 6% in 10 years. The same can be true of rental property given that rents can rise. Achieving that with dividends has alot to do with picking the right companies, but you've said you are not opposed to working hard to invest correctly, so I assume researching and teaching yourself how to lower the risk of picking the wrong companies isn't something you'd be opposed to. I know more about dividend growth investing than I do property investing, so I can only provide an example of a dividend growth entry strategy: Many dividend growth investors have goals of not entering a new position unless the current yield is over 3%, and only then when the company has a long, consistent, track record of growing EPS and dividends at a good rate, a low debt/cashflow ratio to reduce risk of dividend cuts, and a good moat to preserve competitiveness of the company relative to its peers. (Amongst many other possible measures.) They then buy only on dips, or downtrends, where the price causes a higher yield and lower than normal P/E at the same time that they have faith that they've valued the company correctly for a 3+ year, or longer, hold time. There are those who self-report that they've managed to build up a $20k+ dividend payment portfolio in less than 10 years. Check out Dividend Growth Investor's blog for an example. There's a whole world of Dividend Growth Investing strategies and writings out there and the commenters on his blog will lead to links for many of them. I want to point out that income is not just for those who are old. Some people planned, and have achieved, the ability to retire young purely because they've built up an income portfolio that covers their expenses. Assuming you want that, the question is whether stock assets that pay dividends is the type of investment process that resonates with you, or if something else fits you better. I believe the OP says they'd prefer long hold times, with few activities once the investment decisions are made, and isn't dissuaded by significant work to identify his investments. Both real estate and stocks fit the latter, but the subtypes of dividend growth stocks and hands-off property investing (which I assume means paying for a property manager) are a better fit for the former. In my opinion, the biggest additional factor differentiating these two is liquidity concerns. Post-tax stock accounts are going to be much easier to turn into emergency cash than a real estate portfolio. Whether that's an important factor depends on personal situation though.\"" }, { "docid": "527636", "title": "", "text": "You only have to hold the shares at the opening of the ex-dividend date to get the dividends. So you can actually sell the shares on ex-dividend date and still get the dividends. Ex-dividend date occurs before the record date and payment date, so you will get the dividend even if you sold before the record date." }, { "docid": "185020", "title": "", "text": "\"Dividends are paid based on who owns the security on a designated day. If a particular security pays once per year, you hold 364 days and sell on the day before the \"\"critical\"\" day, you get no dividend. This is not special to 401(k) or to DRIP. It's just how the system works. The \"\"critical\"\" day is the day before the posted ex-dividend date for the security. If you own at the end of that day, you get the dividend. If you sell on that day or before, you do not. Your company changing providers is not in itself relevant. The important factor is whether you can still hold your same investments in the new plan. If not, you will not get the dividend on anything that you currently hold but \"\"sell\"\" due to the change in providers. If you can, then you potentially get the dividend so long as there's no glitch in the transition. Incidentally, it works the other way too. You might end up getting a dividend through the new plan for something that you did not hold the full year.\"" }, { "docid": "179716", "title": "", "text": "So a company can exploit cheap labour overseas, but their cash cannot help pension funds of people from abroad? Multinational Corporations have no national identity. Their profits shouldn't be regarded as being gotten in just one country. If Apple's offshore money gives a guy in Bangladesh a better pension, they can buy a nice Japanese scooter, which in turn allows a Japanese girl to buy an iPod. I'm an idealist, yes. I wish people would stop dividing this world up with fictitious borders and stop with the whole 'us vs them' thing." }, { "docid": "65295", "title": "", "text": "The owner of a long futures contract does not receive dividends, hence this is a disadvantage compared to owning the underlying stock. If the dividend is increased, and the future price would not change, there is an arbitrage possibility. For the sake of simplicity, assume that the stock suddenly starts paying a dividend, and that the risk free rate is zero (so interest does not play a role). One can expect that the future price is (rougly) equal to the stock price before the dividend announcment. If the future price would not change, an investor could buy the stock, and short a futures contract on the stock. At expiration he has to deliver the stock for the price set in the contract, which is under the assumptions here equal to the price he bought the stock for. But because he owned the stock, he receives the announced dividend. Hence he can make a risk-free profit consisting of the divivends. If interest do play a role, the argument is similar." }, { "docid": "1198", "title": "", "text": "Yes, as long as you own the shares before the ex-dividend date you will get the dividends. Depending on your instructions to your broker, you can receive cash dividends or you can have the dividends reinvested in more shares of the company. There are specific Dividend ReInvestment Plans (or DRIPs) if you are after stock growth rather than income from dividend payments." }, { "docid": "478291", "title": "", "text": "\"In the US, dividends are presently taxed at the same rates as capital gains, however selling stock could lead to less tax owed for the same amount of cash raised, because you are getting a return of basis or can elect to engage in a \"\"loss harvesting\"\" strategy. So to reply to the title question specifically, there are more tax \"\"benefits\"\" to selling stock to raise income versus receiving dividends. You have precise control of the realization of gains. However, the reason dividends (or dividend funds) are used for retirement income is for matching cash flow to expenses and preventing a liquidity crunch. One feature of retirement is that you're not working to earn a salary, yet you still have daily living expenses. Dividends are stable and more predictable than capital gains, and generate cash generally quarterly. While companies can reduce or suspend their dividend, you can generally budget for your portfolio to put a reliable amount of cash in your pocket on schedule. If you rely on selling shares quarterly for retirement living expenses, what would you have done (or how much of the total position would you have needed to sell) in order to eat during a decline in the market such as in 2007-2008?\"" }, { "docid": "572351", "title": "", "text": "Instead of giving part of their profits back as dividends, management puts it back into the company so the company can grow and produce higher profits. When these companies do well, there is high demand for them as in the long term higher profits equates to a higher share price. So if a company invests in itself to grow its profits higher and higher, one of the main reasons investors will buy the shares, is in the expectation of future capital gains. In fact just because a company pays a dividend, would you still buy it if the share price kept decreasing year after year? Lets put it this way: Company A makes record profits year after year, continually keeps beating market expectations, its share price keeps going up, but it pays no dividend instead reinvests its profits to continually grow the business. Company B pays a dividend instead of reinvesting to grow the business, it has been surprising the market on the downside for a few years now, it has had some profit warnings lately and its share price has consistently been dropping for over a year. Which company would you be interested in buying out of the two? I know I would be interested in buying Company A, and I would definitely stay away from Company B. Company A may or may not pay dividends in the future, but if Company B continues on this path it will soon run out of money to pay dividends. Most market gains are made through capital gains rather than dividends, and most people invest in the hope the shares they buy go up in price over time. Dividends can be one attractant to investors but they are not the only one." }, { "docid": "293933", "title": "", "text": "Zuck the cuck is the bad guy. He takes basic human instinct and exploits it. People are addicted to that shit like it's heroin. I can't say I'm not the same with Reddit but there's not an update to Reddits privacy policy taking away privacy every 2 weeks. You can talk about something and 10 minutes lateran advertisement pops up in Facebook with the subject you were talking about. He's finding out what people like and dislike so that propaganda can be more effective. If you don't think the government hasn't got a hold of mark zuckerberg and Facebook you're retarded." }, { "docid": "107218", "title": "", "text": "It is a bit more complicated than whether it pays more or less dividends. You should make your decision based on how well the company is performing both fundamentally and technically. Concentrating mainly on the fundamental performance for this question, most good and healthy companies make enough profits to both pay out dividends and invest back into the company to keep growing the company and profits. In fact a good indication of a well performing company is when their dividend per share and earnings per share are both growing each year and the dividends per share are less than the earnings per share (that way you know dividends are being paid out from new profits and not existing cash holdings). This information can give you an indication of both a stable and growing company. I would rather invest in a company that pays little or no dividends but is increasing profits and growing year after year than a company that pays higher dividends but its profits are decreasing year after year. How long will the company continue to pay dividends for, if it starts making less and less profits to pay them with? You should never invest in a company solely because they pay dividends, if you do you will end up losing money. It is no use making $1 in dividends if you lose $2+ because the share price drops. The annual returns from dividends are often between 1% and 6%, and, in some cases, up to 10%. However, annual returns from capital gains can be 20%, 50%, 100% or more for a stable and growing company." }, { "docid": "151871", "title": "", "text": "\"Their is no arbitrage opportunity with \"\"buying dividends.\"\" You're buying a taxable event. This is a largely misunderstood topic. The stock always drops by the amount if the dividend on the ex date. The stock opens that day trading \"\"ex\"\" (excluding) the dividend. It then pays out later based in the shareholders on record. There is a lot of talk about price movement and value here. That can happen but it's from trading not from the dividend per se. Yes sometimes you do see a stock pop the day prior to ex date because people are buying the stock for the dividend but the trading aspect of a stock is determined by supply and demand from people trading the stock. The dividends are paid out from the owners equity section of the balance sheet. This is a return of equity to shareholders. The idea is to give owners of the company some of their investment back (from when they bought the stock) without having the owners sell the shares of the company. After all if it's a good company you want to keep holding it so it will appreciate. Another similar way to think of it is like a bonds interest payment. People sometimes forget when trading that these are actual companies meant to be invested in. Your buying an ownership in the company with your cash. It really makes no difference to buy the dividend or not, all other things constant. Though market activity can add or lose value from trading as normal.\"" }, { "docid": "595625", "title": "", "text": "\"Dividends are one way to discriminate between companies to invest in. In the best of all worlds, your investment criteria is simple: \"\"invest in whatever makes me the most money on the timeline I want to have it.\"\" If you just follow that one golden rule, your future financial needs will be taken care of! Oh... you're not 100% proof positive certain which investment is best for you? Good. You're mortal. None of us magically know the best investment for us. We wing it, based on what information we can glean. For instance, we know that bonds tend to be \"\"safer\"\" than stocks, but with a lower return, so if something calls itself a bond, we treat it differently than we treat a stock. So what sorts of information do we have? Well, think of the stock market linguistically. A dividend is one way for a company to communicate with their stockholders in the best way possible: their pocketbooks. There's some generally agreed upon behaviors dividends have (such as they don't go down without some good reason for it, like a global recession or a plan to acquire another company that is well-accepted by the stockholders). If a company starts to talk in this language, people expect them to behave a certain way. If they don't, the stock gets blacklisted fast. A dividend itself isn't a big deal, but a dividend which isn't shunned by a lot of smart investors... that can be a big deal. A dividend is a \"\"promise\"\" (which can be broken, of course) to cash out some of the company's profits to its shareholders. Its probably one of the older tools out there (\"\"you give investors a share of the profits\"\" is pretty tried and true). It worked for many types of companies. If you see a dividend, especially one which has been reliable for many years, you can presume something about the type of company they are. Other companies find dividend is a poor tool to accomplish their goals. That doesn't mean they're better or worse, simply different. They're approaching the problem differently. Is that kind of different the kind you want in your books? Maybe. Companies which aren't choosing to commit a portion of their profits to shareholders are typically playing a more aggressive game. Are you comfortable that you can keep up with how they're using your money and make sure its in your interests? It can be harder in these companies where you simply hold a piece of paper and never get anything from them again.\"" }, { "docid": "594959", "title": "", "text": "\"I can think of one major income source you didn't mention, dividends. Rather than withdrawing from your pension pot, you can roll it over to a SIPP, invest it in quality dividend growth stocks, then (depending on your pension size) withdraw only the dividends to live on. The goal here is that you buy quality dividend growth stocks. This will mean you rarely have to sell your investments, and can weather the ups and downs of the market in relative comfort, while using the dividends as your income to live off of. The growth aspect comes into play when considering keeping up with inflation, or simply growing your income. In effect, companies grow the size of their dividend payments and you use that to beat the effects of inflation. Meanwhile, you do get the benefit of principle growth in the companies you've invested in. I don't know the history of the UK stock market, but the US market has averaged over 7% total return (including dividends) over the long term. A typical dividend payout is not much better than your annuity option though -- 3% to 4% is probably achievable. Although, looking at the list of UK Dividend Champion list (companies that have grown their dividend for 25 years continuous), some of them have higher yields than that right now. Though that might be a warning sign... BTW, given all the legal changes around buy-to-lets recently (increases stamp duty on purchase, reduction in mortgage interest deduction, increased paperwork burden due to \"\"right to rent\"\" laws, etc.) you want to check this carefully to make sure you're safe on forecasting your return.\"" }, { "docid": "197047", "title": "", "text": "Ok you're looking at this in a very confusing way. First, as said by CapitalNumb3rs, the dividend yield is the dividends paid in the year as a percent of the stock price. Given this fact then if the stock price moves down and the dividend stays the same then the yield increases. Company's don't usually pay out on a yield basis, that's mostly just a calculation to measure how strong a dividend is. This could mean either A. The stock is underpriced and will rise which will lower the yield to a more normal level or B. the company is not doing as well and eventually the dividends will decrease to a point where the yield again looks more normal. Second off let's look at it in a more realistic way that still takes into account your assumptions: **YEAR 1** 1. Instead of assuming buying 35% let's put this into a share amount. Let's say there are 1,000,000 shares so you just bought 350k shares for $700k. You paid a price of $2/share. Let's assume the market decides that's a fair price and it stays that way through the end of year 1. This gives us a market capitalization of $2 million. 2. The dividend paid out at year 1 is $60k so you could calculate on a per share basis which would be a dividend of $60k / 1 million shares or a $0.06 dividend per share. Our stock price is still at $2.00 so our yield comes out to $0.06 / $2.00 or 3.0% **YEAR 2** Assuming no additional shares issued there are still a total of 1 million shares outstanding. You owned 350k and now want to purchase another 50k (5% of outstanding share float). The market price you are able to purchase the 50k shares at has now changed which means that share price is now valued at $1.50 / share. We have a dividend paid out at $100k, which comes out to a dividend per share of $0.10. We have a share value of $1.50 and the $0.10 dividend per share giving us a new yield of 6.66%. **CONCLUSION:** There are many factors that can cause a company's stock price to fluctuate, some of it is hype based but some of it is a result of material changes. In your case the stock went down 25%. In most scenarios where a stock would have that much decline it would likely either not have been paying a dividend in the first place or would maybe not be paying one for much longer. Most companies that pay dividends are larger and more mature companies with a steady, healthy and predictable cash flow. Also most companies that are that size would not trade a stock under $3.00, I know this is just an example but the scenario is definitely a bit extreme in terms of the price drop and dividend increase. Again the yield is just a calculation that depends on the dividend that is usually planned in advance and the stock price that can fluctuate for many reasons. I hope this made everything more clear and let me know if you have any other questions." }, { "docid": "221499", "title": "", "text": "If your account drops close to zero, Wells Fargo will choose that moment to apply their monthly maintenance fees so they can also apply overdraft fees. Its not that they are irresponsible, its that a much better equipped entity is exploiting the situation to bleed them dry." }, { "docid": "328182", "title": "", "text": "\"I have 3 favorite sites that I use. http://www.nasdaq.com/symbol/mcd/dividend-history - lists the entire history of dividends and what dates they were paid so you can predict when future dividends will be paid. http://www.dividend.com/dividend-stocks/services/restaurants/mcd-mcdonalds/ - this site lists key stats like dividend yield, and number of years dividend has increased. If the next dividend is announced, it shows the number of days until the ex-dividend date, the next ex-div and payment date and amount. If you just want to research good dividend stocks to get into, I would highly recommend the site seekingalpha.com. Spend some time reading the articles on that site under the dividends section. Make sure you read the comments on each article to make sure the author is not way off base. Finally, my favorite tool for researching good dividend stocks is the CCC Lists produced by Seeking Alpha's David Fish. It is a giant spreadsheet of stocks that have been increasing dividends every year for 5+, 10+, or 25+ years. The link to that spreadsheet is here: http://dripinvesting.org/tools/tools.asp under \"\"U.S. Dividend Champions\"\".\"" }, { "docid": "522792", "title": "", "text": "No, it is not. If that were the case, you would have no such thing as a growth stock. Dividends and dividend policies can change at any time. The primary reason for investment in a company is access to a firm's earnings, hence the idea of P/E. Dividends are factored in with capital appreciation, but studies have shown that dividends are actually detrimental to future growth. They tend to allow easier access to shareholders because of the payouts, reducing the cost of equity. But, if you reduce the growth rate as well, sensitivity tables can demonstrate deterioration or stagnation over time. Some good examples are GE and Microsoft." }, { "docid": "49849", "title": "", "text": "In a very basic sense you can only issue a dividend from distributable profits, which in practice is usually the businesses retained profits. As a new company you will not have any retained profits and therefore technically no distributable profits. In practice though, many companies issue interim dividends before the year end, however you are best taking professional advice as to whether you are in a position to do this. If the company pays out dividends in the first year and then makes a loss you will have been deemed to make an illegal distribution. The 'dividend' can then actually be treated as loan rather than a distribution but there are potential tax implications there. See ACCA guidance here on Illegal Dividends. A Chartered Accountant will be able to advise you accordingly." } ]

[ { "docid": "513367", "title": "", "text": "This is more legal and less personal finance question. You should immediately lodge a police complaint mentioning that some persons are using your PAN card details for activities not authorized by you. In the meantime also engage the services of a CA and reply back to income tax authorities. Do not ignore the notice." } ]

[ { "docid": "55091", "title": "", "text": "It depends on the country and possibly the bank. In the United States, my savings accounts compound monthly, using the average balance for the month. You should have an account agreement or terms document that details how the bank does computations like interest payments." }, { "docid": "412314", "title": "", "text": "Thanks for the detailed reply. One thing that makes me furious is that whenever something screws up in other sectors (such as contaminated drugs, or a residential tower catching on fire), we always take necessary steps to prevent it from happening again. But for the financial sector, when they screw up there's this careless hand waving: Sorry, nothing could've prevented this... nothing can be done... perfect storm... market forces... those subprime mortgagors should've paid up... Like, seriously? We're just supposed to sit back and let it happen again and again? I never borrowed a cent from any bank in my life, yet I still got royally screwed by the recession in terms of where I am in my professional career. This goes for millions of other people too. Something needs to be done. Of course every regulation has its drawback, but as long as the benefit outweighs the detriment, I'm absolutely for it." }, { "docid": "453299", "title": "", "text": "\"For the first part of your question; Refer to related question Why do some online stores not ask for the 3-digit code on the back of my credit card? The other case of Airport ticket machines, requires the physical presence of card. The assumption is that if you had the card before and after the transaction, it was you who used it for transaction. As the amounts are small its really easy by anyone [merchant, Banks] to write this off. The only way to misuse would be if you lost the card and someone used it. Also these ticket machines would have built in feature where by you cannot buy more than \"\"X\"\" tickets for the day. Ensuring max loss on a stolen card is limited to a small amount.\"" }, { "docid": "58511", "title": "", "text": "\"I have 2 PayPal accounts for this purpose (with different email addresses). The first account is tied to my real email address, and has my real name, phone and home address associated with it. This account is also connected to my bank account and credit cards. For riskier transactions where I don't need physical delivery (or will accept delivery to my local post-office in cases where I don't trust the seller with my personal details) I use my secondary account, which has a secondary email address of mine, and a fake name and with a fake address, it is not connected to any external accounts. To send or receive money \"\"anonymously\"\" I first send money from my real account to my fake account (inter-account transfers are free with PayPal), and then send the money to the seller from the fake account. This is in violation of PayPal's terms of service, but I've been using this system for the past 5+ years without any issues.\"" }, { "docid": "123511", "title": "", "text": "\"What can I do to help him out, but at the same time protect myself from any potential scams? Find out why he can't do this himself. Whether your relative is being sincere or not, if he owns both accounts then he should be able to transfer money between them by himself. If you can find a way to solve that issue without involving your bank account, so much the better. Don't settle for \"\"something about authorized payees and expired cards.\"\" Get details, write them down. If possible, get documents. Then go to a bank or financial adviser you can trust and run those details by them to see what they have to say. Even if there's no scam, if what he's trying to do is illegal (even if he doesn't realize it himself) then you want to know before you get involved. You say you're willing to deal with \"\"other issues\"\" separately, but keep in mind that, even if there's no external scam here, those \"\"other issues\"\" could include hefty fees, censures on your own account, or jail time. Ask yourself: Does it make sense that this relative has an account overseas? I don't have any overseas accounts, because I don't do business in other countries. Is your relative a dual-citizen? Does he travel a lot? What country is the overseas account in? How long has he had this account? What bank is it with? Where the money is going is just as important as how it gets there (ie: through your account.) Arguably more so. Keep in mind that many scammers tell their marks not to share what's going on with anyone else. (Because doing so increases the odds of someone telling them to snap out of it.) It's entirely possible he's being scammed himself and just not telling you the whole story because the 419er is telling him to keep it quiet. (Check out that link for more details on common scams that your relative may be unwittingly part of, btw.) Get as many details as possible about what he's doing and why. If he's communicating with anyone else regarding this transfer, find out who. If there are emails, ask his permission to read them and watch for anything suspicious (ie: people who can't spell their own name consistently, constant pressure to act quickly, etc.)\"" }, { "docid": "351340", "title": "", "text": "In my opinion, every person, regardless of his or her situation, should be keeping track of their personal finances. In addition, I believe that everyone, regardless of their situation, should have some sort of budget/spending plan. For many people, it is tempting to ignore the details of their finances and not worry about it. After all, the bank knows how much money I have, right? I get a statement from them each month that shows what I have spent, and I can always go to the bank's website and find out how much money I have, right? Unfortunately, this type of thinking can lead to several different problems. Overspending. In olden days, it was difficult to spend more money than you had. Most purchases were made in cash, so if your wallet had cash in it, you could spend it, and when your wallet was empty, you were required to stop spending. In this age of credit and electronic transactions, this is no longer the case. It is extremely easy to spend money that you don't yet have, and find yourself in debt. Debt, of course, leads to interest charges and future burdens. Unpreparedness for the future. Without a plan, it is difficult to know if you have saved up enough for large future expenses. Will you have enough money to pay the water bill that only shows up once every three months or the property tax bill that only shows up once a year? Will you have enough money to pay to fix your car when it breaks? Will you have enough money to replace your car when it is time? How about helping out your kids with college tuition, or funding your retirement? Without a plan, all of these are very difficult to manage without proper accounting. Anxiety. Not having a clear picture of your finances can lead to anxiety. This can happen whether or not you are actually overspending, and whether or not you have enough saved up to cover future expenses, because you simply don't know if you have adequately covered your situation or not. Making a plan and doing the accounting necessary to ensure you are following your plan can take the worry out of your finances. Fear of spending. There was an interesting question from a user last year who was not at all in trouble with his finances, yet was always afraid to spend any money, because he didn't have a budget/spending plan in place. If you spend money on a vacation, are you putting your property tax bill in jeopardy? With a good budget in place, you can know for sure whether or not you will have enough money to pay your future expenses and can spend on something else today. This can all be done with or without the aid of software, but like many things, a computer makes the job easier. A good personal finance program will do two things: Keeps track of your spending and balances, apart from your bank. The bank can only show you things that have cleared the bank. If you set up future payments (outside of the bank), or you write a check that has not been cashed yet, or you spend money on a credit card and have not paid the bill yet, these will not be reflected in your bank balance online. However, if you manually enter these things into your own personal finance program, you can see how much money you actually have available to spend. Lets you plan for future spending. The spending plan, or budget, lets you assign a job to every dollar that you own. By doing this, you won't spend rent money at the bar, and you won't spend the car insurance money on a vacation. I've written before about the details on how some of these software packages work. To answer your question about double-entry accounting: Some software packages do use true double-entry accounting (GnuCash, Ledger) and some do not (YNAB, EveryDollar, Mvelopes). In my opinion, double-entry accounting is an unnecessary complication for personal finances. If you don't already know what double-entry accounting is, stick with one of the simpler solutions." }, { "docid": "453025", "title": "", "text": "If it's just an ordinary credit card I'd think he could merely dispute the charges, since he's saying they 'created' (which I presume means applied for and received) a card, it should not affect his accounts directly. And especially since application details may be bogus, he should be able to prove it was not him. Even if they got HIS credit card number, he should be able to dispute those charges that are not his, especially if they went to a different address, or were charged someplace (like another city) where he was not present at that time. OTOH, if they created a DEBIT card that was linked to his bank account somehow, well then, that could be a lot more difficult to recover from, but even then, if it's not his signature that was used to apply for the card, or on any charges that had to be signed for etc, he should be able to dispute it and get the bank to put the money back in his account since it will be a case of forgery etc. The big problem with ID theft is people tend to ruin your credit rating, and you end up having to fend off bill collectors etc. The primary thing it costs you (speaking from experience of having checks stolen and forged using a fake drivers license) is the TIME and hassle of getting everything straightened out and put right. In my case it took a few hours at the credit union, and all the money was back, in a new account (the old one having been closed) when I left. Dealing with all the poor merchants that were taken, and with bill collectors on the other hand took months. but I never once in the process needed 'quick money' from anyone. So the need for 'quick money' seems a bit doubtful. I'd want a lot more details of exactly why he needs money from you. Refer your friend to this Federal Trade Commission site and make sure he takes the steps listed, and especially pays attention to the parts about keeping notes of every single person he talks with, including name, date, time, and pertinent details of the conversation. If he has some idea HOW this happened (as in a robbery) then report it to the proper authorities, and insist on getting a case number. talking with bill collectors is the worst, just trying to get ahold of them when they send you letters (and talk to a person, not a recorded number with instructions on how to pay them) is sometimes nearly impossible (google was my friend) and a lot of times they didn't want to back off till I gave them the case number with the police, that somehow magically made it 'real' to them and not just my telling them a story." }, { "docid": "31704", "title": "", "text": "This answer fills in some of the details you are unsure about, since I'm further along than you. I bought the ESPP shares in 2012. I didn't sell immediately, but in 2015, so I qualify for the long-term capital gains rate. Here's how it was reported: The 15% discount was reported on a W2 as it was also mentioned twice in the info box (not all of my W2's come with one of these) but also This showed the sale trade, with my cost basis as the discounted price of $5000. And for interests sake, I also got the following in 2012: WARNING! This means that just going ahead and entering the numbers means you will be taxed twice! once as income and once as capital gains. I only noticed this was happening because I no longer worked for the company, so this W2 only had this one item on it. This is another example of the US tax system baffling me with its blend of obsessive compulsive need for documentation coupled with inexplicably missing information that's critical to sensible accounting. The 1099 documents must (says the IRS since 2015) show the basis value as the award price (your discounted price). So reading the form 8949: Note: If you checked Box D above but the basis reported to the IRS was incorrect, enter in column (e) the basis as reported to the IRS, and enter an adjustment in column (g) to correct the basis. We discover the number is incorrect and must adjust. The actual value you need to adjust it by may be reported on your 1099, but also may not (I have examples of both). I calculated the required adjustment by looking at the W2, as detailed above. I gleaned this information from the following documents provided by my stock management company (you should the tax resources section of your provider):" }, { "docid": "59023", "title": "", "text": "\"According to an article on Bankrate.com from 2011, yes, it can hurt your credit: With individual liability accounts, the employee holds all responsibility for the charges, even if the company pays the issuer directly. Joint liability means the company and employee share the responsibility for payments, says Mahendra Gupta, author of the RPMG survey. In both cases, if the card isn't paid and the account becomes delinquent, it will pop up on the employee's credit report and dent his or her credit score, says Barry Paperno, consumer affairs manager at myFICO.com. It doesn't matter if the company was supposed to make the payment; the repercussions fall on the employee. \"\"It will impact your score no differently than if you were late on one of your own accounts,\"\" Paperno says. Usually, with corporate credit cards, the employee is liable along with the employer for charges on the card. The intent is to provide the employee with an incentive not to misuse the card. However, this can be a problem if your company is late in paying bills. In the distant past, I had a corporate credit card. I was not supposed to have to pay the bill, but I did receive a bill in the mail every month. And occasionally, the payment was late. In my case, these late payments never showed up on my credit report. I can't remember now whether or not this card was reported on my credit report at all. And I remember being told when I got the card that I was jointly responsible for the card with the company. However, your experience may be different. Do the on-time payments show up on your credit report? If so, that may be an indication that a late payment might appear.\"" }, { "docid": "411034", "title": "", "text": "I wrote an article about this a while ago with detailed instructions, so I'll link to it here. Here's a snippet about how to use the Roth IRA loophole and report it properly: You don’t have any Traditional/Rollover IRA at all. You deposit up to the yearly maximum (currently $5500) into a traditional IRA. In your case, you re-characterized, which means you essentially deposited. The fact that it lost money may help you later if you have extra amounts in Traditional IRA. You convert your traditional IRA to become Roth IRA ($5500 change designation from Traditional IRA to Roth IRA). You fill IRS form 8606 and attach it to your yearly tax return, no tax due. You have a fully funded Roth IRA account. If you have amounts in the Traditional IRA in excess to what you contributed last year - it becomes a bit more complicated and you need to prorate. See my article for a detailed example. On the form 8606 you fill the numbers as they are. You deposited to IRA 5500, you converted 5100, your $400 loss is lost (unless you have more money in IRA from elsewhere). If you completely distribute your IRA, you can deduct the $400 on your Schedule A, if you itemize." }, { "docid": "118557", "title": "", "text": "See the accepted answer for this question. What effect will credit card churning for frequent flyer miles have on my credit score? This does not directly answer 'how often...' that you asked, but it states that the answerer opens 5-15 accounts per year. So the answer to your question is, as often as you want, as long as you manage your account ages. The reason for this is that there are two factors in opening a new account that affect your credit card score. One is average age of accounts. The other is credit inquiries. That answerer, with FICO in high 700s, sees about a 5% swing based on new cards and closing old ones. You'll have to manage average age of accounts. I assume this is done by keeping some older ones open to prop up the average, and by judiciously closing the churn accounts. Finally, if you choose to engage in churning, and you intend to apply for a large loan and want a good credit score, simply pause the account open/close part of the churn a couple of months ahead of time. Your score should recover from the temporary hits of the inquiries. The churning communities really do have how to guides which discuss the details of this. Key phrase: credit card churning." }, { "docid": "402814", "title": "", "text": "The initial story sounds normal. Happens every day. Checksums cannot prevent this, since it is a typo by the sender. The sender typed in a wrong account number. That account number happened to exist (so the sender wouldn't get any immediate error message), your account. But, that innocent story can also be used as part of a money laundering plan. Namely, to give the money a legitimate source. Also can be used in a scheme to frame you for something. The question of how the person got your phone number raises suspicion. The bluffs to avoid the normal paperwork, and then disappearing, make it incriminating. No doubt. Take this to the police. The question arises: even if the plan (whatever it was) failed, why didn't he do the paperwork and get the money back? The answer is that that would leave a trail to possibly be picked up in a future investigation." }, { "docid": "496096", "title": "", "text": "\"The fact that dividends grow in perpetuity does not prevent one from calculating duration. In fact, many academic papers look at exactly this problem, such as Lewin and Satchell. This Wilmott thread discusses some of the pros and cons of the concept in some detail. PS: Although I was already broadly familiar with the literature and I use the duration of equities in some of my every-day work as a professional working in finance, I found the links above doing a simple google search for \"\"equity duration.\"\"\"" }, { "docid": "233781", "title": "", "text": "\"That's accurate. Here is another risk with the current checking system, which many people are not aware of: Anyone who knows your checking account number can learn what your balance in that account is. (This is bank-specific, but it is possible at the major banks I've checked.) How does that work? Many banks have a phone line where you can dial up and interact with an automated voice response system, for various customer service tasks. One of the options is something like \"\"merchant check verification\"\". That option is intended to help a merchant who receives a check to verify whether the person writing the check has enough money in their account for the check to clear. If you select that option in the phone tree, it will prompt you to enter in the account number on the check and the amount of the check, and then it will respond by telling you either \"\"there are currently sufficient funds in the account to cash this check\"\" or \"\"there are not sufficient funds; this check would bounce\"\". Here's how you can abuse this system to learn how much someone has in their bank account, if you know their account number. You call up and check whether they've enough money to cash a $10,000 check (note that you don't actually have to have a check for $10,000 in your hands; you just need to know the account number). If the system says \"\"nope, it'd bounce\"\", then you call again and try $5,000. If the system says \"\"yup, sufficient funds for a $5,000 check\"\", then you try $7,500. If it says \"\"nope, not enough for that\"\", you try $6,250. Etcetera. At each step, you narrow the range of possible account balances by a factor of two. Consequently, after about a dozen or so steps, you will likely know their balance to within a few dollars. (Computer scientists know this procedure by the name \"\"binary search\"\". The rest of us may recognize it as akin to a game of \"\"20 questions\"\".) If this bothers you, you may be able to protect your self by calling up your bank and asking them how to prevent it. When I talked to my bank (Bank of America), they told me they could put a fraud alert flag on your account, which would disable the merchant check verification service for my account. It does mean that I have to provide a 3-digit PIN any time I phone up my bank, but that's fine with me. I realize many folks may terribly not be concerned about revealing their bank account balance, so in the grand scheme of things, this risk may be relatively minor. However, I thought I'd document it here for others to be aware of.\"" }, { "docid": "290508", "title": "", "text": "\"As far as I can recall, savings and chequing accounts exist due to regulations on the banking industry that put were into effect after the depression to prevent a \"\"run\"\" on the bank. A chequing account is a \"\"demand\"\" account, meaning you can go and demand your money, and they have to pay immediately, by means of a withdrawal or a cheque. Banks used to get out of hand and loan out pretty much all the money they had on deposit, and of course those people with loans just put the money they borrowed into another chequing account and the bank loaned that out to someone else. The money that people believed they had access to multiplied indefinitely. However, when everyone goes to take that money out at the same time, you have a run on the bank. Therefore, government regulations stipulate a % that the bank must have on-hand. The typical number is 5%. That effectively limits the money multiplier to 19 times. Savings accounts get around this restriction by putting limits on how much and how quickly you can withdraw the amounts. They pay you more interest because the money in a savings account is worth more to them, because it's not subject to those restrictions. Some chequing accounts pay interest, but you have to maintain a minimum balance. Some savings accounts allow you to write cheques, but I assume the withdrawal limitations probably still apply. There's also something to do with deposit insurance (as in, the chequing accounts are covered by government deposit insurance, but savings accounts are not). I'm not 100% certain of that though.\"" }, { "docid": "445314", "title": "", "text": "\"This is definitely a scam. My husband was inquiring with a \"\"company\"\" that was offering him to be. Representative for them. He got the same job details but the company was called Ceneo. I did due diligence and found that the real Ceneo has no problems receiving money directly from buyers around the world. The fake company mirrored their website, posted jobs on the net,hoping to \"\"employ\"\" unsuspecting people in the U.S. This is their reply to my husband when he asked the job details. DO NOT GET SCAMMED and held accountable for money laundering.\"" }, { "docid": "384892", "title": "", "text": "\"The \"\"hold\"\" is just placeholder that prevents you from overspending until the transaction is settled. The merchant isn't \"\"holding\"\" your money, your bank or card provider is protecting itself from you overdrawing. In general, it takes 1-3 days for a credit transaction to settle. With a credit card, this usually isn't an issue, unless you have a very low credit line or other unusual things going on. With pre-paid and debit cards, it is an issue, since your spending power is contingent upon you having an available balance. I'm a contrarian on this topic, but I don't see any compelling reason to use debit or stored value cards, other than preventing yourself from overspending. I've answered a few other questions in detail in this area, if you're interested.\"" }, { "docid": "421803", "title": "", "text": "If it is a well known company that wants to give you a refund, I would not worry about giving them your credit card number. However, I would never type my credit card number into an e-mail message. E-mail messages are very insecure, and can be read by many people along its way to the destination. They also can be archived in many places, meaning that your number will continue to be posted out there for someone to grab in the future. If you need to give this company your credit card number, do it over the phone. Having said that, ultimately you are not generally responsible for fraudulent charges if your card number is stolen and misused. I've had so many fraudulent charges, despite my being relatively careful with my number, that I don't really worry much anymore about losing my number. I just check my statement for false charges, and when they happen, the bank cancels the charge and issues me a new number. It has happened to either my wife or I maybe 5 times over the last two years." }, { "docid": "284162", "title": "", "text": "\"I've just received my first Credit Card statement from HSBC. All I can say is all the information you need is there. It's really easy to pay off your credit card bill just have to read the instructions! Here are the bank account numbers and steps how to set up a standing order (as it was written in my statement): \"\"Standing Order/ bill payment Pay a fixed amount to your HSBC Bank Credit Card using the following information: Type of Card Card ------------------------ Number Begins ----Account Number MasterCard: HSBC Bank and Welsh --- 543460 ----------------29004734 Visa: HSBC and Welsh ---------------------454638 ----------------09003649 Gold Visa ---------------------------------------494120 ----------------69005161 Remember, if payments are made using the wrong card details, sort code or account number, they may be delayed or not applied.\"\" hope it was helpful\"" } ]

[ { "docid": "350365", "title": "", "text": "\"Uncertainty has very far reaching effects. Oil is up ~100% since February and down ~40% from it's 52 week high (and down even more on a longer timeline). It's not exactly a stable investment vehicle and moves a few percent each day on basically nothing. A lot of securities will be bouncing around for the next couple weeks at least while folks remain uncertain about what the \"\"brexit\"\" will actually mean.\"" } ]

[ { "docid": "248794", "title": "", "text": "Forex is really not that volatile compared to other major asset classes like stocks and commodities. But still markets are generally unencumbered in the major pairs and therefore spikes in volatility can happen. Take what happened with the Swiss Franc a few years ago for example, or GBPUSD recently with news of Brexit. This is less the case with highly regulated currencies like the Chinese Yuan (CNY) Volatility is caused by excessive buy or sell pressure in relation to the available liquidity at the current price. This is usually caused by large buy or sell orders placed with interbank desks by institutions (often including other banks) and central banks. News can also sometimes have a dramatic impact and cause traders to adjust their prices significantly and very quickly." }, { "docid": "24752", "title": "", "text": "Gone are the days when in India, the fuel price was revised on every fortnight. Many times you would have filled up the tank one day before to save few bucks. Now, from 16th June 2017 onwards, Government has decided to revise the daily fuel price at 6 AM according to the international crude oil and dollar prices with respect to rupee value. The notion behind taking this step was just to remove the big leap in fuel rates and also a government initiative to maintain the demand and supply situation in equilibrium." }, { "docid": "102698", "title": "", "text": "\"Anthony Russell - I agree with JohnFx. Petroleum is used in making many things such as asphalt, road oil, plastic, jet fuel, etc. It's also used in some forms of electricity generation, and some electric cars use gasoline as a backup form of energy, petrol is also used in electricity generation outside of cars. Source can be found here. But to answer your question of why shares of electric car companies are not always negatively related to one another deals with supply and demand. If investors feel positively about petroleum and petroleum related prospects, then they are going to buy or attempt to buy shares of \"\"X\"\" petrol company. This will cause the price of \"\"X\"\", petrol company to rise, ceteris paribus. Just because the price of petroleum is high doesn't mean investors are going to buy shares of an electric car company. Petrol prices could be high, but numerous electric car companies could be doing poorly, now, with that being said you could argue that sales of electric cars may go up when petrol prices are high, but there are numerous factors that come into play here. I think it would be a good idea to do some more research if you are planning on investing. Also, remember, after a company goes public they no longer set the price of the shares of their stock. The price of company \"\"X\"\" shares are determined by supply and demand, which is inherently determined by investors attitudes and expectations, ultimately defined by past company performance, expectations of future performance, earnings, etc.. It could be that when the market is doing well - it's a good sign of other macroeconomic variables (employment, GDP, incomes, etc) and all these factors power how often individuals travel, vacation, etc. It also has to deal with the economy of the country producing the oil, when you have OPEC countries selling petrol to the U.S. it is likely much cheaper per barrel than domestic produced and refined petrol because of the labor laws, etc. So a strong economy may be somewhat correlated with oil prices and a strong market, but it's not necessarily the case that strong oil prices drive the economy..I think this is a great research topic that cannot be answered in one post.. Check this article here. From here you can track down what research the Fed of Cleveland has done concerning this. My advice to you is to not believe everything your peers tell you, but to research everything your peers tell you. With just a few clicks you can figure out the legitimacy of many things to at least some degree.\"" }, { "docid": "590444", "title": "", "text": "Petro-autocrats have made a lot of promises about social support and economic growth based on high project ed oil prices. If those promises fall through because of price declines, there is going to be a lot of unrest. Just some figures, Saudi Arabia needs 80$ oil to balance its books but this cost rises to 98$ in 2015 because of promises made during the Arab spring." }, { "docid": "467327", "title": "", "text": "\"[of course it does](http://www.tylervigen.com/correlation_project/correlation_images/per-capita-consumption-of-chicken-us_total-us-crude-oil-imports.png) ... but really, the answer is something along the lines of \"\"probably... to some extent...\"\" It's not the sole reason, but it may be one of them. Ultimately QE did more to fix balance sheets than the wider economy, but that in itself had value at the time.\"" }, { "docid": "13260", "title": "", "text": "Options reflect expectations about the underlying asset, and options are commonly priced using the Black-Scholes model: N(d1) and N(d2) are probability functions, S is the spot (current) price of the asset, K is the strike price, r is the risk free rate, and T-t represents time to maturity. Without getting into the mathematics, it suffices to say that higher volatility or expectation of volatility increases the perceived riskiness of the asset, so call options are priced lower and put options are priced higher. Think about it intuitively. If the stock is more likely to go downwards, then there's an increased chance that the call option expires worthless, so call options must be priced lower to accommodate the relative change in expected value of the option. Puts are priced similarly, but they move inversely with respect to call option prices due to Put-Call parity. So if call option prices are falling, then put option prices are rising (Note, however, that call prices falling does not cause put prices to rise. The inverse relationship exists because of changes in the underlying factors and how pricing works.) So the option action signifies that the market believes the stock is headed lower (in the given time frame). That does not mean it will go lower, and option traders assume risk whenever they take a particular position. Bottom line: gotta do your own homework! Best of luck." }, { "docid": "513249", "title": "", "text": "Inflation refers to the money supply. Think of all money being air in a balloon. Inflation is what happens when you blow more air in the balloon. Deflation is what happens when you let air escape. Inflation may cause prices to go up. However there are many scenarios possible in which this does not happen. For example, at the same time of inflation, there might be unemployment, making consumers unable to pay higher prices. Or some important resource (oil) may go down in price (due to political reasons, war has ended etc), compensating for the money having less value. Similarly, peoples wages will tend to rise over time. They have to, otherwise everyone would be earning less, due to inflation. However again there are many scenarios in which wages do not keep up with inflation, or rise much faster. In fact over the past 40 years or so, US wages have not been able to keep up with inflation, making the average worker 'poorer' than 40 years ago. At its core, inflation refers to the value of the money itself. As all values of other products, services, assets etc are expressed in terms of money which itself also changes value, this can quickly become very complex. Most countries calculate inflation by averaging the price change of a basket of goods that are supposed to represent the average Joe's spending pattern. However these methods are often criticized as they would be 'hiding' inflation. The hidden inflation may come back later to bite us." }, { "docid": "18366", "title": "", "text": "\"This is the best tl;dr I could make, [original](http://www.npr.org/2017/05/24/529852301/boom-time-again-for-u-s-oil-industry-thanks-to-opec) reduced by 79%. (I'm a bot) ***** &gt; Oil producers across the country are watching to see what OPEC does at its meeting in Vienna this week, since the cartel of oil-exporting countries has recently played a big role in turning around a two-year U.S. slump. &gt; There are more than twice as many U.S. rigs drilling for oil as a year ago, a turnaround that&amp;#039;s felt keenly in places like the Bakken oil patch in North Dakota. &gt; In the dizzying boom-bust cycle of the oil industry, things were crazy busy here a few years back, when a barrel of oil was around $100. But that led to a surge in production that flooded the market, pushing the price of oil down. ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/6ejcc3/boom_time_again_for_us_oil_industry_thanks_to_opec/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ \"\"Version 1.65, ~133536 tl;drs so far.\"\") | [Theory](http://np.reddit.com/r/autotldr/comments/31bfht/theory_autotldr_concept/) | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr \"\"PM's and comments are monitored, constructive feedback is welcome.\"\") | *Top* *keywords*: **Oil**^#1 **Dakota**^#2 **price**^#3 **U.S.**^#4 **Job**^#5\"" }, { "docid": "595002", "title": "", "text": "Sure! Anything that affects the balance of supply and demand could cause rent prices to fall. I'll betcha rent prices in Wilmington, Ohio collapsed when the biggest employer, DHL, shut down. An economic depression of any sort would cause people to substitute expensive rentals for cheaper ones, putting downward pressure on rents. It would also cause people to double up or move in with family, decreasing demand for rentals. Anything that makes buying a house cheaper will actually make rents lower, too, because more people will buy houses when houses get cheaper... those people are moving out of rentals, thus decreasing demand for rentals." }, { "docid": "584090", "title": "", "text": "An alternative options strategy to minimize loss of investment capital is to buy a put, near the money around your original buy price, with a premium less than the total dividend. The value of the put will increase if the stock price falls quickly. Likely, a large portion of your dividend will go towards paying the option premium, this will however ensure that your capital doesn't drop much lower than your buy price. Continued dividend distributions will continue to pay to buy future put options. Risks here are if the stock does not have a very large up or down movement from your original buy price causing most of the dividend to be spent on insuring your position. It may take a few cycles, but once the stock has appreciated in value say 10% above buying price, you can consider either skipping the put insurance so you can pocket the dividend, or you can bu ythe put with a higher strike price for additional insurance against a loss of gains. Again, this sacrifices much of the dividend in favor of price loss, and still is open to a risk of neutral price movement over time." }, { "docid": "546091", "title": "", "text": "Agreed, it'll be faster. Let's do a little math. Tesla is trying to hit 500k units in 2018. They want 1m in 2020. If Tesla can do 1m in 2020, how many EVs can *ALL* other western auto manufacturers build in 2020 (GM + Nissan + VW + Daimler + etc)? I'd take a swing at 2-3m. What about Chinese auto manufacturers? Probably 3m more, since EVs are a focus there? So if you count that up, it's 7-8m EVs in 2020, which is 10% of worldwide new car sales. This can all be accomplished in the $35k+ market. This also provides the volume to drive down battery and electronics costs to hit $30k and then $25k price points later in the 2020's. So if we're at 10% by 2020, I'd be shocked if we didn't have 50-75% EVs of new car sales by 2030. 20-50% growth over 10 years adds up quickly. The oil price crash of 2014 was caused by a 2% imbalance between supply and demand. So this predicts crashes in the price of oil and oil company stocks in the early 2020's. There's likely also political unrest in oil producing countries, as their economies start having revenue shortfalls. Given the friendliness of EVs to demand response, I'd think we'd just keep building intermittent renewables. When the wind blows and sun shines, EVs charge (and turn off otherwise) This will increase electricity demand, but put pressure on expensive and dirty coal and natural gas. All of this drives down the cost of electric driving, and CO2 emissions." }, { "docid": "328996", "title": "", "text": "December, 7, 2011 ( 01:50 pm) :- Bullion are sparked at the late or and session of MCX &amp; Comex. USA investors are not worried about the coming events because European leaders signals that IMF providing help for European countries who are facing financial crisis. Crude oil momentum also range bound whole day, a rising tension on the Iran exports resistance will trigger oil prices will at new high. Silver have strong resistance at $ 33.20 above this level it's trend bullish under this its trend totally down. Gold have strong resistance at $ 1742 above this trend totally bullish side &amp; unless its in down trend." }, { "docid": "351293", "title": "", "text": "22 June 2016 would have been the time to do this. Nobody on here can tell you what GBP/EUR will do in the next few months and years now. Brexit is going to happen, which implies lower UK growth and consequently a lower path for GBP interest rates, but this is all already priced in. If you believe the UK economy will underperform current forecasts and/or the euro-area economy will outperform current forecasts, that may imply there's scope for further GBP depreciation. If you believe the probability of a further political shock from a 'no deal' Brexit is materially higher than the market thinks, the same is true. But the opposite of these things could happen also. I would worry less about playing the currency markets as a retail investor and more about what currency your outgoings are denominated in. You live in Spain. Do you have significant GBP expenses or liabilities, or do you expect to have them in the future? If not, why are you taking currency risk by holding GBP balances? Whereas if you do - e.g. if you plan to move (back?) to the UK in the near future - then it makes more sense." }, { "docid": "499344", "title": "", "text": "\"The correlation I heard most about in economics/finance was that stock prices and bond yields were negatively correlated; as the stock market does better, bond yields fall (company's doing well as evidenced by stocks, so it's a good credit risk, so YTM of its bonds on the market goes down). The correlation, if any, between the stock and futures market should be visible in the actual price histories. Index prices may be useful, but what's more likely is that various future prices have correlation with various companies' stocks. Where the future reflects the price of a raw material that is a significant cost of goods sold for a company, you'll see these two move inversely to each other in the short term. I think that if there is a causative relationship here, its that futures prices influence stock prices, not the other way around. The futures market generally represents the cost side of a consumer goods producer's bottom line. The stock market represents its profits. As futures go up, profit expectations go down, putting pressure on stock prices. Industries that deal in services, or in other types of goods, can still be affected because a rise in the cost of something consumers need will cause them to spend less on other things which affects margins in those other areas. So, in the short and medium term, when the futures market goes up the stock market sees a dip, and vice versa. However, companies adapt; they can put upward pressure on prices for their goods to restore their desired margins, usually by slowly increasing them to prevent sticker shock (though elasticity of demand plays a part; the more we need something no matter what it costs, the faster prices can increase). To maintain costs, they can make things cheaper using less expensive materials (more plastic, less steel). They can restructure production processes (translated: move factories offshore, or at least to \"\"right-to-work\"\" states with less union strength) to save costs elsewhere. All of these reduce costs and thus increase profits, but take time to implement. Many of these things reduce direct costs, reducing demand for the commodity and causing the futures prices to go back down. So, over the long term, these differences even out, and it's down to the things that affect the entire market (inflation, consumer/investor confidence, monetary policy).\"" }, { "docid": "400838", "title": "", "text": "\"This is the best tl;dr I could make, [original](https://asia.nikkei.com/Markets/Commodities/China-sees-new-world-order-with-oil-benchmark-backed-by-gold?page=1) reduced by 93%. (I'm a bot) ***** &gt; The contract could become the most important Asia-based crude oil benchmark, given that China is the world&amp;#039;s biggest oil importer. &gt; &amp;quot;It is a mechanism which is likely to appeal to oil producers that prefer to avoid using dollars, and are not ready to accept that being paid in yuan for oil sales to China is a good idea either,&amp;quot; Macleod said. &gt; Yuan oil futures are expected to attract interest from investors and funds, while state-backed oil majors, such as PetroChina and China Petroleum &amp; Chemical will provide liquidity to ensure trade. ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/70lu5h/china_announces_the_backing_of_the_yuan_by_gold/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ \"\"Version 1.65, ~211390 tl;drs so far.\"\") | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr \"\"PM's and comments are monitored, constructive feedback is welcome.\"\") | *Top* *keywords*: **oil**^#1 **China**^#2 **Saudi**^#3 **yuan**^#4 **gold**^#5\"" }, { "docid": "305578", "title": "", "text": "\"As someone that works in and with the ag and commodity markets, my understanding, is limited but I hope it helps. Aside from needing an infrastructure built to maintain the vast amounts of data, communication, pricing, banking information, having a closing time for our markets helps to ensure value and fair trade. Capitalism is centralized around creating a fair value for ventures to sell, where prospective buyers opt to purchase or invest. For example, where I attended university, there were many coffee shops close to campus, but only one stayed open all night, and as such had operational cost much higher than other shops, forcing them to charge more for a cup of coffee. While this example is crude, the idea is the same. By maintaining\"\"bank\"\" hours, product or strategies and developments meant to increase projected value are allowed to occur. I imagine that if the markets did not close, my coffee prices would skyrocket for an increased demand, that of which the supply chsin, and farmers, would struggle to meet. The same would be said of grain, salt, oils, etcetera.\"" }, { "docid": "401818", "title": "", "text": "There are many things that can make a company's share price go up or down. Generally, over the long term, the more consistently profitable a company is the more its share price will go up. However, there are times when a company may not be making any profits yet but its share price still goes up. This can be due to forecasts that the company will start making profits in the near future. Sometimes a company may report increased profits from the previous year but makes less than what the market was expecting it to make. This can cause its share price to fall, as the market is disappointed in the results. In the shorter term greed, fear and speculation can make a company's share price move irrationally. When you think the share price should be going up it suddenly falls, and Vis-versa. When interest rates are low, companies with higher dividend yields (compared to bank account interest rates) become high in demand and their shares generally go up in price. As the share price goes up the dividend yield will be reduced unless the company continues to increase the dividend it distributes to shareholders. When interest rates start to rise these companies become less favourable as they are seen as higher risk comparable to similar returns from having one's money in the safety of the bank. This can cause the share prices to fall. These are just some of the reasons that make a company's share price move up or down. As humans are an irrational bunch often ruled by emotions, sometimes the reasons share prices move in a particular direction can be quite confusing, but that is the nature of the financial markets." }, { "docid": "19606", "title": "", "text": "From an investor's standpoint, if the value of crude oil increases, economies that are oil dependent become more favourable (oil companies will be more profitable). Therefore, investors will find that country's currency more attractive in the foreign exchange market." }, { "docid": "61384", "title": "", "text": "a) Contracts are for future delivery of said underlying. So if you are trading CL (crude oil) futures and don't sell before delivery date, you will be contacted about where you want the oil to be delivered (a warehouse presumably). 1 contract is the equivalent of 1000 barrels. b) 600 contracts depends entirely on what you are trading and how you are trading. If you are trading ES (S&P 500 e-Mini), you can do the 600 contracts in less than a second. c) No fees does not make particular sense. It's entirely possible that you are not trading anything, it's just a fake platform so they can judge your performance. d) The catch typically is that when it's time to pay you, they will avoid you or worst case, disappear. e) Trading is a full-time job, especially for the first 4-5 years when you're only learning the basics. Remember, in futures trading you are trading against all the other professionals who do only this 24/7 for decades. If you are only risking your time with the reward being learning and possibly money, it seems like a good deal. There's typically a catch with these things - like you would have to pay for your data which is very expensive or withdrawing funds is possible only months later." } ]

[ { "docid": "275199", "title": "", "text": "I think George's answer explains fairly well why the brokerages don't allow this - it's not an exchange rule, it's just that the brokerage has to have the shares to lend, and normally those shares come from people's margin, which is impossible on a non-marginable stock. To address the question of what the alternatives are, on popular stocks like SIRI, a deep In-The-Money put is a fairly accurate emulation of an actual short interest. If you look at the options on SIRI you will see that a $3 (or higher) put has a delta of -$1, which is the same delta as an actual short share. You also don't have to worry about problems like margin calls when buying options. The only thing you have to worry about is the expiration date, which isn't generally a major issue if you're buying in-the-money options... unless you're very wrong about the direction of the stock, in which case you could lose everything, but that's always a risk with penny stocks no matter how you trade them. At least with a put option, the maximum amount you can lose is whatever you spent on the contract. With a short sale, a bull rush on the stock could potentially wipe out your entire margin. That's why, when betting on downward motion in a microcap or penny stock, I actually prefer to use options. Just be aware that option contracts can generally only move in increments of $0.05, and that your brokerage will probably impose a bid-ask spread of up to $0.10, so the share price has to move down at least 10 cents (or 10% on a roughly $1 stock like SIRI) for you to just break even; definitely don't attempt to use this as a day-trading tool and go for longer expirations if you can." } ]

[ { "docid": "114092", "title": "", "text": "I would also be getting out of the stock market if I noticed prices starting to fall and a crash possibly on the way. There are some good and quite simple techniques I would use to time the markets over the medium to long term. I have described some of them in the answer to this question of mine: What are some simple techniques used for Timing the Stock Market over the long term? You could use similar techniques in your investing. And in regards to back-testing DCA to Timing The Markets, I have done that too in my answer to the following question: Investing in low cost index fund — does the timing matter? Timing the Markets wins hand down. In regards to back-testing and the concerns Kent Anderson has brought up, when I back-test a trading strategy, if that strategy is successful, I then forward test it over a year or two to confirm the results. As with back-testing you can sometimes curve fit your criteria too much. By forward testing you are confirming that the strategy is robust over different market conditions. One strategy you can take when the market does start to fall is short selling, as mentioned by some already. I am now short selling using CFDs over the short to medium term as one of my more aggressive strategies. I have a longer term strategy where I do not short, but tighten my stop losses when the market starts to tank. Sometimes my positions will keep going up even though the market as a whole is heading down, and I can make an extra 5% to 10% on these positions before I get taken out. The rare position even continues going up during the whole downturn and when the market starts to recover. So I let the market decide when I get out and when I stay in, I leave my emotions out of it. The best thing you can do is have a written trading plan with all your criteria for getting into the market, your criteria for getting out of the market and your position sizing and risk management incorporated in the plan." }, { "docid": "388362", "title": "", "text": "\"The other two answers seem basically correct, but I wanted to add on thing: While you can exercise an \"\"American style\"\" option at any time, it's almost never smart to do so before expiration. In your example, when the underlying stock reaches $110, you can theoretically make $2/share by exercising your option (buying 100 shares @ $108/share) and immediately selling those 100 shares back to the market at $110/share. This is all before commission. In more detail, you'll have these practical issues: You are going to have to pay commissions, which means you'll need a bigger spread to make this worthwhile. You and those who have already answered have you finger on this part, but I include it for completeness. (Even at expiration, if the difference between the last close price and the strike price is pretty close, some \"\"in-the-money\"\" options will be allowed to expire unexercised when the holders can't cover the closing commission costs.) The market value of the option contract itself should also go up as the price of the underlying stock goes up. Unless it's very close to expiration, the option contract should have some \"\"time value\"\" in its market price, so, if you want to close your position at this point, earlier then expiration, it will probably be better for you to sell the contract back to the market (for more money and only one commission) than to exercise and then close the stock position (for less money and two commissions). If you want to exercise and then flip the stock back as your exit strategy, you need to be aware of the settlement times. You probably are not going to instantly have those 100 shares of stock credited to your account, so you may not be able to sell them right away, which could leave you subject to some risk of the price changing. Alternatively, you could sell the stock short to lock in the price, but you'll have to be sure that your brokerage account is set up to allow that and understand how to do this.\"" }, { "docid": "45190", "title": "", "text": "\"A mutual fund could make two different kinds of distributions to you: Capital gains: When the fund liquidates positions that it holds, it may realize a gain if it sells the assets for a greater price than the fund purchased them for. As an example, for an index fund, assets may get liquidated if the underlying index changes in composition, thus requiring the manager to sell some stocks and purchase others. Mutual funds are required to distribute most of their income that they generate in this way back to its shareholders; many often do this near the end of the calendar year. When you receive the distribution, the gains will be categorized as either short-term (the asset was held for less than one year) or long-term (vice versa). Based upon the holding period, the gain is taxed differently. Currently in the United States, long-term capital gains are only taxed at 15%, regardless of your income tax bracket (you only pay the capital gains tax, not the income tax). Short-term capital gains are treated as ordinary income, so you will pay your (probably higher) tax rate on any cash that you are given by your mutual fund. You may also be subject to capital gains taxes when you decide to sell your holdings in the fund. Any profit that you made based on the difference between your purchase and sale price is treated as a capital gain. Based upon the period of time that you held the mutual fund shares, it is categorized as a short- or long-term gain and is taxed accordingly in the tax year that you sell the shares. Dividends: Many companies pay dividends to their stockholders as a way of returning a portion of their profits to their collective owners. When you invest in a mutual fund that owns dividend-paying stocks, the fund is the \"\"owner\"\" that receives the dividend payments. As with capital gains, mutual funds will redistribute these dividends to you periodically, often quarterly or annually. The main difference with dividends is that they are always taxed as ordinary income, no matter how long you (or the fund) have held the asset. I'm not aware of Texas state tax laws, so I can't comment on your other question.\"" }, { "docid": "263321", "title": "", "text": "\"which means the current total is $548,100. Is that correct? Yep Unfortunately the \"\"current\"\" GM stock is different than the GM stock of 1989. GM went bankrupt in 2011. It's original stock changed to Motors Liquidation Company (MTLQQ) and is essentially worthless today. There was no conversion from the old stock to the new stock. What do I do with these certificates? Can I bring them to my bank, or do I need to open an account with a stock company like Fidelity? See here for some instructions on cashing them in (or at least registering them electronically). I've never dealt with physical stocks, but I presume that a broker is going to charge you something for registering them vs. direct registration, though I have no idea how much that would be. I read somewhere that I only have to pay taxes when I cash out these stocks. But are these rules any different because I inherited the stocks? You will pay capital gains tax on the increase in value from the time your father died to the time you sell the shares. If that time is more than one year (and the stock has gone up in value) you will pay a 15% tax on the total increase. If you have held them less than one year, they will be short-term capital gains which will count as regular income, and you will pay whatever your marginal tax rate is. If you sell the stock at a loss, then you'll be able to deduct some or all of that loss from your income, and may be able to carry forward losses for a few years as well. I did not catch that the stock you mention was GM stock. GM went bankrupt in 2011, so it's likely that the stock you own is worthless. I have edited the first answer appropriately but left the other two since they apply more generally. In your case the best you get is a tax deduction for the loss in value from the date your father died.\"" }, { "docid": "239998", "title": "", "text": "Owning a stock via a fund and selling it short simultaneously should have the same net financial effect as not owning the stock. This should work both for your personal finances as well as the impact of (not) owning the shares has on the stock's price. To use an extreme example, suppose there are 4 million outstanding shares of Evil Oil Company. Suppose a group of concerned index fund investors owns 25% of the stock and sells short the same amount. They've borrowed someone else's 25% of the company and sold it to a third party. It should have the same effect as selling their own shares of the company, which they can't otherwise do. Now when 25% of the company's stock becomes available for purchase at market price, what happens to the stock? It falls, of course. Regarding how it affects your own finances, suppose the stock price rises and the investors have to return the shares to the lender. They buy 1 million shares at market price, pushing the stock price up, give them back, and then sell another million shares short, subsequently pushing the stock price back down. If enough people do this to effect the share price of a stock or asset class, the managers at the companies might be forced into behaving in a way that satisfies the investors. In your case, perhaps the company could issue a press release and fire the employee that tried to extort money from your wife's estate in order to win your investment business back. Okay, well maybe that's a stretch." }, { "docid": "39265", "title": "", "text": "In addition to the higher risk as pointed out by @JamesRoth, you also need to consider that there are regulations against 'naked shorting' so you generally need to either own the security, or have someone that is willing to 'loan' the security to you in order to sell short. If you own a stock you are shorting, the IRS could view the transaction as a Sell followed by a buy taking place in a less than 30 day period and you could be subject to wash-sale rules. This added complexity (most often the finding of someone to loan you the security you are shorting) is another reason such trades are considered more advanced. You should also be aware that there are currently a number of proposals to re-instate the 'uptick rule' or some circuit-breaker variant. Designed to prevent short-sellers from driving down the price of a stock (and conducting 'bear raids etc) the first requires that a stock trade at the same or higher price as prior trades before you can submit a short. In the latter shorting would be prohibited after a stock price had fallen a given percentage in a given amount of time. In either case, should such a rule be (re)established then you could face limitations attempting to execute a short which you would not need to worry about doing simple buys or sells. As to vehicles that would do this kind of thing (if you are convinced we are in a bear market and willing to take the risk) there are a number of ETF's classified as 'Inverse Exchange Traded Funds (ETF's) for a variety of markets that via various means seek to deliver a return similar to that of 'shorting the market' in question. One such example for a common broad market is ticker SH the ProShares Short S&P500 ETF, which seeks to deliver a return that is the inverse of the S&P500 (and as would be predicted based on the roughly +15% performance of the S&P500 over the last 12 months, SH is down roughly -15% over the same period). The Wikipedia article on inverse ETF's lists a number of other such funds covering various markets. I think it should be noted that using such a vehicle is a pretty 'aggressive bet' to take in reaction to the belief that a bear market is imminent. A more conservative approach would be to simply take money out of the market and place it in something like CD's or Treasury instruments. In that case, you preserve your capital, regardless of what happens in the market. Using an inverse ETF OTOH means that if the market went bull instead of bear, you would lose money instead of merely holding your position." }, { "docid": "330041", "title": "", "text": "\"First, you are not exactly \"\"giving\"\" the brokerage $2000. That money is the margin requirement to protect them in the case the stock price rises. If you short 200 shares as in your example and they are holding $6000 from you then they are protected in the event of the stock price increasing to $30/share. Sometime before it gets there the brokerage will require you to deposit more money or they will cover your position by repurchasing the shares for your account. The way you make money on the short sale is if the stock price declines. It is a buy low sell high idea but in reverse. If you believe that prices are going to drop then you could sell now when it is high and buy back later when it is lower. In your example, you are selling 200 shares at $20 and later, buying those at $19. Thus, your profit is $200, not counting any interest or fees you have paid. It's a bit confusing because you are selling something you'll buy in the future. Selling short is usually considered quite risky as your gain is limited to the amount that you sold at initially (if I sell at $20/share the most I can make is if the stock declines to $0). Your potential to lose is unlimited in theory. There is no limit to how high the stock could go in theory so I could end up buying it back at an infinitely high price. Neither of these extremes are likely but they do show the limits of your potential gain and loss. I used $20/share for simplicity assuming you are shorting with a market order vs a limit order. If you are shorting it would be better for you to sell at 20 instead of 19 anyway. If someone says I would like to give you $20 for that item you are selling you aren't likely to tell them \"\"no, I'd really only like $19 for it\"\"\"" }, { "docid": "537916", "title": "", "text": "\"Do I have to pay the stock investment income tax if I bought some stocks in 2016, it made some profits but I didn't sell them at the end of 2016? You pay capital gains taxes only when you sell the stocks. When you sell the stock within a year you will pay the short term capital gains rate which is the same rate as your ordinary income. If the stock pays dividends, however, you will have to pay taxes in the year that the dividend was paid out to you. I bought some stocks in 2011, sold them in 2012 and made some gains. Which year of do I pay the tax for the gains I made? You would pay in 2012, likely at the short term gain rate. I bought some stocks, sold them and made some gains, then use the money plus the gains to buy some other stocks before the end of the same year. Do I have to pay the tax for the gains I made in that year? Yes. There is a specific exception called the \"\"Wash Sale Rule\"\", but that would only apply if you lost money on the original sale and bought a substantially similar or same stock within 30 days. Do I get taxed more for the money I made from buying and selling stocks, even if the gains is only in hundreds? More than what? You pay taxes based on the profit you make from the investment. If you held it less than a year it is the same tax rate as your regular income. If you held it longer you pay a lower tax rate which is usually lower than your regular tax rate.\"" }, { "docid": "326599", "title": "", "text": "Gold's valuation is so stratospheric right now that I wonder if negative numbers (as in, you should short it) are acceptable in the short run. In the long run I'd say the answer is zero. The problem with gold is that its only major fundamental value is for making jewelry and the vast majority is just being hoarded in ways that can only be justified by the Greater Fool Theory. In the long run gold shouldn't return more than inflation because a pile of gold creates no new wealth like the capital that stocks are a claim on and doesn't allow others to create new wealth like money lent via bonds. It's also not an important and increasingly scarce resource for wealth creation in the global economy like oil and other more useful commodities are. I've halfway-thought about taking a short position in gold, though I haven't taken any position, short or long, in gold for the following reasons: Straight up short-selling of a gold ETF is too risky for me, given its potential for unlimited losses. Some other short strategy like an inverse ETF or put options is also risky, though less so, and ties up a lot of capital. While I strongly believe such an investment would be profitable, I think the things that will likely rise when the flight-to-safety is over and gold comes back to Earth (mainly stocks, especially in the more beaten-down sectors of the economy) will be equally profitable with less risk than taking one of these positions in gold." }, { "docid": "461062", "title": "", "text": "\"For the same reason that people bet on different teams. Some think the Tigers will win, others thing the Yankees will win. They wager $5 on it. One of them wins, the other loses. In a short, one person bets that the stock goes down, the other bets that the stock goes up (or hold). You're basically saying \"\"I think this stock is going to hold it's value or go up. If I thought it would go down, like you do, I would sell it myself right now. Instead, I'll let you have it for a while because when I get it back I think I'll come out on top.\"\"\"" }, { "docid": "218904", "title": "", "text": "Yes, 6% is a waste of money, because some other brokers such as IB offer margin rates below 2%. Also, to borrow money for even less than any broker's margin interest rate, one can do an EFP transaction. This involves simultaneously shorting a stock and buying the SSF for the same stock. When the futures contract expires, you take delivery of the underlying stock to automatically close out your short position. Until then, you've effectively borrowed cash for the cost of borrowing the stock, which is typically less than 0.5% interest for widely traded ones. You also pay for the slight difference in price between the stock and the future, which is typically equivalent to another 0.5% interest or less. The total often comes to less than 1% interest. The only risk with this transaction is that the stock could become hard to borrow at some point, so then you would have to pay higher interest on it temporarily or maybe even have to close out your short early. But it is extremely rare for large, high-volume stocks to become hard-to-borrow. The borrowing cost of SPY has spiked above 5% on only a handful of days in the last decade." }, { "docid": "281644", "title": "", "text": "\"Put Options for Kids: You have a big box of candy bars. You saved up your allowance to get a lot of them, so you could have one whenever you want one. But, you just saw a commercial on TV for a new toy coming out in one month. Your allowance alone won't buy it, and you want that toy more than you want the candy. So, you decide that you'll sell the candy to your friends at school to buy the toy. Now, you have a choice. You can sell the candy now, and put the money in your piggy bank to buy the toy later. Or, you can save the candy, and sell it in a month when you actually need the money to buy the toy. You know that if you sell all the candy you have today, you can get 50 cents a bar. That's not quite enough to buy the toy, but your allowance will cover the rest. What you don't know is how much you might be able to sell the candy for in a month. You might be able to get 75 cents a bar. If you did, you could pay for the toy with just the money from the candy and even have some left over. But, you might only be able to sell them for 25 cents each, and you wouldn't have enough to buy the toy even with your allowance. You'd like to wait and see if you could get 75 cents each, but you don't want to risk getting only 25 cents each. So, you go to your father. He and his co-workers like these candy bars too, so he'd be willing to buy them all and sell them to his friends the way you're planning to do with yours. You ask for the option to sell him all the candy bars for 50 cents each in one month. If you find out you can get more for them at school, you want to be able to take that deal, but if you can't sell them for 50 cents at school, you'll sell them to your dad. Now, your dad knows that he could have the same problem selling the candy at 50 cents or more that you are afraid of. So, he offers a compromise. If you pay him $5 now, he'll agree to the deal. You figure that even without that $5, between your allowance and the candy money, you can still buy the toy. So, you take the deal. In one month, you can offer the candy at school. If nobody will pay 50 cents, you can sell the candy to your dad when you get home, but if the kids at school will pay 50 cents or more, you can sell it all at school. Either way, you have enough money to buy the toy, and you can also choose which price to accept, but you had to pay your dad $5, and you can't get that back, so if it turns out that you can sell the candy at school for 50 cents, same as today, then because you paid the $5 you don't end up with as much as if you'd simply waited. In the financial market, this type of option is a \"\"put option\"\". Someone who owns something that's traded on the market, like a stock, can arrange to sell that stock to someone else at an agreed-on price, and the seller can additionally pay some money to the buyer up front for the option to not sell at that price. Now, if the stock market goes up, the seller lets the contract expire and sells his stock on the open market. If it goes down, he can exercise the option, and sell at the agreed-upon price to the buyer. If, however, the stock stays about the same, whether he chooses to sell or not, the money the seller paid for the option means he ends up with less than he would have if he hadn't bought the option. Call Options for Kids: Let's say that you see another ad on TV for another toy that you like, that was just released. You check the suggested retail price on the company's web site, and you see that if you save your allowance for the next month, you can buy it. But, in school the next day, everybody's talking about this toy, saying how they want one. Some already have enough money, others are saving up and will be able to get it before you can. You're afraid that because everyone else wants one, it'll drive up the price for them at the local store, so that your month's allowance will no longer buy the toy. So, you go to your dad again. You want to be able to use your allowance money for the next month to buy the new toy. You're willing to wait until you actually have the money saved up before you get the toy, but you need that toy in a month. So, you want your dad to buy one for you, and hold it until you can save up to buy it from him. But, you still want it both ways; if the price goes down in a month because the toy's not so new anymore and people don't want it, you don't want to spend your entire month's allowance buying the one from your dad; you just want to go to the store and buy one at the lower price. You'll pay him $5 for the trouble, right now, whether you buy the toy he got you or not. Your dad doesn't want to have a toy he's not using sitting around for a month, especially if you might not end up buying it from him, so he offers a different deal; In one month, if you still want it, he'll stop by the store on his way home and pick up the toy. You'll then reimburse him from the allowance you saved up; if it ends up costing less than a month's allowance, so be it, but if it costs more than that, you won't have to pay any more. This will only cost you $3, because it's easier for him. But, because he's not buying it now, there is a small chance that the item will be out of stock when he goes to buy it, and you'll have to wait until it's back in stock. You agree, on the condition that if you have to wait longer than a month for your toy, because he couldn't get one to sell you, he pays you back your $3 and knocks another $5 off the cost to buy the toy from him. The basic deal to buy something at an agreed price, with the option not to do so, is known as a \"\"call option\"\". Someone who wishes to buy some stocks, bonds or commodities at a future date can arrange a deal with someone who has what they want to buy them at a specific price. The buyer can then pay the seller for the option to not buy. The counter-offer Dad made, where he will buy the toy from the store at whatever price he can find it, then sell it to you for the agreed price, is known as a \"\"naked call\"\" in finance. It simply means that the seller, who is in this case offering the option to the buyer, doesn't actually have what they are agreeing to sell at the future date, and would have to buy it on the open market in order to turn around and sell it. This is typically done when the seller is confident that the price will go down, or won't go up by much, between now and the date of the contract. In those cases, either the buyer won't exercise the option and will just buy what they want on the open market, or they'll exercise the option, but the difference between what the seller is paying to buy the commodity on the market and what he's getting by selling it on contract is within the price he received for the option itself. If, however, the price of an item skyrockets, the seller now has to take a significant, real loss of money by buying something and then selling it for far less than he paid. If the item flat-out isn't available, the buyer is usually entitled to penalties for the seller's failure to deliver. If this is all understood by both parties, it can be thought of as a form of insurance.\"" }, { "docid": "58009", "title": "", "text": "\"Stock price is determined by the buyers and sellers, correct? Correct! \"\"Everything is worth what its purchaser will pay for it\"\"-Publius Syrus What causes people to buy or sell? Is it news? earnings? stock analysis and techniques? All of these things influence investors' perception of how much a stock is worth. If AMZN makes a lot of money one quarter, then the price might go up. But maybe public perception of AMZN changes because of a large scandal. This could cause the share price to decline even with the favorable earnings report. Why do these 'good' or 'bad' news make people want to buy/sell a stock? People invest to make money. If it looks like a company is going to take a turn for the worst, people will sell. If it looks like the company has a bright, cash-laden future in front of them, people will buy. News is one of the many factors people use to determine how well a company will do. Theoretically could a bunch of people short AMZN and drive down the price regardless of how well it is doing? Say investors wanted to boycott AMZN in order to drive down the cost and get some cheap shares. This is pretty silly, but say for the sake of the argument that everyone who owned AMZN decided to sell their shares and no other investor was willing to buy the shares for less than $0.01, then AMZN shares would be \"\"worth\"\" $0.01 in that aspect. That is extremely unlikely to happen, though, for two reasons:\"" }, { "docid": "219762", "title": "", "text": "In the US, it is perfectly legal to execute what you've described. However, since you seem to be bullish on the stock, why sell? How do you KNOW the price will continue downwards? Aside from the philosophical reasoning, there can be significant downside to selling shares when you're expecting to repurchase them in the near future, i.e. you will lose your cost basis date which determines whether or not your trade is short-term (less than 1 year) or long-term. This cost basis term will begin anew once you repurchase the shares. IF you are trying to tax harvest and match against some short-term gains, tax loss harvesting prior to long-term treatment may be suitable. Otherwise, reexamine your reasoning and reconsider the sale at all, since you are bullish. Remember: if you could pick where stock prices are headed in the short term with any degree of certainty you are literally one of a kind on this planet ;-). In addition, do remember that in a tax deferred account (e.g. IRA) the term of your trade is typically meaningless but your philosophical reasoning for selling should still be examined." }, { "docid": "1203", "title": "", "text": "When you want to short a stock, you are trying to sell shares (that you are borrowing from your broker), therefore you need buyers for the shares you are selling. The ask prices represent people who are trying to sell shares, and the bid prices represent people who are trying to buy shares. Using your example, you could put in a limit order to short (sell) 1000 shares at $3.01, meaning that your order would become the ask price at $3.01. There is an ask price ahead of you for 500 shares at $3.00. So people would have to buy those 500 shares at $3.00 before anyone could buy your 1000 shares at $3.01. But it's possible that your order to sell 1000 shares at $3.01 never gets filled, if the buyers don't buy all the shares ahead of you. The price could drop to $1.00 without hitting $3.01 and you will have missed out on the trade. If you really wanted to short 1000 shares, you could use a market order. Let's say there's a bid for 750 shares at $2.50, and another bid for 250 shares at $2.49. If you entered a market order to sell 1000 shares, your order would get filled at the best bid prices, so first you would sell 750 shares at $2.50 and then you would sell 250 shares at $2.49. I was just using your example to explain things. In reality there won't be such a wide spread between the bid and ask prices. A stock might have a bid price of $10.50 and an ask price of $10.51, so there would only be a 1 cent difference between putting in a limit order to sell 1000 shares at $10.51 and just using a market order to sell 1000 shares and getting them filled at $10.50. Also, your example probably wouldn't work in real life, because brokers typically don't allow people to short stocks that are trading under $5 per share. As for your question about how often you are unable to make a short sale, it can sometimes happen with stocks that are heavily shorted and your broker may not be able to find any more shares to borrow. Also remember that you can only short stocks with a margin account, you cannot short stocks with a cash account." }, { "docid": "192900", "title": "", "text": "This is the bird's eye view of how shorting works: When you place an order to sell a stock short, your broker attempts to grab the desired number of shares from any accounts of its other customers and makes them available for you to sell. If no other customers own shares of this stock, then generally you are out of luck (It is more complicated like that in practice, but this is just an overview). Your odds are better if the particular stock has a large float (i.e. a large number of shares that are actually available for trading) and its short ratio is low (which means relatively few shares are currently being sold short). Also, a large brokerage may be more likely to have access to the shares than a small niche-market broker. The example you've given, Angie's List (ANGI) is a $600M small-cap with a comparatively low float, and though I haven't been able to glean the short ratio, it appears that a lot of investors are bearish on this stock and probably already had the same idea to short it. There is really no way to find out if a specific broker has shares in inventory available for shorting, short of (forgive the pun) checking directly with the broker." }, { "docid": "104789", "title": "", "text": "\"So, the term \"\"ready market\"\" simply means that a market exists in which there are legitimate buy/sell offers, meaning there are investors willing to own or trade in the security. A \"\"spot market\"\" means that the security/commodity is being delivered immediately, rather at some predetermined date in the future (hence the term \"\"futures market\"\"). So if you buy oil on the spot market, you'd better be prepared to take immediate delivery, where as when you buy a futures contract, the transaction doesn't happen until some later date. The advantage for futures contract sellers is the ability to lock in the price of what they're selling as a hedge against the possibility of a price drop between now and when they can/will deliver the commodity. In other words, a farmer can pre-sell his grain at a set price for some future delivery date so he can know what he's going to get regardless of the price of grain at the time he delivers it. The downside to the farmer is that if grain prices rise higher than what he sold them for as futures contracts then he loses that additional money. That's the advantage to the buyer, who expects the price to rise so he can resell what he bought from the farmer at a profit. When you trade on margin, you're basically borrowing the money to make a trade, whether you're trading long (buying) or short (selling) on a security. It isn't uncommon for traders to pledge securities they already own as collateral for a margin account, and if they are unable to cover a margin call then those securities can be liquidated or confiscated to satisfy the debt. There still may even be a balance due after such a liquidation if the pledged securities don't cover the margin call. Most of the time you pay a fee (or interest rate) on whatever you borrow on margin, just like taking out a bank loan, so if you're going to trade on margin, you have to include those costs in your calculations as to what you need to earn from your investment to make a profit. When I short trade, I'm selling something I don't own in the expectation I can buy it back later at a lower price and keep the difference. For instance, if I think Apple shares are going to take a steep drop at some point soon, I can short them. So imagine I short-sell 1000 shares of AAPL at the current price of $112. That means my brokerage account is credited with the proceeds of the sale ($112,000), and I now owe my broker 1000 shares of AAPL stock. If the stock drops to $100 and I \"\"cover my short\"\" (buy the shares back to repay the 1000 I borrowed) then I pay $100,000 for them and give them to my broker. I keep the difference ($12,000) between what I sold them for and what I paid to buy them back, minus any brokerage fees and fees the broker may charge me for short-selling. In conclusion, a margin trade is using someone else's money to make a trade, whether it's to buy more or to sell short. A short trade is selling shares I don't even own because I think I can make money in the process. I hope this helps.\"" }, { "docid": "539680", "title": "", "text": "\"There is no rule-of-thumb that fits every person and every situation. However, the reasons why this advice is generally applicable to most people are simple. Why it is good to be more aggressive when you are young The stock market has historically gone up, on average, over the long term. However, on its way up, it has ups and downs. If you won't need your investment returns for many years to come, you can afford to put a large portion of your investment into the volatile stock market, because you have plenty of time for the market to recover from temporary downturns. Why it is good to be more conservative when you are older Over a short-term period, there is no certainty that the stock market will go up. When you are in retirement, most people withdraw/sell their investments for income. (And once you reach a certain age, you are required to withdraw some of your retirement savings.) If the market is in a temporary downturn, you would be forced to \"\"sell low,\"\" losing a significant portion of your investment. Exceptions Of course, there are exceptions to these guidelines. If you are a young person who can't help but watch your investments closely and gets depressed when seeing the value go down during a market downturn, perhaps you should move some of your investment out of stocks. It will cost you money in the long term, but may help you sleep at night. If you are retired, but have more saved than you could possibly need, you can afford to risk more in the stock market. On average, you'll come out ahead, and if a downturn happens when you need to sell, it won't affect your overall situation much.\"" }, { "docid": "10591", "title": "", "text": "\"Indexes are down during the summer time, and I don't think it has something to do with specific stocks. If you look at the index history you'll see that there's a price drop during the summer time. Google \"\"Sell in May and go away\"\". The BP was cheap at the time for a very particular reason. As another example of a similar speculation you can look at Citibank, which was less than $1 at its lowest, and within less than a year went to over $4 ( more than 400%). But, when it was less than $1 - it was very likely for C to go bankrupt, and it required a certain amount of willingness to loose to invest in it. Looking back, as with BP, it paid off well. But - that is looking back. So to address your question - there's no place where people tell you what will go up, because people who know (or think they know) will invest themselves, or buy lottery tickets. There's research, analysts, and \"\"frinds' suggestions\"\" which sometimes pay off (as in your example with BP), and sometimes don't. How much of it is noise - I personally don't think I can tell, until I can look back and say \"\"Damn, that dude was right about shorts on Google, it did go down 90% in 2012!\"\"\"" } ]

[ { "docid": "258077", "title": "", "text": "A bit of poking around brought me to this thread on the Motley Fool, asking the same basic question: I think the problem is the stock price. For a stock to be sold short, it has to be marginable which means it has to trade over $ 5.00. The broker, therefore, can't borrow the stock for you to sell short because it isn't held in their clients' margin accounts. My guess is that Etrade, along with other brokers, simply exclude these stocks for short selling. Ivestopedia has an explanation of non-marginable securities. Specific to stocks under $5: Other securities, such as stocks with share prices under $5 or with extremely high betas, may be excluded at the discretion of the broker itself." } ]

[ { "docid": "137073", "title": "", "text": "Trying to make money on something going down is inherently more complicated, risky and speculative than making money on it going up. Selling short allows for unlimited losses. Put options expire and have to be rebought if you want to keep playing that game. If you are that confident that the European market will completely crash (I'm not, but then again, I tend to be fairly contrarian) I'd recommend just sitting it out in cash (possibly something other than the Euro) and waiting until it gets so ridiculously cheap due to panic selling that it defies all common sense. For example, when companies that aren't completely falling apart are selling for less than book value and/or less than five times prior peak earnings that's a good sign. Another indicator is when you hear absolutely nothing other than doom-and-gloom and people swearing they'll never buy another stock as long as they live. Then buy at these depressed prices and when all the panic sellers realize that the world didn't end, it will go back up." }, { "docid": "428786", "title": "", "text": "How so? If i sell short, then i make a profit only if the price goes down so i can buy back at a lower price. Yes, but if the price is going up then you would go long instead. Shorting a stock (or any other asset) allows you to profit when the price is going down. Going long allows you to profit when the price is going up. In the opposite cases, you lose money. In order to make a profit in either of those situations, you have to accurately assess which way the price will trade over the period of time you are dealing with. If you make the wrong judgment, then you lose money because you'll either sell for a lower price than you bought (if you went long), or have to buy back at a higher price than you sold for (if you went short). In either case, unless the trader can live with making a short-term loss and recouperating it later, one needs a good stop-loss strategy." }, { "docid": "226197", "title": "", "text": "\"The answer is partly and sometimes, but you cannot know when or how. Most clearly, you do not take somebody else's money if you buy shares in a start-up company. You are putting your money at risk in exchange for a share in the rewards. Later, if the company thrives, you can sell your shares for whatever somebody else will pay for your current share in the thriving company's earnings. Or, you lose your money, when the company fails. (Much of it has then ended up in the company's employees' pockets, much of the rest with the government as taxes that the company paid). If the stockmarket did not exist, people would be far less willing to put their money into a new company, because selling shares would be far harder. This in turn would mean that fewer new things were tried out, and less progress would be made. Communists insist that central state planning would make better decisions than random people linked by a market. I suggest that the historical record proves otherwise. Historically, limited liability companies came first, then dividing them up into larger numbers of \"\"bearer\"\" shares, and finally creating markets where such shares were traded. On the other hand if you trade in the short or medium term, you are betting that your opinion that XYZ shares are undervalued against other investors who think otherwise. But there again, you may be buying from a person who has some other reason for selling. Maybe he just needs some cash for a new car or his child's marriage, and will buy back into XYZ once he has earned some more money. You can't tell who you are buying from, and the seller can only tell if his decision to sell was good with the benefit of a good few years of hindsight. I bought shares hand over fist immediately after the Brexit vote. I was putting my money where my vote went, and I've now made a decent profit. I don't feel that I harmed the people who sold out in expectation of the UK economy cratering. They got the peace of mind of cash (which they might then reinvest in Euro stocks or gold or whatever). Time will tell whether my selling out of these purchases more recently was a good decision (short term, not my best, but a profit is a profit ...) I never trade using borrowed money and I'm not sure whether city institutions should be allowed to do so (or more reasonably, to what extent this should be allowed). In a certain size and shortness of holding time, they cease to contribute to an orderly market and become a destabilizing force. This showed up in the financial crisis when certain banks were \"\"too big to fail\"\" and had to be bailed out at the taxpayer's expense. \"\"Heads we win, tails you lose\"\", rather than trading with us small guys as equals! Likewise it's hard to see any justification for high-frequency trading, where stocks are held for mere milliseconds, and the speed of light between the trader's and the market's computers is significant.\"" }, { "docid": "192900", "title": "", "text": "This is the bird's eye view of how shorting works: When you place an order to sell a stock short, your broker attempts to grab the desired number of shares from any accounts of its other customers and makes them available for you to sell. If no other customers own shares of this stock, then generally you are out of luck (It is more complicated like that in practice, but this is just an overview). Your odds are better if the particular stock has a large float (i.e. a large number of shares that are actually available for trading) and its short ratio is low (which means relatively few shares are currently being sold short). Also, a large brokerage may be more likely to have access to the shares than a small niche-market broker. The example you've given, Angie's List (ANGI) is a $600M small-cap with a comparatively low float, and though I haven't been able to glean the short ratio, it appears that a lot of investors are bearish on this stock and probably already had the same idea to short it. There is really no way to find out if a specific broker has shares in inventory available for shorting, short of (forgive the pun) checking directly with the broker." }, { "docid": "516880", "title": "", "text": "There are many technical answers above , but the short story to me is that very few active fund managers consistently beat the market. Look at the results of actively managed funds. Depending on whose analysis you read, you will find out that somewhere between 80-90% of fund managers in a given year do not beat passive index funds. So go figure how you will do compared to a mutual fund manager who has way more experience than you likely have. So, that in itself is moderately interesting, but if you look at same-manager performance over several consecutive years it is rare to find anyone that goes beats the market for more than a few years in a row. There are exceptions, but go pick one of these guys/gals - good luck. Getting in and out of the market is a loser. This is because there is no way to see market spikes and down turns. There are many behavioral studies that have been done that show people do the wrong thing: they sell after losses have occurred and they buy after the market has gone up. Missing an up spike and not being in before the spike is as devastating as missing a down turn and not getting out in time. There is another down side, if you are trading in a personal account, rather than a tax deferred account, going in and out of stocks has tax complications. In short, a broad based equity index will, over time, beat about anything out there and it will do it in a tax efficient manner. Exchange traded funds (ETFs) are a wonderful way to obtain diversification immediately at very low cost." }, { "docid": "546075", "title": "", "text": "\"Brendan, The short answer is no, there is no need to get into any other funds. For all intents and purposes the S&P 500 is \"\"The Stock Market\"\". The news media may quote the Dow when the market reaches new highs or crashes but all of the Dow 30 stocks are included in the S&P 500. The S&P is also marketcap weighted, which means that it owns in higher proportion the big \"\"Blue Chip\"\" stocks more than the smaller less known companies. To explain, the top 10 holdings in the S&P represent 18% of the total index, while the bottom 10 only represent 0.17% (less than 1 percent). They do have an equal weighted S&P in which all 500 companies represent only 1/500th of the index and that is technically even more diversified but in actuality it makes it more volatile because it has a higher concentration of those smaller less known companies. So it will tend to perform better during up markets and worse during down markets. As far as diversification into different asset classes or other countries, that's non-sense. The S&P 500 has companies in it that give you that exposure. For example, it includes companies that directly benefit from rising oil prices, rising gold prices, etc known as the Energy and Materials sector. It also includes companies that own malls, apartment complexes, etc. known as the Real Estate sector. And as far as other countries, most of the companies in the S&P are multi-national companies, meaning that they do business over seas in many parts of the world. Apple and FaceBook for example sell their products in many different countries. So you don't need to invest any of your money into an Emerging Market fund or an Asia Fund because most of our companies are already doing business in those parts of the world. Likewise, you don't need to specifically invest into a real estate or gold fund. As far as bonds go, if you're in your twenties you have no need for them either. Why, because the S&P 500 also pays you dividends and these dividends grow over time. So for example, if Microsoft increases its dividend payment by 100% over a ten year period , all of the shares you buy today at a 2.5% yield will, in 10 years, have a higher 5% yield. A bond on the other hand will never increase its yield over time. If it pays out 4%, that's all it will ever pay. You want to invest because you want to grow your money and if you want to invest passively the fastest way to do that is through index ETFs like the $SPY, $IVV, and $RSP. Also look into the $XIV, it's an inverse VIX ETF, it moves 5x faster than the S&P in the same direction. If you want to actively trade your money, you can grow it even faster by getting into things like options, highly volatile penny stocks, shorting stocks, and futures. Don't get involved in FX or currency trading, unless it through futures.\"" }, { "docid": "351055", "title": "", "text": "Thanks for the link. The way I interpretet is like this: IPOs are underpriced to make sure they will sell all the shares to the market, avoiding lose of face. (short term andslide 4) But that doesn't mean it is a good investment in the long run, because these companies have their reasons to go public, and one of those reasons could be that they think the market is overpricing stocks (long term and slide 5) There are of course other reasons, one of them to finance the business. By the way, I think the data is heavily skewed because of the dotcom crash, but interesting nonetheless." }, { "docid": "1203", "title": "", "text": "When you want to short a stock, you are trying to sell shares (that you are borrowing from your broker), therefore you need buyers for the shares you are selling. The ask prices represent people who are trying to sell shares, and the bid prices represent people who are trying to buy shares. Using your example, you could put in a limit order to short (sell) 1000 shares at $3.01, meaning that your order would become the ask price at $3.01. There is an ask price ahead of you for 500 shares at $3.00. So people would have to buy those 500 shares at $3.00 before anyone could buy your 1000 shares at $3.01. But it's possible that your order to sell 1000 shares at $3.01 never gets filled, if the buyers don't buy all the shares ahead of you. The price could drop to $1.00 without hitting $3.01 and you will have missed out on the trade. If you really wanted to short 1000 shares, you could use a market order. Let's say there's a bid for 750 shares at $2.50, and another bid for 250 shares at $2.49. If you entered a market order to sell 1000 shares, your order would get filled at the best bid prices, so first you would sell 750 shares at $2.50 and then you would sell 250 shares at $2.49. I was just using your example to explain things. In reality there won't be such a wide spread between the bid and ask prices. A stock might have a bid price of $10.50 and an ask price of $10.51, so there would only be a 1 cent difference between putting in a limit order to sell 1000 shares at $10.51 and just using a market order to sell 1000 shares and getting them filled at $10.50. Also, your example probably wouldn't work in real life, because brokers typically don't allow people to short stocks that are trading under $5 per share. As for your question about how often you are unable to make a short sale, it can sometimes happen with stocks that are heavily shorted and your broker may not be able to find any more shares to borrow. Also remember that you can only short stocks with a margin account, you cannot short stocks with a cash account." }, { "docid": "256349", "title": "", "text": "The stock market, as a whole, is extremely volatile. During any 3 year period, the market could go up or down. However, and this is the important point,the market as a whole has historically been a good long term investment. If you need the money in 5 years, then you want to put it in something less volatile (so there's less chance of losing it). If you need the money in 50 years, put it in the market; the massive growth over those 50 years will more than make up for any short term drops, and you will probably come out ahead. Once you get closer to retirement age, you want to take the money out of stocks and put it in something safer; essentially locking in your profit, and protecting yourself from the possibility of further loss. Something else to consider: everyone lost money in 2008. There were no safe investments (well, ok, there were a few... but not enough to talk about). Given that, why would you choose another investment over stocks? Taking a 50% loss after decades of 10% annual returns is still better than a 50% loss after decades of 5% growth (in fact, after 20 years of growth, it's still 250% better - and that ratio will only improve the longer you leave it in)." }, { "docid": "107045", "title": "", "text": "Rich's answer captures the basic essence of short selling with example. I'd like to add these additional points: You typically need a specially-privileged brokerage account to perform short selling. If you didn't request short selling when you opened your account, odds are good you don't have it, and that's good because it's not something most people should ever consider doing. Short selling is an advanced trading strategy. Be sure you truly grok selling short before doing it. Consider that when buying stock (a.k.a. going long or taking a long position, in contrast to short) then your potential loss as a buyer is limited (i.e. stock goes to zero) and your potential gain unlimited (stock keeps going up, if you're lucky!) Whereas, with short selling, it's reversed: Your loss can be unlimited (stock keeps going up, if you're unlucky!) and your potential gain is limited (i.e. stock goes to zero.) The proceeds you receive from a short sale – and then some – need to stay in your account to offset the short position. Brokers require this. Typically, margin equivalent to 150% the market value of the shares sold short must be maintained in the account while the short position is open. The owner of the borrowed shares is still expecting his dividends, if any. You are responsible for covering the cost of those dividends out of your own pocket. To close or cover your short position, you initiate a buy to cover. This is simply a buy order with the intention that it will close out your matching short position. You may be forced to cover your short position before you want to and when it is to your disadvantage! Even if you have sufficient margin available to cover your short, there are cases when lenders need their shares back. If too many short sellers are forced to close out positions at the same time, they push up demand for the stock, increasing price and deepening their losses. When this happens, it's called a short squeeze. In the eyes of the public who mostly go long buying stock, short sellers are often reviled. However, some people and many short sellers believe they are providing balance to the market and preventing it sometimes from getting ahead of itself. [Disambiguation: A short sale in the stock market is not related to the real estate concept of a short sale, which is when a property owner sells his property for less than he owes the bank.] Additional references:" }, { "docid": "45190", "title": "", "text": "\"A mutual fund could make two different kinds of distributions to you: Capital gains: When the fund liquidates positions that it holds, it may realize a gain if it sells the assets for a greater price than the fund purchased them for. As an example, for an index fund, assets may get liquidated if the underlying index changes in composition, thus requiring the manager to sell some stocks and purchase others. Mutual funds are required to distribute most of their income that they generate in this way back to its shareholders; many often do this near the end of the calendar year. When you receive the distribution, the gains will be categorized as either short-term (the asset was held for less than one year) or long-term (vice versa). Based upon the holding period, the gain is taxed differently. Currently in the United States, long-term capital gains are only taxed at 15%, regardless of your income tax bracket (you only pay the capital gains tax, not the income tax). Short-term capital gains are treated as ordinary income, so you will pay your (probably higher) tax rate on any cash that you are given by your mutual fund. You may also be subject to capital gains taxes when you decide to sell your holdings in the fund. Any profit that you made based on the difference between your purchase and sale price is treated as a capital gain. Based upon the period of time that you held the mutual fund shares, it is categorized as a short- or long-term gain and is taxed accordingly in the tax year that you sell the shares. Dividends: Many companies pay dividends to their stockholders as a way of returning a portion of their profits to their collective owners. When you invest in a mutual fund that owns dividend-paying stocks, the fund is the \"\"owner\"\" that receives the dividend payments. As with capital gains, mutual funds will redistribute these dividends to you periodically, often quarterly or annually. The main difference with dividends is that they are always taxed as ordinary income, no matter how long you (or the fund) have held the asset. I'm not aware of Texas state tax laws, so I can't comment on your other question.\"" }, { "docid": "589127", "title": "", "text": "\"There are more than a few different ways to consider why someone may have a transaction in the stock market: Employee stock options - If part of my compensation comes from having options that vest over time, I may well sell shares at various points because I don't want so much of my new worth tied up in one company stock. Thus, some transactions may happen from people cashing out stock options. Shorting stocks - This is where one would sell borrowed stock that then gets replaced later. Thus, one could reverse the traditional buy and sell order in which case the buy is done to close the position rather than open one. Convertible debt - Some companies may have debt that come with warrants or options that allow the holder to acquire shares at a specific price. This would be similar to 1 in some ways though the holder may be a mutual fund or company in some cases. There is also some people that may seek high-yield stocks and want an income stream from the stock while others may just want capital appreciation and like stocks that may not pay dividends(Berkshire Hathaway being the classic example here). Others may be traders believing the stock will move one way or another in the short-term and want to profit from that. So, thus the stock market isn't necessarily as simple as you state initially. A terrorist attack may impact stocks in a couple ways to consider: Liquidity - In the case of the attacks of 9/11, the stock market was closed for a number of days which meant people couldn't trade to convert shares to cash or cash to shares. Thus, some people may pull out of the market out of fear of their money being \"\"locked up\"\" when they need to access it. If someone is retired and expects to get $x/quarter from their stocks and it appears that that may be in jeopardy, it could cause one to shift their asset allocation. Future profits - Some companies may have costs to rebuild offices and other losses that could put a temporary dent in profits. If there is a company that makes widgets and the factory is attacked, the company may have to stop making widgets for a while which would impact earnings, no? There can also be the perception that an attack is \"\"just the beginning\"\" and one could extrapolate out more attacks that may affect broader areas. Sometimes what recently happens with the stock market is expected to continue that can be dangerous as some people may believe the market has to continue like the recent past as that is how they think the future will be.\"" }, { "docid": "94159", "title": "", "text": "\"I don't have anything definitive, but in general positions in a company are not affected materially by what is called a corporate action. \"\"Corp Actions\"\" can really be anything that affects the details of a stock. Common examples are a ticker change, or exchange change, IPO (ie a new ticker), doing a split, or merging with another ticker. All of these events do not change the total value of people's positions. If a stock splits, you might have more shares, but they are worth less per share. A merger is quite similar to a split. The old company's stock is converted two the new companies stock at some ratio (ie 10 shares become 1 share) and then converted 1-to-1 to the new symbol. Shorting a stock that splits is no different. You shorted 10 shares, but after the split those are now 100 shares, when you exit the position you have to deliver back 100 \"\"new\"\" shares, though dollar-for-dollar they are the same total value. I don't see why a merger would affect your short position. The only difference is you are now shorting a different company, so when you exit the position you'll have to deliver shares of the new company back to the brokerage where you \"\"borrowed\"\" the shares you shorted.\"" }, { "docid": "379023", "title": "", "text": "EDIT: new ideas based on the full story. I wouldn't worry about the price history. While it is certainly true that some buyers might try to leverage that information against you, the bottom line is the price is the price. Both the buyer and the seller have to agree. If the initial listing was too high, then lower the price. If that isn't low enough, then readjust down. I see no harm in moving the price down over time repeatedly. In fact, I thin that is a good tactic to getting the most for the house. If you happen to have the luxury of time, then keep lowering that price until it sells. Don't fret how that behavior appears. You can lower the price as often as you like until it sells. I am not a real estate agent, and I am a terrible negotiator, but I would lower the price every quarter until it sells. You can't go down to fast (a buyer might wait you out) and you can't wait to long as you stated. Also, if you house is priced inline with the neighborhood, you can at least get offers and negotiate. Buy asking for such a premium (25%) folks might not even make an offer. You simply need to decide what is more important, the selling price or the time frame in getting it sold. If you house doesn't sell because the market doesn't support your price, then consider keeping it as a rental. You can do it yourself, or if you are not interested in that (large) amount of work, then hire a rental management company to do it for a fee. Renting a home is hard work and requires attention to detail, a good amount of your time and much labor. If you just need to wait a couple of years before selling, renting it can be a good option to cover your costs while you wait for the market to reach you. You should get advice on how to handle the money, how to rent it, how to deal with renters, and the the laws are in your jurisdiction. Rent it out to a trusted friend or family member for a steal of a deal. They save money, and you get the luxury of time waiting for the sale. With a real estate lawyer you hire, get a contract for a lease option or owner finance deal on the house. Sometimes you can expand the market of people looking to buy your house. If you have a willing purchaser will bad credit, you can be doing them a favor and solving your own issue. It costs money and you will make less on the sale, but it could be better than nothing. Take heed, there is a reason some people cannot get a traditional loan on their own. Before you extend your good name or credit think about it. It is another hassle for sure. This won't help if you have to pay off a mortgage, but you could donate it. This is another tricky deal that you really need to speak with a lawyer who specialize in charitable giving. There are tax benefits, but I would make any kind of a deal where tax deductions are the only benefit. This is common enough these days. If you are unable to pay for the mortgage, it benefits you and the bank to get into a short sale arrangement. They bank gets probably more money than if they have to foreclose (and they save money on legal fees) and you can get rid of the obligation. You will do a deed in lieu or the short sale depending on how the market it and what the house can be sold for. You and the bank will have to work it out. This will ruin for a credit for a while, and you will not likely qualify to get a new mortgage for at least a few years. You can stop paying your mortgage, tell the bank and they will foreclose. This is going to ruin your credit for a long time as well as disqualify you from mortgages in the near future. Don't do this. If you are planning a foreclosure, take the time to contact your bank and arrange a short sale or a deed in lieu. There isn't really any excuse to go into foreclosure if you are having problems. Talk to the bank and work out a deal." }, { "docid": "39265", "title": "", "text": "In addition to the higher risk as pointed out by @JamesRoth, you also need to consider that there are regulations against 'naked shorting' so you generally need to either own the security, or have someone that is willing to 'loan' the security to you in order to sell short. If you own a stock you are shorting, the IRS could view the transaction as a Sell followed by a buy taking place in a less than 30 day period and you could be subject to wash-sale rules. This added complexity (most often the finding of someone to loan you the security you are shorting) is another reason such trades are considered more advanced. You should also be aware that there are currently a number of proposals to re-instate the 'uptick rule' or some circuit-breaker variant. Designed to prevent short-sellers from driving down the price of a stock (and conducting 'bear raids etc) the first requires that a stock trade at the same or higher price as prior trades before you can submit a short. In the latter shorting would be prohibited after a stock price had fallen a given percentage in a given amount of time. In either case, should such a rule be (re)established then you could face limitations attempting to execute a short which you would not need to worry about doing simple buys or sells. As to vehicles that would do this kind of thing (if you are convinced we are in a bear market and willing to take the risk) there are a number of ETF's classified as 'Inverse Exchange Traded Funds (ETF's) for a variety of markets that via various means seek to deliver a return similar to that of 'shorting the market' in question. One such example for a common broad market is ticker SH the ProShares Short S&P500 ETF, which seeks to deliver a return that is the inverse of the S&P500 (and as would be predicted based on the roughly +15% performance of the S&P500 over the last 12 months, SH is down roughly -15% over the same period). The Wikipedia article on inverse ETF's lists a number of other such funds covering various markets. I think it should be noted that using such a vehicle is a pretty 'aggressive bet' to take in reaction to the belief that a bear market is imminent. A more conservative approach would be to simply take money out of the market and place it in something like CD's or Treasury instruments. In that case, you preserve your capital, regardless of what happens in the market. Using an inverse ETF OTOH means that if the market went bull instead of bear, you would lose money instead of merely holding your position." }, { "docid": "60001", "title": "", "text": "Yes, from the point-of-view to the end speculator/investor in stocks, it is ludicrous to take on liabilities when you don't have to. That's why single-stock options are far more liquid than single-stock futures. However, if you are a farmer with a huge mortgage depending upon the chaos of agricultural markets which are extremely volatile, a different structure might appeal to you. You could long your inputs while shorting your outputs, locking in a profit. That profit is probably lower than what one could expect over the long run without hedging, but it will surely be less volatile. Here's where the advantage of futures come in for that kind of structure: the margin on the longs and shorts can offset each other, forcing the farmer to have to put up much less of one's own money to hedge. With options, this is not the case. Also, the gross margin between the inputs rarely fluctuate to an unmanageable degree, so if your shorts rise faster than your longs, you'll only have to post margin in the amount of the change in the net of the longs and shorts. This is why while options on commodities exist to satisfy speculators, futures are the most liquid." }, { "docid": "171784", "title": "", "text": "\"Depends on how far down the market is heading, how certain you are that it is going that way, when you think it will fall, and how risk-averse you are. By \"\"better\"\" I will assume you are trying to make the most money with this information that you can given your available capital. If you are very certain, the way that makes the most money for the least investment from the options you provided is a put. If you can borrow some money to buy even more puts, you will make even more. Use your knowledge of how far and when the market will fall to determine which put is optimal at today's prices. But remember that if the market stays flat or goes up you lose everything you put in and may owe extra to your creditor. A short position in a futures contract is also an easy way to get extreme leverage. The extremity of the leverage will depend on how much margin is required. Futures trade in large denominations, so think about how much you are able to put to risk. The inverse ETFs are less risky and offer less reward than the derivative contracts above. The levered one has twice the risk and something like twice the reward. You can buy those without a margin account in a regular cash brokerage, so they are easier in that respect and the transactions cost will likely be lower. Directly short selling an ETF or stock is another option that is reasonably accessible and only moderately risky. On par with the inverse ETFs.\"" }, { "docid": "219762", "title": "", "text": "In the US, it is perfectly legal to execute what you've described. However, since you seem to be bullish on the stock, why sell? How do you KNOW the price will continue downwards? Aside from the philosophical reasoning, there can be significant downside to selling shares when you're expecting to repurchase them in the near future, i.e. you will lose your cost basis date which determines whether or not your trade is short-term (less than 1 year) or long-term. This cost basis term will begin anew once you repurchase the shares. IF you are trying to tax harvest and match against some short-term gains, tax loss harvesting prior to long-term treatment may be suitable. Otherwise, reexamine your reasoning and reconsider the sale at all, since you are bullish. Remember: if you could pick where stock prices are headed in the short term with any degree of certainty you are literally one of a kind on this planet ;-). In addition, do remember that in a tax deferred account (e.g. IRA) the term of your trade is typically meaningless but your philosophical reasoning for selling should still be examined." }, { "docid": "83734", "title": "", "text": "Energy Transfer Partners, LP (stock symbol ETP) is the parent company of Dakota Access LLC, the developer of the Dakota Access Pipeline. Since ETP is a publicly traded company, it is certainly possible to purchase the stock. To answer your questions: Would it not be possible to buy their stocks, bring down the price of the stocks and keep it there until investors pull out because it is financially unwise to these investors? You cannot artificially bring the price of a stock down by buying the stock. Purchasing large enough amounts would theoretically cause the price to go up, not down. You could theoretically cause the stock to go down by shorting the stock (borrowing shares and then selling them), but it would take a lot of shares to do this, and may not be successful. If not successful, your losses are potentially unlimited. Would it alternatively be possible to buy enough stock to have a voice in the operations of the company? Yes, you could theoretically purchase enough of the stock to control the company. The market capitalization of ETP is currently $17.9 Billion; if you owned half of the stock, you would have complete control of the company. But buying that much stock would certainly influence the price of the stock, so it would cost you more than half of that amount to buy that much stock. You could get yourself a voice at the table for less without owning a full half of the stock, but you would not have full control, and would need support from others to get the outcome you want. Alternatively, someone determined to exert their influence could theoretically make an offer to purchase the Dakota Access subsidiary from ETP, which might be less costly than purchasing half of the entire corporation. Even if an extremely wealthy person were to try one of these options and destroy this company, it wouldn't necessarily stop another company from building something similar. The investors you purchased the company from would have billions of dollars to do so with." } ]

[ { "docid": "533354", "title": "", "text": "Timothy Sykes specializes in this type of trade, according to his website. He has some recommendations for brokers that allow shorting low-priced stocks:" } ]

[ { "docid": "137073", "title": "", "text": "Trying to make money on something going down is inherently more complicated, risky and speculative than making money on it going up. Selling short allows for unlimited losses. Put options expire and have to be rebought if you want to keep playing that game. If you are that confident that the European market will completely crash (I'm not, but then again, I tend to be fairly contrarian) I'd recommend just sitting it out in cash (possibly something other than the Euro) and waiting until it gets so ridiculously cheap due to panic selling that it defies all common sense. For example, when companies that aren't completely falling apart are selling for less than book value and/or less than five times prior peak earnings that's a good sign. Another indicator is when you hear absolutely nothing other than doom-and-gloom and people swearing they'll never buy another stock as long as they live. Then buy at these depressed prices and when all the panic sellers realize that the world didn't end, it will go back up." }, { "docid": "226496", "title": "", "text": "It's actually quite simple. You're actually confusing two concept. Which are taking a short position and short selling itself. Basically when taking a short position is by believing that the stock is going to drop and you sell it. You can or not buy it back later depending on the believe it grows again or not. So basically you didn't make any profit with the drop in the price's value but you didn't lose money either. Ok but what if you believe the market or specific company is going to drop and you want to profit on it while it's dropping. You can't do this by buying stock because you would be going long right? So back to the basics. To obtain any type of profit I need to buy low and sell high, right? This is natural for use in long positions. Well, now knowing that you can sell high at the current moment and buy low in the future what do you do? You can't sell what you don't have. So acquire it. Ask someone to lend it to you for some time and sell it. So selling high, check. Now buying low? You promised the person you would return him his stock, as it's intangible he won't even notice it's a different unit, so you buy low and return the lender his stock. Thus you bought low and sold high, meaning having a profit. So technically short selling is a type of short position. If you have multiple portfolios and lend yourself (i.e. maintaining a long-term long position while making some money with a short term short-term strategy) you're actually short selling with your own stock. This happens often in hedge funds where multiple strategies are used and to optimise the transaction costs and borrowing fees, they have algorithms that clear (match) long and short coming in from different traders, algorithms, etc. Keep in mind that you while have a opportunities risk associated. So basically, yes, you need to always 'borrow' a product to be able to short sell it. What can happen is that you lend yourself but this only makes sense if:" }, { "docid": "410404", "title": "", "text": "There are 2 primary ways to bet against a stock if you think it will decline. The first is to short sell shares of that stock the second is to buy put options (I would also add that selling naked call options would also be a bet against but I don't believe that is as common as the other 2 mentioned methods). The problem with short selling an IPO is that you first have to borrow the shares you are going to sell. Since the shares are privately held prior to the IPO that can be problematic. Even after the IPO you may have to wait a bit before shares become available to borrow. The problem with options (either buying puts or seeking naked calls) is similar. Options are traded on a different exchange than the stock and they have their own requirements that a stock must meet to have options traded. Both of these problems eventually correct themselves however, not in time for you to catch the initial fall you seem to be looking for." }, { "docid": "256349", "title": "", "text": "The stock market, as a whole, is extremely volatile. During any 3 year period, the market could go up or down. However, and this is the important point,the market as a whole has historically been a good long term investment. If you need the money in 5 years, then you want to put it in something less volatile (so there's less chance of losing it). If you need the money in 50 years, put it in the market; the massive growth over those 50 years will more than make up for any short term drops, and you will probably come out ahead. Once you get closer to retirement age, you want to take the money out of stocks and put it in something safer; essentially locking in your profit, and protecting yourself from the possibility of further loss. Something else to consider: everyone lost money in 2008. There were no safe investments (well, ok, there were a few... but not enough to talk about). Given that, why would you choose another investment over stocks? Taking a 50% loss after decades of 10% annual returns is still better than a 50% loss after decades of 5% growth (in fact, after 20 years of growth, it's still 250% better - and that ratio will only improve the longer you leave it in)." }, { "docid": "461062", "title": "", "text": "\"For the same reason that people bet on different teams. Some think the Tigers will win, others thing the Yankees will win. They wager $5 on it. One of them wins, the other loses. In a short, one person bets that the stock goes down, the other bets that the stock goes up (or hold). You're basically saying \"\"I think this stock is going to hold it's value or go up. If I thought it would go down, like you do, I would sell it myself right now. Instead, I'll let you have it for a while because when I get it back I think I'll come out on top.\"\"\"" }, { "docid": "428786", "title": "", "text": "How so? If i sell short, then i make a profit only if the price goes down so i can buy back at a lower price. Yes, but if the price is going up then you would go long instead. Shorting a stock (or any other asset) allows you to profit when the price is going down. Going long allows you to profit when the price is going up. In the opposite cases, you lose money. In order to make a profit in either of those situations, you have to accurately assess which way the price will trade over the period of time you are dealing with. If you make the wrong judgment, then you lose money because you'll either sell for a lower price than you bought (if you went long), or have to buy back at a higher price than you sold for (if you went short). In either case, unless the trader can live with making a short-term loss and recouperating it later, one needs a good stop-loss strategy." }, { "docid": "433806", "title": "", "text": "\"1) Are the definitions for capital market from the two sources the same? Yes. They are from two different perspectives. Investopedia is looking at it primarily from the perspective of a trader and they lead-off with the secondary market. This refers to the secondary market: A market in which individuals and institutions trade financial securities. This refers to the primary market: Organizations/institutions in the public and private sectors also often sell securities on the capital markets in order to raise funds. Also, the Investopedia definition leaves much to be desired, but it is supposed to be pithy. So, you are comparing apples and oranges, to some extent. One is an article, as short as it may be, this other one is an entry in a dictionary. 2) What is the opposite of capital market, according to the definition in investopedia? It's not quite about opposites, this is not physics. However, that is not the issue here. The Investopedia definition simply does not mention any other possibilities. The Wikipedia article defines the term more thoroughly. It talks about primary/secondary markets in separate paragraph. 3) According to the Wikipedia's definition, why does stock market belong to capital market, given that stocks can be held less than one year too? If you follow the link in the Wikipedia article to money market: As money became a commodity, the money market is nowadays a component of the financial markets for assets involved in short-term borrowing, lending, buying and selling with original maturities of one year or less. The key here is original maturities of one year or less. Here's my attempt at explaining this: Financial markets are comprised of money markets and capital markets. Money is traded as if it were a commodity on the money markets. Hence, the short-term nature in its definition. They are more focused on the money itself. Capital markets are focused on the money as a means to an end. Companies seek money in these markets for longer terms in order to improve their business in some way. A business may go to the money markets to access money quickly in order to deal with a short-term cash crunch. Meanwhile, a business may go to the capital markets to seek money in order to expand its business. Note that capital markets came first and money markets are a relatively recent development. Also, we are typically speaking about the secondary (capital) market when we are talking about the stock or bond market. In this market, participants are merely trading among themselves. The company that sought money by issuing that stock/bond certificate is out of the picture at that point and has its money. So, Facebook got its money from participants in the primary market: the underwriters. The underwriters then turned around and sold that stock in an IPO to the secondary market. After the IPO, their stock trades on the secondary market where you or I have access to trade it. That money flows between traders. Facebook got its money at the \"\"beginning\"\" of the process.\"" }, { "docid": "39265", "title": "", "text": "In addition to the higher risk as pointed out by @JamesRoth, you also need to consider that there are regulations against 'naked shorting' so you generally need to either own the security, or have someone that is willing to 'loan' the security to you in order to sell short. If you own a stock you are shorting, the IRS could view the transaction as a Sell followed by a buy taking place in a less than 30 day period and you could be subject to wash-sale rules. This added complexity (most often the finding of someone to loan you the security you are shorting) is another reason such trades are considered more advanced. You should also be aware that there are currently a number of proposals to re-instate the 'uptick rule' or some circuit-breaker variant. Designed to prevent short-sellers from driving down the price of a stock (and conducting 'bear raids etc) the first requires that a stock trade at the same or higher price as prior trades before you can submit a short. In the latter shorting would be prohibited after a stock price had fallen a given percentage in a given amount of time. In either case, should such a rule be (re)established then you could face limitations attempting to execute a short which you would not need to worry about doing simple buys or sells. As to vehicles that would do this kind of thing (if you are convinced we are in a bear market and willing to take the risk) there are a number of ETF's classified as 'Inverse Exchange Traded Funds (ETF's) for a variety of markets that via various means seek to deliver a return similar to that of 'shorting the market' in question. One such example for a common broad market is ticker SH the ProShares Short S&P500 ETF, which seeks to deliver a return that is the inverse of the S&P500 (and as would be predicted based on the roughly +15% performance of the S&P500 over the last 12 months, SH is down roughly -15% over the same period). The Wikipedia article on inverse ETF's lists a number of other such funds covering various markets. I think it should be noted that using such a vehicle is a pretty 'aggressive bet' to take in reaction to the belief that a bear market is imminent. A more conservative approach would be to simply take money out of the market and place it in something like CD's or Treasury instruments. In that case, you preserve your capital, regardless of what happens in the market. Using an inverse ETF OTOH means that if the market went bull instead of bear, you would lose money instead of merely holding your position." }, { "docid": "516880", "title": "", "text": "There are many technical answers above , but the short story to me is that very few active fund managers consistently beat the market. Look at the results of actively managed funds. Depending on whose analysis you read, you will find out that somewhere between 80-90% of fund managers in a given year do not beat passive index funds. So go figure how you will do compared to a mutual fund manager who has way more experience than you likely have. So, that in itself is moderately interesting, but if you look at same-manager performance over several consecutive years it is rare to find anyone that goes beats the market for more than a few years in a row. There are exceptions, but go pick one of these guys/gals - good luck. Getting in and out of the market is a loser. This is because there is no way to see market spikes and down turns. There are many behavioral studies that have been done that show people do the wrong thing: they sell after losses have occurred and they buy after the market has gone up. Missing an up spike and not being in before the spike is as devastating as missing a down turn and not getting out in time. There is another down side, if you are trading in a personal account, rather than a tax deferred account, going in and out of stocks has tax complications. In short, a broad based equity index will, over time, beat about anything out there and it will do it in a tax efficient manner. Exchange traded funds (ETFs) are a wonderful way to obtain diversification immediately at very low cost." }, { "docid": "274165", "title": "", "text": "As Waldfee says, CFDs are a derivative (of the underlying stock in this case). If you are from the USA then they are prohibited in the USA as has also been mentioned. They are not prohibited, however, in many other countries including Australia. We can buy or short sell (on a limited number of securities) CFDs on Australian securities, USA securities and securities from many other countries, on FX, and different commodities. The reason you are paying much less than the actial stock price is worth is because you are buying on margin. When you go long you pay interest on overnight positions, and when you go short you recieve interest on overnight positions (that is if you hold the position open overnight). Most CFDs are over the counter, however in Australia (don't know about other countries) we also have exchange traded CFDs called ASX CFDs. I have tried both ASX CFDs and over the counter CFDs and prefer the over the counter CFDs because the broker provides a market which closely but not exactly follows the underlying prices. Wlth the exchange traded CFDs there was low liquidity due to being quite new so there was the potential to be gapped quite considerably. This might improve as the market grows. All in all, once you understand how they work and what is involved in trading them, they are much easier than options or futers. However, if you are going to trade anything first get yourself educated, have a trading plan and risk management strategy, and paper trade before putting real money on the table. And remember, if you are in the USA, you are actually prohibited from trading CFDs. Regarding the price of AAPL at $50, the price should be the same as that of the underlying stock, it is just that your initial outlay will be less than buying the stock directly because you are buying on margin. Your initial outlay may be as little as 5% or lower, depending on the underlying stock." }, { "docid": "388362", "title": "", "text": "\"The other two answers seem basically correct, but I wanted to add on thing: While you can exercise an \"\"American style\"\" option at any time, it's almost never smart to do so before expiration. In your example, when the underlying stock reaches $110, you can theoretically make $2/share by exercising your option (buying 100 shares @ $108/share) and immediately selling those 100 shares back to the market at $110/share. This is all before commission. In more detail, you'll have these practical issues: You are going to have to pay commissions, which means you'll need a bigger spread to make this worthwhile. You and those who have already answered have you finger on this part, but I include it for completeness. (Even at expiration, if the difference between the last close price and the strike price is pretty close, some \"\"in-the-money\"\" options will be allowed to expire unexercised when the holders can't cover the closing commission costs.) The market value of the option contract itself should also go up as the price of the underlying stock goes up. Unless it's very close to expiration, the option contract should have some \"\"time value\"\" in its market price, so, if you want to close your position at this point, earlier then expiration, it will probably be better for you to sell the contract back to the market (for more money and only one commission) than to exercise and then close the stock position (for less money and two commissions). If you want to exercise and then flip the stock back as your exit strategy, you need to be aware of the settlement times. You probably are not going to instantly have those 100 shares of stock credited to your account, so you may not be able to sell them right away, which could leave you subject to some risk of the price changing. Alternatively, you could sell the stock short to lock in the price, but you'll have to be sure that your brokerage account is set up to allow that and understand how to do this.\"" }, { "docid": "263321", "title": "", "text": "\"which means the current total is $548,100. Is that correct? Yep Unfortunately the \"\"current\"\" GM stock is different than the GM stock of 1989. GM went bankrupt in 2011. It's original stock changed to Motors Liquidation Company (MTLQQ) and is essentially worthless today. There was no conversion from the old stock to the new stock. What do I do with these certificates? Can I bring them to my bank, or do I need to open an account with a stock company like Fidelity? See here for some instructions on cashing them in (or at least registering them electronically). I've never dealt with physical stocks, but I presume that a broker is going to charge you something for registering them vs. direct registration, though I have no idea how much that would be. I read somewhere that I only have to pay taxes when I cash out these stocks. But are these rules any different because I inherited the stocks? You will pay capital gains tax on the increase in value from the time your father died to the time you sell the shares. If that time is more than one year (and the stock has gone up in value) you will pay a 15% tax on the total increase. If you have held them less than one year, they will be short-term capital gains which will count as regular income, and you will pay whatever your marginal tax rate is. If you sell the stock at a loss, then you'll be able to deduct some or all of that loss from your income, and may be able to carry forward losses for a few years as well. I did not catch that the stock you mention was GM stock. GM went bankrupt in 2011, so it's likely that the stock you own is worthless. I have edited the first answer appropriately but left the other two since they apply more generally. In your case the best you get is a tax deduction for the loss in value from the date your father died.\"" }, { "docid": "171784", "title": "", "text": "\"Depends on how far down the market is heading, how certain you are that it is going that way, when you think it will fall, and how risk-averse you are. By \"\"better\"\" I will assume you are trying to make the most money with this information that you can given your available capital. If you are very certain, the way that makes the most money for the least investment from the options you provided is a put. If you can borrow some money to buy even more puts, you will make even more. Use your knowledge of how far and when the market will fall to determine which put is optimal at today's prices. But remember that if the market stays flat or goes up you lose everything you put in and may owe extra to your creditor. A short position in a futures contract is also an easy way to get extreme leverage. The extremity of the leverage will depend on how much margin is required. Futures trade in large denominations, so think about how much you are able to put to risk. The inverse ETFs are less risky and offer less reward than the derivative contracts above. The levered one has twice the risk and something like twice the reward. You can buy those without a margin account in a regular cash brokerage, so they are easier in that respect and the transactions cost will likely be lower. Directly short selling an ETF or stock is another option that is reasonably accessible and only moderately risky. On par with the inverse ETFs.\"" }, { "docid": "104789", "title": "", "text": "\"So, the term \"\"ready market\"\" simply means that a market exists in which there are legitimate buy/sell offers, meaning there are investors willing to own or trade in the security. A \"\"spot market\"\" means that the security/commodity is being delivered immediately, rather at some predetermined date in the future (hence the term \"\"futures market\"\"). So if you buy oil on the spot market, you'd better be prepared to take immediate delivery, where as when you buy a futures contract, the transaction doesn't happen until some later date. The advantage for futures contract sellers is the ability to lock in the price of what they're selling as a hedge against the possibility of a price drop between now and when they can/will deliver the commodity. In other words, a farmer can pre-sell his grain at a set price for some future delivery date so he can know what he's going to get regardless of the price of grain at the time he delivers it. The downside to the farmer is that if grain prices rise higher than what he sold them for as futures contracts then he loses that additional money. That's the advantage to the buyer, who expects the price to rise so he can resell what he bought from the farmer at a profit. When you trade on margin, you're basically borrowing the money to make a trade, whether you're trading long (buying) or short (selling) on a security. It isn't uncommon for traders to pledge securities they already own as collateral for a margin account, and if they are unable to cover a margin call then those securities can be liquidated or confiscated to satisfy the debt. There still may even be a balance due after such a liquidation if the pledged securities don't cover the margin call. Most of the time you pay a fee (or interest rate) on whatever you borrow on margin, just like taking out a bank loan, so if you're going to trade on margin, you have to include those costs in your calculations as to what you need to earn from your investment to make a profit. When I short trade, I'm selling something I don't own in the expectation I can buy it back later at a lower price and keep the difference. For instance, if I think Apple shares are going to take a steep drop at some point soon, I can short them. So imagine I short-sell 1000 shares of AAPL at the current price of $112. That means my brokerage account is credited with the proceeds of the sale ($112,000), and I now owe my broker 1000 shares of AAPL stock. If the stock drops to $100 and I \"\"cover my short\"\" (buy the shares back to repay the 1000 I borrowed) then I pay $100,000 for them and give them to my broker. I keep the difference ($12,000) between what I sold them for and what I paid to buy them back, minus any brokerage fees and fees the broker may charge me for short-selling. In conclusion, a margin trade is using someone else's money to make a trade, whether it's to buy more or to sell short. A short trade is selling shares I don't even own because I think I can make money in the process. I hope this helps.\"" }, { "docid": "14262", "title": "", "text": "\"1. That's a really complicated answer. In short, I think we need to make accounting rules much simpler (I say this as an accountant) in combination with financial education in K-12 school. Most adults in this country can't tell you which is a better investment: something that returns 5% monthly or something that returns 10% annually. They don't know that accounting income and cash flow are different things and what they mean. Accounting rules are sometimes ridiculous. Look at the balance sheet of even a moderate size company. What's in \"\"Other Comprehensive Income\"\" and why is that different than net income? Why is it that American Airlines, one of the largest airlines in the world doesn't have a single airplane on their balance sheet? 2. That might be a step in the right direction, but I'm just not sure how effective something like that would be. More comprehensive might be better, but then there's going to be less people that want to take the time.\"" }, { "docid": "501214", "title": "", "text": "This will work as intended, but there's another point to consider. In the US, the tax rate on proceeds from stock sales is higher for short term holdings, which are defined as held for less than one year. Both rates vary based on your income. Bracket numbers are for fiscal year 2014, filing as single. The difference between short and long term capital gains tax in the US is a minimum of ten percentage points, and works out to 15 percentage points on average. This is substantial. If you won't be reporting much income the year you move to the US (say because you only worked for a portion of the year) it is decidedly to your advantage to wait and sell the stocks in the US, to get that sweet 0% rate. At a minimum, you should hold the position for a year if you sell and rebuy, from a tax optimization perspective. Two caveats:" }, { "docid": "404529", "title": "", "text": "\"I understand you make money by buying low and selling high. You can also make money by buying high and selling higher, short selling high and buying back low, short selling low and buying back even lower. An important technique followed by many technical traders and investors is to alway trade with the trend - so if the shares are trending up you go long (buy to open and sell to close); if the shares are trending down you go short (sell to open and buy to close). \"\"But even if the stock price goes up, why are we guaranteed that there is some demand for it?\"\" There is never any guarantees in investing or trading. The only guarantee in life is death, but that's a different subject. There is always some demand for a share or else the share price would be zero or it would never sell, i.e zero liquidity. There are many reasons why there could be demand for a rising share price - fundamental analysis could indicated that the shares are valued much higher than the current price; technical analysis could indicate that the trend will continue; greed could get the better of peoples' emotion where they think all my freinds are making money from this stock so I should buy it too (just to name a few). \"\"After all, it's more expensive now.\"\" What determines if a stock is expensive? As Joe mentioned, was Apple expensive at $100? People who bought it at $50 might think so, but people who bought at $600+ would think $100 is very cheap. On the other hand a penny stock may be expensive at $0.20. \"\"It would make sense if we can sell the stock back into the company for our share of the earnings, but why would other investors want it when the price has gone up?\"\" You don't sell your stocks back to the company for a share of the earnings (unless the company has a share-buy-back arrangement in place), you get a share of the earnings by getting the dividends the company distributes to shareholders. Other investor would want to buy the stock when the price has gone up because they think it will go up further and they can make some money out of it. Some of the reasons for this are explained above.\"" }, { "docid": "60001", "title": "", "text": "Yes, from the point-of-view to the end speculator/investor in stocks, it is ludicrous to take on liabilities when you don't have to. That's why single-stock options are far more liquid than single-stock futures. However, if you are a farmer with a huge mortgage depending upon the chaos of agricultural markets which are extremely volatile, a different structure might appeal to you. You could long your inputs while shorting your outputs, locking in a profit. That profit is probably lower than what one could expect over the long run without hedging, but it will surely be less volatile. Here's where the advantage of futures come in for that kind of structure: the margin on the longs and shorts can offset each other, forcing the farmer to have to put up much less of one's own money to hedge. With options, this is not the case. Also, the gross margin between the inputs rarely fluctuate to an unmanageable degree, so if your shorts rise faster than your longs, you'll only have to post margin in the amount of the change in the net of the longs and shorts. This is why while options on commodities exist to satisfy speculators, futures are the most liquid." }, { "docid": "326599", "title": "", "text": "Gold's valuation is so stratospheric right now that I wonder if negative numbers (as in, you should short it) are acceptable in the short run. In the long run I'd say the answer is zero. The problem with gold is that its only major fundamental value is for making jewelry and the vast majority is just being hoarded in ways that can only be justified by the Greater Fool Theory. In the long run gold shouldn't return more than inflation because a pile of gold creates no new wealth like the capital that stocks are a claim on and doesn't allow others to create new wealth like money lent via bonds. It's also not an important and increasingly scarce resource for wealth creation in the global economy like oil and other more useful commodities are. I've halfway-thought about taking a short position in gold, though I haven't taken any position, short or long, in gold for the following reasons: Straight up short-selling of a gold ETF is too risky for me, given its potential for unlimited losses. Some other short strategy like an inverse ETF or put options is also risky, though less so, and ties up a lot of capital. While I strongly believe such an investment would be profitable, I think the things that will likely rise when the flight-to-safety is over and gold comes back to Earth (mainly stocks, especially in the more beaten-down sectors of the economy) will be equally profitable with less risk than taking one of these positions in gold." } ]

[ { "docid": "565909", "title": "", "text": "If this is the initial transaction, the rules of a short margin account say that if you shorted 1000 share of ABC at $5/share your credit balance would be $5000 from the short plus you would have to put up yourself $5000 cash or $10,000 of marginal securities. So this is not really leveraging using margin. You have to put in just as much as the short generates. Is that what this relates to? Once the initial purchase has been made the minimum maintenance for a stock trading under $5 per share is 100% of the short market value in the margin account or $2.50 per share whichever is greater. For stock trading at $5/share or greater the minimum maintenance requirement is $5/share or 30% of the short market value, whichever is greater. The minimum maintenance requirements can be tighter." } ]

[ { "docid": "564611", "title": "", "text": "The point of short-selling as a separate instrument is that you can you do it when you can't sell the underlying asset... usually because you don't actually own any of it and in fact believe that it will go down. Shorting allows you to profit from a falling price. Another (non-speculative) possibility is that you don't have the underlying asset right now (and thus can't sell it) but will get it at a certain point in the future, e.g. because it's bonds that you've used to guarantee a loan... or grain that's still growing on your fields." }, { "docid": "258077", "title": "", "text": "A bit of poking around brought me to this thread on the Motley Fool, asking the same basic question: I think the problem is the stock price. For a stock to be sold short, it has to be marginable which means it has to trade over $ 5.00. The broker, therefore, can't borrow the stock for you to sell short because it isn't held in their clients' margin accounts. My guess is that Etrade, along with other brokers, simply exclude these stocks for short selling. Ivestopedia has an explanation of non-marginable securities. Specific to stocks under $5: Other securities, such as stocks with share prices under $5 or with extremely high betas, may be excluded at the discretion of the broker itself." }, { "docid": "83734", "title": "", "text": "Energy Transfer Partners, LP (stock symbol ETP) is the parent company of Dakota Access LLC, the developer of the Dakota Access Pipeline. Since ETP is a publicly traded company, it is certainly possible to purchase the stock. To answer your questions: Would it not be possible to buy their stocks, bring down the price of the stocks and keep it there until investors pull out because it is financially unwise to these investors? You cannot artificially bring the price of a stock down by buying the stock. Purchasing large enough amounts would theoretically cause the price to go up, not down. You could theoretically cause the stock to go down by shorting the stock (borrowing shares and then selling them), but it would take a lot of shares to do this, and may not be successful. If not successful, your losses are potentially unlimited. Would it alternatively be possible to buy enough stock to have a voice in the operations of the company? Yes, you could theoretically purchase enough of the stock to control the company. The market capitalization of ETP is currently $17.9 Billion; if you owned half of the stock, you would have complete control of the company. But buying that much stock would certainly influence the price of the stock, so it would cost you more than half of that amount to buy that much stock. You could get yourself a voice at the table for less without owning a full half of the stock, but you would not have full control, and would need support from others to get the outcome you want. Alternatively, someone determined to exert their influence could theoretically make an offer to purchase the Dakota Access subsidiary from ETP, which might be less costly than purchasing half of the entire corporation. Even if an extremely wealthy person were to try one of these options and destroy this company, it wouldn't necessarily stop another company from building something similar. The investors you purchased the company from would have billions of dollars to do so with." }, { "docid": "17523", "title": "", "text": "&gt; So why doesn't he just short them? Just because a stock is overvalued doesn't mean the price will go down. A short position also loses money if the stock just appreciates more slowly than the broader market, which is one way an overvaluation can correct itself." }, { "docid": "461062", "title": "", "text": "\"For the same reason that people bet on different teams. Some think the Tigers will win, others thing the Yankees will win. They wager $5 on it. One of them wins, the other loses. In a short, one person bets that the stock goes down, the other bets that the stock goes up (or hold). You're basically saying \"\"I think this stock is going to hold it's value or go up. If I thought it would go down, like you do, I would sell it myself right now. Instead, I'll let you have it for a while because when I get it back I think I'll come out on top.\"\"\"" }, { "docid": "358586", "title": "", "text": "\"I saw that an answer hasn't been accepted for this yet: Being bearish is a good hedging strategy. But being hedged is a better hedging strategy. The point being that not everything in investments is so binary (up, and down). A lot of effective hedges can have many more variables than simply \"\"stock go up, stock go down\"\" As such, there are many ways to be bearish and profit from a decline in market values without subjecting yourself to the unlimited risk of short selling. Buying puts against your long equity position is one example. Being long an ETF that is based on short positions is another example.\"" }, { "docid": "192900", "title": "", "text": "This is the bird's eye view of how shorting works: When you place an order to sell a stock short, your broker attempts to grab the desired number of shares from any accounts of its other customers and makes them available for you to sell. If no other customers own shares of this stock, then generally you are out of luck (It is more complicated like that in practice, but this is just an overview). Your odds are better if the particular stock has a large float (i.e. a large number of shares that are actually available for trading) and its short ratio is low (which means relatively few shares are currently being sold short). Also, a large brokerage may be more likely to have access to the shares than a small niche-market broker. The example you've given, Angie's List (ANGI) is a $600M small-cap with a comparatively low float, and though I haven't been able to glean the short ratio, it appears that a lot of investors are bearish on this stock and probably already had the same idea to short it. There is really no way to find out if a specific broker has shares in inventory available for shorting, short of (forgive the pun) checking directly with the broker." }, { "docid": "256349", "title": "", "text": "The stock market, as a whole, is extremely volatile. During any 3 year period, the market could go up or down. However, and this is the important point,the market as a whole has historically been a good long term investment. If you need the money in 5 years, then you want to put it in something less volatile (so there's less chance of losing it). If you need the money in 50 years, put it in the market; the massive growth over those 50 years will more than make up for any short term drops, and you will probably come out ahead. Once you get closer to retirement age, you want to take the money out of stocks and put it in something safer; essentially locking in your profit, and protecting yourself from the possibility of further loss. Something else to consider: everyone lost money in 2008. There were no safe investments (well, ok, there were a few... but not enough to talk about). Given that, why would you choose another investment over stocks? Taking a 50% loss after decades of 10% annual returns is still better than a 50% loss after decades of 5% growth (in fact, after 20 years of growth, it's still 250% better - and that ratio will only improve the longer you leave it in)." }, { "docid": "171784", "title": "", "text": "\"Depends on how far down the market is heading, how certain you are that it is going that way, when you think it will fall, and how risk-averse you are. By \"\"better\"\" I will assume you are trying to make the most money with this information that you can given your available capital. If you are very certain, the way that makes the most money for the least investment from the options you provided is a put. If you can borrow some money to buy even more puts, you will make even more. Use your knowledge of how far and when the market will fall to determine which put is optimal at today's prices. But remember that if the market stays flat or goes up you lose everything you put in and may owe extra to your creditor. A short position in a futures contract is also an easy way to get extreme leverage. The extremity of the leverage will depend on how much margin is required. Futures trade in large denominations, so think about how much you are able to put to risk. The inverse ETFs are less risky and offer less reward than the derivative contracts above. The levered one has twice the risk and something like twice the reward. You can buy those without a margin account in a regular cash brokerage, so they are easier in that respect and the transactions cost will likely be lower. Directly short selling an ETF or stock is another option that is reasonably accessible and only moderately risky. On par with the inverse ETFs.\"" }, { "docid": "10591", "title": "", "text": "\"Indexes are down during the summer time, and I don't think it has something to do with specific stocks. If you look at the index history you'll see that there's a price drop during the summer time. Google \"\"Sell in May and go away\"\". The BP was cheap at the time for a very particular reason. As another example of a similar speculation you can look at Citibank, which was less than $1 at its lowest, and within less than a year went to over $4 ( more than 400%). But, when it was less than $1 - it was very likely for C to go bankrupt, and it required a certain amount of willingness to loose to invest in it. Looking back, as with BP, it paid off well. But - that is looking back. So to address your question - there's no place where people tell you what will go up, because people who know (or think they know) will invest themselves, or buy lottery tickets. There's research, analysts, and \"\"frinds' suggestions\"\" which sometimes pay off (as in your example with BP), and sometimes don't. How much of it is noise - I personally don't think I can tell, until I can look back and say \"\"Damn, that dude was right about shorts on Google, it did go down 90% in 2012!\"\"\"" }, { "docid": "388362", "title": "", "text": "\"The other two answers seem basically correct, but I wanted to add on thing: While you can exercise an \"\"American style\"\" option at any time, it's almost never smart to do so before expiration. In your example, when the underlying stock reaches $110, you can theoretically make $2/share by exercising your option (buying 100 shares @ $108/share) and immediately selling those 100 shares back to the market at $110/share. This is all before commission. In more detail, you'll have these practical issues: You are going to have to pay commissions, which means you'll need a bigger spread to make this worthwhile. You and those who have already answered have you finger on this part, but I include it for completeness. (Even at expiration, if the difference between the last close price and the strike price is pretty close, some \"\"in-the-money\"\" options will be allowed to expire unexercised when the holders can't cover the closing commission costs.) The market value of the option contract itself should also go up as the price of the underlying stock goes up. Unless it's very close to expiration, the option contract should have some \"\"time value\"\" in its market price, so, if you want to close your position at this point, earlier then expiration, it will probably be better for you to sell the contract back to the market (for more money and only one commission) than to exercise and then close the stock position (for less money and two commissions). If you want to exercise and then flip the stock back as your exit strategy, you need to be aware of the settlement times. You probably are not going to instantly have those 100 shares of stock credited to your account, so you may not be able to sell them right away, which could leave you subject to some risk of the price changing. Alternatively, you could sell the stock short to lock in the price, but you'll have to be sure that your brokerage account is set up to allow that and understand how to do this.\"" }, { "docid": "404529", "title": "", "text": "\"I understand you make money by buying low and selling high. You can also make money by buying high and selling higher, short selling high and buying back low, short selling low and buying back even lower. An important technique followed by many technical traders and investors is to alway trade with the trend - so if the shares are trending up you go long (buy to open and sell to close); if the shares are trending down you go short (sell to open and buy to close). \"\"But even if the stock price goes up, why are we guaranteed that there is some demand for it?\"\" There is never any guarantees in investing or trading. The only guarantee in life is death, but that's a different subject. There is always some demand for a share or else the share price would be zero or it would never sell, i.e zero liquidity. There are many reasons why there could be demand for a rising share price - fundamental analysis could indicated that the shares are valued much higher than the current price; technical analysis could indicate that the trend will continue; greed could get the better of peoples' emotion where they think all my freinds are making money from this stock so I should buy it too (just to name a few). \"\"After all, it's more expensive now.\"\" What determines if a stock is expensive? As Joe mentioned, was Apple expensive at $100? People who bought it at $50 might think so, but people who bought at $600+ would think $100 is very cheap. On the other hand a penny stock may be expensive at $0.20. \"\"It would make sense if we can sell the stock back into the company for our share of the earnings, but why would other investors want it when the price has gone up?\"\" You don't sell your stocks back to the company for a share of the earnings (unless the company has a share-buy-back arrangement in place), you get a share of the earnings by getting the dividends the company distributes to shareholders. Other investor would want to buy the stock when the price has gone up because they think it will go up further and they can make some money out of it. Some of the reasons for this are explained above.\"" }, { "docid": "569303", "title": "", "text": "I see another way of looking at this that hasn't been addressed yet. By offering the discount, the company is attempting to change your behavior into doing something irrational, that benefits them at your expense. The company hopes for one (or more) of the following psychological effects to happen to you: The proper thing to do, if you have enough capital to prevent margin calls, it to short-sell the stock at the same instant the price is set, thus locking in the profit. Eventually you can take possession of the shares and deliver them to offset the short -- hopefully before you get a margin call from the stock dropping." }, { "docid": "45190", "title": "", "text": "\"A mutual fund could make two different kinds of distributions to you: Capital gains: When the fund liquidates positions that it holds, it may realize a gain if it sells the assets for a greater price than the fund purchased them for. As an example, for an index fund, assets may get liquidated if the underlying index changes in composition, thus requiring the manager to sell some stocks and purchase others. Mutual funds are required to distribute most of their income that they generate in this way back to its shareholders; many often do this near the end of the calendar year. When you receive the distribution, the gains will be categorized as either short-term (the asset was held for less than one year) or long-term (vice versa). Based upon the holding period, the gain is taxed differently. Currently in the United States, long-term capital gains are only taxed at 15%, regardless of your income tax bracket (you only pay the capital gains tax, not the income tax). Short-term capital gains are treated as ordinary income, so you will pay your (probably higher) tax rate on any cash that you are given by your mutual fund. You may also be subject to capital gains taxes when you decide to sell your holdings in the fund. Any profit that you made based on the difference between your purchase and sale price is treated as a capital gain. Based upon the period of time that you held the mutual fund shares, it is categorized as a short- or long-term gain and is taxed accordingly in the tax year that you sell the shares. Dividends: Many companies pay dividends to their stockholders as a way of returning a portion of their profits to their collective owners. When you invest in a mutual fund that owns dividend-paying stocks, the fund is the \"\"owner\"\" that receives the dividend payments. As with capital gains, mutual funds will redistribute these dividends to you periodically, often quarterly or annually. The main difference with dividends is that they are always taxed as ordinary income, no matter how long you (or the fund) have held the asset. I'm not aware of Texas state tax laws, so I can't comment on your other question.\"" }, { "docid": "239998", "title": "", "text": "Owning a stock via a fund and selling it short simultaneously should have the same net financial effect as not owning the stock. This should work both for your personal finances as well as the impact of (not) owning the shares has on the stock's price. To use an extreme example, suppose there are 4 million outstanding shares of Evil Oil Company. Suppose a group of concerned index fund investors owns 25% of the stock and sells short the same amount. They've borrowed someone else's 25% of the company and sold it to a third party. It should have the same effect as selling their own shares of the company, which they can't otherwise do. Now when 25% of the company's stock becomes available for purchase at market price, what happens to the stock? It falls, of course. Regarding how it affects your own finances, suppose the stock price rises and the investors have to return the shares to the lender. They buy 1 million shares at market price, pushing the stock price up, give them back, and then sell another million shares short, subsequently pushing the stock price back down. If enough people do this to effect the share price of a stock or asset class, the managers at the companies might be forced into behaving in a way that satisfies the investors. In your case, perhaps the company could issue a press release and fire the employee that tried to extort money from your wife's estate in order to win your investment business back. Okay, well maybe that's a stretch." }, { "docid": "133486", "title": "", "text": "\"Keep in mind that the Federal Reserve Chairman needs to be very careful with his use of words. Here's what he said: It is arguable that interest rates are too high, that they are being constrained by the fact that interest rates can't go below zero. We have an economy where demand falls far short of the capacity of the economy to produce. We have an economy where the amount of investment in durable goods spending is far less than the capacity of the economy to produce. That suggests that interest rates in some sense should be lower rather than higher. We can't make interest rates lower, of course. (They) only can go down to zero. And again I would argue that a healthy economy with good returns is the best way to get returns to savers. So what does that mean? When he says that \"\"we can't make interest rates lower\"\", that doesn't mean that it isn't possible. He's saying that our demand for goods is lower than our ability to produce them. Negative interest would actually make that problem worse -- if I know that things will cost less in a month, I'm not going to buy anything. The Fed is incentivizing spending by lowering the cost of capital to zero. By continuing this policy, they are eventually going to bring on inflation, which will reduce the value of the currency -- which gives people and companies that are sitting on money an dis-incentive to continue hoarding it.\"" }, { "docid": "218904", "title": "", "text": "Yes, 6% is a waste of money, because some other brokers such as IB offer margin rates below 2%. Also, to borrow money for even less than any broker's margin interest rate, one can do an EFP transaction. This involves simultaneously shorting a stock and buying the SSF for the same stock. When the futures contract expires, you take delivery of the underlying stock to automatically close out your short position. Until then, you've effectively borrowed cash for the cost of borrowing the stock, which is typically less than 0.5% interest for widely traded ones. You also pay for the slight difference in price between the stock and the future, which is typically equivalent to another 0.5% interest or less. The total often comes to less than 1% interest. The only risk with this transaction is that the stock could become hard to borrow at some point, so then you would have to pay higher interest on it temporarily or maybe even have to close out your short early. But it is extremely rare for large, high-volume stocks to become hard-to-borrow. The borrowing cost of SPY has spiked above 5% on only a handful of days in the last decade." }, { "docid": "4066", "title": "", "text": "Why do people buy them when they would be cheap to make for themselves? Convenience. While you could easily find some pictures and lay them out with a sentiment, buy some card stock, print in colour, trim it, and perhaps glue on some glitter or whatnot, and then find an envelope that fits it, it's likely to take you an hour or more to do so. And you'll invest far more than $6 on your printer and various inventories. I made cards for my kids- we had construction paper, glitter, coloured markers etc and there was no need for an envelope. But most people will find it quicker and simpler to buy one fully assembled. The cost of the online ones is weird I agree. Perhaps people are also not confident they can compose a good greeting? Why do stores stock $6 cards that they buy for $3 (retail markup is 50-100% and I'm sure it's closer to 100% for cards) when a different supplier might provide them for $2? Well, even if such a supplier existed, I'm sure the store would be happy to sell for $6 still (see: people buy them) so there would be no consumer impact. A store that sells cards for $5 isn't going to siphon customers from elsewhere because most of us just don't buy cards often enough for it to matter. Why does nobody become that supplier who will sell them cheaper? Selling stuff is more expensive than making stuff, and getting your product into retail stores is hard. Hard means time and time means money and all of that contributes more to the card price than the ink and paper do. That said, dollar stores sell cards, for a dollar typically, and people do buy them. I find they have less colours and the artwork is cruder. Perhaps you even get what you pay for when it comes to design, layout, printing etc." }, { "docid": "410404", "title": "", "text": "There are 2 primary ways to bet against a stock if you think it will decline. The first is to short sell shares of that stock the second is to buy put options (I would also add that selling naked call options would also be a bet against but I don't believe that is as common as the other 2 mentioned methods). The problem with short selling an IPO is that you first have to borrow the shares you are going to sell. Since the shares are privately held prior to the IPO that can be problematic. Even after the IPO you may have to wait a bit before shares become available to borrow. The problem with options (either buying puts or seeking naked calls) is similar. Options are traded on a different exchange than the stock and they have their own requirements that a stock must meet to have options traded. Both of these problems eventually correct themselves however, not in time for you to catch the initial fall you seem to be looking for." } ]

[ { "docid": "55901", "title": "", "text": "Am I eligible for the tax exemption if yes then under which section. Generally Personal loans are not eligible for tax exemption. Only housing loans from qualified institutions are eligible for tax deduction. As per the income tax act; The house should be in your name. The home loans taken from recognised institutions are fully qualified under section 24B and 80C. This means you can claim Interest exemption under 24B and Principal repayment under 80C. The Act also specifies that loan can be taken from friends/relatives for construction of property and will be eligible for Interest exemption under 24B only. The principal will not be eligible for exemption under 80C. Read the FAQ from Income Tax India. There has to be certificate showing how much interest was paid on the said loan. Further there should be records/receipts on how the money was spent. There is difference of opinion amongst CA. It is best you take a professional advise." } ]

[ { "docid": "160301", "title": "", "text": "It's going to depend entirely on your tax situation, its complexity, and your willingness/interest in dealing with tax filings. Personally I find that not only do I not enjoy dealing with figuring out my taxes, but I don't know even a fraction of the possible deductions available and all the clever ways to leverage them. Plus the tax code is changing constantly and staying on top of that is not something I'm ever going to attempt. I am of the philosophy that it is my duty to pay only the absolute minimum tax legally required, and to utilize every possible exemption, deduction, credit, etc. that is available to me. Plus my business activities are a bit on the non-traditional side so it requires some unorthodox thinking at times. For me, a trained professional is the only way to go. What it costs me, I way more than make up in savings on my tax bill. I also go out of my way to never get a refund because if I get one, it just means I gave the government a free loan. The last time I computed my own taxes (used TurboTax if memory serves) was I think in the late 90s." }, { "docid": "89662", "title": "", "text": "I assume that you are a citizen of India, and are what Indian law calls a NRI (NonResident Indian) and thus entitled to operate an NRE (NonResident External) account in India. You can deposit US dollars into the NRE account, but the money is converted to Indian Rupees (INR) and held as INR. You can withdraw the money and bring it back to the US as US dollars, but the INR will be converted to US$ at the exchange rate applicable on the date of the transaction. With the recent decline of the Indian Rupee against the US dollar, many NRE accounts lost a lot of their value. You can deposit any amount of money in your NRE account. Some banks may limit the amount you can send in one business day, but if 250 times that amount seriously limits the amount of money you want to send each year, you should not be asking here; there are enough expensive lawyers, bankers and tax advisors who will gladly guide you to a satisfactory solution. There is no limitation on the total amount that you can have in your NRE account. The earnings (interest paid) on the sum in your NRE account is not taxable income to you in India but you may still need to file an income tax return in India to get a refund of the tax withheld by the bank (TDS) and sent to the tax authorities. The bank should not withhold tax on the earnings in an NRE account but it did happen to me (in the past). While the interest paid on your NRE account is not taxable in India, it is taxable income to you on your US tax returns (both Federal and State) and you must declare it on your tax return(s) even though the bank will not issue a 1099-INT form to you. Be aware also about the reporting requirements for foreign accounts (FBAR, TD F90-22.1 etc). Lots of people ignored this requirement in the past, but are more diligent these days after the IRS got a truckload of information about accounts in foreign banks and went after people charging them big penalties for not filing these forms for ever so many years. There was a huge ruckus in the Indian communities in the US about how the IRS was unfairly targeting simple folks instead of auditing the rich! But, if the total value of the accounts did not exceed $10K at any time of the year, these forms do not need to be filed. It seems, though, that you will not fall under this exemption since you are planning on having considerably larger sums in your NRE account. So be sure and follow the rules." }, { "docid": "87998", "title": "", "text": "TaxTips.ca's Federal Tax Rates page has basic information about income tax in Canada, and it states: Canadian federal income tax is calculated based on taxable income, then non-refundable tax credits are deducted to determine the net amount payable. For 2009, every taxpayer can earn taxable income of $10,320 ($9,600 in 2008) before paying any federal tax. [...] (emphasis mine) Of course there are also provincial taxes to consider, but generally each province has a basic personal exemption amount. TaxTips.ca's page for Ontario rates lists $8,881 as the basic personal exemption in Ontario, for 2009. Find other provinces here." }, { "docid": "113632", "title": "", "text": "First, you need to see if you actually qualify as a dependent under IRS rules; in short: While there may be exceptions to the cohabitation rule, I am not sure what those could be. The takeaway is that if your parent is wishing to claim you as a dependent, they must be responsible for supporting the majority of your living expenses (e.g. food and shelter). If this is the case, then the next question is to look at how the impact of the exemptions play out. In your situation, I would guess that your mother is correct: your taxable income is likely to be so low that if you do not take an exemption for yourself, you probably would still have zero or minimal tax liability; but if you mother claims you as a dependent, she will be able to take a deduction. In the case of your grants and loans, the loans should not be taxable income since these need to be repaid (presumably, with future earnings). Federal grants may be taxable--basically, the portion of the grant that is used solely for paying educational expenses toward a specific degree (tuition and books) is non-taxable, but the remainder may be subject to tax. As for tax credits, you would need to see how much you would get and how they would apply to you. The bottom line is, there are too many variables to say for certain what the best approach would be, so both your and your mother's returns must be prepared under each scenario (you as her dependent, versus you claiming a personal exemption)." }, { "docid": "210889", "title": "", "text": "Another person, not a shareholder or director, will be treated as when a bank loans you money. You are loaning out money and you are sort of getting interest income out of it or some other benefit, which needs to be put down in you company's annual return. Full source on the HMRC website. But for a shareholder or director is different matter. Check the HMRC source for sure and check with your accountant, if you have one. If you owe your company money You or your company may have to pay tax if you take a director’s loan. Your personal and company tax responsibilities depend on how the loan is settled. You also need to check if you have extra tax responsibilities if: If the loan was more than £10,000 (£5,000 in 2013-14) If you’re a shareholder and director and you owe your company more than £10,000 (£5,000 in 2013 to 2014) at any time in the year, your company must: You must report the loan on your personal Self Assessment tax return. You may have to pay tax on the loan at the official rate of interest. If you paid interest below the official rate If you’re a shareholder and director, your company must: You must report the interest on your personal Self Assessment tax return. You may have to pay tax on the difference between the official rate and the rate you paid." }, { "docid": "146277", "title": "", "text": "\"Is this legal? Why not? But you might have trouble deducting losses on your taxes, especially if you sell to someone related to you in some way (which is indeed what you're doing). See the added portion below regarding dealing with \"\"related person\"\" (which a sibling is). The state of Maryland has a transfer/recordation tax of 1.5% for each, the buyer and seller. Would this be computed on the appraised or sale value? You should check with the State. In California property taxes are assessed based on sale value, but if the sale value is bogus the assessors have the right to recalculate. Since you're selling to family, the assessors will likely to intervene and set a more close to \"\"fair market\"\" value on the transaction, but again - check the local law. Will this pose any problem if the buyer needs financing? Likely, banks will be suspicious.Since you're giving a discount to your sibling, it will likely not cause a problem for financing. If it was an unrelated person getting such a discount, it would likely to have raised some questions. Would I be able to deduct a capital loss on my tax return? As I said - it may be a problem. If the transaction is between related people - likely not. Otherwise - not sure. Check with a professional tax adviser (EA or CPA licensed in Maryland). You mentioned in the comment that the buyer is a sibling. IRS Publication 544 has a list of what is considered \"\"related person\"\", and that includes siblings. So the short answer is NO, you will not be able to deduct the loss. The tax treatment is not trivial in this case, and I suggest to have a professional tax adviser guide you on how to proceed. Here's the definition of \"\"related person\"\" from the IRS pub. 544: Members of a family, including only brothers, sisters, half-brothers, half-sisters, spouse, ancestors (parents, grandparents, etc.), and lineal descendants (children, grandchildren, etc.). An individual and a corporation if the individual directly or indirectly owns more than 50% in value of the outstanding stock of the corporation. Two corporations that are members of the same controlled group as defined in section 267(f) of the Internal Revenue Code. A trust fiduciary and a corporation if the trust or the grantor of the trust directly or indirectly owns more than 50% in value of the outstanding stock of the corporation. A grantor and fiduciary, and the fiduciary and beneficiary, of any trust. Fiduciaries of two different trusts, and the fiduciary and beneficiary of two different trusts, if the same person is the grantor of both trusts. A tax-exempt educational or charitable organization and a person who directly or indirectly controls the organization, or a member of that person's family. A corporation and a partnership if the same persons own more than 50% in value of the outstanding stock of the corporation and more than 50% of the capital interest or profits interest in the partnership. Two S corporations if the same persons own more than 50% in value of the outstanding stock of each corporation. Two corporations, one of which is an S corporation, if the same persons own more than 50% in value of the outstanding stock of each corporation. An executor and a beneficiary of an estate unless the sale or exchange is in satisfaction of a pecuniary bequest. Two partnerships if the same persons directly or indirectly own more than 50% of the capital interests or profits interests in both partnerships. A person and a partnership if the person directly or indirectly owns more than 50% of the capital interest or profits interest in the partnership.\"" }, { "docid": "179891", "title": "", "text": "Full payment is always better than auto-loan if you are prudent with finances. I.E if you take a loan, you are factoring the EMI hence your savings will remain as is. However if you manage well, you can buy the car with cash and at the same time put aside the notional EMI as savings and investments. The other factor to consider is what return your cash is giving. If this more than auto-loan interest rate post taxes, you should opt for loan. For example if auto-loan is 10% and you are getting a return of 15% after taxes on investment then loan is better. Company Car lease depends on terms. More often you get break on taxes on the EMI component. But you have to buy at the end of lease period and re-register the car in your name, so there is additional cost. Some companies give lease at very favourable rates. Plus if you leave the job lease has to be broken and it becomes more expensive." }, { "docid": "30610", "title": "", "text": "I'm not familiar with US tax law in particular, but the general principle around the world tends to be that interest-free or low-interest loans are taxed as gifts of the difference between a commercial interest charge and the actual interest charged. You could also forgive ($13,000 - waived interest) of the loan each year. Also, remember that there's a lifetime exemption (covering inheritance as well) of $1,000,000 which can be used for any amounts over the $13,000." }, { "docid": "300367", "title": "", "text": "Tax-exempt interest (and dividends attributable to tax-exempt interest) is required to be reported on Form 1040 line 8b (or the analogous line of Form 1040A). While it is not directly taxed, it does come into play in the calculation of taxable income and various credits. For example, tax-exempt interest is counted when determining the portion of Social Security benefits to be included in gross income." }, { "docid": "193842", "title": "", "text": "You would need to pay tax on the 10% gain. Was this money loaned from your NRE account? Is there paperwork to show that there was this loan given? If yes then it would be easy to get this back into NRE account. Once in NRE account you can move this back to US without any issue. If not, then you can get this into NRO account. From NRO account you would need to consult a CA to do some paperwork [essentially certifying that you have paid all taxes due] so that funds can be remitted outside. Edit: Looks like you have completed all formalities. A credit to NRE Account can only happen from funds outside of India. However a credit from India into NRE account can happen under some circumstances, like Loan give and received back. You would need a CA in India to help you complete the formalities. The tax is due in India as this was due to gain in India. As you are US resident for tax purposes, and US taxes global income, this is taxable in US as well. You can claim relief in US to the extent of taxes paid in India. India and US have DTAA." }, { "docid": "406723", "title": "", "text": "Do I get a write off for paying student loans? Maybe. See https://www.irs.gov/publications/p970/ch04.html Generally, personal interest you pay, other than certain mortgage interest, isn't deductible on your tax return. However, if your modified adjusted gross income (MAGI) is less than $80,000 ($160,000 if filing a joint return) there is a special deduction allowed for paying interest on a student loan (also known as an education loan) used for higher education. For most taxpayers, MAGI is the adjusted gross income as figured on their federal income tax return before subtracting any deduction for student loan interest. This deduction can reduce the amount of your income subject to tax by up to $2,500. Read the whole document to be sure, but that's the basics. You'll have to fill out a 1040 or 1040A to claim a student loan deduction. It won't be on the 1040EZ. You do not have to itemize though. What kinds of write-offs and credits are available for someone who is single and lives in an apartment with two roommates? As a practical matter, in 2016 you'll get the standard deduction for someone who is single ($6300) and the personal exemption ($4050). It's extremely unlikely that you'll be able to deduct more by itemizing. Most people who itemize are taking a mortgage interest deduction. Major medical bills are another possibility, but they have to be more than 10% of your adjusted gross income (it's one of the lines on your tax return). Assuming you rent and are reasonably healthy, you are unlikely to have enough to itemize. The most likely additional deduction would be the one for an IRA (Individual Retirement Account). Although you might be better off doing a Roth anyway (no tax deduction). If you are self-employed or making more than $100,000 a year, there are additional issues. But most people aren't. If you filled out a W-4 and will get a W-2 back, you aren't self-employed. Hopefully you have a rough idea of your annual income. The first $9275 over your deductions will pay 10%. After that, up to $37,650 you pay 15%. The 2016 link above has a link (PDF) to the full table if you need more than that. Note that that is the first $48,000 in income with your $10,350 in deductions." }, { "docid": "254514", "title": "", "text": "Your phrasing of the question isn't very clear, but I believe you're asking: Does our total household income classify us as tax exempt? Or, can we avoid filing taxes if we make $22,500 or less per year? The answer is no. Your tax liability will be very low, and if you have dependents or other deductible expenses (mortgage interest, 401K contributions, etc.), you're likely looking at a close to $0 liability. You still have to file your taxes, and you can't claim exempt on your W-4. Even if you did qualify to be tax exempt, you still have to file taxes." }, { "docid": "32784", "title": "", "text": "From personal experience: Loan Impact It does impact your ability to take out other loans (to an extent) Your first investment property is going to go against your debt to income levels, so if you take out a loan, you've essentially decreased the amount you can borrow before you hit a lender's debt to income ceiling. Two things about that: 1) I'm assuming you have a primary mortgage - if that's the case they will factor what you are already paying for your primary house + any car loans + any student loans, etc. Once you've successfully taken out a mortgage for your investment property, you're probably close to your debt to income ceiling for any other loans. 2) There is usually a 2 year time period where this will matter the most. Once you've rented out this property for 2 years, most financial institutions will consider a percentage of the rent as income. At this point you can then take on more debt if you choose. Other (Possibly Negative) Impacts and Considerations Maintenance Costs Renovations Turnovers Taxes and Insurance Downpayments and interest Income tax Advertising costs Property Management costs Closing costs and Legal fees Vacancies HOA fees Other (Possibly Positive) Impacts and Considerations Passive Income as long as the numbers are right and you have a good property manager Tax deductions (And depreciation) Rent has low correlation to the market Other investment alternatives: Stocks Reits (not directly comparable to investment properties) Long story short- can be a hassle but if the numbers are right, it can be a good investment. There's a series of articles further explaining these above listed components in detail." }, { "docid": "68275", "title": "", "text": "\"It looks like the HST will be in effect in Ontario on July 1st, 2010. As to whether it will replace GST with HST for all services, it looks like some sectors may get special treatment: Ontario may exempt mutual funds from HST (National Post). But it doesn't look final yet. However, I would suggest that most service-based businesses in Ontario need to prepare to start charging 13% HST instead of 5% GST. It will be the law. On the \"\"goods\"\" side of the new harmonized tax, it looks like certain goods will still be exempt from the provincial portion. Here's a quote from the Ontario Budget 2009 News Release: \"\"Books, diapers, children's clothing and footwear, children's car seats and car booster seats, and feminine hygiene products would be exempt from the provincial portion of the single sales tax.\"\" Here's some additional information on the introduction of the HST, from the province: General Transitional Rules for Ontario HST. And finally, another interesting article from the Ottawa Business Journal: Preparing For Ontario Sales Tax Harmonization – It's Not Too Early UPDATE: I just received an insert from Canada Revenue Agency included with my quarterly GST statement. Titled \"\"Harmonization of the Sales Tax in Ontario and British Columbia\"\", it contains a section titled \"\"What this means for you\"\" (as in, you the business owner). Here's an excerpt: [...] All Ontario and B.C. registrants would need to update their accounting and point-of-sale systems to accomodate the change in rate and new point-of-sale rebates for the implementation date of July 1, 2010. The harmonization of the sales tax in Ontario and B.C. may affect the filing requirements of registrants outside of these two provinces. Registrants will report their HST according to their current GST filing frequency. As a result of the harmonization, there will be changes to the rebates for housing and public service bodies. More information will be released as it becomes available. Visit the CRA web site often, at www.cra.gc.ca/harmonization, for the most up-to-date information on the harmonization of the sales tax and how it may affect you. [...] Last, I found some very detailed information on the HST here: NOTICE247 - Harmonized Sales Tax for Ontario and British Columbia - Questions and Answers on General Transitional Rules for Personal Property and Services. Chances are anything you want to know is in there.\"" }, { "docid": "233254", "title": "", "text": "If you are still Indian Citizen for Tax purposes, then all your Global Income is taxable [There are certain exemption if you are in certain professions]. So even if you transfer or not transfer the funds to India, it is taxable in India. If you are getting a per day allowance, its exempt, this has to be looked more as expense reimbursed. If you are saving from per day allowance, well whatever you have save is to be declared as additional income and pay tax accordingly. If you are NRI for tax purposes, there is no limit on the amount of funds that you can send to India. Note that it would help to transfer funds into a separate NRI/NRO account to ensure traceability and ease of taxation." }, { "docid": "276295", "title": "", "text": "\"There's no homestead property tax exemption in TN. According to the TN comptroller site: Exemptions Exemptions are available for religious, charitable, scientific, and nonprofit educational uses, governmental property, and cemeteries. Most nongovernmental exemptions require a one-time application and approval by the State Board of Equalization (615/401-7883) and there is a May 20 application deadline. There is no \"\"homestead\"\" exemption, but low income elderly and disabled persons and disabled veterans may qualify for a rebate of taxes on a specified portion of the value of property used as their residence. Business inventories held for sale or exchange by merchants subject to the business gross receipts tax, are not assessable. Farm and residential tangible personal property are not assessable.\"" }, { "docid": "16068", "title": "", "text": "I have not opened any NRE/NRO account before coming to Finland. This is in violation of Foreign Exchange Management Act. Please get this regularized ASAP. All your savings account need to be converted to NRO. Shall I transfer funds from abroad to both NRE and NRO account or I can transfer only to NRE account in India? You can transfer to NRE or NRO. It is advisable to transfer into NRE as funds from here can be repatriated out of India without any paperwork. Funds from NRO account need paperwork to move out of India. I am a regular tax payer in abroad. The Funds which i'll transfer in future will attract any additional tax in India? As your status is Non Resident and the income is during that period, there is no tax applicable in India on this. Few Mutual Fund SIPs (monthly basis) are linked with my existing saving account in india. Do these SIPs will stop when the savings account will turn into NRO account? Shall I need to submit any documents for KYC compliance? If yes, to whom I should submit these? is there any possibility to submit it Online? Check your Bank / Mutual Fund company. Couple of FDs are also opened online and linked with this existing saving account. Do the maturity amount(s) subject to TDS or any tax implication such as 30.9% as this account will be turned into NRO account till that time and NRO account attracts this higher tax percentage. These are subject to taxes in India. This will be as per standard tax brackets. Which account (NRE/NRO) is better for paying EMIs for Home Loan, SIPs of Mutual Funds, utility bills in India, transfer money to relative's account etc Home Loan would be better from NRE account as if you sell the house, the EMI paid can be credited into NRE account and you can transfer this out of India without much paperwork. Same for SIP's. For other it doesn't really matter as it is an expense. Is there any charge to transfer fund from NRE to NRO account if both account maintain in same Bank same branch. Generally No. Check with your bank. Which Bank account's (NRE/NRO) debit/ATM card should be used in Abroad in case of emergency. Check with your bank. NRE funds are more easy. NRO there will be limits and reporting. Do my other savings accounts, maintained in different Banks, also need to be converted into NRO account? If yes, how can it be done from Abroad? Yes. ASAP. Quite a few leading banks allow you to do this if you are not present. Check you bank for guidance." }, { "docid": "518624", "title": "", "text": "\"The other answer has mentioned \"\"factual resident\"\", and you have raised the existence of a U.S./Canada tax treaty in your comment, and provided a link to a page about determining residency. I'd like to highlight part of the first link: You are a factual resident of Canada for tax purposes if you keep significant residential ties in Canada while living or travelling outside the country. The term factual resident means that, although you left Canada, you are still considered to be a resident of Canada for income tax purposes. Notes If you have established ties in a country that Canada has a tax treaty with and you are considered to be a resident of that country, but you are otherwise a factual resident of Canada, meaning you maintain significant residential ties with Canada, you may be considered a deemed non-resident of Canada for tax purposes. [...] I'll emphasize that \"\"considered to be a resident of Canada for income tax purposes\"\" means you do need to file Canadian income tax returns. The Notes section does indicate the potential treaty exemption that you mentioned, but it is only a potential exemption. Note the emphasis (theirs, not mine) on the word \"\"may\"\" in the last paragraph above. Please don't assume \"\"may\"\" is necessarily favorable with respect to your situation. The other side of the \"\"may\"\" coin is \"\"may not\"\". The Determining your residency status page you mentioned in your comment says this: If you want the Canada Revenue Agency's opinion on your residency status, complete either Form NR74, Determination of Residency Status (Entering Canada) or Form NR73, Determination of Residency Status (Leaving Canada), whichever applies, and send it to the International and Ottawa Tax Services Office. To get the most accurate opinion, provide as many details as possible on your form. So, given your ties to Canada, I would suggest that until and unless you have obtained an opinion from the Canada Revenue Agency on your tax status, you would be making a potentially unsafe assumption if you yourself elect not to file your Canadian income tax returns based on your own determination. You could end up liable for penalties and interest if you don't file while you are outside of Canada. Tax residency in Canada is not a simple topic. For instances, let's have a look at S5-F1-C1, Determining an Individual’s Residence Status. It's a long page, but here's one interesting piece: 1.44 The Courts have stated that holders of a United States Permanent Residence Card (otherwise referred to as a Green Card) are considered to be resident in the United States for purposes of paragraph 1 of the Residence article of the Canada-U.S. Tax Convention. For further information, see the Federal Court of Appeal's comments in Allchin v R, 2004 FCA 206, 2004 DTC 6468. [...] ... whereas you are in the U.S. on a TN visa, intended to be temporary. So you wouldn't be exempt just on the basis of your visa and the existence of the treaty. The CRA would look at other circumstances. Consider the \"\"Centre of vital interests test\"\": Centre of vital interests test [...] “If the individual has a permanent home in both Contracting States, it is necessary to look at the facts in order to ascertain with which of the two States his personal and economic relations are closer. Thus, regard will be had to his family and social relations, his occupations, his political, cultural or other activities, his place of business, the place from which he administers his property, etc. The circumstances must be examined as a whole, but it is nevertheless obvious that considerations based on the personal acts of the individual must receive special attention. If a person who has a home in one State sets up a second in the other State while retaining the first, the fact that he retains the first in the environment where he has always lived, where he has worked, and where he has his family and possessions, can, together with other elements, go to demonstrate that he has retained his centre of vital interests in the first State.” [emphasis on last sentence is mine] Anyway, I'm acquainted with somebody who left Canada for a few years to work abroad. They assumed that living in the other country for that length of time (>2 years) meant they were non-resident here and so did not have to file. Unfortunately, upon returning to Canada, the CRA deemed them to have been resident all that time based on significant ties maintained, and they subsequently owed many thousands of dollars in back taxes, penalties, and interest. If it were me in a similar situation, I would err on the side of caution and continue to file Canadian income taxes until I got a determination I could count on from the people that make the rules.\"" }, { "docid": "386173", "title": "", "text": "It isn't just ETFs, you have normal mutual funds in India which invest internationally. This could be convenient if you don't already have a depository account and a stockbroker. Here's a list of such funds, along with some performance data: Value Research - Equity: International: Long-term Performance. However, you should also be aware that in India, domestic equity and equity fund investing is tax-free in the long-term (longer than one year), but this exemption doesn't apply to international investments. Ref: Invest Around the World." } ]

[ { "docid": "220682", "title": "", "text": "Saving money for the future is a good thing. Whether spending those savings on a business venture makes sense, will depend on a few factors, including: (1) How much money you need that business to make [ie: will you be quitting your job and relying on the business for your sole income? Or will this just be a hobby you make some pocket change from?] (2) How much the money the business needs up front [some businesses, like simple web design consulting, might have effectively $0 in cash startup costs, where starting a franchise restaurant might cost you $500k-$1M on day 1] (3) How risky it is [the general stat is that something like 50% of all new businesses fail in their first year, and I think for restaurants that number is often given as 75%+] But if you don't have a business idea yet, and save for one in the future but never get that 'perfect idea', the good news is that you've saved a bunch of money that you can instead use for retirement, or whatever other financial goals you have. So it's not the saving for a new business that is risky, it's the spending. Part of good personal financial management is making financial goals, tracking your progress to those goals, and changing them as needed. In a simpler case, many people want to own their own home - this is a common financial goal, just like early retirement, or starting your own business, or paying for your kids' college education. All those goals are helped by saving money, so your job as someone mindful of personal finances, is to prioritize those goals in accordance to what is important for you." } ]

[ { "docid": "155208", "title": "", "text": "\"The financial services industry, and specifically retail banking, has not always been on the bleeding edge of technological innovation. It usually isn't, and that can be a good thing insofar as avoiding disasters, but your general sentiment is shared by many people. Google \"\"payment startups\"\". Despite all this, the current system works well. Software had become adept at identifying and mitigating transactions that appear fraudulent, and even if an account is wiped clean, the account holder is not responsible for the missing funds, the bank is. If there is ever an epidemic, banks will drive the change to a different system, not consumers. Specific to your proposal, the deposit only account seems to violate all three trust-related issues you bring up. Additionally, linking a bank account can fulfill some know your customer (KYC) requirements, which help reduce fraud and may be required by law. It gives organizations, especially financial services ones like PayPal, a more tangible link to your actual person.\"" }, { "docid": "386305", "title": "", "text": "Thank you for your service. My first suggestion since your car is a planned for the near future is keep that amount in savings and just pay cash. There are plenty of attractive offers to entice you to finance your vehicle but there really is no compelling reason to do it considering the savings you have. Second I would keep an additional portion of savings as a rainy day emergency fund. How much is based mostly on what you feel comfortable with. The number of possible emergencies that can come up is limited and your expenses are limited which is normal given your age. This fund might be for something such as emergency travel for a sick family member, cover a deductible for an auto accident, whatever unforseen event might occur (hence the name emergency fund). What investments you are comfortable with will be determined by risk tolerance. While in the military individual stocks that are aggressive risky investments may not be a good idea because of the extra attention they require and you can't really babysit a portfolio while deployed but there are many good low or no cost mutual funds or ETFs that you could get into. I would look into setting up a recurring purchase with a set dollar amount monthly so you will continue to accumulate whatever option you are investing in regularly even if you are deployed. Which fund or ETF you pick will depend on your goals and risk tolerance but you could very easily pick several for diversity. Good luck and thank you again for your service." }, { "docid": "585887", "title": "", "text": "A startup is a great place to work if it looks like it's going to have a future and YOU ARE ONE OF THE FOUNDERS. Otherwise? A startup is a good way to spend a good chunk of a decade working very long weeks, only to get shoved into a back room or laid off once they reach a certain size. Maybe if you're lucky you'll manage to stick around and have a bigger paycheck than most of your newly-hired peers. Maybe you'll even make most of what your new boss(es) that have been there a fifth as long as you and never pulled those 110 hour workweeks make. Of course, it's quite possible that simply working a second job during the time you were pulling mad hours and not getting OT for it would've made you just as much. On the other hand, if you're talking about your own startup? Sure, go for it. If it all works out, those extra hours will be well compensated in the future." }, { "docid": "88311", "title": "", "text": "\"That depends, really. Generally speaking, though - Roth IRAs are THE PLACE for Stock-Market/Mutual-Fund investing. All the off the wall (or, not so off the wall) things like Real Estate investments, or buying up gold, or whatever other ideas you hear from people - they may be good or bad or whatnot. But your Roth IRA is maybe not the best place for that sort of thing. The whole philosophy behind IRAs is to deliberately set aside money for the future. Anything reasonable will work for this. Explore interesting investment ideas with today's money, not tomorrow's money. That being said - at your age I would go for the riskier options within what's available. If I were in your situation (and I have been, recently), I would lean toward low-fee mutual funds classified as \"\"Growth\"\" funds. My own personal opinion (THIS IS NOT ADVICE) is that Small Cap International funds are the place to be for young folks. That's a generalized opinion based on my feel for the world, but I don't think I'm personally competent to start making specific stock picks. So, mutual funds makes sense to me in that I can select the fund that generally aligns with my sense of things, and assume that their managers will make reasonably sound decisions within that framework. Of course that assumption has to be backed up with reputation of the specific MF company and the comparative performance of the fund relative to other funds in the same sector. As to the generalized question (how else can you work toward financial stability and independence), outside of your Roth IRA: find ways to boost your earning potential over time, and buy a house before the next bubble (within the next 18 months, I'm GUESSING).\"" }, { "docid": "370976", "title": "", "text": "Everything in life is a combination of luck and skill. Startups are no different. The risks are higher and most sensible people know and understand that. You know why we worship the successes? Because against all odds, those startups stood up to your salaried buddies who work for faceless large corporations and have tons of people and kicked their asses. At some point, they deserve it. You see startups as gambling, others see it as betting on yourself. Especially founding or joining an early stage startup. It's also taking on huge responsibility. In a mega-corp your failures and shortcomings will be covered and almost certainly won't tank the company. Your creativity probably won't flourish and their is an incentive to do just well enough. Why should you work your ass off for a company that you're not invested in other than a paycheck? Startups aren't for everyone. Hell, startups probably aren't for most people. But there are some people, those select few, who simply can't imagine not working for themselves, creating things, tinkering, trying to change the world. It's not even gambling to them, it's a way of life." }, { "docid": "519390", "title": "", "text": "\"Wouldn't this be part of your investing strategy to know what price is considered a \"\"good\"\" price for the stock? If you are going to invest in company ABC, shouldn't you have some idea of whether the stock price of $30, $60, or $100 is the bargain price you want? I'd consider this part of the due diligence if you are picking individual stocks. Mutual funds can be a bit different in automatically doing fractional shares and not quite as easy to analyze as a company's financials in a sense. I'm more concerned with the fact that you don't seem to have a good idea of what the price is that you are willing to buy the stock so that you take advantage of the volatility of the market. ETFs would be similar to mutual funds in some ways though I'd probably consider the question that may be worth considering here is how much do you want to optimize the price you pay versus adding $x to your position each time. I'd probably consider estimating a ballpark and then setting the limit price somewhere within that. I wouldn't necessarily set it to the maximum price you'd be willing to pay unless you are trying to ride a \"\"hot\"\" ETF using some kind of momentum strategy. The downside of a momentum strategy is that it can take a while to work out the kinks and I don't use one though I do remember a columnist from MSN Money that did that kind of trading regularly.\"" }, { "docid": "290385", "title": "", "text": "\"Answers: 1. Is this a good idea? Is it really risky? What are the pros and cons? Yes, it is a bad idea. I think, with all the talk about employer matches and tax rates at retirement vs. now, that you miss the forest for the trees. It's the taxes on those retirement investments over the course of 40 years that really matter. Example: Imagine $833 per month ($10k per year) invested in XYZ fund, for 40 years (when you retire). The fund happens to make 10% per year over that time, and you're taxed at 28%. How much would you have at retirement? 2. Is it a bad idea to hold both long term savings and retirement in the same investment vehicle, especially one pegged to the US stock market? Yes. Keep your retirement separate, and untouchable. It's supposed to be there for when you're old and unable to work. Co-mingling it with other funds will induce you to spend it (\"\"I really need it for that house! I can always pay more into it later!\"\"). It also can create a false sense of security (\"\"look at how much I've got! I got that new car covered...\"\"). So, send 10% into whatever retirement account you've got, and forget about it. Save for other goals separately. 3. Is buying SPY a \"\"set it and forget it\"\" sort of deal, or would I need to rebalance, selling some of SPY and reinvesting in a safer vehicle like bonds over time? For a retirement account, yes, you would. That's the advantage of target date retirement funds like the one in your 401k. They handle that, and you don't have to worry about it. Think about it: do you know how to \"\"age\"\" your account, and what to age it into, and by how much every year? No offense, but your next question is what an ETF is! 4. I don't know ANYTHING about ETFs. Things to consider/know/read? Start here: http://www.investopedia.com/terms/e/etf.asp 5. My company plan is \"\"retirement goal\"\" focused, which, according to Fidelity, means that the asset allocation becomes more conservative over time and switches to an \"\"income fund\"\" after the retirement target date (2050). Would I need to rebalance over time if holding SPY? Answered in #3. 6. I'm pretty sure that contributing pretax to 401k is a good idea because I won't be in the 28% tax bracket when I retire. How are the benefits of investing in SPY outweigh paying taxes up front, or do they not? Partially answered in #1. Note that it's that 4 decades of tax-free growth that's the big dog for winning your retirement. Company matches (if you get one) are just a bonus, and the fact that contributions are tax free is a cherry on top. 7. Please comment on anything else you think I am missing I think what you're missing is that winning at personal finance is easy, and winning at personal finance is hard\"" }, { "docid": "417450", "title": "", "text": "Personal finance startup BillGuard has raised $10 million in second-round financing, and it’s using it to expand its service that helps protect accounts from fraudulent activity, the company said Tuesday. BillGuard protects users by registering their credit and debit cards and keeping an eye out for questionable and fraudulent charges. The company uses a crowdsourced approach to identifying unauthorized charges, by not only providing its own detection but also incorporating users’ billing complaints to track and analyze payments. BillGuard’s big second round of funding comes from a powerhouse group, including Khosla Ventures, Eric Schmidt’s Innovation Endeavors and Peter Thiel’s Founders Fund. “At Khosla Ventures we love entrepreneurs who dare to tackle large problems with disruptive, bottom-up methods,” said Vinod Khosla, founding partner of Khosla Ventures, in a statement. At present, BillGuard is free to use for anyone who wants to sign up. So how is it going to make money? The company is talking to large banks that could act as partners and incorporate BillGuard on a per-customer basis for a small fee. BillGuard is also exploring the idea of a merchant certification program that would let merchants have access to some its data, and follow up with customers who end up with fraudulent or questionable charges. New York-based BillGuard previously raised $3 million in its first round of funding from Bessemer Venture Partners and IA Ventures. BillGuard made its public debut on stage at the TechCrunch Disrupt conference in May 2011." }, { "docid": "571418", "title": "", "text": "\"I, too, have worked in both small and large companies; I started with the small ones and am currently at a big one. I agree with all of your points about the upside of working for small companies. Some of the upsides I find at the big company where I work are: - there are people around you that know more than you do. There is a huge opportunity to learn from them, which is a lot harder when you're the lone expert at a 5-person company (you rely on whatever you can scrape up from the internet, etc.). Most people learn faster with good mentoring. - there is money to spend on things that you need. No raised eyebrows from the CEO when you say that you need a $20 lamp for your desk, or even more serious issues like adequate hardware for what you need to do, getting tools you need, etc. (Less of an issue at a VC-funded startup, until the money starts running low.) - there are entire teams that help with things like documentation, customer support, sales, tools, and other things, which frees me up to do what I'm good at, which is making software. I remember reading some advice a while ago that still rings true to me, which is that there isn't a single \"\"right\"\" place to work (small/large, etc.); the right thing to do is get experience with a variety of different environments - in the end you'll be stronger for it.\"" }, { "docid": "284351", "title": "", "text": "People with failed businesses also often put in crazy long hours and submit themselves to huge financial risk. That's what you have to do just to start a business. It doesn't predict success. Why do businesses fail? I can now mostly predict if a business will fail because lots of people have ridiculous ideas or absolutely no way to make money (99% of businesses at startup events will not be around in a year). Luck doesn't predict the success of a business, but neither does hard work. I started 3 businesses in the past 2 years and they are all making money. I also put a ton of research into each one and carefully planned out a business strategy. Many people starting businesses either don't have the ability to do this or just don't put the time into it because they are afraid that their awesome new idea won't be successful." }, { "docid": "536990", "title": "", "text": "\"Traditional brokers There are tons of players in this market, especially in USA. You have traditional brokers, brokers tied to your bank and a bunch of startups. The easiest is probably a broker tied to your bank, because you probably don't have to wait to fund your brokerage account and can start trading immediately. Often the older/traditional brokers don't have very intuitive interfaces, it's the startups who do a better job at this. But honestly it doesn't really matter, because you can use reporting services that are different from the services you use to execute your trades. Meaning that you only use the interface of your broker to execute trades (buy or sell), and use third party services to monitor your holdings. Monitoring services: Google Finance, Yahoo Finance, Sigfig, Morningstar,... are services allowing you to monitor your holdings. But you can't execute trades with them. Start-ups: Then there are a bunch of startups that offer investment services besides the traditional brokers. Start-up > Robinhood The most ambitious one is Robinhood, which offers the same service as a traditional broker, but completely free (most of the traditional brokers charge a flat fee and/or percentage when buying/selling hodlings) and with an intuitive interface. They're mobile first, but announced they will be launching their service on the web soon. Start-up > Acorns Another popular, mobile-first start-up is Acorns. They offer a lazy-investing service which rounds your everyday purchases and uses the change to invest. It's great when investing is not on your mind, but you still want to invest without realizing it. Start-ups > Robo-advisors Robo-advisors auto-invest your money across a bunch of funds picked based on your risk profile. Because the robo-advisers are fairly new, they often have the most intuitive interfaces. These robo-advisors often don't allow you to pick individual holdings, so these services are best when you want to passively invest. Meaning you don't want to look at it very often, and let them do the investing for you. There are tons of robo-advisor start-ups: Betterment, Wealthfront, Personal Capital, Sigfig, FutureAdvisor,... Also bigger parties jumped on this trend with their offerings: Schwab Intelligent Portfolios, Ally Managed Portfolio, Vanguard Personal Advisor, etc. Summary: It's fun to pick individual stocks, but if you start out it can be overwhelming. Robinhood is probably the best start, they have reduced functionality, but gets you going with an attractive interface. But soon you'll realize it's extremely hard to beat the market. Meaning that hand-picking stocks statistically gives you a worse return than just buying into the general stock market (like S&P500). So you can decide to just buy one fund with a traditional broker that covers the general stock market. Or you can decide to try out one of the many robo-advisors. They haven't been around that long, so it's hard to tell how effective these are and whether they beat the market. If you're young, and you believe in start-ups (who often try to challenge the traditional players), try out one of the robo-advisors. If you want to play a bit and are addicted to your smartphone, try out Robinhood. If you are addicted to your phone, but don't want to check up on your investments all the time, go for Acorns. Of course you can combine all these. Lastly, there are tons of cryptocurrencies which might give you a large return. Tons of startups offer intuitive interfaces to trade cryptocurrencies like Coinbase, Gemini, Kraken. But beware, there is a lot of risk involved in trading cryptocurrencies, it's completely unregulated etc. But definitely check them out. Oh, and you can also invest by giving out loans through LendingClub, Prosper etc. Who can you trust? Above gives you an overview of your options intermingled with some reasoning. But regarding your question \"\"who can I trust\"\" in terms of advice, it's up to yourself. Most traditional broker services don't give you any advice at all, you're on your own. Robo-advisors don't give you advice either, but let their proprietary algorithm do the job. Are these reliable? Nobody can tell, they haven't been around long enough, and they need to go through a bear market (a crash) to see how they respond during rough times. Some robo-advisors offer you personal consultancy (I believe Sigfig and PersonalCapital) does this (limited to a few hours per year). But obviously they'll try to promote their robo-advisor services.\"" }, { "docid": "57795", "title": "", "text": "\"&gt; she makes some very good points to the whole \"\"Startup\"\" mentality. The 'fight' here is for responsibility. Ahoyhere is challenging people to be responsible for themselves, and to 'take the blame' if they have nothing to show for it when or if their vc startup employer goes bust (or, gets wildly successful and they don't share in the success.) People don't want that. They want to tell themselves they're justified for being bitter after being screwed. They want to know that 'hard work always pays off', which is obviously false.\"" }, { "docid": "412037", "title": "", "text": "By the by, I'm 27. I've been living on my own since I was 15. I've worked at startup-style companies with a rich founder and no investment (Limewire), worked for funded startups companies as a consultant (ex: Ning), personally know the founders and/or very early stage employees of many famous startups (Gowalla, Twitter, GitHub, Shopify, etc), and I've also consulted for companies like Bear Stearns, Pepsico, Ford… But you could already tell all that from my picture, I'm sure." }, { "docid": "408334", "title": "", "text": "A sure-fire way to make money? Hell no. There are tonnes of scams and money grabs out there, not to mention the fact that most ICOs are based on projects that are going nowhere. Having said that, there are many ICOs each month that will do very well in the future. The best thing to do is to shortlist a number of projects you like the sound of and then sit down and research each of them. Some of the key things to look out for, aside from whether you think the idea is a good one are: The team. Do they have a proven track record? Are they reputable? Is what they claim provable? Google team member names and check to see if they have a legit Linkedin profile. The Whitepaper. Is it clearly worded without spelling and grammar mistakes? Does it have a well defined roadmap with provable achievements to-date? The ICO format. How much are they looking to raise and is it a realistic figure? Are unsold tokens burnt? Is there a maximum contribution limit per investor? What does the competition look like? If they are first to market then this will make the startup way more attractive. The above are probably the most important things to consider though there are many other things to investigate. I have written a fairly comprehensive guide to all the things I look out for when analyzing the investability of an ICO. You might want to check it out before firing out your Bitcoin and ETH into dubious projects." }, { "docid": "7208", "title": "", "text": "Some other suggestions: Index-tracking mutual funds. These have the same exposure as ETFs, but may have different costs; for example, my investment manager (in the UK) charges a transaction fee on ETFs, but not funds, but caps platform fees on ETFs and not funds! Target date funds. If you are saving for a particular date (often retirement, but could also be buying a house, kids going to college, mid-life crisis motorbike purchase, a luxury cruise to see an eclipse, etc), these will automatically rebalance the investment from risk-tolerant (ie equities) to risk-averse (ie fixed income) as the date approaches. You can get reasonably low fees from Vanguard, and i imagine others. Income funds/ETFs, focusing on stocks which are expected to pay a good dividend. The idea is that a consistent dividend helps smooth out volatility in prices, giving you a more consistent return. Historically, that worked pretty well, but given fees and the current low yields, it might not be smart right now. That said Vanguard Equity Income costs 0.17%, and i think yields 2.73%, which isn't bad." }, { "docid": "188497", "title": "", "text": "The idea of an index is that it is representative of the market (or a specific market segment) as a whole, so it will move as the market does. Thus, past performance is not really relevant, unless you want to bank on relative differences between different countries' economies. But that's not the point. By far the most important aspect when choosing index funds is the ongoing cost, usually expressed as Total Expense Ratio (TER), which tells you how much of your investment will be eaten up by trading fees and to pay the funds' operating costs (and profits). This is where index funds beat traditional actively managed funds - it should be below 0.5% The next question is how buying and selling the funds works and what costs it incurs. Do you have to open a dedicated account or can you use a brokerage account at your bank? Is there an account management fee? Do you have to buy the funds at a markup (can you get a discount on it)? Are there flat trading fees? Is there a minimum investment? What lot sizes are possible? Can you set up a monthly payment plan? Can you automatically reinvest dividends/coupons? Then of course you have to decide which index, i.e. which market you want to buy into. My answer in the other question apparently didn't make it clear, but I was talking only about stock indices. You should generally stick to broad, established indices like the MSCI World, S&P 500, Euro Stoxx, or in Australia the All Ordinaries. Among those, it makes some sense to just choose your home country's main index, because that eliminates currency risk and is also often cheaper. Alternatively, you might want to use the opportunity to diversify internationally so that if your country's economy tanks, you won't lose your job and see your investment take a dive. Finally, you should of course choose a well-established, reputable issuer. But this isn't really a business for startups (neither shady nor disruptively consumer-friendly) anyway." }, { "docid": "502560", "title": "", "text": "\"Crowdfunding can be a legitimate means of funding very small startups. It is an innovative, but obviously risky, method of raising small amounts of money. As such it is now regulated by the SEC under \"\"Regulation Crowdfunding\"\" They have published guides for these types of business startups to help them with required disclosures and reporting requirements: https://www.sec.gov/info/smallbus/secg/rccomplianceguide-051316.htm Here's the introduction to the relevant regulatory authority of the SEC: Under the Securities Act of 1933, the offer and sale of securities must be registered unless an exemption from registration is available. Title III of the Jumpstart Our Business Startups (JOBS) Act of 2012 added Securities Act Section 4(a)(6) that provides an exemption from registration for certain crowdfunding transactions.[2] In 2015, the Commission adopted Regulation Crowdfunding to implement the requirements of Title III.[3] Under the rules, eligible companies will be allowed to raise capital using Regulation Crowdfunding starting May 16, 2016. It is obviously a new form of investment but you should be able to get historical data on the SEC's real time Edgar reporting system once there is some history. This is a search for all Form C's filed as of 12/2/16\"" }, { "docid": "132777", "title": "", "text": "Take another job. From a personal finance perspective this is the wrong reason to dip into a retirement account. You will lose so much ground towards actually retiring. Sure you won't be taxed, but you will be missing so much opportunity where that money won't be working for your retirement. The off-topic answer to take to the start-ups stackexchange site is: don't quit your day job until your business plan is written out and you have an idea of where to get your startup capital." }, { "docid": "92006", "title": "", "text": "\"Hi Amy, thank you for your article. Got to say however that I tend to disagree. I've been through the venture rabbit hole a number of times. Each one was an experience I'll never forget and wouldn't trade for anything. I learned so much more about how the business world actually works (or...doesn't) than I would have at some more established company. That said, I am also quite sour on the whole VC thing and at my most recent startup we've foregone outside investors and bootstrapped things from the get go. It was probably the best decision we made because it allowed us to be flexible in our strategy and not always beholden to the \"\"quick exit\"\" that VC money always drives. However, I realize that not all businesses can be like ours. We started off as a consulting company and moved into build products as our cash reserve grew. If we had wanted to do something big, or fast, or perhaps manufacture something, we would never have had the capital to get it going. Those types of business *need* outside funding, and generally it's only VCs who are willing to take the 1 in 20 bet that startups usually entail. For that, I'm glad that VCs are there, and think they provide a very valuable service and part of our economy. I just don't ever want to have to deal with them again...\"" } ]

[ { "docid": "429555", "title": "", "text": "\"I am asking because startups are super risky and 99% of the times you fail and lose the money. First of all, that 99% number is exaggerated. Only 96% of companies fail within ten years. But starting your own business is not a pure game of chance. It mostly depends on how good your business idea is and if you have the necessary skills and resources to succeed with it. Yes, there is luck involved, but a smart businessman can calculate the risks and possible rewards and then decide if a certain business idea is a good or a bad gamble. Also, a business failing does not necessarily mean that the business owner failed. A good business owner knows when to fold. A business might be profitable at first, but market circumstances might change at any time making it unprofitable. A smart business owner notices that early, liquidates the unprofitable business as quickly as possible and refocuses on their next business idea. Only those who can not let go of an unprofitable business or take too long to notice that it is failing are those who get dragged down with it. So should you have a \"\"startup fund\"\"? Saving your disposable income is never a mistake. If you never end up starting a business, it will eventually serve you as a retirement fund. So yes, you should save a part of your money each month. But should you start a company with it? That depends on whether or not you have a business idea where you know you will succeed. How do you know that? When you answered yes to all of these questions, then you might want to consider it.\"" } ]

[ { "docid": "453051", "title": "", "text": "How much should my down payment be? Ideally 20% of the purchase price because with 20% of the purchase price, you don't have to pay a costly private mortgage insurance (PMI). If you don't have 20% down and come across a good property to purchase, it is still a good idea to go forward with purchasing with what you are comfortable with, because renting long term is generally never a good idea if you want to build wealth and become financially independent. How much should I keep in my emergency fund? People say 3-12 months of living expenses. Keep in mind though, in most cases, if you lose your job, you are entitled to unemployment benefits from the government. How long should my mortgage be? 30 year amortization is the best. You can always opt to pay more each month. But having that leverage with a 30 year loan can allow you to invest your savings in other opportunities, which can yield more than mortgage interest. Best of luck!" }, { "docid": "381104", "title": "", "text": "Since you already have twice your target in that emergency fund, putting that overage to work is a good idea. The impression that I get is that you'd still like to stay on the safe side. What you're looking for is a Balanced Fund. In a balanced fund the managers invest in both stocks and bonds (and cash). Since you have that diversification between those two asset classes, their returns tend to be much less volatile than other funds. Also, because of their intended audience and the traditions from that class of funds' long history, they tend to invest somewhat more conservatively in both asset classes. There are two general types of balanced funds: Conservative Allocation funds and Moderate Allocation funds. Conservative allocation funds invest in more fixed income than equity (the classic mix is 60% bonds, 40% stocks). Moderate allocation funds invest in more equity than fixed income (classic mix: 40% bonds, 60% stocks). A good pair of funds that are similar but exemplify the difference between conservative allocation and moderate allocation are Vanguard's Wellesley Income Fund (VWINX) for the former and Vanguard's Wellington Fund (VWELX) for the latter. (Disclaimer: though both funds are broadly considered excellent, this is not a recommendation.) Good luck sorting this out!" }, { "docid": "132777", "title": "", "text": "Take another job. From a personal finance perspective this is the wrong reason to dip into a retirement account. You will lose so much ground towards actually retiring. Sure you won't be taxed, but you will be missing so much opportunity where that money won't be working for your retirement. The off-topic answer to take to the start-ups stackexchange site is: don't quit your day job until your business plan is written out and you have an idea of where to get your startup capital." }, { "docid": "94348", "title": "", "text": "&gt; The single payer health care makes it so much easier to be a contractor or to create a startup. You have no idea how much I want a Single Payer for that exact reason. Also that it would allow everyone to have access to healthcare. Single payer would not only reduce healthcare burdens on employers but control the cost of healthcare. I hope we have a state by state implementation of Single Payer." }, { "docid": "219563", "title": "", "text": "I'm normally not a fan of partitioning investment money into buckets but your case may be the clearest case for it I've seen in awhile. Your income and saving is good and you have two clearly defined goals of retirement saving and saving for a house each with very different time frames ~30 years and 3-5 years respectively. For medium term money, like saving for a house, just building up cash is not actually a bad idea. This minimizes the chance that a market crash will happen at the same time you need to withdraw the money. However, given you have the means to take more risk a generally smarter scheme would be to invest much of the money in a broad liquid bond funds with a somewhat lower percentage in stocks and then reduce the amount of stock each year as you get closer even moving some into cash. This gives reasonable positive expected return while lowering the risk of having to sell during a crisis as the time to purchase gets shorter and shorter. The retirement money should be invested for the long term as usual. A majority in low-fee index stock funds/etfs is the standard advice for good reason." }, { "docid": "2376", "title": "", "text": "It depends on whether you want a career as a fund manager/ analyst or if you want to be an investor/ trader. A fund manager will have many constraints that a private investor doesn’t have, as they are managing other people’s money. If they do invest their own money as well they usually would invest it differently from how they invest the fund's money. Many would just get someone else to invest their money for them, just as a surgeon would get another surgeon to operate on a family member. My suggestion to you is to find a job you like doing and build up your savings. Whilst you are building up your savings read some books. You said you don’t know much about the financial markets, then learn about them. Get yourself a working knowledge about both fundamental and technical analysis. Work out which method of analysis (if not both) suits you best and you would like to know more about. As you read you will get a better idea if you prefer to be a long term investor or a short term trader or somewhere in-between or a combination of various methods. Now you will start to get an idea of what type of books and areas of analysis you would like to concentrate on. Once you have a better idea of what you would like to do and have gained some knowledge, then you can develop your investment/trading plan and start paper trading. Once you are happy with you plan and your paper trading you can start trading with a small account balance (not more than $10,000 and preferably under $5,000). No matter how well you did with paper trading you will always do worse with real money at first due to your emotions being in it now. So always start off small. If you want to become good at something it takes time and a lot of hard work. You can’t go from knowing nothing to making a million dollars per year without putting in the hard yards first." }, { "docid": "214499", "title": "", "text": "I am a huge fan of jim Cramer and while you may not get CNBC in Australia you can prolly catch jim cramers podcasts If you have an iPod or iPhone which really will help your financial literacy a bit. Here's my advice . Set up a IRA or tax advantaged accounts if they exist in Australia (sorry I only know usa markets really well). Then you can pick investments to go in there or in a different investment account. I am a huge fan of index funds in particular Etf index funds because they are still very liquid. I prefer the free or no commission funds by Charles scwabb but vanguard is also very good or maybe even better. A few great funds are the vanguard total stock market fund (it invests in every company in the world) and any fund that mirrors the s&p 500 or the Russell 2000 midcap. Another good idea just to make room to save money is make a budget with your wife. I like the other post about planning in reverse . Setting up a budget to see your expenses and then make automatic pay dedications that go into savings or different accounts for savings." }, { "docid": "445078", "title": "", "text": "\"First you need a niche, edgy idea - like a coin that \"\"will be used\"\" for autonomous car taxi's, a crypto for indie game dev startups, an ico for UFC ppv fights .. or some crap Then you make a fancy website, hire a few techies to copy the code from another coin, get into a few conferences, claim that Vitalik (the Eth founder) has backed your coin and voila - you have an license to print money\"" }, { "docid": "284351", "title": "", "text": "People with failed businesses also often put in crazy long hours and submit themselves to huge financial risk. That's what you have to do just to start a business. It doesn't predict success. Why do businesses fail? I can now mostly predict if a business will fail because lots of people have ridiculous ideas or absolutely no way to make money (99% of businesses at startup events will not be around in a year). Luck doesn't predict the success of a business, but neither does hard work. I started 3 businesses in the past 2 years and they are all making money. I also put a ton of research into each one and carefully planned out a business strategy. Many people starting businesses either don't have the ability to do this or just don't put the time into it because they are afraid that their awesome new idea won't be successful." }, { "docid": "557820", "title": "", "text": "My plan is that one day I can become free of the modern day monetary burdens that most adults carry with them and I can enjoy a short life without these troubles on my mind. If your objective is to achieve financial independence, and to be able to retire early from the workforce, that's a path that has been explored before. So there's plenty of sources that you might want to check. The good news is that you don't need to be an expert on security analysis or go through dozens of text books to invest wisely and enjoy the market returns. This is the Bogleheads philosophy. It's widely accepted by people in academia, and thoroughly tested. Look into it further if you want to see the rationale behind, but, to sum it up: It doesn't matter how expert you are. The idea of beating the market, that an index fund tracks, is about 'outsmarting' the rest of investors. That would be difficult, even if it was a matter of skill, but when it comes to predicting random events we're all equally clueless. *Total Expense Ratio: It gives an idea of how expensive is a given fund in terms of fees. Actively managed funds have higher TER than indexed ones. This doesn't mean there aren't index funds with, unexplainable, high TER out there." }, { "docid": "290385", "title": "", "text": "\"Answers: 1. Is this a good idea? Is it really risky? What are the pros and cons? Yes, it is a bad idea. I think, with all the talk about employer matches and tax rates at retirement vs. now, that you miss the forest for the trees. It's the taxes on those retirement investments over the course of 40 years that really matter. Example: Imagine $833 per month ($10k per year) invested in XYZ fund, for 40 years (when you retire). The fund happens to make 10% per year over that time, and you're taxed at 28%. How much would you have at retirement? 2. Is it a bad idea to hold both long term savings and retirement in the same investment vehicle, especially one pegged to the US stock market? Yes. Keep your retirement separate, and untouchable. It's supposed to be there for when you're old and unable to work. Co-mingling it with other funds will induce you to spend it (\"\"I really need it for that house! I can always pay more into it later!\"\"). It also can create a false sense of security (\"\"look at how much I've got! I got that new car covered...\"\"). So, send 10% into whatever retirement account you've got, and forget about it. Save for other goals separately. 3. Is buying SPY a \"\"set it and forget it\"\" sort of deal, or would I need to rebalance, selling some of SPY and reinvesting in a safer vehicle like bonds over time? For a retirement account, yes, you would. That's the advantage of target date retirement funds like the one in your 401k. They handle that, and you don't have to worry about it. Think about it: do you know how to \"\"age\"\" your account, and what to age it into, and by how much every year? No offense, but your next question is what an ETF is! 4. I don't know ANYTHING about ETFs. Things to consider/know/read? Start here: http://www.investopedia.com/terms/e/etf.asp 5. My company plan is \"\"retirement goal\"\" focused, which, according to Fidelity, means that the asset allocation becomes more conservative over time and switches to an \"\"income fund\"\" after the retirement target date (2050). Would I need to rebalance over time if holding SPY? Answered in #3. 6. I'm pretty sure that contributing pretax to 401k is a good idea because I won't be in the 28% tax bracket when I retire. How are the benefits of investing in SPY outweigh paying taxes up front, or do they not? Partially answered in #1. Note that it's that 4 decades of tax-free growth that's the big dog for winning your retirement. Company matches (if you get one) are just a bonus, and the fact that contributions are tax free is a cherry on top. 7. Please comment on anything else you think I am missing I think what you're missing is that winning at personal finance is easy, and winning at personal finance is hard\"" }, { "docid": "312359", "title": "", "text": "There are many considerations before deciding on the best place for your funds: How liquid do you need the funds to be? If this is for an emergency fund I would keep at least some in an account that you have instant access to, What is your risk (volatility) tolerance? Would you be OK with the value dropping by as much as 30% in a year knowing that over time you'll probably earn 8-12% on it? If not, then equity funds or other stock investments are probably not the best move for you. Do you need the funds now or are they for long-term (retirement) savings? Are you eligible to fund an IRA? That would defer your taxes until you withdraw the funds from the account, but there are age restrictions that you must heed to avoid penalties. Are CDs a good idea? They do pay decent interest, but in return for that you lock up your funds for a set period of time. All that to say that there are many facets to determining the best place for your funds. If you provide more specifics you can get a more specific answer." }, { "docid": "39566", "title": "", "text": "If you look at history, it shows that the more people predict corrections the less was the chance they came. That doesn't prove it stays so, though. 2017 is not any different than other years in the future: Independent of this, with less than ten years remaining until you need to draw from your money, it is a good idea to move away from high risk (and high gain); you will not have enough time to recover if it goes awry. There are different approaches, but you should slowly and continuously migrate your capital to less risky investments. Pick some good days and move 10% or 20% each time to low-risk, so that towards the end of the remaining time 90 or 100% are low or zero risk investments. Many investment banks and retirement funds offer dedicated funds for that, they are called 'Retirement 2020' or 'Retirement 2030'; they do exactly this 'slow and continuous moving over' for you; just pick the right one." }, { "docid": "92006", "title": "", "text": "\"Hi Amy, thank you for your article. Got to say however that I tend to disagree. I've been through the venture rabbit hole a number of times. Each one was an experience I'll never forget and wouldn't trade for anything. I learned so much more about how the business world actually works (or...doesn't) than I would have at some more established company. That said, I am also quite sour on the whole VC thing and at my most recent startup we've foregone outside investors and bootstrapped things from the get go. It was probably the best decision we made because it allowed us to be flexible in our strategy and not always beholden to the \"\"quick exit\"\" that VC money always drives. However, I realize that not all businesses can be like ours. We started off as a consulting company and moved into build products as our cash reserve grew. If we had wanted to do something big, or fast, or perhaps manufacture something, we would never have had the capital to get it going. Those types of business *need* outside funding, and generally it's only VCs who are willing to take the 1 in 20 bet that startups usually entail. For that, I'm glad that VCs are there, and think they provide a very valuable service and part of our economy. I just don't ever want to have to deal with them again...\"" }, { "docid": "160859", "title": "", "text": "\"I don't have disdain for startups, I have disdain for charlatans. And I feel sad for people who believe that they really have a chance with their social network for dogs / ideal roommate to-do app / tip calculator / new marketplace to revolutionize how x and y find each other / etc -- a belief fostered by the totally dysfunctional startup tabloid media. And I'm pissed watching people who piss away years of their life on \"\"great ideas\"\" which could never in a million years be a self-sustaining business, and then shrug it away as if that \"\"failure\"\" couldn't have been spotted ahead of time, a mile and years away. They wouldn't have thought that would ever be more than a fun hobby or a nice little daydream if it weren't for the tabloids. As for something \"\"more likely\"\" it's quite simple -- people need to decide if they want to \"\"grow big or go home,\"\" or if they want to create a business. A business creates value and charges for things. That is what I mean by \"\"more likely.\"\" The suits in the boardroom at Wal-Mart don't sit around wringing their hands wondering what their business model is, wondering how they can \"\"monetize.\"\"\"" }, { "docid": "513281", "title": "", "text": "\"First, let me say that $1000 is not that much of amount to invest in stocks. You need to remember that each transaction (buy/sell) has fees, which vary between $4-$40 (depending on the broker, you mentioned Scottrade - they charge $7 per transaction for stocks and about twice as much for some mutual funds). Consider this: you invest $1000, you gain $100. You'll pay $15 in fees just to buy/sell, that's 1.5% expense ratio. If you invest in more than 1 stock - multiply your fees. To avoid that you can look into mutual funds. Different brokers offer different funds for free, and almost all of them carry many of the rest for a fee. When looking into funds, you can find their expense ratio and compare. Remember that a fund with 1% expense ratio diversifies and invests in many stocks, while for you 1.5% expense ratio is for investing in a single stock. Is it a good idea to invest only in US or diversify worldwide? You can invest in the US, but in funds that diversify worldwide or across industries. Generally it is a good idea to diversify. I am 28. Should I be a conservative investor or take some risks? Depends on how bad of a shape will you be if you lose all your principle. What online brokerage service is the best? I have heard a lot about Scotttrade but want to be sure before I start. It seems to be the least expensive and most user-friendly to me. \"\"Best\"\" is a problematic term. Scottrade is OK, E*Trade is OK, you can try Sharebuilder, Ameritrade, there are several \"\"discount\"\" online brokers and plenty of on-line reviews and comparisons amongst them. What is a margin account and how would it affect my investing? From what I understand it comes into play when an investor borrows money from the broker. Do I need to use it at all as I won't be investing on a big scale yet. You understand right. There are rules to use margin accounts, and with the amount you have I'd advise against them even if you get approved. Read through the brokers' FAQ's on their requirement. Should I keep adding money on a monthly basis to my brokerage account to give me more money to invest or keep it at a certain amount for an extended period of time? Sharebuilder has a mechanism to purchase monthly at discounted prices. But be careful, they give you discounted prices to buy, but not to sell. You may end up with a lot of positions, and the discounts you've gotten to buy will cause you spend much more on selling. Generally, averaging (investing monthly) is a good way to save and mitigate some risks, but the risks are still there. This is good only for long term savings. How should my breakdown my investments in terms of bonds vs stocks? Depends on your vulnerability and risk thresholds.\"" }, { "docid": "88311", "title": "", "text": "\"That depends, really. Generally speaking, though - Roth IRAs are THE PLACE for Stock-Market/Mutual-Fund investing. All the off the wall (or, not so off the wall) things like Real Estate investments, or buying up gold, or whatever other ideas you hear from people - they may be good or bad or whatnot. But your Roth IRA is maybe not the best place for that sort of thing. The whole philosophy behind IRAs is to deliberately set aside money for the future. Anything reasonable will work for this. Explore interesting investment ideas with today's money, not tomorrow's money. That being said - at your age I would go for the riskier options within what's available. If I were in your situation (and I have been, recently), I would lean toward low-fee mutual funds classified as \"\"Growth\"\" funds. My own personal opinion (THIS IS NOT ADVICE) is that Small Cap International funds are the place to be for young folks. That's a generalized opinion based on my feel for the world, but I don't think I'm personally competent to start making specific stock picks. So, mutual funds makes sense to me in that I can select the fund that generally aligns with my sense of things, and assume that their managers will make reasonably sound decisions within that framework. Of course that assumption has to be backed up with reputation of the specific MF company and the comparative performance of the fund relative to other funds in the same sector. As to the generalized question (how else can you work toward financial stability and independence), outside of your Roth IRA: find ways to boost your earning potential over time, and buy a house before the next bubble (within the next 18 months, I'm GUESSING).\"" }, { "docid": "549654", "title": "", "text": "Overall I think it sounds like it's worth it. It's hard to find that high of a rate on a checking account these days. It looks like you're looking at this bank, and I can see they have a few more requirements that seem a little tedious: If you don't do these things every month, then you lose the great interest rate. If you can think of an easy way to jump through these hoops and not forget, then it's probably worth it. For example, if you routinely eat out for lunch or buy a morning coffee, you can use that card to pay for it. Set yourself a recurring reminder in your calendar or smartphone to remind you to login to the online banking site. Ultimately, since this is an emergency fund, it's a good idea to keep it nice and liquid in a checking account. You're not likely going to find many other options that will give you a better (and safe) return and still keep your funds available for when you need them. In summary, it sounds like a good idea to me so long as you think you can reliably jump through their hoops." }, { "docid": "461130", "title": "", "text": "There are a LOT of variables at play here, so with the info you've provided we can't give you an exact answer. Generally speaking, employee options at a startup are valued by a 409a valuation (http://en.wikipedia.org/wiki/Internal_Revenue_Code_section_409A) once a year or more often. But it's entirely possible that the company split, or took a round of funding that reduced their valuation, or any other number of things. We'd need a good bit more information (which you may or may not have) to really answer the question." } ]

[ { "docid": "327903", "title": "", "text": "You can only claim an input tax credit if tax was actually collected by the seller, irrespective of whether it should have been or not. You need to contact the seller to request an invoice that shows the GST/HST, if any, as well as the seller's GST/HST number, which is required to be printed on invoices. If the seller is not including GST/HST in the prices indicated on Kickstarter, I would like to know how they get away with that!" } ]

[ { "docid": "591704", "title": "", "text": "\"simplicity and roi are often at odds. the simplest plan that also supports a reasonable investment return would have 3 accounts: if you want to get better returns on your investments, things can get much more complicated. here are some optional accounts to consider: besides the mechanics of money flowing between accounts, a budget helps you understand and control your spending. while there are many methods for this (e.g. envelopes of cash, separate accounts for various types of expenses), the simplest might be using mint.com. just be sure to put all your spending on a credit or debit card, and you can see your spending by category when you log into mint. it can take a bit to get it set up, and your bank needs to be compatible, but it can give you a really good picture of where your money is going. once you know that, you can start making decisions like \"\"i should spend less on coffee\"\", or \"\"i should go to the zoo more\"\", based on how much things cost vs how much you enjoy them. if you feel like your spending is out of control, then you can set yourself hard limits on certain kinds of spending, but usually just watching and influencing your own choices is enough. notes: if you have a spouse or partner, you should each maintain your own separate accounts. there are many reasons for this including simplicity and roi, besides the obvious. if you feel you must have a joint account, be sure to clearly define how it should be used (e.g. only for paying the utilities) and funded (x$ per month each). particularly with your house, do not do joint ownership. one of you should be a renter and the other a landlord. some of these statements assume you are in the usa. on a personal note, i have about 20 credit cards, 2 checking accounts, 2 ira's, 2 brokerage accounts, and 3 401k's. but i consider myself a personal finance hobbyist, and spend an absurd amount of time chasing financial deals and tax breaks.\"" }, { "docid": "295153", "title": "", "text": "\"Keep in mind that all of the information below assumes: That being said, here are some examples of national tax laws relating to barter transactions. Obviously this isn't an exhaustive list, but based on my grossly non-representative sample, I think it's fairly safe to assume that barter transactions are more likely taxable than not. You're referring to a barter system; in the United States, the IRS is very specific about this (see the section titled Bartering). Bartering is an exchange of property or services. The fair market value of goods and services exchanged is fully taxable and must be included on Form 1040 in the income of both parties. The IRS also provides more details: Bartering occurs when you exchange goods or services without exchanging money. An example of bartering is a plumber doing repair work for a dentist in exchange for dental services. You must include in gross income in the year of receipt the fair market value of goods and services received in exchange for goods or services you provide or may provide under the bartering arrangement. Generally, you report this income on Form 1040, Schedule C (PDF), Profit or Loss from Business or Form 1040, Schedule C-EZ (PDF), Net Profit from Business. If you failed to report this income, correct your return by filing a Form 1040X (PDF). Refer to Topic 308 for amended return information. So yes, the net value of bartered goods or services is most likely taxable. According to the Australian Tax Office: Barter transactions are assessable and deductible for income tax purposes to the same extent as other cash or credit transactions. Her Majesty's Revenue and Customs states that: If you supply services or goods (new or second-hand) and receive other goods or services in payment, there are two separate supplies: You must account for VAT, and so must your customer if they're VAT-registered. The VAT treatment is the same as for part-exchanges. You must both account for VAT on the amounts you would each have paid for the goods or services if there had been no barter and they had been paid for with money. Searching the website of the Federal Tax Service for the Russian/Cryllic word for barter (бартер) doesn't yield any results, but that might be because even between Google Translate and the rest of the internet, I don't speak Russian. That being said, I did manage to find this (translated from the first full paragraph of the Russian, beginning with \"\"Налог на доходы...\"\": The tax on personal income is paid by citizens of the Russian Federation with all types of income received by them in the calendar year, either in cash or in kind. Since bartering would probably qualify as an in kind transaction, it would likely be taxable. The South African Revenue Service includes barter transactions in the supply of goods taxed under the VAT. The term “supply” is defined very broadly and includes all forms of supply and any derivative of the term, irrespective of where the supply is effected. The term includes performance in terms of a sale, rental agreement, instalment credit agreement or barter transaction. Look for section 3.6, Supply and Taxable Supply, found on p17 of the current version of the linked document.\"" }, { "docid": "209838", "title": "", "text": "The short answer is that you would want to use the net inflow or net outflow, aka profit or loss. In my experience, you've got a couple different uses for IRR and that may be driving the confusion. Pretty much the same formula, but just coming at it from different angles. Thinking about a stock or mutual fund investment, you could project a scenario with an up-front investment (net outflow) in the first period and then positive returns (dividends, then final sale proceeds, each a net inflow) in subsequent periods. This is a model that more closely follows some of the logic you laid out. Thinking about a business project or investment, you tend to see more complicated and less smooth cashflows. For example, you may have a large up-front capital expenditure in the first period, then have net profit (revenue less ongoing maintenance expense), then another large capital outlay, and so on. In both cases you would want to base your analysis on the net inflow or net outflow in each period. It just depends on the complexity of the cashflows trend as to whether you see a straightforward example (initial payment, then ongoing net inflows), or a less straightforward example with both inflows and outflows. One other thing to note - you would only want to include those costs that are applicable to the project. So you would not want to include the cost of overhead that would exist even if you did not undertake the project." }, { "docid": "194017", "title": "", "text": "To get the factors you want, start with a complete amortization calculator and a tax deduction calculator, filling in values for your down payment, purchase price, tax rates, and mortgage rate. If you are talking about a specific property, you should be able to get taxes for the current year, and perhaps using historical values estimate taxes going out. Some calculators will include PMI (which you should avoid like the plague in an actual purchase). Given some preliminary data, you can calculate your insurance. So once you have your PITI (principal, interest, tax, and insurance) monthly payment and tax deduction, you can calculate how much you spend a month on the house minus the deduction. To estimate maintenance costs, you could either figure out about what you'd need to replace in the given time you plan to stay put and use a rough estimate on what it is. You can also use some rough estimates like this (1% of the property value yearly!) or this (moving the number up to a whopping 2%). Don't forget closing costs as a buyer and seller. You can find estimates for these as well, and they are a function of the purchase price (usually around 2%). So to figure out how much it costs you to live in a house for X months, you can do So your total cost is Total Return Is: You can adjust that total return for inflation using this calculator to get your total return adjusted for inflation. If projecting into the future, you can try a formula found here. To figure out the return on your investment, use So to figure out the total return adjusted you need for a given ROI, find" }, { "docid": "523158", "title": "", "text": "You can either borrow money... credit card, line of credit, re-finance your home, home equity line of credit, loan, mortgage, etc. Or you have other invest in your company as equity. They will contribute $X to get Y% of your company and get Z% of the profits. Note amount of profits does not necessarily have to equate to percentage owned. This makes sense if they are a passive investor, where they just come up with the money and you do all the work. Also voting rights in a company does not have to equate to percentage owned either. You can also have a combination of equity and debt. If you have investors, you would need to figure out whether the investor will personally guarantee the debt of your company - recourse vs non-recourse. If they have more risk, they will want more of a return. One last way to do it is crowdfunding, similar to what people do on Kickstarter. Supporters/customers come up with the money, then you deliver the product. Consulting practices do something similar with the concept of retainers. Best of luck." }, { "docid": "38357", "title": "", "text": "Here are the events, trade fairs, and Expos which take place in August 2017 in Vietnam. Let's watch and keep up with the business pace. _________________________________________________________________ TRADE FAIR &amp; EXPO* is a service package designed for companies who come to Vietnam to attend Fair and Expo to promote their products as well as look for customers. These are the services we offer our customers: 1. Event Registration and Booth Setup 2. Sales Supporters and Interpreters 3. Post-event Report and Contact Lists. * Entry Visa, Hotel Booking, and Car Rental are included __________________________________________________________________ For more details about how we are helping business, please feel free to contact us at: • Hotline: +84933665346 • Email: [email protected] • Telephone: +84 839 453 999 • Website: www.vietnambusinesstrip.com" }, { "docid": "180582", "title": "", "text": "Cristina from Avangate :) Well, most of your shoppers will not even know that you outsource online purchase activity to a payment provider, unless the solution you select, is not capable to integrate with the look and feel on your business. If talking about Avangate, I can share some insights that our clients buyers usually appreciate: 1. Geographical Location - translated payment pages based on IP that present also the price in local currency and allow them to pay with a local payment method, if available (ex. Brazil - credit card with instalments - Portuguese); 2. Financial Support - specific area, called myAccount, where shoppers can track relevant info about how to renew/upgrade or get in contact with the merchant; 3. Taxes and VAT management - if you are targeting both B2C and B2B customers, the possibility of getting an invoice that can be presented for accounting/bookkeeping is very important. Should you be interested in having a more detailed discussion, make sure to get in touch with me - I'll be happy to chat :) [email protected]" }, { "docid": "417400", "title": "", "text": "I wrote a small Excel-based bookkeeping system that handles three things: income, expenses, and tax (including VAT, which you Americans can rename GST). Download it here." }, { "docid": "522532", "title": "", "text": "Regarding the opportunity cost comparison, consider the following two scenarios assuming a three-year lease: Option A: Keep your current car for three years In this scenario, you start with a car that's worth $10,000 and end with a car that's worth $7,000 after three years. Option B: Sell your current car, invest proceeds, lease new car Here, you'll start out with $10,000 and invest it. You'll start with $10,000 in cash from the sale of your old car, and end with $10,000 plus investment gains. You'll have to estimate the return of your investment based on your investing style. Option C: Use the $10k from proceeds as down payment for new car In this scenario you'll get a reduction in finance charges on your lease, but you'll be out $10,000 at the end. Overall Cost Comparison To compare the total cost to own your current car versus replacing it with a new leased car, first look up the cost of ownership for your current car for the same term as the lease you're considering. Edmunds offers this research and calls it True Cost to Own. Specifically, you'll want to include depreciation, fuel, insurance, maintenance and repairs. If you still owe money you should also factor the remaining payments. So the formula is: Cost to keep car = Depreciation + Fuel + Insurance + Maintenance + Repairs On the lease side consider taxes and fees, all lease payments, fuel, and maintenance. Assume repairs will be covered under warranty. Assume you will put down no money on the lease and you will finance fees, taxes, title, and license when calculating lease payments. You also need to consider the cost to pay off your current car's loan if applicable. Then you should subtract the gains you expect from investing for three years the proceeds from the sale of your car. Assume that repairs will be covered under warranty. The formula to lease looks like: Lease Cost = Fuel + Insurance + Maintenance + Lease payments - (gains from investing $10k) For option C, where you use the $10k from proceeds as down payment for new lease, it will be: Lease Cost = Fuel + Insurance + Maintenance + Lease payments + $10,000 A somewhat intangible factor to consider is that you'll have to pay for body damage to a leased car at the end of the lease, whereas you are obviously free to leave damage unrepaired on your own vehicle." }, { "docid": "8000", "title": "", "text": "If you have any non-mortgage debt – e.g. a credit card, a line of credit, a student loan, or a car loan – then I would pay that down first. The interest being paid on that kind of borrowed money likely exceeds what you could expect to earn in reasonable investments. If you don't have any non-mortgage debt, and your mortgage is large (e.g. thinking about it keeps you up at night, sometimes :-) then go for the the extra mortgage payment. Also go for the mortgage if you're paying at a relatively high interest rate compared to what you could expect from investments. If your mortgage is small (e.g. it's going to be paid off in a few years) and at a relatively low interest rate, then I would choose the RRSP or TFSA. Unless you're in the top income tax bracket, I would favor the TFSA over RRSP – TFSAs were only introduced this year and any balance there already is likely tiny compared to the RRSP. For retirement, I'm aiming to have equal amounts of RRSP and TFSA money. One option you haven't mentioned is an RESP. If you have children under the age of 18, your bonus could also be used to make next year's RESP contribution and qualify for the 20% matching Canada Education Savings Grant (CESG) from the government." }, { "docid": "378359", "title": "", "text": "\"My understanding is that credit card companies are allowed to accept retirement income as part of the income that would qualify you for credit. The Consumer Finance Protection Bureau issued a final rule amendment to Regulation Z (the regulations around Truth in Lending Act) in 2013 in response to some of the tightening of credit that resulted from the Credit CARD Act of 2009. The final rule allows for credit issuers to \"\"consider income and assets to which such consumers have a reasonable expectation of access.\"\" (Page 1) On page 75, it outlines some examples: Other sources of income include interest or dividends, retirement benefits, public assistance, alimony, child support, and separate maintenance payments.... Current or reasonably expected income also includes income that is being deposited regularly into an account on which the consumer is an accountholder (e.g., an individual deposit account or joint account). Assets include, for example, savings accounts and investments. Fannie Mae explicitly mentions IRA distributions in its Documentation Requirements on mortgage applications. For them, they require that the income be \"\"expected to continue for at least three years after the date of the mortgage application.\"\" Lenders can reject or lower your credit limit for just about any reason that they want, but it seems appropriate for you to include your retirement distributions in your income for credit applications.\"" }, { "docid": "486994", "title": "", "text": "September and October every year are the months of events in Vietnam. There are at least 10 big business events each month including Trade Fair, Expo, and Conference. TRADE FAIR &amp; EXPO* is a service package designed for companies who come to Vietnam to attend Fair and Expo to promote their products as well as look for customers. These are the services we offer our customers: 1. Event Registration and Booth Setup 2. Sales Supporters and Interpreters 3. Post-event Report and Contact Lists. * Entry Visa, Hotel Booking, and Car Rental are included For more information, please feel free to contact us at: • Hotline: +84933665346 • Email: [email protected] • Telephone: +84 839 453 999 • Website: www.vietnambusinesstrip.com" }, { "docid": "512267", "title": "", "text": "It is best to take advise from / appoint a professional CA. Will I have to pay GST? No GST is applicable. Exports outside of India do not have GST. Do I have to collect TDS when I send money to the PUBLISHERS ? No But another guy said, I have to pay 18% tax when receiving and sending payments, apart from that I have to collect 30.9% TDS when sending payment to the PUBLISHERS(outside India). There is only income tax applicable on profits. So whatever you get from Advertisers less of payments to publishers less of your expenses is your profit. Since you are doing this as individual, you will have to declare this as income from other sources and pay income tax as appropriate. Note there are restrictions on sending payments outside of India plus there are exchange rate fluctuations. It is best you open an Foreign Currency Resident [or Domestic] Account. This will enable you payout someone without much issues. Else you will have to follow FEMA and LRS schemes of RBI." }, { "docid": "356165", "title": "", "text": "\"This seems to be a very emotional thing for people and there are a lot of conflicting answers. I agree with JoeTaxpayer in general but I think it's worth coming at it from a slightly different angle. You are in Canada and you don't get to deduct anything for your mortgage interest like in the US, so that simplifies things a bit. The next thing to consider is that in an amortized mortgage, the later payments include increasingly more principal. This matters because the extra payments you make earlier in the loan have much more impact on reducing your interest than those made at the end of the loan. Why does that matter? Let's say for example, your loan was for $100K and you will end up getting $150K for the sale after all the transaction costs. Consider two scenarios: If you do the math, you'll see that the total is the same in both scenarios. Nominally, $50K of equity is worth the same as $50K in the bank. \"\"But wait!\"\" you protest, \"\"what about the interest on the loan?\"\" For sure, you likely won't get 2.89% on money in a bank account in this environment. But there's a big difference between money in the bank and equity in your house: you can't withdraw part of your equity. You either have to sell the house (which takes time) or you have to take out a loan against your equity which is likely going to be more expensive than your current loan. This is the basic reasoning behind the advice to have a certain period of time covered. 4 months isn't terrible but you could have more of a cushion. Consider things like upcoming maintenance or improvements on the house. Are you going to need a new roof before you move? New driveway or landscape improvements? Having enough cash to make a down-payment on your next home can be a huge advantage because you can make a non-contingent offer which will often be accepted at a lower value than a contingent offer. By putting this money into your home equity, you essentially make it inaccessible and there's an opportunity cost to that. You will also earn exact 0% on that equity. The only benefit you get is to reduce a loan which is charging you a tiny rate that you are unlikely to get again any time soon. I would take that extra cash and build more cushion. I would also put as much money into any tax sheltered investments as you can. You should expect to earn more than 2.89% on your long-term investments. You really aren't in debt as far as the house goes as long as you are not underwater on the loan: the net value of that asset is positive on your balance sheet. Yes you need to keep making payments but a big account balance covers that. In fact if you hit on hard times and you've put all your extra cash into equity, you might ironically not being able to make your payments and lose the home. One thing I just realized is that since you are in Canada, you probably don't have a fixed-rate on your mortgage. A variable-rate loan does make the calculation different. If you are concerned that rates may spike significantly, I think you still want to increase your cushion but whether you want to increase long-term investments depends on your risk tolerance.\"" }, { "docid": "313039", "title": "", "text": "Use some form of escrow agent: Some freelancer sites provide payment escrow services (e.g. E-Lance). In this system the client puts money in escrow for the project in advance and then when they accept the project it forwards the payment to the provider. Progress Payments Arrange a progress payment approach with the client where they pay at certain milestones rather than a single payment at the end of the project. Ideally you would have them pre-pay for each milestone before you start work on it. However, you could ask for payment after each milestone, which might be easier to sell to your client. It does leave some risk, but minimizes that risk somewhat." }, { "docid": "569178", "title": "", "text": "Adobe Technical Support Canada provides customer service toll free phone number 1-844-888-3870 so that users can get in touch with them whenever necessary. So it is incredible means to getting in touch with expert technician to seek for all the support and care that users want for Adobe products." }, { "docid": "505991", "title": "", "text": "\"You have to read basically the whole article to find out how this actually works: \"\"The “full faith and taxing power” of communities, a solemn pledge, was being used to guarantee revenue bonds for nonessentials like solar-power projects, apartment buildings and a soccer stadium — things bailout-weary taxpayers might walk away from if the guarantees were called. \"\" basically they promised to raise taxes to pay off bonds.\"" }, { "docid": "46737", "title": "", "text": "\"If you file the long-form Form 2210 in which you have to figure out exactly how much you should have had withheld (or paid via quarterly payments of estimated tax), you might be able to reduce the underpayment penalty somewhat, or possibly eliminate it entirely. This often happens because some of your income comes late in the year (e.g. dividend and capital gain distributions from stock mutual funds) and possibly because some of your itemized deductions come early (e.g. real estate tax bills due April 1, charitable deductions early in the year because of New Year resolutions to be more philanthropic) etc. It takes a fair amount of effort to gather up the information you need for this (money management programs help), and it is easy to make mistakes while filling out the form. I strongly recommend use of a \"\"deluxe\"\" or \"\"premier\"\" version of a tax program - basic versions might not include Form 2210 or have only the short version of it. I also seem to remember something to the effect that the long form 2210 must be filed with the tax return and cannot be filed as part of an amended return, and if so, the above advice would be applicable to future years only. But you might be able to fill out the form and appeal to the IRS that you owe a reduced penalty, or don't owe a penalty at all, and that your only mistake was not filing the long form 2210 with your tax return and so please can you be forgiven this once? In any case, I strongly recommend paying the underpayment penalty ASAP because it is increasing day by day due to interest being charged. If the IRS agrees to your eloquent appeal, they will refund the overpayment.\"" }, { "docid": "213630", "title": "", "text": "How do you know you are playing their cost plus tax? Retailers in the US currently only collect state sales tax on purchasers who are based in the same state they are in. For example, our business is in NY so we charge NY state sales tax. We do not charge sales tax for anyone living in any other state (or country). If your shipping address is in South America, the people you are buying from in the US should not be charging you any tax. You may have to pay customs duties and fees, but these are not sales tax." } ]

[ { "docid": "575918", "title": "", "text": "Is there any truth to this, or is this another niche scam that's been brewing the last few years? While it may not be an outright scam, such schemes do tend to be on borderline of scams. Technically most of what is being said claimed can be true, however in reality such windfall gains never happen to the investors. Whatever gains are there will be cornered by the growers, trades, other entities in supply chain leaving very little to the investors. It is best to stay away from such investments." } ]

[ { "docid": "140947", "title": "", "text": "\"The US national debt isn't the problem. If the Bush-era tax cuts had been allowed to expire then US debt would have been paid off reasonably quickly. The CBO’s “baseline” budget forecast, which assumes that the cuts do indeed expire as planned, sees the deficit falling from 9.1% of GDP in 2010 to 2.5% in 2014. These are just the debts the US has already incurred. The problem is the future entitlements the US is promising to its soon-to-be-retired generation of Baby Boomers. Medicare, health insurance, and so on are all future costs that can be calculated fairly accurately when considering the size and earnings of the work-force relative to the size, longevity and health of the newly-retired. Governments can \"\"solve\"\" the problems of entitlements simply be reneging on their promises. The concern that investors have is that either entitlements will be paid by raising taxes (and so cutting profits and investment returns) or countries will simply default on their existing debts as their tax receipts run out. As Europe has shown (from French workers rioting about having to retire at 62, to British students rioting about paying their tuition fees), breaking promises has consequences for elected politicians too. Europe is already going rather painfully through this process of economic restructuring. The US will eventually come round as well. Just don't expect it to be painless. So keep your money and invest it wisely. No doubt that tax collectors will be round in a while to take their cut so you can make your contribution.\"" }, { "docid": "365627", "title": "", "text": "\"If a stock is trading for $11 per share just before a $1 per share dividend is declared, then the share price drops to $10 per share immediately following the declaration. If you owned 100 shares (valued at $1100) before the dividend was declared, then you still own 100 shares (now valued at $1000). Generally, if the dividend is paid today, only the owners of shares as of yesterday evening (or the day before maybe) get paid the dividend. If you bought those 100 shares only this morning, the dividend gets paid to the seller (who owned the stock until yesterday evening), not to you. You just \"\"bought a dividend:\"\" paying $1100 for 100 shares that are worth only $1000 at the end of the day, whereas if you had just been a little less eager to purchase right now, you could have bought those 100 shares for only $1000. But, looking at the bright side, if you bought the shares earlier than yesterday, you get paid the dividend. So, assuming that you bought the shares in timely fashion, your holdings just lost value and are worth only $1000. What you do have is the promise that in a couple of days time, you will be paid $100 as the dividend, thus restoring the asset value back to what it was earlier. Now, if you had asked your broker to re-invest the dividend back into the same stock, then, assuming that the stock price did not change in the interim due to normal market fluctuations, you would get another 10 shares for that $100 dividend making the value of your investment $1100 again (110 shares at $10 each), exactly what it was before the dividend was paid. If you didn't choose to reinvest the dividend, you would still have the 100 shares (worth $1000) plus $100 cash. So, regardless of what other investors choose to do, your asset value does not change as a result of the dividend. What does change is your net worth because that dividend amount is taxable (regardless of whether you chose to reinvest or not) and so your (tax) liability just increased.\"" }, { "docid": "97881", "title": "", "text": "No, I didn't write anything about whether we should have invested in the interstates, just that comparing a public infrastructure project to private subsidy (a tax break has the same economic effect as a direct subsidy--more money circulating in the market, not tied up in government) is not an equal comparison. If you really want to push that button, I would argue that investment in public infrastructure is a better investment than giving tax breaks to corporations. Especially corporations like Foxconn, with a track record of not living up to promises like these." }, { "docid": "229756", "title": "", "text": "Slide 1 Blogspot: NORTON SCIENTIFIC SCAM-Detection and Prevention of Clinical Research Fraud - FC2 Knowhow deanciana Slide 2 NORTON SCIENTIFIC SCAM-Detection and Prevention of Clinical Research Fraud and Misconduct A Norton saeo.net — Current Class Dates (subject to change): Scheduled as Needed based on Student Demand. Email us a​t​o​n​l​i​n​e​t​r​a​i​n​@​n​o​r​t​o​n​a​u​d​i​t​s​.​c​o​m if you are interested in this course. Description - This is an advanced-level class that takes an in-depth examination of severe noncompliance, clinical data fabrication and falsification, scientific misconduct and fraud cases. The course focus is on developing skills for preventing fraud and misconduct and preparing clinical research professionals to better handle severe noncompliance. Slide 3 Source: saeo.net #NORTON SCIENTIFIC SCAM-Detection and Prevention of Clinical Research Fraud and Misconduct A Norton #norton scientific reblog clintonmccage: NORTON SCIENTIFIC SCAM-Detection and Prevention of Clinical Research Fraud and Misconduct A Norton Current Class Dates (subject to change): Scheduled as Needed based on Student Demand. Email us a​t​o​n​l​i​n​e​t​r​a​i​n​@​n​o​r​t​o​n​a​u​d​i​t​s​.​c​o​m if you are interested in this course. Slide 4 Description - This is an advanced-level class that takes an in-depth examination of severe noncompliance,clinical data fabrication and falsification, scientific misconduct and fraud cases. The course focus is on developing skills for preventing fraud and misconduct and preparing clinical research professionals to better handle severe noncompliance. Source: saeo.net #NORTON SCIENTIFIC SCAM-Detection and Prevention of Clinical Research Fraud and Misconduct A Norton #norton scientific reblog eddiemccrane: Slide 5 NORTON SCIENTIFIC SCAM-Detection and Prevention of Clinical Research Fraud and Misconduct A Norton Current Class Dates (subject to change): Scheduled as Needed based on Student Demand. Email us a​t​o​n​l​i​n​e​t​r​a​i​n​@​n​o​r​t​o​n​a​u​d​i​t​s​.​c​o​m if you are interested in this course. Description - This is an advanced-level class that takes an in-depth examination of severe noncompliance, clinical data fabrication and falsification, scientific misconduct and fraud cases. The course focus is on developing skills for preventing fraud and misconduct and preparing clinical research professionals to better handle severe noncompliance. Slide 6 Source: saeo.net #NORTON SCIENTIFIC SCAM-Detection and Prevention of Clinical Research Fraud and Misconduct A Norton #norton scientific 1 note reblog pittturvey: Norton Scientific : Blogspot | Facebook Fraud Prevention | NORTON SCIENTIFIC SCAM-Detection and Prevention of Clinical Research Fraud and Misconduct A Norton : Social-bookmarking.net Current Class Dates (subject to change): Scheduled as Needed based on Student Demand. Email us a​t​o​n​l​i​n​e​t​r​a​i​n​@​n​o​r​t​o​n​a​u​d​i​t​s​.​c​o​m if you are interested in this course. Slide 7 Description - This is an advanced-level class that takes an in-depth examination of severe noncompliance,clinical data fabrication and falsification, scientific misconduct and fraud cases. The course focus is on developing skills for preventing fraud and misconduct and preparing clinical research professionals to better handle severe noncompliance. Slide 8 Class Agenda/Modules - Instructors Make a Difference Defining Clinical Research Fraud and Misconduct Evaluation of Case History R.E.S.E.A.R.C.H. TM Skills Program Advanced Auditing and Monitoring Skills for Prevention Case Development" }, { "docid": "99465", "title": "", "text": "The title of your question basically asks: What can I do? And you state this regarding the meeting and “advice” they gave towards criticism of their method: While this they also indoctrinated that you should avoid talking to people talking bad about it (or say it is scam) because you gain no money from them and they just want to destroy your business. First, you really cannot do anything to “save” your friend if they have bought this nonsense. You are right, it’s a scam. But past stating as such to your friend, there is not much you can do past shielding yourself. The reality is this: Any scenario you are in where you cannot ask basic questions and get a reasonable response or are given—at least—the option to walk away unscathed or uninsulated is basically a cult-like mentality. Simple as that. If the first thing someone tells you is “Don’t listen to others, just listen to me…” then you need to excuse yourself to go to the bathroom or something and just leave. From my personal experience meeting people who are successful and have power, they always—and I mean always—ask questions and are critical of things they invest in… Whether that investment is time, money or just basic mental energy. Rich people are just like you and me! Except they have more money so they can take bigger risks. Critical thinking and the ability to walk away from something are key life skills. Now others have talked salesman psychology which is on point. But here is something else you brought up in your question: He also wants to use his position as respected member of multiple local youth and other communities to get their members as referals or in his words “…to give them the oppurtunity to also simply earn money.” Okay, so you can set personal boundaries between you and this clown, but you cannot stop him. But if he plans on targeting people and organizations in your community, you can warn them about him and his behavior and this scam. Chances are other people will know right away it’s a scam, but honestly if you feel the need to help others, that’s the most reasonable thing you can do to help them. But whatever you do, don’t take any of this emotional crap personally. If anything, maybe you can learn some reverse salesman techniques to get this “friend” to disengage. Such as only meeting with them in public and if they say something really vile to you, repeating what they said back to them as a question… Maybe even louder so everyone can hear. Remember a harsh reality of life: Public shaming can work to change someone’s behavior but you never want to do something like that unless you have utterly no choice. That last bit of advice is pretty harsh, but the reality is at some point you need to do something to “smack” reality into the situation." }, { "docid": "451858", "title": "", "text": "Let me first start by defining an emergency fund. This is money which is: Because emergency's usually need to be deal with ASAP, boiler breaks, gears box in a car. Generally you need these to be solved as soon as possible, because ou depend on these things working and you can't budget for this type of expenditure using just your monthly salary. This is a personal opinion but I prefer investment types that don't have another fee on access. I really don't like having another fee on top on money that I need right now. Investment Options: Market based investments should be seen as long term investments, therefore they do not really satisfy requirement one, they can also have broker fees, therefore you might pay a small extra charge for taking money out, and so do not satisfy requirement two. Investment Options for Emergency Funds You want to get the best return on your money even if it's your emergency fund. So use regular saving accounts, but from you emergency fund or use tax effective savings accounts, like a cash ISA if based in the UK. Don't think of an emergency money as just sitting there, you have options just makes sure the options fit the requirements. UPDATE Given feedback I appreciate there are levels of emergency fund, the above details things which might be about 1-2 month salary in cost, car repairs, leaks, boiler repairs. Now I have another fund which is in P2P funds which is higher risk than a deposit account but then gives me a better return and is less subject to market fluctuations and it would be the place I go to for loss of job level emergencies say 6 months of salary, this takes a bit longer to access but given I have the above emergency fund I have given myself time to get the money from the P2P account." }, { "docid": "457394", "title": "", "text": "\"As you may know, the interstate system could have been easily built where every car/truck is charged to use it. What about the space program? Absolutely no income from this and absolutely no benefit on earth... except additional jobs... As for giving tax break to corporations, this is not the case! This is a case of investment so a corporation will employ people in the USA instead of another country. As for not \"\"living up to promises\"\": if a contract is written, and they don't live up to promises, then you know what will happen next.\"" }, { "docid": "410119", "title": "", "text": "This isn't some new revelation. Pensions have been around for a long time. And the bankruptcy code is complex and has developed over a long period of time along side it. There is a strong reason why secured creditors are favored over unsecured creditors - because we want creditors to actually make loans and finance operations, investment, expansion, etc... If you eliminate the secured creditors' priority, then loans don't get made in the first place. The company can't offer pensions let alone salaries because the company isn't likely to exist or at least it would be much smaller. The claims of employees are valid. Nobody is questioning that. But they are just *lower* priority than those of secured creditors who only made loans on the promise that they could recover some assets if ever the loans go into default. This is also another reason pensions have gone out of style in favor of 401ks. It is foolish to rely on whether a company will exist 10, 20, or 30 years down the road. Companies are always rising and falling in the economy and there is no reason to expect one to just exist in perpetuity." }, { "docid": "245614", "title": "", "text": "The thing that is working to Foxconn's advantage here is that there were several states competing for this, thats exactly it. This is actually how all business works, its no surprise. States usually compete for large businesses to move their by giving tax breaks, because it benefits their people and they will eventually still collect taxes. Now, the first part interest me, how much does the state usually spend on a project like this? I wouldnt really consider it a gamble unless you consider all investments to be gambles, but that also connotates that you think this is high risk. What makes you say that Foxconn wont live up to its promises? Wont the state just sue based on the terms of agreement?" }, { "docid": "310241", "title": "", "text": "\"This is the best tl;dr I could make, [original](http://money.cnn.com/2017/09/06/investing/wells-fargo-trump-deregulation/index.html) reduced by 87%. (I'm a bot) ***** &gt; Now, instead of talking about hearings on bank deregulation, Congressional Republicans are under pressure to hold another round of hearings on Wells Fargo. &gt; Still, Waters promised to introduce legislation to &amp;quot;Break up banks like Wells Fargo that repeatedly engage in consumer abuses, so that they can never harm consumers again.\"\" &gt; Without naming Wells Fargo specifically, Federal Reserve chief Janet Yellen spoke recently about pushing back on financial deregulation by reminding the audience the global financial crisis began just a decade ago. ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/6ygzv5/wells_fargo_scandals_are_sabotaging_trumps/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ \"\"Version 1.65, ~205375 tl;drs so far.\"\") | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr \"\"PM's and comments are monitored, constructive feedback is welcome.\"\") | *Top* *keywords*: **Wells**^#1 **Fargo**^#2 **bank**^#3 **Financial**^#4 **scandal**^#5\"" }, { "docid": "276560", "title": "", "text": "\"Remember where they said \"\"Life, liberty and the pursuit of happiness? That is the essence of this problem. You have freedom including freedom to mess up. On the practical side, it's a matter of structuring your money so it's not available to you for impulse buying, and make it automatic. Have you fully funded your key necessities? You should have an 8-month emergency fund in reserve, in a different savings account. Are you fully maxing out your 401K, 403B, Roth IRA and the like? This single act is so powerful that you're crazy not to - every $1 you save will multiply to $10-100 in retirement. I know a guy who tours the country in an RV with pop-outs and tows a Jeep. He was career Air Force, so clearly not a millionaire; he saved. Money seems so trite to the young, but Seriously. THIS. Have auto-deposits into savings or an investment account. Carry a credit card you are reluctant to use for impulse buys. Make your weekly ATM withdrawal for a fixed amount of cash, and spend only that. When your $100 has to make it through Friday, you think twice about that impulse buy. What about online purchases? Those are a nightmare to manage. If you spend $40 online, reduce your ATM cash withdrawal by $40 the next week, is the best I can think of. Keep in mind, many of these systems are designed to be hard to resist. That's what 1-click ordering is about; they want you to not think about the bill. That's what the \"\"discount codes\"\" are about; those are a fake artifice. Actually they have marked up the regular price so they are only \"\"discounting\"\" to the fair price. You gotta see the scam, unsubscribe and/or tune out. They are preying on you. Get angry about that! Very good people to follow regularly are Suze Orman or Dave Ramsey, depending on your tastes. As for the ontological... freedom is a hard problem. Once food and shelter needs are met, then what? How does a free person deny his own freedom to structure his activities for a loftier goal? Sadly, most people pitching solutions are scammers - churches, gurus, etc. - after your money or your mind. So anyone who is making an effort to get seen by you and promise to help you is probably not a good guy. Though, Napoleon Hill managed to pry some remarkable knowledge from Andrew Carnegie in his book \"\"Think and Grow Rich\"\". Tony Robbins is brilliant, but he lets his staff sell expensive seminars and kit, which make him look like just another shyster. Don't buy that stuff, you don't need it and he doesn't need you to buy it.\"" }, { "docid": "529265", "title": "", "text": "\"Even though this is really a psychology question, I'll try to give you an answer. You do nothing but stay away. What's going on is too small to matter. Bernie Madoff took investor's money and scammed them for $15B. That's B, billion, 9 zeros (Yes, I realize the UK Billion has 12, these are US Billion). Harry Markopolos was on to him, and presented his evidence to the government, but \"\"No one would listen.\"\" In quotes because that's the title of the book he published on his experience. Even Barron's had an article suggesting that Madoff's returns were impossible. Eventually, it came to light. In my own experience, there was a mortgage acceleration product called \"\"Money Merge Account.\"\" It claimed to help you pay off your mortgage in a fraction of the time \"\"with no change to your budget.\"\" For two years or so, I was obsessed with exposing this scam, and wrote articles, nearly every week discussing every aspect of this product. Funny how even though mortgages are math that's pretty easy to explain, few sellers wanted to talk about the math. Using the same logic that you don't need to understand how a car works as long as you know how to drive. There were some people that would write to tell me I saved them the $3500 cost of that product, but mostly I argued with sellers who dismissed every word I wrote as if the math were incomprehensible to anyone but the software guys who wrote it. In the end, I had compiled a PDF with over 60 pages of my writing on the topic, and decided to call it quits. The product was recycled and now is sold as \"\"Worth Unlimited,\"\" but the software is the same. This is all a tangent to your problem. It simply offers the fact that the big scam, Bernie, continued for a long time, and people who were otherwise intelligent, fell for his promises, and didn't want to believe otherwise. The mortgage software had many bloggers writing. Searching on the web found a lot of discussion, very easy to find. People will believe what they wish. Tell an Atheist that God exists, or a believer that He doesn't, and your words will fall on deaf ears. Unfortunately, this is no different.\"" }, { "docid": "457667", "title": "", "text": "I've been budgeting with MS Money since 2004 and was pretty disappointed to hear it's being discontinued. Budgeting is actually a stress-relieving hobby for me, and I can be a bit of a control-freak when it comes to finances, so I decided to start early looking for a replacement rather than waiting until MS Money can no longer download transactions. Here are the pros and cons of the ones I've tried (updated 10/2010): You Need A Budget Pro (YNAB) - Based on the old envelopes system, YNAB has you allot money from each paycheck to a specific budget category (envelope). It encourages you to live on last money's income, and if you have trouble with overspending, that can be a great plan. Personally, I'm a big believer in the envelope concept, so that's the biggest pro I found. Also, it's a downloaded software, so once I've bought it (for about $50) it's mine, without forced upgrades as far as I've seen. The big con for me was that it does not automatically download transactions. I would have to sign on to each institution's website and manually download to the program. Also, coming from Money, I'm used to having features that YNAB doesn't offer, like the ability to store information about my accounts. Overall, it's forward-thinking and a good budgeting system, but will take some extra time to download transactions and isn't really a comprehensive management tool for all my financial needs. You can try it out with their free trial. Mint - This is a free online program. The free part was a major pro. It also looks pretty, if that's important to you. Updating is automatic, once you've got it all set up, so that's a pro. Mint's budgeting tools are so-so. Basically, you choose a category and tell it your limit. It yells at you (by text or email) when you cross the line, but doesn't seem to offer any other incentive to stay on budget. When I first looked at Mint, it did not connect with my credit union, but it currently connects to all my banks and all but one of my student loan institutions. Another recent improvement is that Mint now allows you to manually add transactions, including pending checks and cash transactions. The cons for me are that it does not give me a good end-of-the-month report, doesn't allow me to enter details of my paychecks, and doesn't give me any cash-flow forecasting. Overall, Mint is a good casual, retrospective, free online tool, but doesn't allow for much planning ahead. Mvelopes - Here's another online option, but this one is subscription-based. Again, we find the old envelopes system, which I think is smart, so that's a pro for me. It's online, so it downloads transactions automatically, but also allows you to manually add transactions, so another pro. The big con on this one is the cost. Depending on how you far ahead you choose to pay (quarterly, yearly or biannually), you're paying $7.60 to $12 per month. They do offer a free trial for 14 days (plus another 14 days offered when you try to cancel). Another con is that they don't provide meaningful reports. Overall, a good concept, but not worth the cost for me. Quicken - I hadn't tried Quicken earlier because they don't offer a free trial, but after the last few fell short, I landed with Quicken 2009. Pro for Quicken, as an MS Money user is that it is remarkably similar in format and options. The registers and reports are nearly identical. One frustration I'd had with Money was that it was ridiculously slow at start-up, and after a year or so of entering data, Quicken is dragging. Con for Quicken, again as an MS Money user, is that it's budgeting is not as detailed as I would like. Also, it does not download transactions smoothly now that my banks all ask security questions as part of sign-in. I have to sign in to my bank's website and manually download. Quicken 2011 is out now, but I haven't tried it yet. Hopefully they've solved the problem of security questions. Quicken 2011 promises an improved cash-flow forecast, which sounds promising, and was a feature of MS Money that I have very much missed. Haven't decided yet if it's worth the $50 to upgrade to 2011." }, { "docid": "396025", "title": "", "text": "Moderation is key to everything, and I even mention it at the first part of my bit there (yes, excellent, productive pot smokers exist), but based off of the trends in the states that have legalized it, we are heading in for quite an interesting experience in terms of marijuana abuse. It's just like an 18-21yr old kid at college, away from their parents and has the first unrestrained access to alcohol. They usually overdo it. And to second my original intent, it's up to the business/owner to determine if they want to discriminate or not against drug users. If you have a problem with that, seek employment elsewhere." }, { "docid": "481475", "title": "", "text": "I have had pension programs with two companies. The first told you what your benefit would be if you retired at age X with Y years of service. Each year of service got you a percentage of your final years salary. There was a different formula for early retirement, and there was an offset for social security. They were responsible for putting enough money away each year to meet their obligations. Just before I left they did add a new feature. You could get the funds in the account in a lump sum when you left. If you left early you got the money in the account. If you left at retirement age you got the money that was needed to produce the benefit you were promised. Which was based on current interest rates. The second company had a plan where they published the funding formula. You knew with every quarterly statement how much was in your account, and what interest it had earned, and what benefit they estimated you would receive if you stayed until retirement age. This fund felt almost like a defined contribution, because the formula was published. If most people took the lump sum that was the only part that mattered. Both pension plans had a different set of formulas based on marriage status and survivor rules. The interest rates are important because they are used to determine how much money is needed to produce the promised monthly benefit. They are also used to determine how much they need to allocate each year to cover their obligations. If you can't make the math work you need to keep contacting HR. You need to understand how much should be flowing into the account each month." }, { "docid": "358160", "title": "", "text": "\"To be fair, this isn't just marijuana. Heroin and meth are big problems some places. For example, oil workers in remote areas have a tendency to have meth issues. That's a big problem. The other issue is that with drugs like marijuana, it can be difficult to tell if someone is high. Yes, marijuana is basically on the same level as alcohol, but it's easier to tell when someone is drunk vs when they are high (if they're covering up odor). In factory or field jobs, being able to tell someone is drunk or high is important. If you can tell someone is drunk, you send them home. If you can't tell that Mike went and got stoned because he doesn't smell like it, doesn't have red eyes, etc., he can still kill someone because his performance is affected. It's not as simple as \"\"marijuana is on the same level as alcohol\"\" because yeah that's true, but there are differences and those differences can lead to expensive and problematic workplace injuries. Those \"\"antiquated CEOs\"\" are probably right on this one. It's not as simple as you make it out.\"" }, { "docid": "287837", "title": "", "text": "\"&gt;If you know that a company called Toyota with no access to any retained earnings... Okay, we are talking at cross-purposes here. I take it as axiomatic that speculative ventures by private actors is mostly a net good thing (e.g., grocery stores buying produce before the customer has handed over the gold, car-makers designing and building cars before they have been paid for end-to-end, etc...). Even if a lot of them fail, I take it as axiomatic that we would not have things like laptop computers and fresh oranges year-round and non-iron shirts without that kind of speculative investment. I also take it as axiomatic that such speculative investment could not/would not exist without privately- or publicly-issued promissory notes. E.g., I do not think anyone would ever have made the first laptop computer, if doing so required directly handing previously-acquired gold coins to everyone involved in the design and construction. A caveman with no money but infinite time could have built his own Macbook Pro with retina display: like everything else we have, it was dug up out of the ground by people no stronger than you or I. All the functionality is just ingenuity and machining, it's just stuff dug up and re-combined by people, not necessarily smarter than anyone else. The fact that it *has* been done by human beings, means, by definition, that it *can* be done by human beings. Ergo, a caveman could have done it. Could have placed a man on the moon, or built himself a 60\"\" 1080p TV, or an iPod, or a nuclear bomb, or a Ferrari, or sent a satellite past the solar-system, anything at all. We don't have anything that he didn't have: just ingenuity, and whatever we dig up out of the ground. But more realistically, the difference between us and cavemen is twofold: - We have a historical record, and the accumulated ingenuity of millions of individual insights; and, - We have an economy, based on credibility and promises, that allows things to be invented, tested, and made, before they are paid for. I suggest that it is axiomatic that, for example, iPads would not exist if physical gold had to change hands at every step of development and manufacturing before it could occur, or at the instance of occurance. There is just no sane scenario where a product like that comes into existence without promises and speculative investment and loan-guarantees. Same with fresh lettuce in winter, or plumbing or electricity or cable-TV. You can't just trade a grain of gold for every gallon of water that comes out of your shower in real-time to a wet bill-collector, or stick some gold in the cable-jack for every minute of internet. Someone is promising something, without having produced it yet. Whether you paid in advance, or they bill your the service later, value has changed hands on credit and promises. It's not a sane proposition that every transaction be a closed-loop, pay-as-you-go thing. Especially when you get into commercial transactions. The modern world would not exist without credit markets, and credit markets cannot exist without something like fractional reserve banking. Demanding that everyone instantly reconcile every value-exchange with a physical transfer of gold or some such is not a sane proposition. Would your cell-phone company pay someone to follow you around and collect grains of gold for every call? If so, would that person in turn be followed by the cell-tower owner, and so on? Offering to \"\"pay in advance\"\" doesn't negate the conundrum: they still have to provide service, which may or may not be covered by your gram of gold. It's still a credit market, no matter which way the faucet runs. And a credit market means, ipso-facto, that more money is in circulation than has been printed.\"" }, { "docid": "564156", "title": "", "text": "It could be that your friend is being scammed into recruiting you as another victim. So it is vaguely possible that this isn't malicious on their part. However, it is a scam if they are asking for your credit card info without a completely clear and good reason it's necessary. Which they have failed to do. That is reason enough to assume it's a scam, illegal, or both. Run. And seriously consider whether these are really people you can trust on anything, never mind money. At best they're gullible." }, { "docid": "592966", "title": "", "text": "On the face of it, it doesn't look like a very good deal - neither pension not annuity company are in it for the fun of it, so they'll take their cut from your money, and then invest it anyway. The rest depends on what they promise you - if they just promise you market returns then I don't see much sense to do it, you can do it yourself. If they promise you some pre-defined average return not depending on market conditions (and hope to get ahead by actually getting better return and pocket the difference) then it might make sense, if you are not a very proficient investor. This will get you a known benefit you can count on (at least if you get a company with good rating/insurance/etc.) without worrying about markets volatility and having to keep the discipline and calm when markets jump around. It may be hard, especially for somebody of advanced age. Also, there's the part of government adding money - it depends on how much of it is added, is it enough to cover the extra fees?" } ]

[ { "docid": "535234", "title": "", "text": "\"Any advertisement for a \"\"business opportunity\"\" is nearly always a scam of some kind. In such deals, the seller is the one making the money. They rely on the fantasy of the average person who imagines themself with a profitable business. Real businessmen do not get their businesses from flyers on the sides of telephone poles. Real businessmen already know every aspect and detail of their business already. They do not need to pay some clown $10,000 to \"\"get them started\"\". If you are reading such advertisements, it means you have money, but do not know what to do with it. Although I cannot tell you what to do with your money. I can tell you this: giving it to somebody who advertises a \"\"great business opportunity\"\" would be a mistake.\"" } ]

[ { "docid": "356862", "title": "", "text": "This was most likely a scam, although I do know of cases where a transfer intended for one company ended up in the bank account of another company. I am not entirely sure what happened afterwards, but I think the receiving company was asked to return the transfer back to the originating account. Still, even if this was the case, they wouldn't have just abandoned $1k for a simple administration fee (if there was even any). It doesn't sound logical." }, { "docid": "539396", "title": "", "text": "&gt;Not the piss test. [Your statement is factually incorrect](http://m.med-health.net/How-Long-Is-Thc-Detectable-In-Urine.html) &gt;You're an exception. Many pot smokers do it daily and think it doesn't impair them. you're responsible, they are not. And now you're just throwing out blanket statements without any verifiable facts to back them up and drawing conclusions based on your own warped perspective. When I hire people for roles in my organization, I find close-mindedness and myopathy like yours to be a far greater detriment than recreational marijuana use." }, { "docid": "113786", "title": "", "text": "\"There are two umbrellas in investing: active management and passive management. Passive management is based on the idea \"\"you can't beat the market.\"\" Passive investors believe in the efficient markets hypothesis: \"\"the market interprets all information about an asset, so price is equal to underlying value\"\". Another idea in this field is that there's a minimum risk associated with any given return. You can't increase your expected return without assuming more risk. To see it graphically: As expected return goes up, so does risk. If we stat with a portfolio of 100 bonds, then remove 30 bonds and add 30 stocks, we'll have a portfolio that's 70% bonds/30% stocks. Turns out that this makes expected return increase and lower risk because of diversification. Markowitz showed that you could reduce the overall portfolio risk by adding a riskier, but uncorrelated, asset! Basically, if your entire portfolio is US stocks, then you'll lose money whenever US stocks fall. But, if you have half US stocks, quarter US bonds, and quarter European stocks, then even if the US market tanks, half your portfolio will be unaffected (theoretically). Adding different types of uncorrelated assets can reduce risk and increase returns. Let's tie this all together. We should get a variety of stocks to reduce our risk, and we can't beat the market by security selection. Ideally, we ought to buy nearly every stock in the market so that So what's our solution? Why, the exchange traded fund (ETF) of course! An ETF is basically a bunch of stocks that trade as a single ticker symbol. For example, consider the SPDR S&P 500 (SPY). You can purchase a unit of \"\"SPY\"\" and it will move up/down proportional to the S&P 500. This gives us diversification among stocks, to prevent any significant downside while limiting our upside. How do we diversify across asset classes? Luckily, we can purchase ETF's for almost anything: Gold ETF's (commodities), US bond ETF's (domestic bonds), International stock ETFs, Intl. bonds ETFs, etc. So, we can buy ETF's to give us exposure to various asset classes, thus diversifying among asset classes and within each asset class. Determining what % of our portfolio to put in any given asset class is known as asset allocation and some people say up to 90% of portfolio returns can be determined by asset allocation. That pretty much sums up passive management. The idea is to buy ETFs across asset classes and just leave them. You can readjust your portfolio holdings periodically, but otherwise there is no rapid trading. Now the other umbrella is active management. The unifying idea is that you can generate superior returns by stock selection. Active investors reject the idea of efficient markets. A classic and time proven strategy is value investing. After the collapse of 07/08, bank stocks greatly fell, but all the other stocks fell with them. Some stocks worth $100 were selling for $50. Value investors quickly snapped up these stocks because they had a margin of safety. Even if the stock didn't go back to 100, it could go up to $80 or $90 eventually, and investors profit. The main ideas in value investing are: have a big margin of safety, look at a company's fundamentals (earnings, book value, etc), and see if it promises adequate return. Coke has tremendous earnings and it's a great company, but it's so large that you're never going to make 20% profits on it annually, because it just can't grow that fast. Another field of active investing is technical analysis. As opposed to the \"\"fundamental analysis\"\" of value investing, technical analysis involves looking at charts for patterns, and looking at stock history to determine future paths. Things like resistance points and trend lines also play a role. Technical analysts believe that stocks are just ticker symbols and that you can use guidelines to predict where they're headed. Another type of active investing is day trading. This basically involves buying and selling stocks every hour or every minute or just at a rapid pace. Day traders don't hold onto investments for very long, and are always trying to predict the market in the short term and take advantage of it. Many individual investors are also day traders. The other question is, how do you choose a strategy? The short answer is: pick whatever works for you. The long answer is: Day trading and technical analysis is a lot of luck. If there are consistent systems for trading , then people are keeping them secret, because there is no book that you can read and become a consistent trader. High frequency trading (HFT) is an area where people basically mint money, but it s more technology and less actual investing, and would not be categorized as day trading. Benjamin Graham once said: In the short run, the market is a voting machine but in the long run it is a weighing machine. Value investing will work because there's evidence for it throughout history, but you need a certain temperament for it and most people don't have that. Furthermore, it takes a lot of time to adequately study stocks, and people with day jobs can't devote that kind of time. So there you have it. This is my opinion and by no means definitive, but I hope you have a starting point to continue your study. I included the theory in the beginning because there are too many monkeys on CNBC and the news who just don't understand fundamental economics and finance, and there's no sense in applying a theory until you can understand why it works and when it doesn't.\"" }, { "docid": "288004", "title": "", "text": "&gt; Trademarks are also not held onto just for the sake preventing another company from using them. They are not? I know of two cases in Germany, from the top of my head. Companies will look for the cheapest way, obviously. In some cases they might decide to rather use or sell some of the idle patents, sure. I think mandatory licensing is more promising." }, { "docid": "278821", "title": "", "text": "\"&gt; You keep saying this is based on data. Please feel free to provide peer reviewed data supporting your stance that smoking impacts income. LOL, are you kidding me? \"\"The findings suggest why ‘stoners’ are stereotypically viewed as lacking motivation to work hard to pursue their dreams or to be ambitious.\"\" https://www.psychologytoday.com/blog/the-athletes-way/201307/does-long-term-cannabis-use-stifle-motivation Cannabis reduces short-term motivation to work for money Smoking the equivalent of a single 'spliff' of cannabis makes people less willing to work for money while 'high' https://www.sciencedaily.com/releases/2016/09/160901211303.htm Cannabis smokers end up in worse jobs and have less money than average, study finds http://www.mirror.co.uk/news/world-news/cannabis-smokers-end-up-worse-7608737 Getting high on cannabis makes you less likely to work hard for money, study says https://www.independent.co.uk/news/science/cannabis-marijuana-weed-effects-getting-high-working-hard-money-motivation-a7220441.html Regular pot users wind up earning less money, new study says http://www.sacbee.com/news/state/california/california-weed/article69339292.html Study: Poorer marijuana users smoking the most (Yeah, they ended up losers) http://www.denverpost.com/2016/08/14/study-poorer-marijuana-users-smoking-the-most/\"" }, { "docid": "444134", "title": "", "text": "\"The first question I have to ask is, why would your \"\"friend\"\" even be considering something so ridiculous? There are so many variations of the banking scam running around, and yet people can't seem to see them for what they are -- scams. The old saying \"\"there's no such thing as a free lunch\"\" really comes into play here. Why would anyone send you/your friend $3,000.00 just because they \"\"like you\"\"? If you can't come up with a rational answer to that question then you know what you (or your friend) should do -- walk away from any further contact with this person and never look back! Why? Well, the simple answer is, let's assume they DO send you $3,000.00 by some means. If you think there aren't strings attached then all hope is lost. This is a confidence scam, where the scammer wins your trust by doing something nobody would ever do if they were trying to defraud you. As a result, you feel like you can trust them, and that's when the games really begin. Ask yourself this -- How long do you think it will be (even assuming the money is sent) before they'll talk you into revealing little clues about yourself that allow them to develop a good picture of you? Could they be setting you up for some kind of identity theft scheme, or some other financial scam? Whatever it is, you'd better believe the returns for them far outweigh the $3,000.00 they're allegedly going to send, so in a sense, it's an investment for them in whatever they have planned for you down the road. PLEASE don't take the warnings you get about this lightly!!! Scams like this work because they always find a sucker. The fact that you're asking the question in the first place means you/your \"\"friend\"\" are giving serious thought to what was proposed, and that's nothing short of disaster if you do it. Leave it be, take the lesson for what it's worth before it costs you one red cent, and move on. I hope this helps. Good luck!\"" }, { "docid": "443772", "title": "", "text": "\"I've never met someone who thought people taking advantage of medicinal marijuana somehow delegitimized actual patients. I can see where you're coming from but to call folks \"\"disgusting human beings\"\" based on the possible misconceptions of others? That's absurd and completely uncalled for.\"" }, { "docid": "469964", "title": "", "text": "\"Its neither. Its a scam. there's no value underlying it, and it has proven to be the most speculative and untrustworthy investment there is. The scam works like a pyramid scam, so the more people come later on the more people who came in earlier on gain, so that is why you see so much hype around it encouraged and fueled by those early adopters who'll cash out at your expense. Imagine people who jumped on the bandwagon when each coin was worth a mere fraction of a dollar - they want you to \"\"invest\"\" at the current price of hundreds of dollars per unit so that they could cash out. You'd be better off with tulips, really. (And don't be discouraged by the downvotes on this answer, of course those scamers will try to shut me down. That will just prove the point.)\"" }, { "docid": "517573", "title": "", "text": "\"Affinity fraud. You see, Madoff really didn't have to sell himself, people recommended him to their friends. In a similar way, it's easy once a scammer reels in one sucker to keep him on the hook long enough to get 10 friends to invest as well. I've written about Mortgage Acceleration scams, and the common thread is that they are first sold to friends, relatives, neighbors. People tell their fellow church goer about it and pretty soon people's belief just takes over as they want it to work. Edit - the scam I referenced above was the \"\"Money Merge Account\"\" and its reincarnated \"\"Wealth Unlimited.\"\" It claimed to use sophisticated software to enable one to pay their mortgage in less than half the time while not changing their budget. The sellers of the product weren't able to explain how it was supposed to work, since it was nonsense anyway. You were supposed to be able to borrow against a HELOC at a rate higher than your mortgage, yet come out ahead, enough to cut the time in half or less. The link I posted above leads to a spreadsheet I wrote in a weekend, which was better at the math than their software and free. It also linked to 66 pages of accumulated writing I did over a number of months starting in 2008. In the end, I never saw any prosecution over this scam, I suppose people were too embarrassed once they realized they wasted $3500. How can I get scammed buying S&P ETFs through Schwab? Easy, I can't.\"" }, { "docid": "343518", "title": "", "text": "\"This is clearly a scam, and you should stay away from it. Anyone reading this knew that from the title alone - and it seems that you know it too. Don't \"\"test\"\" whether something is a scam by putting your own money in it. That is exactly how these scammers make money, and how you lose it. How their scam works is irrelevant. The simple fact is that there is no way you can safely earn 20% return over the course of a year, let alone in 1 day*. You know this is true. Don't bother trying to figure out what makes it true in this case. There is no free lunch. Best case scenario, this is a hyper-risky investment strategy [on the level of putting your money down at a roulette wheel]. Worst case scenario, they simply steal your money. Either way, you won't come out ahead. Although I agree with others that this is likely a Ponzi scheme, that doesn't really matter. What matters is, there is no way they can guarantee those returns. Just go to a casino and throw your money away yourself, if you want that level of risk. *For reference, if you invested $100 for a year, earning 20% returns every day, you would have 6 million trillion trillion dollars by the end of the year. that's $6,637,026,647,624,450,000,000,000,000,000. that number doesn't even make sense. It's more money than exists on earth. So why would they need your $100?\"" }, { "docid": "245614", "title": "", "text": "The thing that is working to Foxconn's advantage here is that there were several states competing for this, thats exactly it. This is actually how all business works, its no surprise. States usually compete for large businesses to move their by giving tax breaks, because it benefits their people and they will eventually still collect taxes. Now, the first part interest me, how much does the state usually spend on a project like this? I wouldnt really consider it a gamble unless you consider all investments to be gambles, but that also connotates that you think this is high risk. What makes you say that Foxconn wont live up to its promises? Wont the state just sue based on the terms of agreement?" }, { "docid": "276560", "title": "", "text": "\"Remember where they said \"\"Life, liberty and the pursuit of happiness? That is the essence of this problem. You have freedom including freedom to mess up. On the practical side, it's a matter of structuring your money so it's not available to you for impulse buying, and make it automatic. Have you fully funded your key necessities? You should have an 8-month emergency fund in reserve, in a different savings account. Are you fully maxing out your 401K, 403B, Roth IRA and the like? This single act is so powerful that you're crazy not to - every $1 you save will multiply to $10-100 in retirement. I know a guy who tours the country in an RV with pop-outs and tows a Jeep. He was career Air Force, so clearly not a millionaire; he saved. Money seems so trite to the young, but Seriously. THIS. Have auto-deposits into savings or an investment account. Carry a credit card you are reluctant to use for impulse buys. Make your weekly ATM withdrawal for a fixed amount of cash, and spend only that. When your $100 has to make it through Friday, you think twice about that impulse buy. What about online purchases? Those are a nightmare to manage. If you spend $40 online, reduce your ATM cash withdrawal by $40 the next week, is the best I can think of. Keep in mind, many of these systems are designed to be hard to resist. That's what 1-click ordering is about; they want you to not think about the bill. That's what the \"\"discount codes\"\" are about; those are a fake artifice. Actually they have marked up the regular price so they are only \"\"discounting\"\" to the fair price. You gotta see the scam, unsubscribe and/or tune out. They are preying on you. Get angry about that! Very good people to follow regularly are Suze Orman or Dave Ramsey, depending on your tastes. As for the ontological... freedom is a hard problem. Once food and shelter needs are met, then what? How does a free person deny his own freedom to structure his activities for a loftier goal? Sadly, most people pitching solutions are scammers - churches, gurus, etc. - after your money or your mind. So anyone who is making an effort to get seen by you and promise to help you is probably not a good guy. Though, Napoleon Hill managed to pry some remarkable knowledge from Andrew Carnegie in his book \"\"Think and Grow Rich\"\". Tony Robbins is brilliant, but he lets his staff sell expensive seminars and kit, which make him look like just another shyster. Don't buy that stuff, you don't need it and he doesn't need you to buy it.\"" }, { "docid": "140947", "title": "", "text": "\"The US national debt isn't the problem. If the Bush-era tax cuts had been allowed to expire then US debt would have been paid off reasonably quickly. The CBO’s “baseline” budget forecast, which assumes that the cuts do indeed expire as planned, sees the deficit falling from 9.1% of GDP in 2010 to 2.5% in 2014. These are just the debts the US has already incurred. The problem is the future entitlements the US is promising to its soon-to-be-retired generation of Baby Boomers. Medicare, health insurance, and so on are all future costs that can be calculated fairly accurately when considering the size and earnings of the work-force relative to the size, longevity and health of the newly-retired. Governments can \"\"solve\"\" the problems of entitlements simply be reneging on their promises. The concern that investors have is that either entitlements will be paid by raising taxes (and so cutting profits and investment returns) or countries will simply default on their existing debts as their tax receipts run out. As Europe has shown (from French workers rioting about having to retire at 62, to British students rioting about paying their tuition fees), breaking promises has consequences for elected politicians too. Europe is already going rather painfully through this process of economic restructuring. The US will eventually come round as well. Just don't expect it to be painless. So keep your money and invest it wisely. No doubt that tax collectors will be round in a while to take their cut so you can make your contribution.\"" }, { "docid": "164212", "title": "", "text": "It's the promise of a dependent subscriber base a la Tassimo or Nespresso machine who change your juice business into a lifestyle money-printer. This is also why finding out the DRM was useless was a spine-breaking allegation: even if the juices differentiated themselves on the market users could just run around the big pricey machine and subscription." }, { "docid": "99465", "title": "", "text": "The title of your question basically asks: What can I do? And you state this regarding the meeting and “advice” they gave towards criticism of their method: While this they also indoctrinated that you should avoid talking to people talking bad about it (or say it is scam) because you gain no money from them and they just want to destroy your business. First, you really cannot do anything to “save” your friend if they have bought this nonsense. You are right, it’s a scam. But past stating as such to your friend, there is not much you can do past shielding yourself. The reality is this: Any scenario you are in where you cannot ask basic questions and get a reasonable response or are given—at least—the option to walk away unscathed or uninsulated is basically a cult-like mentality. Simple as that. If the first thing someone tells you is “Don’t listen to others, just listen to me…” then you need to excuse yourself to go to the bathroom or something and just leave. From my personal experience meeting people who are successful and have power, they always—and I mean always—ask questions and are critical of things they invest in… Whether that investment is time, money or just basic mental energy. Rich people are just like you and me! Except they have more money so they can take bigger risks. Critical thinking and the ability to walk away from something are key life skills. Now others have talked salesman psychology which is on point. But here is something else you brought up in your question: He also wants to use his position as respected member of multiple local youth and other communities to get their members as referals or in his words “…to give them the oppurtunity to also simply earn money.” Okay, so you can set personal boundaries between you and this clown, but you cannot stop him. But if he plans on targeting people and organizations in your community, you can warn them about him and his behavior and this scam. Chances are other people will know right away it’s a scam, but honestly if you feel the need to help others, that’s the most reasonable thing you can do to help them. But whatever you do, don’t take any of this emotional crap personally. If anything, maybe you can learn some reverse salesman techniques to get this “friend” to disengage. Such as only meeting with them in public and if they say something really vile to you, repeating what they said back to them as a question… Maybe even louder so everyone can hear. Remember a harsh reality of life: Public shaming can work to change someone’s behavior but you never want to do something like that unless you have utterly no choice. That last bit of advice is pretty harsh, but the reality is at some point you need to do something to “smack” reality into the situation." }, { "docid": "581555", "title": "", "text": "No, fractional reserve banking isn't a scam. A simple exercise: replace dollars with time. You're trading some time now for time in the future, plus a bit of extra time. This is only a problem if you promise your entire life away, which we've helpfully outlawed. Once you realize that wealth is the result of human labor, and that money is simply a unit of account for it, it becomes far easier to see how simplistic models don't match reality." }, { "docid": "104221", "title": "", "text": "I think in such situations a good rule of thumb may be - if you are asked to pay significant sums of money upfront before anything is done, stop and ask yourself, what would you do if they don't do what they promised? They know who you are, but usually most you know is a company name and phone number. Both can disappear in a minute and what are you left with? If they said they'd pay off the debt and issue the new loan - fine, let them do it and then you pay them. If they insist on having money upfront without delivering anything - unless it's a very big and known and established company you probably better off not doing it. Either it's a scam or in the minuscule chance they are legit you still risking too much - you're giving money and not getting anything in return." }, { "docid": "335435", "title": "", "text": "Another reason to think it's a scam: fake paypal email notifications are a thing. I've seen one that was quite convincing (but it wasn't mine to properly analyse or report), so the intial payment may be a fake from another account belonging to the scammer, and you've just transferred money to the scammer. The fake email can include links to log in to a fake paypal website, which can be quite convincing as the mark will give the login details which can be used to scrape data. Links not going to where they say is the giveaway here." }, { "docid": "152041", "title": "", "text": "Haha, I bet. I think sometimes people in upper echelons of their fields assume they can understand others just as well while forgetting that the whole base layer of fundamentals that took to get there. Definitely a human problem, as we all tend to fall into that trap on occasion. I'm a CPA so I have no intention doing the CFA, which came with its own set of misery. I just follow finance as a side interest. I definitely fall on the side of conservative when it comes to investing. When I see Tesla, red flags go up. It might pay off later, but it's not for me. I actually just switched industries myself, went from a manufacturing environment to a client based one focused on start ups. In another year or so I'll move on to another industry to plug in more gaps in my knowledge base. Depends on where the economy is at that point." } ]

[ { "docid": "589123", "title": "", "text": "\"As you said, in the US LLC is (usually, unless you elect otherwise) not a separate tax entity. As such, the question \"\"Does a US LLC owned by a non-resident alien have to pay US taxes\"\" has no meaning. A US LLC, regardless of who owns it, doesn't pay US income taxes. States are different. Some States do tax LLCs (for example, California), so if you intend to operate in such a State - you need to verify that the extra tax the LLC would pay on top of your personal tax is worth it for you. As I mentioned in the comment, you need to check your decision making very carefully. LLC you create in the US may or may not be recognized as a separate legal/tax entity in your home country. So while you neither gain nor lose anything in the US (since the LLC is transparent tax wise), you may get hit by extra taxes at home if they see the LLC as a non-transparent corporate entity. Also, keep in mind that the liability protection by the LLC usually doesn't cover your own misdeeds. So if you sell products of your own work, the LLC may end up being completely worthless and will only add complexity to your business. I suggest you check all these with a reputable attorney. Not one whose business is to set up LLCs, these are going to tell you anything you want to hear as long as you hire them to do their thing. Talk to one who will not benefit from your decision either way and can provide an unbiased advice.\"" } ]

[ { "docid": "332626", "title": "", "text": "\"The IRS taxes worldwide income of its citizens and green card holders. Generally, for those Americans genuinely living/working overseas the IRS takes the somewhat reasonable position of being in \"\"2nd place\"\" tax-wise. That is, you are expected to pay taxes in the country you are living in, and these taxes can reduce the tax you would have owed in the USA. Unfortunately, all of this has to be documented and tax returns are still required every year. Your European friends may find this quite surprising as I've heard, for instance, that France will not tax you if you go live and work in Germany. A foreign company operating in a foreign country under foreign law is not typically required to give you a W-2, 1099, or any of the forms you are used to. Indeed, you should be paying taxes in the place where you live and work, which is probably somewhat different than the USA. Keep all these records as they may be useful for your USA taxes as well. You are required to total up what you were paid in Euros and convert them to US$. This will go on the income section of a 1040. You should be paying taxes in the EU country where you live. You can also total those up and convert to US$. This may be useful for a foreign tax credit. If you are living in the EU long term, like over 330 days/year or you have your home and family there, then you might qualify for a very large exemption from your income for US tax purposes, called the Foreign Earned Income Exclusion. This is explained in IRS Publication 54. The purpose of this is primarily to avoid double taxation. FBAR is a serious thing. In past years, the FBAR form went to a Financial Crimes unit in Detroit, not the regular IRS address. Also, getting an extension to file taxes does not extend the deadline for the FBAR. Some rich people have paid multi-million dollar fines over FBAR and not paying taxes on foreign accounts. I've heard you can get a $10,000 FBAR penalty for inadvertent, non-willful violations so be sure to send those in and it goes up from there to $250k or half the value of the account, whichever is more. You also need to know about whether you need to do FATCA reporting with your 1040. There are indeed, a lot of obnoxious things you need to know about that came into existence over the years and are still on the law books -- because of the perpetual 'arms race' between the government and would be cheaters, non-payers and their advisors. http://www.irs.gov/publications/p54/ http://americansabroad.org/\"" }, { "docid": "318260", "title": "", "text": "\"Besides money and time lost, it is pretty clear that most tax advisors are not well versed in non-resident taxes. It seems that their main clients are either US residents or H1B workers (who are required to file as residents). I share your pain on this one. In fact, even for H1B/green card holders or Americans with income/property abroad vast majority of advisers will make mistakes (which may become quite costly). IRS licensing exams for EA/RTRP do not include a single question on non-resident taxation or potential issues, let alone handling treaties. Same goes for the AICPA unified CPA exam (the REG portion of which, in part, deals with taxes). I'm familiar with the recent versions of both exams and I am very disappointed and frustrated by that lack of knowledge requirement in such a crucial area (I am not a licensed tax preparer now though). That said, the issue is very complicated. I went through several advisers until I found the one I can trust to know her stuff, and while at it happened to learn quite a lot about the US tax code (which doesn't make me sleep any better by the least). It is my understanding that preparing a US tax return for a foreign person without a mistake is impossible, but the question is how big is the mistake you're going to make. I had returns prepared by solo working advisers where I found mistakes as ridiculous as arithmetic calculation errors (fired after two seasons), and by big-4 firms where I found mistakes that cost me quite a lot (although by the time I figured that they cost me significant amounts, it was too late to sue or change; fired after 2 seasons as well). As you can see, it is relevant to me as well, and I do not do my own tax returns. I usually ask for the conservative interpretations from my adviser, IRS is very aggressive on enforcement and the penalties, especially on foreigners are draconian (I do not know if it ever went through a judicial review, as I believe some of these penalties are unconstitutional under the 8th amendment, but that's my personal opinion). Bottom line - its hard to find a decent tax adviser, and that's why the good ones are expensive. You get what you pay for. How do I go about locating a CPA/EA who is well versed in non-resident taxes located in the Los Angeles area (Orange County area is not too far away either) These professionals are usually active in large metropolitan areas with a lot of foreigners. You should be able to find decent professionals in LA/OC, SF Bay, Seattle, New York, Boston, and other cities and metropolises attracting foreigners. Also, look for those working in the area of a major university. Specific points: If I find none, can I work with a quaified person who lives in a different state and have him file my taxes on my behalf (electronically or via scans going back and forth) Yes. But that person my have a problem representing you in California (in case you're audited), unless he's an EA (licensed by the Federal government, can practice everywhere) or is licensed as a CPA or Attorney by the State of California. Is there a central registry of such quaified people I can view (preferably with reviews) - akin to \"\"yellow pages\"\" IRS is planning on opening one some time this year, but until then - not really. There are some commercial sites claiming to have that, but they're using the FOIA access to the IRS and states' listings, and may not have updated information. They definitely don't have updated license statuses (or any license statuses) or language/experience information. Wouldn't trust them.\"" }, { "docid": "140653", "title": "", "text": "There are certain situations where you could legally pay yourself rent, but it'd be in the context of multiple business entities interacting, never in the context of an individual renting their own property. Even if you could, any rent paid to yourself would count as rental income, so there'd be no benefit. Edit: I was hunting for examples where it might be acceptable, and didn't, but I found a good explanation as to why it is not acceptable from Brandon Hall on a BiggerPockets post: To get technical, you will be going up against the Economic Substance Doctrine which states that a transaction has economic substance if: (1) the transaction changes in a meaningful way (apart from Federal income tax effects) the taxpayer’s economic position; and (2) the taxpayer has a substantial purpose (apart from Federal income tax effects) for entering into such transaction. By transferring your primary residence into a LLC, you would not be changing your economic position. Further, you do not have a substantial purpose for entering into such transaction other than to simply avoid paying federal income taxes. So it might make sense if multiple people owned the LLC that owned the property you wanted to rent, and there are instances where company X owns holding company Y that owns an office building that company X rents space in. But if you're the sole player in the LLC's then it sounds like a no-go." }, { "docid": "56044", "title": "", "text": "\"When I was in this situation, I always did Married Filing Separately. In the space for spouse you just write \"\"non resident alien\"\". I'm assuming you don't make more than the Foreign Earned Income exclusion (about $100k), so the fact that you don't qualify for certain exemptions is probably irrelevant for you. As a side note, now that you are married you have \"\"a financial interest in\"\" all her bank accounts so if her and your foreign bank accounts had an aggregate value of over $10k at any point in 2015 you have until June 30th to file an FBAR, listing both her and your accounts. If you have a decent amount of assets you might need to fill out form 8938 with your tax return too. Here is a link with the reporting thresholds. https://www.irs.gov/Businesses/Corporations/Summary-of-FATCA-Reporting-for-U.S.-Taxpayers\"" }, { "docid": "451729", "title": "", "text": "Open an account with a US discount online broker, or with a European broker with access to the US market. I think ETRADE allow non-resident accounts, for instance, amongst others. The brokerage will be about $10, and there is no annual fee. (So you're ~1% down out of the gate, but that's not so much.) Brokers may have a minimum transaction value but very few exchanges care about the number of shares anymore, and there is no per-share fee. As lecrank notes, putting all your savings into a single company is not prudent, but having a flutter with fun money on Apple is harmless. Paul is correct that dividend cheques may be a slight problem for non-residents. Apple don't pay dividends so there's no problem in this specific case. More generally your broker will give you a cash account into which the dividends can go. You may have to deal with US tax which is more of an annoyance than a cost." }, { "docid": "276411", "title": "", "text": "This is a complicated question that relies on the US-India Tax Treaty to determine whether the income is taxable to the US or to India. The relevant provision is likely Article 15 on Personal Services. http://www.irs.gov/pub/irs-trty/india.pdf It seems plausible that your business is personal services, but that's a fact-driven question based on your business model. If the online training is 'personal services' provided by you from India, then it is likely foreign source income under the treaty. The 'fixed base' and '90 days' provisions in Article 15 would not apply to an India resident working solely outside the US. The question is whether your US LLC was a US taxpayer. If the LLC was a taxpayer, then it has an obligation to pay US tax on any worldwide income and it also arguably disqualifies you from Article 15 (which applies to individuals and firms of individuals, but not companies). If you were the sole owner of the US LLC, and you did not make a Form 8832 election to be treated as subject to entity taxation, then the LLC was a disregarded entity. If you had other owners, and did not make an election, then you are a partnership and I suspect but cannot conclude that the treaty analysis is still valid. So this is fact-dependent, but you may be exempt from US tax under the tax treaty. However, you may have still had an obligation to file Forms 1099 for your worker. You can also late-file Forms 1099 reporting the nonemployee compensation paid to your worker. Note that this may have tax consequences on the worker if the worker failed to report the income in those years." }, { "docid": "417455", "title": "", "text": "Many European countires allow you to an account for non-residents. You have to appear in the bank personally to open it, some of them even to get your own tax number for non-residents from the local government. I'm not sure if you get a Visa (Electron) chip card immediatelly or you have to wait for like 3 months before being issued one. I've heard that getting a tax number for non-residents and opening a bank account is easily done in one day in Brezice, Republic of Slovenia. They seem to have agile local bureaucracy and banks, since many pople from neighbouring (non-EU) countries (used to) come there to open an EU bank account. Funds can be transfered via Internet banking - US banks have that, do they? SWIFT and IBAN codes are used for international money transfer. But it takes some time (days!) for it to arrive to destination. Tansfers below $20000 per month or per transaction are considered normal, but for amouts above that the destination bank might ask you to explain the purpose, to prove it is not illegal. Some of them accept the explanaiton in writing (they forward it to the regulator that tracks such large transfers), some of them ask you to appear there in person for an interview and to sign a statement. Can't believe US banks are still issuing paing magnet stripe cards like it's still 1980s. I'd expect Europe to be 10 years behind USA in technology, but this seems to be a weird reverse. I've beed using Internet banking with one-time passwd tokens and TAN lists for almost 10 years, and chip cards exclusivley for over 5y. Can't remeber the last time I've seen mag stripe card only. American Express (event the regular green one) got the chip at least 5 years ago. And it is accepted regularly in Europe. Alegedly it's more popular in Europe (although Mastercard is a definite #1, with Visa close to that) that in USA." }, { "docid": "71338", "title": "", "text": "I am from India. I visited US 6-8 times on business VISA and then started 2 Member LLC. Myself and My wife as LLC Members. We provide Online Training to american students from India. Also Got EIN number. Never employed any one. Do i need to pay taxes? Students from USA pays online by Paypal and i am paying taxes in India. Do i need to pay Taxes in US? DO i need to file the Tax returns? Please guide me. I formed LLC in 2010. I opened an Office-taken Virtual office for 75 USD per month to open LLC in 2010. As there is physical virtual address, am i liable for US taxes? All my earning is Online, free lancing." }, { "docid": "216741", "title": "", "text": "\"If I understand you correctly, your logic goes wrong right at the beginning. It sounds like you think one could avoid the income tax that would otherwise be owed to the US because of earning the money that was sent as a gift. That's not normally true. From the IRS's Gift Tax FAQ: May I deduct gifts on my income tax return? Making a gift or leaving your estate to your heirs does not ordinarily affect your federal income tax. You cannot deduct the value of gifts you make (other than gifts that are deductible charitable contributions). So the person who sends $10k to their parents doesn't pay any less income tax than if they had kept the $10k in the US, or had just send the $10k overseas directly to their own bank account. Gifting and re-gifting didn't accomplish anything from the point of view of IRS taxes. You may have been confused by the \"\"annual exclusion\"\" that's mentioned on that same page. This exclusion is an exclusion for the gift tax. This is a separate tax on gifts, usually paid by the person who gives the gift. If it weren't for the exclusion, one would pay taxes twice on the money sent to their parents: first, when the money is earned, and then again when the gift is given. The exclusion helps avoid this second tax.\"" }, { "docid": "288993", "title": "", "text": "To build a US credit record, you need a Social Security Number (SSN), which is now not available for most non-residents. An alternative is an ITIN number, which is now available to non-residents only if they have US income giving a reason to file a US tax return (do you really want to get into all that...). Assuming you did have a reason to get a ITIN (one reason would be if you sold some ebooks via Amazon US, and need a withholding refund under the tax treaty), then recent reports on Flyertalk give mixed results on whether it's possible to get a credit card with an ITIN, and whether that would build a credit record. It does sound possible in some cases. A credit record in any other country would not help. You would certainly need a US address, and banks are increasingly asking for a physical address, rather than just a mailbox. Regardless, building this history would be of limited benefit to you if you later became a US resident, at that point you would be eligible for a new SSN (different from the ITIN) and have to largely start again. If getting a card is the aim, rather than the credit record, you may find some banks that will offer a secured card (or a debit card), to non-residents, especially in areas with lots of Canadian visitors (border, Florida, Arizona). You'd find it a lot easier with a US address though, and you'd need to shop around a lot of banks in person until you find one with the right rules. Most will simply avoid anyone without an SSN." }, { "docid": "588345", "title": "", "text": "\"This sounds like a FATCA issue. I will attempt to explain, but please confirm with your own research, as I am not a FATCA expert. If a foreign institution has made a policy decision not to accept US customers because of the Foreign Financial Institution (FFI) obligations under FATCA, then that will of course exclude you even if you are resident outside the US. The US government asserts the principle of universal tax jurisdiction over its citizens. The institution may have a publicly available FATCA policy statement or otherwise be covered in a new story, so you can confirm this is what has happened. Failing that, I would follow up and ask for clarification. You may be able to find an institution that accepts US citizens as investors. This requires some research, maybe some legwork. Renunciation of your citizenship is the most certain way to circumvent this issue, if you are prepared to take such a drastic step. Such a step would require thought and planning. Note that there would be an expatriation tax (\"\"exit tax\"\") that deems a disposition of all your assets (mark to market for all your assets) under IRC § 877. A less direct but far less extreme measure would be to use an intermediary, either one that has access or a foreign entity (i.e. non-US entity) that can gain access. A Non-Financial Foreign Entity (NFFE) is itself subject to withholding rules of FATCA, so it must withhold payments to you and any other US persons. But the investing institutions will not become FFIs by paying an NFFE; the obligation rests on the FFI. PWC Australia has a nice little writeup that explains some of the key terms and concepts of FATCA. Of course, the simplest solution is probably to use US institutions, where possible. Non-foreign entities do not have foreign obligations under FATCA.\"" }, { "docid": "411606", "title": "", "text": "\"A loan is not a taxable income. Neither is a gift. Loans are repaid with interest. The interest is taxable income to the lender, and may or may not be deductible to the borrower, depending on how the loan proceeds were used. Gifts are taxable to the donor (the person giving the gift) under the gift tax, they're not a taxable income to the recipient. Some gifts are exempt or excluded from gift tax (there's the annual exemption limit, lifetime exclusion which is correlated to the estate tax, various specific purpose gifts or transfers between spouses are exempt in general). If you trade for something of equal value, is that considered income? Yes. Sale proceeds are taxable income, however your basis in the item sold is deductible from it. If you borrow a small amount of money for a short time, is that considered income? See above. Loan proceeds are not income. does the friend have to pay taxes when they get back their $10? No, repayment of the loan is not taxable income. Interest on it is. Do you have to pay taxes if you are paid back in a different format than originally paid? Form of payment doesn't matter. Barter trade doesn't affect the tax liability. The friend sold you lunches and you paid for them. The friend can deduct the cost of the lunches from the proceeds. What's left - is taxable income. Everything is translated to the functional currency at the fair market value at the time of the trade. you are required to pay taxes on the gross amount Very rarely taxes apply to gross income. Definitely not the US Federal Income taxes for individuals. An example of an exception would be the California LLC taxes. The State of California taxes LLCs under its jurisdiction on gross proceeds, regardless of the actual net income. This is very uncommon. However, the IRC (the US Federal Tax Code) is basically \"\"everything is taxable except what's not\"\", and the cost of generating income is one of the \"\"what's not\"\". That is why you can deduct the basis of the asset from your gross proceeds when you sell stuff and only pay taxes on the net difference.\"" }, { "docid": "129503", "title": "", "text": "\"You're conflating LLC with Corporation. They're different animals. LLC does not have \"\"S\"\" or \"\"C\"\" designations, those are just for corporations. I think what you're thinking about is electing pass through status with the IRS. This is the easiest way to go. The company can pay you at irregular intervals in irregular amounts. The IRS doesn't care about these payments. The company will show profit or loss at the end of the year (those payments to you aren't expenses and don't reduce your profit). You report this on your schedule C and pay tax on that amount. (Your state tax authority will have its own rules about how this works.) Alternatively you can elect to have the LLC taxed as a corporation. I don't know of a good reason why someone in your situation would do this, but I'm not an accountant so there may be reasons out there. My recommendation is to get an accountant to prepare your taxes. At least once -- if your situation is the same next year you can use the previous year's forms to figure out what you need to fill in. The investment of a couple hundred dollars is worthwhile. On the question of buying a home in the next couple of years... yes, it does affect things. (Pass through status? Probably doesn't affect much.) If all of your income is coming from self-employment, be prepared for hassles when you are shopping for a mortgage. You can ask around, maybe you have a friendly loan officer at your credit union who knows your history. But in general they will want to see at least two years of self-employment tax returns. You can plan for this in advance: talk to a couple of loan officers now to see what the requirements will be. That way you can plan to be ready when the time comes.\"" }, { "docid": "308048", "title": "", "text": "It is absolutely legal. While studying on a F-1 you would typically be considered a non-resident alien for tax purposes. You can trade stocks, just like any other foreigner having an account with a US- or non-US based brokerage firm. Make sure to account for profit made on dividends/capital gain when doing your US taxes. A software package provided by your university for doing taxes might not be adequate for this." }, { "docid": "46386", "title": "", "text": "Do I need to declare it to IRS? The account? No. You do need to file a form W8-BEN with the bank though and make sure you maintain the correct information on it (it has your address there, so if you move - update it). Your account may be frozen until the form is provided, especially if it has activity on it. The 2-nd and 3-rd scenario would come as a result of some freelancing activity done while I am out of the US (definitely would qualify for Non-Resident Alien status). This you do have to report to the IRS. I'm guessing the payer is in the US, and would not know that you're a foreigner. In this case you're liable for taxes (if the payer knows you're a foreigner - they must withhold the taxes on your behalf). The payer will report payments to the IRS, so you have to submit your own tax return for a match. If there's activity on your account that might be suspicious, it will be reported to money laundering unit in the US Treasury Department, that may come after you through the treaties the US might have with your home country (tax treaty, extradition treaty, etc)." }, { "docid": "341220", "title": "", "text": "\"No, there are no issues. When you form the corp in DE, you pick a business there to serve as your \"\"agent\"\" (essentially someone who knows to get in contact with you). The \"\"agent\"\" will notify you about taxes and any mail you get, but besides the fee they charge you for being the agent, you should file all the taxes directly with DE (franchise tax is easy to file on the web) instead of going through the agent and paying a surcharge. When your LLC files taxes, you'll do so in DE and then the LLC will issue you a federal and state K1. You'll file taxes where you reside and use the federal K1, but I think you might have to file DE state taxes (unsure about this part, feel free to edit or comment and I'll correct).\"" }, { "docid": "397449", "title": "", "text": "You can keep your Mutual Funds. You have to communicate your new status to fund house. The SIP can continue. Please note you have to convert the savings account to NRO account. Most banks would keep the account number same, else you have to revise SIP debit to new NRO account. From a tax point of view, it would be similar to resident status. Right now short term gains are taxed. There are quite a few other things you may need to do. Although dated, this is a good article. PS: Once you become resident alien in US for tax purposes, you are liable for taxes on global income." }, { "docid": "30596", "title": "", "text": "Answering for US tax only: The bank account makes absolutely zero difference. If you are not a US national and not resident in the US, but earn income from a US employer/client/customer, generally that income is not subject to US tax (no matter where it is banked). However there are (complicated) exceptions, particularly if you are considered to be operating a 'trade or business' in the US or US real estate is involved. Start at https://www.irs.gov/individuals/international-taxpayers/nonresident-aliens and proceed through pub 519 if you have time to spend. I do not know (or answer) about Argentinian taxes. Whether you can find a US bank that wants to open and maintain an account for a foreigner (which is extra paperwork and regulation for them) is a different Q, that is already asked and answered: B1/B2 visas do not allow you to work, but that isn't really in scope of money.SX and belongs over on travel.SX (or expatriates.SX for longer stay); https://travel.stackexchange.com/questions/25416/work-as-freelancer-while-tourist-in-us-for-an-already-existing-us-client seems to cover it." }, { "docid": "544992", "title": "", "text": "As a gift, the responsibility lays with the giver to file a 709 with their taxes for gifting to a single entity (barring certain exclusions) an amount over $14,000 within the (2017) tax year. https://www.irs.gov/pub/irs-pdf/i709.pdf If this person is a foreign entity from outside the country, you might need to provide in your tax filing a form 3520 https://www.irs.gov/businesses/gifts-from-foreign-person The reporting limits are: more than $100,000 from a foreign estate or non-resident alien, or more than $15,102 from a foreign company. If you don't know who/where the money came from i.e. cash, it would be considered found money and fall under income (not a gift)." } ]

[ { "docid": "192332", "title": "", "text": "\"Since as you say, an LLC is a pass-through entity, you will be making income in the U.S. when you sell to U.S. customers. And so you will need to file the appropriate personal tax forms in the US. As well as potentially in one or more States. The US government does not register LLCs. The various States do. So you'll be dealing with Oregon, Wisconsin, Wyoming, one of those for the LLC registration. You will also need to have a registered agent in the State. That is a big deal since the entire point of forming an LLC is to add a liability shield. You would lose the liability shield by not maintaining the business formalities. Generally nations aim to tax income made in their nation, and many decline to tax income that you've already paid taxes on in another nation. A key exception: If money is taxed by the U.S. it may also be taxed by one of the States. Two States won't tax the same dollar. Registering an LLC in one State does not mean you'll pay state taxes there. Generally States tax income made in their State. It's common to have a Wyoming LLC that never pays a penny of tax in Wyoming. Officially, an LLC doing business in a State it did not form in, must register in that State as a \"\"foreign LLC\"\" even though it's still in the USA. The fee is usually the same as for a domestic LLC. \"\"Doing business\"\" means something more than incidental sales, it means having a presence specifically in the State somehow. It gets complicated quick. If you are thinking of working in someone's app ecosystem like the Apple Store, Google Play, Steam etc. Obviously they want their developers coding, not wrestling with legalities, so some of them make a priority out of clearing and simplifying legal nuisances for you. Find out what they do for you.\"" } ]

[ { "docid": "308048", "title": "", "text": "It is absolutely legal. While studying on a F-1 you would typically be considered a non-resident alien for tax purposes. You can trade stocks, just like any other foreigner having an account with a US- or non-US based brokerage firm. Make sure to account for profit made on dividends/capital gain when doing your US taxes. A software package provided by your university for doing taxes might not be adequate for this." }, { "docid": "438666", "title": "", "text": "When you sell your primary residence, you are required to capitalize any loss or gain at that point; you do not carry over your loss or gain (as you might in an investment property). As such, the timing of the purchase of the next house is not relevant in this discussion: you gained however much you gained already. This changed from the other (rollover) method in 1997 (see this bankrate article for more details.) However, as discussed in IRS Tax Topic 701, you can exclude up to $250,000 (single or filing separately) or $500,000 (married filing jointly) of gain if it is your primary residence and meets a few requirements (mostly, that you owned it for at least 2 years in the past 5 years, and similarly used it as your main home for at least 2 years of the past 5 years). So given you reported 25% gain, as long as your house is under a million dollars or so, you're fine (and if it's over a million dollars, you probably should be paying a CPA for this stuff). For California state tax, it looks like it is the same (see this Turbotax forum answer for a good explanation and links to this California Franchise Tax Board guide which confirms it: For sale or exchanges after May 6, 1997, federal law allows an exclusion of gain on the sale of a personal residence in the amount of $250,000 ($500,000 if married filing jointly). The taxpayer must have owned and occupied the residence as a principal residence for at least 2 of the 5 years before the sale. California conforms to this provision. However, California taxpayers who served in the Peace Corps during the 5 year period ending on the date of the sale may reduce the 2 year period by the period of service, not to exceed 18 months." }, { "docid": "288145", "title": "", "text": "*Disclaimer: I am a tax accountant , but I am not your professional accountant or advocate (unless you have been in my office and signed a contract). This communication is not intended as tax advice, and no tax accountant / client relationship results. *Please consult your own tax accountant for tax advise.** A foreign citizen may form a limited liability company. In contrast, all profit distributions (called dividends) made by a C corporation are subject to double taxation. (Under US tax law, a nonresident alien may own shares in a C corporation, but may not own any shares in an S corporation.) For this reason, many foreign citizens form a limited liability company (LLC) instead of a C corporation A foreign citizen may be a corporate officer and/or director, but may not work/take part in any business decisions in the United States or receive a salary or compensation for services provided in the United States unless the foreign citizen has a work permit (either a green card or a special visa) issued by the United States. Basically, you should be looking at benefiting only from dividends/pass-through income but not salaries or compensations." }, { "docid": "140653", "title": "", "text": "There are certain situations where you could legally pay yourself rent, but it'd be in the context of multiple business entities interacting, never in the context of an individual renting their own property. Even if you could, any rent paid to yourself would count as rental income, so there'd be no benefit. Edit: I was hunting for examples where it might be acceptable, and didn't, but I found a good explanation as to why it is not acceptable from Brandon Hall on a BiggerPockets post: To get technical, you will be going up against the Economic Substance Doctrine which states that a transaction has economic substance if: (1) the transaction changes in a meaningful way (apart from Federal income tax effects) the taxpayer’s economic position; and (2) the taxpayer has a substantial purpose (apart from Federal income tax effects) for entering into such transaction. By transferring your primary residence into a LLC, you would not be changing your economic position. Further, you do not have a substantial purpose for entering into such transaction other than to simply avoid paying federal income taxes. So it might make sense if multiple people owned the LLC that owned the property you wanted to rent, and there are instances where company X owns holding company Y that owns an office building that company X rents space in. But if you're the sole player in the LLC's then it sounds like a no-go." }, { "docid": "353926", "title": "", "text": "Yes, you can still file a 1040nr. You are a nonresident alien and were: engaged in a trade or business in the United States Normally, assuming your withholding was correct, you would get a minimal amount back. Income earned in the US is definitely Effectively Connected Income and is taxed at the graduated rates that apply to U.S. citizens and resident aliens. However, there is a tax treaty between US and India, and it suggests that you would be taxed on the entirety of the income by India. This suggests to me that you would get everything that was withheld back." }, { "docid": "397449", "title": "", "text": "You can keep your Mutual Funds. You have to communicate your new status to fund house. The SIP can continue. Please note you have to convert the savings account to NRO account. Most banks would keep the account number same, else you have to revise SIP debit to new NRO account. From a tax point of view, it would be similar to resident status. Right now short term gains are taxed. There are quite a few other things you may need to do. Although dated, this is a good article. PS: Once you become resident alien in US for tax purposes, you are liable for taxes on global income." }, { "docid": "288993", "title": "", "text": "To build a US credit record, you need a Social Security Number (SSN), which is now not available for most non-residents. An alternative is an ITIN number, which is now available to non-residents only if they have US income giving a reason to file a US tax return (do you really want to get into all that...). Assuming you did have a reason to get a ITIN (one reason would be if you sold some ebooks via Amazon US, and need a withholding refund under the tax treaty), then recent reports on Flyertalk give mixed results on whether it's possible to get a credit card with an ITIN, and whether that would build a credit record. It does sound possible in some cases. A credit record in any other country would not help. You would certainly need a US address, and banks are increasingly asking for a physical address, rather than just a mailbox. Regardless, building this history would be of limited benefit to you if you later became a US resident, at that point you would be eligible for a new SSN (different from the ITIN) and have to largely start again. If getting a card is the aim, rather than the credit record, you may find some banks that will offer a secured card (or a debit card), to non-residents, especially in areas with lots of Canadian visitors (border, Florida, Arizona). You'd find it a lot easier with a US address though, and you'd need to shop around a lot of banks in person until you find one with the right rules. Most will simply avoid anyone without an SSN." }, { "docid": "107536", "title": "", "text": "Supposedly this also means that I am free from having to pay California corporate taxes? Not in the slightest. Since you (the corporate employee) reside in CA - the corporation is doing business in CA and is liable for CA taxes. Or, does this mean I am required to pay both CA taxes and Delaware fees? (In this case, minimal, just a paid agent from incorporate.com) I believe DE actually does have corporate taxes, check it out. But the bottom line is yes, you're liable for both CA and DE costs of doing corporate business (income taxes, registered agents, CA corp fee, etc). Is there any benefit at all for me to be a Delaware C-Corp or should I dissolve and start over. Or just re-incorporate as California LLC Unless you intend to go public anytime soon or raise money from VCs/investors - there's no benefit whatsoever in incorporating in DE. You should seek a legal advice with an attorney, of course, since benefits are legal issues (usually related to choosing jurisdiction for litigation etc). If you're a one-person freelancer, doing C-Corp was not the best decision as well. Tax-wise you'd be much better off with a S-Corp, or a LLC - both pass-through and have no (Federal) entity-level taxes. Corporate rates are generally higher than individual rates, and less deductions can be taken. In California, check with a CPA/EA licensed in the State, since both S-Corp and LLC would be taxed, and taxed differently." }, { "docid": "507107", "title": "", "text": "A non-resident alien is only allowed for deductions connected to producing a US-sourced income (See IRC Sec. 873). Thus you can only deduct things that qualify as business expenses, and State taxes on your wages. In addition you can deduct a bunch of stuff explicitly allowed (like tax preparation, charitable contributions, casualty losses, etc) but sales tax is not in that list." }, { "docid": "30596", "title": "", "text": "Answering for US tax only: The bank account makes absolutely zero difference. If you are not a US national and not resident in the US, but earn income from a US employer/client/customer, generally that income is not subject to US tax (no matter where it is banked). However there are (complicated) exceptions, particularly if you are considered to be operating a 'trade or business' in the US or US real estate is involved. Start at https://www.irs.gov/individuals/international-taxpayers/nonresident-aliens and proceed through pub 519 if you have time to spend. I do not know (or answer) about Argentinian taxes. Whether you can find a US bank that wants to open and maintain an account for a foreigner (which is extra paperwork and regulation for them) is a different Q, that is already asked and answered: B1/B2 visas do not allow you to work, but that isn't really in scope of money.SX and belongs over on travel.SX (or expatriates.SX for longer stay); https://travel.stackexchange.com/questions/25416/work-as-freelancer-while-tourist-in-us-for-an-already-existing-us-client seems to cover it." }, { "docid": "23747", "title": "", "text": "\"IRS Pub 554 states (click to read full IRS doc): \"\"Do not file a federal income tax return if you do not meet the filing requirements and are not due a refund. ... If you are a U.S. citizen or resident alien, you must file a return if your gross income for the year was at least the amount shown on the appropriate line in Table 1-1 below. \"\" You may not have wage income, but you will probably have interest, dividend, capital gains, or proceeds from sale of a house (and there is a special note that you must file in this case, even if you enjoy the exclusion for primary residence)\"" }, { "docid": "136932", "title": "", "text": "No, if you are a nonresident alien, you cannot deduct sales tax. You can only deduct state income tax. 1040NR Schedule A (which is page 3 of 1040NR) does not contain an option for sales tax, like 1040 Schedule A does. If you are a resident alien, then you can deduct sales tax." }, { "docid": "129503", "title": "", "text": "\"You're conflating LLC with Corporation. They're different animals. LLC does not have \"\"S\"\" or \"\"C\"\" designations, those are just for corporations. I think what you're thinking about is electing pass through status with the IRS. This is the easiest way to go. The company can pay you at irregular intervals in irregular amounts. The IRS doesn't care about these payments. The company will show profit or loss at the end of the year (those payments to you aren't expenses and don't reduce your profit). You report this on your schedule C and pay tax on that amount. (Your state tax authority will have its own rules about how this works.) Alternatively you can elect to have the LLC taxed as a corporation. I don't know of a good reason why someone in your situation would do this, but I'm not an accountant so there may be reasons out there. My recommendation is to get an accountant to prepare your taxes. At least once -- if your situation is the same next year you can use the previous year's forms to figure out what you need to fill in. The investment of a couple hundred dollars is worthwhile. On the question of buying a home in the next couple of years... yes, it does affect things. (Pass through status? Probably doesn't affect much.) If all of your income is coming from self-employment, be prepared for hassles when you are shopping for a mortgage. You can ask around, maybe you have a friendly loan officer at your credit union who knows your history. But in general they will want to see at least two years of self-employment tax returns. You can plan for this in advance: talk to a couple of loan officers now to see what the requirements will be. That way you can plan to be ready when the time comes.\"" }, { "docid": "116181", "title": "", "text": "\"If you are a permanent resident (and it wasn't taken away or abandoned), then you are a resident alien for U.S. tax purposes. (One of the two tests for being a resident alien is the \"\"green card test\"\".) Being a resident alien means all your worldwide income is subject to U.S. taxes, regardless of where you live or work. That doesn't necessarily mean you need to actually pay taxes on your income again if you've already paid it -- you may be able to use the Foreign Tax Credit to reduce your taxes by the amount already paid to a foreign government -- but you need to report it on U.S. tax forms just like income from the U.S., and you can then apply any tax credits that you may qualify for. As a resident alien, you file taxes using Form 1040. You are required to file taxes if your income for a particular year is above a certain threshold. This threshold is described in the first few pages of the 1040 instructions for each year. For 2013, for Single filing status under 65, it is $10000. The only way you can legally not file is if your income the whole year was below this amount. You should go back and file taxes if you were required to but failed to. Having filed taxes when required is very important if you want to naturalize later on. It is also one component of demonstrating you're maintaining residency in the U.S., which you're required to do as a permanent resident being outside the U.S. for a long time, or else you'll lose your permanent residency. (Even filing taxes might not be enough, as your description of your presence in the U.S. shows you only go there for brief periods each year, not really living there. You're lucky you haven't lost your green card already; any time you go there you run a great risk of them noticing and taking it away.)\"" }, { "docid": "417455", "title": "", "text": "Many European countires allow you to an account for non-residents. You have to appear in the bank personally to open it, some of them even to get your own tax number for non-residents from the local government. I'm not sure if you get a Visa (Electron) chip card immediatelly or you have to wait for like 3 months before being issued one. I've heard that getting a tax number for non-residents and opening a bank account is easily done in one day in Brezice, Republic of Slovenia. They seem to have agile local bureaucracy and banks, since many pople from neighbouring (non-EU) countries (used to) come there to open an EU bank account. Funds can be transfered via Internet banking - US banks have that, do they? SWIFT and IBAN codes are used for international money transfer. But it takes some time (days!) for it to arrive to destination. Tansfers below $20000 per month or per transaction are considered normal, but for amouts above that the destination bank might ask you to explain the purpose, to prove it is not illegal. Some of them accept the explanaiton in writing (they forward it to the regulator that tracks such large transfers), some of them ask you to appear there in person for an interview and to sign a statement. Can't believe US banks are still issuing paing magnet stripe cards like it's still 1980s. I'd expect Europe to be 10 years behind USA in technology, but this seems to be a weird reverse. I've beed using Internet banking with one-time passwd tokens and TAN lists for almost 10 years, and chip cards exclusivley for over 5y. Can't remeber the last time I've seen mag stripe card only. American Express (event the regular green one) got the chip at least 5 years ago. And it is accepted regularly in Europe. Alegedly it's more popular in Europe (although Mastercard is a definite #1, with Visa close to that) that in USA." }, { "docid": "344928", "title": "", "text": "\"Wyoming is a good state for this. It is inexpensive and annual compliance is minimal. Although Delaware has the best advertising campaign, so people know about it, the reality is that there are over 50 states/jurisdictions in the United States with their own competitive incorporation laws to attract investment (as well as their own legislative bodies that change those laws), so you just have to read the laws to find a state that is favorable for you. What I mean is that whatever Delaware does to get in the news about its easy business laws, has been mimicked and done even better by other states by this point in time. And regarding Delaware's Chancery Court, all other states in the union can also lean on Delaware case law, so this perk is not unique to Delaware. Wyoming is cheaper than Delaware for nominal presence in the United States, requires less information then Delaware, and is also tax free. A \"\"registered agent\"\" can get you set up and you can find one to help you with the address dilemma. This should only cost $99 - $200 over the state fees. An LLC does not need to have an address in the United States, but many registered agents will let you use their address, just ask. Many kinds of businesses still require a bank account for domestic and global trade. Many don't require any financial intermediary any more to receive payments. But if you do need this, then opening a bank account in the United States will be more difficult. Again, the registered agent or lawyer can get a Tax Identification Number for you from the IRS, and this will be necessary to open a US bank account. But it is more likely that you will need an employee or nominee director in the United States to go in person to a bank and open an account. This person needs to be mentioned in the Operating Agreement or other official form on the incorporation documents. They will simply walk into a bank with your articles of incorporation and operating agreement showing that they are authorized to act on behalf of the entity and open a bank account. They then resign, and this is a private document between the LLC and the employee. But you will be able to receive and accept payments and access the global financial system now. A lot of multinational entities set up subsidiaries in a number of countries this way.\"" }, { "docid": "362778", "title": "", "text": "The major reason to start an LLC for side work is if you want the additional personal liability protection afforded by one. If you're operating as a sole proprietor, you may be exposing yourself to liability: debts and judgments against your business can put your personal assets at risk! So, if you're intending to continue and grow your side work in the future, you ought to consider the LLC sooner than later. It's also an important legal decision and you should consider seeking a professional opinion. The Wall Street Journal has a brief guide titled How to Form an LLC. Here are some notable excerpts: A limited liability company, or LLC, is similar to a partnership but has the legal protections of personal assets that a corporation offers without the burdensome formalities, paperwork and fees. [...] Some states charge annual fees and taxes that can diminish the economic advantage of choosing to become an LLC. Among LLC advantages: pass-through taxation – meaning the profits and losses “pass through” the business to the individuals owning the business who report this information on their own personal tax returns. The result can be paying less in taxes, since profits are not taxed at both the business level and the personal level. Another plus: Owners aren’t usually responsible for the company’s debts and liabilities. [...] Also check out onstartups.com's Startup 101: Should You Form An Inc. or An LLC? Here are some additional articles that discuss the advantages / disadvantages of forming an LLC:" }, { "docid": "446190", "title": "", "text": "\"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.\"" }, { "docid": "110862", "title": "", "text": "\"For Non-Resident filers, New York taxes New York-sourced income. That includes: real or tangible personal property located in New York State (including certain gains or losses from the sale or exchange of an interest in an entity that owns real property in New York State); services performed in New York State; a business, trade, profession, or occupation carried on in New York State; and a New York S corporation in which you are a shareholder (including installment income from an IRC 453 transaction). There are some exclusions as well. It is all covered in the instructions to form IT-203. However, keep in mind that \"\"filing\"\" as non-resident doesn't make you non-resident. If you spend 184 days or more in New York State, and you have a place to stay there - you are resident. See definitions here. Even if you don't actually live there and consider yourself a CT resident.\"" } ]

[ { "docid": "422770", "title": "", "text": "Run the numbers in advance. Understand what are the current rates for an additional 2nd mortgage, what are the rates for a brand new mortgage that will cover the additional funds. Understand what they are for another lender. Estimate the amount of paperwork involved in each option (new first, new 2nd, and new lender). Ask the what are the options they can offer you. Because you have estimated the costs in money and time for the different options, you can evaluate the offer they make. What they offer you can range from everything you want to nothing you would accept. What they offer will depend on several factors: Do they care to keep you as a customer?; Do they expect you to walk away?; are they trying to get rid of mortgages like the one you have?; Can they make more money with the plan they are offering you? You will be interested in the upfront costs, the monthly costs, and the amount of time required for the process to be completed." } ]

[ { "docid": "100039", "title": "", "text": "I Usually would not say this but if you can just put down 20% I would do that and get a 15 year mortgage. The rates are so low on 15 year mortgage that you should be able to make more than the 3% in the market per year and make some money. I wouldn't be surprised if for 1/2 of the term of your loan you will be able to make that just in interest. Basically I have done this for my house and my rental properties. So I have put my money where my mouth is on this. I have made over 9% each of the last three years which has made me $12,000 dollars above and beyond over what I would have paid in interest per year. So it a decision that net me $36,000 for doing nothing. Now the market is going to be down some of those years so lets see how it works out but I have history on my side. Its not about timing the market its about time in the market. And 15 years in the market is a pretty safe bet albeit not as safe as just dumping you money in the mortgage." }, { "docid": "591163", "title": "", "text": "Lenders pay attention to where your down payment money comes from. If they see a large transfer of money into your bank account within about a year before your purchase, this WILL cause an issue for you. Down payments are not just there to make the principal smaller; they are primarily used as an underwriting data-point to assess your quality as a borrower. If you take the money as loan, it will count against your credit worthiness. If you take the money as a gift, it will raise some other red flags. All of this is done for a reason: if you can't get a down payment, you are a higher credit risk (poor discipline, lack of consistent income), even if you can (currently) pay the monthly cost of a mortgage. (PS - The cost of home ownership is much higher than the monthly mortgage payment.) Will all this mean you WON'T get a loan? Of course not. You can almost always get SOME loan. But it will likely be at a higher rate than you otherwise would qualify for if you just waited a little bit and saved money for a down payment. (Another option: cheaper house.) EDIT: The below comments provide examples where gifts were/are NOT a problem. My experience from buying a house just a few years ago (and my several friends who bought house in the same period, some with family gifts and some without) is that it IS an issue. Your best bet is to TALK, IN PERSON with an actual mortgage broker in your area who can go through the options with you, and the downsides to various approaches." }, { "docid": "263956", "title": "", "text": "\"This is the best tl;dr I could make, [original](http://www.slate.com/articles/business/moneybox/2017/07/why_can_t_americans_get_a_raise.html) reduced by 94%. (I'm a bot) ***** &gt; While several states raised the minimum wage, the federal wage floor remained stuck at $7.25. &gt; Someone out of work for a year-and who had difficulty making mortgage payments as a result-is more likely to take the first job he could get, try to hold on to it for dear life, and accept poorer wages because the alternative to not having the job is difficult to imagine. &gt; Policy can certainly help: The $15 minimum wage movement we&amp;#039;re seeing in many cities and states will certainly push some employers to raise wages. ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/6ncd7p/what_westaboos_dont_wanna_see_why_cant_americans/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ \"\"Version 1.65, ~166969 tl;drs so far.\"\") | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr \"\"PM's and comments are monitored, constructive feedback is welcome.\"\") | *Top* *keywords*: **wage**^#1 **work**^#2 **job**^#3 **company**^#4 **American**^#5\"" }, { "docid": "255329", "title": "", "text": "You cannot do this as per the reasons mentioned by others above, mainly foreign banks cannot hold mortgages over properties in other countries. If this was possible to do, don't you think many others would be applying overseas for mortgages and loans. And even if it was possible the overseas bank would give you a comparative rate to compete with the rates already offered in Australia (to compensate with the extra risks). If you cannot afford to purchase a property at record low rates of below 5% in Australia, then you may want to re-think your strategy." }, { "docid": "108434", "title": "", "text": "&gt; So, why are you against Trump? I've answered almost all your questions up until this point. How about you answer my two? 1) [Did President Trump say he thought Medicare Part-D should use its market share to negotiate drug prices, enter a room with executives from the pharmaceutical industry, and then come out saying he now opposed Medicare doing so](http://www.chicagotribune.com/business/ct-trump-drug-costs-20170202-story.html)? Yes or no? 2) Has President Trump created, championed, or even backed any policy that would require the United States to take active steps to prepare for the upcoming problems caused by global warming? Yes or no?" }, { "docid": "206258", "title": "", "text": "\"First off; I don't know of the nature of the interpersonal relationship between you and your roommate, and I don't really care, but I will say that your use of that term was a red flag to me, and it will be so to a bank; buying a home is a big deal that you normally do not undertake with just a \"\"friend\"\" or \"\"roommate\"\". \"\"Spouses\"\", \"\"business partners\"\", \"\"domestic partners\"\" etc are the types of people that go in together on a home purchase, not \"\"roommates\"\". Going \"\"halvsies\"\" on a house is not something that's easily contracted; you can't take out two primary mortgages for half the house's value each, because you can't split the house in half, so if one of you defaults that bank takes the house leaving both the other person and their bank in the lurch. Co-signing on one mortgage is possible but then you tie your credit histories together; if one of you can't make their half of the mortgage, both of you can be pursued for the full amount and both of you will see your credit tank. That's not as big a problem for two people joined in some other way (marriage/family ties) but for two \"\"friends\"\" there's just way too much risk involved. Second, I don't know what it's like in your market, but when I was buying my first house I learned very quickly that extended haggling is not really tolerated in the housing market. You're not bidding on some trade good the guy bought wholesale for fifty cents and is charging you $10 for; the seller MIGHT be breaking even on this thing. An offer that comes in low is more likely to be rejected outright as frivolous than to be countered. It's a fine line; if you offer a few hundred less than list the seller will think you're nitpicking and stay firm, while if you offer significantly less, the seller may be unable to accept that price because it means he no longer has the cash to close on his new home. REOs and bank-owned properties are often sold at a concrete asking price; the bank will not even respond to anything less, and usually will not even agree to eat closing costs. Even if it's for sale by owner, the owner may be in trouble on their own mortgage, and if they agree to a short sale and the bank gets wind (it's trivial to match a list of distressed mortgaged properties with the MLS listings), the bank can swoop in, foreclose the mortgage, take the property and kill the deal (they're the primary lienholder; you don't \"\"own\"\" your house until it's paid for), and then everybody loses. Third, housing prices in this economy, depending on market, are pretty depressed and have been for years; if you're selling right now, you are almost certainly losing thousands of dollars in cash and/or equity. Despite that, sellers, in listing their home, must offer an attractive price for the market, and so they are in the unenviable position of pricing based on what they can afford to lose. That again often means that even a seller who isn't a bank and isn't in mortgage trouble may still be losing thousands on the deal and is firm on the asking price to staunch the bleeding. Your agent can see the signs of a seller backed against a wall, and again in order for your offer to be considered in such a situation it has to be damn close to list. As far as your agent trying to talk you into offering the asking price, there's honestly not much in it for him to tell you to bid higher vs lower. A $10,000 change in price (which can easily make or break a deal) is only worth $300 to him either way. There is, on the other hand, a huge incentive for him to close the deal at any price that's in the ballpark: whether it's $365k or $375k, he's taking home around $11k in commission, so he's going to recommend an offer that will be seriously considered (from the previous points, that's going to be the asking price right now). The agent's exact motivations for advising you to offer list depend on the exact circumstances, typically centering around the time the house has been on the market and the offer history, which he has access to via his fellow agents and the MLS. The house may have just had a price drop that brings it below comparables, meaning the asking price is a great deal and will attract other offers, meaning you need to move fast. The house may have been offered on at a lower price which the seller is considering (not accepted not rejected), meaning an offer at list price will get you the house, again if you move fast. Or, the house may have been on the market for a while without a price drop, meaning the seller can go no lower but is desperate, again meaning an offer at list will get you the house. Here's a tip: virtually all offers include a \"\"buyer's option\"\". For a negotiated price (typically very small, like $100), from the moment the offer is accepted until a particular time thereafter (one week, two weeks, etc) you can say no at any time, for any reason. During this time period, you get a home inspection, and have a guy you trust look at the bones of the house, check the basic systems, and look for things that are wrong that will be expensive to fix. Never make an offer without this option written in. If your agent says to forego the option, fire him. If the seller wants you to strike the option clause, refuse, and that should be a HUGE red flag that you should rescind the offer entirely; the seller is likely trying to get rid of a house with serious issues and doesn't want a competent inspector telling you to lace up your running shoes. Another tip: depending on the pricepoint, the seller may be expecting to pay closing costs. Those are traditionally the buyer's responsibility along with the buyer's agent commission, but in the current economy, in the pricepoint for your market that attracts \"\"first-time homebuyers\"\", sellers are virtually expected to pay both of those buyer costs, because they're attracting buyers who can just barely scrape the down payment together. $375k in my home region (DFW) is a bit high to expect such a concession for that reason (usually those types of offers come in for homes at around the $100-$150k range here), but in the overall market conditions, you have a good chance of getting the seller to accept that concession if you pay list. But, that is usually an offer made up front, not a weapon kept in reserve, so I would have expected your agent to recommend that combined offer up front; list price and seller pays closing. If you offer at list you don't expect a counter, so you wouldn't keep closing costs as a card to play in that situation.\"" }, { "docid": "54945", "title": "", "text": "How can people afford 10% mortgage? Part of the history of housing prices was the non-bubble component of the bubble. To be clear, there was a housing bubble and crash. Let me offer some simple math to illustrate my point - This is what happened on the way down. A middle class earner, $60K/yr couple, using 25% of their income, the normal percent for a qualified mortgage, was able to afford $142K for the mortgage payment. At 10% fixed rate. This meant that after down payment, they were buying a house at $175K or so, which was above median home pricing. Years later, obviously, this wasn't a step function, with a rate of 4%, and ignoring any potential rise of income, as in real term, income was pretty stagnant, the same $1250/mo could pay for a $260K mortgage. If you want to say that taxes and insurance would push that down a bit, sure, drop the loan to $240K, and the house price is $300K. My thesis ('my belief' or 'proposal', I haven't written a scholarly paper, yet) is that the relationship between median home price and median income is easily calculated based on current 30 year fixed rate loans. For all the talk of housing prices, this is the long term number. Housing cannot exceed income inflation long term as it would creep up as a percent of income and slow demand. I'm not talking McMansion here, only the median. By definition, the median house targets the median earners, the middle class. The price increase I illustrate was just over 70%. See the famous Shiller chart - The index move from 110 to 199 is an 81% rise. I maintain, 70 of that 81 can be accounted for by my math. Late 80's, 1987 to be exact, my wife got a mortgage for 9%, and we thought that was ok, as I had paid over 13% just 3 years earlier." }, { "docid": "562463", "title": "", "text": "I would guess that before the spin-off, more money would be available In my experience the reverse is true. The finance folks go into overdrive tightening everything up so that budget forecasts for the transition period are as accurate and predictable as possible. This can be true 6 months out, 12 months out, etc - depending on the size and complexity of the business. So in terms of when to renegotiate, I think approaching the issue after the dust has settled is more realistic. Make sure you know your numbers as per normal and just remember that after the spin-off has occurred it's a business like any other business: if you are in position to negotiate (and reasonably expect) a raise then the fact that they spun off recently - a month or two before - is meaningless to the negotiation." }, { "docid": "150607", "title": "", "text": "\"In England, currently and for most of the last fifty years, the standard length of the mortgage term is 25 years. A mortgage can be either a capital-and-interest mortgage, or interest-only. In the former, you pay off part of the original loan each month, plus the interest on the amount borrowed. In the latter, you only pay interest each month, and the original amount borrowed never reduces: you pay premiums on a life insurance policy, additionally, which is designed to pay off the original sum borrowed at the end of the 25 years. No one in England thinks that a 25 year loan has any drawbacks. The main point to appreciate is that the longer the period of the loan, the less you need to pay each month, because you are repaying the original loan - the capital - over a longer period of time. Thus, in principle, a mortgage is easier to repay the longer the term is, because the monthly payment is less. If you have a 12 year mortgage, you must pay back the original amount borrowed in half the time: the capital element in your payment each month is double what it would be if repaid over 25 years - i.e. if repaid over a period twice as long. Only if the borrower is less than 25 years away from retirement is a 25 years mortgage seen as a bad idea, by the lender - because, obviously, the lender relies on the borrower having an income sufficient to keep up the repayments. There are many complicating factors: an interest-only mortgage, where you pay back the original amount borrowed from the maturity proceeds from a life policy, puts you in a situation where the original capital sum never reduces, so you always pay the same each month. But on a straight repayment mortgage, the traditional type, you pay less and less each month as time goes by, for you are reducing the capital outstanding each month, and because that is reducing so is the amount of interest you pay each month (as this is calculated on the outstanding capital amount). There are snags to avoid, if you can. For example, some mortgage contracts impose penalties if the borrower repays more than the due monthly amount, hence in effect the borrower faces a - possibly heavy - financial penalty for early repayment of the loan. But not all mortgages include such a condition. If house prices are on a rising trend, the market value of the property will soon be worth considerably more than the amount owed on the mortgage, especially where the mortgage debt is reducing every month, as each repayment is made; so the bank or other lender will not be worried about lending over a 25 year term, because if it forecloses there should normally be no difficulty in recovering the outstanding amount from the sale proceeds. If the borrower falls behind on the repayments, or house prices fall, he may soon get into difficulties; but this could happen to anyone - it is not a particular problem of a 25 year term. Where a default in repayment occurs, the bank will often suggest lengthening the mortgage term, from 25 years to 30 years, in order to reduce the amount of the monthly repayment, as a means of helping the borrower. So longer terms than 25 years are in fact a positive solution in a case of financial difficulty. Of course, the longer the term the greater the amount that the borrower will pay in total. But the longer the term, the less he will pay each month - at least on a traditional capital-and-interest mortgage. So it is a question of balancing those two competing factors. As long as you do not have a mortgage condition that penalises the borrower for paying off the loan more quickly, it can make sense to have as long a term as possible, to begin with, which can be shortened by increasing the monthly repayment as fast as circumstances allow. In England, we used to have tax relief on mortgage payments, and so in times gone by it did make sense to let the mortgage run the full 25 years, in order to get maximum tax relief - the rules were very complex, but it tended to maximise your tax relief by paying over the longest possible period. But today, with no income tax relief given on mortgage payments, that is no longer a consideration in this country. The practical position is, of course, that you can never tell how long it might take you to pay off a mortgage. It is a gamble as to whether your income will rise in future years, and whether your job will last until your mortgage is paid off. You might fall ill, you might be made redundant, you might be demoted. Mortgage interest rates might rise. It is never possible to say that you \"\"can\"\" pay off the loan in a short time. If you hope to do so, the only matters that actually fall within your control are the conditions of the mortgage contract itself. Get a good lawyer. Tell him to watch out for early-redemption penalties. Get a good financial adviser. Tell him to work out what you will need to pay in additional premiums on your life policy if you are considering taking an interest-only mortgage. Try to fix your mortgage rate in the first few years, for as long as possible, so that in your most vulnerable period, with the greatest amount owing, you are insulated against unexpected interest rate fluctuations. Only the initial conditions can be controlled, so it might be prudent to take as long a term as possible, even though a prudent borrower will leave himself room to reduce that term, and a prudent lender will leave room to extend it, in case of unpredictable changes in the financial circumstances. In England, most lenders are, in my experience, reluctant to grant mortgages for less than 25 years. That is simply a policy. Rightly or wrongly, the borrower usually has no choice about the length of the mortgbage term. Hence, in the UK it can be difficult to find a choice of interest rates based on differing mortgage terms. I am aware that the situation in the USA is rather different, but if I personally were faced with the choice I would be uncomfortable about taking on a short term mortgage, because of the factors I have outlined above.\"" }, { "docid": "372350", "title": "", "text": "The answer to question 1 is yes, you can always reduce your loan when you remortgage by introducing additional funds. There is some possibility a (relatively) small charge might be applicable for managing the marginally more complex transfer, but it shouldn't be too much.. The answer to question 2 is NONE of your over payment amounts would have gone on interest, but you MIGHT incur penalty charges. Interest is only charged on the outstanding loan amount (i.e. £100K initially, reducing to £85K over 2 years in your example) at the interest rate determined by your mortgage agreement - there is no 'paying off interest' as such. Over payments are essentially all capital payments, reducing the principal/loan amount, so no additional interest would be paid if you opted for over payments. If you used your £10K to made the over payments throughout the 2 year fixed period you would in fact have paid LESS interest by the end of the 2 years, because you would be reducing the loan amount at a quicker rate, and thus the interest you pay each month (based on the lower outstanding loan at that time) would be lower. BUT... over payments might have attracted over payment penalties (typically a percentage of the amount you pay) and these penalties often mean it's not worth doing. Most fixed term mortgages have such penalties, but it depends on the agreement, and many mortgages also allow you to make over payments up to a certain amount each year before you get hit. Edit (additional suggestion): If the example you provide is one based on what you expect might happen to you over the next couple of years, something you could CONSIDER is an offset mortgage. Here your £10K that you accumulate reduces your interest through the 2 years, but you keep it in savings where you can access it if you need to. Accessing it will then cause a corresponding rise in interest payments, but to no higher level than you would have been paying if you had nothing in the savings in the first place. You usually pay a slightly higher interest rate for these sort of mortgage, so it's impossible to know if it would be more economical, and how appropriate it would be for you in other respects depends on many factors." }, { "docid": "280696", "title": "", "text": "\"In theory, the term of the bond does not affect the priority. It does not matter whether a \"\"Junior Subordinated Debenture\"\" is due in one year or sixty, it is still lower priority than a \"\"Secured Note\"\". On the other hand, if the \"\"Secured Note\"\" is secured by something that is not worth as much as the note, the excess is an unsecured debt. In practice, the term of the bond has two effects: Short term debt holders are more likely to get out just before the company goes broke. Sometimes their efforts to get out are exactly what causes the company to go broke! (\"\"Commercial paper\"\" is even more fickle than banks.) All other things being equal, and depending on the terms of the loan, some bonds get priority over bonds of the same type that are issued later. For example, your first mortgage usually takes precedence over your second mortgage.\"" }, { "docid": "164434", "title": "", "text": "$33K, $227 payment is 7.33%. But is that right? You're also stretching out the remaining loan back to 30 years. Now, if the bank just let you do the stretch, you'd owe $95K / 4.75% / 360 mo / PMT = $495.56 - this would be a neutral move, same rate. You now have: $128K / 5.625% / 360 / PMT = $737 so to my thinking, the delta is: $33K / X rate / 360 / PMT = $241.44 and the rate is 7.97% If you have enough equity to refi, you have enough to take that in a HELOC, and pay it off aggressively, why give up the great rate? The $227/mo you will pay the HELOC off in 22 years even at 6%. My HELOC is 2.5%. I'd use any raise or bonus to hack away at it. I tried to spell out my thought process on the math. If any savvy reader (you all are, I know) wants to look at this and offer a better method, I'm open minded. There's a fallacy that comes with refinancing, certainly money appears in the payment stream as a result of extending the term. Somewhere that needs to be accounted for, else a higher rate at a longer term appears favorable, so my approach is to normalize the numbers one way or another. Here, producing that first step of calculating the payment on the extended term (an interim step that's a mental process only, that loan is hypothetical). Comments welcome." }, { "docid": "178496", "title": "", "text": "\"As the answer above states, future inflation mitigates \"\"unwise\"\" for a longer term mortgage, at least in financial-only terms. But consider that, if you lose your ability to make payments for long enough time ANYTIME during term, the lending institution has a right to repossess, leaving you with NOTHING or worse for all the maintenance you've had to do. You can never know, but eleven years into my mortgage, I lost enough of my income for just long enough time to have to sell for just enough to pay the remainder of the mortgage and walk away with empty pockets. To help clarify understanding even better, contrast the 30-yr mortgage with the other extreme: save up and own from day one. When I did the math a few years ago, buying with a 30-year mortgage would cost cumulatively almost 3 times the real house value in mortgage payments with never the freedom to suspend payments when I might need to. Being a freedom-loving American, I determined to buy a house with cash. DON'T FORGET that mortgageable properties are over-priced just because buyers less wise than you are so willing to borrow to buy them, so I decided to buy some fixer-upper that no bank would lend on. I found such a fixer-upper, paid cash, never have to worry about repossession by a lender, can continue to save up for my dream home which I'll own a lot sooner, and will have a nice increase in house value while I fix it up to help get me there, and NO INSURANCE PAYMENTS to some insurer who'll tell me what I can't do with MY property. Let the next buyer of your fixed-up, paid-off house pay YOU the over-priced amount they are willing to pay just because THEY can get that 30-year mortgage, and you enjoy the freedom to dream and adjust your budget to the needs of the moment and end up with a house in 30 years (15, more realistically) that is 2.5 times more valuable. And keep from fighting with your spouse over finances in the meantime.\"" }, { "docid": "364802", "title": "", "text": "\"In your shoes, I would pay off the mortgage with the after tax investments and be done. You have different goals than I do in that you want to keep the debt. So, I would start calling mortgage brokers and asking for someone who does \"\"manual underwriting\"\". Manual underwriting essentially means they use common sense and look at your situation for what it is instead of saying \"\"income=10K means disapprove mortgage\"\". It may be that your situation is different enough from mortgage guidelines that you can't now get a conforming mortgage (i.e. one that is readily re-sellable to another mortgage holder). If that is the case, you can look for a small bank or credit union that would be interested in adding your loan to their portfolio and not reselling it.\"" }, { "docid": "432393", "title": "", "text": "You should start by calling the clinic and asking them to tell you how the visit was coded. Some clinics have different billing codes based on the complexity of the visit. If you have one thing you are seeing the doctor about, that could be coded differently than if you have 4 things you are seeing the doctor about. In fact, even if you are there just for one ailment, but while you are there you happen to ask a few quick questions about other possible ailments, the doctor could decide to use the billing code for the higher complexity. If when speaking to the billing department it is determined that the visit is using a higher complexity billing code (and a higher charge as a result), you could then request that it be re-coded with the lower complexity visit. Realize if you request that they will probably have to first get approval from the doctor that saw you. Note: I am basing this answer on first hand experience about 6 months ago in Illinois, where the situation I described happened to me because I asked some unrelated questions about other possible ailments at the end of a visit to an after hours clinic. The billing department explained that my visit was coded for 4 issues. (3 of them were quick questions I asked about at the end of the visit, one of which she referred me to another doctor. My additional questions probably extended the visit by 3-4 minutes.) In my case I never got the bill reduced, mainly due to my own laziness and my knowing that I would hit my deductible anyway this year. Of course I can't say for sure if this is what happened in your case, or even if this practice is widespread. This was the first and only time in my life that I encountered it. As a side note, your primary doctor would likely rarely ever bill you for a more complex visit, as it likely wouldn't lead to much repeat business. As for your last question regarding your credit: if the provider decides to lower the price, and you pay the lower price, this in no way can affect your credit. Surprising Update: When I called the billing office months ago, I had asked if they could confirm the code with the doctor, and I was told they would look into it. I never heard back, never followed up, and assumed that was the end of it. Well, today I got a call back (months later) and was informed that they had re-coded the visit which will result in a lower charge! It's still pending the insurance adjustment but at some point in the future I expect to receive either a credit on my next statement or a check in the mail. (The price difference pre-insurance in my case has gone from $359 to $235.) Update: I did receive a check for the difference. The check was dated July 20, 2016, which is just over 2 months after the phone call informing me I would receive it." }, { "docid": "28039", "title": "", "text": "\"I don't see how I'm biased in favor of the banks. Make no mistake, the banks are to blame for the collapse, more so than the government. However I'm acknowledging the timeline and all the major players in this game, and that includes the government. I addressed the role of banks selling risky mortgages susceptible to default, which includes predatory lending rates, highly leveraged individuals who buy investment properties, and subprime ARM loans. Thank you for providing more detail. I also addressed the securitization of risky mortgages into investment-grade debt, which could be sold to satisfy the \"\"Giant Pool of Money\"\". Plus, I addressed how the banks lowered their standards to continue the supply of mortgages. Feel free to directly cite [Paul Krugman](http://krugman.blogs.nytimes.com/2010/01/07/cre-ative-destruction/) as the source of your argument regarding the simultaneous growth of the residential and commercial RE. Commercial RE was pulled along by residential RE and the broader market rally (commercial land is highly cyclical). Commercial RE prices rose as the market showed lower interest rates and higher land prices. So commercial RE slightly lagged the housing market.\"" }, { "docid": "131884", "title": "", "text": "&gt; That said, the non-profit also was likely to enroll about 1,000 students at nominal tuition levels, whereas the for-profit is likely to enroll tens of thousands, with dozens of staff doing nothing but making sure their students get the largest possible student loans. I get what you are saying, the non-profit isn't causing as much long-term damages as these for-profit Johnny-come-latelys. Has anyone taken the numbers and really crunched them? I feel like the problem is the perverse incentives created by the student loan system. There isn't anything inherently wrong with for-profit colleges, but there are issues under the current system because of the way we extend credit to students. Anytime credit is available, the big, corrupt banks are not far behind. I say get rid of the loan programs and see how these for-profit schools adjust. I think they would probably be able to adjust more quickly and possibly even get better than the non-profit schools, due to their lack of legacy contracts and traditions." }, { "docid": "422142", "title": "", "text": "The long term growth is not 6.5%, it's 10% give or take. But, that return comes with risk. A standard deviation of 14%. Does the 401(k) have a match? And are you getting the full match? If no match, or you already top it off, the 6.5% is a rate that I'd be happy to get on my money. So, I would pay it off faster. My highest rate debt is my 3.5% mortgage, which is 2.5% after tax. At 2.5%, I prefer to be a borrower, as that gap 2.5%-10% is pretty appealing, long term." }, { "docid": "324587", "title": "", "text": "if more people wanted to short mortgages, the price of insurance on them would have gone up, and investors would have stopped wanting to buy them, which would cause interest rates on homes to go up, reducing the number of people who can buy homes out of their price range- which was a fundamental cause of the crisis" } ]

[ { "docid": "411542", "title": "", "text": "I found out about Google checkout today, it looks like it may meet my needs, but I'd still be interested to find out about other options." } ]

[ { "docid": "543348", "title": "", "text": "Banks work pretty hard to make themselves a big part of your life with bill pay, auto-deposit, loans and other services. You need to carefully unwind each one and be on the lookout for fees. If you close a savings account, will your checking account suddenly have fees? If you stop auto deposit, will there suddenly be a fee? Do you have a business that deposits money? A Google Ad sense account? PayPal or the equivalent? These all might be tied to your bank accounts. Wait a couple of months, leaving enough cash in the old back to prevent fees if possible. If two months go by and there isn't any activity on the account, you can probably close it. After you are sure all the written checks have cleared, go to the back and get a counter check for the balance of the account. You could alternately just write yourself one more check for the remaining balance and call the bank to close the account. You could electronically transfer the funds if you wanted too. HOWEVER, it is important to be careful of the timing, the last thing you want to do is write a check or transfer the money after the account is closed. (per Dilip Sarwate) If you do the check and phone call thing, make sure you do it in a short enough period of time that you don't incur a fee. Having and closing regular bank accounts won't have any tax implications in the US." }, { "docid": "148288", "title": "", "text": "I think about as close as you're going to get is to use a personal PayPal account, and set up a reminder to yourself to log in and send the money. (Because, as you said, setting up a recurring payment is a business account thing.) From PayPal's website: Sending money – Personal payments: It's free within the U.S. to send money to family and friends when you use only your PayPal balance or bank account, or a combination of their PayPal balance and bank account. ... Receiving money – Personal payments: It's free to receive money from friends or family in the U.S. when they send the money from the PayPal website using only their PayPal balance or their bank account, or a combination of their PayPal balance and bank account. You can automate the reminder to yourself with any of the gazillion task managers out there: Google Calendar, MS Outlook, Todoist, Remember the Milk, etc." }, { "docid": "25989", "title": "", "text": "You might investigate Paypal if it is available to both of you. the International Transfers page on their site has a way to find out what sort of fee's they would charge you. It might be a lot simpler and easier than doing wire transfers or dealing with banks etc." }, { "docid": "2083", "title": "", "text": "\"While I agree that highly processed foods, including plant based meat substitutes, are probably not the best things we could be eating, damning them with scare words like \"\"chemicals\"\" is unhelpful and certainly doesn't account for the bigger picture. All food is made of chemicals- water is a chemical, broccoli is full of various chemicals. Looking at the specific nutritional profile of meat alternatives most of them fall somewhere between marginally better and no worse than meat based foods. Getting protein from leafy greens, whole grains, nuts, and legumes would probably be better, but meat alternatives still make it easier for people to adopt plant based diets, and see them as viable, which is likely to have a positive health impact, or again at least be no worse than an omnivorous diet. You also discount the non-health related reasons that people choose these options. Many people may be choosing meat alternatives because of concerns over animal welfare or the environment. Other people may simply like the taste- many options are different enough from meat to not be comparable from a taste standpoint, and many plant based meat alternatives are much better tasting than similar frozen convenience foods made from animals.\"" }, { "docid": "117895", "title": "", "text": "\"you could get a discover card and then just \"\"freeze\"\" it. you might need to unfreeze it for a few minutes when you sign up for a new service, but it is unlikely an ongoing subscription would process a charge in that window. i believe merchants are charged a small fee for a transaction even if it is declined, so they won't try constantly forever. discover account freeze faq capitalone offers this freeze feature on their \"\"360\"\" debit cards. you can even freeze and unfreeze your card from their mobile app. this feature is becoming more common at small banks and credit unions too. i know of 2 small local banks that offer it. in fact, almost any bank can give you a debit card, then set the daily POS limit to 0$, effectively making it an atm-only card. but you may need to call the bank to get that limit temporarily lifted whenever you want to sign up for a new service. alternatively, jejorda2's suggestion of virtual account numbers is a good idea. several banks (including discover) have discontinued that feature, but i believe citi, and boa still offer them. side notes:\"" }, { "docid": "276498", "title": "", "text": "\"It sounds like what you are looking for are sites that offer pre-paid debit cards as rewards. A number of survey/get-paid-to sites do offer these as a potential reward; they are more irritating than having the money in a bank account or paypal balance, as they expire if not used within some amount of time, and generally come with restrictions on what you can use them on (they work like credit cards, but the site providing the card can reject your request if it doesn't like the site you're trying to pay.). Plus, you can only use a single debit card per purchase, so if you have two $20 prepaid cards, you can't use them both to make a $40 dollar purchase. Still, this does satisfy your requirements, assuming the game you want to transfer to and the provider of the prepaid card you're being rewarded with are willing to work together. You can use SurveyPolice to search for sites that offer the type of reward you want - filtering by offered reward type is an option under their \"\"pick-a-perk\"\" page. Though it's likely many of those sites also require you to be at least 18 as well, as that's a pretty common restriction - you'll have to verify that part yourself. For that matter, you would want to check age restrictions on the sites those sites partner with to offer prepaid cards, as well.\"" }, { "docid": "32097", "title": "", "text": "\"&gt; But I explicitly mentioned the customer experience, which is completely different and no matter how much you want your industry experience to matter for that, it doesn't affect it. You mentioned the customer experience randomly in some parts, then threw in Wikileaks in others. If we're talking about the customer experience, we need to drop the payment processors aspect, because the majority of the time, the consumer doesn't even know who processes their card payments let alone care, and again, PayPal is not even close to the only option. If this were 1998 and people were really wary of buying online, then it would be a bigger deal to be banned from PayPal. But it's not 1998, and a ton of people don't care, and there are all kinds of alternatives. PayPal can deny service all it wants (and it does that on a regular basis) and that in no way means that a business can't accept cards. You're \"\"customer experience\"\" premise is flawed. I literally spend all day helping businesses set up credit card processing, and PayPal is a drop in the bucket. &gt;Could you clarify for me how VISA/MasterCard managed to block a merchant, who presumably wasn't a direct customer (but instead a payment processor customer), but cannot block a card holder? (yes, this is an honest question) Visa and Mastercard have relationships with banks and/or processors, who have relationships with merchants. Visa and MC's agreements with banks and processors stipulate that those banks and processors can't offer services to companies engaging in illegal activity. Wikileaks was (allegedly) engaging in illegal activity, and it's on that basis that Visa and MC denied service to WL. Visa and Mastercard have almost nothing to do with cardholders. They don't issue credit cards to cardholders, they aren't the ones that do credit checks to determine creditworthiness, they aren't the ones helping you with your monthly statement or a dispute, etc. Cardholders aren't Visa and MC's clients. When a transaction is run, it's authenticated by the bank that issued the card, not by Visa or MC, and it's the bank, not Visa or MC, that would block transactions or freeze a cardholder account. &gt;The WikiLeaks blockade was clearly political. What makes you say otherwise? And this is political. So your argument is that anything political is the same as anything else political? Kind of a stretch.. Wikileaks was denied service by the card brands for allegedly engaging in illegal activity. PayPal is denying service of its own volition, which FYI, it does every day to legal businesses. As long as their reasons for doing so aren't discriminatory based on status in a protected class, they are (and should be) allowed to refuse service.\"" }, { "docid": "275249", "title": "", "text": "\"There are three (or four) ways that a company can grow: (Crowdfunding is a relatively new (in mainstream businesses) alternative financing method where people will finance a company with the expectation that they will benefit from the product or service that they provide.) Obviously a startup has no prior income to use, so it must either raise money through equity or debt. People say that one must borrow contingent on their salary. Banks lend money based on the ability to pay the loan back plus interest. For individuals, their income is their primary source of cash flow, so, yes, it is usually the determining factor in getting a loan. For a business the key factor is future cash flows. So a business will borrow money, say, to buy a new asset (like a factory) that will be used to generate cash flows in the future so that they can pay down the debt. If the bank believes that the use of the money is going to be profitable enough that they will get their money back with interest, they'll loan the money. Equity investors are essentially the same, but since they don't get a guaranteed payback (they only get paid through non-guaranteed dividends or liquidation), their risk is higher and they are looking for higher expected returns. So the question I'd have as a bank or equity investor is \"\"what are you going to do with the money?\"\" What is your business strategy? What are you going to do that will make profits in the future? Do you have a special idea or skill that you can turn into a profitable business? (Crowdfunding would be similar - people are willing to give you money based on either the social or personal benefit of some product or service.) So any business either starts small and grows over time (which is how the vast majority of businesses grow), or has some special idea, asset, skill, or something that would make a bank willing to take a risk on a huge loan. I know, again, that people here tend to turn blind eyes on unfortunate realities, but people do make giant businesses without having giant incomes. The \"\"unfortunate reality\"\" is that most startups fail. Which may sound bad, but also keep in mind that most startups are created by people that are OK with failing. They are people that are willing to fail 9 times with the thought that the 10th one will take off and make up for the losses of the first 9. So I would say - if you have some great idea or skill and a viable strategy and plan to take it to market, then GO FOR IT. You don't need a huge salary to start off. You need something that you can take to market and make money. Most people (myself included) either do not have that idea or skill to go out on their own, or don't have the courage to take that kind of risk. But don't go in assuming all you need is a loan and you'll be an instant millionaire. You might, but the odds are very long.\"" }, { "docid": "308964", "title": "", "text": "\"I think you're right that these sites look so unprofessional that they aren't likely to be legitimate. However, even a very legitimate-looking site might be a fake designed to separate you from your money. There is an entire underground industry devoted to this kind of fakery and some of them are adept at what they do. So how can you tell? One place that you can consult is FINRA's BrokerCheck online service. This might be the first of many checks you should undertake. Who is FINRA, you might ask? \"\"The Financial Industry Regulatory Authority (FINRA) is the largest independent regulator for all securities firms doing business in the United States.\"\" See here. My unprofessional guess is, even if a firm's line of business is to broker deals in private company shares, that if they're located in the U.S. or else dealing in U.S. securities then they'd still need to be registered with FINRA – note the \"\"all securities firms\"\" above. I was able to search BrokerCheck and find SecondMarket (the firm @duffbeer703 mentioned) listed as \"\"Active\"\" in the FINRA database. The entry also provides some information about the firm. For instance, SecondMarket appears to also be registered with the S.E.C.. You should also note that SecondMarket links back to these authorities (refer to the footer of their site): \"\"Member FINRA | MSRB | SIPC. Registered with the SEC as an alternative trading system for trading in private company shares. SEC 606 Info [...]\"\" Any legitimate broker would want you to look them up with the authorities if you're unsure about their legitimacy. However, to undertake any such kind of deal, I'd still suggest more due diligence. An accredited investor with serious money to invest ought to, if they are not already experts themselves on these things, hire a professional who is expert to provide counsel, help navigate the system, and avoid the frauds.\"" }, { "docid": "182684", "title": "", "text": "PayPal will be contacting you shortly, I'm sure. You'll see the reversal on their site in a few days as well as a fee from their end I bet." }, { "docid": "161706", "title": "", "text": "Best Buy has always had high prices and horrible customer service. Can you tell I have a chip on my shoulder? lol they installed a stereo in my truck and broke the ac which cost me over $1900 to fix. After weeks of having a lawyer hound them, they sent me $1000 to settle the claim. Wasn't worth my time to miss work for small claims court. P.S. why is $1900 and the common man considered small claims? Big companies like Best Buy and Paypal just bully people using the law, and I'm sick of it!" }, { "docid": "216002", "title": "", "text": "Directly? No because I’m not an economist. Indirectly, however, an argument can be made that outsourcing was the catalyst to drive down wages to pave the way for automation as a viable financial alternative to labor and effectively killing the manufacturing market domestically in the process. What you are seeing now are those policies being bared out after 40 ought years. ...But I’m interested to hear your thoughts?" }, { "docid": "114527", "title": "", "text": "Context: assessed project as part of a tech internship in an investment bank, working in small groups, task: to design an app using a financial solution that has an ethical impact. We came up with (what I hope) is the smart sounding idea of an app for impoverished farmers in developing countries who lack the information and market access that larger or unionised farmers would have. The app would use some kind of decision tree (which may grow with machine learning) to assess the best kind of crops to grow given the region and local conditions for max profitability, and would provide access to some kind of derivatives market, and insurance, allowing the farmers a consistent income. Struggling with the specifics of how the business/finance side of things would work. Let's assume the bank builds the app and puts it on the app-store as part of some charitable initiative. 1) Would the farmers go directly to the bank to price and purchase derivatives on their crops? 2) Options/futures/forwards - which is most appropriate, or would it make sense to offer all three? 3) Is there any way this could be adjusted to provide regular payments, with a lump sum at the end? Would this be something the bank chooses to do, or is there an existing financial instrument for this kind of setup? 4) How does this tie in with the commodities markets (or is that what the derivatives already are?) 5) Probably a long-shot but any chance of know-your-customer implementations for countries with terrible infrastructure? 6) (probably a dumb question) Say the farmer sells an option on his crops, would this be sold directly to the bank or a 3rd party who'd be more interested in actually buying the crop? Or is this a far too simplistic view? Basically who would the farmer actually deliver the crops to? 7) Any other issues/oversights? Any ideas to make this sound somewhat viable? It doesn't have to strictly be realistic in any sense, but it also can't be flat-out incorrect! tyvm in advance, edited to make questions clearer" }, { "docid": "20283", "title": "", "text": "As an Indian resident you can open an Resident Foreign Currency Account, i.e. an USD account. This facility is provided by all major banks. I am not sure if PayPal would transfer money to these accounts or would convert. The alternative is to give this account number along with other Bank details to the company in US and ask them to send money via remittance services." }, { "docid": "122177", "title": "", "text": "If PayPal won't accept the VCC number, then by definition you can't do this. If you want to know whether there's a way to get special permission or bypass that restriction... I'm afraid the right thing to do is ask PayPal. Yes, I know their customer support is awful, but this is a classic customer support question, and they know the internals of their system better than any of us possibly could." }, { "docid": "217875", "title": "", "text": "The problem is, I don't understand, how such sites work. Is that scam or not? Some of my friends told me that they've actually received the revenue after they deposited a bit of money to similar sites, and I don't have any evidence not to trust them. Yes there are scam. Stay away. Quite likely people got real money back into Bank Account. Or more likely it shows that there is more [notional] money in the sites account. If such sites really 'work', then how and why? These sites work, because there are quite a few people who believe in free / easy money. The site could be classic pyramid / Ponzi scheme. They could also be involved in some kind of Money Laundering. Why would anyone trust them so much to give them money for absolutely no reason? Okay, I'm not so clever, but they can't make profit only because of stupid people, can they? The same way you did, at times just for fun to experiment. At times because they believe there is easy get rich way. There is a reward that works so that if you see 120 you start believing in it. If you try and withdraw, there will be quite a few obstacles; under the pretext of holding period, withdrawal fees etc... but mostly they will encourage you to keep depositing small amounts and see it grow. This of it this way; if one can make 20% day on day ... one does not need someone else's money. The power of compounding would mean very quickly $ 100 would become 88 BILLION in 120 days!" }, { "docid": "357427", "title": "", "text": "What do you mean doesn't allow private entities to attach to the fixtures? Do you mean fixtures like lamp posts etc? This would only be suitable for small cells anyway. Putting a small cell on a rooftop is silly. A roof site would be a full build site with radios, sector antennas, an equipment cabinet or two, and a power/battery cabinet. If you mean attach fixtures to buildings, I don't believe that. Create a business to lease the space. Bob's Rooftop, Inc., etc. Make sure they carry sufficient insurance and that it includes protection for your building against any contractor error (roof damage, accidentally drill something, damage to cosmetic materials, etc), against fire, and basically anything else. I've only seen cell equipment catch fire a couple of times, both of which were the result of lightning strikes. On the other hand, the bank of batteries they use for backup power is pretty big and has more than enough power to do some accidental arc welding. Are they limited to leasing to a single carrier? You need this all spelled out in writing. PM me the name of the vendor if you are allowed to. I don't need the name of the carrier. You don't need to give me too much identifying information, so there is no exposure for you. Are they offering the $350 or are you asking it? I feel like a minimum of $1000 is reasonable. Try to find out what they will be paid by the carrier. You might be able to negotiate something like 65% of the money the carrier pays. Do remember that the vendor does basically nothing other than make the space available. They don't build the site and they don't maintain it." }, { "docid": "320405", "title": "", "text": "I can only imagine the regulatory difficulty you're going through, and for that I empathize. First, bankers everywhere mostly do not know if a bank policy is due to regulation or internal rules. Other banks may be more flexible, but only the most reputable should be used. Re Paypal, they first deposit 1 USD and then withdraw it, but things may be different in Cyprus. Also, Paypal now has debit cards, so if Paypal is permitted to issue cards in Russia then it could presumably be used in Cyprus. Again, local regulation notwithstanding. Paypal now has phone support at the very back of their site, so I suggest a call to them. In countries that permit, Western Union can be used to wire money into an account from cash. The Bitcoin route should be used as a last resort. You could wake up tomorrow losting 25% easy. The regulations are a distant second compared to this problem. With all of the above methods, there will be varying delays from days to weeks." }, { "docid": "530685", "title": "", "text": "\"So... from a business perspective, this way of building a piece of software doesn't make any sense at all. To take their example of a book trading app... how do you parse out the core function vs. the revised specifications adding features. The core function of most apps are dead-nuts simple. For the book trading app, the core functionality is a forum website, such as reddit. The need for an app which allows you to sell it is the value-add of the software, which is all in the features. Call the \"\"standard\"\" way of doing things, from a set specification, a \"\"top down\"\" design cycle. Call the \"\"new\"\" way of designing a \"\"bottom up\"\" design cycle. So now you have a \"\"minimum viable product\"\", which is now subject to all the pain of a top-down design cycle and you are back to where you started. Now, every bottom-up design cycle has a goal and its own minimum viable feature improvement... so you are really back to a progression of top-down design cycles superimposed on bottom-up product feature set evolution. Making a real product that people use is always going to be a combination of top-down design driven from the business side, who determines the features that customers want (i.e. the minimum viable product), and bottom-up design cycles where engineering has to communicate what is possible to design in a certain time frame. There is always a tension between the forward looking business side which is trying to project what customers want and pushing engineering to schedule their creativity, and the engineering side which is trying to deliver creative product designs on an externally imposed schedule. This bottom-up design cycle is not unique to software. Where developing software differs from developing hardware is that software allows for this design cycle to be very short and very discrete. Software can be developed in discrete modules and linked together. Hardware is more integrated, thus having longer design cycles, but can still be designed using a minimum viable product with design cycles adding features incrementally. Look at the cell phone/smart phone hardware business for a good case study in this. Yearly design cycles, each design cycle has a minimum viable feature set and some stretch goals, and work on feature sets stop when the clock runs out. But to think that software is magic, should be driven entirely bottom-up, doesn't have some sort of feature map superimposed on the workflow, is to get lost in an idealism. Better to use top-down and bottom-up design cycles as tools to navigate the business.\"" } ]

[ { "docid": "346793", "title": "", "text": "While I've never used the service, there's also Amazon Flexible Payments Services (AFPS): (emphasis below is mine) Amazon Flexible Payments ServiceTM (Amazon FPS) is the first payments service designed from the ground up for developers. It is built on top of Amazon’s reliable and scalable payments infrastructure and provides developers with a convenient way to charge Amazon’s tens of millions of customers (with their permission, of course!). Amazon customers can pay using the same login credentials, shipping address and payment information they already have on file with Amazon. [...] Considering Amazon.com is an e-commerce heavyweight, it might be worth a look." } ]

[ { "docid": "237395", "title": "", "text": "We are skilled for interactive media benefit with new innovation, the GF Sistemas have been turned out to be exceptionally prevalent site improvement organization in Ecuador. It is the initial step to finding a web have, the organization that will store the documents of your site on your servers and convey them to the programs of your perusers and customers. Now, i have Tour virtuales now I have the 3 position in the Google ranking. Here you will discover data about the best web facilitating ecuador organizations in the Ecuador and around the globe. We suggest for individual and private venture who require a monetary and solid server alternative to have a site at a moderate cost. We offer the best devoted web servers costs in Ecuador." }, { "docid": "2083", "title": "", "text": "\"While I agree that highly processed foods, including plant based meat substitutes, are probably not the best things we could be eating, damning them with scare words like \"\"chemicals\"\" is unhelpful and certainly doesn't account for the bigger picture. All food is made of chemicals- water is a chemical, broccoli is full of various chemicals. Looking at the specific nutritional profile of meat alternatives most of them fall somewhere between marginally better and no worse than meat based foods. Getting protein from leafy greens, whole grains, nuts, and legumes would probably be better, but meat alternatives still make it easier for people to adopt plant based diets, and see them as viable, which is likely to have a positive health impact, or again at least be no worse than an omnivorous diet. You also discount the non-health related reasons that people choose these options. Many people may be choosing meat alternatives because of concerns over animal welfare or the environment. Other people may simply like the taste- many options are different enough from meat to not be comparable from a taste standpoint, and many plant based meat alternatives are much better tasting than similar frozen convenience foods made from animals.\"" }, { "docid": "311136", "title": "", "text": "\"Visa Electron should be usable in any ATM (and shop) that accepts Visa, especially if the ATM also contains the \"\"Plus\"\" logo. However, if it's (for example) the card issued by La Banque Postale (in French) there are quite low withdrawal and spending limits. These limits are over a period of the most recent seven days, so it can take a while before you can withdraw more. So maybe not suitable to transfer a significant amount to your CZK account. As an alternative to finding an ATM that might have a fee, you can maybe use it to buy something small, then get cashback from stores that offer that. As it's a debit card, it needs to check the balance in real-time, so there are reports of it being often declined if it can't get a fast response from the home bank. In other words, make sure you have an alternative.\"" }, { "docid": "586572", "title": "", "text": "\"Are “auto income generators” scams or alternative investment channels? I wouldn't go so far as to say that these are scams so much as grossly exaggerated marketing claims. If it sounds too good to be true then it usually is. Auto auto income generator, for example, hosts a site that you can use to produce revenue from ads. In order to get enough traffic to generate the amount of income they promise you have to put in a lot of work, hardly making it \"\"automatic.\"\" I can't find anything on auto bit coin builder, however. They promise to pay out an outrageously high fixed-return with vague descriptions about \"\"investments.\"\" This is purely speculation since there is not very much information about this small site, but it may be a \"\"pyramid\"\" or \"\"Ponzi\"\" scheme. They promise a return higher than traditional investments, offer extra incentives for referrals, and offer a list of excuses for why funds may be pending even though the transfer happens \"\"INSTANTLY\"\" on their end. The fact that they only deal in crpytocurrency may also be an attempt to remain anonymous.\"" }, { "docid": "538005", "title": "", "text": "How do you find an ethical, honest practitioner of any business? One: Make a small transaction with them and see how they treat you. If they cheat you on something small, don't give them a chance with something big. Two: Ask family and friends for recommendations. Three: Get information from public sources, like web sites where people post reviews of businesses, consumer advocacy organizations, groups like the Better Business Bureau, etc. Personally I consider all these of questionable value as you're asking one stranger to advise you on the reliability of another stranger, but better than nothing." }, { "docid": "406109", "title": "", "text": "\"Anyone can walk into a bank, say \"\"Hi, I'm a messenger, I have an endorsed check and a filled out deposit slip for Joe Blow who has an account here, please deposit this check for him, as he is incapacitated. Straight deposit.\"\" They'll fiddle on their computer, to see if they can identify the deposit account definitively, and if they can, and the check looks legit, \"\"thanks for taking care of our customer sir.\"\" Of course, getting a balance or cashback is out of the question since you are not authenticated as the customer. I have done the same with balance transfer paperwork, in that case the bank knew the customer and the balance transfer was his usual. If the friend does not have an account there, then s/he should maybe open an account at an \"\"online bank\"\" that allows deposit by snapping photos on a phone, or phone up a branch, describe her/his situation and see if they have any options. Alternately, s/he could get a PayPal account. Or get one of those \"\"credit card swipe on your phone\"\" deals like Square or PayPal Here, which have fees very close to nil, normally cards are swiped but you can hand-enter the numbers. Those are fairly easy to get even if you have troubles with creditworthiness. S/he would need to return the check to the payer and ask the payer to pay her/him one of those ways. The payer may not be able to, e.g. if they are a large corporation. A last possibility is if the check is from a large corporation with whom s/he continues to do business with. For instance, the electric company cashiers out your account after you terminate service at your old location. But then you provision service at a new location and get a new bill, you can send their check right back to them and say \"\"Please apply this to my new account\"\". If s/he is unable to get any of those because of more serious problems like being in the country illegally, then, lawful behavior has its privileges, sorry. There are lots of unbanked people, and they pay through the nose for banking services at those ghastly check-cashing places, at least in America. I don't have a good answer for how to get a check cashed in that situation.\"" }, { "docid": "555174", "title": "", "text": "From PayPal's Q&A The PayPal Debit MasterCard is the fastest way to withdraw money from your PayPal account. As a MasterCard, Amazon is beside the point. You can use it at any store that takes MasterCard Debit cards. And there would be no fees at all. It's your money." }, { "docid": "320405", "title": "", "text": "I can only imagine the regulatory difficulty you're going through, and for that I empathize. First, bankers everywhere mostly do not know if a bank policy is due to regulation or internal rules. Other banks may be more flexible, but only the most reputable should be used. Re Paypal, they first deposit 1 USD and then withdraw it, but things may be different in Cyprus. Also, Paypal now has debit cards, so if Paypal is permitted to issue cards in Russia then it could presumably be used in Cyprus. Again, local regulation notwithstanding. Paypal now has phone support at the very back of their site, so I suggest a call to them. In countries that permit, Western Union can be used to wire money into an account from cash. The Bitcoin route should be used as a last resort. You could wake up tomorrow losting 25% easy. The regulations are a distant second compared to this problem. With all of the above methods, there will be varying delays from days to weeks." }, { "docid": "276498", "title": "", "text": "\"It sounds like what you are looking for are sites that offer pre-paid debit cards as rewards. A number of survey/get-paid-to sites do offer these as a potential reward; they are more irritating than having the money in a bank account or paypal balance, as they expire if not used within some amount of time, and generally come with restrictions on what you can use them on (they work like credit cards, but the site providing the card can reject your request if it doesn't like the site you're trying to pay.). Plus, you can only use a single debit card per purchase, so if you have two $20 prepaid cards, you can't use them both to make a $40 dollar purchase. Still, this does satisfy your requirements, assuming the game you want to transfer to and the provider of the prepaid card you're being rewarded with are willing to work together. You can use SurveyPolice to search for sites that offer the type of reward you want - filtering by offered reward type is an option under their \"\"pick-a-perk\"\" page. Though it's likely many of those sites also require you to be at least 18 as well, as that's a pretty common restriction - you'll have to verify that part yourself. For that matter, you would want to check age restrictions on the sites those sites partner with to offer prepaid cards, as well.\"" }, { "docid": "454528", "title": "", "text": "Well first, this is a very small proportion of teslas that can do this, it was only one model that is discontinued and was a cheaper alternative to the 75. Any person who bought that car knows that they can upgrade to the 75 at any time by paying the difference. They did this so more people have access to a Tesla and just didn't design a whole new battery to reach some people. This is not bad at all, you get what you pay for and it's the same thing as just buying a smaller battery. If it was only 60 kWh you couldn't unlock it for emergencies, so it's an added bonus, not a bad thing." }, { "docid": "463130", "title": "", "text": "I would strongly advise that you do not use Western Union or any other wire transfer service for any money transfer, unless you personally know and trust the recipient of your funds, and the method by which you can communicate the details of the transaction. As was mentioned, wire transfers are irreversible and very difficult to trace to ensure the actual recipient got the funds. In some countries and situations, literally anyone can show up at any Western Union location, correctly recite the details of the transaction (which is proof enough they are the intended recipient) and receive the cash. If the vendor accepts PayPal, then simply set up a PayPal account, linked to your credit card, and pay the vendor that way. This can be done 100% online, assuming you have a valid card." }, { "docid": "446213", "title": "", "text": "It's really not DRM, it was never intended to be. It was their one lowest price model, to offer something more affordable before the model 3 release. No other models are affected, and the expected market size was so small it was cheaper than designing one more lower capacity battery. Everyone knew what they were buying, and can upgrade to the next model up at any time. I don't see how this is possibly a bad thing, that model is already discontinued as well and this will never be a thing again. Remember the alternative is for those few owners to just have a 60kwh battery, and not be able to do this, this was not possible on any other models." }, { "docid": "406461", "title": "", "text": "that is because there is not a pure news site and communication site that I can turn to. If Steam has taught me nothing else, it's that when technology gives people easy, pure, direct connections to what they want when they want it, without bullshit, they will prefer it over all alternatives. I would not be here, I would be at the better interface, the one that I say needs to be built" }, { "docid": "246531", "title": "", "text": "As I recall, the Scottrade minimum is only $500. (By the way, Scottrade has a feature to automatically reinvest any dividends which the securities pay) Once you have an account, you can buy into an index fund. SPY tracks the S&P 500. It is also currently paying nearly 2% in dividends. You can shop for other alternatives here: http://seekingalpha.com/insight/etf_hub/etf_guide/selector/article/39431-core-building-blocks-large-mid-small-cap-us-etfs" }, { "docid": "103720", "title": "", "text": "\"Regardless of wether or not you are registered for GST, you are legally required to include a GST total on every invoice sent to an Australian customer. This GST total must be 10% of the payment amount if you are registered for GST, or it must be $0.00 if you are not registered for GST. Since all GST transactions with the government are in Australian dollars, this amount on the invoice also needs to be in AUD, or else it's impossible for you and your customer to both be working off the same GST amount. This means you need to transfer your money from USD to AUD in PayPal's \"\"Manage Currencies\"\" area before you can send a tax invoice to the customer, so that you can provide the correct amount in AUD based on the actual exchange rate for the day (and you are required to send invoices promptly). Alternatively, you can collect payments in AUD using PayPal or use a different payment service that collects payments in USD but immediately converts them to AUD for sending an invoice (australian paypal competitors often provide this service).\"" }, { "docid": "291456", "title": "", "text": "&gt; Because /u/Wanderer360 is the one who turned this into a political issue, as if the monopolies mentioned in the article had suddenly sprung up on November 8th 2016. I read the comment several times and don’t see anywhere that /u/Wanderer360 has stated or implied that the monopolies are so recent. You also pegged them as having a Democratic leaning but they never claimed any such stance. &gt; Its not a political issue, it’s a government issue, and both sides are to blame since they allowed legislation that makes it easier for monopolies to keep competitors out of a market place. If you drain the swamp, then their will be more competition. Maybe you didn’t understand the comment the same way I did. /u/Wanderer360 is saying the structure allowing only two parties to maintain the control of government is part of the problem. You’re saying that both sides are to blame. They’re saying that the problem is we have no viable alternative to the the two sides that could propose significant changes. Really, it seems like your both arguing the same point from different angles." }, { "docid": "291380", "title": "", "text": "Agreed, I return a lot of shit to Amazon. I'm about to try to return some windshield wipers because it said they should fit my car -- any other site would be a hassle... But I'm still looking for an alternative because i'm cheap." }, { "docid": "549684", "title": "", "text": "Three ideas: PayPal is probably the best/cheapest way to transfer small/medium amounts of money overseas." }, { "docid": "216002", "title": "", "text": "Directly? No because I’m not an economist. Indirectly, however, an argument can be made that outsourcing was the catalyst to drive down wages to pave the way for automation as a viable financial alternative to labor and effectively killing the manufacturing market domestically in the process. What you are seeing now are those policies being bared out after 40 ought years. ...But I’m interested to hear your thoughts?" } ]

[ { "docid": "435405", "title": "", "text": "\"(Insert the usual disclaimer that I'm not any sort of tax professional; I'm just a random guy on the Internet who occasionally looks through IRS instructions for fun. Then again, what you're doing here is asking random people on the Internet for help, so here goes.) The gigantic book of \"\"How to File Your Income Taxes\"\" from the IRS is called Publication 17. That's generally where I start to figure out where to report what. The section on Royalties has this to say: Royalties from copyrights, patents, and oil, gas, and mineral properties are taxable as ordinary income. In most cases, you report royalties in Part I of Schedule E (Form 1040). However, if you hold an operating oil, gas, or mineral interest or are in business as a self-employed writer, inventor, artist, etc., report your income and expenses on Schedule C or Schedule C-EZ (Form 1040). It sounds like you are receiving royalties from a copyright, and not as a self-employed writer. That means that you would report the income on Schedule E, Part I. I've not used Schedule E before, but looking at the instructions for it, you enter this as \"\"Royalty Property\"\". For royalty property, enter code “6” on line 1b and leave lines 1a and 2 blank for that property. So, in Line 1b, part A, enter code 6. (It looks like you'll only use section A here as you only have one royalty property.) Then in column A, Line 4, enter the royalties you have received. The instructions confirm that this should be the amount that you received listed on the 1099-MISC. Report on line 4 royalties from oil, gas, or mineral properties (not including operating interests); copyrights; and patents. Use a separate column (A, B, or C) for each royalty property. If you received $10 or more in royalties during 2016, the payer should send you a Form 1099-MISC or similar statement by January 31, 2017, showing the amount you received. Report this amount on line 4. I don't think that there's any relevant Expenses deductions you could take on the subsequent lines (though like I said, I've not used this form before), but if you had some specific expenses involved in producing this income it might be worth looking into further. On Line 21 you'd subtract the 0 expenses (or subtract any expenses you do manage to list) and put the total. It looks like there are more totals to accumulate on lines 23 and 24, which presumably would be equally easy as you only have the one property. Put the total again on line 26, which says to enter it on the main Form 1040 on line 17 and it thus gets included in your income.\"" } ]

[ { "docid": "264586", "title": "", "text": "\"I guess I don't understand how you figure that taking out a car loan for $20k will result in adding $20k in equity. A car loan is a liability, not an asset like your $100k in cash. Besides, you don't get a dollar-for-dollar consideration when figuring a car's value against the loan it is encumbered by. In other words, the car is only worth what someone's willing to pay for it, not what your loan amount on it is. Remember that taking on a loan will increase your debt-to-income ratio, which is always a factor when trying to obtain a mortgage. At the same time, taking on new debt just prior to shopping for a mortgage could make it more difficult to find a lender. Every time a credit report (hard inquiry) is run on you, it temporarily impacts your credit score. The only exception to this rule is when it comes to mortgages. In the U.S., the way it works is that once you start shopping for a mortgage with lenders, for the next 30 days, additional inquiries into your credit report for purposes of mortgage funding do not count against your credit score, so it's a \"\"freebie\"\" in a way. You can't use this to shop for any other kind of credit, but the purpose is to allow you a chance to shop for the best mortgage rate you can get without adversely impacting your credit. In the end, my advice is to stop looking at how much house you can buy, and instead focus on a house with payments you can live with and afford. Trying to buy the most house based on what someone's willing to lend you leaves no room in the near-term for being able to borrow if the property has some repair needs, you want to furnish/upgrade it, or for any other unanticipated need which may arise that requires credit. Don't paint yourself into a corner. Just because you can borrow big doesn't mean you should borrow big. I hope this helps. Good luck!\"" }, { "docid": "521249", "title": "", "text": "Banks do not report transactions within accounts except as required by law, usually as part of anti-money-laundering efforts. Generally those involve tracking large cash transactions. As far as large payments go, there are two reasons they might be reported to the government: taxes, and criminal investigations. For tax purposes, if the payment is considered a salary or wage (that is, you are an employee of the company and the payment is for your time working there), then the company paying you is responsible for reporting the wage and withholding applicable taxes from your salary. If you are considered an independent contract employee, then you yourself will be responsible for reporting the income to the IRS and paying the applicable taxes yourself. In the second case, unless you are already under investigation, I wouldn't worry about it. Banks are very touchy about financial records being kept private, and won't release them without a subpoena. One caveat is that this is under US law. Banks which maintain branches in multiple countries must, of course, comply with all local laws in the jurisdiction where they do business. The take away from this is that Bank of America is unlikely to report a single deposit of $75,000 into your account to anyone on their own. If it is a paper check being deposited they will probably place a hold on it to make sure it clears, but that is all." }, { "docid": "348787", "title": "", "text": "\"I had experience working for a company that manufactures stuff and giving products to the employees. The condition was to stay employed for a year after the gift for the company to cover its cost (I think they imputed the tax), otherwise they'd add the cost to the last paycheck (which they did when I left). But they were straight-forward about it and I signed a paper acknowledging it. However, in your case you didn't get a product (that you could return when leaving if you didn't want to pay), but rather a service. The \"\"winning\"\" trip was definitely supposed to be reported as income to you last year. Is it okay for them to treat me differently than the others for tax purposes? Of course not. But it may be that some strings were attached to the winning of the incentive trip (for example, you're required to stay employed for X time for the company to cover the expense). See my example above. Maybe it was buried somewhere in small letters. Can they do this a year after the trip was won and redeemed? As I said - in this case this sounds shady. Since it is a service which you cannot return - you should have been taxed on it when receiving it. Would the IRS want to know about this fuzzy business trip practice? How would I report it? Here's how you can let them know. Besides now understanding the new level of slime from my former employer is there anything else I should be worried about? Could they do something like this every year just to be annoying? No, once they issued the last paycheck - you're done with them. They cannot issue you more paychecks after you're no longer an employee. In most US States, you are supposed to receive the last paycheck on your last day of work, or in very close proximity (matter of weeks at most).\"" }, { "docid": "402327", "title": "", "text": "\"The P11D is a record of the total benefits you've received in a tax year that haven't been taxed in another way, a bit like the P60 is a record of the total pay and tax you've paid in a tax year. Note that travel for business purposes shouldn't be taxable, and if that's what's being reported on the P11D you may need to make a claim for tax relief to HMRC to avoid having to pay the tax. I'm not sure whether it's normal for such expenses to be reported there. HMRC will normally collect that tax by adjusting your tax code after the P11D is issued, so that more tax is taken off your future income. So you don't need to do anything, as it'll be handled automatically. As to how you know it's accurate, if you have any doubts you'd need to contact your former employer and ask them to confirm the details. In general you ought to know what benefits you actually received so should at least be able to figure out if the number is plausible. If your \"\"travel\"\" was a flight to the USA, then probably it was. If it was a bus ticket, less so :-) If you fill in a tax return, you'll also have to report the amount there which will increase the tax you owe/reduce your refund. You won't be charged twice even if your tax code also changes, as the tax return accounts for the total amount of tax you've already paid. For travel benefits, the exact treatment in relation to tax/P11Ds is summarised here.\"" }, { "docid": "535207", "title": "", "text": "\"Did I do anything wrong by cashing a check made out to \"\"trustee of <401k plan> FBO \"\", and if so how can I fix it? I thought I was just getting a termination payout of the balance. Yes, you did. It was not made to you, and you were not supposed to even be able to cash it. Both you and your bank made a mistake - you made a mistake by depositing a check that doesn't belong to you, and the bank made a mistake by allowing you to deposit a check that is not made out to you to your personal account. How do I handle the taxes I owe on the payout, given that I had a tax-free 1099 two years ago and no 1099 now? It was not tax free two years ago. It would have been tax free if you would forward it to the entity to which the check was intended - since that would not be you. But you didn't do that. As such, there was no withdrawal two years ago, and I believe the 401k plan is wrong to claim otherwise. You did however take the money out in 2014, and it is fully taxable to you, including penalties. You should probably talk to a licensed tax adviser (EA/CPA licensed in your State). My personal (and unprofessional) opinion is that you didn't withdraw the money in 2012 since the check was not made out to you and the recipient never got it. You did withdraw money in 2014 since that's when you actually got the money (even if by mistake). As such, I'd report this withdrawal on the 2014 tax return. However, as I said, I'm not a professional and not licensed to provide tax advice, so this is my opinion only. I strongly suggest you talk to a licensed tax adviser to get a proper opinion and guidance on the matter. If it is determined that the withdrawal was indeed in 2012, then you'll have to amend the 2012 tax return, report the additional income and pay the additional tax (+interest and probably underpayment penalty).\"" }, { "docid": "299211", "title": "", "text": "\"-Alain Wertheimer I'm a hobbyist... Most (probably all) of those older items were sold both prior to my establishing the LLC This is a hobby of yours, this is not your business. You purchased all of these goods for your pleasure, not for their future profit. The later items that you bought after your LLC was establish served both purposes (perks of doing what you love). How should I go about reporting this income for the items I don't have records for how much I purchased them for? There's nothing you can do. As noted above, these items (if you were to testify in court against the IRS). \"\"Losses from the sale of personal-use property, such as your home or car, aren't tax deductible.\"\" Source Do I need to indicate 100% of the income because I can't prove that I sold it at a loss? Yes, if you do not have previous records you must claim a 100% capital gain. Source Addition: As JoeTaxpayer has mentioned in the comments, the second source I posted is for stocks and bonds. So at year begin of 2016, I started selling what I didn't need on eBay and on various forums [January - September]. Because you are not in the business of doing this, you do not need to explain the cost; but you do need to report the income as Gross Income on your 1040. Yes, if you bought a TV three years ago for a $100 and sold it for $50, the IRS would recognize you earning $50. As these are all personal items, they can not be deducted; regardless of gain or loss. Source Later in the year 2016 (October), I started an LLC (October - December) If these are items that you did not record early in the process of your LLC, then it is reported as a 100% gain as you can not prove any business expenses or costs to acquire associated with it. Source Refer to above answer. Refer to above answer. Conclusion Again, this is a income tax question that is split between business and personal use items. This is not a question of other's assessment of the value of the asset. It is solely based on the instruments of the IRS and their assessment of gains and losses from businesses. As OP does not have the necessary documents to prove otherwise, a cost basis of $0 must be assumed; thus you have a 100% gain on sale.\"" }, { "docid": "452259", "title": "", "text": "As littleadv says, if you're a sole proprietorship, you don't need to file a 1099 for money you pay yourself. You certainly will need to file a schedule C or schedule E to report the income. And don't forget SE to pay social security taxes on the income if you made a profit. If your company is a corporation, then -- I'm not a tax lawyer here, but I think the corporation would need to file a 1099 for the money that the corporation pays to you. Assuming that the amount is above the threshold that requires a 1099. That's normally $600, but it's only $10 for royalties." }, { "docid": "191473", "title": "", "text": "LLC is not a federal tax designation. It's a state-level organization. Your LLC can elect to be treated as a partnership, a disregarded entity (i.e., just report the taxes in your individual income tax), or as an S-Corp for federal tax purposes. If you have elected S-Corp, I expect that all the S-Corp rules will apply, as well as any state-level LLC rules that may apply. Disclaimer: I'm not 100% familiar with S-corp rules, so I can't evaluate whether the statements you made about proportional payouts are correct." }, { "docid": "570639", "title": "", "text": "\"Transferring the money or keeping it in US does has no effect on taxes. Your residency status has. Assuming you are Resident Alien in US for tax purpose and have paid the taxes to IRS and you are \"\"Non-Resident\"\" Indian for tax purposes in India as you are more than 182 outside India. How would it effect my Tax in US and India If you are \"\"Non-Resident\"\" in India for tax purposes, there is no tax liability of this in India. I have transferred an amount of approx 15-20k$ to Indian Account (not NRE) By RBI regulation, if you are \"\"Non-Resident\"\" then you should get your savings account converted to \"\"NRO\"\". You may not may not choose to open an NRE account. To keep the paper work clear it helps that you open an NRE account in India. Any investment needed ? Where do i need to declare if any ? These are not relevant. Note any income generated in India, i.e. interest in Savings account / FDs / Rent etc; taxes need to be paid in India and declared in US and taxes paid in US as well. There is some relief under DTAA. There are quite a few question on this site that will help you clarify what needs to be done.\"" }, { "docid": "584238", "title": "", "text": "\"the state of New Mexico provides guidance in this exact situation. On page 4: Gross receipts DOES NOT include: Example: When the seller passes tax to the buyer, the seller should separate, or “back out”, that tax from the total income to arrive at \"\"Gross Receipts,\"\" the amount reported in Column D of the CRS-1 Form. (Please see the example on page 48.) and on page 48: How do I separate (“back out”) gross receipts tax from total gross receipts? See the following examples of how to separate the gross receipts tax: 1) To separate (back out) tax from total receipts at the end of the report period, first subtract deductible and exempt receipts, and then divide total receipts including the tax for the report period by one plus the applicable gross receipts tax rate. For example, if your tax rate is 5.5% and your total receipts including tax are $1,055.00 with no deductions or exemptions, divide $1,055.00 by 1.055. The result is your gross receipts excluding tax (to enter in Column D of the CRS-1 Form) or $1,000. 2) If your tax rate is 5.5%, and your total gross receipts including tax are $1,055.00, and included in that figure are $60 in deductions and another $45 in exemptions: a) Subtract $105 (the sum of your deductions and exemptions) from $1,055. The remainder is $950. This figure still includes the tax you have recovered from your buyers. b) Divide $950 by 1.055 (1 plus the 5.5% tax rate). The result is $900.47. c) In Column D enter the sum of $900.47 plus $60 (the amount of deductible receipts)*, or $960.47. This figure is your gross receipts excluding tax.\"" }, { "docid": "103668", "title": "", "text": "I would deduct all the other payments out as subcontractors, but I typically have all the paperwork and entities set up to make that applicable. In Turbotax I do this with as subcontracting expense under my business entity, but for the IRS the categories of the deductions do not matter This isn't tax advice, it is what I would do, and how I would defend it under an audit. Everyone else that was paid also needs to report it. The lack of reciprocal filing (you deducted income paid to someone else, the person did not report that income, or reported it in a different way) is a number one thing to trigger IRS scrutiny. Although accurate, you need to be aware that you are shifting the tax burden away from yourself, by deducting it." }, { "docid": "245451", "title": "", "text": "Many countries have employers report their employees' salaries and withhold some money for income tax purposes (it's called “pay as you earn”, “withholding taxes” or taxing “at the source”). Often the system is designed in such a way that most people actually pay too much and can get money back at the end of the year. In that case, the salary you receive can certainly be considered a “net salary”. Depending on the tax system, individuals might need to file a separate tax returns to report any other income (investments, rents, whatever) or benefit from tax incentives but it can also be optional. If you live in such a country and your situation is simple enough that there are no applicable deductibles, you might simply choose to forgo it and let your employer take care of everything." }, { "docid": "274278", "title": "", "text": "\"The only \"\"authoritative document\"\" issued by the IRS to date relating to Cryptocurrencies is Notice 2014-21. It has this to say as the first Q&A: Q-1: How is virtual currency treated for federal tax purposes? A-1: For federal tax purposes, virtual currency is treated as property. General tax principles applicable to property transactions apply to transactions using virtual currency. That is to say, it should be treated as property like any other asset. Basis reporting the same as any other property would apply, as described in IRS documentation like Publication 550, Investment Income and Expenses and Publication 551, Basis of Assets. You should be able to use the same basis tracking method as you would use for any other capital asset like stocks or bonds. Per Publication 550 \"\"How To Figure Gain or Loss\"\", You figure gain or loss on a sale or trade of property by comparing the amount you realize with the adjusted basis of the property. Gain. If the amount you realize from a sale or trade is more than the adjusted basis of the property you transfer, the difference is a gain. Loss. If the adjusted basis of the property you transfer is more than the amount you realize, the difference is a loss. That is, the assumption with property is that you would be using specific identification. There are specific rules for mutual funds to allow for using average cost or defaulting to FIFO, but for general \"\"property\"\", including individual stocks and bonds, there is just Specific Identification or FIFO (and FIFO is just making an assumption about what you're choosing to sell first in the absence of any further information). You don't need to track exactly \"\"which Bitcoin\"\" was sold in terms of exactly how the transactions are on the Bitcoin ledger, it's just that you bought x bitcoins on date d, and when you sell a lot of up to x bitcoins you specify in your own records that the sale was of those specific bitcoins that you bought on date d and report it on your tax forms accordingly and keep track of how much of that lot is remaining. It works just like with stocks, where once you buy a share of XYZ Corp on one date and two shares on another date, you don't need to track the movement of stock certificates and ensure that you sell that exact certificate, you just identify which purchase lot is being sold at the time of sale.\"" }, { "docid": "276334", "title": "", "text": "You only have to pay taxes when you convert to dollars. Most exchanges I think have to track their users and provide them with reports for tax purposes. Just holding bitcoin and watching it go up in value does not trigger a taxable event." }, { "docid": "69800", "title": "", "text": "\"I'm no accountant, but I think the way I'd want to approach this kind of thing in Gnucash would be to track it as an Asset, since it is. It sounds like your actual concern is that your tracked asset value isn't reflecting its current \"\"market\"\" value. Presumably because it's risky it's also illiquid, so you're not sure how much value it should have on your books. Your approach suggested here of having it as just as expense gives it a 0 value as an asset, but without tracking that there's something that you own. The two main approaches to tracking an investment in Gnucash are: Of course, both of these approaches do assume that you have some notion of your investment's \"\"current value\"\", which is what you're tracking. As the section on Estimating Valuation of the concepts guide says of valuing illiquid assets, \"\"There is no hard rule on this, and in fact different accountants may prefer to do this differently.\"\" If you really think that the investment isn't worth anything at the moment, then I suppose you should track it at 0, but presumably you think it's worth something or you wouldn't have bought it, right? Even if it's just for your personal records, part of a regular (maybe annual?) review of your investments should include coming up with what you currently value that investment at (perhaps your best guess of what you could sell it for, assuming that you could find a willing buyer), and updating your records accordingly. Of course, if you need a valuation for a bank or for tax purposes or the like, they have more specific rules about how they are tracking what things are worth, but presumably you're trying to track your personal assets for your own reasons to get a handle on what you currently own. So, do that! Take the time to get a handle on the worth of what you currently own. And don't worry about getting the value wrong, just take your best guess, since you can always update it later when you learn new information about what your investment is worth.\"" }, { "docid": "89690", "title": "", "text": "First of all, that link is nonsense. I recommend you read the actual GAO audit report, which has 16T in *revolving loans* with only (if I recall) about 1.8T in actual loans at any one time. Secondly, every time I check the details of a claim from Bernie Sanders he has stretched the truth far beyond reasonable, mostly to keep his name in the news I expect. Now, there was nothing that secret about *anything* in that report that was not reported in GAO reports from earlier. This audit was done for political purposes mostly, and the Fed has audits done regularly, as I stated earlier. This too can be checked, and I recommened you do so rather than believe me or that story. That incident, as you call it, is already exceeding rare. You have to weigh the pros/cons of that incident (which as I pointed out is not really an incident) with the problems that arise when you make more transparent and governmental control of the Fed. If the Fed has a role in stabilizing the economy (which is it's mandate) and if many of the tools do not work as well with more transparency and if there is evidence across many countries that doing such things to the Fed will likely result in certain problems, then one should make that call. However, to want those changes made while being ignorant of the issues is a terrible idea, and it is the least informed that usually yell the loudest for such changes. This would not be a problem except then certain politicians realize they can get votes by pandering to the ignorant masses, which really leads to tanked economies. Find how many economies have been tanked by an independent central banks versus how many have been tanked by political forces meddling with their respective economies. Finally, I highly recommend anytime you read a story that sounds outrageous, track down the source material and read it yourself. If you cannot find source material, or they do not list it, then distrust them. You'll find 99/100 times the outrageousness is created by selectively pulling information from the actual reports. Then track down report sources, wherever possible. Etc. Seriously, read the actual report." }, { "docid": "233922", "title": "", "text": "\"The standard double-entry approach would just be to create a Liability account for the loan, and then make a transfer from that account to your Asset (Savings) account when the loan proceeds are distributed to you. After that point, the loan doesn't \"\"belong\"\" to your Savings account in any way. Each account and transaction is tracked separately. So, you might for instance pay that loan back with a transfer from your Checking account, even though the initial disbursement arrived into your Savings account. In order to see how much of a loan you have remaining, you need to look at the loan's Liability account to see what transactions occurred in it and what its remaining balance is. It sounds like what you're really trying to accomplish is the idea of \"\"earmarking\"\" or \"\"putting into an envelope\"\" certain assets for certain purposes. This kind of budgeting isn't really something that Gnucash excels at. It does have some budget features, but there's more about being able to see how actual expenses are to expected expenses for a reporting period, not about being able to ask \"\"How much 'discretionary' assets do I have left before I start hitting my 'emergency fund'\"\". The closest you get is splitting up your asset accounts into subaccounts as you suggest, in which case you can \"\"allocate\"\" funds for your specific purposes and make transfers between them as needed. That can work well enough depending on your exact goals, though it can sometimes make it a little trickier to reconcile with your actual bank statements. But there's not really an accounting reason to associate the \"\"emergency fund\"\" portion of your assets with the remaining balance of your loan; though there's nothing stopping you from doing so if that's what you're trying to do. Accounting answers questions like \"\"How much have I spent on X in the past?\"\" and \"\"How much do I own right now?\"\". If you want to ask \"\"How much am I allowed to spend on X right now?\"\" or \"\"Am I likely to run out of money soon?\"\", you may want a budgeting tool rather than an accounting tool.\"" }, { "docid": "454650", "title": "", "text": "As you move toward retirement, your portfolio is supposed to move toward low risk, stable investments, more bonds, less stocks, etc. Your question implies that you want to increase your income, most likely because your income is not satisfying your desires. First, any idea that you have that risks your savings, just eliminate it. You are not able to replace those savings. The time for those kind of plays has passed. However, you can improve your situation. Do random odd jobs. Find a part time job that you're willing to do for 10 hours a week or something. Keep this money separate from your retirement savings. Research the stock trades you would like to make and use that 'extra' money to play in the market. Set a rule that you do not touch your nest egg for trading. You may find that being retired gives you the time to do the #1 thing that helps investors make good investments -- research. Then when you make your first million doing this, write a book. If you call it Retire - And Then Get Rich, I expect royalties and a dedication." }, { "docid": "299971", "title": "", "text": "\"I can say that I got X dollars from an account like \"\"Income:Benefits\"\"... but where do I credit that money to? \"\"Expenses:Groceries\"\" Yes doesn't feel right, since I never actually spent that money on food, You did, didn't you? You got food. I'm guessing there's an established convention for this already? Doubt it. Established conventions in accounting are for businesses, and more specifically - public companies. So you can find a GAAP, or IFRS guidelines on how to book benefits (hint: salary expense), but it is not something you may find useful in your own household accounting. Do what is most convenient for you. Since it is a double-booking system - you need to have an account on the other side. Expenses:Groceries doesn't feel right? Add Expenses:Groceries:Benefits or Expenses:Benefits or whatever. When you do your expense and cash-flow reports - you can exclude both the income and the expense benefits accounts if you track them separately, so that they don't affect your tracking of the \"\"real\"\" expenses.\"" } ]

[ { "docid": "483704", "title": "", "text": "\"There's no \"\"183 days\"\" rule. As a US citizen you must pay taxes on all your income, where you live is irrelevant.\"" } ]

[ { "docid": "547460", "title": "", "text": "You can't sell options if you don't have margin account (except covered call). You can't trade futures if you don't have margin account. Everything is immediate when you have margin account. (Including stocks) Margin account is not subject to freeriding rules, but is subject to Pattern Day Trader rules." }, { "docid": "1134", "title": "", "text": "The HSA money is yours to keep. You can't add new money into the account and get a tax deduction for the new money, but you can spend the old money on medical expenses. First log into the website for the HSA and see if you have money left. This can be important because if there is still money left they might be charging you a monthly fee. You should have gotten a letter from the old company or the administrator when you left the High deductible insurance plan. This would have told you your options regarding the spending or transferring of old funds. HSA related numbers would have appeared on your W2, and you should have a 1099-SA from the administrator. It is likely that there is a copy of the 1099 on the administrators website. The numbers you enter on the tax forms depends on how much you contributed from your paycheck, how much your company contributed, and how much you sent (if any) from other sources besides payroll deduction. You will also have to know how much money was withdrawn from the HSA and how much was used for medical purposes. The last month rule is for those people who start in the middle of the year. If you start partway through the year you are allowed to make the maximum contribution if you still have it at the end of the year, and you expect to keep it. The Last Month Rule The Last Month Rule states that if you are covered by an HSA eligible health plan on the first day of the last month of a given year, you are considered an eligible individual for the entire year. In turn, you can then contribute to the HSA for that full year. If you are covered by an HDHP on Dec 1st of a given year, you may contribute the maximum for that year. For example, you could begin coverage and open up my HSA in November of a given year. Come December 1st, you are covered and per the Last Month Rule, considered an eligible employee for that full year. That allows you to contribute up to that year’s contribution limit, even waiting a few months to make a prior year contribution if you like. Back up the truck and load up the HSA! However, there is a catch. The Testing Period The Testing Period states if you use the Last Month Rule, you must remain an eligible individual (covered by HDHP) for the following 12 months. If you fail to remain an eligible individual (change insurance plans, lose insurance plan, receive other health coverage) any “extra” contributions you made as a result of the Last Month Rule will be taxed and penalized. If you contribute per the Last Month Rule and end your HDHP insurance within 1 year, you will have to pay tax on any excess contributions you were allowed to make and pay a 10% penalty. In this case, “excess” contributions are determined by the contribution limit / 12 months, compared to your time eligible." }, { "docid": "589768", "title": "", "text": "If an advisor uses asset allocation and risk management in conjunction with financial planning, performance will be adequate for each client's goals in the LONG RUN. Past performance doesn't mean shit for the future and imo, bragging on performance in a prospect meeting signals that they don't have any other value to lean on and likely take on more risk than they should to show that performance." }, { "docid": "46529", "title": "", "text": "It is a general truism but the reasons are that the rules change dramatically when you simply have more capital. Here are some examples, limited to particular kinds of markets: Under $2,000 in capital Nobody is going to offer you a margin account, and if you do get one it isn't with the best broker on commissions and other capabilities. So this means cash only trading, enjoy your 3 business day settlement periods. This means no shorting, confining a trader to only buy and hold strategies, making them more dependent on luck than a more capable trader. This means it is more expensive to buy stock, since you have to put down 100% of the cash to hold a share, whereas someone with more money puts down less capital to hold the exact same number of shares. This means no covered options strategies or spreads, again limiting the market directions where a trader could earn Under $25,000 in capital In the stock market, the pattern day trader rule applies to retail margin accounts with a balance under $25,000 and this severally limits the kinds of trades you are able to take because of the limit in the number of trades you can take in a given time period. Forget managing a multi-leg option position when the market isn't moving your direction. Under $125,000 in capital Worse margin rules. You excluded portfolio margin from your post, but it is a key part of the answer Over $1,000,000 in capital Participate in private placements, regulation D offerings reserved for accredited investors. These days, as buy and hold investments, these generally have more growth potential than publicly traded offerings. Over $5,000,000 in capital You can easily get the compliance and risk manager to turn the other way on margin rules. This is not conjecture, leverage up to infinity, try not to bankrupt yourself and the trading firm." }, { "docid": "261902", "title": "", "text": "\"The IRS rules are actually the same. 26 U.S. Code § 1091 - Loss from wash sales of stock or securities In the case of any loss claimed to have been sustained from any sale or other disposition of shares of stock or securities where it appears that, within a period beginning 30 days before the date of such sale or disposition and ending 30 days after such date, the taxpayer has acquired (by purchase or by an exchange on which the entire amount of gain or loss was recognized by law), or has entered into a contract or option so to acquire, substantially identical stock or securities, then no deduction shall be allowed... What you should take away from the quote above is \"\"substantially identical stock or securities.\"\" With stocks, one company may happen to have a high correlation, Exxon and Mobil come to mind, before their merger of course. With funds or ETFs, the story is different. The IRS has yet to issue rules regarding what level of overlap or correlation makes two funds or ETFs \"\"substantially identical.\"\" Last month, I wrote an article, Tax Loss Harvesting, which analyses the impact of taking losses each year. I study the 2000's which showed an average loss of 1% per year, a 9% loss for the decade. Tax loss harvesting made the decade slightly positive, i.e. an annual boost of approx 1%.\"" }, { "docid": "593938", "title": "", "text": "\"This may be relevant: it suggests that IRS is lenient with the attachment of the form with 1040. To paraphrase: \"\"The ruling involved a taxpayer who timely filed the election with the IRS within 30 days of the property transfer but who did not attach a copy of the election to his or her Form 1040 for the year of the transfer. Fortunately for the taxpayer in question, the ruling indicated that the submission of the election to the IRS within 30 days of the property transfer fulfilled the requirements for a valid election, and the failure to attach the copy to the tax return did not affect the validity of the election. The IRS requested that the taxpayer forward a copy of the election to the IRS to be associated with the processing of the tax return. - See more at: http://www.bnncpa.com/services/employee_benefit_plans/blog/irs_rules_that_failure_to_attach_83b_election_to_form_1040_did_not_invalida#sthash.0c3h2nJY.dpuf\"\" If someone wants to grok the IRS ruling: http://www.irs.gov/pub/irs-wd/1405008.pdf And this is the article where I saw the above referenced. www.bnncpa.com/services/employee_benefit_plans/blog/irs_rules_that_failure_to_attach_83b_election_to_form_1040_did_not_invalida\"" }, { "docid": "217748", "title": "", "text": "Edit: Let's forget about Wikipedia. From the horse's mouth: The cafeteria plan rules require that a health FSA provide uniform coverage throughout the coverage period (which is the period when the employee is covered by the plan). See Proposed Treasury Regulations Section 1.125-5(d). Under the uniform coverage rules, the maximum amount of reimbursement from a health FSA must be available at all times during the coverage period. This means that the employee’s entire health FSA election is available from the first day of the plan year to reimburse qualified medical expenses incurred during the coverage period. The cafeteria plan may not, therefore, base its reimbursements to an employee on what that employee may have contributed up to any particular date, such as the date the employee is laid-off or terminated. Thus, if an employee’s reimbursements from the health FSA exceed his contributions to the health FSA at the time of lay-off or termination, the employer cannot recoup the difference from the employee. (emphasis added) http://www.irs.gov/pub/irs-wd/1012060.pdf Uniform Coverage Rule The IRS has required that “health FSAS must qualify as accident or health plans. This means that, in general, while the health coverage under the FSA need not be provided through a commercial insurance contract, health FSAS must exhibit the risk-shifting and risk-distribution characteristics of insurance.” This concept has led to the “uniform coverage” rule. The uniform­coverage rule requires that the maximum amount of an employee’s projected elective contributions to a health FSA must be available from the first day of the plan year to reimburse the employee’s qualified medical expenses, regardless of the amount actually contributed to the plan at the time that reimbursement is sought. Citing proposed Treasury Regulations Section the IRS General Counsel has determined that: “Under the uniform coverage rules, the maximum amount of reimbursement from a health FSA must be available at all times during the coverage period. The cafeteria plan may not, therefore, base its reimbursements to an employee on what that employee may have contributed up to any particular date, such as the date the employee is laid-off or terminated. Thus, if an employee’s reimbursements from the health FSA exceed his contributions to the health FSA at the time of or termination, the employer cannot recoup the difference from the employee.” This rule is unfair and also constitutes a disincentive to establishing FSAS because of the exposure to out-of pocket expenditures arising from employees who leave the company. NSBA believes that the uniform coverage rule should also be revised if the or lose- it rule is changed. Revising the use-it or lose-it rule while leaving the uniform coverage rule unchanged will introduce an inappropriate asymmetry to FSAS. An employer should be allowed to deduct any negative amount arising from insuftîcient employee contributions from a terminating partieipant’s last paycheck. http://www.ecfc.org/files/legislative-news/NSBA_(David_Burton).pdf (emphasis added) Now, that's some fresh bitterness for you right there. (Dated August 17, 2012)" }, { "docid": "215760", "title": "", "text": "&gt;A lot can happen to a stock's price in 1 hour A lot happens to the stock price in one hour because lot of trading takes place in one hour, not because of material news. If 30 days seems excessive, make the rule that the stock should be held for 1 day. Point is, 1 hour seems convenient to small investors because it facilitates day trading and 30 days seems excessive for the same reason. What is good for the goose is good for the gander. I abhor HFT and think the advantage unfair but am opposed to banning it for pecuniary reasons. Such is life in a capitalist economy. We pay the price for our freedoms." }, { "docid": "57138", "title": "", "text": "Avoiding the complexities of tax [dividends likely taxed the year they are received, barring special tax accounts which many countries implement in for example, locked-in retirement type accounts; share growth is likely only taxed when sold / on death / on expatriation / similar], and assuming you reinvest the dividends every year in new shares, then yes, total growth in your account is the same whether that growth is comprised of entirely dividends, entirely share increase, or a mixture of both. It is those caveats (tax + reinvestment) which could change things." }, { "docid": "597401", "title": "", "text": "\"FINRA Description of Day Trading rules The rules adopt a new term \"\"pattern day trader,\"\" which includes any margin customer that day trades (buys then sells or sells short then buys the same security on the same day) four or more times in five business days, provided the number of day trades are more than six percent of the customer's total trading activity for that same five-day period. So, there's several ways to avoid being labeled a pattern day trader:\"" }, { "docid": "250314", "title": "", "text": "\"This is the best tl;dr I could make, [original](https://www.bloomberg.com/news/articles/2017-10-15/china-s-zhou-warns-corporate-debt-too-high-urges-fiscal-reform) reduced by 88%. (I'm a bot) ***** &gt; People&amp;#039;s Bank of China Governor Zhou Xiaochuan warned that Chinese companies have taken on too much debt, and argued for less financial leverage as well as fiscal reforms to constrain local government borrowing. &gt; &amp;quot;The main problem is that the corporate debt is too high,&amp;quot; Zhou said Sunday during a panel discussion at a Group of 30 seminar in Washington held in conjunction with the International Monetary Fund and World Bank annual meetings. &gt; Opening Up. Zhou&amp;#039;s remarks were the latest in a string of public comments by China&amp;#039;s normally low-profile central bank chief. ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/76n80v/chinas_central_bank_chief_warns_corporate_debt_is/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ \"\"Version 1.65, ~229048 tl;drs so far.\"\") | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr \"\"PM's and comments are monitored, constructive feedback is welcome.\"\") | *Top* *keywords*: **Zhou**^#1 **financial**^#2 **government**^#3 **debt**^#4 **percent**^#5\"" }, { "docid": "224801", "title": "", "text": "They hold most of time rental value for example if you rent car for 5 days and decline insurance offered at counter - they will ideally hold 5days x rental value per day + insurance x 5 days most of them round of this figure. if the card is issued from overseas like asia they hold extra $ 500 for collection issues. hope this helps you to plan - this is general thumb rule." }, { "docid": "191965", "title": "", "text": "You're interpreting this correctly. Furthermore, if your total tax liability is less than $1000, you can not pay estimates at all, just pay at the tax day. See this safe harbor rule in the IRS publication 17: General rule. In most cases, you must pay estimated tax for 2016 if both of the following apply. You expect to owe at least $1,000 in tax for 2016, after subtracting your withholding and refundable credits. You expect your withholding plus your refundable credits to be less than the smaller of: 90% of the tax to be shown on your 2016 tax return, or 100% of the tax shown on your 2015 tax return (but see Special rules for farmers, fishermen, and higher income taxpayers , later). Your 2015 tax return must cover all 12 months." }, { "docid": "211122", "title": "", "text": "In addition to the expatriation case already mentioned by Ben Miller, traders/investors are required to use mark-to-market accounting on certain investments. These go by Section 1256 contracts due to the part of the law that defines them. Mark-to-market is also required on straddles (combination of a long and and a short position in equities that are expected to vary inversely to each other). Mark-to-market means that you have to treat the positions as if you closed them at their end-of-year market value (even if you still have the position across the new year)." }, { "docid": "348090", "title": "", "text": "If you roll your funds from a 401k to an individual Vanguard account it will be in an IRA. Some people talk about IRA loans, but what is happening is that you are given a check for the value of the IRA and you have 60 days to deposit that full amount in another qualified account before being assessed a distribution penalty. The IRS also has rules to prohibit you from making several back-to-back rollovers to try to float the money for longer than 60 days." }, { "docid": "332926", "title": "", "text": "Dental implants are used in conjunction with restorations, such as crowns, bridges and dentures, to replace one or more missing teeth. To learn more about the benefits of dental implants at our Woodbury dental office, Tamarack Hills Family Dentistry is only one call away. Simply dial (651) 964-3747." }, { "docid": "149581", "title": "", "text": "That's a nice thought. But I doubt it would happen. I sell on EBay and I was on the phone every day for a month over some scammers and ne'er do wells. They didn't do anything special to help me. Lost a lot of money. Just think of the millions of cases like that every day. They're better off having a blanket rule, even if it screws over the seller." }, { "docid": "340263", "title": "", "text": "\"The American \"\"Security Exchange Commission\"\" has imposed a rule upon all stock trading accounts. This rule is \"\"Regulation-T\"\". This rule specifies that stock trading accounts must be permitted three days after the termination of a trade to settle the account. This is just fancy lingo to justify the guarantee that the funds are either transferred out of your account to another persons (the person that made money), or the money flows into your account. A \"\"Day Trader's\"\" account avoids the hassle because you're borrowing money from your broker to trade with and circumvent Reg-T. It's technically not how long you hold the trade that determines if you're a day trader, or not. It's your accounts liquidity and your credit worthiness.\"" }, { "docid": "214852", "title": "", "text": "LOL 1) chart is # of approved rules, not $ 2) we're roughly 100 days into his administration in 2017 and so you're reporting a figure for a fraction of a year. 3) Which rules are which? Which are regulations? The Muslim ban counted here? This is pure drivel." } ]

[ { "docid": "183500", "title": "", "text": "Generally prepaid services should be capitalized over the period prepaid. But if it is up to a year - you can just expense them. As to the technicalities - you can contact Intuit support, but you should be able to put it in the same area where you put all your other business expenses. If you're a sole proprietor - that would be Schedule C." } ]

[ { "docid": "368938", "title": "", "text": "\"Answers: 1: No, Sections 1291-1298 of the IRC were passed in the Reagan adminstration. 2: Not only can a foreign company like a chocolate company fall afoul of the definition of PFIC because of the \"\"asset test\"\", which you cite, but it can also be called a PFIC because of the \"\"income test\"\". For example, I have shares in a development-stage Canadian biotech which is considered a PFIC because it has no income at all, except for a minor amount of bank interest on its working capital. This company is by no means \"\"passive\"\" (it has run 31 clinical trials in over 1100 human research subjects, burning $250M of investor's money in the process) nor is it an \"\"investment company\"\", but the stupid IRS considers it to be a \"\"passive foreign investment company\"\"! The IRS looks at it and sees only the bank account, and assumes it is a foreign shell corporation set up to shield the bank interest from them. 3: Yes, a foreign mutual fund is EXACTLY what congress intended to be a PFIC when passed IRC 1291-1298. (Biotechs, candy factories, ect got nailed as innocent bystanders.) Note that if you hold a US mutual fund then every year you'll get a form 1099 in the mail. The 1099 will report your share of the mutual fund's own income and capital gains, which you must report on your taxes. (You can also have capital gains from selling your shares of the mutual fund, but that's a different thing.) Now suppose that there was no PFIC law. Then the US investors in the mutual fund would do better if the mutual fund were in a foreign country, for two reasons: a) The fund would no longer distribute 1099's. That means the shareholders wouldn't have to pay tax every year on their proportions of the fund's own income/gains. The money that would have sooner gone to the IRS can sit around for years earning interest. b) The fund could return profits to shareholders exclusively through capital gains rather than dividends, thus ensuring that all of the investors' income on the fund would be taxed at <15%-20% rather than up to 39%. The fund could do this by returning cash to shareholders exclusively through buybacks. However, the US mutual fund industry doesn't want to move the industry to Canada, and it only takes a few newspaper articles about a foreign loophole to make congress spring to action. 4) It depends. If you have a PEDIGREED QEF election in place (as I do for my biotech shares) then form 8621 takes a few minutes by hand. However, this requires both the company and the investor to fully cooperate with congress's vision for PFICs. The company cooperates by providing a so-called \"\"PFIC annual information sheet\"\", which replaces the 1099 form for a US mutual fund. The investor cooperates by having a \"\"QEF election\"\" in place for EACH AND EVERY TAX YEAR in which he held the stock and by reporting the numbers from the PFIC annual information sheet on his return. (Note that the QEF election persists once made, until revoked. There are subtleties here that I am glossing over, since \"\"deemed sale\"\" elections and other means may be used to modify a share's holding period to come into compliance.) Note that there is software coming out to handle PFICs, and that the software makers will already run their software to make your form 8621 for $75 or so. I should also warn you that the blogs of tax accountants and tax lawyers all contradict each other on the basic issue of whether you can take capital losses on PFICs for which you have no form 8621 elections. (See section 2.3 of my notes http://tinyurl.com/mh9vlnr for commentary on this mess.) I do not know if the software people will tell you which elections are best made on form 8621, though, or advise you if it's time to simply dump your investment. The professional software is at 8621.com, and the individual 8621 preparation is at http://expattaxtools.com/?page_id=242. BTW, in case you're interested, I wrote up a very careful analysis of how to deal with the PFIC situation for the small biotech I invested in in certain cases. It is posted http://tinyurl.com/mh9vlnr. (For tax reasons it was quite fortunate that the share price dipped to near an all-time low on Jan 1, 2015, making the (next) 2015 tax year ripe for a so-called \"\"deemed sale\"\" election. This was only possible because the company provides the necessary \"\"PFIC annual information statements\"\", which your chocolate factory may or may not do.)\"" }, { "docid": "440780", "title": "", "text": "Your description works except for HBO. HBO isn't included in any bundling because they don't have any advertising. Their only source of revenue is consumers paying them for their content either through subscriptions. Thats why you've seen HBO be very aggressive in DVD publishing and online offerings compared to other channels. I think that in their heart of hearts, HBO's management would very much like to sell directly to the consumer through some sort of digital market place and cut out the cable middle man. Unfortunatly most of their revenue still comes from cable subscriptions, and they can't risk pissing off their business partners by going directly to consumers." }, { "docid": "93638", "title": "", "text": "You need to clarify with Bob what your agreement is. If you and Bob are working together on these jobs as partners, you should get a written partnership agreement done by a lawyer who works with software industry entity formation. You can legally be considered a partnership if you are operating a business together, even if there is nothing in writing. The partnership will have its own tax return, and you each will be allocated 50% of the profits/losses (if that's what you agree to). This amount will be reported on your own individual 1040 as self-employment income. Since you have now lost all the expense deductions you would have taken on your Schedule C, and any home office deduction, it's a good idea to put language in the partnership agreement stating that the partnership will reimburse partners for their out-of-pocket expenses. If Bob is just hiring you as a contractor, you give him your SSN, and he issues you a 1099, like any other client. This should be a situation where you invoice him for the amount you are charging. Same thing with Joe - figure out if you're hiring him as an independent contractor, or if you have a partnership. Either way, you will owe income and self-employment tax on your profits. In the case of a partnership, the amount will be on the K-1 from the partnership return. For an independent contractor who's operating as a sole proprietor, you report the income you invoiced for and received, and deduct your expenses, including independent contractors that you hired, on your Schedule C. Talk to your tax guy about quarterly estimated payments. If you don't have a tax guy, go get one. Find somebody people in your city working in your industry recommend. A good tax person will save you more money than they cost. IRS Circular 230 Notice: Please note that any tax advice contained in this communication is not intended to be used, and cannot be used, by anyone to avoid penalties that may be imposed under federal tax law." }, { "docid": "368679", "title": "", "text": "\"Here are a handful of measures I take myself: I check my credit reports once in a while and look for anything out of the ordinary. If somebody calls me on the telephone claiming to be from my bank or credit card company, utility, etc. I ask for their number, check it, and call them back. I don't give personal information to people merely claiming to be from a place I do business with. I never fill out ballots for free contests. Most of the time these are scams. When I get a call telling me \"\"you won a free cruise\"\" for a ballot I supposedly filled out at the mall, I say they're lying through their teeth. For excitement, I'll sometimes buy a lotto ticket instead. I'm careful when I surf the web. I don't give my personal information to web sites I can't trust. If they look the least bit shady, I'm out. Also, I use different passwords at different web sites. I avoid using a password from a public terminal, but when I must, I change my password soon after. I'm careful when I download software. I don't install anything I didn't get from a trusted source. I pay for software when necessary, so finding a trusted source is not hard. But, I've heard of people who – to save a buck – would download a pirated application from a shady warez site only to be \"\"gifted\"\" a trojan horse key logging or other spyware along with it. When I no longer need a bill, receipt, statement, etc. or any document containing personal information, I shred it, and I use a shredder that does a micro-cut, not just a strip- or cross-cut. The micro-cut remains go in the green bin with wet and yucky organic waste. When I no longer need a hard drive, I use a secure wiping tool like Darik's Boot & Nuke before reusing. If the drive isn't worth reusing, I'll wipe first then take apart with my Torx screwdriver. Once I have the drive platter, I scratch the heck out of it. Remains go to the community recycling depot. That's all I can think of right now; I probably missed a few :-) So, what do others do? I'm curious, too.\"" }, { "docid": "494808", "title": "", "text": "Interesting. When you say DIY you mean pencil and paper. For most of us the choice came down to using a professional vs using the software. Your second bullet really hits the point. The tax return is a giant spreadsheet with multiple cells depending on each other. Short of building my own spreadsheet to perform the task, I found the software, at $30-$50, to be the happy medium between the full DIY and the Pro at $400+. With a single W2, and no other items, the form is likely just a 1040-EZ, and there shouldn't be any recalculating so long as you have the data you need. Pencil/paper is fine. There's no exact time to say go with the software, except, perhaps, when you realize there are enough fields to fill out where the recalculating might be cumbersome, or the need to see the exact tax bracket has value for you. You are clearly in the category that can fill out the one form. At some point, you might have investment income (Schedule D) enough mortgage interest to itemize deductions (Schedule A) etc. You'll know when it's time to go the software route. Keep in mind, there are free online choices from each of the tax software providers. Good for simple returns up to a certain level. Thanks to Phil for noting this in comments. I'll offer an anecdote exemplifying the distinction between using the software as a tool vs having a high knowledge of taxes. I wrote an article The Phantom Tax Zone, in which I explained how the process of taxing Social Security benefits at a certain level created what I called a Phantom Tax Rate. I knew that $1000 more in income could cause $850 of the benefit to be taxed as well, but with a number of factors to consider, I wanted to create a chart to show the tax at each incremental $1000 of income added. Using the software, I simply added $1000, noted the tax due, and repeated. Doing this by hand would have taken a day, not 30 minutes. For you, the anecdote may have no value, Social Security is too far off. For others, who in March are doing their return, the process may hold value. Many people are deciding whether to make their IRA deposit be pre-tax or the Post tax Roth IRA. The software can help them quickly see the effect of +/- $1000 in income and choose the mix that's ideal for them." }, { "docid": "374518", "title": "", "text": "\"Unfortunately I don't think any of the online personal finance applications will do what you're asking. Most (if not all) online person finance software uses a combination of partnerships with the banks themselves and \"\"screen scraping\"\" to import your data. This simplifies things for the user but is typically limited to whenever the service was activated. Online personal finance software is still relatively young and doesn't offer the depth available in a desktop application (yet). If you are unwilling to part with historical data you spent years accumulating you are better off with a desktop application. Online Personal Finance Software Pros Cons Desktop Personal Finance Software Pros Cons In my humble opinion the personal finance software industry really needs a hybrid approach. A desktop application that is synchronized with a website. Offering the stability and tools of a desktop application with the availability of a web application.\"" }, { "docid": "92029", "title": "", "text": "It is a good idea to keep the receipts. The reason being that the dispensation from the ATM and the debit to the account are async process. There are multiple handshakes during this process between the hardware of the ATM, the software controlling the ATM and the core banking software. like any software programming, there are chances of errors, ie amounts being debit wrong due to bugs, or duplicate of transactions being posted. Altough such errors would normally get caught during recon between the ATM software and the Core Banking postings, its advisable to keep the receipts and verify erroneous debits. In such cases, the receipts would provide additional information required by the Bank to rectify the errors promptly." }, { "docid": "57229", "title": "", "text": "Your clients should not send you 1099-MISC if they paid with a credit card. You can refer them to this text in the instructions for the form 1099-MISC: Payments made with a credit card or payment card and certain other types of payments, including third party network transactions, must be reported on Form 1099-K by the payment settlement entity under section 6050W and are not subject to reporting on Form 1099-MISC. See the separate Instructions for Form 1099-K. By sending out the 1099-MISC, your clients are essentially saying that they paid you directly (check or cash) in addition to the payment they made with a credit card (which will be reported on 1099-K). In case of an audit, you'll have trouble convincing the IRS that it didn't happen. I suggest asking the clients not to do this to you, since it may cost you significant amounts to fight the IRS later on. In any case, you report on your tax return what you really got, not what the 1099 says. If you have two 1099's covering the same income - there's no legal obligation to report the income twice. You do not have to pay twice the tax just because you have stupid clients. But you may have troubles explaining it to the IRS, especially if you're dealing with cash in your business. If you want to avoid matching issues, consider reporting all the 1099s, and then subtracting the duplicates and attaching a statement (the software will do it automatically when you add the description in the miscellaneous item) about what it is." }, { "docid": "373043", "title": "", "text": "\"Not sure I understood, so I'll summarize what I think I read: You got scholarship X, paid tuition Y < X, and you got 1098T to report these numbers. You're asking whether you need to pay taxes on (X-Y) that you end up with as income. The answer is: of course. You can have even lower tax liability if you don't include the numbers on W2, right? So why doesn't it occur to you to ask \"\"if I don't include W2 in the software, it comes up with a smaller tax - do I need to include it?\"\"?\"" }, { "docid": "466213", "title": "", "text": "\"You file taxes as usual. W2 is a form given to you, you don't need to fill it. Similarly, 1099. Both report moneys paid to you by your employers. W2 is for actual employer (the one where you're on the payroll), 1099 is for contractors (where you invoice the entity you provide services to and get paid per contract). You need to look at form 1040 and its instructions as to how exactly to fill it. That would be the annual tax return. It has various schedules (A, B, C, D, E, F, H, etc) which you should familiarize yourself with, and various additional forms that you attach to it. If you're self employed, you're expected to make quarterly estimate payments, but if you're a salaried employee you can instruct your employer to withhold the amounts you expect to owe for taxes from your salary, instead. If you're using a tax preparation software (like TurboTax or TaxAct), it will \"\"interview\"\" you to get all the needed information and provide you with the forms filled accordingly. Alternatively you can pay someone to prepare the tax return for you.\"" }, { "docid": "256049", "title": "", "text": "\"Would they let you buy your own Office 365 subscription? It's actually not that expensive, and IMO it's *worth* it. As a possible alternative (depending on how tech-savvy you are), you could install SQL Express for free, which now even includes SSRS. It's *not* Excel, but I've found that once you get past a certain level of complexity in Excel, you're basically trying to emulate the functionality of SQL with a real reporting tool talking to it. Might as well take that leap if they're forcing you to change anyway, and get the massively more powerful platform that comes with it. Make no mistake, I love all things Google, and I'm no Microsoft fanboy; but Excel is **the** \"\"killer app\"\" of the modern office environment. There's a good reason we've seen countless *free* alternatives pop up and fade away over the years.\"" }, { "docid": "548952", "title": "", "text": "why bother trolling? This is obviously a site for sharing information, it makes sense to generally share information. I have subscriptions of a few news papers and magazines, but certainly not every one of them on the internet. I am sure many Redditors have subscriptions to the content they like, but again certainly not all of them." }, { "docid": "557647", "title": "", "text": "Depending on what software you use. It has to be reported as a foreign income and you can claim foreign tax paid as a foreign tax credit." }, { "docid": "21284", "title": "", "text": "For reporting to the IRS, every bank account has a primary tax ID number associated with it. When there are multiple joint owners, they (the owners) usually pick a person at random to be the primary, unless there is a large amount of interest involved, in which case I would suggest consulting a tax attorney. As for the online banking, it depends on your institution's software. My institution allows every individual to have a separate ID; if this is important to you (and it would be to me), then look for another bank that offers it." }, { "docid": "388713", "title": "", "text": "As a new (very!) small business, the IRS has lots of advice and information for you. Start at https://www.irs.gov/businesses/small-businesses-self-employed and be sure you have several pots of coffee or other appropriate aid against somnolence. By default a single-member LLC is 'disregarded' for tax purposes (at least for Federal, and generally states follow Federal although I don't know Mass. specifically), although it does have other effects. If you go this route you simply include the business income and expenses on Schedule C as part of your individual return on 1040, and the net SE income is included along with your other income (if any) in computing your tax. TurboTax or similar software should handle this for you, although you may need a premium version that costs a little more. You can 'elect' to have the LLC taxed as a corporation by filing form 8832, see https://www.irs.gov/businesses/small-businesses-self-employed/limited-liability-company-llc . In principle you are supposed to do this when the entity is 'formed', but in practice AIUI if you do it by the end of the year they won't care at all, and if you do it after the end of the year but before or with your first affected return you qualify for automatic 'relief'. However, deciding how to divide the business income/profits into 'reasonable pay' to yourself versus 'dividends' is more complicated, and filling out corporation tax returns in addition to your individual return (which is still required) is more work, in addition to the work and cost of filing and reporting the LLC itself to your state of choice. Unless/until you make something like $50k-100k a year this probably isn't worth it. 1099 Reporting. Stripe qualifies as a 'payment network' and under a recent law payment networks must annually report to IRS (and copy to you) on form 1099-K if your account exceeds certain thresholds; see https://support.stripe.com/questions/will-i-receive-a-1099-k-and-what-do-i-do-with-it . Note you are still legally required to report and pay tax on your SE income even if you aren't covered by 1099-K (or other) reporting. Self-employment tax. As a self-employed person (if the LLC is disregarded) you have to pay 'SE' tax that is effectively equivalent to the 'FICA' taxes that would be paid by your employer and you as an employee combined. This is 12.4% for Social Security unless/until your total earned income exceeds a cap (for 2017 $127,200, adjusted yearly for inflation), and 2.9% for Medicare with no limit (plus 'Additional Medicare' tax if you exceed a higher threshold and it isn't 'repealed and replaced'). If the LLC elects corporation status it has to pay you reasonable wages for your services, and withhold+pay FICA on those wages like any other employer. Estimated payments. You are required to pay most of your individual income tax, and SE tax if applicable, during the year (generally 90% of your tax or your tax minus $1,000 whichever is less). Most wage-earners don't notice this because it happens automatically through payroll withholding, but as self-employed you are responsible for making sufficient and timely estimated payments, and will owe a penalty if you don't. However, since this is your first year you may have a 'safe harbor'; if you also have income from an employer (reported on W-2, with withholding) and that withholding is sufficent to pay last year's tax, then you are exempt from the 'underpayment' penalty for this year. If you elect corporation status then the corporation (which is really just you) must always make timely payments of withheld amounts, according to one of several different schedules that may apply depending on the amounts; I believe it also must make estimated payments for its own liability, if any, but I'm not familiar with that part." }, { "docid": "413495", "title": "", "text": "There are so many free websites that it's really hard to get customers to pay for your service. On the other hand, quality news apps are rarer, which is why I think subscription-based content on mobile has a wider future than it's online variant." }, { "docid": "538255", "title": "", "text": "ING Direct does this. Also, have you heard of Mvelopes? It's a subscription-based service, but it's pretty simple to use, and it lets you have as many envelopes as you want. You're not limited to five." }, { "docid": "485102", "title": "", "text": "\"Yes. The simplest option to track your spending over time is to familiarize yourself with the \"\"Reports\"\" menu on the toolbar. Take a look specifically at the \"\"Reports > Income/Expense > Income Statement\"\" report, which will sum up your income and spending over a time frame (defaults to the current year). In each report that you run, there is an \"\"Options\"\" button at the top of the screen. Open that and look on the \"\"General\"\" tab, you'll be able to set the time frame that the report displays (if you wanted to set it for the 2 week block since your last paycheck, for example). Other features you're going to want to familiarize yourself with are the Expense charts & statements, the \"\"Cash Flow\"\" report, and the \"\"Budgeting\"\" interface (which is relatively new), although there is a bit of a learning curve to using this last feature. Most of the good ideas when it comes to tracking your spending are independent of the software you're using, but can be augmented with a good financial tracking program. For example, in our household we have multiple credit cards which we pay in full every month. We selected our cards on specific benefits that they provide, such as one card which has a rotating category for cash back at certain business types. We keep that card set on restaurants and put all of our \"\"eating out\"\" expenses on that card. We have other cards for groceries, gas, etc. This makes it easy to see how much we've spent in a given category, and correlates well with the account structure in gnucash.\"" }, { "docid": "192726", "title": "", "text": "\"Basically, yes. Don't use your business account for personal spending because it may invalidate your limited liability protection. Transfer a chunk of money to your personal account, write it down in your books as \"\"distribution\"\" (or something similar), and use it in whatever way you want from your personal account. The IRS doesn't care per se, but mixing personal and business expenses will cause troubles if you're audited because you'll have problems distinguishing one from another. You should be using some accounting software to make sure you track your expenses and distributions correctly. It will make it easier for you to prepare reports for yourself and your tax preparer, and also track distributions and expenses. I suggest GnuCash, I find it highly effective for a small business with not so many transactions (if you have a lot of transactions, then maybe QuickBooks would be more appropriate).\"" } ]

[ { "docid": "55200", "title": "", "text": "As I understand it... Generally housing can't be considered a business expense unless taken at your employer's explicit direction, for the good of the business rather than the employee. Temporary assignment far enough from you home office that commuting or occasional hotel nights are impractical, maybe. In other words, if they wouldn't be (at least theoretically) willing to let you put it on an expense account, you probably can't claim it here." } ]

[ { "docid": "422579", "title": "", "text": "It depends on the terms of the lease, but it's hard to imagine a lease that would allow to do this unilaterally with no strings attached. That means it actually depends not on how much you like your landlady, but on how much she likes you. In general, by signing the lease you assume a contractual obligation to pay the rent every month for the entire term of the lease. In theory, you can be sued if you don't do that. In practice, a lot depends on your relationship with your landlord, as well as the rental market in your area. If the landlord can easily find a replacement tenant, they may be willing to allow you to leave early. If the rental market is slow, they will be more likely to hold you to the agreement. Obviously, if you have a good relationship with the landlord, they may be more inclined to go easy on you. As far as telling your landlady you want to terminate the lease early, unless she's a particularly nasty person, you can just go ahead and tell her you'd like to leave early. What you can't do is actually stop paying rent. If you're on reasonably good terms with your landlady, you could just tell her your situation and say you'd like to move out. She may be willing to work out an arrangement where she lists the apartment while you're still living there, allows prospective tenants to view it while it's occupied, and then has you move out if and when someone else wants to move in (e.g., at the end of the month). Again, exactly how this works will probably depend on the rental market. Assuming you're in the USA, here is a useful page with some info on breaking a lease. As mentioned there, the legal details vary by state." }, { "docid": "317619", "title": "", "text": "I have coworker who reported that he leased a Nissan Leaf from 2013-2016 and was offered $4000 off the contracted purchase price at the end of the lease due to a glut of other lessees turning in for a lease on the newest model with greater range. It's not clear that this experience will be repeated by others three years from now, but there is enough uncertainty in the future electric car market that it's quite possible to have faster depreciation on a new vehicle than you might otherwise expect based on experience with conventional internal combustion powered vehicles. Leasing will remove that uncertainty. Purchasing a lease-return can also offer great value. I looked at the price for a lease return + a new battery with the extended range, and it was still significantly cheaper than buying a completely new vehicle." }, { "docid": "239030", "title": "", "text": "\"Congrats on the upcoming wedding! Here is the official answer to this question, from the IRS. They note that you can choose to treat your spouse as a US resident for tax purposes and file jointly if you want to, by attaching a certain declaration to your tax return. Though I'm not a tax expert, if your partner has significant income it seems like this might increase your taxes due. You can also apply for an SSN (used for tax filings, joint or separate return) at a social security office or US consulate, by form SS-5, or file form W-7 with the IRS to get a Taxpayer Identification Number which is just as useful for this purpose. Without that, you can write \"\"Non Resident Alien\"\" (or \"\"NRA\"\") in the box for your partner's SSN, and mail in a paper return like that. See IRS Publication 17 page 22 (discussions on TurboTax here, here, etc.).\"" }, { "docid": "180686", "title": "", "text": "If he can't manage, best is he sells it off. Its easier to manage cash. Not sure what tax you are talking about. He should have already paid tax on fair market value of the 20 flats. If the intention of Mr X is to gift to son by way of death, then yes the tax will be less. Else whenever Mr X sells there will be tax. how to manage these 20 apartments? Hire a broker. He may front run quite a few things like showing the place etc. There is a risk if he is given a free hand, he may not get good quality tenant. There are quite a few shark brokers [its unregulated] who may arm twist seeing the opportunity of an old man with 20 flats. See if you can do long term lease with companies looking for guest house etc, or certain companies who run guest house. They would like the scale, generally 3-5 years contracts are done. The rent is good and overall less hassle. The risk is most would ask to invest more in furnishing and contracts can be terminated in months notice. If the property is in large metro [Delhi/Bangalore/Chennai/etc] These places have good property management companies. Ensure that you have independent lawyer; there are certain aspects of law that may need to be studied." }, { "docid": "344398", "title": "", "text": "\"Question is, what do we need to do as far as the IRS is concerned? I mean we'll get the money from them and pay it back less than two months later. You're probably worried about the gift tax. Since you're a couple, the maximum exclusion amount is calculated like this: The reason the Pg multiplier stands separate is that gift splitting does require form 709 filed even if no tax is due, unless they actually write separate checks for their respective portions. So the math shows that you and your wife can get at least $28K from anyone without the need of gift tax to be paid or gift tax return to be filed. You can get up to $56K from your parents, but the gift splitting may need to be documented on form 709. Since you're in fact talking about a loan you're going to repay, you'll need to document it (with a note and everything), and document the repayment. If interest is being paid - your parents must declare it on their tax return for the year, obviously. In this case, if the loan is properly documented, repaid and the interest is declared, the IRS won't even bother claiming it was a gift. Even if there's no real interest, it shouldn't be an issue (the IRS might assign some \"\"deemed\"\" interest at their rates that would be considered a gift, but assuming no other gift transactions between you exist for the year the amount would be miniscule and way below the $14K exclusion level). Of course, as with any tax concern, you get here what you paid for. For a proper advice talk to a tax adviser (EA/CPA) licensed in your State.\"" }, { "docid": "552632", "title": "", "text": "The focus of this article isn't on tax revenue. The author is discussing income disparity. The laffer curve doesn't tell the whole story. You are correct, a higher tax rate does not imply higher tax revenue, and a lower tax rate does not imply less revenue. Changing tax rates isn't going to significantly affect tax revenue. However, there are a broad range of other effects when changing tax rates. In evaluating adjustments to tax rates, our focus needs to be on these secondary effects. We are taxed on *income* not *revenue*. When I sell you a $10 widget that I paid a worker $2 to produce from $5 of materials, I pay taxes on the $3 net income, not the $10 revenue I received from you. The main way businesses avoid high marginal tax rates is by increasing deductible expenses, such that their net income after these expenses keeps them below their desired tax bracket. It is far better to spend that money on something that can benefit the business than simply give it to the government. Any businessman would rather keep his earnings if possible. If that is not possible, he'd prefer to spend them on something that can help him, rather than squandering it on junk or giving it away to the government. For most businesses, the largest deductible expense is payroll. Any decent employer would prefer to pay out a Christmas bonus instead of giving that same amount to Uncle Sam. Any businessman would prefer to pay for additional advertising, or a charitable donation to a worthy cause, rather than paying the IRS. Run up the top-tier tax rate and suddenly, businessmen feel a compelling need to lower their prices and pay their workers more. Run up the tax rate, and income disparity shrinks. Run up the tax rate, and you put more money in the hands of consumers." }, { "docid": "213393", "title": "", "text": "\"Electric does make a difference when considering whether to lease or buy. The make/model is something to consider. The state you live in also makes a difference. If you are purchasing a small electric compliance car (like the Fiat 500e), leasing is almost always a better deal. These cars are often only available in certain states (California and Oregon), and the lease deals available are very enticing. For example, the Fiat 500e is often available at well under $100/mo in a three-year lease with $0 down, while purchasing it would cost far more ($30k, minus credits/rebates = $20k), even when considering the residual value. If you want to own a Tesla Model S, I recommend purchasing a used car -- the market is somewhat flooded with used Teslas because some owners like to upgrade to the latest and greatest features and take a pretty big loss on their \"\"old\"\" Tesla. You can save a lot of money on a pre-owned Model S with relatively low miles, and the battery packs have been holding up well. If you have your heart set on a new Model S, I would treat it like any other vehicle and do the comparison of lease vs buy. One thing to keep in mind that buying a Model S before the end of 2016 will grandfather you into the free supercharging for life, which makes the car more valuable in the future. Right now (2016/2017) there is a $7500 federal tax credit when buying an electric vehicle. If you lease, the leasing company gets the credit, not you. The cost of the lease should indirectly reflect this credit, however. Some states have additional incentives. California has a $2500 rebate, for example, that you can receive even if you lease the vehicle. To summarize: a small compliance car often has very good reasons to lease. An expensive luxury car like the Tesla can be looked at like any other lease vs buy decision, and buying a used Model S may save the most money.\"" }, { "docid": "199127", "title": "", "text": "&gt;Bankruptcy is simply a financial tool inside our legal system, nothing more, nothing less. So hypothetically, if I were a high net worth individual. I create a number of Corporations and put all my assets in them. I lease a car with Corp #2 - which I never have more than a few thousand $ in. Have my House in Malibu in Corp#1 My place is Manhattan is in C#3 I am an employee of C#4, 5 and 6. I crash my car into you and you are permanently disabled. You can't work, you don't have much savings, lose your house or apartment. As it turns out, there is no insurance on the car and the lease hasn't been paid in months. You sue me. No assets in Corp #1. You sue me personally - yet on paper I don't own anything. My personal net worth is effectively $0. Assuming you can find an attorney to take this on - and you win in court and get a judgement against me. I have no assets. Nothing to take, nothing to garnish - nothing at all. You on the other hand have bills piling up not to mention the $100's thousands in medical expenses. You are ruined. I am vacationing in the South of France. Nothing unethical about that I guess. *spelling miztaks" }, { "docid": "82578", "title": "", "text": "Brief about Carpets, various types and more…. Carpet is a material that covers the floor, protects from dust, stains and stinks etc; it is soft and gives warm pleasure to barefoot. Carpets are made of polypropylene, nylon, polyester etc, which is also called as synthetic fibers. But in ancient days during 20th century wool was used to manufacture carpets and was quite expensive. The carpets upper layer pile will be attached to backing, where they have primary, secondary backing. Here are a list of some soft carpets with great style, color and patterns Caress-501 Paper Moon Caress 501 paper moon soft carpet is completely made of smartstrand sorona fiber. The width of this carpet is around 12feet wide and available in different colors like cob web, Italian suede, rock wall etc. It put resistance to all kinds of stains and dirt. Incredible-Sweet Potato Incredible-sweet potato is a kid’s favorite carpet made of smartstrand w/du pont sorona triexta and it is also available in varied colors like muslin, pineapple, tiki hut etc, and it’s quite inexpensive too. Formal Affair -Canopy It is a residential plush carpet made of soft pet filament polyester. This formal affair-canopy soft carpet is smooth in nature and it adds a conventional look to your decor. Still, there are many high quality soft carpets are available that can give a fabulous look to your commercial, residential space with more durability and comfort. for more info http://firststepflooring.net/product-category/carpets/soft-carpet/" }, { "docid": "97211", "title": "", "text": "I heard from someone that since my friends are moving money to my account, I'm liable to be taxed by the IRS Not completely true. If there are large deposits in your account, you may be asked for clarification from IRS. If there is a reasonable justification; in your case the agreement that you are sharing the apartment, the lease deed has all the 3 names, there is explicit mention in lease about how funds are transferred. Note at times the audit maybe in future for quite a bit of past. Hence you would need to keep the record for quite some time. Alternative arrangements like opening a joint account and making payments from that account may make it easier from record keeping point of view." }, { "docid": "408434", "title": "", "text": "You can have multiple W2 forms on the same tax return. If you are using software, it will have the ability for you to enter additional W2 forms. If you are doing it by paper, just follow the instructions and combine the numbers at the correct place and attach both. Similarly you can also have a 1099 with and without a W2. Just remember that with a 1099 you will have to pay the self employment tax ( FICA taxes, both employee and employer) and that no taxes will be withheld. You will want to either adjust the withholding on your main job or file quartely estimated taxes. Travel reimbursement should be the same tax exempt wise. The difference is that with a 1098, you will need to list your business expenses for deduction on the corresponding tax schedule. The value on the 1099 will include travel reimbursement. But then you can deduct your self employment expenses. I believe schedule C is where this occurs." }, { "docid": "93099", "title": "", "text": "Are there any IRS regulations I should be aware of when sending money to India? None. As long as you are following the standard banking channels. You are also declaring all the accounts held outside US in your tax returns. FBAR. Is it legal to do so? Yes it is legal. do I have to declare how much I am investing and pay extra taxes? As part of FBAR. Income earned [including interest, capital gains, etc] needs to be paid in India [there are some exemptions for example interest on NRE accounts] as well as in the US [relief can be claimed under DTAA Indian version here and US here]. So if you already have paid taxes on salary and say transfer USD 10K to India; there is no tax on this 10K. If this 10K generates an income of say 2K; this 2K is taxable as per normal classification and rules." }, { "docid": "55960", "title": "", "text": "My first apartment was a large 750 sq foot studio apartment. I am sure you could find a smaller studio apartment. There is no reason a minimum wage employee should expect to live in an average apartment when they make below average wages, they should expect to live in the least expensive housing type or with their parents. Originally, minimum wage was for a kids first job, not for an adult working fast food. At some point kids stopped working in high school. I had jobs in high school. In the last 10 years something changed." }, { "docid": "445298", "title": "", "text": "\"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).\"" }, { "docid": "287660", "title": "", "text": "People that have kids and aren't rich are in for a rude awakening if they want to live in NYC. Plus nobody moves to NYC and becomes a janitor making 100k. You have to be born into a position like that and he probably has rent controlled apartment or bought 50 years ago. He probably has it better than most." }, { "docid": "219934", "title": "", "text": "I would not take this personal loan. Let's look closer at your options. Currently, you are paying $1100 a month in rent, and you have all the money saved up that you need to be able to pay cash for school. That's a good position to be in. You are proposing to take out a loan and buy an apartment. Between your new mortgage and your new personal loan payment, you'll be paying $1500 a month, and that is before you pay for the extra expenses involved in owning, such as property taxes, insurance, etc. Yes, you'll be gaining some equity in an apartment, but in the short term over the next two years, you'll be spending more money, and in the first two years of a 30 year mortgage, almost all of your payment is interest anyway. In two years from now, you'll have a master's degree and hopefully be able to make more income. Will you want to get a new job? Will you be moving to a new city? Maybe, maybe not. By refraining from purchasing the apartment now, you are able to save up more cash over the next two years and you won't have an apartment tying you down. With the money you save by not taking the personal loan, you'll have enough cash for a down payment for an apartment wherever your new master's degree takes you." }, { "docid": "216108", "title": "", "text": "None of the previous answers calls out an important factor to residential property ownership bias towards individual investors. The amount of time spent managing (leasing, maintenance and rent collection) on single properties is much higher, per property, than larger investments. But what is mentioned in passing is the bias towards smaller investments. Fewer individuals have the capital to purchase and engage in the leasing of multi-tenant properties, but they are more likely to have the funds for smaller investments. So the smaller investor can both afford the entry costs, and the time investment, while the larger corporate entities benefit from the opposite proposition." }, { "docid": "20987", "title": "", "text": "1) The easy way is to find a job and they will assign you an SSN. 2) Here's the hard way. If you're Canadian, open a TD Boarderless account in the U.S. Put a small investment into any investment that would generate some type of income, such as capital gain, dividends, interest and etc... Then you will need to file a US tax return to declare your income if you receive U.S. tax slips (although you're likely below the min filing requirement) at year end. To file a U.S. tax return, you may need what's called an ITIN or individual tax id number. With the ITIN, you can get credit from the US TD boarderless account (only). Consider getting a prepaid US credit card with the TD account to futher build credit at that specific bank. It's not much credit, but you do start with creating a history." }, { "docid": "512267", "title": "", "text": "It is best to take advise from / appoint a professional CA. Will I have to pay GST? No GST is applicable. Exports outside of India do not have GST. Do I have to collect TDS when I send money to the PUBLISHERS ? No But another guy said, I have to pay 18% tax when receiving and sending payments, apart from that I have to collect 30.9% TDS when sending payment to the PUBLISHERS(outside India). There is only income tax applicable on profits. So whatever you get from Advertisers less of payments to publishers less of your expenses is your profit. Since you are doing this as individual, you will have to declare this as income from other sources and pay income tax as appropriate. Note there are restrictions on sending payments outside of India plus there are exchange rate fluctuations. It is best you open an Foreign Currency Resident [or Domestic] Account. This will enable you payout someone without much issues. Else you will have to follow FEMA and LRS schemes of RBI." } ]

[ { "docid": "148208", "title": "", "text": "If you buy US stocks when the CAD is high and sell them when the CAD is lower you will make a currency gain on top of any profit or loss from the stock investments. If you buy US stocks when the CAD is low and sell when the CAD is higher any profits from gains from the stock investment will be reduced and any losses will be increased. If you are just starting out you may be better off investing in your own country to avoid any currency risk adding to your stock market risk." } ]

[ { "docid": "309538", "title": "", "text": "You can use Norbet's Gambit to convert between USD and CAD either direction. I have never personally done this, but I am planning to convert some CAD to USD soon, so I can invest in USD index funds without paying the typical 2% conversion fee. You must be okay with waiting a few days for the trades to settle, and okay with the fact that the exchange rate will almost certainly change before you sell the shares in the opposite currency. The spread on DLR.TO is about 0.01% - 0.02%, and you also have brokerage commissions and fees. If you use a discount broker the commissions and fees can be quite low. EG. To transfer $5000 USD to CAD using Questrade, you would deposit the USD into a Questrade account and then purchase ~500 units of DLR.U.TO , since it is an ETF there is no commission on the purchase. Then you request that they journal the shares over to DLR.TO and you sell them in CAD (will have about a $5 fee in CAD, and lose about $1 on the spread) and withdraw. The whole thing will have cost you $6 CAD, in lieu of ~$100 you would pay if you did a straightforward conversion with a 2% exchange fee. The difference in fees scales up as the amount you transfer increases. Someone has posted the chat log from when they requested their shares be journaled from DLR.TO to DLR.U.TO here. It looks like it was quite straightforward. Of course there is a time-cost, and the nuisance of signing up for an maintaining an account with a broker if you don't have one already. You can do it on non discount-brokers, but it will only be worth it to do it with a larger amount of money, since the commissions are larger. Note: If you have enough room to hold the CAD amount in your TFSA and will still have that much room at the end of the calendar year, I recommend doing the exchange in a TFSA account. The taxes are minimal unless the exchange rate changes drastically while your trades are settling (from capital gains or losses while waiting a few days for the trades to settle), but they are annoying to calculate, if you do it often. Warning if you do it in a TFSA be sure not to over contribute. Every time you deposit counts as a contribution and your withdrawals don't count against the limit until the next calendar year." }, { "docid": "599420", "title": "", "text": "A stopped clock is right two times a day. We may get a market crash similar to the financial crisis or the dot com crash or we may not. What if over the next 10 years rates rise very sluggishly, low inflation, and low growth more or less continues with maybe one brief and shallow recession. In that case I bet US stocks produce 4-5% returns per year and US bonds produce maybe 1-2% per year. European and emerging market stocks should have higher returns because they are in an earlier part of the cycle. I think your baseline has to look something like that. The last two crashes were caused by the tech bubble and the housing bubble - where is the bubble today? US stocks are expensive, but probably not in bubble territory. Bonds worldwide are unattractive with low or negative yields - negative yields maybe a bubble, but central banks will be the most hurt by negative rates and they are in a strong position to take the pain. There could be a crash I just don't see how we get there yet - maybe china?" }, { "docid": "20830", "title": "", "text": "Moody's came out with an analysis today saying the requirement could be slightly good for for-profit hospitals (Bad-debt charges will decline. The expansion of healthcare coverage under the law will lessen for-profit hospital operators’ exposure to bad debts, which in turn will improve margins and cash flow. However, we expect that the growth rate of Medicare reimbursements will also slow down, offsetting the benefit of lower bad-debt expense and making the overall credit impact of the ruling neutral to slightly positive), negative for pharmaceutical cos. (Pharmaceutical companies will continue to pay for the full adoption of the Affordable Care Act in the form of higher rebates to the government for Medicaid drug costs, discounts to seniors covered under Medicare Part D drug plans and a new industry fee) and slightly negative for medical device firms (Beginning Jan. 1, 2013, US medical-device product sales will be subject to a 2.3% excise tax; the excise tax will be tax-deductible, resulting in an estimated effective tax rate of 1.5% on US device revenues)." }, { "docid": "282028", "title": "", "text": "\"The \"\"hidden\"\" fees in any transfer are usually: Foreign exchange transfer services are usually the cheapest option for sending money abroad when a conversion is involved. They tend to offer ways to get the money to or from them cheaply or for free and they typically offer low or no fees plus much better exchange rates than the alternatives. My preferred foreign exchange service is XE Trade. It looks like they support CAD to ZAR transfers so you might check them out. In my experience, they have not set a minimum on the amount I send although it does impact the exchange rate they will offer. The rate is still better than other alternatives available to me though. Note that for large enough transfers, the exchange rate difference will dominate all other costs. For example, if you transfer $10,000 and you pay $100 for the transfer plus $50 in wire fees ($150 in fees) but get a 2% better exchange rate than a \"\"free\"\" service, you would save $50 by choosing the non free service.\"" }, { "docid": "210678", "title": "", "text": "If you want to convert more than a few thousand dollars, one somewhat complex method is to have two investment accounts at a discount broker that operations both in Canada and the USA, then buy securities for USD on a US exchange, have your broker move them to the Canadian account, then sell them on a Canadian exchange for CAD. This will, of course, incur trading fees, but they should be lower than most currency conversion fees if you convert more than a few thousand dollars, because trading fees typically have a very small percentage component. Using a currency ETF as the security to buy/sell can eliminate the market risk. In any case, it may take up to a week for the trades and transfer to settle." }, { "docid": "66772", "title": "", "text": "Does it make sense to calculate the IRR based on the outstanding value of the project, or just use the cash flows paid out? Let's assume I invest x amount every year for 49 years, and the investment grows at a constant rate, but I do not get dividends before (which will be constant) 50 years later. I assume that the value of the investment will decline as it pays dividend, and will be worth 0 when the dividends stop. Do I calculate the IRR as the negative streams of outflows for the first 49 years and then positive cash inflows from 50 year in the future? If I apply this method, the IRR will be very low, almost equal to the annual expected return. Or based on the current value of the project for each year combined with cash outflows for the first 49 years and dividends from year 50? If I apply this method, the IRR will be a lot higher than the first method." }, { "docid": "220720", "title": "", "text": "Keep in mind there are a couple of points to ponder here: Rates are really low. With rates being so low, unless there is deflation, it is pretty easy to see even moderate inflation of 1-2% being enough to eat the yield completely which would be why the returns are negative. Inflation is still relatively contained. With inflation low, there is no reason for the central banks to raise rates which would give new bonds a better rate. Thus, this changes in CPI are still in the range where central banks want to be stimulative with their policy which means rates are low which if lower than inflation rates would give a negative real return which would be seen as a way to trigger more spending since putting the money into treasury debt will lose money to inflation in terms of purchasing power. A good question to ponder is has this happened before in the history of the world and what could we learn from that point in time. The idea for investors would be to find alternative holdings for their cash and bonds if they want to beat inflation though there are some inflation-indexed bonds that aren't likely appearing in the chart that could also be something to add to the picture here." }, { "docid": "18436", "title": "", "text": "Dollar cost averaging is an great way to diversify your investment risk. There's mainly 2 things you want to achieve when you're saving for retirement: 1) Keep your principal investment; 2) Grow it. The best methods recommended by most financial institutions are as follows: 1) Diversification; 2) Re-balance. There are a lot of additional recommendations, but these are my main take away. When you dollar cost average, you're essentially diversifying your exchange risk between the value of the funds you're investing. Including the ups and downs of the value of the underlying asset, may actually be re-balancing. Picking your asset portfolio: 1) You generally want to include within your 401k or any other invest, classes of investments that do not always move in total correlation as this allows you to diversify risk; 2) I'm making a lot of assumptions here - since you may have already picked your asset classes. Consider utilizing the following to tell you when to buy or sell your underlying investment: 1) Google re-balance excel sheet to find several examples of re-balance tools to help you always buy low and sell high; 2) Enter your portfolio investment; 3) Utilize the movement to invest in the underlying assets based on market movement; and 4) Execute in an emotionless way and stick to your plan. Example - Facts 1) I have 1 CAD and 1 USD in my 401k. Plan I will invest 1 dollar in the ratio of 50/50 - forever. Let's start in 2011 since we were closer to par: 2010 - 1 CAD (value 1 USD) and 1 USD (value 1 USD) = 50/50 ratio 2011 start - 1 CAD ( value .8 USD) and 1 USD (value 1 USD) = 40/60 ratio 2011 - rebalance - invest 1 USD as follows purchase .75 CAD (.60 USD) and purchase .40 USD = total of 1 USD reinvested 2011 end - 1.75 CAD (value 1.4USD) and 1.4 USD (value 1.4 USD) - 50/50 ratio As long as the fundamentals of your underlying assets (i.e. you're not expecting hyperinflation or your asset to approach 0), this approach will always build value over time since you're always buying low and selling high while dollar averaging. Keep in mind it does reduce your potential gains - but if you're looking to max gain, it may mean you're also max potential loss - unless you're able to find A symmetrical investments. I hope this helps." }, { "docid": "587508", "title": "", "text": "Right, I understand minority interest but it is typically reported as a positive under liabilities instead of a negative. For example, when you are calculating the enterprise value of a company, you add back in the minority interest. Enterprise Value= Market Share +Pref Equity + Min Interest+ Total Debt - Cash and ST Equivalents. EV is used to quantify the total price of a company's worth. If you have negative Min Interest on your books, that will make your EV less than it should be, creating an incorrect valuation. This just doesn't make any sense to me. Does it mean that the subsidiary that they had a stake in had a negative earning?" }, { "docid": "559363", "title": "", "text": "I've spent enough time researching this question where I feel comfortable enough providing an answer. I'll start with the high level fundamentals and work my way down to the specific question that I had. So point #5 is really the starting point for my answer. We want to find companies that are investing their money. A good company should be reinvesting most of its excess assets so that it can make more money off of them. If a company has too much working capital, then it is not being efficiently reinvested. That explains why excess working capital can have a negative impact on Return on Capital. But what about the fact that current liabilities in excess of current assets has a positive impact on the Return on Capital calculation? That is a problem, period. If current liabilities exceed current assets then the company may have a hard time meeting their short term financial obligations. This could mean borrowing more money, or it could mean something worse - like bankruptcy. If the company borrows money, then it will have to repay it in the future at higher costs. This approach could be fine if the company can invest money at a rate of return exceeding the cost of their debt, but to favor debt in the Return on Capital calculation is wrong. That scenario would skew the metric. The company has to overcome this debt. Anyways, this is my understanding, as the amateur investor. My credibility is not even comparable to Greenblatt's credibility, so I have no business calling any part of his calculation wrong. But, in defense of my explanation, Greenblatt doesn't get into these gritty details so I don't know that he allowed current liabilities in excess of current assets to have a positive impact on his Return on Capital calculation." }, { "docid": "149420", "title": "", "text": "The shift to trading at the close began in 2008. Traders did not want to be caught off guard by surprise news and there was a lot of volatility during the financial crisis, so they would close their position in the evening. Thats how it began. There are two reasons why it sticks around. First, there has been an increase usage of index funds or passive funds. These funds tend to update their positions at the end of the day. From the WSJ: Another factor behind the shift has been the proliferation of passively managed investments, such as index funds. These funds aim to mimic an index, like the S&P 500, by owning the shares that comprise it. Index funds don’t trade as often as active investors, but when they do, it is typically near the market close, traders say. That is because buying or selling a stock at its closing price better aligns their performance with the index they are trying to emulate. The second reason is simply that volume attracts volume. As a result of whats mentioned above, you have a shift to end of day trading, and the corrolary to that is that there is a liquidity shortage from 10am to 3pm. Thus, if you want to buy or sell a stock, but there are few buyers or sellers around, you will significant move the price when you enter your order. Obviously this does not affect retail traders, but imagine hedge funds entering or closing a billion dollar position. It can make a huge impact on price. And one way to mitigate that is to wait until there are more market participants to take the other end of your trade, just as at the end of the day. So this is a self-reinforcing trend that has begun in the markets and will likely stick around. http://www.wsj.com/articles/traders-pile-in-at-the-close-1432768080" }, { "docid": "260756", "title": "", "text": "Fundamentally, it's no different than normal. A risky entity must entice investors with higher interest rates than less risky entities. We're just in such a low interest rate environment that the rate spread now dips below zero and very low risk entities can issue debt with a negative coupon. Though I agree that this makes no sense and the world's gone mad." }, { "docid": "249801", "title": "", "text": "agreed. shorting the box kills you on commissions. your negative theta on a straight put position won't be a problem until you're at least 60 days from expiration. (i would even argue you're safe until 30 days out.) plus the positive vega can give you some extra juice if gold does end up falling." }, { "docid": "465106", "title": "", "text": "Yes, you still need to pay income tax on your capital gain regardless of whether you converted your USD proceeds back into CAD. When you calculate your gains for tax purposes, you'll need to convert all of your gains to Canadian dollars. Generally speaking, CRA will expect you to use a historical USD to CAD exchange rate published by the Bank of Canada. At that page, notice the remark at right: Are the Exchange Rates Shown Here Accepted by Canada Revenue Agency? Yes. The Agency accepts Bank of Canada exchange rates as the basis for calculations involving income and expenses that are denominated in foreign currencies." }, { "docid": "245918", "title": "", "text": "\"In the US, the government effectively sets a price floor for rents with a concept called \"\"prevailing rent\"\" for government subsidy. Even the crappiest, minimally compliant hovel is ultimately worth whatever the government will issue housing vouchers for. Rent can and does fluctuate for the higher end of the market. Basically in most places the available, cheap credit has a negative impact on rent prices, and tighter, costlier credit increases demand and rents. Local economic events have an impact too. If the company closes in a company town, people leave.\"" }, { "docid": "228488", "title": "", "text": "You say you have 90% in stocks. I'll assume that you have the other 10% in bonds. For the sake of simplicity, I'll assume that your investments in stocks are in nice, passive indexed mutual funds and ETFs, rather than in individual stocks. A 90% allocation in stocks is considered aggressive. The problem is that if the stock market crashes, you may lose 40% or more of your investment in a single year. As you point out, you are investing for the long term. That's great, it means you can rest easy if the stock market crashes, safe in the hope that you have many years for it to recover. So long as you have the emotional willpower to stick with it. Would you be better off with a 100% allocation in stocks? You'd think so, wouldn't you. After all, the stock market as a whole gives better expected returns than the bond market. But keep in mind, the stock market and the bond market are (somewhat) negatively correlated. That means when the stock market goes down, the bond market often goes up, and vice versa. Investing some of your money in bonds will slightly reduce your expected return but will also reduce your standard deviation and your maximum annual loss. Canadian Couch Potato has an interesting write-up on how to estimate stock and bond returns. It's based on your stocks being invested equally in the Canadian, U.S., and international markets. As you live in the U.S., that likely doesn't directly apply to you; you probably ignore the Canadian stock market, but your returns will be fairly similar. I've reproduced part of that table here: As you can see, your expected return is highest with a 100% allocation in stocks. With a 20 year window, you likely can recover from any crash. If you have the stomach for it, it's the allocation with the highest expected return. Once you get closer to retirement, though, you have less time to wait for the stock market to recover. If you still have 90% or 100% of your investment in stocks and the market crashes by 44%, it might well take you more than 6 years to recover. Canadian Couch Potato has another article, Does a 60/40 Portfolio Still Make Sense? A 60/40 portfolio is a fairly common split for regular investors. Typically considered not too aggressive, not too conservative. The article references an AP article that suggests, in the current financial climate, 60/40 isn't enough. Even they aren't recommending a 90/10 or a 100/0 split, though. Personally, I think 60/40 is too conservative. However, I don't have the stomach for a 100/0 split or even a 90/10 split. Okay, to get back to your question. So long as your time horizon is far enough out, the expected return is highest with a 100% allocation in stocks. Be sure that you can tolerate the risk, though. A 30% or 40% hit to your investments is enough to make anyone jittery. Investing a portion of your money in bonds slightly lowers your expected return but can measurably reduce your risk. As you get closer to retirement and your time horizon narrows, you have less time to recover from a stock market crash and do need to be more conservative. 6 years is probably too short to keep all your money in stocks. Is your stated approach reasonable? Well, only you can answer that. :)" }, { "docid": "568313", "title": "", "text": "General advice for novice investors is to have the majority of your holdings be denominated in your home currency as this reduces volatility which can make people squeamish and, related to your second question, prevents all sorts of confusion. A rising CAD actually decreases the value (for you) of your current USD stock. After all, the same amount of USD now buys you less in CAD. An exception to the rule can be made if you would use USD often in your daily life yet your income is CAD. In this case owning stock denominated in USD can form a natural hedge in your life (USD goes up -> your relative income goes down but stock value goes up and visa versa). Keep in mind —as mentioned in the comments— that an US company with a listing in CAD is still going to be affected by price swings of USD." }, { "docid": "440220", "title": "", "text": "Uhm, this is my disclaimer that this is not financial advice. But. I would imagine a decent amount of high growth tech will go into the toilet. Also cyclicals that are heavily reliant on the low cost of short term capital. But really these are just some intuitive guesses. It would really depend on what the mechanism and impact of a future recession would be. Curious though, why do you personally think a recession is looming? I know there's been a lot of talk but per the VIX, investors' worries don't appear to be affecting their behavior too much (at least in equities). I think the big risk is the Fed not being able to control the yield curve, i.e if short term rates increase but the Fed can't or won't shrink the balance sheet enough to impact long term rates. Just an idea." }, { "docid": "42475", "title": "", "text": "\"The interest rate offered by a bond is called the nominal interest rate. The so-called real interest rate is the nominal interest rate minus the rate of inflation. If inflation is equal to or greater than the nominal rate at any given time, the REAL interest rate is zero or negative. We're talking about a ten year bond. It's possible for the real interest rate to be negative for one or two years of the bond's life, and positive for eight or nine. On the other hand, if we have a period of rising inflation, as in the 1970s, the inflation rate will exceed the (original) interest rate in most years, meaning that the real interest rate on the ten year bond will be negative over its whole life. People lost \"\"serious\"\" money on bonds (and loans) in the 1970s. In such situations, the BORROWERS make out. That is, they borrow money at low rates, earn inflation (plus a little more) pay back inflated dollars, and pocket the difference. For them, the money is \"\"free.\"\"\"" } ]

[ { "docid": "277482", "title": "", "text": "At the time of writing, the Canadian dollar is worth roughly $0.75 U.S. Now, it's not possible for you to accurately predict what it'll be worth in, say, ten years. Maybe it'll be worth $0.50 U.S. Maybe $0.67. Maybe $1.00. Additionally, you can't know in advance if the Canadian economy will grow faster than the U.S., or slower, or by how much. Let's say you don't want to make a prediction. You just want to invest 50% of your money in Canadian stocks, 50% in U.S. Great. Do that, and don't worry about the current interest rates. Let's say that you do want to make a prediction. You are firmly of the belief that the Canadian dollar will be worth $1.00 U.S. dollar in approximately ten years. And furthermore, the Canadian economy and the U.S. economy will grow at roughly equal rates, in their local currencies. Great. You should put more of your money in Canadian stocks. Let's say that you want to make a prediction. The Canadian economy is tanking. It's going to be worth $0.67 or less in ten years. And on top of that, the U.S. economy is primed for growth. It's going to grow far faster than the Canadian economy. In that case, you want to invest mostly in U.S. stocks. Let's get more complicated. You think the Canadian dollar is going to recover, but boy, maple syrup futures are in trouble. The next decade is all about Micky Mouse. Now what should you do? Well, it depends on how fast the U.S. economy expands, compared to the currency difference. What should you do? I can't tell you that because I can't predict the future. What did I do? I bought 25% Canadian stocks, 25% U.S. stocks, 25% world stocks, and 25% Canadian bonds (roughly), back when the Canadian dollar was stronger. What am I doing now? Same thing. I don't know enough about the respective economies to judge. If I had a firm opinion, though, I'd certainly be happy to change my percentages a little. Not a lot, but a little." } ]

[ { "docid": "512365", "title": "", "text": "Here is an article that explains this: http://finance.ninemsn.com.au/pfproperty/investing/8123730/negative-gearing-explained. In essence, it is an investment set up to produce near-term losses for tax purposes by means of borrowing without positive cash flow. The investor hopes that despite operating at a loss, the property will appreciate in the long run (and long-term capital appreciation is typically taxed at a lower rate than current income)." }, { "docid": "249801", "title": "", "text": "agreed. shorting the box kills you on commissions. your negative theta on a straight put position won't be a problem until you're at least 60 days from expiration. (i would even argue you're safe until 30 days out.) plus the positive vega can give you some extra juice if gold does end up falling." }, { "docid": "72530", "title": "", "text": "&gt;It's economics 101, increasing the minimum wage leads to only negative consequences, Got any citations there friend? [Why Does the Minimum Wage Have No Discernible Effect on Employment?](http://www.cepr.net/documents/publications/min-wage-2013-02.pdf) &gt;_Economists have conducted hundreds of studies of the employment impact of the minimum wage. Summarizing those studies is a daunting task, but two recent meta-studies analyzing the research conducted since the early 1990s concludes that the minimum wage has little or no discernible effect on the employment prospects of low-wage workers_ People need to realize that not everyone is capable of middle management in corporate America. There are people who simply do not have the skill set to do it. So they take jobs they are suitable for which happens to be retail. So you're telling me because they don't have a certain skill set that they should be forced to live in shitty, unhealthy conditions because the company they work for is trying to cheap out on the very people who make their company run simply line the pockets of the CEO and shareholders?" }, { "docid": "558670", "title": "", "text": "The idea behind this move is to avoid or mitigate long-term deflationary pressure and to boost the competitiveness of Swiss exporters. This is primarily a Swiss-based initiative that does not appear likely to have a major impact on the broader Eurozone. However, some pressure will be felt by other currencies as investors look to purchase - ie. this is not a great scenario for other countries wanting to keep their currencies weak. In terms of personal wealth - if you hold Swiss f then you are impacted. However, 1.2 is still very strong (most analysts cite 1.3 as more realistic) so there seems little need for a reaction of any kind at the personal level at this time, although diversity - as ever - is good. It should also be noted that changing the peg is a possibility, and that the 1.3 does seem to be the more realistic level. If you hold large amounts of Swiss f then this might cause you to look at your forex holdings. For the man in the street, probably not an issue." }, { "docid": "399590", "title": "", "text": "IMO, QE2 will likely have no perceptible impact in the near term. Keeping all of your savings in a bank guarantees that you will lose money to inflation & taxes. I'd suggest consulting a financial advisor -- preferably someone who understands issues facing someone with assets in the US and Canada. In terms of what portion of your savings should be in USD vs. CAD, that's going to depend on your situation. I'd probably want more assets in the place that I'm living in for the next several years." }, { "docid": "148208", "title": "", "text": "If you buy US stocks when the CAD is high and sell them when the CAD is lower you will make a currency gain on top of any profit or loss from the stock investments. If you buy US stocks when the CAD is low and sell when the CAD is higher any profits from gains from the stock investment will be reduced and any losses will be increased. If you are just starting out you may be better off investing in your own country to avoid any currency risk adding to your stock market risk." }, { "docid": "568313", "title": "", "text": "General advice for novice investors is to have the majority of your holdings be denominated in your home currency as this reduces volatility which can make people squeamish and, related to your second question, prevents all sorts of confusion. A rising CAD actually decreases the value (for you) of your current USD stock. After all, the same amount of USD now buys you less in CAD. An exception to the rule can be made if you would use USD often in your daily life yet your income is CAD. In this case owning stock denominated in USD can form a natural hedge in your life (USD goes up -> your relative income goes down but stock value goes up and visa versa). Keep in mind —as mentioned in the comments— that an US company with a listing in CAD is still going to be affected by price swings of USD." }, { "docid": "499735", "title": "", "text": "\"Wow... where to start... Your ad hominem attack was when you shifted away from the discussion and started questioning me on whether or not I had been around low-skilled workers and even going as far as to give a judgment on if was around average people. The definition is \"\"(of an argument or reaction) directed against a person rather than the position they are maintaining.\"\" You went away from the topic, and instead directed your argument at me, which has nothing to do with my position on minimum wage. You seek to discredit me as to say my views are invalid because, in your opinion, I haven't had enough experience with low skill workers. It doesn't matter if I have or hadn't, one's experience or lack thereof with low skilled workers doesn't make their position any more wrong or right. This is a textbook example of ad hominem. Your straw man was when you shifted the position to suggest things I didn't say in order to argue against them. The definition is \"\"an intentionally misrepresented proposition that is set up because it is easier to defeat than an opponent's real argument.\"\" You say I assumed things I never even mentioned, such as your claim that I would say rich people didn't earn their success and that poor people were not at fault for their low achievement. Once again, no where did I suggest this and this suggestion by you strayed away from my argument on paying people a live-able wage. Basically one could say this was brought up by you to argue about something you felt would be easier to defeat. There were clear reasons I threw those fallacies out. You condescendingly tell me I don't know what I'm talking about, yet you don't even get it right and overlook everything that was stated... smh Your whole response keeps proving my point. Once again, you are so focused on whether I've had experience working with or managing people (nice goal post moving btw), as if that makes your position more qualified (ad hominem again), when the reality is I can have a rational thought about something by reading up on logical and rational positions on this and seeing what the statistics and research say. Oh by the way, I have had multiple economics classes in college, did you? I read up and studied this stuff and aced my tests and papers on it. So now what? Does my collegiate-backed economics understanding now outweigh the fact you just simply hired some low skilled workers? There are many topics out there you and I have no experience with but we can have a well thought out position on them because we talk to experts and read up on the research. Let me restate this again, just because you have more experience with low skill labor does not make you any more qualified over me to have a smart, logical, and rational understanding of the effects of raising the minimum wage. The same with the fact that just because I probably have had more collegiate studies on economics than you, it doesn't mean my position is any more right than yours or someone else's. &gt;You read a study that is incredibly biased and take it to the grave. This gave me a laugh because it's the equivalent of \"\"your arguments don't agree with mine so clearly your's is the biased one.\"\" Dude, we all are biased and stand for things. You are just as biased as me. I don't have to give equal time to every position out there as if both are equal. It's often a false equivalence to do so anyways. For example the idea that \"\"we should not raise minimum wage more because poor people are lazy and undeserving\"\" does not deserve the same consideration as \"\"inflation has caused the purchasing power of workers on the minimum wage to decrease to levels where they cannot afford to live and thus now must seek out tax-payer backed public assistance programs in order to make ends meet, so a solution would be to raise the minimum wage.\"\" Last, your argument against raising the minimum wage comes down to \"\"I don't think they deserve it because some people don't work hard.\"\" And my response is, I don't give a shit. If someone works that job, no matter how low-skilled it is, they deserve to be paid at a level that is live-able. Other than that, it's their fault if they don't do a good job and get fired. Have you ever considered why the minimum wage came about in the first place? It was to keep businesses in check because they were taking advantage of people and paying them poor wages. Wages were so low that some would argue they were technically \"\"slave wages.\"\" Yet as inflation rises and the purchasing power falls, instead of bumping those wages back up, people like you sit there and are like \"\"Nah, they are lazy and don't deserve it. Trust me. I know a guy that's lazy that works those jobs. He's dumb too and doesn't have a high school diploma.\"\" You argument one again is just attacking their character with no consideration of statistical analysis and the economic effect of a change in the minimum wage. Now to step away from the whole argument, you and I have different values. You don't value people at low-skilled levels, as if their job is almost worthless, yet you need them for your business. Sure, you smile and say hello to the guy that brings you your burger or your coffee, but the reality is you mostly don't care about him. In your mind, if he only makes $7.25 then you have the right to assume that he doesn't work hard and is undeserving of proper pay, unless he's proven it in some way to you. Your mindset is a problem because you are okay with stereotyping people, and then you assume whatever negative traits about them that you can as your justification for it. *I don't give a shit about how many houses have been built in Houston or how many painters your friend brought to Seattle. It's completely irrelevant to all of this.\"" }, { "docid": "42625", "title": "", "text": "\"This question drives at what value a shareholder actually provides to a corporation, and by extent, to the economy. If you subscribe for new shares (like in an Initial Public Offering), it is very straightforward to say \"\"I have provided capital to the corporation, which it is using to advance its business.\"\" If you buy shares that already exist (like in a typical share purchase on a public exchange), your money doesn't go to the company. Instead, it goes to someone who paid someone who paid someone who paid someone (etc.) who originally contributed money to the corporation. In theory, the value of a share price does not directly impact the operation of the company itself, apart from what @DanielCarson aptly noted (employee stock options are affected by share price, impacting morale, etc.). This is because in theory, the true value of a company (and thus, the value of a share) is the present value of all future cashflows (dividends + final liquidation). This means that in a technical sense, a company's share price should result from the company's value. The company's true value does not result from the share price. But what you are doing as a shareholder is impacting the liquidity available to other potential investors (also as mentioned by @DanielCarson, in reference to the desirability for future financing). The more people who invest their money in the stock market, the more liquid those stocks become. This is the true value you add to the economy by investing in stocks - you add liquidity to the market, decreasing the risk of capital investment generally. The fewer people there are who are willing to invest in a particular company, the harder it is for an investor to buy or sell shares at will. If it is difficult to sell shares in a company, the risk of holding shares in that company is higher, because you can't \"\"cash out\"\" as easily. This increased risk then does change the value of the shares - because even though the corporation's internal value is the same, the projected cashflows of the shares themselves now has a question mark around the ability to sell when desired. Whether this actually has an impact on anything depends on how many people join you in your declaration of ethical investing. Like many other forms of social activism, success relies on joint effort. This goes beyond the direct and indirect impacts mentioned above; if 'ethical investing' becomes more pronounced, it may begin to stigmatize the target companies (fewer people wanting to work for 'blacklist' corporations, fewer people buying their products, etc.).\"" }, { "docid": "389750", "title": "", "text": "I'm a bond trader and we stayed away from this Tesla deal. Tesla is cash flow negative which is a terrible sign for a bond investor and is still relatively young and changing constantly. When assessing fixed income investments you want steady predictable cash flows and positive credit metrics. Tesla has none of that despite the run up in the stock. Even after taking all of these things into consideration the yields aren't even very high reflecting a compression in the amount of spread to treasuries investors are asking for taking on the risk in this kind of name. It speaks to an overvalued high yield market in general. Ford on the other hand is a mature business with much more favorable credit metrics (debt interest coverage, consistent management, a credit history of borrowing and repaying their loans, etc.). All of these things are reflected in the yield that investors require when buying bonds." }, { "docid": "18436", "title": "", "text": "Dollar cost averaging is an great way to diversify your investment risk. There's mainly 2 things you want to achieve when you're saving for retirement: 1) Keep your principal investment; 2) Grow it. The best methods recommended by most financial institutions are as follows: 1) Diversification; 2) Re-balance. There are a lot of additional recommendations, but these are my main take away. When you dollar cost average, you're essentially diversifying your exchange risk between the value of the funds you're investing. Including the ups and downs of the value of the underlying asset, may actually be re-balancing. Picking your asset portfolio: 1) You generally want to include within your 401k or any other invest, classes of investments that do not always move in total correlation as this allows you to diversify risk; 2) I'm making a lot of assumptions here - since you may have already picked your asset classes. Consider utilizing the following to tell you when to buy or sell your underlying investment: 1) Google re-balance excel sheet to find several examples of re-balance tools to help you always buy low and sell high; 2) Enter your portfolio investment; 3) Utilize the movement to invest in the underlying assets based on market movement; and 4) Execute in an emotionless way and stick to your plan. Example - Facts 1) I have 1 CAD and 1 USD in my 401k. Plan I will invest 1 dollar in the ratio of 50/50 - forever. Let's start in 2011 since we were closer to par: 2010 - 1 CAD (value 1 USD) and 1 USD (value 1 USD) = 50/50 ratio 2011 start - 1 CAD ( value .8 USD) and 1 USD (value 1 USD) = 40/60 ratio 2011 - rebalance - invest 1 USD as follows purchase .75 CAD (.60 USD) and purchase .40 USD = total of 1 USD reinvested 2011 end - 1.75 CAD (value 1.4USD) and 1.4 USD (value 1.4 USD) - 50/50 ratio As long as the fundamentals of your underlying assets (i.e. you're not expecting hyperinflation or your asset to approach 0), this approach will always build value over time since you're always buying low and selling high while dollar averaging. Keep in mind it does reduce your potential gains - but if you're looking to max gain, it may mean you're also max potential loss - unless you're able to find A symmetrical investments. I hope this helps." }, { "docid": "128676", "title": "", "text": "EFA must be bought and sold in US dollars. XIN allows people to buy and sell EFA in Canadian dollars without exposing their investment to unpredictable swings in the USD/CAD ratio. This is what's known as a currency-hedged instrument. Now, why the chart sums up to over 100% is anyone's guess. Presumably it's the result of a couple hundred rounding errors from all the components. If you view their most recent report, it also sums up to over 100%, but at least the EFA component is (sensibly) under 100%. P.S. I'm not seeing where it says there's only one holding. There's the primary holding, plus over 100 other cash holdings to effect the currency-hedging." }, { "docid": "464449", "title": "", "text": "If you can make the trip to BC yourself, I'd recommend opening an account with TD Canada Trust. They allow non-citizens to make accounts — apparently the only Canadian bank to do so. The customer service is great and they have a good online banking site that will allow you to manage it from the US. If you have an account with TD Bank in the US, it's also very easy to set up a TD Canada account through them that will be linked on their online site (though you will still have separate logins for both and manage them separately). I've done the reverse as a Canadian living in the US. You can set it up over the phone; their Cross-Border Banking number is listed here. They also offer better currency conversion rates than their standard ones when you do a cross-border transfer. You could also look into HSBC as well. They operate in Washington as well as across the border in BC. If you can't open a CAD account locally, they can help you open and manage one in Canada from the US. It may or may not require having a small business account instead of a personal account." }, { "docid": "456616", "title": "", "text": "Rapid prototyping is a group of techniques used to quickly fabricate a scale model of a physical part or assembly using three-dimensional computer aided design (CAD) data. http://rpgroupltd.com/rapid-prototyping/ provide the flexibility to order production in low quantities using processes such as CNC machining, vacuum casting with silicone moulds and low volume injection moulds until they are ready for higher volume options." }, { "docid": "115134", "title": "", "text": "How I understand it is: supply/demand affect price of stock negatively/positively, respectively. Correct. Volume is the amount of buying/selling activity in these stocks (more volume = more fluctuation, right?). Sort of. Higher volume means higher liquidity. That is, a stock that is traded more is easier to trade. It doesn't necessarily mean more fluctuation and in the real world, it often means that these are well-understood stocks with a high amount of analyst coverage. This tends towards these stocks not being as volatile as smaller stocks with less liquidity. Company revenue (and profit) will help an investor predict company growth. That is one factor in a stock price. There are certain stocks that you would buy without them making a profit because their future revenue looks potentially explosive. However, these stocks are very risky and are bubble-prone. If you're starting out in the share market, it's generally a good idea to invest in index funds (I am not a broker, my advice should not be taken as financial advice). These funds aggregate risk by holding a lot of different companies. Also, statistics have shown that over time, buying and holding index funds long term tends to dramatically outperform other investment strategies, particularly for people with low amounts of capital." }, { "docid": "293027", "title": "", "text": "What is your investment goal? Many investors buy for the long haul, not short-term gain. If you're looking for long-term gain then daily fluctuations should be of no concern to you. If you want to day-trade and time the market (buy low and sell high with a short holding period) then yes less volatile stock can be less profitable, but they also carry less risk. In that case, though, transaction fees have more of an impact, and you usually have to trade in larger quantities to reduce the impact of transaction fees." }, { "docid": "587508", "title": "", "text": "Right, I understand minority interest but it is typically reported as a positive under liabilities instead of a negative. For example, when you are calculating the enterprise value of a company, you add back in the minority interest. Enterprise Value= Market Share +Pref Equity + Min Interest+ Total Debt - Cash and ST Equivalents. EV is used to quantify the total price of a company's worth. If you have negative Min Interest on your books, that will make your EV less than it should be, creating an incorrect valuation. This just doesn't make any sense to me. Does it mean that the subsidiary that they had a stake in had a negative earning?" }, { "docid": "179527", "title": "", "text": "If S&P crashes, these currencies will appreciate. Note that the above is speculation, not fact. There is definitely no guarantee that, say, the CHF/CAD currency pair is inversely linked to the performance of the US stock market when measured in USD, let alone to the performance of the US stock market as measured in CAD. How can a Canadian get exposure to a safe haven currency like CHF and JPY? I don't want a U.S. dollar denominated ETF. Three simple options come to mind, if you still want to pursue that: Have money in your bank account. Go to your bank, tell them that you want to buy some Swiss francs or Japanese yen. Walk out with a physical wad of cash. Put said wad of cash somewhere safe until needed. It is possible that the bank will tell you to come back later as they might not have the physical cash available at the branch office, but this isn't anything really unusual; it is often highly recommended for people who travel abroad to have some local cash on hand. Contact your bank and tell them that you want to open an account denominated in the foreign currency of your choice. They might ask some questions about why, there might be additional fees associated with it, and you'll probably have to pay an exchange fee when transferring money between it and your local-currency-denominated accounts, but lots of banks offer this service as a service for those of their customers that have lots of foreign currency transactions. If yours doesn't, then shop around. Shop around for money market funds that focus heavily or exclusively on the currency area you are interested in. Look for funds that have a native currency value appreciation as close as possible to 0%. Any value change that you see will then be tied directly to the exchange rate development of the relevant currency pair (for example, CHF/CAD). #1 and #3 are accessible to virtually anyone, no large sums of money needed (in principle). Fees involved in #2 may or may not make it a practical option for someone handling small amounts of money, but I can see no reason why it shouldn't be a possibility again in principle." }, { "docid": "23489", "title": "", "text": "Well like a lot of stuff on money.stackexchange there is not a simple answer, but generally it is not a good thing. Take a look at the wikipedia entry on Net Operating Loss. Basically the company is commenting that when they do make money they will receive preferential tax treatment on that income. So whether or not this is a positive or a negative depends on a couple of things: NOL doesn't directly impact book value other than how the actual assets of the company changed over the previous quarter. I believe there is a 1:1 correspondence to how the assets change and NOL, but I am sure someone could clarify that for me in another answer or as a comment." } ]

[ { "docid": "213373", "title": "", "text": "When you want to invest in an asset denominated by a foreign currency, your investment is going to have some currency risk to it. You need to worry not just about what happens to your own currency, but also the foreign currency. Lets say you want to invest $10000 in US Stocks as a Canadian. Today that will cost you $13252, since USDCAD just hit 1.3252. You now have two ways you can make money. One is if USDCAD goes up, two is if the stocks go up. The former may not be obvious, but remember, you are holding US denominated assets currently, with the intention of one day converting those assets back into CAD. Essentially, you are long USDCAD (long USD short CAD). Since you are short CAD, if CAD goes up it hurts you It may seem odd to think about this as a currency trade, but it opens up a possibility. If you want a foreign investment to be currency neutral, you just make the opposite currency trade, in addition to your original investment. So in this case, you would buy $10,000 in US stocks, and then short USDCAD (ie long CAD, short USD $10,000). This is kind of savvy and may not be something you would do. But its worth mentioning. And there are also some currency hedged ETFs out there that do this for you http://www.ishares.com/us/strategies/hedge-currency-impact However most are hedged relative to USD, and are meant to hedge the target countries currency, not your own." } ]

[ { "docid": "115134", "title": "", "text": "How I understand it is: supply/demand affect price of stock negatively/positively, respectively. Correct. Volume is the amount of buying/selling activity in these stocks (more volume = more fluctuation, right?). Sort of. Higher volume means higher liquidity. That is, a stock that is traded more is easier to trade. It doesn't necessarily mean more fluctuation and in the real world, it often means that these are well-understood stocks with a high amount of analyst coverage. This tends towards these stocks not being as volatile as smaller stocks with less liquidity. Company revenue (and profit) will help an investor predict company growth. That is one factor in a stock price. There are certain stocks that you would buy without them making a profit because their future revenue looks potentially explosive. However, these stocks are very risky and are bubble-prone. If you're starting out in the share market, it's generally a good idea to invest in index funds (I am not a broker, my advice should not be taken as financial advice). These funds aggregate risk by holding a lot of different companies. Also, statistics have shown that over time, buying and holding index funds long term tends to dramatically outperform other investment strategies, particularly for people with low amounts of capital." }, { "docid": "464449", "title": "", "text": "If you can make the trip to BC yourself, I'd recommend opening an account with TD Canada Trust. They allow non-citizens to make accounts — apparently the only Canadian bank to do so. The customer service is great and they have a good online banking site that will allow you to manage it from the US. If you have an account with TD Bank in the US, it's also very easy to set up a TD Canada account through them that will be linked on their online site (though you will still have separate logins for both and manage them separately). I've done the reverse as a Canadian living in the US. You can set it up over the phone; their Cross-Border Banking number is listed here. They also offer better currency conversion rates than their standard ones when you do a cross-border transfer. You could also look into HSBC as well. They operate in Washington as well as across the border in BC. If you can't open a CAD account locally, they can help you open and manage one in Canada from the US. It may or may not require having a small business account instead of a personal account." }, { "docid": "204167", "title": "", "text": "If you aren't familiar with Norbert's Gambit, it's worth looking at. This is a mechanism using a Canadian brokerage account to simultaneously execute one stock trade in CAD and one in USD. The link I provided claims that it only starts potentially making sense somewhere in the 10,000+ range." }, { "docid": "214542", "title": "", "text": "\"Even though \"\"when the U.S. sneezes Canada catches a cold\"\", I would suggest considering a look at Canadian government bonds as both a currency hedge, and for the safety of principal — of course, in terms of CAD, not USD. We like to boast that Canada fared relatively better (PDF) during the economic crisis than many other advanced economies, and our government debt is often rated higher than U.S. government debt. That being said, as a Canadian, I am biased. For what it's worth, here's the more general strategy: Recognize that you will be accepting some currency risk (in addition to the sovereign risks) in such an approach. Consistent with your ETF approach, there do exist a class of \"\"international treasury bond\"\" ETFs, holding short-term foreign government bonds, but their holdings won't necessarily match the criteria I laid out – although they'll have wider diversification than if you invested in specific countries separately.\"" }, { "docid": "456616", "title": "", "text": "Rapid prototyping is a group of techniques used to quickly fabricate a scale model of a physical part or assembly using three-dimensional computer aided design (CAD) data. http://rpgroupltd.com/rapid-prototyping/ provide the flexibility to order production in low quantities using processes such as CNC machining, vacuum casting with silicone moulds and low volume injection moulds until they are ready for higher volume options." }, { "docid": "42475", "title": "", "text": "\"The interest rate offered by a bond is called the nominal interest rate. The so-called real interest rate is the nominal interest rate minus the rate of inflation. If inflation is equal to or greater than the nominal rate at any given time, the REAL interest rate is zero or negative. We're talking about a ten year bond. It's possible for the real interest rate to be negative for one or two years of the bond's life, and positive for eight or nine. On the other hand, if we have a period of rising inflation, as in the 1970s, the inflation rate will exceed the (original) interest rate in most years, meaning that the real interest rate on the ten year bond will be negative over its whole life. People lost \"\"serious\"\" money on bonds (and loans) in the 1970s. In such situations, the BORROWERS make out. That is, they borrow money at low rates, earn inflation (plus a little more) pay back inflated dollars, and pocket the difference. For them, the money is \"\"free.\"\"\"" }, { "docid": "464871", "title": "", "text": "Is that even legal to pull out of a deal like that? I'd assume they'd have made an agreement (between the underwriter and the buyer) during the roadshow. This event I would think has large negative impacts on the firm. It delays their IPO, (provided that they try again) and it makes investors wary of reinvesting in their second IPO (oxymoron.. haha). Furthermore, if the biotech firm decides to openly publish the details of this deal (which i assume they'd have to if they want to have a chance at having a successful IPO) someone is going to be labeled as having dealt in bad faith. I understand that underwriters mostly operate on a best-efforts basis, but I don't think they can come out of this deal without facing some consequences." }, { "docid": "500769", "title": "", "text": "\"Pros for WHOM? Cons for WHOM? Whether the Federal Reserve is good or not really depends on WHO you are (i.e. where in the \"\"inflate/debase the money supply\"\" you are positioned, and how that affects your position in the debt/asset game). Because the impacts of just about everything the Fed (or any central bank or government/cartel manipulated \"\"fiat\"\" money supply) does... affect you significantly different depending on where you are in regards to those things.\"" }, { "docid": "544781", "title": "", "text": "The old underwriting standards were 28% home debt to income ratio and 33% consumer debt to income ratio. Consumer debt is calculated based on minimum payments. Now, most models are revised upwards... I believe 33/38 is more common today. As long as you are current on the accounts, closing credit or store revolving accounts will have little or no bearing. Just leave them dormant... there is no positive result from closing accounts that have no balance. Having low or no balances has NO negative impact on your credit score. Low balances are NOT red flags to lenders. Period. Here's a quote from Fair Issac: It's just not true that you can have too much available credit. That by itself is never a negative with the score. Sometimes the things you do to get too much can be a problem, such as opening a bunch of new accounts, but for the most part, that's just kind of an old wives' tale. The major drivers of credit scoring are: To improve your prospects for getting a mortgage, you should be reducing your spending and focusing 60/40 on saving for a down payment and paying down that $15k credit card, respectively. Having cash for a down payment is critical to your buying power, as zero-down loans aren't widely available in 2011, and a large downpayment will allow you to eliminate or reduce the time you are paying PMI. PMI reduces your buying power, and is a big waste of money." }, { "docid": "396658", "title": "", "text": "\"I've said it before here on Reddit, and I'll say it again: How does HFT affect an investor looking to buy XYZ at $10 and hold for six months to sell at $12? The answer: It doesn't. HFT is just the new exchange \"\"floor.\"\" There have always been professionals on the floors of the exchanges who could compete with one another for single ticks. And then, just as now, they had little to no impact on long-term investors. Reading through the comments of the article makes it abundantly clear that there is a shocking lack of knowledge of HFT practices and impact on the markets.\"" }, { "docid": "580757", "title": "", "text": "If you do not understand the volatility of the fx market, you need to stop trading it, immediately. There are many reasons that fx is riskier than other types of investing, and you bear those risks whether you understand them or not. Below are a number of reasons why fx trading has high levels of risk: 1) FX trades on the relative exchange rate between currencies. That means it is a zero-sum game. Over time, the global fx market cannot 'grow'. If the US economy doubles in size, and the European economy doubles in size, then the exchange rate between the USD and the EUR will be the same as it is today (in an extreme example, all else being equal, yes I know that value of currency /= value of total economy, but the general point stands). Compare that with the stock market - if the US economy doubles in size, then effectively the value of your stock investments will double in size. That means that stocks, bonds, etc. tied to real world economies generally increase when the global economy increases - it is a positive sum game, where many players can be winners. On the long term, on average, most people earn value, without needing to get into 'timing' of trades. This allows many people to consider long-term equity investing to be lower risk than 'day-trading'. With FX, because the value of a currency is in its relative position compared with another currency, 1 player is a winner, 1 player is a loser. By this token, most fx trading is necessarily short-term 'day-trading', which by itself carries inherent risk. 2) Fx markets are insanely efficient (I will lightly state that this is my opinion, but one that I am not alone in holding firmly). This means that public information about a currency [ie: economic news, political news, etc.] is nearly immediately acted upon by many, many people, so that the revised fx price of that currency will quickly adjust. The more efficient a market is, the harder it is to 'time a trade'. As an example, if you see on a news feed that the head of a central bank authority made an announcement about interest rates in that country [a common driver of fx prices], you have only moments to make a trade before the large institutional investors already factor it into their bid/ask prices. Keep in mind that the large fx players are dealing with millions and billions of dollars; markets can move very quickly because of this. Note that some currencies trade more frequently than others. The main currency 'pairs' are typically between USD and / or other G10 country-currencies [JPY, EUR, etc.]. As you get into currencies of smaller countries, trading of those currencies happens less frequently. This means that there may be some additional time before public information is 'priced in' to the market value of that currency, making that currency 'less efficient'. On the flip side, if something is infrequently traded, pricing can be more volatile, as a few relatively smaller trades can have a big impact on the market. 3) Uncertainty of political news. If you make an fx trade based on what you believe will happen after an expected political event, you are taking risk that the event actually happens. Politics and world events can be very hard to predict, and there is a high element of chance involved [see recent 'expected' election results across the world for evidence of this]. For something like the stock market, a particular industry may get hit every once in a while with unexpected news, but the fx market is inherently tied to politics in a way that may impact exchange rates multiple times a day. 4) Leveraging. It is very common for fx traders to borrow money to invest in fx. This creates additional risk because it amplifies the impact of your (positive or negative) returns. This applies to other investments as well, but I mention it because high degrees of debt leveraging is extremely common in FX. To answer your direct question: There are no single individual traders who spike fx prices - that is the impact you see of a very efficient market, with large value traders, reacting to frequent, surprising news. I reiterate: If you do not understand the risks associated with fx trade, I recommend that you stop this activity immediately, at least until you understand it better [and I would recommend personally that any amateur investor never get involved in fx at all, regardless of how informed you believe you are]." }, { "docid": "499735", "title": "", "text": "\"Wow... where to start... Your ad hominem attack was when you shifted away from the discussion and started questioning me on whether or not I had been around low-skilled workers and even going as far as to give a judgment on if was around average people. The definition is \"\"(of an argument or reaction) directed against a person rather than the position they are maintaining.\"\" You went away from the topic, and instead directed your argument at me, which has nothing to do with my position on minimum wage. You seek to discredit me as to say my views are invalid because, in your opinion, I haven't had enough experience with low skill workers. It doesn't matter if I have or hadn't, one's experience or lack thereof with low skilled workers doesn't make their position any more wrong or right. This is a textbook example of ad hominem. Your straw man was when you shifted the position to suggest things I didn't say in order to argue against them. The definition is \"\"an intentionally misrepresented proposition that is set up because it is easier to defeat than an opponent's real argument.\"\" You say I assumed things I never even mentioned, such as your claim that I would say rich people didn't earn their success and that poor people were not at fault for their low achievement. Once again, no where did I suggest this and this suggestion by you strayed away from my argument on paying people a live-able wage. Basically one could say this was brought up by you to argue about something you felt would be easier to defeat. There were clear reasons I threw those fallacies out. You condescendingly tell me I don't know what I'm talking about, yet you don't even get it right and overlook everything that was stated... smh Your whole response keeps proving my point. Once again, you are so focused on whether I've had experience working with or managing people (nice goal post moving btw), as if that makes your position more qualified (ad hominem again), when the reality is I can have a rational thought about something by reading up on logical and rational positions on this and seeing what the statistics and research say. Oh by the way, I have had multiple economics classes in college, did you? I read up and studied this stuff and aced my tests and papers on it. So now what? Does my collegiate-backed economics understanding now outweigh the fact you just simply hired some low skilled workers? There are many topics out there you and I have no experience with but we can have a well thought out position on them because we talk to experts and read up on the research. Let me restate this again, just because you have more experience with low skill labor does not make you any more qualified over me to have a smart, logical, and rational understanding of the effects of raising the minimum wage. The same with the fact that just because I probably have had more collegiate studies on economics than you, it doesn't mean my position is any more right than yours or someone else's. &gt;You read a study that is incredibly biased and take it to the grave. This gave me a laugh because it's the equivalent of \"\"your arguments don't agree with mine so clearly your's is the biased one.\"\" Dude, we all are biased and stand for things. You are just as biased as me. I don't have to give equal time to every position out there as if both are equal. It's often a false equivalence to do so anyways. For example the idea that \"\"we should not raise minimum wage more because poor people are lazy and undeserving\"\" does not deserve the same consideration as \"\"inflation has caused the purchasing power of workers on the minimum wage to decrease to levels where they cannot afford to live and thus now must seek out tax-payer backed public assistance programs in order to make ends meet, so a solution would be to raise the minimum wage.\"\" Last, your argument against raising the minimum wage comes down to \"\"I don't think they deserve it because some people don't work hard.\"\" And my response is, I don't give a shit. If someone works that job, no matter how low-skilled it is, they deserve to be paid at a level that is live-able. Other than that, it's their fault if they don't do a good job and get fired. Have you ever considered why the minimum wage came about in the first place? It was to keep businesses in check because they were taking advantage of people and paying them poor wages. Wages were so low that some would argue they were technically \"\"slave wages.\"\" Yet as inflation rises and the purchasing power falls, instead of bumping those wages back up, people like you sit there and are like \"\"Nah, they are lazy and don't deserve it. Trust me. I know a guy that's lazy that works those jobs. He's dumb too and doesn't have a high school diploma.\"\" You argument one again is just attacking their character with no consideration of statistical analysis and the economic effect of a change in the minimum wage. Now to step away from the whole argument, you and I have different values. You don't value people at low-skilled levels, as if their job is almost worthless, yet you need them for your business. Sure, you smile and say hello to the guy that brings you your burger or your coffee, but the reality is you mostly don't care about him. In your mind, if he only makes $7.25 then you have the right to assume that he doesn't work hard and is undeserving of proper pay, unless he's proven it in some way to you. Your mindset is a problem because you are okay with stereotyping people, and then you assume whatever negative traits about them that you can as your justification for it. *I don't give a shit about how many houses have been built in Houston or how many painters your friend brought to Seattle. It's completely irrelevant to all of this.\"" }, { "docid": "573754", "title": "", "text": "\"As a former consumer credit counselor, who worked with struggling homeowners and first time homebuyers I would argue that it is a mistake for lenders to rely on gross income and assumptions on what an applicant spends their income on. I think lenders do this because they believe it is efficient and may not understand the long term ramifications for the stakeholders, e.g. the borrower, the lender, the servicer, the investor, the broker, the taxpayer, the marshall, the foreclosure lawyers etc. Or lenders do know the impact of a superficial mortgage screening, and intentionally want to enrich themselves in the short term while harming other stakeholders in the long term. Developing a budget that reflects what a person can realistically spend on their mortgage takes much longer than signing up for a Rocket mortgage. I would say an hour minimum for the first appointment to get a baseline, and at least two follow up appointments to make adustments soon after or whenever a borrower's financial situation changes dramatically. Credit counselors factor in all of the factors mentioned above, i.e. take home pay, future pay vs current pay, the ability to adjust deductions, seasonal expenses, multiple sources of income and their frequency, debt load etc. Budgets are always fluctuating, but when it is done right by a qualified professional the result is a much more accurate financial picture. The consequences for not doing this type of old-school due diligence, or for willfully choosing to skip it, are varied. First off, mortgages will be given to homeowners who should never have qualified in the first place, and likewise denied to homeowners who should qualify. This will result in market distortion and this distortion was a primary contributor to the 2008 subprime mortgage crisis and the wave of foreclosures that came with it. Another consequence is the stripping of wealth from minority communities since they are often targeted by the most unscrupulous of lenders. Additionally, the securitization of mortgages based on poor diligence at the loan officer level means loan portfolio ratings are questionable, investors will lose money, and small banks who are heavily invested will fail as they did in the past. Depending on the federal enforcement of Dodd Frank Act, the taxpayers may or may not have to pick up the bill from a bailout of a big mortgage bank that was \"\"too big to fail,\"\" via higher taxes, lost jobs, lost homes, and other negative externalities that were not accounted for by the loan officer, or willfully ignored. Lastly, borrowers also have a responsibility to provide accurate financial information, which they don't always do. Unfortunately, in a capitalistic society where property is commoditized instead of communal, there is always mistrust, competition, the fear that you will be left behind, or the desire to get ahead. This could incentivize cheating by either the, borrower, the broker/lender, or both in this example e.g. no-doc negative amatorizing loans. This is just one of many other negative externalities. So the only true fix would be a switch to communal land ownership. In the interim, I would push for universal borrower access to low cost consumer credit counselors and a change in loan officer training and incentive structure.\"" }, { "docid": "262925", "title": "", "text": "\"It is important to first understand that true causation of share price may not relate to historical correlation. Just like with scientific experiments, correlation does not imply causation. But we use stock price correlation to attempt to infer causation, where it is reasonable to do so. And to do that you need to understand that prices change for many reasons; some company specific, some industry specific, some market specific. Companies in the same industry may correlate when that industry goes up or down; companies with the same market may correlate when that market goes up or down. In general, in most industries, it is reasonable to assume that competitor companies have stocks which strongly correlate (positively) with each-other to the extent that they do the same thing. For a simple example, consider three resource companies: \"\"Oil Ltd.\"\" [100% of its assets relate to Oil]; \"\"Oil and Iron Inc.\"\" [50% of its value relates to Oil, 50% to Iron]; and \"\"Iron and Copper Ltd.\"\" [50% of its value relates to Iron, 50% to Copper]. For each of these companies, there are many things which affect value, but one could naively simplify things by saying \"\"value of a resource company is defined by the expected future volume of goods mined/drilled * the expected resource price, less all fixed and variable costs\"\". So, one major thing that impacts resource companies is simply the current & projected price of those resources. This means that if the price of Oil goes up or down, it will partially affect the value of the two Oil companies above - but how much it affects each company will depend on the volume of Oil it drills, and the timeline that it expects to get that Oil. For example, maybe Oil and Iron Ltd. has no currently producing Oil rigs, but it has just made massive investments which expect to drill Oil in 2 years - and the market expects Oil prices to return to a high value in 2 years. In that case, a drop in Oil would impact Oil Inc. severely, but perhaps it wouldn't impact Oil and Iron Ltd. as much. In this case, for the particular share price movement related to the price of Oil, the two companies would not be correlated. Iron and Copper Ltd. would be unaffected by the price of Oil [this is a simplification; Oil prices impact many areas of the economy], and therefore there would be no correlation at all between this company's shares. It is also likely that competitors face similar markets. If consumer spending goes down, then perhaps the stock of most consumer product companies would go down as well. There would be outliers, because specific companies may still succeed in a falling market, but in generally, there would be a lot of correlation between two companies with the same market. In the case that you list, Sony vs Samsung, there would be some factors that correlate positively, and some that correlate negatively. A clean example would be Blackberry stock vs Apple stock - because Apple's success had specifically negative ramifications for Blackberry. And yet, other tech company competitors also succeeded in the same time period, meaning they did not correlate negatively with Apple.\"" }, { "docid": "220720", "title": "", "text": "Keep in mind there are a couple of points to ponder here: Rates are really low. With rates being so low, unless there is deflation, it is pretty easy to see even moderate inflation of 1-2% being enough to eat the yield completely which would be why the returns are negative. Inflation is still relatively contained. With inflation low, there is no reason for the central banks to raise rates which would give new bonds a better rate. Thus, this changes in CPI are still in the range where central banks want to be stimulative with their policy which means rates are low which if lower than inflation rates would give a negative real return which would be seen as a way to trigger more spending since putting the money into treasury debt will lose money to inflation in terms of purchasing power. A good question to ponder is has this happened before in the history of the world and what could we learn from that point in time. The idea for investors would be to find alternative holdings for their cash and bonds if they want to beat inflation though there are some inflation-indexed bonds that aren't likely appearing in the chart that could also be something to add to the picture here." }, { "docid": "203926", "title": "", "text": "I haven't read the terms here but the question may not have a good answer. That won't stop me from trying. Call the real rate (interest rate - inflation) and you'll have what is called negative real rates. It's rare for the overnight real rate to be negative. If you check the same sources for historical data you'll find it's usually higher. This is because borrowing money is usually done to gain an economic benefit, ie. make a profit. That is no longer a consideration when borrowing money short term and is IMO a serious problem. This will cause poor investment decisions like you see in housing. Notice I said overnight rate. That is the only rate set by the BoC and the longer rates are set by the market. The central bank has some influence because a longer term is just a series of shorter terms but if you looked up the rate on long Canadian real return bonds, you'd see them with a real rate around 1%. What happens when the central bank raise or lowers rates will depend on the circumstances. The rate in India is so high because they are using it to defend the rupee. If people earn more interest they have a preference to buy that currency rather than others. However these people aren't stupid, they realize it's the real rate that matters. That's why Japan can get away with very low rates and still have demand for the currency - they have, or had, deflation. When that changed, the preference for their currency changed. So if Canada hast forex driven inflation then the BoC will have to raise rates to defend the dollar for the purpose of lowering inflation from imports. Whether it works or not is another story. Note that the Canadian dollar is very dependant on the total dollar value of net oil exports. If Canada has inflation due too an accelerating economy this implies that there are profitable opportunities so businesses and individuals will be more likely to pay a positive real rate of interest. In that scenario the demand for credit money will drive the real rate of return." }, { "docid": "587508", "title": "", "text": "Right, I understand minority interest but it is typically reported as a positive under liabilities instead of a negative. For example, when you are calculating the enterprise value of a company, you add back in the minority interest. Enterprise Value= Market Share +Pref Equity + Min Interest+ Total Debt - Cash and ST Equivalents. EV is used to quantify the total price of a company's worth. If you have negative Min Interest on your books, that will make your EV less than it should be, creating an incorrect valuation. This just doesn't make any sense to me. Does it mean that the subsidiary that they had a stake in had a negative earning?" }, { "docid": "559363", "title": "", "text": "I've spent enough time researching this question where I feel comfortable enough providing an answer. I'll start with the high level fundamentals and work my way down to the specific question that I had. So point #5 is really the starting point for my answer. We want to find companies that are investing their money. A good company should be reinvesting most of its excess assets so that it can make more money off of them. If a company has too much working capital, then it is not being efficiently reinvested. That explains why excess working capital can have a negative impact on Return on Capital. But what about the fact that current liabilities in excess of current assets has a positive impact on the Return on Capital calculation? That is a problem, period. If current liabilities exceed current assets then the company may have a hard time meeting their short term financial obligations. This could mean borrowing more money, or it could mean something worse - like bankruptcy. If the company borrows money, then it will have to repay it in the future at higher costs. This approach could be fine if the company can invest money at a rate of return exceeding the cost of their debt, but to favor debt in the Return on Capital calculation is wrong. That scenario would skew the metric. The company has to overcome this debt. Anyways, this is my understanding, as the amateur investor. My credibility is not even comparable to Greenblatt's credibility, so I have no business calling any part of his calculation wrong. But, in defense of my explanation, Greenblatt doesn't get into these gritty details so I don't know that he allowed current liabilities in excess of current assets to have a positive impact on his Return on Capital calculation." }, { "docid": "235170", "title": "", "text": "I can see the point of it but you also have to remember what kind of people are working here to begin with, they are often people with a high school education or equivalent with no additional training or education. That doesn't leave a lot of jobs open and pretty much regardless of where they work the market wage is going to be low because they are extremely interchangeable. That is to say this is the working poor, the people that the government targets quite a bit so they'll have a negative external impact on the rest of the economy as a whole. So while it does cost you money per year really the more important question is if these people were employed elsewhere, or not employed, what would the cost be and if there is any difference to where the government is paying more then they should be taxed by that amount to pay for the externality." } ]

[ { "docid": "487778", "title": "", "text": "You report it as an expense against the 1099 income when you do your taxes. You will only be taxed on the amount after the lawyers fees (but if it cost you more in lawyers fees than you recover in damages, the loss is not deductible). Be sure to keep documentation of the lawyers bill and the contract. Compensatory damages are generally not taxable at all. You can see here for more information on that." } ]

[ { "docid": "543312", "title": "", "text": "\"Option pricing models used by exchanges to calculate settlement prices (premiums) use a volatility measure usually describes as the current actual volatility. This is a historic volatility measure based on standard deviation across a given time period - usually 30 to 90 days. During a trading session, an investor can use the readily available information for a given option to infer the \"\"implied volatility\"\". Presumably you know the option pricing model (Black-Scholes). It is easy to calculate the other variables used in the pricing model - the time value, the strike price, the spot price, the \"\"risk free\"\" interest rate, and anything else I may have forgotten right now. Plug all of these into the model and solve for volatility. This give the \"\"implied volatility\"\", so named because it has been inferred from the current price (bid or offer). Of course, there is no guarantee that the calculated (implied) volatility will match the volatility used by the exchange in their calculation of fair price at settlement on the day (or on the previous day's settlement). Comparing the implied volatility from the previous day's settlement price to the implied volatility of the current price (bid or offer) may give you some measure of the fairness of the quoted price (if there is no perceived change in future volatility). What such a comparison will do is to give you a measure of the degree to which the current market's perception of future volatility has changed over the course of the trading day. So, specific to your question, you do not want to use an annualised measure. The best you can do is compare the implied volatility in the current price to the implied volatility of the previous day's settlement price while at the same time making a subjective judgement about how you see volatility changing in the future and how this has been reflected in the current price.\"" }, { "docid": "232329", "title": "", "text": "If your sister paid rent, she was a tenant. There are laws to protect tenants, but those depend on what country, state, and city you live in. In most places in the US (maybe all), she was owed more than 2 days notice. Normally, the local housing authority could help her figure out what her rights are, but since this already happened, they may not be able to do much (depends on the local laws). It's worth asking them anyway. I don't know how partial ownership of the property would affect things if your sister was a partial owner. If the 30 year old will was the most recent document, then that's how the estate will be distributed. There are no laws in the US requiring a will to be fair. An executor's role is to carry out the will. Being an executor does not mean one can choose to unilaterally sell the property in the estate without permission of other heirs. You'll need to speak with a lawyer if you think they're breaking the will by selling property that you have partial ownership of. But since the sale is already done, reversing it would be slow and probably very expensive in legal fees. If it's a small estate, you'll have to judge whether a lawyer is worth the money and the family's animosity. Also, if the estate had debt, debt must be paid before property is distributed to the heirs, so that could also change what your sisters had to do. I'd suggest first asking your sisters to tell you about what they've done to execute the will, and what they do in the future." }, { "docid": "451320", "title": "", "text": "More than likely you have signed an NDA with your employer with a non-compete clause within it. From what I have seen this clause would be in place for two years following the date you left your firm. So, leaving your firm and consulting as a 1099 for your current client is more than likely a violation of your NDA for 2 years or some period of time. With that being said, there is nothing keeping you from going off on your own as an independent and finding work, so long as that work isn't from one of the current clients of your firm. I am not a lawyer and everything above is what I have seen in my personal experience." }, { "docid": "348377", "title": "", "text": "If this is a practical, rather than hypothetical, question, the best advice that we could give would be to see a lawyer. If you think your teenager has done something illegal, get a lawyer. The lawyer will then take care of notifying the relevant parties and manage the accusations. In most cases, it would be sufficient to notify the police directly. They understand the concept of scams, and many of them have teenagers of their own. Most of the time, they will try to work with you rather than against you. But if you are really worried about it, this is what lawyers do. A lawyer can separate the teenager and the police, so the teenager makes no admissions. But the lawyer can get the necessary information to the police so that neither the teenager nor you is subject to an obstruction of justice charge. We can help you by pointing to resources or suggesting ways to document what has happened or is happening. Or just point out that something is a scam. But if you are worrying about prosecution, we can't really help you. You can't confide the relevant details to us. There is no asker/answerer confidentiality. Everything is published on the internet with archives. Without those relevant details, how good will our advice be? Talk to a lawyer. The lawyer can tell you what you can and cannot do. And what you tell the lawyer is privileged. So even if you admit criminality, the lawyer can't then tell anyone. And if you're worried that the lawyer might be restricted by what you've said, you can fire the lawyer and hire another. The first thing to do when you find yourself in a hole is stop digging. Trying to fix things for your teenager is digging. Go to a lawyer and share your concerns. Maybe some of them are groundless. From what you've shared, you could go to the police. But perhaps there is more that we don't know. If so and you are reluctant to share publicly on the internet, that's sensible. Go to a lawyer and share in private. If you are indigent and can't afford an attorney, look into Legal Aid. They may be in the phone book. If not, call the local bar association and ask for a referral for free legal advice for someone low income. Try to have a generic description of the problem, e.g. you're worried that someone scammed your teenager into doing something illegal. And just to say this one more time. As you've described things, it seems like you should be able to just go to the police and the bank and describe the scam. I don't hear anything that they would prosecute. If you've left something out that changes things, then a lawyer is the way to go. Then you can disclose everything to get advice." }, { "docid": "387908", "title": "", "text": "For a real estate transaction there are multiple stages: From the sellers viewpoint: From the buyers viewpoint: If both parties are comfortable skipping some of the steps the role of the agent can be minimized. How will a fair price be determined? Some realism might be needed, to make sure that the loan appraisal will not be a problem. Will an inspection still be needed? What warranty will exist if the A/C dies this summer? If you still want help from an agent one should be able to help for far less than the normal commission. The seller normally interviews three agents before selecting one, do the same in this situation. Ask how much they would charge for a sale between friends. They can complete their task in just a couple of hours. If the home inspection comes back relatively clean, the transaction should be very easy. The paperwork is the biggest hurdle. You should jointly identify a local settlement company. They will be the ones actually filing the paperwork. They have lawyers. They will check the county records office for existing liens, plats, mortgages and address all the issues. They can send the proper paperwork to the existing mortgage companies and arrange for mortgage insurance. The cost will be the same regardless of the presence of real estate agents and other lawyers. When they say a lawyer is required, it is only because of the paperwork." }, { "docid": "163711", "title": "", "text": "If the homeowner knows the situation is hopeless, and the end result will be the loss of the home, jumping to the end result can be helpful. It is quicker, they don't spend as much time fighting a losing battle. Deed in Lieu of foreclosure is not so great for the borrower if the bank goes after them for the rest of the money owed. There can also be tax implications if the debt is forgiven. Though these issues also exist when the drawn out foreclosure option is done. For the bank. The longer the process the more the house deteriorates. The borrower may stop maintenance and may even vandalize the house. Getting their lock on the door quickly is important to them. They protect it, clean it, and prep it for sale right away. They also save on lawyer fees. They know that the moment they start the foreclosure process all money from the borrower stops, this can save thousands in carrying costs. One issue will be how the accounting losses will be divided among the servicing company, and the investors. If the servicing company will make more money from the longer process they may not push for the quick settlement. If the opposite is true, they will be quickly on board. For the new buyer, the issue with either foreclosure is that the longer process can result in greater hidden and visible damage. The heat pump may work, but the disgruntled homeowner stopped changing the filters the last six months. They may have also removed and damaged things on the way out. Other than that I don't see a big difference. Because the bank had lower costs involved in the foreclosure they might settle for a lower purchase price, but that might be hard to know." }, { "docid": "352640", "title": "", "text": "I am surprised no one has mentioned the two biggest things (in my opinion). Or I should say, the two biggest things to me. First, 1099 have to file quarterly self employment taxes. I do not know for certain but I have heard that often times you will end up paying more this way then even a W-2 employees. Second, an LLC allows you to deduct business expenses off the top prior to determining what you pay in taxes as pass-through income. With 1099 you pay the same taxes regardless of your business expenses unless they are specifically allowed as a 1099 contractor (which most are not I believe). So what you should really do is figure out the expense you incur as a result of doing your business and check with an accountant to see if those expenses would be deductible in an LLC and if it offsets a decent amount of your income to see if it would be worth it. But I have read a lot of books and listened to a lot of interviews about wealthy people and most deal in companies not contracts. Most would open a new business and add clients rather than dealing in 1099 contracts. Just my two cents... Good luck and much prosperity." }, { "docid": "156143", "title": "", "text": "It is also possible that the settlement company didn't tell the local government where to send the new tax bill. This would worry me because what else was missed regarding filing the proper documents with the lenders and the local government. It could also be a problem with the local government. Contact the settlement company or your attorney to get the issue resolved. If you owe the money you want to know; if the new owner owes the money they don't want to face a tax lien because the settlement company made a mistake. Generally this is split between the parties based on the number of days each will own the home. At settlement the money should move from one party to the other based on what has been deposited into escrow and when the actual bills are due. For example the payment for the first half of the year due July 1st may be sent in June. If the settlement was in June The new owner would give money to the old owner. But if settlement was in early July Money would move the other way." }, { "docid": "181306", "title": "", "text": "You should consider using a lawyer as your agent. We once talked to one who was willing to act as our agent for a fixed fee. Not all attorneys can do it where we live, but there are plenty that can. We ended up going another route, but since then we have found a seller's agent that charges us a fixed fee of one thousand dollars (a great deal for us). We are using her again right now. It's all about the contract. Whatever you can legally negotiate is possible - which is yet another reason to consider finding a real estate attorney." }, { "docid": "277812", "title": "", "text": "There are many different types of 1099 forms. Since you are comparing it to a W-2, I'm assuming you are talking about a 1099-MISC form. Independent contractor income If you are a worker earning a salary or wage, your employer reports your annual earnings at year-end on Form W-2. However, if you are an independent contractor or self-employed you will receive a Form 1099-MISC from each client that pays you at least $600 during the tax year. For example, if you are a freelance writer, consultant or artist, you hire yourself out to individuals or companies on a contract basis. The income you receive from each job you take should be reported to you on Form 1099-MISC. When you prepare your tax return, the IRS requires you to report all of this income and pay income tax on it. So even if you receive a 1099-MISC form, you are required to pay taxes on it." }, { "docid": "445688", "title": "", "text": "\"A lawyer might be overkill for recovering a judgment. Do a google search for \"\"judgment recovery service\"\" in your area. They specialize in what you're trying to do. The service will charge you a fee (usually 10%) for any monies recovered. What happens is that you assign the right to collect on the judgment to the service, and their staff can run with it from there. Whoever you contract with will get as much information as possible about your ex-husband: employment, businesses, and so forth. This information can be used to have levies issued by the state, wage garnishment and so forth. There is no given timetable for how long it takes. If your ex is indigent, it would be hard to collect by way a recovery service or an attorney, because you can't collect what he doesn't have.\"" }, { "docid": "31793", "title": "", "text": "Depends whom the 1099 was issued to. If it was issued to your corporation - then its your corporation's income, not yours. Why would it go to your tax return? Your corporation and you are two separate legal entities. You will have to file the 1120S, whether you have corporate income or not, it has to be filed each year. So why make a mess of your reporting and not just report the corporation income on its return and your personal income on your own return? If you no longer use the corporation and all the 1099's are issued to you personally, then just dissolve it so that you won't have to file an empty 1120S every year and pay additional fees for maintaining it." }, { "docid": "305878", "title": "", "text": "People should actually be able to ask anything they want for something they do. I am sure it was agreed before the case started they would get a percentage of the settlement. Too bad could not just give them 16 million in ticket master credit though. How many clients do the lawyers have? Hundred-thousands? I am sure it is also more than one lawyer, not to mention their clerks etc. Look at when the claim filed, 2003? So 9 years almost of working on a case? I know they have not worked totally on this case but still. This price seems totally reasonable to me. Even if it is not reasonable the clients agreed to it." }, { "docid": "183247", "title": "", "text": "Setting up an entity that is partially foreign owned is not that difficult. It takes an additional 1-1.5 months in total, and in this particular case, you guys would be formed as a Joint Venture. It will cost a bit more (about 3-5000). If you're serious about owning a part of a business in China, you should carefully examine what he means by 'more complicated'. From my point of view, I have set up my own WOFE in China, and examined the possibilities of a JV and even considered using a friend to set up the company under their personal name as a domestic company (which is what your supervisor is doing), any difference between the three are not really a big deal anymore, and comes down to the competency of the agencies you are using and the business partner themselves. It cost me 11,000 for a WOFE including the agency and government registration fees (only Chinese speaking). You should also consider the other shareholders who may be part of this venture as well. If there are other shareholders, and you are not providing further tangible contribution, you will end up replaced and penniless (unless of course you trust them too...), because they are actually paying money to be part of the business and you are not. They will not part with equity for you. I'm not a lawyer, but think you should not rely on any promises other than what it says on a company registration paper. Good luck!" }, { "docid": "244016", "title": "", "text": "\"Don't ignore it. If this is a non-trivial amount of money you need a lawyer. You've acknowledged that a loan exists and have personally guaranteed it, so a court can and will ultimately order you to pay. In doing so, they can put liens on your assests. Depending on the state, how the property is titled and other factors, that can include your home. If you don't have the money and are pretty much broke, try to negotiate a settlement. If they balk, you'll eventually need to start talking about bankruptcy -- that's the \"\"nuclear option\"\" and a motivator to settle. Otherwise, you need to either seriously explore bankruptcy or be prepared to lose your stuff to a judgement and having your dirty laundry aired in court. If you're not broke, but don't have liquid capital, you need to figure out a way to raise the money somehow. Again, you need to consult an attorney.\"" }, { "docid": "508769", "title": "", "text": "\"I think you want to look at companies that buy annuities and give you a lump sum. They exist to do this for lawsuit payments, lottery winnings, etc. I'm not sure what the fees would be on a relatively small payout of $6K but try searching for \"\"converting annuity to cash\"\" and the first several hits were all firms looking to buy structured payment settlements for a lump sum. They make their money by paying less than the present-day value of the annuity, so you will get less money this way than collecting your payments slowly.\"" }, { "docid": "243949", "title": "", "text": "There are a few different ways to organize this, but mostly I think you need to talk to a lawyer. The 50/50 split thing should be in writing along with a bunch of other issues. You could have one of you doing a sole proprietorship where the other person is a contractor that receives half of all revenues/profits. The person that owns the sole proprietorship may be entitled to deduct certain costs of running the entity. The other person would then be 1099'd his share of revenues. You could set up a partnership, again legal paperwork is necessary. You could also setup an S-Corp, where each of you is a 50% owner. You could also setup an LLC that is organized as any of the above. I would only do this if you can self fund some additional tax preparation costs. Figure about $600/year at a minimum. There are a lot of options with a sole proprietorship being the easiest. Your first step on the new venture would be to apply for an EIN (free), and then opening a business bank account. Good luck." }, { "docid": "234510", "title": "", "text": "\"TL;DR: Get a tax adviser (EA/CPA licensed in your State) for tax issues, and a lawyer for the Operating Agreement, labor law and contract related issues. Some things are not suitable for DIY unless you know exactly what you're doing. We both do freelance work currently just through our personal names. What kind of taxes are we looking into paying into the business (besides setup of everything) compared to being a self proprietor? (I'm seeing that the general answer is no, as long as income is <200k, but not certain). Unless you decide to have your LLC taxed as a corporation, there's no change in taxes. LLC, by default, is a pass-through entity and all income will flow to your respective tax returns. From tax perspective, the LLC will be treated as a partnership. It will file form 1065 to report its income, and allocate the income to the members/partners on schedules K-1 which will be given to you. You'll use the numbers on the K-1 to transfer income allocated to you to your tax returns and pay taxes on that. Being out of state, will she incur more taxes from the money being now filtered through the business? Your employee couldn't care less about your tax problems. She will continue receiving the same salary whether you are a sole proprietor or a LLC, or Corporatoin. What kind of forms are we looking into needing/providing when switching to a LLC from freelance work? Normally we just get 1099's, what would that be now? Your contract counterparts couldn't care less about your tax problems. Unless you are a corporation, people who pay you more than $600 a year must file a 1099. Since you'll be a partnership, you'll need to provide the partnership EIN instead of your own SSN, but that's the only difference. Are LLC's required to pay taxes 4 times per year? We would definitely get an accountant for things, but being as this is side work, there will be times where we choose to not take on clients, which could cause multiple months of no income. Obviously we would save for when we need to pay taxes, but is there a magic number that says \"\"you must now pay four times per year\"\". Unless you choose to tax your LLC as a corporation, LLC will pay no taxes. You will need to make sure you have enough withholding to cover for the additional income, or pay the quarterly estimates. The magic number is $1000. If your withholding+estimates is $1000 less than what your tax liability is, you'll be penalized, unless the total withholding+estimates is more than 100% of your prior year tax liability (or 110%, depending on the amounts). The LLC would be 50% 50%, but that work would not always be that. We will be taking on smaller project through the company, so there will be times where one of us could potentially be making more money. Are we setting ourselves up for disaster if one is payed more than the other while still having equal ownership? Partnerships can be very flexible, and equity split doesn't have to be the same as income, loss or assets split. But, you'll need to have a lawyer draft your operational agreement which will define all these splits and who gets how much in what case. Make sure to cover as much as possible in that agreement in order to avoid problems later.\"" }, { "docid": "426506", "title": "", "text": "\"I actually interviewed to work at the SEC as an \"\"industry transplant.\"\" I was surprised to learn the limits of the SEC's power - namely, they cannot compel anybody to show them any documents - even ones financial firms are required to hold. When firms do \"\"cooperate,\"\" they tend to make it as difficult as possible for investigators. All the SEC can do in the end is sue the firm, and that's a long drawn out process (I understand now why there are so many settlements). What I learned, however, is that the SEC needs more people like myself who have worked in the business. Most people who interviewed me were attorneys and (sometimes) accountants. Their experience in the financial industry was limited to working at legal firms who did financial advisory work. Many simply don't even know what to look for. I'm still waiting to hear back, but there are a lot of lawyers who are sick of working industry jobs and would love the pay and work environment of the SEC - so it's tough to get a position there.\"" } ]

[ { "docid": "539317", "title": "", "text": "What's the primary factor keeping a consumer from handing out fees as liberally as corporations or small businesses do? Power. Can an individual, or more appropriately, what keeps an individual from being able to charge, fine or penalize a Business? If it could be accomplished, but at a high cost, let's assume it's based on principal and not monetary gain. And have a legal entitlement to money back? No. You are of course welcome to send your doctor a letter stating that you would like $50 to make up for your two hour wait last time around, but there's no legal obligation for him to pay up, unless he signed a contract stating that he would do so. Corporations also cannot simply send you a fine or fee and expect you to pay it; you must have either agreed to pay it in the past, or now agree to pay it in exchange for something. In these cases, the corporations have the power: you have to agree to their rules to play ball. However, consumers do have a significant power as well, in well-competed markets: the power to do business with someone else. You don't like the restocking fee? Buy from Amazon, which offers free shipping on returns. You don't like paying a no-show fee from the doctor? Find a doctor without one (or with a more forgiving fee), or with a low enough caseload that you don't have to make appointments early. Your ability to fine them exists as your ability to not continue to patronize them. In some markets, though, consumers don't have a lot of power - for example, cable television (or other utilities). The FCC has a list of Customer Service Standards, which cable companies are required to meet, and many states have additional rules requiring penalties for missed or late appointments tougher than that. And, in the case of the doctor, if your doctor is late - find one that is. Or, try sending him a bill. It does, apparently, work from time to time - particularly if the doctor wants to keep your business." } ]

[ { "docid": "294424", "title": "", "text": "\"Regarding \"\"Interest on idle cash\"\", brokerage firms must maintain a segregated account on the brokerage firm's books to make sure that the client's money and the firm's money is not intermingled, and clients funds are not used for operational purposes. Source. Thus, brokerage firms do not earn interest on cash that is held unused in client accounts. Regarding \"\"Exchanges pay firm for liquidity\"\", I am not aware of any circumstances under which an exchange will pay a brokerage any such fee. In fact, the opposite is the case. Exchanges charge participants to transact business. See : How the NYSE makes money Similarly, market makers do not pay a broker to transact business on their behalf. They charge the broker a commission just like the broker charges their client a commission. Of course, a large broker may also be acting as market maker or deal directly with the exchange, in which case no such commission will be incurred by the broker. In any case, the broker will pay a commission to the clearing house.\"" }, { "docid": "326571", "title": "", "text": "What effort did you exactly put into this lawsuit? The lawyers spent years working and millions of their own money pursuing a massive case on behalf of the general public. Class actions are insanely complicated and fee like this ought to put large companies like Ticketmaster on alert to ensure their policies are legal and fair. Why does it bother you that people are paid for the work they do? Maybe you'd rather companies include small fees and charges in their transactions. By the time you realize you'd been screwed out of $5, $10, $50 it would be gone. You could go to court and probably get it back but that requires time and probably cost you more than it would be worth. That is exactly why these types of cases are adjudicated as class actions, the individual wrong is too small to pursue but grouped together make a big impact." }, { "docid": "410325", "title": "", "text": "The BPO companies provide round-the-clock service to cater the customer’s requirement. The majority of good BPO companies provide 24/7 service, in order answer the queries and concerns of their client’s end customers. These experts are fully-trained and they do a regular follow-up for the complaint raised by the customers and do their best for resolving the customer’s complaint to his satisfaction. This enhances the C-Sat (Customer satisfaction) and the credibility of the company." }, { "docid": "538384", "title": "", "text": "I work at a large bank, that isn't too unusual although a lot of banks are moving to fee-free basic accounts and upping their fees on other specific transactions. For example, my bank did away with minimum balance requirements to waive a monthly service fee, but we started charging $2/month for paper statements and upped our out-of-network ATM fee by 50 cents. Would like to point out that most financial institutions will reorder your transactions slightly for the purposes of accounting. It is much easier to run all transactions in big batches at the end of the day than individually as they come in. Required disclosures you receive upon account opening explain the exact order but most banks do all credits (money in) first and then debits (money out) like checks, debit cards, and ACH payments after. If you overdraft you can usually avoid a fee if you make a cash deposit before the end of the business day as the cash will go into your account before your purchases are debited. OCCASIONALLY this accounting-based reordering will result in additional fees but that is not the intended purpose of reordering them. And I would always refund any incurred fees that happened due to accounting-based transaction reordering. What Wells Fargo is doing has been illegal since 2008 and their continued appeals are hoping to get the ruling overturned so they won't have to pay out restitution to affected customers. It's frankly despicable." }, { "docid": "19640", "title": "", "text": "Yup. I scrutinize the income statement I receive from my employer every year. What I make vs what the company actually invests in me as an employee is really astounding. Beyond my hourly wage, the company pays for my health insurance premium (all but $10/check), and pays for a medical flex-spending account. On top of this (I know this isn't taxes but it's still an expense and government sanctioned) if I do some dumbass thing to get myself hurt at work, they'd pay all medical bills since it happened on their property. We recently had a bit of a wake-up call this summer, as the board of directors warned everyone that the current medical plan our company provides to us is not sustainable, and will have to undergo changes (we're going to either start paying for our premiums, decrease our flex accounts, or charge smokers additional fees) beginning Jan 1st. Lots of people are complaining about this. I don't think they're aware of the horde of expenses and fees that the company swallows for them in other ways. There's property taxes, business income taxes, excise taxes, customs/duty taxes, state taxes... along with meeting the restrictions and standards of certain governmental agencies (like OSHA). I don't know how a small business owner could ever maintain control over all of this financial mess and be able to help their customers or other employees. There's OSHA, a profit-seeking (through citations) business now, instead of a partner and ally to businesses. A typical 'violation' is $70K, and a 'repeat' violation is $140K. Imagine running a small grocery store, and having to pay this fine because you accidentally had a piece of styrofoam lying on top of a cooler not built to withstand overhead weight. Or because someone wasn't wearing safety shoes in the store. You'd simply go out of business." }, { "docid": "555494", "title": "", "text": "\"To answer #3 specifically, there are a number of exemptions from The Individual Shared Responsibility Payment (the \"\"fine\"\" or \"\"penalty\"\" for being uninsured). One of those is: You lived in a state that didn’t expand its Medicaid program but you would have qualified if it had. That exemption (others may well apply based on income to many people in this category) applies for the entire year if: You live in a state that hasn’t expanded its Medicaid program under the Affordable Care Act [and] Your income and household size would have qualified you or your family for Medicaid if the state had expanded coverage As such, people who are stuck in the Medicaid gap in those states will not be fined. People in this category also have a special option to enroll in a non-Medicaid plan if their estimated annual income increases later in the year, even outside the normal enrollment period.\"" }, { "docid": "572396", "title": "", "text": "\"You can charge a fee to accept checks, although I think the better solution might be to offer a small discount for early payment of your invoices. As some people here have suggested, why not add a small bit to your fees to begin with to cover your inconvenience in the case they choose to pay by check? I often will give clients a small discount of 1.5% for paying my invoices within 10 days, which does motivate some to pay sooner, depending on the client and the amount of the invoice. If you've already added a small amount to your fees in the first place then providing the discount is good public relations that doesn't actually cost you anything. You can always add a \"\"convenience fee\"\" for accepting checks, but this is a more negative approach, as though you're penalizing the client for paying by check rather than electronically. Some people do see it this way, despite any efforts you make to explain otherwise. As to your question about adding fees for accepting credit cards, be very careful! There are sometimes state or local laws on this, and you could find yourself in trouble very quickly if you run afoul of one. Here's a good article to read on the subject: Adding fees for accepting credit cards from CreditCards.com Site I hope this is helpful. Good luck!\"" }, { "docid": "438748", "title": "", "text": "It's fine. Some people (including myself) charge any amount, no matter how small. I think charging small amounts is encouraged by no longer having to sign for small amounts (Not sure if this is state-by-state, though). Somewhere, the transfering of digital money is being paid for - either in the merchant fees, an ATM fee, or my time in going to a bank or ATM where I will not be charged a fee." }, { "docid": "192576", "title": "", "text": "Adriana Fine Jewelry conveys the most recent neckband styles in gold, with the goal that you have the alternative to pick which sort of material you might want to wear. Adriana Fine Jewelry has been endeavoring to pick up the reliability and personalized gold necklace for their clients. Adriana Fine Jewelry has dependably pledged to remain fully informed regarding just the most sweltering adornments patterns and keeps on doing as such right up 'till today. Our client benefit group is prepared and willing to enable clients to pick a style that suits them and help all through the requesting procedure and with existing requests. Purchasing adornments online ought to be a fun and positive experience. Adriana Fine Jewelry needs their clients to feel sure and finish when they slip on their new adornments." }, { "docid": "312637", "title": "", "text": "The BPO companies provide round-the-clock service to cater the customer’s requirement. The majority of good BPO companies provide 24/7 service, in order answer the queries and concerns of their client’s end customers. These experts are fully-trained and they do a regular follow-up for the complaint raised by the customers and do their best for resolving the customer’s complaint to his satisfaction." }, { "docid": "389268", "title": "", "text": "\"An order is your command to the broker to, say, \"\"sell 100 shares of AAPL\"\". An executed order (or partially executed order) is when all (or some) of that command is successfully completed. A transaction is an actual exchange of shares for money, and there may be one or more transactions per executed order. For example, the broker might perform all of the following 5 transactions in order to do what you asked: On the other hand, if the broker cannot execute your order, then 0 transactions have taken place. The fee schedule you quote is saying that no matter how many transactions the broker has to perform in order to fill your order -- and no matter what the share prices are -- they're only going to charge you $0.005 per share ($0.50 in this example of 100 shares), subject to certain limits. However, as it says at the top of the page you linked, Our Fixed pricing for stocks, ETFs (Exchange Traded Products, or ETPs) and warrants charges a fixed amount per share or a set percent of trade value, and includes all IB commissions, exchange and most regulatory fees with the exception of the transaction fees, which are passed through on all stock sales. certain transaction fees are passed through to the client. The transaction fee you included above is the SEC fee on sales. Many (but not all) transaction fees DO depend on the prices of the shares involved; as a result they cannot be called \"\"fixed\"\" fees. For example, if you sell 100 shares of AAPL at $150 each, But if you sell 100 shares of AMZN at $940 each, So the broker will charge you the same $0.50 on either of those orders, but the SEC will charge you more for the expensive AMZN shares than for the cheaper AAPL shares. The reason this specific SEC fee mentions aggregate sales rather than trade value is because this particular SEC fee applies only to the seller and not to the buyer. So they could have written aggregate trade value, but they probably wanted to highlight to the reader that the fee is only charged on sells.\"" }, { "docid": "189391", "title": "", "text": "\"http://www.hmrc.gov.uk/customs/tax-and-duty.htm#3 explains the Import VAT situation quite well. As for who enforces and collects it, if you're talking about buying online and having it shipped to you then you'll notice on the parcel a Customs sticker declaring the contents and value. It is the responsibility of the courier company to collect any duty due from you and pass it on to HMRC. In practice what this means is that you receive a card or note from the courier saying \"\"we're impounding your package until you pay the import duty\"\" and they usually charge a fee on top of the duty itself. Of course you can always go out there yourself and bring something back, but then it is your responsibility to declare it at the customs checkpoint when you enter the country.\"" }, { "docid": "457034", "title": "", "text": "\"Yes, you should budget some amount of your emergency fund for healthcare expenses. How much you budget is really dependent on your particular anticipated costs. Be aware that health insurance likely costs significantly more than your employer charges you for access to its plan. Since healthcare reform mandated guaranteed issue individual coverage you will have the ability to buy individual coverage for you and, if applicable, your family. When buying individual coverage you have essentially two choices, your decision hinges on whether or not you'd qualify for a premium subsidy. If your AGI is below 400% of the poverty line you'll be able to receive subsidized coverage at a state or federal health insurance exchange. If the subsidy is not meaningful to you, or you wouldn't qualify, you can buy an \"\"off exchange\"\" plan offered either directly through a carrier or an insurance agent (some insurance agents are also licensed to sell exchange plans though it's somewhat rare). In order to receive subsidized coverage you must buy through a state or federal exchange, or an agent licensed to sell exchange products specifically. If your employer was large enough to be required to offer its plan via COBRA or you live in a state that extends the COBRA requirement to smaller businesses, you can choose that as well. Bear in mind this option is likely to be expensive relative to individual plans. It's becoming a less relevant solution with the advent of guaranteed issue individual coverage. COBRA is not a special type of insurance, it's a mandate that your employer allow you to remain on its plan but pay the full gross premium plus an up to 2% (10% for calCOBRA) administrative fee. Despide popular vernacular, there is no such thing as Obamacare or ACA coverage. Obamacare reshaped the insurance market. The ACA outlines certain minimum coverage requirements, generally referred to as \"\"Minimum Essential Coverage.\"\" While employers and plans are not \"\"required\"\" to meet all of these coverage requirements there is a penalty associated with non-compliance. The single exception to this is grandfathered plans which can still sidestep a few of the requirements. The penalty is harsh enough that it's not worth the cost of offering a non-compliant plan. Whether you buy coverage through a state or federal exchange, through an insurance agent, or via your employer's COBRA program you will have \"\"ACA\"\" coverage (unless on the off chance your employer's plan doesn't check the \"\"Minimum Essential Coverage\"\" box). So generally all plans available to you will have $0 preventive coverage, pregnancy benefits, cancer treatment benefits etc. Another thing to consider is your entire family doesn't need to be on the same plan. If your family is healthy with the exception of one child, you can purchase $0 deductible coverage for the one child and higher deductible more catastrophic plan for the remainder of your family. In fact you could choose COBRA for one child and purchase individual coverage for the remainder of the family. The things to consider when you face a lay-off: I tried to mitigate my use of \"\"all\"\" and \"\"always\"\" because there are some narrow exceptions to these requirements, such as the \"\"Hobby Lobby\"\" decision allowing closely held organizations with highly religious owners the ability to remove certain contraception benefits. Understand that these exceptions are rare and not available to individual plans.\"" }, { "docid": "201280", "title": "", "text": "Banks do of course incur costs on currency transactions. But they're not as high as the fee charged to the customer. Most banks in most places lose a lot of money on operating bank accounts for customers, and make the money back by charging more than their costs for services like currency exchange. If you don't choose to pay those fees, use an online service instead. But bear in mind that if everyone does so then banks will be forced to charge higher fees for current accounts." }, { "docid": "204288", "title": "", "text": "I am not aware of a version of Interac available in the U.S., but there are alternative ways to receive money: Cheque. The problem with mailed cheques is that they take time to deliver, and time to clear. If you ship your wares before the cheque has cleared and the cheque is bad, you're out the merchandise. COD. How this works is you place a COD charge on your item at the post office in the amount you charge the customer. The post office delivers the package on the other end when the customer pays. The post office pays you at the time you send the package. There is a fee for this, talk to your local post office or visit the Canada Post website. Money order. Have your U.S. customers send an International Money Order, not a Domestic Money Order. Domestic money orders can only be cashed at a U.S. post office. The problem here is again delivery time, and verifying your customer sent an International Money Order. It can be a pain to have to send back a Domestic Money Order to a customer explaining what they have to do to pay you, even more painful if you don't catch the error before shipping your wares. Credit Card. There are a number of companies offering credit card processing that are much cheaper than a bank. PayPal, Square, and Intuit are three such companies offering these services. After I did my investigations I found Square to be the best deal for me. Please do your own research on these companies (and banks!) and find out which one makes the most sense for you. Some transaction companies may forbid the processing of payment for e-cig materials as they my be classed as tobacco." }, { "docid": "417450", "title": "", "text": "Personal finance startup BillGuard has raised $10 million in second-round financing, and it’s using it to expand its service that helps protect accounts from fraudulent activity, the company said Tuesday. BillGuard protects users by registering their credit and debit cards and keeping an eye out for questionable and fraudulent charges. The company uses a crowdsourced approach to identifying unauthorized charges, by not only providing its own detection but also incorporating users’ billing complaints to track and analyze payments. BillGuard’s big second round of funding comes from a powerhouse group, including Khosla Ventures, Eric Schmidt’s Innovation Endeavors and Peter Thiel’s Founders Fund. “At Khosla Ventures we love entrepreneurs who dare to tackle large problems with disruptive, bottom-up methods,” said Vinod Khosla, founding partner of Khosla Ventures, in a statement. At present, BillGuard is free to use for anyone who wants to sign up. So how is it going to make money? The company is talking to large banks that could act as partners and incorporate BillGuard on a per-customer basis for a small fee. BillGuard is also exploring the idea of a merchant certification program that would let merchants have access to some its data, and follow up with customers who end up with fraudulent or questionable charges. New York-based BillGuard previously raised $3 million in its first round of funding from Bessemer Venture Partners and IA Ventures. BillGuard made its public debut on stage at the TechCrunch Disrupt conference in May 2011." }, { "docid": "546874", "title": "", "text": "\"Banks are in it to make money. But they're expected to provide a social good which powers our economy: secure money storage (bank accounts) and cashless transactions (credit/debit cards). And the government does not subsidize this. In fact, banks are being squeezed. Prudent customers dislike paying the proper cost of their account's maintenance (say, a $50/year fee for a credit card, or $9/month for a checking account) - they want it free. Meanwhile government is pretty aggressive about preventing \"\"fine print\"\" trickery that would let them recover costs other ways. However there isn't much sympathy for consumers who make trivial mistakes - whether they be technical (overdraft, late fee) or money-management mistakes (like doing balance transfers or getting fooled by promotional interest rates). So that's where banks are able to make their money: when people are imprudent. The upshot is that it's hard for a bank to make money on a prudent careful customer; those end up getting \"\"subsidized\"\" by the less-careful customers who pay fees and buy high-margin products like balance transfers. And this has created a perverse incentive: banks make more money when they actively encourage customers to be imprudent. Here, the 0% interest is to make you cocky about running up a balance, or doing balance transfers at a barely-mentioned fee of 3-5%. They know most Americans don't have $500 in the bank and you won't be able to promptly pay it off right before the 0% rate ends. (or you'll forget). And this works - that's why they do it. By law, you already get 0% interest on purchases when you pay the card in full every month. So if that's your goal, you already have it. In theory, the banks collect about 1.5% from every transaction you do, and certainly in your mind's eye, you'd think that would be enough to get by without charging interest. That doesn't work, though. The problem is, such a no-interest card would attract people who carry large balances. That would have two negative impacts: First the bank would have to spend money reborrowing, and second, the bank would have huge exposure to credit card defaults. The thing to remember is the banks are not nice guys and are not here to serve you. They're here to use you to make money, and they're not beneath encouraging you to do things that are actually bad for you. Caveat Emptor.\"" }, { "docid": "21576", "title": "", "text": "\"TL;DR summary: 0% balance transfer offers and \"\"free checks usable anywhere\"\" rarely are a good deal for the customer. 0% rate balance transfer offers (and the checks usable anywhere including payment of taxes) come with a transaction fee because the credit card company is paying off the balance on the other card (or the tax or the electric bill) in the full amount of $X as stated on the other card statement or on the tax/electric bill). This is in contrast to a purchase transaction where if you buy something for $X, you pay the card company $X but the card company pays the merchant something less than $X$. (Of course, the merchant has jacked up the sale price of the item to pass on the charge to you.) Can you get the credit card company to waive the transaction fee? You can try asking them but it is unlikely that you will succeed if your credit score is good! I have seen balance transfer offers with no transaction fees made to people who have don't have good credit scores and are used to carrying a balance on their credit cards. I assume that the company making the offer knows that it will make up the transaction fee from future interest payments. A few other points to keep in mind with respect to using a 0% balance transfer offer to pay off a student loan (or anything else for that matter):\"" }, { "docid": "190537", "title": "", "text": "I had a similar situation a while ago, and here's what I learned: What are our options here to ensure that this company can't retry to take our money again via ACH? Close existing account and create a new one that has different account number? Yes. As a temporary solution keep ~$0 balance in the account so that their request for $840 can't be fulfilled? However, would our bank incur any fees because of insufficient funds each time the other company tries to charge us again? Bad idea. You may incur penalties for returned payment, or the bank may honor the payment and charge you overdraft fees. Provide to our bank the service termination notice that proves that we are not in business with the other company anymore and effectively block them. However, termination notice has only our signature Bank doesn't care. ACH withdrawal is akin to a check. The assumption is that the other side has entitlement. You can put stop payment once its processed and try to reverse it claiming fraud, but the end result will be #1: you'll end up getting a new account set up, while they try to recover the money. This is one of the reasons I'm reluctant allowing standing ACH authorizations any more. Generally, the American banking system is very much geared against the consumers, and in many ways is very retarded. In a more advanced countries (which is almost any other country than the US), the standing withdrawal authorization goes through your bank and can be revoked." } ]

[ { "docid": "353159", "title": "", "text": "\"You seem to have it right. Unless you have a big position, having MLP shares in your IRA will not cause you any tax hassles. Your IRA will get a Schedule K from the MPL (which may be mailed to you), but you won't need to do anything with that unless you're over the UBI limit. Last I checked, that was $1000, and you probably won't exceed that. UBI in principle needs to be evaluated every year, so it's not necessarily a \"\"one-time\"\" event. If your IRA does go over the UBI limit, your IRA (not you) needs to file a return. In that case, contact your custodian and tell them about the Schedule K that you got. See also my answer here: Tax consequences of commodity ETF The question is about commodity ETFs in IRAs, but the part of my answer about UBI applies equally well.\"" } ]

[ { "docid": "357455", "title": "", "text": "\"MLP stands for master limited partnership. Investors who buy into one are limited partners, rather than shareholders, and have their taxable income reported on K-1s, rather than 1099s. MLPs are engaged in businesses (e.g. real estate, natural resources) that generate a lot of cash that doesn't need to be \"\"reinvested,\"\" or put back into the company. Because of this feature, the IRS will exempt it from corporate tax if it pays out at least 95% of its income in the form of dividends. The advantage is that you avoid the \"\"double taxation\"\" common to most corporations, and get a higher yield as a result. The disadvantage is that the company can't retain earnings for growth, and needs to borrow money if it wants to grow. In this regard, an MLP is much like a utility (except that a utility has to pay corporate taxes, and is otherwise heavily regulated by the Federal and/or state governments). You can look upon an MLP as an unregulated utility. This means that MLPs are most suitable for utility type investors who are more interested in current income, than capital gains. Because they are unregulated, they are riskier than utilities.\"" }, { "docid": "154839", "title": "", "text": "Conversion of after-tax 401K into a Roth is known (on Bogleheads for instance) as a Mega Backdoor Roth IRA. Recent tax rulings seem to allow for this kind of transfer more cleanly. After conversions, the money is treated as a normal Roth - you don't pay any taxes or penalties on contributions. For investment earnings, the Roth IRA has the standard five-year rule: most commonly - you must hold the account for five years and be 59.5 years old (there are other criteria). Otherwise, you may pay taxes plus a 10% penalty on the earnings portion of your distribution. There are other reasons you can withdraw early - spelled out in IRS Publication 590B Figure 2-1." }, { "docid": "165549", "title": "", "text": "You're ignoring the fact that you still had the taxes from the $5500 (so $1375) left over when making the traditional IRA contribution. So yes, the Roth IRA grew without further taxing more than the Traditional IRA did; but you could've just as easily invested that $1375 in the same investments. While you'd owe taxes on them, true, you'd still earn a boatload of money. That's another $10,607 you've earned, not tax-free, but with gains at the 15% CGR is still $9170. So you now have $60,627 in the Roth, available tax-free, or you have $60,627 available at a 10% or so average rate (12% if you like, though I think you'll find it's more like 10%). Say $53351, plus $9170 from the not-sheltered income after taxes, for $62,521 after taxes. So you make about $2000 more by using the traditional IRA for $5500 and then just investing the rest in a long term account. The math might be slightly worse if you invest in something that has regular dividend taxes due, but if you're careful to use tax-favored investments you should be okay, and even if you don't you'll still end up ahead in the end if you make the same exact investment as your tax-sheltered account. Ultimately the question is: are you paying more in taxes now, or later, comparing now marginal rate to later average rate. If you are paying more in taxes now, then traditional IRA plus invest the rest unsheltered. If you're paying more later, then Roth IRA." }, { "docid": "237457", "title": "", "text": "\"One difference is in the ability to split the pre-tax and after-tax portions of the Traditional account. (Note that earnings in a Traditional IRA or Traditional 401(k) are always pre-tax, even if it was earned from after-tax money, so if you left the money for some amount of time after an after-tax contribution, chances are it's a mix of pre-tax and after-tax money.) When you take money out of a Traditional IRA, including for conversion to a Roth IRA, you are generally subject to the \"\"pro-rata rule\"\", which means that your withdrawal will consist of pre-tax and after-tax amounts in the same proportion as in your whole Traditional IRA. This means that a conversion of a Traditional IRA with any mix of pre-tax and after-tax amounts, will always be taxed on a portion of the withdrawal (the pre-tax portion), and it will leave some after-tax amounts in the Traditional IRA unless you take everything out. The only way to separate the pre-tax and after-tax amounts is to roll over to a Traditional 401(k) (if you have a 401(k) plan that allows this); rules say that only pre-tax amounts can be rolled over into a 401(k), so only pre-tax amounts are rolled over, and if you roll over all the pre-tax amounts, only after-tax amounts will remain. On the other hand, when you rollover your entire Traditional 401(k) to IRAs, you can choose to have the pre-tax portion rolled over to a Traditional IRA and the after-tax portion rolled over to a Roth IRA, separating them, due to IRS Notice 2014-54.\"" }, { "docid": "257274", "title": "", "text": "\"There are ways to mitigate, but since you're not protected by a tax-deferred/advantaged account, the realized income will be taxed. But you can do any of the followings to reduce the burden: Prefer selling either short positions that are at loss or long positions that are at gain. Do not invest in stocks, but rather in index funds that do the rebalancing for you without (significant) tax impact on you. If you are rebalancing portfolio that includes assets that are not stocks (real-estate, mainly) consider performing 1031 exchanges instead of plain sale and re-purchase. Maximize your IRA contributions, even if non-deductible, and convert them to Roth IRA. Hold your more volatile investments and individual stocks there - you will not be taxed when rebalancing. Maximize your 401K, HSA, SEP-IRA and any other tax-advantaged account you may be eligible for. On some accounts you'll pay taxes when withdrawing, on others - you won't. For example - Roth IRA/401k accounts are not taxed at all when withdrawing qualified distributions, while traditional IRA/401k are taxed as ordinary income. During the \"\"low income\"\" years, consider converting portions of traditional accounts to Roth.\"" }, { "docid": "395840", "title": "", "text": "If you exceed the income limit for deducting a traditional IRA (which is very low if you are covered by a 401(k) ), then your IRA options are basically limited to a Roth IRA. The Cramer person probably meant to compare 401(k) and IRA from the same pre-/post-tax-ness, so i.e. Traditional 401(k) vs. Traditional IRA, or Roth 401(k) vs. Roth IRA. Comparing a Roth investment against a Traditional investment goes into a whole other topic that only confuses what is being discussed here. So if deducting a traditional IRA is ruled out, then I don't think Cramer's advice can be as simply applied regarding a Traditional 401(k). (However, by that logic, and since most people on 401(k) have Traditional 401(k), and if you are covered by a 401(k) then you cannot deduct a Traditional IRA unless you are super low income, that would mean Cramer's advice is not applicable in most situations. So I don't really know what to think here.)" }, { "docid": "185047", "title": "", "text": "Why would someone invest in other instruments (e.g. stocks) to pay for childrens' college education when the capital gains on those are taxed, unlike a home equity loan? Many tax advantageous vehicles exist for the purpose of saving for college education such as 529 plans, Roth IRAs, Series EE and I bonds. Tax and penalty free distributions from a portfolio of stocks is possible if the distributions are for qualified education expenses and the account is in the form of a Roth IRA. A house is collateral for a home equity line of credit. A combination of unfortunate events could cause someone to default on the loan and loose their residence. Also, the tax advantages of 529 plans, and Roth IRAs are not applicable to purchase a motor boat. With respect, some people like to leave the home equity loan untapped for other uses. More Details: 529 plans are not taxed by on the Federal level when the withdraws are used for college. In many states, contributions to state sponsored 529 plans are deductible on the state level. These are not self directed so you can't trade stocks/bonds in a 529 plan, however, certain plans allow you to lock in the rate you pay for credit at today's prices. If you want a self directed (ability to trade stocks/bonds) vehicle with tax free disbursements for qualified education, consider a Roth IRA. There are yearly contribution limits, and penalty if the proceeds are not used for qualified educational expenses. Also I believe interest revenue from Series EE and I bonds is tax free if the bond is used for education. There are special conditions and situations to 529 plans, Roth IRAs, Series EE and I bonds, the purpose of this answer was to expand upon the tax advantageous vehicles for higher education." }, { "docid": "411034", "title": "", "text": "I wrote an article about this a while ago with detailed instructions, so I'll link to it here. Here's a snippet about how to use the Roth IRA loophole and report it properly: You don’t have any Traditional/Rollover IRA at all. You deposit up to the yearly maximum (currently $5500) into a traditional IRA. In your case, you re-characterized, which means you essentially deposited. The fact that it lost money may help you later if you have extra amounts in Traditional IRA. You convert your traditional IRA to become Roth IRA ($5500 change designation from Traditional IRA to Roth IRA). You fill IRS form 8606 and attach it to your yearly tax return, no tax due. You have a fully funded Roth IRA account. If you have amounts in the Traditional IRA in excess to what you contributed last year - it becomes a bit more complicated and you need to prorate. See my article for a detailed example. On the form 8606 you fill the numbers as they are. You deposited to IRA 5500, you converted 5100, your $400 loss is lost (unless you have more money in IRA from elsewhere). If you completely distribute your IRA, you can deduct the $400 on your Schedule A, if you itemize." }, { "docid": "569342", "title": "", "text": "\"You can have as many IRA accounts as you want (whether Roth or Traditional), so you can have a Roth IRA with American Funds and another Roth IRA with Vanguard if you like. One disadvantage of having too many IRA accounts with small balances in each is that most custodians (including Vanguard) charge an annual fee for maintaining IRA accounts with small balances but waive the fee if the balance is large. So it is best to keep your Roth IRA in just one or two funds with just one or two custodians until such time as investment returns plus additional contributions made over the years makes the balances large enough to diversify further. Remember also that you cannot contribute the maximum to each IRA; the sum total of all your IRA contributions (doesn't matter whether to Roth or to Traditional IRAs) for any year must satisfy the limit for that year. You can move money from one IRA of yours to another IRA (of the same type) of yours without any tax issues to worry about. Such movements (called rollovers or transfers) are not contributions and do not count towards the annual contribution limit. The easiest way to do move money from one IRA account to another IRA account is by a trustee-to-trustee transfer where the money goes directly from one custodian (American Funds in this case) to the other custodian (Vanguard in this case). The easiest way of accomplishing this is to call Vanguard or go online on their website, tell them that you are wanting to establish a Roth IRA with them, and that you want to fund it by transferring money held in a Roth IRA with American Funds. Give Vanguard the account number of your existing American Funds IRA, tell them how much you want to transfer over -- $1000 or $20,000 or the entire balance as the case may be -- and tell Vanguard to go get the money. In a few days' time, the money will appear in your new Vanguard Roth IRA and the American Funds Roth IRA will have a smaller balance, possibly a zero balance, or might even be closed if you told Vanguard to collect the entire balance. DO NOT approach American Funds and tell them that you want to transfer money to a new Roth IRA with Vanguard: they will bitch and moan and drag their heels about doing so because they are unhappy to lose your business, and will probably screw up the transfer. Talk to Vanguard only. They are eager to get their hands on your IRA money and will gladly take care of the whole thing for you at no charge to you. DO NOT cash in any stock shares, or mutual fund shares, or whatever is in your Roth IRA in preparation for \"\"cashing out of the old account\"\". There is a method where you take a \"\"rollover distribution\"\" from your American Funds Roth IRA and then deposit the money into your new Vanguard Roth IRA within 60 days, but I recommend most strongly against using this because too many people manage to screw it up. It is 60 days, not two months; the clock starts from the day American Funds cuts your check, not when you get the check, and it is stopped when the money gets deposited into your new account, not the day you mailed the check to Vanguard or the day that Vanguard received it, and so on. In short, DO NOT try this at home: stick to a trustee-to-trustee transfer and avoid the hassles.\"" }, { "docid": "217310", "title": "", "text": "You'll want to roll the 401k over to a specifically designated rollover IRA. Rollover IRAs differ from an ordinary IRA account because they have NO contribution limit per year. Also Rolling over a 401k to a Roth IRA has consequences. There won't be a penalty but you will have to pay taxes on the amount being rolled over. The choice of Roth or Traditional IRA depends on your current tax situation as well as your expected taxes at retirement. Typically if you are in a low tax bracket and expect to be in a higher tax bracket at retirement a Roth IRA is suggested as withdrawals are tax free. With a rollover conversion you will have to evaluate whether paying taxes now outweighs the potential benefits of tax free withdrawals when you retire." }, { "docid": "298108", "title": "", "text": "\"If you have maxed out your IRA contribution for 2017 already (and it all went into your Roth IRA), then, until the 2017 Tax Day in April 2018, you can remove any part of this contribution (and the earnings therefrom) from your Roth IRA without any tax consequences or penalties. If you discover in early 2018 that you are not eligible (or only partially eligible) to contribute to a Roth IRA, then of course you must remove all (or part) of your 2017 contributions (and the earnings therefrom) from your Roth IRA by the 2017 Tax Day in April 2018. Indeed, if you have filed for an extension of time to submit your 2017 tax return, then you have until the extended due date to make the withdrawal. As NathanL's answer points out, for 2017, you and withdraw and re-contribute \"\"as many times as you like\"\" though if you push this idea to excess with the same IRA custodian, the custodian may start charging fees. Note that IRS Publication 590b says in the Roth IRA section, Withdrawals of contributions by due date. If you withdraw contributions (including any net earnings on the contributions) by the due date of your return for the year in which you made the contribution, the contributions are treated as if you never made them. If you have an extension of time to file your return, you can withdraw the contributions and earnings by the extended due date. The withdrawal of contributions is tax free, but you must include the earnings on the contributions in income for the year in which you made the contributions. Now, if in the middle of all these transactions, you need to take a distribution from your Roth IRA during 2017 (say because you have a cash flow problem), then it makes a lot of sense to first withdraw all your 2017 contributions and the earnings therefrom. If more money is needed, than you can take a distribution from your Roth IRA. What the distribution consists of is described in great detail in Publication 590b and you might have to pay a tax penalty for a premature distribution depending on how much the distribution is. (The first dollars coming are assumed to be previous contributions in the order in which you made them and these are tax-free and penalty-free; after that the rollover and conversion amounts start to come out and are penalized if they have not spent 5 years in the IRA etc) But you can put the money back into your Roth IRA within 60 days and avoid penalties. Important Notes regarding rollover transactions:\"" }, { "docid": "507892", "title": "", "text": "\"There's a bit of confusion here. Michael's article you linked is focused on the issue of post-tax 401(k) deposits. For those new to this, it sounds like we are talking about Roth 401(k) money. Not so. The Roth IRA was introduced in 1998, and the Roth 401(k) in 2006. Before '06, people had the ability to deposit more to their 401(k) than the pretax limit of $15,000 into the account as \"\"after tax\"\" deposits. My understanding is that these funds were analogous to the non-deducted IRA deposits for those outside the income limits. Michael goes on the point out that now, with the addition of Roth 401(k) and Roth IRAs, there are folk with pre and post Tax 401(k) funds and trying to crack them for transfer to Traditional IRA and Roth IRA may be problematic. Aside from a recent thread here, there are separate accounts for the Roth 401(k) and Traditional 401(k), and it's possible for the traditional to contain post tax money, which, given the recent introduction of the Roth 401(k) conversion, should be easily addressable.\"" }, { "docid": "393693", "title": "", "text": "For the Roth the earnings: interest, dividends, capital gains distributions and capital gains are tax deferred. Which means that as long as the money stays inside of a Roth or is transferred/rolled over to another Roth there are no taxes due. In December many mutual funds distribute their gains. Let's say people invested in S&P500index fund receive a dividend of 1% of their account value. The investor in a non-retirement fund will be paying tax on that dividend in the Spring with their tax form. The Roth and IRA investors will not be paying tax on those dividends. The Roth investor never will, and the regular IRA investor will only pay taxes on it when they pull the money out." }, { "docid": "99137", "title": "", "text": "Other people have pointed this out, but there are a few considerations in whether you should do a Roth or Traditional IRA, such as: One of the major arguments for using a Traditional IRA is that you can (at least in theory) afford to contribute more money initially than you'd be able to afford if you were using a Roth IRA. While this is, in theory, true, I'm not at all convinced that using a Traditional IRA will actually cause people to contribute more to it. Realistically, how many people will actually contribute, say, $500 more to their IRA because they knew that their contribution for this year will save them $500? To know if this is the case, consider the last time that you actually invested some of your tax refund in your retirement account; I haven't seen any actual statistics on this, but I'm guessing that very few people do this. Please see other people's answers for details on the mathematics behind that. The second argument for contributing to a Traditional IRA is if you expect your future income tax rate to be lower than your current tax rate for some reason - e.g. due to a change in government policy (e.g. replacing income taxes with Value Added Tax or something like that), the fact that you're doing the contribution relatively close to when you're planning on withdrawing it, etc. Please see this question for more discussion about this. Keep in mind that, while a Traditional IRA saves you tax money this year, a Roth IRA saves you money when you withdraw it, so it's not really a question of paying taxes on $5000 now or $5000 later, it's a question of paying taxes on $5000 now vs., for example, $50,000 later (or however much the money's grown by the time you withdraw it). Maybe the Traditional IRA is still worth it, though, if there are changes to tax policy or you end up with a lot more money in your Traditional IRA due to being able to contribute more." }, { "docid": "546979", "title": "", "text": "\"This seems like a huge advantage for a Roth to the point where I can't figure out why anyone would choose a traditional. You are missing something called the time value of money. This is the concept that a certain amount of money now has the same value as a bigger amount of money later. Basically, you wouldn't be willing to give up an amount of money now and get the same amount of money later -- you need to get a larger amount later to be willing to exchange it for a certain amount now. So that larger amount later has the same value to you than that smaller amount now. This is the idea behind interest and investment returns. When you make an investment, and it earns interest or gains over a period of time, in effect that final amount of money (principal + interest) has the same value as the principal when you started, because that final amount was grown from the original principal. So whether you are taxed on the principal in the beginning (as in Roth IRA) or on the principal + interest at the end (as in Traditional IRA), you are still taxed on the same value of money. And if the tax rates are the same between now and in the future, then you pay the same value in taxes in both cases. Roth would only be better than Traditional if the tax rates are lower now than when you take it out; and Traditional would only be better than Roth if the tax rates are higher now than when you take it out. Let's consider a simple example to demonstrate that the two are equivalent if the tax rates (assuming a flat tax, because tax brackets introduce other complications) are the same now and when you take it out. In both cases, you start with $1000 pre-tax wages, you invest it for 10 years in a place with guaranteed 5% returns per year adn then take it out, there are no penalties for withdrawal, and there is a flat 25% tax now and in the future. Note that you are left with the same amount of money in both cases. This arises from the associativity of multiplication. Note that Roth IRA has a higher effective \"\"limit\"\" than Traditional IRA, because the nominal limit is the same for both, but Roth is post-tax. So if you contribute to near the limit, where Traditional can no longer match the value that Roth can contribute, then the comparison no longer applies. The $1000 in this example is below the limit for both.\"" }, { "docid": "398520", "title": "", "text": "Don’t take the cash deposit whatever you do. This is a retirement savings vehicle after all and you want to keep this money designated as such. You have 3 options: 1) Rollover the old 401k to the new 401k. Once Your new plan is setup you can call who ever runs that plan and ask them how to get started. It will require you filling out a form with the old 401k provider and they’ll transfer the balance of your account directly to the new 401k. 2) Rollover the old 401k to a Traditional IRA. This involves opening a new traditional IRA if you don’t already have one (I assume you don’t). Vanguard is a reddit favorite and I can vouch for them as Well. Other shops like Fidelity and Schwab are also good but since Vanguard is very low cost and has great service it’s usually a good choice especially for beginners. 3) Convert the old 401k to a ROTH IRA. This is essentially the same as Step 2, the difference is you’ll owe taxes on the balance you convert. Why would you voluntarily want to pay taxes f you can avoid them with options 1 or 2? The beauty of the ROTH is you only pay taxes on the money you contribute to the ROTH, then it grows tax free and when you’re retired you get to withdraw it tax free as well. (The money contained in a 401k or a traditional IRA is taxed when you withdraw in retirement). My $.02. 401k accounts typically have higher fees than IRAs, even if they own the same mutual funds the expense ratios are usually more in the 401k. The last 2 times I’ve changed jobs I’ve converted the 401k money into my ROTH IRA. If it’s a small sum of money and/or you can afford to pay the taxes on the money I’d suggest doing the same. You can read up heavily on the pros/cons of ROTH vs Traditional but My personal strategy is to have 2 “buckets” or money when I retire (some in ROTH and some in Traditional). I can withdraw as much money from the Traditional account until I Max out the lowest Tax bracket and then pull any other money I need from the ROTH accounts that are tax free.This allows you to keep taxes fairly low in retirement. If you don’t have a ROTH now this is a great way to start one." }, { "docid": "316501", "title": "", "text": "\"Like JoeTaxpayer said, I don't know of any difference between the backdoor and a regular Roth IRA contribution besides the issue with existing pre-tax IRA money. So if it is your practice to contribute at the beginning of the year (good for you, most people wait until the last minute), then doing a backdoor seems like the safe choice. Some people have speculated that, hypothetically, the IRS could use the \"\"step transaction doctrine\"\" to treat it as a single direct contribution to a Roth IRA (which then would be disallowed and cause you a penalty until you take it out), but I have never heard of this happening to anyone. As for the paperwork, you just need to fill out one extra form at tax time, Form 8606 (you need to complete two parts of it, one for the non-deductible contribution, and one for the conversion). It is pretty straightforward. (Although I've found that it is a pain to do it in tax software.) Another option would be for you to contribute to a Roth IRA now, but when you discover that you're over the limit at the end of the year, re-characterize it as a Traditional contribution and then convert it back to Roth. But this way is not good because then there is a long time between the Traditional contribution and the Roth conversion, and earnings during this time will be taxed at conversion.\"" }, { "docid": "235935", "title": "", "text": "For various reasons, if you can defer tax payment, it's good for you [when you can give uncle sam $x tomorrow, why give it today?]. Some reasons are, you may plan to return back to your country after x years and then you can pay tax at a lower bracket [e.g. convert 401k to Rollover-IRA then do Roth-conversion and pay lower tax bracket]. Paying now versus later is purely based on your anticipated future tax bracket. [if future bracket is same.. say 25% today and after say 20 years, 25%.. there is absolutely no difference between today payment or future payment of tax -- you can mathematically prove the returns are the same for Roth-IRA (or Roth-401k) versus IRA (or 401k)]. Having a bigger balance (in case of 401k compared to roth-401k) can also give you a sense of more security -- since there are provisions for hardship withdrawal (tax may be due)" }, { "docid": "162592", "title": "", "text": "Using the default values for age and retirement and only making the changes you specified in the question. assumed ROR: 6%, current tax rate: 25%, retirement tax rate: 15%, married, have an employer retirement plan. The results from the two calculators are: Traditional IRA: 631,341 IRA before taxes 536,640 IRA after taxes. Roth IRA: 631,341 Roth IRA 450,207 Taxable Savings where: Total taxable savings The total amount you would have accumulated by retirement in a taxable savings account. your question: The (Traditional) IRA After Taxes value is 6.3% higher than the (Roth) Taxable Savings amount. (Both had an equal gross amount.) Does that mean I should put my money in a tIRA instead of a Roth? My percentages don't match your percentages because you didn't specify the numbers you used. In any case the 450K number shows you what you would have if the money was not invested in an IRA or 401K. To decide between a Roth and a traditional IRA ignore the taxable savings number, that only shows what happens if you decide not not use a retirement account." } ]

[ { "docid": "79552", "title": "", "text": "I was able to find several references that claim that the Indo-US treaty provision is limited to five years: Here it says this (on page 20): Generally the treaty exemption for students is limited to the first five calendar years that the international student is in the U.S. However there is no set time limit for students from Belgium, Bulgaria, China, The Netherlands, and Pakistan. However, I couldn't find any specific time limit neither in the treaty nor in the technical explanation. The explanation says: Thus, for example, an Indian resident who visits the United States as a student and becomes a U.S. resident according to the Code, other than by virtue of acquiring a green card, would continue to be exempt from U.S. tax in accordance with this Article so long as he is not a U.S. citizen and does not acquire immigrant status in the United States. The saving clause does apply to U.S. citizens and immigrants. However, the treaty explicitly says this: The benefits of this Article shall extend only for such period of time as may be reasonable or customarily required to complete the education or training undertaken. The reason for this last paragraph is to ensure that you don't artificially prolong your student status, and the 5 year limit may come out of the interpretation of this specific paragraph. Similar paragraph exists in the US-China treaty, and the explanation for that treaty says this: These exemptions may be claimed only for the period reasonably necessary to complete the education or training. In some cases, the course of study or training may last less than year. For most undergraduate college or university degrees the appropriate period will be four years. For some advanced degrees, such as in medicine, the required period may be longer, e.g., seven years. Based on this, it is my personal impression that if you're an undergraduate student and studying the same degree (and not, for example, finished your BA, and started your MS) - you are no longer eligible for the treaty benefit. But I suggest you ask a professional (EA/CPA licensed in your State) for a more reliable tax advice on the matter. I'm not a tax professional and this is not a tax advice." } ]

[ { "docid": "397449", "title": "", "text": "You can keep your Mutual Funds. You have to communicate your new status to fund house. The SIP can continue. Please note you have to convert the savings account to NRO account. Most banks would keep the account number same, else you have to revise SIP debit to new NRO account. From a tax point of view, it would be similar to resident status. Right now short term gains are taxed. There are quite a few other things you may need to do. Although dated, this is a good article. PS: Once you become resident alien in US for tax purposes, you are liable for taxes on global income." }, { "docid": "308048", "title": "", "text": "It is absolutely legal. While studying on a F-1 you would typically be considered a non-resident alien for tax purposes. You can trade stocks, just like any other foreigner having an account with a US- or non-US based brokerage firm. Make sure to account for profit made on dividends/capital gain when doing your US taxes. A software package provided by your university for doing taxes might not be adequate for this." }, { "docid": "207531", "title": "", "text": "There are just too many variables here... Will you legally be considered a permanent resident from the moment you move? Will you work from home as a contractor or as an employee? Those are not questions you can answer yourself, they really depend on your circumstances and how the tax authorities will look at them. I strongly encourage you to speak to an advisor. Very generally spoken, at your place of residence you pay taxes for your worldwide income, at the place of your work base (which is not clear if this really would be Turkey) you pay taxes on the income generated there. If it's one and the same country, it's simple. If not, then theoretically you pay twice. However, most countries have double taxation treaties to avoid just that. This usually works so that the taxes paid abroad (in Turkey) would be deducted from your tax debt at your place of residence. But you might want to read the treaty to be sure how this would be in your specific case (all treaties are publicly available), and you should really consider speaking to a professional." }, { "docid": "38585", "title": "", "text": "This is something better asking a licensed professional (EA/CPA licensed in the US) who's also familiar with your home country tax law and the tax treaty your home country has with the US. Assuming no tax treaty and adverse tax consequences at home, you can have this scenario: The last step is critical - unless there's a tax treaty, not every country allows foreign tax credit (tax treaties usually have a provision to avoid double taxation), and you may end up paying both the US tax and local tax on the same money. If there's a tax treaty - step #4 is most likely guaranteed. Step #4 may not work in some places that would not consider the penalty as tax. Again - check it with an accountant proficient with the local law. Step #3 depends on your country. Some countries ignore foreign deferred compensation rules and consider the 401k amounts income to you when it was deposited (the US treats foreign tax deferred accounts this way, I believe that is also the case in India). So you should check locally. In this case you have probably paid taxes (or were exempt) on this amount when you earned it and will not pay taxes again. But then you might also not be able to claim the 10% back as credit. Leaving it is an option, although with such an amount is hardly worth it. You'll have to check how your country deals with foreign accounts of its citizens (the US, for example, puts an enormous reporting and tax burden on these, some countries forbid them altogether). This also applies to step #1." }, { "docid": "447828", "title": "", "text": "I want to know whether the money I transferred to my NRI Account is taxable. No taxes. As you were NRI the funds you earn are not taxable in India irrespective of whether you transfer to India or keep it in Saudi. You can transfer this back to India anytime in 7 years after you become Resident Indian. I was a NRI in Saudi Arabia from Nov 2009 to October 2011. For the financial year 1 April 2009 to 31 March 2010, you would be treated as resident Indian and you Global income would be taxed. i.e. your income in Saudi from Nov 2009 to March 2010 would be taxed in India. You can claim DTAA. Whether I have to file my returns for those 2 yrs. Ideally Yes. If you have not done, please consult a CA for advice." }, { "docid": "586772", "title": "", "text": "Citizens of India who are not residents to India (have NRI status) are not entitled to have ordinary savings accounts in India. If you have such accounts (e.g. left them behind to support your family while you are abroad), they need to be converted to NRO (NonResident Ordinary) accounts as soon as possible. Your bank will have forms for completion of this process. Any interest that these accounts earn will be taxable income to you in India, and possibly in the U.K. too, though tax treaties (or Double Taxation Avoidance Agreements) generally allow you to claim credit for taxes paid to other countries. Now, with regard to your question, NRIs are entitled to make deposits into NRO accounts as well as NRE (NonResident External) accounts. The differences are that money deposited into an NRE account, though converted to Indian Rupees, can be converted back very easily to foreign currency if need be. However, the re-conversion is at the exchange rate then in effect, and you may well lose that 10% interest earned because of a change in exchange rate. Devaluation of the Indian Rupee as occurred several times in the past 70 years. Once upon a time, it was essentially impossible to take money in an NRO account and convert it to foreign currency, but under the new recently introduced schemes, money in an NRO account can also be converted to foreign currencies, but it needs certification by a CA, and various forms to be filled out, and thus is more hassle. interest earned by the money in an NRE account is not taxable income in India, but is taxable income in the U.K. There is no taxable event (neither in U.K. nor in India) when you change an ordinary savings account held in India into an NRO account, or when you deposit money from abroad into an NRE or NRO account in an Indian bank. What is taxable is the interest that you receive from the Indian bank. In the case of an NRO account, what is deposited into your NRO account is the interest earned less the (Indian) income tax (usually 20%) deducted at the source (TDS) and sent to the Income Tax Authority on your behalf. In the case of an NRE account, the full amount of interest earned is deposited into the NRE account -- no TDS whatsoever. It is your responsibility to declare these amounts to the U.K. income tax authority (HM Revenue?) and pay any taxes due. Finally, you say that you recently moved to the U.K. for a job. If this is a temporary job and you might be back in India very soon, all the above might not be applicable to you since you would not be classified as an NRI at all." }, { "docid": "454563", "title": "", "text": "If you are tax-resident in the US, then you must report income from sources within and without the United States. Your foreign income generally must be reported to the IRS. You will generally be eligible for a credit for foreign income taxes paid, via Form 1116. The question of the stock transfer is more complicated, but revolves around the beneficial owner. If the stocks are yours but held by your brother, it is possible that you are the beneficial owner and you will have to report any income. There is no tax for bringing the money into the US. As a US tax resident, you are already subject to income tax on the gain from the sale in India. However, if the investment is held by a separate entity in India, which is not a US domestic entity or tax resident, then there is a separate analysis. Paying a dividend to you of the sale proceeds (or part of the proceeds) would be taxable. Your sale of the entity containing the investments would be taxable. There are look-through provisions if the entity is insufficiently foreign (de facto US, such as a Subpart-F CFC). There are ways to structure that transaction that are not taxable, such as making it a bona fide loan (which is enforceable and you must pay back on reasonable terms). But if you are holding property directly, not through a foreign separate entity, then the sale triggers US tax; the transfer into the US is not meaningful for your taxes, except for reporting foreign accounts. Please review Publication 519 for general information on taxation of resident aliens." }, { "docid": "97852", "title": "", "text": "Legally, do I have anything to worry about from having an incorrectly filed W-4? What you did wasn't criminal. When you submitted the form it was correct. Unfortunately as your situation changed you didn't adjust the form, that mistake does have consequences. Is there anything within my rights I can do to get the company to take responsibility for their role in this situation, or is it basically my fault? It is basically your fault. The company needs a w-4 for each employee. They will use that W-4 for every paycheck until the government changes the regulation, or your employment ends, or you submit a new form. Topic 753 - Form W-4 – Employee's Withholding Allowance Certificate If an employee qualifies, he or she can also use Form W-4 (PDF) to tell you not to deduct any federal income tax from his or her wages. To qualify for this exempt status, the employee must have had no tax liability for the previous year and must expect to have no tax liability for the current year. However, if the employee can be claimed as a dependent on a parent's or another person's tax return, additional limitations may apply; refer to the instructions for Form W-4. A Form W-4 claiming exemption from withholding is valid for only the calendar year in which it is filed with the employer. To continue to be exempt from withholding in the next year, an employee must give you a new Form W-4 claiming exempt status by February 15 of that year. If the employee does not give you a new Form W-4, withhold tax as if he or she is single, with no withholding allowances. However, if you have an earlier Form W-4 (not claiming exempt status) for this employee that is valid, withhold as you did before. (I highlighted the key part) Because you were claiming exempt they should have required you to update that form each year. In your case that may not have applied because of the timing of the events. When do you submit a new form? Anytime your situation changes. Sometimes the change is done to adjust withholding to modify the amount of a refund. Other times failure to update the form can lead to bigger complication: when your marital status changes, or the number of dependents changes. In these situations you could have a significant amount of under-withheld, which could lead to a fine later on. As a side note this is even more true for the state version of a W-4. Having a whole years worth of income tax withholding done for the wrong state will at a minimum require you to file in multiple states, it could also result in a big surprise if the forgotten state has higher tax rate. Will my (now former) employee be responsible for paying their portion of the taxes that were not withheld during the 9 months I was full-time, tax Exempt? For federal and state income taxes they are just a conduit. They take the money from your paycheck, and periodically send it to the IRS and the state capital. Unless you could show that the pay stubs said taxes were being withheld, but the w-2 said otherwise; they have no role in judging the appropriateness of your W-4 with one exception. Finally, and I am not too hopeful on this one, but is there anything I can do to ease this tax burden? I understand that the IRS is owed no matter what. You have one way it might workout. For many taxpayers who have a large increase in pay from one year to the next, they can take advantage of a safe-harbor in the tax law. If they had withheld as much money in 2015 as they paid in 2014, they have reached the safe-harbor. They avoid the penalty for under withholding. Note that 2014 number is not what you paid on tax day or what was refunded, but all your income taxes for the entire year. Because in your case your taxes for the year 2014 were ZERO, that might mean that you automatically reach the safe-harbor for 2015. That makes sense because one of the key requirements of claiming exempt is that you had no liability the year before. It won't save you from paying what you owe but it can help avoid a penalty. Lessons" }, { "docid": "345942", "title": "", "text": "Am I required to send form 1099 to non-US citizens who are not even residing in the US? Since they're not required to file US taxes, do I still have to send the form to them? That's tricky. You need to get W8/W9 from them, and act accordingly. You may need to withhold 30% (or different percentage, depending on tax treaty they claim on W8). If you withhold taxes, you also need to file form 1042. I suggest you talk to a tax professional. Is it fine to expose my ITIN (taxpayer identification number) to individuals or companies who I send the form to them. Since the form requires me to write my TIN/EIN, what would be the risks of this and what precautions should be taken to avoid inappropriate/illegal use? No, it is not OK. But if you pay these people directly - you don't have much choice, so deal with it. Get a good insurance for identity theft, and don't transact with people you don't trust. One alternative would be to pay through a payment processor (Paypal or credit cards) - see your next question. I send payments via PayPal and wire transfer. Should I send form 1099-MISC or 1099-K? Paypal is a corporation, so you don't need to send 1099 to Paypal. Whatever Paypal sends to others - it will issue the appropriate forms. Similarly if you use a credit card for payment. When you send money through Paypal - you don't send money directly to your business counterparts. You send money to Paypal." }, { "docid": "318260", "title": "", "text": "\"Besides money and time lost, it is pretty clear that most tax advisors are not well versed in non-resident taxes. It seems that their main clients are either US residents or H1B workers (who are required to file as residents). I share your pain on this one. In fact, even for H1B/green card holders or Americans with income/property abroad vast majority of advisers will make mistakes (which may become quite costly). IRS licensing exams for EA/RTRP do not include a single question on non-resident taxation or potential issues, let alone handling treaties. Same goes for the AICPA unified CPA exam (the REG portion of which, in part, deals with taxes). I'm familiar with the recent versions of both exams and I am very disappointed and frustrated by that lack of knowledge requirement in such a crucial area (I am not a licensed tax preparer now though). That said, the issue is very complicated. I went through several advisers until I found the one I can trust to know her stuff, and while at it happened to learn quite a lot about the US tax code (which doesn't make me sleep any better by the least). It is my understanding that preparing a US tax return for a foreign person without a mistake is impossible, but the question is how big is the mistake you're going to make. I had returns prepared by solo working advisers where I found mistakes as ridiculous as arithmetic calculation errors (fired after two seasons), and by big-4 firms where I found mistakes that cost me quite a lot (although by the time I figured that they cost me significant amounts, it was too late to sue or change; fired after 2 seasons as well). As you can see, it is relevant to me as well, and I do not do my own tax returns. I usually ask for the conservative interpretations from my adviser, IRS is very aggressive on enforcement and the penalties, especially on foreigners are draconian (I do not know if it ever went through a judicial review, as I believe some of these penalties are unconstitutional under the 8th amendment, but that's my personal opinion). Bottom line - its hard to find a decent tax adviser, and that's why the good ones are expensive. You get what you pay for. How do I go about locating a CPA/EA who is well versed in non-resident taxes located in the Los Angeles area (Orange County area is not too far away either) These professionals are usually active in large metropolitan areas with a lot of foreigners. You should be able to find decent professionals in LA/OC, SF Bay, Seattle, New York, Boston, and other cities and metropolises attracting foreigners. Also, look for those working in the area of a major university. Specific points: If I find none, can I work with a quaified person who lives in a different state and have him file my taxes on my behalf (electronically or via scans going back and forth) Yes. But that person my have a problem representing you in California (in case you're audited), unless he's an EA (licensed by the Federal government, can practice everywhere) or is licensed as a CPA or Attorney by the State of California. Is there a central registry of such quaified people I can view (preferably with reviews) - akin to \"\"yellow pages\"\" IRS is planning on opening one some time this year, but until then - not really. There are some commercial sites claiming to have that, but they're using the FOIA access to the IRS and states' listings, and may not have updated information. They definitely don't have updated license statuses (or any license statuses) or language/experience information. Wouldn't trust them.\"" }, { "docid": "390102", "title": "", "text": "According to the Form W-8BEN instructions for Part II, Line 10: Line 10. Line 10 must be used only if you are claiming treaty benefits that require that you meet conditions not covered by the representations you make on line 9 and Part III. For example, persons claiming treaty benefits on royalties must complete this line if the treaty contains different withholding rates for different types of royalties. In tax treaties, some of the benefits apply to every resident of a foreign country. Other benefits only apply to certain groups of people. Line 10 is where you affirm that you meet whatever special conditions are necessary in the treaty to obtain the benefit. If you are claiming that Article 15 of the U.S.-India Tax Treaty, you could use Line 10 to do this. It is important to remember that this form goes to the company paying you; it does not actually get sent to the IRS. Therefore, you can ask the company themselves if filling out Line 9 only will result in them withholding nothing, or if they would need you to fill out Line 10." }, { "docid": "547087", "title": "", "text": "You are faced with a dilemma. If you use a 529 plan to fund your education, the short timeline of a few years will limit your returns that are tax free. Most people who use a 529 plan either purchase years of tuition via lump sum, when the child is young; or they put aside money on a regular basis that will grow tax deferred/tax free. Some states do give a tax break when the contribution is made by a state taxpayer into a plan run by the state. The long term plans generally use a risk profile that starts off heavily weighted in stock when the child is young, and becomes more fixed income as the child reaches their high school years. The idea is to protect the fund from big losses when there is no time to recover. If you choose the plan with the least risk the issue is that the amount of gains that are being protected from federal tax is small. If you pick a more aggressive plan the risk is that the losses could be larger than the state tax savings. Look at some of the other tax breaks for tuition to see if you qualify Credits An education credit helps with the cost of higher education by reducing the amount of tax owed on your tax return. If the credit reduces your tax to less than zero, you may get a refund. There are two education credits available: the American Opportunity Tax Credit and the Lifetime Learning Credit. Who Can Claim an Education Credit? There are additional rules for each credit, but you must meet all three of the following for either credit: If you’re eligible to claim the lifetime learning credit and are also eligible to claim the American opportunity credit for the same student in the same year, you can choose to claim either credit, but not both. You can't claim the AOTC if you were a nonresident alien for any part of the tax year unless you elect to be treated as a resident alien for federal tax purposes. For more information about AOTC and foreign students, visit American Opportunity Tax Credit - Information for Foreign Students. Deductions Tuition and Fees Deduction You may be able to deduct qualified education expenses paid during the year for yourself, your spouse or your dependent. You cannot claim this deduction if your filing status is married filing separately or if another person can claim an exemption for you as a dependent on his or her tax return. The qualified expenses must be for higher education. The tuition and fees deduction can reduce the amount of your income subject to tax by up to $4,000. This deduction, reported on Form 8917, Tuition and Fees Deduction, is taken as an adjustment to income. This means you can claim this deduction even if you do not itemize deductions on Schedule A (Form 1040). This deduction may be beneficial to you if, for example, you cannot take the lifetime learning credit because your income is too high. You may be able to take one of the education credits for your education expenses instead of a tuition and fees deduction. You can choose the one that will give you the lower tax." }, { "docid": "25172", "title": "", "text": "The transaction will be taxable in India. You will have to pay Capital Gains tax. I am assuming that you purchased the house while you were Indian Resident for tax purposes. As such its needs more paper work to get the money back to US. Consult a CA in India who will help with the paperwork. You haven't mentioned your tax status in US, one you update it, someone will post a US tax aspects of the transaction." }, { "docid": "298796", "title": "", "text": "The finance team from your company should be able to advise you. From what I understand you are Indian Citizen for Tax purposes. Any income you receive globally is taxable in India. In this specific case you are still having a Employee relationship with your employer and as such the place of work does not matter. You are still liable to pay tax in India on the salary. If you are out of India for more than 182 days, you can be considered as Non-Resident from tax point of view. However this clause would not be of any benefit to you as are having a Employee / Employer relationship and being paid in India. Edit: This is only about the India portion of taxes. There maybe a UK protion of it as well, plus legally can you work and your type of Visa in UK may have a bearing on the answer" }, { "docid": "392313", "title": "", "text": "non-resident aliens to the US do not pay capital gains on US products. You pay tax in your home country if you have done a taxable event in your country. http://www.investopedia.com/ask/answers/06/nonusresidenttax.asp#axzz1mQDut9Ru but if you hold dividends, you are subject to US dividend tax. The UK-US treaty should touch on that though." }, { "docid": "273563", "title": "", "text": "KPMG's website has: For the purposes of taxation, how is an individual defined as a resident of Sweden? An individual is considered a resident in Sweden for tax purposes if one of the following three conditions is met: The individual has his/her real home and dwelling in Sweden. The individual stays in Sweden during a lengthy period of time (a permanent sojourn) and with only occasional interruptions. There is no legal definition of permanent sojourn, but a stay of six months or more will in general constitute residency. So, given your I am presently resident in Sweden and this from the above website: There is no legal definition of permanent sojourn, but a stay of six months or more will in general constitute residency. I believe you are liable for Swedish income tax. I am not an accountant. This is just speculation based on a Google search. Get paid advice! :-)" }, { "docid": "372744", "title": "", "text": "If you want to prove the actual tax liability you have in the US - you have to file a tax return. If the Romanian government believes you that the withholding is your actual tax - fine, but that would be a lie. Withholding is not a tax. The American payers must withhold from foreigners enough to have transferred more than the actual tax the foreigners would have paid. The standard withholding is 30%, but the actual tax on dividends varies. In case the tax treaty limits the tax on dividends - the withholding is usually up to the maximum of the tax allowed by the treaty. But allowed doesn't mean that would be the actual tax. In many cases it is not. So if you want to claim the US tax paid as a credit towards your Romanian tax - you'll need to file a tax return in the US, calculate the actual tax liability and that would be the amount of credit you can claim. The difference between that amount and the amount withheld by the payer will be refunded to you by the IRS. You don't have to file a US tax return, that is true. But the withholding is not the tax, the actual tax liability may have been less, and the Romanian tax authority may deny your credit, in whole or in part, based on the fact that you haven't filed a US tax return and as such have no proof of your actual tax paid. You had some experience with the UK tax treaty, and you think all the treaties are the same. That may be a reasonable line of thought, but it is incorrect. Treaties are not the same. More importantly, even if the treaty is the same - the tax law is not. While in the UK the tax on dividends may be flat and from the first pound - in the US it is neither flat nor from the first dollar. Thus, while in the UK you may have been used to paying tax at source and that's it - in the US it doesn't work that way at all." }, { "docid": "116181", "title": "", "text": "\"If you are a permanent resident (and it wasn't taken away or abandoned), then you are a resident alien for U.S. tax purposes. (One of the two tests for being a resident alien is the \"\"green card test\"\".) Being a resident alien means all your worldwide income is subject to U.S. taxes, regardless of where you live or work. That doesn't necessarily mean you need to actually pay taxes on your income again if you've already paid it -- you may be able to use the Foreign Tax Credit to reduce your taxes by the amount already paid to a foreign government -- but you need to report it on U.S. tax forms just like income from the U.S., and you can then apply any tax credits that you may qualify for. As a resident alien, you file taxes using Form 1040. You are required to file taxes if your income for a particular year is above a certain threshold. This threshold is described in the first few pages of the 1040 instructions for each year. For 2013, for Single filing status under 65, it is $10000. The only way you can legally not file is if your income the whole year was below this amount. You should go back and file taxes if you were required to but failed to. Having filed taxes when required is very important if you want to naturalize later on. It is also one component of demonstrating you're maintaining residency in the U.S., which you're required to do as a permanent resident being outside the U.S. for a long time, or else you'll lose your permanent residency. (Even filing taxes might not be enough, as your description of your presence in the U.S. shows you only go there for brief periods each year, not really living there. You're lucky you haven't lost your green card already; any time you go there you run a great risk of them noticing and taking it away.)\"" }, { "docid": "398806", "title": "", "text": "I have some more inputs to investigate: India has dual tax avoidance treaty signed with european countries so that NRIs dont pay tax in both countries. Please check if India has some agreement with Swiss Also for freelance job that is delivered from India, u need to make sure where you have to pay taxes as you are still in India so the term NRI will not hold good here. Also, if Swiss company is paying tax there, and you are a freelancer from India(resident in india) how to tax filing /rate etc has to be investigated. Also, can you apply for tax back from swiss( a portion of tax paid can be refunded eg: in Germany) but I dont know if this is true for Freelancers and also for people out side SWISS. Bip" } ]

[ { "docid": "324331", "title": "", "text": "You mention that you would quit right after getting approved. But in the United States there would be one last check as a part of closing. Therefore it would be best to wait until after closing to quit your job. Waiting until after closing would also protect you from some hiccup that causes a delay in closing, thus requiring the need to reapply for the loan." } ]

[ { "docid": "232262", "title": "", "text": "\"The responses here are excellent. I'd add just a couple points. Debt is not generic. It ranges from low (my HELOC is 2.5%) to insane (24% credit card, anyone?). When I read about the obsession to be completely debt free, I ask questions. Are you saving in your 401(k) at least up to the match? I disagree with the \"\"debt is evil\"\" people who advise to ignore retirement savings while paying off every last debt. My company offers a dollar for dollar match on the first 5% of income deposited. So a $60K earner will see a $3000 deposit doubled. 5 years of this, and he has 1/2 a year's income in his retirement account, more with positive returns. (note - for those so fearful of losses, all 401(k) accounts have to offer a fixed income, low risk choice. currently 1% or less, but the opposite of \"\"I can lose it all\"\".) After that, paying off the higher debt is great. When it's time to hack away at student debt and mortgage, I am concerned that if it's at the risk of having no savings, I'd hold off. Consider - Two people in homes worth $250K. One has a mortgage of $250K and $100K in the bank. The other has his mortgage paid down to $150K. When they lose their jobs, the guy with the $100K in the bank has the funds to float himself through a period of unemployment as well as a house the bank is less likely to foreclose on. The guy with no money is in deep trouble, and the bank can sell his house for $150K and run away (after proper foreclosure proceedings of course.) My mortgage is one bill, like any other, and only a bit more than my property tax. I don't lose sleep over it. It will be paid before I retire, and before my 11yr old is off to college. I don't think you stupid for paying your low interest debt at your own pace.\"" }, { "docid": "217521", "title": "", "text": "Also, my wealth manager doesn't like to discuss my money with me. To some extent, I understand this because finances are not my forte This is akin to porn surfing all day at your job instead of writing code, fire him ASAP. For now I would stick it in a bank account until you are comfortable and understand the investments you are purchasing. Here are some options to consider: The last one is tricky. You might have to interview several in order to find that one gem. With you being so young it is unlikely any of your friends have a need for such a service. I would concentrate on asking older work colleagues or friends of your parents for recommendations. Ask if they are educated by their adviser. In the end it would really pay for you to educate yourself about finances. No one can quite do as good as a job as you can in this area. You recognize that there was a problem with your current guy, that shows wisdom. If you have an interest in this area, I would recommend attending a Financial Peace University class. All my kids (about your age and older) are required to take it. It will help you navigate debt, mortgages, insurance, and investing and will cost you about $100. If you don't learn enough the first time, and you won't, you can repeat the course as many times as you wish for no additional cost." }, { "docid": "157190", "title": "", "text": "I sold my house and had been in the market looking for a replacement house for over 6 months after I sold it. I found someone willing to give me a short term, 3 month lease, with a month to month after that, at an equitable rate, as renters were scarcer than buyers.By the time I found a house, there were bidding wars as surplus had declined (can be caused seasonally), and it was quite difficult to get my new house. However, appraisers help this to a degree because whatever the seller wants, is not necessarily what they get, even if you offer it. I offered $10k over asking just to get picked out of the large group bidding on the house. Once the appraisal came in at $10k below my offer, I was able to buy the house at what I expected. Of course I had to be prepared if it came in higher, but I did my homework and knew pretty much what the house was worth. The mortgage is the same as the lease I had, the house is only 10 years' old and has a 1 year warranty on large items that could go wrong. In the 3 months I've been in the house, I have gained nearly $8k in equity....and will have a tax writeoff of about $19,000 off an income off a salary of $72,000, giving me taxable income of $53,000... making by tax liability go down about $4600. If I am claiming 0 dependents I will get back about $5,000 this year versus breaking even." }, { "docid": "428953", "title": "", "text": "My first credit card was a JC Penney card, 30-ish years ago. I had a steady job paying maybe $11/hr at the time, and putting that on the application (with no other long-term debts) was all it took. They gave me a card and a $4100 limit!!!! I bought some clothes and stuff there every month or so, and paid the bill in full every month by the due date. After a few months of that, I was able to apply and get approved for a Visa card (having the JCP card already helped). After that, just keep on buying and paying in full every month. Eventually you'll buy a car, and the credit history from the cards will help you get approved for that. Continue making your payments on time every month. Same with a house/condo (just bigger). Basically, don't spend more that you can afford, make your payments regularly and on time. Pay in full--do NOT just make the minimum payments...that's a recipe for disaster!!! Don't miss payments, and try not to be late on them. A late payment once in a great while isn't the end of the world, as long as you pay the late fees and interest charges." }, { "docid": "339570", "title": "", "text": "&gt;Dollars to donuts... I'd be willing to bet you have a pretty good boss there. ...and she (my boss) left 6 months later for a better job. Now I report to a clueless idiot. He has no experience in our industry but was hired because he was part of the good old boys referral network the CEO has going on. He spent his time flipping companies for living prior to that. Now the veneer is starting to come crashing down, despite me trying to make my boss look good for these past ~2 years. He's desperately trying to find a corporate controller (interviewing) to dump his mess onto as I type this. People external to the department are starting to gather he's all buzz words and power points and no substance. We were bought out by a bigger company recently and he can't hide behind his usual bullshit. My new boss dropped the bombshell today that the girl who was in my position 3 years ago (but quit and took a managers job at a rival company through connections) in now a candidate for the corporate controller position. His reasoning hinged almost completely on the justification that she is already well like here and is familiar with the company. The girl doesn't even have a college degree. Let alone a masters. She left a tax mess on her way out that I've spent the last 3 years trying to fix from an administrative standpoint. Apparently the guy who kept my boss from looking like a total idiot (me) isn't worth mentoring up to the next level. But some random person with no college degree (but connections), and holes in her understanding of our line of work is a serious candidate for a promotion. It's amazing to watch the bad decisions compound themselves into bigger and bigger problems. My boss inherited a relatively well oiled accounting department and turned it into an audit nightmare. He doesn't know half of what goes on, on a daily basis but feels the need to change processes arbitrarily without understanding WHY we do what we do and how it relates to our industry and external compliance, let alone GAAP. It's quite apparent this ship is sinking. I'm trying my best to get off it now as of today. Trying to promote someone with less work experience and education over me was the last straw. The only good decision he made was realizing this girl's resume is a bunch of titles with no substance and realizing she wasn't a serious candidate, an hour after pissing me off calling me into a meeting to announce the joyous news." }, { "docid": "123991", "title": "", "text": "\"Banks are currently a lot less open to 'creative financing' than they were a few years ago, but you may still be able to take advantage of the tactic of splitting the loan into two parts, a smaller 'second mortgage' sometimes called a 'purchase money second' at a slightly higher interest rate for around 15-20% of the value, and the remaining in a conventional mortgage. Since this tactic has been around for a long time, it's not quite in the category of the shenanegans they were pulling a few years back, so has a lot more potential to still be an option. I did this in for my first house in '93 and again in '99 when I moved to a larger home after getting married. It allowed me to get into both houses with less than 20% down and not pay PMI. This way neither loan is above 80% so you don't have to pay PMI. The interest on the second loan will be higher, but usually only a few percent, and is thus usually a fraction of what you were paying for the PMI. (and it's deductible from your taxes) If you've been making your payments on time and have a good credit rating, then you might be able to find someone who would offer you such a deal. You might even be able to get a rate for your primary that is down in the low 4's depending on where rates are today and what your credit rating is like. If you can get the main loan low enough, even if the other is like say 7%, your blended rate may still be right around 5% If you can find a deal like this, it's also great material to use to negotiate with your current lender \"\"either help me get the PMI off this loan or I'm going to refinance.\"\" Then you can compare what they will offer you with what you can get in a refinance and decide what makes the most sense for you. On word of warning, when refinancing, do NOT get sucked into an adjustable rate mortgage. If you are finding life 'tight' right now with house payments and all, the an ARM could be highly seductive since they often offer a very low initial rate.. however then invariably adjust upwards, and you could suddenly find yourself with a monster payment far larger than what you have now. With low rates where they are, getting a conventional fixed rate loan (or loans in the case of the tactic being discussed here) is the way to go.\"" }, { "docid": "246882", "title": "", "text": "I would say generally, the answer is No. There might be some short term relief to people in certain situations, but generally speaking you sign a contract to borrow money and you are responsible to pay. This is why home loans offer better terms then auto loans, and auto loans better than credit cards or things like furniture. The better terms offer less risk to the lender because there are assets that can be repossessed. Homes retain values better than autos, autos better than furniture, and credit cards are not secured at all. People are not as helpless as your question suggests. Sure a person might lose their high paying job, but could they still make a mortgage payment if they worked really hard at it? This might mean taking several part time jobs. Now if a person buys a home that has a very large mortgage payment this might not be possible. However, wise people don't buy every bit of house they can afford. People should also be wise about the kinds of mortgages they use to buy a home. Many people lost their homes due to missing a payment on their interest only loan. Penalty rates and fees jacked up their payment, that was way beyond their means. If they had a fixed rate loan the chance to catch up would have not been impossible. Perhaps an injury might prevent a person from working. This is why long term disability insurance is a must for most people. You can buy quite a bit of coverage for not very much money. Typical US households have quite a bit of debt. Car payments, phone payments, and either a mortgage or rent, and of course credit cards. If income is drastically reduced making all of those payments becomes next to impossible. Which one gets paid first. Just this last week, I attempted to help a client in just this situation. They foolishly chose to pay the credit card first, and were going to pay the house payment last (if there was anything left over). There wasn't, and they are risking eviction (renters). People finding themselves in crisis, generally do a poor job of paying the most important things first. Basic food first, housing and utilities second, etc... Let the credit card slip if need be no matter how often one is threatened by creditors. They do this to maintain their credit score, how foolish. I feel like you have a sense of bondage associated with debt. It is there and real despite many people noticing it. There is also the fact that compounding interest is working against you and with your labor you are enriching the bank. This is a great reason to have the goal of living a debt free life. I can tell you it is quite liberating." }, { "docid": "40761", "title": "", "text": "The stock market was already reaching highs way before trump took office. Fortune 500s and Dow were already reporting record profits every quarter before trump. The dozens of new retail/food/medial/plaza buildings to open this year in my city were already being built and going to open. The expansion on our already brand new hospital was already happening. The new school and medical university has nothing to do with trump. No i don't think the new 10,000 home development site approval has anything to do with trump. Trump literally has done nothing so far but win the election. These things were happening already. Employers are already desperate for employees I don't think anyone is hiring more because trump is in office when they were hiring already." }, { "docid": "123181", "title": "", "text": "\"&gt;\"\"Engineers cant even reliably get a robot to recognize an object like a chair.\"\" My first thought in response to your statement was that you were wrong, but then I started thinking about the very wide variety of what we consider to be a chair and I realized that thats actually quite true, especially if you include modernist or upholstered chairs in the set of chairs . However, I think thats a bad example, because not being able to do that particular task reliably and rapidly for another five years or so without spending a huge amount of money isn't going to save any particular jobs that I know of. Because we're not at the stage yet where we need to solve those particular kinds of problems. The kinds of machine vision problems that are impacting jobs are much more mundane and much easier to solve. For example, distinguishing between kinds of fruit, produce, etc. in a grocery, or determining visually if fruit is ripe, etc, in various agricultural applications.\"" }, { "docid": "453184", "title": "", "text": "I was too. My fiance is an international student and for a while we were really concerned about the implications of a Trump presidency on her getting a visa. I aired my grievances on T_D and was banned. What I've come to understand is that citizenship is a privilege, not a right. As part of the research I took part in while getting my Economics degree, we established mass immigration as a large, significant causal factor in the immergence of the income stagnation and the resulting rise of consumer debt levels and financial innovation that lead the the '09 crisis. The issue with T_D is the massive brigading and threats users and mods get. T_D would be a non-stop dumping ground of concern trolling and leftist hatred if the policies they have in place now were not in effect. That being said, I myself am proof that the policies and the mods that enforce them are much more forgiving than most subs on on this site. Try /r/askthe_donald" }, { "docid": "254684", "title": "", "text": "\"I can answer this question for my jurisdiction (Florida, USA), because I lived through it. My Dad (\"\"Alice\"\") passed away in 2008, just as the housing crisis was starting to heat up. What happened to the Mortgage? My Dad had a will in place. It was an old will (from the 1980's), but never-the-less, a will. We had to provide paperwork to the court that my Mom had already passed away, and my oldest brother was living out-of-state (he would have been the executor, otherwise). With the proper paperwork, I became the Executor, and the property passed in to probate. At this point, the \"\"Estate\"\" was responsible for the house and the mortgage on it (meaning me, as I was the Executor). We decided to sell the house, so we hired a realtor, and set an asking price about $40k over what was owed on it. As we waited for it to sell, I had to make monthly mortgage payments, and payments to the HOA (otherwise the HOA could put a lien on the property, making it more difficult to sell, should we find a buyer). Is it Automatically Transferred? In most jurisdictions, I would say not \"\"automatic\"\". I definitely had get an estate lawyer and file the proper legal paperwork with the local county courthouse. Some states have an easier probate process (\"\"Summary Administration\"\" in Florida), that eases the requirements for small estates. Is Bob expected to pay it off all at once? No, the mortgage holder was happy for me to make payments (out of other estate assets) in lieu of my Dad. The were earning interest, after all. This is probably true in most cases. Can the House be Foreclosed on? Yes. In our case, being 2008, we had a hard time selling the property. The asking price quickly went from $40k over what was owed, to $20k over, to $10k over, then to being equal to the mortgage value. Finally, I approached the bank about options. They suggested a \"\"Deed in Lieu of Foreclosure\"\" process. It was easier for us, and the bank had to pay less lawyers and such. Otherwise, a \"\"Deed in Lieu\"\" is effectively the same as a Foreclosure. At that point, we stopped making payments. Eventually, me and all my siblings (the \"\"heirs\"\") had to sign the proper paperwork giving the house over to the bank. In our case, the bank did not pursue us (or rather, the Estate) for the difference between final (auction) sale price and the mortgage balance (it was an FHA loan, so the US Government wound up picking up the difference). From what I understand, this could have happened, and we would have wound up with basically nothing out of the Estate. Can the Lender Force the Sale? I can't give a definite answer on this, but it probably depends. If you don't pay? Yes they sure can--it's usually part of the standard mortgage contract! I see 2 other options:\"" }, { "docid": "153633", "title": "", "text": "A wal-mart successfully unionized in Quebec years ago, shortly after, wal-mart shut the store down. They're so anti-union, they'll cut off the entire revenue source instead of make slightly less money due to slightly better salaries being paid. There's a reason I never shop at wal-mart, it's a despicable company. http://www.cbc.ca/news/business/story/2005/02/09/walmart-050209.html" }, { "docid": "37823", "title": "", "text": "What sort of emergency requires payment up front for which 2-3 days processing of a stock sale would pose a problem? In my case, the sudden and unexpected death of my wife. Back in 2011, my wife was struck and killed in a traffic incident. I had to immediately (not in 2 - 3 days) cover 50% of the entire costs of the funeral. The balance was due shortly after, though I now forget if the balance was due in 7 days or in 30. I suspect the latter. The life insurance paid out in approximately 4 months for this simple case. Even if your mortgage is insured, you still have to pay the entire balance, along with living expenses, until the paperwork is resolved. And, again in simple cases, assume this will take months rather than days or weeks. My point is, the funeral is only one of the expenses you'll have to cover in such a situation, though generally you'll have sufficient lead time for the other expenses, where your investments would likely be sufficiently liquid. Yes, a credit card would (and did) help in this situation, but if you have no credit card (as your question poses), you need ready access to thousands of dollars to cover this sort of eventuality. My bank told me that many people in such a situation have to take out an emergency loan the very day their spouse dies. Let me assure you this would be... emotionally difficult. Funerals vary widely in price. The Motley Fool indicates the median cost of a funeral with a vault was $8,343 in 2014. Crematory fees, a headstone, flowers, food, obituaries, all add to this cost. My total cost was closer to three times the median, though some of the expenses (headstone, primarily) came later. I'm sure I could have gone for a cheaper funeral, though it's hard to make rational economic decisions at that sort of time. I don't recall the exact amount I had to put down, but it was somewhere around $6000 - $8000. (No need to leave a comment expressing condolences; thanks, but I've already had plenty and now my goal is to help share knowledge. :) )" }, { "docid": "426215", "title": "", "text": "\"Understand your own risk tolerance and discipline. From Moneychimp we can see different market results - This is a 15 year span, containing what was arguably one of the most awful decades going. A full 10 year period with a negative return. Yet, the 15 year return was a 6.65% CAGR. You'd net 5.65% after long term cap gains. Your mortgage is likely costing ~4% or 3% after tax (This is not applicable to my Canadian friends, I understand you don't deduct interest). In my not so humble opinion, I'd pay off the highest rate debts first (unlike The David followers who are happy to pay off tens of thousands of dollars in 0% interest debt before the large 18% debt) and invest at the highest rate I'd get long term. The problem is knowing when to flip from one to the other. Here's food for thought - The David insists on his use of the 12% long term market return. The last 100 years have had an average 11.96% return, but you can't spend average, the CAGR, the real compound rate was 10.06%. Why would he recommend paying off a sub 3% loan while using 12% for his long term planning (All my David remarks are not applicable to Canadian members, you all probably know better than to listen to US entertainers)? I am retired, and put my money where my mouth is. The $200K I still owe on my mortgage is offset by over $400K in my 401(k). The money went in at 25%/28% pretax, has grown over these past 20 years, and comes out at 15% to pay my mortgage each month. No regrets. Anyone starting out now, and taking a 30 year mortgage, but putting the delta to a 15 year mortgage payment into their 401(k) is nearly certain to have far more in the retirement account 15 years hence than their remaining balance on the loan, even after taxes are considered. Even more if this money helps them to get the full matching, which too many miss. All that said, keep in mind, the market is likely to see a correction or two in the next 15 years, one of which may be painful. If that would keep you up at night, don't listen to me. If a fixed return of 4% seems more appealing than a 10% return with a 15% standard deviation, pay the mortgage first. Last - if you have a paid off house but no job, the town still wants its property tax, and the utilities still need to be paid. If you lose your job with $400K in your 401(k)/IRA but have a $200K mortgage, you have a lot of time to find a new job or sell the house with little pressure from the debt collectors. (To answer the question in advance - \"\"Joe, at what mortgage rate do you pay it off first?\"\" Good question. I'd deposit to my 401(k) to grab matching deposits first, and then if the mortgage was anywhere north of 6%, prioritize that. This would keep my chances at near 100% of coming out ahead.)\"" }, { "docid": "385251", "title": "", "text": "I would not recommend borrowing your 401(k) money to buy a house for two reasons: When you borrow money from your 401(k), it is no longer invested. Yes, you pay yourself interest, but you miss out on the investment gains for the life of the loan. If you leave your job, the loan is due in full shortly thereafter. If you do not pay it back, you are hit with taxes and penalties. If I were you, I would roll it over into an IRA for the reasons you mentioned." }, { "docid": "26665", "title": "", "text": "\"This is the best tl;dr I could make, [original](https://aeon.co/essays/how-work-changed-to-make-us-all-passionate-quitters) reduced by 96%. (I'm a bot) ***** &gt; In doing so for work, they developed a metaphor - that every person should think of herself as a business, the CEO of Me, Inc. The metaphor took off, and has had profound implications for how workplaces are run, how people understand their jobs, and how they plan careers, which increasingly revolve around quitting. &gt; In the US especially, there is a strong cultural consensus that people should feel passion for their work, and work hard. &gt; She would tell an executive she was trying to recruit that if they no longer felt any passion for their work, then they were harming all their colleagues at work, who now had to work with someone who no longer enjoyed work to its utmost. ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/6qge9i/good_jobs_used_to_be_ones_with_a_good_salary/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ \"\"Version 1.65, ~179016 tl;drs so far.\"\") | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr \"\"PM's and comments are monitored, constructive feedback is welcome.\"\") | *Top* *keywords*: **work**^#1 **job**^#2 **company**^#3 **market**^#4 **quit**^#5\"" }, { "docid": "142960", "title": "", "text": "To a mortgage lender, it appears that you have a temporary contract (perhaps extending for nine more months) with a agency that supplies workers to companies that need temporary help. You have been placed currently with a company and are making good money, but that job might disappear soon and then you will have no income while your recruiter tries to find you another assignment. How will you make your mortgage payments then? The recruiter agency's contract with your current company probably has clauses to the effect that the company agrees to not offer you a permanent job unless it pays a head-hunter's fee to the recruiter agency. Your contract with the recruiter agency also likely has clauses to the effect that if the company where you have been placed offers you a permanent job, you must pay the recruiter company a fee (typically one or two months of salary) to the recruiter agency as compensation for releasing you from your current contract (unless the company hiring you pays the head-hunter's fee). This is why the company where you are working right now wants to wait until after your contract with the recruiter company ends before making you an offer of permanent employment. Be aware that sometimes such clauses extend out to three months after the ending date of your contract with the recruiter company. As far as the condo is concerned, unless there is a specific one that you absolutely must have because it has an ocean view or other desirable properties, you may well find that another condo in the same complex is available some months from now. If you are lucky, it may well have an acceptable ocean view. If you are even luckier, it may be the condo that you absolutely must have which has remained unsold all that time -- as you said, the economy is crappy -- and you will be able to buy it for a lower price from an owner getting desperate to make a sale. To answer your question: is there any way around this? My recommendation is to simply wait out the end of your recruiter agency contract and get a permanent job with the company where you have been placed. Then there are no issues. If not, get your company to make a written offer of a permanent job starting nine months from now and hope that this (together with your current employment) impresses your bank into lending you money. This might not work, though. In the early 1970s, one of my friends was offered a job at a large aerospace company which lost a major contract in the interim period between offer and joining. My friend showed up for work on the day he was supposed to start, and instead of being processed through HR etc, his job was terminated on the spot, he was paid one day's salary, and shown the door. Times were crappy then too. If this does not work, get your company to offer you a permanent job right away, pay off the recruiter company yourself, and then go to the bank." }, { "docid": "361858", "title": "", "text": "\"I've never heard of rent quoted per week. Are you in the US? In general, after the down payment, one would hope to take the rent, and be able to pay the mortgage, tax, insurance, and then have enough left each year to at least have a bit of emergency money for repairs. If one can start by actually pocketing more than this each year, that's ideal, but to start with a rental, and only make money \"\"after taxes\"\" is cutting it too close in my opinion. The 19 to 1 \"\"P/E\"\" appears too high, when I followed such things I recall 12 or under being the target. Of course rates were higher, and that number rises with very low rates. In your example, a $320K mortgage at 4% is $1527/mo. $400/wk does not cut it.\"" }, { "docid": "103830", "title": "", "text": "Nobody can predict the affects of Brexit but it is wise to consider them. We saw the pound weaken after the vote to leave and it is possible the pound will weaken further after Brexit and this devaluation could be quite dramatic. If that happens it is likely to increase inflation, UK inflation has gone from under 1% around the time of the referendum to 3% today and it could well go higher. https://www.rateinflation.com/inflation-rate/uk-historical-inflation-rate If inflation continues to increase, the Bank of England is likely to put up interest rates, as it has historically done this to hedge against inflation. We have been living in a world of artificially low interest rates since the global crash of 2008 as the BoE has tried to stimulate recovery with lower rates. The rates cannot continue at this level if inflation starts to rise. http://www.thisismoney.co.uk/money/news/article-2387744/Base-rate-vs-inflation-chart-How-tell-things-really-got-better.html That in turn will put up mortgage rates. So for example if you have a £100k mortgage at 3.92% (currently this is a reasonable rate to have) your repayments will be £523 a month. If your mortgage rate goes up to say 7% then your repayments are £707 a month, if it goes up to 10% then it's £909 a month and so on. There is a mortgage calculator you can use to try playing with different amounts here: https://www.moneysavingexpert.com/mortgages/mortgage-rate-calculator My advice would therefore be try to get as small a mortgage as you can and make sure you can afford it quite comfortably, in case rates go up and you need to find a few hundred pounds a month extra. There are other risks from Brexit as well, house prices could fall as people decide not to buy properties due to excessive interest rates! Overall nobody knows what will happen but it is good to be planning ahead for all eventualities. ** I am not a financial advisor, this advice is given in good faith but with no financial qualification." } ]

[ { "docid": "152027", "title": "", "text": "It seems that you're complicating things quite a bit. Why would you not create a business entity, open one or more bank accounts for it, and then have the money wired into those accounts? If you plan on being a company then set up the appropriate structure for it. In the U.S., you can form an S-corporation or an LLC and choose pass-through taxation so that all you pay is income tax on what you receive from the business as personal income. The business itself would not have tax liability in such a case. Co-mingling your personal banking with that of your business could create real tax headaches for you if you aren't careful, so it's not worth the trouble or risk." } ]

[ { "docid": "282028", "title": "", "text": "\"The \"\"hidden\"\" fees in any transfer are usually: Foreign exchange transfer services are usually the cheapest option for sending money abroad when a conversion is involved. They tend to offer ways to get the money to or from them cheaply or for free and they typically offer low or no fees plus much better exchange rates than the alternatives. My preferred foreign exchange service is XE Trade. It looks like they support CAD to ZAR transfers so you might check them out. In my experience, they have not set a minimum on the amount I send although it does impact the exchange rate they will offer. The rate is still better than other alternatives available to me though. Note that for large enough transfers, the exchange rate difference will dominate all other costs. For example, if you transfer $10,000 and you pay $100 for the transfer plus $50 in wire fees ($150 in fees) but get a 2% better exchange rate than a \"\"free\"\" service, you would save $50 by choosing the non free service.\"" }, { "docid": "566459", "title": "", "text": "\"Your co-workers all had kids when they where 16-19? What sort of place are you working?!? In my career, people under 30 with kids were very much the minority. I've mostly worked in fortune 500 companies and your description sounds really foreign to me. Most of my coworkers started having kids in their early to mid 30s. I'm 35 and childless and not singled out by that at all. I don't see why being \"\"gym fit\"\" or having a college degree should entitle you special treatment. In my experience, neither are good indicators of a person's ability to perform. What it all comes down to is fit; \"\"job fit\"\" that is. Why are you still there? Are you trying to leave? Which part of the world are you in? In the end companies are about teams, merit is defined by who can do something the best while fitting into the company's culture and team. Just because you're the more technically savvy, doesn't mean you the best person for the job. When you're running a business there is a lot that must get considered before promoting someone. Remember, in companies, promotions are usually seized and rarely given. I mean, if you're not able to seize the promotion, why would be considered worthy of it?\"" }, { "docid": "344290", "title": "", "text": "foreign income, transfer it to my savings account in India Yes you can transfer to India. The right account would be NRO/NRE. As an NRI one should not hold a regular savings account. forum that foreign income is not taxable unless used to buy stocks, fds etc If you are an NRI, income earned outside of India is not taxable in India. However any income you generate in India is taxable, i.e. interest income, gains from shares etc. Do we need to pay taxes for the money transferred No tax if you are an NRI even if you transfer funds to India. Taxation does not depend on whether or not you transfer the money, it depends on your status used to pay home EMIs or principle amount? You can use the money for what ever you like." }, { "docid": "368938", "title": "", "text": "\"Answers: 1: No, Sections 1291-1298 of the IRC were passed in the Reagan adminstration. 2: Not only can a foreign company like a chocolate company fall afoul of the definition of PFIC because of the \"\"asset test\"\", which you cite, but it can also be called a PFIC because of the \"\"income test\"\". For example, I have shares in a development-stage Canadian biotech which is considered a PFIC because it has no income at all, except for a minor amount of bank interest on its working capital. This company is by no means \"\"passive\"\" (it has run 31 clinical trials in over 1100 human research subjects, burning $250M of investor's money in the process) nor is it an \"\"investment company\"\", but the stupid IRS considers it to be a \"\"passive foreign investment company\"\"! The IRS looks at it and sees only the bank account, and assumes it is a foreign shell corporation set up to shield the bank interest from them. 3: Yes, a foreign mutual fund is EXACTLY what congress intended to be a PFIC when passed IRC 1291-1298. (Biotechs, candy factories, ect got nailed as innocent bystanders.) Note that if you hold a US mutual fund then every year you'll get a form 1099 in the mail. The 1099 will report your share of the mutual fund's own income and capital gains, which you must report on your taxes. (You can also have capital gains from selling your shares of the mutual fund, but that's a different thing.) Now suppose that there was no PFIC law. Then the US investors in the mutual fund would do better if the mutual fund were in a foreign country, for two reasons: a) The fund would no longer distribute 1099's. That means the shareholders wouldn't have to pay tax every year on their proportions of the fund's own income/gains. The money that would have sooner gone to the IRS can sit around for years earning interest. b) The fund could return profits to shareholders exclusively through capital gains rather than dividends, thus ensuring that all of the investors' income on the fund would be taxed at <15%-20% rather than up to 39%. The fund could do this by returning cash to shareholders exclusively through buybacks. However, the US mutual fund industry doesn't want to move the industry to Canada, and it only takes a few newspaper articles about a foreign loophole to make congress spring to action. 4) It depends. If you have a PEDIGREED QEF election in place (as I do for my biotech shares) then form 8621 takes a few minutes by hand. However, this requires both the company and the investor to fully cooperate with congress's vision for PFICs. The company cooperates by providing a so-called \"\"PFIC annual information sheet\"\", which replaces the 1099 form for a US mutual fund. The investor cooperates by having a \"\"QEF election\"\" in place for EACH AND EVERY TAX YEAR in which he held the stock and by reporting the numbers from the PFIC annual information sheet on his return. (Note that the QEF election persists once made, until revoked. There are subtleties here that I am glossing over, since \"\"deemed sale\"\" elections and other means may be used to modify a share's holding period to come into compliance.) Note that there is software coming out to handle PFICs, and that the software makers will already run their software to make your form 8621 for $75 or so. I should also warn you that the blogs of tax accountants and tax lawyers all contradict each other on the basic issue of whether you can take capital losses on PFICs for which you have no form 8621 elections. (See section 2.3 of my notes http://tinyurl.com/mh9vlnr for commentary on this mess.) I do not know if the software people will tell you which elections are best made on form 8621, though, or advise you if it's time to simply dump your investment. The professional software is at 8621.com, and the individual 8621 preparation is at http://expattaxtools.com/?page_id=242. BTW, in case you're interested, I wrote up a very careful analysis of how to deal with the PFIC situation for the small biotech I invested in in certain cases. It is posted http://tinyurl.com/mh9vlnr. (For tax reasons it was quite fortunate that the share price dipped to near an all-time low on Jan 1, 2015, making the (next) 2015 tax year ripe for a so-called \"\"deemed sale\"\" election. This was only possible because the company provides the necessary \"\"PFIC annual information statements\"\", which your chocolate factory may or may not do.)\"" }, { "docid": "277245", "title": "", "text": "This would depend on what transfer methods your Forex broker allows. Most will allow you to have a check or wire transfer sent...best thing would be to call/email your broker and ask how to get the money into your account. Keep in mind, many brokers will force you to withdraw using the same funding method you used to deposit, up to the amount of the deposit. For example, if I fund my Forex account with $500 on a credit card and make $500 profit, I now have $1,000 sitting in my Forex account. The broker will force me to withdraw $500 as a credit to my credit card before allowing me to use another withdrawal method. This is an anti-money laundering precaution." }, { "docid": "530175", "title": "", "text": "There are several ways to minimize the international wire transfer fees: Transfer less frequently and larger amounts. The fees are usually flat, so transferring larger amounts lowers the fee percentage. 3% is a lot. In big banks, receiving is usually ~$15. If you transfer $1000 at a time, its 1.5%, if you transfer $10000 - it's much less, accordingly. If you have the time - have them send you checks (in US dollars) instead of wire transferring. It will be on hold for some time (up to a couple of weeks maybe), but will be totally free for you. I know that many banks have either free send and/or receive. I know that ETrade provides this service for free. My credit union provides if for free based on the relationship level, I have a mortgage with them now, so I don't pay any fees at all, including for wire transfer. Consider other options, like Western Union. Those may cost more for the sender (not necessarily though), but will be free for the receiver. You can get the money in cash, or checks, which you can just deposit on your regular bank account. For smaller amounts, it should be much cheaper than wire transfer, for example - sending $500 to India costs $10, while wire transfer is $30." }, { "docid": "417769", "title": "", "text": "How do I directly get my Freelancing amount in my Axis bank account? Do I need to inform my Bank before receiving any such payment? Yes you can get it directly into your Axis Bank Account. You would need to inform your client your Bank Account Number, Bank Name and Address and Swift BIC or IFSC Code [Axis Bank website or Branch can tell you]. You can receive credits in Euro's. Upon receipt Axis Bank will automatically convert this into Rupees using standard rate. Your Bank [Axis] may also charge some Bank fees for the wire transfer. How do I pay tax for this extra income in India? You would need to treat this as income and add it to total income including salary and calculate tax accordingly. You can pay taxes online using Income Tax India website. You can also approach a CA who would do the tax computation, paying taxes and filing returns for as little as Rs 1000 - 2000/- Edit: IBAN is International Bank Account Number. Explain to you client that India does not subscribe to IBAN. Its right now only used by Europe and Australia. Give you normal Bank Account Number. Please call up your Bank / walk into your Branch to get the SWIFT BIC. It will be something like this http://www.theswiftcodes.com/india/page/3/" }, { "docid": "105165", "title": "", "text": "\"Excellent question, though any why question can be challenging to answer because it depends on the financial products in question. At least, I haven't seen many target date retirement funds that include a high percent of foreign stocks, so below explains the ones I've seen which are primarily US stocks. The United States (before the last twenty years) has been seen as a country of stability. This is not true anymore, and it's difficult for my generation to understand because we grew up in the U.S.A being challenged (and tend to think that China and India have always been powers), but when we read investors, like Benjamin Graham (who had significant influence with Warren Buffett), we can see this bias - the U.S.A to them is stable, and other countries are \"\"risky.\"\" Again, with the national debt and the political game in our current time, it does not feel this way. But that bias is often reflect in financial instruments. The US Dollar is still the reserve currency, though it's influence is declining and I would expect it to decline. Contrary to my view (because I could be wrong here) is Mish, who argues that no one wants to have the reserve currency because having a reserve currency brings disadvantages (see here: Bogus Threats to US Reserve Currency Status: No Country Really Wants It!; I present this to show that my view could be wrong). Finally, there tends to be the \"\"go with what you know.\"\" Many of these funds are managed by U.S. citizens, so they tend to have a U.S. bias and feel more comfortable investing their money \"\"at home\"\" (in fact a famous mutual fund manager, Peter Lynch, had a similar mentality - buy the company behind the stock and what company do we tend to know best? The ones around us.). One final note, I'm not saying this mentality is correct, just what the attitude is like. I think you may find that younger mutual fund managers tend to include more foreign stocks, as they've seen that different world.\"" }, { "docid": "132693", "title": "", "text": "First, you'll need to find a service that can handle transferring that amount of money, whether it's using a bank, or wire transferring service. Any major Wall Street bank (Wells Fargo, Chase, Bank of America, etc.) should be able to handle it. You could also use services such as Western Union. As for your legal and tax obligations, according to Western Union: Individuals in Canada and the U.K. don’t have any tax considerations, unless international payments are received as income or in the form of capital gains. Only then must they report it on their income taxes, says Ilyas Patel, director at Ilyas Patel Chartered Certified Accountants based in Preston, U.K., and the director of Tax Expert, a tax advice website. To that end, when considering their tax obligations, individuals should take care to look into the reporting requirements on foreign income or gifts ranging up to a certain amount. For example, in the U.S., the Internal Revenue Service (IRS) requires individuals who receive more than $100,000 U.S. dollars from a foreign source to report it on a Form 3520. “You may not owe taxes on the money, but it informs the IRS that you received it,” Gragg says, stressing the importance of consulting with a professional. “They’re looking for certain terrorist activities and other illegal activity.” Due to the large sum of money your transferring, it would be in your best interest to speak with a banker (maybe even a lawyer or CPA) about this." }, { "docid": "355796", "title": "", "text": "Can we wire transfer money from my NRE account to USA checking account? Yes you can Is there any restrictions for transferring money? Nothing in India Hopefully someone else will answer the US side of questions." }, { "docid": "474296", "title": "", "text": "\"Spend your first 50 euros on research materials. Warren Buffett got started as a boy by reading every book in the Library of Congress on investing and stock market analysis. You can research the company filings for Canadian companies at http://www.sedar.com, U.S companies at http://www.edgar.com, and European companies at https://www.gov.uk/government/organisations/companies-house. Find conflicting arguments and strategies and decide for yourself which ones are right. The Motley Fool http://www.fool.ca offers articles on good stocks to add to your portfolio and why, as well as why not. They provide a balanced judgement instead of just hype. They also sell advice through their newsletter. In Canada the Globe & Mail runs a daily column on screening stocks. Every day they present a different stock-picking strategy and the filters used to reach their end list. They then show how much that portfolio would have increased or decreased as well as talking about some of the good & bad points of the stocks in the list. It's interesting to see over time a very few stocks show up on multiple lists for different strategies. These ones in my opinion are the stocks to be investing in. While the Globe's stock picks focus on Canadian and US exchanges, you might find the strategies worthwhile. You can subscribe to the digital version at http://www.theglobeandmail.com Once you have your analytical tools ready, pick any bank or stock house that offers a free practice account. Use that account and their screening tools to try out your strategies and see if you can make money picking stocks. My personal stock-picking strategy is to look for companies with: - a long uninterrupted history of paying dividends, - that are regularly increased, - and do not exceed the net profit per share of the company - and whose share price has a long history of increasing These are called unicorn companies, because there are so very few of them. Another great read is, \"\"Do Stocks Outperform Treasury Bills?\"\" by Hendrik Bessembinder. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2900447 In this paper the author looks at the entire history of the U.S. stock universe and finds that less than 4% of stocks are responsible for 100% of the wealth creation in the U.S. stock market. He discusses his strategies for picking the winners, but it also suggests that if you don't want to do any research, you could pick pretty much any stock at random, short it, and wait. I avoid mutual funds because they are a winner only for the fellas selling them. A great description on why the mutual fund industry is skewed against the investor can be found in a book called \"\"The RRSP Secret\"\" by Greg Habstritt. \"\"Unshakeable\"\" by Tony Robbins also discusses why mutual funds are not the best way to invest in stocks. The investor puts up 100% of the money, takes 100% of the risk, and gets at best 30% of the return. Rich people don't invest like that.\"" }, { "docid": "541682", "title": "", "text": "If you are paid by foreigners then it is quite possible they don't file anything with the IRS. All of this income you are required to report as business income on schedule C. There are opportunities on schedule C to deduct expenses like your health insurance, travel, telephone calls, capital expenses like a new computer, etc... You will be charged both the employees and employers share of social security/medicare, around ~17% or so, and that will be added onto your 1040. You may still need a local business license to do the work locally, and may require a home business permit in some cities. In some places, cities subscribe to data services based on your IRS tax return.... and will find out a year or two later that someone is running an unlicensed business. This could result in a fine, or perhaps just a nice letter from the city attorneys office that it would be a good time to get the right licenses. Generally, tax treaties exist to avoid or limit double taxation. For instance, if you travel to Norway to give a report and are paid during this time, the treaty would explain whether that is taxable in Norway. You can usually get a credit for taxes paid to foreign countries against your US taxes, which helps avoid paying double taxes in the USA. If you were to go live in Norway for more than a year, the first $80,000/year or so is completely wiped off your US income. This does NOT apply if you live in the USA and are paid from Norway. If you have a bank account overseas with more than $10,000 of value in it at any time during the year, you owe the US Government a FinCEN Form 114 (FBAR). This is pretty important, there are some large fines for not doing it. It could occur if you needed an account to get paid in Norway and then send the money here... If the Norwegian company wires the money to you from their account or sends a check in US$, and you don't have a foreign bank account, then this would not apply." }, { "docid": "18349", "title": "", "text": "\"(Note: out of my depth here, but in case this helps...) While not a direct answer to your question, I'll point out that in the inverse situation - a U.S. investor who wants to buy individual stocks of companies headquartered outside US - you would buy ADRs, which are $-denominated \"\"wrapper\"\" stocks. They can be listed with one or multiple brokerages. One alternative I'd offer the person in my example would be, \"\"Are you really sure you want to directly buy individual stocks?\"\" One less targeted approach available in the US is to buy ETFs targeted for a given country (or region). Maybe there's something similar there in Asia that would eliminate the (somewhat) higher fees associated with trading foreign stocks.\"" }, { "docid": "361580", "title": "", "text": "Puerto Rico: Last I checked, the Puerto Rico banking system wasn't materially different than working within the US - though some Continental US banks exclude US Territories like Guam and Puerto Rico or charge more when dealing with them. I'm not certain as to why. However, most banks don't see them any differently than a regular US bank. Regarding Wire Transfers (WT): $35 for an ad-hoc WT within the US and Puerto Rico is for the most part average. Wires cost money for the convenience of quick clearing and guaranteed funds. If you have a business/commercial account where you are doing this regularly and paying a monthly fee for a WT service, $10 - $15 each may be expected. I had a business account with US Bank where I paid $15 a month for a WT transfer service and reoccurring template (always went to the same account - AMEX in this case) and the transfers were only $15 each. But, a WT as a general rule, especially when it's only a once a month thing from a personal account, will cost around $25 - $35 in the US and Puerto Rico. As others have said, you can simply mail a personal check just as you would in the US. Many people choose to use Money Orders for Puerto Rico as they can be cashed at the post office (I believe there is an amount limit though). ACH: If you want even easier, I would use ACH. Banks in Puerto Rico use this ACH (Automatic Clearing House) system as we do in the Continental US. It will take a little longer than WT, but as you said - this is fine. Not all US Banks offer free ACH, but a number of them do. Last I checked, Citibank and USAA where among them. Banks like, BAC charges a small fee. Much smaller than a WT! This post may be useful to you: What's the difference between wire transfer and ACH?" }, { "docid": "593694", "title": "", "text": "\"1. What forms do I need to file to receive money from Europe None. Your client can pay you via wire transfer. They need to know your name, address, account number, and the name of your bank, its SWIFT number and its associated address. The addresses and names are required to make sure there are no typos in the numbers. 2. What forms do I need to file to pay people in Latin America (or any country outside the US) None. 1099s only need to be filled out when the contractor has a US tax ID. Make sure they are contractors. If they work for you for more than 2 years, that can create a problem unless they incorporate because they might look like \"\"employees\"\" to the IRS in which case you need to be reporting their identitites to the IRS via a W-8BEN form. Generally speaking any foreign contractor you have for more than 2 years should incorporate in their own country and you bill that corporation to prevent employee status from occurring. 3. Can I deduct payments I made to contractors from other countries as company expense Of course.\"" }, { "docid": "389848", "title": "", "text": "If possible, I would open a Canadian bank account with a bank such as TD Canada Trust. You can then have your payments wired into that account without incurring costs on receipt. They also allow access to their US ATM network via TD Bank without additional costs. So you could use the American Affiliate to pull the funds out via a US teller while only bearing the cost of currency conversion. If that option can't work then the best route would be to choose a US bank account that doesn't charge for incoming wire transfers and request that the money be wired to your account (you'll still get charged the conversion rate when the wire is in CAD and the account is in USD)." }, { "docid": "13582", "title": "", "text": "tl;dr: Be patient, money is probably sitting somewhere, and it will eventually be credited back to your account. I had a similar problem about 10 years ago. I sent an international wire transfer, from my own bank account in Germany to my bank account in Central America. I had done this before, and there had been no issues, but in this case, even though all the information was correct, the bank rejected the wire because it was above $10K, and in that case, the bank needs written proof from the owner of the receiving account (me) , and so didn't know where the funds were coming from. I had to call the local Sparkasse bank in Germany, as well as an intermediary bank in London to sort it all out, and in total, had to wait about 3-4 weeks to get the money back in my Sparkasse bank account. At one point I thought I may never see that money back, especially since there was an intermediary bank to deal with, but it all worked out in the end." }, { "docid": "324417", "title": "", "text": "\"**Reposted so you don't have to look at silly GIFs for 50% of the article.** Sophie is a physical penetration tester and information security consultant. She specializes in social engineering security assessments including physical, voice (vishing) and text (phishing). She consults in remediation and prevention of security incidents through creation of policy and procedures, as well as customized training for your individual office culture. Prior to working in infosec, Sophie was a journalist, photographer, and a mom. Hello! My name is Sophie and I break into buildings. I get paid to think like a criminal. Organizations hire me to evaluate their security, which I do by seeing if I can bypass it. During tests I get to do some lockpicking, climb over walls or hop barbed wire fences. I get to go dumpster diving and play with all sorts of cool gadgets that Q would be proud of. But usually, I use what is called social engineering to convince the employees to let me in. Sometimes I use email or phone calls to pretend to be someone I am not. Most often I get to approach people in-person and give them the confidence to let me in. My frequently asked questions include: What break-in are you most proud of? What have you done for a test that you were the most ashamed of? What follows is the answer to both of these questions. A few months ago, a client had hired me to test two of their facilities. A manufacturing plant, plus data center and office building nearby. First step: open source intelligence, or OSINT. I look at maps, satellite images, study what I can of their delivery and supply schedules, and so on. The manufacturing facility looked like a prison. No windows, heavy iron gates, no landscaping. Generally a monstrosity of architecture. This facility had armed guards, badge readers, biometric security controls and turnstiles at every entrance. I remember thinking, \"\"It's got to be hell to work in there. I wonder if I can use that…\"\" One thing was for sure… The chances of tailgating (following behind an employee with valid credentials) into this building were next to non-existent. I was going to have to get down and dirty with my social engineering. First stop: LinkedIn. Your LinkedIn is my best friend. The more information you have on your LinkedIn, the more options I have. I have several fake LinkedIn profiles that you are probably connected to. I scour profiles of employees who work at these facilities, and cross-reference them to other social media sites. And I find a lovely young woman who I'm going to call Mary. Mary was a brand-new hire working as an assistant at the manufacturing facility. Mary had a public Facebook account too. On Mary's public Facebook account, she documented all of her family's adventures. Side note: Now I know where Mary went to high school, her mother's maiden name, the names of her pets, etc. Answers to those \"\"security questions\"\" you use to reset your passwords are very easy to find if you aren't careful with that information. Not to mention that now I know where Mary works, where her kids go to school, where they vacation…I could go on. Scary stuff. This is not an advanced investigation. I'm not a private investigator and I don't have the resources of the NSA. But I can do a lot of damage with simple methods. Most notably to me, there were photos Mary posted of her time volunteering with a certain maternity support center. Her passion for children and caring new moms was very plain. So of course, I took advantage of it. For this assessment I played two roles. For the first, I spoofed my phone number to make it look like it was coming from the company's headquarters. I called the front desk of the manufacturing facility and was transferred to Mary. \"\"Hi Mary!\"\" I said, \"\"My name is Barbara.\"\" \"\"I am a project coordinator with facilities management. We are renovating a few of our facilities. We are sending an interior designer out to you tomorrow so she can put together proposals to update your space!\"\" Mary replied, \"\"Well that's great! But why the short notice?\"\" I could feel her getting suspicious, so I pulled out my trump card… *Sigh* \"\"Well Mary… You really should have heard from me sooner. I've just been so overloaded at work…I feel like I can't catch up, and to top it off the baby is due in 6 weeks. If my boss finds out I messed this up he's going to flip.\"\" I was really getting into this, voice shaking. (Yes, I know, I'm a terrible human being.) She cut me off, \"\"Oh hunny, hunny it's ok. We will work this out! Tell me about the baby! Is it your first? Boy or girl?!\"\" Our Mary was committed at this point. Not because she is stupid, but because she is a good person. She wanted to help me. We talked babies and birth plans for a while (never pick a pretext you can't speak about at length.) Mary took down the name of the \"\"designer\"\" who was coming by the next day and we said our goodbyes. Mary could have saved her company a lot of heartache by simply verifying that I was who I claimed to be. (Just to be clear here, I would never give out Mary's real identity. I'm not totally heartless. This could have happened to anyone. She has not been fired.) I showed up the next day as \"\"Claire\"\" with a fictional architecture firm that I had made business cards and a website for. My alter-ego Barb had done most of the leg work for me. When I arrived, Mary and her boss were waiting for me with smiles. I shook hands all around and handed them the business card I printed out the night before. I was given a visitor badge and the red carpet was rolled out. I gained rapport with the staff there by asking them to tell me what they wanted in an office space. They were so excited. I might have claimed to be on the team that put together the Google offices…(Yes, I am HORRIBLE. This is my inner demon child.) \"\"You want a standing desk? New chairs over here?! Ergonomic keyboards for everyone! Let's look at swatches!\"\" We became best buds. I was given complete and unaccompanied access to the facility where I stayed for several hours. I gained network access and stole several thousands of dollars in physical primitives by picking my way through cheap locks (credit to Deviant Ollam for the rad lockpicking animations.) This client had been pretty confident that I wouldn't get into either facility, much less be able to hit both in a short time span. So the timeline was left to my discretion, but it was assumed that I would need to fly to the area twice. I didn't see the need in burdening them with two round-trip expenses. I went back to Mary's office and said, \"\"Well I think I have what I need from here. How do I get to the office center?\"\" She looked at her watch and said, \"\"It's almost lunch time. I'll take you there!\"\" A whole group of us piled into the parking lot, and they took me to a nearby taco shop. That's right. My Marks took me to get tacos… I love my job. After lunch they drove me to the offices and a few of them came in with me to show me around. I took FOREVER looking around this office space, and eventually they said their goodbyes because they had to go back to work. They had a strict policy of escorting visitors. But I had been seen walking around with trusted insiders so no one questioned me. I was free to take my time. I made myself at home. My main objective at this site was to weasel my way into private corner offices. When I accomplished my goals, I tracked down my point of contact's office. This is the man who hired me in the first place. This is the best part of every job. Steve was there, hard at work when I disturbed his groove by knocking on the door. He glanced up, \"\"Hi there, can I help you?\"\" I smiled. \"\"Hi Steve! I'm Sophie from Sincerely Security. It's nice to meet you in-person!\"\" I will never forget the look on his face… Pure gold. \"\"Who?.... Wait, what? How? How did you get in here?!\"\" We stayed in his office and talked for a long time. I went over exactly the steps that could have prevented my success. First of all, the desire to help others is human and natural. We don't want to discourage that. Second, I'm sure they did have some sort of policy that required visitors to check in showing government issued identification, but they weren't following it. We also need to post by every computer, phone and door: \"\"TRUST, BUT VERIFY.\"\" An employee who does their homework can ruin my day. Third, if it seems too good to be true, it probably is. Is your company going to hire the team who designed Google's offices? Magic 8 ball says no. Lastly, the team who took me to the second location should have found someone else to escort me through the building. I've been doing this job for a couple years now, and almost every job is a variant of this story. Very rarely do I go through an entire assessment without some sort of social engineering. There are ways to protect yourself and your company from attacks like this. I think it starts by sharing stories like these, and educating and empowering each other to be vigilant.\"" }, { "docid": "29140", "title": "", "text": "\"If you still have affairs in Spain or you plan to visit regularly, I would advise against closing your account there unless it is expensive. I still have a bank account in the Netherlands and it simplifies at lot of things to have it. I would recommend you take enough money to get you going in the US with you but leave the rest in your bank account in Spain. Once you have opened a bank account in the US, use a foreign exchange transfer service like ofx, XE trade or Transferwise to transfer the money to yourself. In general, foreign exchange transfer services are the most cost effective way to transfer money internationally (much better than your own bank, Pay Pal, Western Union, wire transfers, etc). They are \"\"fast\"\" in that it can take less than a week to transfer money, but other methods are faster if time is of the essence.\"" } ]

[ { "docid": "582191", "title": "", "text": "You can open a self-employed 401k, here's an example. You can deposit up to 50K (including the personal cap and the profit sharing/matching portion)." } ]

[ { "docid": "319058", "title": "", "text": "\"In the UK Directgov don't specify anything more than \"\"records\"\", which leads me to think that a digital copy might be acceptable. With regards to bank statements, individuals (i.e. not self-employed, or owning a business) need to keep them for between 12 and 15 months after your tax return, depending on when you filed it. Source: Record keeping (individuals and directors) - Directgov\"" }, { "docid": "252843", "title": "", "text": "FICA taxes are separate from federal and state income taxes. As a sole proprietor you owe all of those. Additionally, there is a difference with FICA when you are employed vs. self employed. Typically FICA taxes are actually split between the employer and the employee, so you pay half, they pay half. But when you're self employed, you pay both halves. This is what is commonly referred to as the self employment tax. If you are both employed and self employed as I am, your employer pays their portion of FICA on the income you earn there, and you pay both halves on the income you earn in your business. Edit: As @JoeTaxpayer added in his comment, you can specify an extra amount to be withheld from your pay when you fill out your W-4 form. This is separate from the calculation of how much to withhold based on dependents and such; see line 6 on the linked form. This could allow you to avoid making quarterly estimated payments for your self-employment income. I think this is much easier when your side income is predictable. Personally, I find it easier to come up with a percentage I must keep aside from my side income (for me this is about 35%), and then I immediately set that aside when I get paid. I make my quarterly estimated payments out of that money set aside. My side income can vary quite a bit though; if I could predict it better I would probably do the extra withholding. Yes, you need to pay taxes for FICA and federal income tax. I can't say exactly how much you should withhold though. If you have predictable deductions and such, it could be lower than you expect. I'm not a tax professional, and when it comes doing business taxes I go to someone who is. You don't have to do that, but I'm not comfortable offering any detailed advice on how you should proceed there. I mentioned what I do personally as an illustration of how I handle withholding, but I can't say that that's what someone else should do." }, { "docid": "477476", "title": "", "text": "Welcome to the wonderful but oft confusing world of self-employment. Your regular job will withhold income for you and give you a W2, which tells you and the government how much is withheld. At the end of the year uber will give you and the government a 1099-misc, which will tell you how much they paid you, but nothing will be withheld, which means you will owe the government some taxes. When it comes to taxes, you will file a 1040 (the big one, not a 1040EZ nor 1040A). In addition you will file a schedule C (self-employed income), where you will report the gross paid to you, deduct your expenses, and come up with your profit, which will be taxable. That profit goes into a line in the 1040. You need to file schedule SE. This says how much self-employment tax you will pay on your 1099 income, and it will be more than you expect. Self employment tax is SS/Medicare. There's a line for this on the 1040 as well. You can also deduct half of your self-employment tax on the 1040, there's a line for it. Now, you can pay quarterly taxes on your 1099 income by filing 1040-ES. That avoids a penalty (which usually isn't that large) for not withholding enough. As an alternative, you can have your regular W2 job withhold extra. As long as you don't owe a bunch at tax time, you won't be a fined. When you are self-employed your taxes aren't as simple. Sorry. You can either spend some time becoming an expert by studying the instructions for the 1040, pay for the expensive version of tax programs, or hire someone to do it for you. Self-employed taxes are painful, but take advantage of the upsides as well. You can start a solo 401(k) or SEP IRA, for example. Make sure you are careful to deduct every relevant business expense and keep good records in case you get audited." }, { "docid": "433766", "title": "", "text": "First, request that you complete a tax return. On this tax return, you will complete both the employed and self employed sections. This will give you a total income and tax liability. You will already have paid some tax via PAYE, but you will have to pay additional tax for any other income. For future years there is the option, depending on amount, to collect extra tax through PAYE to cover the other earnings. If it is likely to be the same for the next few years, this may be a better option than paying a lump sum. The tax return is now mostly online, and not too bad if your affairs are otherwise simple. The hardest part will be keeping a good record of your other earnings. Remember that you have to keep these records for seven years in case HMRC ever want to audit them, and it's a good idea to have a separate account for the income, or some other way of easily identifying it." }, { "docid": "51086", "title": "", "text": "\"The primary tax-sheltered investing vehicles in Canada include: The RRSP. You can contribute up to 18% of your prior year's earned income, up to a limit ($24,930 in 2015, plus past unused contribution allowance) and receive an income tax deduction for your contributions. In an RRSP, investments grow on a tax-deferred basis. No tax is due until you begin withdrawals. When you withdraw funds, the withdrawn amount will be taxed at marginal income tax rates in effect at that time. The RRSP is similar to the U.S. \"\"traditional\"\" IRA, being an individual account with pre-tax contributions, tax-deferred growth, and ordinary tax rates applied to withdrawals. Yet, RRSPs have contribution limits higher than IRAs; higher, even, than U.S. 401(k) employee contribution limits. But, the RRSP is dissimilar to the IRA and 401(k) since an individual's annual contribution allowance isn't use-it-or-lose-it—unused allowance accumulates. The TFSA. Once you turn 18, you can put in up to $5,500 each year, irrespective of earned income. Like the RRSP, contribution room accumulates. If you were 18 in 2009 (when TFSAs were introduced) you'd be able to contribute $36,500 if you'd never contributed to one before. Unlike the RRSP, contributions to a TFSA are made on an after-tax basis and you pay no tax when you withdraw money. The post-tax nature of the TFSA and completely tax-free withdrawals makes them comparable to Roth-type accounts in the U.S.; i.e. while you won't get a tax deduction for contributing, you won't pay tax on earnings when withdrawn. Yet, unlike U.S. Roth-type accounts, you are not required to use the TFSA strictly for retirement savings—there is no penalty for pre-retirement withdrawal of TFSA funds. There are also employer-sponsored defined benefit (DB) and defined contribution (DC) retirement pension plans. Generally, employees who participate in these kinds of plans have their annual RRSP contribution limits reduced. I won't comment on these kinds of plans other than to say they exist and if your employer has one, check it out—many employees lose out on free money by not participating. The under-appreciated RESP. Typically used for education savings. A lifetime $50,000 contribution limit per beneficiary, and you can put that all in at once if you're not concerned about maximizing grants (see below). No tax deduction for contributions, but investments grow on a tax-deferred basis. Original contributions can be withdrawn tax-free. Qualified educational withdrawals of earnings are taxed as regular income in the hands of the beneficiary. An RESP beneficiary is typically a child, and in a child's case the Canadian federal government provides matching grant money (called CESG) of 20% on the first $2500 contributed each year, up to age 18, to a lifetime maximum of $7200 per beneficiary. Grant money is subject to additional conditions for withdrawal. While RESPs are typically used to save for a child's future education, there's nothing stopping an adult from opening an RESP for himself. If you've never had one, you can deposit $50,000 of after-tax money to grow on a tax-deferred basis for up to 36 years ... as far as I understand. An adult RESP will not qualify for CESG. Moreover, if you use the RESP strictly as a tax shelter and don't make qualified educational withdrawals when the time comes, your original contributions still come out free of tax but you'll pay ordinary income tax plus 20% additional tax on the earnings portion. That's the \"\"catch\"\"*. *However, if at that time you have accumulated sufficient RRSP contribution room, you may move up to $50,000 of your RESP earnings into your RRSP without any tax consequences (i.e. also avoiding the 20% additional tax) at time of transfer. Perhaps there's something above you haven't considered. Still, be sure to do your own due diligence and to consult a qualified, experienced, and conflict-free financial advisor for advice particular to your own situation.\"" }, { "docid": "519321", "title": "", "text": "Are you being paid through a limited company or an umbrella company ? Are you self employed If not what they are doing is illegal. If you are being paid a salary, then the employer has to contribute their part of National Insurance. I believe they are treating you as self employed, hence asking you to generate invoices. Check your contract wordings properly. Or get help from Citizens Advice. Call them or visit their local office. Or else do call up HMRC. But if you are invoicing them, I would assume you are self employed and you have to do your self assessment. Get in contact with HMRC and ask them to generate your Unique Taxpayer Reference (UTR). THey will send you the UTR and using this you can fill your tax returns. It looks like cumbersome now, but it isn't so. You can do it yourself, I do mine. Or at the end of the financial year, get an accountant to do the returns for you, probably should charge you £100-£150. Keep all your invoices, bills, bank statements safely. This is some help from HMRC website" }, { "docid": "584160", "title": "", "text": "&gt;This means that you may be able to make about $120,000 per year, which isn’t bad. Except you’ll have expenses, like rent, transportation, repairs, supplies, computers and whatever else. Your expenses will probably run a few thousand a month, so let’s assume **after expenses you’re netting about $80,000**. Then there’s taxes, and not just federal. There will be state, local, real estate, school, tolls, export, import, duties and those hard-to-understand fees on your cable bill. So lop about 30 percent off that $80K and you’re down to a net living of $56,000. $80,000 net income before taxes is quite good for a self employed individual. I don't really see what the problem is. His bit about taxes after that is completely irrelevant because you'll be paying federal and fica no matter what, plus state and real estate taxes if they apply to you." }, { "docid": "593197", "title": "", "text": "\"Can the companies from USA give job to me (I am from New Zealand)? Job as being employee - may be tricky. This depends on the labor laws in New Zealand, but most likely will trigger \"\"nexus\"\" clause and will force the employer to register in the country, which most won't want to do. Instead you can be hired as a contractor (i.e.: being self-employed, from NZ legal perspective). If so, what are the legal documents i have to provide to the USA for any taxes? If you're employed as a contractor, you'll need to provide form W8-BEN to your US employer on which you'll have to certify your tax status. Unless you're a US citizen/green card holder, you're probably a non-US person for tax purposes, and as such will not be paying any tax in the US as long as you work in New Zealand. If you travel to the US for work, things may become tricky, and tax treaties may be needed. Will I have to pay tax to New Zealand Government? Most likely, as a self-employed. Check how this works locally. As for recommendations, since these are highly subjective opinions that may change over time, they're considered off-topic here. Check on Yelp, Google, or any local NZ professional review site.\"" }, { "docid": "582864", "title": "", "text": "\"There are a couple of things that are missing from your estimate. In addition to your standard deduction, you also have a personal exemption of $4050. So \"\"D\"\" in your calculation should be $6300 + $4050 = $10,350. As a self-employed individual, you need to pay both the employee and employer side of the Social Security and Medicare taxes. Instead of 6.2% + 1.45%, you need to pay (6.2% + 1.45%) * 2 = 15.3% self-employment tax. In addition, there are some problems with your calculation. Q1i (Quarter 1 estimated income) should be your adjusted annual income divided by 4, not 3 (A/4). Likewise, you should estimate your quarterly tax by estimating your income for the whole year, then dividing by 4. So Aft (Annual estimated federal tax) should be: Quarterly estimated federal tax would be: Qft = Aft / 4 Annual estimated self-employment tax is: Ase = 15.3% * A with the quarterly self-employment tax being one-fourth of that: Qse = Ase / 4 Self employment tax gets added on to your federal income tax. So when you send in your quarterly payment using Form 1040-ES, you should send in Qft + Qse. The Form 1040-ES instructions (PDF) comes with the \"\"2016 Estimated Tax Worksheet\"\" that walks you through these calculations.\"" }, { "docid": "502150", "title": "", "text": "\"The biggest and primary question is how much money you want to live on within retirement. The lower this is, the more options you have available. You will find that while initially complex, it doesn't take much planning to take complete advantage of the tax system if you are intending to retire early. Are there any other investment accounts that are geared towards retirement or long term investing and have some perk associated with them (tax deferred, tax exempt) but do not have an age restriction when money can be withdrawn? I'm going to answer this with some potential alternatives. The US tax system currently is great for people wanting to early retire. If you can save significant money you can optimize your taxes so much over your lifetime! If you retire early and have money invested in a Roth IRA or a traditional 401k, that money can't be touched without penalty until you're 55/59. (Let's ignore Roth contributions that can technically be withdrawn) Ok, the 401k myth. The \"\"I'm hosed if I put money into it since it's stuck\"\" perspective isn't true for a variety of reasons. If you retire early you get a long amount of time to take advantage of retirement accounts. One way is to primarily contribute to pretax 401k during working years. After retiring, begin converting this at a very low tax rate. You can convert money in a traditional IRA whenever you want to be Roth. You just pay your marginal tax rate which.... for an early retiree might be 0%. Then after 5 years - you now have a chunk of principle that has become Roth principle - and can be withdrawn whenever. Let's imagine you retire at 40 with 100k in your 401k (pretax). For 5 years, you convert $20k (assuming married). Because we get $20k between exemptions/deduction it means you pay $0 taxes every year while converting $20k of your pretax IRA to Roth. Or if you have kids, even more. After 5 years you now can withdraw that 20k/year 100% tax free since it has become principle. This is only a good idea when you are retired early because you are able to fill up all your \"\"free\"\" income for tax conversions. When you are working you would be paying your marginal rate. But your marginal rate in retirement is... 0%. Related thread on a forum you might enjoy. This is sometimes called a Roth pipeline. Basically: assuming you have no income while retired early you can fairly simply convert traditional IRA money into Roth principle. This is then accessible to you well before the 55/59 age but you get the full benefit of the pretax money. But let's pretend you don't want to do that. You need the money (and tax benefit!) now! How beneficial is it to do traditional 401ks? Imagine you live in a state/city where you are paying 25% marginal tax rate. If your expected marginal rate in your early retirement is 10-15% you are still better off putting money into your 401k and just paying the 10% penalty on an early withdrawal. In many cases, for high earners, this can actually still be a tax benefit overall. The point is this: just because you have to \"\"work\"\" to get money out of a 401k early does NOT mean you lose the tax benefits of it. In fact, current tax code really does let an early retiree have their cake and eat it too when it comes to the Roth/traditional 401k/IRA question. Are you limited to a generic taxable brokerage account? Currently, a huge perk for those with small incomes is that long term capital gains are taxed based on your current federal tax bracket. If your federal marginal rate is 15% or less you will pay nothing for long term capital gains, until this income pushes you into the 25% federal bracket. This might change, but right now means you can capture many capital gains without paying taxes on them. This is huge for early retirees who can manipulate income. You can have significant \"\"income\"\" and not pay taxes on it. You can also stack this with before mentioned Roth conversions. Convert traditional IRA money until you would begin owing any federal taxes, then capture long term capital gains until you would pay tax on those. Combined this can represent a huge amount of money per year. So littleadv mentioned HSAs but.. for an early retiree they can be ridiculously good. What this means is you can invest the maximum into your HSA for 10 years, let it grow 100% tax free, and save all your medical receipts/etc. Then in 10 years start withdrawing that money. While it sucks healthcare costs so much in America, you might as well take advantage of the tax opportunities to make it suck slightly less. There are many online communities dedicated to learning and optimizing their lives in order to achieve early retirement. The question you are asking can be answered superficially in the above, but for a comprehensive plan you might want other resources. Some you might enjoy:\"" }, { "docid": "108062", "title": "", "text": "It depends on the finances involved, but particularly if you're not billing anything right now and may have no revenue this year, it's probably a good idea to bill his company. This is in part because some deductions or other tax treatments are only allowed if you have revenue and/or income. The biggest example I can think of is the Solo 401k - you can only contribute up to your self employed income. If you're planning to contribute to one (and you should, they're amazingly powerful tools for saving for retirement and for reducing your tax burden), you will have to have some revenue in order to have something to pay yourself with. I don't believe you have to charge him, though, if it makes more tax sense not to (for example, if his business is operating at a loss and cannot benefit from expensing it, but you'd then have to pay taxes on your own income from it)." }, { "docid": "213168", "title": "", "text": "\"What is a 403b? A 403(b) plan is a tax-advantaged retirement savings plan available for public education organizations, some non-profit employers (only US Tax Code 501(c)(3) organizations), cooperative hospital service organizations and self-employed ministers in the United States. Kind of a rare thing. A bit more here: http://www.sec.gov/investor/pubs/teacheroptions.htm under investment options Equity Indexed Annuities are a special type of contract between you and an insurance company. During the accumulation period — when you make either a lump sum payment or a series of payments — the insurance company credits you with a return that is based on changes in an equity index, such as the S&P 500 Composite Stock Price Index. The insurance company typically guarantees a minimum return. Guaranteed minimum return rates vary. After the accumulation period, the insurance company will make periodic payments to you under the terms of your contract, unless you choose to receive your contract value in a lump sum. For more information, please see our \"\"Fast Answer\"\" on Equity Indexed Annuities, and read FINRA's investor alert entitled Equity-Indexed Annuitiies — A Complex Choice. So perhaps \"\"equity indexed annuities\"\" is the more correct thing to search for and not \"\"insurance funds\"\"?\"" }, { "docid": "264023", "title": "", "text": "\"when you contribute to a 401k, you get to invest pre-tax money. that means part of it (e.g. 25%) is money you would otherwise have to pay in taxes (deferred money) and the rest (e.g. 75%) is money you could otherwise invest (base money). growth in the 401k is essentially tax free because the taxes on the growth of the base money are paid for by the growth in the deferred portion. that is of course assuming the same marginal tax rate both now and when you withdraw the money. if your marginal tax rate is lower in retirement than it is now, you would save even more money using a traditional 401k or ira. an alternative is to invest in a roth account (401k or ira). in which case the money goes in after tax and the growth is untaxed. this would be advantageous if you expect to have a higher marginal tax rate during retirement. moreover, it reduces tax risk, which could give you peace of mind considering u.s. marginal tax rates were over 90% in the 1940's. a roth could also be advantageous if you hit the contribution limits since the contributions are after-tax and therefore more valuable. lastly, contributions to a roth account can be withdrawn at any time tax and penalty free. however, the growth in a roth account is basically stuck there until you turn 60. unlike a traditional ira/401k where you can take early retirement with a SEPP plan. another alternative is to invest the money in a normal taxed account. the advantage of this approach is that the money is available to you whenever you need it rather than waiting until you retire. also, investment losses can be deducted from earned income (e.g. 15-25%), while gains can be taxed at the long term capital gains rate (e.g. 0-15%). the upshot being that even if you make money over the course of several years, you can actually realize negative taxes by taking gains and losses in different tax years. finally, when you decide to retire you might end up paying 0% taxes on your long term capital gains if your income is low enough (currently ~50k$/yr for a single person). the biggest limitation of this strategy is that losses are limited to 3k$ per year. also, this strategy works best when you invest in individual stocks rather than mutual funds, increasing volatility (aka risk). lastly, this makes filing your taxes more complicated since you need to report every purchase and sale and watch out for the \"\"wash sale\"\" rules. side note: you should contribute enough to get all the 401k matching your employer offers. even if you cash out the whole account when you want the money, the matching (typically 50%-200%) should exceed the 10% early withdrawal penalty.\"" }, { "docid": "147080", "title": "", "text": "The amount of the income taxes you will owe depends upon how much income you have, after valid business expenses, also it will depend upon your filing status as well as the ownership form of your business and what state you live in. That said, you will need to be sure to make the Federal 1040ES quarterly prepayments of your tax on time or there will be penalties. You also must remember that you will be needing to file a schedule SE with your 1040. That is for the social security taxes you owe, which is in addition to your income taxes. With an employer/employee situation, the FICA withhoding you have seen on your paycheck are matched by the same payment by your employer. Now that you are self-employed you are responcible for your share and the employer share as well; in this situation it is known as self-employment tax. the amount of it will be the same as your share of FICA and half of the employer's share of FICA taxes. If you are married and your wife also is working self-employed, then she will have to files herown schedule SE along with yours. meaning that you will pay based on your business income and she will pay baed on hers. your 1040Es quarterly prepayment must cover your income tax and your combined (yours and hers) Self Employment taxes. Many people will debate on the final results of the results of schedule SE vrs an employee's and an employer's payments combined. If one were to provides a ball park percentage that would likely apply to you final total addition to your tax libility as a result of needing schedule SE would tend to fluctuate depending upon your total tax situation; many would debate it. It has been this way since, I first studied and use this schedule decades ago. For this reason it is best for you to review these PDF documents, Form 1040 Schedule SE Instructions and Form 1040 Schedule SE. As for your state income taxes, it will depend on the laws of the state you are based in." }, { "docid": "42814", "title": "", "text": "IRS Publication 969 gives all the details about HSA accounts and High Deductible plans: According to your question you are covered by a plan that can have an HSA. There a few points of interest for you: Contributions to an HSA Any eligible individual can contribute to an HSA. For an employee's HSA, the employee, the employee's employer, or both may contribute to the employee's HSA in the same year. For an HSA established by a self-employed (or unemployed) individual, the individual can contribute. Family members or any other person may also make contributions on behalf of an eligible individual. Contributions to an HSA must be made in cash. Contributions of stock or property are not allowed. That means that yes you could make a contribution to the HSA. Or if in the future you were the provider of the insurance you could have a HSA. Limit on Contributions For 2015, if you have self-only HDHP coverage, you can contribute up to $3,350. If you have family HDHP coverage you can contribute up to $6,650. It sounds like you have a family plan. Additional contribution. If you are an eligible individual who is age 55 or older at the end of your tax year, your contribution limit is increased by $1,000. Rules for married people. If either spouse has family HDHP coverage, both spouses are treated as having family HDHP coverage. If each spouse has family coverage under a separate plan, the contribution limit for 2014 is $6,550. You must reduce the limit on contributions, before taking into account any additional contributions, by the amount contributed to both spouses' Archer MSAs. After that reduction, the contribution limit is split equally between the spouses unless you agree on a different division. The rules for married people apply only if both spouses are eligible individuals. If both spouses are 55 or older and not enrolled in Medicare, each spouse's contribution limit is increased by the additional contribution. If both spouses meet the age requirement, the total contributions under family coverage cannot be more than $8,550. Each spouse must make the additional contribution to his or her own HSA. Note: most of the document was written with 2014 numbers, but sometimes they mention 2015 numbers. If both are covered under a single plan it should be funded by the person that has the plan. They may get money from their employer. They may be able to have the employer cover the monthly fee that most HSA administrators charge. The non employee can make contributions to the account but care must be taken to make ure the annual limits aren't exceeded. HSA contributions from the employees paycheck may reduce the social security tax paid by the employee. If the non-employee is self employed you will have to see how the contribution impacts the social security situation for the couple. If the non-employee is 55 or older it can make sense to throw in that extra $1000. The employer may not allow it to come from the paycheck contributions because they wouldn't necessarily know the age of the spouse, they may put a maximum limit based on the age of the employee." }, { "docid": "373059", "title": "", "text": "No, as a director normally you can't. As a director of a Limited company, all those payments should be accounted for as directors' remuneration and have been subject to PAYE and NIC, even if you are self-employed. Currently there is no legislation which prevents a director from receiving self-employment income from a company in which he is a director, however the default position of HMRC's is that all the payments derived from the directorship are subject to PAYE. In other words, it's possible only invoice from an unconnected business or in a consultancy role that's not directly related to the trade of business. But it really depends on the circumstances and the contracts in place. Sources: Monsoon at AAT forum, David Griffiths at UKBF, Paula Sparrow and Abutalib at AW More sources: If a person does other work that’s not related to being a director, they may have an employment contract and get employment rights. Source: Employment status as director at Gov.uk In principle, it is possible for an employee or office holder to tender for work with their employer outside their normal duties, in circumstances where that individual will not be providing service as an employee or office holder but as a self-employed contractor. Where there is any doubt about whether service is provided constitutes employment or self-employment, see the Employment Status Manual (ESM). Source: Section 62 ITEPA 2003 at HMRC" }, { "docid": "106149", "title": "", "text": "\"You're essentially asking the very common \"\"Do I Need to File a Tax Return?\"\" question. It's common enough that the IRS answers it right at the beginning of the Form 1040 Instructions, and it's answered fairly thoroughly here: http://www.irs.gov/individuals/article/0,,id=96623,00.html There's about 20 questions in that checklist which are mostly pretty specialized, but assuming you didn't have taxes withheld that you'd like to get back, and didn't have any retirement income/disbursements this year, the only interesting question is this: \"\"Were you self-employed with earnings of more than $400.00?\"\" Sounds like your losses outweighed your profits, and assuming you had no other income, I'd say you're fine not filing. Can't really speak to state law since that can vary so much, but your state's laws are likely similar to federal, and you can probably find a very similar answer near the beginning of the instructions of your state's income tax form.\"" }, { "docid": "50310", "title": "", "text": "Source Sole trader If you start working for yourself, you’re classed as a self-employed sole trader - even if you’ve not yet told HM Revenue and Customs (HMRC). As a sole trader, you run your own business as an individual. You can keep all your business’s profits after you’ve paid tax on them. You can employ staff. ‘Sole trader’ means you’re responsible for the business, not that you have to work alone.You’re personally responsible for any losses your business makes. Tax responsibilities You must: You’re personally responsible for any losses your business makes. This is one condition which you would need to have a look. If you do some shoddy work and your client wants to recover the losses they can come after your personal money or property. LLPs have the same probelm too. And you pay NI and income tax on all of your profits. If you have a partner then both can take out the profits of a limited company, if both are directors. The tax hit will be less as compared to a single person." }, { "docid": "569135", "title": "", "text": "When you do your tax return, your total income from the year from all sources is added up. So you will need to include your employment income as well as your contractor income. Any tax taken off at source through PAYE will then be deducted from how there is to pay. So whether you pay the tax or your employer pays it, it should end up the same, although the timing will differ. There will be differences in National Insurance treatment, and you don't necessarily have a free option to choose which happens - the nature of your relationship may mean you have to be classed as either employed or self-employed under HMRC rules." } ]

[ { "docid": "546329", "title": "", "text": "The LLC (not you) is probably in debt to the California FTB. Any LLC registered in California must pay at least $800 a year, until it is officially dissolved (i.e.: notice of cancellation/dissolution properly filed with the California Secretary of State). The FTB may come after members (including you) personally, if it can prove that the failure to pay was due to your negligence. Talk to a CA-licensed EA/CPA about how to resolve this. Otherwise, at least from what you've described, there were no other taxable events. LLC is a disregarded entity, so the IRS doesn't care about it much anyway (unless someone was stupid enough to elect it to be taxed as a corporation, that is). Keep in mind that when in doubt - you are always better off with a professional (a CPA/EA licensed in your State) advice." } ]

[ { "docid": "264326", "title": "", "text": "\"You sound like you're already doing a lot to improve your situation... paying off the credit cards, paying off the taxes, started your 401k... I'm in a similar situation, credit ruined & savings gone after the divorce. I know it feels like you're just spinning your wheels, but look at it this way: every monthly payment you make on a debt directly increases your net worth. Paying those bills regularly is one of the single best things you can do right now. As for how you can improve your situation, only two things really jump out at me: 1) $1,300 in rent, plus $300 in utilities, seems quite high for a single man. I don't know the housing costs in your area, though. Depending on where you live, you could cut that in half while still living alone, or get a roommate and save even more. You might have to accept a \"\"suboptimal\"\" living arrangement (like a smaller apartment), but we all have to sacrifice at times. 2) That last $1,000... you really need to budget how it's being spent. Consider cooking at home more / eating out less, or trading in your car for one with lower insurance premiums. Or spending less money on the kids. You say it's for their entertainment, but don't say what that is... are we talking about going to the movies once a month, or rock concerts twice a week? 3) If the kids are on their own for college, it's not the end of the world. I know you want to provide the best future you can for them... help them get good grades, and it'll do more for them than any amount of money. After all those & any other ways you find to save money, even if you can only put a hundred bucks in a savings account at the end of the month (and I'd be surprised if you couldn't put five), do it. Put it in, and leave it there, despite the temptation to take it out and spend it.\"" }, { "docid": "260795", "title": "", "text": "Whether you're self-employed or not, knowing exactly how much tax you will pay is not always an easy task. Various actions you can take (e.g., charitable donations, IRA contributions, selling stocks) may increase or reduce your tax liability. One tool I've found useful for estimating federal taxes is the Excel 1040 spreadsheet. This is a spreadsheet version of the income tax return form. It is not official and is not created by the IRS, but is maintained as a labor of love by a private individual. In practice, however, it is pretty much an accurate implementation of the tax calculation algorithms encoded in the tax forms and instructions. The nice thing about it is that it's a spreadsheet. You can plug numbers into various slots in the spreadsheet and see how they affect your federal tax liability. (You may also owe state taxes depending on what state you live in.) Of course, the estimates you get by doing this are only (at most) as accurate as your estimates of the various numbers you plug in. Still, I think it's a free and useful way to get a ballpark estimate of your tax liability based on numbers that you can more easily estimate (e.g., how much money you expect to earn)." }, { "docid": "164176", "title": "", "text": "\"I fear this question may be impossible to answer, beyond the options you already seem to know about. It depends too much on the details of your situation, some of which you say you don't know. If you don't even know how much debt you have, I think you're going to need some kind of professional advice to assess your situation. One place to start is the National Foundation for Credit Counseling. This organization can provide free or low-cost advice about your situation, including bankruptcy options. That said, the main missing piece I see in your question is your expenses. The first thing you should ask yourself is: what am I spending money on, and can I stop spending on money on that in order to save and/or pay off debt instead? You say that you can \"\"live comfortably paycheck to paycheck\"\" and \"\"routinely\"\" put money into savings. Can you start living uncomfortably and thus put a lot more into savings, or towards debt repayment? Whether this will work or not depends on how much debt you have, but it definitely needs to be part of your thought process. Likewise, if you continually are wiped out by unbudgeted expenses, start budgeting for them.\"" }, { "docid": "97083", "title": "", "text": "\"especially considering it has a mortgage on it (technically a home equity loan on my primary residence). I'm not following. Does it have a mortgage on it, or your primary residence (a different property) was used as a security for the loan? If it is HELOC from a different property - then it is really your business what to do with it. You can spend it all on casinos in Vegas for all that the bank cares. Is this a complicated transaction? Any gotchas I should be aware of before embarking on it? Obviously you should talk to an attorney and a tax adviser. But here's my two cents: Don't fall for the \"\"incorporate in Nevada/Delaware/Wyoming/Some other lie\"\" trap. You must register in the State where you live, and in the State where the property is. Incorporating in any other State will just add complexity and costs, and will not save you anything whatsoever. 2.1 State Taxes - some States tax LLCs. For example, in California you'll pay at least $800 a year just for the right of doing business. If you live in California or the property is in California - you will pay this if you decide to set up an LLC. 2.2 Income taxes - make sure to not elect to tax your LLC as a corporation. The default for LLC is \"\"disregarded\"\" status and it will be taxed for income tax purposes as your person. I.e.: IRS doesn't care and doesn't know about it (and most States, as well). If you actively select to tax it as a corporation (there's such an option) - it will cost you very dearly. So don't, and if someone suggest such a thing to you - run away from that person as fast as you can. Mortgages - it is very hard to get a mortgage when the property is under the LLC. If you already have a mortgage on that property (the property is the one securing the loan) - it may get called once you transfer it into LLC, since from bank's perspective that would be transferring ownership. Local taxes - transferring into LLC may trigger a new tax assessment. If you just bought the property - that will probably not matter much. If it appreciated - you may get hit with higher property taxes. There are also many little things - once you're a LLC and not individual you'll have to open a business bank account, will probably need a new insurance policy, etc etc. These don't add much to costs and are more of an occasional nuisance.\"" }, { "docid": "532888", "title": "", "text": "\"Short answer: Yes. For Federal income tax purposes, you are taxed on your total income, adding up positives and negatives. If business A made, say, $100,000 while business B lost $20,000, then your total income is $80,000, and that's what you'll be taxed on. As @littleadv says, of course any business losses you claim must qualify as business losses under IRS rules. And yes, there are special rules about losses that the IRS considers \"\"passive\"\". If you have wage income in addition to business income, business losses don't offset wage income for social security and medicare tax purposes. You can't get a refund of the social security tax deducted from your paycheck. I don't know if this is relevant to you, but: If you have businesses in different states, each is taxed by that state. For example I have two tiny side businesses, one in Michigan and one in Ohio. Last year the Michigan business made money while the Ohio business lost money. So my federal income was Michigan minus Ohio. My Ohio income was negative so I owed no Ohio income tax. But I couldn't subtract my Ohio losses from my Michigan income for Michigan income tax purposes. Thus, having, say, $10,000 income in Michigan and $10,000 in Ohio would result in lower taxes than $30,000 income in Michigan and a $10,000 loss in Ohio, even though the total income in both cases is the same. And this would be true even if the tax rates in both states were identical.\"" }, { "docid": "351340", "title": "", "text": "In my opinion, every person, regardless of his or her situation, should be keeping track of their personal finances. In addition, I believe that everyone, regardless of their situation, should have some sort of budget/spending plan. For many people, it is tempting to ignore the details of their finances and not worry about it. After all, the bank knows how much money I have, right? I get a statement from them each month that shows what I have spent, and I can always go to the bank's website and find out how much money I have, right? Unfortunately, this type of thinking can lead to several different problems. Overspending. In olden days, it was difficult to spend more money than you had. Most purchases were made in cash, so if your wallet had cash in it, you could spend it, and when your wallet was empty, you were required to stop spending. In this age of credit and electronic transactions, this is no longer the case. It is extremely easy to spend money that you don't yet have, and find yourself in debt. Debt, of course, leads to interest charges and future burdens. Unpreparedness for the future. Without a plan, it is difficult to know if you have saved up enough for large future expenses. Will you have enough money to pay the water bill that only shows up once every three months or the property tax bill that only shows up once a year? Will you have enough money to pay to fix your car when it breaks? Will you have enough money to replace your car when it is time? How about helping out your kids with college tuition, or funding your retirement? Without a plan, all of these are very difficult to manage without proper accounting. Anxiety. Not having a clear picture of your finances can lead to anxiety. This can happen whether or not you are actually overspending, and whether or not you have enough saved up to cover future expenses, because you simply don't know if you have adequately covered your situation or not. Making a plan and doing the accounting necessary to ensure you are following your plan can take the worry out of your finances. Fear of spending. There was an interesting question from a user last year who was not at all in trouble with his finances, yet was always afraid to spend any money, because he didn't have a budget/spending plan in place. If you spend money on a vacation, are you putting your property tax bill in jeopardy? With a good budget in place, you can know for sure whether or not you will have enough money to pay your future expenses and can spend on something else today. This can all be done with or without the aid of software, but like many things, a computer makes the job easier. A good personal finance program will do two things: Keeps track of your spending and balances, apart from your bank. The bank can only show you things that have cleared the bank. If you set up future payments (outside of the bank), or you write a check that has not been cashed yet, or you spend money on a credit card and have not paid the bill yet, these will not be reflected in your bank balance online. However, if you manually enter these things into your own personal finance program, you can see how much money you actually have available to spend. Lets you plan for future spending. The spending plan, or budget, lets you assign a job to every dollar that you own. By doing this, you won't spend rent money at the bar, and you won't spend the car insurance money on a vacation. I've written before about the details on how some of these software packages work. To answer your question about double-entry accounting: Some software packages do use true double-entry accounting (GnuCash, Ledger) and some do not (YNAB, EveryDollar, Mvelopes). In my opinion, double-entry accounting is an unnecessary complication for personal finances. If you don't already know what double-entry accounting is, stick with one of the simpler solutions." }, { "docid": "325677", "title": "", "text": "Mods decided to leave it here, so I'll summarize some of my answers on this question given @OnStartups. You can find them here, here and here. Your options are : You and your business are one and the same. You report your income and expenses for taxes on a Schedule C (for each sole proprietorship a separate schedule), and taxed at your personal rates. There's no liability protection or legal separation between you and your business, and you don't need to have any bureaucratic overhead of managing an entity. You can use your own bank account and have checks written to you directly. You can register for DBA if you want a store-front name to be different from your own name. Depending on State, can cost a lot or close to nothing. Provides certain liability protection (depending on State, single-member and multi-member LLC's may have different liability protections). You can chose to be taxed as either a sole-proprietor (partnership, for multi-member) or as a corporation. You have to separate your activities, have a separate bank account, and some minimal bureaucracy is required to maintain the entity. Benefits include the limited liability, relatively easy to add partners to the business or sell it as a whole, and provides for separation of your personal and business finances. Drawbacks - bureaucracy, additional fees and taxes (especially in CA), and separation of assets. Corporation is an entirely separate entity from yourself, files its own tax returns, has separate bank accounts and is run by the board of directors (which in some cases may require more than 1 person to be on the board, check your state laws on that). As an officer of the corporation you'll have to pay salary to yourself. S-Corp has the benefit of pass-through taxation, C-Corp doesn't and has double taxation. Benefits - liability protection, can sell shares to investors, legally distinct entity. Disadvantages - have to deal with payroll, additional accounting, significant bureaucracy and additional layer of taxes for C-Corp (double taxation). Selling corporate assets is always a taxable event (although in your case it is probably not of an importance). You have to talk to a lawyer in your state about the options re the liability protection and how to form the entities. The formation process is usually simple and straight forward, but the LLC/Partnership operating agreements and Corporation charters/bylaws must be drafted by a lawyer if you're not going to be the sole owner (even if you are - better get a lawyer draft something for you, its just easier to fix and change things when you're the sole owner). You have to talk to a CPA/EA in your state about the taxes and how the choice of entity affects them." }, { "docid": "317529", "title": "", "text": "\"My tax preparing agent is suggesting that since the stock brokers in India does not have any US state ITINS, it becomes complicated to file that income along with US taxes Why? Nothing to do with each other. You need to have ITIN (or, SSN more likely, since you're on H1b). What brokers have have nothing to do with you. You must report these gains on your US tax return, and beware of the PFIC rules when you do it. He says, I can file those taxes separately in India. You file Indian tax return in India, but it has nothing to do with the US. You'll have to deal with the tax treaty/foreign tax credits to co-ordinate. How complicated is it to include Indian capital gains along with US taxes? \"\"How complicated\"\" is really irrelevant. But in any case - there's no difference between Indian capital gains and American capital gains, unless PFIC/Trusts/Mutual funds are involved. Then it becomes complicated, but being complicated is not enough to not report it. If PIFC/Trusts/Mutual funds aren't involved, you just report this on Schedule D as usual. Did anybody face similar situation More or less every American living abroad. Also the financial years are different in India and US Irrelevant.\"" }, { "docid": "477017", "title": "", "text": "\"Let me make sure I understand the point of what Adam Smith is going on about. In discussion of relative poverty, he relates the idea that an individual can be considered in poverty if they do not meet the customary amount of goods considered by their society to be the minimum to be polite in public. You have thus transferred his meaning of what poor means to be what is considered \"\"basic living\"\". You have then taken this concept and tied the cost of \"\"basic living\"\", which you still haven't actually narrowed down, towards the tax rate on income for a citizen of a community. This is all in the context that you're concerned with the community level of price for \"\"basic living\"\" and whether its too high. However, you also haven't said what too high is nor why you're concerned with the literal price which is why I've said you can only control the price of a good through central authority. I never made the assertion you wanted to invoke a centrally planned economy, I simply stated that the only way to control prices across a community is through central authority. You've stated that we collect taxes on local, state, and federal levels. This is true, however it does not mean that they control the price. They simply modify the price set by the market, and only serve to increase the price from the base set by market participants. When I want to buy beer, I don't just pay for the cost of the beer. I pay the cost of the beer + the city tax + county tax + state tax + state sales tax on the beer, which raises the price. Also, these taxes are not income taxes which is what was being discussed. I still don't know what your point is because you cannot seem to define phrases you've used that I have stated I do not know. If you cannot define what you're talking about, how it relates to the actual discussion, and why its relevant then please stop as its simply a derailment.\"" }, { "docid": "596858", "title": "", "text": "I work at a public accounting firm. It's in tax, but I know the audit side of the house pretty well as well. &gt;Without public confidence in the profession, CPA firms wouldn't exist. It's truly an incentive to do a good job and continually gain confidence. They incidentally make money along the way. That's really the heart of the argument. During my schooling we talked about ethics pretty much constantly. In almost every state now, you're required to take a 3 credit hour ethics class prior to sitting for the CPA exam, and you're required to do continuing education. How much depends on the state, but 40-60 hours every three years is par for the course. Of those hours, typically 4-5 of them have to be approved ethics courses. There's also a whole litany of codes of conduct that a CPA must follow. For example, I, as a tax person am bound to follow the codes of conduct of: * The SEC * The PCAOB * The IRS * The AICPA * My State Board of Accountancy * My Firm A serious violation of any one of those codes can lead to a suspension of my license. e.g. I won't ever be able to work in public accounting again. As a profession, most of the CPA's that I've met are above board, but there will always be a few bad apples. On the audit side, the PCAOB (a government agency) audits all the public accounting firms that do assurance work something like every 3 years. The SEC can get involved as well if they think something fishy is going on." }, { "docid": "384165", "title": "", "text": "\"Your scenario depicts 2 \"\"in the money\"\" options, not \"\"at the money\"\". The former is when the share price is higher than the option strike, the second is when share price is right at strike. I agree this is a highly unlikely scenario, because everyone pricing options knows what everyone else in that stock is doing. Much about an option has everything to do with the remaining time to expiration. Depending on how much more the buyer believes the stock will go up before hitting the expiration date, that could make a big difference in which option they would buy. I agree with the others that if you're seeing this as \"\"real world\"\" then there must be something going on behind the scenes that someone else knows and you don't. I would tread with caution in such a situation and do my homework before making any move. The other big factor that makes your question harder to answer more concisely is that you didn't tell us what the expiration dates on the options are. This makes a difference in how you evaluate them. We could probably be much more helpful to you if you could give us that information.\"" }, { "docid": "27826", "title": "", "text": "\"&gt; My question then is why do you espouse such simplistic nonsense when you understand that the situation is much more complex? Is it because it is easier and more psychologically comfortable to ignore these injustices than to admit that your model does not have an effective way of dealing with them? I reject your assessment so it's impossible to answer your questions that assume it. The position that \"\"Jim selling to John has nothing to do with Bob\"\" and the position that \"\"a power plant pollutes collective air possibly entitling compensation\"\" are independent and have no conflict. Simply because there are cases of market failures, I do not therefore conclude that the market system is itself a failure. Baby with the bathwater, etc. It's not because this way of thinking is easier but because it is most accurate. I honestly don't know what you mean by &gt; than to admit that your model does not have an effective way of dealing with them? so I don't know how to respond. I stated in what I thought was plain language that my model has no effective means of dealing with them, only I insist that we must caveat that assessment with the admission that neither does a non-market model. What you were supposed to take away was the realization that there are few market failures that could not more simply be described as systematic failures generally. That is, a collectivist system is inherently illogical (if you want to argue this point, the discussion is over - I have no time for true socialists), yet we share a planet's resources and must decide how to best use them. The free market's conclusion is that people will learn if their air is being abused by a power plant and they will take action to mend it. This to a large extent has been proven in the transition from an early industrialized society to modern industry.\"" }, { "docid": "43647", "title": "", "text": "I know this is rather late, but with your income it is almost certainly better for your mother to claim you as a dependent. I was in a similar situation this last year, I didn't get the full weight of the tax break because my taxes went down to zero with this exemption along with claiming myself as a dependent. I used Turbotax to run both our taxes both ways to verify, the difference was about 1000 dollars saved for my parents to claim me as a dependent vs claiming myself as a dependent. If you are unsure it doesn't take long to run the numbers through Turbotax, TaxACT, or some similar software." }, { "docid": "224665", "title": "", "text": "\"Can I deduct the money that I giving to my team mates from the taxes that I pay? If yes, how should I record the transaction? Why? Why are you giving money to your team mates? That's the most important question, and any answer without taking this into account is not full. You would probably have to talk to a professional tax adviser (a CPA/EA licensed in your state) about the details, but in general - you cannot deduct money you give someone just because you feel like it. Moreover, it may be subject to an additional tax - the gift tax. PS: We don't have any partnership or something similar, it is just each of us on his own. Assuming you want to give your team mates money because you developed the project together - then you do in fact have a partnership. In order to split the income properly, you should get a tax ID for the partnership, and issue a 1065 and K-1 for each team mate. In most states, you don't need to \"\"register\"\" a partnership with the state. Mere \"\"lets do things together\"\" creates a partnership. Otherwise, if they work for you (as opposed to with you in the case above), you can treat it as your own business income, and pay your team mates (who are now your contractors/employees) accordingly. Be careful here, because the difference between contractor and employee in tax law is significant, and you may end up being on the hook for a lot of things you're not aware of. Bottom line, in certain situation you cannot deduct, in others you can - you have to discuss it with a professional. Doing these things on your own without fully understanding what each term means - is dangerous, and IRS doesn't forgive for \"\"honest mistakes\"\".\"" }, { "docid": "519257", "title": "", "text": "For two reasons: 1- People are entitled to deductions and credits that your employer cannot possibly know. Only you as an individual know about your personal situation and can therefore claim these deductions and credits by filing income tax returns. 2- Me telling you that you made $100,000 last year is not the same as telling you that you made $125,000 last year, but someone took $25,000 out of your pocket. Tax season is the one time of the year when citizens know exactly what chunk of their hard earned money was taken by the government, creating more collective awareness about taxation and giving politicians a harder time when they propose raising taxes." }, { "docid": "564475", "title": "", "text": "\"You can file an LLC yourself in most states, although it might be helpful to use a service if you're not sure what to do to ensure it is correct. I filed my LLC here in Colorado online with the Secretary of State's office, which provided the fill-in-the-blank forms and made it easy. In the U.S., taxation of an LLC is \"\"pass-through\"\", meaning the LLC itself does not have any tax liability. Taxes are based on what you take out of the LLC as distributions to yourself, so you pay personal income tax on that. There are many good books on how to form and then operate an LLC, and I personally like NoLo (link to their web site) because they cater to novices. As for hiring people in India, I can't speak to that, so hopefully someone else can answer that specific topic. As for what you need to know about how to run it, I'll refer back to the NoLo books and web site.\"" }, { "docid": "486443", "title": "", "text": "My answer is with respect to the United States. I have no idea about India's regulatory environment. You are opening yourself up to massive liabilities and problems if you deposit their money in your account. I managed investment accounts as a private investment advisor for years (those with less than 15 clients were not required to register) until Dodd-Frank changed the rules. Thus you would have to register as an advisor, probably needing to take the series 65 exam (or qualifying some other way, e.g. getting your CFP/CFA/etc...). I used a discount broker/dealer (Scottrade) as the custodian. Here's how it works: Each client's account was their own account, and I had a master account that allowed me to bill their accounts and manage them. They signed paperwork making me the advisor on their account. I had very little accounting to handle (aside from tracking basis for taxed accounts). If you take custody of the money, you'll have regulatory obligations. There are always lots of stories in the financial advisor trade publications about advisors who go to jail for screwing their clients. The most common factor: they took custody of the assets. I understand why you want a single account - you want to ensure that each client gets the same results, right? Does each client want the same results? Certainly the tax situation for each is different, yes? Perhaps one has gains and wants to take losses in one year, and the other doesn't. If their accounts are managed separately, one can take losses while the other realizes gains to offset other losses. Financial advisors offer these kinds of accounts as Separately Managed Accounts (SMAs). The advisors on these kinds of accounts are mutual funds managers, and they try to match a target portfolio, but they can do things like realize gains or losses for clients if their tax situation would prefer it. You certainly can't let them put retirement accounts into your single account unless the IRS has you on their list of acceptable custodians. I suggest that you familiarize yourself thoroughly with the regulatory environment that you want to operate under. Then, after examining the pros and cons, you should decide which route you want to take. I think the most direct and feasible route is to pass the Series 65, register as an investment advisor, and find a custodian who will let you manage the assets as the advisor on the account. Real estate is another matter, you should talk to an attorney, not some random guy on the internet (even if he has an MBA and a BS in Real Estate, which I do). This is very much a state law thing." }, { "docid": "65835", "title": "", "text": "\"Consider property taxes (school, municipal, county, etc.) summing to 10% of the property value. So each year, another .02N is removed. Assume the property value rises with inflation. Allow for a 5% after inflation return on a 70/30 stock bond mix for N. After inflation return. Let's assume a 20% rate. And let's bump the .05N after inflation to .07N before inflation. Inflation is still taxable. Result Drop in value of investment funds due to purchase. Return after inflation. After-inflation return minus property taxes. Taxes are on the return including inflation, so we'll assume .06N and a 20% rate (may be lower than that, but better safe than sorry). Amount left. If no property, you would have .036N to live on after taxes. But with the property, that drops to .008N. Given the constraints of the problem, .008N could be anywhere from $8k to $80k. So if we ignore housing, can you live on $8k a year? If so, then no problem. If not, then you need to constrain N more or make do with less house. On the bright side, you don't have to pay rent out of the .008N. You still need housing out of the .036N without the house. These formulas should be considered examples. I don't know how much your property taxes might be. Nor do I know how much you'll pay in taxes. Heck, I don't know that you'll average a 5% return after inflation. You may have to put some of the money into cash equivalents with negligible return. But this should allow you to research more what your situation really is. If we set returns to 3.5% after inflation and 2.4% after inflation and taxes, that changes the numbers slightly but importantly. The \"\"no house\"\" number becomes .024N. The \"\"with house\"\" number becomes So that's $24,000 (which needs to include rent) versus -$800 (no rent needed). There is not enough money in that plan to have any remainder to live on in the \"\"with house\"\" option. Given the constraints for N and these assumptions about returns, you would be $800 to $8000 short every year. This continues to assume that property taxes are 10% of the property value annually. Lower property taxes would of course make this better. Higher property taxes would be even less feasible. When comparing to people with homes, remember the option of selling the home. If you sell your .2N home for .2N and buy a .08N condo instead, that's not just .12N more that is invested. You'll also have less tied up with property taxes. It's a lot easier to live on $20k than $8k. Or do a reverse mortgage where the lender pays the property taxes. You'll get some more savings up front, have a place to live while you're alive, and save money annually. There are options with a house that you don't have without one.\"" }, { "docid": "32610", "title": "", "text": "\"It depends on the rules in the specific places you stay. Specific places being countries or states. Some states may consider pension payments to be taxable income, others may not. Some may consider presence for X days to constitute residency, X days may be 60 days in a calendar year whether or not those days are continuous. It doesn't matter so much where your mailbox or mail handling service is located, it matters: You may owe taxes in more than one place. Some states will allow you to offset other states' taxes against theirs. Some states in the US are really harsh on income taxes. It's my understanding that if you own real estate in New York, all of your income, no matter the source, is taxable income in New York whether or not you were ever in the state that year. Ultimately, you can't just put up your hand and say, \"\"that's my tax domicile so I'm exempt from all your taxes.\"\" There is no umbrella US regulation on this topic, the states determine who they consider to be residents and how those residents are to be taxed. While it's possible you may be considered a resident of multiple states and owe income taxes in multiple states, it's equally possible that you won't meet the residency criteria for any state regardless of whether or not that state has an income tax. The issue you face, as addressed in @Jay's answer, Oklahoma will consider you a resident of OK until you have established residency somewhere else.\"" } ]

[ { "docid": "453839", "title": "", "text": "For most goods there is no license required, unless you are trading in restricted goods. Remittance need to be routed via banks and they should comply with FMEA. Your Bank or a qualified CA can guide you." } ]

[ { "docid": "2900", "title": "", "text": "Manufacturer of Quartz Grit in India http://quartzpowdermanufacturers.com/supplier-of-quartz-grit-in-india.php Supplier of Quartz Grit in India, Manufacturer of Quartz Grit in India - Shri Vinayak Industries is offering high grade Quartz Grit. We produce finely processed Quartz Grit by our super efficient production unit. We are dominant supplier, Manufacturer and exporter of Quartz Grit. Usage of Quartz Grit in tiles, Ferro alloys, Ferro silicon, Ferro chrome, oil drilling, artificial granites, and electrical industries. Other applications of quartz grit are in steel industries, sugar refining, dairy farms, paper industries, chemical industries and water treatment plants." }, { "docid": "445298", "title": "", "text": "\"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).\"" }, { "docid": "506567", "title": "", "text": "\"You have a few options, none of which are trade off free: Apply for a credit card, and live off of that. Here, of course, you will go into debt, and there are minimums to pay. But, it will tide you over. In any case, you are getting unsecured credit, so your rates will probably be very, very high. You don't want to build up a lot of 20% per annum debt. An alternative to this would be to go to any bank and ask for an unsecured loan. Having no income, it will be difficult, though not necessarily impossible, to secure some funds. When I was in between houses, once, for example, I was able to borrow $30,000 in unsecured debt (to help me construct my new house!), just based on my income. Grant you, I paid it 2 months later, in order to avoid the 10% / year interest, but the point is that unsecured debt does exist. Credit Cards are easier to get. Arrange for personal financing through your parents or other relatives. If your parents can send you remittances, the terms will most likely be more generous. They know your credit and your true ability to repay. Just because they send you money doesn't mean you have to live with them. As a parent, I have a stake in ensuring my children's success. If I think that tiding them over briefly is in their best interest and mine, you better be sure I'll do it. A variation on this is Microfinance - something like Kiva. Here, if you can write up a story compelling enough to get finance, there are people who might lend you money. Kiva is normally directed towards poorer countries and entrepeneurs - but local variations exist. UPDATE: Google-backed 'LendingClub.com is far more appropriate to this situation than Kiva. Same general idea, but that's the vendor. Find freelance, contract, or light employment. Your concern about employment is justified - you don't want to be in a position where you are unable to travel to an interview because Starbucks or McDonalds will fire you if you don't show up for a shift. (Then again, do you really care if McDonald's lets you go?) As such, you need to find income that is less bound by schedule. Freelance work, in particular, will give you that freedom - assuming you have a skill you can trade. Likewise, short term contract work is equally flexible - usually. Finally, it may be easiest just to get temporary pickup work in a service capacity. In any event, doing something will be better than doing nothing. Who knows, you might want to be a manager / owner of a McDonalds some day. Wouldn't hurt to say, \"\"I started at the bottom.\"\"\"" }, { "docid": "328699", "title": "", "text": "\"The London Stock Exchange offers a wealth of exchange traded products whose variety matches those offered in the US. Here is a link to a list of exchange traded products listed on the LSE. The link will take you to the list of Vanguard offerings. To view those offered by other managers, click on the letter choices at the top of the page. For example, to view the iShares offerings, click on \"\"I\"\". In the case of Vanguard, the LSE listed S&P500 ETF is traded under the code VUSA. Similarly, the Vanguard All World ETF trades under the code VWRL. You will need to be patient viewing iShares offerings since there are over ten pages of them, and their description is given by the abbreviation \"\"ISH name\"\". Almost all of these funds are traded in GBP. Some offer both currency hedged and currency unhedged versions. Obviously, with the unhedged version you are taking on additional currency risk, so if you wish to avoid currency risk then choose a currency hedged version. Vanguard does not appear to offer currency hedged products in London while iShares does. Here is a list of iShares currency hedged products. As you can see, the S&P500 currency hedged trades under the code IGUS while the unhedged version trades under the code IUSA. The effects of BREXIT on UK markets and currency are a matter of opinion and difficult to quantify currently. The doom and gloom warnings of some do not appear to have materialised, however the potential for near-term volatility remains so longs as the exit agreement is not formalised. In the long-term, I personally believe that BREXIT will, on balance, be a positive for the UK, but that is just my opinion.\"" }, { "docid": "14605", "title": "", "text": "Supplier of Quartz Grit in India http://quartzpowdermanufacturers.com/supplier-of-quartz-grit-in-india.php Supplier of Quartz Grit in India, Manufacturer of Quartz Grit in India - Shri Vinayak Industries is offering high grade Quartz Grit. We produce finely processed Quartz Grit by our super efficient production unit. We are dominant supplier, Manufacturer and exporter of Quartz Grit. Usage of Quartz Grit in tiles, Ferro alloys, Ferro silicon, Ferro chrome, oil drilling, artificial granites, and electrical industries. Other applications of quartz grit are in steel industries, sugar refining, dairy farms, paper industries, chemical industries and water treatment plants." }, { "docid": "545988", "title": "", "text": "Web Content is vitally important for boosting your business on the internet. With our service, you can have content or articles written for your blog or website at a very affordable price. Our team is made up of Freelance Writers Professionals in their careers, with the experience to produce like cheap research paper writing service and any type of Content. Look at Our Plans. We have a team of professional and experienced Freelance Writers, therefore the web content is Optima Quality and 100% Original content, Without the aid of any automated software, only with the writer's mental ability." }, { "docid": "445500", "title": "", "text": "Blupier Company is located in City of lakes Udaipur, Rajasthan. We are providing natural and high quality products. We are supplying our products outside India also like Russia, Middle East, Europe, China, UK and USA. We value our clients and fulfill their requirements and providing best quality products with We mainly focus on quality range of product.https://www.slideshare.net/blupierc/semi-precious-stone-slabs" }, { "docid": "163881", "title": "", "text": "\"Since you're also looking for alternative means of funding, have you considered doing part-time work -- during the holidays or on some of the weekends? With this kind of financing you have to watch out that the work does not interfere with your study. On the other hand it can be valuable work experience that can come in handy later in your life, such as when applying for your first \"\"real\"\" job. The kind of work you can do will depend a lot on the subject you are studying and what qualifications you have. For example, if you are studying computer science, there are a lot of freelance opportunities in programming. One of these could lead right to your first job after university. The two broad types of work you can do are: For freelance: Try searching for \"\"[subject] student freelance\"\" and look at sites like oDesk. Read up on tax concerns, research how to price your time, and start doing! For employment: Browse the job boards at your university. Contact businesses to ask for part-time opportunities. Hope this helps to open one of the alternative paths here. If you go down this road, remember to keep your priorities in mind. Especially the freelance work can easily interfere with your study and delay you unnecessarily. Good luck!\"" }, { "docid": "148250", "title": "", "text": "Elance, UpWork, Fivver Who would've thought taking skilled labor and watering down the price to mere pennies would be bad for everybody involved? That's why, even though I operate just like a freelancer, I incorporated. Legally, I'm a sole proprietor, not a freelancer...aside the few tax differences, it just saves me a ton of headaches." }, { "docid": "9299", "title": "", "text": "Manufacturer of Quartz Grit in India http://quartzpowdermanufacturers.com/supplier-of-quartz-grit-in-india.php Shri Vinayak Industries is offering high grade Quartz Grit. We produce finely processed Quartz Grit by our super efficient production unit. We are dominant supplier, Manufacturer and exporter of Quartz Grit. These products are safe to use. Our products are available in various specifications. Before introducing in market our products are tested for their optimum quality. Our products are well known in market for their rich chemical and physical properties." }, { "docid": "324921", "title": "", "text": "Tax Deducted at source is applicable to Employee / Employer [contract employee] relations ... it was also made applicable for cases where an Indian company pays for software products [like MS Word etc] as the product is not sold, but is licensed and is treated as Royalty [unlike sale of a consumer product, that you have, say car] ... Hence it depends on how your contract is worded with your India clients, best is have it as a service agreement. Although services are also taxed, however your contract should clearly specify that any tax in India would be borne by your Indian Client ... Cross Country taxation is an advanced area, you will not find good advice free :)" }, { "docid": "353926", "title": "", "text": "Yes, you can still file a 1040nr. You are a nonresident alien and were: engaged in a trade or business in the United States Normally, assuming your withholding was correct, you would get a minimal amount back. Income earned in the US is definitely Effectively Connected Income and is taxed at the graduated rates that apply to U.S. citizens and resident aliens. However, there is a tax treaty between US and India, and it suggests that you would be taxed on the entirety of the income by India. This suggests to me that you would get everything that was withheld back." }, { "docid": "414426", "title": "", "text": "We are providing lab testing equipment and special purpose machine equipments, specialized in auto parts, textile equipments testing, Lab equipments, leak testing machine, visibility due to smoke, oxygen index tester, Lab oven, rain test Chamber, deep Freezer, tensile testing machine, textile testing equipments, muffle furnace, specific gravity, crush tester, flex tester, celebrity management agency, artists management, events company, events management, events agency, events management company, ad films productions houses in india, advertising films productions" }, { "docid": "423625", "title": "", "text": "\"I would suggest you pay quarterly. Or, if you prefer, do the extra withholding. Don't wait until the end of the year. My experience is that of having a day job with freelance work on the side. I've spent a few years just freelancing, and I paid quarterly as requested to avoid the penalties. Now that I have a good day job again, my freelancing is just a small part of my income, and so I end up with a net return and no longer have to pay quarterly. You shouldn't wait until the end of the year to pay. This is assuming your wife is bringing in a decent income. The only scenario where you would want to wait is if her income is only a small amount (such as my wife's plans for an Etsy store). To the IRS, it doesn't really make a difference whether you withhold extra or pay quarterly. Of those two choices, my preference is to pay quarterly - it's easy to set up calendar reminders on the quarterly payment dates, which are always the same. I did the same as bstpierre when estimating my payments: just take last year's tax (for the business) and divide by 4 (adjusting for any obvious situational differences). That's usually close enough. Paying quarterly instead of via withholding means you get to hold on to your money (on average) for 6 weeks longer. Granted, that doesn't mean much with today's interest rates, but it's something. You may prefer the simpler accounting for withholding, though - you can \"\"set and forget\"\".\"" }, { "docid": "326480", "title": "", "text": "Supplier of Quartz Grit in India http://quartzpowdermanufacturers.com/supplier-of-quartz-grit-in-india.php#supplier-quartz-grit-india Supplier of Quartz Grit in India, Manufacturer of Quartz Grit in India - Shri Vinayak Industries is offering high grade Quartz Grit. We produce finely processed Quartz Grit by our super efficient production unit. We are dominant supplier, Manufacturer and exporter of Quartz Grit. Usage of Quartz Grit in tiles, Ferro alloys, Ferro silicon, Ferro chrome, oil drilling, artificial granites, and electrical industries. Other applications of quartz grit are in steel industries, sugar refining, dairy farms, paper industries, chemical industries and water treatment plants." }, { "docid": "150770", "title": "", "text": "Supplier of Quartz Grit in India http://quartzpowdermanufacturers.com/supplier-of-quartz-grit-in-india.php Shri Vinayak Industries is offering high grade Quartz Grit. We produce finely processed Quartz Grit by our super efficient production unit. We are dominant supplier, Manufacturer and exporter of Quartz Grit. These products are safe to use. Our products are available in various specifications. Before introducing in market our products are tested for their optimum quality. Our products are well known in market for their rich chemical and physical properties. Our mineral products are chemically stable, highly effective and efficient and in accurate composition. Our packaging materials are quality approved and it provide complete safety to quartz grit product. Comprehensive range of quartz grit is available for varying applications." }, { "docid": "439513", "title": "", "text": "Manufacturer of Ramming mass in India http://quartzpowdermanufacturers.com/supplier-of-ramming-mass-in-india.php Shri Vinayak Industries is the ruling Supplier, Manufacturer and Exporter of Ramming Mass in India. We do supply our product not only in India but also to Vietnam, South Korea, UAE, Malaysia, Taiwan, Thailand, Saudi Arabia, and Indonesia. We have wide collection of Acidic Ramming Mass. Our range of acidic ramming mass involves Acidic Ramming Mass, Silica Ramming Mixes, and Packed Ramming Mass." }, { "docid": "382122", "title": "", "text": "Royal White Marmo - We have high quality and most demanding Indian marbles like Agaria white, Dharmata white, Vanni marble, Talai marble, Statuario marble, Onyx Green, Onyx lady grey, Nizrana white plain etc. Now, we are supplying Indian Marble in all over India. We have quality expert team that analysis the products on individual framework. Our products are tested on some parameters such as its durability, polish, Perfect finish, Crack resistance, smooth texture.http://www.slideserve.com/royalw/indian-marble-quality-7596448" }, { "docid": "47957", "title": "", "text": "Yes, but make sure you issue a 1099 to these freelancers by 1/31/2016 or you may forfeit your ability to claim the expenses. You will probably need to collect a W-9 from each freelancer but also check with oDesk as they may have the necessary paperwork already in place for this exact reason. Most importantly, consult with a trusted CPA to ensure you are completing all necessary forms correctly and following current IRS rules and regulations. PS - I do this myself for my own business and it's quite simple and straight forward." } ]

[ { "docid": "325865", "title": "", "text": "For accounting purposes, consider the costs of acquisition as part of the cost of the asset as opposed to expensing. This will be important to consider if you need to amortise the asset for reporting or tax purposes. Dr. Land $250,000 Dr. Building: $250,000 Cr. Cash $500,000 The acquisition of the land from previous owners. And Dr. Land $12,500 Dr. Building $12,500 Cr. Cash $25,000 Fees paid to auctioneer who helped acquire the land. The basis for dividing the cost should be done at appraised prices. These appraised prices will appear in the first entry and should help you along." } ]

[ { "docid": "291327", "title": "", "text": "Option liquidity and underlying liquidity tend to go hand in hand. According to regulation, what kinds of issues can have options even trading are restricted by volume and cost due to registration with the authorities. Studies have shown that the introduction of option trading causes a spike in underlying trading. Market makers and the like can provide more option liquidity if there is more underlying and option liquidity, a reflexive relationship. The cost to provide liquidity is directly related to the cost for liquidity providers to hedge, as evidenced by the bid ask spread. Liquidity providers in option markets prefer to hedge mostly with other options, hedging residual greeks with other assets such as the underlying, volatility, time, interest rates, etc because trading costs are lower since the two offsetting options hedge most of each other out, requiring less trading in the other assets." }, { "docid": "147243", "title": "", "text": "\"While a lot of the answers focus on cost to replace and how much money you should have for tangible goods. There are a few more issues to consider. However before we get started, these issues are not related to ones net worth. They are related to other factors. Having money certainly helps, but someone worth only $10 may not need to insure their stuff under some circumstances. Insurance is a risk avoidance strategy. As such, it should be used to avoid risks that would otherwise cause issues for you. The normal example is a house. If you lost your house due to fire, would you be able to \"\"make it\"\" while you paid the mortgage off, and got a new mortgage to pay for a new house? This is a relatively simple view, but a good one. These days people tend to look at insurance as a savings account. I payed in X so I am entitled to Y. Heath insurance (a bit more on this later) is exacerbating the issue by selling it's self that way, but it simply isn't true. What your paying the premium for to avoid the risk of loss. Not so you can have a pool of money to draw from in time of need, but so that a time of need should never arise. Which brings us back to, should you get insurance? Tangible Assets Let's assume you have no legal or contractual obligation to have insurance. If you put the money you were spending aside would you have enough money to secure a new asset should your current one just vanish? This is the normal argument. But it has a second side. Do you need the asset at all, or can you just accept the loss. Lets pick on a red neck for a second. While certainly not millionaires, or \"\"well off\"\" by conventional means, the guy with 6 cars on bricks in his lawn does not need to insure 6 cars. If one were to vanish, it may make a hardship but hey, he's got 5 more. So with tangible goods it's more of a question of can you afford to replace the item, do you need to replace the item, and how big a risk is it to you to loose the item? What would you rather loose, the item, or the cost of the insurance? Non-tangible Assets I am going to try to keep this as un-rant like as I can manage, but be aware that I am biased. There are two big examples of non-tangible assets that are commonly insured. Life Insurance, and Health insurance. There are others, but it's very hard to get people to pay money to insure something that they don't actually have. Ideas can be insured, for example, but in order to insure an idea you have to spell it out, at that point why not just file for the patent etc. etc. Keep in mind that a lot of people and companies will insure against losses due to IP theft or other such intangible things. Largely these follow the same rules as tangible assets. This section is meant to focus on those insurances that do not. Life Insurance Life insurance is a bit odd. Were all going to die, so it seems like a \"\"good bet\"\" but what your insuring against with life insurance is an early death. For term life insurance it's a gamble. Will you die before your term runs out. For full life insurance (with no term) it's a different gamble. Will you die before you have paid in what they agreed to pay out. In many cases it's also a gamble that you will miss a payment or two and cancel the policy before you die. If the risk of your death worth the insurance. Usually while young the answer is yes. Do you leave your Family short one earner? Will they make it without the insurance? But as you get older, as life insurance becomes more of a sure thing it also becomes less needed. Your kids move out, there not dependent on you any more. You have retirement accounts setup so your partner need not worry should something happen. What risk exactly are your trying to avoid at this point. You will die. You have planned for that eventuality, it's not a risk anymore, it's a fact. Heath Insurance Is another beast all together. Historically you insured against some catastrophic event, that you couldn't really plan for. Say a heart attack. Surgery and treatment would run in the tens of thousands, so it would ruin you if you didn't have insurance to cover that. That was the risk that you were avoiding. A big, expensive event, causing financial ruin. However, over time it has shifted into something else. The general concept is still there, insure to avoid a risk. But the \"\"risk\"\" has been widened to include all manor of things that are not actually risks. For example a flu. You would go to your doctor, pay your co-pay, and your insurance would pay the rest of the visit. Then you would go to the drug store and get the drugs, pay your co-pay and the insurance pays the rest. But what risk, in this instance are you insuring against? That you can't cover the cost of a doctors visit? That you can't cover the cost of the medication? In this example, a common one, historically the \"\"mother of the house\"\" would go you have a flu, have some chicken noodle soup and go to bed. That would be the end of it. Cost of care is a day's lost wages (or maybe a weeks) and a few cans of soup. However today, because we choose to, the cost of care is much higher. We go to the doctor, pay our co-pays, the insurance has to pay it's part. The doctors office has to carry the cost of the staff it takes to see you, and the staff it takes to handle the claims with the insurance company. And now your flu, cost $1,500. But again that's not exactly true either. With heath insurance and \"\"normal\"\" medical care (like sprained ankles, and colds, etc.) the insurance only really covers the cost of having insurance. In that same flu example, if you went to the doctor as a \"\"self pay\"\" (no insurance) you would often time get a much lower, and reasonable rate. Frequently, under the cost of your standard co-pay. This seems like the doctors being \"\"bad\"\" but it's not. They don't have to file a claim, they don't have to keep track of it. They get immediate payment, not payment 6 months down the line that they need to share with other businesses. With \"\"critical\"\" or \"\"catastrophic\"\" care, heath insurance is still a good thing. If you have a big, unforeseen event, then heath insurance is great at helping you avoid that risk. With chronic (long term) care, your back in the same boat as the flu. Often times you can get better, and cheaper, care as a self pay patent, then as a insured patent. That is not always the case however. So you have to measure your own circumstance, and decide if insurance is right for you. But remember insurance is about risk avoidance, and not about paying less. You will ALWAYS pay more for insurance. It's designed that way. Even if the cost is hidden in many ways. (Taxes, spread out over visits, or prescriptions, etc.)\"" }, { "docid": "257625", "title": "", "text": "\"This question and your other one indicate you're a bit unclear on how capital gains taxes work, so here's the deal: you buy an asset (like shares of stock or a mutual fund). You later sell it for more than you bought it for. You pay taxes on your profit: the difference between what you sold it for and what you bought it for. What matters is not the amount of money you \"\"withdraw\"\", but the prices at which assets are bought and sold. In fact, often you will be able to choose which individual shares you sell, which means you have some control over the tax you pay. For a simple example, suppose you buy 10 shares of stock for $100 each in January (an investment of $1000); we'll call these the \"\"early\"\" shares. The stock goes up to $200 in July, and you buy 10 more shares (investing an additional $2000); we'll call these the \"\"late\"\" shares. Then the stock drops to $150. Suppose you want $1500 in cash, so you are going to sell 10 shares. The 10 early shares you bought have increased in value, because you bought then for $100 but can now sell them for $150. The 10 late shares have decreased in value, because you bought them for $200 but can now only sell them for $150. If you choose to sell the early shares, you will have a capital gain of $500 ($1500 sale price minus $1000 purchase price), on which you may owe taxes. If you sell the late shares, you will have a capital loss of $500 ($1500 sale price minus $2000 purchase price is -$500), which you can potentially use to reduce your taxes. Or you could sell 5 of each and have no gain or loss (selling five early shares for $150 gives you a gain of $250, but selling five late shares for $150 gives you a loss of $250, and they cancel out). The point of all this is to say that the tax is not determined by the amount of cash you get, but by the difference between the sale price and the price you purchased for (known as the \"\"cost basis\"\"), and this in turn depends on which specific assets you sell. It is not enough to know the total amount you invested and the total gain. You need to know the specific cost basis (i.e., original purchase price) of the specific shares you're selling. (This is also the answer to your question about long-term versus short-term gains. It doesn't matter how much money you make on the sale. What matters is how long you hold the asset before selling it.) That said, many brokers will automatically sell your shares in a certain order unless you tell them otherwise (and some won't let you tell them otherwise). Often they will use the \"\"first in, first out\"\" rule, which means they will always sell the earliest-purchased shares first. To finally get to your specific question about Betterment, they have a page here that says they use a different method. Essentially, they try to sell your shares in a way that minimizes taxes. They do this by first selling shares that have a loss, and only then selling shares that have a gain. This basically means that if you want to cash out $X, and it is possible to do it in a way that incurs no tax liability, they will do that. What gets me very confused is if I continue to invest random amounts of money each month using Betterment, then I need to withdraw some cash, what are the tax implications. As my long answer above should indicate, there is no simple answer to this. The answer is \"\"it depends\"\". It depends on exactly when you bought the shares, exactly how much you paid for them, exactly when and how much the price rose or fell, and exactly how much you sell them for. Betterment is more or less saying \"\"Don't worry about any of this, trust us, we will handle everything so that your tax is minimized.\"\" A final note: if you really do want to track the details of your cost basis, Betterment may not be for you, because it is an automated platform that may do a lot of individual trades that a human wouldn't do, and that can make tracking the cost basis yourself very difficult. Almost the whole point of something like Betterment is that you are supposed to give them your money and forget about these details.\"" }, { "docid": "274888", "title": "", "text": "TL;DR: No, it doesn't count against the Roth IRA basis. You can find out by looking at Form 8606 Part III, which is the part for distributions from Roth IRA. Line 19 is the sum of nonqualified distributions, plus qualified first-time homebuyer distributions. You would put $10000 here. Then you would subtract $10000 on line 20 (qualified first-time homebuyer expenses) to get $0 on line 21. You enter your basis on line 22, but since line 21 was 0, you stop. You do not subtract anything from your basis. If you take out more than $10000, then it's only the part over $10000 that is subtracted from your basis." }, { "docid": "74687", "title": "", "text": "Clearly the semantics of the discussion are of greater importance to you. Hospitals are not directly subsidized by the government. Medicare originated with two parts: Part A: Medicare Hospital Insurance (HI) which covers hospital / hospice costs and Part B: Supplementary Medical Insurance (SMI) which covers outpatient costs. Part C was added later by Clinton, which set up a system of selection of health insurance through private companies, and those private companies are then subsidized by the federal government." }, { "docid": "341699", "title": "", "text": "If we knew for sure that euros are only going to be more expensive in the future, then the answer would be easy: Buy them all at one time, so that we are getting them at the best price. Of course, we can't assume that to be the case, they could get cheaper, so the answer gets more complicated. Focusing strictly on monetary considerations, there are two factors to examine: Using answers to this Travel Stack Exchange question as a reference, you see that the cost of currency conversion can be as low as 1%-2% if you make the transaction with a debit card, but can be as high as 15%. So, buying 1000 euros a month would cost between 20 and 150 euros. Examining a two year chart of the Euro-Canadian Dollar exchange rate gives us an idea of how much the currency fluctuates. Over the past two years, a euro has cost has much as $1.54 CAD and as little as $1.26 CAD, a 22% spread. Looking at it on a month-to month basis, we see that monthly changes have been as high as .05 to .07 (4-5%). As such, buying 1000 euros a month could cost 50 CAD more (or less) on a monthly basis due to variance in the exchange rate. If we anticipate our overhead cost of currency conversion to be more than 5%, it doesn't make sense to do multiple transactions; the costs are likely to outweigh the benefits. If we can keep them under that amount, then multiple transactions are advantageous when the euro is cheaper. The problem is somewhat analagous to that of someone who wants to make an annual investment in a mutual fund and is unsure of whether to make the purchase all at once, or to divide it over multiple purchases. One can't know for sure which way the mutual fund price is going to move over the time period Dollar cost averaging, spreading the purchase over regular intervals, is the generally accepted solution to this problem. As such, so long as we can keep the overhead cost of currency transactions low (<5%), doing transactions on a regular basis positions ourselves to take advantage of possible drops in the price of euros and reduces the risk of buying euros when they are most expensive. If we can't keep the cost low, then currency fees would be greater than potential price drops and we would be better off doing a single transaction." }, { "docid": "477434", "title": "", "text": "This should not be taken to be financial advice or guidance. My opinions are my own and do not represent professional advice or consultation on my part or that my employer. Now that we have that clear... Your idea is a very good one. I'm not sure about the benefits of a EBITDA for personal financial planning (or for financial analysis, for that matter, but we will that matter to the side). If you have a moderate (>$40,000) income, then taxes should be one the largest, if not the largest chunk of your paycheck out the door. I personally track my cash flow on a day-by-day basis. That is to say, I break out the actual cash payments (paychecks) that I receive and break them apart into the 14 day increments (paycheck/14). I then take my expenses and do the same. If you organize your expenses into categories, you will receive some meaningful numbers about your daily liquidity (i.e: cash flow before taxes, after taxes, cash flow after house expenses, ect) This serves two purposes. One, you will understand how much you can actually spend on a day-to-day basis. Second, once you realize your flexibility on a day-to-day basis, it is easy to plan and forecast your expenses." }, { "docid": "473504", "title": "", "text": "You are very correct, rebalancing is basically selling off winners to buy losers. Of course the thinking is that selling a winner that has already increased 100% on the basis that it has doubled so it is likely to go down in the near future. However, just look at Apple as an example, if you bought Apple in June 2009 for $20 (adjusted price) and sold it as part of rebalancing when it rose to $40 (adjusted price) in September 2010, you would have missed out on it reaching over $95 2 years later. Similarly you look to rebalance by buying assets which have been battered (say dropped by 50%) on the basis that it has dropped so much that it should start increasing in the near future. But many times the price can fall even further. A better method would be to sell your winners when they stop being winners (i.e. their uptrend ends) and replace them with assets that are just starting their winning ways (i.e. their downtrend has ended and are now starting to Uptrend). This can be achieved by looking at price action and referring to the definitions of an uptrend and a downtrend. Definition of an uptrend - higher highs and higher lows. Definition of a downtrend - lower lows and lower highs." }, { "docid": "504969", "title": "", "text": "That totally depends on if its domestic or international. The difference between domestic first and coach is not as drastic as the difference between first/business and coach on international. On a two hour flight, I don't see any added advantage to business/first over coach. On a 6+ hour flight, I do. On a cost basis, it would have to come down to how important that person's decisions are on a capital return basis." }, { "docid": "100009", "title": "", "text": "\"You don't \"\"deduct\"\" transaction fees, but they are included in your cost basis and proceeds, which will affect the amount of gain/loss you report. So in your example, the cost basis for each of the two lots is $15 (10$ share price plus $5 broker fee). Your proceeds for each lot are $27.50 (($30*2 - $5 )/2). Your gain on each lot is therefore $12.50, and you will report $12.50 in STCG and $12.50 in LTCG in the year you sold the stock (year 3). As to the other fees, in general yes they are deductible, but there are limits and exceptions, so you would need to consult a tax professional to get a correct answer in your specific situation.\"" }, { "docid": "345681", "title": "", "text": "\"Equity does not represent production divisions in a company (i.e. chocolate, strawberry, and vanilla does not make sense). In Sole proprietorship, equity represents 1 owner. In Partnership, equity has at least two sub-accounts, namely Partner 1 and Partner 2. In Corporations, equity may have Common Stockholders and Preferred Stockholders, or even different class of shares for insiders and angel investors. As you can see, equity represents who owns the company. It is not what the company does or manufactures. First and foremost, define the boundary of the firm. Are your books titled \"\"The books of the family of Doe\"\", \"\"The books of Mr & Mrs Doe\"\", or \"\"The books of Mr & Mrs Doe & Sons\"\". Ask yourself, who \"\"owns\"\" this family. If you believe that a marriage is perpetual until further notice then it does not make any sense to constantly calculate which parent owns the family more. In partnership, firm profits are attributed to partner's accounts using previously agreed ratio. For example, (60%/40% because Partner 1 is more hard working and valuable to the firm. Does your child own this family? Does he/she have any rights to use the assets, to earn income from the assets, to transfer the assets to others, or to enforce private property rights? If they don't have a part of these rights, they are certainly NOT part of Equity. So what happens to the expenses of children if you follow the \"\"partnership\"\" model? There are two ways. The first way is to attribute the Loss to the parents/family since you do not expect the children to repay. It is an unrecoverable loss written off. The second way is to create a Debtor(Asset) account to aggregate all child expense, then create a separate book called \"\"The books Children 1\"\", and classify the expense in that separate book. I advise using \"\"The family of Doe\"\" as the firm's boundary, and having 1 Equity account to simplify everything. It is ultimately up to you to decide the boundaries.\"" }, { "docid": "193485", "title": "", "text": "\"A nondividend distribution is typically a return of capital; in other words, you're getting money back that you've contributed previously (and thus would have been taxed upon in previous years when those funds were first remunerated to you). Nondividend distributions are nontaxable, so they do not represent income from capital gains, but do effect your cost basis when determining the capital gain/loss once that capital gain/loss is realized. As an example, publicly-traded real estate investment trusts (REITs) generally distribute a return of capital back to shareholders throughout the year as a nondividend distribution. This is a return of a portion of the shareholder's original capital investment, not a share of the REITs profits, so it is simply getting a portion of your original investment back, and thus, is not income being received (I like to refer to it as \"\"new income\"\" to differentiate). However, the return of capital does change the cost basis of the original investment, so if one were to then sell the shares of the REIT (in this example), the basis of the original investment has to be adjusted by the nondividend distributions received over the course of ownership (in other words, the cost basis will be reduced when the shares are sold). I'm wondering if the OP could give us some additional information about his/her S-Corp. What type of business is it? In the course of its business and trade activity, does it buy and sell securities (stocks, etc.)? Does it sell assets or business property? Does it own interests in other corporations or partnerships (sales of those interests are one form of capital gain). Long-term capital gains are taxed at rates lower than ordinary income, but the IRS has very specific rules as to what constitutes a capital gain (loss). I hate to answer a question with a question, but we need a little more information before we can weigh-in on whether you have actual capital gains or losses in the course of your S-Corporation trade.\"" }, { "docid": "284121", "title": "", "text": "The first method is the correct one. You bought an asset worth of $1000 and you put it on your depreciation schedule. What it means is that you get to write off the $1000 over a certain period of time (and not at once, as you do with expenses). But the value you're writing off is the $1000 regardless of how much you've written off already. Assume you depreciate in straight line over 5 years (that's how you depreciate computers for Federal tax purposes, most states follow). For the simplicity of the calculation, assume you depreciate each year as a whole year (no mid-year/mid-quarter conventions). The calculation is like this: If you sell the computer - the proceeds above the adjusted basis amount are taxed as depreciation recapture up to the accumulated depreciation amount, and as capital gains above that. So in your case - book value is the adjusted basis at the end of the year (EOY), depreciation this year is the amount you depreciate in the year in question out of the total of the original cost, and the accumulated depreciation is the total depreciation including the current year. In Maryland they do not allow depreciating to $0, but rather down to 25% of the original cost, so if you bought a $1000 computer - you depreciate until your adjusted basis is $250. Depreciation rates are described here (page 5). For computers (except for large mainframes) you get 30% depreciation, with the last year probably a bit less due to the $250 adjusted basis limitation." }, { "docid": "93836", "title": "", "text": "\"Because ETFs, unlike most other pooled investments, can be easily shorted, it is possible for institutional investors to take an arbitrage position that is long the underlying securities and short the ETF. The result is that in a well functioning market (where ETF prices are what they should be) these institutional investors would earn a risk-free profit equal to the fee amount. How much is this amount, though? ETFs exist in a very competitive market. Not only do they compete with each other, but with index and mutual funds and with the possibility of constructing one's own portfolio of the underlying. ETF investors are very cost-conscious. As a result, ETF fees just barely cover their costs. Typically, ETF providers do not even do their own trading. They issue new shares only in exchange for a bundle of the underlying securities, so they have almost no costs. In order for an institutional investor to make money with the arbitrage you describe, they would need to be able to carry it out for less than the fees earned by the ETF. Unlike the ETF provider, these investors face borrowing and other shorting costs and limitations. As a result it is not profitable for them to attempt this. Note that even if they had no costs, their maximum upside would be a few basis points per year. Lots of low-risk investments do better than that. I'd also like to address your question about what would happen if there was an ETF with exorbitant fees. Two things about your suggested outcome are incorrect. If short sellers bid the price down significantly, then the shares would be cheap relative to their stream of future dividends and investors would again buy them. In a well-functioning market, you can't bid the price of something that clearly is backed by valuable underlying assets down to near zero, as you suggest in your question. Notice that there are limitations to short selling. The more shares are short-sold, the more difficult it is to locate share to borrow for this purpose. At first brokers start charging additional fees. As borrowable shares become harder to find, they require that you obtain a \"\"locate,\"\" which takes time and costs money. Finally they will not allow you to short at all. Unlimited short selling is not possible. If there was an ETF that charged exorbitant fees, it would fail, but not because of short sellers. There is an even easier arbitrage strategy: Investors would buy the shares of the ETF (which would be cheaper than the value of the underlying because of the fees) and trade them back to the ETF provider in exchange for shares of the underlying. This would drain down the underlying asset pool until it was empty. In fact, it is this mechanism (the ability to trade ETF shares for shares of the underlying and vice versa) that keeps ETF prices fair (within a small tolerance) relative to the underlying indices.\"" }, { "docid": "280763", "title": "", "text": "I’m going to answer this because: Accounting books only reflect the dollar value of inventories. Which means if you look at the balance sheet of McDonalds, you will not see how many bags of French fries are remaining at their storage facility, you will only see the total value at cost basis. Your requirement for noting the number of shares purchased is not part of the double entry accounting system. When you transfer $10000 from bank to broker, the entries would be: The bank’s name and the broker’s name will not appear on the balance sheet. When you purchase 50 shares at $40 per share, the accounting system does not care about the number of shares or the price. All it cares is the $2000 total cost and the commission of $10. You have two choices, either place $10 to an expense account, or incorporate it into the total cost (making it $2010). The entries for the second method would be: Now your balance sheet would reflect: What happens if the price increases from $40 per share to $50 per share tomorrow? Do nothing. Your balance sheet will show the cost of $2010 until the shares are sold or the accounting period ends. It will not show the market value of $2500. Instead, the Portfolio Tracker would show $2500. The most basic tracker is https://www.google.com/finance/portfolio . Later if you finally sell the shares at $50 per share with $10 commission: Again, the number of shares will not be reflected anywhere in the accounting system. Only the total proceeds from the sale matters." }, { "docid": "106665", "title": "", "text": "Nobody tracks a single company's net assets on a daily basis, and stock prices are almost never derived directly from their assets (otherwise there would be no concept of 'growth stocks'). Stocks trade on the presumed current value of future positive cash flow, not on the value of their assets alone. Funds are totally different. They own nothing but stocks and are valued on the basis on the value of those stocks. (Commodity funds and closed funds muddy the picture somewhat, but basically a fund's only business is owning very liquid assets, not using their assets to produce wealth the way companies do.) A fund has no meaning other than the direct value of its assets. Even companies which own and exploit large assets, like resource companies, are far more complicated than funds: e.g. gold mining or oil extracting companies derive most of their value from their physical holdings, but those holdings value depends on the moving price and assumed future price of the commodity and also on the operations (efficiency of extraction etc.) Still different from a fund which only owns very liquid assets." }, { "docid": "464769", "title": "", "text": "No. The above calculation does not hold good. When financial statements are prepared they are prepared on a going concern basis, i.e. a business will run normally in the foreseeable future. Valuation of assets and liabilities is done according to this principle. When a bankruptcy takes places or a business closes down, immediately the valuation method will change. For assets, the realizable value will be more relevant. For example, if you hold 100 computers, in an normal situation, they will depreciated at the normal rate. Every year, some portion of the cost is written off as depreciation. When you actually go to sell these computers you are likely to realize much less than what is shown in the statement. Similarly, for a building, the actual realizable value may be more. For liabilities, they tend to increase in such situation. Hence just a plain computation can give you a very broad idea but the actual figure may be different." }, { "docid": "401961", "title": "", "text": "\"Property sold at profit is taxed at capital gains rate (if you held it for more than a year, which you have based on your previous question). Thus deferring salary won't change the taxable amount or the tax rate on the property. It may save you the 3% difference on the salary, but I don't know how significant can that be. The 25% depreciation recapture rate (or whatever the current percentage is) is preset by your depreciation and cannot be changed, so you'll have to pay that first. Whatever is left above it is capital gains and will be taxed at discounted rates (20% IIRC). You need to make sure that you deduct everything, and capitalize everything else (all the non-deductible expenses and losses with regards to the property). For example, if you remodeled - its added to your basis (reduces the gains). If you did significant improvements and changes - the same. If you installed new appliances and carpets - they're depreciated faster (you can appropriate part of the sale proceeds to these and thus reduce the actual property related gain). Also, you need to see what gain you have on the land - the land cannot be depreciated, so all the gain on it is capital gain. Your CPA will help you investigating these, and maybe other ways to reduce your tax bill. Do make sure to have proper documentation and proofs for all your claims, don't make things up and don't allow your CPA \"\"cut corners\"\". It may cost you dearly on audit.\"" }, { "docid": "259939", "title": "", "text": "What's the basis for this statement? I think maybe we'd have a disagreement on the definition of fair? E: fyi, many middle to low class Americans would have much worse lives if they baseline the min wage to $15. Companies pass that cost on, they don't eat it on their margins. But reddit wouldn't like or understand that, they'll keep bitching instead." } ]

[ { "docid": "57486", "title": "", "text": "\"SOS stands for Secretary of State. The California Department of State handles the business entities registration, and the website is here. See \"\"Forms\"\" in the navigation menu on the left. Specifically, you'll be looking for LLC-5.\"" } ]

[ { "docid": "248962", "title": "", "text": "\"What is your biggest wealth building tool? Income. If you \"\"nerf\"\" your income with payments to banks, cable, credit card debt, car payments, and lattes then you are naturally handicapping your wealth building. It is sort of like trying to drive home a nail holding a hammer right underneath the head. Normal is broke, don't be normal. Normal obtains student loans while getting an education. You don't have to. You can work part time, or even full time and get a degree. As an example, here is one way to do it in Florida. Get a job working fast food and get your associates degree using a community college that are cheap. Then apply for the state troopers. Go away for about 5 months, earning an income the whole time. You automatically graduate with a job that pays for state schools. Take the next three years (or more if you want an advanced degree) to get your bachelors. Then start your desirable career. What is better to have \"\"wasted\"\" approx 1.5 years being a state trooper, or to have a student loan payment for 20 years? There is not even pressure to obtain employment right after graduation. BTW, I know someone who is doing exactly what I outlined. Every commercial you watch is geared toward getting you to sign on the line that is dotted, often going into debt to do so. Car commercials will tell you that you are a bad mom or not a real man if you don't drive the 2015 whatever. Think differently, throw out your numbers and shoot for zero debt. EDIT: OP, I have a MS in Comp Sci, and started one in finance. My wife also has a masters. We had debt. We paid that crap off. Work like a fiend and do the same. My wife's was significant. She planned on having her employer pay it off for each year she worked there. (Like 20% each year or something.) Guess what, that did not work out! She went to work somewhere else! Live like you are still in college and use all that extra money to get rid of your debt. Student loans are consumer debt.\"" }, { "docid": "269184", "title": "", "text": "For federal taxes the rule is fairly straight forward, assuming that nothing else changes during the year. If you know your marginal tax rate (the rate that your last dollar of income is taxed at) last year then adding or subtracting an allowance on the w-4 form will move the amount withheld by rate x Personal exemption amount. The personal exemption for federal taxes in 2017 is $4,050. Lowering the number of allowances on the Federal W-4 increases the amount of money withheld during the year. So for your federal W-4 form lowering the number of allowances by one if you are in the 25% bracket will cause an additional 25%x4050 or ~$1012 a year to be withheld. Of course making the change 5/12ths of the way trough the year will mean that it will only increase the the amount withheld the rest of the year by (7/12) * $1012 or ~$590 for the rest of the year. State taxes can be more complex due to issues regarding tax brackets, and the differences in how they calculate their taxes. Most state websites have a worksheet for making an adjustment to their version of the W-4. Here is the form DE-4 form for California In your situation getting the numbers on the federal and state forms will be much more complex, because your combined income for 2017 will be significantly different than your combined income for 2016. In the case of multiple incomes getting the withholding correct is much harder even with stable income. The trick is that making the adjustment on the job with the highest income may not move the amount withheld as much as you expect. For example if the largest income is only withheld at the 15% rate but your combined income from all your combined jobs results in you being in the 25% bracket, then the above calculation would only move the amount withheld by $354 instead of $590. A couple of notes: the number of allowances on the federal and state W-4 forms don't have to match. Mine almost never do. The number of allowances on the W-4 forms doesn't have to match the number of exemptions on the 1040 form." }, { "docid": "49422", "title": "", "text": "\"This is the best tl;dr I could make, [original](http://www.ocregister.com/2017/08/28/what-business-exodus-california-tops-in-u-s-for-company-creation/) reduced by 81%. (I'm a bot) ***** &gt; Even the headquarters of Jamba Juice and Carl&amp;#039;s Jr. So with much talk about companies supposedly fleeing California en masse - purportedly due to unfriendly conditions for business - would you be surprised if I told you the state had the nation&amp;#039;s largest increase in the number of companies between 2014 and this year? &gt; Even if you rank states on percentage growth, California still looks pretty good in this period: It ranked 10th best for small business creation; No. 17 for mid-size; 23rd for giant companies and 13th in overall growth. &gt; Yes, several indexes of relative business attractiveness by state give California low grades. ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/6x1wk6/what_business_exodus_california_tops_in_us_for/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ \"\"Version 1.65, ~201450 tl;drs so far.\"\") | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr \"\"PM's and comments are monitored, constructive feedback is welcome.\"\") | *Top* *keywords*: **California**^#1 **company**^#2 **state**^#3 **business**^#4 **growth**^#5\"" }, { "docid": "344928", "title": "", "text": "\"Wyoming is a good state for this. It is inexpensive and annual compliance is minimal. Although Delaware has the best advertising campaign, so people know about it, the reality is that there are over 50 states/jurisdictions in the United States with their own competitive incorporation laws to attract investment (as well as their own legislative bodies that change those laws), so you just have to read the laws to find a state that is favorable for you. What I mean is that whatever Delaware does to get in the news about its easy business laws, has been mimicked and done even better by other states by this point in time. And regarding Delaware's Chancery Court, all other states in the union can also lean on Delaware case law, so this perk is not unique to Delaware. Wyoming is cheaper than Delaware for nominal presence in the United States, requires less information then Delaware, and is also tax free. A \"\"registered agent\"\" can get you set up and you can find one to help you with the address dilemma. This should only cost $99 - $200 over the state fees. An LLC does not need to have an address in the United States, but many registered agents will let you use their address, just ask. Many kinds of businesses still require a bank account for domestic and global trade. Many don't require any financial intermediary any more to receive payments. But if you do need this, then opening a bank account in the United States will be more difficult. Again, the registered agent or lawyer can get a Tax Identification Number for you from the IRS, and this will be necessary to open a US bank account. But it is more likely that you will need an employee or nominee director in the United States to go in person to a bank and open an account. This person needs to be mentioned in the Operating Agreement or other official form on the incorporation documents. They will simply walk into a bank with your articles of incorporation and operating agreement showing that they are authorized to act on behalf of the entity and open a bank account. They then resign, and this is a private document between the LLC and the employee. But you will be able to receive and accept payments and access the global financial system now. A lot of multinational entities set up subsidiaries in a number of countries this way.\"" }, { "docid": "271772", "title": "", "text": "Since you both are members of the LLC - it is not a single-member LLC, thus you have to file the tax return on behalf of the LLC (I'm guessing you didn't elect corporate treatment, so you would be filing 1065, which is the default). You need to file form 4868 on behalf of yourselves as individuals, and form 7004 on behalf of the LLC as the partnership. Since the LLC is disregarded (unless you explicitly chose it not to be, which seems not to be the case) the taxes will in fact flow to your individual return(s), but the LLC will have to file the informational return on form 1065 and distribute K-1 forms to each of you. So you wouldn't pay additional estimated taxes with the extension, as you don't pay any taxes with the form 1065 itself. If you need a help understanding all that and filling the forms - do talk to a professional (EA or CPA licensed in your state). Also, reconsider not sending any payment. I suggest sending $1 with the extension form even if you expect a refund." }, { "docid": "90579", "title": "", "text": "California is a non-recourse state, so they won't be coming after you for the balance. If the terms of you divorce were written out that your wife got the house, perhaps a lawyer can get your credit cleared, but that is a long shot. Your chances depend very much on how long your wife made payments, if there is a provable history and the length of that history might help you out. http://wiki.answers.com/Q/Which_states_are_non-recourse_states_for_mortgage_debt" }, { "docid": "540334", "title": "", "text": "\"There are TWO parts to an LLC or any company structure. This being the entire point of creating an LLC. The context is that a lawyer is after your LLC, and he's arguing that the LLC is not genuine, so he can go after your personal assets - your house, car, IRAs, tap your wife's salary etc. This is called \"\"piercing the corporate veil\"\". What would he use to claim the LLC is not genuine? The determination here is between you and the judge in a lawsuit. Suffice it to say, the way you withdraw money must consider the above issues, or you risk breaking the liability shield and becoming personally liable, which means you've been wasting the $25 every year to keep it registered. The IRS has a word for single member LLCs: \"\"Disregarded entity\"\". The IRS wants to know that the entity exists and it's connected to you. But for reporting tax numbers, they simply want the LLC's numbers folded into your personal numbers, because you are the same entity for tax purposes. The determination here is made by you. *LLCs are incredible versatile structures, and you can actually choose to have it taxed like a corporation where it is a separate \"\"person\"\" which files its own tax return. * The IRS doesn't care how you move money from the LLC to yourself, since it's all the same to them. The upshot is that while your own lawyer prohibits you from thinking of the assets as \"\"all one big pile\"\", IRS requires you to. Yes, it's enough to give you whiplash.\"" }, { "docid": "298103", "title": "", "text": "\"What interests me in the article is the way California seems to be quite happy to be losing people who pay taxes because the state can so easily attract new warm bodies. What happens to a state when there is no incentive to retain its people? It struck a cord with me because I've been reading about the history of mining. If an industry can always bring in newer, poorer people, conditions for those working in that industry will never rise. In mining, conditions can be so bad that you can almost think of it as if the workers are expendable. Working conditions can be so bad that many die each year and nobody seems to care because if one group of workers gets a little uppity, management simply starts importing them from another country. You can disagree but I see a parallel with California.Sure one is an industry and one is a country but this is a state that seems more than the rest of the country to depend on cheap Mexican labor. As Mexico stopped breeding people for export, California begin to simply import new slave labor from Honduras or any other place that still exports people as though they were only cattle. Of course this makes it difficult for those who came in an earlier wave to improve quality of life. In fact, life gets harder and grittier. Just look at what happened to the world class famous free public education in California. Yeah, distant memory now. I also wonder if allowing California to ignore national immigration law, is good for the rest of the nation. What about this quote: \"\"Also, more than 30% of the nation’s welfare recipients are Californians – even though California has just 12% of the nation’s population. It is not surprising, therefore, that California is ranked number one in poverty.\"\" California has so many electoral votes that I don't expect to see them prosecuted by the federal government (like AZ) no matter what they do. The state is too big to piss off. But it is becoming a cancer to the rest of the nation?\"" }, { "docid": "454537", "title": "", "text": "\"It might be best to step back and look at the core information first. You're evaluating an LLC vs a Corporation (both corporate entities). Both have one or more members, and both are seen similarly (emphasis on SIMILAR here, they're not all the same) to the IRS. Specifically, LLC's can opt for a pass-through tax system, basically seen by the IRS the same way an S-Corp is. Put another way, you can be taxed as a corporate entity, or it's P/L statements can \"\"flow through\"\" to your personal taxes. When you opt for a flow-through, the business files and you get a separate schedule to tie into your taxes. You should also look at filing a business expense schedule (Schedule C) on your taxes to claim legitimate business expenses (good reference point here). While there are several differences (see this, and this, and this) between these entities, the best determination on which structure is best for you is usually if you have full time employ while you're running the business. S corps limit shares, shareholders and some deductions, but taxes are only paid by the shareholders. C corps have employees, no restrictions on types or number of stock, and no restrictions on the number of shareholders. However, this means you would become an employee of your business (you have to draw monies from somewhere) and would be subject to paying taxes on your income, both as an individual, and as a business (employment taxes such as Social Security, Medicare, etc). From the broad view of the IRS, in most cases an LLC and a Corp are the same type of entity (tax wise). In fact, most of the differences between LLCs and Corps occur in how Profits/losses are distributed between members (LLCs are arbitrary to a point, and Corps base this on shares). Back to your question IMHO, you should opt for an LLC. This allows you to work out a partnership with your co-worker, and allows you to disburse funds in a more flexible manner. From Wikipedia : A limited liability company with multiple members that elects to be taxed as partnership may specially allocate the members' distributive share of income, gain, loss, deduction, or credit via the company operating agreement on a basis other than the ownership percentage of each member so long as the rules contained in Treasury Regulation (26 CFR) 1.704-1 are met. S corporations may not specially allocate profits, losses and other tax items under US tax law. Hope this helps, please do let me know if you have further questions. As always, this is not legal or tax advice, just what I've learned in setting several LLCs and Corporate structures up over the years. EDIT: As far as your formulas go, the tax rate will be based upon your personal income, for any pass through entity. This means that the same monies earned from and LLC or an S-corp, with the same expenses and the same pass-through options will be taxed the same. More reading: LLC and the law (Google Group)\"" }, { "docid": "229730", "title": "", "text": "\"SOS is Secretary of State. SOS number is the number the Secretary of State office assigned to your entity. You can find it on the LLC application form that you submitted (assuming you kept the copy of your application returned to you), or by searching for your entity on the SOS site here (the first column, \"\"entity number\"\", is what you're looking for).\"" }, { "docid": "574941", "title": "", "text": "Awesome info, this is what I was looking for. I live in FL so i will look into LLC laws. Is there a difference in obtaining loans for multi-unit properties, or any special requirements? This would be my first purchase so I'm trying to decide if I should start with a multi-unit or a large home. I read something about a first time home buyers and the FHA allowing one to put down less of an initial investment. Im assuming this is if you are actually going to be living in the home or property? Would it make sense to have separate entities for specific types of units? For example One separate corporation per multi-unit property, but have multiple single family homes under another single entity? Thanks for the help. *quick add-on, would you know how long the corporation would have had to exist before being able to obtain a loan? For example, would XYZ, LLC. have to have been around for 3 years prior to the loan, or could i just incorporate the month before going to the bank?" }, { "docid": "84858", "title": "", "text": "\"The answer to your question is...it depends. Depending on the state you, your friend, and the LLC are located in, it can be very easy to run afoul of state banking laws, or to somehow violate some other statute pertaining to the legal activities an LLC may undertake by doing something like a loan. It is not unusual (or illegal) for officers or employees of a business entity to be loaned money by the company they work for, so something of this nature wouldn't be an issue with regulatory agencies. Having your LLC loan money to a friend who isn't an employee or officer of your LLC just might not be kosher though. The best advice I can give is that you should call the state banking commission or similar agency in your state and ask them whether what you want to do is alright. The LAST thing you want is to end up with auditors or regulators sniffing around your business, even if you haven't done anything wrong, and you certainly don't want to run the risk of accidentally \"\"piercing the corporate veil\"\", as someone else here astutely pointed out. Good luck!\"" }, { "docid": "594615", "title": "", "text": "Decades ago, huge quantities of gold was being pulled from this town, making it one of the richest place in California. But earlier this month, a different incident of obtaining gold nuggets earned the ire of locals. Two men wearing suspicious clothing and carrying a crowbar apparently went in the Siskiyou Count courthouse through the men’s restroom window. The courthouse is home for the display of California’s most revered collection of gold. The robbers appeared to have made a hole in the bulletproof glass at 1.00 am through which they have grabbed a million-dollar-worth in gold nuggets. Their stash included a rare 28-ounce specimen from 1913, called ‘the shoe’. They might have escaped several hours before the heist was discovered at seven in the morning. The robbers got away with 351 ounces out of a 624-ounce set that has a value of USD 3 million for the quality of the specimen. Residents are undeniably angry for what happened, saying that it would have been more forgivable to rob a bank than stealing a piece of their heritage which cannot be replaced. Yreka, with a population of only around 7000, is one of the several California mining communities which has proudly kept their golden heritage for public display. This is despite of the USD 1,750/ounce price of gold in the market. In fact, 2 years ago, the county faced a fiscal crisis but they have not even considered selling off their gold collection that was amassed over time and donated by locals. County sheriff declared the theft as stealing a piece of their region’s history and pledged a USD 15,000 reward for information that may lead to the suspects’ prosecution. The two robbers are described as men in early 20′s wearing black shirts, shoes and blue jeans. The theft became a subject of suspicion around town mainly because an alarm set on top of the case did not go off. The second alarm, on the sliding glass, is still functioning but it was not moved by the robbers anyway. Townspeople are inclined to believe there has been a terrible inside job. Gold seems to be the soul of the region. In 1851, a mule packer first discovered the presence of local gold and since then, mines like King Solomon, Golden Eagle and Black Bear have thrived. Most of the communities that belong to Mother Lode are understandably proud of their heritage so they want to display their collections for people to see. However, doing that comes with loads of risks that they have to be aware of. The county treasurer said that they can use the insurance claim in upgrading the museum but this act does not seem enough to console the residents." }, { "docid": "564475", "title": "", "text": "\"You can file an LLC yourself in most states, although it might be helpful to use a service if you're not sure what to do to ensure it is correct. I filed my LLC here in Colorado online with the Secretary of State's office, which provided the fill-in-the-blank forms and made it easy. In the U.S., taxation of an LLC is \"\"pass-through\"\", meaning the LLC itself does not have any tax liability. Taxes are based on what you take out of the LLC as distributions to yourself, so you pay personal income tax on that. There are many good books on how to form and then operate an LLC, and I personally like NoLo (link to their web site) because they cater to novices. As for hiring people in India, I can't speak to that, so hopefully someone else can answer that specific topic. As for what you need to know about how to run it, I'll refer back to the NoLo books and web site.\"" }, { "docid": "38571", "title": "", "text": "\"The answer probably varies with local law, and you haven't said where you're located. In most or all US states, it appears that after some statutory length of time, the bank would transfer the money to the state government, where it would be held indefinitely as \"\"unclaimed property\"\" in the name of the recipient (technically, the payee, the person to whom the check is made payable). This process is called escheatment. Most states publish a list of all unclaimed property, so at some later date the payee could find their name on this list, and realize they were entitled to the funds. There would then be a process by which the payee could claim the funds from the state. Usually the state keeps any interest earned on the money. As far as I know, there typically wouldn't be any way for you, the person who originated the payment, to collect the money after escheatment. (Before escheatment, if you have the uncashed check in your possession, you can usually return it to the bank and have it refunded to you.) I had trouble finding an authoritative source explaining this, but a number of informal sources (found by Googling \"\"cashier check escheatment\"\") seem to agree that this is generally how it works. Here is the web site for a law firm, saying that in California an uncashed cashier's check escheats to the state after 3 years. Until escheatment occurs, the recipient can cash the check at any time. I don't think that cashier's checks become \"\"stale\"\" like personal checks do, and there isn't any situation in which the funds would automatically revert to you.\"" }, { "docid": "349403", "title": "", "text": "\"This is an unrelated subreddit, so I want to avoid starting unwanted discussion out of common courtesy. I am merely trying to reach out. But a joke among firearms enthusiasts goes thusly: &gt; *Guy: \"\"Look, not only are you losing the arguments on home defense and hunting, but even if you weren't, the Second Amendment isn't about those things, it's about the ability to rebel against tyranny.\"\"* &gt; *Narrator: \"\"That's paranoid and insane. A government will never become tyrannical!\"\"* &gt; *Guy: \"\"What do you think of Donald Trump.\"\"* &gt; *Narrator: \"\"He's literally Hitler. He wants to put Muslims and Women in FEMA camps.\"\"* Also just a friendly tip, publicly advocating for violent overthrow is a prohibiting offense. You can never purchase a firearm from the closest thing we have to \"\"militia\"\" stock. Please consider what you have just posted to social media. *(Also consider these have been continually expanded to include \"\"feel good\"\" restrictions. [Such as calling someone the wrong gender pronoun. (1)](http://sacramento.cbslocal.com/2017/06/05/hate-crime-guns-california/) [(2)](http://www.foxnews.com/politics/2017/10/09/new-california-law-allows-jail-time-for-using-wrong-gender-pronoun-sponsor-denies-that-would-happen.html))* &gt; *K. will not be in violation, by reason of my receipt or possession of a rifle, of any state law or published ordinance applicable where I reside;* &gt; *L. have not been convicted of any federal or state felony or violation 18 U.S.C. §922, and am not a member of any organization that advocates the violent overthrow of the United states government.* Sorry for the threadjack. I just wanted to point out certain groups have thrown away the ability to \"\"#Resist\"\", in the morbid hypothetical you point out.\"" }, { "docid": "125472", "title": "", "text": "Multistate Impact of the American Taxpayer Relief Act of 2012 In general, states with rolling conformity will follow this change. States with specific date conformity will continue to follow the date of conformity currently in effect and will not follow the change. A few states may have their own QSBS rules and will not conform to or be impacted by this provision of the Act. The chart that follows summarizes these principles as applied to the enumerated states: STATE: QSBS Exclusion Conformity: California statutes refer to the IRC QSBS provisions but modify and limit their applicability, and would not be impacted by this provision of the Act. However, California’s provisions were ruled unconstitutional in recent litigation and the California Franchise Tax Board has recently taken the position that gain exclusions and deferrals will be denied for all open tax years. Florida Florida does not impose an income tax on individuals and therefore this provision of the Act is inapplicable and will have no impact. Illinois Due to its rolling conformity, Illinois follows this provision of the Act. Because New York effectively provides for rolling conformity to the IRC, through reference to federal adjusted gross income as the state starting point, New York effectively follows this provision of the Act. Texas does not impose an income tax on individuals" }, { "docid": "110282", "title": "", "text": "This answer assumes you're asking about how to handle this issue in the USA. I generally downvote questions that ask about a tax/legal issue and don't bother providing the jurisdiction. In my opinion it is extremely rude. Seeing that you applied for an LLC, I think that you somehow consider it as a relevant piece of information. You also attribute some importance to the EIN which has nothing to do with your question. I'm going to filter out that noise. As an individual/sole-proprietor (whether under LLC or not), you cannot use fiscal years, only calendar years. It doesn't matter if you decide to have your LLC taxed as S-Corp as well, still calendar year. Only C-Corp can have a fiscal year, and you probably don't want to become a C-Corp. So the year ends on December 31, and whether accrual or cash - you can only deduct expenses you incurred until then. Also, you must declare the income you got until then, which in your case will be the full amount of funding - again regardless of whether you decided to be cash-based or accrual based. So the main thing you need to do is to talk to a licensed tax adviser (EA/CPA licensed in your state) and learn about the tax law relevant to your business and its implications on your actions. There may be some ways to make it work better, and there are some ways in which you can screw yourself up completely in your scenario, so do get a professional advice." }, { "docid": "129503", "title": "", "text": "\"You're conflating LLC with Corporation. They're different animals. LLC does not have \"\"S\"\" or \"\"C\"\" designations, those are just for corporations. I think what you're thinking about is electing pass through status with the IRS. This is the easiest way to go. The company can pay you at irregular intervals in irregular amounts. The IRS doesn't care about these payments. The company will show profit or loss at the end of the year (those payments to you aren't expenses and don't reduce your profit). You report this on your schedule C and pay tax on that amount. (Your state tax authority will have its own rules about how this works.) Alternatively you can elect to have the LLC taxed as a corporation. I don't know of a good reason why someone in your situation would do this, but I'm not an accountant so there may be reasons out there. My recommendation is to get an accountant to prepare your taxes. At least once -- if your situation is the same next year you can use the previous year's forms to figure out what you need to fill in. The investment of a couple hundred dollars is worthwhile. On the question of buying a home in the next couple of years... yes, it does affect things. (Pass through status? Probably doesn't affect much.) If all of your income is coming from self-employment, be prepared for hassles when you are shopping for a mortgage. You can ask around, maybe you have a friendly loan officer at your credit union who knows your history. But in general they will want to see at least two years of self-employment tax returns. You can plan for this in advance: talk to a couple of loan officers now to see what the requirements will be. That way you can plan to be ready when the time comes.\"" } ]

[ { "docid": "224688", "title": "", "text": "Every month I will get a return in from my share of the profit which would be used for repayment of capital and interest in India. Not to sure what the business plan is. Please factor all the modalities, Exchange rate fluctuations, etc. My concern is regarding RBI rules and regulations, FEMA guidelines, and Income tax. Under the Liberalized Remittance Scheme; Funds can be transferred outside India. Any profit you make will be taxable in India. You will have to declare this pay tax in as per schedule." } ]

[ { "docid": "241048", "title": "", "text": "Taxability depends on your tax residency status. Assuming you are non-resident Indian for tax purposes, then your income is non taxable in India. If you keep the money in Saudi or transfer to India it would be same and non taxable" }, { "docid": "391752", "title": "", "text": "After searching a bit and talking to some investment advisors in India I got below information. So thought of posting it so that others can get benefited. This is specific to indian mutual funds, not sure whether this is same for other markets. Even currency used for examples is also indian rupee. A mutual fund generally offers two schemes: dividend and growth. The dividend option does not re-invest the profits made by the fund though its investments. Instead, it is given to the investor from time to time. In the growth scheme, all profits made by the fund are ploughed back into the scheme. This causes the NAV to rise over time. The impact on the NAV The NAV of the growth option will always be higher than that of the dividend option because money is going back into the scheme and not given to investors. How does this impact us? We don't gain or lose per se by selecting any one scheme. Either we make the choice to get the money regularly (dividend) or at one go (growth). If we choose the growth option, we can make money by selling the units at a high NAV at a later date. If we choose the dividend option, we will get the money time and again as well as avail of a higher NAV (though the NAV here is not as high as that of a growth option). Say there is a fund with an NAV of Rs 18. It declares a dividend of 20%. This means it will pay 20% of the face value. The face value of a mutual fund unit is 10 (its NAV in this case is 18). So it will give us Rs 2 per unit. If we own 1,000 units of the fund, we will get Rs 2,000. Since it has paid Rs 2 per unit, the NAV will fall from Rs 18 to Rs 16. If we invest in the growth option, we can sell the units for Rs 18. If we invest in the dividend option, we can sell the units for Rs 16, since we already made a profit of Rs 2 per unit earlier. What we must know about dividends The dividend is not guaranteed. If a fund declared dividends twice last year, it does not mean it will do so again this year. We could get a dividend just once or we might not even get it this year. Remember, though, declaring a dividend is solely at the fund's discretion; the periodicity is not certain nor is the amount fixed." }, { "docid": "205719", "title": "", "text": "First, yes, your LLC has to file annual taxes to the US government. All US companies do, regardless of where their owners live. Second, you will also probably be liable to personally file a return in the US and unless the US has a tax treaty with India (which I don't believe it does) you may end up paying taxes on your same income to both countries. Finally, opening a US bank account as a foreign citizen can be very tricky. You need to talk to a US accountant who is familiar with Indian & US laws." }, { "docid": "495827", "title": "", "text": "\"Its not for US citizens - its for US residents. If the US considers you as a tax resident - you'll be treated the same as a US citizen, regardless of your immigration status. The question is very unclear, since it is not mentioned whether your US sourced income \"\"from the Internet\"\" is sales in the US, sales on-line, services you provide, investments, or what else. All these are treated differently. For some kinds of US-sourced income you should have paid taxes in the US already, regardless of where you physically reside. For others - not. In any case, if you become US tax resident, you'll be taxed on your worldwide income, not only the $10K deposited in the US bank account. ALL of your income, everywhere in the world, must be declared to the US government and will be taxed. You should seek professional advice, before you move to the US, in order to understand your responsibilities, liabilities and rights. I suggest looking for a EA/CPA licensed in California and experienced with taxation of foreigners (look for someone in the SF or LA metropolitan areas). Keep in mind that there may be a tax treaty between the US and your home country that may affect your Federal (but not California) taxes.\"" }, { "docid": "232043", "title": "", "text": "Is it liable for taxation in India? Taxation does not depend on whether to transfer money to India or keep it in GCC. It depends on your tax status. In a given Financial year; 1st April to 31st March, if you are outside of India for more than 182 days, your are Non-Resident Indian, NRI for tax purposes. If you are NRI, income earned outside of India is not taxable in India [even if you transfer the funds to India]. If you are not an NRI, you income in GCC will be taxable in India [Even if you keep the money in GCC]. We both send our salary into a friends account in India and then transfer an amount to our own accounts This is an incorrect practise, If you are NRI, you should not be holding a Savings account, it should be converted into NRO and you can if you want open an NRE account. For your friend where you are transferring money, if there is an income tax audit, there would be quite a few questions asked and your friend has to establish and keep records that this is not GIFT, but more of a convenience agreement." }, { "docid": "528908", "title": "", "text": "Interest earned over my saving only As you are Tax resident in UK, UK taxes Global income. So the interest earned in India is taxable. Further this is taxable when the interest was paid to you in India and it is not relevant whether you kept the funds in India or repatriated to UK. It is not clear in your question as to when the interest was credited to your Indian account. If its been for few years, you are in breach of the UK tax regulation. Consult a tax advisor how this can be corrected. If it is for this year, pay taxes as per normal tax brackets." }, { "docid": "381512", "title": "", "text": "IQ Option has brought revolution Binary options trading industry with its advanced trading platform and transparent trading environment. In India, IQ option has gained much popularity among traders. IQ Option India offer high profitability up to 92 percent for successful trades. It has gained popularity as a high return investment today. It is totally legal to trade binary options with regulated brokers. When it comes to regulated brokers - IQ Option tops the list. IQ Option has dedicated customer service and useful training resources for Indian traders." }, { "docid": "276408", "title": "", "text": "Please consult a tax advisor. You may be voilating the FEMA [Foreign Exchange Management Act] and can land into trouble. Further what you are doing can land up into various other acts as illegal including AML. Further if there is income generated by Indian citizen in India, he is still liable to pay tax, irrespective of whether you get the funds back into India. Edit: AML is Anti Money Laundering. Your transaction is sure to raise AML triggers as it looks like converting Black Money to White in round about way. Once the triggers are raised, RBI division will investigate further to verify what you are doing. If you are able to prove that this is a valid transaction, you would be OK on AML front. How will Income Tax Know? - If they don't know does not mean you are not liable for tax. - Any suspicious transactions would get investigated and sooner or later Income Tax would know about it and can cause a serious problem. - It is irrelevant where you have kept the money, if you have earned something, its taxable. For it not to be taxable you need to conduct this business differently. Please consult a tax adviser who will advice you on the tax-ability of this type of transaction." }, { "docid": "376828", "title": "", "text": "&gt; Less capital tax = less pressure on the wealthy/entrepreneurs (since you keep bigger portion of your net income, the interest to bring back business should increase) = capital inflow back to the US. IMO, this statement makes a whole lot of assumptions that are untrue. 1) The wealthy create jobs. I believe the opposite is true. I think if you want more companies/jobs you should offer universal healthcare so low to middle class folks can risk leaving an established company to start on their own. 2) More money to the rich means more investment in the economy. My experience shows the rich will use the money to grow their own wealth, not everyone's. I remember a recent Bloomberg article where businessmen said they would use repatriated money for buyouts, liminting competition and growing a company's hold on the market. 3) Take home money is used for investment. It isn't. Companies do the large investments, not individuals. Consider Amazon looking at growing their distribution channels or Apple with their iPhone evolution. If you make it more profitable for corporate profits to go to compensation, you leave less money for investment. 4) Companies struggle in the US due to overtaxation. This is a flat out myth. Cost of taxes for business in the US is one of the lowest for rich, educated countries and that is before the tax kickbacks (a la Foxconn) or loopholes. 5) And the bigges IMO -- the US has been fed the lie that the best thing for the citizens of the country is aligned with the best things for the country's companies. The opposite is the case." }, { "docid": "563812", "title": "", "text": "If you are a citizen of India and working in Germany, then you are most likely an NRI (NonResident Indian). If so, you are not entitled to hold an ordinary Indian bank account, and all such existing accounts must be converted to NRO (NonResident Ordinary) accounts. If your Indian bank knows about NRO accounts, then it will be eager to assist you in the process of converting your existing accounts to NRO accounts most likely it also offers a money remittance scheme (names like Remit2India or Money2India) which will take Euros from your EU bank account and deposit INR into your NRO account. Or, you can create an NRE (NonResident External) account to receive remittances from outside India. The difference is that interest earned in an NRO account is taxable income to you in India (and subject to TDS, tax deduction at source) while interest earned in an NRE account is not taxable in India. The remittance process takes a while to set up, but once in place, most remittances take 5 to 6 business days to complete." }, { "docid": "338175", "title": "", "text": "\"But what if I am getting paid salary from a source in India? In other words, it may be that in India a research assistant at a college on average earns a third of what a research assistant like me earns here in US. In that case, even if my cost of living there is much less, so is my salary. There are sites that provide a good guidance for what the average salary for an profession with x years of experience would be. Of course some would get paid more than average. So you can try and make a logic, if in US say you are being paid more than average, you would be paid more than average elsewhere. Plus If moving from Developed to Developing country, one has the Advantage of positive pedigree bias. There are also websites that would give the Purchasing Power Parity for quite a few currency pairs. The Real difficulty to find is whether the Lifestyle you have in a specific country would be similar in other country. If you compare like for like it becomes slightly skewed. If you compare equivalence, then can you adjust. A relevant example my friend in US had a Independent Bungalow in US. It was with Basement and attic, 2 levels of living space with 4 bedroom. He shifted to India and got a great salary compared to normal Indian salary. However this kind of house in India in Bangalore would be affordable only to CEO's of top companies. So is living in a 3 room apartment fine? There are multiple such aspects. Drinking a Starbucks coffee couple of times a day is routine for quite a few in US. In India this would be considered luxury. A like for equivalent comparison is \"\"One drinks 3-4 mugs of Coffee\"\" in US, and average Indian drinks \"\"Tea/Coffee 3-4 mugs\"\". In India the local Tea / Coffee would be Rs 10 - Rs 20. A Starbucks would come with starting price of Rs 150. The same applies to food. A McBurger in India would be around Rs 100. The Indian equivalent Wada Pav is for Rs 10. A Sub Way would be Rs 150. A Equivalent Mumbai Sandwich around Rs 25. I personally am picky about food, so it doesn't matter where I go, I can only eat specific things, which means I spend a huge amount of money if I am outside of India. When I was in US, I couldn't afford a maid, driver or any help. In India I have 2 maids, a cooking maid and a driver. Plus I get plumber, electrician, window cleaner, and all the help without costing me much. Things that I absolutely can't dream in US. My colleague in UK preferred to stay in a specific locality as it has a very good Church. So if its important, one may find few good ones in India if one is Roman Catholic, if one follows Lutheran, Greek Orthodox, tough luck. Citizenship: Does it matter ... A foreign national may never get an Indian citizenship. Children don't qualify either unless both parents are Indian. Health Care: Again is quite different. One may feel Health care in US is not good or very expensive ... but there are multiple aspects of this. So in essence its very broad there is traffic, cleanliness, climate, culture, etc ... PS: A research assistant in India is poorly paid, because colleges don't have funds. Research in fundamental science is quite low. Industry to university linkages are primitive and now where close to what we have in US.\"" }, { "docid": "269646", "title": "", "text": "I find that there are two violation of law , prima facie , if someone earns money by depositing in the online account and then not reporting it ( including in his total income for the year ) and not bringing in India. Income Tax Act violation 1. It is simply comcealment liable for penalty & prosecution under I.T.Act. 2. You should know that anyone who is resident of India as per income Tax Act and having taxable income ( gross total income exceeding exemption limit) will have to fill up the column in his/her income tax return whether Previously these column were not in the Income Tax Return. So , now anyone who is liable to file return of Income can be tried for false return if he has hiddne assets aborad. 2. FEMA violation RBI permits remittance under Liberalized Remittance Scheme. However this scheme can not be used for certain purpose . It is important to examine whether RBI prohibits use of remittance for any entity or business you have described. You can read following FAQ on RBI site Q. 30. What are the prohibited items under the Scheme? Ans. The remittance facility under the Scheme is not available for the following: i) Remittance for any purpose specifically prohibited under Schedule-I (like purchase of lottery tickets/sweep stakes, proscribed magazines, etc.) or any item restricted under Schedule II of Foreign Exchange Management (Current Account Transactions) Rules, 2000; ii) Remittance from India for margins or margin calls to overseas exchanges / overseas counter-party; iii) Remittances for purchase of FCCBs issued by Indian companies in the overseas secondary market; iv) Remittance for trading in foreign exchange abroad; v) Remittance by a resident individual for setting up a company abroad; vi) Remittances directly or indirectly to Bhutan, Nepal, Mauritius and Pakistan; vii) Remittances directly or indirectly to countries identified by the Financial Action Task Force (FATF) as “non co-operative countries and territories”, from time to time; and viii) Remittances directly or indirectly to those individuals and entities identified as posing significant risk of committing acts of terrorism as advised separately by the Reserve Bank to the banks. You will have to examine , if the remittance was NOT done for purpose not allowed by RBI under LRS . If you clear this , you can say there is no violation and your violation is restricted to I.T.Act only." }, { "docid": "187734", "title": "", "text": "\"The Option 2 in your answer is how most of the money is moved cross border. It is called International Transfer, most of it carried out using the SWIFT network. This is expensive, at a minimum it costs in the range of USD 30 to USD 50. This becomes a expensive mechanism to transfer small sums of money that individuals are typically looking at. Over a period of years, the low value payments by individuals between certain pair of countries is quite high, example US-India, US-China, Middle-East-India, US-Mexico etc ... With the intention to reduce cost, Banks have built a different work-flow, this is the Option 1. This essentially works on getting money from multiple individuals in EUR. The aggregated sum is converted into INR, then transferred to partner Bank in India via Single SWIFT. Alongside the partner bank is also sent a file of instructions having the credit account. The Partner Bank in India will use the local clearing network [these days NEFT] to credit the funds to the Indian account. Option 3: Other methods include you writing a check in EUR and sending it over to a friend/relative in India to deposit this into Indian Account. Typically very nominal costs. Typically one month of timelines. Option 4: Another method would be to visit an Indian Bank and ask them to issue a \"\"Rupee Draft/Bankers Check\"\" payable in India. The charges for this would be higher than Option 3, less than Option 1. Mail this to friend/relative in India to deposit this into Indian Account. Typically couple of days timelines for transfer to happen.\"" }, { "docid": "317529", "title": "", "text": "\"My tax preparing agent is suggesting that since the stock brokers in India does not have any US state ITINS, it becomes complicated to file that income along with US taxes Why? Nothing to do with each other. You need to have ITIN (or, SSN more likely, since you're on H1b). What brokers have have nothing to do with you. You must report these gains on your US tax return, and beware of the PFIC rules when you do it. He says, I can file those taxes separately in India. You file Indian tax return in India, but it has nothing to do with the US. You'll have to deal with the tax treaty/foreign tax credits to co-ordinate. How complicated is it to include Indian capital gains along with US taxes? \"\"How complicated\"\" is really irrelevant. But in any case - there's no difference between Indian capital gains and American capital gains, unless PFIC/Trusts/Mutual funds are involved. Then it becomes complicated, but being complicated is not enough to not report it. If PIFC/Trusts/Mutual funds aren't involved, you just report this on Schedule D as usual. Did anybody face similar situation More or less every American living abroad. Also the financial years are different in India and US Irrelevant.\"" }, { "docid": "460755", "title": "", "text": "From Indian context, there are a number of factors that are influencing the economic condition and the exchange rate, interest rate etc. are reflection of the situation. I shall try and answer the question through the above Indian example. India is running a budget deficit of 4 odd % for last 6-7 years, which means that gov.in is spending more than their revenue collection, this money is not in the system, so the govt. has to print the money, either the direct 4% or the interest it has to pay on the money it borrows to cover the 4% (don't confuse this with US printing post 2008). After printing, the supply of INR is more compared to USD in the market (INR is current A/C convertible), value of INR w.r.t. USD falls (in simplistic terms). There is another impact of this printing, it increases the money supply in domestic market leading to inflation and overall price rise. To contain this price rise, Reserve Bank of India (RBI) increases the interest rates and increases Compulsory Reserve Ratio (CRR), thus trying to pull/lock-up money, so that overall money supply decreases, but there is a limit to which RBI can do this as overall growth rate keeps falling as money is more expensive to borrow to invest. The above (in simplistic term) how this is working. However, there are many factors in economy and the above should be treated as it is intended to, a simplistic view only." }, { "docid": "360629", "title": "", "text": "\"Do I need to pay taxes in India in this scenario? For India tax purposes, you would still qualify as \"\"Resident Indian\"\". As a resident Indian you have to pay taxes on Global income. It is not relevant whether you transfer the money back to India to keep in US. The income is generated and taxable. Depending on your contract, presumably you are working as a free lance; certain expenses are allowed to be deducted from your income, for example if you purchase equipment to help carry out the work, stay / entertainment costs, etc. Consult a professional CA who should be able to guide you on what is eligible and what is not. The balance along with your other income will be taxed as per tax brackets. There is exemption for certain category of workers, mostly in entertainment industry where such income is not taxable. This does not apply to your case.\"" }, { "docid": "479801", "title": "", "text": "Citation? Please go looking for yourself, it should be easy for a curious mind to do. How many jobs were lost to just china? In rochester, ny alone, kodak has big investments and production moved to china. Now, take xerox they are outsourcing jobs to india. software and engineering, you get transfered and go work for the indian company or cya. Look at Delphi, they are in Juarez mexico big time. Search out the trade $, we trade large w/ these countries and more. I don't mind trading but it should be balanced. So much of them buying here and so much us buying there. There are certain sectors of higher paying manufacturing jobs that are gone to not just to china but also mexico and india. What jobs replaced them? Of greater concern should be the stagnant wages of the last 30 years." }, { "docid": "283459", "title": "", "text": "\"Please declare everything you earn in India as well as the total amount of assets (it's called FBAR). The penalties for not declaring is jail time no matter how small the amount (and lots of ordinary people every 2-3 years are regularly sent to jail for not declaring such income). It's taken very seriously by the IRS - and any Indian bank who has an office in the US or does business here, can be asked by IRS to provide any bank account details for you. You will get deductions for taxes already paid to a foreign country due to double taxation, so there won't be any additional taxes because income taxes in US are on par or even lower than that in India. Using tricks (like transferring ownership to your brother) may not be worth it. Note: you pay taxes only when you realize gains anyway - both in India or here, so why do you want to take such hassles. If you transfer to your brother, it will be taxed only until you hold them. Make sure you have exact dates of gains between the date you came to US and the date you \"\"gifted\"\" to your brother. As long as you clearly document that the stocks transferred to your brother was a gift and you have no more claims on them, it should be ok, but best to consult a CPA in the US. If you have claims on them, example agreement that you will repurchase them, then you will still continue to pay taxes. If you sell your real estate investments in India, you have to pay tax on the gains in the US (and you need proof of the original buying cost and your sale). If you have paid taxes on the real estate gains in India, then you can get deduction due to double tax avoidance treaty. No issues in bringing over the capital from India to US.\"" }, { "docid": "13215", "title": "", "text": "\"No, you do not need an OCI card to continue to have an NRE or NRO account. You are now classified as a PIO -- Person of Indian Origin -- (and you don't need to have a PIO card issued by the Government of India to prove it) and are entitled to use NRE and NRO accounts just as you were when you were a NRI (NonResident Indian). But, you should inform the banks where you have NRE and NRO accounts that you have changed citizenship, and they may need to go through their KYC (Know Your Customer) process with you all over again. If you don't get an OCI Card, you will need to have an Indian visa stamped into your new US passport to visit India, and please do remember to send your Indian passport to the nearest Indian Consulate for cancellation. Keep the surrender certificate and cancelled passport in your safe deposit box forever; your grandchildren will need it to get visas to visit India. (My granddaughter just did). If you do get an OCI Card, you will need to have an OCI stamp put into your new US passport, and when you renew your US passport, you will need to get the new one stamped too (and pay the fee for that, of course). You cannot enter India with just an OCI Card and a US passport without the OCI stamp in it; that stamp is vital. If you move from one residential address in the US to another, you will need to get a new OCI Card issued because, unlike the US \"\"green card\"\", the OCI card has your residential address on it. Once again, a fee is involved. All these processes take many weeks because the whole paperwork has to go to the Ministry of External Affairs in New Delhi, and meanwhile, your passport is not available to you for a trip to Europe or Japan or Taiwan or China if you need to go there on business (or for pleasure).\"" } ]

[ { "docid": "518406", "title": "", "text": "Each country would have to go back to its own currency, or the rich countries would just kick the poor ones out of the EU. It would be bad for the poor countries, and the global economy would suffer, but it really wouldn't be a big deal." } ]

[ { "docid": "561669", "title": "", "text": "If your country of residence is going to be Germany, it is advisable to move money to Germany at the earliest opportunity. It is hard to predict what will happen in future, i.e. whether Reais will rise or fall compared to Euro. The question of whether to leave the funds in Brazil or not, should be looked at: If you had money in Euro, would you have moved it to Brazil or kept it in Germany?" }, { "docid": "390524", "title": "", "text": "\"A lot (sometimes called a round lot) always refers to the quantity of physical good that you're getting, like a carton of eggs or a barrel of oil. The tricky thing in the case of forex is that the physical good also happens to be a currency. A spot currency product trades in the denomination on the right-hand side (RHS) of the product name. So if you're buying EUR/USD you are paying USD currency to get EUR \"\"units\"\", and if you're selling EUR/USD you are receiving USD by giving away EUR \"\"units\"\". The EUR is the \"\"physical good\"\" in this case. The way I remember it is to think of all products (not just currencies) as trading pairs. So AAPL in my mind is AAPL/USD. When I buy AAPL/USD I am paying USD to get AAPL units. When I sell AAPL/USD I am receiving USD by giving away AAPL units. The thing on the left is the physical good (even if it happens to be money) that you are exchanging, and the thing on the right is the money that you are exchanging. So, when I buy a lot of AAPL, I am buying 100 shares at their current price in dollars. Similarly, when I buy a lot of EUR/USD, I am buying 100K Euros at their current price in dollars.\"" }, { "docid": "124254", "title": "", "text": "It's impossible to determine which event will cause a major shift for a certain currency pair. However, this does not mean that it's not possible to identify events that are important to the overall market sentiment and direction. There are numerous sites that provide a calendar for upcoming and past events and their impact which is most of the time indicated as low, medium and high. Such sites are: Edit: I would like to add to that, that while these are major market movers, you cannot forget that they mainly provide a certain direction for the market but that it's not always clear in which direction the market will go. A recent and prime example of a major event that triggered opposite effects of what you would expect, is the ECB meeting that took place the 3rd of December. Due to the fact that the market already priced in further easing by the ECB the euro strengthened instead of weakening compared to the dollar. This strengthening happened even though the ECB did in fact adjust the deposit by 10 base points to -0.30 % and increased the duration of the QE. Taking above example into consideration it's important to always remember that fundamentals are hard to grasp and that it will take a while to make it a second nature and become truly successful in this line of trading. Lastly, fundamentals are only a part of the complete picture. Don't lose sight of support and resistance levels as well as price action to determine when and how to enter a trade." }, { "docid": "535670", "title": "", "text": "The simple answer: Because you believe every other option can yield greater losses... So the thinking is; Lend it to France you'll get your money back. Put your money in a bank and there's a chance you won't get it back if the bank goes bust. Investors also believe that rates will continue to go more negative, in which case they will actually MAKE money. It's a momentum play which will eventually reverse but since the Bond market is extremely liquid, it's a bet that can quickly be unwound. Another theory floating around is that if the weaker countries of the euro leave (e.g. Greece, etc) and the core keep the euro, then the value of the euro will actually rise. So by putting your money in French or German bonds you would also be securing cash in French or German euro's. - Thinking the unthinkable on a euro break-up - Gavyn Davies" }, { "docid": "113846", "title": "", "text": "\"Any clearing/ legal experts out there? Is this possible- and if so, is it that big of a deal? Here are my thoughts: 1. The EU is right to request euros to be cleared on \"\"home soil\"\" for sovereignty reasons since 2/3s of euro currency is cleared in London. 2. Moving euro clearing back to the eurozone... would just mirror US regulations. Whats the big deal?\"" }, { "docid": "61514", "title": "", "text": "e.g. a European company has to pay 1 million USD exactly one year from now While that is theoretically possible, that is not a very common case. Mostly likely if they had to make a 1 million USD payment a year from now and they had the cash on hand they would be able to just make the payment today. A more common scenario for currency forwards is for investment hedging. Say that European company wants to buy into a mutual fund of some sort, say FUSEX. That is a USD based mutual fund. You can't buy into it directly with Euros. So if the company wants to buy into the fund they would need to convert their Euros to to USD. But now they have an extra risk parameter. They are not just exposed to the fluctuations of the fund, they are also exposed to the fluctuations of the currency market. Perhaps that fund will make a killing, but the exchange rate will tank and they will lose all their gains. By creating a forward to hedge their currency exposure risk they do not face this risk (flip side: if the exchange rate rises in a favorable rate they also don't get that benefit, unless they use an FX Option, but that is generally more expensive and complicated)." }, { "docid": "526094", "title": "", "text": "Russia main reserve is Euro, Gold and Yuan. They have dumped good sums of dollar since way back. The rest of oil buyers would gladly pay russians in whatever currency they want, specially if it is non dollar. Cheap oil on cheaper currency? Who doesn't want that? The chinese pay their oil in Yuan. Russian gladly takes Yuan, since its the most liquid currency in pacific, not to mention china is their no.1 trading partner." }, { "docid": "157907", "title": "", "text": "\"Currencies that are pegged or fixed require that foreign currencies are held by the central issuer at a proportional amount. This is analogous to having a portfolio of currencies that the central bank issues shares from - in the form of its own currency. We will continue with this analogy, if the central bank says these \"\"shares\"\" are worth $1, but the underlying components of the portfolio are worth $0.80 and decreasing, then it is expensive for the central bank to maintain its peg, and eventually they will have to disregard the peg as people start questioning the central bank's solvency. (People will know the $1 they hold is not really worth what the central bank says it is, because of the price changes people experience in buying goods and services, especially when it comes to imports. Shadow economies will also trade using a currency more reflective of labor, which happens no matter what the government's punishments are for doing so). Swiss National Bank (central bank) did this in early 2015, as it experienced volatility in the Euro which it had previously been trying to keep it's currency pegged to. It became too expensive for it to keep this peg on its own. The central bank can devalue its currency by adjusting the proportions of the reserve, such as selling a lot of foreign currency X, buying more of currency Y. They can and do take losses doing this. (Swiss National Bank is maintaining a large loss) They can also flood their economy with more of their currency, diluting the value of each individual 1 dollar equivalent. This is done by issuing bonds or monetizing goods and services from the private sector in exchange for bonds. People colloquially call this \"\"printing money\"\" but it is a misnomer in this day and age where printers are not relevant tools. The good and service goes onto the central bank's balance book, and the company/entity that provided the service now has a bond on its book which can be immediately sold to someone else for cash (another reading is that the bond is as good as cash). The bond didn't previously exist until the central bank said it did, and central banks can infinitely exchange goods and services for bonds. Bond monetization (also called Quantitative Easing) is practiced by the Federal Reserve in the United States, Bank of Japan, European Central Bank and now the Central Bank of the Republic of China\"" }, { "docid": "124479", "title": "", "text": "The Swiss franc has appreciated quite a bit recently against the Euro as the European Central Bank (ECB) continues to print money to buy government bonds issues by Greek, Portugal, Spain and now Italy. Some euro holders have flocked to the Swiss franc in an effort to preserve the savings from the massive Euro money printing. This has increased the value of the Swiss franc. In response, the Swiss National Bank (SNB) has tried to intervene multiple times in the currency market to keep the value of the Swiss franc low. It does this by printing Swiss francs and using the newly printed francs to buy Euros. The SNB interventions have failed to suppress the Swiss franc and its value has continued to rise. The SNB has finally said they will print whatever it takes to maintain a desired peg to the Euro. This had the desired effect of driving down the value of the franc. Which effect will this have long term for the euro zone? It is now clear that all major central bankers are in a currency devaluation war in which they are all trying to outprint each other. The SNB was the last central bank to join the printing party. I think this will lead to major inflation in all currencies as we have not seen the end of money printing. Will this worsen the European financial crisis or is this not an important factor? I'm not sure this will have much affect on the ongoing European crisis since most of the European government debt is in euros. Should this announcement trigger any actions from common European people concerning their wealth? If a European is concerned with preserving their wealth I would think they would begin to start diverting some of their savings into a harder currency. Europeans have experienced rapidly depreciating currencies more than people on any other continent. I would think they would be the most experienced at preserving wealth from central bank shenanigans." }, { "docid": "450851", "title": "", "text": "Rather than screwing around with foreign currencies, hop over to Germany and open an account at the first branch of Deutsche or Commerzbank you see. If the euro really does disintegrate, you want to have your money in the strongest country of the lot. Edit: and what I meant to say is that if the euro implodes, you'll end up with deutschmarks, which, unlike the new IEP, will *not* need to devalue. (And in the meantime, you've still got euros, so you have no FX risk.)" }, { "docid": "87057", "title": "", "text": "The currency market, more often referred as Forex or FX, is the decentralized market through which the currencies are exchanged. To trade currencies, you have to go through a broker or an ECN. There are a lot's of them, you can find a (small) list of brokers here on Forex Factory. They will allow you to take very simple position on currencies. For example, you can buy EUR/USD. By doing so, you will make money if the EUR/USD rate goes up (ie: Euro getting stronger against the US dollar) and lose money if the EUR/USD rate goes down (ie: US dollar getting stronger against the Euro). In reality, when you are doing such transaction the broker: borrows USD, sell it to buy EUR, and place it into an Euro account. They will charge you the interest rate on the borrowed currency (USD) and gives you the interest and the bought currency (EUR). So, if you bought a currency with high interest rate against one with low interest rate, you will gain the interest rate differential. But if you sold, you will lose the differential. The fees from the brokers are likely to be included in the prices at which you buy and sell currencies and in the interest rates that they will charge/give you. They are also likely to gives you big leverage to invest far more than the money that you deposited in their accounts. Now, about how to make money out of this market... that's speculation, there are no sure gains about it. And telling you what you should do is purely subjective. But, the Forex market, as any market, is directed by the law of supply and demand. Amongst what impacts supply and demands there are: Also, and I don't want to judge your friends, but from experience, peoples are likely to tell you about their winning transaction and not about their loosing ones." }, { "docid": "21306", "title": "", "text": "According to your post, you bought seven shares of VBR at $119.28 each on August 23rd. You paid €711,35. Now, on August 25th, VBR is worth $120.83. So you have But you want to know what you have in EUR, not USD. So if I ask Google how much $845.81 is in EUR, it says €708,89. That's even lower than what you're seeing. It looks like USD has fallen in value relative to EUR. So while the stock price has increased in dollar terms, it has fallen in euro terms. As a result, the value that you would get in euros if you sold the stock has fallen from the price that you paid. Another way of thinking about this is that your price per share was €101,72 and is now €101,33. That's actually a small drop. When you buy and sell in a different currency that you don't actually want, you add the currency risk to your normal risk. Maybe that's what you want to do. Or maybe you would be better off sticking to euro-denominated investments. Usually you'd do dollar-denominated investments if some of your spending was in dollars. Then if the dollar goes up relative to the euro, your investment goes up with it. So you can cash out and make your purchases in dollars without adding extra money. If you make all your purchases in euros, I would normally recommend that you stick to euro-denominated investments. The underlying asset might be in the US, but your fund could still be in Europe and list in euros. That's not to say that you can't buy dollar-denominated investments with euros. Clearly you can. It's just that it adds currency risk to the other risks of the investment. Unless you deliberately want to bet that USD will rise relative to EUR, you might not want to do that. Note that USD may rise over the weekend and put you back in the black. For that matter, even if USD continues to fall relative to the EUR, the security might rise more than that. I have no opinion on the value of VBR. I don't actually know what that is, as it doesn't matter for the points I was making. I'm not saying to sell it immediately. I'm saying that you might prefer euro-denominated investments when you buy in the future. Again, unless you are taking this particular risk deliberately." }, { "docid": "147799", "title": "", "text": "I'm worried that it's, as so many observers or commentators seem to be doing with these crises, pre-empting events. I do wish news reporters would stick to reporting the news, rather than panicking people by putting forward their view that something is going to happen, such as Greece exiting the euro and adopting a new currency. As with these things, expectations are key, and this is by no means helping." }, { "docid": "457390", "title": "", "text": "If we postulate that there is at least some element of truth to the phrase 'A leopard does not change his spots' and then consider this tidbit He conveniently forgets to mention his 1.5 million dollar fraud fine from the SEC over investment “advice” he sold through a news letter. The SEC claimed and the judge agreed that the report was “replete with lies”. I think that gives you just about all you might need to know regarding the man behind the video, and the nature of it's content. Oh, and it's purpose? To SELL YOU the same said newsletter. I guess it's natural for Stansberry to feel as he does. After all if the US gov had just busted me for conning and lying to folks, and fined ME 1.5Mill, I'd be having some pretty intense lurid fantasies about it going down in flames, and trying to hide any money I had left offshore also. A huge amount of his argument hinges on the US no longer being the world's reserve currency. Firstly, while I'll admit I'm none too happy with the way the national debt has been managed for oh, around 30 years how, (which includes I will note going from a pretty much balanced budget, to around an 80% increase in the debt from 2001 through 2008, when 'times were good' and there was little need to spend money we didn't have), when compared to a lot of other countries, we still don't look that bad. You have to ask yourself this first, if not the US, then WHO? are the governments of the world going to trust China? could the Yen handle the load? Is the Euro any better off especially considering problems in Greece, Ireland, etc. Do countries like Switzerland have enough liquidity and available ways to invest there? In order for the US to STOP being the world's reserve currency, you must have something to replace it with, and really, can we realistically think of one country/currency with the capability to become a new 'world reserve currency'??? Secondly, even then should such a shift actually happen, it doesn't mean people will ALL just magically stop buying US debt. Yes the demand would go down, but it would not go to zero. There are after all a worldfull of other countries who's money is right now NOT the world reserve currency, and yet they are able to sell bonds and people and even other countries invest there. (China for example does not invest exclusively in the US), so yeah we might have to start paying more interest to get people to buy US debt, but it's not like the demand will go away. Save your money, save your time, don't buy into this dung." }, { "docid": "594686", "title": "", "text": "A few weeks ago, I was thinking about this exact thing (except swap Euros for Canadian Dollars). The good news is that there are options. Option 1: yes, buy Indian fixed deposits Interest rates are high right now- you can get up to 9% p.a. It boils down to your sentiment about the Indian rupee going forward. For instance, let's say you purchase a deposit for amount x at 9% p.a., you can have it double to almost 2x in 10 years. Three things can happen in 10 years: Are you optimistic about Indian governance and economy going forward? If you are, go for it! I certainly am. Option 2: heard of FCNR? Look in to FCNR deposits. I don't know about Europe, but in Canada, the best rate for a 1 year deposit is approximately 1.5%. However, through Foreign Currency Non-Resident (FCNR) deposits, you can get up to 4% or 5%. The other benefit is that you don't have to convert currency to INR which results in conversion savings. However, only major currencies can be used to open such accounts." }, { "docid": "341699", "title": "", "text": "If we knew for sure that euros are only going to be more expensive in the future, then the answer would be easy: Buy them all at one time, so that we are getting them at the best price. Of course, we can't assume that to be the case, they could get cheaper, so the answer gets more complicated. Focusing strictly on monetary considerations, there are two factors to examine: Using answers to this Travel Stack Exchange question as a reference, you see that the cost of currency conversion can be as low as 1%-2% if you make the transaction with a debit card, but can be as high as 15%. So, buying 1000 euros a month would cost between 20 and 150 euros. Examining a two year chart of the Euro-Canadian Dollar exchange rate gives us an idea of how much the currency fluctuates. Over the past two years, a euro has cost has much as $1.54 CAD and as little as $1.26 CAD, a 22% spread. Looking at it on a month-to month basis, we see that monthly changes have been as high as .05 to .07 (4-5%). As such, buying 1000 euros a month could cost 50 CAD more (or less) on a monthly basis due to variance in the exchange rate. If we anticipate our overhead cost of currency conversion to be more than 5%, it doesn't make sense to do multiple transactions; the costs are likely to outweigh the benefits. If we can keep them under that amount, then multiple transactions are advantageous when the euro is cheaper. The problem is somewhat analagous to that of someone who wants to make an annual investment in a mutual fund and is unsure of whether to make the purchase all at once, or to divide it over multiple purchases. One can't know for sure which way the mutual fund price is going to move over the time period Dollar cost averaging, spreading the purchase over regular intervals, is the generally accepted solution to this problem. As such, so long as we can keep the overhead cost of currency transactions low (<5%), doing transactions on a regular basis positions ourselves to take advantage of possible drops in the price of euros and reduces the risk of buying euros when they are most expensive. If we can't keep the cost low, then currency fees would be greater than potential price drops and we would be better off doing a single transaction." }, { "docid": "40161", "title": "", "text": "If you plan to stay in Europe for some time, then you should match your income currency with your liability currency, and so should use the Euro loan to pay off the INR loan, thereby eliminating the currency risk that you currently bear every time you convert Euro into INR to pay down the loan. Plus, you have a much lower interest rate. So, do it !" }, { "docid": "231521", "title": "", "text": "My 0,02€ - I probably live in the same country as you. Stop worrying. The Euro zone has a 100.000€ guaranty deposit. So if any bank should fail, that's the amount you'll receive back. This applies to all bank accounts and deposits. Not to any investments. You should not have more than 100.000€ in any bank. So, lucky you, if you have more than that money, divide between a number of banks. As for the Euro, there might be an inflation, but at this moment the USA and China are in a currency battle that 'benefits' the Euro. Meaning you should not invest in dollars or yuan at this time. Look for undervalued currency to invest in as they should rise against the Euro." }, { "docid": "362281", "title": "", "text": "I don't know how taxes work in Israel, but I imagine it is relatively similar to taxes in the US. In the US you need to pay taxes on investment earnings when you sell them or in this case trade them for something of value. The amount that would typically would be taxed on would be the difference between how much you paid for the currency and the value of the item you traded it for. In theory there shouldn't be any difference in trading bitcoins versus dollars or euros. Reality is that they are rather weird and I don't know what category they would fall into. Are they a currency or a collectors item? I think this is all rather hypothetical because there is no way for any government to track digital currencies and any taxes paid would be based on the honor system. I am not an account and the preceding was not tax advice..." } ]

[ { "docid": "319729", "title": "", "text": "These rumors are here just to help dollar stay alive. Euro have problems, but they are rather solvable, unlike dollar situation. Even if something wrong would happen - countries would return to their national currencies, mainly Germany & France are important here. This does not means that EuroUnion would be destroyed - some countries live in EU without Euro and they are just fine." } ]

[ { "docid": "40338", "title": "", "text": "\"If you are going to keep your US bank account for any period of time, the very best option I know of is to withdraw Euros from an atm using your US card once you are in Germany. I draw on my US account regularly (I'm in Munich) and always get the going \"\"mid market\"\" exchange rate, which is better than what you get from a currency conversion service, transfer agency, or bank transfer, and there are no fees from the atm or my bank for the currency conversion or withdrawal. Of course you should check with your bank to verify their rules and fees for atm use internationally. It would also be wise to put a travel advisory on your account to be sure your transaction is not denied because you are out of country.\"" }, { "docid": "275902", "title": "", "text": "This situation sounds better than most, the company it seems likely to be profitable in the future. As such it is a good candidate to have a successful IPO. With that your stock options are likely to be worth something. How much of that is your share is likely to be very small. The workers that have been their since the beginning, the venture capitalist, and the founders will make the majority of profits from an IPO or sale. Since you and others hired at a similar time as you are assuming almost no risk it is fair that your share of the take is small. Despite being 1/130 employees expect your share of the profits to be much smaller than .77%. How about we go with .01%? Lets also assume that they go public in 2.5 years and that revenues during that time continue to increase by about 25M/year. Profit margins remains the same. So revenues to 112M, profits to 22.5M. Typically the goal for business is to pay no more than 5 times profits, that could be supplanted by other factors, but let's assume that figure. So about 112M from the IPO. So .01% of that is about 11K. That feels about right. Keep in mind there would be underwriting fees, and also I would discount that figure for things that could go wrong. I'd be at about 5K. That would be my expected value figure, 5K. I'd also understand that there is a very small likelihood that I receive that amount. The value received is more likely to be zero, or enough to buy a Ferarri. There might also be some value in getting to know these people. If this fails will their next venture be a success. In my own life, I went to work for a company that looked great on paper that just turned out to be a bust. Great concept, horrible management, and within a couple of years of being hired, the company went bust. I worked like a dog for nothing." }, { "docid": "592578", "title": "", "text": "\"Anyone remember \"\"Fucked Company\"\" dot-com? It was a hit during the dot-com bust. a dot-com company deadpool blog/website... And I recall the founder tried to sell customized pr0n videos (like 30 secs or so) of POV shot nailing some girl while she screamed your name. I think that lasted all but a week before he shut that idea off. I want to know what he was thought about it, what happened, and what went wrong... demand? costs? The open flood of just other pr0n movies, and people not caring about stroking the ego of hearing their name, instead of just stroking other things? not that I care so so much, it was just something crazy from way back when that popped into my mind.\"" }, { "docid": "273387", "title": "", "text": "\"&gt;If we lose our reserve currency status, we would have to pay it off with a different currency. No, a debt that comes into being as dollar-denominated remains dollar-denominated. Reserve currency status doesn't change this. The advantage of having the reserve currency is that other countries have a strong motive to accumulate dollars. Because of this we can pay for our imports in dollars. If we no longer had the reserve currency we would lose the ability to run a persistent trade deficit without borrowing foreign currency to do so. To some extent this would self-correct. If foreigners no longer desired to hoard dollars, the flow of dollars back in to the US would bring down the trade deficit. Going forward, we'd have to \"\"live within our means\"\" with respect to foreign trade, funding imports with exports. Domestically every country that has its own currency, not just the US, can use that currency to fully fund its own domestic productive capacity. Printing money doesn't make a poor country rich but it does allow any country to fully realize its own potential. &gt;Other countries don't have the luxury of just printing out massive amounts of money to pay off their debts. This is only true when a country borrows in a currency it doesn't issue. When a country spends in its own currency its policy space is constrained by inflation. To the extent any country uses, pegs to or borrows in someone else's currency that policy space is narrowed by the need to first borrow or earn that currency. &gt;if the UN followed through with its suggestion to create a global reserve currency or reverted back to the gold standard The euro shows us where that road leads. Countries that give up monetary authority give up sovereignty and when they find themselves in a situation where the monetary policy they no longer control is at odds with their needs, their economies get torn apart. That's why one country, one currency is good policy. Stability and maximum policy space is achieved when fiscal authority, political legitimacy and monetary authority are consolidated at the same level. It's a three-legged stool that becomes a fragile balancing act when one leg is taken away. Also, there's a whole side discussion to be had on what the alternatives are to the dollar as a reserve currency. The dollar is in that position for a reason.\"" }, { "docid": "87057", "title": "", "text": "The currency market, more often referred as Forex or FX, is the decentralized market through which the currencies are exchanged. To trade currencies, you have to go through a broker or an ECN. There are a lot's of them, you can find a (small) list of brokers here on Forex Factory. They will allow you to take very simple position on currencies. For example, you can buy EUR/USD. By doing so, you will make money if the EUR/USD rate goes up (ie: Euro getting stronger against the US dollar) and lose money if the EUR/USD rate goes down (ie: US dollar getting stronger against the Euro). In reality, when you are doing such transaction the broker: borrows USD, sell it to buy EUR, and place it into an Euro account. They will charge you the interest rate on the borrowed currency (USD) and gives you the interest and the bought currency (EUR). So, if you bought a currency with high interest rate against one with low interest rate, you will gain the interest rate differential. But if you sold, you will lose the differential. The fees from the brokers are likely to be included in the prices at which you buy and sell currencies and in the interest rates that they will charge/give you. They are also likely to gives you big leverage to invest far more than the money that you deposited in their accounts. Now, about how to make money out of this market... that's speculation, there are no sure gains about it. And telling you what you should do is purely subjective. But, the Forex market, as any market, is directed by the law of supply and demand. Amongst what impacts supply and demands there are: Also, and I don't want to judge your friends, but from experience, peoples are likely to tell you about their winning transaction and not about their loosing ones." }, { "docid": "128048", "title": "", "text": "\"When you invest in an S&P500 index fund that is priced in USD, the only major risk you bear is the risk associated with the equity that comprises the index, since both the equities and the index fund are priced in USD. The fund in your question, however, is priced in EUR. For a fund like this to match the performance of the S&P500, which is priced in USD, as closely as possible, it needs to hedge against fluctuations in the EUR/USD exchange rate. If the fund simply converted EUR to USD then invested in an S&P500 index fund priced in USD, the EUR-priced fund may fail to match the USD-priced fund because of exchange rate fluctuations. Here is a simple example demonstrating why hedging is necessary. I assumed the current value of the USD-priced S&P500 index fund is 1,600 USD/share. The exchange rate is 1.3 USD/EUR. If you purchase one share of this index using EUR, you would pay 1230.77 EUR/share: If the S&P500 increases 10% to 1760 USD/share and the exchange rate remains unchanged, the value of the your investment in the EUR fund also increases by 10% (both sides of the equation are multiplied by 1.1): However, the currency risk comes into play when the EUR/USD exchange rate changes. Take the 10% increase in the price of the USD index occurring in tandem with an appreciation of the EUR to 1.4 USD/EUR: Although the USD-priced index gained 10%, the appreciation of the EUR means that the EUR value of your investment is almost unchanged from the first equation. For investments priced in EUR that invest in securities priced in USD, the presence of this additional currency risk mandates the use of a hedge if the indexes are going to track. The fund you linked to uses swap contracts, which I discuss in detail below, to hedge against fluctuations in the EUR/USD exchange rate. Since these derivatives aren't free, the cost of the hedge is included in the expenses of the fund and may result in differences between the S&P500 Index and the S&P 500 Euro Hedged Index. Also, it's important to realize that any time you invest in securities that are priced in a different currency than your own, you take on currency risk whether or not the investments aim to track indexes. This holds true even for securities that trade on an exchange in your local currency, like ADR's or GDR's. I wrote an answer that goes through a simple example in a similar fashion to the one above in that context, so you can read that for more information on currency risk in that context. There are several ways to investors, be they institutional or individual, can hedge against currency risk. iShares offers an ETF that tracks the S&P500 Euro Hedged Index and uses a over-the-counter currency swap contract called a month forward FX contract to hedge against the associated currency risk. In these contracts, two parties agree to swap some amount of one currency for another amount of another currency, at some time in the future. This allows both parties to effectively lock in an exchange rate for a given time period (a month in the case of the iShares ETF) and therefore protect themselves against exchange rate fluctuations in that period. There are other forms of currency swaps, equity swaps, etc. that could be used to hedge against currency risk. In general, two parties agree to swap one quantity, like a EUR cash flow, payments of a fixed interest rate, etc. for another quantity, like a USD cash flow, payments based on a floating interest rate, etc. In many cases these are over-the-counter transactions, there isn't necessarily a standardized definition. For example, if the European manager of a fund that tracks the S&P500 Euro Hedged Index is holding euros and wants to lock in an effective exchange rate of 1.4 USD/EUR (above the current exchange rate), he may find another party that is holding USD and wants to lock in the respective exchange rate of 0.71 EUR/USD. The other party could be an American fund manager that manages a USD-price fund that tracks the FTSE. By swapping USD and EUR, both parties can, at a price, lock in their desired exchange rates. I want to clear up something else in your question too. It's not correct that the \"\"S&P 500 is completely unrelated to the Euro.\"\" Far from it. There are many cases in which the EUR/USD exchange rate and the level of the S&P500 index could be related. For example: Troublesome economic news in Europe could cause the euro to depreciate against the dollar as European investors flee to safety, e.g. invest in Treasury bills. However, this economic news could also cause US investors to feel that the global economy won't recover as soon as hoped, which could affect the S&P500. If the euro appreciated against the dollar, for whatever reason, this could increase profits for US businesses that earn part of their profits in Europe. If a US company earns 1 million EUR and the exchange rate is 1.3 USD/EUR, the company earns 1.3 million USD. If the euro appreciates against the dollar to 1.4 USD/EUR in the next quarter and the company still earns 1 million EUR, they now earn 1.4 million USD. Even without additional sales, the US company earned a higher USD profit, which is reflected on their financial statements and could increase their share price (thus affecting the S&P500). Combining examples 1 and 2, if a US company earns some of its profits in Europe and a recession hits in the EU, two things could happen simultaneously. A) The company's sales decline as European consumers scale back their spending, and B) the euro depreciates against the dollar as European investors sell euros and invest in safer securities denominated in other currencies (USD or not). The company suffers a loss in profits both from decreased sales and the depreciation of the EUR. There are many more factors that could lead to correlation between the euro and the S&P500, or more generally, the European and American economies. The balance of trade, investor and consumer confidence, exposure of banks in one region to sovereign debt in another, the spread of asset/mortgage-backed securities from US financial firms to European banks, companies, municipalities, etc. all play a role. One example of this last point comes from this article, which includes an interesting line: Among the victims of America’s subprime crisis are eight municipalities in Norway, which lost a total of $125 million through subprime mortgage-related investments. Long story short, these municipalities had mortgage-backed securities in their investment portfolios that were derived from, far down the line, subprime mortgages on US homes. I don't know the specific cities, but it really demonstrates how interconnected the world's economies are when an American family's payment on their subprime mortgage in, say, Chicago, can end up backing a derivative investment in the investment portfolio of, say, Hammerfest, Norway.\"" }, { "docid": "113846", "title": "", "text": "\"Any clearing/ legal experts out there? Is this possible- and if so, is it that big of a deal? Here are my thoughts: 1. The EU is right to request euros to be cleared on \"\"home soil\"\" for sovereignty reasons since 2/3s of euro currency is cleared in London. 2. Moving euro clearing back to the eurozone... would just mirror US regulations. Whats the big deal?\"" }, { "docid": "250790", "title": "", "text": "\"&gt; but the buying power of that money can be significantly reduced to the point where it's fundamentally useless, i.e. inter-war Germany and many countries in South and Central America. That's true, but *how* does that come about? The effect on buying power stems from the level of spending in the present period. Too little leaves you anywhere from outright deflation and contraction to weaker growth falling short of capacity. Too much reaches capacity and keeps spending, bidding up prices and driving down purchasing power. It has nothing to do with debt:GDP or interest payments. &gt; Germany managed to skate by by creating a new Deutschmark in a confidence trick, and it worked because Germany is a solid, iron clad manufacturing powerhouse of a lot of stuff. There are two important differences between inter-war Germany and the US. First is that inter-war Germany *lost a war*. This real shock is kind of important. When you're talking about buying power of money, one side of it is the amount of money in circulation but the other side of it is how much real output there is to buy and German real output capacity collapsed after the war. Their most productive regions were occupied territory and they were no longer a powerhouse manufacturing a lot of stuff, driving down the value of their currency. So lesson number one from Germany: real output collapse harms your currency. The second problem is that losing a war left Germany saddled with war reparations denominated in foreign currency. When you're on the hook for something you don't print you're in a situation where you can run out of money and that's exactly what happened to them. They tried printing more of their own currency to buy the foreign stuff with but that quickly drove down the value of German currency. So lesson number two from Germany is you don't want to be on the hook for a currency you don't issue. Put the two together and you have a real supply shock + foreign-denominated debt eviscerating the buying power of German currency. It wasn't debt:GDP but the real basis for their economy collapsing out from under them pushed along by a need for foreign currency. &gt;My question is, at what point do we engage Washington's unlimited money printing presses until we reach that point? In answer to your question, the printing presses are what funds the real economy. The worry in terms of avoiding \"\"that point\"\" is in making sure we keep that real economy productive and fully funded. Ironically, taking our eye off the ball to focus on budget balance at the expense of real output pushes the economy in the direction you're afraid of going. See also: the euro zone today.\"" }, { "docid": "162795", "title": "", "text": "&gt; fucked over all local coffee shops Planning permissions aside, I would think the consumers of Brighton did that, not Starbucks. Or did they offer free coffee until all the other coffee shops went bust? But what do I know, I prefer McDonalds coffee to Starbucks." }, { "docid": "47163", "title": "", "text": "\"Depends on the country, whether its a currency issuer with floating exchange rate, and what the debt is denominated in. For instance, the US has no real debt, b/c its all in US dollars and can be printed at any time. It has no need to borrow anything, it issues its own currency. It used to be different 4 decades ago, on the gold standard, so in general people still think currency issuers need to borrow (or earn) to spend. Just a relic in thinking. But when the country does not issue its own currency, then it does need to earn or borrow in order to spend. In this case, it could borrow from anywhere that will lend it money. In US, a state would fit this description. Or Greece, as it borrowed Euros, for which it is not an issuer of. EDIT: just came across this blog http://pragcap.com/where-does-the-money-come-from Its title, \"\"Where does the money come from\"\". Maybe he saw this question. Anyway, the US does not need to borrow money. Why would it borrow what it creates? From the video: \"\"Thinking is hard, that's why we don't do it a lot\"\". Great line.\"" }, { "docid": "240848", "title": "", "text": "\"Why will they find financing when they leave the Euro? Why would their currencies not simply hyperinflate due to excessive issuance in an attempt to devalue? Which is worse for unemployment, austerity or hyperinflation? &gt;they'd be expelled by Germany This is a union correct? Why do you assume Germany holds all the cards? I've read that Gonzalo Lira essay and have read Mish about everyday since 2009, yet still do not think it is so obvious that the Euro will collapse. I gained quite a bit of skepticism from Barry Eichengreen's paper on the [Breakup of the Euro Area.](http://www.nber.org/papers/c11654.pdf?new_window=1) What I see right now is that so far the ECB has only acted in such a way as to prevent outright deflation and meet its 2% inflation target, but not to continuously outright fund the profligate governments. They let the bond markets force those governments into contraction or into default whereas the fed, with its dual mandate, will always buy the US bonds and eventually will inflate the currency as opposed to having a sovereign default. So I think we will see the ECB continue to print as much is needed to meet its mandate but at the same time there will be defaults, bank nationalizations and failures, and a continued lack of growth in the Euro area until eventually the austerity measures bring revenue and spending in line at which point the countries under heavy debt would be stupid not to default because they can self finance. Whereas in the US we are so dependent on deficit financing that as foreigners move further away from holding treasuries we become more susceptible to bond vigilantes taking the reigns which will force the feds hand into outright monetization. Then I think we will see our own government exacerbate inflation by bidding on the same goods that those dollars which no longer are going into treasuries are bidding on. Then I think we'll finally see bad inflation in the US. Of course as long as there is hoards of money fleeing Europe for the US \"\"safe haven,\"\" the lack of foreign treasury investment is pretty moot. *spelling\"" }, { "docid": "80943", "title": "", "text": "\"&gt; Just because at some random point in time, the European economy was doing OK, doesn't mean that it will definitely be ok I'm not claiming it will be \"\"definitely be ok\"\". definitely ok != utterly doomed. &gt; What happens when the Greeks default? If they were paying in drachma, they wouldn't default. They'd print more drachma and inflation would occur. That's how currency imbalances adjust. Germany wants it both ways. They want a stable Europe-wide currency but they don't want a Europe-wide economy, they want their economy isolated from the problems in the rest of Europe. Germany should leave the Euro.\"" }, { "docid": "149341", "title": "", "text": "\"I'd recommend an online FX broker like XE Trade at xe.com. There are no fees charged by XE other than the spread on the FX conversion itself (which you'll pay anywhere). They have payment clearing facilities in several countries (including UK BACS) so provided you're dealing with a major currency it should be possible to transfer money \"\"free\"\" (of wire charges at least). The FX spread will be much better than you would get from a bank (since FX is their primary business). The additional risk you take on is settlement risk. XE will not pay the sterling amount to your UK bank account until they have received the Euro payment into their account. If XE went bankrupt before crediting your UK account, but after you've paid them your Euros - you could lose your money. XE is backed by Custom House, which is a large and established Canadian firm - so this risk is very small indeed. There are other choices out there too, UKForex is another that comes to mind - although XE's rates have been the best of those I've tried.\"" }, { "docid": "430696", "title": "", "text": "From my reading of the wikipedia page (CRT), this only happens if you deposit or withdraw currency, not checks. The idea behind this is that checks, ACH, etc. leave paper trails that can be tracked. Cash doesn't, so it gets this extra level of scrutiny. If yu get a cashiers check or a money order to pay a bill, I don't think a CRT is created. If you withdraw $15,000 to buy a car in cash (1 stack of $100 bills), then a CRT would be generated. It still isn't a problem, as long as you can show a bill of sale showing where the money went (or came from, if you are the seller). The IRS has a FAQ about this. It says (taken from several spots at that page): Cash is money. It is currency and coins of the United States and any other country. A cashier’s check, bank draft, traveler’s check, or money order with a face amount of more than $10,000 is not treated as cash and a business does not have to file Form 8300 when it receives them. These items are not defined as cash because, if they were bought with currency, the bank or other financial institution that issued them must file a Currency Transaction Report. The exception to this is if you are buying something with a resale value of more than $10k with a check, money order, etc of less than $10k." }, { "docid": "567891", "title": "", "text": "Contact the bank where the money is being sent. They should have a record of it, and they will know what happened to it. In some, maybe even most, banks accounts are never truly closed, they are just made inactive. If that is the case with this bank the 300 euro may be sitting in the account as a credit. If they have the money, ask for them to send it to back by reversing the transaction. If it has been too long they may have another procedure for refunding the money. They might even send it by check. If they already reversed the transaction, contact your bank to determine where the funds went." }, { "docid": "153251", "title": "", "text": "There contracts called an FX Forwards where you can get a feel for what the market thinks an exchange rate will be in the future. Now exchange rates are notoriously uncertain, but it is worth noting that at current prices market believes your Krona will be worth only 0.0003 Euro less three years from now than it is worth now. So, if you are considering taking money out of your investments and converting it to Euro and missing out on three years of dividends and hopefully capital gains its certainly possible this may work out for you but this is unlikely. If you are at all uncertain that you will actually move this is an even worse idea as paying to convert money twice would be an additional expense on top of the missed returns. There are FX financial products (futures and forwards) where you can get exposure to FX without having to put the full amount down. This could help hedge your house value but this can be extremely expensive over time for individual investors and would almost certainly not work in your favor. Something that could help reduce your risk a bit would be to invest more heavily in European even Irish (and British?) stocks which will move along with the currency and economy. You can lose some diversification doing this, but it can help a little." }, { "docid": "594655", "title": "", "text": "\"Forex. I will employ my skill for \"\"suspension of disbelief\"\" and answer with no visceral reaction to Bitcoin itself. The Euro is not an 'investment.' It's a currency. People trade currencies in order to capture relative movements between pairs of currencies. Unlike stocks, that have an underlying business and potential for growth (or failure, of course) a currency trade is a zero sum game, two people on opposite sides of a bet. Bitcoin has no underlying asset either, no stock, no commodity. It trades, de facto, like a currency, and for purposes of objective classification, it would be considered a currency, and held similar to any Forex position.\"" }, { "docid": "150543", "title": "", "text": "\"I think you can do it as long as those money don't come from illegal activities (money laundering, etc). The only taxes you should pay are on the interest generated by those money while sitting in the UK bank account. Since I suppose you already paid taxes on those money in Greece while you were earning those money. About being audited, in my own experience banks don't ask you much where your money are coming from when you bring money to them, they are very willing to help, and happy. (It's a differnte story when you ask to borrow money). When I opened a bank account in US I did not even have an SSN, but they didn't care much they just took my passport and used the passport number for registering the account. Obviously on the interest generated by the money in the US bank account I had to pay taxes, but it was easy because I simply let the IRS via the bank to withdarw the 27% on the interest generated (not on the capital deposited). I didn't put a huge amount of money there I had to live there for 1 year or some more. Maybe if i deposited a huge amount of money someone would have come to ask me how did I make all those money, but those money were legally generated by me working in Italy before so I didn't have anything to be afraid about. BTW: in Italy I was thinking to move money to a German bank in Germany. The risk of default is a nightmare, something of completly new now in UE compared to the past where each state had its own currency. According to Muro history says that in case of default it happened that some government prevented people from withdrawing money form bank accounts: \"\"Yes, historically governments have shut down banks to prevent people from withdrawing their money in times of crisis. See Argentina circa 2001 or US during Great Depression. The government prevented people from withdrawing their money and people could do nothing while their money rapidly lost value.\"\" but in case Greece prevents people from withdrwaing money, those money are still in EURO, so i'm wondering what would be the effect. I mean would it be fair that a Greek guy can not withdraw is EURO money whilest an Italian guy can withdraw the same currency money in Italy?!\"" }, { "docid": "561669", "title": "", "text": "If your country of residence is going to be Germany, it is advisable to move money to Germany at the earliest opportunity. It is hard to predict what will happen in future, i.e. whether Reais will rise or fall compared to Euro. The question of whether to leave the funds in Brazil or not, should be looked at: If you had money in Euro, would you have moved it to Brazil or kept it in Germany?" } ]

[ { "docid": "136073", "title": "", "text": "If the Euro went bust then it would be the 12th government currency to go belly up in Europe (according to this website). Europe holds the record for most failed currencies. It also holds the record for the worst hyperinflation in history - Yugoslavia 1993. I'm not sure what would happen if the Euro failed. It depends on how it fails. If it fails quickly (which most do) then there will be bank runs, bank holidays, capital controls, massive price increases, price controls, and just general confusion as people race to get rid of their Euros. Black markets for everything will pop up if the price controls remain in place. Some countries may switch to a foreign currency (i.e. the US dollar if it is still around) until they can get their own currency in circulation." } ]

[ { "docid": "475804", "title": "", "text": "If they default and try to stay in the Euro, they will be shut out of any chance of financing but they will be obliged to conduct business in a currency that they cannot afford. Their businesses will close, unemployment rise until they have no option to stay in the Euro. Instead of that, they will reissue the Peseta, Lira, Drachma, etc. and then devalue. That will allow their real estate, tourism and manufacturing to be very competitive. If they could stay in the Euro after default they would starve, but I don't think they could stay, even if they wanted to because they'd be expelled by Germany. Here is [Gonzalo Lira's suggestion as to how Spain should have already left the Euro](http://gonzalolira.blogspot.com/2012/04/will-there-be-corralito-in-spain.html)" }, { "docid": "166412", "title": "", "text": "\"Quantitative Easing Explained: http://www.npr.org/blogs/money/2010/10/07/130408926/quantitative-easing-explained The short of it is that you're right; the Fed (or another country's Central Bank) is basically creating a large amount of new money, which it then injects into the economy by buying government and institutional debt. This is, in fact, one of the main jobs of the central bank for a currency; to manage the money supply, which in most fiat systems involves slowly increasing the amount of money to keep the economy growing (if there isn't enough money moving around in the economy it's reflected in a slowdown in GDP growth), while controlling inflation (the devaluation of a unit of currency with respect to most or all things that unit will buy including other currencies). Inflation's primary cause is defined quite simply as \"\"too many dollars chasing too few goods\"\". When demand is low for cash (because you have a lot of it) while demand for goods is high, the suppliers of those goods will increase their price for the goods (because people are willing to pay that higher price) and will also produce more. With quantitative easing, the central bank is increasing the money supply by several percentage points of GDP, much higher than is normally needed. This normally would cause the two things you mentioned: Inflation - inflation's primary cause is \"\"too many dollars chasing too few goods\"\"; when money is easy to get and various types of goods and services are not, people \"\"bid up\"\" the price on these things to get them (this usually happens when sellers see high demand for a product and increase the price to take advantage and to prevent a shortage). This often happens across the board in a situation like this, but there are certain key drivers that can cause other prices to increase (things like the price of oil, which affects transportation costs and thus the price to have anything shipped anywhere, whether it be the raw materials you need or the finished product you're selling). With the injection of so much money into the economy, rampant inflation would normally be the result. However, there are other variables at play in this particular situation. Chief among them is that no matter how much cash is in the economy, most of it is being sat on, in the form of cash or other \"\"safe havens\"\" like durable commodities (gold) and T-debt. So, most of the money the Fed is injecting into the economy is not chasing goods; it's repaying debt, replenishing savings and generally being hoarded by consumers and institutions as a hedge against the poor economy. In addition, despite how many dollars are in the economy right now, those dollars are in high demand all around the world to buy Treasury debt (one of the biggest safe havens in the global market right now, so much so that buying T-debt is considered \"\"saving\"\"). This is why the yields on Treasury bonds and notes are at historic lows; it's bad everywhere, and U.S. Government debt is one of the surest things in the world market, especially now that Euro-bonds have become suspect. Currency Devaluation - This is basically specialized inflation; when there are more dollars in the market than people want to have in order to use to buy our goods and services, demand for our currency (the medium of trade for our goods and services) drops, and it takes fewer Euros, Yen or Yuan to buy a dollar. This can happen even if demand for our dollars inside our own borders is high, and is generally a function of our trade situation; if we're buying more from other countries than they are from us, then our dollars are flooding the currency exchange markets and thus become cheaper because they're easy to get. Again, there are other variables at play here that keep our currency strong. First off, again, it's bad everywhere; nobody's buying anything from anyone (relatively speaking) and so the relative trade deficits aren't moving much. In addition, devaluation without inflation is self-stablizing; if currency devalues but inflation is low, the cheaper currency makes the things that currency can buy cheaper, which encourages people to buy them. At the same time, the more expensive foreign currency increases the cost in dollars of foreign-made goods. All of this can be beneficial from a money policy standpoint; devaluation makes American goods cheaper to Americans and to foreign consumers alike than foreign goods, and so a policy that puts downward pressure on the dollar but doesn't make inflation a risk can help American manufacturing and other producer businesses. China knows this just as well as we do, and for decades has been artificially fixing the exchange rate of the Renmin B (Yuan) lower than its true value against the dollar, meaning that no matter how cheap American goods get on the world market, Chinese goods are still cheaper, because by definition the Yuan has greater purchasing power for the same cost in dollars. In addition, dollars aren't only used to buy American-made goods and services. The U.S. has positioned its currency over the years to be an international medium of trade for several key commodities (like oil), and the primary currency for global lenders like the IMF and the World Bank. That means that dollars become necessary to buy these things, and are received from and must be repaid to these institutions, and thus the dollar has a built-in demand pretty much regardless of our trade deficits. On top of all that, a lot of countries base their own currencies on our dollar, by basically buying dollars (using other valuable media like gold or oil) and then holding that cash in their own central banks as the store of value backing their own paper money. This is called a \"\"dollar board\"\". Their money becomes worth a particular fraction of a dollar by definition, and that relationship is very precisely controllable; with 10 billion dollars in the vault, and 20 billion Kabukis issued from Kabukistan's central bank, a Kabuki is worth $.50. Print an additional 20 billion Kabuki and the value of one Kabuki decreases to $.25; buy an additional 10 billion dollars and the Kabuki's value increases again to $.50. Quite a few countries do this, mostly in South America, again creating a built-in demand for U.S. dollars and also tying the U.S. dollar to the value of the exports of that country. If Kabukistan's goods become highly demanded by Europe, and its currency increases relative to the dollar, then the U.S. dollar gets a boost because by definition it is worth an exact, fixed number of Kabukis (and also because a country with a dollar board typically has no problem accepting dollars as payment and then printing Kabukis to maintain the exchange rate)\"" }, { "docid": "57923", "title": "", "text": "It's not that simple. The problem is that Greece is not in control if it's own finances. Neither are any of the other countries. The Eurozone doesn't have the power to do things like raise taxes or sell government bonds, and the individual governments don't have the power to float the currency. The Eurozone is going to unwind over the a decade. Greece will leave, but there are another 4-5 countries that should leave the Euro for the same reasons as Greece. Spain seems likely to be the next up, with Italy not far behind. The Euro was never designed to break apart. We really have no idea what the shockwaves of a country leaving the currency will look like." }, { "docid": "290930", "title": "", "text": "If you are really worried your best bet is to move all your cash from Sterling into a foreign currency that you think will be resilient should Brexit occur. I would avoid the Euro! You could look at the US Dollar perhaps, make sure you are aware of the charges for moving the money over and back again, as you will at some stage probably want to get back into Sterling once it settles down, if it does indeed fall. Based on my experience on the stock markets (I am not a currency trader) I would expect the pound to fall fairly sharply on a vote for Brexit and the Euro to do the same. Both would probably rebound quite quickly too as even if there is a Brexit vote it doesn't mean the UK Government will honour the outcome or take the steps quickly. ** I AM NOT A FINANCIAL ADVISOR AND HAVE NO QUALIFICATIONS AS SUCH **" }, { "docid": "457390", "title": "", "text": "If we postulate that there is at least some element of truth to the phrase 'A leopard does not change his spots' and then consider this tidbit He conveniently forgets to mention his 1.5 million dollar fraud fine from the SEC over investment “advice” he sold through a news letter. The SEC claimed and the judge agreed that the report was “replete with lies”. I think that gives you just about all you might need to know regarding the man behind the video, and the nature of it's content. Oh, and it's purpose? To SELL YOU the same said newsletter. I guess it's natural for Stansberry to feel as he does. After all if the US gov had just busted me for conning and lying to folks, and fined ME 1.5Mill, I'd be having some pretty intense lurid fantasies about it going down in flames, and trying to hide any money I had left offshore also. A huge amount of his argument hinges on the US no longer being the world's reserve currency. Firstly, while I'll admit I'm none too happy with the way the national debt has been managed for oh, around 30 years how, (which includes I will note going from a pretty much balanced budget, to around an 80% increase in the debt from 2001 through 2008, when 'times were good' and there was little need to spend money we didn't have), when compared to a lot of other countries, we still don't look that bad. You have to ask yourself this first, if not the US, then WHO? are the governments of the world going to trust China? could the Yen handle the load? Is the Euro any better off especially considering problems in Greece, Ireland, etc. Do countries like Switzerland have enough liquidity and available ways to invest there? In order for the US to STOP being the world's reserve currency, you must have something to replace it with, and really, can we realistically think of one country/currency with the capability to become a new 'world reserve currency'??? Secondly, even then should such a shift actually happen, it doesn't mean people will ALL just magically stop buying US debt. Yes the demand would go down, but it would not go to zero. There are after all a worldfull of other countries who's money is right now NOT the world reserve currency, and yet they are able to sell bonds and people and even other countries invest there. (China for example does not invest exclusively in the US), so yeah we might have to start paying more interest to get people to buy US debt, but it's not like the demand will go away. Save your money, save your time, don't buy into this dung." }, { "docid": "210789", "title": "", "text": "I'd have anything you would need for maybe 3-6 months stored up: food, fuel, toiletries, other incidentals. What might replace the currency after the Euro collapses will be the least of your concerns when it does collapse." }, { "docid": "61514", "title": "", "text": "e.g. a European company has to pay 1 million USD exactly one year from now While that is theoretically possible, that is not a very common case. Mostly likely if they had to make a 1 million USD payment a year from now and they had the cash on hand they would be able to just make the payment today. A more common scenario for currency forwards is for investment hedging. Say that European company wants to buy into a mutual fund of some sort, say FUSEX. That is a USD based mutual fund. You can't buy into it directly with Euros. So if the company wants to buy into the fund they would need to convert their Euros to to USD. But now they have an extra risk parameter. They are not just exposed to the fluctuations of the fund, they are also exposed to the fluctuations of the currency market. Perhaps that fund will make a killing, but the exchange rate will tank and they will lose all their gains. By creating a forward to hedge their currency exposure risk they do not face this risk (flip side: if the exchange rate rises in a favorable rate they also don't get that benefit, unless they use an FX Option, but that is generally more expensive and complicated)." }, { "docid": "539733", "title": "", "text": "\"I still think this tech boom is different. The 2000 boom/bust was so much based around a fiction. Namely, the infrastructure and logistics. The country was not yet set up for streaming services or online retail, the main drivers of that boom/bust. Today, broadband is ubiquitous, there's a computer in every home, and a smartphone in every pocket. Big data and automation drives vastly more efficient logistics, with the only main obstacle still yet to be worked out is AI that will allow companies like Uber and Tesla to realize their valuations. And the main drivers of tech are the so-called FAANG stocks (Facebook, Alphabet, Amazon, Apple and Netflix), as well as other tech like Microsoft and Cisco. What's the difference between these and, say, Pets.com or HotBot? *These are real companies.* Pets.com went boom to bust in less than a year. Broadcast.com sold for $5+billion...in 1999 (u kidin me?) Today's \"\"overvalued\"\" stocks have product, customers, business models and strategies in place. And the infrastructure they depend on actually exists.\"" }, { "docid": "354159", "title": "", "text": "If any Euro countries leave the Euro, they will have to impose capital flow restrictions - it's a given, to avoid a complete implosion of the entire system. The idea of retroactive controls is very interesting - this may be one of the first times in a currency collapse that such a system would be feasible (i.e., both the country being fled from and the countries being fled to are under common control). No doubt they would try such a thing if they thought they could get away with it." }, { "docid": "245727", "title": "", "text": "Calculate the theoretical forward price using covered interest parity, then compare it to the actual forward price of $1.04/euro. Buy the cheap one and sell the expensive one (this will involve borrowing dollars or euros at the US or Euro interest rate to buy the other currency and longing or shorting the 6-month forward to perfectly hedge your currency exposure)." }, { "docid": "355990", "title": "", "text": "It would essentially make goods from other countries more cheaper than goods from US. And it would make imports from these countries to China more expensive. The below illustration is just with 2 major currencies and is more illustrative to show the effect. It does not actually mean the goods from these countries would be cheaper. 1 GBP = 1.60 USD 1 EUR = 1.40 USD 1 CNY = 0.15 USD Lets say the above are the rates for GBP, EUR, CNY. The cost of a particular goods (assume Pencils) in international market is 2 USD. This means for the cost of manufacturing this should be less than GBP 1.25 in UK, less than 1.43 in Euro Countires, less than 13.33 CNY in China. Only then export would make sense. If the real cost of manufacturing is say 1.4 GBP in UK, 1.5 EUR in Euro countires, clearly they cannot compete and would loose. Now lets say the USD has appreciated by 20% against other currencies. The CNY is at same rate. 1 GBP = 1.28 USD 1 EUR = 1.12 USD 1 CNY = 0.15 USD Now at this rate the cost of manufacturing should be less than GBP 1.56 GBP, less than 1.78 EUR in Euro Countires. In effect this is more than the cost of manufacturing. So in effect the goods from other countires have become cheaper/compatative and goods from China have become expensive. Similarly the imports from these countires to China would be more expensive." }, { "docid": "179822", "title": "", "text": "To be more technical the Eurozone. UK is in the EU, but it's currency is fine. I hope you're not getting downvoted for the technicality. Greece can't print money, it makes default more likely and that's a result of the Euro. That's the core of the problem. Europe wanted a shared currency without a shared budgetary process, this was going to happen eventually." }, { "docid": "80943", "title": "", "text": "\"&gt; Just because at some random point in time, the European economy was doing OK, doesn't mean that it will definitely be ok I'm not claiming it will be \"\"definitely be ok\"\". definitely ok != utterly doomed. &gt; What happens when the Greeks default? If they were paying in drachma, they wouldn't default. They'd print more drachma and inflation would occur. That's how currency imbalances adjust. Germany wants it both ways. They want a stable Europe-wide currency but they don't want a Europe-wide economy, they want their economy isolated from the problems in the rest of Europe. Germany should leave the Euro.\"" }, { "docid": "567891", "title": "", "text": "Contact the bank where the money is being sent. They should have a record of it, and they will know what happened to it. In some, maybe even most, banks accounts are never truly closed, they are just made inactive. If that is the case with this bank the 300 euro may be sitting in the account as a credit. If they have the money, ask for them to send it to back by reversing the transaction. If it has been too long they may have another procedure for refunding the money. They might even send it by check. If they already reversed the transaction, contact your bank to determine where the funds went." }, { "docid": "162795", "title": "", "text": "&gt; fucked over all local coffee shops Planning permissions aside, I would think the consumers of Brighton did that, not Starbucks. Or did they offer free coffee until all the other coffee shops went bust? But what do I know, I prefer McDonalds coffee to Starbucks." }, { "docid": "124254", "title": "", "text": "It's impossible to determine which event will cause a major shift for a certain currency pair. However, this does not mean that it's not possible to identify events that are important to the overall market sentiment and direction. There are numerous sites that provide a calendar for upcoming and past events and their impact which is most of the time indicated as low, medium and high. Such sites are: Edit: I would like to add to that, that while these are major market movers, you cannot forget that they mainly provide a certain direction for the market but that it's not always clear in which direction the market will go. A recent and prime example of a major event that triggered opposite effects of what you would expect, is the ECB meeting that took place the 3rd of December. Due to the fact that the market already priced in further easing by the ECB the euro strengthened instead of weakening compared to the dollar. This strengthening happened even though the ECB did in fact adjust the deposit by 10 base points to -0.30 % and increased the duration of the QE. Taking above example into consideration it's important to always remember that fundamentals are hard to grasp and that it will take a while to make it a second nature and become truly successful in this line of trading. Lastly, fundamentals are only a part of the complete picture. Don't lose sight of support and resistance levels as well as price action to determine when and how to enter a trade." }, { "docid": "111266", "title": "", "text": "When economies are strong, it is particularly alluring to have a single currency as it makes trade and tourism simpler and helps reduce costs. The problem comes when individual member economies get into trouble. Because the Eurozone is a loose grouping of nations, there is no direct equivalent of the US Federal government to coordinate a response, there is instead an odd mixture of National and Central government that makes it harder to get a unified approach to the economy (OK, it's maybe not so different to the US in reality). This lack of flexibility means that some of the key levers of international finance are compromised, for example a weak economy can't float its currency to improve exports. Similarly individual country's interest rates can't be adjusted to balance spending. I suspect the main reason though is political and based on concepts of sovereignty and national pride. The UK does the majority of its trade with the Eurozone, so the pros would possibly outweigh the cons, but the UK as a whole (and some of our papers in particular) have always regarded Europe with suspicion. Most Brits only speak English and find France and Germany a strange and obtuse place. The (almost) common language makes it easier to relate to the US and Canada than our near neighbours. It seems the perception amongst the political establishment is that any attempt to join the Euro is political suicide, while that is the case it is unlikely to happen. Purely from a personal perspective, I'd welcome the Euro except it means a lot of the products I routinely buy would become a lot more expensive if price is 'harmonised'. For an example compare the price of the iPod Touch in the UK (£209.99) to France(€299). The French pay £262 at the current exchange rate, which is close to 25% more. Ouch. See also my question about Canada adopting the US Dollar" }, { "docid": "231521", "title": "", "text": "My 0,02€ - I probably live in the same country as you. Stop worrying. The Euro zone has a 100.000€ guaranty deposit. So if any bank should fail, that's the amount you'll receive back. This applies to all bank accounts and deposits. Not to any investments. You should not have more than 100.000€ in any bank. So, lucky you, if you have more than that money, divide between a number of banks. As for the Euro, there might be an inflation, but at this moment the USA and China are in a currency battle that 'benefits' the Euro. Meaning you should not invest in dollars or yuan at this time. Look for undervalued currency to invest in as they should rise against the Euro." }, { "docid": "79777", "title": "", "text": "\"It's simply supply and demand. First, demand: If you're an importer trying to buy from overseas, you'll need foreign currency, maybe Euros. Or if you want to make a trip to Europe you'll need to buy Euros. Or if you're a speculator and think the USD will fall in value, you'll probably buy Euros. Unless there's someone willing to sell you Euros for dollars, you can't get any. There are millions of people trying to exchange currency all over the world. If more want to buy USD, than that demand will positively influence the price of the USD (as measured in Euros). If more people want to buy Euros, well, vice versa. There are so many of these transactions globally, and the number of people and the nature of these transactions change so continuously, that the prices (exchange rates) for these currencies fluctuate continuously and smoothly. Demand is also impacted by what people want to buy and how much they want to buy it. If people generally want to invest their savings in stocks instead of dollars, i.e., if lots of people are attempting to buy stocks (by exchanging their dollars for stock), then the demand for the dollar is lower and the demand for stocks is higher. When the stock market crashes, you'll often see a spike in the exchange rate for the dollar, because people are trying to exchange stocks for dollars (this represents a lot of demand for dollars). Then there's \"\"Supply:\"\" It may seem like there are a fixed number of bills out there, or that supply only changes when Bernanke prints money, but there's actually a lot more to it than that. If you're coming from Europe and want to buy some USD from the bank, well, how much USD does the bank \"\"have\"\" and what does it mean for them to have money? The bank gets money from depositors, or from lenders. If one person puts money in a deposit account, and then the bank borrows that money from the account and lends it to a home buyer in the form of a mortgage, the same dollar is being used by two people. The home buyer might use that money to hire a carpenter, and the carpenter might put the dollar back into a bank account, and the same dollar might get lent out again. In economics this is called the \"\"multiplier effect.\"\" The full supply of money being used ends up becoming harder to calculate with this kind of debt and re-lending. Since money is something used and needed for conducting of transactions, the number of transactions being conducted (sometimes on credit) affects the \"\"supply\"\" of money. Demand and supply blur a bit when you consider people who hoard cash. If I fear the stock market, I might keep all my money in dollars. This takes cash away from companies who could invest it, takes the cash out of the pool of money being used for transactions, and leaves it waiting under my mattress. You could think of my hoarding as a type of demand for currency, or you could think of it as a reduction in the supply of currency available to conduct transactions. The full picture can be a bit more complicated, if you look at every way currencies are used globally, with swaps and various exchange contracts and futures, but this gives the basic story of where prices come from, that they are not set by some price fixer but are driven by market forces. The bank just facilitates transactions. If the last price (exchange rate) is 1.2 Dollars per Euro, and the bank gets more requests to buy USD for Euros than Euros for USD, it adjusts the rate downwards until the buying pressure is even. If the USD gets more expensive, at some point fewer people will want to buy it (or want to buy products from the US that cost USD). The bank maintains a spread (like buy for 1.19 and sell for 1.21) so it can take a profit. You should think of currency like any other commodity, and consider purchases for currency as a form of barter. The value of currency is merely a convention, but it works. The currency is needed in transactions, so it maintains value in this global market of bartering goods/services and other currencies. As supply and demand for this and other commodities/goods/services fluctuate, so does the quantity of any particular currency necessary to conduct any of these transactions. A official \"\"basket of goods\"\" and the price of those goods is used to determine consumer price indexes / inflation etc. The official price of this particular basket of goods is not a fundamental driver of exchange rates on a day to day basis.\"" } ]

[ { "docid": "210789", "title": "", "text": "I'd have anything you would need for maybe 3-6 months stored up: food, fuel, toiletries, other incidentals. What might replace the currency after the Euro collapses will be the least of your concerns when it does collapse." } ]

[ { "docid": "273387", "title": "", "text": "\"&gt;If we lose our reserve currency status, we would have to pay it off with a different currency. No, a debt that comes into being as dollar-denominated remains dollar-denominated. Reserve currency status doesn't change this. The advantage of having the reserve currency is that other countries have a strong motive to accumulate dollars. Because of this we can pay for our imports in dollars. If we no longer had the reserve currency we would lose the ability to run a persistent trade deficit without borrowing foreign currency to do so. To some extent this would self-correct. If foreigners no longer desired to hoard dollars, the flow of dollars back in to the US would bring down the trade deficit. Going forward, we'd have to \"\"live within our means\"\" with respect to foreign trade, funding imports with exports. Domestically every country that has its own currency, not just the US, can use that currency to fully fund its own domestic productive capacity. Printing money doesn't make a poor country rich but it does allow any country to fully realize its own potential. &gt;Other countries don't have the luxury of just printing out massive amounts of money to pay off their debts. This is only true when a country borrows in a currency it doesn't issue. When a country spends in its own currency its policy space is constrained by inflation. To the extent any country uses, pegs to or borrows in someone else's currency that policy space is narrowed by the need to first borrow or earn that currency. &gt;if the UN followed through with its suggestion to create a global reserve currency or reverted back to the gold standard The euro shows us where that road leads. Countries that give up monetary authority give up sovereignty and when they find themselves in a situation where the monetary policy they no longer control is at odds with their needs, their economies get torn apart. That's why one country, one currency is good policy. Stability and maximum policy space is achieved when fiscal authority, political legitimacy and monetary authority are consolidated at the same level. It's a three-legged stool that becomes a fragile balancing act when one leg is taken away. Also, there's a whole side discussion to be had on what the alternatives are to the dollar as a reserve currency. The dollar is in that position for a reason.\"" }, { "docid": "554522", "title": "", "text": "I'll add this to what the other answers said: if you are a renter now, and the real estate you want to buy is a house to live in, then it may be worth it - in a currency devaluation, rent may increase faster than your income. If you pay cash for the home, you also have the added benefit of considerably reducing your monthly housing costs. This makes you more resilient to whatever the future may throw at you - a lower paying job, for instance, or high inflation that eats away at the value of your income. If you get a mortgage, then make sure to get a fixed interest rate. In this case, it protects you somewhat from high inflation because your mortgage payment stays the same, while what you would have had to pay in rent keeps going up an up. In both cases there is also taxes and insurance, of course. And those would go up with inflation. Finally, do make sure to purchase sensibly. A good rule of thumb on how much you can afford to pay for a home is 2.5x - 3.5x your annual income. I do realize that there are some areas where it's common for people to buy homes at a far greater multiple, but that doesn't mean it's a sensible thing to do. Also: I'll second what @sheegaon said; if you're really worried about the euro collapsing, it might give you some peace of mind to move some money into UK Gilts or US Treasuries. Just keep in mind that currencies do move against each other, so you'd see the euro value of those investments fluctuate all the time." }, { "docid": "275902", "title": "", "text": "This situation sounds better than most, the company it seems likely to be profitable in the future. As such it is a good candidate to have a successful IPO. With that your stock options are likely to be worth something. How much of that is your share is likely to be very small. The workers that have been their since the beginning, the venture capitalist, and the founders will make the majority of profits from an IPO or sale. Since you and others hired at a similar time as you are assuming almost no risk it is fair that your share of the take is small. Despite being 1/130 employees expect your share of the profits to be much smaller than .77%. How about we go with .01%? Lets also assume that they go public in 2.5 years and that revenues during that time continue to increase by about 25M/year. Profit margins remains the same. So revenues to 112M, profits to 22.5M. Typically the goal for business is to pay no more than 5 times profits, that could be supplanted by other factors, but let's assume that figure. So about 112M from the IPO. So .01% of that is about 11K. That feels about right. Keep in mind there would be underwriting fees, and also I would discount that figure for things that could go wrong. I'd be at about 5K. That would be my expected value figure, 5K. I'd also understand that there is a very small likelihood that I receive that amount. The value received is more likely to be zero, or enough to buy a Ferarri. There might also be some value in getting to know these people. If this fails will their next venture be a success. In my own life, I went to work for a company that looked great on paper that just turned out to be a bust. Great concept, horrible management, and within a couple of years of being hired, the company went bust. I worked like a dog for nothing." }, { "docid": "475539", "title": "", "text": "\"Nobody can give you a definitive answer. To those who suggest it's expensive at these prices, [I'd point to this chart](http://treo.typepad.com/.a/6a0120a6002285970c014e8c39f2c3970d-850wi) showing the price of gold versus the global money supply over the past decade or so. It's not conclusive, but it's evidence that gold tracks the money supply relatively well. There might be a bit of risk premium baked in that it would shed in a stable economy, but that premium is unknowable. It's also (imo) probably worth the protection it provides. In an inflationary scenario (Euro devaluation) gold will hold its buying power very well. It also fares well in a deflationary environment, just not quite as well as holding physical currency. Note that in such an environment, bank defaults are a big danger: that 50k might only be safe under your mattress (rather than in a fractionally reserved bank account). If you're buying gold, certificates aren't exactly a bad option, although there still exists the counterparty risk of the agent storing your gold, as well as political risk of the nation where it's being held. Buying physical bullion ameliorates these risks, but then you face the problem of protecting it. Safe deposit boxes, a home safe, or burying it in your backyard are all possible options. The merits of each, I'll leave as an exerice to the reader. Foreign currency might be a little bit better than the Euro, but as we've seen in the past year or so, the Swiss Franc has been devalued to match the Euro in the proverbial \"\"race to the bottom\"\". It's probably not much better than another fiat currency. I don't know anything about Norway. Edit: Depending on your time horizon, my personal opinion would be to put no less than 5-10% of your savings in a hard store of value (e.g. gold, silver, platinum). Depending on your risk appetite, you could probably stand to put a lot more into it, especially given the Eurozone turmoil. Of course, as with anything else, your mileage may vary, past performance does not guarantee future results, this is not investment advice, seek professional medical help if you experience an erection lasting longer than four hours.\"" }, { "docid": "341699", "title": "", "text": "If we knew for sure that euros are only going to be more expensive in the future, then the answer would be easy: Buy them all at one time, so that we are getting them at the best price. Of course, we can't assume that to be the case, they could get cheaper, so the answer gets more complicated. Focusing strictly on monetary considerations, there are two factors to examine: Using answers to this Travel Stack Exchange question as a reference, you see that the cost of currency conversion can be as low as 1%-2% if you make the transaction with a debit card, but can be as high as 15%. So, buying 1000 euros a month would cost between 20 and 150 euros. Examining a two year chart of the Euro-Canadian Dollar exchange rate gives us an idea of how much the currency fluctuates. Over the past two years, a euro has cost has much as $1.54 CAD and as little as $1.26 CAD, a 22% spread. Looking at it on a month-to month basis, we see that monthly changes have been as high as .05 to .07 (4-5%). As such, buying 1000 euros a month could cost 50 CAD more (or less) on a monthly basis due to variance in the exchange rate. If we anticipate our overhead cost of currency conversion to be more than 5%, it doesn't make sense to do multiple transactions; the costs are likely to outweigh the benefits. If we can keep them under that amount, then multiple transactions are advantageous when the euro is cheaper. The problem is somewhat analagous to that of someone who wants to make an annual investment in a mutual fund and is unsure of whether to make the purchase all at once, or to divide it over multiple purchases. One can't know for sure which way the mutual fund price is going to move over the time period Dollar cost averaging, spreading the purchase over regular intervals, is the generally accepted solution to this problem. As such, so long as we can keep the overhead cost of currency transactions low (<5%), doing transactions on a regular basis positions ourselves to take advantage of possible drops in the price of euros and reduces the risk of buying euros when they are most expensive. If we can't keep the cost low, then currency fees would be greater than potential price drops and we would be better off doing a single transaction." }, { "docid": "250790", "title": "", "text": "\"&gt; but the buying power of that money can be significantly reduced to the point where it's fundamentally useless, i.e. inter-war Germany and many countries in South and Central America. That's true, but *how* does that come about? The effect on buying power stems from the level of spending in the present period. Too little leaves you anywhere from outright deflation and contraction to weaker growth falling short of capacity. Too much reaches capacity and keeps spending, bidding up prices and driving down purchasing power. It has nothing to do with debt:GDP or interest payments. &gt; Germany managed to skate by by creating a new Deutschmark in a confidence trick, and it worked because Germany is a solid, iron clad manufacturing powerhouse of a lot of stuff. There are two important differences between inter-war Germany and the US. First is that inter-war Germany *lost a war*. This real shock is kind of important. When you're talking about buying power of money, one side of it is the amount of money in circulation but the other side of it is how much real output there is to buy and German real output capacity collapsed after the war. Their most productive regions were occupied territory and they were no longer a powerhouse manufacturing a lot of stuff, driving down the value of their currency. So lesson number one from Germany: real output collapse harms your currency. The second problem is that losing a war left Germany saddled with war reparations denominated in foreign currency. When you're on the hook for something you don't print you're in a situation where you can run out of money and that's exactly what happened to them. They tried printing more of their own currency to buy the foreign stuff with but that quickly drove down the value of German currency. So lesson number two from Germany is you don't want to be on the hook for a currency you don't issue. Put the two together and you have a real supply shock + foreign-denominated debt eviscerating the buying power of German currency. It wasn't debt:GDP but the real basis for their economy collapsing out from under them pushed along by a need for foreign currency. &gt;My question is, at what point do we engage Washington's unlimited money printing presses until we reach that point? In answer to your question, the printing presses are what funds the real economy. The worry in terms of avoiding \"\"that point\"\" is in making sure we keep that real economy productive and fully funded. Ironically, taking our eye off the ball to focus on budget balance at the expense of real output pushes the economy in the direction you're afraid of going. See also: the euro zone today.\"" }, { "docid": "150102", "title": "", "text": "I can't see it happening because most of the population seems to be against it, even if their reasoning on the whole is wrong. Theoretically, people are against the Euro here as a result of national pride. If it's the best thing to do for the good of the country then national pride shouldn't be taken into account. It'd be perverse in the sense that you'd be stopping your country from progressing because you love it. That doesn't add up. Personally, I don't think it's possible for an entire continent to have a single currency. There's too many different countries and cultures involved. For it to work you'd have to have centralised fiscal policy and this makes no sense at all for a continent. What works here might not work in France or Germany. What works in Greece might not work here. etc, etc. The make up of each country's economies is different." }, { "docid": "362281", "title": "", "text": "I don't know how taxes work in Israel, but I imagine it is relatively similar to taxes in the US. In the US you need to pay taxes on investment earnings when you sell them or in this case trade them for something of value. The amount that would typically would be taxed on would be the difference between how much you paid for the currency and the value of the item you traded it for. In theory there shouldn't be any difference in trading bitcoins versus dollars or euros. Reality is that they are rather weird and I don't know what category they would fall into. Are they a currency or a collectors item? I think this is all rather hypothetical because there is no way for any government to track digital currencies and any taxes paid would be based on the honor system. I am not an account and the preceding was not tax advice..." }, { "docid": "457390", "title": "", "text": "If we postulate that there is at least some element of truth to the phrase 'A leopard does not change his spots' and then consider this tidbit He conveniently forgets to mention his 1.5 million dollar fraud fine from the SEC over investment “advice” he sold through a news letter. The SEC claimed and the judge agreed that the report was “replete with lies”. I think that gives you just about all you might need to know regarding the man behind the video, and the nature of it's content. Oh, and it's purpose? To SELL YOU the same said newsletter. I guess it's natural for Stansberry to feel as he does. After all if the US gov had just busted me for conning and lying to folks, and fined ME 1.5Mill, I'd be having some pretty intense lurid fantasies about it going down in flames, and trying to hide any money I had left offshore also. A huge amount of his argument hinges on the US no longer being the world's reserve currency. Firstly, while I'll admit I'm none too happy with the way the national debt has been managed for oh, around 30 years how, (which includes I will note going from a pretty much balanced budget, to around an 80% increase in the debt from 2001 through 2008, when 'times were good' and there was little need to spend money we didn't have), when compared to a lot of other countries, we still don't look that bad. You have to ask yourself this first, if not the US, then WHO? are the governments of the world going to trust China? could the Yen handle the load? Is the Euro any better off especially considering problems in Greece, Ireland, etc. Do countries like Switzerland have enough liquidity and available ways to invest there? In order for the US to STOP being the world's reserve currency, you must have something to replace it with, and really, can we realistically think of one country/currency with the capability to become a new 'world reserve currency'??? Secondly, even then should such a shift actually happen, it doesn't mean people will ALL just magically stop buying US debt. Yes the demand would go down, but it would not go to zero. There are after all a worldfull of other countries who's money is right now NOT the world reserve currency, and yet they are able to sell bonds and people and even other countries invest there. (China for example does not invest exclusively in the US), so yeah we might have to start paying more interest to get people to buy US debt, but it's not like the demand will go away. Save your money, save your time, don't buy into this dung." }, { "docid": "526094", "title": "", "text": "Russia main reserve is Euro, Gold and Yuan. They have dumped good sums of dollar since way back. The rest of oil buyers would gladly pay russians in whatever currency they want, specially if it is non dollar. Cheap oil on cheaper currency? Who doesn't want that? The chinese pay their oil in Yuan. Russian gladly takes Yuan, since its the most liquid currency in pacific, not to mention china is their no.1 trading partner." }, { "docid": "422989", "title": "", "text": "Having trouble understanding currency arbitrage for one example. Conditions: US 3% interest per 6 months Germany 3.6% interest per 6 months Spot rate is $1.09/euro 6-month Forward is $1.04/euro How do I make this into an arbitrage opportunity? There is supposed to be a profit but I keep getting negatives. Any help would be greatly appreciated." }, { "docid": "423737", "title": "", "text": "Look I am not debating you, I think something should change. I was point out that the current mood is that protect the consumer. The MS thing was a competitor complaining about them, spun as the consumer can’t use other options as means to get them a better product. Like by not using Firefox and being stuck with IE the consumer is harmed. Back before when everyone went trust busting, it was about keeping a healthy competition in the market. That view is gone, its all about protecting the consumer. a short sited view as once competition is gone we can then screw the customer and then what happens? Protect competition and encourage, not the current view." }, { "docid": "147799", "title": "", "text": "I'm worried that it's, as so many observers or commentators seem to be doing with these crises, pre-empting events. I do wish news reporters would stick to reporting the news, rather than panicking people by putting forward their view that something is going to happen, such as Greece exiting the euro and adopting a new currency. As with these things, expectations are key, and this is by no means helping." }, { "docid": "17114", "title": "", "text": "Some of the factors that will act on house prices are: There will likely be a recession in that country, which will lower incomes and probably lower housing prices. It will likely be harder to get credit in that country so that too will increase demand and depress demand for housing (cf the USA in 2010.) If Greece leaves the Euro, that will possibly depress future economic growth, through decreased trade and investment, and possibly decreased transfer payments. Eventually the budget will need to come back into balanced which also is likely to push down house prices. In some European countries (most famously Spain) there's been a lot of speculative building which is likely to hang over the market. Both countries have governance and mandate problems, and who knows how long or how much turmoil it will take to sort that out. Some of these factors may already be priced in, and perhaps prices are already near what will turn out to be the low. In the Euro zone you have the nearly unprecedented situation of the countries being very strongly tied into another currency, so the typical exchange-rate movements that played out in Argentina cannot act here. A lot will depend on whether the countries are bailed out, or leave the Euro (and if so how), etc. Typically inflation has been a knock-on effect of the exchange rate moves so it's hard to see if that will happen in Greece. Looking back from 2031, buying in southern Europe in 2011 may turn out to be a good investment. But I don't think you could reasonably call it a safe defensive investment." }, { "docid": "559260", "title": "", "text": "You don't see data because you're not looking. What did congress do right after WW2? They slashed spending. All the plants and factories making war time things were now able to make products that people wanted, and the economy took off and people's standard of living rose across the board. You're not looking back far enough in the euro story. Greece is not the same economy or government as Germany, and that's part of the problem. Putting them into the same centralized economic system with the same interest rates was bound to fail because they are so different. When Greece joined the euro, they saw a massive boom in economic growth from the access to cheap financing costs. There was certainly no lack of demand then eh? What you're seeing is the result of years of supply side problems created by the european union in their quest to be a centralized global super power. The best thing for Greece to do in their current situation is to leave the shackles of the european union and take the drachma back. In the short run they would face a massive devaluation in the currency, and there would certainly be a few tough weeks or months, but the devaluation would incentivise all types of entrepreneurs and businessmen to build there and utilize cheap labor, there would be a flood of tourism and Greece would soon be on a path towards real productive growth. Their only other option is to face decades of austerity, and prolonged unemployment, where they are no longer working for themselves, and have become modern day serfs. We saw similar scenarios play out in both Iceland and Argentina, and Greece will only be the first of many to drop the the euro. www.econlib.org/library/Enc/SupplySideEconomics.html" }, { "docid": "61514", "title": "", "text": "e.g. a European company has to pay 1 million USD exactly one year from now While that is theoretically possible, that is not a very common case. Mostly likely if they had to make a 1 million USD payment a year from now and they had the cash on hand they would be able to just make the payment today. A more common scenario for currency forwards is for investment hedging. Say that European company wants to buy into a mutual fund of some sort, say FUSEX. That is a USD based mutual fund. You can't buy into it directly with Euros. So if the company wants to buy into the fund they would need to convert their Euros to to USD. But now they have an extra risk parameter. They are not just exposed to the fluctuations of the fund, they are also exposed to the fluctuations of the currency market. Perhaps that fund will make a killing, but the exchange rate will tank and they will lose all their gains. By creating a forward to hedge their currency exposure risk they do not face this risk (flip side: if the exchange rate rises in a favorable rate they also don't get that benefit, unless they use an FX Option, but that is generally more expensive and complicated)." }, { "docid": "261101", "title": "", "text": "It's not necessary to convert it back for the changes to affect value. Lets say you have a euro account with 1000 euro and a gbp account with 920 gbp (the accounts are equal in value given current exchange rates). You could exchange either account for ~$1180 usd. If you exchange the euro account for USD, and say the euro gets stronger against the pound and dollar (and subsequently the pound and dollar are weaker against the euro); then if you would've kept the 1000 euro it would now be worth more than 920 gbp and more than 1180 usd, and you would've been better off exchanging the gbp account for usd. Barring some cataclysmic economic event; exchange rates between well established currencies don't radically change over a few weeks trip, so I wouldn't really worry about it one way or the other." }, { "docid": "179822", "title": "", "text": "To be more technical the Eurozone. UK is in the EU, but it's currency is fine. I hope you're not getting downvoted for the technicality. Greece can't print money, it makes default more likely and that's a result of the Euro. That's the core of the problem. Europe wanted a shared currency without a shared budgetary process, this was going to happen eventually." }, { "docid": "354159", "title": "", "text": "If any Euro countries leave the Euro, they will have to impose capital flow restrictions - it's a given, to avoid a complete implosion of the entire system. The idea of retroactive controls is very interesting - this may be one of the first times in a currency collapse that such a system would be feasible (i.e., both the country being fled from and the countries being fled to are under common control). No doubt they would try such a thing if they thought they could get away with it." } ]

[ { "docid": "535947", "title": "", "text": "Krugman (Nobel prize in Economy) has just said: Greek euro exit, very possibly next month. Huge withdrawals from Spanish and Italian banks, as depositors try to move their money to Germany. 3a. Maybe, just possibly, de facto controls, with banks forbidden to transfer deposits out of country and limits on cash withdrawals. 3b. Alternatively, or maybe in tandem, huge draws on ECB credit to keep the banks from collapsing. 4a. Germany has a choice. Accept huge indirect public claims on Italy and Spain, plus a drastic revision of strategy — basically, to give Spain in particular any hope you need both guarantees on its debt to hold borrowing costs down and a higher eurozone inflation target to make relative price adjustment possible; or: 4b. End of the euro. And we’re talking about months, not years, for this to play out. http://krugman.blogs.nytimes.com/2012/05/13/eurodammerung-2/" } ]

[ { "docid": "134239", "title": "", "text": "\"The basic idea is that money's worth is dependent on what it can be used to buy. The principal driver of monetary exchange (using one type of currency to \"\"buy\"\" another) is that usually, transactions for goods or services in a particular country must be made using that country's official currency. So, if the U.S. has something very valuable (let's say iPhones) that people in other countries want to buy, they have to buy dollars and then use those dollars to buy the consumer electronics from sellers in the U.S. Each country has a \"\"basket\"\" of things they produce that another country will want, and a \"\"shopping list\"\" of things of value they want from that other country. The net difference in value between the basket and shopping list determines the relative demand for one currency over another; the dollar might gain value relative to the Euro (and thus a Euro will buy fewer dollars) because Europeans want iPhones more than Americans want BMWs, or conversely the Euro can gain strength against the dollar because Americans want BMWs more than Europeans want iPhones. The fact that iPhones are actually made in China kind of plays into it, kind of not; Apple pays the Chinese in Yuan to make them, then receives dollars from international buyers and ships the iPhones to them, making both the Yuan and the dollar more valuable than the Euro or other currencies. The total amount of a currency in circulation can also affect relative prices. Right now the American Fed is pumping billions of dollars a day into the U.S. economy. This means there's a lot of dollars floating around, so they're easy to get and thus demand for them decreases. It's more complex than that (for instance, the dollar is also used as the international standard for trade in oil; you want oil, you pay for it in dollars, increasing demand for dollars even when the United States doesn't actually put any oil on the market to sell), but basically think of different currencies as having value in and of themselves, and that value is affected by how much the market wants that currency.\"" }, { "docid": "362281", "title": "", "text": "I don't know how taxes work in Israel, but I imagine it is relatively similar to taxes in the US. In the US you need to pay taxes on investment earnings when you sell them or in this case trade them for something of value. The amount that would typically would be taxed on would be the difference between how much you paid for the currency and the value of the item you traded it for. In theory there shouldn't be any difference in trading bitcoins versus dollars or euros. Reality is that they are rather weird and I don't know what category they would fall into. Are they a currency or a collectors item? I think this is all rather hypothetical because there is no way for any government to track digital currencies and any taxes paid would be based on the honor system. I am not an account and the preceding was not tax advice..." }, { "docid": "430696", "title": "", "text": "From my reading of the wikipedia page (CRT), this only happens if you deposit or withdraw currency, not checks. The idea behind this is that checks, ACH, etc. leave paper trails that can be tracked. Cash doesn't, so it gets this extra level of scrutiny. If yu get a cashiers check or a money order to pay a bill, I don't think a CRT is created. If you withdraw $15,000 to buy a car in cash (1 stack of $100 bills), then a CRT would be generated. It still isn't a problem, as long as you can show a bill of sale showing where the money went (or came from, if you are the seller). The IRS has a FAQ about this. It says (taken from several spots at that page): Cash is money. It is currency and coins of the United States and any other country. A cashier’s check, bank draft, traveler’s check, or money order with a face amount of more than $10,000 is not treated as cash and a business does not have to file Form 8300 when it receives them. These items are not defined as cash because, if they were bought with currency, the bank or other financial institution that issued them must file a Currency Transaction Report. The exception to this is if you are buying something with a resale value of more than $10k with a check, money order, etc of less than $10k." }, { "docid": "240848", "title": "", "text": "\"Why will they find financing when they leave the Euro? Why would their currencies not simply hyperinflate due to excessive issuance in an attempt to devalue? Which is worse for unemployment, austerity or hyperinflation? &gt;they'd be expelled by Germany This is a union correct? Why do you assume Germany holds all the cards? I've read that Gonzalo Lira essay and have read Mish about everyday since 2009, yet still do not think it is so obvious that the Euro will collapse. I gained quite a bit of skepticism from Barry Eichengreen's paper on the [Breakup of the Euro Area.](http://www.nber.org/papers/c11654.pdf?new_window=1) What I see right now is that so far the ECB has only acted in such a way as to prevent outright deflation and meet its 2% inflation target, but not to continuously outright fund the profligate governments. They let the bond markets force those governments into contraction or into default whereas the fed, with its dual mandate, will always buy the US bonds and eventually will inflate the currency as opposed to having a sovereign default. So I think we will see the ECB continue to print as much is needed to meet its mandate but at the same time there will be defaults, bank nationalizations and failures, and a continued lack of growth in the Euro area until eventually the austerity measures bring revenue and spending in line at which point the countries under heavy debt would be stupid not to default because they can self finance. Whereas in the US we are so dependent on deficit financing that as foreigners move further away from holding treasuries we become more susceptible to bond vigilantes taking the reigns which will force the feds hand into outright monetization. Then I think we will see our own government exacerbate inflation by bidding on the same goods that those dollars which no longer are going into treasuries are bidding on. Then I think we'll finally see bad inflation in the US. Of course as long as there is hoards of money fleeing Europe for the US \"\"safe haven,\"\" the lack of foreign treasury investment is pretty moot. *spelling\"" }, { "docid": "475804", "title": "", "text": "If they default and try to stay in the Euro, they will be shut out of any chance of financing but they will be obliged to conduct business in a currency that they cannot afford. Their businesses will close, unemployment rise until they have no option to stay in the Euro. Instead of that, they will reissue the Peseta, Lira, Drachma, etc. and then devalue. That will allow their real estate, tourism and manufacturing to be very competitive. If they could stay in the Euro after default they would starve, but I don't think they could stay, even if they wanted to because they'd be expelled by Germany. Here is [Gonzalo Lira's suggestion as to how Spain should have already left the Euro](http://gonzalolira.blogspot.com/2012/04/will-there-be-corralito-in-spain.html)" }, { "docid": "87057", "title": "", "text": "The currency market, more often referred as Forex or FX, is the decentralized market through which the currencies are exchanged. To trade currencies, you have to go through a broker or an ECN. There are a lot's of them, you can find a (small) list of brokers here on Forex Factory. They will allow you to take very simple position on currencies. For example, you can buy EUR/USD. By doing so, you will make money if the EUR/USD rate goes up (ie: Euro getting stronger against the US dollar) and lose money if the EUR/USD rate goes down (ie: US dollar getting stronger against the Euro). In reality, when you are doing such transaction the broker: borrows USD, sell it to buy EUR, and place it into an Euro account. They will charge you the interest rate on the borrowed currency (USD) and gives you the interest and the bought currency (EUR). So, if you bought a currency with high interest rate against one with low interest rate, you will gain the interest rate differential. But if you sold, you will lose the differential. The fees from the brokers are likely to be included in the prices at which you buy and sell currencies and in the interest rates that they will charge/give you. They are also likely to gives you big leverage to invest far more than the money that you deposited in their accounts. Now, about how to make money out of this market... that's speculation, there are no sure gains about it. And telling you what you should do is purely subjective. But, the Forex market, as any market, is directed by the law of supply and demand. Amongst what impacts supply and demands there are: Also, and I don't want to judge your friends, but from experience, peoples are likely to tell you about their winning transaction and not about their loosing ones." }, { "docid": "539733", "title": "", "text": "\"I still think this tech boom is different. The 2000 boom/bust was so much based around a fiction. Namely, the infrastructure and logistics. The country was not yet set up for streaming services or online retail, the main drivers of that boom/bust. Today, broadband is ubiquitous, there's a computer in every home, and a smartphone in every pocket. Big data and automation drives vastly more efficient logistics, with the only main obstacle still yet to be worked out is AI that will allow companies like Uber and Tesla to realize their valuations. And the main drivers of tech are the so-called FAANG stocks (Facebook, Alphabet, Amazon, Apple and Netflix), as well as other tech like Microsoft and Cisco. What's the difference between these and, say, Pets.com or HotBot? *These are real companies.* Pets.com went boom to bust in less than a year. Broadcast.com sold for $5+billion...in 1999 (u kidin me?) Today's \"\"overvalued\"\" stocks have product, customers, business models and strategies in place. And the infrastructure they depend on actually exists.\"" }, { "docid": "40338", "title": "", "text": "\"If you are going to keep your US bank account for any period of time, the very best option I know of is to withdraw Euros from an atm using your US card once you are in Germany. I draw on my US account regularly (I'm in Munich) and always get the going \"\"mid market\"\" exchange rate, which is better than what you get from a currency conversion service, transfer agency, or bank transfer, and there are no fees from the atm or my bank for the currency conversion or withdrawal. Of course you should check with your bank to verify their rules and fees for atm use internationally. It would also be wise to put a travel advisory on your account to be sure your transaction is not denied because you are out of country.\"" }, { "docid": "571181", "title": "", "text": "\"How should I allocate short-term assets in a rising-interest rate environment? Assuming that the last part is correct, there could be bear bond funds that short bonds that could work well as a way to invest. However, bear in that the the \"\"rising-interest rate environment\"\" is part of the basis that may or may not be true in the end as I'm not sure I've seen anything to tell me why rates couldn't stay where they are for another couple of years or more. Long-Term Capital Management would be a cautionary tale before about bonds that had assumptions that backfired when something that wasn't supposed to happen, happened. Thus, while you can say there is \"\"rising-interest rate environment\"\" what else are you prepared to assume and how certain are you of that happening? An alternate theory here would be that \"\"junk bonds\"\" may do well because the economy has to be heating up for rates to rise and thus the bonds that are priced down so much because of default risk may turn out to not go bust and thus could do well. Course this would carry the \"\"Your mileage may vary\"\" and without a working time machine I couldn't say which funds will be good and which would suck. As for what I would do if I was dealing with my own money: Money market funds and CDs would likely be my suggestion for the short-term where I want to prevent principal risk. This is likely what I would do if I believed the rising rate environment is here.\"" }, { "docid": "329062", "title": "", "text": "Are you trying to get someone to do your homework for you? This question has been answered repeatedly in the negative by everyone who actually studies the economy. Read Mundell-Flemming model, and learn this stuff. You can see why currency regimes like the Euro make sense from a theoretical stand point, but where flexible exchange rates are a welcome release valve for pressures. You obviously have never studied economics. Hyper inflation doesn't happen becuase of floating exhange rates. Hyperinflation happens when people lose faith in the governing body, regardless of who that is. You think political regimes won't change just because there is one currency? No, they will still spent 1.05 for every dollar they bring in taxes. Hyperinflation is not a problem of floating exchange rates, it doesn't follow from any causal relationship." }, { "docid": "80943", "title": "", "text": "\"&gt; Just because at some random point in time, the European economy was doing OK, doesn't mean that it will definitely be ok I'm not claiming it will be \"\"definitely be ok\"\". definitely ok != utterly doomed. &gt; What happens when the Greeks default? If they were paying in drachma, they wouldn't default. They'd print more drachma and inflation would occur. That's how currency imbalances adjust. Germany wants it both ways. They want a stable Europe-wide currency but they don't want a Europe-wide economy, they want their economy isolated from the problems in the rest of Europe. Germany should leave the Euro.\"" }, { "docid": "153251", "title": "", "text": "There contracts called an FX Forwards where you can get a feel for what the market thinks an exchange rate will be in the future. Now exchange rates are notoriously uncertain, but it is worth noting that at current prices market believes your Krona will be worth only 0.0003 Euro less three years from now than it is worth now. So, if you are considering taking money out of your investments and converting it to Euro and missing out on three years of dividends and hopefully capital gains its certainly possible this may work out for you but this is unlikely. If you are at all uncertain that you will actually move this is an even worse idea as paying to convert money twice would be an additional expense on top of the missed returns. There are FX financial products (futures and forwards) where you can get exposure to FX without having to put the full amount down. This could help hedge your house value but this can be extremely expensive over time for individual investors and would almost certainly not work in your favor. Something that could help reduce your risk a bit would be to invest more heavily in European even Irish (and British?) stocks which will move along with the currency and economy. You can lose some diversification doing this, but it can help a little." }, { "docid": "475539", "title": "", "text": "\"Nobody can give you a definitive answer. To those who suggest it's expensive at these prices, [I'd point to this chart](http://treo.typepad.com/.a/6a0120a6002285970c014e8c39f2c3970d-850wi) showing the price of gold versus the global money supply over the past decade or so. It's not conclusive, but it's evidence that gold tracks the money supply relatively well. There might be a bit of risk premium baked in that it would shed in a stable economy, but that premium is unknowable. It's also (imo) probably worth the protection it provides. In an inflationary scenario (Euro devaluation) gold will hold its buying power very well. It also fares well in a deflationary environment, just not quite as well as holding physical currency. Note that in such an environment, bank defaults are a big danger: that 50k might only be safe under your mattress (rather than in a fractionally reserved bank account). If you're buying gold, certificates aren't exactly a bad option, although there still exists the counterparty risk of the agent storing your gold, as well as political risk of the nation where it's being held. Buying physical bullion ameliorates these risks, but then you face the problem of protecting it. Safe deposit boxes, a home safe, or burying it in your backyard are all possible options. The merits of each, I'll leave as an exerice to the reader. Foreign currency might be a little bit better than the Euro, but as we've seen in the past year or so, the Swiss Franc has been devalued to match the Euro in the proverbial \"\"race to the bottom\"\". It's probably not much better than another fiat currency. I don't know anything about Norway. Edit: Depending on your time horizon, my personal opinion would be to put no less than 5-10% of your savings in a hard store of value (e.g. gold, silver, platinum). Depending on your risk appetite, you could probably stand to put a lot more into it, especially given the Eurozone turmoil. Of course, as with anything else, your mileage may vary, past performance does not guarantee future results, this is not investment advice, seek professional medical help if you experience an erection lasting longer than four hours.\"" }, { "docid": "334071", "title": "", "text": "The best scenario I've heard is by Tyler Cowen: Basically, the Greek Government runs out of Euros. So they print up IOUs to issue to their workers, pensioners, etc promising payment of Euros at some future date. The first day, some wag holds up the IOUs says 'hey, look at these drachmas'. By the seventh day, the IOUs are trading at a discount - there's an exchange rate between the IOUS and Euros, and you in essence have a Drachma currency. What that does in terms of converting external debts, bank accounts, and etc from Drachmas into Euros I'm not sure about. Obviously this isn't the best way to go about getting out of the Euro, but it's the best 'muddle through' option and given how Europe in general has been dealing with this problem it's highly probable this is the method they'll take." }, { "docid": "150102", "title": "", "text": "I can't see it happening because most of the population seems to be against it, even if their reasoning on the whole is wrong. Theoretically, people are against the Euro here as a result of national pride. If it's the best thing to do for the good of the country then national pride shouldn't be taken into account. It'd be perverse in the sense that you'd be stopping your country from progressing because you love it. That doesn't add up. Personally, I don't think it's possible for an entire continent to have a single currency. There's too many different countries and cultures involved. For it to work you'd have to have centralised fiscal policy and this makes no sense at all for a continent. What works here might not work in France or Germany. What works in Greece might not work here. etc, etc. The make up of each country's economies is different." }, { "docid": "261101", "title": "", "text": "It's not necessary to convert it back for the changes to affect value. Lets say you have a euro account with 1000 euro and a gbp account with 920 gbp (the accounts are equal in value given current exchange rates). You could exchange either account for ~$1180 usd. If you exchange the euro account for USD, and say the euro gets stronger against the pound and dollar (and subsequently the pound and dollar are weaker against the euro); then if you would've kept the 1000 euro it would now be worth more than 920 gbp and more than 1180 usd, and you would've been better off exchanging the gbp account for usd. Barring some cataclysmic economic event; exchange rates between well established currencies don't radically change over a few weeks trip, so I wouldn't really worry about it one way or the other." }, { "docid": "124254", "title": "", "text": "It's impossible to determine which event will cause a major shift for a certain currency pair. However, this does not mean that it's not possible to identify events that are important to the overall market sentiment and direction. There are numerous sites that provide a calendar for upcoming and past events and their impact which is most of the time indicated as low, medium and high. Such sites are: Edit: I would like to add to that, that while these are major market movers, you cannot forget that they mainly provide a certain direction for the market but that it's not always clear in which direction the market will go. A recent and prime example of a major event that triggered opposite effects of what you would expect, is the ECB meeting that took place the 3rd of December. Due to the fact that the market already priced in further easing by the ECB the euro strengthened instead of weakening compared to the dollar. This strengthening happened even though the ECB did in fact adjust the deposit by 10 base points to -0.30 % and increased the duration of the QE. Taking above example into consideration it's important to always remember that fundamentals are hard to grasp and that it will take a while to make it a second nature and become truly successful in this line of trading. Lastly, fundamentals are only a part of the complete picture. Don't lose sight of support and resistance levels as well as price action to determine when and how to enter a trade." }, { "docid": "354159", "title": "", "text": "If any Euro countries leave the Euro, they will have to impose capital flow restrictions - it's a given, to avoid a complete implosion of the entire system. The idea of retroactive controls is very interesting - this may be one of the first times in a currency collapse that such a system would be feasible (i.e., both the country being fled from and the countries being fled to are under common control). No doubt they would try such a thing if they thought they could get away with it." }, { "docid": "451734", "title": "", "text": "\"i hate to say it, and i will probably be downvoted to oblivion, but i don't think you can do anything. i'm not an expert, so i might be wrong, but if greece (or any euro country, for that matters) decides to exit the euro, the currency will be dead within the week. that, from what i've read in various newspapers, will be an incredibly bad news for the european economy. which *will* collapse in a very short period of time. then the collapse would propagate (more or less slowly, more or less significantly) to other economies, especially china and US, possibly middle east, too. at that point, you (well, we) have a major economic cataclysm. would it really matter if you had a tiny bit more money than your neighbour, if production stops, goods don't move that much anymore, and your country is generally in such a deep shit that the potato famine will look like a day in eurodisney? i agree with what other people are saying: they will not allow the euro to fall. \"\"they\"\" sounds like hidden conspiracies, but even if european leaders have taught us that we can expect the worse from them (2 world wars in the last centuries are just the quicker reminder of their stupidity), there's the americans, the chineses, and so on. i think the worst thing you, or anyone else in europe, can do is panicking and moving their money around. if the exchange rate with the euro is not fixed (and nothing is) you still have a chance to lose a significant amount of money in the short-medium run, in a worst case scenario. chill. relax. if you're really desperate and think that things *will* go bad, try turning a hobby into another job, especially if you can do it online and can bring you a steady income eventually. **TL; DR: if the world economy collapse, you will still lose money. live happy. chill.**\"" } ]

[ { "docid": "148194", "title": "", "text": "\"The result would be catastrophic. The almost-reserve currency would collapse which would produce a medium sized depression, perhaps same with with 2008-now, or even larger, since don't forget, that one was produced from a housing bubble existing in only a part of the american economy; imagine what would happen if almost the full size of the economy (Europe) would collapse, even if Europe isn't as much \"\"connected\"\". But reality here is, there's no chance to that. The real reason you hear those rumors is that America (along with minor partners like the British Sterling) want to bring down the Euro for medium-term benefit. e.g. Several economists get on Bloomberg announcing they are short selling the Euro. Irony is, all this is helping the Euro since selling and short-selling and selling and short-selling helps massively its liquidity. It's like several nay sayers actually making a politician famous with their spite.\"" } ]

[ { "docid": "19618", "title": "", "text": "It depends on the currency pair since it is much harder to move a liquid market like Fiber (EURUSD) or Cable (GBPUSD) than it is to move illiquid markets such as USDTRY, however, it will mostly be big banks and big hedge funds adjusting their positions or speculating (not just on the currency or market making but also speculating in foreign instruments). I once was involved in a one-off USD 56 million FX trade without which the hedge fund could not trade as its subscriptions were in a different currency to the fund currency. Although it was big by their standards it was small compared with the volumes we expected from other clients. Governments and big companies who need to pay costs in a foreign currency or receive income in one will also do this but less frequently and will almost always do this through a nominated bank (in the case of large firms). Because they need the foreign currency immediately; if you've ever tried to pay a bill in the US denominated in Dollars using Euros you'll know that they aren't widely accepted. So if I need to pay a large bill to a supplier in Dollars and all I have is Euros I may move the market. Similarly if I am trying to buy a large number of shares in a US company and all I have is Euros I'll lose the opportunity." }, { "docid": "362281", "title": "", "text": "I don't know how taxes work in Israel, but I imagine it is relatively similar to taxes in the US. In the US you need to pay taxes on investment earnings when you sell them or in this case trade them for something of value. The amount that would typically would be taxed on would be the difference between how much you paid for the currency and the value of the item you traded it for. In theory there shouldn't be any difference in trading bitcoins versus dollars or euros. Reality is that they are rather weird and I don't know what category they would fall into. Are they a currency or a collectors item? I think this is all rather hypothetical because there is no way for any government to track digital currencies and any taxes paid would be based on the honor system. I am not an account and the preceding was not tax advice..." }, { "docid": "290930", "title": "", "text": "If you are really worried your best bet is to move all your cash from Sterling into a foreign currency that you think will be resilient should Brexit occur. I would avoid the Euro! You could look at the US Dollar perhaps, make sure you are aware of the charges for moving the money over and back again, as you will at some stage probably want to get back into Sterling once it settles down, if it does indeed fall. Based on my experience on the stock markets (I am not a currency trader) I would expect the pound to fall fairly sharply on a vote for Brexit and the Euro to do the same. Both would probably rebound quite quickly too as even if there is a Brexit vote it doesn't mean the UK Government will honour the outcome or take the steps quickly. ** I AM NOT A FINANCIAL ADVISOR AND HAVE NO QUALIFICATIONS AS SUCH **" }, { "docid": "19986", "title": "", "text": "\"Currencies such as the dollar, the Euro, and most others are no longer tied to gold in any way. They are just paper that is worth what it's worth because everyone agrees to accept it. Previously, currencies used to be commonly tied to gold reserves, and could theoretically be \"\"cashed in\"\" for gold, although not usually as much as the currency denomination (i.e., gold on the open market tended to sell for higher prices than what the government would give you for it).\"" }, { "docid": "47163", "title": "", "text": "\"Depends on the country, whether its a currency issuer with floating exchange rate, and what the debt is denominated in. For instance, the US has no real debt, b/c its all in US dollars and can be printed at any time. It has no need to borrow anything, it issues its own currency. It used to be different 4 decades ago, on the gold standard, so in general people still think currency issuers need to borrow (or earn) to spend. Just a relic in thinking. But when the country does not issue its own currency, then it does need to earn or borrow in order to spend. In this case, it could borrow from anywhere that will lend it money. In US, a state would fit this description. Or Greece, as it borrowed Euros, for which it is not an issuer of. EDIT: just came across this blog http://pragcap.com/where-does-the-money-come-from Its title, \"\"Where does the money come from\"\". Maybe he saw this question. Anyway, the US does not need to borrow money. Why would it borrow what it creates? From the video: \"\"Thinking is hard, that's why we don't do it a lot\"\". Great line.\"" }, { "docid": "451734", "title": "", "text": "\"i hate to say it, and i will probably be downvoted to oblivion, but i don't think you can do anything. i'm not an expert, so i might be wrong, but if greece (or any euro country, for that matters) decides to exit the euro, the currency will be dead within the week. that, from what i've read in various newspapers, will be an incredibly bad news for the european economy. which *will* collapse in a very short period of time. then the collapse would propagate (more or less slowly, more or less significantly) to other economies, especially china and US, possibly middle east, too. at that point, you (well, we) have a major economic cataclysm. would it really matter if you had a tiny bit more money than your neighbour, if production stops, goods don't move that much anymore, and your country is generally in such a deep shit that the potato famine will look like a day in eurodisney? i agree with what other people are saying: they will not allow the euro to fall. \"\"they\"\" sounds like hidden conspiracies, but even if european leaders have taught us that we can expect the worse from them (2 world wars in the last centuries are just the quicker reminder of their stupidity), there's the americans, the chineses, and so on. i think the worst thing you, or anyone else in europe, can do is panicking and moving their money around. if the exchange rate with the euro is not fixed (and nothing is) you still have a chance to lose a significant amount of money in the short-medium run, in a worst case scenario. chill. relax. if you're really desperate and think that things *will* go bad, try turning a hobby into another job, especially if you can do it online and can bring you a steady income eventually. **TL; DR: if the world economy collapse, you will still lose money. live happy. chill.**\"" }, { "docid": "526094", "title": "", "text": "Russia main reserve is Euro, Gold and Yuan. They have dumped good sums of dollar since way back. The rest of oil buyers would gladly pay russians in whatever currency they want, specially if it is non dollar. Cheap oil on cheaper currency? Who doesn't want that? The chinese pay their oil in Yuan. Russian gladly takes Yuan, since its the most liquid currency in pacific, not to mention china is their no.1 trading partner." }, { "docid": "111266", "title": "", "text": "When economies are strong, it is particularly alluring to have a single currency as it makes trade and tourism simpler and helps reduce costs. The problem comes when individual member economies get into trouble. Because the Eurozone is a loose grouping of nations, there is no direct equivalent of the US Federal government to coordinate a response, there is instead an odd mixture of National and Central government that makes it harder to get a unified approach to the economy (OK, it's maybe not so different to the US in reality). This lack of flexibility means that some of the key levers of international finance are compromised, for example a weak economy can't float its currency to improve exports. Similarly individual country's interest rates can't be adjusted to balance spending. I suspect the main reason though is political and based on concepts of sovereignty and national pride. The UK does the majority of its trade with the Eurozone, so the pros would possibly outweigh the cons, but the UK as a whole (and some of our papers in particular) have always regarded Europe with suspicion. Most Brits only speak English and find France and Germany a strange and obtuse place. The (almost) common language makes it easier to relate to the US and Canada than our near neighbours. It seems the perception amongst the political establishment is that any attempt to join the Euro is political suicide, while that is the case it is unlikely to happen. Purely from a personal perspective, I'd welcome the Euro except it means a lot of the products I routinely buy would become a lot more expensive if price is 'harmonised'. For an example compare the price of the iPod Touch in the UK (£209.99) to France(€299). The French pay £262 at the current exchange rate, which is close to 25% more. Ouch. See also my question about Canada adopting the US Dollar" }, { "docid": "341699", "title": "", "text": "If we knew for sure that euros are only going to be more expensive in the future, then the answer would be easy: Buy them all at one time, so that we are getting them at the best price. Of course, we can't assume that to be the case, they could get cheaper, so the answer gets more complicated. Focusing strictly on monetary considerations, there are two factors to examine: Using answers to this Travel Stack Exchange question as a reference, you see that the cost of currency conversion can be as low as 1%-2% if you make the transaction with a debit card, but can be as high as 15%. So, buying 1000 euros a month would cost between 20 and 150 euros. Examining a two year chart of the Euro-Canadian Dollar exchange rate gives us an idea of how much the currency fluctuates. Over the past two years, a euro has cost has much as $1.54 CAD and as little as $1.26 CAD, a 22% spread. Looking at it on a month-to month basis, we see that monthly changes have been as high as .05 to .07 (4-5%). As such, buying 1000 euros a month could cost 50 CAD more (or less) on a monthly basis due to variance in the exchange rate. If we anticipate our overhead cost of currency conversion to be more than 5%, it doesn't make sense to do multiple transactions; the costs are likely to outweigh the benefits. If we can keep them under that amount, then multiple transactions are advantageous when the euro is cheaper. The problem is somewhat analagous to that of someone who wants to make an annual investment in a mutual fund and is unsure of whether to make the purchase all at once, or to divide it over multiple purchases. One can't know for sure which way the mutual fund price is going to move over the time period Dollar cost averaging, spreading the purchase over regular intervals, is the generally accepted solution to this problem. As such, so long as we can keep the overhead cost of currency transactions low (<5%), doing transactions on a regular basis positions ourselves to take advantage of possible drops in the price of euros and reduces the risk of buying euros when they are most expensive. If we can't keep the cost low, then currency fees would be greater than potential price drops and we would be better off doing a single transaction." }, { "docid": "355990", "title": "", "text": "It would essentially make goods from other countries more cheaper than goods from US. And it would make imports from these countries to China more expensive. The below illustration is just with 2 major currencies and is more illustrative to show the effect. It does not actually mean the goods from these countries would be cheaper. 1 GBP = 1.60 USD 1 EUR = 1.40 USD 1 CNY = 0.15 USD Lets say the above are the rates for GBP, EUR, CNY. The cost of a particular goods (assume Pencils) in international market is 2 USD. This means for the cost of manufacturing this should be less than GBP 1.25 in UK, less than 1.43 in Euro Countires, less than 13.33 CNY in China. Only then export would make sense. If the real cost of manufacturing is say 1.4 GBP in UK, 1.5 EUR in Euro countires, clearly they cannot compete and would loose. Now lets say the USD has appreciated by 20% against other currencies. The CNY is at same rate. 1 GBP = 1.28 USD 1 EUR = 1.12 USD 1 CNY = 0.15 USD Now at this rate the cost of manufacturing should be less than GBP 1.56 GBP, less than 1.78 EUR in Euro Countires. In effect this is more than the cost of manufacturing. So in effect the goods from other countires have become cheaper/compatative and goods from China have become expensive. Similarly the imports from these countires to China would be more expensive." }, { "docid": "40161", "title": "", "text": "If you plan to stay in Europe for some time, then you should match your income currency with your liability currency, and so should use the Euro loan to pay off the INR loan, thereby eliminating the currency risk that you currently bear every time you convert Euro into INR to pay down the loan. Plus, you have a much lower interest rate. So, do it !" }, { "docid": "87057", "title": "", "text": "The currency market, more often referred as Forex or FX, is the decentralized market through which the currencies are exchanged. To trade currencies, you have to go through a broker or an ECN. There are a lot's of them, you can find a (small) list of brokers here on Forex Factory. They will allow you to take very simple position on currencies. For example, you can buy EUR/USD. By doing so, you will make money if the EUR/USD rate goes up (ie: Euro getting stronger against the US dollar) and lose money if the EUR/USD rate goes down (ie: US dollar getting stronger against the Euro). In reality, when you are doing such transaction the broker: borrows USD, sell it to buy EUR, and place it into an Euro account. They will charge you the interest rate on the borrowed currency (USD) and gives you the interest and the bought currency (EUR). So, if you bought a currency with high interest rate against one with low interest rate, you will gain the interest rate differential. But if you sold, you will lose the differential. The fees from the brokers are likely to be included in the prices at which you buy and sell currencies and in the interest rates that they will charge/give you. They are also likely to gives you big leverage to invest far more than the money that you deposited in their accounts. Now, about how to make money out of this market... that's speculation, there are no sure gains about it. And telling you what you should do is purely subjective. But, the Forex market, as any market, is directed by the law of supply and demand. Amongst what impacts supply and demands there are: Also, and I don't want to judge your friends, but from experience, peoples are likely to tell you about their winning transaction and not about their loosing ones." }, { "docid": "475804", "title": "", "text": "If they default and try to stay in the Euro, they will be shut out of any chance of financing but they will be obliged to conduct business in a currency that they cannot afford. Their businesses will close, unemployment rise until they have no option to stay in the Euro. Instead of that, they will reissue the Peseta, Lira, Drachma, etc. and then devalue. That will allow their real estate, tourism and manufacturing to be very competitive. If they could stay in the Euro after default they would starve, but I don't think they could stay, even if they wanted to because they'd be expelled by Germany. Here is [Gonzalo Lira's suggestion as to how Spain should have already left the Euro](http://gonzalolira.blogspot.com/2012/04/will-there-be-corralito-in-spain.html)" }, { "docid": "197241", "title": "", "text": "Do developing country equities have a higher return and/or lower risk than emerging market equities? Generally in finance you get payed more for taking risk. Riskier stocks over the long run return more than less risky bonds, for instance. Developing market equity is expected to give less return over the long run as it is generally less risky than emerging market equity. One way to see that is the amount you pay for one rupee/lira/dollar/euro worth of company earnings is fewer rupees/lira and more dollars/euros. when measured in the emerging market's currency? This makes this question interesting. Risky emerging currencies like the rupee tend to devalue over time against less risky currencies euro/dollars/yen like where most international investment ends up, but the results are rather wild. Think how badly Brazil has done recently and how relatively well the rupee has been doing. This adds to the returns (roughly based on interest rates) of foreign stocks from the point of view of a emerging market investor on average but has really wild variations. Do you have data for this over a long timeframe (decades), ideally for multiple countries? Not really, unfortunately. Good data for emerging markets is a fairly new phenomenon and even where it does exist decades ago it would have been very hard to invest like we can now so it likely is not comparable. Does foreign equity pay more or less when measured in rupees (or other emerging market currency)? Probably less on average (theoretically and empirically) all things included though the evidence is not strong, but there is a massive amount of risk in a portfolio that is 85% in a single emerging market currency. Think about if you were a Brazilian and needed to retire now and 85% of your portfolio was in the Real. International goods like gas would be really expensive and your local currency portfolio would seem paltry right now. If you want to bet on emerging markets in the long run I would suggest that you at least spread the risk over many emerging markets and add a good chunk developed to the mix. As for investing goals, it's just to maximize my return in INR, or maximize my risk-adjusted return. That is up to you, but the goal I generally recommend is making sure you are comfortable in retirement. This usually involves looking for returns are high in the long run, but not having a ton of risk in a single currency or a single market. There are reasons to believe a little bias toward your homeland is good as fees tend to be lower on local investments and local investments tend to track closer to your retirement costs, but too much can be very dangerous even for countries with stronger currencies, say Greece." }, { "docid": "116817", "title": "", "text": "This would effectively be currency speculation, betting that the Pound will be stronger vs. the Euro in November (or whenever) than it is today. This would be a profitable transaction if the exchange fees are less than the swing between the two. In my (very limited) experience, exchange fees are going to be at least a few percent, and she's going to have to do the exchange twice if she wants to turn current Euros into Pounds and back into Euros later; that's at least a 6% hit. I'd recommend against this. While it's quite plausible for the two currencies to move more than 6% against each other in that time, it's also quite possible for them to move the other way, causing her a large loss. The unfortunate thing about large, heavily traded things like GBP/EUR is that you're very unlikely to have some information that the big traders don't. While lots of people think that the pound is going to become stronger, just as many people think that the Euro is going to be stronger. These two camps are constantly bidding against each other, resulting in the 1.15 Pounds/Euro exchange rate as of this writing. The current price and current direction that the line is moving in no way tells you what it's going to do next." }, { "docid": "571181", "title": "", "text": "\"How should I allocate short-term assets in a rising-interest rate environment? Assuming that the last part is correct, there could be bear bond funds that short bonds that could work well as a way to invest. However, bear in that the the \"\"rising-interest rate environment\"\" is part of the basis that may or may not be true in the end as I'm not sure I've seen anything to tell me why rates couldn't stay where they are for another couple of years or more. Long-Term Capital Management would be a cautionary tale before about bonds that had assumptions that backfired when something that wasn't supposed to happen, happened. Thus, while you can say there is \"\"rising-interest rate environment\"\" what else are you prepared to assume and how certain are you of that happening? An alternate theory here would be that \"\"junk bonds\"\" may do well because the economy has to be heating up for rates to rise and thus the bonds that are priced down so much because of default risk may turn out to not go bust and thus could do well. Course this would carry the \"\"Your mileage may vary\"\" and without a working time machine I couldn't say which funds will be good and which would suck. As for what I would do if I was dealing with my own money: Money market funds and CDs would likely be my suggestion for the short-term where I want to prevent principal risk. This is likely what I would do if I believed the rising rate environment is here.\"" }, { "docid": "231521", "title": "", "text": "My 0,02€ - I probably live in the same country as you. Stop worrying. The Euro zone has a 100.000€ guaranty deposit. So if any bank should fail, that's the amount you'll receive back. This applies to all bank accounts and deposits. Not to any investments. You should not have more than 100.000€ in any bank. So, lucky you, if you have more than that money, divide between a number of banks. As for the Euro, there might be an inflation, but at this moment the USA and China are in a currency battle that 'benefits' the Euro. Meaning you should not invest in dollars or yuan at this time. Look for undervalued currency to invest in as they should rise against the Euro." }, { "docid": "340777", "title": "", "text": "Whether it's historically stronger or weaker isn't going to have an impact on you; the forex exposure you have is going forward if the exchange rates change you will have missed out on having more or less value by leaving it in a certain currency. (Ignoring fees) Say you exchange €85 for $100, if while you're in the US the Euro gets stronger than it currently is, and the exchange rate changes to €8:$10; then you will lose out on €5 if you try to change it back, and the opposite is true if the euro gets weaker than it currently is you would gain money on exchanging it back. Just look at it as though you're buying dollars like it were a commodity. If the euro gets stronger it buys more dollars and you should've held onto it in euros, if it gets weaker it buys less dollars and you were better off having it in dollars. You would want to use whichever currency you think will be weaker or gain the least against the dollar while you're here." }, { "docid": "79777", "title": "", "text": "\"It's simply supply and demand. First, demand: If you're an importer trying to buy from overseas, you'll need foreign currency, maybe Euros. Or if you want to make a trip to Europe you'll need to buy Euros. Or if you're a speculator and think the USD will fall in value, you'll probably buy Euros. Unless there's someone willing to sell you Euros for dollars, you can't get any. There are millions of people trying to exchange currency all over the world. If more want to buy USD, than that demand will positively influence the price of the USD (as measured in Euros). If more people want to buy Euros, well, vice versa. There are so many of these transactions globally, and the number of people and the nature of these transactions change so continuously, that the prices (exchange rates) for these currencies fluctuate continuously and smoothly. Demand is also impacted by what people want to buy and how much they want to buy it. If people generally want to invest their savings in stocks instead of dollars, i.e., if lots of people are attempting to buy stocks (by exchanging their dollars for stock), then the demand for the dollar is lower and the demand for stocks is higher. When the stock market crashes, you'll often see a spike in the exchange rate for the dollar, because people are trying to exchange stocks for dollars (this represents a lot of demand for dollars). Then there's \"\"Supply:\"\" It may seem like there are a fixed number of bills out there, or that supply only changes when Bernanke prints money, but there's actually a lot more to it than that. If you're coming from Europe and want to buy some USD from the bank, well, how much USD does the bank \"\"have\"\" and what does it mean for them to have money? The bank gets money from depositors, or from lenders. If one person puts money in a deposit account, and then the bank borrows that money from the account and lends it to a home buyer in the form of a mortgage, the same dollar is being used by two people. The home buyer might use that money to hire a carpenter, and the carpenter might put the dollar back into a bank account, and the same dollar might get lent out again. In economics this is called the \"\"multiplier effect.\"\" The full supply of money being used ends up becoming harder to calculate with this kind of debt and re-lending. Since money is something used and needed for conducting of transactions, the number of transactions being conducted (sometimes on credit) affects the \"\"supply\"\" of money. Demand and supply blur a bit when you consider people who hoard cash. If I fear the stock market, I might keep all my money in dollars. This takes cash away from companies who could invest it, takes the cash out of the pool of money being used for transactions, and leaves it waiting under my mattress. You could think of my hoarding as a type of demand for currency, or you could think of it as a reduction in the supply of currency available to conduct transactions. The full picture can be a bit more complicated, if you look at every way currencies are used globally, with swaps and various exchange contracts and futures, but this gives the basic story of where prices come from, that they are not set by some price fixer but are driven by market forces. The bank just facilitates transactions. If the last price (exchange rate) is 1.2 Dollars per Euro, and the bank gets more requests to buy USD for Euros than Euros for USD, it adjusts the rate downwards until the buying pressure is even. If the USD gets more expensive, at some point fewer people will want to buy it (or want to buy products from the US that cost USD). The bank maintains a spread (like buy for 1.19 and sell for 1.21) so it can take a profit. You should think of currency like any other commodity, and consider purchases for currency as a form of barter. The value of currency is merely a convention, but it works. The currency is needed in transactions, so it maintains value in this global market of bartering goods/services and other currencies. As supply and demand for this and other commodities/goods/services fluctuate, so does the quantity of any particular currency necessary to conduct any of these transactions. A official \"\"basket of goods\"\" and the price of those goods is used to determine consumer price indexes / inflation etc. The official price of this particular basket of goods is not a fundamental driver of exchange rates on a day to day basis.\"" } ]

[ { "docid": "248269", "title": "", "text": "It really depends. If it is offered as compensation (ie in leiu of, or in addition to salary or cash bonus) then it would be reportable income, and if sold later for a profit then that would be taxable as gains. If this share is purchased as an investment at current value then it would be treated like other securities most likely gains realized at sale. Any discount could be considered income but there are some goofy rules surrounding this enacted to prevent tax evasion and some to spur growth. That is the answer in a nut shell. It is far more complicated in reality as there are somewhere around 2000 pages of regulations deal with different exceptions and scenerios." } ]

[ { "docid": "540232", "title": "", "text": "&gt;That's why the CEO pay is so enormous, because the board can make that decision and none of the common shareholders have enough power to override it. As with any business, when you own less than 50% you have a say but are at the mercy of all the other shareholders. That's kinda the way things work. Don't like it? Don't buy a piece of the company. Want majority ownership of Intel corporation? Buy up 2.5bn shares and take controlling ownership. I still don't get what you're bitching about - that minority shareholders should have a majority say? That's the way owning a piece of any company works; a corporation or an LLC. The same bullshit you're spewing off about is the same bullshit that people bitch about in a democracy; they want their voice to count for more. You're vote is worth in a company based on the portion you own." }, { "docid": "325564", "title": "", "text": "\"Real estate ownership doesn't work the same way in China as it does in the West. Some significant difference I see: * China doesn't have property tax, so empty apartments are treated as assets by individuals, no tax liability. * A lot of people buy 2nd/3rd home and not rent them out. Their purpose feels more like buying preferred stock - ownership with expectation of neighborhood (~company) would prosper, but no direct contribution to the neighborhood (~no voting in the company) * Local governments raise funds by developing landing into real estate. * Local government would collectivize old real estate for redevelopment, usually at some reasonable rate (tho less equitable in some \"\"corrupt\"\" areas) * Ownership is not permanent. It is on paper 50-70 years depending on the place. Not saying there aren't problems with this system, just that signals that would cause US real estate to collapse might not do the same for China. I do want to see someone run some social behavioral model about how those differences would play out. Source: my family owns 2 apartments in a 2nd-tier Chinese city.\"" }, { "docid": "341258", "title": "", "text": "If you have a single-member LLC that is treated as a disregarded entity (i.e. you didn't elect to be taxed as a corporation), and that LLC had no activity, you're off the hook for federal reporting. The LLC's activity would normally be reported on your personal tax return on a Schedule C. If the LLC had under $400 in taxable earnings, no Schedule C is needed. So an inactive LLC does not have a tax reporting requirement. (If you had taxable income but under $400, you include that amount on your 1040 but don't need a Schedule C.) In Texas, you still must file a Texas franchise tax report every year, even for a single-member LLC with no activity." }, { "docid": "129503", "title": "", "text": "\"You're conflating LLC with Corporation. They're different animals. LLC does not have \"\"S\"\" or \"\"C\"\" designations, those are just for corporations. I think what you're thinking about is electing pass through status with the IRS. This is the easiest way to go. The company can pay you at irregular intervals in irregular amounts. The IRS doesn't care about these payments. The company will show profit or loss at the end of the year (those payments to you aren't expenses and don't reduce your profit). You report this on your schedule C and pay tax on that amount. (Your state tax authority will have its own rules about how this works.) Alternatively you can elect to have the LLC taxed as a corporation. I don't know of a good reason why someone in your situation would do this, but I'm not an accountant so there may be reasons out there. My recommendation is to get an accountant to prepare your taxes. At least once -- if your situation is the same next year you can use the previous year's forms to figure out what you need to fill in. The investment of a couple hundred dollars is worthwhile. On the question of buying a home in the next couple of years... yes, it does affect things. (Pass through status? Probably doesn't affect much.) If all of your income is coming from self-employment, be prepared for hassles when you are shopping for a mortgage. You can ask around, maybe you have a friendly loan officer at your credit union who knows your history. But in general they will want to see at least two years of self-employment tax returns. You can plan for this in advance: talk to a couple of loan officers now to see what the requirements will be. That way you can plan to be ready when the time comes.\"" }, { "docid": "310136", "title": "", "text": "California is very aggressive about enforcing LLC franchise taxes. The only correction I'd make to Kekito's answer is that the fee is $800 minimum or some percentage of the LLC's total business volume in the state. What's killer about it is that the tax is dependent not on what your LLC's profit is, but what its revenues are! Here's a good link explaining how the tax is calculated: California LLC Franchise Tax Rates Be very careful about making sure you comply with every dot in the California codes or else you really won't like what happens. It's one of the reasons so many companies avoid locating operations in California if at all possible. I hope this helps. Good luck!" }, { "docid": "282963", "title": "", "text": "Appreciate your frank sharing. It's rare to hear from the other side, and it's especially enlightening when it is honest to heart sharing and not some mere rhetoric. :) I get a feeling it's the same situation for lawyers in other countries and also for accountants as well. Gee, reading your post makes me feel pampered as an ex-engineer /consultant in the tech industry. * gasp * By ownership of law firms, do you mean to have law firms setup by companies such as Costco and not necessarily owned by a someone who is also a lawyer by training? How does that necessarily make legal fees lower? Competition? About overtime for exempt employee, it applies to almost all other industries. Unless the employees speak up or go on strike, employers (with no scruples) will tend to squeeze empoyees dry. Speaking of which, unions do not apply to exempt staffs right?" }, { "docid": "264068", "title": "", "text": "\"If a person is not a U.S. citizen and they live and work outside the U.S., then any income they make from a U.S. company or person for services provided does not qualify as \"\"U.S. Source income\"\" according to the IRS. Therefore you wouldn't need to worry about withholding or providing tax forms for them for U.S. taxes. See the IRS Publication 519 U.S. Tax Guide for Aliens.\"" }, { "docid": "131395", "title": "", "text": "Disclaimer: I’m not an expert. This is my basic understanding, which I’m sure someone will be glad to tell is horribly wrong... You need an LLC. Many people in my area create an LLC management company, then create individual LLCs for each investment property. Laws vary by state. YMMV Then you start researching properties. Commercial loans typically require a higher equity position than home ownership. Assume minimum 30%. For ease of this conversation let’s say you’re making the horribly poor decision to put that towards a single property. You’d be looking for a property in the 175-200k value range, because you’ll need to account for settlement expenses (attorney, broker, consultants) and a cash reserve. You’d be also be looking for what the average cap rate is for your market. In simplistic terms cap rate is the expected rate of return after expenses. So if the average market cap rate in that region for comparable properties is 5%, you can expect around 5% return on your investment, after you pay fees, maintenance, taxes, insurance, interest, etc. Buy a property and hold that property for a few years, making money every year, and claiming deductions on your earnings for something called depreciation. Fast forward 5 years and you’re ready to sell, the value of your property went up because you made improvements along the way, brought in some better tenants who are paying higher rents, and now you can offer a better cap rate than your competitors. You sell in the blink of an eye, and double your investment. Say you have $500k now sitting in the bank in you LLC’s name, in cash. You can either choose to cash out 100% and pay capital gains tax on your earnings above your basis (at 15% I think?)... OR you can quickly find a new property with that $500k, purchase it, and file a 1031, which says you don’t have to pay ANY capital gains on those earnings. You just increased income significantly without ever paying taxes on the underlying increase in value of your assets. Rinse and repeat for 25 years, develop a portfolio of properties, create a management company so you can stop paying others a percentage of your earnings, and you too can have the problem of too much money. I welcome anyone with actual knowledge of the topic to please expound on, or correct me." }, { "docid": "572242", "title": "", "text": "I did not file taxes on last season winnings as I’ve received conflicting advise (particularly regarding self-employment taxes). I have all my documentation to support my winnings should I file as a professional gambler. Oh dear. Get a GOOD tax adviser (licensed as EA, CPA or Attorney in Nevada) who's specializing in providing services to people like you and have it resolved ASAP. You're in major non-compliance. If you earned by gambling more than you earned by working in years, and you haven't reported that on your taxes - you may very well find yourself in jail. As to your original question - why on earth would you have a corporation for gambling? Or LLC... Why? What's the liability that you want to shield yourself of? It's your money that you're risking, and the risk is that you lose it, how is LLC or Corp going to help you in any way? Gambling winnings are reported as miscellaneous income (whether you're professional or just got lucky once with a slot machine - no matter), and if you're a pro (and it sounds like that since you're doing it systematically and in order to make profits), then yes, you pay SE taxes on it. Whoever told you anything else told you to break the law. Which you did, unfortunately." }, { "docid": "362790", "title": "", "text": "\"You're asking an intensely debatable question. You'll have some people believe that the short-term effects on tax cuts will be an increase in the deficit, but long-term provide more economic prosperity that then eventually translates into higher tax revenue (the Laffer Curve). You'll have others state that it'll simply increase government debt and make us even more indebted, and the benefits of tax cuts will be marginal at best. Large enough shocks, such as a war, cause market downturns due to heightened uncertainty. These are pretty unavoidable (we had a small shock with North Korea's nuke test). &gt; I ask because the economic fundamentals of U.S/Western Europe are strong. Why do you think this? &gt; B. What will be the geopolitical result? Does China back NK to prevent a immigration crisi/power vacuum or do they side with the UN/U.S and allow military destruction of NK in the event of a NK-started war? Also intensely debatable. Does China grow too tired of NK and simply acquire it itself? Does it keep it separate as a distraction to pin down U.S. attention? Does the U.S. pre-emptively strike NK leadership? Does it leave a vacuum there, close enough that China can keep an eye on it, or does it \"\"surge\"\" like Iraq? Would South Korea get it? These are extremely open-ended questions that could have debates rage around them for years.\"" }, { "docid": "138679", "title": "", "text": "While I agree with the existing bulk of comments and answers that you can't tell the lender the $7k is a gift, I do think you might have luck finding a mortgage broker who can help you get a loan as a group. (You might consider as an LLC or other form of corporation if no one will take you otherwise.) That is, each of you will be an owner of the house and appear on the mortgage. IIRC, as long as the downpayment only comes from the collective group, and the income-to-debt ratio of the group as a whole is acceptable, and the strongest credit rating of the group is good, you should be able to find a loan. (You may need a formal ownership agreement to get this accepted by the lender.) That said, I don't know if your income will trump your brother's situation (presumably high debt ratio or lower than 100% multiplier on his income dues to its source), but it will certainly help. As to how to structure the deal for fairness, I think whatever the two of you agree to and put down in writing is fine. If you each think you're helping the other, than a 50/50 split on profits at the sale of the property seems reasonable to me. I'd recommend that you actually include in your write up a defined maximum period for ownership (e.g. 5yr, or 10yr, etc,) and explain how things will be resolved if one side doesn't want to sell at that point but the other side does. Just remember that whatever percentages you agree to as ownership won't effect the lender's view of payment requirements. The lender will consider each member of the group fully and independently responsible for the loan. That is, if something happens to your brother, or he just flakes out on you, you will be on the hook for 100% of the loan. And vice-versa. Your write up ought to document what happens if one of you flakes out on paying agreed upon amounts, but still expects there ownership share at the time of sale. That said, if you're trying to be mathematically fair about apportioning ownership, you could do something like the below to try and factor in the various issues into the money flow: The above has the benefit that you can start with a different ownership split (34/66, 25/75, etc.) if one of you wants to own more of the property." }, { "docid": "110282", "title": "", "text": "This answer assumes you're asking about how to handle this issue in the USA. I generally downvote questions that ask about a tax/legal issue and don't bother providing the jurisdiction. In my opinion it is extremely rude. Seeing that you applied for an LLC, I think that you somehow consider it as a relevant piece of information. You also attribute some importance to the EIN which has nothing to do with your question. I'm going to filter out that noise. As an individual/sole-proprietor (whether under LLC or not), you cannot use fiscal years, only calendar years. It doesn't matter if you decide to have your LLC taxed as S-Corp as well, still calendar year. Only C-Corp can have a fiscal year, and you probably don't want to become a C-Corp. So the year ends on December 31, and whether accrual or cash - you can only deduct expenses you incurred until then. Also, you must declare the income you got until then, which in your case will be the full amount of funding - again regardless of whether you decided to be cash-based or accrual based. So the main thing you need to do is to talk to a licensed tax adviser (EA/CPA licensed in your state) and learn about the tax law relevant to your business and its implications on your actions. There may be some ways to make it work better, and there are some ways in which you can screw yourself up completely in your scenario, so do get a professional advice." }, { "docid": "576185", "title": "", "text": "The answer to your question is governed by the structure of the company and your ownership or lack thereof in the business. Australian business can be structured the same way U.S. ones are, as a sole proprietorship, partnership, LLC, or company. If you are only on the board and have no equity, you cannot be affected. You must have some amount of equity in the business to have any chance of being affected. If the business is a sole proprietorship, then the single individual running the business is personally responsible for all debt and the inability to pay obligations would result in personal bankruptcy which would in all likelihood affect your credit score (it would in the U.S.). If it is a partnership, then anyone holding stock in the company is likewise personally responsible for a portion of the debt, and can be subject to bankruptcy and credit score implications. If the business is structured as a limited liability company or a corporation, a stakeholder's personal finances are separate from the business's and their credit score cannot be affected." }, { "docid": "107817", "title": "", "text": "You should look into an LLC. Its a fairly simple process, and the income simply flows through to your individual return. It will allow you to deduct supplies and other expenses from that income. It should also protect you if someone sues you for doing shoddy work (even if the work was fine), although you would need to consult a lawyer to be sure. For last year, it sounds like your taxes were done wrong. There are very, very few ways that you can end up adding more income and earning less after taxes. I'm tempted to say none, but our tax laws are so complex that I'm sure you can do it somehow." }, { "docid": "86778", "title": "", "text": "Your statement is a reductio ad absurdum fallacy but i will address it and validate it in part. Here we have Burger King following the law, following the tax code which was legally passed by Congress and in fact which the D party had 2 years to change when the GOP had no ability to interfere. Yet a combination of hard core leftists and nationalistic tea party protectionists want to boycott anyway. And to your point of ownership. Government through income tax DOES own a percentage of every profit earned in the US (with no obligation to share in any losses by the way) and through regulation and police power DOES have control of every business in the US. That is tacit ownership." }, { "docid": "387186", "title": "", "text": "Usually, your situation is a generalized form of import/export, with you as the net exporter of goods/services and the individual consuming your goods/service as net importer. Import export laws vary from country to country but following are the general tariffs/taxes applicable: Export tax/duty: From your sovereign jurisdiction (read country/region/EU region), there could be export restriction or tariffs applicable to your exported goods/services on the other hand there may not be any, check with EU export law on this and then your country specific law. If there is any tax/tariff payable, you shall have to pay the same on the transactions. Import tax/duty: This is more related to your customer who is purchasing the goods/services from you, however, you should know this. Your customer will be liable to pay any import tax/duty as applicable for importing of your goods/services in that country/region, if it is applicable. Shipping Insurance: If it is a physical goods, there would be shipping and with shipping comes insurance and indemnity (if applicable). So there is a cost to it, you need to be aware of this. Sales Tax: There is no Govt. on earth or history which does not or did not charge sales tax in some form or the other. EU/country will also have sales tax, you should be aware of this as per transaction you may have to pay sales tax to the Govt. This would add to the cost. Credit of Foreign Currency Payments: Some countries have tax/tariffs attached to foreign currency credits/transfers or bank charges attached to the same, you may have to open specific type of bank A/C to receive the credits. These laws are specific to country/region, you should be aware of the same. The above are generic considerations and not specific to EU and to a greater/lesser extent applicable to all countries/regions. Best would be to search the net on the above points for EU region and get answers or approach a chartered accountant who will give you all the information." }, { "docid": "426705", "title": "", "text": "\"Okay so I am going to break this answer into a couple sections: Okay so first things first. Did you get a good deal? This is challenging to answer for a number of reasons. First, a good deal is relative to the buyers goals. If you're attempting to buy an asset that provides passive income then maybe you met your goal and got a good deal. If you're attempting to buy an asset that provides long term growth, and you purchased above market (I'm speculating of course) then you may have made a bad deal. So how do you determine if you got a good deal? Does your \"\"Gross Rental Multiplier\"\" equal that or is less than that of the average GRM in your area. The lower the better. So how do you use the GRM to determine if you're getting a good deal? Divide your purchase price by the average city (or area) GRM and that will tell you what you should be getting annually in rent. You can also use the GRM to determine if a future purchase is over or under priced. Just replace purchase price with asking price. Alright, so these are the tools you can use to decide if you made a bad business deal or not. There are many ways to skin a cat so to speak. These are the tools I use BEFORE I purchase a home. Many people are penny wise and pound foolish. Take your time when making large purchases. It's OKAY to say PASS. Okay next thing is this new purchase you're looking at. The number one rule when working a franchise is you don't open a second store until you have a perfect working model to go off of. If you've never had to file a tax return for your current rental. Then you need to wait. If you've never read your local and state rental laws. Then you need to WAIT. If you've never had to leave an event early, wake up in the middle of the night, or get a text while you're on a date from one of your tenants. THEN YOU NEED TO WAIT. Give it a year or two. Just learn the unknown about rental properties. Use your first as your test bed. It's WAY more cheaper then if you make a bad mistake and roll it over multiple properties. Finally I will leave you with this. No one on this site, myself included, knows everything there is to know about real estate. Anyone that claims they do, send their ass packing. This is a complex COMPLEX business. There is always something to learn and if you don't have the passion to continue learning then hand it off to someone who does. There is tax law, rental law, city repair law, contract law and this doesn't even include the stuff that makes you money, like knowing how to leverage low or no money down loans. Please take some time and go out and learn. Good luck! -AR\"" }, { "docid": "411063", "title": "", "text": "Through your question and then clarification through the comments, it looks like you have a U.S. LLC with at least two members. If you did not elect some other tax treatment, your LLC will be treated as a partnership by the IRS. The partnership should file a tax return on Form 1065. Then each partner will get a Schedule K-1 from the partnership, which the partner should use to include their respective shares of the partnership income and expenses on their personal Forms 1040. You can also elect to be taxed as an S-Corp or a C-Corp instead of a partnership, but that requires you to file a form explicitly making such election. If you go S-Corp, then you will file a different form for the company, but the procedure is roughly the same - Income gets passed through to the owners via a Schedule K-1. If you go C-Corp, then the owners will pay no tax on their own Form 1040, but the C-Corp itself will pay income tax. As far as whether you should try to spend the money as business expense to avoid paying extra tax - That's highly dependent on your specific situation. I'd think you'd want to get tailored advice for that." }, { "docid": "382908", "title": "", "text": "Can I work on 1099 from my own company instead of on W2? The reason is on W2 I can't deduct my commute, Health Insurance and some other expenses while on 1099 I think I can able do that. Since I am going to client place to work not at my own office, I am not sure whether I should able to do that or not. If you have LLC, unless you elected to tax it as a corporation, you need neither 1099 nor W2. For tax purposes the LLC is disregarded. So it is, from tax perspective, a sole proprietorship (or partnership, if multiple members). Being a W2 employee of your own LLC is a bad idea. For all these above expenses, which can I use company's debit/credit card or I need to use only my personal debit/credit card? It would be better to always use a business account for business purposes. Doesn't matter much for tax per se, but will make your life easier in case of an audit or a legal dispute (limited liability protection may depend on it). If I work on 1099, I guess I need to file some reasonable taxes on quarterly basis instead of filing at year end. If so, how do I pay my tax on quarterly basis to IRS? I mean which forms should I file and how to pay tax? Unless you're a W2 employee, you need to do quarterly estimate payments using form 1040-ES. If you are a W2 employee (even for a different job, and even if it is not you, but your spouse with whom you're filing jointly) - you can adjust your/spouse's withholding using form W4 to cover the additional tax liability. This is, IMHO, a better way than paying estimates. There are numerous questions on this, search the site or ask another one for details." } ]

[ { "docid": "399848", "title": "", "text": "If this activity were to generate let's say 100K of profit, and the other corporate activities also generate 100K of revenue, are there any issues tax-wise I need to be concerned about? Yes. Having 25% or more of passive income in 3 consecutive years will invalidate your S-Corp status and you'll revert to C-Corp. Can I deduct normal business expenses from the straddles (which are taxed as short term capital gains) profit? I don't believe you can. You can deduct investment expenses from the investment income. On your individual tax return it will balance out, but you cannot mix types of income/expense on the corporate return or K-1." } ]

[ { "docid": "110282", "title": "", "text": "This answer assumes you're asking about how to handle this issue in the USA. I generally downvote questions that ask about a tax/legal issue and don't bother providing the jurisdiction. In my opinion it is extremely rude. Seeing that you applied for an LLC, I think that you somehow consider it as a relevant piece of information. You also attribute some importance to the EIN which has nothing to do with your question. I'm going to filter out that noise. As an individual/sole-proprietor (whether under LLC or not), you cannot use fiscal years, only calendar years. It doesn't matter if you decide to have your LLC taxed as S-Corp as well, still calendar year. Only C-Corp can have a fiscal year, and you probably don't want to become a C-Corp. So the year ends on December 31, and whether accrual or cash - you can only deduct expenses you incurred until then. Also, you must declare the income you got until then, which in your case will be the full amount of funding - again regardless of whether you decided to be cash-based or accrual based. So the main thing you need to do is to talk to a licensed tax adviser (EA/CPA licensed in your state) and learn about the tax law relevant to your business and its implications on your actions. There may be some ways to make it work better, and there are some ways in which you can screw yourself up completely in your scenario, so do get a professional advice." }, { "docid": "546637", "title": "", "text": "Depends on your time scale, but generally, I don't think it would work. What you'd really be betting on in this case is mean-reversal, which does not hold true in the equity universe (atleast not in the long run). If you look at the historical prices of the S&P, you'll notice it increases in terms of absolute dollar value. On the short term, however, if you feel the market has significantly undervalued or overvalued a security, then mean-reversal might be a reasonable bet to make. In that scenario, however, it seems to me that you are really looking for a volatility trade, in which case you might want to consider a straddle position using options. Here, the bet you'd be making is that the price at expiration will be inside a certain band (or outside the band, depending on your position)." }, { "docid": "289833", "title": "", "text": "\"S-Corp is a corporation. I.e.: you add a \"\"Inc.\"\" or \"\"Corp.\"\" to the name or something of that kind. \"\"S\"\" denotes a specific tax treatment which may change during the lifetime of the corporation. It doesn't refer to a legal status.\"" }, { "docid": "193485", "title": "", "text": "\"A nondividend distribution is typically a return of capital; in other words, you're getting money back that you've contributed previously (and thus would have been taxed upon in previous years when those funds were first remunerated to you). Nondividend distributions are nontaxable, so they do not represent income from capital gains, but do effect your cost basis when determining the capital gain/loss once that capital gain/loss is realized. As an example, publicly-traded real estate investment trusts (REITs) generally distribute a return of capital back to shareholders throughout the year as a nondividend distribution. This is a return of a portion of the shareholder's original capital investment, not a share of the REITs profits, so it is simply getting a portion of your original investment back, and thus, is not income being received (I like to refer to it as \"\"new income\"\" to differentiate). However, the return of capital does change the cost basis of the original investment, so if one were to then sell the shares of the REIT (in this example), the basis of the original investment has to be adjusted by the nondividend distributions received over the course of ownership (in other words, the cost basis will be reduced when the shares are sold). I'm wondering if the OP could give us some additional information about his/her S-Corp. What type of business is it? In the course of its business and trade activity, does it buy and sell securities (stocks, etc.)? Does it sell assets or business property? Does it own interests in other corporations or partnerships (sales of those interests are one form of capital gain). Long-term capital gains are taxed at rates lower than ordinary income, but the IRS has very specific rules as to what constitutes a capital gain (loss). I hate to answer a question with a question, but we need a little more information before we can weigh-in on whether you have actual capital gains or losses in the course of your S-Corporation trade.\"" }, { "docid": "64598", "title": "", "text": "When in doubt, you should always seek the advice of a professional tax preparer or your accountant. (Many agents/accountants will gladly review your tax preparations to ensure you haven't missed something. That's quicker and cheaper than paying them to do it all.) Having said that... This Illinois resource has detailed information about S-corps: Of relevance to your situation:" }, { "docid": "44152", "title": "", "text": "Couple of points about being a consultant in the US: It sounds like the rules for what you can deduct may be more lax in Italy. For example, you can deduct a certain percentage of your home for work but the rules are relatively strict on your use of that space and how much is deductible. Also things like clothes, restaurants, phones, car use, etc must follow IRS guidelines to be deductible. This often means they are used exclusively for work and are required for work. A meal you eat by yourself is not generally deductible, for example. Any expense you would have had anyway if you were not working is generally not deductible. A contractor in the US can organize in various ways, including sole proprietorship, an S-corp, and a C-corp. Each has different tax and regulatory implications. In the simple case of a sole proprietorship, one must pay not only regular income tax but also self-employment tax, which is the part of social security and medicare tax normally paid for by one's employer. Estimated taxes must be paid to the government quarterly and then the actual amount due synced up at the end of the year (with the government sending you the difference or vice versa). Generally speaking contractors may set aside more money pre-tax for retirement and have better investment options. This is because solo 401(k) retirement accounts are cost-effective and flexible and the contractor can set aside the full $18K pre-tax as well as having the company contribute generously (pre-tax) to the retirement account. Contractors can also easily employ spouses and set aside even more. The details of how frequently you are paid as a contractor and how much notice (if any) the company must give you before terminating your relationship are negotiated between you and the company and are generally pretty flexible. You could get paid your whole year salary in a lump sum if you wanted. The company that is paying you will not normally give you any benefits whatsoever...in this way it is the same situation as it is in Italy. By the way the three points you mention in your edit are definitely not true in the US." }, { "docid": "549466", "title": "", "text": "&gt;exxon avoids paying taxes in the US on their profits [Exxon paid 31 billion in US income taxes on 73 billion in profits in 2011](http://finance.yahoo.com/q/is?s=XOM+Income+Statement&amp;annual). They also paid local taxes, state taxes, property taxes, their portion of SS taxes, among others. Other years are similar. &gt;like most multi national corps Wrong. [Read the GAO report on that](http://www.gao.gov/new.items/d08957.pdf). From page 8 it shows that in fact most companies actually do pay tax, and not many companies pay no tax over a very long period. Only around 2.8% of companies had no liability over the period studied. What can you conclude? Most companies pay tax. Do you have a source otherwise that is actually a study this comprehensive? You're probably confused since most pop reporting on this report did not actually read it, and just reported on what they wanted it to say. Don't let facts get in the way of your rants." }, { "docid": "427469", "title": "", "text": "If significant amounts are involved, that would be a good time to consult a tax professional (EA/CPA licensed in your state). Generally, sale of a business is an ordinary income and you can only deduct tangible expenses, as Joe said. That would be laptops, bills, expenses per receipt, of course they must all be directly attributable to the business. You will need to be able to show that the laptops has only been used in business, recapture depreciation, etc. Same with all the rest of the expenses. If you're incorporated (i.e.: you hold this software under an S-Corp), then you're selling stocks, not business, and the tax treatment may be different, but I'm guessing this is not the case for you." }, { "docid": "454035", "title": "", "text": "\"Agreed on all points. You're still not saving a TON of money, given that you have to have a reasonable balance of salary/distributions, but an S-corp is the way to go if you're making substantial profit in order to save tax money. I'll reiterate (my wife is a CPA and she guides me on my business) - you can't legally save \"\"untaxed earnings\"\" for next year.\"" }, { "docid": "308255", "title": "", "text": "Let me first start off by saying that you need to be careful with an S-Corp and defined contribution plans. You might want to consider an LLC or some other entity form, depending on your state and other factors. You should read this entire page on the irs site: S-Corp Retirement Plan FAQ, but here is a small clip: Contributions to a Self-Employed Plan You can’t make contributions to a self-employed retirement plan from your S corporation distributions. Although, as an S corporation shareholder, you receive distributions similar to distributions that a partner receives from a partnership, your shareholder distributions aren’t earned income for retirement plan purposes (see IRC section 1402(a)(2)). Therefore, you also can’t establish a self-employed retirement plan for yourself solely based on being an S corporation shareholder. There are also some issues and cases about reasonable compensation in S-Corp. I recommend you read the IRS site's S Corporation Compensation and Medical Insurance Issues page answers as I see them, but I recommend hiring CPA You should be able to do option B. The limitations are in place for the two different types of contributions: Elective deferrals and Employer nonelective contributions. I am going to make a leap and say your talking about a SEP here, therefore you can't setup one were the employee could contribute (post 1997). If your doing self employee 401k, be careful to not make the contributions yourself. If your wife is employed the by company, here calculation is separate and the company could make a separate contribution for her. The limitation for SEP in 2015 are 25% of employee's compensation or $53,000. Since you will be self employed, you need to calculate your net earnings from self-employment which takes into account the eductible part of your self employment tax and contributions business makes to SEP. Good read on SEPs at IRS site. and take a look at chapter 2 of Publication 560. I hope that helps and I recommend hiring a CPA in your area to help." }, { "docid": "11295", "title": "", "text": "Yes, it is possible. But why would someone take full responsibility, if you're the one enjoying the profits? You'll have to pay your administrator a lot, and probably also develop a profit sharing plan to encourage success. What you're looking, essentially is to be a passive shareholder, and not participate in any management decisions at all. Depending on your location, it will pose additional disadvantages for you (for example, in the US, that would force you to structure your business as a C-Corp, vs more advantageous S-Corp)." }, { "docid": "251920", "title": "", "text": "Long Straddle: \\\\/ Assuming you're trying to straddle the spot price, it will be more expensive to set up than a strangle as options strikes near the spot are more costly. Any price movement will regain against what was spent to acquire the options. Long Strangle: \\\\_/ Assuming you're trying to strangle the spot price, it will be less expensive to set up than a straddle as the options strikes are away from the spot. It will require a larger price movement than the straddle to begin to regain value against what you spent, as there is a dead zone between the strikes where both expire worthless. The / is the gain from a price movement up from the increase in value of calls; the \\\\ is the gain from a price movement down from the increase in value of puts." }, { "docid": "310612", "title": "", "text": "\"You should probably have a tax professional help you with that (generally advisable when doing corporation returns, even if its a small S corp with a single shareholder). Some of it may be deductible, depending on the tax-exemption status of the recipients. Some may be deductible as business expenses. To address Chris's comment: Generally you can deduct as a business on your 1120S anything that is necessary and ordinary for your business. Charitable deductions flow through to your personal 1040, so Colin's reference to pub 526 is the right place to look at (if it was a C-corp, it might be different). Advertisement costs is a necessary and ordinary expense for any business, but you need to look at the essence of the transaction. Did you expect the sponsorship to provide you any new clients? Did you anticipate additional exposure to the potential customers? Was the investment (80 hours of your work) similar to the costs of paid advertisement for the same audience? If so - it is probably a business expense. While you can't deduct the time on its own, you can deduct the salary you paid yourself for working on this, materials, attributed depreciation, etc. If you can't justify it as advertisement, then its a donation, and then you cannot deduct it (because you did receive something in return). It might not be allowed as a business expense, and you might be required to consider it as \"\"personal use\"\", i.e.: salary.\"" }, { "docid": "508078", "title": "", "text": "\"Yes, you can make the election to file your LLC as an S-Corp, and Turbo Tax Business can help you with the S-Corp business return. You need to make sure you're set up correctly and there are a lot of things to be aware of. For example, the whole \"\"reasonable salary\"\" thing is a can of worms. So while the answer to your question is \"\"yes, it's manageable, you can do it on your own,\"\" it might be worthwhile to have a professional help you the first year, make sure it's set up right, and then you can do it on your own in subsequent years.\"" }, { "docid": "251392", "title": "", "text": "\"Here's a brief rundown: 1. You're not going to need a lot of capital or debt 2. You aren't in a high-liability or high (MM+) revenue industry unless you're making children's toys out of reclaimed dynamite or something 3. You are operating by yourself The first fact rules out S or C corp. The second fact dings LLC, and the third one rules out a LLP or GP by default, although you can always convert later if you get a partner. Benefits of sole proprietorship include very simple taxes! As a pass-through entity, the business's income is considered your own, and business expenses are tax deductible. You don't need separate tax returns for both. Additionally, if it's just your name, you might not even need a license depending on your state and municipality (figure this out). If you want a different name, you usually need to register \"\"doing business as [name]\"\" with your state or municipality. Lastly, you don't need to use business income in any special way, since you have no additional tax liability or general liability shield. With an LLC, there are a lot of rules and restrictions. Let me know if you have any specific questions.\"" }, { "docid": "350925", "title": "", "text": "A long straddle using equity would be more akin to buying a triple leveraged ETF and an inverse triple leveraged ETF, only because one side will approach zero while the other can theoretically increase to infinity, in a short time span before time decay hits in. The reason your analogy fails is because the delta is 1.0 on both sides of your trade. At the money options, a necessary requirement for a straddle, have a delta of .5 There is an options strategy that uses in the money calls and puts with a delta closer to 1.0 to create an in the money strangle. I'm not sure if it is more similar to your strategy, an analogous options strategy would be better than yours as it would not share the potential for a margin call." }, { "docid": "316074", "title": "", "text": "\"I've been in a similar situation before. While contracting, sometimes the recruiting agency would allow me to choose between being a W2 employee or invoicing them via Corp-2-Corp. I already had a company set up (S-Corp) but the considerations are similar. Typically the C2C rate was higher than the W2 rate, to account for the extra 7.65% FICA taxes and insurance. But there were a few times where the rate offered was identical, and I still choose C2C because it enabled me to deduct many of my business expenses that I wouldn't have otherwise been able to deduct. In my case the deductions turned out to be greater than the FICA savings. Your case is slightly different than mine though in that I already had the company set up so my company related costs were \"\"sunk\"\" as far as my decision was concerned. For you though, the yearly costs associated with running the business must be factored in. For example, suppose the following: Due to these expenses you need to make up $3413 in tax deductions due to the LLC. If your effective tax rate on the extra income is 30%, then your break even point is approximately $8K in deductions (.3*(x+3413)=3413 => x = $7963) So with those made up numbers, if you have at least $8K in legitimate additional business expenses then it would make sense to form an LLC. Otherwise you'd be better off as a W2. Other considerations:\"" }, { "docid": "121187", "title": "", "text": "An S-corp doesn't pay income tax -- taxation is pass-through. This being the case, there are no tax deductions it could take for charitable giving. The solution would be for you to make the contribution out of your own pocket and then personally claim the deduction on your own taxes." }, { "docid": "515765", "title": "", "text": "&gt;So if some 3rd world country with 0 infrastructure offers a better tax environment, we should just join them in the race to the bottom? US companies don't want to domicile in a 3rd world country. That's not who we compete with for corporate domiciling. We compete with other anglophone countries and some northern European countries with far lower tax rates. &gt;but whatever is happening in the tax code that makes these inversions possible needs to be fixed. That would be the high tax rate. Unless you want to make it illegal for an American company to buy another company or to sell itself. I expect we will hear that soon from some of the totalitarian leftists. the NYTimes has the cyclical average effective corp tax rate for S&amp;P500 companies at 29%. That's pulled from CapIQ which pulls directly from SEC documents. http://www.nytimes.com/interactive/2013/05/25/sunday-review/corporate-taxes.html Citizens for Tax Justice is a hopelessly distorted propaganda outfit. The summary (let alone the org's name) should have alerted you that any findings are distorted bullshit. These dumb fucks don't think stock compensation is an expense. They do not understand the economic reasoning behind accelerated depreciation. They are financially and economically retarded. On top of that they desire the full 35% corporate tax rate on all global income of US corporations without any deferments, by far the most punitive corporate tax treatment in the entire world." } ]

[ { "docid": "166467", "title": "", "text": "The CNBC site is littered with videos. Whenever I click a link to one of their articles, it seems to be a video instead. Not like having the channel streamed, but most of the top stories." } ]

[ { "docid": "143100", "title": "", "text": "Try to use VOIP service provider or web enabled conference calling services in your home phone. Now a days communication technologies have seen a boost as well as integration of different formats and platforms which easily reduces phone bills of a user. Service such as UberConference, Skype, Webinar etc enables audio/video as well as web conferencing feature for their user. Service tiers such as free plans, basic plans and business plans allow user to use these conference calling services per their need. Have a look at any such service and use it as an alternative of your home phone line." }, { "docid": "317285", "title": "", "text": "Does not surprise me in the least. Sony has zero innovation now. Their audio products are shit. Their TV production is hitting the end of the line. The PS3 barely survived launch and they were beaten badly by an affordable, innovative, and horrendously underpowered competitor. Their online store is a fucking joke and they spend too much time pandering to companies like Capcom and Konami (who have nothing but tapped out IP's now and they keep trying to leech as much out of them as they can which, after RE6 reviews have shown, is about to implode under their own weight). The Vita is not doing well at all and it's library of games is missing high demand games and most of them are ports of their lackluster PS3 counter parts. I hope their president can turn this shit around, but his task and the depth of the issues may make that impossible. He's just starting to play catch up right now and it's going to be some time before they can surpass anyone. They need to cut the fat, ditch what's not working for them and never will again (like their smart phones), and focus on innovation instead of beating old ideas into the ground and copycatting their competitors (i.e. PS Move)." }, { "docid": "231398", "title": "", "text": "I would like to know what others think, but for now it looks like the market thinks they'll be able to compete in online content distribution, not solely hardware. The stock was priced at the upper end of its valuation range and it still went way up today. I myself am skeptical about their long-term profit potential given how much disruption is going to hit the streaming market over the next five years. Tough to know with high probability who the winners will be at this point other than probably Netflix and Amazon." }, { "docid": "275410", "title": "", "text": "\"TARP was ~$475 billion of loans to institutions. Loans that are to be paid back, with interest (albeit very low interest). A significant percentage of the TARP loans have been (or will be) paid back. So, the final price tag of the TARP was only a few $billion (pretty low considering the scale of the program). There is ~$10 trillion in mortgage debt outstanding. That's a much higher price tag than TARP. Secondly, paying off the mortgages = no repayment to the government as there was with TARP. The initial price tag of your plan would be ~$10 trillion, instead of a few $billion. Furthermore how does a government with >$15 trillion in debt already come up with an extra ~$10 trillion to pay off people's mortgages? Should the government go deeper into debt? Print more money and trigger inflation? (Note: Some people like to talk about a \"\"secret bailout\"\" by the Fed, implying that the true cost of TARP was much higher than claimed by the government. The \"\"secret bailout\"\" was a series of short-term low/no interest loans to banks. Because they were loans, which were paid back, my point still stands.) Some other issues to consider: Remember that the principal balance of your mortgage is only a small portion of your payments to the bank. Over 30 years, you pay a lot of $$$ in interest to the bank (that's how banks make a profit). Banks are expecting that revenue, and it is factored into their financial projections. If those revenue streams suddenly disappeared, I expect it would majorly screw the up the financial industry. Many people bought houses during the real estate boom, when housing prices were inflated far beyond the \"\"real\"\" value of the house. Is it right to overpay for these houses? This rewards the banks for accepting the inflated value during the appraisal process. (Loan modification forces banks to accept the \"\"real\"\" value of the house.) The financial crisis was triggered by people buying houses they could not afford. Should they be rewarded with a free house for making poor financial decisions?\"" }, { "docid": "539733", "title": "", "text": "\"I still think this tech boom is different. The 2000 boom/bust was so much based around a fiction. Namely, the infrastructure and logistics. The country was not yet set up for streaming services or online retail, the main drivers of that boom/bust. Today, broadband is ubiquitous, there's a computer in every home, and a smartphone in every pocket. Big data and automation drives vastly more efficient logistics, with the only main obstacle still yet to be worked out is AI that will allow companies like Uber and Tesla to realize their valuations. And the main drivers of tech are the so-called FAANG stocks (Facebook, Alphabet, Amazon, Apple and Netflix), as well as other tech like Microsoft and Cisco. What's the difference between these and, say, Pets.com or HotBot? *These are real companies.* Pets.com went boom to bust in less than a year. Broadcast.com sold for $5+billion...in 1999 (u kidin me?) Today's \"\"overvalued\"\" stocks have product, customers, business models and strategies in place. And the infrastructure they depend on actually exists.\"" }, { "docid": "74679", "title": "", "text": "Online video delivery and tracking is not new to the internet, however, it is only in recent times that web masters are waking up to the fine utility of this service. There are internet companies that specialize in uploading or hosting, if you would call it that, video you need to display on your site." }, { "docid": "137465", "title": "", "text": "I'm fairly convinced there is no difference whatsoever between dividend payment and capital appreciation. It only makes financial sense for the stock price to be decreased by the dividend payment so over the course of any specified time interval, without the dividend the stock price would have been that much higher were the dividends not paid. Total return is equal. I think this is like so many things in finance that seem different but actually aren't. If a stock does not pay a dividend, you can synthetically create a dividend by periodically selling shares. Doing this would incur periodic trade commissions, however. That does seem like a loss to the investor. For this reason, I do see some real benefit to a dividend. I'd rather get a check in the mail than I would have to pay a trade commission, which would offset a percentage of the dividend. Does anybody know if there are other hidden fees associated with dividend payments that might offset the trade commissions? One thought I had was fees to the company to establish and maintain a dividend-payment program. Are there significant administrative fees, banking fees, etc. to the company that materially decrease its value? Even if this were the case, I don't know how I'd detect or measure it because there's such a loose association between many corporate financials (e.g. cash on hand) and stock price." }, { "docid": "71125", "title": "", "text": "Innovation? Last I checked, they still do the same damn thing they've been doing for the past decade or more. They just happened to have been the first successful brand in the video streaming industry when it began. No amount of free coffee and naps and beer will change that." }, { "docid": "468162", "title": "", "text": "\"The problem with these services is that they resell a random assortment of programs at a pretty high price. Buying the programs a la carte adds up quick, especially when a SD stream of varying quality costs as much or more than the DVD set when it is released (don't get me started on the HD up-charges). That's per show, per season. It makes it really expensive to catch up on a season, when you are essentially \"\"buying the seasons\"\" to stream them, when all you want to do it \"\"rent them\"\" instead. The way this is not like steam, and the point I think OP is trying to make, is that stuff is all over the place. People don't want to have to jump between Hulu, CBS.com, iTunes, Netflix, Amazon, etc. Plus, some places have some things for free, some charge a monthly fee, some charge per-view (rent), some charge once per show/season/movie (buy), etc. Some offerings that are free are actually sold for a fee through other services. Right now, it's sort of a mess. I'm not even sure what the right model is (buy, rent, season pass, ad-supported, etc) and I'm sure there will be competing models for the foreseeable future.\"" }, { "docid": "92462", "title": "", "text": "Are there banks where you can open a bank account without being a citizen of that country without having to visit the bank in person? I've done it the other way around, opened a bank account in the UK so I have a way to store GBP. Given that Britain is still in the EU you can basically open an account anywhere. German online banks for instance allow you to administrate anything online, should there be cards issued you would need an address in the country. And for opening an account a passport is sufficient, you can identify yourself in a video chat. Now what's the downside? French banks' online services are in French, German banks' services are in German. If that doesn't put you off, I would name such banks in the comments if asked. Are there any online services for investing money that aren't tied to any particular country? Can you clarify that? You should at least be able to buy into any European or American stock through your broker. That should give you an ease of mind being FCA-regulated. However, those are usually GDRs (global depository receipts) and denominated in GBp (pence) so you'd be visually exposed to currency rates, by which I mean that if the stock goes up 1% but the GBP goes up 1% in the same period then your GDR would show a 0% profit on that day; also, and more annoyingly, dividends are distributed in the foreign currency, then exchanged by the issuer of the GDR on that day and booked into your account, so if you want to be in full control of the cashflows you should get a trading account denominated in the currency (and maybe situated in the country) you're planning to invest in. If you're really serious about it, some brokers/banks offer multi-currency trading accounts (again I will name them if asked) where you can trade a wide range of instruments natively (i.e. on the primary exchanges) and you get to manage everything in one interface. Those accounts typically include access to the foreign exchange markets so you can move cash between your accounts freely (well for a surcharge). Also, typically each subaccount is issued its own IBAN." }, { "docid": "584304", "title": "", "text": "\"You don't state a long term goal for your finances in your message, but I'm going to assume you want to retire early, and retire well. :-) any other ideas I'm missing out on? A fairly common way to reach financial independence is to build one or more passive income streams. The money returned by stock investing (capital gains and dividends) is just one such type of stream. Some others include owning rental properties, being a passive owner of a business, and producing goods that earn long-term royalties instead of just an immediate exchange of time & effort for cash. Of these, rental property is probably one of the most well-known and easiest to learn about, so I'd suggest you start with that as a second type of investment if you feel you need to diversify from stock ownership. Especially given your association with the military, it is likely there is a nearby supply of private housing that isn't too expensive (so easier to get started with) and has a high rental demand (so less risk in many ways.) Also, with our continued current low rate environment, now is the time to lock-in long term mortgage rates. Doing so will reap huge benefits as rates and rents will presumably rise from here (though that isn't guaranteed.) Regarding the idea of being a passive business owner, keep in mind that this doesn't necessarily mean starting a business yourself. Instead, you might look to become a partner by investing money with an existing or startup business, or even buying an existing business or franchise. Sometimes, perfectly good business can be transferred for surprisingly little down with the right deal structure. If you're creative in any way, producing goods to earn long-term royalties might be a useful path to go down. Writing books, articles, etc. is just one example of this. There are other opportunities depending on your interests and skill, but remember, the focus ought to be on passive royalties rather than trading time and effort for immediate money. You only have so many hours in a year. Would you rather spend 100 hours to earn $100 every year for 20 years, or have to spend 100 hours per year for 20 years to earn that same $100 every year? .... All that being said, while you're way ahead of the game for the average person of your age ($30k cash, $20k stocks, unknown TSP balance, low expenses,) I'm not sure I'd recommend trying to diversify quite yet. For one thing, I think you need to keep some amount of your $30k as cash to cover emergency situations. Typically people would say 6 months living expenses for covering employment gaps, but as you are in the military I don't think it's as likely you'll lose your job! So instead, I'd approach it as \"\"How much of this cash do I need over the next 5 years?\"\" That is, sum up $X for the car, $Y for fun & travel, $Z for emergencies, etc. Keep that amount as cash for now. Beyond that, I'd put the balance in your brokerage and get it working hard for you now. (I don't think an average of a 3% div yield is too hard to achieve even when picking a safe, conservative portfolio. Though you do run the risk of capital losses if invested.) Once your total portfolio (TSP + brokerage) is $100k* or more, then consider pulling the trigger on a second passive income stream by splitting off some of your brokerage balance. Until then, keep learning what you can about stock investing and also start the learning process on additional streams. Always keep an eye out for any opportunistic ways to kick additional streams off early if you can find a low cost entry. (*) The $100k number is admittedly a rough guess pulled from the air. I just think splitting your efforts and money prior to this will limit your opportunities to get a good start on any additional streams. Yes, you could do it earlier, but probably only with increased risk (lower capital means less opportunities to pick from, lower knowledge levels -- both stock investing and property rental) also increase risk of making bad choices.\"" }, { "docid": "162884", "title": "", "text": "A great way to learn is by watching then doing. I run a very successful technical analysis blog, and the first thing I like to tell my readers is to find a trader online who you can connect with, then watch them trade. I particularly like Adam Hewison, Marketclub.com - This is a great website, and they offer a great deal of eduction for free, in video format. They also offer further video based education through their ino.tv partner which is paid. Here is a link that has their free daily technical analysis based stock market update in video format. Marketclub Daily Stock Market Update Corey Rosenblum, blog.afraidtotrade.com - Corey is a Chartered Market Technician, and runs a fantastic technical analysis blog the focuses on market internals and short term trades. John Lansing, Trending123.com - John is highly successful trader who uses a reliable set of indicators and patterns, and has the most amazing knack for knowing which direction the markets are headed. Many of his members are large account day traders, and you can learn tons from them as well. They have a live daily chat room that is VERY busy. The other option is to get a mentor. Just about any successful trader will be willing to teach someone who is really interested, motivated, and has the time to learn. The next thing to do once you have chosen a route of education is to start virtual trading. There are many platforms available for this, just do some research on Google. You need to develop a trading plan and methodology for dealing with the emotions of trading. While there is no replacement for making real trades, getting some up front practice can help reduce your mistakes, teach you a better traders mindset, and help you with the discipline necessary to be a successful trader." }, { "docid": "302152", "title": "", "text": "Sign Up to Just Been Paid for FREE INFORMATION to get started to make money daily with JSS Tripler. You can get no obligation free information to evaluate JSS Tripler further and find out why, many others like YOU who has been searching to make money online has found out how to make passive daily income with no sponsoring required in JSS Tripler. You can sign up free and seconds away from receiving information to help you get started and making money! I want to personaly thank you for taking the time to read my bonus offer. You'll see in a moment that it is truly the Best Bonus Ever offered for the Just Been Paid Reviews Program. And I do mean ever. Let's get one thing clear from the begining. There's only one reason I'm promoting Just Been Paid Reviews Program : It Really Is That Good! And if you can't see the true power of this program than you're better off without it. Seriously. Just Been Paid Reviews Program has everything you need to start earning money online from the first week of aplying the techniques taught inside. That's why I want to be clear on this: Just Been Paid Reviews Program is by far the best package I've seen so far this entire year. And such a great product simply deserves a great bonus package. Period. And here's where I step in. But before I present to you my truly amazing bonus package for the Just Been Paid Reviews Program course I want to ask you something. And by God this is serious. Where do you consider yourself to be in this very moment? I mean... are you really happy with your current state of your financial situation? Seriously. This is not a trick question and you don't have to be ashamed to answer. There's no one here beside you and me. And you're the only one that can answer that question. Because you see...you're the only one that can change something in your life for the better." }, { "docid": "364282", "title": "", "text": "\"Create a meaningful goal for yourself which would distract you from impulsively spending all your money and help you to direct it towards something more meaningful. Maybe you're curious about just how little money you can live off of in one year and you're up for a challenge. Maybe you want to take a whole year off from work. A trip around the world. Or create a financial independence account, the money that is put into this account should NEVER be touched, the idea is to live off of the interest that it throws off. I strongly suggest that you listen to the audio book \"\"PROSPERITY CONSCIOUSNESS\"\" by Fredric Lehrman. You can probably find a copy at your local library, or buy if off of amazon.\"" }, { "docid": "583080", "title": "", "text": "As yet another explanation of why it does not really matter, you can look at this from the valuation point of view. Stock price is the present value of its future cash flows (be it free cash flow of the firm or dividends, depending on the model). Let's have a look at the dividends case. Imagine, the price of the stock is based on only three dividends streams $5 dollars each: dividend to be paid today, in year 1, and in year 2. Each should be discounted back to today (say, at 10%), except today's dividend, since today is now. Once that dividend is paid, it is no longer in the stream of cash flows. So if we just delete that first $5 from the formula, the price will adjust itself down by the amount of the dividend to $8.68. NOTE that this is a very simple example, since in reality cash flows streams are arguably infinite and because there are many other factors affecting stock price. But simply for your understanding, this example should provide you with the reason simply from the valuation perspective." }, { "docid": "280190", "title": "", "text": "I really wanted to like SoundCloud. I tried to like it, and for a while I did like it, was considering to upgrade to the paid platform. Then I discovered the Google audio cast simply did nto work on many musical tracks, for no apparent reason. Sometimes they would work one day, and not the next. That is fine, I figured it was some kind of retarded DRM on the platform given over to the creators. I'm fine with that, but the way the bug works is it doesn't just skip the track blocked on Google chrome audio cast, it just gets stuck. Fuck it, I switched to Google play audio, via YouTube red. No stupid chrome cast drama, which BTW... could easily be circumvented by connecting an audio cable or using Bluetooth remote audio, it's just more convenient to use chrome cast." }, { "docid": "195129", "title": "", "text": "I think you're discounting the idea that cable companies will hardly have any subscribers and netflix will be producing more content than all of the major studios that exist today combined. They're going to dominate online media delivery and who knows what other things they might roll out one day. Remember how people evaluated them based on being a dvd mailing service, and then one day they rolled out this online streaming service.. boom." }, { "docid": "324656", "title": "", "text": "\"Grad school applications typically have deadlines around December or January, so you're thinking about this at the right time. First, obviously, you should get an idea of where you want to go, and what kind of program. There's plenty of ranking lists online that can help give you an idea. Grad school applications take a non-trivial amount of effort, so most people apply to only 5-10. Next, you'll want to contact potential references. The grad school websites should inform you what type of reference they want, but in my experience these were mostly academic and usually 2-3 per application, finance programs may want more professional references as well. Try to choose the right references for the application, e.g. I applied to financial engineering programs, and would usually have one economics professor and then either a math professor or a statistics professor depending on the focus of the program. Now, check to see if your programs require a GRE/GMAT score (they probably will), and start studying ASAP. There's tons of study materials available both in book form and online, and if you can put the time in you can probably get a decent score with just a few weeks (4-6) of studying. As far as I know, just about every program that accepts a GMAT score will also accept a GRE score, but not necessarily the other way around, so you may be better off studying for the GRE (verify this!). And with all those components complete, you'll basically be done! Some applications will ask for various forms of cover letter, or have other essay questions, so set aside some time to write these as well. Also, if you're looking at Finance Master's programs, I notice that they tend to come in a few varieties. Some set you up for PhDs and are naturally more academic focused, where as \"\"terminal\"\" Master's that resemble an MBA will focus on trying to get you a job. Reflect a bit on what you want to accomplish with your degree and figure out the program that's best for that. If you get in to a top school then it won't matter much regardless, but otherwise it is very likely that schools which produce good PhD candidates and research are not necessarily the same schools which place people on Wall Street. Hope that helps :)\"" }, { "docid": "186127", "title": "", "text": "A security is a class of financial instrument you can trade on the market. A share of stock is a kind of security, for example, as is a bond. In the case of your mortgage, what happens: You take out a loan for $180k. The loan has two components. a. The payment stream (meaning the principal and the interest) from the loan b. The servicing of the loan, meaning the company who is responsible for accepting payments, giving the resulting income to whomever owns it. Many originating banks, such as my initial lender, do neither of these things - they sell the payment stream to a large bank or consortium (often Fannie Mae) and they also sell the servicing of the loan to another company. The payment stream is the primary value here (the servicing is worth essentially a tip off the top). The originating bank lends $180k of their own money. Then they have something that is worth some amount - say $450k total value, $15k per year for 30 years - and they sell it for however much they can get for it. The actual value of $15k/year for 30 years is somewhere in between - less than $450k more than $180k - since there is risk involved, and the present value is far less. The originating bank has the benefit of selling that they can then originate more mortgages (and make money off the fees) plus they can reduce their risk exposure. Then a security is created by the bigger bank, where they take a bunch of mortgages of different risk levels and group them together to make something with a very predictable risk quotient. Very similar to insurance, really, except the other way around. One mortage will either default or not at some % chance, but it's a one off thing - any good statistician will tell you that you don't do statistics on n=1. One hundred mortgages, each with some risk level, will very consistently return a particular amount, within a certain error, and thus you have something that people are willing to pay money on the market for." } ]

[ { "docid": "17661", "title": "", "text": "The trader has purchased 1095 options, each of which is a contract which entitles him to sell 100 shares of Cisco stock for $16 a share. He paid $71 for each contract (71 cents a share x 100) which is roughly $78k total. He will get $109,500 for each dollar below $16 Cisco's stock is when he exercises it (he can buy the stock for the going rate and then sell it for $16 immediately), or he can sell the option itself to someone else for a similar gain (usually a little more, especially if the option has a long time until it expires). If the option expires when the stock is over $16/share, he gets nothing; i.e. the original $78k is lost. For reference, Cisco's stock was trading at $17.14/share as of market close on March 18, 2010. The share price had recently been boosted by the recent news that they would be paying a quarterly dividend. It has been heading mostly downward since February 9, after they announced that they're not expecting profits to be as good as the analysts thought they would be: they claim that people aren't buying too much networking equipment just now, and they're also facing mounting competition from the likes of HP and Juniper for switches, and Aruba / HP / Motorola for wireless devices. They may lose market share or need to cut prices, hurting profits. Either way, there's certainly a real possibility of their stock going below $16 in the next few months, so people are willing to pay for those options. (Disclosure: I work for Aruba, who competes with Cisco. I also own shares of Aruba, possess assorted stock options and similar equity grants, and participate in the employee stock purchase program. I also own shares in Cisco indirectly through various mutual funds and ETFs.)" } ]

[ { "docid": "11148", "title": "", "text": "Reading financial statements is important, in the sense that it gives you a picture of whether revenues and profits are growing or shrinking, and what management thinks the future will look like. The challenge is, there are firms that make computers read filings for them and inform their trading strategy. If the computer thinks the stock price is below the growth model, it's likely to bid the stock up. And since it's automated it's moving it faster than you can open your web browser. Does this mean you shouldn't read them? In a sense, no. The only sensible trading strategy is to assume you hold things for as long as their fundamentals exceed market value. Financial statements are where you find those fundamentals. So you should read them. But your question is, is it worth it for investors? My answer is no; the market generally factors information in quickly and efficiently. You're better off sticking to passive mutual funds than trying to trade. The better reason to learn to read these filings is to get a better sense of your employer, potential employers, competitors and even suppliers. Knowing what your margins are, what your suppliers margins and acquisitions are, and what they're planning can inform your own decision making." }, { "docid": "311830", "title": "", "text": "Some lenders will make loans for vacant land, others will not. You have to discuss with local bank what are your plan for the land: live in the old mobile home; install a new mobile home; build a new house; Sell it to a developer; use it for camping... Is the property part of a development with other mobile homes? If so there may be complications regarding the use and rights of the property. Some local jurisdictions also want to eliminate mobile homes, so they may put limitations on the housing options." }, { "docid": "56196", "title": "", "text": "\"There isn't really a generic options strategy that gives you higher returns with lower risk than an equivalent non-options strategy. There are lots of options strategies that give you about the same returns with the same risk, but most of the time they are a lot more work and less tax-efficient than the non-options strategy. When I say \"\"generic\"\" I mean there may be strategies that rely on special situations (analysis of market inefficiencies or fundamentals on particular securities) that you could take advantage of, but you'd have to be extremely expert and spend a lot of time. A \"\"generic\"\" strategy would be a thing like \"\"write such-and-such sort of spreads\"\" without reference to the particular security or situation. As far as strategies that give you about the same risk/return, for example you can use options collars to create about the same effect as a balanced fund (Gateway Fund does this, Bridgeway Balanced does stuff like it I think); but you could also just use a balanced fund. You can use covered calls to make income on your stocks, but you of course lose some of the stock upside. You can use protective puts to protect downside, but they cost so much money that on average you lose money or make very little. You can invest cash plus a call option, which is equivalent to stock plus a protective put, i.e on average again you don't make much money. Options don't offer any free lunches not found elsewhere. Occasionally they are useful for tax reasons (for example to avoid selling something but avoid risk) or for technical reasons (for example a stock isn't available to short, but you can do something with options).\"" }, { "docid": "431459", "title": "", "text": "I don't know of any free API's for these data, but I'll provide what information I can. Compiling all of this information from the EDGAR system and exposing an interface to it requires a fair amount of work and maintenance, so it's usually market data companies that have the motivation and resources to provide such interfaces. I know of a few options that may or may not be close to what you're looking for. The SEC provides FTP access to the EDGAR system. You could download and parse the text files they provide. Yahoo Finance provides summary files of financial statements (e.g., GOOG) as well as links to the full statements in the EDGAR system. Once again, parsing may be your only option for these data. Xignite, a proprietary market data provider, provides a financial statement API. If you need these data for a commercial application, you could contact them and work something out. (Frankly, if you need these data for a commercial application, you're probably better off paying for the data) The Center for Research into Security Prices provides data from financial statements. I believe it's also exposed through several of their API's. As with most financial data, CRSP is sort of a gold standard, although I haven't personally used their API to fetch data from financial statements, so I can't speak for it specifically. This answer on StackOverflow mentions the quantmod R package and mergent. I can't vouch for either of those options personally. Unfortunately, you'll probably have to do some parsing unless you can find a paid data provider that's already compiled this information in a machine-readable format." }, { "docid": "282877", "title": "", "text": "&gt;If it causes a housing crisis, it will be for those who bought 3000 sq ft Mcmansions on what used to be farmland. Or those who have a 1200 sq ft home in a city like San Francisco. &gt;Removing the state and local tax deduction means there might finally be incentive for cities to consolidate local townships and increase overall efficiency again. This is a joke. The nature of the two-party system (and in some localities a totality of a one-part system, e.g. San Francisco and California) renders your statement out to be a joke with regards to how the real (local and state) bureaucracies and politics work out in the meat space." }, { "docid": "460725", "title": "", "text": "What exactly does the balance sheet of a software company tell you? The majority of meaningful assets are inside your employees' heads. You can't capitalize R&amp;D and depreciate it, it's a straight flow through to the income statement. And you can't put human capital on a balance sheet. Software firms generally carry little to no debt and their cap structure is almost all equity. What are you going to put up for collateral when your product is bits and bytes?" }, { "docid": "428619", "title": "", "text": "\"If the market is reasonably efficient, why wouldn't this become a self-defeating prophecy, with the eventual recovery priced in throughout the whole recession? Eventual, but when? That is a big unknown. In fact, even a recovery is not guaranteed. Japan's long deleveraging process is brought up often enough with regard to our current long and painful economic downturn. Given that the business cycle isn't predictable This is one of the big issues. If things were predictable, investing would be easy and there probably wouldn't be as much money to be made in it. owning stocks with a short time horizon is generally a bad idea Agreed. However, it does not mean that this does not happen. In fact, it happens every day. It's called day trading. Also, it is possible to make money that way, else it would not occur. So, strictly speaking, whether it is a good or bad idea comes down to specific situations. why would anyone buy stocks in the first place if they weren't prepared to ride out a recession if one happens? These things tend to happen at the worst times and they have a way of compounding or piling-up. E.g. you overextend yourself, the economy goes south, you find yourself jobless and unable to pay the mortgage, you are forced to liquidate some of your positions because you need cold, hard cash. Benjamin Graham is widely quoted to have stated that the stock market is a voting (opinion) machine in the short term and a weighing (fact) machine in the long term. This may not feel very satisfying to you: but, it is just the way it is. While the dissemination of information may be relatively efficient, the interpretation of that information is quite variable. It is not easy to put a number to most events. (By \"\"put a number\"\" I mean determine the impact to the balance sheet.) It is a complicated system, with many inputs and many actors, which have varying goals. While there may be an effective, Zen-like approach to investing, the markets cannot actually be simplified to \"\"buy low, sell high\"\" in practice. Or, more specific to your question \"\"buy and hold\"\" is a simple idea, that is not necessarily easy to implement. Prompted by JoeTaxpayer's comment, I went searching for one of my favorite quotes regarding the markets: \"\"Markets can remain irrational a lot longer than you and I can remain solvent.\"\" -- John Maynard Keynes And, I came across this one, which I think applies quite well to this question: \"\"The long run is a misleading guide to current affairs. In the long run we are all dead.\"\" -- John Maynard Keynes\"" }, { "docid": "535470", "title": "", "text": "\"With my current, limited knowledge (see end), I understand it the following way: Are share prices really described as \"\"memoryless\"\"? Yes. Is there a technical meaning of the term? What does it really mean? The meaning comes from Markov Models: Think of the behavior of the stock market over time as a Markov Chain, i.e. a probabilistic model with states and probabilistic transitions. A state is the current price of all stocks of the market, a transition is a step in time. Memoryless means that transitions that the stock market might make can be modelled by a relation from one state to another, i.e. it only depends on the current state. The model is a Markov Chain, as opposed to a more general Stochastic Process where the next state depends on more than the current state. So in a Markov Chain, all the history of one stock is \"\"encoded\"\" already in its current price (more precisely in all stock's prices). The memorylessness of stocks is the main statement of the Efficient Market Theory (EMT). If a company's circumstances don't change, then a drop in its share price is going to be followed by a rise later. So if the EMT holds, your statement above is not necessarily true. I personally belief the EMT is a good approximation - only large corporations (e.g. Renaissance Technologies) have enough ressources (hundreds of mathematicians, billions of $) to be able to leverage tiny non-random movements that stem from a not completely random, mostly chaotic market. The prices can of course change when the company's circumstances change, but they aren't \"\"memoryless\"\" either. A company's future state is influenced by its past. In the EMT, a stock's future state is only influenced by its past as much as is encoded in its current price (more precisely, the complete market's current state). Whether that price was reached by a drop or a rise makes no difference. The above is my believe, but I'm by far no finance expert. I am working professionally with probabilistic models, but have only read one book on finance: Kommer's \"\"Souverän investieren mit Indexfonds und ETFs\"\". It's supposed to contain many statements of Malkiel's \"\"A Random Walk Down Wall Street\"\".\"" }, { "docid": "277359", "title": "", "text": "Think about it this way. If the strike price is $200, and cost of the option is $0.05. $200 + $0.05 is $200.05. That does not mean that the price of buying the option is more. Neither is the option writer going to pay you $70 to buy the contract. When you are buying options, you can only have a limited downside and that is the premium that you pay for it. In case of the $115 contract, your total loss could be a maximum of $19.3. In case of the $130 contract, your total loss could be a maximum of $9.3. This is due to the fact that the chances of AAPL going to hit $130 is less than the chance of AAPL hitting $115. Therefore, option writers offer the lower probability contracts at a lower price. Long story short, you do not pay for the Strike price. You only pay the premium and that premium keeps getting lower with and increase in Strike price(Or decrease if it is a put option). Strike price is just a number that you expect the stock or index to break. I would suggest you to read up a little more on pricing from here" }, { "docid": "517161", "title": "", "text": "\"Considering the fact that you are so unaware of how to find such data, I find it very very hard to believe that you actually need it. \"\"All trade and finance data for as much tickers and markets as possible.\"\" Wtf does that even mean. You could be referencing thousands of different types of data for any given \"\"ticker\"\" with a statement so vague. What are you looking for?\"" }, { "docid": "550643", "title": "", "text": "If you can afford the cost and risk of 100 shares of stock, then just sell a put option. If you can only afford a few shares, you can still use the information the options market is trying to give you -- see below. A standing limit order to buy a stock is essentially a synthetic short put option position. [1] So deciding on a stock limit order price is the same as valuing an option on that stock. Options (and standing limit orders) are hard to value, and the generally accepted math for doing so -- the Black-Scholes-Merton framework -- is also generally accepted to be wrong, because of black swans. So rather than calculate a stock buy limit price yourself, it's simpler to just sell a put at the put's own midpoint price, accepting the market's best estimate. Options market makers' whole job (and the purpose of the open market) is price discovery, so it's easier to let them fight it out over what price options should really be trading at. The result of that fight is valuable information -- use it. Sell a 1-month ATM put option every month until you get exercised, after which time you'll own 100 shares of stock, purchased at: This will typically give you a much better cost basis (several dollars better) versus buying the stock at spot, and it offloads the valuation math onto the options market. Meanwhile you get to keep the cash from the options premiums as well. Disclaimer: Markets do make mistakes. You will lose money when the stock drops more than the option market's own estimate. If you can't afford 100 shares, or for some reason still want to be in the business of creating synthetic options from pure stock limit orders, then you could maybe play around with setting your stock purchase bid price to (approximately): See your statistics book for how to set ndev -- 1 standard deviation gives you a 30% chance of a fill, 2 gives you a 5% chance, etc. Disclaimer: The above math probably has mistakes; do your own work. It's somewhat invalid anyway, because stock prices don't follow a normal curve, so standard deviations don't really mean a whole lot. This is where market makers earn their keep (or not). If you still want to create synthetic options using stock limit orders, you might be able to get the options market to do more of the math for you. Try setting your stock limit order bid equal to something like this: Where put_strike is the strike price of a put option for the equity you're trading. Which option expiration and strike you use for put_strike depends on your desired time horizon and desired fill probability. To get probability, you can look at the delta for a given option. The relationship between option delta and equity limit order probability of fill is approximately: Disclaimer: There may be math errors here. Again, do your own work. Also, while this method assumes option markets provide good estimates, see above disclaimer about the markets making mistakes." }, { "docid": "324259", "title": "", "text": "\"&gt; It's very funny that you call an analysis of the current state of the industry speculation, and then go on to talk about something you think is going to happen...which, by the way, has had six years to happen and hasn't yet. Also, it's as if you don't think first mover advantage exists. Six years is a long time to build up a lead, especially in automotive, where product cycles and development times are so long. I freely admit that my opinion is just opinion/speculation. Anyone who talks about the stock market with certainty is someone not to listen to. &gt; Honestly, look up the words \"\"vertical integration\"\" before continuing the conversation. And the word \"\"Panasonic\"\" as well. I know all about them. &gt; But wait, I thought you said they were wrong because \"\"ACTUAL BATTERY COMPANIES\"\" aren't involved? And that ACTUAL BATTERY COMPANIES know better than them? But I guess the ACTUAL BATTERY COMPANIES don't actually know anything, and they should listen to an idiot on the internet who has so far proven himself to be wrong about everything he's said? Panasonic hasn't yet agreed to put up a penny. They will build batteries they are confident TSLA can sell, that is all. &gt; It seems Panasonic is not as optimistic about the plant as you are. &gt; Well, again, if you listened to the call, which is a pretty basic first step to talking about the quarterly results, which for some reason you insist on continuing to do despite being completely ignorant of them, then you might not be saying such stupid things. Like what? You are the one who insisted Panasonic was putting up a billion dollars, which is a lie. &gt; Panasonic, you see, is a rather conservative Japanese company. This is even mentioned in your article when they talk about plasma displays. This is why they are always measured in their public statements, because that's what Japanese companies do. But, as specified in the call, Panasonic's actions as a partner to Tesla have always been excellent. And if you actually bothered to read your own article, you would see that they've committed to 2 billion cells and 200-300 million for the factory. You know, an ACTUAL BATTERY COMPANY. So tell me when they put up a dollar. &gt; And if you actually bothered to read any other article, you would see that that very same quote of yours was followed up with \"\"However, Tesla is a very important partner to us and discussions are continuing. We need to look very carefully at auto demand and respond appropriately so of course that means taking a step-by-step approach to investment.\"\" Yes, that is the polite thing anyone would say. &gt; Also, there have been rumors of talks with LG and Samsung should Panasonic not decide to partner. I'm not sure I believe the rumors, and also I think they're unnecessary, because Panasonic will be a full partner in the gigafactory. They know that Tesla has been a huge source of profit for them, and their automotive supply (i.e. Tesla) has been one of the best-performing parts of their company for some time now. Mark my words, Panasonic's investment will end up being approximately $1 billion, all told. You can come back in a few years and check, if you like. We'll see. &gt; You mean, like an ACTUAL BATTERY COMPANY? The ones putting up the money? They haven't put up any money. &gt; So, since your point was so reliant on ACTUAL BATTERY COMPANIES having expertise and specialization and so on, does that mean you're now dropping that point, because you realized your bullshit wouldn't fly, and moving on to another sort of bullshit until one of them sticks? Because if you'd like to fix your ignorance, I can help you with that. But if you wouldn't, as seems to be the case, it seems somewhat like a waste of time to continue trying to explain basic concepts to you. They haven't put up a penny. Here is what people who know about batteries are saying: http://www.thestreet.com/story/12781526/1/williams-shorting-teslas-batteries.html\"" }, { "docid": "423513", "title": "", "text": "If you are looking for a simple formula or buying order / strategy to guarantee a lower buying price, unfortunately this does not exist. Otherwise, all investors would employ this strategy and the financial markets would no longer have an validity (aka arbitrage). Buying any investment contains a certain level of risk (other than US treasuries of course). Having said that, there are many option buying strategies that can employed to help increase your ROR or hedge an existing position. Most of these strategies are based a predicted future direction of a stock on the investor's part. For example, you hold the Ford stock and feel they are releasing their earnings report next week. You feel that they will not meet investors' expectations. You don't want to sell your shares but what you can do is buy put options. If the stock does indeed go down then you make money on your put options. Here is a document on options. It is moderately technical but very good if you want a good introduction on the subject. The strategy that I described above is on pg 33. http://www.m-x.ca/f_publications_en/en.guide.options.pdf" }, { "docid": "533507", "title": "", "text": "\"&gt; If an employer sent this to me I'd seriously consider that a threat in regards against how I practice my political beliefs. Why? There's no way the boss can know who voted for who, and it doesn't sound like he's threatening to hire people Obama bumper stickers or anything like that. This looks to me more like an attempt to inform his employees about how public policy can affect the company. (Note that I'm not saying his representations of and predictions about Obama's policies are accurate, but if they are, this is a perfectly reasonable statement to make.) &gt; It undermines my right to educate myself. I have no idea what you mean by that. Someone giving you information \"\"undermines your right\"\" to gather information from other sources?\"" }, { "docid": "158670", "title": "", "text": "Another option if you want a higher return is to tier your emergency fund so you are putting a portion in different savings vehicles, each with varying risk and rates of return. One option might be You will need to assess the risk of these vehicles to see if it fits within your tolerance. If not, just using the online savings account is a fine choice. One final note regarding I-bonds - they can't be cashed out until 1 year after you buy them. This may be too limiting to some depending on their perceived need for their emergency fund over the next year; others may be more comfortable with it." }, { "docid": "426944", "title": "", "text": "No, we did not apply for the loan. So, this is why we thought it was a bit strange a company just sending you a real check for $30K. It does not say anywhere in big red letters that it is a loan. Probably something in very small letters on a back of a paper. This is really horrible. Especially,if your customers do pay you by check and small business relies on online statement to determine who paid what. I can easily imagine a small outfit that just takes all the checks to the bank, cash them, and then use online statement to update their books. I do not see how it is helpful to businesses to receive pre-approved credit that is so poorly marked. Especially in the age of electronic transfers!!! I am trying to understand why I feel so offended by this, and I guess it all comes down to disgust: I refuse to believe that any serious company would use these sort of tactics and instead of us spending more time developing a better product, we have to put more time and effort into ensuring we do not fall victim to this." }, { "docid": "377112", "title": "", "text": "For example: do I need a realtor, or can I do their job myself? In general in the United States the real estate agent fee is paid by the seller of the property. Their agent will be more than happy keep the entire fee if they don't have to split it with your agent. If you don't have an agent you will be missing somebody who can help you find the property that meets your needs. They can also help explain what the different parts of the contract mean and give you advice regarding making an offer. Do I need to pay for an inspection, or am I likely to save enough money from skipping it to cover potential problems that they would have caught? Inspections are optional. Though the amount you are risking is the entire value of the purchase. If the property has a problem in the foundation, or the septic system, or the plumbing or electrical the cost to fix the issue could render the purchase not worth doing. If you discover the problem a year later and you have to repair the house and have to find temporary housing for a few months, you will regret skipping the inspection. What are some of the ways I can cut expenses on closing costs? Is there any low-hanging fruit? You need to do your homework. When you are ready to purchase a property take good look at the good faith estimate and look at each item. Ask them what the expense covers. Push back against those that seem optional or excessive. Keep in mind that moving the closing date from the end of a month to the start of the next month only changes the timing those charges, it doesn't really save you money. Rolling the costs into the loan sound easy but you have to think about. It means that you will be paying interest on those charges for the life of the loan. It is good that you are starting to think about all the costs." }, { "docid": "100021", "title": "", "text": "\"The difference between an American and European option is that the American option can be exercised at any time, whereas the European option can be liquidated only on the settlement date. The American option is \"\"continuous time\"\" instrument, while the European option is a \"\"point in time\"\" instrument. Black Scholes applies to the latter, European, option. Under \"\"certain\"\" (but by no means all) circumstances, the two are close enough to be regarded as substitutes. One of their disciples, Robert Merton, \"\"tweaked\"\" it to describe American options. There are debates about this, and other tweaks, years later.\"" }, { "docid": "279401", "title": "", "text": "\"Writing options means \"\"selling\"\" options and \"\"put\"\" options are contracts to sell a defined security (the underlying), at a specific date (expiration date) and at a specific price (strike price). So, writing put options simply mean selling to others contracts to sell. Your profit is limited to the premium but your loss may be unlimited in a falling market.\"" } ]

[ { "docid": "30220", "title": "", "text": "\"fennec has a very good answer but i feel it provides too much information. So i'll just try to explain what that sentence says. Put option is the right to sell a stock. \"\"16 puts on Cisco at 71 cents\"\", means John comes to Jim and says, i'll give you 71 cent now, if you allow me to sell one share of Cisco to you at $16 at some point in the future ( on expiration date). NYT quote says 1000 puts that means 1000 contracts - he bought a right to sell 100,000 shares of Cisco on some day at $16/share. Call option - same idea: right to buy a stock.\"" } ]

[ { "docid": "478873", "title": "", "text": "Oh what a crock of shit. The guy basically admits his bias in regards to being fired in that statement alone. The government isn't afraid of Bitcoin. Anyone who thinks that they are is a fucking moron. /u/SatyapriyaCC posts in fucking /r/conspiracy, so there you go." }, { "docid": "533507", "title": "", "text": "\"&gt; If an employer sent this to me I'd seriously consider that a threat in regards against how I practice my political beliefs. Why? There's no way the boss can know who voted for who, and it doesn't sound like he's threatening to hire people Obama bumper stickers or anything like that. This looks to me more like an attempt to inform his employees about how public policy can affect the company. (Note that I'm not saying his representations of and predictions about Obama's policies are accurate, but if they are, this is a perfectly reasonable statement to make.) &gt; It undermines my right to educate myself. I have no idea what you mean by that. Someone giving you information \"\"undermines your right\"\" to gather information from other sources?\"" }, { "docid": "426944", "title": "", "text": "No, we did not apply for the loan. So, this is why we thought it was a bit strange a company just sending you a real check for $30K. It does not say anywhere in big red letters that it is a loan. Probably something in very small letters on a back of a paper. This is really horrible. Especially,if your customers do pay you by check and small business relies on online statement to determine who paid what. I can easily imagine a small outfit that just takes all the checks to the bank, cash them, and then use online statement to update their books. I do not see how it is helpful to businesses to receive pre-approved credit that is so poorly marked. Especially in the age of electronic transfers!!! I am trying to understand why I feel so offended by this, and I guess it all comes down to disgust: I refuse to believe that any serious company would use these sort of tactics and instead of us spending more time developing a better product, we have to put more time and effort into ensuring we do not fall victim to this." }, { "docid": "226053", "title": "", "text": "Basically the first thing you should do before you invest your money is to learn about investing and learn about what you want to invest in. Another thing to think about is that usually low risk can also mean low returns. As you are quite young and have some savings put aside you should generally aim for higher risk higher return investments and then when you start to reach retirement age aim for less risky lower return investments. In saying that, just because an investment is considered high risk does not mean you have to be exposed to the full risk of that investment. You do this by managing your risk to an acceptable level which will allow you to sleep at night. To do this you need to learn about what you are investing in. As an example about managing your risk in an investment, say you want to invest $50,000 in shares. If you put the full $50,000 into one share and that share price drops dramatically you will lose a large portion of your money straight away. If instead you spent a maximum of $10,000 on 5 different shares, even if one of them falls dramatically, you still have another 4 which may be doing a lot better thus minimising your losses. To take it one step further you might say if anyone of the shares you bought falls by 20% then you will sell those shares and limit your losses to $2000 per share. If the worst case scenario occurred and all 5 of your shares fell during a stock market crash you would limit your total losses to $10,000 instead of $50,000. Most successful investors put just as much if not more emphasis on managing the risk on their investments and limiting their losses as they do in selecting the investments. As I am not in the US, I cannot really comment whether it is the right time to buy property over there, especially as the market conditions would be different in different states and in different areas of each state. However, a good indication of when to buy properties is when prices have dropped and are starting to stabilise. As you are renting at the moment one option you might want to look at is buying a place to live in so you don't need to rent any more. You can compare your current rent payment with the mortgage payment if you were to buy a house to live in. If your mortgage payments are lower than your rent payments then this could be a good option. But whatever you do make sure you learn about it first. Make sure you spend the time looking at for sale properties for a few months in the area you want to buy before you do buy. This will give you an indication of how much properties in that area are really worth and if prices are stable, still falling or starting to go up. Good luck, and remember, research, research and more research. Even if you are to take someone elses advice and recommendations, you should learn enough yourself to be able to tell if their advice and recommendations make sense and are right for your current situation." }, { "docid": "62397", "title": "", "text": "\"how is the money the FDIC has collected Fees collected from the banks: The FDIC receives no Congressional appropriations – it is funded by premiums that banks and thrift institutions pay for deposit insurance coverage and from earnings on investments in U.S. Treasury securities. http://www.fdic.gov/about/learn/symbol/index.html They also use the proceeds from liquidating the assets of failed banks to make payouts. Are there country specific agencies with a similar mission? Canada Deposit Insurance Corporation Instituto para la Ptotección al Ahorro Bancario (Mexico) Financial Services Compensation Scheme (UK) not quite like the FDIC You'll have to search for others yourself. :) Most importantly, are there any examples of a similar system that has failed? As the Mythbusters say, \"\"failure is always an option.\"\" There is a statement on FDIC's website to the effect that they are backed by the \"\"full faith and credit\"\" of the U.S. government. That said, the FDIC maintains its own fund to make insurance payouts. Granted, in the shakiness of the 2008-2009 financial crisis they did start waving a red flag about their realistic ability to cover their obligation. Practically speaking, the government will likely step in if necessary. This 2008 article regarding a propsed revamp of the UK's FSCS should be of general interest to you on this topic, though it does not answer the question of failed systems. (Well, as far as I know. I have only skimmed the article.)\"" }, { "docid": "594303", "title": "", "text": "Options, both puts and calls, are typically written/sold at different strike prices. For example, even though the stock of XYZ is currently trading at $12.50, there could be put options for prices ranging from $0.50 to $30.00, just as an example. There are several factors that go into determining the strike prices at which people are willing to write options. The writer/seller of an option is the person on the other side of the trade that has the opposite opinion of you. If you are interested in purchasing a put on a stock to hedge your downside, that means the writer/seller of the put is betting that you are wrong and that the stock price will rise instead." }, { "docid": "32485", "title": "", "text": "Volume @ 0 doesn't mean that there are no buyers and sellers, it just means that there hasn't been any trades done yet. What you need to look for are the bids and offers (for selling and buying, respectively). For further expiration and NTM or IT options there will almost always be a bid and an offer (but it may be very wide). Now, in case where there is 0 bid (no one is willing to buy), you may still have a chance if the option has some value in it. For that - you need your broker to try to shop it to market making firms. Now, depending on who your broker is, this may or may not be possible. Alternatively, if you have DMA (direct market access) to the options exchanges, you can try to put in an offer of your own and wait for someone to execute against you, however do not expect to be traded with unless your price is out of line with the cost. However, in wide markets, you can try Lampost options (they may give you price improvement) or try to offer very close to the bid. You may save yourself a penny or two and perhaps get a rebate if you are using BATSO or NASDAQO markets (if you have DMA and pass-through exchange fees)." }, { "docid": "517161", "title": "", "text": "\"Considering the fact that you are so unaware of how to find such data, I find it very very hard to believe that you actually need it. \"\"All trade and finance data for as much tickers and markets as possible.\"\" Wtf does that even mean. You could be referencing thousands of different types of data for any given \"\"ticker\"\" with a statement so vague. What are you looking for?\"" }, { "docid": "168983", "title": "", "text": "\"The statement \"\"Finance is something all adults need to deal with but almost nobody learns in school.\"\" hurts me. However I have to disagree, as a finance student, I feel like everyone around me is sound in finance and competition in the finance market is so stiff that I have a hard time even finding a paid internship right now. I think its all about perspective from your circumstances, but back to the question. Personally, I feel that there is no one-size-fits-all financial planning rules. It is very subjective and is absolutely up to an individual regarding his financial goals. The number 1 rule I have of my own is - Do not ever spend what I do not have. Your reflected point is \"\"Always pay off your credit card at the end of each month.\"\", to which I ask, why not spend out of your savings? plan your grocery monies, necessary monthly expenditures, before spending on your \"\"wants\"\" should you have any leftovers. That way, you would not even have to pay credit every month because you don't owe any. Secondly, when you can get the above in check, then you start thinking about saving for the rainy days (i.e. Emergency fund). This is absolutely according to each individual's circumstance and could be regarded as say - 6 months * monthly income. Start saving a portion of your monthly income until you have set up a strong emergency fund you think you will require. After you have done than, and only after, should you start thinking about investments. Personally, health > wealth any time you ask. I always advise my friends/family to secure a minimum health insurance before venturing into investments for returns. You can choose not to and start investing straight away, but should any adverse health conditions hit you, all your returns would be wiped out into paying for treatments unless you are earning disgusting amounts in investment returns. This risk increases when you are handling the bills of your family. When you stick your money into an index ETF, the most powerful tool as a retail investor would be dollar-cost-averaging and I strongly recommend you read up on it. Also, because I am not from the western part of the world, I do not have the cultural mindset that I have to move out and get into a world of debt to live on my own when I reached 18. I have to say I could not be more glad that the culture does not exist in Asian countries. I find that there is absolutely nothing wrong with living with your parents and I still am at age 24. The pressure that culture puts on teenagers is uncalled for and there are no obvious benefits to it, only unmanageable mortgage/rent payments arise from it with the entry level pay that a normal 18 year old could get.\"" }, { "docid": "82874", "title": "", "text": "If you know you will have a big bill, like braces. and you fully expect to hit the deductible then it can make sense. The deductible can trip some people up, because if they put too much into the limited purpose FSA and don't hit the deductible for the regular insurance policy, they can't get to all the money in the FSA. Because you have the ability to spend the potential money in the FSA before all the money has been contributed, it can allow you to make that payment for the braces in January. I did this the first year we had the HSA. I knew I needed to pay a dental bill early in the year. But the HSA would only have a few hundred dollars at that time, so I used the limited purpose FSA to be able to make that payment. This could also work if you spent a lot of money in the previous year. Because you have the ability to adjust how much money goes into the HSA each each pay period, this idea does keep the option open to fully fund the HSA if your finances improve. Regarding the deductible. The law limits what you can use the limited purpose FSA for: dental and vision only. There is an exception. If you hit the deductible for the high deductible insurance policy, then you can use the funds in the limited purpose FSA for ANY medical reason. When I did this a few years ago, I needed to send extensive paperwork to the company holding the funds before they would release the funds for dental. Once I sent them proof that I had met the deductible, then any medical expense after that date could use the FSA with minimal paperwork. If you fully fund the FSA beyond the cost of the braces, and then have a light year medical expense wise, you might not be able to spend all money in the FSA by the deadline. Regarding state taxes. I saw no difference in my states (Virginia) treatment of the funds. The state taxable income number was exactly the same as the federal taxable income number. It did not treat the money in the FSA differently than the money in the HSA." }, { "docid": "405670", "title": "", "text": "See thats just plain wrong. Minimum wage increases will not increase the total costs of living that puts it on par with the minimum wage. So many studies have been done on this exact question. This mentality is like saying in china that people should only make cents an hour because if they make anymore the cost of living will go up as well. Here are some good reads for you :) http://letjusticeroll.org/news/001185-raising-minimum-wage-does-not-increase-unemployment http://therealnews.com/t2/index.php?option=com_content&amp;task=view&amp;id=31&amp;Itemid=74&amp;jumival=5650&amp;updaterx=2010-10-08+11:40:17 http://www.dadychery.org/fr/2012/01/03/eight-states-raise-minimum-wage/ So many studies prove your statement wrong." }, { "docid": "391752", "title": "", "text": "After searching a bit and talking to some investment advisors in India I got below information. So thought of posting it so that others can get benefited. This is specific to indian mutual funds, not sure whether this is same for other markets. Even currency used for examples is also indian rupee. A mutual fund generally offers two schemes: dividend and growth. The dividend option does not re-invest the profits made by the fund though its investments. Instead, it is given to the investor from time to time. In the growth scheme, all profits made by the fund are ploughed back into the scheme. This causes the NAV to rise over time. The impact on the NAV The NAV of the growth option will always be higher than that of the dividend option because money is going back into the scheme and not given to investors. How does this impact us? We don't gain or lose per se by selecting any one scheme. Either we make the choice to get the money regularly (dividend) or at one go (growth). If we choose the growth option, we can make money by selling the units at a high NAV at a later date. If we choose the dividend option, we will get the money time and again as well as avail of a higher NAV (though the NAV here is not as high as that of a growth option). Say there is a fund with an NAV of Rs 18. It declares a dividend of 20%. This means it will pay 20% of the face value. The face value of a mutual fund unit is 10 (its NAV in this case is 18). So it will give us Rs 2 per unit. If we own 1,000 units of the fund, we will get Rs 2,000. Since it has paid Rs 2 per unit, the NAV will fall from Rs 18 to Rs 16. If we invest in the growth option, we can sell the units for Rs 18. If we invest in the dividend option, we can sell the units for Rs 16, since we already made a profit of Rs 2 per unit earlier. What we must know about dividends The dividend is not guaranteed. If a fund declared dividends twice last year, it does not mean it will do so again this year. We could get a dividend just once or we might not even get it this year. Remember, though, declaring a dividend is solely at the fund's discretion; the periodicity is not certain nor is the amount fixed." }, { "docid": "423513", "title": "", "text": "If you are looking for a simple formula or buying order / strategy to guarantee a lower buying price, unfortunately this does not exist. Otherwise, all investors would employ this strategy and the financial markets would no longer have an validity (aka arbitrage). Buying any investment contains a certain level of risk (other than US treasuries of course). Having said that, there are many option buying strategies that can employed to help increase your ROR or hedge an existing position. Most of these strategies are based a predicted future direction of a stock on the investor's part. For example, you hold the Ford stock and feel they are releasing their earnings report next week. You feel that they will not meet investors' expectations. You don't want to sell your shares but what you can do is buy put options. If the stock does indeed go down then you make money on your put options. Here is a document on options. It is moderately technical but very good if you want a good introduction on the subject. The strategy that I described above is on pg 33. http://www.m-x.ca/f_publications_en/en.guide.options.pdf" }, { "docid": "324259", "title": "", "text": "\"&gt; It's very funny that you call an analysis of the current state of the industry speculation, and then go on to talk about something you think is going to happen...which, by the way, has had six years to happen and hasn't yet. Also, it's as if you don't think first mover advantage exists. Six years is a long time to build up a lead, especially in automotive, where product cycles and development times are so long. I freely admit that my opinion is just opinion/speculation. Anyone who talks about the stock market with certainty is someone not to listen to. &gt; Honestly, look up the words \"\"vertical integration\"\" before continuing the conversation. And the word \"\"Panasonic\"\" as well. I know all about them. &gt; But wait, I thought you said they were wrong because \"\"ACTUAL BATTERY COMPANIES\"\" aren't involved? And that ACTUAL BATTERY COMPANIES know better than them? But I guess the ACTUAL BATTERY COMPANIES don't actually know anything, and they should listen to an idiot on the internet who has so far proven himself to be wrong about everything he's said? Panasonic hasn't yet agreed to put up a penny. They will build batteries they are confident TSLA can sell, that is all. &gt; It seems Panasonic is not as optimistic about the plant as you are. &gt; Well, again, if you listened to the call, which is a pretty basic first step to talking about the quarterly results, which for some reason you insist on continuing to do despite being completely ignorant of them, then you might not be saying such stupid things. Like what? You are the one who insisted Panasonic was putting up a billion dollars, which is a lie. &gt; Panasonic, you see, is a rather conservative Japanese company. This is even mentioned in your article when they talk about plasma displays. This is why they are always measured in their public statements, because that's what Japanese companies do. But, as specified in the call, Panasonic's actions as a partner to Tesla have always been excellent. And if you actually bothered to read your own article, you would see that they've committed to 2 billion cells and 200-300 million for the factory. You know, an ACTUAL BATTERY COMPANY. So tell me when they put up a dollar. &gt; And if you actually bothered to read any other article, you would see that that very same quote of yours was followed up with \"\"However, Tesla is a very important partner to us and discussions are continuing. We need to look very carefully at auto demand and respond appropriately so of course that means taking a step-by-step approach to investment.\"\" Yes, that is the polite thing anyone would say. &gt; Also, there have been rumors of talks with LG and Samsung should Panasonic not decide to partner. I'm not sure I believe the rumors, and also I think they're unnecessary, because Panasonic will be a full partner in the gigafactory. They know that Tesla has been a huge source of profit for them, and their automotive supply (i.e. Tesla) has been one of the best-performing parts of their company for some time now. Mark my words, Panasonic's investment will end up being approximately $1 billion, all told. You can come back in a few years and check, if you like. We'll see. &gt; You mean, like an ACTUAL BATTERY COMPANY? The ones putting up the money? They haven't put up any money. &gt; So, since your point was so reliant on ACTUAL BATTERY COMPANIES having expertise and specialization and so on, does that mean you're now dropping that point, because you realized your bullshit wouldn't fly, and moving on to another sort of bullshit until one of them sticks? Because if you'd like to fix your ignorance, I can help you with that. But if you wouldn't, as seems to be the case, it seems somewhat like a waste of time to continue trying to explain basic concepts to you. They haven't put up a penny. Here is what people who know about batteries are saying: http://www.thestreet.com/story/12781526/1/williams-shorting-teslas-batteries.html\"" }, { "docid": "313057", "title": "", "text": "\"It sounds like you're basing your understanding of your options regarding financing (and even if you need a car) on what the car salesman told you. It's important to remember that a car salesman will do anything and say anything to get you to buy a car. Saying something as simple as, \"\"You have a low credit score, but we can still help you.\"\" can encourage someone who does not realize that the car salesman is not a financial advisor to make the purchase. In conclusion,\"" }, { "docid": "278373", "title": "", "text": "\"According to the book of Hull, american and european calls on non-dividend paying stocks should have the same value. American puts, however, should be equals to, or more valuable than, european puts. The reason for this is the time value of money. In a put, you get the option to sell a stock at a given strike price. If you exercise this option at t=0, you receive the strike price at t=0 and can invest it at the risk-free rate. Lets imagine the rf rate is 10% and the strike price is 10$. this means at t=1, you would get 11.0517$. If, on the other hand, you did'nt exercise the option early, at t=1 you would simply receive the strike price (10$). Basically, the strike price, which is your payoff for a put option, doesn't earn interest. Another way to look at this is that an option is composed of two elements: The \"\"insurance\"\" element and the time value of the option. The insurance element is what you pay in order to have the option to buy a stock at a certain price. For put options, it is equals to the payout= max(K-S, 0) where K=Strike Price and St= Stock price. The time value of the option can be thought of as a risk-premium. It's difference between the value of the option and the insurance element. If the benefits of exercising a put option early (i.e- earning the risk free rate on the proceeds) outweighs the time value of the put option, it should be exercised early. Yet another way to look at this is by looking at the upper bounds of put options. For a european put, today's value of the option can never be worth more than the present value of the strike price discounted at the risk-free rate. If this rule isn't respected, there would be an arbitrage opportunity by simply investing at the risk-free rate. For an american put, since it can be exercised at any time, the maximum value it can take today is simply equals to the strike price. Therefore, since the PV of the strike price is smaller than the strike price, the american put can have a bigger value. Bear in mind this is for a non-dividend paying stock. As previously mentioned, if a stock pays a dividend it might also be optimal to exercise just before these are paid.\"" }, { "docid": "428619", "title": "", "text": "\"If the market is reasonably efficient, why wouldn't this become a self-defeating prophecy, with the eventual recovery priced in throughout the whole recession? Eventual, but when? That is a big unknown. In fact, even a recovery is not guaranteed. Japan's long deleveraging process is brought up often enough with regard to our current long and painful economic downturn. Given that the business cycle isn't predictable This is one of the big issues. If things were predictable, investing would be easy and there probably wouldn't be as much money to be made in it. owning stocks with a short time horizon is generally a bad idea Agreed. However, it does not mean that this does not happen. In fact, it happens every day. It's called day trading. Also, it is possible to make money that way, else it would not occur. So, strictly speaking, whether it is a good or bad idea comes down to specific situations. why would anyone buy stocks in the first place if they weren't prepared to ride out a recession if one happens? These things tend to happen at the worst times and they have a way of compounding or piling-up. E.g. you overextend yourself, the economy goes south, you find yourself jobless and unable to pay the mortgage, you are forced to liquidate some of your positions because you need cold, hard cash. Benjamin Graham is widely quoted to have stated that the stock market is a voting (opinion) machine in the short term and a weighing (fact) machine in the long term. This may not feel very satisfying to you: but, it is just the way it is. While the dissemination of information may be relatively efficient, the interpretation of that information is quite variable. It is not easy to put a number to most events. (By \"\"put a number\"\" I mean determine the impact to the balance sheet.) It is a complicated system, with many inputs and many actors, which have varying goals. While there may be an effective, Zen-like approach to investing, the markets cannot actually be simplified to \"\"buy low, sell high\"\" in practice. Or, more specific to your question \"\"buy and hold\"\" is a simple idea, that is not necessarily easy to implement. Prompted by JoeTaxpayer's comment, I went searching for one of my favorite quotes regarding the markets: \"\"Markets can remain irrational a lot longer than you and I can remain solvent.\"\" -- John Maynard Keynes And, I came across this one, which I think applies quite well to this question: \"\"The long run is a misleading guide to current affairs. In the long run we are all dead.\"\" -- John Maynard Keynes\"" }, { "docid": "276403", "title": "", "text": "I understand what you're asking for (you want to write options ON call options... essentially the second derivative of the underlying security), and I've never heard of it. That's not to say it doesn't exist (I'm sure some investment banker has cooked something like this up at some point), but if it does exist, you wouldn't be able to trade it as easily as you can a put or a LEAP. I'm also not sure you'd actually want to buy such a thing - the amount of leverage would be enormous, and you'd need a massive amount of margin/collateral. Additionally, a small downward movement in the stock price could wipe out the entire value of your option." }, { "docid": "23408", "title": "", "text": "Except when it does. [Legal definition of fraud](http://legal-dictionary.thefreedictionary.com/fraud): Fraud must be proved by showing that the defendant's actions involved five separate elements: (1) a false statement of a material fact,(2) knowledge on the part of the defendant that the statement is untrue, (3) intent on the part of the defendant to deceive the alleged victim, (4) justifiable reliance by the alleged victim on the statement, and (5) injury to the alleged victim as a result. 1.) a false statement of fact is implied as the person using the coupon is representing themselves as someone who is using the coupon for the first time (as he/she is in a disguise to appear to be a different person) 2.) knowledge is clear - the person using the coupon is going to the length of donning a disguise - they know they're trying to get away with something 3.) intent is shown by the length the person went to present themselves as a new customer as well as the posts on the forum 4.) assuming the cashier was deceived by the disguise, it's reasonable that Target put the transaction through as it believed it was doing so with a new customer 5.) injury is obvious" } ]

[ { "docid": "278718", "title": "", "text": "If you are looking for an advisor to just build a portfolio and then manage it, a robo-advisor can be beneficial (especially if the alternative is doing it your self, assuming that you are not well versed in the markets). The primary risk with one is that it does not build a portfolio that accurately represents your needs and risk tolerance. Some firms base the number of questions they ask you on sign up based not on what is needed to get a good profile, but on how many before people decide that it is too much hassle and bail. That usually results in poorer profiles. Also a live advisor may be better at really getting at your risk tolerance. Many of day our risk tolerance is one thing but in reality we are not so risk tolerant. Once the profile is built. The algorithms maintain your portfolio on a day by day basis. If rebalancing opportunities occur they take advantage of it. The primary benefit of a robo-advisor is lower fees or smaller minimum account balances. The downside is the lack of human interaction and financial advise outside of putting together a portfolio." } ]

[ { "docid": "21986", "title": "", "text": "\"It really depends on the value your financial adviser provides. Does he help with your 401K? Does he help you avoid making foolish moves? Does he really help you find funds that beat average market returns? Many people answer \"\"no\"\" to all of these questions and do their investing on their own. I personally prefer Fidelity because I find their web site easier to work with, but Vanguard is another option. At Fidelity you will have zero fee per year. You can buy Fidelity and many other mutual funds with no cost. You can buy iShares ETFs at no cost. Some funds do have a fee to purchase, but they are pretty low ($35) and are only collected when you buy, not yearly. Now some people do go it alone and it is a huge mistake. The news tends to only report negative stock market events, and many people were scared away from 2008 and missed wonderful gains since that time. If you pull your money out during corrections, stick with a financial adviser. If you will stop contributing because of a correction, stick with a financial adviser. In those cases the fee is well worth the cost. Also if your guy provides education in association with investment advice, the fee might also be worth it. If you are able to stomach losses, able to keep on contributing like clockwork, and can read a Morning star mutual fund chart, then you might be best to go it alone. One thing would really help is to have a friend that is also interested in investing to share ideas with.\"" }, { "docid": "391344", "title": "", "text": "Bitcoins have the potential to be an alternative to gold or USD, but not yet. Their value is too volatile, and there are still serious security concerns. I would strongly advise anyone against putting more than a small % of their worth in Bitcoins." }, { "docid": "140371", "title": "", "text": "To expand on the comment made by @NateEldredge, you're looking to take a short position. A short position essentially functions as follows: Here's the rub: you have unlimited loss potential. Maybe you borrow a share and sell it at $10. Maybe in a month you still haven't closed the position and now the share is trading at $1,000. The share lender comes calling for their share and you have to close the position at $1,000 for a loss of $990. Now what if it was $1,000,000 per share, etc. To avoid this unlimited loss risk, you can instead buy a put option contract. In this situation you buy a contract that will expire at some point in the future for the right to sell a share of stock for $x. You get to put that share on to someone else. If the underlying stock price were to instead rise above the put's exercise price, the put will expire worthless — but your loss is limited to the premium paid to acquire the put option contract. There are all sorts of advanced options trades sometimes including taking a short or long position in a security. It's generally not advisable to undertake these sorts of trades until you're very comfortable with the mechanics of the contracts. It's definitely not advisable to take an unhedged short position, either by borrowing someone else's share(s) to sell or selling an option (when you sell the option you take the risk), because of the unlimited loss potential described above." }, { "docid": "192652", "title": "", "text": "If you spent your whole life earning the same portfolio that amounts $20,000, the variance and volatility of watching your life savings drop to $10,000 overnight has a greater consequence than for someone who is young. This is why riskier portfolios aren't advised for older people closer to or within retirement age, the obvious complementary group being younger people who could lose more with lesser permanent consequence. Your high risk investment choices have nothing to do with your ability to manage other people's money, unless you fail to make a noteworthy investment return, then your high risk approach will be the death knell to your fund managing aspirations." }, { "docid": "556668", "title": "", "text": "\"I think the key to this question is your last sentence, because it's applicable to everyone, high net-worth or not: How would one determine whether they are better off without insurance? In general, insurance is a net good when the coverage would prevent a 'catastrophic' event. If a catastrophic event doesn't happen, oh well, you wasted money on insurance. If it does happen, you just saved yourself from bankruptcy. These are two separate outcomes, so taking the 'average' cost of a catastrophic event (and weighing that against the more expensive insurance premiums) is not practical. This is a way of reducing risk, not of maximizing returns. Let the insurance company take the risk - they benefit from having a pool of people paying premiums, and you benefit because your own life has less financial risk. Now for something like cheap home electronics, insurance is a bad idea. This is because you now have a 'pool' of potential risks, and your own life experience could be close to the 'average' expected result. Meaning you'll pay more for insurance than you would just replacing broken things. This answer is another good resource on the topic. So to your question, at what point in terms of net-worth does someone's house become equivalent to you and your toaster? Remember that if you have home fire insurance, you are protecting the value of your house, because that loss would be catastrophic to you. But a high net-worth individual would also likely find the loss of their house catastrophic. Unless they are billionaires with multiple 10M+ mansions, then it is quite likely that regardless of wealth, a significant portion of their worth is tied up in their home. Even 10% of your net worth would be a substantial amount. As an example, would someone worth $1M have only a 100k home? Would someone worth $10M have only a $1M Home? Depends on where they live, and how extravagantly. Similarly, if you were worth $10M, you might not need extra insurance on your Toyota Camry, but you might want it if you drive a $1M Ferrari! Not to mention that things like auto insurance may cover you for liability, which could extend beyond the value of your car, into medical and disability costs for anyone in an accident. In fact, being high net-worth may make you more vulnerable to lawsuits, making this insurance even more important. In addition, high net-worth individuals have insurance that you or I have no need of. Things like kidnapping insurance; business operation insurance, life insurance used to secure bank loans. So yes, even high net-worth individuals may fear catastrophic events, and if they have so much money - why wouldn't they pay to reduce that risk? Insurance provides a service to them the same as to everyone else, it's just that the items they consider too 'cheap' too insure are more expensive than a toaster. Edit to counter concerns in some other answers, which say that insurance is \"\"always a bad idea\"\": Imagine you are in a kafka-esque episode of \"\"Let's Make a Deal\"\". Monty Hall shows you two parallel universes, each with 100 doors. You must choose your universe, then choose a door. The first universe is where you bought insurance, and behind every door is a penalty of $200. The second universe is where you didn't buy insurance, and behind 99 doors is nothing, with one random door containing a penalty of $10,000. On average, playing the game 99,999 times, you will come out ahead 2:1 by not buying insurance. But you play the game only maybe 3 times in your life. So which universe do you choose? Now, you might say \"\"pfft - I can cover the cost of a 10k penalty if it happens\"\". But this is exactly the point - insurance (unless already required by law) is a net good when it covers catastrophic losses. If you are wealthy enough to cover a particular loss, you typically shouldn't buy that insurance. That's why no one should insure their toaster. This is not a question of \"\"average returns\"\", it is a question of \"\"risk reduction\"\".\"" }, { "docid": "144773", "title": "", "text": "That actually sheds some useful light on the whole matter. As long as $client gets the paperwork in order, all will likely be well. Had a discussion with $client today about their recurring practices, just to establish a baseline for their understanding of the same. Not because I know there is or is not a concern, but because their business is risk management and that is a risk worth managing. Or at least worth understanding the scope of the risk and potential exposure." }, { "docid": "239296", "title": "", "text": "\"The fundamental flaw here is conflating net worth with utility, at least failing to recognize that there's a nonlinear relationship between the two. In the extreme example imagine taking a bet that will either make you twice as rich or completely broke. Your expected return is zero, but it would be pretty dumb to take it since being flat broke could ruin your life while being twice as rich may only improve it marginally. In more realistic cases most of your income is tied up in fixed costs, which magnifies relatively small perturbations to your net worth. Losing something essential (like your house or car), even if it's only 20% of your net worth, renders you effectively broke until you scrape together enough cash to get another one. That situation robs you of much more utility than you'd gain from a 20% increase in net worth. In either case, avoiding the risk is completely rational as long as you believe in nonlinear utility as a function of net worth, it's not just an issue of humans being \"\"risk averse\"\".\"" }, { "docid": "306460", "title": "", "text": "No one can advise you on whether to hold this stock or sell it. Your carried losses can offset short or long term gains, but the long term losses have to be applied to offset long term gains before any remaining losses can offset short term gains. Your question doesn't indicate how long you have to hold before the short term gains become long term gains. Obviously the longer the holding period, the greater the risk. You also must avoid a wash sale (selling to lock in the gains/reset your basis then repurchasing within a month). All of those decisions hold risks that you have to weigh. If you see further upside in holding it longer, keep the investment. Don't sell just to try to maximize tax benefits." }, { "docid": "492506", "title": "", "text": "\"Taking examples from this loosely Googled page: http://www.fundlibrary.com/features/columns/page.asp?id=14406 If you find, or calculate, the standard deviation (volatility) of the returns from your various investment classes you will find they range from low-risk (low volatility), such as Cash, to high-risk (high volatility), such as Strategic Growth. The risk rating (volatility) is a good indicator of how reactive to market conditions your investment is likely to be. As you can see below, from mid-2010 to mid-2011 the High Risk index performed really well, but it was also most reactive when the market subsequently turned down. The medium risk indices performed the best over the chart period, 2010 to 2013, but it could have turned out different. Generally, you choose your investment according to your \"\"risk appetite\"\" - how much you're willing to risk. You might play safe with, say, 30% cash, 60% medium risk, 10% high risk. (Then again, are you paying someone to manage cash, which you might be able to do for free in a bank?) Assuming, for a moment, European (3.) and Intnl Equity Tracker (9.) had the same medium risk profile, then holding 50% & 50% would also add some currency diversification, which is usually advisable. However, the main choice is down to risk appetite. To address your specific question: \"\"my main interest for now is between Stockmarket Growth and Strategic Growth\"\", first thing to do is check their volatilities. For a further level of sophistication you can check how they are correlated against each other. If they are inversely correlated, i.e. one goes up when the other goes down, then holding some of each could be a good diversification. FYI: An Introduction to Investment Theory The historical returns are important too, but the investment classes your pension fund is offering will probably be reasonably aligned on a risk-return basis. You should check though. I.e. do they line up on a plot of 3 year Return vs Volatility? e.g. the line through SA Cash - SA Bonds - Vol Target 20 - SA Equity. Source\"" }, { "docid": "183898", "title": "", "text": "It is true that this is possible, however, it's very remote in the case of the large and reputable fund companies such as Vanguard. FDIC insurance protects against precisely this for bank accounts, but mutual funds and ETFs do not have an equivalent to FDIC insurance. One thing that does help you in the case of a mutual fund or ETF is that you indirectly (through the fund) own actual assets. In a cash account at a bank, you have a promise from the bank to pay, and then the bank can go off and use your money to make loans. You don't in any sense own the bank's loans. With a fund, the fund company cannot (legally) take your money out of the fund, except to pay the expense ratio. They have to use your money to buy stocks, bonds, or whatever the fund invests in. Those assets are then owned by the fund. Legally, a mutual fund is a special kind of company defined in the Investment Company Act of 1940, and is a separate company from the investment advisor (such as Vanguard): http://www.sec.gov/answers/mfinvco.htm Funds have their own boards, and in principle a fund board can even fire the company advising the fund, though this is not likely since boards aren't usually independent. (a quick google found this article for more, maybe someone can find a better one: http://www.marketwatch.com/story/mutual-fund-independent-board-rule-all-but-dead) If Vanguard goes under, the funds could continue to exist and get a new adviser, or could be liquidated with investors receiving whatever the assets are worth. Of course, all this legal stuff doesn't help you with outright fraud. If a fund's adviser says it bought the S&P 500, but really some guy bought himself a yacht, Madoff-style, then you have a problem. But a huge well-known ETF has auditors, tons of different employees, lots of brokerage and exchange traffic, etc. so to me at least it's tough to imagine a risk here. With a small fund company with just a few people - and there are lots of these! - then there's more risk, and you'd want to carefully look at what independent agent holds their assets, who their auditors are, and so forth. With regular mutual funds (not ETFs) there are more issues with diversifying across fund companies: With ETFs, there probably isn't much downside to diversifying since you could buy them all from one brokerage account. Maybe it even happens naturally if you pick the best ETFs you can find. Personally, I would just pick the best ETFs and not worry about advisor diversity. Update: maybe also deserving a mention are exchange-traded notes (ETNs). An ETN's legal structure is more like the bank account, minus the FDIC insurance of course. It's an IOU from the company that runs the ETN, where they promise to pay back the value of some index. There's no investment company as with a fund, and therefore you don't own a share of any actual assets. If the ETN's sponsor went bankrupt, you would indeed have a problem, much more so than if an ETF's sponsor went bankrupt." }, { "docid": "497642", "title": "", "text": "You should speak to a good tax adviser. The less documentation you have the more problems IRS are going to cause you. Generally you can deduct business losses (in the year they occurred, which is 2011), but you have to show that that was a valid business, not just a way to reduce your tax bill with personal expenses. Thus lack of documentation reduces your ability to prove that you're entitled to the deduction. The burden of proof is generally on you. You can not deduct it from 2012 taxes, but you can still amend 2011. Keep in mind though that amended returns have higher chance of audit, and a significant business loss on a business that only existed that year is a major red flag which will raise the probability of an audit to very high percentage. Theoretically, if the business was real and just failed - you can definitely deduct this. But practically, lack of documentation may cause too big a problem, and a tax adviser might suggest you giving it up if he doesn't think you have a real chance to convince the IRS. Definitely don't do that without a professional advice. It is worth fighting for, its quite a loss, but don't do it on your own as you will definitely lose." }, { "docid": "341625", "title": "", "text": "Frankly, the article is mostly right, but I disagree with his specific recommendation. Why use one of these software services at all? Put your money into a retirement (or other) account and invest it in index funds. Beating index funds over the long run is pretty difficult, and if anyone's going to do it, it won't be someone that treats it like a hobby, regardless of whether you pick stocks yourself or let some software do it for you. I personally think the big value-add from investment advisers only comes in the form of tax and regulation advice. Knowing what kind of tax-exempt accounts exist and what the rules for them are is useful, and often non-trivial to fully grasp and plan for. Also, the investment advisers I've talked to seemed to be pretty knowledgeable about that sort of thing, whereas their understanding of investment concepts like risk/reward tradeoffs, statistics, and portfolio optimization is generally weak." }, { "docid": "399882", "title": "", "text": "If you're doing a little paid work on the side I would think twice about setting up a limited company due to the expense and administrative overhead. A limited company has a couple of benefits (assets and liabilities of the company are separate from your personal assets and liabilities, which I see as a big bonus) but it's not worth it for a few hundred or even a couple of thousand a year. You can get a lot of the tax benefits simply by working as a sole trader (and you'd have to do a tax return every year) as you're still able to deduct any expenditure incurred in the process of your side business from the income and thus lower your taxes on it. You'd also want to make sure that you have a separate bank account for the side business so you don't mix it with your personal accounts (makes it easier to admin). Just keep in mind that this is for expenses wholly incurred in the process of doing business - try to claim on a PC that also doubles as a gaming rig might be an issue :). You're best off discussing this with an accountant who can talk you through the various alternatives and advise if it's worth the headache." }, { "docid": "555085", "title": "", "text": "Did I make the right choice? Only you can determine that. Financial security and stability are not worthless, but they do not have infinite value either. Any time you go out for a walk you're trading a small amount of financial independence for personal satisfaction, since you could be struck by a car and become disabled. That's a silly example, and you're risking much more financial security by changing jobs than by going for a walk, but it illustrates that sometimes risk is worth it. Would changing jobs be worth the risk that you could end up unemployed? Only you can determine that." }, { "docid": "345597", "title": "", "text": "I would not advise any stock-picking or other active management (even using mutual funds that are actively managed). There is a large body of knowledge that needs learning before you even attempt that. Stay passive with index funds (either ETFs or (even better) low-cost passive mutual funds (because these prevent you from buying/selling). But I have not problem saying you can invest 100% in equity as long as your stomach can handle the price swings. If you freek out after a 25% drop that does not recover within a year, so you sell at the market bottom, then you are better off staying with a lot less risk. It is personal. There are a lot of valid reasons for young people to accept more risk - and equally valid reason why not. See list at http://www.retailinvestor.org/saving.html#norisk" }, { "docid": "427300", "title": "", "text": "I think you may be confused on terminology here. Financial leverage is debt that you have taken on, in order to invest. It increases your returns, because it allows you to invest with more money than what you actually own. Example: If a $1,000 mutual fund investment returns $60 [6%], then you could also take on $1,000 of debt at 3% interest, and earn $120 from both mutual fund investments, paying $30 in interest, leaving you with a net $90 [9% of your initial $1,000]. However, if the mutual fund 'takes a nose dive', and loses money, you still need to pay the $30 interest. In this way, using financial leverage actually increases your risk. It may provide higher returns, but you have the risk of losing more than just your initial principle amount. In the example above, imagine if the mutual fund you owned collapsed, and was worth nothing. Now, you would have lost $1,000 from the money you invested in the first place, and you would also still owe $1,000 to the bank. The key take away is that 'no risk' and 'high returns' do not go together. Safe returns right now are hovering around 0% interest rates. If you ever feel you have concocted a mix of options that leaves you with no risk and high returns, check your math again. As an addendum, if instead what you plan on doing is investing, say, 90% of your money in safe(r) money-market type funds, and 10% in the stock market, then this is a good way to reduce your risk. However, it also reduces your returns, as only a small portion of your portfolio will realize the (typically higher) gains of the stock market. Once again, being safer with your investments leads to less return. That is not necessarily a bad thing; in fact investing some part of your portfolio in interest-earning low risk investments is often advised. 99% is basically the same as 100%, however, so you almost don't benefit at all by investing that 1% in the stock market." }, { "docid": "451926", "title": "", "text": "I don't intend to live in the UK again If you don't intend to live in the UK again, my advise would be to move this back to Germany in EUR in the near future. Generally taking Fx [Currency] risk is not advisable unless the portfolio is large. I don't need the money in the short term As you don't need the money immediately, you can afford to wait and watch a bit. Whether the rate will be more favourable or worse can't be predicated with certainty. So you can wait for few weeks / months and pick up a week when it is slightly favourable and convert them into EUR." }, { "docid": "335348", "title": "", "text": "When they made a counter offer they essentially rejected your offer, and you are no obligation to accept theirs. Nor are you obligated to your original offer. That is the risk a person takes when they make a counter offer. Their agent/representative should have advised them of this risk. Because time is of the essence in most of these transactions their delay with the extra round also made your original offer void. You were right to keep other properties in play." }, { "docid": "153010", "title": "", "text": "You're trying to mitigate the risk of having your investments wiped out by fraud committed by your broker by using margin loans to buy stock secured by other, non-cash assets in your account. The solution that you are proposing does not make any sense at all. You mitigate a very low probability/high impact risk by doing something that comes with a high probability/medium impact risk. In addition to interest costs, holding stocks on margin subjects you to the very real risk of being forced to sell assets at inopportune times to meet margin calls. Given the volatility that the markets are experiencing in 2011, there is a high risk that some irrational decision in Greece could wipe you out. If I were worried about this, I would: If you have enough money that SIPC protection limits are an issue, you desperately need a financial adviser. Do not implement any strategy involving margin loans until you talk to a qualified adviser." } ]

[ { "docid": "354234", "title": "", "text": "They've been around long enough now for there to be past performance figures you can google for. I think you'll find the results aren't very encouraging. I personally don't think there's a huge risk that the robots will lose all your money, but there's every reason to expect they aren't likely to perform better than traditional managers or beat the market. At the end of the day the robots are employing a lot of analysis and management techniques that traditional managers have been using, and since traditional managers use computers to do it efficiently there's not much gain IMO. Yes in theory labour is expensive so cutting it out is good, but in practise, in this case, the amount of money being managed is huge and the human cost is pretty insignificant. I personally don't believe that the reduced fees represent the cost of the human management, I think it's just marketing. There might be some risk that the robots can be 'gamed' but I doubt the potential is very great (your return might in theory be a fraction of a percent less over time because it's going on). The problem here is that the algorithms are functionally broadly known. No doubt every robo adviser has its own algorithms that in theory are the closely guarded secret, but in reality a broad swath of the functional behaviour will be understood by many people in the right circles, and that gives rise to predictability, and if you can predict investment/trading patterns you can make money from those patterns. That means humans making money (taking margin away) from the robots, or robots making money from other robots that are behind the curve. If robo advisers continue to take off I would expect them to under perform more and more." } ]

[ { "docid": "140371", "title": "", "text": "To expand on the comment made by @NateEldredge, you're looking to take a short position. A short position essentially functions as follows: Here's the rub: you have unlimited loss potential. Maybe you borrow a share and sell it at $10. Maybe in a month you still haven't closed the position and now the share is trading at $1,000. The share lender comes calling for their share and you have to close the position at $1,000 for a loss of $990. Now what if it was $1,000,000 per share, etc. To avoid this unlimited loss risk, you can instead buy a put option contract. In this situation you buy a contract that will expire at some point in the future for the right to sell a share of stock for $x. You get to put that share on to someone else. If the underlying stock price were to instead rise above the put's exercise price, the put will expire worthless — but your loss is limited to the premium paid to acquire the put option contract. There are all sorts of advanced options trades sometimes including taking a short or long position in a security. It's generally not advisable to undertake these sorts of trades until you're very comfortable with the mechanics of the contracts. It's definitely not advisable to take an unhedged short position, either by borrowing someone else's share(s) to sell or selling an option (when you sell the option you take the risk), because of the unlimited loss potential described above." }, { "docid": "283159", "title": "", "text": "First--and I'm only repeating what has been said already--roboadvisors are a great way to avoid paying high MERs and still not have to do much yourself. The Canadian Couch Potato method is great IF you are disciplined and spend the time every few months to regularly re-balance your portfolio. However, any savings you gain in low MERs is going to very likely be lost if you aren't re-balancing or if you aren't patient and disciplined in your investing. For that reason, the Couch Potato way isn't appropriate for 97% of the general population in my opinion. But if you are reading this, you probably already aren't a member of the general population. For myself, life seems always too busy and I've got a kid on the way. I see a huge value in using a robo-advisor (or alternatively Tangerine) and saving time in my day. The next question, which robo-advisor is best? I did a bunch of research here and my conclusion is that they are all fairly similar. My final three came down to Wealthbar/Wealthsimple/NestWeatlh. Price structures vary, but minus a few dollars here or there, there isn't a lot of difference in costs. What made WealthSimple stick out was that they provide some options for US citizens that help me prevent tax headaches. They also got back to me by email with really detailed answers when I had questions, which was really appreciated. Their site and monthly updates are minimalist and intuitive to navigate. Great user experience all around (I do web design myself). My gut feeling is that they have their act together and will stick around as a company for a long while." }, { "docid": "26172", "title": "", "text": "Financial advisers like to ask lots of questions and get nitty-gritty about investment objectives, but for the most part this is not well-founded in financial theory. Investment objectives really boils down to one big question and an addendum. The big question is how much risk you are willing to tolerate. This determines your expected return and most characteristics of your portfolio. The addendum is what assets you already have (background risk). Your portfolio should contain things that hedge that risk and not load up on it. If you expect to have a fixed income, some extra inflation protection is warranted. If you have a lot of real estate investing, your portfolio should avoid real estate. If you work for Google, you should avoid it in your portfolio or perhaps even short it. Given risk tolerance and background risk, financial theory suggests that there is a single best portfolio for you, which is diversified across all available assets in a market-cap-weighted fashion." }, { "docid": "142631", "title": "", "text": "As a general rule of thumb, age and resiliency of your profession (in terms of high and stable wages) in most cases imply that you have the ABILITY to accept higher than average level of risk by investing in stocks (rather than bonds) in search for capital appreciation (rather than income), simply because you have more time to offset any losses, should you have any, and make capital gains. Dividend yield is mostly sough after by people at or near retirement who need to have some cash inflows but cannot accept high risk of equity investments (hence low risk dividend stocks and greater allocation to bonds). Since you accept passive investment approach, you could consider investing in Target Date Funds (TDFs), which re-allocate assets (roughly, from higher- to lower-risk) gradually as the fund approaches it target, which for you could be your retirement age, or even beyond. Also, why are you so hesitant to consider taking professional advice from a financial adviser?" }, { "docid": "492506", "title": "", "text": "\"Taking examples from this loosely Googled page: http://www.fundlibrary.com/features/columns/page.asp?id=14406 If you find, or calculate, the standard deviation (volatility) of the returns from your various investment classes you will find they range from low-risk (low volatility), such as Cash, to high-risk (high volatility), such as Strategic Growth. The risk rating (volatility) is a good indicator of how reactive to market conditions your investment is likely to be. As you can see below, from mid-2010 to mid-2011 the High Risk index performed really well, but it was also most reactive when the market subsequently turned down. The medium risk indices performed the best over the chart period, 2010 to 2013, but it could have turned out different. Generally, you choose your investment according to your \"\"risk appetite\"\" - how much you're willing to risk. You might play safe with, say, 30% cash, 60% medium risk, 10% high risk. (Then again, are you paying someone to manage cash, which you might be able to do for free in a bank?) Assuming, for a moment, European (3.) and Intnl Equity Tracker (9.) had the same medium risk profile, then holding 50% & 50% would also add some currency diversification, which is usually advisable. However, the main choice is down to risk appetite. To address your specific question: \"\"my main interest for now is between Stockmarket Growth and Strategic Growth\"\", first thing to do is check their volatilities. For a further level of sophistication you can check how they are correlated against each other. If they are inversely correlated, i.e. one goes up when the other goes down, then holding some of each could be a good diversification. FYI: An Introduction to Investment Theory The historical returns are important too, but the investment classes your pension fund is offering will probably be reasonably aligned on a risk-return basis. You should check though. I.e. do they line up on a plot of 3 year Return vs Volatility? e.g. the line through SA Cash - SA Bonds - Vol Target 20 - SA Equity. Source\"" }, { "docid": "103584", "title": "", "text": "\"I think you might be asking the wrong question. You have plenty of capital on the side that can be invested. Instead of asking whether you should get an adviser, you might want to examine what your end goal is. Are you looking to build long term growth of you capital? Are you asking about and adviser because you don't want to handle your money, or is it simply because \"\"that's what people do?\"\" I would imagine that the answer to 1. is yes and that the answer to 2. is that you want to handle your money, and you always considered this something best left to the advisers. I shall proceed on these hypothetical assumptions. In my humble opinion, I would do the following: Skip the adviser and the fees that go with it. For a young professional like yourself, especially with an engineering background, you can certainly handle the education required to learn the mechanics of investing. Invest some time to learn the fundamentals of the market such as asset classes, basic terminology ect. You will benefit in several ways. For one, you will learn an invaluable skill and save tens of thousands in fees during your lifetime. Moreover, you will have complete control of your risk profile, allocation, and every penny that belongs to you. I really am not bashing advisers, but no one will care as much about your money as you will. And don't be fooled. The market is efficient. An adviser does not have any more edge in a market than anyone else. And from first hand experience, they rarely outperform benchmarks net of fees. I assume you have made it to this step because you want to manage your own money and financial future. Sounds scary, how should one proceed? Let's assume that $100,000 is \"\"in play\"\". And since you are learning the ropes, let's leave $50,000 in cash for now. This leaves $50,000 to start a portfolio. I'd start by building a core position of all the major asset classes in ETF form. This means buying things like SPY or TLT. If you're comfortable, you can start selling monthly calls against these positions to reduce basis and earn some income. The point is, your only limitation at this point is taking time to learn the ropes. The technology is there, the free education is there, and liquidity and product mix is there. Next thing you know you're learning how gamma scalping works, or maybe you're more of a Buffett type. This is how I view finance in general, and truly hope you break through the initial barrier to controling your own finances.\"" }, { "docid": "427300", "title": "", "text": "I think you may be confused on terminology here. Financial leverage is debt that you have taken on, in order to invest. It increases your returns, because it allows you to invest with more money than what you actually own. Example: If a $1,000 mutual fund investment returns $60 [6%], then you could also take on $1,000 of debt at 3% interest, and earn $120 from both mutual fund investments, paying $30 in interest, leaving you with a net $90 [9% of your initial $1,000]. However, if the mutual fund 'takes a nose dive', and loses money, you still need to pay the $30 interest. In this way, using financial leverage actually increases your risk. It may provide higher returns, but you have the risk of losing more than just your initial principle amount. In the example above, imagine if the mutual fund you owned collapsed, and was worth nothing. Now, you would have lost $1,000 from the money you invested in the first place, and you would also still owe $1,000 to the bank. The key take away is that 'no risk' and 'high returns' do not go together. Safe returns right now are hovering around 0% interest rates. If you ever feel you have concocted a mix of options that leaves you with no risk and high returns, check your math again. As an addendum, if instead what you plan on doing is investing, say, 90% of your money in safe(r) money-market type funds, and 10% in the stock market, then this is a good way to reduce your risk. However, it also reduces your returns, as only a small portion of your portfolio will realize the (typically higher) gains of the stock market. Once again, being safer with your investments leads to less return. That is not necessarily a bad thing; in fact investing some part of your portfolio in interest-earning low risk investments is often advised. 99% is basically the same as 100%, however, so you almost don't benefit at all by investing that 1% in the stock market." }, { "docid": "129364", "title": "", "text": "\"So my read on the question is \"\"How do I invest 300k such that it earns me a 'living wage' without the ongoing grind inherent in most formal employment?\"\" Reading the other answers to date it looks like most of them are thinking in terms of investment accounts and trying to live off of the earnings from such. I wanted to throw out a couple of alternative choices that may be worth considering... The first is real-estate investing. $300k should allow you to pick up 2 or 3 single family dwellings with little or no mortgage. Turning them into rentals placed with a good property management company should easily pay their expenses and provide a consistent income with minimal effort/attention from you. Similar story with buying into multifamily housing or commercial real-estate. Your key concern here is picking the right market in which to buy and finding a reputable manager to handle the day to day issues on your behalf. Note that you are not overly concerned with the potential resale value of the property(s), but the probable rental income they can generate, these are separate concerns that may not align with each other. Second is buying/founding a business that has a general manager other than yourself. Franchise ownership may be a potential option for you under the circumstances. The key concern here is picking the business, location, and manager that make you comfortable in terms of the risk involved. You need the place to make enough money to pay for itself and the salary of everyone working there, with enough left over for you to live on. Sounds easy enough, but not so much in practice. Generally you can expect at least a few years of being hands on and watching things very closely to make sure it is going the way you want it to. Finding a mentor who has done this type of transition before to walk you through it would be strongly advised. So would preparing yourself for a failure or two before you work out the exact combination of factors that work for you.\"" }, { "docid": "460008", "title": "", "text": "They might not have to open accounts at 12 bank because the coverage does allow multiple accounts at one institution if the accounts are joint accounts. It also treats retirement accounts a separate account. The bigger issue is that most millionaires don't have all their money siting in the bank. They invest in stocks, bonds, government bonds, international funds, and their own companies. Most of these carry risk, but they are diversified. They also can afford advisers to help them manage and protect their assets." }, { "docid": "63883", "title": "", "text": "It's six of one a half dozen of another. Investing the cash is a little more risky. You know exactly what you'll get by paying down your mortgage. If you have a solid emergency fund it's probably most advisable to pay down your mortgage. If your mortgage is 3% and your investment makes 3.5% you're talking about a taxable gain of 0.5% on the additional cash. Is that worth it to you? Sure, the S&P has been on a tear but remember, past results are not a guarantee of future performance." }, { "docid": "399882", "title": "", "text": "If you're doing a little paid work on the side I would think twice about setting up a limited company due to the expense and administrative overhead. A limited company has a couple of benefits (assets and liabilities of the company are separate from your personal assets and liabilities, which I see as a big bonus) but it's not worth it for a few hundred or even a couple of thousand a year. You can get a lot of the tax benefits simply by working as a sole trader (and you'd have to do a tax return every year) as you're still able to deduct any expenditure incurred in the process of your side business from the income and thus lower your taxes on it. You'd also want to make sure that you have a separate bank account for the side business so you don't mix it with your personal accounts (makes it easier to admin). Just keep in mind that this is for expenses wholly incurred in the process of doing business - try to claim on a PC that also doubles as a gaming rig might be an issue :). You're best off discussing this with an accountant who can talk you through the various alternatives and advise if it's worth the headache." }, { "docid": "61919", "title": "", "text": "\"Alternatively you could exercise 12000 shares for $36000 and immediately sell 7200 shares to recover your exercise price. Then you use the remaining 4800 share to pay the exercise price of the remaining 8000 options. Both scenarios are equivalent but may have different fees associated, so it's worth checking the fine print. Tax wise: The above example is \"\"cash neutral before taxes\"\". The taxes associated with these transaction are substantial, so it's highly recommended to talk with a tax adviser. \"\"cash neutral after taxes\"\" depends highly on your specific tax situation.\"" }, { "docid": "414697", "title": "", "text": "&gt; radio may find itself in dire straights as well. Although i agree for the time being it is better protected than TV. What are you talking about? Radio is mostly dead at this point. Most stations are owned by very few companies because most stations failed already. These big conglomerates bought them up and run mostly robo-DJs and syndicated content where there's no real local radio station, just a retransmitter that sends out programming created in a what is effectively a radio content factory. Radio has been in dire straits for the better part of decade and far worse off than TV." }, { "docid": "344511", "title": "", "text": "“Burt Malkiel is still the high priest of passive investing,” said Jakub Jurek, vice president for research at Wealthfront. “To be absolutely clear, we’re not stock pickers. There are decades of research on active investors, which show they underperform.” So ... not really straying, just promoting a somewhat more sophisticated model based on algos (robo-investors?)" }, { "docid": "35282", "title": "", "text": "\"As a person who has had several part time assistants in the past I will offer you a simple piece of advise that should apply regardless of what country the assistant is located. If you have an assistant, personal or business, virtual or otherwise, and you don't trust that person with this type of information, get a different assistant. An assistant is someone who is supposed to make your life easier by off loading work. Modifying your records before sending them every month sounds like you are creating more work for yourself not less. Either take the leap of faith to trust your assistant or go somewhere else. An assistant that you feel you have to edit crucial information from is less than useful. That being said, there is no fundamental reason to believe that an operation in the Philippines or anywhere else is any more or less trustworthy than an operation in your native country. However, what is at issue is the legal framework around your relationship and in particular your recourse if something goes wrong. If you and your virtual assistant are both located in the US you would have an easier time collecting damages should something go wrong. I suggest you evaluate your level of comfort for risk vs. cost. If you feel that the risk is too high to use an overseas service versus the savings, then find someone in the states to do this work. Depending on your needs and comfort you might want to seek out a CPA or other licensed/bonded professional. Yes the cost might be higher however you might find that it is worth it for your own piece of mind. As a side note you might even consider finding a local part-time assistant. This can often be more useful than a virtual assistant and may not cost as much as you think. If you can live without someone being bonded. (or are willing to pay for the bonding fee) yourself, depending on your market and needs you may be able to find an existing highly qualified EA or other person that wants some after hours work. If you are in a college town, finance, accounting or legal majors make great assistants. They will usually work a couple hours a week for \"\"beer money\"\", they have flexible schedules and are glad to have something pertinent to their degree to put on their resume when they graduate. Just be prepared to replace them every few years as they move on to real jobs.\"" }, { "docid": "372808", "title": "", "text": "You can perfectly well manage their wealth without transferring their money into your account first. Just make them open their own account on their name then ask them for credentials and then manage their money from within their own account. That way everyone will be taxed according to their wealth (which is probably advantageous but you probably have to help them with the paperwork) and it is clear at every time what belongs to whom and your relatives can at every time access their wealth. These are big advantages (for them). This keeps you at the role of an adviser (a very active one though) which should have almost zero legal ramifications for you unless you try to deceive your relatives. You may want to shift wealth between accounts to minimize tax burdens, but that comes at the risk that should the family relations get worse this might result in anger. You could open up a registered society, all members getting shares and voting rights, making you the CEO, but that should be a lot of paperwork and maybe only a good idea for large amounts of money. If you decide to transfer money between accounts of different persons this is like a gift. It might invoke a gift tax in your area. All in all, I strongly advise you to make them all open up their own accounts and then just operate the accounts and manage their wealth in their name. Sell it to them as the solution that retains them maximum ownership." }, { "docid": "19367", "title": "", "text": "With your experience, I think you'd agree that trading over a standardized, regulated exchange is much more practical with the amount of capital you plan to trade with. That said, I'd highly advise you to consider FX futures at CME, cause spot forex at the bucket shops will give you a ton of avoidable operational risks." }, { "docid": "359303", "title": "", "text": "The nature of this question (finding a financial adviser) can make it a conundrum. Those who have little financial experience are often in the greatest need of a financial adviser and at the same time are the least qualified to select one. I'm not putting you or anyone in particular in this category. And of course it's a sliding scale: In general the more capable you are of running your own finances the more prepared you are to answer this question. With that said, I would recommend backing up half a step. Consider advisers other than strictly fee-only advisers. Perhaps you have already considered this decision. But perhaps others reading this have not. My (Ameriprise) adviser charges a monthly (~$50) fee, but also gets percentage-based portions of certain investments. Based on a $150/hr rate that amounts to four hours per year. Does he spend four hours per year on my account? Well so far he does (~2 yrs). But that is determined primarily by how much interaction I choose to have with him. (I suppose I could spend more time asking him questions and less time on this forum. :P) I have never fully understood the gravitation towards fee-based advisers on principle. I guess the theory is they are not making biased decisions about your investments because they don't have as much of a stake in how well your investments to do. I don't necessarily see that as an advantage. It seems they would have less of an incentive to ensure the growth of your investments. Although if you're nearing retirement then growth isn't your biggest concern. Perhaps a fee-based adviser makes more sense in that scenario. Whatever pay structure your adviser uses, it would seem to make sense to consider a successful adviser with a good client base. This implies that the adviser knows what he/she is doing. (But it could also just be a sign that they are good at marketing themselves.) If your adviser has a good base of wealthy clients then choosing a strictly-fee based adviser would mitigate the risk of your adviser having less incentive to consider your portfolio vs that of more wealthy clients. To more directly answer your question I suggest asking several of your adviser candidates for advice on choosing an adviser. I suspect you will get some good advice as well as good insight on the integrity and honesty of the adviser." }, { "docid": "385932", "title": "", "text": "\"*(\"\"Fee-only\"\" meaning the only money they make is the fee your folks pay directly; no kickbacks from financial products they're selling.) The answer to this is: for God's sake, leave it alone! I commend you on wanting to help your family avoid more losses. You are right, that having most of one's retirement in one stock or sector is just silly. And again yes, if they're retired, they probably need some bonds. But here's the thing, if they follow your advise and it doesn't work out, it will be a SERIOUS strain on your relationship. Of course you'll still be a family and they'll still love you, but emotionally, you are the reason they lost the money, and that will an elephant in between you. This is especially the case since we're talking about a lot of money here (presumably), and retirement money to boot. You must understand the risk you're taking with your relationships. If you/they lose, at best it'll make things awkward, and you'll feel guilty about their impoverished retirement. At worst it can destroy your relationship with your folks. What about if you win? Won't you be feted and appreciated by your folks for saving them from themselves? Yes, for a short while. Then life moves on. Everything returns to normal. But here's the thing. You won't win. You can't. Because even if you're right here, and they win, that means both they and you will be eager for you to do it again. And at some point they'll take a hit based on your advise. Can I be blunt here? You didn't even know that you can't avoid capital gains taxes by reinvesting stock gains. You don't know enough, and worse, you're not experienced enough. I deduce you're either a college student, or a recent grad. Which means you don't have experience investing your own money. You don't know how the market moves, you just know the theory. You know who you are? You're me, 20 years ago. And thank God my grandparents ignored my advise. I was right about their utilities stocks back then, too. But I know from what I learned in the years afterwards, investing on my own account, that at some point I would have hurt them. And I would have had a very hard time living with that. So, tell your folks to go visit a fee-only financial adviser to create a retirement plan. Perhaps I'm reading into your post, but it seems like you're enthusiastic about investing; stocks, bonds, building wealth, etc. I love that. My advise -- go for it! Pull some money together, and open your own stock account. Do some trading! As much as people grouse about it, the market really is glorious. It's like playing Monopoly, but for keeps. I mean that in the best way possible. It's fun, you can build wealth doing it, and it provides a very useful social purpose. In the spirit of that, check out these ideas (just for you, not for your folks!), based on ideas in your post: Good luck.\"" } ]

[ { "docid": "414454", "title": "", "text": "\"If it's fully expensed, it has zero basis. Any sale is taxable, 100%. To the ordinary income / cap gain issue raised in comment - It's a cap gain, but I believe, as with real estate, special rates apply. This is where I am out of my area of expertise, and as they say - \"\"Consult a professional.\"\"\"" } ]

[ { "docid": "81886", "title": "", "text": "Here's how the CBO says the top 1% got their income in 2013 (latest data): Source|% from source :--------|---------: Cash Wages and Salaries|33.4% Business Income|23.2% Capital Gains|19.1% Capital Income|11.2% Corporate Tax Borne by Capital|7.3% Other Income|3.2% Employer's Share of Payroll Taxes|0.9% Employee's Contributions to Deferred Compensation Plans|0.7% Employer's Contributions to Health Insurance|0.5% And here are there definitions of the types of income: * Labor income—Cash wages and salaries, including those allocated by employees to 401(k) plans; employer-paid health insurance premiums; the employer’s share of Social Security, Medicare, and federal unemployment insurance payroll taxes; and the share of corporate income taxes borne by workers. * Business income—Net income from businesses and farms operated solely by their owners, partnership income, and income from S corporations. * Capital gains—Profits realized from the sale of assets. Increases in the value of assets that have not been realized through sales are not included in the Congressional Budget Office’s measure of market income. * Capital income (excluding capital gains)—Taxable and tax-exempt interest, dividends paid by corporations (but not dividends from S corporations, which are considered part of business income), positive rental income, and the share of corporate income taxes borne by owners of capital. * Other income—Income received in retirement for past services and other sources of income." }, { "docid": "415104", "title": "", "text": "He doesn't have to follow through on this, but he could tell this sister that he will stop making mortgage payments, which will result in foreclosure and sale at lower price than might be realized by a voluntary sale. Translation: the house will sold, sis. Do you want to maximize your share of the proceeds? And, as I said in a comment above: I hope that he is keeping careful records of mortgage an utility payments, as he might (should) be entitled to a refund from the proceeds of an eventual sale (possibly adjusted by the fair rent value of the time which he spent living there)" }, { "docid": "577554", "title": "", "text": "I'm a Finance major in Finland and here is how it would go here. As you loan money to the company, the company has no income, but gains an asset and a liability. When the company then uses the money to pay the bills it does have expenses that accumulate to the end of the accounting period where they have to be declared. These expenses are payed from the asset gained and has no effect to the liability. When the company then makes a profit it is taxable. How ever this taxable profit may be deducted from from a tax reserve accumulated over the last loss periods up to ten years. When the company then pays the loan back it is divided in principal and interest. The principal payment is a deduction in the company's liabilities and has no tax effect. The interest payment the again does have effect in taxes in the way of decreasing them. On your personal side giving loan has no effect. Getting the principal back has no effect. Getting interest for the loan is taxable income. When there are documents signifying the giving the loan and accounting it over the years, there should be no problem paying it back." }, { "docid": "126771", "title": "", "text": "\"Tax is often calculated per item. Especially in the days of the internet, some items are taxable and some aren't, depending on the item and your nexus. I would recommend calculating and storing tax with each item, to account for these subtle differences. EDIT: Not sure why this was downvoted, if you don't believe me, you can always check with Amazon: http://www.amazon.com/gp/help/customer/display.html/ref=hp_468512_calculated?nodeId=468512#calculated I think they know what they're talking about. FINAL UPDATE: Now, if someone goes to your site, and buys something from your business (in California) and the shipping address for the product is Nevada, then taxes do not have to be collected. If they have a billing address in California, and a shipping address in Nevada, and the goods are shipping to Nevada, you do not have to declare tax. If you have a mixture of tangible (computer, mouse, keyboard) and intangible assets (warranty) in a cart, and the shipping address is in California, you charge tax on the tangible assets, but NOT on the intangible assets. Yes, you can charge tax on the whole order. Yes for most businesses that's \"\"Good enough\"\", but I'm not trying to provide the \"\"good enough\"\" solution, I'm simply telling you how very large businesses run and operate. As I've mentioned, I've done several tax integrations using software called Sabrix (Google if you've not heard of it), and have done those integrations for companies like the BBC and Corbis (owned and operated by Bill Gates). Take it or leave it, but the correct way to charge taxes, especially given the complex tax laws of the US and internationally, is to charge per item. If you just need the \"\"good enough\"\" approach, feel free to calculate it by total. Some additional reading: http://en.wikipedia.org/wiki/Taxation_of_Digital_Goods Another possible federal limitation on Internet taxation is the United States Supreme Court case, Quill Corp. v. North Dakota, 504 U.S. 298 (1992),[6] which held that under the dormant commerce clause, goods purchased through mail order cannot be subject to a state’s sales tax unless the vendor has a substantial nexus with the state levying the tax. In 1997, the federal government decided to limit taxation of Internet activity for a period of time. The Internet Tax Freedom Act (ITFA) prohibits taxes on Internet access, which is defined as a service that allows users access to content, information, email or other services offered over the Internet and may include access to proprietary content, information, and other services as part of a package offered to customers. The Act has exceptions for taxes levied before the statute was written and for sales taxes on online purchases of physical goods.\"" }, { "docid": "345099", "title": "", "text": "\"Probably not. For your savings to enter an RRSP account, the recipient account must itself be an RRSP (duh! I hear you say). This appears to rule out any UK-based banks as they would not offer this type of account, which appears to be confirmed with a quick Google search returning no useful result for \"\"rrsp uk\"\". According to Income Tax Folio S3-F10-C1, Qualified Investments – RRSPs, RESPs, RRIFs, RDSPs and TFSAs, an RRSP may include listed securities traded on designated stock exchanges, including the London Stock Exchange. While this enables some possibilities, it is not clear that Canadian banks would offer much in the form of UK RRSPs. Your best bet may be to contact your bank and ask if they offer RRSP services for expats. Here is a list of Canadian banks in the UK. Obviously, this does not mean that they offer the type of service you are looking for (or even that they offer retail services, this may be just a trading office). Finally, if you need to move money from an RRSP to anything other than an RRSP this will trigger the inclusion of the sale proceeds as taxable income in that year.\"" }, { "docid": "314984", "title": "", "text": "There should be no problem getting a mortgage from a bank with 3 years in business. They are going to use the average of the last 2 years of taxable profits to determine your income though. I think the key words here are taxable profits and this is where the problem typically comes in for most self employed folks. Many times self employed people will have soft losses and deductions that make their income seem lower than it really is (or unreported income). It has nothing to do with your business plan, or your relationship with the bank unless it is a small community bank or credit union." }, { "docid": "257625", "title": "", "text": "\"This question and your other one indicate you're a bit unclear on how capital gains taxes work, so here's the deal: you buy an asset (like shares of stock or a mutual fund). You later sell it for more than you bought it for. You pay taxes on your profit: the difference between what you sold it for and what you bought it for. What matters is not the amount of money you \"\"withdraw\"\", but the prices at which assets are bought and sold. In fact, often you will be able to choose which individual shares you sell, which means you have some control over the tax you pay. For a simple example, suppose you buy 10 shares of stock for $100 each in January (an investment of $1000); we'll call these the \"\"early\"\" shares. The stock goes up to $200 in July, and you buy 10 more shares (investing an additional $2000); we'll call these the \"\"late\"\" shares. Then the stock drops to $150. Suppose you want $1500 in cash, so you are going to sell 10 shares. The 10 early shares you bought have increased in value, because you bought then for $100 but can now sell them for $150. The 10 late shares have decreased in value, because you bought them for $200 but can now only sell them for $150. If you choose to sell the early shares, you will have a capital gain of $500 ($1500 sale price minus $1000 purchase price), on which you may owe taxes. If you sell the late shares, you will have a capital loss of $500 ($1500 sale price minus $2000 purchase price is -$500), which you can potentially use to reduce your taxes. Or you could sell 5 of each and have no gain or loss (selling five early shares for $150 gives you a gain of $250, but selling five late shares for $150 gives you a loss of $250, and they cancel out). The point of all this is to say that the tax is not determined by the amount of cash you get, but by the difference between the sale price and the price you purchased for (known as the \"\"cost basis\"\"), and this in turn depends on which specific assets you sell. It is not enough to know the total amount you invested and the total gain. You need to know the specific cost basis (i.e., original purchase price) of the specific shares you're selling. (This is also the answer to your question about long-term versus short-term gains. It doesn't matter how much money you make on the sale. What matters is how long you hold the asset before selling it.) That said, many brokers will automatically sell your shares in a certain order unless you tell them otherwise (and some won't let you tell them otherwise). Often they will use the \"\"first in, first out\"\" rule, which means they will always sell the earliest-purchased shares first. To finally get to your specific question about Betterment, they have a page here that says they use a different method. Essentially, they try to sell your shares in a way that minimizes taxes. They do this by first selling shares that have a loss, and only then selling shares that have a gain. This basically means that if you want to cash out $X, and it is possible to do it in a way that incurs no tax liability, they will do that. What gets me very confused is if I continue to invest random amounts of money each month using Betterment, then I need to withdraw some cash, what are the tax implications. As my long answer above should indicate, there is no simple answer to this. The answer is \"\"it depends\"\". It depends on exactly when you bought the shares, exactly how much you paid for them, exactly when and how much the price rose or fell, and exactly how much you sell them for. Betterment is more or less saying \"\"Don't worry about any of this, trust us, we will handle everything so that your tax is minimized.\"\" A final note: if you really do want to track the details of your cost basis, Betterment may not be for you, because it is an automated platform that may do a lot of individual trades that a human wouldn't do, and that can make tracking the cost basis yourself very difficult. Almost the whole point of something like Betterment is that you are supposed to give them your money and forget about these details.\"" }, { "docid": "417866", "title": "", "text": "\"Payment gateways such as Square do not normally withhold tax. It is up to you to pay the appropriate tax at tax time. That having been said, Square does report your payments to the IRS on a form 1099-K if your payments are large enough. According to Square, you'll get a 1099-K from them if your total payments for the year add up to $20,000 AND more than 200 transactions. Whether or not they report on a 1099-K, you are required to pay the appropriate taxes on your income. So now the question becomes, \"\"Do I have to pay income tax on the proceeds from my garage sale?\"\" And the answer to that question is usually not. When you sell something that you previously purchased, if you sell it for more than you paid for it, you have a capital gain and need to pay tax on that. However, generally you sell things in a garage sale at a loss, meaning that there is no tax due. If you make more than $20,000 at your garage sale and the IRS gets a 1099-K, the IRS might be curious as to how you did that with no capital gain. So if you sell any big ticket items (a bulldozer, for example), you should keep a record of what you paid for it, so you can show the loss to the IRS in the event of an audit.\"" }, { "docid": "476859", "title": "", "text": "\"What drives the stock of bankrupt companies? Such stock is typically considered \"\"distressed assets\"\". Technically, what drives it is what drives every stock - supply and demand. A more interesting question is of course, why would there be demand? First, who exerts the buying pressure on the stock? Typically, three types of entities: The largest ones are financial institutions specializing in distressed assets (frequently, alternatives specialists - hedge funds, private equity firms etc...). Usually, they invest in distressed debt or distressed preferred equity; but sometimes distressed equity as well. Why? We will discuss their motivations separately in this answer. Second one are existing equity holders. Why? Short answer, behavioral psychology and behavioral economics. Many investors - especially non-professionals - insist on holding distressed stocks due to variety of investment fallacies (sunk cost etc...); usually constructing elaborate theories of why and how the company and the stock will recover Sometimes, people who buy into penny stock scams, pump and dump schemes etc... Why? \"\"There's a sucker born every minute.\"\" - P.T. Barnum Let's find out why an investment professional would invest in distressed equity? First, the general process is always the same. Company's assets are used to pay off its liabilities; in accordance with applicable law. There are two ways this can be done - either through selling the company; OR through bankruptcy process. The liabilities are paid according to seniority. The seniority priorities rules are covered by 11 U.S. Code § 507 - Priorities A company in bankruptcy can have one of 2 outcomes: Buyout. Some buyer might decide that the company's assets are worth something to them as a whole; and buy the whole enterprise; rather than risk it being destroyed piecemeal in bankruptcy proceedings. In that case, the proceeds from the sale will be used to fund the liabilities as discussed above. This option is one of the possible reasons people might consider investing in distressed equity. For example, if the company is in bankruptcy because it can't get enough financing right now, but is likely to have good profits in the future. The chances are, some buyer will buy it for a premium that includes those future profits; and that sale amount might possibly exceed the liabilities. Bankruptcy. The assets are sold and liabilities are covered according to priorities. In that case, the investors in distressed equity might be hoping that there are un-obvious assets whose value would also put the total assets above claimed liabilities. Additional possible beneficial factor is that unsecured debtors must file with the court in order to be paid; and the claim must be validated. Some might fail on either count; so total amount of liabilities might lessen once the bankruptcy process goes through. Assets Now, here's where things get interesting. Of course, companies have usual assets. Real estate, inventory, plants, cash, etc... These are all able to be sold to cover liabilities, and at first glance are possibly not enough to cover liabilities, leaving equity holders with nothing (and even that's not a certainty - bankruptcy is simply inability to service debt payments; and while it correlates to assetsliquid assets, not full asset valuation). But some assets are less sure, and are thus rarely included in such calculations. These may include: Chances of winning appeals if specific existing liabilities are results of litigation, e.g. tax appeals, court judgement appeals etc... Clawbacks and lawsuits against former executives, especially in cases where the company's financial distress resulted from executive malfeasance. I was personally involved in one such case as an equity holder, where the company assets were valued at $X; had liabilities of $X*2; but had a real possibility of winning about $X*3 in a lawsuit against former CEO accused of various malfeasance including fraud and insider trading. As such, the best case scenario was literally 100% profit on holding that distressed equity.\"" }, { "docid": "201361", "title": "", "text": "\"I assume that mutual funds are being discussed here. As Bryce says, open-ended funds are bought from the mutual fund company and redeemed from the fund company. Except in very rare circumstances, they exist only as bits in the fund company's computers and not as share certificates (whether paper or electronic) that can be delivered from the selling broker to the buying broker on a stock exchange. Effectively, the fund company is the sole market maker: if you want to buy, ask the fund company at what price it will sell them to you (and it will tell you the answer only after 4 pm that day when a sale at that price is no longer possible unless you committed to buy, say, 100 shares and authorized the fund company to withdraw the correct amount from your bank account or other liquid asset after the price was known). Ditto if you want to sell: the mutual fund company will tell you what price it will give you only after 4 pm that day and you cannot sell at that price unless you had committed to accept whatever the company was going to give you for your shares (or had said \"\"Send me $1000 and sell as many shares of mine as are needed to give me proceeds of $1000 cash.\"\")\"" }, { "docid": "552255", "title": "", "text": "The loss for B can be used to write off the gain for A. You will fill out a schedule 3 with cost base and proceeds of disposition. This will give you a $0 capital gain for the year and an amount of $5 (50% of the $10 loss) you can carry forward to offset future capital gains. You can also file a T1-a and carry the losses back up to 3 years if you're so inclined. It can't be used to offset other income (unless you die). Your C and D trades can't be on income account except for very unusual circumstances. It's not generally acceptable to the CRA for you to use 2 separate accounting methods. There are some intricacies but you should probably just use capital gains. There is one caveat that if you do short sales of Canadian listed securities, they will be on income account unless you fill out form T-123 and elect to have them all treated as capital gains. I just remembered one wrinkle in carrying forward capital losses. They don't reduce your capital gains anymore, but they reduce your taxable income. This means your net income won't be reduced and any benefits that are calculated from that (line 236), will not get an increase." }, { "docid": "108770", "title": "", "text": "\"A bit strange but okay. The way I would think about this is again that you need to determine for what purpose you're computing this, in much the same way you would if you were to build out the model. The IPO valuation is not going to be relevant to the accretion/dilution analysis unless you're trying to determine whether the transaction was net accretive at exit. But that's a weird analysis to do. For longer holding periods like that you're more likely to look at IRR, not EPS. EPS is something investors look at over the short to medium term to get a sense of whether the company is making good acquisition decisions. And to do that short-to-medium term analysis, they look at earnings. Damodaran would say this is a shitty way of looking at things and that you should probably be looking at some measure of ROIC instead, and I tend to agree, but I don't get paid to think like an investor, I get paid to sell shit to them (if only in indirect fashion). The short answer to your question is that no, you should not incorporate what you are calling liquidation value when determining accretion/dilution, but only because the market typically computes accretion/dilution on a 3-year basis tops. I've never put together a book or seen a press release in my admittedly short time in finance that says \"\"the transaction is estimated to be X% accretive within 4 years\"\" - that just seems like an absurd timeline. Final point is just that from an accounting perspective, a gain on a sale of an asset is not going to get booked in either EBITDA or OCF, so just mechanically there's no way for the IPO value to flow into your accretion/dilution analysis there, even if you are looking at EBITDA/shares. You could figure the gain on sale into some kind of adjusted EBITDA/shares version of EPS, but this is neither something I've ever seen nor something that really makes sense in the context of using EPS as a standardized metric across the market. Typically we take OUT non-recurring shit in EPS, we don't add it in. Adding something like this in would be much more appropriate to measuring the success of an acquisition/investing vehicle like a private equity fund, not a standalone operating company that reports operational earnings in addition to cash flow from investing. And as I suggest above, that's an analysis for which the IRR metric is more ideally situated. And just a semantic thing - we typically wouldn't call the exit value a \"\"liquidation value\"\". That term is usually reserved for dissolution of a corporate entity and selling off its physical or intangible assets in piecemeal fashion (i.e. not accounting for operational synergies across the business). IPO value is actually just going to be a measure of market value of equity.\"" }, { "docid": "23537", "title": "", "text": "\"Your contributions must come from \"\"compensation\"\". Quoting IRS Publication 590 on IRAs, \"\"Generally, compensation is what you earn from working.\"\" So it is unlikely that your stock sale proceeds, if they're your sole source of income, can be used to fund your IRA. If you do have W-2 income, or self employment income, you can use the proceeds of a stock sale to fund an IRA. The IRS doesn't care where the exact dollars that go into the IRA come from, only that you earned (from working) at least as much as you contributed.\"" }, { "docid": "119819", "title": "", "text": "\"You seem to be assuming that ETFs must all work like the more traditional closed-end funds, where the market price per share tends—based on supply and demand—to significantly deviate from the underlying net asset value per share. The assumption is simplistic. What are traditionally referred to as closed-end funds (CEFs), where unit creation and redemption are very tightly controlled, have been around for a long time, and yes, they do often trade at a premium or discount to NAV because the quantity is inflexible. Yet, what is generally meant when the label \"\"ETF\"\" is used (despite CEFs also being both \"\"exchange-traded\"\" and \"\"funds\"\") are those securities which are not just exchange-traded, and funds, but also typically have two specific characteristics: (a) that they are based on some published index, and (b) that a mechanism exists for shares to be created or redeemed by large market participants. These characteristics facilitate efficient pricing through arbitrage. Essentially, when large market participants notice the price of an ETF diverging from the value of the shares held by the fund, new units of the ETF can get created or redeemed in bulk. The divergence quickly narrows as these participants buy or sell ETF units to capture the difference. So, the persistent premium (sometimes dear) or discount (sometimes deep) one can easily witness in the CEF universe tend not to occur with the typical ETF. Much of the time, prices for ETFs will tend to be very close to their net asset value. However, it isn't always the case, so proceed with some caution anyway. Both CEF and ETF providers generally publish information about their funds online. You will want to find out what is the underlying Net Asset Value (NAV) per share, and then you can determine if the market price trades at a premium or a discount to NAV. Assuming little difference in an ETF's price vs. its NAV, the more interesting question to ask about an ETF then becomes whether the NAV itself is a bargain, or not. That means you'll need to be more concerned with what stocks are in the index the fund tracks, and whether those stocks are a bargain, or not, at their current prices. i.e. The ETF is a basket, so look at each thing in the basket. Of course, most people buy ETFs because they don't want to do this kind of analysis and are happy with market average returns. Even so, sector-based ETFs are often used by traders to buy (or sell) entire sectors that may be undervalued (or overvalued).\"" }, { "docid": "321637", "title": "", "text": "\"If you need less than $125k for the downpayment, I recommend you convert your mutual fund shares to their ETF counterparts tax-free: Can I convert conventional Vanguard mutual fund shares to Vanguard ETFs? Shareholders of Vanguard stock index funds that offer Vanguard ETFs may convert their conventional shares to Vanguard ETFs of the same fund. This conversion is generally tax-free, although some brokerage firms may be unable to convert fractional shares, which could result in a modest taxable gain. (Four of our bond ETFs—Total Bond Market, Short-Term Bond, Intermediate-Term Bond, and Long-Term Bond—do not allow the conversion of bond index fund shares to bond ETF shares of the same fund; the other eight Vanguard bond ETFs allow conversions.) There is no fee for Vanguard Brokerage clients to convert conventional shares to Vanguard ETFs of the same fund. Other brokerage providers may charge a fee for this service. For more information, contact your brokerage firm, or call 866-499-8473. Once you convert from conventional shares to Vanguard ETFs, you cannot convert back to conventional shares. Also, conventional shares held through a 401(k) account cannot be converted to Vanguard ETFs. https://personal.vanguard.com/us/content/Funds/FundsVIPERWhatAreVIPERSharesJSP.jsp Withdraw the money you need as a margin loan, buy the house, get a second mortgage of $125k, take the proceeds from the second mortgage and pay back the margin loan. Even if you have short term credit funds, it'd still be wiser to lever up the house completely as long as you're not overpaying or in a bubble area, considering your ample personal investments and the combined rate of return of the house and the funds exceeding the mortgage interest rate. Also, mortgage interest is tax deductible while margin interest isn't, pushing the net return even higher. $125k Generally, I recommend this figure to you because the biggest S&P collapse since the recession took off about 50% from the top. If you borrow $125k on margin, and the total value of the funds drop 50%, you shouldn't suffer margin calls. I assumed that you were more or less invested in the S&P on average (as most modern \"\"asset allocations\"\" basically recommend a back-door S&P as a mix of credit assets, managed futures, and small caps average the S&P). Second mortgage Yes, you will have two loans that you're paying interest on. You've traded having less invested in securities & a capital gains tax bill for more liabilities, interest payments, interest deductions, more invested in securities, a higher combined rate of return. If you have $500k set aside in securities and want $500k in real estate, this is more than safe for you as you will most likely have a combined rate of return of ~5% on $500k with interest on $500k at ~3.5%. If you're in small cap value, you'll probably be grossing ~15% on $500k. You definitely need to secure your labor income with supplementary insurance. Start a new question if you need a model for that. Secure real estate with securities A local bank would be more likely to do this than a major one, but if you secure the house with the investment account with special provisions like giving them copies of your monthly statements, etc, you might even get a lower rate on your mortgage considering how over-secured the loan would be. You might even be able to wrap it up without a down payment in one loan if it's still legal. Mortgage regulations have changed a lot since the housing crash.\"" }, { "docid": "181608", "title": "", "text": "I can't quite follow your question, so I'm proceeding under the following assumptions: - You paid £31,000 - Your partner paid £4,242 - You have at least one mortgage, which you both pay equally. If the relationship terminates, sell the property. You are reimbursed £31,000 and your partner is reimbursed £4,242. Any remaining proceeds from the sale are split 50-50. If the result is a net loss (i.e. you are underwater on your mortgage), you split the debt 50-50. If you are not both paying the same toward the mortgage, I'd split the profit or loss according to how much you each pay toward the mortgage. Of course, this is not the only possible way you can split things up. You can use pretty much any way you both think is fair. For example, maybe you should get more benefits from a profit because you contributed more up-front. The key thing, though, is that you must both agree in writing, in advance. This is reasonable; this is what I did, for example. Note that if the relationship ends, one or the other of you may wish to keep the property. I'd suggest including a clause in your written agreement simply disallowing this; specify criteria to force a sale. But I know lots of people are happy to allow this. They treat that situation as a forced sale from both people to one person. For example, if your partner chooses to stay in the house, he or she must buy the property from you at prevailing market rates." }, { "docid": "537153", "title": "", "text": "You will be charged a stock borrow fee, which is inversely related to the relative supply of the stock you are shorting. IB claims to pay a rebate on the short proceeds, which would offset part or all of that fee, but it doesn't appear relevant in your case because: It is a bit strange to me that IB would not require you to keep the cash in your account, as they need the cash to collateralize the stock borrow with the lending institution. In fact, per Regulation​ T, the short position requires an initial margin of 150%, which includes the short proceeds. As described by Investopedia: In the first table of Figure 1, a short sale is initiated for 1,000 shares at a price of $50. The proceeds of the short sale are $50,000, and this amount is deposited into the short sale margin account. Along with the proceeds of the sale, an additional 50% margin amount of $25,000 must be deposited in the account, bringing the total margin requirement to $75,000. At this time, the proceeds of the short sale must remain in the account; they cannot be removed or used to purchase other securities. Here is a good answer to your question from The Street: Even though you might see a balance in your brokerage account after shorting a stock, you're actually looking at a false credit, according to one big brokerage firm. That money is acting as collateral for the short position. So, you won't have use of these funds for investment purposes and won't earn interest on it. And there are indeed costs associated with shorting a stock. The broker has to find stock to loan to you. That might come out of a broker's own inventory or might be borrowed from another stock lender." }, { "docid": "434257", "title": "", "text": "\"Accounting for this properly is not a trivial matter, and you would be wise to pay a little extra to talk with a lawyer and/or CPA to ensure the precise wording. How best to structure such an arrangement will depend upon your particular jurisdiction, as this is not a federal matter - you need someone licensed to advise in your particular state at least. The law of real estate co-ownership (as defined on a deed) is not sufficient for the task you are asking of it - you need something more sophisticated. Family Partnership (we'll call it FP) is created (LLC, LLP, whatever). We'll say April + A-Husband gets 50%, and Sister gets 50% equity (how you should handle ownership with your husband is outside the scope of this answer, but you should probably talk it over with a lawyer and this will depend on your state!). A loan is taken out to buy the property, in this case with all partners personally guaranteeing the loan equally, but the loan is really being taken out by FP. The mortgage should probably show 100% ownership by FP, not by any of you individually - you will only be guaranteeing the loan, and your ownership is purely through the partnership. You and your husband put $20,000 into the partnership. The FP now lists a $20,000 liability to you, and a $20,000 asset in cash. FP buys the $320,000 house (increase assets) with a $300,000 mortgage (liability) and $20,000 cash (decrease assets). Equity in the partnership is $0 right now. The ownership at present is clear. You own 50% of $0, and your sister owns 50% of $0. Where'd your money go?! Simple - it's a liability of the partnership, so you and your husband are together owed $20,000 by the partnership before any equity exists. Everything balances nicely at this point. Note that you should account for paying closing costs the same as you considered the down payment - that money should be paid back to you before any is doled out as investment profit! Now, how do you handle mortgage payments? This actually isn't as hard as it sounds, thanks to the nature of a partnership and proper business accounting. With a good foundation the rest of the building proceeds quite cleanly. On month 1 your sister pays $1400 into the partnership, while you pay $645 into the partnership. FP will record an increase in assets (cash) of $1800, an increase in liability to your sister of $1400, and an increase in liability to you of $645. FP will then record a decrease in cash assets of $1800 to pay the mortgage, with a matching increase in cost account for the mortgage. No net change in equity, but your individual contributions are still preserved. Let's say that now after only 1 month you decide to sell the property - someone makes an offer you just can't refuse of $350,000 dollars (we'll pretend all the closing costs disappeared in buying and selling, but it should be clear how to account for those as I mention earlier). Now what happens? FP gets an increase in cash assets of $350,000, decreases the house asset ($320,000 - original purchase price), and pays off the mortgage - for simplicity let's pretend it's still $300,000 somehow. Now there's $50,000 in cash left in the partnership - who's money is it? By accounting for the house this way, the answer is easily determined. First all investments are paid back - so you get back $20,000 for the down payment, $645 for your mortgage payments so far, and your sister gets back $1400 for her mortgage payment. There is now $27,995 left, and by being equal partners you get to split it - 13,977 to you and your husband and the same amount to your sister (I'm keeping the extra dollar for my advice to talk to a lawyer/CPA). What About Getting To Live There? The fact is that your sister is getting a little something extra out of the deal - she get's the live there! How do you account for that? Well, you might just be calling it a gift. The problem is you aren't in any way, shape, or form putting that in writing, assigning it a value, nothing. Also, what do you do if you want to sell/cash out or at least get rid of the mortgage, as it will be showing up as a debt on your credit report and will effect your ability to secure financing of your own in the future if you decide to buy a house for your husband and yourself? Now this is the kind of stuff where families get in trouble. You are mixing personal lives and business arrangements, and some things are not written down (like the right to occupy the property) and this can really get messy. Would evicting your sister to sell the house before you all go bankrupt on a bad deal make future family gatherings tense? I'm betting it might. There should be a carefully worded lease probably from the partnership to your sister. That would help protect you from extra court costs in trying to determine who has the rights to occupy the property, especially if it's also written up as part of the partnership agreement...but now you are building the potential for eviction proceedings against your sister right into an investment deal? Ugh, what a potential nightmare! And done right, there should probably be some dollar value assigned to the right to live there and use the property. Unless you just want to really gift that to your sister, but this can be a kind of invisible and poorly quantified gift - and those don't usually work very well psychologically. And it also means she's going to be getting an awfully larger benefit from this \"\"investment\"\" than you and your husband - do you think that might cause animosity over dozens and dozens of writing out the check to pay for the property while not realizing any direct benefit while you pay to keep up your own living circumstances too? In short, you need a legal structure that can properly account for the fact that you are starting out in-equal contributors to your scheme, and ongoing contributions will be different over time too. What if she falls on hard times and you make a few of the mortgage payments? What if she wants to redo the bathroom and insists on paying for the whole thing herself or with her own loan, etc? With a properly documented partnership - or equivalent such business entity - these questions are easily resolved. They can be equitably handled by a court in event of family squabble, divorce, death, bankruptcy, emergency liquidation, early sale, refinance - you name it. No percentage of simple co-ownership recorded on a deed can do any of this for you. No math can provide you the proper protection that a properly organized business entity can. I would thus strongly advise you, your husband, and your sister to spend the comparatively tiny amount of extra money to get advice from a real estate/investment lawyer/CPA to get you set up right. Keep all receipts and you can pay a book keeper or the accountant to do end of the year taxes, and answer questions that will come up like how to properly account for things like depreciation on taxes. Your intuition that you should make sure things are formally written up in times when everyone is on good terms is extremely wise, so please follow it up with in-person paid consultation from an expert. And no matter what, this deal as presently structured has a really large built-in potential for heartache as you have three partners AND one of the partners is also renting the property partially from themselves while putting no money down? This has a great potential to be a train wreck, so please do look into what would happen if these went wrong into some more detail and write up in advance - in a legally binding way - what all parties rights and responsibilities are.\"" }, { "docid": "478408", "title": "", "text": "\"My employer decided to pay my salary in India after I submit a form W-8BEN. This means that the wages / salary is deemed accrued for work from India. Hence your employer need not withhold and pay taxes on this wage in US. Is this payment taxable in the States since I am staying outside of States? Should I declare this income to IRS in case if I go back to the States later this year? No tax is due as the work is done outside on US. If you go back this would be similar to as you had gone first. Depending on your \"\"tax residency status\"\" you would have to declare all assets. If my US employer wires my US salary to my NRE account is that taxable in India? This is still taxable in India. It is advised that you have the funds transferred into a regular savings account. Please note you have to pay taxes in advance as per prescribed due dates in Sept, Dec, March. how does the Indian tax man identify if it is a taxable income and not just the regular remittance. This question is off topic here. Whether income taxes finds out about this is irrelevant. By law one is required to pay taxes on income earned in India.\"" } ]

[ { "docid": "31863", "title": "", "text": "Profit = Sale price - Basis Basis = Purchase price - any depreciation taken, including expensing it." } ]

[ { "docid": "110856", "title": "", "text": "No, they do not. Stock funds and bonds funds collect income dividends in different ways. Stock funds collect dividends (as well as any capital gains that are realized) from the underlying stocks and incorporates these into the funds’ net asset value, or daily share price. That’s why a stock fund’s share price drops when the fund makes a distribution – the distribution comes out of the fund’s total net assets. With bond funds, the internal accounting is different: Dividends accrue daily, and are then paid out to shareholders every month or quarter. Bond funds collect the income from the underlying bonds and keep it in a separate internal “bucket.” A bond fund calculates a daily accrual rate for the shares outstanding, and shareholders only earn income for the days they actually hold the fund. For example, if you buy a bond fund two days before the fund’s month-end distribution, you would only receive two days’ worth of income that month. On the other hand, if you sell a fund part-way through the month, you will still receive a partial distribution at the end of the month, pro-rated for the days you actually held the fund. Source Also via bogleheads: Most Vanguard bond funds accrue interest to the share holders daily. Here is a typical statement from a prospectus: Each Fund distributes to shareholders virtually all of its net income (interest less expenses) as well as any net capital gains realized from the sale of its holdings. The Fund’s income dividends accrue daily and are distributed monthly. The term accrue used in this sense means that the income dividends are credited to your account each day, just like interest in a savings account that accrues daily. Since the money set aside for your dividends is both an asset of the fund and a liability, it does not affect the calculated net asset value. When the fund distributes the income dividends at the end of the month, the net asset value does not change as both the assets and liabilities decrease by exactly the same amount. [Note that if you sell all of your bond fund shares in the middle of the month, you will receive as proceeds the value of your shares (calculated as number of shares times net asset value) plus a separate distribution of the accrued income dividends.]" }, { "docid": "415104", "title": "", "text": "He doesn't have to follow through on this, but he could tell this sister that he will stop making mortgage payments, which will result in foreclosure and sale at lower price than might be realized by a voluntary sale. Translation: the house will sold, sis. Do you want to maximize your share of the proceeds? And, as I said in a comment above: I hope that he is keeping careful records of mortgage an utility payments, as he might (should) be entitled to a refund from the proceeds of an eventual sale (possibly adjusted by the fair rent value of the time which he spent living there)" }, { "docid": "108770", "title": "", "text": "\"A bit strange but okay. The way I would think about this is again that you need to determine for what purpose you're computing this, in much the same way you would if you were to build out the model. The IPO valuation is not going to be relevant to the accretion/dilution analysis unless you're trying to determine whether the transaction was net accretive at exit. But that's a weird analysis to do. For longer holding periods like that you're more likely to look at IRR, not EPS. EPS is something investors look at over the short to medium term to get a sense of whether the company is making good acquisition decisions. And to do that short-to-medium term analysis, they look at earnings. Damodaran would say this is a shitty way of looking at things and that you should probably be looking at some measure of ROIC instead, and I tend to agree, but I don't get paid to think like an investor, I get paid to sell shit to them (if only in indirect fashion). The short answer to your question is that no, you should not incorporate what you are calling liquidation value when determining accretion/dilution, but only because the market typically computes accretion/dilution on a 3-year basis tops. I've never put together a book or seen a press release in my admittedly short time in finance that says \"\"the transaction is estimated to be X% accretive within 4 years\"\" - that just seems like an absurd timeline. Final point is just that from an accounting perspective, a gain on a sale of an asset is not going to get booked in either EBITDA or OCF, so just mechanically there's no way for the IPO value to flow into your accretion/dilution analysis there, even if you are looking at EBITDA/shares. You could figure the gain on sale into some kind of adjusted EBITDA/shares version of EPS, but this is neither something I've ever seen nor something that really makes sense in the context of using EPS as a standardized metric across the market. Typically we take OUT non-recurring shit in EPS, we don't add it in. Adding something like this in would be much more appropriate to measuring the success of an acquisition/investing vehicle like a private equity fund, not a standalone operating company that reports operational earnings in addition to cash flow from investing. And as I suggest above, that's an analysis for which the IRR metric is more ideally situated. And just a semantic thing - we typically wouldn't call the exit value a \"\"liquidation value\"\". That term is usually reserved for dissolution of a corporate entity and selling off its physical or intangible assets in piecemeal fashion (i.e. not accounting for operational synergies across the business). IPO value is actually just going to be a measure of market value of equity.\"" }, { "docid": "61623", "title": "", "text": "You need to determine for the taxing jurisdiction when the next tax appraisal will be done. In some cases the appraisal is done every year, or two, or three. In other cases it is also done when the property is sold. The county tax office website should contain this information. They will also have information on how to appeal. Most jurisdictions do have a way of looking up not only the rates but the value of the property in question. You will also be interested in determining if the tax value of the property is lower due to local/state laws that limit the growth in value from one assessment to another. A sale of the property could trigger a catchup for the value. It is possible that the degraded value of the home has already been factored into the assessment. It is also possible that it hasn't. Keep in mind that taxes in some jurisdictions can be more complicated because there is also a town/city/county component, and some places that also breakout other items on the tax bill like storm water management, schools, pest spraying. These other items can be based on value, square footage of the lot, or a flat amount. You should get a local opinion on the likelihood of a successful appeal, and how much adjustment you would be able to get. Depending on the sale date and the due date for the taxes, you may be forced to pay the higher tax rate for a while until either the next re-appraisal or the next appeal window. Note: the fact that it is being auctioned may mean that what you pay for the house may be immaterial because the tax authorities could determine that the motivation to sell quickly could have depressed the value. This type of sale will not impact the value of other houses and can't be used as a basis for determining the value of other properties." }, { "docid": "434257", "title": "", "text": "\"Accounting for this properly is not a trivial matter, and you would be wise to pay a little extra to talk with a lawyer and/or CPA to ensure the precise wording. How best to structure such an arrangement will depend upon your particular jurisdiction, as this is not a federal matter - you need someone licensed to advise in your particular state at least. The law of real estate co-ownership (as defined on a deed) is not sufficient for the task you are asking of it - you need something more sophisticated. Family Partnership (we'll call it FP) is created (LLC, LLP, whatever). We'll say April + A-Husband gets 50%, and Sister gets 50% equity (how you should handle ownership with your husband is outside the scope of this answer, but you should probably talk it over with a lawyer and this will depend on your state!). A loan is taken out to buy the property, in this case with all partners personally guaranteeing the loan equally, but the loan is really being taken out by FP. The mortgage should probably show 100% ownership by FP, not by any of you individually - you will only be guaranteeing the loan, and your ownership is purely through the partnership. You and your husband put $20,000 into the partnership. The FP now lists a $20,000 liability to you, and a $20,000 asset in cash. FP buys the $320,000 house (increase assets) with a $300,000 mortgage (liability) and $20,000 cash (decrease assets). Equity in the partnership is $0 right now. The ownership at present is clear. You own 50% of $0, and your sister owns 50% of $0. Where'd your money go?! Simple - it's a liability of the partnership, so you and your husband are together owed $20,000 by the partnership before any equity exists. Everything balances nicely at this point. Note that you should account for paying closing costs the same as you considered the down payment - that money should be paid back to you before any is doled out as investment profit! Now, how do you handle mortgage payments? This actually isn't as hard as it sounds, thanks to the nature of a partnership and proper business accounting. With a good foundation the rest of the building proceeds quite cleanly. On month 1 your sister pays $1400 into the partnership, while you pay $645 into the partnership. FP will record an increase in assets (cash) of $1800, an increase in liability to your sister of $1400, and an increase in liability to you of $645. FP will then record a decrease in cash assets of $1800 to pay the mortgage, with a matching increase in cost account for the mortgage. No net change in equity, but your individual contributions are still preserved. Let's say that now after only 1 month you decide to sell the property - someone makes an offer you just can't refuse of $350,000 dollars (we'll pretend all the closing costs disappeared in buying and selling, but it should be clear how to account for those as I mention earlier). Now what happens? FP gets an increase in cash assets of $350,000, decreases the house asset ($320,000 - original purchase price), and pays off the mortgage - for simplicity let's pretend it's still $300,000 somehow. Now there's $50,000 in cash left in the partnership - who's money is it? By accounting for the house this way, the answer is easily determined. First all investments are paid back - so you get back $20,000 for the down payment, $645 for your mortgage payments so far, and your sister gets back $1400 for her mortgage payment. There is now $27,995 left, and by being equal partners you get to split it - 13,977 to you and your husband and the same amount to your sister (I'm keeping the extra dollar for my advice to talk to a lawyer/CPA). What About Getting To Live There? The fact is that your sister is getting a little something extra out of the deal - she get's the live there! How do you account for that? Well, you might just be calling it a gift. The problem is you aren't in any way, shape, or form putting that in writing, assigning it a value, nothing. Also, what do you do if you want to sell/cash out or at least get rid of the mortgage, as it will be showing up as a debt on your credit report and will effect your ability to secure financing of your own in the future if you decide to buy a house for your husband and yourself? Now this is the kind of stuff where families get in trouble. You are mixing personal lives and business arrangements, and some things are not written down (like the right to occupy the property) and this can really get messy. Would evicting your sister to sell the house before you all go bankrupt on a bad deal make future family gatherings tense? I'm betting it might. There should be a carefully worded lease probably from the partnership to your sister. That would help protect you from extra court costs in trying to determine who has the rights to occupy the property, especially if it's also written up as part of the partnership agreement...but now you are building the potential for eviction proceedings against your sister right into an investment deal? Ugh, what a potential nightmare! And done right, there should probably be some dollar value assigned to the right to live there and use the property. Unless you just want to really gift that to your sister, but this can be a kind of invisible and poorly quantified gift - and those don't usually work very well psychologically. And it also means she's going to be getting an awfully larger benefit from this \"\"investment\"\" than you and your husband - do you think that might cause animosity over dozens and dozens of writing out the check to pay for the property while not realizing any direct benefit while you pay to keep up your own living circumstances too? In short, you need a legal structure that can properly account for the fact that you are starting out in-equal contributors to your scheme, and ongoing contributions will be different over time too. What if she falls on hard times and you make a few of the mortgage payments? What if she wants to redo the bathroom and insists on paying for the whole thing herself or with her own loan, etc? With a properly documented partnership - or equivalent such business entity - these questions are easily resolved. They can be equitably handled by a court in event of family squabble, divorce, death, bankruptcy, emergency liquidation, early sale, refinance - you name it. No percentage of simple co-ownership recorded on a deed can do any of this for you. No math can provide you the proper protection that a properly organized business entity can. I would thus strongly advise you, your husband, and your sister to spend the comparatively tiny amount of extra money to get advice from a real estate/investment lawyer/CPA to get you set up right. Keep all receipts and you can pay a book keeper or the accountant to do end of the year taxes, and answer questions that will come up like how to properly account for things like depreciation on taxes. Your intuition that you should make sure things are formally written up in times when everyone is on good terms is extremely wise, so please follow it up with in-person paid consultation from an expert. And no matter what, this deal as presently structured has a really large built-in potential for heartache as you have three partners AND one of the partners is also renting the property partially from themselves while putting no money down? This has a great potential to be a train wreck, so please do look into what would happen if these went wrong into some more detail and write up in advance - in a legally binding way - what all parties rights and responsibilities are.\"" }, { "docid": "458183", "title": "", "text": "Here would be the general steps to my mind for creating such a plan: Write out the final desired outcome. Is it $x in y years to fund your retirement? Is it $a in b years to put as a house down payment? This is the first step in defining how much money you want at what point in time. Consider what is your risk tolerance and how much time do you plan on spending in this plan. Is it rebalancing once a quarter and that's it or do you plan on doing monthly research and making tweaks all the time? This is slightly different from the first where one has to be mindful of how much volatility would one handle and what time commitment does one have for an investing strategy. Also, how much money would you be adding to the investments on what kind of time table would also be worth noting here. Construct the asset allocation based on the previous two steps along with historical returns averaged out to be a first draft of what you are buying in general. Is it US stocks? Is it a short-term bond fund? There are more than a few choices here that may make sense and it is worth considering based on the first couple of responses that determine what this will look like. Retirement in 40 years may be quite different than a house down payment in 2 years for example. Determine what brokerages or fund companies would offer such funds along with what types of accounts you'd want to have as in some countries there may be tax-advantaged accounts that may be useful to use here. This is where you're almost ready to start by doing the homework of figuring out how will things work. This may vary depending on one's jurisdiction. Get the applications from whatever institutions you'll be using and run with the desired asset allocation across various funds and accounts. Note that in the first few steps there were points of being aware of how much would you have, how aggressive are you investing and so forth. This is where you actually send in the money and get things rolling. Run with the plan and make tweaks as needed to achieve result, hopefully desired or better." }, { "docid": "42738", "title": "", "text": "The book value is Total Assets minus Total Liabilities and so if you increase the Total Assets without changing the Total Liabilities the difference gets bigger and thus higher. Consider if a company had total assets of $4 and total liabilities of $3 so the book value is $1. Now, if the company adds $2 to the assets, then the difference would be 4+2-3=6-3=3 and last time I checked 3 is greater than 1. On definitions, here are a couple of links to clarify that side of things. From Investopedia: Equity = Assets - Liabilities From Ready Ratios: Shareholders Equity = Total Assets – Total Liabilities OR Shareholders Equity = Share Capital + Retained Earnings – Treasury Shares Depending on what the reinvestment bought, there could be several possible outcomes. If the company bought assets that appreciated in value then that would increase the equity. If the company used that money to increase sales by expanding the marketing department then the future calculations could be a bit trickier and depend on what assumptions one wants to make really. If you need an example of the latter, imagine playing a game where I get to make up the rules and change them at will. Do you think you'd win at some point? It would depend on how I want the game to go and thus isn't something that you could definitively say one way or the other." }, { "docid": "149210", "title": "", "text": "If you are the only contributor to the premiums, you will not owe income taxes on the benefits. Only the portion of the benefits you receive which were paid by your employer are taxable. Source: IRS 'Life Insurance & Disability Insurance Proceeds' Question: I am receiving long-term disability. Is it considered taxable? If you pay the entire cost of a health or accident insurance plan, do not include any amounts you receive for your disability as income on your tax return EDIT: In regards to @NateEldredge's comment: If you are inquiring about the premiums, then yes, you have to pay income tax on the portion of income that pays the premiums (it's a post-tax expense and is not tax-deductible)" }, { "docid": "257625", "title": "", "text": "\"This question and your other one indicate you're a bit unclear on how capital gains taxes work, so here's the deal: you buy an asset (like shares of stock or a mutual fund). You later sell it for more than you bought it for. You pay taxes on your profit: the difference between what you sold it for and what you bought it for. What matters is not the amount of money you \"\"withdraw\"\", but the prices at which assets are bought and sold. In fact, often you will be able to choose which individual shares you sell, which means you have some control over the tax you pay. For a simple example, suppose you buy 10 shares of stock for $100 each in January (an investment of $1000); we'll call these the \"\"early\"\" shares. The stock goes up to $200 in July, and you buy 10 more shares (investing an additional $2000); we'll call these the \"\"late\"\" shares. Then the stock drops to $150. Suppose you want $1500 in cash, so you are going to sell 10 shares. The 10 early shares you bought have increased in value, because you bought then for $100 but can now sell them for $150. The 10 late shares have decreased in value, because you bought them for $200 but can now only sell them for $150. If you choose to sell the early shares, you will have a capital gain of $500 ($1500 sale price minus $1000 purchase price), on which you may owe taxes. If you sell the late shares, you will have a capital loss of $500 ($1500 sale price minus $2000 purchase price is -$500), which you can potentially use to reduce your taxes. Or you could sell 5 of each and have no gain or loss (selling five early shares for $150 gives you a gain of $250, but selling five late shares for $150 gives you a loss of $250, and they cancel out). The point of all this is to say that the tax is not determined by the amount of cash you get, but by the difference between the sale price and the price you purchased for (known as the \"\"cost basis\"\"), and this in turn depends on which specific assets you sell. It is not enough to know the total amount you invested and the total gain. You need to know the specific cost basis (i.e., original purchase price) of the specific shares you're selling. (This is also the answer to your question about long-term versus short-term gains. It doesn't matter how much money you make on the sale. What matters is how long you hold the asset before selling it.) That said, many brokers will automatically sell your shares in a certain order unless you tell them otherwise (and some won't let you tell them otherwise). Often they will use the \"\"first in, first out\"\" rule, which means they will always sell the earliest-purchased shares first. To finally get to your specific question about Betterment, they have a page here that says they use a different method. Essentially, they try to sell your shares in a way that minimizes taxes. They do this by first selling shares that have a loss, and only then selling shares that have a gain. This basically means that if you want to cash out $X, and it is possible to do it in a way that incurs no tax liability, they will do that. What gets me very confused is if I continue to invest random amounts of money each month using Betterment, then I need to withdraw some cash, what are the tax implications. As my long answer above should indicate, there is no simple answer to this. The answer is \"\"it depends\"\". It depends on exactly when you bought the shares, exactly how much you paid for them, exactly when and how much the price rose or fell, and exactly how much you sell them for. Betterment is more or less saying \"\"Don't worry about any of this, trust us, we will handle everything so that your tax is minimized.\"\" A final note: if you really do want to track the details of your cost basis, Betterment may not be for you, because it is an automated platform that may do a lot of individual trades that a human wouldn't do, and that can make tracking the cost basis yourself very difficult. Almost the whole point of something like Betterment is that you are supposed to give them your money and forget about these details.\"" }, { "docid": "475896", "title": "", "text": "You need a lawyer and a tax accountant for a sale like this. They will be able to tell you if the proceeds are taxed as income (most likely) or capital gains and will help you structure the deal. How you spend the proceeds will not make a difference, although if it's a large amount and you plan to donate some to charity, you may be able to save on your total tax liability by creating a donor advised fund. Keep in mind the broker is mostly interested in his commission and not about making the best deal for you. Get an attorney with experience in business sales." }, { "docid": "213339", "title": "", "text": "Of course you can transfer it, and it will be legal. There's no taxes on transferring your own money. There's income tax on gains you realized by selling the property, but that is money you already owe, it doesn't matter where the proceeds are. It also doesn't matter how you acquired the property (except for figuring out your basis). What matters is that you had gains, and these gains are taxable in the US. You need to figure out the value of the property when your father bought it, and that is your basis. The difference between what you sold it for and that basis is your taxable gain, and you already owe taxes on that gain." }, { "docid": "91870", "title": "", "text": "I haven't seen any of the other answers address this point – shares are (a form of) ownership of a company and thus they are an entitlement to the proceeds of the company, including proceeds from liquidation. Imagine an (extreme, contrived) example whereby you own shares in a company that is explicitly intended to only exist for a finite and definite period, say to serve as the producers of a one-time event. Consider a possible sequence of major events in this company's life: So why would the shares of this hypothetical company be worth anything? Because the company itself is worth something, or rather the stuff that the company owns is worth something, even (or in my example, especially) in the event of its dissolution or liquidation. Besides just the stuff that a company owns, why else would owning a portion of a company be a good idea, i.e. why would I pay for such a privilege? Buying shares of a company is a good idea if you believe (and are correct) that a company will make larger profits or capture more value (e.g. buy and control more valuable stuff) than other people believe. If your beliefs don't significantly differ from others then (ideally) the price of the companies stock should reflect all of the future value that everyone expects it to have, tho that value is discounted based on time preference, i.e. how much more valuable a given amount of money or a given thing of value is today versus some time in the future. Some notes on time preference: But apart from whether you should buy shares in a specific company, owning shares can still be valuable. Not only are shares a claim on a company's current assets (in the event of liquidation) but they are also claims on all future assets of the company. So if a company is growing then the value of shares now should reflect the (discounted) future value of the company, not just the value of its assets today. If shares in a company pays dividends then the company gives you money for owning shares. You already understand why that's worth something. It's basically equivalent to an annuity, tho dividends are much more likely to stop or change whereas the whole point of an annuity is that it's a (sometimes) fixed amount paid at fixed intervals, i.e. reliable and dependable. As CQM points out in their answer, part of the value of stock shares, to those that own them, and especially to those considering buying them, is the expectation or belief that they can sell those shares for a greater price than what they paid for them – irrespective of the 'true value' of the stock shares. But even in a world where everyone (magically) had the same knowledge always, a significant component of a stock's value is independent of its value as a source of trading profit. As Jesse Barnum points out in their answer, part of the value of stocks that don't pay dividends relative to stocks that do is due to the (potential) differences in tax liabilities incurred between dividends and long-term capital gains. This however, is not the primary source of value of a stock share." }, { "docid": "399409", "title": "", "text": "We run into this all the time with our EU clients. As far as I can tell, the only requirements when it comes to invoicing have to do with sales tax, which is determined at the state level, and only in the case that items are taxable. It seems that the service provided to you is not taxable and so there is no obligation under Californian law to provide you with the invoice you need. That said, it would be nice to provide this information to you as a courtesy. We don't provide the information typically required by EU tax authorities on our receipts either, but whenever one of our EU clients requests a more formal invoice we gladly send them one." }, { "docid": "72360", "title": "", "text": "The first step I would do is determine the asset class mixture for your current portfolio and the mixture for your new one. If they are the same and all you are doing is changing the funds that you use to invest in that mixture of asset class then just do the change all at once. In this case there is no market risk as you are just swapping funds (hopefully to ones that you feel will better track the underlying asset classes). If you are also changing your asset class mixture, then it depends on how large the change is. I would still do the whole change at once. But if you are worried about fluctuations then you could slowly rebalance into your final position by taking a couple of intermediary steps. I would still change all of the fund first but maybe in a mix closer to your current asset mix and then over the next couple of months adjust the ratios to reach your final desired asset mix." }, { "docid": "378110", "title": "", "text": "\"In general, scholarship income that you receive that is not used for tuition or books must be included in your gross income and reported as such on your tax return. Scholarship income you receive that is used for those kinds of expenses may be excludable from your gross income. See this IRS information and this related question. I believe that as represented on the 1098-T, this generally means that if Box 5 (Scholarships and Grants) is greater than Box 1 or 2 (only one of which will be used on your 1098-T), you received taxable scholarship income. If Box 5 is less than or equal to Box 1/2, you did not receive taxable scholarship income. This TaxSlayer page draws the same conclusion. However, you should realize that the 1098-T is not what makes you have to pay or not pay taxes. You incur the taxes by receiving scholarship money, and you may reduce your tax liability by paying tuition. The 1098-T is simply a record of payments that have already been made. For instance, if you received $10,000 in scholarship money --- that is, actually received checks for that amount or had that amount deposited into your bank account --- then your income went up by $10,000. If you yourself paid tuition, it is likely that you can exclude the amount of the tuition from your taxable income, reducing the tax you owe (see the IRS page linked above). However, if you received $10,000 in actual money and in addition your tuition was paid by the scholarship (with money you never actually had in your own bank account), then the entire $10,000 would be taxable. You do not give enough information in your question to be sure which of these situations is closer to your own. However, you should be able to decide by looking at your bank account: look at how much money you received and how much you spent on tuition. If you received more scholarship money than the tuition you paid out of pocket, you owe taxes on the remainder. (I emphasize that this is just a general rule of thumb and should not be taken as tax advice; you should review the IRS information and/or consult a tax professional to determine what part of your scholarship income is taxable.) In addition, as this (now rather old) article from the New York Society of CPAs notes, \"\"many colleges and universities prepare 1098-Ts incorrectly and report tuition and related expenses inconsistently\"\". This means you should be careful to reconcile the 1098-T with your own financial records of what money you actually received and paid. When I was in grad school there was a good deal of hand-wringing and hair-pulling each year among the students as we tried to determine what relationship (if any) the 1098-T bore to the financial facts.\"" }, { "docid": "178497", "title": "", "text": "Stock options represent an option to buy a share at a given price. What you have been offered is the option to buy the company share at a given price ($5) starting a given date (your golden handcuffs aka vesting schedule). If the company's value doubles in 1 year and the shares are liquid (i.e. you can sell them) then you've just made $125k of profit. If the company's value has gone to zero in 1 year then you've lost nothing other than your hopes of getting rich. As others have mentioned, the mechanics of exercising the option and selling the shares can typically be accomplished without any cash involved. The broker will do both in a single transaction and use the proceeds of the sale to pay the cost of buying the shares. You should always at least cover the taxable portion of the transaction and typically the broker will withhold that tax anyways. Otherwise you could find yourself in a position where you have actually lost money due to tax being owed while the shares decline in value below that tax. You don't have to worry about that right now. Again as people have mentioned options will typically expire 10 years from vesting or 90 days from leaving your employment with the company. I'm sure there are some variations on the theme. Make sure you ask and all this should be part of some written contract. I'm sure you can ask to see it if you wish. Also typical is that stock option grants have to be approved by the board which is normally a technicality. Some general advice:" }, { "docid": "293404", "title": "", "text": "\"This is what this sounds like to me: https://www.thebalance.com/having-a-garage-sale-or-yard-sale-what-to-do-first-399030 also: http://blogs.hrblock.com/2012/07/25/garage-sale-money-does-the-irs-need-to-know/ Selling a personal item at a loss is generally not a taxable event. You cannot report it as a loss, and the IRS can't tax a transaction like that. If you really want to include these as sales as part of your LLC, you'll probably have to pay tax if you list it as income. I'm just confused as to why you'd want to do that, if you know that you're selling these particular items at a loss, and you also know that you have no documentation for them. I just wouldn't report anything you sold at a loss and treat it as \"\"garage sale items\"\" separate from your business.\"" }, { "docid": "425559", "title": "", "text": "\"It's a little unusual, but I don't think the financial terms are completely unreasonable on their face. What you describe is similar to an interest-only loan, where you make payments that only cover the interest due each month, and the entire principal is due as a single \"\"balloon payment\"\" on a specified date (in this case, the date on which the condo is sold). Your monthly payment of $500 on a principal of $115K is equivalent to an annual interest rate of 5.22%, which at least is not completely usurious. With a traditional mortgage you might pay a rate as low as 3%, if you had sufficient income and excellent credit - but I don't know, from what you've said, whether that's the case. Did you make the current arrangement because you were unable to get a loan from a bank? The main difference here is that instead of the balloon payment being a fixed $115K, it's \"\"75% of the gross proceeds of the sale\"\". If the condo eventually sells for $155K, that would be $116,250, so that's slightly advantageous to them (assuming that \"\"gross proceeds\"\" means \"\"before deducting commissions for either the buyers' or sellers' realtors or any other costs of the sale\"\"), and thus slightly disadvantageous to you. If the condo appreciates in value, that's more of a win for them and more of a relative loss for you. But it's also possible that the value of the condo goes down, in which case this arrangement is better for you than a fixed balloon payment. So this deal does prevent you from getting a larger share of any gains in the value of the property, but it also helps insulate you from any losses. That's important to keep in mind. There's also the issue of needing their consent to sell. That's potentially problematic - usually in a joint ownership scheme, either owner has the right to demand to be bought out or to force a sale. I guess it depends on whether you think your parents would be likely to consent under reasonable circumstances, or to insist on holding the property against your best interests. It's true that you aren't building equity with this arrangement, and if you thought you were, you are mistaken or misled. But let's compare it with other options. If you would qualify for a traditional 30-year fixed mortgage at 3%, your monthly payment would be slightly lower ($484), and you would be building some equity because your payments would reduce the principal as well as paying the interest. But a 30-year loan builds equity very slowly at first - after 7 years you'd have only about $20,000 in principal paid down. If we assume that 5.2% represents the interest rate you'd otherwise pay based on your creditworthiness, then your monthly payment would be $631. So compared to that, you have an extra $130 per month that you can save or invest in whatever you want - you're not forced to invest it in your house. Note that in either case you'd still be paying the condo fees, property taxes, insurance, and maintenance yourself. So we might as well eliminate those from consideration. It might be a good idea to find out what other options you would have - perhaps try to get an interest rate quote on a traditional mortgage from a bank, based on your income and credit history. Then you can decide what to do, taking into account: your financial situation; how much of a monthly payment could you afford? your relationship with your parents; are they likely to be reasonable about renegotiating? Do they in general tend to respect your wishes? Would it harm your relationship if you tried to get out of the deal, and how important is that to you? To what extent do you actually want to pay for equity in this property? Do you really believe it's a good investment, and have evidence to support that? Your options include: Try to renegotiate the terms of the loan from your parents Try to \"\"refinance\"\" the loan, by getting a loan from a bank and paying off some agreed-upon amount of principal to your parents Try to force the sale of the condo and move to another house, financing it some other way Consult a lawyer as to whether your agreement with your parents is legally enforceable. For instance, do they have a lien on the property?\"" }, { "docid": "476859", "title": "", "text": "\"What drives the stock of bankrupt companies? Such stock is typically considered \"\"distressed assets\"\". Technically, what drives it is what drives every stock - supply and demand. A more interesting question is of course, why would there be demand? First, who exerts the buying pressure on the stock? Typically, three types of entities: The largest ones are financial institutions specializing in distressed assets (frequently, alternatives specialists - hedge funds, private equity firms etc...). Usually, they invest in distressed debt or distressed preferred equity; but sometimes distressed equity as well. Why? We will discuss their motivations separately in this answer. Second one are existing equity holders. Why? Short answer, behavioral psychology and behavioral economics. Many investors - especially non-professionals - insist on holding distressed stocks due to variety of investment fallacies (sunk cost etc...); usually constructing elaborate theories of why and how the company and the stock will recover Sometimes, people who buy into penny stock scams, pump and dump schemes etc... Why? \"\"There's a sucker born every minute.\"\" - P.T. Barnum Let's find out why an investment professional would invest in distressed equity? First, the general process is always the same. Company's assets are used to pay off its liabilities; in accordance with applicable law. There are two ways this can be done - either through selling the company; OR through bankruptcy process. The liabilities are paid according to seniority. The seniority priorities rules are covered by 11 U.S. Code § 507 - Priorities A company in bankruptcy can have one of 2 outcomes: Buyout. Some buyer might decide that the company's assets are worth something to them as a whole; and buy the whole enterprise; rather than risk it being destroyed piecemeal in bankruptcy proceedings. In that case, the proceeds from the sale will be used to fund the liabilities as discussed above. This option is one of the possible reasons people might consider investing in distressed equity. For example, if the company is in bankruptcy because it can't get enough financing right now, but is likely to have good profits in the future. The chances are, some buyer will buy it for a premium that includes those future profits; and that sale amount might possibly exceed the liabilities. Bankruptcy. The assets are sold and liabilities are covered according to priorities. In that case, the investors in distressed equity might be hoping that there are un-obvious assets whose value would also put the total assets above claimed liabilities. Additional possible beneficial factor is that unsecured debtors must file with the court in order to be paid; and the claim must be validated. Some might fail on either count; so total amount of liabilities might lessen once the bankruptcy process goes through. Assets Now, here's where things get interesting. Of course, companies have usual assets. Real estate, inventory, plants, cash, etc... These are all able to be sold to cover liabilities, and at first glance are possibly not enough to cover liabilities, leaving equity holders with nothing (and even that's not a certainty - bankruptcy is simply inability to service debt payments; and while it correlates to assetsliquid assets, not full asset valuation). But some assets are less sure, and are thus rarely included in such calculations. These may include: Chances of winning appeals if specific existing liabilities are results of litigation, e.g. tax appeals, court judgement appeals etc... Clawbacks and lawsuits against former executives, especially in cases where the company's financial distress resulted from executive malfeasance. I was personally involved in one such case as an equity holder, where the company assets were valued at $X; had liabilities of $X*2; but had a real possibility of winning about $X*3 in a lawsuit against former CEO accused of various malfeasance including fraud and insider trading. As such, the best case scenario was literally 100% profit on holding that distressed equity.\"" } ]

[ { "docid": "114418", "title": "", "text": "\"In the United States tax law, a group of people who are neither an individual nor an incorporated entity is called \"\"partnership\"\". Here's the IRS page on partnerships. Income derived by such a \"\"meetup.com\"\" group is essentially a partnership income with the group members being the partners. However, as you can see from the questions in the comments, the situation can become significantly more complex if this partnership is not managed properly.\"" } ]

[ { "docid": "177648", "title": "", "text": "Your first scenario, involving shareholders in a private corp being limited by a contractual agreement, is common in practice. Frequent clauses include methods of valuing the shares if someone wants to sell, first right of refusal [you have to attempt to sell to the other shareholders, before you can sell to a 3rd party], and many others. These clauses are governed by contract law [ie: some clauses may be illegal in contract law, and therefore couldn't be applied here]. A Universal Shareholders' Agreement is just the same as the above, but applied to more people. You would never get an already public company to convert to a universal shareholders' agreement - because even 1 share voting 'no' would block it [due to corporate law limiting the power of a corporation from abusing minority shareholder value]. In practice, these agreements universally exist at the start of incorporation, or at least at the first moment shares become available. An example is the Canadian mega-construction company PCL*, which is employee-owned. When the original owner transferred the corporation to his employees, there was a USA in place which still today governs how the corporation operates. In theory you could have a 'public company' where most shares are already owned by the founders, and 100% of remaining shares are owned by a specific group of individuals, in which case you may be able to get a USA signed. But it wouldn't really happen in practice. *[Note that while PCL is broadly owned by a large group of employees, it is not a 'public company' because any random schmuck can't simply buy a share on the Toronto Stock Exchange. I assume most exchanges would prevent corporations from being listed if they had ownership restrictions like this]." }, { "docid": "250563", "title": "", "text": "\"Ok hate speech as a crime has to meet very specific criteria. E.g. the group has to be identifiable and your speech has to be unjust, potentialy harmful and generalized. You gave a very good example of that aka the swedish 70 year old lady who said ( i googled the case): \"\" Muslims burn cars and piss and shit on the streets\"\" ( this is the message not the actual words was to lazy looking deeper into this). So she DIDN'T say she saw 1 guy pissing in the streets she knows to be muslim or he just looks like one ( how do muslims look by the way. some i know look like seinfeld characters.) She said ALL muslims pissing and shitting in the streets and set cars on fire..... thats a big difference. Comments like this are extremely harmful to the mentioned groups, because innocent people are branded with negative stereotypes. The real world consequence is prosecution and violence which severely limits the freedom of this group. Why do people (fyi \"\"people\"\" is not a specific group so no hate speech 😉) not get this. If the same thing happens to a person and not a group it becomes clear: e.g. \"\"raananh is a liar and steals everything he can and tends to shit on his bosses desk\"\". This is widely spread and you apply for a job in a law firm. They do not hire you because the boss likes his desk clean. Harm was done to you. You are pissed and righteously sue me because it's illegal to spread untruths about you. You can even do so in the USA 😮OMG FREEDOM OF SPEECH. Sweden does many things right and is to this day one of the most open and free countries.\"" }, { "docid": "253945", "title": "", "text": "We all buy stuff from time to time that only satisfies us for a short time. I was able to locate a few expenses that fall under that category. I see a lot answers that focus on not getting these things. I'm going to tell you how to at least attempt to have your cake and eat it too. If you can get these things without paying for them, or by paying pennies on the dollar for them, you'll no longer want to buy them at full price. Begin by making a list of the items you can't stop thinking about. Go to your local library and look for relevant items that are on your list. If they are not yet available, request that the library purchase them, and reserve them for when the items come in. Yes, libraries are usually tax-supported, but to give back, if you can't afford to contribute to the Library immediately, you can still promote their fund-raising or book/media-drive efforts. If you don't mind buying things that may be second hand, thrift stores and garage or yard sales can have anything. The ones near you may have one or two items on your list of things you were looking for - for pennies on the dollar. Other items might be things you can share with friends. Borrow or swap things until you get bored of them. If you don't have a network of friends with shared interests, there may be a local freecycle or relevant meetup group you can join. The key here is to try to contribute more than you take (and you probably have things you don't need that you can start with trading), and don't keep careful score. The upshot is you'll not only save money but make friends while doing it. You can sometimes have your cake and eat it too. These recommendations can get you the short-term happiness you were looking for, without spending the money. And when the happiness is gone, you won't feel like you need to hang on to the item indefinitely - you can pass it on for others to enjoy." }, { "docid": "97852", "title": "", "text": "Legally, do I have anything to worry about from having an incorrectly filed W-4? What you did wasn't criminal. When you submitted the form it was correct. Unfortunately as your situation changed you didn't adjust the form, that mistake does have consequences. Is there anything within my rights I can do to get the company to take responsibility for their role in this situation, or is it basically my fault? It is basically your fault. The company needs a w-4 for each employee. They will use that W-4 for every paycheck until the government changes the regulation, or your employment ends, or you submit a new form. Topic 753 - Form W-4 – Employee's Withholding Allowance Certificate If an employee qualifies, he or she can also use Form W-4 (PDF) to tell you not to deduct any federal income tax from his or her wages. To qualify for this exempt status, the employee must have had no tax liability for the previous year and must expect to have no tax liability for the current year. However, if the employee can be claimed as a dependent on a parent's or another person's tax return, additional limitations may apply; refer to the instructions for Form W-4. A Form W-4 claiming exemption from withholding is valid for only the calendar year in which it is filed with the employer. To continue to be exempt from withholding in the next year, an employee must give you a new Form W-4 claiming exempt status by February 15 of that year. If the employee does not give you a new Form W-4, withhold tax as if he or she is single, with no withholding allowances. However, if you have an earlier Form W-4 (not claiming exempt status) for this employee that is valid, withhold as you did before. (I highlighted the key part) Because you were claiming exempt they should have required you to update that form each year. In your case that may not have applied because of the timing of the events. When do you submit a new form? Anytime your situation changes. Sometimes the change is done to adjust withholding to modify the amount of a refund. Other times failure to update the form can lead to bigger complication: when your marital status changes, or the number of dependents changes. In these situations you could have a significant amount of under-withheld, which could lead to a fine later on. As a side note this is even more true for the state version of a W-4. Having a whole years worth of income tax withholding done for the wrong state will at a minimum require you to file in multiple states, it could also result in a big surprise if the forgotten state has higher tax rate. Will my (now former) employee be responsible for paying their portion of the taxes that were not withheld during the 9 months I was full-time, tax Exempt? For federal and state income taxes they are just a conduit. They take the money from your paycheck, and periodically send it to the IRS and the state capital. Unless you could show that the pay stubs said taxes were being withheld, but the w-2 said otherwise; they have no role in judging the appropriateness of your W-4 with one exception. Finally, and I am not too hopeful on this one, but is there anything I can do to ease this tax burden? I understand that the IRS is owed no matter what. You have one way it might workout. For many taxpayers who have a large increase in pay from one year to the next, they can take advantage of a safe-harbor in the tax law. If they had withheld as much money in 2015 as they paid in 2014, they have reached the safe-harbor. They avoid the penalty for under withholding. Note that 2014 number is not what you paid on tax day or what was refunded, but all your income taxes for the entire year. Because in your case your taxes for the year 2014 were ZERO, that might mean that you automatically reach the safe-harbor for 2015. That makes sense because one of the key requirements of claiming exempt is that you had no liability the year before. It won't save you from paying what you owe but it can help avoid a penalty. Lessons" }, { "docid": "454537", "title": "", "text": "\"It might be best to step back and look at the core information first. You're evaluating an LLC vs a Corporation (both corporate entities). Both have one or more members, and both are seen similarly (emphasis on SIMILAR here, they're not all the same) to the IRS. Specifically, LLC's can opt for a pass-through tax system, basically seen by the IRS the same way an S-Corp is. Put another way, you can be taxed as a corporate entity, or it's P/L statements can \"\"flow through\"\" to your personal taxes. When you opt for a flow-through, the business files and you get a separate schedule to tie into your taxes. You should also look at filing a business expense schedule (Schedule C) on your taxes to claim legitimate business expenses (good reference point here). While there are several differences (see this, and this, and this) between these entities, the best determination on which structure is best for you is usually if you have full time employ while you're running the business. S corps limit shares, shareholders and some deductions, but taxes are only paid by the shareholders. C corps have employees, no restrictions on types or number of stock, and no restrictions on the number of shareholders. However, this means you would become an employee of your business (you have to draw monies from somewhere) and would be subject to paying taxes on your income, both as an individual, and as a business (employment taxes such as Social Security, Medicare, etc). From the broad view of the IRS, in most cases an LLC and a Corp are the same type of entity (tax wise). In fact, most of the differences between LLCs and Corps occur in how Profits/losses are distributed between members (LLCs are arbitrary to a point, and Corps base this on shares). Back to your question IMHO, you should opt for an LLC. This allows you to work out a partnership with your co-worker, and allows you to disburse funds in a more flexible manner. From Wikipedia : A limited liability company with multiple members that elects to be taxed as partnership may specially allocate the members' distributive share of income, gain, loss, deduction, or credit via the company operating agreement on a basis other than the ownership percentage of each member so long as the rules contained in Treasury Regulation (26 CFR) 1.704-1 are met. S corporations may not specially allocate profits, losses and other tax items under US tax law. Hope this helps, please do let me know if you have further questions. As always, this is not legal or tax advice, just what I've learned in setting several LLCs and Corporate structures up over the years. EDIT: As far as your formulas go, the tax rate will be based upon your personal income, for any pass through entity. This means that the same monies earned from and LLC or an S-corp, with the same expenses and the same pass-through options will be taxed the same. More reading: LLC and the law (Google Group)\"" }, { "docid": "479093", "title": "", "text": "\"If a country had a genuine completely flat income tax system, then it wouldn't matter who paid the tax since it doesn't depend on the employee's other income. Since not many countries run this, it doesn't really make sense for the employee to \"\"take the burden\"\" of the tax, as opposed to merely doing the administration and paying the (probable) amount of tax at payroll, leaving the employee to use their personal tax calculation to correct the payment if necessary. Your prospective employer is probably saying that your tax calculation in Singapore is so simple they can do it for you. They may or may not need to know a lot of information about you in order to do this calculation, depending what the Singapore tax authorities say. If you're not a Singapore national, they may or may not be relying on bilateral tax agreements with your country to assert that you won't have to pay any further tax on the income in your own country. It's possible they're merely asserting that you won't owe anything else in Singapore, and in fact you will have taxes to report (even if it's just reporting to your home tax authority that you've already paid the tax). Still, for a foreign worker a guarantee you won't have to deal with the local tax authority is a good thing to have even if that's all it is. Since there doesn't appear to be any specific allowance for \"\"tax free money\"\" in the Singapore tax system, it looks like what you have here is \"\"just\"\" the employer agreeing to do something that will normally result in the correct tax being paid in your behalf. This isn't uncommon, but it's also not exactly what you asked for. And in particular if you have two jobs in Singapore then they can't both be doing this, since tax is not flat. The example calculation includes varying tax rates for the first X amount of income that (I assume without checking) are per person, not per employment. Joe's answer has the link. In practice in the UK (for example), there are plenty of UK nationals working in the UK who don't need to do a full tax return and whose tax is collected entirely at source (between PAYE and deductions on bank interest and suchlike). In this sense the employer is required by law to take the responsibility for doing the admin and making the tax payments to HMRC. Note that a UK employer doesn't need to know your circumstances in detail to make the correct payroll deductions: all they need is a so-called \"\"tax code\"\", which is calculated by HMRC and communicated to the employer, and which basically encodes how much they can pay you at zero rate before the various tax rate tiers kick in. That's all the employer needs to know here for the typical employee: they don't need to know precisely what credits and liabilities resulted in the figure. However, these employers still don't offer empoyees a net salary (that is, they don't take on the tax burden), because different employees will have different tax codes, which the employer would in effect be cancelling out by offering to pay two people the same net salary regardless of their individual circumstances. The indications seem to be that the same applies in Singapore: this offer is really a net salary subject to certain assumptions (the main one being that you have no other tax liabilities in Singapore). If you're a Singapore millionaire taking that job for fun, you might find that the employer doesn't/can't take on your non-standard tax liability on this marginal income.\"" }, { "docid": "594106", "title": "", "text": "No it wouldn't. You'd have to change the law to make **both** settlements and damages non-deductible. In another comment on this thread I wrote about what's deductible and what's not. The **fine** paid to the government is not deductible. The **damages** or **restitution** paid to another party are. Since a settlement is essentially damages and/or restitution paid to someone who's not the US Government, then it's deductible. I haven't read the case law, but I'm sure that the argument is that since they got money that they shouldn't have in the first place, then they shouldn't have to pay taxes on it. Otherwise, what's to stop the IRS from making them pay taxes on phantom income all over the place? The fine paid to the Govt is the punishment, and I'm sure that the prosecutors aren't complete morons and do take the tax consequences into consideration." }, { "docid": "194637", "title": "", "text": "No, you probably do not need to file a tax return if you received no income, and if you meet a number of other criteria. The below is copied and pasted, slightly edited, from the CRA: You must file a return for 2014 if any of the following situations apply: You have to pay tax for 2014. We sent you a request to file a return. You and your spouse or common-law partner elected to split pension income for 2014. See lines 115, 116, 129, and 210. You received working income tax benefit (WITB) advance payments in 2014. You disposed of capital property in 2014 (for example, if you sold real estate or shares) or you realized a taxable capital gain (for example, if a mutual fund or trust attributed amounts to you, or you are reporting a capital gains reserve you claimed on your 2013 return). You have to repay any of your old age security or employment insurance benefits. See line 235. You have not repaid all amounts withdrawn from your registered retirement savings plan (RRSP) under the Home Buyers’ Plan or the Lifelong Learning Plan. For more information, go to Home Buyers' Plan (HBP) or see Guide RC4112, Lifelong Learning Plan (LLP) or You have to contribute to the Canada Pension Plan (CPP). This can apply if, for 2014, the total of your net self-employment income and pensionable employment income is more than $3,500. See line 222. You are paying employment insurance premiums on self-employment and other eligible earnings. See lines 317 and 430. In general, you will want to file a tax return even if none of the above applies. You could, for example, claim a GST/HST credit even with no income. Now, if you receive any income at all, you are going to have to pay taxes, which means you are obligated to file a tax return. If sufficient taxes were deducted from your paycheque, you are still obligated to file a tax return. However, you will not have to pay penalties if you file late, even if you file very late, at least not until the CRA sends you a request to file. But be aware, you won't likely be able to tell if you owe the CRA money until you do your taxes, and if you do end up owing, there are substantial penalties for filing late. In general, I'd strongly advise filing your tax return in almost all circumstances." }, { "docid": "379463", "title": "", "text": "\"No, in the UK you don't need to pay tax on gifts in general. In theory there could be an inheritance tax issue. But it's highly unlikely to apply here. It could only apply at all if all of the below apply: But even then the allowance would probably count as a \"\"regular gift out of income\"\" and so would be ignored completely: Regular gifts from the giver’s income There’s no Inheritance Tax on gifts from the deceased’s income (after they paid tax) as long as the deceased had enough money to maintain their normal lifestyle.\"" }, { "docid": "224667", "title": "", "text": "Sure; you can deposit cash. A few notes apply: Does the source of cash need to be declared ? If you deposit more than $10,000 in cash or other negotiable instruments, you'll be asked to complete a form called a Currency Transaction Report (here's the US Government's guidance for consumers about this form). There's some very important information in that guidance document about structuring, which is a fairly serious crime that you can commit if you break up your deposits to avoid reporting. Don't do this. The linked document gives examples. Also don't refuse to make your deposit and walk away when presented with a CTR form. In addition, you are also required to report to Customs and Border Protection when you bring more than $10,000 in or out of the country. If you are caught not doing so, the money may be seized and you could be prosecuted criminally. Many countries have similar requirements, often with different dollar amounts, so it's important to make sure you comply with their laws as well. The information from this reporting goes to the government and is used to enforce finance and tax laws, but there's nothing wrong or illegal about depositing cash as long as you don't evade the reporting requirements. You will not need to declare precisely where the cash comes from, but they will want the information required on the forms. Is it taxable ? Simply depositing cash into your bank account is not taxable. Receiving some forms of income, whether as cash or a bank deposit, is taxable. If you seem to have a large amount of unexplained cash income, it is possible an IRS audit will want an explanation from you as to where it comes from and why it isn't taxable. In short, if the income was taxable, you should have paid taxes on it whether or not you deposit it in a bank account. What is the limit of the deposit ? There is no government limit. An individual bank may have their own limit and/or may charge a fee for larger deposits. You could always call the bank and ask." }, { "docid": "322049", "title": "", "text": "I think this question is very nearly off-topic for this site, but I also believe that a basic understanding of the why the tax structure is what it is can help someone new to investing to understand their actual tax liability. The attempt at an answer I provide below is from a Canadian & US context, but should be similar to how this is viewed elsewhere in the world. First note that capital gains today are much more fluid in concept than even 100 years ago. When the personal income tax was first introduced [to pay for WWI], a capital gain was viewed as a very deliberate action; the permanent sale of property. Capital gains were not taxed at all initially [in Canada until 1971], under the view that income taxes would have been paid on income-earning assets all along [through interest, dividends, and rent], and therefore taxing capital gains would be a form of 'double-taxation'. This active, permanent sale was also viewed as an action that an investor would need to work for. Therefore it was seen as foolish to prevent investors from taking positive economic action [redistributing their capital in the most effective way], simply to avoid the tax. However today, because of favourable taxation on capital gains, many financial products attempt to package and sell capital gains to investors. For example, many Canadian mutual funds buy and sell investments to earn capital gains, and distribute those capital gains to the owners of the mutual fund. This is no longer an active action taken by the investor, it is simply a function of passive investing. The line between what is a dividend and what is a capital gain has been blurred by these and similar advanced financial products. To the casual investor, there is no practical difference between receiving dividends or capital gain distributions, except for the tax impact. The notional gain realized on the sale of property includes inflation. Consider a rental property bought in 1930 for $100,000, and sold in 1960 for $180,000, assuming inflation between 1930 and 1960 was 70%. In 1960 dollars, the property was effectively bought for 170k. This means the true gain after accounting for inflation is only $10k. But, the notional gain is $80k, meaning a tax on that capital gain would be almost entirely a tax on inflation. This is viewed by many as being unfair, as it does not actually represent true income. I will pause to note that any tax on any investment at all, taxes inflation; interest, for example, is taxed in full even though it can be almost entirely inflationary, depending on economic conditions. A tax on capital gains may restrict market liquidity. A key difference between capital gains and interest/rent/dividends, is that other forms of investment income are taxed annually. If you hold a bond, you get taxed on interest from that bond. You cannot gain value from a bond, deferring tax until the date it matures [at least in Canada, you are deemed to accrue bond interest annually, even if it is a 0 coupon bond]. However, what if interest rates have gone down, increasing the value of your bond, and you want to sell it to invest in a business? You may choose not to do this, to avoid tax on that capital gain. If it were taxed as much as regular income, you might be even more inclined to never sell any asset until you absolutely have to, thus restricting the flow of capital in the market. I will pause here again, to note that laws could be enacted to minimize capital gains tax, as long as the money is reinvested immediately, thus reducing this impact. Political inertia / lobbying from key interests has a significant impact on the tax structure for investments. The fact remains that the capital gains tax is most significantly an impact on those with accrued wealth. It would take significant public support to increase capital gain tax rates, for any political party to enact such laws. When you get right down to it, tax laws are complex, and hard to push in the public eye. The general public barely understands that their effective tax rate is far lower than their top marginal tax rate. Any tax increases at all are often viewed negatively, even by those who would never personally pay any of that tax due to lack of investment income. Therefore such changes are typically made quietly, and with some level of bi-partisan support. If you feel the capital gains tax rules are illogical, just add it to the pile of such tax laws that exist today." }, { "docid": "273884", "title": "", "text": "\"In Australia there are cases for the argument. 1) We have laws against unfair dismissal that do not apply above certain thresholds. Your position is more secure with the lower salary. 2) Tax benefits for families are unfairly structured such that take home pay may actually be less, again due to a threshold. This tends to benefit charities as people need to shed the taxable income if a repayment of benefits would otherwise be triggered. 3) You do not want to \"\"just cross\"\" a tax bracket in a year where levies are being raised for natural disasters or budget shortfall. In this case a raise could be deferred ?\"" }, { "docid": "182856", "title": "", "text": "The good news is that your parent organization is tax exempt and your local organization might be. The national organization even has guidelines and even more details. Regarding donations they have this to say: Please note: The law requires charities to furnish disclosure statements to donors for such quid pro quo donations in excess of $75.00. A quid pro quo contribution is a payment made partly as a contribution and partly for goods or services provided to the donor by the charity. An example of a quid pro quo contribution is when the donor gives a charity $100.00 in consideration for a concert ticket valued at $40.00. In this example, $60.00 would be deductible because the donor’s payment (quid pro quo contribution) exceeds $75.00. The disclosure statement must be furnished even though the deductible amount does not exceed $75.00. Regarding taxes: Leagues included under our group exemption number are responsible for their own tax filings with the I.R.S. Leagues must file Form 990 EZ with Schedule A if gross receipts are in excess of $50,000 but less than $200,000. Similar rules also apply to other youth organizations such as scouts, swim teams, or other youth sports." }, { "docid": "156554", "title": "", "text": "\"This is a great question! I've been an entrepreneur and small business owner for 20+ years and have started small businesses in 3 states that grew into nice income streams for me. I've lived off these businesses for 20+ years, so I know it can be done! First let me start by saying that the rules, regulations, requirements and laws for operating a business (small or large) legally, for the most part, are local laws and regulations. Depending on what your business does, you may have some federal rules to follow, but for the most part, it will be your locality (state, county, city) that determines what you'll have to do to comply and be \"\"legal\"\". Also, though it might be better in some cases to incorporate (and even required in some circumstances), you don't always have to. There are many small businesses (think landscapers, housekeepers, babysitters, etc.) that get income from their \"\"business operations\"\" and do so as \"\"individuals\"\". Of course, everyone has to pay taxes - so as long as you property record your income (and expenses) and properly file your tax returns every year, you are \"\"income tax legal\"\". I won't try to answer the income tax question here, though, as that can be a big question. Also, though you certainly can start a business on your own without hiring lawyers or other professionals (more on that below), when it comes to taxes, I definitely recommend you indeed plan to hire a tax professional (even if it's something like H&R Block or Jackson Hewitt, etc). In some cities, there might even be \"\"free\"\" tax preparation services by certain organizations that want to help the community and these are often available even to small businesses. In general, income taxes can be complicated and the rules are always changing. I've found that most small business owners that try to file their own taxes generally end up paying a lot more taxes than they're required to, in essence, they are overpaying! Running a business (and making a profit) can be hard enough, so on to of that, you don't need to be paying more than you are required to! Also, I am going to assume that since it sounds like it would be a business of one (you), that you won't have a Payroll. That is another area that can be complicated for sure. Ok, with those generics out of the way, let me tackle your questions related to starting and operating a business, since you have the \"\"idea for your business\"\" pretty figured out. Will you have to pay any substantial amount of money to attorneys or advisors or accountants or to register with the government? Not necessarily. Since the rules for operating a business legally vary by your operating location (where you will be providing the service or performing your work), you can certainly research this on your own. It might take a little time, but it's doable if you stick with it. Some resources: The state of Florida (where I live) has an excellent page at: http://www.myflorida.com/taxonomy/business/starting%20a%20business%20in%20florida/ You might not be in Florida, but almost every state will have something similar. What all do I need to do to remain on the right side of the law and the smart side of business? All of the answers above still apply to this question, but here are a few more items to consider: You will want to keep good records of all expenses directly related to the business. If you license some content (stock images) for example, you'll want to document receipts. These are easy usually as you know \"\"directly\"\". If you subscribe to the Apple Developer program (which you'll need to if you intend to sell Apps in the Apple App Stores), the subscription is an expense against your business income, etc. You will want to keep good records of indirect costs. These are not so easy to \"\"figure out\"\" (and where a good accountant will help you when this becomes significant) but these are important and a lot of business owners hurt themselves by not considering these. What do I mean? Well, you need an \"\"office\"\" in order to produce your work, right? You might need a computer, a phone, internet, electricity, heat, etc. all of which allow you to create a \"\"working environment\"\" that allows you to \"\"produce your product\"\". The IRS (and state tax authorities) all provide ways for you to quantify these and \"\"count them\"\" as legitimate business expenses. No, you can't use 100% of your electric bill (since your office might be inside your home, and the entire bill is not \"\"just\"\" for your business) but you are certainly entitled to some part of that bill to count as a business expense. Again, I don't want to get too far down the INCOME TAX rabbit hole, but you still need to keep track of what you spend! You must keep good record of ALL your income. This is especially important when you have money coming in from various sources (a payroll, gifts from friends, business income from clients and/or the App Stores, etc.) Do not just assume that copies of your bank deposits tell the whole story. Bank statements might tell you the amount and date of a deposit, but you don't really know \"\"where\"\" that money came from unless you are tracking it! The good news is that the above record keeping can be quite easy with something like Quicken or QuickBooks (or many many other such popular programs.) You will want to ensure you have the needed licenses (not necessarily required at all for a lot of small businesses, especially home based businesses.) Depending on your business activity, you might want to consider business liability insurance. Again, this will depend on your clients and/or other business entities you'll be dealing with. Some might require you to have some insurance. Will be efforts even be considered a business initially until some amount of money actually starts coming in? This might be a legal / accountant question as to the very specific answer from the POV of the law and taxing authorities. However, consider that not all businesses make any money at all, for a long time, and they definitely \"\"are a business\"\". For instance, Twitter was losing money for a long time (years) and no one would argue they were not a business. Again, deferring to the attorneys/cpas here for the legal answer, the practical answer is that you're performing \"\"some\"\" business activity when you start creating a product and working hard to make it happen! I would consider \"\"acting as\"\" a business regardless! What things do I need to do up-front and what things can I defer to later, especially in light of the fact that it might be several months to a couple years before any substantial income starts coming in? This question's answer could be quite long. There are potentially many items you can defer. However, one I can say is that you might consider deferring incorporation. An individual can perform a business activity and draw income from it legally in a lot of situations. (For tax purposes, this is sometimes referred to as \"\"Schedule-C\"\" income.) I'm not saying incorporation is a bad thing (it can shield you from a lot of issues), but I am saying that it's not necessary on day 1 for a lot of small businesses. Having said that, this too can be easy to do on your own. Many companies offer services so you can incorporate for a few hundred dollars. If you do incorporate, as a small business of one person, I would definitely consider a tax concept called an \"\"S-Corp\"\" to avoid paying double taxes.) But here too, we've gone down the tax rabbit hole again. :-)\"" }, { "docid": "240350", "title": "", "text": "\"I don't know of a situation where rejecting a raise would make sense. Often, one can be in a phaseout of some benefit, so that even though you're in a certain tax bracket, the impact of the next $100 is greater than the bracket rate alone. Taxation of social security benefits is one such anomaly. It can be high, but never over 100%. Update - The Affordable Care Act contains such an anomaly - go to the Kaiser Foundation site, and see the benefit a family of three might receive. A credit for up to $4631 toward their health care insurance cost. But, increase the income to above $78120 Modified Adjusted Gross Income (MAGI) and the benefit drops to zero. The fact that the next dollar of income will cost you $4631 in the lost credit is an example of a step-function in the tax code. I'd still not turn down the raise, but I'd ask that it be deposited to my 401(k). And when reconciling my taxes each April, I'd use an IRA in case I still went over a bit. Consider, it's April, and your MAGI is $80,120. Even if you don't have to cash to deposit to the IRA, you borrow it, from a 24% credit card if need be. Because the $2000 IRA will trigger not just $300 less Federal tax, but a $4631 health care credit. Note - the above example will apply to a limited, specific group who are funding their own health care expense and paying above a certain percent of income. It's not a criticism of ACA, just a mathematical observation appropriate to this question. For those in this situation, a close look at their projected MAGI is in order. Another example - the deduction for college tuition and fees. This is another \"\"step function.\"\" Go a dollar over the threshold, $130K joint, and the deduction drops from $4000 to $2000. You can claim that a $2000 deduction is a difference of 'only' $500 in tax due, but the result is a quick spike in the marginal rate. For those right at this number, it would be worth it to increase their 401(k) deduction to get back under this limit.\"" }, { "docid": "111531", "title": "", "text": "\"From what you've described, your spouse is a non-resident alien for US tax purposes. You have two choices: Use the Nonresident Spouse Treated As Resident election and file as Married Filing Jointly. Since your spouse doesn't have, and doesn't currently qualify for, an SSN, he/she will need to apply for an ITIN together with the tax filing. Note that by becoming a resident alien, your spouse's worldwide income the whole year would be subject to US taxes, and would need to be reported on your joint tax filing, though he/she will be able to use the Foreign Earned Income Exclusion to exclude $100k of her foreign earned income, since he/she will have been out of the US for 330 days in a 12-month period. Or, file as Married Filing Separately. You write \"\"NRA\"\" for your spouse's SSN on your tax return. As a nonresident alien, if your spouse doesn't have any US income, he/she doesn't have to file a US tax return, and doesn't need to apply for an ITIN. Which one is better is up to you to figure out.\"" }, { "docid": "299752", "title": "", "text": "\"Yes. You do have to pay taxes in the UK as well but it depends on how much you have already been taxed in the US. http://taxaid.org.uk/situations/migrant-workernew-to-the-uk/income-from-abroad-arising-basis-vs-remittance-basis Say, you have to pay 20% tax in the UK for your earnings here. You ARE required to pay the same percentage on your foreign income as well. Now, if your \"\"home\"\" country already taxed you at 10% (for the sake of example), then you only need to pay the \"\"remaining\"\" 10% in the UK. However, the tax law in the UK does allow you to choose between \"\"arising\"\" basis and \"\"remittance\"\" basis on your income from the country you are domiciled in. What I have explained above is based on when income \"\"arises.\"\" But the laws are complicated, and you are almost always better off by paying it on \"\"arising\"\" basis.\"" }, { "docid": "436960", "title": "", "text": "They are four quarterly estimated tax payments. The IRS requires that you pay your taxes throughout the year (withholding in a W-2 job). You'll need to estimate how much taxes you think you might be owing and then pay roughly 1/4 at each of the 4 deadlines. From the IRS: How To Figure Estimated Tax To figure your estimated tax, you must figure your expected AGI, taxable income, taxes, deductions, and credits for the year. When figuring your 2011 estimated tax, it may be helpful to use your income, deductions, and credits for 2010 as a starting point. Use your 2010 federal tax return as a guide. You can use Form 1040-ES to figure your estimated tax. Nonresident aliens use Form 1040-ES (NR) to figure estimated tax. You must make adjustments both for changes in your own situation and for recent changes in the tax law. For 2011, there are several changes in the law. Some of these changes are discussed under What's New for 2011 beginning on page 2. For information about these and other changes in the law, visit the IRS website at IRS.gov. The instructions for Form 1040-ES include a worksheet to help you figure your estimated tax. Keep the worksheet for your records. You may find some value from hiring a CPA to help you setup your estimated tax payments and amounts." }, { "docid": "223712", "title": "", "text": "The answer likely depends a bit on which state you are in, but this should be true for most states. I don't know anything about Pennsylvania specifically unfortunately. The Affordable Care Act created the SHOP marketplace, which allows small businesses to effectively form larger groups for group coverage purposes. SHOP stands for Small Business Health Options Program, and requires only one common-law employee on payroll. This would effectively allow you to offer group coverage without having a group. Talk to your tax accountant for more details, as this is still very new and not necessarily well understood. There are some other options, all of which I would highly suggest talking to a tax accountant about as well. HRAs (health reimbursement accounts) allow the employer to set aside pre-tax funds for the employee to use for approved medical expenses; they're often managed by a benefits company (say, Wageworks, Conexis, etc.). That would allow your employee to potentially pick a higher deductible health plan which offers poorer coverage on the individual marketplace (with after-tax dollars) and then supplement with your HRA. There are also the concept of Employer Payment Plans, where the employer reimburses the employee for their insurance premiums, but those are not compatible with the ACA for the most part - although there seems to be a lot of disagreement as to whether it's possible to have something effectively the same work, see for example this page versus this for example." } ]

[ { "docid": "208216", "title": "", "text": "\"Hearing somewhere is a level or two worse than \"\"my friend told me.\"\" You need to do some planning to forecast your full year income and tax bill. In general, you should be filing a quarterly form and tax payment. You'll still reconcile the year with an April filing, but if you are looking to save up to pay a huge bill next year, you are looking at the potential of a penalty for under-withholding. The instructions and payment coupons are available at the IRS site. At this point I'm required to offer the following advice - If you are making enough money that this even concerns you, you should consider starting to save for the future. A Solo-401(k) or IRA, or both. Read more on these two accounts and ask separate questions, if you'd like.\"" } ]

[ { "docid": "406789", "title": "", "text": "\"Littleadv is incorrect because receiving a 1099 means she will be taxed self-employment tax on top of federal income taxes. Your employer will automatically withhold 7.65% of payroll taxes as they pay you each paycheck and then they'll automatically pay the other half of your payroll tax (an additional 7.65%) to bring it to a total of 15.3%. In other words, because your wife is technically self employed, she will owe both sides of payroll tax which is 15.3% of $38k = $5,800 on TOP of your federal income tax (which is the only thing the W-4 is instructing them about what amount to withhold). The huge advantage to a 1099, however, is that she's essentially self-employed which means ALL of the things she needs to run her business are deductible expenses. This includes her car, computer, home office, supplies, sometimes phone, gas, maintenance, travel expenses, sometimes entertainment, etc - which can easily bring her \"\"income\"\" down from $38k to lets say $23k, reducing both her federal income tax AND self-employment tax to apply to $15k less (saving lets say 50% of $15k = $7.5k with federal and self employment because your income is so high). She is actually supposed to pay quarterly taxes to make up for all of this. The easy way to do this is each quarter plug YOUR total salary + bonus and the tax YOU have paid so far (check your paystubs) into TurboTax along with her income so far and all of her expenses. This will give you how much tax you can expect to have left to owe so far--this would be your first quarter. When you calculate your other quarters, do it the exact same way and just subtract what you've already paid so far that year from your total tax liability.\"" }, { "docid": "375423", "title": "", "text": "\"Even though you will meet the physical presence test, you cannot claim the FEIE because your tax home will remain the US. From the IRS: Your tax home is the general area of your main place of business, employment, or post of duty, regardless of where you maintain your family home. Your tax home is the place where you are permanently or indefinitely engaged to work as an employee or self-employed individual. Having a \"\"tax home\"\" in a given location does not necessarily mean that the given location is your residence or domicile for tax purposes. ... You are not considered to have a tax home in a foreign country for any period in which your abode is in the United States. However, your abode is not necessarily in the United States while you are temporarily in the United States. Your abode is also not necessarily in the United States merely because you maintain a dwelling in the United States, whether or not your spouse or dependents use the dwelling. ... The location of your tax home often depends on whether your assignment is temporary or indefinite. If you are temporarily absent from your tax home in the United States on business, you may be able to deduct your away from home expenses (for travel, meals, and lodging) but you would not qualify for the foreign earned income exclusion. If your new work assignment is for an indefinite period, your new place of employment becomes your tax home, and you would not be able to deduct any of the related expenses that you have in the general area of this new work assignment. If your new tax home is in a foreign country and you meet the other requirements, your earnings may qualify for the foreign earned income exclusion. If you expect your employment away from home in a single location to last, and it does last, for 1 year or less, it is temporary unless facts and circumstances indicate otherwise. If you expect it to last for more than 1 year, it is indefinite. If you expect your employment to last for 1 year or less, but at some later date you expect it to last longer than 1 year, it is temporary (in the absence of facts and circumstances indicating otherwise) until your expectation changes. For guidance on how to determine your tax home refer to Revenue Ruling 93-86. Your main place of business is in the US and this will not change, because your business isn't relocating. If you are intending to work remotely while you are abroad, you should get educated on the relevant laws on where you are going. Most countries don't take kindly to unauthorized work being performed by foreign visitors. And yes, even though you aren't generating income or involving anyone in their country, the authorities still well may disapprove of your working. My answer to a very similar question on Expatriates.\"" }, { "docid": "593197", "title": "", "text": "\"Can the companies from USA give job to me (I am from New Zealand)? Job as being employee - may be tricky. This depends on the labor laws in New Zealand, but most likely will trigger \"\"nexus\"\" clause and will force the employer to register in the country, which most won't want to do. Instead you can be hired as a contractor (i.e.: being self-employed, from NZ legal perspective). If so, what are the legal documents i have to provide to the USA for any taxes? If you're employed as a contractor, you'll need to provide form W8-BEN to your US employer on which you'll have to certify your tax status. Unless you're a US citizen/green card holder, you're probably a non-US person for tax purposes, and as such will not be paying any tax in the US as long as you work in New Zealand. If you travel to the US for work, things may become tricky, and tax treaties may be needed. Will I have to pay tax to New Zealand Government? Most likely, as a self-employed. Check how this works locally. As for recommendations, since these are highly subjective opinions that may change over time, they're considered off-topic here. Check on Yelp, Google, or any local NZ professional review site.\"" }, { "docid": "433766", "title": "", "text": "First, request that you complete a tax return. On this tax return, you will complete both the employed and self employed sections. This will give you a total income and tax liability. You will already have paid some tax via PAYE, but you will have to pay additional tax for any other income. For future years there is the option, depending on amount, to collect extra tax through PAYE to cover the other earnings. If it is likely to be the same for the next few years, this may be a better option than paying a lump sum. The tax return is now mostly online, and not too bad if your affairs are otherwise simple. The hardest part will be keeping a good record of your other earnings. Remember that you have to keep these records for seven years in case HMRC ever want to audit them, and it's a good idea to have a separate account for the income, or some other way of easily identifying it." }, { "docid": "468741", "title": "", "text": "If you want to subcontract some of your excess work to somebody else, you better be in business!  While some kinds of employees (e.g. commissioned salespeople) are permitted to deduct some expenses on their income tax, generally only a real business can deduct wages for additional employees, or the cost of services provided by subcontractors. Do you invoice your clients and charge HST (GST)? Or do you tell your clients each pay period how many hours you worked and they compensate you through their payroll system like everybody else that walks through the door? If you're not invoicing and charging HST (GST) (assuming you exceed the threshold, and if you have too much work, you probably do!), then perhaps your clients are treating you as an employee – by default – and withholding taxes, CPP, and EI so they don't get in trouble? After all, Canada Revenue Agency is likely to consider any person providing a service to a company to be an employee unless there is sufficient evidence to the contrary, and when there isn't enough evidence, it's the company paying for the services that would be on the hook for unpaid taxes, CPP, and EI. Carefully consider what form of business you are operating, or were intending to operate. It's essential for your business to be structured appropriately if you want to hire or subcontract. You ought to be either self-employed as a sole proprietor, or perhaps incorporated if it makes more sense to your situation. Next, act accordingly. For instance, it's likely that your business should be taking care of the source deductions, CPP, and EI. In fact, self-employed individuals shouldn't even be paying into EI – an independent contractor wouldn't qualify to make an EI claim if they lost a contract. As an independent, one doesn't have a job, one has a business, and EI doesn't cover the business itself, only the employees that the business deals with at arm's length. As a business owner, you would be considered non-arms-length, and exempt from EI. Growing your business in the way that you are suggesting is an important enough a step that you should seek professional advice in advance. Find a good accountant that deals with self-employed individuals & small businesses and run all this by him. He should be able to guide you accordingly. Find a lawyer, too. A lawyer can guide you on how to properly subcontract others while protecting you and your business. Finally, be mindful of what it is you agreed to in your contract with your client: Do they expect all services to be performed by you, personally? Even if it wasn't written down who exactly would be performing the services, there may be an assumption it's you. Some negotiation may be in order if you want to use subcontractors." }, { "docid": "54333", "title": "", "text": "\"The basic idea is that the average person can't deduct health care costs unless they're really onerous. But a business can, and as a self-employed person, you can deduct those costs from the businesses earnings... as long as the business is really generating enough profit to cover the health insurance costs. That's why most people get their health insurance from their employer, actually. The relevant IRS rules say: \"\"You may be able to deduct premiums paid for medical and dental insurance and qualified long-term care insurance for you, your spouse, and your dependents if you are... A self-employed individual with a net profit reported on Schedule C (Form 1040).\"\" For 2010, thanks to the Small Business Jobs Act of 2010, you can even deduct the premium from your income before deducting the self-employment tax (Source). I'm sure that when you get your tax returns and instructions for 2010 this will all be spelled out.\"" }, { "docid": "308255", "title": "", "text": "Let me first start off by saying that you need to be careful with an S-Corp and defined contribution plans. You might want to consider an LLC or some other entity form, depending on your state and other factors. You should read this entire page on the irs site: S-Corp Retirement Plan FAQ, but here is a small clip: Contributions to a Self-Employed Plan You can’t make contributions to a self-employed retirement plan from your S corporation distributions. Although, as an S corporation shareholder, you receive distributions similar to distributions that a partner receives from a partnership, your shareholder distributions aren’t earned income for retirement plan purposes (see IRC section 1402(a)(2)). Therefore, you also can’t establish a self-employed retirement plan for yourself solely based on being an S corporation shareholder. There are also some issues and cases about reasonable compensation in S-Corp. I recommend you read the IRS site's S Corporation Compensation and Medical Insurance Issues page answers as I see them, but I recommend hiring CPA You should be able to do option B. The limitations are in place for the two different types of contributions: Elective deferrals and Employer nonelective contributions. I am going to make a leap and say your talking about a SEP here, therefore you can't setup one were the employee could contribute (post 1997). If your doing self employee 401k, be careful to not make the contributions yourself. If your wife is employed the by company, here calculation is separate and the company could make a separate contribution for her. The limitation for SEP in 2015 are 25% of employee's compensation or $53,000. Since you will be self employed, you need to calculate your net earnings from self-employment which takes into account the eductible part of your self employment tax and contributions business makes to SEP. Good read on SEPs at IRS site. and take a look at chapter 2 of Publication 560. I hope that helps and I recommend hiring a CPA in your area to help." }, { "docid": "438801", "title": "", "text": "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?" }, { "docid": "210889", "title": "", "text": "Another person, not a shareholder or director, will be treated as when a bank loans you money. You are loaning out money and you are sort of getting interest income out of it or some other benefit, which needs to be put down in you company's annual return. Full source on the HMRC website. But for a shareholder or director is different matter. Check the HMRC source for sure and check with your accountant, if you have one. If you owe your company money You or your company may have to pay tax if you take a director’s loan. Your personal and company tax responsibilities depend on how the loan is settled. You also need to check if you have extra tax responsibilities if: If the loan was more than £10,000 (£5,000 in 2013-14) If you’re a shareholder and director and you owe your company more than £10,000 (£5,000 in 2013 to 2014) at any time in the year, your company must: You must report the loan on your personal Self Assessment tax return. You may have to pay tax on the loan at the official rate of interest. If you paid interest below the official rate If you’re a shareholder and director, your company must: You must report the interest on your personal Self Assessment tax return. You may have to pay tax on the difference between the official rate and the rate you paid." }, { "docid": "227197", "title": "", "text": "You can file a revised W-4 with your employer claiming more allowances than you do now. More allowances means less Federal tax and (if applicable and likely with a separate form) less state tax. This doesn't affect social security and Medicare with holding, though. That being said, US taxes are on a pay-as-you-go system. If the IRS determines that you're claiming more allowances than you're eligible for and not paying the proper taxes throughout the year, they will hit you with an underpayment penalty fee, which would likely negate the benefits of keeping that money in the first place. This is why independent contractors and self-employed people pay quarterly or estimated taxes. Depending on the employer, they may require proof of the allowances for adjustment before they accept the revised W-4." }, { "docid": "449816", "title": "", "text": "Yes, you do. Depending on your country's laws and regulations, since you're not an employee but a self employed, you're likely to be required to file some kind of a tax return with your country's tax authority, and pay the income taxes on the money you earn. You'll have to tell us more about the situation, at least let us know what country you're in, for more information." }, { "docid": "42814", "title": "", "text": "IRS Publication 969 gives all the details about HSA accounts and High Deductible plans: According to your question you are covered by a plan that can have an HSA. There a few points of interest for you: Contributions to an HSA Any eligible individual can contribute to an HSA. For an employee's HSA, the employee, the employee's employer, or both may contribute to the employee's HSA in the same year. For an HSA established by a self-employed (or unemployed) individual, the individual can contribute. Family members or any other person may also make contributions on behalf of an eligible individual. Contributions to an HSA must be made in cash. Contributions of stock or property are not allowed. That means that yes you could make a contribution to the HSA. Or if in the future you were the provider of the insurance you could have a HSA. Limit on Contributions For 2015, if you have self-only HDHP coverage, you can contribute up to $3,350. If you have family HDHP coverage you can contribute up to $6,650. It sounds like you have a family plan. Additional contribution. If you are an eligible individual who is age 55 or older at the end of your tax year, your contribution limit is increased by $1,000. Rules for married people. If either spouse has family HDHP coverage, both spouses are treated as having family HDHP coverage. If each spouse has family coverage under a separate plan, the contribution limit for 2014 is $6,550. You must reduce the limit on contributions, before taking into account any additional contributions, by the amount contributed to both spouses' Archer MSAs. After that reduction, the contribution limit is split equally between the spouses unless you agree on a different division. The rules for married people apply only if both spouses are eligible individuals. If both spouses are 55 or older and not enrolled in Medicare, each spouse's contribution limit is increased by the additional contribution. If both spouses meet the age requirement, the total contributions under family coverage cannot be more than $8,550. Each spouse must make the additional contribution to his or her own HSA. Note: most of the document was written with 2014 numbers, but sometimes they mention 2015 numbers. If both are covered under a single plan it should be funded by the person that has the plan. They may get money from their employer. They may be able to have the employer cover the monthly fee that most HSA administrators charge. The non employee can make contributions to the account but care must be taken to make ure the annual limits aren't exceeded. HSA contributions from the employees paycheck may reduce the social security tax paid by the employee. If the non-employee is self employed you will have to see how the contribution impacts the social security situation for the couple. If the non-employee is 55 or older it can make sense to throw in that extra $1000. The employer may not allow it to come from the paycheck contributions because they wouldn't necessarily know the age of the spouse, they may put a maximum limit based on the age of the employee." }, { "docid": "507476", "title": "", "text": "If you're simply trading with your own money and have not incorporated, then you are not eligible for a solo 401(k). Nerdwallet has an excellent Q&A on the topic here for example. Solo 401(k) is only allowed to be funded with earned income, and capital gains are not earned income. From the IRS page on One Participant 401(k) plans: Elective deferrals up to 100% of compensation (“earned income” in the case of a self-employed individual) up to the annual contribution limit Earned income is defined by the IRS here: But not including: Even more clearly, that page notes: There are two ways to get earned income: You work for someone who pays you or You own or run a business or farm Capital gains are certainly neither of these. Now, I have read several articles suggesting one way to go about using the Solo 401k. All of them suggest that you would need to incorporate in some fashion that would require a Schedule C tax return, though, and be trading with the company's money rather than your own, and then pay yourself a wage from that. In that case you would be eligible for a Solo 401(k), and you might even be better off as a result of all that maneuvering (even though you'll be taxed at a higher rate for any income you do keep, likely, and have to pay self-employment tax)." }, { "docid": "401731", "title": "", "text": "\"Sorry, even if you never file a claim for Employment Insurance (EI), you don't get your premiums back. So, yes, if you paid into EI and never filed a claim, your contributions are, as you put it, \"\"wasted\"\" – insofar that your premiums provided no direct benefit to you. However, your premiums may have provided a benefit to society, perhaps even your previous colleagues. Yet, some would point out that a good chunk of EI premiums are likely wasted on excessive administration of the program itself. That's government. A couple of cases I'm aware of where you may be refunded some of the EI premiums paid are: Meaning, a legal way to avoid paying into the EI system altogether is to run your own business. Of course, you won't be able to file an EI claim if your business evaporates overnight. Other kinds of claims unavailable to those who don't pay into EI include maternity, parental*, and sickness benefits .. although they recently made some changes to permit the self-employed to opt-in for some special benefits. * except in the province of Quebec, where there is a separate Quebec Parental Insurance Plan (QPIP) that also covers the self-employed.\"" }, { "docid": "526158", "title": "", "text": "For the first four months of the year, when you were an employee, the health insurance premiums were paid for with pre-tax money. When you receive your W-2 at the end of the year, the amount in Box 1 of the W-2 will be reduced by the amount you paid for health insurance. You can't deduct it on your tax return because it has already been deducted for you. Now that you are a 1099 independent contractor, you are self-employed and eligible for the self-employed health insurance deduction. However, as you noted, the COBRA premiums are likely not eligible for this deduction, because the policy is in your old employer's name. See this question for details, but keep in mind that there are conflicting answers on that question." }, { "docid": "456526", "title": "", "text": "\"You're confusing between \"\"individual\"\" 401k (they're called \"\"Solo-401k\"\" and are intended for self-employed), and Individual Retirement Account (IRA). You can't open a solo-401k without being self employed. You can open an IRA and roll over money from your old 401k to it. You cannot get a loan from IRA. You can ask the 401k plan manager to reissue the checks to the new trust, shouldn't be a problem. Make sure the checks are issued to the trust, not to you, to avoid withholding and tax complications. This is what is called a \"\"direct\"\" rollover. You might be able to roll the money over to the 401k of your new employer, it is not always allowed and you should check. You can probably then take a loan from that 401k. However, it diminishes the value of your retirement savings and you should only do it if you have no other choice (being evicted from your home, your children are starving, can't pay for your chemo, etc... this kind of disasters). Otherwise, I'd suggest rolling over to IRA, investing in funds with significantly lower fees (Vanguard target retirements funds for example, or index funds/ETF's), and reassessing your spending and budgeting habits so that you won't need loans from your 401k. Re companies - ETrade is nice, consider also Scottrade, TDAmeriTrade, Vanguard, Fidelity, Sharebuilder, and may be others. These are all discount brokers with relatively low fees, but each has its own set of \"\"no-fee\"\" funds.\"" }, { "docid": "434351", "title": "", "text": "You can and are supposed to report self-employment income on Schedule C (or C-EZ if eligible, which a programmer likely is) even when the payer isn't required to give you 1099-MISC (or 1099-K for a payment network now). From there, after deducting permitted expenses, it flows to 1040 (for income tax) and Schedule SE (for self-employment tax). See https://www.irs.gov/individuals/self-employed for some basics and lots of useful links. If this income is large enough your tax on it will be more than $1000, you may need to make quarterly estimated payments (OR if you also have a 'day job' have that employer increase your withholding) to avoid an underpayment penalty. But if this is the first year you have significant self-employment income (or other taxable but unwithheld income like realized capital gains) and your economic/tax situation is otherwise unchanged -- i.e. you have the same (or more) payroll income with the same (or more) withholding -- then there is a 'safe harbor': if your withholding plus estimated payments this year is too low to pay this year's tax but it is enough to pay last year's tax you escape the penalty. (You still need to pay the tax due, of course, so keep the funds available for that.) At the end of the first year when you prepare your return you will see how the numbers work out and can more easily do a good estimate for the following year(s). A single-member LLC or 'S' corp is usually disregarded for tax purposes, although you can elect otherwise, while a (traditional) 'C' corp is more complicated and AIUI out-of-scope for this Stack; see https://www.irs.gov/businesses/small-businesses-self-employed/business-structures for more." }, { "docid": "334603", "title": "", "text": "\"If you have a single member LLC there is no need to separate expenses in this way since it is simply treated as part of the owner's normal tax returns. This is the way I've been operating. Owner of Single-Member LLC If a single-member LLC does not elect to be treated as a corporation, the LLC is a \"\"disregarded entity,\"\" and the LLC's activities should be reflected on its owner's federal tax return. If the owner is an individual, the activities of the LLC will generally be reflected on: Form 1040 Schedule C, Profit or Loss from Business (Sole Proprietorship) (PDF) Form 1040 Schedule E, Supplemental Income or Loss (PDF) Form 1040 Schedule F, Profit or Loss from Farming (PDF) An individual owner of a single-member LLC that operates a trade or business is subject to the tax on net earnings from self employment in the same manner as a sole proprietorship. If the single-member LLC is owned by a corporation or partnership, the LLC should be reflected on its owner's federal tax return as a division of the corporation or partnership. https://www.irs.gov/businesses/small-businesses-self-employed/single-member-limited-liability-companies\"" }, { "docid": "263361", "title": "", "text": "Each way you go is a little bit of a gamble. Owning equity in the company is best in situations where you can trade and sell that equity, or where the dilution of your royalty product would affect your returns, or if you can maintain a certain equity stake without working at the company or if you can hold out on taking equity to reinvest profits for the purposes of growth. The royalty is best in situations where you're getting a portion of the gross, since you get paid as a creditor, no matter how the company is performing, or if you intend to collect royalties after you leave the company. Now for your situation: if your royalties are fluctuating with profit instead of gross and your equity is tied to your continued partnership and not subject to potential growth... then they're pretty much both workarounds for the same thing, you've removed the particular advantages for each way of receiving payment. If the company ever does buy out or go public, how much of your additional X earning a month would you have to then re-invest to get an equity stake? And for royalties, if another developer came aboard, or your company bought another company, how much would this dilute your IP contribution? So, aside from the gambling nature of the issue, I'm not sure your tax calculation is right. You can take equity profit as dividend, as long as you're collecting a sufficient salary (this prevents a business from declaring all profits as a dividend). This would put those profits into a different tax bracket, 15% capital gains. Or if all profits are equitably split, you could take part as salary, part as dividend. As well, as someone who's making active income off of their IP, not passive income, you're supposed to file a Schedule C, not a Schedule E, so your royalties would include your self employment taxes. The schedule E is for royalties where the author isn't actively in the field or actually self employed in that area, or if you own royalties on something you didn't create. Should you keep the royalties then go to another job field or retire then your royalties could go on a Schedule E. Now, a tax advantage may exist on a Schedule C if you can write off certain health and business expenses reducing your income that you can't on a Schedule E, though it'd probably be difficult to write off more than the adjusted self employment cost savings of a Schedule E." } ]

[ { "docid": "319234", "title": "", "text": "\"Turbotax community had a similar question. They claim you just put it into \"\"Office Expense\"\". I never understood why there are so many categories when they are just summed up and subtracted from your income. How can you possibly get in trouble for putting something in a wrong column if the final tax liability doesn't change.\"" } ]

[ { "docid": "214358", "title": "", "text": "Here is a quote from the IRS website on this topic: You may be able to deduct premiums paid for medical and dental insurance and qualified long-term care insurance for yourself, your spouse, and your dependents. The insurance can also cover your child who was under age 27 at the end of 2011, even if the child was not your dependent. A child includes your son, daughter, stepchild, adopted child, or foster child. A foster child is any child placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction. One of the following statements must be true. You were self-employed and had a net profit for the year reported on Schedule C (Form 1040), Profit or Loss From Business; Schedule C-EZ (Form 1040), Net Profit From Business; or Schedule F (Form 1040), Profit or Loss From Farming. You were a partner with net earnings from self-employment for the year reported on Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc., box 14, code A. You used one of the optional methods to figure your net earnings from self-employment on Schedule SE. You received wages in 2011 from an S corporation in which you were a more-than-2% shareholder. Health insurance premiums paid or reimbursed by the S corporation are shown as wages on Form W-2, Wage and Tax Statement. The insurance plan must be established, or considered to be established as discussed in the following bullets, under your business. For self-employed individuals filing a Schedule C, C-EZ, or F, a policy can be either in the name of the business or in the name of the individual. For partners, a policy can be either in the name of the partnership or in the name of the partner. You can either pay the premiums yourself or your partnership can pay them and report the premium amounts on Schedule K-1 (Form 1065) as guaranteed payments to be included in your gross income. However, if the policy is in your name and you pay the premiums yourself, the partnership must reimburse you and report the premium amounts on Schedule K-1 (Form 1065) as guaranteed payments to be included in your gross income. Otherwise, the insurance plan will not be considered to be established under your business. For more-than-2% shareholders, a policy can be either in the name of the S corporation or in the name of the shareholder. You can either pay the premiums yourself or your S corporation can pay them and report the premium amounts on Form W-2 as wages to be included in your gross income. However, if the policy is in your name and you pay the premiums yourself, the S corporation must reimburse you and report the premium amounts on Form W-2 as wages to be included in your gross income. Otherwise, the insurance plan will not be considered to be established under your business. Medicare premiums you voluntarily pay to obtain insurance in your name that is similar to qualifying private health insurance can be used to figure the deduction. If you previously filed returns without using Medicare premiums to figure the deduction, you can file timely amended returns to refigure the deduction. For more information, see Form 1040X, Amended U.S. Individual Income Tax Return. Amounts paid for health insurance coverage from retirement plan distributions that were nontaxable because you are a retired public safety officer cannot be used to figure the deduction. Take the deduction on Form 1040, line 29." }, { "docid": "431230", "title": "", "text": "You don't need a Visa to create or own US property. Your registered agent will be able to take care of most of this, and your new entity will use the registered agent's address where applicable, but you may need your own separate address which can be your office in the UK. If you want privacy then you'll want a separate address, which can also be a PO Box or an address the registered agent also provides. US corporations, especially in Delaware, have a lot more compliance issues than the LLC product. Delaware has a lot more costs for formation and annual reports than most other united states. There are definitely a lot of states to choose from, but more people will have information for Delaware." }, { "docid": "112045", "title": "", "text": "You will need Premier, since it is the first one to include Schedule E. Deluxe used to support Schedule E for investments, but not anymore. Most taxpayers know Schedule E as the schedule used for rentals, but you're going to need it to report your S-Corp income." }, { "docid": "491829", "title": "", "text": "\"On your tax return's Schedule C, Line B, you need to enter the Principal Business or Professional Activity Code that corresponds to your business's activities. There is a list of these 6-digit codes at the end of the Schedule C instructions. (HTML version here, or you can look at the last two pages of the PDF version.) The directions at the top of this list reads: Select the category that best describes your primary business activity (for example, Real Estate). Then select the activity that best identifies the principal source of your sales or receipts (for example, real estate agent). Now find the six-digit code assigned to this activity (for example, 531210, the code for offices of real estate agents and brokers) and enter it on Schedule C or C-EZ, line B. (Emphasis mine.) Although there are a lot of codes, it is entirely possible that you won't find one that exactly matches what you do. The directions say to pick the \"\"best\"\" one that you can. First, pick the broad category. You haven't specified your business, but let's say that you are a freelance programmer (a common occupation for Stack Exchange users). The category you decide is best might be \"\"Professional, Scientific, & Technical Services.\"\" There are several subcategories and activity codes under this, and you might find one that fits your business. However, if you don't, at the end of most categories, there is an \"\"Other\"\" code. For our example, there is code 541990, which is \"\"All other professional, scientific, & technical services.\"\" If you can't even find a broad category that describes your business, there is the last code in the list: 999999, which is for \"\"Unclassified establishments (unable to classify).\"\"\"" }, { "docid": "139383", "title": "", "text": "As I understand it, capital gains from real estate sales in India can be shielded from income tax entirely if the proceeds of the sale are invested in certain specific types of bonds (Rural Highway Contruction Authority of India?) for a period of three years beginning no later than x months (6 months?) after completion of the sale. Perhaps this applies to sales of inherited real estate only and not to commercial property or residential property acquired by purchase since there is no step-up of basis on death as occurs in the US, and in all likelihood, records of the purchase price of the inherited property are lost in the mists of time, and so the basis of the investment is effectively zero (or treated as such by the revenue authorities) The interest paid by these bonds is included in taxable income. Perhaps @Dheer will be willing to correct any mistakes in the above. So, it may be necessary to check whether (a) the interest income from the bonds was declared on Form 1040 Schedule B for each year (b) whether the appropriate boxes (the ones that ask whether the taxpayer has signature authority over foreign accounts etc) were checked on Schedule B or not, (c) whether Form TD 90-22.1 was filed each year or not (this is the FBAR requirement) Note that if the total value of the accounts is less than US $10K during the entire year, then the taxpayer is supposed to check NO on Schedule B and need not file Form TD 90-22.1. Also, there is a separate requirement to file a Form 8938 for certain specific types of investments. There was a two-part article describing these rules in Forbes magazine some time ago, and this is available on-line (Part 1 and Part II) As @superjessi says, the IRS might be lenient if the only issue is not filing the forms in timely fashion, and the taxpayer is voluntarily coming into compliance even though the filing is late. They are likely to be less forgiving if the foreign income was not reported, and still remains unreported even after filing the various forms." }, { "docid": "453961", "title": "", "text": "\"Is it possible if (After getting EIN) I change my LLC type (disregarded entity or C type or S type or corporation or change in number of members) for tax saving ? You marked your question as \"\"real-estate\"\", so I'm guessing you're holding rental properties in your LLC. That means that you will not be able to qualify for S-Corp, only C-Corp treatment. That in turn means that you'll be subject to double taxation and corporate tax rate. I fail to see what tax savings you're expecting in this situation. But yes, you can do it, if you so wish. I suggest you talk to a licensed tax adviser (EA/CPA licensed in your State) before you make any changes, because it will be nearly impossible to reverse the check-the-box election once made (for at least 5 years).\"" }, { "docid": "161667", "title": "", "text": "This kind of questions keeps repeating itself on this site and the answer is generally it doesn't matter. As you said yourself, there are costs either way, and these costs are comparable. Generally, merchant fees differ tremendously between the different kinds of merchants, and while gas stations and video rentals may pay up to 5% and even more, charitable organizations and community services are usually not considered as high fraud risk operation and are charged much lower fees. Either way, paying employees, managing cash/check deposits or paying merchant fees is part of the charity operational expenses. Together with maintaining offices, postal office boxes, office supplies, postage expenses and formal stationary and envelopes needed for physical donations handling. I would guess that if the charity's majority of donations come on-line as credit card/paypal payments - check handling will be more expensive. So I suggest you take the route you consider majority of donors pay - that would be the cheapest for them to handle. I would guess, credit cards being the most convenient - would be the way to go." }, { "docid": "445052", "title": "", "text": "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." }, { "docid": "69306", "title": "", "text": "Most US states have rules that go something like this: You will almost certainly have to pay some registration fees, as noted above. Depending on how you organize, you may or may not need to file a separate tax return for the business. (If you're sole proprietor for tax purposes, then you file on Schedule C on your personal Form 1040.) Whether or not you pay taxes depends on whether you have net income. It's possible that some losses might also be deductible. (Note that you may have to file a return even if you don't have net income - Filing and needing to pay are not the same since your return may indicate no tax due.) In addition, at the state level, you may have to pay additional fees or taxes beyond income tax depending on what you sell and how you sell it. (Sales tax, for example, might come into play as might franchise taxes.) You'll need to check your own state law for that. As always, it could be wise to get professional tax and accounting advice that's tailored to your situation and your state. This is just an outline of some things that you'll need to consider." }, { "docid": "490223", "title": "", "text": "While the OP disses the health insurance coverage offered through his wife's employer as a complete rip-off, one advantage of such coverage is that, if set up right (by the employer), the premiums can be paid for through pre-tax dollars instead of post-tax dollars. On the other hand, Health insurance premiums cannot be deducted on Schedule C by self-employed persons. So the self-employed person has to pay both the employer's share as well as the employee's share of Social Security and Medicare taxes on that money. Health insurance premiums can be deducted on Line 29 of Form 1040 but only for those months during which the Schedule C filer is neither covered nor eligible to be covered by a subsidized health insurance plan maintained by an employer of the self-employed person (whose self-employment might be a sideline) or the self-employed person's spouse. In other words, just having the plan coverage available through the wife's employment, even though one disdains taking it, is sufficient to make a Line 29 deduction impermissible. So, AGI is increased. Health insurance premiums can be deducted on Schedule A but only to the extent that they (together with other medical costs) exceed 10% of AGI. For many people in good health, this means no deduction there either. Thus, when comparing the premiums of health insurance policies, one should pay some attention to the tax issues too. Health insurance through a spouse's employment might not be that bad a deal after all." }, { "docid": "524134", "title": "", "text": "\"No, not on schedule C, better. Its an \"\"above the line\"\" deduction (line 29 on your 1040). Here's the turbo tax article on it. The instructions for this line set certain limitations that you must take into the account, and yes - it is limited to the net profit from the business. One of the following statements must be true. You were self-employed and had a net profit for the year. You were a partner with net earnings from self-employment. You used one of the optional methods to figure your net earnings from self-employment on Schedule SE. You received wages in 2011 from an S corporation in which you were a more-than-2% shareholder. Health insurance premiums paid or reimbursed by the S corporation are shown as wages on Form W-2. The insurance plan must be established under your business. Your personal services must have been a material income-producing factor in the business. If you are filing Schedule C, C-EZ, or F, the policy can be either in your name or in the name of the business.\"" }, { "docid": "325677", "title": "", "text": "Mods decided to leave it here, so I'll summarize some of my answers on this question given @OnStartups. You can find them here, here and here. Your options are : You and your business are one and the same. You report your income and expenses for taxes on a Schedule C (for each sole proprietorship a separate schedule), and taxed at your personal rates. There's no liability protection or legal separation between you and your business, and you don't need to have any bureaucratic overhead of managing an entity. You can use your own bank account and have checks written to you directly. You can register for DBA if you want a store-front name to be different from your own name. Depending on State, can cost a lot or close to nothing. Provides certain liability protection (depending on State, single-member and multi-member LLC's may have different liability protections). You can chose to be taxed as either a sole-proprietor (partnership, for multi-member) or as a corporation. You have to separate your activities, have a separate bank account, and some minimal bureaucracy is required to maintain the entity. Benefits include the limited liability, relatively easy to add partners to the business or sell it as a whole, and provides for separation of your personal and business finances. Drawbacks - bureaucracy, additional fees and taxes (especially in CA), and separation of assets. Corporation is an entirely separate entity from yourself, files its own tax returns, has separate bank accounts and is run by the board of directors (which in some cases may require more than 1 person to be on the board, check your state laws on that). As an officer of the corporation you'll have to pay salary to yourself. S-Corp has the benefit of pass-through taxation, C-Corp doesn't and has double taxation. Benefits - liability protection, can sell shares to investors, legally distinct entity. Disadvantages - have to deal with payroll, additional accounting, significant bureaucracy and additional layer of taxes for C-Corp (double taxation). Selling corporate assets is always a taxable event (although in your case it is probably not of an importance). You have to talk to a lawyer in your state about the options re the liability protection and how to form the entities. The formation process is usually simple and straight forward, but the LLC/Partnership operating agreements and Corporation charters/bylaws must be drafted by a lawyer if you're not going to be the sole owner (even if you are - better get a lawyer draft something for you, its just easier to fix and change things when you're the sole owner). You have to talk to a CPA/EA in your state about the taxes and how the choice of entity affects them." }, { "docid": "369577", "title": "", "text": "If this is something you plan to continue doing it would make sense to create it as it's own business entity and then to get non-profit status eg: 501c3. Otherwise I'm pretty sure you have to think of it as YOU receiving the money as a sole proprietor - and file a couple more tax forms at the end of the year. I think it's a Schedule C. So essentially if you bring in $10,000, then you spend that $10,000 as legit business expenses for your venture your schedule C would show no profit and wouldn't pay taxes on it. BUT, you do have to file that form. Operating this way could have legal implications should something happen and you get sued. Having the proper business entity setup could help in that situation." }, { "docid": "167494", "title": "", "text": "\"I'm not an accountant, and you should probably get the advice of one to be sure about what to do. However, if the business is a sole-proprietorship, you'd complete a Schedule C for the business, and you'd end up with a loss at the end. If the investment you made in the business is considered to be entirely or partially \"\"at risk\"\" per the IRS definition, you'd get to claim all or part of the loss as a reduction in your income. If the business was an LLC, then you're beyond my already limited knowledge. There may be some other considerations based on whether this was really a business vs a hobby, and whether or not you're going to try to continue with the business, or whether you've shut it down. I'm not sure about those parts, but they'd be worth exploring with an accountant.\"" }, { "docid": "75132", "title": "", "text": "Many Web sites and articles warn against buying former rental cars, because people renting these cars often mistreat them. Rental cars are typically driven by people over 25, these are typically people with some financial means (air travel, credit card). Additionally, rental cars are subject to frequent inspection and likely to be on tighter maintenance schedules than many owners would keep. So while some people may drive a rental harder than they would their own car, it's not typical, and not likely to result in some hidden damage that makes a rental less desirable (all else being equal) on the used-car market. Does the fact that they sell the car mean during this time suggest that they know the car's cost of further maintenance or other costs will be higher? Or is there another reason they sell at this time which, has a calculated advantage to them, but which is less than idea statistically for me, the purchaser? Rental companies buy at incredible volumes, as such, some manufacturers have programs where they will buy back used cars from the rental company at a set price and/or time. Other incentives are guaranteed depreciation, wherein the manufacturer will make up the difference if the used vehicle doesn't sell for a set percentage of it's purchase price after a set amount of time. Outside of these incentive programs, rental companies also get substantial volume discounts, and they typically are buying base models which hold value better than their higher-trim counterparts (according to KBB market analyst). So the conventional wisdom about depreciation doesn't really apply. The timing of their sales is primarily based on their purchasing arrangements and their desire to keep an up to date fleet, not on projected maintenance/repair costs. The best you can do with any used-car purchase is to test-drive, get a pre-purchase inspection, and review whatever history is available." }, { "docid": "115815", "title": "", "text": "\"Free, huh? From their Commission and Fee Schedule: So if you literally bought two shares, then the SEC added one penny in fees and FINRA added one penny as a \"\"Trading Activity Fee\"\" Note that there are several other fees on their schedule that may not apply to you. If you had bought 100 shares instead, your total fees would have still been only 2 cents, but you would have lost $4 on the trade. So the fees are minuscule when you start doing larger orders. However, That should not discourage you from experimenting and learning. I'd rather pay 2 cents in fees on a 4 cent loss than 2 cents in fees on a $400 loss. Just chalk it up to the cost of experience.\"" }, { "docid": "402051", "title": "", "text": "(a) 5 funds for $15K is not too many or too few ? A bit high as I'd wonder if you've thought of how you'll rebalance the funds over time so you aren't investing too much in a particular market segment. I'd also question if you know what kinds of fees you may have with those funds as some of Vanguard's index funds had fees if the balance is under $10K that may change how much you'll be paying. From Vanguard's site: We charge a $20 annual account service fee for each Vanguard fund with a balance of less than $10,000 in an account. This fee doesn’t apply if you sign up for account access on Vanguard.com and choose electronic delivery of statements, confirmations, and Vanguard fund reports and prospectuses. This fee also doesn’t apply to members of Flagship®, Voyager Select®, and Voyager Services®. So, if you don't do the delivery this would be an extra $100/year that I wonder if you factored that into things here. (b) Have I diversified my portfolio too much or not enough ? Perhaps I am missing something that would be recommended for the portfolio of this kind with this goal. Both, in my opinion. Too much in the sense that you are looking at Morningstar's style box to pick a fund for this box and that which I'd consider consolidating on one hand yet at the same time I notice that you are sticking purely to US stocks and ignoring international funds. I do think taxes may be something you haven't considered too much as stocks will outgrow most of those funds and trigger capital gains that you don't mention at all. (c) If not my choice of my portfolio, where would you invest $15K under similar circumstances and similar goals. What is the goal here? You state that this is your first cash investment but don't state if this is for retirement, a vacation in 10 years, a house in 7 years or a bunch of other possibilities which is something to consider. If I consider this as retirement investments, I'd like pick 1 or 2 funds known for being tax-efficient that would be where I'd start. So, if a fund goes down 30%, that's OK? Do you have a rebalancing strategy of any kind? Do you realize what taxes you may have even if the fund doesn't necessarily have gains itself? In not stating a goal, I wonder how well do you have a strategy worked out for how you'll sell off these funds down the road at some point as something to ponder." }, { "docid": "313361", "title": "", "text": "\"If this is truly hobby income (you do not intend to operate as a business and don't have a profit motive) then report the income on Line 21 (\"\"other income\"\") of form 1040. If this is a business, then the income and expenses belong on a Schedule C to form 1040. The distinction is in the treatment of profits and losses - your net profits on a business are subject to self-employment tax, while hobby income is not. Net losses on a business are deductible against other income; net losses on a hobby are miscellaneous itemized deductions in the \"\"2%\"\" box on Schedule A. From a tax point of view, selling apps and accepting donations are different. Arguably, donations are gifts; gifts are not taxable income. The hobby/business and income/gift distinctions are tricky. If the dollar amounts are small, nobody (including the IRS) really cares. If you start making or losing a lot of money, you'll want to get a good tax person lined up who can help you decide how to characterize these items of income and expens, how to put them on your return, and how to defend the return on audit if necessary.\"" }, { "docid": "183500", "title": "", "text": "Generally prepaid services should be capitalized over the period prepaid. But if it is up to a year - you can just expense them. As to the technicalities - you can contact Intuit support, but you should be able to put it in the same area where you put all your other business expenses. If you're a sole proprietor - that would be Schedule C." } ]

[ { "docid": "583269", "title": "", "text": "It depends on what you paid for, but usually audit support is an unrelated engagement to the return preparation. If the accountant made a professional mistake, you can request correction and compensation from that accountant, other than that any accountant can help you with audit regardless of who prepared the return. The original accountant would probably be better informed about why you reported each number on the return and how it was calculated, but if you kept all the docs, it can be recalculated again. That's what happens in the audit anyway." } ]

[ { "docid": "475539", "title": "", "text": "\"Nobody can give you a definitive answer. To those who suggest it's expensive at these prices, [I'd point to this chart](http://treo.typepad.com/.a/6a0120a6002285970c014e8c39f2c3970d-850wi) showing the price of gold versus the global money supply over the past decade or so. It's not conclusive, but it's evidence that gold tracks the money supply relatively well. There might be a bit of risk premium baked in that it would shed in a stable economy, but that premium is unknowable. It's also (imo) probably worth the protection it provides. In an inflationary scenario (Euro devaluation) gold will hold its buying power very well. It also fares well in a deflationary environment, just not quite as well as holding physical currency. Note that in such an environment, bank defaults are a big danger: that 50k might only be safe under your mattress (rather than in a fractionally reserved bank account). If you're buying gold, certificates aren't exactly a bad option, although there still exists the counterparty risk of the agent storing your gold, as well as political risk of the nation where it's being held. Buying physical bullion ameliorates these risks, but then you face the problem of protecting it. Safe deposit boxes, a home safe, or burying it in your backyard are all possible options. The merits of each, I'll leave as an exerice to the reader. Foreign currency might be a little bit better than the Euro, but as we've seen in the past year or so, the Swiss Franc has been devalued to match the Euro in the proverbial \"\"race to the bottom\"\". It's probably not much better than another fiat currency. I don't know anything about Norway. Edit: Depending on your time horizon, my personal opinion would be to put no less than 5-10% of your savings in a hard store of value (e.g. gold, silver, platinum). Depending on your risk appetite, you could probably stand to put a lot more into it, especially given the Eurozone turmoil. Of course, as with anything else, your mileage may vary, past performance does not guarantee future results, this is not investment advice, seek professional medical help if you experience an erection lasting longer than four hours.\"" }, { "docid": "186451", "title": "", "text": "There is a lot of depth that can go into this. Depends on how far you want to take this. Think u have the right idea... people who go the extra step get promoted. If prior reporting was very simple, u can build on it over time. I suggest starting with some Known Performance Indicators / KPIs since mgmt can understand those easier than detailed analysis. You can start with identifying metrics that matter. Probably total assets, avg account bal, average customer bal, avg # of accounts per customer, new deposits/withdrawal both gross and avg per account/customer, new/closed accounts. Once metrics are picked gather monthly (or whatever time period) and monitor/review month over month/year over year. PM if u want to discuss more. I have experience in data analytics." }, { "docid": "260575", "title": "", "text": "yes and it does make the review less likely to be genuine. yelp is a community. people make accounts all the time and post one review for marketing or trashing purposes. i find yelp quite useful, but obviously you need to take the reviews with a grain of salt. sorry they rustled your jimmies." }, { "docid": "151261", "title": "", "text": "31 USC § 714 - AUDIT OF FINANCIAL INSTITUTIONS EXAMINATION COUNCIL, FEDERAL RESERVE BOARD, FEDERAL RESERVE BANKS, FEDERAL DEPOSIT INSURANCE CORPORATION, AND OFFICE OF COMPTROLLER OF THE CURRENCY ... snip **Audits of the Board and Federal reserve banks may not include** (1) transactions for or with a foreign central bank, government of a foreign country, or nonprivate international financing organization; (2) deliberations, decisions, or actions on monetary policy matters, including discount window operations, reserves of member banks, securities credit, interest on deposits, and open market operations; (3) transactions made under the direction of the Federal Open Market Committee; or (4) a part of a discussion or communication among or between members of the Board and officers and employees of the Federal Reserve System related to clauses (1)–(3) of this subsection. (c) (1) Except as provided in this subsection, an officer or employee of the Government Accountability Office may not disclose information identifying an open bank, an open bank holding company, or a customer of an open or closed bank or bank holding company. The Comptroller General may disclose information related to the affairs of a closed bank or closed bank holding company identifying a customer of the closed bank or closed bank holding company only if the Comptroller General believes the customer had a controlling influence in the management of the closed bank or closed bank holding company or was related to or affiliated with a person or group having a controlling influence. (2) An officer or employee of the Office may discuss a customer, bank, or bank holding company with an official of an agency and may report an apparent criminal violation to an appropriate law enforcement authority of the United States Government or a State. (3) Except as provided under paragraph (4), an officer or employee of the Government Accountability Office may not disclose to any person outside the Government Accountability Office information obtained in audits or examinations conducted under subsection (e) and maintained as confidential by the Board or the Federal reserve banks. (4) This subsection shall not— (A) authorize an officer or employee of an agency to withhold information from any committee or subcommittee of jurisdiction of Congress, or any member of such committee or subcommittee; or (B) limit any disclosure by the Government Accountability Office to any committee or subcommittee of jurisdiction of Congress, or any member of such committee or subcommittee. ... http://www.law.cornell.edu/uscode/text/31/714 The people here who are under an illusion the federal reserve has any sort of beneficial attributes are deluded, where in reality it is banking on your countries increasing debt and impoverishing you and the nation your fathers conquered with a veil of legitimacy and a tattoo of tyranny since it's inception." }, { "docid": "556220", "title": "", "text": "\"The answer depends on this: If you had to hire someone to do what you are doing in the S-corp, what would you pay them? If you are doing semi-unskilled work part-time, then $20k might be reasonable. If you are a professional working full time, it's too low. Don't forget that, in addition to \"\"billable\"\" work, you are also doing office tasks, such as invoicing and bookkeeping, that the IRS will also want to see you getting paid for. There was an important court ruling on this subject recently: Watson v. Commissioner. Watson owned an S-Corp where he was the sole employee. The S-Corp itself was a 25% owner in a very successful accounting firm that Watson worked through. All of the revenue that Watson generated at the accounting firm was paid to the S-Corp, which then paid Watson through salary and distributions. Watson was paying himself $24k a year in salary and taking over $175k a year in distributions. For comparison, even first-year accountants at the firm were making more than $24k a year in salary. The IRS determined that this salary amount was too low. To determine an appropriate amount for Watson's salary, the IRS did a study of the salaries of peers in firms of the same size as the firm Watson was working with, taking into account that owners of firms earn a higher salary than non-owners. The number that the IRS arrived at was $93k. Watson was allowed to take the rest ($80k+ each year) as distributions. Again, this number was based on a study of the salaries of peers. It was far short of the $200k+ that the S-Corp was pulling in from the accounting firm. Clearly, Watson was paying himself far too low of a salary. But even at this extreme example, where Watson's S-Corp was directly getting all of its revenue from one accounting firm in which Watson was an owner, the IRS still did not conclude that all of the revenue should have been salary and subject to payroll taxes. You should ask an accountant or attorney for advice. They can help you determine an appropriate amount for your salary. Don't be afraid of an audit, but make sure that you can defend your choices if you do get audited. If your choices are based on professional advice, that will help your case. See these articles for more information:\"" }, { "docid": "318260", "title": "", "text": "\"Besides money and time lost, it is pretty clear that most tax advisors are not well versed in non-resident taxes. It seems that their main clients are either US residents or H1B workers (who are required to file as residents). I share your pain on this one. In fact, even for H1B/green card holders or Americans with income/property abroad vast majority of advisers will make mistakes (which may become quite costly). IRS licensing exams for EA/RTRP do not include a single question on non-resident taxation or potential issues, let alone handling treaties. Same goes for the AICPA unified CPA exam (the REG portion of which, in part, deals with taxes). I'm familiar with the recent versions of both exams and I am very disappointed and frustrated by that lack of knowledge requirement in such a crucial area (I am not a licensed tax preparer now though). That said, the issue is very complicated. I went through several advisers until I found the one I can trust to know her stuff, and while at it happened to learn quite a lot about the US tax code (which doesn't make me sleep any better by the least). It is my understanding that preparing a US tax return for a foreign person without a mistake is impossible, but the question is how big is the mistake you're going to make. I had returns prepared by solo working advisers where I found mistakes as ridiculous as arithmetic calculation errors (fired after two seasons), and by big-4 firms where I found mistakes that cost me quite a lot (although by the time I figured that they cost me significant amounts, it was too late to sue or change; fired after 2 seasons as well). As you can see, it is relevant to me as well, and I do not do my own tax returns. I usually ask for the conservative interpretations from my adviser, IRS is very aggressive on enforcement and the penalties, especially on foreigners are draconian (I do not know if it ever went through a judicial review, as I believe some of these penalties are unconstitutional under the 8th amendment, but that's my personal opinion). Bottom line - its hard to find a decent tax adviser, and that's why the good ones are expensive. You get what you pay for. How do I go about locating a CPA/EA who is well versed in non-resident taxes located in the Los Angeles area (Orange County area is not too far away either) These professionals are usually active in large metropolitan areas with a lot of foreigners. You should be able to find decent professionals in LA/OC, SF Bay, Seattle, New York, Boston, and other cities and metropolises attracting foreigners. Also, look for those working in the area of a major university. Specific points: If I find none, can I work with a quaified person who lives in a different state and have him file my taxes on my behalf (electronically or via scans going back and forth) Yes. But that person my have a problem representing you in California (in case you're audited), unless he's an EA (licensed by the Federal government, can practice everywhere) or is licensed as a CPA or Attorney by the State of California. Is there a central registry of such quaified people I can view (preferably with reviews) - akin to \"\"yellow pages\"\" IRS is planning on opening one some time this year, but until then - not really. There are some commercial sites claiming to have that, but they're using the FOIA access to the IRS and states' listings, and may not have updated information. They definitely don't have updated license statuses (or any license statuses) or language/experience information. Wouldn't trust them.\"" }, { "docid": "127978", "title": "", "text": "We have been offering Cisco Certified Internetwork Expert Routing and Switching training from the past few years. The course includes class room coaching as well as practical classes. The institute has well equipped labs and spacious class rooms to enable the students to learn peacefully. The training center is also well equipped with hundreds of books on Cisco certification exams. Students can make best use of these books and classes to prepare for the certification exams." }, { "docid": "564007", "title": "", "text": "Please use the sharing tools found via the email icon at the top of articles. Copying articles to share with others is a breach of FT.com T&amp;Cs and Copyright Policy. Email [email protected] to buy additional rights. Subscribers may share up to 10 or 20 articles per month using the gift article service. 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Dismiss cookie message Accessibility helpSkip to navigationSkip to contentSkip to footer Financial Times MYFT HOME WORLD UK COMPANIES MARKETS OPINION WORK &amp; CAREERS LIFE &amp; ARTS Portfolio My Account HOME WORLD UK COMPANIES MARKETS OPINION WORK &amp; CAREERS LIFE &amp; ARTS MYFT Bank stress tests Add to myFT US banks pass first round of annual stress tests Clean bill of health from Federal Reserve opens door to increased shareholder payouts Read next Week in Review Week in Review, July 1 © AFP Share on Twitter (opens new window) Share on Facebook (opens new window) Share on LinkedIn (opens new window) Email4 Save JUNE 22, 2017 by: Alistair Gray and Ben McLannahan in New York and Barney Jopson in Washington US banks have big enough capital buffers to keep trading through an economic meltdown, regulators said on Thursday, in a finding that improves their chances of boosting payouts to shareholders. In the first round of this year’s stress tests, the Federal Reserve probed how 34 banks would fare in a financial and economic slump in which the unemployment rate doubles and the stock market loses half its value. The central bank calculated that the banking sector would endure $493bn in losses in the simulated downturn. Yet officials concluded that the banks would emerge from the crash “well capitalised”, with cushions of shareholder funding still above the Fed’s minimum required levels. The largely upbeat results augur well for US banks as the Fed prepares to unveil the results of the tests’ second round next week, when investors will learn how much capital they can return through dividends and share buybacks. However, the figures released on Thursday do not foretell what the Fed will say about payouts, not least because regulators can approve or block US banks’ capital plans on qualitative as well as quantitative grounds. Lex Bank stress tests: chilled The once-vital check on the industry’s health is outliving its usefulness UBS analysts estimate that the four biggest by assets — JPMorgan, Bank of America, Citigroup and Wells Fargo — will be able to return a net $59.8bn this year, rising to $72.3bn in 2018. Citi and Morgan Stanley could be among about a dozen banks that will make requests to return more than 100 per cent of their annual earnings to shareholders, according to Goldman Sachs analysts. Despite the positive stress test results, not all investors would be comfortable with such a bonanza. Bill Hines, a fixed-income investment manager at Aberdeen Asset Management in Philadelphia, said the prospect of payouts in excess of profits “does scare us a little bit”. “If the safety blanket is pulled away . . . that may come to the detriment of capital and safety.” Across-the-board passes for the stress-test are “a good thing,” he said, as it shows that banks have rebuilt capital levels substantially since the crisis. “But from a creditor’s standpoint you don’t want to see all the profits go out the door.” While banks have already told the Fed what they propose to do on dividends and buybacks, they are now able to make more conservative payout plans if, based on the first-round results, they think it will reject them in the second round. Related article Regulators back Trump on looser financial rules Officials endorse Volcker rule revamp and bank relief from burden of ‘stress tests’ The regulator’s simulated downturn lasts for nine quarters. Banks’ overall loan losses and declines in capital under the worst crisis scenario were smaller than in last year’s stress tests, Fed officials said. Still, the test found that some banks would come close to breaching regulatory minimums during the meltdown on some metrics. For instance, Morgan Stanley’s “supplementary leverage ratio” — a new measure of financial strength that takes effect in 2018 — would drop as low as 3.8 per cent compared with a required level of 3 per cent. The results also drew attention to banks’ exposure to credit card lending. The Fed found banks would suffer the biggest losses in their card portfolios in the hypothetical crisis. Fed officials said that partly reflected a rapid expansion in the size of banks’ credit card assets and rising delinquency rates in the real world. Copyright The Financial Times Limited 2017. All rights reserved. You may share using our article tools. Please don't copy articles from FT.com and redistribute by email or post to the web. 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The Financial Times and its journalism are subject to a self-regulation regime under the FT Editorial Code of Practice. CloseFinancial Times UK Edition Switch to International Edition Top sections Home World Show more World links UK Show more UK links Companies Show more Companies links Markets Show more Markets links Opinion Show more Opinion links Work &amp; Careers Show more Work &amp; Careers links Life &amp; Arts Show more Life &amp; Arts links Personal Finance Show more Personal Finance links Science Special Reports FT recommends Lex Alphaville EM Squared Lunch with the FT Video Podcasts Blogs News feed Newsletters myFT Portfolio Today's Newspaper (ePaper) Crossword Help Centre My Account Sign Out" }, { "docid": "415670", "title": "", "text": "\"nicodiangelo16.blogspot.com — Tired of falling for business opportunities and franchises that don't live up to their promises? Try our revealing reviews - unique forensic analyses that expose the good, the bad and the ugly This site is financed by you, instead of by biz opp ads and commission links You pay us to be unbiased - so we are \"\"It's the only unbiased info on the market that I've come across.\"\"Carl, Business Opportunity Watch member since 2005 Review of SHARON FUSSELL SOLD DISPATCH NOW GOLD Make money selling books on Amazon Canonbury Publishing Sharon Fussell Sold Dispatch Now Gold Review extract from: August 2009 BUSINESS OPPORTUNITY WATCH Issue No. 30 Buy the Sharon Fussell Sold Dispatch Now Gold Review for £3 or Members Only Area - Free Trial - Read All Reviews Extract from review of Sold Dispatch Now Sharon Fussell: Sharon Fussell says that her Sold Dispatch Now Gold business \"\"is as simple as buying books for pennies from easy-to-find sources - and then reselling them on for huge profits\"\". She says you can make £200 to £300 every week with Sold Dispatch Now Gold and \"\"you can set it up in just 10 minutes!\"\", it's not hard work and you don't need computer experience. You don't need a lot of books either - according to Sharon Fussell, a stock of 500-600 books means that you can sell 25 per week and make £6,000 a year. You just buy the books from easy-to-find sources (she tells you how) and list them for sale on Amazon. Sharon Fussell has been following the Sold Dispatch Now Gold system for three years and she now has a turnover of £26,741 a year. She's given up her old day job. The Sold Dispatch Now Gold manual costs £77 and it does come with a CD Rom demonstration of how Sharon Fussell operates her business and it includes her email support and a 28-day no-quibble money back guarantee. Is it really that easy to make £200 to £300 a week? We sent the company a number of questions ........ (review continues) Discover the truth about Sharon Fussell's Sold Dispatch Now.\"" }, { "docid": "346535", "title": "", "text": "\"In studying the great \"\"successes\"\" in business, it's clear that those who do the best have unlimited creative and business ideas, not just one idea, but many ideas all day long everyday. No matter what you decide for your current idea, document (write down) your process of each step that you took from idea to inception and track one or two key metrics alongside, so your list would look like this: 1. Socialize idea, goal revenue $0, total cost $0, time 26 hours 2. monitor money invested, costs, and hours of your time 3. Brainstorm: What's the quickest way to have one paying client 4. How will I track my customers? 5. How will I connect and communicate with my customers? 6. And on and on. From having an idea to implementation to even making money or a profit is quite simple, straightforward, and any book, mentor or online free content can show you how. What is \"\"hard\"\" is maintaining motivation, stamina, and creativity for when REAL challenges come up, because they will! Competition swoops in, in a way you that you (and the sage commenters at Reddit) couldn't have predicted, you are audited by the IRS and then owe way more in taxes than you expected from four years ago, you are sued for a small claims or worse, or you simply get bored or inspiration strikes in your heart on another great idea. Problems like this require REAL and thoughtful \"\"creativity and implementation\"\" on demand, all day, everyday. This is what starting a business is really about. Tracking your steps means that you can easily and quickly review what you've done and backtrack or try another idea instead of wallowing in mistakes, missteps, or hard problems. It's really much harder than it sounds, but once you can invent more ideas to solve a problem than there are problems, you can overcome most challenges. The framework is that, you want to start a business because it serves your customers, brings them enough value and delight to pay you, and you have a way to make a living yourself and/or sell eventually or have some \"\"exit strategy.\"\" You want an exit strategy so that your business doesn't become a poor paying \"\"job\"\" that you're a slave to. Because it does, and if it does, a job is way easier and makes you more money. Write down each step of your business building process, track your costs, revenue, and time, and have fun. Then, you have enough energy to \"\"pivot\"\" or change your ideas because you've set up a repeatable, improvable, process to run your next idea through with modifications along the way. You keep retrying your process for your ideas until your lifestyle is paid for (your salary) or something even greater monetarily.\"" }, { "docid": "268257", "title": "", "text": "For purposes of the EIN the address is largely inconsequential. The IRS cannot (read: won't) recover the EIN if you fail to write it down after the website generates it for you. On your actual tax form the address is more consequential, and this is more so a question of consistency than anything. But an entity can purchase property anywhere and have a different address subsequent years. Paying the actual taxes means more than the semantical inconsistencies. The whole purpose of separate accounts is to make an audit easier, so even if someone imagines that some action (such as address ambiguity) automatically triggers an audit, all your earnings/purchases are not intermingled with personal stuff, which just streamlines the audit process. Consequences (or lack thereof) aside, physical means where physical property is. So if you have an actual mailing address in your state, you should go with that. Obviously, this depends on what arrangement you have with your registered agent, if all addresses are in Wyoming then use the Wyoming address and let the Registered Agent forward all your mail to you. Don't forget your $50 annual report in Wyoming ;) How did you open a business paypal without an EIN? Business bank accounts? Hm... this is for liability purposes..." }, { "docid": "332855", "title": "", "text": "\"Regardless of the source of the software (though certainly good to know), there are practical limits to the IRS 1040EZ form. This simplified tax form is not appropriate for use once you reach a certain level of income because it only allows for the \"\"standard\"\" deduction - no itemization. The first year I passed that level, I was panicked because I thought I suddenly owed thousands. Switching to 1040A (aka the short form) and using even the basic itemized deductions showed that the IRS owed me a refund instead. I don't know where that level is for tax year 2015 but as you approach $62k, the simplified form is less-and-less appropriate. It would make sense, given some of the great information in the other answers, that the free offering is only for 1040EZ. That's certainly been true for other \"\"free\"\" software in the past.\"" }, { "docid": "258997", "title": "", "text": "\"The lottery is not a scam. It really does what it says it does, the odds are just tremendously not in your favor. MLMs promise a business opportunity where there isn't one and the only real money comes from signing up new people. I've been dragged to a number of these things. The last one was maybe ten years ago, it was a ACN meeting at a co-worker's house. The invitation was vague, a number of other co-workers were going, and there was free food. I immediately knew what it was when they started the presentation. I listened as they went on about the untold riches and working for yourself and all of the usual crap. Then they told us that we could ask questions. Anything we wanted. Well, OK. Thing is, they don't get many people showing up to these things who are both lawyers and accountants. Like me. I started asking for financial documents, tax returns, verified audits, the form of the contract between ACN and you, and a few federal regulations. That did not go over so well. I pointed out that it was all standard due diligence. I added that I would be happy to sign a non-disclosure agreement before showing me the books. As you might guess, they didn't have any real answers and the guy doing the presentation looked like he wanted to punch me in the face. Nobody signed up. If you end up in at one of these meetings, start asking questions about the books. You want to see them. You want to see tax returns. You want to see audits from CPA firms. Offer to sign a non-disclosure agreement. These are all very normal things in the business world. Say you had a factory that makes widgets and you decide to sell the factory for $100,000. I'm an interested buyer. I would ask to see your books, returns and a statement from your CPA verifying these things. A non-disclosure agreement is common and totally fair. That way, I could verify the financials. If someone wants you to sign up for a MLM, ask to see the books. You'll shut it down almost immediately. If they get upset, use the phrase \"\"due diligence\"\" and say that it is standard business procedure. Because it is.\"" }, { "docid": "485318", "title": "", "text": "As a recent college grad who switched to his own car insurance, many of the things I did myself are reflected here. The #1 thing I did was find out what coverages I had, what coverages some friends of mine had (car enthusiasts mostly - they're the most informed on this stuff), and then figured out what kind of coverages I wanted. From there, I went around getting quotes from anyone and everyone and eventually built out a sizeable spreadsheet that made it obvious which company was going to offer me the best rate at a given coverage level. Something else to remember - not all insurance companies look at past accidents and violations (speeding, etc) the same. In my search, I found some have a 3-year scope on accidents and violations, while others were as much as 5 years. So, if your driving record isn't a shining example (mine isn't perfect), you could potentially save money by considering insurance through a company that will see fewer violations/incidents than another because of the size of their scope. I ended up saving $25/mo by choosing a company that had a 3-year scope, which was on the cusp of when my last violation/incident occurred. Insurance companies will also give out discounts for younger drivers based on GPA average. If you have kids and they maintain a high GPA, you might be able to get a discount there. Not all companies offer it, so if they do it's worth finding out how much it is" }, { "docid": "306908", "title": "", "text": "As others have pointed out, post-tax dollars are what you'll use. Just as a quick note, as you'll be using post-tax dollars; in the past, I've refused to take contractor plans because they almost always are inferior to what I've been able to get off the private exchange ehealthinsurance. A few people have written excellent articles on Get Rich Slowly here and here about them in detail if you want more information. Generally, contractors (and sometimes employees) are offered a few plans (3-4), and this health exchange gives you a little more freedom to pick your plan, which in your situation may help. It isn't always cheaper, but depending on your needs, you may obtain a better deal. Forgot to add this: this option has also made switching jobs easy as well since I don't have to pay COBRA. While it depends on the situation, this can sometimes come out significantly cheaper. For instance, if I were to take the employer health plan next year, I would lose ~$450 a month, whereas the private exchange option is ~$300. But, if I were to switch jobs, decide to opt for self-employment, or a layoff, the COBRA would be even higher than ~$450." }, { "docid": "339570", "title": "", "text": "&gt;Dollars to donuts... I'd be willing to bet you have a pretty good boss there. ...and she (my boss) left 6 months later for a better job. Now I report to a clueless idiot. He has no experience in our industry but was hired because he was part of the good old boys referral network the CEO has going on. He spent his time flipping companies for living prior to that. Now the veneer is starting to come crashing down, despite me trying to make my boss look good for these past ~2 years. He's desperately trying to find a corporate controller (interviewing) to dump his mess onto as I type this. People external to the department are starting to gather he's all buzz words and power points and no substance. We were bought out by a bigger company recently and he can't hide behind his usual bullshit. My new boss dropped the bombshell today that the girl who was in my position 3 years ago (but quit and took a managers job at a rival company through connections) in now a candidate for the corporate controller position. His reasoning hinged almost completely on the justification that she is already well like here and is familiar with the company. The girl doesn't even have a college degree. Let alone a masters. She left a tax mess on her way out that I've spent the last 3 years trying to fix from an administrative standpoint. Apparently the guy who kept my boss from looking like a total idiot (me) isn't worth mentoring up to the next level. But some random person with no college degree (but connections), and holes in her understanding of our line of work is a serious candidate for a promotion. It's amazing to watch the bad decisions compound themselves into bigger and bigger problems. My boss inherited a relatively well oiled accounting department and turned it into an audit nightmare. He doesn't know half of what goes on, on a daily basis but feels the need to change processes arbitrarily without understanding WHY we do what we do and how it relates to our industry and external compliance, let alone GAAP. It's quite apparent this ship is sinking. I'm trying my best to get off it now as of today. Trying to promote someone with less work experience and education over me was the last straw. The only good decision he made was realizing this girl's resume is a bunch of titles with no substance and realizing she wasn't a serious candidate, an hour after pissing me off calling me into a meeting to announce the joyous news." }, { "docid": "319954", "title": "", "text": "I am using ING for my emergency savings, but sometime last year I discovered SmartyPig. As of 4/24/2010 they offer 2.1%, which is even better than the 1 year CDs at most banks. I've switched two small accounts to SmartyPig and plan to switch my emergency savings. Their accounts are geared around monthly contributions, but you don't have to use that feature." }, { "docid": "288617", "title": "", "text": "You have defined net profit to include all income and, presumably, expenses. Specifically, you are including income from other sources and are including finance costs and tax expense. For the quarter ended June 30, 2015, the net profit, by your definition, is 12.58. This is given on line 9 of the PDF. You ask how you can review this information. You cannot, given only the PDF you linked to. Note that the numbers have not been audited so it is the case that no trusted third party has yet reviewed it and signed off that the information is accurate." }, { "docid": "494116", "title": "", "text": "Suing is a legitimate option as well as screening your calls but here's another idea which has personally worked and relates to the collections I did for awhile. Talk with the collector. Outstanding debt gets sold many times and each time a new collector gets their hands on an account they do their due diligence which means calling every single number multiple times. Collectors a looking for consumers who actively evade collections calls for years. My recommendation is to use logic and explain the situation. Give your first name and describe when you received the phone number and then ask a simple question. When in the last 3 1/2 years have you or any collector had a successful hit from this number. They'll respond never in 3 1/2 years. The collector notes the account for themselves and future collectors. Debt collectors are about about making money, not wasting time and they do review all notes pertaining to an account. Will it work? Maybe not but hopefully it will stop the calls with a short conversation. Good luck." } ]

[ { "docid": "102266", "title": "", "text": "On $4K/mo gross about $1000/mo can go to the mortgage, and at today's rates, that's about $200K of mortgage the bank might lend you. Income is qualified based on gross, not net, so if $48,000/yr is wrong, please scale my guesstimate down a bit. In the end, today's rates allow a mortgage of nearly 4X one's gross income. This is too high, in my opinion. I'm answering what the bank would approve you at, not what I think is wise. Wise, in my opinion is 2.5-3X one's income, tops." } ]

[ { "docid": "314163", "title": "", "text": "Advantages of buying: With every mortgage payment you build equity, while with rent, once you sign the check the money is gone. Eventually you will own the house and can live there for free. You can redecorate or remodel to your own liking, rather than being stuck with what the landlord decides is attractive, cost-effective, etc. Here in the U.S. there are tax breaks for homeowners. I'm not sure if that's true in U.K. Advantages of renting: If you decide to move, you may be stuck paying out a lease, but the financial penalty is small. With a house, you may find it difficult to sell. You may be stuck accepting a big loss or having to pay a mortgage on the empty house while you are also paying for your new place. When there are maintenance issues, you call the landlord and it's up to him to fix it. You don't have to come up with the money to pay for repairs. You usually have less maintenance work to do: with a house you have to mow the lawn, clear snow from the driveway, etc. With a rental, usually the landlord does that for you. (Not always, depends on type of rental, but.) You can often buy a house for less than it would cost to rent an equivalent property, but this can be misleading. When you buy, you have to pay property taxes and pay for maintenance; when you rent, these things are included in the rent. How expensive a house you can afford to buy is not a question that can be answered objectively. Banks have formulas that limit how much they will loan you, but in my experience that's always been a rather high upper bound, much more than I would actually be comfortable borrowing. The biggest issue really is, How important is it to you to have a nice house? If your life-long dream is to have a big, luxurious, expensive house, then maybe it's worth it to you to pour every spare penny you have into the mortgage. Other people might prefer to spend less on their house so that they have spare cash for a nice car, concert tickets, video games, cocaine, whatever. Bear in mind that if you get a mortgage that you can just barely afford, what do you do if something goes wrong and you can't afford it any more? What if you lose your job and have to take a lower-paying job? What if some disaster strikes and you have some other huge expense? Etc. On the flip side, the burden of a mortgage usually goes down over time. Most people find that their incomes go up over time, between inflation and growing experience. But the amount of a mortgage is fixed, or if it varies it varies with interest rates, probably bouncing up and down rather than going steadily up like inflation. So it's likely -- not at all certain, but likely -- that if you can just barely afford the payment now, that in 5 or 10 years it won't be as big a burden." }, { "docid": "60981", "title": "", "text": "So if I understand your plan right, this will be your situation after the house is bought: Total Debt: 645,000 Here's what I would do: Wait until your house sells before buying a new one. That way you can take the equity from that sale and apply it towards the down payment rather than taking a loan on your retirement account. If something happens and your house doesn't sell for as mush as you think it will, you'll lose out on the gains from the amount you borrow, which will more than offset the interest you are paying yourself. AT WORST, pay off the 401(k) loan the instant your sale closes. Take as much of the remaining equity as you can and start paying down student loans. There are several reasons why they are a higher priority than a mortgage - some are mathematical, some are not. Should I look to pay off student loans sooner (even if I refi at a lower rate of 3.5% or so), or the mortgage earlier ... My thoughts are that the student loans follow me for life, but I can always sell and buy another home So you want this baggage for the rest of your life? How liberating will it be when you get that off your back? How much investing are you missing out on because of student loan payments? What happens if you get lose your license? What if you become disabled? Student loans are not bankruptable, but you can always sell the asset behind a mortgage or car loan. They are worse than credit card debt in that sense. You have no tangible asset behind it and no option for forgiveness (unless you decide to practice in a high-need area, but I don't get the sense that that's your path). The difference in interest is generally only a few payment' worth over 15 years. Is the interest amortized the same as a 15 year if I pay a 30 year mortgage in 15 years? Yes, however the temptation to just pay it off over 30 years is still there. How often will you decide that a bigger car payment, or a vacation, or something else is more important? With a 15-year note you lock in a plan and stick to it. Some other options:" }, { "docid": "574616", "title": "", "text": "\"There are a few factors at work here, supply and demand being the main one. The Office for National Statistics has some good information: http://visual.ons.gov.uk/uk-perspectives-housing-and-home-ownership-in-the-uk/ Supply has historically struggled to compete with demand in the UK and this situation has been exacerpated since the 1980s when Margaret Thatcher was Prime Minister. She set up a variety of schemes to encourage people to own their own home, such as tax relief (MIRAS) and since then home ownership in the UK has increased dramatically. The then conservative government also set up the \"\"right to buy\"\" scheme (in 1980) that allowed council tenants to purchase their council houses at a discounted rate. The effect of this was to increase the number of home owners whilst reducing the amount of housing available for councils to rent to new tenants. Anecdotal evidence (I can't find a documented source to back this up) suggests that councils did not build sufficient new homes to replace those purchased by their ex-tenants. The population of the UK has also increased, by around 10 million since 1980 (around 20%) and this has pushed up demand for housing. House building in the UK has not kept pace with these factors that has led to a shortage of supply that has pushed up prices. http://www.ons.gov.uk/ons/rel/pop-estimate/population-estimates-for-uk--england-and-wales--scotland-and-northern-ireland/2013/sty-population-changes.html There's another factor at play here as well. If you go back to the 1970s around 53% of women would go out to work but in 2013 this figure increased to 67% as it became more common for households to have double incomes. This extra supply of cash also pushed up house prices. http://www.ons.gov.uk/ons/dcp171776_328352.pdf Your question regards a debt based monetary system is not entirely clear, but there are limitations put onto how much money people can borrow that are potentially limiting how much house prices can rise by. Today most lenders are more conservative in how much they will lend but this wasn't the case in the mid 2000s when house prices rose very quickly. Lenders are more cautious today after the crash of the late 2000s, but things are begining to relax again and they are starting to lend more which could in turn lead to further house price rises in line with what was seen in the 2000s. Recessions have coincided with house prices falling back or at least being stable. In the 1980s house prices trebled from 1980 to 1988 but then fell back a little as the recession hit, before starting to rise again in 1997. This rise was sustained until 2008 during which time prices trebled again. Based on this you could assume prices will treble again as we come out of the recession, as long as this is sustained for 8 years or so. However, as the potential for more households to become double income is reduced (high female employment already) and wages are unlikely to raise that quickly, this may not be realistic, unless the mortgage lenders become extremely lax, to the point of reckless! To answer your other question, about the affordability of housing, this will be based on the level of wages in the UK and how strict or lax the lenders are, also taking into effect the availability of housing for purchase. If wages rise, house prices will rise, if lenders are willing to lend more money, house prices will rise and if demand continues to outrstip supply, prices will rise. None of the major UK political parties are likely to solve the problems of population growth and not enough houses being built so it is likely prices will rise but you could argue that they are not far off a peak based on current wages and lenders attitudes. If the UK economy continues to recover from the recession, it is possible they will fuel another housing boom by lending ever increasing salary multiples as happened in the 2000s, unless there is government intervention, ie regulation of the lenders.\"" }, { "docid": "354655", "title": "", "text": "The biggest red flag is the fact that your parents may lose their house. There are multiple parts of the decision. The red flag comes in because you are stretching your finances to the max to afford the house you are interested in. Buying down the interest rate makes some sense depending on how long you plan on staying, but not a a way to afford house X. Of course a bigger down payment will also influence the size of the house. You are also buying something in case your parents need a place to live. What happens if that never occurs? You now have something bigger than you need. You are mixing investments and housing. There is no guarantee that you will even break-even on the house as a investment. It can take several years to make back the closing costs involved in buying and selling a house, based solely on stable price and your monthly payments. If the price drops you might never make the money back. You might be better off renting what you need now or waiting until the current house is lost and then renting what you need then." }, { "docid": "546528", "title": "", "text": "\"Based on what you asked and your various comments on other answers, this is the first time that you will be making an offer to buy a house, and it seems that the seller is not using a real-estate agent to sell the house, that is, it is what is called a FSBO (for sale by owner) property (and you can learn a lot of about the seller's perspective by visiting fsbo.com). On the other hand, you are a FTB (first-time buyer) and I strongly recommend that you find out about the purchase process by Googling for \"\"first-time home buyer\"\" and reading some of the articles there. But most important, I urge you DO NOT make a written offer to purchase the property until you understand a lot more than you currently do, and a lot more than all the answers here are telling you about making an offer to buy this property. Even when you feel absolutely confident that you understand everything, hire a real-estate lawyer or a real-estate agent to write the actual offer itself (the agent might well use a standard purchase offer form that his company uses, or the State mandates, and just fill in the blanks). Yes, you will need to pay a fee to these people but it is very important for your own protection, and so don't just wing it when making an offer to purchase. As to how much you should offer, it depends on how much you can afford to pay. I will ignore the possibility that you are rich enough that you can pay cash for the purchase and assume that you will, like most people, be needing to get a mortgage loan to buy the house. Most banks prefer not to lend more than 80% of the appraised value of the house, with the balance of the purchase price coming from your personal funds. They will in some cases, loan more than 80% but will usually charge higher interest rate on the loan, require you to pay mortgage insurance, etc. Now, the appraised value is not determined until the bank sends its own appraiser to look at the property, and this does not happen until your bid has been accepted by the seller. What if your bid (say $500K) is much larger than the appraised value $400K on which the bank is willing to lend you only $320K ? Well, you can still proceed with the deal if you have $180K available to make the pay the rest. Or, you can let the deal fall apart if you have made a properly written offer that contains the usual contingency clause that you will be applying for a mortgage of $400K at rate not to exceed x% and that if you can't get a mortgage commitment within y days, the deal is off. Absent such a clause, you will lose the earnest money that you put into escrow for failure to follow through with the contract to purchase for $500K. Making an offer in the same ballpark as the market value lessens the chances of having the deal fall through. Note also that even if the appraised value is $500K, the bank might refuse to lend you $400K if your loan application and credit report suggest that you will have difficulty making the payments on a $400K mortgage. It is a good idea to get a pre-approval from a lender saying that based on the financial information that you have provided, you will likely be approved for a mortgage of $Z (that is, the bank thinks that you can afford the payments on a mortgage of as much as $Z). That way, you have some feel for how much house you can afford, and that should affect what kinds of property you should be bidding on.\"" }, { "docid": "59147", "title": "", "text": "Answers to this your question break down along a few lines regarding opportunity costs of tying up a significant chunk of your salary and assets in one piece of property, as opposed to other things you'd like to do with your life. The 30 year standard mortgage was invented in the 30's as part of FDR's new deal to make housing affordable to more people, while relieving the strain on the market of foreclosed homes from ~10 year interest only balloon mortgages (sound familiar?). The 30 year term tends to follow the career of the average American of that era, allowing them to pay the house off and live out the remainder of their lives there at a lower cost. Houses are depreciating assets because they wear out over time. Their greatest investment value is a place to live. The appreciation on a home comes from the real estate it sits on and the community the property is located in. Value is determined by desirability of the house and community in their current state, and the supply of property in the area. This value can only be extracted when you sell the home. This partially answers your last question noting that you shouldn't buy a really expensive building for investment value. We've learned in recent years that there are no long term guarantees of property value either, because land and communities can decrease in value due to unemployment, over supply, crime, pollution, etc. Only buy as much home as you will need in the next decade or so, in a place that you will like living over that time period, and don't consider it much of an investment. I will tell you to get a fifteen year fixed rate mortgage since it's readily available at lower rates and has a significantly lower total purchase price than the standard 30 years. The monthly payment difference isn't that great, and anyone who looks at the monthly payment as opposed to the total costs, your priorities and the opportunity costs shouldn't be trusted for financial advice. I don't like debt. There are psychological benefits to being free from the bondage and drain of a long term mortgage on your finances. The biggest argument for paying off your home quickly is freedom to pursue other desires with all of your salary and the assets you have available to you. Some financial advisers will tell you to keep your mortgage costs under 25% of your income, so that you can actually live off the money you make. I would also recommend paying at least enough into your 401k to get the company match and fully funding your Roth IRA. I'd also have an emergency fund to cover at least 6 months of expenses, including this mortgage in case you lose your job. A 15 or 20 year mortgage will give you breathing room to take care of these other priorities, and you can overpay on almost any mortgage to decrease the principal and finish in a shorter time period (make sure to get a mortgage that allows prepayment) . More financially savvy people may tell you to take the 30 year mortgage and invest the difference. Especially with mortgage rates around 4%, this is a very cheap way to increase your purchasing power and total assets. Most people lack the investment prowess and self discipline to make this plan pay off. There are even fewer guarantees regarding markets and investments than property. This also is a way of diversifying your total assets to protect against loss of value in your home. This approach has backfired for thousands of people who are underwater on their homes. This problem is often compounded by job loss forcing you to move, or increasing your commute, making your home less desirable for you. Some people will tell you to maintain the mortgage for the tax credit. This fails a basic math test since you only get about a quarter of the money (depending on your tax rate) that you are paying in interest back from the government. The rest of the money goes to bank at no gain to you. This approach is basically a taxpayer subsidized decrease of your 4% interest payment to a 3% interest payment (assuming you have ~ $5000 in other deductions), and only pays off if you can successfully invest the money at a rate somewhat greater than 3%." }, { "docid": "470388", "title": "", "text": "The rent versus buy question is a deeply personal one in which your personal desires for a living space need to be carefully combined with what makes economic sense. Do you want your own place with all the joys of having it be yours and all the pains of having to handle all the maintenance and be the one ultimately responsible? Have you tried living for a few months putting aside the amount required for not only a mortgage payment but the taxes and insurance on a house/condo in your price range to see if you can really afford it? You can use a real estate website such as trulia to see the assessments of some for sale homes and figure out tax values. The average home insurance in the US is around $900/year if I remember right - more for homes that are more expensive and less for less expensive ones, with flooding and other hazards as a factor. Make sure you can afford to pay for all these items. From a financial perspective realize that you'll always be spending money on your living space. Even if you pay for a house with cash you will be paying property tax and maintenance and would be wise to continue paying for insurance. The value of the house at that point is, as contributor fennec often says, the rent you aren't paying. I personally don't recommend trying to time the market. You can't predict the future - will real estate in your area be a double dip or has it bottomed and is it going up? What you can do is buy a home only when you are sure that you can deal with its relative lack of liquidity by staying there for a long time. Five years is usually a reasonable minimum. There is a way that I recommend figuring out if it is likely bad financial decision to buy, and that's by looking at a financial comparison of renting versus buying. In some cases even with the bursting of the bubble it is still a bad deal to buy. DC went from renting being more cost effective to buying, but San Francisco is one area where buying is still not necessarily the best choice. To figure out what the case is for your area, look at the New York Times rent versus buy calculator. Find a home for rent on craigslist similar to what you'd look to buy. Find a home for sale on one of the MLS aggregator sites that represents something you think you'd like. Plug in the numbers. Figure out how many years you'd have to stay in your purchase for it to be a good deal. In the likely event that the calculator says buy, start saving if that's what you really want. You're never going to be able to absolutely guarantee that you won't be upside down. What you can control is getting as much principal in that house as you can. The more you have, the less likely you will be upside down. Build a down payment now, reap the rewards later." }, { "docid": "341348", "title": "", "text": "This is how its done I am a certain french bank, aka sg I have some PIIGS debt, I can use this as collateral at face value (100), with the ECB in order to secure cash... Lets say I use 1mn of BTPS (italian debt), this has an MTM (clean) of 88. I use that 88 to get me 100 (1mn) of cash, from which I buy another BTPS, for (88), of which I use as collateral pledged to the ECB to get this, get another BTPS. So now I am long 3 BTPS, all pledged to the ECB and I have 36 in cash and I owe the ECB 300+r in 3 years. remember the yield on my shitty btps is a lot higher than the interest on the deposits. Secondly, I have three years, so I don't need to give a fuck about the mark to market on the notes (I could even buy a 2 year and n month note maturing just before). So I can make some free yield at the ECB's expense. Also this frees up 36 in cash, of which I can use to meet short term funding instead of tapping the bond market, this trade can be made infinitely, although the ECB might catch on. You can view it as getting a mortgage on your house to buy another house, then mortgaging house #2 to buy house #3, and so on." }, { "docid": "118653", "title": "", "text": "As user14469 mentions you would have to decide what type of properties you would like to invest in. Are you after negatively geared properties that may have higher long term growth potential (usually within 15 to 20km from major cities), or after positive cash-flow properties which may have a lower long term growth potential (usually located more than 20km from major cities). With negative geared properties your rent from the property will not cover the mortgage and other costs, so you will have to supplement it through your income. The theory is that you can claim a tax deduction on your employment income from the negative gearing (benefits mainly those on higher tax brackets), and the potential long term growth of the property will make up for the negative gearing over the long term. If you are after these type of properties Michael Yardney has some books on the subject. On the other hand, positive cash-flow properties provide enough rental income to cover the mortgage and other costs. They put cash into your pockets each week. They don't have as much growth potential as more inner city properties, but if you stick to the outer regions of major cities, instead of rural towns, you will still achieve decent long term growth. If you are after these type of properties Margaret Lomas has some books on the subject. My preference is for cash-flow positive properties, and some of the areas user14469 has mentioned. I am personally invested in the Penrith and surrounding areas. With negatively geared properties you generally have to supplement the property with your own income and generally have to wait for the property price to increase so you build up equity in the property. This then allows you to refinance the additional equity so you can use it as deposits to buy other properties or to supplement your income. The problem is if you go through a period of low, stagnate or negative growth, you may have to wait quite a few years for your equity to increase substantially. With positively geared properties, you are getting a net income from the property every week so using none of your other income to supplement the property. You can thus afford to buy more properties sooner. And even if the properties go through a period of low, stagnate or negative growth you are still getting extra income each week. Over the long term these properties will also go up and you will have the benefit of both passive income and capital gains. I also agree with user14469 regarding doing at least 6 months of research in the area/s you are looking to buy. Visit open homes, attend auctions, talk to real estate agents and get to know the area. This kind of research will beat any information you get from websites, books and magazines. You will find that when a property comes onto the market you will know what it is worth and how much you can offer below asking price. Another thing to consider is when to buy. Most people are buying now in Australia because of the record low interest rates (below 5%). This is causing higher demand in the property markets and prices to rise steadily. Many people who buy during this period will be able to afford the property when interest rates are at 5%, but as the housing market and the economy heat up and interest rates start rising, they find it hard to afford the property when interest rate rise to 7%, 8% or higher. I personally prefer to buy when interest rates are on the rise and when they are near their highs. During this time no one wants to touch property with a six foot pole, but all the owners who bought when interest rates where much lower are finding it hard to keep making repayments so they put their properties on the market. There ends up being low demand and increased supply, causing prices to fall. It is very easy to find bargains and negotiate lower prices during this period. Because interest rates will be near or at their highs, the economy will be starting to slow down, so it will not be long before interest rates start dropping again. If you can afford to buy a property at 8% you will definitely be able to afford it at 6% or lower. Plus you would have bought at or near the lows of the price cycle, just before prices once again start increasing as interest rates drop. Read and learn as much as possible from others, but in the end make up your own mind on the type of properties and areas you prefer." }, { "docid": "314806", "title": "", "text": "Here's my view, as a 38yr old NZer who grew up in Auckland: When you purchase a residential property, whether or not you intend to live in it, you're essentially counting on the possibility that one of the following will occur: This report by the NZ Royal Society (going by memory from a presentation I attended) predicts ongoing population growth in NZ, mainly driven by immigration, and mostly in Auckland. Building of new housing isn't keeping up with population growth, so my bet would be that the property values, especially in Auckland, are going to continue to climb. Other factors that might influence your decision are things only you can know, such as where you might be likely to settle down, how much risk you're willing to take, how much capability you have to look after a rental property, and how much knowledge you have about the property market. Bear in mind that government schemes and world events may change the outlook for number of houses being built and immigration levels, both of which heavily affect property values. My personal view is that the government isn't doing nearly enough to provide affordable housing for our young adults in NZ. Not only that; the govt is essentially responsible for the problem in the first place, as zoning rules for local authorities artificially inflate land prices which prevent the building of affordable houses. Furthermore, foreign investment in rental properties is unregulated and unmeasured. Both these problems could be resolved with appropriate legislation, though central city prices are unlikely to be relieved as much as other areas simply because prices are also inflated due to the desirability to live centrally. The problem is a severe one, and high housing prices for even the smallest dwellings are going to make inequality, and the social problems that go with it, far worse. I'd like to see new cities or towns being planned and built from scratch, such as Pegasus and Canberra." }, { "docid": "419926", "title": "", "text": "\"Real Estate has historically been the most sound investment of all times. Not only does property consistant increase in value (which is what you want every investment to do), it does so at the highest rate with the lowest risk. Most return on investment (like a stock in the market) the potential rate of gain is proportionat to the potential loss. The more secure an investment, the lower the potential gain. But, with Real Estate, property typically doubles in value every 10 years. Our overall R.E. economy is on an upward turn, recovering from a time where values tanked. to jump in now, is probably better than waiting for any amount of time, be it 1 month, or 1 year. You concern about being \"\"tied in\"\" to this investment is a valid concern, however, since the market is in an upward turn, you should be more and more able to turn around and sell it later on. The best thing that you could potentially do would be to invest in a rental property where your cost of investment (your mortgage note) is paid by the renters. However, being a landlord is always a risky business (hence, the higher rate of return, which considering your investment is ultimately zero, the return rate is huge :-) The trick would be to take the reters payments to you and keep it in an account that you use to pay for any repairs, upgrades, or marketing in between when the unit is vacant. But, with your parents losing their house, this may not be possible - unless you take their home and then keep the living arrangments the same as they are now. One possibility to help you get your foot in the door of being a property owner (not necessarily \"\"investor\"\") and help your parents keep their house (if that is what they would like to do) is re-finance with them... if you can't afford the entire mortgage, but they are capable of filling the gap between what you can afford and what their property costs, then you become partnered with them, and when/if their circumstances change, they can always buy you out.\"" }, { "docid": "373691", "title": "", "text": "Here is another way to look at it. Does this debt enable you to buy more car than you can really afford, or more car than you need? If so, it's bad debt. Let's say you don't have the price of a new car, but you can buy a used car with the cash you have. You will have to repair the car occasionally, but this is generally a lot less than the payments on a new car. The value of your time may make sitting around waiting while your car is repaired very expensive (if, like me, you can earn money in fine grained amounts anywhere between 0 and 80 hours a week, and you don't get paid when you're at the mechanic's) in which case it's possible to argue that buying the new car saves you money overall. Debt incurred to save money overall can be good: compare your interest payments to the money you save. If you're ahead, great - and the fun or joy or showoff potential of your new car is simply gravy. Now let's say you can afford a $10,000 car cash - there are new cars out there at this price - but you want a $30,000 car and you can afford the payments on it. If there was no such thing as borrowing you wouldn't be able to get the larger/flashier car, and some people suggest that this is bad debt because it is helping you to waste your money. You may be getting some benefit (such as being able to get to a job that's not served by public transit, or being able to buy a cheaper house that is further from your job, or saving time every day) from the first $10,000 of expense, but the remaining $20,000 is purely for fun or for showing off and shouldn't be spent. Certainly not by getting into debt. Well, that's a philosophical position, and it's one that may well lead to a secure retirement. Think about that and you may decide not to borrow and to buy the cheaper car. Finally, let's say the cash you have on hand is enough to pay for the car you want, and you're just trying to decide whether you should take their cheap loan or not. Generally, if you don't take the cheap loan you can push the price down. So before you decide that you can earn more interest elsewhere than you're paying here, make sure you're not paying $500 more for the car than you need to. Since your loan is from a bank rather than the car dealership, this may not apply. In addition to the money your cash could earn, consider also liquidity. If you need to repair something on your house, or deal with other emergency expenditures, and your money is all locked up in your car, you may have to borrow at a much higher rate (as much as 20% if you go to credit cards and can't get it paid off the same month) which will wipe out all this careful math about how you should just buy the car and not pay that 1.5% interest. More important than whether you borrow or not is not buying too much car. If the loan is letting you talk yourself into the more expensive car, I'd say it's a bad thing. Otherwise, it probably isn't." }, { "docid": "372615", "title": "", "text": "If there was no question of improvements to the property, the problem would be simple. Each person invests whatever amount. Calculate the percentage of each person's investment out of the entire investment, and that's what share each one owns. Like: A puts in $10,000 for the deposit and pays $5,000 toward the mortgage over the next however many years. B puts in $5,000 toward the deposit but pays $7,000 of the mortgage. C puts in $15,000 but pays only $1,000 of the mortgage payments. So total investments: A - $15,000, B - $12,000, C - $16,000. Total - $43,000. So A's share of the house is 15,000/43,000 = 34.9%. Etc. If you then sell it you pay off any outstanding debt, and then everybody gets their share of what's left. But once you start making improvements, there is no simple formula. Suppose you put down new flooring in the dining room. You pay $500 for materials and put in 20 hours of labor. Presumably you have now added something more than $500 to your share, but how much more? How much are the hours worth? What if someone damages the house -- puts a hole in the all or something -- and then fixes it. Does the time and effort they put into fixing it add to their investment, or did that just cancel out the damage they did? What if one person does a lot to keep the house in generally good condition in small snippets of time, like cleaning furnace filters and polishing the floors, while another does nothing and lets their share get run down and dirty? It gets very complicated. Theoretically you could come up with a rate at which you value your work -- like say every hour spent maintaining the house is worth $10 or $20 or whatever. But who's going to keep track of it over the course of potentially many years? And what if one person does a small number of big, easily quantifiable jobs, while another does many small, hard-to-count jobs? Like if A mops the floor every week for 2 years, is that worth more or less than B installing 3 ceiling fans, a door, and 2 windows? You could go around and around on this sort of thing." }, { "docid": "526383", "title": "", "text": "First off, great job on your finances so far. You are off on the right foot and have some sense of planning for the future. Also, it is a great question. First, I agree with @littleadv. Take advantage of your employer match. Do not drop your 401(k) contributions below that. Also, good job on putting your contributions into the Roth account. Second, I would ask: Are you out of debt? If not, put all your extra income towards paying off debt, and then you can work your plan. Third, time to do some math. What will your business look like? How much capital would you need to get started? Are there things you can do now on a part-time basis to start this business or prepare you to start the business? Come up with a figure, find some mutual funds that have a low beta, and back out how much money you need to save per month, so you have around that total. Then you have a figure. e.g. Assume you need $20,000, and you find a fund that has done 8% over the past 20 years. Then, you would need to save about $110/month to be ready to go in 10 years, or $273/month to go in about 5 years. (It's a time value of money calculation.) The house is really a long way off, but you could do the same kind of calculation. I feel that you think your income, and possibly locale, will change dramatically over the next few years. It might not be bad to double what you are saving for the business, and designate one half for the house." }, { "docid": "213165", "title": "", "text": "So many answers here are missing the mark. I have a $100k mortgage--because that isn't paid off, I can't buy a car? That's really misguided logic. You have a reasonably large amount of college debt and didn't mention any other debt-- It's a really big deal what kind of debt this is. Is it unsecured debt through a private lender? Is it a federal loan from the Department of Education? Let's assume the worst possible (reasonable) situation. You lose your job and spend the next year plus looking for work. This is the boat numerous people out of college are in (far far far FAR more than the unemployment rates indicate). Federal loans have somewhat reasonable (indentured servitude, but I digress) repayment strategies; you can base the payment on your current income through income-based and income-continent repayment plans. If you're through a private lender, they still expect payment. In both cases--because the US hit students with ridiculous lending practices, your interest rates are likely 5-10% or even higher. Given your take-home income is quite large and I don't know exactly the cost of living where you live--you have to make some reasonable decisions. You can afford a car note for basically any car you want. What's the worst that happens if you can't afford the car? They take it back. If you can afford to feed yourself, house yourself, pay your other monthly bills...you make so much more than the median income in the US that I really don't see any issues. What you should do is write out all your monthly costs and figure out how much unallocated money you have, but I'd imagine you have enough money coming in to finance any reasonable new or used car. Keep in mind new will have much higher insurance and costs, but if you pick a good car your headaches besides that will be minimal." }, { "docid": "70556", "title": "", "text": "\"You are at the point that many millions of people are at (and where I used to be) - you have no idea where your money is going. You just spend, spend, spend until there's nothing left, and/or you borrow more to keep going. There are general rules of thumb on how much house and car you can afford, but there is a great deal of personal variation. Housing and utility costs vary greatly from location to location. City-dwellers can use public transit instead of buying and maintaining a car. How much other debt do you have that you need to pay off? Do you have expenses that are not common (e.g. medical bills)? A more personal approach would be to figure out your own budget. The first step is creating a written budget. Figure out how much you can spend in total (i.e. your take-home pay) and the start allocating that money to expenses until you run out. I started by looking backwards. Look back at how much you spent on each category each month. List them in order of priority (e.g. food, health, housing, utilities, transportation, entertainment, everything else). If the money runs out you either stop spending or reduce spending in another category (e.g. can you cook a few extra meals at home instead of going out? Can you take lunch to work instead of a drive-through?) The amount you have left over now indicates how much more house and car you can afford. Once you get to a point where you can budget comfortably then you can start looking at saving for retirement and other long-term goals. This worked for me (and highlighted some areas where I overspent) because I had good categorized records (ironically because I used credit cards incessantly, which I mostly stopped once I created a budget). If you don't have good records, then you have to estimate. How much do you think you spend on food, gas, etc. each month? Then set aside that much and once it's gone don't spend anymore. Now obviously you're not going to stop eating, but the idea is to plan ahead and realize \"\"I have only $20 left to spend on food this month - maybe I shouldn't go to the movies\"\". It takes lots of practice, and you won't get it right very often. If you have enough left over, you can set aside some as a \"\"cushion\"\" in case you do go over your budget, but if you want true financial discipline you should start by reducing other categories first. This is not easy by any means. It will take moths of practice and trial-and-error to get to a point that you're comfortable with the lifestyle that you can afford. So in the end, there are only two variables in your equation - income and outflow. Do you want more house? Either spend less on other things or increase your income.\"" }, { "docid": "84931", "title": "", "text": "\"Let's look at basics. Your 340K mortgage amortized over 25 years at 3.5% is going to cost you $1700 in payments - almost exactly your rent. You won't be paying out less. You will in fact be paying out more, because you are now liable for more insurance, and any repairs will have to be paid for by you, not the landlord. So don't do this to save money. Figures from here. Don't forget that it is extremely likely that interest rates will go up in the next few years. 7% is not unlikely. Can you afford it if your payments double? You can get a fixed rate mortgage, but they are going to cost you much more than 3.5% for more than a couple of years. Don't be fooled by the 'pay yourself' argument for getting a mortgage. in the first few years almost all of your payments is interest, not paying down the principal. You are just switching from paying a landlord to paying a bank. There are huge advantages to waiting until you have a good down payment before buying a house. People with a big down payment get better interest rates, and don't need to pay as much CMHC insurance. You will be less at risk if the price of your house drops. Also ask yourself if you are sure you will be in your house for five years - if not, even real estate agents would usually admit you shouldn't buy. The truck payment shouldn't be an issue, as long as you are sure you can service both truck and mortgage payments. Nor is $600 in credit card debt significant in the big scheme. I would probably put any spare cash towards a down payment. It reduces your interest rate (possibly), some expenses with regard to your mortgage, and your risk if you have to sell and your house value has dropped. You might like to look at the government of Canada website \"\"Rent or buy\"\". It's down right now so I can't give you a link. I'll edit it in when it's back up. EDIT:Turns out it's offline for 'updating'. Here's the link.\"" }, { "docid": "102357", "title": "", "text": "&gt;Go live with your beloved poor for a year Hahaha... there is a housing project directly across the street from me as I write this. You keep making assumptions! Yes there absolutely is a culture of laziness and irresponsibility. There are a lot of reasons that the poor remain poor, and this is only one of them. Other reasons include the drug war, which disproportionately targets minorities and creates a vast unemployable population due to their criminal records. The school systems are shit--how can you raise yourself out of poverty without a decent education? Unions have declined, meaning working class people no longer have a living wage and must rely on food stamps and other government programs just to survive. There are a lot of reasons the poor stay poor. Blaming it all on bad choices is rather short-sighted. There are public-sector, private-sector and cultural factors contributing to wealth inequality. I will admit to all of these, but the Libertarian ideology only allows for one. Plus, what are you going to do about it? Does society have any responsibility to help people who are trapped in a cycle of poverty and bad choices to better themselves? What about the newborn child who has made no bad choices but to be born poor? Fuck 'em? &gt;any actual assesment of Reality Make one. You state no facts, only that if there were some facts they would agree with you. Not a proper argument. &gt;The rich are rich for a reason and the poor are poor for a reason. The rich are rich for many reasons--personal achievement, inheritance, luck, connections and simply reaping the fruits of a prosperous, harmonious society. There just as many reasons the poor are poor. To take any one reason and say that is the only reason is just like taking the idea of property rights and saying that is the only right worth consideration. &gt;Deep down inside you don't think you've earned it so you want to sacrifice all the rest of us on the altar of your limp wristed weakness. I don't attempt to psychoanalyze you, though I could probably do a much better job having once held the beliefs you are espousing. The thing is I learned from my experience and from the world around me. I see how the system is rigged, in both the public sector and private sector. I know it is possible to make it rich in this country if you have the skill and motivation, but I also know that it is much easier to stay rich if you are born rich and far too much depends on who you know rather than what you know. And nobody would be rich if we didn't have a functioning society, with a large middle class that can afford to buy the goods that entrepreneurs invent! As a business owner, I want to live in a society where the majority of people can afford the crap that I'm peddling. Call me a commie." }, { "docid": "211447", "title": "", "text": "A falling $AUD would be beneficial to exporters, and thus overall good for the economy. If the economy improves and exporters start growing profits, that means they will start to employ more people and employment will increase - and with higher employment, employees will become more confident to make purchases, including purchasing property. I feel the falling $AUD will be beneficial for the economy and the housing market. However, what you should consider is that with an improving economy and a rising property market, it will only be a matter of time before interest rates start rising. With a lower $AUD the RBA will be more confident in starting to increase interest rates. And increasing interest rates will have a dampening effect on the housing market. You are looking to buy a property to live in - so how long do you intend to live in and hold the property? I would assume at least for the medium to long term. If this is your intention then why are you getting cold feet? What you should be concerned about is that you do not overstretch on your borrowings! Make sure you allow a buffer of 2% to 3% above current interest rates so that if rates do go up you can still afford the repayments. And if you get a fixed rate - then you should allow the buffer in case variable rates are higher when your fixed period is over. Regarding the doomsayers telling you that property prices are going to crash - well they were saying that in 2008, then again in 2010, then again in 2012. I don't know about you but I have seen no crash. Sure when interest rates have gone up property prices have levelled off and maybe gone down by 10% to 15% in some areas, but as soon as interest rates start falling again property prices start increasing again. It's all part of the property cycle. I actually find it is a better time to buy when interest rates are higher and you can negotiate a better bargain and lower price. Then when interest rates start falling you benefit from lower repayments and increasing property prices. The only way there will be a property crash in Australia is if there was a dramatic economic downturn and unemployment rates rose to 10% or higher. But with good economic conditions, an increasing population and low supplies of newly build housing in Australia, I see no dramatic crashes in the foreseeable future. Yes we may get periods of weakness when interest rates increase, with falls up to 15% in some areas, but no crash of 40% plus. As I said above, these periods of weakness actually provide opportunities to buy properties at a bit of a discount. EDIT In your comments you say you intend to buy with a monthly mortgage repayment of $2500 in place of your current monthly rent of $1800. That means your loan amount would be somewhere around $550k to $600K. You also mention you would be taking on a 5 year fixed rate, and look to sell in about 2 years time if you can break even (I assume that is break even on the price you bought at). In 2 years you would have paid $16,800 more on your mortgage than you would have in rent. So here are the facts: A better strategy:" } ]

[ { "docid": "128861", "title": "", "text": "Such activity is normally referred to as bartering income. From the IRS site - You must include in gross income in the year of receipt the fair market value of goods or services received from bartering. Generally, you report this income on Form 1040, Schedule C (PDF), Profit or Loss from Business (Sole Proprietorship), or Form 1040, Schedule C-EZ (PDF), Net Profit from Business (Sole Proprietorship). If you failed to report this income, correct your return by filing a Form 1040X (PDF), Amended U.S. Individual Income Tax Return. Refer to Topic 308 and Amended Returns for information on filing an amended return." } ]

[ { "docid": "592510", "title": "", "text": "However, if you are employed by a company that exists in a tax haven and your services are provided to an employer by that tax haven company, it is the tax haven company that gets paid, not you. Under various schemes that company need not pay you at all. For example it may make you a loan which is not taxed (ie you don't pay tax on a loan, just as you don't pay tax on the money lent you by a mortgage company). You are bound by the terms of the loan agreement to repay that loan at a rate that the company finds acceptable. Indeed the company may find eventually that it is simply convenient to write off the loan as unrecoverable. if the owners/officers of he company write off your loans, how much tax will you have paid on the money you have had as loans? The taxman can of course state that this was simply set up to avoid tax (which is illegal) so you should have a balancing scheme to show that that the loans were taken to supplement income,just as one might take a bank loan / mortgage, not replace it entirely as a tax scam. Hiring tax counsel to provide this adequate proof to HMRC has a price. Frequently this kind of loophole exists because the number of people using it were sufficiently low not to warrant policing ( if the policing costs more than the tax recovered, then it is more efficient to ignore it) or because at some stage the scheme has been perfectly legal (as in the old offshore'education' trust recommended by the government a few decades ago). When Gordon Brown set out a 75% tax rate (for his possibly ideological reasons rather than financially based ones)for those who had these accounts , he encountered opposition from MPs who were going to be caught up paying high tax bills for what was effctively retrospective taxation, so there was a built in 'loophole' to allow the funds to be returned without undue penalty. If you think that is morally wrong, consider what the response would be if a future Chancellor was to declare all IAs the work of the devil and claim that retrospective tax would need to be paid on all ISA transactions over the last few decades.eg: tot up all the dividends and capital gains made on an ISA in any year and pay 40% tax on all of them, even if that took the ISA into negative territory because the value today was low/ underperfoming. Yet this has been sggested as a way of filling in the hole in the budget on the grounds that anyone with an ISA can be represented as 'rich' to a selected party of voters." }, { "docid": "63649", "title": "", "text": "You say My work is steady; even if I lost my job it'd be easy to get another. Location has been static for a few years now, but I'm not sure that'll extrapolate to the future; I'm lazy, so I don't want to move, but for a significantly better job opportunity I wouldn't mind. The general rule of thumb is that you'll come out ahead if you buy a house (with a mortgage) and live there for five years. What you lose in interest, you make up in rent. And living there for five years, you make back your closing costs in equity. If you're there less than five years though, you don't make back the closing costs. You'd have been better off renting. Historically (up to about twenty years ago), your mortgage payment and rent payment for the same basic property would be about the same. I.e. if your current landlord sold you what you are renting, your mortgage payment would be roughly the same as your rent. Maybe a little lower or a little higher but about the same. More recently, it hasn't been strange to see a divergence in those. Now it is not uncommon for a mortgage payment to be 50% higher than rent on the same property. This has some consequences. First, your $1000 rent probably won't stretch as far as a $1000 mortgage payment. So you'll be buying something that you'd only pay $650 or $700 rent. Second, if you move and can't sell immediately, you'll get less in rent than you'd pay in mortgage. Rather than contributing to your income, the property will require subsidy just to maintain the mortgage. And in the early years of the mortgage, this means that you're paying all of the principal (equity) and some of the interest. Buying a duplex makes this worse. You have your side and their side. You can substitute your $1000 rent for half of the mortgage payment. Meanwhile, they are paying $700 in rent. You have to subsidize the mortgage by $300. Plus, you are talking about hiring a property management company to do things like lawn maintenance. There goes another $100 a month. So you are subsidizing the mortgage by $400. I don't know real estate prices in Utah, but a quick search finds a median house price over $200,000. So it seems unlikely that you are buying new construction with new appliances. More likely you are buying an existing duplex with existing appliances. What happens when they fail? The renter doesn't pay for that. The property management company doesn't pay for that (although they'll likely arrange for it to happen). You pay for it. Also, it often takes a bit of time to clean up the apartment after one tenant leaves before the new tenant starts paying rent. That's a dead weight loss. If this happens during a local recession, you could be carrying the mortgage on a property with no offsetting rental income for months. There are some countervailing forces. For example, if house prices in your area are increasing, the rent will increase with them (not necessarily at the same pace). But your mortgage payment stays the same. So eventually the rent may catch up with the mortgage payment. If you wait long enough in a strong enough market, the rent on the other half of the duplex may cover the entire mortgage payment. If you currently have an urban apartment within walking distance of work and switch to a suburban apartment with a commute, you have a better chance of finding a duplex where the entire mortgage payment is only the $1000 that you pay in rent. Your half of the duplex won't be as nice as your apartment is, and you'll have a half hour or hour long commute every morning (and the same to get home in the evening). But on strictly fiscal terms you'll be doing about as well. Plus you have the income from the other half. So even if your mortgage payment is more than your rent payment, you can still break even if the rent covers it. Consider a $1400 mortgage and $400 in rent from the other half (after property management fees). So long as nothing goes wrong, you break even. Perhaps the agreement is that your parents take care of things going wrong (broken appliances, troublesome tenants, time between tenants). Or perhaps you drain your emergency fund and adjust your 401(k) payment down to the minimum when that happens. Once your emergency fund is replenished, restore the 401(k). If you're willing to live in what's essentially a $500 apartment, you can do better this way. Of course, you can also do better by living in a $500 apartment and banking the other $500 that you spend on rent. Plus you now have the expenses of a commute and five hours less free time a week. You describe yourself as essentially living paycheck to paycheck. You have adequate savings but no building excess. Whatever you get paid, you immediately turn around and spend. Your parents may view you as profligate. Your apartment is nicer than their early apartments were. You go out more often. You're not putting anything aside for later (except retirement). It didn't use to be at all strange for people to move out of the city because they needed more space. For the same rent they were paying in the city, they could buy a house in the suburbs. Then they'd build up equity. So long as they stayed in roughly the same work location, they didn't need to move until they were ready to upgrade their house. The duplex plan leads to one of two things. Either you sell the duplex and use the equity to buy a nicer regular house, or you move out of the duplex and rent your half. Now you have a rental property providing income. And if you saved enough for a down payment, you can still buy a regular house. From your parents' perspective, encouraging you to buy a duplex may be the equivalent of asking you to cut back on spending. Rather than reducing your 401(k) deposits, they may be envisioning you trading in your car for a cheaper one and trading in your nice but expensive apartment for something more reasonable in a cheaper neighborhood. Rather than working with a property management company, you'll be out doing yardwork rather than cavorting with your friends. And maybe the new place would have more space to share when you meet someone--you aren't going to provide many grandkids alone. If you get a mortgage on a duplex, you are responsible for paying the mortgage. You are responsible even if something happens to the house. For example, if a fire burns it down or a tornado takes it away. Or you just find that the house isn't solid enough to support that party where all of your friends are jumping up and down to the latest pop sensation. So beyond losing whatever you invest in the property, you may also lose what you borrowed. Now consider what happens if you invest the same amount of money in General Motors as in the house. Let's call that $10,000 and give the house a value of $200,000. With General Motors, even if they go bankrupt tomorrow, you're only out $10,000. With the house, you're out $200,000. Admittedly it's much hard to lose the entire $200,000 value of the house. But even if the house loses $80,000 in value, you are still $70,000 in the hole. You don't need a disaster for the house to lose $80,000 in value. That's pretty much what happened in the 2006-2010 period. People were losing all of what they invested in houses plus having to declare bankruptcy to get out of the excess debt. Of course, if they had been able to hold on until 2015 markets mostly recovered. But if you lost your job in 2008, they wouldn't let you not make mortgage payments until you got a new one in 2012. When you declare bankruptcy, you don't just lose the house. You also lose all your emergency savings and may lose some of your belongings. There are some pretty prosaic disasters too. For example, you and your tenant both go away for a weekend. It rains heavily and your roof starts to leak due to weak maintenance (so not covered by insurance). The house floods, destroying all the electronics and damaging various other things. Bad enough if it's just you, but you're also responsible for the tenant's belongings. They sue you for $20,000 and they move out. So no rent and big expenses. To get the house livable again is going to take $160,000. Plus you have a $190,000 mortgage on a property that is only worth about $40,000. That's at the extreme end." }, { "docid": "65040", "title": "", "text": "As the owner of the S-corp, it is far easier for you to move money in/out of the company as contributions and distributions rather than making loans to the company. Loans require interest payments, 1099-INT forms, and have tax consequences, whereas the distributions don't need to be reported because you pay taxes on net profits regardless of whether the money was distributed. If you were paid interest, disregard this answer. I don't know if or how you could re-categorize the loan once there's a 1099-INT involved. If no interest was ever paid, you just need to account for it properly: If the company didn't pay you any interest and never issued you a 1099-INT form (i.e. you wrote a check to the company, no promissory note, no tax forms, no payments, no interest, etc.) then you can categorize that money as a capital contribution. You can likewise take that money back out of the company as a capital distribution and neither of these events are taxable nor do they need to be reported to the IRS. In Quickbooks, create the following Equity accounts -- one for each shareholder making capital contributions and distributions: When putting money into the company, deposit into your corporate bank account and use the Capital Contribution equity account. When taking money out of the company, write yourself a check and use the Distributions account. At the end of every tax year, you can close out your Contributions and Distributions to Retained Earnings by making a general journal entry. For example, debit retained earnings and credit distributions on Dec 31 every year to zero-out the distributions account. For contributions, do the reverse and credit retained earnings. There are other ways of recording these transactions -- for example I think some people just use a Member Capital equity account instead of separate accounts for contributions and distributions -- and QB might warn you about posting journal entries to the special Retained Earnings account at the end of the year. In any case, this is how my CPA set up my books and it's been working well enough for many years. Still, never a bad idea to get a second opinion from your CPA. Be sure to pay yourself a reasonable salary, you can't get out of payroll taxes and just distribute profits -- that's a big red flag that can trigger an audit. If you're simply distributing back the money you already put into the company, that should be fine." }, { "docid": "339327", "title": "", "text": "Would you mind adding where that additional value comes from, if not from the losses of other investors? You asked this in a comment, but it seems to be the key to the confusion. Corporations generate money (profits, paid as dividends) from sales. Sales trade products for money. The creation of the product creates value. A car is worth more than General Motors pays for its components and inputs, even including labor and overhead as inputs. That's what profit is: added value. The dividend is the return that the stock owner gets for owning the stock. This can be a bit confusing in the sense that some stocks don't pay dividends. The theory is that the stock price is still based on the future dividends (or the liquidation price, which you could also consider a type of dividend). But the current price is mostly based on the likelihood that the stock price will increase rather than any expected dividends during ownership of the stock. A comment calls out the example of Berkshire Hathaway. Berkshire Hathaway is a weird case. It operates more like a mutual fund than a company. As such, investors prefer that it reinvest its money rather than pay a dividend. If investors want money from it, they sell shares to other investors. But that still isn't really a zero sum game, as the stock increases in value over time. There are other stocks that don't pay dividends. For example, Digital Equipment Corporation went through its entire existence without ever paying a dividend. It merged with Compaq, paying investors for owning the stock. Overall, you can see this in that the stock market goes up on average. It might have a few losing years, but pick a long enough time frame, and the market will increase during it. If you sell a stock today, it's because you value the money more than the stock. If it goes up tomorrow, that's the buyer's good luck. If it goes down, the buyer's bad luck. But it shouldn't matter to you. You wanted money for something. You received the money. The increase in the stock market overall is an increase in value. It is completely unrelated to trading losses. Over time, trading gains outweigh trading losses for investors as a group. Individual investors may depart from that, but the overall gain is added value. If the only way to make gains in the stock market was for someone else to take a loss, then the stock market wouldn't be able to go up. To view it as a zero sum game, we have to ignore the stocks themselves. Then each transaction is a payment (loss) for one party and a receipt (gain) for the other. But the stocks themselves do have value other than what we pay for them. The net present value of of future payments (dividends, buyouts, etc.) has an intrinsic worth. It's a risky worth. Some stocks will turn out to be worthless, but on average the gains outweigh the losses." }, { "docid": "299327", "title": "", "text": "\"I read the book, and I'm willing to believe you'd have a good chance of beating the market with this strategy - it is a reasonable, rational, and mechanical investment discipline. I doubt it's overplayed and overused to the point that it won't ever work again. But only IF you stick to it, and doing so would be very hard (behaviorally). Which is probably why it isn't overplayed and overused already. This strategy makes you place trades in companies you often won't have heard of, with volatile prices. The best way to use the strategy would be to try to get it automated somehow and avoid looking at the individual stocks, I bet, to take your behavior out of it. There may well be some risk factors in this strategy that you don't have in an S&P 500 fund, and those could explain some of the higher returns; for example, a basket of sketchier companies could be more vulnerable to economic events. The strategy won't beat the market every year, either, so that can test your behavior. Strategies tend to work and then stop working (as the book even mentions). This is related to whether other investors are piling in to the strategy and pushing up prices, in part. But also, outside events can just happen to line up poorly for a given strategy; for example a bunch of the \"\"fundamental index\"\" ETFs that looked at dividend yield launched right before all the high-dividend financials cratered. Investing in high-dividend stocks probably is and was a reasonable strategy in general, but it wasn't a great strategy for a couple years there. Anytime you don't buy the whole market, you risk both positive and negative deviations from it. Here's maybe a bigger-picture point, though. I happen to think \"\"beating the market\"\" is a big old distraction for individual investors; what you really want is predictable, adequate returns, who cares if the market returns 20% as long as your returns are adequate, and who cares if you beat the market by 5% if the market cratered 40%. So I'm not a huge fan of investment books that are structured around the topic of beating the market. Whether it's index fund advocates saying \"\"you can't beat the market so buy the index\"\" or Greenblatt saying \"\"here's how to beat the market with this strategy,\"\" it's still all about beating the market. And to me, beating the market is just irrelevant. Nobody ever bought their food in retirement because they did or did not beat the market. To me, beating the market is a game for the kind of actively-managed mutual fund that has a 90%-plus R-squared correlation with the index; often called an \"\"index hugger,\"\" these funds are just trying to eke out a little bit better result than the market, and often get a little bit worse result, and overall are a lot of effort with no purpose. Just get the index fund rather than these. If you're getting active management involved, I'd rather see a big deviation from the index, and I'd like that deviation to be related to risk control: hedging, or pulling back to cash when valuations get rich, or avoiding companies without a \"\"moat\"\" and margin of safety, or whatever kind of risk control, but something. In a fund like this, you aren't trying to beat the market, you're trying to increase the chances of adequate returns - you're optimizing for predictability. I'm not sure the magic formula is the best way to do that, focused as it is on beating the market rather than on risk control. Sorry for the extra digression but I hope I answered the question a bit, too. ;-)\"" }, { "docid": "386481", "title": "", "text": "The committee folks told us Did they also give you advice on your medication? Maybe if they told you to take this medicine or that you'd do that? What is it with people taking tax advice from random people? The committee told you that one person should take income belonging to others because they don't know how to explain to you which form to fill. Essentially, they told you to commit a fraud because forms are hard. I now think about the tax implications, that makes me pretty nervous. Rightly so. Am I going to have to pay tax on $3000 of income, even though my actual winning is only $1000? From the IRS standpoint - yes. Can I take in the $3000 as income with $2000 out as expenses to independent contractors somehow? That's the only solution. You'll have to get their W8's, and issue 1099 to each of them for the amounts you're going to pay them. Essentially you volunteered to do what the award committee was supposed to be doing, on your own dime. Note that if you already got the $3K but haven't paid them yet - you'll pay taxes on $3K for the year 2015, but the expense will be for the year 2016. Except guess what: it may land your international students friends in trouble. They're allowed to win prizes. But they're not allowed to work. Being independent contractor is considered work. While I'm sure if USCIS comes knocking, you'll be kind enough to testify on their behalf, the problem might be that the USCIS won't come knocking. They'll just look at their tax returns and deny their visas/extensions. Bottom line, next time ask a professional (EA/CPA licensed in your State) before taking advice from random people who just want the headache of figuring out new forms to go away." }, { "docid": "182168", "title": "", "text": "It's not quite clear what you are asking, so I'll answer a few possible interpretations. Businesses pay taxes on their profits. So if your business took a million pounds in revenue (e.g. sold a million pounds worth of stuff) then you would subtract (roughly speaking) everything the business spent on making and selling that stuff, and pay taxes only on the profit. VAT however is a different matter, and you would have to pay VAT on all of that income (technically the VAT portion isn't even income - it's tax you are forced to collect on behalf of the government). If your business made a million pounds pounds profit, it would pay tax on all of that million (subject to what a tax accountant can do to reduce that, which ought to be considerable). You can't subtract your personal living expenses like that. However the company can pay you a salary, which counts as an expense and the company doesn't pay tax on that. You might also take some money from the company as dividends. Both salary and dividends count as personal income to yourself, and you will need to pay personal income tax on them. As for the Ferrari, it depends on whether you can justify it as a business expense. A lot of companies provide cars for their employees so that they can use them for business - however you have to be able to show that IS for business, otherwise they are taxed like salary. The rules for company cars are quite complicated, and you would need an accountant. If this is a real rather than hypothetical situation, definitely get a tax accountant involved." }, { "docid": "33157", "title": "", "text": "\"I am a tax lawyer and ALL the RESPONSES ABOVE are 1/2 Correct but also 1/2 Wrong and in tax law this means 100% WRONG (BECAUSE ANY PART INCORRECT UNDER TAX LAW will get YOU A HUGE PENALY and/or PRISON TIME by way of the IRS! So in ESSENCE ALL the above answers are WRONG! Let me enlighten you to the correct answer in 5 parts, as people that do not practice tax law may understand (but you still probably will not understand, if you are NOT a Lawyer). 1) All public companies are corporations (shown by Ltd.), 2) only Shareholders of Public companies (ie, traded on the NYSE stock market) are never liable for debts of a bankrupt company, due to the concept of limited liability. 2) now Banks may ask a sole proprietorship (who wants to incorp. for example) to give collateral, such as owners stocks/bonds or his/her house, but then of course the loanee can tell the Bank No Thanks and find a lender that may charge higher interest rates but lend money to his company with little to NO collateral. 3) Of course not all companies are publicly traded and these are called private companies. 4)\"\"limited liability\"\" has nothing to do directly with subsequent shareholders (the above answer is inaccurate!), it RELATES rather to INITIAL OWNERS INVESTMENT in their company, limiting the amount of owner loss if the company goes bankrupt. 5) Share Face-value is usually never related to this as shares are sold at market value in real life instances (above or below face-value), or the most money Investments Banks or owners can fetch for the shares they sell (not what the stock's face-value is set at upon issuance). Never forget, stocks are sold in our Capitalistic System to whomever pays the most, as it is that Buyer who gets to purchase the stock!\"" }, { "docid": "129540", "title": "", "text": "\"The first rule I follow is pretty simple: Get paid for what you do. Earn a return on what you own. If you are running your company prudently, you should earn a salary for the position and responsibilities you hold within the business. This salary should be competitive. You should be able to replace yourself in the business at this salary. If your title is \"\"President\"\" or \"\"CEO\"\" - look for market rate salaries for others in that position within your industry and company size. If you wear multiple hats in a small business, you will likely have to blend this salary based on those various positions. Based on how you run your business, the money left over at the end of the year after you and your team takes a competitive wage is your profit. If there isn't any profit, then you might want to do some work on your business model. But if their is a profit, then it's a clear return on what you own and not just a payment for work completed. The idea would be that you could exit the business as an operator, pay someone else to do exactly what you do, and you would continue to get that profit return at the end of the year. This is when a business acts like a true asset. Whether you take your money in salary or profit distributions (or dividends) depending on your structure, taxes are about the same. W2'd salaries get normal employee contributed taxes, but then of course the company matches these. It is identical if you take a guaranteed payment or distribution that gets hit with self employment taxes. Profits are also going to get hit with the same taxes. Follow ups: 1) A fair salary would be a competitive market wage for the position you hold within the business. What is left over would be considered true profits and not just fabricated profits by taking a lower than market wage to boost the appearance of profitability. 2) Shareholders requesting salary information would be covered in your Operating Agreement or Shareholder Agreement. This might be terms you set with your investors. Or you might simply set a term that you only need approval if a single salary exceeds a cap (like $250,000). Which would mean you would need to present why you deserve a higher salary and have your board approve (if you are governed by said board via your investors). Profitability is a different ballpark. Your investors most likely have a right to see a monthly, quarterly, and/or annual Profit & Loss statement which should clearly state profitability. I can't imagine running a completely closed book company to my investors. Actually... I can't really imagine ever investing in a company where I am not permitted to see the financials. Something to also consider here is the threat of trying to keep your profit numbers low in order to not pay taxes or to pay yourself a higher salary. If you ever plan to sell or exit the company, most widely accepted valuations of a business are done from profits (or EBIDTA). You might think you are saving yourself a couple points on taxes by avoiding profits in the short term, but if you exit the business and get a 3-5X (or even up to 12X in some cases) multiplier on your annual profits, you might be kicking yourself for trying to hide them through your accounting practices. Buyers will often sniff out an owner who created false profits by not paying themselves, but what's harder to do is figure out how much profits should have been when there were none on the books. By saving yourself $100,000 in taxes this year, could add up to close to $1,000,000 in an acquisition. Good luck.\"" }, { "docid": "9753", "title": "", "text": "The Australian Tax Office website shows Tax Rates for individuals based on the income earned in the Financial Year. Calculating what you'll be taxed For instance, it show that every dollar you earn up to $18,200, you are not taxed. Every dollar over that, up to $37k is taxed at 19 cents. And so on.. Example 1 So as an example, if your income for the year is $25,000 you will be taxed $1292. Working: Here's how it's look if you were doing it in a spreadsheet using the Tax Rates table on the ATO website as a guide: Example 2 If you income is $50,000, it'd look like this: Withholding Your employer is obligated to remove the taxable part from your wage each time your paid. They do that using the calculation above. If at the end of the financial year, the ATO determines that too much as been withheld (ie. you've claimed deductions that've reduce your taxable income to less than what your actual income is), that's when you may be eligible for a refund. If your employer didn't withhold enough or you had income from other sources that haven't been taxed already, then you may actually need to pay rather than expecting a refund. Your question If you earn $18,200 in the year and for some reason your employer did withhold tax from your pay, say $2,000, then yes, you'll get all that $2,000 back as a refund since the Tax Rate for income up to $18,200 is $0.00. If you earned $18,201 and your employer withheld $2000, you'd get $1999.81 back as a refund ($2000 - 19c). You have to pay 19c tax on that $1 over $18,200." }, { "docid": "197782", "title": "", "text": "\"Here's an alternative. There are hundreds, maybe thousands, of contract engineering firms (\"\"job shops\"\") in the United States, probably hundreds in California alone. They are in the business of doing what your \"\"employer\"\" wants you to do, they know how to do it, they have been doing it for decades, working with the biggest, most-established companies in the country. They have forgotten more about providing engineering services to clients, and paying the engineers, than you can learn in a lifetime. Call a few of them. Set up meetings. Budget a few hours for it. You want to talk with the most experienced recruiter in the office, the Old Guy Who Has Been There And Done That. Explain your situation, and tell them that, rather than go through all of the headaches yourself, you want to investigate the possibility of THEM handling all the headaches, for their usual markup of course. (You can probably word this better than I can, but you get the idea.) The shop may or may not be willing to talk about their markup. My personal opinion is that this is perfectly OK. What they make off of you, after your rate is paid, is THEIR business. Also, talk about what you do, and your recommended rate. It would not surprise me to learn that you are currently grossly underpaid. AND, mention that, if the client declines, you're going to be available immediately, and you'd certainly be open to working with them. (You will see this again.) In fact, if they have any current leads that you fit, you would certainly be interested in hearing about them. (They may already have a req from another client, for which you fit, for which the client is willing to pay much more than your current \"\"employer\"\".) If it were me, personally, I'd start with Yoh, Belcan, and maybe TAD Technical. These are three of the oldest and best. I'd also hit up CE Weekly, get a subscription, and find some other shops with offices in your area. Once you have a shop lined up, then ask your \"\"employer\"\" if, rather than you setting up a personal corporation, they'd be willing to work with an established Contract Engineering firm, who does this kind of thing for a living, who does this every day, who has been doing this for decades. Doing this is simpler for everyone, and, by going through an established firm, they avoid having to teach you how to do business with them. They also avoid the risk of having you reclassified by IRS as an employee, which exposes them to all kinds of legal and financial liability. If they say \"\"No\"\", WALK AWAY FROM THEM. Immediately. They've just thrown up a HUGE red flag. This is where the other discussions with the shop come into play.\"" }, { "docid": "466835", "title": "", "text": "\"This is several questions wrapped together: How can I diplomatically see the company's financial information? How strong a claim does a stockholder or warrantholder have to see the company's financials? What information do I need to know about the company financials before deciding to buy in? I'll start with the easier second question (which is quasi implicit). Stockholders typically have inspection rights. For example, Delaware General Corporate Law § 220 gives stockholders the right to inspect and copy company financial information, subject to certain restrictions. Check the laws and corporate code of your company's state of incorporation to find the specific inspection right. If it is an LLC or partnership, then the operating agreement usually controls and there may be no inspection rights. If you have no corporate stock, then of course you have no statutory inspection rights. My (admittedly incomplete) understanding is that warrantholders generally have no inspection rights unless somehow contracted for. So if you vest as a corporate stockholder, it'll be your right to see the financials—which may make even a small purchase valuable to you as a continuing employee with the right to see the financials. Until then, this is probably a courtesy and not their obligation. The first question is not easy to answer, except to say that it's variable and highly personal for small companies. Some people interpret it as prying or accusatory, the implication being that the founders are either hiding something or that you need to examine really closely the mouth of their beautiful gift horse. Other people may be much cooler about the question, understanding that small companies are risky and you're being methodical. And in some smaller companies, they may believe giving you the expenses could make office life awkward. If you approach it professionally, directly, and briefly (do not over-explain yourself) with the responsible accountant or HR person (if any), then I imagine it should not be a problem for them to give some information. Conversely, you may feel comfortable enough to review a high-level summary sheet with a founder, or to find some other way of tactfully reviewing the right information. In any case, I would keep the request vague, simple, and direct, and see what information they show you. If your request is too specific, then you risk pushing them to show information A, which they refuse to do, but a vague request would've prompted them to show you information B. A too-specific request might get you information X when a vague request could have garnered XYZ. Vague requests are also less aggressive and may raise fewer objections. The third question is difficult to say. My personal understanding is some perspective of how venture capitalists look at the investment opportunity (you didn't say how new this startup is or what series/stage they are on, so I'll try to stay vague). The actual financials are less relevant for startups than they are for other investments because the situation will definitely change. Most venture capital firms like to look at the burn rate or amount of cash spent, usually at a monthly rate. A high burn rate relative to infusions of cash suggests the company is growing rapidly but may have a risk of toppling (i.e. failing before exit). Burn rate can change drastically during the early life of the startup. Of course burn rate needs the context of revenues and reserves (and latest valuation is helpful as a benchmark, but you may be able to calculate that from the restricted share offer made to you). High burn rate might not be bad, if the company is booming along towards a successful exit. You might also want to look at some sort of business plan or info sheet, rather than financials alone. You want to gauge the size of the market (most startups like to claim 9- or 10-figure markets, so even a few percentage points of market share will hit revenue into the 8-figures). You'll also have to have a sense for the business plan and model and whether it's a good investment or a ridiculous rehash (\"\"it's Twitter for dogs meets Match.com for Russian Orthodox singles!\"\"). In other words, appraise it like an investor or VC and figure out whether it's a prospect for decent return. Typical things like competition, customer acquisition costs, manufacturing costs are relevant depending on the type of business activity. Of course, I wouldn't ignore psychology (note that economists and finance people don't generally condone the following sort of emotional thinking). If you don't invest in the company and it goes big, you'll kick yourself. If it goes really big, other people will either assume you are rich or feel sad for you if you say you didn't get rich. If you invest but lose money, it may not be so painful as not investing and losing out the opportunity. So if you consider the emotional aspect of personal finance, it may be wise to invest at least a little, and hedge against \"\"woulda-shoulda\"\" syndrome. That's more like emotional advice than hard-nosed financial advice. So much of the answer really depends on your particular circumstances. Obviously you have other considerations like whether you can afford the investment, which will be on you to decide. And of course, the § 83(b) election is almost always recommended in these situations (which seems to be what you are saying) to convert ordinary income into capital gain. You may also need cash to pay any up-front taxes on the § 83(b) equity, depending on your circumstances.\"" }, { "docid": "140055", "title": "", "text": "If you're getting the same total amount of money every year, then the main issue is psychological. I mean, you may find it easier to manage your money if you get it on one schedule rather than another. It's generally better to get money sooner rather than later. If you can deposit it into an account that pays interest or invest it between now and when you need it, then you'll come out ahead. But realistically, if we're talking about getting money a few days or a week or two sooner, that's not going to make much difference. If you get a paycheck just before the end of the year versus just after the end of the year, there will be tax implications. If the paycheck is delayed until January, then you don't have to pay taxes on it this year. Of course you'll have to pay the taxes next year, so that could be another case of sooner vs later. But it can also change your total taxes, because, in the US and I think many other countries, taxes are not a flat percentage, but the more you make, the higher the tax rate. So if you can move income to a year when you have less total income, that can lower your total taxes. But really, the main issue would be how it affects your budgeting. Others have discussed this so I won't repeat." }, { "docid": "226197", "title": "", "text": "\"The answer is partly and sometimes, but you cannot know when or how. Most clearly, you do not take somebody else's money if you buy shares in a start-up company. You are putting your money at risk in exchange for a share in the rewards. Later, if the company thrives, you can sell your shares for whatever somebody else will pay for your current share in the thriving company's earnings. Or, you lose your money, when the company fails. (Much of it has then ended up in the company's employees' pockets, much of the rest with the government as taxes that the company paid). If the stockmarket did not exist, people would be far less willing to put their money into a new company, because selling shares would be far harder. This in turn would mean that fewer new things were tried out, and less progress would be made. Communists insist that central state planning would make better decisions than random people linked by a market. I suggest that the historical record proves otherwise. Historically, limited liability companies came first, then dividing them up into larger numbers of \"\"bearer\"\" shares, and finally creating markets where such shares were traded. On the other hand if you trade in the short or medium term, you are betting that your opinion that XYZ shares are undervalued against other investors who think otherwise. But there again, you may be buying from a person who has some other reason for selling. Maybe he just needs some cash for a new car or his child's marriage, and will buy back into XYZ once he has earned some more money. You can't tell who you are buying from, and the seller can only tell if his decision to sell was good with the benefit of a good few years of hindsight. I bought shares hand over fist immediately after the Brexit vote. I was putting my money where my vote went, and I've now made a decent profit. I don't feel that I harmed the people who sold out in expectation of the UK economy cratering. They got the peace of mind of cash (which they might then reinvest in Euro stocks or gold or whatever). Time will tell whether my selling out of these purchases more recently was a good decision (short term, not my best, but a profit is a profit ...) I never trade using borrowed money and I'm not sure whether city institutions should be allowed to do so (or more reasonably, to what extent this should be allowed). In a certain size and shortness of holding time, they cease to contribute to an orderly market and become a destabilizing force. This showed up in the financial crisis when certain banks were \"\"too big to fail\"\" and had to be bailed out at the taxpayer's expense. \"\"Heads we win, tails you lose\"\", rather than trading with us small guys as equals! Likewise it's hard to see any justification for high-frequency trading, where stocks are held for mere milliseconds, and the speed of light between the trader's and the market's computers is significant.\"" }, { "docid": "97962", "title": "", "text": "There are 2 basic ways to have someone buy partial ownership of your company: OR If they buy shares that you already own, then their shares will have the same rights as yours (same voting rights, same dividend rights, etc.). If they buy shares newly created from the company, they could be either identical shares to what you already own, or they could be a new class of shares [you may need to adjust the articles of incorporation if you did not plan ahead with multiple share classes]. You really need to talk to a lawyer & tax accountant about this. There are a lot of questions you need to consider here. For example: do you want to use the money in the business, or would you rather have it personally? Are you concerned about losing some control of how the business is run? What are the short term and long-term tax consequences of each method? What does your new partner want in terms of their share class? The answers to these questions will be highly valuable, and likely worth much more than the fees you will need to pay. At the very least, you will likely need a lawyer and accountant anyway to ensure the filings & taxes are done correctly, so better to involve them now, rather than later. There are many other situations to consider here, and an online forum is not the best place to get advice that might put you in a sticky legal situation later on." }, { "docid": "261989", "title": "", "text": "Bank products have been pretty common with tax refunds as well, and they are also being heavily scrutinized for the same reasons. Refund Anticipation Loans (RALs) have been outlawed for future tax seasons due to lack of consumer protection. What is a bank product, you might ask? Rather than waiting 7-14 days for the a direct deposit from the IRS, a lot of places like H+R Block and Jackson Hewitt would offer a bank product to get you money quicker. For this service, they charge a fee (usually $99-$149) which is grossly overpriced for how little work it takes, but if your refund is several thousand dollars, you may not care. A Refund Anticipation Loan was the most predatory bank product, as it was an advance on your loan for the amount your expected refund. However, if there were any errors in your return and the IRS decided your refund was less than what your tax preparer calculated it to be, you were stuck with paying back the advance amount, leaving you to foot the bill for whatever errors your preparer may have made. These loans also had very high interest rates, since usually the people that wanted RALs were also the same people that rely upon cash advances. There are also Electronic Refund Checks (which ironically are paper checks for the consumer, not electronic deposits), direct deposits, and prepaid debit cards. Despite the fact that these same methods of refund payments are offered by the IRS themselves, preparers and banks alike sold these to collect fees for essentially no work. I'm not sure how similar these bank products for student loans are, but I wanted to shed some light on them anyways. Regardless of how badly you need money, **do not ever accept money through a bank product.** If it benefited you more, banks and preparers would not offer these. (Source: telemarketing at a tax preparation software company)" }, { "docid": "474042", "title": "", "text": "The benefit of paying into a pension is that the payment is effectively made from pre-tax money. Either you pay from your own pocket and then you get income tax relief on the payment, i.e. your gross salary is reduced by the gross pension contribution and income tax is recalculated with the excess either refunded to you or put in your pension (the details are a bit more complicated depending on your marginal tax rate, but the end result is the same). Or your company pays, and then you are never charged tax on the payment in the first place. From the company's point of view, the two are roughly the same. Either it pays you who then pays into your pension, or it pays straight into your pension. Either way the money going out from the company is treated as a cost that is offset against the company's revenue, reducing the amount of corporation tax the company has to pay. There are some National Insurance advantages to paying directly into the pension; neither you nor the company gets relief on NI if the payment goes via you, but no NI is paid in the first place if it goes direct from the company. [EDIT: your question is actually worded to suggest that you want to lend your company money from your own pocket, and then have that loan directly discharged by the company paying into your pension. That's no different to you just paying into your pension directly, and wouldn't have any better tax implications. For the rest of my answer, I assume that the idea is actually to lend your company money that it uses to make an immediate contribution to your pension (as part of your pay from that company), and then the company will repay the loan later by returning the money to you personally. Your pension and you are two separate entities legally.] However, in your case, what you're proposing is that the company should effectively make a loss paying into your pension: it's going to end up with more costs than revenue. So, there won't be any immediate tax saving because there wasn't revenue to pay corporation tax on in the first place. You also won't save tax because the loan will be made from previously taxed income or whatever. However, there will be a tax loss that can be carried forward and offset against future profits, so if you expect the company to make money in future to repay the loan, you might end up saving some corporation tax. You can also sometimes carry a tax loss back one year, so if your company had profits last year you could get some corporation tax back immediately. The repayment of the loan itself won't be subject to income tax as it's not income. So unless you can carry the loss back, you won't get any immediate tax relief by doing this, but it might give you a way to carry forward your annual allowance to future years, i.e. use it now and get the tax advantage later. However, the annual allowance can already be carried forward by up to three years, so this is only worthwhile if you expect that future revenue to repay the loan to arrive more than three years later. Also, this is only worthwhile if you'll continue to max out the annual allowance for paying into your pension in future years, otherwise you might as well just make the pension payment using that same revenue in future years. However, even if this beneficial tax-wise, I'm not sure if it's actually allowed; this might be viewed as an artificial transaction to avoid tax, and that could lead to HMRC disallowing the future tax relief. You might need to ask HMRC or an accountant about that. If you do make the loan, make sure it's clearly documented so you can show in future why the repayment shouldn't be treated as income." }, { "docid": "314163", "title": "", "text": "Advantages of buying: With every mortgage payment you build equity, while with rent, once you sign the check the money is gone. Eventually you will own the house and can live there for free. You can redecorate or remodel to your own liking, rather than being stuck with what the landlord decides is attractive, cost-effective, etc. Here in the U.S. there are tax breaks for homeowners. I'm not sure if that's true in U.K. Advantages of renting: If you decide to move, you may be stuck paying out a lease, but the financial penalty is small. With a house, you may find it difficult to sell. You may be stuck accepting a big loss or having to pay a mortgage on the empty house while you are also paying for your new place. When there are maintenance issues, you call the landlord and it's up to him to fix it. You don't have to come up with the money to pay for repairs. You usually have less maintenance work to do: with a house you have to mow the lawn, clear snow from the driveway, etc. With a rental, usually the landlord does that for you. (Not always, depends on type of rental, but.) You can often buy a house for less than it would cost to rent an equivalent property, but this can be misleading. When you buy, you have to pay property taxes and pay for maintenance; when you rent, these things are included in the rent. How expensive a house you can afford to buy is not a question that can be answered objectively. Banks have formulas that limit how much they will loan you, but in my experience that's always been a rather high upper bound, much more than I would actually be comfortable borrowing. The biggest issue really is, How important is it to you to have a nice house? If your life-long dream is to have a big, luxurious, expensive house, then maybe it's worth it to you to pour every spare penny you have into the mortgage. Other people might prefer to spend less on their house so that they have spare cash for a nice car, concert tickets, video games, cocaine, whatever. Bear in mind that if you get a mortgage that you can just barely afford, what do you do if something goes wrong and you can't afford it any more? What if you lose your job and have to take a lower-paying job? What if some disaster strikes and you have some other huge expense? Etc. On the flip side, the burden of a mortgage usually goes down over time. Most people find that their incomes go up over time, between inflation and growing experience. But the amount of a mortgage is fixed, or if it varies it varies with interest rates, probably bouncing up and down rather than going steadily up like inflation. So it's likely -- not at all certain, but likely -- that if you can just barely afford the payment now, that in 5 or 10 years it won't be as big a burden." }, { "docid": "257625", "title": "", "text": "\"This question and your other one indicate you're a bit unclear on how capital gains taxes work, so here's the deal: you buy an asset (like shares of stock or a mutual fund). You later sell it for more than you bought it for. You pay taxes on your profit: the difference between what you sold it for and what you bought it for. What matters is not the amount of money you \"\"withdraw\"\", but the prices at which assets are bought and sold. In fact, often you will be able to choose which individual shares you sell, which means you have some control over the tax you pay. For a simple example, suppose you buy 10 shares of stock for $100 each in January (an investment of $1000); we'll call these the \"\"early\"\" shares. The stock goes up to $200 in July, and you buy 10 more shares (investing an additional $2000); we'll call these the \"\"late\"\" shares. Then the stock drops to $150. Suppose you want $1500 in cash, so you are going to sell 10 shares. The 10 early shares you bought have increased in value, because you bought then for $100 but can now sell them for $150. The 10 late shares have decreased in value, because you bought them for $200 but can now only sell them for $150. If you choose to sell the early shares, you will have a capital gain of $500 ($1500 sale price minus $1000 purchase price), on which you may owe taxes. If you sell the late shares, you will have a capital loss of $500 ($1500 sale price minus $2000 purchase price is -$500), which you can potentially use to reduce your taxes. Or you could sell 5 of each and have no gain or loss (selling five early shares for $150 gives you a gain of $250, but selling five late shares for $150 gives you a loss of $250, and they cancel out). The point of all this is to say that the tax is not determined by the amount of cash you get, but by the difference between the sale price and the price you purchased for (known as the \"\"cost basis\"\"), and this in turn depends on which specific assets you sell. It is not enough to know the total amount you invested and the total gain. You need to know the specific cost basis (i.e., original purchase price) of the specific shares you're selling. (This is also the answer to your question about long-term versus short-term gains. It doesn't matter how much money you make on the sale. What matters is how long you hold the asset before selling it.) That said, many brokers will automatically sell your shares in a certain order unless you tell them otherwise (and some won't let you tell them otherwise). Often they will use the \"\"first in, first out\"\" rule, which means they will always sell the earliest-purchased shares first. To finally get to your specific question about Betterment, they have a page here that says they use a different method. Essentially, they try to sell your shares in a way that minimizes taxes. They do this by first selling shares that have a loss, and only then selling shares that have a gain. This basically means that if you want to cash out $X, and it is possible to do it in a way that incurs no tax liability, they will do that. What gets me very confused is if I continue to invest random amounts of money each month using Betterment, then I need to withdraw some cash, what are the tax implications. As my long answer above should indicate, there is no simple answer to this. The answer is \"\"it depends\"\". It depends on exactly when you bought the shares, exactly how much you paid for them, exactly when and how much the price rose or fell, and exactly how much you sell them for. Betterment is more or less saying \"\"Don't worry about any of this, trust us, we will handle everything so that your tax is minimized.\"\" A final note: if you really do want to track the details of your cost basis, Betterment may not be for you, because it is an automated platform that may do a lot of individual trades that a human wouldn't do, and that can make tracking the cost basis yourself very difficult. Almost the whole point of something like Betterment is that you are supposed to give them your money and forget about these details.\"" } ]

[ { "docid": "513362", "title": "", "text": "Yes, the business can count that as an expense but you will need to count that as income because a computer = money." } ]

[ { "docid": "536374", "title": "", "text": "\"Re: Specifically, am I right in that everything I put on these is deducted from tax, or are there other rules? and Am I correctly understanding this as \"\"anything above £3,600 per year will not be deducted from your tax\"\"? Neither interpretation seems quite right… Unless what you mean is this: The contributions (to a pension, or to the share-save scheme) are deducted from your pay before it is taxed. That's how it works for employer-run pension schemes. In other words, you are paying the gross amount you earn into the pension, not the amount after tax. It's a tax-efficient way to save, because: compared to other forms of saving: (The bit about the £3,600: you can ignore this assuming you're earning more than £3,600 a year.) What happens to the pension if you decide to move back to France or another country? In some cases you can transfer tax free. Worst case, you'd pay some tax on the transfer but not more than 25%. [See here for the current rules: https://www.gov.uk/transferring-your-pension/transferring-to-an-overseas-pension-scheme. Re: the share scheme, if by 'salary exchange' you mean salary sacrifice (where your gross pay is officially reduced by that amount e.g. £150 a month), that's even more tax-efficient, because it saves you paying the National Insurance contribution too (approx 9% of the pay packet). Conclusion: Saving into pension and company share save schemes is supremely tax-efficient and, provided you're OK with your money being locked away until you're 57 (pension) or tied up in company shares, it's understandably many people's priority to make use of these schemes before considering other forms of saving where you pay into them from your salary after tax. Now, about this: I am trying to understand how much I should put into it Should I put money into these, or should look for another way to save (how will this work out if I go back to France or another country)? Nobody here can advise you what to do since individuals' goals and circumstances are different and we don't know enough of the picture. That said: FWIW, I'll tell you what I might do based solely on what you've told us in the question… First, I'd definitely contribute 6% to the company pension. This gets you the full employer match. That's free money (plus, remember the tax relief = more free money). If you're 27, a total of 12% salary into a pension a year is a decent rate to start saving for retirement. Actually, 14% would be generally advisable, and maybe more still – it's generally a case of 'the more the better' especially while young, as you have time for growth and you don't know what later priorities might change / financial needs might arise. Nevertheless, you said you might move overseas. So in your position I would then:\"" }, { "docid": "287923", "title": "", "text": "\"Offset against taxable gains means that the amount - $25 million in this case - can be used to reduce another sum that the company would otherwise have to pay tax on. Suppose the company had made a profit of $100 million on some other investments. At some point, they are likely to have to pay corporation tax on that amount before being able to distribute it as a cash dividend to shareholders. However if they can offset the $25 million, then they will only have to pay tax on $75 million. This is quite normal as you usually only pay tax on the aggregate of your gains and losses. If corporation tax is about 32% that would explain the claimed saving of approximately $8 million. It sounds like the Plaintiffs want the stock to be sold on the market to get that tax saving. Presumably they believe that distributing it directly would not have the same effect because of the way the tax rules work. I don't know if the Plaintiffs are right or not, but if they are the difference would probably come about due to the stock being treated as a \"\"realized loss\"\" in the case where they sell it but not in the case where they distribute it. It's also possible - though this is all very speculative - that if the loss isn't realised when they distribute it directly, then the \"\"cost basis\"\" of the shareholders would be the price the company originally paid for the stock, rather than the value at the time they receive it. That in turn could mean a tax advantage for the shareholders.\"" }, { "docid": "13732", "title": "", "text": "\"Also, in the next sentence, what is buyers commission? Is it referring to the share holder? Or potential share holder? And why does the buyer get commission? The buyer doesn't get a commission. The buyer pays a commission. So normally a buyer would say, \"\"I want to buy a hundred shares at $20.\"\" The broker would then charge the buyer a commission. Assuming 4%, the commission would be So the total cost to the buyer is $2080 and the seller receives $2000. The buyer paid a commission of $80 as the buyer's commission. In the case of an IPO, the seller often pays the commission. So the buyer might pay $2000 for a hundred shares which have a 7% commission. The brokering agent (or agents may share) pockets a commission of $140. Total paid to the seller is $1860. Some might argue that the buyer pays either way, as the seller receives money in the transaction. That's a reasonable outlook. A better way to say this might be that typical trades bill the buyer directly for commission while IPO purchases bill the seller. In the typical trade, the buyer negotiates the commission with the broker. In an IPO, the seller does (with the underwriter). Another issue with an IPO is that there are more parties getting commission than just one. As a general rule, you still call your broker to purchase the stock. The broker still expects a commission. But the IPO underwriter also expects a commission. So the 7% commission might be split between the IPO underwriter (works for the selling company) and the broker (works for the buyer). The broker has more work to do than normal. They have to put in the buyer's purchase request and manage the price negotiation. In most purchases, you just say something like \"\"I want to offer $20 a share\"\" or \"\"I want to purchase at the market price.\"\" In an IPO, they may increase the price, asking for $25 a share. And they may do that multiple times. Your broker has to come back to you each time and get a new authorization at the higher price. And you still might not get the number of shares that you requested. Beyond all this, you may still be better off buying an IPO than waiting until the next day. Sure, you pay more commission, but you also may be buying at a lower price. If the IPO price is $20 but the price climbs to $30, you would have been better off paying the IPO price even with the higher commission. However, if the IPO price is $20 and the price falls to $19.20, you'd be better off buying at $19.20 after the IPO. Even though in that case, you'd pay the 4% commission on top of the $19.20, so about $19.97. I think that the overall point of the passage is that the IPO underwriter makes the most money by convincing you to pay as high an IPO price as possible. And once they do that, they're out of the picture. Your broker will still be your broker later. So the IPO underwriter has a lot of incentive to encourage you to participate in the IPO instead of waiting until the next day. The broker doesn't care much either way. They want you to buy and sell something. The IPO or something else. They don't care much as to what. The underwriter may overprice the stock, as that maximizes their return. If they can convince enough people to overpay, they don't care that the stock falls the day after that. All their marketing effort is to try to achieve that result. They want you to believe that your $20 purchase will go up to $30 the next day. But it might not. These numbers may not be accurate. Obviously the $20 stock price is made up. But the 4% and 7% numbers may also be inaccurate. Modern online brokers are very competitive and may charge a flat fee rather than a percentage. The book may be giving you older numbers that were correct in 1983 (or whatever year). The buyer's commission could also be lower than 4%, as the seller also may be charged a commission. If each pays 2%, that's about 4% total but split between a buyer's commission and a seller's commission.\"" }, { "docid": "93573", "title": "", "text": "There are a number of ways to get out of debt. First, stop spending on that card. You could apply for a 0% APR credit card and if you qualify with a credit limit equal (or higher) than what you have now, then you could transfer the balance and start on paying that down. You could also work out a payment plan with Chase - they would rather have some of the money vs. none of it. But you need to reach out sooner rather than later to avoid having it sent to collections. Since your cash flow is terrible, you could also pick up a second or third part time job - deliver pizzas, work at the mall, whatever, to help increase your cash flow and use that money to pay down your debts. The Federal Trade Commission has some resources on how to cope with debt." }, { "docid": "202179", "title": "", "text": "\"I think the key point that's making the other commenters misunderstand each other here is the concept of \"\"deductions\"\". I can only speak for the UK, but that's only a concept that business owners would understand in this country. For things like child credits or low income tax credits, we don't get paid them at the end of the tax year, but into our bank accounts every couple of weeks all year round. Therefore, we have nothing to \"\"deduct\"\". If we work for a company and have business expenses, then the company pays for them. If we make interest on our savings, the bank pays it for us. We make money at our jobs, and the employer works out what taxes and national insurance we owe, based on a tax code that the government works out for us annually (which we can challenge). To be fair, it's not like we're free from bureaucracy if we want to claim these benefits. There are often lots of forms if you want child benefit or disability allowances, for instance. We just apply as soon as we're eligible, rather than waiting to get a lump sum rebate. So it appears to be a very different system, and neither is inherently better than the other (though I'm personally glad I don't usually have to fill in a big tax return myself, which I only did one year when I was self employed). I'd be interested to know, since Google has let me down, which countries use the American system, and which the British or Czech.\"" }, { "docid": "532259", "title": "", "text": "Can I transfer these money to India in my saving account? What will be tax implication to me? Yes you can. Whether you transfer to India or not does not change your tax obligation. If I understand correctly you are being paid an allowance in UK to cover your expense. If you are saving; then the saving portion is treated as income and you have to self declare this and pay tax according to you tax bracket. Can I transfer these money to my wife's account as a gift? What will be tax implication to me and my wife? There is no tax obligation to your wife. The tax obligation remain same to you as in first point. What if i transfer these money as loan refund to my friend? What will be tax implication for these to me and my friend? If there is proper paper trial to show your friend loaned you a sum at zero percentage and you have paid back; amounts are not to large; then there is no tax obligation to your friend. The tax obligation remains same to you as in point 1." }, { "docid": "103176", "title": "", "text": "As far as I know (I am not a tax professional or IFA!) there would be no tax implications or other burden on the recipient of the loan under UK law, even if it ended up being treated as a gift rather than a loan. There are no clauses about money being in the account for 90 days in UK housing transactions, however under money laundering rules your brother's solicitor might need sight of loan agreements to verify where the funds came from (I think it would depend on whether you paid the money to your brother direct, in which case there would be no problem, or if you paid it direct to the solicitor for the purchase). What Canadian law might say about capital gains / inheritance tax (if the Canadian IRS did decide the loan counted as a gift) I have no idea." }, { "docid": "405115", "title": "", "text": "Of course, you've already realized that some of that is that smaller estates are more common than larger estates. But it seems unlikely that there are four times as many estates between $10 and $11 million as above that range. People who expect to die with an estate subject to inheritance tax tend to prepare. I don't know how common it is, but if the surviving member of a couple remarries, then the new spouse gets a separate exemption. And of course spouses inherit from spouses without tax. In theory this could last indefinitely. In practice, it is less likely. But if a married couple has $20 million, the first spouse could leave $15 million to the second and $5 million to other heirs. The second spouse could leave $10 million to a third spouse (after remarrying) and another $5 million to children with the first spouse. All without triggering the estate tax. People can put some of their estate into a trust. This can allow the heirs to continue to control the money while not paying inheritance tax. Supposedly Ford (of Ford Motor Company) took that route. Another common strategy is to give the maximum without gift tax each year. That's at least $14k per donor and recipient per year. So a married couple with two kids can transfer $56k per year. Plus $56k for the kids' spouses. And if there are four grandchildren, that's another $112k. Great-grandchildren count too. That's more than a million every five years. So given ten years to prepare, parents can transfer $2 million out of the estate and to the heirs without tax. Consider the case of two wealthy siblings. They've each maxed out their gifts to their own heirs. So they agree to max out their gifts to their sibling's heirs. This effectively doubles the transfer amount without tax implication. Also realize that they can pretransfer assets at the current market rate. So if a rich person has an asset that is currently undervalued, it may make sense to transfer it immediately as a gift. This will use up some of the estate exemption. But if you're going to transfer the asset eventually, you might as well do so when the value is optimal for your purpose. These are just the easy things to do. If someone wants, they can do more complicated things that make it harder for the IRS to track value. For example, the Bezos family invested in Amazon.com when Jeff Bezos was starting it. As a result, his company could survive capital losses that another company might not. The effect of this was to make him fabulously rich and his parents richer than they were. But he won't pay inheritance tax until his parents actually transfer the estate to him (and I believe they actually put it in a charitable trust). If his company had failed instead, he still would have been supported by the capital provided by his parents while it was open (e.g. his salary). But he wouldn't have paid inheritance tax on it. There are other examples of the same pattern: Fred Smith of FedEx; Donald Trump; Bill Gates of Microsoft; etc. The prime value of the estate was not in its transfer, but in working together while alive or through a family trust. The child's company became much more valuable as a result of a parent's wealth. And in two of those examples, the child was so successful that the parent became richer as a result. So the parent's estate does count. Meanwhile, another company might fail, leaving the estate below the threshold despite a great deal of parental support. And those aren't even fiddles. Those children started real companies and offered their parents real investment opportunities. A family that wants to do so can do a lot more with arrangements. Of course, the IRS may be looking for some of them. The point being that the estate might be more than $11 million earlier, but the parents can find ways to reduce it below the inheritance tax exemption by the time that they die." }, { "docid": "513051", "title": "", "text": "\"Interesting as I am in the exact same situations as yourself. I, in fact, just incorporated. You will be able \"\"save\"\" more in taxes in the end. The reason I put \"\"save\"\" in quotes, is that you don't necessarily save on taxes, but you can defer taxes. The driving factor behind this is that you specify your own fiscal calendar/year. Incorporating allows you to defer income for up to 6 months. Meaning that if you make your fiscal year starting in August or September, for example, you can claim that income on the following year (August + 6 months = February). It allows you to keep the current year taxes down. Also, any income left over at year end, is taxed at 15% (the Corporation rate) rather than the 30-40% personal rate you get with a sole-proprietorship. In a nutshell, with sole-proprietorship, all income is taxable (after write-offs)... in a corporation, you can take some of that income and keep it in the corporation (gives your company a \"\"value\"\"), and is only taxed at 15% - big saving there. I primarily work with US businesses. I am, however, a dual-citizen, US and Canadian, which allowed me as a sole-proprietor, to easily work with US companies. However, as a sole-proprietor or a Corporation, you simply need to get an EIN from the IRS and any US company will report earnings to that number, with no deductions. At year end, it is your responsibility to file the necessary tax forms and pay the necessary taxes to both countries. Therefore you can solicit new US business if you choose, but this is not restricted to corporations. The real benefit in incorporating is what I mentioned above. My suggestion to you is to speak with you CA, who can outline all benefits. Revenue Canada's website had some good information on this topic as well. Please let me know if you need anything else explained.\"" }, { "docid": "407505", "title": "", "text": "\"This answer will expand a bit on the theory. :) A company, as an entity, represents a pile of value. Some of that is business value (the revenue stream from their products) and some of that is assets (real estate, manufacturing equipment, a patent portfolio, etc). One of those assets is cash. If you own a share in the company, you own a share of all those assets, including the cash. In a theoretical sense, it doesn't really matter whether the company holds the cash instead of you. If the company adds an extra $1 billion to its assets, then people who buy and sell the company will think \"\"hey, there's an extra $1 billion of cash in that company; I should be willing to pay $1 billion / shares outstanding more per share to own it than I would otherwise.\"\" Granted, you may ultimately want to turn your ownership into cash, but you can do that by selling your shares to someone else. From a practical standpoint, though, the company doesn't benefit from holding that cash for a long time. Cash doesn't do much except sit in bank accounts and earn pathetically small amounts of interest, and if you wanted pathetic amounts of interests from your cash you wouldn't be owning shares in a company, you'd have it in a bank account yourself. Really, the company should do something with their cash. Usually that means investing it in their own business, to grow and expand that business, or to enhance profitability. Sometimes they may also purchase other companies, if they think they can turn a profit from the purchase. Sometimes there aren't a lot of good options for what to do with that money. In that case, the company should say, \"\"I can't effectively use this money in a way which will grow my business. You should go and invest it yourself, in whatever sort of business you think makes sense.\"\" That's when they pay a dividend. You'll see that a lot of the really big global companies are the ones paying dividends - places like Coca-Cola or Exxon-Mobil or what-have-you. They just can't put all their cash to good use, even after their growth plans. Many people who get dividends will invest them in the stock market again - possibly purchasing shares of the same company from someone else, or possibly purchasing shares of another company. It doesn't usually make a lot of sense for the company to invest in the stock market themselves, though. Investment expertise isn't really something most companies are known for, and because a company has multiple owners they may have differing investment needs and risk tolerance. For instance, if I had a bunch of money from the stock market I'd put it in some sort of growth stock because I'm twenty-something with a lot of savings and years to go before retirement. If I were close to retirement, though, I would want it in a more stable stock, or even in bonds. If I were retired I might even spend it directly. So the company should let all its owners choose, unless they have a good business reason not to. Sometimes companies will do share buy-backs instead of dividends, which pays money to people selling the company stock. The remaining owners benefit by reducing the number of shares outstanding, so they own more of what's left. They should only do this if they think the stock is at a fair price, or below a fair price, for the company: otherwise the remaining owners are essentially giving away cash. (This actually happens distressingly often.) On the other hand, if the company's stock is depressed but it subsequently does better than the rest of the market, then it is a very good investment. The one nice thing about share buy-backs in general is that they don't have any immediate tax implications for the company's owners: they simply own a stock which is now more valuable, and can sell it (and pay taxes on that sale) whenever they choose.\"" }, { "docid": "102237", "title": "", "text": "An instant 15% profit sounds good to me, so you can't go wrong selling as soon as you are able. Here are a couple other considerations: Tax implications: When you sell the stock, you have to pay taxes on the profit (including that 15% discount). The tax rate you pay is based on how long you wait to sell it. If you wait a certain amount of time (usually 2 years, but it will depend on your specific tax codes) before you sell, you could be subject to lower tax rates on that profit. See here for a more detailed description. This might only apply if you're in the US. Since you work for the company, you may be privy to a bit more information about how the company is run and how likely it is to grow. As such, if you feel like the company is headed in the right direction, you may want to hold on the the stock for a while. I am generally wary of being significantly invested in the company you work for. If the company goes south, then the stock price will obviously drop, but you'll also be at risk to be laid off. As such you're exposed much more risk than investing in other companies. This is a good argument to sell the stock and take the 15% profit.* * - I realize your question wasn't really about whether to sell the stock, but more for when, but I felt this was relevant nonetheless." }, { "docid": "547333", "title": "", "text": "\"&gt; You are the one using false equivalency No, I am using a rather simple parallel to show that 'consent' is socially created and can exist non-explicitly. Your response is simply to assert your own opinion, that you have not consented to the state, without any reason to take that view seriously. You grew up under the rule of your state, you were educated about the implications of that long before you were expected to start paying taxes, and there is nothing preventing you from leaving the state's jurisdiction at any time. Your opinion that this does *not* indicate consent is irrelevant because the whole rest of society thinks that it does. If arbitrarily asserting that you haven't consented to things *was* an argument, literally anything can be oppressive. I can walk into your home and set up camp in your living room and say \"\"I didn't consent to this being your house.\"\" All social rules are instantly out the window. Is that how society works? I've jumped through these hoops before. I know how you people try and pull this off. It doesn't work. Your position is not tenable. It's just a series of language tricks that entertains people who haven't thought it all the way through. You're either a charlatan or you've been deceived by one, and I don't really care to learn which. Quoting myself from weeks ago: &gt; &gt; &gt; &gt; I'd like to know how exactly I opt into paying. &gt; &gt; &gt; By choosing to occupy the territory ruled by your state, despite being fully informed about the implications of doing so, and having been made informed well before you had an obligation to start paying. &gt; &gt; That's not an agreement. &gt; Let's say I walk into a shop, say \"\"I'll have a medium coke please,\"\" they hand me one, I walk out of the building. Am I stealing? Well, I didn't specifically agree to pay for it, did I? But that argument wouldn't hold much weight in an actual legal dispute, because obviously I understand that when you ask for an item in a shop you're implicitly agreeing to pay for it at some point. &gt; &gt; But what about some less \"\"obvious\"\" cases? If a shopowner put a small sign near the entryway that said \"\"entry fee ten dollars, entering the store constitutes agreement to pay,\"\" you could reasonably argue this is invalid because you walked into the store without noticing the sign and the practice is quite unusual. But if instead of a shop it were a theater performance you walked into, maybe that argument wouldn't hold up, because you should be expected to understand there's an entry fee at a theater. And maybe if you were from a country that doesn't have theaters and you were thus genuinely unaware of this particular social custom they would make an exception and you'd get away with it. This is the kind of problem a judicial system exists for, to take social context into account. &gt; &gt; The point is, whether something constitutes agreement or not, and thus what are the legal repercussions to your actions, is a matter of opinion, and in this case I don't see any particular reason to think that your opinion about the government ought to overrule that of the rest of society. Your actions are interpreted as indicating consent for the system you're acting in, and this being so if you took the government to court on the charge that it's stealing from you you would obviously lose. So how is it an argument to just say \"\"but that's not an agreement in my opinion\"\"? That's as irrelevant as me saying \"\"but I didn't agree to pay for this food I just ate, officer. I just walked in and asked for food and they gave it to me and I ate it. That's not an agreement, in my opinion.\"\" &gt;\"" }, { "docid": "298970", "title": "", "text": "\"Directors can be held responsible for the liabilities of the corporation - see this Wikipedia article - and especially if it was clear that was the reason for the arrangement, you might well find this happening. That said, I know a Canadian who sold his house to a corporation he already owned (he was doing consulting work through it) at the (in his opinion ridiculously high) amount it had been assessed for property tax purposes. The company paid and claimed any and all expenses including paying for the lawn to be mowed and the house to be painted. He lived in it at a reduced rent (this rent was then income to the company) in exchange for looking after it. He was very happy with the arrangement. He was losing the \"\"no income tax when you sell your primary residence\"\" benefit we have here, but since he expected to never be able to sell it for more than the amount the company had paid, he wasn't worried. If the company exists for no reason other than to shelter income, hide you from liability, and reduce your taxes, then I would expect it would get you some unwanted attention and possibly some rulings you didn't like. If the company exists for a real purpose, and has income and expenses that outweigh whatever games you're playing with cars and homes, you might be able to achieve this. You need to work out what the benefits (other than ducking liabilities) would be and whether they are worth the hassle.\"" }, { "docid": "254783", "title": "", "text": "I wouldn't focus too much on dividends itself; at the end of the day what matters is total gain, because you can convert capital gain into income by selling your assets (they have different tax implications, but generally capital gains tend to be more tax efficient). I think the more important question is how much volatility you can tolerate. Since your investment horizon is short & your risk tolerance is low (as in if you suddenly get much lower income than you planned from your investment you'll be in trouble), you probably want assets that have low volatility. To achieve that, I'd consider the following if I were you: tl;dr If I were you I'd just hold a general investment portfolio with a lower risk profile rather than focusing on dividend generating assets." }, { "docid": "592510", "title": "", "text": "However, if you are employed by a company that exists in a tax haven and your services are provided to an employer by that tax haven company, it is the tax haven company that gets paid, not you. Under various schemes that company need not pay you at all. For example it may make you a loan which is not taxed (ie you don't pay tax on a loan, just as you don't pay tax on the money lent you by a mortgage company). You are bound by the terms of the loan agreement to repay that loan at a rate that the company finds acceptable. Indeed the company may find eventually that it is simply convenient to write off the loan as unrecoverable. if the owners/officers of he company write off your loans, how much tax will you have paid on the money you have had as loans? The taxman can of course state that this was simply set up to avoid tax (which is illegal) so you should have a balancing scheme to show that that the loans were taken to supplement income,just as one might take a bank loan / mortgage, not replace it entirely as a tax scam. Hiring tax counsel to provide this adequate proof to HMRC has a price. Frequently this kind of loophole exists because the number of people using it were sufficiently low not to warrant policing ( if the policing costs more than the tax recovered, then it is more efficient to ignore it) or because at some stage the scheme has been perfectly legal (as in the old offshore'education' trust recommended by the government a few decades ago). When Gordon Brown set out a 75% tax rate (for his possibly ideological reasons rather than financially based ones)for those who had these accounts , he encountered opposition from MPs who were going to be caught up paying high tax bills for what was effctively retrospective taxation, so there was a built in 'loophole' to allow the funds to be returned without undue penalty. If you think that is morally wrong, consider what the response would be if a future Chancellor was to declare all IAs the work of the devil and claim that retrospective tax would need to be paid on all ISA transactions over the last few decades.eg: tot up all the dividends and capital gains made on an ISA in any year and pay 40% tax on all of them, even if that took the ISA into negative territory because the value today was low/ underperfoming. Yet this has been sggested as a way of filling in the hole in the budget on the grounds that anyone with an ISA can be represented as 'rich' to a selected party of voters." }, { "docid": "197782", "title": "", "text": "\"Here's an alternative. There are hundreds, maybe thousands, of contract engineering firms (\"\"job shops\"\") in the United States, probably hundreds in California alone. They are in the business of doing what your \"\"employer\"\" wants you to do, they know how to do it, they have been doing it for decades, working with the biggest, most-established companies in the country. They have forgotten more about providing engineering services to clients, and paying the engineers, than you can learn in a lifetime. Call a few of them. Set up meetings. Budget a few hours for it. You want to talk with the most experienced recruiter in the office, the Old Guy Who Has Been There And Done That. Explain your situation, and tell them that, rather than go through all of the headaches yourself, you want to investigate the possibility of THEM handling all the headaches, for their usual markup of course. (You can probably word this better than I can, but you get the idea.) The shop may or may not be willing to talk about their markup. My personal opinion is that this is perfectly OK. What they make off of you, after your rate is paid, is THEIR business. Also, talk about what you do, and your recommended rate. It would not surprise me to learn that you are currently grossly underpaid. AND, mention that, if the client declines, you're going to be available immediately, and you'd certainly be open to working with them. (You will see this again.) In fact, if they have any current leads that you fit, you would certainly be interested in hearing about them. (They may already have a req from another client, for which you fit, for which the client is willing to pay much more than your current \"\"employer\"\".) If it were me, personally, I'd start with Yoh, Belcan, and maybe TAD Technical. These are three of the oldest and best. I'd also hit up CE Weekly, get a subscription, and find some other shops with offices in your area. Once you have a shop lined up, then ask your \"\"employer\"\" if, rather than you setting up a personal corporation, they'd be willing to work with an established Contract Engineering firm, who does this kind of thing for a living, who does this every day, who has been doing this for decades. Doing this is simpler for everyone, and, by going through an established firm, they avoid having to teach you how to do business with them. They also avoid the risk of having you reclassified by IRS as an employee, which exposes them to all kinds of legal and financial liability. If they say \"\"No\"\", WALK AWAY FROM THEM. Immediately. They've just thrown up a HUGE red flag. This is where the other discussions with the shop come into play.\"" }, { "docid": "382908", "title": "", "text": "Can I work on 1099 from my own company instead of on W2? The reason is on W2 I can't deduct my commute, Health Insurance and some other expenses while on 1099 I think I can able do that. Since I am going to client place to work not at my own office, I am not sure whether I should able to do that or not. If you have LLC, unless you elected to tax it as a corporation, you need neither 1099 nor W2. For tax purposes the LLC is disregarded. So it is, from tax perspective, a sole proprietorship (or partnership, if multiple members). Being a W2 employee of your own LLC is a bad idea. For all these above expenses, which can I use company's debit/credit card or I need to use only my personal debit/credit card? It would be better to always use a business account for business purposes. Doesn't matter much for tax per se, but will make your life easier in case of an audit or a legal dispute (limited liability protection may depend on it). If I work on 1099, I guess I need to file some reasonable taxes on quarterly basis instead of filing at year end. If so, how do I pay my tax on quarterly basis to IRS? I mean which forms should I file and how to pay tax? Unless you're a W2 employee, you need to do quarterly estimate payments using form 1040-ES. If you are a W2 employee (even for a different job, and even if it is not you, but your spouse with whom you're filing jointly) - you can adjust your/spouse's withholding using form W4 to cover the additional tax liability. This is, IMHO, a better way than paying estimates. There are numerous questions on this, search the site or ask another one for details." }, { "docid": "466835", "title": "", "text": "\"This is several questions wrapped together: How can I diplomatically see the company's financial information? How strong a claim does a stockholder or warrantholder have to see the company's financials? What information do I need to know about the company financials before deciding to buy in? I'll start with the easier second question (which is quasi implicit). Stockholders typically have inspection rights. For example, Delaware General Corporate Law § 220 gives stockholders the right to inspect and copy company financial information, subject to certain restrictions. Check the laws and corporate code of your company's state of incorporation to find the specific inspection right. If it is an LLC or partnership, then the operating agreement usually controls and there may be no inspection rights. If you have no corporate stock, then of course you have no statutory inspection rights. My (admittedly incomplete) understanding is that warrantholders generally have no inspection rights unless somehow contracted for. So if you vest as a corporate stockholder, it'll be your right to see the financials—which may make even a small purchase valuable to you as a continuing employee with the right to see the financials. Until then, this is probably a courtesy and not their obligation. The first question is not easy to answer, except to say that it's variable and highly personal for small companies. Some people interpret it as prying or accusatory, the implication being that the founders are either hiding something or that you need to examine really closely the mouth of their beautiful gift horse. Other people may be much cooler about the question, understanding that small companies are risky and you're being methodical. And in some smaller companies, they may believe giving you the expenses could make office life awkward. If you approach it professionally, directly, and briefly (do not over-explain yourself) with the responsible accountant or HR person (if any), then I imagine it should not be a problem for them to give some information. Conversely, you may feel comfortable enough to review a high-level summary sheet with a founder, or to find some other way of tactfully reviewing the right information. In any case, I would keep the request vague, simple, and direct, and see what information they show you. If your request is too specific, then you risk pushing them to show information A, which they refuse to do, but a vague request would've prompted them to show you information B. A too-specific request might get you information X when a vague request could have garnered XYZ. Vague requests are also less aggressive and may raise fewer objections. The third question is difficult to say. My personal understanding is some perspective of how venture capitalists look at the investment opportunity (you didn't say how new this startup is or what series/stage they are on, so I'll try to stay vague). The actual financials are less relevant for startups than they are for other investments because the situation will definitely change. Most venture capital firms like to look at the burn rate or amount of cash spent, usually at a monthly rate. A high burn rate relative to infusions of cash suggests the company is growing rapidly but may have a risk of toppling (i.e. failing before exit). Burn rate can change drastically during the early life of the startup. Of course burn rate needs the context of revenues and reserves (and latest valuation is helpful as a benchmark, but you may be able to calculate that from the restricted share offer made to you). High burn rate might not be bad, if the company is booming along towards a successful exit. You might also want to look at some sort of business plan or info sheet, rather than financials alone. You want to gauge the size of the market (most startups like to claim 9- or 10-figure markets, so even a few percentage points of market share will hit revenue into the 8-figures). You'll also have to have a sense for the business plan and model and whether it's a good investment or a ridiculous rehash (\"\"it's Twitter for dogs meets Match.com for Russian Orthodox singles!\"\"). In other words, appraise it like an investor or VC and figure out whether it's a prospect for decent return. Typical things like competition, customer acquisition costs, manufacturing costs are relevant depending on the type of business activity. Of course, I wouldn't ignore psychology (note that economists and finance people don't generally condone the following sort of emotional thinking). If you don't invest in the company and it goes big, you'll kick yourself. If it goes really big, other people will either assume you are rich or feel sad for you if you say you didn't get rich. If you invest but lose money, it may not be so painful as not investing and losing out the opportunity. So if you consider the emotional aspect of personal finance, it may be wise to invest at least a little, and hedge against \"\"woulda-shoulda\"\" syndrome. That's more like emotional advice than hard-nosed financial advice. So much of the answer really depends on your particular circumstances. Obviously you have other considerations like whether you can afford the investment, which will be on you to decide. And of course, the § 83(b) election is almost always recommended in these situations (which seems to be what you are saying) to convert ordinary income into capital gain. You may also need cash to pay any up-front taxes on the § 83(b) equity, depending on your circumstances.\"" }, { "docid": "138994", "title": "", "text": "\"&gt; Thank you for the wealth of information! Sure, I hope my opinions are food for thought. &gt; 1) Does that basically translate to \"\"less tax on poor/wealthy...to promote entrepreneurship? No, your typical entrepreneur is a smart, disgruntled employee who thinks they have a better way to do a job. If you want more entrepreneurs, you should do things to help them succeed in a new company and minimize the risk. Some ways to do this: * Create a government agency that offers programs that help new companies. Guidance and funding are obvious candidates. Advertising for small local business would help too. One of the most important would be getting complementing talent together because a start-up needs the talents of at least four different people to have a good chance of succeeding. * Establish guaranteed health care. A 40-something with a wife and kids may have a great idea but can't risk to leave his family with no health insurance for the two years it would take to get his idea off the ground. * Better enforce anti-trust law. I believe small companies are stifled by big companies because the latter control too much of the market. If you want competitive markets you need to either break-up or handcuff and monitor the big players. * Create a better safety net. It is a lot easier to go on your own if you know at least you won't starve. &gt; 2) Rich using money to grow their own wealth. But wouldn't that mean as a byproduct, jobs will be made? In theory, yes, but I believe in practice the opposite happens. Big companies can make significantly more money hoarding their market share rather than branching into new markets. Here's a true story of my last company with names changed: Company A makes widgets. Company B makes bookkeeping software for tracking widgets and is very successful, controlling a majority of the market. Company A buys Company B at an inflated price. The government allows the sale on the condition that Company A does not use Company B's information on the widget market to gain an unfair advantage. Company A agrees and the buyout takes place. Company A then approaches all of Company B's customers and says, \"\"Let us look at the data on your bookkeeping software and we will give you a 5% discount.\"\" Most customers agree so Company A now has all the data controlled by Company B but this is not illegal because they got it from Company B's customers, not company B. Company A proceeds to undercut the market because it now knows exactly how much their competitors widgets sell for. Company A now controls a majority of the widget market and their market share continues to grow rapidly. By the way [here is that Bloomberg article I described earlier about repatriation being about buyouts](https://www.bloomberg.com/gadfly/articles/2017-05-08/theory-of-tax-repatriation-is-better-than-the-reality). &gt;&gt; Take home money is used for investment. It isn't. &gt; 3) I don't think I understand this one at all. Will you rephrase it for me? The argument is that we need to tax corporations less so they can invest more. Here's the problem -- investments are not taxed. A corporation's tax is a percentage of their gross income minus their expenses. Investment is an expense. Therefore the more they invest, the lower their tax bill. If you want companies to invest more, raise their tax rate. &gt; 4) I did hear from my professor and the educational videos he had shown us that the capital tax is one of the highest among the other OECD nations. I need to walk back what I said earlier. The US corporate tax rate is one of the highest. Does that mean US corporations pay the most tax? Well, [it's complicated](http://www.npr.org/2017/08/07/541797699/fact-check-does-the-u-s-have-the-highest-corporate-tax-rate-in-the-world). &gt; ...why can't we just close loop-holes instead of choosing to slash capital tax? Note that those go in opposite directions. Closing loopholes would make companies pay more. Slashing capital tax would have them pay less. Perhaps doing both would be revenue neutral. I would be in support of that because I suspect loopholes benefit big companies a lot more than small ones because they have the resources to find and exploit those loopholes. That said, people in power have been talking for 20 years about \"\"closing the loopholes\"\". They never do. [CGP Gray has an excellent video explaining why these loopholes are not going anywhere anytime soon](https://www.youtube.com/watch?v=rStL7niR7gs). &gt; 5) I think it's in each company's best interest to further their own agenda, and that agenda usually means bad for the majority. Yes, that's a much better way of saying what I meant. &gt; Thank you in advance for your time. Sure, thanks for thinking, asking questions, and making up your own mind.\"" } ]

[ { "docid": "338439", "title": "", "text": "Bartering is a tricky discussion. Yes, it definitely applies when you are self-employed and do a job that you would charge anyone else for, but what if you are helping a friend in your spare time? If you receive something in exchange, the value of the item you received would be your income, but what if you don't receive anything in exchange? If the company bought a computer that they loan to you to do occasional work for them, there's no reason you couldn't take the computer home and have that company retain ownership of the property. They could still expense the depreciation of the computer without giving it to you. If it were a car though, you would have to count mileage for personal use as income. What if you exchange occasional tech support for the use of an empty desk and Internet connection? As long as they aren't renting desks for money to others, there's probably no additional marginal cost to them if they allow you to use the space, so the fair market value question breaks down." } ]

[ { "docid": "407505", "title": "", "text": "\"This answer will expand a bit on the theory. :) A company, as an entity, represents a pile of value. Some of that is business value (the revenue stream from their products) and some of that is assets (real estate, manufacturing equipment, a patent portfolio, etc). One of those assets is cash. If you own a share in the company, you own a share of all those assets, including the cash. In a theoretical sense, it doesn't really matter whether the company holds the cash instead of you. If the company adds an extra $1 billion to its assets, then people who buy and sell the company will think \"\"hey, there's an extra $1 billion of cash in that company; I should be willing to pay $1 billion / shares outstanding more per share to own it than I would otherwise.\"\" Granted, you may ultimately want to turn your ownership into cash, but you can do that by selling your shares to someone else. From a practical standpoint, though, the company doesn't benefit from holding that cash for a long time. Cash doesn't do much except sit in bank accounts and earn pathetically small amounts of interest, and if you wanted pathetic amounts of interests from your cash you wouldn't be owning shares in a company, you'd have it in a bank account yourself. Really, the company should do something with their cash. Usually that means investing it in their own business, to grow and expand that business, or to enhance profitability. Sometimes they may also purchase other companies, if they think they can turn a profit from the purchase. Sometimes there aren't a lot of good options for what to do with that money. In that case, the company should say, \"\"I can't effectively use this money in a way which will grow my business. You should go and invest it yourself, in whatever sort of business you think makes sense.\"\" That's when they pay a dividend. You'll see that a lot of the really big global companies are the ones paying dividends - places like Coca-Cola or Exxon-Mobil or what-have-you. They just can't put all their cash to good use, even after their growth plans. Many people who get dividends will invest them in the stock market again - possibly purchasing shares of the same company from someone else, or possibly purchasing shares of another company. It doesn't usually make a lot of sense for the company to invest in the stock market themselves, though. Investment expertise isn't really something most companies are known for, and because a company has multiple owners they may have differing investment needs and risk tolerance. For instance, if I had a bunch of money from the stock market I'd put it in some sort of growth stock because I'm twenty-something with a lot of savings and years to go before retirement. If I were close to retirement, though, I would want it in a more stable stock, or even in bonds. If I were retired I might even spend it directly. So the company should let all its owners choose, unless they have a good business reason not to. Sometimes companies will do share buy-backs instead of dividends, which pays money to people selling the company stock. The remaining owners benefit by reducing the number of shares outstanding, so they own more of what's left. They should only do this if they think the stock is at a fair price, or below a fair price, for the company: otherwise the remaining owners are essentially giving away cash. (This actually happens distressingly often.) On the other hand, if the company's stock is depressed but it subsequently does better than the rest of the market, then it is a very good investment. The one nice thing about share buy-backs in general is that they don't have any immediate tax implications for the company's owners: they simply own a stock which is now more valuable, and can sell it (and pay taxes on that sale) whenever they choose.\"" }, { "docid": "593101", "title": "", "text": "Several things to consider: I don't see why your friend should pay any tax. It's not his income at all. And I am not sure where your income should be taxed in this scenario. Is he declaring it as his income somehow? The bank won't do it for him, the transfer as such should be transparent. On the other hand, money transiting on his account could in principle look suspicious, although €300 is unlikely to raise alarm. What I do know is that if you do pay taxes, 20% is not particularly high as such. There are four brackets of income tax (and tax-like contributions to the pension system) in the Netherlands, between 36.55% and 52%. Rates for personal taxes in the Netherlands are simply way higher than what you might be used to in Eastern Europe or what has been mentioned in comments. In fact, if anything, 20% seems too low. I am at a loss guessing what it could correspond to, you could ask your friend how he came to that number. There various tax discounts (kortingen) and deductions (aftreken) that apply to freelance work (and some that apply to all incomes). €3000 yearly is quite low and would probably not be taxed at all if you were recently registered as freelance (zzp'er) in the Netherlands and had no other sources of income. But on the other hand, if your money is treated as being part of your friend's income, these wouldn't apply, as he is probably already benefiting from them. There are special rules for copyright fees. Not sure this is necessarily 100% kosher but I have met people who got paid that way for articles they wrote in trade publications." }, { "docid": "97962", "title": "", "text": "There are 2 basic ways to have someone buy partial ownership of your company: OR If they buy shares that you already own, then their shares will have the same rights as yours (same voting rights, same dividend rights, etc.). If they buy shares newly created from the company, they could be either identical shares to what you already own, or they could be a new class of shares [you may need to adjust the articles of incorporation if you did not plan ahead with multiple share classes]. You really need to talk to a lawyer & tax accountant about this. There are a lot of questions you need to consider here. For example: do you want to use the money in the business, or would you rather have it personally? Are you concerned about losing some control of how the business is run? What are the short term and long-term tax consequences of each method? What does your new partner want in terms of their share class? The answers to these questions will be highly valuable, and likely worth much more than the fees you will need to pay. At the very least, you will likely need a lawyer and accountant anyway to ensure the filings & taxes are done correctly, so better to involve them now, rather than later. There are many other situations to consider here, and an online forum is not the best place to get advice that might put you in a sticky legal situation later on." }, { "docid": "180148", "title": "", "text": "\"There are a couple of different things that could be referenced by \"\"cheap money\"\": The money supply itself - This is the Federal Reserve printing more money which could devalue the existing US dollars and thus make the dollars even cheaper since there would be more of them. Interest rates - Currently in the US interest rates are rather low which means that borrowers could possibly get good rates on that money thus making it relatively cheap. Compare current interest rates to the early 1980s and there is a major difference. In terms of implications on the stock market, there are a couple that come to my mind: Investment options - With low interest rates, cash and bonds aren't necessarily yielding that much and thus some people may be more likely to invest elsewhere with stocks being an option. Thus, there may be some people that would rather invest in stocks than hold their investments in lower-yielding options. Corporate spending - If rates stay low, then for companies with good financial track records, they could borrow money to expand operations rather than sell more stock and thus there may be companies that borrow to grow so that they take advantage of these interest rates.\"" }, { "docid": "103176", "title": "", "text": "As far as I know (I am not a tax professional or IFA!) there would be no tax implications or other burden on the recipient of the loan under UK law, even if it ended up being treated as a gift rather than a loan. There are no clauses about money being in the account for 90 days in UK housing transactions, however under money laundering rules your brother's solicitor might need sight of loan agreements to verify where the funds came from (I think it would depend on whether you paid the money to your brother direct, in which case there would be no problem, or if you paid it direct to the solicitor for the purchase). What Canadian law might say about capital gains / inheritance tax (if the Canadian IRS did decide the loan counted as a gift) I have no idea." }, { "docid": "65040", "title": "", "text": "As the owner of the S-corp, it is far easier for you to move money in/out of the company as contributions and distributions rather than making loans to the company. Loans require interest payments, 1099-INT forms, and have tax consequences, whereas the distributions don't need to be reported because you pay taxes on net profits regardless of whether the money was distributed. If you were paid interest, disregard this answer. I don't know if or how you could re-categorize the loan once there's a 1099-INT involved. If no interest was ever paid, you just need to account for it properly: If the company didn't pay you any interest and never issued you a 1099-INT form (i.e. you wrote a check to the company, no promissory note, no tax forms, no payments, no interest, etc.) then you can categorize that money as a capital contribution. You can likewise take that money back out of the company as a capital distribution and neither of these events are taxable nor do they need to be reported to the IRS. In Quickbooks, create the following Equity accounts -- one for each shareholder making capital contributions and distributions: When putting money into the company, deposit into your corporate bank account and use the Capital Contribution equity account. When taking money out of the company, write yourself a check and use the Distributions account. At the end of every tax year, you can close out your Contributions and Distributions to Retained Earnings by making a general journal entry. For example, debit retained earnings and credit distributions on Dec 31 every year to zero-out the distributions account. For contributions, do the reverse and credit retained earnings. There are other ways of recording these transactions -- for example I think some people just use a Member Capital equity account instead of separate accounts for contributions and distributions -- and QB might warn you about posting journal entries to the special Retained Earnings account at the end of the year. In any case, this is how my CPA set up my books and it's been working well enough for many years. Still, never a bad idea to get a second opinion from your CPA. Be sure to pay yourself a reasonable salary, you can't get out of payroll taxes and just distribute profits -- that's a big red flag that can trigger an audit. If you're simply distributing back the money you already put into the company, that should be fine." }, { "docid": "55954", "title": "", "text": "(Note: The OP does not state whether the employer-sponsored retirement savings are pre-tax or post-tax (such as a Roth 401(k)). The following answer assumes the more common case of a pre-tax plan.) This is a bad idea, IMHO. IRS Pub 970 lists exceptions to the 10% early withdrawal penalty for educational expenses. This doesn't include, as far as I can tell, student loan payments. So withdrawing from your retirement account would incur both income tax and penalties. Even if there were an exception, you'd still have to pay income taxes, which, depending on the amount and your income, could be at a higher marginal rate than you are currently paying. If you really want the debt gone as soon as possible, why not reduce the amount you contribute to the retirement plan (but not below the amount that gets you the maximum employer match) and use that money to increase your monthly payments to the student loan? Note that, if you do this, you will pay taxes on income that would have been tax-deferred in order to save money on interest, so there's still a trade-off. (One more thing: rather than rolling over to your new company's plan, you could roll over to a self-directed Traditional IRA.)" }, { "docid": "382908", "title": "", "text": "Can I work on 1099 from my own company instead of on W2? The reason is on W2 I can't deduct my commute, Health Insurance and some other expenses while on 1099 I think I can able do that. Since I am going to client place to work not at my own office, I am not sure whether I should able to do that or not. If you have LLC, unless you elected to tax it as a corporation, you need neither 1099 nor W2. For tax purposes the LLC is disregarded. So it is, from tax perspective, a sole proprietorship (or partnership, if multiple members). Being a W2 employee of your own LLC is a bad idea. For all these above expenses, which can I use company's debit/credit card or I need to use only my personal debit/credit card? It would be better to always use a business account for business purposes. Doesn't matter much for tax per se, but will make your life easier in case of an audit or a legal dispute (limited liability protection may depend on it). If I work on 1099, I guess I need to file some reasonable taxes on quarterly basis instead of filing at year end. If so, how do I pay my tax on quarterly basis to IRS? I mean which forms should I file and how to pay tax? Unless you're a W2 employee, you need to do quarterly estimate payments using form 1040-ES. If you are a W2 employee (even for a different job, and even if it is not you, but your spouse with whom you're filing jointly) - you can adjust your/spouse's withholding using form W4 to cover the additional tax liability. This is, IMHO, a better way than paying estimates. There are numerous questions on this, search the site or ask another one for details." }, { "docid": "447010", "title": "", "text": "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?" }, { "docid": "384541", "title": "", "text": "\"An employee costs the company in four ways: Salary, taxes, benefits, and capital. Salary: The obvious one, what they pay you. Taxes: There are several taxes that an employer has to pay for the privilege of hiring someone, including social security taxes (which goes to your retirement), unemployment insurance tax (your unemployment benefits if they lay you off), and workers compensation tax (pays if you are injured on the job). (There may be other taxes that I'm not thinking of, but in any case those are the main ones.) Benefits: In the U.S. employers often pay for medical insurance, sometimes for dental, life, and disability. There's usually some sort of retirement plan. They expect to give you some number of vacation days, holidays, and sick days where they pay you even though you're not working. Companies sometimes offer other benefits, like discounts on buying company products, membership in health clubs, etc. Capital: Often the company has to provide you with some sort of equipment, like a computer; furniture, like a chair and desk; etc. As far as the company is concerned, all of the above are part of the cost of having you as an employee. If they would pay a domestic employee $60,000 in salary and $20,000 in taxes, then assuming the same benefits and capital investment, if a foreign employee would cost them $0 in taxes they should logically be willing to pay $80,000. Any big company will have accountants who figure out the total cost of a new employee in excruciating detail, and they will likely be totally rational about this. A smaller company might think, \"\"well, taxes don't really count ...\"\" This is irrational but people are not always rational. I don't know what benefits they are offering you, if any, and what equipment they will provide you with, if any. I also don't know what taxes, if any, a U.S. company has to pay when hiring a remote employee in a foreign country. If anybody on here knows the answer to that, please chime in. Balanced against that, the company likely sees disadvantages to hiring a foreign remote employee, too. Communication will be more difficult, which may result in inefficiency. My previous employer used some contractors in India and while there were certainly advantages, the language and time zone issues caused difficulties. There are almost certainly some international bureaucratic inconveniences they will have to deal with. Etc. So while you should certainly calculate what it would cost them to have a domestic employee doing the same job, that's not necessarily the end of the story. And ultimately it all comes down to negotiations. Even if the company knows that by the time they add in taxes and benefits and whatever, a domestic employee will cost them $100,000 a year, if they are absolutely convinced that they should be able to hire an Austrian for $60,000 a year, that might be the best offer you will get. You can point out the cost savings, and maybe they will concede the point and maybe not.\"" }, { "docid": "254783", "title": "", "text": "I wouldn't focus too much on dividends itself; at the end of the day what matters is total gain, because you can convert capital gain into income by selling your assets (they have different tax implications, but generally capital gains tend to be more tax efficient). I think the more important question is how much volatility you can tolerate. Since your investment horizon is short & your risk tolerance is low (as in if you suddenly get much lower income than you planned from your investment you'll be in trouble), you probably want assets that have low volatility. To achieve that, I'd consider the following if I were you: tl;dr If I were you I'd just hold a general investment portfolio with a lower risk profile rather than focusing on dividend generating assets." }, { "docid": "387194", "title": "", "text": "&gt;IOW, everyone is perfectly free to instantaneously decide that a dollar is worth only 1/1,000,000,000th of an orange, and oranges would instantly cost a billion dollars. Oranges cost less than that not because the government sets the price of oranges, but purely because that's what the market agrees to. This shows a profound misunderstanding of how fiat currencies work. The demand for fiat currencies comes from the fact they are necessary to pay taxes and debts. Other currencies/commodities will not be recognized as settlement of debts in court disputes, so they would first need to be sold onto the market in exchange for the fiat currency. Individuals can't simply *decide* what the relative value of certain goods and services are. The market does that, collectively via voluntary trade. &gt;I'm explaining internal combustion for a 5-year-old, and you're calling it inaccurate and misleading because it doesn't address the sociological implications of American car-culture. Hahah, you're confusing the oil for the gasoline!" }, { "docid": "49614", "title": "", "text": "\"401k plans are required to not discriminate against the non-HCE participants, and one way they achieve this is by limiting the percentage of wages that HCEs can contribute to the plan to the average annual percentage contribution by the non-HCE participants or 3% whichever is higher. If most non-HCE employees contribute only 3% (usually to capture the employer match but no more), then the HCEs are stuck with 3%. However, be aware that in companies that award year-end bonuses to all employees, many non-HCEs contribute part of their bonuses to their 401k plans, and so the average annual percentage can rise above 3% at the end of year. Some payroll offices have been known to ask all those who have not already maxed out their 401k contribution for the year (yes, it is possible to do this even while contributing only 3% if you are not just a HCE but a VHCE) whether they want to contribute the usual 3%, or a higher percentage, or to contribute the maximum possible under the nondiscrimination rules. So, you might be able to contribute more than 3% if the non-HCEs put in more money at the end of the year. With regard to NQSPs, you pretty much have their properties pegged correctly. That money is considered to be deferred compensation and so you pay taxes on it only when you receive it upon leaving employment. The company also gets to deduct it as a business expense when the money is paid out, and as you said, it is not money that is segregated as a 401k plan is. On the other hand, you have earned the money already: it is just that the company is \"\"holding\"\" it for you. Is it paying you interest on the money (accumulating in the NQSP, not paid out in cash or taxable income to you)? Would it be better to just take the money right now, pay taxes on it, and invest it yourself? Some deferred compensation plans work as follows. The deferred compensation is given to you as a loan in the year it is earned, and you pay only interest on the principal each year. Since the money is a loan, there is no tax of any kind due on the money when you receive it. Now you can invest the proceeds of this loan and hopefully earn enough to cover the interest payments due. (The interest you pay is deductible on Schedule A as an Investment Interest Expense). When employment ceases, you repay the loan to the company as a lump sum or in five or ten annual installments, whatever was agreed to, while the company pays you your deferred compensation less taxes withheld. The net effect is that you pay the company the taxes due on the money, and the company sends this on to the various tax authorities as money withheld from wages paid. The advantage is that you do not need to worry about what happens to your money if the company fails; you have received it up front. Yes, you have to pay the loan principal to the company but the company also owes you exactly that much money as unpaid wages. In the best of all worlds, things will proceed smoothly, but if not, it is better to be in this Mexican standoff rather than standing in line in bankruptcy court and hoping to get pennies on the dollar for your work.\"" }, { "docid": "570112", "title": "", "text": "\"I've bought ISO stock over they years -- in NYSE traded companies. Every time I've done so, they've done what's called \"\"sell-to-cover\"\". And the gubmint treats the difference between FMV and purchase price as if it's part of your salary. And for me, they've sold some stock extra to pay estimated taxes. So, if I got this right... 20,000 shares at $3 costs you 60,000 to buy them. In my sell-to-cover at 5 scenario: did I get that right? Keeping only 4,000 shares out of 20,000 doesn't feel right. Maybe because I've always sold at a much ratio between strike price and FMV. Note I made some assumptions: first is that the company will sell some of the stock to pay the taxes for you. Second is your marginal tax rate. Before you do anything check these. Is there some reason to exercise immediately? I'd wait, personally.\"" }, { "docid": "520584", "title": "", "text": "IANAL (and nor am I an accountant), so I can't give a definitive answer as to legality, but AFAIK, what you propose is legal. But what's the benefit? Avoiding corporation tax? It's simplistic – and costly – to think in terms like that. You need to run the numbers for different scenarios, and make a plan. You can end up ahead of the game precisely by choosing to pay some corporate tax each year. Really! Read on. One of the many reasons that self-employed Canadians sometimes opt for a corporate structure over being a sole proprietor is to be able to not pay themselves everything the company earns each year. This is especially important when a business has some really good years, and others, meh. Using the corporation to retain earnings can be more tax effective. Example: Imagine your corporation earns, net of accounting & other non-tax costs except for your draws, $120,000/year for 5 years, and $0 in year 6. Assume the business is your only source of income for those 6 years. Would you rather: Pay yourself the entire $120,000/yr in years 1-5, then $0 in year 6 (living off personal savings you hopefully accumulated earlier), subjecting the $120,000/yr to personal income tax only, leaving nothing in the corporation to be taxed? Very roughly speaking, assuming tax rates & brackets are level from year to year, and using this calculator (which simplifies certain things), then in Ontario, then you'd net ~$84,878/yr for years 1-5, and $0 in year 6. Overall, you realized $424,390. Drawing the income in this manner, the average tax rate on the $600,000 was 29.26%. vs. Pay yourself only $100,000/yr in years 1-5, leaving $20,000/yr subject to corporation tax. Assuming a 15.5% combined federal/provincial corporate tax rate (includes the small business deduction), then the corp. is left with $16,900/yr to add to retained earnings in years 1-5. In year 6, the corp. has $84,500 in retained earnings to be distributed to you, the sole owner, as a dividend (of the non-eligible kind.) Again, very roughly speaking, you'd personally net $73,560/yr in years 1-5, and then on the $84,500 dividend in year 6, you'd net $73,658. Overall, you realized $441,458. Drawing the income in this manner, the average tax rate on the $600K was 26.42%. i.e. Scenario 2, which spreads the income out over the six years, saved 2.84% in tax, or $14,400. Smoothing out your income is also a prudent thing to do. Would you rather find yourself in year 6, having no clients and no revenue, with nothing left to draw on? Or would you rather the company had saved money from the good years to pay you in the lean one?" }, { "docid": "299327", "title": "", "text": "\"I read the book, and I'm willing to believe you'd have a good chance of beating the market with this strategy - it is a reasonable, rational, and mechanical investment discipline. I doubt it's overplayed and overused to the point that it won't ever work again. But only IF you stick to it, and doing so would be very hard (behaviorally). Which is probably why it isn't overplayed and overused already. This strategy makes you place trades in companies you often won't have heard of, with volatile prices. The best way to use the strategy would be to try to get it automated somehow and avoid looking at the individual stocks, I bet, to take your behavior out of it. There may well be some risk factors in this strategy that you don't have in an S&P 500 fund, and those could explain some of the higher returns; for example, a basket of sketchier companies could be more vulnerable to economic events. The strategy won't beat the market every year, either, so that can test your behavior. Strategies tend to work and then stop working (as the book even mentions). This is related to whether other investors are piling in to the strategy and pushing up prices, in part. But also, outside events can just happen to line up poorly for a given strategy; for example a bunch of the \"\"fundamental index\"\" ETFs that looked at dividend yield launched right before all the high-dividend financials cratered. Investing in high-dividend stocks probably is and was a reasonable strategy in general, but it wasn't a great strategy for a couple years there. Anytime you don't buy the whole market, you risk both positive and negative deviations from it. Here's maybe a bigger-picture point, though. I happen to think \"\"beating the market\"\" is a big old distraction for individual investors; what you really want is predictable, adequate returns, who cares if the market returns 20% as long as your returns are adequate, and who cares if you beat the market by 5% if the market cratered 40%. So I'm not a huge fan of investment books that are structured around the topic of beating the market. Whether it's index fund advocates saying \"\"you can't beat the market so buy the index\"\" or Greenblatt saying \"\"here's how to beat the market with this strategy,\"\" it's still all about beating the market. And to me, beating the market is just irrelevant. Nobody ever bought their food in retirement because they did or did not beat the market. To me, beating the market is a game for the kind of actively-managed mutual fund that has a 90%-plus R-squared correlation with the index; often called an \"\"index hugger,\"\" these funds are just trying to eke out a little bit better result than the market, and often get a little bit worse result, and overall are a lot of effort with no purpose. Just get the index fund rather than these. If you're getting active management involved, I'd rather see a big deviation from the index, and I'd like that deviation to be related to risk control: hedging, or pulling back to cash when valuations get rich, or avoiding companies without a \"\"moat\"\" and margin of safety, or whatever kind of risk control, but something. In a fund like this, you aren't trying to beat the market, you're trying to increase the chances of adequate returns - you're optimizing for predictability. I'm not sure the magic formula is the best way to do that, focused as it is on beating the market rather than on risk control. Sorry for the extra digression but I hope I answered the question a bit, too. ;-)\"" }, { "docid": "9753", "title": "", "text": "The Australian Tax Office website shows Tax Rates for individuals based on the income earned in the Financial Year. Calculating what you'll be taxed For instance, it show that every dollar you earn up to $18,200, you are not taxed. Every dollar over that, up to $37k is taxed at 19 cents. And so on.. Example 1 So as an example, if your income for the year is $25,000 you will be taxed $1292. Working: Here's how it's look if you were doing it in a spreadsheet using the Tax Rates table on the ATO website as a guide: Example 2 If you income is $50,000, it'd look like this: Withholding Your employer is obligated to remove the taxable part from your wage each time your paid. They do that using the calculation above. If at the end of the financial year, the ATO determines that too much as been withheld (ie. you've claimed deductions that've reduce your taxable income to less than what your actual income is), that's when you may be eligible for a refund. If your employer didn't withhold enough or you had income from other sources that haven't been taxed already, then you may actually need to pay rather than expecting a refund. Your question If you earn $18,200 in the year and for some reason your employer did withhold tax from your pay, say $2,000, then yes, you'll get all that $2,000 back as a refund since the Tax Rate for income up to $18,200 is $0.00. If you earned $18,201 and your employer withheld $2000, you'd get $1999.81 back as a refund ($2000 - 19c). You have to pay 19c tax on that $1 over $18,200." }, { "docid": "473373", "title": "", "text": "\"&gt; A trucking company making millions of dollars a year on US highways derives more value from the roads than I do. Trucking companies run on very slim margins (typical for a commoditized business) and the vast majority of benefit is captured by other players, employees, and the government (in the form of taxes). Moreover, you appear to be confusing revenue and profits. &gt; Honestly anyone who says that they don't need to pay for roads because of their level of benefit from them is limited and I will call you a liar. Unless you are living in a box in the woods 100s of miles away from civilization you absolutely rely on the road system even if you never set foot on it. Nobody ever said this. You are inventing an argument in order to counter it. Silly. &gt; Though at the same time a national highway system was something no business would ever make as it derives too little value for an individual business for the scale required to reach enough of the market. This is a perfect example of a project that is good for society but won't see the tab picked up by business voluntarily. Sure. Again, you are way off on a tangent though. Nobody here has argued against infrastructure nor taxes required to fund them. &gt; It is foolish to assume your market value increases do not rely on infrastructure to happen. As much as paper-trading inflates value, for the most part, it is still tied to some kind of real work (or rather the expectation of) being done somewhere. That assumption of ability for a corporation to serve it's shareholders is based on the fact that companies have infrastructure needs handled and that expanding delivery to three new markets won't be hampered because the company must first complete the highway to serve these markets. Again, you seem confused about the argument. We are not arguing about the basis of stock valuations and appreciation (which you happen to be wrong on, btw). We are talking about the relative value of infrastructure gained by the wealthy vs. non-wealthy. Replace \"\"stock market\"\" with \"\"30 year US Treaury Bonds\"\". Actually, don't... the next thing I'll see from you is some kind of comment about how infrastructure forms the basis for interest rates. &gt;The existence of infrastructure not only supports the market but allows you to exploit it. The internet here makes a great example. Prior to funding and a push by the government to standardize military and academic networks and technology as well as make microprocessors more powerful in order to stay ahead in tech race we had a mish mash of proprietary networks with very poor abilities to use them. Today we have the internet. A largely private system today however it would not exist without the involvement and funding from the government for the multiple programs that led to it's existence. Great. Nobody ever said otherwise. &gt; If the taxes really outweighed utility businesses would not operate in the area at all. The thing is, they don't and taxes are not preventing businesses from growing. I said personal utility. I personally employ 40 families. I pay considerable taxes for them. They pay income and sales taxes on top of that. It's a huge amount of money the government receives that they wouldn't have had I not chosen to go into business. Incidentally, this brings up another point. Doesn't the government owe me something for generating that many jobs? Why am I not getting a tax break? &gt; Yes but that is because unless you are doing it ALL yourself then you did not generate that $10. As a business owner you are in charge of managing resources to help generate that $10, you yourself however did not generate that $10. You had employees, and contractors, and people managing your building, payroll and yes even taxes. Every person involved in getting the product or service from idea to the door are all part of that $10. If your efforts in that co-ordination are netting you 15% of the total then you are beating the market already and I am not sure what your problem is. If you are looking to double or triple your investments you are looking for Las Vegas not Wall St or Main St. I see you don't understand how business works. &gt; I think the issue I see among people with your opinion is a failure to understand 2nd and 3rd order effects. Your bubble extends to what you do in your daily life and the parts of it you visibly see and touch. The world you see and touch every day is supported and made comfortable by a whole system and people whom you will never see or know. The issue I see among people with your opinion is that it is naive and obviously not based in any real world experience. If you had ever actually run a business, you would realize how many people get paid before you do (including the government). You have maybe a 5% chance of making an above average wage and you fight like hell every day to stay afloat. I encourage you to open your eyes and try to see the perspective of people who are actually making a difference in this world, and not the political lowlifes and lowlife leeches who have a vested interest in seeing to it that you believe something that simply isn't true.\"" }, { "docid": "495165", "title": "", "text": "\"What you're thinking of is more market making kind of activity, HFT algo's thrive on this; having information faster than anyone else. This type of activity could also likely be lumped into what is considered top-down analysis as opposed to bottom-up (which is what most mutual fund equity research involves). Again, the more important aspect is, what does the company you are applying to use! Top-down analysis means that you are forecasting the revenue drivers for a company using macro-economic analysis. For example, let's say I'm investing in Chinese cement manufacturer's, what implications does Chinese interest rate policy have on infra-structure expansion and how does that drive revenue for this specific company. I might then look at margins, etc. to get an EPS estimate. Part of this could fall into secular investing, too. Let's say I like LCD panel glass because of this consortium, I might take a look at 5 companies and then find the ones I think would benefit most from this. The problem with top-down is it tends not to be as much of a deep-dive, and its hard to pick individual companies because of it. Bottom-up tends to be more analytical and is what most pitches would be based around. The most important thing I'm not saying one is right or wrong, they are just different, and every investor has their own style. Bottom-up analysis, which would be closer to what an equity research analyst would be doing on the sell-side, is analyzing what bottom-line indicators drive revenue and how are those expanding. For example, lets say I'm looking at search providers (i.e. Baidu, Google, Yahoo, etc.) I'd be looking at Cost-Per-Thousand-Clicks (CPTC) and number of clicks on the website. Multiply the two and I get revenue (very simplified version) for clicks business. I might then also forecast other revenue driving segments and try to understand how they are growing/pricing at an individual segment level (i.e. business services or mobile advertising). I'd then break down costs/margins for each segment and forecast those out. I could then get a forward EPS, get a range of multiples I believe it could trade in (i.e. I think the multiple will trade up/down), to get a target price. Also, I would likely do a DCF analysis on forward earnings to get a \"\"fair market value,\"\" and then try to triangulate a price. I would also be looking at stuff like management teams and industry trends, too, but bottom line, I'm pitching a company because I think it is undervalued and will outperform competitors **in the long run**. This type of work tends to be more research oriented and is what most (not all) mutual funds use when analyzing companies. Since mutual funds tend to have longer holding periods (2-10 years), as opposed to short-term, it's harder to justify investing in a company only because it has a short-term catalyst. Anecdotally, it's also easier to present in a written thesis because the numbers tend to be more concrete and easier to forecast than top-down (which have wider target ranges). Your thought process that catalyst + industry context = market beating returns isn't wrong, it's just that every company thinks about investing differently, and it's important to tailor the report to that group's style.\"" } ]

[ { "docid": "173986", "title": "", "text": "A day is a long time and the rate is not the same all day. Some sources will report a close price that averages the bid and ask. Some sources will report a volume-weighted average. Some will report the last transaction price. Some will report a time-weighted average. Some will average the highest and lowest prices for the interval. Different marketplaces will also have slightly different prices because different traders are present at each marketplace. Usually, the documentation will explain what method they use and you can choose the source whose method makes the most sense for your application." } ]

[ { "docid": "418519", "title": "", "text": "If you don't mind a question: you're bullish until [fill this slot] will happen? Personally i'm not bearish but i'm out of this market and i'm waiting, aware that i'm losing some money but risk come fast and i prefer not hedging my gains of last years. Still having a small position on some ETFs USD/JPY cross.." }, { "docid": "21306", "title": "", "text": "According to your post, you bought seven shares of VBR at $119.28 each on August 23rd. You paid €711,35. Now, on August 25th, VBR is worth $120.83. So you have But you want to know what you have in EUR, not USD. So if I ask Google how much $845.81 is in EUR, it says €708,89. That's even lower than what you're seeing. It looks like USD has fallen in value relative to EUR. So while the stock price has increased in dollar terms, it has fallen in euro terms. As a result, the value that you would get in euros if you sold the stock has fallen from the price that you paid. Another way of thinking about this is that your price per share was €101,72 and is now €101,33. That's actually a small drop. When you buy and sell in a different currency that you don't actually want, you add the currency risk to your normal risk. Maybe that's what you want to do. Or maybe you would be better off sticking to euro-denominated investments. Usually you'd do dollar-denominated investments if some of your spending was in dollars. Then if the dollar goes up relative to the euro, your investment goes up with it. So you can cash out and make your purchases in dollars without adding extra money. If you make all your purchases in euros, I would normally recommend that you stick to euro-denominated investments. The underlying asset might be in the US, but your fund could still be in Europe and list in euros. That's not to say that you can't buy dollar-denominated investments with euros. Clearly you can. It's just that it adds currency risk to the other risks of the investment. Unless you deliberately want to bet that USD will rise relative to EUR, you might not want to do that. Note that USD may rise over the weekend and put you back in the black. For that matter, even if USD continues to fall relative to the EUR, the security might rise more than that. I have no opinion on the value of VBR. I don't actually know what that is, as it doesn't matter for the points I was making. I'm not saying to sell it immediately. I'm saying that you might prefer euro-denominated investments when you buy in the future. Again, unless you are taking this particular risk deliberately." }, { "docid": "553377", "title": "", "text": "\"You could use any of various financial APIs (e.g., Yahoo finance) to get prices of some reference stock and bond index funds. That would be a reasonable approximation to market performance over a given time span. As for inflation data, just googling \"\"monthly inflation data\"\" gave me two pages with numbers that seem to agree and go back to 1914. If you want to double-check their numbers you could go to the source at the BLS. As for whether any existing analysis exists, I'm not sure exactly what you mean. I don't think you need to do much analysis to show that stock returns are different over different time periods.\"" }, { "docid": "386745", "title": "", "text": "Why do these fees exist? From a Banks point of view, they are operating in Currency A; Currency B is a commodity [similar to Oil, Grains, Goods, etc]. So they will only buy if they can sell it at a margin. Currency Conversion have inherent risks, on small amount, the Bank generally does not hedge these risks as it is expensive; but balances the position end of day or if the exposure becomes large. The rate they may get then may be different and the margin covers it. Hence on highly traded currency pairs; the spread is less. Are there back-end processes and requirements that require financial institutions to pass off the loss to consumers as a fee? The processes are to ensure bank does not make loss. is it just to make money on the convenience of international transactions? Banks do make money on such transactions; however they also take some risks. The Forex market is not single market, but is a collective hybrid market place. There are costs a bank incurs to carry and square off positions and some of it is reflected in fees. If you see some of the remittance corridors, banks have optimized a remittance service; say USD to INR, there is a huge flow often in small amounts. The remittance service aggregates such amounts to make it a large amount to get a better deal for themselves and passes on the benefits to individuals. Such volume of scale is not available for other pairs / corridors." }, { "docid": "160275", "title": "", "text": "It depends upon in how many currencies your business is denominated. If your business is solely dependent upon this one payer, it's best to start up a new set of books in USD. All accounts should be translated from CAD from a date preceding the USD activity. The CAD books should be closed, and all should be done with the new USD books. If your business will continue to use both USD & CAD, it's best to have two sets of books, one for USD and one for CAD. Multi-currency books are a nightmare and should be avoided at all costs. Also, with the way you describe your situation, it appears as if you're also blending your household and business books. This should also be avoided for best practices." }, { "docid": "21896", "title": "", "text": "Yes, they're using it as a currency. What they actually have demand for is houses and Lambos, and if bitcoin wasn't available they'd be happy to do it in any other currency. When any other currency goes up it's because there's overall higher demand than supply for it, to buy things you can only buy in a particular currency. A very common example is government bonds of the issuing government for a currency. That's why when the Fed raises the interest rate, the US dollar goes up. It is because at a bond auction the government will only take US dollars so anyone that wants to buy some bonds needs to first buy US dollars. If the interest rate goes up, all things being equal those bonds are relatively more attractive than other countries bonds, and that change in demand increases the demand for the currency, which raises it's price. Note the key thing here - it needs to be something you can only buy (or at least, buy for the cheapest price) in a particular currency. If it's something you can buy with any currency, than that event generally doesn't impact the currency price. Although it's a very important food crop, if the price of rice goes up, it doesn't really impact the USD even though you can buy rice with USD. Here's the tricky part, what can you buy with bitcoin that you can't buy with any other currency?" }, { "docid": "568013", "title": "", "text": "Transferwise gives an excellent exchange rate and very minimal costs. They save on costs by not actually changing any money; your money goes to someone else in the US, and the Canadia dollars you want come from someone else in Canada. No money changes currency or crosses borders, there is no bank transfer fee (assuming that domestic bank transfers, inside the country, are free), and they give an excellent exchange rate (very nearly the spot rate, I find; far better than many rates I find online for sending money across the border). I sent money from the UK to Japan with it last week, at a fixed fee of about three US dollars (I was charged in GBP, obviously). About one tenth the cost of an international bank transfer. I just double-checked; at about midday on the fifth of October 2016, they gave me a rate of 130.15 JPY per 1 GBP, and then charged me two GBP to transfer the money. The rate that day, according to xe.com, varied between 130.7 and 132 ; basically, I don't think I could have got a better deal pretty much anywhere. As I type, this very second, they offer 1.33 CAD for 1 USD , and google tells me that this very second, the exchange rate is 1.33 CAD for 1 USD - transferwise is giving the spot price. I don't think you'll get a better rate anywhere else." }, { "docid": "407372", "title": "", "text": "\"QUICK ANSWER What @Mike Haskel wrote is generally correct that the indirect method for cash flow statement reporting, which most US companies use, can sometimes produce different results that don't clearly reconcile with balance sheet shifts. With regards to accounts receivables, this is especially so when there is a major increase or decrease in the company's allowances for doubtful accounts. In this case, there is more to the company's balance sheet and cash flow statements differences per its accounts receivables than its allowances for doubtful accounts seems responsible for. As explained below, the difference, $1.25bn, is likely owing more to currency shifts and how they are accounted for than to other factors. = = = = = = = = = = DIRTY DETAILS Microsoft Corp. generally sells to high-quality / high-credit buyers; mostly PC, server and other devices manufacturers and licensees. It hence made doubtful accounts provisions of $16mn for its $86,833mn (0.018%) of 2014 sales and wrote off $51mn of its carrying balance during the year. Its accounting for \"\"Other comprehensive income\"\" captures the primary differences of many accounts; specifically in this case, the \"\"foreign currency translation\"\" figure that comprises many balance sheet accounts and net out against shareholders' equity (i.e. those assets and liabilities bypass the income statement). The footnotes include this explanation: Assets and liabilities recorded in foreign currencies are translated at the exchange rate on the balance sheet date. Revenue and expenses are translated at average rates of exchange prevailing during the year. Translation adjustments resulting from this process are recorded to other comprehensive income (“OCI”) What all this means is that those two balance sheet figures are computed by translating all the accounts with foreign currency balances (in this case, accounts receivables) into the reporting currency, US dollars (USD), at the date of the balance sheets, June 30 of the years 2013 and 2014. The change in accounts receivables cash flow figure is computed by first determining the average exchange rates for all the currencies it uses to conduct business and applying them respectively to the changes in each non-USD accounts receivables during the periods. For this reason, almost all multinational companies that report using indirect cash flow statements will have discrepancies between the changes in their reported working capital changes during a period and the dates of their balance sheet and it's usually because of currency shifts during the period.\"" }, { "docid": "490384", "title": "", "text": "Wiring is the best way to move large amounts of money from one country to another. I am sure Japanese banks will allow you to exchange your Japanese Yen into USD and wire it to Canada. I am not sure if they will be able to convert directly from JPY to CND and wire funds in CND. If you can open a USD bank account in Canada, that might make things easier." }, { "docid": "242560", "title": "", "text": "What do you actually know about their methodology? Do you have the raw data? Do you know how they selected the sample? Did they discover perfect random? I would guess not. So that probably would mean 100 isnt correct in this context. Not that I doubt this study follows stats best practices perfectly or that the people running a study on employees about a company of a very wealthy individual would be objective/completely without ulterior motive and from some source I dont even actually know the full background of the people who made it but... I'm non-partisan. I would also just ask, how did that election turn out again with the numerous polls and other research of 1000+, repeatedly at different times over a campaign that seemed to have been like 2+ years long? Further I dont even know why we are talking about a study of 100 when theres glassdoor with more than 10,000 reviews though it isnt normalized or in an actual study format. The thing to note is that if you compare the types of employees to another tech company like lets say Google/Alphabet or Facebook you have a different distribution in the type of people recruited and that might effect their experience. Amazon does a lot of retail, support and call centers as compared to a lot of engineers with a more educated background. Both are people but theres definitely a difference in the type of person as well as their temperament you get if you go to lets say an urban wal-mart as compared to an Alphabet or Facebook engineer. Have to compare apples to apples and as far as this study goes I dont even know how they like them apples." }, { "docid": "137919", "title": "", "text": "\"Amount is the closest single word. \"\"Amount in dollars\"\" would be the easiest way to specify information you are requesting. \"\"Amount and currency\"\" if you ware in an area using multiple currencies. An accountant might be able to give you a more technical term, but it would be accountancy jargon. Amount due, credit amount, debit amount, amount deposited, amount credited, amount withdrawn, or amount included. If you're writing instructions and want to specify that the person following the instructions needs to indicate the currency, you'll probably have to simply state that requirement. Based on US centric thinking, inside the US, money is dollars, dollars is money. For US citizens outside the country, we would always tack on the currency. 100 dollars, or 100 Euro. There is a segment of Americans who do not understand geography, and that other countries exist, and that they use different currencies, might not realize that other countries have currencies named dollars, and that USD means US Dollars. So for U.S. citizens, be specific and clear. Bottom line, if this is written for US residents, and they need to specify the currency, you need to explicitly require them to \"\"List the amount and currency.\"\"\"" }, { "docid": "14781", "title": "", "text": "\"Yes, you're still exposed to currency risk when you purchase the stock on company B's exchange. I'm assuming you're buying the shares on B's stock exchange through an ADR, GDR, or similar instrument. The risk occurs as a result of the process through which the ADR is created. In its simplest form, the process works like this: I'll illustrate this with an example. I've separated the conversion rate into the exchange rate and a generic \"\"ADR conversion rate\"\" which includes all other factors the bank takes into account when deciding how many ADR shares to sell. The fact that the units line up is a nice check to make sure the calculation is logically correct. My example starts with these assumptions: I made up the generic ADR conversion rate; it will remain constant throughout this example. This is the simplified version of the calculation of the ADR share price from the European share price: Let's assume that the euro appreciates against the US dollar, and is now worth 1.4 USD (this is a major appreciation, but it makes a good example): The currency appreciation alone raised the share price of the ADR, even though the price of the share on the European exchange was unchanged. Now let's look at what happens if the euro appreciates further to 1.5 USD/EUR, but the company's share price on the European exchange falls: Even though the euro appreciated, the decline in the share price on the European exchange offset the currency risk in this case, leaving the ADR's share price on the US exchange unchanged. Finally, what happens if the euro experiences a major depreciation and the company's share price decreases significantly in the European market? This is a realistic situation that has occurred several times during the European sovereign debt crisis. Assuming this occurred immediately after the first example, European shareholders in the company experienced a (43.50 - 50) / 50 = -13% return, but American holders of the ADR experienced a (15.95 - 21.5093) / 21.5093 = -25.9% return. The currency shock was the primary cause of this magnified loss. Another point to keep in mind is that the foreign company itself may be exposed to currency risk if it conducts a lot of business in market with different currencies. Ideally the company has hedged against this, but if you invest in a foreign company through an ADR (or a GDR or another similar instrument), you may take on whatever risk the company hasn't hedged in addition to the currency risk that's present in the ADR/GDR conversion process. Here are a few articles that discuss currency risk specifically in the context of ADR's: (1), (2). Nestle, a Swiss company that is traded on US exchanges through an ADR, even addresses this issue in their FAQ for investors. There are other risks associated with instruments like ADR's and cross-listed companies, but normally arbitrageurs will remove these discontinuities quickly. Especially for cross-listed companies, this should keep the prices of highly liquid securities relatively synchronized.\"" }, { "docid": "217427", "title": "", "text": "\"Two typical responses to articles/surveys making such claims: **1. People use other forms of asset for emergency savings because interest rates are low - clearly false.** **2. People use other forms of saving than a saving account therefore such surveys as the X% can't handle a $500 emergency are wrong on their face - this is false the vast majority use a savings account.** I've chosen a topic that absolutely annoys the shit out of me every time it comes up, how people save their money. Every time this topic comes up about X% of americans can't come up with $Y dollars in an emergency or have less than $Z in savings someone inevitably chimes in with the linked response. I have *never* seen anyone attempt to source their hand waving response beyond their own anecdote, which is usually a thinly veiled brag about how financially savvy they are with their wealth. Perhaps people who have no assets, or crippling debt don't go out of their way to brag about it... I could link multiple reddit posts making a similar response, which I address with my own stock response about once every 1-2 months. Instead I've decided to expand with data from several other sources. This is the prototypical good/bad research problem. If you're asserting something, but qualify your statement with, \"\"I\"\"m sure we'd find...if we looked into...\"\" then you're doing it wrong. A good researcher or journalist doesn't put bullshit like that in their work because it's their job to actually look for sources of data; data which should exist with multiple government and independent groups. So let's get started (all data as recent as I could find, oldest source is for 2010): * [Most americans don't invest in the stock market](https://www.federalreserve.gov/pubs/bulletin/2014/pdf/scf14.pdf) About 48.8% of americans owned publicly traded stock directly or indirectly, with a much smaller percent (13.8%) owning stock directly - pages 18 and 16 respectively. It's important to note the predominance of indirect ownership which suggests this is mostly retirement accounts. It's entirely possible people are irresponsible with their emergency savings, but I think it safe to say we should not expect people to *dip into their retirement accounts* for relatively minor emergency expenses. The reason is obvious, even if it covers the expense they now have to make up the shortfall for their retirement savings. This is further supported by the same source: &gt;\"\"The value of assets held within IRAs and DC plans are among the most significant compo-nents of many families’ balance sheets and are a significant determinant of their future retirement security.\"\" Ibid (page 20, PDF page 20 of 41) There is also a break down of holdings by asset type on page 16, PDF page 16 of 41. * [This data is skewed by the top 10% who keep more of their wealth in different asset types.](http://www2.ucsc.edu/whorulesamerica/power/wealth.html) For a breakdown between the 1st, 10th, and 90th percentiles see **table 3.** So far it seems pretty hard to maintain a large percent of americans have their wealth stored outside of savings accounts, mattresses aside. * [Here's my original reply as to the breakdown of americans assets by type and percent holding.](https://imgur.com/a/DsLxB) Note this assumes people *have* assets. [Source for images/data.](https://www.census.gov/people/wealth/data/dtables.html) Most people use savings accounts, with runner up falling to checking accounts. This will segue into our next topic which is the problem of unbanked/underbanked households. * [A large number of individuals have no assets; breaking down by asset types assumes people *have* assets in the first place.](https://www.fdic.gov/householdsurvey/) To quote the FDIC: &gt;*\"\"Estimates from the 2015 survey indicate that 7.0 percent of households in the United States were unbanked in 2015. This proportion represents approximately 9.0 million households. An additional 19.9 percent of U.S. households (24.5 million) were underbanked, meaning that the household had a checking or savings account but also obtained financial products and services outside of the banking system.\"\"* That's right there are millions of households *so finance savvy* they don't even have banks accounts! Obviously it's because of low interest rates. Also, most people have a checking account as well as savings account, the percent with \"\"checking and savings\"\" was 75.8% while those with \"\"checking only\"\" were 22.2% (page 25, PDF page 31 of 88). It's possible in some surveys people keep all their money in checking, but given other data sources, and the original claim this fails to hold up. If the concern was interest rates it makes no sense to keep money in checking which seldom pays interest. This survey also directly addresses the issue of \"\"emergency savings\"\": &gt; *\"\"Overall, 56.3 percent of households saved for unexpected expenses or emergencies in the past 12 months.\"\"* (page 37, PDF page 43 of 88) Furthermore: &gt;*\"\"Figure 7.2 shows that among all households that saved for unexpected expenses or emergencies, savings accounts were the most used savings method followed by checking accounts:* **more than four in five (84.9 percent) kept savings in one of these accounts.** *About one in ten (10.5 percent) households that saved maintained savings in the home, or with family or friends.\"\"* Emphasis added. * [Why don't people have wealth in different asset classes? Well they don't save money.](http://cdn.financialsamurai.com/wp-content/uploads/2014/06/savings-rates-by-wealth-class.png) This is further supported by the OECD data: * [Americans \"\"currency and deposits\"\" are 13% vs 5.8% for \"\"securities and other shares\"\" as % of total financial assets.](https://data.oecd.org/hha/household-financial-assets.htm) Additionally: * [Interest earning checking accounts: 44.6% of american households (second image)](https://imgur.com/a/DsLxB) * [\"\"Among all households that saved for unexpected expenses or emergencies, savings accounts were the most used savings method followed by checking accounts...\"\" (page 7, PDF page 13 of 88)](https://www.fdic.gov/householdsurvey/2015/2015report.pdf) * ~70% saved for an emergency with a savings account vs ~24% who used checking. *Ibid.* In fairness the FDIC link does state *banked* americans were more likely to hold checking accounts than savings accounts (98% vs ~77% respectively) but that doesn't mean they're earning interest in their checking account. It's also worth noting median transaction account value was for 2013 (this is the federal reserve data) $4100.\"" }, { "docid": "374008", "title": "", "text": "Is it possible to open a GBP bank account in Pakistan ? Yes you can. Quite a few Banks offer Foreign currency accounts in GBP [or USD or EUR, JPY] Are there any risks in doing so ? Generally no. As per Protection of Economic Reforms Act (PERA) of 1992 and foreign currency accounts (protection) ordinance 2001 the funds are protected and you can move them back out of Pakistan any time. However if you are looking at investing into property and then selling it after few years, there maybe difficulties in such transactions and consult a tax advisor familiar with such cases. All money is legit with bank statements of my pay which is between 35K and 40K per year, am I going to have any trouble at airport as limit is £7K only Carrying cash of this amount is generally not advisable. It is best to do a Bank to Bank transfer. You can visit one of the Pakistan Bank that has branch in UK [say Standard Chartered, Citi, HSBC, etc]. They should be able to open account with transfer of funds. There is no limitation on carrying foreign exchange in cash when you enter Pakistan. However when you are travelling out of Pakistan you can only carry USD 10,000 or eq. per person." }, { "docid": "180972", "title": "", "text": "Yeah, I heard about that! That's virtually the same thing (in a different form) as a new currency as it's backed solely by the state's ability to uphold its value, but yes, given that it's trading for pennies on the dollar it's no surprise the USD is the primary currency there. It will be very interesting to see the policies that Mugabe's successor (his ex-wife or #2) puts in place. Either way I bet they fail, but hope they don't and actually make the necessary reforms to help the country succeed." }, { "docid": "343489", "title": "", "text": "\"The prices quoted are for currency pairs traded on the foreign exchange market. For currencies traded on these exchanges, the exchange rates of a given currency pair are determined by the market, so supply and demand, investor confidence, etc. all play a role. EBS and Reuters are the two primary trading platforms in the foreign exchange market, and much of the data on exchange rates comes from them. Websites will usually get their data either from these sources directly or from a data provider that in turn gets it from EBS, Reuters, or another data source like Bloomberg or Haver Analytics. These data sources aren't free, however. In the US, many contracts, transactions, etc. that involve exchange rates use the exchange rate data published by the Federal Reserve. You might see this in contracts that specify to use \"\"the exchange rate published by the Federal Reserve at 12 pm (noon) on date --some date--\"\". You can also look at the Federal Reserve Economic Data, which maintains data series of historical daily, weekly, and monthly exchange rates for major currency pairs. These data are free, although they aren't realtime. Data for each business day is mostly updated the next business day.\"" }, { "docid": "479914", "title": "", "text": "TOCOM Crude is a cash-settled blend of Oman and Dubai crude oil, both quoted in USD. The daily settlement price is mark to market, but the final settlement price is based on reported prices from Dubai and Oman (or calculated in some cases with a known procedure), averaged and then converted to Yen using monthly average exchange rates as published by a reference bank (see Detailed Rules) You're trying to go all the way back and unfuddle quotes into a blend of USD-quoted oils. The correct procedure here would be to go with the Oman and Dubai prices in the first place (unless you're trying to arbitrage the TOCOM market). As to why they do it this way? It's a service. TOCOM takes on all the challenges to provide customers with a steady and consistent way of trading cash-oil. For physical oil, all you'd have to do is buy the blend on Dubai's and Oman's spot market. You trust TOCOM's price finding process, i.e. there will be no discrepancies between your TOCOM cash-oil and the Middle East physical oil. Edit: As to why Japan isn't buying WTI directly: There's a considerable cost of carry. WTI delivery location is Cushing, OK; there are pipelines but it's still a logistics act to get the oil to a port on the West Coast and then have it shipped to Japan. Dubai's delivery is at Jebel Ali (Persian Gulf), Omani crude can be shipped straight from Mina Al Fahal. Not only is it a shorter trip but also there are more shipping companies specialised in oil deliveries to the Asian hotspots. Why they pay in USD? Persian oil is highly sought after in nearly all of Asia's economies but there's little other exported goods from there. So naturally the market for currency crosses (AEDJPY, OMRJPY, AEDINR, OMRINR, etc.) is not that liquid. At least not as liquid as to make buying Persian oil a smooth deal. Anyway, both Dubai and Oman chose to follow Western practice to quote their contracts in USD and (maybe because of liquidity concerns) also to accept USD for payment only." }, { "docid": "226102", "title": "", "text": "Central banks don't generally post exchange rates with other currencies, as they are not determined by central banks but by the currency markets. You need a source for live exchange rate data (for example www.xe.com), and you need to calculate the prices in other currencies dynamically as they are displayed -- they will be changing continually, from minute to minute." }, { "docid": "96211", "title": "", "text": "\"the Yen is *the source* of **\"\"carry trades\"\"**. It means whichever savvy people with means who want to borrow money to invest on a leveraged basis anywhere in the world, come running to borrow in yen. Why? Because (1) Japan is an advanced economy whose currency is freely convertible to many many currencies/countries who are happy to convert yen back and forth. (2) Japanese interest rates are low, lower than in the west b/c of their earlier deflationary crises due to too much debt and due to west requiring Yen to be too strong after the Plaza accords; so it's cheap to borrow there. So a lot of investment around the world has, in origin, come from borrowing in japan. As long as that investment is \"\"on\"\", the loan to japan remains outstanding. But the investor earns the \"\"carry\"\": the rate of difference between the cost of borrowing in Yen, and earning the return from whatever investment it is. When scary things happen (like war, disaster, coups etc) the big money bags/investors pull their money out of their investments and put it in their banks. This means they sell their investments, wherever they are, convert some of that money back into yent ( BUY YEN ) to return their yen loans. yen goes up.\"" } ]

[ { "docid": "212810", "title": "", "text": "Of course, it is a scam. Regardless of how the scam might work, you already know that the person on the other end is lying, and you also know that people in trouble don't contact perfect strangers out of the blue by e-mail for help, nor do they call up random phone numbers looking for help. Scammers prey on the gullibility, greed, and sometimes generosity of the victims. As to how this scam works, the money that the scammer would be depositing into your father's account is not real. However, it will take the bank a few days to figure that out. In the mean time, your father will be sending out real money back to the scammer. When the bank figures out what is going on, they will want your father to pay back this money." } ]

[ { "docid": "29571", "title": "", "text": "how are the ways he could scam me? There are hundreds of different ways the scam can progress ... broadly;" }, { "docid": "592785", "title": "", "text": "This is a variation of a very common scam. The principle of the scam is this: I give you a check for a huge amount of money which you pay in your account. Then I ask you to pay some money from your account into a third account. Two months later the bank detects that my check was forged / stolen / cancelled / whatever and takes the huge amount of money away from your account. But you paid the money from your account, and that money is gone from your account and irrevocably ended up in my account." }, { "docid": "7046", "title": "", "text": "\"diamonds are intrinsically worthless this is simply wrong. (1) Diamonds that are sold for anything less than, oh, let's say $5000 at original retail - are indeed utterly, totally, completely worthless. It is simply \"\"one of the great scams\"\". Their real \"\"price\"\" is maybe \"\"five bucks\"\". End of story. There is no secondary market. Literally - \"\"end of story\"\". If you buy a \"\"diamond\"\" lol for \"\"$2000\"\" to impress your loved one, you can not then \"\"sell it\"\" for any amount of money. It is: worthless. Once again: simple, undeniable fact. the diamond you bought for 2 grand cannot be resold. Ir's worthless. (OK, maybe you can get 100 bucks for it, something like that. Or, you can scam someone clueless, and get 200 bucks.) (2) However actual \"\"investment\"\" stones do in fact have a value - if somewhat fragile. Example, a few years ago I sold a stone for 30 thousand. That was a \"\"real\"\" price and it was quite liquid - I was within days able to find a buyer. (A dealer - he would have then sold it on for 35 or whatever.) I have never dealt in stones over six figures, but I'm fairly certain those are \"\"real\"\" valuable objects: just like paintings by name artists. (However: yes, the line between \"\"laughable diamonds\"\" and actual investment stones, is indeed moving ever upwards.) (Note - the \"\"elephant in the room\"\" with diamonds is that GE's industrial process for simply making utterly flawless diamonds, starting with carbon, is getting better every decade.) (A second overwheleming point that nobody has mentioned: diamonds get beat-up. Regarding \"\"engagement ring diamonds\"\", a used one is exactly as useless as a used car. It's crap. Just as with $200,000 picassos, this concept does not apply to \"\"actual investment stones\"\".) Note that many of the comments/arguments on this page are very confused because: people are not distinguishing between the (ROFL) \"\"engagement ring scam market\"\" and the rarefied \"\"investment gem market\"\". The two things are utterly different. Yes, \"\"engagement ring diamonds\"\" are an utter scam, and are simply: \"\"worthless\"\". The fundamental, basic, overwhelming scam in today's business/social universe is: \"\"engagement diamonds\"\". Yes, the price is only due to marketing/monopolies etc. Elephant in the room A: GE's technology can - end of story - manufacture diamonds. (Starting with \"\"pencil leads\"\".) End of story. It's all over. Elephant in the room B: folks forget that diamonds get beat-up, they are just like used cars. Regarding \"\"engagement-ring diamonds\"\", nobody has ever, or will ever, bought a used one. Simple, utterly undeniable fact: regarding \"\"engagement ring diamonds\"\". they have: zero value. You cannot resell them. End of story. If you buy a house, you can resell it. If you buy a car, you can resell it (at a spectacular loss). If you buy a picasso, you can resell it (almost always making a huge profit). If you buy an \"\"engagement ring diamond\"\", it is worth: nothing. Zero. Nada. strictly regarding investment stones, which is a distinctly utterly different market. This market has no connection, in any way, at all, even vaguely, it is utterly unrelated, to \"\"engagement ring diamonds\"\". You can in fact buy and sell these items - very much like say \"\"art\"\" or \"\"mid century antiques\"\", and make money. This market just has utterly no connection to the whole \"\"engagement ring diamonds\"\" scam system. Say you buy wine at the supermarket, for 5 to 100 bucks a bottle. If you think that the \"\"wine\"\" thus bought, has a secondary market, or you can invest in it or something: you have lost your mind. In total contrast: Yes, although totally flakey, there is indeed an \"\"investment wine market\"\" which is real and reasonable. I for example have made some money in that. (I have a great anecdote even - I had one cellar of wine in burgundy, which could have been sold for, say, 30 grand - but we drank it :) ) Again, the (somewhat bizarre) actual market in investment wine, just has to \"\"buying wine in the supermarket\"\". To further the analogy: wine prices in the supermarket / your (ROFL) wine dealer, from 5 to 100 bucks, are just: utterly laughable. Utterly. Laughable. Much as folks sit around, and decide on \"\"label designs\"\", they sit around, and decide on \"\"price points\"\". There is, utterly, no difference between $5 and $100 grape juice rofl \"\"wine\"\". The price difference is simply a marketing decision: at best, you can think of it as a Velbin good. ... exactly the same applies to \"\"engagement ring diamonds\"\".\"" }, { "docid": "586649", "title": "", "text": "\"Generally, yes. Rather than ask, \"\"why are these guys so cheap?\"\", you should be asking why the big names are so expensive. :) Marketing spend plays a big role there. Getting babies to shill for your company during the super bowl requires a heck of a lot of commissions. Due to the difficulties involved in setting up a brokerage, it's unlikely that you'll see a scam. A brokerage might go bankrupt for random reasons, but that's what investor insurance is for. \"\"Safeness\"\" is mostly the likelihood that you'll be able to get access to your funds on deposit with the broker. Investment funds are insured by SIPC for up to $500,000, with a lower limit on cash. The specific limits vary by broker, with some offering greater protection paid for on their own dime. Check with the broker -- it's usually on their web pages under \"\"Security\"\". Funds in \"\"cash\"\" might be swept into an interest-earning investment vehicle for which insurance is different, and that depends on the broker, too. A few Forex brokers went bankrupt last year, although that's a new market with fewer regulatory protections for traders. I heard that one bankruptcy in the space resulted in a 7% loss for traders with accounts there, and that there was a Ponzi-ish scam company as well. Luckily, the more stringent regulation of stock brokerages makes that space much safer for investors. If you want to assess the reliability of an online broker, I suggest the following: It's tempting to look at when the brokerage was founded. Fly-by-night scams, by definition, won't be around very long -- and usually that means under a few months. Any company with a significant online interface will have to have been around long enough to develop that client interface, their backend databases, and the interface with the markets and their clearing house. The two brokerages you mentioned have been around for 7+ years, so that lends strength to the supposition of a strong business model. That said, there could well be a new company that offers services or prices that fit your investment need, and in that case definitely look into their registrations and third-party reviews. Finally, note that the smaller, independent brokerages will probably have stiffer margin rules. If you're playing a complex, novel, and/or high-risk strategy that can't handle the volatility of a market crash, even a short excursion such as the 2010 flash crash, stiff margin rules might have consequences that a novice investor would rather pretend didn't exist.\"" }, { "docid": "504450", "title": "", "text": "There are lots of red flags here that point to an obvious scam. First, no one, not even people close to you, ever have a valid reason to get your password or security questions. EVER. The first thing they will do is clean out the account you gave them. The second thing they will do is clean out any account of yours that uses the same password. Second, no one ever needs to run money through your account for any reason. If its not your money, don't take it. Third, this person is in the army but was deported to Africa (not to any particular country, just Africa), and is still in the army? This doesn't really make sense at all. This is a blatant obvious scam." }, { "docid": "545752", "title": "", "text": "If your concern is scams, we should be talking about counterparties, not bitcoin itself. Unless you think the protocol itself is a scam, which imo it most certainly is not. You're conflating the trustworthiness of counterparties with the trustworthiness of the underlying protocol, which imo is not a very good model to operate by. You'll understand the situation better of you look at them independently. Bitcoin isn't trying to be a credit agency or the better business bureau, it's just trying to be digital money. Don't expect it to protect you from scams any more than cash will. That's not its job, and does not affect its trustworthiness as money." }, { "docid": "447173", "title": "", "text": "So i made a price comparison video about world ventures to prove that their deals are actually beneficial and that this company is not a scam... The general idea on reddit is that this company is a scam. What are your thoughts after watching this video?" }, { "docid": "181371", "title": "", "text": "\"This is a very trivial scam. Flow is like this: Send money to Mr. X (you, in this case). Call Mr. X and ask for the money back, because mistake. Usually they ask for a wire transfer/cash/gift cards/prepaid cards or something else irreversible/untraceable. Mr. X initiates transfer back to Scammer. Accept the transfer from Mr. X Dispute the original transfer or otherwise cancel it through the netbank Mr. X cannot dispute his transfer to the Scammer, since it was genuinely and intentionally initiated by Mr. X. End up with twice the money, at the expense of Mr. X In other countries this is usually done with forged checks, but transfers can work just as well. As long as the transfer can be retroactively canceled or reversed - the scam works. You mentioned money laundering - this is definitely a possibility as well. They transfer dirty money to you from unidentified sources, and you send a \"\"gift\"\" to them with a clear paper trail. When the audit comes - the only proof is that you actually sent them the gift, and no-one will believe your story. You'll have to explain why the Mr. Z who's now in jail sent you a $1K of his drug money. However, in this case I think it is more likely a scam, and the scammer didn't really know what he was doing...\"" }, { "docid": "16774", "title": "", "text": "There's nothing particularly special about a two million dollar cheque. While they aren't commonplace, the bank certainly has experience with them. Many ATMs won't allow a deposit of that size but the bank cashiers will certainly accept them. They will typically get a supervisor to sign off on the deposit and may ask about the source of the money, for fraud prevention reasons. They may be held for longer than a smaller cheque if the bank manager chooses to do so. If there's nothing remotely suspicious (for example, it is a cheque from an insurance company for an expected payout), you should expect it will clear in about a week. On the other hand, if it is a cheque from a bank in another country and the bank manager has any reason to suspect it may not be legitimate, they may hold it for a month or more. Even then, you are not guaranteed the cheque was legitimate. This is used in a common scam." }, { "docid": "265278", "title": "", "text": "This is dangerous as it is a typical a scam. Trudy convinces Bob to help her avoid an ATM free or some other pretense. She writes Bob a check for $100, but is willing to take only $80 to return the favor. Bob agrees. Bob deposits the check, gives Trudy the $80 and then later finds out the check is bad. In most cases Bob will not be able to find or contact Trudy. However, in some rare cases if Trudy feels Bob is very gullible, she will do the same thing again and again as long as Bob allows. Sometimes the amounts will increase to surprisingly high levels." }, { "docid": "469964", "title": "", "text": "\"Its neither. Its a scam. there's no value underlying it, and it has proven to be the most speculative and untrustworthy investment there is. The scam works like a pyramid scam, so the more people come later on the more people who came in earlier on gain, so that is why you see so much hype around it encouraged and fueled by those early adopters who'll cash out at your expense. Imagine people who jumped on the bandwagon when each coin was worth a mere fraction of a dollar - they want you to \"\"invest\"\" at the current price of hundreds of dollars per unit so that they could cash out. You'd be better off with tulips, really. (And don't be discouraged by the downvotes on this answer, of course those scamers will try to shut me down. That will just prove the point.)\"" }, { "docid": "97582", "title": "", "text": "Yes, this is a scam. Tell your dad not to pay any money. There will likely be a large deposit in his account, but if he withdraws the money from his account, the bank will come after him looking for the money when the transfer to his account is reversed." }, { "docid": "393152", "title": "", "text": "Well, these can range from loan broker to outright scams. It is pretty typical that loan broker just take some fee in the middle for their service of filling your applications for a bunch of real loan provider companies. Because making a web page costs nothing, a single loan broker could easily have many web pages with a bit different marketing so that they can get as many customers as possible. But of course some of the web pages can be actual scams. As soon as you provide enough information for taking out a loan, they can go to a real financial institution, take out the loan and run with the money. In most countries consumer protection laws do not apply to business-to-business transactions, so you have to be even more wary of scams than usual." }, { "docid": "300107", "title": "", "text": "I know this is broad, but this isn't a scam -- it's a workshop/educational thing about teaching people of investing in the real estate market, and how to profit The scam is that the free or cheap class doesn't give you enough info to make money; so they sell you a more advanced and expensive class that gets you almost enough info; but the goal of the 2nd class is to get you to pay for the specialized seminar and coaching sessions that either fail to materialize or are so basic they aren't worth the money." }, { "docid": "98356", "title": "", "text": "There's a good explanation of this type of scam at the following link; It's known as a Spot-Delivery scam. https://www.carbuyingtips.com/top-10-scams/scam1.htm Also, I read this one a while back, and immediately this post reminded me of it: http://oppositelock.kinja.com/when-the-dealership-steals-back-the-car-they-just-sold-1636730607 Essentially, they claim you'll get one level of financing, let you take the car home, and then attempt to extort a higher financing APR out of you or request more money / higher payments. Check your purchasing agreement, it may have a note with something along the lines of 'Subject to financing approval' or something similar. If it does, you might be 'out of luck', as it were. Contact an attorney; in some cases (Such as the 'oppositelock.kinja.com' article above) consumers have been able to sue dealers for this as theft." }, { "docid": "335376", "title": "", "text": "\"You're being scammed. I'd be willing to bet this 'celebrity' friend is a fake account on Instagram with 20k followers that befriends lonely neckbeards then tries to scam them. Save your money. Even if this is a legitimate long term friend whom you trust, you should put a lot more thought into \"\"investing\"\" money (that you don't have) into her brothers drug shop.\"" }, { "docid": "9737", "title": "", "text": "100% scam. Run away. If you have already given the bank account, inform the bank and close the account. Else just close the new account opened. Do not contact the scammer or reply back.... Just ignore ... Don't read any of scammer email, they are very convincing in why it's right and why it's not a scam." }, { "docid": "488334", "title": "", "text": "\"OK, there is no way in hell that a stranger should have your contact details. there is no way in hell that a stranger should be able to determine your name from that account number unless you are previously known to them. Have they explained to your satisfaction how any previous relationship was established? It was correct to direct them back to their own bank or their branch manager if they bank with the CBA. There are procedures in place for this, and you are in the clear if the bank handles it. Even there is a previous relationship, and you are in their address book, think long and hard about their \"\"bona fides\"\". It may not have been a scam they may have had fat fingers and be genuinely out of pocket now. It is SOP that if you refuse to refund the money the banks will become less helpful. (EDIT - you have consented to retrun the money). EDIT - IF you had not consented... Disclosure: I am a former CBA employee and a 20 year veteran of NetBank, and these are my own opinions.\"" }, { "docid": "94066", "title": "", "text": "\"It's not a scam because you lose money. It's a scam because the way to make money is by signing up other people to be part of your \"\"sales team\"\" or whatever they call it. You're not making money by selling products, you're making money by signing schmucks up who hopefully go on to sign up more schmucks.\"" } ]

[ { "docid": "580479", "title": "", "text": "It used to be Nigerian royalty, now it's Ghanaian porn stars. Great. This is a bog-standard 419 scam. It's probably the most lucrative single swindle in the world. It's always hard to get people to believe they have been tricked, but don't let your dad participate." } ]

[ { "docid": "400950", "title": "", "text": "Yes. It is a scam, and here is how it will work. They will deposit a phony check into the account which will appear to clear. You will send money to Africa from the account. The check will take a while to bounce, but it will bounce. They will take it back out of your account (and may try to prosecute you for a fake check). At best, your account balance will go negative and you will owe the money back to the bank that you sent. The people you sent the money to will vanish." }, { "docid": "578024", "title": "", "text": "A US buyer wanted to import Gold from Ghana but due to insufficient working capital they were unable to obtain a Standby LC from their local bank. They contacted BWT for help &amp; we facilitated their Gold deal by providing Standby Letter of Credit (SBLC, MT760) in favor of their Ghana Seller." }, { "docid": "400947", "title": "", "text": "This sounds like a scam. Did they email you out of the blue to offer you this 'job', by any chance, and you'd never heard of them before? That's an incredibly large red flag in and of itself. While I don't know quite what the scam is likely to be, here's how I would suggest it might work: Other variants are possible - say using a cheque rather than PayPal, or having Person A be the scammer as well. But this being a legitimate transaction is very unlikely." }, { "docid": "494791", "title": "", "text": "\"You should immediately tell your bank you've been scammed, request for the transactions' cancellation or revocation and get back most - if not all - of the money transferred. I've placed numerous orders online in the past and was always very careful about their trace-ability but I have to admit once I acted carelessly and got scammed. I didn't think of it much before placing an order for a very low priced laptop through a private seller on Amazon. I'd never purchased anything this way before but thought \"\"Amazon will protect me if anything goes wrong...\"\" so I sent an e-mail to the seller. He gave me his bank details (with Spanish IBAN) via a non-suspicious e-mail with the usual logos and e-mail address domain name, made the payment and guy came back to me saying he'll ship the laptop once he sees the funds received. Waited max. 2 days, trying to contact him but no response. Contacted Amazon giving the seller's ID and the \"\"transaction\"\"'s ID I'd received from him and they told me there's nothing they can do as that transaction is not recorded on their systems. Immediately after realizing I've been scammed and done my goof, I contacted my bank via e-mail explaining the situation. I was informed that the transaction can be cancelled but they cannot guarantee the return of the entire amount. After 2-3 days, I saw my balance richer by €950 and the payment I'd made to the scum was €1,000. I'd highly recommend that you check the fraud protection policy of your bank and in case there's something that can be done, then just get in contact with them explaining the situation.\"" }, { "docid": "586649", "title": "", "text": "\"Generally, yes. Rather than ask, \"\"why are these guys so cheap?\"\", you should be asking why the big names are so expensive. :) Marketing spend plays a big role there. Getting babies to shill for your company during the super bowl requires a heck of a lot of commissions. Due to the difficulties involved in setting up a brokerage, it's unlikely that you'll see a scam. A brokerage might go bankrupt for random reasons, but that's what investor insurance is for. \"\"Safeness\"\" is mostly the likelihood that you'll be able to get access to your funds on deposit with the broker. Investment funds are insured by SIPC for up to $500,000, with a lower limit on cash. The specific limits vary by broker, with some offering greater protection paid for on their own dime. Check with the broker -- it's usually on their web pages under \"\"Security\"\". Funds in \"\"cash\"\" might be swept into an interest-earning investment vehicle for which insurance is different, and that depends on the broker, too. A few Forex brokers went bankrupt last year, although that's a new market with fewer regulatory protections for traders. I heard that one bankruptcy in the space resulted in a 7% loss for traders with accounts there, and that there was a Ponzi-ish scam company as well. Luckily, the more stringent regulation of stock brokerages makes that space much safer for investors. If you want to assess the reliability of an online broker, I suggest the following: It's tempting to look at when the brokerage was founded. Fly-by-night scams, by definition, won't be around very long -- and usually that means under a few months. Any company with a significant online interface will have to have been around long enough to develop that client interface, their backend databases, and the interface with the markets and their clearing house. The two brokerages you mentioned have been around for 7+ years, so that lends strength to the supposition of a strong business model. That said, there could well be a new company that offers services or prices that fit your investment need, and in that case definitely look into their registrations and third-party reviews. Finally, note that the smaller, independent brokerages will probably have stiffer margin rules. If you're playing a complex, novel, and/or high-risk strategy that can't handle the volatility of a market crash, even a short excursion such as the 2010 flash crash, stiff margin rules might have consequences that a novice investor would rather pretend didn't exist.\"" }, { "docid": "751", "title": "", "text": "If some one ever offers High returns and low risk they are either extremely stupid or scamming you. If they did find a high return low risk investment a smart person would buy it then repackage it as a low return low risk investment and then sell it to you. People would still buy and they would make a ton. Either they are lying (scam) or a fool(about as bad)" }, { "docid": "28356", "title": "", "text": "\"It's a scam. Here's someone who paid \"\"Josie\"\" 2000 pounds and lost it all Here's a Google search result list of how this softcore porn actor, Josie Ann Miller, is being used as the face and name of scams\"" }, { "docid": "190266", "title": "", "text": "\"There is such a thing as Deposit Only. This will allow the individual's account to function only for collection of monetary deposits. NO ONE will be able to withdraw...only deposit. The account holder may still physically withdraw at their banking institution. Think of it as taking your account from a \"\"public\"\" profile to a \"\"private\"\" profile. Doing this is beneficial for ppl who may have been scammed into a program or product where there account is bieng fraudulently overdrafted, or simply to protect your funds from bieng drafted without your approval or despite your requests for ceasing the drafts. When making your account a deposit only account it's a good idea to open a NEW account at a Different banking institution, because some banks will still allow an account that is \"\"attached\"\" to the deposit only account to be drafted from it. WIth the new account you can utilize that one for paying day to day bills and just transfer funds from the deposit only account to the new account. A deposit only account is also a good way to build up a nice nest egg for yourself or even a young adult! source- Financial Adivsor 4years-\"" }, { "docid": "254759", "title": "", "text": "He said he would need my first and last name and my online banking information not my date of birth, SSN, Address, Bank Address, Routing number, or checking account number This is a scam. No one needs online Banking User name and password. If you have already given this info, close your account and disable internet banking. not my date of birth, SSN, Address, Giving your date of birth and SSN is also dangerous. So my question for you is it a scam or could he really be wanting to put money into my account? Oh yeah and also he said they'll send it through my account I'll send half BACK through money gram or western union. There is no legit reason for doing this. This is 100% scam, one would only loose money. Just walk away before any damage can be done" }, { "docid": "98356", "title": "", "text": "There's a good explanation of this type of scam at the following link; It's known as a Spot-Delivery scam. https://www.carbuyingtips.com/top-10-scams/scam1.htm Also, I read this one a while back, and immediately this post reminded me of it: http://oppositelock.kinja.com/when-the-dealership-steals-back-the-car-they-just-sold-1636730607 Essentially, they claim you'll get one level of financing, let you take the car home, and then attempt to extort a higher financing APR out of you or request more money / higher payments. Check your purchasing agreement, it may have a note with something along the lines of 'Subject to financing approval' or something similar. If it does, you might be 'out of luck', as it were. Contact an attorney; in some cases (Such as the 'oppositelock.kinja.com' article above) consumers have been able to sue dealers for this as theft." }, { "docid": "60562", "title": "", "text": "\"Here we go again! Why, oh why, would someone just open a bank account in your name with that much money for no good reason? Unless there's a very rich relative in your family tree, this can not come to a good ending. Besides, if this was money being left to you by someone as part of an inheritance, you'd hear from attorneys from the estate. Notwithstanding everything @NickR posted about the details of what makes it suspicious, ask yourself why a banker would contact you by email about an account with this much money in it. The bank would, at the very least, send you a registered/certified letter on official stationery. So what happens here is when you give them your banking information, whoever it is that's doing this will clean out your account, and that's for starters. They will ask for enough information to steal your identity too, and if you have good credit, that'll be gone in a heartbeat. The best scams (meaning the most successful ones) always appeal to peoples' greed, using large amounts of money that just miraculously belong to the victim, if only they'd give a little information to \"\"transfer\"\" the money. Worse yet, most of these scams will come up with some kind of \"\"fee\"\", \"\"tax\"\" or other expense that you have to pre-pay in order to make the transfer happen, so this just adds insult to injury when you find out (the hard way!) you've been scammed. DO NOT reply to the email you received or, if you already have, don't send any more responses. If they think they may have you on the hook then they won't stop trying, and it will become very messy very quickly. THIS IS NOT REAL MONEY! It isn't yours, it doesn't really exist, and all it will do is come to no good end if you go any further with it. Stay safe, my friend.\"" }, { "docid": "335376", "title": "", "text": "\"You're being scammed. I'd be willing to bet this 'celebrity' friend is a fake account on Instagram with 20k followers that befriends lonely neckbeards then tries to scam them. Save your money. Even if this is a legitimate long term friend whom you trust, you should put a lot more thought into \"\"investing\"\" money (that you don't have) into her brothers drug shop.\"" }, { "docid": "50368", "title": "", "text": "This sounds like a scam. C.f. Craigslist for normal warning signs of an on-line scam" }, { "docid": "25613", "title": "", "text": "So, you think forcing people to buy their auto insurance doesn't provide any money? It sounds like the customer didn't even know they were paying for it. Or, are you saying that this minor scam is nothing in the grand scheme of things, and that we should expect their scams to pay out at least a few billion?" }, { "docid": "517573", "title": "", "text": "\"Affinity fraud. You see, Madoff really didn't have to sell himself, people recommended him to their friends. In a similar way, it's easy once a scammer reels in one sucker to keep him on the hook long enough to get 10 friends to invest as well. I've written about Mortgage Acceleration scams, and the common thread is that they are first sold to friends, relatives, neighbors. People tell their fellow church goer about it and pretty soon people's belief just takes over as they want it to work. Edit - the scam I referenced above was the \"\"Money Merge Account\"\" and its reincarnated \"\"Wealth Unlimited.\"\" It claimed to use sophisticated software to enable one to pay their mortgage in less than half the time while not changing their budget. The sellers of the product weren't able to explain how it was supposed to work, since it was nonsense anyway. You were supposed to be able to borrow against a HELOC at a rate higher than your mortgage, yet come out ahead, enough to cut the time in half or less. The link I posted above leads to a spreadsheet I wrote in a weekend, which was better at the math than their software and free. It also linked to 66 pages of accumulated writing I did over a number of months starting in 2008. In the end, I never saw any prosecution over this scam, I suppose people were too embarrassed once they realized they wasted $3500. How can I get scammed buying S&P ETFs through Schwab? Easy, I can't.\"" }, { "docid": "57685", "title": "", "text": "\"First note that Standard Chartered Bank's domain is \"\"sc.com\"\", not \"\"scb.com\"\". The \"\"scb.com\"\" site appears to be an architecture company \"\"of sorts\"\". The \"\"yandex\"\" email address is for a Russian search company which offers free email services. The \"\"standardchartered.X10.bz\"\" email address is clearly a spoof use of the standard chartered name, and is registered in Belize - a small central American country and tax haven. The \"\"yilmazguneadana.org\"\" is not recognised by internet DNS, so appears to be an email only service. This is clearly a phishing scam. Do not respond to this email. Of the many thousands of people that have received this email, sadly some will be dumb enough to respond - the elderly are most vulnerable to this type of scam.\"" }, { "docid": "237974", "title": "", "text": "&gt; I personally think MLM systems are shady. You make this sound like a personal opinion. It is a fact, MLM are a shady way to scam money from aspirational poor people. If you want to scam poor people out of their money, go deal drugs. At least that way you will likely make a profit." }, { "docid": "469964", "title": "", "text": "\"Its neither. Its a scam. there's no value underlying it, and it has proven to be the most speculative and untrustworthy investment there is. The scam works like a pyramid scam, so the more people come later on the more people who came in earlier on gain, so that is why you see so much hype around it encouraged and fueled by those early adopters who'll cash out at your expense. Imagine people who jumped on the bandwagon when each coin was worth a mere fraction of a dollar - they want you to \"\"invest\"\" at the current price of hundreds of dollars per unit so that they could cash out. You'd be better off with tulips, really. (And don't be discouraged by the downvotes on this answer, of course those scamers will try to shut me down. That will just prove the point.)\"" }, { "docid": "442625", "title": "", "text": "\"This is not only a scam but it is potentially fraud that may get you in trouble. This \"\"friend\"\" of yours will wire you some money in which you do not know where this money is really from. It's obvious from other answers that his story is fictitious. Thus it is likely that this money was stolen through another scam/hack in which now he wants to wash this money through your bank account. If it turns out that is was stolen, any money you withdrawal for your \"\"cut\"\", will have to be returned and your account will be frozen.\"" } ]

[ { "docid": "527433", "title": "", "text": "The reason this sort of question gets asked over and over again is because it's initially difficult to comprehend how you can possibly be scammed if you have no money in your bank account. Perhaps this would make it easier to understand: Someone approaches you in the parking lot of a mall and says, Excuse me, complete stranger, please take this $100 bill and go buy me a pair of $50 shoes at the shoe store. Then go buy whatever you'd like with the rest of the money. Sounds like a good deal, right? The $100 bill is counterfeit. If it were not, the person would buy the shoes themselves. It doesn't get any simpler than that." } ]

[ { "docid": "115581", "title": "", "text": "I would go see a Lawyer no matter what. It's a form of a scam your parents are doing. Make sure it's YOUR name only on the title of the building if it is, then you have a MAJOR case against them. This is a form of Equity scam, in where you aren't really going to make hardly any money. Once you pay them that money towards the loan legally their stake needs to decrease according to what you said. ABSOLUTELY CONSULT A LAWYER!" }, { "docid": "539065", "title": "", "text": "\"That makes complete logical sense, this isn't a shutdown of cryptocurrency however. If you look at Russia, they banned Bitcoin at one point. Now they have said it is not illegal, and are looking to regulate it. It's entirely possible that the law makers don't understand it yet but eventually will. When that time comes rules will come into play possibly/hopefully will benefit the majority. The biggest factor playing against crypto right now is lack of understanding to the majority. Many people don't understand there is no security with an ICO, you have no guarantee of profit. They hear about the gains bitcoin is making and they get excited. There was an ad going around that literally said \"\"Missed the Bitcoin ICO? Don't miss this one\"\" or something along those lines. It is feeding off the uninformed. China isn't trying to ban crypto(We're talking about a large group of people), they're preventing ICOs from continuing what they are doing. A lot of ICOs are complete scams/ponzi schemes that benefit a very small percentage. They didn't just ban bitcoin, they banned scamming people. It's better to create a fast ban and change a law later, then to continue to allow people to get screwed while we debate logistics. Banning ICOs in my opinion is a step in the right direction and in no way should be seen as the start of the end.\"" }, { "docid": "298365", "title": "", "text": "It is absolutely a scam. Anyone who tells you they can give you a large amount of money for free is trying to scam you. Additional warning signs include:" }, { "docid": "78395", "title": "", "text": "This is a typical scam. Yes, you just got listed with the terrorists as trying to launder money internationally. Terrorist organizations will try to find someone in the US who will accept deposits from overseas sources then send that money to one of their operatives. Cooperate with whichever police force comes knocking on your door. Pray that it isn't Homeland Security. They do not need warrants." }, { "docid": "156581", "title": "", "text": "In the very unlikely event that it is not a scam, there would be a distinct probability that it is someone trying to launder money. You don't want to get caught up with drug dealers or ISIS terrorists, so forget it. There is also the possibility that your post is a scam, looking for people who would believe such nonsense. I wonder if people who reply are going to get phished." }, { "docid": "229756", "title": "", "text": "Slide 1 Blogspot: NORTON SCIENTIFIC SCAM-Detection and Prevention of Clinical Research Fraud - FC2 Knowhow deanciana Slide 2 NORTON SCIENTIFIC SCAM-Detection and Prevention of Clinical Research Fraud and Misconduct A Norton saeo.net — Current Class Dates (subject to change): Scheduled as Needed based on Student Demand. Email us a​t​o​n​l​i​n​e​t​r​a​i​n​@​n​o​r​t​o​n​a​u​d​i​t​s​.​c​o​m if you are interested in this course. Description - This is an advanced-level class that takes an in-depth examination of severe noncompliance, clinical data fabrication and falsification, scientific misconduct and fraud cases. The course focus is on developing skills for preventing fraud and misconduct and preparing clinical research professionals to better handle severe noncompliance. Slide 3 Source: saeo.net #NORTON SCIENTIFIC SCAM-Detection and Prevention of Clinical Research Fraud and Misconduct A Norton #norton scientific reblog clintonmccage: NORTON SCIENTIFIC SCAM-Detection and Prevention of Clinical Research Fraud and Misconduct A Norton Current Class Dates (subject to change): Scheduled as Needed based on Student Demand. Email us a​t​o​n​l​i​n​e​t​r​a​i​n​@​n​o​r​t​o​n​a​u​d​i​t​s​.​c​o​m if you are interested in this course. Slide 4 Description - This is an advanced-level class that takes an in-depth examination of severe noncompliance,clinical data fabrication and falsification, scientific misconduct and fraud cases. The course focus is on developing skills for preventing fraud and misconduct and preparing clinical research professionals to better handle severe noncompliance. Source: saeo.net #NORTON SCIENTIFIC SCAM-Detection and Prevention of Clinical Research Fraud and Misconduct A Norton #norton scientific reblog eddiemccrane: Slide 5 NORTON SCIENTIFIC SCAM-Detection and Prevention of Clinical Research Fraud and Misconduct A Norton Current Class Dates (subject to change): Scheduled as Needed based on Student Demand. Email us a​t​o​n​l​i​n​e​t​r​a​i​n​@​n​o​r​t​o​n​a​u​d​i​t​s​.​c​o​m if you are interested in this course. Description - This is an advanced-level class that takes an in-depth examination of severe noncompliance, clinical data fabrication and falsification, scientific misconduct and fraud cases. The course focus is on developing skills for preventing fraud and misconduct and preparing clinical research professionals to better handle severe noncompliance. Slide 6 Source: saeo.net #NORTON SCIENTIFIC SCAM-Detection and Prevention of Clinical Research Fraud and Misconduct A Norton #norton scientific 1 note reblog pittturvey: Norton Scientific : Blogspot | Facebook Fraud Prevention | NORTON SCIENTIFIC SCAM-Detection and Prevention of Clinical Research Fraud and Misconduct A Norton : Social-bookmarking.net Current Class Dates (subject to change): Scheduled as Needed based on Student Demand. Email us a​t​o​n​l​i​n​e​t​r​a​i​n​@​n​o​r​t​o​n​a​u​d​i​t​s​.​c​o​m if you are interested in this course. Slide 7 Description - This is an advanced-level class that takes an in-depth examination of severe noncompliance,clinical data fabrication and falsification, scientific misconduct and fraud cases. The course focus is on developing skills for preventing fraud and misconduct and preparing clinical research professionals to better handle severe noncompliance. Slide 8 Class Agenda/Modules - Instructors Make a Difference Defining Clinical Research Fraud and Misconduct Evaluation of Case History R.E.S.E.A.R.C.H. TM Skills Program Advanced Auditing and Monitoring Skills for Prevention Case Development" }, { "docid": "263659", "title": "", "text": "There are several red flags here. can they get my bank account info in any way from me transferring money to them? Probably yes. Almost all bank transactions are auditable, and intentionally cause a money track. This track can be followed from both sides. If they can use your bank account as if they were you, that is a bit deeper than what you are asking, but yes they (and the polish cops) can find you through that transfer. I did look up the company and didn't find any scam or complaints concerning them. Not finding scams or complains is good, but what did you find? Did you find good reviews, the company website, its register, etc, etc? How far back does the website goes (try the wayback machine) Making a cardboard front company is very easy, and if they are into identity theft the company is under some guy in guam that never heard of poland or paypal. As @Andrew said above, it is probably a scam. I'd add that this scam leverages on the how easier is to get a PayPal refund compared to a regular bank transfer. It is almost impossible to get the money back on an international transaction. Usually reverting a bank transfer requires the agreement in writing of the receiver and of both banks. As for paypal, just a dispute from the other user: You are responsible for all Reversals, Chargebacks, fees, fines, penalties and other liability incurred by PayPal, a PayPal User, or a third party caused by your use of the Services and/or arising from your breach of this Agreement. You agree to reimburse PayPal, a User, or a third party for any and all such liability. (source) Also, you might be violating the TOS: Allow your use of the Service to present to PayPal a risk of non-compliance with PayPal’s anti-money laundering, counter terrorist financing and similar regulatory obligations (including, without limitation, where we cannot verify your identity or you fail to complete the steps to lift your sending, receiving or withdrawal limit in accordance with sections 3.3, 4.1 and 6.3 or where you expose PayPal to the risk of any regulatory fines by European, US or other authorities for processing your transactions); (emphasis mine, source) So even if the PayPal transfer is not disputed, how can you be sure you are not laundering money? Are you being paid well enough to assume that risk?" }, { "docid": "348377", "title": "", "text": "If this is a practical, rather than hypothetical, question, the best advice that we could give would be to see a lawyer. If you think your teenager has done something illegal, get a lawyer. The lawyer will then take care of notifying the relevant parties and manage the accusations. In most cases, it would be sufficient to notify the police directly. They understand the concept of scams, and many of them have teenagers of their own. Most of the time, they will try to work with you rather than against you. But if you are really worried about it, this is what lawyers do. A lawyer can separate the teenager and the police, so the teenager makes no admissions. But the lawyer can get the necessary information to the police so that neither the teenager nor you is subject to an obstruction of justice charge. We can help you by pointing to resources or suggesting ways to document what has happened or is happening. Or just point out that something is a scam. But if you are worrying about prosecution, we can't really help you. You can't confide the relevant details to us. There is no asker/answerer confidentiality. Everything is published on the internet with archives. Without those relevant details, how good will our advice be? Talk to a lawyer. The lawyer can tell you what you can and cannot do. And what you tell the lawyer is privileged. So even if you admit criminality, the lawyer can't then tell anyone. And if you're worried that the lawyer might be restricted by what you've said, you can fire the lawyer and hire another. The first thing to do when you find yourself in a hole is stop digging. Trying to fix things for your teenager is digging. Go to a lawyer and share your concerns. Maybe some of them are groundless. From what you've shared, you could go to the police. But perhaps there is more that we don't know. If so and you are reluctant to share publicly on the internet, that's sensible. Go to a lawyer and share in private. If you are indigent and can't afford an attorney, look into Legal Aid. They may be in the phone book. If not, call the local bar association and ask for a referral for free legal advice for someone low income. Try to have a generic description of the problem, e.g. you're worried that someone scammed your teenager into doing something illegal. And just to say this one more time. As you've described things, it seems like you should be able to just go to the police and the bank and describe the scam. I don't hear anything that they would prosecute. If you've left something out that changes things, then a lawyer is the way to go. Then you can disclose everything to get advice." }, { "docid": "586649", "title": "", "text": "\"Generally, yes. Rather than ask, \"\"why are these guys so cheap?\"\", you should be asking why the big names are so expensive. :) Marketing spend plays a big role there. Getting babies to shill for your company during the super bowl requires a heck of a lot of commissions. Due to the difficulties involved in setting up a brokerage, it's unlikely that you'll see a scam. A brokerage might go bankrupt for random reasons, but that's what investor insurance is for. \"\"Safeness\"\" is mostly the likelihood that you'll be able to get access to your funds on deposit with the broker. Investment funds are insured by SIPC for up to $500,000, with a lower limit on cash. The specific limits vary by broker, with some offering greater protection paid for on their own dime. Check with the broker -- it's usually on their web pages under \"\"Security\"\". Funds in \"\"cash\"\" might be swept into an interest-earning investment vehicle for which insurance is different, and that depends on the broker, too. A few Forex brokers went bankrupt last year, although that's a new market with fewer regulatory protections for traders. I heard that one bankruptcy in the space resulted in a 7% loss for traders with accounts there, and that there was a Ponzi-ish scam company as well. Luckily, the more stringent regulation of stock brokerages makes that space much safer for investors. If you want to assess the reliability of an online broker, I suggest the following: It's tempting to look at when the brokerage was founded. Fly-by-night scams, by definition, won't be around very long -- and usually that means under a few months. Any company with a significant online interface will have to have been around long enough to develop that client interface, their backend databases, and the interface with the markets and their clearing house. The two brokerages you mentioned have been around for 7+ years, so that lends strength to the supposition of a strong business model. That said, there could well be a new company that offers services or prices that fit your investment need, and in that case definitely look into their registrations and third-party reviews. Finally, note that the smaller, independent brokerages will probably have stiffer margin rules. If you're playing a complex, novel, and/or high-risk strategy that can't handle the volatility of a market crash, even a short excursion such as the 2010 flash crash, stiff margin rules might have consequences that a novice investor would rather pretend didn't exist.\"" }, { "docid": "57685", "title": "", "text": "\"First note that Standard Chartered Bank's domain is \"\"sc.com\"\", not \"\"scb.com\"\". The \"\"scb.com\"\" site appears to be an architecture company \"\"of sorts\"\". The \"\"yandex\"\" email address is for a Russian search company which offers free email services. The \"\"standardchartered.X10.bz\"\" email address is clearly a spoof use of the standard chartered name, and is registered in Belize - a small central American country and tax haven. The \"\"yilmazguneadana.org\"\" is not recognised by internet DNS, so appears to be an email only service. This is clearly a phishing scam. Do not respond to this email. Of the many thousands of people that have received this email, sadly some will be dumb enough to respond - the elderly are most vulnerable to this type of scam.\"" }, { "docid": "543043", "title": "", "text": "His TTIP energy deal [is really scary](http://action.sierraclub.org/site/DocServer/Analysis_of_EU_Energy_Proposal_TTIP.pdf). because the US could have to pay literally billions of dollars in compensation if we decide for almost any reason to stop fracking. Just like with the insurance companies and healthcare insurance. Which is just as crazy because fracking wells only last a short time. its projected to raise the price of energy in the US, a lot. The rest of what I think is too speculative but it involves a big scam, like the bank scam in 2008. Targeting US taxpayers. I see it coming. Thats how they operate now." }, { "docid": "445314", "title": "", "text": "\"This is definitely a scam. My husband was inquiring with a \"\"company\"\" that was offering him to be. Representative for them. He got the same job details but the company was called Ceneo. I did due diligence and found that the real Ceneo has no problems receiving money directly from buyers around the world. The fake company mirrored their website, posted jobs on the net,hoping to \"\"employ\"\" unsuspecting people in the U.S. This is their reply to my husband when he asked the job details. DO NOT GET SCAMMED and held accountable for money laundering.\"" }, { "docid": "282196", "title": "", "text": "\"In general I don’t think you can blame the news stories. You can blame everyone’s preconceived notion that any sort of LBO or leveraged restructuring is the devil’s work. Every American is of course well-versed in the subject. From the Sealy example, you clearly have a journalist who has no idea what they are talking about. All you have is a cherry-picked summary of what took place. As such, the “finance scholars” jump in and explain how it’s all a giant scam. Bain LBO’d Sealy in 1997. As a part of that, it was saddled with ~$700m in debt. That of course is fodder for the \"\"finance scholars\"\" because they don't understand the benefits of debt and more generally how LBOs work, none of which are noted in the article. The article then notes that Sealy has recently encountered trouble. To the \"\"geniuses\"\" this is of course because of Romney's work and the ~$700m in debt. No one notices the fact that Bain unloaded this in 2004 for double what it paid for it. For those that did, the unloading was a textbook Bain scam. Bain unloaded this to KKR, perhaps the sharpest and most successful PE firm in history. Would KKR put $1.5b into this if it were a scam? According to the \"\"geniuses\"\", of course they would. How could Mitt Romney actually improve a business? No one looks at the fact that revenues were up considerably, margins had expanded tremendously, growth prospects were higher, and FCF yields were fantastic. This is why KKR bought the company, and this is what an LBO is supposed to be. I haven't done a ton of work on this case, it was before my time, but I would be very surprised if the growth wasn't accompanied by employee expansion as well. You also get the “I wish I had a way to just walk away from my debt” comment. I don’t even know where to begin explaining how asinine that is. Equity is subordinated to debt. That’s the definition of equity. The article also notes the one-sided-mattress idea, which is construed as Romney's giant scam to screw the average American while flipping this company and making his millions. The article of course didn't note that this one-sided mattress idea was a mere fraction of revenue. This was designed as an economy mattress, with an advertised shorter shelf life. Plus how can this be a scam? Would you go into the mattress store and pay the same amount for a mattress with only one side? If you would you deserve to get half of a mattress. So the crux of it is, this is in actuality an example of what an LBO should be. At least for Bain’s part. Bain took a business that was ripe for an LBO (reasonable steady FCF, low leverage), did the LBO, improved the business, and came out on top. What KKR did with it afterwords I have no idea. I would imagine it has more to do with deteriorating business conditions than the debt on its balance sheet. I work with restructurings over 100 hours a week. I of course don’t come up with the plans (I’m a lowly analyst building models and associated bitchwork) but I see just how brilliant these ideas are. In a lot of cases restructurings prevent the tripping of covenants and associated bankruptcy and allow for strategy to play out and for companies to grow. I can of course give a more detailed rant on the article, but I figured no one will read this anyway.\"" }, { "docid": "237974", "title": "", "text": "&gt; I personally think MLM systems are shady. You make this sound like a personal opinion. It is a fact, MLM are a shady way to scam money from aspirational poor people. If you want to scam poor people out of their money, go deal drugs. At least that way you will likely make a profit." }, { "docid": "442625", "title": "", "text": "\"This is not only a scam but it is potentially fraud that may get you in trouble. This \"\"friend\"\" of yours will wire you some money in which you do not know where this money is really from. It's obvious from other answers that his story is fictitious. Thus it is likely that this money was stolen through another scam/hack in which now he wants to wash this money through your bank account. If it turns out that is was stolen, any money you withdrawal for your \"\"cut\"\", will have to be returned and your account will be frozen.\"" }, { "docid": "339759", "title": "", "text": "There is no, like, false advertising or misleading that you can claim? Or even reporting them to the Better Business Bureau or something, which maybe isn't enough, but is something. Is there a way to report web scams that is actually effective? Because this seems to border on being a very widespread scam. They did actually take my money. Ebay, Amazon, and other major sites have policies that are pretty tight and can hold up. I wonder if this company can be compared to this but with very bad policies. Ebay can't just enact any policy and get away with it. If they take my money, it seems like there is legal recourse. You buy a product from me, I can't enact any policy on the purchase you make. I can't have fine print that says that you purchased this toy gun and so if it turns out to be a real gun and it kills your kid, too bad. Maybe that is a bad analogy. I'm just saying, websites are subject to reasonable questioning of their policies under the law or at least business institutions. I posted a 3 star review, but the comment (if they post it) is very direct and negative, without making any specific claims. Again, we'll see. I guess they can reject that as well." }, { "docid": "504450", "title": "", "text": "There are lots of red flags here that point to an obvious scam. First, no one, not even people close to you, ever have a valid reason to get your password or security questions. EVER. The first thing they will do is clean out the account you gave them. The second thing they will do is clean out any account of yours that uses the same password. Second, no one ever needs to run money through your account for any reason. If its not your money, don't take it. Third, this person is in the army but was deported to Africa (not to any particular country, just Africa), and is still in the army? This doesn't really make sense at all. This is a blatant obvious scam." }, { "docid": "343518", "title": "", "text": "\"This is clearly a scam, and you should stay away from it. Anyone reading this knew that from the title alone - and it seems that you know it too. Don't \"\"test\"\" whether something is a scam by putting your own money in it. That is exactly how these scammers make money, and how you lose it. How their scam works is irrelevant. The simple fact is that there is no way you can safely earn 20% return over the course of a year, let alone in 1 day*. You know this is true. Don't bother trying to figure out what makes it true in this case. There is no free lunch. Best case scenario, this is a hyper-risky investment strategy [on the level of putting your money down at a roulette wheel]. Worst case scenario, they simply steal your money. Either way, you won't come out ahead. Although I agree with others that this is likely a Ponzi scheme, that doesn't really matter. What matters is, there is no way they can guarantee those returns. Just go to a casino and throw your money away yourself, if you want that level of risk. *For reference, if you invested $100 for a year, earning 20% returns every day, you would have 6 million trillion trillion dollars by the end of the year. that's $6,637,026,647,624,450,000,000,000,000,000. that number doesn't even make sense. It's more money than exists on earth. So why would they need your $100?\"" }, { "docid": "394551", "title": "", "text": "\"add the interest for the next 5 payments and divide that by how much you paid on the principal during that time Let's see - on a $200K 6% loan, the first 5 months is $4869. Principal reduction is $1127. I get 4.32 or 432%. But this is nonsense, you divide the interest over the mortgage balance, and get 6%. You only get those crazy numbers by dividing meaningless ratios. The fact that early on in a mortgage most of the payment goes to interest is a simple fact of the the 30 year nature of amortizing. You are in control, just add extra principal to the payment, if you wish. This idea sounds like the Money Merge Account peddled by UFirst. It's a scam if ever there was one. I wrote about it extensively on my site and have links to others as well. Once you get to this page, the first link is for a free spreadsheet to download, it beats MMA every time and shows how prepaying works, no smoke, no mirrors. The second link is a 65 page PDF that compiles nearly all my writing on this topic as I was one of the finance bloggers doing what I could to expose this scam. I admit it became a crusade, I went as far as buying key word ads on google to attract the search for \"\"money merge account\"\" only to help those looking to buy it find the truth. In the end, I spent a few hundred dollars but saved every visitor the $3500 loss of this program. No agent who dialoged with me in public could answer my questions in full, as they fell back on \"\"you need to believe in it.\"\" I have no issue with faith-based religion, it actually stands to reason, but mortgages are numbers and there's order to them. If you want my $3500, you should know how your system works. Not one does, or they would know it was a scam. Nassim Taleb, author of \"\"The Black Swan\"\" offered up a wonderful quote, \"\"if you see fraud, and do not say 'fraud,' you are a fraud.\"\" The site you link to isn't selling a product, but a fraudulent idea. What's most disturbing to me is that the math to disprove his assertion is not complex, not beyond grade school arithmetic. Update 2015 - The linked \"\"rule of thumb\"\" is still there. Still wrong of course. Another scam selling software to do this is now promoted by a spin off of UFirst, called Worth Unlimited. Same scam, new name.\"" } ]

[ { "docid": "28356", "title": "", "text": "\"It's a scam. Here's someone who paid \"\"Josie\"\" 2000 pounds and lost it all Here's a Google search result list of how this softcore porn actor, Josie Ann Miller, is being used as the face and name of scams\"" } ]

[ { "docid": "50368", "title": "", "text": "This sounds like a scam. C.f. Craigslist for normal warning signs of an on-line scam" }, { "docid": "367944", "title": "", "text": "\"It doesn't matter if the terms are a \"\"fair deal\"\" or are \"\"too good to be true\"\" — either way, it's definitely a scam. They are \"\"phishing\"\" for your personal information, including your banking information, and have no intention of giving you a loan. How can I tell? Simple: all such offers like this everywhere are scams. There is no economic situation other than being a scammer to do this. Why would an individual put out their money to strangers at such a high risk for even a much, much higher purported return? They wouldn't.\"" }, { "docid": "153640", "title": "", "text": "This is a scam. Do not give them any money. A quick search on this site will yield many examples of this scam." }, { "docid": "592785", "title": "", "text": "This is a variation of a very common scam. The principle of the scam is this: I give you a check for a huge amount of money which you pay in your account. Then I ask you to pay some money from your account into a third account. Two months later the bank detects that my check was forged / stolen / cancelled / whatever and takes the huge amount of money away from your account. But you paid the money from your account, and that money is gone from your account and irrevocably ended up in my account." }, { "docid": "594206", "title": "", "text": "Just browsed their website. Not a single name of anybody involved. Their application process isn't safe(No https usage while transferring private information). And considering they contacted you rather than you contacting them, I will be very wary about how they got my details. And they are located in Indonesia. And a simple google takes me to a BOILER SCAM thread. So all in all you have been scammed. Try asking for your money back, but may not be that helpful. Next time before giving your money to somebody, do some due diligence. These type of scams aren't new and are very common." }, { "docid": "285077", "title": "", "text": "He helped build the world's biggest scam, where people effectively steal money from their future selves, and give part of it to Uber. Because Uber is the world's biggest payday loan scam, with interest at 25%. But instead of simply going to Uber to borrow money, you have to drive a fuckton of miles in your car, to borrow that money from yourself, and pay Uber for the privelege. So, if you are driving for Uber, you are either retarded, or desperate, and most likely, both." }, { "docid": "310845", "title": "", "text": "Yes this is a scam. Stay as far away as possible. Don't talk or send any messages. The more you talk, she would convince you that this is not a scam. Armed Forces have a very good way of taking care of their people. They don't need to do something like this." }, { "docid": "228858", "title": "", "text": "\"Short answer: Yes this is a scam. I see three different possibilities how they get you. I will rank them from \"\"best\"\" to worst Scammer A sends 100$ to you. You then follow his instructions and send back 50$ through WU (this is untraceable). He then contacts his bank and tells them he never intended to send that 100$ to you, then bank will then reverse that transaction and give him back his money, leaving you 50$ short. Scammer A hacks or scams innocent person B and either sends B:s money to you or tricks person B to do it. When person B reports this to the police it will look like you were behind the whole thing. The transaction will be reversed leaving you 50$ short and with unwanted police attention (see this article for an extreme example: https://www.wired.com/2015/10/online-dating-made-woman-pawn-global-crime-plot/) The nice person A wants to send money to a criminal syndicate or terrorist organization but don't want to be associated with it. Leaving you 50$ up (hurray) and possibly on a bunch of terrorist watch lists (ouch!). The extra info you provide wouldn't be necessary for any of these scams but I guess it could be nice to have for some regular identity theft. This is by no means an exhaustive list of all that the scammers could do. It's just a short list to show you how dangerous it would be to play along. To state the obvious, don't walk from this person, RUN!\"" }, { "docid": "190266", "title": "", "text": "\"There is such a thing as Deposit Only. This will allow the individual's account to function only for collection of monetary deposits. NO ONE will be able to withdraw...only deposit. The account holder may still physically withdraw at their banking institution. Think of it as taking your account from a \"\"public\"\" profile to a \"\"private\"\" profile. Doing this is beneficial for ppl who may have been scammed into a program or product where there account is bieng fraudulently overdrafted, or simply to protect your funds from bieng drafted without your approval or despite your requests for ceasing the drafts. When making your account a deposit only account it's a good idea to open a NEW account at a Different banking institution, because some banks will still allow an account that is \"\"attached\"\" to the deposit only account to be drafted from it. WIth the new account you can utilize that one for paying day to day bills and just transfer funds from the deposit only account to the new account. A deposit only account is also a good way to build up a nice nest egg for yourself or even a young adult! source- Financial Adivsor 4years-\"" }, { "docid": "442625", "title": "", "text": "\"This is not only a scam but it is potentially fraud that may get you in trouble. This \"\"friend\"\" of yours will wire you some money in which you do not know where this money is really from. It's obvious from other answers that his story is fictitious. Thus it is likely that this money was stolen through another scam/hack in which now he wants to wash this money through your bank account. If it turns out that is was stolen, any money you withdrawal for your \"\"cut\"\", will have to be returned and your account will be frozen.\"" }, { "docid": "478514", "title": "", "text": "\"I believe no-one who's in a legal line of business would tell you to default voluntarily on your obligations. Once you get an offer that's too good to be true, and for which you have to do something that is either illegal or very damaging to you - it is probably a scam. Also, if someone requires you to send any money without a prior written agreement - its probably a scam as well, especially in such a delicate matter as finances. Your friend now should also be worried about identity theft as he voluntary gave tons of personal information to these people. Bottom line - if it walks like a duck, talks like a duck and looks like a duck, it is probably a duck. Your friend had all the warning signs other than a huge neon light saying \"\"Scam\"\" pointing at these people, and he still went through it. For real debt consolidation companies, research well: online reviews, BBB ratings and reviews, time in business, etc. If you can't find any - don't deal with them. Also, if you get promises for debtors to out of the blue give up on some of their money - its a sign of a scam. Why would debtors reduce the debt by 60%? He's paying, he can pay, he is not on the way to bankruptcy (or is he?)? Why did he do it to begin with?\"" }, { "docid": "393152", "title": "", "text": "Well, these can range from loan broker to outright scams. It is pretty typical that loan broker just take some fee in the middle for their service of filling your applications for a bunch of real loan provider companies. Because making a web page costs nothing, a single loan broker could easily have many web pages with a bit different marketing so that they can get as many customers as possible. But of course some of the web pages can be actual scams. As soon as you provide enough information for taking out a loan, they can go to a real financial institution, take out the loan and run with the money. In most countries consumer protection laws do not apply to business-to-business transactions, so you have to be even more wary of scams than usual." }, { "docid": "208507", "title": "", "text": "$15 being how much it costs to drive a car about 10 miles, and does not account for a driver's time. Hilarious shit, from the biggest payday loan scam the planet has ever seen. Because Uber is nothing but a scam where you work your ass off, to steal money from your future self, and give 25% of it to Uber! But if you think 6 cents a mile is a decent wage for a cab driver (which is what you can make, if you are lucky), then by all means, please sign up!" }, { "docid": "78395", "title": "", "text": "This is a typical scam. Yes, you just got listed with the terrorists as trying to launder money internationally. Terrorist organizations will try to find someone in the US who will accept deposits from overseas sources then send that money to one of their operatives. Cooperate with whichever police force comes knocking on your door. Pray that it isn't Homeland Security. They do not need warrants." }, { "docid": "7046", "title": "", "text": "\"diamonds are intrinsically worthless this is simply wrong. (1) Diamonds that are sold for anything less than, oh, let's say $5000 at original retail - are indeed utterly, totally, completely worthless. It is simply \"\"one of the great scams\"\". Their real \"\"price\"\" is maybe \"\"five bucks\"\". End of story. There is no secondary market. Literally - \"\"end of story\"\". If you buy a \"\"diamond\"\" lol for \"\"$2000\"\" to impress your loved one, you can not then \"\"sell it\"\" for any amount of money. It is: worthless. Once again: simple, undeniable fact. the diamond you bought for 2 grand cannot be resold. Ir's worthless. (OK, maybe you can get 100 bucks for it, something like that. Or, you can scam someone clueless, and get 200 bucks.) (2) However actual \"\"investment\"\" stones do in fact have a value - if somewhat fragile. Example, a few years ago I sold a stone for 30 thousand. That was a \"\"real\"\" price and it was quite liquid - I was within days able to find a buyer. (A dealer - he would have then sold it on for 35 or whatever.) I have never dealt in stones over six figures, but I'm fairly certain those are \"\"real\"\" valuable objects: just like paintings by name artists. (However: yes, the line between \"\"laughable diamonds\"\" and actual investment stones, is indeed moving ever upwards.) (Note - the \"\"elephant in the room\"\" with diamonds is that GE's industrial process for simply making utterly flawless diamonds, starting with carbon, is getting better every decade.) (A second overwheleming point that nobody has mentioned: diamonds get beat-up. Regarding \"\"engagement ring diamonds\"\", a used one is exactly as useless as a used car. It's crap. Just as with $200,000 picassos, this concept does not apply to \"\"actual investment stones\"\".) Note that many of the comments/arguments on this page are very confused because: people are not distinguishing between the (ROFL) \"\"engagement ring scam market\"\" and the rarefied \"\"investment gem market\"\". The two things are utterly different. Yes, \"\"engagement ring diamonds\"\" are an utter scam, and are simply: \"\"worthless\"\". The fundamental, basic, overwhelming scam in today's business/social universe is: \"\"engagement diamonds\"\". Yes, the price is only due to marketing/monopolies etc. Elephant in the room A: GE's technology can - end of story - manufacture diamonds. (Starting with \"\"pencil leads\"\".) End of story. It's all over. Elephant in the room B: folks forget that diamonds get beat-up, they are just like used cars. Regarding \"\"engagement-ring diamonds\"\", nobody has ever, or will ever, bought a used one. Simple, utterly undeniable fact: regarding \"\"engagement ring diamonds\"\". they have: zero value. You cannot resell them. End of story. If you buy a house, you can resell it. If you buy a car, you can resell it (at a spectacular loss). If you buy a picasso, you can resell it (almost always making a huge profit). If you buy an \"\"engagement ring diamond\"\", it is worth: nothing. Zero. Nada. strictly regarding investment stones, which is a distinctly utterly different market. This market has no connection, in any way, at all, even vaguely, it is utterly unrelated, to \"\"engagement ring diamonds\"\". You can in fact buy and sell these items - very much like say \"\"art\"\" or \"\"mid century antiques\"\", and make money. This market just has utterly no connection to the whole \"\"engagement ring diamonds\"\" scam system. Say you buy wine at the supermarket, for 5 to 100 bucks a bottle. If you think that the \"\"wine\"\" thus bought, has a secondary market, or you can invest in it or something: you have lost your mind. In total contrast: Yes, although totally flakey, there is indeed an \"\"investment wine market\"\" which is real and reasonable. I for example have made some money in that. (I have a great anecdote even - I had one cellar of wine in burgundy, which could have been sold for, say, 30 grand - but we drank it :) ) Again, the (somewhat bizarre) actual market in investment wine, just has to \"\"buying wine in the supermarket\"\". To further the analogy: wine prices in the supermarket / your (ROFL) wine dealer, from 5 to 100 bucks, are just: utterly laughable. Utterly. Laughable. Much as folks sit around, and decide on \"\"label designs\"\", they sit around, and decide on \"\"price points\"\". There is, utterly, no difference between $5 and $100 grape juice rofl \"\"wine\"\". The price difference is simply a marketing decision: at best, you can think of it as a Velbin good. ... exactly the same applies to \"\"engagement ring diamonds\"\".\"" }, { "docid": "578024", "title": "", "text": "A US buyer wanted to import Gold from Ghana but due to insufficient working capital they were unable to obtain a Standby LC from their local bank. They contacted BWT for help &amp; we facilitated their Gold deal by providing Standby Letter of Credit (SBLC, MT760) in favor of their Ghana Seller." }, { "docid": "447173", "title": "", "text": "So i made a price comparison video about world ventures to prove that their deals are actually beneficial and that this company is not a scam... The general idea on reddit is that this company is a scam. What are your thoughts after watching this video?" }, { "docid": "400947", "title": "", "text": "This sounds like a scam. Did they email you out of the blue to offer you this 'job', by any chance, and you'd never heard of them before? That's an incredibly large red flag in and of itself. While I don't know quite what the scam is likely to be, here's how I would suggest it might work: Other variants are possible - say using a cheque rather than PayPal, or having Person A be the scammer as well. But this being a legitimate transaction is very unlikely." }, { "docid": "263659", "title": "", "text": "There are several red flags here. can they get my bank account info in any way from me transferring money to them? Probably yes. Almost all bank transactions are auditable, and intentionally cause a money track. This track can be followed from both sides. If they can use your bank account as if they were you, that is a bit deeper than what you are asking, but yes they (and the polish cops) can find you through that transfer. I did look up the company and didn't find any scam or complaints concerning them. Not finding scams or complains is good, but what did you find? Did you find good reviews, the company website, its register, etc, etc? How far back does the website goes (try the wayback machine) Making a cardboard front company is very easy, and if they are into identity theft the company is under some guy in guam that never heard of poland or paypal. As @Andrew said above, it is probably a scam. I'd add that this scam leverages on the how easier is to get a PayPal refund compared to a regular bank transfer. It is almost impossible to get the money back on an international transaction. Usually reverting a bank transfer requires the agreement in writing of the receiver and of both banks. As for paypal, just a dispute from the other user: You are responsible for all Reversals, Chargebacks, fees, fines, penalties and other liability incurred by PayPal, a PayPal User, or a third party caused by your use of the Services and/or arising from your breach of this Agreement. You agree to reimburse PayPal, a User, or a third party for any and all such liability. (source) Also, you might be violating the TOS: Allow your use of the Service to present to PayPal a risk of non-compliance with PayPal’s anti-money laundering, counter terrorist financing and similar regulatory obligations (including, without limitation, where we cannot verify your identity or you fail to complete the steps to lift your sending, receiving or withdrawal limit in accordance with sections 3.3, 4.1 and 6.3 or where you expose PayPal to the risk of any regulatory fines by European, US or other authorities for processing your transactions); (emphasis mine, source) So even if the PayPal transfer is not disputed, how can you be sure you are not laundering money? Are you being paid well enough to assume that risk?" } ]

[ { "docid": "97582", "title": "", "text": "Yes, this is a scam. Tell your dad not to pay any money. There will likely be a large deposit in his account, but if he withdraws the money from his account, the bank will come after him looking for the money when the transfer to his account is reversed." } ]

[ { "docid": "545752", "title": "", "text": "If your concern is scams, we should be talking about counterparties, not bitcoin itself. Unless you think the protocol itself is a scam, which imo it most certainly is not. You're conflating the trustworthiness of counterparties with the trustworthiness of the underlying protocol, which imo is not a very good model to operate by. You'll understand the situation better of you look at them independently. Bitcoin isn't trying to be a credit agency or the better business bureau, it's just trying to be digital money. Don't expect it to protect you from scams any more than cash will. That's not its job, and does not affect its trustworthiness as money." }, { "docid": "98356", "title": "", "text": "There's a good explanation of this type of scam at the following link; It's known as a Spot-Delivery scam. https://www.carbuyingtips.com/top-10-scams/scam1.htm Also, I read this one a while back, and immediately this post reminded me of it: http://oppositelock.kinja.com/when-the-dealership-steals-back-the-car-they-just-sold-1636730607 Essentially, they claim you'll get one level of financing, let you take the car home, and then attempt to extort a higher financing APR out of you or request more money / higher payments. Check your purchasing agreement, it may have a note with something along the lines of 'Subject to financing approval' or something similar. If it does, you might be 'out of luck', as it were. Contact an attorney; in some cases (Such as the 'oppositelock.kinja.com' article above) consumers have been able to sue dealers for this as theft." }, { "docid": "181371", "title": "", "text": "\"This is a very trivial scam. Flow is like this: Send money to Mr. X (you, in this case). Call Mr. X and ask for the money back, because mistake. Usually they ask for a wire transfer/cash/gift cards/prepaid cards or something else irreversible/untraceable. Mr. X initiates transfer back to Scammer. Accept the transfer from Mr. X Dispute the original transfer or otherwise cancel it through the netbank Mr. X cannot dispute his transfer to the Scammer, since it was genuinely and intentionally initiated by Mr. X. End up with twice the money, at the expense of Mr. X In other countries this is usually done with forged checks, but transfers can work just as well. As long as the transfer can be retroactively canceled or reversed - the scam works. You mentioned money laundering - this is definitely a possibility as well. They transfer dirty money to you from unidentified sources, and you send a \"\"gift\"\" to them with a clear paper trail. When the audit comes - the only proof is that you actually sent them the gift, and no-one will believe your story. You'll have to explain why the Mr. Z who's now in jail sent you a $1K of his drug money. However, in this case I think it is more likely a scam, and the scammer didn't really know what he was doing...\"" }, { "docid": "592785", "title": "", "text": "This is a variation of a very common scam. The principle of the scam is this: I give you a check for a huge amount of money which you pay in your account. Then I ask you to pay some money from your account into a third account. Two months later the bank detects that my check was forged / stolen / cancelled / whatever and takes the huge amount of money away from your account. But you paid the money from your account, and that money is gone from your account and irrevocably ended up in my account." }, { "docid": "310845", "title": "", "text": "Yes this is a scam. Stay as far away as possible. Don't talk or send any messages. The more you talk, she would convince you that this is not a scam. Armed Forces have a very good way of taking care of their people. They don't need to do something like this." }, { "docid": "7046", "title": "", "text": "\"diamonds are intrinsically worthless this is simply wrong. (1) Diamonds that are sold for anything less than, oh, let's say $5000 at original retail - are indeed utterly, totally, completely worthless. It is simply \"\"one of the great scams\"\". Their real \"\"price\"\" is maybe \"\"five bucks\"\". End of story. There is no secondary market. Literally - \"\"end of story\"\". If you buy a \"\"diamond\"\" lol for \"\"$2000\"\" to impress your loved one, you can not then \"\"sell it\"\" for any amount of money. It is: worthless. Once again: simple, undeniable fact. the diamond you bought for 2 grand cannot be resold. Ir's worthless. (OK, maybe you can get 100 bucks for it, something like that. Or, you can scam someone clueless, and get 200 bucks.) (2) However actual \"\"investment\"\" stones do in fact have a value - if somewhat fragile. Example, a few years ago I sold a stone for 30 thousand. That was a \"\"real\"\" price and it was quite liquid - I was within days able to find a buyer. (A dealer - he would have then sold it on for 35 or whatever.) I have never dealt in stones over six figures, but I'm fairly certain those are \"\"real\"\" valuable objects: just like paintings by name artists. (However: yes, the line between \"\"laughable diamonds\"\" and actual investment stones, is indeed moving ever upwards.) (Note - the \"\"elephant in the room\"\" with diamonds is that GE's industrial process for simply making utterly flawless diamonds, starting with carbon, is getting better every decade.) (A second overwheleming point that nobody has mentioned: diamonds get beat-up. Regarding \"\"engagement ring diamonds\"\", a used one is exactly as useless as a used car. It's crap. Just as with $200,000 picassos, this concept does not apply to \"\"actual investment stones\"\".) Note that many of the comments/arguments on this page are very confused because: people are not distinguishing between the (ROFL) \"\"engagement ring scam market\"\" and the rarefied \"\"investment gem market\"\". The two things are utterly different. Yes, \"\"engagement ring diamonds\"\" are an utter scam, and are simply: \"\"worthless\"\". The fundamental, basic, overwhelming scam in today's business/social universe is: \"\"engagement diamonds\"\". Yes, the price is only due to marketing/monopolies etc. Elephant in the room A: GE's technology can - end of story - manufacture diamonds. (Starting with \"\"pencil leads\"\".) End of story. It's all over. Elephant in the room B: folks forget that diamonds get beat-up, they are just like used cars. Regarding \"\"engagement-ring diamonds\"\", nobody has ever, or will ever, bought a used one. Simple, utterly undeniable fact: regarding \"\"engagement ring diamonds\"\". they have: zero value. You cannot resell them. End of story. If you buy a house, you can resell it. If you buy a car, you can resell it (at a spectacular loss). If you buy a picasso, you can resell it (almost always making a huge profit). If you buy an \"\"engagement ring diamond\"\", it is worth: nothing. Zero. Nada. strictly regarding investment stones, which is a distinctly utterly different market. This market has no connection, in any way, at all, even vaguely, it is utterly unrelated, to \"\"engagement ring diamonds\"\". You can in fact buy and sell these items - very much like say \"\"art\"\" or \"\"mid century antiques\"\", and make money. This market just has utterly no connection to the whole \"\"engagement ring diamonds\"\" scam system. Say you buy wine at the supermarket, for 5 to 100 bucks a bottle. If you think that the \"\"wine\"\" thus bought, has a secondary market, or you can invest in it or something: you have lost your mind. In total contrast: Yes, although totally flakey, there is indeed an \"\"investment wine market\"\" which is real and reasonable. I for example have made some money in that. (I have a great anecdote even - I had one cellar of wine in burgundy, which could have been sold for, say, 30 grand - but we drank it :) ) Again, the (somewhat bizarre) actual market in investment wine, just has to \"\"buying wine in the supermarket\"\". To further the analogy: wine prices in the supermarket / your (ROFL) wine dealer, from 5 to 100 bucks, are just: utterly laughable. Utterly. Laughable. Much as folks sit around, and decide on \"\"label designs\"\", they sit around, and decide on \"\"price points\"\". There is, utterly, no difference between $5 and $100 grape juice rofl \"\"wine\"\". The price difference is simply a marketing decision: at best, you can think of it as a Velbin good. ... exactly the same applies to \"\"engagement ring diamonds\"\".\"" }, { "docid": "488334", "title": "", "text": "\"OK, there is no way in hell that a stranger should have your contact details. there is no way in hell that a stranger should be able to determine your name from that account number unless you are previously known to them. Have they explained to your satisfaction how any previous relationship was established? It was correct to direct them back to their own bank or their branch manager if they bank with the CBA. There are procedures in place for this, and you are in the clear if the bank handles it. Even there is a previous relationship, and you are in their address book, think long and hard about their \"\"bona fides\"\". It may not have been a scam they may have had fat fingers and be genuinely out of pocket now. It is SOP that if you refuse to refund the money the banks will become less helpful. (EDIT - you have consented to retrun the money). EDIT - IF you had not consented... Disclosure: I am a former CBA employee and a 20 year veteran of NetBank, and these are my own opinions.\"" }, { "docid": "594206", "title": "", "text": "Just browsed their website. Not a single name of anybody involved. Their application process isn't safe(No https usage while transferring private information). And considering they contacted you rather than you contacting them, I will be very wary about how they got my details. And they are located in Indonesia. And a simple google takes me to a BOILER SCAM thread. So all in all you have been scammed. Try asking for your money back, but may not be that helpful. Next time before giving your money to somebody, do some due diligence. These type of scams aren't new and are very common." }, { "docid": "564156", "title": "", "text": "It could be that your friend is being scammed into recruiting you as another victim. So it is vaguely possible that this isn't malicious on their part. However, it is a scam if they are asking for your credit card info without a completely clear and good reason it's necessary. Which they have failed to do. That is reason enough to assume it's a scam, illegal, or both. Run. And seriously consider whether these are really people you can trust on anything, never mind money. At best they're gullible." }, { "docid": "367944", "title": "", "text": "\"It doesn't matter if the terms are a \"\"fair deal\"\" or are \"\"too good to be true\"\" — either way, it's definitely a scam. They are \"\"phishing\"\" for your personal information, including your banking information, and have no intention of giving you a loan. How can I tell? Simple: all such offers like this everywhere are scams. There is no economic situation other than being a scammer to do this. Why would an individual put out their money to strangers at such a high risk for even a much, much higher purported return? They wouldn't.\"" }, { "docid": "285077", "title": "", "text": "He helped build the world's biggest scam, where people effectively steal money from their future selves, and give part of it to Uber. Because Uber is the world's biggest payday loan scam, with interest at 25%. But instead of simply going to Uber to borrow money, you have to drive a fuckton of miles in your car, to borrow that money from yourself, and pay Uber for the privelege. So, if you are driving for Uber, you are either retarded, or desperate, and most likely, both." }, { "docid": "751", "title": "", "text": "If some one ever offers High returns and low risk they are either extremely stupid or scamming you. If they did find a high return low risk investment a smart person would buy it then repackage it as a low return low risk investment and then sell it to you. People would still buy and they would make a ton. Either they are lying (scam) or a fool(about as bad)" }, { "docid": "469964", "title": "", "text": "\"Its neither. Its a scam. there's no value underlying it, and it has proven to be the most speculative and untrustworthy investment there is. The scam works like a pyramid scam, so the more people come later on the more people who came in earlier on gain, so that is why you see so much hype around it encouraged and fueled by those early adopters who'll cash out at your expense. Imagine people who jumped on the bandwagon when each coin was worth a mere fraction of a dollar - they want you to \"\"invest\"\" at the current price of hundreds of dollars per unit so that they could cash out. You'd be better off with tulips, really. (And don't be discouraged by the downvotes on this answer, of course those scamers will try to shut me down. That will just prove the point.)\"" }, { "docid": "400950", "title": "", "text": "Yes. It is a scam, and here is how it will work. They will deposit a phony check into the account which will appear to clear. You will send money to Africa from the account. The check will take a while to bounce, but it will bounce. They will take it back out of your account (and may try to prosecute you for a fake check). At best, your account balance will go negative and you will owe the money back to the bank that you sent. The people you sent the money to will vanish." }, { "docid": "266062", "title": "", "text": "\"Why would you ask \"\"is the money yours\"\", when you know it isn't? When we were young children we were told \"\"two wrongs don't make a right\"\". As an adult we know that breaking the law \"\"to get back at\"\" someone we perceive as breaking the law is illegal. In sports and in real life, the retaliator often receives a worse punishment than the initial rule violator. In the case mentioned, the second part of the \"\"scam\"\" would proceed if you participated or not. The person would go to their bank and indicate a mistaken deposit and have such refunded to their account. By the correct amount yours would be debited. Woe to the person that spent this money prior to the debit.\"" }, { "docid": "543043", "title": "", "text": "His TTIP energy deal [is really scary](http://action.sierraclub.org/site/DocServer/Analysis_of_EU_Energy_Proposal_TTIP.pdf). because the US could have to pay literally billions of dollars in compensation if we decide for almost any reason to stop fracking. Just like with the insurance companies and healthcare insurance. Which is just as crazy because fracking wells only last a short time. its projected to raise the price of energy in the US, a lot. The rest of what I think is too speculative but it involves a big scam, like the bank scam in 2008. Targeting US taxpayers. I see it coming. Thats how they operate now." }, { "docid": "400947", "title": "", "text": "This sounds like a scam. Did they email you out of the blue to offer you this 'job', by any chance, and you'd never heard of them before? That's an incredibly large red flag in and of itself. While I don't know quite what the scam is likely to be, here's how I would suggest it might work: Other variants are possible - say using a cheque rather than PayPal, or having Person A be the scammer as well. But this being a legitimate transaction is very unlikely." }, { "docid": "129965", "title": "", "text": "\"So Linda/Josie's initial plan was to have your dad pay money to (supposedly) help her get the gold chest. After he would have paid, there would have been another complication, and more yet (someone to bribe, a plane ticket to buy, transport to arrange, customs to handle, whatever, the list would last as long as there's money to take). Even if he does not have much money, the appeal of his share of the treasure could have been enough to tempt him to spend money he can't, or borrow, etc. Once \"\"she\"\" found out that he doesn't have any money and/or is apparently not willing to send any, \"\"she\"\" switched to a different scam: she would send him a large check, have him deposit it on his bank account, transfer most of the money (minus his generous share) to \"\"her\"\". Once the money is irreversibly transferred, the check will bounce. End result: 0 in the account before the transaction, minus a lot afterwards. It's quite simple: if an e-mail from a perfect stranger includes any of the following keywords, it's a scam:\"" }, { "docid": "16774", "title": "", "text": "There's nothing particularly special about a two million dollar cheque. While they aren't commonplace, the bank certainly has experience with them. Many ATMs won't allow a deposit of that size but the bank cashiers will certainly accept them. They will typically get a supervisor to sign off on the deposit and may ask about the source of the money, for fraud prevention reasons. They may be held for longer than a smaller cheque if the bank manager chooses to do so. If there's nothing remotely suspicious (for example, it is a cheque from an insurance company for an expected payout), you should expect it will clear in about a week. On the other hand, if it is a cheque from a bank in another country and the bank manager has any reason to suspect it may not be legitimate, they may hold it for a month or more. Even then, you are not guaranteed the cheque was legitimate. This is used in a common scam." } ]

[ { "docid": "129965", "title": "", "text": "\"So Linda/Josie's initial plan was to have your dad pay money to (supposedly) help her get the gold chest. After he would have paid, there would have been another complication, and more yet (someone to bribe, a plane ticket to buy, transport to arrange, customs to handle, whatever, the list would last as long as there's money to take). Even if he does not have much money, the appeal of his share of the treasure could have been enough to tempt him to spend money he can't, or borrow, etc. Once \"\"she\"\" found out that he doesn't have any money and/or is apparently not willing to send any, \"\"she\"\" switched to a different scam: she would send him a large check, have him deposit it on his bank account, transfer most of the money (minus his generous share) to \"\"her\"\". Once the money is irreversibly transferred, the check will bounce. End result: 0 in the account before the transaction, minus a lot afterwards. It's quite simple: if an e-mail from a perfect stranger includes any of the following keywords, it's a scam:\"" } ]

[ { "docid": "298365", "title": "", "text": "It is absolutely a scam. Anyone who tells you they can give you a large amount of money for free is trying to scam you. Additional warning signs include:" }, { "docid": "25613", "title": "", "text": "So, you think forcing people to buy their auto insurance doesn't provide any money? It sounds like the customer didn't even know they were paying for it. Or, are you saying that this minor scam is nothing in the grand scheme of things, and that we should expect their scams to pay out at least a few billion?" }, { "docid": "484875", "title": "", "text": "Westgate is a notoriously terrible employer to work for in Orlando, and their whole timeshare business model is a complete scam. Check out all of the complaints on Comsumer Affairs' website: http://www.consumeraffairs.com/travel/westgate.html?page=2 edit: More complaints http://www.ripoffreport.com/directory/westgate-resorts.aspx http://www.utahstories.com/2008/06/13/timeshare-scam-westgate-resorts-2/ http://www.complaintsboard.com/complaints/westgate-resorts-tennessee-c226610.html http://westgate-resorts.pissedconsumer.com/westgate-scam-20120926347849.html" }, { "docid": "349932", "title": "", "text": "This is very similar to what was asked in this question: Scam or real? This is a real winner of a scam, because it always finds someone gullible enough to fall for it. No stranger sends you money just to be a nice guy. This version of the scam is one I've seen on job-hunting sites. They'll promise you a job, and then they say they'll send you a check for equipment and supplies, but you need to send most of the money back to them. As long as they find victims, they'll continue to find more refined techniques to stay ahead of the authorities, and it'll change just enough that people won't recognize it for what it is. AVOID THIS AT ALL COSTS!! I hope this helps. Good luck!" }, { "docid": "98356", "title": "", "text": "There's a good explanation of this type of scam at the following link; It's known as a Spot-Delivery scam. https://www.carbuyingtips.com/top-10-scams/scam1.htm Also, I read this one a while back, and immediately this post reminded me of it: http://oppositelock.kinja.com/when-the-dealership-steals-back-the-car-they-just-sold-1636730607 Essentially, they claim you'll get one level of financing, let you take the car home, and then attempt to extort a higher financing APR out of you or request more money / higher payments. Check your purchasing agreement, it may have a note with something along the lines of 'Subject to financing approval' or something similar. If it does, you might be 'out of luck', as it were. Contact an attorney; in some cases (Such as the 'oppositelock.kinja.com' article above) consumers have been able to sue dealers for this as theft." }, { "docid": "228858", "title": "", "text": "\"Short answer: Yes this is a scam. I see three different possibilities how they get you. I will rank them from \"\"best\"\" to worst Scammer A sends 100$ to you. You then follow his instructions and send back 50$ through WU (this is untraceable). He then contacts his bank and tells them he never intended to send that 100$ to you, then bank will then reverse that transaction and give him back his money, leaving you 50$ short. Scammer A hacks or scams innocent person B and either sends B:s money to you or tricks person B to do it. When person B reports this to the police it will look like you were behind the whole thing. The transaction will be reversed leaving you 50$ short and with unwanted police attention (see this article for an extreme example: https://www.wired.com/2015/10/online-dating-made-woman-pawn-global-crime-plot/) The nice person A wants to send money to a criminal syndicate or terrorist organization but don't want to be associated with it. Leaving you 50$ up (hurray) and possibly on a bunch of terrorist watch lists (ouch!). The extra info you provide wouldn't be necessary for any of these scams but I guess it could be nice to have for some regular identity theft. This is by no means an exhaustive list of all that the scammers could do. It's just a short list to show you how dangerous it would be to play along. To state the obvious, don't walk from this person, RUN!\"" }, { "docid": "181371", "title": "", "text": "\"This is a very trivial scam. Flow is like this: Send money to Mr. X (you, in this case). Call Mr. X and ask for the money back, because mistake. Usually they ask for a wire transfer/cash/gift cards/prepaid cards or something else irreversible/untraceable. Mr. X initiates transfer back to Scammer. Accept the transfer from Mr. X Dispute the original transfer or otherwise cancel it through the netbank Mr. X cannot dispute his transfer to the Scammer, since it was genuinely and intentionally initiated by Mr. X. End up with twice the money, at the expense of Mr. X In other countries this is usually done with forged checks, but transfers can work just as well. As long as the transfer can be retroactively canceled or reversed - the scam works. You mentioned money laundering - this is definitely a possibility as well. They transfer dirty money to you from unidentified sources, and you send a \"\"gift\"\" to them with a clear paper trail. When the audit comes - the only proof is that you actually sent them the gift, and no-one will believe your story. You'll have to explain why the Mr. Z who's now in jail sent you a $1K of his drug money. However, in this case I think it is more likely a scam, and the scammer didn't really know what he was doing...\"" }, { "docid": "190266", "title": "", "text": "\"There is such a thing as Deposit Only. This will allow the individual's account to function only for collection of monetary deposits. NO ONE will be able to withdraw...only deposit. The account holder may still physically withdraw at their banking institution. Think of it as taking your account from a \"\"public\"\" profile to a \"\"private\"\" profile. Doing this is beneficial for ppl who may have been scammed into a program or product where there account is bieng fraudulently overdrafted, or simply to protect your funds from bieng drafted without your approval or despite your requests for ceasing the drafts. When making your account a deposit only account it's a good idea to open a NEW account at a Different banking institution, because some banks will still allow an account that is \"\"attached\"\" to the deposit only account to be drafted from it. WIth the new account you can utilize that one for paying day to day bills and just transfer funds from the deposit only account to the new account. A deposit only account is also a good way to build up a nice nest egg for yourself or even a young adult! source- Financial Adivsor 4years-\"" }, { "docid": "265278", "title": "", "text": "This is dangerous as it is a typical a scam. Trudy convinces Bob to help her avoid an ATM free or some other pretense. She writes Bob a check for $100, but is willing to take only $80 to return the favor. Bob agrees. Bob deposits the check, gives Trudy the $80 and then later finds out the check is bad. In most cases Bob will not be able to find or contact Trudy. However, in some rare cases if Trudy feels Bob is very gullible, she will do the same thing again and again as long as Bob allows. Sometimes the amounts will increase to surprisingly high levels." }, { "docid": "399526", "title": "", "text": "You need to stop what you are doing right now and cut off contact with them! This is an extremely common scam. Here's how it works: They give you a check, maybe even a certified check. Usually in payment for something they are buying from you. The check happens to be for more than the sales price. They ask you to refund the difference, and pressure you to do so quickly. You will see why in a second. The check deposits fine and the money shows up in your account. Assuming the bank wouldn't do that if it wasn't a good check you let your guard down and pay them. In a couple of weeks, the bank detects that it is a fake check. They remove the money from your account, and may even report you for prosecution to local authorities for passing a fraudulent check. Meanwhile the person has the money you gave them and you can't find them because they gave you a fake name. To add insult to injury they may also have the property you sold them. You feel like a chump. Variants of this scam include them asking you to cash a check for them and you get to keep a part of the proceeds for your trouble. Sometimes it is presented as a work-at-home scheme. If you feel you absolutely must complete this deal, and you shouldn't. I would suggest you ask the person for a couple of forms of picture ID and tell them you need to make sure they aren't a scammer and you are going to do a background check on them with your local police to protect yourself. I predict the person will disappear and never contact you again about the money. Also, I suggest you talk to your bank immediately and inform them you think you might have been a victim of a scamming attempt so that you don't look like an accomplice when this is all said and done." }, { "docid": "564156", "title": "", "text": "It could be that your friend is being scammed into recruiting you as another victim. So it is vaguely possible that this isn't malicious on their part. However, it is a scam if they are asking for your credit card info without a completely clear and good reason it's necessary. Which they have failed to do. That is reason enough to assume it's a scam, illegal, or both. Run. And seriously consider whether these are really people you can trust on anything, never mind money. At best they're gullible." }, { "docid": "285077", "title": "", "text": "He helped build the world's biggest scam, where people effectively steal money from their future selves, and give part of it to Uber. Because Uber is the world's biggest payday loan scam, with interest at 25%. But instead of simply going to Uber to borrow money, you have to drive a fuckton of miles in your car, to borrow that money from yourself, and pay Uber for the privelege. So, if you are driving for Uber, you are either retarded, or desperate, and most likely, both." }, { "docid": "78395", "title": "", "text": "This is a typical scam. Yes, you just got listed with the terrorists as trying to launder money internationally. Terrorist organizations will try to find someone in the US who will accept deposits from overseas sources then send that money to one of their operatives. Cooperate with whichever police force comes knocking on your door. Pray that it isn't Homeland Security. They do not need warrants." }, { "docid": "751", "title": "", "text": "If some one ever offers High returns and low risk they are either extremely stupid or scamming you. If they did find a high return low risk investment a smart person would buy it then repackage it as a low return low risk investment and then sell it to you. People would still buy and they would make a ton. Either they are lying (scam) or a fool(about as bad)" }, { "docid": "175545", "title": "", "text": "Other people are saying this might be a scam, or this sounds like a scam. THIS IS DEFINITELY 100% A SCAM. Do not ship your computer equipment to these people. Personally I would never sell computer equipment outside of my country, and even then would probably use escrow." }, { "docid": "501690", "title": "", "text": "\"It is a scam. Not only will it get your personal information, which could allow him to impersonate you (like, using your identity as the generous lender on a future scam), in order to fulfill the loan, a \"\"small payment\"\" for some documents will be needed. And next another for a certificate necessary for lending, and so on. Their goal is to get your money, not lending you any. Aganju hit the nail: how would such person ensure that you will pay back, when he knows absolutely nothing about you? That would have been the #1 priority for someone that decided to invest using such unbelievable schema.\"" }, { "docid": "114231", "title": "", "text": "\"You have to realize that you're trying to have your cake and eat it too. You want to do things \"\"unofficially\"\" by not reporting the accident (to insurance companies and/or police), but you want to do it \"\"officially\"\" in that you want to have legal recourse if they try to hit you up for more money. The only way to have it both ways is to trust the other person. From a financial perspective, ultimately you need to decide if the monetary cost of your raised insurance premiums, etc., outweighs the cost of whatever money the other party in the accident will try to squeeze out of you (factoring in the likelihood that they will do so). You also would need to factor in the likelihood that, rather than trying to scam you, they'll pursue legal action against you. In short, from a purely monetary perspective, if the legitimate cost of repairs is $700 and the cost to you of doing it by the book via insurance is $2000, you should be willing to be scammed for up to $1300, because you'll still come out ahead. Of course, there are psychological considerations, like whether someone unscrupulous enough to scam you will stop at $1300. But those numbers are the baseline for whatever outcome calculations you want to do. On the more qualitative side of things, it is possible they're trying to scam you, but also possible they're just trying to hustle you into doing everything quickly without thinking about it. They may not be trying to gouge you monetarily, they just want to pressure you so they get their money. I agree with other answerers here that the ideal way would be for them to send you an actual bill after repairs are complete. However, you could ask them to send you a written copy of the repair shop estimate, along with a written letter in which they state that they will consider payment of that amount to resolve the issue and won't pursue you further. The legal strength of that is dubious, but at least you have some documentation that you didn't just try to stiff them. If they won't give you some form of written documentation, I would read that as a red flag, bite the bullet, and contact your insurance company.\"" }, { "docid": "282196", "title": "", "text": "\"In general I don’t think you can blame the news stories. You can blame everyone’s preconceived notion that any sort of LBO or leveraged restructuring is the devil’s work. Every American is of course well-versed in the subject. From the Sealy example, you clearly have a journalist who has no idea what they are talking about. All you have is a cherry-picked summary of what took place. As such, the “finance scholars” jump in and explain how it’s all a giant scam. Bain LBO’d Sealy in 1997. As a part of that, it was saddled with ~$700m in debt. That of course is fodder for the \"\"finance scholars\"\" because they don't understand the benefits of debt and more generally how LBOs work, none of which are noted in the article. The article then notes that Sealy has recently encountered trouble. To the \"\"geniuses\"\" this is of course because of Romney's work and the ~$700m in debt. No one notices the fact that Bain unloaded this in 2004 for double what it paid for it. For those that did, the unloading was a textbook Bain scam. Bain unloaded this to KKR, perhaps the sharpest and most successful PE firm in history. Would KKR put $1.5b into this if it were a scam? According to the \"\"geniuses\"\", of course they would. How could Mitt Romney actually improve a business? No one looks at the fact that revenues were up considerably, margins had expanded tremendously, growth prospects were higher, and FCF yields were fantastic. This is why KKR bought the company, and this is what an LBO is supposed to be. I haven't done a ton of work on this case, it was before my time, but I would be very surprised if the growth wasn't accompanied by employee expansion as well. You also get the “I wish I had a way to just walk away from my debt” comment. I don’t even know where to begin explaining how asinine that is. Equity is subordinated to debt. That’s the definition of equity. The article also notes the one-sided-mattress idea, which is construed as Romney's giant scam to screw the average American while flipping this company and making his millions. The article of course didn't note that this one-sided mattress idea was a mere fraction of revenue. This was designed as an economy mattress, with an advertised shorter shelf life. Plus how can this be a scam? Would you go into the mattress store and pay the same amount for a mattress with only one side? If you would you deserve to get half of a mattress. So the crux of it is, this is in actuality an example of what an LBO should be. At least for Bain’s part. Bain took a business that was ripe for an LBO (reasonable steady FCF, low leverage), did the LBO, improved the business, and came out on top. What KKR did with it afterwords I have no idea. I would imagine it has more to do with deteriorating business conditions than the debt on its balance sheet. I work with restructurings over 100 hours a week. I of course don’t come up with the plans (I’m a lowly analyst building models and associated bitchwork) but I see just how brilliant these ideas are. In a lot of cases restructurings prevent the tripping of covenants and associated bankruptcy and allow for strategy to play out and for companies to grow. I can of course give a more detailed rant on the article, but I figured no one will read this anyway.\"" }, { "docid": "575918", "title": "", "text": "Is there any truth to this, or is this another niche scam that's been brewing the last few years? While it may not be an outright scam, such schemes do tend to be on borderline of scams. Technically most of what is being said claimed can be true, however in reality such windfall gains never happen to the investors. Whatever gains are there will be cornered by the growers, trades, other entities in supply chain leaving very little to the investors. It is best to stay away from such investments." } ]

[ { "docid": "273307", "title": "", "text": "Sadly, people with millions of dollars rarely give it away to complete strangers that they found at random on the Internet in exchange for trivial efforts. Anyone who claims to be willing to give you millions of dollars for just about nothing in return is almost certainly pulling a scam. It doesn't matter if you can't figure out how they're going to cheat you. They have plan. Just because your father has no money doesn't mean he can't be robbed. The scammer is almost surely planning to move some money around, and leave your father with a debt that he will be legally obligated to pay. She'll then take off with the money. (Of course you figured out that the picture is fake. It may not even be a pretty young girl -- that may well just be a persona the scammer created to appeal to your father. It might really be a fat, balding old man.) Your father would be smarter to sit in his back yard and wait for money to fall from the sky." } ]

[ { "docid": "393152", "title": "", "text": "Well, these can range from loan broker to outright scams. It is pretty typical that loan broker just take some fee in the middle for their service of filling your applications for a bunch of real loan provider companies. Because making a web page costs nothing, a single loan broker could easily have many web pages with a bit different marketing so that they can get as many customers as possible. But of course some of the web pages can be actual scams. As soon as you provide enough information for taking out a loan, they can go to a real financial institution, take out the loan and run with the money. In most countries consumer protection laws do not apply to business-to-business transactions, so you have to be even more wary of scams than usual." }, { "docid": "575918", "title": "", "text": "Is there any truth to this, or is this another niche scam that's been brewing the last few years? While it may not be an outright scam, such schemes do tend to be on borderline of scams. Technically most of what is being said claimed can be true, however in reality such windfall gains never happen to the investors. Whatever gains are there will be cornered by the growers, trades, other entities in supply chain leaving very little to the investors. It is best to stay away from such investments." }, { "docid": "181371", "title": "", "text": "\"This is a very trivial scam. Flow is like this: Send money to Mr. X (you, in this case). Call Mr. X and ask for the money back, because mistake. Usually they ask for a wire transfer/cash/gift cards/prepaid cards or something else irreversible/untraceable. Mr. X initiates transfer back to Scammer. Accept the transfer from Mr. X Dispute the original transfer or otherwise cancel it through the netbank Mr. X cannot dispute his transfer to the Scammer, since it was genuinely and intentionally initiated by Mr. X. End up with twice the money, at the expense of Mr. X In other countries this is usually done with forged checks, but transfers can work just as well. As long as the transfer can be retroactively canceled or reversed - the scam works. You mentioned money laundering - this is definitely a possibility as well. They transfer dirty money to you from unidentified sources, and you send a \"\"gift\"\" to them with a clear paper trail. When the audit comes - the only proof is that you actually sent them the gift, and no-one will believe your story. You'll have to explain why the Mr. Z who's now in jail sent you a $1K of his drug money. However, in this case I think it is more likely a scam, and the scammer didn't really know what he was doing...\"" }, { "docid": "504450", "title": "", "text": "There are lots of red flags here that point to an obvious scam. First, no one, not even people close to you, ever have a valid reason to get your password or security questions. EVER. The first thing they will do is clean out the account you gave them. The second thing they will do is clean out any account of yours that uses the same password. Second, no one ever needs to run money through your account for any reason. If its not your money, don't take it. Third, this person is in the army but was deported to Africa (not to any particular country, just Africa), and is still in the army? This doesn't really make sense at all. This is a blatant obvious scam." }, { "docid": "594020", "title": "", "text": "I'm not in a MLM or anything but I'm a business owner and I'm wondering why people keep saying it's a scam because people lose money? Any opportunity has risk and the ratio of success to fail is pretty similar for normal businesses. These seem like sales jobs with commission only/exotic compensation plans. It's normal that people fail at this. Are they not compensating people that meet their targets? At any rate, I feel like the business itself isn't a scam, but a lot of the salespeople are scummy by not really explaining the odds. I also don't like the cult-like vibe I get from some people in those groups." }, { "docid": "97582", "title": "", "text": "Yes, this is a scam. Tell your dad not to pay any money. There will likely be a large deposit in his account, but if he withdraws the money from his account, the bank will come after him looking for the money when the transfer to his account is reversed." }, { "docid": "114231", "title": "", "text": "\"You have to realize that you're trying to have your cake and eat it too. You want to do things \"\"unofficially\"\" by not reporting the accident (to insurance companies and/or police), but you want to do it \"\"officially\"\" in that you want to have legal recourse if they try to hit you up for more money. The only way to have it both ways is to trust the other person. From a financial perspective, ultimately you need to decide if the monetary cost of your raised insurance premiums, etc., outweighs the cost of whatever money the other party in the accident will try to squeeze out of you (factoring in the likelihood that they will do so). You also would need to factor in the likelihood that, rather than trying to scam you, they'll pursue legal action against you. In short, from a purely monetary perspective, if the legitimate cost of repairs is $700 and the cost to you of doing it by the book via insurance is $2000, you should be willing to be scammed for up to $1300, because you'll still come out ahead. Of course, there are psychological considerations, like whether someone unscrupulous enough to scam you will stop at $1300. But those numbers are the baseline for whatever outcome calculations you want to do. On the more qualitative side of things, it is possible they're trying to scam you, but also possible they're just trying to hustle you into doing everything quickly without thinking about it. They may not be trying to gouge you monetarily, they just want to pressure you so they get their money. I agree with other answerers here that the ideal way would be for them to send you an actual bill after repairs are complete. However, you could ask them to send you a written copy of the repair shop estimate, along with a written letter in which they state that they will consider payment of that amount to resolve the issue and won't pursue you further. The legal strength of that is dubious, but at least you have some documentation that you didn't just try to stiff them. If they won't give you some form of written documentation, I would read that as a red flag, bite the bullet, and contact your insurance company.\"" }, { "docid": "295210", "title": "", "text": "Is there more information that I could review and become more knowledgeable about this type of scam? In response to this, anytime anyone ask you to send money, for a bank password, bank account numbers, etc... It is most likely a scam. For more education this search turned up an number of excellent resources." }, { "docid": "751", "title": "", "text": "If some one ever offers High returns and low risk they are either extremely stupid or scamming you. If they did find a high return low risk investment a smart person would buy it then repackage it as a low return low risk investment and then sell it to you. People would still buy and they would make a ton. Either they are lying (scam) or a fool(about as bad)" }, { "docid": "399526", "title": "", "text": "You need to stop what you are doing right now and cut off contact with them! This is an extremely common scam. Here's how it works: They give you a check, maybe even a certified check. Usually in payment for something they are buying from you. The check happens to be for more than the sales price. They ask you to refund the difference, and pressure you to do so quickly. You will see why in a second. The check deposits fine and the money shows up in your account. Assuming the bank wouldn't do that if it wasn't a good check you let your guard down and pay them. In a couple of weeks, the bank detects that it is a fake check. They remove the money from your account, and may even report you for prosecution to local authorities for passing a fraudulent check. Meanwhile the person has the money you gave them and you can't find them because they gave you a fake name. To add insult to injury they may also have the property you sold them. You feel like a chump. Variants of this scam include them asking you to cash a check for them and you get to keep a part of the proceeds for your trouble. Sometimes it is presented as a work-at-home scheme. If you feel you absolutely must complete this deal, and you shouldn't. I would suggest you ask the person for a couple of forms of picture ID and tell them you need to make sure they aren't a scammer and you are going to do a background check on them with your local police to protect yourself. I predict the person will disappear and never contact you again about the money. Also, I suggest you talk to your bank immediately and inform them you think you might have been a victim of a scamming attempt so that you don't look like an accomplice when this is all said and done." }, { "docid": "263659", "title": "", "text": "There are several red flags here. can they get my bank account info in any way from me transferring money to them? Probably yes. Almost all bank transactions are auditable, and intentionally cause a money track. This track can be followed from both sides. If they can use your bank account as if they were you, that is a bit deeper than what you are asking, but yes they (and the polish cops) can find you through that transfer. I did look up the company and didn't find any scam or complaints concerning them. Not finding scams or complains is good, but what did you find? Did you find good reviews, the company website, its register, etc, etc? How far back does the website goes (try the wayback machine) Making a cardboard front company is very easy, and if they are into identity theft the company is under some guy in guam that never heard of poland or paypal. As @Andrew said above, it is probably a scam. I'd add that this scam leverages on the how easier is to get a PayPal refund compared to a regular bank transfer. It is almost impossible to get the money back on an international transaction. Usually reverting a bank transfer requires the agreement in writing of the receiver and of both banks. As for paypal, just a dispute from the other user: You are responsible for all Reversals, Chargebacks, fees, fines, penalties and other liability incurred by PayPal, a PayPal User, or a third party caused by your use of the Services and/or arising from your breach of this Agreement. You agree to reimburse PayPal, a User, or a third party for any and all such liability. (source) Also, you might be violating the TOS: Allow your use of the Service to present to PayPal a risk of non-compliance with PayPal’s anti-money laundering, counter terrorist financing and similar regulatory obligations (including, without limitation, where we cannot verify your identity or you fail to complete the steps to lift your sending, receiving or withdrawal limit in accordance with sections 3.3, 4.1 and 6.3 or where you expose PayPal to the risk of any regulatory fines by European, US or other authorities for processing your transactions); (emphasis mine, source) So even if the PayPal transfer is not disputed, how can you be sure you are not laundering money? Are you being paid well enough to assume that risk?" }, { "docid": "488334", "title": "", "text": "\"OK, there is no way in hell that a stranger should have your contact details. there is no way in hell that a stranger should be able to determine your name from that account number unless you are previously known to them. Have they explained to your satisfaction how any previous relationship was established? It was correct to direct them back to their own bank or their branch manager if they bank with the CBA. There are procedures in place for this, and you are in the clear if the bank handles it. Even there is a previous relationship, and you are in their address book, think long and hard about their \"\"bona fides\"\". It may not have been a scam they may have had fat fingers and be genuinely out of pocket now. It is SOP that if you refuse to refund the money the banks will become less helpful. (EDIT - you have consented to retrun the money). EDIT - IF you had not consented... Disclosure: I am a former CBA employee and a 20 year veteran of NetBank, and these are my own opinions.\"" }, { "docid": "28356", "title": "", "text": "\"It's a scam. Here's someone who paid \"\"Josie\"\" 2000 pounds and lost it all Here's a Google search result list of how this softcore porn actor, Josie Ann Miller, is being used as the face and name of scams\"" }, { "docid": "156581", "title": "", "text": "In the very unlikely event that it is not a scam, there would be a distinct probability that it is someone trying to launder money. You don't want to get caught up with drug dealers or ISIS terrorists, so forget it. There is also the possibility that your post is a scam, looking for people who would believe such nonsense. I wonder if people who reply are going to get phished." }, { "docid": "442625", "title": "", "text": "\"This is not only a scam but it is potentially fraud that may get you in trouble. This \"\"friend\"\" of yours will wire you some money in which you do not know where this money is really from. It's obvious from other answers that his story is fictitious. Thus it is likely that this money was stolen through another scam/hack in which now he wants to wash this money through your bank account. If it turns out that is was stolen, any money you withdrawal for your \"\"cut\"\", will have to be returned and your account will be frozen.\"" }, { "docid": "190266", "title": "", "text": "\"There is such a thing as Deposit Only. This will allow the individual's account to function only for collection of monetary deposits. NO ONE will be able to withdraw...only deposit. The account holder may still physically withdraw at their banking institution. Think of it as taking your account from a \"\"public\"\" profile to a \"\"private\"\" profile. Doing this is beneficial for ppl who may have been scammed into a program or product where there account is bieng fraudulently overdrafted, or simply to protect your funds from bieng drafted without your approval or despite your requests for ceasing the drafts. When making your account a deposit only account it's a good idea to open a NEW account at a Different banking institution, because some banks will still allow an account that is \"\"attached\"\" to the deposit only account to be drafted from it. WIth the new account you can utilize that one for paying day to day bills and just transfer funds from the deposit only account to the new account. A deposit only account is also a good way to build up a nice nest egg for yourself or even a young adult! source- Financial Adivsor 4years-\"" }, { "docid": "123511", "title": "", "text": "\"What can I do to help him out, but at the same time protect myself from any potential scams? Find out why he can't do this himself. Whether your relative is being sincere or not, if he owns both accounts then he should be able to transfer money between them by himself. If you can find a way to solve that issue without involving your bank account, so much the better. Don't settle for \"\"something about authorized payees and expired cards.\"\" Get details, write them down. If possible, get documents. Then go to a bank or financial adviser you can trust and run those details by them to see what they have to say. Even if there's no scam, if what he's trying to do is illegal (even if he doesn't realize it himself) then you want to know before you get involved. You say you're willing to deal with \"\"other issues\"\" separately, but keep in mind that, even if there's no external scam here, those \"\"other issues\"\" could include hefty fees, censures on your own account, or jail time. Ask yourself: Does it make sense that this relative has an account overseas? I don't have any overseas accounts, because I don't do business in other countries. Is your relative a dual-citizen? Does he travel a lot? What country is the overseas account in? How long has he had this account? What bank is it with? Where the money is going is just as important as how it gets there (ie: through your account.) Arguably more so. Keep in mind that many scammers tell their marks not to share what's going on with anyone else. (Because doing so increases the odds of someone telling them to snap out of it.) It's entirely possible he's being scammed himself and just not telling you the whole story because the 419er is telling him to keep it quiet. (Check out that link for more details on common scams that your relative may be unwittingly part of, btw.) Get as many details as possible about what he's doing and why. If he's communicating with anyone else regarding this transfer, find out who. If there are emails, ask his permission to read them and watch for anything suspicious (ie: people who can't spell their own name consistently, constant pressure to act quickly, etc.)\"" }, { "docid": "285077", "title": "", "text": "He helped build the world's biggest scam, where people effectively steal money from their future selves, and give part of it to Uber. Because Uber is the world's biggest payday loan scam, with interest at 25%. But instead of simply going to Uber to borrow money, you have to drive a fuckton of miles in your car, to borrow that money from yourself, and pay Uber for the privelege. So, if you are driving for Uber, you are either retarded, or desperate, and most likely, both." }, { "docid": "578024", "title": "", "text": "A US buyer wanted to import Gold from Ghana but due to insufficient working capital they were unable to obtain a Standby LC from their local bank. They contacted BWT for help &amp; we facilitated their Gold deal by providing Standby Letter of Credit (SBLC, MT760) in favor of their Ghana Seller." } ]

[ { "docid": "101358", "title": "", "text": "The scammer is definitely up to something fishy. He (it's certain that the she is a he) may deposit some money into your father's account to gain his trust. After which, he will propose to come meet your dad. That's where the scamming begins. He will come up with a story about flight, VISA issues, or a problem he has to solve before coming over. Another is that he can use your dad's empty account to receive monies he scammed off people. That way there's no direct link with him and his other victim." } ]

[ { "docid": "129965", "title": "", "text": "\"So Linda/Josie's initial plan was to have your dad pay money to (supposedly) help her get the gold chest. After he would have paid, there would have been another complication, and more yet (someone to bribe, a plane ticket to buy, transport to arrange, customs to handle, whatever, the list would last as long as there's money to take). Even if he does not have much money, the appeal of his share of the treasure could have been enough to tempt him to spend money he can't, or borrow, etc. Once \"\"she\"\" found out that he doesn't have any money and/or is apparently not willing to send any, \"\"she\"\" switched to a different scam: she would send him a large check, have him deposit it on his bank account, transfer most of the money (minus his generous share) to \"\"her\"\". Once the money is irreversibly transferred, the check will bounce. End result: 0 in the account before the transaction, minus a lot afterwards. It's quite simple: if an e-mail from a perfect stranger includes any of the following keywords, it's a scam:\"" }, { "docid": "28356", "title": "", "text": "\"It's a scam. Here's someone who paid \"\"Josie\"\" 2000 pounds and lost it all Here's a Google search result list of how this softcore porn actor, Josie Ann Miller, is being used as the face and name of scams\"" }, { "docid": "265278", "title": "", "text": "This is dangerous as it is a typical a scam. Trudy convinces Bob to help her avoid an ATM free or some other pretense. She writes Bob a check for $100, but is willing to take only $80 to return the favor. Bob agrees. Bob deposits the check, gives Trudy the $80 and then later finds out the check is bad. In most cases Bob will not be able to find or contact Trudy. However, in some rare cases if Trudy feels Bob is very gullible, she will do the same thing again and again as long as Bob allows. Sometimes the amounts will increase to surprisingly high levels." }, { "docid": "123511", "title": "", "text": "\"What can I do to help him out, but at the same time protect myself from any potential scams? Find out why he can't do this himself. Whether your relative is being sincere or not, if he owns both accounts then he should be able to transfer money between them by himself. If you can find a way to solve that issue without involving your bank account, so much the better. Don't settle for \"\"something about authorized payees and expired cards.\"\" Get details, write them down. If possible, get documents. Then go to a bank or financial adviser you can trust and run those details by them to see what they have to say. Even if there's no scam, if what he's trying to do is illegal (even if he doesn't realize it himself) then you want to know before you get involved. You say you're willing to deal with \"\"other issues\"\" separately, but keep in mind that, even if there's no external scam here, those \"\"other issues\"\" could include hefty fees, censures on your own account, or jail time. Ask yourself: Does it make sense that this relative has an account overseas? I don't have any overseas accounts, because I don't do business in other countries. Is your relative a dual-citizen? Does he travel a lot? What country is the overseas account in? How long has he had this account? What bank is it with? Where the money is going is just as important as how it gets there (ie: through your account.) Arguably more so. Keep in mind that many scammers tell their marks not to share what's going on with anyone else. (Because doing so increases the odds of someone telling them to snap out of it.) It's entirely possible he's being scammed himself and just not telling you the whole story because the 419er is telling him to keep it quiet. (Check out that link for more details on common scams that your relative may be unwittingly part of, btw.) Get as many details as possible about what he's doing and why. If he's communicating with anyone else regarding this transfer, find out who. If there are emails, ask his permission to read them and watch for anything suspicious (ie: people who can't spell their own name consistently, constant pressure to act quickly, etc.)\"" }, { "docid": "444134", "title": "", "text": "\"The first question I have to ask is, why would your \"\"friend\"\" even be considering something so ridiculous? There are so many variations of the banking scam running around, and yet people can't seem to see them for what they are -- scams. The old saying \"\"there's no such thing as a free lunch\"\" really comes into play here. Why would anyone send you/your friend $3,000.00 just because they \"\"like you\"\"? If you can't come up with a rational answer to that question then you know what you (or your friend) should do -- walk away from any further contact with this person and never look back! Why? Well, the simple answer is, let's assume they DO send you $3,000.00 by some means. If you think there aren't strings attached then all hope is lost. This is a confidence scam, where the scammer wins your trust by doing something nobody would ever do if they were trying to defraud you. As a result, you feel like you can trust them, and that's when the games really begin. Ask yourself this -- How long do you think it will be (even assuming the money is sent) before they'll talk you into revealing little clues about yourself that allow them to develop a good picture of you? Could they be setting you up for some kind of identity theft scheme, or some other financial scam? Whatever it is, you'd better believe the returns for them far outweigh the $3,000.00 they're allegedly going to send, so in a sense, it's an investment for them in whatever they have planned for you down the road. PLEASE don't take the warnings you get about this lightly!!! Scams like this work because they always find a sucker. The fact that you're asking the question in the first place means you/your \"\"friend\"\" are giving serious thought to what was proposed, and that's nothing short of disaster if you do it. Leave it be, take the lesson for what it's worth before it costs you one red cent, and move on. I hope this helps. Good luck!\"" }, { "docid": "310845", "title": "", "text": "Yes this is a scam. Stay as far away as possible. Don't talk or send any messages. The more you talk, she would convince you that this is not a scam. Armed Forces have a very good way of taking care of their people. They don't need to do something like this." }, { "docid": "98356", "title": "", "text": "There's a good explanation of this type of scam at the following link; It's known as a Spot-Delivery scam. https://www.carbuyingtips.com/top-10-scams/scam1.htm Also, I read this one a while back, and immediately this post reminded me of it: http://oppositelock.kinja.com/when-the-dealership-steals-back-the-car-they-just-sold-1636730607 Essentially, they claim you'll get one level of financing, let you take the car home, and then attempt to extort a higher financing APR out of you or request more money / higher payments. Check your purchasing agreement, it may have a note with something along the lines of 'Subject to financing approval' or something similar. If it does, you might be 'out of luck', as it were. Contact an attorney; in some cases (Such as the 'oppositelock.kinja.com' article above) consumers have been able to sue dealers for this as theft." }, { "docid": "57685", "title": "", "text": "\"First note that Standard Chartered Bank's domain is \"\"sc.com\"\", not \"\"scb.com\"\". The \"\"scb.com\"\" site appears to be an architecture company \"\"of sorts\"\". The \"\"yandex\"\" email address is for a Russian search company which offers free email services. The \"\"standardchartered.X10.bz\"\" email address is clearly a spoof use of the standard chartered name, and is registered in Belize - a small central American country and tax haven. The \"\"yilmazguneadana.org\"\" is not recognised by internet DNS, so appears to be an email only service. This is clearly a phishing scam. Do not respond to this email. Of the many thousands of people that have received this email, sadly some will be dumb enough to respond - the elderly are most vulnerable to this type of scam.\"" }, { "docid": "237607", "title": "", "text": "\"A friend since July online and big business talks and trust/money forwards. Usually a question \"\"is this a scam or legitimate?\"\" is hard to answer since obviously scams are modelled after legitimate stories (or they'd easily fail). If there were bookmakers for \"\"scam or legitimate\"\", this one would easily gather odds of 10000:1. The only plausible reason for this to be legitimate would be to defraud the scam-or-legitimate bookmakers. At any rate, Exxon is a large company and has to obey labor laws. They cannot set up operations in a manner where their workers may not have access to their salary for prolonged times without easy remedy. Drop communications immediately, don't open them, don't read them. They hook you with emotional investment. They will redouble efforts if it appears you are slipping out of their reach. Explanations will become more plausible, more pressing, more emotionally charged. You are a big promising fish and they won't let you swim off without a serious struggle to rehook you. Hand your communication so far to law enforcement. That may help with not having to figure this out on your own.\"" }, { "docid": "469964", "title": "", "text": "\"Its neither. Its a scam. there's no value underlying it, and it has proven to be the most speculative and untrustworthy investment there is. The scam works like a pyramid scam, so the more people come later on the more people who came in earlier on gain, so that is why you see so much hype around it encouraged and fueled by those early adopters who'll cash out at your expense. Imagine people who jumped on the bandwagon when each coin was worth a mere fraction of a dollar - they want you to \"\"invest\"\" at the current price of hundreds of dollars per unit so that they could cash out. You'd be better off with tulips, really. (And don't be discouraged by the downvotes on this answer, of course those scamers will try to shut me down. That will just prove the point.)\"" }, { "docid": "298365", "title": "", "text": "It is absolutely a scam. Anyone who tells you they can give you a large amount of money for free is trying to scam you. Additional warning signs include:" }, { "docid": "400947", "title": "", "text": "This sounds like a scam. Did they email you out of the blue to offer you this 'job', by any chance, and you'd never heard of them before? That's an incredibly large red flag in and of itself. While I don't know quite what the scam is likely to be, here's how I would suggest it might work: Other variants are possible - say using a cheque rather than PayPal, or having Person A be the scammer as well. But this being a legitimate transaction is very unlikely." }, { "docid": "343518", "title": "", "text": "\"This is clearly a scam, and you should stay away from it. Anyone reading this knew that from the title alone - and it seems that you know it too. Don't \"\"test\"\" whether something is a scam by putting your own money in it. That is exactly how these scammers make money, and how you lose it. How their scam works is irrelevant. The simple fact is that there is no way you can safely earn 20% return over the course of a year, let alone in 1 day*. You know this is true. Don't bother trying to figure out what makes it true in this case. There is no free lunch. Best case scenario, this is a hyper-risky investment strategy [on the level of putting your money down at a roulette wheel]. Worst case scenario, they simply steal your money. Either way, you won't come out ahead. Although I agree with others that this is likely a Ponzi scheme, that doesn't really matter. What matters is, there is no way they can guarantee those returns. Just go to a casino and throw your money away yourself, if you want that level of risk. *For reference, if you invested $100 for a year, earning 20% returns every day, you would have 6 million trillion trillion dollars by the end of the year. that's $6,637,026,647,624,450,000,000,000,000,000. that number doesn't even make sense. It's more money than exists on earth. So why would they need your $100?\"" }, { "docid": "362721", "title": "", "text": "Yes, it is a scam. Think about it: Why would a stranger offer to give you money? Why would she need you to pay her own employees? She wouldn't. It is a scam. You have more to lose than just the $25 that is in the account. Just as has happened to your dad before, you will be receiving money that is not real, but paying real money out somewhere else. One more thing: If your dad has fallen for these scams so many times that he can't get a bank account anymore, why are you still taking financial advice from him?" }, { "docid": "60562", "title": "", "text": "\"Here we go again! Why, oh why, would someone just open a bank account in your name with that much money for no good reason? Unless there's a very rich relative in your family tree, this can not come to a good ending. Besides, if this was money being left to you by someone as part of an inheritance, you'd hear from attorneys from the estate. Notwithstanding everything @NickR posted about the details of what makes it suspicious, ask yourself why a banker would contact you by email about an account with this much money in it. The bank would, at the very least, send you a registered/certified letter on official stationery. So what happens here is when you give them your banking information, whoever it is that's doing this will clean out your account, and that's for starters. They will ask for enough information to steal your identity too, and if you have good credit, that'll be gone in a heartbeat. The best scams (meaning the most successful ones) always appeal to peoples' greed, using large amounts of money that just miraculously belong to the victim, if only they'd give a little information to \"\"transfer\"\" the money. Worse yet, most of these scams will come up with some kind of \"\"fee\"\", \"\"tax\"\" or other expense that you have to pre-pay in order to make the transfer happen, so this just adds insult to injury when you find out (the hard way!) you've been scammed. DO NOT reply to the email you received or, if you already have, don't send any more responses. If they think they may have you on the hook then they won't stop trying, and it will become very messy very quickly. THIS IS NOT REAL MONEY! It isn't yours, it doesn't really exist, and all it will do is come to no good end if you go any further with it. Stay safe, my friend.\"" }, { "docid": "16774", "title": "", "text": "There's nothing particularly special about a two million dollar cheque. While they aren't commonplace, the bank certainly has experience with them. Many ATMs won't allow a deposit of that size but the bank cashiers will certainly accept them. They will typically get a supervisor to sign off on the deposit and may ask about the source of the money, for fraud prevention reasons. They may be held for longer than a smaller cheque if the bank manager chooses to do so. If there's nothing remotely suspicious (for example, it is a cheque from an insurance company for an expected payout), you should expect it will clear in about a week. On the other hand, if it is a cheque from a bank in another country and the bank manager has any reason to suspect it may not be legitimate, they may hold it for a month or more. Even then, you are not guaranteed the cheque was legitimate. This is used in a common scam." }, { "docid": "484875", "title": "", "text": "Westgate is a notoriously terrible employer to work for in Orlando, and their whole timeshare business model is a complete scam. Check out all of the complaints on Comsumer Affairs' website: http://www.consumeraffairs.com/travel/westgate.html?page=2 edit: More complaints http://www.ripoffreport.com/directory/westgate-resorts.aspx http://www.utahstories.com/2008/06/13/timeshare-scam-westgate-resorts-2/ http://www.complaintsboard.com/complaints/westgate-resorts-tennessee-c226610.html http://westgate-resorts.pissedconsumer.com/westgate-scam-20120926347849.html" }, { "docid": "190266", "title": "", "text": "\"There is such a thing as Deposit Only. This will allow the individual's account to function only for collection of monetary deposits. NO ONE will be able to withdraw...only deposit. The account holder may still physically withdraw at their banking institution. Think of it as taking your account from a \"\"public\"\" profile to a \"\"private\"\" profile. Doing this is beneficial for ppl who may have been scammed into a program or product where there account is bieng fraudulently overdrafted, or simply to protect your funds from bieng drafted without your approval or despite your requests for ceasing the drafts. When making your account a deposit only account it's a good idea to open a NEW account at a Different banking institution, because some banks will still allow an account that is \"\"attached\"\" to the deposit only account to be drafted from it. WIth the new account you can utilize that one for paying day to day bills and just transfer funds from the deposit only account to the new account. A deposit only account is also a good way to build up a nice nest egg for yourself or even a young adult! source- Financial Adivsor 4years-\"" }, { "docid": "115581", "title": "", "text": "I would go see a Lawyer no matter what. It's a form of a scam your parents are doing. Make sure it's YOUR name only on the title of the building if it is, then you have a MAJOR case against them. This is a form of Equity scam, in where you aren't really going to make hardly any money. Once you pay them that money towards the loan legally their stake needs to decrease according to what you said. ABSOLUTELY CONSULT A LAWYER!" } ]

[ { "docid": "597679", "title": "", "text": "\"Leverage here is referring to \"\"financial leverage\"\". This is the practice of \"\"levering\"\" [ie increasing, like the use of a lever to increase the amount of weight you can lift] the value of your investment by taking on debt. For example: if you have 100k in cash, you can buy a 100k rental property. Assume the property makes 10k a year, net of expenses [10%]. Now assume the bank will also give you a 100k mortgage, at 3%. You could take the mortgage, plus your cash, and buy a 200k rental property. This would earn you 20k from the rental property, less 3k a year in interest costs [the 3%]. Your total income would be 17k, and since you only used 100k of your own money, your rate of return would now be 17% instead of 10%. This is financial leveraging. Note that this increases your risk, because if your investment fails not only have you lost your own money, you now need to pay back the bank. \"\"Beta riders\"\" appears to be negative commentary on investors who use Beta to calculate the value of a particular stock, without regard to other quantitative factors. Therefore \"\"leveraged beta riders\"\" are those who take on additional risk [by taking on debt to invest], and invest in a manner that the author would perhaps considered \"\"blindly\"\" following Beta. However, I have never seen this term before, and it appears tainted by the author's views on Quants. A \"\"quant process driven discipline\"\" appears to be positive commentary on investors who use detailed quantitative analysis to develop rules which they rigorously follow to invest. I have never seen this exact phrasing before, and like the above, it appears tainted by the author's views on Quants. I am not providing any opinion on whether \"\"beta riding\"\" or \"\"quant processes\"\" are good or bad things; this is just my attempt to interpret the quote as you presented it. Note that I did not go to the article to get context, so perhaps something else in the article could skew the language to mean something other than what I have presented.\"" } ]

[ { "docid": "105542", "title": "", "text": "\"Note that these used to be a single \"\"common\"\" share that has \"\"split\"\" (actually a \"\"special dividend\"\" but effectively a split). If you owned one share of Google before the split, you had one share giving you X worth of equity in the company and 1 vote. After the split you have two shares giving you the same X worth of equity and 1 vote. In other words, zero change. Buy or sell either depending on how much you value the vote and how much you think others will pay (or not) for that vote in the future. As Google issues new shares, it'll likely issue more of the new non-voting shares meaning dilution of equity but not dilution of voting power. For most of us, our few votes count for nothing so evaluate this as you will. Google's founders believe they can do a better job running the company long-term when there are fewer pressures from outside holders who may have only short-term interests in mind. If you disagree, or if you are only interested in the short-term, you probably shouldn't be an owner of Google. As always, evaluate the facts for yourself, your situation, and your beliefs.\"" }, { "docid": "216404", "title": "", "text": "Generally stock trades will require an additional Capital Gains and Losses form included with a 1040, known as Schedule D (summary) and Schedule D-1 (itemized). That year I believe the maximum declarable Capital loss was $3000--the rest could carry over to future years. The purchase date/year only matters insofar as to rank the lot as short term or long term(a position held 365 days or longer), short term typically but depends on actual asset taxed then at 25%, long term 15%. The year a position was closed(eg. sold) tells you which year's filing it belongs in. The tiny $16.08 interest earned probably goes into Schedule B, typically a short form. The IRS actually has a hotline 800-829-1040 (Individuals) for quick questions such as advising which previous-year filing forms they'd expect from you. Be sure to explain the custodial situation and that it all recently came to your awareness etc. Disclaimer: I am no specialist. You'd need to verify everything I wrote; it was just from personal experience with the IRS and taxes." }, { "docid": "542889", "title": "", "text": "You would appear to be a swing trader, like myself. I have been trading futures and futures options for 29 years, and have both made and lost a lot of money in that time. My trades last hours, to days, to at most a few weeks. From my experience, the most important skills are: 1) Money management - keeping trade size small in relation to total capital. I typically risk 2-3% of my capital on a trade, so a loss is fairly immaterial. 2) Risk management - limit your loss on every trade, either by using stop orders, options, or a combination of these 2. 3) Emotional discipline - be prepared to exit a position, or reverse from long to short, or short to long, on a moment's notice. The market doesn't care where you entered, or whether you make or lose money. Don't let your hunches or the news influence your decisions, but follow the market. 4) Methodology discipline - test your analysis / trade entry method to ensure that it is objective, and has a reasonably good probability of success, then stick with it. Variation will inevitably lead to indecision or emotional reactions. 5) Flexibility - consider trading anything which can make you a profit, but ensure that there is a lot of liquidity. I trade 30 different futures markets, as well as various option writing strategies in these markets. Feel free to reach out if you want to discuss further. I have about 500 (yes, 500) trading e-books as well, on every trading subject you can think of." }, { "docid": "354257", "title": "", "text": "\"All other factors being equal, owning your primary residence is almost always a good investment over the long haul. Why? Because you have to live somewhere, and rentals, especially long-term leases that are important when you have kids in school, etc., are generally in the same ballpark as a mortgage in most markets. Giving $1,500 to a landlord gets me 30 days of living somewhere. Giving $1,500 to the bank gets me a place to live and equity in an asset which requires maintenance, but always has intrinsic value. Detroit is one extreme, Manhattan or Silicon Valley is another real estate extreme... everywhere else is somewhere in the middle. What isn't always a good investment is speculating in highly elastic \"\"investment property\"\" like vacation condos as an amateur. It's a cyclical market, but our attention spans are too short to realize that. As most of the other answers to this question indicate, people tend to be down in the dumps and see all of the problems with real estate when the market is not very good. Conversely people only see the upside and are oblivious to problems when the market is high.\"" }, { "docid": "420538", "title": "", "text": "\"If the service was being used as intended by their customers though, they would be able to swallow losses for the occasional short ride in order to make the over-all service pleasant. I'm guessing that it is pretty uncommon for riders to take a ride for a few blocks say. But it also depends on how long a ride a \"\"short ride\"\" is.\"" }, { "docid": "75884", "title": "", "text": "I remember like 20 years ago someone did an experiment where Peter Lynch, elementary school kids, and an ape, all picked stocks in a situation similar to this. The result was almost the same, with the elementary school kids coming out slightly better Picking correct stocks is a craps shoot, as the market is an emotional entity, and in the short run, even educated guesses don't give an edge. People like Peter Lynch eventually win of course because of discipline, long term goals, and knowledge of tools like derivatives" }, { "docid": "317803", "title": "", "text": "\"Maria, there are a few questions I think you must consider when considering this problem. Do fundamental or technical strategies provide meaningful information? Are the signals they produce actionable? In my experience, and many quantitative traders will probably say similar things, technical analysis is unlikely to provide anything meaningful. Of course you may find phenomena when looking back on data and a particular indicator, but this is often after the fact. One cannot action-ably trade these observations. On the other hand, it does seem that fundamentals can play a crucial role in the overall (typically long run) dynamics of stock movement. Here are two examples, Technical: suppose we follow stock X and buy every time the price crosses above the 30 day moving average. There is one obvious issue with this strategy - why does this signal have significance? If the method is designed arbitrarily then the answer is that it does not have significance. Moreover, much of the research supports that stocks move close to a geometric brownian motion with jumps. This supports the implication that the system is meaningless - if the probability of up or down is always close to 50/50 then why would an average based on the price be predictive? Fundamental: Suppose we buy stocks with the best P/E ratios (defined by some cutoff). This makes sense from a logical perspective and may have some long run merit. However, there is always a chance that an internal blowup or some macro event creates a large loss. A blended approach: for sake of balance perhaps we consider fundamentals as a good long-term indication of growth (what quants might call drift). We then restrict ourselves to equities in a particular index - say the S&P500. We compare the growth of these stocks vs. their P/E ratios and possibly do some regression. A natural strategy would be to sell those which have exceeded the expected return given the P/E ratio and buy those which have underperformed. Since all equities we are considering are in the same index, they are most likely somewhat correlated (especially when traded in baskets). If we sell 10 equities that are deemed \"\"too high\"\" and buy 10 which are \"\"too low\"\" we will be taking a neutral position and betting on convergence of the spread to the market average growth. We have this constructed a hedged position using a fundamental metric (and some helpful statistics). This method can be categorized as a type of index arbitrage and is done (roughly) in a similar fashion. If you dig through some data (yahoo finance is great) over the past 5 years on just the S&P500 I'm sure you'll find plenty of signals (and perhaps profitable if you calibrate with specific numbers). Sorry for the long and rambling style but I wanted to hit a few key points and show a clever methods of using fundamentals.\"" }, { "docid": "153281", "title": "", "text": "No, it's not all long-term capital gain. Depending on the facts of your situation, it will be either ordinary income or partially short-term capital gain. You should consider consulting a tax lawyer if you have this issue. This is sort of a weird little corner of the tax law. IRC §§1221-1223 don't go into it, nor do the attendant Regs. It also somewhat stumped the people on TaxAlmanac years ago (they mostly punted and just declared it self-employment income, avoiding the holding period issue). But I did manage to find it in BNA Portfolio 562, buried in there. That cited to a court case Comm'r v. Williams, 256 F.2d 152 (5th Cir. 1958) and to Revenue Ruling 75-524 (and to another Rev. Rul.). Rev Rul 75-524 cites Fred Draper, 32 T.C. 545 (1959) for the proposition that assets are acquired progressively as they are built. Note also that land and improvements on it are treated as separate assets for purposes of depreciation (Pub 946). So between Williams (which says something similar but about the shipbuilding industry) and 75-524, as well as some related rulings and cases, you may be looking at an analysis of how long your property has been built and how built it was. You may be able to apportion some of the building as long-term and some as short-term. Whether the apportionment should be as to cost expended before 1 year or value created before 1 year is explicitly left open in Williams. It may be simpler to account for costs, since you'll have expenditure records with dates. However, if this is properly ordinary income because this is really business inventory and not merely investment property, then you have fully ordinary income and holding period is irrelevant. Your quick turnaround sale tends to suggest this may have been done as a business, not as an investment. A proper advisor with access to these materials could help you formulate a tax strategy and return position. This may be complex and law-driven enough that you'd need a tax lawyer rather than a CPA or preparer. They can sort through the precedent and if you have the money may even provide a formal tax opinion. Experienced real estate lawyers may be able to help, if you screen them appropriately (i.e. those who help prepare real estate tax returns or otherwise have strong tax crossover knowledge)." }, { "docid": "561997", "title": "", "text": "I think your premise is slightly flawed. Every investment can add or reduce risk, depending on how it's used. If your ordering above is intended to represent the probability you will lose your principal, then it's roughly right, with caveats. If you buy a long-term government bond and interest rates increase while you're holding it, its value will decrease on the secondary markets. If you need/want to sell it before maturity, you may not recover your principal, and if you hold it, you will probably be subject to erosion of value due to inflation (inflation and interest rates are correlated). Over the short-term, the stock market can be very volatile, and you can suffer large paper losses. But over the long-term (decades), the stock market has beaten inflation. But this is true in aggregate, so, if you want to decrease equity risk, you need to invest in a very diversified portfolio (index mutual funds) and hold the portfolio for a long time. With a strategy like this, the stock market is not that risky over time. Derivatives, if used for their original purpose, can actually reduce volatility (and therefore risk) by reducing both the upside and downside of your other investments. For example, if you sell covered calls on your equity investments, you get an income stream as long as the underlying equities have a value that stays below the strike price. The cost to you is that you are forced to sell the equity at the strike price if its value increases above that. The person on the other side of that transaction loses the price of the call if the equity price doesn't go up, but gets a benefit if it does. In the commodity markets, Southwest Airlines used derivatives (options to buy at a fixed price in the future) on fuel to hedge against increases in fuel prices for years. This way, they added predictability to their cost structure and were able to beat the competition when fuel prices rose. Even had fuel prices dropped to zero, their exposure was limited to the pre-negotiated price of the fuel, which they'd already planned for. On the other hand, if you start doing things like selling uncovered calls, you expose yourself to potentially infinite losses, since there are no caps on how high the price of a stock can go. So it's not possible to say that derivatives as a class of investment are risky per se, because they can be used to reduce risk. I would take hedge funds, as a class, out of your list. You can't generally invest in those unless you have quite a lot of money, and they use strategies that vary widely, many of which are quite risky." }, { "docid": "142592", "title": "", "text": "\"I think this gets at why some of us are becoming concerned about the volume (or more importantly the portion) of HFT in capital markets these days. You have algos trading based on \"\"technical trends\"\" which are increasingly just the behavior of other algos. Rinse and repeat. At a certain point it just becomes a feedback loop. Now, I agree that there's no reason to be scared of HFT simply because its new or fast, which is what I think threatens a lot of people. But the problem is that the economic and social utility of markets arises from their being information aggregation engines. If it gets to the point where most of the price action is driven by algos which are trading solely based on a few minutes of technical data, no new information is being contributed to the price discovery process. Now, it may be that a certain amount of \"\"meta-information\"\" can be discovered from pattern analysis of short term technical history. But it seems to me this information is more limited in both quality and quantity compared to the information inputs of thoughtful humans acting on a reasoned analysis of economic and other world events.\"" }, { "docid": "270223", "title": "", "text": "I know I can not trade futures realistically (I never claimed I could). All I wanted was some exposure to commodities. If I could just trade many of these things in an ETF like GLD or XLV, I would have done that. On the topic of margin, I appreciate your explaining that to me. I admit readily that I could never invest in futures straight, but I would like to get into commodities and other types of investments. I have tried to look for value in the market, but I have not found many things I would put my money in. I have gone as far as to look through OTC ADRs to find some foreign value, and I found nothing. I just want to be able to trade in any market, and I would consider shorting, but I don't like to be too risky. I want to go long on positions, and it seemed like commodities may be a good speculation to LOOK INTO. Taking rough rice as an example, there are millions (if not billions) of people who eat rice to survive. People will always need oil to fuel their cars. People will always need electricity. So I guess what I am trying to do is look into things that allow me to profit, regardless of where equities are going. The only thing I want to do is trade the options of the futures, not the actual futures themselves. I hope I did not confuse you. If I can earn even $20 from buying an option at a lower price and selling higher, it would allow me to have a greater breadth of tools to use when the market may be overvalued." }, { "docid": "313158", "title": "", "text": "\"There will be no police involved. The police do not care. Only the feds care, and they only care about large amounts (over $100,000). What will happen is that the teller will deposit the money like nothing is unusual, but the amount will trigger a \"\"Suspicious Transaction Report\"\" to be filed by the bank. This information goes to the US Treasury and is then circulated by the Treasury to basically every agency in the government: the Department of Defense, the FBI, the NSA, the CIA, the DEA, the IRS, etc. What happens next depends on your relationship with your bank and the personality of the bank. In my case I have made large cash transactions at two different banks, one that I had a long relationship with, and another that I had a long-standing but dormant account. The long-term one was a high end savings bank in a city. The dormant one was one of those bozo retail banks (think \"\"Citizens\"\" or \"\"Bank of America\"\") in a suburb. The long-term bank ignored my first deposit, but after I made some more including one over $50,000 in cash they summoned me via a letter. I went in, talked to the branch manager and explained why I was making the deposits. He said \"\"That sounds plausible.\"\" and that was the end of the interview. It is unlikely that they transferred the information. They probably just wrote it down. They did this because they have \"\"know your customer\"\" regulations and they wanted to be able to prove that they did \"\"due diligence\"\" in case anybody asked about it later. The suburban bank never asked any questions, but they did file the STRs. In general, there is no way to know if the bank will interview you or not. It depends on a lot of different factors. The basic factors are: how much money is it, are you doing a lot of business normally, and how well does the bank know you. If you refuse to answer the bank's questions to their satisfaction, it is a 100% chance that they will close your account. They can also file higher level reports that flag your activity as \"\"highly suspicious\"\" as opposed to just the normal \"\"suspicious\"\". As long as it is a bank employee, you should have no serious concerns unless the guy seems strange and asks really pointed questions. If you have any question whether the \"\"employee\"\" is legitimate, just verify that he/she is a bank employee. Obviously if the feds visit you, you should say nothing. The chance of this happening is 1 in a million.\"" }, { "docid": "392885", "title": "", "text": "\"20-year Treasury Bonds are not equivalent to cash, not even close. Even though the bonds are backed by the full faith and credit of the U.S. Government, they are long-term debt and therefore their principal value will fluctuate considerably as market interest rates change. When interest rates rise, the market value of 20-year bonds will drop, and drop more than shorter-term bonds would. Your principal is not protected in the short term. Principal is only guaranteed returned at the 20-year maturity of those bonds. But, oops, there is no maturity on the 20-year bond ETFs because every year the ETF rolls the 19-year positions into new 20-year positions! ;-) For an \"\"equivalent to cash\"\" piece of a portfolio, I'd want my principal to be intact over the short term, and continually reinvested at the higher short-term rates as rates are rising. Reinvesting at short-term rates can be an inflation-hedge. But, money locked in for 20-years is a sitting duck for inflation. Still, inflation aside, why do we want our \"\"equivalent to cash\"\" position to be relatively liquid and principal-protected? When it comes time to rebalance your portfolio after disastrous equity and/or bond returns, you've got in your cash component some excess weighting since it was unaffected by the disastrous performance. That excess cash is ready to be deployed to purchase equities and/or bonds at the lower current prices. Rebalancing from cash can add a bonus to your returns and smooth volatility. If you have no cash component and only equities and bonds, you have no money to deploy when both equities and bonds are depressed. You didn't keep any powder dry. And, BTW, I would personally keep a bit more than 3% of my powder dry. Consider a short-term cash deposit or good money-market fund for your \"\"equivalent to cash\"\" position.\"" }, { "docid": "322806", "title": "", "text": "\"Diversification is the only real free lunch in finance (reduction in risk without any reduction in expected returns), so clearly every good answer to your question will be \"\"yes.\"\" Diversification is good.\"\" Let's talk about many details your question solicits. Many funds are already pretty diversified. If you buy a mutual fund, you are generally already getting a large portion of the gains from diversification. There is a very large difference between the unnecessary risk in your portfolio if you only hold a couple of stocks and if you hold a mutual fund. Should you be diversified across mutual funds as well? It depends on what your funds are. Many funds, such as target-date funds, are intended to be your sole investment. If you have funds covering every major asset class, then there may not be any additional benefit to buying other funds. You probably could not have picked your \"\"favorite fund\"\" early on. As humans, we have cognitive biases that make us think we knew things early on that we did not. I'm sure at some point at the very beginning you had a positive feeling toward that fund. Today you regret not acting on it and putting all your money there. But the number of such feelings is very large and if you acted on all those, you would do a lot of crazy and harmful things. You didn't know early on which fund would do well. You could just as well have had a good feeling about a fund that subsequently did much worse than your diversified portfolio did. The advice you have had about your portfolio probably isn't based on sound finance theory. You say you have always kept your investments in line with your age. This implies that you believe the guidelines given you by your broker or financial advisor are based in finance theory. Generally speaking, they are not. They are rules of thumb that seemed good to someone but are not rigorously proven either in theory or empirics. For example the notion that you should slowly shift your investments from speculative to conservative as you age is not based on sound finance theory. It just seems good to the people who give advice on such things. Nothing particularly wrong with it, I guess, but it's not remotely on par with the general concept of being well-diversified. The latter is extremely well established and verified, both in theory and in practice. Don't confuse the concept of diversification with the specific advice you have received from your advisor. A fund averaging very good returns is not an anomaly--at least going forward it will not be. There are many thousand funds and a large distribution in their historical performance. Just by random chance, some funds will have a truly outstanding track record. Perhaps the manager really was skilled. However, very careful empirical testing has shown the following: (1) You, me, and people whose profession it is to select outperforming mutual funds are unable to reliably detect which ones will outperform, except in hindsight (2) A fund that has outperformed, even over a long horizon, is not more likely to outperform in the future. No one is stopping you from putting all your money in that fund. Depending on its investment objective, you may even have decent diversification if you do so. However, please be aware that if you move your money based on historical outperformance, you will be acting on the same cognitive bias that makes gamblers believe they are on a \"\"hot streak\"\" and \"\"can't lose.\"\" They can, and so can you. ======== Edit to answer a more specific line of questions =========== One of your questions is whether it makes sense to buy a number of mutual funds as part of your diversification strategy. This is a slightly more subtle question and I will indicate where there is uncertainty in my answer. Diversifying across asset classes. Most of the gains from diversification are available in a single fund. There is a lot of idiosyncratic risk in one or two stocks and much less in a collection of hundreds of stocks, which is what any mutual fund will hold. Still,you will probably want at least a couple of funds in your portfolio. I will list them from most important to least and I will assume the bulk of your portfolio is in a total US equity fund (or S&P500-style fund) so that you are almost completely diversified already. Risky Bonds. These are corporate, municipal, sovereign debt, and long-term treasury debt funds. There is almost certainly a good deal to be gained by having a portion of your portfolio in bonds, and normally a total market fund will not include bond exposure. Bonds fund returns are closely related to interest rate and inflation changes. They are also exposed to some market risk but it's more efficient to get that from equity. The bond market is very large, so if you did market weights you would have more in bonds than in equity. Normally people do not do this, though. Instead you can get the exposure to interest rates by holding a lesser amount in longer-term bonds, rather than more in shorter-term bonds. I don't believe in shifting your weights toward nor away from this type of bond (as opposed to equity) as you age so if you are getting that advice, know that it is not well-founded in theory. Whatever your relative weight in risky bonds when you are young is should also be your weight when you are older. International. There are probably some gains from having some exposure to international markets, although these have decreased over time as economies have become more integrated. If we followed market weights, you would actually put half your equity weight in an international fund. Because international funds are taxed differently (gains are always taxed at the short-term capital gains rate) and because they have higher management fees, most people make only a small investment to international funds, if any at all. Emerging markets International funds often ignore emerging markets in order to maintain liquidity and low fees. You can get some exposure to these markets through emerging markets funds. However, the value of public equity in emerging markets is small when compared with that of developed markets, so according to finance theory, your investment in them should be small as well. That's a theoretical, not an empirical result. Emerging market funds charge high fees as well, so this one is kind of up to your taste. I can't say whether it will work out in the future. Real estate. You may want to get exposure to real estate by buying a real-estate fund (REIT). Though, if you own a house you are already exposed to the real estate market, perhaps more than you want to be. REITs often invest in commercial real estate, which is a little different from the residential market. Small Cap. Although total market funds invest in all capitalization levels, the market is so skewed toward large firms that many total market funds don't have any significant small cap exposure. It's common for individuals to hold a small cap fund to compensate for this, but it's not actually required by investment theory. In principle, the most diversified portfolio should be market-cap weighted, so small cap should have negligible weight in your portfolio. Many people hold small cap because historically it has outperformed large cap firms of equal risk, but this trend is uncertain. Many researchers feel that the small cap \"\"premium\"\" may have been a short-term artifact in the data. Given these facts and the fact that small-cap funds charge higher fees, it may make sense to pass on this asset class. Depends on your opinion and beliefs. Value (or Growth) Funds. Half the market can be classed as \"\"value\"\", while the other half is \"\"growth.\"\" Your total market fund should have equal representation in both so there is no diversification reason to buy a special value or growth fund. Historically, value funds have outperformed over long horizons and many researchers think this will continue, but it's not exactly mandated by the theory. If you choose to skew your portfolio by buying one of these, it should be a value fund. Sector funds. There is, in general, no diversification reason to buy funds that invest in a particular sector. If you are trying to hedge your income (like trying to avoid investing in the tech sector because you work in that sector) or your costs (buying energy because you buy use a disproportionate amount of energy) I could imagine you buying one of these funds. Risk-free bonds. Funds specializing in short-term treasuries or short-term high-quality bonds of other types are basically a substitute for a savings account, CD, money market fund, or other cash equivalent. Use as appropriate but there is little diversification here per se. In short, there is some value in diversifying across asset classes, and it is open to opinion how much you should do. Less well-justified is diversifying across managers within the same asset class. There's very little if any advantage to doing that.\"" }, { "docid": "410061", "title": "", "text": "You do not hold leveraged ETF for longer than a few days. You have UGAZ and DGAZ, both 3x leveraged, one longs one shorts. What happens if you buy both? You don't get 0% return. In fact, you get -10% return if you hold both for 3 months. No matter what happens, they both go down in long term. Call it Leverage Decay, Beta Slippage, Contango, Rollover, etc. If you want to gamble that NG goes up within 3 days, go ahead. Just be prepared for the worst cases like losing 15% in 3 days. If you want to speculate the NG will recover in a year, buy Natural Gas industry ETF http://www.ftportfolios.com/retail/etf/etfsummary.aspx?Ticker=FCG" }, { "docid": "578078", "title": "", "text": "There's been some work on sentiment analysis and it's effect on stock prices. Would be interesting to see a model that uses sentiment as well as more normal fundamentals to try model returns. Perhaps short term sentiment could explain some of the messiness day by day while long term sentiment has an effect on long term prices..." }, { "docid": "54827", "title": "", "text": "You are correct that 20% has an impact on your interest rate, although it is not always hugely significant. You would have to do your own shopping around to find that information out. However 20% has an impact that I consider to be far more important than your monthly payment, and that is in your equity. If the DC market tanks, which I know it has not really done like much of the country but none of us have crystal balls to know if it will or not, then you will be more easily underwater the less you put down. Conversely putting 20% or more down makes you an easy sell to lenders [i]and[/i] means that you don't have to worry nearly so much about having to do a short sale in the future. I would never buy a house with less than 20% down personally and have lived well below my means to get there, but I am not you. With regards to mortgages, the cheapskate way that I found information that I needed was to get books from the library that explained the mortgage process to me. When it came time to select an actual broker I used my realtor's recommendation (because I trusted my realtor to actually have my interests at heart because he was an old family friend - you can't usually do that so I don't recommend it) and that of others I knew who had bought recently. I compared four lenders and competed them against each other to get the best terms. They will give you estimate sheets that help you weigh not only rates but costs of different fees such as the origination fee and discount points. Make sure to know what fees the lender controls and what fees (s)he doesn't so that you know which lines to actually compare. Beyond a lender make sure that before closing you have found a title company that you think is a good choice (your realtor or lender will try to pick one for you because that's the way the business is played but it is a racket - pick one who will give you the best deal on title), a settlment company (may be title company, lender, or other) that won't charge you an excessive amount, a survey company that you like if required in DC for your title insurance, and homeowner's insurance coverage that you think is a good deal. The time between contract and closing is short and nobody tells you to research all the closing costs that on a $500,000 place run to in excess of $10,000, but you should. Also know that your closing costs will be about 2% of the purchase price and plan accordingly. In general take some time to educate yourself on homebuying as well as neighborhoods and price ranges. Don't rush into this process or you will lose a lot of money fast." }, { "docid": "451737", "title": "", "text": "\"Does your job give you access to \"\"confidential information\"\", such that you can only buy or sell shares in the company during certain windows? Employees with access to company financial data, resource planning databases, or customer databases are often only allowed to trade in company securities (or derivatives thereof) during certain \"\"windows\"\" a few days after the company releases its quarterly earnings reports. Even those windows can be cancelled if a major event is about to be announced. These windows are designed to prevent the appearance of insider trading, which is a serious crime in the United States. Is there a minimum time that you would need to hold the stock, before you are allowed to sell it? Do you have confidence that the stock would retain most of its value, long enough that your profits are long-term capital gains instead of short-term capital gains? What happens to your stock if you lose your job, retire, or go to another company? Does your company's stock price seem to be inflated by any of these factors: If any of these nine warning flags are the case, I would think carefully before investing. If I had a basic emergency fund set aside and none of the nine warning flags are present, or if I had a solid emergency fund and the company seemed likely to continue to justify its stock price for several years, I would seriously consider taking full advantage of the stock purchase plan. I would not invest more money than I could afford to lose. At first, I would cash out my profits quickly (either as quickly as allowed, or as quickly as lets me minimize my capital gains taxes). I would reinvest in more shares, until I could afford to buy as many shares as the company would allow me to buy at the discount. In the long-run, I would avoid having more than one-third of my net worth in any single investment. (E.g., company stock, home equity, bonds in general, et cetera.)\"" }, { "docid": "447521", "title": "", "text": "\"I'm searching for a master's thesis topic in equity investment or portfolio management and I'd be grateful if someone could tell me what are the hot \"\"trends\"\" going on right now on the market? Any new phenomenons (like the rise of blockchain, etf... but more relate to the equity side) or debates ( the use of the traditional techniques such as Beta to calculate WACC for example ...) ?\"" } ]

[ { "docid": "463328", "title": "", "text": "\"Translation : Funds managers that use traditionnal methods to select stocks will have less success than those who use artificial intelligence and computer programs to select stocks. Meaning : The use of computer programs and artificial intelligence is THE way to go for hedge fund managers in the future because they give better results. \"\"No man is better than a machine, but no machine is better than a man with a machine.\"\" Alternative article : Hedge-fund firms, Wall Street Journal. A little humour : \"\"Whatever is well conceived is clearly said, And the words to say it flow with ease.\"\" wrote Nicolas Boileau in 1674.\"" } ]

[ { "docid": "54827", "title": "", "text": "You are correct that 20% has an impact on your interest rate, although it is not always hugely significant. You would have to do your own shopping around to find that information out. However 20% has an impact that I consider to be far more important than your monthly payment, and that is in your equity. If the DC market tanks, which I know it has not really done like much of the country but none of us have crystal balls to know if it will or not, then you will be more easily underwater the less you put down. Conversely putting 20% or more down makes you an easy sell to lenders [i]and[/i] means that you don't have to worry nearly so much about having to do a short sale in the future. I would never buy a house with less than 20% down personally and have lived well below my means to get there, but I am not you. With regards to mortgages, the cheapskate way that I found information that I needed was to get books from the library that explained the mortgage process to me. When it came time to select an actual broker I used my realtor's recommendation (because I trusted my realtor to actually have my interests at heart because he was an old family friend - you can't usually do that so I don't recommend it) and that of others I knew who had bought recently. I compared four lenders and competed them against each other to get the best terms. They will give you estimate sheets that help you weigh not only rates but costs of different fees such as the origination fee and discount points. Make sure to know what fees the lender controls and what fees (s)he doesn't so that you know which lines to actually compare. Beyond a lender make sure that before closing you have found a title company that you think is a good choice (your realtor or lender will try to pick one for you because that's the way the business is played but it is a racket - pick one who will give you the best deal on title), a settlment company (may be title company, lender, or other) that won't charge you an excessive amount, a survey company that you like if required in DC for your title insurance, and homeowner's insurance coverage that you think is a good deal. The time between contract and closing is short and nobody tells you to research all the closing costs that on a $500,000 place run to in excess of $10,000, but you should. Also know that your closing costs will be about 2% of the purchase price and plan accordingly. In general take some time to educate yourself on homebuying as well as neighborhoods and price ranges. Don't rush into this process or you will lose a lot of money fast." }, { "docid": "98726", "title": "", "text": "\"The way I am trading this is: I am long the USD / EUR in cash. I also hold USD / EUR futures, which are traded on the Globex exchange. I am long US equities which have a low exposure to Europe and China (as I expect China to growth significantly slower if the European weakens). I would not short US equities because Europe-based investors (like me) are buying comparatively \"\"safe\"\" US equities to reduce their EUR exposure.\"" }, { "docid": "469835", "title": "", "text": "\"In theory, investing is not gambling because the expected outcome is not random; people are expecting positive returns, on average, with some relationship to risk undertaken and economic reality. (More risk = more returns.) Historically this is true on average, that assets have positive returns, and riskier assets have higher returns. Also it's true that stock market gains roughly track economic growth. Valuation (current price level relative to \"\"fundamentals\"\") matters - reversion to the mean does exist over a long enough time. Given a 7-10 year horizon, a lot of the variance in ending price level can be explained by valuation at the start of the period. On average over time, business profits have to vary around a curve that's related to the overall economy, and equity prices should reflect business profits. The shorter the horizon, the more random noise. Even 1 year is pretty short in this respect. Bubbles do exist, as do irrational panics, and milder forms of each. Investing is not like a coin flip because the current total number of heads and tails (current valuation) does affect the probability of future outcomes. That said, it's pretty hard to predict the timing, or the specific stocks that will do well, etc. Rebalancing gives you an objective, automated, unemotional way to take advantage of all the noise around the long-term trend. Rather than trying to use judgment to identify when to get in and out, with rebalancing (and dollar cost averaging) you guarantee getting in a bit more when things are lower, and getting out a bit more when things are higher. You can make money from prices bouncing around even if they end up going nowhere and even if you can't predict the bouncing. Here are a couple old posts from my blog that talk about this a little more:\"" }, { "docid": "216404", "title": "", "text": "Generally stock trades will require an additional Capital Gains and Losses form included with a 1040, known as Schedule D (summary) and Schedule D-1 (itemized). That year I believe the maximum declarable Capital loss was $3000--the rest could carry over to future years. The purchase date/year only matters insofar as to rank the lot as short term or long term(a position held 365 days or longer), short term typically but depends on actual asset taxed then at 25%, long term 15%. The year a position was closed(eg. sold) tells you which year's filing it belongs in. The tiny $16.08 interest earned probably goes into Schedule B, typically a short form. The IRS actually has a hotline 800-829-1040 (Individuals) for quick questions such as advising which previous-year filing forms they'd expect from you. Be sure to explain the custodial situation and that it all recently came to your awareness etc. Disclaimer: I am no specialist. You'd need to verify everything I wrote; it was just from personal experience with the IRS and taxes." }, { "docid": "297360", "title": "", "text": "So in a ten year history the company makes one misstep (one which makes perfect sense; it was just an error in timing) and we want to throw out all the leadership and take control? Where is this kind of uproar at investment banks that leveraged themselves out on a limb in stormy waters? Or at Microsoft that routinely pours money down product holes without marketing and advertising support? Or any of a dozen other companies that make stupid decisions driven by the ego or short-sightedness of the CEO? No, let's beat on one of the best executives on Wall Street because we're whiny about short-term losses in pursuit of long-term gains. We need more honeypots for stupid investors like Facebook - maybe if enough idiots get burned they'll just get out." }, { "docid": "499348", "title": "", "text": "For your base question, yes. (Barring some major collapse-of-civilization event, but in that case you're screwed anyway :-)) On the individual points: 1) Depends on whether you choose to invest in index-type funds (where profit is mainly expected from price appreciation), or more value-based investing. But either or a mix of the two (my own choice) should show returns above inflation, over the long term. 2) Yes, in the US anyway. You can invest a few hundred dollars at a time, and (with good companies like Vanguard & T. Rowe Price) there are no transaction fees, either for investing or for redeeming. 3) Long-term, it's crash-proof IF you have the self-discipline not to panic-sell at market lows. In my case, my total fund valuation dropped around 40% in '08. I didn't sell anything (and in fact tried to cut spending and invest more), and now I have nearly double what I had before the crash. Bottom line is that it has worked for me. After ~30 years of investing this way without being fanatic about it, I have enough that I could live moderately without working for the rest of my life. Not - and this is where I part company with MMM and most of the FIRE community - that I'd ever want to actually retire. But my modest financial independence gives me the freedom to work at things I like, rather than because I'm worrying about paying bills." }, { "docid": "8012", "title": "", "text": "It is worth noting first that interest and short-term dividends/capital gains are all taxed at the same rate. So all the investments below I mention (even savings accounts) will be taxed at the same rate. Also, even short-term capital losses can often be harvested to reduce your tax rate in many countries. While it is worth paying attention to the taxes when investing in the short term the more important factor is how much risk that you can take or want to take with the money. Most equity portfolios like the S&P index give a much higher risk that there will be much less in the account when you need to buy. You generally have a higher expected return with equity but as you mention that return is very random over such a short period. Over such a short variable period many people will invest in short term bond-index funds or just keep the fund in a high-yielding savings account. With the savings account your money is guaranteed. Short term bond funds will have generally higher yields but a small chance you may lose money in the short term. Some people can trade short-term bond indices for free with their broker but if you can't be sure to include the trading costs when thinking about which investment to use as with how low yields are currently the fees may eat up any advantage you gain." }, { "docid": "77658", "title": "", "text": "\"I think the real problem here is dealing with the variable income. The envelope solution suggests the problem is that your brother doesn't have the discipline to avoid spending all his money immediately, but maybe that's not it. Maybe he could regulate his expenses just fine, but with such a variable income, he can't settle into a \"\"normal\"\" spending pattern. Without any savings, any budget would have to be based on the worst possible income for a month. This isn't a great: it means a poor quality of life. And what do you do with the extra money in the better-than-worst months? While it's easy to say \"\"plan for the worst, then when it's better, save that money\"\", that's just not going to happen. No one will want to live at their worst-case standard of living all the time. Someone would have to be a real miser to have the discipline to not use that extra money for something. You can say to save it for emergencies or unexpected events, but there's always a way to rationalize spending it. \"\"I'm a musician, so this new guitar is a necessary business expense!\"\" Or maybe the car is broken. Surely this is a necessary expense! But, do you buy a $1000 car or a $20000 car? There's always a way to rationalize what's necessary, but it doesn't change financial reality. With a highly variable income, he will need some cash saved up to fill in the bad months, which is replenished in the good months. For success, you need a reasonable plan for making that happen: one that includes provisions for spending it other than \"\"please try not to spend it\"\". I would suggest tracking income accurately for several months. Then you will have a real number (not a guess) of what an average month is. Then, you can budget on that. You will also have real numbers that allow you to calculate how long the bad stretches are, and thus determine how much cash reserve is necessary to make the odds of going broke in a bad period unlikely. Having that, you can make a budget based on average income, which should have some allowance for enjoying life. Of course initially the cash reserve doesn't exist, but knowing exactly what will happen when it does provides a good motivation for building the reserve rather than spending it today. Knowing that the budget includes rules for spending the reserves reduces the incentive to cheat. Of course, the eventual budget should also include provisions for long term savings for retirement, medical expenses, car maintenance, etc. You can do the envelope thing if that's helpful. The point here is to solve the problem of the variable income, so you can have an average income that doesn't result in a budget that delivers a soul crushing decrease in quality of living.\"" }, { "docid": "142592", "title": "", "text": "\"I think this gets at why some of us are becoming concerned about the volume (or more importantly the portion) of HFT in capital markets these days. You have algos trading based on \"\"technical trends\"\" which are increasingly just the behavior of other algos. Rinse and repeat. At a certain point it just becomes a feedback loop. Now, I agree that there's no reason to be scared of HFT simply because its new or fast, which is what I think threatens a lot of people. But the problem is that the economic and social utility of markets arises from their being information aggregation engines. If it gets to the point where most of the price action is driven by algos which are trading solely based on a few minutes of technical data, no new information is being contributed to the price discovery process. Now, it may be that a certain amount of \"\"meta-information\"\" can be discovered from pattern analysis of short term technical history. But it seems to me this information is more limited in both quality and quantity compared to the information inputs of thoughtful humans acting on a reasoned analysis of economic and other world events.\"" }, { "docid": "274835", "title": "", "text": "In terms of pricing the asset, this functions in exactly the same way as a regular sell, so bids will have to be hit to fill the trade. When shorting an equity, currency is not borrowed; the equity is, so the value of per share liability is equal to it's last traded price or the ask if the equity is illiquid. Thus when opening a short position, the asks offer nothing to the process except competition for your order getting filled. Part of managing the trade is the interest rate risk. If the asks are as illiquid as detailed in the question, it may be difficult even to locate the shares for borrowing. As a general rule, only illiquid equities or those in free fall may be temporarily unable for shorting. Interactive Brokers posts their securities financing availabilities and could be used as a proxy guide for your broker." }, { "docid": "354257", "title": "", "text": "\"All other factors being equal, owning your primary residence is almost always a good investment over the long haul. Why? Because you have to live somewhere, and rentals, especially long-term leases that are important when you have kids in school, etc., are generally in the same ballpark as a mortgage in most markets. Giving $1,500 to a landlord gets me 30 days of living somewhere. Giving $1,500 to the bank gets me a place to live and equity in an asset which requires maintenance, but always has intrinsic value. Detroit is one extreme, Manhattan or Silicon Valley is another real estate extreme... everywhere else is somewhere in the middle. What isn't always a good investment is speculating in highly elastic \"\"investment property\"\" like vacation condos as an amateur. It's a cyclical market, but our attention spans are too short to realize that. As most of the other answers to this question indicate, people tend to be down in the dumps and see all of the problems with real estate when the market is not very good. Conversely people only see the upside and are oblivious to problems when the market is high.\"" }, { "docid": "392885", "title": "", "text": "\"20-year Treasury Bonds are not equivalent to cash, not even close. Even though the bonds are backed by the full faith and credit of the U.S. Government, they are long-term debt and therefore their principal value will fluctuate considerably as market interest rates change. When interest rates rise, the market value of 20-year bonds will drop, and drop more than shorter-term bonds would. Your principal is not protected in the short term. Principal is only guaranteed returned at the 20-year maturity of those bonds. But, oops, there is no maturity on the 20-year bond ETFs because every year the ETF rolls the 19-year positions into new 20-year positions! ;-) For an \"\"equivalent to cash\"\" piece of a portfolio, I'd want my principal to be intact over the short term, and continually reinvested at the higher short-term rates as rates are rising. Reinvesting at short-term rates can be an inflation-hedge. But, money locked in for 20-years is a sitting duck for inflation. Still, inflation aside, why do we want our \"\"equivalent to cash\"\" position to be relatively liquid and principal-protected? When it comes time to rebalance your portfolio after disastrous equity and/or bond returns, you've got in your cash component some excess weighting since it was unaffected by the disastrous performance. That excess cash is ready to be deployed to purchase equities and/or bonds at the lower current prices. Rebalancing from cash can add a bonus to your returns and smooth volatility. If you have no cash component and only equities and bonds, you have no money to deploy when both equities and bonds are depressed. You didn't keep any powder dry. And, BTW, I would personally keep a bit more than 3% of my powder dry. Consider a short-term cash deposit or good money-market fund for your \"\"equivalent to cash\"\" position.\"" }, { "docid": "94273", "title": "", "text": "Tell your employer during your initial contract Terms of Service discussions. Ordinarily, this is boilerplate but you should ask for a rider in your contract which says - in some form - I already have IP, I will continue to work on this IP in my own time, and any benefit or opportunity derived from this IP will continue to be entirely mine. I requested exactly such a rider when I took up a new job just over a year ago and my employer was extremely accommodating. That I already had a company in which that IP could reside actually made the process easier. As @JohnFX has already mentioned, not telling your employer is both unethical as well as storing up potential legal hassles for you in the futre." }, { "docid": "212481", "title": "", "text": "depends IB is a huge area, are they quant traders, portfolio construction researchers, ML researchers, data engineers,analysts, software engineers? One year in $150k is unlikely however if a trader, quant trader or quant researcher, software engineer certainly possible. $1m by 30 good luck I own a recruitment business for IB's, HF's, its not common to earn $1m at a bank, certainly not these days, buyside again very difficult but more likely. I work with directors/MD's predominantly and Barclays for sure will not pay that by there 30, they have some MD's on million dollar sums but they are not common. They have a hell of a long road before they get there, at Barclays he could be canned in 2 years regardless of his performance. Citi VP's are capped at $180k base if you perform exceptionally matching bonus realistically between 30-50%of base, though this can vary. Depending on the role typically goes like this: associate - 2 or 3 years, then VP 3- 5 years, director 7-10 years MD 12-15 years + depending on area, role, bank you join. Each area is different. If you go into finance research your area it's highly competitive, if you cannot explain your enthusiasm for finance and why you want to do it beside money you will find it hard. School is not that important JP hires shit tonnes from Baruch and Lafayette College its about your GPA. Learn to code Python, KDB+/Q, C++ and Matlab are decent languages that are universally used. EDIT - Citi also pay higher than Barclays generally across the board." }, { "docid": "99568", "title": "", "text": "\"The majority (about 80%) of mutual funds are underperforming their underlying indexes. This is why ETFs have seen massive capital inflows compared to equity funds, which have seen significant withdrawals in the last years. I would definitively recommend going with an ETF. In addition to pure index based ETFs that (almost) track broad market indexes like the S&P 500 there are quite a few more \"\"quant\"\" oriented ETFs that even outperformed the S&P. I am long the S&P trough iShares ETFs and have dividend paying ETFs and some quant ETFS on top (Invesco Powershares) in my portfolio.\"" }, { "docid": "459494", "title": "", "text": "\"Below is just a little information on short selling from my small unique book \"\"The small stock trader\"\": Short selling is an advanced stock trading tool with unique risks and rewards. It is primarily a short-term trading strategy of a technical nature, mostly done by small stock traders, market makers, and hedge funds. Most small stock traders mainly use short selling as a short-term speculation tool when they feel the stock price is a bit overvalued. Most long-term short positions are taken by fundamental-oriented long/short equity hedge funds that have identified some major weaknesses in the company. There a few things you should consider before shorting stocks: Despite all the mystique and blame surrounding short selling, especially during bear markets, I personally think regular short selling, not naked short selling, has a more positive impact on the stock market, as: Lastly, small stock traders should not expect to make significant profits by short selling, as even most of the great stock traders (Jesse Livermore, Bernard Baruch, Gerald Loeb, Nicolas Darvas, William O’Neil, and Steven Cohen,) have hardly made significant money from their shorts. it is safe to say that odds are stacked against short sellers. Over the last century or so, Western large caps have returned an annual average of between 8 and 10 percent while the returns of small caps have been slightly higher. I hope the above little information from my small unique book was a little helpful! Mika (author of \"\"The small stock trader\"\")\"" }, { "docid": "546637", "title": "", "text": "Depends on your time scale, but generally, I don't think it would work. What you'd really be betting on in this case is mean-reversal, which does not hold true in the equity universe (atleast not in the long run). If you look at the historical prices of the S&P, you'll notice it increases in terms of absolute dollar value. On the short term, however, if you feel the market has significantly undervalued or overvalued a security, then mean-reversal might be a reasonable bet to make. In that scenario, however, it seems to me that you are really looking for a volatility trade, in which case you might want to consider a straddle position using options. Here, the bet you'd be making is that the price at expiration will be inside a certain band (or outside the band, depending on your position)." }, { "docid": "373781", "title": "", "text": "\"What exactly do you need explained? Short term returns show \"\"fat tails\"\" in their distribution. Long term returns converge towards a gaussian distribution. The authors think there's a connection between this and the \"\"long memory\"\" of volatility (i.e. that the autocorrelation of absolute volatilities also has a fat tail).\"" }, { "docid": "473963", "title": "", "text": "\"I was wondering how do we calculate the total capital of a company? Which items should I look for in the financial statements? Total capital usually refers to the sum of long-term debt and total shareholder equity; both of these items can be found on the company's balance sheet. This is one of the calculations that's traditionally used when determining a company's return on capital. I'll use the balance sheet from Gilead Sciences' (GILD) 2012 10-K form as an example. Net long-term debt was $7,054,555,000 and total stockholder equity was $9,550,869,000 which should give a grand total of $16,605,424,000 for total capital. (I know you can do the math, but I always find an example helpful if it uses realistic numbers). You may sometimes hear the term \"\"total capital\"\" referring to \"\"total capital stock\"\" or \"\"total capital assets,\"\" in which case it may be referring to physical capital, i.e. assets like inventory, PP&E, etc., instead of financial capital/leverage. And how do I calculate notes payable? Is the same as accounts payable? As the word \"\"payable\"\" suggests, both are liabilities. However, I've always been taught that accounts payable are debts a business owes to its suppliers, while notes payable are debts a business owes to banks and other institutions with which it has signed a formal agreement and which use formal debt instruments, e.g. a loan contract. This definition seems to match various articles I found online. On a balance sheet, you can usually determine notes payable by combining the short-term debt of the company with the current portion of the long-term debt. These pieces comprise the debt that is due within the fiscal year. In the balance sheet for Gilead Sciences, I would only include the $1,169,490,000 categorized as \"\"Current portion of long-term debt and other obligations, net\"\" term, since the other current liabilities don't look like they would involve formal debt contracts. Since the notes payable section of GILD's balance sheet doesn't seem that diverse and therefore might not make the best example, I'll include the most recent balance sheet Monsanto as well.1 Monsanto's balance sheet lists a term called \"\"Short-term debt, including current portion of long-term debt\"\" with a value of $36 million. This looks like almost the exact definition of notes payable. 1. Note that this financial statement is called a Statement of Consolidated Financial Position on Monsanto's 10-K.\"" } ]

[ { "docid": "477434", "title": "", "text": "This should not be taken to be financial advice or guidance. My opinions are my own and do not represent professional advice or consultation on my part or that my employer. Now that we have that clear... Your idea is a very good one. I'm not sure about the benefits of a EBITDA for personal financial planning (or for financial analysis, for that matter, but we will that matter to the side). If you have a moderate (>$40,000) income, then taxes should be one the largest, if not the largest chunk of your paycheck out the door. I personally track my cash flow on a day-by-day basis. That is to say, I break out the actual cash payments (paychecks) that I receive and break them apart into the 14 day increments (paycheck/14). I then take my expenses and do the same. If you organize your expenses into categories, you will receive some meaningful numbers about your daily liquidity (i.e: cash flow before taxes, after taxes, cash flow after house expenses, ect) This serves two purposes. One, you will understand how much you can actually spend on a day-to-day basis. Second, once you realize your flexibility on a day-to-day basis, it is easy to plan and forecast your expenses." } ]

[ { "docid": "151375", "title": "", "text": "\"I've recommended this book a few times on this site, and I'm going to do it again. Get a Financial Life: Personal Finance in Your Twenties and Thirties by Beth Kobliner Most of the personal finance advice books and blogs I have found focus too much on investing, or are more about \"\"lifestyle\"\" than finances, and left me unimpressed. I like this book because it covers most of the major personal finance topics (budgets, rainy-day fund, insurance, retirement, and non-retirement investment). I have not found another book that covers the topics as concisely as this one. It is no-nonsense, very light reading. Even if you are not a book person, you can finish it in a weekend. It is really geared for the young person starting their career. Not the most current book (pre real-estate boom), but the advice is still sound. Keep in mind that is is starting point, not the ultimate answer to all financial questions.\"" }, { "docid": "595306", "title": "", "text": "\"Just for clarification, my perspective on education background is from a front office associate at a BB that interacts with the traders and analysts at other BB's and HF's daily.... many of whom have become good friends. Take it for what you will. It's not my role to tell you which is right for you but I can definitely give an honest perspective of which is far more common. &gt; There were 11,620 people who passed L3 last year Doesn't take into account the number of these that were already MBA holders (quite a larger percent as MBA has become less competitive and a CFA is required to demonstrate the quantitative capacity of a MBA holder). This is a huge factor in the skew of your numbers as MBA's have become dime a dozen, MBA holders are now being expected to hold a MS or get a CFA to establish that their quantitative skills are qualified for working on modern day wall st front office roles. &gt; and became charter holders Wrong. Passing L3 doesn't automatically make you a charterholder. You need the 48 months of approved experience in portfolio management, investment analysis, or market research. These roles are becoming more and more exclusive to target graduates and mba holders so the likelihood of a CFA charterholder already having a MBA is actually increasing. &gt; Now lets just take the top 25 MBA programs, that'd be 460 people/class graduating to reach this number. Actual numbers are MUCH lower than this. Clearly you don't realize the graduate enrollment levels at target schools. Lets take a look at full time enrollment (meaning 1/2 graduates each year) for the top 10 for finance: * Wharton: 1,669 * UChi: 1,160 * NYU: 784 * Columbia: 1,264 * MIT: 804 * Stanford: 803 * Harvard: 1,808 * UC Berkley: 492 * UCLA: 750 * Northwestern: 1,201 That's averaging 536 graduates/year per school at the top 10 schools for finance. To argue that there are no graduates from UNC, Duke, CMU, USC, Emory, Cornell, Georgetown, Dartmouth, Yale, IU, Rice, Vanderbuilt, etc on Wall St would be ignorance in its purest form. &gt; Trust me, I'm a big fan of the CFA, You might be a fan but clearly you don't know much about the exam.... keep reading and you'll see why &gt; but I know some really dumb people who are charter holders because they learned to memorize a test. Memorize a test? You can def argue that for L1... Not for L2 or L3. There's a reason there's such a collective failure amongst candidates that pass 1 and move on to L2 and L3. L2 requires critical scenario understanding of the concepts more than the formulas itself. It tests your ability to understand complex and unique FRA (such as repatriated foreign exhange delta's on cash flows)... Not just memorizing a formula and regurgitating. L3 is even more removed from just formulas as requiring detailed essay responses. 3 hour section with 10-15 multipart essay questions?... yeah sounds like formula memorizing. /s &gt; These same people would never get admitted to a top 10, no less 25 MBA program. This is an irrelevant point. There are plenty of top 10 and top 25 mba program grad's that wouldn't pass the CFA either. Both emphasize different skillsets. Front office wall st is becoming more and more geared towards MS holders and CFA charters... many MBA's holders and MBA programs lack the quantitative focus to take these roles and are being denied. &gt;One thing I will give you, there are WAY too many MBAs in general (partially because of all the part-time, night-time, executive ones)... But an MBA is very different then a CFA in that its banded by school and category. Absolutely. That reinforces my entire point that MBA's are dime a dozen. What are we arguing about again?... MBA's are very different than a CFA in that even within target schools, they each emphasize on entirely different skills. MIT Finance mba grads are far more likely to possess strong quantitative than say a Harvard MBA. The reason is that the CFA is a standard qualification that focuses entirely on quantitative capacity.... it is like a MS in the sense that its a mile deep and a foot wide whereas MBA's are a foot deep and a mile wide. &gt; Everyone with a CFA has the same CFA; however, a Wharton degrees sure carries a lot more clout than a UMD one... You're right. But a CFA isn't meant to be comparable and interchangeable with a Wharton degree. The CFA's closest comparison is a MS in quantitative/computational finance. So if you're trying to say CFA is less valuable than a MBA it's apples and oranges. You never will see a job require a MBA or CFA... the CFA will always be listed on a job role as \"\"preferred MS/CFA\"\". Try comparing CFA against a MS from Columbia or Carnegie Mellon MSCF grad and you might have valid results.\"" }, { "docid": "285466", "title": "", "text": "Like others have said, mutual funds don't have an intraday NAV, but their ETF equivalents do. Use something like Yahoo Finance and search for the ETF.IV. For example VOO.IV. This will give you not the ETF price (which may be at a premium or discount), but the value of the underlying securities updated every 15 seconds." }, { "docid": "407449", "title": "", "text": "\"Umm, it depends on the transaction but a lot of transactions get done on a \"\"cash free / debt free\"\" basis. Meaning, I'll pay you 5x EBITDA (or $500) and you deliver the company without any cash or debt subject to a \"\"standard\"\" amount of working capital. Ultimately, you're confusing enterprise value and equity value. The two companies may have different purchase prices (equity values) but they should have very similar enterprise values (given the hypothetical scenario you put together).\"" }, { "docid": "231863", "title": "", "text": "\"The \"\"ideal world\"\" index fund of any asset class is a perfect percentage holding of all underlying assets with immediate rebalancing that aligns to every change in the index weighting while trading in a fully liquid market with zero transaction costs. One finance text book that describes this is Introduction to Finance: Markets, Investments, and Financial Management, see chapter 11. Practically, the transaction costs and liquidity make this unworkable. There are several deviations between what the \"\"ideal world algorithm\"\" (\"\"the algorithm\"\") says you should do and what is actually done. Each of these items addresses a real-world solution to various costs of managing a passive index fund. (And they are good solutions.) However, any deviation from the ideal index fund will have a risk. An investor evaluating their choices is left to pick the lowest fees with the least deviation from the ideal index fund. (It is customary to ignore whether the results are in excess or deficit to the ideal). So your formula is: This is also described in the above book.\"" }, { "docid": "278638", "title": "", "text": "I believe you're looking for some sort of formula that will determine how changes in savings, investing, and spending will affect economic growth. If such a formula existed (and worked) then central planning would work since a couple of people could pull some levers to encourage more savings, or more investing, or more spending - depending on what was needed at that particular time. Unfortunately, no magic formula exists and so no person has enough knowledge to determine what the proper amount of savings, investing, or spending should be at a given time. I found this resource particular helpful in describing the interactions between savings, consumption, and investing." }, { "docid": "427229", "title": "", "text": "Long time Quicken user, but I have Bootcamp on my Mac, and one reason is so I can run Quicken Windows. That's one solution. You didn't mention what version of the Mac OS you're running, but Bootcamp is one alternative if you have (or can purchase) a Windows license. Be advised, Bootcamp 4, which is available with OS 10.7 (Lion) and OS 10.8 (Mountain Lion), officially supports Windows 7 only. Quicken running under Bootcamp isn't perfect, but it's better than any Mac version, and Quicken 2013 has a mobile app that allows you to view your data & enter transactions via your mobile. The Mac Version of Quicken has been panned by users. I do use Windows for work-related stuff, so I have a reason for running Windows besides using Quicken. I've read that Intuit has a market share of more than 70% in the personal finance software sector, and at this point it seems pretty clear that they are not interested in pursuing a larger share via Mac users. So if we ever see a highly functional version of Quicken for the Mac OS, it won't be any time soon. I've not used other products, but there are many reviews out there which rank them, and some consistently come to the front. Top 10 Reviews Mac Personal Finance Software 2013; WeRockYourWeb Personal Finance Software Rankings includes many Web-based alternatives; Personally, I'm not real enthusiastic about posting my personal financial data on someone's Web site. I have nothing to hide, but I just can't get comfortable with cloud-based personal finance software providers that are combing through my data, Google-like, to generate revenue. Too, it seems an unnecessary risk giving a third party a list of all my account numbers, user names, and passwords. I know that information is out there, if one has the right sort of access, but to my way of thinking, using a cloud-based personal finance software application makes it more out there." }, { "docid": "258576", "title": "", "text": "\"In a domestic setting, Letters of Credit are often used to build public works needed to support a development. So if you're bulldozing a few 3 story buildings to build a 50 story tower, the municipality will build appropriate water/sewer/gas/road infrastructure, and draw from the developer's letter of credit to fund it. The 'catch' to the developer is that these things usually aren't revokable -- once the city/town/etc starts work, the developer cannot cut-off the funding, even if the project is cancelled. A letter of credit definitely isn't a consumer financing vehicle. The closest equivalent is a \"\"line of credit\"\" tied to an asset like a home.\"" }, { "docid": "538727", "title": "", "text": "There are all sorts of topics in finance that take a lot of time to learn. You have valuation (time value of money, capital asset pricing model, dividend discount model, etc.), financial statement analysis (ratio analysis, free cash flow &amp; discounted cash flow, etc.) , capital structure analysis(Modgliani &amp; Miller theories of capital structure, weighted average cost of capital, more CAPM, the likes), and portfolio management (asset allocation, security selection, integrates financial statement analysis + other fields like derivatives, fixed income, forex, and commodity markets) and all sorts. My opinion of Investopedia is that there is a lot of wheat with the chaff. I think articles/entries are just user-submitted and there are good gems in Investopedia but a lot of it only covers very basic concepts. And you often don't know what you don't know, so you might come out with a weak understanding of something. To begin, you need to understand TVM and why it works. Time value of money is a critical concept of finance that I feel many people don't truly grasp and just understand you need some 'rate' to use for this formula. Also, as a prereq, you should understand basics of accrual accounting (debits &amp; credits) and how the accounting system works. Don't need to know things like asset retirement obligations, or anything fancy, just how accounting works and how things affect certain financial statements. After that, I'd jump into CAPM and cost of capital. Cost of capital is also a very misunderstood concept since schools often just give students the 'cost of capital' for math problems when in reality, it's not just an explicit number but more of a 'general feeling' in the environment. Calculating cost of capital is actually often very tricky (market risk premium) and subjective, sometimes it's not (LIBOR based). After that, you can build up on those basic concepts and start to do things like dividend discount models (basic theory underlying asset pricing models) and capital asset pricing models, which builds on the idea of cost of capital. Then go into valuation. Learn how to price equities, bonds, derivatives, etc. For example, you have the dividend discount model with typical equities and perpetuities. Fixed income has things like duration &amp; convexity to measure risk and analyze yield curves. Derivatives, you have the Black-Scholes model and other 'derivatives' (heh) of that formula for calculating prices of options, futures, CDOs, etc. Valuation is essentially taking the idea of TVM to the next logical step. Then you can start delving into financial modelling. Free cash flows, discounted cash flows, ratio analysis, pro forma projections. Start small, use a structured problem that gives you some inputs and just do calculations. Bonuses* would be ideas of capital structure (really not necessary for entry level positions) like the M&amp;M theorems on capital structure (debt vs equity), portfolio management (risk management, asset allocation, hedging, investment strategies like straddles, inverse floaters, etc), and knowledge of financial institutions and banking regulations (Basel accords, depository regulations, the Fed, etc.). Once you gain an understanding of how this works, pick something out there and do a report on it. Then you'll be left with a single 'word problem' that gives you nothing except a problem and tells you to find an answer. You'll have to find all the inputs and give reasons why these inputs are sound and reasonable inputs for this analysis. A big part that people don't understand about projections and analysis is that **inputs don't exist in plain sight**. You have to make a lot of judgment calls when making these assumptions and it takes a lot of technical understanding to make a reasonable assumption--of which the results of your report highly depend on. As a finance student, you get a taste for all of this. I'm gonna say it's going to be hard to learn a lot of substantial info in 2 months, but I'm not exactly sure what big business expects out of their grunts. You'll mostly be doing practical work like desk jockey business, data entry, and other labor-based jobs. If you know what you're talking about, you can probably work up to something more specialized like underwriting or risk management or something else. Source: Finance degree but currently working towards starting a (finance related) company to draw on my programming background as well." }, { "docid": "445593", "title": "", "text": "Well, what you are asking is EMI, which comes to 30.78 in your case. The formula you are applying is of compounding a value, which is completely different. In EMI, person keeps paying money every month or any other period as specified. This amount is firstly allocated towards the interest for the period and the balance for principal amount. So, in effect principal keeps decreasing and subsequently interest thereon. Also, since, interest is getting paid every time it becomes due, compounding actually do not happen at all. In the case of compounding, interest gets applied at certain interval, but do not get paid. So, in effect every time when interest gets applied, it applies on complete Principal outstanding as well as interest unpaid. Hence, this complete amount gets payable at the end. In this case, total amount payable is obviously high, because of 2 reasons: 1. Since, Principal gets unpaid during whole period, you are paying interest on complete amount for complete period. 2. You will be paying interest on interest (compounding of interest) since you are not paying it as it is becoming due. Hence, both are different. You need to find EMI calculator or EMI formula, to achieve your purpose. EDIT: The formula for calculating EMI: Assuming a loan of Rs. 1 lakh at 9 % per annum, repayable in 15 years, the EMI calculation using the formula will be: EMI = (1,00,000 × 0.0075) × [(1 + 0.0075) 180 ÷ {(1+0.0075) 180 } - 1] = 750 × [3.838 ÷ 2.838] = 750 × 1.35236 = 1,014" }, { "docid": "110394", "title": "", "text": "Pick one stock (probably within Utilities) and know it well. Understand what it trades on (EV / EBITDA, P / E, P / Rev) and why. What are the typical margins for the industry? What are rev growth trends? What isn't priced in? I think studying one company deeply would be helpful Other things to look at would be how your fund is structured, what it's benchmark is, voting structure, and how ideas are sourced Good luck!" }, { "docid": "50912", "title": "", "text": "This is more a question for /r/personalfinance, but I'll answer it anyways. Just use the RATE formula in excel. =RATE(numperiods,monthly payment,amount financed)*12 Just make sure the number of periods is in months, the payment is negative, and to multiply the whole thing by 12 to get the annual interest rate." }, { "docid": "591230", "title": "", "text": "No, and using a 37 year old formula in finance that is as simple as: should make it obvious technical analysis is more of a game for retail traders than investment advice. When it comes to currencies, there are a myriad of macroeconomic occurrences that do not follow a predictable timescale. Using indicators like RSI on any time frame will not magically illuminate broad human psychology and give you an edge. It is theoretically possible for a single public stock's price to be driven by a range of technical traders who all buy at RSI 30 and sell at RSI 70, after becoming a favorite stock on social media, but it is infinitely more likely for all market participants to have completely different goals." }, { "docid": "298779", "title": "", "text": "Ok - what's your starting point? Are you starting with equity value and then working your way back to an enterprise value? Then yes, you must subtract cash and add debt. If you're doing a DCF, you don't have to make any changes to the values at the end if you're looking for an enterprise value. If you're looking for an equity value, you would need to add cash and subtract debt. If you're simply applying a enterprise value multiple (such as EV / EBITDA) you don't need to make any changes. Just multiply the Company's EBITDA by the multiple in question. Enterprise values are supposed to be capital structure independent because they are only valuing the company on metrics that occur before the impact of the Company's capital structure." }, { "docid": "266221", "title": "", "text": "\"Sure, Yahoo Finance makes mistakes from time to time. That's the nature of free data. However, I think the issue here is that yahoo is aggregating several line items into one. Like maybe reporting cash equivalents plus total investment securities minus loans as \"\"cash equivalents.\"\" This aggregation is done by a computer program somewhere and may or may not be appropriate for a particular purpose and firm. For this reason, if you are trying to do top quality research, it's always better to go to the original SEC filings, if you can. Then you will know for sure which items you are looking at. The only mistakes will be the ones made by the accountants at the firm in question. If there's a reason you prefer to use yahoo, like if it's easier for your code to scrape, then spend a little time comparing to the SEC filing to ensure you know where the numbers really come from before using it.\"" }, { "docid": "392851", "title": "", "text": "So for quarters So, if Q1's value was 10 and Q2's value was 25 For closing or opening prices, I would use closing prices. For instance, some used Adjusted Close or Close on Yahoo Finance (see this example of AAPL). Added Note: In your example, for your example, you'll want to take the absolute value of the denominator (aka: divisor), so an Excel formula might look like the below example ... ... where the new and old are cells." }, { "docid": "463750", "title": "", "text": "\"This might not map well, because personal finance is not the global economy; but let's start by talking about this in terms of the cost of a loan vs the gain of an investment. If you can buy a house with a mortgage at 3%, but make 7% on average in the stock market... You should take as *looong* as possible to pay that off, and invest every penny you can spare in the markets. Heck, if you can take on even *more* debt at 3%, you should still do the same. Now imagine you have the power to literally print money, *but*, doing so is effectively a form of \"\"loan\"\" to yourself. We call the \"\"interest\"\" on that loan \"\"inflation\"\", and it comes out to roughly 2%, basically the same rate that US treasuries pay (they aren't strictly locked, but they rarely drift far apart). So, if you can print money at 1%, you should rationally print as much money as you possibly can to buy US treasuries at 2+%. But someone has to *take* that money off your hands - Pallets of money siting in a warehouse aren't worth any more than the paper they're made of. There we get into trade imbalances... Whether printing money costs you 0.1% or 10% or 1000% per year depends on whether your country is, on average, making or losing money on international trade (I'm glossing over a hell of a lot there, as full disclosure), and by how much. If you're printing money as fast as you can just to buy food to stay alive with zero exports, you're screwed; if your country exports $10 to the US (or equivalents) for every $1 you import, the rest of that is essentially \"\"invested\"\" in USD, in that you didn't need to print it yourself just to feed your people.\"" }, { "docid": "383399", "title": "", "text": "Algo traders/quants/market backtesters/coders/et al. I am looking to backtest basic things like the correlation of P/E, EV/EBITDA, etc. to market performance. I know a little R and Python. What is the easiest way to learn to backtest this sort of stuff? I want to eventually get into algo trading sort of stuff. I'd **greatly** appreciate it!" }, { "docid": "209238", "title": "", "text": "The general concept is that your money will grow at an accelerating rate because you start getting interest paid on your returns in addition to the original investment. As a simple example, assume you invest $100 and get 10% interest per year paid annually. -At the end of the first year you have your $100 + $10 interest for a total of $110. -So you start the second year with $110 and so 10% would be $11 for a total of $121. -The third year you start with $121 so 10% would be $12.10 for a total of $133.10 See how the amount it goes up each year increases? If we were talking a higher initial amount or a larger number of years that can really add up. That is essence is compound interest. Most of the complicated looking formulas you see out there for compound interest are just shortcuts so you don't have to iteratively go through the above exercise a bunch of times to find out how much you would have after some number of years. This formula tells you how much you would have(A) after a certain number of years(t) at a given interest rate(r) assuming they pay interest n times per year, for example you would use 12 for n if it paid interest monthly instead of yearly. P represents the amount you started out with. If you keep investing monthly (as shown in your example) instead of just depositing it and letting it sit, you have to use a more complicated formula. Finance people refer to this as calculating the future value of an annuity. That formula looks like this: A = PMT [((1 + r)N - 1) / r] x (1+r) A : Is the amount you would have at the end of the time period. N : The number of compounding periods (months if you get interest calculated monthly) PMT : The total amount you are putting in each period (N) r: Just like before, the interest rate you are getting paid. Be sure to adjust this to a monthly number if N represents months (divide APR by 12)* *Most interest rates are quoted as APR, which is the annualized interest rate not counting compounding. Don't confuse this with APY, which has compounding built into it and is not appropriate for use in this formula. Inserting your example: r (monthly interest rate) = 15% APR / 12 = .0125 n = 30 years * 12 months/year = 360 months A = $150 x [((1 + .0125)360 - 1) / .0125] x (1+.0125) A = $1,051,473.09 (rounded)" } ]

[ { "docid": "285185", "title": "", "text": "\"First of all, congratulations on saving some money. So many people these days do not even get that far. As far as investments, what is best for you depends heavily on your: Here is a quick summary of types of assets that are likely available to you, and my thoughts on why they may or may not be a good fit for your situation. Cash Equivalents Cash Equivalents are highly liquid, meaning you can get cash for them on fairly short notice. In particular, Money Markets and Certificates of Deposit (CDs) are also considered very safe when issued by a bank, as they are often insured against loss by the government up to a certain amount (this varies quite a lot by country within Europe, see the Wikipedia article here for additional detail. Please note that in the case of a CD, you are usually unable to get access to your money for the length of the investment period, which is usually a short period of time such as 3 months, 6 months, or 1 year. This is a good choice if you may need your money back on short notice, and your main goal is to preserve your principal. However, the returns tend to be very low and often do not keep pace with inflation, meaning that over several years, you may lose \"\"real\"\" purchasing power, even if you don't lose nominal value in your account. Special Note on Cash Equivalents If the money you want to invest is also your Emergency Fund, or you do not have an Emergency Fund, I would highly recommend Cash Equivalents. They will provide the highest level of Liquidity along with a short Time Horizon so that you can get your money as needed in the case of unforeseen expenses such as if your car breaks down. Debt Debt investments include government and corporate bonds. They are still considered relatively safe, as the issuer would need to default (usually this means they are in bankruptcy) in order for you not to be paid back. For example, German bonds have been considered safer than Greek bonds recently based on the underlying strength of the government. Unlike Cash Equivalents, these are not guaranteed against loss, which means that if the issuer defaults, you could lose up to 100% of your investment. Bonds have several new features you will need to consider. One is interest rate risk. One reason bonds perform better than cash equivalents is that you are taking on the risk that if interest rates rise, the fixed payments the bond promises will be worth less, and the face value of your bond will fall. While most bonds are still very Liquid, this means that if you need to sell the bond before it matures, you could lose money. As mentioned earlier, some bonds are riskier than others. Given that you are looking for a low-risk investment, you would want to select a bond that is considered \"\"invesment grade\"\" rather than a riskier \"\"junk\"\" bond. Debt investments are a good choice if you can afford to do without this money for a few years, and you want to balance safety with somewhat better returns than Cash Equivalents. Again though, I would not recommend investing in Debt until you have also built up a separate Emergency Fund. If you do choose to invest in bonds, I recommend that you diversify your risks by investing in a bond fund, rather than in just one company's or government's debt. This will reduce the likelihood that you will experience a catastrophic loss. Ownership Ownership assets includes stocks and other assets such as real estate and precious metals such as gold. While these investments can have high returns, in your situation I would strongly recommend that you not invest in these types of investments, for the following reasons: For these reasons, debt is considered a safer investment than equity for any particular company, government, or the market as a whole. Ownership assets are a good choice for people who have a high Risk Tolerance, long Time Horizon, low Liquidity needs, and will not be bothered by larger potential changes in the value of the investment at any given time. Special Note on Gold I would consider Gold a very risky investment and not a good fit for you at the moment based on what you've shared in your question. Gold is considered \"\"safe\"\" in the sense that people believe that if the economy goes into recession, depression, or collapses entirely, gold will continue to be valuable. In a post-apocalyptic world where paper money became worthless, it is still a good bet that gold will always be considered valuable within human society as a store of value. That being said, the price of gold fluctuates almost entirely based on how bad people think things are going to get. Think about the difference between gold and a company like Coca-Cola. Would you like to own 100% of Coca-Cola? Of course, because you know there is a very good chance that people will continue to spend money all over the world on their products. On the other hand, gold itself produces no products, no sales, no profits, and no cash flow. As such, if you buy gold, you are really making a speculative bet that gold will be in higher demand tomorrow than it is today. You are buying an asset (the gold) rather than part of a company's equity or debt that is designed to throw off payments to its investors in the form of bond payments or dividends. So, if people decide next year that things are improving, it is possible that gold could lose value, given that gold prices are at historically high levels. Gold could be a good choice for someone who has a large, well-diversified investment portfolio, and who is looking for a hedge to protect against inflation and other risks that they have taken on via their other investments. I hope that is helpful - best of luck in your choices. Let us know what you decide!\"" } ]

[ { "docid": "267904", "title": "", "text": "Stock index funds are likely, but not certainly, to be a good long-term investment. In countries other than the USA, there have been 30+ year periods where stocks either underperformed compared to bonds, or even lost value in absolute terms. This suggests that it may be an overgeneralization to assume that they always do well in the long term. Furthermore, it may suggest that they are persistently overvalued for the risk, and perhaps due for a long-term correction. (If everybody assumes they're safe, the equity risk premium is likely to be eaten up.) Putting all of your money into them would, for most people, be taking an unnecessary risk. You should cover some other asset classes too. If stocks do very well, a portfolio with some allocation to more stable assets will still do fairly well. If they crash, a portfolio with less risky assets will have a better chance of being at least adequate." }, { "docid": "74277", "title": "", "text": "\"The applicants go through the same process as for any other loan. The only difference is that the \"\"bank\"\" is people like me, perhaps 200 of us on a note. We kick in $25 or so on each note and get the opportunity to ask the applicant questions. The investors pay a small percentage as fees to have professionals rate the notes. The worse the credit, the higher the interest rates the note holder recieves. Of course if the person stops paying, we receive nothing. Calculated risk. I invest in high risk notes sometimes depending on what it's for and have several in my portfolio. It's literally microlending. I can afford to lose $25 on a risky loan or two for a 19% profit because the rest of my portfolio is diversified into hundreds of 9-11% notes. It works surprisingly well.\"" }, { "docid": "76996", "title": "", "text": "\"If the OP is saving 33% if his/her current income, he/she doesn't want or need yet more income from investments right now. The advice on \"\"diversifying\"\" in the other answers is the standard \"\"investment advisor\"\" response to beginner's questions, and has two advantages for the advisor: (1) they won't get sued for giving bad advice and (2) they can make a nice fat commission selling you some very-average-performance products (and note they are selling you \"\"investment industry products,\"\" not necessarily \"\"good investment opportunities\"\" - advisors get paid commission and bonuses for selling more stuff, not for selling good stuff). My advice would be to drip-feed some of your excess income into the emerging market sector (maybe 1/3 or 1/4 of the excess), with the intention of leaving it there untouched for up to 20 or 30 years, if need be. At some unknown future time, it is almost certain there will be another EM \"\"boom,\"\" if only because people have short memories. When that happens, sell up, take your profits, and do something less risky with them. You might consider putting another slice of your excess income into the commodities sector. I don't know when the oil price will be back at $150 or $200 a barrel, but I would be happy to bet it will happen sometime in the OP's lifetime... Since you apparently have plenty of income and are relatively young, that is the ideal time to adopt a risky investment strategy. Even if you lose your entire investment over the next 5 years, you still have another 20 years to recover from that disaster. If you were starting to invest at age 56 rather than 26, the risk/reward situation would be very different, of course.\"" }, { "docid": "283074", "title": "", "text": "In answer to your last formulation, no. In a perfectly efficient market, different investors still have different risk tolerances (or utility functions). They're maximizing expected utility, not expected value. The portfolios that maximize expected utility for different risk preferences are different, and thus generally have different expected values. (Look up mean-variance utility for a simple-ish example.) Suppose you have log utility for money, u(x) = log(x), and your choice is to invest all of your money in either the risk-free bond or in the risky bond. In the risky bond, you have a positive probability of losing everything, achieving utility u(0) = -\\infty. Your expected utility after purchase of the risky bond is: Pr(default)*u(default) + (1-Pr(default))*u(nominalValue). Since u(default)= -\\infty, your expected utility is also negative infinity, and you would never make this investment. Instead you would purchase the risk-free bond. But another person might have linear utility, u(x) = x, and he would be indifferent between the risk-free and risky bonds at the prices you mention above and might therefore purchase some. (In fact you probably would have bid up the price of the risk-free bond, so that the other investor strictly prefers the risky one.) So two different investors' portfolios will have different expected returns, in general, because of their different risk preferences. Risk-averse investors get lower expected value. This should be very intuitive from portfolio theory in general: stocks have higher expected returns, but more variance. Risk-tolerant people can accept more stocks and more variance, risk-averse people purchase less stocks and more bonds. The more general question about risk premia requires an equilibrium price analysis, which requires assumptions about the distribution of risk preferences among other things. Maybe John Cochrane's book would help with that---I don't know anything about financial economics. I would think that in the setup above, if you have positive quantities of these two investor types, the risk-free bond will become more expensive, so that the risky one offers a higher expected return. This is the general thing that happens in portfolio theory. Anyway. I'm not a financial economist or anything. Here's a standard introduction to expected utility theory: http://web.stanford.edu/~jdlevin/Econ%20202/Uncertainty.pdf" }, { "docid": "178001", "title": "", "text": "\"I don't think you should mix the two notions. Not starting out with at least. It takes so much money, time and expertise to invest for income that, starting out at least, you should view it as a goal, not a starting point. Save your money in the lowest cost investments you can find. If you are like me, you can't pick a stock from a bond, so put your money into a target retirement fund. Let the experts manage the risk and portfolio. Start early and save often! At only 35 you have lots of time. Perhaps you are really into finance, in which case you might somebody manage your own portfolio. Great, but for now, let an expert do the heavy lifting. You are an app developer. Your best bet to increase your income stream with via your knowledge and expertise. While you are still so young, you should use labor to make money, and then save that money for retirement. I am going to make an assumption that where you are will software development means you can become a great developer long before you can become a great financier. Play to your strengths. I am also afraid you are over estimating how comfortable you are with risk. Any \"\"investment\"\" that has the kinds of returns you are looking for is going to be wildly risky. I would say those types of opportunities are more \"\"speculation\"\" rather than \"\"investments.\"\" There isn't necessarily anything wrong with speculations, but know the difference in risk. Are you really willing to gamble your retirement?\"" }, { "docid": "197241", "title": "", "text": "Do developing country equities have a higher return and/or lower risk than emerging market equities? Generally in finance you get payed more for taking risk. Riskier stocks over the long run return more than less risky bonds, for instance. Developing market equity is expected to give less return over the long run as it is generally less risky than emerging market equity. One way to see that is the amount you pay for one rupee/lira/dollar/euro worth of company earnings is fewer rupees/lira and more dollars/euros. when measured in the emerging market's currency? This makes this question interesting. Risky emerging currencies like the rupee tend to devalue over time against less risky currencies euro/dollars/yen like where most international investment ends up, but the results are rather wild. Think how badly Brazil has done recently and how relatively well the rupee has been doing. This adds to the returns (roughly based on interest rates) of foreign stocks from the point of view of a emerging market investor on average but has really wild variations. Do you have data for this over a long timeframe (decades), ideally for multiple countries? Not really, unfortunately. Good data for emerging markets is a fairly new phenomenon and even where it does exist decades ago it would have been very hard to invest like we can now so it likely is not comparable. Does foreign equity pay more or less when measured in rupees (or other emerging market currency)? Probably less on average (theoretically and empirically) all things included though the evidence is not strong, but there is a massive amount of risk in a portfolio that is 85% in a single emerging market currency. Think about if you were a Brazilian and needed to retire now and 85% of your portfolio was in the Real. International goods like gas would be really expensive and your local currency portfolio would seem paltry right now. If you want to bet on emerging markets in the long run I would suggest that you at least spread the risk over many emerging markets and add a good chunk developed to the mix. As for investing goals, it's just to maximize my return in INR, or maximize my risk-adjusted return. That is up to you, but the goal I generally recommend is making sure you are comfortable in retirement. This usually involves looking for returns are high in the long run, but not having a ton of risk in a single currency or a single market. There are reasons to believe a little bias toward your homeland is good as fees tend to be lower on local investments and local investments tend to track closer to your retirement costs, but too much can be very dangerous even for countries with stronger currencies, say Greece." }, { "docid": "537711", "title": "", "text": "\"Before going into specific investments, I think it would be a good idea to assess how \"\"free\"\" is that $5000. How much do you have to rely on it in emergency? You always want to buy low and sell high. However, if you need to make unplanned withdraw from an investment, you risk unfavorable market conditions at the time when you need the money, and lose money that way. One common suggestion is to keep 3-6 months living expense in checking/saving/very, very liquid/short term investments. After that, you can invest the rest in more profitable ventures. Assuming that you are all set in that regard, next consideration is whether you have any goal for the money besides generating the maximum return. Is this for retirement, buying a house/apartment a few year down the road, graduate school, emergency cash store for the time between graduation and getting a job, or traveling a year in Europe after graduation? There are myriad of other possible goals. Knowing that you get a better idea of the time frame involved in the investment, and what you need to do with your money. If this is for retirement, you just need to generate the highest possible return for 40-50 years, while minimize taxes when you have to withdraw that money (there are more nuanced concerns, but large idea-wise that's what you need to do). If you want it for a trip to an exotic location in 2 year, then your primary goal will be to preserve the value of your capital, while assessing whether you need to manage foreign-exchange risk. The time frame also rule in or rule out certain types of investments. If you are planning to use the money to purchase a house in 5 years, IRAs probably would not be what you are looking for. If you are planning to retirement, short term CD would not be the most effective way. After figuring out a bit of what you are trying to do with the money, I think how you want to invest it will be much more clear to you. In case of retirement, people seem to generally recommend no load index funds, and mid-cap growth funds. Nothing is really off the table, since your investment time frame is so long, and you can tolerate risk. You might also be interested to check out https://www.wealthfront.com/ (I have no relation with them). A friend recommended it to me, and I think their pitch make sense. In other cases, it really is case dependent, and there might have more than one solution to any case. There is just one more potential investment venture that people you might not immediately thinking of, and that might be of interest to you. That is to use the $5000 as your own budget to build/maintain connections with people and network. Use it to take professors out to a meal to pick their brain, travel to keep in touch with old friends, network with potential future employers and peers to improve job prospect, or get opportunities to meet interesting people. I hope this helps.\"" }, { "docid": "472051", "title": "", "text": "It's a matter of opinion. As a general rule, my advice is to take charge of your own investments. Sending money to someone else to have them invest it, though it is a common practice, seems unwise to me. This particular fund seems especially risky to me, because there is no known portfolio. Normally, real estate investment trusts (REITs) have a specific portfolio of known properties, or at least a property strategy that you know going in. Simply handing money over to someone else with no known properties, or specific strategy is buying a pig in a poke." }, { "docid": "21314", "title": "", "text": "\"This sound like a very bad idea. If you invest exclusively in silver, your investment is not diversified in any way. This is what I would call risky. Have a look at index funds and ETFs and build a diversified portfolio. It does not take much time, and you don't need to let it do by someone else. They are risky too, but I see \"\"silver only\"\" as much riskier. You reduce the risk by holding on to the funds for a long time.\"" }, { "docid": "464297", "title": "", "text": "If you have money and may need to access it at any time, you should put it in a savings account. It won't return much interest, but it will return some and it is easily accessible. If you have all your emergency savings that you need (at least six months of income), buy index-based mutual funds. These should invest in a broad range of securities including both stocks and bonds (three dollars in stocks for every dollar in bonds) so as to be robust in the face of market shifts. You should not buy individual stocks unless you have enough money to buy a lot of them in different industries. Thirty different stocks is a minimum for a diversified portfolio, and you really should be looking at more like a hundred. There's also considerable research effort required to verify that the stocks are good buys. For most people, this is too much work. For most people, broad-based index funds are better purchases. You don't have as much upside, but you also are much less likely to find yourself holding worthless paper. If you do buy stocks, look for ones where you know something about them. For example, if you've been to a restaurant chain with a recent IPO that really wowed you with their food and service, consider investing. But do your research, so that you don't get caught buying after everyone else has already overbid the price. The time to buy is right before everyone else notices how great they are, not after. Some people benefit from joining investment clubs with others with similar incomes and goals. That way you can share some of the research duties. Also, you can get other opinions before buying, which can restrain risky impulse buys. Just to reiterate, I would recommend sticking to mutual funds and saving accounts for most investors. Only make the move into individual stocks if you're willing to be serious about it. There's considerable work involved. And don't forget diversification. You want to have stocks that benefit regardless of what the overall economy does. Some stocks should benefit from lower oil prices while others benefit from higher prices. You want to have both types so as not to be caught flat-footed when prices move. There are much more experienced people trying to guess market directions. If your strategy relies on outperforming them, it has a high chance of failure. Index-based mutual funds allow you to share the diversification burden with others. Since the market almost always goes up in the long term, a fund that mimics the market is much safer than any individual security can be. Maintaining a three to one balance in stocks to bonds also helps as they tend to move in opposite directions. I.e. stocks tend to be good when bonds are weak and vice versa." }, { "docid": "322806", "title": "", "text": "\"Diversification is the only real free lunch in finance (reduction in risk without any reduction in expected returns), so clearly every good answer to your question will be \"\"yes.\"\" Diversification is good.\"\" Let's talk about many details your question solicits. Many funds are already pretty diversified. If you buy a mutual fund, you are generally already getting a large portion of the gains from diversification. There is a very large difference between the unnecessary risk in your portfolio if you only hold a couple of stocks and if you hold a mutual fund. Should you be diversified across mutual funds as well? It depends on what your funds are. Many funds, such as target-date funds, are intended to be your sole investment. If you have funds covering every major asset class, then there may not be any additional benefit to buying other funds. You probably could not have picked your \"\"favorite fund\"\" early on. As humans, we have cognitive biases that make us think we knew things early on that we did not. I'm sure at some point at the very beginning you had a positive feeling toward that fund. Today you regret not acting on it and putting all your money there. But the number of such feelings is very large and if you acted on all those, you would do a lot of crazy and harmful things. You didn't know early on which fund would do well. You could just as well have had a good feeling about a fund that subsequently did much worse than your diversified portfolio did. The advice you have had about your portfolio probably isn't based on sound finance theory. You say you have always kept your investments in line with your age. This implies that you believe the guidelines given you by your broker or financial advisor are based in finance theory. Generally speaking, they are not. They are rules of thumb that seemed good to someone but are not rigorously proven either in theory or empirics. For example the notion that you should slowly shift your investments from speculative to conservative as you age is not based on sound finance theory. It just seems good to the people who give advice on such things. Nothing particularly wrong with it, I guess, but it's not remotely on par with the general concept of being well-diversified. The latter is extremely well established and verified, both in theory and in practice. Don't confuse the concept of diversification with the specific advice you have received from your advisor. A fund averaging very good returns is not an anomaly--at least going forward it will not be. There are many thousand funds and a large distribution in their historical performance. Just by random chance, some funds will have a truly outstanding track record. Perhaps the manager really was skilled. However, very careful empirical testing has shown the following: (1) You, me, and people whose profession it is to select outperforming mutual funds are unable to reliably detect which ones will outperform, except in hindsight (2) A fund that has outperformed, even over a long horizon, is not more likely to outperform in the future. No one is stopping you from putting all your money in that fund. Depending on its investment objective, you may even have decent diversification if you do so. However, please be aware that if you move your money based on historical outperformance, you will be acting on the same cognitive bias that makes gamblers believe they are on a \"\"hot streak\"\" and \"\"can't lose.\"\" They can, and so can you. ======== Edit to answer a more specific line of questions =========== One of your questions is whether it makes sense to buy a number of mutual funds as part of your diversification strategy. This is a slightly more subtle question and I will indicate where there is uncertainty in my answer. Diversifying across asset classes. Most of the gains from diversification are available in a single fund. There is a lot of idiosyncratic risk in one or two stocks and much less in a collection of hundreds of stocks, which is what any mutual fund will hold. Still,you will probably want at least a couple of funds in your portfolio. I will list them from most important to least and I will assume the bulk of your portfolio is in a total US equity fund (or S&P500-style fund) so that you are almost completely diversified already. Risky Bonds. These are corporate, municipal, sovereign debt, and long-term treasury debt funds. There is almost certainly a good deal to be gained by having a portion of your portfolio in bonds, and normally a total market fund will not include bond exposure. Bonds fund returns are closely related to interest rate and inflation changes. They are also exposed to some market risk but it's more efficient to get that from equity. The bond market is very large, so if you did market weights you would have more in bonds than in equity. Normally people do not do this, though. Instead you can get the exposure to interest rates by holding a lesser amount in longer-term bonds, rather than more in shorter-term bonds. I don't believe in shifting your weights toward nor away from this type of bond (as opposed to equity) as you age so if you are getting that advice, know that it is not well-founded in theory. Whatever your relative weight in risky bonds when you are young is should also be your weight when you are older. International. There are probably some gains from having some exposure to international markets, although these have decreased over time as economies have become more integrated. If we followed market weights, you would actually put half your equity weight in an international fund. Because international funds are taxed differently (gains are always taxed at the short-term capital gains rate) and because they have higher management fees, most people make only a small investment to international funds, if any at all. Emerging markets International funds often ignore emerging markets in order to maintain liquidity and low fees. You can get some exposure to these markets through emerging markets funds. However, the value of public equity in emerging markets is small when compared with that of developed markets, so according to finance theory, your investment in them should be small as well. That's a theoretical, not an empirical result. Emerging market funds charge high fees as well, so this one is kind of up to your taste. I can't say whether it will work out in the future. Real estate. You may want to get exposure to real estate by buying a real-estate fund (REIT). Though, if you own a house you are already exposed to the real estate market, perhaps more than you want to be. REITs often invest in commercial real estate, which is a little different from the residential market. Small Cap. Although total market funds invest in all capitalization levels, the market is so skewed toward large firms that many total market funds don't have any significant small cap exposure. It's common for individuals to hold a small cap fund to compensate for this, but it's not actually required by investment theory. In principle, the most diversified portfolio should be market-cap weighted, so small cap should have negligible weight in your portfolio. Many people hold small cap because historically it has outperformed large cap firms of equal risk, but this trend is uncertain. Many researchers feel that the small cap \"\"premium\"\" may have been a short-term artifact in the data. Given these facts and the fact that small-cap funds charge higher fees, it may make sense to pass on this asset class. Depends on your opinion and beliefs. Value (or Growth) Funds. Half the market can be classed as \"\"value\"\", while the other half is \"\"growth.\"\" Your total market fund should have equal representation in both so there is no diversification reason to buy a special value or growth fund. Historically, value funds have outperformed over long horizons and many researchers think this will continue, but it's not exactly mandated by the theory. If you choose to skew your portfolio by buying one of these, it should be a value fund. Sector funds. There is, in general, no diversification reason to buy funds that invest in a particular sector. If you are trying to hedge your income (like trying to avoid investing in the tech sector because you work in that sector) or your costs (buying energy because you buy use a disproportionate amount of energy) I could imagine you buying one of these funds. Risk-free bonds. Funds specializing in short-term treasuries or short-term high-quality bonds of other types are basically a substitute for a savings account, CD, money market fund, or other cash equivalent. Use as appropriate but there is little diversification here per se. In short, there is some value in diversifying across asset classes, and it is open to opinion how much you should do. Less well-justified is diversifying across managers within the same asset class. There's very little if any advantage to doing that.\"" }, { "docid": "453301", "title": "", "text": "In general I'd say, yeah, if you can pay cash, pay cash. If you pay cash, then by definition you pay zero interest. If you get a loan, you'll pay interest. Most people get a loan to buy a car because they don't have the cash. Possible reasons not to pay cash when you could: One: Technically you can pay cash, but if you did, you would have little or no reserve for emergencies. Like if the car costs, say, $20,000.00, and you have $20,010.00 in your bank account, then technically you could afford to pay cash, but you probably shouldn't, because you don't want to have just $10 left. What if tomorrow something comes up? Two: Arguably, you have a place to invest money that pays more than the interest on the loan. Like say you can get a car loan for, whatever the going rate is today, say 6%. And you know a place to invest your money that is very safe and almost guaranteed to pay 10%. It would make sense to borrow to buy the car, invest the cash, and then withdraw money from the investment to make the payments on the car. You'd end up 4% ahead. There are a lot of catches to that strategy, though. The biggest is that the more the investment pays, the more likely that it is risky. If you thought the investment would pay 10% but it ends up paying only 4%, then you will lose money by this strategy. Also, there's the psychological element: Many people SAY and fully INTEND to invest their money, but then find other things they want to buy and so spend it instead. If you pay cash, you're committed." }, { "docid": "228774", "title": "", "text": "Most of this advice applies to the UK, where I work in motor insurance pricing for a large personal lines insurer, but a lot of it is more general. A loyal customer is usually an overpaying customer. The guiding priciple most financial services companies go by is that there's no point rewarding loyalty except to create it where none exists, i.e. by giving massive discounts to desirable new customers. Shop around every time your policy comes up for renewal, and whenever your circumstances change. Never allow your policy to automatically renew - you may be charged a higher premium by default if you do! Phone up your current insurer and haggle to see if they can beat the best quote you find - their agents will usually be able offer a discount. If applicable in your country, use price comparison websites. Use at least two - different insurers sometimes offer different rates on different sites, competing harder on some than on others, especially if the price comparison website happens to be owned by one of the insurance companies that quotes on it. One example of this is http://www.confused.com, which is owned by RSA group, a major insurer. If there are no price comparison websites for your country, try purchasing your policy through a broker. They'll get quotes from a panel of insurers and offer you the cheapest. They can be especially helpful if you have a problematic driving history, e.g. drink-driving convictions, as many mainstream insurers will decline to quote for such people. Other suggestions Chris Rea's answer is a good starting point, but I would disagree about cutting back on cover. In the UK at least, many insurers often charge an equal or greater amount for lower levels of cover, because the people who choose these policies tend to be worse risks. Re switching vehicles - a cheap old car will not necessarily be much cheaper to insure than a new expensive one, as you can still injure people with it or crash into other people's cars, and the newer car will probably have better safety features. However, a less powerful and smaller vehicle typically poses less of a threat to others and will therefore be cheaper to insure. Another tactic not mentioned so far is 'reverse fronting'. 'Fronting', where the main driver poses as an additional driver and nominates a less risky driver as the main driver, is illegal, but the reverse - adding a less risky driver as an additional driver - is legal and can sometimes reduce premiums. This is because only one of you can drive the car at any one time, and sometimes it'll be the less risky one. So, especially if you're male and aged < 25, see if adding your safest parent as a named driver makes a difference. If you have the choice of storing your car on a driveway or on the street, get quotes for both and see which is cheaper. If you live in an area where burglary is commonplace, thieves are more likely to steal cars left on driveways, as they can break into the owner's home and steal the keys. If not, the driveway is better, as it reduces the risk of a collision. If you have previously driven another vehicle (e.g. motorbike or moped), or if you've been insured as an additional driver on someone else's car, call up insurers directly and ask if they can offer you a no-claims bonus for this. Quotes from price comparison websites tend to limit you to the numbers of years of no-claims you've accrued as a main driver, and may not reflect your full available no-claims bonus. Extreme measures Some insurers give you the option to install a tracking device in your car that can tell them various things, e.g. Some people may be uncomfortable sharing this much information with their insurer, but for particularly risky drivers (I'm looking at you, males < 25) it can sometimes result in a substantial saving. One insurer that offers this is http://www.insurethebox.com/. Finally, if every insurer you can find is quoting in excess of £10,000 for a year's cover, you may find it cheaper instead to purchase a vintage agricultural vehicle and get it covered on a specialist farmer's policy: http://www.metro.co.uk/news/864501-teen-quoted-17k-for-car-insurance-resorts-to-driving-tractor" }, { "docid": "521233", "title": "", "text": "\"The short answer is that banking is complicated, but the bank really doesn't need your money because it can get it from the Fed almost free, it can only use 90% of the money you give the bank, it can only make money on that 90% from very low-risk and thus low-return investments, and as it has to show a profit to its shareholders it will take whatever cut it needs to off the top of the returns. All of these things combine to make savings account interest roughly .05% in the US right now. The longer answer: All FDIC-insured banks (which the US requires all \"\"depositor\"\" banks to be) are subject to regulation by the Federal Reserve. The very first rule that all banks must comply with is that depositor money cannot be invested in things the Fed terms \"\"risky\"\". This limits banks from investing your money in things that have high returns, like stocks, commodities and hedges, because along with the high possible returns come high risk. Banks typically can only invest your savings in T-debt and in certain Fed-approved AAA bonds, which have very low risk and so very little return. The investment of bank assets into risky market funds was a major contributor to the financial crisis; with the repeal of the Glass-Steagall Act, banks had been allowed to integrate their FDIC-insured depositor business with their \"\"investment banking\"\" business (not FDIC insured). While still not allowed to bet on \"\"risky\"\" investments with deposits, banks were using their own money (retained profits, corporate equity/bond money) to bet heavily in the markets, and were investing depositor funds in faulty AAA-rated investment objects like CDOs. When the housing market crashed, banks had to pull out of the investment market and cash in hedges like credit-default swaps to cover the depositor losses, which sent a tidal wave through the rest of the market. Banks really can't even loan your money out to people who walk in, like you'd think they would and which they traditionally used to do; that's how the savings and loan crisis happened, when speculators took out huge loans to invest, lost the cash, declared bankruptcy and left the S&Ls (and ultimately the FDIC) on the hook for depositors' money. So, the upshot of all this is that the bank simply won't give you more on your money than it is allowed to make on it. In addition, there are several tools that the Fed has to regulate economic activity, and three big ones play a part. First is the \"\"Federal Funds Rate\"\"; this is the interest rate that the Fed charges on loans made to other banks (which is a primary source of day-to-day liquidity for these banks). Money paid as interest to the Fed is effectively removed from the economy and is a way to reduce the money supply. Right now the FFR is .25% (that's one quarter of one percent) which is effectively zero; borrow a billion dollars ($1,000,000,000) from the Fed for one month and you'll pay them a scant $208,333. Banks lend to other banks at a rate based on the FFR, called the Interbank Rate (usually adding some fraction of a percent so the lending bank makes money on the loan). This means that the banks can get money from the Fed and from other banks very cheaply, which means they don't have to offer high interest rates on savings to entice individual depositors to save their money with the bank. Second is \"\"quantitative easing\"\", which just means the Fed buys government bonds and pays for them with \"\"new\"\" money. This happens all the time; remember those interest charges on bank loans? To keep the money supply stable, the Fed must buy T-debt at least in the amount of the interest being charged, otherwise the money leaves the economy and is not available to circulate. The Fed usually buys a little more than it collects in order to gradually increase the money supply, which allows the economy to grow while controlling inflation (having \"\"too much money\"\" and so making money worth less than what it can buy). What's new is that the Fed is increasing the money supply by a very large amount, by buying bonds far in excess of the (low) rates it's charging, and at fixed prices determined by the yield the Fed wants to induce in the markets. In the first place, with the Fed buying so many, there are fewer for institutions and other investors to buy. This increases the demand, driving down yields as investors besides the Fed are willing to pay a similar price, and remember that T-debt is one of the main things banks are allowed to invest your deposits in. Inflation isn't a concern right now despite the large amount of new money being injected, because the current economy is so lackluster right now that the new cash is just being sat upon by corporations and being used by consumers to pay down debt, instead of what the Fed and Government want us to do (hire, update equipment, buy houses and American cars, etc). In addition, the \"\"spot market price\"\" for a T-bond, or any investment security, is generally what the last guy paid. By buying Treasury debt gradually at a fixed price, the Fed can smooth out \"\"jitters\"\" in the spot price that speculators may try to induce by making low \"\"buy offers\"\" on T-debt to increase yields. Lastly, the Fed can tell banks that they must keep a certain amount of their deposits in \"\"reserve\"\", basically by keeping them in a combination of cash in the vault, and in accounts with the Fed itself. This has a dual purpose; higher reserve rates allow a bank to weather a \"\"run\"\" (more people than usual wanting their money) and thus reduces risk of failure. An increased reserves amount also reduces the amount of money circulating in the economy, because obviously if the banks have to keep a percentage of assets in cash, they can't invest that cash. Banks are currently required to keep 10% of \"\"deposited assets\"\" (the sum of all checking and savings accounts, but not CDs) in cash. This compounds the other problems with banks' investing; not only are they not getting a great return on your savings, they can only use 90% of your savings to get it.\"" }, { "docid": "161254", "title": "", "text": "Day trading is probably the most often tried and failed activity in the financial world. People think they can parlay $1,000 investment into $1,000,000 in a week with little or no knowledge on how to evaluate stocks and or companies. They think they can just look at where the line graphs' been and forecast where it's going to be next week. Unfortunately if it were that simple everyone would be making money hand over fist in the market. So in short, the reason day trading is considered a risky venture is because most of the people that attempt to do it are willfully ignorant. They intentionally choose not to read about day trading. They intentionally choose not to learn about how to read a company's financial report and they intentionally choose not to learn how to compare one stock to another. They also don't consider the fact that most of their data is 15 or more min old because of the shady rules brokers have worked into the system. Real everyday investors that make money in the market do it by careful evaluation of the purchase they are about to make. Guess what, even they lose time to time. That's the game!" }, { "docid": "223411", "title": "", "text": "To what end would you want to break the law? Why would you think it is beneficial to you in any way? The reason for these limitations is to protect people who have no financial reserves and are not sophisticated investors from making dangerous and risky investments with the little money they have to invest. You need to remember that there's no guarantee of principal with these loans and the rate of default is pretty high. From my own personal experience with Lending Club (and I've only invested in A and some B-rated loans) - rate of default is about 10%. This may be a nice exercise in microlending - but if you want to put all your savings into this, you're taking a huge risk. Risk which is completely unjustified since not only the returns are pretty low (again - from my aforementioned experience: <6% APR, you take higher rate loans - you get higher rate of defaults), but they're also taxed as ordinary gains. Why would you not, instead, invest in a more conservative bond or bond/stock mix fund which will pay you dividends that will get preferential tax treatment and appreciation would be subject to capital gains tax? No reason. And the limitation on who can invest in Lending Club is there for exactly this purpose - to weed out people like you who have no idea of what they're doing." }, { "docid": "453624", "title": "", "text": "\"Historically, Banks are mandated to take relatively safe risks with their money. In exchange, they gain a de-facto permission to invent new money. They have regulations about what mix of assets they are permitted to own. Real estate speculation will be in a different category than a mortgage to someone with good credit. Second, mortgages with a secured asset are pretty safe almost all of the time. That person might stop paying their mortgage, but it is secured; when that happens, the bank gets the secured asset (the right-to-apartment or house or what have you). In a sense, the bank loses only if both the person paying the mortgage is less creditworthy than they look, and the secured asset cannot recoup their losses. In comparison, the person paying the mortgage loses if the secured asset cannot recoup their losses. The bank is buffered from risk two fold. What more, the bank uses the customer to determine what to invest in. Deciding what to do with money is expensive and hard. By both having a customer willing to put their good credit on the line and doing due diligence on the apartment, the Bank in effect uses you as a consultant who decides this may be a solid investment. Much of the risk of failure is on you, so you have lots of incentive to make a good choice. If the Bank was instead deciding which apartment where worth buying, who would decide? A bank employee, whose bonus this year depends on finding a \"\"great apartment to invest in?\"\", but the consequence of a bad choice doesn't show up for many years? The people selling the bank the apartments? Such a business can exist. There are real estate companies that take money, and invest it in real estate. Often the borrow money from Banks secured against their existing real estate and use it to build more real estate. (Notice the bit about it being secured against existing real estate; things go south, Bank gets stuff). The Bank's indirect investment in that apartment in the current system is covered by appraisals, the seller, the mortgage holder, and the system deciding that the mortgage holder is creditworthy. Banks sell risk. They lend you money, you go off and do something risky with it, and they get a the low-risk return on investment of your loan. Multiple such low-risk investments provides them with a relatively dependable stream of money, which they give out to their bondholders, deposit account customers, shareholders or what have you. When you take a mortgage out for that, you are buying risk from the bank. You are more exposed to the failure of the investment than they are. They get less return if things go really well.\"" }, { "docid": "466835", "title": "", "text": "\"This is several questions wrapped together: How can I diplomatically see the company's financial information? How strong a claim does a stockholder or warrantholder have to see the company's financials? What information do I need to know about the company financials before deciding to buy in? I'll start with the easier second question (which is quasi implicit). Stockholders typically have inspection rights. For example, Delaware General Corporate Law § 220 gives stockholders the right to inspect and copy company financial information, subject to certain restrictions. Check the laws and corporate code of your company's state of incorporation to find the specific inspection right. If it is an LLC or partnership, then the operating agreement usually controls and there may be no inspection rights. If you have no corporate stock, then of course you have no statutory inspection rights. My (admittedly incomplete) understanding is that warrantholders generally have no inspection rights unless somehow contracted for. So if you vest as a corporate stockholder, it'll be your right to see the financials—which may make even a small purchase valuable to you as a continuing employee with the right to see the financials. Until then, this is probably a courtesy and not their obligation. The first question is not easy to answer, except to say that it's variable and highly personal for small companies. Some people interpret it as prying or accusatory, the implication being that the founders are either hiding something or that you need to examine really closely the mouth of their beautiful gift horse. Other people may be much cooler about the question, understanding that small companies are risky and you're being methodical. And in some smaller companies, they may believe giving you the expenses could make office life awkward. If you approach it professionally, directly, and briefly (do not over-explain yourself) with the responsible accountant or HR person (if any), then I imagine it should not be a problem for them to give some information. Conversely, you may feel comfortable enough to review a high-level summary sheet with a founder, or to find some other way of tactfully reviewing the right information. In any case, I would keep the request vague, simple, and direct, and see what information they show you. If your request is too specific, then you risk pushing them to show information A, which they refuse to do, but a vague request would've prompted them to show you information B. A too-specific request might get you information X when a vague request could have garnered XYZ. Vague requests are also less aggressive and may raise fewer objections. The third question is difficult to say. My personal understanding is some perspective of how venture capitalists look at the investment opportunity (you didn't say how new this startup is or what series/stage they are on, so I'll try to stay vague). The actual financials are less relevant for startups than they are for other investments because the situation will definitely change. Most venture capital firms like to look at the burn rate or amount of cash spent, usually at a monthly rate. A high burn rate relative to infusions of cash suggests the company is growing rapidly but may have a risk of toppling (i.e. failing before exit). Burn rate can change drastically during the early life of the startup. Of course burn rate needs the context of revenues and reserves (and latest valuation is helpful as a benchmark, but you may be able to calculate that from the restricted share offer made to you). High burn rate might not be bad, if the company is booming along towards a successful exit. You might also want to look at some sort of business plan or info sheet, rather than financials alone. You want to gauge the size of the market (most startups like to claim 9- or 10-figure markets, so even a few percentage points of market share will hit revenue into the 8-figures). You'll also have to have a sense for the business plan and model and whether it's a good investment or a ridiculous rehash (\"\"it's Twitter for dogs meets Match.com for Russian Orthodox singles!\"\"). In other words, appraise it like an investor or VC and figure out whether it's a prospect for decent return. Typical things like competition, customer acquisition costs, manufacturing costs are relevant depending on the type of business activity. Of course, I wouldn't ignore psychology (note that economists and finance people don't generally condone the following sort of emotional thinking). If you don't invest in the company and it goes big, you'll kick yourself. If it goes really big, other people will either assume you are rich or feel sad for you if you say you didn't get rich. If you invest but lose money, it may not be so painful as not investing and losing out the opportunity. So if you consider the emotional aspect of personal finance, it may be wise to invest at least a little, and hedge against \"\"woulda-shoulda\"\" syndrome. That's more like emotional advice than hard-nosed financial advice. So much of the answer really depends on your particular circumstances. Obviously you have other considerations like whether you can afford the investment, which will be on you to decide. And of course, the § 83(b) election is almost always recommended in these situations (which seems to be what you are saying) to convert ordinary income into capital gain. You may also need cash to pay any up-front taxes on the § 83(b) equity, depending on your circumstances.\"" }, { "docid": "470750", "title": "", "text": "Yeah but now imagine you're a third worlder and earn the average national salary. Suddenly such private clinics are not as easily available anymore. It's a decent option for westerners to go to let's say Eastern Europe to get lasik surgery. There it's pocket money compared to what the'd charge in Germany. But the people in Eastern Europe don't have that option. ninja edit: Not saying Eastern Europe is third world. It's a separate example." } ]