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996b96ba5fca90fc850f72350b973eae
|
501(3)(c) to donators for trophy party
|
[
{
"docid": "a59b47296b44e76628dfc4c7e943030e",
"text": "The good news is that your parent organization is tax exempt and your local organization might be. The national organization even has guidelines and even more details. Regarding donations they have this to say: Please note: The law requires charities to furnish disclosure statements to donors for such quid pro quo donations in excess of $75.00. A quid pro quo contribution is a payment made partly as a contribution and partly for goods or services provided to the donor by the charity. An example of a quid pro quo contribution is when the donor gives a charity $100.00 in consideration for a concert ticket valued at $40.00. In this example, $60.00 would be deductible because the donor’s payment (quid pro quo contribution) exceeds $75.00. The disclosure statement must be furnished even though the deductible amount does not exceed $75.00. Regarding taxes: Leagues included under our group exemption number are responsible for their own tax filings with the I.R.S. Leagues must file Form 990 EZ with Schedule A if gross receipts are in excess of $50,000 but less than $200,000. Similar rules also apply to other youth organizations such as scouts, swim teams, or other youth sports.",
"title": ""
}
] |
[
{
"docid": "5d6afc3edac4b049f27acdbc504bb8f6",
"text": "The $20k limit seems to be (from another answer) the threshold for GoFundMe to report the campaign. However, such a report does not change the taxability of the income. The income is either taxable or non-taxable regardless of whether the amount is $19,999 or $20,001. This is a common misconception, commonly seen when people think that income or gambling winnings are not taxable below $600, when in reality $600 is the threshold for issuing a Form 1099. Given that, it would be foolish to close a wildly successful (*) GoFundMe campaign, because closing the campaign won't change the taxability of the income. But it will probably cut off the continued donations you may have received. With the amount of money at stake, you should spend the couple hundred dollars to hire a CPA to look at your specific situation. Your uncle's comments are not specific to your situation at best, incorrect at worst, so don't hire him. (*) I don't know what the median GoFundMe campaign raises, but I strongly suspect it's well below the $20k/200 donor reporting limit. Just because you have one campaign that's gone viral enough to approach that limit, doesn't mean if you close that one and start a new one, that it will go viral again, especially if it's under a new username.",
"title": ""
},
{
"docid": "84a912867ea4a55c8bfda3e840e4589c",
"text": "No, it is not a taxable event. You will not have to pay tax on the $500 in this scenario. See the IRS publication 590-A: To recharacterize a contribution, you generally must have the contribution transferred from the first IRA (the one to which it was made) to the second IRA in a trustee-to-trustee transfer. If the transfer is made by the due date (including extensions) for your tax return for the tax year during which the contribution was made, you can elect to treat the contribution as having been originally made to the second IRA instead of to the first IRA. If you recharacterize your contribution, you must do all three of the following. Include in the transfer any net income allocable to the contribution. If there was a loss, the net income you must transfer may be a negative amount. Report the recharacterization on your tax return for the year during which the contribution was made. Treat the contribution as having been made to the second IRA on the date that it was actually made to the first IRA.",
"title": ""
},
{
"docid": "900adb9bbdf3136da55ded446a22ad2b",
"text": "\"There is no simple rule like \"\"you can/can't spend more/less than $X per person.\"\" Instead there is a reasonableness test. There is such a thing as an audit of just your travel and entertainment expenses - I know because I've had one for my Ontario corporation. I've deducted company Christmas parties, and going-away dinners for departing employees, without incident. (You know, I presume, about only deducting half of certain expenses?) If the reason for the entertainment is to acquire or keep either employees or clients, there shouldn't be a problem. Things are slightly trickier with very small companies. Microsoft can send an entire team to Hawaii, with their families, as a reward at the end of a tough project, and deduct it. You probably can't send yourself as a similar reward. If your party is strictly for your neighbours, personal friends, and close family, with no clients, potential clients, employees, potential employees, suppliers, or potential suppliers in attendance, then no, don't deduct it. If you imagine yourself telling an auditor why you threw the party and why the business funded it, you'll know whether it's ok to do it or not.\"",
"title": ""
},
{
"docid": "27d27937f2c74677c95a2f7d5766c30a",
"text": "\"Standard federal candidate political donations are limited to $2700 per candidate per election. The primary and general elections are different elections for this purpose. Source: http://www.fec.gov/pages/brochures/citizens.shtml There are no tax implications to a campaign contribution. Even if you contribute to the campaign of someone to whom you have made gifts now or in the past, that does count. You are contributing to the campaign, not the person. Such money has to be used for campaign purposes. The candidate could be prosecuted (for something like embezzlement) for using the funds for something else. Example source: http://www.rothcpa.com/archives/006985.php Congress itself ordered the IRS away from direct political contributions by enacting what is now Code Section 2501(c)(4) in 1975, which prohibits gift tax assessments on \"\"political organizations,\"\" defined by Section 527 as \"\"...a party, committee, association, fund, or other organization (whether or not incorporated) organized and operated primarily for the purpose of directly or indirectly accepting contributions or making expenditures, or both, for an exempt function.\"\" There is no way to donate to a candidate's campaign in a tax deductible way. The only tax-deductible money in politics is money given to a charity that the charity then uses to fund their own campaigning activities like advertisements or get out the vote calls. Such spending might supplant some candidate spending, but it can't be given to the candidate's campaign to spend. In fact, such spending can't be coordinated with the campaign at all. Example source: http://blogs.hrblock.com/2013/03/04/how-to-capture-political-contributions-on-your-tax-return/ If you wrote a check for a presidential candidate or even a local mayoral candidate, you’re out of luck when it comes to deductions. Contributions given directly to campaigns and parties are absolutely non-deductible. Note that it spends a lot of time explaining how you can deduct contributions to independent charities that happen to do campaign work.\"",
"title": ""
},
{
"docid": "f9460e77e47a9f0243cd73d416144d7f",
"text": "Thanks for clarifying. Also, I know Goodwill, and most likely the others, aren't technically one entity, but rather many entities under the same operating name, so there are many CEOs that work for Goodwill. Maybe there is one that heads the whole thing, but I wonder how much is going to all the C-levels?",
"title": ""
},
{
"docid": "c7c6dd68f11e43b59b0781486252ba82",
"text": "No, it doesn't work like this. Your charitable contribution is limited to the FMV. In your scenario your charitable contribution is limited by the FMV, i.e.: you can only deduct the worth of the stocks. It would be to your advantage to sell the stocks and donate cash. Had your stock appreciated, you may be required to either deduct the appreciation amount from the donation deduction or pay capital gains tax (increasing your basis to the FMV), depending on the nature of your donation. In many cases - you may be able to deduct the whole value of the appreciated stock without paying capital gains. Read the link below for more details and exceptions. In this scenario, it is probably more beneficial to donate the stock (even if required to pay the capital gains tax), instead of selling and donating cash (which will always trigger the capital gains tax). Exceptions. However, in certain situations, you must reduce the fair market value by any amount that would have been long-term capital gain if you had sold the property for its fair market value. Generally, this means reducing the fair market value to the property's cost or other basis. You must do this if: The property (other than qualified appreciated stock) is contributed to certain private nonoperating foundations, You choose the 50% limit instead of the special 30% limit for capital gain property, discussed later, The contributed property is intellectual property (as defined earlier under Patents and Other Intellectual Property ), The contributed property is certain taxidermy property as explained earlier, or The contributed property is tangible personal property (defined earlier) that: Is put to an unrelated use (defined later) by the charity, or Has a claimed value of more than $5,000 and is sold, traded, or otherwise disposed of by the qualified organization during the year in which you made the contribution, and the qualified organization has not made the required certification of exempt use (such as on Form 8282, Donee Information Return, Part IV). See also Recapture if no exempt use , later. See more here.",
"title": ""
},
{
"docid": "5126dea88a1255985cad7b47b0b23c47",
"text": "\"From the poster's description of this activity, it doesn't look like he is engaged in a business, so Schedule C would not be appropriate. The first paragraph of the IRS Instructions for Schedule C is as follows: Use Schedule C (Form 1040) to report income or loss from a business you operated or a profession you practiced as a sole proprietor. An activity qualifies as a business if your primary purpose for engaging in the activity is for income or profit and you are involved in the activity with continuity and regularity. For example, a sporadic activity or a hobby does not qualify as a business. To report income from a nonbusiness activity, see the instructions for Form 1040, line 21, or Form 1040NR, line 21. What the poster is doing is acting as a nominee or agent for his members. For instance, if I give you $3.00 and ask you to go into Starbucks and buy me a pumpkin-spice latte, you do not have income or receipts of $3.00, and you are not engaged in a business. The amounts that the poster's members are forwarding him are like this. Money that the poster receives for his trouble should be reported as nonbusiness income on Line 21 of Form 1040, in accordance with the instructions quoted above and the instructions for Form 1040. Finally, it should be noted that the poster cannot take deductions or losses relating to this activity. So he can't deduct any expenses of organizing the group buy on his tax return. Of course, this would not be the case if the group buy really is the poster's business and not just a \"\"hobby.\"\" Of course, it goes without saying that the poster should document all of this activity with receipts, contemporaneous emails (and if available, contracts) - as well as anything else that could possibly be relevant to proving the nature of this activity in the event of an audit.\"",
"title": ""
},
{
"docid": "47db02449dacb349c3715382d3451eda",
"text": "\"This is the best tl;dr I could make, [original](http://www.reuters.com/investigates/special-report/usa-bodies-brokers/) reduced by 98%. (I'm a bot) ***** > Few state laws provide any oversight whatsoever, and almost anyone, regardless of expertise, can dissect and sell human body parts. > "There is a big market for dead bodies," said Ray Madoff, a Boston College Law School professor who studies how U.S. laws treat the dead. "We know very little about who is acquiring these bodies and what they are doing with them.\"\" > Generally, a broker can sell a donated human body for about $3,000 to $5,000, though prices sometimes top $10,000. ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/78gdhw/each_year_thousands_of_americans_donate_their/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ \"\"Version 1.65, ~234179 tl;drs so far.\"\") | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr \"\"PM's and comments are monitored, constructive feedback is welcome.\"\") | *Top* *keywords*: **body**^#1 **broker**^#2 **part**^#3 **state**^#4 **funeral**^#5\"",
"title": ""
},
{
"docid": "aded402bd51de6c5e624d61882af5c79",
"text": "I'm not a lawyer and someone more knowledgeable than I will probably respond to this inquiry. I worked with nonprofits for years however. My suggestion would be that the Board would have a resolution allowing the Director to approve any contract below a certain dollar amount.",
"title": ""
},
{
"docid": "75e2293fcce852f69103ce344758c510",
"text": "\"A slower approach: keep any discussion of income out of it to begin with. Remaining within discretionary income Z, just go back to the charities your SO has proposed, and say that you would like to set up monthly donations. You would also like to donate a similar amount to charities of your choice. Say what bills your proposed contribution is less than. Once your SO has got used to the idea of charitable giving as a regular expenditure, and has got back the grateful charity newsletters and whatnot, then address the issue of how much you \"\"should\"\" give by comparison with income. Whenever you do consider income, your SO doesn't really seem to want anything to do with this. So I'd approach it as seeking agreement. Eric Lippert has a more long-term approach for seeking involvement. So, present the following information however seems best, probably with a pre-amble establishing that you both want to support charities, so the question is how much and how to get it done. \"\"We earn U. This means we are fortunate enough to be in the top V% of households. Our income breaks down as: This being the case, we can afford to be generous. I would like us to give to the charities that we each care about, to the extent of N. Charitable giving is important to me because ... The amount I suggest we give is less than what we spend annually on ..., and I chose that amount because ... \"\" Depending on the tax situation, you may then have to explain how N from gross income translates to an actual amount available to give to charity. Or charitable giving might be tax free. If the N you want is greater than Z-A then it might be wise to suggest a smaller amount, but ask that you both make a plan in increase it in a year or whatever. Similarly if N strikes your SO as a scarily large number then I would think the best thing to do is just reduce it so that at least you start somewhere. If Y is low or zero, and your SO suffers from anxiety about financial security, then increasing Y at the same time might be a good way to offset the fear of N. When stating income you might want to exclude any income from savings/investments. Although legally it's income your SO might see it psychologically as capital gains and hence touching it would endanger your savings/investment/pension returns. Even though it's all fungible.\"",
"title": ""
},
{
"docid": "c4d26b2fb860a8494b39c4bb01b53476",
"text": "No. You should only donate appreciated stock. If you own a stock at a loss, you can only deduct the FMV (fair market value) when you donate. Instead, you should sell it, take the loss on your taxes, and donate the cash.",
"title": ""
},
{
"docid": "c775494620aeef8bee1dab5754abcf17",
"text": "If you have a software company, that can produce a box of software for $5, but the box sells for $100. (You have to make a profit and cover development costs) But then you give these boxes to charity, that is a cost of $5 each and a tax rebate of $100 x 40% = $40. A profit of $35 per donation of $5. Note: You can only do this if you have taxable profit to offset it against.",
"title": ""
},
{
"docid": "25faeedfce4fc9db142bcf1af0d49817",
"text": "Assuming that what you want to do is to counter the capital gains tax on the short term and long term gains, and that doing so will avoid any underpayment penalties, it is relatively simple to do so. Figure out the tax on the capital gains by determining your tax bracket. Lets say 25% short term and 15% long term or (0.25x7K) + (0.15*8K) or $2950. If you donate to charities an additional amount of items or money to cover that tax. So taking the numbers in step 1 divide by the marginal tax rate $2950/0.25 or $11,800. Money is easier to donate because you will be contributing enough value that the IRS may ask for proof of the value, and that proof needs to be gathered either before the donation is given or at the time the donation is given. Also don't wait until December 31st, if you miss the deadline and the donation is counted for next year, the purpose will have been missed. Now if the goal is just to avoid the underpayment penalty, you have two other options. The safe harbor is the easiest of the two to determine. Look at last years tax form. Look for the amount of tax you paid last year. Not what was withheld, but what you actually paid. If all your withholding this year, is greater than 110% of the total tax from last year, you have reached the safe harbor. There are a few more twists depending on AGI Special rules for farmers, fishermen, and higher income taxpayers. If at least two-thirds of your gross income for tax year 2014 or 2015 is from farming or fishing, substitute 662/3% for 90% in (2a) under the General rule, earlier. If your AGI for 2014 was more than $150,000 ($75,000 if your filing status for 2015 is married filing a separate return), substitute 110% for 100% in (2b) under General rule , earlier. See Figure 4-A and Publication 505, chapter 2 for more information.",
"title": ""
},
{
"docid": "a93f6ac8c24a679353bd5f3311380fee",
"text": "I see two ways you can handle this. Use the gifts for the purpose of creating more free software. This is fundraising, and your cause is writing free software. The language is a little tricky from the PayPal Donate button (emphasis mine): This button is intended for fundraising. If you are not raising money for a cause, please choose another option. Nonprofits must verify their status to withdraw donations they receive. Users that are not verified nonprofits must demonstrate how their donations will be used, once they raise more than $10,000 USD. You don't have to be a nonprofit; they are only requiring existing nonprofits to verify their status. You don't even have to account for the donations if they are below $10,000. Give out your PayPal email address and instruct the gift-givers to simply send you money through their PayPal interface. They can mark it as a gift when they send the money. I think option one is how the various bloggers and other personal users are justifiying their collection of donations, and I think its a valid use of the PayPal Donate button.",
"title": ""
},
{
"docid": "bcfbda6f6efd84f91788beed892a5c23",
"text": "\"Donations, particularly those in the context of you providing a free service (software, libraries, etc.) are a notable grey area in tax code. Simply naming a button \"\"Donate\"\" doesn't necessarily classify the money transfer as a \"\"gift\"\". The IRS can decide that it's money you're being paid to continue your excellent work/service, making it taxable income (unless you're a registered non-profit organization). In the instance of Patreon, and many other crowd-funding services, you're providing a certain level of \"\"service\"\" for each tier of donations (such as early access or something, I'm not sure what you're offering), which means they're receiving consideration for their donations, which most likely makes it fall into taxable income (again, unless you're a registered non-profit organization). State tax law is even more convoluted, and you should consult your tax professional for clarification on your specific situation.\"",
"title": ""
}
] |
fiqa
|
01bebc0abfa30c0610d18e764eaefd87
|
Is there any truth to the saying '99% of the world's millionaires have become rich by doing real estate'?
|
[
{
"docid": "8dbf1e3859ea0f37d09621daca437b12",
"text": "\"I can name far more non-real estate millionaires than those who are. That statistic isn't only not valid, it's not even close. Update: The correct quote is \"\"90% of all Millionaires become so through owning Real Estate\"\" and it's attributed to Andrew Carnegie. Given that he was born in 1835, I can imagine that his statement was true at he time, but not today.\"",
"title": ""
},
{
"docid": "b8b8662496d3ff734aa0b957108abe71",
"text": "\"This quote has it almost backwards. Thomas J. Stanley's recent book (he's one of the duo who researched and wrote about The Millionaire Next Door) claims that the top occupation of millionaires is \"\"business owner / self-employed\"\" (28%). \"\"Real estate investor\"\" is lumped in with \"\"other\"\" (9%), and if the ordering is correct in the list, it's no more than 2% of the total. (source)\"",
"title": ""
},
{
"docid": "d72d8ae713e16d5c9e86727c71e0c4b1",
"text": "78.84% of statistics are made up on the spot.",
"title": ""
},
{
"docid": "4b06fcb490c0ad1c25fd7df94477fd28",
"text": "Most millionaires became millionaires by being very frugal and living well below their means, all the time.",
"title": ""
}
] |
[
{
"docid": "e0d5da798f1bcf302989d8b0d01cc12e",
"text": "\"Private equity firms have a unique structure: The general partners (GP's) of the firm create funds and manage the investments of those funds. Limited partners (LP's) contribute the capital to the funds, pay fees to the GP's, and then make money when the funds' assets grow. I believe the article is saying that ultra high net worth individuals participate in the real estate market by hiring someone to act as a general partner and manage the real estate assets. They and their friends contribute the cash and get shares in the resulting fund. Usually this GP/LP structure is used when the funds purchase or invest in private companies, which is why it is referred to as \"\"private equity structure,\"\" but the same structure can be used to purchase and manage pools of real estate or any other investment asset.\"",
"title": ""
},
{
"docid": "74a8f28c7eb659da142b94cda4f6a897",
"text": "Isn't that a deduction mostly used by the top 1%? There seem to be mostly 2 types of people, those who own many homes, And those that rent them... I always thought the mortgage interest deduction was used substantially more by the wealthy than the middle class... (Luxury homes also offer higher deductions right?)",
"title": ""
},
{
"docid": "8031cefc62322a4ac0c426c8089c9342",
"text": "If you could find a breakdown, I suspect that it would show not just that they are self employed but own their own company. There are many people that are self employed, many of them make a good living at it, but are not millionaires. My neighbour the plumber is a perfect example of this sort of self-employed and comfortable but not rich person. The key to wealth growth is to own (a significant part of) a company. It one way to leverage a smaller amount of money to something much larger. Plough your profits back in to the company to grow it, pay yourself reasonably for some time as the company grows. After it is some size, you can afford to pay yourself more of the profits, if not sell it as a going concern to someone else. One last thought - I am assuming that your book is claiming that they made their money through self-employment, instead of choosing to become self employed after striking rich somewhere. If I were to win the lottery, I might then become a self-employed something, but in that case it was not my self-employment that got me there.",
"title": ""
},
{
"docid": "1649617dc85a5c9b69fe9840f4e87f17",
"text": "\"The crazy thing about this is that $30 million in annual salary and compensation really isn't the end of the story for rich guys. I worked for a REIT a few years back and the guy that founded that REIT made a few million in salary a year. I thought the number seemed a bit low for his lifestyle. He had many properties in the US for his own personal use (around 6-8 BIG homes). He also had a garage that was insane. He had over 25 very expensive cars. My co-workers would say \"\"Nick is airing out his garage\"\" when he drove one to work every day for a month without driving the same vehicle twice in one month. It turns out he owned 30 million shares of stock that paid him $1.00 per share per year. So while his annual compensation was \"\"only\"\" a few million per year, his dividend income was many, many, times that. Think about that next time you see a CEO's annual income and you think that it really isn't as much as you expect.\"",
"title": ""
},
{
"docid": "29a6d40bb337ba3ee5de2c2edec0be53",
"text": "Not really. I benefit from the very rich and so do you. 2/3 of the 1% are self-made or semi-self made billionaires, and we all benefit from the technologies, businesses, and organisations etc. they have created and continue to create. They are some of the most productive people on earth. Secondly, by investing their assets - they enable other's to get investments for their businesses to grow, because they are willing to take risks, most of us can't or won't. You can rob them once for a small time gain, many countries have attempted this, and then found out with the smartest people disincentivized to work, the country grinds to a halt, and slips towards poverty.",
"title": ""
},
{
"docid": "24b82d946ddcb53abe69edbe767f483b",
"text": "\"> Asset prices are high and not matched by real world performance. See, I know a lot of people are saying this, but I'm not entirely sure this is true. Even if some tech stocks are \"\"artificially\"\" boosting the market to crazy levels, can you say it's not warranted? The potential for many are far beyond what we see today. I don't see the current tech stock boom being unable to fulfill like the 1990s boom, and subsequent bust. The infrastructure and logistics weren't there in 1999. They are now. Beyond tech, businesses are doing pretty well. Up and down, earnings reports are looking good. Stocks are high, but still somewhat based on real numbers. Same could be said for real estate. The demand is real, the prices are high, but it's based on demand. The danger is what we're missing, just like in 2008. Chances are, there is a fiction out there. Maybe the fiction is in these tech stocks. Maybe it is on mortgages again. I'm not seeing it. There were people prior to 2008 sounding alarm bells about the real estate market. I haven't seen the equivalent today. In fact, I've seen more people trying to figure out how the heck the next correction will come, and nobody really can answer it. At this rate, there might not be a \"\"built in\"\" cause, and might come externally like Trump going nuts and launching nukes, or another terrorist attack.\"",
"title": ""
},
{
"docid": "e237eca5c9c774578b10e20a3e6b594c",
"text": "The decline in what kind of house you get for $600k is why a lot of people making $100k don't feel rich. I'm amazed at how many houses in my area go for that much, especially when you consider that only 5% of families have the income to consider that affordable.",
"title": ""
},
{
"docid": "4422108668aabeccfe4f5110d9c5ce8f",
"text": "\"I think you came up with a worthy Masters/PhD research project, it is a great question. This is in Australia so it is difficult for me to have complete perspective. However, I can speak about the US of A. To your first point relatively few people inherit their wealth. According to a brief web search about 38% of billionaires, and 20% of millionaires inherited their wealth. The rest are self-made. Again, in the US, income mobility is very common. Some act like high level earners are just born that way, but studies have shown that a great deal of income mobility exists. I personally know people that have grown up without indoor plumbing, and extremely poor but now earn in the top 5% of wage earners. Quid's points are valid. For example a Starbucks, new I-Phone, and a brake job on your car are somewhat catastrophic if your income is 50K/year, hurts if your income is 100K, and an inconvenience if you make 250K/year. These situations are normal and happen regularly. The first person may have to take a pay day loan to pay for these items, the second credit card interest, the third probably has the money in the bank. All of this exaggerates the effect of an \"\"emergency\"\" on one's net worth. To me there is also a chicken-and-egg effect in wealth building and income. How does one build wealth? By investing wisely, planning ahead, budgeting, delaying gratification, finding opportunities, etc... Now if you take those same skills to your workplace isn't it likely you will receive more responsibility, promotions and raises? I believe so. And this too exaggerates the effect on one's net worth. If investing helps you to earn more, then you will have more to invest. To me one of the untold stories of this graph is not just investing, but first building a stable financial base. Having a sufficient emergency fund, having enough and the right kind of insurance, keeping loans to a minimum. Without doing those things first investments might need to be withdrawn, often at an inopportune time, for emergency purposes. Thanks for asking this!\"",
"title": ""
},
{
"docid": "e59d3ee39f5427e4e9cec68ac43462da",
"text": "I don’t understand why people think its okay to write these kinds of articles that mislead the public. First of all, wage mobility in the US is always fluctuating. People move in and out of the 1% all within a lifetime. Secondly, go to Bls.gov there are statistics showing that MOST of the 1% are actually self-made first generation millionaires. Though coming from a wealthy family helps set up the child to a better future it isn’t typically because of inherited money, but is because of the fact that richer parents better educate their kids in FINANCIAL LITERACY. Just remember its easier to spend the wealth empire that your parents built than it is to actually maintain it.",
"title": ""
},
{
"docid": "b4e6968d25044482947fb299c8d5000f",
"text": "\"The first red flag of your \"\"facts\"\": One of the article's sources is an Atlantic article with the title, \"\"Entrepreneurship: The Ultimate White Privilege?\"\". The article rants on and on about politically correct SJW nonsense. Red flag 2: The Andrew J. Oswald \"\"What Makes an Entrepreneur?\"\" study that is cited to prove access to capital is a helping factor (Your daddy money argument) is from 1998. A hell of a lot has changed since then. Forbes reported a 32% jump (up to 70%) of self-made millionaires from 1982 to 2012. Red flag 3: The article was trash, mainly used as a tool to attack \"\"white privileged males\"\". The article only said, \"\"Hey, look a study!\"\" and didn't mention any data. The only actual mention of data in the article is \"\"more than 80% of funding for new businesses comes from personal savings and friends and family.\"\" Well, yeah. That's where most businesses look for their first small investment. Actual facts: [60% of billionaires are self-made](https://www.entrepreneur.com/article/269593) [70%+ percent of millionaires are self-made](http://www.thomasjstanley.com/2014/05/america-where-millionaires-are-self-made/) Btw, thanks for the laugh. Didn't know anyone took Qz serious!\"",
"title": ""
},
{
"docid": "913d6e60dc683f93657a78cf4adb14a9",
"text": "Can't pretend to be an expert in construction or real estate but I'm pretty sure that you can approach the people you know and pay them on a per job basis. I'm pretty sure finding other workers on a per job basis will be easy. I wouldn't say its common but its not uncommon either.",
"title": ""
},
{
"docid": "221da09473d75488fbfed0cc19d08d56",
"text": "\"I'm sorry, but if one of your goals is to \"\"get the small house together at the manor\"\", you're already a huge success by almost the entire world's standards. I don't care if [this](https://gregzavitz.files.wordpress.com/2011/10/1103-linden.jpg) is the \"\"manor\"\" and [this](https://www.theposhshedcompany.co.uk/uploads/products/listings/De_Lange_210317_2_-_Copy.jpg) is the \"\"small house\"\", you're still beating out A LOT of people on the ladder of success.\"",
"title": ""
},
{
"docid": "94e274d66650337c888a371d404e2d7b",
"text": "People just love becoming more well-off than they currently are, and one of the ways they do it is with leverage. Leverage requires credit. That desire is not exclusive to people who are not already well-off. For a well-off person who wants to become more well-off by expanding their real estate ventures, paying cash for property is a terrible way to go about it. The same goes for other types of business or market investment. Credit benefits the well-off even more greatly than it benefits the poor or the middle-class.",
"title": ""
},
{
"docid": "e3feabf3c5377f19e11874057aade2f8",
"text": "\"This article is also light on sources. It overstates inherited wealth. People who work with rich people know the saying \"\"shirtsleeve to shirtsleeve in three generations\"\". There is a proclivity of rich descendants to squander their fortune, which totally negates a majority of this article. In sum, this article and news source insists on itself\"",
"title": ""
},
{
"docid": "a4634d7a68d41488344228497ee382d2",
"text": "Look, the richest guy I know personally is the first college grad in his family, and he is the first generation of natural-born citizens in his family. He worked (and lucked) his way from almost nothing to rich as fuck, but the fact that I happen to know him personally doesn't nullify his status as a statistical outlier.",
"title": ""
}
] |
fiqa
|
ab5350de67df8857c5c9511049f56397
|
Which Roth IRA is the best for a 21 year old who has about $1500?
|
[
{
"docid": "3d5a2e0166cb4843b971abd8c4865292",
"text": "Your question seems like you don't understand what a Roth IRA is. A Roth IRA isn't an investment, per se. It is just a type of account that receives special tax treatment. Just like a checking and savings account are different at a bank, a ROTH IRA account is just flagged as such by a brokerage. It isn't an investment type, and there aren't really different ROTH IRA accounts. You can invest in just about anything inside that account so that is what you need to evaluate. One Roth IRA account is as good as any other.As to what to invest your money in inside a ROTH, that is a huge question and off-topic per the rules against specific investing advice.",
"title": ""
},
{
"docid": "c9fb3797db32b36d9e0384c2cc049454",
"text": "You are young, and therefore have a very long time horizon for investing. Absolutely nothing you do should involve paying any attention to your investments more than once a year (if that). First off, you can only deposit money in an IRA (of whatever kind) if you have taxable income. If you don't, you can still invest, just without the tax benefits of a Roth. My suggestion would be to open an account with a discount brokerage (Schwab, Fidelity, eTrade, etc). The advantage of a brokerage IRA is that you can invest in whatever you want within the account. Then, either buy an S&P 500 or total market index fund within the account, or buy an index-based ETF (like a mutual fund, but trades like a stock). The latter might be better, since many mutual funds have minimum limits, which ETFs do not. Set the account up to reinvest the dividends automatically--S&P 500 yields will far outstrip current savings account yields--and sit back and do nothing for the next 40 or 50 years. Well, except for continuing to make annual contributions to the account, which you should continue to invest in pretty much the same thing until you have enough money (and experience and knowledge) to diversify into bond funds/international funds/individual stocks, etc. Disclaimer: I am not a financial planner. I just manage my own money, and this strategy has mostly kept me from stressing too badly over the last few years of market turmoil.",
"title": ""
},
{
"docid": "09da3c61b08a888272fb92f03df75544",
"text": "You're young. Build a side business in your spare time. Invest in yourself. Fail a few times when you have some time to recover financially. Use the money that you would have let sit in some account and develop your skills, start up an LLC, and build up the capacity to get some real returns on your money. Be a rainmaker, not a Roth taker.",
"title": ""
}
] |
[
{
"docid": "d0573c66b1f43637b5eb8f98852bd746",
"text": "I don't recommend Roth for those in the 25% bracket. If you are in the 25% bracket now, I'd suggest you go pretax and as you are planning to be in a lower bracket in a few years, use that bracket to convert. Depositing today at 25% to convert at 15% in a few years puts you that much ahead. I understand the allure of a Roth heavy strategy. And the fuzzy crystal ball for what the tax code will look like doesn't help. That said, a retiree today who is a few years too young for Social Security will see an Exemption + STD deduction of $10,000, and a 15% bracket ending at $36,250, so $46,250 total with a total tax bill of $4991. A retiree should target $250K-$500K pretax to stay flexible and not miss these low brackets in the future.",
"title": ""
},
{
"docid": "d464892be825839e6f0aa0439aff3047",
"text": "The idea behind a Roth IRA is taxes will go up in the future so you are best off paying less in taxes now than in the future, which is why Roth IRAs are contributed to with post-tax dollars whereas traditional IRAs are contributed to with pre-tax dollars. The theoritical advantage comes when you want to withdrawal your money. With the traditional IRA, when you withdrawal money, you pay ordinary income tax on all withdrawals. With a Roth IRA, all withdrawals (after the age of 59 1/2) are tax free, including any gains you may have made. To illistrate, with a very simple example, assume you make $50,000 and your IRA grows at 5% for 40 years. Traditional IRA - $5,000 Roth IRA - $3,750 ($5,000 after taxes) Traditional IRA - $604,000 Roth IRA - $453,000 Traditional IRA - $604,000 / 15 = $40,266 * 75% (25% tax) = $30,200 / year Roth IRA - $453,000 / 15 = $30,200/ year First, this was not a contrived example and I was surprised the numbers worked out this way. Second, as you can see with this example there is really no advantage either way unless you by into the theory of higher taxes in the future.",
"title": ""
},
{
"docid": "09dd8ce7ea34c7f997882d034c516d13",
"text": "I would just buy a low-cost diversified equity ETF. VTI is pretty solid. Also, JW are you working or in school? If you are working you should consider opening an IRA or Roth IRA. Also if your employer has a 401k or other retirement plan you can contribute to I would advise doing so.",
"title": ""
},
{
"docid": "b2c9d55800920d12987fec8518dbba0a",
"text": "\"That depends, really. Generally speaking, though - Roth IRAs are THE PLACE for Stock-Market/Mutual-Fund investing. All the off the wall (or, not so off the wall) things like Real Estate investments, or buying up gold, or whatever other ideas you hear from people - they may be good or bad or whatnot. But your Roth IRA is maybe not the best place for that sort of thing. The whole philosophy behind IRAs is to deliberately set aside money for the future. Anything reasonable will work for this. Explore interesting investment ideas with today's money, not tomorrow's money. That being said - at your age I would go for the riskier options within what's available. If I were in your situation (and I have been, recently), I would lean toward low-fee mutual funds classified as \"\"Growth\"\" funds. My own personal opinion (THIS IS NOT ADVICE) is that Small Cap International funds are the place to be for young folks. That's a generalized opinion based on my feel for the world, but I don't think I'm personally competent to start making specific stock picks. So, mutual funds makes sense to me in that I can select the fund that generally aligns with my sense of things, and assume that their managers will make reasonably sound decisions within that framework. Of course that assumption has to be backed up with reputation of the specific MF company and the comparative performance of the fund relative to other funds in the same sector. As to the generalized question (how else can you work toward financial stability and independence), outside of your Roth IRA: find ways to boost your earning potential over time, and buy a house before the next bubble (within the next 18 months, I'm GUESSING).\"",
"title": ""
},
{
"docid": "8139827df5aa181c2aa883974232b178",
"text": "Something that's come up in comments and been alluded to in answers, but not explicit as far as I can tell: Even if your marginal tax rate now were equal to your marginal tax rate in retirement, or even lower, a traditional IRA may have advantages. That's because it's your effective tax rate that matters on withdrawls. (Based on TY 2014, single person, but applies at higher numbers for other arrangements): You pay 0 taxes on the first $6200 of income, and then pay 10% on the next $9075, then 15% on $27825, then 25% on the total amount over that up to $89530, etc. As such, even if your marginal rate is 25% (say you earn $80k), your effective rate is much less: for example, $80k income, you pay taxes on $73800. That ends up being $14,600, for an effective rate in total of 17.9%. Let's say you had the same salary, $80k, from 20 to 65, and for 45 years saved up 10k a year, plus earned enough returns to pay you out $80k a year in retirement. In a Roth, you pay 25% on all $10k. In a traditional, you save that $2500 a year (because it comes off the top, the amount over $36900), and then pay 17.9% during retirement (your effective tax rate, because it's the amount in total that matters). So for Roth you had 7500*(returns), while for Traditional the correct amount isn't 10k*(returns)*0.75, but 10k*(returns)*0.821. You make the difference between .75 and .82 back even with the identical income. [Of course, if your $10k would take you down a marginal bracket, then it also has an 'effective' tax rate of something between the two rates.] Thus, Roth makes sense if you expect your effective tax rate to be higher in retirement than it is now. This is very possible, still, because for people like me with a mortgage, high property taxes, two kids, and student loans, my marginal tax rate is pretty low - even with a reasonably nice salary I still pay 15% on the stuff that's heading into my IRA. (Sadly, my employer has only a traditional 401k, but they also contribute to it without requiring a match so I won't complain too much.) Since I expect my eventual tax rate to be in that 18-20% at a minimum, I'd benefit from a Roth IRA right now. This matters more for people in the middle brackets - earning high 5 figure salaries as individuals or low 6 figure as a couple - because the big difference is relevant when a large percentage of your income is in the 15% and below brackets. If you're earning $200k, then so much of your income is taxed at 28-33% it doesn't make nearly as much of a difference, and odds are you can play various tricks when you're retiring to avoid having as high of a tax rate.",
"title": ""
},
{
"docid": "2a4b58782ce98a91cf8fa116d088a391",
"text": "\"I'd suggest you avoid the Roth for now and use pretax accounts to get the greatest return. I'd deposit to the 401(k), enough to get as much match as permitted, then use a traditional IRA. You should understand how tax brackets work, and aim to use pre-tax to the extent it helps you avoid the 25% rate. If any incremental deposit would be 15% money, use Roth for that. Most discussions of the pre-tax / post tax decision talk about 2 rates. That at the time of deposit and time of withdrawal. There are decades in between that shouldn't be ignored. If you have any life change, a marriage, child, home purchase, etc, there's a chance your marginal bracket drops back down to 15%. That's the time to convert to Roth, just enough to \"\"top off\"\" the 15% bracket. Last, I wouldn't count on that pension, there's too much time until you retire to count on that income. Few people stay at one job long enough to collect on the promise of a pension that takes 30+ years to earn, and even if you did, there's the real chance the company cancels the plan long before you retire.\"",
"title": ""
},
{
"docid": "695649f7c084bc87b29cdbeb1cf3f2f2",
"text": "\"I'd first put it in CDs or other short term account. Get through school first, then see where you land. If you have income that allows you to start a Roth IRA, I'd go for that, but keep it safe in case you actually need it back soon. After school, if you don't land a decent job fast, this money might be needed to live on. How long will it last if you take a few months to find work? If you do find a good job, moving, and setting up an apartment has a cost. Once you're there, I'd refer you to the many \"\"getting started\"\" Q&As on this site.\"",
"title": ""
},
{
"docid": "4a8bd91a31ca04c4af230c948f1b6a41",
"text": "I think you're missing several key issues here. First for the facts: IRA contributions are $5500 a year maximum (currently, it changes with inflation), i.e.: you cannot deposit $10K in an IRA account in a single year. IRA withdrawals can only be made if you have something liquid in the IRA. You cannot withdraw from Lending Club IRA unless you manage to sell the notes currently held by you there. Roth IRA is funded with after-tax money, and you can withdraw your deposits in Roth IRA any time for any reason. No 10K limit there, only limited by what you deposited. However the main thing you're missing is this: You can withdraw up to $10K from your IRA for first home purchase without penalty. Pay attention: not without tax but without penalty. So what is the point in depositing $10k into IRA just to withdraw it the next year?",
"title": ""
},
{
"docid": "9fbb645485c8391a06549cd670d37c09",
"text": "Make sure you are hitting the actual max of the 401k. Most think it is 18K, but that is the amount you can contribute into either pre-tax or roth. On top of this, you can also contribute using an after-tax contribution (treated differently from Roth). Total amounts up to 54k (since you are under 50). One thing I would look into for ways to beat interest rates in bank accounts and CDs is Municipal Bond funds, given your high income. I have seen some earning almost 6% tax-free YTD. These also give you liquidity. Definitely keep your 3 mo salary in the bank, but once you get over that while maxing out your 401k, this is a pretty good way to make your money work for you, without crushing you come tax time. Building that muni bond fund account gradually, you can eventually use that account to pay for things like car payments, mortgage, rent, vacation, etc. Just be sure if you go with a mutual fund, that you are aware of any surrender charge schedules. I have seen this done with C Shares, where you can withdraw your investment without penalty after 1 year. Let me know if this is unclear or you would like any additional information. Best of luck!",
"title": ""
},
{
"docid": "5b7c6c045d2c03f178cd96160cd32d98",
"text": "For a young person with good income, 50k sitting in a savings account earning nothing is really bad. You're losing money because of inflation, and losing on the growth potential of investing. Please rethink your aversion to retirement accounts. You will make more money in the long run through lower taxes by taking advantage of these accounts. At a minimum, make a Roth IRA contribution every year and max it out ($5500/yr right now). Time is of the essence! You have until April 15th to make your 2014 contribution! Equities (stocks) do very well in the long run. If you don't want to actively manage your portfolio, there is nothing wrong (and you could do a lot worse) than simply investing in a low-fee S&P 500 index fund.",
"title": ""
},
{
"docid": "fa48d7734554abdb4ab9668e47b9c544",
"text": "Your math is correct. As you point out, because of the commutative property of multiplication, Roth and traditional IRAs offer the same terminal wealth if your tax rate is the same when you pull it out as when you put it in. Roth does lock in your tax rate as of today as you point out, which is why it frequently does not maximize wealth (most of us have a higher tax bracket when we are saving than when we are withdrawing from savings). There are a few other potential considerations/advantages of a Roth: Roth and traditional IRAs have the same maximum contribution amount. This means the effective amount you can contribute to a Roth is higher ($5,500 after tax instead of before). If this constraint is binding for you and you don't expect your tax rate to change, Roth is better. Roth IRAs allow you to withdraw your contributed money (not the gains) at any time without any tax or penalty whatsoever. This can be an advantage to some who would like to use it for something like a down payment instead of keeping it all the way to retirement. In this sense the Roth is more flexible. As your income becomes high, the deductibility of traditional IRA contributions goes to zero if you have a 401(k) at work (you can still contribute but can't deduct contributions). At high incomes you also may be disallowed from contributing to a Roth, but because of the backdoor Roth loophole you can make Roth contributions at any income level and preserve the full Roth tax advantage. Which type of account is better for any given person is a complex problem with several unknowns (like future tax rates). However, because tax rates are generally higher when earning money, for most people who can contribute to them, traditional IRAs maximize your tax savings and therefore wealth. Edit: Note that traditional IRA contributions also reduce your AGI, which is used to compute eligibility for other tax advantages, like the child care tax credit and earned income credit. AGI is also often used for state income tax calculation. In retirement, traditional IRA distributions may or may not be state taxable, depending on your state and circumstances.",
"title": ""
},
{
"docid": "8f3a30c56551f79cc53977e34955a6ee",
"text": "\"GreenMatt - this is a good question, and a question I have asked about whether to invest in a Roth IRA, or a traditional IRA. This is my take on the picture, I'm not sure about your tax situation and how much you'd have to pay for each conversion you did, whether you have extra money to pay those taxes, etc. In my opinion I don't think it would be a good idea to use your 401(k) principal to pay taxes, but to have the extra money to pay these when rolling over so you don't lose any interest, especially since you're near the \"\"end\"\" of your \"\"snowball\"\" effect with interest in your retirement account. Here is a resource to consider. Also, another thing to consider that I don't really see much of on here is inflation. If you're going to be in the same tax bracket as you are now, and if whatever you're contributing to your 401(k) or traditional IRA is NOT bumping you down in the 15% bracket, then I would suggest doing a ROTH IRA. I say this because to me, when I retire, I would have rather paid my taxes throughout the years (I'm 23 and in 25% marginal tax bracket) in a ROTH IRA and pay nothing when I'm withdrawing in 30 years, factors people forget to consider are that the Cost of Living is going to be MUCH MUCH higher for me down the road, and the cost of sending a child to school is going to be much higher as well. Since your child is young, consider this site for the cost of a college education for your child. This is comparing the average cost of education for someone attending college in 2015 versus 2033 (a child born IN 2015). While this seems drastic, and there could be a lot of different things that happen by that time, it's a decent illustration. While the website provided certainly isn't validated by the DoE, I have read multiple articles about this, and they are all very similar. Again, other things could happen between now and your child's college career, but if college becomes \"\"free\"\" we're paying for it, and if it's not free and raises at historical rates you're paying for it. I also don't really want to comment on what is going to happen with taxes over the years, I'm not sure where you live (I'm in the U.S.), but IMO I believe they either A) won't change or B) will raise slightly. As far as SS goes, I think it's fair and definitely more than reasonable to not expect SS in retirement. I'm definitely not counting on it.\"",
"title": ""
},
{
"docid": "6530438ecc6e9d694d90f6f51a6c221e",
"text": "You are mistaken about a Roth IRA. You can take out your contributions at any time with no penalty as long as you don't touch the gains. Also, if the money has been in for 5 years you can withdraw for a first time home purchase. Your concerns about locking up the money are troublesome. You need discipline to save for retirement. That is a known massive expense you will have and it takes a LONG time of saving up to prepare. Be sure to account for the taxes you may owe on the winnings before you start spending the money. Before you sink the money into a down payment on a house, make sure you have several (preferrably) six months of living expenses in savings. If you don't have investment experience, steer away from individual stocks. Invest in index funds with low expense ratios and don't actively trade.",
"title": ""
},
{
"docid": "3236e9263c86aca29d722411f9f18e59",
"text": "I just checked TCF's rates, and they only pay a miserly rate of 0.25%. Banks like Capital One or Sallie Mae pay about 1.15%, which is more than 4x, though still nothing great. Do you expect to use these funds in 5 years (e.g. for down payment on a house), or could you contribute them to an IRA?",
"title": ""
},
{
"docid": "b92a5bc99fafcaec22cca3e45a88c347",
"text": "Your question indicates confusion regarding what an Individual Retirement Account (whether Roth or Traditional) is vs. the S&P 500, which is nothing but a list of stocks. IOW, it's perfectly reasonable to open a Roth IRA, put your $3000 in it, and then use that money to buy a mutual fund or ETF which tracks the S&P 500. In fact, it's ridiculously common... :)",
"title": ""
}
] |
fiqa
|
5f54477a6e198fe0a7c091c8a007f641
|
How do credit card banks detect fraudulent transactions without requiring a travel advisory?
|
[
{
"docid": "f8aa47beede59c8ab5527ab55e505aa7",
"text": "One bank is more willing to risk losses and customer hassle in exchange for lower processing costs than the other bank is. It's strictly a business decision. Regarding how they detect suspicious transactions: Patten detection based on your past usage history. I've gotten calls asking me to confirm that I just placed a large order with a company I'd never bought from before, or in a country that I haven't previously visited, or...",
"title": ""
}
] |
[
{
"docid": "b0c63f8ceefa08c9cd94e5324d84bd46",
"text": "\"Having worked in the financial industry, I can say 9:10 times a card is blocked, it is not actually the financial industry, but a credit/credit card monitoring service like \"\"Falcon\"\" for VISA. If you have not added travel notes or similar, they will decline large, our of country purchases as a way to protect you, from what is most likely fraud. Imagine if you were living in Sweden and making regular steady purchases, then all of a sudden, without warning your card was used in Spain. This would look suspicious on paper, even it was obvious to you. This is less to do with your financial institution, and more to do with increased fraud prevention. Call your bank. They will help you.\"",
"title": ""
},
{
"docid": "4837617bdf0a9de560e77cea4a5805b7",
"text": "\"Along with the commercials for \"\"frog\"\" protection from Discover, most credit card issuers provide fraud protection and zero liability for any unauthorized purchases. As was mentioned in one of the comments, many issuers also will allow temporary \"\"virtual cards\"\" that can be used in places that may not appear to be as reputable. Depending on the type of pre-paid card you are using, you're likely paying some form of a fee for it, and you're certainly not taking advantage of the benefits that a credit card can provide, cash back being a big one. There are no annual fee cards out there that get 2% cash back on every purchase.\"",
"title": ""
},
{
"docid": "2e739a62468debe92fb55e23d02905ae",
"text": "I would recommend pre-paid debit cards. Every quarter a fixed amount of money is loaded onto the card (or a new card is issued). This prevents any large-scale fraud from occurring.",
"title": ""
},
{
"docid": "477e66a58e8ff22d07263518157ef28a",
"text": "Well following your train of thought, if someone used the Visa/Amex/MC gift cards to buy something at another store, couldn't Visa/Amex/MC go to those stores and ask for evidence of who used the cards and then go after those people? The rabbit hole could go pretty deep, but if the amount was large enough they might be motivated to at least make examples of some people to discourage this in the future.",
"title": ""
},
{
"docid": "80519dc892a32a27903d0d13fdc93213",
"text": "It comes down to liability - if a fraudulent transaction takes place with a debit card, you are out $$ until it is resolved - while as with a credit card, the credit lender is out $$ - the credit lender does not like losing $$, and therefore would like to be paid extra $$ for assuming this risk, and they found the merchant as the one most willing to pay. Sometimes the merchant will pass on this cost to the consumer, but often times the credit card company has a contract with the merchant preventing such a fee, because then they would be at a price disadvantage when compared to debit.",
"title": ""
},
{
"docid": "2c682ef5283bb51dbcdf86854fba99e8",
"text": "Yes, but note that some credit card companies let you create virtual cards--you can define how much money is on them and how long they last. If you're worried about a site you can use such a card to make the payment, then get rid of the virtual number so nobody can do dirty deeds with it. In practice, however, companies that do this are going to get stomped on hard by the credit card companies--other than outright scams it basically does not happen. (Hacking is another matter--just pick up the newspaper. It's not exactly unusual to read of hackers getting access to credit card information that they weren't supposed to have access to in the first place.) So long as you deal with a company that's been around for a while the risk is trivial.",
"title": ""
},
{
"docid": "79f31adf9ba96bc685681684d0bfdc6a",
"text": "Banks and credit unions are constantly required to improve their detection methods for suspicious transactions. It's not just big transactions anymore, it's scattered little ones, etc. Our credit union had to buy software that runs through transactions sniffing for suspicious patterns. More regulations and more costs that ultimately get passed on to customers in one way or another. Some of your transactions probably tripped a wire where there was none before.",
"title": ""
},
{
"docid": "2afdb7895ff858324e1611105b470a98",
"text": "\"Bad plan. This seems like a recipe for having your money taken away from you by CBP. Let me explain the biases which make it so. US banking is reliable enough for the common citizen, that everyone simply uses banks. To elaborate, Americans who are unbanked either can't produce simple identity paperwork; or they got an account but then got blacklisted for overdrawing it. These are problems of the poor, not millionaires. Outside of determined \"\"off the grid\"\" folks with political reasons to not be in the banking and credit systsm, anyone with money uses the banking system. Who's not a criminal, anyway. We also have strong laws against money laundering: turning cash (of questionable origin) into \"\"sanitized\"\" cash on deposit in a bank. The most obvious trick is deposit $5000/day for 200 days. Nope, that's Structuring: yeah, we have a word for that. A guy with $1 million cash, it is presumed he has no choice: he can't convert it into a bank deposit, as in this problem - note where she says she can't launder it. If it's normal for people in your country to haul around cash, due to a defective banking system, you're not the only one with that problem, and nearby there'll be a country with a good banking system who understands your situation. Deposit it there. Then retain a US lawyer who specializes in this, and follow his advice about moving the money to the US via funds transfer. Even then, you may have some explaining to do; but far less than with cash. (And keep in mind for those politically motivated off-the-financial-grid types, they're a bit crazy but definitely not stupid, live a cash life everyday, and know the law better than anybody. They would definitely consider using banks and funds transfers for the border crossing proper, because of Customs. Then they'll turn it into cash domestically and close the accounts.)\"",
"title": ""
},
{
"docid": "31fa6913dcce1b5d529f2d45eb778025",
"text": "What sort of amount are we talking about here, and what countries are you travelling to? As long as it's not cash, most countries will neither know or care how much money is in your bank account or on your credit card limit, and can't even check if they wanted to. Even if they can, there are very few countries where they would check without already suspecting you of a crime. I think you're worrying over nothing. Even if it's cash, most countries have no border control anyway, and those who do (UK, Ireland) allow up to £10,000 or so cash without even having to declare it... Just open a second bank account and don't take the card (or cut the card up). Use online banking to transfer money in smaller chunks to your main account. Alternately (or additionally) take a credit card or two with a smaller limit (enough to make sure you're comfortably able to deal with one month plus emergency money). Then set up your regular bank account to pay this credit card off in full every month. If I was really concerned, I'd open a second bank account and add a sensible amount of money to it (enough to cover costs of my stay and avoid questions about whether I can afford my stay, but not so much it would raise question). Then I'd open two credit cards with a limit of perhaps $1000-2000: one covers the costs of living wherever I'm going, the other is for emergencies or if I misjudge and go over my amount per month. Set up your bank to pay these off each month, and you're sorted Honestly, I think you're worrying over nothing. People travel inside Europe every day with millions in the bank and raise no questions. You're legally allowed to have money!",
"title": ""
},
{
"docid": "422e6a852c0f6568b2848a07cab29dfa",
"text": "\"File a John Doe lawsuit, \"\"plaintiff to be determined\"\", and then subpoena the relevant information from Mastercard. John Doe doesn't countersue, so you're pretty safe doing this. But it probably won't work. Mastercard would quash your subpoena. They will claim that you lack standing to sue anyone because you did not take a loss (which is a fair point). They are after the people doing the hacking, and the security gaps which make the hacking possible. And how those gaps arise among businesses just trying to do their best. It's a hard problem. And I've done the abuse wars professionally. OpSec is a big deal. You simply cannot reveal your methods or even much of your findings, because that will expose too much of your detection method. The ugly fact is, the bad guys are not that far from winning, and catching them depends on them unwisely using the same known techniques over and over. When you get a truly novel technique, it costs a fortune in engineering time to unravel what they did and build defenses against it. If maybe 1% of attacks are this, it is manageable, but if it were 10%, you simply cannot staff an enforcement arm big enough - the trained staff don't exist to hire (unless you steal them from Visa, Amex, etc.) So as much as you'd like to tell the public, believe me, I'd like to get some credit for what I've done -- they just can't say much or they educate the bad guys, and then have a much tougher problem later. Sorry! I know how frustrating it is! The credit card companies hammered out PCI-DSS (Payment Card Industry Data Security Standards). This is a basic set of security rules and practices which should make hacking unlikely. Compliance is achievable (not easy), and if you do it, you're off the hook. That is one way Amy can be entirely not at fault. Example deleted for length, but as a small business, you just can't be a PCI security expert. You rely on the commitments of others to do a good job, like your bank and merchant account salesman. There are so many ways this can go wrong that just aren't your fault. As to the notion of saying \"\"it affected Amy's customers but it was Doofus the contractor's fault\"\", that doesn't work, the Internet lynch mob won't hear the details and will kill Amy's business. Then she's suing Mastercard for false light, a type of defamtion there the facts are true but are framed falsely. And defamation has much more serious consequences in Europe. Anyway, even a business not at fault has to pay for a PCI-DSS audit. A business at fault has lots more problems, at the very least paying $50-90 per customer to replace their cards. The simple fact is 80% of businesses in this situation go bankrupt at this point. Usually fraudsters make automated attacks using scripts they got from others. Only a few dozen attacks (on sites) succeed, and then they use other scripts to intercept payment data, which is all they want. They are cookie cutter scripts, and aren't customized for each site, and can't go after whatever personal data is particular to that site. So in most cases all they get is payment data. It's also likely that primary data, like a cloud drive, photo collection or medical records, are kept in completely separate systems with separate security, unlikely to hack both at once even if the hacker is willing to put lots and lots of engineering effort into it. Most hackers are script kiddies, able to run scripts others provided but unable to hack on their own. So it's likely that \"\"none was leaked\"\" is the reason they didn't give notification of private information leakage. Lastly, they can't get what you didn't upload. Site hacking is a well known phenomenon. A person who is concerned with privacy is cautious to not put things online that are too risky. It's also possible that this is blind guesswork on the part of Visa/MC, and they haven't positively identified any particular merchant, but are replacing your cards out of an abundance of caution.\"",
"title": ""
},
{
"docid": "194a463e003ad34bcefb85ba8217cd32",
"text": "While Rocky's answer is correct in the big picture there is another factor here to keep in mind: The disruption while you're waiting to resolve it. If a fraudster gets your card and drains your account you'll get your money back--but there will be a period while they are investigating that it won't be available. For this reason I avoid debit card transactions and only use credit cards. If the fraudster gets your credit card you might lose access while they investigate but you don't lose access to your bank account.",
"title": ""
},
{
"docid": "d145cb58025d07fff4622110a9142fbb",
"text": "Just to put in one more possibility: my credit card can have a positive balance, in which case I earn interest. If more money is due, it will automatically take that from the connected checking account. If that goes into negative, of course I have to pay interest. I chose (argued with the bank in order to get) only a small credit allowance. However, I'll be able to access credit allowance + positive balance. That allows me within a day or so to make larger amounts accessible, while the possible immediate damage by credit card fraud is limited at other times. Actually, the credit card pays more interest than the checkign account. Nevertheless, I don't keep high balance there because the risk of fraud is much higher for the credit card.",
"title": ""
},
{
"docid": "0fea71233abf6dbb5f87e8322d8f21fd",
"text": "\"An international Outlook (in this case Sweden in European Union). According to laws and regulations large cash transactions are considered conspicuous. The law makers might have reasoned is that cash transactions can be used in as example: - financing terrorism - avoiding taxes - buying or selling illegal goods such as drugs or stolen items - general illegal transactions such as paying bribes Starting there, all banks (at least in Europe) are required to report all suspicious transactions to the relevant authorities (in Sweden it is Finanspolisen, roughly the Financial Police). This is regardless of how the transactions are performed, in cash or otherwise. In order to monitor this all banks in Sweden are required to \"\"know the customers\"\", as example where does money come from and go to in general. In addition special software monitors all transactions and flags suspicious patterns for further investigation and possibly notification of the police. So, at least in Sweden: there is no need to get permission from the FBI to withdraw cash. You will however be required to describe the usage of the Money and your description will be kept and possibly sent to the Financial police. The purpose is not to hinder legitimate transactions, but to Catch illegal activities.\"",
"title": ""
},
{
"docid": "6479d2f2685bc1c6a0174388d1d0c22e",
"text": "I don't have much to add other than your signature is not required to process a charge. Signatures are kept on file for validity in the event you dispute a charge. Your signature isn't held in some magical database with signature recognition software. If you draw an shark in the signature section of a receipt that won't stop the charge from processing. In fact, many merchants don't even bother requiring the signature below a certain threshold. There are loads of behind the scenes processing improvements offered by the EMV chip; namely prevention of card number skimming and duplication via encrypted transaction signing. While requiring a PIN adds an additional layer of security, simply processing via chip dramatically improves the network fraud prevention tools in a manner that is almost completely transparent to the user. To your point, if your wallet is lost and an imposer holds your physical card there is no anti-fraud improvement. At any rate, you have zero fraud liability in the US.",
"title": ""
},
{
"docid": "237b046a1a504aac7ff28b5d4f68910b",
"text": "lol- yeah, I know how banks work. My point is EVERY transaction should be recorded somewhere. Banks have both internal and external auditors who's only job it is to monitor the transactions to make sure everything adds up. It just doesn't make sense that the CEO of the company would have so little idea of what is going on. Shades of Enron to me.",
"title": ""
}
] |
fiqa
|
285bb05b9899cf9a6b2df45e929ab168
|
How does the market adjust for fees in ETPs?
|
[
{
"docid": "d70b1f6ea23c653659e2ab13df81f468",
"text": "\"Because ETFs, unlike most other pooled investments, can be easily shorted, it is possible for institutional investors to take an arbitrage position that is long the underlying securities and short the ETF. The result is that in a well functioning market (where ETF prices are what they should be) these institutional investors would earn a risk-free profit equal to the fee amount. How much is this amount, though? ETFs exist in a very competitive market. Not only do they compete with each other, but with index and mutual funds and with the possibility of constructing one's own portfolio of the underlying. ETF investors are very cost-conscious. As a result, ETF fees just barely cover their costs. Typically, ETF providers do not even do their own trading. They issue new shares only in exchange for a bundle of the underlying securities, so they have almost no costs. In order for an institutional investor to make money with the arbitrage you describe, they would need to be able to carry it out for less than the fees earned by the ETF. Unlike the ETF provider, these investors face borrowing and other shorting costs and limitations. As a result it is not profitable for them to attempt this. Note that even if they had no costs, their maximum upside would be a few basis points per year. Lots of low-risk investments do better than that. I'd also like to address your question about what would happen if there was an ETF with exorbitant fees. Two things about your suggested outcome are incorrect. If short sellers bid the price down significantly, then the shares would be cheap relative to their stream of future dividends and investors would again buy them. In a well-functioning market, you can't bid the price of something that clearly is backed by valuable underlying assets down to near zero, as you suggest in your question. Notice that there are limitations to short selling. The more shares are short-sold, the more difficult it is to locate share to borrow for this purpose. At first brokers start charging additional fees. As borrowable shares become harder to find, they require that you obtain a \"\"locate,\"\" which takes time and costs money. Finally they will not allow you to short at all. Unlimited short selling is not possible. If there was an ETF that charged exorbitant fees, it would fail, but not because of short sellers. There is an even easier arbitrage strategy: Investors would buy the shares of the ETF (which would be cheaper than the value of the underlying because of the fees) and trade them back to the ETF provider in exchange for shares of the underlying. This would drain down the underlying asset pool until it was empty. In fact, it is this mechanism (the ability to trade ETF shares for shares of the underlying and vice versa) that keeps ETF prices fair (within a small tolerance) relative to the underlying indices.\"",
"title": ""
},
{
"docid": "420ae9fb9873153545613a339f6e6dda",
"text": "The market doesn't really need to adjust for fees on ETF funds that are often less than 1/10th of a percent. The loss of the return is more than made up for by the diversification. How does the market adjust for trading fees? It doesn't have to, it's just a cost of doing business. If one broker or platform offers better fee structures, people will naturally migrate toward the lower fees.",
"title": ""
}
] |
[
{
"docid": "e1be62ce02096d39859cc6bb774405f7",
"text": "The fee representing the expense ratio is charged as long as you hold the investment. It is deducted daily from the fund assets, and thus reduces the price per share (NAV per share) that is calculated each day after the markets close. The investment fee is charged only when you make an investment in the fund. So, invest in the fund in one swell foop (all $5500 or $6500 for older people, all invested in a single transaction) rather than make monthly investments into the fund (hold the money in a money-market within your Roth IRA if need be). But, do check if there are back-end loads or 12b1 fees associated with the fund. The former often disappear after a few years; the latter are another permanent drain on performance. Also, please check whether reinvestment of dividends and capital gains incur the $75 transaction fee.",
"title": ""
},
{
"docid": "1d78a5b716489ff3fa60038e90e411c1",
"text": "\"Don't put money in things that you don't understand. ETFs won't kill you, ignorance will. The leveraged ultra long/short ETFs hold swaps that are essentially bets on the daily performance of the market. There is no guarantee that they will perform as designed at all, and they frequently do not. IIRC, in most cases, you shouldn't even be holding these things overnight. There aren't any hidden fees, but derivative risk can wipe out portions of the portfolio, and since the main \"\"asset\"\" in an ultra long/short ETF are swaps, you're also subject to counterparty risk -- if the investment bank the fund made its bet with cannot meet it's obligation, you're may lost alot of money. You need to read the prospectus carefully. The propectus re: strategy. The Fund seeks daily investment results, before fees and expenses, that correspond to twice the inverse (-2x) of the daily performance of the Index. The Fund does not seek to achieve its stated investment objective over a period of time greater than a single day. The prospectus re: risk. Because of daily rebalancing and the compounding of each day’s return over time, the return of the Fund for periods longer than a single day will be the result of each day’s returns compounded over the period, which will very likely differ from twice the inverse (-2x) of the return of the Index over the same period. A Fund will lose money if the Index performance is flat over time, and it is possible that the Fund will lose money over time even if the Index’s performance decreases, as a result of daily rebalancing, the Index’s volatility and the effects of compounding. See “Principal Risks” If you want to hedge your investments over a longer period of time, you should look at more traditional strategies, like options. If you don't have the money to make an option strategy work, you probably can't afford to speculate with leveraged ETFs either.\"",
"title": ""
},
{
"docid": "174500b2d286ea36587834083f1490ed",
"text": "Different exchanges sometimes offer different order types, and of course have different trading fees. But once a trade is finished, it should not matter where it was executed.",
"title": ""
},
{
"docid": "9a71e54c51a33edaa86448edea5040c1",
"text": "Your link is pointing to managed funds where the fees are higher, you should look at their exchange traded funds; you will note that the management fees are much lower and better reflect the index fund strategy.",
"title": ""
},
{
"docid": "a9f1d97d08857ec75a4dae304f17d6bd",
"text": "\"This was an article meant for mass consumption, written by a Yale law professor and an individual who has a PhD in economics (in addition to his practical, on the job experience managing the Yale endowment). I'm having a hard time believing that it was \"\"poorly argued.\"\" As for proof, that's the sort of thing you find in financial and economic journals (for example, [The Effect of Maker-Taker Fees on Investor Order Choice and Execution Quality in U.S. Stock Markets](http://people.stern.nyu.edu/jhasbrou/SternMicroMtg/SternMicroMtg2015/Papers/MakerTakerODonoghue.pdf)). One of the direct takeaways from the above paper states: *\"\"I find that total trading cost to investors increases, when the taker fee and maker rebate increase, even if the net fee is held fixed. The total trading cost represents the net-of-fees bid-ask spread and the brokerage commission to an investor wanting to buy and then sell the same stock.\"\"* I'm not here to argue for the paper. I'm really here to tell you that these guys have far more of a clue than you realize. ~~A dash of humility on your part may be in order, given the fact that you've already admitted to the reality that you aren't sure of any of this yourself.~~ *Edit*: Thought I was responding to a different thread.\"",
"title": ""
},
{
"docid": "8d2aec1de811964e2da70276232ae2eb",
"text": "Interesting. How would they account for it? Monthly? And if so do they modify the cost basis for each lot for the month and then restate? It's hard to imagine they do that. I have a million questions regarding this topic do you know where in the regs it is covered?",
"title": ""
},
{
"docid": "b6d4a65012a0447327893fd782a79b46",
"text": "Suppose that the ETF is currently at a price of $100. Suppose that the next day it moves up 10% (to a price of $110) and the following day it moves down 5% (to a price of $104.5). Over these two days the ETF has had a net gain of 4.5% from its original price. The inverse ETF reverses the daily gains/losses of the base ETF. Suppose for simplicity that the inverse ETF also starts out at a price of $100. So on the first day it goes down 10% (to $90) and on the second day it goes up 5% (to $94.5). Thus over the two days the inverse ETF has had a net loss of 5.5%. The specific dollar amounts do not matter here. The result is that the ETF winds up at 110%*95% = 104.5% of its original price and the inverse ETF is at 90%*105% = 94.5% of its original price. A similar example is given here. As suggested by your quote, this is due to compounding. A gain of X% followed by a loss of Y% (compounded on the gain) is not in general the same as a loss of X% followed by a gain of Y% (compounded on the loss). Or, more simply put, if something loses 10% of its value and then gains 10% of its new value, it will not return to its original value, because the 10% it gained was 10% of its decreased value, so it's not enough to bring it all the way back up. Likewise if it gains 10% and then loses 10%, it will go slightly below its original value (since it lost 10% of its newly increased value).",
"title": ""
},
{
"docid": "ed0ed68df5683cfbdc67e5ce8577bcd3",
"text": "Any ETF has expenses, including fees, and those are taken out of the assets of the fund as spelled out in the prospectus. Typically a fund has dividend income from its holdings, and it deducts the expenses from the that income, and only the net dividend is passed through to the ETF holder. In the case of QQQ, it certainly will have dividend income as it approximates a large stock index. The prospectus shows that it will adjust daily the reported Net Asset Value (NAV) to reflect accrued expenses, and the cash to pay them will come from the dividend cash. (If the dividend does not cover the expenses, the NAV will decline away from the modeled index.) Note that the NAV is not the ETF price found on the exchange, but is the underlying value. The price tends to track the NAV fairly closely, both because investors don't want to overpay for an ETF or get less than it is worth, and also because large institutions may buy or redeem a large block of shares (to profit) when the price is out of line. This will bring the price closer to that of the underlying asset (e.g. the NASDAQ 100 for QQQ) which is reflected by the NAV.",
"title": ""
},
{
"docid": "8d3c46645af4eaa9727fc0784df921fd",
"text": "As you mentioned in the title, what you're asking about comes down to volatility. DCA when purchasing stock is one way of dealing with volatility, but it's only profitable if the financial instrument can be sold higher than your sunk costs. Issues to be concerned with: Let's suppose you're buying a stock listed on the NYSE called FOO (this is a completely fake example). Over the last six days, the average value of this stock was exactly $1.00Note 1. Over six trading days you put $100 per day into this stockNote 2: At market close on January 11th, you have 616 shares of FOO. You paid $596.29 for it, so your average cost (before fees) is: $596.29 / 616 = $0.97 per share Let's look at this including your trading fees: ($596.29 + $30) / 616 = $1.01 per share. When the market opens on January 12th, the quote on FOO could be anything. Patents, customer wins, wars, politics, lawsuits, press coverage, etc... could cause the value of FOO to fluctuate. So, let's just roll with the assumption that past performance is consistent: Selling FOO at $0.80 nets: (616 * $0.80 - $5) - ($596.29 + $30) = $123.49 Loss Selling FOO at $1.20 nets: (616 * $1.20 - $5) - ($596.29 + $30) = $107.90 Profit Every day that you keep trading FOO, those numbers get bigger (assuming FOO is a constant value). Also remember, even if FOO never changes its average value and volatility, your recoverable profits shrink with each transaction because you pay $5 in fees for every one. Speaking from experience, it is very easy to paper trade. It is a lot harder when you're looking at the ticker all day when FOO has been $0.80 - $0.90 for the past four days (and you're $300 under water on a $1000 portfolio). Now your mind starts playing nasty games with you. If you decide to try this, let me give you some free advice: Unless you have some research (such as support / resistance information) or data on why FOO is a good buy at this price, let's be honest: you're gambling with DCA, not trading. END NOTES:",
"title": ""
},
{
"docid": "a466255400ad63956a96c33886d5dda3",
"text": "\"You don't \"\"deduct\"\" transaction fees, but they are included in your cost basis and proceeds, which will affect the amount of gain/loss you report. So in your example, the cost basis for each of the two lots is $15 (10$ share price plus $5 broker fee). Your proceeds for each lot are $27.50 (($30*2 - $5 )/2). Your gain on each lot is therefore $12.50, and you will report $12.50 in STCG and $12.50 in LTCG in the year you sold the stock (year 3). As to the other fees, in general yes they are deductible, but there are limits and exceptions, so you would need to consult a tax professional to get a correct answer in your specific situation.\"",
"title": ""
},
{
"docid": "3b758cc9b01b3c40ca56a7c8367938dc",
"text": "A mutual fund has several classes of shares that are charged different fees. Some shares are sold through brokers and carry a sales charge (called load) that compensates the broker in lieu of a fee that the broker would charge the client for the service. Vanguard does not have sales charge on its funds and you don't need to go through a broker to buy its shares; you can buy directly from them. Admiral shares of Vanguard funds are charged lower annual expenses than regular shares (yes, all mutual funds charge expenses for fund adninistration that reduce the return that you get, and Vanguard has some of the lowest expense ratios) but Admiral shares are available only for large investments, typically $50K or so. If you have invested in a Vanguard mutual fund, your shares can be set to automatically convert to Admiral shares when the investment reaches the right level. A mutual fund manager can buy and sell stocks to achieve the objectives of the fund, so what stockes you are invested in as a share holder in a mutual fund will typically be unknown to you on a day-to-day basis. On the other hand, Exchange-traded funds (ETFs) are fixed baskets of stocks, and you can buy shares in the ETF. These shares are bought and sold through a broker (so you pay a transaction fee each time) but expenses are lower since there is no manager to buy and sell stocks: the basket is fixed. Many ETFs follow specific market indexes (e.g. S&P 500). Another difference between ETFs and mutual funds is that you can buy and sell ETFs at any time of the day just as if you could if you held stocks. With mutual funds, any buy and sell requests made during the day are processed at the end of the day and the value of the shares that you buy or sell is determined by the closing price of the stocks held by the mutual fund. With ETFs, you are getting the intra-day price at the time the buy or sell order is executed by your broker.",
"title": ""
},
{
"docid": "e80cc5163e18d81954a1a7decbd86e89",
"text": "\"In addition to the other answers it's also noteworthy that the stock exchanges themselves adjust the price quotes via their ex-div mechanism. All limit orders present in the book when the stock goes ex-div will be adjusted by the dividend. Which means you can't even get \"\"accidentally\"\" filled in the very unlikely case that everyone forgot to adjust their quotes.\"",
"title": ""
},
{
"docid": "521b8fb42f6535c5f3393137640b7129",
"text": "There are no flat fees but typically banks and money exchangers will use a the current market rate, up to the minute for some powerful exchangers. They then add a little on top depending on many variables. Those variables can be related to the quantity of currency that organization holds, the average amount they hold, the market trend for that currency, the stability of the currency, the location of that currency exchange, etc. As for the one stop shop for currency exchange providers, you can try moneysupermarket.com Hope that helps.",
"title": ""
},
{
"docid": "64e8dd8b36ad83931c55f3dc479cf037",
"text": "Market cap probably isn't as big of an issue as the bid/ask spread and the liquidity, although they tend to be related. The spread is likely to be wider on lesser traded ETF funds we are talking about pennies, likely not an issue unless you are trading in and out frequently. The expense ratios will also tend to be slightly higher again not a huge issue but it might be a consideration. You are unlikely to make up the cost of paying the commission to buy into a larger ETF any time soon though.",
"title": ""
},
{
"docid": "62b14dd6a2c9023faba26ce0e07ea9b2",
"text": "\"Before the prevalence of electronic trading, trading stocks was very costly, dropping from ~15c in the late 1970s to less than a nickel per share today. Exchange fees for liquidity takers are ~0.3c per share, currently. When orders were negotiated exclusively by humans, stocks used to be quoted in fractions rather than decimal, such as $50 1/2 instead of something more precise like $50.02. That necessary ease of negotiation for humans to rapidly trade extended to trade size as well. Traders preferred to handle orders in \"\"round lots\"\", 100 shares, for ease of calculation of the total cost of the trade, so 100 shares at $50 1/2 would have a total cost of $5,050. The time for a human to calculate an \"\"odd lot\"\" of 72 shares at $50.02 would take much longer so would cost more per share, and these costs were passed on to the client. These issues have been negated by electronic trading and simply no longer exist except for obsolete brokerages. There are cost advantages for extremely large trades, well above 100 shares per trade. Brokerage fees today run the gamut: they can be as insignificant as what Interactive Brokers charges to as high as a full service broker that could charge hundreds of USD for a few thousand USD trade. With full service brokerages, the charges are frequently mystifying and quoted at the time a trade is requested. With discount brokerages, there is usually a fee per trade and a fee per share or contract. Interactive Brokers will charge a fee per share or option only and will even refund parts of the liquidity rebates exchanges provide, as close as possible to having a seat on an exchange. Even if a trader does not meet Interactive Brokers' minimum trading requirement, the monthly fee is so low that it is possible that a buy and hold investor could benefit from the de minimis trade fees. It should be noted that liquidity providing hidden orders are typically not rebated but are at least discounted. The core costs of all trades are the exchange fees which are per share or contract. Over the long run, costs charged by brokers will be in excess of charges by exchanges, and Interactive Brokers' fee schedule shows that it can be reduced to a simple markup over exchange fees. Exchanges sometimes have a fee schedule with lower charges for larger trades, but these are out of reach of the average individual.\"",
"title": ""
}
] |
fiqa
|
03d26415d8c1766c984e1a45789803eb
|
What is expense growth in this diagram?
|
[
{
"docid": "b6bd677c1e3ea129e086763705a7bdad",
"text": "\"The \"\"c.\"\" is probably circa, or \"\"about.\"\" Regulatory settlements is in blue because it's negative; the amount is in parentheses, which indicates a loss. WB and CB might be wholesale banking and commercial banking? BAU probably means \"\"business as usual\"\" or things that don't directly apply to the project. Incremental investment is the additional cash a company puts towards its long-term capital assets. FX is probably foreign exchange.\"",
"title": ""
}
] |
[
{
"docid": "53dd714fdcde93886c79bef5635ec6a9",
"text": "\"First, please allow me to recommend that you do not try gimmickry when financials do give expected results. It's a sure path to disaster and illegality. The best route is to first check if accounts are being properly booked. If they are then there is most likely a problem with the business. Anything out of bounds yet properly booked is indeed the problem. Now, the reason why your results seem strange is because investments are being improperly booked as inventory; therefore, the current account is deviating badly from the industry mean. The dividing line for distinguishing between current and long term assets is one year; although, modern financial accounting theorists & regulators have tried to smudge that line, so standards do not always adhere to that line. Therefore, any seedlings for resale should be booked as inventory while those for potting as investment. It's been some time since I've looked at the standards closely, but this used to fall under \"\"property, plant, & equipment\"\". Generally, it is a \"\"capital expenditure\"\" by the oldest definition. It is not necessary to obsess over initial bookings because inventory turnover will quickly resolve itself, so a simple running or historical rate can be applied to the seedling purchases. The books will now appear more normal, and better subsequent strategic decisions can now be made.\"",
"title": ""
},
{
"docid": "41e12b6dc6a67d21c7f6eaa5ea3656a4",
"text": "\"There are a couple of misconceptions I think are present here: Firstly, when people say \"\"interest\"\", usually that implies a lower-risk investment, like a government bond or a money market fund. Some interest-earning investments can be higher risk (like junk bonds offered by near-bankrupt companies), but for the most part, stocks are higher risk. With higher risk comes higher reward, but obviously also the chance for a bad year. A \"\"bad year\"\" can mean your fund actually goes down in value, because the companies you are invested in do poorly. So calling all value increases \"\"interest\"\" is not the correct way to think about things. Secondly, remember that \"\"Roth IRA fund\"\" doesn't really tell you what's \"\"inside\"\" it. You could set up your fund to include only low-risk interest earning investments, or higher risk foreign stocks. From what you've said, your fund is a \"\"target retirement date\"\"-type fund. This typically means that it is a mix of stocks and bonds, weighted higher to bonds if you are older (on the theory of minimizing risk near retirement), and higher to stocks if you are younger (on the theory of accepting risk for higher average returns when you have time to overcome losses). What this means is that assuming you're young and the fund you have is typical, you probably have ~50%+ of your money invested in stocks. Stocks don't pay interest, they give you value in two ways: they pay you dividends, and the companies that they are a share of increase in value (remember that a stock is literally a small % ownership of the company). So the value increase you see as the increase due to the increase in the mutual fund's share price, is part of the total \"\"interest\"\" amount you were expecting. Finally, if you are reading about \"\"standard growth\"\" of an account using a given amount of contributions, someone somewhere is making an assumption about how much \"\"growth\"\" actually happens. Either you entered a number in the calculator (\"\"How much do you expect growth to be per year?\"\") or it made an assumption by default (probably something like 7% growth per year - I haven't checked the math on your number to see what the growth rate they used was). These types of assumptions can be helpful for general retirement planning, but they are not \"\"rules\"\" that your investments are required by law to follow. If you invest in something with risk, your return may be less than expected.\"",
"title": ""
},
{
"docid": "35124c3aee792df13fe3a69a181155f4",
"text": "\"Here is where I am confused. On the income statement I am looking at it has a line item in cogs that is \"\"change in jobs in progress\"\". Change in JIP = (Starting raw materials, wip, and finished goods) - (Ending raw materials, wip, and finished goods) for the accounting period. From what I researched cost of goods manufactured is added to cogs: \"\"The formula for the cost of goods manufactured is the costs of: direct materials used + direct labor used + manufacturing overhead assigned = the manufacturing costs incurred in the current accounting period + beginning work-in-process inventory - ending work-in-process inventory. A manufacturer's cost of goods sold is computed by adding the finished goods inventory at the beginning of the period to the cost of goods manufactured and then subtracting the finished goods inventory at the end of the period.\"\" So it isnt wip that is in the income statement it is change in inventory. Why do they include the \"\"change of inventory\"\" in cogs? Wont this just be material and labor that should be in for the next accounting period cog calculation?\"",
"title": ""
},
{
"docid": "00df1661bbb7f46e4761ef8d1b612ca9",
"text": "I don't understand the logic of converting a cost of funds of 4% to a monthly % and then subtracting that number from an annual one (the 1.5%). Unfortunately without seeing the case I really can't help you...there was likely much you have left out from above.",
"title": ""
},
{
"docid": "9dce0b157b2a2d90afcda05c20b8bd8a",
"text": "I mean isn't it implied that cash flows increase by the amount of the benefit of the investment each year? I'm a little shaky on cash flows tbh. My scope may be limited compared to yours I've never taken a financial management class but just from financial accounting knowledge since I recently finished that, it seems like cash flows would be increased if revenues are increased. Unless the revenue increase is for some reason solely in the form of accounts receivable or some asset other than cash.",
"title": ""
},
{
"docid": "552c97f6a717f65fe5560ea03fd90c76",
"text": "\"I think we'd need to look at actual numbers to see where you're running into trouble. I'm also a little confused by your use of the term \"\"unexpected expenses\"\". You seem to be using that to describe expenses that are quite regular, that occur every X months, and so are totally expected. But assuming this is just some clumsy wording ... Here's the thing: Start out by taking the amount of each expense, divided by the number of months between occurrences. This is the monthly cost of each expense. Add all these up. This is the amount that you should be setting aside every month for these expenses, once you get a \"\"base amount\"\" set up. So to take a simple example: Say you have to pay property taxes of $1200 twice a year. So that's $1200 every 6 months = $200 per month. Also say you have to pay a water bill once every 3 months that's typically $90. So $90 divided by 3 = $30. Assuming that was it, in the long term you'd need to put aside $230 per month to stay even. I say \"\"in the long term\"\" because when you're just starting, you need to put aside an amount sufficient that your balance won't fall below zero. The easiest way to do this is to just set up a chart where you start from zero and add (in this example) $230 each month, and then subtract the amount of the bills when they will hit. Do this for some reasonable time in the future, say one year. Find the biggest negative balance. If you can add this amount to get started, you'll be safe. If not, add this amount divided by the number of months from now until it occurs and make that a temporary addition to your deposits. Check if you now are safely always positive. If not, repeat the process for the next biggest negative. For example, let's say the property tax bills are April and October and the water bills are February, May, August, and November. Then your chart would look like this: The biggest negative is -370 in April. So you have to add $370 in the first 4 months, or $92.50 per month. Let's say $93. That would give: Now you stay at least barely above water for the whole year. You could extend the chart our further, but odds are the exact numbers will change next year and you'll have to recalculate anyway. The more irregular the expenses, the more you will build up just before the big expense hits. But that's the whole point of saving for these, right? If a $1200 bill is coming next week and you don't have close to $1200 saved up in the account, where is the money coming from? If you have enough spare cash that you can just take the $1200 out of what you would have spent on lunch tomorrow, then you don't need this sort of account.\"",
"title": ""
},
{
"docid": "fc579ea31e6452ce928ecef5dce15590",
"text": "\"Something I found helpful when I learned this, is to just use Excel to expand the series. So start with A1 as \"\"175\"\", then in A2 put \"\"=175+(A1*1.004308)\"\" and paste that same formula down for a few hundred rows. You'll find your answer on A216. Most non-math-centric people don't have an intuitive grasp of how exponents (aka \"\"compounding\"\"... and never mind the natural logarithms this is all derived from) behave; but you can play with the numbers \"\"unrolled\"\" in Excel to get a better idea of how they work. That formula is just applying 0.4308% interest every period (row), and adding in a fresh $175.\"",
"title": ""
},
{
"docid": "6185b178bed99afd98ae1c4d60cc2cee",
"text": "\"Fama-French would be a couple of names if you want to look at this from a value/growth dichotomy. A simplified form of this was to take the stocks with a lower Price/Book Value that would be the value stocks while the others would be the growth. The principle is that some of the beaten-down stocks will appreciate more than the growth stocks will. 6 Ways To Improve Your Portfolio Returns Today also makes note of the \"\"growth vs value\"\" split if you want another reference that way. Historically, growth has been more volatile and produced lower returns, though past performance isn't necessarily always going to hold as some people like to invest in what is known as a \"\"slice & dice\"\" portfolio where a portion in invested in each of 4 corners: Large-growth, large-value, small-growth, and small-value. Some may add in bonds, REITs, and foreign stocks but the idea is that in different years, different parts of the market will do better and this is a way to capture that in a sense.\"",
"title": ""
},
{
"docid": "9b5e65391762cad073c42a9fac453c4d",
"text": "The issue I run into with that is that it does nothing to change the cash flows over the five years because it doesn't change any of the numbers across the board. This course has the worst worded assignments I have ever seen and I appreciate your assistance.",
"title": ""
},
{
"docid": "8c51c006f9bf44c2e7d5785762db1797",
"text": "He didn't lock in a growth rate of 4%. He locked in a yield of 4%. That's the amount the bond pays in interest on his original investment each year. If he just spends that money the bond will continue to pay 4% each year, but there's no growth. In order to get growth he has to reinvest the interest as it comes in; if he puts it into bonds, the return on that new money, and hence the growth, depends on the prevailing interest rate at the time that the interest is paid. That interest rate can be higher or lower than the original 4%; there's no connection between the two.",
"title": ""
},
{
"docid": "8685de0fcc65597ee7162ebf237035d2",
"text": "\"It's likely impossible to determine why premiums are increasing in a meaningful way; not only is the interrelationship between the various data points very complex, but some of the increases are likely due to decisions by people who do not and will not publicly post what they decided and why. However, it is possible to compare health insurance premium increases over time to see if the increases in employer-sponsored health insurance premiums are comparable or not to the pre-ACA timeframe. Since the ACA phased in over a few years, we can compare the period 2008-2010 \"\"pre-ACA\"\" and 2013-2015 \"\"post-ACA\"\", ignoring 2011-2012 as being unclearly affected by the ACA phase-in. For this, I will look at single coverage premiums only for the purpose of simplifying the analysis. I found a good table of 2008-2010 premiums from the NCSL; they list the following: Kaiser Permanente had a good list for 2013-2015 here: From 2008-2010, the average growth was around 6% per year. From 2013-2015, the growth averaged about 3%. In both of these cases we are comparing total premiums (sum of employer and employee contributions). So, from a data-driven look, it seems that the premium growth is lower post-ACA than pre-ACA, so it's unlikely that the ACA could be accused of causing increased premium growth. Of course, this is US-wide average, and on a state-by-state basis there may well be significant differences that may or may not be related to the ACA. One thing that is covered on the NCSL page linked above that is interesting: while the premium growth has slowed significantly (about 50% of the growth pre-ACA), health insurance premiums are a higher proportion of employee's wages, and that growth is continuing - because wage growth has not kept pace with inflation post-2008 recession. Employee contributions also may be higher post-recession; many companies reduced their contribution percentage (as my then employer did, for example). Finally, increases in the ACA plans are also commonly overstated. They largely are in line with employer plans or even less. In 2015, premiums were basically flat, decreasing slightly in fact - see the KFF analysis here. 2016 saw a 3.6% by this methodology (see the 2016 analysis). It's very easy to cherrypick examples that are favorable to any interpretation from the data, though; there are such big swings as a result of the different conditions in the marketplaces that it's easy to pick a few that have high swings and claim the ACA has massive premium increases, or pick a few that have low swings and claim it's reducing costs.\"",
"title": ""
},
{
"docid": "dbbbfb16fb026b997f1c90807b69104e",
"text": "Is the following correct? The firm needs $20,000 for the investment. It borrows $6,000 @ 7%, and supplies $14,000 in equity. The interest expense on the borrowing is $420 ($6,000 times 7%). After one year, the firm receives $26,500 from its investment. Subtract $6,420 (return borrowings plus interest). The firm is left with $20,080. Divide by starting equity of $14,000. Subtract 1 from the ratio. **Levered return on equity is 43.4%.**",
"title": ""
},
{
"docid": "9d517dc0ccab516b86af746f5066ab44",
"text": "http://www.guardian.co.uk/news/datablog/2012/oct/16/tax-biggest-us-companies-uk#zoomed-picture Has a nice infographic (and an actual infographic, not merely a diagram or picture as too many people on this sight seem think infographics are) on a bunch of large US companies with their turnover, net profits tax paid and percentage of net profit paid as tax.",
"title": ""
},
{
"docid": "034637720f6e64814a0c384bef75b209",
"text": "The headline is totally misleading. Construction costs have risen by 30% according to the statistic. This is not construction wage growth by 30%. They don't address how much construction wage growth has actually occurred. This increase in cost will be pushed onto the consumer. Increase in cost by 30% means people will have to get used to paying 30% more for construction services.",
"title": ""
},
{
"docid": "acd8a7913f2befd6deceb28ab90cc67b",
"text": "Honestly, I’m not sure I understand your point. The figures suggest to me that the business invests (higher capex and amortisation) and grows it’s revenues and cash flow. D&A can be higher than new capex for a number of reasons including accelerated amortisation for tax purposes. Why is D&A contribution (actually i prefer to separate the concepts of P&L and cash flow) to operating cash flow a problem or why does it evidence manipulation?",
"title": ""
}
] |
fiqa
|
3e298a5ae03a45852e16057352d8490b
|
Is it safe to accept money in the mail?
|
[
{
"docid": "8ea11218cd699176c7de183aeea399d3",
"text": "On your end of the deal, the biggest risk is probably counterfeiting. That said, I'd think that most of the downside would be for the buyer since they would have no way to prove that they paid you. Perhaps a better alternative is to send the items COD (Collect On Delivery aka Cash on Delivery). The USPS and some other carriers offer this service, which can be an effective way to remotely negotiate a cash sale. I double checked the USPS site and they do accept cash for COD deliveries: Recipient may pay by cash or check (or money order) made out to sender. (Sender may not specify payment method.) You might want to double check this if you go with USPS or FedX.",
"title": ""
},
{
"docid": "8aca39fe525a0570bb5efbd0fec8dd19",
"text": "\"Another option is to set up an accoutn with Western Union Bill Payment Solutions, where your customer could go to one of their locations and pay in cash and then the cash is transferred to your account. See \"\"Walk in Cash Payments\"\" on their site.\"",
"title": ""
},
{
"docid": "c06bb66c23a20f7e2d07544066278ef3",
"text": "The US Postal Service to my recollection recommends only mailing cash or items with cash-like characteristics using Registered Mail service. Registered mail is expensive and a pain in the butt for everyone, as it requires an audit trail for each individual who touches the mailing. If you're doing a lot of business and word gets out that you're accepting cash payments via the mail, you'll probably attract unwanted attention from the tax authorities as well. It's fairly unusual.",
"title": ""
}
] |
[
{
"docid": "bd66d8058d8b507ecaf9f0b377570b05",
"text": "Definitely push for a check, they may not do anything nefarious with your credit card number however someone else may be able to read the email before it gets to its final destination. It's never safe to give out credit card number in a less than secure interface. Also, if this is a well known company, then the person interacting with you should know better than to ask for your information through email.",
"title": ""
},
{
"docid": "7abe3fcd1e22f5fcc643dd8b81f6c9d4",
"text": "Age old rules about money scams: If a person A wants to send money to person B, they do the following: Person A sends money to person B. Neither of them sends money to you, and you don't send money to either of them. It doesn't make sense! If you give someone money, be prepared that you might not receive that money back. If someone gives you money, be prepared that they can get that money back. Illegal money laundering can put you in jail, even if you pretend to be a blameless victim of a scammer.",
"title": ""
},
{
"docid": "259214949481607d982ee738ff17c7a3",
"text": "Yes, those numbers are all that is needed to withdraw funds, or at least set online payment of bills which you don't owe. Donald Knuth also faced this problem, leading him to cease sending checks as payment for finding errors in his writings.",
"title": ""
},
{
"docid": "8ae5ee4dee30d3f64c7745fc56b20495",
"text": "I think cash, travelers checks (little iffy about this one: they're legal tender cash equivalents), and money orders are the only ones that you'd be a little weird to not accept. You certainly don't have to accept regular checks, credit cards, or barter. In the end though, you don't HAVE to accept anything. Accept only small bills, accept only checks from certain banks, accept only the diners card. Your sale, your rules.",
"title": ""
},
{
"docid": "eb719ae661b72d91b53f9b95c0b1c77f",
"text": "In addition to there being no real guarantee on the guarantee page, note that the domain was registered on May 27, 2013, so there's no substantial track record of reliability. Finally, their Terms of Service explicitly note that they are not liable for loss of funds due to system malfunction, unauthorized access, etc. etc. Perfect Money is going out of their way to ensure they are offering no guarantees and will not be liable for any losses. How safe are your funds? You should not consider your funds to be safe if stored there. There's no guarantee you'll lose your funds, but no significant reason to believe you won't. Additionally, Perfect Money shut down access to all U.S. citizens on July 1st, 2013 with only two weeks of notice. Anyone who did not withdraw their money within this time lost access to it.",
"title": ""
},
{
"docid": "f25fafb34d78ed0c7ffedc3a21440848",
"text": "Ask your bank or credit union. Mine will let me issue recurring payments to anyone, electronically if they can, if not a check gets mailed and (I presume) I get billed for the postage.",
"title": ""
},
{
"docid": "56b01badf3f52009978c270470a6887f",
"text": "There's no requirement to use these OTP systems to process Internet transactions. Some merchants are using them, some are not. PayPal does not since they are not the receiver of the money but rather a merchant processor - so they don't assume any risk anyway and wouldn't bother.",
"title": ""
},
{
"docid": "90cf653a01b6f9a034dc013a6e16605f",
"text": "\"value slip below vs \"\"equal a bank savings account’s safety\"\" There is no conflict. The first author states that money market funds may lose value, precisely due to duration risk. The second author states that money market funds is as safe as a bank account. Safety (in the sense of a bond/loan/credit) mostly about default risk. For example, people can say that \"\"a 30-year U.S. Treasury Bond is safe\"\" because the United States \"\"cannot default\"\" (as said in the Constitution/Amendments) and the S&P/Moody's credit rating is the top/special. Safety is about whether it can default, ex. experience a -100% return. Safety does not directly imply Riskiness. In the example of T-Bond, it is ultra safe, but it is also ultra risky. The volatility of 30-year T-Bond could be higher than S&P 500. Back to Money Market Funds. A Money Market Fund could hold deposits with a dozen of banks, or hold short term investment grade debt. Those instruments are safe as in there is minimal risk of default. But they do carry duration risk, because the average duration of the instrument the fund holds is not 0. A money market fund must maintain a weighted average maturity (WAM) of 60 days or less and not invest more than 5% in any one issuer, except for government securities and repurchase agreements. If you have $10,000,000, a Money Market Fund is definitely safer than a savings account. 1 Savings Account at one institution with amount exceeding CDIC/FDIC terms is less safe than a Money Market Fund (which holds instruments issued by 20 different Banks). Duration Risk Your Savings account doesn't lose money as a result of interest rate change because the rate is set by the bank daily and accumulated daily (though paid monthly). The pricing of short term bond is based on market expectation of the interest rates in the future. The most likely cause of Money Market Funds losing money is unexpected change in expectation of future interest rates. The drawdown (max loss) is usually limited in terms of percentage and time through examining historical returns. The rule of thumb is that if your hold a fund for 6 months, and that fund has a weighted average time to maturity of 6 months, you might lose money during the 6 months, but you are unlikely to lose money at the end of 6 months. This is not a definitive fact. Using GSY, MINT, and SHV as an example or short duration funds, the maximum loss in the past 3 years is 0.4%, and they always recover to the previous peak within 3 months. GSY had 1.3% per year return, somewhat similar to Savings accounts in the US.\"",
"title": ""
},
{
"docid": "79cf9bb9c76a12e5bb6ccf3b1186e6be",
"text": "\"Firstly, it isn't so generous. It is a win-win, but the bank doesn't have to mail me a free box of checks with my new account, or offer free printing to compete for my business. They already have the infrastructure to send out checks, so the actual cost for my bank to mail a check on my behalf is pretty minimal. It might even save them some cost and reduce exposure. All the better if they don't actually mail a check at all. Per my bank Individuals and most companies you pay using Send Money will be mailed a paper check. Your check is guaranteed to arrive by the delivery date you choose when you create the payment. ... A select number of companies–very large corporations such as telecoms, utilities, and cable companies–are part of our electronic biller network and will be paid electronically. These payments arrive within two business days... So the answer to your question depend on what kind of bill pay you used. If it was an electronic payment, there isn't a realistic possibility the money isn't cashed. If your bank did mail a paper check, the same rules would apply as if you did it yourself. (I suppose it would be up to the bank. When I checked with my bank's support this was their answer.) Therefore per this answer: Do personal checks expire? [US] It is really up to your bank whether or not they allow the check to be cashed at a later date. If you feel the check isn't cashed quickly enough, you would have to stop payment and contact whoever you were trying to pay and perhaps start again. (Or ask them to hustle and cash the check before you stop it.) Finally, I would bet a dime that your bank doesn't \"\"pre-fund\"\" your checks. They are just putting a hold on the equivalent money in your account so you don't overdraw. That is the real favor they do for you. If you stopped the check, your money would be unfrozen and available. EDIT Please read the comment about me losing a dime; seems credible.\"",
"title": ""
},
{
"docid": "eb31d6073fbc4778fc5e00072914b926",
"text": "My brother is worried as in US a transaction of more than 10K can be flagged by IRS. Transactions may be flagged to IRS or any other regulators as required. If the intent is correct, there is nothing wrong, your Brother would have to establish that it was for legit reason. Will it be safe to transfer through wire to wire Transfer or is there any other alternatives All legit transfer mechanism would have the same reporting regulation. There is no one better than other method. As stated earlier, if the purpose is bonafide, there shouldn't be anything to worry about.",
"title": ""
},
{
"docid": "b1e12f57b02afcd3484e6266e6ab820d",
"text": "In addition to filling out the USPS custom forms, you will have to consider what the Brazilians allow for mailing into the country: Amusing that the items you are mailing are not on the prohibited list. The list ranges from money and weapons. to Playing cards and Primary educational books not written in Portuguese. You still have to be careful. Observations Which means that you will have fill out the form, they will have to fill out forms, and they will pay the import duty when they pick it up at the pot office. Unless they were aking you to not declare the contents and value correctly.",
"title": ""
},
{
"docid": "04b788de1cd23c0c6103b4d4ba61b3cd",
"text": "Basically, any time someone claims they put money into your bank account, or send you a check, or something similar, and then asks you to send money to someone else, it is a scam. What you need to do: 1. Under no circumstances whatsoever must you ever send money to anyone. 2. Talk to your bank and ask them for advice. The money that gets put into your bank account isn't real. It has been paid with a forged check, or a stolen credit card number, or a hacked or faked bank account. Your bank will figure this out eventually, and then they will take that money away. It may take many weeks, but the money will disappear. Meanwhile, any money that you send to someone is real. It's your money. When you send it, it is gone. Your bank will hold you to that. So in your case if they say they pay you $6,000 for a job, but put $10,000 into your bank account and ask you to pass $4,000 on to someone, the $4,000 you pay comes out of your bank account, a long time later the $10,000 comes out of your bank account, and you owe the bank $4,000. Plus sometimes the job involves real work that obviously doesn't pay. An alternative is that this is money laundering, in which case you would become a criminal by being involved.",
"title": ""
},
{
"docid": "769799dfb44fee434a78cd4c46c18f47",
"text": "Well, sure, why else would you buy them? Is it illegal now to accept money *from* PDVSA? Because I know my company does business with them, and if we are going to ship what we built for them, we need to see the money.",
"title": ""
},
{
"docid": "007befd38bcc226a277d23049f749057",
"text": "At every moving/yard/garage sale I have ever seen only cash is accepted. While the use of electronic payments is growing the big problem is that it is hard to verify the exchange at the time the goods are changing hands. Unless you have a card reader attached to your phone, you can't use a credit or debit card. Unless you can verify that they did transfer the money electronically why would you let them walk away with your stuff? If you knew them you could accept a check, but there are risks with the checks bouncing.",
"title": ""
},
{
"docid": "df3445c4c5220e2ca5bb66345da094b1",
"text": "This does sound a bit implausible, even if it is true it is pretty grossly irresponsible and you probably shouldn't just let it slide... However there is no real benefit in wading in with accusations, I suspect that the most likely scenario is that your tenet simply didn't have the money and was looking for a way to delay payment. This may well not be particularly malicious towards you, they may just be unable to pay and need a bit of room to maneuver. In this case the wise thing is to challenge them but without forcing them to admit that they might have lied, perhaps by suggesting that they might have been mistaken about dropping off the money but it's no big deal and negotiate a resolution. In these situations where it is one persons word against another giving them the opportunity to save face often pays off. Equally you want to make it absolutely clear that putting a wad of cash in your mailbox is not an acceptable way to pay.",
"title": ""
}
] |
fiqa
|
8980998380aef63b1768d04bf7bf09b1
|
How to find the smallest transaction fees and commissions available and reduce trading overhead?
|
[
{
"docid": "e4f65c14cb339c610df2f430761c3248",
"text": "The lowest cost way to trade on an exchange is to trade directly on the exchange. I can't speak to the LSE, but in the US, there is a mandated firewall between the individual and the exchange, the broker; therefore, in the US, one would have to start a business and become a broker. If that process is too costly, the broker or trade platform that permits individuals to trade with the lowest commissions is the next lowest.",
"title": ""
}
] |
[
{
"docid": "dd4e634b0f9b679dc87584cab48a1ecd",
"text": "\"For \"\"smaller trades\"\", I'm not sure you can beat FXCM.com, a large, dedicated FX trading shop with extremely tight spreads, and a \"\"Micro\"\" account that you can open for as little as $25(US). Their \"\"main\"\" offering has a minimum account size of $2k (US), but recommends an account size of $10k or more. But they also have a \"\"micro\"\" account, which can be opened for as little as $25, with a $500 or higher recommended size. I haven't used them personally, but they're well known in the discount FX space. One strong positive indicator, in my opinion, is that they sell an online FX training course for $19.99. Why is that positive? It means that their margins on your activity are small, and they're not trying to get you \"\"hooked\"\". If that were not the case, they'd give the course away, since they'd be able to afford to, and they would expect to make so much of your subsequent activity. They do have some free online materials, too, but not the video stuff. Another plus is that they encourage you to use less leverage than they allow. This does potentially serve their interests, by getting more of your deposits with them, but a lot of FX shops advertise the leverage to appeal to users' hope to make more faster, which isn't a great sign, in my opinion. Note that the micro account has no human support; you can only get support via email. On the other hand, the cost to test them out is close to nil; you can literally open an account for $25.\"",
"title": ""
},
{
"docid": "395657af29d1c2a678d29b213625d460",
"text": "Enjoy the free trades as long as they last, and take advantage of it since this is no longer functionally a tax on your potential profits. On a side note, RobinHood and others in the past have roped customers in with low-to-zero fee trades before changing the business paradigm completely or ceasing operations. All brokers could be charging LESS fees than they do, but they get charged fees by the exchanges, and will eventually pass this down to the customer in some way or go bankrupt.",
"title": ""
},
{
"docid": "fd894d1730795d2534bc64b24977b373",
"text": "Sure, but as a retail client you'd be incurring transaction fees on entry and exit. Do you have the necessary tools to manage all the corporate actions, too? And index rebalances? ETF managers add value by taking away the monstrous web of clerical work associated with managing a portfolio of, at times, hundreds of different names. With this comes the value of institutional brokerage commissions, data licenses, etc. I think if you were to work out the actual brokerage cost, as well as the time you'd have to spend doing it yourself, you'd find that just buying the ETF is far cheaper. Also a bit of a rabbit hole, but how would you (with traditional retail client tools) even coordinate the simultaneous purchase of all 500 components of something like SPY? I would guess that, on average, you're going to have significantly worse slippage to the index than a typical ETF provider. Add that into your calculation too.",
"title": ""
},
{
"docid": "5fd2d162f642ff8472e70dd04df379bd",
"text": "I don't think any open source trading project is going to offer trial or demo accounts. In fact, I'm not clear on what you mean by this. Are you looking for some example data sets so you can see how your algorithm would perform historically? If you contact whatever specific brokers that you'd like to interface with, they can provide things like connection tests, etc., but no one is going to let you do live trades on a trial or demo basis. For more information about setting this sort of thing up at home, here's a good link: < http://www.stat.cmu.edu/~abrock/algotrading/index.html >. It's not Python specific, but should give you a good idea of what to do.",
"title": ""
},
{
"docid": "c730a794b925cb372bb786761aaee5ff",
"text": "There is such a thing as a buy-write, which is buying a stock and writing a (covered) call simultaneously. But as far as I know brokers charge two commissions, one stock trade and one options trade so you're not going to save on commissions.",
"title": ""
},
{
"docid": "97bb7d925bb93ad45e72af68c03d3b68",
"text": "Sure, with some general rules of thumb: what is the minimum portfolio balance to avoid paying too much for transaction fees? Well, the fee doesn't change with portfolio balance or order size, so I don't know what you're trying to do here. The way to have less transaction fees is to have less transactions. That means no day-trading, no option rolling, etc. A Buy-and-hold strategy (with free dividend reinvestment if available) will minimize transaction fees.",
"title": ""
},
{
"docid": "9adf292a5fb58e5fed098aa9bcd6d516",
"text": "Retail brokers and are generally not members of exchanges and would generally not be members of exchanges unless they are directly routing orders to those exchanges. Most retail brokers charging $7 are considered discount brokers and such brokers route order to Market Makers (who are members of the exchanges). All brokers and market makers must be members of FINRA and must pay FINRA registration and licensing fees. Discount brokers also have operational costs which include the cost of their facilities, technology, clearing fees, regulation and human capital. Market makers will have the same costs but the cost of technology is probably much higher. Discount brokers will also have market data fees which they will have to pay to the exchanges for the right to show customer real time quotes. Some of their fees can be offset through payment for order flow (POF) where market makers pay routing brokers a small fee for sending orders to them for execution. The practice of POF has actually allowed retail brokers to keep their costs lower but to to shrinking margins and spread market makers POF has significantly declined over the years. Markets makers generally do not pass along Exchange access fees which are capped at $.003 (not .0035) to routing brokers. Also note that The SEC and FINRA charges transactions fees. SEC fee for sales are generally passed along to customers and noted on trade confirms. FINRA TAF is born by the market makers and often subtracted from POF paid to routing firms. Other (full service brokers) charging higher commissions are charging for the added value of their brokers providing advice and expertise in helping investors with investment strategies. They will generally also have the same fees associated with membership of all the exchanges as they are also market makers subject to some of the list of cost mentioned above. One point of note is that Market Making technology is quite sophisticates and very expensive. It has driven most of wholesale market makers of the 90s into consolidation. Retail routing firm's save a significant amount of money for not having to operate such a system (as well as worry about the regulatory headaches associated with running such a system). This allows them to provide much lower commissions that the (full service) or bulge bracket brokers.",
"title": ""
},
{
"docid": "c1e96cbfd59f72545a11fed276e53f86",
"text": "I don't care for this solution. I would prefer a tiny tax per transactions. Should keep the churn down, be almost unnoticeable to aggregate returns and still allow people with legitimate reason to split trades to do so and still liquidate quickly",
"title": ""
},
{
"docid": "34bde35f3d87d48efcb701b18a66256f",
"text": "Yes. You got it right. If BBY has issues and drops to say, $20, as the put buyer, I force you to take my 100 shares for $2800, but they are worth $2000, and you lost $800 for the sake of making $28. The truth is, the commissions also wipe out the motive for trades like yours, even a $5 cost is $10 out of the $28 you are trying to pocket. You may 'win' 10 of these trades in a row, then one bad one wipes you out.",
"title": ""
},
{
"docid": "82fd28a1365ba647adc6c8d74dc38fe2",
"text": "The least expensive way to buy such small amounts is through ING's Sharebuilder service. You can perform a real-time trade for $9, or you can add a one-time trade to their investment schedule for $4 (transaction will be processed on the next upcoming Tuesday morning). They also allow you to purchase fractional shares.",
"title": ""
},
{
"docid": "6a54e644b5544df0d9b26eb811dd81af",
"text": "You can't tell for sure. If there was such a technique then everyone would use it and the price would instantly change to reflect the future price value. However, trade volume does say something. If you have a lemonade stand and offer a large glass of ice cold lemonade for 1c on a hot summer day I'm pretty sure you'll have high trading volume. If you offer it for $5000 the trading volume is going to be around zero. Since the supply of lemonade is presumably limited at some point dropping the price further isn't going to increase the number of transactions. Trade volumes reflect to some degree the difference of valuations between buyers and sellers and the supply and demand. It's another piece of information that you can try looking at and interpreting. If you can be more successful at this than the majority of others on the market (not very likely) you may get a small edge. I'm willing to bet that high frequency trading algorithms factor volume into their trading decisions among multiple other factors.",
"title": ""
},
{
"docid": "eeb6f61e4ed5df2cb4959e50fe76c8a1",
"text": "The only fee you incur when buying an ETF is the commission. If you have a brokerage account at Schwab/Fidelity/E-TRADE/Vanguard or any number of banks you won't pay more than $10 per transaction (regardless of the size of the transaction). I use Schwab which charges $5 per trade, but you can open a Robinhood account (it's a discount brokerage) for free, $0 commission trades. It lacks features that paying platforms have, but it's great for beginners. You'll get a dividend each quarter (every 3 months) for most ETFs.",
"title": ""
},
{
"docid": "2a299334dcf6600c0e5f2e0f087fa951",
"text": "You'd need millions of dollars to trade the number of shares it would take to profit from these penny variations. What you bring up here is the way high frequency firms front-run trades and profit on these pennies. Say you have a trade commission of $5. Every time you buy you pay $5, every time you sell you pay $5. So you need a gain in excess of $10, a 10% gain on $100. Now if you wanted to trade on a penny movement from $100 to $100.01, you need to have bought 1,000 shares totaling $100,000 for the $0.01 price movement to cover your commission costs. If you had $1,000,000 to put at risk, that $0.01 price movement would net you $90 after commission, $10,000,000 would have made you $990. You need much larger gains at the retail level because commissions will equate to a significant percentage of the money you're investing. Very large trading entities have much different arrangements and costs with the exchanges. They might not pay a fee on each transaction but something that more closely resembles a subscription fee, and costs something that more closely resembles a house. Now to your point, catching these price movements and profiting. The way high frequency trading firms purportedly make money relates to having a very low latency network connection to a particular exchange. Their very low latency/very fast network connection lets them see orders and transact orders before other parties. Say some stock has an ask at $101 x 1,000 shares. The next depth is $101.10. You see a market buy order come in for 1,000 shares and place a buy order for 1,000 shares at $101 which hits the exchange first, then immediately place a sell order at $101.09, changing the ask from $101.00 to $101.09 and selling in to the market order for a gain of $0.09 per share.",
"title": ""
},
{
"docid": "c2818bdbcd005e911a4f2012b17a4d0a",
"text": "The answer is to your question is somewhat complicated. You will be unable to compete with the firms traditionally associated with High Frequency Trading in any of their strategies. Most of these strategies which involve marketing making, latency arbitrage, and rebate collection. The amount of engineering required to build the infrastructure required to run this at scale makes it something which can only be undertaken by a team of highly skilled engineers. Indeed, the advantage of firms competing in this space such as TradeBot, TradeWorx, and Getco comes from this infrastructure as most of the strategies that are developed are necessarily simple due to the latency requirements. Now if you expand the definition of HFT to include all computerized automated trading you most certainly can build strategies that are profitable. It is not something that you probably want to tackle on your own but I know of a couple of people that did go it alone successfully for a couple of years before joining an established firm to run a book for them. In order to be successful you will most likely need to develop a unique strategies. The good news is because that you are trying to deploy a very tiny amount of capital you can engage in trades that larger firms would not because the strategies cannot hold enough capital relative to the firms capital base. I am the co-founder of a small trading firm that successfully trades the US Equities and Equity Derivatives markets. A couple of things to note is that if you want to do this you should consider building a real business. Having some more smart brains around you will help. You don't need exchange colocation for all strategies. Many firms, including ours, colocate in a data center that simply has proximity to the exchanges data centers. You will need to keep things simple to be effective. Don't except all the group think that this is impossible. It is possible although as a single individual it will be more difficult. It will require long, long hours as you climb the algorithmic trading learning curve. Good luck.",
"title": ""
},
{
"docid": "0b2f511a60aa172abdaebf4d226f7119",
"text": "Borrow the lot (as your family recommended)! The extra money will come in useful when you want to buy a house and move back to the area where your employer is. The government loan in the UK is a fantastic system, just a shame they are charging you so much in tuition fees...",
"title": ""
}
] |
fiqa
|
221a9a668cbd2ab8e563c595be02dce6
|
Is per diem taxable?
|
[
{
"docid": "7c2d9916f948b4c6693e43b7dd9400e4",
"text": "Per-diem is not taxable, if all the conditions are met. Conditions include: You can find this and more in this IRS FAQ document re the per-diem.",
"title": ""
}
] |
[
{
"docid": "81ab7c9d49e66e287f971b92d3c14a58",
"text": "?? Edit: that's what I thought. Unless there is some specific tax code that I don't know about, there's no way to pass through money to the next year. But if someone on Reddit is saying something and quoting a tax law, I'd at least like to see it.",
"title": ""
},
{
"docid": "01146bc5aa9569a2197f4c8911640786",
"text": "\"According to this post on TurboTax forums, you could deduct it as an \"\"Unreimbursed Employee\"\" expense. This would seem consistent with the IRS Guidelines on such deductions: An expense is ordinary if it is common and accepted in your trade, business, or profession. An expense is necessary if it is appropriate and helpful to your business. An expense does not have to be required to be considered necessary. Office rent is not listed explicitly among the examples of deductible unreimbursed employee expenses, but this doesn't mean it's not allowed. Of course you should check with a tax professional if you want to be sure.\"",
"title": ""
},
{
"docid": "15a68028202202a61ad5b69ba02c6f16",
"text": "Yes, you can deduct from your taxable profits (almost) any expenses incurred in the course of your business. See here for HMRC's detailed advice on the subject. The fact that you have salaried PAYE employment as well makes no difference.",
"title": ""
},
{
"docid": "8c6959426bd997ccef966bf5cc436b54",
"text": "You need to fill out form 8606. It's not taxable, but you still need to report it",
"title": ""
},
{
"docid": "c9071f33291146ae94561b8f6f6e5442",
"text": "\"It will count as income, and you can deduct as much of your moving expenses as allowed by tax laws. If you also count it as a reimbursement, then you're double-taxed - once for the income and again by reducing your moving deduction. The \"\"reimbursement\"\" amount is designed for when you get literally reimbursed for exact expenses directly, bypassing the tax on that compensation. The only difference will be that you (and your employer) pay FICA and medicare on the \"\"relocation bonus\"\" that you wouldn't if you were reimbursed. Also, with a reimbursement you are not incentivized to minimize the cost of your relocation (since it's not your money you're spending). With a bonus, since you get to keep whatever is left over, you have a vested interest in keeping your expenses down.\"",
"title": ""
},
{
"docid": "a29abe11d3792ac3fa82a44f4a5d3a09",
"text": "Here is an IRS citation to support my comment above - Exceptions. The 10% tax will not apply if distributions before age 59 ½ are made in any of the following circumstances: Made to a beneficiary (or to the estate of the participant) on or after the death of the participant, Made because the participant has a qualifying disability, Made as part of a series of substantially equal periodic payments beginning after separation from service and made at least annually for the life or life expectancy of the participant or the joint lives or life expectancies of the participant and his or her designated beneficiary. (The payments under this exception, except in the case of death or disability, must continue for at least 5 years or until the employee reaches age 59½, whichever is the longer period.), Made to a participant after separation from service if the separation occurred during or after the calendar year in which the participant reached age 55, Made to an alternate payee under a qualified domestic relations order (QDRO), Made to a participant for medical care up to the amount allowable as a medical expense deduction (determined without regard to whether the participant itemizes deductions), Timely made to reduce excess contributions, Timely made to reduce excess employee or matching employer contributions, Timely made to reduce excess elective deferrals, or Made because of an IRS levy on the plan. Made on account of certain disasters for which IRS relief has been granted.",
"title": ""
},
{
"docid": "cf29d354336d2585c9fbaef99b4ae97e",
"text": "\"The bill proposed to \"\"Under existing law, employers may take tax deductions for the costs associated with moving jobs out of the country. The proposed legislation would have eliminated that, and used the resulting new revenue to fund a 20 percent tax credit for the costs companies run up \"\"insourcing\"\" labor back into the U.S.\"\" From http://abcnews.go.com/m/blogEntry?id=16816660 as found by beermethestrength. I will explain this in an example below. Lets use allen edmonds. I manufacture shoes and sell them in the US. The facts we will assume is Revenue or sales is $100. Manufacturing cost is $50. Tax rate is 10%. Therefore, Profit before tax is $100 -$50 = $50. Tax is $5. Net profit is $45. However, suppose offshoring to Canada saves money. They say please and thank you at every opportunity and the positive work environment allows them to work faster. Correspondingly to make the same number of shoes our costs has decreased because we pay less for labour. The manufacturing cost decreases to $30. However, we incur costs to move such as severance payments to layoff contracted employees. (I promise to hire you and pay $1 a year for 2 years. I fire you at the end of the first year. To be fair, I pay you $1) However, it can be any legitimate expense under the sun. In this case we suppose this moving cost is $10. Revenue or sales is $100. Manufacturing cost is $30. Moving cost is $10. Tax rate is 10%. Profit before tax is $100 -$40 = $60. Tax is $6. Net profit is $54. Yay more jobs for Canadians. However, the legislation would have changed this. It would have denied that moving expense if you were moving out of the country. Therefore, we cannot consider $10 worth of expenses for tax purposes. Therefore Revenue or sales is $100. Manufacturing cost is $30. Tax rate is 10%. Profit before tax for tax purposes is $100 - $30 = $70. Tax is $7. Net profit for tax purposes is $63. However, my accounting/net/real profit is $53. I must deduct the $10 associated with moving. The difference between the two scenarios is $1. In general our net profit changes by our moving cost * our tax rate. There is no tax break associated with moving. In Canadian tax, any business expense in general can be deducted as long as it is legitimate and not specifically denied. I am uncertain but would assume US tax law is similar enough. Moving expenses in general are legitimate and not specifically denied and therefore can be deducted. Offshoring and onshoring are seen as legitimate business activities as in general companies do things to increase profit. (forget about patriotism for the moment). The bill was to make offshoring more expensive and therefore fewer companies would find offshoring profitable. However, republicans defeated this bill in congress. Most likely the house For completeness let us examine what would happen when we onshore (bring jobs from canada to us :( ). In our example, silly unions demand unrealistically high wages and increase our cost of manufacturing to $50 again. We decide to move back to the US because if it is the same everywhere for the sake of silly national pride we move our jobs back to the US. We incur the same moving cost of $10. Therefore we have Revenue or sales is $100. Manufacturing cost is $50. Moving cost of $10. Tax rate is 10%. Profit before tax for tax purposes is $100 - $60 = $40. Tax is $4. However, we are given a 20% tax credit for moving expense. $10 * .2 = 2. The government only assess us tax of 2. Net profit is $38. Tax credits are a one time deal so profit in the future will be $100 -$50 - $5 = $45. Same as the first example. insourcing = onshoring , outsourcing = offshoring for the purposes of this article. Not quite the same in real life.\"",
"title": ""
},
{
"docid": "f7dda4d298962e5676469e1351ccb15d",
"text": "\"Some of the 45,000 might be taxable. The question is how was the stipend determined. Was it based on the days away? The mile driven? The cities you worked in? The IRS has guidelines regarding what is taxable in IRS Pub 15 Per diem or other fixed allowance. You may reimburse your employees by travel days, miles, or some other fixed allowance under the applicable revenue procedure. In these cases, your employee is considered to have accounted to you if your reimbursement doesn't exceed rates established by the Federal Government. The 2015 standard mileage rate for auto expenses was 57.5 cents per mile. The rate for 2016 is 54 cents per mile. The government per diem rates for meals and lodging in the continental United States can be found by visiting the U.S. General Services Administration website at www.GSA.gov and entering \"\"per diem rates\"\" in the search box. Other than the amount of these expenses, your employees' business expenses must be substantiated (for example, the business purpose of the travel or the number of business miles driven). For information on substantiation methods, see Pub. 463. If the per diem or allowance paid exceeds the amounts substantiated, you must report the excess amount as wages. This excess amount is subject to income tax with-holding and payment of social security, Medicare, and FUTA taxes. Show the amount equal to the substantiated amount (for example, the nontaxable portion) in box 12 of Form W-2 using code “L\"\"\"",
"title": ""
},
{
"docid": "a87688fb747cdc8f66ebfc69393bdf18",
"text": "This is taxed as ordinary income. See the IRC Sec 988(a)(1). The exclusion you're talking about (the $200) is in the IRC Sec 988(e)(2), but you'll have to read the Treasury Regulations on this section to see if and how it can apply to you. Since you do this regularly and for profit (i.e.: not a personal transaction), I'd argue that it doesn't apply.",
"title": ""
},
{
"docid": "2b3eb961fe4796f80757fdd694888379",
"text": "IRS Publication 463 is a great resource to help you understand what you can and can't deduct. It's not a yes/no question, it depends on the exact company use, other use, and contemporaneous record keeping.",
"title": ""
},
{
"docid": "719f35b28cb051d605fcb396a7a2589f",
"text": "If the $5000 is income, then you need to pay income taxes on it. That's simply the way it works. Hourly rate has nothing to do with whether or not you pay taxes. If it helps, try to think of the $5000 as the first $5000 you make for the year. Now it's covered by your standard deduction and you're not paying taxes on it.",
"title": ""
},
{
"docid": "42491be125040c117b0ed28d837d1b74",
"text": "Form 1099-misc reports PAYMENTS, not earnings. This does not imply the EARNINGS are not taxable in the year they were earned.",
"title": ""
},
{
"docid": "8b27a63bdb0730b88a8c021fafa174de",
"text": "Both US GAAP and IFRS are accrual basis frameworks. 99.9% of businesses report under those frameworks (or their local gaaps, but still accrual based). Usually it's public sector entities which are cash-basis in my experience. Anyway, accrual basis has more to do with revenue recognition, not taxation, so that's not really relevant here. The value date of an invoice (ie in which moment it becomes taxable) depends on tax legislation (which sets the rules to determine the so called date of taxable event), not so much on accounting principles. In many cases taxable rules are intertwined with cash collection/payment, however, to prevent creative accounting for tax evasion purposes. For example, provisions for various uncertain future events might be required by accounting rules, but the corresponding expenses are generally not deductible for tax purposes (so you won't be able to deduct them until the event actually occurs and you pay).",
"title": ""
},
{
"docid": "9d19da4db1e61fc1df456ca82329d5d1",
"text": "Get answers from your equivalent of the IRS, or a local lawyer or accountant who specializes in taxes. Any other answer you get here would be anectdotal at best. Never good to rely on legal or medical advice from internet strangers.",
"title": ""
},
{
"docid": "c85af7c03bb033ad3f29d889b656daee",
"text": "Currently certain money back policies are tax free and a vast majority are taxable. There are revised guidelines that would govern which policies are tax free. At a broad level the rule is that the sum assured under the policy should be 10 times the premium paid. There is no distinction of single premium or yearly. Hence certain policies of single premium are taxable. Further there is a TDS also in place from this year. This article gives a good overview. You should consult the documentation of your specific policy and check with your insurance company or CA.",
"title": ""
}
] |
fiqa
|
c29106053b7877cea47fb237933d4b2a
|
Do I have to work a certain amount of hours in order to get paid monthly?
|
[
{
"docid": "6cfbf019c80111b6fdd5b46083bd42c7",
"text": "\"Frequency of paychecks is up to the company. Many pay monthly. Some pay twice a month, or every other week. I haven't heard of any paying more frequently unless they were tiny \"\"mom and pop\"\" businesses or grunt-labor/fast-food minimum-wage jobs. Cutting the checks more often is more expensive for the company. And frequency of pay is one of the things you agreed to in the paperwork you signed when you were hired.\"",
"title": ""
}
] |
[
{
"docid": "d03c498cb0f3d31b12ecdefab4ab61fe",
"text": "In case you didn't read the article, they're capped at OVERTIME pay. In other words, they'll continue to get paid their normal salary, but won't get additional benefit over 40 hours worked. Not sure what kind of work you're in, but overtime isn't typical in my part of the world.",
"title": ""
},
{
"docid": "b15825c9c702c3c3c35b2e95ab24d7eb",
"text": "\"This is common. He worked there for 2 years under this scheme, so I'm guessing he was cool with it. Lawsuits pop up when they get mad at management. (*\"\"I worked 70 hours a week for 2 years and they pass me up on the promotion? Hell no, lawsuit time.\"\"*) These mutually beneficial arrangements are almost always agreed on by employer and employee. Employees need hours, employers do not want to pay overtime.\"",
"title": ""
},
{
"docid": "f36f90edaf34f9130411e9ae1d39ac3d",
"text": "Depends on the job. At my current job, when I leave work for the day, I'm done. But I have friends who would likely lose their jobs if they weren't available outside of normal hours. They prefer having a source of income to not having one, even if it means that reddit user ngroot considers them a doormat.",
"title": ""
},
{
"docid": "b1f0e80992cc6ebe4835b16f84a76560",
"text": "In addition to the other comments there are things like training costs. Lower paid employees tend to turn over more quickly so instead of training one employee for 4 weeks and staying for 3 years you spend 12 weeks over that same time period as the minimum wage employees each only stay for a year. Also, you aren't necessarily scheduling all three people at the same time, it might be 3 part time workers at $12 an hour covering one role vs. one full time $20 employee working 40 hours a week.",
"title": ""
},
{
"docid": "c80818b656a54e103ea746e9ffa0a8ef",
"text": "The unstated bit of info is that most minimum wage workers who want to work full time aren't able to. The employers prefer part-timers who get fewer benefits, and whose shifts can be altered at the last minute to match up to real or forecasted demand. If you are a retail clerk or fast food worker, you generally can't get a full time job and with the constantly shifting hours you find it a challenge to get a second part time job because you can't tell the hiring manager in advance when you'll be available to work.",
"title": ""
},
{
"docid": "83d700ae94fb9917fc1904ecdd1d0877",
"text": "\"If you're really interested in the long-term success of your business, and you can get by in your personal finances without taking anything from the business for the time being, then don't. There is no \"\"legal requirement\"\" to pay yourself a prevailing wage if doing so would put the company out of business. it is common for a company's principals not to draw wages from the business until it is viable enough to sustain payroll. I was in that situation when I first began my business, so the notion that somehow I'm violating a law by being fiscally responsible for my own company is nonsense. Be wise with your new business. You didn't state why you feel the need to take some kind of payment out, but this can be a crucial mistake if it imperils your business or if that money could be better spent on marketing or some other areas which improve revenues. You can always create a salary deferral agreement between yourself and your own company which basically states that the company owes you wages but you are, for the time being, willing to defer accepting them until such time that the company has sufficient revenues to pay you. That's one solution, but the simplest answer is, if you don't need the money you're thinking of paying yourself, don't do it. Let that money work for you in the business so that it pays off better in the long run. Good luck!\"",
"title": ""
},
{
"docid": "9dadf04330272c604017c02c4af4042b",
"text": "Another thing to remember is that a lot of these one-off police jobs have 4 hour minimum pay requirements, even when they last half an hour (at least in Massachusetts). If you can schedule two jobs such that each one is half an hour, you could work one hour at lunch time and get paid for 8.",
"title": ""
},
{
"docid": "ea751480073d65d4e870329fddcd427f",
"text": "\"IANAL, but I had heard (and would appreciate someone more qualified commenting on this) that one reason these things were often found unenforceable is that there is no consideration. The contract is to bind you for your work each day, but once you stop working, they allege you have a continued obligation that transcends your time at the company. Claiming that your day-to-day compensation covers this is as if to say some part of that compensation is not for your work but to pay you for not going elsewhere. It would be nice to see at minimum a requirement to separate these two concepts into separate contracts as bundling them creates a blur, and most importantly doesn't allow you to negotiate or walk away from the terms of one part without the other. At the heart of any \"\"market\"\", which the job market purports to be, is a sense that a fair price is reached when both parties can walk away from a bad deal. This is not so in the case of employment because, as Adlai Stevenson said, \"\"a hungry man is not a free man\"\", so someone who needs to eat (or feed a family) has a need to take an offer that is already biasing their acceptance of work, and this quasi-duress is compounded when a company can attach additional pressures that work agains that person's ability to fairly negotiate possible improvements of what may already have been a bad situation. I'm of the impression that duress itself has been argued to be a reason to hold a contract invalid. But more abstractly and generally, any time two parties are bargaining asymmetrically (I'm not sure the legal definition, but intuitively I'd say where one party has the ability to force a contract change and the other party is not), then those terms have to be suspect. Also, for the special case the pay is anything near minimum wage, I would suggest asking the question of whether the part of the compensation that is salary, not \"\"keeping you from working for the competition\"\", is the wage paid consistent with minimum wage, or does it have to draw from the pool of money that is not about wage but is about incentivizing you to not move. And, finally, if they stop paying you, and each day you've been paid a little to work and a little to incentivize you to leave, then are you getting a continued revenue stream to continue to incentivize you not to work for the competition? If not, there would seem again not to be consideration. As I said, I'm not an expert in this. I just follow such matters sometimes in the news. But I don't see these issues getting discussed here and I hope we'll see some useful responses from the crowd here, and also the smart folks at reddit can help through their discussions to form some useful political and legal defenses to help individuals overcome what is really a moral outrage on this matter. Capitalism is an often cruel engine. I worked at a company where one of the bosses said to me, after contributing really great things that added structurally in fundamental ways to the company, \"\"don't tell me what you've done, tell me what you've done lately\"\". Capitalism makes people scrap every day to prove their worth. So it's morally an outrage to see it also trying even as it beats down the price of someone and tells them they aren't entitled to better, to tell them that they may not go somewhere else that thinks they are better. That is not competition and it is not fair. Indentured servitude, not slavery, is more technically correct. And yet it is a push to treat people like capital, so slavery is not inappropriate metaphorically. The topic is non-competes, but really it's about businesses not wanting to have to compete for employees; that is, about businesses not wanting capitalism to prevail in hiring. Sorry for the length.\"",
"title": ""
},
{
"docid": "07a139be6ffe16a27981b5a986c90724",
"text": "It depends on how much your time is worth. Those interest rates from that amount of money will not generate anything convenient. And the effort you make to fulfill the requirements can possibly turn into an overhead cost to getting that $34 a month. For instance, lets say you make $20/hour but you spent an hour trying to figure out how their billpay works. Suddenly not worth it. And if that interest rate is only granted up to $10k, then the compounding effects will be nullified because they won't even grant that same interest rate once the money starts to grow. Hope that helps.",
"title": ""
},
{
"docid": "cf9c0ca45f5ee02dd660876b64279f58",
"text": "Working many hours is not uncommon. When I worked at Fidelity the first half of the month was about 40+, by the second half of the month it was easily 50+. Working on Saturdays or holidays was not uncommon, it was a surprise if you were NOT there. After Fidelity I worked at the AMA for some time and their hours were very structured. I never worked a weekend while there and things were very smooth. So from my personal experience it depends on what company you are working at. Some are fast paced and demand a lot of your time, others are very structured. If you're not married go for the busy job and get as much experience as you can. If along the way you have a family find a job that can offer better structure. When you start earning a decent salary you can easily afford a dog walker, maid, etc. and you manage to balance out things pretty well. Its weird things just fall into place like that. *shrug*",
"title": ""
},
{
"docid": "3ebe277b33ff978605066cd87d13683e",
"text": "\"I feel that getting money sooner than later is always advantageous. If I offered you the choice between getting: Which option would you take? I would take the last option. And for the same reason, from a purely-numbers point of view, I would argue that getting paid biweekly is preferable (assuming the the annual salary is pro-rated fairly, and barring any compulsive spending habits). Your calculations suggest to me that they are trying to answer the question, \"\"Looking at a single year or month (or some other fixed amount of time) in a vacuum, is there any financial benefit to being paid bi-weekly over monthly?\"\". The analysis seems to be focusing on comparing the two pay schedules on a month-by-month basis, noting when one is paid bi-weekly, some months you get paid more times than the other. However, one could also compare the two pay schedules on a fortnight-by-fortnight basis, and note that when one is paid monthly, many fortnights you don't get paid at all, and some you get paid a lot. Or one could compare the two pay schedules on an hour-by-hour basis, too. But in the long run, the money adds up to be the same amount. I prefer getting it as soon as I can.\"",
"title": ""
},
{
"docid": "2b29c93e04ceec1d0542ee63ce9ae6f5",
"text": "Never saw such a study, would be very interested in it. I think it depends on the kind of job. I'd think that - on average - while individually, fixed hours are probably less effective than flexible one, at the scale of a average size company, the gain is offset by the burden from having too many different schedules amongst workers.",
"title": ""
},
{
"docid": "8e89046abe2d4a4719ed99595769f25a",
"text": "There's no such requirement in general. If your particular employer requires that - you should address the question to the HR/payroll department. From my experience, matches are generally not conditioned on when you contribute, only how much.",
"title": ""
},
{
"docid": "6cee2b3f84e0d6ab0786fe2a84886d0f",
"text": "\"I once had to train a guy who worked 2.5 hours away. They had me drive each way everyday, paying both mileage and my hourly rate for the drive. So everyday was 5 hours drive time, 3 hours of work, plus mileage. I asked for permission to get a hotel room, which would break even with my gas reimbursement and let me work with the guy 35 hours a week instead of 15. They said no, my boss had discretion on driving, but had to get hotels approved. I was also told I had to work 5x8hrs days, not 4x10hrs, which would have saved a day of mileage and meals and given 5 extra hours a week with him. There was also a minimum number of training hours that had to be done, so the lesser hours per week meant I did this for months instead of weeks if I had a hotel room. I even got yelled at one day by the location manager because I called out due to weather. \"\"It's against policy to let people call out due to weather unless the location closed due to it.\"\" I had to explain that the ice and snow would drop my driving speed too much and I would spend half the day driving there, the other half driving back and spend no time working.\"",
"title": ""
},
{
"docid": "3447140070796e30cc9327f25db0ea53",
"text": "Salary pay does not compute to hourly wages. As a salary employee you aren't being paid for hours worked, you are being paid for a week of work. Sometimes that requires more time other times less. You could just as well divide your salary by the amount of overtime you work and each week you work 40 hours say that you are being over paid or paid for time not worked.",
"title": ""
}
] |
fiqa
|
cdf0c5e2358bb2dd4d9bb7429ec020f0
|
Where can I find historic ratios by industry?
|
[
{
"docid": "36e6c13ba143bb39a3059a4feef82a8f",
"text": "If you would like to find data on a specific industry/market sector, a good option is IBISworld reports. You can find their site here. You can find reports on almost any major US sector. The reports include historical data as well as financial ratios. In college projects, they were very useful for getting benchmark data to compare an individual business against an industry as a whole.",
"title": ""
}
] |
[
{
"docid": "e3834023eee46345c1a76dc2fc03ec2f",
"text": "Here is one the links for Goldmansachs. Not to state the obvious, but most of their research is only available to their clients. http://www.goldmansachs.com/research/equity_ratings.html",
"title": ""
},
{
"docid": "61324e4efa88c7fb7ec259055a046666",
"text": "\"Do not reinvent the wheel! Historical data about stock market returns and standard deviations suffer from number of issues such as past-filling and mostly survivorship bias -- that the current answers do not consider at all. I suggest to read the paper \"\"A Century of Global Stock Markets\"\" by Philippe Jorion (UC Irvine) and William Goetzmann (Yale), here. William Bernstein comments the results here, notice that rebalancing is sometimes a good option but not always, his non-obvious finding where the low SD did not favour from rebalancing: Look at the final page of the paper, \"\"geometric returns -- represent returns to a buy-and-hold strategy\"\" and the \"\"arithmetic averages -- give equal weight to each observation interval.\"\", where you can find your asked \"\"historical effect of Rebalancing on Return and Standard Deviation\"\". The paper nicely summarizes the results to this table: The results in the table are from the interval 1921-1996, it is not that long-time but even longer term data has its own drawbacks. The starting year 1921 is interesting choice because it is around the times of social-economical changes and depressing moments, historical context can be realized from books such as Grapes Of Wrath (short summary here, although fiction to some extent, it has some resonance to the history). The authors have had to ignore some years because of different reasons such as political unrest and wars. Instead of delving into marketed spam as suggested by one reply, I would look into this search here. Look at the number of references and the related papers to judge their value. P.s. I encourage people to attack my open question here, hope we can solve it!\"",
"title": ""
},
{
"docid": "bc9c402008b52c0eafe34f56502c5e48",
"text": "\"Some years ago, two \"\"academics,\"\" Ibbotson and Sinquefield did these calculations. (Roger) Ibbotson, is still around. So Google Roger Ibbotson, or Ibbotson Associates. There are a number of entries so I won't provide all the links.\"",
"title": ""
},
{
"docid": "76e622fc225406dbd70fb144752364dc",
"text": "\"You could use any of various financial APIs (e.g., Yahoo finance) to get prices of some reference stock and bond index funds. That would be a reasonable approximation to market performance over a given time span. As for inflation data, just googling \"\"monthly inflation data\"\" gave me two pages with numbers that seem to agree and go back to 1914. If you want to double-check their numbers you could go to the source at the BLS. As for whether any existing analysis exists, I'm not sure exactly what you mean. I don't think you need to do much analysis to show that stock returns are different over different time periods.\"",
"title": ""
},
{
"docid": "2085c643e0903e0166fcd669c5cb5a4d",
"text": "It would be difficult, but it's a statistical task, and you'd need to refer to a competent statistician to really get a sense of what sort of certainty could be derived from the available data. I believe that you'd start by looking over your state-by-state data on a granular level to try to find if there was any persistent correlation between Amazon's market penetration in a particular area and employment data from the retail industry. With regards to Ma & Pa's complaint, you're sort of wrong and sort of right. Obviously they have no direct knowledge that online retail was responsible for the decline in sales that they saw. In terms of sustainability and mismanagement, however, they can show you their books. If the business had been established from some time it would be easy to see whether it had indeed been a sustainable business model in prior years. Sustainability and mismanagement, however, are Scotsmen when it comes to reasoning about causes. In measuring the effect of Amazon's entry into the market on local businesses, we can just as easily use a model that assumes a perfect market, that inefficiencies on the part of Ma^1 & Pa^1 would lead them to be displaced by Ma^2 & Pa^2, and that on average Ma^x & Pa^x manage their business sufficiently well to extract an optimal return on effort. If circumstances are such that the role of vendor is not fungible, and the supply of Mas and Pas does not respond to the demand for family stores, then I don't actually know how to do the math, but on the other hand I do recognize a smoking gun.",
"title": ""
},
{
"docid": "b528f29ebaead09e2665fc7058ec1a55",
"text": "Institute of Supply Management, specifically their Report on Business. Good forward looking indicator. As far as the weekly report, I'd probably read it, maybe even contribute, but I more of a lurker on this sub. I saw your question and have had some similar experiences so I thought I could help you out.",
"title": ""
},
{
"docid": "3451c2779bca4a3422a1edf0de832b52",
"text": "At this time, Google Finance doesn't support historical return or dividend data, only share prices. The attributes for mutual funds such as return52 are only available as real-time data, not historical. Yahoo also does not appear to offer market return data including dividends. For example, the S&P 500 index does not account for dividends--the S&P ^SPXTR index does, but is unavailable through Yahoo Finance.",
"title": ""
},
{
"docid": "89c2990dfb7720502059f4fcbbbfa872",
"text": "I dont know if this data is available for the 1980s, but this response to an old question of mine discusses how you can pull stock related information from google or yahoo finance over a certain period of time. You could do this in excel or google spreadsheet and see if you could get the data you're looking for. Quote from old post: Google Docs spreadsheets have a function for filling in stock and fund prices. You can use that data to graph (fund1 / fund2) over some time period.",
"title": ""
},
{
"docid": "1fe2c6cb65515b9032aed7caae98453f",
"text": "\"This is the same answer as for your other question, but you can easily do this yourself: ( initial adjusted close / final adjusted close ) ^ ( 1 / ( # of years sampled) ) Note: \"\"# of years sampled\"\" can be a fraction, so the one week # of years sampled would be 1/52. Crazy to say, but yahoo finance is better at quick, easy, and free data. Just pick a security, go to historical prices, and use the \"\"adjusted close\"\". money.msn's best at presenting finances quick, easy, and cheap.\"",
"title": ""
},
{
"docid": "2285e494799ac5c925329e0178beab88",
"text": "I had a question about this but it apparently wasn’t formed in the right way as I got no explanations and only downvotes, so let me try again. Given the massive amount of info you gave, I tried to go through and find the data I was asking for- data behind the projections of such a loss. Perhaps since I’m not a professional economist, It was not immediately apparent to me how to find the data behind the projections. Would you mind demonstrating how any of these sources provide the data behind how such projections are made? Or do you have any other advice as to how I could find an answer?",
"title": ""
},
{
"docid": "d39558707c99370df964113c766d448b",
"text": "Some other ratios: * Cost per customer (expenses divided by attendance) * Attendance variance year over year * Payroll minutes per patron Not sure if those help. They have a bunch of smaller performance tracking stats from % of waste from inventory to employee performance. From talking with my roommate, the theater industry sounds awfully familiar to how the hotel industry tracks it's performance. The hotel industry tracks performance based on occupancy and room revenue. Theaters track performance based on attendance and concession revenue.",
"title": ""
},
{
"docid": "ce39b9dfd8d0449374b8c1df3bc0e9d5",
"text": "\"For free, 5 years is somewhat available, and 10 years is available to a limited extent on money.msn.com. Some are calculated for you. Gurufocus is also a treasure trove of value statistics that do in fact reach back 10 years. From the Gurufocus site, the historical P/E can be calculated by dividing their figure for \"\"Earnings per Share\"\" by the share price at the time. It looks like their EPS figure is split adjusted, so you'll have to use the split adjusted share price. \"\"Free cash\"\", defined in the comments as money held at the end of the year, can be found on the balance sheet as \"\"Cash, Cash Equivalents, Marketable Securities\"\"; however, the more common term is \"\"free cash flow\"\", and its growth rate can be found at the top of the gurufocus financials page.\"",
"title": ""
},
{
"docid": "ce932128386e9ac1e3bdbe0c347a0ad7",
"text": "If annualized rate of return is what you are looking for, using a tool would make it a lot easier. In the post I've also explained how to use the spreadsheet. Hope this helps.",
"title": ""
},
{
"docid": "477ff98da46062514eaec62de026fd63",
"text": "Center for Research in Security Prices would be my suggestion for where to go for US stock price history. Major Asset Classes 1926 - 2011 - JVL Associates, LLC has a PDF with some of the classes you list from the data dating back as far as 1926. There is also the averages stated on a Bogleheads article that has some reference links that may also be useful. Four Pillars of Investing's Chapter 1 also has some historical return information in it that may be of help.",
"title": ""
},
{
"docid": "12226cbcd9d23ce4d27dc0efef65eece",
"text": "Don't have access to a Bloomberg, Eikon ect terminal but I was wondering if those that do know of any functions that show say, the percentage of companies (in different Mcap ranges) held by differing rates institutionally. For example - if I wanted to compare what percentage of small cap companies' shares are 75% or more held by institutions relative to large cap companies what could I search in the terminal?",
"title": ""
}
] |
fiqa
|
876768cf186ab338ab45cef49b57a6ff
|
Live in Florida & work remote for a New York company. Do I owe NY state income tax?
|
[
{
"docid": "b0159ad19d2e7894186199694be24db4",
"text": "If you're not a NY (tax) resident, then as long as you're not physically present in New York - you do not owe NY taxes on compensation for your services. But that is if you're a 1099 contractor/employee. If you're a partner/shareholder in a partnership/LLC/S-Corp registered or conducting business in New York, and that company pays you money - you do owe NY taxes. See this page of the NY revenue agency for more details.",
"title": ""
},
{
"docid": "f55d808ccf87a99e2a6100e95f2e63ec",
"text": "\"New York State is one of a few states that will go after telecommuter taxes (such that some people may end up paying double tax even if they don't live in NY). There are a few ways that you can avoid this. If you NEVER come to NY for work, and your employer can stipulate that your position is only available to be filled remotely, you will likely be covered. But there are a myriad of factors relating to this such as whether the employer reimburses you for your home office and whether you keep \"\"business records\"\" at your office. Provided you can easily document the the factors in TSB-M-06(5)I, you shouldn't have to pay NYS taxes. (source: I've worked with a NYS tax attorney as an employer to deal with this exact scenario).\"",
"title": ""
},
{
"docid": "4a89404183a0ad268890174c0623c23d",
"text": "This question came up again (Living in Florida working remotely - NY employer withholds NYS taxes - Correct or Incorrect?) and the poster on the new version didn't find the existing answers to be adequate, so I'm adding a new answer. NYS will tax this income if the arrangement is for the convenience of the employee. If the arrangement is necessary to complete the work, then you should have no NYS tax. New York state taxes all New York-source salary and wage income of nonresident employees when the arrangement is for convenience rather than by necessity (Laws of New York, § 601(e), 20 NYCRR 132.18). Source: http://www.journalofaccountancy.com/issues/2009/jun/20091371.html Similar text can also be found here: http://www.koscpa.com/newsletter-article/state-tax-consequences-telecommuting/ The NYS tax document governing this situation seems to be TSB-M-06(5)I. I looked at this page from NYS that was mentioned in the answer by @littleadv. That language does at first glance seem to lead to a different answer, but the ruling in the tax memo seems to say that if you're out of state only for your convenience then the services were performed in NYS for NYS tax purpose. From the memo: However, any allowance claimed for days worked outside New York State must be based upon the performance of services which of necessity, as distinguished from convenience, obligate the employee to out-of- state duties in the service of his employer.",
"title": ""
}
] |
[
{
"docid": "dd17ea184df500d33e41bc9dd5e08bd4",
"text": "Unfortunately, no. Think about the numbers. If you work for me, and I pay you $1000, you owe tax on $1000. If you still work, but I don't pay you, you have no tax due, but there's no benefit for you to collect for my stealing your time.",
"title": ""
},
{
"docid": "945eb80f0e0868d1ce532122081f547d",
"text": "\"Most states that have income tax base their taxes on the income reported on your federal return, with some state-specific adjustments. So answering your last question first: Yes, if it matters for federal, it will matter for state (in most cases). For estimating the tax liability, I would not use the effective rate but rather use the rate for your highest tax bracket and apply that to your estimated hobby income, assuming that you primary job income won't be wildly higher or lower than last year. As @keshlam noted in a comment, this income is coming on top of whatever else you earn, so it will be taxed at your top rate. Finally, I'd check again whether this is really \"\"hobby\"\" income or if it is \"\"self-employment\"\" income. Self-employment income will be subject to self-employment tax, which comes on top of the regular income tax.\"",
"title": ""
},
{
"docid": "c2fe5a2fd10180b48792906009b272fc",
"text": "I am a freelancer based in Europe and I want to tell you: - if you are a freelancer, then you INVOICE your Swizzerland based client The word salary is improper. - So your client will DEDUCE the invoice from its taxes, and NOT pay income tax on top of that invoice. Because invoice = expense. So, ONLY YOU pay income tax in India. Your client pays no tax at all, not in India, not in Swizzerland. As you are a freelancer and not employee, the company has no obligation to pay employer taxes for you. A company has financial benefits from working with a freelancer.",
"title": ""
},
{
"docid": "afd0af4f530800a292b002e12d4917c2",
"text": "The IRS can direct your refund towards repayment of your unpaid taxes either on Federal or State/Local level. Whether it will depends on whether the State of New York will ask for it. Generally, if you owe taxes to New York for this year only, you would expect them to wait for you to file your State tax return and pay the taxes owed. If you don't - I'm pretty sure that the next year refund from the IRS will go directly to them.",
"title": ""
},
{
"docid": "20c142df943348a0135a62c9553986d0",
"text": "\"I don't see why you would need an \"\"international tax specialist\"\". You need a tax specialist to give you a consultation and training on your situation, but it doesn't seem too complicated to me. You invoice your client and get paid - you're a 1099 contractor. They should issue you a 1099 at the end of the year on everything they paid you. Once you become full-time employee - you become a W2 employee and will get a W2 at the end of the year on the amounts paid as such. From your perspective there's nothing international here, regular business. You have to pay your own taxes on the 1099 income (including SE taxes), they have to withhold taxes from your W2 income (including FICA). Since they're foreign employers, they might not do that latter part, and you'll have to deal with that on your tax return, any decent EA/CPA will be able to accommodate you with that. For the employer there's an issue of international taxation. They might have to register as a foreign business in your state, they might be liable for some payroll taxes and State taxes, etc etc. They might not be aware of all that. They might also be liable (or exempt) for Federal taxes, depending on the treaty provisions. But that's their problem. Your only concern is whether they're going to issue you a proper W2 and do all the withholdings or not when the time comes.\"",
"title": ""
},
{
"docid": "05575c7ecd138f1d959b8ffd50b5d3d2",
"text": "I have researched this question extensively in previous years as we have notoriously high taxes in California, while neighboring a state that has zero corporate income tax and personal income tax. Many have attempted pull a fast one on the California taxation authorities, the Franchise Tax Board, by incorporating in Nevada or attempting to declare full-year residence in the Silver State. This is basically just asking for an audit, however. California religiously examines taxpayers with any evidence of having presence in California. If they deem you to be a resident in California, and they likely will based on the fact that you live in California (physical presence), you will be subject to taxation on your worldwide income. You could incorporate in Nevada or Bangladesh, and California will still levy its taxation on any business income (Single Member LLCs are disregarded as separate corporate entities, but still taxed at ordinary income rates on the personal income tax basis). To make things worse, if California examines your Single Member LLC and finds that it is doing business in California, based on the fact that its sole owner is based in California all year long, you could feasibly end up with additional penalties for having neglected to file your LLC in California (California LLCs are considered domestic, and only file in California unless they wish to do business in other states; Nevada LLCs are considered foreign to California, requiring the owner to file a domestic LLC organization in Nevada and then a foreign LLC organization in California, which still gets hit with the minimum $800 franchise fee because it is a foreign LLC doing business in California). Evading any filing responsibility in California is not advisable. FTB consistently researches LLCs, S-Corporations and the like to determine whether they've been organized out-of-state but still principally operated in California, thus having a tax nexus with California and the subsequent requirement to be filed in California and taxed by California. No one likes paying taxes, and no one wants to get hit with franchise fees, especially when one is starting a new venture and that minimum $800 assessment seems excessive (in other words, you could have a company that earns nothing, zero, zip, nada, and still has to pay the $800 minimum fee), but the consequences of shirking tax laws and filing requirements will make the franchise fee seem trivial in comparison. If you're committed to living in California and desire to organize an LLC or S-Corp, you must file with the state of California, either as a domestic corporation/LLC or foreign corporation/LLC doing business in California. The only alternatives are being a sole proprietor (unincorporated), or leaving the state of California altogether. Not what you wanted to hear I'm sure, but that's the law.",
"title": ""
},
{
"docid": "f6ad013cf08e69dbb6805502c23c936c",
"text": "Fear tactics posted above, likely by IRS agents. Yes, you qualify based on the residence test. You perform your work outside the US. You gather business data in a foreign country. The income is excluded.",
"title": ""
},
{
"docid": "4df5bb9fc859ff7e608102a75e71a935",
"text": "\"If you are a telecommuter and in good terms with your employer, then all you need is contact your employer and explain your situation. Ask them for a short letter that indicates: \"\"1. they require you to work from a privately rented office (or from a home office for those who prefer working from home), 2. this is one of the terms of your employment, and, 3. they will not reimburse you for this expense.\"\" With this letter in your hand, you satisify both the \"\"convenience of employer\"\" test AND the deduction of the rent for your private office as a unreimbursed employee expense. The IRS cannot expect your employer to open an office branch in your city just for your sake, nor can they expect you to commute to your employer's city for work, which is an impossiblity considering the distance. Additionally, the IRS cannot \"\"force\"\" telecommuters to work from home. The key is to get a letter from your employer. You'd be surprised how easily they are willing to write such letter for you.\"",
"title": ""
},
{
"docid": "cbc909847ba684c0856d3df9be9f5403",
"text": "If you're a US citizen/resident - you pay taxes on your worldwide income regardless of where you live. The logic is that Americans generally don't agree to the view that there's more than one country in the world. If you're non-US person, not physically present in the US, and provide contract work for a US employer - you generally don't pay taxes in the US. The logic is that the US doesn't actually have any jurisdiction over that money, you didn't earn it in the US. That said, your employer might withheld tax and remit it to the IRS, and you'll have to chase them for refund. If you receive income from the US rental property or dividends from a US company - you pay income tax to the US on that income, and then bargain with your home tax authority on refunds of the difference between what you paid in the US and what you should have paid at home. You can also file non-resident tax return in the US to claim what you have paid in excess. The logic is that the money sourced in the US should be taxed in the US. You earned that money in the US. There are additional rules to more specific situation, and there are also bilateral treaties between countries (including a US-Canadian treaty) that supersede national laws. Bottom line, not only that each country has its own laws, there are also different laws for different situations, and if some of the international treaties apply to you - it further complicates the situation. If something is not clear - get a professional advice form a tax accountant licensed in the relevant jurisdictions (in your case - any of the US states, and the Canadian province where you live).",
"title": ""
},
{
"docid": "a411a0d06008a2f1d26323c304233202",
"text": "Many states require that USE tax be paid on items purchased out of state and the subsequently brought to your home state. The vendor has the responsibility to collect based upon the shipping destination. It is the buyers responsibility to declare and pay taxes on purchases where the vendor is not required to collect them for your state(like when you purchase it out of state). So if you have an item shipped out of state to avoid sales tax and then bring it to your home state then you are required to pay sales tax in your home state as well. Some states (Florida for 1) allow for the reduction in sales tax owed by the amount paid in out of state sales taxes. Some states (Like CT) exempt purchases under a certain amount. Federation of Tax Administrators website has links to state revenue services where you can check the tax requirements for your (and other) states. Other State Links",
"title": ""
},
{
"docid": "7025abbb8c3634f7cd9a1bb9bd33f071",
"text": "\"I think the 60 days/year come from the IRS tax residency determination, which isn't a Florida law but applies to all the states. Have a look at the \"\"substantial presence\"\" paragraph to see where the 60 days are coming from.\"",
"title": ""
},
{
"docid": "390d6a4321ba550ab4081a7c24fe69a9",
"text": "As a resident of New York State you will, in addition to the Federal income tax handled by the IRS, be responsible for state and local income taxes. For New York the state tax forms are also used to determine your New York city tax. If HR was either not aware of the local tax requirement for New York or you filled out the New York State version of the W-4 incorrectly you may have had too little tax withheld for New York state. The refund from the IRS is not dependent on the refund/owe status for state and local taxes. It is possible that your state taxes are fine but that you owe taxes to the city. That tax you owe to the city will reduce the refund from the state and may require you to pay money to New York. Of course if you do itemize, what you pay to the state and city may result in deductions on your federal form. If you owe back taxes to the state or local government this could result in the IRS seizing a federal refund, but that doesn't happen right away.",
"title": ""
},
{
"docid": "d6a98d3d7c90ccb8fe872ecdb9013ed4",
"text": "According to the New York State Department of Taxation and Finance, your service would appear to be exempt from taxes. However, if you are charging for tangible items, those would incur a sales tax.",
"title": ""
},
{
"docid": "521ca52299c5af07b7cf3157b6a45764",
"text": "\"TL;DR: Get a tax adviser (EA/CPA licensed in your State) for tax issues, and a lawyer for the Operating Agreement, labor law and contract related issues. Some things are not suitable for DIY unless you know exactly what you're doing. We both do freelance work currently just through our personal names. What kind of taxes are we looking into paying into the business (besides setup of everything) compared to being a self proprietor? (I'm seeing that the general answer is no, as long as income is <200k, but not certain). Unless you decide to have your LLC taxed as a corporation, there's no change in taxes. LLC, by default, is a pass-through entity and all income will flow to your respective tax returns. From tax perspective, the LLC will be treated as a partnership. It will file form 1065 to report its income, and allocate the income to the members/partners on schedules K-1 which will be given to you. You'll use the numbers on the K-1 to transfer income allocated to you to your tax returns and pay taxes on that. Being out of state, will she incur more taxes from the money being now filtered through the business? Your employee couldn't care less about your tax problems. She will continue receiving the same salary whether you are a sole proprietor or a LLC, or Corporatoin. What kind of forms are we looking into needing/providing when switching to a LLC from freelance work? Normally we just get 1099's, what would that be now? Your contract counterparts couldn't care less about your tax problems. Unless you are a corporation, people who pay you more than $600 a year must file a 1099. Since you'll be a partnership, you'll need to provide the partnership EIN instead of your own SSN, but that's the only difference. Are LLC's required to pay taxes 4 times per year? We would definitely get an accountant for things, but being as this is side work, there will be times where we choose to not take on clients, which could cause multiple months of no income. Obviously we would save for when we need to pay taxes, but is there a magic number that says \"\"you must now pay four times per year\"\". Unless you choose to tax your LLC as a corporation, LLC will pay no taxes. You will need to make sure you have enough withholding to cover for the additional income, or pay the quarterly estimates. The magic number is $1000. If your withholding+estimates is $1000 less than what your tax liability is, you'll be penalized, unless the total withholding+estimates is more than 100% of your prior year tax liability (or 110%, depending on the amounts). The LLC would be 50% 50%, but that work would not always be that. We will be taking on smaller project through the company, so there will be times where one of us could potentially be making more money. Are we setting ourselves up for disaster if one is payed more than the other while still having equal ownership? Partnerships can be very flexible, and equity split doesn't have to be the same as income, loss or assets split. But, you'll need to have a lawyer draft your operational agreement which will define all these splits and who gets how much in what case. Make sure to cover as much as possible in that agreement in order to avoid problems later.\"",
"title": ""
},
{
"docid": "74b1000ebe616ec1d7efb65f43d157f6",
"text": "Apples and oranges. The stock market requires a tiny bit of your time. Perhaps a lot if you are interested in individual stocks, and pouring through company annual reports, but close to none if you have a mix of super low cost ETFs or index fund. The real estate investing you propose is, at some point, a serious time commitment. Unless you use a management company to handle incoming calls and to dispatch repair people. But that's a cost that will eat into your potential profits. If you plan to do this 'for real,' I suggest using the 401(k), but then having the option to take loans from it. The ability to write a check for $50K is pretty valuable when buying real estate. When you run the numbers, this will benefit you long term. Edit - on re-reading your question Rental Property: What is considered decent cash flow? (with example), I withdraw my answer above. You overestimated the return you will get, the actual return will likely be negative. It doesn't take too many years of your one per year strategy to wipe you out. Per your comment below, if bought right, rentals can be a great long term investment. Glad you didn't buy the loser.",
"title": ""
}
] |
fiqa
|
e7cdeb2ad3869b10fb9dad9cfd6d9438
|
Why would analysts recommend buying companies with negative net income?
|
[
{
"docid": "833509e9ec1ece0c37d885e1776f3407",
"text": "\"The biotechnology sector as a whole is a popular buy recommendation among some analysts these days for a few reasons. Some analysts feel that the high costs in R&D, even without much profit, are a positive sign for growth because it means a company is working towards finding the next \"\"blockbuster drug\"\" or the next class of such drugs. There haven't been many new classes of blockbuster drugs since the development of SSRI's and statins, and many of the new drugs that have been developed have been tweaks to existing classes of drugs. Some analysts feel that \"\"it's about time\"\" for a new class of blockbuster drugs to hit the market. A new blockbuster drug means significant profits for the company that develops it; a new class of blockbuster drugs means significant profits for the whole industry. Since about 2009, the Food and Drug Administration has been more lenient in its approval of new drugs. This wave of new approvals has reduced R&D costs for companies because they don't need to go back to the lab or earlier phases of clinical trials and continually tweak their drugs in order to gain approval. This has also made some analysts optimistic. Genetic engineering is considered an up-and-coming field with potentially significant applications to the pharmaceutical industry. Advances in this field may increase profits for the pharm industry, but since biotech companies are often the ones producing the engineering equipment, research, etc. such advances could be a major source of revenue for the entire biotech industry. In the US and in the developed world as a whole, the elderly population is growing, and since people consume more medicine as they grow older, this could lead to higher profits for companies involved in the production of pharmaceuticals (which includes biotech companies, of course) in the long run. In the US, the passage of the Patient Protection and Affordable Care Act expanded insurance coverage, which gives more people the means to afford pharmaceuticals. Also, in general, people consume more healthcare services when they have insurance (this is called moral hazard), so some analysts expect that the expansion of insurance coverage will only lead to more profits for the pharmaceutical industry and biotechnology firms in general. The global food crisis. As the climate changes, companies like Monsanto, which use various forms of genetic engineering to produce crop strains that can survive in increasingly hostile environments, look more and more appealing to places that need crops designed to grow in such environments. Any methods that could increase yields look increasingly popular, and biotechnology companies often market such methods. (As a side note, I know Monsanto is a contentious example, and there are a lot of misconceptions about \"\"genetically modified food\"\" and the genetic engineering methods they do, so I won't get into a debate about that). In general, technology is a popular subject right now. I've read analyst reports (from analysts that clearly don't follow the biotech sector) that base their forecasts for the biotech sector on the activities of companies like Dell, Zynga, HP, LinkedIn, Facebook, etc. Clearly, it's problematic when an analyst sees the word \"\"technology\"\" and automatically assumes that the biotech sector is responsive to the same factors as social media firms, hardware manufacturers, etc. This isn't to say that the biotech sector is completely isolated from this, but when I read a report that talks about Facebook's IPO being bad news for companies like Gilead Sciences without mentioning upcoming FDA decisions about Gilead's products or any biotech-specific factors, I'm not convinced the analyst has performed due diligence. I keep using the phrase \"\"some analysts\"\" because I want to stress that the opinions stated above aren't universal. Although they're popular, not everyone is so optimistic. Also, I don't want you to see these reasons and think that I'm making a buy recommendation, because I'm not. I'm not making a recommendation one way or another. I'm happy to clarify my answer too; I follow the biotechnology sector extensively. If you want to get a rough feel for the daily movements of the sector as a whole, a good place to start is IBB, the iShares Nasdaq Biotechnology Index Fund. The four largest holdings are Regeneron, Gilead Sciences, Amgen, and Celgene, which are all big players in the industry (obviously). These are a little different from the big name pharma companies like Pfizer, Merck, Novartis, etc. but they're still considered pharma companies. It's also worthwhile to follow the FDA press announcements. By the time the news is published there, it's probably already leaked or known to people in the industry (the biotech/pharm sectors are rife with accusations of insider trading), so you might not find trading opportunities, but it's important to get familiar with the information the releases contain if you want to know more about the industry. Volatility trades are always popular trades around FDA drug approvals.\"",
"title": ""
},
{
"docid": "d4521934ec85b9804d0873a7241a44ee",
"text": "Companies in their earliest stages will likely not have profits but do have the potential for profits. Thus, there can be those that choose to invest in companies that require capital to stay in business that have the potential to make money. Venture Capital would be the concept here that goes along with John Bensin's points that would be useful background material. For years, Amazon.com lost money particularly for its first 6 years though it has survived and taken off at times.",
"title": ""
},
{
"docid": "555be60b1c7c421fc2d3104626e6fa19",
"text": "\"Most likely because they don't know what they're talking about. They all have a belief without evidence that information set X is internalised into the price but information set Y is not. If there is some stock characteristic, call it y, that belongs to set Y, then that moves the gauge towards a \"\"buy\"\" recommendation. However, the issue is that no evidence has been used to determine the constituents of X and Y, or even whether Y exists in any non-trivial sense.\"",
"title": ""
}
] |
[
{
"docid": "74a6a11df8141bf6906945103103b30f",
"text": "Right, I understand minority interest but it is typically reported as a positive under liabilities instead of a negative. For example, when you are calculating the enterprise value of a company, you add back in the minority interest. Enterprise Value= Market Share +Pref Equity + Min Interest+ Total Debt - Cash and ST Equivalents. EV is used to quantify the total price of a company's worth. If you have negative Min Interest on your books, that will make your EV less than it should be, creating an incorrect valuation. This just doesn't make any sense to me. Does it mean that the subsidiary that they had a stake in had a negative earning?",
"title": ""
},
{
"docid": "9e358688d39c4c6a8e315a4c826146db",
"text": "\"The company released its 2nd Quarter Revenue of $1,957,921 a couple days ago however the stock did not move up in any way. Why? If the company is making money shouldn't the stock go up. During the time between earnings announcements, analysts occasionally publish their assessment of a company, including their estimate of the company's value and future earnings. And as part of an earnings report, companies often include \"\"guidance\"\": their prediction for the upcoming quarter (this will frequently be a conservative estimate, so they're more likely to achieve it). Investors make their purchase and sale decisions based on this information. When the earnings report comes out, investors compare these actual returns to analysts' predictions and the company's guidance. If their results are in line with these predictions, the stock price is unlikely to move much, as those results are already incorporated into the stock price. If the company is doing better than predicted, it's usually a good sign, and the price often rises; conversely, if it's doing worse, the price will likely fall. But it's not as simple as this. As others have explained, for long-term investors, stock prices are based on expectations of future activity. If the results of that quarter include some one-time actions that are unlikely to repeat, investors will often discount that portion.\"",
"title": ""
},
{
"docid": "39d9fb59d7fa1dca7f75c482b5943014",
"text": "According to pretty well accepted corporate finance principles. They're mature/maturing companies with large durable noncyclical cash flow streams. Increasing their debt load and distributing the proceeds to shareholders would lower their after tax cost of capital and increase the value of their equity. IMO operating with such under levered balance sheets is nonoptimal. It's subjective though.",
"title": ""
},
{
"docid": "46209eafc0c865103c6e95b81c4e4564",
"text": "I've spent enough time researching this question where I feel comfortable enough providing an answer. I'll start with the high level fundamentals and work my way down to the specific question that I had. So point #5 is really the starting point for my answer. We want to find companies that are investing their money. A good company should be reinvesting most of its excess assets so that it can make more money off of them. If a company has too much working capital, then it is not being efficiently reinvested. That explains why excess working capital can have a negative impact on Return on Capital. But what about the fact that current liabilities in excess of current assets has a positive impact on the Return on Capital calculation? That is a problem, period. If current liabilities exceed current assets then the company may have a hard time meeting their short term financial obligations. This could mean borrowing more money, or it could mean something worse - like bankruptcy. If the company borrows money, then it will have to repay it in the future at higher costs. This approach could be fine if the company can invest money at a rate of return exceeding the cost of their debt, but to favor debt in the Return on Capital calculation is wrong. That scenario would skew the metric. The company has to overcome this debt. Anyways, this is my understanding, as the amateur investor. My credibility is not even comparable to Greenblatt's credibility, so I have no business calling any part of his calculation wrong. But, in defense of my explanation, Greenblatt doesn't get into these gritty details so I don't know that he allowed current liabilities in excess of current assets to have a positive impact on his Return on Capital calculation.",
"title": ""
},
{
"docid": "3b9ae35eb128a2fcc6a93a1cd48c9cae",
"text": "The indication is based on the average Buy-Hold-Sell rating of a group of fundamental analysts. The individual analysts provide a Buy, Hold or Sell recommendation based on where the current price of the stock is compared to the perceived value of the stock by the analyst. Note that this perceived value is based on many assumptions by the analyst and their biased view of the stock. That is why different fundamental analysts provide different values and different recommendations on the same stock. So basically if the stock's price is below the analyst's perceived value it will be given a Buy recommendation, if the price is equal with the perceived value it will be given a Hold recommendation and if the price is more than the perceived value it will be given a Sell recommendation. As the others have said this information IMHO is useless.",
"title": ""
},
{
"docid": "5612dcb81d25c948a71027db30822c3b",
"text": "\"If a company is doing well, it seems less likely to go bankrupt. If a company is doing poorly, it seems more likely to go bankrupt. The problem is, where is the inflection point between \"\"well\"\" and \"\"poorly\"\"? When does a company start to head into oblivion? Sometimes it is hard to know. But if you don't call that right and hold onto your shares when a company is tanking, others, who call it before you do, will sell off, devalue the share price, and now you've missed your chance to get out at a good profit. If you hang on too long, the company may just go bankrupt and you've lost your investment entirely. A healthy profitability of the company therefore has to bolster investor confidence in avoiding this very unpleasant scenario. Therefore, the more profitable a company is, the more shareholder confidence it inspires, and the more willing to pay for it in the form of increased share price. And, this then has a \"\"meta\"\" effect, in that each shareholder thinks, \"\"all other investors think this way, too,\"\" and so each feels good about holding the stock, since he knows he can likely easily liquidate it for good cash if he needs to, either now or in the next year or sometime hence.\"",
"title": ""
},
{
"docid": "022b2047d5aa7a04f382006442c2b68b",
"text": "\"Greatowl's response is pretty cynical. I'm not a wall street analyst but I do read some of the research and there is a lot of respectable analysis out there. There are many smart analysts who consistently get poached from the equity research departments to join the buy side. I'd also contend that level of accuracy is an incomplete measure of performance. It doesnt matter if you're right or wrong, what matters is how much you make when you are right and how much you lose when you are wrong. Soros is purported to have a 30% \"\"batting average\"\" but the guy makes a killing when he's right (source: Inside the House of Money).\"",
"title": ""
},
{
"docid": "69ecd756d26ab41775af6aef6f9aa581",
"text": "P/E is the number of years it would take for the company to earn its share price. You take share price divided by annual earnings per share. You can take the current reported quarterly earnings per share times 4, you can take the sum of the past four actual quarters earnings per share or you can take some projected earnings per share. It has little to do with a company's actual finances apart from the earnings per share. It doesn't say much about the health of a company's balance sheet, and is definitely not an indicator for bankruptcy. It's mostly a measure of the market's assumptions of the company's ability to grow earnings or maintain it's current earnings growth. A share price of $40 trading for a P/E ratio of 10 means it will take the company 10 years to earn $40 per share, it means there's current annual earnings per share of $4. A different company may also be earning $4 per share but trade at 100 times earnings for a share price of $400. By this measure alone neither company is more or less healthy than the other. One just commands more faith in the future growth from the market. To circle back to your question regarding a negative P/E, a negative P/E ratio means the company is reporting negative earnings (running at a loss). Again, this may or may not indicate an imminent bankruptcy. Increasing balance sheet debt with decreasing revenue and or earnings and or balance sheet assets will be a better way to assess bankruptcy risk.",
"title": ""
},
{
"docid": "53b40fbc4f59ba72d23147ba20bacc3b",
"text": "Talk to almost any large cap CFO or read any corporate finance textbook. McKinsey's Valuation is a great one to own: though yes McKinsey consultants can take a good idea and turn it bad by overdoing it to an extreme. Why would universal corporate finance principles not apply to large cap tech? Why is having $XXb of unutilized cash for a company with durable cash flow a good thing for equity investors?",
"title": ""
},
{
"docid": "bc604c1fddc098493a3be4d6559aaa68",
"text": "Agree with mjvcaj, it is rare. Larger cap examples include Nokia and NII Holdings (Nextel). If cash exceeds market cap, that means total debt is greater than EV, the value of the operating assets. If the debt is partially repaid / matures, the equity is ok. BUT if management is crap and the cash is spent at an ROIC below the interest rate on the debt, now you have a situation where the net debt exceeds the value of the operating assets, the credit quality suffers, debt trades down, you need to recapitalize in order to avoid bankruptcy. The above assumes debt is greater than cash. Situations where cash exceeds market cap and debt is less than cash (i.e. a negative EV) are exceedingly rare in larger companies and are either a) a wonderfully attractive mispricing or b) market views management as so awful that the cash will get burnt up by the business and the value of that cash will be destroyed.",
"title": ""
},
{
"docid": "b2b54cdc0716e474b03097af2f154815",
"text": "\"If there's indeed no reason to trust GS, i.e. those are just guides then the question is: Why do investors seem to care? Because there's a reason to trust. You're just reading the bottom line - the target price range. More involved investors read the whole report, including the description of the current situation, the premises for the analysis, the expectations on the firm's performance and what these expectations are based on, the analysis of how the various scenarios might affect the valuation, and the evaluation of chances of these scenarios to occur. You don't have to trust everything and expect it to be 100% correct, analysts are not prophets. But you do have an option of reading their reports and critically analyzing their conclusions. What you suspect GS of doing (\"\"I tend to believe those guys just want themselves a cheap buy price a few days before Q2 earnings release\"\") is a criminal offence.\"",
"title": ""
},
{
"docid": "5b9d617f557de461922e4bbc5006d96e",
"text": "Their net income hangs around zero because they raise expenses as reinvestment in the company (line items like $16.09B in Research & Development expense last year). Retained earnings is a balance sheet item reflective of assets they're holding for projects in a later fiscal period; they aren't waiting for the next period to reinvest.",
"title": ""
},
{
"docid": "33e88a0fd8405877ed821efe13bd3a78",
"text": "P/E ratio is useful but limited as others have said. Another problem is that it doesn't show leverage. Two companies in the same industry could have the same P/E but be differently leveraged. In that case I would buy the company with more equity and less debt as it should be a less risky investment. To compare companies and take leverage/debt into account you could use the EV/EBIT ratio instead. Its slightly more complicated to calculate and isn't presented by as many data sources though. Enterprise Value (EV) can be said to represent the value of the company if someone would buy it today and then pay off all its (interest bearing) debt. EV is essentially calculated like this: (Market Capitalization plus cash & cash equivalents) minus interest-bearing debt. This is then divided by EBIT (Earnings before interest and tax) to get the ratio. One drawback of this ratio though is that it can't be used for financials since their balance sheet pretty much consists of debt and the Enterprise Value therefore doesn't tell us very much. Also, like the P/E ratio it is dependent on fresh numbers. A balance sheet is just a glimpse of the companys financial situation on ONE DAY, and this could (and probably will, although not drastically for bigger companies) change to the next day.",
"title": ""
},
{
"docid": "418560ccfabd92b6f509f8e16d8243ea",
"text": "Anyone who claims they can consistently beat the market and asks you to pay them to tell you how is a liar. This cannot be done, as the market adjusts itself. There's nothing they could possibly learn that analysts and institutional investors don't already know. They earn their money through the subscription fees, not through capital gains on their beat-the-market suggestions, that means that they don't have to rely on themselves to earn money, they only need you to rely on them. They have to provide proof because they cannot lie in advertisements, but if you read carefully, there are many small letters and disclaimers that basically remove any liability from them by saying that they don't take responsibility for anything and don't guarantee anything.",
"title": ""
},
{
"docid": "63aa0aa9df8392a03397153ad07ed3a5",
"text": "Because collective bargaining by the gov't and your employer is the only way that we've been able to combat some of the increases. An uninsured individual will be billed 4-10x what your insurance company would pay due to collective bargaining. The largest employers (Cisco, EMC, and others) are self-insured and pay health care providers to administer their plan. SMBs get the short end of the stick and pay much higher rates for less coverage because they don't have economies of scale. A public option would allow any uninsured individual to obtain health care at a reasonable, income-based cost.",
"title": ""
}
] |
fiqa
|
9a0b5f0120916a716a0fdf3cfd8d9725
|
Mortgage interest income tax deduction during year with a principal residence change
|
[
{
"docid": "7aab38b3269000319e156bc95984f607",
"text": "http://www.irs.gov/publications/p936/ar02.html#en_US_2010_publink1000229891 If you still own it, you get to deduct all of it. In my taxes I did online with TaxAct, it asked if I lived there or not and it just mattered which form it filed for me. With having tenants it was a 'business' form and I assume it would be a standard schedule A for personal. Either way the deductions are still mine to take.",
"title": ""
},
{
"docid": "90b272b16d3db982961db359ed6ecedc",
"text": "Very simple. If it wasn't rented, it's deductible as a schedule A home mortgage interest. If it was rented, you go into Schedule E land, still a deduction along with any/every expense incurred.",
"title": ""
}
] |
[
{
"docid": "1445b89ab44471005c83df5b57ed7abe",
"text": "If your deductions are higher than the standard deduction, you will be able to subtract property taxes from your income. In your example, that means that taxes are computed based on $95,000. In 2011, the standard deduction varies between $5,800 (single filer) and $11,600 (married filing jointly). Tax credits are subtracted from your tax obligation. The most common tax credit for most people is student loan interest. If you pay $500 in student loan interest, that sum is subtracted from your tax bill.",
"title": ""
},
{
"docid": "fdec197055dffa8e1c0dea64c9353ba1",
"text": "If you mess with the interest deduction, you take away one of the main reason for home ownership. So without the deduction we will become a nation of renters. This will only hurt communities because renters have less at stake when it comes to community prosperity.",
"title": ""
},
{
"docid": "62e19fc212bb3018ffc2b2faf371bbf9",
"text": "No one has considered the tax write off at the end of the year? Will the house be in the parent's name or his, and can one of them take a write off for taxes and interest at the end of each year? On a small salary this may mean he has no tax liability for the four years, and can possibly make up the extra buying costs.... also, look at the comps in the area for the past five years and see if home values have increased and turnover rate for the area will tell you if people are buying in that area...",
"title": ""
},
{
"docid": "05b5668a792f490a1eda8dc402f8125e",
"text": "\"DirectGov has a good overview here: http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnPropertyAndRentalIncome/DG_4017814 and answers to your specific questions here: http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnPropertyAndRentalIncome/DG_10013435 In short, you do need to declare the rental income on your tax return and will need to pay tax on it (and note that only the mortgage interest (not the full repayment) is deductible as an \"\"allowable expense\"\", see the full list of what is deductible here: http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnPropertyAndRentalIncome/DG_10014027 ).\"",
"title": ""
},
{
"docid": "9a730624c13434ec84e3a67975f3dd2a",
"text": "First, the basis is what was paid for the house along with any documented upgrades, any improvements not consider maintenance. Any gain from that point is taxable. This is the issue with gifting a house before one passes. It's an awful mistake. The fact that there was a mortgage doesn't come into play here nor does the $15K given away. Your question is great, and the only missing piece is what the house cost. Keep in mind, depending on the state, you MIL may have gotten a step-up on the passing of her husband. On a very personal note - my grandparents bough a family house. 4 apartments. 1938 at a cost of $4000. My grandmother transferred 1/2 share to my father well before she died. And before my father's death it was put into my mother's name. Now that she's in her last years, I explained that since moved it to my sister's name already, there's no step up in basis. This share is now worth over $600,000, and after 4 deaths, no step up. When my sister sells, she will have a gain on nearly 100% of the sale price. In my opinion, there's a special place in hell for lawyers that quit claim property like this. For a bit of paperwork, the house could have been put into a trust to avoid probate, avoid being an asset for medicaid, and still get the step up. Even a $2000 cost for a good lawyer to set up a trust would yield a return of nearly $100,000 in taxes avoided. (And as my sister's keeper, I'd have paid the $2,000 myself, no issue that she gets the house. She needs it, I don't. And when the money's gone, I'm all she has anyway.)",
"title": ""
},
{
"docid": "9760eb01c9865d9e976ff2bb5d0ca757",
"text": "I'm not an attorney, nor am I a licensed tax adviser. I suggest you talk to these two types of professionals. From my limited knowledge, without proper documentation/organization, I can't see how the IRS/State will not consider this as a rent payment. The mortgage responsibility is of the person signing the mortgage contract, and you're under no obligation to pay that person anything. Had you not lived at the property, you might argue that it was a gift (although I'm not sure if it would stand), but since you do live in the property - it is quite obviously a rent payment. Putting your name on the deed may mitigate this slightly but I'm not sure how much - since you're still not obligated to pay the mortgage. However this is probably moot since it is unlikely for a bank to give a mortgage on a property to person A when it is also owned by a person B, without that person B being side to the mortgage contract.",
"title": ""
},
{
"docid": "538da02b9cbfb6a9472db2e0cb3bf217",
"text": "I think it's safe to say that removing the deduction will do a lot more than hurt the housing market. Consumer discretionary income will decrease and most likely hamper the growth in the economy we have seen since 2008. Seems like shitty policy to move when republicans are also trying to cut corporate taxes.",
"title": ""
},
{
"docid": "a16cdeba56a7edbdb8277e7c90b16dce",
"text": "\"You can exclude up to $250000 ($500000 for married filing jointly) of capital gains on property which was your primary residence for at least 2 years within the 5 years preceding the sale. This is called \"\"Section 121 exclusion\"\". See the IRS publication 523 for more details. Gains is the difference between your cost basis (money you paid for the property) and the proceeds (money you got when you sold it). Note that the amounts you deducted for depreciation (or were allowed to deduct during the period the condo was a rental, even if you chose not to) will be taxed at a special rate of 25% - this is called \"\"depreciation recapture\"\", and is discussed in the IRS publication 544.\"",
"title": ""
},
{
"docid": "266260faec9cc263180d42275dbabe8c",
"text": "Those choices aren't mutually exclusive. Yes, most discussion of the mortgage interest deduction ignores the fact that for a standard itemizer, much, if not all of this deduction can be lost. For 2011, the std deduction for a single is $5,800. It's not just mortgage interest that's deductible, state income tax, realestate tax, and charitable contributions are among the other deductions. If this house is worth $350K, the property tax is about $5K, and since it's not optional, I'd be inclined to assume that it's the deduction that offsets the std deduction. Most states have an income tax, which tops off the rest. You are welcome to toss this aside as sophistry, but I view it as these other deductions as 'lost' first. I'm married, and our property tax is more than our standard deduction, so when doing the math, the mortgage is fully deductible, as are our contributions. In your case, the numbers may play out differently. No state tax? Great, so it's the property tax and deductions you'd add up first and decide on the value the mortgage deduction brings. Last, I don't have my mortgage for the deduction, I just believe that long term my other investments will exceed, after tax, the cost of that mortgage.",
"title": ""
},
{
"docid": "4e9aa8fec1c4ee7274257bfb57bcf9d3",
"text": "\"The mortgage tax deduction can at most apply to two mortgages. IRS Publication 936 lays this out pretty clearly. There might be other deductions available if you are using the houses as a commercial entity, but that's more \"\"corporate taxes\"\" than \"\"personal taxes\"\". I know there are tax laws for dealing with interest, depreciation, capital expenses that businesses use.\"",
"title": ""
},
{
"docid": "f5d03797d7499736c830449098a393c1",
"text": "\"Is all interest on a first time home deductible on taxes? What does that even mean? If I pay $14,000 in taxes will My taxes be $14,000 less. Will my taxable income by that much less? If you use the standard deduction in the US (assuming United States), you will have 0 benefit from a mortgage. If you itemize deductions, then your interest paid (not principal) and your property tax paid is deductible and reduces your income for tax purposes. If your marginal tax rate is 25% and you pay $10000 in interest and property tax, then when you file your taxes, you'll owe (or get a refund) of $2500 (marginal tax rate * (amount of interest + property tax)). I have heard the term \"\"The equity on your home is like a bank\"\". What does that mean? I suppose I could borrow using the equity in my home as collateral? If you pay an extra $500 to your mortgage, then your equity in your house goes up by $500 as well. When you pay down the principal by $500 on a car loan (depreciating asset) you end up with less than $500 in value in the car because the car's value is going down. When you do the same in an appreciating asset, you still have that money available to you though you either need to sell or get a loan to use that money. Are there any other general benefits that would drive me from paying $800 in rent, to owning a house? There are several other benefits. These are a few of the positives, but know that there are many negatives to home ownership and the cost of real estate transactions usually dictate that buying doesn't make sense until you want to stay put for 5-7 years. A shorter duration than that usually are better served by renting. The amount of maintenance on a house you own is almost always under estimated by new home owners.\"",
"title": ""
},
{
"docid": "64d3ed9bdd8bc785d306c43ab39bcb18",
"text": "\"No one has addressed the fact that your loan interest and property taxes are \"\"deductible\"\" on your taxes? So, for the first 2/3 years of your loan, you will should be able to deduct each year's mortgage payment off your gross income. This in turn reduces the income bracket for your tax calculation.... I have saved 1000's a year this way, while seeing my home value climb, and have never lost a down payment. I would consider trying to use 1/2 your savings to buy a property that is desirable to live in and being able to take the yearly deduction off your taxes. As far as home insurance, most people I know have renter's insurance, and homeowner's insurance is not that steep. Chances are a year from now if you change your mind and wish to sell, unless you're in a severely deflated area, you will reclaim at minimum your down payment.\"",
"title": ""
},
{
"docid": "c10ace4aedb72bf50cc35dc0869e866d",
"text": "\"I'm not an attorney or a tax advisor. The following is NOT to be considered advice, just general information. In the US, \"\"putting your name on the deed\"\" would mean making you a co-owner. Absent any other legal agreement between you (e.g. a contract stating each of you owns 50% of the house), both of you would then be considered to own 100% of the house, jointly and severally: In addition, the IRS would almost certainly interpret the creation of your ownership interest as a gift from your partner to you, making them liable for gift tax. The gift tax could be postponed by filing a gift tax return, which would reduce partner's lifetime combined gift/estate tax exemption. And if you sought to get rid of your ownership interest by giving it to your partner, it would again be a taxable gift, with the tax (or loss of estate tax exemption) accruing to you. However, it is likely that this is all moot because of the mortgage on the house. Any change to the deed would have to be approved by the mortgage holder and (if so approved) executed by a title company/registered closing agent or similar (depending on the laws of your state). In my similar case, the mortgage holder refused to add or remove any names from the deed unless I refinanced (at a higher rate, naturally) making the new partners jointly liable for the mortgage. We also had to pay an additional title fee to change the deed.\"",
"title": ""
},
{
"docid": "8269934f559d54722a958a104b6e191d",
"text": "The interest rate will probably be better for your primary residency, however the risk is higher too. In the event you can't pay it off - you probably would rather lose the second home and not the primary home. Re the tax benefit - it will be attached to the rental you're buying, since that's what the loan is for. However, if you have a HELOC on your primary residency, you can deduct interest on up to $100K on your Schedule A regardless of what you're doing with the money. This can be useful if the rental is losing money and you don't want to accumulate the interest deduction as passive loss.",
"title": ""
},
{
"docid": "2860f12c36966891eb816cce27702fcc",
"text": "You need to report the interest expense, assuming the loans were for your business: You need to report interest expense (only interest, principle is not an expense just as the loan proceeds are not income). The interest expense goes to the appropriate line on your Schedule C or E (depending on whether you used the loan for the online business or the rental). People whom you borrowed from must also report the interest as income to them on their Schedule B. You cannot deduct the interest expense if they don't report it as interest income. If you didn't take the loans for your business then the interest is not deductible. You don't need to report anything. People who lent you money still have to report the interest you paid to them as income on Schedule B. If you paid no interest (free loan) or below/above market interest to a related party (family member), then the imputed interest is considered income to them and gift to you. They need to report it on their Schedule B, and depending on amounts - on a gift tax return. For $1K to $10K loans there probably will be no need in gift tax returns, the exemption is for $14K per year per person. If the imputed interest rules may apply to you, better talk to a licensed tax adviser on how to proceed.",
"title": ""
}
] |
fiqa
|
3334f63cf7eedb07322b75e339066fed
|
If a company's assets are worth more than its market cap, can one say the shares must be undervalued?
|
[
{
"docid": "5d59f698a6eea79873456b6214ffaca0",
"text": "You haven't mentioned how much debt your example company has. Rarely does a company not carry any kind of debt (credit facilities, outstanding bonds or debentures, accounts payable, etc.) Might it owe, for instance, $1B in outstanding loans or bonds? Looking at debt too is critically important if you want to conduct the kind of analysis you're talking about. Consider that the fundamental accounting equation says: or, But in your example you're assuming the assets and equity ought to be equal, discounting the possibility of debt. Debt changes everything. You need to look at the value of the net assets of the company (i.e. subtracting the debt), not just the value of its assets alone. Shareholders are residual claimants on the assets of the company, i.e. after all debt claims have been satisfied. This means the government (taxes owed), the bank (loans to repay), and bondholders are due their payback before determining what is leftover for the shareholders.",
"title": ""
},
{
"docid": "276a698e578e85d0ec7b4898cd575268",
"text": "Look at Price/book value and there are more than a few stocks that may have a P/B under 1 so this does happen. There are at least a couple of other factors you aren't considering here: Current liabilities - How much money is the company losing each quarter that may cause it to sell repeatedly. If the company is burning through $100 million/quarter that asset is only going to keep the lights on for another 2.5 years so consider what assumptions you make about the company's cash flow here. The asset itself - Is the price really fixed or could it be flexible? Could the asset seen as being worth $1 billion today be worth much less in another year or two? As an example, suppose the asset was a building and then real estate values drop by 40% in that area. Now, what was worth $1 billion may now be worth only $600 million. As something of a final note, you don't state where the $100 million went that the company received as if that was burned for operations, now the company's position on the asset is $900 million as it only holds a 90% stake though I'd argue my 2 previous points are really worth noting. The Following 6 Stocks Are Trading At or Below 0.5 x Book Value–Sep 2013 has a half dozen examples of how this is possible. If the $100 million was used to pay off debt, then the company doesn't have that cash and thus its assets are reduced by the cash that is gone. Depending on what the plant is producing the value may or may not stay where it is. If you want an example to consider, how would you price automobile plants these days? If the company experiences a reduction in demand, the plant may have to be sold off at a reduced price for a cynic's view here.",
"title": ""
},
{
"docid": "980e48c749e05c0432b46adffc11cd8a",
"text": "Imagine a poorly run store in the middle of downtown Manhattan. It has been in the family for a 100 years but the current generation is incompetent regarding running a business. The store is worthless because it is losing money, but the land it is sitting on is worth millions. So yes an asset of the company can be worth more than the entire company. What one would pay for the rights to the land, vs the entire company are not equal.",
"title": ""
}
] |
[
{
"docid": "cfd44d1b8f2c9b7a99bb5efdee49d5a1",
"text": "The definition of market cap is exactly shares oustanding * share price, so something is wrong here. It seems that the share price is expressed in pence rather pounds. There's a note at the bottom: Currency in GBp. Note the 'p' rather than 'P'. So the share price of '544' is actually 544p, i.e. £5.44. However it's not really clear just from the annotations which figures are in pence and which are actually in pounds. It seems that the market cap is in pounds but the enterprise value is in pence, given that 4.37 billion is about the right value in pounds whereas 441 billion only really makes sense if expressed in pence. It looks like they actually got the enterprise value wrong by a factor of 100. Perhaps their calculation treated the share price as being denominated in pounds rather than pence.",
"title": ""
},
{
"docid": "b1672008e1acaa64033b69362c83ac6c",
"text": "P/E = price per earnings. low P/E (P/E < 4) means stock is undervalued.",
"title": ""
},
{
"docid": "22f70c08e60d9f5b1375bca604d8599f",
"text": "It is ALWAYS possible for a company's valuation in the market to be larger than the market it serves, and in fact it is not uncommon. There's valid argument that Uber would be a good example of this, with a market cap of more than $60 billion. Market cap is the total value of all shares outstanding. Keep in mind that what a company's shares trade for is less a reflection of its past (or, to some degree, even present) revenue activity and more of a speculative bet on what the company will do in the future.",
"title": ""
},
{
"docid": "b7deba6712b7fb28aabe4197b393aa59",
"text": "Assuming you are saying that the company issues 20,000 additional shares of its own stock and sells them for $8 each: The money from the sale is not income and not part of earnings. It is capital and appears on the balance sheet as part of shareholder's equity. With no other transactions, yes, the total of shares outstanding is increased by 20,000 to 100,000.",
"title": ""
},
{
"docid": "6db8ff167a2027d4fa6c4eb9c132fc41",
"text": "\"I think the key concept here is future value. The NAV is essentially a book-keeping exercise- you add up all the assets and remove all the liabilities. For a public company this is spelled out in the balance sheet, and is generally listed at the bottom. I pulled a recent one from Cisco Systems (because I used to work there and know the numbers ;-) and you can see it here: roughly $56 billion... https://finance.yahoo.com/q/bs?s=CSCO+Balance+Sheet&annual Another way to think about it: In theory (and we know about this, right?) the NAV is what you would get if you liquidated the company instantaneously. A definition I like to use for market cap is \"\"the current assets, plus the perceived present value of all future earnings for the company\"\"... so let's dissect that a little. The term \"\"present value\"\" is really important, because a million dollars today is worth more than a million dollars next year. A company expected to make a lot of money soon will be worth more (i.e. a higher market cap) than a company expected to make the same amount of money, but later. The \"\"all future earnings\"\" part is exactly what it sounds like. So again, following our cisco example, the current market cap is ~142 billion, which means that \"\"the market\"\" thinks they will earn about $85 billion over the life of the company (in present day dollars).\"",
"title": ""
},
{
"docid": "c13c73a337f0b416dd0e626ae4d9b7cf",
"text": "To be fair, the analyst is talking about the book value of the firm. Basically, the value of all the stuff it owns now. There are plenty of companies with negative book value that can justify a positive share price. Ford, for instance, had negative book value but positive future earnings.",
"title": ""
},
{
"docid": "c947ee0c62bb10677e480cca9de92e11",
"text": "When a stock price rises, the company's assets are worth more. This doesn't mean it gets more cash directly, but it can liquidate (= sell) some of its stocks for a higher return than before.",
"title": ""
},
{
"docid": "053fc9bcde5b00d378e822f216f521bb",
"text": "Let's use an example: You buy 10 machines for 100k, and those machines produce products sold for a total of 10k/year in profit (ignoring labor/electricity/sales costs etc). If the typical investor requires a rate of return of 10% on this business, your company would be worth 100k. In investing terms, you would have a PE ratio of 10. The immediately-required return will be lower if substantially greater returns are expected in the future (expected growth), and the immediately required return will be higher if your business is expected to shrink. If at the end of the year you take your 10k and purchase another machine, your valuation will rise to 110k, because you can now produce 11k in earnings per year. If your business has issued 10,000 shares, your share price will rise from $10 to $11. Note that you did not just put cash in the bank, and that you now have a higher share price. At the end of year 2, with 11 machines, lets imagine that customer demand has fallen and you are forced to cut prices. You somehow produce only 10k in profit, instead of the anticipated 11k. Investors believe this 10k in annual profit will continue into the forseable future. The investor who requires 10% return would then only value your company at 100k, and your share price would fall back from $11 to $10. If your earnings had fallen even further to 9k, they might value you at 90k (9k/0.1=$90k). You still have the same machines, but the market has changed in a way that make those machines less valuable. If you've gone from earning 10k in year one with 10 machines to 9k in year two with 11 machines, an investor might assume you'll make even less in year three, potentially only 8k, so the value of your company might even fall to 80k or lower. Once it is assumed that your earnings will continue to shrink, an investor might value your business based on a higher required rate of return (e.g. maybe 20% instead of 10%), which would cause your share price to fall even further.",
"title": ""
},
{
"docid": "4281c150f771e7826991543427f819bb",
"text": "No. The market cap has no relation to actual money that flowed anywhere, it is simple the number of shares multiplied by the current price, and the current price is what potential buyers are (were) willing to pay for the share. So any news that increases or decreases interest in shares changes potentially the share price, and with that the market cap. No money needs to flow.",
"title": ""
},
{
"docid": "cb8c0f954bb7a2e6924705100868bec4",
"text": "Let's say that you bought a share of Apple for $10. When (if ever) their stock sold for $10, it was a very small company with a very small net worth; that is, the excess of assets over liabilities. Your $10 share was perhaps a 1/10,000,000th share of a tiny company. Over the years, Apple has developed both software and hardware that have real value to the world. No-one knew they needed a smartphone and, particularly, an iPhone, until Apple showed it to us. The same is true of iPads, iPods, Apple watches, etc. Because of the sales of products and services, Apple is now a huge company with a huge net worth. Obviously, your 1/10,000,000th share of the company is now worth a lot more. Perhaps it is worth $399. Maybe you think Apples good days are behind it. After all, it is harder to grow a huge company 15% a year than it is a small company. So maybe you will go into the marketplace and offer to sell your 1/10,000,000th share of Apple. If someone offers you $399, would you take it? The value of stocks in the market is not a Ponzi scheme, although it is a bit speculative. You might have a different conclusion and different research about the future value of Apple than I do. Your research might lead you to believe the stock is worth $399. Mine might suggest it's worth $375. Then I wouldn't buy. The value of stocks in the market is based on the present and estimated future value of living, breathing companies that are growing, shrinking and steady. The value of each company changes all the time. So, then, does the price of the stock. Real value is created in the stock market when real value is created in the underlying company.",
"title": ""
},
{
"docid": "a1f8e1e935ad365e016e2e6468cf4797",
"text": "Adding assets (equity) and liabilities (debt) never gives you anything useful. The value of a company is its assets (including equity) minus its liabilities (including debt). However this is a purely theoretical calculation. In the real world things are much more complicated, and this isn't going to give you a good idea of much a company's shares are worth in the real world",
"title": ""
},
{
"docid": "6ff491bfc4b2f438ed6236f9c30b6548",
"text": "\"I've alway thought that it was strange, but the \"\"price\"\" that gets quoted on a stock exchange is just the price of the last transaction. The irony of this definition of price is that there may not actually be any more shares available on the market at that price. It's also strange to me that the price isn't adjusted at all for the size of the transaction. A transaction of just 1 share will post a new price even if just seconds earlier 100,000 shares traded for a different price. (Ok, unrealistic example, but you get my point.) I've always believed this is an odd way to describe the price. Anyway, my diatribe here is supposed to illustrate the point that the fluctuations you see in price don't really reflect changing valuations by the stock-owning public. Each post in the exchange maintains a book of orders, with unmatched buy orders on one side and unmatched sell orders on the other side. If you go to your broker and tell him, \"\"fill my order for 50,000 shares at market price\"\", then the broker won't fill you 50,000 shares at .20. Instead, he'll buy the 50 @ .22, then 80 @ .23, then 100 @ .30, etc. Because your order is so large compared to the unmatched orders, your market order will get matched a bunch of the unmatched orders on the sell side, and each match will notch the posted price up a bit. If instead you asked the broker, \"\"open a limit order to buy 50000 shares at .20\"\", then the exchange will add your order to the book: In this case, your order likely won't get filled at all, since nobody at the moment wants to sell at .20 and historically speaking it's unlikely that such a seller will suddenly appear. Filling large orders is actually a common problem for institutional investors: http://www.businessweek.com/magazine/content/05_16/b3929113_mz020.htm http://www.cis.upenn.edu/~mkearns/papers/vwap.pdf (Written by a professor I had in school!)\"",
"title": ""
},
{
"docid": "bf00b9c64d4aabe8b6bd0614ef9c82ef",
"text": "Are you really talking about share price, or share value? Because what about stock splits? Market Cap stays the same, but the price per share is lowered. This is so that the stock is more liquid and accessible to a greater number of investors. This encourages people to invest in the stock though. I can't really think of any reasons why a company would want to lower their share value or discourage people from investing unless they are trying to reacquire shares. Returning value to the shareholders is the #1 priority of any publicly traded company.",
"title": ""
},
{
"docid": "0c9e754e3769d7ad1a16dbc3e6c90ba5",
"text": "It seems like you want to compare the company's values not necessarily the stock price. Why not get the total outstanding shares and the stock price, generate the market cap. Then you could compare changes to market cap rather than just share price.",
"title": ""
},
{
"docid": "73c009c7bf9683f89cbf299e3b45b5ee",
"text": "I'm also self employed. Your circumstances may be different, but my accountant told me there was no reason to pay more than 100% of last years' taxes. (Even if this years' earnings are higher.) So I divide last year by 4 and make the quarterlies. As an aside, I accidentally underpaid last year (mis-estimated), and the penalty was much smaller than I expected.",
"title": ""
}
] |
fiqa
|
832c585d8d833b081b6e94355b4199f5
|
For Federal Crimes, where does the money collected from penalties go?
|
[
{
"docid": "ad73bd8539ac724a2790c7febeabc767",
"text": "\"The SFGate had an article on this a few years ago: http://www.sfgate.com/business/networth/article/When-government-fines-companies-who-gets-cash-3189724.php \"\"Civil penalties, often referred to as fines, usually go to the U.S. Treasury or victims.\"\" Short answer in the case you references it would be the US Treasury. In cases where there is a harmed party then they would get something to account for their loss. But it can get complicated depending on the crime.\"",
"title": ""
}
] |
[
{
"docid": "7b76aa107e70706d9be9297b0b969288",
"text": "Your friend would have only been liable for a tax penalty if he withdrew more 529 money than he reported for qualified expenses. That said, if he took the distribution in his name, it triggers a 1099-Q report to the IRS in his name rather than his beneficiaries. This will likely be flagged by the IRS, since it looks like he withdrew the money, but didn't pay taxes and penalties on it, not the beneficiary. In other words, qualified education expenses only apply to the beneficiary, not the plan owner/contributor. In this case, the IRS would request additional documentation to show that the expenses were indeed qualified. To avoid this hassle, it's easiest to make sure the distribution is payed directly to the beneficiary rather than yourself. Once he or she has the check, then have them sign the check over to you or transfer it into your account. Otherwise you trigger an IRS 1099-Q in your name rather than your beneficiary.",
"title": ""
},
{
"docid": "65bc5338bad575f4bc0169ee47ffdffd",
"text": "The IRS demands and expects to be paid tax on all taxable activity, including illegal activity. If they expect drug dealers, hit men, and smugglers to pay tax, they expect you to pay tax on your basement apartment. The flip side of this is that the IRS keeps reported tax activities confidential. They only share what is required (for example, your taxable income with your state). You can read the details in their disclosure laws. Deductions will work just as they would if your apartment was perfectly legal. In the eyes of the IRS, whether your income is legal or not is none of their business. They care only about whether it is being taxed appropriately. They will not share any information with your zoning authority without a court order.",
"title": ""
},
{
"docid": "6bfda63d25677223db5af3074fcd810d",
"text": "In practice the IRS seems to apply the late payment penalty when they issue a written paper notice. Those notices typically have a pay-by date where no additional penalty applies. The IRS will often waive penalties, but not interest or tax due, if the taxpayer presses the issue.",
"title": ""
},
{
"docid": "d81ccba684d73402c54dbdbd18286fb3",
"text": "Once you declare the amount, the CBP officials will ask you the source and purpose of funds. You must be able to demonstrate that the source of funds is legitimate and not the proceeds of crime and it is not for the purposes of financing terrorism. Once they have determined that the source and purpose is legitimate, they will take you to a private room where two officers will count and validate the amount (as it is a large amount); and then return the currency to you. For nominal amounts they count it at the CBP officer's inspection desk. Once they have done that, you are free to go on your way. The rule (for the US) is any currency or monetary instrument that is above the equivalent of 10,000 USD. So this will also apply if you are carrying a combination of GBP, EUR and USD that totals to more than $10,000.",
"title": ""
},
{
"docid": "4264ba71d1fe0abe46fc0bf6b997c97d",
"text": "But it's not tax evasion. They are trying to avoid the US's double dipping on foreign income -- an unjust tax if there ever was one. If the money is made overseas then the US government shouldn't have any right to it. I mean, they didn't build any of that infrastructure. That's the way it works in most countries. Their fair share is 0.",
"title": ""
},
{
"docid": "fc7b333b1d11ea994accd1f8b78a8fdf",
"text": "\"Yes, the penalty is the tax you pay on it again when you withdraw the money. The withdrawal of the excess contribution is taxed as your wages (but no penalty). Excess contribution cannot be added to the basis or considered \"\"after-tax\"\" (hence the double taxation). Note that allowing you to keep the excess contribution in the plan may lead to disqualifying the plan, so it is likely that the plan administrator will force you to remove the excess contribution if they become aware of it. Otherwise you may end up forcing early 401(k) withdrawal on all of your co-workers. More on this IRS web page. And this one.\"",
"title": ""
},
{
"docid": "b06c4c5629a4c4f0af1e5c054ff97484",
"text": "Actually banks aren't required to (and don't) report on 8300 because they already report $10k+ cash transactions to FinCEN as a Currency Transaction Report (CTR), which is substantively similar; see the first item under Exceptions in the second column of page 3 of the actual form. Yes, 8300 is for businesses, that's why the form title is '... Received In A Trade Or Business'. You did not receive the money as part of a trade or business, and it's not taxable income to you, so you aren't required to report receiving it. Your tenses are unclear, but assuming you haven't deposited yet, when you do the bank will confirm your identity and file their CTR. It is extremely unlikely the government will investigate you for a single transaction close to $10k -- they're after whales and killer sharks, not minnows (metaphorically) -- but if they do, when they do, you simply explain where the money came from. The IRS abuses were with respect to people (mostly small businesses) that made numerous cash deposits slightly under $10k, which can be (but in the abuse cases actually was not) an attempt to avoid reporting, which is called 'structuring'. As long as you cooperate with the bank's required reporting and don't avoid it, you are fine.",
"title": ""
},
{
"docid": "1905f1a693b1c56269cc40d19a4bc954",
"text": "Well, that's probably not even all of it. If that stranger did his taxes properly, then he already paid about a third of it to the government because wherever he got it from it was income for him and thus it must have been taxed. Now, the remainder is in your hands and yes, according to US law it is now your income and so now you too, must pay about a third of it to the government, and yes you are supposed to explain where it came from. Be careful giving it to somebody else or it'll be taxed yet again. disclaimer: I am not a US citizen",
"title": ""
},
{
"docid": "e20a9c8c36738492aa0363c1113b6ca9",
"text": "\"I'm working on similar problem space. There seems to be some working ambiguity in this space - most focus seems to be on more complex cases of income like Dividends and Capital Gains. The US seems to take a position of \"\"where the work was performed\"\" not \"\"where the work was paid\"\" for purposes of the FEIE. See this link. The Foreign Tax Credit(FTC) is applied (regardless of FEIE) based on taxes paid in the other Country. In the event you take the FEIE, you need to exclude that from the income possible to claim on the FTC. i.e. (TOTAL WAGES(X) - Excluded Income) There is a weird caveat on TOTAL WAGES(X) that says you can only apply the FTC to foreign-sourced income which means that potentially we are liable for the on-US-soil income at crazy rates. See this link.. Upon which... there is probably not a good answer short of writing your congressperson.\"",
"title": ""
},
{
"docid": "cc11d10474dec5ddb0e6daa8fd0113b0",
"text": "I called the IRS and they stated it may take up to 45 days to withdraw the cash, but the proceeds would be applied on the date of the filing (Or when the amount was stated to be debited). Federal and State taxes differ in timelines but as long as deadlines are met and proof exists IRS does not penalize.",
"title": ""
},
{
"docid": "330f9edf099ec061c9a1393429cb66ae",
"text": ">Im suggesting if they break the law they go to jail, just like every one else Actually above you were complaining about the monetary penalties, and said nothing about criminal penalties. Which is it? Hundreds of millions of dollars is hardly light fines. As to going to jail, it depends on the law. Speeding breaks the law, yet it is not often a jailable offense. If *individuals* broke laws that result in jail time, they will likely be prosecuted and sent to jail. [The Justice Department and New York County Attorney General’s Office, which together have handled the high-profile cases that Mazur criticized, said they will always bring criminal charges where evidence permits.](http://blogs.reuters.com/financial-regulatory-forum/2012/06/20/record-setting-bank-forfeiture-at-ing-ignites-debate-over-lack-of-banker-prosecutions/)",
"title": ""
},
{
"docid": "663ba1756a44899bc31a07863c393105",
"text": "Had a professor in college for one the business classes. He would teach inmates finance. One class he had a student that was in for some sort of fraud/money laundering. The professor was not sure how much the student had taken but he did ask if it was wroth it. The inmate said yes, explained how long his sentence is/was (it was less then 10 years) and that they only found part of the money.",
"title": ""
},
{
"docid": "b4b404f2995ec98b70c55d6ce4413dc9",
"text": "The difference is whether or not you have a contract that stipulates the payment plan, interest, and late payment penalties. If you have one then the IRS treats the transaction as a load/loan servicing. If not the IRS sees the money transfer as a gift.",
"title": ""
},
{
"docid": "f6799590bcc94cf5dfaf7a974d0ed5d4",
"text": "Are you suggesting when they break a law involving a small portion of their total business they pay fines involving all portions of their business? I'm suggesting when they break a law, they pay fines related to the crime comitted. So relating how much their fine was on a tiny portion of their business should not be compared to total quarterly profits, unless those profits were related to the crime. Similar punishment methods to most crimes individuals commit.",
"title": ""
},
{
"docid": "2ef24b9344ccc852089a07c402321f17",
"text": "Just so you know, the SEC doesn't have criminal authority, they do civil fines. It's the Department of Justice that sends white collar criminals to jail. If you'd like to see what they've been up to, [here's a little info from the FBI](http://www.fbi.gov/stats-services/publications/financial-crimes-report-2010-2011) Also, I could be wrong but I think the government mass settled the claims coming from the financial collapse. *edit: you don't get to keep the money you made from your illegal activity. That would just be stupid. The fines are on top of giving the money back* *edit 2: remember [these girls?](http://www.youtube.com/watch?v=ihLBCbNIDbI&feature=share). They didn't get to keep the money they stole. It's no different in white collar crime.*",
"title": ""
}
] |
fiqa
|
eb558b0500533cb87cfb59b451cd363f
|
Do I have to pay the internet installation charges for my home's company internet?
|
[
{
"docid": "e51c7075281d97613dd05a4cefe5d8b7",
"text": "\"Of course you don't have to pay them - you just might not like the result. As a matter of law - given that I am not a lawyer - I am not aware of any requirement for a company to pay employees business-related expenses. An example might be having a cell phone, and according to this article companies aren't required to pay for you to have a cell phone even if they require you have one and use it as part of your employment. The primary areas where law does exist relates to company uniforms with a logo (in a very limited number of US states) and necessary personal safety equipment (in California and maybe only few other states). All other tool requirements for a job are not prohibited by law, so long as they are not illegally discriminatory (such as requiring people of a certain race or sex to buy something but no one else, etc). So a company can require all sorts of things, from having an internet connection to cell phone to laptop to specialty tools and equipment of all sorts, and they are even allowed to deduct the cost of some things from your pay - just so long as you still get paid minimum wage after the deductions. With all that said, the company's previous payments of fees and willingness to pay a monthly internet fee does not obligate them to pay other fees too, such as moving/installation/etc. They may even decide to no longer provide internet service at their expense and just require you to provide it as a condition of employment. You can insist on it with your employer, and if you don't have an employment contract that forbids it they can fire you or possibly even deduct it from your pay anyway (and this reason might not be one that allows you to collect unemployment insurance benefits - but you'd need to check with an expert on that). You can refuse to pay AT&T directly, and they can cancel the internet service - and your employer can then do the same as in the previous condition. Or you can choose to pay it - or ask your employer to split the cost over a few checks if it is rather high - and that's about it. Like the cost of anything else you have to pay - from your own food to your computer, clothes, etc - it's best to just consider it your own \"\"cost of doing business\"\" and decide if it's still in your interest to keep working there, and for something to consider in future pay negotiations! You may also qualify for an itemized Employee Business Expense deduction from the IRS, but you'll need to read the requirements carefully and get/keep a receipt for such expenses.\"",
"title": ""
},
{
"docid": "e8876857f765661ff578bb952f782c25",
"text": "It appears so. I suppose you could try saying that you don't want to pay for it and won't have Internet installed, but that could be detrimental to your career. There is no law that says your company has to pay for your Internet unless you have some kind of contract with them that says you will. If anything, your best option might be to try to claim it is a business expense and deduct it on your taxes.",
"title": ""
}
] |
[
{
"docid": "7c241fdb3bc5e8777d3ee9b54bda5c54",
"text": "I have comcast and hate their guts. From the time they bought the local cable system a couple of years ago they have raised prices at least 10% a year and at the same time cut 2-4 channels every year. Now they want customers to get a bunch of new equipment, which they claim is free, like the cable modem was free until one month they started charging extra for it every month. I'm not paying any more for their crap. I've let go of everything but the local channels and tomorrow or the next day it will take MORE equipment to even get those. But I've ordered the equipment necessary to get channels off the air. Then once they start messing with my internet I'll try AT&T and satellite internet or even go back to dialup. Cause I'm not paying MORE for less, not paying MORE for crap. Hell, half of what you pay is for sports and I never watch sports. I felt sorry when so many good newspapers started going under. But I feel no sympathy at all for comcast. They are like the Bank of America of cable TV. When they die people will cheer. TV is run by greedy people. I remember when cable started. There were no ads. They made their money from cable subscriptions. Then they decided they wanted MORE money than that and added ads. They can make plenty of money without ads. But there is no end to their greed. So screw them.",
"title": ""
},
{
"docid": "5a54f525500d0422a8f341de6bf756ac",
"text": "I feel like that any full answer has multiple facets: **Free for 7 years:** I'm currently in KC, and most of the people in my area are opting in for the free service. So if I were able to get fibre (my neighborhood didn't get enough votes), it would cut my $40/mo bill from Time Warner and my service would increase if anything. That's a huge cut, and it pays for itself ($300 set up fee) in the first year. Then over the next 7 years it saves me over $3000 in bills. For some company like Time Warner to offer this, they'd lose a large amount of service. Free mediocre internet is a huge threat to companies whose top sellers are expensive mediocre internet. **Lawsuits:** Like other people have stated, it's pretty impossible to become an actual competitor to these companies. The other ISPs (namely TWC and Comcast) fight anybody who pops up. There are minor providers in some of the outer suburbs, but they can't offer near the speed that a fibre solution provides. **City Approval:** Even Google ran into issues with this. Cities have to approve things like new fibre lines, and if they don't you're pretty much stuck. Overland Park, a wealthier suburb of Kansas City, were really dragging their feet on getting Google approved. Google just decided to take the deal off the table. Google is such a big name, however, that people in Overland Park freaked out at their city council and I don't know what they did, but Google has opened up signups for them now. If this was a no-name company, though, they would have been out of luck and just been barred from entry altogether. City council problems are actually pretty interesting. **Cost Effectiveness and Overhead:** Building a fibre network in KC is a pretty big cost. There are others around, but really only in the commercial areas. So whatever company wants to compete with Google has to go without making a profit for several, several years. In order to speed up that time (and save the company) they'd have to raise prices, and less people would be interested in their product. Google really pulled off something huge, here. I'm pretty excited for what their doing (even if my stupid neighbors didn't sign up and I don't get to reap the benefits). I'm interested to see what effects this has on a larger scale when they start moving to other cities.",
"title": ""
},
{
"docid": "9ec3ded21e1dba003dc8ae95bbe2ae51",
"text": "You are both right and wrong. A few key things - I'm not charging the government body I work for, it's a free implementation - I ensured I do all the work on my own time, not company time. I live somewhere where most government employees work multiple jobs, so this isn't uncommon. In fact, my government body actually does often hire contractors who are also employed. - I don't live in the US, things are somewhat less different where I am. - It is certainly not illegal, and I would even argue that it is even somewhat ethical. My work saved my employer (the tax payer) a significant amount of money, which is a net positive. The service is of high quality, and I did not break any employment agreements or laws in the process. - I hired a lawyer to double check everything.",
"title": ""
},
{
"docid": "d2a7f7f4ac863f78dd34555f6159ffbe",
"text": "There are a few standard ways: One thing to keep in mind is that you'll usually be charged a wire and/or service fee for the tranfer.",
"title": ""
},
{
"docid": "669ce01d1022e7a9971a9b4f9ce728be",
"text": "I kind of answered this as well, but I'll re-word it Too expensive. Fiber cables are expensive to place, takes a lot of time, and nobody is willing to pay it; or at least not the people that COULD front the bill. (Being Comcast or TWC) Cities aren't willing to help much unfortunately. A great story of what happens when a city does help with these installation fees is Oldes, Alberta in Canada. The city helped install all the wires and now has one of (of not the fastest) Internet connection in the country.",
"title": ""
},
{
"docid": "5a615eaaf29fdac7979f7a831c284c25",
"text": "\"If you are talking about a home office, you don't \"\"charge\"\" the business anything. If the area is used exclusively as an office you pro-rate by square footage just the actual expenses. TurboTax recent published an article \"\"Can I Take the Home Office Deduction?\"\" which is a must read if you don't understand the process. (Note: I authored said article.)\"",
"title": ""
},
{
"docid": "497157172ef7a5eb70a8c2b603b55f0a",
"text": "That's a good question. Are these internet companies actually natural monopolies ? I'm unsure about that, but if it is true they fall into the category of enterprises such as utilities that many have argued should be removed from private ownership and placed in some collective ownership. The record of privately owned utilities has been truly dismal from a public interest point of view.",
"title": ""
},
{
"docid": "f2d0936d8dbfc5701655de7500c02b98",
"text": "\"Your argument is everything like the faucet. [You wrote](https://www.reddit.com/r/business/comments/6msutw/tech_firms_unite_for_net_neutrality_protest/dk4q7vr/): *\"\"Which is, for example, why my current Comcast service is \"\"unlimited bandwidth\"\".\"\"* Your faucet entitles you to unlimited water. I say unlimited water because you cannot have \"\"unlimited bandwidth\"\"; bandwidth is actually fixed by the properties of physics. You meant to say unlimited flow through the bandwidth that's available. I addressed that directly. Yet you saw fit to make another douchey (**in bold, this time**) comment in response. Have a downvote.\"",
"title": ""
},
{
"docid": "bb3104c0506d1b602626ee7fdc41e6eb",
"text": "\"Do you know if you were approached by a carrier or a tower vendor? Edit/addendum: As someone in the telecommunications industry, I will say that you should NOT lease to a vendor who will sublease the space to the phone companies for a profit. Depending on the availability of space, the population of the area, and the value of the location, and the amount and size of hardware to be installed, the rental pricing can vary wildly. A cell site on a choice tall building in Chicago, NYC, Boston, LA, etc., can go for over $25000 per year (more in the case of rental of inside equipment room). On the other hand, renting space on a church steeple in the middle of a low population rural town, with the equipment installed in a gated paddock at ground level, may only net around $1500 per month. A \"\"small cell\"\" site, which is actually small enough to put on a lamp post or utility pole, can go for around $250-750 per month. A turf contractor/tower vendor actually leasing a chunk of land to build a structure whose space will be leased out to telecoms should be expected to pay between $2500 and 8000 per month depending on the value of your site. This value is determined by land form details like elevation, nearby tall forests (can the tower \"\"see\"\" over the tree line), terrain contours, and need (local population/tourist/traveler numbers). Carriers prefer to lease from vendors rather than building their own structures, but roof top sites are a different story. Carriers are generally more than happy to work with you to lease a portion of your tall building's roof. FYI... If they offer to compensate you for the electrical requirements if they cannot get their own meter in, don't worry. A cell site uses less than 1000 watts, which translates to about $.10-15 per hour in most locations.\"",
"title": ""
},
{
"docid": "0a0f16b824e6dab326bf5f18bbd456c0",
"text": "In general, you can only be charged for services if there is some kind of contract. The contract doesn't have to be written, but you have to have agreed to it somehow. However, it is possible that you entered into a contract due to some clause in the home purchase contract or the contract with the home owners' association. There are also sometimes services you are legally required to get, such as regular inspection of heating furnaces (though I don't think this translates to automatic contracts). But in any case you would not be liable for services rendered before you entered into the contract, which sounds like it's the case here.",
"title": ""
},
{
"docid": "109c4d456f41fd860526feb85481d9ae",
"text": "\"Can she claim deductions for her driving to and from work? Considering most people use their cars mostly to commute to/from work, there must be limits to what you can consider \"\"claimable\"\" and what you can't, otherwise everyone would claim back 80% of their mileage. No, she can't. But if she's driving from one work site to another, that's deductible whether or not either of the work sites is her home office. Can she claim deductions for her home office? There's a specific set of IRS tests you have to meet. If she meets them, she can. If you're self-employed, reasonably need an office, and have a place in your house dedicated to that purpose, you will likely meet all the tests. Can I claim deductions for my home office, even though I have an official work place that is not in my home? It's very hard to do so. The use of your home office has to benefit your employer, not just you. Can we claim deductions for our home internet service? If the business or home office uses them, they should be a deductible home office expense in some percentage. Usually for generic utilities that benefit the whole house, you deduct at the same percentage as the home office is of the entire house. But you can use other fractions if more appropriate. For example, if you have lots of computers in the home office, you can deduct more of the electricity if you can justify the ratio you use. Run through the rules at the IRS web page.\"",
"title": ""
},
{
"docid": "849172e9945523ff4458b9dca0190260",
"text": "* Building out infrastructure is time-consuming and labor-intensive. You also have no guarantee that because you put fiber to every house in a neighborhood, that every person will sign up for your service. * Building out infrastructure requires permits from the municipality and surveying (underground wiring? On new poles? On existing poles? etc). * It requires tying into existing networks (more infrastructure, permitting, and commercial contracts. * If you want to offer telephone services, that requires more network interfacing and, permitting, and has additional requirements, as phone service has legacy legal requirements. * If you want to offer TV services, you need more infrastructure, and commercial contracts with the TV channels. In many municipalities, existing providers (IE Comcast, TWC) have exclusive contracts with the city that say no one else can come in and build a network. **TLDR:** Legal contracts, commercial contracts, and the expense of building out the actual infrastructure make it pretty much impossible to create your own ISP, unless you have regular money bonfires (like Google does).",
"title": ""
},
{
"docid": "f1e3a3be118b48d06cf556ed92c5945f",
"text": "They are a business. You're not a corporation. They paid you more than $600 during the year, so they're supposed to send 1099 to you and the IRS about it. They need your taxpayer certification (W9) for that. They were supposed to ask for it before they paid you, but yes - they're supposed to ask for it.",
"title": ""
},
{
"docid": "14619bc463724498d6b497feefe972a7",
"text": "I'm really unsure what you are trying to tell me. I don't see how knowing CEOs would aid me in forming an opinion on this issue. Your second statement is simply foolish, shares of a company, represent ownership. Therefore shareholders are the owners. These shareholders elect a board, this board acts like a proxy between the managers (CEO's) and the owners (shareholders). This is how every public company operates. The problem that arises is that managers have an incentive to act in their own best interests, not in the interests of shareholders. So to solve this manager compensation is aligned with company performance so that if the shareholders are better off the managers are better off.",
"title": ""
},
{
"docid": "1324bd8646de93d4d7952a97747703de",
"text": "Of course nobody would have believed me, that was the height of the bubble. Everybody was leveraged to hell thinking that housing prices would continue to rise, especially the people who bought houses they couldn't afford. Then when the bubble popped, there is this massive credit crunch and all of a sudden spending and investment dry up. Now there is near 0 interest rates and that still isn't enough to stimulate the economy, so inflation is very low and people are sitting on liquid assets because there is no sense in investing.",
"title": ""
}
] |
fiqa
|
143f6819701ff93ebf055cfc50458825
|
What is the best way to determine if you should refinance a mortgage?
|
[
{
"docid": "23c55534fcc8c4781e846dbae9b3d03c",
"text": "See the Mortgage Professor's calculators (#3). Go to bankrate and look up rates so you know what to punch in to those calculators.",
"title": ""
},
{
"docid": "8dfd8f9551cb41ca84b421e899594d2c",
"text": "Our mortgage provider actually took the initiative to send us a refinance package with no closing costs to us and nothing added to the note; took us from a 30-year-fixed ~6.5% note to a 15-year-fixed ~5% note, and dropped the monthly payment in the process. You might talk to your existing lender to see if they would do something like that for you; it gives them a chance to keep your business, and it cuts your costs.",
"title": ""
},
{
"docid": "b049f456bab1131eff45745947809f96",
"text": "Yes, take the new rate, but instead of using the new 30 year term, calculate the payment as though the new mortgage were at the remaining term. 3 years into a 30? You calculate the payment as if the new mortgage were 27 years. This will tell you what you are really saving. Now, take that savings and divide into your closing costs if any. That will give you the break even. Will you be in the house that long? If you can find a no closing cost deal, it's worth it for even 1/8% savings.",
"title": ""
}
] |
[
{
"docid": "434ddac0691afed3d7251b9e052a3917",
"text": "There is one basic principle to apply here: to compare money paid at different times, all the amounts must be compounded or discounted to the same point in time. In this case, the moment of the initial $225,000 loan is convenient. At that moment, you get $225,000 You then make 30 payments on the 40% mortgage. The amount of these payments has to be calculated; they're paying off a $90,000 mortgage with 30 monthly payments at a monthly rate of 0.5% Finally, you make 30 payments of an amount X, starting one month after the 40% mortgage ends. So far we've just listed the amount and time of all the payments back and forth. A time-line type diagram is a huge help here. Finally, use compound interest and annuity formulas to bring all the payments to the starting point, using an interest rate of 1% a month! Equate money in with money out and solve for X",
"title": ""
},
{
"docid": "15b8790c8e70783945c7ac626dfa0e19",
"text": "You can choose to pay your mortgage instead of another bill, or vice versa. Your net will change from month to month while your gross is relatively static. I can make a bunch of promises to my load officer about my expenses, but it is very difficult to verify. Moreover, it is pretty hard to give your net income and plan for emergencies. So for the sake of reliability, verifiability, and general ease a lender will look at your gross. YOU should definitely look at your net when deciding if you can afford a loan.",
"title": ""
},
{
"docid": "e3cdef35aaac0973a4b5f0e3b3484258",
"text": "\"The usual rule of thumb is that you should start considering refinance when you can lower the effective interest rate by 1% or more. If you're now paying 4.7% this would mean you should be looking for loans at 3.7% or better to find something that's really worth considering. One exception is if the bank is willing to do an \"\"in-place refinance\"\", with no closing costs and no points. Sometimes banks will offer this as a way of retaining customers who would otherwise be tempted to refinance elsewhere. You should still shop around before accepting this kind of offer, to make sure it really is your best option. Most banks offer calculators on their websites that will let you compare your current mortgage to a hypothetical new one. Feed the numbers in, and it can tell you what the difference in payment size will be, how long you need to keep the house before the savings have paid for the closing costs, and what the actual savings will be if you sell the house in any given year (or total savings if you don't sell until after the mortgage is paid off). Remember that In addition to closing costs there are amortization effects. In the early stages of a standard mortgage your money is mostly paying interest; the amount paying down the principal increases over the life of the loan. That's another of the reasons you need to run the calculator; refinancing resets that clock.\"",
"title": ""
},
{
"docid": "409ac925651cc4ebb63b381c55fee2a8",
"text": "Sounds fishy - taking out more debt to pay the main mortgage down faster? There are a couple of issues I can see: I would think that a much more sensible strategy with a lot less risk is to save up extra cash and send your lender a check every quarter or six months.",
"title": ""
},
{
"docid": "8604c06699e97cc1cb620fd3f660efac",
"text": "I don't know any clever way to do what you're describing. And, in a sense, you can see why there might not be one. A mortgage isn't just a magical way to reduce your housing expenses; it's a tradeoff in which you agree to a long-term commitment in exchange for fixed costs (or at least costs with a prearranged structure) over that long term. If you're unwilling to accept the obligation of paying for and maintaining the property over a long period, you can't really expect to reap the benefits of lowered costs. Part of the reason people say buying is better is because people often do live in the same place for a long time, in which case, if they rent, they might miss out on savings they could have had if they bought instead. If you're not going to live in the same place for a long time, buying may not actually be better for you.",
"title": ""
},
{
"docid": "d6d520bc08473033ee1b797e3b83e260",
"text": "Start with the list of mortgage companies approved to work in your area. There are 80 within 10 miles of my house, and more than 100 in my county. Pick ones you know because they are established businesses in your area, region, or even nationally. A good place to start might be with your current lender. The risk you seem to be worried about is a scam or a trick. In the recent past the scams were ones where the home owner didn't understand teaser rates, and the risk of interest only and pick-your-payment loans. The simpler the bells and whistles, the less likely you are to be embarking on a risky transaction. It can't hurt to ask an organization like the BBB or neighbors, but realize that many people loved their exotic mortgage until the moment it blew up in their face. So for 5 years your neighbor would have raved about their new mortgage until they discovered how underwater they were. Regarding how smoothy the transaction is accomplished, is hard to predict. There is great variation in the quality of the loan officers, so a great company can have rookie employees. Unless you can get a recommendation for a specific employee it is hard know if your loan officer is going to give great service. When getting a mortgage for a purchase, the biggest risk is getting a mortgage that results in a payment you can't afford. This is less of a risk with a refinance because you already have a mortgage and monthly payment. But keep in mind some of the monthly savings is due to stretching out the payments for another 30 years. Know what you are trying to do with the refinance because the streamlined ones cant be used for cash out.",
"title": ""
},
{
"docid": "9360d30fe1116cbfbd238ffdb702853f",
"text": "\"When you refinance, there is cost (guess: around $2000-$3000) to cover lawyers, paperwork, surveys, deed insurance, etc. etc. etc. Someone has to pay that cost, and in the end it will be you. Even if you get a \"\"no points no cost\"\" loan, the cost is going to be hidden in the interest rate. That's the way transactions with knowledgeable companies works: they do business because they benefit (profit) from it. The expectation is that what they need is different from what you need, so that each of you benefits. But, when it's a primarily cash transaction, you can't both end up with more money. So, unless value will be created somewhere else from the process (and don't include the +cash, because that ends up tacked onto the principle), this seems like paying for financial entertainment, and there are better ways to do that.\"",
"title": ""
},
{
"docid": "54b70047a1441f552c304ac3674a6f53",
"text": "\"It can be a good thing for the bank to refinance your loan for you - since you will be keeping the loan at that particular institution. This gives them more time to enjoy the free money you pay them in interest for the remaining life of the loan. Banks that offer \"\"No closing costs\"\" are betting that mortgage payers will move their mortgage to get the lower interest rates - and whomever holds the loan, gets the interest payments.\"",
"title": ""
},
{
"docid": "c0042f9f7a2a4549157ed3849889c584",
"text": "You would have to do the specific math with your specific situation to be certain, but - generally speaking it would be smarter to use extra money to pay down the principle faster on the original loan. Your ability to refinance in the future at a more favorable rate is an unknowable uncertainty, subject to a number of conditions (only some of which you can control). But what is almost always a complete certainty is that paying off a debt is, on net, better than putting the same money into a low-yield savings account.",
"title": ""
},
{
"docid": "c3e502167f39903db739c29ad60d3782",
"text": "\"This is obviously a spam mail. Your mortgage is a public record, and mortgage brokers and insurance agents were, are and will be soliciting your business, as long as they feel they have a chance of getting it. Nothing that that particular company offers is unique to them, nothing they can offer you cannot be done by anyone else. It is my personal belief that we should not do business with spammers, and that is why I suggest you to remember the company name and never deal with them. However, it is up to you if you want to follow that advice or not. What they're offering is called refinance. Any bank, credit union or mortgage broker does that. The rates are more or less the same everywhere, but the closing fees and application fees is where the small brokers are making their money. Big banks get their money from also servicing the loans, so they're more flexible on fees. All of them can do \"\"streamline\"\" refinance if your mortgage is eligible. None if it isn't. Note that the ones who service your current mortgage might not be the ones who own it, thus \"\"renegotiating the rate\"\" is most likely not an option (FHA backed loans are sold to Fannie and Freddie, the original lenders continue servicing them - but don't own them). Refinancing - is a more likely option, and in this case the lender will not care about your rate on the old mortgage.\"",
"title": ""
},
{
"docid": "ee130539baebd437a80d1acf6b6fc3e5",
"text": "The reason for borrowing instead of paying cash for major renovations should be the same for the decision about whether to borrow or pay cash for the home itself. Over history, borrowing using low, tax-deductible interest while increasing your retirement contributions has always yielded higher returns than paying off mortgage principal over the long term. You should first determine how much you need to save for retirement, factor that into your budget, then borrow as much as needed (and can afford) to live at whatever level of home you decide is important to you. Using this same logic, if interest rates are low enough, it would behoove you to refinance with cash out leveraging the cash to use as additional retirement savings.",
"title": ""
},
{
"docid": "b0b510c62b5a3e4373f767e7fca65d71",
"text": "For what its worth, I recently closed on a 30 year refinance mortage with an agent I found through Zillow. The lender has a perfect 5/5 reputation score, whose office was located within 5 miles of my house, and as suggested by justkt on MrChrister's response, I checked out the business on the better business bureau and its online presence prior to going forward with the bank. The process was relatively painless, and the APR and closing costs were less than my previous loan with a federal credit union which I've used in the past. I can't say if the bank I'll be using going forward is as good as the one I've used in the past, but overall I'm quite happy with it. I never met the individual in person but this saved both of us a fair amount of time honestly.",
"title": ""
},
{
"docid": "22c5a8fca780f139551b854850dda1a5",
"text": "I see your remarks regarding Zillow, but would add a question. Why not look only for recent sales? If you find homes similar to yours with recent sales, that's similar to how the appraisers do it. I've refinanced many times and each time, I looked at sales within three miles of my house. I hit the appraised price very close in my estimate, high or low compared to Zillow, but used transaction data from there.just my thought. I chose a random neighborhood, and this was the first house I clicked. The main view shows last sale date, so I'd obviously suggest the OP look for more recent ones. If turnover is that low in his neighborhood, I understand, but the comment that transactions aren't listed is factually incorrect. I'd like my 2pts back. :)",
"title": ""
},
{
"docid": "6b9d0fb717d36893d489bb87c02c484c",
"text": "In the US, for most mortgages: The rules for how you compute LTV vary. Usually it's based with current value. With FHA loans, you cannot have the property re-assessed -- LTV is based on the original loan amortization. Note that in the wake of the housing crisis, assessors have suddenly become very conservative with valuations, so be prepared to fight over the valuation.",
"title": ""
},
{
"docid": "727f9d5e9d8d2eeb662eb94345ef72a2",
"text": "It would depend on the health insurance that was being offered, and if it covers your family or just you. We pay around $500-600 for individual health insurance for our employees (families cost north of 1500 a month). It's extremely expensive. Provide more details on the stock purchase plan as well (it sounds to me like in that case you'd only be getting for free what it would cost to purchase the stock... but that's only $10-15, so negligible in this case.)",
"title": ""
}
] |
fiqa
|
19cfe7f2e027412e932ad350e789edc7
|
Moving savings to Canada?
|
[
{
"docid": "916d8876cb4f852df639d4a317cef3d9",
"text": "\"The simplest, most convenient way I know of to \"\"move your savings to Canada\"\" is to purchase an exchange-traded fund like FXC, the CurrencyShares Canadian Dollar Trust, or a similar instrument. (I identify this fund because I know it exists, not because I particularly recommend it.) Your money will be in Canadian currency earning Canadian interest rates. You will pay a small portion of that interest in fees. Since US banks are already guaranteed by the FDIC up to $250,000 per account, I don't really think you avoid any risks associated with the failure of an individual bank, but you might fare better if the US currency is subject to inflation or unfavorable foreign-exchange movements - not that such a thing would be a direct risk of a bank failure, but it could happen as a result of actions taken by the Federal Reserve under the auspices of aiding the economy if the economy worsens in the wake of a financial crisis - or, for that matter, if it worsens as a result of something else, including legislative, regulatory, or executive policies. Read the prospectus to understand additional risks with this investment. One of them is foreign-exchange risk. If the US economy and currency strengthen relative to the Canadian economy and its currency, you may lose substantial amounts of purchasing power. Additionally, one of the possible results of a financial crisis is a \"\"flight to safety\"\"; the global financial markets still seem to think the US dollar is pretty safe, and they may bid it up as they have done in the past, resulting in losses to your position (at least in the short term). I do not personally recommend moving all your savings to Canada, especially if it deprives you of income from more profitable investments over the long term, but moving some of your savings to Canada at least isn't a stupid idea, and it may turn out to be somewhat profitable. Having some Canadian currency is also a good idea if you plan to spend the money that you are saving on Canadian goods in the intermediate future.\"",
"title": ""
},
{
"docid": "0bce2a4b42da3308b91bc62b75237674",
"text": "Yes, you can put assets in Canadian banks. Will it protect your wealth to a greater extent than the FDIC protection provided by the US Government? Probably not. If you do business or spend significant time in Canada, then having at least some money in Canada makes sense. Otherwise, you're trying to protect yourself against some outlying risk of a US banking collapse, while subjecting yourself to a very real currency exchange risk.",
"title": ""
},
{
"docid": "ce4f2edeea1c5ed88eb36d44644fc5c0",
"text": "It is absolutely feasible to move your savings into Canada. There are a few ways you can do it. However it is unlikely you will benefit or avoid risk by doing so. You could directly hold your savings in the CAD. Investing in Canadian bonds achieves a similar goal as holding your money in the CAD. By doing so you will be getting re-payed with CAD. Some Canadian companies also trade on US markets. In addition some brokerage firms allow you to trade on Canadian markets. The problem with any of the options is the assumption that Canadian banks will fare better then US banks. The entire globe is very dependent on each other, especially the more developed nations. If large US banks were to fail it would create a domino effect which would spiral into a global credit crunch. It wouldn't matter if your invested in Canadian companies or US companies they would all suffer as would the global economy. So it would probably be more valid to refer to your question - enter link description here If you are referring to weather the Canadian bonds would be a safer investment over US Treasuries it would all depend on the scenario at hand. Investors would probably flock to both treasuries.",
"title": ""
}
] |
[
{
"docid": "d92cf4a2c8499ba7bb4c375c7444f3dc",
"text": "India has Foreign Exchange Management Act. Under the liberalized scheme, there are limits for individuals to move funds out of India for specific purposes. Any such transfer require a CA certificate, so it would be advisable to talk to a CA to understand the specifics of your case.",
"title": ""
},
{
"docid": "c22ddc6666d604975f4b2b01bdbd3979",
"text": "Given that we live in a world rife with geopolitical risks such as Brexit and potential EU breakup, would you say it's advisable to keep some of cash savings in a foreign currency? Probably not. Primarily because you don't know what will happen in the fallout of these sorts of political shifts. You don't know what will happen to banking treaties between the various countries involved. If you can manage to place funds on deposit in a foreign bank/country in a currency other than your home currency and maintain the deposit insurance in that country and not spend too much exchanging your currency then there probably isn't a downside other than liquidity loss. If you're thinking I'll just wire some whatever currency to some bank in some foreign country in which you have no residency or citizenship consideration without considering deposit insurance just so you might protect some of your money from a possible future event I think you should stay away.",
"title": ""
},
{
"docid": "2ebc7fc2fe6982e3c3c583336b0bc7fb",
"text": "There's a possibility to lose money in exchange rate shifts, but just as much chance to gain money (Efficient Market Hypothesis and all that). If you're worried about it, you should buy a stock in Canada and short sell the US version at the same time. Then journal the Canadian stock over to the US stock exchange and use it to settle your short sell. Or you can use derivatives to accomplish the same thing.",
"title": ""
},
{
"docid": "bb7552c1ff46cd7722042c55aa395f87",
"text": "RoyalBank provides a no fee transfer service (no fee in the sense that there is no per transfer fee aside from the spread). There is monthly fee if you keep less than 1500 or so on the american side. http://www.rbcroyalbank.com/usbanking/cross-border-transfer.html",
"title": ""
},
{
"docid": "c12bc3175fa0e13e7583371e1891a8ba",
"text": "In theory, when you obtained ownership of your USD cash as a Canadian resident [*resident for tax purposes, which is generally a quicker timeline than being resident for immigration purposes], it is considered to have been obtained by you for the CAD equivalent on that date. For example if you immigrated on Dec 31, 2016 and carried $10k USD with you, when the rate was ~1.35, then Canada deems you to have arrived with $13.5k CAD. If you converted that CAD to USD when the rate was 1.39, you would have received 13.9k CAD, [a gain of $400 to show as income on your tax return]. Receiving the foreign inheritances is a little more complex; those items when received may or may not have been taxable on that day. However whether or not they were taxable, you would calculate a further gain as above, if the fx rate gave you more CAD when you ultimately converted it. If the rate went the other way and you lost CAD-value, you may or may not be able to claim a loss. If it was a small loss, I wouldn't bother trying to claim it due to hassle. If it's a large loss, I would be very sure to research thoroughly before claiming, because something like that probably has a high chance of being audited.",
"title": ""
},
{
"docid": "c86b0d267984e7b5f0929fb77b2bd8f7",
"text": "Most US banks don't allow you the ability to draft a foreign currency check from USD. Though, I know Canadian banks are more workable. For instance, TD allows you to do this from CAD to many other currencies for a small fee. I believe even as a US Citizen you can quite easily open a TD Trust account and you'd be good to go. Also, at one time Zions bank was one of the few which lets US customers do this add-hoc. And there is a fee associated. Even as a business, you can't usually do this without jumping thru hoops and proving your business dealings in foreign countries. Most businesses who do this often will opt to using a payment processor service from a 3rd party which cuts checks in foreign currencies at a monthly and per check base. Your other option, which may be more feasible if you're planning on doing this often, would be to open a British bank account. But this can be difficult if not impossible due to the strict money laundering anti-fraud regulations. Many banks simply won't do it. But, you might try a few of the newer British banks like Tesco, Virgin and Metro.",
"title": ""
},
{
"docid": "2a03e11b09578cfefddc3909b61c1c49",
"text": "\"Federal taxes are generally lower in Canada. Canada's top federal income tax rate is 29%; the US rate is 35% and will go to 39.6% when Bush tax cuts expire. The healthcare surcharge will kick in in a few years, pushing the top bracket by a few more points and over 40%. State/provincial taxes are lower in the US. You may end up in the 12% bracket in New York City or around 10% in California or other \"\"bad\"\" income-tax states. But Alberta is considered a tax haven in Canada and has a 10% flat tax. Ontario's top rate is about 11%, but there are surtaxes that can push the effective rate to about 17%. Investment income taxes: Canada wins, narrowly. Income from capital gains counts as half, so if you're very rich and live in Ontario, your rate is about 23% and less than that in Alberta. The only way to match or beat this deal in the US in the long term is to live in a no-income-tax state. Dividends are taxed at rates somewhere between capital gains and ordinary income - not as good a deal as Bush's 15% rate on preferred dividends, but that 15% rate will probably expire soon. Sales taxes: US wins, but the gap is closing. Canada has a national VAT-like tax, called GST and its rate came down from 7% to 5% when Harper became the Prime Minister. Provinces have sales taxes on top of that, in the range of 7-8% (but Alberta has no sales tax). Some provinces \"\"harmonized\"\" their sales taxes with the GST and charge a single rate, e.g. Ontario has a harmonized sales tax (HST) of 13% (5+8). 13% is of course a worse rate than the 6-8% charged by most states, but then some states and counties already charge 10% and the rates have been going up in each recession. Payroll taxes: much lower in Canada. Canadian employees' CPP and EI deductions have a low threshold and top out at about $3,000. Americans' 7.65% FICA rate applies to even $100K, resulting in a tax of $7,650. Property taxes: too dependent on the location, hard to tell. Tax benefits for retirement savings: Canada. If you work in the US and don't have a 401(k), you get a really bad deal: your retirement is underfunded and you're stuck with a higher tax bill, because you can't get the deduction. In Canada, if you don't have an RRSP at work, you take the money to the financial company of your choice, invest it there, and take the deduction on your taxes. If you don't like the investment options in your 401(k), you're stuck with them. If you don't like them in your RRSP, contribute the minimum to get the match and put the rest of the money into your individual RRSP; you still get the same deduction. Annual 401(k) contribution limits are use-it-or-lose-it, while unused RRSP limits and deductions can be carried forward and used when you need to jump tax brackets. Canada used to lack an answer to Roth IRAs, but the introduction of TFSAs took care of that. Mortgage interest deduction: US wins here as mortgage interest is not deductible in Canada. Marriage penalty: US wins. Canadian tax returns are of single or married-filing-separately type. So if you have one working spouse in the family or a big disparity between spouses' incomes, you can save money by filing a joint return. But such option is not available in Canada (there are ways to transfer some income between spouses and fund spousal retirement accounts, but if the income disparity is big, that won't be enough). Higher education: cheaper in Canada. This is not a tax item, but it's a big expense for many families and something the government can do about with your tax dollars. To sum it up, you may face higher or lower or about the same taxes after moving from US to Canada, depending on your circumstances. Another message here is that the high-tax, socialist, investment-unfriendly Canada is mostly a convenient myth.\"",
"title": ""
},
{
"docid": "144cce3a1c93590519217a7e460232ff",
"text": "There are a few options that I know of, but pretty much every one of them will cost more than you want to pay in fees, probably. You should be able to write a check/cheque to yourself. You might check with your US bank branch to see how much of a limit they'd have. You can also use a Canadian ATM card at a US ATM. The final option would be to use a Canadian credit card for all of your purchases in the US, and then pay the bill from the Canadian bank account. I don't recommend the last option because if you're not careful to pay off the bill every month, you're running up debt. Also, it's hard to pay some kinds of expenses by credit card, so you'd want a way to have cash available. Another option would be to use a service like Paypal or Hyperwallet to send yourself the money. Again, you'd be paying fees, but these might be cheaper than what the bank would charge. There may be other options, but these are the ones I'm aware of. Whatever you choose, look carefully at what the fees would be, and how long you'd have to wait to get the money. If you can plan ahead a bit, and take larger chunks of money at a time, that should help keep the fees down a bit. I believe there's also a point where you start having to report these transfers to the US government. The number $10,000 stick in my head, but they may have changed that recently.",
"title": ""
},
{
"docid": "f726f809f97b359ec75b22e77941d0cb",
"text": "Transfers can be made from U.S. pension plans to Canadian RRSPs, if the following conditions are met: Way more details here: http://www.howlandtax.com/answers/05Sept21.htm And googling 'transfer 401k to rrsp' yields much fruit.",
"title": ""
},
{
"docid": "1a404654ead22b2255f0566d521035db",
"text": "\"@sdg's answer is spot-on with the advice to avoid repeated conversions, but I'd like to provide some specifics on the fees involved: Each time you round-trip Canadian dollars (CAD) through a U.S.-dollar (USD) priced security at TD Waterhouse and leave your proceeds in CAD, you're paying a total foreign exchange fee – implied in their rate spread – of about 3%, give or take. That's ~3% per buy & sell combination, or ~1.5% on each end. You can imagine if you trade back & forth frequently, you can quickly lose a lot of money. Do it back and forth ten times in a year and you're out ~30% on the fees alone! The TD U.S. Money Market Fund (TDB166) that TD Waterhouse is referring to has no direct commission to buy or sell, but it does have a Management Expense Ratio (MER) of 0.20% per year – basically a fee which is deducted from the fund's returns (which, today, are also close to zero.) Practically speaking, that's a very slim fee to hold some USD in your Canadian dollar TFSA. While 0.20% is cheap, a point to keep in mind is if you maintain a significant USD balance, you are maintaining currency risk: You can lose money in CAD terms if the CAD appreciates vs. USD. Additional references: Canadian Capitalist describes TD Waterhouse and the use of TDB166 and \"\"wash trades\"\" at How to \"\"Wash\"\" Your Trade? He's referring to RRSPs, but the same applies to TFSAs, which came out after the post was written. Canadian Couch Potato has two relevant articles: Are US-listed ETFs Really Cheaper? and Lowering Your Currency Exchange Fees.\"",
"title": ""
},
{
"docid": "0ab3fee36c996ad778cc4618cca18011",
"text": "\"Assuming that the assets in the \"\"old\"\" TFSA are in cash, you could simply withdraw the money and redeposit it in the \"\"new\"\" TFSA, in the following year!!. The yearly limit is on your gross deposits for the year, not the net. This method obviously works best near the end of December. You should expect the new TFSA to briefly question the amount; they don't want to help you make a costly mistake. At other times, the direct transfer in @Grade EhBacon's answer would be better.\"",
"title": ""
},
{
"docid": "a336e432920f71cf5cf7ca918fa8eb41",
"text": "I have a bank account in the US from some time spent there a while back. When I wanted to move most of the money to the UK (in about 2006), I used XEtrade who withdrew the money from my US account and sent me a UK cheque. They might also offer direct deposit to the UK account now. It was a bit of hassle getting the account set up and linked to my US account, but the transaction itself was straightforward. I don't think there was a specific fee, just spread on the FX rate, but I can't remember for certain now - I was transfering a few thousand dollars, so a relatively small fixed fee would probably not have bothered me too much.",
"title": ""
},
{
"docid": "4f8f5fa9a7144cf472c4d3c3c924557d",
"text": "\"The point here is actually about banks, or is in reference to banks. They expect you know how a savings account at a bank works, but not mutual funds, and so are trying to dispel an erroneous notion that you might have -- that the CBIC will insure your investment in the fund. Banks work by taking in deposits and lending that money out via mortgages. The mortgages can last up to 30 years, but the deposits are \"\"on demand\"\". Which means you can pull your money out at any time. See the problem? They're maintaining a fiction that that money is there, safe and sound in the bank vault, ready to be returned whenever you want it, when in fact it's been loaned out. And can't be called back quickly, either. They know only a little bit of that money will be \"\"demanded\"\" by depositors at any given time, so they keep a percentage called a \"\"reserve\"\" to satisfy that, er, demand. The rest, again, is loaned out. Gone. And usually that works out just fine. Except sometimes it doesn't, when people get scared they might not get their money back, and they all go to the bank at the same time to demand their on-demand deposits back. This is called a \"\"run on the bank\"\", and when that happens, the bank \"\"fails\"\". 'Cause it ain't got the money. What's failing, in fact, is the fiction that your money is there whenever you want it. And that's really bad, because when that happens to you at your bank, your friends the customers of other banks start worrying about their money, and run on their banks, which fail, which cause more people to worry and try to get their cash out, lather, rinse repeat, until the whole economy crashes. See -- The Great Depression. So, various governments introduced \"\"Deposit Insurance\"\", where the government will step in with the cash, so when you panic and pull all your money out of the bank, you can go home happy, cash in hand, and don't freak all your friends out. Therefore, the fear that your money might not really be there is assuaged, and it doesn't spread like a mental contagion. Everyone can comfortably go back to believing the fiction, and the economy goes back to merrily chugging along. Meanwhile, with mutual funds & ETFs, everyone understands the money you put in them is invested and not sitting in a gigantic vault, and so there's no need for government insurance to maintain the fiction. And that's the point they're trying to make. Poorly, I might add, where their wording is concerned.\"",
"title": ""
},
{
"docid": "e30e4fb242f8e042d3c4cc995bc4986e",
"text": "Canada, like other second-rate economies with weak currencies, provides USD accounts. It is not the same vice versa. It is rare to find a direct deposit foreign currency account in the US as it is the world-leading currency.",
"title": ""
},
{
"docid": "8400613fe1604536e0f9484699465382",
"text": "You should check this with a tax accountant or tax preparation expert, but I encountered a similar situation in Canada. Your ISA income does count as income in a foreign country, and it is not tax exempt (the tax exemption is only because the British government specifically says so). You would need to declare the income to the foreign government who would almost certainly charge you tax on it. There are a couple of reasons why you should probably keep the funds in the ISA, especially if you are looking to return. First contribution limits are per year, so if you took the money out now you would have to use future contribution room to put it back. Second almost all UK savings accounts deduct tax at source, and its frankly a pain to get it back. Leaving the money in an ISA saves you that hassle, or the equal hassle of transferring it to an offshore account.",
"title": ""
}
] |
fiqa
|
528397288b2c44f4e002778918d0fae5
|
Optimal way for withdrawing vested company match from my 401k?
|
[
{
"docid": "55fa27ae850d048706e23ab6e49c4bc6",
"text": "Why would you want to withdraw only the company match, and presumably leave your personal contributions sitting in your ex-company's 401k plan? Generally, 401k plans have larger annual expenses and provide for poorer investment choices than are available to you if you roll over your 401k investments into an IRA. So, unless you have specific reasons for wanting to continue to leave your money in the 401k plan (e.g. you have access to investments that are not available to nonparticipants and you think those investments are where you want your money to be), roll over part (or all) of your 401k assets into an IRA, and withdraw the rest for personal expenses. If your personal contributions are in a Roth 401k, roll them over to a Roth IRA, but, as I remember it, company contributions are not part of the Roth 401k and must be rolled over into a Traditional IRA. Perhaps this is why you want to take those in cash to pay for your personal purchase? Also, what is this 30% hit you are talking about? You will owe income tax on the money withdrawn from the 401k (and custodians traditionally withhold 20% and send it to the IRS on your behalf) plus penalty for early withdrawal (which the custodian may also withhold if you ask them), but the tax that you will pay on the money withdrawn will depend on your tax bracket, which may be lower if you are laid off and do not immediately take on a new job. That is, the 30% hit may be on the cash flow, but you may get some of it back as a refund when you file your income tax return.",
"title": ""
},
{
"docid": "4030dc55fad97d9314441a551fec6c34",
"text": "You can borrow against a 401k for 5 years. This defers any penalty fees that the IRS mandates. Put the cash back in your 401k within those 5 years. you can also solo administer 401k plans even if you have an unincorporated business, so you can start one of those if you have any other form of cashflow, and there may be a way to get the other plan rolled into your solo one. http://www.irs.gov/publications/p560/ch04.html#en_US_publink10009053",
"title": ""
}
] |
[
{
"docid": "b4a947c1b4a02e26f333a174d8090296",
"text": "If your employer does not offer contribution matching, and you don't like the range of investment options provided by the company 401k, then you probably are better off investing in your own IRA instead. In an IRA held at a bank or brokerage, you can invest in multiple stocks or funds and move money around within the IRA pretty freely in most cases. If your company is doing well and is actually sharing profit into the 401k, you might consider leaving your 5% contribution to the 401k where it is and put the other 5% you are planning to contribute into a new IRA of your own. This straddles the risk of you losing money if your company 401k tanks (or profit sharing dries up) and your missing out on profit sharing if it continues to pay well.",
"title": ""
},
{
"docid": "afb5b4fbf1539e64167c69d8252f847b",
"text": "Use a compound interest calculator to project the difference with ETFs in the S&P 500 (or the asset mix of your choosing), and subtract the expected pension amount. If the difference is positive, or around around even, I would do it to avoid the risk of company failure.",
"title": ""
},
{
"docid": "969ee94d14e1dc337601ab97bf11cb94",
"text": "Start with the tax delta. For example, you'd hope to deposit at 25% bracket, but take withdrawals while at a marginal 15%. In this case, you're 10% to the good with the 401(k) and need to look at the fee eating away at this over time. Pay an extra 1%/yr and after 10 years, you're losing money. That's too simple, however. Along the way, you need to consider that the capital gain rate is lower than ordinary income. It's easier to take those gains as you wish to time them, where the 401(k) offers no flexibly for this. Even with low fees, this account is going to turn long term gains to ordinary income. (Note - in 2013, a couple with up to $72,500 in taxable income has a 0% long term cap gain rate. So, if they wish, they can sell and buy back a fund, claim the gain, and raise their cost basis. A tiny effort for the avoidance of tax on the gains each year.) First paragraph, don't forget, there are the standard deduction, exemption, and 10% bracket. While you are in the range to save enough to create he income to fill the low end at withdrawal, there's more value than just the 10% I discussed earlier. Last, there's a phenomenon I call The Phantom Tax Rate Zone when one's retirement withdrawals trigger the taxation of Social Security. It further complicates the math and analysis you seek.",
"title": ""
},
{
"docid": "2095856000a43ba310d2ac61948c6cb0",
"text": "Stuff I wish I had known, based on having done the following: Obtained employment at a startup that grants Incentive Stock Options (ISOs); Early-exercised a portion of my options when fair market value was very close to my strike price to minimize AMT; made a section 83b) election and paid my AMT up front for that tax year. All this (the exercise and the AMT) was done out of pocket. I've never see EquityZen or Equidate mention anything about loans for your exercise. My understanding is they help you sell your shares once you actually own them. Stayed at said startup long enough to have my exercised portion of these ISOs vest and count as long term capital gains; Tried to sell them on both EquityZen and Equidate with no success, due to not meeting their transaction minimums. Initial contact with EquityZen was very friendly and helpful, and I even got a notice about a potential sale, but then they hired an intern to answer emails and I remember his responses being particularly dismissive, as if I was wasting their time by trying to sell such a small amount of stock. So that didn't go anywhere. Equidate was a little more friendly and was open to the option of pooling shares with other employees to make a sale in order to meet their minimum, but that never happened either. My advice, if you're thinking about exercising and you're worried about liquidity on the secondary markets, would be to find out what the minimums would be for your specific company on these platforms before you plunk any cash down. Eventually brought my request for liquidity back to the company who helped connect me with an interested external buyer, and we completed the transaction that way. As for employer approval - there's really no reason or basis that your company wouldn't allow it (if you paid to exercise then the shares are yours to sell, though the company may have a right of first refusal). It's not really in the company's best interest to have their shares be illiquid on the secondary markets, since that sends a bad signal to potential investors and future employees.",
"title": ""
},
{
"docid": "1e5a296417919a3349a32bef497bbb96",
"text": "\"The company itself doesn't benefit. In most cases, it's an expense as the match that many offer is going to cost the company some percent of salary. As Mike said, it's part of the benefit package. Vacation, medical, dental, cafeteria plans (i.e. both flexible spending and dependent care accounts, not food), stock options, employee stock purchase plans, defined contribution or defined benefit pension, and the 401(k) or 403(b) for teachers. Each and all of these are what one should look at when looking at \"\"total compensation\"\". You allude to the lack of choices in the 401(k) compared to other accounts. Noted. And that lack of choice should be part of your decision process as to how you choose to invest for retirement. If the fess/selection is bad enough, you need to be vocal about it and request a change. Bad choices + no match, and maybe the account should be avoided, else just deposit to the match. Note - Keith thanks for catching and fixing one typo, I just caught another.\"",
"title": ""
},
{
"docid": "805eb47b11cca78c00063830acd132c6",
"text": "\"You have a few options: Option #1 - Leave the money where it is If your balance is over $5k - you should be able to leave the money in your former-employer's 401(k). The money will stay there and continue to be invested in the funds that you elect to invest in. You should at the very least be receiving quarterly statements for the account. Even better - you should have access to some type of an online account where you can transfer your investments, rebalance your account, conform to target, etc. If you do not have online account access than I'm sure you can still transfer investments and make trades via a paper form. Just reach out to the 401(k) TPA or Recordkeeper that administers your plan. Their contact info is on the quarterly statements you should be receiving. Option #2 - Rollover the money into your current employer's 401(k) plan. This is the option that I tend to recommend the most. Roll the money over into your current employer's 401(k) plan - this way all the money is in the same place and is invested in the funds that you elect. Let's say you wanted to transfer your investments to a new fund lineup. Right now - you have to fill out the paperwork or go through the online process twice (for both accounts). Moving the money to your current-employer's plan and having all the money in the same place eliminates this redundancy, and allows you to make one simple transfer of all your assets. Option #3 - Roll the money from your former-employer's plan into an IRA. This is a cool option, because now you have a new IRA with a new set of dollar limits. You can roll the money into a separate IRA - and contribute an additional $5,500 (or $6,500 if you are 50+ years of age). So this is cool because it gives you a chance to save even more for retirement. Many IRA companies give you a \"\"sign on bonus\"\" where if you rollover your former-employers 401(k)...they will give you a bonus (typically a few hundred bucks - but hey its free money!). Other things to note: Take a look at your plan document from your former-employer's 401(k) plan. Take a look at the fees. Compare the fees to your current-employer's plan. There could be a chance that the fees from your former-employer's plan are much higher than your current-employer. So this would just be yet another reason to move the money to your current-employer's plan. Don't forget you most likely have a financial advisor that oversees your current-employer's 401(k) plan. This financial advisor also probably takes fees from your account. So use his services! You are probably already paying for it! Talk to your HR at your employer and ask who the investment advisor is. Call the advisor and set up an appointment to talk about your retirement and financial goals. Ask him for his advice - its always nice talking to someone with experience face to face. Good luck with everything!\"",
"title": ""
},
{
"docid": "e2942910561dfc31946780b57e43f77f",
"text": "I completely agree with Pete that a 401(k) loan is not the answer, but I have an alternate proposal: Reduce your 401(k) contribution down to the 4% that you get a match on. If you are cash poor now and have debts to be cleaned up, those need to be addressed before retirement savings. You'll have plenty of time to make up the lost savings after you get the debts paid off. If your company matches 50% (meaning you have to contribute 8% to get the 4% match), then consider temporarily stopping your 401(k) altogether. A 100% match is very hard to give up, but a 50% match is less difficult. You have plenty of years left ahead of you to make up the lost match. Plus, the pain of knowing you're leaving money on the table will incentivize you to get the loans paid as quickly as possible. It seems to me that I would be reducing middle to high interest debt while also saving myself $150 per month. No, you'd be deferring $150 per month for an additional two years, and not reducing debt at all, just moving it to a different lender. Interest rate is not your problem. Right now you're paying less than $30 per month in interest on these 3 loans and about $270 in principal, and at the current rate should have them paid off in about 2 years. You're wanting to extend these loans to 4 years by borrowing from your retirement savings. I would buckle down, reduce expenses wherever possible (cable? cell phone? coffee? movies? restaurants?) until you get these debts paid off. You make $70,000 per year, or almost $6,000 per month. I bet if you try hard enough you can come up with $1,100 fairly quickly. Then the next $1,200 should come twice as fast. Then attack the next $4,000. (You can argue whether the $1,200 should come first because of the interest rate, but in the end it doesn't matter - either one should be paid off very quickly, so the interest saved is negligible) Maybe you can get one of them paid off, get yourself some breathing room, then loosen up a little bit, but extending the pain for an additional two years is not wise. Some more drastic measures:",
"title": ""
},
{
"docid": "8dd55b46d9c07218fb9f8baf97aa6c57",
"text": "There is Free employer money on both sides of the tax fence for some employees. On the pretax side, your employer may provide you a match. If so, invest the maximum to get 100% of the match. On the after tax side, many companies offers a 15% discount on ESPP plans and a one year hold. My wife has such an employer. The one year hold is fine because it allows us to be taxed at Long Term Capital gains if the stock goes up which is lower than our current income bracket. After creating a seasoned pool of stocks that we could sell after the one year hold, we are then able to sell the same number of stocks purchased each month. This provides a 17.6% guaranteed gain on a monthly basis. How much would you purchase if you had a guaranteed 17.6% return. Our answer is 15% (our maximum allowed). The other trick is that while the employer is collecting the money, you will purchase the stock at the lowest day of the period. You will usually sell for even more than the purchase price unless the day purchased was the lowest day of month. The trick is to reinvest the money in tax free investments to balance out the pretax investing. Never leave the money in the plan. That is too much risk.",
"title": ""
},
{
"docid": "67f1e3d6f0554611cc1f6864f874b742",
"text": "If your plan permits loans, deposit enough through the year to maximize the match and then take a loan from the plan. Use the loan portion to pay your student loan. Essentially you have refinanced your debt at a (presumably) lower rate and recieved the match. You pay yourself back (with interest) through your payroll. The rates are typically the prime rate + 1%. The loans are subject to a lesser of 50% vested account balance or $50,000 provision.",
"title": ""
},
{
"docid": "6cc7118948c58336c684479e9e60faa0",
"text": "\"Your initial plan (of minimizing your interest rate, and taking advantage of the 401(k) match) makes sense, except I would put the 401(k) money in a very low risk investment (such as a money market fund) while the stock market seems to be in a bear market. How to decide when the stock market is in a bear market is a separate question. You earn a 100% return immediately on money that receives the company match -- provided that you stay at the company long enough for the company match to \"\"vest\"\". This immediate 100% return far exceeds the 3.25% return by paying down debt. As long as it makes sense to keep your retirement funds in low-risk, low-return investments, it makes more sense to use your remaining free cash flow to pay down debts than to save extra money in retirement funds. After setting aside the 6% of your income that is eligible for the company match, you should be able to rapidly pay down your debts. This will make it far easier for you to qualify for a mortgage later on. Also, if you can pay off your debt in a couple years, you will minimize your risk from the proposed variable rate. First, there will be fewer chances for the rate to go up. Second, even if the rate does go up, you will not owe the money very long.\"",
"title": ""
},
{
"docid": "4ac06d29174fb08de0840360fe7e7576",
"text": "If you leave your employer at age 55 or older, you can withdraw with no penalty. Mandatory 20% withholding, but no penalty. You reconcile in April, and may get it all back. If you are sub 55, the option is a Sec 72t withdrawal. The author of the article got it right. I am a fan of his.",
"title": ""
},
{
"docid": "2d0ca4aa62e63f9d94c1702c75d5c991",
"text": "\"Unless your 401(k) plan is particularly good (i.e. good fund choices with low fees), you probably want to contribute enough to get the maximum match from your employer, then contribute to an IRA through a low-cost brokerage like Vanguard or Fidelity, then contribute more to your 401(k). As JoeTaxpayer said, contributions to a Roth IRA can be withdrawn tax- and penalty-free, so they are useful for early retirement. But certainly use your 401(k) as well--the tax benefits almost certainly outweigh the difficulty in accessing your money. JB King's link listing ways to access retirement money before the traditional age is fairly exhaustive. One of the main ways you may want to consider that hasn't been highlighted yet is IRS section 72(t) i.e. substantially equal periodic payments (SEPP). With this rule you can withdraw early from retirement plans without penalties. You have a few different ways of calculating the withdrawal amount. The main risk is you have to keep withdrawing that amount for the greater of five years or until you reach age 59½. In your case this is is only 4-5 years, which isn't too bad. Finally, in addition to being able to withdraw from a Roth IRA tax- and penalty-free, you can do the same for Roth conversions, provided 5 years have passed. So after you leave a job, you can rollover 401(k) money to a traditional IRA, then convert to a Roth IRA (the caveat being you have to pay taxes on the amount as income at this point). But after 5 years you can access the money without penalty, and no taxes since they've already been paid. This is commonly called a \"\"Roth conversion ladder\"\".\"",
"title": ""
},
{
"docid": "43a78fcd31371bbbbdbcf6739ea5f36a",
"text": "All other things being equal, you might be better off contributing to a IRA that is a brokerage account. You will have lots of flexibility in your investments and there would probably not be fees for the account itself. You might incur commissions for trading and/or owning mutual funds that are charged by the funds themselves. You won't be able to borrow from an IRA, as opposed to a 401K. IMHO, that is a good thing. Are you suggesting that you would withdraw early from a retirement account? You'd probably be better off not doing that. Assuming a large salary, you would be paying 43% to withdraw your money early. Would you accept a loan at 43% interest? You are probably better off not putting the money in in the first place to accomplish your goals, then withdrawing it early. Most people opt for a 401K for two reasons. The company match and ease of investment make a compelling argument. Keep in mind if a 401K is available to you, regardless if you particpate, you start phasing out your IRA deduction at 60K a year (single) or 96K (married). Given your huge salary comments I imagine an IRA would not be an option in your scenario. Given that, if you leave a job, you can roll your 401K balance into a trading account.",
"title": ""
},
{
"docid": "f2c4eab2810ccc0b15655f56cb180ce9",
"text": "Specifically on the subject of maxing out your 401k, there are several downsides: The employer match usually only applies to the first 6%. Some employers offer no match at all. You listed the match as a pro, but I think it should be pointed out that you can usually get this benefit without maxing out your plan. The investment options are limited. Usually there is at least one fund available from all the common investment classes, but these may not be your preferred funds if you were able to choose for yourself. Fees can be very high. If you are working for a small to medium size company, the fees for each fund will often be higher than for the same funds in a plan offered by a large company. Fees are usually related to the dollar amount of assets under management. Each person has a different tax situation, so if you are single and making 6 figures, you might still be in the 25% bracket even after maxing out your 401k, but the same person filing jointly with a spouse that makes less could get down to the 15% bracket with a smaller contribution. I meet my retirement savings goals without maxing out the 401k. As long as the amount is above the employer match amount, my second priority is to funnel as much money as possible in to my IRA (because I get lower fees and better investment options from Vanguard).",
"title": ""
},
{
"docid": "45b65cd59a4b30d804d43bdb6d402be5",
"text": "Here's my thoughts on the subject:",
"title": ""
}
] |
fiqa
|
a8328a5559e7c31f3f18aec61ca09032
|
searching for historic exchange rate provider which meets this example data
|
[
{
"docid": "73f0f5884654654b0658b3caef2f0620",
"text": "You will most likely not be able to avoid some form of format conversion, regardless of which data you use since there is, afaik, no standard for this data and everyone exports it differently. One viable option would be, like you said yourself, using the free data provided by Dukascopy. Please take into consideration that those are spot currency rates and will most likely not represent the rate at which physical and business-related exchange would have happened at this time.",
"title": ""
}
] |
[
{
"docid": "6ce35d03492be82ba637153265746f74",
"text": "I used Oanda.com for Forex trading a couple years ago. I am in the US but I think it's available in the UK as well. At the time, they had no commissions and their spreads were comparable or better than other brokers. The spreads would just quite considerably when a big event like a Fed meeting or the unemployment figures come out, but I suspect that that is the same everywhere (or they have constant spreads and reject trades). They did not push the high leverages like other brokers were at the time. I considered this to be very reputable, because though the profits to be gotten through 100:1 leverage are great advertising, the reality is that one unexpected spike and a newbie would lose a bunch of money in a margin call.",
"title": ""
},
{
"docid": "8ad88c6e02a19df554b969904c287526",
"text": "\"The prices quoted are for currency pairs traded on the foreign exchange market. For currencies traded on these exchanges, the exchange rates of a given currency pair are determined by the market, so supply and demand, investor confidence, etc. all play a role. EBS and Reuters are the two primary trading platforms in the foreign exchange market, and much of the data on exchange rates comes from them. Websites will usually get their data either from these sources directly or from a data provider that in turn gets it from EBS, Reuters, or another data source like Bloomberg or Haver Analytics. These data sources aren't free, however. In the US, many contracts, transactions, etc. that involve exchange rates use the exchange rate data published by the Federal Reserve. You might see this in contracts that specify to use \"\"the exchange rate published by the Federal Reserve at 12 pm (noon) on date --some date--\"\". You can also look at the Federal Reserve Economic Data, which maintains data series of historical daily, weekly, and monthly exchange rates for major currency pairs. These data are free, although they aren't realtime. Data for each business day is mostly updated the next business day.\"",
"title": ""
},
{
"docid": "ee83cf1681351e0bbe55dd42652e9db8",
"text": "You can view certain US economic data with FRED Graph or download the data to play with FRED download. Here is some example tax data:",
"title": ""
},
{
"docid": "bd7f2b503ced211bf1dc76b6d304183f",
"text": "Central banks don't generally post exchange rates with other currencies, as they are not determined by central banks but by the currency markets. You need a source for live exchange rate data (for example www.xe.com), and you need to calculate the prices in other currencies dynamically as they are displayed -- they will be changing continually, from minute to minute.",
"title": ""
},
{
"docid": "f7ff0489f0eabd8d4d808b9215088b15",
"text": "You can get this data from a variety of sources, but likely not all from 1 source. Yahoo is a good source, as is Google, but some stock markets also give away some of this data, and there's foreign websites which provide data for foreign exchanges. Some Googling is required, as is knowledge of web scraping (R, Python, Ruby or Perl are great tools for this...).",
"title": ""
},
{
"docid": "0044afa440570181fb34cb566eaab389",
"text": "I found the zephyr database, which does the job. Nonetheless if someone knows other (open) sources, be welcome to answer.",
"title": ""
},
{
"docid": "a84f16ada81922d72884f228646ce307",
"text": "I spoke to HMRC and they said #1 is not allowable but #2 is. They suggested using either their published exchange rates or I could use another source. I suggested the Bank of England spot rates and that was deemed reasonable and allowable.",
"title": ""
},
{
"docid": "6db30f454c040ad0bfefaf7151447a71",
"text": "Good day! Did a little research by using oldest public company (Dutch East India Company, VOC, traded in Amsterdam Stock Exchange) as search criteria and found this lovely graph from http://www.businessinsider.com/rise-and-fall-of-united-east-india-2013-11?IR=T : Why it is relevant? Below the image I found the source of data - Global Financial Data. I guess the answer to your question would be to go there: https://www.globalfinancialdata.com/index.html Hope this helps and good luck in your search!",
"title": ""
},
{
"docid": "49be636cb79217a992a2a5337909c617",
"text": "\"See my comment below about the official exchange rate. There is no \"\"official\"\" exchange rate to apply as far as I'm aware. However the bank is already applying the same exchange rate you can find in the forex markets. They are simply applying a spread (meaning they will add some amount to the exchange rate whichever way you are exchanging currency). You will almost certainly not find a bank that doesn't apply a spread. Of course, their spread might be large, so that's why it is good to compare rates. By the way, 5 GBP/month seems reasonable for a foreign currency (or any) acct. The transaction fees might be cheaper in a different \"\"package\"\" so check. You should consider trying PayPal. Their spread is quite small - and publicly disclosed - and their per-transaction fees are very low. Of course, this is not a bank account. But you can easily connect it to your bank account and transfer the money between accounts quickly. They also offer free foreign currency accounts that you can basically open and close in a click. Transfers are instantaneous. I am based in Germany but I haven't had a problem with clients from various English-speaking countries using PayPal. They actually seem to prefer it in many instances.\"",
"title": ""
},
{
"docid": "12c783ab58e622f4b75a45d00cc7d18a",
"text": "There is a way I discovered of finding the current exchange rate before committing to buy, go to send payments, put in your own second email, pay 1gbp as the amount and it will give you the exchange rate and fees in your own currency, in my case euro, before you have to click on send payment",
"title": ""
},
{
"docid": "12c634220fc3e2dc46fc247bc28c4557",
"text": "I couldn't find historical data either, so I contacted Vanguard Canada and Barclays; Vanguard replied that This index was developed for Vanguard, and thus historical information is available as of the inception of the fund. Unfortunately, that means that the only existing data on historical returns are in the link in your question. Vanguard also sent me a link to the methodology Barclay's uses when constructing this index, which you might find interesting as well. I haven't heard from Barclays, but I presume the story is the same; even if they've been collecting data on Canadian bonds since before the inception of this index, they probably didn't aggregate it into an index before their contract with Vanguard (and if they did, it might be proprietary and not available free of charge).",
"title": ""
},
{
"docid": "5596b89a7503739bfe1ed3ba97b4b993",
"text": "Robert Shiller has an on-line page with links to download some historical data that may be what you want here. Center for the Research in Security Prices would be my suggestion for another resource here.",
"title": ""
},
{
"docid": "b1e6e328ddefd77d0000e46e8212a7af",
"text": "To answer your original question: There is proof out there. Here is a paper from the Federal Reserve Bank of St. Louis that might be worth a read. It has a lot of references to other publications that might help answer your question(s) about TA. You can probably read the whole article then research some of the other ones listed there to come up with a conclusion. Below are some excerpts: Abstract: This article introduces the subject of technical analysis in the foreign exchange market, with emphasis on its importance for questions of market efficiency. “Technicians” view their craft, the study of price patterns, as exploiting traders’ psychological regularities. The literature on technical analysis has established that simple technical trading rules on dollar exchange rates provided 15 years of positive, risk-adjusted returns during the 1970s and 80s before those returns were extinguished. More recently, more complex and less studied rules have produced more modest returns for a similar length of time. Conventional explanations that rely on risk adjustment and/or central bank intervention do not plausibly justify the observed excess returns from following simple technical trading rules. Psychological biases, however, could contribute to the profitability of these rules. We view the observed pattern of excess returns to technical trading rules as being consistent with an adaptive markets view of the world. and The widespread use of technical analysis in foreign exchange (and other) markets is puzzling because it implies that either traders are irrationally making decisions on useless information or that past prices contain useful information for trading. The latter possibility would contradict the “efficient markets hypothesis,” which holds that no trading strategy should be able to generate unusual profits on publicly available information—such as past prices—except by bearing unusual risk. And the observed level of risk-adjusted profitability measures market (in)efficiency. Therefore much research effort has been directed toward determining whether technical analysis is indeed profitable or not. One of the earliest studies, by Fama and Blume (1966), found no evidence that a particular class of TTRs could earn abnormal profits in the stock market. However, more recent research by Brock, Lakonishok and LeBaron (1992) and Sullivan, Timmermann an d White (1999) has provided contrary evidence. And many studies of the foreign exchange market have found evidence that TTRs can generate persistent profits (Poole 6 (1967), Dooley and Shafer (1984), Sweeney (1986), Levich and Thomas (1993), Neely, Weller and Dittmar (1997), Gençay (1999), Lee, Gleason and Mathur (2001) and Martin (2001)).",
"title": ""
},
{
"docid": "db751b9cc469f547550a323044b23d8e",
"text": "For manual conversion you can use many sites, starting from google (type 30 USD in yuan) to sites like xe.com mentioned here. For programmatic conversion, you could use Google Calculator API or many other currency exchange APIs that are available. Beware however that if you do it on the real site, the exchange rate is different from actual rates used by banks and payment processing companies - while they use market-based rates, they usually charge some premium on currency conversion, meaning that if you have something for 30 dollars, according to current rate it may bet 198 yuan, but if he uses a credit card for purchase, it may cost him, for example, 204 yuan. You should be very careful about making difference between snapshot market rates and actual rates used in specific transaction.",
"title": ""
},
{
"docid": "55bd82392b9f03e4190e3d4436bb95c2",
"text": "Thank you. Added to my list. This is very very helpful. I knew about the blockchain and the currency. Unfortunately, I'm not a pedant about differentiating between them with capitalising the first letter. I do not, however, understand Ethereum very well at all. So will read up.",
"title": ""
}
] |
fiqa
|
ceffddc3b25b377b685620a387e0a477
|
Any specific examples of company valuations according to Value Investing philosophy?
|
[
{
"docid": "59246ae9b4f3f7ec846b8c47640bb308",
"text": "\"I highly recommend http://pages.stern.nyu.edu/~adamodar/ Professor Damodaran. He's written some of the best valuation books in existence (my favorite, simply \"\"Investment Valuation\"\"). On his website you'll find a big pile of spreadsheets, that are models for working the various approaches to valuing a company. Also, he teaches an MBA-level valuation course at Stern School of Business in NYC. And he videotapes it and you can watch it for free. Very smart, kind, generous man.\"",
"title": ""
},
{
"docid": "d513872a89d3375d7b33660846180649",
"text": "Buffet is in a different league from other value investors. He looks for stable companies with no debt and good management. Then he looks to deeply understand the industries of candidate companies, and looks for companies that are not in commodity businesses or sell commodities that can be bought for 25% of the valuation that he believes reflects the true value of the company. Deeply understanding the market is really the key. Consider the Burlington Northern Santa Fe Railroad, which Buffet purchased last year. Railroads benefit from higher oil prices, as they can transport cargo much cheaper than trucks. They also tend to have natural monopolies in the regions they operate in. Buffet bought the railroad just as production of oil and natural gas in North Dakota started picking up. Since pipeline capacity between North Dakota and refineries in Texas/Oklahoma is very limited, the railroad is making alot of money transporting crude.",
"title": ""
}
] |
[
{
"docid": "8399543fe9b611cc89a88cecf78f9c74",
"text": "It's been awhile since my last finance course, so school me here: What is the market cap of a company actually supposed to represent? I get that it's the stock price X the # of shares, but what is that actually representing? Revenues? PV of all future revenues? PV of future cash flows? In any case, good write up. Valuation of tech stocks is quite the gambit, and you've done a good job of dissecting it for a layman.",
"title": ""
},
{
"docid": "7260e33a94f0592cc40cc223803db899",
"text": "There are books on the subject of valuing stocks. P/E ratio has nothing directly to do with the value of a company. It may be an indication that the stock is undervalued or overvalued, but does not indicate the value itself. The direct value of company is what it would fetch if it was liquidated. For example, if you bought a dry cleaner and sold all of the equipment and receivables, how much would you get? To value a living company, you can treat it like a bond. For example, assume the company generates $1 million in profit every year and has a liquidation value of $2 million. Given the risk profile of the business, let's say we would like to make 8% on average per year, then the value of the business is approximately $1/0.08 + $2 = $14.5 million to us. To someone who expects to make more or less the value might be different. If the company has growth potential, you can adjust this figure by estimating the estimated income at different percentage chances of growth and decline, a growth curve so to speak. The value is then the net area under this curve. Of course, if you do this for NYSE and most NASDAQ stocks you will find that they have a capitalization way over these amounts. That is because they are being used as a store of wealth. People are buying the stocks just as a way to store money, not necessarily make a profit. It's kind of like buying land. Even though the land may never give you a penny of profit, you know you can always sell it and get your money back. Because of this, it is difficult to value high-profile equities. You are dealing with human psychology, not pennies and dollars.",
"title": ""
},
{
"docid": "63bc244c29598b0de41cdc7a48443d51",
"text": "\"I hate to be the guy that says this but if you are indeed competing in the CFAI Research Challenge it is probably important. Remember you cannot use CFA as a noun (CFA's) you can only use it as an adjective ie a CFA charterholder. As far as you question, what was provided below is pretty much all you need. Security Analysis, anything from the NYU professor and Greenwald stuff (although Greenwald, like someone already mentioned, is balance sheet focused) will get you where you need to go. I am not sure what you mean by \"\"exotic valuation\"\" methods. As far as I know, the three most accepted and used valuation models by practitioners are the DCF model, the multiple model and the residual income model. DCF uses short term cash flows and a terminal value discounted to today at some discount rate. The multiple model puts some multiple on earnings, book value, cash flow to arrive at a fair value. The residual model is the opposite of the DCF. One starts with the assets book value, then accrues all income generated in excess of WACC from all future periods. Find some CFAI Level 2 books on equity and bond valuation. They pretty much cover it all. And for a closing note, to perform well in investing and valuing companies it is not about what valuation model you use. Focus on WHY an asset should be worth what you think it is worth, not HOW you get to some valuation of that asset. Just my two cents.\"",
"title": ""
},
{
"docid": "a39b37febb386d8d25976b32ed6e7097",
"text": "all of these examples are great if you actually believe in fundamentals, but who believes in fundamentals alone any more? Stock prices are driven by earnings, news, and public perception. For instance, a pharma company named Eyetech has their new macular degeneration drug approved by the FDA, and yet their stock price plummeted. Typically when a small pharma company gets a drug approved, it's off to the races. But, Genetech came out said their macular degeneration drug was going to be far more effective, and that they were well on track for approval.",
"title": ""
},
{
"docid": "2f56ae1095f00461fba1809cd285a175",
"text": "\"You should distinguish between the price and the value of a company: \"\"Price is what you pay, value is what you get\"\". Price is the share price you pay for one share of the company. Value is what a company is worth (based on fundamental analysis, one of the principles of value investing). I would recommend selling the stock only if the company's value has deteriorated due to fundamental changes (e.g. better products from competitors, declining market) and its value is lower than the current share price.\"",
"title": ""
},
{
"docid": "e91d8c0dcb863fc4b14459f62a081534",
"text": "\"Complex matter that doesn't boil down to a formula. The quant aspect could be assessed by calculating WACCs under various funding scenarii and trying to minimize, but it is just one dimension of it. The quali aspects can vary widely depending on the company, ownership structure, tax environment and business needs and it really can't be covered even superficially in a reddit comment... Few examples from the top of my mind to give you a sense of it: - shareholders might be able to issue equity but want to avoid dilution, so debt is preferred in the end despite cost. Or convertible debt under the right scenario. - company has recurring funding needs and thinks that establishing a status on debt market is worth paying a premium to ensure they can \"\"tap\"\" it whenever hey need to. - adding debt is a way to leverage and enhance ROI/IRR for certain types of stakeholders (think LBOs) - etc etc etc Takes time and a lot of experience/work to be able to figure out what's best and there isn't always a clear answer. Source: pro buy side credit investor with experience and sizeable AuMs.\"",
"title": ""
},
{
"docid": "88bad5cf03d3a2c8d04785fcf5589fec",
"text": "\"One way to value companies is to use a Dividend discount model. In substance, it consists in estimating future dividends and calculating their present value. So it is a methodology which considers that an equity is similar to a bond and estimates its current value based on future cash flows. A company may not be paying dividends now, but because its future earnings prospects are good may pay some in the future. In that case the DDM model will give a non-zero value to that stock. If on the other hand you think a company won't ever make any profits and therefore never pay any dividends, then it's probably worth 0! Take Microsoft as an example - it currently pays ~3% dividend per annum. The stock has been listed since 1986 and yet it did not pay any dividends until 2003. But the stock has been rising regularly since the beginning because people had \"\"priced in\"\" the fact that there was a high chance that the company would become very profitable - which proved true in the long term (+60,000% including dividends since the IPO!).\"",
"title": ""
},
{
"docid": "0a7f714f0a3b50be1430a11363a34698",
"text": "Aswath Damodaran's [Investment Valuation 3rd edition](http://www.amazon.com/Investment-Valuation-Techniques-Determining-University/dp/1118130731/ref=sr_1_12?ie=UTF8&qid=1339995852&sr=8-12&keywords=aswath+damodaran) (or save money and go with a used copy of the [2nd edition](http://www.amazon.com/gp/offer-listing/0471414905/ref=dp_olp_used?ie=UTF8&condition=used)) He's a professor at Stern School of Business. His [website](http://pages.stern.nyu.edu/~adamodar/) and [blog](http://aswathdamodaran.blogspot.com/) are good resources as well. [Here is his support page](http://pages.stern.nyu.edu/~adamodar/New_Home_Page/Inv3ed.htm) for his Investment Valuation text. It includes chapter summaries, slides, ect. If you're interested in buying the text you can get an idea of what's in it by checking that site out.",
"title": ""
},
{
"docid": "b648eff366f6e5637857115c7754cff1",
"text": "Other metrics like Price/Book Value or Price/Sales can be used to determine if a company has above average valuations and would be classified as growth or below average valuations and be classified as value. Fama and French's 3 Factor model would be one example that was studied a great deal using an inverse of Price/Book I believe.",
"title": ""
},
{
"docid": "278f315a77e4a4a26c0a02e978f6be6f",
"text": "This fortune article is referenced in his either 2003 or 2004 annual report in which he does say that the market will not likely return much in the future and generally talks numbers. I am also a value investor, such that I can be in this environment and believe there is a bit of value in knowing where you think the market is headed but the real value is in underwriting each deal. In long, I agree with you",
"title": ""
},
{
"docid": "b731769f380d1dbc187594d1070e9701",
"text": "I was thinking that the value of the stock is the value of the stock...the actual number of shares really doesn't matter, but I'm not sure. You're correct. Share price is meaningless. Google is $700 per share, Apple is $100 per share, that doesn't say anything about either company and/or whether or not one is a better investment over the other. You should not evaluate an investment decision on price of a share. Look at the books decide if the company is worth owning, then decide if it's worth owning at it's current price.",
"title": ""
},
{
"docid": "164f357b28487a92dd220457fa1bda24",
"text": "\"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.\"",
"title": ""
},
{
"docid": "8b82fb1b960b241080e16afd01ce6551",
"text": "\"Each company has X shares valued at $Y/share. When deals like \"\"Dragon's Den\"\" in Canada and Britain or \"\"Shark Tank\"\" in the US are done, this is where the company is issuing shares valued at $z total to the investor so that the company has the funds to do whatever it was that they came to the show to get funding to do, though some deals may be loans or royalties instead of equity in the company. The total value of the shares may include intangible assets of course but part of the point is that the company is doing an \"\"equity financing\"\" where the company continues to operate. The shareholders of the company have their stake which may be rewarded when the company is acquired or starts paying dividends but that is a call for the management of the company to make. While there is a cash infusion into the company, usually there is more being done as the Dragon or Shark can also bring contacts and expertise to the company to help it grow. If the investor provides the entrepreneur with introductions or offers suggestions on corporate strategy this is more than just buying shares in the company. If you look at the updates that exist on \"\"Dragon's Den\"\" or \"\"Shark Tank\"\" at least in North America I've seen, you will see how there are more than a few non-monetary contributions that the Dragon or Shark can provide.\"",
"title": ""
},
{
"docid": "18f714e37c58c5709f088dfa8fe323b8",
"text": "I could argue Amazon. And Facebook the other way. Before the down-vote brigade appears, I'll just say I said I could *argue* those points. Also, I haven't done valuation in years, and definitely not for tech because while I am a big techie, the industry itself seems likes a clown lottery with respect to valuation.",
"title": ""
},
{
"docid": "2b6a35f1951cf41e56a1603955d3ac58",
"text": "As I have worked for H&R Block I know for a fact that they record all your activity with them for future reference. If it is their opinion that you are obligated to use their service if you use some other service then this, most likely, will affect your future dealings with them. So, ask yourself this question: is reducing their income from you this year worth never being able to deal with them again in future years? The answer to that will give you the answer to your question.",
"title": ""
}
] |
fiqa
|
9a4c3d10eb66471be4871bc23cae524b
|
Does Reuters provide the 4pm London Spot rate for currencies?
|
[
{
"docid": "f07f11ef961fba7897da39b6b1e87f3e",
"text": "The interpretation is correct. The Reuters may give you the London 4PM rates if you query after the close for the day. The close rate is treated as the rate. http://uk.reuters.com/business/currencies/quote?srcAmt=1&srcCurr=GBP&destAmt=&destCurr=USD The London 4PM rate may be obtained from Bank of England at the link below; http://www.bankofengland.co.uk/mfsd/iadb/index.asp?Travel=NIxSTxTIx&levels=1&XNotes=Y&XNotes2=Y&Nodes=X3790X3791X3873X33940&SectionRequired=I&HideNums=-1&ExtraInfo=false&A3836XBMX3790X3791.x=4&A3836XBMX3790X3791.y=3 Or any other Bank that provides such data",
"title": ""
}
] |
[
{
"docid": "d56cf7b2f6193eac92d57bd4a84e4d3b",
"text": "\"The answer to each of your questions is no. It is important to appreciate that the \"\"quoted\"\" ticker price may be delayed by say 15 minutes, and thus is not \"\"real-time.\"\"\"",
"title": ""
},
{
"docid": "f6525fabe5b4facfd715c4d176e28d7c",
"text": "They could have different quotes as there are more than a few pieces here. Are you talking a Real Time Level II quote or just a delayed quote? Delayed quotes could vary as different companies would be using different time points in their data. You aren't specifying exactly what kind of quote from which system are you using here. The key to this question is how much of a pinpoint answer do you want and how prepared are you to pay for that kind of access to the automated trades happening? Remember that there could well be more than a few trades happening each millisecond and thus latency is something to be very careful here, regardless of the exchange as long as we are talking about first-world stock exchanges where there are various automated systems being used for trading. Different market makers is just a possible piece of the equation here. One could have the same market maker but if the timings are different,e.g. if one quote is at 2:30:30 and the other is at 2:30:29 there could be a difference given all the trades processed within that second, thus the question is how well can you get that split second total view of bids and asks for a stock. You want to get all the outstanding orders which could be a non-trivial task.",
"title": ""
},
{
"docid": "03e9557aeedc4a1650f7eba55a9cf3b6",
"text": "I work for a fund management company and we get our news through two different service providers Bloomberg and Thomson One. They don't actually source the news though they just feed news from other providers Professional solutions (costs ranging from $300-1500+ USD/month/user) Bloomberg is available as a windows install or via Bloomberg Anywhere which offers bimometric access via browser. Bloomberg is superb and their customer support is excellent but they aren't cheap. If you're looking for a free amateur solution for stock news I'd take a look at There are dozens of other tools people can use for day trading that usually provide news and real time prices at a cost but I don't have any direct experience with them",
"title": ""
},
{
"docid": "e452b219724c5f5bd7923cc1230effeb",
"text": "Have you looked at ThinkorSwim, which is now part of TD Ameritrade? Because of their new owner, you'll certainly be accepted as a US customer and the support will likely be responsive. They are certainly pushing webinars and learning resources around the ThinkorSwim platform. At the least you can start a Live Help session and get your answers. That link will take you to the supported order types list. Another tab there will show you the currency pairs. USD is available with both CAD and JPY. Looks like the minimum balance requirement is $25k across all ThinkorSwim accounts. Barron's likes the platform and their annual review may help you find reasons to like it. Here is more specific news from a press release: OMAHA, Neb., Aug 24, 2010 (BUSINESS WIRE) -- TD AMERITRADE Holding Corporation (NASDAQ: AMTD) today announced that futures and spot forex (foreign exchange) trading capabilities are now available via the firm's thinkorswim from TD AMERITRADE trading platform, joining the recently introduced complex options functionality.",
"title": ""
},
{
"docid": "59cfda44e5b7c17b0ab1e06760dc02fd",
"text": "Today's rate is 23.21 bps. I'm going to list years forward, spot rate, forward rate. 1, 30.27, 61.77 2, 63.64, 155.73 3, 107.15, 228.04 4, 143.16, 266.31 5, 172.55, 290.12 These are bids, but mids are all within a basis point",
"title": ""
},
{
"docid": "6ab77689a3736559dc6bcc1147836b43",
"text": "Please use the sharing tools found via the email icon at the top of articles. Copying articles to share with others is a breach of FT.com T&Cs and Copyright Policy. Email licensing@ft.com to buy additional rights. Subscribers may share up to 10 or 20 articles per month using the gift article service. More information can be found at https://www.ft.com/tour. https://www.ft.com/content/23ab8a02-5787-11e7-80b6-9bfa4c1f83d2?mhq5j=e1 By continuing to use this site you consent to the use of cookies on your device as described in our cookie policy unless you have disabled them. You can change your cookie settings at any time but parts of our site will not function correctly without them. Dismiss cookie message Accessibility helpSkip to navigationSkip to contentSkip to footer Financial Times MYFT HOME WORLD UK COMPANIES MARKETS OPINION WORK & CAREERS LIFE & ARTS Portfolio My Account HOME WORLD UK COMPANIES MARKETS OPINION WORK & CAREERS LIFE & ARTS MYFT Bank stress tests Add to myFT US banks pass first round of annual stress tests Clean bill of health from Federal Reserve opens door to increased shareholder payouts Read next Week in Review Week in Review, July 1 © AFP Share on Twitter (opens new window) Share on Facebook (opens new window) Share on LinkedIn (opens new window) Email4 Save JUNE 22, 2017 by: Alistair Gray and Ben McLannahan in New York and Barney Jopson in Washington US banks have big enough capital buffers to keep trading through an economic meltdown, regulators said on Thursday, in a finding that improves their chances of boosting payouts to shareholders. In the first round of this year’s stress tests, the Federal Reserve probed how 34 banks would fare in a financial and economic slump in which the unemployment rate doubles and the stock market loses half its value. The central bank calculated that the banking sector would endure $493bn in losses in the simulated downturn. Yet officials concluded that the banks would emerge from the crash “well capitalised”, with cushions of shareholder funding still above the Fed’s minimum required levels. The largely upbeat results augur well for US banks as the Fed prepares to unveil the results of the tests’ second round next week, when investors will learn how much capital they can return through dividends and share buybacks. However, the figures released on Thursday do not foretell what the Fed will say about payouts, not least because regulators can approve or block US banks’ capital plans on qualitative as well as quantitative grounds. Lex Bank stress tests: chilled The once-vital check on the industry’s health is outliving its usefulness UBS analysts estimate that the four biggest by assets — JPMorgan, Bank of America, Citigroup and Wells Fargo — will be able to return a net $59.8bn this year, rising to $72.3bn in 2018. Citi and Morgan Stanley could be among about a dozen banks that will make requests to return more than 100 per cent of their annual earnings to shareholders, according to Goldman Sachs analysts. Despite the positive stress test results, not all investors would be comfortable with such a bonanza. Bill Hines, a fixed-income investment manager at Aberdeen Asset Management in Philadelphia, said the prospect of payouts in excess of profits “does scare us a little bit”. “If the safety blanket is pulled away . . . that may come to the detriment of capital and safety.” Across-the-board passes for the stress-test are “a good thing,” he said, as it shows that banks have rebuilt capital levels substantially since the crisis. “But from a creditor’s standpoint you don’t want to see all the profits go out the door.” While banks have already told the Fed what they propose to do on dividends and buybacks, they are now able to make more conservative payout plans if, based on the first-round results, they think it will reject them in the second round. Related article Regulators back Trump on looser financial rules Officials endorse Volcker rule revamp and bank relief from burden of ‘stress tests’ The regulator’s simulated downturn lasts for nine quarters. Banks’ overall loan losses and declines in capital under the worst crisis scenario were smaller than in last year’s stress tests, Fed officials said. Still, the test found that some banks would come close to breaching regulatory minimums during the meltdown on some metrics. For instance, Morgan Stanley’s “supplementary leverage ratio” — a new measure of financial strength that takes effect in 2018 — would drop as low as 3.8 per cent compared with a required level of 3 per cent. The results also drew attention to banks’ exposure to credit card lending. The Fed found banks would suffer the biggest losses in their card portfolios in the hypothetical crisis. Fed officials said that partly reflected a rapid expansion in the size of banks’ credit card assets and rising delinquency rates in the real world. Copyright The Financial Times Limited 2017. All rights reserved. You may share using our article tools. Please don't copy articles from FT.com and redistribute by email or post to the web. Share on Twitter (opens new window) Share on Facebook (opens new window) Share on LinkedIn (opens new window) Email4 Save Latest on Bank stress tests Week in Review Week in Review, July 1 Fed stress tests give $1.6bn boost to Buffett Fed gives nod to ‘payout party time’ for banks Lex US banks: feeling special Premium Stress tests clear big US banks for $100bn payout Read latest Week in Review Week in Review, July 1 Latest on Bank stress tests Add to myFT Week in Review Week in Review, July 1 US banks pass test; Google, Takata, Fox and M&A also in the news Banks Fed stress tests give $1.6bn boost to Buffett Investor is one of the largest holders of US bank stocks and will reap big dividends Analysis Bank stress tests Fed gives nod to ‘payout party time’ for banks Buybacks and dividends set to soar after industry passes latest stress test Latest in Banks Add to myFT Central Banks BoE successfully tests new payment method ‘Interledger’ programme synchronises transactions between two central banks 3 HOURS AGO US banks US consumers set to be given power to sue banks Financial institutions express fury at CFPB proposal that could spur class actions UK banks BoE warns UK banks on accounting practices PRA chief Sam Woods says lenders should ‘expect questions’ on balance sheet trickery Follow the topics mentioned in this article JPMorgan Chase & Co. Add to myFT Companies Add to myFT Banks Add to myFT Wells Fargo Add to myFT Citigroup, Inc. Add to myFT Follow the authors of this article Barney Jopson Add to myFT Alistair Gray Add to myFT Take a tour of myFT Support View Site Tips Feedback Help Centre About Us Accessibility Legal & Privacy Terms & Conditions Privacy Cookies Copyright Slavery Statement Services FT Live Share News Tips Securely Individual Subscriptions Group Subscriptions Republishing Contracts & Tenders Analysts Research Executive Job Search Advertise with the FT Follow the FT on Twitter Ebooks UK Secondary Schools Tools Portfolio Today's Newspaper (ePaper) Alerts Hub Lexicon MBA Rankings Economic Calendar News feed Newsletters Currency Converter More from the FT Group Markets data delayed by at least 15 minutes. © THE FINANCIAL TIMES LTD 2017. FT and ‘Financial Times’ are trademarks of The Financial Times Ltd. 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"title": ""
},
{
"docid": "949551126783dc387e3ca4d8f8389f3b",
"text": "What you want is the distribution yield, which is 2.65. You can see the yield on FT as well, which is listed as 2.64. The difference between the 2 values is likely to be due to different dates of updates. http://funds.ft.com/uk/Tearsheet/Summary?s=CORP:LSE:USD",
"title": ""
},
{
"docid": "ed60840adabb35f50fbe3ecac6904235",
"text": "\"What you're looking for are either FX Forwards or FX Futures. These products are traded differently but they are basically the same thing -- agreements to deliver currency at a defined exchange rate at a future time. Almost every large venue or bank will transact forwards, when the counterparty (you or your broker) has sufficient trust and credit for the settlement risk, but the typical duration is less than a year though some will do a single-digit multi-year forward on a custom basis. Then again, all forwards are considered custom contracts. You'll also need to know that forwards are done on currency pairs, so you'll need to pick the currency to pair your NOK against. Most likely you'll want EUR/NOK simply for the larger liquidity of that pair over other possible pairs. A quote on a forward will usually just be known by the standard currency pair ticker with a settlement date different from spot. E.g. \"\"EUR/NOK 12M\"\" for the 12 month settlement. Futures, on the other hand, are exchange traded and more standardized. The vast majority through the CME (Chicago Mercantile Exchange). Your broker will need access to one of these exchanges and you simply need to \"\"qualify\"\" for futures trading (process depends on your broker). Futures generally have highest liquidity for the next \"\"IMM\"\" expiration (quarterly expiration on well known standard dates), but I believe they're defined for more years out than forwards. At one FX desk I've knowledge of, they had 6 years worth of quarterly expirations in their system at any one time. Futures are generally known by a ticker composed of a \"\"globex\"\" or \"\"cme\"\" code for the currency concatenated with another code representing the expiration. For example, \"\"NOKH6\"\" is 'NOK' for Norwegian Krone, 'H' for March, and '6' for the nearest future date's year that ends in '6' (i.e. 2016). Note that you'll be legally liable to deliver the contracted size of Krone if you hold through expiration! So the common trade is to hold the future, and net out just before expiration when the price more accurately reflects the current spot market.\"",
"title": ""
},
{
"docid": "c6608fe20149388b7b6e8d705c69432f",
"text": "Here are some pretty big name news agencies which have a section dedicated to commodities: CNN Bloomberg Reuters",
"title": ""
},
{
"docid": "dfd8a1a50537d16df5f1e082ddfefc2d",
"text": "I'm answering in a perspective of an End-User within the United Kingdom. Most stockbrokers won't provide Real-time information without 'Level 2' access, however this comes free for most who trade over a certain threshold. If you're like me, who trade within their ISA Holding each year, you need to look elsewhere. I personally use IG.com. They've recently began a stockbroking service, whereas this comes with realtime information etc with a paid account without any 'threshold'. Additionally, you may want to look into CFDs/Spreadbets as these, won't include the heavy 'fees' and tax liabilities that trading with stocks may bring.",
"title": ""
},
{
"docid": "c75297b62f73553ec352cda7a9fff1b6",
"text": "\"I've done exactly what you say at one of my brokers. With the restriction that I have to deposit the money in the \"\"right\"\" way, and I don't do it too often. The broker is meant to be a trading firm and not a currency exchange house after all. I usually do the exchange the opposite of you, so I do USD -> GBP, but that shouldn't make any difference. I put \"\"right\"\" in quotes not to indicate there is anything illegal going on, but to indicate the broker does put restrictions on transferring out for some forms of deposits. So the key is to not ACH the money in, nor send a check, nor bill pay it, but rather to wire it in. A wire deposit with them has no holds and no time limits on withdrawal locations. My US bank originates a wire, I trade at spot in the opposite direction of you (USD -> GBP), wait 2 days for the trade to settle, then wire the money out to my UK bank. Commissions and fees for this process are low. All told, I pay about $20 USD per xfer and get spot rates, though it does take approx 3 trading days for the whole process (assuming you don't try to wait for a target rate but rather take market rate.)\"",
"title": ""
},
{
"docid": "d1b4070ae8f86c7d172defb39f9cd1a7",
"text": "Rates are arrived at by the cumulative buying and selling on the foreign exchange market, much the same way that stock prices are arrived at. If there are more people wanting to buy dollars with euros, EUR/USD goes down. If more people want to buy euros with dollars, then EUR/USD goes up. The initial rate was about $1.18 per euro when it began trading on January 1st, 1999. It replaced the European Currency Unit at that time, which was a weighted basket of currencies of (more or less) the participating countries. You're correct about the printing press in the US and other countries. The exchange rates do reflect in part how much of a relative workout those printing presses get.",
"title": ""
},
{
"docid": "ce74473919d8ee1c40037ea199392734",
"text": "An alternative to paying thousands of dollars for historical prices by the minute: Subscribe to real time data for as low as USD$1.5/month from your broker, then browse the chart.",
"title": ""
},
{
"docid": "21cef6e11914c95fd0ec6207b10be7a6",
"text": "Yes, one such provider is: https://www.fxcompared.com/ They allow you to compare a number of foreign currency providers, and take into account all of the fees and spreads, and give you a simple number which you can use to compare them - the amount of foreign currency you get for your domestic currency.",
"title": ""
},
{
"docid": "031f7677868338ead3397e82547dabd7",
"text": "\"This is the best tl;dr I could make, [original](http://www.reuters.com/article/uk-britain-sterling-idUSKBN1AR0M9) reduced by 75%. (I'm a bot) ***** > LONDON - Sterling fell to a fresh 10-month low against the euro on Friday as investors added bearish bets against the British currency on concerns the economy may be struggling to gain momentum. > Sterling fell 0.2 percent to 90.92 pence against the euro, its lowest level since October 2016. > It has fallen for two consecutive weeks and has weakened nearly 9 percent against the euro since early May. Morgan Stanley strategists are predicting euro parity with the pound in the first quarter of 2018. ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/6thf3f/british_pound_further_down/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ \"\"Version 1.65, ~190040 tl;drs so far.\"\") | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr \"\"PM's and comments are monitored, constructive feedback is welcome.\"\") | *Top* *keywords*: **against**^#1 **since**^#2 **Sterling**^#3 **week**^#4 **euro**^#5\"",
"title": ""
}
] |
fiqa
|
6f1402300e8aef5960a027994e75cbec
|
How do I protect money above the FDIC coverage limit?
|
[
{
"docid": "0cdc97239023a6be5e41ff19ea081cc9",
"text": "If you are concerned about FDIC coverage, then yes, you can spread your money across multiple banks. The limit is $250k, so after you invest in property, 4 banks should do it. That having been said, in my opinion, it would be a waste to keep all this money in a bank's savings account. You will slowly lose value over time due to inflation. I suggest you spend a little money on an independent fee-based investment advisor. Choose someone who will teach you about investing in mutual funds, so you can feel comfortable with it. He or she should take into account your tolerance for risk, look at your goals, and help you come up with a low cost plan for investing your money. It's certainly okay to keep the money in a bank short-term, but don't wait too long; take steps toward putting that money to work for you.",
"title": ""
},
{
"docid": "4145833bd6b01dbe3f0e3a17317feb84",
"text": "Be very careful to hold on tight to your money! I agree with paying for an investment advisor, but I would say use at least two to get different viewpoints, and get credentials and references! Don't let relatives convince you to invest in their business, or help them out, or any other such nonsense. Real estate still is one of the best investments out there in my opinion. You could buy a fixer upper and rent it out?",
"title": ""
}
] |
[
{
"docid": "7cd202188772096642d33487735482d2",
"text": "Banks' savings interest is ridiculous, has always been, compared to other investment options. But there's a reason for that: its safe. You will get your money back, and the interest on it, as long as you're within the FDIC insurance limits. If you want to get more returns - you've got to take more risks. For example, that a locality you're borrowing money to will default. Has happened before, a whole county defaulted. But if you understand the risks - your calculations are correct.",
"title": ""
},
{
"docid": "c4928107daac55e5455a1f8a674e89ce",
"text": "Use other currencies, if available. I'm not familiar with the banking system in South Africa; if they haven't placed any currency freezes or restrictions, you might want to do this sooner than later. In full crises, like Russian and Ukraine, once the crisis worsened, they started limiting purchases of foreign currencies. PayPal might allow currency swaps (it implies that it does at the bottom of this page); if not, I know Uphold does. Short the currency Brokerage in the US allow us to short the US Dollar. If banks allow you to short the ZAR, you can always use that for protection. I looked at the interest rates in the ZAR to see how the central bank is offsetting this currency crisis - WOW - I'd be running, not walking toward the nearest exit. A USA analogy during the late 70s/early 80s would be Paul Volcker holding interest rates at 2.5%, thinking that would contain 10% inflation. Bitcoin Comes with significant risks itself, but if you use it as a temporary medium of exchange for swaps - like Uphold or with some bitcoin exchanges like BTC-e - you can get other currencies by converting to bitcoin then swapping for other assets. Bitcoin's strength is remitting and swapping; holding on to it is high risk. Commodities I think these are higher risk right now as part of the ZAR's problem is that it's heavily reliant on commodities. I looked at your stock market to see how well it's done, and I also see that it's done poorly too and I think the commodity bloodbath has something to do with that. If you know of any commodity that can stay stable during uncertainty, like food that doesn't expire, you can at least buy without worrying about costs rising in the future. I always joke that if hyperinflation happened in the United States, everyone would wish they lived in Utah.",
"title": ""
},
{
"docid": "3008d82e9888fe8efeffb1adc8fa887d",
"text": "As of now you are doing that. When you start earning larger sums of money, you will not withdraw and keep it in your house. You will leave it in the bank and they will earn money on it( By lending it out at a higher interest rate). When you are broke, that same bank will offer you a credit card or some other instrument that will help you survive. They will charge you money on that and make interest of you. When you have too much money and you start wiring money they will charge you a wire transfer fees. There are more than 500 ways in which banks make money off you. If you plan receiving $100 and $250 all your life and withdraw it immediately and don't plan doing anything else all your life, then you will probably not let the bank make any money off you. However, there are a very few people like that and banks barely lose anything accepting those customers.",
"title": ""
},
{
"docid": "340ac483e5d9cf583bfacf6ff5df17ad",
"text": "Everyone would like a savings/checking account that has the same liquidity as others but pays multiple times as much, but such a thing would break the laws of finance. The thing keeping savings and checking accounts cheap isn't particularly the FDIC insurance but the high liquidity and near certainty that you will not lose money. In all of finance you are compensated for the risk (and perhaps illiquidity) you bear. If you insist on a risk-free and highly liquid investment, you will get the risk-free and highly liquid rate, which is currently around 1%. Doesn't matter what type of investment it is (savings, money market, treasuries, etc.). Money market funds, in particular, were designed to be a replacement for savings accounts. They have decent liquidity and almost no risk (and no FDIC insurance). But they earn about what good savings accounts do, because that's what risk-free investments earn. If you wish to earn more you must decide what you will give up: Decide on one (or both) of those to sacrifice and you will find yourself with options.",
"title": ""
},
{
"docid": "b091e31e8741fda31dadd3131e38de74",
"text": "\"In answering your question as it's written: I don't think you're really \"\"missing\"\" something. Different banks offer different rates. Online banks, or eBanking solutions, such as CapitalOne, Ally, Barclays, etc., typically offer higher interest rates on basic savings accounts. There are differences between Money Market accounts and Standard Savings accounts, but primarily it comes down to how you can access your cash. This may vary based on bank, but Ally has a decent blurb about it: Regular savings accounts are easy to open and, when you choose an online bank like Ally Bank, you tend to get interest rates that are more competitive than brick-and-mortar counterparts, according to Bankrate.com. Additionally, as a member of the FDIC, Ally Bank gives you peace of mind knowing that the money in your Ally Bank Online Savings Account is insured to the maximum allowed by the law. Money market accounts are easy to open, too. And again, online banks may offer better rates than traditional banks. Generally, you have a bit more flexibility of access with a money market account than you do with a savings account. You can access funds in your Ally Bank Money Market Account through electronic fund transfers, checks, debit cards and ATM withdrawals. With savings accounts, your access is limited to electronic funds transfers or telephone withdrawals (and in-person withdrawals at traditional banks). Both types of accounts are subject to federal transaction limits. Here's a bit more information about a Money Market Account and why the rate might be a little bit higher (from thesimpledollar.com): A money market deposit account is a bit different. The restrictions on what a bank can do with that money are somewhat looser – they can often invest that money in things such as treasury notes, certificates of deposit, municipal bonds, and so on in addition to the tight restrictions of a normal savings accounts. In other words, the bank can take your money and invest it in other investments that are very safe. Now outside of your question, if you have $100K that you want to earn interest on, I'd suggest looking at options with higher rates of return rather than a basic savings account which will top out around 1% or so. What you do with that money is dependent on how quickly you need access to it, and there are a lot of Q&A's on this site that cover suggestions.\"",
"title": ""
},
{
"docid": "efb02741e131bbeb35fabd25c9d5edb7",
"text": "\"I have received a response from SIPC, confirming littleadv's answer: For a brief background, the protections available under the Securities Investor Protection Act (\"\"SIPA\"\"), are only available in the context of a liquidation proceeding of a SIPC member broker-dealer and relate to the \"\"custody\"\" of securities and related cash at the SIPC member broker-dealer. Thus, if a SIPC member broker-dealer were to fail at a time when a customer had securities and/or cash in the custody of the SIPC member broker-dealer, in most instances it would be SIPC's obligation to restore those securities and cash to the customer, within statutory limits. That does not mean, however, that the customer would necessarily receive the original value of his or her purchase. Rather, the customer receives the security itself and/or the value of the customer's account as of the day that the liquidation commenced. SIPC does not protect against the decline in value of any security. In a liquidation proceeding under the SIPA, SIPC may advance up to $500,000 per customer (including a $250,000 limit on cash in the account). Please note that this protection only applies to the extent that you entrust cash or securities to a U.S. SIPC member. Foreign broker dealer subsidiaries are not SIPC members. However, to the extent that any assets, including foreign securities, are being held by the U.S. broker dealer, the assets are protected by SIPC. Stocks listed on the LSE are protected by SIPC to the extent they are held with a SIPC member broker dealer, up to the statutory limit of $500,000 per customer. As I mentioned in the comments, in the case of IB, indeed they have a foreign subsidiary, which is why SIPC does not cover it (rather they are insured by Lloyds of London for such cases).\"",
"title": ""
},
{
"docid": "51863cda125d76edb58e5d99691c7392",
"text": "\"As you've observed, when you're dealing with that amount of money, you're going to have to give up FDIC guarantees. That means that keeping the money in a bank account carries some risk with it: if that particular bank goes bust, you could lose most of your money. There are a few options to stretch the FDIC limit such as CDARS, but likely can't handle your hypothetical $800 million. So, what's a lucky winner to do? There are a few options, including treasury securities, money market funds, and more general capital investments such as stocks and bonds. Which one(s) are best depend on what your goals are, and what kind of risks you find acceptable. Money in the bank has two defining characteristics: its value is very stable, and it is liquid (meaning you can spend it very easily, whenever you want, without incurring costs). Treasury securities and money market funds each focus on one of these characteristics. A treasury security is a piece of paper (or really, an electronic record) saying that the US Federal Government owes you money and when they will pay it back. They are very secure in that the government has never missed a payment, and will move heaven and earth to make sure they won't miss one in the future (even taking into account recent political history). You can buy and sell them on an open market, either through a broker or directly on the Treasury's website. The major downside of these compared to a bank account is that they're not as liquid as cash: you own specific amounts of specific kinds of securities, not just some number of dollars in an account. The government will pay you guaranteed cash on specified dates; if you need cash on different dates, you will need to sell the securities in the open market and the price will be subject to market fluctuations. The other \"\"cash-like\"\" option is money market funds. These are a type of mutual fund offered by financial companies. These funds take your money and spread it out over a wide variety of very low risk, very short term investments, with the goal of ensuring that the full value will never go down and is available at any time. They are very liquid: you can typically transfer cash quickly and easily to a normal bank account, write checks directly, and sometimes even use \"\"online bill pay\"\"-like features. They have a very good track record for stability, too, but no one is guaranteeing them against something going terribly wrong. They are lower risk than a (non-FDIC-insured) bank account, since the investments are spread out across many institutions. Beyond those two somewhat \"\"cash-like\"\" options, there are of course other, more general investments such as stocks, bonds, and real estate. These other options trade away some degree of stability, liquidity, or both, in exchange for better expected returns.\"",
"title": ""
},
{
"docid": "2b82377ee959826a6acda05cd29755c8",
"text": "\"For personal accounts, I can't imagine that this is too much of a problem. The only concern that I can think of (for American banks) is that FDIC only insures you up to $100,000 if the bank were to go belly-up. If you're getting over that amount of money, you may want to \"\"diversify\"\" a little more.\"",
"title": ""
},
{
"docid": "74607057f5ec91cdb2cec4d52f87cda5",
"text": "Tackling your last point, all banks in the EU should be covered to around €100,000. The exact figure varies slightly between countries, and generally only private deposits are covered. In the UK it's the FSCS that covers private deposits, to a value of £85,000, see this for more information on what's covered. In France (for a euro denominated example), there's coverage up to €100,000 provided by Fonds de Garantie des Dépôts, see this (in French) for full details. There's a fairly good Wikipedia Article that covers all this too. I'll let someone else chime in on the mechanics of opening something covered by the schemes though!",
"title": ""
},
{
"docid": "1e937f63f2644749f861f1b566b77e9e",
"text": "How about placing the money in a safety deposit box at the same bank? This will probably work out cheaper than the loss due to negative rates. Although, I'm quite sure the banks won't like this idea.",
"title": ""
},
{
"docid": "5dcea2a043b2b89f705cdb34fec89fe2",
"text": "\"As soon as you specify FDIC you immediately eliminate what most people would call investing. The word you use in the title \"\"Parking\"\" is really appropriate. You want to preserve the value. Therefore bank or credit union deposits into either a high yield account or a Certificate of Deposit are the way to go. Because you are not planning on a lot of transactions you should also look at some of the online only banks, of course only those with FDIC coverage. The money may need to be available over the next 2-5 years to cover college tuition If needing it for college tuition is a high probability you could consider putting some of the money in your state's 529 plan. Many states give you a tax deduction for contributions. You need to check how much is the maximum you can contribute in a year. There may be a maximum for your state. Also gift tax provisions have to be considered. You will also want to understand what is the amount you will need to cover tuition and other eligible expenses. There is a big difference between living at home and going to a state school, and going out of state. The good news is that if you have gains and you use the money for permissible expenses, the gains are tax free. Most states have a plan that becomes more conservative as the child gets closer to college, therefore the chance of losses will be low. The plan is trying to avoid having a large drop in value just a the kid hits their late teens, exactly what you are looking for.\"",
"title": ""
},
{
"docid": "b37cd94e068d80b837233720a0b96c11",
"text": "\"Losses at a brokerage firm due to fraud are insured up to $500,000 per account for securities by the SIPC (Securities Investors' Protection Corporation), which is the stock market version of the FDIC (that insures deposits). The protection amount for cash is $250,000. That's small comfort to \"\"big\"\" players in MF Global. But it does protect \"\"small\"\" investors like you.\"",
"title": ""
},
{
"docid": "4f32f7e7afc39af60c5c839369e3106a",
"text": "If you were married the 250K protection can be expanded by the use of joint and individual accounts. A separate limit also exists for IRA accounts. With out those options you will have to put some additional money into another banking institution. This could be a bank or credit union. You have to be careful to make sure that any additional accounts have FDIC or NCUA (for Credit Unions) coverage. Some banking institutions try and turn customers to non-covered accounts that are either investment accounts or use a 3rd party to protect them. You could also use it to invest in US government bonds through Treasury direct. Though for just the few months that you will be in the excess position it probably isn't worth the hassle of treasury direct.",
"title": ""
},
{
"docid": "08669eee1815b9a5e012a12507907bb9",
"text": "It depends on your situation. For families with small amounts over the FDIC limit, there's account structures that let you get multiple coverages. Things like holding 100k in an account in joint with your wife, each of you holding 100k in individual accounts etc. For larger sums and institutions, there's CDARS. This system spreads your money out to multiple institutions with an eye to FDIC insurance limits. Some people feel this system is abusing FDIC, so I suppose it's possible it gets outlawed / shut down some day. Alternatively, you can just invest it yourself. Treasury Direct allows small buyers to buy US govt bonds at finished auction rates, or submit a qualified bid at auction. You won't get great rates, but Treasuries are about as good as dollars.",
"title": ""
},
{
"docid": "a0ed194077d49ea34d04257f3a56dc3d",
"text": "Realistically, it is CDs with longer terms or are callable. You pretty much have to accept more risk if you want higher returns. If you are willing to accept that risk by losing the FDIC protections the next level up is probably high rated Government bonds.",
"title": ""
}
] |
fiqa
|
878b2b8959b4cbe93b44e0411a13322e
|
How can I make a one-time income tax-prepayment to the US Treasury?
|
[
{
"docid": "dd96b5b2a38b28fa6a4a9581dda69b19",
"text": "\"You can make estimated tax payments on Form 1040-ES. Most people who make such payments need to do it quarterly because the typical reasons for making estimated payments is something like self-employment income that a person will get throughout the year. If you have a one-time event like a single, large sale of stock, however, there's nothing wrong with doing it just one quarter out of the year. When it comes time to file your taxes, part of the calculate is whether you were timely quarter-by-quarter not just for the entire year, so if you do have a big \"\"one-time\"\" event mid-year, don't wait until the end of the year to file an estimated payment. Of course, if the event is at the end of the year, then you can make it a 4th quarter estimated payment.\"",
"title": ""
}
] |
[
{
"docid": "7156a9fde48c1a3aec096bab435c99e9",
"text": "Yes, you can do what you are contemplating doing, and it works quite well. Just don't get the university's payroll office too riled by going in each June, July, August and September to adjust your payroll withholding! Do it at the end of the summer when perhaps most of your contract income for the year has already been received and you have a fairly good estimate for what your tax bill will be for the coming year. Don't forget to include Social Security and Medicare taxes (both employee's share as well as employer's share) on your contract income in estimating the tax due. The nice thing about paying estimated taxes via payroll deduction is that all that tax money can be counted as having been paid in four equal and timely quarterly payments of estimated tax, regardless of when the money was actually withheld from your university paycheck. You could (if you wanted to, and had a fat salary from the university, heh heh) have all the tax due on your contract income withheld from just your last paycheck of the year! But whether you increase the withholding in August or in December, do remember to change it back after the last paycheck of the year has been received so that next year's withholding starts out at a more mellow pace.",
"title": ""
},
{
"docid": "0f0b2c79bb09d455414ec58c07ec0f51",
"text": "\"Yes, it is, but first let me address this sentence: my current withholding on my W4 is already at 0 so I can't make it lower You definitely can make it lower. On W4, in addition to the allowances (that what you meant by \"\"already at 0\"\"), there's also a line called \"\"additional withholding\"\". There, you put the dollar amount that you want your payroll to withhold from your paycheck each pay period. So the easiest way to \"\"send\"\" a one time payment to the IRS, if you're a W2 employee, would be to adjust that line with the amount you want to send, and change it back to 0 next pay period. You can also send a check directly to the IRS - follow the instructions to form 1040-ES. That is exactly what that form is designed to be used for.\"",
"title": ""
},
{
"docid": "3fe97da3da12776e31cfb58e16e57f81",
"text": "\"It's likely you don't have to make estimated tax payments if this is your first year of contracting (extra income), and your existing salary is already having taxes withheld. If you look at the 1040-ES: General Rule In most cases, you must pay estimated tax for 2014 if both of the following apply. This is easier to understand if you look at the worksheet. Look at line 14b/14c and the associated instructions. 14b is your required annual payment based on last year's tax. 14c is the lesser of that number and 14a, so 14b is your \"\"worst case\"\". 14c is the amount of tax you need to prepay (withholding counts as prepayment). I'm going to apply this to your situation based on my understanding, because it's not easy to parse:\"",
"title": ""
},
{
"docid": "28e724bb8a999cbde510325dd4f5afad",
"text": "\"The pure numbers answer says you want the refund to be close to $0. You can even argue, as some answers have, that you want to try to maximize the payment without receiving any sanctions for underpaying during the year. If you trace the money, it's easy to see why. Let's say you get a paycheck. Tag some of the dollars for Uncle Sam. These are the dollars that, eventually, will be given to the IRS. Now consider the following scenarios: From the raw numbers like this, its clear that you lose utility by setting yourself up for a large refund check. The money was yours the entire time, but you chose to give it to Uncle Sam instead. However, the raw numbers are only part of the puzzle. If you're a cold steely-gazed numbers person, they're the part that matters. When the billionares are playing their tax evasion games, this is the only thing they are paying attention to. However, real humans have a few psychological reasons they may choose to lose utility in terms of raw dollars in exchange for psychological assistance: These attitudes exist, and may be ideal for any one person. Obviously the financially savvy answer of \"\"minimize your refund\"\" is the ideal answer from a dollars and cents perspective, but its up to you to see whether that attitude is right when you account for all of the non-measurable things, like stress. In general, I would lead anyone to \"\"minimize your refund,\"\" but I would be remiss if I didn't include the very real psychological reasons people choose to deviate from it.\"",
"title": ""
},
{
"docid": "e14cb4c06d785d9ab927ff0914196dcc",
"text": "This is wrong. It should be or Now, to get back to self-employment tax. Self-employment tax is weird. It's a business tax. From the IRS perspective, any self-employed person is a business. So, take your income X and divide by 1.0765 (6.2% Social Security and 1.45% Medicare). This gives your personal income. Now, to calculate the tax that you have to pay, multiply that by .153 (since you have to pay both the worker and employer shares of the tax). So new calculation or they actually let you do which is better for you (smaller). And your other calculations change apace. And like I said, you can simplify Q1se to and your payment would be Now, to get to the second quarter. Like I said, I'd calculate the income through the second quarter. So recalculate A based on your new numbers and use that to calculate Q2i. or Note that this includes income from both the first and second quarters. We'll reduce to just the second quarter later. This also has you paying for all of June even though you may not have been paid when you make the withholding payment. That's what they want you to do. But we aren't done yet. Your actual payment should be or Because Q2ft and Q2se are what you owe for the year so far. Q1ft + Q1se is what you've already paid. So you subtract those from what you need to pay in the second quarter. In future quarters, this would be All that said, don't stress about it. As a practical matter, so long as you don't owe $1000 or more when you file your actual tax return, they aren't going to care. So just make sure that your total payments match by the payment you make January 15th. I'm not going to try to calculate for the state. For one thing, I don't know if your state uses Q1i or Q1pi as its base. Different states may have different rules on that. If you can't figure it out, just use Q1i, as that's the bigger one. Fix it when you file your annual return. The difference in withholding is going to be relatively small anyway, less than 1% of your income.",
"title": ""
},
{
"docid": "51b98857496db91ad880cc721db0c57c",
"text": "\"That's a very clear explanation, thanks! So a few additional things if anyone will humor my curiosity... 1. By \"\"one-time\"\" tax, does that mean a company that has, say, $5B overseas could bring that back into the US and just be taxed $500M, then keep the remaining $4.5B? 2. Could a company choose a percentage of their overseas money to transfer into the US? Like, only bring in 8% of that $5B ($400M) and be taxed $40M, while keeping all the rest outside the US? Or would it be mandatory to bring it all over? 3. Would most companies just start that same practice of routing to tax havens again after this tax is implented?\"",
"title": ""
},
{
"docid": "bd6eecc9738b213f4a0e3ccc7411900f",
"text": "You have two different operations going on: They each have of a set of rules regarding amounts, timelines, taxes, and penalties. The excess money can't be recharacterized except during a specific window of time. I would see a tax professional to work through all the details.",
"title": ""
},
{
"docid": "ea582ead73b55789e8dd68ef14643254",
"text": "I don't believe you can do that. From the IRS: Finally, certain types of property are specifically excluded from Section 1031 treatment. Section 1031 does not apply to exchanges of: I highlighted the relevant items for emphasis.",
"title": ""
},
{
"docid": "7195053464f2555973061c1a472f0ed3",
"text": "You should probably get a professional tax advice, as it is very specific to the Philipines tax laws and the US-Philippine tax treaty. What I know, however, is that if it was the other way around - you paying a foreigner coming to the US to consult you - you would be withholding 30% of their pay for the IRS which they would be claiming for refund on their own later. So if the US does it to others - I'm not surprised to hear that others do it to the US. Get a professional advice on what and how you should be doing. In any case, foreign taxes paid can be used to offset your US taxes using form 1116 up to some extent.",
"title": ""
},
{
"docid": "a41026f655a49f32a9b2a065fe080f00",
"text": "\"You can simply use the previous year's tax liability as your basis for payments. Take the amount of tax you owed the previous year, divide by four, and use that amount for your estimated payments. As long as you're paying 100% of what you owed last year, you won't have any penalty. Except if your AGI is above a certain limit ($150k for married filing jointly in 2011), then you have to pay 110%. See IRS Pub 505 for details (general rule, special rule, under \"\"Higher Income Taxpayers\"\"). (H/T to @Dilip Sarwate for pointing out the 110% exception in a comment below.)\"",
"title": ""
},
{
"docid": "278761b17fa57982144a46c66491ce57",
"text": "Like-kind of exchanges have a list of requirements. The IRS has not issued formal guidance in the matter. I recommend to be aggressive and claim the exchange, while justifying it with a good analogy to prove good faith (and persuade the IRS official reading it the risk of losing in tax court would be to high). Worst case the IRS will attempt to reject the exchange, at which point you could still pony up to get rid of the problem, interest being the only real risk. For example: Past tax court rulings have stated that collectable gold coins are not like kind to gold bars, and unlike silver coins, but investment grade gold coins are like kind to gold bars. So you could use a justification like this: I hold Bitcoin to be like-kind to Litecoin, because they use the same fundamental technology with just a tweak in the math, as if exchanging different grades of gold bars, which has been approved by tax court ruling #xxxxx. Note that it doesn't matter whether any of this actually makes sense, it just has be reasonable enough for you to believe, and look like it is not worth pursuing to an overworked IRS official glancing at it. I haven't tried this yet, so up to now this is a guess, but it's a good enough guess in my estimation that I will be using it on some rather significant amounts next year.",
"title": ""
},
{
"docid": "ca45fdfb71adf33769492b71c096b555",
"text": "There is a shortcut you can use when calculating federal estimated taxes. Some states may allow the same type of estimation, but I know at least one (my own--Illinois) that does not. The shortcut: you can completely base your estimated taxes for this year on last year's tax return and avoid any underpayment penalty. A quick summary can be found here (emphasis mine): If your prior year Adjusted Gross Income was $150,000 or less, then you can avoid a penalty if you pay either 90 percent of this year's income tax liability or 100 percent of your income tax liability from last year (dividing what you paid last year into four quarterly payments). This rule helps if you have a big spike in income one year, say, because you sell an investment for a huge gain or win the lottery. If wage withholding for the year equals the amount of tax you owed in the previous year, then you wouldn't need to pay estimated taxes, no matter how much extra tax you owe on your windfall. Note that this does not mean you will not owe money when you file your return next April; this shortcut ensures that you pay at least the minimum allowed to avoid penalty. You can see this for yourself by filling out the worksheet on form 1040ES. Line 14a is what your expected tax this year will be, based on your estimated income. Line 14b is your total tax from last year, possibly with some other modifications. Line 14c then asks you to take the lesser of the two numbers. So even if your expected tax this year is one million dollars, you can still base your estimated payments on last year's tax.",
"title": ""
},
{
"docid": "62be4077a8b5f99137d2c3ca9b8a3ae0",
"text": "You have made a good start because you are looking at your options. Because you know that if you do nothing you will have a big tax bill in April 2017, you want to make sure that you avoid the underpayment penalty. One way to avoid it is to make estimated payments. But even if you do that you could still make a mistake and overpay or underpay. I think the easiest way to handle it is to reach the safe harbor. If your withholding from your regular jobs and any estimated taxes you pay in 2016 equal or exceed your total taxes for 2015, then even if you owe a lot in April 2017 you can avoid the underpayment penalty. If you AGI is over 150K you have to make sure your withholding is 110% of your 2015 taxes. Then set aside what you think you will owe in your bank account until you have to pay your taxes in April 2017. You only have to adjust your withholding to make the safe harbor. You can make sure easily enough once your file this years taxes. You only have to make sure that you reach the 100% or 110% threshold. From IRS PUB 17 Who Must Pay Estimated Tax If you owe additional tax for 2015, you may have to pay estimated tax for 2016. You can use the following general rule as a guide during the year to see if you will have enough withholding, or if you should increase your withholding or make estimated tax payments. General rule. In most cases, you must pay estimated tax for 2016 if both of the following apply. You expect to owe at least $1,000 in tax for 2016, after subtracting your withholding and refundable credits. You expect your withholding plus your refundable credits to be less than the smaller of: a. 90% of the tax to be shown on your 2016 tax return, or b. 100% of the tax shown on your 2015 tax return (but see Special rules for farmers, fishermen, and higher income taxpayers , later). Your 2015 tax return must cover all 12 months. Reminders Estimated tax safe harbor for higher income taxpayers. If your 2015 adjusted gross income was more than $150,000 ($75,000 if you are married filing a separate return), you must pay the smaller of 90% of your expected tax for 2016 or 110% of the tax shown on your 2015 return to avoid an estimated tax penalty.",
"title": ""
},
{
"docid": "bc9c200f6660dd9981ab887eb936190c",
"text": "I think the IRS doc you want is http://www.irs.gov/publications/p550/ch04.html#en_US_2010_publink100010601 I believe the answers are:",
"title": ""
},
{
"docid": "7e974e9c76ecdd9f3ffe8704ae2d3f48",
"text": "\"How can I avoid this, so we are taxed as if we are making the $60k/yr that we want to receive? You can't. In the US the income is taxed when received, not when used. If you receive 1M this year, taking out 60K doesn't mean the other 940K \"\"weren't received\"\". They were, and are taxable. Create a pension fund in the corporation, feed it all profits, and pay out $60k/yr of \"\"pension\"\". I doubt that the corporation could deduct a million a year in pension funding. You cannot do that. You can only deposit to a pension plan up to 100% of your salary, and no more than $50K total (maybe a little more this year, its adjusted to inflation). Buy a million dollars in \"\"business equipment\"\" of some sort each year to get a deduction, then sell it over time to fund a $60k/yr salary. I doubt such a vehicle exists. If there's no real business purpose, it will be disallowed and you'll be penalized. Your only purpose is tax avoidance, meaning you're trying to shift income using your business to avoid paying taxes - that's illegal. Do crazy Section 79 life insurance schemes to tax-defer the income. The law caps this so I can only deduct < $100k of the $1 million annually, and there are other problems with this approach.\\ Yes. Wouldn't go there. Added: From what I understand, this is a term life insurance plan sponsored by the employer for the employee. This is not a deferral of income, but rather a deduction: instead of paying your term life insurance with your own after tax money, your employer pays with their pre-tax. It has a limit of $50K per employee, and is only available for employees. There are non-discrimination limitations that may affect your ability to use it, but I don't see how it is at all helpful for you. It gives you a deduction, but its money spent, not money in your pocket. End added. Do some tax avoidance like Facebook does with its Double Irish trick, storing the income in some foreign subsidiary and drawing $60k/yr in salary to be taxed at $60k/yr rates. This is probably cost-prohibitive for a $1MM/yr company. You're not Facebook. What works with a billion, will not work with a million. Keep in mind that you're a one-man business, things that huge corporations like Google or Facebook can get away with are a no-no for a sole-proprietor (even if incorporated). Bottom line you'll probably have to pay the taxes. Get a good tax professional to help you identify as much deductions as possible, and if you can plan income ahead - plan it better.\"",
"title": ""
}
] |
fiqa
|
de154b63db5588f22cc781abb12f9602
|
Is there a lower threshold for new EU VAT changes coming 1 Jan 2015 related to the sale of digital goods?
|
[
{
"docid": "6d86152de1bf6104a9ebc37caf241de7",
"text": "Been digging through all the EU VAT directives and have called HMRC as well.. There does not seem to be any lower threshhold for charging VAT into the EU. If you sell £10 of goods/services you have to charge VAT and file a VAT return. Your options are: 1) Register for MOSS and file a single VAT return in your home country for all countries. In the UK this means that you also have to be VAT registered and have to charge VAT locally as well - even if you are below the UK threshold. 2) Register and file a VAT return in every EU country you sell into. You also have to apply the correct VAT rate for each country (typically 15% to 27%), and you have to keep at least two pieces of evidence for the customer location. eg. billing address, IP address, etc.",
"title": ""
}
] |
[
{
"docid": "25faa7c6670f215322dfd94af6b78455",
"text": "Note: I am not a lawyer. This is my personal opinion and interpretation. First, your source is European Law, which obviously doesn't apply outside of the EU. The EU cannot make laws that bind entities in other countries; so you cannot claim that the VAT was needed to be mentioned. Second, if you owe something, you owe it; it doesn't matter if it was forgotten to be mentioned. At best, you can say that under those circumstances you don't want the software anymore, and i would assume you can send it back and get your money back (minus a fee for having it used for a while...) - this gets quite difficult to calculate clearly, so it's probably not a good avenue to follow for you. As the company has to send the VAT to your country (they will not be allowed to keep a dime of it, and have to bear the complete cost for the handling), it is a debt you have to your government; they are just the entity responsible for collecting it. Still, if you just ignore them, they will probably suck it up, and your government will also not do a thing to you. If they only have your email address, they have no way of knowing if you even still have/use this address; for all they know, it could be you never got it. They also cannot simply charge your card, as they probably don't have the card data any more (they are not supposed to keep it after the transaction is complete, and they thought it was complete at the time). All in all, you should be safe to ignore it. It's between you and your god/consciousness, if you feel obliged to pay it, as technically you owe it.",
"title": ""
},
{
"docid": "3e22751def8b89bb10e4d0bed0c140c5",
"text": "\"In June 2016 the American Institute of CPAs sent a letter to the IRS requesting guidance on this question. Quoting from section 4 of this letter, which is available at https://www.aicpa.org/advocacy/tax/downloadabledocuments/aicpa-comment-letter-on-notice-2014-21-virtual-currency-6-10-16.pdf If the IRS believes any property transaction rules should apply differently to virtual currency than to other types of property, taxpayers will need additional guidance in order to properly distinguish the rules and regulations. Section 4, Q&A-1 of Notice 2014-21 states that “general tax principles applicable to property transactions apply to transactions using virtual currency,” which is guidance that is generally helpful in determining the tax consequences of most virtual currency transactions. However, if there are particular factors that distinguish one virtual currency as like-kind to another virtual currency for section 1031 purposes, the IRS should clarify these details (e.g., allowing the treatment of virtual currency held for investment or business as like-kind to another virtual currency) in the form of published guidance. Similarly, taxpayers need specific guidance of special rules or statutory interpretations if the IRS determines that the installment method of section 453 is applied differently for virtual currency than for other types of property. So, at the very least, a peer-reviewed committee of CPAs finds like-kind treatment to have possible grounds for allowance. I would disagree with calling this a \"\"loophole,\"\" however (edit: at least from the viewpoint of the taxpayer.) At a base technological level, a virtual currency-to-virtual currency exchange consists of exchanging knowledge of one sequence of binary digits (private key) for another. What could be more \"\"like-kind\"\" than this?\"",
"title": ""
},
{
"docid": "f35f977f4958bf5092e2f8145f753a2f",
"text": "Australian Goods and Services Tax is charged on the sale amount. Whatever internal accounting you do before billing the customer is of no interest to the Australian Tax Office.",
"title": ""
},
{
"docid": "1f9145774a035dbf3b2073b0cdaef967",
"text": "The way I see it, corporation tax is not fundamentally different from VAT. They are both a tax on revenue minus expenses, just what those expenses are is different. I think the main advantage of corporation tax is that it allows capital expenditure to be spread over several years, although as I said this makes it more complicated (and I believe that there are some capital allowances for VAT as well). One advantage of VAT is that sales in one country are taxed in that country before the money can be sent abroad. It seems simple and fair to split the tax burden between jurisdictions according to how many sales were made in each.",
"title": ""
},
{
"docid": "67fe623c1bd326a05f16c1beb2e452db",
"text": "In the EU prices on consumer-focussed sites* are quoted inclusive of VAT. In the USA prices are quoted exclusive of sales tax. Consumer pricing is usually driven at least partly by psychological concerns. Some pricepoints are more appealing to certain types of buyers than others. The Euro vs dollar exchange rate has fluctuated a bit over the years but it's generally averaged somewhere around 1.2 dollars per Euro over the last decade. VAT has varied around 15%-20% in most cases. Put these things together and the same headline price points are generally appropriate in both the USA and the Eurozone. OTOH the Brisith pound has been worth substantially more than the dollar or the Euro. So it makes sense to have a lower headline price in the UK. * B2B focussed sites often quote prices exclusive of VAT, you need to be aware of this when comparing prices.",
"title": ""
},
{
"docid": "6af2d7c818f1572b426e4c57f8e217fe",
"text": "\"11 / 111 / 11111 looks like the (old) tax number: it is used by the tax office to know who you are, it isn't good at all for the spanish company. It would even change when you move inside Germany. VAT IDs are not exclusive to GmbHs (but a GmbH always has one). As freelancers you can get at VAT ID but you don't always have to. The tax office offers a \"\"small business\"\" treatment (§ 19 UStG) for freelancers, kind of an opt-out for the VAT ID. As you do not have a VAT ID, this is probably your case. It means So what to do? If I were you, I'd write them that according to §19 UStG and the European Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, TITLE XII CHAPTER 1 \"\"Special scheme for small enterprises\"\" you were not assigned a VAT ID, and VAT is not applicable to your bill. The fact that VAT is not applicable in this case does not mean that they are allowed to refuse payment. I heard a rumour (but don't really know) that a number similar to the VAT ID is planned also for freelancers (Wirtschafts-IDNr.). You could go to your tax office and ask them about. Maybe that yields a number that satisfies spanish burocracy. AFAIK, you can go to your tax office and ask them to give you a real VAT number. But careful: that has the serious drawback that you have to do do an advance VAT estimate and pay that to the tax office at least quarterly (for bigger business monthly). And (AFAIK) you are not allowed to change back to the small business treatment for several years.\"",
"title": ""
},
{
"docid": "eafe19575c9337cfa63e45572f1e32ba",
"text": "Huh. It appears it's only currencies in sterling that are fully exempt. https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg12602 Government manuals are more detailed than .gov but still not perfect as it's HMRCs interpretation of legislation and has been overturned in the past. There is also another (old) article here about foreign currency transactions. https://www.taxation.co.uk/articles/2010/10/27/21191/currency-gains I have never come across forex capital gains in practice but I've learnt something today! Something to look out for in the UK as well I guess.",
"title": ""
},
{
"docid": "26ff4efdbe492785428bc757d31d8103",
"text": "I don't know how taxes work in Israel, but I imagine it is relatively similar to taxes in the US. In the US you need to pay taxes on investment earnings when you sell them or in this case trade them for something of value. The amount that would typically would be taxed on would be the difference between how much you paid for the currency and the value of the item you traded it for. In theory there shouldn't be any difference in trading bitcoins versus dollars or euros. Reality is that they are rather weird and I don't know what category they would fall into. Are they a currency or a collectors item? I think this is all rather hypothetical because there is no way for any government to track digital currencies and any taxes paid would be based on the honor system. I am not an account and the preceding was not tax advice...",
"title": ""
},
{
"docid": "52c37975b2fc9a9e21d3d7303997bbcc",
"text": "All this speculation and no one really has the right idea what's going on. It has almost nothing to do with VAT and nothing to do compliance. [It has everything to do with a very a chronically weak Euro.](https://www.google.com/finance?client=safari&rls=en&q=eur&oe=UTF-8&um=1&ie=UTF-8&sa=N&tab=we) Apps in the App Store are tied to tiers. My app sells at tier 10. For USD, this means I sell my app for $10 and make $7 after their cut. Tier 10 used to translate to 7,99€. Now it's 8,99€. This means before the hike I, as an American, would get 4,79€ or $6.19 after the exchange. This wasn't a problem back when the app store opened. The economy was relatively strong and the Euro stood around 1.5 to one American dollar. This means in 2008 I'd get about the same $7 after the conversion. With the Euro crisis, the tiers remained the same which meant each European sale only netted around $5.75, a $1.25 discount for each European. The Euro conversion was a long standing issue and the price hike restores the exchange back to the $7 dollars it used to be.",
"title": ""
},
{
"docid": "f1ee18a46281f5e2f00434b944a1f564",
"text": "So isn't this a success? It was implemented by taxation teams to ensure that non taxable transactions could no longer occur, and now they aren't. On the corruption side, everything is electronic and traceable now. Sounds like it is working as intended.",
"title": ""
},
{
"docid": "4bb02012bad3dddacdc41b24f133285a",
"text": "Assuming this to be in the UK, and I suspect the rules are similar elsewhere, this indeed may be true. There is a threshold beneath which a business does not have to register for VAT - currently a turnover of £81,000. A non VAT registered business does not charge VAT but also cannot reclaim the VAT on their business expenses. For some businesses below the threshold it is worthwhile registering because the amount they can reclaim is significant. However, there are also many small businesses that do a lot of cash only jobs so as to not put the money through the books and therefore avoid any tax liability. There are also many who will get the the customer to buy materials direct to avoid including these in their turnover. Like every type of tax rule there is a grey area between people trying to avoid paying more tax than is needed and dodgy deals to avoid paying their fair share of tax.",
"title": ""
},
{
"docid": "6b590adfbf41f34aee714780ff043bb5",
"text": "Some items are VAT Exempt or Reduced, but in short you will pay it on almost any all consumer goods. Assuming you are a visitor to the UK from a non-EU nation then Her Majesty will refund you with the appropriate paperwork",
"title": ""
},
{
"docid": "a2e36eedaf3e9d2f52ffb4c0bd75a800",
"text": "(1) Should I register for VAT? – If it is below the threshold amount it is purely voluntary. If you register for VAT, you would have to charge VAT and then do returns every quarter. If you can take up this bit of hassle, it doesn't make much of a difference. One thing you need to consider: you get 1% discount during your first year of registering for VAT. If you want to save this discount for when you really need to pay VAT, it could be helpful. (2) What benefits would registering for VAT include? – Except for reclaiming VAT, where you pay VAT for business expenses, not much. (3) Would I not just hold onto the monies for HMRC ? – You wouldn't hold any money for HMRC. They will send you notifications if you do not file your returns and pay your VAT quarterly. And get everything cleared from your accountant. If your accountant doesn't answer properly, make it clear you need proper answers. Else change your accountant. If you do something wrong and HMRC gets after you, you would be held liable – your accountant can take the slip if you signed on all business documents provided by your accountant.",
"title": ""
},
{
"docid": "472b1c3431cd2096d17855cf59342fd4",
"text": "\"I'm thinking about visiting the UK and I'm wondering which things are affected by the VAT and which are not. Most consumer goods are subject to VAT at the standard rate. Most food sold in shops is zero-rated, with the exception of a handful of luxury foods. Food in cafes/restaurants and some takeaway food is subject to VAT at the standard rate. Most paper books are zero rated (IIRC books that come with CDs are an exception). Some services are exempt, insurance is a notable one, so are some transactions with charities. Some small buisnesses and sole traders may not be VAT registered in which case there is no VAT for you to pay (but they can't reclaim VAT on the goods and services they buy). (there is a distinction between zero-rated and exempt but it's not relavent to you as a customer). Some goods have special rules, notably second hand goods. Prices are normally given inclusive of VAT. The exception to this is suppliers who mostly deal in business to business transactions. Also as a non-UK resident is there a way to get a rebate/reimbursement on this tax? There is something called the \"\"retail export scheme\"\" which can get you a refund but there are a number of catches.\"",
"title": ""
},
{
"docid": "aa0af11b5c6e1591cfa75e3f1c01b9a5",
"text": "This might be useful http://ec.europa.eu/taxation_customs/individuals/cash-controls_en As far as I am aware there should be no issues with anything below 10000. But anything after that you have to declare.",
"title": ""
}
] |
fiqa
|
644367ad873791a363ea0223e75febfe
|
In the USA, why is the Free File software only available for people earning less than $62k?
|
[
{
"docid": "8d0726e7822140462fdaf8646b5ac184",
"text": "\"It is very helpful to understand that Free File is not actually \"\"by\"\" the US Internal Revenue Service (IRS). The IRS does indeed offer access to the program through their website, but Free File is actually a public-private partnership program operated and maintained by the Free File Alliance. Who is the Free File Alliance? Well, according to their members list: 1040NOW Corp., Drake Enterprises, ezTaxReturn.com, FileYourTaxes, Free Tax Returns, H&R Block, Intuit, Jackson Hewitt, Liberty Tax, OnLine Taxes, TaxACT, TaxHawk, and TaxSlayer. Why the income restriction? Well, that's part of the deal the IRS struck - the program is \"\"dedicated to helping 70 percent of American taxpayers prepare and e-file their federal tax returns\"\". Technically the member companies are offering their own software to handle tax preparation, and the rule is that 70% of American's must 'qualify' for at least one product, so this adjusted gross income limit changes periodically so that 70% of the population can use it. Why restrict it at all? This was part of the give and take involved in negotiation with the businesses involved. If the program was \"\"everyone files for free\"\", then it is presumed that many reputable businesses that make the program valuable would choose not to continue to participate. In other words, they want to be able to not give away their services for free to customers who are - at least by income definition - more than capable of paying them. The IRS has said it does not want to be in the tax prep software business, so they are not offering their own free software to do the job that private companies would otherwise charge for. However, there are other restrictions to being in the program - like the fact that no business in the program can offer \"\"refund anticipation loans\"\", offer commercial services more than a certain amount of times (so they can't hound you to upgrade), and so on. Some businesses were making a killing off these, though they are pretty much solely developed to be predatory on people with the lowest incomes (and education levels, and IQ, and with cognitive disabilities, and basically anyone they could sucker into paying what were effectively absurd rates for short term loans along with inflated filing/preparation fees). Finally, Free File was partly developed as an initiative to increase the amount of digitally filed taxes and reduce the paper-based burdens of accepting and processing turns. In other words: to cut government costs, not to be a government welfare program. Even if it were, one can generally obtain commercial software for $30-$100, so the benefit to those above gross income levels is pretty minor; yearly costs to file taxes with such software for those payers would be less than 0.001% of their yearly expenses. Compared to the benefits obtainable by households living below the poverty line, fighting to cover an extra 5-30% of the population at the potential expense of having the whole program be a failure probably seemed like a more than worthwhile trade-off.\"",
"title": ""
},
{
"docid": "71f5a8da0a217a73a8b71543c603a16d",
"text": "Free File is not software by the IRS. Free File is actually a partnership between the IRS and the Free File Alliance, a group of tax software companies. The software companies have all agreed to provide a free version of their tax software for low-income taxpayers. According to the Free File Alliance FAQ, the Alliance was formed in 2002 as part of a Presidential initiative to improve electronic access to government. You can read all the excruciating details of the formal agreement (PDF) between the IRS and the Alliance, but basically, the participating software companies get exposure for their products and the possibility of up-selling services, such as state tax return software.",
"title": ""
},
{
"docid": "8199c1f269790dd8ecce7897a0159c49",
"text": "\"Regardless of the source of the software (though certainly good to know), there are practical limits to the IRS 1040EZ form. This simplified tax form is not appropriate for use once you reach a certain level of income because it only allows for the \"\"standard\"\" deduction - no itemization. The first year I passed that level, I was panicked because I thought I suddenly owed thousands. Switching to 1040A (aka the short form) and using even the basic itemized deductions showed that the IRS owed me a refund instead. I don't know where that level is for tax year 2015 but as you approach $62k, the simplified form is less-and-less appropriate. It would make sense, given some of the great information in the other answers, that the free offering is only for 1040EZ. That's certainly been true for other \"\"free\"\" software in the past.\"",
"title": ""
}
] |
[
{
"docid": "d704dd591f7062fb614c343df2296ace",
"text": "Whoever wrote this article is an idiot. $112,000 income in NY makes you barely middle class. 529 plans and 401k plans are two of very few actually sensible pieces of tax policy this burning dumpster fire of a country has. Come to Brooklyn and tell the high school janitor who makes $100k that he is too affluent to get college savings tax credits and be prepared to get punched in the face.",
"title": ""
},
{
"docid": "2412c5cd1130f007f6f068e6b280e2b3",
"text": "\"You're confusing so many things at once here...... First thing first: we cannot suggest you what to do business-wise since we have no idea about your business. How on Earth can anyone know if you should sell the software to someone or try to distribute to customers yourself? How would we know if you should hire employees or not? If you say you don't need employees - why would you consider hiring them? If you say you want to sell several copies and have your own customers - why would you ask if you should sell your code to someone else? Doesn't make sense. Now to some more specific issues: I heard sole proprietary companies doesn't earn more than 250k and it's better to switch to corporation or LLC etc. because of benefits. I heard it was snowing today in Honolulu. So you heard things. It doesn't make them true, or relevant to you. There's no earning limit above which you should incorporate. You can be sole proprietor and make millions, and you can incorporate for a $10K/year revenue business. Sole proprietorship, incorporation (can be C-Corp or S-Corp), or LLC - these are four different types of legal entity to conduct business. Each has its own set of benefits and drawbacks, and you must understand which one suits you in your particular situation. For that you should talk to a lawyer who could help you understand what liability protection you might need, and to a tax adviser (EA/CPA licensed in your state) who can help you understand the tax-related costs and benefits of each choice. On the other hand I heard that if I create LLC company, in case of failure, they can get EVERYTHING from me, what's this all about? No. This is not true. Who are \"\"they\"\", how do you define \"\"failure\"\", and why would they get anything from you at all? Even without knowing all that, your understanding is wrong, because the \"\"LL\"\" in LLC stands for LIMITED liability. The whole point of forming LLC or Corporation is to limit your own personal liability. But mere incorporation or forming LLC doesn't necessarily mean your liability is limited. Your State law defines what you must do for that limited liability protection, and that includes proper ways to run your business. Again - talk to your lawyer and your tax adviser about what it means to you. I'm totally unfamiliar with everything related to taxes/companies/LLC/corporation etc Familiarize yourself. No-one is going to do it for you. Start reading, ask specific questions on specific issues, and get a proper legal and tax advice from licensed professionals.\"",
"title": ""
},
{
"docid": "ced09ab3262b25c1ad703326db8ecd26",
"text": "\"So it seems like a lot of people here aren't exactly sure about why this works and its financial implications. So what you are referring to is in Finance something called Funds Transfer Pricing or FTP (often referred to as just Transfer Pricing). Like anything else, FTP has its place. Most companies; however, don't use it properly. FTP, theoretically, has one primary purpose (although it's developed a second): to properly allocate opportunity costs across divisions. Let's say Company A produces widgets. They sell these widgets for $200 at a TOTAL COST of $150 and book profits of $50. Now to produce the widget Division 1 makes a computer chip at a cost of $50 that it then \"\"sells\"\" to Division 2 for $60. Division 1 then books a profit of $10. Division 2 then makes some plastic stuff and assembles the device. This is labor intensive so Division 2's costs are $100. Company A sells the completed device for $150. Division 2 subsequently books profits of $40, and appears much more profitable than Division 1, on the surface. The problem arises when Division 1 could sell the chip to the open market for $125. Now it costs them $50 to produce, and they could make a theoretical profit of $75. This is MORE than the company makes AS A WHOLE on the entire device. By having Division 2 pay effectively \"\"fair market price\"\" for that chip, you realize that Division 2 is really operating at a loss (the *opportunity cost* of not selling the chip to market is greater than producing the completed device). Company A would be better off getting rid of Division 2 and solely focusing on Division 1. In a good FTP system, Division 2 would pay the fair market price of $125. If done properly, management would hopefully realize it should divest Division 2. That's the ***fundamental premise*** behind FTP. In actuality things get much more complicated because of economics, the company itself, branding, IT, operations, management, PPE, labor laws, etc. Thats why most companies screw it up. All that other stuff falls under whats called cost allocation accounting. It gets VERY complex and entire masters courses are dedicated to it (different methods, etc.) The other thing you can do with FTP is get crazy tax breaks due to various tax laws. The simplified explanation is that divisions pay taxes on profits to the government ***that division*** is located in (this works on the state level, too btw.). GE does a lot of this and it's a big part of why they pay almost no-taxes. Again, it gets more complicated when you involve audits as there's some grey area legally. For simplicity, assume tax rates are 40% in the US and 10% in India. So let's say GE makes an airplane engine in the US but \"\"finishes\"\" manufacturing in India. These specific engines costs $5,000,000 for the US division to make, up to a certain point. The US division can then sell the engine at a break even to India. So India \"\"pays\"\" $5,000,000 for the engine. The US division then books no profit. India finishes the manufacturing with additional costs of $1,000,000. The India division then sells the engine to the open market for $9,000,000 . Therefore, the India division books a profit of $3,000,000 and pays taxes of $300,000. Now GE as a whole makes a profit of $3,000,000 less taxes of $300,000 = net profit of $2,700,00. Further, let's say the fair market value of the engine, as is, when the US sells to India is $7,000,000. That would mean US ***should*** book profits of $2,000,000 and India ***should*** book profits of $1,000,000. Total taxes by GE are now $800,000 (US) + $100,000 (India) = $900,000. However, what's important is that NET PROFIT is now $2,100,000. ***GE just saved $600,000 in taxes by doing this***. The beauty of this is, divisions are supposed to charge fair market value for products FTP'd internationally; however, it's REALLY hard for the IRS to say what the value of an unfinished product really is (heck, you could be offering bulk discounts, etc.)... The fact is, often, US divisions have skilled labor that is difficult to replicate elsewhere. They just show US divisions operating at losses to make the company as a whole better. The problem, again, arises when top management don't fully appreciate or understand the reasoning behind this stuff. They end up making cuts to US labor because it's \"\"unprofitable\"\" without thinking about the entire story. I know this is very long winded but hope it helps! ***tldr; companies FTP to recognizes profitability and opportunity costs of divisions as well as use it for overseas tax breaks.*** Side note: Politically speaking, people who know how this works are pissed off about it in the U.S. (don't worry though, most politicians on both sides don't have a clue). We have high corporate tax rates relative to other countries and IRS loopholes allow this kind of thing (lobbying $$). It's also why, economically, you can't just raise ***corporate*** tax rates to increase domestic tax reciepts as more companies will just implement this process (it's complicated to do properly). Also, please don't say 50 years ago tax rates were higher and raising taxes increased receipts. The fact is most companies couldn't even FATHOM doing this 50 years ago, no less even 20. edit: some clarification in wording\"",
"title": ""
},
{
"docid": "4fe7ff9314d00f0e13a670dbd1099e0c",
"text": "\"This article acts like it's the fault of the person for not making enough money to pay for rent, food, insurance, and gas - \"\"Surely if I just tried hard enough I could make $280,000 a year and put 30% of it into investments.\"\" No financial software is going to change the labor market.\"",
"title": ""
},
{
"docid": "4b10baf24c0aa7867791b8ae4fe55005",
"text": "In a nutshell, there are significant entrance hurdles, legally and especially financially. The fixed cost and effort to get it set up is high (although later, the proportional cost and efforts are negligible). Therefore, this is only of interest for taxable amounts of seven digits or more - which most people don’t reach.",
"title": ""
},
{
"docid": "5500dfda716ea63d53a060a18e04c4d3",
"text": "It might not be leniency for first time payers, but they do have programs, some federal some local, that help the poor and elderly complete their tax forms. There are also programs that allow the poor to file electronically for free. For most people the first time they file their taxes they are using the EZ form. Which is rather easy to do, even without the use of either web based or PC based software. The software tools all ask enough questions on the EZ forms to allow the user to know with confidence when their life choices have made it advantageous to use the more complex forms. The web versions of the software allow the taxpayer to start for free, thus reducing their initial investment for the software to zero. Because the first time filer is frequently a teenager the parents are generally responsible for proving that initial guidance. The biggest risk for a young taxpayer might be that the first year that itemizing deductions might be advantageous. They might never consider it, so they over pay. Or they discover in April that if they had only kept a receipt from a charity six months ago they could deduct the donation, so they are tempted to claim the donation without proof. Regarding leniency and assistance there is an interesting tax credit. The Earned Income Tax Credit. it gives a Tax credit to the working poor. They alert people that they need to Check Your Eligibility for the Earned Income Tax Credit They know that significant numbers of taxpayers fail to claim it. EITC can be a boost for workers who earned $50,270 or less in 2012. Yet the IRS estimates that one out of five eligible taxpayers fails to claim their EITC each year. The IRS wants everyone who is eligible for the credit to get the credit that they’ve earned. The rules for getting the credit are simple, all the information needed to claim it is already on the basic tax forms, but you have to know that you need a separate form to get the credit. But instead of making the credit automatic they say: If you use IRS e-file to prepare and file your tax return, the software will guide you and not let you forget this important step. E-file does the work and figures your EITC for you! and then : With IRS Free File, you can claim EITC by using brand name tax preparation software to prepare and e-file your tax return for free. It's available exclusively at IRS.gov/freefile. Free help preparing your return to claim your EITC is also available at one of thousands of Volunteer Income Tax Assistance sites around the country. To find the volunteer site nearest to you, use the VITA locator tool on IRS.gov. But if you don't use free file you might never know about the form. Apparently it escapes 20% of the people who could claim it.",
"title": ""
},
{
"docid": "b708f531bc49a23069b670d394a624c2",
"text": "I'm talking about household income. $300k is a huge amount of money for a single person to make, but $150k is certainly doable for most doctors/lawyers/engineers. If your spouse is also a high earner that will help put over the 1% threshold.",
"title": ""
},
{
"docid": "68374631dbe08064568d05a07edd091b",
"text": "Looks like you can get a PO box online for $62 per year: https://www.usps.com/manage/get-a-po-box.htm",
"title": ""
},
{
"docid": "3993d8b9c1fff59ee034e7a0bedd2b4a",
"text": "\"The problem with these services is that they resell a random assortment of programs at a pretty high price. Buying the programs a la carte adds up quick, especially when a SD stream of varying quality costs as much or more than the DVD set when it is released (don't get me started on the HD up-charges). That's per show, per season. It makes it really expensive to catch up on a season, when you are essentially \"\"buying the seasons\"\" to stream them, when all you want to do it \"\"rent them\"\" instead. The way this is not like steam, and the point I think OP is trying to make, is that stuff is all over the place. People don't want to have to jump between Hulu, CBS.com, iTunes, Netflix, Amazon, etc. Plus, some places have some things for free, some charge a monthly fee, some charge per-view (rent), some charge once per show/season/movie (buy), etc. Some offerings that are free are actually sold for a fee through other services. Right now, it's sort of a mess. I'm not even sure what the right model is (buy, rent, season pass, ad-supported, etc) and I'm sure there will be competing models for the foreseeable future.\"",
"title": ""
},
{
"docid": "f6d3f5dd4ace3c97945ce237fe7a8e57",
"text": "\"Usually... if you can't figure the business model for a cheap or \"\"free\"\" product it's because you ARE the product and just don't know it. In this case, moviepass has found a buyer who will pay more for the data on your movie watching habits than they have to fork out for movie tickets. This is why the price dropped from $60 to $10. It's a data play now. Don't worry... You're giving Google and Facebook way more for access to their \"\"free\"\" technologies, I assure you.\"",
"title": ""
},
{
"docid": "6389f2a53a3081caf9172010bf0cf22c",
"text": "Office 365 has all of the sharing/editing/browser access that you would want as a consumer - plus it is FAR more useful in an enterprise setting because of better permissions settings. What people don't seem to realize is that Microsoft doesn't make their nut on consumer software. They ultimately are failing at porting REALLY GOOD enterprise packages to the consumer - which is a totally different issue.",
"title": ""
},
{
"docid": "573d1dd0b2c5c0fb9398b4a1d101a5ef",
"text": "Because salaries aren't high enough. If the salaries were higher more people would pursue that field. I'm not going to begrudge anyone making billions, but Microsoft is raking in cash, and it's obvious that they'd rather horde it than spend it on talent. Well, ask a professional sports team about that equation. Just because salaries are in the 100s of thousands doesn't mean that they're too high. Especially when you look at these companies financial filings.",
"title": ""
},
{
"docid": "a471c4c58c07ed7ca866cff9414c8695",
"text": "There isn't one. I haven't been very happy with anything I've tried, commercial or open source. I've used Quicken for a while and been fairly happy with the user experience, but I hate the idea of their sunset policy (forced upgrades) and using proprietary format for the data files. Note that I wouldn't mind using proprietary and/or commercial software if it used a format that allowed me to easily migrate to another application. And no, QIF/OFX/CSV doesn't count. What I've found works well for me is to use Mint.com for pulling transactions from my accounts and categorizing them. I then export the transaction history as a CSV file and convert it to QIF/OFX using csv2ofx, and then import the resulting file into GNUCash. The hardest part is using categories (Mint.com) and accounts (GnuCash) properly. Not perfect by any means, but certainly better than manually exporting transactions from each account.",
"title": ""
},
{
"docid": "15b8790c8e70783945c7ac626dfa0e19",
"text": "You can choose to pay your mortgage instead of another bill, or vice versa. Your net will change from month to month while your gross is relatively static. I can make a bunch of promises to my load officer about my expenses, but it is very difficult to verify. Moreover, it is pretty hard to give your net income and plan for emergencies. So for the sake of reliability, verifiability, and general ease a lender will look at your gross. YOU should definitely look at your net when deciding if you can afford a loan.",
"title": ""
},
{
"docid": "39efca8110c7d497f195cadf2e5cc2fe",
"text": "I think you have a good start understanding the ESA. $2k limit per child per year. The other choice is a 529 account which has a much higher limit. You can deposit up to 5 years worth of gifting per child, or $65k per child from you and another $65k from your wife. Sounds great, right? The downside is the 529 typically has fewer investment options, and doesn't allow for individual stocks. The S&P fund in my 529 costs me nearly 1% per year, in the ESA, .1%. the ESA has to be used by age 30, the 529 can be held indefinitely.",
"title": ""
}
] |
fiqa
|
669e20f5183932cd1ea1dd67711b38a0
|
can the government or debt collectors garnish money from any bank account to which the debtor has access?
|
[
{
"docid": "fc70fc22cffbad20451f3ac917be04db",
"text": "There is a difference between an owner and a signer. An owner is the legal owner of the funds. A signer has access to withdraw the funds. In most cases, when a new personal account is opened the name is added as an owner&signer. However, that is not always the case. A person could be an owner, but not a signer, in a custodial arrangement. For example, a minor child may be an owner only on their account with a custodial parent listed as a signer. The minor could not withdraw from the account. A person could be a signer, but not an owner, in a business or estate/trust account. The business or estate would be the owner with individuals listed as signers only. The business employees do not own the funds, they are only allowed to withdraw and disburse the funds on behalf of the company. The creditor can only garnish/withhold funds that are owned by the indebted. If the second person on the account is only a signer, those funds cannot be withheld as part of a judgment against the second person (they don't own those funds). However, simply titling the second person as a signer only is not sufficient. If you share access with the second person and allow them to spend the money for their own benefit, they are no longer just a signer. They have become an owner because you are sharing your funds with them. Think of the business relationship as an example. The employee is a signer so they can withdraw funds and pay business expenses, like the electric bill. If the employee withdrew funds and bought herself a new dress, she is stealing because she does not own those funds. If the second person on the account buys things for themselves, or transfers some of the money into their own account, they are demonstrating that more than a signer-only relationship exists. A true signer-only relationship is where the individual can only withdraw funds on the owner's behalf. For example, the owner is out of town and needs a bill paid, the signer can write a check and pay the bill for the owner. A limited power of attorney may be worth looking into. With a limited POA, the owner can define the scope and expiration of the power of attorney. With this arrangement, the second person becomes an executor of the owner under certain circumstances. For example, you could write a power of attorney that states something like: John Smith is hereby granted the limited power to withdraw funds from account 1234, on deposit at Anytown Bank, for the purpose of paying debts and obligations and otherwise maintain my estate in the event of my incapacitation or inability to attend to my own affairs. This Power of Attorney shall expire on it's fifth anniversary unless renewed. If the person you have granted the power of attorney abuses their access, you could sue them and you would only have to demonstrate that they overstepped the scope of their power.",
"title": ""
},
{
"docid": "e0032a751ea184ad652de18d6dacd66d",
"text": "\"I would call the bank and ask how the person is on the account. If they are an owner, or are an authorized user, or what type of owner they are, etc. If the bank makes the distinction between \"\"user\"\" and \"\"owner\"\" then most likely, your funds are not able to be seized. If they are a joint owner, then, typically, 100% of the money is yours and 100% of the money is theirs and either of you could withdraw all the money, close the account, or have the money seized as part of a legal action.\"",
"title": ""
},
{
"docid": "83bcfd9f7e47e783ee4a4e77f866f9dd",
"text": "I agree with the comments so far. Access doesn't equal ownership. There are also different levels of access. E.g. your financial advisor can have access to your retirement account via power of attorney, but only ability to add or change things, not withdraw. Another consideration is when a creditor tries to garnish wages / bank accounts, it needs to find the accounts first. This could be done by running a credit report via SSN. My guess is an account with access-only rights won't show up on such a report. I suppose the court could subpoena bank information. But I'm not an attorney so please check with a professional.",
"title": ""
}
] |
[
{
"docid": "b41262077d84080b28713d8b81e5b114",
"text": "Banks cannot survive without the government. Once people lose faith in the governement, the banking system will fail. The banking system failing is a symptom of the issue, not a cause. Backstopping the banks protects the general populace, and prevents runs which will actually destroy the banking system. The burden shifts from the banks to the government. But a gaurantee is not an actual payment. The banks still operate as normal without any cash from the government, but with the knowledge that, if they ARE over extended, the government will take on their debt. the government gaurantee lowers the rates that the banks pay to raise debt to continue to operate. So let's say PIIGS fully bail out their banking system, paying off all debt, that's worse case. Where does the money come from? Revenues, aka taxes. If the gov't takes on the bank debt and has positve revenue, no problem, a little less hand outs, but the country as a whole benefits from having a functioning banking system. If revenues are poor or negative, however, it's just adding to the deficit. Gov't can print money, don't forget. But if revenues are poor and there's no hope to see them improve...Boom, all hell breaks loose, and you get Europe.",
"title": ""
},
{
"docid": "22f551971d12e3540a68eb3a2b08b774",
"text": "Generally speaking, granting rights to one bank account (e.g. making a joint account) does not extend rights to other accounts or otherwise let one joint owner create new obligations on the other owner (e.g. opening a line of credit that the other owner must pay for), except to the extent of the joint account. I assume there are no UK rules that would change this feature. The other party can of course withdraw all the money without need for your approval. This also means that the joint account could be exposed to all the creditors of either party. If your account joint tenant has huge debts, the creditors could theoretically look to the joint account for satisfaction. At least, that would be an issue under US law. Frankly, it may be simpler to get a separate account for the other person (if possible) and make transfers with online banking. It could also make sense to get a rechargeable banking card, if those are in the UK, which works like a debit card and can be reloaded through various means (sometimes a call, sometimes online deposits, sometimes in physical stores). There may be fees to getting such a card or a second account, of course. The benefit is that the cardholder has no access to your account and you control recharging. Such cards are widely available in the US to people who otherwise would not qualify for traditional bank accounts. Note also the FATCA complication with adding a US person to your account. My understanding is that a number of non-US banks will simply close the accounts of Americans, rather than deal with FFI hassles under FATCA.",
"title": ""
},
{
"docid": "1ea12d08b27c305c365845315d008efb",
"text": "This is called a fraudulent conveyance because its purpose is to prevent a creditor from getting repaid. It is subject to claw back under US law, which is a fancy way of saying that your friend will have to pay the bank back. Most jurisdictions have similar laws. It is probably a crime as well, but that varies by jurisdiction.",
"title": ""
},
{
"docid": "d0639d406a8990b39b5ae168d9ebf638",
"text": "There no legal framework that allows states like the US or countries in Europe to default on their debt. Should congress pass a law to default the US supreme court is likely to nullify the law.",
"title": ""
},
{
"docid": "d0a4893b71dec99934e4e67dee7a5b8c",
"text": "I walked away from a house last year and don't regret it a single bit. I owed $545,000 and the bank sold it a month after moving out for $328,900. So technically I guess I can be on the hook to someone for the missing $216,100 for many years to come. Oh well. They can come after me if they want and I'll declare bankruptcy then.",
"title": ""
},
{
"docid": "d701e65d752ded1d87e896f088aea506",
"text": "\"Somehow I just stumbled onto this thread... > You essentially robbed the person holding the debt (since you promised to pay it off). Depends on leverage, with fractional reserve lending. Banks are permitted to loan out 30x their actual assets, or more. If I have $1 but can loan out $30, and anything more than $1 gets paid back, I haven't lost any money. In addition, I can write off the amount defaulted, *and the government will pay me back* for certain types of loans. With student loans, since they are almost impossible to discharge, gov't will pursue the borrower for years and decades, and ultimately collect more interest. Here is an article on it: http://online.wsj.com/article/SB10001424052748704723104576061953842079760.html > According to Kantrowitz, the government stands to earn $2,010.44 more in interest from a $10,000 loan that defaulted than if it had been paid in full over a 20-year term, and $6,522.00 more than if it had been paid back in 10 years. Alan Collinge, founder of borrowers' rights advocacy Student Loan Justice, said the high recovery rates provide a \"\"perverted incentive\"\" for the government to allow loans to go into default. Kantrowitz estimates the recovery rate would need to fall to below 50% in order for default prevention efforts to become more lucrative than defaults themselves. Not to mention: http://studentloanjustice.org/defaults-making-money.html > So essentially, the Department is given a choice: Either do nothing and get nothing, or outlay cash with the knowledge that this outlay will realize a 22 percent return, ultimately (minus the governments cost of money and collection costs). From this perspective, it is clear that based solely on financial motivations, and without specific detailed knowledge of the loan (i.e. borrower characteristics, etc.), the chooser would clearly favor the default scenario, for not only the return, but perhaps the potential savings in subsidy payment as well, And don't forget the penalties accruing to the person defaulting; they will probably have to move out of the country in order to escape collection. And let's factor in the huge ROI the lender sees by creating an indentured servant class. Plus, the gov't will issue as much currency as it wants, to make *itself* whole. And how much of a loss IS the loss, when the whole of the loan amount went right back into the local economy, paying professors, janitors, landlords, grocery stores, etc.? And don't forget all THOSE taxes (income and sale) that the gov't collects. Government will collect ~30%-50% of the loan immediately as income and sales tax, plus a portion of it every time the money changes hands (I pay income tax, then use some of my after-tax money to pay you for a product or service, and you still have to pay tax on that money, and so on). So it's more complicated than having \"\"robbed the person holding the debt\"\". Banks at 30x leverage don't lose money as long as they get back 1/30th of the total amount lent out, including interest, fees, and penalties, before considering write-offs and government repayment. In fact, the point of over-leverage is so you CAN make loans that have risk attached. If you could only lend what you actually had, you would have to stay away from anything risky because it would be too easy to lose money. Having virtual $ to bet means you can serve market segments that have higher risk. This makes MORE money for the banks, that's why they do it. They are already playing with funny money, so they don't lose any even if you default and move to another country. And the money you \"\"spent\"\" has also made its way back to them in various amounts, such as your professor's mortgage payments, auto loan, etc. Your taking on debt already helped the bank get its OTHER loans repaid. So, roughly speaking, if you took out $90,000 and $3,000 of that made its way back to the bank through various means, they haven't lost any money, because it only cost them $3,000 actual dollars in the first place.\"",
"title": ""
},
{
"docid": "cd91ac9a13ba443f8dd0b2a5af1598d9",
"text": "You will probably not be able to figure out the bank from the account number. You can check for your name on registries of abandoned bank accounts or unclaimed money, but without more information, you don't have a lot of options.",
"title": ""
},
{
"docid": "f01187f9acffaf8747493180e29f7a3a",
"text": "I've skimmed through the answers given and I'd like do add another possible scenario. I've recently heard about this exact thing happening to someone only the money originally was a loan taken in the receivers name. 1) Scumbag finds out personal data – including social number, bank account and phone – of Innocent Victim. 2) Scumbag takes out a loan in the name of Innocent Victim. The money are sent to IV's account. 3) Scumbag calls IV saying 'Oh, I've made a mistake, blah, blah, yada, yada. Could you please send the money back to me? My bank account is...' 4) Innocent Victim, being the good guy that he/she is, of course want to help out and send the money to Scumbag. 5) Scumbag makes a cash withdrawal and is no longer anywhere to be found and Innocent Victim is left with a loan but no money.",
"title": ""
},
{
"docid": "9976b46a505265ecde11fd4c7e9925a7",
"text": "Foreclosure is at a high level the bank declaring that the debtor cannot pay their promissory note (their debt). This is shortly followed by default, which is the removal of debtors rights to the property. After the debtor has defaulted, he either chooses to voluntarily remove himself and his belongings from the property, or is forcibly evicted. In the US eviction is carried out by local law enforcement, such as the sheriff's office. The bank is now the sole owner of the property, and proceeds to sell it, in an attempt to recoup their investment. If the bank cannot recoup their investment by selling the house, the rest may be converted to unsecured debt against the debtor. If the bank chooses to forgive the remaining debt, the debtor may have a tax liability for cancellation of debt. Also the debtor may also be liable for any appreciation the house did before it was sold, but this likely to be nontaxable if the house in question is the debtor's primary residence. They also send the credit bureaus the notice of foreclosure, which is how your credit score is hurt. Private Mortgage Insurance or Lenders Mortgage Insurance will pay the lender some amount back to cover their losses. See Also:",
"title": ""
},
{
"docid": "7d5890e675f59e1fbb5cf3627c912696",
"text": "The only way someone can take money out of your account using just your sort code and account number is if you set up a direct debit to pay them (or someone pretending to be you sets up the direct debit). Even with Paperless DD's this can take some time. Anyone who can process debit card transactions can take money from your account if they have your debit card number, expiry date and cvv number. Direct debits do not have an expiry date so they are normally used for paying automatic regular long term bills (like rent, rates, electricity etc). Note, anyone with an ordinary bank account can pay money into account, using your sort code and account number.",
"title": ""
},
{
"docid": "ce7b58206d46e5739a82e74136ae1170",
"text": "You can't be arrested or jailed in the UK for owing money (hasn't been true for about a hundred years). Unless it's a large unpaid fine or a tax bill, and probably not even then. Neither police nor immigration have any interest in who you owe money to.",
"title": ""
},
{
"docid": "c8d578b8be2c26451033a5d1b558b495",
"text": "\"The problems of the government \"\"watching your money\"\" only apply to paper cash money which has pictures of presidents on it, and it's for anti-laundering/anti-crime/drug reasons. Nobody cares who you write a $100,000 check to. The paper trail is there, but nobody ever looks at it. No reputable money management firm would even want cash. The apocryphal \"\"briefcase of money\"\" would be a nightmare for them. They'd need to count it in front of you, guard it, call in a security firm to transport it, and then make the same exact justifications to the government that you have to make, which means, chain of custody, they'd have to give you the same grilling your bank just gave you! They would strongly discourage cash for those reasons. So the crook wants the paper bag o' cash because he plans to do none of those things; he plans to take it from you and doesn't want a paper trail. Often when the financial industry uses the term \"\"cash\"\", it's a slang for checks, money orders, cashiers checks, savings bonds, and other things that instantly map to denominated US dollars or a foreign currency routinely traded like yen, pound, franc, or Euro. The opposite of \"\"cash\"\" would be stocks, bonds, real estate holdings, patents, heirlooms, debt, vehicles, etc. where they must be sold to make them into USD. Just as a warning: most \"\"financial management firms\"\" rip you off; they pretend to be cheap or free, but actually earn their pay through deception: they talk you into fairly mediocre investments which pay them a huge sales commission. Sure, your money goes up, but not half as much as it should've, and they pocketed the difference. They also recommend products which are unnecessarily complex, as a snow job. Investment is simpler than that.\"",
"title": ""
},
{
"docid": "b061042bc1a63291c7674d4992bb781f",
"text": "Safe deposit boxes are rented out to customers, and their content is not bank's property. Money deposits are not being taken by the creditors if a bank goes bankrupt, for the same reason - its not bank's money, it belongs to the depositors. However, frequently banks go bankrupt because they do not have enough cash at hand to pay back the depositors. In this case, unless insured (up to $250K in the US, EUR100K in EU), some or all of the deposits may not be immediately (or even at all) available. Depositors become creditors of the bank in the bankruptcy proceedings. Safe deposit box, however, is rented to the customer, and the content is not removed by the bank to be used elsewhere, as happens with monetary deposits. So even if the bank is bankrupt and doesn't have enough money to cover the monetary deposits, the content of the safe deposit boxes doesn't magically disappear, and the owner can get it back. The access to the deposit box itself may be limited due to the bankruptcy, but the content will remain there waiting for its owners. In the United States, when a bank goes bankrupt, FDIC takes over it and its assets. Safe deposit box rental contract is an asset. It is taken over by the FDIC and will be sold to a buyer (usually as a part of the whole branch where the box is located), who will continue operating/servicing it.",
"title": ""
},
{
"docid": "95c99fdba044993b8b9314c59ca5831c",
"text": "If the bank is calling your employer, the federal Fair Debt Collection Practices Act (FDCPA) limits where and when debt collectors can contact consumer debtors. In many cases, debt collectors that contact debtors at work are violating the FDCPA. http://www.nolo.com/legal-encyclopedia/a-debt-collector-calling-me-work-is-allowed.html",
"title": ""
},
{
"docid": "aeb0c9abfaa7920728c48c36ff87c571",
"text": "According to LegalZoom: If your debtor is unwilling to pay and you know they have the means, it's time to use your local sheriff. You have three options to collect: a bank levy, wage garnishment, or a real estate lien. It sounds like you'll need to reach out to your local police/sheriff's department and they can further help you out and get you your money.",
"title": ""
}
] |
fiqa
|
b08648563135a13114734d8c9b9e2af1
|
Contract job (hourly rate) as a 1099: How much would I be making after taxes?
|
[
{
"docid": "2759de95b6e4abc47e93cbccb708395a",
"text": "\"There are way too many details missing to be able to give you an accurate answer, and it would be too localized in terms of time & location anyway -- the rules change every year, and your local taxes make the answer useless to other people. Instead, here's how to figure out the answer for yourself. Use a tax estimate calculator to get a ballpark figure. (And keep in mind that these only provide estimates, because there are still a lot of variables that are only considered when you're actually filling out your real tax return.) There are a number of calculators if you search for something like \"\"tax estimator calculator\"\", some are more sophisticated than others. (Fair warning: I used several of these and they told me a range of $2k - $25k worth of taxes owed for a situation like yours.) Here's an estimator from TurboTax -- it's handy because it lets you enter business income. When I plug in $140K ($70 * 40 hours * 50 weeks) for business income in 2010, married filing jointly, no spouse income, and 4 dependents, I get $30K owed in federal taxes. (That doesn't include local taxes, any itemized deductions you might be eligible for, IRA deductions, etc. You may also be able to claim some expenses as business deductions that will reduce your taxable business income.) So you'd net $110K after taxes, or about $55/hour ($110k / 50 / 40). Of course, you could get an answer from the calculator, and Congress could change the rules midway through the year -- you might come out better or worse, depending on the nature of the rule changes... that's why I stress that it's an estimate. If you take the job, don't forget to make estimated tax payments! Edit: (some additional info) If you plan on doing this on an ongoing basis (i.e. you are going into business as a contractor for this line of work), there are some tax shelters that you can take advantage of. Most of these won't be worth doing if you are only going to be doing contract work for a short period of time (1-2 years). These may or may not all be applicable to you. And do your research into these areas before diving in, I'm just scratching the surface in the notes below.\"",
"title": ""
},
{
"docid": "ced95c7f856d00f3baffa4ed91352d54",
"text": "In addition to taking into account your deductions, as mentioned by @bstpierre, you also need to account for vacation, and other time off such as sick days. You also need to estimate what percentage of the year you expect to be working and pro-rate your salary accordingly. For example it is not uncommon to use 40 weeks out of the year which is about 77% of the time. Also check to see if you would be eligible for unemployment for the times you are not working. I suspect not. But in any case, you might want to use worst case scenario figures to see if it is worth it, especially in this economy.",
"title": ""
},
{
"docid": "c4447fbec37c915724ef2996ae4d54bc",
"text": "\"Does your spouse work? That's one factor that can put your income into a higher bracket. The one difference to note is you will pay 2x the social security portion, so even though not \"\"federal\"\" tax, its right off the top nearly 13%. I'm not familiar with your states tax. It's really worth dropping the $75 on a copy of the software and running your own exact numbers.\"",
"title": ""
},
{
"docid": "edd7415b1f3a36b066e5bbfc7634869b",
"text": "If it's just you working, I'd use a ballpark figure of 35% owed - it may be a little high or low, but it's a safe margin to keep set aside for paying your liabilities at the end of the year.",
"title": ""
}
] |
[
{
"docid": "938db83ce9d0d8d64a670ca38b919a3b",
"text": "Note: This is not professional tax advice. If you think you need professional tax advice, find a licensed professional in your local area. What are the expected earnings/year? US$100? US$1,000? US$100,000? I would say if this is for US$1,000 or less that registering an EIN, and consulting a CPA to file a Partnership Tax return is not going to be a profitable exercise.... all the earnings, perhaps more, will go to paying someone to do (or help do) the tax filings. The simplest taxes are for a business that you completely own. Corporations and Partnerships involve additional forms and get more and more and complex, and even more so when it involves foreign participation. Partnerships are often not formal partnerships but can be more easily thought of as independent businesses that each participants owns, that are simply doing some business with each other. Schedule C is the IRS form you fill out for any businesses that you own. On schedule C you would list the income from advertising. Also on schedule C there is a place for all of the business expenses, such as ads that you buy, a server that you rent, supplies, employees, and independent contractors. Amounts paid to an independent contractor certainly need not be based on hours, but could be a fixed fee, or based on profit earned. Finally, if you pay anyone in the USA over a certain amount, you have to tell the IRS about that with a Form 1099 at the beginning of the next year, so they can fill out their taxes. BUT.... according to an article in International Tax Blog you might not have to file Form 1099 with the IRS for foreign contractors if they are not US persons (not a US citizen or a resident visa holder).",
"title": ""
},
{
"docid": "d261b95aa4f917f2b19443b949a5c35e",
"text": "\"Whenever you do paid work for a company, you will need to fill out some sort of paperwork so that the company knows how to pay you, and also how to report how much they paid you to the appropriate government agencies. You should not think of this as a \"\"hurdle\"\" and you shouldn't worry that you haven't been employed for a long time. The two most common ways a company pays an individual are via employee wages, or \"\"independent contractor\"\" payments. When you start a relationship with a company, if you are going to become an employee, then you will out a W4 form, and at the end of the year you will receive a W2 form. If you are an independent contractor, (which you would be considered in this case), you will fill out form W9 and at the end of the year you will receive a 1099. This is completely normal and you have nothing to worry about. All it means is that if you make more than a certain amount (typically $600) in a year, you will receive a 1099 in the mail or electronically. The 1099 form basically means that they are reporting that amount to the IRS, and it also helps you file your tax return by showing you all the numbers you need on one form. Please remember that when you are paid as an independent contractor, no taxes are withheld on your behalf, so you may owe some tax on the money you make. It's best to set aside some of your income so you are prepared to pay it come tax time next year.\"",
"title": ""
},
{
"docid": "04b97a83bcb4ed2eba9355dafbdea597",
"text": "The tax is depended upon state where you are registered and the salary paid. More here If you employ contract you need not pay tax.",
"title": ""
},
{
"docid": "0dde42cb2eb328499f4a02f6e692de0e",
"text": "You report each position separately. You do this on form 8949. 7 positions is nothing, it will take you 5 minutes. There's a tip on form 8949 that says this, though: For Part I (short term transactions): Note. You may aggregate all short-term transactions reported on Form(s) 1099-B showing basis was reported to the IRS and for which no adjustments or codes are required. Enter the total directly on Schedule D, line 1a; you are not required to report these transactions on Form 8949 (see instructions). For Part II (long term transactions): Note. You may aggregate all long-term transactions reported on Form(s) 1099-B showing basis was reported to the IRS and for which no adjustments or codes are required. Enter the total directly on Schedule D, line 8a; you are not required to report these transactions on Form 8949 (see instructions). If the 1099B in your case shows basis for each transaction as reported to the IRS - you're in luck, and don't have to type them all in separately.",
"title": ""
},
{
"docid": "1ef572d74f547abb3dee28a7951c7242",
"text": "It's difficult to quantify the intangible benefits, so I would recommend that you begin by quantifying the financials and then determine whether the difference between the pay of the two jobs justifies the value of the intangible benefits to you. Some Explainations You are making $55,000 per year, but your employer is also paying for a number of benefits that do not come free as a contractor. Begin by writing down everything they are providing you that you would like to continue to have. This may include: You also need to account for the FICA tax that you need to pay completely as a part time employee (normally a company pays half of it for you). This usually amounts to 7.8% of your income. Quantification Start by researching the cost for providing each item in the list above to yourself. For health insurance get quotes from providers. For bonuses average your yearly bonuses for your work history with the company. Items like stock options you need to make your best guess on. Calculations Now lets call your original salary S. Add up all of the costs of the list items mentioned above and call them B. This formula will tell you your real current annual compensation (RAC): Now you want to break your part time job into hours per year, not hours per month, as months have differing numbers of working days. Assuming no vacations that is 52 weeks per year multiplied by 20 hours, or 1040 hours (780 if working 15 hours per week). So to earn the same at the new job as the old you would need to earn an hourly wage of: The full equation for 20 hours per week works out to be: Assumptions DO NOT TAKE THIS SECTION AS REPRESENTATIVE OF YOUR SITUATION; ONLY A BALLPARK ESTIMATE You must do the math yourself. I recommend a little spreadsheet to simplify things and play what-if scenarios. However, we can ballpark your situation and show how the math works with a few assumptions. When I got quoted for health insurance for myself and my partner it was $700 per month, or $8400 per year. If we assume the same for you, then add 3% 401k matching that we'll assume you're taking advantage of ($1650), the equation becomes: Other Considerations Keep in mind that there are other considerations that could offset these calculations. Variable hours are a big risk, as is your status as a 'temporary' employee. Though on the flip side you don't need to pay taxes out of each check, allowing you to invest that money throughout the year until taxes are due. Also, if you are considered a private contractor you can write off many expenses that you cannot as a full time employee.",
"title": ""
},
{
"docid": "59e75daa5e86124187e195b99c1a93f1",
"text": "In general What does this mean? Assume 10 holidays and 2 weeks of vacation. So you will report to the office for 240 days (48 weeks * 5 days a week). If you are a w2 they will pay you for 260 days (52 weeks * 5 days a week). At $48 per hour you will be paid: 260*8*48 or $99,840. As a 1099 you will be paid 240*8*50 or 96,000. But you still have to cover insurance, the extra part of social security, and your retirement through an IRA. A rule of thumb I have seen with government contracting is that If the employee thinks that they make X,000 per year the company has to bill X/hour to pay for wages, benefits, overhead and profit. If the employee thinks they make x/hour the company has to bill at 2X/hour. When does a small spread make sense: The insurance is covered by another source, your spouse; or government/military retirement program. Still $2 per hour won't cover the 6.2% for social security. Let alone the other benefits. The IRS has a checklist to make sure that a 1099 is really a 1099, not just a way for the employer to shift the costs onto the individual.",
"title": ""
},
{
"docid": "29af954b3b5d2f33d38175d849fcf8ac",
"text": "You should get a 1099-MISC for the $5000 you got. And your broker should send you a 1099-B for the $5500 sale of Google stock. These are two totally separate things as far as the US IRS is concerned. 1) You made $5000 in wages. You will pay income tax on this as well as FICA and other state and local taxes. 2) You will report that you paid $5000 for stock, and sold it for $5500 without holding it for one year. Since this was short term, you will pay tax on the $500 in income you made. These numbers will go on different parts of your tax form. Essentially in your case, you'll have to pay regular income tax rates on the whole $5500, but that's only because short term capital gains are treated as income. There's always the possibility that could change (unlikely). It also helps to think of them separately because if you held the stock for a year, you would pay different tax on that $500. Regardless, you report them in different ways on your taxes.",
"title": ""
},
{
"docid": "8fe6f7a9cad2f4520ed898b0c39b47ba",
"text": "\"I assume your employer does standard withholding? Then what you need to do is figure what bracket that puts you in after you've done all your normal deductions. Let's say it's 25%. Then multiply your freelance income after business expenses, and that's your estimated tax, approximately. (Unless the income causes you to jump a bracket.) To that you have to add approximately 12-13% Social Security/Medicare for income between the $90K and $118,500. Filling out Form 1040SSE will give you a better estimate. But there is a \"\"safe harbor\"\" provision, in that if what you pay in estimated tax (and withholding) this year is at least as much as you owed last year, there's no penalty. I've always done mine this way, dividing last year's tax by 4, since my income is quite variable, and I've never been able to make sense of the worksheets on the 1040-ES.\"",
"title": ""
},
{
"docid": "fa9290fe5300a24c04c6f8ab01f18f66",
"text": "Sounds you need to read up on S corp structures. I think this would benefit you if you generate income even after you physically stopped working which is incomes from membership fees, royalties % of customer revenue, middle man etc... Under the Scorp, you as the sole member must earn a wage that fair and at current market value. You pay social security and Medicare on this wage. The interesting thing here is that an Scorp can pay out earning dividends without having to pay payroll taxes but the catch is that you, as the sole employee must earn a fair wage. As for paying the other member you may want to look into 1099 contract work plus a finders fee. The 1099 hourly wage does not require you to pay Medicare and SS. The common fee I'm used to is 5% of gross invoice. Then you would pay her an hourly wage. The company then bills these hours multiplied by 2 or 3 (or whatever you think is fair) to the client. Deduct expenses from this and that's your profit. Example. Contractor brings Client A which is estimated as a 100 hour project with $100 cost in supplies and requires 2 hours of your time @ $40/hr. You quote 100 hours @ $50 to client, client agrees and gives you down payment. You then present the contract work to your contractor, they complete the work in 100 hours and bill you at $25. You pay your contractor 2500 plus the 5% ($250) and your company earns $2070 (5000 - 2500 - 100-80) And you'll earn $80 minus the payroll tax. Then at the end of the quarter or year or however you want to do earning payouts your LLC- Scorp will write you a check for $2070 or whatever earning % you want to take. This is then taxed at your income tax bracket. One thing to keep in mind is what is preventing this other person from becoming your competition? A partnership would be great motivation to try and bring in as much work under the LLC. But if you start shafting people then they'll just keep the work and cut you out.",
"title": ""
},
{
"docid": "11fb8e7e63dd941dffe0099876b5abc8",
"text": "If the money comes to you, then it's income. If the money goes out from you, it's an expense. You get to handle the appropriate tax documentation for those business transactions. You may also have the pleasure of filing 1099-MISC forms for all of your blogging buddies if you've paid them more than $600. (Not 100% sure on this one.) I was in a blog network that had some advertising deals, and we tried to keep the payments separate because it was cleaner that way. If I were you, I'd always charge a finder's fee because it is extra work for you to do what you're doing.",
"title": ""
},
{
"docid": "b21dfeda453e019b67382d2c7e496610",
"text": "You are right that even if you do not receive a 1099-MISC, you still need to report all income to the IRS. Report the $40 on Schedule C or Schedule C-EZ. Since your net profit was less than $400, you do not need to file Schedule SE. From the IRS web site: Self-Employment Income It is a common misconception that if a taxpayer does not receive a Form 1099-MISC or if the income is under $600 per payer, the income is not taxable. There is no minimum amount that a taxpayer may exclude from gross income. All income earned through the taxpayer’s business, as an independent contractor or from informal side jobs is self-employment income, which is fully taxable and must be reported on Form 1040. Use Form 1040, Schedule C, Profit or Loss from Business, or Form 1040, Schedule C-EZ, Net Profit from Business (Sole Proprietorship) to report income and expenses. Taxpayers will also need to prepare Form 1040 Schedule SE for self-employment taxes if the net profit exceeds $400 for a year. Do not report this income on Form 1040 Line 21 as Other Income. Independent contractors must report all income as taxable, even if it is less than $600. Even if the client does not issue a Form 1099-MISC, the income, whatever the amount, is still reportable by the taxpayer.",
"title": ""
},
{
"docid": "0980ca2d1a7e51b55220dd25da641b4f",
"text": "question #2 - yes, 25% of your 1099 income. Good idea. It adds up quickly and is a good way to reduce taxable income.",
"title": ""
},
{
"docid": "b3ee0d5539681aa6015fec07c1b27559",
"text": "Well, you won't be double taxed based on what you described. Partners are taxed on income, typically distributions. Your gain in the partnership is not income. However, you were essentially given some money which you elected to invest in the partnership, so you need to pay tax on that money. The question becomes, are you being double taxed in another way? Your question doesn't explain how you invested, but pretty much the options are either a payroll deduction (some amount taken out of X paychecks or a bonus) or some other payment to you that was not treated as a payroll deduction. Given that you got a 1099, that suggests the latter. However, if the money was taken out as a payroll deduction - you've already paid taxes (via your W2)! So, I'd double check on that. Regarding why the numbers don't exactly match up - Your shares in the partnership likely transacted before the partnership valuation. Let's illustrate with an example. Say the partnership is currently worth $1000 with 100 outstanding shares. You put up $1000 and get 100 shares. Partnership is now worth $2000 with 200 outstanding shares. However, after a good year for the firm, it's valuation sets the firm's worth at $3000. Your gain is $1500 not $1000. You can also see if what happened was the firm's valuation went down, your gain would be less than your initial investment. If instead your shares transacted immediately after the valuation, then your gain and your cost to acquire the shares would be the same. So again, I'd suggest double checking on this - if your shares transacted after the valuation, there needs to be an explanation for the difference in your gain. For reference: http://smallbusiness.findlaw.com/incorporation-and-legal-structures/partnership-taxes.html And https://www.irs.gov/publications/p541/ar02.html Here you learn the purpose of the gain boxes on your K1 - tracking your capital basis should the partnership sell. Essentially, when the partnership is sold, you as a partner get some money. That money is then taxed. How much you pay will depend on what you received versus what the company was worth and whether your gain was long term or short term. This link doesn't go into that detail, but should give you a thread to pull. I'd also suggest reading more about partnerships and K1 and not just the IRS publications. Don't get me wrong, they're a good source of information, just also dense and sometimes tough to understand. Good luck and congrats.",
"title": ""
},
{
"docid": "68a64f99ce3e7b39eb632a8f6aefc86a",
"text": "You are expected to file 1099 for each person you pay $600 a year. I.e.: not a one time payment, but the total over the course of the year. Since we don't know how much and what else you paid - we cannot answer this question. The real question you're asking is that if you're treating the enterprise as a hobby, whether you're supposed to file 1099s at all. The answer to that question is yes. You should talk to your tax adviser (a EA/CPA licensed in your state) about this, and whether it is the right thing for you to do treating this as a hobby at all.",
"title": ""
},
{
"docid": "3fe97da3da12776e31cfb58e16e57f81",
"text": "\"It's likely you don't have to make estimated tax payments if this is your first year of contracting (extra income), and your existing salary is already having taxes withheld. If you look at the 1040-ES: General Rule In most cases, you must pay estimated tax for 2014 if both of the following apply. This is easier to understand if you look at the worksheet. Look at line 14b/14c and the associated instructions. 14b is your required annual payment based on last year's tax. 14c is the lesser of that number and 14a, so 14b is your \"\"worst case\"\". 14c is the amount of tax you need to prepay (withholding counts as prepayment). I'm going to apply this to your situation based on my understanding, because it's not easy to parse:\"",
"title": ""
}
] |
fiqa
|
73eb82d7d36e2d96360e7feff20449a7
|
In what state should I register my web-based LLC?
|
[
{
"docid": "40d1d12be6d8959552901e3a29b6f550",
"text": "Is it really necessary? If $800 / year registration fee is too much to you, an LLC is apparently not something you need right now. Many people conduct web-based business online on personal terms. My suggestion is that you focus on your business first and try to grow it as much as you can before you get down to a company.",
"title": ""
},
{
"docid": "44e68267e1b78af841ef0c4868dbc674",
"text": "Register in Nevada. It's a no brainer. I understand that it's not a great deal of money, but if you can save several hundred dollars per year, why not? It's the same amount (actually probably less) of paperwork to register in Nevada.",
"title": ""
},
{
"docid": "f7365f13e36108edea9afa96a081ba31",
"text": "I would prefer to see you register in your home state, and then focus on making money, rather than spending time looking to game the system to save a few bucks. People worry way too much about these trivial fees when they should be focused on making their business successful. Get registered, get insurance, and then pour it on and start making money. Make $650 your target for a week's income - you can do it! Next year's goal should be spending $50 a month on a payroll service because you're SO BUSY you can't take the extra time to pay your own social security taxes.",
"title": ""
},
{
"docid": "05575c7ecd138f1d959b8ffd50b5d3d2",
"text": "I have researched this question extensively in previous years as we have notoriously high taxes in California, while neighboring a state that has zero corporate income tax and personal income tax. Many have attempted pull a fast one on the California taxation authorities, the Franchise Tax Board, by incorporating in Nevada or attempting to declare full-year residence in the Silver State. This is basically just asking for an audit, however. California religiously examines taxpayers with any evidence of having presence in California. If they deem you to be a resident in California, and they likely will based on the fact that you live in California (physical presence), you will be subject to taxation on your worldwide income. You could incorporate in Nevada or Bangladesh, and California will still levy its taxation on any business income (Single Member LLCs are disregarded as separate corporate entities, but still taxed at ordinary income rates on the personal income tax basis). To make things worse, if California examines your Single Member LLC and finds that it is doing business in California, based on the fact that its sole owner is based in California all year long, you could feasibly end up with additional penalties for having neglected to file your LLC in California (California LLCs are considered domestic, and only file in California unless they wish to do business in other states; Nevada LLCs are considered foreign to California, requiring the owner to file a domestic LLC organization in Nevada and then a foreign LLC organization in California, which still gets hit with the minimum $800 franchise fee because it is a foreign LLC doing business in California). Evading any filing responsibility in California is not advisable. FTB consistently researches LLCs, S-Corporations and the like to determine whether they've been organized out-of-state but still principally operated in California, thus having a tax nexus with California and the subsequent requirement to be filed in California and taxed by California. No one likes paying taxes, and no one wants to get hit with franchise fees, especially when one is starting a new venture and that minimum $800 assessment seems excessive (in other words, you could have a company that earns nothing, zero, zip, nada, and still has to pay the $800 minimum fee), but the consequences of shirking tax laws and filing requirements will make the franchise fee seem trivial in comparison. If you're committed to living in California and desire to organize an LLC or S-Corp, you must file with the state of California, either as a domestic corporation/LLC or foreign corporation/LLC doing business in California. The only alternatives are being a sole proprietor (unincorporated), or leaving the state of California altogether. Not what you wanted to hear I'm sure, but that's the law.",
"title": ""
},
{
"docid": "362888dad7a489b2fecb115aab213605",
"text": "In this case not only that you must register in California (either as domestic, or as foreign if you decided to form elsewhere), you'll also be on the hook for back-taxes if you didn't do it from the start. FTB is notorious for going after out-of-state LLCs that Californians open in other States trying to avoid the $800 fee.",
"title": ""
},
{
"docid": "d07379d9352e2084e5156e5ebf7d3235",
"text": "In GA, LLC fees are $50 a year. Incorporating is a one time $100 fee. This information is current as of September 2013.",
"title": ""
}
] |
[
{
"docid": "b11c1807668b0b0b3630b0e41f2d1cd6",
"text": "You won't be able to avoid the $800 fee. CA FTB has a very specific example, which is identical to your situation (except that they use NV instead of AZ), to show that the LLC has liability in California. State of formation is of no matter, you'll just be liable for fees in that state in addition to the CA fees. This is in fact a very common situation (that's why they have this as an example to begin with). See CA FTB 568 booklet. The example is on page 14. I suggest forming the LLC in AZ/CA and registering it as a foreign entity in the other state (AZ if formed in CA, the better option IMHO, or CA if formed in AZ). You'll have tax liability in both the states, AZ taxes can be credited towards the CA taxes. Instead of forming LLC, you can cover your potential liability with sufficient insurance coverage.",
"title": ""
},
{
"docid": "49af7aa1976b53feba7306586aa787c1",
"text": "You may be able to, depending on what state you're in, but it is going to be 10x more complicated than just forming a new LLC. I don't see an advantage to this approach - if you're imagining it will be cheaper, you are imagining wrong.",
"title": ""
},
{
"docid": "28d9aa347dd6586e63001086f0a889da",
"text": "California is very aggressive when it comes to determining residency. While you have a legitimate defense, I suggest talking with a California-licensed CPA or EA practicing in California, which are experienced in dealing with the FTB residency audits.",
"title": ""
},
{
"docid": "bca4fd8eebb48bd815866fbf47824e7e",
"text": "Forms for the Colorado LLCs are online. You can find the link to the dissolution form here, and instructions here. IRS instructions are here. That's what they want: To close your business account, send us a letter that includes the complete legal name of the entity, the EIN, the business address and the reason you wish to close your account. If you have a copy of the EIN Assignment Notice that was issued when your EIN was assigned, include that when you write to us at: Internal Revenue Service Cincinnati, Ohio 45999 Everything is pretty straight forward. Note that you might be required to file a initial/final tax return if you had any transactions.",
"title": ""
},
{
"docid": "014eed84264edbbd345b926d91b2fd96",
"text": "Delaware LLC requires that each business entity have and hold an enterprise Registered in the State of Delaware who can be both a character resident or enterprise entity this is legal to do business in the Wilmington, Delaware. the Delaware LLC has offered the same asset protections and tax advantages that a corporation offers. Often the LLC is the simpler, more flexible choice for small businesses. This small amount of required information not only makes it easy to start an LLC in Delaware, but it also helps to keep your identity and personal information secure.",
"title": ""
},
{
"docid": "20ddde4441bb0e5a4d7ee4f81e44300d",
"text": "According to the Illinois Department of Revenue, you don't have to file any taxes that are specific to a LLC, only your personal taxes. LLC on Federal level is disregarded, instead you submit all your business income/expenses on Schedule C. On the state level - it seems to be the same (only individual tax return). Consult your state certified tax specialist. That is not the case in other states, for example in California LLC has to file its own tax return and pay its own taxes, in additional to the individual taxes.",
"title": ""
},
{
"docid": "3c4e68fdc0aab40d75d449b9f4deae58",
"text": "Thanks for your input. > Are you talking about domicile? Nope, **domestication**. See #2 [here]. I've seen that term on a few places on the web. I am a single-member LLC. I think I'll probably get a biz attorney. Do you think it matters whether the attorney is within the state I currently reside as opposed to the one I'm moving to?",
"title": ""
},
{
"docid": "5e725b58b1b28fc1dfc5ca7b43ed7c8f",
"text": "\"Did it show just your address, or was your name on it as well? You didn't share how long you've lived at the address either, so it makes me wonder whether a former tenant is the one who filed that paperwork. It's also possible that someone used your address when making a filing. Whether that was deliberate or accidental is hard to discern, as is their intent if it was intentional. It could be accidental -- someone picked \"\"CA\"\" for California when they meant to pick \"\"CO\"\" for Colorado or \"\"CT\"\" for Connecticut...These things do happen. It can't make you feel any better about the situation though. You should be able to go online to the California Secretary of State's website (here) and look up everything filed by the LLC with the state. That will show who the founders were and everything else that is a matter of public record on the LLC. At the very least, you can obtain the registered agent's name and address for the LLC, which you can then use to contact them and ask why your address is listed as the LLC's business address. Once you have that info, you can then contact the Secretary of State and tell them it isn't you so they can do whatever is necessary to correct this. This doesn't sound like a difficult matter to clear up, but it's important to do your homework first and gather as much information as you can before you call the state. Answering \"\"I don't know\"\" won't get you very far with them compared to having the best answers you can about where the mistake started. I hope this helps. Good luck!\"",
"title": ""
},
{
"docid": "077e69dfbbb8d8112c446114db179a4c",
"text": "As a nonresident sole proprietor or partnership You are not a sole proprietor or a member of a legal partnership. You are an employee for a corporation. Does the nature of your work require you to be present in New York regularly? If you are in New York for personal reasons, you are simply telecommuting. You must pay taxes personally for your W-2 income, but your business entity never moved from Wyoming. If this were not true, companies would have to pay corporate income tax to every state in which they have a telecommuter. For example, I live in Florida but telecommute to a company in Michigan. Does my employer pay Florida business tax? Of course not. Your business would only owe New York if the nature of the business requires a consistent and regular business presence in New York, such as maintaining an office for a portion of every year so clients could see you.",
"title": ""
},
{
"docid": "fc59501a4df5c48c7597422b6908fbad",
"text": "I suspect you will need to consult with a tax professional on this one. In New York you would need to continue to file returns even if you did no business there until the partnership is dissolved. But I have no idea if Cali has anything rules like that. I would suspect since the partnership is on going the answer is no. Even though you plan no further business in Cali the potential exists that you could return there(even if only in theory).",
"title": ""
},
{
"docid": "6bb6a1a14e9041f629aaad59a6f59497",
"text": "\"SOS stands for Secretary of State. The California Department of State handles the business entities registration, and the website is here. See \"\"Forms\"\" in the navigation menu on the left. Specifically, you'll be looking for LLC-5.\"",
"title": ""
},
{
"docid": "eccc86c65137baf66ef701e51c2ed47f",
"text": "You put your Michigan address. The incorporation address is of no concern for the IRS, they couldn't care less where you're incorporated - it has no effect on your tax liability. The address is used when audited, and the IRS expects you to give the address where the records are (i.e.: where the business, aka you, is physically located).",
"title": ""
},
{
"docid": "d1248d34c35232a822321595a0794fa0",
"text": "This is an older question but I thought I'd give the correct response for anyone else that might look. Yes there definitely could be issues. You can form in friendly states such as Delaware and Nevada without having a physical location in the state but you can't run a business from another state without having to 'qualify' to do business in that State. To give a bit more clarification. Lets say you open a Delaware LLC. But you answer the phone when it rings on your New York phone and money comes into your New York bank account and your suppliers and vendors all use your New York address to send invoices and correspondence. Well you can pretty much count that you fall into the definition of doing business in New York and expected to pay New York taxes and qualify to do business in the state. The solution would be to set up your business to truly 'operate' from the state you would rather be in.",
"title": ""
},
{
"docid": "ddc4567aaa01aa91837cb7c8690619ea",
"text": "\"If you intend to do business \"\"outside the country\"\", why establish an LLC \"\"here\"\" at all? You should establish a business in your home country if you desire business organization for sequestering liabilities or something. With or without a business organization, you will presumably be taxed for domestic income \"\"there\"\", wherever that is.\"",
"title": ""
},
{
"docid": "70edc1fac438a42eff7c8d79af5963bf",
"text": "As far as the spam mail goes, I own a rental (in Connecticut) and live in Massachusetts, I get very little mail related to this property. I view this as a non-compelling reason. Your other reasons pick up quick in value. The protection from the rest of your assets is helpful, and the one con for most is the inability to get a loan with such a structure, but in your case, a cash purchase is mentioned. I don't know what the fees are to start an LLC, but overall, I believe the pros outweigh the cons. Yes, your Pro 4 looks good, an ongoing business with a track record will help the next purchase.",
"title": ""
}
] |
fiqa
|
4d8ac841b2c504de46d78d0641b40d12
|
Do altcoin trades count as like-kind exchanges? (Deferred capital gains tax)
|
[
{
"docid": "3e22751def8b89bb10e4d0bed0c140c5",
"text": "\"In June 2016 the American Institute of CPAs sent a letter to the IRS requesting guidance on this question. Quoting from section 4 of this letter, which is available at https://www.aicpa.org/advocacy/tax/downloadabledocuments/aicpa-comment-letter-on-notice-2014-21-virtual-currency-6-10-16.pdf If the IRS believes any property transaction rules should apply differently to virtual currency than to other types of property, taxpayers will need additional guidance in order to properly distinguish the rules and regulations. Section 4, Q&A-1 of Notice 2014-21 states that “general tax principles applicable to property transactions apply to transactions using virtual currency,” which is guidance that is generally helpful in determining the tax consequences of most virtual currency transactions. However, if there are particular factors that distinguish one virtual currency as like-kind to another virtual currency for section 1031 purposes, the IRS should clarify these details (e.g., allowing the treatment of virtual currency held for investment or business as like-kind to another virtual currency) in the form of published guidance. Similarly, taxpayers need specific guidance of special rules or statutory interpretations if the IRS determines that the installment method of section 453 is applied differently for virtual currency than for other types of property. So, at the very least, a peer-reviewed committee of CPAs finds like-kind treatment to have possible grounds for allowance. I would disagree with calling this a \"\"loophole,\"\" however (edit: at least from the viewpoint of the taxpayer.) At a base technological level, a virtual currency-to-virtual currency exchange consists of exchanging knowledge of one sequence of binary digits (private key) for another. What could be more \"\"like-kind\"\" than this?\"",
"title": ""
},
{
"docid": "e042e3439f9834513f29dee86999b6e3",
"text": "Just a thought because this is a really good question: Would the buying and selling of blockchain based digital currency, using other blockchain based digital currencies, be subject to like kind treatment and exempt from capital gains until exchanged for a non-blockchain based good or service (or national currency) Suppose someone sells 1 bitcoin to buy 100 monero. Monero's price and bitcoin's price then change to where the 100 monero are 3 bitcoins. The person gets their bitcoin back and has 66.67 monero remaining. This scenario could be: Suppose someone sells 1 bitcoin at $1000 to buy 100 monero at $10. Bitcoin crashes 80% to $200 while monero crashes to only $6 per monero. $6 times 100 is $600 and if the person gets their bitcoin back (at $200 per bitcoi), they still lost money when measured in US Dollars if they move that bitcoin back to US dollars. In reading the IRS on bitcoin, they only care about the US dollar value of bitcoin or monero and in this example, the US dollar value is less. The person may have more bitcoins, but they still lost money if they sell.",
"title": ""
},
{
"docid": "278761b17fa57982144a46c66491ce57",
"text": "Like-kind of exchanges have a list of requirements. The IRS has not issued formal guidance in the matter. I recommend to be aggressive and claim the exchange, while justifying it with a good analogy to prove good faith (and persuade the IRS official reading it the risk of losing in tax court would be to high). Worst case the IRS will attempt to reject the exchange, at which point you could still pony up to get rid of the problem, interest being the only real risk. For example: Past tax court rulings have stated that collectable gold coins are not like kind to gold bars, and unlike silver coins, but investment grade gold coins are like kind to gold bars. So you could use a justification like this: I hold Bitcoin to be like-kind to Litecoin, because they use the same fundamental technology with just a tweak in the math, as if exchanging different grades of gold bars, which has been approved by tax court ruling #xxxxx. Note that it doesn't matter whether any of this actually makes sense, it just has be reasonable enough for you to believe, and look like it is not worth pursuing to an overworked IRS official glancing at it. I haven't tried this yet, so up to now this is a guess, but it's a good enough guess in my estimation that I will be using it on some rather significant amounts next year.",
"title": ""
}
] |
[
{
"docid": "e4400a7636443a8fdf6a27512a0d7910",
"text": "I would think you need proof that you actually bought it when it was cheaper, but that's a guess. You are supposed to pay the capital gains tax on bitcoin gains, same as if you made money on a stock https://www.google.com/amp/s/www.forbes.com/sites/greatspeculations/2017/02/21/if-you-traded-bitcoin-you-should-report-capital-gains-to-the-irs/amp/",
"title": ""
},
{
"docid": "f72e4c4ced09e034dd3fe9a774d88945",
"text": "\"You're right. I did include \"\"is it reasonable\"\" in the title. Therefore that brings in the acceptability of those taxes. However I am making the case that I would like capital gains to be taxed most similarly to regular income (or at least in a parallel bracket), which is independent of the amount needed to be brought in. I think parallel brackets would be the most productive since it would encourage people to both produce and invest, because you would get the lowest taxes by maximizing both.\"",
"title": ""
},
{
"docid": "011e9897d17a8fb2bdf51334643d8c69",
"text": "1031 is a section of the U.S. Internal Revenue Service Code that allows investors to defer capital gains taxes on any exchange of like-kind properties for business or investment purposes. Taxes on capital gains are not charged on the sale of a property if the money is being used to purchase another property - the payment of tax is deferred until property is sold with no re-investment.",
"title": ""
},
{
"docid": "f824112e5846e465882fb442b9ec6dd2",
"text": "\"As an exercise, I want to give this a shot. I'm not involved in a firm that cares about liquidity so all this stuff is outside my purview. As I understand it, it goes something like this: buy side fund puts an order to the market as a whole (all or most possibly exchanges). HFTs see that order hit the first exchange but have connectivity to exchanges further down the pipe that is faster than the buy side fund. They immediately send their own order in, which reaches exchanges and executes before the buy side fund's order can. They immediately put up an ask, and buy side fund's order hits that ask and is filled (I guess I'm assuming the order was a market order from the beginning). This is in effect the HFT front running the buy side fund. Is this accurate? Even if true, whether I have a genuine issue with this... I'm not sure. Has anyone on the \"\"pro-HFT\"\" side written a solid rebuttal to Lewis and Katsuyama that has solid research behind it?\"",
"title": ""
},
{
"docid": "3fa31b1975e0d7a3e9f65372d31635a5",
"text": "Capital losses do mirror capital gains within their holding periods. An asset or investment this is certainly held for a year into the day or less, and sold at a loss, will create a short-term capital loss. A sale of any asset held for over a year to your day, and sold at a loss, will create a loss that is long-term. When capital gains and losses are reported from the tax return, the taxpayer must first categorize all gains and losses between long and short term, and then aggregate the sum total amounts for every single regarding the four categories. Then the gains that are long-term losses are netted against each other, therefore the same is done for short-term gains and losses. Then your net gain that is long-term loss is netted against the net short-term gain or loss. This final net number is then reported on Form 1040. Example Frank has the following gains and losses from his stock trading for the year: Short-term gains - $6,000 Long-term gains - $4,000 Short-term losses - $2,000 Long-term losses - $5,000 Net short-term gain/loss - $4,000 ST gain ($6,000 ST gain - $2,000 ST loss) Net long-term gain/loss - $1,000 LT loss ($4,000 LT gain - $5,000 LT loss) Final net gain/loss - $3,000 short-term gain ($4,000 ST gain - $1,000 LT loss) Again, Frank can only deduct $3,000 of final net short- or long-term losses against other types of income for that year and must carry forward any remaining balance.",
"title": ""
},
{
"docid": "9c913aa51881967e18ada87b98694a77",
"text": "\"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.\"",
"title": ""
},
{
"docid": "b3371f553b12a1b7800b33aa60fbd97b",
"text": "Yes (most likely). If you are exchanging investments for cash, you will have to pay tax on that - disregarding capital losses, capital loss carryovers, AGI thresholds, and other special rules (which there is no indication of in your question). You will have to calculate the gain on Schedule D, and report that as income on your 1040. This is the case whether you buy different or same stocks.",
"title": ""
},
{
"docid": "be6286192952ce5f265cd62cc87a30a8",
"text": "\"For restricted stock, I think the vesting date meets the requirements of the second wash sale trigger from IRS Pub 550: Wash Sales: Acquire substantially identical stock or securities in a fully taxable trade I base this on these two quotes from IRS Pub 525: Restricted Property: any income from the property, or the right to use the property, is included in your income as additional compensation in the year you receive the income or have the right to use the property. - Until the property becomes substantially vested, it is owned by the person who makes the transfer to you, usually your employer. So on the vest date: The transfer is taxable Ownership is transferred to you That seems close enough to \"\"a fully taxable trade\"\" for me. Maybe this changes if you pay the tax on the stock on the grant date. See Pub 525: Restricted Property: Choosing to include in income for year of transfer. Obviously, if this is important you should consult your tax advisor. Technicalities aside, I don't think it passes the sniff test. You're getting salable shares when the restricted stock vests. If you're selling other shares at a loss within 30 days of the vesting date, that smells like a wash sale to me.\"",
"title": ""
},
{
"docid": "473172c8942be1448d8003049b914273",
"text": "short answer: no, not to my knowledge long answer: why do you want to do that? crypto are very volatile and, in my opinion, if you are looking for a speculative exercise, you are better off seeking to understand basic technical analysis and trading stocks based on that",
"title": ""
},
{
"docid": "7272c31978e10ac0038691e7e9e1f605",
"text": "\"The only \"\"authoritative document\"\" issued by the IRS to date relating to Cryptocurrencies is Notice 2014-21. It has this to say as the first Q&A: Q-1: How is virtual currency treated for federal tax purposes? A-1: For federal tax purposes, virtual currency is treated as property. General tax principles applicable to property transactions apply to transactions using virtual currency. That is to say, it should be treated as property like any other asset. Basis reporting the same as any other property would apply, as described in IRS documentation like Publication 550, Investment Income and Expenses and Publication 551, Basis of Assets. You should be able to use the same basis tracking method as you would use for any other capital asset like stocks or bonds. Per Publication 550 \"\"How To Figure Gain or Loss\"\", You figure gain or loss on a sale or trade of property by comparing the amount you realize with the adjusted basis of the property. Gain. If the amount you realize from a sale or trade is more than the adjusted basis of the property you transfer, the difference is a gain. Loss. If the adjusted basis of the property you transfer is more than the amount you realize, the difference is a loss. That is, the assumption with property is that you would be using specific identification. There are specific rules for mutual funds to allow for using average cost or defaulting to FIFO, but for general \"\"property\"\", including individual stocks and bonds, there is just Specific Identification or FIFO (and FIFO is just making an assumption about what you're choosing to sell first in the absence of any further information). You don't need to track exactly \"\"which Bitcoin\"\" was sold in terms of exactly how the transactions are on the Bitcoin ledger, it's just that you bought x bitcoins on date d, and when you sell a lot of up to x bitcoins you specify in your own records that the sale was of those specific bitcoins that you bought on date d and report it on your tax forms accordingly and keep track of how much of that lot is remaining. It works just like with stocks, where once you buy a share of XYZ Corp on one date and two shares on another date, you don't need to track the movement of stock certificates and ensure that you sell that exact certificate, you just identify which purchase lot is being sold at the time of sale.\"",
"title": ""
},
{
"docid": "2344c287634cb6e22a4b35f37aee3997",
"text": "Sale of a stock creates a capital gain. It can be offset with losses, up to $3000 more than the gains. It can be deferred when held within a retirement account. When you gift appreciated stock, the basis follows. So when I gifted my daughter's trust shares, there was still tax due upon sale. The kiddy tax helped reduce but not eliminate it. And there was no quotes around ownership. The money is gone, her account is for college. No 1031 exchange exists for stock.",
"title": ""
},
{
"docid": "b2ba7e62423d2a5034918ec4625a3eab",
"text": "It looks like it has to deal with an expiration of rights as a taxable event. I found this link via google, which states that Not only does the PSEC shareholder have a TAXABLE EVENT, but he has TWO taxable events. The net effect of these two taxable events has DIFFERENT CONSEQUENCES for DIFFERENT SHAREHOLDERS depending upon their peculiar TAX SITUATIONS. The CORRECT STATEMENT of the tax treatment of unexercised PYLDR rights is in the N-2 on page 32, which reads in relevant part as follows: “…, if you receive a Subscription Right from PSEC and do not sell or exercise that right before it expires, you should generally expect to have (1) taxable dividend income equal to the fair market value (if any) of the Subscription Right on the date of its distribution by PSEC to the extent of PSEC’s current and accumulated earnings and profits and (2) a capital loss upon the expiration of such right in an amount equal to your adjusted tax basis (if any) in such right (which should generally equal the fair market value (if any) of the Subscription Right on the date of its distribution by PSEC).” Please note, for quarterly “estimated taxes” purposes, that the DIVIDEND taxable events occur “ON THE DATE OF ITS DISTRIBUTION BY PSEC (my emphasis),” while the CAPITAL LOSS occurs “UPON EXPIRATION OF SUCH RIGHT” (my emphasis). They do NOT occur on 31 December 2015 or some other date. However, to my knowledge, neither of the taxable events he mentions would be taxed by 4/15. If you are worried about it, I would recommend seeing a tax professional. Otherwise I'd wait to see the tax forms sent by your brokerage.",
"title": ""
},
{
"docid": "8958b5c15f7245431cc66cdfeca66ed0",
"text": "Questrade is a Canada based broker offering US stock exchange transactions as well. It says this right on their homepage. ETFs are traded like stocks, so the answer is yes. Why did you think they only offered funds?",
"title": ""
},
{
"docid": "891a71c4b58b0b1d82e65a1683241bf6",
"text": "As long as the tax rate is below 100%, there is still money to make. You pay taxes on your gain, not on your trading volume. Taxed income is still income - many people seem to get that wrong.",
"title": ""
},
{
"docid": "174500b2d286ea36587834083f1490ed",
"text": "Different exchanges sometimes offer different order types, and of course have different trading fees. But once a trade is finished, it should not matter where it was executed.",
"title": ""
}
] |
fiqa
|
a25363ac0006a5b2638ecbc4c8e7ab30
|
Which state do saving interests come from?
|
[
{
"docid": "3b7fd84cef86ec642912dd0ad4a815e3",
"text": "\"Most (if not all states) in the US are only interested in source income. If you worked in that state they want to tax it. Many states have reciprocity agreements with neighboring states to exempt income earned when a person works in lets say Virginia, but lives in a state that touches Virginia. Most states don't consider interest and dividends for individuals as source income. They don't care where the bank or mutual fund branch is located, or headquartered.If it is interest from a business they will allocate it to the state where the business is located. If you may ask you to allocate the funds between two states if you move during the year, but most people will just divide the interest and dividends based on the number of days in each state unless there is a way to directly allocate the funds to a particular state. Consider this: Where is the money when it is in a bank with multiple branches? The money is only electronic, and your actual \"\"$'s\"\" may be in a federal reserve branch. Pension funds are invested in projects all over the US.\"",
"title": ""
}
] |
[
{
"docid": "298f97b87a3217ca3f460febf647f8ea",
"text": "In the U.S., each state has its own local usury law. This website has a separate page for each state summarizing the local usury law and provides a reference to the local statute. The rules aren't simple: some set absolute limits, some appear to be pegged to something like the Prime Rate, some states don't have a general usury limit, the rules don't apply to certain loans because of the type of loan or lender, etc. There are US Federal laws dealing with usury, primarily in the context of racketeering -- the RICO Act lets the Feds go after racketeers that violate local usury laws beyond certain parameters.",
"title": ""
},
{
"docid": "25f6e60d86b2018e03e745d9875ca421",
"text": "So let me get this straight... anti-tax warriors who argue from a right-wing libertarian stance that financial liberty is the most important form of liberty want to hold the taxpayers hostage to force the bloated federal government to fund a wall on the southern border of the United States that comprises the territory of multiple state governments, without allowing for those state governments and their citizens the liberty to decide for themselves, nor advocating for private capitalist interests to fund the wall out of their own pockets via private land ownership along the border, which is the hallmark of their entire economic theory?",
"title": ""
},
{
"docid": "9260d7914565efeb04f48b64c81ce1de",
"text": "529 Plans must be sponsored by a state. There are sometimes several plans sponsored by a state, but the trick is picking the plan with the lowest costs, just like any investment account. Clark Howard has a nice guide and recommendations for picking 529 plans. If you live in a state on his honor roll, invest in that state plan for extra tax benefits. If you don't, invest in one of his dean's list plans. You may invest in any plan from any state you like. You can buy the plan directly without the expense of a broker. Put the plan in your name and name the student as a beneficiary, do NOT put the plan in the student's name. This will help out when it comes time to apply for financial aid.",
"title": ""
},
{
"docid": "1219899e77e7652119dcd3b2634cde94",
"text": "Fun Fact: Illinois is poised to have their credit rating downgraded to junk status. If they fall and NJ continues to decline we could see 5 states with this credit rating withing 5 years. (NJ and CONN are close) with several others slipping as well.",
"title": ""
},
{
"docid": "92646e62adc1f9101702348014593e10",
"text": "Institutional investors are not just rich guys they are rich guys managing money wherever it is left. Banks, retirement funds, hedge funds, pension funds, the social security fund (though they only invest in the US government) Edit: the pension fun is idle capital looking to bring in returns.",
"title": ""
},
{
"docid": "ddd515b9ee7e1314156eac28ec463373",
"text": "Remind me again who held and was willing to loan out that debt? The investor classes partly created the risk environment that they now want protection from. convenient. If they're going to sit on their savings, they're going to comparatively lose more to inflation, so what you think will happen probably wouldn't happen. And even if they do, savings don't receive preferential tax treatment anyways.",
"title": ""
},
{
"docid": "44c10f3f81716241e5ff07cc901a373c",
"text": "well, probably taxed a little. and taxed when they spend it, and taxed again when it is spent again. like fikirte said, this is foreign money. if the americans want access to it they have to make it easy. they've done it in the past http://law-journals-books.vlex.com/vid/the-portfolio-interest-exemption-53348889 sorry there is a lack of sources in real english.",
"title": ""
},
{
"docid": "bd2b50466c2fb48a74a03351450603f0",
"text": "529 plans. They accumulate earnings over time and by the time your child goes to college you will be able to withdraw funds for college TAX FREE. The best part about 529s is that there are several different options you can choose from, and you aren't limited to the plans sponsored by your state, you can use whichever plan works best for you. For example, I live in South Carolina and use Utah's Educational Savings Plan because it has no minimum amount to open one up and it has low fees. Hope this helped. Good luck with your search!",
"title": ""
},
{
"docid": "75ef0645a8ecfd404dbbd08dee213b01",
"text": "The reason for these low interests is that the Japanese central bank is giving away money at negative interests to banks. Yes, negative. So, short of opening your own bank, you'll have to either choose less liquid investments or more risky ones. Get Japanese government bonds. Not a great interest, band not that liquid, but for a 5 years bond you'll do better than the bank can. Get Japanese corporate bonds. Still not great, and a bit more risky, it's better than nothing. Get a Japanese mutual fund. I can't recommend any though. Buy Japanese stock. Many Japanese stock have interesting kickbacks. For example if you buy enough stock of Book-Off you'll get some free books every month. it's risky though because I believe the next NIKKEI index crash is imminent.",
"title": ""
},
{
"docid": "5fd0846b4f3cec3aa406476b8c76bb6b",
"text": "\"As an addendum to PeterK's answer, once upon a time, there were many Savings and Loan Associations (S&Ls) that acted as small banks, accepting savings deposits from people and lending money for home mortgages to local residents. Some of these S&Ls were chartered Federally with deposits insured by the FSLIC (similar to the FDIC which still insures deposits in banks) while others had State charters and used the State equivalent of FSLIC as the insurer. To induce people to save with S&Ls instead of banks, S&Ls paid higher rates of interest on their savings accounts than banks were permitted to do on bank savings accounts. Until 1980, S&Ls were not permitted to make consumer or commercial loans, have checking accounts, issue credit cards, etc., but once the US Congress in its wisdom permitted this practice, this part of the business boomed. (Note for @RonJohn: Prior to 1980, S&Ls offered NOW accounts on which \"\"checks\"\" (technically, Negotiated Orders of Withdrawal) could be written but they were not checks in the legal sense, and many S&Ls did not return these paid \"\"checks\"\" with the monthly statement as all banks did; writing a \"\"check\"\" while pressing hard created a carbon copy that could be used as proof of payment). In just a few years' time, many S&Ls crashed because they were not geared to handle the complexities of the new things that they were permitted to do, and so ran into trouble with bad loans as well as outright fraud by S&L management and boards of directors etc. After the disappearance of most S&Ls, many small banks (often with State charters only) sprang up, and that's why there are so many banks in the US. Mortgage lending is a lucrative business (if done right), and everyone wants to get into the business. Note that 4 branches of Bank of America in a Florida town is not a sign of many banks; the many different banks that the OP noticed in Maine is.\"",
"title": ""
},
{
"docid": "20f7479b8a5c1d1d02e6f603d3fbd0c6",
"text": "There are several variables to consider. Taxes, fees, returns. Taxes come in two stages. While adding money to the account you can save on state taxes, if the account is linked to your state. If you use an out of state 529 plan there is no tax savings. Keep in mind that other people (such as grandparents) can set aside money in the 529 plan. $1500 a year with 6% state taxes, saves you $90 in state taxes a year. The second place it saves you taxes is that the earnings, if they are used for educational purposes are tax free. You don't pay taxes on the gains during the 10+ years the account exists. If those expenses meet the IRS guidelines they will never be taxed. It does get tricky because you can't double dip on expenses. A dollar from the 529 plan can't be used to pay for an expenses that will be claimed as part of the education tax credit. How those rules will change in the next 18 years is unknown. Fees: They are harder to guess what will happen over the decades. As a whole 401(k) programs have had to become more transparent regarding their fees. I hope the same will be true for the state run 529 programs. Returns: One option in many (all?) plans is an automatic change in risk as the child gets closer to college. A newborn will be all stock, a high school senior will be all bonds. Many (all?) also allow you to opt out of the automatic risk shift, though they will limit the number of times you can switch the option. Time horizon Making a decision that will impact numbers 18 years from now is hard to gauge. Laws and rules may change. The existence of tax breaks and their rules are hard to predict. But one area you can consider is that if you move states you can roll over the money into a new account, or create a second account in the new state. to take advantage of the tax breaks there. There are also rules regarding transferring of funds to another person, the impact of scholarships, and attending schools like the service academies. The tax breaks at deposit are important but the returns can be significant. And the ability shelter them in the 529 is very important.",
"title": ""
},
{
"docid": "471649a91d866690eaed3d821dc0c8de",
"text": "That sounds interesting.. As I was looking through some articles on [wealth management](http://www.millionairemindevents.com/) the same question came into my mind. Where did money originated. It would be interesting to read some books about it. Thanks for the suggestion.",
"title": ""
},
{
"docid": "f17ea3ea13adcec5a67e063bb2b58a9f",
"text": "Yes, it's considered the students asset, regardless of the custodian aspect. I don't know how you'd propose to put it in a retirement account, even with the earned income to facilitate this, the limit is $5500/yr. The larger issue is parental income. That and parental assets. Tough to game that part of the system to get aid. In the end, one should look to scholarships, both merit and non merit based to maximize college support.",
"title": ""
},
{
"docid": "5613ca427dabaf93781b5960043945ed",
"text": "\"In the US, usury is complicated and depends on the type of account, the bank charter and the where the bank makes credit decisions. Most major US credit cards are issued by entities in Utah, South Dakota and Delaware. None of these states have usury limits. Many states have usury limits. In New York, for example a loan may not exceed 16% interest, if the institution is supervised by the State. Credit card issuers are usually chartered as \"\"National Associations\"\" (ie Federally chartered banks regulated by the Comptroller of the Currency). There is no Federal usury statute, and Federally chartered banks are allowed to \"\"export\"\" many of the regulations of the state where credit decisions are made. Small states like South Dakota basically design their banking regulations to meet the needs of the banks, which are major employers.\"",
"title": ""
},
{
"docid": "7127dc391b3cc748678e3630ba406e13",
"text": "Why should capital gains be taxed at a lower rate than labor? It is because the tax code is really a philosophical tool (while also raising the revenues required to fund the government). I get to vote for federal, state and local representatives. The constitution is a Federal system. That should be sufficient reason for 100% of the conservative movement -- Trumpists exist in a separate category, but their share of the electorate dwindles with every tweet.",
"title": ""
}
] |
fiqa
|
e825307159f8ee9df00f90d441f98bfa
|
Incorporating, issuing stock and evaluating it
|
[
{
"docid": "aad610e3a0fb5a902164d4ff0b71f472",
"text": "No. Mark-to-market valuation relies on using a competitive market of public traders to determine the share price --- from free-market trading among independent traders who are not also insiders. Any professional valuation would see through the promotional nature of the share offer. It is pretty obvious that the purchaser of a share could not turn around and sell their share for $10, unless the 'free hosting' that is worth most of the $10 follows it... and that's more of hybrid of stock and bond than pure stock. It is also pretty obvious that selling a few shares for $10 does not mean one could sell 10,000,000 shares for $10, because of the well known decreasing marginal value effect from economics. While this question seems hypothetical, as a practical matter offering to sell share of unregistered securities in a startup for $10 to the general public, is likely to run afoul of state or federal securities laws -- irregardless of the honesty of the business or any included promotional offers. See http://www.sec.gov/info/smallbus/qasbsec.htm for more information about the SEC regulations for raising capital for small businesses.",
"title": ""
}
] |
[
{
"docid": "f647dec432cc64c784b8e4707e83ead2",
"text": "I was wondering why equity is reflecting ownership of the issuing entity? That is the definition of equity in this regard. My understanding is that for a stock/equity, its issuing entity is a company/firm that sells the stock/equity, while its receiving entity is an investor that buys the stock/equity Correct. equity reflects ownership of the receiving entity i.e. investor Incorrect. Equity reflects ownership by the receiving entity of the issuing entity. That is, when you buy stock in a company (taking an equity stake in the company) you buy a piece of the company. It would be rather odd for the company to own a piece of you when you buy their stock.",
"title": ""
},
{
"docid": "f15e1b1e2d695565c4dfa9ef72174040",
"text": "\"The formulae #issued shares = #outstanding shares + #treasury shares looks right. However it looks like the Treasury Shares are treated as -ve in accounting books and thus the outstanding shares are more than issued shares to the extent of Treasury shares. Further info at \"\"Accounting for treasury stock\"\" on wiki\"",
"title": ""
},
{
"docid": "7ccebb6bcea7089d89b1fd72e66e3b81",
"text": "Thank you for replying. I'm not sure I totally follow though, aren't you totally at mercy of the liquidity in the stock? I guess I'm havinga hard time visualizing the value a human can add as opposed to say vwapping it or something. I can accept that you're right, just having a difficult time picturing it",
"title": ""
},
{
"docid": "d9b868a06fb178e5790de8cb625cead1",
"text": "\"The answer to your question has to do with the an explanation of \"\"shares authorized, issued and outstanding.\"\" Companies, in their Articles of Incorporation, specify a maximum number of shares they are authorized to issue. For example purposes let's assume Facebook is authorized to issue 100 shares. Let's pretend they have actually issued 75 shares, but only 50 are outstanding (aka Float, i.e. freely trading stock in the market) and stock options total 25 shares. So if someone owns 1 share, what percentage of Facebook do they own? You might think 1/100, or 1%; you might think 1/75, or 1.3%; or you might think 1/50, or 2%. 2% is the answer, but only on a NON-diluted basis. So today someone who owns 1 share owns 2% of Facebook. Tomorrow Facebook announces they just issued 15 shares to Whatsapp to buy the company. Now there are 65 shares outstanding and 90 issued. Now someone who owns 1 share of Facebook own only 1/65, or 1.5% (down from 2%)! P.S. \"\"Valuation\"\" can be thought of as the price of the stock at the time of the purchase announcement.\"",
"title": ""
},
{
"docid": "922ae0ac97a125d6aea9d7bae67c61cf",
"text": "No. Not directly. A company issues stock in order to raise capital for building its business. Once the initial shares are sold to the public, the company doesn't receive additional funds from future transactions of those shares of stock between the public. However, the company could issue more shares at the new higher price to raise more capital.",
"title": ""
},
{
"docid": "b150e9c76963f936b4a6cfa0b2a5ae48",
"text": "\"I'll skip the \"\"authorizing....\"\" and go right to uses of new shares: Companies need stock as another liquid asset for a variety of purposes, and if not enough stock is available, then may be forced to the open market to acquire, either by exchanging cash or taking on debt to get the cash.\"",
"title": ""
},
{
"docid": "8b82fb1b960b241080e16afd01ce6551",
"text": "\"Each company has X shares valued at $Y/share. When deals like \"\"Dragon's Den\"\" in Canada and Britain or \"\"Shark Tank\"\" in the US are done, this is where the company is issuing shares valued at $z total to the investor so that the company has the funds to do whatever it was that they came to the show to get funding to do, though some deals may be loans or royalties instead of equity in the company. The total value of the shares may include intangible assets of course but part of the point is that the company is doing an \"\"equity financing\"\" where the company continues to operate. The shareholders of the company have their stake which may be rewarded when the company is acquired or starts paying dividends but that is a call for the management of the company to make. While there is a cash infusion into the company, usually there is more being done as the Dragon or Shark can also bring contacts and expertise to the company to help it grow. If the investor provides the entrepreneur with introductions or offers suggestions on corporate strategy this is more than just buying shares in the company. If you look at the updates that exist on \"\"Dragon's Den\"\" or \"\"Shark Tank\"\" at least in North America I've seen, you will see how there are more than a few non-monetary contributions that the Dragon or Shark can provide.\"",
"title": ""
},
{
"docid": "7bc709e0c92e4abf2f119a1a3f385d46",
"text": "You can go to the required company's website and check out their investor section. Here is an example from GE and Apple.",
"title": ""
},
{
"docid": "f422fed82b5d6c8e6e19ddbb10d3fed2",
"text": "\"Well, this sub is generally pretty darn good. Among us are investment bankers, private equity analysts, valuation analysts, portfolio managers, traders, brokers, bachelors, masters, and doctorate students, etc. We're helpful, though sometimes snarky, and have an exceedingly low tolerance for bullshit. I love it here. And while your logic is sound, we can actually explore private equity directly, as while private and public equity are related, they are different enough to study separately, in my opinion. Private equity deals with private companies. By definition, these investments are illiquid (they cannot be easily sold like public stocks), and unmarketable (there is no ready market to trade these investments, like stock). They are generally held for longer time periods. At its earliest stage, private equity is synonymous with \"\"initial investment\"\" or \"\"seed funding.\"\" This includes (if we are maybe slightly liberal with our definition), the initial investment an entrepreneur makes into his business. At this stage, friends and family, angel investors and venture capital are present. At different points of a company lifecycle, different financiers become interested/applicable (mezzanine investors, etc.). The investment made into a company allocates a certain percentage of the ownership of the company to the investor in exchange for cash (usually). This cash is used to cover expenses and take on capital projects. The goal of these investments is to directly make the company (and its value, and thus the investor's value) grow. At some points in time, a new investor will show up and either invest directly in the company (same as before) or buy another investor's holding in the company (in which case, cash goes to *that specific investor* and *not* the company). At every stage of investment leading up to IPO, the deals are negotiated between the parties. The results of a given negotiation determines the value of that company's equity. For example, if I pay you $100 for 50% of your company, the company's implied worth is $200. If two days later, Joe comes and offers to buy 33% of the company for $100, the Company is worth $300. (Special note: these percentages are assumed to be the allocation of equity **after** the deal. In this last case, the ownership of your company would be 33% you, 33% me, and 33% Joe. This illustrates something called *dilution,* which is very important to investors as it effects their eventual potential payoff later down the road, along with some other things). At this point, do you have any questions?\"",
"title": ""
},
{
"docid": "7fb2ffdbc44f0f39716c4966623450b3",
"text": "\"First, you mentioned your brother-in-law has \"\"$100,000 in stock options (fully vested)\"\". Do you mean his exercise cost would be $100,000, i.e. what he'd need to pay to buy the shares? If so, then what might be the estimated value of the shares acquired? Options having vested doesn't necessarily mean they possess value, merely that they may be exercised. Or did you mean the estimated intrinsic value of those options (estimated value less exercise cost) is $100,000? Speaking from my own experience, I'd like to address just the first part of your question: Have you treated this as you would a serious investment in any other company? That is, have you or your brother-in-law reviewed the company's financial statements for the last few years? Other than hearing from people with a vested interest (quite literally!) to pump up the stock with talk around the office, how do you know the company is: BTW, as an option holder only, your brother-in-law's rights to financial information may be limited. Will the company share these details anyway? Or, if he exercised at least one option to become a bona-fide shareholder, I believe he'd have rights to request the financial statements – but company bylaws vary, and different jurisdictions say different things about what can be restricted. Beyond the financial statements, here are some more things to consider: The worst-case risk you'd need to accept is zero liquidity and complete loss: If there's no eventual buy-out or IPO, the shares may (effectively) be worthless. Even if there is a private market, willing buyers may quickly dry up if company fortunes decline. Contrast this to public stock markets, where there's usually an opportunity to witness deterioration, exit at a loss, and preserve some capital. Of course, with great risk may come great reward. Do your own due diligence and convince yourself through a rigorous analysis — not hopes & dreams — that the investment might be worth the risk.\"",
"title": ""
},
{
"docid": "adbdd54925b565f216b4280ab7340fb6",
"text": "Selling stock means selling a portion of ownership in your company. Any time you issue stock, you give up some control, unless you're issuing non-voting stock, and even non-voting stock owns a portion of the company. Thus, issuing (voting) shares means either the current shareholders reduce their proportion of owernship, or the company reissues stock it held back from a previous offering (in which case it no longer has that stock available to issue and thus has less ability to raise funds in the future). From Investopedia, for exmaple: Secondary offerings in which new shares are underwritten and sold dilute the ownership position of stockholders who own shares that were issued in the IPO. Of course, sometimes a secondary offering is more akin to Mark Zuckerberg selling some shares of Facebook to allow him to diversify his holdings - the original owner(s) sell a portion of their holdings off. That does not dilute the ownership stake of others, but does reduce their share of course. You also give up some rights to dividends etc., even if you issue non-voting stock; of course that is factored into the price presumably (either the actual dividend or the prospect of eventually getting a dividend). And hopefully more growth leads to more dividends, though that's only true if the company can actually make good use of the incoming funds. That last part is somewhat important. A company that has a good use for new funds should raise more funds, because it will turn those $100 to $150 or $200 for everyone, including the current owners. But a company that doesn't have a particular use for more money would be wasting those funds, and probably not earning back that full value for everyone. The impact on stock price of course is also a major factor and not one to discount; even a company issuing non-voting stock has a fiduciary responsibility to act in the interest of those non-voting shareholders, and so should not excessively dilute their value.",
"title": ""
},
{
"docid": "ff68b09fef2ab83c41d8cf7759d12c2c",
"text": "The point of that question is to test if the user can connect shares and stock price. However, that being said yeah, you're right. Probably gives off the impression that it's a bit elementary. I'll look into changing it asap.",
"title": ""
},
{
"docid": "b7deba6712b7fb28aabe4197b393aa59",
"text": "Assuming you are saying that the company issues 20,000 additional shares of its own stock and sells them for $8 each: The money from the sale is not income and not part of earnings. It is capital and appears on the balance sheet as part of shareholder's equity. With no other transactions, yes, the total of shares outstanding is increased by 20,000 to 100,000.",
"title": ""
},
{
"docid": "405279b2a7eb44babb0ab829e734ed52",
"text": "\"Check your broker's IPO list. Adding a new stock to a stock exchange is called \"\"Initial Public Offering\"\" (IPO), and most brokers have a list of upcoming IPO's in which their clients can participate.\"",
"title": ""
},
{
"docid": "934ef0bc0a19ea24509fa1f5c7af0b94",
"text": "In my original question, I was wondering if there was a mathematical convention to help in deciding on whether an equity offering OR debt offering would be a better choice. I should have clarified better in the question, I used Vs. which may have made it unclear.",
"title": ""
}
] |
fiqa
|
74477f435b7914ca348a9548ee590053
|
Pros and cons of using a personal assistant service to manage your personal finances?
|
[
{
"docid": "9f3741441e2ffe131f5a60b552372369",
"text": "Years ago I hired someone part time (not virtual however) to help me with all sorts of things. Yes it helps free up some time. However particularly with finances, it does take a leap of faith. If you have high value accounts that this person will be dealing with you can always get them bonded. Getting an individual with a clean credit history and no criminal background bonded usually costs < $600 a year (depending on $ risk exposure). I would start out small with tasks that do not directly put that person in control of your money. In my case I didn't have an official business, I worked a normal 9-5 job, but I owned several rental units, and an interest in a bar. My assistant also had a normal 9-5 job and worked 5-10 hours a week for me on various things. Small stuff at first like managing my calendar, reminding me when bills were due, shipping packages, even calling to set up a hair cut. At some point she moved to contacting tenants, meeting with contractors, showing apartments, etc... I paid her a fixed about each week plus expenses. I would pay her extra if I needed her more (say showing an apartment on a Saturday, or meeting a plumber). She would handled all sorts of stuff for me, and I gave her the flexibility when needed to fit things in with her schedule. After about a month I did get her a credit card for expenses. Obviously a virtual assistant would not be able to do some of these things but I think you get the point. Eventually when the trust had been built up I put her on most of my accounts and gave her some fiduciary responsibilities as well. I'm not sure that this level of trust would be possible to get to with a virtual assistant. However, with a virtual assistant you might be able to avoid one really big danger of hiring an assistant.... You see, several years later when I sold off my apartment buildings I no longer needed an assistant, so I married her. Now one good thing about that is I don't have to pay her now. ;)",
"title": ""
},
{
"docid": "e7ecc10268766997672000064e46af68",
"text": "\"Not knowing anything about your situation or what makes it so complex, I would have to agree with the other commenters. If your accountant screws up your business goes under, but at least your personal finances are safe from that and you'll recover (unless all your wealth is tied up in your business). If your virtual assistant uses your personal information to take all your money, ruin your credit, or any number of other things, you're going to spend a loooong time trying to get things \"\"back to normal\"\". If the few hours per month spent managing your finances is starting to add up, I might suggest looking into other ways to automate and manage them. For instance, are all of your bills (or as many as you can) e-bills that can be issued electronically to your bank? Have you set up online bill pay with your bank, so that you can automatically pay all the bills when they arrive? Have you tried using any number of online services (Mint, Thrive, your bank's \"\"virtual wallet/portfolio\"\") to help with budget, expense tracking, etc.? Again, I don't know your exact situation, but hopefully some of these suggestions help. Once I started automating my savings and a lot of my bill paying, it gave me a lot of peace of mind.\"",
"title": ""
},
{
"docid": "886833d12cd46731b76208dad290f407",
"text": "When you want to hire personal assistants, you must be sure that you are hiring in a trusted company or the person you talk to have been proven by a lot of people. You must be wise in choosing one because these people will handle some of your personal things and data.",
"title": ""
}
] |
[
{
"docid": "4eb21a693fbd8bfccffd42ad8ca2d72a",
"text": "I use mint.com for tracking my finances. It works on mobile phones, tablets, and in a browser. If you don't mind the initial hassle of putting in the credentials you use to access your account online, you'll find that you're able to build a comprehensive picture of the state of your finances relatively quickly. It does a great job of separating the various types of financial transactions you engage in, and also lets you customize those classifications with tags. It's ad-supported, so there's no out-of-pocket cost to you, and it doesn't preclude you from using the personal finance software you already have on your phone.",
"title": ""
},
{
"docid": "5ed2cb583c94cdfb5b01560cfa611d27",
"text": "So long as you don't hate what you are doing, I'd say the price is somewhere in the neighborhood of $100-200 year of income to be worth the bookkeeping. I'd only say more than that if you have a ridiculously complex tax situation, you have an irrational hatred of filling out a few forms once a year, or if you just have such a stupidly large amount of money that even having a few hundred dollars a year to donate to people in desperate need just doesn't mean anything to you. Or if you are under special income limits and just a few dollars of income would put you in a bad situation (like a loss of medical benefits, etc). The reason is actually quite simple: the taxes aren't really that hard or time consuming. I've handled three self-employment businesses in my life, and unless you are trying to itemize every last dollar of business deductions and expenses, or you really want to scrape out every last cent from minor deductions that require considerable extra paperwork, it's a few extra forms on your taxes. Most of the extra taxes are as a percentage, so it reduces the benefits, but really not by much. You don't have to make it extra complicated if the extra complexity doesn't give you a big payoff in benefit. I would suggest you pick the simplest imaginable possible system for accounting for this, so that you might only spend an extra few hours per year on the books and taxes. Don't keep $10 sheet music receipts if you feel it's a burden to try to itemize expenses, etc. Instead, the decision should be if you (or in this case your wife) would enjoy doing it, and bringing in money can just be nice in it's own way. I'd suggest she keep some out for little extra niceties, earmark some for feel-good charitable giving, and then of course sock away the rest. Don't let extra income be an unnecessary burden that prevents you from getting it in the first place.",
"title": ""
},
{
"docid": "8cb3cc79ade469823657cee0a47b0478",
"text": "I have used TurboTax successfully for a couple of years. In addition to things already mentioned, it has some forums where you can get some simple questions answered (with complex ones it's always better to consult the professional) and it can import some data from your salary provider if you're lucky (some companies are supported, some aren't) - then you save time on filling out W2s, and can allow you to track your donations with sister site ItsDeductible.com, compare data with last year, etc. Not sure how desktop software compares. So far I didn't see any downsides except for, of course, the fact that your information is available online. But in our times most companies offer online access to earnings statements, etc., anyway, and so far the weakest link for the financial information has proven to be retailers, not tax preparers.",
"title": ""
},
{
"docid": "02d85f7e04b21aed3be88ef5151f5718",
"text": "Well the idea of 'good practice' is subjective so obviously there won't be an objectively correct answer. I suspect that whatever article you read was making this recommendation as a budgeting tool to physically isolate your reserve of cash from your spending account(s) as a means to keep spending in check. This is a common idea that I've heard often enough, though I don't think I am alone in believing that it's unnecessary except in the case of a habitual spender who cannot be trusted to stay within a budget. I suppose there is a very small argument to be made about security where if you use a bank account for daily spending and that account is somehow compromised, the short-term damage is limited. In the end, I would argue that if you're in control of spending and budgeting, have a single source of income that is from regular employment, and you use a credit card for most of your daily spending, there's no compelling reason to have more than one bank account. Some people have a checking and savings account simply for the psychological effect of separating their money, some couples have 3-4 accounts for income, personal spending, and savings, other people have separate accounts for business/self-employment funds, and a few people like having many accounts that act as hard limits for spending in different categories. Of course, the other submitted answer is correct in noting that the more accounts that you have, the more you are opening yourself up to accounting issues if funds don't transfer the way you expect them to (assuming you're emptying the accounts often). Some banks are more lenient with this, however, and may offer you the option to freely 'overdraft' by pulling funding from another pre-designated account that you also hold at the same bank.",
"title": ""
},
{
"docid": "eaa2180e94ca419c10d2db37381389b7",
"text": "I'm not directly affiliated with the company (I work for one of the add-on partners) but I can wholeheartedly recommend Xero for both personal and business finances. Their basis is to make accounting simple and clean, without sacrificing any of the power behind having the figures there in the first place.",
"title": ""
},
{
"docid": "2da9c6cb77c6d43459a25ff16f45edfb",
"text": "I'll chime in and say that my wife and I thought this was a really dumb idea, until we tried it. I was keeping track of everything in my checkbook ledger, but having the physical money in the envelopes really does work! We thought it would be more hassle than it's worth, and there were hiccups the first month or two, but in the end we both agree this is what started our movement towards responsible money management and debt reduction. We have the following Categories: Obviously, ymmv, but the point is to take any categories in your budget that are hard to budget for, as they vary from month to month, and just set aside an amount form your paycheck, in cash, for each one of those categories in an envelope. What I've noticed is that by putting the money aside up front, it's MUCH easier to stick to the budget. We'll often shuffle money around in the envelopes if priorities change for a particular month as well, so rather than taking money away from an extra payment on a debt or our planned savings transfer, which would have been our default action pre-envelopes, we can just move $XX from Date Night into Groceries if we have to, hence, planning out how we'll spend our money, budgeting, has gotten a LOT easier since adopting this system.",
"title": ""
},
{
"docid": "d7b4f03d1e0956ca87f51146a917da16",
"text": "I like Quicken for personal use, and they have a small business edition if you don't want to move into QuickBooks.",
"title": ""
},
{
"docid": "d6ac6bef5e8fc21dc420d50a8854bbe2",
"text": "It is absolutely worth it. My wife and I have two of these accounts (different banks). We are required to use our cards 20 times for one bank, and 15 for the other. We have yet to miss the required transactions in a month (over 15 months of use now), and are actually considering getting a third account. Between the two of us, we simply have to use our card on average once a day. Getting gas? Use your debit card. Getting stamps? Use your debit card? Self checkout? Use your debit card twice. Eating out? Use your debit card. If married, split the bill. As soon as we reach the minimum, we stop using the debit cards and switch to credit cards to further boost the rewards. Maybe it's easier for us since we don't have kids and are out a lot, but 12 transactions is really simple to obtain. We receive ~$100 a month from our two accounts, all for doing something we already do.",
"title": ""
},
{
"docid": "90b0557ba3649538e4ef1b972e18f484",
"text": "Mint.com is a fantastic free personal finance software that can assist you with managing your money, planning budgets and setting financial goals. I've found the features to be more than adequate with keeping me informed of my financial situation. The advantage with Mint over Microsoft Money is that all of your debit/credit transactions are automatically imported and categorized (imperfectly but good enough). Mint is capable of handling bank accounts, credit card accounts, loans, and assets (such as cars, houses, etc). The downsides are:",
"title": ""
},
{
"docid": "ce8676528e1a2a117a0179043c2db82d",
"text": "\"Money is a token that you can trade to other people for favors. Debt is a tool that allows you to ask for favors earlier than you might otherwise. What you have currently is: If the very worst were to happen, such as: You would owe $23,000 favors, and your \"\"salary\"\" wouldn't make a difference. What is a responsible amount to put toward a car? This is a tricky question to answer. Statistically speaking the very worst isn't worth your consideration. Only the \"\"very bad\"\", or \"\"kinda annoying\"\" circumstances are worth worrying about. The things that have a >5% chance of actually happening to you. Some of the \"\"very bad\"\" things that could happen (10k+ favors): Some of the \"\"kinda annoying\"\" things that could happen (~5k favors): So now that these issues are identified, we can settle on a time frame. This is very important. Your $30,000 in favors owed are not due in the next year. If your student loans have a typical 10-year payoff, then your risk management strategy only requires that you keep $3,000 in favors (approx) because that's how many are due in the next year. Except you have more than student loans for favors owed to others. You have rent. You eat food. You need to socialize. You need to meet your various needs. Each of these things will cost a certain number of favors in the next year. Add all of them up. Pretending that this data was correct (it obviously isn't) you'd owe $27,500 in favors if you made no money. Up until this point, I've been treating the data as though there's no income. So how does your income work with all of this? Simple, until you've saved 6-12 months of your expenses (not salary) in an FDIC or NCUSIF insured savings account, you have no free income. If you don't have savings to save yourself when bad things happen, you will start having more stress (what if something breaks? how will I survive till my next paycheck? etc.). Stress reduces your life expectancy. If you have no free income, and you need to buy a car, you need to buy the cheapest car that will meet your most basic needs. Consider carpooling. Consider walking or biking or public transit. You listed your salary at \"\"$95k\"\", but that isn't really $95k. It's more like $63k after taxes have been taken out. If you only needed to save ~$35k in favors, and the previous data was accurate (it isn't, do your own math): Per month you owe $2,875 in favors (34,500 / 12) Per month you gain $5,250 in favors (63,000 / 12) You have $7,000 in initial capital--I mean--favors You net $2,375 each month (5,250 - 2,875) To get $34,500 in favors will take you 12 months ( ⌈(34,500 - 7,000) / 2,375⌉ ) After 12 months you will have $2,375 in free income each month. You no longer need to save all of it (Although you may still need to save some of it. Be sure recalculate your expenses regularly to reevaluate if you need additional savings). What you do with your free income is up to you. You've got a safety net in saved earnings to get you through rough times, so if you want to buy a $100,000 sports car, all you have to do is account for it in your savings and expenses in all further calculations as you pay it off. To come up with a reasonable number, decide on how much you want to spend per month on a car. $500 is a nice round number that's less than $2,375. How many years do you want to save for the car? OR How many years do you want to pay off a car loan? 4 is a nice even number. $500 * 12 * 4 = $24,000 Now reduce that number 10% for taxes and fees $24,000 * 0.9 = $21,600 If you're getting a loan, deduct the cost of interest (using 5% as a ballpark here) $21,600 * 0.95 = $20,520 So according to my napkin math you can afford a car that costs ~$20k if you're willing to save/owe $500/month, but only after you've saved enough to be financially secure.\"",
"title": ""
},
{
"docid": "0e6906c71943738fc5f8b7d44652ea27",
"text": "Here are the pros and cons and an analytical framework for making a decision. Pros of walking away: Cons: Here's the framework: compare the value of first and second sections for you [1] http://www.nytimes.com/2009/07/30/business/30serviceside.html?_r=0 [2] http://www.mortgagecalculator.org/",
"title": ""
},
{
"docid": "1ee3149b12c0eb37a8beb933962a0205",
"text": "I recently made the switch to keeping track of my finance (Because I found an app that does almost everything for me). Before, my situation was fairly simple: I was unable to come up with a clear picture of how much I was spending vs saving (altho I had a rough idea). Now I here is what it changes: What I can do now: Is it useful ? Since I don't actually need to save more than I do (I am already saving 60-75% of my income), 1) isn't important. Since I don't have any visibility on my personal situation within a few years, 2) and 3) are not important. Conclusion: Since I don't actually spend any time building theses informations I am happy to use this app. It's kind of fun. If I did'nt had that tool... It would be a waste of time for me. Depends on your situation ? Nb: the app is Moneytree. Works only in Japan.",
"title": ""
},
{
"docid": "43971a28889cd01e188d721a276ae8a9",
"text": "Money Manager Ex PROS: CONS",
"title": ""
},
{
"docid": "9e73b8c9ad91cf3c650c89a14d2f62db",
"text": "Quicken has tools for this, but they have some quirks so i hesitate to actually recommend it on that basis.",
"title": ""
},
{
"docid": "65df9092082134e7c1aca2e76080ff15",
"text": "Disadvantages: Advantages: In my opinion, the convenience and price (free!) of online options make doing your taxes online worth the negligible risks.",
"title": ""
}
] |
fiqa
|
ec4afe8a3ac3a424c0fadf62beb0f226
|
How can I calculate interest portion of income when selling a stock?
|
[
{
"docid": "e11a156276e3268bd1b63620fce86a21",
"text": "When you sell the stock your income is from the difference of prices between when you bought the stock and when you sold it. There's no interest there. The interest is in two places: the underlying company assets (which you own, whether you want it or not), and in the distribution of the income to the owners (the dividends). You can calculate which portion of the interest income constitutes your dividend by allocating the portions of your dividend in the proportions of the company income. That would (very roughly and unreliably, of course) give you an estimate what portion of your dividend income derives from the interest. Underlying assets include all the profits of the company that haven't been distributed through dividends, but rather reinvested back into the business. These may or may not be reflected in the market price of the company. Bottom line is that there's no direct correlation between the income from the sale of the stake of ownership and the company income from interest, if any correlation at all exists. Why would you care about interest income of Salesforce? Its not a bank or a lender, they may have some interest income, but that's definitely not the main income source of the company. If you want to know how much interest income exactly the company had, you'll have to dig deep inside the quarterly and annual reports, and even then I'm not sure if you'll find it as a separate item for a company that's not in the lending business.",
"title": ""
},
{
"docid": "f140602b8d3a82ed0ca20c229cbe9769",
"text": "\"Their interest expense was $17M. Where you see $5.14/sh in Key Statistics, any daily interest received is more than canceled out by the expense paid at the same time. I understand your concern, but this company is not \"\"sitting on cash\"\" as are Apple, Google, etc. Short term rates are well below 1%, 1yr tbill looks like about .2%. So strictly speaking, each share might have 1 cent interest you need to concern yourself with. Disclaimer to other readers - This has nothing to do with taxes. OP is asking about a specific part of the company cash flow. His worst case is $1 per 100 shares.\"",
"title": ""
}
] |
[
{
"docid": "289270da721e0e136ede814135c932bf",
"text": "\"Re. question 2 If I buy 20 shares every year, how do I get proper IRR? ... (I would have multiple purchase dates) Use the money-weighted return calculation: http://en.wikipedia.org/wiki/Rate_of_return#Internal_rate_of_return where t is the fraction of the time period and Ct is the cash flow at that time period. For the treatment of dividends, if they are reinvested then there should not be an external cash flow for the dividend. They are included in the final value and the return is termed \"\"total return\"\". If the dividends are taken in cash, the return based on the final value is \"\"net return\"\". The money-weighted return for question 2, with reinvested dividends, can be found by solving for r, the rate for the whole 431 day period, in the NPV summation. Now annualising And in Excel\"",
"title": ""
},
{
"docid": "e708f9f70f348131c33139a46aa03b34",
"text": "One thing to keep in mind when calculating P/E on an index is that the E (earnings) can be very close to zero. For example, if you had a stock trading at $100 and the earnings per share was $.01, this would result in a P/E of 10,000, which would dominate the P/E you calculate for the index. Of course negative earnings also skew results. One way to get around this would be to calculate the average price of the index and the earnings per share of the index separately, and then divide the average price of the index by the average earnings per share of the index. Different sources calculate these numbers in different ways. Some throw out negative P/Es (or earnings per share) and some don't. Some calculate the price and earnings per share separate and some don't, etc... You'll need to understand how they are calculating the number in order to compare it to PEs of individual companies.",
"title": ""
},
{
"docid": "6750caf3b3fe1f4073faf6793ceaa7f3",
"text": "There are different perspectives from which to calculate the gain, but the way I think it should be done is with respect to the risk you've assumed in the original position, which the simplistic calculation doesn't factor in. There's a good explanation about calculating the return from a short sale at Investopedia. Here's the part that I consider most relevant: [...] When calculating the return of a short sale, you need to compare the amount the trader gets to keep to the initial amount of the liability. Had the trade in our example turned against you, you (as the short seller) would owe not only the initial proceeds amount but also the excess amount, and this would come out of your pocket. [...] Refer to the source link for the full explanation. Update: As you can see from the other answers and comments, it is a more complex a Q&A than it may first appear. I subsequently found this interesting paper which discusses the difficulty of rate of return with respect to short sales and other atypical trades: Excerpt: [...] The problem causing this almost uniform omission of a percentage return on short sales, options (especially writing), and futures, it may be speculated, is that the nigh-well universal and conventional definition of rate of return involving an initial cash outflow followed by a later cash inflow does not appear to fit these investment situations. None of the investment finance texts nor general finance texts, undergraduate or graduate, have formally or explicitly shown how to resolve this predicament or how to justify the calculations they actually use. [...]",
"title": ""
},
{
"docid": "e23e9b15dd562465366a939546bc4577",
"text": "\"There are two ways to handle this. The first is that the better brokers, such as Charles Schwab, will produce summaries of your gains and losses (using historical cost information), as well as your trades, on a monthly and annual basis. These summaries are \"\"ready made\"\" for the IRS. More brokers will provide these summaries come 2011. The second is that if you are a \"\"frequent trader\"\" (see IRS rulings for what constitutes one), then they'll allow you to use the net worth method of accounting. That is, you take the account balance at the end of the year, subtract the beginning balance, adjust the value up for withdrawals and down for infusions, and the summary is your gain or loss. A third way is to do all your trading in say, an IRA, which is taxed on distribution, not on stock sales.\"",
"title": ""
},
{
"docid": "e2e802dff593d3d9738f73690dc04ebc",
"text": "\"I would suggest you forget everything you learned in economics. The only applicable knowledge is Accounting 101. Step 1: An accrual basis financial statement. There is no step 2 if you don't do this. Most small business do everything cash basis. Simpler, cheaper but useless for analysis. You would get better answers from the local fortune teller than a cash basis statement. Make one change from the general rules. If you have debt or are paying interest for inventory include that in your cost of sales. This is actually proper but the rule is little known and often ignored. Interest on debt up to the amount of inventory is a cost of inventory. Step 2: Gross profit. If you seem to be working hard and still losing money it may be because you are selling products for less than they cost you. In this case the more you sell the more you lose. So suggestions like advertising or doing anything to increase sales are actually destructive. Step 3 Price products at the level necessary to turn a profit at current sales and overhead. 'When we have enough sales we will make a profit\"\" is the philosophy of a start up business. It is toxic for a going concern. Step 4 If sales are unsustainable at the price that produces a profit have the courage to sell or close the business. I have seen people waste their lives on futile endeavors just because they can't make that tough decision. Finally Step 0: Ignore all other suggestions but this. They are well meaning but ill informed. To reiterate, growing sales while losing money on every transaction is a huge mistake. Trends, books, charts and graphs, analytics and market research are the tools of con-men and fortune tellers. Business is arithmetic and nothing more or less. FYI if I don't get at least one upvote, this is the last time I am giving my valuable professional advice away for free on reddit. Folks will have to rely on the suggestions of their fellow college kids.\"",
"title": ""
},
{
"docid": "a673fcb56b419b6a87c7643e71729396",
"text": "You need to report the income from any work as income, regardless of if you invest it, spend it, or put it in your mattress (ignoring tax advantaged accounts like 401ks). You then also need to report any realized gains or losses from non-tax advantaged accounts, as well as any dividends received. Gains and losses are realized when you actually sell, and is the difference between the price you bought for, and the price you sold for. Gains are taxed at the capital gains rate, either short-term or long-term depending on how long you owned the stock. The tax system is complex, and these are just the general rules. There are lots of complications and special situations, some things are different depending on how much you make, etc. The IRS has all of the forms and rules online. You might also consider having a professional do you taxes the first time, just to ensure that they are done correctly. You can then use that as an example in future years.",
"title": ""
},
{
"docid": "5cf0c6ed1f95bedb09ad7b7b301a971d",
"text": "However, you have to remember that not all dividends are paid quarterly. For example one stock I recently purchased has a price of $8.03 and the Div/yield = 0.08/11.9 . $.08 * 4 = $0.32 which is only 3.9% (But this stock pays monthly dividends). $.08 * 12 = $0.96 which is 11.9 %. So over the course of a year assuming the stock price and the dividends didn't change you would make 11.9%",
"title": ""
},
{
"docid": "841f67a51fe5b559c4ce1db46e0b290f",
"text": "The point of a total return index is that it already has accounted for the capital gains + coupon income. If you want to calculate it yourself you'll have to find the on-the-run 10y bond for each distinct period then string them together to calc your total return. Check XLTP if they have anything",
"title": ""
},
{
"docid": "200fcef0533e0e0a2d7806632fc623de",
"text": "\"For example, if I have an income of $100,000 from my job and I also realize a $350,000 in long-term capital gains from a stock sale, will I pay 20% on the $350K or 15%? You'll pay 20% assuming filing single and no major offsets to taxable income. Capital gains count towards your income for determining tax bracket. They're on line 13 of the 1040 which is in the \"\"income\"\" section and aren't adjusted out/excluded from your taxable income, but since they are taxed at a different rate make sure to follow the instructions for line 44 when calculating your tax due.\"",
"title": ""
},
{
"docid": "29af954b3b5d2f33d38175d849fcf8ac",
"text": "You should get a 1099-MISC for the $5000 you got. And your broker should send you a 1099-B for the $5500 sale of Google stock. These are two totally separate things as far as the US IRS is concerned. 1) You made $5000 in wages. You will pay income tax on this as well as FICA and other state and local taxes. 2) You will report that you paid $5000 for stock, and sold it for $5500 without holding it for one year. Since this was short term, you will pay tax on the $500 in income you made. These numbers will go on different parts of your tax form. Essentially in your case, you'll have to pay regular income tax rates on the whole $5500, but that's only because short term capital gains are treated as income. There's always the possibility that could change (unlikely). It also helps to think of them separately because if you held the stock for a year, you would pay different tax on that $500. Regardless, you report them in different ways on your taxes.",
"title": ""
},
{
"docid": "c5578afe7b8b8fea73e4f1a44aea7c7e",
"text": "To try to answer the three explicit questions: Every share of stock is treated proportionately: each share is assigned the same dollar amount of investment (1/176th part of the contribution in the example), and has the same discount amount (15% of $20 or $25, depending on when you sell, usually). So if you immediately sell 120 shares at $25, you have taxable income on the gain for those shares (120*($25-$17)). Either selling immediately or holding for the long term period (12-18 mo) can be advantageous, just in different ways. Selling immediately avoids a risk of a decline in the price of the stock, and allows you to invest elsewhere and earn income on the proceeds for the next 12-18 months that you would not otherwise have had. The downside is that all of your gain ($25-$17 per share) is taxed as ordinary income. Holding for the full period is advantageous in that only the discount (15% of $20 or $25) will be taxed as ordinary income and the rest of the gain (sell price minus $20 or $25) will be taxed at long-term capital gain tax rates, which generally are lower than ordinary rates (all taxes are due in the year you do sell). The catch is you will sell at different price, higher or lower, and thus have a risk of loss (or gain). You will never be (Federally) double taxed in any scenario. The $3000 you put in will not be taxed after all is sold, as it is a return of your capital investment. All money you receive in excess of the $3000 will be taxed, in all scenarios, just potentially at different rates, ordinary or capital gain. (All this ignores AMT considerations, which you likely are not subject to.)",
"title": ""
},
{
"docid": "a8ee07f460a8a1fe9480e40afe4f4815",
"text": "Profit after tax can have multiple interpretations, but a common one is the EPS (Earnings Per Share). This is frequently reported as a TTM number (Trailing Twelve Months), or in the UK as a fiscal year number. Coincidentally, it is relatively easy to find the total amount of dividends paid out in that same time frame. That means calculating div cover is as simple as: EPS divided by total dividend. (EPS / Div). It's relatively easy to build a Google Docs spreadsheet that pulls both values from the cloud using the GOOGLEFINANCE() function. I suspect the same is true of most spreadsheet apps. With a proper setup, you can just fill down along a column of tickers to get the div cover for a number of companies at once.",
"title": ""
},
{
"docid": "e03ee94d9b1ed2237199cb7764bd1908",
"text": "Does this technically mean that she has to pay AMT on $400,000? Yes. Well, not exactly 400,000. She paid $1 per share, so 390,000. And if so, is %28 the AMT for this sum? (0.28 * $400,000 = $112,000)? Or does she have to include her salary on top of that before calculating AMT? (Suppose in the fake example that her salary is $100,000 after 401k). All her income is included in calculating the AMT, minus the AMT exemption amount. The difference between the regular calculated tax and the calculated AMT is then added to the regular tax. Note that some deductions allowed for the regular calculation are not allowed for the AMT calculation. How does California state tax come into play for this? California has its own AMT rules, and in California any stock option exercise is subject to AMT, unless you sell the stock in the same year. Here's a nice and easy to understand write up on the issue from the FTB. When would she have to pay the taxes for this huge AMT? Tax is due when income is received (i.e.: when you exercise the options). However, most people don't actually pay the tax then, but rather discover the huge tax liability when they prepare to submit their tax return on April 15th. To avoid that, I'd suggest trying to estimate the tax and adjust your withholding using form W4 so that by the end of the year you have enough withheld. Suppose in the worst case, the company goes completely under. Does she get her massive amounts of tax back? Or if it's tax credit, where can I find more info on this? That would be capital loss, and only up to $3K a year of capital loss can be deducted from the general income. So it will continue offsetting other capital gains or being deducted $3K a year until it all clears out. Is there any way to avoid this tax? (Can she file an 83b election?) You asked and answered. Yes, filing 83(b) election is the way to go to avoid this situation. This should be done within 30 days of the grant, and submitted to the IRS, and a copy attached to the tax return of the grant year. However, if you're considering exercise - that ship has likely sailed a long time ago. Any advice for Little Susie on how she can even afford to pay that much tax on something she can't even sell anytime soon? Don't exercise the options? Should she take out a loan? (e.g. I've heard that in the extreme case, you can find angel investors who are willing to pay all your taxes/strike price, but want 50% of your equity? I've also heard that you can sell your illiquid shares on SecondMarket?) Is she likely to get audited by IRS for pulling something like this? You can take a loan secured by shares you own, there's nothing illegal in it. If you transfer your shares - the IRS only cares about the taxes being paid, however that may be illegal depending on the terms and the conditions of the grant. You'll need to talk to a lawyer about your situation. I suggest talking to a licensed tax adviser (EA/CPA licensed in your State) about the specifics concerning your situation.",
"title": ""
},
{
"docid": "388d68c4bbd62a93432eb56c917bba4e",
"text": "The sentence you quoted does not apply in the case where you sell the stock at a loss. In that case, you recognize zero ordinary income, and a capital loss (opposite of a gain) for the loss. Reference: http://efs.fidelity.com/support/sps/article/article2.html",
"title": ""
},
{
"docid": "f535a0d7cc0538b79c889db8e26ef801",
"text": "Stock price = Earning per share * P/E Ratio. Most of the time you will see in a listing the Stock price and the P/E ration. The calculation of the EPS is left as an exercise for the student Investor.",
"title": ""
}
] |
fiqa
|
823845f3198645d6d96724057bc1c38f
|
What's the difference when asked for “debit or credit” by a store when using credit and debit cards?
|
[
{
"docid": "5b341f79c0872469203a249e72a7f18f",
"text": "\"These are two different ways of processing payments. They go through different systems many times, and are treated differently by the banks, credit card issuers and the stores. Merchants pay different fees on transactions paid by debit cards and by credit cards. Debit transactions require PIN, and are deducted from your bank account directly. In order to achieve that, the transaction has to reach the bank in real time, otherwise it will be declined. This means, that the merchant has to have a line of communications open to the relevant processor, that in turn has to be able to connect to the bank and get the authorization - all that while on-line. The bank verifies the PIN, authorizes the transaction, and deducts the amount from your account, while you're still at the counter. Many times these transactions cannot be reversed, and the fraud protections and warranties are different from credit transactions. Credit transactions don't have to go to your card issuer at all. The merchant can accept credit payment without calling anyone, and without getting prior authorizations. Even if the merchant sends the transaction for authorization with its processor, if the processor cannot reach the issuing bank - they can still approve the transaction under certain conditions. This is, however, never true with debit cards (even if used as \"\"credit\"\"). They're not deducted from your bank account, but accumulated on your credit card account. They're posted there when the actual transaction reaches the card issuer, which may be many days (and even many months) after the transaction took place. Credit transactions can be reversed (in some cases very easily), and enjoy from a higher level of fraud protection. In some countries (and most, if not all, of the EU) fraudulent credit transactions are never the consumer's problem, always the bank's. Not so with debit transactions. Banks may be encouraging you to use debit for several reasons: Merchants will probably prefer credit because: Consumers will probably be better off with credit because:\"",
"title": ""
},
{
"docid": "3884d8045ae2d4c7950e7bd887f9b506",
"text": "It depends on your bank and your terms of service, but using the card one way or the other may affect things such as how long it takes to process, what buyer protections you have, etc. It also affects the store as I believe they are charged differently for debit vs credit transactions.",
"title": ""
},
{
"docid": "f9ecbd20ba2f2a878ed7134224091f9b",
"text": "\"When using a debit card in a \"\"credit\"\" way, you don't need to enter your PIN, which protects you from skimmers and similar nastiness. Also, assuming it's a Visa or Mastercard debit card, you now have access to all of the fraud protection and other things that you would get with a credit card. The downside for the merchant is that credit card transaction fees are typically higher than debit card transaction fees. I'm less familiar with using a credit card in a \"\"debit\"\" way, so don't have anything to offer on that part of your question.\"",
"title": ""
},
{
"docid": "b7f05c59befb3907f059b801dc96e45b",
"text": "I'm surprised by all the pro-credit answers here, debit has some definite advantages. Most importantly, when you pay with a credit card, the merchant pays around 3% of the transaction to the credit company. In many states, they are forced to charge you the same amount, and this is frequently toted as ''consumer protection''. But consider what this means for the business: they loose money for every credit transaction, and they're legally forbidden to do anything about it. So you're taking 3% from a business and handing it over to a massive cooperation. To make matters worse, the buisness is inevitably going to have to raise their prices (albiet by a small amount), so in the end the average consumer has gained nothing. On the other hand, the credit card company wins big, and they use their profits to pay lobbyists and lawyers to keep these rules in place. To put in the worst possible light, it's essentially legal extortion, verging on corruption. As for the fraud protection offered, while it may be true that credit cards will offer a more hassle-free reimbursement (i.e. you just don't have to pay the bill) if your card is stolen, consumer protection laws also extend to debit: in many cases your bank is legally required to cut you a check for all the money you lost.",
"title": ""
},
{
"docid": "83f758c9b6e7d0361a0f2e31ea2af083",
"text": "\"Just to add about using debit card as \"\"credit\"\" vs \"\"debit\"\" way: In addition to the difference of having to enter the PIN when using \"\"debit\"\" mode (vs having to sign in \"\"credit\"\" mode), for stores that offer cash back (i.e. get cash out of your account at the same time as paying), you can only get cash back when using \"\"debit\"\" mode.\"",
"title": ""
},
{
"docid": "2092a8787b318cab157e958b640b32f3",
"text": "Credit in debit way - the card simply functions like a debit card for that transaction - pulling cash from your checking account. No difference. You've simply discovered the fact that some banks are using the same piece of plastic for two functions, debit which draws funds directly from your checking, and credit which offers you time to pay a bill the comes in some time later. It's a personal choice.",
"title": ""
}
] |
[
{
"docid": "6c5de5165e603a04b0787b43b08c245c",
"text": "In most cases, the brand on the card, eg Visa or MasterCard, is a middleman. The company processes the transaction, transferring $xx from the bank to the seller, and telling the bank to debit the buyer's account. The bank is at risk, not the company transacting the purchase. What's interesting is that American Express started as both. My first Amex card, issued in 1979 (long expired, but in my box of memorabilia) had no bank. American Express offered a card that offered no extended credit, it was pay in full each month. Since then, Amex started offering extended credit, i.e. with annual interest, and minimum payments, and more recently, offering transaction processing for banks which take on the credit risk, essentially becoming very similar to MasterCard and Visa.",
"title": ""
},
{
"docid": "4571505cd5e76a598b1090e109add091",
"text": "\"A lot of credit card companies these days uses what they call \"\"daily interest\"\" where they charge the interest rate for the number of days till you pay off what you spent. This allows them to make more money than the \"\"period billing\"\". The idea of credit, theoretically, is that there isn't really a day when you can borrow without paying interest - in theory\"",
"title": ""
},
{
"docid": "d45bfce38b0fdd281e087adfda5cb3e8",
"text": "Here's a simple answer: If your debit card has a visa or mc logo, it can be used as a 'credit card'. In order to do so, you shouldn't enter the pin, instead choose 'credit' and sign for it. Unlike a credit card, you can't spend money you don't have but like a credit card, your purchase is protected by the credit card company (visa/mc) and gives you privileges like zero fraud liability and purchase disputes. http://www.moneycone.com/should-you-sign-for-a-debit-card-purchase-or-use-your-pin/",
"title": ""
},
{
"docid": "9e88c6e1c6c8ea228540df3db741c995",
"text": "\"You ask about the difference between credit and debit, but that may be because you're missing something important. Regardless of credit/debit, there is value in carrying two different cards associated with two different accounts. The reason is simply that because of loss, fraud, or your own mismanagement, or even the bank's technical error, any card can become unusable for some period of time. Exactly how long depends what happened, but just sending you a new card can easily take more than one business day, which might well be longer than you'd like to go without access to any funds. In that situation you would be glad of a credit card, and you would equally be glad of a second debit card on a separate account. So if your question is \"\"I have one bank account with one debit card, and the only options I'm willing to contemplate are (a) do nothing or (b) take a credit card as well\"\", then the answer is yes, take a credit card as well, regardless of the pros or cons of credit vs debit. Even if you only use the credit card in the event that you drop your debit card down a drain. So what you can now consider is the pros and cons of a credit card vs managing an additional bank account -- unless you seriously hate one or more of the cons of credit cards, the credit card is likely to win. My bank has given me a debit card on a cash savings account, which is a little scary, but would cover most emergencies if I didn't have a credit card too. Of course the interest rate is rubbish and I sometimes empty my savings account into a better investment, so I don't use it as backup, but I could. Your final question \"\"can a merchant know if I give him number of debit or credit card\"\" is already asked: Can merchants tell the difference between a credit card and embossed debit card? Yes they can, and yes there are a few things you can't (or might prefer not to) do with debit. The same could even be said of Visa vs. Mastercard, leading to the conclusion that if you have a Visa debit you should look for a Mastercard credit. But that seems to be less of an issue as time goes on and almost everywhere in Europe apparently takes both or neither. If you travel a lot outside the EU then you might want to be loaded down with every card under the sun, and three different kinds of cash, but you'd already know that without asking ;-)\"",
"title": ""
},
{
"docid": "962d60ed03237014702ed48726e48e7d",
"text": "Is there a debit card accessing this account? When you spend money on a debit card for certain item, including, but not limited to gas, restaurant, hotel, a bit extra is held in reserve. For example, a $100 restaurant charge might hold $125, to allow for a tip. (You're a generous tipper, right?) The actual sales slips my take days to reconcile. It's for this reason that I've remarked how credit cards have their place. Using debit cards requires that one have more in their account than they need to spend, especially when taking a trip including hotel costs.",
"title": ""
},
{
"docid": "fe6c6b035064b9df1adf8d9f29e0d9c0",
"text": "In some case the customer wants the name to be cryptic or misleading. They don't want to advertise the true nature of the business they visited. In other cases the transaction may be reported through another business. A few years ago the local PTA was having a silent auction as a fundraiser. A local business allowed the PTA to use their credit card reader to process transactions over a certain amount. Of course when the credit card statement arrived it looked like you spent $500 at the florist. I have seen PayPal listed when donating to some small charities. I have noted another case where confusion can occur. I used a debit card to buy a soda from a vending machine: the name and location were the name of the vending machine company and the location of their main office. It didn't say soda machine city A. It said Joe's vending company city B. In most cases the business and the credit card company want to make it easy to identify the transactions to keep the cost of research and charge backs to a minimum.",
"title": ""
},
{
"docid": "56835c16340b124ccf9801b3f8d8f94b",
"text": "My reason for not using direct debit is #4 on Dheer's list. I just don't know where exactly I'm going to have what balance on what day, because I usually don't leave more than $100-$200 on my checking, all my cash is in Savings. I also don't want to direct debit from Savings in order to not break the 6-withdrawals limit accidentally. I use direct debit to my credit card where its available, but most places charge for that and I don't want to pay the extra fee. So, I prefer to pay my bills manually. What I don't understand is the people who pay the credit card bills when the statement arrives. I haven't received a credit card statement in years. Don't they have on-line access? Can't they set reminders there? If so - throw the card away, and get a normal one. Same with mailing checks, by the way. I'm still not even half done with the free checks I got from Washington Mutual 5 years ago. I almost never write checks. All the bills are paid online, whether through bill-pay service or an ACH transfer.",
"title": ""
},
{
"docid": "00784d70261597cf764bc79c19735260",
"text": "Credited to your account means amount has been deposited to your account(this will be your income). Debited from your account means withdrawn from your account(This will be your expense). Hope this clarifies your question. Regards Jayanthi",
"title": ""
},
{
"docid": "0a84d9ac4bc17b2abe46675a8f89df9c",
"text": "Cash is king. PIN-based debit transactions are cheap. In terms of credit cards, a regular (ie. not a gold card) with no rewards has the lowest rates. Bigger merchants with lots of card volume likely have better deals that make the differences less pronounced.",
"title": ""
},
{
"docid": "0fcc289f55e8fd85bb987f6f218ff4fe",
"text": "If you are solvent enough, and organised enough to pay your credit card bill in full each month, then use the credit card. There are no disadvantages and several plus points, already mentioned. Use the debit card when you would be surcharged for using the credit card, or where you can negotiate a discount for not subjecting the vendor to credit card commission.",
"title": ""
},
{
"docid": "3369ef70fc77b2dbaa0460f96c37ed79",
"text": "For many folks these days, not having a credit card is just not practical. Personally, I do quite a bit of shopping online for things not available locally. Cash is not an option in these cases and I don't want to give out my debit card number. So, a strategy is this: use a credit card for a purchase. Then immediately, or within a couple days, pay the credit card with that amount. Sounds simple but it takes a little effort to do it. This strategy gives you the convenience of a credit card and decreases the interest enormously.",
"title": ""
},
{
"docid": "d76b0aa423ae2d10652b65376f7b65d4",
"text": "\"I'll assume United States as the country; the answer may (probably does) vary somewhat if this is not correct. Also, I preface this with the caveat that I am neither a lawyer nor an accountant. However, this is my understanding: You must recognize the revenue at the time the credits are purchased (when money changes hands), and charge sales tax on the full amount at that time. This is because the customer has pre-paid and purchased a service (i.e. the \"\"credits\"\", which are units of time available in the application). This is clearly a complete transaction. The use of the credits is irrelevant. This is equivalent to a customer purchasing a box of widgets for future delivery; the payment is made and the widgets are available but have simply not been shipped (and therefore used). This mirrors many online service providers (say, NetFlix) in business model. This is different from the case in which a customer purchases a \"\"gift card\"\" or \"\"reloadable debit card\"\". In this case, sales tax is NOT collected (because this is technically not a purchase). Revenue is also not booked at this time. Instead, the revenue is booked when the gift card's balance is used to pay for a good or service, and at that time the tax is collected (usually from the funds on the card). To do otherwise would greatly complicate the tax basis (suppose the gift card is used in a different state or county, where sales tax is charged differently? Suppose the gift card is used to purchase a tax-exempt item?) For justification, see bankruptcy consideration of the two cases. In the former, the customer has \"\"ownership\"\" of an asset (the credits), which cannot be taken from him (although it might be unusable). In the latter, the holder of the debit card is technically an unsecured creditor of the company - and is last in line if the company's assets are liquidated for repayment. Consider also the case where the cost of the \"\"credits\"\" is increased part-way through the year (say, from $10 per credit to $20 per credit) or if a discount promotion is applied (buy 5 credits, get one free). The customer has a \"\"tangible\"\" item (one credit) which gets the same functionality regardless of price. This would be different if instead of \"\"credits\"\" you instead maintain an \"\"account\"\" where the user deposited $1000 and was billed for usage; in this case you fall back to the \"\"gift card\"\" scenario (but usage is charged at the current rate) and revenue is booked when the usage is purchased; similarly, tax is collected on the purchase of the service. For this model to work, the \"\"credit\"\" would likely have to be refundable, and could not expire (see gift cards, above), and must be usable on a variety of \"\"services\"\". You may have particular responsibility in the handling of this \"\"deposit\"\" as well.\"",
"title": ""
},
{
"docid": "fd4e136401631719b477bcecbdb36789",
"text": "\"Yes and No. There's always a \"\"fee\"\". The difference in credit vs debit usually determines how much that fee is and how it's paid. Each vendor who accepts the major credit card is under contract to pay for equipment and meet certain standards. The same is true for debt card transactions. How much the \"\"fee\"\" is can vary based on the contract the vendor has with MasterCard/Visa/AMEX. But in general most debt transactions go back to the bank who distributed the card.\"",
"title": ""
},
{
"docid": "ecc28786d6578b97f8d7ad09ab5ea1b2",
"text": "\"There may be a confusion here: I don't think you can get cash back at a register with a credit card. See http://www.cardratings.com/can-i-get-cash-back-when-i-buy-something-with-a-credit-card.html Cash back is only available with a debit card. With a debit card, the money comes directly out of your account at the moment of the transaction. With a credit card, the CC company loans the money to you and you get a monthly bill. You can get cash advances at ATM machines, but typically comes with hefty fees and exorbitant interest rates, so I strongly advice against this. There are \"\"Cash Back\"\" credit cards, but that means that you get a percentage of your purchases refunded as cash (or points).\"",
"title": ""
},
{
"docid": "6ac871a44f02d05727d0da370515bfe2",
"text": "\"In general, following the W-4 instructions should result in withholdings that are fairly close to the amount of taxes that you will owe for the year, particularly if your situation is relatively uncomplicated. Claiming less withholdings than the form suggests can help ensure that you end up saving money in your \"\"interest-free IRS savings account\"\" and get a refund at the end of the year, which some people prefer so they don't need to budget separately for a tax payment. I'm guessing that the HR employee either prefers doing so himself or has on occasion received complaints from other employees that they \"\"didn't take enough out\"\". Personally, I'd prefer to claim as many withholdings as I can, and be sure to have some money aside in case it turns out that I have to owe a little bit, since it means I get more take-home pay throughout the year. It's good to keep in mind that a W-4 isn't written in stone. If it turns out that too much or too little is being taken out, you can always change it. You can also try playing around with the IRS withholding calculator to try some scenarios.\"",
"title": ""
}
] |
fiqa
|
77c6273ca6346e5d6f9d11cde6a47349
|
Tax deductions on empty property
|
[
{
"docid": "4311bec41f78f060fc9e5dcf8894b85b",
"text": "\"A real estate business could offset income from occupied property with costs from vacant property held for speculation. For speculation, you can let a building rot, then get it reassessed. If the jurisdiction assesses part or all of the tax bill on the value of improvements, this can drop the annual tax bill significantly while you hold. If you plan to hold for a decade or more, this can be very important. Strategically, this also ruins the neighborhood property values, so you can assemble neighboring parcels to support future major developments. This is a long speculation game. Exemplars of the strategy include Richard Basciano who bought up several buildings in NYC's Times Square and installed adult theater tenants in the 70s, for payoff today; and the late Sam Rappaport who pursued a strategy of squeezing rent and simply ignoring building inspection violations in Philadelphia, assembling major urban core parcels on the cheap, and whose children are now selling into strong markets. Legality: Adult businesses are kind of a grey market covered by specific local ordinances, neither exactly illegal or perfectly legal. Ignoring building violations is not legal, but the penalties are fines, not jail. It's certainly not a \"\"nice\"\" strategy. Richard Basciano: http://www.nydailynews.com/new-york/porn-king-richard-basciano-survived-rudy-giuliani-plans-risk-article-1.319185 Sam Rappaport: http://www.bizjournals.com/philadelphia/stories/2002/08/05/focus13.html?page=all\"",
"title": ""
},
{
"docid": "ab7f5a778746d1d70965a41d7655bc53",
"text": "This doesn't sound very legal to me. Real estate losses cannot generally be deducted unless you have other real estate income. So the only case when this would work is when that person has bunch of other buildings that do produce income, and he reduces that income, for tax purposes, by deducting the expenses/depreciation/taxes for the buildings that do not. However, depreciation doesn't really reduce taxes, only defers them to the sale. As mhoran_psprep said - all the rest of the expenses will be minimal.",
"title": ""
},
{
"docid": "c736826887aa913f0544388ca51db098",
"text": "If the building has no income, it also probably has minimal expenses. The heat, water and electricity costs are nearly zero. They are letting the value depreciate, and taking it off the taxes. I also suspect the condition of the building is poor, so any effort to make the building productive would be very costly. Many cities combat this by setting the tax on empty buildings or empty lots at a much higher rate. Or they set the value of the property at a high valuation based on what it could generate. Sometimes this is only targeted at some sections of the city to encourage development. They also offer tax breaks when the owner of a house has the house as their principal residence.",
"title": ""
}
] |
[
{
"docid": "691f379e386fc1183176cdae0adf3072",
"text": "This will be a complex issue and you will need to sit down with a professional to work through the issues: When the house was put up for rent the initial year tax forms should have required that the value of the house/property be calculated. This number was then used for depreciation of the house. This was made more complex based on any capital improvements. If the house wasn't the first he owned, then capital gains might have been rolled over from previous houses which adds a layer of complexity. Any capital improvements while the house was a rental will also have to be resolved because those were also depreciated since they were placed in service. The deprecation will be recaptured and will be a part of the calculation. You have nowhere near enough info to make a calculation at this time.",
"title": ""
},
{
"docid": "b41a23be2e99ccd466f0ddb5b967ce6b",
"text": "The argument seems to derive from the fact that state law bars cities from taxing net income. Hence the city is arguing it doesn't apply to gross income. Of course the city would also have to argue that income isn’t property. I don't think it's going to work out for them.",
"title": ""
},
{
"docid": "1445b89ab44471005c83df5b57ed7abe",
"text": "If your deductions are higher than the standard deduction, you will be able to subtract property taxes from your income. In your example, that means that taxes are computed based on $95,000. In 2011, the standard deduction varies between $5,800 (single filer) and $11,600 (married filing jointly). Tax credits are subtracted from your tax obligation. The most common tax credit for most people is student loan interest. If you pay $500 in student loan interest, that sum is subtracted from your tax bill.",
"title": ""
},
{
"docid": "4cebf899ff5e831a6d09b0757dbc3ccc",
"text": "The rental income is indeed taxable income, but you reduce the taxable portion of it by deducting expenses (including mortgage interest, maintenance, insurance, HOA, real estate tax, and of course depreciation). Due to the depreciation, you may end up breaking even, or having very little taxable income. Note that when you sell the property, your basis is reduced by the depreciation you were allowed to deduct (even if you haven't deducted it for whatever reason), and also the personal residence exclusion might no longer be applicable - i.e.: you'll have to pay capital gains tax. You will not be able to deduct a loss though if you sell now, so it may be better to depreciate it as a rental, rather then sell at a loss that won't affect your taxes. Also, consider the fact that the basis for the depreciation is not the basis you currently have in the property (because you're under water). You have to remember that when calculating the taxes. This is not a tax advice, and you should seek a professional help.",
"title": ""
},
{
"docid": "b36ccc075295208c0816895759186562",
"text": "You are talking about adjusting the basis of your property which has its own IRS publication Publication 551: Basis of Assets Assuming you've not taken depreciation on your land in any way, pages 4-5 cover the various ways you can increase the basis of your property. Improvements like paving and wiring such as your second case would increase the basis of the property and reduce your gains when you sell. Note that regular real estate taxes do NOT alter your basis. Again the IRS publication is where you should look on what activity would have altered your basis during your period of ownership. Consult appropriate accounting and legal practitioners when in doubt.",
"title": ""
},
{
"docid": "1c7beebb3549c75c9dd76f80232f5e9c",
"text": "What you are looking for is a 1031 exchange. https://www.irs.gov/uac/like-kind-exchanges-under-irc-code-section-1031 Whenever you sell business or investment property and you have a gain, you generally have to pay tax on the gain at the time of sale. IRC Section 1031 provides an exception and allows you to postpone paying tax on the gain if you reinvest the proceeds in similar property as part of a qualifying like-kind exchange. Gain deferred in a like-kind exchange under IRC Section 1031 is tax-deferred, but it is not tax-free. You may also sell your house for bitcoin and record the sales price on the deed with an equal or lesser amount that you bought it for.",
"title": ""
},
{
"docid": "fc6045279745777f82afedccd6bbf517",
"text": "To make matters worse, if you pay the property tax your mother in law can't take the deduction either. You may be better off paying rent and having her handle the property correctly, as a rental.",
"title": ""
},
{
"docid": "6fb93fa97b82f105f50a9d78e413e00c",
"text": "So obviously, realtors are not economists and have a strong bias here. A lot of actual [economists](https://fivethirtyeight.com/features/the-tax-deductions-economists-hate/) think the mortgage deduction is nonsense and doesn't actually promote home ownership. Countries without the deduction have about the same ownership rates as the U.S. Worth noting that this proposal doesn't actually scrap the mortgage deduction, it just makes the standard deduction bigger. Some people will end up better off with the new standard deduction, and those with more expensive homes can keep using the mortgage deduction. This is one of the few proposals coming out of the Republican congress that actually helps poor people more than rich people.",
"title": ""
},
{
"docid": "3a24e8c7fb56eacce57030b2d4d34c3c",
"text": "For stocks, bonds, ETF funds and so on - Taxed only on realised gain and losses are deductible from the gain and not from company's income. Corporate tax is calculated only after all expenses have been deducted. Not the other way around. Real estate expenses can be deducted because of repairs and maintenance. In general all expenses related to the operation of the business can be deducted. But you cannot use expenses as willy nilly, as you assume. You cannot deduct your subscription to Playboy as an expense. Doing it is illegal and if caught, the tours to church will increase exponentially. VAT is only paid if you claim VAT on your invoices. Your situation seems quite complicated. I would suggest, get an accountant pronto. There are nuances in your situation, which an accountant only can understand and help.",
"title": ""
},
{
"docid": "36c896602ab0b1ab640cf2312e3bbe9c",
"text": "I'd recommend you use an online tax calculator to see the effect it will have. To your comment with @littleadv, there's FMV, agreed, but there's also a rate below that. One that's a bit lower than FMV, but it's a discount for a tenant who will handle certain things on their own. I had an arm's length tenant, who was below FMV, I literally never met him. But, our agreement through a realtor, was that for any repairs, I was not required to arrange or meet repairmen. FMV is not a fixed number, but a bit of a range. If this is your first rental, you need to be aware of the requirement to take depreciation. Simply put, you separate your cost into land and house. The house value gets depreciated by 1/27.5 (i.e. you divide the value by 27.5 and that's taken as depreciation each year. You may break even on cash flow, the rent paying the mortgage, property tax, etc, but the depreciation might still produce a loss. This isn't optional. It flows to your tax return, and is limited to $25K/yr. Further, if your adjusted gross income is over $100K, the allowed loss is phased out over the next $50K of income. i.e. each $1000 of AGI reduces the allowed loss by $500. The losses you can't take are carried forward, until you use them to offset profit each year, or sell the property. If you offer numbers, you'll get a more detailed answer, but this is the general overview. In general, if you are paying tax, you are doing well, running a profit even after depreciation.",
"title": ""
},
{
"docid": "edff3248900dede7f01d283e4e401ae8",
"text": "Using US tax code, given that your profits are less than 250K, given that you lived in that home over two years, then yes the 150K is tax free. That is your money in the US. Note: I won't get into all of the specifics but basically you need to live somewhere 2 years. You get 250K per person, up to 500K. Most enhancements count as money towards the home. So most/all of your 12k should be discounted. However there is a lot of fine print in this and a lot of interpretation on what is normal upkeep and what is an enhancement.",
"title": ""
},
{
"docid": "3a7145ec3e498ec494ec69fc53741a7b",
"text": "According to page 107 of the instructions for schedule A for form 1040 : Include taxes (state, local, or foreign) paid on real estate you own that was not used for business. ... If you want to make a business out of her property and be her agent in the management, you might be able to work with an accountant on this, but it won't be a valid personal deduction.",
"title": ""
},
{
"docid": "260d3b3f130213fb479e55432b9cbe27",
"text": "In general, for a home you live in, there's maintenance, which is just that, you pay to keep your house in good repair. There's also real improvements. I spend $xxx to turn my poured cement basement into living space. Here, I keep my receipts and the cost (although not my labor) is added to the basis of my home when I sell. The couple things that may offer a deduction have to do with energy. When I insulated my basement, there was a state tax credit which I got back when I filed taxes. There are also credits for installing solar panels. What you've described in your question just sounds like one of the small joys of home ownership.",
"title": ""
},
{
"docid": "ee9d995efd6246643d1cf4e81c394b36",
"text": "\"Yes, you may deduct the cost of building the \"\"noise cancellation system\"\" :) sorry couldn't resist. But seriously, yes you can deduct it ONCE (unless you have more cost maintaining it) and its on line 19 (Repairs and maintenance) of IRS Form 8829.\"",
"title": ""
},
{
"docid": "a7636e6bc2fd3e6df338ba31d13496e8",
"text": "To answer some parts of the question which are answerable as-is: Yes, mortgage interest is deductible. So is depreciation. See this question and others. It would be a good idea to put some money away for tax season, just as you should save some money to cover unexpected property expenses. But as @JoeTaxpayer says, this is a good problem to have, assuming you own the property, it's low-maintenance, your tenant is good, and your rent is at market levels.",
"title": ""
}
] |
fiqa
|
0f81f24fa66538feedc37e8188d97efa
|
Personal Banking using accrual method
|
[
{
"docid": "8c2ca979aeca71fecfc0e6504bfb98d4",
"text": "\"You would add your daily earnings every day. For example, you work full time job (8 hours a day) at $20/hour. At the end of the 1st day of the month, you'd add $160 to your salary account. You've earned it, even though its still almost a month till you actually get paid. So its accrued. What if you don't get paid? You've accrued it already, its on your books, but not in your wallet. You might have paid taxes on it, etc. But you don't really have it. This is what is called \"\"bad debt\"\", and eventually, after you can show that the payee is not going to pay, you write it off - remove it from your books (and adjust your taxes etc that you paid on that income already). Generally, it is a very bad idea to use accrual method of accounting for an individual or a small business. For large volume business using accrual mode solves other accounting and revenue recognition problems.\"",
"title": ""
}
] |
[
{
"docid": "beea3f671766c0cef4427097bdc05788",
"text": "Funds earned and spent before opening a dedicated business account should be classified according to their origination. For example, if your business received income, where did that money go? If you took the money personally, it would be considered either a 'distribution' or a 'loan' to you. It is up to you which of the two options you choose. On the flip side, if your business had an expense that you paid personally, that would be considered either a 'contribution of capital' or a 'loan' from you. If you choose to record these transactions as loans, you can offset them together, so you don't need two separate accounts, loan to you and loan from you. When the bank account was opened, the initial deposit came from where? If it came from your personal funds, then it is either a 'contribution of capital' or a 'loan' from you. From the sound of your question, you deposited what remained after the preceding income/expenses. This would, in effect, return the 'loan' account back to zero, if choosing that route. The above would also be how to record any expenses you may pay personally for the business (if any) in the future. Because these transactions were not through a dedicated business bank account, you can't record them in Quickbooks as checks and deposits. Instead, you can use Journal Entries. For any income received, you would debit your capital/loan account and credit your income account. For any expenses, you would debit the appropriate expense account and credit your distribution/loan account. Also, if setting up a loan account, you should choose either Current Asset or Current Liability type. The capital contribution and distribution account should be Equity type. Hope this helps!",
"title": ""
},
{
"docid": "82556cf6dd6ff545b2163acfa5412108",
"text": "\"An accounting general ledger is based on tracking your actual assets, liabilities, expenses, and income, and Gnucash is first and foremost a general ledger program. While it has some simple \"\"budgeting\"\" capabilities, they're primarily based around reporting how close your actual expenses were to a planned budget, not around forecasting eventual cash flow or \"\"saving\"\" a portion of assets for particular purposes. I think the closest concept to what you're trying to do is that you want to take your \"\"real\"\" Checking account, and segment it into portions. You could use something like this as an Account Hierarchy: The total in the \"\"Checking Account\"\" parent represents your actual amount of money that you might reconcile with your bank, but you have it allocated in your accounting in various ways. You may have deposits usually go into the \"\"Available funds\"\" subaccount, but when you want to save some money you transfer from that into a Savings subaccount. You could include that transfer as an additional split when you buy something, such as transferring $50 from Assets:Checking Account:Available Funds sending $45 to Expenses:Groceries and $5 to Assets:Checking Account:Long-term Savings. This can make it a little more annoying to reconcile your accounts (you need to use the \"\"Include Subaccounts\"\" checkbox), and I'm not sure how well it'd work if you ever imported transaction files from your bank. Another option may be to track your budgeting (which answers \"\"How much am I allowed to spend on X right now?\"\") separately from your accounting (which only answers \"\"How much have I spent on X in the past?\"\" and \"\"How much do I own right now?\"\"), using a different application or spreadsheet. Using Gnucash to track \"\"budget envelopes\"\" is kind of twisting it in a way it's not really designed for, though it may work well enough for what you're looking for.\"",
"title": ""
},
{
"docid": "9dc05df9fc6e20481d08de42919c5f53",
"text": "Almost every company I know of charges something like 2% per month on past due accounts. They are not financial institutions, so it's probably quite legal.",
"title": ""
},
{
"docid": "ead43a0afb4e63e37927a468c4bb83d3",
"text": "I work at a large bank, that isn't too unusual although a lot of banks are moving to fee-free basic accounts and upping their fees on other specific transactions. For example, my bank did away with minimum balance requirements to waive a monthly service fee, but we started charging $2/month for paper statements and upped our out-of-network ATM fee by 50 cents. Would like to point out that most financial institutions will reorder your transactions slightly for the purposes of accounting. It is much easier to run all transactions in big batches at the end of the day than individually as they come in. Required disclosures you receive upon account opening explain the exact order but most banks do all credits (money in) first and then debits (money out) like checks, debit cards, and ACH payments after. If you overdraft you can usually avoid a fee if you make a cash deposit before the end of the business day as the cash will go into your account before your purchases are debited. OCCASIONALLY this accounting-based reordering will result in additional fees but that is not the intended purpose of reordering them. And I would always refund any incurred fees that happened due to accounting-based transaction reordering. What Wells Fargo is doing has been illegal since 2008 and their continued appeals are hoping to get the ruling overturned so they won't have to pay out restitution to affected customers. It's frankly despicable.",
"title": ""
},
{
"docid": "dcf7b6129f6a8a9145f65dc426f9870e",
"text": "PocketSmith is another tool you might like to consider. No personal banking details are required, but you can upload your transactions in a variety of formats. Pocketsmith is interesting because it really focus on your future cash flow, and the main feature of the interface is around having a calendar(s) where you easily enter one off or repetitive expenses/income. http://www.pocketsmith.com/",
"title": ""
},
{
"docid": "cff3f36f2120e361ca04e52d14060b0a",
"text": "Mint.com does a pretty good job at this, for a free service, but it's mostly for personal finance. It looks at all of your transactions and tries to categorize them, and also allows you to create your own categories and filters. For example, when I started using it, it imported the last three months of my transactions and detected all of my 'coffee house' transactions. This is how I learned that I was spending about $90 a month going to Starbucks, rather than the $30 I had estimated. I know it's not a 'system' like an accounting outfit might use, but most accounting offices I've worked with have had their own home-brewed system.",
"title": ""
},
{
"docid": "cef447bc5079cc943ed5c464ac8dc883",
"text": "Most likely your accounting is cash basis, not accrual, so it's pretty tough to do unless you resort to the dodgy methods discussed so often by the tax avoidance enthusiasts. There is a difference between a CPA service and a tax lawyer, perhaps you need to know one of the latter.",
"title": ""
},
{
"docid": "987be59025ba34d16ca1979d31c5d0a0",
"text": "\"Unfortunately I don't think any of the online personal finance applications will do what you're asking. Most (if not all) online person finance software uses a combination of partnerships with the banks themselves and \"\"screen scraping\"\" to import your data. This simplifies things for the user but is typically limited to whenever the service was activated. Online personal finance software is still relatively young and doesn't offer the depth available in a desktop application (yet). If you are unwilling to part with historical data you spent years accumulating you are better off with a desktop application. Online Personal Finance Software Pros Cons Desktop Personal Finance Software Pros Cons In my humble opinion the personal finance software industry really needs a hybrid approach. A desktop application that is synchronized with a website. Offering the stability and tools of a desktop application with the availability of a web application.\"",
"title": ""
},
{
"docid": "ce932128386e9ac1e3bdbe0c347a0ad7",
"text": "If annualized rate of return is what you are looking for, using a tool would make it a lot easier. In the post I've also explained how to use the spreadsheet. Hope this helps.",
"title": ""
},
{
"docid": "1ebc364846535cd64021290e9b7af494",
"text": "You could create your own spreadsheet of Cash Flows and use the XIRR function in Excel: The formula is:",
"title": ""
},
{
"docid": "ca0d0960c489824b3c77ea53171394db",
"text": "There is a lot of depth that can go into this. Depends on how far you want to take this. Think u have the right idea... people who go the extra step get promoted. If prior reporting was very simple, u can build on it over time. I suggest starting with some Known Performance Indicators / KPIs since mgmt can understand those easier than detailed analysis. You can start with identifying metrics that matter. Probably total assets, avg account bal, average customer bal, avg # of accounts per customer, new deposits/withdrawal both gross and avg per account/customer, new/closed accounts. Once metrics are picked gather monthly (or whatever time period) and monitor/review month over month/year over year. PM if u want to discuss more. I have experience in data analytics.",
"title": ""
},
{
"docid": "b571809824f8d4516f9f62c50bb3d418",
"text": "\"I use the (gratis, libre) command-line program ledger for my personal accounts. It handles funds across accounts gracefully, through a feature called \"\"Virtual Accounts\"\". A transaction can add or subtract money from a virtual account, which need not balance with all the other entries in the transaction. Then it's just a matter of setting up reports to include or exclude these accounts.\"",
"title": ""
},
{
"docid": "e1208e4de07e5a70118a6b83770ea03e",
"text": "\"If you are using software like QuickBooks (or even just using spreadsheets or tracking this without software) use two Equity accounts, something like \"\"Capital Contributions\"\" and \"\"Capital Distributions\"\" When you write a personal check to the company, the money goes into the company's checking account and also increases the Capital Contribution account in accordance with double-entry accounting practices. When the company has enough retained earnings to pay you back, you use the Capital Distributions equity account and just write yourself a check. You can also make general journal entries every year to zero out or balance your two capital accounts with Retained Earnings, which (I think) is an automatically generated Equity account in QuickBooks. If this sounds too complex, you could also just use a single \"\"Capital Contributions and Distributions\"\" equity account for your contributions and distributions.\"",
"title": ""
},
{
"docid": "f70a67d924690e27c7d881ed024bb809",
"text": "From my experience, I opened a business account to handle my LLC which owns a rental property. The account process and features were similar to shopping for a personal checking account. There would be fees for falling below a minimum balance, and for wanting a paper statement. In my case, keeping $2000 avoids the fee, and I pull the statements online and save the PDFs. Once open for a certain amount of time, you might be able to get credit extended based on the money that flows through that account. The online access is similar to my personal checking, as is the sending of payments electronically.",
"title": ""
},
{
"docid": "977c491090bccd98c5020fd2ef786445",
"text": "If you can live with managing the individual category amounts yourself, this is trivial. Just set up a spreadsheet listing each category (and a column for the total amount of money in the account), adding or subtracting as you deposit or withdraw money to the account. To the bank it will be just one (physical) account, but to you, it can be any number of (accounting asset) accounts. You can choose to keep a history, or not. It's all up to how complex you want to make it. It doesn't even have to be a spreadsheet - you can just as well do this on paper if you prefer that. But the computer makes it easier. I imagine most personal finance software will help you, too; I know GnuCash can be coaxed into doing this with only a bit of creativity, and it almost certainly isn't the only one. I do this myself and it works very well. I don't know but imagine that companies do it all the time: there is no reason why there must be a one-to-one relationship between bank accounts and accounting asset accounts, and in fact, doing so would probably quickly become impractical.",
"title": ""
}
] |
fiqa
|
6bb02dc0fbf8e6e33934134473b321df
|
Do company-provided meals need to be claimed on my taxes?
|
[
{
"docid": "fca05dd02f506c3c1b809979ec8410e5",
"text": "It looks like the resource to deciding these is here Concerning the meals, the law seems a bit vague to me. You can exclude the value of meals you furnish to an employee from the employee's wages if they meet the following tests. This exclusion does not apply if you allow your employee to choose to receive additional pay instead of meals. If the whole point of google providing meals is to benefit Google as such people will not leave the googleplex when to obtain meals elsewhere causing increased productivity for Google, then this is covered as a business expense. (Even if it wasn't, Google would have to notify you that it was providing you a non-expensable benefit, i.e. compensation, by giving you a 1099 at the end of the year). Concerning the other benefits, the only way I could see those items not being taxable benefits is if one of the two applies.",
"title": ""
},
{
"docid": "60692161b8b350f107c09ff2893b31e6",
"text": "\"I believe there is an overtime meal allowance. That is, if an employee works \"\"overtime\"\" (defined as 7:00 p.m. for a 9:00 start, or ten-plus hours after the shift starts), the company can provide a non-taxable meal free of charge, or give a \"\"reasonable\"\" allowance ($15-$20) that must be spent outside on a meal (no drinks). This is because the employee is working extra hours at the convenience of the company. Lunches can be subsidized. That is the company can provide lunch on company premises, and must charge employees the direct costs of the food and preparing it, but can forego charging for \"\"overhead\"\" (e.g. the implied rent for the lunch facility) and profit.\"",
"title": ""
},
{
"docid": "86376543a6c5ea3be9031394552c401b",
"text": "In many cases yes. In the case of an employer handing employees a credit card to use, that is clearly income if the card is used for something other than a business expense. Generally speaking, if you're receiving something with a significant value without strings attached, it is likely taxable. Google no doubt has an army of tax attorneys, so perhaps they are able to exploit loopholes of some sort.",
"title": ""
}
] |
[
{
"docid": "900adb9bbdf3136da55ded446a22ad2b",
"text": "\"There is no simple rule like \"\"you can/can't spend more/less than $X per person.\"\" Instead there is a reasonableness test. There is such a thing as an audit of just your travel and entertainment expenses - I know because I've had one for my Ontario corporation. I've deducted company Christmas parties, and going-away dinners for departing employees, without incident. (You know, I presume, about only deducting half of certain expenses?) If the reason for the entertainment is to acquire or keep either employees or clients, there shouldn't be a problem. Things are slightly trickier with very small companies. Microsoft can send an entire team to Hawaii, with their families, as a reward at the end of a tough project, and deduct it. You probably can't send yourself as a similar reward. If your party is strictly for your neighbours, personal friends, and close family, with no clients, potential clients, employees, potential employees, suppliers, or potential suppliers in attendance, then no, don't deduct it. If you imagine yourself telling an auditor why you threw the party and why the business funded it, you'll know whether it's ok to do it or not.\"",
"title": ""
},
{
"docid": "45390f1ecd215cbde66ecaa8e7578bd6",
"text": "\"Gifts given and received between business partners or employers/employees are treated as income, if they are beyond minimal value. If your boss gives you a gift, s/he should include it as part of your taxable wages for payroll purposes - which means that some of your wages should be withheld to cover income, social security, and Medicare taxes on it. At the end of the year, the value of the gift should be included in Box 1 (wages) of your form W-2. Assuming that's the case, you don't need to do anything special. A 1099-MISC would not be appropriate because you are an employee of your boss - so the two of you need to address the full panoply of employment taxes, not just income tax, which would be the result if the payment were reported on 1099-MISC. If the employer wants to cover the cost to you of the taxes on the gift, they'll need to \"\"gross up\"\" your pay to cover it. Let's say your employer gives you a gift worth $100, and you're in a 25% tax bracket. Your employer has to give you $125 so that you end up with a gain of $100. But the extra $25 is taxable, too, so your employer will need to add on an extra $6.25 to cover the 25% tax on the $25. But, wait, now we've gotta pay 25% tax on the $6.25, so they add an extra $1.56 to cover that tax. And now they've gotta pay an extra $.39 . . . The formula to calculate the gross-up amount is: where [TAX RATE] is the tax rate expressed as a percentage. So, to get the grossed-up amount for a $100 gift in a 25% bracket, we'd calculate 1/(1-.25), or 1/.75, or 1.333, multiply that by the target gift amount of $100, and end up with $133.33. The equation is a little uglier if you have to pay state income taxes that are deductible on the federal return but it's a similar principle. The entire $133.33 would then be reported as income, but the net effect on the employee is that they're $100 richer after taxes. The \"\"gross-up\"\" idea can be quite complicated if you dig into the details - there are some circumstances where an additional few dollars of income can have an unexpected impact on a tax return, in a fashion not obvious from looking at the tax table. If the employer doesn't include the gift in Box 1 on the W-2 but you want to pay taxes on it anyway, include the amount in Line 7 on the 1040 as if it had been on a W-2, and fill out form 8919 to calculate the FICA taxes that should have been withheld.\"",
"title": ""
},
{
"docid": "13ab33ce88815758683978479ee0009f",
"text": "\"Companies often provide cafeteria, or catering services, to employees tax-free at subsidized rates. I'll use \"\"cafeteria\"\" as an illustration. The IRS says that in order to avoid lunch being taxed as income, the employees must pay the \"\"direct costs\"\" of the lunch, food and labor. In addition to those costs, cafeterias add two more items to come up with the total tab; \"\"overhead,\"\" (the cost of renting the space), and of course, profit. The company can waive the last two, and charge employees only materials and labor. That's why subsidized cafeteria food can cost as little as half of what it would cost elsewhere.\"",
"title": ""
},
{
"docid": "fd27658674e7d86ccf10bc37cd400f6c",
"text": "\"I can say that I got X dollars from an account like \"\"Income:Benefits\"\"... but where do I credit that money to? \"\"Expenses:Groceries\"\" Yes doesn't feel right, since I never actually spent that money on food, You did, didn't you? You got food. I'm guessing there's an established convention for this already? Doubt it. Established conventions in accounting are for businesses, and more specifically - public companies. So you can find a GAAP, or IFRS guidelines on how to book benefits (hint: salary expense), but it is not something you may find useful in your own household accounting. Do what is most convenient for you. Since it is a double-booking system - you need to have an account on the other side. Expenses:Groceries doesn't feel right? Add Expenses:Groceries:Benefits or Expenses:Benefits or whatever. When you do your expense and cash-flow reports - you can exclude both the income and the expense benefits accounts if you track them separately, so that they don't affect your tracking of the \"\"real\"\" expenses.\"",
"title": ""
},
{
"docid": "d1b3d85e0259ff79c5fcce5e2a24ff6c",
"text": "I assume the OP is the US and that he is, like most people, a cash-basis tax payer and not an accrual basis tax payer. Suppose the value of the rental of the unit the OP is occupying was reported as income on the OP's 2010 and 2011 W-2 forms but the corresponding income tax was not withheld. If the OP correctly transcribed these income numbers onto his tax returns, correctly computed the tax on the income reported on his 2010 and 2011 1040 forms, and paid the amount due in timely fashion, then there is no tax or penalty due for 2010 and 2011. Nor is the company entitled to withhold tax on this income for 2010 and 2011 at this time; the tax on that income has already been paid by the OP directly to the IRS and the company has nothing to do with the matter anymore. Suppose the value of the rental of the unit the OP is occupying was NOT reported as income on the OP's 2010 and 2011 W-2 forms. If the OP correctly transcribed these income numbers onto his tax returns, correctly computed the tax on the income reported on his 2010 and 2011 1040 forms, and paid the amount due in timely fashion, then there is no tax or penalty due for 2010 and 2011. Should the OP have declared the value of the rental of the unit as additional income from his employer that was not reported on the W-2 form, and paid taxes on that money? Possibly, but it would be reasonable to argue that the OP did nothing wrong other than not checking his W-2 form carefully: he simply assumed the income numbers included the value of the rental and copied whatever the company-issued W-2 form said onto his 1040 form. At least as of now, there is no reason for the IRS to question his 2010 and 2011 returns because the numbers reported to the IRS on Copy A of the W-2 forms match the numbers reported by the OP on his tax returns. My guess is that the company discovered that it had not actually declared the value of the rental payments on the OP's W-2 forms for 2010 and 2011 and now wants to include this amount as income on subsequent W-2 forms. Now, reporting a lump-sum benefit of $38K (but no actual cash) would have caused a huge amount of income tax to need to be withheld, and the OP's next couple of paychecks might well have had zero take-home pay as all the money was going towards this tax withholding. Instead, the company is saying that it will report the $38K as income in 78 equal installments (weekly paychecks over 18 months?) and withhold $150 as the tax due on each installment. If it does not already do so, it will likely also include the value of the current rent as a benefit and withhold tax on that too. So the OP's take-home pay will reduce by $150 (at least) and maybe more if the current rental payments also start appearing on the paychecks and tax is withheld from them too. I will not express an opinion on the legality of the company withholding an additional $150 as tax from the OP's paycheck, but will suggest that the solution proposed by the company (have the money appear as taxable benefits over a 78-week period, have tax withheld, and declare the income on your 2012, 2013 and 2014 returns) is far more beneficial to the OP than the company declaring to the IRS that it made a mistake on the 2010 and 2011 W-2's issued to the OP, and that the actual income paid was higher. Not only will the OP have to file amended returns for 2010 and 2011 but the company will need to amend its tax returns too. In summary, the OP needs to know that He will have to pay taxes on the value of the waived rental payments for 2010 and 2011. The company's mistake in not declaring this as income to the OP for 2010 and 2011 does not absolve him of the responsibility for paying the taxes What the company is proposing is a very reasonable solution to the problem of recovering from the mistake. The alternative, as @mhoran_psprep points out, is to amend your 2010 and 2011 federal and state tax returns to declare the value of the rental during those years as additional income, and pay taxes (and possibly penalties) on the additional amount due. This takes the company completely out of the picture, but does require a lot more work and a lot more cash now rather than in the future.",
"title": ""
},
{
"docid": "cde13f0b12dc6f641de0bca6c94269cf",
"text": "If the 'gratuity' is a payment from your previous Indian company made when you left them, then the US tax system will treat it exactly the same as wages paid by your previous company. Whether or not you need to pay taxes on your wages and gratuity will depend on whether your are considered resident in the US for tax purposes for this financial year. It is likely that you will be. Assuming you are, then the US requires that you pay tax on all income, wherever it is earned in the world. You will need to fill in a tax return and declare both your gratuity and your wages in India for that year. India and the US have a 'double tax agreement', which means essentially that you won't be taxed twice if you have already paid tax on the gratuity and wages in India. But you do have to declare them.",
"title": ""
},
{
"docid": "25c8de141bcd410796ff629067dd17e8",
"text": "\"First, point: The CRA wants you to start a business with a \"\"Reasonable expectation of profit\"\". They typically expect to see a profit within 5 years, so you may be inviting unwanted questions from future auditors by using a breakeven strategy. Second point: If the goal is to pay as little tax as possible, you may want to consider having the corporation pay you as little as possible. Corporate income taxes are much lower than personal income taxes, according to these two CRA links: How it works is that your company pays you little as an outright salary and offers you perks like a leased company car, expense account for lunch and entertainment, a mobile phone, computer, etc. The company owns all of this stuff and lets you use it as part of the job. The company pays for all this stuff with corporate pre-tax dollars as opposed to you paying for it with personal after-tax dollars. There are specifics on meals & entertainment which modify this slightly (you can claim 50%) but you get the idea. The actual rate difference will depend on your province of residence and your corporate income level. There is also a requirement for \"\"Reasonable Expenses\"\", such that the expenses have to be in line with what you are doing. If you need to travel to a conference each year, that would be a reasonable expense. Adding your family and making it a vacation for everyone would not. You can claim such expenses as a sole proprietor or a corporation. The sole-proprietorship option puts any after-expense profits into your pocket as taxable income, where the corporate structure allows the corporation to hold funds and limit the amount paid out to you. I've seen this strategy successfully done first-hand, but have not done it myself. I am not a lawyer or accountant, consult these professionals about this tax strategy before taking any action.\"",
"title": ""
},
{
"docid": "173677a1d78c4e8a90b0be22dec7361e",
"text": "\"I had experience working for a company that manufactures stuff and giving products to the employees. The condition was to stay employed for a year after the gift for the company to cover its cost (I think they imputed the tax), otherwise they'd add the cost to the last paycheck (which they did when I left). But they were straight-forward about it and I signed a paper acknowledging it. However, in your case you didn't get a product (that you could return when leaving if you didn't want to pay), but rather a service. The \"\"winning\"\" trip was definitely supposed to be reported as income to you last year. Is it okay for them to treat me differently than the others for tax purposes? Of course not. But it may be that some strings were attached to the winning of the incentive trip (for example, you're required to stay employed for X time for the company to cover the expense). See my example above. Maybe it was buried somewhere in small letters. Can they do this a year after the trip was won and redeemed? As I said - in this case this sounds shady. Since it is a service which you cannot return - you should have been taxed on it when receiving it. Would the IRS want to know about this fuzzy business trip practice? How would I report it? Here's how you can let them know. Besides now understanding the new level of slime from my former employer is there anything else I should be worried about? Could they do something like this every year just to be annoying? No, once they issued the last paycheck - you're done with them. They cannot issue you more paychecks after you're no longer an employee. In most US States, you are supposed to receive the last paycheck on your last day of work, or in very close proximity (matter of weeks at most).\"",
"title": ""
},
{
"docid": "319a42593394c31427f073dad2038261",
"text": "I agree that the surface explanation is that expenses used to generate income are deducted, however there clearly is a double standard in how is applied. For example I cannot deduct my car even though I use it primarily for commuting to work (I would consider that income generation), yet companies are allowed to deduct corporate jets. I can't deduct meals when I ate out with professional acquainted where much of the conversations are related to my profession and so directly relevant to my income, yet businesses can claim sending their executives to a country club because business was discussed or it was a team building excise. Etc etc.",
"title": ""
},
{
"docid": "f7dda4d298962e5676469e1351ccb15d",
"text": "\"Some of the 45,000 might be taxable. The question is how was the stipend determined. Was it based on the days away? The mile driven? The cities you worked in? The IRS has guidelines regarding what is taxable in IRS Pub 15 Per diem or other fixed allowance. You may reimburse your employees by travel days, miles, or some other fixed allowance under the applicable revenue procedure. In these cases, your employee is considered to have accounted to you if your reimbursement doesn't exceed rates established by the Federal Government. The 2015 standard mileage rate for auto expenses was 57.5 cents per mile. The rate for 2016 is 54 cents per mile. The government per diem rates for meals and lodging in the continental United States can be found by visiting the U.S. General Services Administration website at www.GSA.gov and entering \"\"per diem rates\"\" in the search box. Other than the amount of these expenses, your employees' business expenses must be substantiated (for example, the business purpose of the travel or the number of business miles driven). For information on substantiation methods, see Pub. 463. If the per diem or allowance paid exceeds the amounts substantiated, you must report the excess amount as wages. This excess amount is subject to income tax with-holding and payment of social security, Medicare, and FUTA taxes. Show the amount equal to the substantiated amount (for example, the nontaxable portion) in box 12 of Form W-2 using code “L\"\"\"",
"title": ""
},
{
"docid": "fb32224abbecd0111b8671b4ed22d88a",
"text": "In Singapore, this is sufficiently common that the Singapore IRS has a page on their website dedicated to informing employers of how to properly pay this under Responsibilites of an Employer. Specifically, tax paid by employer is taxable income for the employee (as it's really the employee's responsibility), so they must pay tax for that tax. A tax-on-tax is computed for the tax paid, which also would be owed by the employer if they were paying the full tax rate for the employee. As a clarification, this is not the employer being truly responsible for the employee's income; this is the employer compensating the employee further to offset their taxable income. This is effectively a fringe benefit, although it may be particularly useful in countries where either tax evasion is common (and thus an employer must compete with employers willing to pay under the table) or where employers are competing with others in nearby countries with lower tax rates. It is not the same thing as the employer making your income nontaxable, though, and has implications for your tax filing. Significantly, it is likely that if you have additional income beyond income from that employer, it is likely to be taxed at your highest tax rate, as the employer will likely calculate the tax due based on their income being the only income you have in that year. *Edit based on emphasis in question: I'm not from Singapore nor am I a lawyer, but based on my reading of the IRAS website, it looks like you do not have to file if you have no other source of income, because they have a No-Filing Service which takes income information from your employer automatically and generates a tax bill, which presumably would be fully paid in your case. This only aplies if you have no other sources of income, however; you still have to file if you have other sources of income since your employer would not know about them. If you are eligible for this service, you should get a letter informing you as such. They also have a tool to check your filing status on their website.",
"title": ""
},
{
"docid": "b0c8d3728efd4fd11889096f3baabf9f",
"text": "\"Your wages are an expense to your employer and are therefore 100% tax deductible in the business income. The company should not be paying tax on that, so your double-tax scenario, as described, isn't really correct. [The phrase \"\"double taxation\"\" with respect to US corporations usually comes into play with dividends. In that case, however, it's the shareholders (owners) that pay double. The answer to \"\"why?\"\" in that case can only be \"\"because it's the law.\"\"]\"",
"title": ""
},
{
"docid": "71bd8b7bb71148feb7f19174d08ae7fa",
"text": "\"When I have a question about my income taxes, the first place I look is generally the Giant Book of Income Tax Information, Publication 17 (officially called \"\"Your Federal Income Tax\"\"). This looks to be covered in Chapter 26 on \"\"Car Expenses and Other Employee Business Expenses\"\". It's possible that there's something in there that applies to you if you need to temporarily commute to a place that isn't your normal workplace for a legitimate business reason or other business-related travel. But for your normal commute from your home to your normal workplace it has this to say: Commuting expenses. You cannot deduct the costs of taking a bus, trolley, subway, or taxi, or of driving a car between your home and your main or regular place of work. These costs are personal commuting expenses. You cannot deduct commuting expenses no matter how far your home is from your regular place of work. You cannot deduct commuting expenses even if you work during the commuting trip.\"",
"title": ""
},
{
"docid": "0c509b1b72a4cbf876193786938eb9a1",
"text": "Use one journal entry, and split the expenses into the appropriate accounts. This can happen even if you never mix business and personal on the same receipt: say you order office supplies (which where I live are immediately deductible as an expense) and software or hardware (which must be depreciated because they are assets) on the same order. We have an account called Proprietors Loan which represents money the company is lending to the humans who own it, or that the humans are lending to the company. Were I to pay for my personal lunch on a business credit card, it would go through that account, increasing the amount the company has lent me or decreasing the amount I have lent it. Similarly if I made a business purchase with a personal card it would go through that account in the other direction. Where I live, I can lend my company all the money I want any time, but if the company lends me money there can't be an outstanding balance over the corporate year end. If you make two credit card entries of 5 and 10 when you go to reconcile your accounts it will be harder because you'll have to realize they together match the single 15 line on your statement. Making a single entry (your A option) will make reconciling your statement much easier. And that way, you'll probably reconcile your statements, which is vital to knowing you actually recorded everything.",
"title": ""
},
{
"docid": "ee0f34fa27cb4ca84be860d651f060f3",
"text": "You tagged with S-Corp, so I assume that you have that tax status. Under that situation, you don't get taxed on distributions regardless of what you call them. You get taxed on the portion of the net income that is attributable to you through the Schedule K that the S-Corp should distribute to you when the S-Corp files its tax return. You get taxed on that income whether or not it's distributed. If you also work for the small business, then you need to pay yourself a reasonable wage. The amount that you distribute can be one factor in determining reasonableness. That doesn't seem to be what you asked, but it is something to consider.",
"title": ""
}
] |
fiqa
|
d8d603fd8b4ba8817bac8af2ec736a54
|
What are the differences among all these different versions of Vivendi?
|
[
{
"docid": "35aaffba3f98b7aff50ff88169631ef8",
"text": "\"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.\"",
"title": ""
}
] |
[
{
"docid": "6f0d1e3a8dd15b888066fde636118e1f",
"text": "What's wrong with WIX? I've heard some good and bad about it. I signed up for it because it's cheap concerning how I didn't know how well this would even do at all. I was going to move to Shopify if I got bigger and had more funds to start. For the last response, how would I research how competitive the market is for organic search? Again, I'm such a noob and am starting from little knowledge, please bear with me here. Haha.",
"title": ""
},
{
"docid": "a7b97c67c2ebbaa8d104825ed1ff287d",
"text": "Satya has amazingly turned MS around. They were the laughing stock of most developers for many years but have picked up a number of big name developers, released a lot of great developer tools and are starting to be relevant again. It's an amazing transformation and for the first time in my life I'm looking forward to what they do next.",
"title": ""
},
{
"docid": "7b1fca134a9157d368e70fe5b9e4b30b",
"text": "Did I have a reading comprehension fail? What I got out of the article as the fact that they're shedding users, but nothing about *why*. It is a fairly deep question, their games were incredibly popular, and addictive, a few months ago. It could say something profound about the way people use casual games and social networks. Or maybe it because Zynga's method of doing A/B testing on minor variations of the game, then choosing the version that captured more of the ~~victim~~ user's time and testing another minor variation the next day, doesn't make their games entertaining for long. On the other hand, I'm pretty sure anyone who plays Farmville by choice is fundamentally immune to boredom.",
"title": ""
},
{
"docid": "b6142904211a069630ec65e91a718b8b",
"text": "\"Wait a second, I can't be the first to notice this, near the top of the article: The internal contents, however, were often the exact same English words being read by their classmates buying high-priced US editions. but later farther down: In cases where goods were actually produced abroad— this brings up the very definition of *produced* for \"\"intellectual property\"\", to my mind the mere fact that it is printed outside of the country is simply a logistical convenience. If in fact it was written by a U.S. author living in the U.S. then it *wasn't* actually produced abroad. Same goes for U.S. *produced* software in foreign manufactured goods.\"",
"title": ""
},
{
"docid": "57c101ec08c7c5e233db5fa74279c298",
"text": "I quit the company during the Nadella transition. I was a Site Reliability Engineer, and my entire discipline was gutted and tossed at the company, as were the testers. Maybe it's been good for consumers, but the way it was handled internally, with an indefinite stream of reorganizations and middle management competition, just made it a terrible place to work. When I left, I had been through 9-10 reorganizations in as many months. Every time I'd get a project or a service to work on, we'd get moved. Most of my coworkers left for Amazon, some left the field entirely. I hope it's better now, nobody deserves that. Windows Server 2016 was one of the worst builds I've ever worked with, and I have been really happy to stop supporting the OS entirely. The docker gaps in particular in the windows ecosystem seem pretty significant, and languages that don't run on Linux seem antiquated and useless because of pressures from cloud platforms.",
"title": ""
},
{
"docid": "5d76fadccd5c00848bce6f788765e133",
"text": "The website likely has no differentiation. I am hoping, however, the service does. I'm not looking to break down a fledgling business plan, I am just looking for information on how and where to build or buy a website that performs thusly: Company creates account and posts the service they can provide, Consumer applies for said service, I deal with some required middle-man work which is at the cost of the consumer.",
"title": ""
},
{
"docid": "dd61977d4cd678ac0b628f96eb76b590",
"text": "For our company, we use Microsoft Enterprise E5 as it allows us to communicate easier, manage projects and information, assign tasks, etc. As there's only 3 of us it works well but comes at a cost of £30 each per month. As it sounds as though it's only you on your own you should check out Trello. We were using Trello previously but communication between us wasn't great on there and it got too cluttered way too fast. For setting personal goals and tasks it's perfect, especially as the basic account is free.",
"title": ""
},
{
"docid": "8917d2a97c7a8b005cb913c4040f4cd6",
"text": "Are you asking me for my review? The iPad3 feels *generally* buggy and slow. The iPad2 is faster. It also felt like a proper evolution of the iPad. The iPad3 doesn't. It doesn't feel like a better iPad2. It's noticeably heavier and slower, and mine has crashed twice in the last week. The fact that I have an iPad3 and iPad2 side-by-side leaves me disappointed. The Playbook is lighter than the iPad3- it's about half the size. The picture isn't as nice. It doesn't have Skype. The user interface is nicer. It has a better spreadsheet and email client and ssh client. It doesn't require a separate SIM (it tethers to my phone). It has a good *feel* to it, and is comfortable in my hands. It hasn't crashed on me yet. On my commute I use the playbook, and not the iPad3. The iPad3 gets used largely for Facetime and Skype while at my office. I generally *enjoy* using the Playbook over the iPad3.",
"title": ""
},
{
"docid": "307cd4608de31d374355449865dc6e2e",
"text": "It takes some time for folks to renegotiate contracts and adjust policies in the commercial realm. It's never as easy as simply going to a different web page. The different buearus have slightly different ways of scoring people, different APIs to integrate with everyone's software, and take somewhat different things into account. That takes some time to change.",
"title": ""
},
{
"docid": "f826f42e4b7454bfedd1142631d13ff8",
"text": "Without giving away any important details needlessly, I was pointing out that there are some fundamental things that we will offer. After speaking with a user experience strategist, we came to an interesting market research finding, which reported that the majority of service providers are registered to a multiple number of platforms. As well as this we are targeting a niche that will offer us the ability to be dominant, eventually phasing in new sectors/industries.",
"title": ""
},
{
"docid": "5e7c3a26b6153ffe8a35dd1c43fe2530",
"text": "I have encoded videos that we watch via Apple TV XBMC on our overpriced Sony Bravia LCD in one room and a cheap Acer LCD in another. They look amazingly different on these two screens. Same movie, same playback unit, same HDMI connection, different TVs. The Sony presents a smooth display with few artifacts. Good motion, clean image on pause, etc. The Acer displays tons of MPEG encoding artifacts, palletized chunks in what should be smooth gradients, visible in motion as well as paused. I'm just saying that there is a different in what you get when you pay more.",
"title": ""
},
{
"docid": "91c4b2e51e9bb05737984e4cc571f52e",
"text": "The quality of the discs generated through this process is definitely higher than the quality of the discs produced through duplication. On the contrary, in the process of CD/DVD replication, each disc is paid individual attention and the result is no compatibility issues and no lags too.Some clients might take this as lack of professionalism, but on the contrary, there is no such issue related to those being replicated.",
"title": ""
},
{
"docid": "e23758d4894ddc7d8ede41c7cbf96ffa",
"text": "Al igual que la fidelidad del cliente, la “lealtad” a una marca está cuestionada. Cómo valora el público tus marcas está cambiando, garantía de desempeño y diferenciación se están volviendo más relevantes. Las variaciones en los hábitos de consumo y en las relaciones empresa-cliente afectan estas valuaciones. El principal activo de tu marca es la garantía que le provee al consumidor sobre la satisfacción de sus expectativas. Proporciona seguridad en el proceso de decisión de compra, lo hace más fácil. Antes la gente adquiría una marca “conocida” pues brindaba confianza en su desempeño y el costo de conseguir referencias sobre productos sustitutos era alto. Hoy la información satura la Internet y los medios de comunicación, las opiniones positivas y negativas se diseminan rápidamente en la web. La publicidad pierde credibilidad y solo satisfacer al cliente mejor que la competencia cada día te permitirá mantener el valor de tu marca.",
"title": ""
},
{
"docid": "10933bb99c626acdbfe828d99f8773ce",
"text": "I have found that using the online version can help determine the correct product. Try Deluxe online, you can upload the data from last year. When you get to the key forms see what happens if you don't switch. Then switch to Premiere. Compare the results.",
"title": ""
},
{
"docid": "954276916601e045c4af374e917586a0",
"text": "Yes you are right. The cannibalisation comment was for opening up every pricing point. The article is quite specific to app pricing published by an individual. It doesn't apply to say a food product or a durable being brought to the market. A thing on the last comment. Wondows may sell three versions but the distinction is there and clear. A light version, a regular version and an enterprise version. They are labelled pretty much the same as Home, Professional and Enterprise. Good marketing or names to distinguish between the products. Different needs for different products. An app is priced much less and uses can be trivial (yet invovled).",
"title": ""
}
] |
fiqa
|
b6c657056ad9239cebe4c00aa1906e53
|
Investing in third world countries
|
[
{
"docid": "2672f85e33b709f4dbbffabf875d2251",
"text": "I strongly recommend you to invest in either stocks or bonds. Both markets have very strict regulations, and usually follow international standards of governance. Plus, they are closely supervised by local governments, since they look to serve the interests of capital holders in order to attract foreign investment. Real estate investment is not all risky, but regulations tend to be very localized. There are federal, state/county laws and byelaws, the last usually being the most significant in terms of costs (city taxes) and zoning. So if they ever change, that could ruin your investment. Keeping up with them would be hard work, because of language, legal and distance issues (visiting notary's office to sign papers, for example). Another thing to consider is, specially on rural distant areas, the risk of forgers taking your land. In poorer countries you could also face the problem of land invasion, both urban and rural. Solution for that depends on a harsh (fast) or socially populist (slow) local government. Small businesses are out of question for you, frankly. The list of risks (cash stealing, accounting misleading, etc.) is such that you will lose money. Even if you ran the business in your hometown it would not be easy right?",
"title": ""
},
{
"docid": "c62a9ef6ddf8a9f66d4ec1c669245f41",
"text": "\"Basically, unless you are an investment professional, you should not be investing in a venture in a developing country shown to you by someone else. The only time you should be investing in a developing country is if a \"\"lightbulb\"\" goes off in your head and you say to yourself, \"\"With my engineering background, I can develop this machine/process/concept that will work better in this country than anywhere else in the world.\"\" And then run it yourself. (That's what Michael Dell, a computer repairman, did for \"\"made to order\"\" computers in the United States, and \"\"the rest is history.\"\") E.g. if you want to invest in \"\"real estate\"\" in a developing country, you might design a \"\"modular home\"\" out of local materials, tailored to local tastes, and selling for less than local equivalents, based on a formula that you know better than anyone else in the world. And then team up with a local who can sell it for you. Whatever you do, don't \"\"invest\"\" and revisit it in 10-15 years. It will be gone.\"",
"title": ""
}
] |
[
{
"docid": "727ec7e08991ba4b8ade95fe69692451",
"text": "That's because our financial sector is mainly an instrument to aggregate cash rather than a way to foster innovation and growth. They already have so much cash in their control that other sectors are starving. Some worthwhile endeavors are not the ones that are going to make the greatest returns, some will not show returns for a very long time. Typically these are are undertaken by the government, but the government is being reduced to a blunt object used to secure resources and markets and to protect investments. So maybe we need a second-tier investment sector that works with longer time lines, and low immediate returns and perhaps even domestic micro-loan/grants. /ramble",
"title": ""
},
{
"docid": "b79409d008694846d99a18cb967006dd",
"text": "yeah - the point is why should any foreign investor trust you with their money? just because Bangladesh might have a hot housing market, doesn't make you a reliable or trustworthy partner. Maybe if you were an established and reputable real estate investor this post might get traction.",
"title": ""
},
{
"docid": "ab0ef2d08b8155091a2bdd9b7a105c42",
"text": "It has got to do with inflation. So as prices of goods and services rise over the years you can work out what the inflation rate is over time. So by applying the inflation rate between 1990 to 2016 you can work out the equivalent value of $30B in 1990 would be in 2016. So in other words in 1990 you bought $30B worth of a box of goods and services, then in 2016 it would have cost you $55B to buy the same box of goods and services. You can play around with this US Inflation Calculator here, to see how much an amount of money back in history would be worth today if invested at the rate of inflation over those years. So obviously, the aim in investing is to get a return higher than the rate of inflation, so that your investment funds grow in real terms and in the future you can buy more with your funds than you can buy with them today.",
"title": ""
},
{
"docid": "65d63f2d360544b545ad1ec39c769653",
"text": "At the other end of the spectrum is the VICEX fund. it invests in industries such as tobacco, gaming, defense/weapons, liquor and other companies whose products or services are widely considered not to be socially responsible",
"title": ""
},
{
"docid": "ca7c58191513c4cb7c05c0d16933d67c",
"text": "\"This is the best tl;dr I could make, [original](https://www.project-syndicate.org/commentary/german-g20-investment-framework-for-africa-by-wolfgang-schauble-2017-06) reduced by 86%. (I'm a bot) ***** > The CWA offers interested African countries the opportunity to improve conditions for private investment, including in infrastructure. > The CWA&#039;s structure is straightforward: African countries, together with their bilateral partners and international financial organizations with proven expertise on Africa, will jointly develop, coordinate, and implement tailor-made measures. > With the upcoming G20 Africa Partnership Conference in Berlin on June 12-13, we will provide a platform for these African countries to reach out to investors in order to enhance the continent&#039;s engagement with the private sector. ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/6fxdgr/wolfgang_shauble_africa_has_an_enormous_economic/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ \"\"Version 1.65, ~139006 tl;drs so far.\"\") | [Theory](http://np.reddit.com/r/autotldr/comments/31bfht/theory_autotldr_concept/) | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr \"\"PM's and comments are monitored, constructive feedback is welcome.\"\") | *Top* *keywords*: **country**^#1 **African**^#2 **CWA**^#3 **Africa**^#4 **G20**^#5\"",
"title": ""
},
{
"docid": "e0f0da2c0e5a4bfa04bda19efad7eb01",
"text": "There are some ETF's on the Indian market that invest in broad indexes in other countries Here's an article discussing this Be aware that such investments carry an additional risk you do not have when investing in your local market, which is 'currency risk' If for example you invest in a ETF that represents the US S&P500 index, and the US dollar weakens relative to the indian rupee, you could see the value if your investment in the US market go down, even if the index itself is 'up' (but not as much as the change in currency values). A lot of investment advisors recommend that you have at least 75% of your investments in things which are denominated in your local currency (well technically, the same currency as your liabilities), and no more than 25% invested internationally. In large part the reason for this advice is to reduce your exposure to currency risk.",
"title": ""
},
{
"docid": "24f0a3aeb40d5e614b4f030e8c60320b",
"text": "\"This is the best tl;dr I could make, [original](http://www.imf.org/en/Publications/WP/Issues/2017/06/12/Public-Investment-Scaling-up-and-Debt-Sustainability-The-Case-of-Energy-Sector-Investments-44943) reduced by 50%. (I'm a bot) ***** > The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management. > This paper proposes a bottom-up approach to assess large public investments that are potentially self-financing and reflect their impact in macro-fiscal projections that underpin the IMF&#039;s Debt Sustainability Analysis Framework. > Using the case of energy sector investments in Caribbean countries, the paper shows how to avoid biases against good projects that pay off over long horizons and ensure that transformative investments are not sacrificed to myopic assessments of debt sustainability risks. ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/6gydz6/imfpublic_investment_scalingup_and_debt/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ \"\"Version 1.65, ~142844 tl;drs so far.\"\") | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr \"\"PM's and comments are monitored, constructive feedback is welcome.\"\") | *Top* *keywords*: **IMF**^#1 **investment**^#2 **paper**^#3 **debt**^#4 **sustainability**^#5\"",
"title": ""
},
{
"docid": "3fd1f453fdf50f3d43731985b8d1c9bb",
"text": "Moreover the fact that they're simply invested in two of the biggest emerging market ETFs which preform well with global stability but are overall kinda risky long term goes to show that it's not some unheard of success. As you said, the proving ground will be whether they can make money in a down economy, where it's much harder to find profitable investments. Perhaps they'll switch to bonds and commodities.",
"title": ""
},
{
"docid": "7fbd96694deb9cdb0de005f541ce5f6e",
"text": "Index funds are well-known to give the best long-term investment. Are they? Maybe not all the time! If you had invested in an index fund tracking the S&P500 at the start of 2000 you would still be behind in terms of capital appreciation when taking inflation into considerations. Your only returns in 13.5 years would have been any dividends you may have received. See the monthly chart of the S&P500 below. Diversification can be good for your overall returns, but diversification simply for diversification sake is as you said, a way of reducing your overall returns in order of smoothing out your equity curve. After looking up indexes for various countries the only one that had made decent returns over a 13.5 year period was the Indian BSE 30 index, almost 400% over 13.5 years, although it also has gone nowhere since the end of 2007 (5.5 years). See monthly chart below. So investing internationally (especially in developing countries when developed nations are stagnating) can improve your returns, but I would learn about the various international markets first before plunging straight in. Regarding investing in an Index fund vs direct investment in a select group of shares, I did a search on the US markets with the following criteria on the 3rd January 2000: If the resulting top 10 from the search were bought on 3rd January 2000 and held up until the close of the market on the 19th June 2013, the results would be as per the table below: The result, almost 250% return in 13.5 years compared to almost no return if you had invested into the whole S&P 500 Index. Note, this table lists only the top ten from the search without screening through the charts, and no risk management was applied (if risk management was applied the 4 losses of 40%+ would have been limited to a maximum of 20%, but possibly much smaller losses or even for gains, as they might have gone into positive territory before coming back down - as I have not looked at any of the charts I cannot confirm this). This is one simple example how selecting good shares can result in much better returns than investing into a whole Index, as you are not pulled down by the bad stocks.",
"title": ""
},
{
"docid": "1aa8e87a1881bf344bdfee7c4c4e4eb5",
"text": "For a time period as short as a matter of months, commercial paper or bonds about to mature are the highest returning investments, as defined by Benjamin Graham: An investment operation is one which, upon thorough analysis, promises safety of principal and a satisfactory return. Operations not meeting these requirements are speculative. There are no well-known methods that can be applied to cryptocurrencies or forex for such short time periods to promise safety of principal. The problem is that with $1,500, it will be impossible to buy any worthy credit directly and hold to maturity; besides, the need for liquidity eats up the return, risk-adjusted. The only alternative is a bond ETF which has a high probability of getting crushed as interest rates continue to rise, so that fails the above criteria. The only alternative for investment now is a short term deposit with a bank. For speculation, anything goes... The best strategy is to take the money and continue to build up a financial structure: saving for risk-adjusted and time-discounted future annual cash flows. After the average unemployment cycle is funded, approximately six or so years, then long-term investments should be accumulated, internationally diversified equities.",
"title": ""
},
{
"docid": "8ecc829e44d10e0c8b04e51d2ec5afa0",
"text": "I'd say that the assets are 'invested' in non-productive sectors of the economy such as the finance sector. Also in pure market speculation and in revolving corporate acquisitions which inflate the nominal money supply but don't increase either physical production or services delivered by one thimble or one minute.",
"title": ""
},
{
"docid": "b59e1f0e5f5d21adf082959ab5a20dbb",
"text": "\"This is the best tl;dr I could make, [original](https://openknowledge.worldbank.org/handle/10986/27944) reduced by 56%. (I'm a bot) ***** > Bringing e-Money to the Poor: Successes and Failures examines the lessons of success from four country case studies of &quot;Gazelles&quot;―Kenya, South Africa, Sri Lanka, and Thailand―that leapt from limitation to innovation by successfully enabling the deployment of e-money technology. > These countries have thereby transformed the landscape of financial access to their poor. > Because technology is not a silver bullet, the case studies also explore other strategic elements that need to be in place for a country to expand access to financial services through digital technology. ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/6vuj7f/bringing_emoney_to_the_poorpdf/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ \"\"Version 1.65, ~198017 tl;drs so far.\"\") | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr \"\"PM's and comments are monitored, constructive feedback is welcome.\"\") | *Top* *keywords*: **access**^#1 **country**^#2 **e-money**^#3 **technology**^#4 **financial**^#5\"",
"title": ""
},
{
"docid": "92664171cbac80df44882c5012735c78",
"text": "There are many Shariah compliant investments, so that could direct your resulting searches. Shariah compliance is a very strict interpretation of Islam and for investing offers strict guidelines in what to invest in and excludes investments in companies that engage in certain businesses such as gambling, tobacco, pork and trading of gold and silver on a deferred basis (and more). Many multinational financial service companies such as the Standard & Poors (S&P) offer Shariah Compliant funds and indices, as such, it makes it easier to invest in a variety of different assets through them. You can also look at their fund's constituents and invest in those assets directly. Secondly, going back to your original question about a compound interest equivalent, you can look at the products offered by Shariah Compliant banks. Now, if it is really important for you to adhere to the strictest interpretations of your faith, you should know that most Islamic Banks have interest bearing assets within them and that they disguise that fact. The global financial system is based on interest bearing instruments such as bonds, and Islamic banks are large holders and issuers of those instruments, and all of their consumer products are also based on the interest rates of them. Even convoluted alternatives such as Islamic mortgages, where they are advertised as non-interest bearing equivalents, many times are also the interest bearing version. Unfortunately, these lies are enough for the banks to continue to get business from their target audiences, but outside of Islam this is a very standard and stable business practice. The point is that you should look very carefully at the alternatives you find.",
"title": ""
},
{
"docid": "dc669c07c7a6d3fd0cfcb328b92be3ba",
"text": "\"I'm not defending Faber, but from an statistical point your logic is terrible. It's a lot easier to go from 2 to 4 than it is from 200 to 400 - so any undeveloped third-world country should be growing a **lot** faster than places with existing stable economies. And to put \"\"fastest growing\"\" into context, it's 8.5%, which isn't even as big as I was expecting considering the US is growing at 3% and has a much larger base value.\"",
"title": ""
},
{
"docid": "c6d5c19eaa0665e82e44ae513025b627",
"text": "\"Shariah compliant investments attempt to achieve your \"\"ethical investing\"\" ideals. Many countries around the world have a long list of shariah compliant investments and lots of journalists will go great lengths to reveal when a company is not really shariah compliant. Standard & Poors (S&P), an American financial services company, hosts a Shariah compliant index too, but on the Toronto Stock Exchange in Canada due to the Islamaphobia rampant in the United States. But of course, international companies are indifferent to any single country's social problems, and in your new pastime as an international speculator you will get the same luxury too and exemption from the political spectrum. S&P/TSX 60 information can be found here: http://web.tmxmoney.com/tmx_indices.php?section=tsx&index=%5ETXSI Business sectors prohibited from the Shariah index include: Gambling, Pornography, Tobacco, amongst others. In the United States, the concept has been renamed \"\"B-Corporation\"\" (a play on the federal term C-Corporation and S-Corporation), and has garnered enough of a movement that several states have created these as entities people can actually register them with the state, but these are not recognized as \"\"B-Corporations\"\" to the federal government. Shariah compliant investments will be easier to find worldwide, due to the popularity of the associated religion.\"",
"title": ""
}
] |
fiqa
|
7bbaf208237bd39500fce67eccf032d1
|
Net income correlation with Stock Price
|
[
{
"docid": "96085ed5e9764b4c6311102d80047902",
"text": "Ideally, stock price reflects the value of the company, the dividends it is expected to pay, and what people expect the future value of the company to be. Only one of those (maybe one and a half) is related to current sales, and not always directly. Short-term motion of a stock is even less directly linked, since it also reflects previous expectations. A company can announce disappointing sales and see its stock go up, if the previous price was based on expecting worse news.",
"title": ""
},
{
"docid": "9e69f451f12482deb58cb22d96eafef6",
"text": "A company's stock price will reflect the general sentiment about a company's value now and in the future. Net income is only one figure. You need to crack open the net summary and see what's inside it. In the financials you reference in your question (http://www.marketwatch.com/investing/stock/FTNT/financials), you'll also notice that Ultimately, the stock price is just a reflection on what the market feels its (current) future is worth (you, me, other investors with future value calculators and strong opinions on what would provide value for them).",
"title": ""
}
] |
[
{
"docid": "e5fd2fc3ea79e1c5c3779c8ed00a42f8",
"text": "\"Yes, there are non-stock analogs to the Price/Earnings ratio. Rental properties have a Price/Rent ratio, which is analogous to stocks' Price/Revenue ratio. With rental properties, the \"\"Cap Rate\"\" is analogous to the inverse of the Price/Earnings ratio of a company that has no long-term debt. Bonds have an interest rate. Depending on whether you care about current dividends or potential income, the interest rate is analogous to either a stock's dividend rate or the inverse of the Price/Earnings ratio.\"",
"title": ""
},
{
"docid": "177520afa3ba3c94f80b068568d73cc0",
"text": "\"Note that we do not comment on specific stocks here, and have no place doing so. If your question is only about that specific stock then it is off topic. I have not tried to answer that part below. The key to valuation is predicting the net present value of all of a company's cash flows; i.e. of their future profits and losses. Through a number of methods to long to explain here investment banks and hedge funds work out what they expect the company's cash flows to be and trade so that these future profits, losses etc. are priced into the stock price. Since future cash flows, profits or whatever you want to call them are priced in, the price of a stock shouldn't move at all on an earnings statement. This begs the question \"\"why do some stock prices move violently when they announce earnings?\"\" The models that the institutional investors use are not perfect and cannot take into account everything. An unexpected craze for a product or a supply chain agreement breaking down on not being as good as it seems will not be factored into this pricing and so the price will move based on the degree to which expectation is missed or exceeded. Since penny socks are speculative their value is based far more on the long term expected cash flows and less on the short run cash flows. This goes a long way to explaining why some of the highest market capitalisation penny stocks are those making consistent losses. This means that they can be far less susceptible to price movements after an earnings announcement even if it is well out of the consensus range. Higher (potential) future value comes with the higher risks of penny stocks which discounts current value. In the end if people's expectation of the company's performance reflects reality then the profitability is priced in and there will be no price movement. If the actuality is outside of the expected range then there will be a price movement.\"",
"title": ""
},
{
"docid": "47e1b1d01bb31194a38b0bdea0b8fbe0",
"text": "\"The charts on nasdaq.com are log based, if you look closely you can see that the spacing between evenly incremented prices is tighter at the top of the chart and wider at the bottom. It's easiest to see on a stock with a wide price range using candlestick where you can clearly see the grid. I'm also not seeing the \"\"absurdism\"\" you indicate when I look at google finance with the settings ticked to use log on the price axis. I see what I'd expect which is basically a given vertical differential on the price axis representing the same percentage change in price no matter where it is located. For example if I look at GOOG from the earliest date they have (Aug 20 2004) to a nice high point (dec 7 2007) I see a cart where the gap from the the bottom of the chart (seems to be right around 100) to the 200 point, (a 100% increase) is the same as from 200 to 400 (a 100% increase) is the same as 400 to 800 (a 100# increase) That's exactly what I expect from a 'log' chart on a financial site, each relative move up or down of the same distance, represents the same relative change in value. So I'm having difficulty understanding what your complaint is. (note: I'm using chrome, which is the browser I'd expect to work best with any google website. results with other browsers could of course vary) If you want to do some other wacky math with the axis then I humbly suggest that something like Excel is your friend. Goto the charts at nasdaq.com get the chart displaying the period you care about, click the chart to display the unlying data, there will be an option to download the data. cram it into excel and go wild as you want with charting it out. e.g. note that step 2 links to client side javascript, so you will need javascript enabled, if you are running something like noscript, disable it for this site. Also since the data opens in a new window, you may also need to enabled 'popups' for the site. (and yes, I sometimes get an annoying news alert advert popup and have to close it when the chart first appears.. oh well it pays the rent and nasdaq is not charging you so for access so such is the price for a free site. )\"",
"title": ""
},
{
"docid": "5f818a172800ab3e8c4068baf50271cc",
"text": "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.",
"title": ""
},
{
"docid": "7260e33a94f0592cc40cc223803db899",
"text": "There are books on the subject of valuing stocks. P/E ratio has nothing directly to do with the value of a company. It may be an indication that the stock is undervalued or overvalued, but does not indicate the value itself. The direct value of company is what it would fetch if it was liquidated. For example, if you bought a dry cleaner and sold all of the equipment and receivables, how much would you get? To value a living company, you can treat it like a bond. For example, assume the company generates $1 million in profit every year and has a liquidation value of $2 million. Given the risk profile of the business, let's say we would like to make 8% on average per year, then the value of the business is approximately $1/0.08 + $2 = $14.5 million to us. To someone who expects to make more or less the value might be different. If the company has growth potential, you can adjust this figure by estimating the estimated income at different percentage chances of growth and decline, a growth curve so to speak. The value is then the net area under this curve. Of course, if you do this for NYSE and most NASDAQ stocks you will find that they have a capitalization way over these amounts. That is because they are being used as a store of wealth. People are buying the stocks just as a way to store money, not necessarily make a profit. It's kind of like buying land. Even though the land may never give you a penny of profit, you know you can always sell it and get your money back. Because of this, it is difficult to value high-profile equities. You are dealing with human psychology, not pennies and dollars.",
"title": ""
},
{
"docid": "974603438efffb44dbeb13d6df665925",
"text": "I don’t know specifics of the situation but one possibility would be that Buffett may have billions in various assets etc companies he owns, stocks bonds, but if he doesn’t sell any of those stocks or cash in any of those bonds, then on paper he didn’t make any money that year because he’s letting the assets appreciate. I would say net income is the amount of income you claimed that year, so if you had sold some stock, the amount of money you sold them for would be your income. As opposed to net worth being “if they wanted to” if Buffett sold all of his stocks and assets, he would be able to get billions for it. So while he technically is worth billions, on his tax returns he doesn’t claim much income.",
"title": ""
},
{
"docid": "e0032eafca184fb6973d7d72b2f60f85",
"text": "If you believe in the efficient market hypothesis then the stock price reflects the information known to market participants. Consequently, if the 'market' expected earnings to rise, and they did, then the price won't change. Clearly there are circumstances, especially in the short term and for illiquid stocks, where this isn't true, but a lot of work points to this being the case on average.",
"title": ""
},
{
"docid": "0905df12631772350b672e32f143dc23",
"text": "Here are a few things I've already done, and others reading this for their own use may want to try. It is very easy to find a pattern in any set of data. It is difficult to find a pattern that holds true in different data pulled from the same population. Using similar logic, don't look for a pattern in the data from the entire population. If you do, you won't have anything to test it against. If you don't have anything to test it against, it is difficult to tell the difference between a pattern that has a cause (and will likely continue) and a pattern that comes from random noise (which has no reason to continue). If you lose money in bad years, that's okay. Just make sure that the gains in good years are collectively greater than the losses in bad years. If you put $10 in and lose 50%, you then need a 100% gain just to get back up to $10. A Black Swan event (popularized by Nassim Taleb, if memory serves) is something that is unpredictable but will almost certainly happen at some point. For example, a significant natural disaster will almost certainly impact the United States (or any other large country) in the next year or two. However, at the moment we have very little idea what that disaster will be or where it will hit. By the same token, there will be Black Swan events in the financial market. I do not know what they will be or when they will happen, but I do know that they will happen. When building a system, make sure that it can survive those Black Swan events (stay above the death line, for any fellow Jim Collins fans). Recreate your work from scratch. Going through your work again will make you reevaluate your initial assumptions in the context of the final system. If you can recreate it with a different medium (i.e. paper and pen instead of a computer), this will also help you catch mistakes.",
"title": ""
},
{
"docid": "879c0735767dce73815b86de9e6871b6",
"text": "\"This is a classic correlation does not imply causation situation. There are (at least) three issues at play in this question: If you are swing- or day-trading then the first and second issues can definitely affect your trading. A higher-price, higher-volume stock will have smaller (percentage) volatility fluctuations within a very small period of time. However, in general, and especially when holding any position for any period of time during which unknowns can become known (such as Netflix's customer-loss announcement) it is a mistake to feel \"\"safe\"\" based on price alone. When considering longer-term investments (even weeks or months), and if you were to compare penny stocks with blue chip stocks, you still might find more \"\"stability\"\" in the higher value stocks. This is a correlation alone — in other words, a stable, reliable stock probably has a (relatively) high price but a high price does not mean it's reliable. As Joe said, the stock of any company that is exposed to significant risks can drop (or rise) by large amounts suddenly, and it is common for blue-chip stocks to move significantly in a period of months as changes in the market or the company itself manifest themselves. The last thing to remember when you are looking at raw dollar amounts is to remember to look at shares outstanding. Netflix has a price of $79 to Ford's $12; yet Ford has a larger market cap because there are nearly 4 billion shares compared to Netflix's 52m.\"",
"title": ""
},
{
"docid": "cf8488ef41130233fcc63a7b933a6fdf",
"text": "So, the price-earnings ratio is price over earnings, easy enough. But obviously earnings are not static. In the case of a growing company, the earnings will be higher in the future. There will be extra earnings, above and beyond what the stock has right now. You should consider the future earnings in your estimate of what the company is worth now. One snag: Those extra earnings are future money. Future-money is an interesting thing, it's actually worth less than present-money- because of things like inflation, but also opportunity cost. So if you bought $100 in money that you'll have 20 years from now, you'd expect to pay less than $100. (The US government can sell you that money. It's called a Series EE Savings Bond and it would cost you $50. I think. Don't quote me on that, though, ask the Treasury.) So you can't compare future money with present-money directly, and you can't just add those dollars to the earnings . You need to compute a discount. That's what discounted cash-flow analysis is about: figuring out the future cash flow, and then discounting the future figuring out what it's worth now. The actual way you use the discount rate in your formula is a little scarier than simple division, though, because it involves discounting each year's earnings (in this case, someone has asserted a discount of 11% a year, and five years of earnings growth of 10%). Wikipedia gives us the formula for the value of the future cash flow: essentially adding all the future cash flows together, and then discounting them by a (compounded) rate. Please forgive me for not filling this formula out; I'm here for theory, not math. :)",
"title": ""
},
{
"docid": "eb0b832c419be0fca81b784603de9143",
"text": "Earnings per share are not directly correlated to share price. NV Energy, the company you cited as an example, is an electric utility. The growth patterns and characteristics of utilities are well-defined, so generally speaking the value of the stock is driven by the quality of the company's cash flow. A utility with a good history of dividend increases, a dividend that is appropriate given the company's fiscal condition, (ie. A dividend that is not more than 80% of earnings) and a good outlook will be priced competitively. For other types of companies cash flow or even profits do not matter -- the prospects of future earnings matter. If a growth stock (say Netflix as an example) misses its growth projections for a quarter, the stock value will be punished.",
"title": ""
},
{
"docid": "04981ace31d06259a6ce292baf8a6279",
"text": "I expected a word or two on the price elasticity of demand here :) Andrey, Your question needs slight revision in its current form. Rising prices actually do not mean increased profitability for a company. The quantity they sell also pays a huge part and actually is correlated to the price at which they sell the goods (and other factors such as the price at which their competitor sells the goods etc., but we will ignore it for simplicity). The net profit of sales for any firm is equal to (Qty x Sale Price) - COGS - SG&A - taxes - other expenses where, COGS means cost of goods sold SG&A means sales, general and admin costs (e.g., cleaning the inventory storage area daily so that the goods stay fresh etc.) other expenses include any miscellaneous other costs that the firm incurs to make the sale. Now, if everything in that equation remains same (COGS, SG&A, taxes, and other expenditures), rising prices will only translate into a higher profit if the quantity does not fall by the same margin. Prices may also rise simply as a response to risking COGS, SG&A or other expenditures --the latter may be observed in inflationary environments. In such a case, the supplying firm can end up losing its profit margin if the quantity falls by more than the price rise.",
"title": ""
},
{
"docid": "0ca1721378cefa9bb81033071f689d90",
"text": "Auto-correlation is a statistical concept for measuring repeating patterns in series. In stocks it is of particular interest as if future prices can be reliably guessed from past prices a lot of money could be made. Note, even in cases where auto-correlations are high and persistent (near 1) there is still some possibility that the next time period would be down even if the previous period was up. Now the important part here is that high and persistent auto-correlation also means once the price falls the next period the price is also more likely to fall! Once one period was down the next period is more likely to be down so the price does not need to go to infinity. Instead, it generally would display up and down trends. Now, the key word above for investing is persistence. For stocks, auto-correlations are, at best, weakly persistent at reasonable time scales. So, even if a stock was highly auto-correlated during a previous period it is tough to make consistent money off of trading on these past trending patterns. This does not mean some people don't try...",
"title": ""
},
{
"docid": "9ffa2801a53684aa4778439927170236",
"text": "As others have pointed out, the value of Apple's stock and the NASDAQ are most likely highly correlated for a number of reasons, not least among them the fact that Apple is part of the NASDAQ. However, because numerous factors affect the entire market, or at least a significant subset of it, it makes sense to develop a strategy to remove all of these factors without resorting to use of an index. Using an index to remove the effect of these factors might be a good idea, but you run the risk of potentially introducing other factors that affect the index, but not Apple. I don't know what those would be, but it's a valid theoretical concern. In your question, you said you wanted to subtract them from each other, and only see an Apple curve moving around a horizontal line. The basic strategy I plan to use is similar but even simpler. Instead of graphing Apple's stock price, we can plot the difference between its stock price on business day t and business day t-1, which gives us this graph, which is essentially what you're looking for: While this is only the preliminaries, it should give you a basic idea of one procedure that's used extensively to do just what you're asking. I don't know of a website that will automatically give you such a metric, but you could download the price data and use Excel, Stata, etc. to analyze this. The reasoning behind this methodology builds heavily on time series econometrics, which for the sake of simplicity I won't go into in great detail, but I'll provide a brief explanation to satisfy the curious. In simple econometrics, most time series are approximated by a mathematical process comprised of several components: In the simplest case, the equations for a time series containing one or more of the above components are of the form that taking the first difference (the procedure I used above) will leave only the random component. However, if you want to pursue this rigorously, you would first perform a set of tests to determine if these components exist and if differencing is the best procedure to remove those that are present. Once you've reduced the series to its random component, you can use that component to examine how the process underlying the stock price has changed over the years. In my example, I highlighted Steve Jobs' death on the chart because it's one factor that may have led to the increased standard deviation/volatility of Apple's stock price. Although charts are somewhat subjective, it appears that the volatility was already increasing before his death, which could reflect other factors or the increasing expectation that he wouldn't be running the company in the near future, for whatever reason. My discussion of time series decomposition and the definitions of various components relies heavily on Walter Ender's text Applied Econometric Time Series. If you're interested, simple mathematical representations and a few relevant graphs are found on pages 1-3. Another related procedure would be to take the logarithm of the quotient of the current day's price and the previous day's price. In Apple's case, doing so yields this graph: This reduces the overall magnitude of the values and allows you to see potential outliers more clearly. This produces a similar effect to the difference taken above because the log of a quotient is the same as the difference of the logs The significant drop depicted during the year 2000 occurred between September 28th and September 29th, where the stock price dropped from 26.36 to 12.69. Apart from the general environment of the dot-com bubble bursting, I'm not sure why this occurred. Another excellent resource for time series econometrics is James Hamilton's book, Time Series Analysis. It's considered a classic in the field of econometrics, although similar to Enders' book, it's fairly advanced for most investors. I used Stata to generate the graphs above with data from Yahoo! Finance: There are a couple of nuances in this code related to how I defined the time series and the presence of weekends, but they don't affect the overall concept. For a robust analysis, I would make a few quick tweaks that would make the graphs less appealing without more work, but would allow for more accurate econometrics.",
"title": ""
},
{
"docid": "c1c2620e960c66a3465df030519f8644",
"text": "\"It is important to first understand that true causation of share price may not relate to historical correlation. Just like with scientific experiments, correlation does not imply causation. But we use stock price correlation to attempt to infer causation, where it is reasonable to do so. And to do that you need to understand that prices change for many reasons; some company specific, some industry specific, some market specific. Companies in the same industry may correlate when that industry goes up or down; companies with the same market may correlate when that market goes up or down. In general, in most industries, it is reasonable to assume that competitor companies have stocks which strongly correlate (positively) with each-other to the extent that they do the same thing. For a simple example, consider three resource companies: \"\"Oil Ltd.\"\" [100% of its assets relate to Oil]; \"\"Oil and Iron Inc.\"\" [50% of its value relates to Oil, 50% to Iron]; and \"\"Iron and Copper Ltd.\"\" [50% of its value relates to Iron, 50% to Copper]. For each of these companies, there are many things which affect value, but one could naively simplify things by saying \"\"value of a resource company is defined by the expected future volume of goods mined/drilled * the expected resource price, less all fixed and variable costs\"\". So, one major thing that impacts resource companies is simply the current & projected price of those resources. This means that if the price of Oil goes up or down, it will partially affect the value of the two Oil companies above - but how much it affects each company will depend on the volume of Oil it drills, and the timeline that it expects to get that Oil. For example, maybe Oil and Iron Ltd. has no currently producing Oil rigs, but it has just made massive investments which expect to drill Oil in 2 years - and the market expects Oil prices to return to a high value in 2 years. In that case, a drop in Oil would impact Oil Inc. severely, but perhaps it wouldn't impact Oil and Iron Ltd. as much. In this case, for the particular share price movement related to the price of Oil, the two companies would not be correlated. Iron and Copper Ltd. would be unaffected by the price of Oil [this is a simplification; Oil prices impact many areas of the economy], and therefore there would be no correlation at all between this company's shares. It is also likely that competitors face similar markets. If consumer spending goes down, then perhaps the stock of most consumer product companies would go down as well. There would be outliers, because specific companies may still succeed in a falling market, but in generally, there would be a lot of correlation between two companies with the same market. In the case that you list, Sony vs Samsung, there would be some factors that correlate positively, and some that correlate negatively. A clean example would be Blackberry stock vs Apple stock - because Apple's success had specifically negative ramifications for Blackberry. And yet, other tech company competitors also succeeded in the same time period, meaning they did not correlate negatively with Apple.\"",
"title": ""
}
] |
fiqa
|
5cc9a7a0ec3ab04f8075335baf8b8745
|
Ongoing Automatic Investment Fee
|
[
{
"docid": "918130a1c8eeb5200beae8679af18034",
"text": "Reading the plan documentation, yes, that is what it means. Each purchase by bank debit, whether one-time or automatic, costs $2 plus $0.06 per share; so if you invested $50, you would get slightly less than $48 in stock as a result (depending on the per-share price). Schedule of Fees Purchases – A one-time $15.00 enrollment fee to establish a new account for a non-shareholder will be deducted from the purchase amount. – Dividend reinvestment: The Hershey Company pays the transaction fee and per share* fee on your behalf. – Each optional cash purchase by one-time online bank debit will entail a transaction fee of $2.00 plus $0.06 per share* purchased. – Each optional cash purchase by check will entail a transaction fee of $5.00 plus $0.06 per share* purchased. – If funds are automatically deducted from your checking or savings account, the transaction fee is $2.00 plus $0.06 per share* purchased. Funds will be withdrawn on the 10th of each month, or the preceding business day if the 10th is not a business day. – Fees will be deducted from the purchase amount. – Returned check and rejected ACH debit fee is $35.00.",
"title": ""
}
] |
[
{
"docid": "27422fabde8fe2c027e46f3b8a9091c2",
"text": "Wealthsimple lists their prices as follows: Those are the fees you pay over and above what you pay for the underlying ETFs' management fees. But why not just invest in the ETFs yourself? The Canadian Couch Potato website shows some sample portfolios. The ETF option has an average Management Expense Ratio very similar to that of the ETFs used by Wealthsimple, but without the additional management fee. Rebalance once or twice a year and you cut your fees from approximately 0.57% (if investing mid-six-figures) to 0.17%, for very little work. Is it worth it to you? Well, that depends on how much you have to invest, and how much effort you are willing to put in. Wealthsimple isn't particularly unreasonable with their fees, but the fees do look a bit high once you are in to the six figures of investing. On the other hand, I often recommend Tangerine's mutual funds to my friends who are looking at investing for retirement. Those mutual funds, last time I checked, cost 1.09%. That's about twice what Wealthsimple is charging. But they are easy to understand and easy to invest in; a good choice for my friends looking to invest $1,000 - $50,000 in my opinion. So, and understanding this is just my personal opinion, I think Wealthsimple fits in a niche where Tangerine mutual funds carry too high a cost for you, but you don't want to do all the management yourself, even if this is just an hour or so of work, a couple of times a year. I wish they were cheaper, but their pricing makes sense for a lot of people in my opinion. Do they make sense for you? If you are looking at investing less than $10,000, I'd stick with an option like Tangerine, only because that's an easier option. If investing more than $100,000 or $200,000, I think you are paying a bit much for what they offer. But, many people pay much, much, much more for their investments.",
"title": ""
},
{
"docid": "e60c30bb513745a94722a086cfa2fad4",
"text": "\"What you seem to want is a dividend reinvestment plan (DRIP). That's typically offered by the broker, not by the ETF itself. Essentially this is a discounted purchase of new shares when you're dividend comes out. As noted in the answer by JoeTaxpayer, you'll still need to pay tax on the dividend, but that probably won't be a big problem unless you've got a lot of dividends. You'll pay that out of some other funds when it's due. All DRIPs (not just for ETFs) have potential to complicate computation of your tax basis for eventual sale, so be aware of that. It doesn't have to be a show-stopper for you, but it's something to consider before you start. It's probably less of a problem now than it used to be since brokers now have to report your basis on the 1099-B in the year of sale, reducing your administrative burden (if you trust them to get it right). Here's a list of brokerages that were offering this from a top-of-the-search-list article that I found online: Some brokerages, including TD Ameritrade, Vanguard, Scottrade, Schwab and, to a lesser extent, Etrade, offer ETF DRIPs—no-cost dividend reinvestment programs. This is very helpful for busy clients. Other brokerages, such as Fidelity, leave ETF dividend reinvestment to their clients. Source: http://www.etf.com/sections/blog/23595-your-etf-has-drip-drag.html?nopaging=1 Presumably the list is not constant. I almost didn't included but I thought the wide availability (at least as of the time of the article's posting) was more interesting than any specific broker on it. You'll want to do some research before you choose a broker to do this. Compare fees for sure, but also take into account other factors like how soon after the dividend they do the purchase (is it the ex-date, the pay date, or something else?). A quick search online should net you several decent articles with more information. I just searched on \"\"ETF DRIP\"\" to check it out.\"",
"title": ""
},
{
"docid": "4cd26d742c20c768e4ca24448d556523",
"text": "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.",
"title": ""
},
{
"docid": "eb84e724bb226333f80ea5fc01b6df45",
"text": "\"In many cases the expenses are not pulled out on a specific day, so this wouldn't work. On the other hand some funds do charge an annual or quarterly fee if your investment in the fund is larger than the minimum but lower than a \"\"small balance\"\" value. Many funds will reduce or eliminate this fee if you signup for electronic forms or other electronic services. Some will also eliminate the fee if the total investment in all your funds is above a certain level. For retirement funds what you suggest could be made more complex because of annual limits. Though if you were below the limits you could decide to add the extra funds to cover those expenses as the end of the year approached.\"",
"title": ""
},
{
"docid": "2a0af1c2c1b6c26dbc6f6d137d149688",
"text": "There are several things being mixed up in the questions being asked. The expense ratio charged by the mutual fund is built into the NAV per share of the fund, and you do not see the charge explicitly mentioned as a deduction on your 401k statement (or in the statement received from the mutual fund in a non-401k situation). The expense ratio is listed in the fund's prospectus, and should also have been made available to you in the literature about the new 401k plan that your employer is setting up. Mutual fund fees (for things like having a small balance, or for that matter, sales charges if any of the funds in the 401k are load funds, God forbid) are different. Some load mutual funds waive the sales charge load for 401k participants, while some may not. Actually, it all depends on how hard the employer negotiates with the 401k administration company who handles all the paperwork and the mutual fund company with which the 401k administration company negotiates. (In the 1980s, Fidelity Magellan (3% sales load) was a hot fund, but my employer managed to get it as an option in our plan with no sales load: it helped that my employer was large and could twist arms more easily than a mom-and-pop outfit or Solo 401k plan could). A long long time ago in a galaxy far far away, my first ever IRA contribution of $2000 into a no-load mutual fund resulted in a $25 annual maintenance fee, but the law allowed the payment of this fee separately from the $2000 if the IRA owner wished to do so. (If not, the $25 would reduce the IRA balance (and no, this did not count as a premature distribution from the IRA). Plan expenses are what the 401k administration company charges the employer for running the plan (and these expenses are not necessarily peanuts; a 401k plan is not something that needs just a spreadsheet -- there is lots of other paperwork that the employee never gets to see). In some cases, the employer pays the entire expense as a cost of doing business; in other cases, part is paid by the employer and the rest is passed on to the employees. As far as I know, there is no mechanism for the employee to pay these expenses outside the 401k plan (that is, these expenses are (visibly) deducted from the 401k plan balance). Finally, with regard to the question asked: how are plan fees divided among the investment options? I don't believe that anyone other than the 401k plan administrator or the employer can answer this. Even if the employer simply adopts one of the pre-packaged plans offered by a big 401k administrator (many brokerages and mutual fund companies offer these), the exact numbers depend on which pre-packaged plan has been chosen. (I do think the answers the OP has received are rubbish).",
"title": ""
},
{
"docid": "8f94c2aedfcae7a40f3f9d639c2e702a",
"text": "Your investment is probably in a Collective Investment Trust. These are not mutual funds, and are not publicly traded. I.e. they are private to plan participants in your company. Because of this, they are not required* to distribute dividends like mutual funds. Instead, they will reinvest dividends automatically, increasing the value of the fund, rather than number of shares, as with dividend reinvestment. Sine you mention the S&P 500 fund you have tracks closely to the S&P Index, keep in mind there's two indexes you could be looking at: Without any new contributions, your fund should closely track the Total Return version for periods 3 months or longer, minus the expense ratio. If you are adding contributions to the fund, you can't just look at the start and end balances. The comparison is trickier and you'll need to use the Internal Rate of Return (look into the XIRR function in Excel/Google Sheets). *MFs are not strictly required to pay dividends, but are strongly tax-incentivized to do so, and essentially all do.",
"title": ""
},
{
"docid": "f9f85f2ca6676707e825954304d4e8ed",
"text": "You have to read the fine print of the pension wrapper (Standard Life), and of the new fund you want to invest into to find out. Typically here is were the fee feast could happen So you can manage actively your pension pot. But if you choose to do so you need to be mindful of the fees you have to pay. You should better find a pension wrapper with low fees and find funds with low fees If you change all your funds 4 times a year and you get a 1% charge each time, then you pay 4% of your assets. If your investments return for that year is 8%, then you wiped 50% of your return for that year! Good luck with the reading",
"title": ""
},
{
"docid": "b7c8115416ff9f0bb1c0fe23627ab8ab",
"text": "The creation mechanism for ETF's ensures that the value of the underlying stocks do not diverge significantly from the Fund's value. Authorized participants have a strong incentive to arbitrage any pricing differences and create/redeem blocks of stock/etf until the prices are back inline. Contrary to what was stated in a previous answer, this mechanism lowers the cost of management of ETF's when compared to mutual funds that must access the market on a regular basis when any investors enter/exit the fund. The ETF only needs to create/redeem in a wholesale basis, this allows them to operate with management fees that are much lower than those of a mutual fund. Expenses Due to the passive nature of indexed strategies, the internal expenses of most ETFs are considerably lower than those of many mutual funds. Of the more than 900 available ETFs listed on Morningstar in 2010, those with the lowest expense ratios charged about .10%, while those with the highest expenses ran about 1.25%. By comparison, the lowest fund fees range from .01% to more than 10% per year for other funds. (For more on mutual fund feeds, read Stop Paying High Fees.)",
"title": ""
},
{
"docid": "55a0bf6bc65d807b555cb98d1d2a6053",
"text": "Your best bet is to remove the excess contribution. Your broker should have forms to do that. There is a 6% tax on the excess contributions for each year that it remains uncorrected. It would be better to just eat the $25 fee and get rid of any future headaches.",
"title": ""
},
{
"docid": "b18dfb2f980c7c6e0d47ae978440fba3",
"text": "\"The definition you cite is correct, but obscure. I prefer a forward looking definition. Consider the real investment. You make an original investment at some point in time. You make a series of further deposits and withdrawals at specified times. At some point after the last deposit/withdrawal, (the \"\"end\"\") the cash value of the investment is determined. Now, find a bank account that pays interest compounded daily. Possibly it should allow overdrafts where it charges the same interest rate. Make deposits and withdrawals to/from this account that match the investment payments in amount and date. At the \"\"end\"\" the value in this bank account is the same as the investment. The bank interest rate that makes this happen is the IRR for the investment...\"",
"title": ""
},
{
"docid": "8ab91520c2ca608ff5b18cef8bc8bc97",
"text": "\"What are reasonable administrative fees for an IRA? was recently discussed here. My answer was zero. An IRA is not an investment, it's a container representing the tax status of an account. Once you decide what to actually invest it in, you'll likely incur additional fees. Mutual funds, for instance can range from .05% per year to 2.00% or more. In your case, you are telling us you are spending 2% per year even before you decide what to invest in. The real question I'd like to see answered is \"\"what value can an advisor bring to one's retirement account to deserve a 2%/year fee?\"\" My final thought - most financial types had been suggesting that a retiree can target a 4% per year withdrawal after retiring. This rule of thumb has been debated since the lost decade of 2000-2009, and the safe number may be lower. If an advisor is taking 2% off the top, you are basically sharing half your income with him. A million dollar IRA, you get $20K, he gets $20K?\"",
"title": ""
},
{
"docid": "5c5700d815d1ffe9510d788c7d2f1a85",
"text": "Yes, assuming that your cash flow is constantly of size 5 and initial investment is 100, the following applies: IRR of 5% over 3 years: Value of CashFlows: 4.7619 + 4.5351 + 4.3192 = 13.6162 NPV: 100 - 13.6162 = 86.3838 Continuous compounding: 86.3838 * (1.05^3) = 100",
"title": ""
},
{
"docid": "767b1dc8168c2f5921549d593189f0dc",
"text": "\"One reason is that it is not possible (at Vanguard and at many other brokerages) to auto-invest into ETFs. Because the ETF trades like a stock, you typically must buy a whole number of shares. This makes it difficult to do auto-investing where you invest, say, a fixed dollar amount each month. If you're investing $100 and the ETF trades for $30 a share, you must either buy 3 shares and leave $10 unspent, or buy 4 and spend $20 more than you planned. This makes auto-investing with dollar amounts difficult. (It would be cool if there were brokerages that handled this for you, for instance by accumulating \"\"leftover\"\" cash until an additional whole share could be purchased, but I don't know of any.) A difference of 0.12% in the expense ratios is real, but small. It may be outweighed by the psychological gains of being able to adopt a \"\"hands-off\"\" auto-investing plan. With ETFs, you generally must remember to \"\"manually\"\" buy the shares yourself every so often. For many average investors, the advantage of being able to invest without having to think about it at all is worth a small increase in expense ratio. The 0.12% savings don't do you any good if you never remember to buy shares until the market is already up.\"",
"title": ""
},
{
"docid": "d1eee4f33571648fb95733b26e6f5736",
"text": "\"Here's an example that I'm trying to figure out. ETF firm has an agreement with GS for blocks of IBM. They have agreed on daily VWAP + 1% for execution price. Further, there is a commission schedule for 5 mils with GS. Come month end, ETF firm has to do a monthly rebalance. As such must buy 100,000 shares at IBM which goes for about $100 The commission for the trade is 100,000 * 5 mils = $500 in commission for that trade. I assume all of this is covered in the expense ratio. Such that if VWAP for the day was 100, then each share got executed to the ETF at 101 (VWAP+ %1) + .0005 (5 mils per share) = for a resultant 101.0005 cost basis The ETF then turns around and takes out (let's say) 1% as the expense ratio ($1.01005 per share) I think everything so far is pretty straight forward. Let me know if I missed something to this point. Now, this is what I'm trying to get my head around. ETF firm has a revenue sharing agreement as well as other \"\"relations\"\" with GS. One of which is 50% back on commissions as soft dollars. On top of that GS has a program where if you do a set amount of \"\"VWAP +\"\" trades you are eligible for their corporate well-being programs and other \"\"sponsorship\"\" of ETF's interests including helping to pay for marketing, rent, computers, etc. Does that happen? Do these disclosures exist somewhere?\"",
"title": ""
},
{
"docid": "62805ccdb9c6fbf48715ce3709ffaa39",
"text": "I think the main question is whether the 1.5% quarterly fee is so bad that it warrants losing $60,000 immediately. Suppose they pull it out now, so they have 220000 - 60000 = $160,000. They then invest this in a low-cost index fund, earning say 6% per year on average over 10 years. The result: Alternatively, they leave the $220,000 in but tell the manager to invest it in the same index fund now. They earn nothing because the manager's rapacious fees eat up all the gains (4*1.5% = 6%, not perfectly accurate due to compounding but close enough since 6% is only an estimate anyway). The result: the same $220,000 they started with. This back-of-the-envelope calculation suggests they will actually come out ahead by biting the bullet and taking the money out. However, I would definitely not advise them to take this major step just based on this simple calculation. Many other factors are relevant (e.g., taxes when selling the existing investment to buy the index fund, how much of their savings was this $300,000). Also, I don't know anything about how investment works in Hong Kong, so there could be some wrinkles that modify or invalidate this simple calculation. But it is a starting point. Based on what you say here, I'd say they should take the earliest opportunity to tell everyone they know never to work with this investment manager. I would go so far as to say they should look at his credentials (e.g., see what kind of financial advisor certification he has, if any), look up the ethical standards of their issuers, and consider filing a complaint. This is not because of the performance of the investments -- losing 25% of your money due to market swings is a risk you have to accept -- but because of the exorbitant fees. Unless Hong Kong has got some crazy kind of investment management market, charging 1.5% quarterly is highway robbery; charging a 25%+ for withdrawal is pillage. Personally, I would seriously consider withdrawing the money even if the manager's investments had outperformed the market.",
"title": ""
}
] |
fiqa
|
6a2ddca71d05f22735a2e723c5a5df45
|
Giving kids annual tax free gift of $28,000
|
[
{
"docid": "6824a94d1bb6405c0a1cb9c114b590e3",
"text": "Why limit yourself to $28K per year? If you pay the tuition directly to the institution, it does not count against your annual or lifetime gift-giving totals. You could pay the entire tuition each year with no tax consequences. The only thing you can't do if you want to go this route is give the money to your children; that's what causes the gift tax to kick in. The money must be paid directly to the school.",
"title": ""
},
{
"docid": "6bde4f83c9800288a078596c981ea9c7",
"text": "\"From the IRS' website: How many annual exclusions are available? The annual exclusion applies to gifts to each donee. In other words, if you give each of your children $11,000 in 2002-2005, $12,000 in 2006-2008, $13,000 in 2009-2012 and $14,000 on or after January 1, 2013, the annual exclusion applies to each gift. The annual exclusion for 2014, 2015, and 2016 is $14,000. What if my spouse and I want to give away property that we own together? You are each entitled to the annual exclusion amount on the gift. Together, you can give $22,000 to each donee (2002-2005) or $24,000 (2006-2008), $26,000 (2009-2012) and $28,000 on or after January 1, 2013 (including 2014, 2015, and 2016). https://www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-gift-taxes Basically, this means that it doesn't matter which person it specifically comes from as it's a \"\"joint\"\" gift. There is more complicated paperwork to fill out if the gift comes from a single check and needs to be \"\"split\"\" for taxes. Each parent would need to fill out a separate gift tax return form, essentially proving that both parents approve of the gift. It seems like it's easier if each parent writes a separate check, however it's not a requirement.\"",
"title": ""
},
{
"docid": "7b3f14aea68e7a10cc712ef26eb2dcd3",
"text": "If the child is a dependent the question is moot. It is accepted that the parent will pay for some, most, or all of the tuition. There is no tax issue for a current student. The payment of tuition helps them qualify as a dependent. There is no need to transfer the money to the child's account; it can be sent directly to the school. If the money is to be used in the future there are accounts such as 529s pre-paid accounts, and Coverdell savings accounts that can be used. All have pluses and minuses, all can impact taxes, and all can impact financial aid calculations.",
"title": ""
}
] |
[
{
"docid": "ffd08dea7dad0b41a6ed09bda545c60a",
"text": "No, any gifts you receive are not taxable to you. In fact, losing money in a scam (as this sure sounds like to me) can even be tax-deductible if you lose enough! I wouldn't recommend accepting anything. Usually people with millions are dollars are capable of setting up their own bank accounts.",
"title": ""
},
{
"docid": "525e392a0ac6242236018d295cf5f8fc",
"text": "I used TurboTax last year. It had a section for donations where it figured out the amounts of the IRS approved values for a donation. You would need to know the size of the television and the current condition it is in. He's a screenshot - though it's not from the TV section. https://turbotax.intuit.com/tax-tools/tax-tips/Taxes-101/Video--How-to-Estimate-the-Value-of-Clothing-for-IRS-Deductions/INF13870.html+&cd=8&hl=en&ct=clnk&gl=us TurboTax offers a free online tool called ItsDeductible that does the same thing (though I haven't tried it). Unfortunately, I don't have the current one with TV's to give you the range of amounts that apply to yours. --I am not affiliated with TurboTax and did not receive it for free for a review.",
"title": ""
},
{
"docid": "39144d63f163fe2999ab1b3774ebda0e",
"text": "There is not any fraud involved. Anybody can gift money to another person.",
"title": ""
},
{
"docid": "eb0aaf07385a614da2199677cdbf2c77",
"text": "Look into the Coverdell Education Savings Account (ESA). This is like a Roth IRA for higher education expenses. Withdrawals are tax free when used for qualified expenses. Contributions are capped at $2000/year per beneficiary (not per account) so it works well for young kids, and not so well for kids about to go to College. This program (like all tax law) are prone to changes due to action (or inaction) in the US Congress. Currently, some of the benefits are set to sunset in 2010 though they are expected to be renewed in some form by Congress this year.",
"title": ""
},
{
"docid": "5def525b2a57b46bcad7d51eab491630",
"text": "\"Can I teach children an invaluable skill for free and provide a website or PayPal link for anyone who appreciates the result of my gift to their child and wishes to gift me money (or maybe they don’t have a child but believe in my revolutionary contribution to the future) as they see fit, up to $10K? Two immediately obvious problems with this strategy: What about when you receive gifts from people who aren't in the US? You have to declare, and pay taxes on, foreign gifts. It seems to me that these may not be gifts because they are given in connection with the service you provided rather than from \"\"detached and disinterested generosity\"\" as required to make the gift tax exempt. (See Commisioner v. Duberstein -- gift given to thank associate for a sales lead did not arise from detached generosity. See Stanton v. United States -- gift given in appreciation of services rendered may or may not be a gift for tax purposes. See also Bogardus v. Commissioner -- gifts inspired by past service can be tax exempt.)\"",
"title": ""
},
{
"docid": "b13137b08509ded0d14669718b79b904",
"text": "It is correct, in general. Gift tax is indeed at 35%, but you have the first 14K of your gift exempt from it for each person you give to, yearly (verify the number, it changes every year). You can also use your lifetime exemption ($5.45M in 2016, subject to change each year), but at the amounts you're talking about it still will not be enough. Charitable (501(c)) organizations, paying for someone's tuition or medical expenses (directly to the providers), political donations, transfer between you and your spouse - these are all exempt from gift tax. If you have 10 millions to give, I'm sure you can afford a $200 consultation with a EA/CPA licensed in your state.",
"title": ""
},
{
"docid": "98e60e1fe7071d83c46a65c9edaebb62",
"text": "When you apply for the mortgage expect that the lender will want your sister to sign a form explaining that that is a gift, otherwise the lender might be concerned that it is a loan. Be careful about the gifting of the money to a minor. You could run into an issue if the money isn't spent on something that benefits the child. The IRS does get concerned about using money transfers between child and parent to get around tax issues. Other than that you don't have a tax issue. If the gifting is done correctly your sister can gift $14,000 to you and your spouse each year. If your child has a large expenses in the near future: tuition, braces... Your sister could transfer funds to the child to pay for those items, thus freeing up some of your funds for the house.",
"title": ""
},
{
"docid": "cf058eee9c4834b7292b367fd3c1f15a",
"text": "As much as you want. There's no tax on gifts you receive. Gift tax is on the donor, i.e.: the person giving the gift. The $100K limit is for reporting. Gifts of $100K or more per year from foreign sources must be disclosed on form 3520 attached to your tax return. But there's no tax. Read more here.",
"title": ""
},
{
"docid": "3fd6b4b3098f509fe727bf7a0c5a72f0",
"text": "Canada doesn't seem to have a gift tax. http://www.taxtips.ca/personaltax/giftsandinheritances.htm",
"title": ""
},
{
"docid": "cd8357d402dd8084d8d89d0fc81cd792",
"text": "Of course, you've already realized that some of that is that smaller estates are more common than larger estates. But it seems unlikely that there are four times as many estates between $10 and $11 million as above that range. People who expect to die with an estate subject to inheritance tax tend to prepare. I don't know how common it is, but if the surviving member of a couple remarries, then the new spouse gets a separate exemption. And of course spouses inherit from spouses without tax. In theory this could last indefinitely. In practice, it is less likely. But if a married couple has $20 million, the first spouse could leave $15 million to the second and $5 million to other heirs. The second spouse could leave $10 million to a third spouse (after remarrying) and another $5 million to children with the first spouse. All without triggering the estate tax. People can put some of their estate into a trust. This can allow the heirs to continue to control the money while not paying inheritance tax. Supposedly Ford (of Ford Motor Company) took that route. Another common strategy is to give the maximum without gift tax each year. That's at least $14k per donor and recipient per year. So a married couple with two kids can transfer $56k per year. Plus $56k for the kids' spouses. And if there are four grandchildren, that's another $112k. Great-grandchildren count too. That's more than a million every five years. So given ten years to prepare, parents can transfer $2 million out of the estate and to the heirs without tax. Consider the case of two wealthy siblings. They've each maxed out their gifts to their own heirs. So they agree to max out their gifts to their sibling's heirs. This effectively doubles the transfer amount without tax implication. Also realize that they can pretransfer assets at the current market rate. So if a rich person has an asset that is currently undervalued, it may make sense to transfer it immediately as a gift. This will use up some of the estate exemption. But if you're going to transfer the asset eventually, you might as well do so when the value is optimal for your purpose. These are just the easy things to do. If someone wants, they can do more complicated things that make it harder for the IRS to track value. For example, the Bezos family invested in Amazon.com when Jeff Bezos was starting it. As a result, his company could survive capital losses that another company might not. The effect of this was to make him fabulously rich and his parents richer than they were. But he won't pay inheritance tax until his parents actually transfer the estate to him (and I believe they actually put it in a charitable trust). If his company had failed instead, he still would have been supported by the capital provided by his parents while it was open (e.g. his salary). But he wouldn't have paid inheritance tax on it. There are other examples of the same pattern: Fred Smith of FedEx; Donald Trump; Bill Gates of Microsoft; etc. The prime value of the estate was not in its transfer, but in working together while alive or through a family trust. The child's company became much more valuable as a result of a parent's wealth. And in two of those examples, the child was so successful that the parent became richer as a result. So the parent's estate does count. Meanwhile, another company might fail, leaving the estate below the threshold despite a great deal of parental support. And those aren't even fiddles. Those children started real companies and offered their parents real investment opportunities. A family that wants to do so can do a lot more with arrangements. Of course, the IRS may be looking for some of them. The point being that the estate might be more than $11 million earlier, but the parents can find ways to reduce it below the inheritance tax exemption by the time that they die.",
"title": ""
},
{
"docid": "794ea32bcc14adc5586eceeeb639c9ee",
"text": "The $250K and up are not one homogeneous group. The lower end of this group benefits from normal Schedule A itemized deductions, e.g. mortgage interest, property tax, state income tax, and charitable donations. As you mention, 401(k) ($17k employee contribution limit this year), but also things like the dependent care account ($5k limit) and flexible spending account, limited usually up to $2500 in '14. The 529 deposits are limited to the gifting limit, $14K in 2014, but one can gift up to five years' deposits up front. This isn't a tax deduction, but does pull money out of one's estate and lets it grow tax free similar to a Roth IRA. The savings from such accounts is probably in the $15k - $20K range given the 20 or so year lifetime of the account and limited deposits. At the higher end, the folks making the news are those whose income is all considered capital gains. This applies both to hedge fund managers as well as CEOs whose compensation included large blocks of stock. This isn't a tax deduction, but it's how our system works, the taxation of capital gains vs. ordinary income.",
"title": ""
},
{
"docid": "bcfbda6f6efd84f91788beed892a5c23",
"text": "\"Donations, particularly those in the context of you providing a free service (software, libraries, etc.) are a notable grey area in tax code. Simply naming a button \"\"Donate\"\" doesn't necessarily classify the money transfer as a \"\"gift\"\". The IRS can decide that it's money you're being paid to continue your excellent work/service, making it taxable income (unless you're a registered non-profit organization). In the instance of Patreon, and many other crowd-funding services, you're providing a certain level of \"\"service\"\" for each tier of donations (such as early access or something, I'm not sure what you're offering), which means they're receiving consideration for their donations, which most likely makes it fall into taxable income (again, unless you're a registered non-profit organization). State tax law is even more convoluted, and you should consult your tax professional for clarification on your specific situation.\"",
"title": ""
},
{
"docid": "f81e91726cfe39f60d23c4b8e9cf2805",
"text": "Generally, a one time thing is considered a gift. For the donor this is obviously not a deductible expense, except for some specific cases (for example promotional gifts under $25 to vendors can be deducted, if you're a business, or charitable contributions to a recognized charity). However, if this is a regular practice - that would not be considered as a gift, but rather as a tax fraud, a criminal offense. Being attentive I would like to make a little gift or give some little (<100$) amount of money (cash/wire/online) for that Why? Generally, gift is exempt from income if no services were provided and the gift was made in good faith. In the situation you describe this doesn't hold. When the gift is exempt from income to the receiver - the donor pays the tax (in this case, below exemption the tax is zero). If the gift is not exempt from income to the receiver - it is no longer a gift and the receiver is paying income taxes, not the donor. The situation you describe is a classic tax evasion scheme. If someone does it consistently and regularly (as a receiver, donor, or both) - he would likely end up in jail.",
"title": ""
},
{
"docid": "32440138360a245a86874a9d91b4be38",
"text": "Here's an excerpt from the Charles Schwab website which I think will help evaluate your position: The simple answer to your question is no, the value of a gift of stock for gift tax liability is NOT the donor's cost basis, but rather the fair market value of the stock at the time the gift is given. So let's say you purchased 100 shares of XYZ stock at $50 a share. Your cost basis is $5,000. Now the stock is $80 a share and you give it as a gift. The value of your gift for gift tax purposes is $8,000. In 2015, you can give up to $14,000 to an unlimited number of individuals each year without paying a gift tax or even reporting the gifts. If you give over that amount to any individual, however, you must report the gift on your tax return, but you don't have to pay taxes until you give away more than the current lifetime limit of $5,430,000—for the amount above and beyond $14,000 per person per year. So in the example above, there would be no gift tax liability. However, if the stock happened to be $150 a share, the value of the gift would be $15,000. You'd then have to report it and $1,000 would be applied toward your $5,430,000 lifetime exclusion. You will need to pay a gift tax on the current value of the stock. I'm not familiar with the tax laws in India, but if your brother was in the US, he wouldn't pay taxes on that gift until he sells the stock. The recipient doesn’t have to worry about gift taxes. It's when the recipient decides to sell the stock that the issue of valuation comes up—for income taxes. And this is where things can get a bit more complicated. In general, when valuing a gift of stock for capital gains tax liability, it's the donor's cost basis and holding period that rules. As an example, let's say you receive a gift of stock from your grandfather. He bought it for $10 a share and it's worth $15 a share on the day you receive it. If you then sell the stock, whether for a gain or a loss, your cost basis will be the same as your grandfather’s: $10 per share. Sell it at $25 and you'll pay tax (at the short- or long-term rate, depending on how long he owned the stock) on a gain of $15 a share; sell it at $8 and your capital loss will be $2 a share. Ultimately, with a gift this large that also crosses international borders, you really should hire a professional who is experienced with these types of transactions. Their fees/commission will be completely offset by the savings in risk and paperwork. http://www.schwab.com/public/schwab/nn/articles/How-Do-You-Value-a-Gift-of-Stock-It-Depends-on-Whether-You-re-the-Giver-or-the-Receiver",
"title": ""
},
{
"docid": "87254cb12ea0aac29a573d7a277be58e",
"text": "There are no US taxes for receiving a gift (you). There may be US taxes for giving a gift (the gift tax), for your parents, but if they are nonresidents and the money they are giving was not situated in the US, then they do not have US gift tax. You have to report a gift from a foreign person if it exceeds $100,000.",
"title": ""
}
] |
fiqa
|
ff3b5afd7a21ce80eda7cd1fa42ca074
|
Can Professional Certifications be written off in taxes?
|
[
{
"docid": "08d3cf44b3b8579ce1b4cfa32afcaf7a",
"text": "\"There are a number of federal tax deductions and credits available for education expenses. They are too numerous to describe here, but the place to get full details is IRS Pub 970. Note that many, but not all, of them require that you be enrolled in a degree program; since this does not seem to be the case for you, you would not be eligible for those programs. None of them is as simple / generous as \"\"deduct the full amount of your tuition with no limits\"\". Also note that there are restrictions on using more than one of these deductions or credits in any given tax year. You might pay special attention to Chapter 12, \"\"Business Deduction for Work-Related Education\"\". In particular, this program allows you to deduct transportation expenses under some conditions, which does not seem to be the case for the other programs. But also note carefully the restrictions. In particular, \"\"Education that is part of a program of study that will qualify you for a new trade or business is not qualifying work-related education.\"\" So if you are not already working in the field of IT, you may not be eligible for this deduction.\"",
"title": ""
}
] |
[
{
"docid": "0a788c0d227d60e290dc71775c247243",
"text": "Yes, you've summarized it well. You may be able to depreciate your computer, expense some software licenses and may be home office if you qualify, but at this scale of earning - it will probably not cover for the loss of the money you need to pay for the additional SE tax (the employer part of the FICA taxes for W2 employees) and benefits (subsidized health insurance, bonuses you get from your employer, insurances, etc). Don't forget the additional expense of business licenses, liability insurances etc. While relatively small amounts and deductible - still money out of your pocket. That said... Good luck earning $96K on ODesk.",
"title": ""
},
{
"docid": "ac752fb104fc90705e42850f151aec14",
"text": "What I'm going to write is far too long for a comment, so I'll put it here even though its not an answer. That's the closest thing to an answer you'll get here, I'm afraid. I'm not a tax professional, and you cannot rely on anything I say, as you undoubtedly know. But I'll give you some pointers. Things you should be researching when you have international clients: Check if Sec. 402 can apply to the pension funds, if so your life may become much easier. If not, and you have no idea what you're doing - consider referring the client elsewhere. You can end up with quite a liability suit if you make a mistake here, because the penalties on not filing the right piece of paper are enormous.",
"title": ""
},
{
"docid": "29f435b2c18dc8dbc198bb80a1cabc83",
"text": "If treaties are involved for something other than exempting student wages on campus, you shouldn't do it yourself but talk to a licensed US tax adviser (EA/CPA licensed in your state) who's well-versed in the specific treaty. Double taxation provisions generally mean that you can credit the foreign tax paid to your US tax liability, but in the US you can do that regardless of treaties (some countries don't allow that). Also, if you're a US tax resident (or even worse - a US citizen), the royalties related treaty provision might not even apply to you at all (see the savings clause). FICA taxes are generally not part of the income tax treaties but totalization agreements (social security-related taxes, not income taxes). Most countries who have income tax treaties with the US - don't have social security totalization agreements. Bottom line - talk to a licensed professional.",
"title": ""
},
{
"docid": "1a47af56d5b794e7f58cdb39117264bd",
"text": "\"TL;DR - my understanding of the rules is that if you are required to register for GST (earning more than $75k per annum), you would be required to pay GST on these items. To clarify firstly: taxable income, and goods and services tax, are two different things. Any income you receive needs to be considered for income tax purposes - whether or not it ends up being taxable income would be too much to go into here, but generally you would take your expenses, and any deductions, away from your income to arrive at what would generally be the taxable amount. An accountant will help you do this. Income tax is paid by anyone who earns income over the tax free threshold. By contrast, goods and services tax is a tax paid by business (of which you are running one). Of course, this is passed on to the consumer, but it's the business that remits the payment to the tax office. However, GST isn't required to be charged and paid in all cases: The key in your situation is first determining whether you need to register for GST (or whether indeed you already have). If you earn less than $75,000 per year - no need to register. If you do earn more than that through your business, or you have registered anyway, then the next question is whether your items are GST-free. The ATO says that \"\"some education courses [and] course materials\"\" are GST-free. Whether this applies to you or not I'm obviously not going to be able to comment on, so I would advise getting an accountant's advice on this (or at the very least, call the ATO or browse their legal database). Thirdly, are your sales connected with Australia? The ATO says that \"\"A sale of something other than goods or property is connected with Australia if ... the thing is done in Australia [or] the seller makes the sale through a business they carry on in Australia\"\". Both of these appear to be true in your case. So in summary: if you are required to register for GST, you would be required to pay GST on these items. I am not a financial advisor or a tax accountant and this is not financial advice.\"",
"title": ""
},
{
"docid": "d55b27429ba53a663bc7257aa958fc75",
"text": "\"I am going to keep things very simple and explain the common-sense reason why the accountant is right: Also, my sister in law owns a small restaurant, where they claim their accountant informed them of the same thing, where a portion of their business purchases had to be counted as taxable personal income. In this case, they said their actual income for the year (through their paychecks) was around 40-50K, but because of this detail, their taxable income came out to be around 180K, causing them to owe a huge amount of tax (30K ish). Consider them and a similarly situated couple that didn't make these purchases. Your sister in law is better off in that she has the benefit of these purchases (increasing the value of her business and her expected future income), but she's worse off because she got less pay. Presumably, she thought this was a fair trade, otherwise she wouldn't have made those purchases. So why should she pay any less in taxes? There's no reason making fair trades should reduce anyone's tax burden. Now, as the items she purchased lose value, that will be a business loss called \"\"depreciation\"\". That will be deductible. But the purchases themselves are not, and the income that generated the money to make those purchases is taxable. Generally speaking, business gains are taxable, regardless of what you do with the money (whether you pay yourself, invest it, leave it in the business, or whatever). Generally speaking, only business losses or expenses are deductible. A purchase is an even exchange of income for valuable property -- even exchanges are not deductions because the gain of the thing purchased already fairly compensates you for the cost. You don't specify the exact tax status of the business, but there are really only two types of possibilities. It can be separately taxed as a corporation or it can be treated essentially as if it didn't exist. In the former case, corporate income tax would be due on the revenue that was used to pay for the purchases. There would be no personal income tax due. But it's very unlikely this situation applies as it means all profits taken out of the business are taxed twice and so small businesses are rarely organized this way. In the latter case, which is almost certainly the one that applies, business income is treated as self-employment income. In this case, the income that paid for the purchases is taxable, self-employment income. Since a purchase is not a deductible expense, there is no deduction to offset this income. So, again, the key points are: How much she paid herself doesn't matter. Business income is taxable regardless of what you do with it. When a business pays an expense, it has a loss that is deductible against profits. But when a business makes a purchase, it has neither a gain nor a loss. If a restaurant buys a new stove, it trades some money for a stove, presumably a fair trade. It has had no profit and no loss, so this transaction has no immediate effect on the taxes. (There are some exceptions, but presumably the accountant determined that those don't apply.) When the property of a business loses value, that is usually a deductible loss. So over time, a newly-purchased stove will lose value. That is a loss that is deductible. The important thing to understand is that as far as the IRS is concerned, whether you pay yourself the money or not doesn't matter, business income is taxable and only business losses or expenses are deductible. Investments or purchases of capital assets are neither losses nor expenses. There are ways you can opt to have the business taxed separately so only what you pay yourself shows up on your personal taxes. But unless the business is losing money or needs to hold large profits against future expenses, this is generally a worse deal because money you take out of the business is taxed twice -- once as business income and again as personal income. Update: Does the business eventually, over the course of the depreciation schedule, end up getting all of the original $2,000 tax burden back? Possibly. Ultimately, the entire cost of the item is deductible. That won't necessarily translate into getting the taxes back. But that's really not the right way to think about it. The tax burden was on the income earned. Upon immediate replacement, hypothetically with the exact same model, same cost, same 'value', isn't it correct that the \"\"value\"\" of the business only went up by the amount the original item had depreciated? Yes. If you dispose of or sell a capital asset, you will have a gain or loss based on the difference between your remaining basis in the asset and whatever you got for the asset. Wouldn't the tax burden then only be $400? Approximately, yes. The disposal of the original asset would cause a loss of the difference between your remaining basis in the asset and what you got for it (which might be zero). The new asset would then begin depreciating. You are making things a bit more difficult to understand though by focusing on the amount of taxes due rather than the amount of taxable gain or loss you have. They don't always correlate directly (because tax rates can vary).\"",
"title": ""
},
{
"docid": "3a7145ec3e498ec494ec69fc53741a7b",
"text": "According to page 107 of the instructions for schedule A for form 1040 : Include taxes (state, local, or foreign) paid on real estate you own that was not used for business. ... If you want to make a business out of her property and be her agent in the management, you might be able to work with an accountant on this, but it won't be a valid personal deduction.",
"title": ""
},
{
"docid": "621d30c4812c6b44ec2e8bab6810ce01",
"text": "This depends on the nature of the income. Please consult a professional CPA for specific advise.",
"title": ""
},
{
"docid": "7156a9fde48c1a3aec096bab435c99e9",
"text": "Yes, you can do what you are contemplating doing, and it works quite well. Just don't get the university's payroll office too riled by going in each June, July, August and September to adjust your payroll withholding! Do it at the end of the summer when perhaps most of your contract income for the year has already been received and you have a fairly good estimate for what your tax bill will be for the coming year. Don't forget to include Social Security and Medicare taxes (both employee's share as well as employer's share) on your contract income in estimating the tax due. The nice thing about paying estimated taxes via payroll deduction is that all that tax money can be counted as having been paid in four equal and timely quarterly payments of estimated tax, regardless of when the money was actually withheld from your university paycheck. You could (if you wanted to, and had a fat salary from the university, heh heh) have all the tax due on your contract income withheld from just your last paycheck of the year! But whether you increase the withholding in August or in December, do remember to change it back after the last paycheck of the year has been received so that next year's withholding starts out at a more mellow pace.",
"title": ""
},
{
"docid": "28ca8044728004376da120c7f572a56f",
"text": "\"It doesn't generally matter, and I'm not sure if it is in fact in use by the IRS other than for general statistics (like \"\"this year 20% of MFJ returns were with one spouse being a 'homemaker'\"\"). They may be able to try and match the occupation and the general levels and types of income, but for self-employed there's a more precise and reliable field on Schedule C and for employees they don't really need to do this since everything is reported on W2 anyway. So I don't think they even bother or give a lot of value to such a metric. So yes, I'm joining the non-authoritative \"\"doesn't matter\"\" crowd.\"",
"title": ""
},
{
"docid": "1c02d9edf84b46abfcdefc0a836a5505",
"text": "\"Property sold at profit is taxed at capital gains rate (if you held it for more than a year, which you have based on your previous question). Thus deferring salary won't change the taxable amount or the tax rate on the property. It may save you the 3% difference on the salary, but I don't know how significant can that be. The 25% depreciation recapture rate (or whatever the current percentage is) is preset by your depreciation and cannot be changed, so you'll have to pay that first. Whatever is left above it is capital gains and will be taxed at discounted rates (20% IIRC). You need to make sure that you deduct everything, and capitalize everything else (all the non-deductible expenses and losses with regards to the property). For example, if you remodeled - its added to your basis (reduces the gains). If you did significant improvements and changes - the same. If you installed new appliances and carpets - they're depreciated faster (you can appropriate part of the sale proceeds to these and thus reduce the actual property related gain). Also, you need to see what gain you have on the land - the land cannot be depreciated, so all the gain on it is capital gain. Your CPA will help you investigating these, and maybe other ways to reduce your tax bill. Do make sure to have proper documentation and proofs for all your claims, don't make things up and don't allow your CPA \"\"cut corners\"\". It may cost you dearly on audit.\"",
"title": ""
},
{
"docid": "ae579dcb50cc14bc3da84900f50b83ed",
"text": "I'm no tax expert by any means. I do know that a disreagarded entity is considered a sole proprietor for federal tax purposes. My understanding is that this means your personal tax year and your business tax year must be one and the same. Nevertheless, it is technically possible to have a non-calendar fiscal year as an individual. This is so rare that I'm unable to find a an IRS reference to this. The best reference I could find was this article written by two CPAs. If you really want to persue this, you basically need to talk with an accountant, since this is complicated, and required keeping propper accounting records for your personal life, in addition to your business. A ledger creqated after-the-fact by an accountant has been ruled insufficent. You really need to live by the fiscal year you choose.",
"title": ""
},
{
"docid": "1d7d8e8d7d26758e0fa9d7e3531f56cc",
"text": "In some circumstances losses from self-employment can be offset against total income and/or capital gains. If this applies to you may be able to claim back some of the tax taken by PAYE from your day job. You can also to some extent carry the loss backwards into previous tax years or forward into the next one if you can't use it fully this year. HMRC have some information available on the current rules: When you can claim losses You can claim: But You can’t claim:",
"title": ""
},
{
"docid": "b2c2a2438b925a7ca203cf52bfabeaf3",
"text": "You really shouldn't be using class tracking to keep business and personal operations separate. I'm pretty sure the IRS and courts frown upon this, and you're probably risking losing any limited liability you may have. And for keeping separate parts of the business separate, like say stores in a franchise, one approach would be subaccounts. Messy, I'm sure.",
"title": ""
},
{
"docid": "baafc7faa6bfbfcb4e5e51674043a1bd",
"text": "Assuming your country is the United States there is. See schedule C line 9 and the corresponding instructions. There are many rules associated with this, in some cases the entire purchase can be written off but typically if the truck is only used for business. Most people write off partial usage in the form of credits for mileage. You are best to consult with a CPA once your business earns a profit. Good luck.",
"title": ""
},
{
"docid": "c57ecc03290fad54da460d569830663f",
"text": "Yes, legitimate, documented, expenses are written off against that income.",
"title": ""
}
] |
fiqa
|
784a96863a1d18831ba15303ce2a712b
|
Trader Fostering Program on Futures Day Trading
|
[
{
"docid": "fe0f1c2a8bf6e4fd44a3cfb97431fc68",
"text": "I am a bit at a loss as to how you can read the same book, that inspired Warren Buffet, and take away that trading 600 contracts per month is a way to prosperity. As a fellow engineer I can say with assurance this speculation scheme is doomed to failure. Crossing out the word gamble was a mistake. Instead you should focus on two things. The first is your core business, which is signal processing. Work and strive to be the best you can. Seek out opportunities to increase your income while keeping your costs low. As an engineer you have an opportunity to earn an above average salary with very low costs. Second would be to warehouse some of those earning and let others who are good at other things work for you. You may want to read the Jack Bogle books and seek an asset allocation model. I tend to be more aggressive then he would suggest, but that is a matter of preference. You don't really have the time, when you focus on your core business, to manage 6 trades a month let alone 600. Put your contributions on auto pilot and a surprisingly short time you will have a pile of cash.",
"title": ""
},
{
"docid": "a15ac15ca148e17f5a75a459168f7c48",
"text": "a) Contracts are for future delivery of said underlying. So if you are trading CL (crude oil) futures and don't sell before delivery date, you will be contacted about where you want the oil to be delivered (a warehouse presumably). 1 contract is the equivalent of 1000 barrels. b) 600 contracts depends entirely on what you are trading and how you are trading. If you are trading ES (S&P 500 e-Mini), you can do the 600 contracts in less than a second. c) No fees does not make particular sense. It's entirely possible that you are not trading anything, it's just a fake platform so they can judge your performance. d) The catch typically is that when it's time to pay you, they will avoid you or worst case, disappear. e) Trading is a full-time job, especially for the first 4-5 years when you're only learning the basics. Remember, in futures trading you are trading against all the other professionals who do only this 24/7 for decades. If you are only risking your time with the reward being learning and possibly money, it seems like a good deal. There's typically a catch with these things - like you would have to pay for your data which is very expensive or withdrawing funds is possible only months later.",
"title": ""
}
] |
[
{
"docid": "5a338ebdb92ecbd338fe1fd5cc1f2582",
"text": "Generally not, however some brokers may allow it. My previous CFD Broker - CMC Markets, used to allow you to adjust the leverage from the maximum allowed for that stock (say 5%) to 100% of your own money before you place a trade. So obviously if you set it at 100% you pay no interest on holding open long positions overnight. If you can't find a broker that allows this (as I don't think there would be too many around), you can always trade within your account size. For example, if you have an account size of $20,000 then you only take out trades that have a face value up to the $20,000. When you become more experienced and confident you can increase this to 2 or 3 time your account size. Maybe, if you are just starting out, you should first open a virtual account to test your strategies out and get used to using leverage. You should put together a trading plan with position sizing and risk management before starting real trading, and you can test these in your virtual trading before putting real money on the table. Also, if you want to avoid leverage when first starting out, you could always start trading the underlying without any leverage, but you should still have a trading plan in place first.",
"title": ""
},
{
"docid": "a195aa123226790c73bc1995aee219f8",
"text": "\"Of course, which is why you need to have a scoring function / utility function for the \"\"filters\"\", i.e. Are you going to value it by rate of accuracy hor by a metric where wins = +2, losses = -1, such that it uses a criteria like that to decide whether or not a filter adds value, (some even use a compound effect i.e. wins = 2+e^(1+w) where w is the consecutive wins). A metric like the above would capture the trade off between predictive power and profit. Also some traders watch their Max DD very carefully so they may be very risk averse.\"",
"title": ""
},
{
"docid": "0479838bc285731ab73100727a2ccdb6",
"text": "Recommended? There's really no perfect answer. You need to know the motivations of the participants in the markets that you will be participating in. For instance, the stock market's purpose is to raise capital (make as much money as possible), whereas the commodities-futures market's purpose is to hedge against producing actual goods. The participants in both markets have different reactions to changes in price.",
"title": ""
},
{
"docid": "ada9d0a627c6197e572ac50d0b4cf55d",
"text": "Here's how this works in the United States. There's no law regarding your behavior in this matter and you haven't broken any laws. But your broker-dealer has a law that they must follow. It's documented here: The issue is if you buy stock before your sell has settled (before you've received cash) then you're creating money where before none existed (even though it is just for a day or two). The government fears that this excess will cause undue speculation in the security markets. The SEC calls this practice freeriding, because you're spending money you have not yet received. In summary: your broker is not allowed to loan money to an account than is not set-up for loans; it must be a margin account. People with margin account are able to day-trade because they have the ability to use margin (borrow money). Margin Accounts are subject to Pattern Daytrading Rules. The Rules are set forth by FINRA (The Financial Industry Reporting Authority) and are here:",
"title": ""
},
{
"docid": "41edaece3a849c76e79e57d348b0c2b5",
"text": "No, CFD is not viable as a long term trading strategy. You have a minimum margin to maintain, and you are given X days to top up your margin should you not meet the margin requirements. Failure to meet margin requirements will result in a forced sell where you are no longer able to hold onto the stock. A long term trading strategy is where you hold onto the stock through the bad times of the company and keep it long enough to see the good times. However, with CFD, you may be forced to sell before you see the good times. In addition, you incur additional lending charges (e.g. 4%-6%) for the ability to leverage.",
"title": ""
},
{
"docid": "2b5eaed08c1cfa0ee6679393252ffd58",
"text": "Both of these are futures contracts on the Ibovespa Brasil Sao Paulo Stock Exchange Index; the mini being exactly that, a mini version (or portion) of the regular futures contract. The mini counterpart makes trading the index more affordable to individual investors and hence increase liquidity.",
"title": ""
},
{
"docid": "b809e27c7650e4615cd9a31b7744ab4f",
"text": "From my 15 years of experience, no technical indicator actually ever works. Those teaching technical indicators are either mostly brokers or broker promoted so called technical analysts. And what you really lose in disciplined trading over longer period is the taxes and brokerages. That is why you will see that teachers involved in this field are mostly technical analysts because they can never make money in real markets and believe that they did not adhere to rules or it was an exception case and they are not ready to accept facts. The graph given above for coin flip is really very interesting and proves that every trade you enter has 50% probability of win and lose. Now when you remove the brokerage and taxes from win side of your game, you will always lose. That is why the Warren Buffets of the world are never technical analysts. In fact, they buy when all technical analysts fails. Holding a stock may give pain over longer period but still that is only way to really earn. Diversification is a good friend of all bulls. Another friend of bull is the fact that you can lose 100% but gain any much as 1000%. So if one can work in his limits and keep investing, he can surely make money. So, if you have to invest 100 grand in 10 stocks, but 10 grand in each and then one of the stocks will multiply 10 times in long term to take out cost and others will give profit too... 1-2 stocks will fail totally, 2-3 will remain there where they were, 2-3 will double and 2-3 will multiply 3-4 times. Investor can get approx 15% CAGR earning from stock markets... Cheers !!!",
"title": ""
},
{
"docid": "3539d10c4d9b8ee4cb6d011696498707",
"text": "If you have your long positions established and are investing responsibly (assuming you know the risks and can accept them), the next step IMO is typically learning hedging - using options or option strategies to solidify positions. Collars (zero cost) and put options are a good place to start your education and they can be put to use to both speculate (what you are effectively doing with short-position trading) or long-term oriented edging. Day trading equites can be lucrative but it is a difficult game to play - learning options (while more complex on speculation) can provide opportunities to solidify positions. Options trading is difficult grounds. I just think the payoff long term to knowing options is much greater than day-trading tactics (because of versatility)",
"title": ""
},
{
"docid": "2d1f1268fe00eb1e8f19c139ad9d8d02",
"text": "There's a whole industry devoted to this. Professionals use Bloomberg terminals. High Frequency Traders have computers read news feeds for them. Amateurs use trading consoles (like Thinkorswim) to get headlines quickly on stocks.",
"title": ""
},
{
"docid": "0e56536646a6bb78b874992c3447e0b7",
"text": "Thanks for your reply. I’m not familiar with the term “Held-For-Trading Security”. My securities are generally held as collateral against my shorts. To clarify, I am just trying to track the “money in” and “money out” entries in my account for the shorts I write. The transaction is relatively straight forward, except there is a ton of information attached! In simple terms, for the ticker CSR and short contract CSRUQ8, the relevant entries look something like this: There are no entries for expiries. I need to ensure that funds are available for future margin calls and assignments. The sale side using covered calls is as involved.",
"title": ""
},
{
"docid": "df7fcd1a81102f1a96ffe8c8bfdb0914",
"text": "\"Ignoring the complexities of a standardised and regulated market, a futures contract is simply a contract that requires party A to buy a given amount of a commodity from party B at a specified price. The future can be over something tangible like pork bellies or oil, in which case there is a physical transfer of \"\"stuff\"\" or it can be over something intangible like shares. The purpose of the contract is to allow the seller to \"\"lock-in\"\" a price so that they are not subject to price fluctuations between the date the contract is entered and the date it is complete; this risk is transferred to the seller who will therefore generally pay a discounted rate from the spot price on the original day. In many cases, the buyer actually wants the \"\"stuff\"\"; futures contracts between farmers and manufacturers being one example. The farmer who is growing, say, wool will enter a contract to supply 3000kg at $10 per kg (of a given quality etc. there are generally price adjustments detailed for varying quality) with a textile manufacturer to be delivered in 6 months. The spot price today may be $11 - the farmer gives up $1 now to shift the risk of price fluctuations to the manufacturer. When the strike date rolls around the farmer delivers the 3000kg and takes the money - if he has failed to grow at least 3000kg then he must buy it from someone or trigger whatever the penalty clauses in the contract are. For futures over shares and other securities the principle is exactly the same. Say the contract is for 1000 shares of XYZ stock. Party A agrees to sell these for $10 each on a given day to party B. When that day rolls around party A transfers the shares and gets the money. Party A may have owned the shares all along, may have bought them before the settlement day or, if push comes to shove, must buy them on the day of settlement. Notwithstanding when they bought them, if they paid less than $10 they make a profit if they pay more they make a loss. Generally speaking, you can't settle a futures contract with another futures contract - you have to deliver up what you promised - be it wool or shares.\"",
"title": ""
},
{
"docid": "d543352da5684e0abf86a67db2d0da2c",
"text": "I'm not sure if they're less risky. Maybe I'm being naive, but I feel they're less manipulated. I wouldn't say I have any hard resources other than dicking around on cmegroup,com. I pay a ton for my daily newsletters so I can't just start forwarding those. I tend to stay away from strategy books, but Mark Fisher's The Logical Trader is decent. Futures I feel are more of an experience than strategy trade. Especially the spreads. This is where systems come to die.",
"title": ""
},
{
"docid": "9351d22e6c503efd0342ed11b4695e78",
"text": "I just called options express, and apparently you need a margin account for futures and options, but you don't NEED margin to trade futures. I will have to debate the merits, but I think I may try playing with it once I build up my regular stock account.",
"title": ""
},
{
"docid": "66dbe5aa78abf16b575a49b7483f9b3b",
"text": "Yes it is viable but uncommon. As with everything to do with investment, you have to know what you are doing and must have a plan. I have been successful with long term trading of CFDs for about 4 years now. It is true that the cost of financing to hold positions long term cuts into profits but so do the spreads when you trade frequently. What I have found works well for me is maintaining a portfolio that is low volatility, (e.g. picking a mix of positions that are negatively correlated) has a good sharpe ratio, sound fundamentals (i.e. co-integrated assets - or at least fairly stable correlations) then leveraging a modest amount.",
"title": ""
},
{
"docid": "31aee2d34d62c45dbe1bd0439bd542b1",
"text": "\"A couple options that I know of: Interactive Brokers offers a \"\"paper trading\"\" mode to its account holders that allows you to start with a pretend stack of money and place simulated trades to test trading ideas. They also provide an API that allows you to interface with their platform programmatically for retrieving quotes, placing orders, and the such. As you noted, however, it's not free; you must hold a funded brokerage account in order to qualify for access to their platform. In order to maintain an account, there are minimums for required equity and monthly activity (measured in dollars that you spend on commissions), so you won't get access to their platform without having a decent amount of skin in the game. IB's native API is Java-based; IbPy is an unofficial wrapper that makes the interface available in Python. I've not used IB at all myself, but I've heard good things about their API and its accessibility via IbPy. Edit: IB now supports Python natively via their published API, so using IbPy is no longer needed, unless you wish to use Python 2.x. The officially supported API is based on Python 3. TD Ameritrade also offers an API that is usable by its brokerage clients. They do not offer any such \"\"paper trading\"\" mode, so you would need to \"\"execute\"\" transactions based on quotes at the corresponding trade times and then keep track of your simulated account history yourself. The API supports quote retrieval, price history, and trade execution, among other functions. TDA might be more attractive than IB if you're looking for a low-cost link into market data, as I believe their minimum-equity levels are lower. To get access, you'll need to sign up for an API developer account, which I believe requires an NDA. I don't believe there is an official Python implementation of the API, but if you're a capable Python writer, you shouldn't have trouble hooking up to the published interfaces. Some caveats: as when doing any strategy backtesting, you'll want to be sure to be pessimistic when doing so, so your optimism doesn't make your trades look more successful than they would be in the real world. At a minimum, you'll want to ensure that your simulations transact at the posted bid/ask prices, not necessarily the last trade's price, as well as any commissions and fees associated with the trade. A more robust scheme would also take into account the depth of the order book (also known as level 2 quotes), which can cause additional slippage in the prices at which you buy/sell your security. An even more robust scheme would take into account the potential latency of trade execution, looking at all prices over some time period that covers the maximum expected latency and simulating the trade at the worst-possible price.\"",
"title": ""
}
] |
fiqa
|
54733869116942908b96c74d94f92bd0
|
Is paying off your mortage a #1 personal finance priority?
|
[
{
"docid": "daaa9172d6c79bd2a0d16be64af3223c",
"text": "\"Paying off your house quickly should be a #2-level priority, behind making sure you have some basic savings but definitely ahead of any investing concerns, because your house is not an investment; it's your home. (If you're brave/foolish enough to try buying houses-as-investments in the current climate, this obviously doesn't apply to you!) This isn't a financial matter so much as an issue of basic prudence. If something disastrous happens, (you lose your job, get in a serious car accident, your kid comes down with cancer, etc,) it will put tremendous strain on your financial resources. If you own your home outright when this happens, it means that no matter what else might go wrong, you can't get foreclosed on and end up out on the streets, and that's worth more than any rate of return you can reasonably expect to find even in the best of times. It's a well-known investing maxim to \"\"never bet anything that you can't afford to lose.\"\" In light of that, consider this: if you have a mortgage that is not paid off, that's exactly what you're doing. You are placing a bet against a bank that you'll remain solvent long enough to pay off the mortgage, and your home is the wager. Mortgages may be a necessary evil with housing prices being what they are, but make no mistake, they are evil. Get rid of yours as quickly as you can.\"",
"title": ""
},
{
"docid": "abeead7391f1ad7e527550a2bca32fd5",
"text": "\"For some people, it should be a top priority. For others, there are higher priorities. What it should be for you depends on a number of things, including your overall financial situation (both your current finances and how stable you expect them to be over time), your level of financial \"\"education\"\", the costs of your mortgage, the alternative investments available to you, your investing goals, and your tolerance for risk. Your #1 priority should be to ensure that your basic needs (including making the required monthly payment on your mortgage) are met, both now and in the near future, which includes paying off high-interest (i.e. credit card) debt and building up an emergency fund in a savings or money-market account or some other low-risk and liquid account. If you haven't done those things, do not pass Go, do not collect $200, and do not consider making advance payments on your mortgage. Mason Wheeler's statements that the bank can't take your house if you've paid it off are correct, but it's going to be a long time till you get there and they can take it if you're partway to paying it off early and then something bad happens to you and you start missing payments. (If you're not underwater, you should be able to get some of your money back by selling - possibly at a loss - before it gets to the point of foreclosure, but you'll still have to move, which can be costly and unappealing.) So make sure you've got what you need to handle your basic needs even if you hit a rough patch, and make sure you're not financing the paying off of your house by taking a loan from Visa at 27% annually. Once you've gotten through all of those more-important things, you finally get to decide what else to invest your extra money in. Different investments will provide different rewards, both financial and emotional (and Mason Wheeler has clearly demonstrated that he gets a strong emotional payoff from not having a mortgage, which may or may not be how you feel about it). On the financial side of any potential investment, you'll want to consider things like the expected rate of return, the risk it carries (both on its own and whether it balances out or unbalances the overall risk profile of all your investments in total), its expected costs (including its - and your - tax rate and any preferred tax treatment), and any other potential factors (such as an employer match on 401(k) contributions, which are basically free money to you). Then you weigh the pros and cons (financial and emotional) of each option against your imperfect forecast of what the future holds, take your best guess, and then keep adjusting as you go through life and things change. But I want to come back to one of the factors I mentioned in the first paragraph. Which options you should even be considering is in part influenced by the degree to which you understand your finances and the wide variety of options available to you as well as all the subtleties of how different things can make them more or less advantageous than one another. The fact that you're posting this question here indicates that you're still early in the process of learning those things, and although it's great that you're educating yourself on them (and keep doing it!), it means that you're probably not ready to worry about some of the things other posters have talked about, such as Cost of Capital and ROI. So keep reading blog posts and articles online (there's no shortage of them), and keep developing your understanding of the options available to you and their pros and cons, and wait to tackle the full suite of investment options till you fully understand them. However, there's still the question of what to do between now and then. Paying the mortgage down isn't an unreasonable thing for you to do for now, since it's a guaranteed rate of return that also provides some degree of emotional payoff. But I'd say the higher priority should be getting money into a tax-advantaged retirement account (a 401(k)/403(b)/IRA), because the tax-advantaged growth of those accounts makes their long-term return far greater than whatever you're paying on your mortgage, and they provide more benefit (tax-advantaged growth) the earlier you invest in them, so doing that now instead of paying off the house quicker is probably going to be better for you financially, even if it doesn't provide the emotional payoff. If your employer will match your contributions into that account, then it's a no-brainer, but it's probably still a better idea than the mortgage unless the emotional payoff is very very important to you or unless you're nearing retirement age (so the tax-free growth period is small). If you're not sure what to invest in, just choose something that's broad-market and low-cost (total-market index funds are a great choice), and you can diversify into other things as you gain more savvy as an investor; what matters more is that you start investing in something now, not exactly what it is. Disclaimer: I'm not a personal advisor, and this does not constitute investing advice. Understand your choices and make your own decisions.\"",
"title": ""
},
{
"docid": "0d876f197307f19a332997d142724829",
"text": "You say A #1 priority, that implies multiple #1 priorities. Long term or medium term my goal is to pay off the mortgage. But short term paying off the mortgage isn't a concern. Some people are comfortable with a mortgage during retirement, others aren't. When I was younger the mortgage concern was not being overextended. I didn't want to be in a situation that dictated my financial decisions because I needed to make a big house payment. Being overextended is no longer a concern for me. Now I am looking in more detail about how my retirement will actually play out. How to handle my actual retirement income sources. For me, not having a mortgage simplifies my planning.",
"title": ""
},
{
"docid": "782a6146189c0db186d9fb64386df1a6",
"text": "Paying off your mortgage early being good is a myth. It is great for the chronic overspenders to have their mortgage paid off so when they rack up credit card bills and get behind, well they still hae a place to stay. But for those who are more logical with their money paying off your mortgage early in current conditions makes no sense. You can get a 30 year loan well below 4%. Discounting taxes for your average family you would have a rate floating below 3%. So reasons that paying off your mortgage should be almost LAST (given current low long-term interest rates): The first thing you should do is take care of any high interest debt. I would say that anything more than 7-8%, including all credit card debt should be focus #1. putting money into your retirement savings is #1. You will earn way more than 3% over the long-run. you can earn a higher return in the market. Even with a very conservative portfolio you can clear 5-6%, which will still clear more than 3% after taxes. for those who say you can't be sure about the market... well if the market did bad for 30 years in a row no one will have money and the house will also be worthless. if a disaster happens to your house and you own it, your money is gone. In many cases you would be able to declare bankruptcy and let the bank take the property as is. there are just too many examples but if you are paying off your house early, you lose the flexible/liquid money that you now have tied up in the house. Now the reasons for paying down your mortgage are really easy too: you don't trust your spending habits you want to move up in houses and you want to make sure that you have at least 20% down on future house to skip PMI.",
"title": ""
},
{
"docid": "26d879664d1c3fc08cc80eff4a053d3b",
"text": "If you can make enough ROI from the capital you retain by not paying off your mortgage, then why not? I do, I could pay off a significant chunk of mortgage if I wanted but whilst interest rates are low there's little incentive. As for another crash... Well, there's no reason to expect a crash would result in high interest rates, more the opposite, but you should consider what you would or could do if interest rates did jump to 15% for whatever reason. As long as your investments aren't too risky or difficult to liquidate, etc, you could always consider paying off a big chunk then, when it makes sense.",
"title": ""
},
{
"docid": "42da4b05ea23c29486c6dcf00ec57ed6",
"text": "\"Math says invest in the Market (But paying off your mortgage early is a valid option if you are very risk averse.) You are going to get a better return by investing in the stock market. In the US in 2015/2016, mortgages are 3%-4%, and give you a tax break. The rate of return on the stock market is ~10%, (closer to 6% after you subtract out inflation, taxes, fees, etc.) Since 10 > 3, (or 6% > 4%, to use the pessimistic numbers) investing in the market is the better deal. But... The market has risk, and your mortgage does not. If you are very risk averse paying off the mortgage may make sense. As an example: Family A has a single \"\"breadwinner\"\", who works a low skilled job. Family B has 2 working spouses, both in high skill white collar positions. These two families are going to have wildly different risk tolerances. It may make sense for family A to \"\"invest\"\" its extra money in paying off the mortgage, after they have tackled high interest debt, built an emergency fund, maxed the 401k, etc. Personally I would not: in the US you cannot recoup pre-payments if you lose your job. If I was very risk averse, I would keep my extra money as cash, so I could pay my mortgage after I lost my job. It is never going to make sense for family B to pay the mortgage early. At that point, any decision to pre-pay is going to be based on emotion and not logic.\"",
"title": ""
},
{
"docid": "f2b857dc7e119160aeab8bb78001daa0",
"text": "Generally, paying down your mortgage is a bad idea. Mortgages have very low interest rates and the interest is tax deductable. If you have a high interest mortgage, or PMI, you might consider it, but otherwise, your money is better off in some sort of index fund. On the other hand, if your choices are paying down a mortgage or blowing your money on hookers and booze, by all means do the mortgage. Typical priorities are: Dave Ramsey has a more detailed plan.",
"title": ""
},
{
"docid": "b0ae376761c4cf328781fca14cbcf687",
"text": "The answer depends entirely on your mortgage terms - is the interest rate low, how many years left? Questions like this are about Cost of Capital. If your mortgage has a low interest for a lot of years, you have a low cost of capital. By paying it off early, you are dumping that low cost of capital. Use the extra money to start a business, invest in something or even buy another property (rental). Whenever you have a low cost of capital, don't rush to get rid of it. Of course, if there are no other investment/business opportunities available and the extra money is going into a low return savings account, you might as well pay down your debt. Or if you lack the self discipline to use the extra money properly - buying flat screens and meals out - then yeah just pay down your debt. But if you're disciplined with the extra money, use it to get access to more capital and make that new capital work for you.",
"title": ""
},
{
"docid": "fd636d70ab339bda3c01c5931374817f",
"text": "Highest priority compared to what? Obviously priorities should be repaying debt in the order of interest percentage. Which means among your debts, the mortgage likely comes last. Trying to get a better mortgage deal however has a huge priority. And if you have a choice between wasting money and paying off the mortgage, the mortgage should have higher priority.",
"title": ""
},
{
"docid": "bf1771fdc7d94d39168a44bfe92006e8",
"text": "It is one thing to take the advice of some numb-skulls on a web site, it is another thing to take the advice of someone who is really wealthy. For myself, I enjoy a very low interest rate (less than 3%) and am aggressively paying down my mortgage. One night I was contemplating slowing that down, and even the possibility of borrowing more to purchase another rental property. I went to bed and picked up Kevin O'Leary's book(Cold Hard Truth On Men, Women, and Money: 50 Common Money Mistakes and How to Fix Them), which I happened to be reading at the time. The first line I read, went something like: The best investment anyone can make is to pay off their mortgage early. He then did some math with the assumption that the person was making a 3% mortgage payment. Any conflicting advice has to be weighted against what Mr. O'Leary has accomplished in his life. Mark Cuban also has a similar view on debt. From what I heard, 70% of the Forbes richest list would claim that getting out of debt is a critical step to wealth building. My plan is to do that, pay off my home in about 33 (September '16) more weeks and see where I can go from there.",
"title": ""
}
] |
[
{
"docid": "d9829f67dd8b32ae0f8d1936e2b28bc9",
"text": "When you're debt free everything you own feels different. The lack of financial stress in your life goes away. BUT! before you do go gung-ho on paying down debt think through these steps (and no I did not come up with them. Dave Ramsey did and others). Truncated from - http://www.daveramsey.com/new/baby-steps/ I have 1 credit card. Only use it for business/travel but pay it off every month (yay for auto-draft). Everthing else is cash/debit and we live by a budget. If it's not in the budget we don't buy it. Easy as pie. The hard part is disciplining yourself to wait. Our society is gear for BUY NOW! PAY LATER! and well you can see where that has taken our country and families. And celebrate the small victories. Pay off 1 debt then go have a nice dinner. Things like that help keep you motivated and pursuing the end goal.",
"title": ""
},
{
"docid": "9fecda5c09eae6f09dcb6d8253125323",
"text": "If you have the money and the determination to pay off all the cards in six months, then the order will make little difference to your credit score, and to your finances. If you had less money available (say you could pay off $500 a month in total), then it would be good for financial reasons to pay off the credit card with the highest interest rate first, so you pay less interest. It would be good for psychological reasons to pay the card with the smallest amount first (so you feel successful quickly, and some people need that feeling of success to continue paying off, just psychological). And if these things contradict each other, figure out what is more important. And whatever you do, paying back your debt is better than not paying it back. So if you can't make up your mind, then you pay #1, then #2, then #3, then #4, then #5.",
"title": ""
},
{
"docid": "25fc3e20df1b7c116a2912db82641b70",
"text": "\"If by \"\"investment\"\" you mean something that pays you money that you can spend, then no. But if you view \"\"investment\"\" as something that improves your balance sheet / net worth by reducing debt and reducing how much money you're throwing away in interest each month, then the answer is definitely yes, paying down debt is a good investment to improve your overall financial condition. However, your home mortgage might not be the first place to start looking for pay-downs to save money. Credit cards typically have much higher interest rates than mortgages, so you would save more money by working on eliminating your credit card debt first. I believe Suze Orman said something like: If you found an investment that paid you 25% interest, would you take it? Of course you would! Paying down high interest debt reduces the amount of interest you have to pay next month. Your same amount of income will be able to go farther, do more because you'll be paying less in interest. Pay off your credit card debt first (and keep it off), then pay down your mortgage. A few hundred dollars in extra principal paid in the first few years of a 30 year mortgage can remove years of interest payments from the mortgage term. Whether you plan to keep your home for decades or you plan to move in 10 years, having less debt puts you in a stronger financial position.\"",
"title": ""
},
{
"docid": "8197bf68229ced6468191268846a2305",
"text": "\"I'm in my 40's, and fully paid off the mortgage early. My ex would have preferred that I'd given it to her as spending money instead. It can be said that since interest rates after year 2000 went down not up, I am a mug to have paid off early when perhaps I could have just bought more stuff like everyone else does. I looked at the 1970 to 1990 average interest rate; about 10%, and thought that it would be imprudent to have a big debt which would be crippling at 10 or 15% interest rates, so I paid it off while I could. A factor to consider is how you expect your own income to change over the next decade. If you work in shops, call centres, taxi driving, import warehousing, language translation, news writing, or anything which can be offshored or automated, then either the expectation of your salary diminishes towards the worldwide typical, or if it goes below £7.50 per hour typical then your employer goes bust. Or blags a subsidy. That is, I am a pessimist and would pay off early while possible. I don't know chinese for \"\"he's not here\"\" to say to the debt collector.\"",
"title": ""
},
{
"docid": "318b176230b8586dd9fc2cab38336566",
"text": "tl;dr: when everything is going great, it's not really a problem. It's when things change that it's a problem. Finally, home loans are extended over extremely long periods (i.e. 15 or 30 years), making any fluctuations in their value short-lived - even less reason to be obsessed over their current value relative to the loan. Your post is based on the assumption that you never move. In that case, you are correct - being underwater on a mortgage is not a problem. The market value of your house matters little, except if you sell it or it gets reassessed. The primary problem arises if you want to sell. There are a variety of reasons you might be required to move: In all of these scenarios it is a major problem if you cannot sell. Your options generally are: In the first option, you will destroy your credit. This may or may not be a problem. The second is a major inconvenience. The third is ideal, but often people in this situation have money related problems. Student loans can deferred if needed. Mortgages cannot. A car is more likely to be a lower payment as well as a lower amount underwater. Generally, the problem comes when people buy a mortgage assuming certain things - whether that's appreciation, income stability/growth, etc. When these change they run into these problems and that is exactly a moment where being underwater is a problem.",
"title": ""
},
{
"docid": "5453d602d41cf5efc7a0c07478ae4cee",
"text": "\"It is true that all else being equal, you will pay a lower amount of total interest by paying down your highest interest rate debts first. However, all else is not always equal. I'm going to try to come up with some reasons why it might be better in some circumstances to pay your debts in a different order. And I'll try to use as much math as possible. :) Let's say that your goal is to eliminate all of your debt as fast as possible. The faster you do this, the lower the total interest that you will pay. Now, let's consider the different methods that you could take to get there: You could pay the highest interest first, you could pay the lowest interest first, or you could pay something in the middle first. No matter which path you choose, the quicker you pay everything off, the lower total interest you will pay. In addition to that, the quicker you pay everything off, the difference in total interest paid between the most optimal method and the least optimal method will be less. To put this in mathematical notation: limt→0 Δ Interest(t) = 0 Given that, anything we can do to speed up the time it takes to get to \"\"debt free\"\" is to our advantage. When paying large amounts of debt as fast as possible, sacrifice is needed. And this means that psychology comes into play. I don't know about you, but for me, gamifying the system makes everything easier. (After all, gamification is what gets us to write answers here on SE.) One way to do this is to eliminate individual debts as quickly as possible. For example, let's say that I've got 10 debts. 5 of them are for $1k each. 3 of them are for $5k each, 1 is a $20k car loan, and 1 is a $100k mortgage. Each one has a monthly payment. Let's say that I've got $3k sitting in the bank that I want to use to kickstart my debt reduction. I could pay all $3k toward one of my larger loans, or I could immediately pay off 3 of my 10 loans. Ignore interest for the moment, and let's say that we are going to pay off the smallest loans first. When I eliminate these three loans, three of my monthly payments are also gone. Now let's say that with the money I was paying toward these eliminated debts, and some other money I was able to scrape together $500 a month that I want to use toward debt reduction. In four months, I've eliminated the last two $1k debts, and I'm down to 5 debts instead of 10. Achievement Unlocked! Instead of this strategy, I could have paid toward my largest interest rate. Let's say that was one of the $5k loans. I paid the $3k toward the bank to it, and because I still had all the monthly payments after that, I was only able to scrape together $400 a month extra toward debt reduction. In four months, I still have 10 debts. Now let's say that after these four months, I have a bad month, and some unexpected expenses come up. If I've eliminated 5 of my debts, my monthly payments are less, and I'll have an easier month then I would have had if I still had 10 monthly payments to deal with. Each time I eliminate a debt, the amount extra I have each month to tackle the remaining debts gets bigger. And if your goal is eliminating debt quickly, these early wins can really help motivate you on. It really feels like you are getting somewhere when your monthly bills go down. It also helps you with the debt free mindset. You start to see a future where you aren't sending payments to the banks each month. This method of paying your smaller debts first has been popularized in recent years by Dave Ramsey, and he calls it the debt snowball method. There might be other reasons why you would pick one debt over another to pay first. For example, let's say that one of your loans is with a bank that has terrible customer service. They don't send you bills on time, they process your payment late, their website stinks, they are a constant source of stress, and you are getting sick of them. That would be a great reason to pay that debt first, and never set foot in that bank again. In conclusion: If you have a constant amount of extra cash each month that you are going to use to reduce your debt, and this will never change, then, yes, you will save money over the long run by paying the highest interest debt first. However, if you are trying to eliminate your debt as fast as possible, and you are sacrificing in your budget, sending every extra penny you can scrape together toward debt reduction, the \"\"snowball\"\" method of knocking out the small debts first can help motivate you to continue to sacrifice toward your goal, and can also ease the cash flow situation in difficult months when you find yourself with less extra to send in.\"",
"title": ""
},
{
"docid": "11aad3f1d262f1dfeb3eb0ce32de0665",
"text": "I think everyone else answered before you added the info about your car loan in your comment. While it makes sense to pay off loans with the highest interest rate first, keep in mind that in most cases you can deduct mortgage interest from your taxable income. So the after-tax rate of interest that you're paying on your 8.6% second mortgage will be less than your 7% car loan, assuming that your tax bracket is more than 18% (federal and state combined). If you plan to use your funds to pay down debt, definitely attack the car loan first.",
"title": ""
},
{
"docid": "91298b02ff1d1cb542057e55f27c6248",
"text": "\"Your goals are excellent. I really admire your thoughts and plans, and I hold you in high esteem. Good credit is indeed an important thing to have, and starting young is THE smart idea with respect to this. I see that you have as a goal the purchase of a home. Indeed, another fine ambition. (Wow, you are a different breed from what I normally encounter on the internet; that's for sure !) Since this won't happen overnight, I would encourage you to think about another option. At this point in your life you have what few people have: options, and you have lots of them. The option I would like to suggest you consider is the debt free life. This does NOT mean life without a credit card, nor does it mean living with ones parents all their days. In its simplest form, it means that you don't owe anybody anything today. An adapted form of that; with the reality of leases and so on, is that you have more immediate cash in the bank than you have contractual responsibilities to pay others. e.g., if the rent on a place is X, and the lease is 12 months, then you don't sign until you have 12X in the bank. That's the idea. If there is anything good that these past 10 years of recession and financial disasters have provided us as a nation, it is a clear picture presented to our young people that a house is not a guaranteed way to riches. Indeed, I just learned this week of another couple, forced out by foreclosure again. Yes, in the 1970s and 1980s the formula which anyone could follow was to take a mortgage on a single family house; just about any house in any community; and ten years later double your money, while (during those ten years) paying about the same (and in a few years, actually less) amount of money as you would for an apartment with about half the space. Those days were then, not now, and I seriously doubt that I will ever see them again in my lifetime. You might, at your age, one day. In the mean time, I would like to suggest that you think about that word options again; something that you have that I don't. If your mind is made up for certain that a house is the one and only thing you want, okay; this does not apply. During this time of building your credit (we're talking more than a year) I would like to encourage you to look at some of the other options that are out there waiting for you; such as... I also encourage you to take a calculator and a spreadsheet (I would be surprised if there is no freeware out there to do this with a few clicks) and compare the past 30 years of various investments. For example... It is especially educational if you can see line charts, with the ups and downs along the way. One last thing; about the stock market, you have an option (I love that word when people your age are actually thinking) called \"\"dollar cost averaging\"\". If you are not aware of this concept, just ask and I will edit this post (although I'm confident it has been explained by others far better than myself on this very site). Hit just about any solid stock market investment (plain old mutual fund, even with a load, and it will still work) and I believe you'll see what I'm trying to get across. Still, yes, you need a roof, and a young person should clearly plan on leaving parents in a healthy and happy way; so again, if the house is the one and only goal, then go for it kid (uhm, \"\"kid\"\", if you're still under 18). All the best. Do remember that you will be fixing the pipes, not the maintenance guy.\"",
"title": ""
},
{
"docid": "c5e1289e278da7e065f8a75fc8f8c465",
"text": "One other consideration is that by paying off your mortgage early versus, for example, investing that capital in a mutual fund is that you are reducing your net liquidity to some degree. That is, if you find yourself needing an emergency infusion of cash it is easier to sell a stock/fund than to sell your house or get a equity loan. I suppose if you were planning to need a lot of cash to start a business or invest in real estate, then maybe it would make sense to keep your cash more liquid. However, in your situation I agree with Joe. Pay it off. It feels REALLY good to write that last check!",
"title": ""
},
{
"docid": "3aa6a4201058d4e0b109b5961a49f21a",
"text": "Yes, a mortgage is debt. It's unique in that you have a house which should be worth far more than the mortgage. After the mortgage crisis, many found their homes under water i.e. worth less than the mortgage. The word debt is a simple noun for money owed, it carries no judgement or negative connotation except when it's used to buy short lived items with money one doesn't have. Aside from my mortgage, I get a monthly credit card bill which I pay in full. That's debt too, only it carried no interest and rewards me with 2% cash back. Many people would avoid this as it's still debt.",
"title": ""
},
{
"docid": "26d1fa0919c5d0cd9e23e44fd94ee05e",
"text": "yeah, i get that it's not optional. just sucks that nothing has changed substantially since i closed on the loan 11 months ago (same PMI, same HO, essentially the same property taxes) and now i have to pay more. seems like the closing docs could have taken into account timing of those payments so that i primed the pump with enough from the beginning.",
"title": ""
},
{
"docid": "23843f3fe03defa640bf9f3ad52d2794",
"text": "I recently paid off a line of credit on an investment property that I own. I had some surplus cash and decided to pay off the line of credit rather than to make a principal payment on the primary mortgage with a higher interest rate. The interest rate on the line of credit was tiny and the balance was also pretty low. My reasoning was that by paying off the line of credit I would be done with that account and would have one less bill to pay each month, one less risk of something going wrong and a late payment hurting my credit, one less statement to reconcile each month, and one less bookkeeping core to manage. I could have grown my net worth by few couple of dollars each month had I kept the line of credit and made a principal payment on the primary loan. I judged that it wasn't worth the hassle and risks.",
"title": ""
},
{
"docid": "e4ad5de991424ab48e01a72ac5cbd3ac",
"text": "\"I'll assume you live in the US for the start of my answer - Do you maximize your retirement savings at work, at least getting your employer's match in full, if they do this. Do you have any other debt that's at a higher rate? Is your emergency account funded to your satisfaction? If you lost your job and tenant on the same day, how long before you were in trouble? The \"\"pay early\"\" question seems to hit an emotional nerve with most people. While I start with the above and then segue to \"\"would you be happy with a long term 5% return?\"\" there's one major point not to miss - money paid to either mortgage isn't liquid. The idea of owing out no money at all is great, but paying anything less than \"\"paid in full\"\" leaves you still owing that monthly payment. You can send $400K against your $500K mortgage, and still owe $3K per month until paid. And if you lose your job, you may not so easily refinance the remaining $100K to a lower payment so easily. If your goal is to continue with real estate, you don't prepay, you save cash for the next deal. Don't know if that was your intent at some point. Disclosure - my situation - Maxing out retirement accounts was my priority, then saving for college. Over the years, I had multiple refinances, each of which was a no-cost deal. The first refi saved with a lower rate. The second, was in early 2000s when back interest was so low I took a chunk of cash, paid principal down and went to a 20yr from the original 30. The kid starts college, and we target retirement in 6 years. I am paying the mortgage (now 2 years into a 10yr) to be done the month before the kid flies out. If I were younger, I'd be at the start of a new 30 yr at the recent 4.5% bottom. I think that a cost of near 3% after tax, and inflation soon to near/exceed 3% makes borrowing free, and I can invest conservatively in stocks that will have a dividend yield above this. Jane and I discussed the plan, and agree to retire mortgage free.\"",
"title": ""
},
{
"docid": "c4d9894d7f966b3aa952a5e5fe5676c0",
"text": "\"The mortgage has a higher interest rate, how can it make sense to pay off the HELOC first?? As for the mutual fund, it comes down to what returns you are expecting. If the after-tax return is higher than the mortgage rate then invest, otherwise \"\"invest\"\" in paying down the mortgage. Note that paying down debt is usually the best investment you have.\"",
"title": ""
},
{
"docid": "89739766c7339ba2a9cc64de0444c12d",
"text": "I know you say you are aware of secured and unsecured debt and you've made your decision. Did you do the numbers? You will pay 44k over the life of the mortgage for that 24k (Based on 4.5% APR mortgage). Once you refinance your mortgage, do you plan on using credit for a while? Lots of Americans are hyperfocused on credit scores. The only times it affects your life are when you finance something, when you apply to rent a house or apartment, and sometimes when you apply for a job. Credit score should not be a factor in this decision. You're borrowing the money at a lower rate to pay off the high rate cards because you want to pay less in interest. Considering #1 is there any reason NOT to pay off the cards immediately, if not sooner?",
"title": ""
}
] |
fiqa
|
eee4b912e677f16de963453c4926ba99
|
why do I need an emergency fund if I already have investments?
|
[
{
"docid": "66a7fd9c6e89a27c21e0f26e9c8e3d06",
"text": "\"Emergency funds have a very specific and obvious benefit; you'll have money sitting around in case you need it. A lot of people think a big car repair or some unexpected home repair is an emergency, and that's fine. Emergency also expands up to \"\"I lost my job four months ago and we're a year in to a recession, the stock market is down 30% and I need to pay my rent or mortgage.\"\" Sure, you could just sell some of your stocks that have lost 30% and pay your rent. I know nobody likes to think about it, but the stock market can go down. I know nobody likes to think about it, but the economy can slink in to a recession. In fact, here's a small list of recent U.S. recessions: No competent investment adviser would advise that your emergency funds should be subject to market volatility because that completely defeats the purpose of an emergency fund. It's possible that this manager wants you to indicate a separate emergency fund to allocate a portion of your account to a low volatility US Treasury fund or something of the like, this would be materially different than investing in a broad market/large cap fund like VOO or VTI. The effects of inflation are not so bad that you should put your emergency money in the market. Who cares what inflation was if you have to sell an asset at a loss to pay rent? One last point. Index fund ETFs are not \"\"safe.\"\" Investing in diversified funds is safER than buying individual company stocks.\"",
"title": ""
},
{
"docid": "e42eb3ea9a05e96191e2a1ab5b50adcb",
"text": "My take on this is that this reduces your liquidity risk. Stocks, bonds and many other investment vehicles on secondary markets you may think of are highly liquid but they still require that markets are open and then an additional 3-5 business days to settle the transaction and for funds to make their way to your bank account. If you require funds immediately because of an emergency, this 3-5 business days (which gets longer as week-ends and holidays are in the way) can cause a lot of discomfort which may be worth a small loss in potential ROI. Think of your car breaking down or a water pipe exploding in your home and having to wait for the stock sale to process before you can make the payment. Admittedly, you have other options such as margin loans and credit cards that can help absorb the shock in such cases but they may not be sufficient or cause you to pay interest or fees if left unpaid.",
"title": ""
},
{
"docid": "61c009824d600a359938973082715984",
"text": "\"There are a few major risks to doing something like that. First, you should never invest money you can't afford to lose. An emergency fund is money you can't afford to lose - by definition, you may need to have quick access to that money. If you determine that you need, for example, $3000 in emergency savings, that means that you need to have at least $3000 at all times - if you lose $500, then you now only have $2500 in emergency savings. Imagine what could've happened if you had invested your emergency savings during the 2008 crash, for example; you could easily have been in a position where you lost both your job and a good portion of your emergency savings at the same time, which is a terrible position to be in. If the car breaks down, you can't really say \"\"now's a bad time, wait until the stock market bounces back.\"\" Second, with brokerage accounts, there may be a delay before you can actually access the money or transfer it to an account that you can actually withdraw cash from or write checks against (but some of this depends on the exact arrangement you have with your bank). This can be a problem if you're in a situation where you need immediate access to the money - if your furnace breaks in the middle of winter, you probably don't want to wait a few days for the sale and transfer to go through before you can have it fixed. Third, you can be forced to sell the investments at an unfavorable price because you're not sure when you're going to need it. You'd also likely incur trading fees and/or early withdrawal penalties when you tried to withdraw the money. Think about it this way: if you buy a bond that matures in 5 years, you're effectively betting that you won't have an emergency for the next 5 years. If you do, you'll have to either sell the bond or, if you're allowed to get the money back early, you'll likely forfeit a good amount of the interest you earned in the process (which kind of kills the point of buying the bond in the first place). Edit: As @Barmar pointed out in the comments, you may also have to pay taxes on the profits if you sell at a favorable price. In the U.S. at least, capital gains on stuff held for less than a year is taxed at your ordinary income tax rate and stuff held longer than a year is taxed at the long-term capital gains tax rate. So, if you hold the investment for less than a year, you're opening yourself up to the risks of short-term stock fluctuations as well as potential tax penalties, so if you put your emergency fund in stocks you're essentially betting that you won't have an emergency that year (which by definition you can't know). The purpose of an emergency fund is just that - to be an emergency fund. Its purpose isn't really to make money.\"",
"title": ""
},
{
"docid": "3bf43f2321a84a27029a6e197426ed56",
"text": "You're absolutely correct. If you have maxed out your retirement investment vehicles and have some additional investments in a regular taxable account, you can certainly use that as an emergency source of funds without much downside. (You can borrow from many retirement account but there are downsides.) Sure, you risk selling at a loss when/if you need the money, but I'd rather take the risk and take advantage of the investment growth that I would miss if I kept my emergency fund in cash or money market. And you can choose how much risk you're willing to take on when you invest the money.",
"title": ""
},
{
"docid": "f694ed0f5dd14110332cd21255788977",
"text": "From a budgeting perspective, the emergency fund is a category in which you've budgeted funds for the unexpected. These are things that weren't able to be predicted and budgeted for in advance, or things that exceeded the expected costs. For example you might budget $150 per month for car maintenance, and typically spend some of it while the rest builds up over time for unexpected repairs, so you have a few hundred available for that. But this month your transmission died and you have a $3,000 bill. You'll then fund most of this out of your emergency fund. This doesn't cover where to store that money though, which leads me to my next point. Emergencies are emergencies because they come without warning, without you having a chance to plan. Thefore the primary things you want in an emergency fund account are stability and quick access. You can structure investments to be whatever you think of as safe or stable but you don't want to be thinking about whether it's a good time to sell when you need the money right now. But the bigger problem is access. When you need the funds on a weekend, holiday, anytime outside of market hours, you're not going to be able to just sell some stocks and go to an ATM. This is the reason why it's recommended to have these funds in a checking or savings account usually. The reason I mentioned the budgeting side first is because I wanted to point out that if you're budgeting well, most of the unexpected expenses you have should have been expected in a sense; you can still plan for something without knowing when or if it will happen. So in the example of a car repair, ideally you're already budgeting for possible repairs, if you own a home you're budgeting for things that would go wrong, budgeting for speeding tickets, for surprise out of pocket medical costs, etc. These then become part of your normal budget: they aren't part of the emergency fund anymore. The bright side about budgeting for something unexpected is that you know what that money is for, and do you likely also know how quickly you'll need it. For example you know if you have unexpected medical costs that happen very quickly, you're not likely you need a bag of cash on a moment's notice. So those last two points lead to the fact that your actual emergency fund, the dollars that are for things you simply could not foresee, will be relatively small. A few thousand dollars or so in most cases. If you've got things structured like this, you'll be happy to have a few grand available at a moment's notice. The bulk of the money you would use for other surprise expenses (or things like 6 months of living expenses) is represented in other specific categories and you already know the timeframe in which you need it (probably enough time that it could be invested, risk to taste). In short: by expecting the unexpected, you can sidestep this issue and not worry so much about missed returns on the emergency fund.",
"title": ""
},
{
"docid": "6c33bf1dbc4fda12b28dadf262162d4b",
"text": "\"Given that the 6 answers all advocate similar information, let me offer you the alternate scenario - You earn $60K and have an employer offering a 50% match on all deposits. All deposits. (Note, I recently read a Q&A here describing such an offer. If I see it again, I'll link). Let the thought of the above settle in. You think about the fact that $42K isn't a bad salary, and decide to deposit 30%, to gain the full match on your $18K deposit. Now, you budget to live your life, pay your bills, etc, but it's tight. When you accumulate $2000, and a strong want comes up (a toy, a trip, anything, no judgement) you have a tough decision. You think to yourself, \"\"after the match, I am literally saving 45% of my income. I'm on a pace to have the ability to retire in 20 years. Why do I need to save even more?\"\" Your budget has enough discretionary spending that if you have a $2000 'emergency', you charge it and pay it off over the next 6-8 months. Much larger, and you know that your super-funded 401(k) has the ability to tap a loan. Your choice to turn away from the common wisdom has the recommended $20K (about 6 months of your spending) sitting in your 401(k), pretax deposited as $26K, and matched to nearly $40K, growing long term. Note: This is a devil's advocate answer. Had I been the first to answer, it would reflect the above. In my own experience, when I got married, we built up the proper emergency fund. As interest rates fell, we looked at our mortgage balance, and agreed that paying down the loan would enable us to refinance and save enough in mortgage interest that the net effect was as if we were getting 8% on the money. At the same time as we got that new mortgage, the bank offered a HELOC, which I never needed to use. Did we somehow create high risk? Perhaps. Given that my wife and I were both still working, and had similar incomes, it seemed reasonable.\"",
"title": ""
},
{
"docid": "2862e6c7df5b16e84cf1d1eb56291d89",
"text": "I treat the concept of emergency funds as a series of financial buffers. One layer is that I have various credit cards with a small positive balance, that I can max out in an emergency should I go broke and not be in employment (those have saved me once or twice) My final level of emergency funds, is kept at home in the form of cash, I've never needed it, but it protects against getting locked out of the financial system (I lose my debit cards, banking system freezes all withdrawals, zombie invasion). It also doubles as my destitution fund, as if all else fails I still have raw cash to buy food and thus I won't starve (at least for a few months).",
"title": ""
},
{
"docid": "0756241e8bf8cc0afd2d37e379c09505",
"text": "Let me first start by defining an emergency fund. This is money which is: Because emergency's usually need to be deal with ASAP, boiler breaks, gears box in a car. Generally you need these to be solved as soon as possible, because ou depend on these things working and you can't budget for this type of expenditure using just your monthly salary. This is a personal opinion but I prefer investment types that don't have another fee on access. I really don't like having another fee on top on money that I need right now. Investment Options: Market based investments should be seen as long term investments, therefore they do not really satisfy requirement one, they can also have broker fees, therefore you might pay a small extra charge for taking money out, and so do not satisfy requirement two. Investment Options for Emergency Funds You want to get the best return on your money even if it's your emergency fund. So use regular saving accounts, but from you emergency fund or use tax effective savings accounts, like a cash ISA if based in the UK. Don't think of an emergency money as just sitting there, you have options just makes sure the options fit the requirements. UPDATE Given feedback I appreciate there are levels of emergency fund, the above details things which might be about 1-2 month salary in cost, car repairs, leaks, boiler repairs. Now I have another fund which is in P2P funds which is higher risk than a deposit account but then gives me a better return and is less subject to market fluctuations and it would be the place I go to for loss of job level emergencies say 6 months of salary, this takes a bit longer to access but given I have the above emergency fund I have given myself time to get the money from the P2P account.",
"title": ""
},
{
"docid": "82a400b4e1f10bedb37481dda36b702a",
"text": "It all depends on the liquidity of your investments some examples: You can mitigate only the risk that you can control. It is always good to have:",
"title": ""
}
] |
[
{
"docid": "5d7f244020437e6a98abac60a57ca848",
"text": "While it’s your personal choice on HOW you save for later its essential that you save. My sister works in a bank and recommended me not to put any money into retirement plans since the tax-advances seem fine but have to paid back when you take the money out of the accounts (in Switzerland, don't know about the united states). Many reasons exist that you suddenly need the money: Buying a house, needing a new car, health issues or just leaving the country forever (and the government trying to make it as hard as possible for you to get your money back). I recommend putting it on a savings account on a different bank that you normally use, without any cards and so on. In short: It can be dangerous to have money locked away – especially if you could easily have it at your hands and you know you're able to manage it.",
"title": ""
},
{
"docid": "55bcedf9148ed62eafa72d0c3547db05",
"text": "\"The mix how how you present this feels contradictory. You would pull a 'major' portion from the emergency fund (EF), but at the same time, you'll replace it in a month. The first bit scares me, this is not the purpose of that fund, and the issue is the aspect of money that's psychological. Money is a habit, if you justify this use of the EF now, it gets progressively easier for this purchase or that, and the fund loses its intended purpose. If the second half is accurate, that your income would replace that money in a month, i'd say the fund wasn't fully funded to its proper level, 6-9 months of all expenses to get you though issues as bad as a job loss. The great thing I see in your question is what's missing. You're not looking to buy a car with a loan. That puts you in a good situation, and should push those answering to cut you some slack on the one month \"\"bridge loan\"\" from your own savings. Edit - OP add 2 key points, His EF is 3 years expenses (wow, kudos to him!), but he's living like a student (i.e. with parents, which keeps his costs low). If this latter observation seems judgmental, I'll re-edit. The finances of everyone would be far better off if we adopted multigenerational living. The young could save as Fahad is doing, and when parents retire, they can know they are cared for. In the US, I'd say \"\"when you move out, your expenses will go up drastically,\"\" but in this case, that may not happen, or not soon. This is my observation the world is a big place and our answers need to fit the OP's situation, not assume our own standards apply to all. Buy the better car. You saved. You earned it.\"",
"title": ""
},
{
"docid": "36e643c89da53b0e2d4622950dd89045",
"text": "I would disagree with your analysis. To me there are two purposes for a money market (MM): Your emergency fund should be from 3 to 6 months of expenses. Think of it of an insurance policy against Murphy. You may want to have some money designated for big expenses, or even sinking funds. For example, I keep some money in a MM for a car as both the wife, daughter, and I driver older vehicles. I may need to replace them. If you were planning on making a larger purchase car, house, boat, engagement ring I would put the money in a MM fund so you are not subject to the whims of the market. After that you are free to invest all your money. Its likely that you should have some money outside of tax advantaged funds so if you want to start a business you will not have to do high cost withdrawals.",
"title": ""
},
{
"docid": "289135f42bf8602686098991399ef023",
"text": "When it comes down to it, long-term investments pay better than short-term ones. If nothing else, there's less administration and less financial risk for the provider. That's why 2, 3 or 5 year savings accounts pay better than instant access ones. Higher-risk investments pay more interest (or dividends) than low-risk ones. They have to, or nobody would invest in them. So by locking yourself out of any long term and/or risky investments, you're stuck with a choice of low-interest short term ones. There are plenty of investment funds that you can sell at short notice if you want to. But they are volatile, and if you cash out at the wrong time, you can get back less than you invested. The way you lower risk is either to invest in a fund that covers a broad range of investments, or invest in several different funds.",
"title": ""
},
{
"docid": "9b9a659ee68b3baea3494b9c715fafe6",
"text": "\"For me, the emergency fund is meant to cover unexpected, but necessary expenses that I didn't budget for. The emergency fund allows me to pay for these things without going into debt. Let's say that my car breaks down, and I don't have any money in my budget for fixing it. I really need to get my car fixed, so I spend the money from my emergency fund. However, cars break down periodically. If I was doing a better job with my budget, I would allocate some money each month into a \"\"car repair/maintenance\"\" category. (In fact, I actually do this.) With my budgeting software, I can look at how much I've spent on car repairs over the last year, and budget a monthly amount for car repair expenses. Even if I do this, I might end up short if I am unlucky. Emergency fund to the rescue! If I'm budgeting correctly, I don't pay any regular bills out of this fund, as those are expected expenses. Car insurance, life insurance, and property tax are all bills that come on a regular basis, and I set aside money for each of these each month so that when the bill comes, I have the money ready to go. The recommended size of an emergency fund is usually listed as \"\"3 to 6 months of expenses.\"\" However, that is just a rough guideline. As you get better with your budget, you might find that you have a lower probability of needing it, and you can let your emergency fund fall to the lower end of the guideline range. The size of my own emergency fund is on the lower end of this scale. And if I have a true crisis (i.e. extended unemployment, severe family medical event), I can \"\"rob\"\" one of my other savings funds, such as my car replacement fund, vacation fund, etc. Don't be afraid to spend your emergency fund money if you need it. If you have an unexpected, necessary expense that you have not budgeted for, use the emergency fund money. However, your goal should be to get to the point where you never have to use it, because you have adequately accounted for all of the expenses that you can reasonably expect to have in the future.\"",
"title": ""
},
{
"docid": "9b06e7307088dc7210864a5d44d88371",
"text": "I am understanding the OP to mean that this is for an emergency fund savings account meant to cover 3 to 6 months of living expenses, not a 3-6 month investment horizon. Assuming this is the case, I would recommend keeping these funds in a Money Market account and not in an investment-grade bond fund for three reasons:",
"title": ""
},
{
"docid": "a688bd683b9434c0fed89aadcbbb9cb3",
"text": "\"The purpose of the emergency fund is to enable you to pay for unplanned necessary expenses without going into debt. You know that cars don't last forever and eventually need to be replaced. Ideally, you would have a \"\"car replacement fund\"\" which you contribute to a little every month. (Essentially, it is a car payment to yourself.) Then when it comes time to get a replacement car, you have money set aside for this purpose and know exactly how much you can spend. However, in your case it seems that you don't have enough money in your car replacement fund for the car that you want. There are a few different causes that might have led to this situation: Due to unforeseen circumstances, you need a replacement car before you thought you would need it. You find that your planning was not quite right, and you weren't saving as much as you need. You are trying to buy a more expensive car than you need. If a replacement car is a necessity, two of these are emergencies, one is not. If you don't have enough cash set aside for a car, it is certainly better to spend your emergency fund and pay cash than to borrow money to buy the car. Only you can decide if the car you are looking at is appropriate for you, or if you should be looking at a less expensive car. After you purchase the car, build your emergency fund back up first, then start saving for your next car.\"",
"title": ""
},
{
"docid": "b4cea859a9848373c95e16a60f3aeadd",
"text": "Why can't you have both? If you do have both credit and an emergency fund, and an emergency occurs, you can draw from the line of credit first. Having debt + cash is a much more stable situation than having neither, because then you have the option to use the cash to pay off the debt, or use the cash to pay other expenses. If you just have cash, when you spend it it's gone and there's no guarantee anyone is going to lend you any money at that point.",
"title": ""
},
{
"docid": "5f6ece7c89aeb6cab3a15d9aec09963b",
"text": "Before starting with investing, you should make sure you are saving enough. Living in a welfare country (France) does not exempt you from potentially needing to save large amounts of money. You state that you do not need much of an emergency day fund, but this is not true. Being dismissed unjustly from your job is not the only way to become unemployed and not all roads lead to unemployment pay. Being fired for cause or leaving your job voluntarily are two work related causes that will leave you without an income source. Unexpected major expenses are another reason you might need to dip into your emergency fund. If your emergency fund is in order, the next thing to investigate is your pension and saving for retirement. In a country with a strong pension system, you need to check how comfortable you are with its sustainability (Greece anyone?) and also whether it will adequately meet your needs. If not, there are no 401ks or IRAs in France, but there is a relatively new personal supplementary pension plan (PERP) that you might investigate contributing to. If you're comfortable with your emergency fund and your retirement savings, then preparing for buying a house is likely your next savings goal. A quick search shows that to get a mortgage to buy a house in France, banks will commonly require a downpayment of 20% plus various closing costs. See for example here. This is 40,000+ euro for a 200k euro house, which will take you several years at the rate of 500 euro / month. France has special plans (Plan d’Epargne Logement) with tax-exempt interest for saving up for a house that you might want to investigate. In your other question, you also ask about buying a cheap car. As you get older and possibly start a family, having a car will likely become more of a necessity. This is another goal you can save for rather than having to take a loan out when you buy one.",
"title": ""
},
{
"docid": "151ec6d3e24b890cc9732e88649dfd6e",
"text": "\"What you're describing makes sense. I'd probably call the non-liquid portion something besides my \"\"emergency fund\"\", but that's semantics mostly. If you have 3 months of \"\"very liquid\"\" cash in this emergency fund and you're comfortable that this amount is good for your situation, then I don't see why you can't have additional savings in more or less liquid vehicles. Whatever you set up, you'll want to think about how to tap it when you need it. You might have a CD ladder with one maturing every three months. That would give you access to these funds after your liquid funds dry up. (Or for a small/short term emergency, you'll be able to replenish the liquid fund with the next-maturing CD.) Or set up a T Bill ladder with the same structure. This might provide you with a tax advantage.\"",
"title": ""
},
{
"docid": "e32fa977d20156bc3c089162770bd973",
"text": "\"It's a spin on the phrase \"\"making your money work for you\"\". before sending your money off to do the heavy lifting, you'll want to have an emergency savings account of about six months of living expenses stored in cash. Basically, he is saying before you start to invest make sure you have sufficient emergency savings.\"",
"title": ""
},
{
"docid": "9e8d85d78ecbeb8f53dec0110eed30fe",
"text": "There's something very important no one else has mentioned... times when the stock market falls dramatically are often the times when you're most likely to lose your job, and when it's hardest to get loans. So if you ever do need your emergency fund, it will more than likely be related to a dip in the stock market.",
"title": ""
},
{
"docid": "1344b296a3240da9185bf0b8287c5358",
"text": "The biggest problem is what happens when you make a withdrawal if an emergency occurs. If the money was a contribution from a past year, you will not be able to put those funds back into the fund until a later date. Assume the following scenario: The limits regarding maximum annual contribution and windows when you can contribute make this an inefficient way to operate the emergency fund/retirement fund. Retirement and emergency funds are both important. Don't co-mingle them, it leads to double counting the money when you guesstimate where you are regarding your financial goals.",
"title": ""
},
{
"docid": "c0364ea9ed924d97f3b4e2d2d2f20006",
"text": "This is a somewhat subjective question, but if you are following a particular personal finance methodology, just do whatever they recommend. For example, I believe that Dave Ramsey's program calls for the emergency fund to be in a different account.",
"title": ""
},
{
"docid": "8965f489cca99abdd4001c2050f1b79a",
"text": "I know this is heresy but if you have funds for significantly more than 6 months of expenses (let's say 12 months), how risky would it be to put it all into stock index funds? Quite risky as if you do need to dip into it, how fast could you get the cash? Also, do you realize the tax implications when you do sell the shares should you have an emergency? In the worst-case scenario, let's say you have a financial emergency at the same time the stock market crashes and loses half its value. You could still liquidate the rest and have sufficient funds for 6 months. Am I underestimating the risks of this strategy? That's not worst case scenario though. Worst case scenario would be another 9/11 where the markets are closed for nearly a week and you need the money but can't get the funds converted to cash in the bank that you can use. This is in addition to the potential wait for a settlement in the case of using ETFs if you choose to go that way. In the case of money market funds, CDs and other near cash equivalents these can be accessed relatively easily which is part of the point. A staggered approach where some cash is kept in house, some in accounts that can easily accessed and some in other investments may make sense though the breakdown would differ depending on how much risk people are willing to take. If it truly is an emergency fund then the odds of needing it should be very slim, so why live with near zero return on that money? Something to consider is what is called an emergency here? For some people a sudden $1,000 bill to fix their car that just broke down is an emergency. For others, there could be emergency trips to visit family that may have gotten into accidents or gotten a diagnosis that they may pass away soon. Consider what do you want to call an emergency here as chances are you may not be considering all that people would think is an emergency. There is the question of what other sources of money do you have to cover should issues arise.",
"title": ""
}
] |
fiqa
|
4e42cc0c56f12a0ddc455f6e3de256a1
|
The Benefits/Disadvantages of using a credit card
|
[
{
"docid": "dabeca4966bcc58743a28badc128b907",
"text": "There are a couple of things to consider. First, in order to avoid interest charges you generally just need to pay the statement balance before the statement due date. This is your grace period. You don't need to monitor your activity every day and send immediate payments. If you're being really tight with money, you can actually make a little profit by letting your cash sit in an interest bearing account before you pay your credit card before the due date. Second, credit card interest rates are pretty terrible, and prescribed minimum payments are comically low. If you buy furniture using your credit card you will pay some interest, be sure to pay way more than the minimum payment. You should avoid carrying a balance on a credit card. At 20% interest the approximate monthly interest charge on $1,000 is $16.67. Third, if you carry a balance on your credit card you lose the interest grace period (the first point above) on new charges. If you buy your couch, and carry the balance, when you buy a soda at 7-11, the soda begins to accrue interest immediately. If you decide to carry a balance on a credit card, stop using that card for new charges. It generally takes two consecutive billing period full balance payments to restore the grace period. Fourth, to answer your question, using a credit card to carry a balance has no impact on your score. Make your payments on time, don't exceed your limits, keep your utilization reasonable. The credit agencies have no idea if you're carrying a balance or how much interest you're paying. To Appease the people who think point four needs more words: Your credit report contains your limit, your reported balance (generally your statement balance), and approximate minimum payment. There is no indication related to whether or not the balance contains a carried balance and/or accrued interest. The mere fact of carrying a balance will not impact your credit score because the credit reporting bureaus don't know you're carrying a balance. Paying interest doesn't help or hurt your score. Obviously if your carried balance and interest charges push your utilization up that will impact your score because of the increased utilization. Make your payments on time, don't exceed your limits, keep your utilization reasonable and your score will be fine.",
"title": ""
},
{
"docid": "e6e3bd403ff62470cfd7ae67cf18581d",
"text": "\"Using the card but paying it off entirely at each billing cycle is the only \"\"Good\"\" way to use a credit card. If you feel like you will be tempted to buy more than you can pay back don't use credit. As far as furnishing the apartment, the best thing to do would be to save and pay cash, but if you want to use credit the credit available at stores would be a far better deal than carrying it on a card.\"",
"title": ""
},
{
"docid": "69ba39e1c70624111401b32ce3b72bc1",
"text": "\"Credit cards have three important advantages. None of them are for day-to-day borrowing of money. Safety - Credit cards have better fraud protection than checks or cash, and better than most debit/check cards. If you buy something with a credit card, you also get the issuer's (think Visa) assurances that your will get the product you paid for, or your money back. At almost any time, if a product you buy is not what you expect, you can work with the issuer, even if the store says \"\"screw you\"\". Security - Credit cards are almost universally accepted as a \"\"security\"\" against damages to the vendor. Hotels, car rentals, boat rentals etc. will accept a credit card as a means of securing their interests. Without that, you may have to make huge deposits, or not be able to rent at all. For example, in my area (touristy) you can not rent a car on debit or cash. You must use a credit card. Around here most hotel rooms require a credit card as well. This is different from area to area, but credit cards are nearly universally accepted. Emergencies - If you're using your credit card properly, then you have some extra padding when stuff goes wrong. For example, it may be cheaper to place a bill on a credit card for a couple months while you recover from a car accident, than to deplete your bank account and have to pay fees. Bonus - Some cards have perks, like miles, points, or cash back. Some can be very beneficial. You need to be careful about the rules with these bonuses. For example, some cards only give you points if you carry a balance. Some only give miles if you shop at certain stores. But if you have a good one, these can be pretty fantastic. A 3% cash back on purchases can make a large difference over time.\"",
"title": ""
},
{
"docid": "469cdfdf93fe42ed1e5dee41831d0e41",
"text": "\"paying it off over time, which I know is the point of the card That may very well be the card issuer's goal, but it need not be yours. The benefits, as your question title seems to ask for - That said, use the card, but don't spend more than you have in your checking account to pay it when the bill comes. What you may want to hear - \"\"Charge the furniture. Pay it off over the next year, even at 20%/yr, the total interest on $2000 of furniture will only be $200, if you account for the declining balance. That's $4/week for a year of enjoying the furniture.\"\" You see, you can talk yourself into a bad decision. Instead, shop, but don't buy. Lay out the plan to buy each piece as you save up for it. Consider what would happen if you buy it all on the card and then have any unexpected expenses. It just gets piled on top of that and you're down a slippery slope.\"",
"title": ""
},
{
"docid": "e138ff6defe2d6a89d15ee865e23745f",
"text": "\"Credit card interest rates are obscene. Try to find some other kind of loan for the furnishings; if you put things on the card, try to pay them off as quickly as possible. I should say that for most people I do recommend having a credit card. Hotels, car rental agencies, and a fair number of other businesses expect to be able to guarantee your reservation by taking the card info and it is much harder to do business with them without one. It gives you a short-term emergency fund you can tap (and then immediately pay back, or as close to immediately as possible). Credit cards are one of the safer ways to pay via internet, since they have guarantees that limit your liability if they are misused, and the bank can help you \"\"charge back\"\" to a vendor who doesn't deliver as promised. And if you have the self-discipline to pay the balance due in full every month, they can be a convenient alternative to carrying a checkbook or excessive amounts of cash. But there are definitely people who haven't learned how to use this particular tool without hurting themselves. Remember that it needs to be handled with respect and appropriate caution.\"",
"title": ""
},
{
"docid": "da2aca5da58a76597741eeac1315b3d5",
"text": "Everyone else seems to have focused (rightly so) on the negatives of credit cards (high interest rates) and why it is important to pay them off before interest starts accruing. Only Marin's answer briefly touched on rewards. To me, this is the real purpose of credit cards in today's age. Most good rewards cards can get you anywhere from 1-2% cash back on ALL purchases, and sometimes more on other categories. Again, assuming you can pay the balance in full each month, and you are good at budgeting money, using a credit card is an easy way to basically discount 1-2% of all of the spending you put on your card. AGAIN - this only works to your advantage if you pay off the credit card in full; using the above example of 20% interest, that's about 1.6% interest if the interest compounds monthly, which wipes out your return on rewards if you just go one month without paying off the balance.",
"title": ""
},
{
"docid": "fd1e20b22fa6c68b8901990ba6ef6ff1",
"text": "One thing that has not been pointed out as a disadvantage of using Credit Cards: people tend to spend more. You can see This Study, and this one, plus about 500 others. On average people tend to spend about 17% more with credit cards then with cash. This amount dwarphs any perks one gets by having a credit card. The safest way to use one is to only use them for purchases where you cannot make a decision to spend more. One example would be for utility bills (that don't charge a fee) or at the gas pump. Using them at Amazon might have you upgrade your purchase or add some extra items. Using them at restaurants might encourage you to order an extra drink or two. Using them at the coffee shop might have you super size your coffee or add a pastry. Of course this extra spending could lead you into a debt cycle exacerbating the financial hit many struggle with. Please tread carefully if you decide to use them.",
"title": ""
},
{
"docid": "d83a3fd3d00c80f66477d90e41b235f7",
"text": "\"Note: this answer is true for the UK, other places may vary. There are a couple of uses for credit cards. The first is to use them in a revolving manner, if you pay off the bill in full every time you get one then with the vast majority of cards you will pay no interest, effecitvely delay your expenses by a month, build your credit rating and with many credit cards you can also get rewards. Generally you should wait until the bill comes to pay it off. This ensures that your usage is reported to the credit ratings agencies. In general you should not draw out cash on credit cards as there is usually a fee and unlike purchases it will start acruing interest immediately. The second is longer term borrowing. This is where you have to be careful. Firstly the \"\"standard\"\" rate on most credit cards is arround 20% APR which is pretty high. Secondly on many cards once you are carrying a balance any purchases start acruing interest immediately. However many credit cards offer promotional rates. In contrast to the standard rates which are an expensive way to borrow the promotional rates often allow you to borrow at 0% APR for some period. Usually when it comes to promotional rates you get the best deal by opening a new credit card and using it immediately. Ideally you should plan to pay off the card before the 0% period ends, if you can't do that then a balance transfer may be an option but be aware than in a few years the market for credit cards may (or may not) have changed. Whatever you do you should ALWAYS make sure to pay at least the minimum payment and do so on time. Not doing so may trigger steep fees, loss of promotional interest rates. There is a site called moneysavingexpert that tracks the best deals.\"",
"title": ""
},
{
"docid": "b324d756f11286a3f2de6da4a67af60b",
"text": "\"In the UK, using a credit card adds a layer of protection for consumers. If something goes wrong or you bought something that was actually a scam, if you inform the credit card company with the necessary documents they will typically clear the balance for that purchase (essentially the burden of 'debt' is passed to them and they themselves will have to chase up the necessary people). Section 75 of the Consumer Credit Act I personally use my credit card when buying anything one would consider as \"\"consumer spending\"\" (tvs, furniture ect). I then pay off the credit card immediately. This gives me the normal benefits of the credit card (if you get cashback or points) PLUS the additional consumer credit protection on all my purchases. This, in my opinion is the most effective way of using your credit card.\"",
"title": ""
},
{
"docid": "22e66c320b970c5888e0ab34f57f215f",
"text": "The thing you need to keep in mind is that if you take on debt, you need to have a plan to pay it off and execute on it. You also need to understand what your carrying cost is (what you will pay in finance charges every month.) There are times when you need to take on debt in order to be a productive person. For example, in many places in the US, you need a car in order to have a job. It's ludicrous for someone to assert that you shouldn't take on any debt in order to get a reliable vehicle. That doesn't mean you go out and lease the fanciest car that you can get on your income. In this case, I'd say it's a bit of a grey area. Could you live in an unfurnished apartment for a while? Perhaps. Many people would have a hard time living like that and it could affect your ability to perform at work. I would argue that buying a decent mattress to sleep on falls under the same category as getting a car so that you can work. You don't want to be missing work because your back is in spasm from sleeping on the floor or a worn out mattress. As far as the rest of it goes, it really depends on how fast you can pay it off. If you are looking at more than a few months (6 tops) to pay off the purchase in full, you should reassess. Realize that the interest you are paying is increasing the cost of the furniture and act accordingly. As mentioned, you can often get 0% financing for a limited period. Understand that if you don't pay off the entire balance in that period, you will normally be retroactively charged interest on the entire starting amount and that interest rate will likely be quite high. The problem with credit is when you start using it and continually growing the balance. It's easy to keep saying that you will start paying it off later and the next thing you know you are buried. It's not a big one-time purchase (by itself) that normally gets people into trouble, it's continual spending beyond their means month after month.",
"title": ""
},
{
"docid": "c66ba9f4f3ff61ebd2e8c6b23ade1366",
"text": "One of the more subtle disadvantages to large credit card purposes purchases (besides what the other answer mentions), is that it makes you less prepared for emergencies. If you carry a large balance on your credit card with the idea that your income can easily handle the payments to beat the no-interest period, you never know when you'll have an unexpected emergency and you'll end up having to pay less, miss the deadline and end up paying huge interest. Even if you are fastidious about saving and budgeting, what if your family comes under a large financial burden (just as one possible example)?",
"title": ""
},
{
"docid": "25289ea61944e5b4bafd9ae395d2a347",
"text": "\"never carry a balance on a credit card. there is almost always a cheaper way to borrow money. the exception to that rule is when you are offered a 0% promotion on a credit card, but even then watch out for cash advance fees and how payments are applied (typically to promotional balances first). paying interest on daily spending is a bad idea. generally, the only time you should pay interest is on a home loan, car loan or education loan. basically that's because those loans can either allow you to reduce an expense (e.g. apartment rent, taxi fair), or increase your income (by getting a better job). you can try to make an argument about the utility of a dollar, but all sophistry aside you are better off investing than borrowing under normal circumstances. that said, using a credit card (with no annual fee) can build credit for a future car or home loan. the biggest advantage of a credit card is cash back. if you have good credit you can get a credit card that offers at least 1% cash back on every purchase. if you don't have good credit, using a credit card with no annual fee can be a good way to build credit until you can get approved for a 2% card (e.g. citi double cash). additionally, technically, you can get close to 10% cash back by chasing sign up bonuses. however, that requires applying for new cards frequently and keeping track of minimum spend etc. credit cards also protect you from fraud. if someone uses your debit card number, you can be short on cash until your bank fixes it. but if someone uses your credit card number, you can simply dispute the charge when you get the bill. you don't have to worry about how to make rent after an unexpected 2k$ charge. side note: it is a common mis-conception that credit card issuers only make money from cardholder interest and fees. card issuers make a lot of revenue from \"\"interchange fees\"\" paid by merchants every time you use your card. some issuers (e.g. amex) make a majority of their revenue from merchants.\"",
"title": ""
},
{
"docid": "2a92bb207b3777dc38b829f77f1fa689",
"text": "If you can use and pay off your credit card in full every month, there are plenty of benefits including improved credit, reward points and more. Many fall into the trap of just making the minimum payments and facing high interest charges or missing payments and getting a hit on their credit reports. To start off, put something small that you know you can pay off every month. It could be your Netflix or your gas. Make sure you pay it off before any interest is accrued. Over time, you can ask for higher limits to boost your utilization rate.",
"title": ""
},
{
"docid": "ba5e72b09d215ff8acab3310262b3c2c",
"text": "I just want to stress one point, which has been mentioned, but only in passing. The disadvantage of a credit card is that it makes it very easy to take on a credit. paying it off over time, which I know is the point of the card. Then you fell into the trap of the issuer of the card. They benefit if you pay off stuff over time; that's why taking up a credit seems to be so easy with a credit (sic) card. All the technical aspects aside, you are still in debt, and you never ever want to be so if you can avoid it. And, for any voluntary, non-essential, payment, you can avoid it. Buy furniture that you can pay off in full right now. If that means only buying a few pieces or used/junk stuff, then so be it. Save up money until you can buy more/better pieces.",
"title": ""
},
{
"docid": "b3224957bda477a4f0c3ac37ecb8585b",
"text": "An advantage of using a major credit card is that they act as a buffer and source of recourse between you and the merchant. Cheated and the store won’t answer you letters? Call Visa (or more accuratly, call the number on the back of the card). (That is, #2 on this answer, which you can also reference for a whole list of benefits.)",
"title": ""
},
{
"docid": "e6d386b73dc66d3d6398075753f99043",
"text": "Personally the main disadvantages are perpetuation of the credit referencing system, which is massively abused and woefully under regulated, and encouraging people to think that it's ok to buy things you don't have the money to buy (either save up or question price/necessity).",
"title": ""
}
] |
[
{
"docid": "bb61a842ce680b93e02b19b67966b87f",
"text": "The biggest advantage to small business owners paid in cash is not that it might save the 2 or 3 percent that would go to the credit card company. The biggest advantage is that they have the opportunity to keep the transaction entirely off the books and pocket the cash without paying income tax or sales tax, especially when no receipt is given, or when it's a service instead of a product being sold, or when it's an approximately-tracked inventory unit going out the door. Although it's illegal, it's widely done, and it's also often a temptation for employees to try and get away with doing it too.",
"title": ""
},
{
"docid": "124cae85af8990ca07a7801c5d000706",
"text": "Only reason I can think of is that having a credit card, or several, is handy for buying stuff on-line, or not having to haul around a fat wallet full of cash. Of course for some of us, getting the cash back and 0% interest periods are nice, too, even if we don't really need the money. Same as for instance trying to get good mpg when you're driving, even if you could easily afford to fill up a Hummer. It's a game, really.",
"title": ""
},
{
"docid": "d6ac6bef5e8fc21dc420d50a8854bbe2",
"text": "It is absolutely worth it. My wife and I have two of these accounts (different banks). We are required to use our cards 20 times for one bank, and 15 for the other. We have yet to miss the required transactions in a month (over 15 months of use now), and are actually considering getting a third account. Between the two of us, we simply have to use our card on average once a day. Getting gas? Use your debit card. Getting stamps? Use your debit card? Self checkout? Use your debit card twice. Eating out? Use your debit card. If married, split the bill. As soon as we reach the minimum, we stop using the debit cards and switch to credit cards to further boost the rewards. Maybe it's easier for us since we don't have kids and are out a lot, but 12 transactions is really simple to obtain. We receive ~$100 a month from our two accounts, all for doing something we already do.",
"title": ""
},
{
"docid": "ce8df3b5edca7c3e7cf625537995bd2f",
"text": "Credit card companies are businesses. Businesses will make any decision that makes them money. So does it make them money to cancel your account? It's a simple cost-benefit analysis: you having an account with them will probably give them some benefit for very little cost to them. The only real cost associated with an open account is someone who uses the card but doesn't pay, but they're pretty sure you won't be doing that.",
"title": ""
},
{
"docid": "ae5cafdad1b246acddbc8c9896276c3a",
"text": "Three reasons I prefer not to use direct debit:",
"title": ""
},
{
"docid": "2786cbf4423fa30dc7a0d1cbed87a1a5",
"text": "If you are in the U.S., without credit cards, you probably don't have a credit history. Without a credit history, you won't be able to get a loan/mortgage, and even if you do, you'll get it on very unfavorable terms. Depending on where you live you might even have great difficulty renting an apartment. So, the most important reason to have credit cards is to have a good credit score. People have already listed other advantages of having credit cards, but another thing that wasn't mentioned is fraud protection. Credit cards are better protected against fraud than debit cards. You probably shouldn't use debit cards online unless you must. Also, without a credit card or credit history, some simple and important liberties like renting a car while you are travelling might be denied to you. So, in conclusion, it's bizarre, but in modern America you need credit cards, and you need them bad.",
"title": ""
},
{
"docid": "bb0e3e99c7cda972e38413ba3620e23d",
"text": "\"There are hidden costs to using rewards cards for everything. The credit card company charges fees to the merchant every time you make a purchase. These fees are a small amount per transaction, plus a portion of the transaction amount. These fees are higher for rewards cards. (For example, the fees might be 35 cents for a PIN-transaction on a debit card, or 35 cents plus 2 percent for an ordinary credit card or signature transaction on a debit card, or 35 cents plus 3.5 percent on a rewards card.) After considering all of their expenses, merchant profit margins are often quite small. To make the same amount of profit by serving a rewards-card customer as a cash customer, the merchant needs to sell higher profit-margin items and/or more items to the rewards-card customer. People who \"\"pay with plastic\"\" tend to spend more than people who \"\"pay with cash\"\". If you pay with a rewards card, will you spend even more?\"",
"title": ""
},
{
"docid": "7b000a97892cc975d572e05f9af9505f",
"text": "This is very much possible and happens quite a lot. In the US, for example, promotional offers by credit card companies where you pay no interest on the balance for a certain period are a very common thing. The lender gains a new customer on such a loan, and usually earns money from the spending via the merchant fees (specifically for credit cards, at least). The pro is obviously free money. The con is that this is usually for a short period of time (longest I've seen was 15 months) after which if you're not careful, high interest rates will be charged. In some cases, interest will be charged retroactively for the whole period if you don't pay off the balance or miss the minimum payment due.",
"title": ""
},
{
"docid": "d905851f6af654a18f454d523e3f11ce",
"text": "If we're including psychological considerations, then the question becomes much more complicated: will having a higher available credit increase the temptation to spend? Will eliminating 100% of a small debt provide more positive reinforcement than paying off 15% of a larger debt? Etc. If we're looking at the pure financial impact, the question is simpler. The only advantage I see to prioritizing the lower interest card is the float: when you buy something on a credit card, interest is often calculated for that purchase starting at the beginning of the next billing cycle, rather than immediately from the purchase date. I'm not clear on what policies credit card companies have on giving float for credit cards with a carried balance, so you should look into what your card's policy is. Other than than, paying off the higher interest rate card is better than paying off the lower interest rate. On top of that, you should look into whether you qualify for any of the following options (presented from best to worst):",
"title": ""
},
{
"docid": "34b428b4393f4ea8ffddd550e0bb6792",
"text": "I would like to offer a different perspective here. The standard fee for a credit card transaction is typically on the order of 30 cents + 2.5% of the amount (the actual numbers vary, but this is the ballpark). This makes small charges frequently unprofitable for small merchants. Because of this they will often have minimum purchase requirements for credit/debit card payments. The situation changes for large retailers (think Wal-mart, Target, Safeway, Home Depot). I cannot find a citation for this right now, but large retailers are able to negotiate volume discounts from credit card companies (a guy who used to work in finance at Home Depot told me this once). Their transaction fees are MUCH lower than 30 cents + 2.5%. But you get the same reward points on your credit card/debit card regardless of where you swipe it. So my personal philosophy is: large chain - swipe away without guilt for any amount. Small merchant - use cash unless it's hundreds of dollars (and then they may give you a cash discount in that case). And make sure to carry enough cash for such situations. When I was a student, that was about $20 (enough for coffee or lunch at a small place).",
"title": ""
},
{
"docid": "bc0868f993b2fbc3bd7ab7251dc90b69",
"text": "I do this, and as you say the biggest downside is not having a separate account for your savings. If you're the type of person who struggles with restraint this is not for you. On the other hand this type of account gives more interest than any other type of US Checking or Savings account I've seen, so you will benefit from the interest.",
"title": ""
},
{
"docid": "8a464b9052001d051093a8dc7cdc0325",
"text": "\"The credit card may have advantages in at least two cases: In some instances (at least in the US), a merchant will put a \"\"hold\"\" on a credit card without charging it. This happens a lot at hotels, for example, which use the hold as collateral against damages and incidental charges. On a credit card this temporarily reduces your credit limit but never appears on your bill. I've never tried to do it on a debit card, but my understanding is that they either reject the debit card for this purpose or they actually make the withdrawal and then issue a refund later. You'll actually need to account for this in your cash flow on the debit card but not on the credit card. If you get a fraudulent charge on your credit card, it impacts that account until you detect it and go through the fraud resolution process. On a debit card, the fraudulent charge may ripple through the rest of your life. The rent payment that you made by electronic transfer or (in the US) by check, for example, is now rejected because your bank account is short by the amount of the fraud even if you didn't use the debit card to pay it. Eventually this will probably get sorted out, but it has potential to create a bigger mess than is necessary. Personally, I never use my debit card. I consider it too risky with no apparent benefit.\"",
"title": ""
},
{
"docid": "37f9ccbc98e620f8cafda25f86a159ee",
"text": "You don't need a credit card anymore than you need a TV or a car. There might be many circumstances where a credit card is a convenience, there might be things you give up because you don't have a credit card. There are even some upsides to a well managed card account. But no, you don't need it.",
"title": ""
},
{
"docid": "29fdf38ff4ab2c12206a69cea90ea65b",
"text": "\"good vs \"\"bad\"\" debt in the context of that post. At least in the UK this can be a good tactic to reduce the cost of credit card debt. Some things to consider\"",
"title": ""
},
{
"docid": "1eb37df8d834d9a541269b26ec8971da",
"text": "\"Some features to be aware of are: How you prioritize these features will depend on your specific circumstances. For instance, if your credit score is poor, you may have to choose among cards you can get with that score, and not have much choice on other dimensions. If you frequently travel abroad, a low or zero foreign transaction fee may be important; if you never do, it probably doesn't matter. If you always pay the balance in full, interest rate is less important than it is if you carry a balance. If you frequently travel by air, an airline card may be useful to you; if you don't, you may prefer some other kind of rewards, or cash back. Cards differ along numerous dimensions, especially in the \"\"extra benefits\"\" area, which is often the most difficult area to assess, because in many cases you can't get a full description of these extra benefits until after you get the card. A lot of the choice depends on your personal preferences (e.g., whether you want airline miles, rewards points of some sort, or cash back). Lower fees and interest rates are always better, but it's up to you to decide if a higher fee of some sort outweighs the accompanying benefits (e.g., a better rewards rate). A useful site for finding good offers is NerdWallet.\"",
"title": ""
}
] |
fiqa
|
bc1acbd66dfa87efa6530533ac457965
|
Should I pay off a 0% car loan?
|
[
{
"docid": "c187c9eb1865e397ec3c9a3faf4956e7",
"text": "Between now and October, your $3,000 will earn $30 in your savings account. If you are late on a payment for your 0% loan, your interest rate will skyrocket. In my opinion, the risk is just not worth the tiny gain you are trying to achieve in the savings account. If it was me, I would pay off the loan today. A few more thoughts: There is a reason that businesses offer 0% consumer loans. They are designed to trick you into thinking that you are getting a better deal than you are. Businesses don't lose money on these loans. The price of the loan is built into the cost of the purchase, whether you are buying expensive furniture, or a car. Typically with a car, you forfeit a rebate by taking the 0% loan, essentially paying all the interest up-front. Now that you have the loan, you might be ahead a few dollars by waiting to pay it off, but only because you've already paid the interest. Don't make the mistake of thinking that you can come out ahead by buying things at 0%. It's really not free money. In the comments, @JoeTaxpayer mentioned that fear of mistakes can lead to missed rewards. I understand that; however, these 0% loans are full of small print designed to trip you up. A single mistake can negate years and years of these small gains. You don't want to be penny wise and pound foolish.",
"title": ""
},
{
"docid": "bfced950704f4900a5c9c7de9bbf87f5",
"text": "I struggle with 0% interest things in my personal life. A responsible me that thinks logically says continue to pay it on time and take advantage of the benefit of the interest free loan you got. It will keep your funds liquid in the case of an emergency, build your credit and teach you self control. Paying it off now has little to no benefit. It does however tie up $3,000 worth of capital you could be using for building interest or leveraging against other purchases.",
"title": ""
},
{
"docid": "7e13b75dc06a5eede38b2cc9dc8ea597",
"text": "\"Mathematically, the wisest choice is to invest your extra money somewhere else and not pay off your 0% loan early. An extreme example highlights this. Suppose some colossal company offered to loan you a billion dollars at 0 % interest. Would you take it? Or would you say \"\"No thanks, I don't want that much debt.\"\" You would be crazy not to accept. You could put that money in the safest investments available and still pocket millions while making the minimum payments back to them. Your choice here is essentially the same, but unfortunately, on much smaller scale. That said, math doesn't always trump other factors. You need to factor in your peace of mind, future purchases, the need for future borrowing, your short term income and job security, and whether you think you can reliably make payments on this loan without messing up and triggering fees that wipe out the mathematical advantage of slow paying the loan. You are fortunate because you really can't make a wrong choice here. Paying off debt is never a bad choice IMO. However, it may not always be the best choice.\"",
"title": ""
},
{
"docid": "edbaae5bb9235c484810f90b9920dd85",
"text": "Pay it off. If you do so, you have the liberty to drop or reduce a portion of your collision auto insurance coverage (keeping uninsured motorist). This could potentially save you a lot more than 20 bucks over the next six months.",
"title": ""
},
{
"docid": "46e0fd4a0513b1e04e20f5ec1819ed82",
"text": "Sometimes I think it helps to think of the scenario in reverse. If you had a completely paid off car, would you take out a title loan (even at 0%) for a few months to put the cash in a low-interest savings account? For me, I think the risk of losing the car due to non-payment outweighs the tens of dollars I might earn.",
"title": ""
},
{
"docid": "fb78ebdc1c683e52ccf7d5d5fa7a46ca",
"text": "\"The question posted was, \"\"Should I pay off a 0% car loan\"\"? The poster provided a few details: I'm ahead on 0% interest car loan. I don't have to make a payment until October. I currently owe $3,000 and I could pay it all off. Should I do that or leave that money in my savings account that earns 2% interest? The question seems to seek a general rule of thumb for how to behave with smaller debts. And a general rule of thumb could be taken from one of two principles (which seem to be religious camps). The \"\"free money\"\" camp believes that you can invest (even small amounts) of money risk-free and receive high returns, tax free, for zero effort. The \"\"reduce debt\"\" camp believes that you should pay off debts so that you have the freedom to live your life unfettered. Which religion do you prefer? I tend to prefer paying off debts. The \"\"free money\"\" tent wants you to pay the car off over the next 6 months, earning interest. Suppose you can earn 2% interest (.02/12 per month), paying $500 per month for 6 months. So you earn interest on 3000 the first month, 2500, the second month, 2000 the third month, So, are you feeling rich, earning $13.13? How much time did you spending making the 5 additional payments? You could skip coffee once/month and make a bigger difference. The \"\"reduce debt\"\" tent would have you pay off the car. Suppose you change your deductible on the car (or drop collision) to save money, and you will also same time by avoid 5 bill payments, But do you still have enough money in your emergency fund, how do you feel about having less insurance coverage, and did you notice the time savings? We really need more information about the poster's situation. The answer should consider the relevant details of the situation to provide an informed response. Here are questions that would enable a response to address the whole situation. Why are these important? Here are a few reasons why the above might be important.\"",
"title": ""
},
{
"docid": "7a24ff2baa6ba010eb8313a0fdd120f9",
"text": "The precise answer depends on the terms and conditions of the loan, and whether you can reasonably expect to meet them. For example, if you keep the loan, make no payments, there is a good chance that - eventually - you will trigger a clause in the contract, and suddenly be charged fees or a significant interest rate. If you don't need to pay anything for a time, odds are you will forget to monitor the loan (after all it is not costing you anything) and suddenly get hit with an unexpected expense. Most loan contracts are structured - by professionals - to benefit the loan provider. The purpose of a loan provider is to make a profit. They do that by encouraging you to pay more - up front, over the longer term, or both. Personally, I would never take out a zero-interest loan. It is specifically designed to appear like a gift from the loan provider, while actually (and almost covertly) costing more at some point. If I was in your position (i.e. if I had taken out such a loan) I'd pay off the loan as fast as possible. If you have more than one loan, however, prioritise by working out which actually costs you more over time. And pay the worst ones first. You'll have to look closely at the terms and conditions - possibly with the help of a professional - to work out which is actually work.",
"title": ""
},
{
"docid": "c0a0b558d1730cc0be2b281a12672cb0",
"text": "Don't pay off the 0% loan. First, set up an automatic monthly payment to ensure you never miss the payment (which could lower your credit score). If you are in Canada, depending on your situation: If you are employed and make more than $50k/year:",
"title": ""
},
{
"docid": "ff342f85b4a36275b6e87fb4bcd0db82",
"text": "Mostly to play devil's advocate, I will recommend something different than everybody else. If you can pay off the entire $3,000 balance and are torn between saving that money somewhere that will earn a return and paying it off now to be debt-free, why not a little of both? What if you pay half now and then save the other half and make a big payment at the end. Essentially that becomes two $1,500 payments: one now, one right before the 0% due date. To me, the half up-front significantly reduces the risk, but leaves some cash available to grow.",
"title": ""
},
{
"docid": "240a38f10d26caaa7f75a553d7af061f",
"text": "Ultimately the question is more about your personality and level of discipline than about money. The rational thing to do is hang on to your cash, invest it somewhere else, and pay off the 0% loan as late as possible without incurring penalties or interest. Logically it's a no-brainer. Problem is, we're humans, so there's a risk you'll slip up somewhere along the way and not pay off the loan in time. How much do you trust yourself?",
"title": ""
},
{
"docid": "b3308e4c8f1bb1711105dc3cb749bb0b",
"text": "Here's my take: 1) Having a car loan and paying it on time helps build credit. Not as much as having credit cards (and keeping them paid or carrying balance just enough to be reported and then paying it), but it counts. 2) Can't you set in your bank, not the lender, something to pay the car automagically for you? Then you will be paying it on time without having to think on it. 3) As others said, do read the fine print.",
"title": ""
},
{
"docid": "313795aa3cd7009475a761556439cee3",
"text": "My theory, if you must be in debit, own it at the least expense possible. The interest you will pay by the end, combined with the future value of money. Example: The Future value of $3000 at an effective interest rate of 5% after 3 years =$3472.88 Present value of $3000 at 5% over 3 years =$2591.51 you will need more money in the future to pay for the same item",
"title": ""
}
] |
[
{
"docid": "3b18376c746ec672517b49eeb64ac570",
"text": "\"It's not a bad strategy. I'd rather owe money at 4% interest than at 6-7%. However, there is something to consider. Consolidating debt into a new loan can backfire. When you have money borrowed at 7%, you want to get that paid off as quickly as possible. Once you have that converted to 4%, if you think, \"\"Now I can take my time paying off this debt,\"\" then you aren't really better off. In fact, if you take too long paying off the new loan, you might end up paying more interest than if you had kept the high interest loan and paid it as soon as possible. Don't lose your drive to get out of debt after you refinance. As far as how the student loans affect your debt-to-income ratio, I'm not sure; however, if they do count (I think they do), your ratio will not really be going up by taking out the new loan, since you are using the money to pay other debt. Make sure the new lender knows this, so they take that into consideration when making their decision. Overall, I like your strategy: pay off what you can right away (the car loan and the highest interest student loans) and reduce the interest on the rest. Just make sure that you continue to pay down that debt as quick as you can.\"",
"title": ""
},
{
"docid": "5a0c90388fb6d27537a840d0a9086ab9",
"text": "\"In addition to the two options in your question - pay off the entire loan, depleting your emergency fund; or continue as you are today - there is a third, middle-ground option that might be worth considering. Since you currently have an emergency fund, zero credit card debt, and you stated \"\"we can afford these expenses\"\", I think I'd be correct to assume that you're currently making regular contributions to either the emergency fund itself, or to another savings account, etc. Temporarily stop making those contributions, and divert those funds to make larger payments towards the upside-down loan. The additional amount will all be applied to the loan principal, reducing the interest you'll have to pay, but you'll avoid the risk of depleting the emergency fund. Additionally, the insurance premium may possibly be avoided, as in many places in the world it's possible to de-register the car (for example, in California, USA, you can submit an affidavit of Non-Use) then terminate the insurance on it. However, the car will likely have to be parked off-street (or in a location such as a private road governed by rules that do not include legal registration requirements).\"",
"title": ""
},
{
"docid": "b0a4fecc1d2b6deb96228758069984a9",
"text": "An emergency fund of $5000 seems on the low side and I would be worried about spending it down to $2000, that said you want to get out of the car loan. It sounds like you have a little extra disposible income since you think you can rebuild your emergency fund quicker than just the amount you will save from not having a car payment. One option to decrease the hit to your emergency fund is to save aggressively for a month or two to increase your emergency fund by a few hundred dollars and take on some other debt (possibly credit card). You could then pay off the new debt and replenish your emergency fund over a slightly longer period. While some financial planners dislike the idea of an emergency fund while still having high interest debt, to me I would prefer to have $1000 in credit card debt and $3000 in an emergency fund over $0 in credit card debt and $2000 in an emergency fund. Given your time course of 6 months or so to pay off the debt, you might even qualify for a 0% credit card introductory rate (or balance transfer).",
"title": ""
},
{
"docid": "96fe0df00f3d0f26a6004e7788cd1852",
"text": "Your goal of wanting to eliminate your debts early is great. Generally, you can save more money by paying off loans with higher interest rates first. However, it sounds like you are excited about the idea of eliminating one of your car loans in two months. There is nothing wrong with that; it is good to be excited about eliminating debt. I like your plan. Pay off the $14.6k loan first, then apply the $635 monthly payment to the $19.4k loan. You'll have that loan paid off almost 3 years early. Perhaps you'll find some additional money to apply to it and get rid of it even earlier. After you've eliminated both car loans, save up that $1000/month for your next car. That will allow you to pay cash for it, which will allow you to negotiate the best price and save interest. 0% loans are not free money. Other answers will tell you to wait as long as possible to pay off your 0% loan, but I think there can be good reasons to eliminate smaller loans first, regardless of interest.",
"title": ""
},
{
"docid": "7d4e2921fe70ac4e499dd5d0c24be24c",
"text": "A Lease is an entirely different way of getting a car. In two situations it makes sense, in all other scenarios it generally doesn't make sense to lease. In the case of always wanting a new car every 2 or 3 years it can make sense to lease. Of course if you drive more the allowed miles you will pay extra at the end of the lease. If you can take the monthly lease as a business expense leasing makes sense. Otherwise you want to pay cash, or get financing. Does zero percent make sense? Sometimes. The only way to make sense of the numbers is to start with your bank, have them approve of the loan first. Then armed with the maximum loan amount they will give you and the rate and the length of the loan, then visit the dealer. You have to run the numbers for your situation. It depends on your income, your other expenses, your credit score, your bank, what deal the dealership is running, how much you have for a down payment. Here is an example. For a recent loan situation I saw: 36 months, 1.49% rate, 20K loan, total interest paid: ~$466. Armed with that information can the person get a better deal at the dealership? There was only one way to find out. In that case the credit union was better. The rebate was larger than the interest paid.",
"title": ""
},
{
"docid": "9f434ca749d0d39db78849b606b457e7",
"text": "Paying off your loan in full will most likely not help your credit score, and could potentially even hurt it. Because car loans are installment loans (and thus differ from consumer credit), lenders really only like seeing that you responsibly pay off your loans on time. They don't really care if you pay it off early--lenders like seeing open lines of credit as long as you manage them well. The hard inquiry will simply lower your credit score a few points for up to two years. So, from a credit score perspective, you're really not going to help yourself in this scenario (although it's not like you're going to be plummeting yourself either).",
"title": ""
},
{
"docid": "cf47890f17a70e7c12db0bdeeb0ffff5",
"text": "\"In addition to all the points made in other answers, in some jurisdictions (including the UK where I live) the consumer credit laws require the lender to allow the borrower to pay off the loan at any time. If the lender charges interest and the borrower pays off the loan early then the lender loses the interest that would have been paid during the rest of the loan period. However if the actual interest is baked into the sale price of an item and the loan to pay for it is nominally \"\"0%\"\" then the borrower still pays all the interest even if they pay off the loan immediately. If you think this game is being played then you can ask for a \"\"cash discount\"\" (or similar wording: I once had problems with a car salesman who thought I meant a suitcase full of used £20s), meaning you want to avoid paying the interest as you are not taking a loan.\"",
"title": ""
},
{
"docid": "a5fd677f5148dd5e154d02cf4ee19ad1",
"text": "Dude- my background is in banking specifically dealing with these scenarios. Take my advice-look for a balance transfer offer-credit card at 0%. Your cost of capital is your good credit, this is your leverage. Why pay 4.74% when you can pay 0%. Find a credit card company with a balance transfer option for 0%. Pay no interest, and own the car outright. Places to start; check the mail, or check your bank, or check local credit unions. Some credit unions are very relaxed for membership, and ask if they have zero percent balance transfers. Good Luck!",
"title": ""
},
{
"docid": "996646b3a3c87bc269fd93c685c9e848",
"text": "You can earn significantly more than 0.99% in the stock market. I'd pay the $450/month and invest the rest in a (relatively conservative) stock market fund, making monthly withdrawals for the car note.",
"title": ""
},
{
"docid": "bb37162da4e4d82aed3bff267be34461",
"text": "If (and only if) there is a zero interest installment plan available, technically the only uncontrollable risk is that there will likely be a hard inquiry on your credit report which may or may not also have a corresponding debt obligation attached to it. (Personally, I recently signed up for one such plan with Google and I had a hard inquiry but no debt added to my report). The other risks are that 1) your monthly payment goes up, so if you are living on a tight budget the added payment might make it harder to meet your next bill, and 2) you could miss a payment which generally triggers interest to accrue retroactively at a high rate, and in some cases could be grounds for immediate repayment. The pro / reward of these plans is that you have to spend less of your capital upfront, which you may be able to use for other purposes (presumably with a higher net present value than purchasing the item you're considering outright). A larger example would be purchasing a new car. You want to buy a $50k car and you have the cash on hand to pay in full, but you are being offered 0% interest for 36 months. You may be more inclined to take a loan at 0% with 0 down payment and invest your money in another vehicle (no pun intended) that offers you a decent rate of return and you will come out ahead in the end. Of course, this example works in a perfect world where you can get such an offer, there are no extra fees available, you aren't worrying about your debt-to-income ratio in preparation for a big purchase like a house, there isn't a higher insurance premium to consider, etc. In short, 0% financing, be it for a phone or a car, can be a nice perk for the informed consumer who is not using the financing as a way to purchase outside their financial means, but it is offered by companies as a way to make people buy things they normally would not and, hopefully, capitalize on people missing payments in order to reap the sweet 20%+ interest rates generally seen with these offers. In your specific situation with the phone, you should consider if you get a discount on your monthly plan for purchasing outright, or if you can get the phone subsidized if you sign a contract (and you know you like your provider enough to stay for its duration). If the monthly plan rate stays the same and you're looking at either $500 now or $500 over 24 months and you don't mind a hard inquiry, there's not much of compelling reason to pass on the financing and hold on to your $500.",
"title": ""
},
{
"docid": "c90f2d1813c8419a415b3cfaf3100007",
"text": "If you are very sure, say 90%, that you'll pay the zero percent card off before paying interest, that would be my choice. Less certainty than that, I think the 6.8% over a longer term is less of a cash flow issue, and you can still pay it in full upon getting the job bonus.",
"title": ""
},
{
"docid": "0579f10d1ce90a4cde198f805773cf5a",
"text": "First of all, congratulations on paying off $40k in debt in one year. Mathematically, you'd be better off making the standard car loan payments and putting your extra money toward the student loan. However, there are a few other things that you might want to consider. Over the last year, you've knocked out a whole bunch of different debts. Feels pretty good, doesn't it? At your current rate, you could knock out your new car loan in 6 months. Then you'd only have one debt left. If it sounds to you like it would be nice to only have one debt left, then it might be worth the mathematical disadvantage you would get by paying off the car early instead of putting the money toward the last student loan. The car loan is 0%, but if you are late on a single payment, they will take that opportunity to raise your interest rate to something probably higher than the interest rate of your student loan. For this reason, you may decide it is not worth the hassle, and you'd rather just eliminate the car loan as quickly as possible. Either choice is fine, in my opinion, as long as you have a purpose behind the choice and you are committed to eliminating both debts as quickly as possible. As an aside, it is important to remember that even a 0% loan is not really free money, and needs to be paid back. You know this, of course, but sometimes you see a 0% loan advertized and it feels like free money. It's not. You have probably already paid for the loan by forfeiting a rebate. So although, at this point having already taken this loan and paying for it, you will come out ahead by dragging out your car loan for the full term, in the future do not think that you can make money by buying something at 0% interest.",
"title": ""
},
{
"docid": "3c5a9302dc720a0ce0b07887b5d7b754",
"text": "\"Making extra principal payments will reduce the term of your loan. I wouldn't sign up for a biweekly schedule, just do it yourself so you have more flexibility. A simple spreadsheet will allow you to play \"\"What if?\"\" and make it clear that extra principal payments are most effective early in the term of the loan. My wife and I paid off our home in less than 10 years with this approach. Some will say that the opportunity costs of not using that money for something else outweighs the gains. I would say that not having a mortgage has a positive impact on your cash flow and your assets (you own the home), which combine to create more opportunity, not less. That being said, It should be obvious that paying off higher interest debt first is the priority, (Paying off a zero percent interest car loan early is just foolish)\"",
"title": ""
},
{
"docid": "442f6360ae50ff4b798ebf87fc1120c4",
"text": "The first thing is to look at the monthly cost of the loan. The one from the company is interest free. While it is unlikely that a bank will have a zero percent loan, you will also have to look at what the seller will offer. The next thing to look at is the term of the loan. When comparing two loans with the same interest rate the shorter term loan will cost more per month. Many times when an auto dealer offers a zero percent loan they also have a very short term: 12-24 months; Many people can't afford the monthly payments with that short a term. You said you could afford to save the other $2000 in about six months. That means you could set aside $333 a month to do it in six months. If the loan from the employer has a term longer than 6 months you should be able to afford the loan. Keep in mind that the employer will probably be taking the money right out of your paychecks. You do have to look at the conditions attached to the loan. What does accepting the loan do to your employment situation? If you leave early do they want you to pay it back in 30 days, or will they take the rest from the final paycheck, or do you have longer? You do have to look at the term of the loan, and see if you can pay it off early. If they require a 12 month term can you end it earlier, or change the monthly payment to end it early? The reason why you care about the term is that if the term is 24 months then after a year you still owe them $1000; which if you have to pay back immediately if you quit, it may make it hard for you to leave the company. A minor note: They probably are not reporting it to the credit reporting agencies therefore it wont help your credit score. This is probably not a big issue since you are considering going without a loan.",
"title": ""
},
{
"docid": "05f65e79d17fa5283838c5212626126e",
"text": "so this is a loan for a house? a loan on a house? a new mortgage? you shouldn't just get a loan for the hell of it any time. interests rates are low because the yields on US treasuries have been pushed closer to zero, and thats pretty much that. the risk is on the bank that approves the loan, and not you. (your ability to repay should be truthful, but your payments are smaller because the interest is so low)",
"title": ""
}
] |
fiqa
|
09b2ecc55cb521c90cf545576b88580c
|
2 401k's and a SEP-IRA
|
[
{
"docid": "0980ca2d1a7e51b55220dd25da641b4f",
"text": "question #2 - yes, 25% of your 1099 income. Good idea. It adds up quickly and is a good way to reduce taxable income.",
"title": ""
},
{
"docid": "d6456689474126d52bc57b6a42210921",
"text": "Please note that if you are self employed, then the profit sharing limit for both the SEP and Solo 401(k) is 20% of compensation, not 25%. There is no need for a SEP-IRA in this case. In addition to the 401(k) at work, you have a solo-401(k) for your consulting business. You can contribute $18,000 on the employee side across the two 401(k) plans however you wish. You can also contribute profit sharing up to 20% of compensation in your solo 401(k) plan. However, the profit sharing limit aggregates across all plans for your consulting business. If you max that out in your solo 401(k), then you cannot contribute to the SEP IRA. In other words, the solo 401(k) dominates the SEP IRA in terms of contributions and shares a limit on the profit-sharing contribution. If you have a solo 401(k), there is never a reason to have a SEP for the same company. Example reference: Can I Contribute to a solo 401(k) and SEP for the same company?",
"title": ""
}
] |
[
{
"docid": "1286da8a6b6708506c4ec2759ac83219",
"text": "\"While I can appreciate you're coming from a strongly held philosophy, I disagree strongly with it. I do not have any 401k or IRA I don't like that you need to rely on government and keep the money there forever. A 401k and an IRA allows you to work within the IRS rules to allow your gains to grow tax free. Additionally, traditional 401ks and IRAs allow you to deduct income from your taxes, meaning you pay less taxes. Missing out on these benefits because the rules that established them were created by the IRS is very very misguided. Do you refuse to drive a car because you philosophically disagree with speed limits? I am planning on spending 20k on a new car (paying cash) Paying cash for a new car when you can very likely finance it for under 2% means you are loosing the opportunity to invest that money which can conservatively expect 4% returns annually if invested. Additionally, using dealership financing can often be additional leverage to negotiate a lower purchase price. If for some reason, you have bad credit or are unable to secure a loan for under 4%, paying cash might be reasonable. The best thing you have going for you is your low monthly expenses. That is commendable. If early retirement is your goal, you should consider housing expenses as a part of your overall plan, but I would strongly suggest you start investing that money in stocks instead of a single house, especially when you can rent for such a low rate. A 3 fund portfolio is a classic and simple way to get a diverse portfolio that should see returns in good years and stability in bad years. You can read more about them here: http://www.bogleheads.org/wiki/Three-fund_portfolio You should never invest in individual stocks. People make lots of money to professionally guess what stocks will do better than others, and they are still very often wrong. You should purchase what are sometimes called \"\"stocks\"\" but are really very large funds that contain an assortment of stocks blended together. You should also purchase \"\"bonds\"\", which again are not individual bonds, but a blend of the entire bond market. If you want to be very aggressive in your portfolio, go with 100-80% Stocks, the remainder in Bonds. If you are nearing retirement, you should be the inverse, 100-80% bonds, the remainder stocks. The rule of thumb is that you need 25 times your yearly expenses (including taxes, but minus pension or social security income) invested before you can retire. Since you'll be retiring before age 65, you wont be getting social security, and will need to provide your own health insurance.\"",
"title": ""
},
{
"docid": "88007f153863a929907440c785d151b1",
"text": "\"The limit on SEP IRA is 25%, not 20%. If you're self-employed (filing on Schedule C), then it's taken on net earning, which in your example would be 25% of $90,000. (https://www.irs.gov/retirement-plans/retirement-plans-for-self-employed-people) JoeTaxpayer is correct as regards the 401(k) limits. The elective deferrals are per person - That's a cap in sum across multiple plans and across both traditional and Roth if you have those. In general, it's actually across other retirement plan types too - See below. If you're self-employed and set-up a 401(k) for your own business, the elective deferral is still aggregated with any other 401(k) plans in which you participate that year, but you can still make the employer contribution on your own plan. This IRS page is current a pretty good one on this topic: https://www.irs.gov/retirement-plans/one-participant-401k-plans Key quotes that are relevant: The business owner wears two hats in a 401(k) plan: employee and employer. Contributions can be made to the plan in both capacities. The owner can contribute both: •Elective deferrals up to 100% of compensation (“earned income” in the case of a self-employed individual) up to the annual contribution limit: ◦$18,000 in 2015 and 2016, or $24,000 in 2015 and 2016 if age 50 or over; plus •Employer nonelective contributions up to: ◦25% of compensation as defined by the plan, or ◦for self-employed individuals, see discussion below It continues with this example: The amount you can defer (including pre-tax and Roth contributions) to all your plans (not including 457(b) plans) is $18,000 in 2015 and 2016. Although a plan's terms may place lower limits on contributions, the total amount allowed under the tax law doesn’t depend on how many plans you belong to or who sponsors those plans. EXAMPLE Ben, age 51, earned $50,000 in W-2 wages from his S Corporation in 2015. He deferred $18,000 in regular elective deferrals plus $6,000 in catch-up contributions to the 401(k) plan. His business contributed 25% of his compensation to the plan, $12,500. Total contributions to the plan for 2015 were $36,500. This is the maximum that can be contributed to the plan for Ben for 2015. A business owner who is also employed by a second company and participating in its 401(k) plan should bear in mind that his limits on elective deferrals are by person, not by plan. He must consider the limit for all elective deferrals he makes during a year. Notice in the example that Ben contributed more that than his elective limit in total (his was $24,000 in the example because he was old enough for the $6,000 catch-up in addition to the $18,000 that applies to everyone else). He did this by declaring an employer contribution of $12,500, which was limited by his compensation but not by any of his elective contributions. Beyond the 401(k), keep in mind that elective contributions are capped across different types of retirement plans as well, so if you have a SEP IRA and a solo 401(k), your total contributions across those plans are also capped. That's also mentioned in the example. Now to the extent that you're considering different types of plans, that's a whole question in itself - One that might be worth consulting a dedicated tax advisor. A few things to consider (not extensive list): As for payroll / self-employment tax: Looks like you will end up paying Medicare, including the new \"\"Additional Medicare\"\" tax that came with the ACA, but not SS: If you have wages, as well as self-employment earnings, the tax on your wages is paid first. But this rule only applies if your total earnings are more than $118,500. For example, if you will have $30,000 in wages and $40,000 in selfemployment income in 2016, you will pay the appropriate Social Security taxes on both your wages and business earnings. In 2016, however, if your wages are $78,000, and you have $40,700 in net earnings from a business, you don’t pay dual Social Security taxes on earnings more than $118,500. Your employer will withhold 7.65 percent in Social Security and Medicare taxes on your $78,000 in earnings. You must pay 15.3 percent in Social Security and Medicare taxes on your first $40,500 in self-employment earnings and 2.9 percent in Medicare tax on the remaining $200 in net earnings. https://www.ssa.gov/pubs/EN-05-10022.pdf Other good IRS resources:\"",
"title": ""
},
{
"docid": "7ef2977f65d04dc67aaf2fec39004624",
"text": "I looked a bit at the first 3, .24% expense. There's a direction to not discuss individual investments here, so the rest of my answer will need to lean generic. I see you have 5 funds. I'm surmising it's an attempt at 'diversifying'. I'll ask you - what do these five, when combined, offer that a straight S&P 500 index (or some flavor of extended market) doesn't? I've gone through the exercise of looking at portfolios with a dozen funds and found overlap so great that 2 or 3 funds would have been sufficient. There are S&P funds that are as low as .05%. this difference may not seem like much, but it adds over time. To your last point, I'd consider a Solo 401(k) as you're self employed. One that offers the Roth option if you are in the marginal 15% bracket.",
"title": ""
},
{
"docid": "afb5b4fbf1539e64167c69d8252f847b",
"text": "Use a compound interest calculator to project the difference with ETFs in the S&P 500 (or the asset mix of your choosing), and subtract the expected pension amount. If the difference is positive, or around around even, I would do it to avoid the risk of company failure.",
"title": ""
},
{
"docid": "1e55b9e38a7bc2e8300c9d6d1f3214e7",
"text": "As I commented, there's confusion on withholding. The 20% pertains to 401(k) accounts, not IRAs.",
"title": ""
},
{
"docid": "5a2cb7d76c579655e90db636cdc2c738",
"text": "There's no one answer. You need to weigh the fees and quality of investment options on the one side against the slowly vesting employer contribution and tax benefits of 401k contributions in excess of IRA limits.",
"title": ""
},
{
"docid": "6167f63bc9252ad2217dda31cefa0496",
"text": "\"I separate them out, simply because they're for different purposes, with different goals and time-frames, and combining them may mask hidden problems in either the retirement account or the regular account. Consider an example: A young investor has been working on their retirement planning for a few years now, and has a modest amount of retirement savings (say $15,000) allocated carefully according to one of the usually recommended schemes. A majority exposure to large cap U.S. stocks, with smaller exposures to small cap, international and bond markets. Years before however, they mad an essentially emotional investment in a struggling manufacturer of niche personal computers, which then enjoyed something of a renaissance and a staggering growth in shareholder value. Lets say their current holdings in this company now represent $50,000. Combining them, their portfolio is dominated by large cap U.S. equities to such an extent that the only way to rebalance their portfolio is to pour money into bonds and the international market for years on end. This utterly changes the risk profile of their retirement account. At the same time, if we switch the account balances, the investor might be reassured that their asset allocation is fine and diversified, even though the assets they have access to before retirement are entirely in a single risky stock. In neither case is the investor well served by combining their funds when figuring out their allocation - especially as the \"\"goal\"\" allocations may very well be different.\"",
"title": ""
},
{
"docid": "3f19942416d82aad508dc98501458cb1",
"text": "Your assumption, the need for two distinct accounts is correct. Are you sure that the deposit was made to the same account? Since a 401(k) doesn't really have an account number, just your social security number, it may be they report it to you as though it were aggregated, but it's improper for it to be so. With respect (I mean this literally, I have the utmost respect) to littleadv's answer - the aggregation of the two accounts cannot be legitimate. If I wish to invest my Roth side into investments that grow far greater than the Traditional side, the mixing of accounts destroys this possibility. Something is either wrong, or misunderstood.",
"title": ""
},
{
"docid": "24c4ccec7c561cd627638fa08b200dcf",
"text": "You can contribute to both but the total contribution is capped: More than one plan. If you contribute to a defined contribution plan (defined in chapter 4), annual additions to an account are limited to the lesser of $53,000 or 100% of the participant's compensation. When you figure this limit, you must add your contributions to all defined contribution plans maintained by you. Because a SEP is considered a defined contribution plan for this limit, your contributions to a SEP must be added to your contributions to other defined contribution plans you maintain. Source: https://www.irs.gov/pub/irs-pdf/p560.pdf on page 6.",
"title": ""
},
{
"docid": "4b24c9a7d92256bd10cb736a31dce103",
"text": "I'm concerned about your extreme focus on Roth. In today's dollars it would take nearly $2 million to produce enough of an annual withdrawal to fill the 15% bracket. If you are able to fund both 401(k)s and 2 IRAs (total $43K) you're clearly in the 25% bracket or higher. If you retire 100% with Roth savings, and little to no pretax money, you miss the opportunity to receive withdrawals at zero(1), 10, and 15% brackets. Missing this isn't much better than having too much pretax and being in a higher bracket at retirement. One factor often overlooked is that few people manage a working life with no gaps. During times when income is lower for whatever reason, it's a great time to convert a bit to Roth. (1)by zero bracket, I mean the combined standard deduction and exemptions. For two people this is currently (for 2017) $20,800 total. And it goes up a bit most years.",
"title": ""
},
{
"docid": "db335a248bc9fc882e92419a5ed646ff",
"text": "I am assuming that you are talking about rolling a 401k over to an IRA since if you were rolling over to another 401k you probably would not have a choice as to where it would be. Ameriprise will generally have lower fees than JPMorgan. (Probably why your husband's mutual fund is with Ameriprise.) Additionally having both accounts with Ameriprise will better allow them to assist you with your long term financial planning. For these two reasons I would recommend rolling your account over to Ameriprise. No, I do not work for Ameriprise",
"title": ""
},
{
"docid": "158a63615addb9a4abf5b13f930e9c11",
"text": "It is great that you came up with a plan to own a rental home, free and clear, and also move up in home. It is also really good of you to recognize that curtailing spending has a profound effect on your net worth, many people fail to acknowledge that factoid and prefer to instead blame things outside their control. Good work there. Here are some items of your plan that I have comments on. 11mo by aggressively curtailing elective spending How does your spouse feel about this? They have to be on board, but it is such a short time frame this is very doable. cashing out all corporate stock, This will probably trigger capital gains. You have to be prepared to pay the tax man, but this is a good source of cash for your plan. You also have to have an additional amount that will likely be due next April 15th. redirecting all contributions to my current non-matched R401(k) This is fine as well because of the short time frame. withdrawing the principal from a Roth IRA This I kind of hate. We are so limited in money that we can put into tax favored plans, that taking money out bothers me. Also it is that much more difficult to save in a ROTH because of the sting of taxes. I would not do this, but would favor instead to take a few extra months to make your plan happen. buy home #2 How are you going to have a down payment for home #2? Is your intention to pay off home and save a while, then purchase home #2? I would do anything to avoid PMI. Besides I would take some time to live in a paid for house. Overall I would grade your plan a B. If take a bit longer, and remove the withdrawing from the ROTH, it then becomes an A-. With a good explanation of how you come up with the down payment for house 2, you could easily move to an A+.",
"title": ""
},
{
"docid": "1688f9cf850d8748e0e64f5e5f7b0f5a",
"text": "If you were looking to maximize your ability to save in a qualified plan, why not setup a 401K plan in Company A and keep the SEP in B? Setup the 401K in A such that any employee can contribute 100% of their salary. Then take a salary for around 19K/year (assuming under age 50), so you can contribute and have enough to cover SS taxes. Then continue to move dividends to Company A, and continue the SEP in B. This way if you are below age 50, you can contribute 54K (SEP limit) + 18K (IRA limit) + 5500 (ROTH income dependent) to a qualified plan.",
"title": ""
},
{
"docid": "7c4e586ff0130e9e3fbab06b0e51fd03",
"text": "Post-tax (i.e. non-retirement account) investing is nothing to ignore. You don't mention a spouse, so for a start, you still have the $5500 to put in an IRA. The remaining investment funds will earn dividends, if any, at a tax preferred rate, and then the gain on sale will be taxed at 15% if the code doesn't change again. The gains accumulate tax deferred, and you control the timing of the sale. With a 401(k) all withdrawal are taxable as income. In your case, just the gain is taxed at a potential long term cap gain rate. Hopefully the new job pays more than the old one and the loss of 401(k) is compensated.",
"title": ""
},
{
"docid": "c7efc2dd021ddf9a2a03b9622a11cf2a",
"text": "I have managed two IRA accounts; one I inherited from my wife's 401K and my own's 457B. I managed actively my wife's 401 at Tradestation which doesn't restrict on Options except level 5 as naked puts and calls. I moved half of my 457B funds to TDAmeritrade, the only broker authorized by my employer, to open a Self Directed account. However, my 457 plan disallows me from using a Cash-secured Puts, only Covered Calls. For those who does not know investing, I resent the contention that participants to these IRAs should not be messing around with their IRA funds. For years, I left my 401k/457B funds with my current fund custodian, Great West Financial. I checked it's current values once or twice a year. These last years, the market dived in the last 2 quarters of 2015 and another dive early January and February of 2016. I lost a total of $40K leaving my portfolio with my current custodian choosing all 30 products they offer, 90% of them are ETFs and the rest are bonds. If you don't know investing, better leave it with the pros - right? But no one can predict the future of the market. Even the pros are at the mercy of the market. So, I you know how to invest and choose your stocks, I don't think your plan administrator has to limit you on how you manage your funds. For example, if you are not allowed to place a Cash-Secured Puts and you just Buy the stocks or EFT at market or even limit order, you buy the securities at their market value. If you sell a Cash-secured puts against the stocks/ETF you are interested in buying, you will receive a credit in fraction of a dollar in a specific time frame. In average, your cost to owning a stock/ETF is lesser if you buy it at market or even a limit order. Most of the participants of the IRA funds rely too much on their portfolio manager because they don't know how to manage. If you try to educate yourself at a minimum, you will have a good understanding of how your IRA funds are tied up to the market. If you know how to trade in bear market compared to bull market, then you are good at managing your investments. When I started contributing to my employer's deferred comp account (457B) as a public employee, I have no idea of how my portfolio works. Year after year as I looked at my investment, I was happy because it continued to grow. Without scrutinizing how much it grew yearly, and my regular payroll contribution, I am happy even it only grew 2% per year. And at this age that I am ready to retire at 60, I started taking investment classes and attended pre-retirement seminars. Then I knew that it was not totally a good decision to leave your retirement funds in the hands of the portfolio manager since they don't really care if it tanked out on some years as long at overall it grew to a meager 1%-4% because they managers are pretty conservative on picking the equities they invest. You can generalize that maybe 90% of IRA investors don't know about investing and have poor decision making actions which securities/ETF to buy and hold. For those who would like to remain as one, that is fine. But for those who spent time and money to study and know how to invest, I don't think the plan manager can limit the participants ability to manage their own portfolio especially if the funds have no matching from the employer like mine. All I can say to all who have IRA or any retirement accounts, educate yourself early because if you leave it all to your portfolio managers, you lost a lot. Don't believe much in what those commercial fund managers also show in their presentation just to move your funds for them to manage. Be proactive. If you start learning how to invest now when you are young, JUST DO IT!",
"title": ""
}
] |
fiqa
|
f5ba8dfbf06e01b3da37a44dd2fd8926
|
In double entry book-keeping, how should I record writing of a check?
|
[
{
"docid": "e5bd30df315f45d3433c7b6140119124",
"text": "\"I'm no accounting expert, but I've never heard of anyone using a separate account to track outstanding checks. Instead, the software I use (GnuCash) uses a \"\"reconciled\"\" flag on each transaction. This has 3 states: n: new transaction (the bank doesn't know about it yet), c: cleared transaction (the bank deducted the money), and y: reconciled transaction (the transaction has appeared on a bank statement). The account status line includes a Cleared balance (which should be how much is in your bank account right now), a Reconciled balance (which is how much your last bank statement said you had), and a Present balance (which is how much you'll have after your outstanding checks clear). I believe most accounting packages have a similar feature.\"",
"title": ""
},
{
"docid": "15b34410d270f04021e038885174341e",
"text": "I have no idea what the traditional accounting way of dealing with this might be; but does your accounts package has the concept of subaccounts within a bank account? If so, to me it would make sense that when a cheque is written, you move money in the accounts package from the bank account to a subaccount named 'Cheques Written'; then when it is cashed, move money from that subaccount to the supplier. Then from a reporting perspective, when you want a report that will correspond to your actual bank statement, run a report that includes the subacconut; when you want a report that tells you how much you have available to spend, rune a report that excludes the subaccount.",
"title": ""
}
] |
[
{
"docid": "ab627267ac82d2b9f720aabab7c03073",
"text": "I would use the withdrawal date to record, as it represents you no longer have these funds in your account whether you have written a check and/or transferred money you should count the funds as no longer being in your account.",
"title": ""
},
{
"docid": "bf7662a065b8944e12c197ad5175fda5",
"text": "\"A few practical thoughts: A practical thing that helps me immensely not to loose important paperwork (such as bank statements, bills, payroll statement, all those statements you need for filing tax return, ...) is: In addition to the folder (Aktenordner) where the statements ultimately need to go I use a Hängeregistratur. There are also standing instead of hanging varieties of the same idea (may be less expensive if you buy them new - I got most of mine used): you have easy-to-add-to folders where you can just throw in e.g. the bank statement when it arrives. This way I give the statement a preliminary scan for anything that is obviously grossly wrong and throw it into the respective folder (Hängetasche). Every once in a while I take care of all my book-keeping, punch the statements, file them in the Aktenordner and enter them into the software. I used to hate and never do the filing when I tried to use Aktenordner only. I recently learned that it is well known that Aktenordner and Schnellhefter are very time consuming if you have paperwork arriving one sheet at a time. I've tried different accounting software (being somewhat on the nerdy side, I use gnucash), including some phone apps. Personally, I didn't like the phone apps I tried - IMHO it takes too much time to enter things, so I tend to forget it. I'm much better at asking for a sales receipt (Kassenzettel) everywhere and sticking them into a calendar at home (I also note cash payments for which I don't have a receipt as far as I recall them - the forgotten ones = difference ends up in category \"\"hobby\"\" as they are mostly the beer or coke after sports). I was also to impatient for the cloud/online solutions I tried (I use one for business, as there the archiving is guaranteed to be according to the legal requirements - but it really takes far more time than entering the records in gnucash).\"",
"title": ""
},
{
"docid": "accc04f0a365fcdbee6fc05249bea151",
"text": "A tax liability account is a common thing. In my own books I track US-based social insurance (Medicare and Social Security) using such an account. At the time I pay an employee, a tax liability is incurred, increasing my tax liability account; at the same time, on the other end of the double-entry, I increase a tax expense account. Notably, though, the US IRS does not necessarily require that the tax is paid at the time it is incurred. In my case I incur a liability twice a month, but I only have to pay the taxes quarterly. So, between the time of incurring and the time of remitting/paying, the amount is held in the tax liability account. At the time that I remit payment to the IRS, the transaction will decrease both my checking account and also, on the other end of the double-entry, my liability account. To answer your question in short, use an expense account for your other-side-account.",
"title": ""
},
{
"docid": "aa1f9c1214d7c33fb2a1e73c46fcb482",
"text": "\"You don't. No one uses vanilla double entry accounting software for \"\"Held-For-Trading Security\"\". Your broker or trading software is responsible for providing month-end statement of changes. You use \"\"Mark To Market\"\" valuation at the end of each month. For example, if your cash position is -$5000 and stock position is +$10000, all you do is write-up/down the account value to $5000. There should be no sub-accounts for your \"\"Investment\"\" account in GNUCash. So at the end of the month, there would be the following entries:\"",
"title": ""
},
{
"docid": "63de0f546b4e4223a4300761fc8c2f5e",
"text": "If you open an account, you sign a contract, of which you get a copy. That ultimately proves that the account exists. As for the money in an account: Double-entry accounting makes it more or less impossible for that to be simply wrong. An account balance is not just a number; it's a sum of transactions, each of which has a corresponding entry in another account where the money came from or went to. What is possible (but extremely rare given the effort banks go to in order to ensure the correctness of their systems) is for transactions to get lost or stuck (because they often have multiple stages), or to have a wrong source or target, or amount. If a transaction gets lost, it's the same as if it never happened - the money is still in the sender's account and you have to convince them to send it to you. If a transaction got stuck, i.e. money was sent but did not arrive, the sender can request their bank to investigate what happened and fix the problem. If an erroneous transaction shows up on your account, you can do the same. Double-entry accounting ensures that this is always possible.",
"title": ""
},
{
"docid": "60e5e50342d8e0101f8d1103e5d885d2",
"text": "\"Perhaps you can track your VAT amounts in a Liability account. Using a tax liability account is a common thing in accounting. To do this, when you receive money, split the transaction such that your actual revenue (which you will keep after VAT remittance) goes into an Asset account, and the amount you will eventually have to pay back to the state goes into a Liability account. Later, when you pay the VAT back to the state, your transaction will effectively \"\"pay back\"\" the liability, with one end of your double-entry decreasing the funds in your checking account, and the other end decreasing the funds in your tax liability account. Having said that, I've found that there are many shortcomings in the Cash Flow report, and I'm not sure that using a tax liability account (which I think is the Right Thing to do) will necessarily solve this problem for you...\"",
"title": ""
},
{
"docid": "c4b2e9f2cf09bbc113f376aea4b96bfb",
"text": "just FYI i have a simple account where you can generate a check to a person and they will send it via regular mail. this is not getting away from check but it makes process simpler of not writing a check and sticking a stamp and then putting it in a mailbox",
"title": ""
},
{
"docid": "e3cd89c0d64142d65db6089237dac981",
"text": "How do I account for this in the bookkeeping? Here is an example below: This is how you would accurately depict contributions made by an owner for a business. If you would want to remove money from your company, or pay yourself back, this would be called withdrawals. It would be the inverse of the first journal entry with cash on the credit side and withdrawals on the debited side (as it is an expense). You and your business are not the same thing. You are two different entities. This is why you are taxed as two different entities. When you (the owner) make contributions, it is considered to be the cash of the business. From here you will make these expenses against the business and not yourself. Good luck,",
"title": ""
},
{
"docid": "5bb6d5c5b9d7ef1d33fcf8f7c07e2e5a",
"text": "For the first case to occur, you need to have an agreement in place with the bank, this is called overdraft protection. It's done at a cost, but cheaper than the potential series of bounce fees. I've never heard of the second choice, partial payment. That's not to say that it's not possible. The payment not made is called a bounced check, you and the recipient will be harmed a fee. I believe it's a felony to write bad checks. Good to not write a check unless there's a positive balance taking that check into account. As Dilip suggests, ask your bank.",
"title": ""
},
{
"docid": "02a058752d659ec81be42f03e06b6ccb",
"text": "Savings accounts have lower fees. If you don't anticipate doing many transactions per month, e.g. three or fewer withdrawals, then I would suggest a savings account rather than a checking account. A joint account that requires both account holder signatures to make withdrawals will probably require both account holders' signature endorsements, in order to make deposits. For example, if you are issued a tax refund by the U.S. Treasury, or any check that is payable to both parties, you will only be able to deposit that check in a joint account that has both persons as signatories. There can be complications due to multi-party account ownership if cashing versus depositing a joint check and account tax ID number. When you open the account, you will need to specify what your wishes are, regarding whether both parties or either party can make deposits and withdrawals. Also, at least one party will need to be present, with appropriate identification (probably tax ID or Social Security number), when opening the account. If the account has three or more owners, you might be required to open a business or commercial account, rather than a consumer account. This would be due to the extra expense of administering an account with more than two signatories. After the questioner specified interest North Carolina in the comments, I found that the North Carolina general banking statutes have specific rules for joint accounts: Any two or more persons may establish a deposit account... The deposit account and any balance shall be as joint tenants... Unless the persons establishing the account have agreed with the bank that withdrawals require more than one signature, payment by the bank to, or on the order of (either person on) the account satisfys the bank's obligation I looked for different banks in North Carolina. I found joint account terms similar to this in PDF file format, everywhere, Joint Account: If an item is drawn so that it is unclear whether one payee’s endorsement or two is required, only one endorsement will be required and the Bank shall not be liable for any loss incurred by the maker as a result of there being only one endorsement. also Joint accounts are owned by you individually or jointly with others. All of the funds in a joint account may be used to repay the debts of any co-owner, whether they are owed individually, by a co-owner, jointly with other co-owners, or jointly with other persons or entities having no interest in your account. You will need to tell the bank specifically what permissions you want for your joint account, as it is between you and your bank, in North Carolina.",
"title": ""
},
{
"docid": "c1e1220560ce3d4ece5ce7f64ee937e5",
"text": "I still use checks to pay rent and occasionally some bills/liabilities. That said, I did notice an (elderly) lady paying by check at the supermarket a while ago. So is it really common to get a paycheck in the sense that you get a piece of paper? Yes and no. There are some people that opt for the physical paycheck. Even if they do not, there is a pay stub which serves as a record of it. My last employer went to online pay stubs and a bunch of us opted out, sticking with the good old paper in an envelope. We sure were glad of that when there were technical issues and security concerns with the online service.",
"title": ""
},
{
"docid": "a4caf6fa7e8a372ad3dc873529deed51",
"text": "Many banks will allow you to open multiple accounts. Create a secondary checking account that has no automatic withdrawals and doesn't allow overdraft. This is the account you'll use for you discretionary spending. Get an account with a debit card and always use it as a debit card (never as a credit card, even if it allows that). Your employer may allow you to split your direct deposit so that a certain amount of money goes into this account each month. When it gets to $0, you have to stop spending. It will automatically refill when you get your paycheck.",
"title": ""
},
{
"docid": "e4f3e150048fcbe3c225deaf069e60db",
"text": "\"Fund a way to make mistakes with someone else's money. It is the best business advice I got as a young person. You learn so much more by failure and f'up than you do by success and if you do it with others money then it doesn't really hurt you. The other thing I wish I had understood earlier was basic book keeping and financial analysis. At 33 I'm just now figuring out basic thinga like how a P&L and Balance sheet work together and how to do a cash forecast. As my mentor said: \"\"Double entry accounting has been used in business since Jesus. There's a reason. \"\"\"",
"title": ""
},
{
"docid": "0b9699c5ad5eb2bc97be861a8d1268ed",
"text": "I am assuming that you are referring to Personal Checks since you do not have a business account. Generally, your full name is the minimal requirement that is needed on the top left of each check. It is best if this information is pre-printed. In fact, some businesses and banks will not honor a check if your full name is handwritten on the check. This is for obvious reasons such as fraud.",
"title": ""
},
{
"docid": "65c6fd60a3f05b5dec918ef145955bb7",
"text": "\"When asking about rate of return it is imperative to specify the time period. Average over all time? Average over the last 10 years? I've heard a good rule of thumb is 8-10% on average for all stocks over all time. That may be overstated now given the current economic climate. You can also look up fund sheets/fact sheets for major index funds. Just Google \"\"SPY fund sheet\"\" or \"\"SPY fact sheet\"\". It will tell you the annualized % return over a few different periods.\"",
"title": ""
}
] |
fiqa
|
0dcd3353333d8d32a4ad4d9423167e8c
|
How can I legally and efficiently help my girlfriend build equity by helping with a mortgage?
|
[
{
"docid": "ff94a74f6bff825a00d09b2a42624887",
"text": "\"Have her chip in for the regular expenses, utilities, food, etc., and a bit for \"\"rent.\"\" Then tell her to be sure to deposit to her retirement account, preferably a matched 401(k). It's admirable to want her to build 'equity' but it's pretty convoluted. You can't actually give her ownership, and in the event you break up (I know you won't, but this is to help other readers) you'll have to pay her back a lump sum when she moves out. That might not be so easy.\"",
"title": ""
},
{
"docid": "5379e3edcfed336432b98afdd0b7da9e",
"text": "Equity means having ownership, and I think that's a REALLY bad idea in the scenario that you described. If you stay together, there's really no upside to either of you in this scheme. If you break-up then you'll have a terrible mess, especially if the break-up goes badly. If she's really building equity, you're going to be faced with several hard questions: If this went bad at the end, it might be worse than a divorce in some sense since at least in the divorce you have established law to sort out the issues. You'll be on your own here without a formal contract. (Marriage being a special case of a contract for our purposes here.) If she wants to share costs (which seems perfectly fair) then agree to rent and a split on utilities. If you really insist on going down the path that you described, I think that you'll need some sort of contract, which probably involves a lawyer. Anything short of that could not be considered having equity at all and will be completely unenforceable in the event of a bad break-up. (There is some notion of a verbal contract, but that's very hard to prove and subject to misunderstanding and misremembering.) Aside from all of these potential problems in event of a break-up, you would probably also be violating the terms of your mortgage, if you have one. From the bank's perspective, you are selling the property that is the collateral for that loan, which you're almost surely not allowed to do.",
"title": ""
},
{
"docid": "51798e3f0e96fef8b3bc3866488c1144",
"text": "There is no simple, legally reasonable, way for her to build equity by helping out with your mortgage, without her having a claim to your mortgage. The only 'equitable' thing she can do is rent from you. If you want her to be building equity, have her start and fund a brokerage account for herself. If you have an affinity for real estate, have her buy REITs in said investment account.",
"title": ""
},
{
"docid": "be602c0697c53175e949a5b962a5ab3c",
"text": "I agree with everyone who has simply told you 'Dont' and 'You can't' and add a few more considerations that you don't want to deal with: What you want to do is admirable but very complicated from a financial and legal perspective. If this is really a route that you want to go down you should give up on the 'simple' and consider hiring a lawyer.",
"title": ""
},
{
"docid": "c4e4d18eeb2f79ae8f96b4938e906628",
"text": "\"all the other answers are spot on, but look at it this way. really all you mean when you say \"\"building equity\"\" is \"\"accumulating wealth\"\". if that is the goal, then having her invest the money in a brokerage (e.g. ira) account makes a lot more sense. if you can't afford the apartment without her, then you can't afford to pay out her portion of the equity in the future. which means she is not building equity, you are just borrowing money from her. the safest and simplest thing for you to do is to agree on a number that does not include \"\"equity\"\". to be really safe, you might want to both sign something in writing that says she will never have an equity stake unless you agree to it in writing. it doesn't have to be anything fancy. in fact, the shorter the better. i am thinking about 3 sentences should do the trick. if you feel you absolutely have to borrow money from her on a monthly basis to afford your mortgage, then i recommend you make it an unsecured loan. just be sure to specify the interest rate (even if it is zero), and the repayment terms (and ideally, late payment penalties). again, nothing fancy, 10 sentences maybe. e.g. \"\"john doe will borrow x$ per month, until jane doe vacates the apartment. after such time, john doe will begin repaying the loan at y$ per month....\"\" that said, borrowing money from friends and family almost never turns out well. at the very least, you need to save up a few months of rent so that if you do break up, you have time to find another roommate. disclaimer: i do not have any state-issued professional licenses.\"",
"title": ""
},
{
"docid": "a4eda79a77fa08f774a90853443ff469",
"text": "I'm glad that you feel like being fair and equitable to your party. Other answerers are, of course, correct that being fair and equitable to your girlfriend is not in your best interests but that's not what you're trying to do here and I commend you for it. There is nothing that stops you drawing up a simple legal contract giving your girlfriend a share of the value of your house in return for her payments. Just get it signed and witnessed and checked over by a legal representative. You can include reasonable terms for the money to be paid back if you separate - perhaps when you sell the property or within two years of the breakup - that don't put you in immediate danger of losing the property. Just make clear that this contract is between you and her for a sum of money linked to the value of your house; it does not establish any legal claim on your house itself. A reasonable level for her to claim the property would be one half of the change in equity between when you start joint paying and when you separate - should that happen.",
"title": ""
},
{
"docid": "81f590f40c63e880cc0a0a87772b4f4f",
"text": "Have her pay something like a friendly monthly rent. This should be less than half of the monthly mortgage cost, since you are assuming the risk (and benefits) of a mortgage and closer to the rent of similar places near you. For when you get married and she is to have half the apartment, have a pre-agreed way to calculate a lump-sum that she needs to provide to match your own contributions up to that time, as if you two had equal contributions from the beginning. The financially precise way to do it would be to have her pay more than the mere sum of the amount (since she will be providing the amount at a later time than you), but I would be generous and skip this in your place if the difference is not too big. If you break up, she will have payed what would be a fair amount of rent, as if you two were renting, so, in this sense, it is fair that she would not have a claim on the apartment. In case that you two would like that she keeps the apartment, you can just sell it to her, having her pay this same amount as above and assume responsibility for the rest of the mortgage.",
"title": ""
},
{
"docid": "2cd417b896d953ed5d5f667607a01b85",
"text": "There is no issue - and no question - if you get married. The question is only relevant in the event that you go separate ways. Should that happen, you imply that you would want to refund whatever amount your girlfriend has paid toward the mortgage. The solution, then, would seem to be to exempt her from any payments, as you will either give that money back to her (if you break up) or make her a co-owner of the condo (if you get married). If you actually need her contributions to the monthly nut, you could give her a written agreement whereby you would refund her money (plus interest) at her discretion.",
"title": ""
},
{
"docid": "372267139d6ce347aa752922aff648ff",
"text": "\"A 30-yr mortgage IS a committment. So, you are willing to commit to a place, but not your long-term girlfriend??? Either you don't do this \"\"cheap\"\" scheme idea, or you set up as a business arrangement, or you get married. This is quite a laissez-faire statement you make... \"\"Maybe we will eventually get married, maybe we will eventually break up, who knows.\"\" Anything or anyone that is a \"\"who knows\"\" is not what you make a 30-yr committment on. I mean, unless you just want to risk throwing your money away. Now, man up, hire the lawyer to do official paperwork or else get a legal certificate of civil union or marriage or whatever you want to call it. If you try to do your cockamamie scheme \"\"on the cheap\"\" now, it will most surely cost you dearly in the future! Mixing money (particulary huge sums of 200,000 $!) when there is no legal obligation like marriage or a business contract, is a fool's errand! Now, grow up and do it the right way if you want to help her - and yourself too.\"",
"title": ""
},
{
"docid": "c2c46a382eef8995be98cb6552d1f628",
"text": "\"I just wanted to give you a different perspective, as I own a house (purchased with a mortgage), with my girlfriend. I think it can be done safely and fairly, but you do need to involve legal help to do it right. There really is nothing to be terrified about, the extra cost to set this up was almost irrelevant in the bigger picture of legal costs around purchasing and the documents describing the ownership scheme are quite straightforward. Maybe it's a UK thing, but it seems rather commonplace here. We've chosen to hold this as \"\"tenants in common\"\" and use a trust deed for this when we purchased. We had a solicitor write the trust deed and it clearly states what percentage of the house is owned by either party and exactly what the steps would be taken, should we decide to end the trust (e.g. in case of a split-up). This includes things like the right to buy out the other person before selling on the market etc. We also had to make wills separately to indicate what should happen with our percentage of the property in case one of us died as with this type of ownership it doesn't automatically go to the other person. Finally we're both on the mortgage, which I guess is the main difference versus your situation. But again, you could get legal advice as to how this should best be handled.\"",
"title": ""
},
{
"docid": "00d99bd22e5e93a23cfeb738acd9c16b",
"text": "\"This is fine, just have a plan before you go into it. Look up a co-ownership agreement contract off LegalZoom, they are like $15, or get a lawyer if you want. Decide if you want to be \"\"Joint tenants\"\" or \"\"Tenants in common\"\". You probably want to be joint tenants so that if one of you dies the property goes to the other person. Go through the agreement, make any changes you want, and then both sign it. These documents outline what happens if someone dies, or if you break up, or if you are allowed to sell your ownership, and anything else. Keep a record of who has paid what % of equity towards the house. Also look into tax laws, if the mortgage or house is only truly in 1 person's name they may get a tax break that the other person will not get. The co-ownership agreement is essentially the same agreement that happens when you're married, the only difference is that it happens automatically and implicitly when you're married. It's interesting that some people are saying this is a horrible idea when it's practically the same as the agreement you'd have if you were married. Whether you're single or married, if you own a house with another person and you break up, it's going to be a bit complicated. Get a contract in place beforehand so that things go as smoothly as possible. If you are both rational adults you shouldn't have any problems.\"",
"title": ""
},
{
"docid": "70e7de6bd3063c7c56bf7375bc8dee46",
"text": "I'm looking for something simple, legal, reasonably formal, easy to setup and tax efficient. You just described marriage. Get married.",
"title": ""
}
] |
[
{
"docid": "dc758a7a45f6084cb7df180f7abe3a47",
"text": "In addition to finding another woman investor, you have an equitable option that is not unreasonable: ask your partner to buy out 3% worth of shares from you (which then gives her 54%, allowing you to then sell 5% to an investor and have it not dilute her below 51%: .54 * .95 = .513). That keeps you whole but also keeps your woman-owned-business status.",
"title": ""
},
{
"docid": "ae78b765445388e78ff43a789df3076b",
"text": "\"Disclaimer: I am a law student, not a lawyer, and don't claim to have a legal opinion one way or another. My answer is intended to provide a few potentially relevant examples from case law in order to make the point that you should be cautious (and seek proper advice if you think that caution is warranted). Nor am I claiming that the facts in these cases are the same as yours; merely that they highlight the flexible approach that the courts take in such cases, and the fact that this area of law is complicated. I don't think it is sensible to just assume that there is no way that your girlfriend could acquire property rights as a rent paying tenant if arranged on an informal basis with no evidence of the intention of the arrangement. One of the answers mentions a bill which is intended to give non-married partners more rights than they have presently. But the existence of that bill doesn't prove the absence of any existing law, it merely suggests a possible legal position that might exist in the future. A worst-case assumption should also be made here, since you're considering the possibility of what can go wrong. So let's say for the sake of the argument that you have a horrible break up and your girlfriend is willing to be dishonest about what the intentions were regarding the flat (e.g. will claim that she understood the arrangement to be that she would acquire ownership rights in exchange for paying two thirds of the monthly mortgage repayment). Grant v Edwards [1986] Ch 638 - Defendant had property in the name of himself and his brother. Claimant paid nothing towards the purchase price or towards mortgage payments, but paid various outgoings and expenses. The court found a constructive trust in favor of the claimant, who received a 50% beneficial interest in the property. Abbot v Abbot [2007] UKPC 53, [2008] 1 FLR 1451 - Defendant's mother gifted land to a couple with the intention that it be used as a matrimonial home. However it was only put into the defendant's name. The mortgage was paid from a joint account. The claimant was awarded a 50% share. Thompson v Hurst [2012] EWCA Civ 1752, [2014] 1 FLR 238 - Defendant was a council tenant. Later, she formed a relationship with the claimant. They subsequently decided to buy the house from the council, but it was done in the defendant's name. The defendant had paid all the rent while a tenant, and all the mortgage payments while an owner, as well as all utility bills. The claimant sometimes contributed towards the council tax and varying amounts towards general household expenses (housekeeping, children, etc.). During some periods he paid nothing at all, and at other times he did work around the house. Claimant awarded 10% ownership. Aspden v Elvy [2012] EWHC 1387 (Ch), [2012] 2 FCR 435 - The defendant purchased a property in her sole name 10 years after the couple had separated. The claimant helped her convert the property into a house. He did much of the manual work himself, lent his machinery, and contributed financially to the costs. He was awarded a 25% share. Leeds Building Society v York [2015] EWCA Civ 72, [2015] HLR 26 (p 532) - Miss York and Mr York had a dysfunctional and abusive relationship and lived together from 1976 until his death in 2009. In 1983 Mr York bought a house with a mortgage. He paid the monthly mortgage repayments and other outgoings. At varous times Miss York contributed her earnings towards household expenses, but the judge held that this did \"\"not amount to much\"\" over the 33 year period, albeit it had helped Mr York being able to afford the purchase in the first place. She also cooked all the family meals and cared for the daughter. She was awarded a 25% share. Conclusion: Don't make assumptions, consider posting a question on https://law.stackexchange.com/ , consider legal advice, and consider having a formal contract in place which states the exact intentions of the parties. It is a general principle of these kinds of cases that the parties need to have intended for the person lacking legal title to acquire a beneficial interest, and proof to the contrary should make such a claim likely to fail. Alternatively, decide that the risk is low and that it's not worth worrying about. But make a considered decision either way.\"",
"title": ""
},
{
"docid": "f8d5c327ce6e719e6a82fda9724475de",
"text": "While I agree with the existing bulk of comments and answers that you can't tell the lender the $7k is a gift, I do think you might have luck finding a mortgage broker who can help you get a loan as a group. (You might consider as an LLC or other form of corporation if no one will take you otherwise.) That is, each of you will be an owner of the house and appear on the mortgage. IIRC, as long as the downpayment only comes from the collective group, and the income-to-debt ratio of the group as a whole is acceptable, and the strongest credit rating of the group is good, you should be able to find a loan. (You may need a formal ownership agreement to get this accepted by the lender.) That said, I don't know if your income will trump your brother's situation (presumably high debt ratio or lower than 100% multiplier on his income dues to its source), but it will certainly help. As to how to structure the deal for fairness, I think whatever the two of you agree to and put down in writing is fine. If you each think you're helping the other, than a 50/50 split on profits at the sale of the property seems reasonable to me. I'd recommend that you actually include in your write up a defined maximum period for ownership (e.g. 5yr, or 10yr, etc,) and explain how things will be resolved if one side doesn't want to sell at that point but the other side does. Just remember that whatever percentages you agree to as ownership won't effect the lender's view of payment requirements. The lender will consider each member of the group fully and independently responsible for the loan. That is, if something happens to your brother, or he just flakes out on you, you will be on the hook for 100% of the loan. And vice-versa. Your write up ought to document what happens if one of you flakes out on paying agreed upon amounts, but still expects there ownership share at the time of sale. That said, if you're trying to be mathematically fair about apportioning ownership, you could do something like the below to try and factor in the various issues into the money flow: The above has the benefit that you can start with a different ownership split (34/66, 25/75, etc.) if one of you wants to own more of the property.",
"title": ""
},
{
"docid": "c17aff7f263c74b9a7f8eb3c8981ca68",
"text": "Owing money to family members can create serious problems. Taking out a purchase-money mortgage to pay your sister for her share is the best way to avoid future friction and, possibly, outright alienation.",
"title": ""
},
{
"docid": "5d3f4dddca6531cf3532df3734a0165b",
"text": "I guess most banks will not have an issue with that arrangement. The bank take collateral in the house for the amount your girlfriend needs to borrow, from her part of the house. Most likely the bank will accept the house' value as what you pay for it, assuming you pay fair market value - otherwise they will contact a valuation company to put a value of your new house. If they feel that her share of the house (50%) can cover her loan, they will definitely agree with the deal. You being a foreigner will, probably, have little to say in the matter, as long as you do not need to borrow money for your share of the house.",
"title": ""
},
{
"docid": "88b36b264f597acad982578c3083fc01",
"text": "\"This is more of a long comment but may answer user's situation too. I have dealt with joint mortgages before in 3 states in the US. Basically in all three states if one party wants to sell, the home goes up for sale. This can be voluntary or it can go up via auction (not a great choice). In 2 of the 3 states the first person to respond to the court about the property, the other party pays all legal fees. Yes you read this right. In one case I had an ex who was on my mortgage, she had no money invested in the house ($0 down and still in college with no job). [If she wasn't on the mortgage I wouldn't have gotten loan - old days of dumb rules] When we split her lawyer was using the house as a way to extort other money from me. Knowing the state's laws I already filed a petition for the property but put it on hold with the clerk. Meaning that no one else could file but if someone tried mine would no longer be on hold. My ex literally spent thousands of dollars on this attorney and they wanted to sell the house and get half the money from the house. So sale price minus loan amount divided between us. This is the law in almost every state if there is no formal contract. I was laughing because she wanted what would be maybe 50-75K for paying no rent, no money down, and me paying for her college. Finally I broke her attorney down (I didn't lawyer up but had many friends who were lawyers advising). After I told her lawyer she wasn't getting anything - might have said it in not a nice way - her lawyer gave me her break down. To paraphrase she said, \"\"We are going to file now. My assistant is in the court clerk's office. You can tell the court whatever you want. Maybe they will give you a greater percentage since you put the money down and paid for everything but you are taking that chance. But you will pay for your lawyer and you will need one. And you will pay for me the entire time. And this will be a lengthy process. You would be better served to pay my client half now.\"\" Her office was about 2 blocks from court. I laughed at her and simply told her to have her assistant do whatever she wanted. I then left to go to clerk's office to take the hold off. She had beat me to the office (I moved my car out of her garage). By the time I got there she was outside yelling at her assistant, throwing a hissy fit, and papers were flying everywhere. We \"\"settled\"\" the next day. She got nothing other than the things she had already stolen from me. If I wouldn't have known about this loophole my ex would have gotten or cost me through attorney's fees around 40-50K for basically hiring a lawyer. My ex didn't really have any money so I am pretty sure lawyer was getting a percent. Moral of the story: In any contract like this you always want to be the one bringing in the least amount of money. There are no laws that I know of in any country where the person with the least amount on a contract will come out worse (%-wise). Like I said in the US the best case scenario that I know of for joint property is that the court pays out the stakeholder all of their contributions then it splits things 50/50. This is given no formal contract that the court upholds. Don't even get me started with hiring attorneys because I have seen the courts throw out so many property contracts it isn't even funny. One piece of advice on a contract if you do one. Make it open and about percentages. Party A contributes 50K, Party B 10K, Party A will pay this % of mortgage and maintenance and will get this % when home is sold. I have found the more specific things are the more loopholes for getting out of them. There are goofy ass laws everywhere that make no sense. Why would the person first filing get their lawyers paid for??? The court systems in almost all countries can have their comical corners. You will never be able to write a contract that covers everything. If the shower handle breaks, who pays for it? There is just too many one-off things with a house. You are in essence getting in a relationship with this person. I hear others say it is a business transaction. NO. You are living with this person. There is no way to make it purely business. For you to be happy with this outcome both of you must remain somewhat friends and at the very least civil with each other. To add on to the previous point, the biggest risk is this other person's character and state of mind. They are putting in the most money so you don't exactly have a huge money risk. You do have a time and a time-cost risk. Your time or the money you do have in this may be tied up in trying to get your money out or house sold. A jerk could basically say that you get nothing, and make you traverse the court system for a couple years to get a few thousand back. And that isn't the worst case scenario. Always know your worst case scenario. Yours is this dude is in love with you. When he figures out 2-3 years later after making you feel uncomfortable the entire time that you are not in love with him, he starts going nuts. So he systematically destroys your house. Your house worth plummets, you want out, you can't sell the house for price of loan, lenders foreclose or look to sue you, you pay \"\"double rent\"\" because you can't live with the guy, and you have to push a scooter to get to work. That is just the worst case scenario. Would I do this if I were 25 and had no family? Yea, why not if I trusted the other person and was friends with them? If it were just a co-worker? That is really iffy with me. Edit: Author said he will not be living with the person. So wording can be changed to say \"\"potentially\"\" in front of living with him in my examples.\"",
"title": ""
},
{
"docid": "bd89b818d5702284369797b5fbfb8462",
"text": "A simple and low-interest loan is probably the least likely to cause acrimony, aside from a direct gift. You seem to be describing an equity stake in their house, where some portion of the appreciation in value accrues to you (relative to your initial investment). An equity stake in their house probably doesn't make much sense. You sound as though you're not going to do any of the work aside from the contribution of money. Equity might make sense as a way to reward you for efforts, such as home design or renovation, that increase the value of the home. You probably don't want to be in a position where you are together improving the property and your payback only comes when she sells for more money. What if you have different ideas of how to do it? She has to live there and may want improvements for her needs rather than for buyers. What if she asks you to pay for a portion of the improvement costs or resents you not offering? What if she doesn't want to sell for some reason, so your money is locked up with her family choices? Renovations can often be stressful, so these decisions may be made at difficult times. Either a gift or a low-interest family loan may be simpler for your needs. You can just set the loan terms you want, say payoff over 10 years or a deferred payment schedule. If she gets in trouble, you could perhaps delay or forgive payments. I don't know the UK tax consequences of a loan of this nature, if any. As a general proposition, it's best to set clear and simple expectations at the beginning, and avoid agreements that require multiple decisions to be made consensually in the future, possibly during a time of stress.",
"title": ""
},
{
"docid": "024f190b764183dc722c34c4360e0f90",
"text": "The mortgage and title of the house would be under both your names equally. When I applied for a mortgage with my girlfriend, I was the primary applicant because of my credit score and she was the secondary because of her income (she makes more). When all was said and done, it was explained to us that the mortgage was ours equally and so was the house, and that I didn't hold more ownership than her over either. We were approved quickly and hassle free. This is our first house too. This is in Florida.",
"title": ""
},
{
"docid": "a1931fcfb31aace0fe69344184134370",
"text": "\"Simply paying him back the 50K to reduce \"\"his equity\"\" back to 30% doesn't necessarily mean that he still doesn't have a higher liq pref upon a liquidation event. You don't need the legal language to know...I deal with term sheets all the time, I don't deal in the legal language, we cut the deal with the term sheet and leave the legal language to the lawyers.\"",
"title": ""
},
{
"docid": "beab52bb4c7e60ec7d8ba5666b415278",
"text": "Now I have been trying to figure out how to split the money that we both earn. From what I can see there are several concepts but none of them really seems ideal to me. There is nothing fair or unfair in such arrangements. It is what you both agree. You can try and make this as scientific as possible. But then there is no golden rule. For example, your girlfriend makes 2200 now and due to child, she is making 1100. The child is both of your responsibility; so you need to compensate half of her salary loss. 550 and she takes the other half. If you hire a nanny to look after you kinds, it would say cost you 500. But your girlfriend is doing that job, so she should get additional 500 from common pot. Plus due to loss of few years in looking after the children, she has a lost opportunity in career growth. i.e. she may indefinitely make less money than she can... So one gets into all kinds of theories and analysis and any arrangements will have some or the other gaps. So my suggestion, don't get too scientific about it. Just talk it out as to what you both feel how this should be and arrive it. It is something every individual has to agree. It also make sense to have the large assets [or assets that matter], like house, car etc in clear title and who gets what in case you decide to separate. Other should be incidental.",
"title": ""
},
{
"docid": "add0339c544855d4a40c557705a5dc6b",
"text": "Ultimately the bank will have first call on the house and you will be the only one on the hook directly to the bank if you don't make the mortgage payments. There's nothing you can do to avoid that if you can't get a joint mortgage. What you could do is make a side agreement that your girlfriend would be entitled to half the equity in the house, and would be required to make half the payments (via you). You could perhaps also add that she would be part responsible for helping you clear any arrears. But in the end it'd just be a deal between you and her. She wouldn't have any direct rights over the house and she wouldn't be at risk of the bank pursuing her if you don't pay the mortgage. You'd probably also need legal advice to make it watertight, but you could also not worry about that too much and just write it all down as formally as possible. It really depends if you're just trying to improve your feelings about the process or whether you really want something that you could both rely on in the event of a later split. I don't think getting married would make any make any real difference day-to-day. In law, with rare exceptions, the finances of spouses are independent from each other. However in the longer term, being married would mean your now-wife would have a stronger legal claim on half the equity in the house in the event of you splitting up.",
"title": ""
},
{
"docid": "72eed75865cf38a35de154505afa0fe3",
"text": "Assuming United States; answer may be different elsewhere. The best instructions I have seen for this were on the webpage of one of the law firms making an organized business out of intra-family loans, but any lawyer who can deal with normal bank loans should be able to help you set this up and get it filed with the appropriate authorities to make it a legally binding mortgage. Shouldn't cost you much in legal time to do it. You will have to charge interest; your lawyer can tell you what the minimum and maximimum interest rates would be where you are. Your interest income will be taxable. The borrower may or may not be able to deduct the interest paid from their taxes. Of course if the borrower has any sense they'll want to get their own lawyer to review the terms of the agreement, and to tell them whether they can deduct it from taxes or not.",
"title": ""
},
{
"docid": "e0654e7730a0c6596f36a97d8f2e0cc7",
"text": "You actually have a few options. First, you can do a share split and then sell an equal number of shares from both you and your wife to maintain parity. Second, you can have the company issue additional shares/convert shares and then have the company sell the appropriate percentage to the third party while the rest is distributed to you and your wife. Third, you can have the company issue a separate class of stock. For example there are companies that have voting stock and non-voting stock. Depending on your goal, you could just issue non-voting stock and sell that. Best bet is to contact a lawyer who specializes in this type of work and have them recommend a course of action. One caveat that has not been mentioned is that what/how you do this will also depend on the type of corporation that you have created.",
"title": ""
},
{
"docid": "cec66d2b008f06da053a3a1edde35544",
"text": "\"It's all about access to capital: You can borrow against 401ks up to an extent. You can borrow against CDs outside of tax sheltered retirement plans. You can't borrow against an IRA, although there is a situation with a very small time frame that would still be state sanctioned with no tax penalties. I wouldn't recommend it. Annuities come with penalties. I've looked at many possibilities of accessing retirement capital without penalty, and 401k's offer that ability, but its also good to just have savings accounts and investments that are not tax-deferred. Borrowing against 401k pros: http://www.ehow.com/how_2075551_borrow-money-from-401k.html cons: http://www.investopedia.com/articles/retirement/06/eightreasons401k.asp#axzz29TtJPoXO Outside of your general expenses and play money, money you put toward - say... - a house should be non-tax deferred. Because if you like borrowing, you can always borrow against the house, or any property. The root of the problem is liquidity and access to capital, understanding those fundamental concepts will answer most questions. \"\"Am I liquid? Yes/No\"\" \"\"Can I be liquid without losing money? Yes/No\"\" As usual, more is more, adjust your priorities accordingly.\"",
"title": ""
},
{
"docid": "cdf6041105d52253b016ef3ffd8a099a",
"text": "what reason would I have in buying an ETF? Apart from the efforts, the real reason is the ticket size. One can't buy shares in fraction. To truly reflect the index in equal weight, the amount to invest will be in multiples of millions [depending on the Index and the stock composition] This related question should help you understand why it is difficult even for large fund house to exactly mimic the index. Why do passive ETFs require so much trading (and incur costs)?",
"title": ""
}
] |
fiqa
|
42a391aebd80606f97257e265285afc6
|
If I have no exemptions or deductions, just a simple paycheck, do I HAVE to file taxes?
|
[
{
"docid": "5d30f301760755861621e5260d05e183",
"text": "\"As a Canadian resident, the simple answer to your question is \"\"yes\"\" Having worked as a tax auditor and as a Certified Financial Planner, you are required to file an income tax return because you have taxable employment income. All the employer is doing is deducting it at source and remitting it on your behalf. That does not alleviate your need to file. In fact, if you don't file you will be subject to a no filing penalty. The one aspect you are missing is that taxpayers may be entitled to tax credits that may result in a refund to you depending on your personal situation (e.g spousal or minor dependents). I hope this helps.\"",
"title": ""
},
{
"docid": "e8fa467567be1b8c0dc0e2381ed95906",
"text": "While you are required to do so as others have said, it's actually in your interest to do so. In a recent article at GlobeInvestor, Tim Cestnick discusses the benefits of filing tax returns for teens. This situation may or may not apply to you but the message is the same. The main benefits are (1) create RRSP contribution room and (2) be eligible for GST/HST credits and other possible one-shot credits (think oil royalty surplus cheques in Alberta). Excerpt: You see, when Lincoln was 14, he filed a tax return and reported $2,000 of income that year. He paid no tax thanks to the basic personal tax credit, but he created $360 of RRSP contribution room that year. Beginning in 2003, Lincoln started working part-time in his father's business. His father agreed to pay him $6,000 each summer to work in the business, to help save money for university. Lincoln didn't pay any tax on the money he earned in those summers because his basic personal tax credit was always higher than his earnings. In addition, Lincoln added to his RRSP contribution room simply by filing a tax return each year.",
"title": ""
},
{
"docid": "53df92d1e3b246173ac053efc87fa9d4",
"text": "Yes, you have to file a tax return in Canada. Non residents that have earned employment income in Canada are required to file a Canadian personal income tax return. Usually, your employer will have deducted sufficient taxes from your pay-cheques, resulting in a tax refund upon filing your Canadian tax return. You will also receive a tax credit on your US tax return for taxes paid in Canada.",
"title": ""
},
{
"docid": "4645e910fa7f0f30aa582dcc00e85207",
"text": "In many cases, you are required to file your taxes by law even if you won't owe. If it's anything like in the US, it's quite possible your employer is not taking the right amount and you may owe more or may even be in line for a return. http://www.usatax.ca/Pages/filing_requirement_taxes_canada.html",
"title": ""
},
{
"docid": "1d70c66d71539d742252756e37426e4d",
"text": "If you took advantage of options like a home buyers plan (HBP) you definitely need to file since you must designate how much of the plan to repay. Your employer does not know about what you do with your money so cannot take this into account for the withheld taxes. If you do not report repayment of the HBP it will be treated as a withdrawal from your RRSP i.e. additional income for that tax year.",
"title": ""
},
{
"docid": "dfa301d072f1ede64d7a19321e3d22e0",
"text": "You are not required to file a tax return in Canada if you have no taxable income. If you do not file a return you may be requested to by Canada Revenue Agency, and then you'll need to file one. There are hundreds of thousands of Canadian residents who do not file tax returns. The Minister who overlooks the CRA may assess any amount of taxes on any resident whether they file a return or not. There are penalties for failing to file a return or filing late. The penalties are based on a percentage of the taxes owed. If you owe no taxes, then the penalties are meaningless.",
"title": ""
}
] |
[
{
"docid": "708b0a0701ed4c6db8ded6937a20599b",
"text": "\"There's no \"\"183 days\"\" rule. As a US citizen you must pay taxes on all your income, where you live is irrelevant.\"",
"title": ""
},
{
"docid": "eebfd26667517727702aaec038ea12a4",
"text": "\"You file taxes as usual. W2 is a form given to you, you don't need to fill it. Similarly, 1099. Both report moneys paid to you by your employers. W2 is for actual employer (the one where you're on the payroll), 1099 is for contractors (where you invoice the entity you provide services to and get paid per contract). You need to look at form 1040 and its instructions as to how exactly to fill it. That would be the annual tax return. It has various schedules (A, B, C, D, E, F, H, etc) which you should familiarize yourself with, and various additional forms that you attach to it. If you're self employed, you're expected to make quarterly estimate payments, but if you're a salaried employee you can instruct your employer to withhold the amounts you expect to owe for taxes from your salary, instead. If you're using a tax preparation software (like TurboTax or TaxAct), it will \"\"interview\"\" you to get all the needed information and provide you with the forms filled accordingly. Alternatively you can pay someone to prepare the tax return for you.\"",
"title": ""
},
{
"docid": "bba32b796ac32de9786cc1594733b90f",
"text": "I filed all my tax returns when I was abroad so they know how much I made (just not how much I saved). I smell problems here. If you were compliant wrt to your filings, you must have filed FBAR forms and form 8938. Even if you were below the threshold for form 8938, you will probably be above it when you move back to the US - the threshold for people living in the US is much lower. Do I still need to declare it, even though I might not intend to use this money to help my kids through college? I believe so. Here's what they want: Nothing there suggests that it is only limited to the accounts in the US or to the money you intend to use to help your kids through college.",
"title": ""
},
{
"docid": "65c68a828b7a4907e8704f5296b345ee",
"text": "If you're under audit - you should get a proper representation. I.e.: EA or CPA licensed in California and experienced with the FTB audit representation. There's a penalty on failure to file form 1099, but it is with the IRS, not the FTB. If I remember correctly, it's something like $50 or $100 per instance. Technically they can disqualify deductions claiming you paid under the table and no taxes were paid on the other side, however I doubt they'd do it in a case of simple omission of filing 1099 forms. Check with your licensed tax adviser. Keep in mind that for the IRS 2011 is now closed, since the 3-year statute of limitations has passed. For California the statute is 4 years, and you're almost at the end of it. However since you're already under audit they may ask you to agree to extend it.",
"title": ""
},
{
"docid": "70cf8d23890f8f5e17526f378a4ec318",
"text": "\"In a word, no. If your income is high enough to have to file a return, you have to file a return. My accountant has a nice mindset for making it more palatable. I'll paraphrase: \"\"Our tax system is ludicrously complicated. As a result, it is your duty as an American to seek out and take advantage of every deduction and credit available to you. If our politicians and leaders put it into the tax code, use it to your advantage.\"\" A friend of mine got a free golf cart that way. It was a crazy combination of credits and loopholes for electric vehicles. That loophole has been closed, and some would say it's a great example of him exercising his patriotic duty.\"",
"title": ""
},
{
"docid": "653e490ace6c1b315324cea013d7d9ef",
"text": "Not correct. First - when you say they don't tax the reimbursement, they are classifying it in a way that makes it taxable to you (just not withholding tax at that time). In effect, they are under-withholding, if these reimbursement are high enough, you'll have not just a tax bill, but penalties for not paying enough all year. My reimbursements do not produce any kind of pay stub, they are a direct deposit, and are not added to my income, not as they occur, nor at year end on W2. Have you asked them why they handle it this way? It's wrong, and it's costing you.",
"title": ""
},
{
"docid": "a7b3c9eee55e4e1aca9b47f730125171",
"text": "Your employer pays the expected (but estimated) taxes for you. So the chances are you don't own more; but that might be different if you have other sources of income that he doesn't know about (interest on savings or a side-job or whatever). Also, you could have deductions that reduce the taxes you owe, which he again doesn't know, so you overpay. If you don't file, you don't get them back. Most tax software companies offer free usage of their tool for standard filings, and you can use it to find out your tax situation, and then buy the tool only when you want to file. If you use one of those, you can type in all your data, and depending on the result, decide to buy it and file right away. Note that if it turns out you owe taxes, you must file (and pay), but of course you can do it manually instead of buying the tool. If it turns out you get money back, it is your decision to file - you probably don't care for a small amount, but if you get 1000 $ back, you might want to file - again, buying the software of doing it manually.",
"title": ""
},
{
"docid": "9c3b32d642fa5b954e6042862d04208d",
"text": "One significant reason it makes sense for filing to be the default is home ownership rates. I think far more so than investment income, Americans own homes: as there is a significant mortgage interest deduction, between that and investments a large number of Americans would have to file (about a third of Americans get the mortgage interest tax deduction, and a large chunk of the richest don't qualify but would have to file for investments anyway). We also have a very complicated tax code, with nearly everyone getting some kind of deduction. Earned Income Tax Credit for the working poor (folks making, say, $30k for a family of 4 with a full-time job get several thousand dollars in refundable credits, for example), the Student Loan interest deduction, the above mortgage deduction, almost everyone gets something. Finally, your employer may not know about your family situation. As we have tax credits and deductions for families based on number of children, for example, it's possible your employer doesn't know about those (if you don't get health insurance on their behalf, they may well not know). Start reporting things like that separately... and you end up with about as much work as filing is now.",
"title": ""
},
{
"docid": "f32d820d97c3f202be1a3c1a88a1820b",
"text": "\"Does he need to file a tax return in this situation? Will the IRS be concerned that he did not file even if he received a 1099? No. However, if you don't file the IRS may come back asking why, or \"\"make up\"\" a return for you assuming that the whole amount on the 1099-MISC is your net earnings. So in the end, I suspect you'll end up filing even though you don't have to, just to prove that you don't have to. Bottom line - if you have 1099 income (or any other income reported to the IRS that brings you over the filing threshold), file a return.\"",
"title": ""
},
{
"docid": "4ece5a4423569b60c3f64870d4bc281f",
"text": "\"I'm assuming that you're in the US. In that case, the answer is that it depends on how your company set up its reimbursement plan. The IRS recognizes \"\"accountable\"\" and \"\"nonaccountable\"\" plans. Accountable plans have to meet certain requirements. Anything else is nonaccountable. If you are reimbursed according to an accountable plan, this is not income and should not be reported to the IRS at all. If you are reimbursed under a nonaccountable plan, then this is income but you might be able to get a deduction on your tax return if you itemize. Most established companies have accountable plans for normal business expenses. More detail from IRS: http://www.tax.gov/TaxabilityCertainFringeBenefits/pdf/Accountable_v_Nonaccountable_Plans_Methods_of_Reimbursing_Employees_for_Expense.pdf\"",
"title": ""
},
{
"docid": "bc721c0bcdd095c130ae3e926407beb0",
"text": "Companies in the US will take care of paying a portion of your required income tax on your behalf based on some paperwork you fill out when starting work. However, it is up to you as an individual to submit an income tax return. This is used to ensure that you did not end up under or overpaying based on what your company did on your behalf and any other circumstances that may impact your actual tax owed. In my experience, the process is similar in Europe. I think anyone who has a family, a house or investments in Europe would need to file an income tax return as that is when things start to get complex.",
"title": ""
},
{
"docid": "b4bdf77bd6c433338ae2798676b50331",
"text": "\"There are many people who have deductions far above the standard deduction, but still don't itemize. That's their option even though it comes at a cost. It may be foolish, but it's not illegal. If @littleadv citation is correct, the 'under penalty of perjury' type issue, what of those filers who file a Schedule A but purposely leave off their donations? I've seen many people discuss charity, and write that they do not want to benefit in any way from their donation, yet, still Schedule A their mortgage and property tax. Their returns are therefore fraudulent. I am curious to find a situation in which the taxpayer benefits from such a purposeful oversight, or, better still, a cited case where they were charged with doing so. I've offered advice on filings return that wasn't \"\"truthful\"\". When you own a stock and cannot find cost basis, there are times that you might realize the basis is so low that just entering zero will cost you less than $100 in extra tax. You are not truthful, of course, but this kind of false statement isn't going to lead to any issue. If it gets noticed within an audit, no agent is going to give it more than a moment of time and perhaps suggest, \"\"you didn't even know the year it was bought?\"\" but there would be no consequence. My answer is for personal returns, I'm sure for business, accuracy to the dollar is actually important.\"",
"title": ""
},
{
"docid": "a8a34d5de6f3676427fdea0189bc6428",
"text": "It would be quite the trick for (a) the government to run all year and get all its revenue in April when taxes are due and (b) for people to actually save the right amount to be able to cut that check each year. W2 employers withhold the estimated federal and state taxes along with the payroll (social security) tax from each paycheck. Since the employer doesn't know how many kids you have, or how much mortgage interest, etc you will take deductions for, you can submit a W4 form to adjust withholdings. The annual Form 1040 in April is to reconcile exact numbers, some people get a refund of some of what they paid in, others owe some money. If one is self-employed, they are required to pay quarterly estimated taxes. And they, too, reconcile exact numbers in April.",
"title": ""
},
{
"docid": "9bb1b479d1d600df703dc6c48c682ae7",
"text": "Legally, do I have anything to worry about from having an incorrectly filed W-4? What you did wasn't criminal. When you submitted the form it was correct. Unfortunately as your situation changed you didn't adjust the form, that mistake does have consequences. Is there anything within my rights I can do to get the company to take responsibility for their role in this situation, or is it basically my fault? It is basically your fault. The company needs a w-4 for each employee. They will use that W-4 for every paycheck until the government changes the regulation, or your employment ends, or you submit a new form. Topic 753 - Form W-4 – Employee's Withholding Allowance Certificate If an employee qualifies, he or she can also use Form W-4 (PDF) to tell you not to deduct any federal income tax from his or her wages. To qualify for this exempt status, the employee must have had no tax liability for the previous year and must expect to have no tax liability for the current year. However, if the employee can be claimed as a dependent on a parent's or another person's tax return, additional limitations may apply; refer to the instructions for Form W-4. A Form W-4 claiming exemption from withholding is valid for only the calendar year in which it is filed with the employer. To continue to be exempt from withholding in the next year, an employee must give you a new Form W-4 claiming exempt status by February 15 of that year. If the employee does not give you a new Form W-4, withhold tax as if he or she is single, with no withholding allowances. However, if you have an earlier Form W-4 (not claiming exempt status) for this employee that is valid, withhold as you did before. (I highlighted the key part) Because you were claiming exempt they should have required you to update that form each year. In your case that may not have applied because of the timing of the events. When do you submit a new form? Anytime your situation changes. Sometimes the change is done to adjust withholding to modify the amount of a refund. Other times failure to update the form can lead to bigger complication: when your marital status changes, or the number of dependents changes. In these situations you could have a significant amount of under-withheld, which could lead to a fine later on. As a side note this is even more true for the state version of a W-4. Having a whole years worth of income tax withholding done for the wrong state will at a minimum require you to file in multiple states, it could also result in a big surprise if the forgotten state has higher tax rate. Will my (now former) employee be responsible for paying their portion of the taxes that were not withheld during the 9 months I was full-time, tax Exempt? For federal and state income taxes they are just a conduit. They take the money from your paycheck, and periodically send it to the IRS and the state capital. Unless you could show that the pay stubs said taxes were being withheld, but the w-2 said otherwise; they have no role in judging the appropriateness of your W-4 with one exception. Finally, and I am not too hopeful on this one, but is there anything I can do to ease this tax burden? I understand that the IRS is owed no matter what. You have one way it might workout. For many taxpayers who have a large increase in pay from one year to the next, they can take advantage of a safe-harbor in the tax law. If they had withheld as much money in 2015 as they paid in 2014, they have reached the safe-harbor. They avoid the penalty for under withholding. Note that 2014 number is not what you paid on tax day or what was refunded, but all your income taxes for the entire year. Because in your case your taxes for the year 2014 were ZERO, that might mean that you automatically reach the safe-harbor for 2015. That makes sense because one of the key requirements of claiming exempt is that you had no liability the year before. It won't save you from paying what you owe but it can help avoid a penalty. Lessons",
"title": ""
},
{
"docid": "58fd1222e8565395bee7290f7a71a3e3",
"text": "\"In the U.S., Form 1040 is known as the tax return. This is the form that is filed annually to calculate your tax due for the year, and you either claim a refund if you have overpaid your taxes or send in a payment if you have underpaid. The form is generally due on April 15 each year, but this year the due date is April 18, 2016. When it comes to filing your taxes, there are two questions you need to ask yourself: \"\"Am I required to file?\"\" and \"\"Should I file?\"\" Am I required to file? The 1040 instructions has a section called \"\"Do I have to file?\"\" with several charts that determine if you are legally required to file. It depends on your status and your gross income. If you are single, under 65, and not a dependent on someone else's return, you are not required to file if your 2015 income was less than $10,300. If you will be claimed as a dependent on someone else's return, however, you must file if your earned income (from work) was over $6300, or your unearned income (from investments) was over $1050, or your gross (total) income was more than the larger of either $1050 or your earned income + $350. See the instructions for more details. Should I file? Even if you find that you are not required to file, it may be beneficial to you to file anyway. There are two main reasons you might do this: If you have had income where tax has been taken out, you may have overpaid the tax. Filing the tax return will allow you to get a refund of the amount that you overpaid. As a student, you may be eligible for student tax credits that can get you a refund even if you did not pay any tax during the year. How to file For low income tax payers, the IRS has a program called Free File that provides free filing software options.\"",
"title": ""
}
] |
fiqa
|
cbba0cf458a4b7db927c4ce7d576821a
|
Are there guidelines for whom you should trust for financial advice (online, peer, experts, only myself, etc)
|
[
{
"docid": "15a8d776bf4427047a8a551633407a1b",
"text": "\"You need to understand how various entities make their money. Once you know that, you can determine whether their interests are aligned with yours. For example, a full-service broker makes money when you buy and sell stocks. They therefore have in interest in you doing lots of buying, and selling, not in making you money. Or, no-fee financial advisors make their money through commissions on what they sell you, which means their interests are served by selling you those investments with high commissions, not the investments that would serve you best. Financial media makes their money through attracting viewers/readers and selling advertising. That is their business, and they are not in the business of giving good advice. There are lots of good investments - index funds are a great example - that don't get much attention because there isn't any money in them. In fact, the majority of \"\"wall street\"\" is not aligned with your interests, so be skeptical of the financial industry in general. There are \"\"for fee\"\" financial advisors who you pay directly; their interests are fairly well aligned with yours. There is a fair amount of good information at The Motley Fool\"",
"title": ""
},
{
"docid": "cdf7ac62637421a1a1321ae8cdd080a4",
"text": "Nothing beats statistics like that found on Morning Star, Yahoo or Google Finance. When you are starting out, there is no need to reinvent the wheel. Pick a couple of mutual funds with good track records and start there. Keep in mind the financial press, to some degree, has a vested interest in having their readership chase the next hot thing. So while sites like Seeking Alpha, Kiplingers, or Money do provide some good advice, there is also an element that placates their advertisers. The only peer-to-peer lending I would consider is Lending Club. However, you are probably better off in the long run investing in mutual funds. One way to get involved in individual stocks without getting burned is to participate in Dividend Reinvestment Plans (DRIPs). Companies that have them tend to be very well established, and they are structured to discourage trading. Buying is easy, dividend reinvestment is easy, dividend payouts are easy; but, starting and selling is kind of a pain. That is a good thing.",
"title": ""
}
] |
[
{
"docid": "1fa75ab8a23b7d77ea05b2bba4111506",
"text": "\"You want a fee-only advisor. He charges like an architect or plumber: by the hour or some other \"\"flat fee\"\". That is his only compensation. He is not paid on commission at all. He is not affiliated with any financial services company of any kind. His office is Starbucks. He does not have a well lit office like the commission broker down the street. He does not want you to hand him your money - it stays in the brokerage account of your choice (within reason - some brokerage accounts are terrible and he'll tell you to get out of those). He never asks for the password to your brokerage account. Edit: The UK recently outlawed commission brokers. These guys were competitive \"\"sales types\"\" who thrive on commissions, and probably went into other sales jobs. So right now, everyone is clamoring for the few proper financial advisors available. High demand is making them expensive. It may not be cost-effective to hire an advisor; you may need to learn it yourself. It's not that hard. Ever hear of a plumber who works totally for free, and makes his money selling you wildly overpriced pipe? That's what regular \"\"financial advisors\"\" are. They sell products that are deliberately made unnecessarily complex. The purpose is first, to conceal sales commissions and high internal fees; and second to confuse you, so the financial world feels so daunting that you feel like you need their help just to navigate it. They're trying to fry your brain so you'l just give up and trust them. Products like whole life and variable annuities are only the poster children for how awful all of their financial products are. These products exist to fleece the consumer without quite breaking the law. Of course, everyone goes to see them because they have well lit offices in every town, and they're free and easy to deal with. Don't feel like you need to know everything about finance to invest. You don't need to understand every complex financial product that the brokerage houses bave dreamed up: they are designed to conceal and confuse, as I discuss above, and you don't want them. The core of it is fairly simple, and that's all you really need to know. Look at any smaller university and how they manage their endowments. If whole life, annuities and those complex financial \"\"products\"\" actually worked, university endowments would be full of them. But they're not! Endowments are generally made of investments you can understand. Partly because university boards are made of investment bankers who invented those products, and know what a ripoff they are. Some people refuse to learn anything. They are done with college and refuse to learn anything more. I hope that's not you. Because you should learn the workings of everything you're investing in. If you don't understand it, don't buy itl And a fee-only financial advisor won't ask you to. 1000 well-heeled, well-advised university endowments seek the most successful products on the market... And end up choosing products you can understand. That's good news for you.\"",
"title": ""
},
{
"docid": "1669fbab3ed90f4ba241a6bf435ff3a1",
"text": "Sir, although I am quiet inexperienced speaking in this subject but being an undergraduate in financial engineering, I feel the title is suited very well since providing unbiased financial advice is the last and greatest thing that any financial adviser would ever do....",
"title": ""
},
{
"docid": "304b9221d2ada7e5d6cf98f57419d1a4",
"text": "You have received much good advice, but based on 53 years investing and the first 25 getting my nose bloodied and breaking even I very strongly offer the following. Before doing so let me first offer this caveat: I am not questioning your broker or the advice, but it is only valuable to you if history proves correct. No one, not even Bernanke can predict how stock will perform in the future. Maybe if he sees a depression. My advice to someone new to stock investing is to purchase a index fund from a discount broker, e.g. Fidelity or Vanguard, and then study the market and economics. The Wall Street Journal and the web are my favorites. I started with a hell of a lot less than you have saved, I would not turn $200K over to anyone until you know exactly the risk and cost involved. Also, I wouldn't depend on one person or firm to advise or manage my money. I like to balance one against the other. I do not recall different firms recommending the same stocks. One must remember everyone in the business of recommending stock or any investment is selling something and must be compensated. That's how they earn a living.",
"title": ""
},
{
"docid": "1d983d0990780aed6e30220bbab12b25",
"text": "The way this works, as I understand it, is that financial advisers come in two kinds. Some are free to recommend you any financial products they think fit, but many are restricted in what they can recommend. Most advisers who work for finance companies are the second kind, and will only offer you products that their company sells. I believe they should tell you up front if they are the second kind. They should certainly tell you that if you ask. So in essence, your Scotiabank advisor is not necessarily making bad decisions for you - but they are restricted in what they will offer, and will not tell you if there is a better product for you that Scotiabank doesn't sell. In most cases, 'management fees' means something you pay to the actual managers of the fund you buy, not to the person who sells you the fund. You can compare the funds you are invested in yourself, both for performance and for the fees charged. Making frequent unnecessary changes of investment is another way that an advisor can milk you for money, but that is not necessarily restricted to bank-employed advisors. if you think that is happening to you, ask question, and change advisors if you are not happy.",
"title": ""
},
{
"docid": "418560ccfabd92b6f509f8e16d8243ea",
"text": "Anyone who claims they can consistently beat the market and asks you to pay them to tell you how is a liar. This cannot be done, as the market adjusts itself. There's nothing they could possibly learn that analysts and institutional investors don't already know. They earn their money through the subscription fees, not through capital gains on their beat-the-market suggestions, that means that they don't have to rely on themselves to earn money, they only need you to rely on them. They have to provide proof because they cannot lie in advertisements, but if you read carefully, there are many small letters and disclaimers that basically remove any liability from them by saying that they don't take responsibility for anything and don't guarantee anything.",
"title": ""
},
{
"docid": "12b806671cb1b52fd455e729cbb9e107",
"text": "The nature of this question (finding a financial adviser) can make it a conundrum. Those who have little financial experience are often in the greatest need of a financial adviser and at the same time are the least qualified to select one. I'm not putting you or anyone in particular in this category. And of course it's a sliding scale: In general the more capable you are of running your own finances the more prepared you are to answer this question. With that said, I would recommend backing up half a step. Consider advisers other than strictly fee-only advisers. Perhaps you have already considered this decision. But perhaps others reading this have not. My (Ameriprise) adviser charges a monthly (~$50) fee, but also gets percentage-based portions of certain investments. Based on a $150/hr rate that amounts to four hours per year. Does he spend four hours per year on my account? Well so far he does (~2 yrs). But that is determined primarily by how much interaction I choose to have with him. (I suppose I could spend more time asking him questions and less time on this forum. :P) I have never fully understood the gravitation towards fee-based advisers on principle. I guess the theory is they are not making biased decisions about your investments because they don't have as much of a stake in how well your investments to do. I don't necessarily see that as an advantage. It seems they would have less of an incentive to ensure the growth of your investments. Although if you're nearing retirement then growth isn't your biggest concern. Perhaps a fee-based adviser makes more sense in that scenario. Whatever pay structure your adviser uses, it would seem to make sense to consider a successful adviser with a good client base. This implies that the adviser knows what he/she is doing. (But it could also just be a sign that they are good at marketing themselves.) If your adviser has a good base of wealthy clients then choosing a strictly-fee based adviser would mitigate the risk of your adviser having less incentive to consider your portfolio vs that of more wealthy clients. To more directly answer your question I suggest asking several of your adviser candidates for advice on choosing an adviser. I suspect you will get some good advice as well as good insight on the integrity and honesty of the adviser.",
"title": ""
},
{
"docid": "1c89e9a5530170e982dfbeca5e1dd434",
"text": "\"Fred is correct ... MOST financial advisors (but not all) are paid either for managing your assets or for selling you financial products. But success at anything, especially building wealth, is all about PROCESS, not products. I applaud your desire to find a financial advisor to help you because this is not something that most people have the education, experience or capacity to do themselves (it is impossible to get the perspective you need to make the best choices). Start with a CERTIFIED FINANCIAL PLANNER professional - they have an ethical duty to do what is in your best interests ahead of their own (the \"\"fiduciary standard\"\"). You might interview two or three. Work with the one who is transparent about how they are paid and whose process is focused on helping you achieve your goals ... not following any rule of thumb or standard boilerplate. Your goals are different. Your financial life is different. Find someone who can help YOU follow YOUR agenda ... not their own.\"",
"title": ""
},
{
"docid": "39fac01405b61176cd3e961c7a2eb120",
"text": "\"Legally ok? Sure. Friends frequently discuss financial matters, and share advice. This is quite far from taking money from them and managing it, where at some point you need to be licensed for such things. If you're concerned about giving bad advice, just stay generic. The best advice has no risk. If I offer a friend a stock tip, of course there's the chance the stock goes south, but when I tell a friend who asks about the difference between Mutual Funds and ETFs, and we discuss the expenses each might have, I'm still leaving the decision as to which ETF to him. When I offer the 'fortune cookie' soundbites like \"\"If you are going to make a large purchase, delay it a week for each $100 of value. e.g. if you really want a $1000 TV, sleep on it for a few months\"\" no one can mis-apply this. I like those two sites you mentioned, but the one-on-one is good for the friend and for you. You can always learn more, and teaching helps you hone your skills.\"",
"title": ""
},
{
"docid": "87da2357c61d0267338d13fbd7c6e88e",
"text": "\"Genuine (nearly) passive income can be had from some kinds of investing. Index funds are an example of a mostly self-managing investment. Of course investment involves some risk (the income is essentially paying you for taking that risk) and returns are reasonable but proportional to the risk -- IE, not spectacular unless the risk is high. If someone is claiming they can get you better than market rate of return, look carefully at what they are getting out of it and what the risks are. Fees subtract directly from your gains, and if they claim there is no additional risk, they need to prove that. You are giving someone your money. Be very sure you are going to get it back. If it isn't self-evident where the income comes from, it's probably a scam. If someone is using the term \"\"auto-pilot\"\", it is almost certainly a scam. If they are talking about website advertising and the like, it is far from autopilot if you want to make any noticable amount of money (though you may make money for them).\"",
"title": ""
},
{
"docid": "cf54036c6776fec58c6975a58b2792a0",
"text": "A financial advisor is a service professional. It is his/her job to do things for you that you could do for yourself, but you're either too busy to do it yourself (and you want to pay somebody else), or you'd rather not. Just like some people hire tax preparers, or maids, or people to change their oil, or re-roof their houses. Me, I choose to self-manage. I get some advise from Fidelity and Vanguard. But we hired somebody this year to re-roof our house and someone else to paint it.",
"title": ""
},
{
"docid": "e33025156ccff105618c180e01c176c4",
"text": "They've asked you, so your advice is welcome. That's your main concern, really. I'd also ask them how much, and what kind of advice. Do they want you to point them to good websites? On what subjects? Or do they want more personal advice and have you to look over their bank accounts and credit card statements, provide accountability, etc.? Treat them the same way you'd want to be treated if you asked for help on something that you were weak on.",
"title": ""
},
{
"docid": "b86e24022f172c2b6a6d0cd4b4287f16",
"text": "In the case of an investment strategy, if you don't retain custodianship over your funds, or at least determine who is the custodian, then walk away. You should be able to get accurate account statements from a trustworthy third party at all times.",
"title": ""
},
{
"docid": "901f587ef6b4da5a2caa0612bf66b160",
"text": "I think following the professional money managers is a strategy worth considering. The buys from your favorite investors can be taken as strong signals. But you should never buy any stock blindly just because someone else bought it. Be sure do your due diligence before the purchase. The most important question is not what they bought, but why they bought it and how much. To add/comment on Freiheit's points:",
"title": ""
},
{
"docid": "7375b487322935638688af71c2a9a918",
"text": "\"The statement \"\"Finance is something all adults need to deal with but almost nobody learns in school.\"\" hurts me. However I have to disagree, as a finance student, I feel like everyone around me is sound in finance and competition in the finance market is so stiff that I have a hard time even finding a paid internship right now. I think its all about perspective from your circumstances, but back to the question. Personally, I feel that there is no one-size-fits-all financial planning rules. It is very subjective and is absolutely up to an individual regarding his financial goals. The number 1 rule I have of my own is - Do not ever spend what I do not have. Your reflected point is \"\"Always pay off your credit card at the end of each month.\"\", to which I ask, why not spend out of your savings? plan your grocery monies, necessary monthly expenditures, before spending on your \"\"wants\"\" should you have any leftovers. That way, you would not even have to pay credit every month because you don't owe any. Secondly, when you can get the above in check, then you start thinking about saving for the rainy days (i.e. Emergency fund). This is absolutely according to each individual's circumstance and could be regarded as say - 6 months * monthly income. Start saving a portion of your monthly income until you have set up a strong emergency fund you think you will require. After you have done than, and only after, should you start thinking about investments. Personally, health > wealth any time you ask. I always advise my friends/family to secure a minimum health insurance before venturing into investments for returns. You can choose not to and start investing straight away, but should any adverse health conditions hit you, all your returns would be wiped out into paying for treatments unless you are earning disgusting amounts in investment returns. This risk increases when you are handling the bills of your family. When you stick your money into an index ETF, the most powerful tool as a retail investor would be dollar-cost-averaging and I strongly recommend you read up on it. Also, because I am not from the western part of the world, I do not have the cultural mindset that I have to move out and get into a world of debt to live on my own when I reached 18. I have to say I could not be more glad that the culture does not exist in Asian countries. I find that there is absolutely nothing wrong with living with your parents and I still am at age 24. The pressure that culture puts on teenagers is uncalled for and there are no obvious benefits to it, only unmanageable mortgage/rent payments arise from it with the entry level pay that a normal 18 year old could get.\"",
"title": ""
},
{
"docid": "5f1566f3bcced560b9b1cdda113c0d40",
"text": "The common advice you mentioned is just a guideline and has little to do with how your portfolio would look like when you construct it. In order to diversify you would be using correlations and some common sense. Recall the recent global financial crisis, ones of the first to crash were AAA-rated CDO's, stocks and so on. Because correlation is a statistical measure this can work fine when the economy is stable, but it doesn't account for real-life interrelations, especially when population is affected. Once consumers are affected this spans to the entire economy so that sectors that previously seemed unrelated have now been tied together by the fall in demand or reduced ability to pay-off. I always find it funny how US advisers tell you to hold 80% of US stocks and bonds, while UK ones tell you to stick to the UK securities. The same happens all over the world, I would assume. The safest portfolio is a Global Market portfolio, obviously I wouldn't be getting, say, Somalian bonds (if such exist at all), but there are plenty of markets to choose from. A chance of all of them crashing simultaneously is significantly lower. Why don't people include derivatives in their portfolios? Could be because these are mainly short-term, while most of the portfolios are being held for a significant amount of time thus capital and money markets are the key components. Derivatives are used to hedge these portfolios. As for the currencies - by having foreign stocks and bonds you are already exposed to FX risk so you, again, could be using it as a hedging instrument.",
"title": ""
}
] |
fiqa
|
79543b112f41ef73f36586637f586163
|
Including the region where you live in your investment portfolio?
|
[
{
"docid": "95738b7725dea352d912355a70fde454",
"text": "Diversification is a risk-mitigation strategy. When you invest in equities, you generally get a higher rate of return than a fixed income investment. But you have risks... a single company's market value can decline for all sorts of reasons, including factors outside of the control of management. Diversification lets you spread risk and concentrate on sectors that you feel offer the best value. Investing outside of your currency zone allows you to diversify more, but also introduces currency risks, which require a whole other level of understanding. Today, investing in emerging markets is very popular for US investors because these economies are booming and US monetary policy has been weakening the dollar for some time. A major bank failure in China or a flip to a strong dollar policy could literally implode those investments overnight. At the end of the day, invest in what you understand. Know the factors that can lower your investment value.",
"title": ""
},
{
"docid": "a487098eb5d373fc761b2f723dfdff16",
"text": "The problem is aggregating information from so many sources, countries, and economies. You are probably more aware of local laws, local tax changes, local economic performance, etc, so it makes sense that you'd be more in tune with your own country. If your intent is to be fully diversified, then buy a total world fund. A lot of hedge funds do what you are suggesting, but I think it requires either some serious math or some serious research. Note: I'm invested in emerging markets (EEM) for exactly the reason you suggest... diversification.",
"title": ""
},
{
"docid": "be18dd25573348ca2dd5f1fd1b884d88",
"text": "Diversification is just one aspect in an investment portfolio. The other aspects in Investment are Risk Taking Ability, Liquidity, Local Regulations, Tax benefits, Ease & Convenience, Cost of carrying out transactions etc. Investing in other regions is prone FX risk and other risks depending on the region of investment. For example investing in Emerging markets there is a risk of Local Regulations being changed, additional tax being levied, or Political instability and host of such risks. Investing in local markets give you better understanding of such changes and the risk associated is less plus the Ease of carrying out transactions is great, less expensive compared to cost of transactions in other markets. Diversification in Investment should also be looked upon how much you invest in; Equities Debt Bullion Real Estate Once you have a sizeable amount of investment in Equities or Debt, it would then make more sense to diversify this portion more to include funds from other regions. Unless you are an Running your own business, it makes sense to invest in your line of business if that is performing well. The reason being that the benefit / returns from the equities is much greater than the salary rise / bonus. For example I am in Information Technology and yet invest in all leading IT companies because the returns from companies in these segments have been good.",
"title": ""
}
] |
[
{
"docid": "bde532eae5c6c8cbb1770a4bfd7c4d55",
"text": "\"For what it's worth, the distribution I'm currently using is roughly ... with about 2/3 of the money sitting in my 401(k). I should note that this is actually considered a moderately aggressive position. I need to phone my advisor (NOT a broker, so they aren't biased toward things which are more profitable for them) and check whether I've gotten close enough to retirement that I should readjust those numbers. Could I do better? Maybe, at higher risk and higher fees that would be likely to eat most of the improved returns. Or by spending far more time micromanaging my money than I have any interest in. I've validated this distribution using the various stochastic models and it seems to work well enough that I'm generally content with it. (As I noted in a comment elsewhere, many of us will want to get up into this range before we retire -- I figure that if I hit $1.8M I can probably sustain my lifestyle solely on the income, despite expected inflation, and thus be safely covered for life -- so this isn't all that huge a chunk of cash by today's standards. Cue Daffy Duck: \"\"I'm rich! I'm wealthy! I'm comfortably well off!\"\" -- $2M, these days, is \"\"comfortably well off.\"\")\"",
"title": ""
},
{
"docid": "880c472155f647b17b728aa8863c09a8",
"text": "Personally, I do asset allocation separately for personal investing and for retirement investing, as I the two have vastly different purposes and I have vastly different goals for each. YMMV depending on how you view your non-retirement investments, and how close you are to retirement.",
"title": ""
},
{
"docid": "647740b4ae71f5a6f13b36593cb3f041",
"text": "The default of the country will affect the country obligations and what's tied to it. If you have treasury bonds, for example - they'll get hit. If you have cash currency - it will get hit. If you're invested in the stock market, however, it may plunge, but will recover, and in the long run you won't get hit. If you're invested in foreign countries (through foreign currency or foreign stocks that you hold), then the default of your local government may have less affect there, if at all. What you should not, in my humble opinion, be doing is digging holes in the ground or probably not exchange all your cash for gold (although it is considered a safe anchor in case of monetary crisis, so may be worth considering some diversifying your portfolio with some gold). Splitting between banks might not make any difference at all because the value won't change, unless you think that one of the banks will fail (then just close the account there). The bottom line is that the key is diversifying, and you don't have to be a seasoned investor for that. I'm sure there are mutual funds in Greece, just pick several different funds (from several different companies) that provide diversified investment, and put your money there.",
"title": ""
},
{
"docid": "2b6cde81fdb549260eac7262ff180761",
"text": "The idea of an index is that it is representative of the market (or a specific market segment) as a whole, so it will move as the market does. Thus, past performance is not really relevant, unless you want to bank on relative differences between different countries' economies. But that's not the point. By far the most important aspect when choosing index funds is the ongoing cost, usually expressed as Total Expense Ratio (TER), which tells you how much of your investment will be eaten up by trading fees and to pay the funds' operating costs (and profits). This is where index funds beat traditional actively managed funds - it should be below 0.5% The next question is how buying and selling the funds works and what costs it incurs. Do you have to open a dedicated account or can you use a brokerage account at your bank? Is there an account management fee? Do you have to buy the funds at a markup (can you get a discount on it)? Are there flat trading fees? Is there a minimum investment? What lot sizes are possible? Can you set up a monthly payment plan? Can you automatically reinvest dividends/coupons? Then of course you have to decide which index, i.e. which market you want to buy into. My answer in the other question apparently didn't make it clear, but I was talking only about stock indices. You should generally stick to broad, established indices like the MSCI World, S&P 500, Euro Stoxx, or in Australia the All Ordinaries. Among those, it makes some sense to just choose your home country's main index, because that eliminates currency risk and is also often cheaper. Alternatively, you might want to use the opportunity to diversify internationally so that if your country's economy tanks, you won't lose your job and see your investment take a dive. Finally, you should of course choose a well-established, reputable issuer. But this isn't really a business for startups (neither shady nor disruptively consumer-friendly) anyway.",
"title": ""
},
{
"docid": "d917fd88122a0370b8a89e8598d25e42",
"text": "Let's simplify things by assuming you only own 2 stocks. By owning VOO and VTI, you're overweight on large- and mid-cap stocks relative to the market composition. Likewise, by owning VTI and VT, you're overweight on U.S. stocks; conversely, by owning VXUS and VT, you're overweight on non-U.S. stocks. These are all perfectly fine positions to take if that's what you intend and have justification for. For example, if you're in the U.S., it may be a good idea to hold more U.S. stocks than VT because of currency risk. But 4 equity index ETFs is probably overcomplicating things. It is perfectly fine to hold only VTI and VXUS because these funds comprise thousands of stocks and thus give you sufficient diversification. I would recommend holding those 2 ETFs based on a domestic/international allocation that makes sense to you (Vanguard recommends 40% of your stock allocation to be international), and if for some reason you want to be overweight in large- and mid-cap companies, throw in VOO. You can use Morningstar X-Ray to look at your proposed portfolio and find your optimal mix of geographic and stock style allocation.",
"title": ""
},
{
"docid": "135a2e56bf522c48f2db3566edca2a69",
"text": "A foreign stock mutual fund definitely belongs in stocks. It's composed of stocks. Your self occupied house is definitely real estate. You don have to keep in mind,however that selling it would create costs such as rent. I wouldn't leave it out, if doing that would cause you to buy more real estate. This would cause you to be overweighted in the real estate area. I would tend to think if a CD as cash. While it could be considered a bond, as you said the principal doesn't go down. The REIT is the toughest one. I would really like to see a graph showing how correlated it is to the real estate market. That would determine where I would put it.",
"title": ""
},
{
"docid": "503261d5bff005c524a8682b785a5b54",
"text": "International equity are considered shares of companies, which are headquartered outside the United States, for instance Research in Motion (Canada), BMW (Germany), UBS (Switzerland). Some investors argue that adding international equities to a portfolio can reduce its risk due to regional diversification.",
"title": ""
},
{
"docid": "8bb6f2fa37a7dadb2eecc6d87c3f65f2",
"text": "\"In theory, the idea is that diversified assets will perform differently in different circumstances, spreading your risk around. Whether that still functions in practice is a decent question, as the \"\"truth\"\" of most probability based arguments for diversification rely on the different assets being at least somewhat uncorrelated. This article suggests that might not be true. Specifically: The correlations we note among industry sectors are profoundly and dysfunctionally high. and Gold and silver traders have gotten too used to the negative correlation trade with stocks. This is, in fact, an unusual relationship for precious metals tostocks. The correlation should actually be zero.\"",
"title": ""
},
{
"docid": "b814e2e4f943f77864610939f302e619",
"text": "\"I find it interesting that you didn't include something like [Total Bond Market](http://stockcharts.com/freecharts/perf.html?VBMFX), or [Intermediate-Term Treasuries](http://stockcharts.com/freecharts/perf.html?VBIIX), in your graphic. If someone were to have just invested in the DJI or SP500, then they would have ignored the tenants of the Modern Portfolio Theory and not diversified adequately. I wouldn't have been able to stomach a portfolio of 100% stocks, commodities, or metals. My vote goes for: 1.) picking an asset allocation that reflects your tolerance for risk (a good starting point is \"\"age in bonds,\"\" i.e. if you're 30, then hold 30% in bonds); 2.) save as if you're not expecting annualized returns of %10 (for example) and save more; 3.) don't try to pick the next winner, instead broadly invest in the market and hold it. Maybe gold and silver are bubbles soon to burst -- I for one don't know. I don't give the \"\"notion in the investment community\"\" much weight -- as it always is, someday someone will be right, I just don't know who that someone is.\"",
"title": ""
},
{
"docid": "3f53751a09601e4815ee181201e20979",
"text": "\"Over on Quantitative Finance Stack Exchange, I asked and answered a more technical and broader version of this question, Should the average investor hold commodities as part of a broadly diversified portfolio? In short, I believe the answer to your question is that gold is neither an investment nor a hedge against inflation. Although many studies claim that commodities (such as gold) do offer some diversification benefit, the most credible academic study I have seen to date, Should Investors Include Commodities in Their Portfolios After All? New Evidence, shows that a mean-variance investor would not want to allocate any of their portfolio to commodities (this would include gold, presumably). Nevertheless, many asset managers, such as PIMCO, offer funds that are marketed as \"\"real return\"\" or \"\"inflation-managed\"\" and include commodities (including gold) in their portfolios. PIMCO has also commissioned some research, Strategic Asset Allocation and Commodities, claiming that holding some commodities offers both diversification and inflation hedging benefits.\"",
"title": ""
},
{
"docid": "efd0097229164057ef16b3e11f442cf7",
"text": "The closest I can think of from the back of my head is http://finviz.com/map.ashx, which display a nice map and allows for different intervals. It has different scopes (S&P500, ETFs, World), but does not allow for specific date ranges, though.",
"title": ""
},
{
"docid": "4d9f05f39288a85e40d0d2571f7e15c5",
"text": "\"You are in your mid 30's and have 250,000 to put aside for investments- that is a fantastic position to be in. First, let's evaluate all the options you listed. Option 1 I could buy two studio apartments in the center of a European capital city and rent out one apartment on short-term rental and live in the other. Occasionally I could Airbnb the apartment I live in to allow me to travel more (one of my life goals). To say \"\"European capital city\"\" is such a massive generalization, I would disregard this point based on that alone. Athens is a European capital city and so is Berlin but they have very different economies at this point. Let's put that aside for now. You have to beware of the following costs when using property as an investment (this list is non-exhaustive): The positive: you have someone paying the mortgage or allowing you to recoup what you paid for the apartment. But can you guarantee an ROI of 10-15% ? Far from it. If investing in real estate yielded guaranteed results, everyone would do it. This is where we go back to my initial point about \"\"European capital city\"\" being a massive generalization. Option 2 Take a loan at very low interest rate (probably 2-2.5% fixed for 15 years) and buy something a little nicer and bigger. This would be incase I decide to have a family in say, 5 years time. I would need to service the loan at up to EUR 800 / USD 1100 per month. If your life plan is taking you down the path of having a family and needed the larger space for your family, then you need the space to live in and you shouldn't be looking at it as an investment that will give you at least 10% returns. Buying property you intend to live in is as much a life choice as it is an investment. You will treat the property much different from the way something you rent out gets treated. It means you'll be in a better position when you decide to sell but don't go in to this because you think a return is guaranteed. Do it if you think it is what you need to achieve your life goals. Option 3 Buy bonds and shares. But I haven't the faintest idea about how to do that and/or manage a portfolio. If I was to go down that route how do I proceed with some confidence I won't lose all the money? Let's say you are 35 years old. The general rule is that 100 minus your age is what you should put in to equities and the rest in something more conservative. Consider this: This strategy is long term and the finer details are beyond the scope of an answer like this. You have quite some money to invest so you would get preferential treatment at many financial institutions. I want to address your point of having a goal of 10-15% return. Since you mentioned Europe, take a look at this chart for FTSE 100 (one of the more prominent indexes in Europe). You can do the math- the return is no where close to your goals. My objective in mentioning this: your goals might warrant going to much riskier markets (emerging markets). Again, it is beyond the scope of this answer.\"",
"title": ""
},
{
"docid": "4bb3abcd14a58afbb8f891284510f413",
"text": "We face the same issue here in Switzerland. My background: Institutional investment management, currency risk management. My thoughs are: Home Bias is the core concept of your quesiton. You will find many research papers on this topic. The main problems with a high home bias is that the investment universe in your small local investment market is usually geared toward your coutries large corporations. Lack of diversification: In your case: the ASX top 4 are all financials, actually banks, making up almost 25% of the index. I would expect the bond market to be similarly concentrated but I dont know. In a portfolio context, this is certainly a negative. Liquidity: A smaller economy obviously has less large corporations when compared globally (check wikipedia / List_of_public_corporations_by_market_capitalization) thereby offering lower liquidity and a smaller investment universe. Currency Risk: I like your point on not taking a stance on FX. This simplifies the task to find a hedge ratio that minimises portfolio volatility when investing internationally and dealing with currencies. For equities, you would usually find that a hedge ratio anywhere from 0-30% is effective and for bonds one that ranges from 80-100%. The reason is that in an equity portfolio, currency risk contributes less to overall volatility than in a bond portfolio. Therefore you will need to hedge less to achieve the lowest possible risk. Interestingly, from a global perspective, we find, that the AUD is a special case whereby, if you hedge the AUD you actually increase total portfolio risk. Maybe it has to do with the AUD being used in carry trades a lot, but that is a wild guess. Hedged share classes: You could buy the currency hedged shared classes of investment funds to invest globally without taking currency risks. Be careful to read exactly what and how the share class implements its currency hedging though.",
"title": ""
},
{
"docid": "3b7fd84cef86ec642912dd0ad4a815e3",
"text": "\"Most (if not all states) in the US are only interested in source income. If you worked in that state they want to tax it. Many states have reciprocity agreements with neighboring states to exempt income earned when a person works in lets say Virginia, but lives in a state that touches Virginia. Most states don't consider interest and dividends for individuals as source income. They don't care where the bank or mutual fund branch is located, or headquartered.If it is interest from a business they will allocate it to the state where the business is located. If you may ask you to allocate the funds between two states if you move during the year, but most people will just divide the interest and dividends based on the number of days in each state unless there is a way to directly allocate the funds to a particular state. Consider this: Where is the money when it is in a bank with multiple branches? The money is only electronic, and your actual \"\"$'s\"\" may be in a federal reserve branch. Pension funds are invested in projects all over the US.\"",
"title": ""
},
{
"docid": "62c2505b9c73061efe7702f188ad3fbd",
"text": "It's important to realize that any portfolio, if sufficiently diversified should track overall GDP growth, and anything growing via a percentage per annum is going to double eventually. (A good corner-of-napkin estimate is 70/the percentage = years to double). Just looking at your numbers, if you initially put in the full $7000, an increase to $17000 after 10 years represents a return of ~9.3% per annum (to check my math $7000*1.09279^10 ≈ $17000). Since you've been putting in the $7000 over 10 years the return is going to be a bit more than that, but it's not possible to calculate based on the information given. A return of 9.3% is not bad (some rules of thumb: inflation is about 2-4% so if you are making less than that you're losing money, and 6-10% per annum is generally what you should expect if your portfolio is tracking the market)... I wouldn't consider that rate of return to be particularly amazing, but it's not bad either, as you've done better than you would have if you had invested in an ETF tracking the market. The stock market being what it is, you can't rule out the possibility that you got lucky with your stock picks. If your portfolio was low-risk, a return of 9%ish could be considered amazing, but given that it's about 5-6 different stocks what I'd consider amazing would be a return of 15%+ (to give you something to shoot for!) Either way, for your amount of savings you're probably better off going with a mutual fund or an ETF. The return might be slightly lower, but the risk profile is also lower than you picking your stocks, since the fund/ETF will be more diversified. (and it's less work!)",
"title": ""
}
] |
fiqa
|
8f7b078113cc1569bf1920568a137d14
|
Interest on security deposits paid to landlords, in Michigan?
|
[
{
"docid": "818145ff77d44ceac220a0c1f13d4f20",
"text": "NO. The legislation requires the landlord to deposit it in a bank. Check out pages 7-10 of the linked document. There is no mention of interest. The second clause, I believe, is probably for large landlords who hold hundreds of thousands of dollars of security. http://www.legislature.mi.gov/documents/publications/tenantlandlord.pdf Q4 Once collected, what must the landlord do with the security deposit? The landlord must either: a) Deposit the money with a regulated financial institution (e.g., bank), OR b) Deposit a cash bond or surety bond, to secure the entire deposit, with the Secretary of State. ( Note: If the landlord does this, he or she may use the money at any time, for any purpose.) The bond ensures that there is money available to repay the tenant’s security deposit",
"title": ""
},
{
"docid": "cfd81576bb7bf35d9fa0c764680262f3",
"text": "\"No. The full text of the Landlord-Tenant Act (specifically, section 554.614 of Act 348 of the year 1972) makes no mention of this. Searching the law for \"\"interest\"\" doesn't yield anything of interest (pardon the pun). Specifically, section 554.604 of the same law states that: (1) The security deposit shall be deposited in a regulated financial institution. A landlord may use the moneys so deposited for any purposes he desires if he deposits with the secretary of state a cash bond or surety bond written by a surety company licensed to do business in this state and acceptable to the attorney general to secure the entire deposits up to $50,000.00 and 25% of any amount exceeding $50,000.00. The attorney general may find a bond unacceptable based only upon reasonable criteria relating to the sufficiency of the bond, and shall notify the landlord in writing of his reasons for the unacceptability of the bond. (2) The bond shall be for the benefit of persons making security deposits with the landlord. A person for whose benefit the bond is written or his legal representative may bring an action in the district, common pleas or municipal court where the landlord resides or does business for collection on the bond. While it does sound like the landlord is required to deposit the money in a bank or other secured form, e.g. the Secretary of State, he/she isn't required to place it in an account that will earn interest.\"",
"title": ""
}
] |
[
{
"docid": "789692ce410ddf6b795a1358e414f744",
"text": "You don't pay any interest until a few weeks after you receive your statement, when the payment is due. Simply set up a direct debit with Halifax for the statement balance and they will take the correct amount (whatever you spent that month) from your bank account on the payment due date. Problem solved!",
"title": ""
},
{
"docid": "ef3aeab66bcdc9f0fea169a0f2397abc",
"text": "This happens to my dad all the time. He requires a deposit up front, but sometimes he'll let people slide without a deposit, or they refuse to pay the balance or something. After he has called and harrassed them about it, he boxes up the files of people that don't pay and hands it off to a lawyer. He has a deal worked out where he provides the lawyer with all the paperwork and the lawyer gets to keep 20% of whatever he can collect. The rest is just written off. The key thing is determining how much time and money you want to sink trying to get that money back. You don't know the likelihood of actually collecting that money, and every hour you spend on it is an hour you could spend generating more business",
"title": ""
},
{
"docid": "b79473bb909aae086d116bb059928e44",
"text": "To be absolutely sure you should call the agent and check That said I have been renting accommodation through both agencies and directly through landlords for seven years (I live in London) and this is quite a common situation. It normally means that the deposit is being securely held by a third party so that it cannot be taken or depleted without the agreement of both parties. The deposit protection scheme ( https://www.depositprotection.com/ ) is one way that deposits are securely held in this manner. As a third party they will have different account details. It may be the case that the agency is protecting the deposit and you are paying rent to the landlord directly. This means that your deposit goes to the agency's account and the rent goes to the landlord's account. Obviously your landlord and agency have different accounts. A little colour to brighten your day: I am currently paying my rent to the agency who also took the deposit but, because of the way they handle deposits versus rent, the deposit was sent to a different account held by the same agent. In my previous flat I paid the deposit to an agency and the rent directly to the landlord. This resulted in an issue one time where I got the two accounts confused and paid rent to the agency who, after giving me a small slap on the wrist, transferred it to my landlord. In the flat before that I paid rent and the deposit to my landlords' holding company. That is one of the few times that I paid rent and the deposit into the same account. Again check with the agent that one of these situations is the case but this is absolutely normal when renting through an agency.",
"title": ""
},
{
"docid": "9b7f66d0deb3fe87aea9a853975b835d",
"text": "I'm an Aussie and I purchased 5 of these properties from 2008 to 2010. I was looking for positive cash flow on properties for not too much upfront investment. The USA property market made sense because of the high Aussie $$ at the time, the depressed property market in the US and the expensive market here. I used an investment web-site that allowed me to screen properties by yield and after eliminating outliers, went for the city with the highest consistent yield performance. I settled on Toledo, Ohio as it had the highest yields and was severely impacted by the housing crisis. I bought my first property for $18K US which was a little over $17K AUD. The property was a duplex in great condition in a reasonable location. Monthly rentals $US900 and rents guaranteed and direct deposited into my bank account every month by section 8. Taxes $900 a year and $450 a year for water. Total return around $US8,000. My second property was a short sale in a reasonable area. The asking was $US8K and was a single family in good condition already tenanted. I went through the steps with the bank and after a few months, was the proud owner of another tenanted, positive cash flow property returning $600 a month gross. Taxes of $600 a year and water about the same. $US6K NET a year on a property that cost $AUD8K Third and fourth were two single family dwellings in good areas. These both cost $US14K each and returned $US700 a month each. $US28K for two properties that gross around $US15K a year. My fifth property was a tax foreclosure of a guy with 2 kids whose wife had left him and whose friend had stolen the money to repay the property taxes. He was basically on the bones of his butt and was staring down the barrel of being homeless with two kids. The property was in great condition in a reasonable part of town. The property cost me $4K. I signed up the previous owner in a land contract to buy his house back for $US30K. Payments over 10 years at 7% came out to around $US333 per month. I made him an offer whereby if he acted as my property manager, i would forgo the land contract payments and pay him a percentage of the rents in exchange for his services. I would also pay for any work he did on the properties. He jumped at it. Seven years later, we're still working together and he keeps the properties humming. Right now the AUD is around 80c US and looks like falling to around 65c by June 2015. Rental income in Aussie $$ is around $2750 every month. This month (Jan 2015) I have transferred my property manager's house back to him with a quit claim deed and sold the remaining houses for $US100K After taxes and commission I expect to receive in the vicinity of AUD$120K Which is pretty good for a $AUD53K investment. I've also received around $30K in rent a year. I'm of the belief I should be buying when everybody else is selling and selling when everybody else is buying. I'm on the look-out for my next positive cash flow investment and I'm thinking maybe an emerging market smashed by the oil shock. I wish you all happiness and success in your investment. Take care. VR",
"title": ""
},
{
"docid": "fab868581152d6464183e52963bacff7",
"text": "\"To the best of my knowledge, in California there's no such thing as registering a place as a business. There's zoning (residential/commercial/mixed/etc), and there's \"\"a business registered at a place\"\". But there's no \"\"place registered as a business\"\". So you better clarify what it is that you think your landlord did. It may be that the place is used for short term rentals, in which case the landlord may have to have registered a business of short term rentals there, depending on the local municipal or county rules. Specifically regarding the deposit, however, there's a very clear treatment in the California law. The landlord must provide itemized receipt for the amounts out of the deposit that were used, and the prices should be reasonable and based on the actual charges by the actual vendors. If you didn't get such a receipt, or the amounts are bogus and unsubstantiated - you have protection under the CA law.\"",
"title": ""
},
{
"docid": "849865233681cf162c72b2fb2ed4fc5a",
"text": "\"Do you now own your new home, or are you renting? This is a classic case of a mortgage ready to blow up. These 7/1 interest only would have a low rate, say 3%. So on $200K, the payment is $500/mo, but no principal paydown. Even if the rate were still 3% (it won't be) the 23 yr amortization means a payment of $1004 after the 7 years end. At 4%, it's $1109. 5%, $1221. I would take this all into account as you decide what to do. If you now own a new house, you should consider the morally questionable walk-away. I believe you were sold an unethical product. mb wrote \"\"shoot up considerably.\"\" This is still an understatement. A product whose payment is certain to double in a fixed time is 'bad.' 'Bad' in the biblical sense. You have no obligation to keep any deal with the devil, which is exactly what you have. There are some banks offering FHA products that might help you. I just received an offer from the bank holding a mortgage on my rental property. It's 4.5% for a refinance up to 125% of current value. There's a cost of $1800, but I owe so little, and am paying it off faster than the time left, I'm not bothering. You may benefit from such a program, but I'd still question if you can make a go of a house that even 2% underwater. Do some math, and see if you started now with a 30 year loan how the numbers work out. (Forgive my soapbox stance on this. There are those who criticize the strategic defaulters. I think you fall into a group of innocent victims who were sold a product that was nothing less than a financial time bomb. I am very curious to know the original \"\"interest only\"\" rate, and the index/margin for the rate upon adjustment. If you include the original balance, I can tell you the exact payments based on the new rates pretty easily.)\"",
"title": ""
},
{
"docid": "e807c92da46aa5593ceb19e23329ecb6",
"text": "Michigan's 529 plan offers a wide variety of investment options, ranging from a very conservative guaranteed investment option (currently earning 1.75% interest) to a variety of index-based funds, most of which are considered aggressive. You said that you are unhappy with the 5% you have earned the past year, and that you thought you should be able to get 8% elsewhere. But according to your comment, you have 30% of your money earning a fixed 1.75% rate, and another 40% of your money invested in one of the moderate balanced options (which includes both stocks and bonds). You've only got 30% invested in the more aggressive investments that you seem to be looking for. If you want to be invested more agressively (which is reasonable, since your daughter won't need this money for many years), you can select more aggressive investments inside the 529. Michigan's 529 offers you the ability to deduct up to $10,000 (if you are married filing jointly) of contributions off your Michigan state income tax each year. In addition, the earnings inside the 529 are federally tax-free if the money is spent on college education.",
"title": ""
},
{
"docid": "31720da99062e7b85434b76a2d139dc8",
"text": "\"I have never seen anything that suggest it's illegal to charge \"\"fair\"\" interests on loans, personally or commercially. Even CRA has long allowed the use of properly written \"\"promissory notes\"\" as the proof for personal loans between individuals, as long as the rates are consistent with their current \"\"subscribed rate\"\" (think bank's prime rate, if you don't want to having to look it up on CRA site). Loan Shark is someone or some entity that charges significantly higher interests than the rates posted by FI's. We are talking about 30+% versus the bank's 10%. Yes, we can argue the FI's are acting like Loan Shark when it comes to credit card interest rates, but that's another discussion.\"",
"title": ""
},
{
"docid": "64b5152109801f6c7a91e2afffa778a4",
"text": "\"Loans do not carry an \"\"interest balance\"\". You can not pay off \"\"all the interest\"\". The only way to reduce the interest to zero is to pay off the loan. Otherwise, the interest due each month is some percentage of the outstanding principal. Think of it from the bank's perspective: they've invested some amount of money in you, and they expect a return on that investment in the form of interest. If you somehow paid in 16 years all the interest the bank expected to receive in 30 years, you've been scammed.\"",
"title": ""
},
{
"docid": "716556dc8e2ec8e89a0b9229f91bd0c6",
"text": "You're asking all the right questions, and if I worked for my landlord's company I might have an answer! I imagine they're capitalizing on people's laziness. I live in the Bay Area where some people probably don't mind paying $35 to not have to walk 100 feet to the office and drop off a check.",
"title": ""
},
{
"docid": "83b726abb06b3facfd6be7b430d842bc",
"text": "Good! The article says it was some kind of collateral protection insurance that customers were signed up for despite it being unrequired for the loan. The accusations is that WF racketeered about 800,000 loans by bundling in this bunk insurance cost as part of the loan structure. I'm glad you're not caught up in it.",
"title": ""
},
{
"docid": "b2b8f0ca38cc525fda0918c857ec66d7",
"text": "Yes it most cases it is legal. Plus depending on how you look at it, the last payment of 1000 can be principal paid and interest was paid in initial installments.",
"title": ""
},
{
"docid": "531c24fc4799a873aaae9d2509686043",
"text": "What are you using the analysis for? If your analyzing your interest rate risk then you want to determine decay rates for your non-maturity deposits. Assuming your bank uses ALM software to produce your Earnings-at-Risk (EAR) and Economic Value of Equity (EVE) metrics, the decay rate assumptions make a big difference in those numbers. Most ALM models have default assumptions that may not be correct for your institution, and as a result are giving you EAR and EVE numbers that are not at all accurate. Basically you want to have some analysis that proves how you are bucketing your NMDs (3,6,9, 12, 24 months?). Are your deposits sticky or are they affected by small changes in interest rates? You can look at historical numbers to determine how your deposits behave, but be sure to go back more than 3-4 years as deposit behavior has been pretty abnormal since 2008 with rates near zero. Similarly, you may want to try and identify 'surge' deposits that came into your bank due to the low rate environment and as soon as rates rise they will move into higher earning assets (stocks, bond, money markets).",
"title": ""
},
{
"docid": "bc86e5c2e5f05a875a6661be66ed5bcb",
"text": "Sometimes invested capital is expected to earn interest, I've seen this be a stipulation in LLC operating agreements and Corporate bylaws. I thought this arrangement looks a little less than fair. BTW I'm a college freshman, though I do the finances for my parents' regulatory compliance and governance consulting company. Anyhow, that's just my two cents.",
"title": ""
},
{
"docid": "07853fa175f861e90859a420391f7217",
"text": "\"You get paid interest on deposits because banks only keep a fraction of the deposits on-hand. The rest is put to other uses, such as loaning money to others. If you deposit money and yield 1% interest, the bank is able to fund an auto loan, at 5%. By saving, you are actually making more capital available in the marketplace. \"\"Fixed\"\" or \"\"durable\"\" assets like gold, real property, or durable goods are different -- their value is based on attributes such as demand (gold, oil) or location (real property). If you bought an apartment in Manhattan in 1975, it appreciated greatly in value over the course of 30 years... but it did so because demand for apartments in New York City grew, while the supply of apartments grew more slowly. The government prints money for two core reasons: Think of it this way: Money is valuable because it is money.\"",
"title": ""
}
] |
fiqa
|
7f918f31fd3334723fc414c4b2631f2e
|
Bank of the Sierra: Are they legit? How can the checking interest APY be so high?
|
[
{
"docid": "50f5a406ae63d09915ea626bbcf6eaac",
"text": "The FDIC is pretty confident about them being legit. http://www2.fdic.gov/idasp/main_bankfind.asp (type in Bank Of The Sierra in the name field and search on that) You got to realize how much money they will make if you use them per the agreement. Every credit card / debit transaction gets them some cash. Businesses get between 1 and 5% of each transaction even on debit cards. Then there is a flat fee the merchant pays for accepting the credit card between .25 and .50 per transaction. Even at 12 transactions a month, the bank is looking at making around $6/month. Probably more because who uses a debit card just 12 times a month. It would be convenient for most people to juse use it all the time. Does 4.09% APY beat $6/month? You would have to keep a balance of $2000 plus to cost more than you earn. And if you keep more than $2k in the account, they have other ways to make money off of you. I would also assume they make money on the bill pay and direct deposit side of things, but I can't speak for certain about that. Bottom line is this seems like a good deal to attract customers, they would rather make a bit less profit then BofA to grow their business. They are betting their offer restrictions will change your habits and make you more profitable to them.",
"title": ""
},
{
"docid": "a9bc8164220c18ba77ee593c6382400f",
"text": "\"I believe MrChrister's answer is correct: Since they're FDIC insured, they are \"\"legit.\"\" Second, on the seemingly too-good-to-be-true rate: They're basically making up the difference on other fees (not necessarily paid by you) in order to offer you the higher-than-market rate. I'd like to point out two things not mentioned about the current rate offer, though: The high 4.09% APY advertised is only on balances up to $25,000; anything over that threshold is at a lower 1.01% APY. The offer also states in the footnotes: \"\"Rates may change after the account is opened.\"\" You might want to see if they have a good history of paying higher than average interest rates. You wouldn't want to switch only to find out the promotional rate was a teaser that soon gets reduced.\"",
"title": ""
}
] |
[
{
"docid": "31fc9c275253a8a25056530c6bdd76d5",
"text": "I read an article where this website did an interview with them and concluded its very sketchy and possibly illegal. They refused to give out their FDIC number and they got the high interest rate by selling personal customer information to third parties",
"title": ""
},
{
"docid": "63149c46d2348ca9f7ea75989331bfee",
"text": "From what I Understand, people put up with BofA because it's convenient in that there are branches everywhere in the country. Not sure if it's worth it, but if you're a normal banking customer, your won't face any of those fees.",
"title": ""
},
{
"docid": "cb4162c5533d3365d1aae1ce002dad60",
"text": "Check your calculation of A**. I was able to duplicate their calculations using excel. Make you sure have accounted for all the terms, it can be easy to be one off. They are making a guess at the interest rate which will be wrong, then they are adjusting it to see how wrong it is, then making another adjustment. They will repeat until they see no movement in the guesses.",
"title": ""
},
{
"docid": "0529995b24384305ac69fd7a28a6cf01",
"text": "I had a modest car loan with Chase. I always felt like they were trying to fuck me over. They charged for electronic payments, would mail the payment coupon (the bill) less than two weeks before it was due each month, the payment schedule seemed to wander, etc. I was constantly stressing that I was going to miss a payment and incur a large late fee. This was on just a small car loan. I've heard they've gotten better (electric payments don't cost extra anymore) but it definitely made me feel very adversarial with banks.",
"title": ""
},
{
"docid": "6c7a46fe492c59213577f579bccc7310",
"text": "Yes it should be a ACH or other electronic transfer. However, it not unusual to have checks sent for large amounts in corporate banking. Large companies don't give large checks to tellers, they have it sent to a lockbox. However, lockboxes are suited for payment of invoices and I never heard of a billion dollar invoice. edit: Also, I believe that some of the bailouts were done in checks, but honestly I'm not 100% on that.",
"title": ""
},
{
"docid": "32d1ce2d6b5eb89c3d4d17ff96505c4a",
"text": "\"Let me guess, it's a fairly large amount of money, a few thousand at least. This is a scam. This is a variation on the many fake check scams out there. You deposit the check and you think it \"\"cleared\"\" your bank, but it didn't clear. A clever fake check can take a couple weeks to bounce and the bank will demand the money back. Any money you wire back to the fraudster in the meantime will be lost forever.\"",
"title": ""
},
{
"docid": "3440392865922705522359d6a305d0c9",
"text": "I concur with the answers above - the difference is about the risk. But in this particular case I find the interest level implausible. 11% interest on deposits in USD seems very speculative and unsustainable. You can't guarantee such return on investment unless you engage in drug trade or some other illegal activity. Or it is a Ponzi scheme. So I would suspect that the bank is having liquidity problems. Which bank is it, by the way? We had a similar case in Bulgaria with one bank offering abnormal interest on deposits in EUR and USD. It went bust - the small depositors were rescued by the local version of FDIC but the large ones were destroyed.",
"title": ""
},
{
"docid": "20f44923b11f478b4343fc8dcecd6bdd",
"text": "Go to your local credit union and open an account there! Why do people put up with banks? Big banks are for business not for regular folks, they will nickel and dime you all the time, and that's the honest ones, the scum like WF will just trash you.",
"title": ""
},
{
"docid": "da7ca13310fe4d4a7607b6123f0a1b8a",
"text": "I would suggest a high interest checking account if you qualify, or if you don't, an Investor's Deposit Account (IDA).",
"title": ""
},
{
"docid": "37c92235ba646978f24e7933ffa9da44",
"text": "No, we did not apply for the loan. So, this is why we thought it was a bit strange a company just sending you a real check for $30K. It does not say anywhere in big red letters that it is a loan. Probably something in very small letters on a back of a paper. This is really horrible. Especially,if your customers do pay you by check and small business relies on online statement to determine who paid what. I can easily imagine a small outfit that just takes all the checks to the bank, cash them, and then use online statement to update their books. I do not see how it is helpful to businesses to receive pre-approved credit that is so poorly marked. Especially in the age of electronic transfers!!! I am trying to understand why I feel so offended by this, and I guess it all comes down to disgust: I refuse to believe that any serious company would use these sort of tactics and instead of us spending more time developing a better product, we have to put more time and effort into ensuring we do not fall victim to this.",
"title": ""
},
{
"docid": "e6062d1d56fd7a847048feadf670efed",
"text": "I think part of the reason people overdraft is because the online banking app/website doesn't show a true indication of your account balance. I've had mine (at Bank of America) adjust to $30 less than it told me I had when I checked due to processing payments being altered.",
"title": ""
},
{
"docid": "a861a9efd39b0ae336560628fd4300fa",
"text": "Mango is legit, there are some other forums out there with some reviews and discussion about whether or not it's worth the effort of setting it up and following the rules to realize the maximum benefit. The main downside is that Mango is fee-heavy: ATM fees, monthly fees, etc. One person did a calculation that if you follow all the rules and minimize fees, your maximum benefit above what you can get at other online banks with enticing rewards or interest rates is about $250/yr. Is $250 worth the hassle of following the Mango rules? You'll have to decide.",
"title": ""
},
{
"docid": "2bb927370e4c9c826f2438fd12069a89",
"text": "\"This is another version of an old scam -- \"\"let me have a check deposited in your account because I can't open one for some reason, and I'll share some of the money with you.\"\" Here the scammer is promising to \"\"start a business\"\" with you as a way to gain your confidence and trust. The first danger sign is that you only know this person from online. They are not someone you are friends with in the \"\"real\"\" world. They could be anybody. They used the name of a big company as a way to make what they're doing sound legitimate, but it's all a fraud. They could be depositing a faked Exxon check into your account, which could land YOU in huge trouble. Here's the thing -- The only way Exxon (or any other company) can deposit money in a bank under someone's name is if that person provides the account and routing numbers to an account that already exists. No company can just create an account in another person's name. That's Hollywood movie stuff, but it's not how banking works. To open an account, the bank would need identification on the account holder, so your \"\"friend\"\" already has an account if Exxon has allegedly deposited money. Further, Exxon isn't going to take back money that has already been deposited. In fact, they can't take it back. If the account is in his name, they can't do anything to the account or with the account. This is a situation you should run away from and never look back. Nothing about this story sounds right or legitimate, but this is one of the oldest scams out there since the beginning of the Internet. You would be well advised to stay VERY far away from your supposed friend, because they're anything but your friend. You are being SCAMMED. Don't be a victim. Stop communicating with this person immediately, and DON'T give them any personal information of any kind. They're crooks! I hope this helps. Good luck!\"",
"title": ""
},
{
"docid": "e1ad7031369090557f0e17e239c0db35",
"text": "And this is why we calculate actual yield and not just coupons. Nobody pays par for high yield notes. If the company performs well, the price of your note goes up and you can realize a gain when is called or your sell it. High yield works exactly like equity, and in a lot of cases it's better because it spits out cash in the meantime. I'm not even allowed to call the interest I get on my HY notes as interest. All realized gain.",
"title": ""
},
{
"docid": "bdfc3e853580c00d5da19e51a2631af0",
"text": "\"Based on what you asked and your various comments on other answers, this is the first time that you will be making an offer to buy a house, and it seems that the seller is not using a real-estate agent to sell the house, that is, it is what is called a FSBO (for sale by owner) property (and you can learn a lot of about the seller's perspective by visiting fsbo.com). On the other hand, you are a FTB (first-time buyer) and I strongly recommend that you find out about the purchase process by Googling for \"\"first-time home buyer\"\" and reading some of the articles there. But most important, I urge you DO NOT make a written offer to purchase the property until you understand a lot more than you currently do, and a lot more than all the answers here are telling you about making an offer to buy this property. Even when you feel absolutely confident that you understand everything, hire a real-estate lawyer or a real-estate agent to write the actual offer itself (the agent might well use a standard purchase offer form that his company uses, or the State mandates, and just fill in the blanks). Yes, you will need to pay a fee to these people but it is very important for your own protection, and so don't just wing it when making an offer to purchase. As to how much you should offer, it depends on how much you can afford to pay. I will ignore the possibility that you are rich enough that you can pay cash for the purchase and assume that you will, like most people, be needing to get a mortgage loan to buy the house. Most banks prefer not to lend more than 80% of the appraised value of the house, with the balance of the purchase price coming from your personal funds. They will in some cases, loan more than 80% but will usually charge higher interest rate on the loan, require you to pay mortgage insurance, etc. Now, the appraised value is not determined until the bank sends its own appraiser to look at the property, and this does not happen until your bid has been accepted by the seller. What if your bid (say $500K) is much larger than the appraised value $400K on which the bank is willing to lend you only $320K ? Well, you can still proceed with the deal if you have $180K available to make the pay the rest. Or, you can let the deal fall apart if you have made a properly written offer that contains the usual contingency clause that you will be applying for a mortgage of $400K at rate not to exceed x% and that if you can't get a mortgage commitment within y days, the deal is off. Absent such a clause, you will lose the earnest money that you put into escrow for failure to follow through with the contract to purchase for $500K. Making an offer in the same ballpark as the market value lessens the chances of having the deal fall through. Note also that even if the appraised value is $500K, the bank might refuse to lend you $400K if your loan application and credit report suggest that you will have difficulty making the payments on a $400K mortgage. It is a good idea to get a pre-approval from a lender saying that based on the financial information that you have provided, you will likely be approved for a mortgage of $Z (that is, the bank thinks that you can afford the payments on a mortgage of as much as $Z). That way, you have some feel for how much house you can afford, and that should affect what kinds of property you should be bidding on.\"",
"title": ""
}
] |
fiqa
|
024bbd364c86deff546f3dadf17cfb1f
|
How does historical data get adjusted for dividends, exactly?
|
[
{
"docid": "cc596ab411b839e7fddc66f3efd63334",
"text": "Various types of corporate actions will precipitate a price adjustment. In the case of dividends, the cash that will be paid out as a dividend to share holders forms part of a company's equity. Once the company pays a dividend, that cash is no longer part of the company's equity and the share price is adjusted accordingly. For example, if Apple is trading at $101 per share at the close of business on the day prior to going ex-dividend, and a dividend of $1 per share has been declared, then the closing price will be adjusted by $1 to give a closing quote of $100. Although the dividend is not paid out until the dividend pay date, the share price is adjusted at the close of business on the day prior to the ex-dividend date since any new purchases on or after the ex-dividend date are not entitled to receive the dividend distribution, so in effect new purchases are buying on the basis of a reduced equity. It will be the exchange providing the quote that performs the price adjustment, not Google or Yahoo. The exchange will perform the adjustment at the close prior to each ex-dividend date, so when you are looking at historical data you are looking at price data that includes each adjustment.",
"title": ""
},
{
"docid": "4790ea74aca7de852479ef515061a8c3",
"text": "If you download the historical data from Yahoo, you will see two different close prices. The one labeled 'Close' is simply the price that was quoted on that particular day. The one labeled 'Adj Close' is the close price that has been adjusted for any splits and dividends that have occurred after that date. For example, if a stock splits 10:1 on a particular date, then the adjusted close for all dates prior to that split will have been divided by 10. If a dividend is paid, then all dates prior will have that amount subtracted from their adjusted quote. Using the adjusted close allows you to compare any two dates and see the true relative return.",
"title": ""
},
{
"docid": "cd44af0ba38fa7d68265e7bc6603f04d",
"text": "According to Active Equity Management by Zhou and Jain: When a stock pays dividend, the adjusted price in Yahoo makes the following adjustment: Let T be the ex-dividend date (the first date that the buyers of a stock will not receive the dividend) and T-1 be the last trading day before T. All prices before T are adjusted by a multiplier (C_{T-1} - d_T)/C_{T-1}, where C_{T-1} is the close price at T-1 and d_T is the dividend per share. This, of course means that the price before T decreases.",
"title": ""
},
{
"docid": "0b2b5a994cca7939cf4143da8b2514a0",
"text": "\"I had both closing price and adjusted price of Apple showing the same amount after \"\"download data\"\" csv file was opened in excel. https://finance.yahoo.com/quote/AAPL/history?period1=1463599361&period2=1495135361&interval=div%7Csplit&filter=split&frequency=1d Its frustrating. My last option was to get the dividends history of the stock and add back to the adjusted price to compute the total return for a select stock for the period.\"",
"title": ""
}
] |
[
{
"docid": "22ea84df5765d24026478526849a4fb6",
"text": "Don't ever quantify a stock's preference/performance just based on the dividend it is paying out Volatility defined by movements in the the stock's price, affected by factors embedded in the stock e.g. the corporation, the business it is in, the economy, the management etc etc. Apple wasn't paying dividends but people were still buying into it. Same with Amazon, Berkshire, Google. These companies create value by investing their earnings back into their company and this is reflected in their share prices. Their earnings create more value in this way for the stockholders. The holding structures of these companies also help them in their motives. Supposedly $100 invested in either stocks. For keeping things easy, you invested at the same time in both, single annual dividend and prices more or less remain constant. Company A: $5/share at 20% annual dividend yield. Dividend = $20 Company B: $10/share at 20% annual dividend yield Dividend = $20 You receive the same dividend in both cases. Volatility willn't affect you unless you are trading, or the stock market tanks, or some very bad news comes out of either company or on the economy. Volatility in the long term averages out, except in specific outlier cases e.g. Lehman bankruptcy and the financial crash which are rare but do happen. In general case the %price movements in both stocks would more or less follow the markets (not exactly though) except when relevant news for either corporations come out.",
"title": ""
},
{
"docid": "f2b2cd5d67aa4c7040942dcefbcbc302",
"text": "The biggest issue with Yahoo Finance is the recent change to the API in May. The data is good quality, includes both dividend/split adjusted and raw prices, but it's much more difficult to pull the data with packages like R quantmod than before. Google is fine as well, but there are some missing data points and you can't unadjust the prices (or is it that they're all unadjusted and you can't get adjusted? I can't recall). I use Google at home, when I can't pull from Bloomberg directly and when I'm not too concerned with accuracy. Quandl seems quite good but I haven't tried them. There's also a newer website called www.alphavantage.co, I haven't tried them yet either but their data seems to be pretty good quality from what I've heard.",
"title": ""
},
{
"docid": "d3d42480931d9f5d13947a15a0739972",
"text": "Do you realise that the examples you have given are for stock splits not for dividends, that is why the date payable is before the ex-date for the split. The payments for the split occur on 30th June and the first day the stock trades with the new split is on the next trading day, being the ex-date, 1st July.",
"title": ""
},
{
"docid": "9ee6ef014bea7ddd8fbdc6c5770d5a80",
"text": "For implied volatility it is okey to use Black and scholes but what to do with the historical volatility which carry the effect of past prices as a predictor of future prices.And then precisely the conditional historical volatility.i suggest that you must go with the process like, for stock returns 1) first download stock prices into excel sheet 2) take the natural log of (P1/po) 3) calculate average of the sample 4) calculate square of (X-Xbar) 5) take square root of this and you will get the standard deviation of your required data.",
"title": ""
},
{
"docid": "b0f869c36cbaef461e171d52dc5b2204",
"text": "What you're referring to is the yield. The issue with these sorts of calculations is that the dividend isn't guaranteed until it's declared. It may have paid the quarterly dividend like clockwork for the last decade, that does not guarantee it will pay this quarter. Regarding question number 2. Yield is generally an after the fact calculation. Dividends are paid out of current or retained earnings. If the company becomes hot and the stock price doubles, but earnings are relatively similar, the dividend will not be doubled to maintain the prior yield; the yield will instead be halved because the dividend per share was made more expensive to attain due to the increased share price. As for the calculation, obviously your yield will likely vary from the yield published on services like Google and Yahoo finance. The variation is strictly based on the price you paid for the share. Dividend per share is a declared amount. Assuming a $10 share paying a quarterly dividend of $0.25 your yield is: Now figure that you paid $8.75 for the share. Now the way dividends are allocated to shareholders depends on dates published when the dividend is declared. The day you purchase the share, the day your transaction clears etc are all vital to being paid a particular dividend. Here's a link to the SEC with related information: https://www.sec.gov/answers/dividen.htm I suppose it goes without saying but, historical dividend payments should not be your sole evaluation criteria. Personally, I would be extremely wary of a company paying a 40% dividend ($1 quarterly dividend on a $10 stock), it's very possible that in your example bar corp is a more sound investment. Additionally, this has really nothing to do with P/E (price/earnings) ratios.",
"title": ""
},
{
"docid": "5706f44f1804fb9fdef2c7144dcbfe14",
"text": "Adjusting for a market change from day to day, the dividend should have no impact on you. Your X shares time $Y should be nearly identical right after that dividend hits the account. And within the 401(k) or IRA for that matter, the accounting doesn't matter most of the time. Outside a retirement account, you need to pay tax on the dividend, and add the newly purchased shares' cost to your cost basis.",
"title": ""
},
{
"docid": "77910cb1a35f144cf084c07e12dd9ba9",
"text": "I am mostly interested in day to day records, and would like the data to contain information such as dividend payouts, and other parameters commonly available, such as on : http://finviz.com/screener.ashx ... but the kind of queries you can do is limited. For instance you can only go back two years.",
"title": ""
},
{
"docid": "188c35f2cf0a3c4db73b1b2821dc442b",
"text": "\"If a stock is trading for $11 per share just before a $1 per share dividend is declared, then the share price drops to $10 per share immediately following the declaration. If you owned 100 shares (valued at $1100) before the dividend was declared, then you still own 100 shares (now valued at $1000). Generally, if the dividend is paid today, only the owners of shares as of yesterday evening (or the day before maybe) get paid the dividend. If you bought those 100 shares only this morning, the dividend gets paid to the seller (who owned the stock until yesterday evening), not to you. You just \"\"bought a dividend:\"\" paying $1100 for 100 shares that are worth only $1000 at the end of the day, whereas if you had just been a little less eager to purchase right now, you could have bought those 100 shares for only $1000. But, looking at the bright side, if you bought the shares earlier than yesterday, you get paid the dividend. So, assuming that you bought the shares in timely fashion, your holdings just lost value and are worth only $1000. What you do have is the promise that in a couple of days time, you will be paid $100 as the dividend, thus restoring the asset value back to what it was earlier. Now, if you had asked your broker to re-invest the dividend back into the same stock, then, assuming that the stock price did not change in the interim due to normal market fluctuations, you would get another 10 shares for that $100 dividend making the value of your investment $1100 again (110 shares at $10 each), exactly what it was before the dividend was paid. If you didn't choose to reinvest the dividend, you would still have the 100 shares (worth $1000) plus $100 cash. So, regardless of what other investors choose to do, your asset value does not change as a result of the dividend. What does change is your net worth because that dividend amount is taxable (regardless of whether you chose to reinvest or not) and so your (tax) liability just increased.\"",
"title": ""
},
{
"docid": "e80cc5163e18d81954a1a7decbd86e89",
"text": "\"In addition to the other answers it's also noteworthy that the stock exchanges themselves adjust the price quotes via their ex-div mechanism. All limit orders present in the book when the stock goes ex-div will be adjusted by the dividend. Which means you can't even get \"\"accidentally\"\" filled in the very unlikely case that everyone forgot to adjust their quotes.\"",
"title": ""
},
{
"docid": "dda0fb223ab5a85f71808cc1cc96cd93",
"text": "\"Good observation. In fact, the S&P index itself is guilty of not including dividends. So when you look at the index alone, the delta between any two points in time diverges, and the 20 return observed if one fails to include dividends is meaningless, in my my humble opinion. Yahoo finance will let you look at a stock ticker and offer you an \"\"adjusted close\"\" to include the dividend effect.\"",
"title": ""
},
{
"docid": "d304e33e18f5f22766283a4d16a7ca8b",
"text": "http://finance.yahoo.com/q/hp?s=EDV+Historical+Prices shows this which matches Vanguard: Mar 24, 2014 0.769 Dividend Your download link doesn't specify dates which makes me wonder if it is a cumulative distribution or something else as one can wonder how did you ensure that the URL is specifying to list only the most recent distribution and not something else. For example, try this URL which specifies date information in the a,b,c,d,e,f parameters: http://real-chart.finance.yahoo.com/table.csv?s=EDV&a=00&b=29&c=2014&d=05&e=16&f=2014&g=v&ignore=.csv",
"title": ""
},
{
"docid": "04870e2e53ff714d4ec85e6dec4a22ee",
"text": "One big difference: Interest is contracted. They can change the rate in the future but for any given time period you know what you're going to get. Dividends are based on how the company did, there is no agreed-upon amount.",
"title": ""
},
{
"docid": "5fa54cf62db12e34c6926ed17d54279e",
"text": "\"Almost every online datasources provide historical prices on given company / index's performance; from this, you can easily calculate \"\"standard deviation\"\" by yourself. With that said, standard deviation presumes a fixed set of data. Most public corporations have data spanning multiple decades, during which a number of things have changed: For these reasons, I have doubts on simplistic measures, such as \"\"standard deviation\"\" measuring any reality on the underlying vehicle. Professional investors usually tend to more time-point data, such as P/E ratio.\"",
"title": ""
},
{
"docid": "90f3ac4042a941d61e7a35f1938326dc",
"text": "\"The Securities Industry and Financial Markets Association (SIFMA) publishes these and other relevant data on their Statistics page, in the \"\"Treasury & Agency\"\" section. The volume spreadsheet contains annual and monthly data with bins for varying maturities. These data only go back as far as January 2001 (in most cases). SIFMA also publishes treasury issuances with monthly data for bills, notes, bonds, etc. going back as far as January 1980. Most of this information comes from the Daily Treasury Statements, so that's another source of specific information that you could aggregate yourself. Somewhere I have a parser for the historical data (since the Treasury doesn't provide it directly; it's only available as daily text files). I'll post it if I can find it. It's buried somewhere at home, I think.\"",
"title": ""
},
{
"docid": "63980f924fc504831cdf2dbc4767afaf",
"text": "Yahoo provides dividend data from their Historical Prices section, and selecting Dividends Only, along with the dates you wish to return data for. Here is an example of BHP's dividends dating back to 1998. Further, you can download directly to *.csv format if you wish: http://real-chart.finance.yahoo.com/table.csv?s=BHP.AX&a=00&b=29&c=1988&d=06&e=6&f=2015&g=v&ignore=.csv",
"title": ""
}
] |
fiqa
|
f11d618c344e2a049d44c3bbec1eb287
|
What economic, political and other factors influence mortgage rates (and how)?
|
[
{
"docid": "fc0fe46942d5a9dcdd3fcefed406a418",
"text": "\"If you owned a bank how would you invest the bank's money? Typically banks are involved in loaning out money to businesses, people, and government at a higher interest rate then what they are paying to depositors. This is the spread and how they make money. If the bank determines that the yields on government bonds is more attractive then loaning the money out to businesses and people then the bank will purchase government bonds. It can also decide the other way. In this manner the mortgage and bond markets are always competing for capital and tend to offer very similar yields. Certain banks have the unique privilege of being able to borrow money from the FED at the Federal Funds rate and use this money to purchase government debt or loan it out to other banks or purchase other debt products. In this manner you see a high correlation between the FED funds rate, mortgage rates, and treasury yields. Other political factors include legislation that encourages mortgage lending (see Community Reinvestment Act) where banks may not have made the loans without said legislation. In short, keep your eye on the FED and ask yourself: \"\"Does the FED want rates to rise?\"\" and \"\"Can the US government afford rising rates?\"\" The answer to these two questions is no. However, the FED may be pressured to \"\"stop the presses\"\" if inflation becomes unwieldy and the FED actually starts to care about food and energy prices. So far this hasn't been the case.\"",
"title": ""
},
{
"docid": "e651a251829a7dbecf27ec87e52537b0",
"text": "Without commenting on whether or not it's needed I don't think we are going to see a QE3 and all the political pressure is for some reason to start raising rates. Regardless of how it plays out it's safe to say that the Fed Rate isn't going any lower. You should also watch closely what happens to Fannie and Freddie. If they are dismantled and government backed mortgages become a thing of the past then I think it'll become impossible for a consumer to find a 30 year fixed rate mortgage. Even if they are kept alive, they will be put on a short leash and that will serve to further depress the mortgage market. Long story short, I'd lock your rate in.",
"title": ""
}
] |
[
{
"docid": "e2be48d370930b6b5a2b1b9f265e806d",
"text": "While it is true that if the Federal reserve bank makes a change in their rate there is not an immediate change in the other rates that impact consumers; there is some linkage between the federal rate, and the costs of banks and other lenders regarding borrowing money. Of course the cost of borrowing money does impact the costs for businesses looking to expand, which does impact their ability to hire more workers and expand capacity. A change in business expansion does impact employment and unemployment... Then changes in employment can cause a change in raises, which can cause changes in prices which is inflation... Plus the lenders that lend to business see the flow of new loans change as the employment outlook change. If the costs of doing business for the bank changes or the flow of loans change, they do adjust the rates they pay depositors and the rates they charge borrowers... How long it will take to change the cost of an auto loan? No way to tell. Keep in mind that in complex systems, change can be delayed, and won't move in lock step. For example the price of gas\\s doesn't always move the same way a price of a barrel of oil does.",
"title": ""
},
{
"docid": "b7a87386730386fa1673c55140cb20d0",
"text": "Perhaps the world does not like a Global economy dominated by a Fucking Moron, Perhaps the world does not see a future in a Jew dominated Fed that can print whatever it thinks sounds like fun and then lend it to the US treasury in an insurmountable mountain of debt. Gosh . . .isn't the FED supposed to be pretending to unwind all that 0 market valuation crap from 2008 ? I wonder if there are even any houses after a decade",
"title": ""
},
{
"docid": "855d6bdeba3cb99fb8d00493d3a5549b",
"text": "\"The price of real estate reacts to both demand for property and the rate of inflation and rate of income growth. Mortgage rates generally move as treasury rates move. See this paragraph: As we mentioned, intermediate term bonds and long-term mortgages (more properly, Mortgage-Backed Securities, or MBS) compete for the same fixed-income investor dollar. Treasury issues are 100% guaranteed to be repaid, but mortgages are not; therefore mortgages carry more risk of default or early repayment, which could potentially disturb the return on the investment. Therefore, mortgage rates must be priced higher to compensate for that risk. But how much higher are mortgages priced? In a normal market, the average \"\"spread\"\" or markup above the 100% secured Treasury is about 170 basis points, or 1.7%. That markup -- the spread relationship -- widens and contracts with a range of market conditions, investor appetites and supply of available product -- as well as the presence of competing investment opportunities, like corporate bonds or domestic (or foreign) equity markets Source: What Moves Mortgage Rates? And when the stock market crashes, investors tend to run to bonds and treasuries, which causes prices to go up and treasury yields to drop. Theoretically, this would also cause mortgage rates to drop, although most mortgage rates have a base price below which they cannot fall. How easy is it to profit from recent stock market drops and at what frequency? Incredibly difficult. The issue with your strategy is that you cannot predict the bottom of the market (at least us mortals can't). Just take the month of August for example. Stocks fell something like 15%? After the first 5-10% drop, people felt that the bottom was there, so they rushed in, only to have the market fall even more. How will you know when to invest? Even if the market falls by 50%, and there's a huge buying opportunity, and you increase the mortgage on your house, odds are your rates will increase because of the equity you take out. What if the market stays low for a very long time? Will you be able to maintain mortgage payments? Japan's stock bubble popped in the early 90's, and they've had two lost decade's now. Furthermore, there are issues of liquidity. What if you need more capital? Can you just sell a property or can you buy now property to draw equity against? What if the market is moving too fast for you to take advantage of. Don't ignore transaction costs and taxes either. Overall, there are a lot of ways that your idea can go wrong, and not many ways it can go right.\"",
"title": ""
},
{
"docid": "d31a275fbb717703bc4739ca6ad43aff",
"text": "When I read that part of his post, it reminded me more of credit companies rather than banks. People default on credit all the time. I have no idea what the regulations are on the amount of credit that a company can issue, though. And this is sort of part of what actually happened in the beginning of the economic crunch. A bunch of people began to trade for credit (debt) against what they thought the *future* value of their house or other real estate would be. After a while, people stopped being able to afford property at its future value, so they stopped buying it. When people then tried to sell their property for the future value that they had borrowed against, they couldn't, so they couldn't pay back their debt. Because real estate had become a popular investment vehicle for the middle class, this was able to reach a kind of critical mass, and shortly afterward the effects rippled back into the credit market, which also had its own crunch -- a bunch of credit just disappeared overnight because so many people had assumed a level of debt that they could not actually fulfill their promises on once the future value of their home became completely imaginary.",
"title": ""
},
{
"docid": "1c074e41e3cb931ec2dfbfc915fdbe0e",
"text": "\"The logic \"\"the interest rate on the mortgage was so low it didn't make sense not to buy\"\" is one reason the housing bubble happened. The logic was that it made the house affordable even at high prices. Once the prices collapsed people still had affordable payments, but were unable to sell because they were upside down on the mortgage. If you can refinance to a 15-year mortgage, or from a adjustable mortgage to a fixed rate mortgage. it can make sense. You can save on the monthly payment, and on the total cost of the mortgage. But don't buy to take advantage of rates; or to save on taxes; or to build a guaranteed equity. These can be false economies or things that can't be gaurenteed. Of course if nobody spends money, the economy will stay poor. As to hidden details. Only purchase housing you want to own for the long haul. If you expect to flip it in a few years, you might not be able to. You might end up stuck as a long distance landlord.\"",
"title": ""
},
{
"docid": "b016ad4e91e887d07872457741a50b2c",
"text": "Can anyone recommend a good textbook that covers Fannie Mae and Freddie Mac, or more broadly the US home mortgage market? A basic search seems to mostly turn up books that aim to make an ideological point rather than attempt to provide an actual explanation. I have a basic financial knowledge including a basic understanding of derivatives at the level of say the textbook by Hull, but know very little about the US mortgage market specifically. I don't mind technical detail, and am not afraid of math. I don't mind if the book is broader, as long as it includes a reasonably in depth look at these GSEs and their role. This seems to be a pretty basic piece of knowledge for many financial professionals, so I assume there must be at least one standard textbook on this that I just haven't been able to find. EDIT: I'm looking for something post 2008 of course.",
"title": ""
},
{
"docid": "f7f27dfffa398fe03986c118eb595efc",
"text": "The Fed controls the base interest rate for lending to banks. It raises this rate when the economy is doing well to limit inflation, and lowers this rate when the economy is doing poorly to encourage lending. Raising the interest rate signals that the Fed believes the economy is strong/strengthening. Obviously it's more complicated than that but that's the basic idea.",
"title": ""
},
{
"docid": "0e18803ec32cf60fccd68cba2c500df8",
"text": "\"I suspect this is a function of deregulated banks' desire to write and flip as many mortgages as possible. The best targets for this sales push were naturally those with the most education, who tended to have the best credit ratings and most secure jobs. The last time I bought a house, the mortgage salesman practically lit up when looking at my income and credit score, pushing me hard to borrow more. \"\"You could buy a lot more house than this!\"\" he said. \"\"You could buy apartments as an investment or for resale!\"\" I resisted temptation, thank heaven, but it's all too easy to see how millions of others didn't.\"",
"title": ""
},
{
"docid": "28501cd5cb256a4222ed10711419d979",
"text": "\"Interest rates are at a record low and the government is printing money. You can get a fixed rate loan at a rate equal to inflation in a healthy economy. Unless you know that you are moving in < 5 years, why would you expose yourself to interest rate risk when rates are about as close to zero as they can be? If your thought with respect to mitigating interest rate risk is: \"\"What's the big deal, I'll just refinance!\"\", think again, because in a market where rates are climbing, you may not be able to affordably refinance at the LTV that you'll have in 5-7 years. From 1974-1991, 30 year mortgages never fell below 9%, and were over 12% from 1979 to 1985. Think about what those kinds of rates -- which reduce a new homeowner's buying power by over 40%, would do to your homes value.\"",
"title": ""
},
{
"docid": "0337a6c0871430605d756e40eb6d0e83",
"text": "The government started the crisis and the banks concluded it. Barney Frank and the House Committee on Financial Services continually pushed Fannie Mae and Freddie Mac to issue new mortgages with the intent of increasing home ownership. The House set goals for mortgage issuances; thus Fannie and Freddie lowered the requirements for obtaining a new mortgage. Other banks saw this happening and were forced to lower their requirements for issuing mortgages. Then, the banks realized they were holding a lot of risky mortgages on their books, so they found a way to spread the risk among other banks and investors. Through financial ingenuity to reduce risk and maximize return, they created a new investment (securitized the debt) where risky mortgages were bundled, the earnings tranched, and resold to investors. In this way, they transformed hard-to-sell subprime mortgages into salable AAA and AA debt. This depended on the fact that the risk of default on each mortgage was *independent* of the others. This scheme reduced risk and increased returns for banks and investors. However, the securitized mortgages contributed to a higher overall *system* risk. As long as there weren't mass defaults, everyone was better off. Well, clearly there were mass defaults on risky mortgages, which destroyed the securitization scheme and brought down the banks. The missing element in all this was a strong, competent regulatory body that looked out for the country's welfare. Everyone else was looking out for themselves: Barney Frank & the House looked out for their voters' agenda to push home ownership. Home buyers were taking advantage of the favorable credit. The banks satisfied mortgage demand. The banks also figured out a way to sell risky mortgages to investors so more could be issued. However, no one looked out for the system-wide risk.",
"title": ""
},
{
"docid": "7b0d59e3f864aab765fbc03b515de78f",
"text": "\"The setting of interest rates (or \"\"repurchase rates\"\") varies from country to country, as well as with the independence of the central bank. There are a number of measurements and indices that central bankers can take into account: This is a limited overview but should give an indication of just how complex tracking inflation is, let alone attempting to control it. House prices are in the mix but which house or which price? The choice of what to measure faces the difficulty of attempting to find a symmetrical basket which really affects the majority regularly (and not everyone is buying several new houses a year so the majority are ring-fenced from fluctuations in prices at the capital end, but not from the interest-rate end). And this is only when the various agencies (Statistics, Central Bank, Labour, etc.) are independent. In countries like Venezuela or Argentina, government has taken over release of such data and it is frequently at odds with individual experience. Links for the US: And, for Australia:\"",
"title": ""
},
{
"docid": "a32103579ed3ba3b8902f81d055cf3ca",
"text": "There are two impacts: First, if the pound is dropping, then buying houses becomes cheaper for foreign investors, so they will tend to buy more houses as investments, which will drive house prices up. Second, in theory you might be able to get a mortgage in a foreign country, let's say in Euro, and you might hope that over the next few years the pound would go up again, and the Euros that you owe the foreign bank become worth less.",
"title": ""
},
{
"docid": "c01e8d7d9223450cb7fbed67e81d0f26",
"text": "So am I to understand that giving AAA ratings to financial instruments backed by toxic mortgages had nothing to do with this problem? That selling mortgages with one hand and betting on those mortgages to fail with other is a reasonable business practice? No doubt the push to give more poor people government backed loans exacerbated the problem, but making that claim that that was the only problem seems about as valid as claiming that Goldman Sachs was responsible for everything.",
"title": ""
},
{
"docid": "80a726c21dbb5d848137fbfb2678c2d0",
"text": "Another factor not mentioned are the rent prices in the area you are looking to live. I'd recommend buying a house of which the total monthly costs (mortgage, insurance, repairs, etc) are equal to or less than renting a house in the same area. If you can't find a property for sale that meets this requirement, you might actually be better off keep on renting, at least for a while, because you risk paying too much for your living expenses. A second point is, if possible, to buy when the mortgage interest rates are low, and then go for a mortgage with fixed interest and fixed repayments. While such a mortgage will be more more expensive than one with variable interest, and house prices are higher when mortgage rates are lower, future inflation is almost a certainty. And if your interest rate was fixed, and you are confident that you'll be able to negotiate salary raises in pace with the inflation, then inflation will gradually whittle down the rate between the mortgage payment and your income. Conversely, if interest rates are historically high, with no lowering in sight, then a variable loan might be more interesting. And do shop around for mortgages, there are many banks out there, the competition between them is heavy, and many banks, especially the smaller banks, will often be willing to give you a mortgage at better conditions than their competitors.",
"title": ""
},
{
"docid": "d0a89122e80abad502d2c82ced72836a",
"text": "\"This is the best tl;dr I could make, [original](https://www.boeckler.de/pdf/p_imk_wp_178_2017.pdf) reduced by 100%. (I'm a bot) ***** > Economic activity may affect the development of credit through credit demand and credit supply channels. > 3.1 Credit expansion and financial crises The empirical literature on the determinants of excessive credit expansion and financial instability has mostly analyzed the large build-ups of bank credit to the private non-financial sector since these data are available over a long time period. > The positive correlation between economic activity and credit may result from the effect of economic activity on credit demand and credit supply but also from the effect of credit availability on economic activity. ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/6kt8rs/imk_macroeconomic_factors_behind_financial/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ \"\"Version 1.65, ~157450 tl;drs so far.\"\") | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr \"\"PM's and comments are monitored, constructive feedback is welcome.\"\") | *Top* *keywords*: **credit**^#1 **income**^#2 **financial**^#3 **test**^#4 **household**^#5\"",
"title": ""
}
] |
fiqa
|
84c1114ab0711602609d38f9512c30fd
|
Why do US retirement funds typically have way more US assets than international assets?
|
[
{
"docid": "7d40e0940f7bca386ac3118b76bbdfbd",
"text": "There are a few main economic reasons given why investors show a strong home bias: Interestingly, though if you ask investors about the future of their home country compared with other countries they will generally (though not always) significantly overestimate the future of their own country. It is difficult to definitively say what drives investors but this psychological home bias could be one of the larger factors. Edit in response to the bounty: Maybe this Vanguard article on their recommended international exposure is what you are looking for though they only briefly speculate about why people so consistently show a home bias in investing. The Wikipedia article mentioned above has some very good references and while there may be no complete answer with the certainty that you seek (as there are as many reasons as there are investors) a combination of the above list seems to capture much of what is going on across different countries.",
"title": ""
},
{
"docid": "f267f546a9aa7ca0178a43125fe42b50",
"text": "\"It's likely that the main reason is the additional currency risk for non-USD investments. A wider diversification in general lowers risk, but that has to be balanced by the risk incurred when investing abroad. This implies that the key factor isn't so much the country of residence, but the currency of the listing. Euro funds can invest across the whole Euro zone. Things become more complex when you consider countries whose currency is less trusted and whose economy is less diversified. In those cases, the \"\"currency risk\"\" may be more due to the national currency, which justifies a more global investment strategy.\"",
"title": ""
},
{
"docid": "306f3a6fe8fd8857a8f456e4e684ea13",
"text": "\"To expand a bit on @MSalters's answer ... When I read your question title I assumed that by \"\"retirement funds\"\" you meant target-date funds that are close to their target dates (say, the 2015 target fund). When I saw that you were referring to all target-date funds, it occurred to me that examining how such funds modify their portfolios over time would actually help answer your question. If you look at a near-term target fund you can see that a smaller percent is invested internationally, the same way a smaller percent is invested in stocks. It's because of risk. Since it's more likely that you will need some of the money soon, and since you'll be cashing out said money in US Dollars, it's risky to have too much invested in foreign currencies. If you need money that's currently invested in a foreign currency and that currency happens to be doing poorly against USD at the moment, then you'll lose money simply because you need it now. This is the same rationale that goes into target-date funds' moving from stocks to bonds over time. Since the value of a stock portfolio has a lot more natural volatility than the value of a bond portfolio, if you're heavily invested in stocks when you need to withdraw money, there's a higher probability that you'll need to cash out just when stocks happen to be doing relatively poorly. Being invested more in bonds around when you'll need your money is less risky. Similarly, being more invested in US dollars than in foreign currencies around when you'll need your money is also less risky.\"",
"title": ""
},
{
"docid": "15a6082d1454328277850caf56f59175",
"text": "You need growth in your retirement fund. Sad to say but the broad U.S. marks still has better growth perspective than the emerging markets. Look at China they are only at 6.7% growth for next year the same as this year. Russia's economy is shrinking. These are the other two super powers of 2015. The USA is still the best market to invest in historically and in the present. That's why the USA market tends to be overweight in most retirement portfolios. Now by only investing in the USA market do you miss out on trends internationally? Well you do a bit but not entirely. Many USA companies are highly international in regards to their growth. Here are some: So in short the USA market still seems to be the best growth market and you still get some international exposure. Also by investing in USA companies they sometimes are more ethical in their book keeping as opposed to some other markets. I don't think I'm the only one that is skeptical of the numbers China's government reports.",
"title": ""
},
{
"docid": "d41d8cd98f00b204e9800998ecf8427e",
"text": "",
"title": ""
}
] |
[
{
"docid": "4fb93947461cf2614b37f4ea50bbec9b",
"text": "Googling vanguard target asset allocation led me to this page on the Bogleheads wiki which has detailed breakdowns of the Target Retirement funds; that page in turn has a link to this Vanguard PDF which goes into a good level of detail on the construction of these funds' portfolios. I excerpt: (To the question of why so much weight in equities:) In our view, two important considerations justify an expectation of an equity risk premium. The first is the historical record: In the past, and in many countries, stock market investors have been rewarded with such a premium. ... Historically, bond returns have lagged equity returns by about 5–6 percentage points, annualized—amounting to an enormous return differential in most circumstances over longer time periods. Consequently, retirement savers investing only in “safe” assets must dramatically increase their savings rates to compensate for the lower expected returns those investments offer. ... The second strategic principle underlying our glidepath construction—that younger investors are better able to withstand risk—recognizes that an individual’s total net worth consists of both their current financial holdings and their future work earnings. For younger individuals, the majority of their ultimate retirement wealth is in the form of what they will earn in the future, or their “human capital.” Therefore, a large commitment to stocks in a younger person’s portfolio may be appropriate to balance and diversify risk exposure to work-related earnings (To the question of how the exact allocations were decided:) As part of the process of evaluating and identifying an appropriate glide path given this theoretical framework, we ran various financial simulations using the Vanguard Capital Markets Model. We examined different risk-reward scenarios and the potential implications of different glide paths and TDF approaches. The PDF is highly readable, I would say, and includes references to quant articles, for those that like that sort of thing.",
"title": ""
},
{
"docid": "4cb559b3a92b5f40f1f5c02c84656f0f",
"text": "Because retirement account usually are tax effective vehicles - meaning you will pay less tax on any profits from your investments in a retirement account than you would outside. For example, in my country Australia, for someone on say $60,000 per annum, if you make $10,000 profits on your investments that year you will end up paying 34.5% tax (or $3,450) on that $10,000 profits. If you made the same profits in a retirement account (superannuation fund) you would have only paid 15% tax (or $1,500) on the $10,000 profit. That's less than half the tax. And if you are on a higher income the savings would be even greater. The reason why you can't take the money out of a retirement account is purely because the aim is to build up the funds for your retirement, and not take it out at any time you want. You are given the incentive to pay less tax on any investment profits in order for you to save and grow your funds so that you might have a more comfortable retirement (a time when you might not be able to work any more for your money).",
"title": ""
},
{
"docid": "c483acb58363d9f4b5159678bd56c98e",
"text": "\"Answers: 1: No, Sections 1291-1298 of the IRC were passed in the Reagan adminstration. 2: Not only can a foreign company like a chocolate company fall afoul of the definition of PFIC because of the \"\"asset test\"\", which you cite, but it can also be called a PFIC because of the \"\"income test\"\". For example, I have shares in a development-stage Canadian biotech which is considered a PFIC because it has no income at all, except for a minor amount of bank interest on its working capital. This company is by no means \"\"passive\"\" (it has run 31 clinical trials in over 1100 human research subjects, burning $250M of investor's money in the process) nor is it an \"\"investment company\"\", but the stupid IRS considers it to be a \"\"passive foreign investment company\"\"! The IRS looks at it and sees only the bank account, and assumes it is a foreign shell corporation set up to shield the bank interest from them. 3: Yes, a foreign mutual fund is EXACTLY what congress intended to be a PFIC when passed IRC 1291-1298. (Biotechs, candy factories, ect got nailed as innocent bystanders.) Note that if you hold a US mutual fund then every year you'll get a form 1099 in the mail. The 1099 will report your share of the mutual fund's own income and capital gains, which you must report on your taxes. (You can also have capital gains from selling your shares of the mutual fund, but that's a different thing.) Now suppose that there was no PFIC law. Then the US investors in the mutual fund would do better if the mutual fund were in a foreign country, for two reasons: a) The fund would no longer distribute 1099's. That means the shareholders wouldn't have to pay tax every year on their proportions of the fund's own income/gains. The money that would have sooner gone to the IRS can sit around for years earning interest. b) The fund could return profits to shareholders exclusively through capital gains rather than dividends, thus ensuring that all of the investors' income on the fund would be taxed at <15%-20% rather than up to 39%. The fund could do this by returning cash to shareholders exclusively through buybacks. However, the US mutual fund industry doesn't want to move the industry to Canada, and it only takes a few newspaper articles about a foreign loophole to make congress spring to action. 4) It depends. If you have a PEDIGREED QEF election in place (as I do for my biotech shares) then form 8621 takes a few minutes by hand. However, this requires both the company and the investor to fully cooperate with congress's vision for PFICs. The company cooperates by providing a so-called \"\"PFIC annual information sheet\"\", which replaces the 1099 form for a US mutual fund. The investor cooperates by having a \"\"QEF election\"\" in place for EACH AND EVERY TAX YEAR in which he held the stock and by reporting the numbers from the PFIC annual information sheet on his return. (Note that the QEF election persists once made, until revoked. There are subtleties here that I am glossing over, since \"\"deemed sale\"\" elections and other means may be used to modify a share's holding period to come into compliance.) Note that there is software coming out to handle PFICs, and that the software makers will already run their software to make your form 8621 for $75 or so. I should also warn you that the blogs of tax accountants and tax lawyers all contradict each other on the basic issue of whether you can take capital losses on PFICs for which you have no form 8621 elections. (See section 2.3 of my notes http://tinyurl.com/mh9vlnr for commentary on this mess.) I do not know if the software people will tell you which elections are best made on form 8621, though, or advise you if it's time to simply dump your investment. The professional software is at 8621.com, and the individual 8621 preparation is at http://expattaxtools.com/?page_id=242. BTW, in case you're interested, I wrote up a very careful analysis of how to deal with the PFIC situation for the small biotech I invested in in certain cases. It is posted http://tinyurl.com/mh9vlnr. (For tax reasons it was quite fortunate that the share price dipped to near an all-time low on Jan 1, 2015, making the (next) 2015 tax year ripe for a so-called \"\"deemed sale\"\" election. This was only possible because the company provides the necessary \"\"PFIC annual information statements\"\", which your chocolate factory may or may not do.)\"",
"title": ""
},
{
"docid": "49992736fd22c5c34efdd7992ee2229c",
"text": "The logic is that the value of America could be determined by adding up the assets of all Americans. If houses are more expensive then America is richer (we own a large number of more expensive houses), even though no additional real assets have been created (as if more houses were built).",
"title": ""
},
{
"docid": "d7541f07a95a913977a15cc8030734b8",
"text": "\"I still don't understand this \"\"analysis.\"\" Even when the US became the world's largest economy in 1880, the British Pound remained the reserve currency of choice until the 1950s, some seventy years later! Investors prefer stability and property rights and the US has both, especially when considering the alternatives, i.e. Euro tax takings on bank deposits in Cyprus. What about the yuan? China may have recently surpassed US economic power, but it is very likely in the midst of a massive credit bubble. China has also been fudging some of their numbers and in many cases, chooses not to keep economic records at all. The fact that many Chinese elites themselves are buying property in Vancouver and the US as a safe harbor also does not bode well for their systemic problems IMO. I'm sticking with the dollar for now.\"",
"title": ""
},
{
"docid": "ab49bc410881ee4bc8e5e5d965482653",
"text": "\"There are some good answers about the benefits of diversification, but I'm going to go into what is going on mathematically with what you are attempting. I was always under the assumption that as long as two securities are less than perfectly correlated (i.e. 1), that the standard deviation/risk would be less than if I had put 100% into either of the securities. While there does exist a minimum variance portfolio that is a combination of the two with lower vol than 100% of either individually, this portfolio is not necessarily the portfolio with highest utility under your metric. Your metric includes returns not just volatility/variance so the different returns bias the result away from the min-vol portfolio. Using the utility function: E[x] - .5*A*sig^2 results in the highest utility of 100% VTSAX. So here the Sharpe ratio (risk adjusted return) of the U.S. portfolio is so much higher than the international portfolio over the period tracked that the loss of returns from adding more international stocks outweigh the lower risk that you would get from both just adding the lower vol international stocks and the diversification effects from having a correlation less than one. The key point in the above is \"\"over the period tracked\"\". When you do this type of analysis you implicitly assume that the returns/risk observed in the past will be similar to the returns/risk in the future. Certainly, if you had invested 100% in the U.S. recently you would have done better than investing in a mix of US/Intl. However, while the risk and correlations of assets can be (somewhat) stable over time relative returns can vary wildly! This uncertainty of future returns is why most people use a diversified portfolio of assets. What is the exact right amount is a very hard question though.\"",
"title": ""
},
{
"docid": "79ecb26ea9c0236996186ea69aed8152",
"text": "\"As you alluded to in your question, there is not one answer that will be true for all mutual funds. In fact, I would argue the question is not specific to mutual funds but can be applied to almost anyone who must make an investment decision: a mutual fund manager, hedge fund manager, or an individual investor. Even though money going into a company 401(k) retirement savings plan is typically automatically allocated to different funds as we have specified, this is generally not the case for other investment accounts. For example, I also have a Roth IRA in which I have some money from each paycheck direct deposited and it's up to me to decide whether to leave that money in cash or to invest it somewhere else. Every time you invest more money into a mutual fund, the fund manager has the same decision to make. There are two commonly used mutual fund figures that relate to your question: turnover rate, and cash reserves. Turnover rate measures the percent of a fund's portfolio that changes every year. For example, a turnover rate of 100% indicates that a fund replaces every asset it held at the beginning of the year with something else at the end of the year – funds with turnover rates greater than 100% average a holding period for a given asset of less than one year, and funds with turnover rates less than 100% average a holding period for a given asset of more than one year. Cash reserves simply measure the amount of money funds choose to keep as cash instead of investing in other assets. Another important distinction to make is between actively managed funds and passively managed funds. Passively managed funds are often referred to as \"\"index funds\"\" and have as their goal only to match the returns of a given index or some other benchmark. Actively managed funds on the other hand try to beat the market by exploiting so-called market inefficiencies; e.g. buying undervalued assets, selling overvalued assets, \"\"timing\"\" the market, etc. To answer your question for a specific fund, I would encourage you to look at the fund's prospectus. I take as one example of a passively managed fund the Vanguard 500 Index Fund (VFINX), a mutual fund that was created to track the S&P 500. In its prospectus, the fund states that, \"\"to track its target index as closely as possible, the Fund attempts to remain fully invested in stocks\"\". Furthermore, the prospectus states that \"\"the fund's daily cash balance may be invested in one or more Vanguard CMT Funds, which are very low-cost money market funds.\"\" Therefore, we would expect both this fund's turnover rate and cash reserves to be extremely low. When we look at its portfolio composition, we see this is true – it is currently at a 4.8% turnover rate and holds 0.0% in short term reserves. Therefore, we can assume this fund is regularly purchasing shares (similar to a dollar cost averaging strategy) instead of holding on to cash and purchasing shares together at a specific time. For actively managed funds, the picture will tend to look a little different. For example, if we look at the Magellan Fund's portfolio composition, we can see it has a turnover rate of 42%, and holds around .95% in cash/short term reserves. In this case, we can safely guess that trading activity may not be as regular as a passively managed fund, as an active manager attempts to time the market. You may find mutual funds that have much higher cash reserves – perhaps 10% or even more. Granted, it is impossible to know the exact trading strategy of a mutual fund, and for good reason – if we knew for example, that a fund purchases shares every day at 2:30PM in order to realign with the S&P 500, then sellers of S&P components could up the prices at that time to exploit the mutual fund's trade strategy. Large traders are constantly trying to find ways to conceal their actual trading activity in order to avoid these exact problems. Finally, I feel obligated to note that it is important to keep in mind that trade frequency is linked to transactions costs – in general, the more frequently an investment manager (whether it be you or a mutual fund manager) executes trades, the more that manager will lose in transactions costs.\"",
"title": ""
},
{
"docid": "e1592b80f5b99de632e7d9825d8bde8e",
"text": "Wow this is a bad article. This is a notional amount.... Eg. $500M US equity fund in Australia wants to hedge their US exposure. They buy a $500M forward contract and roll it over quarterly. Each quarter they settle on the difference (let's say $50 - 500k +/- depending on the way FX moves). What matters is the amount owed...not the notional value. Same goes for interest rates. $1B bond fund could short the 10yr to lower interest rate sensitivity...the end value isn't $1B. It's whatever they owe on the difference at settlement. The issue of swap spreads or settlement/liquidity is so much more important!",
"title": ""
},
{
"docid": "0848988ee6bf5d902b7090dcbc46de00",
"text": "The location does matter in the case where you introduce currency risk; by leaving you US savings in USD, you're basically working on the assumption that the USD will not lose value against the EUR - if it does and you live in the EUR-zone, you've just misplaced some of your capital. Of course that also works the other way around if the USD appreciates against the EUR, you gained some money.",
"title": ""
},
{
"docid": "56290eb39d292df78b8af33f4e308903",
"text": "Mostly you nailed it. It's a good question, and the points you raise are excellent and comprise good analysis. Probably the biggest drawback is if you don't agree with the asset allocation strategy. It may be too much/too little into stocks/bonds/international/cash. I am kind of in this boat. My 401K offers very little choices in funds, but offers Vanguard target funds. These tend to be a bit too conservative for my taste, so I actually put money in the 2060 target fund. If I live that long, I will be 94 in 2060. So if the target funds are a bit too aggressive for you, move down in years. If they are a bit too conservative, move up.",
"title": ""
},
{
"docid": "118c4f391c47a9cef09d2b7a8617650b",
"text": "Assuming you're in the United States, then International Equity is an equity from a different country. These stocks or stock funds (which reside in a foreign country) are broken out seperately becuase they are typically influenced by a different set of factors than equities in the United States: foreign currency swings, regional events and politics of various countries.",
"title": ""
},
{
"docid": "9eee8e19e9f44b9229656342cdb3bcb6",
"text": "\"Excellent question, though any why question can be challenging to answer because it depends on the financial products in question. At least, I haven't seen many target date retirement funds that include a high percent of foreign stocks, so below explains the ones I've seen which are primarily US stocks. The United States (before the last twenty years) has been seen as a country of stability. This is not true anymore, and it's difficult for my generation to understand because we grew up in the U.S.A being challenged (and tend to think that China and India have always been powers), but when we read investors, like Benjamin Graham (who had significant influence with Warren Buffett), we can see this bias - the U.S.A to them is stable, and other countries are \"\"risky.\"\" Again, with the national debt and the political game in our current time, it does not feel this way. But that bias is often reflect in financial instruments. The US Dollar is still the reserve currency, though it's influence is declining and I would expect it to decline. Contrary to my view (because I could be wrong here) is Mish, who argues that no one wants to have the reserve currency because having a reserve currency brings disadvantages (see here: Bogus Threats to US Reserve Currency Status: No Country Really Wants It!; I present this to show that my view could be wrong). Finally, there tends to be the \"\"go with what you know.\"\" Many of these funds are managed by U.S. citizens, so they tend to have a U.S. bias and feel more comfortable investing their money \"\"at home\"\" (in fact a famous mutual fund manager, Peter Lynch, had a similar mentality - buy the company behind the stock and what company do we tend to know best? The ones around us.). One final note, I'm not saying this mentality is correct, just what the attitude is like. I think you may find that younger mutual fund managers tend to include more foreign stocks, as they've seen that different world.\"",
"title": ""
},
{
"docid": "704b6900ee772c3bc8f88707d1921036",
"text": "I'm not a professional, but my understanding is that US funds are not considered PFICs regardless of the fact that they are held in a foreign brokerage account. In addition, be aware that foreign stocks are not considered PFICs (although foreign ETFs may be).",
"title": ""
},
{
"docid": "3a1962707304e58f79eb56f2e61454ad",
"text": "Significantly less effort to buy into any of several international bond index funds. Off the top of my head, VTIBX.",
"title": ""
},
{
"docid": "af7535b950b00daa65f3e587fcb3e827",
"text": "Most of the “recommendations” are just total market allocations. Within domestic stocks, the performance rotates. Sometimes large cap outperform, sometimes small cap outperform. You can see the chart here (examine year by year): https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chfdeh=0&chdet=1428692400000&chddm=99646&chls=IntervalBasedLine&cmpto=NYSEARCA:VO;NYSEARCA:VB&cmptdms=0;0&q=NYSEARCA:VV&ntsp=0&ei=_sIqVbHYB4HDrgGA-oGoDA Conventional wisdom is to buy the entire market. If large cap currently make up 80% of the market, you would allocate 80% of domestic stocks to large cap. Same case with International Stocks (Developed). If Japan and UK make up the largest market internationally, then so be it. Similar case with domestic bonds, it is usually total bond market allocation in the beginning. Then there is the question of when you want to withdraw the money. If you are withdrawing in a couple years, you do not want to expose too much to currency risks, thus you would allocate less to international markets. If you are investing for retirement, you will get the total world market. Then there is the question of risk tolerance. Bonds are somewhat negatively correlated with Stocks. When stock dips by 5% in a month, bonds might go up by 2%. Under normal circumstances they both go upward. Bond/Stock allocation ratio is by age I’m sure you knew that already. Then there is the case of Modern portfolio theory. There will be slight adjustments to the ETF weights if it is found that adjusting them would give a smaller portfolio variance, while sacrificing small gains. You can try it yourself using Excel solver. There is a strategy called Sector Rotation. Google it and you will find examples of overweighting the winners periodically. It is difficult to time the rotation, but Healthcare has somehow consistently outperformed. Nonetheless, those “recommendations” you mentioned are likely to be market allocations again. The “Robo-advisors” list out every asset allocation in detail to make you feel overwhelmed and resort to using their service. In extreme cases, they can even break down the holdings to 2/3/4 digit Standard Industrial Classification codes, or break down the bond duration etc. Some “Robo-advisors” would suggest you as many ETF as possible to increase trade commissions (if it isn’t commission free). For example, suggesting you to buy VB, VO, VV instead a VTI.",
"title": ""
}
] |
fiqa
|
e28b9d4776ecde4668d499d454730a6e
|
Do I need to file taxes when selling on eBay or Amazon?
|
[
{
"docid": "2b20f947365127fa9960e94eccba69e3",
"text": "\"In simple terms, it is a business operation when it becomes a profit-making enterprise. It is a grey area, but there is a difference between selling occasional personal items on eBay and selling for profit. I would imagine the sort of considerations HM Revenue & Customs would take into account are the size of your turnover, the extent to which you are both buying and selling, and whether you are clearly specialising in one particular commodity as opposed of disposing of unwanted presents or clearing the loft. http://www.ebay.co.uk/gds/When-does-eBay-selling-become-taxable-/10000000004494855/g.html I don't believe that you selling your personal camera gear will be taxable, but as the link says, it is a grey area. They also recommend to do this It's far better than having to deal with an investigation a few years down the line. When it comes to completing your tax return, there is a section which is headed \"\"other income\"\", and it is here where you will enter the net earnings from the web business. \"\"Net\"\" here means your additional income, less all expenses associated with it. If you are still worried I would always encourage people to take a cautious approach and discuss their position with HMRC via its helpline on 08454 915 4515.\"",
"title": ""
}
] |
[
{
"docid": "598447d7fc5f43f2a053c5c29cf3c2a4",
"text": "It's called bartering and the IRS has a page titled Four Things to Know About Bartering. The summary is - The bottom line is this is taxable.",
"title": ""
},
{
"docid": "18bec4a970be8966d9135b371b8116bc",
"text": "No they do not. From form 1040 instructions, a single, non-blind dependent under age 65 must file if the following are true: You must file a return if any of the following apply. There is no return required for receipt of a gift.",
"title": ""
},
{
"docid": "eb3edb9346792440f6dfe9396e27c24c",
"text": "If you have non Residency status in Canada you don't need to file Canadian tax return. To confirm your status you need to contact Canada Revenue (send them letter, probably to complete some form).",
"title": ""
},
{
"docid": "11aa0d830ce41e174690756c06ce534f",
"text": "(do I need to get a W9 from our suppliers)? Will PayPal or Shopify send me a 1099k or something? Do not assume that you'll get paperwork from anyone. Do assume that you have to generate your own paperwork. Ideally you should print out some kind of record of each transaction. Note that it can be hard to view older transactions in PayPal, so start now. If you can't document something, write up a piece of paper showing the state of the world to the best of your knowledge. Do assume that you need separate receipts for each expenditure. The PayPal receipt might be enough (but print it in case the IRS wants to see it). A receipt from the vendor would be better (again, print it if it is online now). A CPA is not strictly necessary. A CPA is certified (the C in CPA) to formally audit the books of a corporation. In your case, any accountant would be legally sufficient. You still may want to use a CPA, as the certification, while technically unnecessary, still demonstrates knowledge. You may otherwise not be in a position to evaluate an accountant. A compromise option is to go to a firm that includes a CPA and then let them assign you to someone else to process the actual taxes. You are going to have to fill out some business tax forms. In particular, I would expect a schedule C. That's where you would show revenues and expenses. You may well have to file other forms as well.",
"title": ""
},
{
"docid": "810d4842bdc077402c3b1d10247a8e7f",
"text": "If your gross income is only $3000, then you don't need to file: https://www.irs.gov/pub/irs-pdf/p501.pdf That said, pay careful attention to: https://www.irs.gov/individuals/international-taxpayers/taxpayers-living-abroad You should be reporting ALL income, without regard to WHERE you earned it, on your US taxes. Not doing so could indeed get you in trouble if you are audited. Your level of worry depends on how much of the tax law you are willing to dodge, and how lucky you feel.",
"title": ""
},
{
"docid": "f32d820d97c3f202be1a3c1a88a1820b",
"text": "\"Does he need to file a tax return in this situation? Will the IRS be concerned that he did not file even if he received a 1099? No. However, if you don't file the IRS may come back asking why, or \"\"make up\"\" a return for you assuming that the whole amount on the 1099-MISC is your net earnings. So in the end, I suspect you'll end up filing even though you don't have to, just to prove that you don't have to. Bottom line - if you have 1099 income (or any other income reported to the IRS that brings you over the filing threshold), file a return.\"",
"title": ""
},
{
"docid": "a195bc1db3e3089f9216fa4126fd4007",
"text": "\"Yes, you can do that, but you have to have the stocks issued in your name (stocks that you're holding through your broker are issued in \"\"street name\"\" to your broker). If you have a physical stock certificate issued in your name - you just endorse it like you would endorse a check and transfer the ownership. If the stocks don't physically exist - you let the stock registrar know that the ownership has been transferred to someone else. As to the price - the company doesn't care much about the price of private sales, but the taxing agency will. In the US, for example, you report such a transaction as either a gift (IRS form 709), if the transaction was at a price significantly lower than the FMV (or significantly higher, on the other end), or a sale (IRS form 1040, schedule D) if the transaction was at FMV.\"",
"title": ""
},
{
"docid": "e7416d510ca61428b034926cf72ad7b2",
"text": "\"Appears to be a hypothetical question and not really worth answering but... Must it be explained.. no, not until audited. It's saying that for everything reported on a tax return, people have to include an explanation for everything, which you do not, unless you want to make some type of 'disclosure' which is a different matter. Must it be reported.. Yes, based on info presented. All income is taxable unless \"\"specifically exempted\"\" per the US Tax code or court cases. Gift vs Found Income... it's not 'found' income as someone gave (gifted) the money to him. Generally, gifts received are not taxable and don't have to be reported.\"",
"title": ""
},
{
"docid": "ba1ad496da75fa89e0e779d75eb78141",
"text": "\"Yes, your business needs to be in the business of making money in order for you to deduct the expenses associated with it. I suppose in theory this could mean that if you take in $10,000 and spend $30,000 every year, you not only don't get a net deduction of $20,000 (your loss) but you have to pay tax on $10,000 (your revenue). However this is super fixable. Just only deduct $9500 of your expenses. Tada! Small profit.For all the gory details, including how they consider whether you have an expectation of profits, see http://www.cra-arc.gc.ca/E/pub/gl/p-176r/p-176r-e.html This \"\"expectation of profit\"\" rule appears to apply to things like \"\"I sell home décor items (or home decorating advice) and therefore need to take several multi week trips to exotic vacation destinations every year and deduct them as business expenses.\"\" If you're doing woodworking or knitting in your home and selling on Etsy you don't particularly have any expenses. It's hard to imagine a scenario where you consistently sell for less than the cost of materials and then end up dinged on paying tax on revenue.\"",
"title": ""
},
{
"docid": "28bbf8163b26a822c22b96df8ef1fcec",
"text": "You continue with this form. The fact that the trade in value is less than market value doesn't mean that you don't have taxable income from the sale. Since you depreciated the car before selling it, you need to compare the trade in value not to the market value, but to your cost basis, which may be lower.",
"title": ""
},
{
"docid": "44f7f02ebc9b4bba410c9a805b9ed00d",
"text": "\"If you have income - it should appear on your tax return. If you are a non-resident, that would be 1040NR, with the eBay income appearing on line 21. Since this is unrelated to your studies, this income will not be covered by the tax treaties for most countries, and you'll pay full taxes on it. Keep in mind that the IRS may decide that you're actually having a business, in which case you'll be required to attach Schedule C to your tax return and maybe pay additional taxes (mainly self-employment). Also, the USCIS may decide that you're actually having a business, regardless of how the IRS sees it, in which case you may have issues with your green card. For low income from occasional sales, you shouldn't have any issues. But if it is something systematic that you spend significant time on and earn significant amounts of money - you may get into trouble. What's \"\"systematic\"\" and how much is \"\"significant\"\" is up to a lawyer to tell you.\"",
"title": ""
},
{
"docid": "b2ec0e4cfbb63734217e34fd4fd9f04d",
"text": "You are in business for yourself. You file Schedule C with your income tax return, and can deduct the business expenses and the cost of goods sold from the gross receipts of your business. If you have inventory (things bought but not yet sold by the end of the year of purchase), then there are other calculations that need to be done. You will have to pay income tax as well as Social Security and Medicare taxes (both the employee's share and the employer's share) on the net profits from this business activity.",
"title": ""
},
{
"docid": "8f77159e3b4d193b5e3b72e959ddf5cf",
"text": "You don't need to submit a K-1 form to anyone, but you will need to transcribe various entries on the K-1 form that you will receive onto the appropriate lines on your tax return. Broadly speaking, assets received as a bequest from someone are not taxable income to you but any money that was received by your grandmother's estate between the time of death and the time of distribution of the assets (e.g. interest, mutual fund distributions paid in cash, etc) might be passed on to you in full instead of the estate paying income tax on this income and sending you only the remainder. If so, this other money would be taxable income to you. The good news is that if the estate trust distributions include stock, your basis for the stock is the value as of the date of death (nitpickers: I am aware that the estate is allowed to pick a different date for the valuation but I am trying to keep it simple here). That is, if the stock has appreciated, your grandmother never paid capital gains on those unrealized capital gains, and you don't have to pay tax on those capital gains either; your basis is the appreciated value and if and when you sell the stock, you pay tax only on the gain, if any, between the day that Grandma passed away and the day you sell the stock.",
"title": ""
},
{
"docid": "71d5d98b04b8b3014d949fa925d595d7",
"text": "As Victor says, you pay tax on net profit. If this is a significant source of income for you, you should file quarterly estimated tax payments or you're going to get hit with a penalty at the end of the year.",
"title": ""
},
{
"docid": "e4dcc6b3ab3c7a2c70e69426a6c8820e",
"text": "You do not need to file 1099-MISC to yourself if you're running as a sole proprietor - you are yourself. However, you do not deduct this amount from your business income and report it as royalties either. Your self-published book is your business income subject to SE tax. You can only deduct the actual costs of producing/writing, and the remaining amount is your Schedule C income.",
"title": ""
}
] |
fiqa
|
7ff3524c22bd136238bd8c8c90c99840
|
Making your first million… is easy! (??)
|
[
{
"docid": "6ceab9657a3d0586b638a48107e7f043",
"text": "\"It is difficult to become a millionaire in the short term (a few years) working at a 9-to-5 job, unless you get lucky (win the lottery, inheritance, gambling at a casino, etc). However, if you max out your employer's Retirement Plan (401k, 403b) for the next 30 years, and you average a 5% rate of return on your investment, you will reach millionaire status. Many people would consider this \"\"easy\"\" and \"\"automatic\"\". Of course, this assumes you are able to max our your retirement savings at the start of your career, and keep it going. The idea is that if you get in the habit of saving early in your career and live modestly, it becomes an automatic thing. Unfortunately, the value of $1 million after 30 years of inflation will be eroded somewhat. (Sorry.) If you don't want to wait 30 years, then you need to look at a different strategy. Work harder or take risks. Some options:\"",
"title": ""
},
{
"docid": "e70f070567f72d3cd82300d15e0e1f7c",
"text": "\"I realize that \"\"a million dollars\"\" is a completely arbitrary figure, but it's one people fixate on. Perhaps folks just meant it's getting easier because inflation has made it a far less lofty sum than when the word \"\"millionaire\"\" was coined. Your point is correct - it' relatively easier as the 1 million dollar nowadays is no where as valuable as compared in the old days after the inflation adjustment. However the way to achieve that is easier said than done: The most possible way is to run your own business (assuming you will make profit). For most of the people running a job to earn a living - the job income is the biggest factor. Being extremely frugal wouldn't help much if you don't maximize your income potential. Earning a million dollar through investment? How much capitals are you able to invest in? 5k? 50k? 500k? I see no way to earn 1 million with 5k from investment, I wouldn't call it easy. This again depends on your income. With better income of course you could dedicate a larger portion to investment, without exposing too much risk and having to affect your way of life. (3) Invest some part of your income over a long period of time and let the stock market do the work I'd say this is more geared towards beating the inflation and earn a few extra bucks instead of getting very rich (this is being very relative). Just a word of cautions, the mindset of investment being the shortcut to wealth is very dangerous and often leads to speculative behavior.\"",
"title": ""
},
{
"docid": "edc0718cfe98e4cb618686f18277840e",
"text": "Easy. Start with 2 millions and lose only one. Jokes aside, if you want a million USD, you should be asking yourself how you can produce products or services worth $5 millions. (expect the extra to be eaten up by taxes, marketing, sales, workforce...) If by investment you mean making risky bets on the stock market, you might have a better time going to Las Vegas. On the other hand, if by investment you mean finding something that will produce $$$ and getting involved, it's a different matter.",
"title": ""
},
{
"docid": "cf436e92c85791cdbc4cce4ca62c946d",
"text": "\"I think there's a measure of confirmation bias here. If you talk to somebody that started a successful business and got a million out of it, he'd say \"\"it's easy, just do this and that, like I did\"\". If you consider this as isolated incident, you would ignore thousands of others that did exactly the same and still struggle to break even, or are earning much less, or just went broke and moved on long time ago. You will almost never hear about these as books titled \"\"How I tried to start a business and failed\"\" sell much worse than success stories. So I do not think there's a guaranteed easy way - otherwise we'd have much more millionaires than we do now :) However, it does not mean any of those ways is not worth trying - whatever failure rate there is, it's less than 100% failure rate of not trying anything. You have to choose what fits your abilities and personality best - frugality, risk, inventiveness? Then hope you get as lucky as those \"\"it's easy\"\" people are, I guess.\"",
"title": ""
}
] |
[
{
"docid": "263e89f9838c5e3af00d6b60d70cb784",
"text": "As I tell all my clients... remember WHY you are investing in the first. Make a plan and stick to it. Find a strategy and perfect it. A profit is not a profit until you take it. the same goes with a loss. You never loose till you sell for less than what you paid. Stop jumping for one market to the next, find one strategy that works for you. Making money in the stock market is easy when you perfect your trading strategy. As for your questions: Precious metal... Buying or selling look for the trends and time frame for your desired holdings. Foreign investments... They have problem in their economy just as we do, if you know someone that specializes in that... good for you. Bonds and CD are not investments in my opinion... I look at them as parking lots for your cash. At this moment in time with the devaluation of the US dollar and inflation both killing any returns even the best bonds are giving out I see no point in them at this time. There are so many ways to easily and safely make money here in our stock market why look elsewhere. Find a strategy and perfect it, make a plan and stick to it. As for me I love Dividend Capturing and Dividend Stocks, some of these companies have been paying out dividends for decades. Some have been increasing their payouts to their investors since Kennedy was in office.",
"title": ""
},
{
"docid": "b079ae607549fb6fe649c3fdc72958a6",
"text": "The millionaires I know, all got rich because they got lucky. And when I had a million, I got that mostly by luck as well. I had to take some risks, and people said I was absolutely mad, but I stuck to my guns. Most millionaires are rich because of luck. But very few of them will admit it. Preferring to think that skill, effort and business acumen got them there. Nope. It was luck.",
"title": ""
},
{
"docid": "2a91dada3a578174b74b5ac32d61e915",
"text": "\"Given that a poor person probably has much less to invest, how can odds be in their favor? To add to Lan's great answer, if one is \"\"poor\"\" because they don't have enough income to build wealth (invest), then there are only two ways to change the situation - earn more or spend less. Neither are easy but both are usually possible. One can take on side jobs, look for a better-paying career, etc. Cutting spending can also be hard but is generally easier than adding income. In general, wealth building is more about what you do with your income than about how much you make. Obviously the more you make, the easier it is, but just about anyone can build wealth if they spend less than they make. Once your NET income is high enough that you have investible income, THEN you can start building wealth. Unfortunately many people have piles of debts to clean up before they are able to get to that point. What could a small guy with $100 do to make himself not poor anymore, right? Just having $100 is not going to make you \"\"rich\"\". There is a practical limit to how much return you can make short of high-risk activities like gambling, lottery tickets, etc. (I have actually seen this as a justification for playing the lottery, which I disagree with but is an interesting point). If you just invest $100 at 25% per year (for illustration - traditional investments typically only make 10-12% on average), in 10 years you'll have about $931. If instead you invest $100 per month at 12% annualized, in 10 years you'll have over $23,000. Not that $23,000 makes you rich - the point is that regularly saving money is much more powerful than having money to start with.\"",
"title": ""
},
{
"docid": "17e78480112a308574692e1fc00fecfe",
"text": "\"While you would probably not use your ATM card to buy a $1M worth mansion, I've heard urban legends about people who bought a house on a credit card. While can't say its reliable, I wouldn't be surprised that some have actual factual basis. I myself had put a car down-payment on my credit card, and had I paid the sticker price, the dealer would definitely have no problem with putting the whole car on the credit card (and my limits would allow it, even for a luxury brand). The instruments are the same. There's nothing special you need to have to pay a million dollars. You just write a lot of zeroes on your check, but you don't need a special check for that. Large amounts of money are transferred electronically (wire-transfers), which is also something that \"\"regular\"\" people do once or twice in their lives. What might be different is the way these purchases are financed. Rich people are not necessarily rich with cash. Most likely, they're rich with equity: own something that's worth a lot. In this case, instead of a mortgage secured by the house, they can take a loan secured by the stocks they own. This way, they don't actually cash out of the investment, yet get cash from its value. It is similarly to what we, regular mortals, do with our equity in primary residence and HELOCs. So it is not at all uncommon that a billionaire will in fact have tons of money owed in loans. Why? Because the billions owned are owned through stock valuation, and the cash used is basically a loan secured by these stocks. It might happen that the stocks securing the loans become worthless, and that will definitely be a problem both to the (now ex-)billionaire and the bank. But until then, they can get cash from their investment without cashing out and without paying taxes. And if they're lucky enough to die before they need to repay the loans - they saved tons on money on taxes.\"",
"title": ""
},
{
"docid": "38dbc03bb62d2e65febd29d329de169f",
"text": "Very subjective question. some may do it in the first year, some lose money all their life. Some make a fortune and then lose it. Investing time is only a small part of it. some people can never do it just because investing is not for everyone. Just like any other business. or you can invest into t-bill and CDs, you'll be profitable from day one.",
"title": ""
},
{
"docid": "1407a11a1bfd45195cc54d12195ad9d1",
"text": "\"In that example, \"\"creating money\"\" could be used interchangeably with \"\"making promises\"\". There's no inflation, and no problem, so long as everyone keeps their promises. Which sounds like a horrifying thing to say about the foundations of the economy, but the remarkable thing is that people mostly do.\"",
"title": ""
},
{
"docid": "b74a8e5c6b2729dd79d54ca6078e1979",
"text": "\"It's possible to make money in the market - even millions if you \"\"play your cards right\"\". Taking the course being offered can be educational but highly unlikely to increase your chances of making millions. Experience and knowledge of the game will make you money. The stock market is a game.\"",
"title": ""
},
{
"docid": "f5a2ac814e0f47b51a7f35f47f3c850d",
"text": "\"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!\"",
"title": ""
},
{
"docid": "1e4547887ae030e496a7dc8cde9d6191",
"text": "\"I'd ask what your goal is. I was definitely on the path, and for one reason: to make piles of money. After some years in I decided to jump shit and get an MBA. Then the market went into freefall. Guys who paid their dues got fucked huge. Finance isn't the only way to get rich. It's one way, and it seems like the \"\"easy\"\" way. Do x-y-z and jump through the hoops and you are on the path. I'd suggest that if the money is really your true motivation, then there are other ways.\"",
"title": ""
},
{
"docid": "d740d394abaa903f2dee57c1e608dbdc",
"text": "As with any business, there's a huge learning curve. Rich Dad gives you the fundamentals.. which are sound.. you then need to spend time getting the nitty gritty details of the business ... be it real estate, stock investing etc. Kiyosaki is a wealthy man... I've listened to some of his podcasts and he know what he's talking about.. AND.. he's been in the business for 20+ years.",
"title": ""
},
{
"docid": "4211fc1afd54373a20f75de5b335e1da",
"text": "Yes, you can indeed become rich by investing even small amounts over time. Let's say that you begin with nothing invested, and you start investing $100 per week. Suppose you choose to put your money in an S&P 500 index mutual fund. The CAGR (Compound Annual Growth Rate) of the S&P 500 over the last 35 years has been about 11%. (That 35 years includes at least two fairly serious crashes.) You may get more or less than that number in the future, but let's guess that you'll average 9%. 35 years from now, you would be a millionaire ($1.2 Million, actually). This math works out for anyone, no matter who your parents are, where you are from, where you went to school, etc. Yes, you have a better chance of becoming wealthy the more you invest, the longer you have to stay invested, and the better choices you make in your investments. By starting early, you will maximize your time invested, which allows you the flexibility to be more conservative in your investments and to invest smaller amounts. But for those with a shorter time to invest, it is still doable for most people. Get your financial life under control by eliminating your debt, setting a household budget, and investing for the future.",
"title": ""
},
{
"docid": "2bf09520c4309168da2ed803b7cac4e7",
"text": "I don't know about this particular person, however I have an example about my friend. Born in a very rich family he went to Harvard and the worked 2 years for Goldman. Now, I should mention, he is a rather bright fellow, and a great human being as well, but when asked about his studies and work experience in Goldman he described it as not very challenging.",
"title": ""
},
{
"docid": "1cf7b44ccbe3ed58f6170f0f01d982bc",
"text": "Yes, it's possible. However, it's not likely, at least not for most people. Earning a million is not that difficult, but when you talk about billions that's an entirely different story. I think the key point that you're missing is leverage. It's common knowledge that Warren Buffett likes to have a huge cash warchest at his disposal and does not soak himself in debt. However, in his early years Buffett did not get to where he's at by investing only his own money. He ran what was basically a hedge fund and leveraged other peoples' money in the market. This magnified his returns quite substantially. If you look at Buffett's investments, you'll notice that he had a handful of HUGE wins in his portfolio and many more just mediocre success stories. Not everything he invested in turned to gold, but his portfolio was rocketed by the large wins that continued to compound over many years because he held them for so long. Also, consider the fact that Buffett's wealth is largely measured in Berkshire stock. This stock is a reflection of anticipated future earnings by the company. There's no way that alone could turn $10k in 1950 into $50B today... could it? Why not? Take the two founders of Google for example, they became billionaires in short order when Google had it's IPO and basically started in a garage with very little cash. Of course, they didn't do this by buying and selling shares. There are many paths to earnings enormous sums of money like the people you're talking about, but one characteristic that the richest people in society seem to have in common is that they all own their own companies.",
"title": ""
},
{
"docid": "faf2af9aef0c7e879950338c52e1ccf0",
"text": "10k in taser stock at $1.00 per share made those who held into the hundreds per share made millions. But think about the likelihood of you owning a $1 stock and holding it past $10.00. They (taser millionaires) were both crazy and lucky. A direct answer, better off buying a lottery ticket. Stocks are for growing wealth not gaining wealth imho. Of course there are outliers though. To the point in the other answer, if it was repeatable the people teaching the tricks (if they worked) would make much more if they followed their own advice if it worked. Also, if everyone tells you how good gold is to buy that just means they are selling to get out. If it was that good they would be buying and not saying anything about it.",
"title": ""
},
{
"docid": "87af9557f109441c82fe6dd6364b4f64",
"text": "\">It's tremendously more difficult to make large percentage gains on $1 billion than it is to make gains on $1 million. This is true. However, when you consider the 2 and 20 fee structure that is typical of hedge funds, it becomes evident why managing more money is generally better. With a fund with 1B under management, they \"\"earn\"\" 20 million dollars for turning the lights on. Even if they only have a 3% return in a given year, that's another six million dollars. A fund managing a million in assets would have to have a return of 40% to net $100,000. So while the law of diminishing returns may be working in your favor if you are managing less money, if your goal is to make money for yourself it's pretty clear why managing more money is better.\"",
"title": ""
}
] |
fiqa
|
a2ebc7c88f67f889869cfcdf532d9f4e
|
What are the risks of Dividend-yielding stocks?
|
[
{
"docid": "d2644f6e1393dd5456a5622d75f2ca7f",
"text": "Yep, there just is no free lunch. So called high dividend stocks are usually from companies that have stable cash flows but relatively little or moderate growth potential. Utility companies come to mind, let's take telecommunications as an example. Such stocks, usually, indeed are considered more conservative. In a bull market, they won't make high jumps, and in a bear market they shouldn't experience deep falls. I mean, just because the stock market fell by 10%, you're not going to stop using your phone. The stock might suffer a bit but the divided is still yielding you the same. However, fundamental data can have a significant impact. Let's say a recession hits the country of the telco. People might not get the newest iPhone and lock in to an expensive contract anymore, they might use cheaper forms of communication, they might stop paying bills, go bankrupt etc. This will have a severe impact on the company's cash flow and thus hit the stock in a double whammy: One, the dividend is gone. Two, the price will fall even further. There are basically two scenarios after that. Either the recession is temporary and your stock became a regular growth stock that at some point might bounce back and re-establish at the previous levels. Or the economy has contracted permanently but regained stability in which case you will again have a stock with a high dividend yield but based on a lower price. In conclusion: High dividend stocks make sense in a portfolio. But never consider their income to be safe. Reduce your risk by diversifying.",
"title": ""
},
{
"docid": "3e3c8d461b7b18ae5317d268334ae9b0",
"text": "Dividend Stocks like any stock carry risk and go both up and down. It is important to choose a stock based on the company's potential and performance. And, if they pay a dividend it does help. -RobF",
"title": ""
},
{
"docid": "b4930ad8b4477424986d9bb08fd76f2b",
"text": "The risk in a divident paying stock can come from 2 sources. The business of the company, or the valuation of the stock at the time you buy. The business of the company relates to how they are running things, the risks they are taking with the company, innovations in their pipeline, and their competitive landscape. You can find all sorts of examples of companies that paid nice dividends but didn't end so well... Eastman Kodak, Enron, Lehman brothers, all used to pay very nice dividends at some point... On the other hand you have the valuation. The company is running great, but the market has unrealistic expectations about it. Think Amazon and Yahoo back in 2001... the price was way too high for the company's worth. As the price of a stock goes up, the return that you get from its future cash flows (dividends) goes down (and viceversa). If you want to go deep into the subject, check out this course from Chicago U they spend a lot of time talking about dividends, future returns from stocks and the risk rewards of finding stocks by methods such as these.",
"title": ""
},
{
"docid": "ee5ebb3166c476aae0783c775c317dc4",
"text": "Having a good dividend yield doesn't guarantee that a stock is safe. In the future, the company may run into financial trouble, stop paying dividends, or even go bankrupt. For this reason, you should never buy a stock just because it has a high dividend yield. You also need some criteria to determine whether that stock is safe to buy. Personally, I consider a stock is reasonably safe if it meets the following criteria:",
"title": ""
},
{
"docid": "e5a3d6571cd81096cd5d15ac5f33b0bb",
"text": "\"No stock is risk-free. Some of the biggest companies in the country, that seemed incredibly stable and secure, have suffered severe downturns or gone out of business. Twenty or thirty years ago Kodak ruled the camera film market. But they didn't react quickly enough when digital cameras came along and today they're a shadow of their former self. Forty years ago IBM owned like 90% of the computer market -- many people used \"\"IBM\"\" as another word for computer. Sears used to dominate the retail department store market. Etc.\"",
"title": ""
},
{
"docid": "299853db8bcf407fd6521d9673dc0cde",
"text": "One strategy to consider is a well-diversified index fund of equities. These have historically averaged 7-8% real growth. So withdrawing 3% or 4% yearly under that growth should allow you to withdraw 30+ years with little risk of drawing down all your capital. As a bonus you're savings target would come down from $10 million to $2.5 million to a little under $3.5 million.",
"title": ""
}
] |
[
{
"docid": "0ccdc6551bab3d553a85e58f297e935e",
"text": "A share is more than something that yields dividends, it is part ownership of the company and all of its assets. If the company were to be liquidated immediately the shareholders would get (a proportion of) the net value (assets - liabilities) of the company because they own it. If a firm is doing well then its assets are increasing (i.e. more cash assets from profits) therefore the value of the underlying company has risen and the intrinsic value of the shares has also increased. The price will not reflect the current value of the firms assets and liabilities because it will also include the net present value of expected future flows. Working out the expected future flows is a science on par with palmistry and reading chicken entrails so don't expect to work out why a company is trading at a price so much higher than current assets - liabilities (or so much lower in companies that are expected to fail). This speculation is in addition to price speculation that you mention in the question.",
"title": ""
},
{
"docid": "c372d42ad4cbdb97645e1f11384d9124",
"text": "\"Some investors worry about interest rate risk because they Additional reason is margin trading which is borrowing money to invest in capital markets. Since margin trading includes minimum margin requirements and maintenance margin to protect lender \"\"such as a broker\"\" , a decrease in the value of bonds might trigger a threat of a margin call There are other reasons why investors care about interest rate risk such as spread trade investors who benefit from difference in short term/ long term interest rates. Such investors borrow short term loans -which enables them to pay low interest- and lend long term loans - which enables them to gain high interest-. Any disturbance between the interest rate spread between short term and long term bonds might affect investor's profit and might even lead to losses. In summary , it all depends on you investment objective and financial condition. You should consult with your financial adviser to help plan for your financial goals.\"",
"title": ""
},
{
"docid": "dda0fb223ab5a85f71808cc1cc96cd93",
"text": "\"Good observation. In fact, the S&P index itself is guilty of not including dividends. So when you look at the index alone, the delta between any two points in time diverges, and the 20 return observed if one fails to include dividends is meaningless, in my my humble opinion. Yahoo finance will let you look at a stock ticker and offer you an \"\"adjusted close\"\" to include the dividend effect.\"",
"title": ""
},
{
"docid": "b68a08ae762146bd2022814306162a4a",
"text": "\"Random question: are there any companies with \"\"physical,\"\" \"\"real,\"\" or \"\"in-kind\"\" dividends? For clarification, suppose a winery offers a security with a dividend of X bottles of wine deliverable annually for every Y amount of shares owned. Does such a company or practice exist?\"",
"title": ""
},
{
"docid": "25642445db62867fabedea609cea9f71",
"text": "Long-term bonds -- any bonds, really -- can be risky for two main reasons: return on principal, or return of principal. The former is a problem if interest rates are low (which they are now in the US) because existing bonds will fall in price if interest rates rise. The second is a problem if the lender defaults: IOU nothing. No investment is riskless. Short-term bonds command a lower interest rate than long-term bonds (usually) because of their quicker maturity, but short-term bonds carry risk just like long-term bonds (though the interest rate risk is lower, sometimes quite a bit lower, than for long-term bonds).",
"title": ""
},
{
"docid": "b67e4d82a9e0277becf00e9f95279d94",
"text": "\"You may be thinking about this the wrong way. The yield (Return) on your investment is effectively the market price paid to the investor for the amount of risk assumed for participating. Looking at the last few years, many including myself would have given their left arm for a so-called \"\"meager return\"\" instead of the devastation visited on our portfolios. In essence, higher return almost always (arguably always) comes at the cost of increased risk. You just have to decide your risk profile and investment goals. For example, which of the following scenarios would you prefer? Investment Option A Treasuries, CD's Worst Case: 1% gain Best Case 5% gain Investment option B Equities/Commodities Worst Case: 25% loss Best Case: 40% gain\"",
"title": ""
},
{
"docid": "661faa4d48f96d63ec1a4467fefc9842",
"text": "The catch is that you're doing a form of leveraged investing. In other words, you're gambling on the stock market using money that you've borrowed. While it's not as dangerous as say, getting money from a loan shark to play blackjack in Vegas, there is always the chance that markets can collapse and your investment's value will drop rapidly. The amount of risk really depends on what specific investments you choose and how diversified they are - if you buy only Canadian stocks then you're at risk of losing a lot if something happened to our economy. But if your Canadian equities only amount to 3.6% of your total (which is Canada's share of the world market), and you're holding stocks in many different countries then the diversification will reduce your overall risk. The reason I mention that is because many people using the Smith Maneuver are only buying Canadian high-yield dividend stocks, so that they can use the dividends to accelerate the Smith Maneuver process (use the dividends to pay down the mortgage, then borrow more and invest it). They prefer Canadian equities because of preferential tax treatment of the dividend income (in non-registered accounts). But if something happened to those Canadian companies, they stand to lose much of the investment value and suddenly they have the extra debt (the amount borrowed from a HELOC, or from a re-advanceable mortgage) without enough value in the investments to offset it. This could mean that they will not be able to pay off the mortgage by the time they retire!",
"title": ""
},
{
"docid": "caaa941e38ec9ee827a9992f82a54e8c",
"text": "\"Usually there are annual or semi-annual reports for a mutual fund that may give an idea for when a fund will have \"\"distributions\"\" which can cause the NAV to fall as this is when the fund passes the taxable liabilities to shareholders in the form of a dividend. Alternatively, the prospectus of the fund may also have the data on the recent distribution history that is likely what you want. If you don't understand why a fund would have a distribution, I highly suggest researching the legal structure of an open-end mutual fund where there more than a few rules about how taxes are handled for this case.\"",
"title": ""
},
{
"docid": "2cfa0834b636fde849cb2ec3218d1032",
"text": "To add to this, that risk is really only a problem if you don't have the cash flow to service the debt. If the surplus dips but your ultimately profitable on whatever trade you made, you're okay. If you default, you're not okay. Volitility relative to loan term effectively.",
"title": ""
},
{
"docid": "e699a0816100fcf20f7554246ab75094",
"text": "Dividends are actually a very stable portion of equity returns, the Great recession and Great Depression notwithstanding: However, dividends, with lower variance have lower returns. Most of the return is due to the more variant price: So while dividends fell by 25% during the worst drop since the Great Depression, prices fell almost by 2/3. If one can accumulate enough wealth to live only off of dividend income, the price risk becomes much more manageable. This is the ideal circumstance for retirement.",
"title": ""
},
{
"docid": "a13a5183fa18ad97d0487ffeb6827fd9",
"text": "\"is it worth it? You state the average yield on a stock as 2-3%, but seem to have come up with this by looking at the yield of an S&P500 index. Not every stock in that index is paying a dividend and many of them that are paying have such a low yield that a dividend investor would not even consider them. Unless you plan to buy the index itself, you are distorting the possible income by averaging in all these \"\"duds\"\". You are also assuming your income is directly proportional to the amount of yield you could buy right now. But that's a false measure because you are talking about building up your investment by contributing $2k-$3k/month. No matter what asset you choose to invest in, it's going to take some time to build up to asset(s) producing $20k/year income at that rate. Investments today will have time in market to grow in multiple ways. Given you have some time, immediate yield is not what you should be measuring dividends, or other investments, on in my opinion. Income investors usually focus on YOC (Yield On Cost), a measure of income to be received this year based on the purchase price of the asset producing that income. If you do go with dividend investing AND your investments grow the dividends themselves on a regular basis, it's not unheard of for YOC to be north of 6% in 10 years. The same can be true of rental property given that rents can rise. Achieving that with dividends has alot to do with picking the right companies, but you've said you are not opposed to working hard to invest correctly, so I assume researching and teaching yourself how to lower the risk of picking the wrong companies isn't something you'd be opposed to. I know more about dividend growth investing than I do property investing, so I can only provide an example of a dividend growth entry strategy: Many dividend growth investors have goals of not entering a new position unless the current yield is over 3%, and only then when the company has a long, consistent, track record of growing EPS and dividends at a good rate, a low debt/cashflow ratio to reduce risk of dividend cuts, and a good moat to preserve competitiveness of the company relative to its peers. (Amongst many other possible measures.) They then buy only on dips, or downtrends, where the price causes a higher yield and lower than normal P/E at the same time that they have faith that they've valued the company correctly for a 3+ year, or longer, hold time. There are those who self-report that they've managed to build up a $20k+ dividend payment portfolio in less than 10 years. Check out Dividend Growth Investor's blog for an example. There's a whole world of Dividend Growth Investing strategies and writings out there and the commenters on his blog will lead to links for many of them. I want to point out that income is not just for those who are old. Some people planned, and have achieved, the ability to retire young purely because they've built up an income portfolio that covers their expenses. Assuming you want that, the question is whether stock assets that pay dividends is the type of investment process that resonates with you, or if something else fits you better. I believe the OP says they'd prefer long hold times, with few activities once the investment decisions are made, and isn't dissuaded by significant work to identify his investments. Both real estate and stocks fit the latter, but the subtypes of dividend growth stocks and hands-off property investing (which I assume means paying for a property manager) are a better fit for the former. In my opinion, the biggest additional factor differentiating these two is liquidity concerns. Post-tax stock accounts are going to be much easier to turn into emergency cash than a real estate portfolio. Whether that's an important factor depends on personal situation though.\"",
"title": ""
},
{
"docid": "92f0b60388d535a8b24ec5ee5eac7417",
"text": "\"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.\"",
"title": ""
},
{
"docid": "b5800f63f0c10a1e5baba7f2a38d43ef",
"text": "From the hover text of the said screen; Latest dividend/dividend yield Latest dividend is dividend per share paid to shareholders in the most recent quarter. Dividend yield is the value of the latest dividend, multiplied by the number of times dividends are typically paid per year, divided by the stock price. So for Ambev looks like the dividend is inconsistantly paid and not paid every quarter.",
"title": ""
},
{
"docid": "8b31af198fa10e9b9452c1f78618b999",
"text": "I think it may be best to take everything you're asking line-by-line. Once you buy stocks on X day of the month, the chances of stocks never actually going above and beyond your point of value on the chart are close to none. This is not true. Companies can go out of business, or take a major hit and never recover. Take Volkswagen for example, in 2015 due to a scandal they were involved in, their stocks went downhill. Now their stocks are starting to rise again. The investors goal is not to wait as long as necessary to make a profit on every stock purchase, but to make the largest profit possible in the shortest time possible. Sometimes this means selling a stock before it recovers (if it ever does). I think the problem with most buyers is that they desire the most gain they can possibly have. However, that is very risky. This can be true. Every investor needs to gauge the risk they're willing to take and high-gain investments are riskier. Therefore, it's better to be winning [small/medium] amounts of money (~)100% of the time than [any] amount of money <~25%. Safer investments do tend to yield more consistent returns, but this doesn't mean that every investor should aim for low-yield investments. Again, this is driven by the investor's risk tolerance. To conclude, profitable companies' stock tends to increase over time and less aggressive investments are safer, but it is possible to lose from any stock investment.",
"title": ""
},
{
"docid": "6ee8d4a941cc76b83c804066b7e40877",
"text": "Your friend is investing time & money in a business that does not list an address or phone number on its website, not even in its 'press kit'. Even when they make a press release about moving into a new building, it does not list the address or even the street! C'mon, this is obviously a scam. No real business acts like this.",
"title": ""
}
] |
fiqa
|
c9ae46583b6f06250f6f0d6a871516cc
|
Where to deduct gambling losses?
|
[
{
"docid": "2d258d9865dc769c64e985ecef06366c",
"text": "1: Gambling losses not in excess of gambling winnings can be deducted on Schedule A, line 28. See Pub 17 (p 201). Line 28 catches lots of deductions, and gambling losses are one of them. See Schedule A instructions. 2: If the Mississippi state tax withheld was an income tax (which I assume it was), then it goes on Schedule A, line 5a. In the unlikely event it was not a state or local tax on income, but some sort of excise on gambling, then it may be deductible on line 8 as another deductible tax. It probably is not a personal property tax, which is generally levied against the value of things like cars and other movable property but not on receipts of cash; line 7 probably is not appropriate. The most likely result, without researching Mississippi SALT, is that it was an income tax. See Sched A Instructions for more on the differences between the types of taxes paid. Just to be clear, these statements hold if you are not engaging in poker as a profession. If you are engaging in poker as a business, which can be difficult to establish in the IRS' eyes, then you would use Schedule C and also report business and travel expenses. But the IRS is aware that people want to reduce their gambling income by the cost of hotels and flights to casinos, so it's a relatively high hurdle to be considered a professional poker player.",
"title": ""
}
] |
[
{
"docid": "8357a729b20014c82aa2ce046b89fe1c",
"text": "\"Gambling is perhaps not well defined, but it certainly doesn't include things like reality show winnings. However, it is possible he could deduct something for this. If the reality show qualifies as a \"\"hobby\"\", and his expenses exceed the 2% of AGI requirement, it's possible he could deduct those airplane tickets and such. That deduction is explained in Publication 529.\"",
"title": ""
},
{
"docid": "375248b0d64bb79e972672666d40d13f",
"text": "I do a lot of sports betting and I’m heavily limited on some sites where I have had good winning streaks. Some of them are as low as $5 per game. So yeah, the house definitely tilts the table if it benefits them.",
"title": ""
},
{
"docid": "0831ba49c07783c11cda19799c2448d6",
"text": "If I sell it for $50 can I write off the $50 loss. Only if you can establish that it is a normal part of your business and that you did not get $50 worth of use out of it. That's the technical, legal argument. As a practical matter, it's unlikely that they'll ding you for selling something after using it, as they won't know. If they did catch you, you would be in trouble. You can't deduct loss due to personal use. The larger problem is that if you sell one TV for a $50 loss, they aren't going to believe that you are in the business of selling TVs. If you sell a larger amount for a loss, then they still are unlikely to believe that you are in business. If you sell a large amount for an overall gain, they are unlikely to notice that you took a loss on one TV. They could only notice that if they were already auditing you, as that wouldn't be visible in your tax forms.",
"title": ""
},
{
"docid": "32eeaa85f8cf441c5a65496f8d88bf0d",
"text": "On line 21 of Schedule D, you write the smaller of So, in your case, since your Line 16 shows a loss of more than $3000 on Line 21, you write 3000 on Line 21 (the parentheses indicating that is it a negative number are already included on the form). Also, you write (3000) on Form 1040 Line 13. The rest of the loss is a carryover to next year (be sure to fill out the Capital Loss Carryover Worksheet where the carryover to next year is computed). Summary: you cannot write 0 on Line 21 of Schedule D and carry over the entire loss to next year. You must deduct $3000 this year and carry over the rest of the loss to next year.",
"title": ""
},
{
"docid": "3a24e8c7fb56eacce57030b2d4d34c3c",
"text": "For stocks, bonds, ETF funds and so on - Taxed only on realised gain and losses are deductible from the gain and not from company's income. Corporate tax is calculated only after all expenses have been deducted. Not the other way around. Real estate expenses can be deducted because of repairs and maintenance. In general all expenses related to the operation of the business can be deducted. But you cannot use expenses as willy nilly, as you assume. You cannot deduct your subscription to Playboy as an expense. Doing it is illegal and if caught, the tours to church will increase exponentially. VAT is only paid if you claim VAT on your invoices. Your situation seems quite complicated. I would suggest, get an accountant pronto. There are nuances in your situation, which an accountant only can understand and help.",
"title": ""
},
{
"docid": "7ec4040c3ac8334ab36c650435360cd4",
"text": "\"As Dilip said, if you want actual concrete, based in tax law, answers, please add the country (and if applicable, state) where you pay income tax. Also, knowing what tax bracket you're in would help as well, although I certainly understand if you're not comfortable sharing that. So, assuming the US... If you're in the 10% or 15% tax bracket, then you're already not paying any federal tax on the $3k long term gain, so purposely taking losses is pointless, and given that there's probably a cost to taking the loss (commission, SEC fee), you'd be losing money by doing so. Also, you won't be able to buy back the loser for 31 days without having the loss postponed due to the wash sale that would result. State tax is another matter, but (going by the table in this article), even using the highest low end tax rate (Tennessee at 6%), the $50 loss would only save you $3, which is probably less than the commission to sell the loser, so again you'd be losing money. And if you're in a state with no state income tax, then the loss wouldn't save you anything on taxes at the state level, but of course you'll still be paying to be able to take the loss. On the high end, you'd be saving 20% federal tax and 13.3% state tax (using the highest high end tax state, California, and ignoring (because I don't know :-) ) whether they tax long-term capital gains at the same rate as regular income or not), you'd be saving $50 * (20% + 13.3%) = $50 * 33.3% = $16.65. So for taxes, you're looking at saving between nothing and $16.65. And then you have to subtract from that the cost to achieve the loss, so even on the high end (which means (assuming a single filer)) you're making >$1 million), you're only saving about $10, and you're probably actually losing money. So I personally don't think taking a $50 loss to try to decrease taxes makes sense. However, if you really meant $500 or $5000, then it might (although if you're in the 10-15% brackets in a no income tax state, even then it wouldn't). So the answer to your final question is, \"\"It depends.\"\" The only way to say for sure is, based on the country and state you're in, calculate what it will save you (if anything). As a general rule, you want to avoid letting the tax tail wag the dog. That is, your financial goal should be to end up with the most money, not to pay the least taxes. So while looking at the tax consequences of a transaction is a good idea, don't look at just the tax consequences, look at the consequences for your overall net worth.\"",
"title": ""
},
{
"docid": "29079941bcf673433726120d468485ea",
"text": "If you have multiple accounts, you have to empty them all before you can deduct any losses. Your loss is not a capital loss, its a deduction. It is calculated based on the total amount you have withdrawn from all your Roth IRA's, minus the total basis. It will be subject to the 2% AGI treshhold (i.e.: if your AGI is > 100K, none of it is deductible, and you have to itemize to get it). Bottom line - think twice. Summarizing the discussion in comments: If you have a very low AGI, I would guess that your tax liability is pretty low as well. Even if you deduct the whole $2K, and all of it is above the other deductions you have (which in turn is above the standard deduction of almost $6K), you save say $300 if you're in 15% tax bracket. That's the most savings you have. However I'm assuming something here: I'm assuming that you're itemizing your deductions already and they're above the standard deduction. This is very unlikely, with such a low income. You don't have state taxes to deduct, you probably don't spend a lot to deduct sales taxes, and I would argue that with the low AGI you probably don't own property, and if you do - you don't have a mortgage with a significant interest on it. You can be in 15% bracket with AGI between (roughly) $8K and $35K, i.e.: you cannot deduct between $160 and $750 of the $2K, so it's already less than the maximum $300. If your AGI is $8K, the deduction doesn't matter, EIC might cover all of your taxes anyway. If your AGI is $30K, you can deduct only $1400, so if you're in the 15% bracket - you saved $210. That, again, assuming it's above your other deductions, which in turn are already above the standard deduction. Highly unlikely. As I said in the comments - I do not think you can realistically save on taxes because of this loss in such a manner.",
"title": ""
},
{
"docid": "a936d2048a9a5aaf00b15383d3040ce9",
"text": "If you have made $33k from winning trades and lost $30k from loosing trades your net gain for the year would be $3k, so obviously you would pay taxes only on the net $3k gains.",
"title": ""
},
{
"docid": "4ce9fb573885d1dbdbeb929146e33977",
"text": "The principle here seems to be that just betting itself is not taxable. From BIM22015 The basic position is that betting and gambling, as such, do not constitute trading However, An organised activity to make profits out of the gambling public will normally amount to trading. The idea seems to be that being a bookmaker is taxable, but just making bets is not. BIM22017 going into it a bit more: The fact that a taxpayer has a system by which they place their bets, or that they are sufficiently successful to earn a living by gambling does not make their activities a trade. BIM22018 goes into detail on the other side, talking those who are taxable: An organised activity to make profits out of the gambling public will normally amount to trading. An example of this is the bookmaker. ... The key feature is that the taxpayer is likely to be involved in the organisation of the activity. They are not mere punters. They are carrying on an activity where the odds are in their favour. The links prove further information, but the theme seems to be that acting as a bookmaker would be trading income, which is taxable, but acting like a punter, even one with a system, would not be. It's not clear from your description which applies. You may need further advice on the tax treatment that is appropriate. Also follow each of the links for further information. BIM22015 provides links to the most relevant information. Note, it isn't true that all income is taxable, regardless of source. BIM15035 talks about this. It specifies that for something to be taxable income, it must come from a taxable source. If, for example, a taxpayer is a trader that does not mean that any non-capital receipt he or she gets is chargeable as trading income. It must also be a receipt forming part of the profits of the trade, which is the taxable ‘source’",
"title": ""
},
{
"docid": "7c1674dbe0971d64da0bdbd3313c7196",
"text": "\"There are (at least) two problems with the argument suggested in the OP. First, the ability to cover the cost, doesn't mean willingness, ease, or no major side effects of doing so. Second is the mitigation of \"\"upside risk\"\". It might be true that the most usual loss is small and manageable, but 10% of incidents could be considerably larger and 1% may be very much larger - without limit. Your own attitude to risk and loss will determine how much these are seen as unlikely+ignore, or worst case situation+avoid.\"",
"title": ""
},
{
"docid": "7cf3a0af9562c14c623d6225f986f0ce",
"text": "\"The key point to answer the question is to consider risk aversion. Assume I suggest a game to you: Throw a coin and if you win, you get $5, if you lose nothing happens. Will you play the game? Of course, you will - you have nothing to lose! What if I suggest this: If you win, you get $10,000,005 and if you lose you must pay $10,000,000 (I also accept cars, houses, spouses, and kidneys as payment). While the expected value of the second game is the same as for the first, if you lose the second game you are more or less doomed to spend the rest of your life in poverty or not even have a rest of your life. Therefore, you will not wish to play the second game. Well, maybe you do - but probably only if you are very, very rich and can easily afford a loss (even if you had $11,000,000 you won't be as happy with a possible raise to $21,000,005 as you'd be unhappy with dropping to a mere $1,000,000, so you'd still not like to play). Some model this by taking logarithms: If your capital grows from $500 to $1000 or from $1000 to $2000, in both cases it doubles, hence is considered the same \"\"personal gain\"\", effectively. And, voíla, the logartithm of your capital grows by the same amount in both cases. This refelcts that a rich man will not be as happy about finding a $10 note as a poor man will be about finding a nickel. The effect of an insurance is that you replace an uncertain event of great damage with a certain event of little damage. Of course, the insurance company plays the same game, with roles swapped - so why do they play? One point is that they play the game very often, which tends to nivel the risks - unless you do something stupid and insure all inhabitants of San Francisco (and nobody else) against eqarthquakes. But also they have enough capital that they can afford to lose the game. In a fair situation, i.e. when the insurance costs just as much as damage cost multiplied with probability of damage, a rational you would eagerly buy the insurance because of risk aversion. Therefore, the insurance will in effect be able to charge more than the statistically fair price and many will still (gnawingly) buy it, and that's how they make a living. The decision how much more one is willing to accept as insurance cost is also a matter of whether you can afford a loss of the insured item easily, with regrets, barely, or not all.\"",
"title": ""
},
{
"docid": "d52ea9db44206476ac686502ec2c2d92",
"text": "\"You have a sequence of questions here, so a sequence of answers: If you stopped at the point where you had multiple wins with a net profit of $72, then you would pay regular income tax on that $72. It's a short term capital gain, which does not get special tax treatment, and the fact that you made it on multiple transactions does not matter. When you enter your next transaction that takes the hypothetical loss the question gets more complicated. In either case, you are paying a percentage on net gains. If you took a two year view in the second case and you don't have anything to offset your loss in the second year, then I guess you could say that you paid more tax than you won in the total sequence of trades over the two years. Although you picked a sequence of trades where it does not appear to play, if you're going to pursue this type of strategy then you are likely at some point to run into a case where the \"\"wash sale\"\" rules apply, so you should be aware of that. You can find information on this elsewhere on this site and also, for example, here: http://www.marketwatch.com/story/understanding-the-wash-sale-rules-2015-03-02 Basically these rules require you to defer recording a loss under some circumstances where you have rapid wins and losses on \"\"substantially identical\"\" securities. EDIT A slight correction, you can take part of your losses in the second year even if you have no off-setting gain. From the IRS: If your capital losses exceed your capital gains, the amount of the excess loss that you can claim on line 13 of Form 1040 to lower your income is the lesser of $3,000, ($1,500 if you are married filing separately)\"",
"title": ""
},
{
"docid": "a29dbbeb49cb9c330c97d64a0048a349",
"text": "Quick, move to the state where the ticket was bought. Set up a resident and then claim the prize. Then, move back home, if you want. IMO But both states will still try to make a claim for the tax money, if you give them a reason to try. They have nothing else to do, but look for revenue.",
"title": ""
},
{
"docid": "1cc96b5757877b174dc8f1fee4ca1ab6",
"text": "I did not file taxes on last season winnings as I’ve received conflicting advise (particularly regarding self-employment taxes). I have all my documentation to support my winnings should I file as a professional gambler. Oh dear. Get a GOOD tax adviser (licensed as EA, CPA or Attorney in Nevada) who's specializing in providing services to people like you and have it resolved ASAP. You're in major non-compliance. If you earned by gambling more than you earned by working in years, and you haven't reported that on your taxes - you may very well find yourself in jail. As to your original question - why on earth would you have a corporation for gambling? Or LLC... Why? What's the liability that you want to shield yourself of? It's your money that you're risking, and the risk is that you lose it, how is LLC or Corp going to help you in any way? Gambling winnings are reported as miscellaneous income (whether you're professional or just got lucky once with a slot machine - no matter), and if you're a pro (and it sounds like that since you're doing it systematically and in order to make profits), then yes, you pay SE taxes on it. Whoever told you anything else told you to break the law. Which you did, unfortunately.",
"title": ""
},
{
"docid": "0e2b7face83c9f057e8fb4d0310c93a3",
"text": "\"To answer your question point by point - I'd focus on the last point. The back of my business card - Let's focus on Single. The standard deduction and exemption add to over $10K. I look at this as \"\"I can have $250K in my IRA, and my $10K (4%) annual withdrawal will be tax free. It takes another $36,900 to fill the 10 and 15% brackets. $922K saved pretax to have that withdrawn each year, or $1.17M total. That said, I think that depositing to Roth in any year that one is in the 15% bracket or lower can make sense. I also like the Roth Roulette concept, if only for the fact that I am Google's first search result for that phrase. Roth Roulette is systematically converting and recharacterizing each year the portion of the converted assets that have fallen or not risen as far in relative terms. A quick example. You own 3 volatile stocks, and convert them to 3 Roth accounts. A year later, they are (a) down 20%, (b) up 10%, (c) up 50%. You recharacterize the first two, but keep the 3rd in the Roth. You have a tax bill on say $10K, but have $15K in that Roth.\"",
"title": ""
}
] |
fiqa
|
b6af8237ff2f2a571a27fa70f6d6fdc5
|
are there any special procedures for managing non-petty cash?
|
[
{
"docid": "9e0bf969138d5735f61a8ebd7bdc190b",
"text": "\"You manage this account just as any other account. \"\"Petty cash\"\" refers to accounts where the cash money is intended for ad-hoc purchases, where you store an amount of cash in your drawer and take it out as needed. However, other than naming it \"\"petty cash\"\", there's nothing petty about it - it's an account just as any other. Many choose to just \"\"deduct\"\" the amount transferred to \"\"Petty Cash\"\" account and not manage it at all. Here the amount matters - some smaller amounts can fall under \"\"de minimis\"\" rules of the appropriate regulatory authority. Since you told nothing about where you are and what your business is - we can't tell you what the rules are in your case. If you track the usage of this account (and from your description it sounds like you are) - then the name \"\"Petty Cash\"\" is meaningless. It's an account just like any other. Since you have an employee dealing with this cash you should establish some internal audit procedures to ensure that there's no embezzlement and everything is accounted for. You will probably want to reconcile this account more often than others and check more thoroughly on what's going on with it. Since its a \"\"personal finance\"\" forum, I'm assuming you're a sole proprietor or a very small business, and SEC/SOX rules don't apply to you. If they do - you should have a licensed accountant (CPA or whatever public accountancy designation is regulated in your area) to help you with this.\"",
"title": ""
},
{
"docid": "5892a6b97d54e8ad76db42787b8e4aa0",
"text": "After talking to two CPAs it seems like managing it using an imprest system is the best idea. The base characteristic of an imprest system is that a fixed amount is reserved and later replenished as it runs low. This replenishment will come from another account source, e.g., petty cash will be replenished by cashing a cheque drawn on a bank account. Petty cash imprest system allows only the replenishment of the spend made. So, if you start the month with €100 in your petty cash float and spend €90 of that cash in the month, an amount of €90 will be then placed in your petty cash float to bring the balance of your petty cash float back to €100. The replenishment is credited to the primary cash account, usually a bank account (Dr - Petty Cash a/c, Cr - Bank a/c) and the debits will go to the respective expense accounts, based on the petty cash receipt dockets (Dr- Expense a/c, Cr - Petty Cash a/c). In a non imprest system where a fixed amount is issued every month, e.g., €100 every time cash is required, there is no incentive to ensure all money issued has been documented because when money is all spent a check for a fixed amount is issued. It is much more difficult to reconcile a non imprest system as you never know how much exactly should be in the float. In an imprest system the amount requested is documented, the documentation being the petty cash dockets and their associated receipts or invoices. So at all times you can check how much should be left in the petty cash float by deducting the amount spent from the opening petty cash float.",
"title": ""
}
] |
[
{
"docid": "c1e5f7c7acf12b8ee23c673cd73e1487",
"text": "How do I withdraw a large sum from my bank and give it to a money management firm? Either write a check to the Money Management firm or wire transfer the funds to the account mentioned.",
"title": ""
},
{
"docid": "595edcd219da19b00009f7a9338b5f10",
"text": "I'm not a finance professional by any means, but my understanding of cashier's checks is that they're more in favour of the person receiving. They're essentially guaranteeing that you have the money in your account to provide payment to the recipient. The advice I've always received is to treat cashier's checks and money orders as straight up cash, because that's essentially what they are. Hopefully someone else can come in with a better background, but I figured I'd pitch in.",
"title": ""
},
{
"docid": "d209a5d245c3051134b821bb1c03f58c",
"text": "1 Primary acct. Receive and distribute money to all other accts. For security do not permit debit cards to touch or payment pull from this account. All joint bills paid here. Attach a savings acct and credit card to this account for accruing taxes vacation money blah blah. This will facilitate managing instead of storing your funds. 2 Push distributions to one or two other individual accounts on whatever basis works. Cash groceries incidentals. Debit cards here.",
"title": ""
},
{
"docid": "8f6d0075e62e2c655b39f049dba249df",
"text": "Structuring, as noted in another answer, involves breaking up cash transactions to avoid the required reporting limits. There are a couple of important things to note. And, the biggest caveat - there have been many cases of perfectly legitimate transactions that have fallen foul of the reporting requirements. One case springs to mind of a small business that routinely deposited the previous day's receipts as cash, and due to the size of the business, those deposits typically fell in the $9,000-$9,500 range. This business ended up going through a lot of headaches and barely survived. Some don't. A single batch of transactions, if it is only 2 or 3 parts and they are separated by reasonable intervals, is not likely in and of itself to be suspicious. However, any set of such transactions does run the risk of being flagged. In your case, you also run afoul of the Know Your Customer rules, because it's not even you depositing the cash - it's your friend. (Why can your friend not simply write you a check? What is your friend doing with $5k of cash at a time? How do you know he's not generating illegal income and using you to launder it for him?) Were I your bank, you can be very certain I'd be reporting these transactions. Just from this description, this seems questionable to me. IRS seizes millions from law-abiding businesses",
"title": ""
},
{
"docid": "f5827ececad5a61f0f7966888a3a9d00",
"text": "\"You state \"\"Any info will be appreciated\"\", so here's some background information on my answer (you can skip to my answer): When I worked for banks, I was required to submit suspicious activity to the people above me by filling out a form with a customer's name, SSN, account number(s) and ID. You may hear in media that it is $10K or sometimes $5K. The truth is that it could be lower than that, depending on what the institution defines as suspicious. Every year we were required to take a \"\"course\"\" which implied that terrorists and criminals use cash regularly - whether we agree or disagree is irrelevant - this is what the course implied. It's important to understand that many people use cash-only budgets because it's easier than relying on the banking system which charges overdraft fees for going over, or in some cases, you pay more at merchants because of card usage (some merchants give discounts for cash). If someone has a budget of $10K a month and they choose to use cash, that's perfectly fine. Also, why is it anyone's business what someone does with their private property? This created an interesting contrast among differently aged Americans - older Americans saw the banking system as tyrannical busybodies whereas young Americans didn't care. This is part of why I eventually left the banking system; I felt sick that I had to report this information, but it's amazing how quick everyone is to accept the new rules. Notice how one of the comments asks you what you intend to do with the money, as if it's any of their business. Welcome to the New America©! My answer: If you withdraw $100,000, here is what will more than likely happen: Now, watch the anger at this answer because I'm telling you the truth. This article will explain why. Your very question had a negative 1, as if asking what you're asking is wrong (see the absurdity)! If Joseph Stalin ran for president in the United States, the majority of Americans would welcome him. You have good reason to be concerned; others at this site have noticed this as well.\"",
"title": ""
},
{
"docid": "dcf7b6129f6a8a9145f65dc426f9870e",
"text": "PocketSmith is another tool you might like to consider. No personal banking details are required, but you can upload your transactions in a variety of formats. Pocketsmith is interesting because it really focus on your future cash flow, and the main feature of the interface is around having a calendar(s) where you easily enter one off or repetitive expenses/income. http://www.pocketsmith.com/",
"title": ""
},
{
"docid": "4a18480745da1c3493c5bb28789f8041",
"text": "\"A money order is basically a pre-paid check. The physical cash would probably get deposited into a \"\"master\"\" custodial bank account. Each money order has a different bank account number on the check where the funds are available as you have paid-for already. With the routing number as well, your traditional bank account will be able to process it as a deposit. For USPS money orders though, they can be cashed directly at their retail locations.\"",
"title": ""
},
{
"docid": "2a8aa234932951e462e9c75416d5fab0",
"text": "If you want to keep any consistent standard, you need to knuckle down and make those transaction entries. Honestly, this is a lot faster doing in bulk than doing day-by-day. But change how you account so it isn't annoying. I minimize my bookable transactions. For instance I deposit all income whole (for tracking) but stop tracking when the money is converted to cash or gift card money - I log adding $50 to a McDonalds gift card, but not the individual meals. I only use cash for the myriad small things I do not want to track - fast food, parking meters, etc. Anything big or that I want to track goes on a credit card. Then it's easy to reconcile credit cards to accounting system. (Cathy) Ryan's Law: if it wasn't written down, it didn't happen.",
"title": ""
},
{
"docid": "af96ec7a1e4299588ed56d7a931f9717",
"text": "That is definitely where my intuition went as well. I know we wouldn't meet certain requirements. I expect to have to jump through hoops to make it happen. I was mostly asking what hoops I will jump through, and if we will have to jump through fewer if we are not planning on handling other people's cash.",
"title": ""
},
{
"docid": "7e6ce529c96e20905f0789621c8fcfea",
"text": "The easiest options appear to be to open an account with one of the large multinational banks like Citi. They have options such as opening two separate checking accounts, one in each currency, and Citi in particular has an international account that appears to make mutli-currency personal banking easier. All of the options have minimum balance requirements or fees for conversion, but if you need quick access this seems to be the best bet. Even if this is a one-time event and you don't need the account, a bank like Citi may be able to help you cash the check and get access to the funds quicker than a national or local bank. http://www.citibank.com/ipb-global/homepage/newsite/content/english/multi_cap_bank_depo.htm Alternatively if you know anyone with a US bank account you can deposit it with them and take the cash withdrawal from their account, assuming they agree, the check isn't too large, etc.",
"title": ""
},
{
"docid": "1577e21bf4ad3391c4631197ed104014",
"text": "I would say when starting with Gnucash to start with the level of granularity you are comfortable with while sticking to the double entry bookkeeping practices. So going through each one: Refund for Parking Pass. Assuming you treat the Parking Pass as a sunk cost, i.e. an Expense account, its just a negative entry in the Expense account which turns into a positive one in your Bank account. Yes it may look weird, and if you don't like it you can always 'pay from Equity' the prior month, or your Bank Account if you're backfilling old statements. Selling physical items. If you sold it on eBay and the value is high enough you'll get tax forms indicating you've earned x. Even if its small or not done via eBay, treat it the same way and create a 'Personal Items/Goods' Income account to track all of it. So the money you get in your Bank account would have come from there. Found jacket money would be an Equity entry, either Opening Balances into Cash or Bank account. Remember you are treating Equity / Opening Balances as the state before you started recording every transaction so both the value going into Assets (Banks,Stock,Mutual Funds) and Liabilities (Mortgage, Student Debt, Credit Card Debt) originate from there.",
"title": ""
},
{
"docid": "bd6eecc9738b213f4a0e3ccc7411900f",
"text": "You have two different operations going on: They each have of a set of rules regarding amounts, timelines, taxes, and penalties. The excess money can't be recharacterized except during a specific window of time. I would see a tax professional to work through all the details.",
"title": ""
},
{
"docid": "259214949481607d982ee738ff17c7a3",
"text": "Yes, those numbers are all that is needed to withdraw funds, or at least set online payment of bills which you don't owe. Donald Knuth also faced this problem, leading him to cease sending checks as payment for finding errors in his writings.",
"title": ""
},
{
"docid": "2e739a62468debe92fb55e23d02905ae",
"text": "I would recommend pre-paid debit cards. Every quarter a fixed amount of money is loaded onto the card (or a new card is issued). This prevents any large-scale fraud from occurring.",
"title": ""
},
{
"docid": "e2762d545460a22c939b7c8db3bd238a",
"text": "\"Uh, have you tried google docs? Start off simple. Other than that, for the moment I use GNUCash. Some day I might try to write my own, but for now it works well enough. I have a number of scheduled transactions in GNUCash, and it records them days in advance. You talk about \"\"I should have how much money\"\", but GNUCash offers a slightly better format: Future Minimum Balance. If you want to know whether you can spend money in an account without triggering a chain reaction, that's the number you want. Being web-based so that it can be accessed from any OS. GNUCash is cross platform, with Windows, OSX and Linux clients. It also supports mysql/postgres database backends, so while it's not \"\"Web based\"\", you can keep your data \"\"in the cloud\"\".\"",
"title": ""
}
] |
fiqa
|
15bfad9368c7d1ec8e127f29ae83ee5b
|
Is sales tax for online purchases based on billing- or shipping address?
|
[
{
"docid": "307e8977f59b97aa4c51184356c89b9a",
"text": "\"From Amazon's Site: \"\"If an item is subject to sales tax in the state to which the order is shipped, tax is generally calculated on the total selling price of each individual item.\"\" I'm going to trust a company of this size has this correct. Shipping address.\"",
"title": ""
},
{
"docid": "acfd957236e4e0b5a3ca51e6a9fd99e6",
"text": "Apparently it's based on either the address of the seller or vendor or your shipping address; from the AccurateTax.com blog post Destination and Origin Based Sales Tax: ... a few states have laws that are origin-based, where products that are shipped to the customer are taxed based on the location of the business itself. As of this writing, these states are Most states use destination-based sales tax, which defines the source of the transaction to be the destination at which the product will eventually be used, or the address to which the product is shipped. ... The following states [and districts] operate on a destination-based model at the time of this writing: The page Do I Charge Sales Tax or Not? from about.com seems to (somewhat) clarify that if the business is located in a state (or other jurisdiction) with an origin-based sales tax, then they will charge you the sales tax for their state and, presumably, not the sales tax for the state of the shipping address.",
"title": ""
},
{
"docid": "f86d87919d214c8e6ea495e3ad086ded",
"text": "The technical answer is defined by the laws of state you live in but most (all?) states with a sales tax have some form of use tax. Where if you buy something in another state for use in your home state you are technically liable for sales tax on it regardless of whether the merchant charged you tax on it or not. I don't think many people actually pay the use taxes, and enforcement generally seems rare.",
"title": ""
},
{
"docid": "7c79df66ccf7780ce45a7cb9cd39be7b",
"text": "From my understanding as a seller, and having read through Amazon's 8 page calculation methodology document, the default is the ship to address, however the seller still has the option to charge the tax or not, only charge the state rate and local (city, county, district, etc.) rate(s), or even set their own self-determined default tax rate. In other words, the seller has a lot of control in determining what rate they use and the billing and shipping addresses may not even matter. Just remember that whatever tax you pay to Amazon, your state will probably still hold you responsible for calculating and reporting any additional use tax, based on your location. And if the seller does overcharge for tax you may have a right to request a refund from them.",
"title": ""
}
] |
[
{
"docid": "796b8729a7d5ef3302592bffe7c41ff0",
"text": "Amazon and other online retailers actually now support bipartisan legislation to level the playing field regarding online sales taxes. Value Added Taxes (not sales taxes in the typical sense) are the way to go, as they are much more difficult to evade and can't be sheltered via the Cayman Islands. They can easily be made progressive through the use of rebates to lower income individuals. There is a reason it is in place in over 130 countries.",
"title": ""
},
{
"docid": "9b2176ddc71dbcdc8502e0944e1b85e6",
"text": "\"Zip code, as well as billing address, is used in conjunction with the Address Verification Service (AVS). AVS is a web (or phone) service that actually verifies the address with the billing address on file with the issuing bank. It does not use the credit card stripe. You can see more information from various sources such as bank merchant help pages like Bank of America's. As far as what is stored on the stripe, it varies some by bank (as there are some \"\"optional\"\" areas). The standards are discussed here. Fields include your account number, name, the expiration date, some card-specific stuff, and then the discretionary section. I would not expect much in terms of address type information there. So - the answer to your question is that they can't really take much more than your name and CC #, unless you give it to them. If you give a false zip code, you may have your purchase rejected. They certainly do keep track of the credit card number, and I would suppose that is the most valuable piece to them; they can see you make purchases across time and know for a fact that it's the same exact person (since it's the same card). Additionally, zip codes for AVS from pay-at-the-pump are supposedly not generally used for marketing (see this article for example). That is probably not true at at-the-register (in-person) collections, most of those aren't for AVS anyway. Even California permits the pay-at-the-pump zip verification as long as it's only used for that (same article). I would assume any information given, though, is collected for marketing purposes.\"",
"title": ""
},
{
"docid": "f76cea190e9d075e752dcfec76b4b1ed",
"text": "It depends on if it is a non-refundable deposit, retainer, etc. The remaining $1,500 is not included in that quarter's sales, because you have not yet received it and it is not guaranteed. The question is really if you should count the $500 toward the quarter where it is received, or during the quarter where you invoice. This deposit might be categorized as a liability until you invoice, and there is no sales tax to be calculated until the invoice for the total. I say 'might' because this can vary by state and the type of transaction or business. For example, if someone makes a cash down payment on a lease for a car, some states will require that sales tax be charged on this.",
"title": ""
},
{
"docid": "d67803ddbaed689189eccfe8f6a604e9",
"text": "It's not just the US based mailing address for registration or US based credit-card or bank account: even if you had all these, like I do, you will find that these online filing companies do not have the infrastructure to handle non-resident taxes. The reason why the popular online filing companies do not handle non-resident taxes is because: Non-residents require a different set of forms to fill out - usually postfixed NR - like the 1040-NR. These forms have different rules and templates that do not follow the usual resident forms. This would require non-trivial programming done by these vendors All the NR forms have detailed instructions and separate set of non-resident guides that has enough information for a smart person to figure out what needs to be done. For example, check out Publication 519 (2011), U.S. Tax Guide for Aliens. As a result, by reading these most non-residents (or their accountants) seem to figure out how the taxes need to be filed. For the remaining others, the numbers perhaps are not significant enough to justify the non-trivial programming that need to be done by these vendors to incorporate the non-resident forms. This was my understanding when I did research into tax filing software. However, if you or anyone else do end up finding tax filing software that does allow non-resident forms, I wil be extremely happy to learn about them. To answer your question: you need to do it yourself or get it done by someone who knows non-resident taxes. Some people on this forum, including me for gratis, would be glad to check your work once you are done with it as long as you relieve us of any liability.",
"title": ""
},
{
"docid": "86376543a6c5ea3be9031394552c401b",
"text": "In many cases yes. In the case of an employer handing employees a credit card to use, that is clearly income if the card is used for something other than a business expense. Generally speaking, if you're receiving something with a significant value without strings attached, it is likely taxable. Google no doubt has an army of tax attorneys, so perhaps they are able to exploit loopholes of some sort.",
"title": ""
},
{
"docid": "cee6066775e02c40e471c8f3f0bef895",
"text": "It looks like businesses selling services (like software downloads) from outside the EU to the UK have to register for VAT if the amount of such sales goes over the UK VAT registration threshold: [If] the value of the taxable supplies you make is over a specified threshold [then] you must register for VAT So it seems plausible that this business does have some requirement to charge VAT on its sales, but clearly it should have done so at the time of sale, not months later. As you say, UK and EU law require that prices are displayed including relevant taxes. Since this business is in the US, they might be able to claim that those rules don't apply to them. But I'm not aware of even US businesses being able to claim sales tax from a US customer months after originally making a sale, and it goes against all reasonable principles of law if they would be able to do it. So the business should really just accept that they screwed up and they'll now have to take the hit and pay the tax themselves. They can work as if the pre-tax price was $12.99/1.2 = $10.825, leaving $2.165 they need to hand over to HMRC. I don't think there's any legal way they can demand money from you now, and certainly for such a low sum of money there's no practical way they could. I can't find anything definitive one way or the other, but I suppose it's possible that HMRC would consider you the importer under these circumstances and so liable for the VAT yourself. But I don't know of any practial way to actually report this to HMRC or pay them the money, and again given the amount there's no realistic chance they'd want to chase you for it. In your shoes I would either ignore the email, or write back and politely tell them that they should have advertised the cost at the time and you're not willing to pay extra now. And you might want to keep an eye on the card you used to pay them to make sure they don't try to just charge it anyway. EDIT: as pointed out in a comment, the company behind this (or at least one with a very similar problem and wording in their emails!) did end up acknowledging that they can't actually do this and that they'll need to pay the tax out of the money they already collected, as I described above. It seems they didn't contact the people they originally emailed to let them know this, though. There's some more discussion here.",
"title": ""
},
{
"docid": "e6bc39b53fb5cdee06c5ef1a03a1b326",
"text": "Assuming you are being charged sales tax, it all depends on where you take possession of the shipment. Are your suppliers shipping to a US address, say your freight forwarder, from where you handle the ongoing shipment, or directly to you in South America? If the latter, per Michael Pryor's answer, you should not be charged sales tax. If the former, if the address is in a state in which your supplier has a physical location they will have to charge sales tax. That said, your freight forwarder should be able to furnish your supplier with a letter stating that the goods have been exported (with a copy of the relevant Bill of Lading) which will allow your supplier to refund you the taxes (a company I was at before would allow refunds up to two years past the date of sale per various tax regulations). Alternatively, you could see if just a letter of intent from your freight forwarder is enough to not charge you in the first place, but that's technically not proof of exportation. You might be able to get a refund or an exception from the state's tax department directly, but I would recommend going through your supplier - much less hassle.",
"title": ""
},
{
"docid": "8a36f5394cf6bbe4093906c74e603f2f",
"text": "Depends on the state, in Texas you should charge sales tax because the shipment is going to a freight forwarder in Texas. That being said, once you have the bill of lading you can have your tax credited by the vendor. It is one of the documents the state will except in lieu of sales tax for exports. There are five. You can find this info at the Comptrollers website. I would validate that you are being charged sales/use tax and not withholding tax, withholding would be related to your country. Doc requirements for export vary from state to state.",
"title": ""
},
{
"docid": "178f9a83ca3b2854e8b1798af08e3cf4",
"text": "\"As long as the IRS treats bitcoin as property, then whenever you use bitcoin to buy anything you are supposed to consider the capital gain or capital loss. There is no \"\"until it's converted to fiat\"\". You are paying local sales tax and capital gains, or paying local sales tax and reporting capital loss. As long as you are consistent, you can use either the total cost basis, or individual lot purchases. The same as other property like stocks (except without stock specific regulations like wash-sale rules :D ). There are a lot of perks or unintentional loopholes for speculators, with the property designation. There are a lot of disadvantages for consumers trying to use it like a currency. Someone mixing investment and spending funds across addresses is going to have complicated tax issues, but fortunately the exchanges have records of purchase times and prices, which you can compare with the addresses you control. Do note, after that IRS guideline, another federal agency designated Bitcoin as a commodity, which is a subset of \"\"property\"\" with its own more favorable but different tax guidelines.\"",
"title": ""
},
{
"docid": "1154baf84454ded433044779cbbcfec8",
"text": "You're charging service fees as a conduit entity for these tickets. While the service fee is not a fixed rate, but a percentage, you would need to record each purchase at dollar amount. To illustrate, it would look like: Now, to your question: How do I report this on my taxes? You would first start out by filing your Schedule C from the eyes of the business (the money you earn at your job, and the money you earn as a business are different). Just keep a general journal with the above entry for each sale and close them down to a simple balance sheet and income statement and you should be fine. Of course, read the instructions for your Schedule C before you begin. As always, good luck.",
"title": ""
},
{
"docid": "e58a8128222084751b0288d74167d85e",
"text": "In general you must charge HST on and after July 1, 2010. However, in the case of delivered sales, you must charge HST if the transfer of goods will happen on or after July 1,2010. Example: A person comes into my hypothetical store on June 29, 2010 and buys a couch. They opt to have it delivered by my truck on July 2, 2010. I should charge HST on this purchase, not GST/PST. References:",
"title": ""
},
{
"docid": "149e6975ec0ef8dc8574c0e317133818",
"text": "\"For anyone that's curious, I had a number of chats with Quickbooks who recommended I import only the relevant business transactions from my personal account & personal credit card in order to lower the tax liability. This way money \"\"paid\"\" from the business account to myself rightly shows up as a transfer and not as income. This means when generating a tax report, it calculates the correct rate of tax to be paid based on income minus allowable expenses, regardless which account they came from.\"",
"title": ""
},
{
"docid": "58f2669e6bcfa652552c7c3a9dee0474",
"text": "Sales taxes are charged at the point of purchase, while a VAT is assessed during the production process of the item. In the end, the amount paid by the consumer is the same, but with the VAT, the tax was collected from the manufacturer, instead of the consumer. One of the big arguments for VAT is that it prevents lost revenue due to things like smuggling (if sales tax increases past 10% smuggling spikes, so the VAT is a good mechanism if you're looking to implement large taxes on goods). It also keeps the tax burden away from shippers and other tiers of the production process that don't change the intrinsic value of the item.",
"title": ""
},
{
"docid": "4478326e08817e1c19391c1f9412df4f",
"text": "I'll address one part of your question: There are other taxes that companies pay as well, such as income tax, but don't charge to the customer as a fee. So, why are gross receipts taxes charged to the customer? Things like income tax can't be passed on to the consumer in a direct way, because there's no fixed relationship between the amount of the tax and the price of an individual product. Income tax is paid on taxable income, which will incorporate deductions for the costs the company incurred to do business. So the final amount of corporate income tax can depend on things unrelated to the price of goods sold, like whether the business decided to repave their parking lot. Gross receipts taxes, by definition, are charged on the total amount of money taken in, so every dollar you spend on an item at the store will be subject to the gross receipts tax, and hence will cost the business 7 cents (or X% where X is the tax rate). This means there is a direct link between the price you pay for an individual item and the tax they pay on that transaction. The same is true for sales taxes, which are also often added at the time of sale. Of course, businesses could roll all of these into the posted price as well. The reason they don't is to get their foot in the door and make the price seem lower: you're more likely to buy something if you see it for the low, low, one-time-only price of $99.99, act now, save big, and then find out you owe an extra $7 at the register than if you saw $107 on the price tag.",
"title": ""
},
{
"docid": "96e19b1eecb7bdc0b59c5bc4571733ce",
"text": "I guess other than tradition and inflation, probably because the merchants want them. In the US, what currently costs $2.00 used to cost $0.10. So 75 years ago, those individual cents made a pretty bid difference. Inflation causes prices to go up, but doesn't get us to just change our currencies patterns. In your example, you are assuming that in an average day, the rounding errors you are willing to accept happen a couple of times. 2 or 3 cents here and there mean nothing to you. However to the merchant, doing hundreds or thousands of transactions per day, those few cents up and down mean quite a bit in terms of profit. To an individual, looking at a time frame more than a single day (because who only participates in economies for a single day) there are potentially millions of transactions in a lifetime, mean potentially giving away millions of dollars because they didn't want to wait. And as for the comment that people working each 3 cents every 10 seconds, I would assume at least some of the time when they are waiting for rounding errors, they are not at work getting paid. That concept is assuming that somebody is always willing to pay them for their time regardless of where that person is in the world; I have no facts and wild assumptions, but surely that can't be true for even a majority of workers. Finally, you should be happy if you happy to have an income high enough that you don't care about individual cents. But there are those business people who see opportunity in folks like you and profit greatly from it. I personally worry very much about who has my money; gov't gets paid to the penny and I expect returns to the penny. A super polite service employee who smiled a lot serving me a beer is getting all the rounding errors I have.",
"title": ""
}
] |
fiqa
|
eaabe6b2f4ac29008c20096fcf9a030c
|
Single employee - paying for health insurance premiums with pre-tax money
|
[
{
"docid": "af3b47ef376d979ba6ba6043644031e9",
"text": "The answer likely depends a bit on which state you are in, but this should be true for most states. I don't know anything about Pennsylvania specifically unfortunately. The Affordable Care Act created the SHOP marketplace, which allows small businesses to effectively form larger groups for group coverage purposes. SHOP stands for Small Business Health Options Program, and requires only one common-law employee on payroll. This would effectively allow you to offer group coverage without having a group. Talk to your tax accountant for more details, as this is still very new and not necessarily well understood. There are some other options, all of which I would highly suggest talking to a tax accountant about as well. HRAs (health reimbursement accounts) allow the employer to set aside pre-tax funds for the employee to use for approved medical expenses; they're often managed by a benefits company (say, Wageworks, Conexis, etc.). That would allow your employee to potentially pick a higher deductible health plan which offers poorer coverage on the individual marketplace (with after-tax dollars) and then supplement with your HRA. There are also the concept of Employer Payment Plans, where the employer reimburses the employee for their insurance premiums, but those are not compatible with the ACA for the most part - although there seems to be a lot of disagreement as to whether it's possible to have something effectively the same work, see for example this page versus this for example.",
"title": ""
},
{
"docid": "ab01833e8f8774001c65b319b671cfb9",
"text": "Pre tax insurance is not possible unless the emplyer provides hsa and do a payroll deduction. Obamacare is all post tax and you can do deduction if your expenses exceeds 10%of your income",
"title": ""
}
] |
[
{
"docid": "a40f4301c1268c1484be0c6ea4f636b5",
"text": "You have to consider that taxes that you pay on the premiums is money definitely paid, while benefits being tax free won't save you a thing if you never receive the benefits.",
"title": ""
},
{
"docid": "e1fe3430b8aac8f8a2d492cd2caaff94",
"text": "Basically a company who provides health insurance for their employees provides it as part of the employee's salary package. This is an expense by the company in its pursuit of making income. In general, tax deductions are available on any expense incurred in deriving income (the exception is when social policy allows deductions for other types of expenses). If you pay for your own health insurance individually, then this expense is not an expense for you to derive your income, and as such is not tax deductible.",
"title": ""
},
{
"docid": "e732da138b264cabdd06ac9aed37229b",
"text": "The answer seems to depend on where you live. Perhaps you already found this, but the summary from the IRS is: The insurance laws in some states do not allow a corporation to purchase group health insurance when the corporation only has one employee. Therefore, if the shareholder was the sole corporate employee, the shareholder had to purchase his health insurance in his own name. The IRS issued Notice 2008-1, which ruled that under certain situations the shareholder would be allowed an above-the-line deduction even if the health insurance policy was purchased in the name of the shareholder. Notice 2008-1 provided four examples, including three examples in which the shareholder purchased the health insurance and one in which the S corporation purchased the health insurance. Notice 2008-1 states that if the shareholder purchased the health insurance in his own name and paid for it with his own funds, the shareholder would not be allowed an above-the-line deduction. On the other hand, if the shareholder purchased the health insurance in his own name but the S corporation either directly paid for the health insurance or reimbursed the shareholder for the health insurance and also included the premium payment in the shareholder’s W-2, the shareholder would be allowed an above-the-line deduction. The bottom line is that in order for a shareholder to claim an above-the-line deduction, the health insurance premiums must ultimately be paid by the S corporation and must be reported as taxable compensation in the shareholder’s W-2. https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/S-Corporation-Compensation-and-Medical-Insurance-Issues I understand this to mean that you can only get the deduction in your case (having purchased it in your own name) if your state does not allow your S-Corp to purchase a group health plan because you only have one employee. (I don't know specifically if Illinois fits that description or not.) In addition, there are rules about reporting health insurance premiums for taxes for S-Corp share members that you should also check. Personally, I think that it's complicated enough that advice from a CPA or other tax advisor specific to your situation would be worth the cost.",
"title": ""
},
{
"docid": "c0a01335fb04c18fb828c360edb30622",
"text": "You can never use a health FSA for individual health insurance premiums. Moreover, FSA plan sponsors can limit what they are will to reimburse. While you can't use a health FSA for premiums, you could previously use a 125 cafeteria plan to pay premiums, but it had to be a separate election from the health FSA. However, under N. 2013-54, even using a cafeteria plan to pay for indivdiual premiums is effectively prohibited.",
"title": ""
},
{
"docid": "cece7085b75d2a0b1af793420237c36a",
"text": "In addition to stoj's two good points I'll add a couple more reasons: 3) In some situations there are secondary factors involved that can make it a good deal. These normally amount to cases where you can buy the insurance with pre-tax dollars but would have to pay the bills with post-tax dollars. 4) Insurance companies know much better what things should cost and often have negotiated rates. A rich person would generally be well-served to have health insurance for this very reason.",
"title": ""
},
{
"docid": "1be25d189c6efb019fd87a53bad1e3a2",
"text": "\"Before filing your first business tax return, you will need to choose a taxation method, either corporation or partnership. If you choose a partnership, then it's moot - your business income flows through to your personal taxes via form K-1. Also, regardless of your taxation method, you should consult a legal expert, since having your business pay off your personal debt would almost always be counted as income to you, and may cause you to lose the personal liability protections provided by the LLC (aka \"\"piercing the corporate veil\"\"). Having a single-member LLC with no employees, you have to be very careful how you manage the finances of the business. Any commingling of personal and business could jeopardize your protections.\"",
"title": ""
},
{
"docid": "23083ab56262b5603c80b430fa069869",
"text": "There are two problems with your understanding: The companies I have worked for match based on a percentage of your salary. That is a percentage of your gross pay. It was not based on the percentage of your net pay or after-tax pay. Net pay would be too hard to know. What I mean is the amount of insurance, HSA, Flex spending accounts, etc. determine how much is taxable and thus what is your after-tax pay . In fact if you split between the Roth and Pre-tax forms of the 401K your retirement contribution would influence the amount of the after tax contribution. All matching funds no matter the nature of the contribution (pre-tax, post-tax, Roth) are always considered pre-tax. You didn't pay taxes on the money when it was credited to your account.",
"title": ""
},
{
"docid": "ab26c2d506d0baed1f40594083ed200a",
"text": "The tax incentives for employer sponsored health insurance were designed to incentivize employers to provide the insurance and for employees to purchase the insurance. Since your situation does not meet the requirements to take advantage of this incentive, you can not. In the near future you should be able to take part in the government sponsored exchanges. This may spur changes in how this works.",
"title": ""
},
{
"docid": "edb005ea7461d6a53124407aca06bab5",
"text": "After reading OP Mark's question and the various answers carefully and also looking over some old pay stubs of mine, I am beginning to wonder if he is mis-reading his pay stub or slip of paper attached to the reimbursement check for the item(s) he purchases. Pay stubs (whether paper documents attached to checks or things received in one's company mailbox or available for downloading from a company web site while the money is deposited electronically into the employee's checking account) vary from company to company, but a reasonably well-designed stub would likely have categories such as Taxable gross income for the pay period: This is the amount from which payroll taxes (Federal and State income tax, Social Security and Medicare tax) are deducted as well as other post-tax deductions such as money going to purchase of US Savings Bonds, contributions to United Way via payroll deduction, contribution to Roth 401k etc. Employer-paid group life insurance premiums are taxable income too for any portion of the policy that exceeds $50K. In some cases, these appear as a lump sum on the last pay stub for the year. Nontaxable gross income for the pay period: This would be sum total of the amounts contributed to nonRoth 401k plans, employee's share of group health-care insurance premiums for employee and/or employee's family, money deposited into FSA accounts, etc. Net pay: This is the amount of the attached check or money sent via ACH to the employee's bank account. Year-to-date amounts: These just tell the employee what has been earned/paid/withheld to date in the various categories. Now, OP Mark said My company does not tax the reimbursement but they do add it to my running gross earnings total for the year. So, the question is whether the amount of the reimbursement is included in the Year-to-date amount of Taxable Income. If YTD Taxable Income does not include the reimbursement amount, then the the OP's question and the answers and comments are moot; unless the company has really-messed-up (Pat. Pending) payroll software that does weird things, the amount on the W2 form will be whatever is shown as YTD Taxable Income on the last pay stub of the year, and, as @DJClayworth noted cogently, it is what will appear on the W2 form that really matters. In summary, it is good that OP Mark is taking the time to investigate the matter of the reimbursements appearing in Total Gross Income, but if the amounts are not appearing in the YTD Taxable Income, his Payroll Office may just reassure him that they have good software and that what the YTD Taxable Income says on the last pay stub is what will be appearing on his W2 form. I am fairly confident that this is what will be the resolution of the matter because if the amount of the reimbursement was included in Taxable Income during that pay period and no tax was withheld, then the employer has a problem with Social Security and Medicare tax underwithholding, and nonpayment of this tax plus the employer's share to the US Treasury in timely fashion. The IRS takes an extremely dim view of such shenanigans and most employers are unlikely to take the risk.",
"title": ""
},
{
"docid": "0f6be042e05c1e3e41ac07a983a02f85",
"text": "You're on the right track, and yes, that small difference is subject to income taxes. Do you use a payroll service? I do the same thing and use my payroll software to tweak the salary until the paycheck is just a few dollars every month (we run payroll once a month), with the rest going to the 401(k) and payroll taxes. So we're rounding up just a bit just so there's an actual paycheck with a positive number, and a bit does get withheld for fed/state income tax. Also keep in mind you can make a company match. If your plan is a solo 401(k) with just you and your wife as the sole employees, consider the 25% match for both of you. The match is not subject to payroll taxes because it is a company expense. IRS web page: http://www.irs.gov/Retirement-Plans/One-Participant-401(k)-Plans",
"title": ""
},
{
"docid": "78d2a8f3d237b9d93ad57f41c8e3a51a",
"text": "The FSA can only pay for expenses incurred after it was open. This also applies in case of a mid-year change in election (such as due to marriage, divorce, child birth, etc.) For example, according to this page: You can only be reimbursed for qualifying expenses, from the election that was in place at the time the expense was incurred. So, say you had $500 available from January to June, then on July 1 had a qualifying event, you then elected $2000. You can be reimbursed for up to $500 in expenses incurred prior to July 1, and then an additional $1500 in expenses incurred after (up to $2000 if you didn't use your full $500). More specifically, from the IRS Publication: Generally, distributions from a health FSA must be paid only to reimburse you for qualified medical expenses you incurred during the period of coverage. -- The HSA question is more complicated. I would talk to a tax accountant, or at minimum your benefits coordinator. Also read the publication I linked above, the first part is about HSAs. The short answer to your specific question: stop contributing to the HSA, unless you were contributing well under the limit of the HSA. If you know your limit, and you know you're under it, you can continue contributing until April 15 of next year: If you fail to be an eligible individual during 2013, you can still make contributions, up until April 15, 2014, for the months you were an eligible individual. The general rule is you can contribute up to (1/12)*(your limit)*(number of months you were eligible). So, if you changed jobs Oct 1, and you're single, then you could contribute (3250)*(1/12)*(9), or just over $2400 in total for the year. If you've contributed less than that to date, you may continue contributing up to that amount - but again, contact your benefits coordinator or preferably a tax accountant, as the rules can be complicated. You definitely cannot deduct any expenses from the account that you incur after you are no longer eligible, and the rules on distributions are pretty complicated - and if you get it wrong, you may owe a 10% penalty on top of the tax you would normally owe, so there is significant incentive not to get it wrong.",
"title": ""
},
{
"docid": "8b8d28b5cc468191072149c2e1c9c59f",
"text": "Here is a quote from the IRS website on this topic: You may be able to deduct premiums paid for medical and dental insurance and qualified long-term care insurance for yourself, your spouse, and your dependents. The insurance can also cover your child who was under age 27 at the end of 2011, even if the child was not your dependent. A child includes your son, daughter, stepchild, adopted child, or foster child. A foster child is any child placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction. One of the following statements must be true. You were self-employed and had a net profit for the year reported on Schedule C (Form 1040), Profit or Loss From Business; Schedule C-EZ (Form 1040), Net Profit From Business; or Schedule F (Form 1040), Profit or Loss From Farming. You were a partner with net earnings from self-employment for the year reported on Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc., box 14, code A. You used one of the optional methods to figure your net earnings from self-employment on Schedule SE. You received wages in 2011 from an S corporation in which you were a more-than-2% shareholder. Health insurance premiums paid or reimbursed by the S corporation are shown as wages on Form W-2, Wage and Tax Statement. The insurance plan must be established, or considered to be established as discussed in the following bullets, under your business. For self-employed individuals filing a Schedule C, C-EZ, or F, a policy can be either in the name of the business or in the name of the individual. For partners, a policy can be either in the name of the partnership or in the name of the partner. You can either pay the premiums yourself or your partnership can pay them and report the premium amounts on Schedule K-1 (Form 1065) as guaranteed payments to be included in your gross income. However, if the policy is in your name and you pay the premiums yourself, the partnership must reimburse you and report the premium amounts on Schedule K-1 (Form 1065) as guaranteed payments to be included in your gross income. Otherwise, the insurance plan will not be considered to be established under your business. For more-than-2% shareholders, a policy can be either in the name of the S corporation or in the name of the shareholder. You can either pay the premiums yourself or your S corporation can pay them and report the premium amounts on Form W-2 as wages to be included in your gross income. However, if the policy is in your name and you pay the premiums yourself, the S corporation must reimburse you and report the premium amounts on Form W-2 as wages to be included in your gross income. Otherwise, the insurance plan will not be considered to be established under your business. Medicare premiums you voluntarily pay to obtain insurance in your name that is similar to qualifying private health insurance can be used to figure the deduction. If you previously filed returns without using Medicare premiums to figure the deduction, you can file timely amended returns to refigure the deduction. For more information, see Form 1040X, Amended U.S. Individual Income Tax Return. Amounts paid for health insurance coverage from retirement plan distributions that were nontaxable because you are a retired public safety officer cannot be used to figure the deduction. Take the deduction on Form 1040, line 29.",
"title": ""
},
{
"docid": "2761bba807fcf65749ca117a9679cef5",
"text": "\"Yes, it's normal. If you \"\"buy\"\" your own disability insurance with after tax money, any payout you get is non taxable. If your employer \"\"buys\"\" your disability insurance with their own money, any payout you get is taxable. Since the payout is not 100% of your pre-disability income, most folks strongly prefer that the payout be non taxable. To achieve this, I pay the premiums on behalf of my employees (including myself) and then add that premium to their salary as a taxable benefit. In effect I paid it to them, then took it from them and used it to buy the insurance. (It has no impact on my corporate taxes since I can either deduct premiums or salaries, same either way.) This ensures they won't pay tax if they should collect. And I have had people collect, and it was non-taxable to them.\"",
"title": ""
},
{
"docid": "7c75afe41560d1bb689524e59797d963",
"text": "\"Allowances are calculated as your total deductions divided by the tax year's personal exemptions. As mentioned above it is a multiplier. For 2015 the standard deduction for a married couple filing jointly is $12,600 and each of you gets 1 personal exemption ($4,000 in 2015). That's a total of $12,600 + 2*($4,000) or $20,600. Divide this by the personal exemption and you get roughly 5 allowances. Now say your employer offers health insurance and a 401(k) plan. Your total health insurance (or \"\"cafeteria\"\" contributions) are $2,000 for the year, and your total 401(k) plan contributions are $6,000 for the year. This would give an additional $2,000 + $6,000 = $8,000 divided by $4,000 = 2 allowances. Thus you would file with 7 allowances. Note that tax credits are not included in the allowance calculation. That is because they do not affect your taxable income but rather directly reduce your taxes due.\"",
"title": ""
},
{
"docid": "1f0b77539fde6780785caa9c608426fb",
"text": "The benefits and taxes thing, in my opinion is the biggie. Most people don't realize that the cost to the company for a full-time employee with benefits can be 2x or even 3x the amount they see in their paycheck. Health plans are extremely expensive. Even if you are having money taken from your check for health insurance, it is often just a fraction of the total cost, and the employer is subsidizing the rest. More expensive benefits that contractors don't typically get are 401K matches and paid vacation days. When contractors call in sick or don't work because it is a national holiday, they don't get paid for that day. Also, see that line on your paycheck deducting for Social security and Medicare? That is only half of the tax. The employer pays an equal amount that is not shown on that statement. Also, they pay taxes that go towards unemployment benefits , and may be required to pay higher taxes if they churn through a lot of full-time employees. You can usually let contractors go with relative impunity . For the unemployment tax reasons, not paying for people's days off or benefits, a lot less paperwork, and less risk to the business associated with committing to full-time employees all provide value to the company. Thus companies are willing to pay more because they are getting more. Think of it like a cell phone-contract. If you commit to a three year contract it can be a pain/expensive to get out of the deal early, but you will probably get a better rate in exchange for the risk being shifted to your end of the deal.",
"title": ""
}
] |
fiqa
|
d5c4a387bc9abb316a50caac45e06578
|
Everyone got a raise to them same amount, lost my higher pay than the newer employees
|
[
{
"docid": "2c1db64900a52c3955c2764c082d6f9f",
"text": "\"Why do you think you are entitled to \"\"fairness\"\"? In this world you get what you get. I am pretty sure your employer is not paying you for how you \"\"feel\"\" either. And by-the-way turning up on time and not leaving early is not exceptional behaviour; it is expected behaviour. Bottom line: do you add more value to your employer's business then the new hires? If so, ask for a raise, if not find a way to add more value and then ask for a raise or keep doing what you're doing and accept what you get.\"",
"title": ""
},
{
"docid": "fd55eafab83e4c8afa36a967e9070fd5",
"text": "This is one effect of rising minimum wages: compression of lower pay tiers. The new employees might have been offered a lower starting rate than the result of your raise, but your employer did not have that option as a matter of law.",
"title": ""
},
{
"docid": "31496e1c14efe5aa8e9b57f8e3bdc216",
"text": "The same thing happened to me when I worked retail during my college years. I agree that it is unfair however, it is what it is. With that being said, there may be several factors that you should consider: the new employees might have more experience or qualifications then you, your work performance based on your manager's perspective, and like in my situation when I worked retail, I started out as a cashier which get paid less than sales associates but when I moved to a sales associate position I still got paid less and when I got my raise I got the same pay a new sales associate would get. I suggest you suck it up and ride it through until you get a real job because in retail, in my opinion, you are expendable, if you don't like their pay they will find someone else.",
"title": ""
},
{
"docid": "aff8e17440380d920b44d463b54b40a0",
"text": "This question is largely opinion based but I wanted to balance out the people jumping on you. There are lots of factors that go into salary/pay, such as what you contribute to the company and whather you go above or beyond whats expected of you. I would say seniority is one factor, or at least there is a case to be made that it is important. If someone has worked 5 years for me, that is five years that I have not had to search, interview, and train a replacement. I am not a business owner but I do employ people and when someone quits its an extremely stressful process. Not having to go through that, again in my opinion, is worth a small bump in pay. I cant comment on if its fair or not. That is opinion. What is fact is that whenever a broad group of people are given a pay raise for arbitrary reasons and other employees arent, its creates discontent, it hurts morale, employees leave, and in severe cases the business becomes crippled. So Im not sure if its fair, but is it a bad idea? Generally. See here and I highly recommend going here for anyone who thinks dramatically raising pay 'because its the right thing to do' is a good idea",
"title": ""
},
{
"docid": "0aa72b91c66ff91b5239a0b79f97e831",
"text": "\"You didn't get laid off or have your hours cut back when the minimum wage was raised? I guess you have much to be grateful for, including a higher hourly rate. An excellent record is its own reward. When you finish your degree you will be grateful for the good habits you have established. You won't ever lose a nights sleep looking back and thinking \"\"I wish I didn't do the right thing.\"\" It's sad that there isn't a more immediate reward for doing more than average, but that's life, doing the right thing over a long period of time does eventually lead to the reward you're looking for. Sometimes those rewards aren't tangible.\"",
"title": ""
}
] |
[
{
"docid": "3d9e47dfe276467632aef41fcc905740",
"text": "I'm okay if the union sticks up for those only in the Union. If I get a pay raise because of my union affiliation, you don't deserve the same benefits. For what it's worth, in many other countries they've always sided with the Union. To me this is a a direct attack on the middle class. If it hasn't already eroded enough it's only going to get worse.",
"title": ""
},
{
"docid": "9a7887111d180b192e1dc766ff08c4c0",
"text": "\"The only thing worse than finding out you are paid less than a co-worker is finding out that you are paid more than all of your co-workers. A lot of people who *think* they would prefer an open and transparent pay-scale (as in unions), change their minds, when placed in one. I have worked in and implemented both types, as both an employee and as an owner/manager. There are pluses and minuses to both. - \"\"Transparent\"\" pay-scale is most effective in a high-turnover, aggressively performance-metric-oriented environment where you expect people to be competing for jobs, including their own job, every day. For example, a pool of commissioned sales-agents: the more you sell, the more you make. Winner gets a Cadillac. Runner-up gets a set of steak knives. Loser gets fired, that kind of thing. If you can't meet your numbers, we let other people start poaching your territory/clients and see what they can do. - Where it doesn't work is in a salary-type position where people are expected to have multiple \"\"soft\"\" duties outside of core performance metrics. The reasons are multi-fold: - One immediate effect of implementing performance-based pay for salary-type employees is that people who are in the office for 8 hours a day, five days a week, immediate start devoting their time and energy towards getting another notch up on the pay-scale, even at the expense of their co-workers, or the company. It intrinsically incentivizes \"\"gaming the system\"\", finding ways to attach your name to easy metrics, and to remove yourself from the most difficult problems. The people who are best at hitting metrics are often not even close to the MVPs. - If instead you take a \"\"soft metrics\"\" or subjective/holistic approach to evaluation, then you get a culture of brown-nosing and office-politics. People start sabotaging the \"\"boss's favorite\"\" and pursuing approval and credit, rather than performance. Instead of fostering a team-oriented, problem-solving approach, it fosters a counter-productive buck-passing, credit-grabbing, and blame-avoidance approach. Note that both of the above intrinsically incentivize risk-avoidance. If you get paid for the number of projects that have your name on them, you find some way to get your name attached to every project, and then move on to the next one, whether the last one was done or not. If you get based on how \"\"successful\"\" the projects bearing your name are, then you avoid anything challenging and make sure only to be attached to the easy ones with the best co-workers. And so on. - Alternately, let's say we keep the same, generic, salary-oriented pay-structure, we just make everyone in a certain \"\"tier\"\" get equal salary, that everyone knows. That sucks all the life out of everyone's sails so fast it will make your head spin: you cannot get a raise for doing a better job, you get paid the same raise as your worst co-worker, every year, for as long as you work here. We will never cut your pay, all you have to do is not be the canary in the coalmine-- so long as you can identify the worst performer in your group, and so long as it's not you, your job is safe. What time do you have to arrive? 5 minutes earlier than the latest-arriving person. How early can you leave? 5 minutes after the earliest one to check out. How much work do you have to get done? Only as much as anyone else is doing. What will you get for being the hardest-working, earliest-to-arrive, latest-to-leave? The same as the worst performer gets: you'll be splitting your raise with him, since we don't credit individuals here, just job-titles. Most jobs that can be easily automated, are automated. If you need a human employee to do it, it's usually because it involves a nontrivial amount of \"\"soft\"\" skills and fuzzy-logic type thinking and behavior. A machine programmed purely to make as many widgets per hour as possible, and motivated to so with human-style skills, ingenuity, and incentives, will tear down the whole factory and dismantle all its co-workers and ignore all quality-controls in order to keep producing widgets. You can't reduce human beings to input-process-output flowcharts (or rather you can, but they will invariably find unintended ways to outsmart your design criteria, with unintended consequences). The reason you need a person instead of an automated process is because you need a whole host hard-to-define, soft/fuzzy/flexible critical-thinking type skills. **Everyone's job seems easier to the people who don't have to do it, and there is a tremendous hidden danger to de-valuing personal desire to do a subjectively \"\"good job\"\" by quantifying/genericizing the value of their contribution.** Personnel management is very difficult to reduce to an engineering problem. You usually need good managers who can identify and motivate good employees, who will feel lucky to have the job and the salary they have, and who will come in every day trying to earn it. Posting everyone's pay on a bulletin-board negates all those \"\"soft\"\" skills, by putting a quantified, black-and-white, relative value on everyone's contribution. Even in a very large organization, the \"\"marketplace\"\" of employees is rarely large enough, and the quality of real-time metrics is almost never good enough to \"\"digitize\"\" the bell-curve of employee performance. You end up making it a square-wave that demotivates all but the most extreme outliers.\"",
"title": ""
},
{
"docid": "2affc10785332c9954c413bcfa677e8f",
"text": "\"To add to MrChrister's answer: Canada also has a Consumer Price Index (CPI) used to measure inflation that is distinct and separate from that maintained by the United States. There are differences in inflation between the U.S. and Canada because our currencies are different, and there may be different items in the \"\"basket\"\" of goods that constitutes the index. You can find current information on the Canadian CPI at Statistics Canada, here: Latest release from the Consumer Price Index. Also, the Bank of Canada – our central bank – maintains a free online Inflation Calculator. The BoC's inflation calculator is handy because you can enter a dollar amount for a past date and it will figure out what that would be in today's dollars. For instance, $100 in 1970 dollars had the same purchasing power (under the CPI) as $561.76 in 2009 dollars! And you're right – if you get a salary increase that is less than the rate of inflation, then in theory you have lost purchasing power. So, anybody really looking for a raise ought to make an effort to get more than the increase in CPI. Of course, some employers are counting on you not knowing that, because any increase that's less than CPI is effectively a salary decrease; which could mean more profit for them, if they are able to increase their prices / revenues at inflation or better. Finally, consider that salary & wage increases also contribute to inflation! Perhaps you've heard of the wage/price inflation spiral. If you haven't, there's more on that here and here.\"",
"title": ""
},
{
"docid": "9452c0d753736f741583048c7893c6fd",
"text": "Keep in mind that unless you have a contract that says you get a certain amount of raise every year, the employer is not required to give you any raise. The quality of a raise is too subjective for anyone to tell you how to judge it. You either get a raise you can live with, it makes you content/happy, and you continue working there, or you get a raise that does not satisfy you, and you jump ship to get more money. Some (most?) employers know that raises can be the tipping point for employees deciding to leave. If you consistently receive raises greater than inflation rate, the message is that the employer values you. If the opposite, they value you enough to continue your employment, but are willing to replace you if you decide to leave. Key thing here is there are three ways of getting increased pay with your current employer. Cost of living or annual raise is the one that we are discussing. Merit based raises are a second way. If you think you deserve a raise, due to loyal consistent contribution, or contributing above your duty, or for whatever reason, then ask for a raise. The third way is to be promoted or transferred to a higher paying position. Often times, you should also make your case to your supervisor why you should have the new position, similar to asking for a merit raise.",
"title": ""
},
{
"docid": "4d031a7f86ad55631c6d625512021e17",
"text": "It would make sense to refuse a raise when it pushes your effective marginal 'tax' (including reduced benefits) above 100%. The working poor (family of 4, 20K-40K in the US) often face marginal rates above 100% when you consider the phase out of various government benefits (EITC, insurance, housing,etc.) You can see the research here and here.",
"title": ""
},
{
"docid": "0c8901a7fde21e478a733ba05babf551",
"text": "\"So you are saying the game is rigged. You said that the average raise has to be 4% and that is pre-decided. So that means the game is rigged. Also you discussed good and bad managers. Well over 90% of managers I have had were horrible. The good ones were great but they were few and far between. Also you mentioned about how money is not everything. The reason money is not everything is because the employees know they are not gonna get any more money. So that is why they settle for \"\"casual friday\"\" and other bullshit perks.\"",
"title": ""
},
{
"docid": "f45d60687a920869bffe60def6a09e7d",
"text": "The prices would only rise proportionally if labor was the only cost at play and everyone made minimum wage. If you look at major expenses such as rent, gas, utilities and food there is literally no reason to conclude their prices would change proportionally to minimum wage.",
"title": ""
},
{
"docid": "7117f06ab3c85be892ecb72ac468a340",
"text": "I work as a state employee and I can look at my coworkers' salaries and their title online. At first my coworkers were shocked that I would do such a thing, but they quickly realized it was of benefit to them when I told them that from my analysis, no one at my department ever gets raises. Prior to this, they were led to believe that there actually were opportunities for advancement here. Knowing typical salaries can also help when looking at going into a new industry in which you are unfamiliar, otherwise, you have no idea if a job offer you get is in line with others' compensation. So yes, I believe that knowing others' salaries can be helpful to the average employee and keeping it secret is par for the course because it's detrimental to the company.",
"title": ""
},
{
"docid": "d6d82a258299f90b61d43321099e9e57",
"text": "\"Problem is, my CEO told me I would \"\"get a raise every 12 days\"\" \"\"dollar here, dollar there\"\". It's been 5 months of excellent work on my part, no bonus, no raise, nothing. I mean, I'm upset, but I wish I at least got recognized for my work. If it weren't for me doing something that got the attention of his wife (who also works here), he wouldn't even recognize me.\"",
"title": ""
},
{
"docid": "dea1a2c3d9dde75823e01547e7a286d1",
"text": "\"TLDR: You will probably need to move to a different employer to get the raise you want/need/deserve. Some employers, in the US, punish longevity through a number of practices. My wife worked as a nurse for about 20 years. During that time she had many employers, leveraging raises with job changes. She quit nursing about 6 years ago and was being paid $38/hour at the time. She had a friend that worked in the same system for 18 years. They had the same position in the same hospital that friend's current rate of pay: $26/hour. You probably don't want to be that person. Given your Stack Overflow participation, I would assume you are some type of web developer. I would recommend updating your resume, and moving for a 20% increase or more. You'll get it as it is a great time to be a web developer. Spending on IT tends to go in cycles, and right now budgets are very healthy for hiring new talent. While your current company might not have enough money in the budget to give you a raise, they would not hesitate hiring someone with your skills at 95K if they had an opening. Its common, but frustrating to all that are involved except the bean counters that looks at people like us as commodities. Think about this: both sides of the table agree that you deserve a 5K raise. But lets say next year only 3k is in the budget. So you are out the 5k you should have been given this year, plus the 2k that you won't get, plus whatever raise was fair for you next year. That is a lot of money! Time to go! Don't bother on holding onto any illusions of a counter offer by your current employer. There will be too much resentment. Shake the dust off your feet and move on. Edit: Some naysayers will cite short work histories as problems for future employment. It could happen in a small number of shops, but short work histories are common in technology that recruiters rarely bat an eye. If they do, as with any objection, it is up to you to sell yourself. In Cracking the Code Interview the author cites that no one is really expecting you to stay beyond 5 years. Something like this would work just fine: \"\"I left Acme because there were indications of poor financial health. Given the hot market at the time I was able to find a new position without the worry of pending layoffs.\"\" If you are a contractor six month assignments are the norm. Also many technology resumes have overlapping assignments. Its what happens when someone is in demand.\"",
"title": ""
},
{
"docid": "5876fe659421be016297957a9782b95a",
"text": "So how do we get the money from the people that did not earn it, to the people that did earn it without the government redistributing it? I think you may be thinking that I am saying everyone should always be equal when I am saying that we need to have a more proportional income distribution which, if done correctly, would make things way more equal than they are now.",
"title": ""
},
{
"docid": "c0331cbe108667ea6af23e241063914c",
"text": "...and why is that? Almost every job out there has competition. It may take some time, but if you are really unhappy with your salary or work situation, you can find a job somewhere else. I'm in the IT industry and that's pretty much the only way I've been able to get a raise higher than 1%.",
"title": ""
},
{
"docid": "215dc7dad7674e2dfac95e80a8d3df64",
"text": "\"Many in management seem to live in an alternate reality from those who work for a living. When IBM shunted some techs into another company they put them on probation for a year (even though they were high performers - some with 25+ years at IBM = no job security) and cut their pay 25%. The next time they went to move workers the first question was \"\"how much is the pay cut this time\"\". Management's reply, \"\"No pay cut because we found when we did it before it negatively affected morale.\"\" I thought: \"\"No kidding. They had to actually cut people's pay 25% to figure that out? What planet DO they live on?\"\"\"",
"title": ""
},
{
"docid": "c4f182954cbea0e8f5df43839a121238",
"text": "I'm trying to get the numbers to work. I built a quick spreadsheet that allocated the lost time as stated against the overall pay increase, assuming 1.5x for more than 40 hours. I can't find a reasonable number of hours worked where a 9% cut in hours outweighs the near 20% increase in wages.",
"title": ""
},
{
"docid": "a02d314be40e2de7566d5585bb79ddf7",
"text": "\"And that is my point: without specific dollar amounts...this is USELESS information. The problem with this crap information is that some crappy operation will find a reason to pay themselves more for being a \"\"good boss\"\" thinking that will make up for any raises. I'd take a better boss over a 5-cent an hour raise (and yes, I worked at McDonalds when raises were 0-5-10 cents an hour...and yeah, I would have liked a better boss for 5 cents). However, for an annual job that pays $500/hr I'll gladly work in horrid conditions with a horrible boss doing awful things.\"",
"title": ""
}
] |
fiqa
|
ebe9adcc2c1d240b49be4a58d01ce743
|
FHA Reduction Notices From Third-Party Companies - Scam? Or Something To Consider?
|
[
{
"docid": "c3e502167f39903db739c29ad60d3782",
"text": "\"This is obviously a spam mail. Your mortgage is a public record, and mortgage brokers and insurance agents were, are and will be soliciting your business, as long as they feel they have a chance of getting it. Nothing that that particular company offers is unique to them, nothing they can offer you cannot be done by anyone else. It is my personal belief that we should not do business with spammers, and that is why I suggest you to remember the company name and never deal with them. However, it is up to you if you want to follow that advice or not. What they're offering is called refinance. Any bank, credit union or mortgage broker does that. The rates are more or less the same everywhere, but the closing fees and application fees is where the small brokers are making their money. Big banks get their money from also servicing the loans, so they're more flexible on fees. All of them can do \"\"streamline\"\" refinance if your mortgage is eligible. None if it isn't. Note that the ones who service your current mortgage might not be the ones who own it, thus \"\"renegotiating the rate\"\" is most likely not an option (FHA backed loans are sold to Fannie and Freddie, the original lenders continue servicing them - but don't own them). Refinancing - is a more likely option, and in this case the lender will not care about your rate on the old mortgage.\"",
"title": ""
}
] |
[
{
"docid": "13579414bd19097f500ef210e2dfd057",
"text": "\"(Disclosure - PeerStreet was at FinCon, a financial blogger conference I attended last month. I had the chance to briefly meet a couple people from this company. Also, I recognize a number of the names of their financial backers. This doesn't guarantee anything, of course, except the people behind the scenes are no slackers.) The same way Prosper and Lending Club have created a market for personal loans, this is a company that offers real estate loans. The \"\"too good to be true\"\" aspect is what I'll try to address. I've disclosed in other answers that I have my Real Estate license. Earlier this year, I sold a house that was financed with a \"\"Hard Money\"\" loan. Not a bank, but a group of investors. They charged the buyer 10%. Let me state - I represented the seller, and when I found out the terms of the loan, it would have been a breach of my own moral and legal responsibility to her to do anything to kill the deal. I felt sick for days after that sale. There are many people with little credit history who are hard workers and have saved their 20% down. For PeerStreet, 25%. The same way there's a business, local to my area, that offered a 10% loan, PeerStreet is doing something similar but in a 'crowd sourced' way. It seems to me that since they show the duration as only 6-24 months, the buyer typically manages to refinance during that time. I'm guessing that these may be people who are selling their house, but have bad timing, i.e. they need to first close on the sale to qualify to buy the new home. Or simply need the time to get their regular loan approved. (As a final side note - I recalled the 10% story in a social setting, and more than one person responded they'd have been happy to invest their money at 6%. I could have saved the buyer 4% and gotten someone else nearly 6% more than they get on their cash.)\"",
"title": ""
},
{
"docid": "fb54fe287186b2675d77deae5d1dfc68",
"text": "We have realized from our experience that rent to own is a scam. They want your money either way. We are at the buying part, and finding it difficult to find a lender to give us full money the seller is asking us for the the house. The house we have isn't valued at the same it was two years ago and now we are going to lose the house because we don't have the other $40 thousand they lied about at purchase price. We will not do this again but coming from bankruptcies in the past is hard as well.",
"title": ""
},
{
"docid": "984f17a6bd9f1341c90588361c3d7908",
"text": "\"The only thing I'd be concerned about is whether or not the credit report site offers a loan consolidation option right next to the statement that \"\"too many installment loans are lowering your score.\"\" If it is, then the site stands to get a kickback for referring you, and you might question whether or not the advice is correct. But if not, then take that statement at face value and look to consolidate. Just run the numbers to see what it will cost (or save) you.\"",
"title": ""
},
{
"docid": "b20dde4b533b9447acdebeffe1611f43",
"text": "According to the article this is not actually a fine, they are just buying back the mortgages they sold in the first place. One has to wonder if they are buying them back at the same price that they sold them or if it's a discount. E.g. They sold you a lemon for $1000, offer to buy it back for $10? Other questions: If they are buying them back then are they now going to start foreclosing like criminals like BoA did?",
"title": ""
},
{
"docid": "87cae50c530734fd55cebc1b1f8ea58e",
"text": "\"I had the same thing happen to my house. I bought it in 2011 for 137,000, which was the same as the FHA appraised value (because FHA won't guarantee a loan for more than their appraiser thinks its worth). January of last year, I get the letter from the tax office and see that my house has been assessed at only 122,000. I was shocked too, until I read a similar document that Phil told you to read. The short of it is, no matter what the tax assessor calls their calculation, it is an assessment. It was mass-produced along with everyone else's in your neighborhood by looking at its specs on paper (acreage, house square footage, age, beds/baths) and by driving by your home to see its general condition. The fact that your lawn may be less well-kept than the last time they drove by could have affected the decision a little. It's very unlikely to have been a major determinant of the assessment. The assessment value affects taxes, and taxes only. It is, in most states, a matter of public record, and so it could be used by a potential buyer to negotiate a lower price. However, everyone in the housing business knows that the assessed value is not the market value, and the buyer's agent will be encouraging their client to make a more realistic bid. This \"\"assessed value\"\" is not an \"\"appraisal value\"\". An appraisal is done by someone actually walking into and through your home, inspecting the general condition inside and out, to try to make a fair evaluation of what the home is actually worth. That number is almost always going to be more than the assessment value, because it takes into account all the amenities of the home; the current fixtures, the well-kept (or recently-replaced) flooring, the energy-efficient HVAC and hot water system, etc etc. It also takes into account recent comparables; what have other houses, with the same general statistics, the same amenities, relatively close in location, sold for recently? That will still generally be different from the true market value of the home. That value is nothing more or less than what a potential buyer will pay to have it at the time you decide to sell it, and that in turn depends 100% on your potential buyers' myriad situations. Someone may lowball even the assessed value because they're looking for a deal and hoping you're desperate; you just reject the offer. Someone may be looking at comparables indicating the house is maybe overpriced by $10k. You can counter and try to come to an agreement. Or, your potential buyer could work five minutes from your house, and be willing to pay at or above your asking price because the next best possibility is another 10 miles away. Since you aren't looking to sell the home, none of this matters, except to determine any escrow payments you might be making towards property taxes. Just keep making your mortgage payment, and don't worry about it. If you really wanted to, you could petition the state for a second opinion, but you think the value should be higher; if they agree with you, they'll raise the assessed value and you'll pay more in taxes. Why in the world would you want to do that?\"",
"title": ""
},
{
"docid": "f9ede1700bd66abcd5dd7e10cd126277",
"text": "This sounds like a scam. C.f. Craigslist for normal warning signs of an on-line scam",
"title": ""
},
{
"docid": "4343d69b98c82e18a62d67a5bf7d42d0",
"text": "This shows the impact of the inquiries. It's from Credit Karma, and reflects my inquiries over the past two years. In my case, I refinanced 2 properties and the hit is after this fact, so my score at 766 is lower than when approved. You can go to Credit Karma and see how your score was impacted. If in fact the first inquiry did this, you have cause for action. In court, you get more attention by having sufficient specific data to support your claim, including your exact damages.",
"title": ""
},
{
"docid": "a1b16d5a911ace0143f31e7b027b8af5",
"text": "I believe that! Their system is meant to cause defaults. They are so disorganized and unhelpful. On three separate files for the same client, I dealt with lost documents and forced start over on the processes of approvals because they said documents weren't received in time, even though we had confirmations. I think if Congress could sit through a customer service call or process for some person trying to do a loan modification or get short sale approval, they would instantly call a senate investigation into their practices. I don't know how they can not be aware of the outright fuckery that goes on with their company.",
"title": ""
},
{
"docid": "add38ca7424072cd6aa0226650874a23",
"text": "\"I had about $16k in student loans. I defaulted on the loans, and they got > passed to a collection type agency (OSCEOLA). These guys are as legitimate as a collection agency can be. One thing that I feel is very sketchy is when they were verifying my identity they said \"\"Does your Social Security Number end in ####. Is your Birthday Month/Day/Year.\"\" That is not sketchy. It would be sketchy for a caller to ask you to give that information; that's a common scheme for identity theft. OSCEOLA are following the rules on this one. My mom suggested I should consider applying for bankruptcy Won't help. Student loans can't be discharged in bankruptcy. You have the bankruptcy \"\"reform\"\" act passed during the Bush 43 regime for that. The loan itself is from school. What school? Contact them and ask for help. They may have washed their hands of your case when they turned over your file to OSCEOLA. Then again, they may not. It's worth finding out. Also, name and shame the school. Future applicants should be warned that they will do this. What can I do to aid in my negotiations with this company? Don't negotiate on the phone. You've discovered that they won't honor such negotiations. Ask for written communications sent by postal mail. Keep copies of everything, including both sides of the canceled checks you use to make payments (during the six months and in the future). Keep making the payments you agreed to in the conversation six months ago. Do not, EVER, ignore a letter from them. Do not, EVER, skip going to court if they send you a summons to appear. They count on people doing this. They can get a default judgement if you don't show up. Then you're well and truly screwed. What do you want? You want the $4K fee removed. If you want something else, figure out what it is. Here's what to do: Write them a polite letter explaining what you said here. Recount the conversation you had with their telephone agent where they said they would remove the $4K fee if you made payments. Recount the later conversation. If possible give the dates of both conversations and the names of the both agents. Explain the situation completely. Don't assume the recipient of your letter knows anything about your case. Include evidence that you made payments as agreed during the six months. If you were late or something, don't withhold that. Ask them to remove the extra $4K from your account, and ask for whatever else you want. Send the letter to them with a return receipt requested, or even registered mail. That will prevent them from claiming they didn't get it. And it will show them you're serious. Write a cover letter admitting your default, saying you relied on their negotiation to set things straight, and saying you're dismayed they aren't sticking to their word. The cover letter should ask for help sorting this out. Send copies of the letter with the cover letter to: Be sure to mark your letter to OSCEOLA \"\"cc\"\" all these folks, so they know you are asking for help. It can't hurt to call your congressional representative's office and ask to whom you should send the letter, and then address it by name. This is called Constituent Service, and they take pride in it. If you send this letter with copies you're letting them know you intend to fight. The collection agency may decide it's not worth the fight to get the $4K and decide to let it go. Again, if they call to pressure you, say you'd rather communicate in writing, and that they are not to call you by telephone. Then hang up. Should I hire a lawyer? Yes, but only if you get a court summons or if you don't get anywhere with this. You can give the lawyer all this paperwork I've suggested here, and it will help her come up to speed on your case. This is the kind of stuff the lawyer would do for you at well over $100 per hour. Is bankruptcy really an option Certainly not, unfortunately. Never forget that student lenders and their collection agencies are dangerous and clever predators. You are their lawful prey. They look at you, lick their chops, and think, \"\"food.\"\" Watch John Oliver's takedown of that industry. https://www.youtube.com/watch?v=hxUAntt1z2c Good luck and stay safe.\"",
"title": ""
},
{
"docid": "9f2385b68c3df28daacbcb5ea96858ed",
"text": "Looks like this settlement is broken down in cash and assistance to homeowners. This usually means BOA can count delinquent mtg debt on homes that are underwater as part of the settlement. Debt they normally would have written off anyway. Nice thought that they are going after an individual of the firm",
"title": ""
},
{
"docid": "34c5f1636a3b6c6076a21beed4b8e0e6",
"text": "You missed the catch, there is always a catch, and in this case it is not well publicized. First, some background. Congress (both parties) in 98 passed Graham-Leach-Bliley. It allowed commercial banks to invest, securitize, and insure securities. It also had privacy provisions, which prevented a securitizer of a mortgage from providing ANY personal information about the mortgage. That means that as Chase wrote these mortgage backed securities, they were forbidden, BY LAW, from telling the potential purchasers the addresses of the houses or SS#'s of the purchasers. OF COURSE Chase did not choose to insure these MBS's themselves. Instead, they chose a third party like AIG because AIG could not know personal information about the mortgages, and was thus blinded to risk. AIG chose a middle of the road risk rating (something like 2% risk of default). Chase FRAUDULENTLY represented the quality of the mortgages to the people writing the credit default swaps to insure them, and to the potential buyers. Chase KNEW the mortgages were crap. Fraud is fraud and is illegal in security sales even after Graham-Leach-Bliley. However, to be clear, in this case there does not need to be any faking of paperwork. The loans can be passed along BLINDLY with insurance, as they were. If it could be documented that Chase misrepresented the quality of these AAA MBS's, they would be on the hook. But the catch is that Graham-Leach-Bliley offered them a cop-out. AIG were the real dummies in all this. Who writes insurance without having a good idea of the risk....",
"title": ""
},
{
"docid": "69cf9c7daa08918e2890331a8d1b7f07",
"text": "Adding to what others have said, if the mortgage for the new house is backed by the federal government (e.g., through FHA or is to be sold to Fannie Mae/Freddie Mac) you would be violating 18 USC § 1001, which makes making intentionally false statements to any agent or branch of the federal government a crime punishable by up to 5 years' imprisonment. The gift letter you are required to sign will warn you of as much. Don't do it, it's not worth the risk of prison time.",
"title": ""
},
{
"docid": "b941bee9339eba902aae32a50f75393e",
"text": "Omg, the answer is easy. Tell the TRUTH, and nothing is fraud. Down payment gifts are SOP's, and every lender works with that. EACH lender has their own rules. Fannie May and Freddie Mac could care less, and FHA and VA backed loans allow for full gifting unless the buyer's credit is below the standard 620, then 3.5% must come from the buyer. Standard bank loans want to know the source of the down payment for ONE REASON ONLY: to know if the buyer is taking ON A NEW DEBT! The only thing you will need do is sign a legal document stating the entire down payment is a gift. That way the bank knows their lendee isn't owing a new substantial debt, and that there aren't two lenders on the house, because should she default, the bank will have to pay you back first off the resale. Get it? They just want to know how many hands are in the fire.",
"title": ""
},
{
"docid": "c1d160ca991e4573a96855b4c0ece8cc",
"text": "They are not supposed to force any tax or escrow payments in addition to your normal principal and interest payment, unless you are delinquent on your taxes and insurance. If you are late or delinquent at all they can force you into escrows depending on how your Deed of Trust (mortgage) is worded. That being said, I've had to deal with BoA on behalf of clients over the same issues you just mentioned. Their whole system is made to cause chaos and confusion, especially for poor souls trying to complete a short sale, or a loan restructuring program. They are forever losing vital paperwork, or saying they didn't get documents in time, even though you spoke with someone to confirm receipt. They aren't really set up to help anyone, they just give the illusion of it before they foreclose. I owned a Title and Escrow company for many years, and most all mortgages with most all lenders (in our state) read they had the right to force escrow in the case of delinquency or even accelerate to foreclosure. If you've never been late on either or let your insurance lapse, or taxes fall delinquent, they shouldn't be able to require escrows, unless there is specific language in your original mortgage that says they can. Also, most people aren't aware that non payment isn't the only reason a lender can foreclose. Most mortgages read a lender can foreclose for the following reasons: -Non payment -Failure to keep homeowners insurance -Failure to pay taxes -Condemnation -Storing toxic waste, or hazardous materials -Illegal operations and usage (meth labs, etc...)",
"title": ""
},
{
"docid": "580a99928ac197a0f28d77e7f3786d50",
"text": "That's why they're taking the deal. But it's not like they completely stole all that money. I don't have any stats, but I'd assume most of those people who got their loans are still in their homes. (Sorry, I could be way off. Please correct) But they still are bastards for not letting me refinance. Could have just been because they saw this penalty coming.",
"title": ""
}
] |
fiqa
|
4ff3d800c7514df78fef62e54143e374
|
Is there any way to buy a new car directly from Toyota without going through a dealership?
|
[
{
"docid": "55ecbdac9f18f81e364770a802b869ce",
"text": "No you can't buy direct from Toyota. Largely because of many states' laws (assuming you're in the US) requiring a dealer relationship for car purchasing, read about Tesla's struggles with direct to customer sales. Secondly because Toyota corporate simply isn't set up to sell a car directly to a customer. I know there are services that help people through the buying process. If you're finding Toyota dealerships to be this difficult you may consider just buying something from someone who wants to sell to you. If the buying process is this difficult imagine the service relationship. Edit: Additionally, it's important to remember when financing a car that there are essentially two transactions taking place. First you're negotiating the price of the car. Then you negotiate the price of the money (the interest rate). The money does not need to come from the dealership, you can secure your financing rate from a separate bank or local credit union. You should definitely pursue alternate financing if they're quoting you 7.99% with a FICO of 710. But don't tell the dealership you've already got your financing lined up until you're happy with the price of the car.",
"title": ""
},
{
"docid": "8cb7522d6ca3e9bda5671deadac30edc",
"text": "I feel your pain. It probably depends on your state, but two things we've tried with some benefit:",
"title": ""
},
{
"docid": "2d233f6bf99fad1cc8751ba1049fd362",
"text": "You could consider buying a fairly recent used car from CarMax. They have fixed pricing, and you'd save a good amount of money on the car (since cars lose tons of value in their first year or so).",
"title": ""
},
{
"docid": "10b547be9d05268240b4754171364205",
"text": "Any car manufacturer that undercuts their own dealer network would have that network fall apart quickly. Tesla is using a dealer-free distribution model from the start, so they don't have that problem. Toyota doesn't work that way, though. GM imposed a uniform no-haggling policy with their Saturn brand, but that policy was coupled with local monopolies for dealers to make it work. Lexus has also experimented with no-haggling and online ordering (with delivery still taking place at a dealership). The rest of Toyota doesn't work that way, though. Some car manufacturers, such as BMW and Audi, allow you to take delivery of your new car at the factory for a discount. But even then, the transaction still takes place through a dealer. Toyota doesn't work that way, though. For one thing, they work at a different scale. If you buy a Camry in the US, it might be produced in Kentucky, Indiana, or Aichi, depending on business conditions. You say that you want to cut out the middleman, but the fact is that you do require someone to deliver a Toyota to you, like it or not. If you're interested in saving money, consider trying various well documented tips, such as negotiating by e-mail before showing up, pitting dealerships against each other. If you don't want to negotiate, you might be able to take advantage of pre-negotiated dealer prices through Costco. You mentioned that the dealership offered you a 7.99% interest rate for your 710 FICO score. That sounds insanely high — I'd expect deals more like 2% advertised by buyatoyota.com. (Remember, Toyota Motor Credit Corporation exists to help Toyota Motor Corporation sell more cars cheaply.) You can also seek alternate financing online (example) or through your own bank.",
"title": ""
},
{
"docid": "742133d583b237c209e3e151a9afde1f",
"text": "\"If there's one reasonably close to you, you could go to a no-haggle dealership. Instead of making you haggle the price downward, they just give a theoretically fixed price that's roughly what the average customer could negotiate down to at a conventional dealer. Then just do your best broken record impression if they still try to sell you dubious addons: \"\"No. No. No. No. No...\"\" The last time I bought a new car (06), a no haggle dealer offered the second best deal I got out of 4 dealerships visited. The one I ended up buying with made an exceptional offer on my trade (comparable to 3rd party sale bluebook value). - My guess is they had a potential customer looking for something like my old car and were hoping to resell it directly instead of flipping it via auction.\"",
"title": ""
},
{
"docid": "546e467b6c8c0761735740fb3cae79cf",
"text": "sadly, it is illegal in most states to buy a car directly from the manufacturer. as such, most manufacturers do not offer the option even where it is legal. if you really do know exactly what you want (model, color, options, etc.) i recommend you write down your requirements and send it to every dealer in town (via email or fax). include instructions that if they want your business, they are to reply via email (or fax) with a price within 7 days. at least one dealer will reply, and you can deal with whoever has the best price. notes:",
"title": ""
},
{
"docid": "3afa01632d0806e42be788925051b20c",
"text": "You can buy a new Toyota from a non-dealer, but not from Toyota directly as they have no retail distribution capability. There is no need to buy directly from Toyota if you want to get a new car without going through a dealer. In many cases people buy new cars but have to sell them immediately for one reason or another.",
"title": ""
},
{
"docid": "2a4035dd53cf08a9a1e6622434653193",
"text": "As someone who was just recently a salesman at Honda, I'd recommend buying a Honda instead :). If you really prefer your Toyota, I always found quote-aggregation services (Truecar, I'm blanking on others) very competitive in their pricing. Alternatively, you could email several dealerships requesting a final sale price inclusive of taxes and tags with the make, model, and accessories you'd wish to purchase, and buy the vehicle from them if your local dealership won't match that price. Please keep in mind this is only persuasive to your local dealership if said competitors are in the same market area (nobody will care if you have a quote from out-of-state). As many other commenters noted, you should arrange your own financing. A staple of the sales process is switching a customer to in-house financing, but this occurs when the dealership offers you better terms than you are getting on your own. So allow them the chance to earn the financing, but don't feel obligated to take it if it doesn't make sense fiscally.",
"title": ""
},
{
"docid": "9e0ebf802f468d7208c1171a500b2fb2",
"text": "As others have addressed the legality in their answers, I want to address the idea of the dealership being 'a middleman'. A dealership serves more of a purpose than just 'middlemanning' a car to a consumer. Actually, they consume a great deal of risk. Let's remember that a dealership is really an extension of the OEM, albeit independently owned and operated, the dealership must still answer to the brand they represent, if people have a bad experience with a dealership, a customer might go to another of the same brand, but more often than not they will go to the competition out of spite. Therefore, it's in the dealership's best interest to represent the brand as best as possible, but unfortunately that doesn't always happen. While the internet has made a certain part of a salesman's role null and void, and since this is a finance (read money) Q/A site let's take a moment to consider the risk assume and therefore the value added by a dealership: Test Drive. A car is a huge purchase, and while it's okay to buy a pair of shoes online without trying them on, a car is a bit different of course, we want to make sure it 'fits' before we shell out several thousand dollars. Yes, you (meaning consumers) can look at car pictures and specs online, but if you want to see how that vehicle handles on your town's roads, if it fits in your garage and/or driveway, then you need to take it for a test drive. It's not feasible for OEMs to have millions of people showing up to car plants for a test drive, right? Scalability aside, some business that is handled in automotive plants are confidential and not for the general public to know about. A dealership provides an opportunity for those who live locally to see and experience the car without flying or driving wherever the car was assembled. They provide this at a risk, banking on the fact that a good experience with the vehicle will lead to a sale. Service. A car is a machine, and no machine is perfect, neither will it last forever without proper service. A dealership provides a place for people to bring their vehicles when they need to be serviced. Let's set aside the fact that the service prices are higher than we'd like, because the fact remains most of it is skilled (and warrantied) labor that the majority of people don't want to do themselves. Trade Ins. It is not in an OEMs best interest to accept a vehicle just to sell you another vehicle, especially if that vehicle is from another brand. Dealership's assume this risk, and often offer incentives to do so, hoping it will lead to a sale. That trade in was an asset to you, but is a liability to them, because they now have to liquidate that trade in, just so that you can purchase a car. Sure, you could sell your car yourself, and now you would assume that risk: What if your car is not in perfect shape, or has a lot of miles for it's age? Would it do well in the used car market? What if it takes too long to sell and you miss that Memorial Day car sale at the dealer? This might be okay for some, but generally speaking most people would rather avoid the risk and trade it in at the dealer toward the purchase of a new car rather than the headache of selling it themselves. I'm sure there are more, but those are the one's that immediately sprung to mind. Just like Starbucks, there are terrible dealerships out there and there are great ones, and very few of us venture to farms and jungles just for fresh coffee beans :-)",
"title": ""
},
{
"docid": "d41d8cd98f00b204e9800998ecf8427e",
"text": "",
"title": ""
},
{
"docid": "37049d5b4651ff2d2b07af518e8d9f81",
"text": "You already got good answers on why you can't buy a Toyota from the factory, but my answer is regarding to the implied second part of your question: how to avoid haggling. I found a good way to avoid the haggling at a car dealership can be simply to not haggle. Go in with a different attitude. The main reason car dealers list inflated prices and then haggle is that they expect the customers to haggle. It is fundamentally based on distrust on both sides. Treat the sales person as your advisor, your business partner, as somebody you trust as an expert in his field, and you'll be surprised how the experience changes. Of course, make sure that the trust is justified. Sales reps have a fine line to walk. Of course they like to sell a car for more money, but they also do not want a reputation of overcharging customers. They'd rather you recommend them to your friends and post good reviews on Yelp. In the end, all reputable dealers effectively have a fixed-price policy, or close to it, even those who don't advertise it, and even for used cars. Haggling just prolongs the process to get there. And sales reps are people. Often people who hate the haggling part of their job as much as you do. I was in the market for a new (used) car a few months ago. In the end, it was between two cars (one of them a Toyota), both from the brand-name dealer's respective used car lots. In both cases, I went in knowing in advance what the car's fair market value was and what I was willing to pay (as well as details about the car, mileage, condition etc. - thanks to the Internet). Both cars were marked significantly higher. As soon as the sales rep realized that I wasn't even trying to haggle - the price dropped to the fair value. I didn't even have to ask for it. The rep even offered some extras thrown into the deal, things I hadn't even asked for (things like towing my old car to the junk yard).",
"title": ""
},
{
"docid": "b4ad89634ccd5f55d903dad9e63ee78e",
"text": "Yes, nothing is impossible! :) You can buy it directly from the factory of manufacturer, but then you will have to pay for sea shipping of this car. E.g. you can buy it directly from Japanese Toyota but then you will have to pay to sea cargo ship to deliver your car in container from Japan. Since this car is already your property, before importing to US, I doubt that you would need to pay any custom fees. In the end, the total payment might be a lot cheaper that you can buy there, but you need to be prepared to all this hassle",
"title": ""
}
] |
[
{
"docid": "1998aad62501d90096f94e435b798ef6",
"text": "The advice given at this site is to get approved for a loan from your bank or credit union before visiting the dealer. That way you have one data point in hand. You know that your bank will loan w dollars at x rate for y months with a monthly payment of Z. You know what level you have to negotiate to in order to get a better deal from the dealer. The dealership you have visited has said Excludes tax, tag, registration and dealer fees. Must finance through Southeast Toyota Finance with approved credit. The first part is true. Most ads you will see exclude tax, tag, registration. Those amounts are set by the state or local government, and will be added by all dealers after the final price has been negotiated. They will be exactly the same if you make a deal with the dealer across the street. The phrase Must finance through company x is done because they want to make sure the interest and fees for the deal stay in the family. My fear is that the loan will also not be a great deal. They may have a higher rate, or longer term, or hit you with many fee and penalties if you want to pay it off early. Many dealers want to nudge you into financing with them, but the unwillingness to negotiate on price may mean that there is a short term pressure on the dealership to do more deals through Toyota finance. Of course the risk for them is that potential buyers just take their business a few miles down the road to somebody else. If they won't budge from the cash price, you probably want to pick another dealer. If the spread between the two was smaller, it is possible that the loan from your bank at the cash price might still save more money compared to the dealer loan at their quoted price. We can't tell exactly because we don't know the interest rates of the two offers. A couple of notes regarding other dealers. If you are willing to drive a little farther when buying the vehicle, you can still go to the closer dealer for warranty work. If you don't need a new car, you can sometimes find a deal on a car that is only a year or two old at a dealership that sells other types of cars. They got the used car as a trade-in.",
"title": ""
},
{
"docid": "c7577a8c25ed9cc6e1deef21bd12ed1a",
"text": "One point I don't see above: Consumer's Union (the nonprofit which publishes Consumer Reports) has a service where, for a small fee, they'll send you information about how much the car and each option cost the dealer, how much the dealer is getting back in incentive money from the manufacturer, and some advice about which features are worthwhile, which aren't, and which you should purchase somewhere other than the dealer. Armed with that info, you can discuss the price on an equal footing, negotiating the dealer's necessary profit rather than hiding it behind bogus pricing schemes. Last time I bought a new car, I got this data, walked into the dealer with it visible on my clipboard, offered them $500 over their cost, and basically had the purchase nailed down immediately. It helped that I as willing to accept last year's model and a non-preferred color; that helped him clear inventory and encouraged him to accept the offer. ($500 for 10 minutes' work selling to me, or more after an hour of playing games with someone else plus waiting for that person to walk in the door -- a good salesman will recognize that I'm offering them a good deal. These days I might need to adjust that fair-profit number up a bit; this was about 20 years ago on an $8000 car... but I'm sure CU's paperwork suggests a current starting number.) It isn't quite shelf pricing. But at least it means any haggling is based on near-equal knowledge, so it's much closer to being a fair game.",
"title": ""
},
{
"docid": "c03c89b9c8a7b1f7dc27747751e1c316",
"text": "\"This is completely disgusting, utterly unethical, deeply objectionable, and yes, it is almost certainly illegal. The Federal Trade Commission has indeed filed suit, halted ads, etc in a number of cases - but these likely only represent a tiny percentage of all cases. This doesn't make what the car dealer's do ok, but don't expect the SWAT team to bust some heads any time soon - which is kind of sad, but let's deal with the details. Let's see what the Federal Trade Commission has to say in their article, Are Car Ads Taking You for a Ride? Deceptive Car Ads Here are some claims that may be deceptive — and why: Vehicles are available at a specific low price or for a specific discount What may be missing: The low price is after a downpayment, often thousands of dollars, plus other fees, like taxes, licensing and document fees, on approved credit. Other pitches: The discount is only for a pricey, fully-loaded model; or the reduced price or discount offered might depend on qualifications like the buyer being a recent college graduate or having an account at a particular bank. “Only $99/Month” What may be missing: The advertised payments are temporary “teaser” payments. Payments for the rest of the loan term are much higher. A variation on this pitch: You will owe a balloon payment — usually thousands of dollars — at the end of the term. So both of these are what the FTC explicitly says are deceptive practices. Has the FTC taken action in cases similar to this? Yes, they have: “If auto dealers make advertising claims in headlines, they can’t take them away in fine print,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “These actions show there is a financial cost for violating FTC orders.” In the case referenced above, the owners of a 20+ dealership chain was hit with about $250,000 in fines. If you think that's a tiny portion of the unethical gains they made from those ads in the time they were running, I'd say you were absolutely correct and that's little more than a \"\"cost of doing business\"\" for unscrupulous companies. But that's the state of the US nation at this time, and so we are left with \"\"caveat emptor\"\" as a guiding principle. What can you do about it? Competitors are technically allowed to file suit for deceptive business practices, so if you know any honest dealers in the area you can tip them off about it (try saying that out loud with a serious face). But even better, you can contact the FTC and file a formal complaint online. I wouldn't expect the world to change for your complaint, but even if it just generates a letter it may be enough to let a company know someone is watching - and if they are a big business, they might actually get into a little bit of trouble.\"",
"title": ""
},
{
"docid": "ee60151939fc8a15f134d44755e021c1",
"text": "$27,000 for a car?! Please, don't do that to yourself! That sounds like a new-car price. If it is, you can kiss $4k-$5k of that price goodbye the moment you drive it off the lot. You'll pay the worst part of the depreciation on that vehicle. You can get a 4-5 year old Corolla (or similar import) for less than half that price, and if you take care of it, you can get easily another 100k miles out of it. Check out Dave Ramsey's video. (It's funny that the car payment he chooses as his example is the same one as yours: $475! ;) ) I don't buy his take on the 12% return on the stock market (which is fantasy in my book) but buying cars outright instead of borrowing or (gasp) leasing, and working your way up the food chain a bit with the bells/whistles/newness of your cars, is the way to go.",
"title": ""
},
{
"docid": "af8b96a7087be6ba42486f0208c688a7",
"text": "I have had it two way now: I got pre-approval from my credit union which just so happened to be one of the bigger vehicle lenders in the metro area. What I found out was that the dealership (which was one of the bigger ones in the metro area) had a computer system that looked up my deal with the credit union. Basically, I signed some contracts and the CU and the dealership did whatever paperwork they needed to without me. I bought a used car and drove it off of the lot that night, and I didn't ever go back (for anything financial) Both my wife and her sister received blank checks that were valid up to a certain amount. In the case of my sister in law, she signed the check, the dealership called to confirm funds and she drove off. In the case of my wife, she ended up negotiating a better deal with dealer finance, but I was assured she only had to sign the check, get it verified and drive the car home.",
"title": ""
},
{
"docid": "277d4423be680399e5c346d4177ce244",
"text": "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.",
"title": ""
},
{
"docid": "438bad75d87d85c9b5fcb2144e7da298",
"text": "Ideally you would negotiate a car price without ever mentioning: And other factors that affect the price. You and the dealer would then negotiate a true price for the car, followed by the application of rebates, followed by negotiating for the loan if there is to be one. In practice this rarely happens. The sales rep asks point blank what rebates you qualify for (by asking get-to-know-you questions like where you work or if you served in the armed forces - you may not realize that these are do-you-qualify-for-a-rebate questions) before you've even chosen a model. They take that into account right from the beginning, along with whether they'll make a profit lending you money, or have to spend something to subsidize your zero percent loan. However unlike your veteran's status, your loan intentions are changeable. So when you get to the end you can ask if the price could be improved by paying cash. Or you could try putting the negotiated price on a credit card, and when they don't like that, ask for a further discount to stop you from using the credit card and paying cash.",
"title": ""
},
{
"docid": "fea3ea7f147f19c235bfbfaee7241797",
"text": "They'll refund your money (though maybe with a small service charge). I'm sure they regularly deal with new car sales gone wrong.",
"title": ""
},
{
"docid": "ac5e3eceb0f3f7efed7542521895e212",
"text": "I have gotten a letter of credit from my credit union stating the maximum amount I can finance. Of course I don't show the dealer the letter until after we have finalized the deal. I Then return in 3 business days with a cashiers check for the purchase price. In one case since the letter was for an amount greater then the purchase price I was able drive the car off the lot without having to make a deposit. In another case they insisted on a $100 deposit before I drove the car off the lot. I have also had them insist on me applying for their in-house loan, which was cancelled when I returned with the cashiers check. The procedure was similar regardless If I was getting a loan from the credit union, or paying for the car without the use of a loan. The letter didn't say how much was loan, and how much was my money. Unless you know the exact amount, including all taxes and fees,in advance you can't get a check in advance. If you are using a loan the bank/credit Union will want the car title in their name.",
"title": ""
},
{
"docid": "16696d4e713c86fc723d4c7c989523ee",
"text": "I have in the last few years purchased several used cars from dealers. They have handled it two different ways. They accepted a small check ~$1,000 now, and then gave me three business days to bring the rest as a cashiers check. They also insisted that I submit a application for credit, in case I needed a loan. They accepted a personal check on the spot. Ask them before you drive to the dealer. Of course they would love you to get a loan from them.",
"title": ""
},
{
"docid": "ec6e5622ee2d1e17cd611a3b30c31072",
"text": "My suggestion would be to keep it. The value of a new car is that you get to drive it around when it's still new and shiny, and that you know its history. If you maintain it in good condition, both mechanically and cosmetically, then you can have both of those benefits for the life of the car. Your question merges the old car sale and new car purchase transactions together, but that's not correct. The value of your 2010 car has no relationship to the value of any new car you might buy, except incidentally through the market forces that act on each. The car dealership is likely to be skilled at making you feel like your most important criteria are satisfied, but they will try to construct the deal to maximize the money you pay them while making you feel like you're the one maximizing your value. Also note that the dealership cannot give you maximum value for your car, because it costs them money to sell it and they take all the risk. Some of the difference between typical direct-sale and trade-in prices is the commission you are paying them to both sell it for you and absorb the risks in the transaction.",
"title": ""
},
{
"docid": "b605715d4578ff53e0f1b6bc6e390df0",
"text": "The car deal makes money 3 ways. If you pay in one lump payment. If the payment is greater than what they paid for the car, plus their expenses, they make a profit. They loan you the money. You make payments over months or years, if the total amount you pay is greater than what they paid for the car, plus their expenses, plus their finance expenses they make money. Of course the money takes years to come in, or they sell your loan to another business to get the money faster but in a smaller amount. You trade in a car and they sell it at a profit. Of course that new transaction could be a lump sum or a loan on the used car... They or course make money if you bring the car back for maintenance, or you buy lots of expensive dealer options. Some dealers wave two deals in front of you: get a 0% interest loan. These tend to be shorter 12 months vs 36,48,60 or even 72 months. The shorter length makes it harder for many to afford. If you can't swing the 12 large payments they offer you at x% loan for y years that keeps the payments in your budget. pay cash and get a rebate. If you take the rebate you can't get the 0% loan. If you take the 0% loan you can't get the rebate. The price you negotiate minus the rebate is enough to make a profit. The key is not letting them know which offer you are interested in. Don't even mention a trade in until the price of the new car has been finalized. Otherwise they will adjust the price, rebate, interest rate, length of loan, and trade-in value to maximize their profit. The suggestion of running the numbers through a spreadsheet is a good one. If you get a loan for 2% from your bank/credit union for 3 years and the rebate from the dealer, it will cost less in total than the 0% loan from the dealer. The key is to get the loan approved by the bank/credit union before meeting with the dealer. The money from the bank looks like cash to the dealer.",
"title": ""
},
{
"docid": "d548dfab650da351f25dd51212badb2e",
"text": "Sounds like 'up-selling'. You can harden yourself into being a 'tough sell' but it takes time and a lot of shopping. The quickest way to put up a defense is to never ever make a purchase over $100 without 'sleeping on it'. Just walk away, tell them you'll think it over, and go do some more research. Don't go back into a dealership or store that has hit you with guilt or pressure or a crazy price or whatever. Find a no-haggle or no-frills source, or even a source to buy a used version of the item you want.",
"title": ""
},
{
"docid": "5948efbabe7fdd53df8937b6699b9306",
"text": "Many reasons So in general you are paying more for peace of mind when you buy a new car. You expect everything to be working and if not you can take it back to the dealer to have them fix it for free.",
"title": ""
},
{
"docid": "e82d50ce566fea13d4c4b7bd3bb77f65",
"text": "I still think it will be rather difficult. Best bet is to call around to the five or so closest dealers and express you are considering the car contingent on price (NOT PAYMENT). Ask for them to send you their best out-the-door price on a base model. Then when you get quotes from each of them, shop the lowest price around. Usually dealers will budge a few hundred bucks to beat other dealers. But a 2018 STI will be difficult, if not impossible, to negotiate a few grand under MSRP. Understand that the people that buy this car are not doing so because it is a great bargain. So dealers can usually push this car at or near MSRP. Lastly, do not set foot in a dealership until you have a firm out-the-door price. They will play sales tricks until you give up on negotiation and will pay anything just to get out of there. The only time you should go to the location is to sign papers and drive away with the car. Do not worry about being nice and congenial with the salesperson. This advice got me my current vehicle at about 15% below the lowest True Car estimate. I don't claim this is the best advice out there but it works.",
"title": ""
}
] |
fiqa
|
0eb792a018c26758bbce3ddb6a813268
|
Should a high-school student invest their (relative meager) savings?
|
[
{
"docid": "e67ccb30c3a5db2fe0d4415199808c70",
"text": "You should invest in that with the best possible outcome. Right now that is in yourself. Your greatest wealth building tool, at this point, is your future income. As such anything you can do to increase your earnings potential. For some that might mean getting an engineering degree, for others it might mean starting a small business. For some it is both obtaining a college degree and learning about business. A secondary thing to learn about would be personal finance. I would hold off on stocks, at this time, until you get your first real job and you have an emergency fund in place. Penny stocks are worthless, forget about them. Bonds have their place, but not at this point in your life. Saving up for college and obtaining a quality education, debt free, should be your top priority. Saving up for emergencies is a secondary priority, but only after you have more than enough money to fund your college education. You can start thinking about retirement, but you need a career to help fund your savings plan. Put that off until you have such a career. Investing in stocks, at this juncture, is a bit foolish. Start a career first. Any job you take now should be seen as a step towards a larger goal and should not define who you are.",
"title": ""
},
{
"docid": "10ac79d2ac6be5c20574e7d20547be22",
"text": "\"You have a few correlated questions here: Yes you can. There are only a few investment strategies that require a minimum contribution and those aren't ones that would get a blanket recommendation anyway. Investing in bonds or stocks is perfectly possible with limited funds. You're never too young to start. The power of interest means that the more time you give your money to grow, the larger your eventual gains will be (provided your investment is beating inflation). If your financial situation allows it, it makes sense to invest money you don't need immediately, which brings us to: This is the one you have to look at most. You're young but have a nice chunk of cash in a savings account. That money won't grow much and you could be losing purchasing power to inflation but on the other hand that money also isn't at risk. While there are dozens of investment options1 the two main ones to look at are: bonds: these are fixed income, which means they're fairly safe, but the downside is that you need to lock up your money for a long time to get a better interest rate than a savings account index funds that track the market: these are basically another form of stock where each share represents fractions of shares of other companies that are tracked on an index such as the S&P 500 or Nasdaq. These are much riskier and more volatile, which is why you should look at this as a long-term investment as well because given enough time these are expected to trend upwards. Look into index funds further to understand why. But this isn't so much about what you should invest in, but more about the fact that an investment, almost by definition, means putting money away for a long period of time. So the real question remains: how much can you afford to put away? For that you need to look at your individual situation and your plans for the future. Do you need that money to pay for expenses in the coming years? Do you want to save it up for college? Do you want to invest and leave it untouched to inspire you to keep saving? Do you want to save for retirement? (I'm not sure if you can start saving via IRAs and the like at your age but it's worth looking into.) Or do you want to spend it on a dream holiday or a car? There are arguments to be made for every one of those. Most people will tell you to keep such a \"\"low\"\" sum in a savings account as an emergency fund but that also depends on whether you have a safety net (i.e. parents) and how reliable they are. Most people will also tell you that your long-term money should be in the stock market in the form of a balanced portfolio of index funds. But I won't tell you what to do since you need to look at your own options and decide for yourself what makes sense for you. You're off to a great start if you're thinking about this at your age and I'd encourage you to take that interest further and look into educating yourself on the investments options and funds that are available to you and decide on a financial plan. Involving your parents in that is sensible, not in the least because your post-high school plans will be the most important variable in said plan. To recap my first point and answer your main question, if you've decided that you want to invest and you've established a specific budget, the size of that investment budget should not factor into what you invest it in. 1 - For the record: penny stocks are not an investment. They're an expensive form of gambling.\"",
"title": ""
},
{
"docid": "d5b0314fd8c99ab3e4976299d6c2bbf8",
"text": "At your age (heck, at MY age :-)) I would not think about doing any of those types of investments (not savings) on your own, unless you are really interested in the investment process for its own sake, and are willing to devote a lot of time to investigating companies in order to try to pick good investments. Instead, find a good mutual fund from say Vanguard or TRP, put your money in there, and relax. Depending on your short-term goals (e.g. will you expect to need the money for college?) you could pick either an index fund, or a low-risk, mostly bond fund.",
"title": ""
},
{
"docid": "6ce8759db51b2ce834797cbbd3ed6464",
"text": "\"IMHO It is definitively not too early to start learning and thinking about personal finances and also about investing. If you like to try stock market games, make sure to use one that includes a realistic fee structure simulation as well - otherwise there'll be a very unpleasant awakening when switching to reality... I'd like to stress the need for low fees with the brokerage account! Sit down and calculate how much fees different brokers take for a \"\"portfolio\"\" of say, 1 ETF, 1 bond, 1 share of about $500 or $1000 each (e.g. order fee, annual fee, fee for paying out interest/dividend). In my experience, it is good if you can manage to make the first small investing steps before starting your career. Real jobs tend to need lots of time (particularly at the beginning), so time to learn investing is extremely scarce right at the time when you for the first time in your life earn money that could/should be invested. I'm talking of very slowly starting with a single purchase of say an ETF, a single bond next time you have saved up a suitable amount of toy money, then maybe a single share (and essentially not doing anything with them in order to avoid further fees). While such a \"\"portfolio\"\" is terrible with respect to diversification and relative fees*, this gives you the possibility to learn the procedures, to see how the fees cut in, what to do wrt taxes etc. This is why I speak about toy money and why I consider this money an investment in education. * An order fee of, say, $10 on a $500 position are terrible 4% (2 x $10) for buying + selling - depending on your local taxes, that would be several years of dividend yield for say some arbitrary Dow Jones ETF. Nevertheless, purchase + sale together are less than 3 cinema tickets.\"",
"title": ""
},
{
"docid": "a849a576e82b7dbc8249212d2e914783",
"text": "The advice to invest in yourself is good advice. But the stock market can be very rewarding over the long pull. You have about 45 years to retirement now and that is plenty long enough that each dollar put into the market now will be many dollars then. A simple way to do this might be to open a brokerage account at a reputable broker and put a grand into a very broad based all market ETF and then doing nothing with it. The price of the ETF will go up and down with the usual market gyrations, but over the decades it will grow nicely. Make sure the ETF has low fees so that you aren't being overcharged. It's good that you are thinking about investing at a young age. A rational and consistent investment strategy will lead to wealth over the long pull.",
"title": ""
},
{
"docid": "b6fe8c780df7d4e66657c512be61c241",
"text": "\"Is investing a good idea with a low amount of money? Yes. I'll take the angle that you CAN invest in penny stocks. There's nothing wrong with that. The (oversimplified) suggestion I would make is to answer the question about your risk aversion. This is the four quadrant (e.g., http://njaes.rutgers.edu:8080/money/riskquiz/) you are introduced to when you first sit down to open your brokerage (stocks) or employer retirement account (401K). Along with a release of liability in the language of \"\"past performance is not an indicator...\"\" (which you will not truly understand until you experience a market crash). The reason I say this is because if you are 100% risk averse, then it is clear which vehicles you want to have in your tool belt; t-bills, CDs, money market, and plain vanilla savings. Absolutely nothing wrong with this. Don't let anyone make you feel otherwise with remarks like \"\"your money is not working for you sitting there\"\". It's extremely important to be absolutely honest with yourself in doing this assessment, too. For example, I thought I was a risk taker except when the market tumbled, I reacted exactly how a knee-jerk investor would. Also, I feel it's not easy to know just how honest you are with yourself as we are humans, and not impartial machines. So the recommendation I would give is to make a strong correlation to casino gambling. In other words, conventional advice is to only take \"\"play money\"\" to the casino. This because you assume you WILL lose it. Then you can enjoy yourself at the casino knowing this is capital that you are okay throwing in the trash. I would strongly caution you to only ever invest capital in the stock market that you characterize as play money. I'm convinced financial advisors, fund managers, friends will disagree. Still, I feel this is the only way you will be completely okay when the market fluctuates -- you won't lose sleep. IF you choose this approach, then you can start investing any time. That five drachma you were going to throw away on lottery tickets? transfer it into your Roth IRA. That twenty yen that you were going to ante in your weekly poker night? transfer it into your index fund. You already got past the investors remorse of (losing) that money. IF you truly accept that amount as play money, then you CAN put it into penny stocks. I'll get lots of criticism here. However, I maintain that once you are truly okay with throwing that cash away (like you would drop it into a slot machine), then it's the same whether you lose it one way or in another investment vehicle.\"",
"title": ""
},
{
"docid": "ee2c4b844bf6867deea08781a2c05ee9",
"text": "\"Between 1 and 2 G is actually pretty decent for a High School Student. Your best bet in my opinion is to wait the next (small) stock market crash, and then invest in an index fund. A fund that tracks the SP500 or the Russel 2000 would be a good choice. By stock market crash, I'm talking about a 20% to 30% drop from the highest point. The stock market is at an all time high, but nobody knows if it's going to keep going. I would avoid penny stocks, at least until you can read their annual report and understand most of what they're claiming, especially the cash flow statement. From the few that I've looked at, penny stock companies just keep issuing stock to raise money for their money loosing operations. I'd also avoid individual stocks for now. You can setup a practice account somewhere online, and try trading. Your classmates probably brag about how much they've made, but they won't tell you how much they lost. You are not misusing your money by \"\"not doing anything with it\"\". Your classmates are gambling with it, they might as well go to a casino. Echoing what others have said, investing in yourself is your best option at this point. Try to get into the best school that you can. Anything that gives you an edge over other people in terms of experience or education is good. So try to get some leadership and team experience. , and some online classes in a field that interests you.\"",
"title": ""
},
{
"docid": "ae3b22deddd32ca9a39f5a7c766f219e",
"text": "\"If you're not rich, investing money will produce very small return, and is a waste of your resources. If you want to save until you die, then go for it (that's what investment companies want you to do). I suggest invest your money in building a network of friends who will be future asset for you. A group of friends helping each other have a much higher prospect of success. It has been proven that approximately 70% of jobs have been obtained through networking. Either through family, or friends, this is the vast majority. I will reiterate, invest on friends and family, not on strangers who want to tie down your money so they can have fun for the moment, while you wait to have fun when you're almost dead. Added source for those who are questioning the most well known fact within organizations, I'm baffled by the level of ignorance. Linkedin Recruitment Blog ...companies want to hire from within first; only when there are no appropriate internal candidates will they rely on referrals from employees (who get a bonus for a successful hire) and people who will approach them through informational meetings. The latter category of jobseekers (you) have the benefit of getting known before the job is \"\"officially posted.\"\" For those who believe loaning money to friends and family is a way of losing money -> this is a risk well worth taking -> and the risk is much lower than loaning your money to strangers -> and the reward is much higher than loaning your money to strangers.\"",
"title": ""
},
{
"docid": "62769608f166b86eac37da984ac5e9f8",
"text": "\"Nobody has mentioned your \"\"risk tolerance\"\" and \"\"investment horizon\"\" for this money. Any answer should take into account whether you can afford to lose it all, and how soon you'll need your investment to be both liquid and above water. You can't make any investment decision at all and might as well leave it in a deposit-insured, zero-return account until you inderstand those two terms and have answers for your own situation.\"",
"title": ""
},
{
"docid": "91e8bcfb1597f1dd879bb0546c4bce4e",
"text": "If you have no immediate need for the money you can apply the Rule of 72 to that money. Ask your parent's financial advisor to invest the money. Based on the rate of return your money will double like clockwork. At 8% interest your money will double every 9 years. 45 years from now that initial investment will have doubled 5 times. That adds up pretty fast. Time is your best friend when investing at your age. Odds are you'll want to be saving for a college education though. Graduating debt free is by far the best plan.",
"title": ""
}
] |
[
{
"docid": "3fd2c4aac08a0eb253bbb662aec2ca98",
"text": "\"It's a good question, but it turns into a general 'how to invest' question. You see, the cliche of \"\"invest the difference\"\" simply point to the ripoff the other two answers discuss. And it doesn't specify how to invest, only that this money should be put to work as long term investments. The best answer is to find the asset allocation appropriate for your age and risk profile. It can be as simple as a low cost S&P ETF, or as complex at a dozen assets that include Stocks, both Domestic and Foreign, REITs, Commodities, etc. It's not as if the saved funds get segregated in a special account just for this purpose, although I suppose one can do this just as others have separate funds for retirement, emergency, vacation, college, etc.\"",
"title": ""
},
{
"docid": "09559e9c00c99af95ddf0e5fa66b37b7",
"text": "Check out Khan Academy if you get a chance - they have a large suite of finance/capital market video clips that cover a lot of the basics of financial theory in short, manageable clips that might be suitable for someone in high school.",
"title": ""
},
{
"docid": "8dcbe5ddda15574ace112c0a790e58a5",
"text": "A lot of people on here will likely disagree with me and this opinion. In my opinion the answer lies in your own motives and intentions. If you'd like to be more cognizant of the market, I'd just dive in and buy a few companies you like. Many people will say you shouldn't pick your own stocks, you should buy an index fund, or this ETF or this much bonds, etc. You already have retirement savings, capital allocation is important there. You're talking about an account total around 10% of your annual salary, and assuming you have sufficient liquid emergency funds; there's a lot of non-monetary benefit to being more aware of the economy and the stock market. But if you find the house you're going to buy, you may have to liquidate this account at a time that's not ideal, possibly at a loss. If all you're after is a greater return on your savings than the paltry 0.05% (or whatever) the big deposit banks are paying, then a high yield savings account is the way I'd go, or a CD ladder. Yes, the market generally goes up but it doesn't ALWAYS go up. Get your money somewhere that it's inured and you can be certain how much you'll have tomorrow. Assuming a gain, the gain you'll see will PALE in comparison to the deposits you'll make. Deposits grow accounts. Consider these scenarios if you allocate $1,000 per month to this account. 1) Assuming an investment return of 5% you're talking about $330 return in the first year (not counting commissions or possible losses). 2) Assuming a high yield savings account at 1.25% you're talking about $80 in the first year. Also remember, both of these amounts would be taxable. I'll admit in the event of 5% return you'll have about four times the gain but you're talking about a difference of ~$250 on $12,000. Over three to five years the most significant contributor to the account, by far, will be your deposits. Anyway, as I'm sure you know this is not investment advice and you may lose money etc.",
"title": ""
},
{
"docid": "444faba77b03fa8fac9028b97e321df5",
"text": ">Also, I don't know if we should actually Invest in the market or just discuss and learn about the finance market in general. Since you're in highschool I would say that discussing and learning about it is more than enough. Some other things you can cover are budgeting, compounding interest, retirement accounts and advantages of them, credit scores, and credit in general. >What are some good ways to attract people to join the club Advertise it and provide informative handouts that explain what will be discussed and taught. Maybe get a math teacher involved to help explain certain things.",
"title": ""
},
{
"docid": "43e29fa4421236af230cf2f47a04c70e",
"text": "\"I would like to add my accolades in saving $3000, it is an accomplishment that the majority of US households are unable to achieve. source While it is something, in some ways it is hardly anything. Working part time at a entry level job will earn you almost three times this amount per year, and with the same job you can earn about as much in two weeks as this investment is likely to earn, in the market in one year. All this leads to one thing: At your age you should be looking to increase your income. No matter if it is college or a high paying trade, whatever you can do to increase your life time earning potential would be the best investment for this money. I would advocate a more patient approach. Stick the money in the bank until you complete your education enough for an \"\"adult job\"\". Use it, if needed, for training to get that adult job. Get a car, a place of your own, and a sufficient enough wardrobe. Save an emergency fund. Then invest with impunity. Imagine two versions of yourself. One with basic education, a average to below average salary, that uses this money to invest in the stock market. Eventually that money will be needed and it will probably be pulled out of the market at an in opportune time. It might worth less than the original 3K! Now imagine a second version of yourself that has an above average salary due to some good education or training. Perhaps that 3K was used to help provide that education. However, this second version will probably earn 25,000 to 75,000 per year then the first version. Which one do you want to be? Which one do you think will be wealthier? Better educated people not only earn more, they are out of work less. You may want to look at this chart.\"",
"title": ""
},
{
"docid": "a8fa04eaae270a59d75c5b36c12e036b",
"text": "\"Between \"\"fresh out of college\"\" and \"\"I have no debts, and a support system in place which because of which I can take higher risks.\"\" I would put every penny I could afford in the riskiest investment platform I was willing to. Holding onto money in a bank account is likely to cost you %1-%2 a year depending on what interest rates are and what inflation looks like. Money invested in a market could loose it all for you or you could become an overnight millionaire. Loosing it all would suck but you are young you will bounce back. Losing it slowly to inflation is just silly when you are young. If there is something you know you have to do in the next few years start to save for it but otherwise use the fact that you are young and have a safety net to try to make money.\"",
"title": ""
},
{
"docid": "d12a01b8f903137662fada452e2939e5",
"text": "\"Congratulations. The first savings goal should be an emergency fund. Think of this not as an investment, but as insurance against life's woes. They happen and having this kind of money earmarked allows one to invest without needing to withdraw at an inopportune time. This should go into a \"\"high interest\"\" savings account or money market account. Figure three to six months of expenses. The next goal should be retirement savings. In the US this is typically done through 401K or if your company does not offer one, either a ROTH IRA or Traditional IRA. The goal should be about 15% of your income. You should favor a 401k match over just about anything else, and then a ROTH over that. The key to transforming from a broke college student into a person with a real job, and disposable income, is a budget. Otherwise you might just end up as a broke person with a real job (not fun). Part of your budget should include savings, spending, and giving. All three areas are the key to building wealth. Once you have all of those taking care of the real fun begins. That is you have an emergency fund, you are putting 15% to retirement, you are spending some on yourself, and giving to a charity of your choice. Then you can dream some with any money left over (after expenses of course). Do you want to retire early? Invest more for retirement. Looking to buy a home or own a bunch of rental property? Start educating yourself and invest for that. Are you passionate about a certain charity? Give more and save some money to take time off in order to volunteer for that charity. All that and more can be yours. Budgeting is a key concept, and the younger you start the easier it gets. While the financiers will disagree with me, you cannot really invest if you are borrowing money. Keep debt to zero or just on a primary residence. I can tell you from personal experience that I did not started building wealth until I made a firm commitment to being out of debt. Buy cars for cash and never pay credit card interest. Pay off student loans as soon as possible. For some reason the idea of giving to charity invokes rancor. A cursory study of millionaires will indicate some surprising facts: most of them are self made, most of them behave differently than pop culture, and among other things most of them are generous givers. Building wealth is about behavior. Giving to charity is part of that behavior. Its my own theory that giving does almost no good for the recipient, but a great amount of good for the giver. This may seem difficult to believe, but I ask that you try it.\"",
"title": ""
},
{
"docid": "92fa7df2ead6e76d2d5ca28b6d794a4f",
"text": "Your long-term saving targets will include retirement, kids' college, house, etc. Medium-term might be your college, or a car. Short-term might be a vacation somewhere or a new laptop. In all cases saving, then spending money you do have is better than spending money you don't have. I think that's the first takeaway of this truism. However, I also believe 10% is said as a retirement target. Retirement is very important and this advice is stressed by many financial planners because it's very easy to underestimate how expensive it is. By the same token, it's recommended that you spend 2 months' salary on an engagement ring, and that particular truism can be traced back to a DeBeers ad. I personally don't know whether 10% as a retirement target is sage - it sounds right but I haven't followed it for a variety of reasons. Please corroborate against multiple sources and apply to your own financial person.",
"title": ""
},
{
"docid": "c357962a2485aaf01bfc8abffacd7213",
"text": "You have a comparatively small sum to invest, and since you're presumably expecting to go to college.university soon, where you may well need the money, you also have a short timescale for your investment. I don't think anything stock-related would be good for you -- you need a longer timescale for stock market investments, at least five years and preferably ten or more. I don't know the details of Australian savings, but I'd suggest just finding a bank that is giving a good interest rate for a one-year fixed-term savings account.",
"title": ""
},
{
"docid": "5619d5a098882eefbeacc9fab0a71ce9",
"text": "Are you working? Does your employer offer a 401(k) and if so, is there any match? Saving should be taught to kids at the same time they are old enough to get an allowance. There are many numbers tossed around, but 10% is a start for any new saver. If a college graduate can start by saving even 15%, better still. If you find that the 10% is too much, just start with what you can spare, and work to build that up over time, perhaps by splitting any future raises, half going toward savings, half to spending. Good luck. Edit - my 12 yr old made good money this summer baby sitting. I'm opening a Roth IRA for her. A 10 yr head start on her retirement savings. Edit (Jan-2013) - she's 14 now, 3 deposits to the Roth total $6000, and she's planning to up the number this year. Her goal is to have $50K saved in her Roth by the time she graduates college. Edit, by request (July-2017) 18, and off to college next month. Just under $24K, all invested in an S&P low cost index. We are planning to continue deposits of $4-$5K/yr, so the $50K is still a good goal.",
"title": ""
},
{
"docid": "695649f7c084bc87b29cdbeb1cf3f2f2",
"text": "\"I'd first put it in CDs or other short term account. Get through school first, then see where you land. If you have income that allows you to start a Roth IRA, I'd go for that, but keep it safe in case you actually need it back soon. After school, if you don't land a decent job fast, this money might be needed to live on. How long will it last if you take a few months to find work? If you do find a good job, moving, and setting up an apartment has a cost. Once you're there, I'd refer you to the many \"\"getting started\"\" Q&As on this site.\"",
"title": ""
},
{
"docid": "3968f1cb85779ffc3e09b528b1322831",
"text": "\"Well, I understand this forum is about money but I think you would be far better off if you invest the money in your daughters education or something similar that can bring much more significant future gains. I am a big fan of compound interest and investing in stocks but $700 sitting until she's 21 wont grow into a significant amount. When she's 21, what would you \"\"hope\"\" she'd spend the money on? something valuable like education right? so why don't you take the first step now so she will get a much bigger return than the monitory value. If I were you I'd invest in a home library or something similar.\"",
"title": ""
},
{
"docid": "3b756983b590de33a66abf890947706d",
"text": "As a 20 year old who has just started earning enough to save, I suggest showing them the different types of lifestyles they could live in the future if they started saving now versus what their life would be like if they didn't save at all. Try showing them actual dollar values as well so it's not just an arbitrary idea.",
"title": ""
},
{
"docid": "5441f74c31fd065e750dc107af1495a4",
"text": "\"This may be a great idea, or a very bad one, or it may simply not be applicable to you, depending on your personal circumstances and interests. The general idea is to avoid passive investments such as stocks and bonds, because they tend to grow by \"\"only\"\" a few percent per year. Instead, invest in things where you will be actively involved in some form. With those, much higher investment returns are common (but also the risk is higher, and you may be tied down and have to limit the traveling you want to do). So here are a few different ways to do that: Get a college degree, but only if you are interested in the field, and it ends up paying you well. If you aren't interested in the field, you won't land the $100k+ jobs later. And if you study early-childhood education, you may love the job, but it won't pay enough to make it a good investment. Of course, it also has to fit with your life plans, but that might be easier than it seems. You want to travel. Have you thought about anthropology, marine biology or archeology? Pick a reputable, hard-to-get-into, academic school rather than a vocation-oriented oe, and make sure that they have at least some research program. That's one way to distinguish between the for-profit schools (who tend to be very expensive and land you in low-paying jobs), and schools that actually lead to a well-paying future. Or if your interest runs more in a different direction: start a business. Your best bet might be to buy a franchise. Many of the fast-food chains, such as McDonalds, will let you buy as long as you have around $300k net worth. Most franchises also require that you are qualified. It may often make sense to buy not just one franchised store, but several in an area. You can increase your income (and your risk) by getting a loan - you can probably buy at least $5 million worth of franchises with your \"\"seed money\"\". BTW, I'm only using McDonalds as an example. Well-known fast food franchises used to be money-making machines, but their popularity may well have peaked. There are franchises in all kinds of industries, though. Some tend to be very short-term (there is a franchise based on selling customer's stuff on ebay), while others can be very long-lived (many real-estate brokerages are actually franchises). Do be careful which ones you buy. Some can be a \"\"license to print money\"\" while others may fail, and there are some fraudsters in the franchising market, out to separate you from your money. Advantage over investing in stocks and bonds: if you choose well, your return on investment can be much higher. That's generally true for any business that you get personally involved in. If you do well, you may well end up retiring a multimillionaire. Drawback: you will be exposed to considerable risk. The investment will be a major chunk of your net worth, and you may have to put all your eggs in none basket. If your business fails, you may lose everything. A third option (but only if you have a real interest in it!): get a commercial driver's license and buy an 18-wheeler truck. I hear that owner-operators can easily make well over $100k, and that's with having to pay off a bank loan. But if you don't love trucker culture, it is likely not worth doing. Overall, you probably get the idea: the principle is to use your funds as seed money to launch something profitable and secure, as well as enjoyable for you.\"",
"title": ""
},
{
"docid": "ed0a834861a6e3accdc94feb5d815429",
"text": "If these are children that may be employed, in a few years, it may well be worth walking them through some basics of the deductions around employment, some basic taxes, uses of banks, and give them enough of a basis in how the economy of the world works. For example, if you get a job and get paid $10/hour, that may sound good but how much do various things eat at that so your take-home pay may be much lower? While this does presume that the kids will get jobs somewhere along the way and have to deal with this, it is worth making this part of the education system on some level rather than shocking them otherwise. Rather than focusing on calculations, I'd be more tempted to consider various scenarios like how do you use a bank, what makes insurance worth having(Life, health, car, and any others may be worth teaching on some level), and how does the government and taxes fit into things. While I may be swinging more for the practical, it is worth considering if these kids will be away in college or university in a few years, how will they handle being away from the parents that may supply the money to meet all the financial needs?",
"title": ""
}
] |
fiqa
|
8faa349691d00fb8eea39b2aa66e1a0b
|
Pending euro payment to a usd account
|
[
{
"docid": "7d9579caffe876adaaec0604f08c7549",
"text": "Currency exchange is rather the norm than the exception in international wire transfers, so the fact that the amount needs to be exchanged should have no impact at all. The processing time depends on the number of participating banks and their speeds. Typically, between Europe and the US, one or two business days are the norm. Sending from Other countries might involve more steps (banks) which each takes a bit of time. However, anything beyond 5 business days is not normal. Consider if there are external delays - how did you initiate the sending? Was it in person with an agent of the bank, who might have put it on a stack, and they type it in only a day later (or worse)? Or was it online, so it is in the system right away? On the receiver side, how did you/your friend check? Could there be a delay by waiting for an account statement? Finally, and that is the most common reason, were all the numbers, names, and codes absolutely correct? Even a small mismatch in name spelling might trigger the receiving bank to not allocate the money into the account. Either way, if you contact the sender bank, you will be able to make them follow up on it. They must be able to trace where they money went, and where it currently is. If it is stuck, they will be able to get it ‘unstuck’.",
"title": ""
}
] |
[
{
"docid": "36094ade5ebd58a72431950f9e483f7d",
"text": "This is not allowed, and there is a name for it: IBAN discrimination. Searching for that term will give you some pointers what to do about it. The EU regulation that prohibits this is 260/2012, article 9, paragraph 2: A payee accepting a credit transfer or using a direct debit to collect funds from a payer holding a payment account located within the Union shall not specify the Member State in which that payment account is to be located, provided that the payment account is reachable in accordance with Article 3. You can report this at the relevant national authorities. In the Netherlands, this is De Nederlandsche Bank, which has a special e-mail address for this: meldpuntIBANdiscriminatie@dnb.nl",
"title": ""
},
{
"docid": "43a9b92312ba34413f5070c89cd8da50",
"text": "I live in europe but have been paid in usd for the last few years and the best strategy I've found is to average in and average out. i.e. if you are going in August then buy some Euro every few weeks until you go. At least this way you mitigate the risk involved somewhat.",
"title": ""
},
{
"docid": "5b213dd622dfb92ca43339dad0d9a256",
"text": "\"Your bank is maintaining different states for transactions, and changing the state depending on real-world events and the passage of time. withdraw €100 from my bank account on 30 September […] my bank does not process the transaction until 2 October. The bank probably have that transaction marked as “pending” on 30 September, and “cleared” on 2 October. transfer €100 from Bank A to Bank B, Bank A's statement dates the transaction on 20 September, but Bank B dates it as coming in on 22 September. Similarly, bank A will have the transaction marked as “pending” initially. Bank B won't have a corresponding transaction at all, until later; they'll have it “pending” too, until they confirm the transfer. Then (probably at different times from each other) the banks will each mark the corresponding transactions “cleared”. The bookkeeping software that I use doesn't seem to allow for this \"\"transfer time\"\" between accounts. When I enter a transfer from one account to another, they both have to have the same date. You may want to learn about different bases of accounting. The simpler option is “cash-based” accounting. The simplification comes from assuming transactions take no time to transfer from one account to another, and are instantly available after that. Your book-keeping software probably books using this simpler basis for your personal finances. The more complex “accrual-based” accounting tracks each individual transaction through multiple states – “pending”, “transfer”, “cleared”, etc. – with state changes at different times – time of trade, time of settlement, etc. – to more accurately reflect the real world agreements between parties, and different availability of the money to each party. So if your book-keeping program uses “cash basis”, you'll need to pick which inaccuracy you want: book the transfer when you did it, or book the transfer when the money is available at the other end.\"",
"title": ""
},
{
"docid": "14a8a916279398241896fc0082a61796",
"text": "I don't see how Paypal can stop you from transferring USD funds from your paypal account to a USD account held with a bank. Just tell them to do the transfer to your account. The issue could be around USD onshore / offshore regulation. Is the US government preventing EU citizens from taking USD income offshore? If that's the case then you need a correspondent bank. So in other words, like using your friend. But what you can do is ask your bank who is their correspondent bank in the US, and whether they have the license required to transfer USD funds offshore. So you shift the regulation issues to your bank, and then you have to accept your bank's exchange rate - which is going to be better than paypal, who charges too much for FX transactions.",
"title": ""
},
{
"docid": "513c294394934b6882b8506b9d15ffa4",
"text": "All Indian Banks are offering USD accounts known as multicurrency account, where you can hold your fund, this account also permits you to book the USD to INR rates in advance if you require. You can keep your money in this account and also can remit the same back to source or other destination country.",
"title": ""
},
{
"docid": "9fbd618f21167b6f2ca0204c0cb3d4ed",
"text": "I ended up just trying. I gave A the IBAN of B's account, which I calculated online based on the bank code and account number (because B claimed IBAN won't work, so didn't give it to me), and B's name. A was able to transfer the money apparently without extra difficulties, and it appeared on B's account on the same day. Contrary to some other posts here, IBAN has nothing to do with the Euro zone, nor is it a European system. It started in Europe, but it has been adopted as an ISO standard (link). As usual of course some countries don't see the urgency to follow an international standard :) XE.com has a list of all IBAN countries; quite a few are non-European. Here is even the list formatted specially for the European-or-not discussion: link.",
"title": ""
},
{
"docid": "29cf5583c86e0216a19eb093e877ba35",
"text": "Whenever you pay or withdraw some fund from your account, paypal takes approx 3% of the current currency value along with the fees. i.e. If you are paying/withdraw 100 unit of US Dollars to British pounds and if the current convertion rate is 1$=0.82GBP, then consider reducing 3% of the actual currency rate. So, the approximate magnitude will be 0.82*97% (100-3=97) = 0.7954. So, 1$=0.7954GBP. This formula will not give you 100% accurate value but will help of course. Captain",
"title": ""
},
{
"docid": "aebb3e042d059f38512e55259f13f42e",
"text": "Deutsche Bank states here (couldn't find it in english) that SEPA transfers (all transfers in EUR to EU states that have EUR) are free. So you could just transfer the money. Your custom daily transfer limit (by default 1000€ for online banking transfers) applies. You can change the limit online or by going to one of their branches. You would then transfer your money over the course of several days. You need the SWIFT and BIC code of your new account.",
"title": ""
},
{
"docid": "8c4294b7324da19af5e25ba706f728e5",
"text": "Are you sure this is not a scam. It is expensive to transfer 10 EUR by SWIFT. It will cost 30 EUR in Banks fees. If this is genuine ask them to use remittance service or western union or you open a PayPal account and ask them to transfer money.",
"title": ""
},
{
"docid": "e1dac56971cd12de901cc898d434ef11",
"text": "Why not open an USD account or subaccount in Czechia and then transfer the money using an UAE bank that supports transfers in USD. If you don't want to open an USD account in Czechia, it'll get converted when received there into the currency of your account but at their conversion rate which probably isn't good. Alternatively, use Transferwise which might or might not be cheaper.",
"title": ""
},
{
"docid": "56a51834c97003723af0acd774fa6198",
"text": "My account is with Indian Bank, if that's relevant. Indian Bank already has SWIFT BIC. Is there any way I can receive such international transfers in my account if the bank branch itself is not SWIFT enabled? The Branch need not be SWIFT enabled. However the Bank needs to be SWIFT enabled. Indian Bank is SWIFT enabled and has several Correspondent Banks in US. See this link on Indian Bank Website Select USD as filter in bottom page. It will list quite a few Banks that are correspondent to the Indian Bank. Click on the Link and it will give you more details. For example with Citi Bank as Correspondent. In the Beneficiary account details fill in your account details etc and send this to the company and they should be able to send you a payment based on this.",
"title": ""
},
{
"docid": "28e02a87e6118dfc2685339589467995",
"text": "The best way to do this would be to exchange the funds into USD and wire the funds to your bank account in the US. It is up to you whether you want to hold USD or Euros. Depends if you plan to invest money in the US.",
"title": ""
},
{
"docid": "457d622371d738723f400eaa2f67c280",
"text": "frostbank.com is the closest thing I've found, so accepting this (my own) answer :) EDIT: editing from my comment earlier: frostbank.com has free incoming international wires, so that's a partial solution. I confirmed this works by depositing $1 (no min deposit requirement) and wiring $100 from a non-US bank. Worked great, no fees, and ACH'd it to my main back, no problems/fees. No outgoing international wires, alas.",
"title": ""
},
{
"docid": "017a7de71720f3ddd4ec7b363fcd2bec",
"text": "Transfer it as International wire, there will be some fees. Check with your Bank in Turkey. Turkey has not yet joined SEPA, else this would have been a low cost alternative.",
"title": ""
},
{
"docid": "0878af8aa13a09e310192c9020de479d",
"text": "For those who are interested, I am answering my own question: We used Postbank and transferred 6000 Euro, we chose to Transfer in US$, and selected Shared Fees. There were three fees in total: All in all, I paid ~37$; this is about half of what I expected; and I got a perfect exchange rate. Postbank might have its downsides, but it seems they are still a good deal.",
"title": ""
}
] |
fiqa
|
3d9a3615e3060a698bbde653c8e74c17
|
Why would my job recruiter want me to form an LLC?
|
[
{
"docid": "6325c6917fcb839f3924dfd764e8cc8a",
"text": "Your recruiter is likely trying to avoid having to pay the employer's side of employment taxes, and may even be trying to avoid having to file a 1099 for you by treating your relationship as a vendor/service provider that he is purchasing services from, which would make your pay just a business expense. It's definitely in his best interest for you to do it this way. Whether it's in your best interest is up to you. You should consult a licensed legal/tax professional to help you determine whether this is a good arrangement for you. (Most of the time, when someone starts playing tax avoidance games, they eventually get stung by it.) The next big question: If you already know this guy is a snake, why are you still working with him? If you don't trust him, why would you take legal/tax advice from him? He might land you a high-paying job. But he also might cause you years of headaches if his tax advice turns out to be flawed.",
"title": ""
},
{
"docid": "3cd06f09541ff85e29fb9bb2fa1596e7",
"text": "This sounds very like disguised employment. You act like an employee of the company, but your official relationship with them is as a contractor. You gain none of the protection you get from being an employee, and this may make you cheaper, less risky and more desirable for the company who is hiring you. Depending on your country you may also pay corporation tax rather than income tax, which may represent a very significant saving. Also, the company hiring you may not have to pay PAYE, national insurance, stakeholder pension, etc. This arrangement is normal and legal providing you genuinely are acting as a subcontractor. However if you are behaving as an employee (desk at the company, company email, have to work specific hours in a specific location, no ability to subcontract, etc.) you may be classified as a disguised employee. In the UK it used to be common practice for highly paid employees to set up shell companies to avoid tax. This will now get you into hot water. Google IR35 It sounds like your relationship in this case is directly with the recruiter. You will have to consider if the recruiter is acting as your employer, or if you remain a genuinely independent agent. The duration of your contract with the recruiter will have a bearing on this. In the UK there are a whole series of tests for disguised employment. This is a good arrangement provided you go in with your eyes open and an awareness of the legislation. However you should absolutely check the rules that apply in your country before entering into this agreement. You could potentially be stung very badly indeed.",
"title": ""
},
{
"docid": "2d4eb245ae641d59c1a8781dcb1ccca0",
"text": "\"There are a few sites out there that can give you some reasoning behind the request. LegalZoom, for instance. To quote the LZ doc in case the link dies: Employee vs. Independent Contractor If a worker is an employee, the employer is responsible for paying Social Security, unemployment insurance, Medicare, and possibly other costs like workers' compensation insurance for the employee; at the end of the tax year, the employer is responsible for compiling all necessary payroll reports, including W-2 forms. If a worker is an independent contractor, the employer is not responsible for any of the above taxes or payments, and the only added paperwork is the issuing of a 1099 to the independent contractor at the end of the tax year, if he or she has made more than $600 with the employer. As Kent suggested, you should speak with an attorney (really you need one if setting up an LLC). There are a lot of companies out there these days that try to classify people as contractors rather than full-time employees as it gets them out of paying benefits and dealing with taxes. This is being heavily cracked down on, and several \"\"contractor\"\" employees are winning lawsuits to get full-time status. If you are truly acting as a contractor, then setting up an LLC can help with a few items such as taxes and protection on certain business aspects (see comments below regarding this). It's easy and relatively cheap (cost me about $250 with extra legal advice tacked on). If you are reporting directly to a manager with the company, or really working in any way that isn't consistent with the definition of a contractor, then I'd turn down the offer and ask to be made a FT employee. Additional information: https://www.sba.gov/content/hire-contractor-or-employee\"",
"title": ""
},
{
"docid": "ced865df0eb2464f46ff31ca887ed471",
"text": "I don't know about the US, but in the UK this is common practice, even required in some situations, and not sketchy at all. It's perfectly legal, saves you tax, and protects you from a legal standpoint. (i.e. what if you break something and your employer wants to sue you?) This is what companies are for, they are legal entities that are separate from an individual. There is no requirement for a company to have more than one employee.",
"title": ""
},
{
"docid": "9fe39059905ec8dc96ad3b388e818b19",
"text": "\"The \"\"independent contractor\"\" vs. \"\"employee\"\" distinction is a red herring to this discussion and not at all important just because someone suggested you use your LLC to do the job. Corp-2-Corp is a very common way to do contracting and having an LLC with business bank accounts provides you with more tax deductions (such as deducting interest on credit lines). Some accounting practices prefer to pay entities by their Tax ID numbers, instead of an individual's social security number. The actual reasoning behind this would be dubious, but the LLC only benefits you and gives you more advantages by having one than not. For example, it is easier for you to hire subcontractors through your LLC to assist with your job, due to the opaqueness of the private entity. Similarly, your LLC can sign Non Disclosure and Intellectual Property agreements, automatically extending the trade secrets to all of its members, as opposed to just you as an individual. By signing whatever agreement with the company that is paying you through your LLC, your LLC will be privy to all of this. Next, assuming you did have subcontractors or other liability inducing assets, the LLC limits the liability you personally have to deal with in a court system, to an extent. But even if you didn't, the facelessness of an LLC can deter potential creditors, for example, your client may just assume you are a cog in a wheel - a random employee of the LLC - as opposed to the sole owner. Having a business account for the LLC keeps all of your expenses in one account statement, making your tax deductions easier. If you had a business credit line, the interest is tax deductible (compared to just having a personal credit card for business purposes). Regarding the time/costs of setting up and managing an LLC, this does vary by jurisdiction. It can negligible, or it can be complex. You also only have to do it once. Hire an attorney to give you a head start on that, if you feel that is necessary. Now back to the \"\"independent contractor\"\" vs. \"\"employee\"\" distinction: It is true that the client will not be paying your social security, but they expect you to charge more hourly than an equivalent actual employee would, solely because you don't get health insurance from them or paid leave or retirement plans or any other perk, and you will receive the entire paycheck without any withheld by the employer. You also get more tax deductions to utilize, although you will now have self employment tax (assuming you are a US citizen), this becomes less and less important the higher over $105,000 you make, as it stops being counted (slightly more complicated than that, but self employment tax is it's own discussion).\"",
"title": ""
},
{
"docid": "6f2d89c8eae4640911385df7d8e221b8",
"text": "This is pretty normal. I am in the UK and currently doing the exact same thing. As some answers state there is additional tax law called IR35. But thats all it is, an additional tax law that may be applicable to your situation (it very well may not). It is all perfectly legal and common (all my university friends now do it). You will be the director of a company, and invoice the recruiters company. This has benefits and disadvantages. Personally I love it, but each to their own. Don't do it if you don't want to.",
"title": ""
},
{
"docid": "de2a1de2c247e1e573b8f28fcf9f1b28",
"text": "\"LLC is, as far as I know, just a US thing, so I'm assuming that you are in the USA. Update for clarification: other countries do have similar concepts, but I'm not aware of any country that uses the term LLC, nor any other country that uses the single-member LLC that is disregarded for income tax purposes that I'm referring to here (and that I assume the recruiter also was talking about). Further, LLCs vary by state. I only have experience with California, so some things may not apply the same way elsewhere. Also, if you are located in one state but the client is elsewhere, things can get more complex. First, let's get one thing out of the way: do you want to be a contractor, or an employee? Both have advantage, and especially in the higher-income areas, contractor can be more beneficial for you. Make sure that if you are a contractor, your rate must be considerably higher than as employee, to make up for the benefits you give up, as well as the FICA taxes and your expense of maintaining an LLC (in California, it costs at least $800/year, plus legal advice, accounting, and various other fees etc.). On the other hand, oftentimes, the benefits as an employee aren't actually worth all that much when you are in high income brackets. Do pay attention to health insurance - that may be a valuable benefit, or it may have such high deductibles that you would be better off getting your own or paying the penalty for going uninsured. Instead of a 401(k), you can set up an IRA (update or various other options), and you can also replace all the other benefits. If you decide that being an employee is the way to go, stop here. If you decide that being a contractor is a better deal for you, then it is indeed a good idea to set up an LLC. You actually have three fundamental options: work as an individual (the legal term is \"\"sole proprietorship\"\"), form a single-member LLC disregarded for income tax purposes, or various other forms of incorporation. Of these, I would argue that the single-member LLC combines the best of both worlds: taxation is almost the same as for sole proprietorship, the paperwork is minimal (a lot less than any other form of incorporation), but it provides many of the main benefits of incorporating. There are several advantages. First, as others have already pointed out, the IRS and Department of Labor scrutinize contractor relationships carefully, because of companies that abused this status on a massive scale (Uber and now-defunct Homejoy, for instance, but also FedEx and other old-economy companies). One of the 20 criteria they use is whether you are incorporated or not. Basically, it adds to your legal credibility as a contractor. Another benefit is legal protection. If your client (or somebody else) sues \"\"you\"\", they can usually only sue the legal entity they are doing business with. Which is the LLC. Your personal assets are safe from judgments. That's why Donald Trump is still a billionaire despite his famous four bankruptcies (which I believe were corporate, not personal, bankrupcies). Update for clarification Some people argue that you are still liable for your personal actions. You should consult with a lawyer about the details, but most business liabilities don't arise from such acts. Another commenter suggested an E&O policy - a very good idea, but not a substitute for an LLC. An LLC does require some minimal paperwork - you need to set up a separate bank account, and you will need a professional accounting system (not an Excel spreadsheet). But if you are a single member LLC, the paperwork is really not a huge deal - you don't need to file a separate federal tax return. Your income will be treated as if it was personal income (the technical term is that the LLC is disregarded for IRS tax purposes). California still does require a separate tax return, but that's only two pages or so, and unless you make a large amount, the tax is always $800. That small amount of paperwork is probably why your recruiter recommended the LLC, rather than other forms of incorporation. So if you want to be a contractor, then it sounds like your recruiter gave you good advice. If you want to be an employee, don't do it. A couple more points, not directly related to the question, but hopefully generally helpful: If you are a contractor (whether as sole proprietor or through an LLC), in most cities you need a business license. Not only that, but you may even need a separate business license in every city you do business (for instance, in the city where your client is located, even if you don't live there). Business licenses can range from \"\"not needed\"\" to a few dollars to a few hundred dollars. In some cities, the business license fee may also depend on your income. And finally, one interesting drawback of a disregarded LLC vs. sole proprietorship as a contractor has to do with the W-9 form and your Social Security Number. Generally, when you work for somebody and receive more than $600/year, they need to ask you for your Social Security Number, using form W-9. That is always a bit of a concern because of identity theft. The IRS also recognizes a second number, the EIN (Employer Identification Number). This is basically like an SSN for corporations. You can also apply for one if you are a sole proprietor. This is a HUGE benefit because you can use the EIN in place of your SSN on the W-9. Instant identity theft protection. HOWEVER, if you have a disregarded LLC, the IRS says that you MUST use your SSN; you cannot use your EIN! Update: The source for that information is the W-9 instructions; it specifically only excludes LLCs.\"",
"title": ""
}
] |
[
{
"docid": "8c53d1b2149e29a06ade529876aca990",
"text": "An LLC is a very flexible company when it comes to taxation. You have three basic tax options: There are other good reasons to create an LLC (mainly to protect your personal assets) so even if you decide that you don't want to deal with the complications of an S-Corp LLC, you should still consider creating a sole proprietorship LLC.",
"title": ""
},
{
"docid": "d4f7f19177888a1ddbce1e8f98d891ee",
"text": "\"The biggest problem with this that others seem to have missed is that a corporation must have a profit motive. Meaning at some point after a \"\"startup phase\"\" your company needs to turn a profit to not be considered a hobby. Will your employer be paying your corporation for your salary? Is that the company's business endeavor? If you run profits through the company and treat it like a true business, this may be technically possible, but as others have mentioned probably will cost more than any benefits you'd receive. And at every step you'll be throwing tons of audit flags. Rich Dad Poor Dad advocates a light version of this. Essentially running a business like Real Estate through an LLC, and then using that LLC for \"\"business trips\"\" (vacation with some justifiable business motive) or capital purchases (laptop, etc...) and the like, such that you're paying with \"\"Pre-tax\"\" money instead of \"\"Post tax\"\", but again the business needs a revenue source.\"",
"title": ""
},
{
"docid": "aeb855264aec4f98e952b57307284244",
"text": "I'm in connecticut and I have met with RobertHalf and another recruiting firm. They both said they would be in constant contact with me yet I haven't heard from either so far. I have emailed and called and haven't gotten much. I try to apply to at least 4 or 5 new positions a day but never hear anything back. [This](http://www.w3schools.com/sql/default.asp) is what I have been trying to familiarize myself with just to get the gist of SQL.",
"title": ""
},
{
"docid": "6b80141754cd9c7da3082116071ec001",
"text": "\"S-Corp are taxed very different. Unlike LLC where you just add the profit to your income with S-Corp you have to pay yourself a \"\"reasonable\"\" salary (on w-2) which of course is a lot more paperwork. I think the advantage (but don't hold me accountable for this) is if your S-Corp makes a lot more than a reasonable salary, then the rest of the money can be passed through on your personal return at a lower (corp) rate.\"",
"title": ""
},
{
"docid": "faa4701b0b2b3ae331c0e76afa727a6a",
"text": "\"I work in the legal services industry, selling these products for a competitor of theirs who shall remain nameless. The LLC filing itself in most cases is a simple fill in the blank form. You can likely file yourself either online or through the mail, depending on the state. Only a handful require an original document. You can apply for the EIN for free on the IRS website and usually have it within a few minutes. If you already have someone assisting with your annual LLC taxes you wouldn't need their services for that either. If their compliance kit involves any business licensing research, it may be worthwhile - but you can also order those services a la carte from vendors like LLX and BusinessLicenses.com. What you're really paying for is the registered agent service - the address for public record with the state so they know where to send any service of process - and you're paying for the convenience of a \"\"one stop shop\"\" instead of handling all the legwork yourself.\"",
"title": ""
},
{
"docid": "1a5e0d894cd75c85c0f41c7ac82bcbcb",
"text": "\"Get some professional accounting help. You're going to have to pay for everything out of the fee you charge: taxes, retirement, health care, etc. You'll be required to pay quarterly. I don't think you should base your fee on what \"\"this\"\" company will pay as a full-time employee, but what you can expect in your area. They're saving a lot of money not going through an established employment firm and essentially, making you create your own. There are costs to setting up and maintaining a company. They have less risk hiring you because there are no unemployment consequences for letting you go. Once you're hired, they'll probably put you on salary, so you can forget about making more money if you work over 40 hrs. IMHO - there have to be better jobs in your area than this one.\"",
"title": ""
},
{
"docid": "30081f2e3fe18ac9db6deacb9f772b8a",
"text": "\"The primary advantage is protection of your personal assets. If your LLC gets sued, they can't take your house/car/dog/wife. There aren't really any financial incentives to be an LLC; because of the pass-thru taxing structure, you wind up paying the same in taxes either way. \"\"The cost\"\" will depend on where you're located, and usually involves a few factors -- Expect to pay $300-500 to start it, depending on your state and who you register with (technically, you can usually register for free at the secretary of state, but wouldn't you rather pay an expert?), and \"\"State Franchise Tax\"\", which will can be a minimum of up to $1000/year depending on the state, plus even more if your LLC earns more than $xxx,000. EDIT -- As an aside, I'll mention that I'm based in California, and our state franchise tax starts at $800/yr. I'm all-web-based, so I've been investigating incorporating in Nevada or Delaware instead (no franchise tax, lower filing fees), but from what I've found, it's hardly worth the trouble. In addition to having to pay a Registered Agent (someone to act as my permanent mailing address in that state for ~$100/yr), apparently California likes to search for people just like me, and charge them $800 anyway. You can fight that, of course, and claim that your business really is done in Nevada, but do you really want to?\"",
"title": ""
},
{
"docid": "fb4538721131cc3f19655a02ffa66286",
"text": "\"If you start an LLC with you as the sole member it will be considered a disregarded entity. This basically means that you have the protection of being a company, but all your revenues will go on your personal tax return and be taxed at whatever rate your personal rate calculates to based on your situation. Now here is the good stuff. If you file Form 2553 you can change your sole member LLC to file as an S Corp. Once you have done this it changes the game on how you can pay out what your company makes. You will need to employ yourself and give a \"\"reasonable\"\" salary. This will be reported to the IRS and you will file your normal tax returns and they will be taxed based on your situation. Now as the sole member you can then pay yourself \"\"distribution to share holders\"\" from your account and this money is not subject to normal fica and social security tax (check with your tax guy) and MAKE SURE to document correctly. The other thing is that on that same form you can elect to have a different fiscal year than the standard calendar IRS tax year. This means that you could then take part of profits in one tax year and part in another so that you don't bump yourself into another tax bracket. Example: You cut a deal and the company makes 100,000 in profit that you want to take as a distribution. If you wrote yourself a check for all of it then it could put you into another tax bracket. If your fiscal year were to end say on sept 30 and you cut the deal before that date then you could write say 50,000 this year and then on jan 1 write the other check.\"",
"title": ""
},
{
"docid": "4c34950d70128d7f29add7428d89fdbf",
"text": "If I understand you right, people are giving the LLC money for an ownership share. That is NOT income - it would go under equity on the balance sheet. It is analogous to getting a loan from the bank. It is not income - you get cash (an asset) and have an increase to debt (a liability)",
"title": ""
},
{
"docid": "f1d749c90d303dc35e09b27a73a39ee8",
"text": "There's no reason to keep the California LLC if you don't intend to do business in California. If you'll have sales in California then you'll need to keep it and file taxes accordingly for those sales. You can just as easily form a new LLC in Washington state and even keep the same name (if it's available in Washington, that is). Keeping the California LLC just creates paperwork for whatever regulatory filings California will require for no purpose at all. As for your question about it looking suspicious that you just set up an LLC and then are shutting it down, nobody's going to care, to be honest. As with your situation, plans change, so it isn't really all that unusual. If you're concerned the government will say something, don't.",
"title": ""
},
{
"docid": "8d28aa994d28e9404b96d8ac04f34c79",
"text": "LLC doesn't explain the tax structure. LLCs can file as a partnership (1065) Scorp (1120S) or nothing at all, if it's a SMLLC. (Single Member LLC). I really enjoy business, and helping people get started. If you PM me your contact information, id be more than happy to go over any issues you may have, and help you with your current issue.",
"title": ""
},
{
"docid": "ceefd9186fbe63a649c1b841cd61d71d",
"text": "It makes no difference for tax purposes. If you are 1099, you will pay the same amount of taxes as if you formed a corporation and then paid yourself (essentially you are doing this as a 1099 contractor, just not formally). Legally, I don't know the answer. I would assume you have some legal protections by forming an LLC but practically I think this won't make any difference if you get sued.",
"title": ""
},
{
"docid": "0493d4f827147a296d9f105fe8748726",
"text": "They might be concerned with having to charge sales tax in California if they have a single employee in California, creating a nexus situation with CA. If that's the case, or even if there is some other issue, you might be able to switch from being a W2 employee to being a 1099 independent contractor. There's a host of additional issues this could cause, but it alleviate the nexus problem (if THAT is the problem). Here's a terrible solution you can bring up, but shouldn't do under any circumstances: offer to set up a mailing address in an allowed State, and give your company plausible deniability with regards to your legal residence. Obviously, this is a terrible idea, but exploring that option with your employer would help you suss out what the actual objection is. Ultimately, anything said here about the reason is just conjecture. You need to talk to the decision maker(s) about the real reason behind the denial. Then you can talk through solutions. Also - don't forget that you can get another job. If you are serious about a future with your girlfriend, you should put that relationship ahead of your current employment comfort and security. If you are willing to walk away from your position, you are in a much better situation to negotiate.",
"title": ""
},
{
"docid": "c63354cffacbd0dd596f593b412164d3",
"text": "\"There are very few circumstances where forming an out of state entity is beneficial, but a website is within these circumstances in certain instances. Businesses with no physical operations do not need to care what jurisdiction they are registered in: your home state, a better united state or non-united state. The \"\"limited liability\"\" does it's job. If you are storing inventory or purchasing offices to compliment your online business, you need to register in the state those are located in. An online business is an example of a business with no physical presence. All states want you to register your LLC in the state that you live in, but this is where you need to read that state's laws. What are the consequences of not registering? There might be none, there might be many. In New York, for example, there are no consequences for not registering (and registering in new york - especially the city - is likely the most expensive in the USA). If your LLC needs to represent itself in court, New York provides retroactive foreign registrations and business licenses. So basically, despite saying that you need to pay over $1000 to form your LLC \"\"or else\"\", the reality is that you get the local limited liability protection in courts whenever you actually need it. Check your local state laws, but more times than not it is analogous to asking a barber if you need a haircut, the representative is always going to say \"\"yes, you do\"\" while the law, and associated case law, reveals that you don't. The federal government doesn't care what state your form an LLC or partnership in. Banks don't care what state you form an LLC or partnership in. The United States post office doesn't care. Making an app? The Apple iTunes store doesn't care. So that covers all the applicable authorities you need to consider. Now just go with the cheapest. In the US alone there are 50 states and several territories, all with their own fee structures, so you just have to do your research. Despite conflicting with another answer, Wyoming is still relevant, because it is cheap and has a mature system and laws around business entity formation. http://www.incorp.com has agents in every state, but there are registered agents everywhere, you can even call the Secretary of State in each state for a list of registered agents. Get an employer ID number yourself after the business entity is formed, it takes less than 5 minutes. All of this is also contingent on how your LLC or partnership distributes funds. If your LLC is not acting like a pass through entity to you and your partner,but instead holding its own profits like a corporation, then again none of this matters. You need to form it within the state you live and do foreign registrations in states where it has any physical presence, as it has becomes its own tax person in those states. This is relevant because you said you were trying to do something with a friend.\"",
"title": ""
},
{
"docid": "b642eb854449d0c4e04bb13fc651c04b",
"text": "I am in complete agreement with you. The place i have found with the sort of charts you are looking for is stockcharts.com. To compare the percentage increase of several stocks over a period of 2 market-open days or more, which is quite useful to follow the changes in various stocks… etc., an example: Here the tickers are AA to EEEEE (OTC) and $GOLD / $SILVER for the spot gold / silver price (that isn't really a ticker). It is set to show the last 6 market days (one week+)...the '6' in '6&O'. You can change it in the URL above or change it on the site for the stocks you want... up to 25 in one chart but it gets really hard to tell them apart! By moving the slider just left of the ‘6’ at the bottom right corner of the chart, you can look at 2 days or more. For a specific time period in days, highlight the ‘6’ and type any number of market-open days you want (21 days = about one month, etc.). By setting a time period in days, and moving the entire slider, you can see how your stocks did in the last bull/bear run, as an example. The site has a full how-to, for this and the other types of charts they offer. The only problem is that many OTC stocks are not charted. Save the comparison charts you use regularly in a folder in your browser bookmarks. Blessings. I see the entire needed link isn't in blue... but you need it all.",
"title": ""
}
] |
fiqa
|
4077a94b66af04d414f99862cd53313c
|
Meaning of capital market
|
[
{
"docid": "c9835dfc7ec0b879d7bda361cc073ffa",
"text": "\"Just to clarify, In wikipedia when it says It is defined as a market in which money is provided for periods longer than a year They are referring to the company which is asking for money. So for example the stock market provides money to the issuing company of an IPO, indefinitely. Meaning the company that just went public is provided with money for a period longer than a year. The definition in Investopedia basically says the same thing Wikipedia does it is just phrased slightly different and leaves out the \"\"for periods longer than a year\"\". For example Wikipedia uses the term \"\"business enterprises\"\" and \"\"governments\"\" while Investopedia uses the term private sector and public sector, in this context \"\"business enterprise\"\" is \"\"private sector\"\" and \"\"governments\"\" is \"\"public sector\"\" So in the sense of the length debt is issued yes, money market would be the opposite of a capital market but both markets still offer a place for governments and companies to raise money and both are classified as financial markets.\"",
"title": ""
},
{
"docid": "86002c2881dc80cdb1d691a332a2557e",
"text": "\"1) Are the definitions for capital market from the two sources the same? Yes. They are from two different perspectives. Investopedia is looking at it primarily from the perspective of a trader and they lead-off with the secondary market. This refers to the secondary market: A market in which individuals and institutions trade financial securities. This refers to the primary market: Organizations/institutions in the public and private sectors also often sell securities on the capital markets in order to raise funds. Also, the Investopedia definition leaves much to be desired, but it is supposed to be pithy. So, you are comparing apples and oranges, to some extent. One is an article, as short as it may be, this other one is an entry in a dictionary. 2) What is the opposite of capital market, according to the definition in investopedia? It's not quite about opposites, this is not physics. However, that is not the issue here. The Investopedia definition simply does not mention any other possibilities. The Wikipedia article defines the term more thoroughly. It talks about primary/secondary markets in separate paragraph. 3) According to the Wikipedia's definition, why does stock market belong to capital market, given that stocks can be held less than one year too? If you follow the link in the Wikipedia article to money market: As money became a commodity, the money market is nowadays a component of the financial markets for assets involved in short-term borrowing, lending, buying and selling with original maturities of one year or less. The key here is original maturities of one year or less. Here's my attempt at explaining this: Financial markets are comprised of money markets and capital markets. Money is traded as if it were a commodity on the money markets. Hence, the short-term nature in its definition. They are more focused on the money itself. Capital markets are focused on the money as a means to an end. Companies seek money in these markets for longer terms in order to improve their business in some way. A business may go to the money markets to access money quickly in order to deal with a short-term cash crunch. Meanwhile, a business may go to the capital markets to seek money in order to expand its business. Note that capital markets came first and money markets are a relatively recent development. Also, we are typically speaking about the secondary (capital) market when we are talking about the stock or bond market. In this market, participants are merely trading among themselves. The company that sought money by issuing that stock/bond certificate is out of the picture at that point and has its money. So, Facebook got its money from participants in the primary market: the underwriters. The underwriters then turned around and sold that stock in an IPO to the secondary market. After the IPO, their stock trades on the secondary market where you or I have access to trade it. That money flows between traders. Facebook got its money at the \"\"beginning\"\" of the process.\"",
"title": ""
}
] |
[
{
"docid": "26add6882c3b0f92d535fd869f8d55ee",
"text": "\"Market caps is just the share price, multiplied by the number of shares. It doesn't represent any value (if people decide to pay more or less for the shares, the market cap goes up or down). It does represent what people think the company is worth. NAV sounds very much like book value. It basically says \"\"how much cash would we end up with if we sold everything the company owns, paid back all the debt, and closed down the business? \"\" Since closing down the business is rarely a good idea, this underestimates the value of the business enormously. Take a hairdresser who owns nothing but a pair of scissors, but has a huge number of repeat customers, charges $200 for a haircut, and makes tons of money every year. The business has a huge value, but NAV = price of one pair of used scissors.\"",
"title": ""
},
{
"docid": "22f70c08e60d9f5b1375bca604d8599f",
"text": "It is ALWAYS possible for a company's valuation in the market to be larger than the market it serves, and in fact it is not uncommon. There's valid argument that Uber would be a good example of this, with a market cap of more than $60 billion. Market cap is the total value of all shares outstanding. Keep in mind that what a company's shares trade for is less a reflection of its past (or, to some degree, even present) revenue activity and more of a speculative bet on what the company will do in the future.",
"title": ""
},
{
"docid": "02d1f2933881ff961545fe3768fdee86",
"text": "\"This is the best tl;dr I could make, [original](https://jacobinmag.com/2017/10/finance-capital-shareholders-profit-market) reduced by 81%. (I'm a bot) ***** > The term financialization is used all over the place, but it&#039;s usually defined in a pretty circular way: financialization means &quot;More finance,&quot; more things controlled by finance. > The role of finance in enforcing a certain kind of policy on the state, a certain kind of logic, a certain kind of organization - whether it&#039;s the bond market or whoever else we imagine here - is even more clear-cut. > To me, that&#039;s a narrower, more specific, and maybe more fruitful way of thinking about financialization than just &quot;There&#039;s more finance.\"\" ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/78t6so/the_disruptors_jacobin_magazine_via/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ \"\"Version 1.65, ~235206 tl;drs so far.\"\") | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr \"\"PM's and comments are monitored, constructive feedback is welcome.\"\") | *Top* *keywords*: **logic**^#1 **More**^#2 **finance**^#3 **way**^#4 **corporation**^#5\"",
"title": ""
},
{
"docid": "66e0f00ac4ddfe238ea77d6e34291c88",
"text": "Stock markets are supposed to be about investment and providing capital to companies for operations and research. High frequency trading is only about gaming the market and nothing else. Arguments that this provides more capital or liquidity don't make any sense because the speed of trading is such that listed companies cannot take advantage and only high frequency traders are served.",
"title": ""
},
{
"docid": "6f0cb1b299c8902d05de659c56af9285",
"text": "\"In finance, form is function, and while a reason for a trade could be anything, but since the result of a trade is a change in value, it could be presumed that one seeks to receive a change in value. Stock company There may have been more esoteric examples, but currently, possession of a company (total ownership of its' assets actually) is delineated by percentage or a glorified \"\"banknote\"\" frequently called a \"\"share\"\". Percentage companies are usually sole proprietorship and partnerships, but partnerships can now trade in \"\"units\"\". Share companies are usually corporations. With shares, a company can be divided into almost totally indistinguishable units. This allows for more flexible ownership, so individuals can trade them without having to change the company contract. Considering the ease of trade, it could be assumed that common stock contract provisions were formulated to provide for such an ease. Motivation to trade This could be anything, but it seems those with the largest ownership of common stock have lots of wealth, so it could be assumed that people at least want to own stocks to own wealth. Shorting might be a little harder to reason, but I personally assume that the motivation to trade is still to increase wealth. Social benefit of the stock market Assuming that ownership in a company is socially valuable and that the total value of ownership is proportional to the social value provided, the social benefit of a stock market is that it provided the means to scale ownership through convenience, speed, and reliability.\"",
"title": ""
},
{
"docid": "52fa2db38c2736e1635ef757ef6cea8a",
"text": "\"As someone that works in and with the ag and commodity markets, my understanding, is limited but I hope it helps. Aside from needing an infrastructure built to maintain the vast amounts of data, communication, pricing, banking information, having a closing time for our markets helps to ensure value and fair trade. Capitalism is centralized around creating a fair value for ventures to sell, where prospective buyers opt to purchase or invest. For example, where I attended university, there were many coffee shops close to campus, but only one stayed open all night, and as such had operational cost much higher than other shops, forcing them to charge more for a cup of coffee. While this example is crude, the idea is the same. By maintaining\"\"bank\"\" hours, product or strategies and developments meant to increase projected value are allowed to occur. I imagine that if the markets did not close, my coffee prices would skyrocket for an increased demand, that of which the supply chsin, and farmers, would struggle to meet. The same would be said of grain, salt, oils, etcetera.\"",
"title": ""
},
{
"docid": "26bc7f91b8e382b3c90f5c302e9fee61",
"text": "\"Very often, the word secondary market is used synonymously with the stock market as we all know it. In this case, the primary market would be the \"\"closed\"\" world of VCs, business angels, etc to which stock market investors do not have access, e.g. the securities are not trading on a public stock market.\"",
"title": ""
},
{
"docid": "796e59cd78f34a9c70642f63ecf4b371",
"text": "\"Buying (or selling) a futures contract means that you are entering into a contractual agreement to buy (or sell) the contracted commodity or financial instrument in the contracted amount (the contract size) at the price you have bought (or sold) the contract on the contract expire date (maturity date). It is important to understand that futures contracts are tradeable instruments, meaning that you are free to sell (or buy back) your contract at any time before the expiry date. For example, if you buy 1 \"\"lot\"\" (1 contract) of a gold future on the Comex exchange for the contract month of December 2016, then you entering into a contract to buy 100 ounces (the contract size) of gold at the price at which you buy the contract - not the spot price on the day of expiry when the contract comes to maturity. The December 2016 gold futures contract has an expiry date of 28 December. You are free to trade this contract at any time before its expiry by selling it back to another market participant. If you sell the contract at a price higher than you have purchased it, then you will realise a profit of 100 times the difference between the price you bought the contract and the price you sold the contract, where 100 is the contract size of the gold contract. Similarly, if you sell the contract at a price lower than the price you have purchased it, then you will realise a loss. (Commissions paid will also effect your net profit or loss). If you hold your contract until the expiry date and exercise your contract by taking (or making) delivery, then you are obliged to buy (or sell) 100 ounces of gold at the price at which you bought (or sold) the contract - not the current spot price. So long as your contract is \"\"open\"\" (i.e., prior to the expiry date and so long as you own the contract) you are required to make a \"\"good faith deposit\"\" to show that you intend to honour your contractual obligations. This deposit is usually called \"\"initial margin\"\". Typically, the initial margin amount will be about 2% of the total contract value for the gold contract. So if you buy (or sell) one contract for 100 ounces of gold at, say, $1275 an ounce, then the total contract value will be $127,500 and your deposit requirement would be about $2,500. The initial margin is returned to you when you sell (or buy) back your futures contract, or when you exercise your contract on expiry. In addition to initial margin, you will be required to maintain a second type of margin called \"\"variation margin\"\". The variation margin is the running profit or loss you are showing on your open contract. For the sake of simplicity, lets look only at the case where you have purchased a futures contract. If the futures price is higher than your contract (buy) price, then you are showing a profit on your current position and this profit (the variation margin) will be used to offset your initial margin requirement. Conversely, if the futures price has dropped below your contracted (buy) price, then you will be showing a loss on your open position and this loss (the variation margin) will be added to your initial margin and you will be called to put up more money in order to show good faith that you intend to honour your obligations. Note that neither the initial margin nor the variation margin are accounting items. In other words, these are not postings that are debited or credited to the ledger in your trading account. So in some sense \"\"you don't have to pay anything upfront\"\", but you do need to put up a refundable deposit to show good faith.\"",
"title": ""
},
{
"docid": "8accfe15c696a664fe3605ddf9390c52",
"text": "Most likely economics then. What I'm looking to gain is an understanding of how the market works so that I may take that knowledge and use it to make investments, buy stocks, or possibly start a business. I have a very large amount of time between my studies for my classes and I think it would be a waste to not learn these tools (to give you a reason for my interest in this).",
"title": ""
},
{
"docid": "5871566697910ffc03fc7f607eb651c9",
"text": "\"Market cap is speculative value, M = P * W, where W is stock (or other way of owning) percentage of ownership, P - price of percentage of ownership. This could include \"\"outside of exchange\"\" deals. Some funds could buy ownership percentage directly via partial ownership deal. That ownership is not stock, but fixed-type which has value too. Stock market cap is speculative value, M2 = Q * D, where D is free stocks available freely, Q - price of stock, in other words Quote number (not price of ownership). Many stock types do NOT provide actual percentage of ownership, being just another type of bond with non-fixed coupon and non-fixed price. Though such stocks do not add to company's capitalization after sold to markets, it adds to market capitalization at the moment of selling via initial price.\"",
"title": ""
},
{
"docid": "0390f2d24db9cccefd2200541646e809",
"text": "\"Market cap is the current value of a company's equity and is defined as the current share price multiplied by the number of shares. Please check also \"\"enterprise value\"\" for another definition of a company`s total value (enterprise value = market cap adjusted for net nebt). Regarding the second part of your question: Issuing new shares usually does not affect market cap in a significant way because the newly issued shares often result in lower share prices and dilution of the existing share holders shares.\"",
"title": ""
},
{
"docid": "f8192a8b59e7dc34d8ba75d13043d01f",
"text": "\"So, the term \"\"ready market\"\" simply means that a market exists in which there are legitimate buy/sell offers, meaning there are investors willing to own or trade in the security. A \"\"spot market\"\" means that the security/commodity is being delivered immediately, rather at some predetermined date in the future (hence the term \"\"futures market\"\"). So if you buy oil on the spot market, you'd better be prepared to take immediate delivery, where as when you buy a futures contract, the transaction doesn't happen until some later date. The advantage for futures contract sellers is the ability to lock in the price of what they're selling as a hedge against the possibility of a price drop between now and when they can/will deliver the commodity. In other words, a farmer can pre-sell his grain at a set price for some future delivery date so he can know what he's going to get regardless of the price of grain at the time he delivers it. The downside to the farmer is that if grain prices rise higher than what he sold them for as futures contracts then he loses that additional money. That's the advantage to the buyer, who expects the price to rise so he can resell what he bought from the farmer at a profit. When you trade on margin, you're basically borrowing the money to make a trade, whether you're trading long (buying) or short (selling) on a security. It isn't uncommon for traders to pledge securities they already own as collateral for a margin account, and if they are unable to cover a margin call then those securities can be liquidated or confiscated to satisfy the debt. There still may even be a balance due after such a liquidation if the pledged securities don't cover the margin call. Most of the time you pay a fee (or interest rate) on whatever you borrow on margin, just like taking out a bank loan, so if you're going to trade on margin, you have to include those costs in your calculations as to what you need to earn from your investment to make a profit. When I short trade, I'm selling something I don't own in the expectation I can buy it back later at a lower price and keep the difference. For instance, if I think Apple shares are going to take a steep drop at some point soon, I can short them. So imagine I short-sell 1000 shares of AAPL at the current price of $112. That means my brokerage account is credited with the proceeds of the sale ($112,000), and I now owe my broker 1000 shares of AAPL stock. If the stock drops to $100 and I \"\"cover my short\"\" (buy the shares back to repay the 1000 I borrowed) then I pay $100,000 for them and give them to my broker. I keep the difference ($12,000) between what I sold them for and what I paid to buy them back, minus any brokerage fees and fees the broker may charge me for short-selling. In conclusion, a margin trade is using someone else's money to make a trade, whether it's to buy more or to sell short. A short trade is selling shares I don't even own because I think I can make money in the process. I hope this helps.\"",
"title": ""
},
{
"docid": "5b7df2f8533eb68741d6c2c8395f6fd4",
"text": "The economic utility of markets results from price discovery (and the corresponding capital allocation.) Information which changes the material value of a business can come to light, be processed by sentient beings capable of rational thought, and conveyed to the market in the form of a price in an hour. That can't happen in a millisecond. And don't try to argue about liquidity, because HFT liquidity evaporates in milliseconds in adverse conditions (i.e. when liquidity matters.)",
"title": ""
},
{
"docid": "8586796e8d64cc6ebeb5ef6bc6cc0f27",
"text": "Yes and no, P2P Capital Markets is similar concept but is more geared towards business loans. Community Lend used to offer this service but has stopped.",
"title": ""
},
{
"docid": "55cc730f8d9d75acf4c420503348d4c4",
"text": "HFT allows those with access to leverage sub-second propagation delays in pricing, which screws those without access to HFT systems. And since market-based capital gains are a ponzi scheme, this means that HFT essentially creates a money funnel from those without to those with. I honestly don't see how HFT benefits the market at all - it only benefits those with HFT systems to the detriment of those without. A transaction tax that makes HFT untenable simply removes HFT systems from the equation. The markets stay liquid; stocks stay fungible. The markets ran just fine for almost a century without HFT.",
"title": ""
}
] |
fiqa
|
2c5a958f2efe42987fe096fc52e3a9cb
|
Effective returns on investment in housing vs other financial instruments
|
[
{
"docid": "9446134c4389c8289474a7910980a74b",
"text": "Then at the end, if you decide to cash in your house, you can roll the proceeds into a fancier house to avoid paying taxes on your profit. The problem is that the book was written in 1989. That comment is no longer true; that part of the tax law changed in the 1990's. Also in 1989 the maximum amount that person could put in an IRA was $2,000 and hadn't been raised for almost a decade and wouldn't be raised for another decade. Roth accounts didn't exist; nor did HSA's or 529's. Most people didn't have a 401K. You are asking to compare what options we have today compared to what was available in the late 1980's. For me except, for the years 2001-2005 and 2010-2015, the period from 1988 until now has had flat real estate values. Still the current values haven't returned to the peak in 2005. The score is 11 great years, 17 flat or negative. I know many people who during the 1990's had a zero return on their real estate.",
"title": ""
},
{
"docid": "0574b5b0f9213013d170ade61b82d319",
"text": "Thinking of personal residence as investment is how we got the bubble and crash in housing prices, and the Great Recession. There is no guarantee that a house will appreciate, or even retain value. It's also an extremely illiquid item; selling it, especially if you're seeking a profit, can take a year or more. ' Housing is not guaranteed to appreciate constantly, or at all. Tastes change and renovations rarely pay for themselves. Things wear out and have costs. Neighborhoods change in popularity. Without rental income and the ability to write off some of the costs as business expense, it isn't clear the tax advantage closes that gap, especislly as the advantage is limited to the taxes upon your mortgage interest (by deducting that from AGI). If this is the flavor of speculation you want to engage in, fine, but I've seen people screw themselves over this way and wind up forced to sell a house for a loss. By all means hope your home will be profitable, count it as part of your net wealth... but generally Lynch is wrong here, or at best oversimplified. A house can be an investment (or perhaps more accurately a business), or your home, but -- unless you're renting out the other half of a duplex,which splits the difference -- trying to treat it as both is dangerous accounting.",
"title": ""
},
{
"docid": "9cb8d2713786a67c691618f992ccd148",
"text": "The assumption that house value appreciates 5% per year is unrealistic. Over the very long term, real house prices has stayed approximately constant. A house that is 10 years old today is 11 years old a year after, so this phenomenon of real house prices staying constant applies only to the market as a whole and not to an individual house, unless the individual house is maintained well. One house is an extremely poorly diversified investment. What if the house you buy turns out to have a mold problem? You can lose your investment almost overnight. In contrast to this, it is extremely unlikely that the same could happen on a well-diversified stock portfolio (although it can happen on an individual stock). Thus, if non-leveraged stock portfolio has a nominal return of 8% over the long term, I would demand higher return, say 10%, from a non-leveraged investment to an individual house because of the greater risks. If you have the ability to diversify your real estate investments, a portfolio of diversified real estate investments is safer than a diversified stock portfolio, so I would demand a nominal return of 6% over the long term from such a diversified portfolio. To decide if it's better to buy a house or to live in rental property, you need to gather all of the costs of both options (including the opportunity cost of the capital which you could otherwise invest elsewhere). The real return of buying a house instead of renting it comes from the fact that you do not need to pay rent, not from the fact that house prices tend to appreciate (which they won't do more than inflation over a very long term). For my case, I live in Finland in a special case of near-rental property where you pay 15% of the building cost when moving in (and get the 15% payment back when moving out) and then pay a monthly rent that is lower than the market rent. The property is subsidized by government-provided loans. I have calculated that for my case, living in this property makes more sense than purchasing a market-priced house, but your situation may be different.",
"title": ""
}
] |
[
{
"docid": "b2f2dc9071e084e677614bd296b2ff87",
"text": "It depends on your tax rate. Multiply your marginal rate (including state, if applicable) by your 3.1% to figure out how much you are saving through the deduction, then subtract that from the 3.1% to get the effective rate on the mortgage. For example, if you are in the 28% bracket with no state tax impact from the mortgage, your effective rate on the mortgage is 2.232%. This also assumes you'd still itemize deductions without the mortgage, otherwise, the effective deduction is less. Others have pointed out more behavioral reasons for wanting to pay off the car first, but from a purely financial impact, this is the way to analyze it. This is also your risk-free rate to compare additional investing to (after taking into account taxes on investments).",
"title": ""
},
{
"docid": "033272001584b44ca78b60db0b437eab",
"text": "\"I think your analysis is very clear, it's a sensible approach, and the numbers sound about right to me. A few other things you might want to think about: Tax In some jurisdictions you can deduct mortgage interest against your income tax. I see from your profile that you're in Texas, but I don't know the exact situation there and I think it's better to keep this answer general anyway. If that's the case for you, then you should re-run your numbers taking that into account. You may also be able to make your investments tax-advantaged, for example if you save them in a retirement account. You'll need to apply the appropriate limits for your specific situation and take an educated guess as to how that might change over the next 30 years. Liquidity The money you're not spending on your mortgage is money that's available to you for other spending or emergencies - i.e. even though your default assumption is to invest it and that's a sensible way to compare with the mortgage, you might still place some extra value on having more free access to it. Overpayments Would you have the option to pay extra on the mortgage? That's another way of \"\"investing\"\" your money that gets you a guaranteed return of the mortgage rate. You might want to consider if you'd want to send some of your excess money that way.\"",
"title": ""
},
{
"docid": "7cfd122bd9fab80baa3b6d76c8f2a0c1",
"text": "Lucky you - here where I live that does not work, you put money on the table year 1. Anyhow... You HAVE to account for inflation. THat is where the gain comes from. Not investment increase (value of item), but the rent goes higher, while your mortgage does not (you dont own more moeny in 3 years if you keep paying, but likely you take more rent). Over 5 or 10 years the difference may be significant. Also you pay back the mortgage - that is not free cash flow, but it is a growth in your capital base. Still, 1 flat does not make a lot ;) You need 10+, so go on earning more down payments.",
"title": ""
},
{
"docid": "1d5e53ab2855fd2ab6a6e5876d1781fa",
"text": "There is the opportunity cost. Let's say it cost you $1000 to buy 0.25% discount. Over N number of years that saves you let's say $2000 thus your profit is $1000. What if you took that $1000 and invested it? Would you have more than $2000 after N number of years? Obviously answering this question is not easy but you can make some educated guesses. For example, you can compare the return you'll likely get from investing in CD or treasury bond. A bit more risky is to invest in the stock market but an index fund should be fairly safe and you can easily find the average return over 5 - 10 year period. For example, if your loan is $200,000 at 0.25% per year you'll get $500 in savings. Over 10 years that's $5000 - $1000 to buy the point, you end up with $4000. Using the calculator on this site, I calculated that if you invested in the Dow Jones industrial average between 2007 and 2017 you total return would have been 111% (assuming dividends are reinvested) or you would've had a total of $2110. I'm not sure how accurate those numbers are but it seems likely that buying points is a pretty good investment if you stay in the house for 10 years or more.",
"title": ""
},
{
"docid": "e725542c1d026fca1da7d80aedc71bca",
"text": "I plotted your figures in my Buy or Rent app. It compares the equity of buying or renting by calculating what your mortgage payment would be and comparing the alternative case if you rented and invested an equivalent amount. Clearly for the amounts you specified it is better to buy, but if you change the amounts and interest or property appreciation you can see the equity effects.",
"title": ""
},
{
"docid": "6470741c89540d9d5adea1af37740f9b",
"text": "\"I don't follow the numbers in your example, but the fundamental question you're asking is, \"\"If I can borrow money for a low cost, and if I think I can invest it and receive returns greater than that cost, should I do it?\"\" It doesn't matter where that money comes from, a mortgage that's bigger than it needs to be, a credit card teaser rate, or a margin line from your stock broker. The answer is \"\"maybe\"\" - depending on the certainty you have about the returns you'd receive on your investments and your tolerance for risk. Only you can answer that question for yourself. If you make less than your mortgage rates on the investments, you'll wish you hadn't! As an aside, I don't know anything about Belgian tax law, but in US tax law, your deductions can be limited to the actual value of the home. Your law may be similar and thus increase the effective mortgage interest rate.\"",
"title": ""
},
{
"docid": "74b3f1e58bda2b062d3ad816837fd262",
"text": "Certainly, paying off the mortgage is better than doing nothing with the money. But it gets interesting when you consider keeping the mortgage and investing the money. If the mortgage rate is 5% and you expect >5% returns from stocks or some other investment, then it might make sense to seek those higher returns. If you expect the same 5% return from stocks, keeping the mortgage and investing the money can still be more tax-efficient. Assuming a marginal tax rate of 30%, the real cost of mortgage interest (in terms of post-tax money) is 3.5%*. If your investment results in long-term capital gains taxed at 15%, the real rate of growth of your post-tax money would be 4.25%. So in post-tax terms, your rate of gain is greater than your rate of loss. On the other hand, paying off the mortgage is safer than investing borrowed money, so doing so might be more appropriate for the risk-averse. * I'm oversimplifying a bit by assuming the deduction doesn't change your marginal tax rate.",
"title": ""
},
{
"docid": "71146df668f12b055a8d5912ca96a59b",
"text": "It depends on the relative rates and relative risk. Ignore the deduction. You want to compare the rates of the investment and the mortgage, either both after-tax or both before-tax. Your mortgage costs you 5% (a bit less after-tax), and prepayments effectively yield a guaranteed 5% return. If you can earn more than that in your IRA with a risk-free investment, invest. If you can earn more than that in your IRA while taking on a degree of risk that you are comfortable with, invest. If not, pay down your mortgage. See this article: Mortgage Prepayment as Investment: For example, the borrower with a 6% mortgage who has excess cash flow would do well to use it to pay down the mortgage balance if the alternative is investment in assets that yield 2%. But if two years down the road the same assets yield 7%, the borrower can stop allocating excess cash flow to the mortgage and start accumulating financial assets. Note that he's not comparing the relative risk of the investments. Paying down your mortgage has a guaranteed return. You're talking about CDs, which are low risk, so your comparison is simple. If your alternative investment is stocks, then there's an element of risk that it won't earn enough to outpace the mortgage cost. Update: hopefully this example makes it clearer: For example, lets compare investing $100,000 in repayment of a 6% mortgage with investing it in a fund that pays 5% before-tax, and taxes are deferred for 10 years. For the mortgage, we enter 10 years for the period, 3.6% (if that is the applicable rate) for the after tax return, $100,000 as the present value, and we obtain a future value of $142,429. For the alternative investment, we do the same except we enter 5% as the return, and we get a future value of $162,889. However, taxes are now due on the $62,889 of interest, which reduces the future value to $137,734. The mortgage repayment does a little better. So if your marginal tax rate is 30%, you have $10k extra cash to do something with right now, mortgage rate is 5%, IRA CD APY is 1%, and assuming retirement in 30 years: If you want to plug it into a spreadsheet, the formula to use is (substitute your own values): (Note the minus sign before the cash amount.) Make sure you use after tax rates for both so that you're comparing apples to apples. Then multiply your IRA amount by (1-taxrate) to get the value after you pay future taxes on IRA withdrawals.",
"title": ""
},
{
"docid": "1021105f9b691a94f55193b46aa9d692",
"text": "Lets do the math, using your numbers. We start off with $100K, a desire to buy a house and invest, and 30 years to do it. Scenario #1 We buy a house for $100K mortgage at 5% interest over 30 years. Monthly payment ends up being $536.82/month. We then take the $100K we still have and invest it in stocks, earning an average of 9% annually and paying 15% taxes. Scenario #2 We buy a house for our $100K cash, and then, every month, we invest the $536.82 we would have paid for the mortgage. Again, investments make 9% annually long term, and we pay 15% taxes. How would it look in 30 years? Scenario #1 Results: 30 years later we would have a paid off house and $912,895 in investments Scenario #2 Results: 30 years later we would have a paid off house and $712,745 in investments Conclusion: NOT paying off your mortgage early results in an additional $200,120 in networth after 30 years. That's 28% more. Therefore, not paying off your mortgage is the superior scenario. Caveats/Notes/Things to consider Play with the numbers yourself:",
"title": ""
},
{
"docid": "516c2d122e4ea621f52e35fbf8647cce",
"text": "My figuring (and I'm not an expert here, but I think this is basic math) is: Let's say you had a windfall of $1000 extra dollars today that you could either: a. Use to pay down your mortgage b. Put into some kind of equity mutual fund Maybe you have 20 years left on your mortgage. So your return on investment with choice A is whatever your mortgage interest rate is, compounded monthly or daily. Interest rates are low now, but who knows what they'll be in the future. On the other hand, you should get more return out of an equity mutual fund investment, so I'd say B is your better choice, except: But that's also the other reason why I favour B over A. Let's say you lose your job a year from now. Your bank won't be too lenient with you paying your mortgage, even if you paid it off quicker than originally agreed. But if that money is in mutual funds, you have access to it, and it buys you time when you really need it. People might say that you can always get a second mortgage to get the equity out of it, but try getting a second mortgage when you've just lost your job.",
"title": ""
},
{
"docid": "f18fc365689652e6ace8938a416fef9d",
"text": "\"In most cases of purchases the general advice is to save the money and then make the purchase. Paying cash for a car is recommended over paying credit for example. For a house, getting a mortgage is recommended. Says who? These rules of thumb hide the actual equations behind them; they should be understood as heuristics, not as the word of god. The Basics The basic idea is, if you pay for something upfront, you pay some fixed cost, call it X, where as with a loan you need to pay interest payments on X, say %I, as well as at least fixed payments P at timeframe T, resulting in some long term payment IX. Your Assumption To some, this obviously means upfront payments are better than interest payments, as by the time the loan is paid off, you will have paid more than X. This is a good rule of thumb (like Newtonian's equations) at low X, high %I, and moderate T, because all of that serves to make the end result IX > X. Counter Examples Are there circumstances where the opposite is true? Here's a simple but contrived one: you don't pay the full timeframe. Suppose you die, declare bankruptcy, move to another country, or any other event that reduces T in such a way that XI is less than X. This actually is a big concern for older debtors or those who contract terminal illnesses, as you can't squeeze those payments out of the dead. This is basically manipulating the whole concept. Let's try a less contrived example: suppose you can get a return higher than %I. I can currently get a loan at around %3 due to good credit, but index funds in the long run tend to pay %4-%5. Taking a loan and investing it may pay off, and would be better than waiting to have the money, even in some less than ideal markets. This is basically manipulating T to deal with IX. Even less contrived and very real world, suppose you know your cash flow will increase soon; a promotion, an inheritance, a good market return. It may be better to take the loan now, enjoy whatever product you get until that cash flows in, then pay it all off at once; the enjoyment of the product will make the slight additional interest worth it. This isn't so much manipulating any part of the equation, it's just you have different goals than the loan. Home Loan Analysis For long term mortgages, X is high, usually higher than a few years pay; it would be a large burden to save that money for most people. %I is also typically fairly low; P is directly related to %I, and the bank can't afford to raise payments too much, or people will rent instead, meaning P needs to be affordable. This does not apply in very expensive areas, which is why cities are often mostly renters. T is also extremely long; usually mortgages are for 15 or 30 years, though 10 year options are available. Even with these shorter terms, it's basically the longest term loan a human will ever take. This long term means there is plenty of time for the market to have a fluctuation and raise the investments current price above the remainder of the loan and interest accrued, allowing you to sell at a profit. As well, consider the opportunity cost; while saving money for a home, you still need a place to live. This additional cost is comparable to mortgage payments, meaning X has a hidden constant; the cost of renting. Often X + R > IX, making taking a loan a better choice than saving up. Conclusion \"\"The general advice\"\" is a good heuristic for most common human payments; we have relatively long life spans compared to most common payments, and the opportunity cost of not having most goods is relatively low. However, certain things have a high opportunity cost; if you can't talk to HR, you can't apply for jobs (phone), if you can't get to work, you can't eat (car), and if you have no where to live, it's hard to keep a job (house). For things with high opportunity costs, the interest payments are more than worth it.\"",
"title": ""
},
{
"docid": "ce932128386e9ac1e3bdbe0c347a0ad7",
"text": "If annualized rate of return is what you are looking for, using a tool would make it a lot easier. In the post I've also explained how to use the spreadsheet. Hope this helps.",
"title": ""
},
{
"docid": "c517ef7ba52c41d23492de2239036a19",
"text": "Investing in property hoping that it will gain value is usually foolish; real estate increases about 3% a year in the long run. Investing in property to rent is labor-intensive; you have to deal with tenants, and also have to take care of repairs. It's essentially getting a second job. I don't know what the word pension implies in Europe; in America, it's an employer-funded retirement plan separate from personally funded retirement. I'd invest in personally funded retirement well before buying real estate to rent, and diversify my money in that retirement plan widely if I was within 10-20 years of retirement.",
"title": ""
},
{
"docid": "50150ac90b2de391daae4d1c1855ce12",
"text": "\"A home is an investment, but the value it returns isn't primarily financial ($$) - they are consumption (a place to live). This gives it different characteristics than other investments (e.g. increasing the amount invested by buying a more expensive home doesn't do much to assist your financial well-being and future income, and isn't necessarily the \"\"responsible\"\" thing to do). You may get some capital gains, typically in line with inflation, sometimes less, sometimes more, but those aren't the most reliable, and it's difficult to realize them (it involves selling your house and moving). Its main value as a hedge is a hedge against rising rent. But if you're still working full-time and can expect cost-of-living increases, that hedge may not be as valuable to you as it would to, say, someone living on a fixed income. But as for treating it as a \"\"low-risk investment\"\"? That's very problematic. Real low-risk investments are things like government bonds, where you can't lose principal. Unless you're going to live into your house until the day you die, the real estate crash should have disabused you of any notion that housing values never go down. Rather, your house is a single, indivisible, undiversified, illiquid investment. Imagine, if you will, going to your brokerage and borrowing a hundred thousand dollars or more on margin to invest in a single real estate investment trust... then take away whatever diversification the trust offered by holding multiple properties. Also, you can't sell any of it until you move away, and the transaction fee will take something like 3%. Still sound \"\"safe\"\"? Moreover, it's exactly the wrong kind of risk. Your house's value is tied to what people are willing to pay for housing where your house is, which is usually subject to the whims of the local economy. This means that in a recession and housing bust in the local economy, you can lose your job and have your mortgage go underwater at the same time. It totally makes sense to treat your house as an investment to some extent, and it makes double sense for a financial adviser to consider it as part of your investment recommendations. \"\"Safety\"\" is not the way you should be thinking of it, though.\"",
"title": ""
},
{
"docid": "104851bebfcd64861002248134924b53",
"text": "The finance sector is comprised of such enterprises as banks, investment funds, insurance companies and real estate. It is traditionally contrasted with what has been called the 'real economy' because funds created and utilized in this sector produce neither goods, services or fixed capital. The unproductive nature of transactions can easily be seen in such things as real estate. When a company undertakes to build a house or whatever its input goes directly to the labor and goods necessary for such a project. At its worst the financial sector mobilizes funds not just for production but for simple acquisition. Should a company raise the funds to buy an already existing building or the mortgage on same quite obviously nothing is produced. Same building on day one as when it was owned by another. That, of course, is an extreme example as are corporate takeovers via private equity. In that case the efforts of the financial sector are not just non-productive but are often in fact ''anti-productive'' as they destroy or prevent the use of real factors of production. This 'anti-productive' action was demonstrated on a massive global scale during the last financial crisis. The basically parasitic nature of the financial sector isn't always so blatant. There are some that argue that its 'services' can be valuable to the real economy. Perhaps, but that has to be determined on a case by case examination **and** while keeping the idea ''is there a better way to do this** in one's mind.",
"title": ""
}
] |
fiqa
|
7c9fd2412551a474223c579549055bb2
|
Apartment lease renewal - is this rate increase normal?
|
[
{
"docid": "a2b34353f037de897b420fd6ac257afe",
"text": "\"Should you negotiate? Yes, what harm can it possibly do? The landlord is unlikely to come back and say \"\"Because you tried to negotiate, I'm putting the rent up by 10% instead.\"\", or to evict a paying tenant merely because they tried to negotiate. Is the proposed rent increase \"\"normal\"\"? Yes. Landlords will generally try to get as high a rent as they can.\"",
"title": ""
},
{
"docid": "161d32c11caf8d199a69bc1f6f0a40e0",
"text": "There could be a number of reasons for a rent increase. The only information I can offer is how I calculate what rent I will charge. The minimum I would ever charge per unit (Mortgage payment + Water) / Number of units This number is the minimum because it's what I need to keep afloat. Keep in mind these are ballpark numbers The target rent ((Mortgage payment + Water) / Number of units)*1.60 I mark up the price 60% for a few reasons. First, the building needs a repair budget. That money has to come from somewhere. Second, I want to put away for my next acquisition and third I want to make a profit. These get me close to my rental price but ultimately it depends on your location and the comparables in the area. If my target rent is 600 a month but the neighbors are getting 700-800 for the same exact unit I might ask more. It also depends on the types of units. Some of my buildings, all of the units are identical. Other buildings half of the units are bigger than the other half so clearly I wouldn't charge a equal amount for them. Ultimately you have to remember we're not in the game to lose money. I know what my renters are going to pay before I even put an offer in on a building because that's how I stay in business. It might go up over the years but it will always outpace my expenses for that property.",
"title": ""
},
{
"docid": "c548c8f369622eaa6e0093a5f0b5d4ea",
"text": "\"There has been almost no inflation during 2014-2015. do you mean rental price inflation or overall inflation? Housing price and by extension rental price inflation is usually much higher than the \"\"basket of goods\"\" CPI or RPI numbers. The low levels of these two indicators are mostly caused by technology, oil and food price deflation (at least in the US, UK, and Europe) outweighing other inflation. My slightly biased (I've just moved to a new rental property) and entirely London-centric empirical evidence suggests that 5% is quite a low figure for house price inflation and therefore also rental inflation. Your landlord will also try to get as much for the property as he can so look around for similar properties and work out what a market rate might be (within tolerances of course) and negotiate based on that. For the new asked price I could get a similar apartment in similar condos with gym and pool (this one doesn't have anything) or in a way better area (closer to supermarkets, restaurants, etc). suggests that you have already started on this and that the landlord is trying to artificially inflate rents. If you can afford the extra 5% and these similar but better appointed places are at that price why not move? It sounds like the reason that you are looking to stay on in this apartment is either familiarity or loyalty to the landlord so it may be time to benefit from a move.\"",
"title": ""
},
{
"docid": "21e37b58efe357aa7b863ccf54074853",
"text": "Yes, automatic rate increases are typical in my experience (and I think it's very greedy, when it's based on nothing except that your lease is up for renewal, which is the situation you are describing). Yes, you should negotiate. I've had success going to the apartment manager and having this conversation: Make these points: Conclude: I am not open to a rate increase, though I will sign a renewal at the same rate I am paying now. This conversation makes me very uncomfortable, but I try not to show it. I was able to negotiate a lease renewal at the same rate this way (in a large complex in Sacramento, CA). If you are talking to a manager and not an owner, they will probably have to delay responding until they can check with the owner. The key really is that they want to keep units rented, especially when units are staying empty. Empty units are lost income for the owner. It is the other empty units that are staying empty that are the huge point in your favor.",
"title": ""
},
{
"docid": "722fd08d51966a10d0d4d086565ddc80",
"text": "What happened in the past, the rent you paid last year, is in the past. You shouldn't be concerned with the percentage increase, but with whether you want that apartment at the new rent for the coming year. If your rent had been half what it was last year and the new proposal were to double it, you would be outraged at the doubling, but really you got a steal last year. Going forward, you have three options. You can accept the new rent, you can decline it and move, or you can try to negotiate a better rate. It sounds like the landlord is hoping you will find the hassle of moving enough to accept the new rent. If you do negotiate, you should know what your preferred alternative is, which you should use to set your walkaway point. If you make a counterproposal, it is often useful to show what a comparable apartment is renting for to justify the rent you suggest.",
"title": ""
},
{
"docid": "27ea2555942f63ee9fc3405229350cb3",
"text": "\"If it is true that for the same price, you could get a better place (or that for a lower price you could get an equivalent place), you should do some soul-searching to decide what monetary value you would place on the hassle of moving to such an alternative. You should then negotiate aggressively for a rent that is no more than the rent of the alternative place plus your hassle costs, and if the landlord does not meet your price, you should refuse to renew your lease, and instead move out to an alternative. (Of course, you might also want to double-check your research to ensure you really can get such a good alternative, and that your new landlords won't try a similar bait-and-switch and force you to move again in a year.) Barring local ordinances such as rent control laws, I don't think it's worth it to worry about whether the increase is \"\"normal\"\". If you can get a better deal somewhere else, then what your landlords are asking is too much. If you have a good relationship with them on a personal level you may be able to tell them this in a nice way and thus get them to make a more reasonable offer. Otherwise, the landlords will learn that their expectations are unreasonable when all their tenants move out to cheaper places.\"",
"title": ""
},
{
"docid": "856face9300fed062ca0ae3aed648da1",
"text": "I think people are missing the most obvious thing. The yearly rate increases are just part of the landlord schtick and it is good business for them. My grandmother owned several large apartment complexes. She would raise rates for any resident that had been there between 1-5 years by 5-7% a year. Even when she had vacancies and property values didn't go up. For the following reasons: So yes it is not only normal but just part of the business. If there are better apartments for less money I suggest you move there. Soon those other apartments will even out and if they are better they will be much more. So if you see a gap take advantage of it. If you would rather stay, then simply say you will not pay the increase. There is no use arguing about why. The landlord will either be OK with it or say no. Probably the biggest factors include whether you will tell other tenants (or their perception if you would) and how good of a tenant/risk they feel you are.",
"title": ""
},
{
"docid": "7b34c71355beffb1257541b77c01a297",
"text": "Absolutely yes. Just because a lease provides an option for renewal does not mean that a tenant cannot try to re-negotiate for better terms. You should always negotiate the rent. And start this conversation as soon as possible. Offer to pay three months’ rent in advance (of course, if you have enough means).",
"title": ""
}
] |
[
{
"docid": "5143aeb0b0a00bf3eeba177754bca3aa",
"text": "\"Without the specifics of the contract, as well as the specifics of the country/state/city you're moving to, it's hard to say what's legal. But this also isn't law.se, so I'll answer this from the point of view of personal finance, and what you can/should do as next steps. Whenever paying an application fee or a deposit, you need to ensure that you have in writing exactly what you're applying for or putting a deposit in for. Whether this is an apartment, a car, or a loan, before any money changes hands, you need to get in writing exactly what you're putting that money to. So for a car, you'd want to have the complete specifications - make, model, year, color, extra packages, and any relevant loan information if applicable. You wouldn't just hand a dealer $2000 for \"\"a Toyota Camry\"\", you'd make sure it was specified which one, in writing, as well as the total you're expecting to pay. Same for an apartment: you should have, in writing (email is fine) the specific unit you are putting a deposit for, and the specific rate you'll be paying, and the length of time the lease is for. This is to avoid a common tactic: bait and switch, which is what it looks like you've run into. A company puts forth a \"\"nice\"\" model, everything looks good, you get far enough in that it seems like you're locked in - and then it turns out you're really getting a less nice model that's not as ideal as whatever you signed up for. Now if you want to get what you originally signed up for you need to pay extra - presumably \"\"something was wrong in the original ad\"\", or something like that. And all you can hear in the background is Darth Vader... \"\"I am altering the deal. Pray I don't alter it any further.\"\" So; what do you do when you've been bait-and-switched? The best thing to do is typically to walk away. Try to get your application fee back; you may or may not be able to, but it's worth a shot, and even if you cannot, walk away anyway. Someone who is going to bait-and-switch on you is probably not going to be a good landlord; my guess is that rent is going to keep going up beyond the level of the market, and you probably can kiss your security deposit goodbye. Second, if walking away isn't practical for whatever reason, you can find out what the local laws are. Some locations (though very few, sadly) require advertised prices to be accurate; particularly the fact that they re-advertised the unit again for the same rate suggests they are falling afoul of that. You can ask around, search the internet, or best yet talk to a lawyer who specializes in this sort of thing; some of them will be willing to at least answer a few questions for free (hoping to score your business for an easy, profitable lawsuit). Be aware that it's not exactly a good situation to be in, to be suing your landlord; second only to suing your employer, in my opinion, in terms of bad things to do while hoping to continue the relationship. Find an alternative as soon as you can if you go this route. In the future, pay a lot of attention to detail when making application fees. Often the application fee is needed before you get into too much detail - but pick a location that has reasonable application fees, and no extras. For example, in my area, it's typical to pay a $25 application fee, nonrefundable, to do the credit check and background check, and a refundable $100-$200 deposit to hold the unit while doing that; a place that asks for a non-refundable deposit is somewhere I'd simply not apply at all.\"",
"title": ""
},
{
"docid": "6a811ba05b575681ba2d20adffe6a2fc",
"text": "This is something you are going to have to work out with the leasing company because your goal is to get them to make an exception to their normal rules. I'm a little surprised they wouldn't take 6 months pre-payment, plus documentation of your savings. One option might be to cash in the bonds (since you said they are mature), deposit them in a savings account, and show them your account balance. That documentation of enough to pay for the year, plus an offer to pay 6 months in advance would be pretty compelling. Ask the property manage if that's sufficient. And if the lease is for one year and you're willing to pay the entire year in advance, I can't see how they would possibly object. If your employment prospects are good (show them your resume and explain why you are moving and what jobs you are seeking) a smart property manager would realize you'll be an excellent, low-risk tenant and will make an effort to convince the parent company that you should live there.",
"title": ""
},
{
"docid": "07c4b462447a984829ccd4f74b9b84a2",
"text": "\"Everyone buys different kinds of goods. For example I don't smoke tobacco so I'm not affected by increased tobacco prices. I also don't have a car so I'm not affected by the reduced oil prices either. But my landlord increased the monthly fee of the apartment so my cost of living per month suddenly increased more than 10% relative to the same month a year before. This is well known, also by the statistical offices. As you say, the niveau of the rent is not only time- but also location specific, so there are separate rent indices (German: Mietspiegel). But also for the general consumer price indices at least in my country (Germany) statistics are kept for different categories of things as well. So, the German Federal Statistical Office (Statistisches Bundesamt) not only publishes \"\"the\"\" consumer price index for the standard consumer basket, but also consumer price indices for oil, gas, rents, food, public transport, ... Nowadays, they even have a web site where you can put in your personal weighting for these topics and look at \"\"your\"\" inflation: https://www.destatis.de/DE/Service/InteraktiveAnwendungen/InflationsrechnerSVG.svg Maybe something similar is available for your country?\"",
"title": ""
},
{
"docid": "316aaea6c0c834ddb9550880f0674583",
"text": "In any case, for sure, the wages went up... a lot... and most likely wage increases are most of the 30% increase in costs. As for consumers paying more, maybe they will get better quality, maybe they will be able to afford it now with extra income and maybe they will not raise the prices as they already have huge margins, people have choices and the real estate prices is only based on relative price of neighboring houses, used or new.",
"title": ""
},
{
"docid": "84b029911c2abe552de6f08d3481d437",
"text": "Funny all the landlord forums are all giddy about raising rents to eat up that extra income, but Im sure you know better being all what is it you do again arm chair economist? https://www.forbes.com/sites/modeledbehavior/2015/08/23/the-minimum-wage-in-cities/#11e65f016153 http://www.latimes.com/opinion/opinion-la/la-ol-minimum-wage-housing-20150327-story.html http://www.phillyvoice.com/does-raising-minimum-wage-raise-rents/ https://www.ezlandlordforms.com/articles/news/556/how-does-raising-the-minimum-wage-affect-rents/",
"title": ""
},
{
"docid": "b3e94cc42dcf1f9e62f72f804069018e",
"text": "Seems like a bad deal to me. But before I get to that, a couple of points on your expenses: Onward. You value a property by calculating its CAP rate. This is what you're calculating, except it does NOT include interest like you did -- that's a loan to you, and has no bearing on whether the unit itself is a good investment. It also includes estimations of variable expenses like maintenance and lack of income from vacancies. People argue vociferously on exactly how much to calculate for those. Maintenance will vary by age of the building and how damaging your tenets are. Vacancies vary based on how desirable the location is, how well you've done the maintenance, and how low the rent is. Doing the math based on your numbers, with just the fixed expenses: 8400 rent - 2400 management fee - 100 insurance = 5900/year income. 5900/150000 = 0.0393 = 3.9% CAP rate. And that's not even counting the variable expenses yet! So, what's a good CAP rate? Generally, 10% CAP rate is a good deal, and higher is a great deal. Below that you have to start to get cautious. Some places are worth a lower rate, for instance when the property is new and in a good location. You can do 8% on these. Below 6% CAP rate is usually a really bad investment. So, unless you're confident you can at least double the rent right off the bat, this is a terrible deal. Another way to think about it You're looking to buy with your finances in just about the best position possible -- a huge down payment and really low interest. Plus you haven't accounted for maintenance, taxes (if any), and vacancies. And still you'd make only a measly 1.2% profit? Would you buy a bond that only pays out 1.2%? No? What about a bond that only pays 1.2%, but also from time to time can force YOU to pay into IT a much larger amount every month?",
"title": ""
},
{
"docid": "b91d9fa21e5371a5211d87591ab49f95",
"text": "\"Average rent rates will typically rise and fall, and are market-dependent just like real estate. In the short term, a collapse in housing like the one we saw in 2008 can induce a spike in rental costs as people walk away or get foreclosed on, and move back into apartments. That then tends to self-adjust, as the people who had been in the apartments find a deal on a foreclosed house and move out. However, one thing I've seen to be near-constant in the apartment business is that a landlord will offer you a deal to get in, then increase the rent on you from year to year until you get fed up and move. This is a big reason I didn't have the same address for two years in a row until I bought my house. The landlord is basically betting that you won't want to deal with the hassle of moving, and so will pay the higher rent rate, even if, when you do the math, it makes more sense to move even to maintain the same rent rate. Eventually though, you do get fed up, look around, find the next good deal, and move, \"\"resetting\"\" your rent rate. I have never, not once in my life, seen or heard of any landlord offering a drop in rent as a \"\"loyalty\"\" move to keep you from going somewhere else. It's considered part of the game; retailers will price match, but most service providers (landlords, but also utility providers) expect a large amount of \"\"churn\"\" in their customer base as people shop around. It averages out.\"",
"title": ""
},
{
"docid": "f7aef2095e5f82842bc4a94843166f5c",
"text": "IMO this means one of two things: the bank thinks that 3 months from now, the interest rates it plans to offer will be lower than 1%; after 180 days, it will go up again. the bank needs more short-term cash than mid-term cash right now, so it offers you a better deal. In either case, it is unlikely that your 90 day intrest rate will be available 90 days from now, and most likely it will be below 1% unless the bank yet again needs short-term cash from its customers. With those proposed rates, I would go for half in 90 days and half in 270 days. Disclaimer: am no economist, just spent a lot of time the past year fretting over the same kind of questions. Feel free to tell me where I'm wrong if you think I am.",
"title": ""
},
{
"docid": "5462c5440487993203311af78d85f3d5",
"text": "\"We change it every so often to reduce fraud. If you're absolutely sure you didn't just send money to a scammer impersonating a landlord, this has nothing to do with fraud-- they're playing a game with you. By changing the account number frequently, it makes it more likely you make a mistake in entering the payment account. When they come back to you a few days past due saying \"\"we never received your rent,\"\" you'll eventually realize it got sent to the wrong account. Now you owe them late fees, and there's really nothing you can do about it-- you did not in fact pay them on time; you sent it to the wrong account! It's an easy way for them to collect an additional few thousand dollars a year. Anytime a small business or landlord says they have to do something \"\"weird\"\" to reduce fraud, chances are it's a pretense to you getting hosed in some way.\"",
"title": ""
},
{
"docid": "309c10f2a6884e26bd4a929c0c333744",
"text": "\"Things I would specifically draw your attention to: the contract typically allows for an \"\"option\"\" to purchase; it does not typically compel purchase, although this is seen the purchase price is negotiated before anything gets signed the option to buy is typically available to the renter for the period of the lease contract (ie., if it's a 12 month contract the renter can opt to buy at any time in that 12 months) the amount of rent paid over time that will be applied to the purchase price is negotiated up-front before anything gets signed rent is paid at a slight premium (as Joe notes, if the rent should be $1000 per month, expect to pay $1200 per month) if the renter walks away they walk away empty handed; they do not get back the premium Having said all that - it's a contract negotiated between renter and seller and all of this is negotiable. See also, ehow for a good overview.\"",
"title": ""
},
{
"docid": "cb6f6bc4fa9e00b4ee5c1c7be3883648",
"text": "\"Thanks to the joint lease, I guess you're still contractually on the hook for the remainder of the rent. Did the apartment owners actually contact you before sending the debt collectors after you? As you do technically owe the money, they can sue you if you don't pay, so it's not \"\"just\"\" on your credit report. That said, if they haven't contacted you before sending the goons in, I'd try to negotiate the collection fee - 40% sounds a tad excessive to me.\"",
"title": ""
},
{
"docid": "4052d02b9a2b396dffce36705c050f28",
"text": "\"Basically, you have purchased 25% of the condo for $40,000, and your parents bought 75% of the condo for another $115,000. We imagine for a moment that it wasn't you who lived in the condo, but some unrelated person paying rent. You are paying $7,500 a year for tax and fees, plus $6,000 a year, so there is $13,500 leaving your wallet. If $15,500 a year was a reasonable rent, then the tax and fee would be paid out of that, there would be $8,000 left, of which you would get 25% = $2,000. If you were officially \"\"renting\"\" it, you would pay $15,500 a year, and get $2,000 back, again $13,500 leaving your wallet. So you are in exact the same situation financially as you would be if you paid $15,500 rent. Question: Is $15,500 a year or $1,290 a month an appropriate rent for your condo? If a neighbour is renting his condo, is he or she paying $1,290 or more or less? Could you rent the same place for the same money? If $1,290 is the correct rent then you are fine. If the rent should be lower, then you are overpaying. If the rent should be higher, then you are making money. Keep in mind that you will also be winning if rents go up in the future.\"",
"title": ""
},
{
"docid": "20ae132d01516ae7c708aed732a616e1",
"text": "Surely the yield should be Yield = (Rent - Costs) / Downpayment ? As you want the yield relative to your capital not to the property value. As for the opportunity cost part you could look at the risk free rate of return you could obtain, either through government bonds or bank accounts with some sort of government guarantee (not sure what practical terms are for this in Finland). The management fee is almost 30% of your rent, what does this cover? Is it possible to manage the property yourself, as this would give you a much larger cushion between rent and expenses.",
"title": ""
},
{
"docid": "c5d854e67e9fba192599f0a95bde7d7e",
"text": "It's so that your total mortgage payment stays the same every month. Obviously, the interest due each month decreases over time, as part of the principal is paid off each month, and so if the proportion of interest and principal repayments were to stay the same then your first payment would be very large and your last payment would be almost nothing.",
"title": ""
},
{
"docid": "5ce9dc303f7b78f4535fe5dc72d28a7d",
"text": "It is a fool's errand to attribute abnormal option volume or volatility to any meaningful move in the stock. One side of the chain is frequently more expensive than the other. The relationship between historical volatility and implied volatility is dubious at best, and also a big area of study.",
"title": ""
}
] |
fiqa
|
845fa32bbce22effec7c36ff5a0e15ce
|
California resident, Delaware C-Corp - Taxes for 1-person software freelancer?
|
[
{
"docid": "d383f879b0dd06a28fdc794ad67eb32d",
"text": "Supposedly this also means that I am free from having to pay California corporate taxes? Not in the slightest. Since you (the corporate employee) reside in CA - the corporation is doing business in CA and is liable for CA taxes. Or, does this mean I am required to pay both CA taxes and Delaware fees? (In this case, minimal, just a paid agent from incorporate.com) I believe DE actually does have corporate taxes, check it out. But the bottom line is yes, you're liable for both CA and DE costs of doing corporate business (income taxes, registered agents, CA corp fee, etc). Is there any benefit at all for me to be a Delaware C-Corp or should I dissolve and start over. Or just re-incorporate as California LLC Unless you intend to go public anytime soon or raise money from VCs/investors - there's no benefit whatsoever in incorporating in DE. You should seek a legal advice with an attorney, of course, since benefits are legal issues (usually related to choosing jurisdiction for litigation etc). If you're a one-person freelancer, doing C-Corp was not the best decision as well. Tax-wise you'd be much better off with a S-Corp, or a LLC - both pass-through and have no (Federal) entity-level taxes. Corporate rates are generally higher than individual rates, and less deductions can be taken. In California, check with a CPA/EA licensed in the State, since both S-Corp and LLC would be taxed, and taxed differently.",
"title": ""
}
] |
[
{
"docid": "1f7667a2760ae4f21cf8be02f371e524",
"text": "\"Its not for US citizens - its for US residents. If the US considers you as a tax resident - you'll be treated the same as a US citizen, regardless of your immigration status. The question is very unclear, since it is not mentioned whether your US sourced income \"\"from the Internet\"\" is sales in the US, sales on-line, services you provide, investments, or what else. All these are treated differently. For some kinds of US-sourced income you should have paid taxes in the US already, regardless of where you physically reside. For others - not. In any case, if you become US tax resident, you'll be taxed on your worldwide income, not only the $10K deposited in the US bank account. ALL of your income, everywhere in the world, must be declared to the US government and will be taxed. You should seek professional advice, before you move to the US, in order to understand your responsibilities, liabilities and rights. I suggest looking for a EA/CPA licensed in California and experienced with taxation of foreigners (look for someone in the SF or LA metropolitan areas). Keep in mind that there may be a tax treaty between the US and your home country that may affect your Federal (but not California) taxes.\"",
"title": ""
},
{
"docid": "272c1189f6b81cda441a31fe99abf709",
"text": "You can use the ITR 1 and declare the income from freelancing as income from other sources. As part of freelancing, certain expenses can be deducted provided they are directly related to work and have proper records. Please consult a CA who can advice you on how to do this. The Actual income shown should be less of the expenses.",
"title": ""
},
{
"docid": "2ef4e47b64b903efa22be3cfe708549a",
"text": "There are no clear guidelines. If you are selling as individual, then what ever profit you make gets added to your overall income as you pay tax accordingly. This is true for sole proprietor or partnership kind of firms. If you are registered as a Company, the profits are taxed as business income. There may be VAT and other taxes. Please consult a CA who can guide you in specifics as for eCommerce, there is no defined law and one has to interpret various other tax laws.",
"title": ""
},
{
"docid": "d5a7e6714172567de547d1bb7a74903d",
"text": "\"What is the right way to handle this? Did you check the forms? Did the form state $0 tax due on the FTB LLC/Corp form (I'm guessing you operate as LLC/Corp, since you're dealing with the Franchise Tax)? The responsibility is ultimately yours. You should cross check all the numbers and verify that they're correct. That said, if the CPA filled the forms incorrectly based on your correct data - then she made a mistake and can be held liable. CPA filing forms from a jurisdiction on the other end of the country without proper research and knowledge may be held negligent if she made a grave mistake. You can file a law suit against the CPA (which will probably trigger her E&O insurance carrier who'll try to settle if there's a good chance for your lawsuit to not be thrown away outright), or complain to the State regulatory agency overseeing CPAs in the State of her license. Or both. Am I wrong for expecting the CPA should have properly filled out and filed my taxes? No, but it doesn't shift the responsibility from you. How can I find out if the CPA has missed anything else? Same as with doctors and lawyers - get a second opinion. Preferably from a CPA licensed in California. You and only you are responsible for your taxes. You may try to pin the penalties and interest on the CPA if she really made a mistake. California is notorious for very high LLC/Corp franchise tax (cost of registering to do business in the State). It's $800 a year. You should have read the forms and the instructions carefully, it is very prominent. It is also very well discussed all over the Internet, any search engine would pop it up for you with a simple \"\"California Franchise Tax for LLC/Corp\"\" search. CA FTB is also very aggressive in assessing and collecting the fee, and the rules of establishing nexus in CA are very broad. From your description it sounds like you were liable for the Franchise tax in CA, since you had a storage facility in CA. You may also be liable for sales taxes for that period.\"",
"title": ""
},
{
"docid": "300c2b236171618b127627cb296130ad",
"text": "Through your question and then clarification through the comments, it looks like you have a U.S. LLC with at least two members. If you did not elect some other tax treatment, your LLC will be treated as a partnership by the IRS. The partnership should file a tax return on Form 1065. Then each partner will get a Schedule K-1 from the partnership, which the partner should use to include their respective shares of the partnership income and expenses on their personal Forms 1040. You can also elect to be taxed as an S-Corp or a C-Corp instead of a partnership, but that requires you to file a form explicitly making such election. If you go S-Corp, then you will file a different form for the company, but the procedure is roughly the same - Income gets passed through to the owners via a Schedule K-1. If you go C-Corp, then the owners will pay no tax on their own Form 1040, but the C-Corp itself will pay income tax. As far as whether you should try to spend the money as business expense to avoid paying extra tax - That's highly dependent on your specific situation. I'd think you'd want to get tailored advice for that.",
"title": ""
},
{
"docid": "692ae1c3e6eb2eca7e42bcebfcb1293a",
"text": "Mods decided to leave it here, so I'll summarize some of my answers on this question given @OnStartups. You can find them here, here and here. Your options are : You and your business are one and the same. You report your income and expenses for taxes on a Schedule C (for each sole proprietorship a separate schedule), and taxed at your personal rates. There's no liability protection or legal separation between you and your business, and you don't need to have any bureaucratic overhead of managing an entity. You can use your own bank account and have checks written to you directly. You can register for DBA if you want a store-front name to be different from your own name. Depending on State, can cost a lot or close to nothing. Provides certain liability protection (depending on State, single-member and multi-member LLC's may have different liability protections). You can chose to be taxed as either a sole-proprietor (partnership, for multi-member) or as a corporation. You have to separate your activities, have a separate bank account, and some minimal bureaucracy is required to maintain the entity. Benefits include the limited liability, relatively easy to add partners to the business or sell it as a whole, and provides for separation of your personal and business finances. Drawbacks - bureaucracy, additional fees and taxes (especially in CA), and separation of assets. Corporation is an entirely separate entity from yourself, files its own tax returns, has separate bank accounts and is run by the board of directors (which in some cases may require more than 1 person to be on the board, check your state laws on that). As an officer of the corporation you'll have to pay salary to yourself. S-Corp has the benefit of pass-through taxation, C-Corp doesn't and has double taxation. Benefits - liability protection, can sell shares to investors, legally distinct entity. Disadvantages - have to deal with payroll, additional accounting, significant bureaucracy and additional layer of taxes for C-Corp (double taxation). Selling corporate assets is always a taxable event (although in your case it is probably not of an importance). You have to talk to a lawyer in your state about the options re the liability protection and how to form the entities. The formation process is usually simple and straight forward, but the LLC/Partnership operating agreements and Corporation charters/bylaws must be drafted by a lawyer if you're not going to be the sole owner (even if you are - better get a lawyer draft something for you, its just easier to fix and change things when you're the sole owner). You have to talk to a CPA/EA in your state about the taxes and how the choice of entity affects them.",
"title": ""
},
{
"docid": "8fe6f7a9cad2f4520ed898b0c39b47ba",
"text": "\"I assume your employer does standard withholding? Then what you need to do is figure what bracket that puts you in after you've done all your normal deductions. Let's say it's 25%. Then multiply your freelance income after business expenses, and that's your estimated tax, approximately. (Unless the income causes you to jump a bracket.) To that you have to add approximately 12-13% Social Security/Medicare for income between the $90K and $118,500. Filling out Form 1040SSE will give you a better estimate. But there is a \"\"safe harbor\"\" provision, in that if what you pay in estimated tax (and withholding) this year is at least as much as you owed last year, there's no penalty. I've always done mine this way, dividing last year's tax by 4, since my income is quite variable, and I've never been able to make sense of the worksheets on the 1040-ES.\"",
"title": ""
},
{
"docid": "806e9a3ed65f7aa9a2cea31e6a32d23f",
"text": "\"I don't know what you mean by \"\"claim for taxes,\"\" I think you mean pay taxes. I'm not sure how corps function in Canada but in the US single owner limited liability entities typically pass the net income through to the owner to be included in their personal tax return. So it seems all of this is more or less moot, because really you should probably already be including your income sourced from this project on your personal taxes and that's not really likely to change if you formed something more formal. The formal business arrangements really exist to limit the liability of the business spilling over in to the owner's assets. Or trouble in the owner's life spilling over to interrupt the business operation. I don't know what kind of business this is, but it may make sense to set up one of the limited liability arrangements to ensure that business liability doesn't automatically mean personal liability. A sole proprietorship or in the US we have DBA (doing business as) paperwork will get you a separate tax id number, which may be beneficial if you ever have to provide a tax ID and don't want to use your individual ID; but this won't limit your liability the way incorporating does.\"",
"title": ""
},
{
"docid": "d66d0b01848a465509e0c72e6739c3a7",
"text": "I don't think anyone can give you a definitive answer without knowing all about your situation, but some things to consider: If you are on a 1099, you have to pay self-employment tax, while on a W-2 you do not. That is, social security tax is 12.4% of your income. If you're a 1099, you pay the full 12.4%. If you're W-2, you pay 6.2% and the employer pays 6.2%. So if they offer you the same nominal rate of pay, you're 6.2% better off with the W-2. What sort of insurance could you get privately and what would it cost you? I have no idea what the going rates for insurance are in California. If you're all in generally good health, you might want to consider a high-deductible policy. Then if no one gets seriously sick you've saved a bunch of money on premiums. If someone does get sick you might still pay less paying the deductible than you would have paid on higher premiums. I won't go into further details as that's getting off into another question. Even if the benefits are poor, if there are any benefits at all it can be better than nothing. The only advantage I see to going with a 1099 is that if you are legally an independent contractor, then all your business expenses are deductible, while if you are an employee, there are sharp limits on deducting employee business expenses. Maybe others can think of other advantages. If there is some reason to go the 1099 route, I understand that setting up an LLC is not that hard. I've never done it, but I briefly looked into it once and it appeared to basically be a matter of filling out a form and paying a modest fee.",
"title": ""
},
{
"docid": "014eed84264edbbd345b926d91b2fd96",
"text": "Delaware LLC requires that each business entity have and hold an enterprise Registered in the State of Delaware who can be both a character resident or enterprise entity this is legal to do business in the Wilmington, Delaware. the Delaware LLC has offered the same asset protections and tax advantages that a corporation offers. Often the LLC is the simpler, more flexible choice for small businesses. This small amount of required information not only makes it easy to start an LLC in Delaware, but it also helps to keep your identity and personal information secure.",
"title": ""
},
{
"docid": "2ff2c8d04f80b637da2b51de86a1c16e",
"text": "First, determine the workload he will expect. Will you have to quit your other work, either for time or for competition? How much of your current business will be subsumed into his business, if any? Make sure to understand what he wants from you. If you make an agreement, set it in writing and set some clear expectations about what will happen to your business (e.g. it continues and is not part of your association with the client). Because he was a client for your current business, it can blur the lines. Second, if you join him, make sure there is a business entity. By working together for profit, you will have already formed a partnership for tax purposes. Best to get an entity, both for the legal protection and also for the clarity of law and accounting. LLCs are simplest for small ventures; C corps are useful if you have lots of early losses and owners that can't use them personally, or if you want to be properly formed for easy consumption by a strategic. Most VCs and super-angels prefer everybody be a straight C. Again, remember to define, as necessary, what you are contributing to be an owner and what you are retaining (your original business, which for simplicity may already be in an entity). As part of this process, make sure he defines the cap table and any outstanding loans. Auntie June and Cousin Steve might think their gifts to him were loans or equity purchases; best to clear this issue up early before there's any more money in it. Third, with regard to price, that is an intensely variable question. It matters what the cap table looks like, how early you are, how much work he's already done, how much work remains to be done, and how much it will pay off. Also, if you do it, expect to be diluted by other employees, angels, VCs, other investors, strategics, and so on. Luckily, more investors usually indicates a growing pie, so the dilution may not be at all painful. But it should still be on your horizon. You also need to consider your faith in your prospective partner's ability to run the business and to be a trustworthy partner (so you don't get Zuckerberg'd), and to market the business and the product to customers and investors. If you don't like the prospects, then opt for cash. If you like the business but want to hedge, ask for compensation plus equity. There are other tricks you could use to get out early, like forced redemption, but they probably wouldn't help either because it'd sour your relationship or the first VC or knowledgeable angel to come along will want you to relinquish that sort of right. It probably comes down to a basic question of your need for cash, his willingness to let you pursue outside work (hopefully high) and your appraisal of the business' prospects.",
"title": ""
},
{
"docid": "c8cb781b721834ee11d37597b7ec7030",
"text": "There is no tax code I know that would grant you such a privilege. And it just isn't practicable. In your examples, you always sold your product and were thus able, in retrospect, to give a value to your work. What if you don't sell your product? What if in one case your worked hour is reimbursed with one price, with the next product at another (i.e. difference in margin)? No, it won't work like that. And by the way, I think you might have got some definitions upside down. What you want is a salary that your own company pays out to yourself and you can deduct from other profits. But as long as you can't afford to pay yourself a salary, and you don't have access to investors who are willing to front you the money, the time invested is your personal investment and cannot be deducted anywhere - though it might pay off nicely in the long run. That's the risk entrepreneurs take.",
"title": ""
},
{
"docid": "931a993bbca15ff8d3295790b1a2a68a",
"text": "Looking at the numbers quickly, if he makes this amount for the entire year, single, no kids, no investment income, standard deduction only, his taxable income will be about $110,000.* That puts him in the 28% tax bracket. His federal tax would be: $18,481.25 plus 28% of the amount over $90,750 Which comes out to about $23,800 in tax liability. His federal withholding is $26,047 for the year, so with absolutely no deductions whatsoever, he will be getting a tax refund of about $2200. I'm not very familiar with the California tax return, but it is entirely possible that he would get a decent sized refund from the state as well. This means that his tax refund could be about the size of an extra paycheck. He may want to consider increasing his allowances, which would make his paychecks bigger and his tax refund smaller. That having been said, taxes are high, no doubt about it. Remember that when you are in the voting booth. :) * Here is how I got the taxable income number for the year:",
"title": ""
},
{
"docid": "67b68ecf5c993aeea42bb178987d334d",
"text": "Yes, you are the proprietor of the business and your SSN is listed on Schedule C. The information on Schedule C is for your unincorporated business as a contractor; it is a sole proprietorship. You might choose to do this business under your own name e.g. Tim Taylor (getting paid with checks made out to Tim Taylor) or a modified name such as Tim the Tool Man Taylor (this is often referred to as DBA - Doing Business as), under a business name such as Tool Time etc. with business address being your home address or separate premises, and checking accounts to match etc. and all that is what the IRS wants to know about on Schedule C. Information about the company that paid you is not listed on Schedule C.",
"title": ""
},
{
"docid": "df8090240dd334ad2c157f72bb3e0944",
"text": "\"Yes, you can make the election to file your LLC as an S-Corp, and Turbo Tax Business can help you with the S-Corp business return. You need to make sure you're set up correctly and there are a lot of things to be aware of. For example, the whole \"\"reasonable salary\"\" thing is a can of worms. So while the answer to your question is \"\"yes, it's manageable, you can do it on your own,\"\" it might be worthwhile to have a professional help you the first year, make sure it's set up right, and then you can do it on your own in subsequent years.\"",
"title": ""
}
] |
fiqa
|
a926ca5bc5e62bfdb175e8d713038ba2
|
Why would I choose a 40-Year depreciation instead of the standard 27.5-Year?
|
[
{
"docid": "659a7dbe5b9c30df88486020468b4540",
"text": "There are specific cases where you are required to use ADS: Required use of ADS. You must use ADS for the following property. Listed property used 50% or less in a qualified business use. See chapter 5 for information on listed property. Any tangible property used predominantly outside the United States during the year. Any tax-exempt use property. Any tax-exempt bond-financed property. All property used predominantly in a farming business and placed in service in any tax year during which an election not to apply the uniform capitalization rules to certain farming costs is in effect. Any property imported from a foreign country for which an Executive Order is in effect because the country maintains trade restrictions or engages in other discriminatory acts. See publication 946. If none of those apply to your property - you may elect ADS. Why would you elect ADS when you're not required to use it? If you can't think of a reason, then don't elect it. For most people the shorter the depreciation period - the more they can deduct (or accumulate in passive losses) each year, and that is usually the desirable case. If you plan on selling in 10 years, keep in mind the depreciation recapture and consider whether the passive losses (offsetting regular income) are worth the extra tax in this case.",
"title": ""
}
] |
[
{
"docid": "a1c94491cc27aa9195b884d40836d527",
"text": "\"You've laid out a strategy for deciding that the top of the market has passed and then realizing some gains before the market drops too far. Regardless of whether this strategy is good at accomplishing its goal, it cannot by itself maximize your long-term profits unless you have a similar strategy for deciding that the bottom of the market has passed. Even if you sell at the perfect time at the top of the market, you can still lose lots of money by buying at the wrong time at the bottom. People have been trying to time the market like this for centuries, and on average it doesn't work out all that much better than just plopping some money into the market each week and letting it sit there for 40 years. So the real question is: what is your investment time horizon? If you need your money a year from now, well then you shouldn't be in the stock market in the first place. But if you have to have it in the market, then your plan sounds like a good one to protect yourself from losses. If you don't need your money until 20 years from now, though, then every time you get in and out of the market you're risking sacrificing all your previous \"\"smart\"\" gains with one mistimed trade. Sure, just leaving your money in the market can be psychologically taxing (cf. 2008-2009), but I guarantee that (a) you'll eventually make it all back (cf. 2010-2014) and (b) you won't \"\"miss the top\"\" or \"\"miss the bottom\"\", since you're not doing any trading.\"",
"title": ""
},
{
"docid": "6ea3dd82fb6abfa05b79a0792d10c71f",
"text": "Your math is not wrong. That's why banks want these points. They did the same math too. There may be some immediate tax advantages for points though, in that case you can get return of your tax rate for the year of the points (which may make it worth it, if you don't want to keep the mortgage for more than, say, 10 years). Check here for details.",
"title": ""
},
{
"docid": "3e9ced915f7fb7931adc0b6e4a27c9f3",
"text": "If you're looking for some formula, I don't think one exists. People talk about this all the time and give conflicting advice. If there was a proven-accurate formula, they wouldn't be debating it. There are basically 3 reasons to do a home improvement project: (a) Correct a problem so that you prevent on-going damage to your home. For example, have a leaking roof patched or replaced, or exterminate termites. Such a job is worthwhile if the cost of fixing the problem is less than the cost of future damage. In the case of my termite and leaking roof examples, this is almost always worth doing. Lesser maintenance problems might be more debatable. Similarly, some improvements may reduce expenses. Like replacing an old furnace with a newer model may cut your heating bills. Here the question is: how long does it take to repay the investment, compared to other things you might invest your money in. Just to make up numbers: Suppose you find that a new furnace will save you $500 per year. If the new furnace costs $2000, then it will take 4 years to pay for itself. I'd consider that a good investment. If that same $2000 furnace will only cut your heating bills by $100 per year, then it will take 20 years to pay for itself. You'd probably be better off putting the $2000 into the stock market and using the gains to help pay your heating bill. (b) Increase the resale value of your home. If you are paying someone else to do the work, the harsh reality here is: Almost no job will increase the resale value by more than the cost of getting the job done. I've seen many articles over the years citing studies on this. I think most conclude that kitchen remodeling comes closet to paying for itself, and bathrooms come next. New windows are also up there. I don't have studies to prove this, but my guesses would be: Replacing something that is basically nice with a different style will rarely pay for itself. Like, replacing oak cabinets with cherry cabinets. Replacing something that is in terrible shape with something decent is more likely to pay back than replacing something decent with something beautiful. Like if you have an old iron bathtub that's rusting and falling apart, replacing it may pay off. If you have a 5-year-old bathtub that's in good shape but is not premium, top of the line, replacing it with a premium bathtub will probably do very little for resale value. If you can do a lot of the work yourself, the story changes. Many home improvement jobs don't require a lot of materials, but do require a lot of work. If you do the labor, you can often get the job done very cheaply, and it's likely that the increase in resale value will be more than what you spend. For example, most of my house has hardwood floors. Lots of people like pretty hardwood floors. I just restained the floors in two rooms. It cost me, I don't know, maybe $20 or $30 for stain and some brushes. I'm sure if I tried to sell the house tomorrow I'd get my twenty bucks back in higher sale value. Realtors often advise sellers to paint. Again, if you do it yourself, the cost of paint may be a hundred dollars, and it can increase the sale price of the house by thousands. Of course if you do the work yourself, you have to consider the value of your time. (c) To make your home more pleasant to live in. This is totally subjective. You have to make the decision on the same basis that you decide whether anything that is not essential to survival is worth buying. To some people, a bottle of fancy imported wine is worth thousands, even millions, of dollars. Others can't tell the difference between a $10,000 wine and a $15 wine. The thing to ask yourself is, How important is this home improvement to me, compared to other things I could do with the money? Like, suppose you're considering spending $20,000 remodeling your kitchen. What else could you do with $20,000? You could buy a car, go on an elaborate vacation, eat out several times a week for years, retire a little earlier, etc. No one can tell you how much something is worth to you. Any given home improvement may involve a combination of these factors. Like say you're considering that $20,000 kitchen remodeling. Say you somehow find out that this will increase the resale value by $15,000. If the only reason you were considering it was to increase resale value, then it's not worth it -- you'd lose $5,000. But if you also want the nicer kitchen, then it is fair to say, Okay, it will cost me $20,000, but ultimately I'll get $15,000 of that back. So in the long run it will only cost me $5,000. Is having a nicer kitchen worth $5,000 to me? Note, by the way, that resale value only matters if and when you sell the house. If you expect to stay in this house for 20 years, any improvements done are VERY long-term investments. If you live in it until you die, the resale value may matter to your heirs.",
"title": ""
},
{
"docid": "fc239a35be77409464db2aaa455acd86",
"text": "You mentioned 15-20 years in your comment on mhoran_psprep's response. This is the most important factor to consider in the points vs. rate question. With a horizon that long it sounds like the points are probably a better option for you. There is a neat comparison tool at The Mortgage Professor's website that may help you build your spreadsheet or simply check the numbers you are getting.",
"title": ""
},
{
"docid": "18b79cd0bd218a253049cfab75afeb3a",
"text": "There is an opportunity cost of your future insurance needs, Here, the savings vs risks ratio is difficult to figure out. Hence it is always worth that extra cost to buy the larger and longer policy if you can afford it. Basically if you can afford it today, it will cost peanuts after 20 years.",
"title": ""
},
{
"docid": "1a55e6ac7a7a6ff0ea4a5e2d951c59ee",
"text": "\"A primary residence can be an admirable investment/retirement vehicle for a number of reasons. The tax savings on the mortgage are negligible compared to these. A $200,000 mortgage might result in a $2000 annual savings on your taxes -- but a $350,000 house might easily appreciate $20,000 (tax free!) in a good year. Some reasons to not buy a larger house. Getting into or out of a house is tremendously expensive and inconvenient. It can make some life-changes (including retirement) more difficult. There is no way to \"\"diversify\"\" a primary residence. You have one investment and you are a hostage to its fortunes. The shopping center down the street goes defunct and its ruins becomes a magnet for criminals and derelicts? Your next-door neighbor is a lunatic or a pyromaniac? A big hurricane hits your county? Ha-ha, now you're screwed. As they say in the Army, BOHICA: bend over, here it comes again. Even if nothing bad happens, you are paying to \"\"enjoy\"\" a bigger house whether you enjoy it or not. Eating spaghetti from paper plates, sitting on the floor of your enormous, empty dining room, may be romantic when you're 27. When you're 57, it may be considerably less fun. Speaking for myself, both my salary and my investment income have varied wildly, and often discouragingly, over my life, but my habit of buying and renovating dilapidated homes in chic neighborhoods has brought me six figures a year, year after year after year. tl;dr the mortgage-interest deduction is the smallest of many reasons to invest in residential real-estate, but there are good reasons not to.\"",
"title": ""
},
{
"docid": "e134c8e2dc970331adafc60acda2ed44",
"text": "\"Welcome to the 'what should otherwise be a simple choice turns into a huge analysis' debate. If the choice were actually simple, we've have one 'golden answer' here and close others as duplicate. But, new questions continue to bring up different scenarios that impact the choice. 4 years ago, I wrote an article in which I discussed The Density of Your IRA. In that article, I acknowledge that, with no other tax favored savings, you can pack more value into the Roth. In hindsight, I failed to add some key points. First, let's go back to what I'd describe as my main thesis: A retired couple hits the top of the 15% bracket with an income of $96,700. (I include just the standard deduction and exemptions.) The tax on this gross sum is $10,452.50 for an 'average' rate of 10.8%. The tax, paid or avoided, upon deposit, is one's marginal rate. But, at retirement, the withdrawals first go through the zero bracket (i.e. the STD deduction and exemptions), then 10%, then 15%. The above is the simplest snapshot. I am retired, and our return this year included Sch A, itemized deductions. Property tax, mort interest, insurance, donations added up fast, and from a gross income (IRA withdrawal) well into the 25% bracket, the effective/average rate was reported as 7.3%. If we had saved in Roth accounts, it would have been subject to 25%. I'd suggest that it's this phenomenon, the \"\"save at marginal 25%, but withdraw at average sub-11%\"\" effect that account for much of the resulting tax savings that the IRA provides. The way you are asking this, you've been focusing on one aspect, I believe. The 'density' issue. That assumes the investor has no 401(k) option. If I were building a spreadsheet to address this, I'd be sure to consider the fact that in a taxable account, long term gains are taxed at 15% for higher earners (I take the liberty to ignore that wealthier taxpayers will pay a maximum 20% tax on long-term capital gains. This higher rate applies when your adjusted gross income falls into the top 39.6% tax bracket.) And those in the 10 or 15% bracket pay 0%. With median household income at $56K in 2016, and the 15% bracket top at $76K, this suggests that most people (gov data shows $75K is 80th percentile) have an effective unlimited Roth. So long as they invest in a way that avoids short term gains, they can rebalance often enough to realize LT gains and pay zero tax. It's likely the $80K+ earner does have access to a 401(k) or other higher deposit account. If they don't, I'd still favor pretax IRAs, with $11K for the couple still 10% or so of their earnings. It would be a shame to lose that zero bracket of that first $20K withdrawal at retirement. Again working backwards, the $78K withdrawal would take nearly $2M in pretax savings to generate. All in today's dollars.\"",
"title": ""
},
{
"docid": "92ddf93cca4d189ba8ce70dfe60f64a3",
"text": "There's several different trade-offs wrapped up in your question. In general, refinancing a mortgage to a lower interest rate makes sense if you are certain you'll be living in the house for N years. N depends on your closing costs and points. Basically you need to calculate the break-even point for when the savings from the reduced interest rate exceeds the cost of the re-fi. When I refinanced, the broker did the calculations for me for a range of options, maybe yours could as well. The trade off in selecting 30-year vs. 15-year is between monthly payment and total outlay. A 15-year mortgage will have a higher monthly payment, but the total money that is paid out the bank (rather than to your equity) will be less. Using the Heloc to do the down payment seems sketchy; plus then you have two loan payments you're making each month. Why not keep it simple and look for a $250k loan with 5% down? Presumably with the current mortgage you already put in a good down payment, and have built some equity up.",
"title": ""
},
{
"docid": "5f4bc1e354155fce7135692aa703dd66",
"text": "The first method is the correct one. You bought an asset worth of $1000 and you put it on your depreciation schedule. What it means is that you get to write off the $1000 over a certain period of time (and not at once, as you do with expenses). But the value you're writing off is the $1000 regardless of how much you've written off already. Assume you depreciate in straight line over 5 years (that's how you depreciate computers for Federal tax purposes, most states follow). For the simplicity of the calculation, assume you depreciate each year as a whole year (no mid-year/mid-quarter conventions). The calculation is like this: If you sell the computer - the proceeds above the adjusted basis amount are taxed as depreciation recapture up to the accumulated depreciation amount, and as capital gains above that. So in your case - book value is the adjusted basis at the end of the year (EOY), depreciation this year is the amount you depreciate in the year in question out of the total of the original cost, and the accumulated depreciation is the total depreciation including the current year. In Maryland they do not allow depreciating to $0, but rather down to 25% of the original cost, so if you bought a $1000 computer - you depreciate until your adjusted basis is $250. Depreciation rates are described here (page 5). For computers (except for large mainframes) you get 30% depreciation, with the last year probably a bit less due to the $250 adjusted basis limitation.",
"title": ""
},
{
"docid": "4da246c3a095b426a18e8407d3ed5a39",
"text": "The rev rec rule allows companies to fully restate transition years, but doesn't actually require it. It allows them to just do a one time adjustment to retained earning instead, which is what most companies are doing/will do. Lots of huge companies have adopted earlier than they had to, so they clearly saw some benefit in doing so. I think some are absolutely considering the benefits of a superficial bump in the transition year. Obviously not a huge shift in long term earnings though.",
"title": ""
},
{
"docid": "4f6ed8bf407fec3f473e98f309f972ee",
"text": "The breakeven amount isn't at 8 years. You calculated how many years of paying $500 it would take to break even with one year of paying $4000. 8 x 10 years = 80 years. So by paying $500/year it will take you 80 years to have spent the same amount ($40000 total) as you did in 10 years. At this point it may seem obvious what the better choice is. Consider where you'll be after 10 years: In scenario #1 you've spent $5000 ($500*10) and have to continue spending $500/year indefinitely. In scenario #2 you've spent $40000 ($4000*10) and don't have to pay any more, but you currently have $35000 ($40000 - $5000) less than you did in scenario #1. If you had stayed with scenario #1 you could invest that $35000 at a measly 1.43% annual return and cover the $500 payments indefinitely without ever dipping into your remaining $35000. Most likely over the long term you'll do better than 1.43% per year and come out far ahead.",
"title": ""
},
{
"docid": "c3fc3676bcfce9f6180fd4bcae1ef59b",
"text": "Contributions are post-tax, so there's no direct tax benefit to choosing a year. I just made a 2010 contribution today, and the institution's form explicitly asks me if I want it on 2010 or 2011. The primary advantage of backdating like this is being able to contribute 5k more over your lifetime than otherwise possible, under the timing constraints. While there may be a year in the future which you don't contribute the max, contributing now lets you build up earnings tax free. For '10 vs '11, you're probably holding cash so it's not a big deal, but over five years is a long time to hold cash or invest with tax penalty.",
"title": ""
},
{
"docid": "d4349c26f0d1b7638e5d334c9d495060",
"text": "\"Buy term and invest the difference is certainly the standard recommendation, and for good reason. When you start looking at some sample numbers the \"\"buy term and invest the difference\"\" strategy starts to look very good. Here are the rates I found (27 yr old in Texas with good health, non-smoker, etc): $200k term life: $21/month $200k whole life: $177/month If you were to invest the difference in a retirement account for 40 years, assuming a 7% rate of return (many retirement planning estimates use 10%) you would have $411,859 at the end of that period. (If you use 10% that figure jumps to over $994k.) Needless to say, $400k in a retirement account is better than a $200k death benefit. Especially since you can't get the death benefit AND the cash value. Certainly one big difficulty is making sure you invest that difference. The best way to handle that is to set up a direct deposit that goes straight from your paycheck to the retirement account before it even touches your bank account. The next best thing would be an automatic transfer from your bank account. You may wonder 'What if I can no longer afford to invest that money?' First off, take a second and third look at your finances before you start eating into that. But if financial crisis comes and you truly can't afford to fund your own life insurance / retirement account then perhaps it will be a good thing you're not locked into a life insurance policy that forces you to pay those premiums. That extra freedom is another benefit of the \"\"buy term and invest the difference\"\" strategy. It is great that you are asking this question now while you are young. Because it is much easier to put this strategy into play now while you are young. As far as using a cash value policy to help diversify your portfolio: I am no expert in how to allocate long term investments after maxing out my IRA and 401k. (My IRA maxes out at $5k/year, another $5k for my wife's, another $16.5k for my 401k.) Before I maxed that out I would have my house paid for and kid's education saved for. And by then it would make sense to pay a financial adviser to help you manage all those investments. They would be the one to ask about using a cash value policy similar to @lux lux's description. I believe you should NEVER PUT YOUR MONEY INTO SOMETHING YOU DON'T UNDERSTAND. Cash value policies are complex and I don't fully understand them. I should add that of course my calculations are subject to the standard disclaimer that those investment returns aren't guaranteed. As with any financial decision you must be willing to accept some level of risk and the question is not whether to accept risk, but how much is acceptable. That's why I used 7% in my calculation instead of just 10%. I wanted to demonstrate that you could still beat out whole life if you wanted to reduce your risk and/or if the stock market performs poorly.\"",
"title": ""
},
{
"docid": "4a6861c5a6ac2146025b8a13d9207d3c",
"text": "That's pretty typical for introductory problems. It's leading you into an NPV question. They're keeping the cash flows the same to illustrate the time value of money to show you that even though the free cash flow is the same in year 1 and year 4 or whatever when you discount it to present value today's stream is worth more than tomorrow's",
"title": ""
},
{
"docid": "085a94a725d272cdc5a10c0e125a378b",
"text": "I realize this question is a few years old now, but I wanted to address one of the OP's questions that hadn't been answered yet (my answer is framed as though the question were recent): However, on the plus side, the monthly payment would likely be $200 less/mo with this house vs our current rent. On a 30 year mortgage it would be almost $3-400 less. This makes me think that I could use the difference to pay directly toward the principal each month. Is my logic sound? The way amortization works, if the interest rate between 30 and 15 were the same, then making principal-only prepayments on the 30 year to cover the difference in monthly payments would result in the exactly the same schedule as if you did minimum payments on the 15-year - i.e. the numbers would be practically indistinguishable. Of course, in practice the interest rate is slightly better on the 15-year, which makes the 30-year with prepayments compare slightly less favorably. If you're confident that you'll be able to reliably keep up with the monthly payments, the 15-year would minimize the total amount of interest you pay, and help you get off of PMI slightly faster. But the 30-year w/ prepayments gives you the option to skip a prepayment or two if you run into any financial difficulty, which is a nice option to have. But you do have to be disciplined about making the prepayments every month.",
"title": ""
}
] |
fiqa
|
a8ccecb6ffa78b9d99799a79338225e0
|
Investor returns from crowdfunding
|
[
{
"docid": "809e241fbfea8c8199c5d2883dee43b6",
"text": "\"Crowdfunding can be a legitimate means of funding very small startups. It is an innovative, but obviously risky, method of raising small amounts of money. As such it is now regulated by the SEC under \"\"Regulation Crowdfunding\"\" They have published guides for these types of business startups to help them with required disclosures and reporting requirements: https://www.sec.gov/info/smallbus/secg/rccomplianceguide-051316.htm Here's the introduction to the relevant regulatory authority of the SEC: Under the Securities Act of 1933, the offer and sale of securities must be registered unless an exemption from registration is available. Title III of the Jumpstart Our Business Startups (JOBS) Act of 2012 added Securities Act Section 4(a)(6) that provides an exemption from registration for certain crowdfunding transactions.[2] In 2015, the Commission adopted Regulation Crowdfunding to implement the requirements of Title III.[3] Under the rules, eligible companies will be allowed to raise capital using Regulation Crowdfunding starting May 16, 2016. It is obviously a new form of investment but you should be able to get historical data on the SEC's real time Edgar reporting system once there is some history. This is a search for all Form C's filed as of 12/2/16\"",
"title": ""
}
] |
[
{
"docid": "c1402c618145c984650ff00198caab0f",
"text": "Remember that unless you participate in the actual fund that these individuals offer to the public, you will not get the same returns they will. If you instead do something like, look at what Warren Buffet's fund bought/sold yesterday (or even 60 minutes ago), and buy/sell it yourself, you will face 2 obstacles to achieving their returns: 1) The timing difference will mean that the value of the stock purchased by Warren Buffet will be different for your purchase and for his purchase. Because these investors often buy large swathes of stock at once, this may create large variances for 2 reasons: (a) simply buying a large volume of a stock will naturally increase the price, as the lowest sell orders are taken up, and fewer willing sellers remain; and (b) many people (including institutional investors) may be watching what someone like Warren Buffet does, and will want to follow suit, chasing the same pricing problem. 2) You cannot buy multiple stocks as efficiently as a fund can. If Warren Buffet's fund holds, say, 50 stocks, and he trades 1 stock per day [I have absolutely no idea about what diversification exists within his fund], his per-share transaction costs will be quite low, due to share volume. Whereas for you to follow him, you would need 50 transactions upfront, + 1 per day. This may appear to be a small cost, but it could be substantial. Imagine if you wanted to invest 50k using this method - that's $1k for each of 50 companies. A $5 transaction fee would equal 1% of the value of each company invested [$5 to buy, and $5 to sell]. How does that 1% compare to the management fee charged by the actual fund available to you? In short, if you feel that a particular investor has a sound strategy, I suggest that you consider investing with them directly, instead of attempting to recreate their portfolio.",
"title": ""
},
{
"docid": "3451c2779bca4a3422a1edf0de832b52",
"text": "At this time, Google Finance doesn't support historical return or dividend data, only share prices. The attributes for mutual funds such as return52 are only available as real-time data, not historical. Yahoo also does not appear to offer market return data including dividends. For example, the S&P 500 index does not account for dividends--the S&P ^SPXTR index does, but is unavailable through Yahoo Finance.",
"title": ""
},
{
"docid": "94fd0ac68a72a65937095c6edeaedb74",
"text": "Thanks very much. 12b1 is a form that explains how a fund uses that .25-1% fee, right? So that's part of the puzzle im getting at. I'm not necessarily trying to understand my net fees, but more who pays who and based off of what. For a quick example, betterment bought me a bunch of vanguard ETFs. That's cool. But vanguard underperformed vs their blackrock and ssga etfs. I get that vanguard has lower fees, but the return was less even taking those into account. I'm wondering, first what sort of kickback betterment got for buying those funds, inclusive of wholesale deals, education fees etc. I'm also wondering how this food chain goes up and down the sponsor, manager tree. I'm sure it's more than just splitting up that 1%",
"title": ""
},
{
"docid": "a2dd5540db63905132ff6419c895d1df",
"text": "\"Because I'll be investing time, effort, energy and take some initial risks I would like to receive more shares (more than just purely financial contribution would suggest) I don't see money in that list. How much money will you be contributing to your own project? Mutual understanding, focusing on big image, rather that covering each and every edge case. These kinds of one page agreements are an excellent \"\"idea\"\" and they work just fine when everyone is happy and everything is working well; they are an utter nightmare if anything goes sideways. Coincidently, the reason you write anything down at all is to have everyone agree on the same big picture at the same time. People's memory of the original big picture gets fuzzy when their money might not come back to them. You don't need to cover all edge cases, but you need to cover obvious negative outcomes. What if you can't find a renter? What if you're late paying someone back? What if your vendor \"\"repairs\"\" something incorrectly? What if you forget to get a permit and the vendor needs to come back to tear it all apart and redo the work? What if your project needs more money, who is required to contribute, who has the option to contribute, who gets diluted? Who is doing the work of managing the project, how much is that person getting paid, how is that person's pay determined, how can it be adjusted? Is any work expected from any other investor, on what terms, who decides the terms? What if you get an offer to buy the building, who decides to sell, etc and so forth and on and on and on... You write down an agreement so everyone's understanding of the agreement is recorded. You write down what will happen in XYZ event so you don't argue about what you all should do when that event does ultimately occur. You take as much equity as your other investors will allow you to have, and you give them as much as required to get their money. Understand that the more cooks there are in the kitchen the more difficult it is to act on a problem when one arises; when not if. Your ego-stroking play to \"\"open source crowd-sourced wisdom\"\" is nothing more than a silly request for vague advice at no cost. Starting a project on trust, transparency and integrity is naive. This is about money. Why on earth should anyone trust you with their money if you won't do the most basic step of stewardship and spend a couple hundred pounds to talk to a local professional about organizing your first ever project. To answer your question directly, the first precaution you should take is not taking money from any of your friends or family.\"",
"title": ""
},
{
"docid": "a839d22bdaca27f1edc720c15bf63782",
"text": "They return capital to investors every year to keep the fund size smaller, since there are a set number of money-making opportunities in the space. In other words, if they will make $1 billion per year regardless of invested capital, why not lever up a few times so you don't have to put as much in?",
"title": ""
},
{
"docid": "c9ee0e3065b8cff148fbeed83d6a7226",
"text": "\"i realize the required rate will need to be below the expected growth rate. not really the issue. i'm also not looking for insight into how i model these two possible options, i'm really just interested in how people would think about producing a discount rate for the projects. \"\"but you determine the required return(discount rate) based on the perceived risk of the investment and your particular views\"\" this was the ultimate question i was getting at. what would YOU use?\"",
"title": ""
},
{
"docid": "88cfe5b26b7ecbb169b03835ec119a19",
"text": "TK didnt lose investor tens of billions of dollars. Also, for the past several years the whole market rewards growth over earnings, so that helped guys like Musk and Kalanick quite a lot and to a lessor degree, Bezos and Reddings. For all assets, investor profits come from either earnings or valuation growth and Kalanick provided quite a bit of the latter.",
"title": ""
},
{
"docid": "3d9a087db7ac36a435de1783db63916d",
"text": "\"What you are seeking is termed \"\"Alpha\"\", the mispricing in the market. Specifically, Alpha is the price error when compared to the market return and beta of the stock. Modern portfolio theory suggests that a portfolio with good Alpha will maximize profits for a given risk tolerance. The efficient market hypotheses suggests that Alpha is always zero. The EMH also suggests that taxes, human effort and information propagation delays don't exist (i.e. it is wrong). For someone who is right, the best specific answer to your question is presented Ben Graham's book \"\"The Intelligent Investor\"\" (starting on page 280). And even still, that book is better summarized by Warren Buffet (see Berkshire Hathaway Letters to Shareholders). In a great disservice to the geniuses above it can be summarized much further: closely follow the company to estimate its true earnings potential... and ignore the prices the market is quoting. ADDENDUM: And when you have earnings potential, calculate value with: NPV = sum(each income piece/(1+cost of capital)^time) Update: See http://finance.fortune.cnn.com/2014/02/24/warren-buffett-berkshire-letter/ \"\"When Charlie Munger and I buy stocks...\"\" for these same ideas right from the horse's mouth\"",
"title": ""
},
{
"docid": "972cada0712bdb15c5249e2fca6cd7a2",
"text": "Disclosure - I love Jack Bogle. Jack basically invented the index fund, and as a result, let the common investor have an opportunity to choose a long term return of (S&P-.05%) instead of losing nearly 2% that many funds in that day charged. The use of index investing has saved investors many billions of dollars. The 1% round trip, total cost to buy/sell, was common. Fees for trading have since dropped. I happen to use Schwab who charges $9 for a trade. On $100,000, this is not .5% ($500) but less than .01%. I think it's safe to say that billion dollar mutual funds are paying even less for trades that I do. I believe Jack's example here is a combination of old data and hyperbole. The cost is not so much for the trades, per se, but for the people managing the fund. An index fund has a manager of course, but it's pretty much run by a computer.",
"title": ""
},
{
"docid": "b39141e13117ae594047e1e04dc08ae2",
"text": "What's a good proxy for the return of the market when utilizing CAPM for a WACC build up? I know I could rip data from Domadaran, but I'd like to calculate it for myself. Maybe S&P 500 earnings yield plus the 10yr? Also don't like taking the round assumption of 7%.",
"title": ""
},
{
"docid": "b92089939e283a69c66535a345f7ecee",
"text": "Ah, pardon me, so it's not *either* 10x return or zero, but also includes points in between there? Is it path dependent? Do you have any history on the asset? The usual crutches for dealing with unknown probabilities are using risk neutrality or arbitrage pricing, but if the market is inefficient then that will be an estimation at best.",
"title": ""
},
{
"docid": "d59301acd1b942e879c09beefec5df5d",
"text": "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.",
"title": ""
},
{
"docid": "0722e905b79687713fca6967cb3942c8",
"text": "Currently reading Peter Thiel's *Zero to One*, and he discusses just that. He knew the bubble was about to burst so he got as much investment as quickly as he could for Pay Pal. $100 million dollars raised the month before the bubble burst, according to him.",
"title": ""
},
{
"docid": "a990852a5fbc94b6c23aa4c32112c7c2",
"text": "There are two obvious cases in which your return is lower with a heavily leveraged investment. If a $100,000 investment of your own cash yields $1000 that's a 1% return. If you put in $50,000 of your own money and borrow $50,000 at 2%, you get a 0% return (After factoring in the interest as above.) If you buy an investment for $100,000 and it loses $1000, that's a -1% return. If you borrow $100,000 and buy two investments, and they both lose $1000, that's a -2% return.",
"title": ""
},
{
"docid": "974ddb2aa065fb9d2f460b6cea10bad0",
"text": "Depends entirely on the stock and your perception of it. Would you buy it at the current price? If so, keep it. Would you buy something else? If so, sell it and buy that.",
"title": ""
}
] |
fiqa
|
41d834b5971555878fa3a1ee3a27e522
|
Should I be claiming more than 1 exemption?
|
[
{
"docid": "ece04d2bd05cd3126ea8db90f178fe7e",
"text": "\"It's not possible to determine whether you can \"\"expect a refund\"\" or whether you are claiming the right number of exemptions from the information given. If your wife were not working and you did not do independent contracting, then the answer would be much simpler. However, in this case, we must also factor in how much your contracting brings in (since you must pay income tax on that, as well as Medicare and, probably, Social Security), whether you are filing jointly or separately, and your wife's income from her business. There are also other factors such as whether you'll be claiming certain child care expenses, and certain tax credits which may phase out depending on your income. If you can accurately estimate your total household income for the year, and separate that into income from wages, contracting, and your wife's business, as well as your expenses for things like state and local income and property taxes, then you can make a very reasonable estimate about your total tax burden (including the self-employment taxes on your non-wage income) and then determine whether you are having enough tax withheld from your paycheck. Some people may find that they should have additional tax withheld to compensate for these expenses (see IRS W-4 Line #6).\"",
"title": ""
},
{
"docid": "dc1e070074bf5d6aebec9e63615dea20",
"text": "\"J - Approaching the answer from the W4 perspective (for calculation purposes) may be more trouble that it's worth. I'd strongly suggest you use tax software, whether it's the 2016 SW or a current year one, on line, to get an estimate of your total tax bill for the year. You can then look at your current run rate of tax paid in to see if you are on track. If you have a large shortfall, you can easily adjust your withholdings. If you are on track to get a large refund, make the adjustment so next year will track better. Note, a withholding allowance is equal to a personal exemption. Some think that \"\"4\"\" means 4 people in the house, but it actually means \"\"don't tax 4 x $4050\"\" as I have $16200 in combined people or tax deductions.\"",
"title": ""
}
] |
[
{
"docid": "6936be415fe93cd7e0a9c018dfd788e4",
"text": "The difference is that if you end up owing more than $1k in taxes come April, you **will** be mandated for withholding next year (that's at the federal level, I don't know CA law in particular); and if this isn't the first time you've done it, you may owe additional penalties as well. Your actual tax liability comes out the same either way; you're *probably* better off just letting Uncle Sam have an interest-free loan for a few months and getting the difference back in April, than risking it; but if you've done the math and know you'll only owe exactly $999.99, you can do what you want. :)",
"title": ""
},
{
"docid": "18709a398b2b7066a205463a07181a42",
"text": "There's a couple issues to consider: When you sell your primary home, the IRS gives you a $500k exemption (married, filing jointly) on gain. If you decide not to sell your current house now, and you subsequently fall outside the ownership/use tests, then you may owe taxes on any gains when you sell the house. Rather than being concerned about your net debt, you should be concerned about your monthly debt payments. Generally speaking, you cannot have debt payments of more than 36% of your monthly income. If you can secure a renter for your current property, then you may be able to reach this ratio for your next (third) property. Also, only 75% of your expected monthly rental income is considered for calculating your 36% number. (This is not an exhaustive list of risks you expose yourself to). The largest risk is if you or your spouse find yourself without income (e.g. lost job, accident/injury, no renter), then you may be hurting to make your monthly debt payments. You will need to be confident that you can pay all your debts. A good rule that I hear is having the ability to pay 6 months worth of debt. This may not necessarily mean having 6 months worth of cash on hand, but access to that money through personal lines of credit, borrowing against assets, selling stocks/investments, etc. You also want to make sure that your insurance policies fully cover you in the event that a tenant sues you, damages property, etc. You also don't want to face a situation where you are sued because of discrimination. Hiring a property management company to take care of these things may be a good peace-of-mind.",
"title": ""
},
{
"docid": "b069d22b7c968294f963f273dd8ee0a9",
"text": "Yes, if you can split your income up over multiple years it will be to your advantage over earning it all in one year. The reasons are as you mentioned, you get to apply multiple deductions/credits/exemptions to the same income. Rather than just 1 standard deduction, you get to deduct 2 standard deductions, you can double the max saved in an IRA, you benefit more from any non-refundable credits etc. This is partly due to the fact that when you are filing your taxes in Year 1, you can't include anything from Year 2 since it hasn't happened yet. It doesn't make sense for the Government to take into account actions that may or may not happen when calculating your tax bill. There are factors where other year profit/loss can affect your tax liability, however as far as I know these are limited to businesses. Look into Loss Carry Forwarded/Back if you want to know more. Regarding the '30% simple rate', I think you are confusing something that is simple to say with something that is simple to implement. Are we going to go change the rules on people who expected their mortgage deduction to continue? There are few ways I can think of that are more sure to cause home prices to plummet than to eliminate the Mortgage Interest Deduction. What about removing Student Loan Interest? Under a 30% 'simple' rate, what tools would the government use to encourage trade in specific areas? Will state income tax deduction also be removed? This is going to punish those in a state with a high income tax more than those in states without income tax. Those are all just 'common' deductions that affect a lot of people, you could easily say 'no' to all of them and just piss off a bunch of people, but what about selling stock though? I paid $100 for the stock and I sold it for $120, do I need to pay $36 tax on that because it is a 'simple' 30% tax rate or are we allowing the cost of goods sold deduction (it's called something else I believe when talking about stocks but it's the same idea?) What about if I travel for work to tutor individuals, can I deduct my mileage expenses? Do I need to pay 30% income tax on my earnings and principal from a Roth IRA? A lot of people have contributed to a Roth with the understanding that withdrawals will be tax free, changing those rules are punishing people for using vehicles intentionally created by the government. Are we going to go around and dismantle all non-profits that subsist entirely on tax-deductible donations? Do I need to pay taxes on the employer's cost of my health insurance? What about 401k's and IRA's? Being true to a 'simple' 30% tax will eliminate all 'benefits' from every job as you would need to pay taxes on the value of the benefits. I should mention that this isn't exactly too crazy, there was a relatively recent IRS publication about businesses needing to withhold taxes from their employees for the cost of company supplied food but I don't know if it was ultimately accepted. At the end of the day, the concept of simplifying the tax law isn't without merit, but realize that the complexities of tax law are there due to the complexities of life. The vast majority of tax laws were written for a reason other than to benefit special interests, and for that reason they cannot easily be ignored.",
"title": ""
},
{
"docid": "29079941bcf673433726120d468485ea",
"text": "If you have multiple accounts, you have to empty them all before you can deduct any losses. Your loss is not a capital loss, its a deduction. It is calculated based on the total amount you have withdrawn from all your Roth IRA's, minus the total basis. It will be subject to the 2% AGI treshhold (i.e.: if your AGI is > 100K, none of it is deductible, and you have to itemize to get it). Bottom line - think twice. Summarizing the discussion in comments: If you have a very low AGI, I would guess that your tax liability is pretty low as well. Even if you deduct the whole $2K, and all of it is above the other deductions you have (which in turn is above the standard deduction of almost $6K), you save say $300 if you're in 15% tax bracket. That's the most savings you have. However I'm assuming something here: I'm assuming that you're itemizing your deductions already and they're above the standard deduction. This is very unlikely, with such a low income. You don't have state taxes to deduct, you probably don't spend a lot to deduct sales taxes, and I would argue that with the low AGI you probably don't own property, and if you do - you don't have a mortgage with a significant interest on it. You can be in 15% bracket with AGI between (roughly) $8K and $35K, i.e.: you cannot deduct between $160 and $750 of the $2K, so it's already less than the maximum $300. If your AGI is $8K, the deduction doesn't matter, EIC might cover all of your taxes anyway. If your AGI is $30K, you can deduct only $1400, so if you're in the 15% bracket - you saved $210. That, again, assuming it's above your other deductions, which in turn are already above the standard deduction. Highly unlikely. As I said in the comments - I do not think you can realistically save on taxes because of this loss in such a manner.",
"title": ""
},
{
"docid": "4cf29d950fdc42da450810e87d3e1eac",
"text": "\"I am not aware of any place that the tax forms ask, \"\"How many people live in your house?\"\" They ask how many dependants you have, and not everyone who lives in your house is your dependant. There are very specific rules about that. If your girlfriend is being claimed as a dependent on her parents' tax return, then she cannot also be claimed on anyone else's return, and there's no need to investigate further. To claim someone as a dependent, they have to meet a number of conditions. I am not a lawyer. See IRS Publication 17. But the gist of it is that they must, (a) either be a relative (there's a list of what sorts of relatives qualify) or live with you all year; (b) Living with you must not violate local law; (c) Must make less than $4000 per year; and (d) You must provide over half of their support. Your girlfriend may meet the \"\"live with you all year\"\" or maybe not. But the real stumper is likely to be (d). Unless your parents are paying her tuition, they almost certainly don't meet this test.\"",
"title": ""
},
{
"docid": "b19b22ee8d55cec0980dff641e6ca784",
"text": "I would not expect any problems. Your interest will have tax deducted at 20% which I don't think you would be entitled to reclaim because you don't get a personal allowance if you aren't resident in the UK, and unless you have a huge amount of UK earnings you would not be legally liable to any higher rates of tax so there would be no issues there. If you were liable to more tax you would be obliged to inform the Inland Revenue.",
"title": ""
},
{
"docid": "ba1e15889ae2cea42d3c1ef7f74f9ef1",
"text": "Many reasons mentioned already. The reason why I have multiple is missing: I have a personal card for my private use and a company card for company use.",
"title": ""
},
{
"docid": "848f96c11dba0694cc5c7388bd4ed21b",
"text": "I am a very light TurboTax user and have expensed a laptop in the past (since it was used exclusively for work) and used the itemized deduction there and has no issues. Just not sure if there was a limit or anything of note to realize ahead of time. Thanks!",
"title": ""
},
{
"docid": "c4da0f6689c697989f3e85d5e528ac56",
"text": "\"It says that you are exempt \"\"as long as such interest income is not effectively connected with a United States trade or business\"\". So the interest is from money earned from doing business with/through AirBnb, a US company. So you will have to report it. Even if your bank doesn't send you a 1099-INT, you have to report it, unless it is under $0.49 because the IRS allows rounding.\"",
"title": ""
},
{
"docid": "a1041cb736e051ec679ade47727045f5",
"text": "\"Yes, this is a miscellaneous itemized deduction. https://www.irs.gov/publications/p529/ar02.html For this to impact your taxes, you have to be itemizing deductions (have total deductions greater than standard deduction), and the total of all miscellaneous deductions needs to exceed the \"\"2% floor\"\" described in the IRS link above.\"",
"title": ""
},
{
"docid": "b4bdf77bd6c433338ae2798676b50331",
"text": "\"There are many people who have deductions far above the standard deduction, but still don't itemize. That's their option even though it comes at a cost. It may be foolish, but it's not illegal. If @littleadv citation is correct, the 'under penalty of perjury' type issue, what of those filers who file a Schedule A but purposely leave off their donations? I've seen many people discuss charity, and write that they do not want to benefit in any way from their donation, yet, still Schedule A their mortgage and property tax. Their returns are therefore fraudulent. I am curious to find a situation in which the taxpayer benefits from such a purposeful oversight, or, better still, a cited case where they were charged with doing so. I've offered advice on filings return that wasn't \"\"truthful\"\". When you own a stock and cannot find cost basis, there are times that you might realize the basis is so low that just entering zero will cost you less than $100 in extra tax. You are not truthful, of course, but this kind of false statement isn't going to lead to any issue. If it gets noticed within an audit, no agent is going to give it more than a moment of time and perhaps suggest, \"\"you didn't even know the year it was bought?\"\" but there would be no consequence. My answer is for personal returns, I'm sure for business, accuracy to the dollar is actually important.\"",
"title": ""
},
{
"docid": "e629aeec2a87432b98553c98ecbe93d9",
"text": "Ask the company if they can make an adjustment for the next paycheck. If they can't then do the following: Increase the number of Federal exemptions by 1. In 2014 a personal exemption reduces your apparent income by $3950. If you are in the 10 % tax bracket and you are paid every two weeks you will see the amount of taxes withheld drop by ($3950*0.10/26) or ~$15. The 13 Paychecks later change it back. If you are in the 15 % tax bracket and you are paid every two weeks you will see the amount of taxes withheld drop by ($3950*0.15/26) or ~$23. Then 9 Paychecks later change it back If you are in the 25 % tax bracket and you are paid every two weeks you will see the amount of taxes withheld drop by ($3950*0.10/26) or ~$38. Then 5 paychecks later change it back. Remember the money isn't gone, it has just been transferred prematurely to the federal treasury. You could also wait until you complete your taxes this spring, then see if you needed to make an adjustment to your exemptions. If you normally get a large refund then you should be increasing your exemptions anyway. If you are always writing a check to the IRS then you weren't getting enough withheld. Also make sure that payroll has the correct numbers. Most companies include the number of federal and state exemptions on the paycheck stub, or the pdf of the stub.",
"title": ""
},
{
"docid": "088598ffdbbf738ec5c4f533240a86ac",
"text": "I understand that if I have multiple health insurance policies, I can only make claim from only one of them if ever I incur medical expenses (I'm from the Philippines). In the US, you cannot simultaneously submit a claim for payment of a medical bill, or request reimbursement for a bill already paid, to multiple insurance companies, but if you are covered by more than one policy, then any part of a claim not paid by one company can be submitted to another company that is also covering you. In fact, if you have employer-paid or employer-provided coverage, most insurance companies will want your employer-provided insurance company to be billed first, and will cover whatever is not paid by the employer coverage. For example, if the employer coverage pays 80% of your doctor's bill, the private insurance will pay the remaining 20%. But, the private insurance policies are also quite expensive. Some professional groups in the US offer major medical coverage to their US members, and might be offering this to non-US members as well (though I suspect not). These policies have large deductibles so that coverage kicks in only when the total medical expenses in that year (whether wholly or partially reimbursed, or not reimbursed at all) exceed the large deductible. These types of policies actually pay out to only a few people - if you have more than, say, $20,000 of medical expenses in a year, you have been quite ill, and thus the premiums are usually much smaller than full-fledged coverage insurance policies which pay out much more frequently because of much smaller deductibles.",
"title": ""
},
{
"docid": "bd143bca25c6456b86a9972ccf736e22",
"text": "Also, is seems the wife that's doing the taxes is very reluctant on giving me access to the statements. As an owner, I do have the legal right to those statements do I not? What power would a majority owner of a bar (40%) hold over the other two minority owners (each with 30%)? According to her, she's broken even on her investment, whereas I've collected not even half of my initial investment. The fact that you feel this is fishy reconfirms my belief that she not being truthful to some degree.",
"title": ""
},
{
"docid": "4c892cba300873f5baeab9eae1e8c11f",
"text": "I appreciate all the responses, but again, I have NO experience or education in the field. I haven't started any major related college courses yet and do not have a job in the field. I am looking for beginner, introduction level reading material to start reading up on to start understanding the field before I even start school.",
"title": ""
}
] |
fiqa
|
575e2612b210843011891d0356cdc9d2
|
Can I transfer my West Australian rock lobster quota units into my SMSF?
|
[
{
"docid": "15e97da772c632dd4122a70b3431aac5",
"text": "SMSFs are generally prohibited from acquiring assets from related parties (whether it is purchased by the SMSF or contributed into the fund). There are some exceptions to the above rule for acquiring related party assets, including: • Listed securities (ie shares, units or bonds listed on an approved stock exchange, such as the ASX) acquired at market value. • Business real property (ie freehold or leasehold interests in real property used exclusively in one or more businesses) acquired at market value. • An in-house asset where the acquisition would not result in the level of the fund’s in-house assets exceeding 5%. • Units in a widely held unit trust, such as a retail ,managed fund. In-house asset rules An ‘in-house asset’ is generally defined as: • An investment by an SMSF in a related company or trust (ie a fund owns shares in a related company or units in a related trust). • An asset of an SMSF that is leased to a related party. • A loan made by an SMSF to a related company or trust. An investment, lease or loan that is an in-house asset is not prohibited, but is limited to 5% of the market value of the fund’s assets. The Answer: If your pre-owned Western Australian Rock Lobster fishery quota units are not included in the exceptions then you cannot transfer them into your SMSF.",
"title": ""
}
] |
[
{
"docid": "b6457cfdb5e67f41d9270a82b34af5ee",
"text": "If so how to do it. Ask CIBC to open the new RRSP account, and ask CIBC to contact GWL to tell GWL to move your money from the GWL account into the CIBC account.",
"title": ""
},
{
"docid": "001308bb6898cc328653575ba51889b7",
"text": "Not to my knowledge. Often the specific location is diversified out of the fund because each major building company or real estate company attempts to diversify risk by spreading it over multiple geographical locations. Also, buyers of these smaller portfolios will again diversify by creating a larger fund to sell to the general public. That being said, you can sometimes drill down to the specific assets held by a real estate fund. That takes a lot of work: You can also look for the issuer of the bond that the construction or real estate company issued to find out if it is region specific. Hope that helps.",
"title": ""
},
{
"docid": "dc36a99ffea70f0b1e78475c3ad6fcb7",
"text": "Yes. You incur income tax on the RSU on they date they vest. At this point you own the actual shares and you can decide to sell them or to hold them. If you hold them for the required period, and sell them later, the difference between your price at vesting and the sales price would be taxed as long term capital gains. Caution: if you decide to hold, you are still liable to pay income tax in the year they vest. You have to pay taxes on income that you haven't made yet. This is fairly dangerous: if the stock goes down, you may lose a lot of this tax payment. Technically you could recover some of this through claiming capital losses, but that this is severely restricted: the IRS makes it much easier to increase taxes through gains than reducing taxes through losses.",
"title": ""
},
{
"docid": "5e43d052df5460eb9c1e6625c9febeee",
"text": "Here are your options. While you remain an Australian citizen you cannot withdraw super just because you are residing overseas. You could renounce your citizenship - just make sure you have another one to fall back on.",
"title": ""
},
{
"docid": "b96a22753213aa47f8e72a5c927db89c",
"text": "\"How do I get my money from India to UAE account – what are the options, can I do bank transfer from my mom SB account to my international account. As you have transferred money directly to your Mothers account, getting the money back would need some paper work. Consult a CA and Bank in India, they should be able to help you. There are various limits under FEMA that would be applicable. As the amount is small a self declaration would also suffice. If yes how much do I loose in case of 20 lac due to currency conversion and commission (approximate) Not sure I understand this question, are you asking if you had converted X AED into Rs 20 lacs and now you have 20 lacs will you get back \"\"x\"\" AED or how much less? If you Buy and Sell on the same day, typically there is a spread of 3-5% depending on the currency pair. However rates would have move up or down since then and hence this cannot be answered. You would have to see what the rates are. b. can exchange with Friends in UAE and deposit the same in INR to their SB account in india. Stick to Banks or authorized remittance services [like Western Union / Money Gram / etc]. Any other method you are circumventing law. One is not authorized to convert currency outside the normal Banking Channel.\"",
"title": ""
},
{
"docid": "2beabeee5253deb288ef55349de184f8",
"text": "\"A lot of ISA's allow both shares and funds as well as gilts, Hargreaves Lansdown comes to mind as does the Alliance Trust. Some penalise (charging wise) securities vs UT (unit trusts) funds but in that case just go for a low cost IT (Investment Trust) ISA and hold individual shares as well as pooled investments in the Big IT's. I think you might have to be an \"\"approved investor\"\" to buy gilts.\"",
"title": ""
},
{
"docid": "792e994786ab815266aae52e7b5afef9",
"text": "The $500 minimum is a policy of the ASX. As such any broker that offered a different policy would not be offering direct purchase of exchange traded shares. Note however that this policy applies only to the initial purchase. From the CMC FAQs: The ASX requires a minimum parcel of $500 to be traded if you don’t currently hold that particular security. Once you have $500 worth of an individual security, you can purchase any value of shares you like.",
"title": ""
},
{
"docid": "bd76b9c659a84acc192bdc6541303df9",
"text": "the pots will be negligible, however this capital could be used better elsewhere if I was to withdraw them. You won't be able to withdraw the money. Notwithstanding the recent 'pension freedom' changes, money put into a pension is still inaccessible until age 55 at the very earliest, and probably later by the time you get there. You should have been Advised of this every time you enrolled into a scheme, although it may well have been buried in something you were given to read. The best you can do (and what I would recommend, although of course this post isn't Advice) is to transfer the pensions to a personal pension, for example a SIPP, wherein you will be able to control where the money is invested. Most SIPP providers will gladly help you with such transfers. Would it be beneficial to keep these smaller pots with their respected schemes The reason I suggest transferring is that leaving the funds in workplace schemes that are no longer being contributed to is a surefire way of finding yourself invested in poorly-performing neglected funds, earning money for no one beyond the scheme provider.",
"title": ""
},
{
"docid": "1c06d4979519343b62cea20210071cd7",
"text": "It depends on the exact level of risk that you want, but if you want to keep your risk close to zero you're pretty much stuck with the banks (and those rates don't look to be going up any time soon). If you're willing to accept a little more risk, you can invest in some index tracking ETFs instead, with the main providers in Australia being Vanguard, Street State and Betashares. A useful tool for for an overview of the Australian ETF market is offered by StockSpot. The index funds reduce your level of risk by investing in an index of the market, e.g. the S&P 200 tracked by STW. If the market as a whole rises, then your investment will too, even though within that index individual companies will rise and fall. This limits your potential rate of return as well, and is still significantly more risky than leaving your cash in an Aussie bank (after all, the whole market can fall), but it might strike the right balance for you. If you're getting started, HSBC, Nabtrade, Commsec and Westpac were all offering a couple of months of free trades up to a certain value. Once the free trades are done, you'll do better to move to another broker (you can migrate your shares to the others to take advantage of their free trades too) or to a cheaper broker like CMC Markets.",
"title": ""
},
{
"docid": "7d96ffa27caec8d874570b6eff6a9c68",
"text": "\"The portfolio described in that post has a blend of small slices of Vanguard sector funds, such as Vanguard Pacific Stock Index (VPACX). And the theory is that rebalancing across them will give you a good risk-return tradeoff. (Caveat: I haven't read the book, only the post you link to.) Similar ETFs are available from Vanguard, iShares, and State Street. If you want to replicate the GFP exactly, pick from them. (If you have questions about how to match specific funds in Australia, just ask another question.) So I think you could match it fairly exactly if you wanted to. However, I think trying to exactly replicate the Gone Fishin Portfolio in Australia would not be a good move for most people, for a few reasons: Brokerage and management fees are generally higher in Australia (smaller market), so dividing your investment across ten different securities, and rebalancing, is going to be somewhat more expensive. If you have a \"\"middle-class-sized\"\" portfolio of somewhere in the tens of thousands to low millions of dollars, you're cutting it into fairly small slices to manually allocate 5% to various sectors. To keep brokerage costs low you probably want to buy each ETF only once every one-two years or so. You also need to keep track of the tax consequences of each of them. If you are earning and spending Australian dollars, and looking at the portfolio in Australian dollars, a lot of those assets are going to move together as the Australian dollar moves, regardless of changes in the underlying assets. So there is effectively less diversification than you would have in the US. The post doesn't mention the GFP's approach to tax. I expect they do consider it, but it's not going to be directly applicable to Australia. If you are more interested in implementing the general approach of GFP rather than the specific details, what I would recommend is: The Vanguard and superannuation diversified funds have a very similar internal split to the GFP with a mix of local, first-world and emerging market shares, bonds, and property trusts. This is pretty much fire-and-forget: contribute every month and they will take care of rebalancing, spreading across asset classes, and tax calculations. By my calculations the cost is very similar, the diversification is very similar, and it's much easier. The only thing they don't generally cover is a precious metals allocation, and if you want that, just put 5% of your money into the ASX:GOLD ETF, or something similar.\"",
"title": ""
},
{
"docid": "92a7a528eaa4f83c37ae06739846b0d0",
"text": "In international transfers there are quite a few charges that come into picture. 1. Your Bank's charges, you mentioned its GBP 20. 2. The Fx conversion margin. So your GBP 317.90 became 500 AUD 3. The Charges of St. George's. Normally it is recovered from Beneficiary. Typically it would show up as 2 entries, one credit for AUD 500 and second a debit. Typically in the range of AUD 10 to 25. However incaes of return, St George will deduct 2 charges from AUD 500; - The Original Charges for transfer that it would have recovered from Beneficiary. - Additional Return charges, again in the range of AUD 10 to 20. Thus the amount they would have sent back to your Bank would be less than AUD 500. Your Bank would have converted and possibly again charged you a return fee. Since these are cross border payments there is no regulation and Bank are free to charge as they please and at time do charge excess. What you can do is disptue with the Bank on the points that; - The Beneficiary account was not closed, and its a deficiency of service. - Request for an itemized statement as to what was the amount returned by St George.",
"title": ""
},
{
"docid": "ea582ead73b55789e8dd68ef14643254",
"text": "I don't believe you can do that. From the IRS: Finally, certain types of property are specifically excluded from Section 1031 treatment. Section 1031 does not apply to exchanges of: I highlighted the relevant items for emphasis.",
"title": ""
},
{
"docid": "42419f06c71eda63a7955d18a0d1cd59",
"text": "You've mostly got it figured out, but there are a couple of more points to consider: You'll be permanently losing a corresponding amount of your RRSP contribution room allowance, because the re-deposit of your funds into the new RRSP would count as a new contribution, the way you're proposing to things. For a small amount, it might not matter much, and if you're like a lot of people, you may have more accumulated RRSP room than you can reasonably use up. There may be complications if spousal contributions were made into your account during the previous three years.",
"title": ""
},
{
"docid": "4abdf55b8e3aee2b6ddfaed7e3f5b5ee",
"text": "Your biggest concern will be what happens during the transition period. In the past when my employer made a switch there has been a lockout period where you couldn't move money between funds. Then over a weekend the money moved from investment company A to investment Company B. All the moves were mapped so that you knew which funds your money would be invested in, then staring Monday morning you could switch them if you didn't like the mapping. No money is lost because the transfer is actually done in $'s. Imagine both investment companies had the same S&P 500 fund, and that the transfer takes a week. If when the first accounts are closed the S&P500 fund has a share value of $100 your 10 hares account has a value of $1000. If the dividend/capital gains are distributed during that week; the price per share when the money arrives in the second investment company will now be $99. So that instead of 10 shares @ $100 you now will buy 10.101 shares @ $99. No money was lost. You want that lookout period to be small, and you want the number of days you are not invested in the market to be zero. The lockout limits your ability to make investment changes, if for instance the central bank raises rates. The number of days out of the market is important if during that period of time there is a big price increase, you wouldn't want to miss it. Of course the market could also go lower during that time.",
"title": ""
},
{
"docid": "2fcd7fb040ef740738e216a493f8cccd",
"text": "You have to file an application with PF Office. Normally your existing Organisation [which you just quit] helps you with the formalities. If not you would have to complete the same and submit it to the EPFO.",
"title": ""
}
] |
fiqa
|
56d37d9e946acd51da3be2bf2587073b
|
Interest on self assessment tax
|
[
{
"docid": "c409a1afbc53fbc1ed1a0b689ab8c03a",
"text": "Assuming you are Resident Indian. As per Indian Income Tax As per section 208 every person whose estimated tax liability for the year exceeds Rs. 10,000, shall pay his tax in advance in the form of “advance tax”. Thus, any taxpayer whose estimated tax liability for the year exceeds Rs. 10,000 has to pay his tax in advance by the due dates prescribed in this regard. However, as per section 207, a resident senior citizen (i.e., an individual of the age of 60 years or above) not having any income from business or profession is not liable to pay advance tax. In other words, if a person satisfies the following conditions, he will not be liable to pay advance tax: Hence only self assessment tax need to be paid without any interest. Refer the full guideline on Income tax website",
"title": ""
}
] |
[
{
"docid": "818145ff77d44ceac220a0c1f13d4f20",
"text": "NO. The legislation requires the landlord to deposit it in a bank. Check out pages 7-10 of the linked document. There is no mention of interest. The second clause, I believe, is probably for large landlords who hold hundreds of thousands of dollars of security. http://www.legislature.mi.gov/documents/publications/tenantlandlord.pdf Q4 Once collected, what must the landlord do with the security deposit? The landlord must either: a) Deposit the money with a regulated financial institution (e.g., bank), OR b) Deposit a cash bond or surety bond, to secure the entire deposit, with the Secretary of State. ( Note: If the landlord does this, he or she may use the money at any time, for any purpose.) The bond ensures that there is money available to repay the tenant’s security deposit",
"title": ""
},
{
"docid": "fd07b9332ec0af4e8cddc1f4c558f5dc",
"text": "\"From the IRS page on Estimated Taxes (emphasis added): Taxes must be paid as you earn or receive income during the year, either through withholding or estimated tax payments. If the amount of income tax withheld from your salary or pension is not enough, or if you receive income such as interest, dividends, alimony, self-employment income, capital gains, prizes and awards, you may have to make estimated tax payments. If you are in business for yourself, you generally need to make estimated tax payments. Estimated tax is used to pay not only income tax, but other taxes such as self-employment tax and alternative minimum tax. I think that is crystal clear that you're paying income tax as well as self-employment tax. To expand a bit, you seem to be confusing self-employment tax and estimated tax, which are not only two different things, but two different kinds of things. One is a tax, and the other is just a means of paying your taxes. \"\"Self-employment tax\"\" refers to the Social Security and Medicare taxes that you must pay on your self-employment income. This is an actual tax that you owe. If you receive a W-2, half of it is \"\"invisibly\"\" paid by your employer, and half of it is paid by you in the form of visible deductions on your pay stub. If you're self-employed, you have to pay all of it explicitly. \"\"Estimated tax\"\" does not refer to any actual tax levied on anyone. A more pedantically correct phrasing would be \"\"estimated tax payment\"\". Estimated taxes are just payments that you make to the IRS to pay tax you expect to owe. Whether you have to make such payments depends on how much tax you owe and whether you've paid it by other means. You may need to pay estimated tax even if you're not self-employed, although this would be unusual. (It could happen, for instance, if you realized large capital gains over the year.) You also may be self-employed but not need to pay estimated tax (if, for instance, you also have a W-2 job and you reduce your withholding allowances to have extra tax withheld). That said, if you earn significant income from self-employment, you'll likely have to make estimated tax payments. These are prepayments of the income tax and Social Security/Medicare taxes you accrue based on your self-employment income. As Pete B. mentioned in his answer, a possible reason that your estiamtes are low is because some taxes have already been withheld from the paychecks you received so far during the year (while you were an employee). These represent tax payments you've already made; you don't need to pay that money a second time, but you may need to make estimated tax payments for your income going forward.\"",
"title": ""
},
{
"docid": "5cc2b16d5596458579599c53d1788430",
"text": "Am I eligible for the tax exemption if yes then under which section. Generally Personal loans are not eligible for tax exemption. Only housing loans from qualified institutions are eligible for tax deduction. As per the income tax act; The house should be in your name. The home loans taken from recognised institutions are fully qualified under section 24B and 80C. This means you can claim Interest exemption under 24B and Principal repayment under 80C. The Act also specifies that loan can be taken from friends/relatives for construction of property and will be eligible for Interest exemption under 24B only. The principal will not be eligible for exemption under 80C. Read the FAQ from Income Tax India. There has to be certificate showing how much interest was paid on the said loan. Further there should be records/receipts on how the money was spent. There is difference of opinion amongst CA. It is best you take a professional advise.",
"title": ""
},
{
"docid": "d2a61b32f094a6140f2052e568c4a564",
"text": "Some advice from my side: - You can get your tax up to 4 years back, - The prices of tax advisory in Munich (for basic tax declaration) vary from 36 € up to 170 € - Depends how much your earn. Here you can calculate the the price for yourself: http://getdoido.com/tax_declaration If you want to know more how to do the tax declaration by yourself then check my last blog post where I described step-by-step how to make a tax declaration by yourself in Germany :)",
"title": ""
},
{
"docid": "ca8e1d390f305f11925283dd73345691",
"text": "\"Can I claim a 20% of the interest paid over the period of Oct/2015 through Mar/2017 (18 months) when I file for IT returns this year in Mar/2017? Yes you can. Does my name not being the first name affect my eligibility of claiming the relief? No you can claim relief. Joint owners need to file a declaration on the quantum of relief claimed. Both can't claim 100%. Does that mean I my claiming the 20% relief on interest (and the remaining 80% over subsequent years) is in effect moot as my \"\"taxable\"\" income cannot go negative (meaning the govt cannot/will not return some money I have paid as IT in prior years)? If you have no other income on which tax is payable; then Yes it is irrelevant. Does that mean as long as I continue to work in the US (already having become a NRI), have little or no income in India, I cannot claim any future relief regarding the principal or interest? Yes that is right.\"",
"title": ""
},
{
"docid": "cfd81576bb7bf35d9fa0c764680262f3",
"text": "\"No. The full text of the Landlord-Tenant Act (specifically, section 554.614 of Act 348 of the year 1972) makes no mention of this. Searching the law for \"\"interest\"\" doesn't yield anything of interest (pardon the pun). Specifically, section 554.604 of the same law states that: (1) The security deposit shall be deposited in a regulated financial institution. A landlord may use the moneys so deposited for any purposes he desires if he deposits with the secretary of state a cash bond or surety bond written by a surety company licensed to do business in this state and acceptable to the attorney general to secure the entire deposits up to $50,000.00 and 25% of any amount exceeding $50,000.00. The attorney general may find a bond unacceptable based only upon reasonable criteria relating to the sufficiency of the bond, and shall notify the landlord in writing of his reasons for the unacceptability of the bond. (2) The bond shall be for the benefit of persons making security deposits with the landlord. A person for whose benefit the bond is written or his legal representative may bring an action in the district, common pleas or municipal court where the landlord resides or does business for collection on the bond. While it does sound like the landlord is required to deposit the money in a bank or other secured form, e.g. the Secretary of State, he/she isn't required to place it in an account that will earn interest.\"",
"title": ""
},
{
"docid": "962afc559efc7ebe9dc4e91ee1f8af04",
"text": "The answer is simple. You can generally claim a deduction for an expense if that expense was used to derive an income. Most business expenses are used to derive profits and income, most individual expenses are not. Of course social policy sometimes gets in the way and allows for deductions where they usually wouldn't be allowed. Regarding the interest on a mortgage being deductible whilst the principal isn't, that is because it is the interest which is the annual expense. By the way deductions for mortgage interest in the USA for a house you live in is only allowed due to social policy, as there is no income (rent) being produced here, unlike with an investment property.",
"title": ""
},
{
"docid": "8c8165116cc6ac89115f28ca9c924eeb",
"text": "It's for the benefit of the bank, certainly. You might consider it a convenience to write one check, but it comes at a cost. Your cost of money is the interest you pay on the most costly loan you carry. But the escrow account will usually get a low rate of interest, 1% or so today. Also, as I describe in an article titled Fun With Schedule A there's a strategy for those who straddle the line between itemizing and taking the standard deduction. Paying your own tax allows you to pay as much as 6 quarters of property tax in one year and then just two quarters in the next. This opens up a biannual itemizing and a savings on your tax return.",
"title": ""
},
{
"docid": "2fd09b10078171bba36eadd0d1d691d9",
"text": "\"Charging interest by non financial institutions is allowable. There is only one definition of illegal or criminal interest and this is regarding loan sharks. Section 347 of the Canadian Criminal Code makes it illegal to charge more than 60% annually. The biggest debate was whether or not \"\"pay day\"\" loan companies were breaking the law. The recent bill C-26 amends this section to exempt \"\"pay day\"\" loans from this definition.\"",
"title": ""
},
{
"docid": "a0216dbbefba44b03de0d6e2f4a4ac4a",
"text": "I am not an accountant, but I do run a business in the UK and my understanding is that it's a threshold thing, which I believe is £2,500. Assuming you don't currently have to submit self assessment, and your additional income from all sources other than employment (for which you already pay tax) is less than £2,500, you don't have to declare it. Above this level you have to submit self assessment. More information can be found here I also find that HMRC are quite helpful - give them a call and ask.",
"title": ""
},
{
"docid": "4de05fffb7ec3efd621672cdc743e956",
"text": "\"One way to do these sorts of calculations is to use the spreadsheet version of IRS form 1040 available here. This is provided by a private individual and is not an official IRS tool, but in practice it is usually accurate enough for these purposes. You may have to spend some time figuring out where to enter the info. However, if you enter your self-employment income on Schedule C, this spreadsheet will calculate the self-employment tax as well as the income tax. An advantage is that it is the full 1040, so you can also select the standard deduction and the number of exemptions you are entitled to, enter ordinary W-2 income, even capital gains, etc. Of course you can also make use of other tax software to do this, but in my experience the \"\"Excel 1040\"\" is more convenient, as most websites and tax-prep software tend to be structured in a linear fashion and are more cumbersome to update in an ad-hoc way for purposes like tax estimation. You can do whatever works for you, but I would recommend taking a look at the Excel 1040. It is a surprisingly useful tool.\"",
"title": ""
},
{
"docid": "f8e65433179d144a0fa508ebc7a70957",
"text": "Two points You don't really get the full 10,000 annual interest as tax free income. Well you do, but you would have gotten a substantial amount of that anyway as the standard deduction. ...From the IRS.... Standard deduction The standard deduction for married couples filing a joint return is at $11,900 for 2012. The standard deduction for single individuals and married couples filing separate returns is $5,950 for 2012. The standard deduction for heads of household increases by $50 to $8,700 for 2012. so If you were married it wouldn't even make sense to claim the 10,000 mortgage interest deduction as the standard one is larger. It can make sense to do what you are talking about, but ultimately you have to decide what the effective interest rate on your mortgage is and if you can afford it. For instance. I might have a 5% mortgage. If I am in a 20% tax bracket it effectively is a 4% mortgage to me. Even though I am saving tax money I am still paying effectively 4%. Ultimately the variables are too complex to generalize any hard and fast rules, but it often times does make sense. (You should also be aware that there has been some talk of eliminating or phasing out the mortgage interest deduction as a way to close the deficit and reduce the debt.)",
"title": ""
},
{
"docid": "22f025f3845889d3cc252261cb9cc829",
"text": "I will add one point missing from the answers by CQM and THEAO. When you take a loan and invest the proceeds, the interest that you pay on the loan is deductible on Schedule A, Line 14 of your Federal income tax return under the category of Investment Interest Expense. If the interest expense is larger than all your investment earnings (not just those from the loan proceeds), then you can deduct at most the amount of the earnings, and carry over the excess investment interest paid this year for deduction against investment earnings in future years. Also, if some of the earnings are long-term capital gains and you choose to deduct the corresponding investment interest expense, then those capital gains are taxed as ordinary income instead of at the favored LTCG rate. You also have the option of choosing to deduct only that amount of interest that offsets dividend (and short-term capital gain) income that is taxed at ordinary rates, pay tax at the LTCG rate on the capital gains, and carry over rest of the interest for deduction in future years. In previous years when the tax laws called for reduction in the Schedule A deductions for high-income earners, this investment interest expense was exempt from the reduction. Whether future tax laws will allow this exemption depends on Congress. So, this should be taken into account when dealing with the taxes issue in deciding whether to take a loan to invest in the stock market.",
"title": ""
},
{
"docid": "c1c4dca07594fa3b2c1b7bc039462dd7",
"text": "\"My teacher always says the property interest the beneficiary \"\"holds\"\" or \"\"possesses\"\" is an equitable interest. I might just seem out of place here because it's a legal term and probably not commonplace outside that sphere. But the beneficiaries equitable interest is possessed or held in that regard. From this equitable interest is the income stream. If that just seems like a bunch of gibberish to you than don't mind me, just trying to learn the ins and outs of trusts not the world of finance generally.\"",
"title": ""
},
{
"docid": "2b8142ad50cef3b6f65d7a7a071e3b02",
"text": "\"You should really be talking to a tax adviser (EA/CPA licensed in your State) about taxes and to a lawyer about the liability protection. You won't find answers from neither of theses here. Besides the liability protection, how do these 2 options affect taxes? There's no liability protection difference between the two (talk to a lawyer to verify) since you'll be cosigning them personally either way. In the first case (loan to the LLC) - everything goes on the 1065 and you get the bottom line on K-1 which transfers to you own tax return. In the second case the loan interest is your personal investment expense (Schedule A deduction) while the loan proceeds you moved to the LLC add to your basis. I'd suggest getting the loan directly in the LLC name, if you can. However, the Lawyers seem to agree that this would void the mortgage because of the \"\"Due on Sale\"\" clause in mortgage loans. \"\"Due on sale\"\" may or may not be invoked, but that's a risk you'd be taking, yes. LLC is a separate legal entity (as opposed to a living trust, to which your second quote seems to be referring), so it is definitely a possibility for a lender to call on the loan if you re-title it.\"",
"title": ""
}
] |
fiqa
|
c6b371ad3b20ba9fe228f79a47b583a2
|
What's the best way to make money from a market correction?
|
[
{
"docid": "5efc6c902e24c8e389569c5dc1e4bf6e",
"text": "What's the best strategy? Buy low and sell high. Now. A lot of people try to do this. A few are successful, but for the most part, people who try to time the market end up worse. A far more successful strategy is to save over your entire lifetime, put the money into a very low-cost market fund, and just let the average performance take you to retirement. Put another way, if you think that there is an obvious, no-fail, double-your-money-due-to-a-correction strategy, you're wrong. Otherwise everyone would do it. And someone who tells you that there is such a strategy almost surely will be trying to separate you from a good amount of your money. In the end, $80K isn't a life-altering, never-have-to-work-again amount of money. What I think you ought to do with it is: pay off any credit card debts you may have, pay a significant chunk of student loan or other personal loan debts you may have, make sure you have a decent emergency fund set aside, and then put the rest into diversified low-cost mutual funds. Think of it as a nice leg-up towards your retirement.",
"title": ""
},
{
"docid": "10fdb001410920a523661929dc3f27ac",
"text": "The best way to make money during a market correction is to be a financial services company handling transactions for people who think they can beat the market, and charging a percentage commission on each transaction, while keeping your own money somewhere nice and safe, stable and low-fee.",
"title": ""
},
{
"docid": "09e1175420f8c078193d1f53c0e2d9ca",
"text": "\"As ChrisInEdmonton describes, shorting has an asymmetric risk/reward ratio. And put options have a time cost, if you think the market is overvalued and buy lots of puts, but they expire before the market finally corrects, you can lose your entire investment. Betting on market timing of any kind is extremely difficult to do, some would argue it's impossible. \"\"The market can remain irrational longer than you can remain solvent\"\" is a favorite wall street trader saying. Instead of playing a game that's difficult to win, the better option is to play one you can win. That's to learn how to value individual investments well and accumulate cash until you can find investments that are under-valued to invest in. The best way to learn to value investments is to read Graham and Buffett. \"\"The Intelligent Investor\"\" is a good starting point, and you can read all of Buffett's investor letters for the last 30 years + for free on the Berkshire Hathaway web site. Finally the textbook on valuing stocks and other investments is \"\"Securities Analysis\"\" the 6th edition is only version to get, it was updated with Buffett and other leading value investors oversight. A basic overview of valuing investments is that every investment has an \"\"intrinsic value\"\" consisting of it's future cash flows, discounted for the time it takes to receive them. The skill is being able to estimate how likely those cash flows are to happen. a) Is it a good business? Does it have a moat, i.e. barriers that make it hard for competitors to duplicate it? b) Will management invest or distribute those cash flows wisely? Then your strategy is to not even worry about the market, spend your time looking at individual stocks and investments and wait until some come along that's well undervalued. That may be during a market correction, or it may be tomorrow. And it's not just good enough to intelligently value your investments, you also have to have psychological fortitude to not panic and to think for yourself. Buffett describes it best. Ben Graham, my friend and teacher, long ago described the mental attitude toward market fluctuations that I believe to be most conducive to investment success. He said that you should imagine market quotations as coming from a remarkably accommodating fellow named Mr. Market who is your partner in a private business. Without fail, Mr. Market appears daily and names a price at which he will either buy your interest or sell you his. Even though the business that the two of you own may have economic characteristics that are stable, Mr. Market’s quotations will be anything but. For, sad to say, the poor fellow has incurable emotional problems. At times he feels euphoric and can see only the favorable factors affecting the business. When in that mood, he names a very high buy-sell price because he fears that you will snap up his interest and rob him of imminent gains. At other times he is depressed and can see nothing but trouble ahead for both the business and the world. On these occasions he will name a very low price, since he is terrified that you will unload your interest on him. Mr. Market has another endearing characteristic: He doesn’t mind being ignored. If his quotation is uninteresting to you today, he will be back with a new one tomorrow. Transactions are strictly at your option. Under these conditions, the more manic-depressive his behavior, the better for you. But, like Cinderella at the ball, you must heed one warning or everything will turn into pumpkins and mice: Mr. Market is there to serve you, not to guide you. It is his pocketbook, not his wisdom, that you will find useful. If he shows up some day in a particularly foolish mood, you are free to ignore him or to take advantage of him, but it will be disastrous if you fall under his influence. Indeed, if you aren’t certain that you understand and can value your business far better than Mr. Market, you don’t belong in the game. Lastly learning to value investments isn't just useful in the stock market, they are applicable to investing in any investment such as bonds, real estate, and even buying your home or running a business.\"",
"title": ""
},
{
"docid": "adba6287db65fa68298869931d7b20e9",
"text": "There are several ways to protect against (or even profit from) a market correction. Hedge funds do this by hedging, that is, buying a stock that they think is strong and selling short a paired stock that is weak. If you hold, say, a strong retail company in your portfolio, you might sell short an equal weight of a weak retail company. These are like buying insurance on your portfolio. If you own 300 shares of XYZ, currently trading at $68, you buy puts at a level at a strike price that lets you sleep at night. For example, you might buy 3 XYZ 6-month puts with a strike price of $60. A disadvantage is that the puts are wasting assets, that is, their time premium (which you paid for at the outset) becomes zero at expiration. (This is why it is like insurance. You wouldn't complain that your insurance premium was lost when you purchase insurance on your house and the house doesn't burn down, would you? Of course not. The purpose of the insurance is to protect your investment.) Note that as these puts are married, they only protect your portfolio. Instead of profiting from a correction, you would merely protect your portfolio during a correction. (No small feat!) If your portfolio is similar to the market, you can buy S&P index puts. If your market reflects a lot of technology, you can buy technology sector puts. Say you have a portfolio of $80K that reflects the market. You could buy out-of-the-market puts (again reflecting your tolerance for loss). Any losses in your portfolio after the puts go in-the-money would be (more or less) offset by gains in the puts. An advantage is that the bid/ask spread is smaller for the S&P. You would pay less for the protection. Also, the S&P puts are cash settled (meaning you get money put in your account on the business day after expiration day). A disadvantage is that the puts do not linearly go up as the market drops. (Delta hedging is a big deal in and of itself.) Another disadvantage is that they are wasting assets (see the Married puts section, previous). While the S&P puts can be used to maintain your market portfolio in the midst of a correction, you could purchase more puts than needed. If you had correctly timed the market, then your portfolio with puts would increase. (Your mileage may vary; some have predicted an imminent market crash way too often.) Collars involve selling out-of-the-money calls and using the premiums to buy out-of-the-money puts. There are many varieties of collars, but the most straightforward is to sell 1 call and buy 1 put for every 100 shares. (This can also be done for index puts and calls.) This has the effect of simultaneously: You get your insurance for almost free. But again, it is protecting your portfolio. As the name implies, you make money when the market goes bearish. Bear put spreads involve buying puts at a close strike price and selling an equal number of puts at a lower strike price than the first. You have a defined maximum loss (the premium you paid for the higher put minus the premium you received for the lower put). You have a defined maximum gain (the difference between strikes minus the defined maximum loss). Buy S&P 500 index puts. If you buy deep out-of-the-money puts, it won't cost much, but you have little probability of it paying off. But if they go in-the-money, there could be a sizable payoff. This is similar to putting one chip on red 18 on the roulette wheel. But rather than paying off 35:1, it is a variable payoff. If you're $1 in the money, you just get $100. If you're $12 in the money, you have a $1200 payoff. If you buy at-the-money puts, it will cost a lot, and your probability will be about 1 in 2 that you will pay off. In our roulette analogy, this is like putting 30 chips on the Even bet of the roulette wheel. The variable payoff is as in the previous paragraph. But you're more likely to get a payoff. And you will lose it all of the roulette ball lands on an Odd number, 0, or 00. (That is, the underlying of your put goes up or stays the same.) If your research shows you what good stocks to buy, it may also tell you which stocks are ripe for a fall. You could short-sell these stocks or buy puts on them. Similar to short-selling stocks or buying puts, you could sell short overpriced sectors or buy puts on them. There are ETFs that will allow you benefit from falling prices without needing to have a margin agreement or options agreement in place. Sorry to have a lengthy answer. Many other answers emphasize that one shouldn't try to time the market. But that is not the OP's question. Provided here are both:",
"title": ""
},
{
"docid": "ecdaccff108891484c211a4c85f658b2",
"text": "If you are sure you are right, you should sell stock short. Then, after the market drop occurs, close out your position and buy stock, selling it once the stock has risen to the level you expect. Be warned, though. Short selling has a lot of risk. If you are wrong, you could quite easily lose all $80,000 or even substantially more. Consider, for example, this story of a person who had $37,000 and ended up losing all of that and still owing over $100,000. If you mistime your investment, you could quite easily lose your entire investment and end up hundreds of thousands of dollars in debt.",
"title": ""
},
{
"docid": "adf3784d7c0d24870c3d6ccd2fed1685",
"text": "There are a few ways to make money from a market correction:",
"title": ""
},
{
"docid": "8ee0e1c4b0d8c09013cfe6e3b2e1a42d",
"text": "\"Do you want to do it pre or post correction? If you're bearish on the market the obvious thing to do is short an index. I would say this is kind of dumb. The main problem is that it may take months or years for the market to crash, and by then it will have gone up so much that even the crash doesn't bring you profit, and you're paying borrowing fees meanwhile as well. You need to watch the portfolio also, when you short sell you'll get a bunch of cash, which you most likely will want to invest, but once you invest it, the market can spike and pummel your short position, resulting in negative remaining cash (since you already spent it). At that point you get a margin call from your broker. If you check your account regularly, not a big deal, but bad things can happen if you treat it as a fire and forget strategy. These days they have inverse funds so you don't have to borrow anything. The fund manager borrows for you. I'd say those are much better. The less cumbersome choice is to simply sell call options on the index or buy puts. These are even cash options, so when you exercise you get/lose money, not shares. You can even arrange them so that your potential loss is capped. (but honestly, same goes for shorts - it's called a stop loss) You could also wait for the correction and buy the dip. Less worrying about shorts and such, but of course the issue is timing the crash. Usually the crashes are very quick, and there are several \"\"pre-crashes\"\" that look like it bottomed out but then it crashes more. So actually very difficult thing to tell. You have to know either exactly when the correction will be, or exactly what the price floor is (and set a limit buy). Hope your crystal ball works! Yet another choice is finding asset classes uncorrelated or even anticorrelated with the broader market. For instance some emerging markets (developing countries), some sectors, individual stocks that are not inflated, bonds, gold and so on can have these characteristics where if S&P goes down they go up. Buying those may be a safer approach since at least you are still holding a fundamentally valuable thing even if your thesis flops, meanwhile shorts and puts and the like are purely speculative.\"",
"title": ""
},
{
"docid": "733bdfd0269c974184d15a1ad82c5f9a",
"text": "For a non-technical investor (meaning someone who doesn't try to do all the various technical analysis things that theoretically point to specific investments or trends), having a diverse portfolio and rebalancing it periodically will typically be the best solution. For example, I might have a long-term-growth portfolio that is 40% broad stock market fund, 40% (large) industry specific market funds, and 20% bond funds. If the market as a whole tanks, then I might end up in a situation where my funds are invested 30% market 35% industry 35% bonds. Okay, sell those bonds (which are presumably high) and put that into the market (which is presumably low). Now back to 40/40/20. Then when the market goes up we may end up at 50/40/10, say, in which case we sell some of the broad market fund and buy some bond funds, back to 40/40/20. Ultimately ending up always selling high (whatever is currently overperforming the other two) and buying low (whatever is underperforming). Having the industry specific fund(s) means I can balance a bit between different sectors - maybe the healthcare industry takes a beating for a while, so that goes low, and I can sell some of my tech industry fund and buy that. None of this depends on timing anything; you can rebalance maybe twice a year, not worrying about where the market is at that exact time, and definitely not targeting a correction specifically. You just analyze your situation and adjust to make everything back in line with what you want. This isn't guaranteed to succeed (any more than any other strategy is), of course, and has some risk, particularly if you rebalance in the middle of a major correction (so you end up buying something that goes down more). But for long-term investments, it should be fairly sound.",
"title": ""
},
{
"docid": "f363ad8d933469cbe549fa2cf644c45d",
"text": "Depends on how long you're willing to invest for. Broadly speaking, the best (by which I mean, more reliably repeatable) way to make money from market corrections is to accept them as a fact of life, and not sell in a panic when they happen, such that the money you already invested can ride back up again. Put another way, just invest your money in one or two broad, low cost index funds with dividends reinvested (maybe spreading your investment over the course of six months or so) and then let time do its work. Have you worked out how much you've missed out on by holding your money as cash all this time (I presume you've been saving up a while) instead of investing it as you went? I suspect that by waiting for your correction, you've already missed out on more than you're going to make from that correction.",
"title": ""
},
{
"docid": "54b2d8e307104d0ed9651537bd06468e",
"text": "A lot of people here talk about shorting stocks, buying options, and messing around with leveraged ETFs. While these are excellent tools, that offer novel opportunities for the sophisticated investor, Don't mess around with these until you have been in the game for a few years. Even if you can make money consistently right out of the gate, don't do it. Why? Making money isn't your challenge, NOT LOSING money is your challenge. It's hard to measure the scope of the risk you are assuming with these strategies, much less manage it when things head south. So even if you've gotten lucky enough to have figured out how to make money, you surely haven't learned out how to hold on to it. I am certain that every beginner still hasn't figured out how to comprehend risk and manage losing positions. It's one of those things you only figure out after dealing with it. Stocks (with little to no margin) are a great place to learn how to lose because your risk of losing everything is drastically lower than with the aforementioned tools of the sophisticated investor. Despite what others may say you can make out really well just trading stocks. That being said, one of my favorite beginner strategies is buying stocks that dip for reasons that don't fundamentally affect the company's ability to make money in the mid term (2 quarters). Wallstreet loves these plays because it shakes out amateur investors (release bad news, push the stock down shorting it or selling your position, amateurs sell, which you buy at a discount to the 'fair price'.) A good example is Netflix back in 2007. There was a lawsuit because netflix was throttling movie deliveries to high traffic consumers. The stock dropped a good chunk overnight. A more recent example is petrobras after their huge bond sale and subsequent corruption scandal. A lot of people questioned Petrobras' long-term ability to maintain sufficient liquidity to pay back the loans, but the cashflow and long term projections are more than solid. A year later the stock was pushed further down because a lot of amateur Brazilians invest in Petrobras and they sold while the stock was artificially depressed due to a string of corruption scandals and poor, though temporary, economic conditions. One of my favorite plays back in 2008-2011 was First Solar on the run-up to earnings calls. Analysts would always come out of these meetings downgrading the stock and the forums were full of pikers and pumpers claiming heavy put positions. The stock would go down considerably, but would always pop around earnings. I've made huge returns on this move. Those were the good ole days. Start off just googling financial news and blogs and look for lawsuits and/or scandals. Manufacturing defects or recalls. Starting looking for companies that react predictably to certain events. Plot those events on your chart. If you don't know how to back-test events, learn it. Google Finance had a tool for that back in the day that was rudimentary but helpful for those starting out. Eventually though, moreso than learning any particular strategy, you should learn these three skills: 1) Tooling: to gather, manipulate, and visualize data on your own. These days automated trading also seems to be ever more important, even for the small fish. 2) Analytical Thinking learn to spot patterns of the three types: event based (lawsuits, arbitrage, earnings etc), technical (emas, price action, sup/res), or business-oriented (accounting, strategy, marketing). Don't just listen to what someone else says you should do at any particular moment, critical thinking is essential. 3) Emotions and Attitude: learn how to comprehend risk and manage your trigger finger. Your emotions are like a blade that you must sharpen every day if you want to stay in the game. Disclaimer: I stopped using this strategy in 2011, and moved to a pure technical trading regime. I've been out totally out of the game since 2015.",
"title": ""
}
] |
[
{
"docid": "52783402987434f0dd77f7695b1e7b03",
"text": "\"I strongly suggest you read up the Option Greeks. You can be right about a stocks price movement and still not make money b/c other factors come into play from time or volatility. For a \"\"free\"\" option hedge you can look at collars. Buying puts and selling calls to offset the debit you pay for the transaction. Ex: AAPL is 115, You buy the 110 puts and sell the 120 calls. This gives you a collar around he current price. Your hedged below 110 and can still participate in upside move to 120. Also look into time value. Time decays exponentially in the last 30 days. If you are long this hurts you, if you are short(selling) this is good. Be sure to take this into account. Delta: relation of the option to the underlying stock move on a .01-1 scale, .50 is \"\"normal.\"\" Deep in the money options have higher deltas. It is possible other factors can offset this delta move. This is why people will lose money on earnings plays even though they are right. EX: Say you buy an AAPL call at 120, earnings comes out and the stock goes to 121. Even though you are \"\"in the money\"\" your contract may still have less value than what you paid because of VOLATILITY collapse. The market place knows earnings move a stock and that is factored into the price of the options expected volatility. As mentioned watch out for dividend dates. Always be aware of dividend dates and earnings dates and if your contract is going to cover one of these events. Interest rates have an effect as well but since the Fed has near 0 rates there is little impact at the present. Though this could certainly change if the fed starts raising rates. Research the Black Scholes Pricing model. Whenever you trade always think about what the other guys is thinking. Sometimes we forget their is someone else on the other side of my trade that thinks essentially the exact opposite of me. Its a zero sum game. As far as choosing strikes you can look at calculating the At THe money straddle to see if the options are \"\"cheap\"\" [stock Price * Implied Volatility (for 30, 60, 90 days Depending on your holding period)* Sq root of days to expiration] / 19 (which is sq root of days/yr) Add and subtract this number to the current stock price to give you an approximate 1 standard deviation of expected price movement. Keeping with our example. AAPL at 115, lets say your formula spits out a 6; therefore price range is expected to be 109 to 121 for the time period. Helpful for selling options, I would sell the 122 call or the 108 puts. Hope this helps. Start small and get a feel for things.\"",
"title": ""
},
{
"docid": "5ec6f6d74a9946f9c7b7f8f7132d8642",
"text": "I guess I wasn't clear. I want to modestly leverage (3-4x) my portfolio using options. I believe long deep-in-the-money calls would be the best way to do this? (Let me know if not.) It's important to me that the covariance matrix from the equity portfolio scales up but doesn't fundamentally change. (I liken it to systemic change as opposed to idiosyncratic change.) This is what I was thinking: * For the same expiry date, find each positions lowest lambda. * Match all option to the the highest of the lowest lambda. * Adjust number of contracts to compensate for higher leverage. I don't think this will work because if I matched the lowest lambda of options on bond etfs to my equity options they would be out-of-the-money. By the way, thanks for your time.",
"title": ""
},
{
"docid": "48145a232fa675d357bd2ef09fe54701",
"text": "This was the day traders dilemma. You can, on paper, make money doing such trades. But because you do not hold the security for at least a year, the earnings are subject to short term capital gains tax unless these trades are done inside a sheltered account like a traditional IRA. There are other considerations as well: wash sale rules and number of days to settle. In short, the glory days of rags to riches by day trading are long gone, if they were ever here in the first place. Edit: the site will not allow me to add a comment, so I am putting my response here: Possibly, yes. One big 'gotcha' is that your broker reports the proceeds from your sales, but does not report your outflows from your buys. Then there is the risk you take by the broker refusing to sell the security until the transaction settles. Not to mention wash sale rules. You are trying to win at the 'buy low, sell high' game. But you have a 25% chance, at best, of winning at that game. Can you pick the low? Maybe, but you have a 50% chance of being right. Then you have to pick the high. And again you have a 50% chance of doing that. 50% times 50% is 25%. Warren Buffet did not get rich that way. Buffet buys and holds. Don't be a speculator, be a 'buy and hold' investor. Buy securities, inside a sheltered account like a traditional IRA, that pay dividends then reinvest those dividends into the security you bought. Scottrade has a Flexible Reinvestment Program that lets you do this with no commission fees.",
"title": ""
},
{
"docid": "7a02f833c1d38b9690a782247c15885f",
"text": "\"Its bandwidth, so no, it wouldn't clog up the \"\"tubes\"\" like a highway. Everyone who quotes has a fixed amount of bandwidth and an exchange can cut off a firm's connection. The exchanges know who is quoting- you have to buy connections to them to do this stuff. Every exchange I have seen has reporting capability to see who is quoting what, and who is trading what. Whoever is doing this isn't making any money, because they didn't trade anything! Servers and connectivity are expensive, so they are actually losing money. This situation is almost certainly due to either a new algo \"\"soft launching\"\" or being tweaked and having its parameters set too conservatively.\"",
"title": ""
},
{
"docid": "41408550c754bf06e2a72480dd970f12",
"text": "Try https://sparkprofit.com/ You practice with real market prices, and it's free. Plus you can get real money pay outs if you do well. I earned 1 cent! hahaha I gave up trying to make money from it, but you get an idea of doing trades and how impossible it is to predict what the price will be. It has some tutorials and helpful things too.",
"title": ""
},
{
"docid": "1362de224335f15575dc09b18898a99b",
"text": "\"It's called paper trading because you do it on paper. So just do literally that for a little while. Write things down like \"\"buy 100 XYZ at $49.99 on 9/29.\"\" Then note the price each time you look it up, graph it each day, draw trendlines, calculate your ROI, etc. In pencil or ink, up to you. It'll give you good insights into what all that software is trying to do for you, and when it's trying to fool you.\"",
"title": ""
},
{
"docid": "97d606e1bf5eedca0cde9f1fecfc9618",
"text": "\"This is basically martingale, which there is a lot of research on. Basically in bets that have positive expected value such as inflation hedged assets this works better over the long term, than bets that have negative expected value such as table games at casinos. But remember, whatever your analysis is: The market can stay irrational longer than you can stay solvent. Things that can disrupt your solvency are things such as options expiration, limitations of a company's ability to stay afloat, limitations in a company's ability to stay listed on an exchange, limitations on your borrowings and interest payments, a finite amount of capital you can ever acquire (which means there is a limited amount of times you can double down). Best to get out of the losers and free up capital for the winners. If your \"\"trade\"\" turned into an \"\"investment\"\", ditch it. Don't get married to positions.\"",
"title": ""
},
{
"docid": "31aee2d34d62c45dbe1bd0439bd542b1",
"text": "\"A couple options that I know of: Interactive Brokers offers a \"\"paper trading\"\" mode to its account holders that allows you to start with a pretend stack of money and place simulated trades to test trading ideas. They also provide an API that allows you to interface with their platform programmatically for retrieving quotes, placing orders, and the such. As you noted, however, it's not free; you must hold a funded brokerage account in order to qualify for access to their platform. In order to maintain an account, there are minimums for required equity and monthly activity (measured in dollars that you spend on commissions), so you won't get access to their platform without having a decent amount of skin in the game. IB's native API is Java-based; IbPy is an unofficial wrapper that makes the interface available in Python. I've not used IB at all myself, but I've heard good things about their API and its accessibility via IbPy. Edit: IB now supports Python natively via their published API, so using IbPy is no longer needed, unless you wish to use Python 2.x. The officially supported API is based on Python 3. TD Ameritrade also offers an API that is usable by its brokerage clients. They do not offer any such \"\"paper trading\"\" mode, so you would need to \"\"execute\"\" transactions based on quotes at the corresponding trade times and then keep track of your simulated account history yourself. The API supports quote retrieval, price history, and trade execution, among other functions. TDA might be more attractive than IB if you're looking for a low-cost link into market data, as I believe their minimum-equity levels are lower. To get access, you'll need to sign up for an API developer account, which I believe requires an NDA. I don't believe there is an official Python implementation of the API, but if you're a capable Python writer, you shouldn't have trouble hooking up to the published interfaces. Some caveats: as when doing any strategy backtesting, you'll want to be sure to be pessimistic when doing so, so your optimism doesn't make your trades look more successful than they would be in the real world. At a minimum, you'll want to ensure that your simulations transact at the posted bid/ask prices, not necessarily the last trade's price, as well as any commissions and fees associated with the trade. A more robust scheme would also take into account the depth of the order book (also known as level 2 quotes), which can cause additional slippage in the prices at which you buy/sell your security. An even more robust scheme would take into account the potential latency of trade execution, looking at all prices over some time period that covers the maximum expected latency and simulating the trade at the worst-possible price.\"",
"title": ""
},
{
"docid": "41738846c29b227d7c9af116f730c97e",
"text": "Ok so Arbitrage? I was looking specifically at the people who took this deal to the extreme taking the $5k and using the $10 giftcards to buy prepaid credit cards. Would the better term would be positive-feedback loop, since the only constraint would be time and energy to the people exploit this deal. Is there a financial term that fits this better?",
"title": ""
},
{
"docid": "afd55a620b8f7f4be8eb0f72d72178f2",
"text": "\"Being \"\"long\"\" - expecting the price to go up to make a profit - is a two step process: 1) buy 2) sell Being \"\"short\"\" - expecting the price to go down to make a profit - is a 5 step process: 1) borrow someone else's asset 2) sell their asset on the open market to somebody else a third party 3) pocket the proceeds of the sell for your own account 4) buy an identical asset for a cheaper price 5) return this identical asset to the person that let you borrow their asset if this is successful you keep the difference between 3) and 4)\"",
"title": ""
},
{
"docid": "e0e1da3c3c3547ae5780093afe39e3fb",
"text": "Without commenting on your view of the TV market: Let's have a look at the main ways to get negative exposure: 1.Short the stocks Pros: Relatively Easy Cons: Interest rate, costs of shorting, linear bet 2.Options a. Write Calls b. Buy puts Pros: Convexity, leveraged, relatively cheap Cons: Zero Sum bet that expires with time, theta 3.Short Stock, Buy Puts, Write Calls Short X Units of each stock, Write calls on them , use call premiums to finance puts. Pros: 3x the power!, high kickout Cons: Unlimited pain",
"title": ""
},
{
"docid": "63a56308a95aeff53e47b12fe249d161",
"text": "\"You may look into covered calls. In short, selling the option instead of buying it ... playing the house. One can do this on the \"\"buying side\"\" too, e.g. let's say you like company XYZ. If you sell the put, and it goes up, you make money. If XYZ goes down by expiration, you still made the money on the put, and now own the stock - the one you like, at a lower price. Now, you can immediately sell calls on XYZ. If it doesn't go up, you make money. If it does goes up, you get called out, and you make even more money (probably selling the call a little above current price, or where it was \"\"put\"\" to you at). The greatest risk is very large declines, and so one needs to do some research on the company to see if they are decent -- e.g. have good earnings, not over-valued P/E, etc. For larger declines, one has to sell the call further out. Note there are now stocks that have weekly options as well as monthly options. You just have to calculate the rate of return you will get, realizing that underneath the first put, you need enough money available should the stock be \"\"put\"\" to you. An additional, associated strategy, is starting by selling the put at a higher than current market limit price. Then, over a couple days, generally lowering the limit, if it isn't reached in the stock's fluctuation. I.e. if the stock drops in the next few days, you might sell the put on a dip. Same deal if the stock finally is \"\"put\"\" to you. Then you can start by selling the call at a higher limit price, gradually bringing it down if you aren't successful -- i.e. the stock doesn't reach it on an upswing. My friend is highly successful with this strategy. Good luck\"",
"title": ""
},
{
"docid": "67cb69609988f2e18d54cebb5c343b92",
"text": "\"Basically, your question boils down to this: Where and how do I squeeze the stock market so that within time period X, it will make me Y dollars. (Where I'm emotionally attached to the Y figure because I recently lost it, and X is \"\"as soon as possible\"\".) To make money on the stock market (in a quasi-guaranteed way), you have to adjust X and Y so that they are realistic. For instance, let X be twenty-five years, and Y be \"\"7% annual return\"\". Small values of X are risky, unless X is on the order of milliseconds and you have a computer program working for you. To mitigate some of the risk of short term trading, you have to treat trading seriously and study like mad: study the stock market in general, and not only that, but carefully research the companies whose stocks you are buying. Work actively to discover stocks which are under-valued relative to the performance of their corporation, and which might correct upward relative to the performance of similar stocks. Always have an exit strategy for every position and stick to it. Use instruments like \"\"trailing stops\"\": automatic tracking which follows a price in one direction, and then produces an order to close the position when the price reverses by a certain amount.\"",
"title": ""
},
{
"docid": "a4c651b113f4bbcad8715b0faeacc2df",
"text": "This is interesting. The application I'm putting together is more along the lines of automating the research process for a financial professional using a personal algorithm of his. The end goal is to provide him an alert to email when a new report is filed and if his criteria are met based on that report and past reports. Thanks anyway.",
"title": ""
},
{
"docid": "58627b5021c3e0d0ffacd6ce9140b3d8",
"text": "\"This is the best tl;dr I could make, [original](https://www.ips-dc.org/report-corporate-tax-cuts-boost-ceo-pay-not-jobs/) reduced by 87%. (I'm a bot) ***** > Job-cutting firms spent tax savings on buybacks, which inflated CEO pay. > The telecommunications giant managed to get away with an effective tax rate of just 8.1 percent over the 2008-2015 period, while cutting more jobs than any other firm in our sample. > Through extensive use of overseas tax havens, General Electric achieved a negative effective tax rate during the 2008-2015 period, meaning the firm got more back from Uncle Sam than it paid into federal coffers. ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/6x0arp/corporate_tax_cuts_boost_ceo_pay_not_jobs/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ \"\"Version 1.65, ~201277 tl;drs so far.\"\") | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr \"\"PM's and comments are monitored, constructive feedback is welcome.\"\") | *Top* *keywords*: **firm**^#1 **percent**^#2 **CEO**^#3 **tax**^#4 **more**^#5\"",
"title": ""
}
] |
fiqa
|
71bcef2e882b95a5b4d93cea0bb535bf
|
Do I need to prove 'Garage Sale' items incurred a loss
|
[
{
"docid": "a17707555387cb5ceb0dd41a193f5ae5",
"text": "\"This is what this sounds like to me: https://www.thebalance.com/having-a-garage-sale-or-yard-sale-what-to-do-first-399030 also: http://blogs.hrblock.com/2012/07/25/garage-sale-money-does-the-irs-need-to-know/ Selling a personal item at a loss is generally not a taxable event. You cannot report it as a loss, and the IRS can't tax a transaction like that. If you really want to include these as sales as part of your LLC, you'll probably have to pay tax if you list it as income. I'm just confused as to why you'd want to do that, if you know that you're selling these particular items at a loss, and you also know that you have no documentation for them. I just wouldn't report anything you sold at a loss and treat it as \"\"garage sale items\"\" separate from your business.\"",
"title": ""
},
{
"docid": "b45d5ec4b229bc9bf365f2b849ee8988",
"text": "\"-Alain Wertheimer I'm a hobbyist... Most (probably all) of those older items were sold both prior to my establishing the LLC This is a hobby of yours, this is not your business. You purchased all of these goods for your pleasure, not for their future profit. The later items that you bought after your LLC was establish served both purposes (perks of doing what you love). How should I go about reporting this income for the items I don't have records for how much I purchased them for? There's nothing you can do. As noted above, these items (if you were to testify in court against the IRS). \"\"Losses from the sale of personal-use property, such as your home or car, aren't tax deductible.\"\" Source Do I need to indicate 100% of the income because I can't prove that I sold it at a loss? Yes, if you do not have previous records you must claim a 100% capital gain. Source Addition: As JoeTaxpayer has mentioned in the comments, the second source I posted is for stocks and bonds. So at year begin of 2016, I started selling what I didn't need on eBay and on various forums [January - September]. Because you are not in the business of doing this, you do not need to explain the cost; but you do need to report the income as Gross Income on your 1040. Yes, if you bought a TV three years ago for a $100 and sold it for $50, the IRS would recognize you earning $50. As these are all personal items, they can not be deducted; regardless of gain or loss. Source Later in the year 2016 (October), I started an LLC (October - December) If these are items that you did not record early in the process of your LLC, then it is reported as a 100% gain as you can not prove any business expenses or costs to acquire associated with it. Source Refer to above answer. Refer to above answer. Conclusion Again, this is a income tax question that is split between business and personal use items. This is not a question of other's assessment of the value of the asset. It is solely based on the instruments of the IRS and their assessment of gains and losses from businesses. As OP does not have the necessary documents to prove otherwise, a cost basis of $0 must be assumed; thus you have a 100% gain on sale.\"",
"title": ""
}
] |
[
{
"docid": "345c2baf918ace1490b4ed2bc707d123",
"text": "Even if you can afford the loss of the boat because you have other housing options available, can you also afford to lose all your possessions if the boat sinks or is stolen? All of your clothing, electronics, etc can add up to thousands of dollars easily. A significant fraction of that amount are things you'd need to replace quickly, even if you're confident of having somewhere else to live for as long as it takes you get a new boat/apartment/etc.",
"title": ""
},
{
"docid": "aa831d64b6ce98632cf7a569efbab6f6",
"text": "Unfortunately this is something that should have been determined prior to the book tour. Your tax advisor or accountant could have assisted you in making sure you collected the documentation you needed. You are going to have to sit down with your advisor with the documentation you have and determine what you can prove.",
"title": ""
},
{
"docid": "0831ba49c07783c11cda19799c2448d6",
"text": "If I sell it for $50 can I write off the $50 loss. Only if you can establish that it is a normal part of your business and that you did not get $50 worth of use out of it. That's the technical, legal argument. As a practical matter, it's unlikely that they'll ding you for selling something after using it, as they won't know. If they did catch you, you would be in trouble. You can't deduct loss due to personal use. The larger problem is that if you sell one TV for a $50 loss, they aren't going to believe that you are in the business of selling TVs. If you sell a larger amount for a loss, then they still are unlikely to believe that you are in business. If you sell a large amount for an overall gain, they are unlikely to notice that you took a loss on one TV. They could only notice that if they were already auditing you, as that wouldn't be visible in your tax forms.",
"title": ""
},
{
"docid": "3cef4b15724a32fdbb940c05a10463e0",
"text": "I don't think there's much you can do. Losses from the sale of personal-use automobiles (used for pleasure, commuting, etc) are not deductible as capital losses. See IRS Tax Topic 409, end of the first paragraph. The expenses you incurred in owning and operating the car (insurance, fuel, maintenance, service plans, etc) are not deductible either. If you used it partly for business, then some of your expenses might be deductible; see IRS Tax Topic 510. This includes depreciation (decline in value), but only according to a standard schedule; you don't generally just get to deduct the difference between your buying and selling price. Also, you'd need to have records to verify your business use. But anyway, these deductions would apply (or not) regardless of whether you sell the car. You don't get your sales tax refunded when you resell the vehicle. That's why it's a sales tax, not a value-added tax. Note, however, that if you do sell it, the sales tax on this new transaction will be the buyer's responsibility, not yours. You do have the option on your federal income tax return to deduct the state sales tax you paid when you bought the car; in fact, you can deduct all the sales taxes you paid in that year. (If you have already filed your taxes for that year, you can go back and amend them.) However, this takes the place of your state income tax deduction for the year; you can't deduct both. See Tax Topic 503. So this is only useful if your sales taxes for that year exceeded the state income tax you paid in that year. Also, note that state taxes are not deductible on your state income tax return. Again, this deduction applies whether you sell the car or not.",
"title": ""
},
{
"docid": "afde488a531ae9dc216700acfc01f10a",
"text": "I was not able to find any authority for the opinion you suggest. Wash sale rules should, IMHO, apply. According to the regulations, you attribute the newly purchased shares to the oldest sold shares for the purposes of the calculation of the disallowed loss and cost basis. (c) Where the amount of stock or securities acquired within the 61-day period is less than the amount of stock or securities sold or otherwise disposed of, then the particular shares of stock or securities the loss from the sale or other disposition of which is not deductible shall be those with which the stock or securities acquired are matched in accordance with the following rule: The stock or securities acquired will be matched in accordance with the order of their acquisition (beginning with the earliest acquisition) with an equal number of the shares of stock or securities sold or otherwise disposed of. You can resort to the claim that you have not, in fact, entered into the contract within 30 days, but when you gave the instructions to reinvest dividends. I don't know if such a claim will hold, but to me it sounds reasonable. This is similar to the rules re short sales (in (g) there). In this case, wash sale rules will not apply (unless you instructed to reinvest dividends within the 30 days prior to the sale). But I'd ask a tax professional if such a claim would hold, talk to a EA/CPA licensed in your state.",
"title": ""
},
{
"docid": "915ee91396f3b08a0d4af728c8f3d5da",
"text": "\"According to the IRS, you must have written confirmation from your broker \"\"or other agent\"\" whenever you sell shares using a method other than FIFO: Specific share identification. If you adequately identify the shares you sold, you can use the adjusted basis of those particular shares to figure your gain or loss. You will adequately identify your mutual fund shares, even if you bought the shares in different lots at various prices and times, if you: Specify to your broker or other agent the particular shares to be sold or transferred at the time of the sale or transfer, and Receive confirmation in writing from your broker or other agent within a reasonable time of your specification of the particular shares sold or transferred. If you don't have a stockbroker, I'm not sure how you even got the shares. If you have an actual stock certificate, then you are selling very specific shares and the purchase date corresponds to the purchase date of those shares represented on the certificate.\"",
"title": ""
},
{
"docid": "ed78f35d2db90200e5a3c241f8caba8d",
"text": "In addition to the adjustment type in NL7's answer, there are a host of others. If there are any adjustments, form 8949 is required, if not, the gains can be separated into short and long-term and added together to be entered on Schedule D. Anything requiring an adjustment code in column F of the 8949 requires an entry in column G. Some other example entries for column F include: (see the 8949 instructions for a complete list) **A wash sale occurs when you sell or trade stock or securities at a loss and within 30 days before or after the sale you: Buy substantially identical stock or securities, Acquire substantially identical stock or securities in a fully taxable trade, Acquire a contract or option to buy substantially identical stock or securities, or Acquire substantially identical stock for your individual retirement account (IRA) or Roth IRA. (from Pub17)",
"title": ""
},
{
"docid": "2d258d9865dc769c64e985ecef06366c",
"text": "1: Gambling losses not in excess of gambling winnings can be deducted on Schedule A, line 28. See Pub 17 (p 201). Line 28 catches lots of deductions, and gambling losses are one of them. See Schedule A instructions. 2: If the Mississippi state tax withheld was an income tax (which I assume it was), then it goes on Schedule A, line 5a. In the unlikely event it was not a state or local tax on income, but some sort of excise on gambling, then it may be deductible on line 8 as another deductible tax. It probably is not a personal property tax, which is generally levied against the value of things like cars and other movable property but not on receipts of cash; line 7 probably is not appropriate. The most likely result, without researching Mississippi SALT, is that it was an income tax. See Sched A Instructions for more on the differences between the types of taxes paid. Just to be clear, these statements hold if you are not engaging in poker as a profession. If you are engaging in poker as a business, which can be difficult to establish in the IRS' eyes, then you would use Schedule C and also report business and travel expenses. But the IRS is aware that people want to reduce their gambling income by the cost of hotels and flights to casinos, so it's a relatively high hurdle to be considered a professional poker player.",
"title": ""
},
{
"docid": "ae96ebf7c42b5aa8611e7c1b9890c299",
"text": "First - get a professional tax consultation with a NY-licensed CPA or EA. At what point do I need to worry about collecting sales taxes for the city and state of New York? Generally, from the beginning. See here for more information on NYS sales tax. At what point do I need to worry about record-keeping to report the income on my own taxes? From the beginning. Even before that, since you need the records to calculate the costs of production and expenses. I suggest starting recording everything, as soon as possible. What sort of business structures should I research if I want to formalize this as less of a hobby and more of a business? You don't have to have a business structure, you can do it as a sole proprietor. If you're doing it for-profit - I suggest treating it as a business, and reporting it on your taxes as a business (Schedule C), so that you could deduct the initial losses. But the tax authorities don't like business that keep losing money, so if you're not expecting any profit in the next 3-4 years - keep it reported as a hobby (Misc income). Talk to a licensed tax professional about the differences in tax treatment and reporting. You will still be taxed on your income, and will still be liable for sales tax, whether you treat it as a hobby or as a business. Official business (for-profit activity) will require additional licenses and fees, hobby (not-for-profit activity) might not. Check with the local authorities (city/county/State).",
"title": ""
},
{
"docid": "df72925f51029c060510200978db244d",
"text": "Yes. This income would be reported on schedule SE. Normally, you will not owe any tax if the amount is less than $400. Practically, $100 in a garage sale is not why the IRS created the form SE. I wouldn't lose sleep over keeping track of small cash sales over the course of a year. However, if you have the information I'm not going to tell you not to report it.",
"title": ""
},
{
"docid": "69244fe41231d70ad9024bb0c7344d57",
"text": "It sounds like the items shipped directly from the vendor need to be recorded into your system when the order is confirmed, that way cost of goods sold and revenue don't get lost. You'll have a record of re-orders and cancels and other such things too.",
"title": ""
},
{
"docid": "998c6bb64e219b1c2a9fa3c93102ef7f",
"text": "If you were a business, all your assets would have a dollar value, so when you sold them you'd decrease the amount of assets by that amount and increase in cash, and if there was a profit on the sale it would go in as income, if there was loss it would count as a cost (or a loss)... so if there was a profit it would increase Equity, a loss then it would decrease Equity. Since it's not really worthwhile doing a estimated cost for everything that you have, I'd just report it as income like you are doing and let the amount of equity increase proportionately. So, implicitly you always had roughly that amount of equity, but some of it was in the form of assets, and now you're liquidating those assets so the amount shows up in GnuCash. When you buy new things you might sell later, you could consider adding them as assets to keep track of this explicitly (but even then you have problems-- the price of things changes with time and you might not want to keep up with those price changes, it's a lot of extra work for a family budget) -- for stuff you already have it's better to treat things as you are doing and just treat the money as income-- it's easier and doesn't really change anything-- you always had that in equity, some of it was just off the books and now you are bringing it into the books.",
"title": ""
},
{
"docid": "c9ce99cbf2297731cc659b420f44965c",
"text": "Could be. I haven't read the law or how its written nor am I a lawyer. Just saying there's usually a way around these things. They could also make the business decision that the risk of lost sales is worth the potential lawsuit loss. We're all just pontificating here ¯\\_(ツ)_/¯",
"title": ""
},
{
"docid": "8e68970aacbf14e3736a013bdb688412",
"text": "In the terms of profit, you're most likely not going to make any. The other posters had good suggestions about donating and I say the same. The fact that you had no business insurance leads me to believe that you may just have an expensive hobby and not an actual business. Talk to your accountant/tax preparer and see what and how much loss can be deducted, although that doesn't help in the present. This is a hard lesson to learn but I hope it sticks. **Always** have business insurance, especially in an area such as yours where hurricanes are relatively normal. It's absurdly foolish and unacceptable not to have insurance. I hope all works out.",
"title": ""
},
{
"docid": "9d1a7f1944348ed00e9367a5fcb54ad7",
"text": "\"Well, I'd probably need to buy a lot more [Tide](http://nymag.com/news/features/tide-detergent-drugs-2013-1) to hide any purchases I don't want Uncle Sam to know about (not just drugs, either - When's the last time you paid sales tax at a yard sale?). Other than that, I doubt it would matter much. 99.9% of my financial transactions are *already* on plastic, and I regularly keep the same \"\"emergency $20 bill\"\" in my wallet for months at a time.\"",
"title": ""
}
] |
fiqa
|
a71123dda525e994d8a7b4cf5cb74266
|
Where can I find definitive terms for a preferred share?
|
[
{
"docid": "29aa93d3c3af81a6236d2e1905ada5a1",
"text": "This site has the best information I could find, other than a Bloomberg terminal: Quantumonline.com QUANTUMONLINE.COM SECURITY DESCRIPTION: SCANA Corp., 2009 Series A, 7.70% Enhanced Junior Subordinated Notes, issued in $25 denominations, redeemable at the issuer's option on or after 1/30/2015 at $25 per share plus accrued and unpaid interest, and maturing 1/30/2065 which may be extended to 1/30/2080. Interest distributions of 7.70% ($1.925) per annum are paid quarterly on 1/30, 4/30, 7/30 & 10/30 to holders of record on the record date which is the business day prior to the payment date (NOTE: the ex-dividend date is at least 2 business days prior to the record date). Distributions paid by these debt securities are interest and as such are NOT eligible for the preferential 15% to 20% tax rate on dividends and are also NOT eligible for the dividend received deduction for corporate holders. Units are expected to trade flat, which means accrued interest will be reflected in the trading price and the purchasers will not pay and the sellers will not receive any accrued and unpaid interest. The Notes are unsecured and subordinated obligations of the company and will rank equally with all existing and future unsecured and subordinated indebtedness of the company. See the IPO prospectus for further information on the debt securities by clicking on the ‘Link to IPO Prospectus’ provided below.",
"title": ""
}
] |
[
{
"docid": "2051b0442778b10df3a99b7fb3ac4b96",
"text": "\"That share class may not have a ticker symbol though \"\"Black Rock MSCI ACWI ex-US Index\"\" does have a ticker for \"\"Investor A\"\" shares that is BDOAX. Some funds will have multiple share classes that is a way to have fees be applied in various ways. Mutual fund classes would be the SEC document about this if you want a government source within the US around this. Something else to consider is that if you are investing in a \"\"Fund of funds\"\" is that there can be two layers of expense ratios to consider. Vanguard is well-known for keeping its expenses low.\"",
"title": ""
},
{
"docid": "62018e52ddd02eed1e4c34166f6a7ae2",
"text": "\"There are several such \"\"lists.\"\" The one that is maintained by the company is called the shareholder registry. That is a list that the company has given to it by the brokerage firms. It is a start, but not a full list, because many individual shareholders hold their stock with say Merrill Lynch, in \"\"street name\"\" or anonymously. A more useful list is the one of institutional ownership maintained by the SEC. Basically, \"\"large\"\" holders (of more than 5 percent of the stock) have to register their holdings with the SEC. More to the point, large holders of stocks, the Vanguards, Fidelitys, etc. over a certain size, have to file ALL their holdings of stock with the SEC. These are the people you want to contact if you want to start a proxy fight. The most comprehensive list is held by the Depositary Trust Company. People try to get that list only in rare instances.\"",
"title": ""
},
{
"docid": "135120000e9b25f90f97beb69b319bff",
"text": "How to 'use' your shares: If you own common shares in a company (as opposed to a fund) then you have the right (but not the obligation) to excersize one vote per share on questions put before the shareholders. Usually, this occurs once a year. Usually these questions regard approval of auditors. Sometimes they involve officers such as directors on the board. You will be mailed a form to fill out and mail back in. Preferred shares usually are not voting shares,but common shares always are. By the way, I do not recommend owning shares in companies. I recommend funds instead,either ETFs or mutual funds. Owning shares in companies puts you at risk of a failure of that company. Owning funds spreads that risk around,thus reducing your exposure. There are, really, two purposes for owning shares 1) Owning shares gives you the right to declared dividends 2) Owning shares allows you to sell those shares at some time in the future. (Hopefully at a profit) One obscure thing you can do with owned shares is to 'write' (sell) covered put options. But options are not something that you need to concern yourself with at this point. You may find it useful to sign up for a free daily email from www.investorwords.com.",
"title": ""
},
{
"docid": "eec00fac4023bd89d4a52ab034993c41",
"text": "If you want to go far upstream, you can get mutual fund NAV and dividend data from the Nasdaq Mutual Fund Quotation Service (MFQS). This isn't for end-users but rather is offered as a part of the regulatory framework. Not surprisingly, there is a fee for data access. From Nasdaq's MFQS specifications page: To promote market transparency, Nasdaq operates the Mutual Fund Quotation Service (MFQS). MFQS is designed to facilitate the collection and dissemination of daily price, dividends and capital distributions data for mutual funds, money market funds, unit investment trusts (UITs), annuities and structured products.",
"title": ""
},
{
"docid": "4d6f7aaab66362044861af30f6dad102",
"text": "I find the reg, at last. https://www.sec.gov/cgi-bin/browse-edgar?company=Cornerstone+Strategic+Value+Fund&owner=exclude&action=getcompany Yes, its a common stock.",
"title": ""
},
{
"docid": "36347183e3c2c8963ed56ec4fa8468dc",
"text": "If the share is listed on a stock exchange that creates liquidity and orderly sales with specialist market makers, such as the NYSE, there will always be a counterparty to trade with, though they will let the price rise or fall to meet other open interest. On other exchanges, or in closely held or private equity scenarios, this is not necessarily the case (NASDAQ has market maker firms that maintain the bid-ask spread and can do the same thing with their own inventory as the specialists, but are not required to by the brokerage rules as the NYSE brokers are). The NYSE has listing requirements of at least 1.1 million shares, so there will not be a case with only 100 shares on this exchange.",
"title": ""
},
{
"docid": "ccc65bbb1614f209f9f526eccf3e7119",
"text": "\"The term you're looking for is yield (though it's defined the other way around from your \"\"payout efficiency\"\", as dividend / share price, which makes no substantive difference). You're simply saying that you want to buy high-yield shares, which is a common investment strategy. But you have to consider that often a high-yielding share has a reason for the high yield. You probably don't want to buy shares in a company whose current yield is 10% but will go into liquidation next year.\"",
"title": ""
},
{
"docid": "daee5006ebc47e993c1da7252b2bdb37",
"text": "Preferred stocks are, err... Preferred. The whole point of preferred stocks is that they have some preference over other classes of stocks (there may be more than 2, by the way). It can be more voting rights, more dividends or priority on dividends' distribution (common with VC investments), or priority on liquidations (in bankruptcy, preferred stock holders are ranked higher than common). Many times initial or critical investments are made on preferred terms, and the stocks are converted to common when certain thresholds are met. Obviously all these benefits require a premium on the price.",
"title": ""
},
{
"docid": "20c9e9ae8c397b3bcdda3a75e314265a",
"text": "You can write industry loss warrants. This is the closest thing I’ve found since I’ve been interested in this side of the ILS trade. Hedge funds and asset managers can do this. From what I understand it’s you selling the risk. Want to start a fund? 🤔",
"title": ""
},
{
"docid": "93fab222b68576800518b5b1a4e554ec",
"text": "Coca Cola doesn't seem to have any preferred shares outstanding. From the annual report, it does say that the number of common shares outstanding was 2,294,316,831 as of February 22, 2011. (cover page, right before the horizontal break) But normally, you can find it either toward the beginning of the document or in the statement of shareholder's equity.",
"title": ""
},
{
"docid": "864377bc38eace23fc5c87a8d9cd31bd",
"text": "True blue preferred shares are considered loose hybrids of credit and equity. They are more senior than common equity in bankruptcy liquidation but pay out a dividend which is not mandatory. Financial institutions issue the bulk of genuine preferred shares because of their need for more flexibility than a bond but not so much that they can afford the cost to shareholders by diluting common equity. Since it is a credit-like security that receives none of the income from operations but merely pays out a potentially unpredictable yet fixed amount of income, it will perform much more like a bond, rising when interest rates fall and vice versa, and since interest rates do not move to the extent of common equity valuations, preferreds' price variances will correspond much more to bonds than common equities. If the company stops paying the preferred dividend or looks to become in financial trouble, the price of the preferred share should be expected to fall. There are more modern preferred however. It has now become popular to fund intermediate startups with convertible preferred shares. Because these are derivatives based upon the common equity, they can be expected to be much more variant.",
"title": ""
},
{
"docid": "7a53c5f4ce1cf486607686d161248249",
"text": "\"The official source is the most recent Form 13F that Berkshire Hathaway, which is filed with the Securities & Exchange Commission on a quarterly basis . You can find it through the SEC filing search engine, using BRKA as the ticker symbol. and then looking for the filings marked 13-FR or 13-FR/A (the \"\"/A\"\" indicates an amended filing). As you can see by looking at the 13-F filed for the quarter ending September 30 , the document isn't pretty or necessarily easy to read, hence the popularity of sites such as those that Chad linked to. It is, though, the truly official source from which websites tracking the Berkshire Hathaway portfolio derive their information.\"",
"title": ""
},
{
"docid": "b891f946fa4bcd62c8d9379a78d169d9",
"text": "I agree that a random page on the internet is not always a good source, but at the same time I will use Google or Yahoo Finance to look up US/EU equities, even though those sites are not authoritative and offer zero guarantees as to the accuracy of their data. In the same vein you could try a website devoted to warrants in your market. For example, I Googled toronto stock exchange warrants and the very first link took me to a site with all the information you mentioned. The authoritative source for the information would be the listing exchange, but I've spent five minutes on the TSX website and couldn't find even a fraction of the information about that warrant that I found on the non-authoritative site.",
"title": ""
},
{
"docid": "d666c38057c10de0df25b0b819739a26",
"text": "It doesn't matter which exchange a share was purchased through (or if it was even purchased on an exchange at all--physical share certificates can be bought and sold outside of any exchange). A share is a share, and any share available for purchase in New York is available to be purchased in London. Buying all of a company's stock is not something that can generally be done through the stock market. The practical way to accomplish buying a company out is to purchase a controlling interest, or enough shares to have enough votes to bind the board to a specific course of action. Then vote to sell all outstanding shares to another company at a particular fixed price per share. Market capitalization is an inaccurate measure of the size of a company in the first place, but if you want to quantify it, you can take the number of outstanding shares (anywhere and everywhere) and multiply them by the price on any of the exchanges that sell it. That will give you the market capitalization in the currency that is used by whatever exchange you chose.",
"title": ""
},
{
"docid": "9b42ee8b333f4eda0048aaa07d6c5a1c",
"text": "Edgar Online is the SEC's reporting repository where public companies post their forms, these forms contain financial data Stock screeners allow you to compare many companies based on many financial metrics. Many sites have them, Google Finance has one with a decent amount of utility",
"title": ""
}
] |
fiqa
|
2acdfc7a40eb13db544dc50c9a7d97eb
|
Should we prepay our private student loans, given our particular profile?
|
[
{
"docid": "bf79dde3dc875f2fbf63f83f73b19f09",
"text": "See my recent answer to a similar question on prepaying a mortgage versus investing in IRA. The issue here is similar: you want to compare the relative rates of funding your retirement account versus paying down your debt. If you can invest at a better rate than you are paying on your debt, with similar risk, then you should invest. Otherwise, pay down your debt. The big difference with your situation is that you have a variable rate loan, so there's a significant risk that the rate on it will go up. If I was in your shoes, I would do the following: But that's me. If you're more debt-averse, you may decide to prepay that fixed rate loan too.",
"title": ""
},
{
"docid": "ad5a08fcdf9d3d33c9c3968767b43b31",
"text": "\"You're in good shape as long as your income stays. Your only variable-rate debt now is your private student loan. I think you'd be wise to pay that down first, and you sense that already. Worst-case, in the event of a bankruptcy, student loans usually cannot be discharged, so that isn't a way out. Once that loan is gone, apply what you were paying to your other student loan to knock that out. You might investigate refinancing your home (to another 30-year fixed). You may be able to shave a half-percent off if your credit is stellar. Given the size of the mortgage, this could be several thousand out of pocket, so consider that when figuring out potential payback time. Consider using any \"\"free time\"\" to starting up a side business (I'm assuming you both have day jobs but that may not be a correct assumption). Start with what you know well. You and your wife are experts in something, and have passion about something. Go with that. Use the extra income from that to either pay down your debts faster, or just reinvest in the business so that you can offset the income on your taxes. Again, you're in good shape. Just do what you can to protect and grow your income streams.\"",
"title": ""
},
{
"docid": "66d1c6d62fb4b1cb88089c3cfedc583b",
"text": "You're doing great. I'd suggest trying get putting 5-10% towards your retirement and the balance to the student loans. You are a little weak in retirement savings, but you have $550k house with 20% equity that you bought at the bottom of the market. That's a smart investment IMO, and in my mind compensates somewhat for your low 401k balance. If I were you, I would retire the student loans ASAP to reduce the money that you have to shell out each month. That way, you have the option of scaling back you or your wife's work somewhat to avoid paying thousands for child care. In my mind, less debt == more options, and I like options.",
"title": ""
},
{
"docid": "dbb1a5aaa7bc8c7f62db10fa77815473",
"text": "Based on your numbers, it sounds like you've got 12 years left in the private student loan, which just seems to be an annoyance to me. You have the cash to pay it off, but that may not be the optimal solution. You've got $85k in cash! That's way too much. So your options are: -Invest 40k -Pay 2.25% loan off -Prepay mortgage 40k Play around with this link: mortgage calculator Paying the student loan, and applying the $315 to the monthly mortgage reduces your mortgage by 8 years. It also reduces the nag factor of the student loan. Prepaying the mortgage (one time) reduces it by 6 years. (But, that reduces the total cost of the mortgage over it's lifetime the most) Prepaying the mortgage and re-amortizing it over thirty years (at the same rate) reduces your mortgage payment by $210, which you could apply to the student loan, but you'd need to come up with an extra $105 a month.",
"title": ""
},
{
"docid": "10a507f344ac4ddd357f62b4226c4b24",
"text": "Just for another opinion, radio host Clark Howard would suggest killing the private student loans as quickly as possible. The only reason is the industry around private student loans has fewer rules as to how they interact with you, and they have historically been very unpleasant if you have to deal with them in bad financial times. As a safety net, get rid of the private student loans as your main focus while you have the money and rates are low. Not for financial reasons per se, but for peace of mind. The other advice in this question are great, but nobody mentioned the potential dark side of private student loans.",
"title": ""
},
{
"docid": "2669a33346db6bd7409b21f9213218ad",
"text": "Don't frett to much about your retirement savings just put something towards it each year. You could be dead in ten years. You should always try to clear out debt when you can. But don't wipe yourself out! Expedite the repayment process.",
"title": ""
}
] |
[
{
"docid": "4dba527ceeb1a824675dbc76b6a6cc12",
"text": "\"Let me run some simplistic numbers, ignoring inflation. You have the opportunity to borrow up to 51K. What matters (and varies) is your postgraduation salary. Case 1 - you make 22K after graduation. You pay back 90 a year for 30 years, paying off at most 2700 of the loan. In this case, whether you borrow 2,800 or 28,000 makes no difference to the paying-off. You would do best to borrow as much as you possibly can, treating it as a grant. Case 2 - you make 100K after graduation. You pay back over 7K a year. If you borrowed the full 51, after 7 or 8 years it would be paid off (yeah, yeah, inflation, interest, but maybe that might make it 9 years.) In this case, the more you borrow the more you have to pay back, but you can easily pay it back, so you don't care. Invest your sponsorships and savings into something long term since you know you won't be needing to draw on them. Case 3 - you make 30K after graduation. Here, the payments you have to make actually impact how much disposable income you have. You pay back 810 a year, and over 30 years that's about 25K of principal. It will be less if you account for some (even most) of the payment going to interest, not principal. Anything you borrow above 25K (or the lower, more accurate amount) is \"\"free\"\". If you borrow substantially less than that (by using your sponsorship, savings, and summer job) you may be able to stop paying sooner than 30 years. But even if you borrow only 12K (or half the more accurate number), it will still be 15 years of payments. Running slightly more realistic versions of these calculations where your salary goes up, and you take interest into account, I think you will discover, for each possible salary path, a number that represents how much of your loan is really loan: everything above that is actually a grant you do not pay back. The less you are likely to make, the more of it is really grant. On top of that, it seems to me that no matter the loan/grant ratio, \"\"borrow as much as you can from this rather bizarre source\"\" appears to be the correct answer. In the cases where it's all loan, you have a lot of income and don't care much about this loan payment. Borrowing the whole 51K lets you invest all the money you get while you're a student, and you can use the returns on those investments to make the loan payments.\"",
"title": ""
},
{
"docid": "a16fe512e77ac7326692ebf030b55473",
"text": "Is there anything here I should be deathly concerned about? I don't see anything you should be deathly concerned about unless your career outlook is very poor and you are making minimum wage. If that is the case you may struggle for the next 10 years. Are these rates considered super high or manageable? The rates for the federal loans are around twice as high as your private loans but that is the going rate and there is nothing you can do about it now. 6.5% isn't bad on what is essentially a personal loan. 2-3% are very manageable assuming you pay them and don't let the interest build up. What is a good mode of attack here? I am by no means a financial adviser and don't know the rest of your financial situation, but the most general advice I can give you is pay down your highest interest rate loans first and always try to pay more than the minimum. In your case, I would put as much as you reasonably can towards the federal loans because that will save you money in the long run. What are the main takeaways I should understand about these loans? The main takeaway is that these are student loans and they cannot be discharged if you were to ever declare bankruptcy. Pay them off but don't be too concerned about them. If you do apply for loans in the future, most lenders won't be too concerned about student loans assuming you are paying them on time and especially if you are paying more than the minimum payment. What are the payoff dates for the other loans? The payoff dates for the other loans are a little hard to easily calculate, but it appears they all have different payoff dates between 8 and 12 years from now. This part might be easier for someone who is better at financial calculations than me. Why do my Citi loans have a higher balance than the original payoff amounts? Your citi loans have a higher balance probably because you have not payed anything towards them yet so the interest has been accruing since you got them.",
"title": ""
},
{
"docid": "69100a1275675a01cd3378b1156f262a",
"text": "Does that justify the purpose? That is for individual Banks to decide. No bank would pay for daily expenditure if you are saying primary salary you are spending on eduction. So your declaration is right. You are looking at funding your eduction via loan and you are earning enough for living and paying of the loan. I noticed that a lot of lenders do not lend to applicants whose purpose is to finance the tuition for post-secondary education This could be because the lenders have seen larger percentage defaults when people opt for such loans. It could be due to mix of factors like the the drag this would cause to an individual who may not benefit enough in terms of higher salary to repay the loan, or moves out of country getting a better job. If it is education loan, have you looked at getting scholarships or student loans.",
"title": ""
},
{
"docid": "277d80fd228820ac4ab713d9f9397aa7",
"text": "Nope. If there is no prepayment penalty go for it. Find another credit source to use (like a credit card you pay off every month) if you want to get a long history. Saving money on interest is more important to me than minutia in a credit score.",
"title": ""
},
{
"docid": "e6d69a6de6af68379bf6eb0bb4cade98",
"text": "It used to be much more common, particularly for sub-prime loans. If you do run into someone offering a loan with a prepayment penalty, you should certainly consider other options.",
"title": ""
},
{
"docid": "9ab7a895569eedf19577c89144cf4853",
"text": "\"I think you're right that from a pure \"\"expected future value\"\" perspective, it makes sense to pay this loan off as quickly as possible (including not taking the next year's loan). The new student loans with the higher interest rates have changed the balance enough that it's no longer automatically better to keep it going as long as possible. The crucial point in your case, which isn't true for many people, is that you will likely have to pay it off eventually anyway and so in terms of net costs over your lifetime you will do best by paying it off quickly. A few points to set against that, that you might want to consider: Not paying it off is a good hedge against your career not going as well as you expect, e.g. if the economy does badly, you have health problems, you take a career break for any reason. If that happens, you would end up not being forced to pay it off, so will end up gaining from not having done so voluntarily. The money you save in that case could be more valuable to you that the money you would lose if your career does go well. Not paying it off will increase your net cash earlier in life when you are more likely to need it, e.g. for a house deposit. Having more free cash could increase your options, making it possible to buy a house earlier in life. Or it could mean you have a higher deposit when you do buy, reducing the interest rate on the entire mortgage balance. The savings from that could end up being more than the 6% interest on the loan even though when you look at the loan in isolation it seems like a very bad rate.\"",
"title": ""
},
{
"docid": "16b5461a6c70f2455cb4246df9bb4894",
"text": "Welcome to Money.SE. As Dheer notes, we can come up with pretty good advice with more details. Absent any more information, I'd offer this - money withdrawn today, from a traditional IRA, is subject to tax and 10% penalty. The day you turn 59-1/2, that 10% penalty evaporates. Withdrawals at that time are still subject to ordinary tax at your marginal rate. If you happen to be in the 15% bracket, it may make sense (at 59.5) to withdraw enough to top off that bracket and use the extra money to supplement those payments. If you are already a 25%er, you have to decide whether this money is better spent paying the loans early. Much of that decision is based on the rates involved. More important, in my opinion. what is the child doing? You borrowed money (I assume) to send a kid to college, and now he's out. Is he not able to chip in? $715K in retirement is pretty great, in the higher end of what pre-retirees have. It translates to just under $30K/yr in withdrawals at retirement. A decent number, really, but not a number that has you comfortably paying for this debt.",
"title": ""
},
{
"docid": "d1b2f77f6f2746a5125e75319fd7a577",
"text": "3 years ago I wrote Student Loans and Your First Mortgage in response to this exact question by a fellow blogger in my state. What I focused on was the way banks qualify you for a loan, a percentage for the housing cost, and a higher number that also comprises all other debt. If the goal is speed-to-purchase, you make minimum payments on the student loan, and save for the $100K downpayment as fast as you can. The question back to you is whether the purchase is your priority, and how debt averse you are. I'd caution, if you work for a company with a matched 401(k), I'd still deposit to the match, but no more. Personal finance is just that, personal. We don't know your entire situation, your current rental expenses vs your total condo cost when you buy. If you are in a location where renting costs far more than your cost of ownership, Ben might change his mind a bit. If the reverse is true, you're living a college student's lifestyle with a room costing $400/mo sharing a house with friends, I'll back off and say to pay the loan and save until you can't tolerate the situation. You'll find there are few situations that have a perfect answer without having all the details.",
"title": ""
},
{
"docid": "ce8676528e1a2a117a0179043c2db82d",
"text": "\"Money is a token that you can trade to other people for favors. Debt is a tool that allows you to ask for favors earlier than you might otherwise. What you have currently is: If the very worst were to happen, such as: You would owe $23,000 favors, and your \"\"salary\"\" wouldn't make a difference. What is a responsible amount to put toward a car? This is a tricky question to answer. Statistically speaking the very worst isn't worth your consideration. Only the \"\"very bad\"\", or \"\"kinda annoying\"\" circumstances are worth worrying about. The things that have a >5% chance of actually happening to you. Some of the \"\"very bad\"\" things that could happen (10k+ favors): Some of the \"\"kinda annoying\"\" things that could happen (~5k favors): So now that these issues are identified, we can settle on a time frame. This is very important. Your $30,000 in favors owed are not due in the next year. If your student loans have a typical 10-year payoff, then your risk management strategy only requires that you keep $3,000 in favors (approx) because that's how many are due in the next year. Except you have more than student loans for favors owed to others. You have rent. You eat food. You need to socialize. You need to meet your various needs. Each of these things will cost a certain number of favors in the next year. Add all of them up. Pretending that this data was correct (it obviously isn't) you'd owe $27,500 in favors if you made no money. Up until this point, I've been treating the data as though there's no income. So how does your income work with all of this? Simple, until you've saved 6-12 months of your expenses (not salary) in an FDIC or NCUSIF insured savings account, you have no free income. If you don't have savings to save yourself when bad things happen, you will start having more stress (what if something breaks? how will I survive till my next paycheck? etc.). Stress reduces your life expectancy. If you have no free income, and you need to buy a car, you need to buy the cheapest car that will meet your most basic needs. Consider carpooling. Consider walking or biking or public transit. You listed your salary at \"\"$95k\"\", but that isn't really $95k. It's more like $63k after taxes have been taken out. If you only needed to save ~$35k in favors, and the previous data was accurate (it isn't, do your own math): Per month you owe $2,875 in favors (34,500 / 12) Per month you gain $5,250 in favors (63,000 / 12) You have $7,000 in initial capital--I mean--favors You net $2,375 each month (5,250 - 2,875) To get $34,500 in favors will take you 12 months ( ⌈(34,500 - 7,000) / 2,375⌉ ) After 12 months you will have $2,375 in free income each month. You no longer need to save all of it (Although you may still need to save some of it. Be sure recalculate your expenses regularly to reevaluate if you need additional savings). What you do with your free income is up to you. You've got a safety net in saved earnings to get you through rough times, so if you want to buy a $100,000 sports car, all you have to do is account for it in your savings and expenses in all further calculations as you pay it off. To come up with a reasonable number, decide on how much you want to spend per month on a car. $500 is a nice round number that's less than $2,375. How many years do you want to save for the car? OR How many years do you want to pay off a car loan? 4 is a nice even number. $500 * 12 * 4 = $24,000 Now reduce that number 10% for taxes and fees $24,000 * 0.9 = $21,600 If you're getting a loan, deduct the cost of interest (using 5% as a ballpark here) $21,600 * 0.95 = $20,520 So according to my napkin math you can afford a car that costs ~$20k if you're willing to save/owe $500/month, but only after you've saved enough to be financially secure.\"",
"title": ""
},
{
"docid": "67f1e3d6f0554611cc1f6864f874b742",
"text": "If your plan permits loans, deposit enough through the year to maximize the match and then take a loan from the plan. Use the loan portion to pay your student loan. Essentially you have refinanced your debt at a (presumably) lower rate and recieved the match. You pay yourself back (with interest) through your payroll. The rates are typically the prime rate + 1%. The loans are subject to a lesser of 50% vested account balance or $50,000 provision.",
"title": ""
},
{
"docid": "d89733e4b32e3be48a54e2f273de7a57",
"text": "\"The article said $65,000 (rounds numbers imply an estimate) was the original amount she borrowed. However she isn't on the hook for only $65,000. Her loans have interest and ***one*** of the loans had an 8% interest rate. Let's ASSUME (for the purposes of this exercise to illustrate what compound interest can do to \"\"good debt\"\") that all of her loans are at 8% interest over a 30 year repayment period. Her total payments over the course of the 30 years will amount to $172,000. Yes that's a big number. $107,000 going to INTEREST and $65,000 going towards the original loan balance. More realistically her loans are probably in the 6-8% interest range (since interest rates were higher 20 years ago) so the amount is a little smaller, but the bulk of her payments will be for paying interest not paying down her loan balance. She really couldn't afford to borrow for a master's degree to make so little in a high cost of living area.\"",
"title": ""
},
{
"docid": "5841080e5f9aba6ff7e24e94ad1e718b",
"text": "\"This sounds like an accounting nightmare to be 100% precise. With each payment you're going to have to track: If you can account for those, then the fair thing to do is for one person to stop paying after they have paid the amount of principal they had at the beginning of the process, or possibly after they have paid an amount equivalent to the total principal and accrued interest they would have paid if they paid their loans individually. The problem is, one of you is likely going to pay more interest than you would have under the individual plan. In the example you gave, if your brother pays off any of your loans, he is going to be paying more in interest than if he paid on his 5% loans. If you pay the highest rate loans first, whoever has the lower total balance is going to pay more interest since they'll be paying on the higher rates until they've paid their \"\"fair share\"\". I don't see a clean way for you to divvy up the interest savings appropriately unless you trueup at the very end of the process. Math aside, these types of agreements can be dangerous to relationships. What if one of you decides that they don't want to participate anymore? What if one of you gets all of their loans paid off much earlier - they get the joy of being debt free while the other still has all of the debt left? What if they then don't feel obligates to pay the other's remaining debt? Are you both equally committed to cutting lifestyle in order to attack these debts? In my opinion, the complexity and risk to the relationship don't justify the interest savings.\"",
"title": ""
},
{
"docid": "6cc093b7114fdde405610af59e208c26",
"text": "Just to be clear, private *student* loans fall in the same category. The only meaningful difference is that they do not qualify for the federal forgiveness program (described above) and usually don't have subsidized interest rates which generally makes them even worse. They similarly follow you for life. There is no way out. If you're referring to *regular, private loans*, then that's kind of a non-sequitur since the topic is student loans. Not trying to be pedantic, just want to make sure anyone hoping to learn more understands how horrible student loans are if you can't pay them back.",
"title": ""
},
{
"docid": "46946a59368066db3f4d564bde1450c0",
"text": "When you borrow from a bank, there are secured loans, as with a mortgage, or unsecured lines of credit, usually a more reasonable amount of money, but also based on income. You just asked about a private loan. It depends on the person and your relationship. If you need money to pay the rent, you might not be the best person to lend money to. If you ask a friend or relative, they may lend you money without asking its purpose.",
"title": ""
},
{
"docid": "f33e67e30613c29876555d2a8cce0588",
"text": "\"An index annuity is almost the same as Indexed Universal Life, except the equity-index annuity is an investment with a guaranteed minimum return, with sometimes a higher return that is a function of the gain in the stock market, but is not associated with a life insurance policy. After a time, you can convert the EIA to a lifetime income (the annuity part) or just cash it out. They often are very complicated, but are constructed by combining bonds with index options (puts) just like indexed universal life. Unfortunately these tend to have high fees and/or commissions, and high (early) surrender charges, which can make them a poor investment. Of course you could just \"\"roll your own\"\" by buying bonds and puts FINRAS bulletin on EIAs, pdf warning. Here's a description of one of these securities: pdf.\"",
"title": ""
}
] |
fiqa
|
5f8bb341fa74065e28374670d69d6b43
|
Does investing money in other currencies help pad losses in case of a stock market crash?
|
[
{
"docid": "5fc6449416d4cd15fa5c851bc0040ca0",
"text": "If the equity market in the USA crashed, its very likely equity markets everywhere else would crash. The USA has a high number of the world's largest businesses and there are correlations between equity markets. So you need to think of equities as a global asset class, not regional. Your question is then a question about the correlation between equity markets and currency markets. Here's a guess: If equity markets crashed, you would see a lot of panic selling of stocks denominated in many currencies, but probably the most in USD, due to the large number of the world's largest businesses trading on US stock exchanges. Therefore, when the rest of the world sells US equities they receive cash USD, which they might sell for their local currency. That selling pressure would cause USD to fall. But, when equity markets crash there's a move to safety of the bond markets. The world's largest bond markets are denominated in which currency? Probably USD. So those who receive USD for their equities are going to spend that USD on bonds. In which case there is probably no correlation between equity markets and currency markets at all. A quick google search shows this kind of thing",
"title": ""
}
] |
[
{
"docid": "45c3cb28491d6b35f3219f442d3100a6",
"text": "\"These have the potential to become \"\"end-of-the-world\"\" scenarios, so I'll keep this very clear. If you start to feel that any particular investment may suddenly become worthless then it is wise to liquidate that asset and transfer your wealth somewhere else. If your wealth happens to be invested in cash then transferring that wealth into something else is still valid. Digging a hole in the ground isn't useful and running for the border probably won't be necessary. Consider countries that have suffered actual currency collapse and debt default. Take Zimbabwe, for example. Even as inflation went into the millions of percent, the Zimbabwe stock exchange soared as investors were prepared to spend ever-more of their devaluing currency to buy stable stocks in a small number of locally listed companies. Even if the Euro were to suffer a critical fall, European companies would probably be ok. If you didn't panic and dig caches in the back garden over the fall of dotcom, there is no need to panic over the decline of certain currencies. Just diversify your risk and buy non-cash (or euro) assets. Update: A few ideas re diversification: The problem for Greece isn't really a euro problem; it is local. Local property, local companies ... these can be affected by default because no-one believes in the entirety of the Greek economy, not just the currency it happens to be using - so diversification really means buying things that are outside Greece.\"",
"title": ""
},
{
"docid": "7847578cee6631c25a5d983b43d22e33",
"text": "\"On contrary of what Mike Scott suggested, I think in case of EURO DOOM it's a lot safer if your savings were changed into another currency in advance. Beware that bringing your money into an EURO CORE country (like Finland, Austria, Germany, Nethereland) it's useful if you think those banks are safer, but totally useless to avoid the conversion of your saving from Euro into your national currency. In case of EURO CRASH, only the Central Bank will decide what happens to ALL the Euro deposited wherever, single banks, even if they are Deutsche Bank or BNP or ING, can not decide what to do on their own. ECB (European Central Bank) might decide to convert EURO into local currencies based on the account's owner nationality. Therefor if you are Greek and you moved your saving in a German bank, the ECB might decide that your Euro are converted into New Dracma even if they sit in a German bank account. The funniest thing is that if you ask to a Finland bank: \"\"In case of Euro crash, would you convert my Euro into New Dracma?\"\", they sure would answer \"\"No, we can't!\"\", which is true, they can not because it's only the ECB (Europe Central Bank) the one that decides how an ordered Euro crash has to be manged, and the ECB might decide as I explained you above. Other Central Banks (Swiss, FED, etc.) would only follow the decisions of the ECB. Moreover in case of EURO DOOM, it's highly probable that the Euro currency looses a tremendous value compared to other currencies, the loss would be huge in case the Euro Crash happens in a disordered way (i.e. a strong country like Germany and their banks decides to get out and they start printing their own money w/o listening to the ECB anymore). So even if your saving are in Euro in Germany they would loose so much value (compared to other currencies) that you will regreat forever not to have converted them into another currency when you had the time to do it. Couple of advises: 1) If you want to change you savings into another currency you don't need to bring them into another bank/country (like US), you could simply buy US Shares/Bonds at your local bank. Shares/Bonds of a US company/US gov will always be worth their value in dollars no matter in what new pathetic currency your account will be converted. 2) But is there a drawback in converting my saving into another currency (i.e. buying dollars in the form of US treasury bonds)? Unfortunately yes, the drawback is that in case this Euro drama comes finally to an happy ending and Germans decide to open their wallets for the nth time to save the currency, the Euro might suddenly increase its value compared to other currencies, therefor if you changed your saving into another currency you might loose money (i.e. US dollars looses value against the Euro).\"",
"title": ""
},
{
"docid": "b1226b18f17ae68a16316ef098513605",
"text": "Very likely this refers to trading/speculating on leverage, not investing. Of course, as soon as you put leverage into the equation this perfectly makes sense. 2007-2009 for example, if one bought the $SPX at its highs in 2007 at ~$1560.00 - to the lows from 2009 at ~$683.00 - implicating that with only 2:1 leverage a $1560.00 account would have received a margin call. At least here in Europe I can trade index CFD's and other leveraged products. If i trade lets say >50:1 leverage it doesn’t take much to get a margin call and/or position closed by the broker. No doubt, depending on which investments you choose there’s always risk, but currency is a position too. TO answer the question, I find it very unlikely that >90% of investors (referring to stocks) lose money / purchasing power. Anyway, I would not deny that where speculators (not investors) use leverage or try to trade swings, news etc. have a very high risk of losing money (purchasing power).",
"title": ""
},
{
"docid": "39992fa71ba6c1794c6d2f65443b5d45",
"text": "\"Unless you are buying a significant value of your goods in USD then the relative strength of USD versus your local currency will have little to no effect on what the value of your investments is worth to you. In fact only (de|in)flation will effect your purchasing power. If your investments are in your local currency and your future expenses (usage of the returns on the investments) will be in your local currency FX has no effect. To answer your question, however, since all investments involve flows of money there can be no investment (other than perhaps gold which is really a form of currency) that isn't bound to at least one currency. In general investments are expected to be valued against the investor's home currency (I tend to call it \"\"fund currency\"\" as I work with hedge funds) as the return on the investment will be paid out in the fund currency and returns will be compared on the same basis. If investments are to be made internationally then it is necessary to reduce, or \"\"hedge\"\" the exchange rate risk. This is normally done using FX swaps or futures that allow an exchange rate in the future to be locked in today. Far from being unbound from FX moves these derivatives are closely bound to any moves but crucially are bound in the opposite direction to the hoped for FX move. an example of this would be if I'm investing 100GBP (my local currency) in a US company XYZ corp which I expect to do well. Suppose I get 200USD for my 100GBP and so buy 1 * 200USD shares in XYZ. No matter what happens to XYZ stock any move in GBP/USD will affect my P&L so I buy a future that allows me to exchange 200USD for 100GBP in 6 month's time. If GBP rises I can sell the future and make money on both the higher exchange rate and the increase in XYZ corp. If GBP falls I can keep the future until maturity and exchange the 200USD from XYZ corp for 100GBP so I only take the foreign exchange hit on any profits. If I expect my profits to be 10USD I can even buy futures such that I can lock in the exchange rate for 110USD in 6 months so that I will lose even less of my profit from the exchange rate move.\"",
"title": ""
},
{
"docid": "e92639dfe3b96ba834caa1456ea2c9d2",
"text": "Cash would be the better alternative assuming both stocks take a major hit in ALL categories AND the Fed raise rates at the same time for some reason. Money market funds that may have relatively low yields at the moment would likely be one of the few securities not to be repriced downward as interest rates rising would decrease bond values which could be another crash as I could somewhat question how broad of a crash are you talking here. There are more than a few different market segments so that while some parts may get hit really hard in a crash, would you really want to claim everything goes down? Blackrock's graphic shows in 2008 how bonds did the best and only it and cash had positive returns in that year but there is something to be said for how big is a crash: 20%, 50%, 90%?",
"title": ""
},
{
"docid": "d62e3a39316e279e4ee8a1655d33359f",
"text": "\"If you don't use leverage you can't lose more than you invested because you \"\"play\"\" with your own money. But even with leverage when you reach a certain limit (maintenance margin) you will receive a margin call from your broker to add more funds to your account. If you don't comply with this (meaning you don't add funds) the broker will liquidate some of the assets (in this case the currency) and it will restore the balance of the account to meet with his/her maintenance margin. At least, this is valid for assets like stocks and derivatives. Hope it helps! Edit: I should mention that\"",
"title": ""
},
{
"docid": "a86ac339b5503e4547a79a0d3386e8dc",
"text": "There are also currency hedged ETFs. These operate similarly to what gengren mentioned. For example, a currency hedged Japan equities ETF has an inherent short yen/usd position on it in addition to the equity position, so the effects of a falling yen are negated. Note that it will still be denominated in dollars, however. AED is pegged to the dollar though, isnt it? If your broker is charging you a crazy price maybe try again a different day, or get a new broker. http://www.ishares.com/us/strategies/hedge-currency-impact",
"title": ""
},
{
"docid": "f6b490195aee0c5351658b1edfd90ba3",
"text": "If you're referring to investment hedging, then you should diversify into things that would profit if expected event hit. For example alternative energy sources would benefit greatly from increased evidence of global warming, or the onset of peak oil. Preparing for calamities that would render the stock market inaccessible, the answer is quite different. Simply own more of things that people would want than you need. A list of possibilities would include: Precious metals are also a way to secure value outside the financial markets, but would not be readily sellable until the immediate calamity had passed. All this should be balanced on an honest evaluation of the risks, including the risk of nothing happening. I've heard of people not saving for retirement because they don't expect the financial markets to be available then, but that's not a risk I'm willing to take.",
"title": ""
},
{
"docid": "b7b84c856eb772803ebfa337eef126f3",
"text": "\"Yes, you're still exposed to currency risk when you purchase the stock on company B's exchange. I'm assuming you're buying the shares on B's stock exchange through an ADR, GDR, or similar instrument. The risk occurs as a result of the process through which the ADR is created. In its simplest form, the process works like this: I'll illustrate this with an example. I've separated the conversion rate into the exchange rate and a generic \"\"ADR conversion rate\"\" which includes all other factors the bank takes into account when deciding how many ADR shares to sell. The fact that the units line up is a nice check to make sure the calculation is logically correct. My example starts with these assumptions: I made up the generic ADR conversion rate; it will remain constant throughout this example. This is the simplified version of the calculation of the ADR share price from the European share price: Let's assume that the euro appreciates against the US dollar, and is now worth 1.4 USD (this is a major appreciation, but it makes a good example): The currency appreciation alone raised the share price of the ADR, even though the price of the share on the European exchange was unchanged. Now let's look at what happens if the euro appreciates further to 1.5 USD/EUR, but the company's share price on the European exchange falls: Even though the euro appreciated, the decline in the share price on the European exchange offset the currency risk in this case, leaving the ADR's share price on the US exchange unchanged. Finally, what happens if the euro experiences a major depreciation and the company's share price decreases significantly in the European market? This is a realistic situation that has occurred several times during the European sovereign debt crisis. Assuming this occurred immediately after the first example, European shareholders in the company experienced a (43.50 - 50) / 50 = -13% return, but American holders of the ADR experienced a (15.95 - 21.5093) / 21.5093 = -25.9% return. The currency shock was the primary cause of this magnified loss. Another point to keep in mind is that the foreign company itself may be exposed to currency risk if it conducts a lot of business in market with different currencies. Ideally the company has hedged against this, but if you invest in a foreign company through an ADR (or a GDR or another similar instrument), you may take on whatever risk the company hasn't hedged in addition to the currency risk that's present in the ADR/GDR conversion process. Here are a few articles that discuss currency risk specifically in the context of ADR's: (1), (2). Nestle, a Swiss company that is traded on US exchanges through an ADR, even addresses this issue in their FAQ for investors. There are other risks associated with instruments like ADR's and cross-listed companies, but normally arbitrageurs will remove these discontinuities quickly. Especially for cross-listed companies, this should keep the prices of highly liquid securities relatively synchronized.\"",
"title": ""
},
{
"docid": "28fed650e9e4cc59a4dba20e8648f303",
"text": "Typically, the higher interest rates in local currency cover about the potential gain from the currency exchange rate change - if not, people would make money out of it. However, you only know this after the fact, so either way you are taking a risk. Depending on where the local economy goes, it is more secure to go with US$, or more risky. Your guess is as good as anyone. If you see a chance for a serious meltdown of the local economy, with 100+% inflation ratios and possibly new money, you are probably better off with US$. On the other hand, if the economy develops better than expected, you might have lost some percentage of gain. Generally, investing in a more stable currency gets you slightly less, but for less risk.",
"title": ""
},
{
"docid": "0f7e3492cf4cc9b19031d374d516784f",
"text": "You have currency risk either way. The only question is deal with it now or later. No one can tell you which action is better until we look at it in hindsight. You could hedge and move some now, some later. Invest your USD in US equities and move some to EUR and invest that in EUR companies. I'd suggest having your money in the same currency as where you are living, since for the most part, you'll be in the same boat as your peers and neighbors. If you have high inflation, so will your friends and neighbors and you won't feel so bad. And if your currency gets stronger, then so will the currency of the people you are hanging out with. It's similar to betting on Don't Pass in craps. If you bet against the rest of the table, you could win when they lose, but then all your friends will be sad and you'll be happy. And vice versa, when your friends are high-fiving, you'll be in the dumps. I'd say it's better to be in the same boat as your peers since that's usually how we judge our happiness when we compare our situation to others.",
"title": ""
},
{
"docid": "df23c140202eec107b9a1e27a3e56147",
"text": "This is the exactly wrong thing to do especially in the age of algorithmic trading. Consider this event from 2010: Chart Source Another similar event occurred in 2015 and there was also a currency flash crash in that year. As you can see the S&P 500 (and basically the entire market) dropped nearly 7% in a matter of minutes. It regained most of that value within 15 minutes. If you are tempted to think that 7% isn't that big of a deal, you need to understand that specific securities will have a much bigger drop during such events. For example the PowerShares S&P 500 Low Volatility ETF (SPLV) was down 45% at one point on Aug 24, 2015 but closed less than 6% down. Consider what effect a stop loss order would have on your portfolio in that circumstance. You would not be able to react fast enough to buy at the bottom. The advantage of long-term investing is that you are immune to such aberrations. Additionally, as asked by others, what do you do once you've pulled out your money. Do you wait for a big jump in the market and hop back in? The risk here is that you are on the sidelines for the gains. By missing out on just a small number of big days, you can really hurt your long-term returns.",
"title": ""
},
{
"docid": "51876fb7fa8f2f1b1c5fc654650a5ef4",
"text": "The other obvious suggestion I guess is to buy cheap stocks and bonds (maybe in a dollar denominated fund). If the US dollar rises you'd then get both the fund's US gains plus currency gains. However, no guarantee the US dollar will rise or when. Perhaps a more prudent approach is to simply diversify. Buy both domestic and foreign stocks and bonds. Rebalance regularly.",
"title": ""
},
{
"docid": "e9479291259074533e355387dc6805eb",
"text": "\"The difference is in the interrelation between the varied investments you make. Hedging is about specifically offsetting a possible loss in an investment by making another related investment that will increase in value for the same reasons that the original investment would lose value. Gold, for instance, is often regarded as the ultimate hedge. Its value is typically inversely correlated to the rest of the market as a whole, because its status as a material, durable store of value makes it a preferred \"\"safe haven\"\" to move money into in times of economic downturn, when stock prices, bond yields and similar investments are losing value. That specific behavior makes investing in gold alongside stocks and bonds a \"\"hedge\"\"; the increase in value of gold as stock prices and bond yields fall limits losses in those other areas. Investment of cash in gold is also specifically a hedge against currency inflation; paper money, account balances, and even debt instruments like bonds and CDs can lose real value over time in a \"\"hot\"\" economy where there's more money than things to buy with it. By keeping a store of value in something other than currency, the price of that good will rise as the currencies used to buy it decrease in real value, maintaining your level of real wealth. Other hedges are more localized. One might, for example, trade oil futures as a hedge on a position in transportation stocks; when oil prices rise, trucking and airline companies suffer in the short term as their margins get squeezed due to fuel costs. Currency futures are another popular hedge; a company in international business will often trade options on the currencies of the companies it does business in, to limit the \"\"jitters\"\" seen in the FOREX spot market caused by speculation and other transient changes in market demand. Diversification, by contrast, is about choosing multiple unrelated investments, the idea being to limit losses due to a localized change in the market. Companies' stocks gain and lose value every day, and those companies can also go out of business without bringing the entire economy to its knees. By spreading your wealth among investments in multiple industries and companies of various sizes and global locations, you insulate yourself against the risk that any one of them will fail. If, tomorrow, Kroger grocery stores went bankrupt and shuttered all its stores, people in the regions it serves might be inconvenienced, but the market as a whole will move on. You, however, would have lost everything if you'd bet your retirement on that one stock. Nobody does that in the real world; instead, you put some of your money in Kroger, some in Microsoft, some in Home Depot, some in ALCOA, some in PG&E, etc etc. By investing in stocks that would be more or less unaffected by a downturn in another, if Kroger went bankrupt tomorrow you would still have, say, 95% of your investment next egg still alive, well and continuing to pay you dividends. The flip side is that if tomorrow, Kroger announced an exclusive deal with the Girl Scouts to sell their cookies, making them the only place in the country you can get them, you would miss out on the full possible amount of gains you'd get from the price spike if you had bet everything on Kroger. Hindsight's always 20/20; I could have spent some beer money to buy Bitcoins when they were changing hands for pennies apiece, and I'd be a multi-millionaire right now. You can't think that way when investing, because it's \"\"survivor bias\"\"; you see the successes topping the index charts, not the failures. You could just as easily have invested in any of the hundreds of Internet startups that don't last a year.\"",
"title": ""
},
{
"docid": "30152e0feec6c0a9cef953d3c3199026",
"text": "The collapse of the US economic system is one of the many things I am preparing for. To answer the how, me personally I am doing some investing in gold and silver. However I am investing more in the tools, goods and gear that will help me be independent of the system around me. In short nothing will change for me if the US dollar goes belly up. A book I recommend is Possum Living (http://www.possumliving.net/). Other than that I am investing in trade goods such as liquor, cigarettes, medical supplies.",
"title": ""
}
] |
fiqa
|
e53d5904e1d823cc79de1d134bad620b
|
how does one start an investing club (as a company)?
|
[
{
"docid": "35ed04b2dace3b1397574bc03dc60917",
"text": "\"As for the letting the \"\"wise\"\" people only make the decisions, I guess that would be a bit odd in the long run. Especially when you get more experienced or when you don't agree with their decision. What you could do, is make an agreement that always 3/4 (+/-) of the partners must agree with an investment. This promotes your involvement in the investments and it will also make the debate about where to invest more alive, fun and educational). As for the taxes I can't give you any good advice as I don't know how tax / business stuff works in the US. Here in The Netherlands we have several business forms that each have their own tax savings. The savings mostly depend on the amount of money that is involved. Some forms are better for small earnings (80k or less), other forms only get interesting with large amounts of money (100k or more). Apart from the tax savings, there could also be some legal / technical reasons to choose a specific form. Again, I don't know the situation in your country, so maybe some other folks can help. A final tip if your also doing this for fun, try to use this investment company to learn from. This might come in handy later.\"",
"title": ""
},
{
"docid": "57a608e57064a2ed2676dd2ae33d92f7",
"text": "\"+1 for noting that you are in it for the long haul. I also think this is a great project and activity to do with friends. Setting up and start-up investment company could be done as a simple LLC. The decision making process can be decided among the members -- if you want to defer to the others then so be it. Make it flexible so that you can change your mind in the future. If this is not intended to be a source of revenue or income for you (note your \"\"in it for the long haul\"\") One way of sourcing the capital and managing the resulting taxes you might want to consider is setting up a self-directed retirement account and making the investment from there. proceeds as you and your friends choose to take them would flow back into the retirement account. As with most investment and tax related questions we should all take the little extra time and money to follow up on internet-based advice with your own lawyer, investment adviser and accountant. These licensed individuals when under contract assume a degree of responsibility for their answer which is not available online. :)\"",
"title": ""
},
{
"docid": "d71807b2da44a71b83e294ae53cad7f1",
"text": "Taxes are the least of your concerns. Your friends need licenses. Although this COULD be avoided entirely with certain craftily worded disclaimers and exemptions and the WAY that money is given to them.",
"title": ""
}
] |
[
{
"docid": "824ed0c6128435f4ed078a8c39c90d8c",
"text": "Sounds like you are starting an investment club. What you need is an investment club partnership agreement. Have a look at this free document. EDIT Based on OP's comments, it appears that the OP will be acting as an adviser/manager of a private investment fund. If the fund is not open to the public, it may still be treated as a type of investment club, but different rules -- including possibly having to register with the SEC -- may apply (quoted from the first link): If the adviser is compensated for providing the advice regarding the club's investments, the adviser may need to register according to the Investment Advisers Act of 1940. Also, if one person selects investments for the club, that person may have to register as an investment adviser. In general, a person who has $25 million or more in assets under management is required to register with the SEC under the Investment Advisers Act of 1940. A person managing less than $25 million may be required to register under the securities laws of the state or states in which the adviser transacts business.",
"title": ""
},
{
"docid": "164f357b28487a92dd220457fa1bda24",
"text": "\"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.\"",
"title": ""
},
{
"docid": "88c45e03f8757aab8fc52372a58788df",
"text": "I had the same experience as Jeremy: made investments in both Prosper and Lending Club and got a much better returns with Lending Club, although in my cases both investments were ok: after 18 months i made 4-5% on prosper and 11-12% on Lending Club. I think they just have better underwriting standards.",
"title": ""
},
{
"docid": "9d73a1100303910d8ada4b30274fd5f9",
"text": "Yes. Private companies have shares, they're just not liquid and there may be restrictions around selling them; founders get shares when they found a company (not options), as do VCs that invest. An options pool is oftentimes created as a result of a VC financing (when the cap table is being carved up and the existing owners are being diluted, anyway) for the purposes of attracting future employees.",
"title": ""
},
{
"docid": "43544cf49d9103aa148b03b6f70b5ce4",
"text": "Ask your colleagues! I know that sounds obvious, but just go to where people who do your sort of business hang out (or better, find some venture capital firms and ask their portfolio companies). It's not something people would keep secret from you...",
"title": ""
},
{
"docid": "60a9f5107226f646e8d26736cf930801",
"text": "\"Don't do it until you have educated yourself enough to know what you are doing. I hope you won't take this personally, but given that you are wandering around asking random strangers on the Internet how to \"\"get into investing,\"\" I feel safe in concluding that you are by no means a sophisticated enough investor to be choosing individual investments, nor should you be trusting financial advisors to choose investments for you. Believe me, they do not have your interests at heart. I usually advise people in your position to start by reading one book: A Random Walk Down Wall Street by Burton Malkiel. Once you've read the book by Malkiel you'll understand that the best strategy for all but the most sophisticated investors is to buy an index fund, which simply purchases a portfolio of ALL available stocks without trying to pick winners and losers. The best index funds are at Vanguard (there is also a Vanguard site for non-US residents). Vanguard is one of the very, very, very few honest players in the business. Unlike almost any other mutual fund, Vanguard is owned by its investors, so it has no profit motive. They never try to pick individual stocks, so they don't have to pay fancy high-priced analysts to pick stocks. If you find it impossible to open a Vanguard account from wherever you're living, find a local brokerage account that will allow you to invest in the US stock market. Many Vanguard mutual funds are available as ETFs which means that you buy and sell them just like any other stock on the US market, which should be easy to do from any reasonably civilized place.\"",
"title": ""
},
{
"docid": "06983316e10baed1be3506c87865051b",
"text": "In theory you can buy shares directly from someone else who owns them. In practise, if the stock is listed on an exchange, they are unlikely to own them directly, they are likely to own them through an intermediary. You will have to pay fees to that intermediary to transfer the shares to your name. There are thousands of small companies owned by the guy who started it and a few other investors. You can buy stock in that kind of company directly from the existing owners, as long as they are willing to sell you some. It's a super-high risk investment strategy, though. This is the kind of deal that happens on Dragons Den.",
"title": ""
},
{
"docid": "e30c1a9481ded4a26c6feb5502718faa",
"text": "My understanding is you can create a company 0 value. Then you need to either loan the company the money to buy the building (it will still have 0 value as it will have a debt equal to it's assets) or sell share to investors at any price you like to raise the money to buy the building. Once shares have value (as valued by a chartered accountant - not anyone can do this) then anyone recieving shares will have to pay income tax. This is why keeping the shares as no value for as long as possible can be preferable. Also a benefit of using share options. talk to your investors, see what they require.",
"title": ""
},
{
"docid": "a3ead6164c50ccbd9cdb1398b9d611c2",
"text": "I don't know if this is exactly what you're looking for but Seedrs sorta fits what you're looking for. Private companies can raise money through funding rounds on Seedrs website. It wouldn't necessarily be local companies though. I've only recently found it myself so not sure if it has a uk or European slant to it. Personally I think it's a very interesting concept, private equity through crowd funding.",
"title": ""
},
{
"docid": "b8a12e44cf5ee98e06bdcd04d98f3b1e",
"text": "\"There obviously is not such a list of companies, because if there were the whole world would immediately invest in them. Their price would rise like a rocket and they would not be undervalued anymore. Some people think company A should be worth x per share, some people think it should be worth y. If the share price is currently higher than what someone thinks it should be, they sell it, and if it is lower than they think it should be they buy it. The grand effect of this all is that the current market price of the share is more or less the average of what all investors together think it should currently be worth. If you buy a single stock, hoping that it's undervalued and will rise, you may be right but you may equally well be wrong. It's smarter to diversify over lots of stocks to reduce the impact of this risk, it evens out. There are \"\"analysts\"\" who try to make a guess of which stocks will do better, and they give paid advice or you can invest in their funds -- but they invariably do worse than the average of the market as a whole, over the long term. So the best advice for amateurs is to invest in index funds that cover a huge range of companies and try to keep their costs very low.\"",
"title": ""
},
{
"docid": "1836169d4b281e472f6b660492a5e2ed",
"text": "\"Question 1: How do I start? or \"\"the broker\"\" problem Get an online broker. You can do a wire transfer to fund the account from your bank. Question 2: What criticism do you have for my plan? Dividend investing is smart. The only problem is that everyone's currently doing it. There is an insatiable demand for yield, not just individual investors but investment firms and pension funds that need to generate income to fund retirements for their clients. As more investors purchase the shares of dividend paying securities, the share price goes up. As the share price goes up, the dividend yield goes down. Same for bonds. For example, if a stock pays $1 per year in dividends, and you purchase the shares at $20/each, then your yearly return (not including share price fluctuations) would be 1/20 = 5%. But if you end up having to pay $30 per share, then your yearly return would be 1/30 or 3.3% yield. The more money you invest, the bigger this difference becomes; with $100K invested you'd make about $1.6K more at 5%. (BTW, don't put all your money in any small group of stocks, you want to diversify). ETFs work the same way, where new investors buying the shares cause the custodian to purchase more shares of the underlying securities, thus driving up the price up and yield down. Instead of ETFs, I'd have a look at something called closed end funds, or CEFs which also hold an underlying basket of securities but often trade at a discount to their net asset value, unlike ETFs. CEFs usually have higher yields than their ETF counterparts. I can't fully describe the ins and outs here in this space, but you'll definately want to do some research on them to better understand what you're buying, and HOW to successfully buy (ie make sure you're buying at a historically steep discount to NAV [https://seekingalpha.com/article/1116411-the-closed-end-fund-trifecta-how-to-analyze-a-cef] and where to screen [https://www.cefconnect.com/closed-end-funds-screener] Regardless of whether you decide to buy stocks, bonds, ETFs, CEFs, sell puts, or some mix, the best advice I can give is to a) diversify (personally, with a single RARE exception, I never let any one holding account for more than 2% of my total portfolio value), and b) space out your purchases over time. b) is important because we've been in a low interest rate environment since about 2009, and when the risk free rate of return is very low, investors purchase stocks and bonds which results in lower yields. As the risk free rate of return is expected to finally start slowly rising in 2017 and gradually over time, there should be gradual downward pressure (ie selling) on the prices of dividend stocks and especially bonds meaning you'll get better yields if you wait. Then again, we could hit a recession and the central banks actually lower rates which is why I say you want to space your purchases out.\"",
"title": ""
},
{
"docid": "be5ac44a62ef5e8e8fc134d8b6c29b90",
"text": "\"It is such a touchy subject for many people, I have to say that simple \"\"set it and forget it\"\" kind of investing isn't likely in the near term. Instead, if this is something you believe in, treat it like any other business opportunity and do some detailed research into people operating in the field. Look into their business plans and visit their operations. If there is a plan, and idea, a team and the intangible it you might consider doing some direct investing with a local company. Basically become a small business owner, silent partner or investor. If you believe in it go for it. If you don't believe in it that much, I think this is a market somebody else needs to develop before we invest.\"",
"title": ""
},
{
"docid": "45f75f318140ab32ba09e27eb9b885aa",
"text": "\"Investing in an existing company is almost like buying a house, or even becoming an \"\"Angel investor\"\" in a start-up. Before you start the process, decide how much you want to be involved in the day-to-day and which industries you would feel most comfortable in. The latter is an important consideration since you would have to know sufficient about the industry in order to evaluate the quality of your prospective investment. Searching for a suitable business is a time-consuming process: The guidance for evaluating any company has been answered in another question, so I'll simply link. Most business owners are looking to their businesses to provide them a pension, so they often look to sell around retirement age. Buying such a business is tricky - you may be assisting the next generation to finance the purchase which can have it's own struggles. Ideally you'll be looking for a young(ish) company with proven sales and which is looking to finance growth in an optimal way. Such a company may have many options for raising capital so you'll be competing to invest. As to whether or not it's a good idea... KFC only became a household name and global franchise after Pete Harman joined Harland Sanders as a partner. Richard and Maurice McDonald may have founded McDonald's but it was Ray Kroc who made it a success. New partners bring in new ideas and fresh energy which the original entrepreneurs may have lost during the difficulties of starting out. But that goes back to my first query; just how much do you want to get involved?\"",
"title": ""
},
{
"docid": "2e53928f128307a21a43fe26ba4fc132",
"text": "\"You can learn very little from it. Company directories are often given share options or shares as a bonus, and because of that they are unlikely to buy shares. When they sell shares, you'll hear people shouting \"\"so-and-so sold his or her shares, they must know something bad about the company\"\". The truth is that you can't eat or drink shares. If that company director owning shares worth a million dollars wants to buy a new Ferrari, he will find that Ferrari doesn't give free cars to people owning lots of shares. He actually has to sell the shares to get the money for the car, and that's what he does.\"",
"title": ""
},
{
"docid": "150b659334d280ebad2c703db5e3618f",
"text": "At this point the cost of borrowing money is very low. For the sake of argument, say it is 1% per year for a large institution. I can either go out and find a client to invest 100,000$ and split profit and loss with them. Or, I could borrow 50,000$, pay 500$/year in interest, and get the same return and loss, while moving the market half as much (which would let me double my position!) In both cases the company is responsible for covering all fixed costs, like paying for traders, trades, office space, branding, management, regulatory compliance, etc. For your system to work, the cost to gather clients and interact with them has to be significantly less than 1% of the capital they provide you per year. At the 50% level, that might actually be worth it for the company in question. Except at the 50% level you'd have really horrible returns even when the market went up. So suppose a more reasonable level is the client keeps 75% of the returns (which compares to existing companies which offer larger investors an 80% cut on profits, but no coverage on losses). Now the cost to gather and interact with clients has to be lower than 2500$ per million dollars provided to beat out a simple loan arrangement. A single sales employee with 100% overhead (office, all marketing, support, benefits) earning 40,000$/year has to bring in 32 million dollar-years worth of investment every year to break even. Cash is cheap. Investment houses sell cash management, and charge for it. They don't sell shared investment risk (at least not to retail investors), because it would take a lot of cash for it to be worth their bother. More explicitly, for this to be viable, they'd basically have to constantly arrange large hedges against the market going down to cover any losses. That is the kind of thing that some margin loans may require. That would all by itself lower their profits significantly, and they would be exposed to counter-party risk on top of that. It is much harder to come up with a pile of cash when the markets go down significantly. If you are large enough to be worthwhile, finding a safe counterparty may be nearly impossible.",
"title": ""
}
] |
fiqa
|
f9e6bbb7699c548260d821aee2c0e1a2
|
Is a debt collector allowed to make a hard inquiry on your credit report?
|
[
{
"docid": "30901c7d3c65259b32942bbbe49329e5",
"text": "\"According to the Fair Credit Reporting Act: any consumer reporting agency may furnish a consumer report [...] to a person which it has reason to believe [...] intends to use the information in connection with a credit transaction involving the consumer on whom the information is to be furnished and involving the extension of credit to, or review or collection of an account of, the consumer See p12 (section 604). The usual interpretation of this that I've heard is that a debt collection agency that owns or has been assigned a debt can make hard pulls on your credit report without your consent. This link seems to support that (and references the same part of the act, among others): According to the Fair Credit Reporting Act, [...], any business can access your credit history without your permission provided the business has a valid \"\"permissible purpose.\"\" The FCRA notes that one such permissible purpose is to review your credit information in connection with the collection of a debt. Thus, if you owe money to a debt collector, the debt collector has the legal right to pull and review your credit report. If they haven't been assigned the debt or own it outright, I believe you have a legal right to dispute it. Consult a lawyer if this is actually a situation you face. Once use for this is if the debt collection agency has trouble locating you; since your credit report normally contains current and past addresses, this is one way to locate you.\"",
"title": ""
}
] |
[
{
"docid": "a3dfc8d4608c3715d2c372bb7b0d5384",
"text": "\"I don't know of a guideline to how often you can ask for an increase. You can ask as often as you like. As for consequences, refer to Is there a downside to asking for a credit increase?, where the consensus is that, aside from a possible (temporary) hard pull on your credit report, there's probably no risk to asking. Depending on your credit score/history, and especially in the current economy, you may get \"\"no\"\" as an answer most often. You can try talking to your card's Credit Department or even Customer Retention Department as they may have more leverage. They may say yes or no or that they need to review your account. When you do ask for an increase, I would make sure to ask if there will be a hard pull on your report, if there is any cost or downside to applying, and to make sure that this would be an increase to your current credit line, not a new account.\"",
"title": ""
},
{
"docid": "cf5e1d8139cc9fd9701f60f3b7da9db8",
"text": "To answer the specific question of whether you can get the bill reduced without hurting your credit, yes, as long as the bill never goes to collections, there's no reason it should ever show up on your credit report. Will they reduce your bill without sending it to collections first? Maybe. All you can do is ask.",
"title": ""
},
{
"docid": "8b6208d0c7eb4a079df32842d7a7bcb2",
"text": "I've seen my score dip a little bit after every hard pull. (Admittedly, a fako score.) You apply for credit or for a credit increase and your score is going to dip. Any check that is not intended to grant credit (either an existing creditor rechecking, or when you check your own credit) has no effect on your score. Likewise, a check done to screen for a solicitation have no effect as you are not trying to borrow. (Taking them up on the offer will normally cause a hit, though.)",
"title": ""
},
{
"docid": "bd63fb8c9a8b8010a09f1855e43f0082",
"text": "I froze my credit online yesterday. Last page of process confirmed I had frozen credit and told me to print last page because it has information I will need to unfreeze it. Page was blank. So I waited. Then I got timed out. Then I got a page telling me I had not frozen my credit. I had called a few times yesterday but always got a busy signal. So, at 5:06 est I called them again. Before patching me through to a live person that asked if I'd be willing to take a short survey after speaking with rep, which I agreed to do. When my call was transferred I got a message saying they worked nine to five and to call back later. Then the survey started. Needless to say, the scores were the lowest possible. And apparently unfreezing my credit will be problematic. Yippee!",
"title": ""
},
{
"docid": "70f6f18a80e1fa19ca1422a3f614d813",
"text": "\"Use with moderation. Powerful stuff. Your caller could be an offshore scammer too. Summarizing from http://www.creditinfocenter.com/rebuild/debt-validation.shtml: You can dispute the debt, and demand that the collector give you the name and address of the original creditor and show that it isn't past the statute of limitations. If they can't \"\"validate\"\" the debt by providing that info, in writing, they must drop it until they can do so. You can sue (though generally not for very much) if they don't. You may have to make this request in writing, so it has a paper trail. A valid verification respond must include: If they don't respond within 30 days, they are in violation of the Fair Credit Reporting Act (FDCPA section 809b), and you can send registered mail threatening them with a lawsuit if they don't immediately drop it and remove it from your credit report. They should respond to that within two weeks, and if they don't have darned good evidence will probably cave. If they can prove you do owe the money ... Well, you can hope they aren't licensed to collect in your state; if they aren't you can try to challenge them on that basis. Unlikely to work. If they agree, remember to send a copy of the letter to the credit reporting agencies to make sure it's taken off your record. If this isn't enough to resolve it, you'll probably need to bring suit. That's another long list of steps; I'm going to refer you to the linked site rather than summarize them here since at that point you should get a lawyer involved to make sure it's done promptly.\"",
"title": ""
},
{
"docid": "c9dc5d9adefc54650c4af8dcbc26666a",
"text": "\"Assuming I don't need any other new lines of credit, can I get pre-qualified repeatedly (and with different banks) with impunity? Yes, but only for a limited period. FICO says: Hard inquiries are inquiries where a potential lender is reviewing your credit because you've applied for credit with them. These include credit checks when you've applied for an auto loan, mortgage or credit card. Each of these types of credit checks count as a single inquiry. One exception occurs when you are \"\"rate shopping\"\". That's a smart thing to do, and your FICO score considers all inquiries within a 45 period for a mortgage, an auto loan or a student loan as a single inquiry. However for your situation, since you won't be getting a loan for several months, getting inquiries more than 45 days apart will each count as a separate inquiry.\"",
"title": ""
},
{
"docid": "cf48406e0cb79263a44382dd3c5badb0",
"text": "All three credit bureaus allow you to file a dispute online. Some allow you to upload documentation at the same time, others will ask you to mail it to them. Send them the letter you got from your bank, they will then return to the collection company. For $300.00 most likely they will not pursue it any further and the credit bureaus will delete the entry from your file. If the collection company want to make a case out of it they will have to view to cost of trying to get a Court Judgment against the value of the amount they are claiming. Almost certainly they will view at not cost effective and your credit rating will return to where it was prior to the negative impact",
"title": ""
},
{
"docid": "3acca10d41687e5e59f35a6dc6401349",
"text": "\"It won't hurt your credit score, but it may hurt your ChexSystems score. ChexSystems is another consumer reporting agency that doesn't keep track of your debts, but of your bank accounts. Banks (most but not all) check ChexSystems before you open an account to see if you bounce checks, overdraft, make a lot of teller visits, lose ATM cards, etc. They use this to estimate your profitability. Banks aren't allowed to discriminate against a protected class, but \"\"unprofitable\"\" is not a protected class. BTW, most banks don't make much money on checking accounts; they view them as \"\"get-you-in-the-door\"\" inducements so they can sell you the things they really want to like mortgages and investments.\"",
"title": ""
},
{
"docid": "e44c5d2b7d58ef5deec63a6f93095785",
"text": "\"From what I understand, they basically hold on to your money while you stop paying your debt. They keep it in an account and negotiate on your behalf. The longer you go without paying, the less the debt collector is willing to take and at some point, they will settle. So they take the money you've been putting into their \"\"account\"\" and pay it down. Repeat the process for all your accounts. I basically did this, without using a service. I had $17,000 on one card and they bumped the interest rate to 29%, and I had lost my job. I didn't pay it for 7 months. I just planned on filing bankruptcy. They finally called me up and said, if you can pay $250 a month, until it's paid off, we will drop the interest to 0% and forgive all your late fees. I did that, and five years later it was paid off. Similar situation happened on my other cards. It seems once they realize you can't pay, is when they're willing to give you a break. It'd be nice they just never jacked up your rate to 30% though. So, forget the service, just do it yourself. Call them up and ask, and if they don't budge, don't pay it. Of course your credit will be shot. But I'm back in the 700s, so anything is possible over time.\"",
"title": ""
},
{
"docid": "133383e907a8124467af4d047c235890",
"text": "I would keep the letter in a file for follow-up, and I would do what you are already planning to do and wait to see what shows up on the credit report. If this does reflect an identity theft attempt, chances are that others will follow, so vigilance is key here. If there is a hard credit check, then you can dispute that on your credit report. If there is not a hard credit check, there is nothing further this credit card company can do to help you anyway.",
"title": ""
},
{
"docid": "66b35acf56e4b858179a6a2252a75163",
"text": "\"I was I a similar position as you, and sometimes credit bureaus might be difficult to deal with, especially when high amounts of money are involved. To make the long story short, someone opened a store credit card under my name and made a charge of around 3k. After reporting this to the bureaus, they did not want to remove the account from my credit report citing that the claim was \"\"frivolous\"\". After filing a police report, the police officer gave me the phone number for the fraud department of this store credit card, and after they investigated, they removed the account from my credit. I would suggest to do the following: Communicating with Creditors and Debt Collectors You have the right to: Stop creditors and debt collectors from reporting fraudulent accounts. After you give them a copy of a valid identity theft report, they may not report fraudulent accounts to the credit reporting companies. Get copies of documents related to the theft of your identity, like transaction records or applications for new accounts. Write to the company that has the documents, and include a copy of your identity theft report. You also can tell the company to give the documents to a specific law enforcement agency. Stop a debt collector from contacting you. In most cases, debt collectors must stop contacting you after you send them a letter telling them to stop. Get written information from a debt collector about a debt, including the name of the creditor and the amount you supposedly owe. If a debt collector contacts you about a debt, request this information in writing. I know that you said that the main problem was that your credit account was combined with another. But there might be a chance that identity theft was involved. If this is the case, and you can prove it, then you might have access to more tools to help you. For example, you can file a report with the FTC, and along with a police report, this can be a powerful tool in stopping these charges. Feel free to go to the identitytheft.gov website for more information.\"",
"title": ""
},
{
"docid": "4d6937810c10c24969fcd83f1852c5c1",
"text": "No credit bureau wants incorrect data, for obvious reasons, but it happens. That's one reason why they let you get access to your credit score, to check it the data is correct and make the 'product' (data about you) better. Nope, that's not why you can get free access to your credit report. The Fair Credit Reporting Act (FCRA) is why. FCRA requires any credit reporting agency to provide you a free report upon request every 12 months. Prior to this law, credit agencies made you pay to see your report including if you wanted it to dispute errors. They only care about the dollars they get from having this data. FCRA removed one of their revenue streams. If free locking moves forward, that will remove another. So expect them to fight it.",
"title": ""
},
{
"docid": "3a63d03786cd064808fb119a8a7f559e",
"text": "\"You should hire a lawyer. The fact that they told you your personal information shows that they actually had it, and are not imposters, which is a good thing. The fact that they mislead you means that their intentions are not pure (which is not surprising coming from a collection agency of course). When dealing with collections (or any matter of significance for that matter), don't rely on their recording of the call, because they can always conveniently lose it. Make sure to write down every single detail discussed, including the date and time of the call, and the ID/name of the person on the other side. If possible - make your own recording (notifying them of it of course). It's too late to record the calls now, but do try to reconstruct as much information as possible to provide to your lawyer to deal with it. In the end of the day they will either provide you with the recording (and then you might be surprised to hear that what they said was not in fact what you thought they said, and it was just your wishful thinking, it is very possible to be indeed the case), or claim \"\"we lost it\"\" and then it will be a problem to either of you to prove who said what, but they'll have the better hand (having better lawyers) in convincing the court that you're the one trying to avoid paying your debts. That is why proper representation at all stages is important. As to the bankruptcy - it won't help for student loans, student loans is one of the very few types of debts you can't really run away from. You have to solve this, the sooner the better. Get a professional advice. For the future (and for the other readers) - you should have gotten the professional advice before defaulting on these loans, and certainly after the first call.\"",
"title": ""
},
{
"docid": "18204c9083646cc9aa4682d0f5d23764",
"text": "Collections companies buy debt for a fraction of the face value of the debt (as little as 5-7 cents on the dollar), and you can often settle debt for a fraction of the face amount (perhaps 10-25 cents on the dollar). But there are several considerations. Do you owe the debt (is it a legitimate debt), can you afford to pay the debt, what is the age of the debt (remember, there is a statute of limitations on debt, varies by state), and what are the consequences of non-payment or settlement of the debt. Rather than confirm that you owe the debt, tell the debt collector that you need proof that the debt is yours (you should do this by certified letter). Be careful not to confirm the debt, or agree to pay it, or make any payments (yet). You said that your doctor ordered the product for you. You said the company sent you a product (you have the product). Once you have confirmed that the debt is yours, you should determine the age of the debt (when was the last time you paid on the debt). Each state has statute of limitations on debt, depending upon the age of the debt (this is why it is important not to send the collector money until you have verified the debt). You did not state when the debt was incurred (assume under SoL). Ask yourself whether you can afford to pay the debt. The amount of the debt, and your ability to pay, and whether you want to avoid the time and expense of dealing with the collector (they are trained to be annoying) are all factors to consider. You should also consider the negative consequences (credit score effects), and whether the cost of a derogatory entry is worth fighting the debt. You did not explain your financial situation; paying the $55 may be trivial, or it may be a hardship. Before you settle any debt, you should send a letter (keep a copy and proof you sent it, certified), and demand that the debt collector provide proof that you owe the debt. Often this proof does not exist, or is insufficient to gain a judgement (you would need legal help here). And should a debt collector agree to settle the debt for a lower amount, you need to get that agreement in writing. Be aware that when you settle a debt, the collector can (and will) send you a 1099 for the portion of the debt which has been forgiven, and can report to the credit bureaus that you settled a debt for less than the full amount (negative mark against credit). Derogatory credit items will haunt you for years. Decide whether saving $20, $30 or even $55 is worth the trouble. Probably not. Learn from this. When a company sends you something you did not order, contact them, and send it back or demand they pay shipping, and send them a letter demanding $5/day storage and $20 handling fee to ship it back to them. Disclaimer: Heed the insane ravings of a deranged heretic at your peril... hire a lawyer.",
"title": ""
},
{
"docid": "7c5c80b89c7a12c454f67efe2fd2f61a",
"text": "\"Typically, the CC company itself won't follow the customer very far upon a default (though it certainly can act as its own debt collector, or hire an agency for a fee to do the collection). What most often happens: Once they do that, assuming they win the lawsuit, they can do the following: They cannot \"\"force\"\" you into bankruptcy, but they might make it so you have no better options (if bankruptcy is less painful than the above, which it often is). They certainly can (and will) report to the credit bureaus, of course. For more information, Nolo has a decent help site on this subject. Different jurisdictions have slightly different rules, so look up yours. Here is an example (this is from Massachusetts). Not every debt is sued for, of course; particularly, pay attention to the statute of limitations in your state. (In mine, it's seven years, for example.) And it's probably worth contacting someone locally (a legitimate non-profit debt relief agency, or your state's help agency if they have one) to find local rules and regulations.\"",
"title": ""
}
] |
fiqa
|
7bdce67af1c68d6ec51754d446bae5f3
|
In the UK, can authors split a single advance on a book over multiple tax returns?
|
[
{
"docid": "2e049953420e0a257e711543060774db",
"text": "HMRC calls it: Averaging for creators of literary or artistic works, and it is the averaging of your profits for 2 successive years. It's helpful in situations like you describe, where income can fluctuate wildly from year to year, the linked article has the full detail, but some of the requirements are: You can use averaging if: you’re self-employed or in a partnership, and the business started before 6 April 2014 and didn’t end in the 2015 to 2016 tax year your profits are wholly or mainly from literary, dramatic, musical or artistic works or from designs you or your business partner (if you’re in a partnership) created the works personally. Additionally: Check that your profit for the poorer year, minus any adjusted amounts, is less than 75% of the figure for your better year. If it is, you can use averaging. Then, check if the difference between your profits for the 2 years is more than 30% of your profit for the better year. If it is, work out the average by adding together the profits for the 2 years, and divide the total by 2.",
"title": ""
}
] |
[
{
"docid": "933bb1e18b539b7a8e5174ea7077c857",
"text": "I cannot speak for the specific jurisdictions but you will generally pay income tax in each jurisdiction and be required to declare your foreign income in both. Your annual assessment takes into account both domestic and foreign income so sadly, there is no tax windfall to you. I would imagine that Finland and Belgium have tax treaties so you will not have to pay tax twice. You need an accountant in both countries to sort this for you.",
"title": ""
},
{
"docid": "dd10d90ffdb55b8ff054948c6a6d2926",
"text": "\"You will be filing the exact same form you've been filing until now (I hope...) which is called form 1040. Attached to it, you'll add a \"\"Schedule C\"\" form and \"\"Schedule SE\"\" form. Keep in mind the potential effect of the tax and totalization treaties the US has with the UK which may affect your filings. I suggest you talk to a licensed EA/CPA who works with expats in the UK and is familiar with all the issues. There are several prominent offices you can find by Googling.\"",
"title": ""
},
{
"docid": "3c93547daf7808e5d25d4c3003e27076",
"text": "\"I'm answering my own question because in some sense, I alone know the answer. After the review, HMRC decided to waive all penalties (including the initial £100 penalty for late filing, which I had not appealed against) because \"\"HMRC may not have informed me\"\" about the mounting penalties. I had pretty good evidence that they hadn't informed me as there was a software change and immediately after that I got an initial penalty notice followed a day or so later by the further penalty notice. But I am happy with the outcome, I wasn't going to argue any further!\"",
"title": ""
},
{
"docid": "0ce3c0de5cd8ce04c8a1764c39e3c46d",
"text": "No, there is no special leniency given to first time tax payers. In general, this shouldn't be an issue. The IRS collects your taxes out of every one of your paychecks throughout the entire year in what is called a Withholding Tax. The amount that the IRS withholds is calculated on your W-4 Form that you file with your employer whenever you take a new job. The form helps you calculate the right number of allowances to claim (usually this is the number of personal exemptions, but depending upon if you work a second job, are married and your spouse works, or if you itemize, the number of allowances can be increased. WITHHOLDING TAX Withholding tax (also known as “payroll withholding”) is essentially income tax that is withheld from your wages and sent directly to the IRS by your employer. In other words, it’s like a credit against the income taxes that you must pay for the year. By subtracting this money from each paycheck that you receive, the IRS is basically withholding your anticipated tax payment as you earn it. In general, most people overestimate their tax liability. This is bad for them, because they have essentially given the IRS an interest free loan (and weren't able to use the money to earn interest themselves.) I haven't heard of any program targeted at first time tax payers to tell them to file a return, but considering that most tax payers overpay they should or they are giving the government a free grant.",
"title": ""
},
{
"docid": "68ef32bfccf785eb45abd36e22f3fe2c",
"text": "\"I think the £35K band applies to the \"\"dividend income\"\" not the \"\"dividend paid to you\"\", and so you would only actually get £31.5K (90% of £35K) in your pocket before the next tax band kicked in. If your company will only supplying large VAT registered entities, then register for VAT yourself and elect the Flat Rate scheme - depending on your area of business, given that you have no expenses, your company will get an extra 7% - 14% on its income for free. Your clients won't care that you charge them VAT because they'll claim it back. Finally, depending on what your company is for, beware of the dreaded IR35\"",
"title": ""
},
{
"docid": "e681e4b1b318f21ad1c28a92d8859cea",
"text": "There is no clear answer, it might be or not be. Depends a lot on your situation. 1)Yes it is taxable but as Italy has a double taxation agreement with UK, you might not have to pay. You can get a detailed guidance on the HMRC website. 2) Apply here for a certificate of residence 3)You can only claim back if Italy taxes you more than UK would. If it is less than you will have to pay the remaining portion to HMRC. You do this in the self assessment form/tax return/call up HMRC. 4)Tell the truth, explain your whole scenario and don't withheld relevant information assuming you may lower you tax by doing so.",
"title": ""
},
{
"docid": "c584ea3ef8b9b2732ccb1dfe350e2151",
"text": "The 'same day rule' in the UK is a rule for matching purposes only. It says that sales on any day are matched firstly with purchases made on the same day for the purposes of ascertaining any gain/loss. Hence the phrase 'bed-and-breakfast' ('b&b') when you wish to crystalise a gain (that is within the exempt amount) and re-establish a purchase price at a higher level. You do the sale on one day, just before the market closes, which gets matched with your original purchase, and then you buy the shares back the next day, just after the market opens. This is standard tax-planning. Whenever you have a paper gain, and you wish to lock that gain out of being taxed, you do a bed-and-breakfast transaction, the idea being to use up your annual exemption each and every year. Of course, if your dealing costs are high, then they may outweigh any tax saved, and so it would be pointless. For the purpose of an example, let's assume that the UK tax year is the same as the calendar year. Scenario 1. Suppose I bought some shares in 2016, for a total price of Stg.50,000. Suppose by the end of 2016, the holding is worth Stg.54,000, resulting in a paper gain of Stg.4,000. Question. Should I do a b&b transaction to make use of my Stg.11,100 annual exemption ? Answer. Well, with transaction costs at 1.5% for a round-trip trade, suppose, and stamp duty on the purchase of 0.5%, your total costs for a b&b will be Stg1,080, and your tax saved (upon some future sale date) assuming you are a 20% tax-payer is 20%x(4,000-1,080) = Stg584 (the transaction costs are deductible, we assume). This does not make sense. Scenario 2. The same as scenario 1., but the shares are worth Stg60,000 by end-2016. Answer. The total transaction costs are 2%x60,000 = 1,200 and so the taxable gain of 10,000-1,200 = 8,800 would result in a tax bill of 20%x8,800 = 1,760 and so the transaction costs are lower than the tax to be saved (a strict analysis would take into account only the present value of the tax to be saved), it makes sense to crystalise the gain. We sell some day before the tax year-end, and re-invest the very next day. Scenario 3. The same as scenario 1., but the shares are worth Stg70,000 by end-2016. Answer. The gain of 20,000 less costs would result in a tax bill for 1,500 (this is: 20%x(20,000 - 2%x70,000 - 11,100) ). This tax bill will be on top of the dealing costs of 1,400. But the gain is in excess of the annual exemption. The strategy is to sell just enough of the holding to crystallise a taxable gain of just 11,100. The fraction, f%, is given by: f%x(70,000-50,000) - 2%xf%x70,000 = 11,100 ... which simplifies to: f% = 11,100/18,600 = 59.68%. The tax saved is 20%x11,100 = 2,220, versus costs of 2%x59.58%x70,000 = 835.52. This strategy of partial b&b is adopted because it never makes sense to pay tax early ! End.",
"title": ""
},
{
"docid": "0ff87b4504eaa0cf33d2b696582f47ef",
"text": "\"I think the \"\"right\"\" way to approach this is for your personal books and your business's books to be completely separate. You would need to really think of them as separate things, such that rather than being disappointed that there's no \"\"cross transactions\"\" between files, you think of it as \"\"In my personal account I invested in a new business like any other investment\"\" with a transfer from your personal account to a Stock or other investment account in your company, and \"\"This business received some additional capital\"\" which one handles with a transfer (probably from Equity) to its checking account or the like. Yes, you don't get the built-in checks that you entered the same dollar amount in each, but (1) you need to reconcile your books against reality anyway occasionally, so errors should get caught, and (2) the transactions really are separate things from each entity's perspective. The main way to \"\"hack it\"\" would be to have separate top-level placeholder accounts for the business's Equity, Income, Expenses, and Assets/Liabilities. That is, your top-level accounts would be \"\"Personal Equity\"\", \"\"Business Equity\"\", \"\"Personal Income\"\", \"\"Business Income\"\", and so on. You can combine Assets and Liabilities within a single top-level account if you want, which may help you with that \"\"outlook of my business value\"\" you're looking for. (In fact, in my personal books, I have in the \"\"Current Assets\"\" account both normal things like my Checking account, but also my credit cards, because once I spend the money on my credit card I want to think of the money as being gone, since it is. Obviously this isn't \"\"standard accounting\"\" in any way, but it works well for what I use it for.) You could also just have within each \"\"normal\"\" top-level placeholder account, a placeholder account for both \"\"Personal\"\" and \"\"My Business\"\", to at least have a consistent structure. Depending on how your business is getting taxed in your jurisdiction, this may even be closer to how your taxing authorities treat things (if, for instance, the business income all goes on your personal tax return, but on a separate form). Regardless of how you set up the accounts, you can then create reports and filter them to include just that set of business accounts. I can see how just looking at the account list and transaction registers can be useful for many things, but the reporting does let you look at everything you need and handles much better when you want to look through a filter to just part of your financial picture. Once you set up the reporting (and you can report on lists of account balances, as well as transaction lists, and lots of other things), you can save them as Custom Reports, and then open them up whenever you want. You can even just leave a report tab (or several) open, and switch to it (refreshing it if needed) just like you might switch to the main Account List tab. I suspect once you got it set up and tried it for a while you'd find it quite satisfactory.\"",
"title": ""
},
{
"docid": "32a6b9eaa31b2a8e86c71e2ed7133cc1",
"text": "I think there are actually two separate questions here. Will Provider A allow me to transfer only part of an ISA product to Provider B while keeping the other part in Provider A. Only Provider A can answer this. Will HMRC rules allow me to keep making payments to the part that remained in Provider A. I don't have a definitive source for this, but in my experience where the ISA rules have been unclear about particular edge cases and I have asked HMRC similar questions directly, their answer has always been that they will look at the situation in the round at the end of the tax year (they get summaries from the providers) and as long as you haven't attempted to double-benefit or otherwise get around the limits, they won't have an issue with it.",
"title": ""
},
{
"docid": "305d0bb481877f331240bc5ec2e0572e",
"text": "I love the flat rate VAT scheme. It's where you pay a percentage based on your industry. An example might be Computer repair services, where you'll pay 10.5% of your total revenue to the HMRC. But you'll be invoicing for VAT at 20% still. Would definitely recommend registering for it since you're expecting to cross the threshold anyway. And like DumbCoder said, you also get a first year discount of 1%, so in the example above, you'd end up paying 9.5% VAT on your turnover. I personally found it a pain to invoice without VAT (my clients expected it), so registering made sense regardless of the fact I was over threshold. The tricky bit is keeping under the £150k turnover so you stay eligible for the flat rate. It does get more complex otherwise.",
"title": ""
},
{
"docid": "202f61961efc3e68e6a0d7022716bdbb",
"text": "Is it true that you cannot amend a tax return to include both a futures loss carry back and a Schedule C at the same time? No, it is not true. You can include all the changes necessary in a single amended return, attaching statement explaining each of the changes. However you're talking about two different kinds of changes. Futures loss carryback is a Sec. 1212 carryback and not a correction of an error. Adding Schedule C would be a correction of an error. I'm guessing your CPA wants to separate the two kinds to avoid the situation where the IRS refuses to accept your correction of an error and by the way also doesn't accept the Sec. 1212 carryback on the same return. Or the CPA just wants to charge you twice for amendments.",
"title": ""
},
{
"docid": "358ca6cdfe9780ec08e4a2d93d91605b",
"text": "My understanding (I am not a lawyer or tax expert) is that you are not allowed to work for free, but you can pay yourself minimum wage for the hours worked. There are probably National Insurance implications as well but I don't know. The main thing is, though, that if HMRC think that you've set up this system as a tax avoidance scheme then they're allowed to tax you as though all the income had been yours in the first place. If you are considering such a setup I would strongly advise you to hire a qualified small business accountant who will be familiar with the rules and will be able to advise you on what is and is not possible / sensible. Falling outside the rules (even inadvertently) leaves you liable to a lot of hassle and potentially fines etc.",
"title": ""
},
{
"docid": "9dadcaf1b7aff5c3555a19c51de29974",
"text": "The CPA's mention of $2,500 is probably referring to the recently increased de minimis safe harbor under the final tangible property regulations (used to be $500) without an applicable financial statement. The IRS will not challenge your choice of expense or capitalization on amounts on or below $2500 if you elect the de minimis safe harbor election on your return. However, you must follow whatever you're doing for your books. (So if you are capitalizing your laptops for book purposes, you would also need to capitalize for tax purposes). Section 179 allows you to expense property that you would have otherwise have had to capitalize and depreciate. Section 179 can be annoying, especially if your LLC is treated as a passthrough, because there are recapture provisions when you dispose of the asset too early. For the tax return preparer, it makes the return preparation much more simple if there are no fixed assets to account for in the first place, which is quite possible if you are expensive all items/invoices less than $2,500.",
"title": ""
},
{
"docid": "848ab8b6c4f59f784f99de5bb5c720c8",
"text": "Unless you're running a self-employed business with a significant turnover (more than £150k), you are entitled to use cash basis accounting for your tax return, which means you would put the date of transactions as the payment date rather than the billing date or the date a debt is incurred. For payments which have a lag, e.g. a cheque that needs to be paid in or a bank transfer that takes a few days, you might also need to choose between multiple payment dates, e.g. when you initiated the payment or when it took effect. You can pick one as long as you're consistent: You can choose how you record when money is received or paid (eg the date the money enters your account or the date a cheque is written) but you must use the same method each tax year.",
"title": ""
},
{
"docid": "9af2bf4946067893611b79bae75ae717",
"text": "\"There is a ten year statue of limitations on debt collection, bankruptcy, etc. The problem is, if you start paying, even say, $1, you \"\"acknowledge\"\" the debt and the clock starts again. Debt claims fall under the \"\"he said, she said,\"\" rubric. In debt restructuring situations, the debtor is taught to write all their creditors DENYING debts. Some percentage of those creditors won't have the paperwork to back up their claims. Others will, and can press their claims. Then a court decides. But in any event, a debt more than tens years old is a \"\"stale,\"\" debt. A court is likely to rule in your favor. Unless you \"\"acknowledge\"\" the debt.\"",
"title": ""
}
] |
fiqa
|
c03b5701def5c35b40939e20b51359f7
|
How much (paper) cash should I keep on hand for an emergency?
|
[
{
"docid": "bd29431b9fd6786487aa9b028a61c3fe",
"text": "\"Coming from an area that is hurricane prone, and seeing what happens to local businesses during evacuations/power outages/gas shortages, I think what you already have on hand should be sufficient. And it sounds like that's exactly what you're budgeting for. I'd say 2 weeks worth of fuel and food costs, with the budget for each in line with riding out a natural disaster. True \"\"Preppers\"\" would say keep your money in gold buried in the backyard surrounded by land mines, but that's not perhaps what you're looking for. It is not uncommon for gas stations and grocery stores to revert to cash only sales, especially if they're not big chain operations. If the internet is out, or power is spotty, they may not be able to process CCs. Again, think smaller or more rural businesses. I have seen gas stations switch to cash only during gas shortages as well to help limit how much fuel people were buying. $250 should get you through fine unless you drive a tank and need steak every night. You could probably go with less, but it's entirely dependent on your needs. As Joe rightly stated in his answer, if it's desperate enough times that you can't use a CC or debit card, cash may not even be useful to you.\"",
"title": ""
},
{
"docid": "330bf78226ad31ceed4dba2a3dbe9b5e",
"text": "\"It's also worth thinking about minor \"\"emergencies\"\" when the location of your cash may be more important than the amount. I keep a baggie of change and small bills in my glovebox for meters and tolls. I keep a ten dollar bill in my armband when I go out for a jog or bike. Those little stashes have saved me more than once. Zombie apocalypse money? I just have a couple hundred at home.\"",
"title": ""
},
{
"docid": "e9a227401a5aa5cbce8e3ddea2a6a61c",
"text": "No cash is necessary for most people. In the modern day in the US there is no need to keep paper currency around for emergencies; any sort of emergency that knocked out all of the ability to use plastic (ATMs, credit cards, etc.) for an extended period of time AND knocked your bank out of service would be of the level that cash might not have any value either. Your $100 of cash for natural disasters is likely more than enough, and even that I wouldn't necessarily consider a vital thing in this day where even a major natural disaster probably isn't going to have too much impact on the financial sector outside of the immediate area (that you should be exiting quickly). Keep however much cash around that you need for day to day cash expenses, and that should be enough. The level of emergency that would suggest cash being needed would probably need more than you'd actually want to keep around, anyway - i.e., a complete collapse of the American or World financial system would imply you need months' worth of cash. That's just not feasible, nor is it practical financially. You should have your emergency fund making at least a bit of interest - 1% or so isn't hard to get right now, and in the near future that may increase substantially if interest rates go up. It also would make you a substantial theft target if it were known you had months' worth of cash around the house (i.e., thousands of dollars). Safes don't necessarily give you sufficient protection unless you've got a very good safe - commercial ones are only as safe as the ability to crack them and/or transport them is. Now, if you find yourself regularly out at 2am and run out of cash, and you live somewhere that ATMs don't exist, and you find yourself needing to pay cab drivers from time to time after a drunk bender... then I'd keep at least one cab's worth of cash at home.",
"title": ""
}
] |
[
{
"docid": "c5f6eaba86351787a2d8128549b67dd8",
"text": "\"If you were asking if you should buy silver for an emergency fund, I'd say no. But, you already have it... Note: I wrote most of the below under the assumption that this is silver bullion coins/bars; it didn't occur to me till the end that it could be jewelry. Both of you have good arguments for your points of view. Breaking it down: Her points 1. A very good point. And while she may not be irresponsible, maybe the invisibility of it is good for her psychology? It's her's, so her comfort is important here. 2. Good. Make sure it's explicitly listed on the policy. 3. Bad. I think it will as well, at least the long run. But, this is not a good reason for an emergency fund -- the whole point of which is to be stable in case of emergencies. 4. Good. Identity theft is a concern, though unless her info is already \"\"out there\"\", it's insufficient for the emergency fund. And besides, she could keep cash. Your points 1. Iffy. On the one hand, you're right. On the other hand, Cyprus. It is good to remember that money in accounts is in someone else's control, not yours, as the Cypriots found out to their chagrin. And of course, it can't happen here, but that's what they thought too. There is value in having some hard assets physically in your control. Think of it as an EMERGENCY emergency fund. Cash works too, but precious metals are better for these mega-upheaval scenarios. Again, find out how having such an EMERGENCY fund would make her feel. Does having that give her some comfort? A gift from a family member of this much silver leads me to assume that her family might have a little bit of a prepper culture. If so, then even if she is not a prepper herself, she may derive some comfort from having it, just in case -- it'll be baked into her background. Definitely a topic to discuss with her. 2. Excellent point. This is precisely why you want your emergency fund in some form of cash. 3. Bad. You can walk into any pawn shop and sell it in a heartbeat. Or you can send it in to a company and have cash in days. 4. Bad. If you know a savings account that pays 3%-4%, please, please, please tell me where it is so I can get one. Fact is, all cash instruments pay negligible interest now, and all such savings are being eroded by inflation. 5. Maybe. There is value to looking at your net worth this way, but my experience has been that those that do take it way too far. I think there's more value at looking at allocation within a few broad \"\"buckets\"\" -- emergency fund, savings (car, house, college, etc), and retirement fund. If this is to be an EMERGENCY fund, as per point #1, then you should look at it as its own bucket (and maybe add a little cash too). Another thought to add: This is a gift from a family member -- they gave her a lot of silver. Of course it's your SO's now, and she can do whatever she wants with it, but how would the family member react if she did liquidate it? If that family member is a prepper, and gave her this with the emotional desire to see her prepped, they may be upset if she sold it. It just occurred to me this may be jewelry. Your SO may not have sentimental attachment to it, but what about the family member's sentiments? They may not like to see family silver they loving maintained and passed on casually discarded for mere cash by your SO. Another thing to discuss with her. Wrap up Generally, you are right about not keeping a 6 month emergency fund in silver. But there are other factors to consider here. There's also the fact that it's already bought -- the cost of buying (paying over market) has already been taken. Edit -- so it's silverware Ah, so it's silverware. Well, scratch everything, except how the family member feels about, which now looms large. This doesn't have much value as an emergency fund. Nor really as an investment. If you did keep it as an investment, think of it as an investment in collectibles/art, less so in precious metals. If no one will get upset, I'd say pick out the nicest set to keep for special occasions, and sell the rest. Find out first if it has collectible or historical value. It may be worth far more than the pure weight in silver. Ebay might be the way to go to sell it.\"",
"title": ""
},
{
"docid": "3414a9831fe266b28d86c9ca5e4cadd5",
"text": "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.",
"title": ""
},
{
"docid": "282c4838e580e0be743822cbeeb88683",
"text": "\"Liquid cash (emergency, rainy day fund) should be safe from a loss in value. Mutual funds don't give you this, especially stock funds. You can find \"\"high yield\"\" savings accounts that are now at around .8% to .9% APY which is much better than .05% and will hopefully go up. Barclays US and American Express are two big banks that normally have the highest rates. Most/all Savings and Money Market accounts should be FDIC insured. Mutual funds are not, though the investment IRA, etc. holding them may be.\"",
"title": ""
},
{
"docid": "f43a0b7b433e2b4d389c13d44e373ed1",
"text": "\"Yes... but it is a matter of balancing risks. It is wiser to keep a small amount of \"\"ready cash\"\" as an emergency/buffer -- and to suffer the gradual loss to inflation... Than it is risk becoming \"\"stuck\"\" in an emergency with zero dollars in any (low or no cost) source of funds -- those kinds of \"\"emergencies\"\" ($500 or $1,000 \"\"unexpected/unbudgeted\"\" expenses) are fairly frequent and virtually inevitable. You lose vastly MORE money when you are forced to borrow those amounts (interest -- even **low-rate** loans -- is virtually always higher than the average inflation rate).\"",
"title": ""
},
{
"docid": "ad506b5910152fb05fc69f2320f26b2a",
"text": "\"In your comment, you said: It just seems a little stupid to me to go and put away money for the explicit purpose of emergencies (presumably in a way that's somehow different from how you would normally save money). Seems better to go and treat the money as you would normally, and then pull whatever you need from the money that you had saved. The problem with that logic is that people save money for many different things. You might save for a vacation, or a new refrigerator, or a new car, or a house, or your kids' college education. If you \"\"pull whatever you need\"\" for such expenses, you may find that when a real emergency occurs, you don't have enough money. The things you used it for may have been legitimate, reasonable expenses, but nonetheless you may later wish you had deferred those expenses until after you had built up a cushion. So the idea of an emergency fund is to designate certain money that is not to be used for \"\"whatever you need\"\", but specifically for unforeseen circumstances. Of course there can be debate about what counts as an emergency, but the main point is to distinguish saving for planned future expenses from saving for unplanned future expenses. Note that this doesn't mean the money has to be in a separate account, or saved in any special \"\"way\"\". It just means the money has to be considered by you as an emergency fund. For some people, it may be psychologically useful to put the emergency fund in a separate account that they never withdraw from. But even if you just have all your money in one savings account and you mentally tell yourself, \"\"I don't want to ever let the balance drop below $10,000, just so I have a safety cushion\"\" then you are effectively designating that $10,000 as an emergency fund.\"",
"title": ""
},
{
"docid": "1b930307b37db3d52cb9b7bc3ef61bcc",
"text": "If it gets bad enough that banks start failing, you probably will have a hard time accessing overseas accounts. That's real SHTF stuff. If so, lighters and toilet paper are probably the best investment you can make besides canned and dried food. Update: Complete breakdown of society is far more likely than the paranoid fantasy of Trump establishing an authoritarian government. The general population would rise up and you would find the civil unrest portion to be important. As for lighters and toilet paper, think about it for a minute. If you've got a case of food in cans but no way to heat them, would you trade a can for a lighter? Two cans? And toilet paper would be worth its weight in gold after about 2 months. If you really want to be a prepper, seeds, medicine, are all good things, but the really important thing to have is skills. Know how to hunt, clean an animal, tend a garden, clean and dress a wound. Having gold and diamonds would be a decent hedge for a fraction of your investments.",
"title": ""
},
{
"docid": "71f3d288c088c22004fbb25fa1ba1cb1",
"text": "(in response to last comment to me) Ok. I understand now. Forgive me if I appeared to be splitting hairs. When it comes to understanding, exact wording is important. I keep money at home, enough to not be a frequent ATM user, not enough to imply any distrust of the banking system or preparation for Armageddon. You last comments implies the brochure said 13% keep all their money at home, i.e. have no banking relationship. A recent poll concluded 25% of people had less than $2500 available if they had an issue, such as the need to repair a car, or furnace. From that factoid, it wouldn't surprise me that half of those people have no bank acount at all. Not for lack of trust, but lack of money to deposit.",
"title": ""
},
{
"docid": "8fabd662cde5b0f83b0bc7e8c8080564",
"text": "\"Aside of \"\"don't lend money to friends\"\" a good idea is to have a written contract that states the sum, the due date, the interest (if any). Having the loan on paper makes it more real and harder to \"\"forget\"\". The third party is not necessary - anyone can have a bank loan for more than $10K by signing a contract with a bank without any third party.\"",
"title": ""
},
{
"docid": "109518e8738dc5d7fb5e0c72d32a2771",
"text": "If I were you I would just save the money until I had at least 5000 pounds to keep as an emergency fund. There are various kinds of unexpected events and it is smart to have some cash in case a problem comes up. Next time I would recommend buying a car you can afford. Borrowing money to buy nice things is the enemy of wealth accumulation. Also, when you buy a car for cash you will get a much better deal than when you let a dealer put his foot on your neck.",
"title": ""
},
{
"docid": "8bcb299542d5b53e6cf270068befe62c",
"text": "The 'appropriate' amount of cash/bonds to hold will be largely a matter of opinion, but here are the general reasons why having at least some is a good idea: Cash is very liquid, and bonds are often mostly liquid. This means you can access them very quickly, without taking on losses. To get the most liquidity out of your bonds, you can do what is called 'laddering'. This means that you take out different bond amounts with different maturity dates, and periodically renew them on a schedule, so that you always have some bonds maturing, which you can access without paying an interest penalty. You can look this term up online for more details. Cash and bonds are low risk. If you have absolutely no low-risk assets, then in the event of, say, a market crash, you may have no savings to fall back on. By owning some bonds, and some equities, you are able to earn a modest return, without being too risky. However, note that some bonds are just as risky as equities - any bond which pays an abnormally high interest rate does so because the entity backing the repayment (government, company, whomever) is thought to not be guaranteed to be able to do so. The 25% figure given by your author is his opinion on the appropriate mix of cash/bonds to equities, but there are many views on the matter. Consider that any 'rule of thumb' in personal finance should be for general consideration only.",
"title": ""
},
{
"docid": "9b9a659ee68b3baea3494b9c715fafe6",
"text": "\"For me, the emergency fund is meant to cover unexpected, but necessary expenses that I didn't budget for. The emergency fund allows me to pay for these things without going into debt. Let's say that my car breaks down, and I don't have any money in my budget for fixing it. I really need to get my car fixed, so I spend the money from my emergency fund. However, cars break down periodically. If I was doing a better job with my budget, I would allocate some money each month into a \"\"car repair/maintenance\"\" category. (In fact, I actually do this.) With my budgeting software, I can look at how much I've spent on car repairs over the last year, and budget a monthly amount for car repair expenses. Even if I do this, I might end up short if I am unlucky. Emergency fund to the rescue! If I'm budgeting correctly, I don't pay any regular bills out of this fund, as those are expected expenses. Car insurance, life insurance, and property tax are all bills that come on a regular basis, and I set aside money for each of these each month so that when the bill comes, I have the money ready to go. The recommended size of an emergency fund is usually listed as \"\"3 to 6 months of expenses.\"\" However, that is just a rough guideline. As you get better with your budget, you might find that you have a lower probability of needing it, and you can let your emergency fund fall to the lower end of the guideline range. The size of my own emergency fund is on the lower end of this scale. And if I have a true crisis (i.e. extended unemployment, severe family medical event), I can \"\"rob\"\" one of my other savings funds, such as my car replacement fund, vacation fund, etc. Don't be afraid to spend your emergency fund money if you need it. If you have an unexpected, necessary expense that you have not budgeted for, use the emergency fund money. However, your goal should be to get to the point where you never have to use it, because you have adequately accounted for all of the expenses that you can reasonably expect to have in the future.\"",
"title": ""
},
{
"docid": "b8d347f46e81ba0f67ad4363338c0677",
"text": "Here are my conditions for an emergency account: A compromise would be to have 1,000-2,000 in a very liquid account and the rest in something a little less liquid that maybe has a minimum balance (but no transaction requirements). The behavioral risk is when you do have an emergency and you don't want to cash out or go through any hassle to get it out, so you just charge the emergency instead of paying cash.",
"title": ""
},
{
"docid": "de1c3f369648d07b5b08720b0545286d",
"text": "\"The above answers are great. I would only add to the \"\"rainy day\"\" part, that even though the cash provides a good cushion, \"\"a stormy day\"\" could mean even losing those emergency savings to the unignorable randomness that governs the world economy. Though unlikely, what happened to the russian ruble and the latest decision of the swiss cental bank are just two recent reminders that uncertainty must be treated as a constant. I would therefore advise you to invest some of the money in land capable of agriculture. How expensive is land over there in the UK?\"",
"title": ""
},
{
"docid": "d0ad9f9eb2ce3f554c89fd6e9644f846",
"text": "\"If you've already got emergency savings sufficient for your needs, I agree that you'd be better served by sending that $500 to your student loan(s). I, personally, house the bulk of my emergency savings in CDs because I'm not planning to touch it and it yields a little better than a vanilla savings account. To address the comment about liquidity. In addition to my emergency savings I keep plain vanilla savings accounts for miscellaenous sudden expenses. To me \"\"emergency\"\" means lost job, not new water pump for my car; I have other budgeted savings for that but would spend it on a credit card and reimburse myself anyway so liquidity there isn't even that important. The 18 month CDs I use are barely less liquid than vanilla savings and the penalty is just a couple months of the accrued interest. When you compare a possible early distribution penalty against the years of increased yield you're likely to come out ahead after years of never touching your emergency savings, unless you're budgeted such that a car insurance deductible is an emergency expense. Emergency funds should be guaranteed and non-volatile. If I lose my job, 90 days of accrued interest isn't a hindrance to breaking open some of my CDs, and the process isn't so daunting that I'd meaningfully harm my finances. Liquidity in 2017 and liquidity in whatever year a text book was initially written are two totally different animals. My \"\"very illiquid\"\" brokerage account funds are only one transaction and 3 settlement days less liquid than my \"\"very liquid\"\" savings account. There's no call the bank, sell the security, wait for it to clear, my brokerage cuts a check, mail the check, cash the check, etc. I can go from Apple stock on Monday to cash in my hand on like Thursday. On the web portal for the bank that holds my CDs I can instantly transfer the funds from a CD to my checking account there net of a negligible penalty for early distribution. To call CDs illiquid in 2017 is silly.\"",
"title": ""
},
{
"docid": "64a7b44f86adca21b42b347c1246262a",
"text": "While there have been plenty of good answers I would like to suggest turning it on it's head--the problem is one of perception. Other than in terms of cash-type emergency funds (my general policy is to have enough cash to get home, however far from there I might be) I consider available credit + assets that can be liquidated reasonably quickly to count as emergency fund money.",
"title": ""
}
] |
fiqa
|
91e28677ad4f2d663e10299c8df21caf
|
Where can I find recent information about which major shareholders changed their positions in a given stock?
|
[
{
"docid": "25d8cc1c9a89bc05461a1f7d3745d1d6",
"text": "For the united States forms must be submitted electronically with the Securities and Exchange Commission , they also must be posted to company websites.",
"title": ""
}
] |
[
{
"docid": "9d9cfa352ce07f9aa89d06d2a710373e",
"text": "I don't see it in any of the exchange feeds I've gone through, including the SIPs. Not sure if there's something wrong with Nasdaq Last Sale (I don't have that feed) but it should be putting out the exact same data as ITCH.",
"title": ""
},
{
"docid": "e50fbda863f078d02e1be7577f198d04",
"text": "http://www.euroinvestor.com/exchanges/nasdaq/macromedia-inc/41408/history will work as DumbCoder states, but didn't contain LEHMQ (Lehman Brother's holding company). You can use Yahoo for companies that have declared bankruptcy, such as Lehman Brothers: http://finance.yahoo.com/q/hp?s=LEHMQ&a=08&b=01&c=2008&d=08&e=30&f=2008&g=d but you have to know the symbol of the holding company.",
"title": ""
},
{
"docid": "40e08223ac41fd50cdae1dcf1e7cebc1",
"text": "The reason for such differences is that there's no source to get this information. The companies do not (and cannot) report who are their shareholders except for large shareholders and stakes of interest. These, in the case of GoPro, were identified during the IPO (you can look the filings up on EDGAR). You can get information from this or that publicly traded mutual fund about their larger holdings from their reports, but private investors don't provide even that. Institutional (public) investors buy and sell shares all the time and only report large investments. So there's no reliable way to get a snapshot picture you're looking for.",
"title": ""
},
{
"docid": "5c0ef579af3a41287177f58384446190",
"text": "\"What in the world to shareholders have to do with it? Nowadays, the vast majority of the shares in most big corporations are \"\"owned\"\" via intermediaries (i.e. mutual funds and 401K's, IRA's and Pension Funds) that do not ALLOW the actual end owners to have any say whatsoever. All those investment vehicles *allow* people to care about ... is the share price.\"",
"title": ""
},
{
"docid": "d9d5189c132f0a6e7e2c252016c06ba4",
"text": "You could try asking Merrill Lynch, (general inquiries) :- http://www.ml.com/index.asp?id=7695_114042 So far I only found a few graphics :- http://topics.nytimes.com/top/news/business/companies/merrill_lynch_and_company/ http://www.reuters.com/article/2008/01/17/us-merrilllynch-results-idUSWNAS674520080117 http://www.stocktradingtogo.com/2008/09/15/merrill-lynch-saved-by-bank-of-america-buyout/",
"title": ""
},
{
"docid": "62018e52ddd02eed1e4c34166f6a7ae2",
"text": "\"There are several such \"\"lists.\"\" The one that is maintained by the company is called the shareholder registry. That is a list that the company has given to it by the brokerage firms. It is a start, but not a full list, because many individual shareholders hold their stock with say Merrill Lynch, in \"\"street name\"\" or anonymously. A more useful list is the one of institutional ownership maintained by the SEC. Basically, \"\"large\"\" holders (of more than 5 percent of the stock) have to register their holdings with the SEC. More to the point, large holders of stocks, the Vanguards, Fidelitys, etc. over a certain size, have to file ALL their holdings of stock with the SEC. These are the people you want to contact if you want to start a proxy fight. The most comprehensive list is held by the Depositary Trust Company. People try to get that list only in rare instances.\"",
"title": ""
},
{
"docid": "e7d69cf99658362327bc6de5f7648fe1",
"text": "The big websites, Yahoo and the like, only give the 10 biggest positions of any fund. Download the annual report of the fund, go to page 18, you will find the positions on the 31st of December. However the actual positions could be different. The same applies to all funds. You need the annual report.",
"title": ""
},
{
"docid": "fa95e1979b11c80f337daceb60d0ca40",
"text": "They have been changing over Immelts tenor. Didn't know he was stepping down though. Share buybacks can be for a variety of reasons. They feel stock price is undervalued, they want to support their current shareholders, debt is cheap so they can change their wacc, they prefer to return capital in a way that does not increase expected dividends in the future (something about dividends being sticky, and the a cut in dividends Make it look like company is doing bad), etc.",
"title": ""
},
{
"docid": "ab52113ec7e01f75d7dbf10acd3beb4c",
"text": "\"I'm searching for a master's thesis topic in equity investment or portfolio management and I'd be grateful if someone could tell me what are the hot \"\"trends\"\" going on right now on the market? Any new phenomenons (like the rise of blockchain, etf... but more relate to the equity side) or debates ( the use of the traditional techniques such as Beta to calculate WACC for example ...) ?\"",
"title": ""
},
{
"docid": "afc87e138f5ad7836364c72b04e864f2",
"text": "News about a company is not the only thing that affects its stock's price. There is also supply and demand. That, of course, is influenced by news, but it is not the only actor. An insider, with a large position in their company's stock, may want to diversify his overall portfolio and thus need to sell a large amount of stock. That may be significant enough to increase supply and likely reduce the stock's price somewhat. That brings me to another influence on stock price: perception. Executives, and other insiders with large positions in their company's stock, have to be careful about how and when they sell some of that stock as to not worry the markets. Many investors watch insider selling to gauge the health of the company. Which brings me to another important point. There are many things that may be considered news which is material to a certain company and its stock. It is not just quarterly filings, earnings reports and such. There is also news related to competitors, news about the economy or a certain sector, news about some weather event that affects a major supplier, news about a major earthquake that will impact the economy of a nation which can then have knock-on effects to other economies, etc... There are also a lot of investors with varying needs which will influence supply and demand. An institutional investor, needing to diversify, may reduce their position in a stock and thus increase supply enough that it impacts the stock's price. Meanwhile, individual investors will make their transactions at varying times during the day. In the aggregate, that may have significant impacts on supply and demand. The overall point being that there are a lot of inputs and a lot of actors in a complicated system. Even if you focus just on news, there are many things that fall into that category. News does not come out at regular intervals and it does not necessarily spread evenly. That alone could make for a highly variable environment.",
"title": ""
},
{
"docid": "1fe450796d9b1ff9b3f8b3ef7be554ee",
"text": "\"I only follow the news of stocks I already own. I use the GlobeInvest Watchlist http://www.theglobeandmail.com/globe-investor/my-watchlist/ each Friday night. In the drop-down views choose ALL NEWS I believe that there is a strong \"\"grass is greaner ..\"\" effect from always looking at what other stock are doing - leading to switching just before your first stock takes off. It is only when I sell some position that I go looking at other possibilities.\"",
"title": ""
},
{
"docid": "61de25b75f779fd3addc7f1515b344a4",
"text": "\"Though you're looking to repeat this review with multiple securities and events at different times, I've taken liberty in assuming you are not looking to conduct backtests with hundreds of events. I've answered below assuming it's an ad hoc review for a single event pertaining to one security. Had the event occurred more recently, your full-service broker could often get it for you for free. Even some discount brokers will offer it so. If the stock and its options were actively traded, you can request \"\"time and sales,\"\" or \"\"TNS,\"\" data for the dates you have in mind. If not active, then request \"\"time and quotes,\"\" or \"\"TNQ\"\" data. If the event happened long ago, as seems to be the case, then your choices become much more limited and possibly costly. Below are some suggestions: Wall Street Journal and Investors' Business Daily print copies have daily stock options trading data. They are best for trading data on actively traded options. Since the event sounds like it was a major one for the company, it may have been actively traded that day and hence reported in the papers' listings. Some of the print pages have been digitized; otherwise you'll need to review the archived printed copies. Bloomberg has these data and access to them will depend on whether the account you use has that particular subscription. I've used it to get detailed equity trading data on defunct and delisted companies on specific dates and times and for and futures trading data. If you don't have personal access to Bloomberg, as many do not, you can try to request access from a public, commercial or business school library. The stock options exchanges sell their data; some strictly to resellers and others to anyone willing to pay. If you know which exchange(s) the options traded on, you can contact the exchange's market data services department and request TNS and / or TNQ data and a list of resellers, as the resellers may be cheaper for single queries.\"",
"title": ""
},
{
"docid": "c783ef9f0ca268bb0df24e9258cb74e7",
"text": "\"The list of the public companies is available on the regulatory agencies' sites usually (for example, in the US, you can look at SEC filings). Otherwise, you can check the stock exchange listings, which show all the public companies traded on that exchange. The shareholders, on the other hand, are normally not listed and not published. You'll have to ask the company, and it probably won't tell you (and won't even know them all as many shares are held in the \"\"street name\"\" of the broker).\"",
"title": ""
},
{
"docid": "5a471ff2224383dc5a4b1d140d6501ee",
"text": "The methodology for divisor changes is based on splits and composition changes. Dividends are ignored by the index. Side note - this is why, in my opinion, that any discussion of the Dow's change over a long term becomes meaningless. Ignoring even a 2% per year dividend has a significant impact over many decades. The divisor can be found at http://wsj.com/mdc/public/page/2_3022-djiahourly.html",
"title": ""
},
{
"docid": "04a2a79a70e0db2bef7ab9d57b6563bb",
"text": "\"When you look at those results you'll see that it lists the actual market cap for the stocks. The ones on the biggest price move are usually close the the $1B capitalization cut-off that they use. (The don't report anything with less than $1B in capitalization on these lists.) The ones on the biggest market cap are much larger companies. So, the answer is that a 40% change in price on a company that has $1B capitalization will be a $400M change in market cap. A 4% change on a company with $100B capitalization will be a $4B change in market cap. The one that moved 40% will make the \"\"price\"\" list but not the market cap list and vice versa.\"",
"title": ""
}
] |
fiqa
|
979271796533e194facb1b23fe28c062
|
Bank will not accept loose change. Is this legal?
|
[
{
"docid": "d3a3089e2ce15824c40e5d7da0c02e29",
"text": "Is this even legal? How can a bank refuse to deposit legal tender in the United States? Legal for all debts, public or private, doesn't mean quite what I used to think, either. Per The Fed: This statute means that all United States money as identified above is a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person, or an organization must accept currency or coins as payment for goods or services. Private businesses are free to develop their own policies on whether to accept cash unless there is a state law which says otherwise. Yes, they can refuse loose change. Also, they aren't refusing your deposit, just requiring that it be rolled. What do I do with my change? I do not want to spend the time rolling it, and I am not going to pay a fee to cash my change. There aren't many other options, change is a nuisance. I believe Coinstar machines reduce/remove their fee if you exchange coins for gift cards, so that might be the best option for convenience and retaining value.",
"title": ""
},
{
"docid": "c3c2aed57ee5fbf0d1db32a4a7e0c190",
"text": "They cannot refuse to accept coins and demand some other payment after providing a good or service. Legal tender is legal tender for all debts. But until they provide the good or service, they don't have to accept it. In this case, you want the service of depositing money. But by its nature, they have to accept the payment first. In that situation, they can refuse it. There is no law that banks have to accept your deposits. If they don't want you as a customer, that's their problem. Consider switching banks. Historically this was easier and some banks may still do things the old way. Call your local banks and ask. Perhaps you'll find someone happy to do business with you, on your terms. As already said, some coin rolling machines will pay you with gift certificates. If you plan to buy a sufficient amount from the place that accepts the gift certificate, this can get that place to play the fee. That may help you, although it is obviously a limited solution. The goal is to make it so that you only make purchases that you would have anyway. The seller obviously has a different goal. It's possible to buy coin sorters. Heck, you could buy one with a gift certificate from a public machine. Cheap ones require extra work to get the coins rolled and may jam a lot. More expensive ones do more of the work for you. Note that a given sorter that works better may be cheaper than another that doesn't work as well. Cheap is more of a qualitative judgment than a financial measure in this case. If you carry a small amount of change with you, pretty much everywhere accepts small amounts of change for purchases. So if you have been always paying with dollars and dumping the change in a jar, instead always give the correct change (coins). They may still give you dollars in change, but at least you won't get new coins. And you'll use some of your existing coins. Of course, this doesn't scale well. For small purchases, say $1.50, you can often pay the whole thing in change without argument. Or if something is $18.50, you might give them $10, $5, two $1 bills, and the rest in change. If you are buying something and can see that they have little change in one of the coin buckets, offer to swap some change for bills. Sometimes places find that easier than breaking a roll. With vending machines, use change instead of dollar bills. Especially use exact change so as not to convert bills to change. They usually don't take pennies, but they're great with nickels and above. This won't allow you to use change as a way to force yourself to save. But it will keep your change down to a manageable level going forward. And you might be able to use up your existing store. I'm assuming that this isn't a fifty year coin collection that you are just now starting to process. But if you have six months of change, you should be able to use it up in a year or so. I tend to do this. So I rarely have more than a couple dollars in change. No one ever tells me that they don't take change, because I don't give anyone a lot. Maybe $.99 here but more likely $.43 there. Sometimes I give them, e.g., $.07 so as to get $.25 in change rather than $.18. It's a little more work at every transaction, but it saves the big clump of work of rolling the coins. And you don't have to buy wrappers.",
"title": ""
},
{
"docid": "f1aaa74c59276c42b007d62864909bd5",
"text": "The bank certainly doesn't have to take it for a deposit; that's not a debt. There have been several cases where disgruntled debtors have attempted deliberately annoying ways to pay their debts; the apocryphal example being pennies. Courts are not likely to support such efforts since it's obvious that a) the action is malicious and (relevant to you) b) it's really on you to maintain your money in a wieldy form. If you allow your money to become unwieldy, nobody owes you anything. I wonder about the meta-meaning of that. And whether, in that light it really makes sense to worry about 5% or rolling. As far as getting rid of it, when I bought out a girlfriend's piggybank at par, I just made sure to walk out of the house with $5 in change in my pocket and unload $2-3 at every retailer, none ever objected and some appreciated. Quarters were traded to coin laundry users. When going on transit I brought a bunch, the machines never grumbled. I burned through the cache much faster than expected.",
"title": ""
}
] |
[
{
"docid": "fa70890a59cb856eb8e66c48a3ef4e05",
"text": "I was forced to give my bank permission to cover any overdrafts out of my savings accounts. Or pay the bank a fee. After 6 months I discovered they were still taking out a fee, when I confronted them they said it wasn't the overdraft fee it was just an administrative fee. Banks need to burn in hell.",
"title": ""
},
{
"docid": "d81ccba684d73402c54dbdbd18286fb3",
"text": "Once you declare the amount, the CBP officials will ask you the source and purpose of funds. You must be able to demonstrate that the source of funds is legitimate and not the proceeds of crime and it is not for the purposes of financing terrorism. Once they have determined that the source and purpose is legitimate, they will take you to a private room where two officers will count and validate the amount (as it is a large amount); and then return the currency to you. For nominal amounts they count it at the CBP officer's inspection desk. Once they have done that, you are free to go on your way. The rule (for the US) is any currency or monetary instrument that is above the equivalent of 10,000 USD. So this will also apply if you are carrying a combination of GBP, EUR and USD that totals to more than $10,000.",
"title": ""
},
{
"docid": "dbd62be03bb002ae46dc41aa9b2276eb",
"text": "I've been hearing storied from Germans that this is happening in Germany, too, but at the bank level. All anecdotal, people I've met telling me their personal stories, but they follow the same pattern. Go to the bank, try to take out a few grand for a vacation or large purchase, bank tells them they can't have that much and that they just have to do with less, even if the account balance covers the withdrawal.",
"title": ""
},
{
"docid": "979874a2e7d72457723c267c0fd231de",
"text": "\"Yes, your privacy is invaded, that's the law in many jurisdictions. The goal is to make money laundering and financing Evil Things harder. That's why banks are required to request proof for every money transfer larger than a specific sum. This is only a minor issue most of the time. You will have some kind of agreement with that Money Management company and this agreement (or a copy of it) will serve as a proof of your lawful reason to transfer money. It works just like that - you get to the bank and say you want to initiate a money transfer, the clerk asks you to show the \"\"proof\"\", you give them your agreement or a bill that requests you to pay or whatever else document you may have that proves that you're bound by some kind of contract with the recipient of money. The clerk then makes a copy of the \"\"proof\"\" and it stays in the bank to back the transfer until it is completed. The copy is then stored for some time and later destroyed - that's up to how the bank handles documents.\"",
"title": ""
},
{
"docid": "c94c26639d33108d45b4df3e1118d66c",
"text": "\"You've touched on a very abstract concept that exist partly due to fractional-reserves and directly due to currency having no base (ex. not backed by gold), money can and does just pop into existence. To answer your question, we have to understand that the criminal is irrelevant. \"\"Can't a cyber criminal increase/decrease a bank's holdings just by changing a number in a computerized ledger book?\"\" The bank wouldn't need the cyber criminal's aid, they could change their own holdings. They have their own computers after all. Money's value is derived from trust. A bank that would change its own books would be black-balled. Similarly, a bank that un/consciously allows a cyber criminal change their holdings would lose trust. If this was a small transaction, they bank bottom line is unaffected. If these scandal is large enough to affect a bank's bottom line, the difference would be noticeable and raise suspicion.\"",
"title": ""
},
{
"docid": "929c9780f0983ec66c646c287e974ea4",
"text": "\"Congratulations! You see the problem. You can't get away from unstable currencies. The other problem is that the US will shut down anything that appears to be providing a replacement for the US Dollar. Once a token or medallion or gift certificate or whatever starts being used outside the confines of one business or one network of businesses, it will be shut down, quickly. It happened with Las Vegas gambling tokens. Another more recent attempt was with the Liberty Dollar, gold and silver coins and certificates that not only had precious metal backing, but whose proponents encouraged taking them to retailers and paying with them as if they were US Dollars. There were other problems with this idea, but it was the competitive stature of the Liberty dollar that got the headquarters raided and the main site shut down. Basically, all signs point toward dealing with currencies and their state of being systematically eroded over time. If you do find one that appears to exist, be wary, because the rules can change at any time, and the \"\"money\"\" will be nowhere near as liquid as a proper currency.\"",
"title": ""
},
{
"docid": "109ca3b612a0ed712240453010ca9c4f",
"text": "This happened to me in the mid 90's. I wanted to withdraw enough cash from my account to buy a new car and they nearly panicked. I took a bank draft instead. I discovered afterward that they can require up to a week's notice for any withdrawl.",
"title": ""
},
{
"docid": "825156a90272a528d94fe4809b03d1ff",
"text": "\"Since all the other answers thus far seem to downplay the risk (likelihood) of the money being seized, I figure I may as well make my comment an answer. Unless you happen to have your legal team travelling with you and your suitcase of cash, you should expect that you'll be questioned extensively, so that any sign of nervousness, inconsistency in your answers or anything you say that doesn't \"\"make sense\"\" to the officer will be used as an excuse to seize your money, and you'll learn an expensive lesson in civil asset forfeiture. The government will file a complaint against your money, leading to a ridiculously named case, such as United States v. $124,700 in U.S. Currency. Worth noting that while the outcome in this case was not in the government's favor, in the vast majority of cases, the government keeps the cash. Between 9/11 and 2014, U.S police forces have seized over 2.5 billion dollars in cash without search warrants or indictments and returned the money in less than 10% of cases. That last link is kind of a long read, but contains cases where people with completely legitimate money and documentation for their money had it seized anyway, and were only able to recover it after months or years in court.\"",
"title": ""
},
{
"docid": "5ffeb4e741fb823d17a81aa85e8c2ea3",
"text": "Once, back when I had a bank account, I tried to pay a large emergency dental bill with my debit card. It rejected it as it turned out the bill was less than a dollar over what I had in the account. I thought there was enough money so I tried again, 3 times. They charged me an overdraft for each attempt even though the debit never went through. This was without overdraft protection, as overdraft protection would have allowed the debit and charged me one overdraft. I don't know the details but federal regulations have changed how they do this. To me overdraft protection rejects any debit that attempts to overdraft my account and doesn't charge me with an overdraft that didn't actually occur as a result of the charge being rejected, but that's not how it works.",
"title": ""
},
{
"docid": "2ad51e8c65e69992273de0ca51db38e6",
"text": "I had great difficulty buying my $17,000 truck for cash. One TD Canada Trust branch only let me have $5,000, the other branch down the street only $3,000. They both said they were low on cash. They kept trying to convince me to use a bank draft, but I didn't have a name or total amount as I was still shopping around. I don't think banks carry much cash and it wouldn't take much to clean them out.",
"title": ""
},
{
"docid": "a65fc91a3ca55f1c0bd429d5487b7e8c",
"text": "The laws of the United States of America require that the federal currency issued is accepted as legal tender for all goods and services anywhere within this country. One really has to wonder what the motivation behind this story is. VISA obviously knows that such a move is illegal. I am skeptical that there's any truth to the article at all.",
"title": ""
},
{
"docid": "f5827ececad5a61f0f7966888a3a9d00",
"text": "\"You state \"\"Any info will be appreciated\"\", so here's some background information on my answer (you can skip to my answer): When I worked for banks, I was required to submit suspicious activity to the people above me by filling out a form with a customer's name, SSN, account number(s) and ID. You may hear in media that it is $10K or sometimes $5K. The truth is that it could be lower than that, depending on what the institution defines as suspicious. Every year we were required to take a \"\"course\"\" which implied that terrorists and criminals use cash regularly - whether we agree or disagree is irrelevant - this is what the course implied. It's important to understand that many people use cash-only budgets because it's easier than relying on the banking system which charges overdraft fees for going over, or in some cases, you pay more at merchants because of card usage (some merchants give discounts for cash). If someone has a budget of $10K a month and they choose to use cash, that's perfectly fine. Also, why is it anyone's business what someone does with their private property? This created an interesting contrast among differently aged Americans - older Americans saw the banking system as tyrannical busybodies whereas young Americans didn't care. This is part of why I eventually left the banking system; I felt sick that I had to report this information, but it's amazing how quick everyone is to accept the new rules. Notice how one of the comments asks you what you intend to do with the money, as if it's any of their business. Welcome to the New America©! My answer: If you withdraw $100,000, here is what will more than likely happen: Now, watch the anger at this answer because I'm telling you the truth. This article will explain why. Your very question had a negative 1, as if asking what you're asking is wrong (see the absurdity)! If Joseph Stalin ran for president in the United States, the majority of Americans would welcome him. You have good reason to be concerned; others at this site have noticed this as well.\"",
"title": ""
},
{
"docid": "90a56315d20bf81e78a7647eb7bea497",
"text": "While on a completely different scale to what you boys are talking about couple of years ago I was a relationship manager in retail banking and would on the reg have to sign away ~400k out of the tellers boxes and into the safe. After a few months of that you kind of view it as lego to fuck around with... [Australian money](https://www.google.com.au/search?q=australian+money&hl=en&prmd=imvns&source=lnms&tbm=isch&sa=X&ei=OquAUO2SD82ciAfSnoDgCA&ved=0CAoQ_AUoAQ&biw=1006&bih=502)",
"title": ""
},
{
"docid": "bb31aa53139708b7c3827e7e98a67dc2",
"text": "\"As others have noted, US law says that if you have over half the bill, it's worth the full value, under half is worth nothing. I presume if it is very close to half, if even careful measurements show that you have 50.5%, you'll have difficulty cashing it in, precisely because the government and the banking system aren't going to allow themselves to be easily fooled by someone cutting bills in half and then trying to redeem both halves. I've seen several comments on here about how you'd explain to the bank how so many bills were cut in half. What if you just told them the truth? Not the part about killing someone, of course, but tell them that you made a deal, neither of you wanted to bother with complex contracts and having to go to court if the other side didn't pay up, so your buddy cut all the bills in half, etc. As you now have both halves and they clearly have the same serial number, this no real evidence of fraud. Okay, this is technically illegal -- 18 US Code Section 333, \"\"Whoever mutilates, CUTS, defaces, disfigures, or perforates, or unites or cements together, or does any other thing to any bank bill, draft, note, or other evidence of debt issued by any national banking association, or Federal Reserve bank, or the Federal Reserve System, with intent to render such bank bill, draft, note, or other evidence of debt unfit to be reissued, shall be fined under this title or imprisoned not more than six months, or both.\"\" But you didn't do it, the other guy did. I presume the point of this law is to say that you can't get a hold of currency belonging to someone else and mutilate it so as to make it worthless. As he's now given you both halves, I doubt anyone would bother to track him down and prosecute him. Just BTW, while checking up on the details of the law, I stumbled across 18 USC 336, which says that it's illegal to write a check for less than $1, with penalties of 6 months in prison. I just got a check from AT&T for 15 cents for one of those class action suits where the lawyers get $100 million and the victims get 15 cents each. Apparently that was illegal.\"",
"title": ""
},
{
"docid": "6bcd6fc62d1f29e86f26fab0153d16a1",
"text": "> From what I hear and know you sell when you're up and buy when it's down. That *is* how profit is attained. However, if you're looking to *invest,* both buy and sell decisions should be made after extensive research and, generally, there should be some time between the two offsetting transactions. If you personally decide to *trade*, which is more often and less likely to succeed (per se), that's up to you.",
"title": ""
}
] |
fiqa
|
7e3be371ae5e138c2da41c1538febd51
|
How to measure the cost/value of an Asset in the Financial Statement
|
[
{
"docid": "aba782590d5f1712aaaa8e5e9895a03b",
"text": "I suggest that you use your own judgement on this. You can assign a reasonable percentage since it is impossible to monitor the hours using those assets. Example: 40 personal and 60 for business. It's really your call. I also suggest that you should be conservative on valuing the assets. Record the assets at it's lowest value. This is one of the most difficult scenarios in making your own financial statements. You can also use this approach, i will record the assets at its original cost then use a higher depreciation rate or double declining method of depreciation. If the assets have a depreciation rate of 20% per year (useful life of 5 years), i will make it 30%. the other 10% will add more expense and helps you not to overstate your Financial Statement. You can also use the residual value of the asset, but if you do this, you should figure out the reliable amount. I understand that this is not for tax reporting purposes. Therefore, there's no harm if you overstate your Financial statement. And even if you overstate, you can still adjust the cost of the asset. Along the way (in the middle of the year or year end), you will figure out the cost of the asset if it's over valued once the financial statement is done.",
"title": ""
},
{
"docid": "f766087d13ac15a104961a481536a7af",
"text": "Does the friend fix your electrical wiring and the engine of your car? If you need a professional advice - ask a professional. In this case - an accountant (not necessarily a CPA, but at least an experienced bookkeeper). Financial Statements (official documents, that is) must be signed by a public accountant (CPA in the US) or the principle (you). I wouldn't take chances and would definitely have an accountant do that. You need to consider the asset useful life, and the depreciation. The fact that you use it for non-business purposes may be recorded in various ways. One that comes to mind is accounting as a supplement for depreciation: You depreciate the percentage that is used for business, and record as a distribution to owner the rest (which is accounting for the personal use). This way it would also match the tax reporting (in the US, at least). Bottom line: if you're preparing an official financial statement (that you're going to submit to anyone other than yourself) - get a professional advice.",
"title": ""
}
] |
[
{
"docid": "680f18bf6027e733e8d1925af9eb13b8",
"text": "Understandably, it appears as if one must construct the flows oneself because of the work involved to include every loan variation. First, it would be best to distinguish between cash and accrued, otherwise known as the economic, costs. The cash cost is, as you've identified, the payment. This is a reality for cash management, and it's wise that you wish to track it. However, by accruals, the only economic cost involved in the payment is the interest. The reason is because the rest of the payment flows from one form of asset to another, so if out of a $1,000 payment, $100 is principal repayment, you have merely traded $100 of cash for $100 of house. The cash costs will be accounted for on the cash flow statement while the accrued or economic costs will be accounted on the income statement. It appears as if you've accounted for this properly. However, for the resolution that you desire, the accounts must first flow through the income statement followed next instead of directly from assets to liabilities. This is where you can get a sense of the true costs of the home. To get better accrual resolution, credit cash and debit mortgage interest expense & principal repayment. Book the mortgage interest expense on the income statement and then cancel the principal repayment account with the loan account. The principal repayment should not be treated as an expense; however, the cash payment that pays down the mortgage balance should be booked so that it will appear on the cash flow statement. Because you weren't doing this before, and you were debiting the entire payment off of the loan, you should probably notice your booked loan account diverging from the actual. This proper booking will resolve that. When you are comfortable with booking the payments, you can book unrealized gains and losses by marking the house to market in this statement to get a better understanding of your financial position. The cash flow statement with proper bookings should show how the cash has flowed, so if it is according to standards, household operations should show a positive flow from labor/investments less the amount of interest expense while financing will show a negative flow from principal repayment. Investing due to the home should show no change due to mortgage payments because the house has already been acquired, thus there was a large outflow when cash was paid to acquire the home. The program should give some way to classify accounts so that they are either operational, investing, or financing. All income & expenses are operational. All investments such as equities, credit assets, and the home are investing. All liabilities are financing. To book the installment payment $X which consists of $Y in interest and $Z in principal: To resolve the reduction in principal: As long as the accounts are properly classified, GnuCash probably does the rest for you, but if not, to resolve the expense: Finally, net income is resolved: My guess is that GnuCash derives the cash flow statement indirectly, but you can do the entry by simply: In this case, it happily resembles the first accrued entry, but with cash, that's all that is necessary by the direct method.",
"title": ""
},
{
"docid": "1dbb5cae6181f36ed255b92b5c7e7977",
"text": "You should also update your Net Worth Statement as well as an inventory of all your assets. Unfortunately these are extremely time consuming, but in the event that you pass away your loved ones will know all of your finances and it will be easier for them in a very difficult time. The Net Worth Statement compiles just that, your net worth. The net worth is compiled by subtracting your liabilities from you assets. Assets include things such as cash, money in accounts, all estimated value of your household items, any life insurance, bonds, mutual bonds, and retirement money. The liabilities include amounts such as your mortgage, second mortgage, car loans, unsecured loans, credit cards, student loans, and life insurance loans. This statement is a great way to track year to year how you are doing on your finances and if you are where you need to be in order to retire when you would like. The Inventory is also very important. This is used in the event that you have a fire or some sort of disaster that requires you to give a statement of any items you had in your home. This is a very difficult thing to go through, and having this statement ready to hand over only makes thing easier. There are a couple ways to do this. Some people take pictures of everything they have in their house and make notes of prices and values, some people take a video of the whole house, and some people write down item by item on the computer or on a piece of paper. Whatever way you would like to do it is fine, what works for one person does not necessarily work for the other.",
"title": ""
},
{
"docid": "f63cceb091fed668aefa3680076af07f",
"text": "\"To know if a stock is undervalued is not something that can be easily assessed (else, everybody would know which stock is undervalued and everybody will buy it until it reaches its \"\"true\"\" value). But there are methods to assess the value of a company, I think that the 3 most known methods are: If the assets of the company were to be sold right now and that all its debts were to be paid back right now, how much will be left? This remaining amount would be the fundamental value of your company. That method could work well on real estate company whose value is more or less the buildings that they own minus of much they borrowed to acquire them. It's not really usefull in the case of Facebook, as most of its business is immaterial. I know the value of several companies of the same sector, so if I want to assess the value of another company of this sector I just have to compare it to the others. For example, you find out that simiral internet companies are being traded at a price that is 15 times their projected dividends (its called a Price Earning Ratio). Then, if you see that Facebook, all else being equal, is trading at 10 times its projected dividends, you could say that buying it would be at a discount. A company is worth as much as the cash flow that it will give me in the future If you think that facebook will give some dividends for a certain period of time, then you compute their present value (this means finding how much you should put in a bank account today to have the same amount in the future, this can be done by dividing the amount by some interest rates). So, if you think that holding a share of a Facebook for a long period of time would give you (at present value) 100 and that the share of the Facebook is being traded at 70, then buy it. There is another well known method, a more quantitative one, this is the Capital Asset Pricing Model. I won't go into the details of this one, but its about looking at how a company should be priced relatively to a benchmark of other companies. Also there are a lot's of factor that could affect the price of a company and make it strays away from its fundamental value: crisis, interest rates, regulation, price of oil, bad management, ..... And even by applying the previous methods, the fundemantal value itself will remain speculative and you can never be sure of it. And saying that you are buying at a discount will remain an opinion. After that, to price companies, you are likely to understand financial analysis, corporate finance and a bit of macroeconomy.\"",
"title": ""
},
{
"docid": "9d0de6281da77f43b6d511b19cad05f9",
"text": "\"Putting a dollar amount on the valuation of a start up business is an art form that often has very little at all to do with any real numbers and more to do with your \"\"salesman\"\" abilities when talking with the VC. That said, there are a few starting points: First is past sales, the cost of those sales and a (hopefully) realistic growth curve. However, you don't have that so this gets harder. Do you have any actual assets? Machinery, computers, desks, patents, etc. Things that you actually own. If so, then add those in. If this is a software start-up, \"\"code\"\" is an asset, but without sales it's incredibly hard to put a value on it. The best I've come up with is \"\"How much would it cost for someone else to build it .. after they've seen yours\"\". Yes, you may have spent 5,000 hours building something but could someone else duplicate it, or at least the major parts, in 200 hours after seeing a demo? Use the lower number. If I was you, I'd look hard at my business plan. Hopefully you were as honest as you can be when writing it (and that it is as researched as possible). What is it going to take to get that first sale? What do you actually need to get there? (hint: your logo on the side of a building is NOT a necessary expense. Nor is really nice office space.) Once you have that first sale, what is the second going to take? Can you extrapolate out to 3 years? How many key members are there? How much is their contribution worth? At what point will you be profitable? Next is to look at risks. You haven't done this before, that's huge - I'm assuming simply because you asked this question. Another is competitors - hopefully they already exist because opening a new market is incredibly hard and expensive; on the flip side, hopefully there aren't that many because entering a crowded market is equally hard and expensive. Note: each are possible, but take radically different approaches and sums of money - and $200k isn't going to cut it no matter what it is you are selling. That said, competition should be able to at least point you in the direction of a price point and estimate for how long sales take. If any are publicly traded then you have additional info to help you set a valuation. Are there any potential regulatory or legal issues? What happens if a key member leaves, dies or is otherwise no longer available? Insurance only helps so much if the one guy that knows everything literally gets run over. God help you if this person likes to go skydiving. I bring risks up because you will have to surmount them during this negotiation. For example, asking for $200k with zero hard assets, while trying to sell software to government agencies assuming a 3 week sales cycle will have you laughed at for naivety. Whereas asking for $10m in the same situation, with a team that has governmental sales experience would likely work. Another big question is exit strategy: do you intend to IPO or sell to a competitor or a business in a related category? If selling, do you have evidence that the target company actually buys others, and if so, how did those deals work out? What did they look for in order to buy? Exit strategy is HUGE to a VC and they will want to make several multiples of their money back in a relatively short amount of time. Can you realistically support that for how much you are asking for? If not then going through an Angel group would be better. They have similar questions, but very different expectations. The main thing is that no one knows what your business is worth because it is 100% unproven after 2 years and is therefore a huge financial risk. If the money you are asking for is to complete product development then that risk factor just went up radically as you aren't even talking about sales. If the money is purely for the sales channel, then it's likely not enough. However if you know what it's going to take to get that first sale and have at least an educated idea on how much it's going to cost to repeat that then you should have an idea for how much money you want. From there you need to decide how much of the business it is worth to you to give up in order to get that money and, voila, you have a \"\"pre money valuation\"\". The real trick will be to convince the VC that you are right (which takes research and a rock solid presentation) and negotiating from there. No matter what offer a small percentage of the business for the money you want and realize you'll likely give up much more than that. A few things you should know: usually by year 3 it's apparent if a start-up is going to work out or not. You're in year 2 with no sales. That doesn't look good unless you are building a physical product, have a competent team with hard experience doing this, have patents (at least filed), a proven test product, and (hopefully) have a few pre-orders and just need cash to deliver. Although in that situation, I'd probably tell you to ask your friends and family before talking to a VC. Even kickstarter.com would be better. $200k just isn't a lot of money and should be very easy to raise from Friends or Angels. If you can't then that speaks volumes to an institutional VC. A plus is having two or three people financially invested in the company; more than that is sometimes a problem while having only 1 is a red flag. If it's a web thing and you've been doing this for 2 years with zero sales and still need another $200k to complete it then I'd say you need to take a hard look at what you've built and take it to market right now. If you can't do that, then I'd say it might be time to abandon this idea and move on as you'll likely have to give up 80%+ to get that $200k and most VCs I've run into wouldn't bother at that level. Which begs the question: how did the conversation with the VC start? Did you approach them or did they approach you? If the latter, how did they even find out about you? Do they actually know anything about you or is this a fishing expedition? If the latter, then this is probably a complete waste of your time. The above is only a rough guide because at the end of the day something is only worth what someone else is willing to pay. $200k in cash is a tiny sum for most VCs, so without more information I have no clue why one would be interested in you. I put a number of hard questions and statements in here. I don't actually want you to answer me, those are for you to think about. Also, none of this shouldn't be taken as a discouragement, rather it should shock you into a realistic viewpoint and, hopefully, help you understand how others are going to see your baby. If the VC has done a bit of research and is actually interested in investing then they will bring up all the same things (and likely more) in order to convince you to give up a very large part of it. The question you have to ask yourself is: is it worth it? Sometimes it is, often it's not.\"",
"title": ""
},
{
"docid": "134a2b54f8d2ddefd07691afbcb16bc6",
"text": "The short answer is that you would want to use the net inflow or net outflow, aka profit or loss. In my experience, you've got a couple different uses for IRR and that may be driving the confusion. Pretty much the same formula, but just coming at it from different angles. Thinking about a stock or mutual fund investment, you could project a scenario with an up-front investment (net outflow) in the first period and then positive returns (dividends, then final sale proceeds, each a net inflow) in subsequent periods. This is a model that more closely follows some of the logic you laid out. Thinking about a business project or investment, you tend to see more complicated and less smooth cashflows. For example, you may have a large up-front capital expenditure in the first period, then have net profit (revenue less ongoing maintenance expense), then another large capital outlay, and so on. In both cases you would want to base your analysis on the net inflow or net outflow in each period. It just depends on the complexity of the cashflows trend as to whether you see a straightforward example (initial payment, then ongoing net inflows), or a less straightforward example with both inflows and outflows. One other thing to note - you would only want to include those costs that are applicable to the project. So you would not want to include the cost of overhead that would exist even if you did not undertake the project.",
"title": ""
},
{
"docid": "9f910dd25fe2c3ef06ed799d1f813b10",
"text": "\"It's very hard to measure the worth of an abstract concept like money, particularly over long periods of time. In the modern era we have things like the Consumer Price Index (CPI) in the United States, where the Bureau of Labor Statistics literally sends \"\"shoppers\"\" out to find prices of things and surveys people to find out what they buy. This results in a variety of \"\"indexes\"\" which variously get reported by media outlets as \"\"inflation\"\" (or \"\"deflation\"\" if the change in value goes the other way). There are also other measurements available like the MIT Billion Prices Project which attempt to make their own reading of the \"\"worth\"\" of currencies. Those kinds of things are about the only ways to measure a currency's change in \"\"value to itself\"\" because a currency is basically only worth what one can buy with it. While it isn't \"\"all the world's currencies combined\"\", there is a concept of the International Monetary Fund's \"\"Special Drawing Rights (SDR)\"\", which is a basket of five currencies used by world central banks to help \"\"back\"\" each other's currencies, and is (very) occasionally used as a unit of currency for international contracts. One might be able to compare the price of one currency to that of the SDR, or even to any other weighted average of world currencies that one wanted, but I don't think it's done nearly as often as comparing currencies to the basket of goods one can buy to find \"\"inflation\"\". Even though one might think what would be important to measure would be overall Money Supply Inflation, much more often people care more about measuring Price Inflation. (Occasionally people worry about Wage Inflation, but generally that's considered a result of high Price Inflation.) In order to try to keep this on topic as a \"\"personal finance\"\" thing rather than an \"\"economics\"\" thing, I guess the question is: Why do you want to know? If you have some assets in a particular currency, you probably care most about what you'll be able to buy with them in the future when you want or need to spend them. In that sense, it's inflation that you're likely caring about the most. If you're trying to figure out which currency to keep your assets in, it largely depends on what currency your future expenses are likely to be in, though I can imagine that one might want to move out of a particular currency if there's a lot of political instability that you're expecting to lead to high inflation in a currency for a time.\"",
"title": ""
},
{
"docid": "c1140caa8335ae427e6326430838e159",
"text": "\"Market cap is synonymous with equity value, which is one way of thinking of a company's \"\"worth.\"\" The alternative would be enterprise value, which is calculated as follows: Enterprise Value = Market Value of Equity + Market Value of Debt - Cash and Equivalents - Non-Operating Assets Enterprise value is essentially \"\"how much is the firm worth to ALL providers of capital.\"\" It can be viewed as \"\"if I wanted to buy the *entire* company, debt and all, what would I have to pay?\"\"\"",
"title": ""
},
{
"docid": "983e84eb31d74702554938415b8ccc43",
"text": "One approach would be to create Journal Entries that debit asset accounts that are associated with these items and credit an Open Balance Equity account. The value of these contributions would have to be worked out with an accountant, as it depends on the lesser of the adjusted basis vs. the fair market value, as you then depreciate the amounts over time to take the depreciation as a business expense, and it adjusts your basis in the company (to calculate capital gains/losses when you sell). If there were multiple partners, or your accountant wants it this way, you could then debit open balance equity and credit the owner's contribution to a capital account in your name that represents your basis when you sell. From a pure accounting perspective, if the Open Balance Equity account would zero out, you could just skip it and directly credit the capital accounts, but I prefer the Open Balance Equity as it helps know the percentages of initial equity which may influence partner ownership percentages and identify anyone who needs to contribute more to the partnership.",
"title": ""
},
{
"docid": "75ffcd067af42e2df03285f2b01a8697",
"text": "\"From Wikipedia: Usage Because EV is a capital structure-neutral metric, it is useful when comparing companies with diverse capital structures. Price/earnings ratios, for example, will be significantly more volatile in companies that are highly leveraged. Stock market investors use EV/EBITDA to compare returns between equivalent companies on a risk-adjusted basis. They can then superimpose their own choice of debt levels. In practice, equity investors may have difficulty accurately assessing EV if they do not have access to the market quotations of the company debt. It is not sufficient to substitute the book value of the debt because a) the market interest rates may have changed, and b) the market's perception of the risk of the loan may have changed since the debt was issued. Remember, the point of EV is to neutralize the different risks, and costs of different capital structures. Buyers of controlling interests in a business use EV to compare returns between businesses, as above. They also use the EV valuation (or a debt free cash free valuation) to determine how much to pay for the whole entity (not just the equity). They may want to change the capital structure once in control. Technical considerations Data availability Unlike market capitalization, where both the market price and the outstanding number of shares in issue are readily available and easy to find, it is virtually impossible to calculate an EV without making a number of adjustments to published data, including often subjective estimations of value: In practice, EV calculations rely on reasonable estimates of the market value of these components. For example, in many professional valuations: Avoiding temporal mismatches When using valuation multiples such as EV/EBITDA and EV/EBIT, the numerator should correspond to the denominator. The EV should, therefore, correspond to the market value of the assets that were used to generate the profits in question, excluding assets acquired (and including assets disposed) during a different financial reporting period. This requires restating EV for any mergers and acquisitions (whether paid in cash or equity), significant capital investments or significant changes in working capital occurring after or during the reporting period being examined. Ideally, multiples should be calculated using the market value of the weighted average capital employed of the company during the comparable financial period. When calculating multiples over different time periods (e.g. historic multiples vs forward multiples), EV should be adjusted to reflect the weighted average invested capital of the company in each period. In your question, you stated: The Market Cap is driven by the share price and the share price is determined by buyers and sellers who have access to data on cash and debts and factor that into their decision to buy or sell. Note the first point under \"\"Technical Considerations\"\" there and you will see that the \"\"access to data on cash and debts\"\" isn't quite accurate here so that is worth noting. As for alternatives, there are many other price ratios one could use such as price/earnings, price/book value, price/sales and others depending on how one wants to model the company. The better question is what kind of investing strategy is one wanting to use where there are probably hundreds of strategies at least. Let's take Apple as an example. Back on April 23, 2014 they announced earnings through March 29, 2014 which is nearly a month old when it was announced. Now a month later, one would have to estimate what changes would be made to things there. Thus, getting accurate real-time values isn't realistic. Discounted Cash Flow is another approach one can take of valuing a company in terms of its future earnings computed back to a present day lump sum.\"",
"title": ""
},
{
"docid": "a9fbbddf99ada47cb3317b4673d6b8ca",
"text": "This is fine, but I'd probably spend a moment introducing WACC and it's estimation. It's also useful to link up the enterprise value to share price, so just also mentioning the debt subtraction to get equity value and division by shares for price. Keep in mind you're usually given like a minute to answer this, so you can afford to be a bit more detailed in some parts.",
"title": ""
},
{
"docid": "2737555cec11157babb0aff5bd578d75",
"text": "\"the \"\"how\"\" all depends on your level of computer savvy. Are you an Excel spreadsheet user or can you write in programming languages such as python? Either approach have math functions that make the calculation of ROI and Volatility trivial. If you're a python coder, then look up \"\"pandas\"\" (http://pandas.pydata.org/) - it handles a lot of the book-keeping and downloading of end of day equities data. With a dozen lines of code, you can compute ROI and volatility.\"",
"title": ""
},
{
"docid": "2062d8a92e3151241257c925fd0c2a15",
"text": "One way that is common is to show the value over time of an initial investment, say $10,000. The advantage of this is that it doesn't show stock price at all, so handles splits well. It can also take into account dividend reinvestment. Fidelity uses this for their mutual funds, as can be seen here. Another option would be to compute the stock price as if the split didn't happen. So if a stock does a 2:1 split, you show double the actual price starting at that point.",
"title": ""
},
{
"docid": "2c0ae24ba33f029d528764a03af25505",
"text": "Yep, but it you didn't answer my question (edit: I know it was phrased as a question, but I do know youre supposed to model changes in cash). When bankers calculate all three approaches, how do they compare them? From what I see, the conclusion of each approach gives us: * Public Company Approach: Enterprise Value * Transaction Approach: Enterprise Value * Discounted Cash Flow Approach: Enterprise Value + Minimum Level of Operating Cash Does an investment banker subtract out that minimum level of operating cash at the end of the calculation to get to a value that he can then compare?",
"title": ""
},
{
"docid": "50f1ca05abaa0bcb89d9ef694f692a8d",
"text": "Broadly, there's a bunch of stuff you need to be accounting for that's not reflected in the above, which will impact the A/D profile of an acquisition: * Consideration paid (all cash on substantially the same terms is going to be more accretive than an all-stock transaction...because in the latter, your denominator is much bigger) * Shares outstanding (including repurchases, in-kind dividends and option exercise) * Financing / interest expense * Upside / base / downside case for all of your assumptions - best to have a toggle based on a CHOOSE function that will allow the user to easily toggle between these I'm not sure what EBITDA is getting you. EPS accretion/dilution typically looks at earnings, but you could also look at Cash EPS A/D which measures OCF/shares outstanding. The point is, this really depends on how back of the envelope you want the A/D computation to be. At a minimum, you need an earnings schedule projected over the next 2-3 years, and you need a schedule reflecting outstanding shares over the same time period. Your earnings buildout can have varying degrees of granularity. You can project cost synergies over the forecast period, which most obviously is going to affect your earnings, but you can also drill down further. Financing, transaction fees, etc. Your writeups and writedowns from your B/S combination may result in certain deferred tax items that will affect your bottom line over the forecast period. Your share schedule can also have varying degrees of complexity. One way to do it is to just presume that the company will not issue any more shares, and will not repurchase any shares, and that there will be no options exercised, over the forecast period. This is a bad series of assumptions. It is likely that as options vest, if in the money, they will be exercised, resulting in dilution for existing shareholders. It is also likely that certain preferred shareholders and optionholders are going to experience adjustments to the conversion prices based on antidilution provisions in their securities. These may be but are not always disclosed in the 10K. Last point - models are tools. What are you trying to build an accretion/dilution model for? This will affect and determine the degree of granularity you'll want to go into.",
"title": ""
},
{
"docid": "6d19500998654ae4a95b5adbfe8450b8",
"text": "\"P/E is price to earnings, or the price of the company divided by annual earnings. Earnings, as reported, are reported on accrual basis. Accrual basis accounting is...without going too deep, like taking a timeline, chopping it up and throwing different bits and pieces of every year into different piles. Costs from 2008 might show up in 2011, or the company might take costs in 2011 that aren't necessarily costs until 2012. Examples would include one-time charges for specific investments, like new shipping centers, servers for their hosting services, etc. Free cash flow is the amount of cash Amazon is generating from its operations. Free cash flow is almost always different from earnings because it's the amount of Earnings + adjustments for non-cash activities - capital expenditures (long-term investments.) Earnings is one thing. Cash generation is a completely different animal. There are plenty of companies that \"\"earn\"\" billions, but only have a few hundred million in cash to show for it because their earnings have to be reinvested into new stuff to grow/maintain the business. To have a free cash flow yield of 2.5% is to have a company valued at $40 for each $1 of free cash flow that the company generates each year. $1/$40 = 2.5%. SGA = Selling, General, & Administrative expenses. These are the costs of running the company - paying salaries, advertising, etc. This cost is second only to COGS, which is Cost of Goods Sold. Currently, Amazon pays $.774 for every $1 product it sells. Its operations add another ~$.20 to that total. After taxes, Amazon keeps about 2 cents of every dollar's worth of product it sells. This 2 cents is Amazon's net margin of 2%. Net margin is (net income)/(sales). If Amazon earned $3 for every $100 in sales it would have a net margin of 3%. Let me know if this makes no sense. If there's anything in particular that is especially confusing, definitely reply and I'll better clarify on specific items. Fire away with any questions, also. I love to discuss finance and accounting.\"",
"title": ""
}
] |
fiqa
|
ac2d16cb54806c32216e133a8007f9bc
|
60% Downpayment on house?
|
[
{
"docid": "44aaaaed94c2fcc169b1218230d3f12f",
"text": "Keep in mind, this is a matter of preference, and the answers here are going to give you a look at the choices and the member's view on the positive/negative for each one. My opinion is to put 20% down (to avoid PMI) if the bank will lend you the full 80%. Then, buy the house, move in, and furnish it. Keep track of your spending for 2 years minimum. It's the anti-budget. Not a list of constraints you have for each category of spending, but a rear-view mirror of what you spend. This will help tell you if, in the new house, you are still saving well beyond that 401(k) and other retirement accounts, or dipping into that large reserve. At that point, start to think about where kids fit into your plans. People in million dollar homes tend to have child care that's 3-5x the cost the middle class has. (Disclosure - 10 years ago, our's cost $30K/year). Today, your rate will be about 4%, and federal marginal tax rate of 25%+, meaning a real cost of 3%. Just under the long term inflation rate, 3.2% over the last 100 years. I am 53, and for my childhood right through college, the daily passbook rate was 5%. Long term government debt is also at a record low level. This is the chart for 30 year bonds. I'd also suggest you get an understanding of the long term stock market return. Long term, 10%, but with periods as long as 10 years where the return can be negative. Once you are at that point, 2-3 years in the house, you can look at the pile of cash, and have 3 choices. We are in interesting times right now. For much of my life I'd have said the potential positive return wasn't worth the risk, but then the mortgage rate was well above 6-7%. Very different today.",
"title": ""
},
{
"docid": "5efb6240c4f3e22fb6f64f933cf1d4dc",
"text": "\"I put about that down on my place. I could have purchased it for cash, but since my investments were returning more interest than the loan was costing me (much easier to achieve now!), this was one of the safest possible ways of making \"\"leverage\"\" work for me. I could have put less down and increased the leverage, but tjis was what I felt most comfortable with. Definitely make enough of a down payment to avoid mortgage insurance. You may want to make enough of a down payment that the bank trusts you to handle your property insurance and taxes yourself rather than insisting on an escrow account and building that into the loan payments; I trust myself to mail the checks on time much more than I trust the bank. Beyond that it's very much a matter of personal preference and what else you might do with the money.\"",
"title": ""
},
{
"docid": "e60aa8f39c72585636d736297b6773ed",
"text": "Voluntarily assuming a loan is a bad idea, especially for a non-investment purpose. It would be one thing to take on a loan to operate a business or buy a piece of capital equipment, like a machine that would make you money. Borrowing money to have a more luxurious house is foolish. The smart move is to buy a good quality home that will meet your needs for as little as possible. Having $800,000 leaves a quit a bit of leeway in that department. You don't say where you live, but if this occurred in my area (eastern Massachusetts) I would buy a house for $500,000 and then invest the remaining $300,000. If I lived in the California bay area, it might be necessary to spend the whole $800,000. Either way there should be no need to borrow money. Also, if you buy a house for cash, often you can get a substantially better deal than if you have to involve a bank. Not owing anyone money is a huge psychological advantage in business and in life in general. View being debt-free as a springboard to success and happiness.",
"title": ""
},
{
"docid": "9950469cf36e87e3363ce390d3a061af",
"text": "Strictly by the numbers, putting more than 20% down is a losing proposition. With interest rates still near all time lows, you're likely able to get a mortgage for less than 4%. The real rate of a return on the market (subtracting inflation and taxes) is going to be somewhere around 5-6%. So by this math, you'd be best off paying the minimum to get out of PMI, and then investing the remainder in a low fee index fund. The question becomes how much that 1-2% is worth to you vs how much the job flexibility is worth. It boils down to your personal risk preference, life conditions, etc. so it is difficult to give good advice. The 1-2% difference in your rate of return is not going to be catastrophic. Personally, I would run the numbers with your fiance. Build a spreadsheet tracking your estimated net worth under the assumption that you make a 20% down payment and invest the rest. Then hold all other factors equal, and re-build the spreadsheet with the higher down payment. Factor in one of you losing your job for a few years, or one of you taking off for a while to raise the kids. You can make a judgement call based how the two of you feel about those numbers.",
"title": ""
},
{
"docid": "9de8f0783ba1c957f67372755fbe0cdf",
"text": "I would lean towards making a smaller down payment and hanging onto savings for flexibility. Questions to think about: If you have enough cash that you can make a huge down payment and still have all the other bases covered, then it comes down to your risk tolerance and personal style. You can almost definitely build a portfolio that will beat your mortgage rate on average over the long term, but with more risk and volatility. Heck, you could make a 20% down payment on another house and rent it out.",
"title": ""
},
{
"docid": "2afd676bda3cbc1e3c24aac9c5a2ab01",
"text": "If you decide you need the extra money, you can always go refinance and get more cash out. At the end of the day, though, if you pay off your house sooner you can invest more of your income sooner; that's just a matter of discipline.",
"title": ""
},
{
"docid": "f77bea6504e2658ecacee68247b78a63",
"text": "Peace of mind is the key to your question. Just before the US housing bust of 2007, I had someone try to convince me to take all the equity from my house which was overvalued in an overheated market. The idea was to put that money in the stock market for a bigger return than the interest on the house. Many people did that and found themselves out of jobs as the economy crashed. Unfortunately, they couldn't sell their homes because they owed more than they were worth. I never lost a night of sleep over the money I didn't make in the stock market. I did manage to trade up to a house twice the size by buying another when the housing market bottomed out, but waiting for a market recovery to sell the smaller house. The outcome of my good fortune is a very nice house with no mortgage worth about 1/3 of my total net worth. That's probably a larger percentage than most money managers would recommend, but it is steadily decreasing because now, all the money that would go to a mortgage payment instead gets deposited in retirement accounts, and it still has 30 years to grow before I start drawing it down. I almost don't remember the burden of a mortgage hanging over my head each month. Almost.",
"title": ""
},
{
"docid": "fa9651ecd8b5e06c2bca0c7386e774cc",
"text": "To answer your precise question, your plans are not at all misguided, and are in fact very reasonable. You are clearly financially very comfortable, and from the tone of your post it sounds like you value security and simplicity over maximizing your investment return over the coming years. If money was the most important thing to you then you would stay shackled to your high paying jobs. @JoeTaxpayer's answer has some great information for a person who is interested in maximizing their investment return. If you followed that advice, you might increase your return on investments by up to 1%/year (I'm just throwing a ball park number out there). So your choice is simple. Peace of mind on one hand and perhaps 1% additional return on investments on the other hand.",
"title": ""
}
] |
[
{
"docid": "b068ed80d2622176669138ee89886956",
"text": "\"Your Spidey senses are good. A good friend would not put you in such a position. It's simple, to skirt some issue (we'll get to that in a second) you are being asked to lie. All for a 15% return on your $$$$. <<< How much is that? You can easily lend him the money, and have a better paper trail. But the bank is not going to like that, and requires this money from friends or family to be a gift. I've heard mortgage guys at the bank say \"\"It's just a formality, we need this paperwork to sell the loan to the investors.\"\" These bankers belong in jail, or at least fired and barred from the industry. They broke the economy in 2008, and should be stopped from doing it again.\"",
"title": ""
},
{
"docid": "ba86c7f1bf3e182b2c65610c2a93369b",
"text": "Just echoing the other answers here. You're not ready yet. 3% down, or no money down loans are what got so many of us into trouble these last few years. It sounds like you make a pretty good living and are able to squirrel away money despite paying rent. Let me suggest something that I haven't seen here yet. Save up for a 20% down payment. You will get better rates, won't have to buy mortgage insurance and it will give you enough of a cushion on your payment that you could better weather a job loss or other loss of income. Your priority for saving are, in order: Home prices aren't going up any time soon, so you're not going to miss out on a great deal. Keep your expenses low, treat yourself and your kids once in a while and keep saving.",
"title": ""
},
{
"docid": "d1341e48962baac52755c3d92cdd4d9c",
"text": "the total principal is also dropping - you mean you're paying it down, right? All else the same, if you found a house whose payments are less than rent, and planned to stay long term, buying can make sense. But let's not forget the other costs and risks. How badly do you want to be a homeowner? Adding image from another post here: This shows that housing prices have fallen below the long term trend line and equilibrium level.",
"title": ""
},
{
"docid": "1ae3cb543558e6c150f706998416094c",
"text": "You want to buy a house for $150,000. It may be possible to do this with $10,000 and a 3.5% downpayment, but it would be a lot better to have $40,000 and make a 20% downpayment. That would give you a cushion in case house prices fall, and there are often advantages to a 20% downpayment (lower rate; less mandatory insurance). You have an income of $35,000 and expenses of $23,000 (if you are careful with the money--what if you aren't?). You should have savings of either $17,500 or $11,500 in case of emergencies. Perhaps you simply weren't mentioning that. Note that you also need at least $137 * 26 = $3562 more to cover mortgage payments, so $15,062 by the expenses standard. This is in addition to the $40,000 for downpayment and closing costs. What do you plan to do if there is a problem with the new house, e.g. you need a new roof? Or smaller expenses like a new furnace or appliance? A plumbing problem? Damages from a storm? What if the tenants' teenage child has a party and trashes the place? What if your tenants stop paying rent but refuse to move out, trashing the place while being evicted? Your emergency savings need to be able to cover those situations. You checked comps (comparable properties). Great! But notice that you are looking at a one bathroom property for $150,000 and comparing to $180,000 houses. Consider that you may not get the $235 for that house, which is cheaper. Perhaps the rent for that house will only be $195 or less, because one bathroom doesn't really support three bedrooms of people. While real estate can be part of a portfolio, balance would suggest that much more of your portfolio be in things like stocks and bonds. What are you doing for retirement? Are you maxing out any tax-advantaged options that you have available? It might be better to do that before entering the real estate market. I am a 23 year old Australian man with a degree in computer science and a steady job from home working as a web developer. I'm a bit unclear on this. What makes the job steady? Is it employment with a large company? Are you self-employed with what has been a steady flow of customers? Regardless of which it is, consider the possibility of a recession. The company can lay you off (presumably you are at the bottom of the seniority). The new customers may be reluctant to start new projects while their cash flow is restrained. And your tenants may move out. At the same time. What will you do then? A mortgage is an obligation. You have to pay it regardless. While currently flush, are you the kind of flush that can weather a major setback? I would feel a lot better about an investment like this if you had $600,000 in savings and were using this as a complementary investment to broaden your portfolio. Even if you had $60,000 in savings and would still have substantial savings after the purchase. This feels more like you are trying to maximize your purchase. Money burning a hole in your pocket and trying to escape. It would be a lot safer to stick to securities. The worst that happens there is that you lose your investment (and it's more likely that the value will be reduced but recover). With mortgages, you can lose your entire investment and then some. Yes, the price may recover, but it may do so after the bank forecloses on the mortgage.",
"title": ""
},
{
"docid": "9bcc0c9036c690555368b96512ef7ed8",
"text": "\"A Tweep friend asked me a similar question. In her case it was in the larger context of a marriage and house purchase. In reply I wrote a detail article Student Loans and Your First Mortgage. The loan payment easily fit between the generally accepted qualifying debt ratios, 28% for house/36 for all debt. If the loan payment has no effect on the mortgage one qualifies for, that's one thing, but taking say $20K to pay it off will impact the house you can buy. For a 20% down purchase, this multiplies up to $100k less house. Or worse, a lower down payment percent then requiring PMI. Clearly, I had a specific situation to address, which ultimately becomes part of the list for \"\"pay off student loan? Pro / Con\"\" Absent the scenario I offered, I'd line up debt, highest to lowest rate (tax adjusted of course) and hack away at it all. It's part of the big picture like any other debt, save for the cases where it can be cancelled. Personal finance is exactly that, personal. Advisors (the good ones) make their money by looking carefully at the big picture and not offering a cookie-cutter approach.\"",
"title": ""
},
{
"docid": "97ee126f81b81e9394033cbffba6ed84",
"text": "Since I have 10k in my account after down-payment, will I get a good interest rate on the loan? When the bank considers your loan, they will see $70K. Regardless, they will want to see certain amount of savings that would allow you to continue paying your loan in case of an emergency, and $10K might not be enough. I was planning to put down 15%, but I have been told that I should buy something called PMI to satisfy the rest 5% and if I take that my interest will be more and sometimes, bank will not go for anybody who pays less than 20%. Is that true? Yes. After downpayment + closing costs, how much money in the savings accounts, is the bank looking for to say that I am a good buyer? Depends on the bank, my wild guess would be they're looking for several months' worth of loan payments (you should have ~6 months worth of savings for emergencies, regardless of loans).",
"title": ""
},
{
"docid": "d9f61c3c251be6934c53b4e584cac7d1",
"text": "\"This doesn't say the whole story (like the length of the HELOC). if you have 15 years left on a mortgage and \"\"refinance\"\" into a 30 year HELOC then yes, your payments maybe 20% lower, but you add 15 years to pay it off. Just remember that interest occurs daily on what you owe. If you move 100K of debt from 5% mortgage to 6% HELOC you'll be paying more to the banks no matter how you slice it.\"",
"title": ""
},
{
"docid": "dd865e96fd492e3189f843200cf4f59a",
"text": "Lenders pay attention to where your down payment money comes from. If they see a large transfer of money into your bank account within about a year before your purchase, this WILL cause an issue for you. Down payments are not just there to make the principal smaller; they are primarily used as an underwriting data-point to assess your quality as a borrower. If you take the money as loan, it will count against your credit worthiness. If you take the money as a gift, it will raise some other red flags. All of this is done for a reason: if you can't get a down payment, you are a higher credit risk (poor discipline, lack of consistent income), even if you can (currently) pay the monthly cost of a mortgage. (PS - The cost of home ownership is much higher than the monthly mortgage payment.) Will all this mean you WON'T get a loan? Of course not. You can almost always get SOME loan. But it will likely be at a higher rate than you otherwise would qualify for if you just waited a little bit and saved money for a down payment. (Another option: cheaper house.) EDIT: The below comments provide examples where gifts were/are NOT a problem. My experience from buying a house just a few years ago (and my several friends who bought house in the same period, some with family gifts and some without) is that it IS an issue. Your best bet is to TALK, IN PERSON with an actual mortgage broker in your area who can go through the options with you, and the downsides to various approaches.",
"title": ""
},
{
"docid": "2496a1379b1d804b89bcf3e6c0b4205c",
"text": "Sorry, I don't think a bounty is the issue here. You seem to understand LTV means the bank you are talking to will lend you 60% of the value of the home you wish to purchase. You can't take the dollars calculated and simply buy a smaller house. To keep the numbers simple, you can get a $600K mortgage on a $1M house. That's it. You can get a $540K mortgage on a $900K house, etc. Now, 60% LTV is pretty low. It might be what I'd expect for rental property or for someone with bad or very young credit history. The question and path you're on need to change. You should understand that the 'normal' LTV is 80%, and for extra cost, in the form of PMI (Private Mortgage Insurance) you can even go higher. As an agent, I just sold a home to a buyer who paid 3% down. The way you originally asked the question has a simple answer. You can't do what you're asking.",
"title": ""
},
{
"docid": "ad9c8354dd526a1f94c6ca1f2ff3a52c",
"text": "A bigger down payment is good, because it insulates you from the swings in the real estate market. If you get FHA loan with 3% down and end up being forced to move during a down market, you'll be in a real bind, as you'll need to scrape up some cash or borrow funds to get out of your mortgage.",
"title": ""
},
{
"docid": "51c48c3c858a292ef20050113ff62cf3",
"text": "There is some element of truth to what your realtor said. The seller takes the house off the market after the offer is accepted but the contract is contingent upon, among other things, buyer securing the financing. A lower down payment can mean a higher chance of failing that. The buyer might be going through FHA, VA or other programs that have additional restrictions. If the buyer fails to secure a financing, that's weeks and months lost to the seller. In a seller's market, this can be an important factor in how your bid is perceived by the seller. Sometimes it even helps to disclose your credit score, for the same reason. Of course for your situation you will have to assess whether this is the case. Certainly do not let your realtor push you around to do things you are not comfortable with. Edit: A higher down payment also helps in the situation where the house appraisal does not fare well. As @Dilip Sarwate has pointed out, the particular area you are interested in is probably a seller's market, thus giving sellers more leverage in picking bids. All else equal, if you are the seller with multiple offers coming in at similar price level, would you pick the one with 20% down or 5% down? While it is true that realtors have their own motives to push through a deal as quickly as possible, the sellers can also be in the same boat. One less mortgage payment is not trivial to many. It's a complicated issue, as every party involved have different interests. Again, do your own due diligence, be educated, and make informed decisions.",
"title": ""
},
{
"docid": "33b302d80d4aec200d913ed4957c9d97",
"text": "If your debt will all be less than 25% gross (yes, I see you said take home) you are in great shape. I'd get the car and not worry. The well written mortgage is 20% down, with a housing payment (which of course includes prop tax and insurance, as noted by mhoran, below) under 28% and total debt under 36%. You are well within the limits, not even close. That's great.",
"title": ""
},
{
"docid": "a0b313dc70955d4dd6322d735b89def0",
"text": "Don't do it. I would sell one of my investment houses and use the equity to pay down your primary mortgage. Then I would refinance my primary mortgage in order to lower the payments.",
"title": ""
},
{
"docid": "d8d5943e8a900961f65f90ebb0a258e2",
"text": "\"You can't get a HELOC, to the best of my knowledge, without actually \"\"owning\"\" the house. If you get an 80% mortgage (of the purchase price - not the appraised value, btw), you still need 20% as a down payment. Once you own the home, you can apply for a HELOC ... presuming you have enough equity (eg, the purchase price is $40k less than the appraised value). We haven't looked at the norm, at least where I live, of 5% down for a traditional mortgage and 3.5% for an FHA (which your question touches on). If you can do 5% down, on a $1,000,000 mortgage you need $50,000 on the day of closing. If the home is worth (ie appraises for) $1,250,000, you're getting 20% of the house \"\"for free\"\". Presuming the bank(s) will go for it, you could likely then open a HELOC for as much as $250,000 (again, depending on individual lender rules). tl;dr: If you don't have the money ready on the day of signing (via seasoning, if it is a loan/gift, or because you have been saving), you cannot afford the house. To clarify from comments with the OP, I am in no way speaking to the buyer's ability to afford the monthly payments - this is only about affording the initial costs associated with the home buying process (down payment, closing, whatever else the bank(s) require, etc).\"",
"title": ""
},
{
"docid": "ff1b45edc4eca37b570b308f78dab670",
"text": "\"The house that sells for $200,000 might rent for a range of monthly numbers. 3% would be $6000/yr or $500/mo. This is absurdly low, and favors renting, not buying. 9% is $1500/mo in which case buying the house to live in or rent out (as a landlord) is the better choice. At this level \"\"paying rent\"\" should be avoided. I'm simply explaining the author's view, not advocating it. A quote from the article - annual rent / purchase price = 3% means do not buy, prices are too high annual rent / purchase price = 6% means borderline annual rent / purchase price = 9% means ok to buy, prices are reasonable Edit to respond to Chuck's comment - Mortgage rates for qualified applicants are pretty tight from low to high, the 30 year is about 4.4% and the 15, 3.45%. Of course, a number of factors might mean paying more, but this is the average rate. And it changes over time. But the rent and purchase price in a given area will be different. Very different based on location. See what you'd pay for 2000 sq feet in Manhattan vs a nice town in the Mid-West. One can imagine a 'heat' map, when an area might show an $800 rent on a house selling for $40,000 as a \"\"4.16\"\" (The home price divided by annual rent) and another area as a \"\"20\"\", where the $200K house might rent for $1667/mo. It's not homogeneous through the US. As I said, I'm not taking a position, just discussing how the author formulated his approach. The author makes some assertions that can be debatable, e.g. that low rates are a bad time to buy because they already pushed the price too high. In my opinion, the US has had the crash, but the rates are still low. Buying is a personal decision, and the own/rent ratios are only one tool to be added to a list of factors in making the decision. Of course the article, as written, does the math based on the rates at time of publication (4%/30years). And the ratio of income to mortgage one can afford is tied to the current rate. The $60K couple, at 4%, can afford just over a $260K mortgage, but at 6%, $208K, and 8%, $170K. The struggle isn't with the payment, but the downpayment. The analysis isn't too different for a purchase to invest. If the rent exceeds 1% of the home price, an investor should be able to turn a profit after expenses.\"",
"title": ""
}
] |
fiqa
|
ef0f5c6830bc11cea00fe31476e96961
|
Why don't banks give access to all your transaction activity?
|
[
{
"docid": "3d17c4cd520f8c8bed8d2c98273ceedb",
"text": "\"Things are the way they are because they got that way. - Gerald Weinberg Banks have been in business for a very long time. Yet, much of what we take for granted in terms of technology (capabilities, capacity, and cost) are relatively recent developments. Banks are often stuck on older platforms (mainframe, for instance) where the cost of redundant online storage far exceeds the commodity price consumers take for granted. Similarly, software enhancements that require back-end changes can be more complicated. Moreover, unless there's a buck (or billion) to be made, banks just tend to move slowly compared to the rest of the business world. Overcoming \"\"but we've always done it that way\"\" is an incredible hurdle in a large, established organization like a bank — and so things don't generally improve without great effort. I've had friends who've worked inside technology divisions at big banks tell me as much. A smaller bank with less historical technical debt and organizational overhead might be more likely to fix a problem like this, but I doubt the biggest banks lose any sleep over it.\"",
"title": ""
},
{
"docid": "c8ef0a6ddc2b556d22d6fdc4b4396f57",
"text": "\"All the other answers here are correct, but I'll add one more perspective. I am a business architect at one of the world's largest retail banks. Every day I experience the frustration of trying to get large-scale corporate IT to do anything, so I feel that your question is just one facet of the wider question: \"\"why are banks so old and busted?\"\" While it's true that the cost of online, redundant, performant, secure data storage is significantly higher than you anticipate in the question, it should still be well within the capacity of a large enterprise. The true cost is the cost of change. Nothing at a bank is a green field development. Everything is a bolt-on to existing systems. Any change brings the risk that existing functionality will be affected, therefore vast schemes of regression testing (largely manually executed) spring up around even the most trivial developments. Costs scale exponentially with the number of platforms affected (often utterly distinct, decades-old, incompatible platforms that have arisen out of historical mergers and acquisitions). Only statutory, revenue-generating and critical maintenance change is approved. Any form of cost-cutting that increases risk is quickly extinguished. This is because when things go wrong, IT get blamed by their business colleagues. This is because the business colleagues in turn get blamed by the regulators, the media, the customers, and the public at large. Who doesn't cuss their bank when the ATM is unavailable? The bank's IT organization develops a kind of management sclerosis, risk averse in the extreme. Banks can't ship a beta version and patch it later. This ultra-low-innovation approach is a direct result of market and regulatory forces. If you were happy with a bank account that played fast and loose with your money the way Facebook plays with your data, then banking would be much cheaper, much more innovative, and much riskier. To get back to your specific question, some banks actually do offer a much longer back catalog of transactions for download (usually only a few key fields of each transaction though), and the ones that don't most likely don't see it as a revenue generating selling point, and it therefore falls above their innovation appetite.\"",
"title": ""
},
{
"docid": "6abcf621e523ee65aa7dd404b9f5ea6b",
"text": "\"I would say a lot of the answers here aren't quite right. The main issue here is that banking is a highly oligopolous industry - there are few key players (the UK, for example, has only 5 major banks operating under a variety of brands: it's all the same companies underneath) and the market is very, very hard to enter owing to the immense regulatory burden. Because the landscape is so narrow and it's possible to keep close tabs on all your competitors, there's no incentive to spend money on shiny new things to keep up with the competition - the industry is purely reactive. If nobody else has an awesome, feature-filled online portal, there's no need for any one bank to make one. If everybody is reactive, and nobody proactive, then it's a short logical deduction that improvements happen at a glacial pace. Also take into account that when you've got this toxic \"\"bare-minimum\"\" form of competition, the question for these people soon turns to \"\"what can we get away with?\"\" which results in things like subpar online portals with as much information as you like delivered on paper for a hefty charge, and extortionate, price fixed administrative fees. Furthermore your transaction history is super valuable information. There are one or two highly profitable companies who collate international transaction data and whose sole job in life is to restrict access to that information to the highest bidders. Your transaction history is an asset in a multibillion dollar per year industry, and as such it is not surprising that banks don't want to give it out for free.\"",
"title": ""
},
{
"docid": "351b8a1e9fb4e0c37cd26d326b02f834",
"text": "One reason why they limit it is to protect you. If I hack your account, I get your entire financial history. I can see a copy of every check you ever wrote. I can see the account number with every doctor, utility, and credit card. I can also see the account information on the back of those checks for all your relatives who you sent $10 for their birthday. I can use the information in those accounts to see where you used to live, this allows me to spoof you when applying for new credit. If they ask if I ever lived on Main street in Anytown USA. I can confidently say yes. If I only let you download a window of time, the responsibility is on you to protect that data that is before the window. They protect it in file isolated from the internet, and finally only in archive locations. Some of the information doesn't exists in electronic form. Data from the 1990's and earlier may not exist in the form you want. They have been expanding the windows over time. I can see/download a pdf of my monthly statement going back 7 years. Of course that data can't go directly into quicken. Some places do let you get a file that goes back farther, but they charge you for it, and it can only be done by them sending you the file. That prevents you from downloading your entire history everyday. That times 70 Million customers would overwhelm their server and other infrastructure. Regarding the amount of data:",
"title": ""
},
{
"docid": "d64099471aa35102fd9efc062d5d8077",
"text": "Although if you count only your data, it would be quite less 10 MB, multiply this by 1 million customers and you can see how quickly the data grows. Banks do retain data for longer period, as governed by country laws, typically in the range of 7 to 10 years. The online data storage cost is quite high 5 to 10 times more than offline storage. There are other aspects, Disaster recover time, the more the data the more the time. Hence after a period of time Banks move the data into Archive that are cheaper to store but are not available to online query, plus the storage is not optimized for search. Hence retrieval of this data often takes few days if the regulator demands or court or any other genuine request for data retrieval.",
"title": ""
},
{
"docid": "714cbf0959a01bd8086850098ef9a72d",
"text": "To add technical detail to other answers, your (and some commenters') estimates of storing that data is woefully (many orders of magnitude) off. Let's take your 10MB of transaction data per user. You're only estimating text records like in Quicken. Now add on the volume of storing everye check's image. That's 100K (if not 500Kb depending on resolution of the scan) per check. If you have 100 checks per year (not unrealistic, if you pay all utility/morgage bills by check, as well as purchases), you now have 10Mb/year to 50MB/year. Now you're asking for 10 years of this, so you have 100-500MB per customer. NOT 10MB-70MB as you initially assumed. Let's take a mid-range figure, 300 MB. You were estimating using consumer grate cheap-o storage (which Facebook can afford for their data, as they don't store transaction data). Now let's up that to enterprise server hard drives. Your storage costs just rose 2x-5x. Now, typically you'd have RAID. So 2x more. Most large financial institutions have multiple data centers. You typically store all data's copies in those data centers for DR purposes. Your multiplier added another 2x-4x Most production data servers have multiple copies (Write DB server + one or more read-only copies). Multiply by 2x-4x With some rare exceptions, most banks don't just have one central database server. Each major app / business line would have its own DB, so you multiply that by 2x-20x depending on the bank, especially if it's arrived at its size by merging with other banks and has dozens of inherited legacy systems. multiple backups. Regulatory backup requirements means you don't just back up your data once a year. You do it daily, till the data is purged from DB. Meaning, you don't store ONE copy of your transaction in backup. You stored, say, 10*365 copies, assuming 10 year retention) So, at the low end, your cost estimates are 30*2*2*2*2*2 = 900 times off (3 orders of magnitude) just for live database storage, and 3500 times off for backup costs. At the high end, they could be 50*5*2*4*4*20=16,000 times off (4-5 orders of magnitude) At this range, no, it isn't worth it for the bank to keep your transactions available in DB and online any longer than bare-bones absolutely critically necessary.",
"title": ""
},
{
"docid": "35ebd369a1b94b3ffd96d97d051ce1de",
"text": "Many good points have been brought up, and I'll just link to them here, for ease. Source: I work at a credit/debit card transaction processing company on the Database and Processing Software teams. See mhoran_psprep's answer. See Chris' answer. Believe it or not, banks don't expose their primary (or secondary) database to end users. They don't expose their fastest / most robust database to end users. By only storing x days of data in that customer-facing database and limiting the range of any one query, any query run against it is much less likely to cause system-wide slowness. They most definitely have database archives which are kept offline, and most definitely have an employee-facing database which allows employees to query larger ranges of data. What would a bank have to gain by allowing you to query a full year of transactions?",
"title": ""
},
{
"docid": "03930b7b11dd077c077ccfc6adeae95e",
"text": "A big issue for historical data in banking is that they don't/can't reside within a single system. Archives of typical bank will include dozen(s) of different archives made by different companies on different, incompatible systems. For example, see http://www.motherjones.com/files/images/big-bank-theory-chart-large.jpg as an illustration of bank mergers and acquisitions, and AFAIK that doesn't include many smaller deals. For any given account, it's 10-year history might be on some different system. Often, when integrating such systems, a compromise is made - if bank A acquires bank B that has earlier acquired bank C, then if the acquisition of C was a few years ago, then you can skip integrating the archives of C in your online systems, keep them separate, and use them only when/if needed (and minimize that need by hefty fees). Since the price list and services are supposed to be equal for everyone, then no matter how your accounts originated, if 10% of archives are an expensive enough problem to integrate, then it makes financial sense to restrict access to 100% of archives older than some arbitrary threshold.",
"title": ""
},
{
"docid": "08779e8c2ebc378095806f40072fea64",
"text": "Well, I know why the Rabobank in the Netherlands does it. I can go back around one year and a half with my internet banking. But I can only go further back (upto 7 years) after contacting the bank and paying €5,- per transcript (one transcript holds around a month of activities). I needed a year worth of transcripts for my taxes and had to cough up more than €50. EDIT It seems they recently changed their policy in a way that you can request as many transcripts as you like for a maximum cost of €25,- so the trend to easier access is visible.",
"title": ""
},
{
"docid": "bbf3a539284894f75bb060a84d055235",
"text": "If you need access to your data beyond the online availability, you download the transactions and manage the archive yourself. Six months to eighteen months is generally enough time for most people to manage their own archived data. Big banks have the power to store and retrieve all the data online. Unfortunately, the older records are not frequently accessed. Why have these records online when they will be rarely accessed? Backing up data will take longer. Queries to retrieve data will take longer. Everything will take longer just so you can have records that 99% of customers will never access.",
"title": ""
}
] |
[
{
"docid": "9102b28680803096847734691b1c9fe0",
"text": "http://www.mint.com attaches to all your accounts and lists all your transactions. I love it.",
"title": ""
},
{
"docid": "14f6c5ee4bcdb17b63ff8518e5ff0858",
"text": "Banks need to provide a free mechanism to deposit and withdrawal money. Banks are free to charge fees as long as it is well published. If you are not happy with services you can complain to Banking ombudsman.",
"title": ""
},
{
"docid": "9efcd54fdc54c52fb10a140211e2b41e",
"text": "The only people who should know my online bank password are me & my spouse. Forget it, I won't share that sensitive information with any other company. I might as well give a blank check! Besides, don't banks require people to keep their username & password & PIN private? I signed an agreement to that effect, I think! So even if I did find the online services compelling enough to try, I would want to check with my own bank first & ask them if it's OK to give my password to somebody else. I wonder what they would say to that!!",
"title": ""
},
{
"docid": "a94776ff15107b4078eabd2f71906a41",
"text": "\"Welcome to the 21st century, the New Order. Forget all that legal mumbo jumbo you may have read back in law school in the 1960s about commercial code. Its all gone now. Now we have Check 21 and the Patriot Act !!! Basically what this means is that because some Arab fanatics burned down the World Trade Center, the US government and its allied civilian banking company henchmen now have total control and dictatorship over \"\"your\"\" money, which is no longer really money, but more like a \"\"credit\"\" to your account with THEM which they can do with what they want. Here are some of the many consequences of the two aforementioned acts: (1) You can no longer sue a bank for mishandling your money (2) All your banking transaction information is the joint property of the bank, its \"\"affiliates\"\" and the US Treasury (3) You can no longer conduct private monetary transactions with other people using a bank as your agent; you can only request that a bank execute an unsecured transaction on your behalf and the bank has total control over that transaction and the terms on which occurs; you have no say over these terms and you cannot sue a bank over any financial tort on you for any reason. (4) All banks are required to spy on you, report any \"\"suspicious\"\" actions on your part, develop and run special software to detect these \"\"suspicious actions\"\", and send their employees to government-run educational courses where they are taught to spy on customers, how to report suspicious customers and how to seize money and safe deposit boxes from customers when the government orders them to do so. (5) All banks are required to positively identify everyone who has a bank account or safe deposit box and report all their accounts to the government. (6) No transactions can be done anonymously. All parties to every banking transaction must be identified and recorded. So, from the above it should be clear to (if you are a lawyer) why no endorsement is present. That is because your check is not a negotiable instrument anymore, it is merely a request to the bank to transfer funds to the Treasury. The Treasury does not need to \"\"endorse\"\" anything. In fact, legally speaking, the Treasury could simply order your bank to empty your account into theirs, and they actually do this all the time to people they are \"\"investigating\"\" for supposed crimes. You don't need to endorse checks you receive either because, as I said above, the check is no longer a negotiable instrument. Banks still have people do it, but it is just a pro forma habit from the old days. Since you can't sue the bank, the endorsement is pretty meaningless because it cannot be challenged in court anyway. You could probably just write \"\"X\"\" there and they would deposit it.\"",
"title": ""
},
{
"docid": "bd79b85d692bf9e419a41ca027831ac8",
"text": "You don't have much choice other than to open an account in your business name, then do a money transfer, as @DJClayworth says. You will not without providing your name and street address and possibly other information that you may consider to be of a private nature. This is due to laws about fraud, money laundering and consumer protection. I'm not saying that's what you have in mind! But without accountability of the sort provided by names and street addresses, banks would be facilitating crimes of many sorts, which is why regulatory agencies enforce disclosure requirements.",
"title": ""
},
{
"docid": "5f53938fe4acef1c5ca2cc4e5bb639f7",
"text": "\"TLDR: Why can't banks give me my money? We don't have your money. Who has my money? About half a dozen different people all over the world. And we need to coordinate with them and their banks to get you your money. I love how everyone seems to think that the securities industry has super powers. Believe me, even with T+3, you won't believe how many trades fail to settle properly. Yes, your trade is pretty simple. But Cash Equity trades in general can be very complicated (for the layman). Your sell order will have been pushed onto an algorithmic platform, aggregated with other sell order, and crossed with internal buy orders. The surplus would then be split out by the algo to try and get the best price based on \"\"orders\"\" on the market. Finally the \"\"fills\"\" are used in settlement, which could potentially have been filled in multiple trades against multiple counterparties. In order to guarantee that the money can be in your account, we need 3 days. Also remember, we aren't JUST looking at your transaction. Each bank is looking to square off all the different trades between all their counter parties over a single day. Thousands of transactions/fills may have to be processed just for a single name. Finally because, there a many many transactions that do not settle automatically, our settlements team needs to co-ordinate with the other bank to make sure that you get your money. Bear in mind, banks being banks, we are working with systems that are older than I am. *And all of the above is the \"\"simplest\"\" case, I haven't even factored in Dark Pools/Block trades, auctions, pre/post-market trading sessions, Foreign Exchange, Derivatives, KYC/AML.\"",
"title": ""
},
{
"docid": "8d56cfae504a707bd1c0f2c20e57adc0",
"text": "\"Do you think that your bank has a separate vault for just your money? Of course not. The bank just has one big pot of money that everything gets dumped into. They know exactly how much money each person is supposed to have. The problem is when they add up all the money in the vault... well lets just say a lot of it is missing. That's why they are supposed to have two vaults, one with the customer's money and one with the investor's money. But since all the account tracking is done internally it becomes real easy to \"\"borrow\"\" from one vault to fund the other. Vault: MF Global's at another bank\"",
"title": ""
},
{
"docid": "003dc2a0ae85bd705c711d4568f67aec",
"text": "This is why financial industry rules reform and stricter oversight is so necessary. Information is money and information should be universally accessible or off limits for use. People knowing things others can't makes them money and costs money for the people not in the know. This is the antithesis of free markets.",
"title": ""
},
{
"docid": "cecb611496cca6b62da8005849636d21",
"text": "You need to track every buy and sell to track your gains, or more likely, losses. Yes, you report each and every transactions. Pages of schedule D.",
"title": ""
},
{
"docid": "fd85e1239b99dadd7cdbc25218e54df4",
"text": "God, if the last **[partial audit that revealed trillions in secret loans](http://www.goldstockbull.com/articles/federal-reserve-secret-bank-bailouts-topped-16-trillion/)** wasn't enough- I can't see why we wouldn't give them a full audit. 31 USC § 714 - AUDIT OF FINANCIAL INSTITUTIONS EXAMINATION COUNCIL, FEDERAL RESERVE BOARD, FEDERAL RESERVE BANKS, FEDERAL DEPOSIT INSURANCE CORPORATION, AND OFFICE OF COMPTROLLER OF THE CURRENCY (a) In this section, “agency” means the Financial Institutions Examination Council, the Board of Governors of the Federal Reserve System (in this section referred to as the “Board”), Federal reserve banks, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency. (b) Under regulations of the Comptroller General, the Comptroller General shall audit an agency, but may carry out an onsite examination of an open insured bank or bank holding company only if the appropriate agency has consented in writing. **Audits of the Board and Federal reserve banks may not include—** (1) transactions for or with a foreign central bank, government of a foreign country, or nonprivate international financing organization; (2) deliberations, decisions, or actions on monetary policy matters, including discount window operations, reserves of member banks, securities credit, interest on deposits, and open market operations; (3) transactions made under the direction of the Federal Open Market Committee; or (4) a part of a discussion or communication among or between members of the Board and officers and employees of the Federal Reserve System related to clauses (1)–(3) of this subsection. (c) (1) Except as provided in this subsection, an officer or employee of the Government Accountability Office may not disclose information identifying an open bank, an open bank holding company, or a customer of an open or closed bank or bank holding company. The Comptroller General may disclose information related to the affairs of a closed bank or closed bank holding company identifying a customer of the closed bank or closed bank holding company only if the Comptroller General believes the customer had a controlling influence in the management of the closed bank or closed bank holding company or was related to or affiliated with a person or group having a controlling influence. (2) An officer or employee of the Office may discuss a customer, bank, or bank holding company with an official of an agency and may report an apparent criminal violation to an appropriate law enforcement authority of the United States Government or a State. (3) Except as provided under paragraph (4), an officer or employee of the Government Accountability Office may not disclose to any person outside the Government Accountability Office information obtained in audits or examinations conducted under subsection (e) and maintained as confidential by the Board or the Federal reserve banks. (4) This subsection shall not— (A) authorize an officer or employee of an agency to withhold information from any committee or subcommittee of jurisdiction of Congress, or any member of such committee or subcommittee; or (B) limit any disclosure by the Government Accountability Office to any committee or subcommittee of jurisdiction of Congress, or any member of such committee or subcommittee. ... http://www.law.cornell.edu/uscode/text/31/714 The people here who are under an illusion the federal reserve has any sort of meaningful audit, and that it is coincidental that the last audit outside of this limited scope resulted in the information related to trillions of secret loans is very deluded or brainwashed. Open your fucking eyes, world! The federal reserve bank exists to rob you of the country your fathers conquered!",
"title": ""
},
{
"docid": "0d57a595cc31caf9543fc27603a5a3c4",
"text": "Any institution that issues checks and is connected to the ACH system can be the passive side. Any institution that clears checks and is connected to the ACH system can be the originating side. Not any institution that can be - in fact is. Your credit union doesn't provide this service because they don't want to. It costs them money to implement and support it, but they don't see the required benefit to justify it. They can. My credit union does that.",
"title": ""
},
{
"docid": "543f4652e82ee1c5329dcd9006612b55",
"text": "As a merchant I can tell you that the only thing the bank gets from me. Is the total amount and a category for my business. No detail, not ever.",
"title": ""
},
{
"docid": "d9a4820e1ba3a6ff12e78d7c4f0c2593",
"text": "Aren't we doing something wrong if we must restrict people's financial transactions to be safe? PS: To clarify: Shouldn't we arrange our lives in such a way that our safety isn't dependent on what financial transactions banks or others engage in?",
"title": ""
},
{
"docid": "5232906d5fcb1e681404c9f7621ed299",
"text": "I wonder if there are times (like when BofA bought Merrill) when it might be alright to not disclose everything right away. Particularly if what needs to be disclosed are losses and the government has told you that they'd cover them.",
"title": ""
},
{
"docid": "d608f482e2617e674cae8ec514453434",
"text": "\"There is no \"\"reason why this cannot be done\"\", but you can tell your friend that these actions are officially shady in the eyes of the US government. Any bank transactions with a value of $10,000 or more are automatically reported to the government as a way to prevent money laundering, tax evasion, and other criminal shenanigans. \"\"Structuring\"\" bank deposits to avoid this monetary limit is a crime in and of itself. https://en.wikipedia.org/wiki/Currency_transaction_report\"",
"title": ""
}
] |
fiqa
|
9bfd349eca5022af7a96e3abaa8ca954
|
How do brokerage firms make money?
|
[
{
"docid": "b428341dfada0d177ccdf968903c4f66",
"text": "\"Regarding \"\"Interest on idle cash\"\", brokerage firms must maintain a segregated account on the brokerage firm's books to make sure that the client's money and the firm's money is not intermingled, and clients funds are not used for operational purposes. Source. Thus, brokerage firms do not earn interest on cash that is held unused in client accounts. Regarding \"\"Exchanges pay firm for liquidity\"\", I am not aware of any circumstances under which an exchange will pay a brokerage any such fee. In fact, the opposite is the case. Exchanges charge participants to transact business. See : How the NYSE makes money Similarly, market makers do not pay a broker to transact business on their behalf. They charge the broker a commission just like the broker charges their client a commission. Of course, a large broker may also be acting as market maker or deal directly with the exchange, in which case no such commission will be incurred by the broker. In any case, the broker will pay a commission to the clearing house.\"",
"title": ""
}
] |
[
{
"docid": "0d133fdf8af7ed7e81a929aefa9fb736",
"text": "The company gets it worth from how well it performs. For example if you buy company A for $50 a share and it beats its expected earnings, its price will raise and lets say after a year or two it can be worth around $70 or maybe more.This is where you can sell it and make more money than dividends.",
"title": ""
},
{
"docid": "0a5caacca9c03cc06f281e38db8dad98",
"text": "\"This is a complicated subject, because professional traders don't rely on brokers for stock quotes. They have access to market data using Level II terminals, which show them all of the prices (buy and sell) for a given stock. Every publicly traded stock (at least in the U.S.) relies on firms called \"\"market makers\"\". Market makers are the ones who ultimately actually buy and sell the shares of companies, making their money on the difference between what they bought the stock at and what they can sell it for. Sometimes those margins can be in hundreds of a cent per share, but if you trade enough shares...well, it adds up. The most widely traded stocks (Apple, Microsoft, BP, etc) may have hundreds of market makers who are willing to handle share trades. Each market maker sets their own price on what they'll pay (the \"\"bid\"\") to buy someone's stock who wants to sell and what they'll sell (the \"\"ask\"\") that share for to someone who wants to buy it. When a market maker wants to be competitive, he may price his bid/ask pretty aggressively, because automated trading systems are designed to seek out the best bid/ask prices for their trade executions. As such, you might get a huge chunk of market makers in a popular stock to all set their prices almost identically to one another. Other market makers who aren't as enthusiastic will set less competitive prices, so they don't get much (maybe no) business. In any case, what you see when you pull up a stock quote is called the \"\"best bid/ask\"\" price. In other words, you're seeing the highest price a market maker will pay to buy that stock, and the lowest price that a market maker will sell that stock. You may get a best bid from one market maker and a best ask from a different one. In any case, consumers must be given best bid/ask prices. Market makers actually control the prices of shares. They can see what's out there in terms of what people want to buy or sell, and they modify their prices accordingly. If they see a bunch of sell orders coming into the system, they'll start dropping prices, and if people are in a buying mood then they'll raise prices. Market makers can actually ignore requests for trades (whether buy or sell) if they choose to, and sometimes they do, which is why a limit order (a request to buy/sell a stock at a specific price, regardless of its current actual price) that someone places may go unfilled and die at the end of the trading session. No market maker is willing to fill the order. Nowadays, these systems are largely automated, so they operate according to complex rules defined by their owners. Very few trades actually involve human intervention, because people can't digest the information at a fast enough pace to keep up with automated platforms. So that's the basics of how share prices work. I hope this answered your question without being too confusing! Good luck!\"",
"title": ""
},
{
"docid": "a3e18121abbfcdb6208a23de1e3a8776",
"text": "Market Makers are essentially just there to process the buys and sells of traders, so just like you and I buy and sell at the ask and bid prices they do to. They are just completing the process of making our orders a reality. Market makers are just representative of brokers, meaning that when you place your order at ask or bid, you are placing that particular brokers order at ask or bid. People often say that certain brokers have too many shares and claim that they are games when really that just means that there happen to be a lot of people using a particular broker all at once, or more troubling, perhaps even company execs using a broker, to sell a large amount of shares.",
"title": ""
},
{
"docid": "a839d22bdaca27f1edc720c15bf63782",
"text": "They return capital to investors every year to keep the fund size smaller, since there are a set number of money-making opportunities in the space. In other words, if they will make $1 billion per year regardless of invested capital, why not lever up a few times so you don't have to put as much in?",
"title": ""
},
{
"docid": "f1131fb9f35fb03331ee946336e74694",
"text": "\"Well, they don't \"\"make\"\" money in the sense of income, but they receive money in exchange for shares of stock (more of the company is owned by the public). The Warrant entitles the holder to purchase stock directly from the company at a fixed price. It is very much like an open-market call option, but instead of the option holder buying stock from a third party (which does not affect the company at all), the holder buys it directly from the company, increasing the number of shares outstanding, and the proceeds go directly to the company. If the holders do not exercise the warrants, the company does not receive any cash, but they also don't issue any new shares.\"",
"title": ""
},
{
"docid": "29051a1f78e6280e783af10934bd5ac1",
"text": "Purchases and sales from the same trade date will both settle on the same settlement date. They don't have to pay for their purchases until later either. Because HFT typically make many offsetting trades -- buying, selling, buying, selling, buying, selling, etc -- when the purchases and sales settle, the amount they pay for their purchases will roughly cancel with the amount they receive for their sales (the difference being their profit or loss). Margin accounts and just having extra cash around can increase their ability to have trades that do not perfectly offset. In practice, the HFT's broker will take a smaller amount of cash (e.g. $1 million) as a deposit of capital, and will then allow the HFT to trade a larger amount of stock value long or short (e.g. $10 million, for 10:1 leverage). That $1 million needs to be enough to cover the net profit/loss when the trades settle, and the broker will monitor this to ensure that deposit will be enough.",
"title": ""
},
{
"docid": "6ac3519ec4e4ad117851fa273152d4b3",
"text": "\"It may be margin loans or credit lines given to brokerages. I have no idea what a loan book is though so don't I don't really know. Also no one \"\"plays\"\" in equity markets with borrowed money unless they know for sure what they are doing or they have collateral as in the case of margin.\"",
"title": ""
},
{
"docid": "1a391300cbd24b967851a40af75af143",
"text": "\"Institutions may be buying large quantities of the stock and would want the price to go up after they are done buying all that they have to buy. If the price jumps before they finish buying then they may not make as great a deal as they would otherwise. Consider buying tens of thousands of shares of a company and then how does one promote that? Also, what kind of PR system should those investment companies have to disclose whether or not they have holdings in these companies. This is just some of the stuff you may be missing here. The \"\"Wall street analysts\"\" are the investment banks that want the companies to do business through them and thus it is a win/win relationship as the bank gets some fees for all the transactions done for the company while the company gets another cheerleader to try to play up the stock.\"",
"title": ""
},
{
"docid": "d60080d712fb6218076fb188ce7bf4ff",
"text": "In this example, Client A has to buy shares to return them to Client B for his sale (closing Client A's short position). Client B then sells the shares. The end result is there are no shares within the brokerage clientele anymore, so Client A can't borrow them anymore. The broker is just an intermediary, they wouldn't go out and acquire securities on their own for the benefit of a client wanting to short it, as they would be taking on the risk of the opposite position. This would be in addition to the risk they already take on when allowing people to short sell -- which is that Client A won't have the money to buy the shares it owes to Client B, in which case the broker has to make Client B whole.",
"title": ""
},
{
"docid": "2a9f790989de9ec219c609fab50fc98a",
"text": "Think of options as insurance. An insurance company makes money by selling the policies at a rate slightly higher than the average payout. Most options expire worthless. This is because most options are purchased by hedge funds. To 'hedge' means taking out insurance in case your position goes against you. So the sellers of options obtain a price that covers their (averaged) losses plus provides them with a profit for their trouble. An option has an amount that it declines in value each day (called theta). At the expiration date the option is worth zero (if it is out-of-the-money). So it is option writers that, typically, make money in the options market (as they are the sellers of insurance). If they didn't make money selling options they would not sell them. For example, the February call option on SPY strike 200 traded at 8.81 on 12/30. Since then it has crumbled in value to 0.14. The option writer currently stands to make a huge profit. So, just as with insurance, you (generally) never make money by buying insurance. But the sellers of insurance tend to make money as do the writers of options. Edit: Theta @ Investopedia",
"title": ""
},
{
"docid": "df5b065cb05a89d4e4f2b3b525e02327",
"text": "\"Brokerages offer you the convenience of buying and selling financial products. They are usually not exchanges themselves, but they can be. Typically there is an exchange and the broker sends orders to that exchange. The main benefit that brokers offer is a simpler commission structure. Not all brokers have their own liquidity, but brokers can have their own allotment of shares of a stock, for example, that they will sell you when you make an order, so that you get what you want faster. Regarding accounts at the exchanges to track actual ownership and transfer of assets, it is not safe to assume thats how that works. There are a lot of shortcomings in how the actual exchange works, since the settlement time is 1 - 3 business days, depending on the product (so upwards of 5 to 6 actual days). In a fast market, the asset can change hands many many times making the accounting completely incorrect for extended time periods. Better to not worry about that part, but if you'd like to read more about how that is regulated look up \"\"Failure To Deliver\"\" regulations on short selling to get a better understanding of market microstructure. It is a very antiquated system.\"",
"title": ""
},
{
"docid": "992515091016e92c23ab724308d91cbb",
"text": "\"There are people (well, companies) who make money doing roughly what you describe, but not exactly. They're called \"\"market makers\"\". Their value for X% is somewhere on the scale of 1% (that is to say: a scale at which almost everything is \"\"volatile\"\"), but they use leverage, shorting and hedging to complicate things to the point where it's nothing like a simple as making a 1% profit every time they trade. Their actions tend to reduce volatility and increase liquidity. The reason you can't do this is that you don't have enough capital to do what market makers do, and you don't receive any advantages that the exchange might offer to official market makers in return for them contracting to always make both buy bids and sell offers (at different prices, hence the \"\"bid-offer spread\"\"). They have to be able to cover large short-term losses on individual stocks, but when the stock doesn't move too much they do make profits from the spread. The reason you can't just buy a lot of volatile stocks \"\"assuming I don't make too many poor choices\"\", is that the reason the stocks are volatile is that nobody knows which ones are the good choices and which ones are the poor choices. So if you buy volatile stocks then you will buy a bunch of losers, so what's your strategy for ensuring there aren't \"\"too many\"\"? Supposing that you're going to hold 10 stocks, with 10% of your money in each, what do you do the first time all 10 of them fall the day after you bought them? Or maybe not all 10, but suppose 75% of your holdings give no impression that they're going to hit your target any time soon. Do you just sit tight and stop trading until one of them hits your X% target (in which case you start to look a little bit more like a long-term investor after all), or are you tempted to change your strategy as the months and years roll by? If you will eventually sell things at a loss to make cash available for new trades, then you cannot assess your strategy \"\"as if\"\" you always make an X% gain, since that isn't true. If you don't ever sell at a loss, then you'll inevitably sometimes have no cash to trade with through picking losers. The big practical question then is when that state of affairs persists, for how long, and whether it's in force when you want to spend the money on something other than investing. So sure, if you used a short-term time machine to know in advance which volatile stocks are the good ones today, then it would be more profitable to day-trade those than it would be to invest for the long term. Investing on the assumption that you'll only pick short-term winners is basically the same as assuming you have that time machine ;-) There are various strategies for analysing the market and trying to find ways to more modestly do what market makers do, which is to take profit from the inherent volatility of the market. The simple strategy you describe isn't complete and cannot be assessed since you don't say how to decide what to buy, but the selling strategy \"\"sell as soon as I've made X% but not otherwise\"\" can certainly be improved. If you're keen you can test a give strategy for yourself using historical share price data (or current share price data: run an imaginary account and see how you're doing in 12 months). When using historical data you have to be realistic about how you'd choose what stocks to buy each day, or else you're just cheating at solitaire. When using current data you have to beware that there might not be a major market slump in the next 12 months, in which case you won't know how your strategy performs under conditions that it inevitably will meet eventually if you run it for real. You also have to be sure in either case to factor in the transaction costs you'd be paying, and the fact that you're buying at the offer price and selling at the bid price, you can't trade at the headline mid-market price. Finally, you have to consider that to do pure technical analysis as an individual, you are in effect competing against a bank that's camped on top of the exchange to get fastest possible access to trade, it has a supercomputer and a team of whizz-kids, and it's trying to find and extract the same opportunities you are. This is not to say the plucky underdog can't do well, but there are systematic reasons not to just assume you will. So folks investing for their retirement generally prefer a low-risk strategy that plays the averages and settles for taking long-term trends.\"",
"title": ""
},
{
"docid": "3862e880f4ef2433c90221a639b0914e",
"text": "The brokerage executes the transactions you tell them to make on your behalf. Other than acting as your agent for those, and maintaining your account, and charging a fee for the service, they have no involvement -- they do not attempt to predict optimal anything, or hold any assets themselves.",
"title": ""
},
{
"docid": "e1c310dd0d067d351747c3cdf07f7ded",
"text": "\"What you're thinking of is more market making kind of activity, HFT algo's thrive on this; having information faster than anyone else. This type of activity could also likely be lumped into what is considered top-down analysis as opposed to bottom-up (which is what most mutual fund equity research involves). Again, the more important aspect is, what does the company you are applying to use! Top-down analysis means that you are forecasting the revenue drivers for a company using macro-economic analysis. For example, let's say I'm investing in Chinese cement manufacturer's, what implications does Chinese interest rate policy have on infra-structure expansion and how does that drive revenue for this specific company. I might then look at margins, etc. to get an EPS estimate. Part of this could fall into secular investing, too. Let's say I like LCD panel glass because of this consortium, I might take a look at 5 companies and then find the ones I think would benefit most from this. The problem with top-down is it tends not to be as much of a deep-dive, and its hard to pick individual companies because of it. Bottom-up tends to be more analytical and is what most pitches would be based around. The most important thing I'm not saying one is right or wrong, they are just different, and every investor has their own style. Bottom-up analysis, which would be closer to what an equity research analyst would be doing on the sell-side, is analyzing what bottom-line indicators drive revenue and how are those expanding. For example, lets say I'm looking at search providers (i.e. Baidu, Google, Yahoo, etc.) I'd be looking at Cost-Per-Thousand-Clicks (CPTC) and number of clicks on the website. Multiply the two and I get revenue (very simplified version) for clicks business. I might then also forecast other revenue driving segments and try to understand how they are growing/pricing at an individual segment level (i.e. business services or mobile advertising). I'd then break down costs/margins for each segment and forecast those out. I could then get a forward EPS, get a range of multiples I believe it could trade in (i.e. I think the multiple will trade up/down), to get a target price. Also, I would likely do a DCF analysis on forward earnings to get a \"\"fair market value,\"\" and then try to triangulate a price. I would also be looking at stuff like management teams and industry trends, too, but bottom line, I'm pitching a company because I think it is undervalued and will outperform competitors **in the long run**. This type of work tends to be more research oriented and is what most (not all) mutual funds use when analyzing companies. Since mutual funds tend to have longer holding periods (2-10 years), as opposed to short-term, it's harder to justify investing in a company only because it has a short-term catalyst. Anecdotally, it's also easier to present in a written thesis because the numbers tend to be more concrete and easier to forecast than top-down (which have wider target ranges). Your thought process that catalyst + industry context = market beating returns isn't wrong, it's just that every company thinks about investing differently, and it's important to tailor the report to that group's style.\"",
"title": ""
},
{
"docid": "84a212b7e101d08456f62747b65e3c5a",
"text": "The future shares will be fewer in number, yet have claim to less cash in the bank. All in all, there's little reason the shares would rise in value. Say there are 1M shares, trading at $10. Market cap is $10M of course. Now, there happens to be $2M cash in the bank so each share had about $2 cash. By taking the $2M and buying 200K shares, 800K shares remain, but why would you think they'd be valued at $12.50? The same $10 value per share is now an $8M market cap as $2M has been disbursed, no less so than if it were given out in a dividend.",
"title": ""
}
] |
fiqa
|
062731520aa117caa0bf0d178fe69d5c
|
Why do people buy stocks that pay no dividend?
|
[
{
"docid": "8522a4026f4105bb39f46152a4d3b71f",
"text": "Instead of giving part of their profits back as dividends, management puts it back into the company so the company can grow and produce higher profits. When these companies do well, there is high demand for them as in the long term higher profits equates to a higher share price. So if a company invests in itself to grow its profits higher and higher, one of the main reasons investors will buy the shares, is in the expectation of future capital gains.",
"title": ""
},
{
"docid": "4ce1510db724098278202fb69a59c5a2",
"text": "people buy stocks because there is more to Return on Investment than whether dividends are issued or not. Some people want ownership and the ability to influence decisions by using the rights associated with their class of stock. Another reason would be to park capital in a place that would grow faster than the rate of inflation. these are only a few of many reasons why people would buy stock.",
"title": ""
},
{
"docid": "c90632e5a5534cfb491f783708f5b0c9",
"text": "There are many stocks that don't have dividends. Their revenue, growth, and reinvestment help these companies to grow, and my share of such companies represent say, one billionth of a growing company, and therefore worth more over time. Look up the details of Berkshire Hathaway. No dividend, but a value of over $100,000. Not a typo, over one hundred thousand dollars per share.",
"title": ""
},
{
"docid": "2b20ae0b7a53427e84f1435189b93ec3",
"text": "Nobody is going to buy a stock without returns. However, returns are dividends + capital gains. So long as there is enough of the latter it doesn't matter if there is none of the former. Consider: Berkshire Hathaway--Warren Buffet's company. It has never paid dividends. It just keeps going up because Warren Buffet makes the money grow. I would expect the price to crash if it ever paid dividends--that would be an indication that Warren Buffet couldn't find anything good to do with the money and thus an indication that the growth was going to stop.",
"title": ""
},
{
"docid": "764624b0e84789c70bc3f1b715a280c3",
"text": "Shares in a company represent a portion of a company. If that company takes in money and doesn't pay it out as a dividend (e.g. Apple), the company is still more valuable because it has cold hard cash as an asset. Theoretically, it's all the same whether your share of the money is inside the company or outside the company; the only immediate difference is tax treatment. Of course, for large bank accounts that means that an investment in the company is a mix of investment in the bank account and investment in the business-value of the company, which may stymie investors who aren't particularly interested in buying larve amounts of bank accounts (known for low returns) and would prefer to receive their share of the cash to invest elsewhere (or in the business portion of the company.) Companies like Apple have in fact taken criticism for this. Your company could also use that cash to invest in itself (growing the value of its profits) or buy other companies that are worth money, essentially doing the job for you. Of course, they can do the job well or they can do it poorly... A company could also be acquired by a larger company, or taken private, in exchange for cash or the stock of another company. This is another way that the company's value could be returned to its shareholders.",
"title": ""
},
{
"docid": "392d53e0c27b44b922d2b8d50513eb4d",
"text": "\"You can think of the situation as a kind of Nash equilibrium. If \"\"the market\"\" values stock based on the value of the company, then from an individual point of view it makes sense to value stock the same way. As an illustration, imagine that stock prices were associated with the amount of precipitation at the company's location, rather than the assets of the company. In this imaginary stock market, it would not benefit you to buy and sell stock according to the company's value. Instead, you would profit most from buying and selling according to the weather, like everyone else. (Whether this system — or the current one — would be stable in the long-term is another matter entirely.)\"",
"title": ""
},
{
"docid": "bccb2ad622d8dc8ba8b3cb146cbd4d41",
"text": "\"I don't know why there is so much confusion on such a simple concept. The answer is very simple. A stock must eventually pay dividends or the whole stock market is just a cheap ponzi scheme. A company may temporarily decided to reinvest profits into R&D, company expansion, etc. but obviously if they promised to never pay dividends then you can never participate in the profits of the company and there is simply no intrinsic value to the stock. For all of you saying 'Yeah but the stock price will go up!', please people get a life. The only reason the price goes up is in anticipation of dividend yield otherwise WHY would the price go up? \"\"But the company is worth more and the stock is worth more\"\" A stocks value is not set by the company but by people who buy and sell in the open market. To think a stock's price can go up even if the company refuses to pay dividends is analogous to : Person A says \"\"Hey buy these paper clips for $10\"\". But those paper clips aren't worth that. \"\"It doesn't matter because some fool down the line will pay $15\"\". But why would they pay that? \"\"Because some fool after him will pay $20\"\" Ha Ha!\"",
"title": ""
}
] |
[
{
"docid": "012503b8167ce91b6e004e7ff6370191",
"text": "IBM is famous for spending lots of money on stock buyback to keep the stock price higher. The technique works, and investors in growth stocks generally prefer a high market prices to a taxable dividend payment. Dividends are ways to return shareholder value when a company generates a lot of cash, but doesn't have alot of growth. Electric and gas companies are a classic example of high-dividend companies.",
"title": ""
},
{
"docid": "51a19c3ec2b20ff8db1f6607bf091252",
"text": "I would say that the answer is yes. Investors may move on purchasing a stock as a result of news that a stock is set to pay out their dividend. It would be interesting to analyze the trend based on a company's dividend payouts over 10 or so years to see what/how this impacts the market value of a given company.",
"title": ""
},
{
"docid": "69923fb1d6e6e062c5b30216a5600c26",
"text": "Even with non-voting shares, you own a portion of the company including all of its assets and its future profits. If the company is sold, goes out of business and liquidates, etc., those with non-voting shares still stand collect their share of the funds generated. There's also the possibility, as one of the comments notes, that a company will pay dividends in the future and distribute its assets to shareholders that way. The example of Google (also mentioned in the comments) is interesting because when they went to voting and non-voting stock, there was some theoretical debate about whether the two types of shares (GOOG and GOOGL) would track each other in value. It turned out that they did not - People did put a premium on voting, so that is worth something. Even without the voting rights, however, Google has massive assets and each share (GOOG and GOOGL) represented ownership of a fraction of those assets and that kept them highly correlated in value. (Google had to pay restitution to some shareholders of the non-voting stock as a result of the deviation in value. I won't get into the details here since it's a bit of tangent, but you could easily find details on the web.)",
"title": ""
},
{
"docid": "3ce1b8ea4794c2ad88e45f2f68c45be1",
"text": "\"Yes, I agree with you. Saying that the value of the stock will grow as the company grows and acquires more assets ... I don't see why. Okay, I'm a nice guy and I want to see other people do well, but what do I care how much money they're making if they're not giving any of it to ME? Frankly I think it's like people who buy commemorative plates or beanie babies or other \"\"collectibles\"\" as an investment. As long as others are also buying them as an investment, and buying and reselling at a profit, the value will continue to go up. But one day people say, Wait, is this little stuffed toy really worth $10,000? and the balloon bursts. Confer Dutch tulips: http://www.damninteresting.com/the-dutch-tulip-bubble-of-1637/ As I see it, what gives a non-dividend-paying stock value is mostly the expectation that at some time in the future it will pay dividends. This is especially true of new start-up companies. As you mentioned, there's also the possibility of a takeover. It wouldn't have to be a hostile takeover, any takeover would do. At that point the buying company either buys the stock or exchanges it for shares of their own. In the first case you now have cash for your investment and in the second case you now have stock in a dividend-paying company -- or in another non-dividend-paying company and you start the cycle over.\"",
"title": ""
},
{
"docid": "18371125025cdff3789257454829bd7f",
"text": "There's not usually a point to issuing new stock as a dividend, because if you issue new stock, it dilutes the existing shareholders by the exact same amount as the dividend: so now they have a few more shares, great, but they're worth the exact same amount. (This assumes that all stockholders are equal. If there are multiple share classes, or people whose rights to a stock are tied to the stock price in some manner - options, warrants, or something - then a properly structured stock dividend could serve to enrich one set of shareholders and other rights-holders at the expense of another. But this is usually illegal.) If this sort of dividends are popular in China, I suspect it is due to some freaky regulatory or tax-related circumstances which are not present in the United States markets. China is kind of notorious for having unusual capital controls, limitations on the exchange of currency, and markets which are not very transparent.",
"title": ""
},
{
"docid": "3f55bb3f3499c894a67cb3c1ac0d20ce",
"text": "If you assume the market is always 100% rational and accurate and liquid, then it doesn't matter very much if a company pays dividends, other than how dividends are taxed vs. capital gains. (If the market is 100% accurate and liquid, it also doesn't really matter what stock you buy, since they are all fairly priced, other than that you want the stock to match your risk tolerance). However, if you manage to find an undervalued company (which, as an investor, is what you are trying to do), your investment skill won't pay off much until enough other people notice the company's value, which might take a long time, and you might end up wanting to sell before it happens. But if the company pays dividends, you can, slowly, get value from your investment no matter what the market thinks. (Of course, if it's really undervalued then you would often, but not always, want to buy more of it anyway). Also, companies must constantly decide whether to reinvest the money in themselves or pay out dividends to owners. As an owner, there are some cases in which you would prefer the company invest in itself, because you think they can do better with it then you can. However, there is a decided tendency for C level employees to be more optimistic in this regard than their owners (perhaps because even sub-market quality investments expand the empires of the executives, even when they hurt the owners). Paying dividends is thus sometimes a sign that a company no longer has capital requirements intense enough that it makes sense to re-invest all of its profits (though having that much opportunity can be a good thing, sometimes), and/or a sign that it is willing, to some degree, to favor paying its owners over expanding the business. As a current or prospective owner, that can be desirable. It's also worth mentioning that, since stocks paying dividends are likely not in the middle of a fast growth phase and are producing profit in excess of their capital needs, they are likely slower growth and lower risk as a class than companies without dividends. This puts them in a particular place on the risk/reward spectrum, so some investors may prefer dividend paying stocks because they match their risk profile.",
"title": ""
},
{
"docid": "684ffa8fa0acf0bc94ef340c7b1a78f2",
"text": "I would say the most important thing to consider is the quality of the company relative to the price you pay for it. No dividend also means that you will not pay taxes on dividends.",
"title": ""
},
{
"docid": "8251000cc2c3e8b95abfb04205e6fcc7",
"text": "\"The answer is Discounted Cash Flows. Companies that don't pay dividends are, ostensibly reinvesting their cash at returns higher than shareholders could obtain elsewhere. They are reinvesting in productive capacity with the aim of using this greater productive capacity to generate even more cash in the future. This isn't just true for companies, but for almost any cash-generating project. With a project you can purchase some type of productive assets, you may perform some kind of transformation on the good (or not), with the intent of selling a product, service, or in fact the productive mechanism you have built, this productive mechanism is typically called a \"\"company\"\". What is the value of such a productive mechanism? Yes, it's capacity to continue producing cash into the future. Under literally any scenario, discounted cash flow is how cash flows at distinct intervals are valued. A company that does not pay dividends now is capable of paying them in the future. Berkshire Hathaway does not pay a dividend currently, but it's cash flows have been reinvested over the years such that it's current cash paying capacity has multiplied many thousands of times over the decades. This is why companies that have never paid dividends trade at higher prices. Microsoft did not pay dividends for many years because the cash was better used developing the company to pay cash flows to investors in later years. A companies value is the sum of it's risk adjusted cash flows in the future, even when it has never paid shareholders a dime. If you had a piece of paper that obligated an entity (such as the government) to absolutely pay you $1,000 20 years from now, this $1,000 cash flows present value could be estimated using Discounted Cash Flow. It might be around $400, for example. But let's say you want to trade this promise to pay before the 20 years is up. Would it be worth anything? Of course it would. It would in fact typically go up in value (barring heavy inflation) until it was worth very close to $1,000 moments before it's value is redeemed. Imagine that this \"\"promise to pay\"\" is much like a non-dividend paying stock. Throughout its life it has never paid anyone anything, but over the years it's value goes up. It is because the discounted cash flow of the $1,000 payout can be estimated at almost anytime prior to it's payout.\"",
"title": ""
},
{
"docid": "8a1da1decc09e1158d46e7961ff60b4c",
"text": "For XOM if you were lucky enough to purchase on 20 Jan 16, at 73.18/share and sold on 15 July at 94.95 you would achieve a 29% return in six months. Awesome. You'd also get a dividend payment or two adding another percentage point per to your returns. The one year chart for FB shows it increasing from ~95/share to ~129. Yet no dividend was paid. However, the 35.7% YTD for 2016 should make anyone happy. Both of these require excellent timing, and those kind of returns are unsustainable over the long haul. Many people simply hold stocks. Having the dividend is a nice bonus to some growth. Why to people buy stocks? For profit. Sometimes dividend payers offer the best option, sometimes not.",
"title": ""
},
{
"docid": "53da041e5b8c1a6f7148e4d5b1358ea5",
"text": "It depends on your investment profile but basically, dividends increase your taxable income. Anyone making an income will effectively get 'lower returns' on their investments due to this effect. If you had the choice between identical shares that either give a dividend or don't, you'll find that stock that pays a dividend has a lower price, and increases in value more slowly than stock that doesn't. (all other things being equal) There's a whole bunch of economic theory behind this but in short, the current stock price is a measure of how much the company is worth combined with an estimation of how much it will be worth in the future (NPV of all future dividends is the basic model). When the company makes profit, it can keep those profits, and invest in new projects or distribute a portion of those profits to shareholders (aka dividends). Distributing the value to shareholders reduces the value of the company somewhat, but the shareholders get the money now. If the company doesn't give dividends, it has a higher value which will be reflected in a higher stock price. So basically, all other things being equal (which they rarely are, but I digress) the price and growth difference reflects the fact that dividends are paying out now. (In other words, if you wanted non-dividend shares you could get them by buying dividend shares and re-investing the dividend as new shares every time there was a payout, and you could get dividend-share like properties by selling a percentage of non-dividend shares periodically). Dividend income is taxable as part of your income right away, however taxes on capital gains only happen when you sell the asset in question, and also has a lower tax rate. If you buy and hold Berkshire Hatheway, you will not have to pay taxes on the gains you get until you decide to sell the shares, and even then the tax rate will be lower. If you are investing for retirement, this is great, since your income from other sources will be lower, so you can afford to be taxed then. In many jurisdictions, income from capital gains is subject to a different tax rate than the rest of your income, for example in the US for most people with money to invest it's either 15% or 20%, which will be lower than normal income tax would be (since most people with money to invest would be making enough to be in a higher bracket). Say, for example, your income now is within the 25% bracket. Any dividend you get will be taxed at that rate, so let's say that the dividend is about 2% and the growth of the stock is about 4%. So, your effective growth rate after taxation is 5.5% -- you lose 0.5% from the 25% tax on the dividend. If, instead, you had stock with the same growth but no dividend it would grow at a rate of 6%. If you never withdrew the money, after 20 years, $1 in the dividend stock would be worth ~$2.92 (1.055^20), whereas $1 in the non-dividend stock would be worth ~$3.21 (1.06^20). You're talking about a difference of 30 cents per dollar invested, which doesn't seem huge but multiply it by 100,000 and you've got yourself enough money to renovate your house purely out of money that would have gone to the government instead. The advantage here is if you are saving up for retirement, when you retire you won't have much income so the tax on the gains (even ignoring the capital gains effect above) will definitely be less then when you were working, however if you had a dividend stock you would have been paying taxes on the dividend, at a higher rate, throughout the lifetime of the investment. So, there you go, that's what Mohnish Pabrai is talking about. There are some caveats to this. If the amount you are investing isn't large, and you are in a lower tax bracket, and the stock pays out relatively low dividends you won't really feel the difference much, even though it's there. Also, dividend vs. no dividend is hardly the highest priority when deciding what company to invest in, and you'll practically never be able to find identical companies that differ only on dividend/no dividend, so if you find a great buy you may not have a choice in the matter. Also, there has been a trend in recent years to also make capital gains tax progressive, so people who have a higher income will also pay more in capital gains, which negates part of the benefit of non-dividend stocks (but doesn't change the growth rate effects before the sale). There are also some theoretical arguments that dividend-paying companies should have stronger shareholders (since the company has less capital, it has to 'play nice' to get money either from new shares or from banks, which leads to less risky behavior) but it's not so cut-and-dried in real life.",
"title": ""
},
{
"docid": "0619eb0ed1ee60b67556347fb051ff16",
"text": "There are many reasons for buying stock for dividends. You are right in the sense that in theory a stock's price will go down in value by the amount of the dividend. As the amount of dividend was adding to the value of the company, but now has been paid out to shareholder, so now the company is worth less by the value of the dividend. However, in real life this may or may not happen. Sometimes the price will drop by less than the value of the dividend. Sometimes the price will drop by more than the dividend. And other times the price will go up even though the stock has gone ex-dividend. We can say that if the price has dropped by exactly the amount of the dividend then there has been no change in the stockholders value, if the price has dropped by more than the value of the dividend then there has been a drop to the stockholder's value, and if the price has gone up or dropped by less than the value of the dividend then there has been a increase to the stockholder's value. Benefits of Buying Stocks with Good Dividends: What you shouldn't do however, is buy stocks solely due to the dividend. Be aware that if a company starts reducing its dividends, it could be an early warning sign that the company may be heading into financial troubles. That is why holding a stock that is dropping in price purely for its dividend can be a very dangerous practice.",
"title": ""
},
{
"docid": "30efae6efc1fb61ee20dfa28f371a625",
"text": "A stock dividend converts some of the reserves and surplus on the company's balance sheet into paid-up capital and securities premium account without involving any actual cash outflow to the shareholders. While cash dividends are eyed by the investors due to their cash yield, issuance of stock dividends are indicators of growing confidence of the management and the shareholders in the company. The fact that shareholders want to convert free cash sitting on the balance sheet (which can ideally be taken out as dividends) into blocked money in exchange for shares is symbolic to their confidence in the company. This in turn is expected to lead to an increase in market price of the stock.",
"title": ""
},
{
"docid": "2c22c52e4aaebff770a0c2e1acd89cf3",
"text": "\"A share of stock is a share of the underlying business. If one believes the underlying business will grow in value, then one would expect the stock price to increase commensurately. Participants in the stock market, in theory, assign value based on some combination of factors like capital assets, cash on hand, revenue, cash flow, profits, dividends paid, and a bunch of other things, including \"\"intangibles\"\" like customer loyalty. A dividend stream may be more important to one investor than another. But, essentially, non-dividend paying companies (and, thus, their shares) are expected by their owners to become more valuable over time, at which point they may be sold for a profit. EDIT TO ADD: Let's take an extremely simple example of company valuation: book value, or the sum of assets (capital, cash, etc) and liabilities (debt, etc). Suppose our company has a book value of $1M today, and has 1 million shares outstanding, and so each share is priced at $1. Now, suppose the company, over the next year, puts another $1M in the bank through its profitable operation. Now, the book value is $2/share. Suppose further that the stock price did not go up, so the market capitalization is still $1M, but the underlying asset is worth $2M. Some extremely rational market participant should then immediately use his $1M to buy up all the shares of the company for $1M and sell the underlying assets for their $2M value, for an instant profit of 100%. But this rarely happens, because the existing shareholders are also rational, can read the balance sheet, and refuse to sell their shares unless they get something a lot closer to $2--likely even more if they expect the company to keep getting bigger. In reality, the valuation of shares is obviously much more complicated, but this is the essence of it. This is how one makes money from growth (as opposed to income) stocks. You are correct that you get no income stream while you hold the asset. But you do get money from selling, eventually.\"",
"title": ""
},
{
"docid": "88bad5cf03d3a2c8d04785fcf5589fec",
"text": "\"One way to value companies is to use a Dividend discount model. In substance, it consists in estimating future dividends and calculating their present value. So it is a methodology which considers that an equity is similar to a bond and estimates its current value based on future cash flows. A company may not be paying dividends now, but because its future earnings prospects are good may pay some in the future. In that case the DDM model will give a non-zero value to that stock. If on the other hand you think a company won't ever make any profits and therefore never pay any dividends, then it's probably worth 0! Take Microsoft as an example - it currently pays ~3% dividend per annum. The stock has been listed since 1986 and yet it did not pay any dividends until 2003. But the stock has been rising regularly since the beginning because people had \"\"priced in\"\" the fact that there was a high chance that the company would become very profitable - which proved true in the long term (+60,000% including dividends since the IPO!).\"",
"title": ""
},
{
"docid": "b4930ad8b4477424986d9bb08fd76f2b",
"text": "The risk in a divident paying stock can come from 2 sources. The business of the company, or the valuation of the stock at the time you buy. The business of the company relates to how they are running things, the risks they are taking with the company, innovations in their pipeline, and their competitive landscape. You can find all sorts of examples of companies that paid nice dividends but didn't end so well... Eastman Kodak, Enron, Lehman brothers, all used to pay very nice dividends at some point... On the other hand you have the valuation. The company is running great, but the market has unrealistic expectations about it. Think Amazon and Yahoo back in 2001... the price was way too high for the company's worth. As the price of a stock goes up, the return that you get from its future cash flows (dividends) goes down (and viceversa). If you want to go deep into the subject, check out this course from Chicago U they spend a lot of time talking about dividends, future returns from stocks and the risk rewards of finding stocks by methods such as these.",
"title": ""
}
] |
fiqa
|
ad4660bd5a1b7db887a3ebea36348ae0
|
Is building a corporation a good option?
|
[
{
"docid": "537d0a768beb6bac683f1268f73aaecf",
"text": "Creating a corporation is not necessarily less taxes. In fact, you'll face the problem of double taxation, and since you must pay yourself a reasonable salary, if your corporation doesn't earn much to give you as dividend after the salary, and/or your tax bracket is low, you'll in fact may end up paying more taxes. Also there's a lot of bureaucracy involved in managing a corporation. Liability on the other hand is important, and what's more important - is asset separation and limiting the liability to the corporation assets, keeping your personal assets safe. To achieve that, you don't have to create a corporation, but you can create a Limited Liability Company (LLC). LLC are disregarded entities for tax purposes (i.e.: you won't have to pay taxes twice, only once as a sole proprietor/partner), but provide the liability limitation and asset separation. LLC's are much less formal, and require much less paperwork reducing the risk of corporate veil piercing because of non-compliance. I myself decided to manage my investments through LLC's for that very reason (asset separation).",
"title": ""
},
{
"docid": "b1d966d38507f2431e2031ce742cfa87",
"text": "Compared with a Sole Proprietorship, the main disadvantages of an S-Corporation or an LLC are that it adds a lot of management overhead (time, and possibly money if you don't do it all yourself), and there are fees you must pay to incorporate, as well as additional yearly maintenance fees which vary by state. You should be able to weigh the tax savings and liability protection against the extra costs and hassle, and see which way the scales tip. As a rule of thumb, the bigger your business gets or the more income you make, the more attractive incorporating becomes. Note there are some additional taxes that certain jurisdictions impose on business income. For example, IL and CA charge 1.5% tax, NY is less, but NYC is 8.85%! In NYC specifically, you could actually end up paying slightly more tax as an S-Corp than you would as a Sole Proprietorship. In most places though, the nominal local taxes will still be less than the FICA taxes you could potentially save.",
"title": ""
}
] |
[
{
"docid": "f38781d51f018d03d48fa9ad598f6afa",
"text": "And more than that it would encourage people to invest in companies for the long term, allowing Executives and CEO's and such the breathing space to make a tough decision that's bad in the short term but good in the long term... Rather than hiring a psychopath CEO that's only trying to boost short term stock value for his own bonus/salary",
"title": ""
},
{
"docid": "bb4dc2382fe36b9c9d01a1e44edaee35",
"text": "IANAL (and nor am I an accountant), so I can't give a definitive answer as to legality, but AFAIK, what you propose is legal. But what's the benefit? Avoiding corporation tax? It's simplistic – and costly – to think in terms like that. You need to run the numbers for different scenarios, and make a plan. You can end up ahead of the game precisely by choosing to pay some corporate tax each year. Really! Read on. One of the many reasons that self-employed Canadians sometimes opt for a corporate structure over being a sole proprietor is to be able to not pay themselves everything the company earns each year. This is especially important when a business has some really good years, and others, meh. Using the corporation to retain earnings can be more tax effective. Example: Imagine your corporation earns, net of accounting & other non-tax costs except for your draws, $120,000/year for 5 years, and $0 in year 6. Assume the business is your only source of income for those 6 years. Would you rather: Pay yourself the entire $120,000/yr in years 1-5, then $0 in year 6 (living off personal savings you hopefully accumulated earlier), subjecting the $120,000/yr to personal income tax only, leaving nothing in the corporation to be taxed? Very roughly speaking, assuming tax rates & brackets are level from year to year, and using this calculator (which simplifies certain things), then in Ontario, then you'd net ~$84,878/yr for years 1-5, and $0 in year 6. Overall, you realized $424,390. Drawing the income in this manner, the average tax rate on the $600,000 was 29.26%. vs. Pay yourself only $100,000/yr in years 1-5, leaving $20,000/yr subject to corporation tax. Assuming a 15.5% combined federal/provincial corporate tax rate (includes the small business deduction), then the corp. is left with $16,900/yr to add to retained earnings in years 1-5. In year 6, the corp. has $84,500 in retained earnings to be distributed to you, the sole owner, as a dividend (of the non-eligible kind.) Again, very roughly speaking, you'd personally net $73,560/yr in years 1-5, and then on the $84,500 dividend in year 6, you'd net $73,658. Overall, you realized $441,458. Drawing the income in this manner, the average tax rate on the $600K was 26.42%. i.e. Scenario 2, which spreads the income out over the six years, saved 2.84% in tax, or $14,400. Smoothing out your income is also a prudent thing to do. Would you rather find yourself in year 6, having no clients and no revenue, with nothing left to draw on? Or would you rather the company had saved money from the good years to pay you in the lean one?",
"title": ""
},
{
"docid": "56af5c7d291d4343dcfe0da0f6194335",
"text": "How about having him make you CEO (and/or president, depending on structure), and keep him as an advisor. Then over the next year you can evaluate if you want to be the owner and/or if costs justify it. You can use your first year as training.",
"title": ""
},
{
"docid": "4b1d182c75a57338e88d245630fdb6c2",
"text": "If you happen to be looking around one of the most secured business investment Opportunity, Franchise Business investment Opportunity is one of the best options to look at. A franchise is a single platform where you can explore your area of interest and nurture it safely. Moreover, it gives you the opportunity to step ahead with the world's leading companies, and earn a market reputation easily.",
"title": ""
},
{
"docid": "42bb64664ad39c4ddb15eb14658076b3",
"text": "We offer a variety of business enterprise formation applications designed to make putting in a private organization as simple and straightforward as feasible. They range from the simple Digital Package - providing the minimum prison requirements for reputable Company formation - to the All Inclusive, which includes a variety of beneficial extras, including a prestigious registered office, a commercial enterprise provider. This corporation shape is usually utilized by non-earnings Company inside the United States. It protects the private finances of the business enterprise owners in a comparable manner as a corporation limited via stocks. Instead of getting shareholders and stocks.",
"title": ""
},
{
"docid": "3def845bcb1297284720017265a548ac",
"text": "Crony capitalism isn't capitalism. It is basically a case where the government turns a blind eye to wealthy individuals breaking the law, or is even complicit in giving away taxpayer money in the form of no-bid contracts. This is much more prevalent in China's state-sponsored capitalism. Their system is textbook crony capitalism. We still have it but to a lesser degree. Don't blame capitalism for the government's failure. Crony capitalism absolutely requires a complicit strong central government in order to flourish. And there is a difference between the suburbs around Las Vegas and Chinese ghost cities. The Las Vegas suburbs were at least built with buyers in mind, even though this turned out to be a mistake. It was a mistake on the part of a few individuals. Absolutely a mis-allocation of capital, and I didn't mean to imply that capitalism is perfectly efficient in allocating capital. But the Chinese ghost cities are a centrally planned project made for the intention of moving rural Chinese people into them in future 5-year plans. Whether that turns out to be a good investment has yet to be seen, but it seems like it will involve moving lots of people against their will. But does it not make more sense to gradually build up a city according to what is currently needed, as capitalism tries to do, rather than spend lots of money building an entire city, much of which may never be needed? There are so many imbalances brewing under the surface in China, it seems like only a matter of time before they all come to a head.",
"title": ""
},
{
"docid": "0eaa489227b57eec5f75fc86beefaa81",
"text": "You are absolutely correct, incorporation and the fiduciary responsibility that comes with it almost always leads to a sacrifice in product quality and long-term business principles. I always think of the difference between McDonalds and In-n-Out hamburgers as examples of where each road leads.",
"title": ""
},
{
"docid": "c14b4881f89e813dcec5a551b30856b2",
"text": "2 very viable options. Real Estate is cheap now and if you hold a few properties for the long term the price should rise. You can use them as rental properties to supplement your income. In addition agriculture is also very viable. How else you gunna feed 7 billion? Might as well cash in on that.",
"title": ""
},
{
"docid": "dec41fd2fd4de93670cbe6efed4c292d",
"text": "On a company level ROCE over WACC would be more meaningful in my view but the end result should be be pretty much the same. This concept is closely related to value creation. Value can only be created when a company's ROCE is exceeding its cost of funding - WACC. This is also tightly related with the NPV concept. Value is only created when the NPV on a project is >0. And to directly answer OP. Study in detail WACC. (weighted average cost of capital). Focus on the Modigliani–Miller theorem with taxes and financial distress costs. Good luck.",
"title": ""
},
{
"docid": "a8cf9eff8d6d8222f23e1649b7d3e58e",
"text": "\"You'd be mistaken to this there is any morality involved in (most) corporations - neither positive nor negative; running a business is amoral. Some business missions have a moral intent - such as pharmaceuticals, health organization, etc. - but all have an amoral underbelly. It's fairly simplistic - the purpose of a business is to produce a profit. At some point, all successful, well functioning businesses will work down their list of ways to produce a profit - after they've established market share, a lasting brand, customer loyalty, finances well in the black - and eventually look towards capital preservation. In most bodies with a large monetary wealth, capital preservation becomes a key focus (in other words, once you master the art of making money, you then need to master the art of keeping it). Thus the ability to then focus on these things. To continue to just pay taxes is like running an efficient, but leaky ship. The more you preserve, the longer you'll be around and the more power you'll yield to stick around. This last point is also important to keep in mind - unlike you or I - a company will basically last forever (well at least until society collapses). You or I are only here until we die - and whatever wealth we have we may try to preserve for our kids or next of kin. A corporation is always here, the people in the corporation & it's owners change hands, but the corporation survives. Frankly any business that isn't aiming to make a profit, is either going to fail quickly or is by definition a \"\"non-profit\"\". Here is where I would believe the government plays a balancing role - to reign in the power of corporations (lest they rival their own). But, any good corporation will handle that problem as well (Regulatory capture, anyone?). Also, consider that for the most wealthy among us, it's probably not about the money anymore. It's now probably about the game. This is certainly where the psychopaths get that manic edge on the rest of us.\"",
"title": ""
},
{
"docid": "cc7f67e8b4e045efd3adf0d6e8579c9b",
"text": "In addition to asking an accountant, I would also ask a lawyer. When exploring the same question for myself, I found that one of the benefits of incorporating or forming an LLC is that your personal assets are better protected. Including asset protection, here are 5 reasons to incorporate: Initially, I thought that as I had so few assets, I should not be concerned. I was glad I was able to do a free consult with a lawyer who advised me to look into forming an LLC. (Ultimately, my planned business idea never panned out. So, I never went the incorporation/LLC route.) Hope this helps!",
"title": ""
},
{
"docid": "cbd83f94ead8881e137fb659c8babb07",
"text": "I would listen to chrissundberg below. Most professionals I meet and interact with in accounting firms, law firms, lending, and others are by the book, smart, professional, and honest in their business dealings. Of course I have also run into a small minority that try to avoid contractual obligations or pull a fast one on the auditors, but these guys are known quickly throughout the business community and avoided. You need to reevaluate your thoughts on government's role in business and the finance industry, which you are clearly interested in joining. Quite frankly you won't last a week coming in most companies if you vocalize the government should do audits and business is amoral.",
"title": ""
},
{
"docid": "e30c1a9481ded4a26c6feb5502718faa",
"text": "My understanding is you can create a company 0 value. Then you need to either loan the company the money to buy the building (it will still have 0 value as it will have a debt equal to it's assets) or sell share to investors at any price you like to raise the money to buy the building. Once shares have value (as valued by a chartered accountant - not anyone can do this) then anyone recieving shares will have to pay income tax. This is why keeping the shares as no value for as long as possible can be preferable. Also a benefit of using share options. talk to your investors, see what they require.",
"title": ""
},
{
"docid": "01dd98454df723d9121bf03883bafa71",
"text": "* Yes, you should incorporate if you plan on seriously investing in real estate. This not only limits liability in terms of paying back the debt but also in case your tenants sue you. * Pass-through entities. Typically an LLC but it depends on the state if they have good or bad LLC laws. Pennsylvania is a state where you would not want to incorporate as an LLC. Other options include S-corps and LPs. * Loans are taken out by corporations against the property. Typically mortgage loans are non-recourse. If you set up a company for each property, this further insulates you against the bank capturing other properties within the pool. However, recourse carveouts can still end up getting you on the hook personally for the loans. These typically include voluntary bankruptcy. You would very rarely have to file for bankruptcy anyway for your real estate investments. At worst, it will end in foreclosure but banks typically would prefer deed-in-lieu just because it is faster and easier for them too. You just turn over the keys and walk away. It will have very little impact on your personal finances or record. Everyone in real estate walks away from properties and leaves them with the bank. It's a fact of doing business and your lender should have been comfortable owning your property at the basis they lent money to you. If they weren't, they were just stupid. * Yes, every real estate investment requires equity in the property. Typically it's a 20% equity check but if the lender underwrites the property to a lower value than what you purchased it for, you may have to line up more expensive financing.",
"title": ""
},
{
"docid": "f70e9b1546375e881102b39de8ec53ba",
"text": "Whether it's wise or not depends on what you think and what you should consider are the risks both ways. What are the risks? For Let's say that the company produces great value and its current price and initial price are well below what it's worth. By investing some of your money in the company, you can take advantage of this value and capitalize off of it if the market recognizes this value too, or when the market does (if it's a successful company it will be a matter of when). Other reasons to be for it are that the tech industry is considered a solid industry and a lot of money is flowing into it. Therefore, if this assumption is correct, you may assume that your job is safe even if your investment doesn't pay off (meaning, you don't lose income, but your investment may not be a great move). Against Let's say that you dump a lot of money into your company and invest in the stock. You're being paid by the company, you're taking some of that money and investing it in the company, meaning that, depending on how much you make outside the company, you are increasing your risk of loss if something negative happens to the company (ie: it fails). Other reasons to be against it are just the opposite as above: due to the NSA, some analysts (like Mish, ZeroHedge, and others) think that the world will cut back on doing IT business with the United States, thus the tech industry will take a major hit over the next decade. In addition to that, Jesse Colombo (@TheBubbleBubble) on Twitter is predicting that there's another tech bubble and it will make a mess when it pops (to be fair to Colombo, he was one of analysts who predicted the housing bubble and his predictions on trading are often right). Finally, there is a risk of lost money and there is also a risk of lost opportunity. Looking at your past investments, which generally hurt more? That might give you a clue what to do.",
"title": ""
}
] |
fiqa
|
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