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What is the best source of funding to pay off debt? | First of all a big thumbs up for Ben's answer. A few small things you can do to help you on your way. Hopefully you are not more in debt that 6 months of salary in debt because that is a really tough road. first thing you need to do is get some professional help. The National Foundation for Credit Counseling (NFCC) offers free or low-cost debt counseling to help you through the process. Visit them at NFCC.org or call 1-800-388-2227 to find a local affiliate office near you. You might want to only use cash for a while. If not and you have a credit card with no balance always use that card because it will be interest free. Remember if you use credit cards as a payment system and not credit, you actually get free interest. If you roll even a penny over into the next statement you are paying interest day one of each purchase. Pay credit cards with highest interest rate first an pay minimums to others This one I like the best. As you get money pay your credit card. You interest is being compounded daily. Pay your cards when you have money, not when they are due. Have a mindset that reminds how much something is really going to cost you If you plan on taking 3 years to get out of debt and you buy something for $100 that is really costs you $156.08 Three years of compound 16% interest. 5b. Conversely if you sell something for $100 on eBay that is like selling something for $156.08. | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
How to decide if I should take my money with me or leave it invested in my home country? | I will attempt to answer three separate questions here: The standard answer is that an emergency fund should not be in an investment that can lose value. The safest course of action is to put it in a savings account or other very low risk investment somewhere. This question becomes: can a reasonable and low risk investment in Sweden be comparable to or better than a low risk investment in Brazil? Inflation in Brazil has averaged a little less than 6% over the last 10 years with a recent spike up above 8%. A cursory search indicates interest rates on savings accounts in Brazil are outpacing inflation so you might still expect a positive return on money in a savings account there. By contrast, Sweden's inflation rate has been around 1% over the last 10 years and has hovered around 0 or even deflation in recent years. Swedish interest rates for savings accounts right now are very low, nearly 0%. Putting money in a savings account in Sweden would likely hold its value or lose a slight amount of value. Based on this, you might be better off leaving your emergency fund invested in BRL in Brazil. The answer to this a little unclear. The Brazilian stock market has been all over the place in the last 10 years, with a slight downard trend in recent years. In comparison, Sweden's stock market has shown fairly consistent growth in spite of the big dip in 2008. Given this, it seems like the fairest comparison would your current 13% ROI investment in Brazil vs. a fund or ETF that tracks the Swedish stock market index. If we assume a consistent 13% ROI on your investment in Brazil and a consistent inflation rate of 6%, your adjusted ROI there would be around 7% per year. The XACT OMS30 ETF that tracks the Swedish OMS 30 Index has a 10 year annualized return of 9.81%. If you subtract 0.8% inflation, you get an adjusted ROI 9%. Based on this, Sweden may be a safer place for longer term, moderate risk investments right now. | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
If the co-signer on my car loan dies, can the family take the car from me like they're threatening to? | It looks to me like this is a 'call an attorney' situation, which is always a good idea in situations like this (family legal disputes). But, some information. First off, if your family is going to take the car, you certainly won't need to make payments on it any more at that point, in my opinion. If the will goes through probate (which is the only way they'd really be able to take it), the probate judge should either leave you with the car and the payments, or neither (presumably requiring the family to pay off the loan and settle your interest in the car). Since the car has negative net value, it seems unlikely that the probate judge would take the car away from you, but who knows. Either way, if they do take the car away from you, they'll be doing you a service: you have a $6,000 car that you owe $12,000 on. Let them, and walk away and buy another car for $6,000. Second, I'm not sure they would be allowed to in any event. See the Illinois DMV page on correcting titles in the case of a deceased owner; Illinois I believe is a joint tenancy state, meaning that once one owner dies, the other just gets the car (and the loan, though the loan documents would cover that). Unless you had an explicit agreement with your grandfather, anyway. From that page: Joint Ownership A title in the names of two or more persons is considered to be in joint tenancy. Upon the death of one of them, the surviving joint tenant(s) becomes the owner(s) of the vehicle by law. Third, your grandfather can fix all of this fairly easily by mentioning the disposition of the car and loan in his will, if he's still mentally competent and wishes to do so. If he transfers his ownership of the car to you in the will, it seems like that would be that (though again, it's not clear that the ownership wouldn't just be yours anyway). Finally, I am not a lawyer, and I am not your lawyer, so do not construe any of the text of this post as legal advice; contact a lawyer. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
Which banks have cash-deposit machines in Germany? | In my experience Sparkasse or VR Bank have them quite often. They stick out in my mind because when you make a withdrawal you have to reach in to get your money instead of it spitting it out. I'm always afraid its going to chop my hand off. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
Is there a free, online stock screener for UK stocks? | Although this is an old question, it's worth pointing out that the Google Stock Screener now supports stocks traded on the London Stock Exchange. From the country dropdown on the left, select "United Kingdom" and use the screener as before. | Share your insights or perspective on the financial matter presented in the input. |
Calculate price to earning and price to sale value for given dataset | Too calculate these values, information contained in the company's financial statements (income, balance, or cashflow) will be needed along with the price. Google finance does not maintain this information for BME. You will need to find another source for this information or analyze another another symbol's financial section (BAC for example). | Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering |
Single investment across multiple accounts… good, bad, indifferent? | One implication is the added fees if you are investing in something with a trading cost or commission, such as your stock purchase. If you pay low costs to trade (e.g. with a discount broker) and don't switch your investments often, then costs overall should remain reasonable .. but always be aware of your costs and seek to minimize them. | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
Consumer Loans vs Mortgages | I went here: Consumer Loan Law. It seems that a consumer loan is anything other than a business loan or mortgage. However, in California it seems to include a mortgage. It's a bit weird to see that a HEL can be considered a consumer loan even if it is the primary or the only loan on a property. Getting a HEL can be a great low cost way to (re)finance a property as they tend to have low or no closing costs and lower interest rates. | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
Which kind of investment seems feasible to have more cashflow every week or month? | Ignoring the wildly unreasonable goal, I'll answer just the Headline question asked. It's possible to choose dividend paying stocks so that you receive a dividend check each month. Dividends are typically paid quarterly, so 3 stocks chosen by quality first, but also for their dividend date will do this. To get $2000/mo or $24,000/yr would only take an investment of $600,000 in stocks that are yielding a 4% dividend. | Share your insights or perspective on the financial matter presented in the input. |
Rate of change of beta | This is (almost) a question in financial engineering. First I will note that a discussion of "the greeks" is well presented at https://en.wikipedia.org/wiki/Greeks_(finance) These measures are first, second and higher order derivatives (or rate of change comparisons) for information that is generally instantaneous. (Bear with me.) For example the most popular, Delta, compares prices of an option or other derived asset to the underlying asset price. The reason we are able to do all this cool analysis is because the the value of the underlying and derived assets have a direct, instantaneous relationship on each other. Because beta is calculated over a large period of time, and because each time slice covered contributes equally to the aggregate, then the "difference in Beta" would really just be showing two pieces of information: Summarizing those two pieces of information into "delta beta" would not be useful to me. For further discussion, please see http://www.gummy-stuff.org/beta.htm specifically look at the huge difference in calculation of GE's beta using end-of-month returns versus calculation using day-before-end-of-month returns. | Share your insights or perspective on the financial matter presented in the input. |
Buy tires and keep car for 12-36 months, or replace car now? | There are a few factors I like to consider when I'm reasoning financially over my households cars. How many KMs will the car travel each year because I like to factor in how often tires will need to be changed, how much tires for my models cost as well as how gas efficient they are. Knowing how much the car is driven and in what environmental/road conditions is also important factors to know because that will help guestimate possible repairs cost. Also possible taxes should be taken in to consideration. For example a few years ago I had a diesel Citroen C5 that had yearly taxes of roughly 500$. The replacement costs only 150$ a year in taxes. So switching cars 3 years early would have saved me 1050$ in taxes. So some information on possible taxes, how far you drive each year, what environmental conditions, type of driving (daily long rides or just short etc..) as well as the fuel efficiency of both cars would help to better calculate your costs for say three scenarios. Car change in 12, 24 and 32 months respectively. | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
Is there a candlestick pattern that guarantees any kind of future profit? | I did a historical analysis a few years back of all well-known candlestick patterns against my database of 5 years worth of 1-minute resolution data of all FTSE100 shares. There wasn't a single pattern that showed even a 1% gain with 60% reliability. Unfortunately I don't have spread data other than for a handful of days where I recorded live prices rather than minutely summaries, but my suspicion is that most of the time you wouldn't even earn back the spread on such a trade. | Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering |
What do Earnings Per Share tell potential shareholders? | nan | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
Is it a bet on price fluctuations and against the house? | The answer depends on the specific instrument to which you are referring. It is possible to make straight bets that are cash-settled and in which the underlying commodity or instrument will never be bought or sold. It is also possible to have such a contract be settled in the underlying (if the cash value is appropriate, then the cash settlement can be used to purchase the underlying directly, if necessary). Physical delivery was predominant until the last few decades. Most traders, as opposed to hedgers or strategics, are going to prefer cash-settled contracts as opposed to physical delivery. It is possible to make trades with a brokerage firm such that the firm pays if the trader wins the bet. The firm will typically find parties on the other side to even out this bet and leave itself neutral as to the outcome (plus a small premium it charges each side for the cost of making the market). The cost charged to one contracting party should be set by the dealer in relation to prices being charged to parties making the opposite, matching bet (in this way, brokers are following market price, while traders are setting it). Financially, options and contracts can be settled for cash or for the underlying, and they can be made directly with the opposite bettor or with a neutral dealer. | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
How do I get into investing in stocks? | The best way I know of is to join an investment club. They club will act like a mutual fund, investing in stocks researched and selected by the group. Taking part in research and presenting results to the group for peer review is an excellent way to learn. You'll learn what is a good reason to invest and what isn't. You'll probably pick both winners and losers. The goal of participation is education. Some people learn how to invest and continue happily doing so. Others learn how to invest in single stocks and learn it is not for them. | Share your insights or perspective on the financial matter presented in the input. |
How to calculate how much a large stock position is really worth? | Something like cost = a × avg_spreadb + c × volatilityd × (order_size/avg_volume)e. Different brokers have different formulas, and different trading patterns will have different coefficients. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
Do high interest rates lead to higher bond yields or lower? | It is important to distinguish between cause and effect as well as the supply (saving) versus demand (borrowing) side of money to understand the relationship between interest rates, bond yields, and inflation. What is mean by "interest rates" is usually based on the officially published rates determined by the central bank and is referenced to the overnight lending rate for meeting reserve requirements. In practice, what the means is, (for example) in the United States the Federal Reserve will have periodic meetings to determine whether to leave this rate alone or to raise or lower the rate. The new rate is generally determined by their assessment of current and forecast national and global economic conditions and factors in the votes of the various Regional Federal Reserve Presidents. If the Fed anticipates economic weakness they will tend to lower and keep rates lower, while when the economy seems to be overheated the tendency will be to raise rates. Bond yields are also based on the expectation of future economic conditions, but as determined by market participants. At times the market will actually "lead" the Fed in bidding bond prices up or down, while at other times it will react after the Fed does. However, ignoring the varying time lag the two generally will track each other because they are really the same thing. The only difference is the participants which are collectively determining what the rates/yields are. The inverse relationship between interest rates and inflation is the main reason for fluctuating rates in the first place. The Fed will tend to raise rates to try to slow inflation, and lower rates when it feels inflation is too low and economic growth should be stimulated. Likewise, when the economy is doing poorly there is both little inflationary pressure (driving interest rates down both in terms of what savers can accept to keep ahead of inflation and at) and depressed levels of borrowing (reduced demand for money, driving down rates to try to balance supply and demand), and the opposite is true when the economy is booming. Bond yields are thus positively correlated to inflation because during periods of high inflation savers won't want to invest in bonds that don't provide them with an acceptable inflation adjusted yield. But high interest rates tend to have the effect or reining in inflation because it gets more costly for borrowers and thus puts a damper on new economic activity. So to summarize, | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
Is it possible to trade CFD without leverage? | Generally not, however some brokers may allow it. My previous CFD Broker - CMC Markets, used to allow you to adjust the leverage from the maximum allowed for that stock (say 5%) to 100% of your own money before you place a trade. So obviously if you set it at 100% you pay no interest on holding open long positions overnight. If you can't find a broker that allows this (as I don't think there would be too many around), you can always trade within your account size. For example, if you have an account size of $20,000 then you only take out trades that have a face value up to the $20,000. When you become more experienced and confident you can increase this to 2 or 3 time your account size. Maybe, if you are just starting out, you should first open a virtual account to test your strategies out and get used to using leverage. You should put together a trading plan with position sizing and risk management before starting real trading, and you can test these in your virtual trading before putting real money on the table. Also, if you want to avoid leverage when first starting out, you could always start trading the underlying without any leverage, but you should still have a trading plan in place first. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
How to divide a mortgage and living area fairly? | In my opinion, since she will live in one apartment, as will you and your husband, the simplest method is to divide the ratio exactly the same as the area for your living space. If it's 40/60, she puts 40% down, you put 60%. And you split expenses the same. The tenant income can be applied to the house expenses, as it's no different than giving her 40% and you keep 60%. No matter how well you get along, it's easy for someone to feel a split of expenses isn't fair unless it's discussed and agreed up front. | Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering |
Is there any way to buy a new car directly from Toyota without going through a dealership? | No you can't buy direct from Toyota. Largely because of many states' laws (assuming you're in the US) requiring a dealer relationship for car purchasing, read about Tesla's struggles with direct to customer sales. Secondly because Toyota corporate simply isn't set up to sell a car directly to a customer. I know there are services that help people through the buying process. If you're finding Toyota dealerships to be this difficult you may consider just buying something from someone who wants to sell to you. If the buying process is this difficult imagine the service relationship. Edit: Additionally, it's important to remember when financing a car that there are essentially two transactions taking place. First you're negotiating the price of the car. Then you negotiate the price of the money (the interest rate). The money does not need to come from the dealership, you can secure your financing rate from a separate bank or local credit union. You should definitely pursue alternate financing if they're quoting you 7.99% with a FICO of 710. But don't tell the dealership you've already got your financing lined up until you're happy with the price of the car. | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
Official site to follow Warren Buffet's Berkshire Hathaway change in investment holdings? | Are you looking for this Warren Buffets Stock Portfolio? Or Berkshire Hathaway Portfolio WFC is near the bottom of the BH portfolio but it seems to be a rather large investment for both. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
How do you get out of a Mutual Fund in your 401(k)? | Most 401k plans (maybe even all 401k plans as a matter of law) allow the option of moving the money in your 401k account from one mutual fund to another (within the group of funds that are in the plan). So, you can exit from one fund and put all your 401k money (not just the new contributions) into another fund in the group if you like. Whether you can find a fund within that group that invests only in the companies that you approve of is another matter. As mhoran_psprep's answer points out, changing investments inside a 401k (ditto IRAs, 403b and 457 plans) is without tax consequence which is not the case when you sell one mutual fund and buy another in a non-retirement account. | Share your insights or perspective on the financial matter presented in the input. |
Where should I be investing my money? | Don't be too scared of investing in the market. It has ups and downs, but over the long haul you make money in it. You can't jump in and out, just consistently add money to investments that you 1) understand and 2) trust. When I say understand, what I mean is you can follow how the money is generated, either because a company sells products, a government promises to pay back the bond, or compounding interest makes sense. You don't need to worry about the day to day details, but if you don't understand how the money is made, it isn't transparent enough and a danger could be afoot. Here are some basic rules I try (!) to follow The biggest trick is to invest what you can, and do so consistently. You can build wealth by earning more and spending less. I personally find spending less a lot easier, but earning more is pretty easy with some simple investment tools. | Share your insights or perspective on the financial matter presented in the input. |
Contributing factors to historical increase in trading volume | It's not primarily more people investing. In the 1980s stock exchanges went from open outcry trading floors where all trades involved actually exchanging pieces of paper to electronic trading. Once that happened, it wasn't long before most trades were executed by computer programs rather than human beings, turning stocks over rapidly for very short-term profits rather than long-term investment, greatly increasing the number of trades (and also increasing liquidity for the actual investors; it's by no means all bad). | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
How should minor children be listed as IRA beneficiaries? | I would like to bring up some slightly different points than the ones raised in the excellent answers from JoeTaxpayer and littleadv. The estate can be the beneficiary of an IRA -- indeed, as has been pointed out, this is the default beneficiary if the owner does not specify a beneficiary -- but a testamentary trust cannot be the designated beneficiary of an IRA. A testamentary trust that meets the requirements laid out on page 36 of Publication 590 is essentially a pass-through entity that takes distributions from the IRA and passes them on to the beneficiaries. For the case being considered here of minor beneficiaries, the distributions from the IRA that pass through the trust must be sent to the legal guardians (or other custodians) of the minors' UTMA accounts, and said guardians must invest these sums for the benefit of the minors and hand the monies over when the minors reach adulthood. Minors are not responsible for their support, and so these monies cannot be used by the legal guardian for oaying the minors' living expenses except as provided for in the UTMA regulations. When the minors become adults, they get all the accumulated value on their UTMA accounts, and can start taking the RMDs personally after that, and blowing them on motorcycles if they wish. Thus, the advantage of the testamentary trust is essentially that it lets the trustee of the trust to decide how much money (over and above the RMD) gets distributed each year. The minors and soon-to-be young adults cannot take the entire IRA in a lump sum etc but must abide by the testamentary trustee's ideas of whether extra money (over and above the RMD) should be taken out in any given year. How much discretion is allowed to the trustee is also something to be thought through carefully. But at least the RMD must be taken from the IRA and distributed to the minors' UTMA accounts (or to the persons as they reach adulthood) each year. Regardless of whether the Traditional IRA goes to beneficiaries directly or through a testamentary trust, its value (as of the date of death) is still included in the estate, and estate tax might be due. However, beneficiaries can deduct the portion of estate tax paid by the estate from the income tax that they have to pay on the IRA withdrawals. Estate planning is very tricky business, and even lawyers very competent in estate and trust issues fall far short in their understanding of tax law, especially income tax law. | Share your insights or perspective on the financial matter presented in the input. |
Is there any reason not to put a 35% down payment on a car? | Do you guys think it's a good idea to put that much down on the car ? In my opinion, it depends on a lot of factors. If you have nothing to pay, and are not planning to invest in something that cost a lot soon (I.E an house, etc). Then I see no problem in put "that much down on the car". Remember that the more you pay at first, the less you will pay interest on. However, if you are planning on buying something big soon, then you might want to pay less and keep moneys for your future investment. I would honestly not finance a car with the garage as I find their interest rate to high. Possibilities depends a lot of your bank accounts, but what I would personally do is pay it cash using my credit margin with the bank which is only 2.8% interest rate. Garage where I live rarely finance under 7% interest rate. You may not have a credit margin, but maybe you could get a loan with the bank instead ? Many bank keep an history of your loan which will get you a better credit name when trying to buy an home later. On the other side, having a good credit name is not really useful in a garage. What interest rate is reasonable based on my credit score? I don't think it is possible to give a real answer to this as it change a lot around the world. However, I would recommend to simply compare with the interest rate asked when being loan by the bank. | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
Why government bonds fluctuate so much, even though interest rates don't change that often? | Long term gov't bonds fluctuate in price with a seemingly small interest rate fluctuation because many years of cash inflows are discounted at low rates. This phenomenon is dulled in a high interest rate environment. For example, just the principal repayment is worth ~1/3, P * 1/(1+4%)^30, what it will be in 30 years at 4% while an overnight loan paying an unrealistic 4% is worth essentially the same as the principal, P * 1/(1+4%)^(1/365). This is more profound in low interest rate economies because, taking the countries undergoing the present misfortune, one can see that their overnight interest rates are double US long term rates while their long term rates are nearly 10x as large as US long term rates. If there were much supply at the longer maturities which have been restrained by interest rates only manageable by the highly skilled or highly risky, a 4% increase on a 30% bond is only about a 20% decline in bond price while a 4% increase on a 4% bond is a 50% decrease. The easiest long term bond to manipulate quantitatively is the perpetuity where p is the price of the bond, i is the interest payment per some arbitrary period usually 1 year, and r is the interest rate paid per some arbitrary period usually 1 year. Since they are expressly linked, a price can be implied for a given interest rate and vice versa if the interest payment is known or assumed. At a 4% interest rate, the price is At 4.04%, the price is , a 1% increase in interest rates and a 0.8% decrease in price . Longer term bonds such as a 30 year or 20 year bond will not see as extreme price movements. The constant maturity 30 year treasury has fluctuated between 5% and 2.5% to ~3.75% now from before the Great Recession til now, so prices will have more or less doubled and then reduced because bond prices are inversely proportional to interest rates as generally shown above. At shorter maturities, this phenomenon is negligible because future cash inflows are being discounted by such a low amount. The one month bill rarely moves in price beyond the bid/ask spread during expansion but can be expected to collapse before a recession and rebound during. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
What is the preferred way to set up personal finances? | There's a lot of personal preference and personal circumstance that goes into these decisions. I think that for a person starting out, what's below is a good system. People with greater needs probably aren't reading this question looking for an answer. How many bank accounts should I have and what kinds, and how much (percentage-wise) of my income should I put into each one? You should probably have one checking account and one savings / money market account. If you're total savings are too low to avoid fees on two accounts, then just the checking account at the beginning. Keep the checking account balance high enough to cover your actual debits plus a little buffer. Put the rest in savings. Multiple bank accounts beyond the basics or using multiple banks can be appropriate for some people in some circumstances. Those people, for the most part, will have a specific reason for needing them and maybe enough experience at that point to know how many and where to get them. (Else they ask specific questions in the context of their situation.) I did see a comment about partners - If you're married / in long-term relationship, you might replicate the above for each side of the marriage / partnership. That's a personal decision between you and your partner that's more about your philosophy in the relationship then about finance specifically. Then from there, how do I portion them out into budgets and savings? I personally don't believe that there is any generic answer for this question. Others may post answers with their own rules of thumb. You need to budget based on a realistic assessment of your own income and necessary costs. Then if you have money some savings. Include a minimal level of entertainment in "necessary costs" because most people cannot work constantly. Beyond that minimal level, additional entertainment comes after necessary costs and basic savings. Savings should be tied to your long term goals in addition to you current constraints. Should I use credit cards for spending to reap benefits? No. Use credit cards for the convenience of them, if you want, but pay the full balance each month and don't overdo it. If you lack discipline on your spending, then you might consider avoiding credit cards completely. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
ETFs are a type of mutual fund, correct? | For a non-ETF mutual fund, you can only buy shares of the mutual fund from the mutual fund itself (at a price that the mutual fund will reveal only at the end of the day) and can only shares back to the mutual fund (again at a price that the mutual fund will reveal only at the end of the day). There is no open market in the sense that you cannot put in a bid to buy, say, 100 shares of VFINX at $217 per share through a brokerage, and if there is a seller willing to sell 100 shares of VFINX to you at $217, then the sale is consummated and you are now the proud owner of 100 shares of VFINX. The only buyer or seller of VFINX is the mutual find itself, and you tell it that you "want to buy 100 shares of VFINX and please take the money out of my checking account". If this order is entered before the markets close at 4 pm, the mutual fund determines its share price as of the end of the day, opens a new account for you and puts 100 shares of VFINX in it (or adds 100 shares of VFINX to your already existing pile of shares) and takes the purchase price out of your checking account via an ACH transfer. Similarly for redeeming/selling shares of VFINX that you own (and these are held in an account at the mutual fund itself, not by your brokerage): you tell the mutual fund to that you "wish to redeem 100 shares and please send the proceeds to my bank account" and the mutual fund does this at the end of the day, and the money appears in your bank account via ACH transfer two or three days later. Generally, these transactions do not need to be for round lots of multiples of 100 shares for efficiency; most mutual fund will gladly sell you fractional shares down to a thousandth of a share. In contrast, shares of an exchange-traded fund (ETF) are just like stock shares in that they can be bought and sold on the open market and your broker will charge you fees for buying and selling them. Selling fractional shares on the open market is generally not possible, and trading in round lots is less expensive. Also, trades occur at all times of the stock exchange day, not just at the end of the day as with non-ETF funds, and the price can fluctuate during the day too. Many non-ETF mutual funds have an ETF equivalent: VOO is the symbol for Vanguard's S&P 500 Index ETF while VFINX is the non-ETF version of the same index fund. Read more about the differences between ETFs and mutual funds, for example, here. | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
Overseas Foreign Earned Income; Can I take the Home Office Deduction for a home office based outside the United States? | You are pushing your luck, but not because you're not in the US, because it is likely that you're not qualified. From what you said, I doubt you can take it (I'm not a professional though, get a professional opinion). You say "dedicated space". It has to be an exclusive room. You cannot deduct 10 sq. ft. from your living room because your computer that is used wholly for your business is there. It has to be a room that is used exclusively for your business, and for your business only. I.e.: nothing not related to the business is there, and when you're there the only thing you do is working on your business. Your office doesn't have to be in the US necessarily, to the best of my knowledge. Your office must be in your home. If you take primary residence exclusion as part of your FEI, then I doubt you can deduct as well. | Share your insights or perspective on the financial matter presented in the input. |
What does it mean for a company to have its market cap larger than the market size? | You are comparing two things that are not comparable. The "market size" would be the total annual revenue in one market, in this year. The "market caps" of a company is the number of shares multiplied by the share price. This should be equal to the total profit that the company is going to make through its life time, taking into account that you would get interest on an investment, so future profits have to be counted less accordingly. So if the "market size" is ten million dollars, and a company has four million revenue in that market with one million profit, and everyone thinks that company will continue making that profit for the next fifty years, then surely one million a year for the next 50 years is worth more than ten million. That's if the market stands still. If the "market size" is ten million, and we expect that market size to double for the next three years, then the market size is still ten million, but a company having a 40% share of a market growing at that speed is going to be worth a lot more! | Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering |
If a country can just print money, is global debt between countries real? | The main driver behind countries not printing themselves out of debt is the fact that it will cripple the economy, destroy citizens savings, asset valuations and piss all the countries trade partners off so much that they may stop doing business with them. You will have a few different extremes, look at Zimbabwe as an example of a country that just prints money like no ones business. America is essentially devaluing its currency to compete with China. That annoys the Chinese because their holdings are devalued and as such you then see people moving away from US treasuries into more stable commodities and currencies. | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
What US taxes are due for US stock bought via ESPP when I was in USA and sold after I returned to India? | From an Indian Tax point of view, you can bring back all the assets acquired during the period you were NRI back to India tax free. Subject to a 7 years period. i.e. all the assets / funds / etc should be brought back to India within 7 years. It would still be treated as There are certain conditions / paperwork. Please consult a CA. | Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering |
What does the -V indicate on MKC ticker | MKC is non-voting stock, MKC/V is voting stock. Ofter times you'll see two or more stock symbols for a company. These usually reflect different classes of stocks. For example, voting vs. non-voting (as in this case) or preferred vs non-preferred stock. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
Why are credit cards preferred in the US? | Your question is based on a false premise. Debit cards are more popular in the US than credit cards are. Indeed it seems to be the non-US part of the world that is big in credit cards. See here for example | Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering |
Where can I open a Bank Account in Canadian dollars in the US? | Canada, like other second-rate economies with weak currencies, provides USD accounts. It is not the same vice versa. It is rare to find a direct deposit foreign currency account in the US as it is the world-leading currency. | Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering |
Where can I open a Bank Account in Canadian dollars in the US? | Everbank has offered accounts in foreign currencies for a while. https://www.everbank.com/currencies Takes a while to get it setup; and moving cash in and out is via wire transfer. Also you need to park $5K in USD in a money market account; which you use as a transfer point. | Share your insights or perspective on the financial matter presented in the input. |
Gift card fraud: To whom to report? How to recover funds? Is the party which issued me the card liable? | Citibank just sent me a $100 check. Here's how I got it: | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
Finding a good small business CPA? | Look for an accountant who brings not only expertise in number crunching, but consulting and business planning - a full package. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
How are they earning money in the movie “Trading Places”? | Sell 200 at 142. What does that mean? I haven't seen the movie, so I won't try to put anything in story context. "Sell 200 at 142" means to sell 200 units (usually shares, but in this case it would likely be gallons or barrels of orange juice or pounds or tons of frozen juice). In general, this could mean that you have 200 units and want to sell what you have. Or you could borrow 200 units from someone and sell those--this is called a naked short. In this case, it seems that what they are selling is a futures contract. With a futures contract, you are promising to obtain orange juice by some future date and sell it for the agreed price. You could own an orange grove and plan to turn your oranges into juice. Or you could buy a futures contract of oranges to turn into juice. Or you could arbitrage two futures contracts such that one supplies the other, what they're doing here. In general people make profits by buying low and selling high. In this case they did so in reverse order. They took the risk of selling before they had a supply. Then they covered their position by purchasing the supply. They profited because the price at which they bought was lower than the price at which they sold. The reason why this is necessary is that before buying the oranges, the orange juice makers need to know that they can make a profit. So they sell orange juice on the futures market. Then they know how much they can afford to pay for oranges on a different market. And the growers know how much they can get for oranges, so they can pay people to water and pick them. Without the futures markets, growers and orange juice makers would have to take all the risk themselves. This way, they can share risks with each other and financiers. Combined with insurance, this allows for predictable finances. Without it, growers would have to be wealthy to afford the variation in crop yields and prices. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
Can someone help me understand my student loans? | If you want to pay them off as quickly as possible, pay the minimum payment on the larger two and dump as much as you can into the one with the 8.75% interest. Then, even though it has a slightly lower interest rate, I would attack the one with the next smallest balance after that, while continuing to make the minimum payment on the one with the largest balance. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
If I have AD&D through my employer, should I STILL purchase term life insurance? | I think that mbhunter hit the nail on the head regarding your question. I just want to add that having a policy that isn't sponsored by your employer is a good idea... employer policies are regulated by the federal government via ERISA. Independent policies are state regulated, and usually have better protections. Also, look for a policy that allows you to increase your coverage later without medical qualification so you don't need to overbuy insurance initially. | Share your insights or perspective on the financial matter presented in the input. |
Claiming business expense from personal credit card | There is no law that requires you to have a separate bank account for your business, or to pay all expenses from a business bank account. It is a GOOD IDEA to have a separate bank account and pay all business expenses from that account and all personal expenses from your personal account, because that makes sorting out what is what much simpler, both in case of an audit and for your own accounting. Whether a particular expenditure is a deductible business expense has nothing to do with what account you pay it from. If you pay advertising expenses for your business from your personal account, that's still (almost certainly) a deductible business expense. If you buy groceries from your business account, that's almost certainly not a deductible business expense. In your case, there are all kinds of rules about when and how much travel is deductible. | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
60% Downpayment on house? | Strictly by the numbers, putting more than 20% down is a losing proposition. With interest rates still near all time lows, you're likely able to get a mortgage for less than 4%. The real rate of a return on the market (subtracting inflation and taxes) is going to be somewhere around 5-6%. So by this math, you'd be best off paying the minimum to get out of PMI, and then investing the remainder in a low fee index fund. The question becomes how much that 1-2% is worth to you vs how much the job flexibility is worth. It boils down to your personal risk preference, life conditions, etc. so it is difficult to give good advice. The 1-2% difference in your rate of return is not going to be catastrophic. Personally, I would run the numbers with your fiance. Build a spreadsheet tracking your estimated net worth under the assumption that you make a 20% down payment and invest the rest. Then hold all other factors equal, and re-build the spreadsheet with the higher down payment. Factor in one of you losing your job for a few years, or one of you taking off for a while to raise the kids. You can make a judgement call based how the two of you feel about those numbers. | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
How to split stock earnings? | Let's suppose your friend gave your $100 and you invested all of it (plus your own money, $500) into one stock. Therefore, the total investment becomes $100 + $500 = $600. After few months, when you want to sell the stock or give back the money to your friend, check the percentage of profit/loss. So, let's assume you get 10% return on total investment of $600. Now, you have two choices. Either you exit the stock entirely, OR you just sell his portion. If you want to exit, sell everything and go home with $600 + 10% of 600 = $660. Out of $660, give you friend his initial capital + 10% of initial capital. Therefore, your friend will get $100 + 10% of $100 = $110. If you choose the later, to sell his portion, then you'll need to work everything opposite. Take his initial capital and add 10% of initial capital to it; which is $100 + 10% of $100 = $110. Sell the stocks that would be worth equivalent to that money and that's it. Similarly, you can apply the same logic if you broke his $100 into parts. Do the maths. | Share your insights or perspective on the financial matter presented in the input. |
If there's no volume discount, does buying in bulk still make sense? | It could be a sunk cost. If you buy 5 gallons of vegetable oil it costs $50. Until you use up all the vegetable oil you dollars are tied up and cannot be spent on popcorn or any other good. So weigh if the convenience is more important than having the cash on hand for other purchases is another factor to consider | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
Some stock's prices don't fluctuate widely - Is it an advantages? | Oracle specifically is paying a dividend with a current yield of about 1.4% annually and has appreciated nearly 50% over the last 5 years. Granted, the past doesn't guarantee the future but the company has paid a pretty steady dividend since 2009. If you're buying as part of an employee program you would presumably be holding the shares for a long time and the daily and even monthly movements aren't terribly relevant to a long term holding period. Additionally, you may be able to buy the shares at a discount to the market price as part of your employee program. You probably also won't pay any transaction fee. | Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering |
How can I tell what is “real” Motley Fool advice? | These advertisements try to take advantage of the short term memory loss of older people. If you keep an old person watching long enough they will forget why they started watching in the first place. Yet they trust themselves and assume that it was for a good reason. So the long winded salespitch succeeds with older people who tend to have more money to invest anyway. Yes, I think that Motley Fool has jumped the shark. | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
What exactly is a “bad,” “standard,” or “good” annual raise? If I am told a hard percentage and don't get it, should I look elsewhere? | There are many variables to this answer. One is, how close are you to the average salary range in the industry you are working in. If you are making more than average it would make sense that you are not getting a big raise from the employer's perspective. You have to be a top performer if you are looking for the top salary range. Big raises come from promotions or new jobs, generally speaking. The short and personal answer is, I worked at a big company (bank) and now know that companies do not give large raises to people as a rule. Honestly the only way to make good $ is to leave, all employers have all kinds of excuses as to why they are not giving you significant raises. Large raises and bonuses are reserved for "management". The bigger the company, the less likely it is that they will give you raises just because, esp. above 3-5%. At the same time, the market sets the rate, and if you are not getting passively recruited, it may mean that you need to work on getting a broader skill set if you are looking to make more $ somewhere else. The bottom line is, you have to think of yourself as a free agent at all times. You also need to make yourself more attractive as a potential hire elsewhere. | Share your insights or perspective on the financial matter presented in the input. |
Where to park money while saving for a car | As you're saving up for an expenditure instead of investing for the long run, I would stay away from any sort of "parking facility" where you run the risk of not having the principal protected. The riskier investments that would potentially generate a bigger return also carry a bigger downside, ie you might not be able to get the money back that you put in. I'd shop around for a CD or a MMA/regular savings account with a half-decent interest rate. And yes, I'm aware that the return you might get is probably still less than inflation. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
How to maximize small business 401k contribution? | My understanding is that to make the $18,000 elective deferral in this case, you need to pay yourself at least $18,000. There will be some tax on that for social security and Medicare, so you'll actually need to pay yourself a bit more to cover that too. The employer contribution is limited to 25% of your total compensation. The $18,000 above counts, but if you want to max out on the employer side, you'll need to pay yourself $140,000 salary since 25% of $140,000 is the $35,000 that you want to put into the 401k from the employer side. There are some examples from the IRS here that may help: https://www.irs.gov/retirement-plans/one-participant-401-k-plans I know that you're not a one-participant plan, but some of the examples may help anyway since they are not all specific to one-participant plans. | Share your insights or perspective on the financial matter presented in the input. |
Where are all those unsold vehicles? | When the 2016 models come out, the dealership marks down the 2015 model and then it sells pretty fast. The process doesn't take that long in the car market because the 2015 models are just as good as the 2016 so if they are just a little cheaper, they will sell quickly. If you want a 2008 Audi that has never sold, you are going to be looking for a long time. The same thing happens in every industry. Where are the older versions of digital cameras? Cell phones? Blenders? Digital pianos? Any item that changes from year to year sits on shelves for a little while after its replacement comes out until the retailer reduces its price by enough and it sells. The only exceptions are goods that depreciate very quickly or go bad, which are recycled or thrown away (like fresh produce, for example). It seems kind of crazy at first that essentially all goods that are produced by the economy are consumed, but that's the magic of capitalism: prices make markets clear. | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
How can I save LLC fees when investing in Arizona real estate from California | You won't be able to avoid the $800 fee. CA FTB has a very specific example, which is identical to your situation (except that they use NV instead of AZ), to show that the LLC has liability in California. State of formation is of no matter, you'll just be liable for fees in that state in addition to the CA fees. This is in fact a very common situation (that's why they have this as an example to begin with). See CA FTB 568 booklet. The example is on page 14. I suggest forming the LLC in AZ/CA and registering it as a foreign entity in the other state (AZ if formed in CA, the better option IMHO, or CA if formed in AZ). You'll have tax liability in both the states, AZ taxes can be credited towards the CA taxes. Instead of forming LLC, you can cover your potential liability with sufficient insurance coverage. | Share your insights or perspective on the financial matter presented in the input. |
Oversimplify it for me: the correct order of investing | Organize your expenses in order of the rate of return, and pay them in that order. By far the highest rate of return on your list is: Nowhere else are you going to see an immediate 100% return (or 50%, depending on the company's matching policy) on every dollar you allocate to this pot. Second would probably be: Money that you do not allocate here will usually incur a 15%-29% penalty. Outside of large expenses like a home, education, or a reasonable car, you never want to pay to use your own money (and borrowed money is still yours, remember that someday you have to pay all of it back). Avoiding a negative rate of return (interest) can be just as beneficial as finding a high positive rate of return on an investment. Continue down the list determining what must be paid first, and what the highest rates are in the immediate future and the long run. Meanwhile, live within your means, and set aside a portion of your monthly income towards things like a rainy day fund (up to a level which is not touched when reached). Additional savings through work or your personal investments should not be neglected (money saved early and compounded is worth many times what a dollar saved down the road will gain) especially if you are young in your career. | Share your insights or perspective on the financial matter presented in the input. |
Is it better to buy put options or buy an inverse leveraged ETF? | You don't have to think it is going down, it is currently trending down as on a weekly chart there are lower lows and lower highs. Until there is a higher low with confirmation of a higher high, the downtrend will continue. The instrument you use to profit from a market drop depends on your risk profile, the time frame you are looking at, and your trading plan and risk management. With a put option your loss is limited to your initial premium and your potential profits can be quite large compared to the premium paid, however your timeframe is limited to the expiry of the option. You could buy a longer dated option but this will cost more in the premium you pay. With inverse ETF you are not restricted by an expiry date, but if you don't have appropriate risk management in place your potential losses can be large. With a leveraged inverse ETF again you are not restricted by an expiry date, you can potentially make higher percentage profits than with an standard ETF. but once again your losses can be very large (larger than you initial investment) if you don't have appropriate risk management in place. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
What purchases, not counting real estate, will help me increase my cash flow? | Mutual funds can be relatively low risk and a good starting point. Really it depends on you. What are your goals? This is a pretty open ended question. These can all be low risk and provide some return. Note "Less Knowledge" is never a good qualifier for an investment. Your money is your business and you are entitled to know what your business is up to. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
How often do typical investors really lose money? | The earlier answers answered the question on how a more practical trader can lose money. Here I'd like to mention some obtuse ways Using debt to buy stocks. If one is borrowing at a higher rate than they are getting back, from an economics prospective their stocks are losing money even if the value of those stocks are going up. Using debt to buy stocks. I'll simplify the nightmare situation. I know someone who has Y dollars of cash. Their broker will loan them X. With their X+Y money, they purchase some equities through the broker. The agreement of the loan is that if the value of those equities drops below a certain percentage of the outstanding debt (ex 150%), the broker will automatically and without notification, sell some equities indiscriminately to reduce the outstanding debt. Being in high-interest debt but buying stocks. There are millions of people who are paying 15+% interest rates on consumer debt while investing and getting 5% returns or less on average. Similar to an earlier point, from an economics prospective the choice to buy equities is a profit losing choice. | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
Are tax deductions voluntary? | What kind of "deductions" are you talking about? Many deductions, like the standard/itemized deductions, come after the AGI, and do not affect the AGI, so I don't see how this would make any difference. Maybe you are talking about deductions that come before the AGI? If you want to increase your AGI legitimately, here's a way: Every year, itemize deductions on your federal return, and over-withhold your state income tax (assuming your state has income tax) by a lot, and/or make voluntary extra payments to your state income tax. As a result, you will get a huge refund on your state taxes the following year. Then you will need to include this refund as income on line 10 of the federal return that year, which will be included in the AGI. (Of course, you will also be able to deduct a lot of state income tax paid every year in the federal itemized deductions, but those come after the AGI.) | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
Standard Deviation with Asset Prices? | You can use google docs to create a spreadsheet. In field A2, I put Google will load the prices into the sheet. At that point, I add the following into C12, then copy that line all the way down to the botton of column C. You can find my spreadsheet here. It calculates the moving 10 day standard deviation as a percentage of average price for that time period. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
When does giving a gift “count” for tax year? | Based on past case law, a check made payable to qualified charity and delivered (e.g., placed in the mail on 12/31 would count as delivered as it is out of the hands of the donor) would fall under the "constructive receipt doctrine". However, for non-charitable gifts (e.g., gifts to family members) it is the date the check is cashed (honored by the receiving bank). This is important as the annual gift exclusion is just that "Annual". Therefore, if I gift my child $14,000 by writing a check on 12/31/2014 but they deposit it on 1/3/2015 then I have used my annual gift exclusion for 2015 and not 2014. This means I could not gift them anything further in 2015. BTW the annual gift amount is for ALL gifts cash and non-cash. Most people don't seem to realize this. If I give $14,000 of cash to my child and then also give them Christmas gifts with a value of $1,000 I have exceeded my annual gift exclusion to that child. Usually there are ways around this issue as I can give $14,000 to each and every person I want and if married my spouse can do the same. This allows us to give $14,000 from each of us to each child plus $14,000 from each of us to their spouse if married and $14,000 from each of us to each of their children if they have any. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
Is it better to buy a computer on my credit card, or on credit from the computer store? | you should pay cash. always pay cash or debit card. never use credits unless absolutely required. if you so poor that you need credit card you must reduce your costs! don't buy anything except food, start making money, then you will buy everything! and you should buy cheapest food now | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
How to increase my credit score | Get a credit card is NOT the answer. The reason people have a bad (or no) credit score is often because they're new to the country, have just turned 18, have previously fallen into arrears or are just bad with money. Getting a credit card is risky because, if you don't stay on top of your payments, it'll just damage your score even more. Now, it sounds like I hate credit cards - but I don't, and they do have their benefits. But avoid them if possible because they can be more hassle than they're worth (ie, paying the credit back on-time, cancelling accounts when the interest comes in, moving money in and out of accounts). It's risky borrowing money from anywhere whether it's a payday lender, a bank, a credit card, etc., so use them as a last resort. If you've got your own income then that's amazing!, try not to live outside of your means and your credit score will look after (and increase) itself. It takes time to build a good credit score, but always make sure you pay the people you owe on time and the full amount. I'd stick with paying your phone provider (and any other direct debits you have setup) and avoid getting a credit card. I'd recommend Noddle to keep track of your credit score and read their FAQ on how to help build it. Unlike Experian, it's free forever so not quite as detailed... but Noddle are owned by CallCredit - one of the biggest Credit Reference Agencies in the UK so they should have the latest information on yourself. In conclusion, if you already have financial commitments like a mobile phone bill, gym membership, store cards, anything that gets paid monthly by direct debit... your credit score will increase (provided you pay the full-amount on time). I hope this helps. PS. I don't work for any of the companies here, but I've been working in the finance sector (more specifically, short-term loans) for 3+ years now. | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
Should I avoid credit card use to improve our debt-to-income ratio? | For scoring purposes, having a DTI between 1-19% is ideal. From Credit Karma: That being said, depending on the loan type you looking at receiving (FHA, VA, Conventional, etc), there are certain max DTIs that you want to stay away from. As a rule, for VA, you want to try to stay away from 41% DTI. Exceptions are made for people with sufficient funds in the bank (3-9 months) to go to higher DTIs. If you keep a 19% utilization overall, that will get you a higher score but it will also show that you have a monthly payment on a particular revolving credit account. While the difference between 729 and 745 seems like a lot of points, there are rules as to how the interest rates are determined. So you will find that many banks have the same or similar rates due to recent legislation in Dodd-Frank. In the days of subprime mortgages, this was not the case. Adjustable rate mortgages did not necessarily go away, the servicer just has to make sure that the buyer can weather the full amount once it reaches maturity, not the lower amount. That is what got a lot of people in trouble. From "how interest rates are set": Before quoting you an interest rate, the loan officer will add on how much he and his branch want to earn. The branch or company sets a policy on how little that can be (the minimum amount the loan officer adds on to his cost) but does not want to overcharge borrowers either (so they set a maximum the loan officer can charge) Between that minimum and maximum, the loan officer has a great deal of flexibility. For example, say the loan officer decides he and his branch are going to earn one point. When you call and ask for a rate quote, he will add one point to the cost of the loan and quote you that rate. According to the rate sheet above, seven percent will cost you zero points. Six and three-quarters percent will cost you one point. In our example, at 7.125% the loan officer and branch would earn one point and have some money left over. This could be used to pay some of the fees (processing, documents, etc), which is how you get a "no fees -no points" mortgage. You just pay a higher interest rate. Where this scoring helps you is in credit card interest rates and auto loan and personal loan rates, which have different rate structures. My personal opinion is to avoid the use of the credit cards. Playing games to try to maximize your score in this situation won't help you when you are talking about 20 points potentially. If you were at the bottom level and were trying to meet a minimum score to qualify, then I would recommend you try to game this scoring system. Take the extra money you would put on a credit card and save it for housing expenses. Taking the Dave Ramsey approach, you should have at least $1000 in emergency funds as most problems you encounter will be less than $1000. That advice rings true. | Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering |
Effect of Job Change on In-Progress Mortgage Application | I recommend you ask this question to a qualified mortgage broker. We just closed on our first house. My wife & I have had several years of stable jobs, good credit scores, and a small side business with 1040 Schedule-C income... and we were surprised by the overwhelming amount of documentation we needed for the loan. For example, we had 3 checks deposited to our bank account for $37.95. We had to provide copies of the checks, deposit slip and a letter explaining the deposit. One reason we might have had so much trouble: the mortgage broker we selected sold our loan to a very picky lender. On the plus side, we obtained a competitive rate with extremely low closing costs on a 30 year fixed mortgage. However, I can't imagine the headaches we would've incurred if one of us were changing jobs to 1099 income. | Share your insights or perspective on the financial matter presented in the input. |
Why could rental costs for apartments/houses rise while buying prices can go up and down? | They are two different animals. When you rent you are purchasing a service. The landlord, as your service provider, has to make a profit, pay employees to do maintenance, and buy materials. The price of these things will increase with inflation, and that rolls into your rent price. Taxes also are passed to the tenant, and those tend to only go upward. Market forces of supply/demand will drive fluctuation of prices as well, as other posts have described. When you buy, you are purchasing just the asset - the home. This price will also be driven by supply/demand in the market, but don't try to compare it to buying a service. Cheers! | Share your insights or perspective on the financial matter presented in the input. |
Additional credit card with different limit on same account? | Generally not. Since authorized user cards are the same account and the difference between the two (the original and the AU card) are minimal. Note, there's nothing technically stopping banks from offering this as a feature, two cards do have identifiers that indicate they're separate cards, but the banks concern for your needs stops at how much they can bleed from you, and "helping you control your spending" is not part of that. | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
Is candlestick charting an effective trading tool in timing the markets? | From my 15 years of experience, no technical indicator actually ever works. Those teaching technical indicators are either mostly brokers or broker promoted so called technical analysts. And what you really lose in disciplined trading over longer period is the taxes and brokerages. That is why you will see that teachers involved in this field are mostly technical analysts because they can never make money in real markets and believe that they did not adhere to rules or it was an exception case and they are not ready to accept facts. The graph given above for coin flip is really very interesting and proves that every trade you enter has 50% probability of win and lose. Now when you remove the brokerage and taxes from win side of your game, you will always lose. That is why the Warren Buffets of the world are never technical analysts. In fact, they buy when all technical analysts fails. Holding a stock may give pain over longer period but still that is only way to really earn. Diversification is a good friend of all bulls. Another friend of bull is the fact that you can lose 100% but gain any much as 1000%. So if one can work in his limits and keep investing, he can surely make money. So, if you have to invest 100 grand in 10 stocks, but 10 grand in each and then one of the stocks will multiply 10 times in long term to take out cost and others will give profit too... 1-2 stocks will fail totally, 2-3 will remain there where they were, 2-3 will double and 2-3 will multiply 3-4 times. Investor can get approx 15% CAGR earning from stock markets... Cheers !!! | Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering |
Looking for a good source for Financial Statements | You can access financial statements contained within 10K and 10Q filings using Last10K.com's mobile app: Last10K.com/mobile Disclosure: I work for Last10K.com | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
Is gold subject to inflation? [duplicate] | Gold is a risky and volatile investment. If you want an investment that's inflation-proof, you should buy index-linked government bonds in the currency that you plan to be spending the money in, assuming that government controls its own currency and has a good credit rating. | Share your insights or perspective on the financial matter presented in the input. |
How should I begin investing real money as a student? | I started my account with $500 so I know where you're coming from. For the words of caution, in about 2009 we entered a pretty significant bull market. During this period you could basically buy almost any big name company and do pretty well for yourself. So don't be too cocky about your ability to pick winners in the middle of a bull market. Over the last few years you'd have to try pretty hard to consistently pick losers. I absolutely think you should put real money in the game when you have this sort of interest. However, at your $400-600 level broker fees will eat any sort of active trading or short term profit you could muster. Stock trading is not a great way to make money in the short term. If you're looking to save for something specific you should put that money in a zero risk savings account. You should do more research on brokers. Find the lowest possible trade commission at an organization where you can meet the account opening minimum. A $10 commission is 11% more than a $9 commission. | Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering |
Are there cons to paying monthly bills with a rewards card and then paying it off monthly? | Some accounts, such as my electric, and payments to the tax collector charge a significant enough fee that is counter productive to use a rewards card. One example of this is Alligent Air. They give you a $6 discount if you pay with a debit card which was about 5% of the ticket price. Anytime you borrow money, even as well intentioned and thought out as you plan to do so, you are increasing risk. By managing it carefully you can certainly mitigate it. The question becomes, does that time spent in management worth the $600/year? I did the costco amex deal for about 12 years earning about $300-$400 per year and only once getting hit with a late/finance charge. Despite the success, I opted to end this for a few different reasons. First off people using credit tend to spend more. Secondly, I felt it was not worth my time in management. Thirdly, I did not want the risk. Despite the boasts of many, the reality is that few people actually pay off their card each month. By your post, it seems to me that you will be one of the rare few. However, if you are expending 5K per month, your income must be above the US national average. Is $600 really worth it? Perhaps budgeting for Christmas would be a better option. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
Option Trading / Demo Account | How would this trade behave IRL? I don't know how the simulation handles limit orders and bid/ask spreads to know it's feasible, but buying at 4.04 when the current ask is 8.00 seems unlikely. That would mean that all other sell orders between 8.00 and 4.04 were fulfilled, which means that there were very few sellers or that sell pressure spiked, both of which seem unlikely. In reality, it seems more likely that your order would have sat there until the ask dropped to $4.04 (if it ever did), and then you'd have to wait until the bid rose to $7.89 in order to sell them at that price. However, that kind of swing in option prices in not unrealistic. Options near at-the-money tend to move in price at about 50% of the change in the underlying, so if amazon suddenly dropped by $5, the option price could drop by $2.60 (from 6.66 to $4.04), and then rise back to $7.89 if the price rose $8 (which would be 1% swing and not unheard of intra-day). But it sounds like you got very lucky (or the simulation doesn't handle option trading realistically) - I've traded options in the past and have had some breaks similar to yours. I've also had bad breaks where I lost my entire investment (the options expire out-of-the money). So it should be a very limited part of your portfolio, and probably only used for risk management (e.g. buying put options to lock in some gains but keeping some upside potential). | Share your insights or perspective on the financial matter presented in the input. |
Can PayPal transfer money automatically from my bank account if I link it in PayPal? | I linked my bank account (by making a transfer from bank account to Paypal) without linking a card. This should not give Paypal any rights to do anything with my bank account - transfer that I made to link it was exactly the same as any other outgoing transfer from my bank account. On attempting to pay more that resides in my Paypal balance I get To pay for this purchase right now, link a debit or credit card to your PayPal account. message. Paypal is not mentioning it but one may also transfer money to Paypal account form bank to solve this problem. Note, that one may give allow Paypal to access bank account - maybe linking a card will allow this? Paypal encourages linking card but without any description of consequences so I never checked this. It is also possible that Paypal gained access to your bank balance in other way - for example in Poland it just asked for logins and passwords to bank accounts (yes, using "Add money instantly using Trustly" in Poland really requires sharing full login credentials to bank account - what among other things breaks typical bank contract) source for "Paypal attempts phishing": https://niebezpiecznik.pl/post/uwaga-uzytkownicy-paypala-nie-korzystajcie-z-najnowszej-funkcji-tego-serwisu/ | Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering |
Resources to begin trading from home? | Your plan won't work. Working 40 hours a week at federal minimum wage (currently $7.25 / hr) for 52 weeks is an annual income of just over $15,000. Even assuming you can reliably get a return of 15% (which you definitely can't), you'd need to start with $100,000 of assets to earn this poverty income. Assuming a more reasonable 7% bumps the required assets up to over $200,000, and even then you're dead the first time you need to make withdrawals after a mistake or after a major market downturn. As a fellow math Ph.D. student, I know your pain. I, too, struggled for a while with boredom in an earlier career, but it's possible to make it work. I think the secret is to find a job that's engaging enough that your mind can't wander too much at work, and set aside some hobby time to work on interesting projects. You likely have some marketable skills that can work for you outside of academia, if you look for them, to allow you to find an interesting job. I think there's not much you can do besides trying not to get fired from your next McJob until you can find something more interesting. There's no magic money-for-nothing in the stock market. | Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering |
Starting an investment portfolio with Rs 5,000/- | Given that you are starting with a relatively small amount, you want a decent interest rate, and you want flexibility, I would consider fixed deposit laddering strategy. Let's say you have ₹15,000 to start with. Split this in to three components: Purchase all of the above at the same time. 30 days later, you will have the first FD mature. If you need this money, you use it. If you don't need it, purchase another 90-day fixed deposit. If you keep going this way, you will have a deposit mature every 30 days and can choose to use it or renew the fixed deposit. This strategy has some disadvantages to consider: As for interest rates, the length of the fixed deposit in positively related to the interest rate. If you want higher interest rates, elect for longer fixed deposit cycles.For instance, when you become more confident about your financial situation, replace the 30, 60, 90 day cycle with a 6, 12, 18 month cycle The cost of maintaining the short term deposit renewals and new purchases. If your bank does not allow such transactions through on line banking, you might spend more time than you like at a bank or on the phone with the bank You want a monthly dividend but this might not be the case with fixed deposits. It depends on your bank but I believe most Indian banks pay interest every three months | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
What is the equation for an inflation adjusted annuity held in perpetuity? | The question lacks specificity, i.e. when does the initial investment occur, now or one period from now? If now then it is a perpetuity due. I will consider under 2 scenarios, A and B, relating to the size of the initial investment. A. Assuming that the initial investment (C_0) occurs now and each payment thereafter has the relationship (1+g) with this investment then the relevant base equation is that for the present value of a growing perpetuity due, expressed in terms of C_0, i.e. PVGPD= [C_0*(1+g)*(1+i)]/(i-g). Now, to suit the question asked, we can see that i=fixed rate of return (f) and g = expected inflation rate (e) such that we can rewrite the equation as PVGPD = [C_0*(1+e)*(1+i)]/(i-e]. We know that f = is a fixed nominal rate and must be adjusted for e to calculate the real rate (r) according to the equation f=(1+r)*(1+e)-1. Therefore PVGPD = [C_0*(1+e)(1+(1+r)(1+e)-1)]/((1+r)*(1+e)-1-e] Tidying up PVGPD = {C_0*(1+r)(1+e)^2}/[r(1+e)] PVGPD = [C_0*(1+r)*(1+e)]/r B. Assuming that the initial investment (X) is not equal to each subsequent perpetual payment (C_1) then the relevant base equation is that for the the initial investment plus the present value of a growing perpetuity, i.e. PVGP= X + [C_1/(i-g)] Rewriting PVGP = X + [C_1/(f-e)] Substituting PVGPD = X + {C_1/[(1+r)*(1+e)-1-e]} Tidying up PVGPD = X + C_1/[r*(1+e)] | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
Can I write off time I spent working on my business? | No, you cannot write off time, period. You should price the time spent into your product. I, occasionally, work on side projects of my own and forgo the possibility of earning direct income for that time. Income not earned is income not taxed, so there's nothing to deduct. | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
Currency exchange problem | For the purposes of report generation, I would recommend that you present the data in the currency of the user's home country. You could present another indicator, if needed, to indicate that a specific transaction was denominated in a foreign currency, where the amount represents the value of the foreign-denominated transaction in the user's home country Currency. For example: Airfare from USA to London: $1,000.00 Taxi from airport to hotel: $100.00 (in £) In terms of your database design, I would recommend not storing the data in any one denomination or reference currency. This would require you to do many more conversions between currencies that is likely to be necessary, and will create additional complexity where in some cases, you will need to do multiple conversions per transaction in and out of your reference currency. I think it will be easier for you to store multiple currencies as themselves, and not in a separate reference currency. I would recommend storing several pieces of information separately for each transaction: This way, you can create a calculated Amount for each transaction that is not in the user's "home" currency, whereas you would need to calculate this for all transactions if you used a universal reference currency. You could also get data from an external source if the user has forgotten the conversion rate. Remember that there are always fees and variations in the exchange rate that a user will get for their home country's currency, even if they change money at the same place at two different times on the same day. As a result, I would recommend building in a simple form that allows a user to enter how much they exchanged and how much they got back to calculate the exchange rate. So for example, let's say I have $ 200.00 USD and I exchanged $ 100.00 USD for £ 60.00, and there was a £ 3.00 fee for the exchange. The exchange rate would be 0.6, and when the user enters a currency conversion, your site could create three separate transactions such as: USD Converted to £: $100.00 £ Received from Exchange: £ 60.00 Exchange Fee: £ 3.00 So if the user exchanged currency and then ran a balance report by Currency, you could either show them that they now have $ 100.00 USD and £ 57.00, or you could alternatively choose to show the £ 57.00 that they have as $95.00 USD instead. If you were showing them a transaction report, you could also show the fee denominated in dollars as well. I would recommend storing your balances and transactions in their own currencies, as you will run into some very interesting problems otherwise. For example, let's say you used a reference currency tied to the dollar. So one day I exchange $ 100.00 USD for £ 60.00. In this system I would still have 100 of my reference currency. However, if the next day, the exchange rate falls and $ 1.00 USD is only worth £ 0.55, and I change my £ 60.00 back into USD, I will get approxiamately $ 109.09 USD back for my £ 60.00. If I then go and buy something for $ 100.00 USD, the balance of the reference currency would be at 0, but I will still have $ 9.09 USD in my pocket as a result of the fluctuating currency values! That is why I'd recommend storing currencies as themselves, and only showing them in another currency for convenience using calculations done "on the fly" at report runtime. Best of luck with your site! | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
I'm 23, living at home, and still can't afford my own property. What could I do? | I wouldn't be too concerned, yet. You're young. Many young people are living longer in the family home. See this Guardian article: Young adults delay leaving family home. You're in good company. Yet, there will come a time when you ought to get your own place, either for your own sanity or your parents' sanity. You should be preparing for that and building up your savings. Since you've got an income, you should – if you're not already – put away some of that money regularly. Every time you get paid, make a point of depositing a portion of your income into a savings or investment account. Look up the popular strategy called Pay Yourself First. Since you still live at home, it's possible you're a little more loose with spending money than you should be – at least, I've found that to be the case with some friends who lived at home as young adults. So, perhaps pretend you're on your own. What would your rent be if you had to find a place of your own? If, say, £600 instead of the £200 you're currently paying, then you should reduce your spending to the point where you can save at least £400 per month. Follow a budget. With respect to your car, it's great you recognize your mistake. We're human and we can learn from our mistakes. Plan to make it your one and only car mistake. I made one too. With respect to your credit card debt, it's not an insurmountable amount. Focus on getting rid of that debt soon and then focus on staying out of debt. The effective way to use credit cards is to never carry a balance – i.e. pay it off in full each month. If you can't do that, you're likely overspending. Also, look at what pensions your employer might offer. If they offer matching contributions, contribute at least as much to maximize the tax free extra pay this equates to. If you have access to a defined benefit plan, join it as soon as you are eligible. Last, I think it's important to recognize that at age 23 you're just starting out. Much of your career income earning potential is ahead of you. Strive to be the best at what you do, get promotions, and increase your income. Meanwhile, continue to save a good portion of what you earn. With discipline, you'll get where you want to be. | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
What is an ideal number of stock positions that I should have in my portfolio? | The two biggest issues that impact your question I would say are diversification and fees. If you have $10,000 to invest and only invest it in two securities, then a 20% drop in one security can have you lose 10% of your initial investment which I would consider a very high risk scenario. If you have $10,000 to invest and invest it in 20 securities, then a 20% drop in one security would only cause you to lose 1% of your initial investment. So far this is looking better from a diversification point of view. But then the issue of fees comes in. If you paid $10 per trade to buy those 20 securities you already spent 2% of your initial investment in fees! Not to mention you will pay at least another $200 to get out of all those positions. No right answer - but those are the two factors I always try to balance. | Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering |
Offered a job: Should I go as consultant / independent contractor, or employee? | Your comment to James is telling and can help us lead you in the right direction: My work and lifestyle will be the same either way, as I said. This is all about how it goes "on the books." [emphasis mine] As an independent consultant myself, when I hear something like "the work will be the same either way", I think: "Here thar be dragons!". Let me explain: If you go the independent contractor route, then you better act like one. The IRS (and the CRA, for Canadians) doesn't take lightly to people claiming to be independent contractors when they operate in fact like employees. Since you're not going to be behaving any different whether you are an employee or a contractor, (and assuming you'll be acting more like an employee, i.e. exclusive, etc.), then the IRS may later make a determination that you are in fact an employee, even if you choose to go "on the books" as an independent contractor. If that happens, then you may find yourself retroactively denied many tax benefits you'd have claimed; and owe penalties and interest too. Furthermore, your employer may be liable for additional withholding taxes, benefits, etc. after such a finding. So for those reasons, you should consider being an employee. You will avoid the potential headache I outlined above, as well as the additional paperwork etc. of being a contractor. If on the other hand you had said you wanted to maintain some flexibility to moonlight with other clients, build your own product on the side, choose what projects you work on (or don't), maybe hire subcontractors, etc. then I'd have supported the independent contractor idea. But, just on the basis of the tax characteristics only I'd say forget about it. On the financial side, I can tell you that I wouldn't have become a consultant if not for the ability to make more money in gross terms (i.e. before tax and expenses.) That is: your top line revenues ought to be higher in order to be able to offset many of the additional expenses you'd incur as an independent. IMHO, the tax benefits alone wouldn't make up for the difference. One final thing to look at is Form SS-8 mentioned at the IRS link below. If you're not sure what status to choose, the IRS can actually help you. But be prepared to wait... and wait... :-/ Additional Resources: | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
Best way to buy Japanese yen for travel? | I already commented the best existing answers, however let me note a couple of other things. Some of my friends in the past have wanted to do one of the following: | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
Figuring out an ideal balance to carry on credit cards [duplicate] | The fact that you pay the bill reliably is going to count more for your credit rating than anything else, even if you are paying it off in full every month. Lenders seem to like to see at least one instance where you charged a large balance, held it a couple months, then paid it off in full... but I wouldn't go out of my way to do that. Remember that the credit card company is making money on transaction fees as well as interest. If you're pushing money through their system, they're happy. They'd be happier if you were paying them interest too -- reportedly, they actually refer to those of us who pay in full every month as "deadbeats" -- but they aren't going to kick you out or ding your credit rating for it. The quote you give says that a small balance "may be slightly better". I submit that "may be slightly" is too small a difference to be worth worrying about, unless you have reason to believe that your credit rating actively needs to be repaired. (And as noted in the comments, it's actually stated even less strongly than that!) Personal recommendation: You can get a free credit report each year from each of the "big three" credit rating agencies. Those reports usually include a brief explanation of what they think the most negative item on your record is. The phrasing of those explanations is often somewhat misleading, but I'd still suggest that you get these reports and see what they think would improve your rating. I'm willing to bet it won't be "doesn't carry a high enough debt balance." | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
What are good games to play to teach young children about saving money? | I found this great resource at MarketWatch.com - a listing on online games that help parents teach kids about saving and finance, set up by age group. Here's an example of some of the content: For children six to nine: www.fleetkids.com, sponsored by the Fleet Bank, has great games -- like "Buy lo, Sell hi" and "Chunka Change" -- that teach kids about spending and saving. Kids can compete for prizes such as computers and backpacks for their schools. | Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering |
501(3)(c) to donators for trophy party | 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. | Share your insights or perspective on the financial matter presented in the input. |
How do I enter Canadian tax info from US form 1042-S and record captial gains from cashing in stock options? | 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. | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
Calculating required rate of return for an income-generating savings account | Line one shows your 1M, a return with a given rate, and year end withdrawal starting at 25,000. So Line 2 starts with that balance, applies the rate again, and shows the higher withdrawal, by 3%/yr. In Column one, I show the cumulative effect of the 3% inflation, and the last number in this column is the final balance (903K) but divided by the cumulative inflation. To summarize - if you simply get the return of inflation, and start by spending just that amount, you'll find that after 20 years, you have half your real value. The 1.029 is a trial and error method, as I don't know how a finance calculator would handle such a payment flow. I can load the sheet somewhere if you'd like. Note: This is not exactly what the OP was looking for. If the concept is useful, I'll let it stand. If not, downvotes are welcome and I'll delete. | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
What evidence or research suggests that mid- or small-capitalization stocks should perform better than large caps? | Efficient Frontier has an article from years ago about the small-cap and value premiums out there that would be worth noting here using the Fama and French data. Eugene Fama and Kenneth French (F/F) have shown that one can explain almost all of the returns of equity portfolios based on only three factors: market exposure, market capitalization (size), and price-to-book (value). Wikipedia link to the factor model which was the result of the F/F research. | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
Sell or keep rental Property? | How is the current mortgage payment broken out? I have a mortgage on a rental property with a payment of $775, but $600 is principal. If I were at breakeven on a sale or a bit underwater, I'd be better off just holding still, the tenant paying the loan down over $7000/year. You question is a good one, but a good answer would require more details. A bank may not agree to a short sale on an investment property, especially since there's a second property to go after. I'm not making a judgement, just saying, it's not a slam-dunk to just short sell it. | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
Can the purchaser of a stock call option cancel the contract? | You bought the right – but not the obligation – to buy a certain number of shares at $15 from whomsoever sold you the option, and you paid a premium for it. You can choose whether you want to buy the shares at $15 during the period agreed upon. If you call for the shares, the other guy has to sell the shares to you for $15 each, even if the market price is higher. You can then turn around and promptly resell the purchased shares at the higher market price. If the market price never rises above $15 at any time while the option is open, you still have the right to buy the shares for $15 if you choose to do so. Most rational people would let the option expire without exercising it, but this is not a legal requirement. Doing things like buying shares at $15 when the market price is below $15 is perfectly legal; just not very savvy. You cannot cancel the option in the sense of going to the seller of the option and demanding your premium money back because you don't intend to exercise the option because the market price is below $15. Of course, if the market price is above $15 and you tell the seller to cancel the contract, they will be happy to do so, since it lets them off the hook. They may or may not give you the premium back in this case. | Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering |
Interest on security deposits paid to landlords, in Michigan? | NO. The legislation requires the landlord to deposit it in a bank. Check out pages 7-10 of the linked document. There is no mention of interest. The second clause, I believe, is probably for large landlords who hold hundreds of thousands of dollars of security. http://www.legislature.mi.gov/documents/publications/tenantlandlord.pdf Q4 Once collected, what must the landlord do with the security deposit? The landlord must either: a) Deposit the money with a regulated financial institution (e.g., bank), OR b) Deposit a cash bond or surety bond, to secure the entire deposit, with the Secretary of State. ( Note: If the landlord does this, he or she may use the money at any time, for any purpose.) The bond ensures that there is money available to repay the tenant’s security deposit | Share your insights or perspective on the financial matter presented in the input. |
Are the “debt reduction” company useful? | They don't do anything you can't do yourself and they charge you money for it. And of course the only way they manage to negotiate the debt down is by not paying it for a while in the first place, have it referred to collections and then negotiating with the collectors. At that time, your credit rating (if you care about that at all) will have suffered a lot more damaged than it is from a few late payments. I would address the issue as to why you end up paying late first - it sounds to me like you're cutting the time left to pay to the bone and this turned around and bit you in the you-know-where. In case you are able to pay but not organised enough to do it on time, find a way to remind yourself to pay the bill a few days early for peace of mind. That won't do anything about the 28% interest but those might serve as an additional motivation to pay the debt off faster. Once you're back to showing regular on-time payments on your credit record, you might want to investigate transferring the balance to a cheaper card or negotiate the interest down (or both). If you genuinely can't pay after you've taken care of the essentials (food, shelter, transportation) then you don't need a third party to stop paying the credit card bill, you can do that yourself. | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
Which is better when working as a contractor, 1099 or incorporating? | Unless the amounts involved are very small, it is MUCH better to incorporate. First, incorporation gives you limited liability for your acts as an employee. As an individual, you have unlimited liability. Second, incorporating allows you to deduct (for tax purposes) the costs of doing business, including all of your health insurance, most transportation, and some meals. The exception to the rule is if the amounts you are earning are so small that they don't cover the cost of incorporating, accounting fees, etc. (a few hundred, or at most a few thousand dollars). | Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering |
How to choose a company for an IRA? | I use TIAA-Cref for my 403(b) and Fidelity for my solo 401(k) and IRAs. I have previously used Vanguard and have also used other discount brokers for my IRA. All of these companies will charge you nothing for an IRA, so there's really no point in comparing cost in that respect. They are all the "cheapest" in this respect. Each one will allow you to purchase their mutual funds and those of their partners for free. They will charge you some kind of fee to invest in mutual funds of their competitors (like $35 or something). So the real question is this: which of these institutions offers the best mutual and index funds. While they are not the worst out there, you will find that TIAA-Cref are dominated by both Vanguard and Fidelity. The latter two offer far more and larger funds and their funds will always have lower expense ratios than their TIAA-Cref equivalent. If I could take my money out of TIAA-Cref and put it in Fidelity, I'd do so right now. BTW, you may or may not want to buy individual stocks or ETFs in your account. Vanguard will let you trade their ETFs for free, and they have lots. For other ETFs and stocks you will pay $7 or so (depends on your account size). Fidelity will give you free trades in the many iShares ETFs and charge you $5 for other trades. TIAA-Cref will not give you any free ETFs and will charge you $8 per trade. Each of these will give you investment advice for free, but that's about what it's worth as well. The quality of the advice will depend on who picks up the phone, not which institution you use. I would not make a decision based on this. | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
Does high inflation help or hurt companies with huge cash reserves? | Inflation is bad for people with lots of cash assets. It's good for debtors, particularly debtors with unsecured debt. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
What should I do with $4,000 cash and High Interest Debt? | The difference in interest is not a huge factor in your decision. It's about $2 per month. Personally I would go ahead and knock one out since it's one less to worry about. Then I would cancel the account and cut that card up so you are not tempted to use it again. To address the comments... Cutting up the card is NOT the ultimate solution. The solution is to stop borrowing money... Get on a strict budget, live on less than what you bring home, and throw everything you can at this high-interest debt. The destroying of the card is partly symbolic - it's a gesture to indicate that you're not going to use credit cards at all, or at least until they can be used responsibly, not paying a DIME of interest. It's analogous to a recovering alcoholic pouring out bottles of booze. Sure you can easily get more, but it's a commitment to changing your attitude and behavior. Yes leaving the card open will reduce utilization and improve (or not hurt) credit score - but if the goal is to stop borrowing money and pay off the other card, then once that is achieved, your credit score will be significantly improved, and the cancelling of the first card will not matter. The card (really both cards) should never, ever be used again. | Share your insights or perspective on the financial matter presented in the input. |
What Russell 2000 price action would move TZA on the upside back to its 6000 level? | the pricing model makes all inverse leveraged ETF decay over time. When the price gets low the manager can once again do a stock split to make the share price more attractive. The manager usually states a price range that will prompt a stock split, but actually doing the split is at their discretion The Russell 2000 has to decrease a lot yes, but probably just a flash crash of 10% in a day can extend the TZA to extremely high bids and asks. A flash crash that far through the order books would wreck the liquidity of all the underlying assets and especially the derivatives products based on (derived from) those assets. So a mathematical formula to price the ETF during a period of high volatility and low liquidity becomes a lot less of a science and more of a random walk. A good example of this would be to look at the 2010 flash crash and the price behavior of the VXZ ETF, where it spiked to $400/share from maybe $60/share | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
What is the equation for an inflation adjusted annuity held in perpetuity? | EDIT: After reading one of the comments on the original question, I realized that there is a much more intuitive way to think about this. If you look at it as a standard PV calculation and hold each of the cashflows constant. Really what's happening is that because of inflation the discount rate isn't the full value of the interest rate. Really the discount rate is only the portion of the interest rate above the inflation rate. Hence in the standard perpetuity PV equation PV = A / r r becomes the interest rate less the inflation rate which gives you PV = A / (i - g). That seems like a much better way to get to the answer than all the machinations I was originally trying. Original Answer: I think I finally figured this out. The general term for this type of system in which the payments increase over time is a gradient series annuity. In this specific example since the payment is increasing by a percentage each period (not a constant rate) this would be considered a geometric gradient series. According to this link the formula for the present value of a geometric gradient series of payments is: Where P is the present value of this series of cashflows. A_1 is the initial payment for period 1 (i.e. the amount you want to withdraw adjusted for inflation). g is the gradient or growth rate of the periodic payment (in this case this is the inflation rate) i is the interest rate n is the number of payments This is almost exactly what I was looking for in my original question. The only problem is this is for a fixed amount of time (i.e. n periods). In order to figure out the formula for a perpetuity we need to find the limit of the right side of this equation as the number of periods (n) approaches infinity. Luckily in this equation n is already well isolated to a single term: (1 + g)^n/(1 + i)^-n}. And since we know that the interest rate, i, has to be greater than the inflation rate, g, the limit of that factor is 0. So after replacing that term with 0 our equation simplifies to the following: Note: I don't do this stuff for a living and honestly don't have a fantastic finance IQ. It's been a while since I've done any calculus or even this much algebra so I may have made an error in the math. | Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering |
What is the difference between trading and non-trading stock? | A non-trading stock or non-marketable security or unlisted security is one that does not trade continually on an exchange. For tax purposes, this can mean a whole new ball of wax which I would prefer the experts address with an edit to this answer or a new answer. For financial accounting purposes, this is when, say, one owns shares in an unlisted corporation and should be treated very carefully less one delude oneself. For trading stock, the value can be known immediately by checking any valid data provider's price and marking to market. For non-trading stock, the value has to be "marked to model". This can get one into Enron sized trouble. In this case, it's best to either leave the value of the stock at the purchase price and recognize gains upon sale, use a price from another honest transaction by third parties which are most likely difficult to attain, or to use some shorthand measure like applying the market P/E. Be wary of strangely high figures for value from the purchase price by using a market average, and don't throw away the shares just yet if a strangely low one arises. This method can lead to strange results. | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
Are parking spaces and garage boxes a good investment? | In Italy (even with taxes that are more than 50% on income) owning garages is generally a good business, as you said: "making money while you sleep", because of no maintainance. Moreover garages made by real concrete (and not wood like in US) are still new after 50 years, you just repaint them once every 20 years and you change the metal door gate once every 30 years. After 20 years you can be sure the price of the garage will be higher than what you paied it (at least for the effect of the inflation, after 20 years concrete and labour work will cost more than today). The only important thing before buying it is to make sure it is in an area where people are eager to rent it. This is very common in Italian cities' downtown because they were built in dark ages when cars did not exists, hence there are really few available parkings. | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |