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Can a self-employed person have a Health Savings Account?

IRS Publication 969 gives all the details about HSA accounts and High Deductible plans: According to your question you are covered by a plan that can have an HSA. There a few points of interest for you: Contributions to an HSA Any eligible individual can contribute to an HSA. For an employee's HSA, the employee, the employee's employer, or both may contribute to the employee's HSA in the same year. For an HSA established by a self-employed (or unemployed) individual, the individual can contribute. Family members or any other person may also make contributions on behalf of an eligible individual. Contributions to an HSA must be made in cash. Contributions of stock or property are not allowed. That means that yes you could make a contribution to the HSA. Or if in the future you were the provider of the insurance you could have a HSA. Limit on Contributions For 2015, if you have self-only HDHP coverage, you can contribute up to $3,350. If you have family HDHP coverage you can contribute up to $6,650. It sounds like you have a family plan. Additional contribution. If you are an eligible individual who is age 55 or older at the end of your tax year, your contribution limit is increased by $1,000. Rules for married people. If either spouse has family HDHP coverage, both spouses are treated as having family HDHP coverage. If each spouse has family coverage under a separate plan, the contribution limit for 2014 is $6,550. You must reduce the limit on contributions, before taking into account any additional contributions, by the amount contributed to both spouses' Archer MSAs. After that reduction, the contribution limit is split equally between the spouses unless you agree on a different division. The rules for married people apply only if both spouses are eligible individuals. If both spouses are 55 or older and not enrolled in Medicare, each spouse's contribution limit is increased by the additional contribution. If both spouses meet the age requirement, the total contributions under family coverage cannot be more than $8,550. Each spouse must make the additional contribution to his or her own HSA. Note: most of the document was written with 2014 numbers, but sometimes they mention 2015 numbers. If both are covered under a single plan it should be funded by the person that has the plan. They may get money from their employer. They may be able to have the employer cover the monthly fee that most HSA administrators charge. The non employee can make contributions to the account but care must be taken to make ure the annual limits aren't exceeded. HSA contributions from the employees paycheck may reduce the social security tax paid by the employee. If the non-employee is self employed you will have to see how the contribution impacts the social security situation for the couple. If the non-employee is 55 or older it can make sense to throw in that extra $1000. The employer may not allow it to come from the paycheck contributions because they wouldn't necessarily know the age of the spouse, they may put a maximum limit based on the age of the employee.

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Investments beyond RRSP and TFSA, in non-registered accounts?

You haven't looked very far if you didn't find index tracking exchange-traded funds (ETFs) on the Toronto Stock Exchange. There are at least a half dozen major exchange-traded fund families that I'm aware of, including Canadian-listed offerings from some of the larger ETF providers from the U.S. The Toronto Stock Exchange (TSX) maintains a list of ETF providers that have products listed on the TSX.

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How are bonds affected by the Federal Funds Rate?

I'll answer your question, but first a comment about your intended strategy. Buying government bonds in a retirement account is probably not a good idea. Government bonds (generally) are tax advantaged themselves, so they offer a lower interest rate than other types of bonds. At no tax or reduced tax, many people will accept the lower interest rate because their effective return may be similar or better depending, for example, on their own marginal tax rate. In a tax-advantaged retirement account, however, you'll be getting the lower interest without any additional benefit because that account itself is already tax-advantaged. (Buying bonds generally may be a good idea or not - I won't comment on that - but choose a different category of bonds.) For the general question about the relationship between the Fed rate and the bond rate, they are positively correlated. There's not direct causal relationship in the sense that the Fed is not setting the bond rate directly, but other interest bearing investment options are tied to the Fed rate and many of those interest-bearing options compete for the same investor dollars as the bonds that you're reviewing. That's at a whole market level. Individual bonds, however, may not be so tightly coupled since the creditworthiness of the issuing entity matters a lot too, so it could be that "bond rates" generally are going up but some specific bonds are going down based on something happening with the issuer, just like the stock market might be generally going up even as specific stocks are dropping. Also keep in mind that many bonds trade as securities on a secondary market much like stocks. So I've talked about the bond rate. The price of the bonds themselves on the secondary market generally move opposite to the rate. The reason is that, for example, if you buy a bond at less than face value, you're getting an effective interest rate that's higher because you get the same sized incremental payments of interest but put less money into the investment. And vice versa.

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Typical return for an IRA? How can I assess if my returns were decent?

To try and address your 'how' it goes a bit like this. You need to first assess how your stuff is invested, if for example half is in stocks, and the other half is in bonds, then you will need to calculate a 'blended' rate for what are reasonable 'average return' for both. That might mean looking at the S&P500 or Russell 3000 for the stock portion, and some bond index for that portion, then 'blend the rates', in this case using a formula like this then compare the blended rate with the return in your IRA. It is generally a lot more useful to compare the various components of your total return separately, especially if you investing with a particular style such as 'agressive growth' or you are buying actual bonds and not a bond fund since most of the bond oriented indexes are for bond funds, which you can't really compare well with buying and holding bonds to maturity. Lets say your stock side was two mutual funds with different styles, one 'large cap' the other 'aggressive growth'. In that case you might want to compare each one of those funds with an appropriate index such as those provided by Morningstar If you find one of them is consistently below the average, you might want to consider finding an alternative fund who's manager has a better track record (bearing in mind that "past performance....") For me (maybe someone has a good suggestion here) bonds are the hard thing to judge. The normal goal of actually owning bonds (as opposed to a fund) is to retain the entire principal value because there's no principal fluctuation if you hold the bond to maturity (as long as you choose well and the issuer doesn't default) The actual value 'right now' of a bond (as in selling before maturity) and bond funds, goes up and down in an inverse relationship with interest rates. That means the indexes for such things also go up and down a lot, so it's very hard to compare them to a bond you intend to hold to maturity. Also, for such a bond, there's not a lot of point to 'switch out' unless you are worried about the issuer defaulting. If rates are up from what you are getting on your bonds, then you'll have to sell your bond at a discount, and all that happens is you'll end up holding a different bond that is worth less, but has higher interest (basically the net return is likely to be pretty much the same). The better approach there is generally to 'ladder' your maturity dates so you get opportunities to reinvest at whatever the prevailing rates are, without having to sell at a discount.. anyway the point is that I'm not sure there's a lot of value to comparing return on the bond portion of an IRA unless it's invested in bond funds (which a lot of people wanting to preserve principal tend to avoid)

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I carelessly invested in a stock on a spike near the peak price. How can I salvage my investment?

Ignore sunk costs and look to future returns. Although it feels like a loss to exit an investment from a loss position, from a financial standpoint you should ignore the purchase price. If your money could be better invested somewhere else, then move it there. You shouldn't look at it as though you'll be more financially secure because you waited longer for the stock to reach the purchase price. That's psychological, not financial. Some portion of your invested wealth is stuck in this particular stock. If it would take three months for the stock to get back to purchase price but only two months for an alternate investment to reach that same level, then obviously faster growth is better. Your goal is greater wealth, not arbitrarily returning certain investments to their purchase price. Investments are just instrumental. You want more wealth. If an investment is not performing, then ignore purchase price and sunken costs. Look at the reasonable expectations about an investment going forward.

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What is insider trading exactly?

The CEO of a public company can, and often does, buy (and sell) the stock of his company. In fact, frequently the stock of the company is part of the compensation for the CEO. What makes this legal and fair is that the CEO files with the SEC an announcement before he buys (or sells) the stock. These announcements allow us 'in the dark' people enough warning ahead of time. See, for example, the trades of UTX stock by their public officers. As for trading on information about other companies, if I am not mistaken... that is why Martha Stewart wound up in prison. So, yeah, it does happen. I hope it is caught more often than not. On a related note, have you seen the movie 'Wall Street' with Charlie Sheen and Michael Douglas?

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Do I make money in the stock market from other people losing money?

In gambling, the house also takes a cut, so the total money in the game is shrinking by 2-10 percent. So if you gain $100, it's because other people lost $105, and you do this for dozens of plays, so it stacks up. The market owns companies who are trying to create economic value - take nothing and make it something. They usually succeed, and this adds to the total pot and makes all players richer regardless of trades. Gambling is transactional, there's a "pull" or a "roll" or a "hand", and when it's over you must do new transactions to continue playing. Investing parks your money indefinitely, you can be 30 years in a stock and that's one transaction. And given the long time, virtually all your gains will be new economic value created, at no one else's expense, i.e. Nobody loses. Now it's possible to trade in and out of stocks very rapidly, causing them to be transactional like gambling: the extreme example is day-trading. When you're not in a stock long enough for the company to create any value (paid in dividends or the market appreciating the value), then yes, for someone to gain, someone else must lose. And the house takes a cut (e.g. Etrade's $10 trading fee in and out). In that case both players are trying to win, and one just had better info on average. Another case is when the market drops. For instance right after Brexit I dumped half my domestic stocks and bought Euro index funds. I gambled Euro stocks would rebound better than US stocks would continue to perform. Obviously, others were counterbetting that American stocks will still grow more than Euro will rebound. Who won that gamble? Certainly we will all do better long-term, but some of us will do better-er. And that's what it's all about.

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Approximate IT company valuation (to proximate stock options value)

This situation sounds better than most, the company it seems likely to be profitable in the future. As such it is a good candidate to have a successful IPO. With that your stock options are likely to be worth something. How much of that is your share is likely to be very small. The workers that have been their since the beginning, the venture capitalist, and the founders will make the majority of profits from an IPO or sale. Since you and others hired at a similar time as you are assuming almost no risk it is fair that your share of the take is small. Despite being 1/130 employees expect your share of the profits to be much smaller than .77%. How about we go with .01%? Lets also assume that they go public in 2.5 years and that revenues during that time continue to increase by about 25M/year. Profit margins remains the same. So revenues to 112M, profits to 22.5M. Typically the goal for business is to pay no more than 5 times profits, that could be supplanted by other factors, but let's assume that figure. So about 112M from the IPO. So .01% of that is about 11K. That feels about right. Keep in mind there would be underwriting fees, and also I would discount that figure for things that could go wrong. I'd be at about 5K. That would be my expected value figure, 5K. I'd also understand that there is a very small likelihood that I receive that amount. The value received is more likely to be zero, or enough to buy a Ferarri. There might also be some value in getting to know these people. If this fails will their next venture be a success. In my own life, I went to work for a company that looked great on paper that just turned out to be a bust. Great concept, horrible management, and within a couple of years of being hired, the company went bust. I worked like a dog for nothing.

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Why diversify stocks/investments?

Diversifying is the first advice given to beginner in order to avoid big loss. For example in 2014 the company Theranos was really appealing before it fail in 2016. So a beginner could have invest ALL his money and lose it. But if he has deverified he wouldn't lost everything. As an investor goes from beginner to experience some still Diversify and other concentrate. Mostly it depends how much confident you are about an investement. If you have 20 years of experience, now everything about the company and you are sure there will be profit you can concentrate. If you are not 100% sure there will be a profit, it is better to Diversify. Diversifying can also be profitating when you loose money: because you will pay tax when you earn money, if you diversify you can choose to loose money in some stock (usually in december) and in this way cut your taxes.

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Is there a list of OTC stocks being added to the major exchanges?

Reuters has a service you can subscribe to that will give you lots of Financial information that is not readily available in common feeds. One of the things you can find is the listing/delist dates of stocks. There are tools to build custom reports. That would be a report you could write. You can probably get the data for free through their rss feeds and on their website, but the custom reports is a paid feature. FWIW re-listing(listings that have been delisted but return to a status that they can be listed again) is pretty rare. And I can not think of too many(any actually) penny stocks that have grown to be listed on a major exchange.

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Does the profit of a company directly affect its stock or indirectly by causing people to buy or sell?

The short answer to your question is yes. Company performance affects stock price only through investors' views. But note that selling for higher and lower prices when the company is doing well or poorly is not an arbitrary choice. A stock is a claim on the future cash flows of the firm, which ultimately come from its future profits. If the company is doing well, investors will likely expect that there will large cash flows (dividends) in the future and be willing to pay more to hold it (or require more to sell it). The price of a stock is equal what people think the future dividends are worth. If market participants started behaving irrationally, like not reacting to changes in the expected future cash flows, then arbitrageurs would make a ton of money trading against them until the situation was rectified.

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Ways to establish credit history for international student

I came to US as an international student several years ago, and I have also experienced the same situation like most of the international students in finding ways to build credit history. Below I list out some possible approaches you may want to consider: I. Get a student job at campus (recommended) I think the best way is to get a student job in university, say a teaching assistant or student helper. In this case, you can be provided with a social security number and start to build your own credit history. II. Get credit card You can also consider to apply for a credit card. There are indeed some financial institutions that can provide credit cards for international students with no or limited credit scores requirement, say Discover and Bank of America. However, it is relatively hard to get approved, simply because hey may put more restriction in other aspects. For example, you may be required to keep sufficient bank balance above several thousand dollars during a period of time, or you should prove that you have relatives with citizenship in US who can provide your financial aid if needed. III. Apply for a loan (recommended) Getting a loan product is another alternative to get out of this difficult situation, but most of people don’t realize that. There are some FinTech start-ups in United States that specifically focus on international students’ loan financing. One representative example is Westbon (Westbon ), an online lending company that specializes in providing car loan for international students with no SSN or credit history. I once used their loan product to finance a Honda Accord, and Westbon reported my loan transaction records to US credit bureau during my repayment process. Later when I officially got my SSN number, I found my credit history has been automatically synchronized and I don’t have to start from all over again. It never be an easy journey for international students to build credit history in United States. What approach you should make really depends on you own situation. I hope the information above can be useful and good luck for your credit journey!

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Can ETF's change the weighting of the assets they track

Can they change the weights? Yes. Will they? It depends. are ETF's fixed from their inception to their de-listing? It's actually not possible for weights to be fixed, since different assets have different returns. So the weights are constantly changing as long as the market is moving. Usually after a certain period or a substantial market move, fund managers would rebalance and bring the weights back to a certain target. The target weights - what your question is really about - aren't necessarily the same as the initial weights, but often times they are. It depends on the objective of the ETF (which is stated in prospectus). In your example, if the manager drops the weight of the most volatile one, the returns of the ETF and the 5 stocks could be substantially different in the next period. This is not desirable when the ETFs objective is to track performance of those 5 stocks. Most if not all ETFs are passively-managed. The managers don't get paid for active management. So they don't have incentive to adjust the weights if their funds are tracking the benchmarks just fine.

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How much cash on hand should one have?

There are two or three issues here. One is, how quickly can you get cash out of your investments? If you had an unexpected expense, if you suddenly needed more cash than you have on hand, how long would it take to get money out of your Scott Trade account or wherever it is? I have a TD Ameritrade account which is pretty similar, and it just takes a couple of days to get money out. I'm hard pressed to think of a time when I literally needed a bunch of cash TODAY with no advance warning. What sudden bills is one likely to have? A medical bill, perhaps. But hey, just a few weeks ago I had to go to the emergency room with a medical problem, and it's not like they demanded cash on the table before they'd help me. I just got the bill, maybe 3 weeks after the event. I've never decided to move and then actually moved 2 days later. These things take SOME planning. Etc. Second, how much risk are you willing to tolerate? If you have your money in the stock market, the market could go down just as you need the cash. That's not even a worst case scenario, extreme scenario. After all, if the economy gets bad, the stock market could go down, and the same fact could result in your employer laying you off. That said, you could reduce this risk by keeping some of your money in a low-risk investment, like some high-quality bonds. Third, you want to have cash to cover the more modest, routine expenses. Like make sure you always have enough cash on hand to pay the rent or mortgage, buy food, and so on. And fourth, you want to keep a cushion against bookkeeping mistakes. I've had twice in my life that I've overdrawn a checking account, not because I was broke, but because I messed up my records and thought I had more money in the account than I really did. It's impossible to give exact numbers without knowing a lot about your income and expenses. But for myself: I keep a cushion of $1,000 to $1,5000 in my checking account, on top of all regular bills that I know I'll have to pay in the next month, to cover modest unexpected expenses and mistakes. I pay most of my bills by credit card for convenience --and pay the balance in full when I get the bill so I don't pay interest -- so I don't need a lot of cushion. I used to keep 2 to 3 months pay in an account invested in bonds and very safe stocks, something that wouldn't lose much value even in bad times. Since my daughter started college I've run this down to less than 1 months pay, and instead of replacing that money I'm instead putting my spare money into more general stocks, which is admittedly riskier. So between the two accounts I have a little over 2 months pay, which I think is low, but as I say, I'm trying to get my kids through college so I've run down my savings some. I think if I had more than 6 months pay in easily-liquidated assets, then unless I expected to need a bunch of cash for something, buying a new house or some such, I'd be transferring that to a retirement account with tax advantages.

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Should I cancel an existing credit card so I can open another that has rewards?

Cancelled cards don't fall off the system for a long time, up to ten years. Card terms change, with notice of course, but it can happen at any time. I had a card with a crazy perk, 5% back in Apple Gift cards. This was pre-iPod days, but it was great to get a new computer every two years for free. But it was short lived. Three years into it, the cards were changed, a no-perk card from the bank. That is now my oldest account, and it goes unused. Instead of holding cards like this, I wish I had flipped it to a different card years ago. Ideally, your mix of cards should provide value to you, and if they all do, then when one perk goes away, it's time to refresh that card. This is a snapshot from my report at CreditKarma. (Disclosure, I like these guys, I've met their PR folk. I have no business relationship with them) Elsewhere on the page it's noted that average card age is a 'medium impact' item. I am 50, but I use the strategy above to keep the cards working for me. My current score is 784, so this B on the report isn't hurting too much. The tens of thousands I've saved in mortgage interest by being a serial refinancer was worth the hit on account age, as was the credit card with a 10% rebate for 90 days, the 'newest account' you see in the snapshot. In the end, the score manipulation is a bit of a game. And some of it is counter-intuitive. Your score can take a minor hit for actions that would seem responsible, but your goal should be to have the right mix of cards, and the lowest interest (long term) loans.

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Tax benefits to buying stocks on Dec 31 vs. one day later?

For a long term gain you must hold the stock a year and a day, so, the long term hold period will fall into 2015 regardless. This is the only tax related issue that occurs to me, did you have something else in mind? Welcome to Money.SE.

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Book or web site resources for an absolute beginner to learn about stocks and investing?

The Motley Fool's How to Invest How To Invest Benjamin Graham's The Intelligent Investor The Intelligent Investor If you like The Intelligent Investor then try Benjamin's Security Analysis. But that one is not a beginner book.

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What are the best software tools for personal finance?

Emergency Account Vault (Windows) I use it to store info about all of my accounts/assets in an encrypted document. It's more for keeping track of everything that is in your name than managing money. Good for situations when you need to quickly look up info about a specific account you own.

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Stocks given by company vest if I quit?

Vesting typically stops after you quit. So, if your plan vests 20% per year for 5 years, and you received a one-time stock grant as part of this plan (i.e., ignoring the fact that these often involve new grants each year that vest separately), and you were hired in 2014 and leave at the end of 2016, then you vested 20% in 2015 and 20% in 2016, so would have 40% of the stock vested when you quit, and would never have more than that.

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Why would selling off some stores improve a company's value?

Two different takes on an answer; the net-loss concept you mentioned and a core-business concept. If a store is actually a net-loss, and anybody is willing to buy it, it may well make sense to sell it. Depending on your capital value invested, and how much it would take you to make it profitable, it may be a sound business decision to sell the asset. The buyer of the asset is of course expecting for some reason to make it not a net loss for them (perhaps they have other stores in the vicinity and can then share staff or stock somehow). The core-business is a fuzzier concept. Investors seem to go in cycles, like can like well-diversified companies that are resilient to a market downturn in one sector, but then they also like so-called pure-play companies, where you are clear on what you are owning. To try an example (which is likely not the case here), lets say that Sunoco in 5% of its stores had migrated away from a gas-station model to a one-stop-gas-and-repairs model. Therefore they had to have service bays, parts, and trained staff at those locations. These things are expensive, and could be seen as not their area of expertise (selling gas). So as an investor, if I want to own gas stations, I don't want to own a full service garage, so perhaps I invest in somebody else. Once they sell off their non-core assets, they free up capital to do what they know best. It is at least one possible explanation.

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If a startup can always issue new shares, what value is there to stocks/options?

It's called "dilution". Usually it is done to attract more investors, and yes - the existing share holders will get diluted and their share of ownership shrinks. As a shareholder you can affect the board decisions (depends on your stake of ownership), but usually you'll want to attract more investors to keep the company running, so not much you can do to avoid it. The initial investors/employees in a startup company are almost always diluted out. Look at what happened to Steve Jobs at Apple, as an example.

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Are traders 100% responsible for a stock's price changes?

Yes traders, living or algorithmic, are the only direct factors that can cause a change in the price of a marketable item. Traders can be affected by news, broken exchanges ;), emotional cycles, lunar cycles, time the trader goes to lunch (or a power cycle if you are an algo running on that unfortunate OS), anything.

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Why is RSU tax basis based on remaining shares after shares are witheld?

Here is how it should look: 100 shares of restricted stock (RSU) vest. 25 shares sold to pay for taxes. W2 (and probably paycheck) shows your income going up by 100 shares worth and your taxes withheld going up by 25 shares worth. Now you own 75 shares with after-tax money. If you stop here, there would be no stock sale and no tax issues. You'd have just earned W2 income and withheld taxes through your W2 job. Now, when you sell those 75 shares whether it is the same day or years later, the basis for those 75 shares is adjusted by the amount that went in to your W2. So if they were bought for $20, your adjusted basis would be 75*$20.

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Is there a simple strategy of selling stock over a period of time?

Yes, there is an analogous strategy for selling: it's to sell a fixed number of shares per period of time.

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What are the differences among all these different versions of Vivendi?

VIV.PA - is Vivendi listed on a stock exchange in Paris VIVEF - is Vivendi listed on the OTC Other Exchange. VIVHY - is Listed on the OTC:Pink Sheets. A company can be listed on multiple exchanges, they are known as a dual-listed company. It's a corporate structure in which two corporations function as a single operating business through a legal equalization agreement, but retain separate legal identities and stock exchange listings. Pretty much all DLCs are cross-border, and have tax advantages for the corporations and their stockholders. When a DLC is created, in essence two companies are created and have two separate bodies of shareholders, but they agree to share all the risks and rewards of the ownership of all their operating businesses in a fixed proportion, laid out in a contract called an "equalization agreement". The shares of a DLC parents have claim to the exact same underlying cash flows. So in theory the stock prices of these companies should move exactly the same. However in practice there can be differences between these prices. More info on OTC exchanges can be found here - keep in mind this info is from the company that runs these listings. Over the counter stocks are held to a FAR lesser regulation standard. I would recommend doing further interdependent research before pursuing any action.

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What should I be aware of as a young investor?

If you are going to the frenzy of individual stock picking, like almost everyone initially, I suggest you to write your plan to paper. Like, I want an orthogonal set of assets and limit single investments to 10%. If with such limitations the percentage of brokerage fees rise to unbearable large, you should not invest that way in the first hand. You may find better to invest in already diversified fund, to skip stupid fees. There are screeners like in morningstar that allow you to see overlapping items in funds but in stocks it becomes trickier and much errorsome. I know you are going to the stock market frenzy, even if you are saying to want to be long-term or contrarian investor, most investors are convex, i.e. they follow their peers, despite it would better to be a concave investor (but as we know it can be hard). If the last part confused you, fire up a spreadsheet and do a balance. It is a very motivating activity, really. You will immediately notice things important to you, not just to providers such as morningstar, but alert it may take some time. And Bogleheads become to your rescue, ready spreadsheets here.

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How can I report pump and dump scams?

Start with your local police department then move on to these sites. Fill out the United States Postal Service fraud complaint form http://ehome.uspis.gov/fcsexternal/ Contact your State Attorneys General. Your state Attorney General or local office of consumer protection is also listed in the government pages of your telephone book Write to the Federal Trade Commission: spam@uce.gov If you are aware of a securities (e.g., stocks) scam, insider trading, etc., you will want to contact the SEC (Securities and Exchange Commission). http://www.consumerfraudreporting.org/SEC.php

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How to know if two ETFs are 'substantially identical' according to wash sale rules?

It sounds like this is an entirely unsettled question, unfortunately. In the examples you provide, I think it is safe to say that none of those are 'substantially identical'; a small overlap or no overlap certainly should not be considered such by a reasonable interpretation of the rule. This article on Kitces goes into some detail on the topic. A few specifics. First, Former publication 564 explains: Ordinarily, shares issued by one mutual fund are not considered to be substantially identical to shares issued by another mutual fund. Of course, what "ordinarily" means is unspecified (and this is no longer a current publication, so, who knows). The Kitces article goes on to explain that the IRS hasn't really gone after wash sales for mutual funds: Over the years, the IRS has not pursued wash sale abuses against mutual funds, perhaps because it just wasn’t very feasible to crack down on them, or perhaps because it just wasn’t perceived as that big of an abuse. After all, while the rules might allow you to loss-harvest a particular stock you couldn’t have otherwise, it also limits you from harvesting ANY losses if the overall fund is up in the aggregate, since losses on individual stocks can’t pass through to the mutual fund shareholders. But then goes to explain about ETFs being very different: sell SPY, buy IVV or VTI, and you're basically buying/selling the identical thing (99% or so correlation in stocks owned). The recommendation by the article is to look at the correlation in owned stocks, and stay away from things over 95%; that seems reasonable in my book as well. Ultimately, there will no doubt be a large number of “grey” and murky situations, but I suspect that until the IRS provides better guidance (or Congress rewrites/updates the wash sale rules altogether!), in the near term the easiest “red flag” warning is simply to look at the correlation between the original investment being loss-harvested, and the replacement security; at correlations above 0.95, and especially at 0.99+, it’s difficult to argue that the securities are not ”substantially identical” to each other in performance. Basically - use common sense, and don't do anything you think would be hard to defend in an audit, but otherwise you should be okay.

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Why is tax loss harvesting helpful for passive investing?

You also may want to consider how this interacts with the stepped up basis of estates. If you never sell the stock and it passes to your heirs with your estate, under current tax law the basis will increase from the purchase price to the market price at the time of transfer. In a comment, you proposed: Thinking more deeply though, I am a little skeptical that it's a free lunch: Say I buy stock A (a computer manufacturer) at $100 which I intend to hold long term. It ends up falling to $80 and the robo-advisor sells it for tax loss harvesting, buying stock B (a similar computer manufacturer) as a replacement. So I benefit from realizing those losses. HOWEVER, say both stocks then rise by 50% over 3 years. At this point, selling B gives me more capital gains tax than if I had held A through the losses, since A's rise from 80 back to 100 would have been free for me since I purchased at 100. And then later thought Although thinking even more (sorry, thinking out loud here), I guess I still come out ahead on taxes since I was able to deduct the $20 loss on A against ordinary income, and while I pay extra capital gains on B, that's a lower tax rate. So the free lunch is $20*[number of shares]*([my tax bracket] - [capital gains rates]) That's true. And in addition to that, if you never sell B, which continues to rise to $200 (was last at $120 after a 50% increase from $80), the basis steps up to $200 on transfer to your heirs. Of course, your estate may have to pay a 40% tax on the $200 before transferring the shares to your heirs. So this isn't exactly a free lunch either. But you have to pay that 40% tax regardless of the form in which the money is held. Cash, real estate, stocks, whatever. Whether you have a large or small capital gain on the stock is irrelevant to the estate tax. This type of planning may not matter to you personally, but it is another aspect of what wealth management can impact.

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Good habits pertaining to personal finance for someone just getting started?

If you are not working, I believe you would be getting some money from your family to meet your expenses. In such a case, I would start with maintaining a Cash A/c which would list your monthly expenses and the money you received, which is what I used to do at your age. You can maintain it in a notebook with pen/pencil or using online tools such as Google Sheets. Enter each expense entries each day as debits and entries towards any money you receive as credits. At the end of the month, tally them and see how much you have left. Also, this gives you a clear picture of where your expenses are what is that you can avoid. On longer term, this can help you form an annual budget for your personal finances.

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In a house with shared ownership, if one person moves out and the other assumes mortgage, how do we determine who owns what share in the end?

I second (or fifth?) the answers of the other users in that this should have been foreseen and discussed prior to entering the partnership. But to offer a potential solution: If the mortgage company allows you to assume the whole mortgage (big if) you could buy the other partner out. To determine what a fair buyout would be, take the current value of the house less the remaining mortgage to get the current equity. Half that is each partner's current gain (or potentially loss), and could be considered a fair buyout. At this point the partner realizes any gains made in the last 5 years, and from now on the whole house (and any future gains or losses) will be yours. Alternatively your partner could remain a full partner (if s/he so desires) until the house sells. You would see the house as a separate business, split the cost as you have, and you would pay fair market rent each month (half of which would come back to you). A third option would be to refinance the house, with you as a sole mortgage holder. To factor in how much your partner should receive out of the transaction, you can take his/her current equity and subtract half of the costs associated with the refi. I would also recommend both of you seek out the help of a real estate lawyer at this point to help you draft an agreement. It sounds like you're still on good terms, so you could see a lawyer together; this would be helpful because they should know all the things you should look out for in a situation like this. Good luck!

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How can put options be used to buy shares at a lower price?

Cart's answer describes well one aspects of puts: protective puts; which means using puts as insurance against a decline in the price of shares that you own. That's a popular use of puts. But I think the wording of your question is angling for another strategy: Writing puts. Consider: Cart's strategy refers to the buyer of a put. But, on the transaction's other side is a seller of the put – and ultimately somebody created or wrote that put contract in the first place! That first seller of the put – that is, the seller that isn't just selling one they themselves bought – is the put writer. When you write a put, you are taking on the obligation to buy the other side's stock at the put exercise price if the stock price falls below that exercise price by the expiry date. For taking on the obligation, you receive a premium, like how an insurance company charges a premium to insure against a loss. Example: Imagine ABC Co. stock is trading at $25.00. You write a put contract agreeing to buy 100 shares of ABC at $20.00 per share (the exercise price) by a given expiration date. Say you receive $2.00/share premium from the put buyer. You now have the obligation to purchase the shares from the put buyer in the event they are below $20.00 per share when the option expires – or, technically any time before then, if the buyer chooses to exercise the option early. Assuming no early assignment, one of two things will happen at the option expiration date: ABC trades at or above $20.00 per share. In this case, the put option will expire worthless in the hands of the put buyer. You will have pocketed the $200 and be absolved from your obligation. This case, where ABC trades above the exercise price, is the maximum profit potential. ABC trades below $20.00 per share. In this case, the put option will be assigned and you'll need to fork over $2000 to the put buyer in exchange for his 100 ABC shares. If those shares are worth less than $18.00 in the market, then you've suffered a loss to the extent they are below that price (times 100), because remember – you pocketed $200 premium in the first place. If the shares are between $18.00 to $20.00, you're still profitable, but not to the full extent of the premium received. You can see that by having written a put it's possible to acquire ABC stock at a price lower than the market price – because you received some premium in the process of writing your put. If you don't "succeed" in acquiring shares on your first write (because the shares didn't get below the exercise price), you can continue to write puts and collect premium until you do get assigned. I have read the book "Money for Nothing (And Your Stocks for FREE!)" by Canadian author Derek Foster. Despite the flashy title, the book essentially describes Derek's strategy for writing puts against dividend-paying value stocks he would love to own. Derek picks quality companies that pay a dividend, and uses put writing to get in at lower-than-market prices. Four Pillars reviewed the book and interviewed Derek Foster: Money for Nothing: Book Review and Interview with Derek Foster. Writing puts entails risk. If the stock price drops to zero then you'll end up paying the put exercise price to acquire worthless shares! So your down-side can easily be multiples of the premium collected. Don't do this until and unless you understand exactly how this works. It's advanced. Note also that your broker isn't likely to permit you to write puts without having sufficient cash or margin in your account to cover the case where you are forced to buy the stock. You're better off having cash to secure your put buys, otherwise you may be forced into leverage (borrowing) when assigned. Additional Resources: The Montreal Exchange options guide (PDF) that Cart already linked to is an excellent free resource for learning about options. Refer to page 39, "Writing secured put options", for the strategy above. Other major options exchanges and organizations also provide high-quality free learning material:

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What can make a stock price rise without good news or results?

The simple answer could be that one or more "people" decided to buy. By "people," I don't mean individual buyers of 100 shares like you or me, but typically large institutional investors like Fidelity, who might buy millions of shares at a time. Or if you're talking about a human person, perhaps someone like Warren Buffett. In a "thinly" traded small cap stock that typically trades a few hundred shares in a day, an order for "thousands" could significantly move the price. This is one situation where more or less "average" people could move a single stock.

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Does a stock's price represent current liquidation of all shares?

Is the stock's price at any given moment the price at which all shares could be sold to new investors? No. For the simple fact that the current bid/offer always have sizes associated. What you should be looking at is the consolidated price to buy/sell X shares (10bn doesn't really work as not everyone is willing to sell/buy). If you look at the spread of the consolidated price at your quantity level, you'd notice it would be in stark contrast to the spread of the best bid/offer but (by definition) that would be the price to buy or sell X shares to new investors. Edit Calculation of the consolidated price of X shares: You go through the order book and calculate the size-weighted average price until you covered X. Example: So the consolidated price for 3000 shares would be $39.80, the consolidated price for 2000 shares would be $39.90.

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How do I enter Canadian tax info from US form 1042-S and record captial gains from cashing in stock options?

I can't give you a specific answer because I'm not a tax accountant, so you should seek advice from a tax professional with experience relevant to your situation. This could be a complicated situation. That being said, one place you could start is the Canada Revenue Agency's statement on investment income, which contains this paragraph: Interest, foreign interest and dividend income, foreign income, foreign non-business income, and certain other income are all amounts you report on your return. They are usually shown on the following slips: T5, T3, T5013, T5013A To avoid double taxation, Canada and the US almost certainly have a foreign tax treaty that ensures you are only taxed in your country of residence. I'm assuming you're a resident of Canada. Also, this page states that: If you received foreign interest or dividend income, you have to report it in Canadian dollars. Use the Bank of Canada exchange rate that was in effect on the day you received the income. If you received the income at different times during the year, use the average annual exchange rate. You should consult a tax professional. I'm not a tax professional, let alone one who specializes in the Canadian tax system. A professional is the only one you should trust to answer your question with 100% accuracy.

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What traditionally happens to bonds when the stock market crashes?

It depends on why the stocks crashed. If this happened because interest rates shot up, bonds will suffer also. On the other hand, stocks could be crashing because economic growth (and hence earnings) are disappointing. This pulls down interest rates and lifts bonds.

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How to hedge against specific asset classes at low cost

The essence of hedging is to find an investment that performs well under the conditions that you're concerned about. If you're concerned about China stock dropping, then find something that goes up in value if that asset class goes down. Maybe put options on a Chinese index fund, or selling short one of those funds? Or, if you're already "in the money" on your Chinese stock position, set a stop loss: instruct your broker to sell if that stock hits X or lower. That way you keep some gains or limit your losses. That involves liquidating your position, but if you've had a nice run-up, it may be time to consider selling if you feel that the prospects are dimming.

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When does selling (writing) options count for tax purposes?

Generally speaking, you realize options gains or losses for (US) tax purposes when you close out the option position, or when it expires so in your example, if you're discussing an equity option, you'd realize the gain or loss next year, assuming you don't close it out prior to year end. But options tax treatment can get messy fast: Still, if you have no other stock or option positions in the underlying during or within 30 days of the establishment of the naked put, and assuming the option isn't assigned, you won't realize any gains or losses until the year in which the option is closed or expires.

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How to split stock earnings?

If he asked you to invest his money with certain objectives which resulted in you buying specific stocks for him with his money, then sell all the stocks which you bought with his money and the capital and profits to him. You may want to calculate the trading fees that you incurred while buying these specific stocks and taxes from the sale of these stocks, withholding them to over the trading fees that you have already paid and the taxes that you might still need to pay. If you traded with his money no different than yours, then I would think of your investment account as a black box. Calculate the initial money that you both invested at the time you added his capital to the account, calculate how much it all is currently worth, then liquidate and return a percentage equal to that of his initial investment. You can account for trading fees and taxes, subtracting by the same percentage.

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If the put is more expensive than the call, what does it mean

There are many reasons. Here are just some possibilities: The stock has a lot of negative sentiment and puts are being "bid up". The stock fell at the close and the options reflect that. The puts closed on the offer and the calls closed on the bid. The traders with big positions marked the puts up and the calls down because they are long puts and short calls. There isn't enough volume in the puts or calls to make any determination - what you are seeing is part of the randomness of a moment in time.

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Why companies appear in several stock exchanges?

If I buy the one from NSY, is it the "real" Sinopec? No - you are buying an American Depository Receipt. Essentially some American bank or other entity holds a bunch of Sinopec stock and issues certificates to the American exchange that American investors can trade. This insulates the American investors from the cost of international transactions. The price of these ADRs should mimic the price of the underlying stock (including changes the currency exchange rate) otherwise an arbitrage opportunity would exist. Other than that, the main difference between holding the ADR and the actual stock is that ADRs do not have voting rights. So if that is not important to you then for all intents and purposes trading the ADR would be the same as trading the underlying stock.

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ETF's for early retirement strategy

I think the dividend fund may not be what youre looking for. You mentioned you want growth, not income. But I think of dividend stocks as income stocks, not growth. They pay a dividend because these are established companies that do not need to invest so much in capex anymore, so they return it to shareholders. In other words, they are past their growth phase. These are what you want to hold when you have a large nest egg, you are ready to retire, and just want to make a couple percent a year without having to worry as much about market fluctuations. The Russel ETF you mentioned and other small caps are I think what you are after. I recently made a post here about the difference between index funds and active funds. The difference is very small. That is, in any given year, many active ETFs will beat them, many wont. It depends entirely on the market conditions at the time. Under certain conditions the small caps will outperform the S&P, definitely. However, under other conditioned, such as global growth slowdown, they are typically the first to fall. Based on your comments, like how you mentioned you dont want to sell, I think index funds should make up a decent size portion of your portfolio. They are the safest bet, long term, for someone who just wants to buy and hold. Thats not to say they need be all. Do a mixture. Diversification is good. As time goes on dont be afraid to add bond ETFs either. This will protect you during downturns as bond prices typically rise under slow growth conditions (and sometimes even under normal conditions, like last year when TLT beat the S&P...)

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Investing in real estate when the stock market is high, investing in stocks when it's low?

The right time to buy real estate is easy to spot. It's when it is difficult to get loans or when real estate agents selling homes are tripping over each other. It's the wrong time to buy when houses are sold within hours of the sign going up. The way to profit from equities over time is to dollar-cost average a diversified portfolio over time, while keeping cash reserves of 5-15% around. When major corrections strike, buy a little extra. You can make money at trading. But it requires that you exert a consistent effort and stay up to date on your investments and future prospects.

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What are some ways to mitigate the risks of covered calls?

If the position starts losing money as soon as it is put on, then I would close it out ,taking a small loss. However, if it starts making money,as in the stock inches higher, then you can use part of the premium collected to buy an out of money put, thereby limiting your downside. It is called a collar.

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Best way to start investing, for a young person just starting their career?

I tell you how I started as an investor: read the writings of probably the best investor of the history and become familiarized with it: Warren Buffett. I highly recommend "The Essays of Warren Buffett", where he provides a wise insight on how a company generates value, and his investment philosophy. You won't regret it! And also, specially in finance, don't follow the advice from people that you don't know, like me.

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Should I continue to invest in an S&P 500 index fund?

You shouldn't. The Dow has gained 7% annually on average since October 1915(inflation-adjusted). It has also lost 73% of its inflation-adjusted value from 1966 to 1982 meaning that it would have lost you 4.5% annually for 16 years. Furthermore, past performance is not indicative of future results. If stock markets keep performing like they have for the past 100 years, you can expect there will be a point within the next 60-or-so years your stocks will be higher in value than they were when you bought them. With funds you are paying the people managing them which means you are guaranteed to have pyramiding losses that your gains will have to offset. In your case, you are betting with no fundamental knowledge that S&P will be higher than now whenever you need the money which is not even supported by the above assumption. Dollar averaging just means you will be placing many bets which will reduce your expected losses(and your expected gains) when compared to just buying $100K worth of S&P right now. Whatever you invest in, and whatever your time-frame, don't gamble. If you can't say this company(ies) will be $X more valuable than now in X months with probability > Y, then you shouldn't be investing in it. Nobody ever made money by losing money. There are also safer investments than the stock market, like treasury bonds, even if the returns are lousy.

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Is there a difference between buying few shares of an expensive stock vs many shares of an inexpensive one?

One difference is the bid/ask spread will cost you more in a lower cost stock than a higher cost one. Say you have two highly liquid stocks with tiny spreads: If you wanted to buy say $2,000 of stock: Now imagine these are almost identical ETFs tracking the S&P 500 index and extrapolate this to a trade of $2,000,000 and you can see there's some cost savings in the higher priced stock. As a practical example, recently a popular S&P 500 ETF (Vanguard's VOO) did a reverse split to help investors minimize this oft-missed cost.

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What market conditions favor small cap stocks over medium cap stocks?

Small companies are generally able to adapt quickly to take advantage of changing conditions to enter new markets when the economy is growing. This gives them a lot of growth potential under those circumstances. However, in times of crisis, there may not be a lot of new markets to enter, and financing to expand any operations may be impossible to get. Under these conditions, small-caps will suffer relative to large-caps.

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What is the meaning of realization in finance?

Realization is when you actually have something in hand, it isn't just theoretical anymore. For instance, you may win the lottery, but until they hand you a check, you haven't realized the windfall. Another example is that you may be paid a particular hourly wage, but until you cash the paycheck, you haven't realized the pay.

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Do large market players using HFT make it unsafe for individual investors to be in the stock market?

I don't think that HFT is a game-changer for retail investors. It does mean that amateur daytraders need to pack it up and go home, because the HFT guys are smarter, faster and have more money than you. I'm no Warren Buffet, but I've done better in the market over the last 4 years than I ever have, and I've been actively investing since 1995. You need to do your research and understand what you're investing in. Barring outliers like the "Flash Crash", nothing has changed. You have a great opportunity to buy quality companies with long track records of generous dividends right now for the "safe" part of your portfolio. You have great value stock opportunities. You have great opportunities to take risks on good companies the will benefit from economic recovery. What has changed is that the "set it and forget it" advice that people blindly followed from magazines doesn't work anymore. If you expect to park your money in Index funds and don't manage your money, you're going to lose. Remember that saying "Buy low, sell high"? You buy low when everyone is freaked out and you hear Gold commercials 24x7 on the radio.

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What should I do with the stock from my Employee Stock Purchase Plan?

I like C. Ross and MrChrister's advice to not be heavily weighted in one stock over the long run, especially the stock of your employer. I'll add this: One thing you really ought to find out – and this is where your tax advisor is likely able to help – is whether your company's stock options plan use qualified incentive stock options (ISO) or non-qualified stock options (NQO or NSO). See Wikipedia - Incentive stock option for details. From my understanding, only if your plan is a qualified (or statutory) ISO and you hold the shares for at least 1 year of the date of exercise and 2 years from the date of the option grant could your gain be considered a long-term capital gain. As opposed to: if your options are non-qualified, then your gain may be considered ordinary income no matter how long you wait – in which case there's no tax benefit to waiting to cash out. In terms of hedging the risk if you do choose to hold long, here are some ideas: Sell just enough stock at exercise (i.e. taking some tax hit up front) to at least recover your principal, so your original money is no longer at risk, or If your company has publicly listed options – which is unlikely, if they are very small – then you could purchase put options to insure against losses in your stock. Try a symbol lookup at the CBOE. Note: Hedging with put options is an advanced strategy and I suggest you learn more and seek advice from a pro if you want to consider this route. You'll also need to find out if there are restrictions on trading your employer's public stock or options – many companies have restrictions or black-out periods on employee trading, especially for people who have inside knowledge.

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Why are some long term investors so concerned about their entry price?

It has got to do with the irrationality of humans. The so called long term investor is in it for the long term, they are not worried about market fluctuations nor timing the market. But yet they will aim to try to get a bargain when they buy in. It is contradictory in a way. Think about it; if I buy a stock and it drops by 30% I am not worried because I am in it for the long term, but I am worried about getting 1% off when I buy it. They usually tend to buy when the stock starts falling. However, what they don’t realise is when a stock starts falling there is no telling when it will stop. So even if they get a bargain for that day, it is usually quickly wiped out a few days later. Instead, of waiting for the price to find support and start recovering, they are eager to buy what they think is a bargain. I think this type of long term investing is very risky, and the main reason is because the investor has no plan. They just try to buy so called bargain stocks and hold them until they need the money (usually in retirement). But what happens if the stock price is lower when they want to retire than when they bought it? I hope no long term investor was trying to retire in 2008. If they simply had a plan to indicate when they would buy and under what conditions they would sell, and have a risk management plan in place, then maybe they could reduce their risk somewhat and conserve their capital. A good article to read on this is What's Wrong With Long-Term Investing.

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The formula equivalent of EBITDA for personal finance?

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

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what are the pros and cons of structured deposits?

Say we are in 'normal times.' Passbook rates are 5% or so. Longer rates, 6-7%. I offer you a product with these terms, for $10,000 I will return a "Guaranteed" $10,000 in 6 years and based on the stock market, 1% for every 2% the S&P is up beyond 10% at maturity. As the seller of this product, I take $6666, and buy a fixed investment, 6 years at 7% in treasuries will return the $10000. Really. I then take the $3334 and buy out of the money calls on the S&P each year to capture the gains, if any, and to deliver on my promise. This is one example of a structured deposit offering. They can have nearly any terms one can imagine. Tied to any product. S&P, Crude Oil, Gold. Whatever.

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Should I set a stop loss for long term investments?

My broker offers the following types of sell orders: I have a strategy to sell-half of my position once the accrued value has doubled. I take into account market price, dividends, and taxes (Both LTgain and taxes on dividends). Once the market price exceeds the magic trigger price by 10%, I enter a "trailing stop %" order at 10%. Ideally what happens is that the stock keeps going up, and the trailing stop % keeps following it, and that goes on long enough that accrued dividends end up paying for the stock. What happens in reality is that the stock goes up some, goes down some, then the order gets cancelled because the company announces dividends or something dumb like that. THEN I get into trouble trying to figure out how to re-enter the order, maintaining the unrealized gain in the history of the trailing stop order. I screwed up and entered the wrong type of order once and sold stock I didn't want to. Lets look at an example. a number of years ago, I bought some JNJ -- a hundred shares at 62.18. - Accumulated dividends are 2127.75 - My spreadsheet tells me the "double price" is 104.54, and double + 10% is 116.16. - So a while ago, JNJ exceeded 118.23, and I entered a Trailing Stop 10% order to sell 50 shares of JNJ. The activation price was 106.41. - since then, the price has gone up and down... it reached a high of 126.07, setting the activation price at 113.45. - Then, JNJ announced a dividend, and my broker cancelled the trailing stop order. I've re-entered a "Stop market" order at 113.45. I've also entered an alert for $126.07 -- if the alert gets triggered, I'll cancel the Market Stop and enter a new trailing stop.

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When to use a stop limit order over a stop order

This is to protect your position in specific highly volatile market conditions. If the stock is free falling and you only have a stop order at $90, it's possible that this order could be filled at $50 or even less. The limit is to protect you from that, as there are certain very specific times where it's better to just hold the stock instead of taking a huge loss (ie when price is whipsawing).

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Company wants to sell all of its assets, worth more than share price?

Why is the stock trading at only $5 per share? The share price is the perceived value of the company by people buying and selling the stock. Not the actual value of the company and all its assets. Generally if the company is not doing well, there is a perceived risk that it will burn out the money fast. There is a difference between its signed conditional sale and will get money and has got money. So in short, it's trading at $5 a share because the market doesn't feel like it's worth $12 per share. Quite a few believe there could be issues faced; i.e. it may not make the $12, or there will be additional obligations, i.e. employees may demand more layoff compensation, etc. or the distribution may take few years due to regulatory and legal hurdles. The only problem is the stock exchange states if the company has no core business, the stock will be suspended soon (hopefully they can release the $12 per share first). What will happen if I hold shares in the company, the stock gets suspended, and its sitting on $12 per share? Can it still distribute it out? Every country and stock markets have laid out procedures for de-listing a company and closing a company. The company can give $10 as say dividends and remaining later; or as part of the closure process, the company will distribute the balance among shareholders. This would be a long drawn process.

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Whether to prepay mortgage or invest in stocks

In all likelihood, the best thing you can do, if these really are your only two options (ie no other debt at all), paying-down your mortgage will shorten the term of the mortgage, and mean you spend less on your house in the long run. Investing is should be a long-term activity - so yes, the likelihood is that, given a modest investment, it will gain at historical averages over the life of the investment vehicle. However, that is not a guarantee, and is an inherent risk. Whereas paying-down a mortgage lowers your financial obligations and risk, investing increases your risk. I want to know how you got a 2.1% interest rate on a mortgage, though - the lowest I've seen anywhere is 3.25%.

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How risky is it to keep my emergency fund in stocks?

I've read the answers and respect the thought behind them. I'd like to focus on (a) the magnitude of the emergency, and (b) the saving rate of the people affected. 3-6 months is interesting. It's enough not just to fix the car, repair the A/C, etc, but more than enough to lose one's job and recover. (Let's avoid the debate of how long it take to find a job, no amount of 'emergency savings' can solve that.) If one is spending below their means, any unexpected expense that can paid off within, say 3 months, doesn't really need to tap emergency funds (EF). And, at some level of income and retirement savings, one can more easily run a much lower EF. My own situation - I had 9mo worth of expenses saved as EF. We were living well beneath our means, and I was looking at the difference between our mortgage (6%+) vs bank interest (near 0%). I used the funds to pay down principal, refinanced to a lower rate, and at the same closing got a HELOC. The psychology of this is tough, it then appears that for simple expenses, I'd be borrowing from my HELOC. On the other hand, the choice was between a known cost, the $5K/year the money was costing by sitting there plus the lower rate by going to a non-jumbo loan at the time, vs the risk of using 3% money from the HELOC. In the end, the HELOC was never tapped for more than a small portion of its line, and I never regretted the decision. Ironically, it's the person who isn't saving much that need the EF most. If you are a saver, you need to judge how long it would take to replace the funds. I offer the above not as a recommendation, but as devil's advocate to the other excellent advice here. All cash flows are a choice, $100 going here, can't go there. I'd slip in a warning that one should capture matching 401(k) contributions, if offered, before funding the EF. And pay down any high interest debt. After that, the decision of how liquid to be is a personal choice, what worked for my wife and me may not be for everyone.

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What is the stock warrant's expiration date here?

These warrants do not have a fixed expiration date, rather their expiration date is dependant upon the company completing an acquisition. Thirty days after the acquisition is complete the warrants enter their exercise period. The warrants can then be exercised at any time over the next five years. After five years they expire. From the "WARRANT AGREEMENT SOCIAL CAPITAL HEDOSOPHIA HOLDINGS CORP.": A Warrant may be exercised only during the period (the “Exercise Period”) (A) commencing on the later of: (i) the date that is thirty (30) days after the first date on which the Company completes a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination, involving the Company and one or more businesses (a “Business Combination”), and (ii) the date that is twelve (12) months from the date of the closing of the Offering, and (B) terminating at the earliest to occur of (x) 5:00 p.m., New York City time on the date that is five (5) years after the date on which the Company completes its initial Business Combination, (y) the liquidation of the Company in accordance with the Company’s amended and restated memorandum and articles of association, as amended from time to time, if the Company fails to complete a Business Combination, and (z) 5:00 p.m., New York City time on, other than with respect to the Private Placement Warrants, the Redemption Date (as defined below) as provided in Section 6.2 hereof (the “Expiration Date”); provided, however, that the exercise of any Warrant shall be subject to the satisfaction of any applicable conditions, as set forth in subsection 3.3.2 below, with respect to an effective registration statement Source : lawinsder.com

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Can a buy market order be matched with a sell market order in Forex trading?

If there are no limit orders on the opposite side of the book when your market order gets its turn for execution, it should be rejected by the market. A market order should generally not "sit on the book" like your question suggests waiting for another order to arrive. Thus, the situation that you describe should not happen in an ordinary market that is operating in an orderly fashion. This is not to say that your order cannot "sit" for a while in a queue - If there is heavy volume, orders will be executed in order, so your your market order may have to wait for orders entered ahead of it to be processed. But once its turn comes up, that's it. There are some related points to consider: I should caution that my answer is biased a bit to US stock markets, whereas you asked about currency markets. I believe the same basic principles apply, but I'd be swayed by someone with evidence to the contrary. I'd also note that currency tends to be more liquid than stock, so I think it's less likely that this situation would come up. Maybe possible for a "weak" currency or a currency that experiences a sudden crisis of some sort.

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What happened when the dot com bubble burst?

It's tough to share exactly what happened. Go to yahoo and look at the chart for Cisco from 1990 to 2003 or so. From a split adjusted 8 cents a share, it peaked at just under $80 in March 2000, up by a factor of 1000. People were buying in thinking this stock would continue to rise at this pace, but logic says that's preposterous. By April of 2001, it was down to $14, 80% off its high, and later to drop below $10. This was a classic bubble and should be studied so you don't get caught in them. A book titled Extraordinary Popular Delusions & the Madness of Crowds was published in 1841, yes is still an interesting read. Bubbles in markets are not new, but can be recognized and avoided. Cisco at $80 had a market cap of $438B. Had it risen 1000 fold over another decade, it would have been worth $438T, but all the wealth in the US isn't even $75T, so something was wrong, very wrong. This is one story, one stock. A remarkable time. Yes, many companies went under, and the employees lost their jobs. And those who were heavy into the "dotcom" stocks lost as much as 80% (or more) of their wealth. Entire 401(k) accounts dropping this amount due to bad decisions. Those who bailed out in time survived, some doing better than others.

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Withdrawing cash from investment: take money from underperforming fund?

Bob should treat both positions as incomplete, and explore a viewpoint which does a better job of separating value from volatility. So we should start by recognizing that what Bob is really doing is trading pieces of paper (say Stocks from Fund #1 or Bonds from Fund #2, to pick historically volatile and non-volatile instruments.*) for pieces of paper (Greenbacks). In the end, this is a trade, and should always be thought of as such. Does Bob value his stocks more than his bonds? Then he should probably draw from Fund #2. If he values his bonds more, he should probably draw from Fund #1. However, both Bob and his financial adviser demonstrate an assumption: that an instrument, whether stock bond or dollar bill, has some intrinsic value (which may raise over time). The issue is whether its perceived value is a good measure of its actual value or not. From this perspective, we can see the stock (Fund #1) as having an actual value that grows quickly (6.5% - 1.85% = 4.65%), and the bond (Fund #2) as having an actual value that grows slower (4.5% - 1.15$ = 3.35$). Now the perceived value of the stocks is highly volatile. The Chairman of the Fed sneezes and a high velocity trader drives a stock up or down at a rate that would give you whiplash. This perspective aligns with the broker's opinion. If the stocks are low, it means their perceived value is artificially low, and selling it would be a mistake because the market is perceiving those pieces of paper as being worth less than they actually are. In this case, Bob wins by keeping the stocks, and selling bonds, because the stocks are perceived as undervalued, and thus are worth keeping until perceptions change. On the other hand, consider the assumption we carefully slid into the argument without any fanfare: the assumption that the actual value of the stock aligns with its historical value. "Past performance does not predict future results." Its entirely possible that the actual value of the stocks is actually much lower than the historical value, and that it was the perceived value that was artificially higher. It may be continuing to do so... who knows how overvalued the perceived value actually was! In this case, Bob wins by keeping the bonds. In this case, the stocks may have "underperformed" to drive perceptions towards their actual value, and Bob has a great chance to get out from under this market. The reality is somewhere between them. The actual values are moving, and the perceived values are moving, and the world mixes them up enough to make Scratchers lottery tickets look like a decent investment instrument. So what can we do? Bob's broker has a smart idea, he's just not fully explaining it because it is unprofessional to do so. Historically speaking, Bobs who lost a bunch of money in the stock market are poor judges of where the stock market is going next (arguably, you should be talking to the Joes who made a bunch of money. They might have more of a clue.). Humans are emotional beings, and we have an emotional instinct to cut ties when things start to go south. The market preys on emotional thinkers, happily giving them what they want in exchange for taking some of their money. Bob's broker is quoting a well recognized phrase that is a polite way of saying "you are being emotional in your judgement, and here is a phrasing to suggest you should temper that judgement." Of course the broker may also not know what they're doing! (I've seen arguments that they don't!) Plenty of people listened to their brokers all the way to the great crash of 2008. Brokers are human too, they just put their emotions in different places. So now Bob has no clear voice to listen to. Sounds like a trap! However, there is a solution. Bob should think about more than just simple dollars. Bob should think about the rest of his life, and where he would like the risk to appear. If Bob draws from Fund #1 (liquidating stocks), then Bob has made a choice to realize any losses or gains early... specifically now. He may win, he may lose. However, no matter what, he will have a less volatile portfolio, and thus he can rely on it more in the long run. If Bob draws from Fund #2 (liquidating bonds) instead, then Bob has made a choice not to realize any losses or gains right away. He may win, he may lose. However, whether he wins or loses will not be clear, perhaps until retirement when he needs to draw on that money, and finds Fund #1 is still under-performing, so he has to work a few more years before retirement. There is a magical assumption that the stock market will always continue rewarding risk takers, but no one has quite been able to prove it! Once Bob includes his life perspective in the mix, and doesn't look just at the cold hard dollars on the table, Bob can make a more educated decision. Just to throw more options on the table, Bob might rationally choose to do any one of a number of other options which are not extremes, in order to find a happy medium that best fits Bob's life needs: * I intentionally chose to label Fund #1 as stocks and Fund #2 as bonds, even though this is a terribly crude assumption, because I feel those words have an emotional attachment associated to them which #1 and #2 simply do not. Given that part of the argument is that emotions play a part, it seemed reasonable to dig into underlying emotional biases as part of my wording. Feel free to replace words as you see fit to remove this bias if desired.

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Mutual Funds Definition and Role

I think you are asking about actively managed funds vs. indexes and possibly also vs. diversified funds like target date funds. This is also related to the question of mutual fund vs. ETF. First, a fund can be either actively managed or it can attempt to track an index. An actively managed fund has a fund manager who tries to find the best stocks to invest in within some constraints, like "this fund invests in large cap US companies". An index fund tries to match as closely as possible the performance of an index like the S&P 500. A fund may also try to offer a portfolio that is suitable for someone to put their entire account into. For example, a target date fund is a fund that may invest in a mix of stocks, bonds and foreign stock in a proportion that would be appropriate to someone expecting to retire in a certain year. These are not what people tend to think of as the canonical examples of mutual funds, even though they share the same legal structure and investment mechanisms. Secondly, a fund can either be a traditional mutual fund or it can be an exchange traded fund (ETF). To invest in a traditional mutual fund, you send money to the fund, and they give you a number of shares equal to what that money would have bought of the net asset value (NAV) of the fund at the end of trading on the day they receive your deposit, possibly minus a sales charge. To invest in an ETF, you buy shares of the ETF on the stock market like any other stock. Under the covers, an ETF does have something similar to the mechanism of depositing money to get shares, but only big traders can use that, and it's not used for investing, but only for people who are making a market in the stock (if lots of people are buying VTI, Big Dealer Co will get 100,000 shares from Vanguard so that they can sell them on the market the next day). Historically and traditionally, ETFs are associated with an indexing strategy, while if not specifically mentioned, people assume that traditional mutual funds are actively managed. Many ETFs, notably all the Vanguard ETFs, are actually just a different way to hold the same underlying fund. The best way to understand this is to read the prospectus for a mutual fund and an ETF. It's all there in reasonably plain English.

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How to invest with a low net worth

You might want to consider 'investing' a portion of that money into educating yourself. The payoff might not be as immediately obvious or gratifying but with appropriate determination, in the long term it will generate you a much greater return. If you would like to learn about investing, a great starting point would be to buy and read the book 'The Intelligent Investor' by Benjamin Graham. This will be a great barometer for how ready you are to invest in the stock market. If you are able to understand the concepts discussed and comprehend why they are important, you will have gone far in ensuring that you will make adequate returns over your lifetime and will - more importantly - increase the odds of safeguarding your capital.

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Do dark pools have to declare the volume transacted at the end of the day?

Members of the Federal Reserve System keep track of what money a bank has (if it's not in the vault), who owns what shares of stock, who owns what bond, etc. The part of the Federal Reserve System that tracks stock ownership is the Depository Trust Company (DTC). They have a group of subsidiaries that settle various types of security transactions. DTC is a member of the U.S. Federal Reserve System, a limited-purpose trust company under New York State banking law and a registered clearing agency with the Securities and Exchange Commission. There's lots of information on their website describing this process. DTCC's subsidiary, The Depository Trust Company (DTC), established in 1973, was created to reduce costs and provide clearing and settlement efficiencies by immobilizing securities and making "book-entry" changes to ownership of the securities. DTC provides securities movements for NSCC's net settlements1, and settlement for institutional trades (which typically involve money and securities transfers between custodian banks and broker/dealers), as well as money market instruments. Black pools are trades done where the price is not shared with the market. But the DTC is the one who keeps track of who owns which shares. They have records of all net transactions2. The DTC is the counterparty for transactions. When stock moves from one entity to another the DTC is involved. As the central counterparty for the nation's major exchanges and markets, DTCC clears and settles virtually all broker-to-broker equity 1. This is the link that shows that settlements are reported on a "net basis". 2. If broker A sells 1000 shares of something to broker B at 8 and then five minutes later broker B sells the 1000 shares back to A, you cannot be sure that that total volume will be recorded. No net trading took place and there would be fees to pay for no reason if they reported both trades. Note: In dark pool trading quite often the two parties don't know each other. For shares (book-keeping records) to be exchanged it has to be done through a Clearing House.

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How can I estimate the value of private stock behind employee stock options?

It is difficult to value a private company. Most of the valuations is based on how one feels the idea would translate into revenue in some future time. The VC firms take into account various factors to determine the price, but more often then not, its their hunch. Even VC don't make money on all picks, very few picks turn out to be stars, most picks lose money they have invested. Few picks just return their money. So if you feel that the idea/product/brand/people are great and would someday make good money, invest into it. Else stay away.

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Why do so many NFL (pro football) players have charities?

BobbyScon's answer really covers this, but perhaps isn't sufficiently explicit. Reason 1 of the quotation is the largest, by far: Get an Immediate Tax Deduction, but Give Later: You get the tax deduction when the foundation is funded, then make your charitable gifts over time. Having a "personal" foundation means that you make donations whenever it is appropriate from a personal finance point of view, but then actually perform the charitable giving in a time that is convenient. So you fund the foundation on Dec. 31, say; that gets the money out of your hands, and out of your taxable income, for the prior tax year. Then you're not required to do anything else with that money until a time and place where it's convenient to you. In many cases, they set it up not as a foundation but as a Donor Advised Fund. These are of late becoming extremely popular among the wealthy, largely the ease of setting them up and the above. The other major advantage of a Donor Advised Fund is simplicity in tax season: you have exactly one charitable donation recipient, with one receipt (or one set of them if you donate over time).

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How is money actually made from the buying or selling of options?

Not all call options that have value at expiration, exercise by purchasing the security (or attempting to, with funds in your account). On ETNs, they often (always?) settle in cash. As an example of an option I'm currently looking at, AVSPY, it settles in cash (please confirm by reading the documentation on this set of options at http://www.nasdaqomxtrader.com/Micro.aspx?id=Alpha, but it is an example of this). There's nothing it can settle into (as you can't purchase the AVSPY index, only options on it). You may quickly look (wikipedia) at the difference between "American Style" options and "European Style" options, for more understanding here. Interestingly I just spoke to my broker about this subject for a trade execution. Before I go into that, let me also quickly refer to Joe's answer: what you buy, you can sell. That's one of the jobs of a market maker, to provide liquidity in a market. So, when you buy a stock, you can sell it. When you buy an option, you can sell it. That's at any time before expiration (although how close you do it before the closing bell on expiration Friday/Saturday is your discretion). When a market maker lists an option price, they list a bid and an ask. If you are willing to sell at the bid price, they need to purchase it (generally speaking). That's why they put a spread between the bid and ask price, but that's another topic not related to your question -- just note the point of them buying at the bid price, and selling at the ask price -- that's what they're saying they'll do. Now, one major difference with options vs. stocks is that options are contracts. So, therefore, we can note just as easily that YOU can sell the option on something (particularly if you own either the underlying, or an option deeper in the money). If you own the underlying instrument/stock, and you sell a CALL option on it, this is a strategy typically referred to as a covered call, considered a "risk reduction" strategy. You forfeit (potential) gains on the upside, for money you receive in selling the option. The point of this discussion is, is simply: what one buys one can sell; what one sells one can buy -- that's how a "market" is supposed to work. And also, not to think that making money in options is buying first, then selling. It may be selling, and either buying back or ideally that option expiring worthless. -- Now, a final example. Let's say you buy a deep in the money call on a stock trading at $150, and you own the $100 calls. At expiration, these have a value of $50. But let's say, you don't have any money in your account, to take ownership of the underlying security (you have to come up with the additional $100 per share you are missing). In that case, need to call your broker and see how they handle it, and it will depend on the type of account you have (e.g. margin or not, IRA, etc). Generally speaking though, the "margin department" makes these decisions, and they look through folks that have options on things that have value, and are expiring, and whether they have the funds in their account to absorb the security they are going to need to own. Exchange-wise, options that have value at expiration, are exercised. But what if the person who has the option, doesn't have the funds to own the whole stock? Well, ideally on Monday they'll buy all the shares with the options you have at the current price, and immediately liquidate the amount you can't afford to own, but they don't have to. I'm mentioning this detail so that it helps you see what's going or needs to go on with exchanges and brokerages and individuals, so you have a broader picture.

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Is keeping track of your money and having a budget the same thing?

The two are closely related. A budget is a detailed plan for how to spend. Expense tracking is a tool to analyze your previous spending performance. Creating a plan for how to spend your money without any record of your previous spending--is an empty promise to yourself that you will never follow up on. Did I stay within my budget? Doesn't matter, I didn't track the spending anyway. Even if you do plan to track your performance, if you have not previously done so, you won't have a good basis for how much to expect in each category. Most people have a general idea of how much they have spent and many budgets are formed based on that general intuition, but they are often surprised when they track how every penny is spent and look at the totals from month to month and over years. By actually seeing how much has been spent it's easier to pick the big financial drains and target them for reduction, if your desire is more savings, for example. I know people who keep a close eye on what they spend each month, but they don't allocate money in categories for the next month. They don't perform as well on reducing spending, but they often don't care. They feel like they make enough and they save enough, so why worry? I also know people who create an unrealistic budget each month because they haven't done a good job tracking their previous spending. They know what the monthly bills are, but they don't account well for variable or cyclical expenses like repairs, Christmas, etc. Both tools are essential for maximizing your own personal finance.

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Saving/ Investing a lump sum

5 years is very short term, and since you are sure you'll need the money, investing it into the markets should probably not be done. You can toss it in Ally bank for 1% or consider a 5 yr raise your rate CD A decent write-up on time horizons: http://www.investopedia.com/articles/investing/110813/using-time-horizons-investing.asp If you want to go the stock/bond route you can assess the benefits of using something like a vanguard target date fund, or a roboadvisor such as wealthfront or betterment. You need to assess whether you think you may move up your time horizon, say you want to buy a house in 4 years, or, if it is 5 years, are you ok with it being 6.5-7 if there is a market downturn.

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Brief concept about price movement of a particular stock [duplicate]

There isn't a formula like that, there is only the greed of other market participants, and you can try to predict how greedy those participants will be. If someone decided to place a sell order of 100,000 shares at $5, then you can buy an additional 100,000 shares at $5. In reality, people can infer that they might be the only ones trying to sell 100,000 shares right then, and raise the price so that they make more money. They will raise their sell order to $5.01, $5.02 or as high as they want, until people stop trying to buy their shares. It is just a non-stop auction, just like on ebay.

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What is the meaning of public stock price data from before the official first day of trading? [duplicate]

For the case of spinoffs it reflects the market as activities as the specific steps that have to be followed take place. For example the spinoff of Leidos from SAIC in 2013. (I picked this one becasue I knew some of the details) On September 9, 2013, the Board of Directors of SAIC, Inc.(Ticker Symbol (NYSE):SAI) approved the following: The separation of its technical, engineering and enterprise information technology services business through the distribution of shares of SAIC Gemini, Inc. to stockholders. Each stockholder of record of SAIC, Inc. as of September 19, 2013 (Record Date) will receive one (1) share of SAIC Gemini, Inc. common stock for every seven (7) shares of SAIC, Inc. common stock held by such stockholder as of the Record Date. This distribution will be effective after market close on September 27, 2013 (Distribution Date). After the Distribution Date, SAIC Gemini, Inc. will be renamed Science Applications International Corporation (New SAIC). A one (1) for four (4) reverse stock split of the SAIC, Inc. common stock effective as of Distribution Date. After the Distribution Date, SAIC, Inc. will be renamed Leidos Holdings, Inc. (Leidos). Q 11: What are the different trading markets that may occur between Record Date and Distribution Date? A: Beginning two days prior to the Record Date of September 19, 2013 through the Distribution Date on September 27, 2013, there may be three different trading markets available with respect to SAIC, Inc. and the separation. Stock Ticker – SAI (Regular Way Trading with Due Bills): Shares of SAI common stock that trade on the regular-way market will trade with an entitlement to shares of the New SAIC common stock distributed on the Distribution Date. Purchasers in this market are purchasing both the shares of Leidos and New SAIC common stock. Form of Stock Ticker –SAIC (When Issued Trading): Shares of New SAIC common stock may be traded on a “when-issued” basis. These transactions are made conditionally because the security has been authorized, but not yet issued. Purchasers in this market are only purchasing the shares of New SAIC common stock distributed on the Distribution Date. Form of Stock Ticker – LDOS (Ex-Distribution Trading): Shares that trade on the ex-distribution market will trade without an entitlement to shares of New SAIC common stock distributed on the Distribution Date. Purchasers in this market are only purchasing the shares of Leidos common stock. So the stock price for New SAIC starts a few days before the record date of 19 September 2013, while LDOS (new name for the old SAIC) goes back much earlier. But the company didn't split until after the close of business on 27 September 2013. http://investors.saic.com/sites/saic.investorhq.businesswire.com/files/doc_library/file/GeneralStockholder-QuestionsandAnswers.pdf

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Is the Canadian Securities Course (CSC) enough to get started in the finance industry in Canada?

Wikipedia says "The Canadian Securities Course (CSC) offered by the Canadian Securities Institute (CSI) is the initial course required for becoming licensed to work within the Canadian securities industry (outside Quebec) as a securities dealer or securities agent." Src: Candian Securities Course EfficientMarket Canada adds " You require it and further courses for other jobs in the investment industry. Generally some work experience is also required. All of this is governed by various self-regulatory agencies. The material in the course is strong on money making products, and fairly weak on material that would actually protect a consumer from harm. Passing the course is very little indication that you understand what's important about investing, for example, you won't be taught much of anything about the theory of investment, or the markets, or things like the efficient market hypothesis." Src: EfficientMarket.ca on the CSC So it appears that the CSC is necessary to work as certain types of financial agencies. That being said, I doubt it will be enough to get your foot in the door. This seems more like a prerequisite rather than a true qualification, so you'll be competing with MBAs/Finance students and other people who either have experience or training in the financial industry. I'd recommend you look into the Chartered Financial Analyst (CFA) certification as that will provide you with a rigorous knowledge of financial theory as well as asset management, which seems more appropriate for what you'd like to do. From there you'll have to network like crazy and leverage your experience to get in at a Canadian financial firm and eventually wealth management. So yes, I suppose a CSC is a good first step but more will certainly be required and I doubt it will be enough to land you a full time position. Another important factor is age - nobody expects undergrads to have extensive certifications or experience, but it's harder for a 35 year old to enter a new industry, especially finance.

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Do I make money in the stock market from other people losing money?

Do I make money in the stock market from other people losing money? Not normally.* The stock market as a whole, on average, increases in value over time. So if we make the claim that the market is a zero-sum game, and you only make money if other people lose money, that idea is not sustainable. There aren't that many people that would keep investing in something only to continue to lose money to the "winners." The stock market, and the companies inside it, grow in value as the economy grows. And the economy grows as workers add value with their work. Here's an analogy: I can buy a tree seed for very little and plant it in the ground. If I do nothing more, it probably won't grow, and it will be worth nothing. However, by taking the time to water it, fertilize it, weed it, prune it, and harvest it, I can sell the produce for much more than I purchased that seed for. No one lost money when I sell it; I increased the value by adding my effort. If I sell that tree to a sawmill, they can cut the tree into usable lumber, and sell that lumber at a profit. They added their efforts and increased the value. A carpenter can increase the value even further by making something useful (a door, for example). A retail store can make that door more useful by transporting it to a location with a buyer, and a builder can make it even more useful by installing it on a house. No one lost any money in any of these transactions. They bought something valuable, and made it more valuable by adding their effort. Companies in the stock market grow in value the same way. A company will grow in value as its employees produce things. An investor provides capital that the company uses to be able to produce things**, and as the company grows, it increases in value. As the population increases and more workers and customers are born, and as more useful things are invented, the economy will continue to grow as a whole. * Certainly, it is possible, even common, to profit from someone else's loss. People lose money in the stock market all the time. But it doesn't have to be this way. The stock market goes up, on average, over the long term, and so long term investors can continue to make money in the market even without profiting from others' failures. ** An investor that purchases a share from another investor does not directly provide capital to the company. However, this second investor is rewarding the first investor who did provide capital to the company. This is the reason that the first investor purchased in the first place; without the second investor, the first would have had no reason to invest and provide the capital. Relating it to our tree analogy: Did the builder who installed the door help out the tree farmer? After all, the tree farmer already sold the tree to the sawmill and doesn't care what happens to it after that. However, if the builder had not needed a door, the sawmill would have had no reason to buy the tree.

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What causes a stock to drop in price?

A rising tide lifts all ships Most (but not all) stocks trend along with the general market. Some trend right along with the market (and have a beta at, or very near, one) some follow the Market, but are less sensitive (having a beta of less than one). Some are hypersensitive (and would have a beta of greater than one). Beta defined So most of the day to day movement of a stock is because the general market is moving (in the same direction). Of course, exceptional news about the company would cause its price to move independent of the general market. But more often than not the price of a stock moves just because the rest of the market is moving.

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What is this type of risk-free investment called?

My Credit Union offers a market-linked CD where the investment has FDIC protection if it is held to maturity, but otherwise they are linked with the S&P 500. it comes with this warning: Market-Link CDs are not appropriate for all depositors including clients needing a guaranteed interest payment or seeking full participation in the stock market. If redeemed prior to maturity, the amount received will be subject to market risk including interest rate fluctuations an issuer credit quality. So they still do exist. Another credit union I belong to has a similar product. The risk is that if you need the money early, there may be losses. There would also not be a way to switch to a more conservative posture as the CD approached maturity, if you were interested in protecting your gains.

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Can I buy only 4 shares of a company?

Take a look at FolioFN - they let you buy small numbers of shares and fractional shares too. There is an annual fee on the order of US$100/year. You can trade with no fees at two "windows" per day, or at any time for a $15 fee. You are better off leaving the stock in broker's name, especially if you live overseas. Otherwise you will receive your dividends in the form of cheques that might be expensive to try to cash. There is also usually a fee charged by the broker to obtain share certificates instead of shares in your account.

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Meaning of reinvestment

1) When it says "an investment or mutual fund", is a mutual fund not an investment? If no, what is the definition of an investment? A mutual fund is indeed an investment. The article probably mentions mutual funds separately from other investments because it is not uncommon for mutual funds to give you the option to automatically reinvest dividends and capital gains. 2) When it says "In terms of stocks", why does it only mention distribution of dividends but not distribution of capital gains? Since distributions are received as cash deposits they can be used to buy more of the stock. Capital gains, on the other hand, occur when an asset increases in value. These gains are realized when the asset is sold. In the case of stocks, reinvestment of capital gains doesn't make much sense since buying more stock after selling it to realize capital gains results in you owning as much stock as you had before you realized the gains. 3) When it says "In terms of mutual funds", it says about "the reinvestment of distributions and dividends". Does "distributions" not include distributions of "dividends"? why does it mention "distributions" parallel to "dividends"? Used in this setting, dividend and distribution are synonymous, which is highlighted by the way they are used in parallel. 4) Does reinvestment only apply to interest or dividends, but not to capital gain? Reinvestment only applies to dividends in the case of stocks. Mutual funds must distribute capital gains to shareholders, making these distributions essentially cash dividends, usually as a special end of year distribution. If you've requested automatic reinvestment, the fund will buy more shares with these capital gain distributions as well.

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If I plan to buy a car in cash, should I let the dealer know?

In the UK at least, dealers definitely want you to take finance. They get benefits from the bank (which are not insubstantial) for doing this; these benefits translate directly to increased commission and internal rewards for the individual salesman. It's conceivable that the salesman will be less inclined to put himself out for you in any way by sweetening your deal as much as you'd like, if he's not going to get incentives out of it. Indeed, since he's taking a hit on his commission from you paying in cash, it's in his best interests to perhaps be firmer with you during price negotiation. So, will the salesman be frustrated with you if you choose to pay in cash? Yes, absolutely, though this may manifest in different ways. In some cases the dealer will offer to pay off the finance for you allowing you to pay directly in cash while the dealer still gets the bank referral reward, so that everyone wins. This is a behind-the-scenes secret in the industry which is not made public for obvious reasons (it's arguably verging on fraud). If the salesman likes you and trusts you then you may be able to get such an arrangement. If this does not seem likely to occur, I would not go out of my way to disclose that I am planning to pay with cash. That being said, you'll usually be asked very early on whether you are seeking to pay cash or credit (the salesman wants to know for the reasons outlined above) and there is little use lying about it when you're shortly going to have to come clean anyway.

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How can we get a hold of our finances again, with much less time to spend on accounting and budgeting, due to the arrival of our child?

I have also tried Mvelopes in the past, and my experiences match yours. I currently use the desktop version of YNAB:You Need a Budget (YNAB 4), and I like it much better. Where we failed after a while with Mvelopes, we are succeeding with YNAB, and have been now for the last 3.5 years. I don't want this to sound like a commercial for YNAB (I will give important caveats about YNAB later), but here is why I believe we have done better now with YNAB than before with Mvelopes. I hope that these reasons will be useful to you when you are evaluating your next options. As you said, we also found Mvelopes' interface to be slow and glitchy. YNAB 4 is a desktop app (with synching capabilities) that we found to be much quicker and easier to work with than Mvelopes' Flash-based interface. (That was 4 years ago; hopefully Mvelopes has redone their interface since then.) We also struggled with Mvelopes' connection with our banks. With YNAB 4, there is no connection to the bank: everything has to be entered manually. I initially thought this might be worse, but for us it has been better. I can either enter transactions as they happen on the mobile app, or I can hold on to receipts and enter them every day or two in the evening, categorizing as I go. We always have an up-to-date picture of our finances, and we don't have to mess with trying to match up downloaded transactions that have been screwed up, duplicated, or are missing. We aren't really using YNAB much differently than we were using Mvelopes, but we have learned a few tricks that I think have contributed to our success. One of the things we do differently is that I don't obsess about the cash accounts too much. Cash accounts, for us, are the hardest to keep track of, because most of our cash transactions don't have a receipt: we are paying a friend or family member for something, or leaving a tip, or something like that which we forget about when it comes time to enter into the software. As a result, the cash account balances get off. I periodically enter a correcting transaction to get the balances right, and have a budget category specifically for this that we have to put money in for these unknown transactions. Fortunately for us, our cash spending is a small percent of our total spending (we usually pay with a credit card) so this bit of untracked spending isn't that big of a concern. With YNAB, the current month's budget is right in front of you as soon as you open up the app, which makes it easy to adjust your budget during the month, if necessary. With Mvelopes (at least how their app worked 4 years ago), the budget was somewhat hidden after you funded your budget categories, and it was a bit of a pain to move money around between categories. The ability to adjust your budget in the middle of the month is crucial; if you don't do that, you'll get frustrated the first time you find that you don't have enough money in a category for something you need. YNAB makes it very easy to move money around inside your budget. That having been said, you need to be aware that the current version of YNAB is not a desktop application but a web-based app. YNAB 4, the old desktop version which we have been using, is officially unsupported as of the end of 2016. However, I see that it is still available for sale, if you are interested in it, the YNAB4 help site is still up, and the mobile app you would need to work with it on your phone (called YNAB Classic) is still in the app store. As I said, the current YNAB is now a web app, complete with automatic downloading of transactions from your bank. I have no experience with it (other than playing around with it a little), and so I can't tell you how quick the interface is or how well the auto-downloading of transactions works. As an alternative, another web-based solution is EveryDollar, from Dave Ramsey's company. (I have never tried it.) The advantage of this one is that it is free if you choose not to link it to your banks; the automatic downloading of transactions is a paid feature. I wrote an answer a couple of years ago in which I describe two different approaches that budgeting software packages tend to take. I'm not familiar with Buxfer, so I don't know which approach it takes, but perhaps that answer will help you evaluate all of your software options. On the behavior side of things, besides the relaxing of the cash accounting I mentioned above, we also involve my wife a little less in the budgeting process than we used to. (This is by her choice!) I am the one who enters all the transactions into the software (she hands me all her receipts), I reconcile the accounts at the end of the month, and I set the budget for the next month. We have been doing this long enough now that she knows what the budget is, and we only need to discuss it if we want to do something different with the budget than we have been doing in the past. She has the YNAB app on her phone and can see where we are at with all of our budget categories.

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How to interpret stock performance charts “vs S&P 500”

tl;dr: The CNN Money and Yahoo Finance charts are wildly inaccurate. The TD Ameritrade chart appears to be accurate and shows returns with reinvested dividends. Ignoring buggy data, CNN most likely shows reinvested dividends for quoted securities but not for the S&P 500 index. Yahoo most likely shows all returns without reinvested dividends. Thanks to a tip from Grade Eh Bacon, I was able to determine that TD Ameritrade reports returns with reinvested dividends (as it claims to do). Eyeballing the chart, it appears that S&P 500 grew by ~90% over the five year period the chart covers. Meanwhile, according to this S&P 500 return estimator, the five year return of S&P 500, with reinvested dividends, was 97.1% between July 2012 to July 2017 (vs. 78.4% raw returns). I have no idea what numbers CNN Money is working from, because it claims S&P 500 only grew about 35% over the last five years, which is less than half of the raw return. Ditto for Yahoo, which claims 45% growth. Even stranger still, the CNN chart for VFINX (an S&P 500 index fund) clearly shows the correct market growth (without reinvesting dividends from the S&P 500 index), so whatever problem exists is inconsistent: Yahoo also agrees with itself for VFINX, but comes in a bit low even if your assume no reinvestment of dividends (68% vs. 78% expected); I'm not sure if it's ever right. By way of comparison, TD's chart for VFINX seems to be consistent with its ABALX chart and with reality: As a final sanity check, I pulled historical ^GSPC prices from Yahoo Finance. It closed at $1406.58 on 27 Aug 2012 and $2477.55 on 28 Aug 2017, or 76.1% growth overall. That agrees with TD and the return calculator above, and disagrees with CNN Money (on ABALX). Worse, Yahoo's own charts (both ABALX and VFINX) disagree with Yahoo's own historical data.

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Why can it be a bad idea to buy stocks after hours?

During market hours, there are a lot of dealers offering to buy and sell all exchange traded stocks. Dealers don't actually care about the company's fundamentals and they set their prices purely based on order flow. If more people start to buy than sell, the dealer notices his inventory going down and starts upping the price (both his bid and ask). There are also traders who may not be "dealers", but are willing to sell if the price goes high enough or buy if the price goes low enough. This keeps the prices humming along smoothly. During normal trading hours, if you buy something and turn around and sell it two minutes later, you'll probably be losing a couple cents per share. Outside normal market hours, the dealers who continue to have a bid and ask listed know that they don't have access to good price information -- there isn't a liquid market of continuous buying and selling for the dealer to set prices he considers safe. So what does he do? He widens the spread. He doesn't know what the market will open tomorrow at and doesn't know if he'll be able to react quickly to news. So instead of bidding $34.48 and offering at $34.52, he'll move that out to $33 and $36. The dealer still makes money sometimes off this because maybe some trader realized that he has options expiring tomorrow, or a short position that he's going to get a margin call on, or some kind of event that pretty much forces him to trade. Or maybe he's just panicking and overreacting to some news. So why not trade after hours? Because there's no liquidity, and trading when there's no liquidity costs you a lot.

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Are stories of turning a few thousands into millions by trading stocks real?

Warren Buffett pointed out that if you set 1 million monkeys to flipping coins, after ten flips, one monkey in about 1,000 (1,024) actually, would have a "perfect" track record of 10 heads. If you can double your money every three to five years (basically, the outer limit of what is humanly possible), you can turn $1,000 into $1 million in 30-50 years. But your chances of doing this are maybe those of that one in 1,000 monkeys. There are people that believe that if Warren Buffett were starting out today, "today's version" could not beat the historical version. One of the "believers" is Warren Buffett himself (if you read between the lines of his writings). What the promoters do is to use the benefit of hindsight to show that if someone had done such-and-such trades on such-and-such days, they would have turned a few thousand into a million in a few short years. That's "easy" in hindsight, but then challenge them to do it in real time!

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After consulting HR Block, are you actually obligated to file your taxes with them, if they've found ways to save you money?

This is a legal issue, or possibly an ethical issue, and not really a finance issue. And I am not a lawyer. But for what it's worth: Did you sign a written contract with H&R Block? If so, then the terms of that contract would govern. If you signed a contract saying that you agree to file your taxes through them if they meet such-and-such conditions, and they met these conditions, then you are legally obligated. If there was no written contract, then I think any court would take the conversation between you and H&R Block as an oral contract. If H&R Block said, basically, "Okay, we'll calculate what we think your taxes are, and if we come up with something better than what you had before, then you agree to file your taxes through us", and you said "Oh, okay", then that's an oral contract. You agreed to their conditions. Legally, oral contracts are just as binding as written contracts. The only difference is that it is difficult to prove exactly what was said. If you really did agree to these conditions, I suppose you could lie and say you didn't and then try to convince a court that they are the ones lying. Obvious ethical problems there. There are also implied contracts. If HRB's advertising or paperwork says that you're agreeing to file through them if they meet the conditions, I thing that a court would likely rule that you implicitly agreed to their terms by doing the review. In any case, when you go to some place like HRB mostly what you are paying for is their knowledge and expertise. So if they give you the benefit of their expertise -- they tell you how to reduce your taxes -- and then you don't pay them, that seems rather unethical to me. The situation is muddied by the fact that you paid $100 for the review. Is that paying for the basic information, the "tax tip", and paying for them to file is then a contract for additional work? Under some circumstances I'd say yes, that's additional work and thus an additional contract, so in the absence of a contract obligating me, I don't have to do that. The catch in this case is that at that point they must have already pretty much taken all your information and filled out all the forms. All that's left is to press the "send" button and submit the return, right?

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Can you help me find an ETF Selection website that evaluates my ETF holdings?

I used to use etfconnect before they went paid and started concentrating on closed end funds. These days my source of information is spread out. The primary source about the instrument (ETF) itself is etfdb, backed by information from Morningstar and Yahoo Finance. For comparison charts Google Finance can't be beat. For actual solid details about a specific ETF, would check read the prospectus from the managing firm itself. One other comment, never trust a site that "tells you" which securities to buy. The idea is that you need sources of solid information about financial instruments to make a decision, not a site that makes the decision for you. This is due to the fact that everyone has different strategies and goals for their money and a single site saying buy X sell Y will probably lead you to lose your money.

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Is there a finance API of some kind to get all holdings for a specific mutual fund?

Generally, the answer to the availability of holdings of a given mutual fund on a daily basis is no. Thus, an API is non-existent. The reasons for the lack of transparency on a daily basis is that it could/would impact the portfolio managers ability to trade. While this information would not necessarily permit individuals from front running the fund manager's trades, it does give insight in to the market outlook and strategy the fund is employing. The closest you'll be able to get to obtaining a list of holdings is by reading the most recent annual report and the quarterly filings each fund is required to file with the SEC.

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On what time scales are stock support and resistance levels meaningful?

Support and resistance only works as a self-fulfilling prophecy. If everyone trading that stock agrees there's a resistance at so-and-so level, and it is on such-and-such scale, then they will trade accordingly and there will really be a support or resistance. So while you can identify them at any time scale (although as a rule the time scale on which you observed them should be similar to the time scale on which you intend to use them), it's no matter unless that's what all the other traders are thinking as well. Especially if there are multiple possible S/P levels for different time scales, there will be no consensus, and the whole system will break down as one cohort ruins the other group's S/P by not playing along and vice versa. But often fundamentals are expected to dominate in the long run, so if you are thinking of trades longer than a year, support and resistance will likely become meaningless regardless. It's not like that many people can hold the same idea for that long anyhow.

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Are bonds really a recession proof investment?

That depends on how you're investing in them. Trading bonds is (arguably) riskier than trading stocks (because it has a lot of the same risks associated with stocks plus interest rate and inflation risk). That's true whether it's a recession or not. Holding bonds to maturity may or may not be recession-proof (or, perhaps more accurately, "low risk" as argued by @DepressedDaniel), depending on what kind of bonds they are. If you own bonds in stable governments (e.g. U.S. or German bonds or bonds in certain states or municipalities) or highly stable corporations, there's a very low risk of default even in a recession. (You didn't see companies like Microsoft, Google, or Apple going under during the 2008 crash). That's absolutely not the case for all kinds of bonds, though, especially if you're concerned about systemic risk. Just because a bond looks risk-free doesn't mean that it actually is - look how many AAA-rated securities went under during the 2008 recession. And many companies (CIT, Lehman Brothers) went bankrupt outright. To assess your exposure to risk, you have to look at a lot of factors, such as the credit-worthiness of the business, how "recession-proof" their product is, what kind of security or insurance you're being offered, etc. You can't even assume that bond insurance is an absolute guarantee against systemic risk - that's what got AIG into trouble, in fact. They were writing Credit Default Swaps (CDS), which are analogous to insurance on loans - basically, the seller of the CDS "insures" the debt (promises some kind of payment if a particular borrower defaults). When the entire credit market seized up, people naturally started asking AIG to make good on their agreement and compensate them for the loans that went bad; unfortunately, AIG didn't have the money and couldn't borrow it themselves (hence the government bailout). To address the whole issue of a company going bankrupt: it's not necessarily the case that your bonds would be completely worthless (so I disagree with the people who implied that this would be the case). They'd probably be worth a lot less than you paid for them originally, though (possibly as bad as pennies on the dollar depending on how much under water the company was). Also, depending on how long it takes to work out a deal that everyone could agree to, my understanding is that it could take a long time before you see any of your money. I think it's also possible that you'll get some of the money as equity (rather than cash) - in fact, that's how the U.S. government ended up owning a lot of Chrysler (they were Chrysler's largest lender when they went bankrupt, so the government ended up getting a lot of equity in the business as part of the settlement). Incidentally, there is a market for securities in bankrupt companies for people that don't have time to wait for the bankruptcy settlement. Naturally, people who buy securities that are in that much trouble generally expect a steep discount. To summarize:

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Shouldn't a Roth IRA accumulate more than 1 cent of interest per month?

The term 'interest' tends to be used loosely when discussing valuation of stocks. Especially when referring to IRAs which are generally the purvey of common-folk who aren't in the finance industry. Often it is used colloquially to include: Using this definition (which is what I'm guessing your IRA Calculator is doing), your stock would have increased in value by a total of $26 over the course of 10 months. Still not terribly good (only a couple percent increase), but certainly not a couple cents.

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I carelessly invested in a stock on a spike near the peak price. How can I salvage my investment?

You can do several things: After the fact: If you believe the stock will go up, you can buy more stock now, it's what's called "averaging". So, you bought 100 at $10, now it's at $7. To gain money from your original investment it needs to raise to over $10. But if you really think it'll go up, you can buy and average. So you buy, say, 100 more stock at $7, now you have 200 shares at $8.50 average so you gain money on your investment when the stock goes over $8.50 instead of $10. Of course, you risk losing even more money if the stock keeps going down. Before the fact: When you buy stock, set 'triggers'. In most trading houses you can set automatic triggers to fire on conditions you set. When you buy 100 shares at $10, you can set a trigger to automatically sell the 100 shares if it drops below $9, so you limit your losses to 10% (for example).

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Stock trading after a crash

There are two things going on here, neither of which favors this approach. First, as @JohnFx noted, you should be wary of the sunk-cost fallacy, or throwing good money after bad. You already lost the money you lost, and there's no point in trying to "win it back" as opposed to just investing the money you still have as wisely as possible, forgetting your former fortune. Furthermore, the specific strategy you suggest is not a good one. The problem is that you're assuming that, whenever the stock hits $2, it will eventually rebound to $3. While that may often happen, it's far from guaranteed. More specifically, assuming the efficient market hypothesis applies (which it almost certainly does), there are theorems that say you can't increase your expected earning with a strategy like the one you propose: the apparent stability of the steady stream of income is offset by the chance that you lose out if the stock does something you didn't anticipate.

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Is there a government-mandated resource that lists the shareholders of a public company?

You can obtain a stocklist if you file a lawsuit as a shareholder against the company demanding that you receive the list. It's called an inspection case. The company then has to go to Cede and/or the Depository Trust Company who then compiles the NOBO COBO list of beneficiary stockholders. SEC.gov gives you a very limited list of people who have had to file 13g or 13d or similar filings. These are large holders. To get the list of ALL stockholders you have to go through Cede.

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If I sell a stock that I don't have, am I required to buy it before a certain amount of time?

I don't actually have any of this stock. Apparently, it's quite common strategy This is called naked short selling. It's not illegal per se, but there can be some major penalties so you should call your broker and ask them these questions. Intentionally naked short selling is not looked upon favorably. They'll probably try to recommend you a safer shorting system by which:

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How does Robinhood stock broker make money?

Yes, there is a lot they are leaving out, and I would be extremely skeptical of them because of the "reasons" they give for being able to charge $0 commissions. Their reasons are that they don't have physical locations and high overhead costs, the reality is that they are burning venture capital on exchange fees until they actually start charging everyone they suckered into opening accounts. They also get paid by exchanges when users provide liquidity. These are called trade rebates in the maker-taker model. They will start offering margin accounts and charging interest. They are [likely] selling trade data to high frequency trading firms that then fill your stock trades at worse prices (Robinhood users are notorious for complaining about the fills). They may well be able to keep commissions low, as that has been a race to the bottom for a long time. But if they were doing their users any actual favors, then they would be also paying users the rebates that exchanges pay them for liquidity. Robinhood isn't doing anything unique as all brokers do what I mentioned along with charging commissions, and it is actually amazing their sales pitch "$0 commissions because we are just a mobile app lol" was enough for their customers. They are just being disingenuous.

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How is options implied volatility for a stock determined?

There are a few different "kinds" of implied volatility. They are all based on the IVs obtained from the option pricing model you use. (1) Basically, given a few different values (current stock price, time until expiration, right of option, exercise style, strike of the option, interest rates, dividends, etc), you can obtain the IV for a given option price. If you look at the bid of an option, you can calculate the IV for that bid. If you look at the ask, there's a different IV for the ask. You can then look at the mid price, then you have a different IV, and so on and so on. And that's for each strike, in each expiration cycle! So you have a ton of different IVs. (2) In many option trading platforms, you'll see another kind of IV: the IV for each specific expiration cycle. That's calculated based on some of the IVs I mentioned on topic (1). Some kind of aggregation (more on this later). (3) Finally, people often talk about "the IV of stock XYZ". That's, again, an aggregation calculated from many of the IVs mentioned on topic (1). Now, your question seems to be: which IVs, from which options, from which months, with which weight, are part of the expiration cycle IV or for the IV of the stock itself? It really depends on the trading platform you are talking about. But very frequently, people will use a calculation similar to how the CBOE calculates the VIX. Basically, the VIX is just like the IV described on topic (3) above, but specifically for SPX, the S&P 500 index. The very detailed procedure and formulas to calculate the VIX (ie, IV of SPX) is described here: http://cfe.cboe.com/education/vixprimer/about.aspx If you apply the same (or a similar) methodology to other stocks, you'll get what you could call "the IV of stock XYZ".

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Why buying an inverse ETF does not give same results as shorting the ETF

The most fundamental answer is that when you short a stock (or an ETF), you short a specific number of shares on a specific day, and you probably don't adjust this much as the price wobbles goes up and down. But an inverse fund is not tied to a specific start date, like your own transaction is. It adjusts on an ongoing basis to maintain its full specified leverage at all times. If the underlying index goes up, it has to effectively "buy in" because its collateral is no longer sufficient to support its open position. On the other hand, if the underlying index goes down, that frees up collateral which is used to effectively short-sell more of the underlying. So by design it will buy high and sell low, and so any volatility will pump money out of the fund. I say "effectively" because inverse funds use derivatives and contracts, rather than actually shorting the underlying security. Which brings up the less fundamental issue. These derivatives and contracts are relatively opaque; the counter-parties are in it for their own benefit, not yours; and the people who run the fund get their expenses regardless of how you do, and they are hard for you to monitor. This is a hazardous combination.

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How much more than my mortgage should I charge for rent?

I am sorry to say, you are asking the wrong question. If I own a rental that I bought with cash, I have zero mortgage. The guy I sell it to uses a hard money lender (charging a high rate) and finances 100%. All of this means nothing to the prospective tenant. In general, one would look at the rent to buy ratio in the area, and decide whether homes are selling for a price that makes it profitable to buy and then rent out. In your situation, I understand you are looking to decide on a rent based on your costs. That ship has sailed. You own already. You need to look in the area and find out what your house will rent for. And that number will tell you whether you can afford to treat it as a rental or would be better off selling. Keep in mind - you don't list a country, but if you are in US, part of a rental property is that you 'must' depreciate it each year. This is a tax thing. You reduce your cost basis each year and that amount is a loss against income from the rental or might be used against your ordinary income. But, when you sell, your basis is lower by this amount and you will be taxed on the difference from your basis to the sale price. Edit: After reading OP's updated question, let me answer this way. There are experts who suggest that a rental property should have a high enough rent so that 50% of rent covers expenses. This doesn't include the mortgage. e.g. $1500 rent, $750 goes to taxes, insurance, maintenance, repairs, etc. the remaining $750 can be applied to the mortgage, and what remains is cash profit. No one can give you more than a vague idea of what to look for, because you haven't shared the numbers. What are your taxes? Insurance? Annual costs for landscaping/snow plowing? Then take every item that has a limited life, and divide the cost by its lifetime. e.g. $12,000 roof over 20 years is $600. Do this for painting, and every appliance. Then allow a 10% vacancy rate. If you cover all of this and the mortgage, it may be worth keeping. Since you have zero equity, time is on your side, the price may rise, and hopefully, the monthly payments chip away at the loan.

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Why don't people generally save more of their income?

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

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What can I replace Microsoft Money with, now that MS has abandoned it?

I've been budgeting with MS Money since 2004 and was pretty disappointed to hear it's being discontinued. Budgeting is actually a stress-relieving hobby for me, and I can be a bit of a control-freak when it comes to finances, so I decided to start early looking for a replacement rather than waiting until MS Money can no longer download transactions. Here are the pros and cons of the ones I've tried (updated 10/2010): You Need A Budget Pro (YNAB) - Based on the old envelopes system, YNAB has you allot money from each paycheck to a specific budget category (envelope). It encourages you to live on last money's income, and if you have trouble with overspending, that can be a great plan. Personally, I'm a big believer in the envelope concept, so that's the biggest pro I found. Also, it's a downloaded software, so once I've bought it (for about $50) it's mine, without forced upgrades as far as I've seen. The big con for me was that it does not automatically download transactions. I would have to sign on to each institution's website and manually download to the program. Also, coming from Money, I'm used to having features that YNAB doesn't offer, like the ability to store information about my accounts. Overall, it's forward-thinking and a good budgeting system, but will take some extra time to download transactions and isn't really a comprehensive management tool for all my financial needs. You can try it out with their free trial. Mint - This is a free online program. The free part was a major pro. It also looks pretty, if that's important to you. Updating is automatic, once you've got it all set up, so that's a pro. Mint's budgeting tools are so-so. Basically, you choose a category and tell it your limit. It yells at you (by text or email) when you cross the line, but doesn't seem to offer any other incentive to stay on budget. When I first looked at Mint, it did not connect with my credit union, but it currently connects to all my banks and all but one of my student loan institutions. Another recent improvement is that Mint now allows you to manually add transactions, including pending checks and cash transactions. The cons for me are that it does not give me a good end-of-the-month report, doesn't allow me to enter details of my paychecks, and doesn't give me any cash-flow forecasting. Overall, Mint is a good casual, retrospective, free online tool, but doesn't allow for much planning ahead. Mvelopes - Here's another online option, but this one is subscription-based. Again, we find the old envelopes system, which I think is smart, so that's a pro for me. It's online, so it downloads transactions automatically, but also allows you to manually add transactions, so another pro. The big con on this one is the cost. Depending on how you far ahead you choose to pay (quarterly, yearly or biannually), you're paying $7.60 to $12 per month. They do offer a free trial for 14 days (plus another 14 days offered when you try to cancel). Another con is that they don't provide meaningful reports. Overall, a good concept, but not worth the cost for me. Quicken - I hadn't tried Quicken earlier because they don't offer a free trial, but after the last few fell short, I landed with Quicken 2009. Pro for Quicken, as an MS Money user is that it is remarkably similar in format and options. The registers and reports are nearly identical. One frustration I'd had with Money was that it was ridiculously slow at start-up, and after a year or so of entering data, Quicken is dragging. Con for Quicken, again as an MS Money user, is that it's budgeting is not as detailed as I would like. Also, it does not download transactions smoothly now that my banks all ask security questions as part of sign-in. I have to sign in to my bank's website and manually download. Quicken 2011 is out now, but I haven't tried it yet. Hopefully they've solved the problem of security questions. Quicken 2011 promises an improved cash-flow forecast, which sounds promising, and was a feature of MS Money that I have very much missed. Haven't decided yet if it's worth the $50 to upgrade to 2011.

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