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Is there a term for the risk of investing in an asset with a positive but inferior return? | Opportunity cost is the term you're looking for. I.e. (quoting from link) Definition of 'Opportunity Cost' 1. The cost of an alternative that must be forgone in order to pursue a certain action. Put another way, the benefits you could have received by taking an alternative action. | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
Best Practices for Managing Paper Receipts | I store all my receipts digitally, and make sure to input them into accounting program sooner than later, just so I don't forget about it. For practical purposes, the two important things are: Any kind of a digital system makes this pretty easy, even just putting the sums in a spreadsheet and the receipts into files with the date in the name. However, because it's easy enough, I also have a box where I stuff the paper receipts. I expect never to need them, but should something very weird happen to my computer and backups, they would be there. | Share your insights or perspective on the financial matter presented in the input. |
Where can I find definitive terms for a preferred share? | 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. | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
How to find a reputable company to help sell a timeshare? | The one thing I would like to add to Ben's answer is that you will be lucky to get out of this with no proceeds. So that 30-40K paid for the timeshare maybe a total loss. If this purchase was financed with the timeshare used as collateral you may need to pay it off prior to being released. One tactic I heard used is to offer the sales team, that sold you the timeshare, a bonus for selling yours instead of one out of inventory. Assuming their commission is typically 25% of the sales price, you might consider offering them 40% or some higher figure. Doing it this way, you will have all the slick marketing on your side probably generating the highest amount of revenue possible. Timeshares are really bad deals. If you know this you can score some cheap vacations by attending their seminars and continuing to say no. The wife and I recently got back from a nice trip to Aruba mostly paid for with airline points, and a 2 hour timeshare tour. | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
What percent of my salary should I save? | A single percentage figure makes little sense here as you are asking for a bunch of different things: | Share your insights or perspective on the financial matter presented in the input. |
How should one structure a portfolio given the possibility that a Total Stock Market Index might decline and not recover for a long time? | John Bogle never said only buy the S&P 500 or any single index Q:Do you think the average person could safely invest for retirement and other goals without expert advice -- just by indexing? A: Yes, there is a rule of thumb I add to that. You should start out heavily invested in equities. Hold some bond index funds as well as stock index funds. By the time you get closer to retirement or into your retirement, you should have a significant position in bond index funds as well as stock index funds. As we get older, we have less time to recoup. We have more money to protect and our nervousness increases with age. We get a little bit worried about that nest egg when it's large and we have little time to recoup it, so we pay too much attention to the fluctuations in the market, which in the long run mean nothing. How much to pay Q: What's the highest expense ratio that one should pay for a domestic equity fund? A: I'd say three-quarters of 1 percent maybe. Q: For an international fund? A: I'd say three-quarters of 1 percent. Q: For a bond fund? A: One-half of 1 percent. But I'd shave that a little bit. For example, if you can buy a no-load bond fund or a no-load stock fund, you can afford a little more expense ratio, because you're not paying any commission. You've eliminated cost No. 2.... | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
What to know before purchasing Individual Bonds? | A few points that I would note: Call options - Could the bond be called away by the issuer? This is something to note as some bonds may end up not being as good as one thought because of this option that gets used. Tax considerations - Are you going for corporate, Treasury, or municipals? Different ones may have different tax consequences to note if you aren't holding the bond in a tax-advantaged account,e.g. Roth IRA, IRA or 401k. Convertible or not? - Some bonds are known as "convertibles" since the bond comes with an option on the stock that can be worth considering for some kinds of bonds. Inflation protection - Some bonds like TIPS or series I savings bonds can have inflation protection built into them that can also be worth understanding. In the case of TIPS, there are principal adjustments while the savings bond will have a change in its interest rate. Default risk - Some of the higher yield bonds may have an issuer go under which is another way one may end up with equity in a company rather than getting their money back. On the other side, for some municipals one could have the risk of the bond not quite being as good as one thought like some Detroit bonds that may end up in a different result given their bankruptcy but there are also revenue bonds that may not meet their target for another situation that may arise. Some bonds may be insured though this requires a bit more research to know the credit rating of the insurer. As for the latter question, what if interest rates rise and your bond's value drops considerably? Do you hold it until maturity or do you try to sell it and get something that has a higher yield based on face value? | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
New to investing — I have $20,000 cash saved, what should I do with it? | Another thought: Higher education in the US is frightfully expensive with the sticker price for a 4-year undergraduate degree at a decent private college us sitting at around $250,000 and rising fast. Consider starting a 529 savings plan especially if you planning on more kids. | Share your insights or perspective on the financial matter presented in the input. |
Bonds vs equities: crash theory | I would suggest looking into Relative Strength Asset Allocation. This type of investment strategy keeps you invested in the best performing asset classes. As a result of investing in this manner it removes the guesswork and moves naturally (say into cash) when the stock market turns down. There is a good whitepaper on this subject by Mebane Faber titled Relative Strength Strategies for Investing. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
Why would analysts recommend buying companies with negative net income? | 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. | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
Will my Indian debit card work in the U.S.? | You can use the debit card for practically any purchase that you make. You'll have to take the usual precautions and then a few additional ones. Cards make your life really easy and convenient with some basic precautions. All the best for your travel and stay in the USA. My two cents. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
Is there a way to tell how many stocks have been shorted? | Generally the number of shares of a U.S. exchange-listed stock which have been shorted are tracked by the exchange and reported monthly. This number is usually known as the open short interest. You may also see a short interest ratio, which is the short interest divided by the average daily volume for the stock. The short interest is available on some general stock data sites, such as Yahoo Finance (under Key Statistics) and dailyfinance.com (also on a Key Statistics subpage for the stock). | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
Is it possible to know the probability that a trade is successful? | No. Like Keshlam said, unless you have a crystal ball there is no sure thing. However based on the things you said in your question, you could be better off doing some back testing. With your findings, you can then set up trades in your favor but again it's not 100%. You may also want to check out quant finance stackexhange. | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
Are there any benefits of FMLA beyond preserving your job? | How will your employer treat your pay and benefits status while you're on leave? Disability income coverage and leave policies work in tandem to solve very different problems. Disability income coverage covers your income, leave policies guarantee your status as an employee. Typically, STD coverage requires an actual loss of income and will offset it's stated benefit for any income you're receiving. In general you can't begin a STD claim after the 7 day waiting period and also draw income from vacation or sick time. Also, typically STD will cover some percentage of your covered pay (sometimes including commission/bonus income) up to some weekly maximum. FLMA requires employers to allow certain amounts of time for certain types of leave. FMLA is not necessarily an income replacement tool like STD coverage. Contrary to your post it's my understanding that if sick and vacation time accrue in to a single PTO bucket your employer is prohibited from requiring employees to exhaust accrued time prior to beginning FMLA leave. In general, you're not missing anything because the point of FMLA is to guarantee your job and status as an employee from a benefits perspective. Benefits language from the Department of Labor Website A covered employer is required to maintain group health insurance coverage, including family coverage, for an employee on FMLA leave on the same terms as if the employee continued to work. | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
How does the yield on my investments stack up against other investors? | Generally S&P 500 will be used as the benchmark for US investors because it represents how's the US market performs as a whole. If you've outperformed the S&P 500 during the last couple years, great. However, at the end of day, you would want to look at the total growth percent that your portfolio has achieved, as compared with that of S&P 500. Anyway, your portfolio might actually ride along with the bull market during the 2009-2010 period (more-so for the small caps). | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
What are the top “market conditions” to follow? | If you're investing for the long term your best strategy is going to be a buy-and-hold strategy, or even just buying a few index funds in several major asset classes and forgetting about it. Following "market conditions" is about as useful to the long term trader as checking the weather in Anchorage, Alaska every day (assuming that you don't live in Anchorage, Alaska). Let me suggest treating yourself to a subscription to The Economist and read it once a week. You'll learn a lot more about investing, economics, and world trends, and you won't be completely in the dark if there are major structural changes in the world (like gigantic housing bubbles) that you might want to know about. | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
Main source of the shares/stocks data on the web | The main source is a direct feed from the stock market itself. The faster the feed, the more expensive. 15-minute delay is essentially free... and for those of us who do long-term investment is more than adequate. If you want data sooner, sign up with a brokerage that provides that service as part of what you're paying them for... and remember that every bit you spend on services is that much more profit you have to make just to break even, so there's a real tradeoff. | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
How does owning a home and paying on a mortgage fit into family savings and investment? | Unless you plan to sell your home and live in a box during your retirement I wouldn't consider it an investment that is a viable replacement for a retirement account. Consider this: Even if housing prices DO go way up, you still need a place to live. When you sell that house and try to buy another one to live in, you will find that the other houses went up in price too, negating your gain. The only way this might work is if you buy a much bigger house than you will need later and trade down to pull out some equity, or consider a reverse-mortgage for retirement income. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
Does bull/bear market actually make a difference? | Who are the losers going to be? If you can tell me for certain which firms will do worst in a bear market and can time it so that this information is not already priced into the market then you can make money. If not don't try. In a bull market stocks tend to act "normally" with established patterns such as correlations acting as expected and stocks more or less pricing to their fundamentals. In a bear market fear tends to overrule all of those things. You get large drops on relatively minor bad news and modest rallies on even the best news which results in stocks being undervalued against their fundamentals. In the crash itself it is quite easy to make money shorting. In an environment where stocks are undervalued, such as a bear market, you run the risk that your short, no matter how sure you are that the stock will fall, is seen as being undervalued and will rise. In fact your selling of a "losing" stock might cause it to hit levels where value investors already have limits set. This could bring a LOT of buyers into the market. Due to the fact that correlations break down creating portfolios with the correct risk level, which is what funds are required to do not only by their contracts but also by law to an extent, is extremely difficult. Risk management (keeping all kinds to within certain bounds) is one of the most difficult parts of a manager's job and is even difficult in abnormal market conditions. In the long run (definitions may vary) stock prices in general go up (for those companies who aren't bankrupted at least) so shorting in a bear market is not a long term strategy either and will not produce long term returns on capital. In addition to this risk you run the risk that your counterparty (such as Lehman brothers?) will file for bankruptcy and you won't be able to cover the position before the lender wants you to repay their stock to them landing you in even more problems. | Share your insights or perspective on the financial matter presented in the input. |
Administrator vs Broker vs Custodian for a Solo 401(k)? | Their paperwork should help you along. Schwab is the broker and custodian, you are the administrator. There's virtually no paperwork after the account is opened, until you hit $250K in value, and then there's one extra IRS form you need to fill out each year. See One-Participant 401(k) Plans for a good IRS description of form 5500. Disclosure - I use the Schwab Solo 401(k) myself, and the only downsides, in my opinion, the don't offer a Roth flavor, and no loans are permitted. Both of these features would offer flexibility. | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
What's “wrong” with taking money from your own business? | If you are the only owner: then morally there is nothing wrong with this, as long as you make sure that everything is tracked so that you pay the proper taxes from the correct entity. The danger for you and your business is if the transfers aren't planned. Because you may not be re-investing enough of the profits back into the company. That means that the equipment may be aging but you aren't replacing it, it can also mean that you aren't spending enough on business development. If you pay yourself so much that you bankrupt the company that isn't good. If you live the good life but starve the employees and they realize it, or if you starve the business and the employees realize it; then you might have a problem motivating and retaining employees. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
Is inflation a good or bad thing? Why do governments want some inflation? | Inflation is theft! It is caused when banks lend money that someone deposited, but still has claim to - called fractional reserve banking. On top of that, the Federal Reserve Bank (in the US) or the Central Bank of the currency (i.e. Bank of Japan, European Central Bank, etc.) can increase the monetary base by writing checks out of thin air to purchase debt, such as US Treasury Bonds. Inflation is not a natural phenomenon, it is completely man-made, and is caused solely by the two methods above. Inflation causes the business cycle. Lower interest rates caused by inflation cause long-term investment, even while savings is actually low and consumption is high. This causes prices to rise rapidly (the boom), and eventually, when the realization is made that the savings is not there to consume the products of the investment, you get the bust. I would encourage you to read or listen to The Case Against the Fed by Murray N. Rothbard - Great book, free online or via iTunes. | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
I have a loan with a 6.5% interest rate. Should I divert money into my 401(k) instead of prepaying? | The long term growth is not 6.5%, it's 10% give or take. But, that return comes with risk. A standard deviation of 14%. Does the 401(k) have a match? And are you getting the full match? If no match, or you already top it off, the 6.5% is a rate that I'd be happy to get on my money. So, I would pay it off faster. My highest rate debt is my 3.5% mortgage, which is 2.5% after tax. At 2.5%, I prefer to be a borrower, as that gap 2.5%-10% is pretty appealing, long term. | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
Why don't banks allow more control over credit/debit card charges? | This is a question with a flawed premise. Credit cards do have two-factor authentication on transactions they consider more at risk to be fraudulent. I've had several times when I bought something relatively expensive and unusual for me, where the CC either initially declined and sent me a text asking to confirm immediately (after which they would approve the charges), or approved but sent me a text right away asking to confirm (after which they'd automatically dispute if I told them to). The first is legitimately what you are asking for; the second is presumably for less risky but still some risk transactions). Ultimately, the reason they don't allow it for every transaction is that not enough people would make use of it to be worth their time to implement it. Particularly given it slows down the transaction significantly (and look at the complaints at the ~10-15 seconds extra EMV authentication takes, imagine that as a minute or more), I think you'd get a single digit percentage of people using that service. | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
Historical company performance data | Morningstar has that 10 history at http://financials.morningstar.com/ratios/r.html?t=JNJ®ion=usa&culture=en-US | Share your insights or perspective on the financial matter presented in the input. |
What should I be doing to protect myself from identity theft? | http://annualcreditreport.com gives you free access to your 3 credit bureau records. (Annual, not "free". The "free" guys will try to sell you something.) | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
How to gift money anonymously to an individual after collection thru a donation site? | In the US the best way to solve the problem, IMHO, would be via a trust. Talk to a properly licensed trust/estate attorney and a tax adviser (EA/CPA licensed in your State). Using intermediary who's not a 501(c) organization may pose income tax issues to that intermediary as providing support to the needy is not a valid business expense. It may also pose gift tax issues, since the aggregate amounts may exceed the statutory exemption limits. Using a (non-revokable) trust you can avoid these issues, but others may come up (such as what to do with the trust income or undistributed moneys). Talk to the advisers about how to avoid them. | Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering |
How to distinguish gift from payment for the service? | 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. | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
Investment for beginners in the United Kingdom | I'd go to specialist community web sites such as The Motley Fool and read their investing articles, and their forums, and everything. You cannot get enough information and advice to get going, as it is really easy to think investing is easy and returns are guaranteed. A lot of people found that out in 2008 and 2000! For example, they have a 'beginners portfolio' that will teach you the very basics of investing (though not necessarily what to invest in) | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
Pension or Property: Should I invest in more properties, or in a pension? | 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. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
I'm in the U.S. What are vehicles to invest in international stocks? | Interactive Brokers offers many foreign markets (19 countries) for US based investors. You can trade all these local markets within one universal account which is very convenient in my view. IB offering | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
What kinds of information do financial workers typically check on a daily basis? | In addition to the information in the other answer, I would suggest looking at an economic calendar. These provide the dates and values of many economic announcements, e.g. existing home sales, durable orders, consumer confidence, etc. Yahoo, Bloomberg, and the Wall Street Journal all provide such calendars. Yahoo provides links to the raw data where available; Bloomberg and the WSJ provide links to their article where appropriate. You could also look at a global economic calendar; both xe.com and livecharts.co.uk provide these. If you're only interested in the US, the Yahoo, Bloomberg, and WSJ calendars may provide a higher signal-to-noise ratio, but foreign announcements also affect US markets, so it's important to get as much perspective as possible. I like the global economic calendars I linked to above because they rate announcements on "priority", which is a quick way to learn which announcements have the greatest effect. Economic calendars are especially important in the context of an interview because you may be asked a follow-up question. For example, the US markets jumped in early trading today (5/28/2013) because the consumer confidence numbers exceeded forecasts (from the WSJ calendar, 76.2 vs 2.3). As SRKX stated, it's important to know more than the numbers; being able to analyze the numbers in the context of the wider market and being aware of the fundamentals driving them is what's most important. An economic calendar is a good way to see this information quickly and succinctly. (I'm paraphrasing part of my answer to another question, so you may or may not find some of that information helpful as well; I'm certainly not suggesting you look at the website of every central bank in the morning. That's what an economic calendar is for!) | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
Freelancing and getting taxes taken out up front instead of end of year? | It seems that you think you are freelancing, and they think you are an employee. What's bad for you, the tax office will also think you are an employee if they withhold tax for you. Alternatively, they think you are stupid, and they keep the money, but are actually not paying it to the tax office at all, in which case you will have a bad surprise when you do your tax returns. First, I'd ask them for proof that they are indeed paying these taxes into some account related to you. I'd then ask a tax adviser for some serious advice. If they are acting out of incompetence and not out of malice, then you should be mostly fine, but your work there will count as employment. Heaven knows why they treat you as an employee. Check your contract with them; whether it is between you and them or your company and them. It maybe that they never hired a contractor and believe that they have to pay employment tax. They don't. If your company sends them a bill, then they need to pay that bill, 100% of it, and that's it. Taxes are fully your business and your responsibility. As "quid" said, if they say they are withholding tax, then at the very least there must be a paystub that proves they have actually been paying these taxes. If they withhold taxes, and there is no paystub, then this looks like a criminal attempt to cheat you. If they have actually paid taxes properly into your account, then they are merely creating a mess that can hopefully be fixed. But it is probably complicated enough that you need a tax advisor, even if you had none before, since instead of paying to your company, they paid some money to the company, and some to you personally. | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
How does pre-market trading work? | First of all, not all brokers allow trading during pre-market and post-market. Some brokers only allow trading during the regular hours (9:30am - 4pm ET). Second of all, while you can place orders using limit orders and market orders during regular trading hours, you can only use limit orders during pre-market and post-market. This is because the liquidity is much lower during pre-market and post-market, and using market orders could result in some trades filling at horrible prices. So brokers don't allow using market orders outside of regular trading hours. Third, some brokers require you to specify that you want your order to be executed during pre-market or post-market. For example, my broker allows me to specify either "Day" or "Ext" for my orders. "Day" means I want my order to execute only during regular trading hours, and "Ext" means I want my order to execute at any time - pre-market, regular trading hours, or post-market. Finally, if your broker allows pre/post market trading, and you place a limit order while specifying "Ext", then your trade can happen in real-time during pre-market or post-market. Per your example, if a stock is trading at $5 at 8am, and you put in a limit order (while specifying "Ext") to buy it at $5 at 8am, then your order will execute at that time and you will buy that stock at 8am. | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
Buying a house for a shorter term | When on this topic, you'll often hear general rules of thumb. And, similar to the 'only buy stocks if you plan to hold more than X years' there are going to be periods where if you buy at a bottom right before the market turns up, you might be ahead just months after you buy. I'd say that if you buy right, below market, you're ahead the day you close. Edit - I maintain, and have Schiller providing supporting data) that real estate goes up with inflation in the long term, no more, no less. If the rise were perfectly smooth, correlated 100% month to month, you'd find it would take X years to break even to the costs of buying, commission and closing costs. If we call that cost about 8%, and inflation averages 3, it points to a 3 year holding period to break even. But, since real estate rises and falls in the short term, there are periods longer than 4 years where real estate lags, and very short periods where it rises faster than the costs involved. The buy vs rent is a layer right on top of this. If you happen upon a time when the rental market is tight, you may buy, see the house decline 10% in value, and when the math is done, actually be ahead of the guy that rented. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
How does a change in market cap affect a company's operational decisions? | In practical terms, it shouldn't. Market cap changes every day (assuming public trading, of course) or even second-by-second, and focusing on investor sentiment toward your company's stock is not the wisest way to make strategic decisions. That being said, company execs do need to be mindful of unusual swings in their company's share prices because it can sometimes be an indicator of news/information of which they're unaware. At the same time, you can't just disregard your shareholders, especially the big institutional players who may have large voting blocks with which to replace you if they feel you're not responsive to events. They are the ones who make strategic decisions based on your company's share price, right? (grin) The issue around swings in market cap is more about public perception than reality, so it is important for companies to have a good public relations strategy ready to go that can address questions/concerns in case of some market event. After all, consumers who hear that a company's share price has suddenly fallen by, say, 30% might be more hesitant to do business with that company because there's a (perhaps irrational) fear the company's not doing well and may not be around much longer. Investors are, by their very nature, emotional rather than rational. Any kind of news can cause a stampede toward or away from a stock for no reason that an investment professional could ever explain. That's why it's impossible to spend any real time focusing on market cap (leave that to your P.R. department to worry about). IF, as a company executive, you focus on doing the right things to make your company successful then any questions/concerns about market cap will resolve themselves. Good luck! | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
How can all these countries owe so much money? Why & where did they borrow it from? | By the phrasing of your question it seems that you are under the mistaken impression that countries are borrowing money from other countries, in which case it would make sense to question how everyone can be a borrower with no one on the other side of the equation. The short answer is that the debt is owed mostly to individuals and institutions that buy debt instruments. For example, you know those US savings bonds that parents are buying to save for their children's education? Well a bond is just a way to loan money to the Government in exchange for the original money plus some interest back later. It is as simple as that. I think because the debt and the deficit are usually discussed in the context of more complex macroeconomic concerns people often mistakenly assume that national debts are denominated in some shadow banking system that is hidden from the common person behind some red-tape covered bureaucracy. This is not the case here. Why did they get themselves into this much debt? The same reason the average person does, they are spending more than they bring in and are enabled by access to easy credit. Like many people they are also paying off one credit card using another one. | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
Stock Trade Transaction Fee - at what point is it worth it | I'm going to assume that you want to be invested all the time and each trade consists in selling a security and buying another one (similar to your example). How much commissions you are willing to pay depends on several factors, but one way to think about it is as follows. You have a position in stock A and you want to switch to stock B because you think it will perform better. If you think there's a good chance (>50%) that B will outperform A by more than x% then you can happily pay up to x/2% commissions and still make money over a long time horizon. If you like formulae, one way to express it is: Where: Example: if you tend to be right 51% of the time (hit rate), and gain 110% more than you lose on average (win loss ratio), you can see that your expected profit is: 5.1% - commissions, so you could pay 2.5% commissions on entering and closing the position and still make money*. Unfortunately, common sense, statistics and numerous studies tell us a sad truth: on average, people have a hit rate of 50% and a win/loss ratio of 100%. Which means that their expected profit per trade is 0% - commission. Based on that crude observation - unless you can prove to yourself that you are better than average - you should aim at reducing commissions paid to your broker as much as possible through: * 51% and 110% are not random numbers, they correspond to the results of the top 15% (professional) managers in a research paper using a sample of 215 funds managing $150bn. | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
Why do 10 year Treasury bond yields affect mortgage interest rates? | Different bonds (and securitized mortgages are bonds) that have similar average lives tend to have similar yields (or at least trade at predictable yield spreads from one another). So, why does a 30 year mortgage not trade in lock-step with 30-year Treasuries? First a little introduction: Mortgages are pooled together into bundles and securitized by the Federal Agencies: Fannie Mae, Freddie Mac, and Ginnie Mae. Investors make assumptions about the prepayments expected for the mortgages in those pools. As explained below: those assumptions show that mortgages tend to have an average life similar to 10-year Treasury Notes. 100% PSA, a so-called average rate of prepayment, means that the prepayment increases linearly from 0% to 6% over the first 30 months of the mortgage. After the first 30 months, mortgages are assumed to prepay at 6% per year. This assumption comes from the fact that people are relatively unlikely to prepay their mortgage in the first 2 1/2 years of the mortgage's life. See the graph below. The faster the repayments the shorter the average life of the mortgage. With 150% PSA a mortgage has an average life of nine years. On average your investment will be returned within 9 years. Some of it will be returned earlier, and some of it later. This return of interest and principal is shown in the graph below: The typical investor in a mortgage receives 100% of this investment back within approximately 10 years, therefore mortgages trade in step with 10 year Treasury Notes. Average life is defined here: The length of time the principal of a debt issue is expected to be outstanding. Average life is an average period before a debt is repaid through amortization or sinking fund payments. To calculate the average life, multiply the date of each payment (expressed as a fraction of years or months) by the percentage of total principal that has been paid by that date, summing the results and dividing by the total issue size. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
Should I buy a house with a friend? | There are lots of good reasons not to do this. HOWEVER if you do decide to, there are four things you need to consider: | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
Would it make sense to buy a rental property as an LLC and not in my own name? | Consider that there are some low-probability, high-impact risk factors involved with property management. For example, an old house has lead paint and may have illegal modifications, unknown to you, that pose some hazard. All of your "pros" are logical, and the cons are relatively minor. Just consult an attorney to look for potential landmines. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
Do I need to pay Income Tax if i am running a escrow service in India | This may be closed as not quite PF, but really "startup" as it's a business question. In general, you should talk to a professional if you have this type of question, specifics like this regarding your tax code. I would expect that as a business, you will use a proper paper trail to show that money, say 1000 units of currency, came in and 900 went out. This is a service, no goods involved. The transaction nets you 100, and you track all of this. In the end you have the gross profit, and then business expenses. The gross amount, 1000, should not be the amount taxed, only the final profit. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
Does a stock really dip in price on the ex-dividend date? And why would it do this? | This effect has much empirical evidence as googling "dividend price effect evidence" will show. As the financial economic schools of thought run the gamut so do the theories. One school goes as far to call it a market inefficiency since the earning power thus the value of an equity that's affected is no different or at least not riskier by the percentage of market capitalization paid. Most papers offer that by the efficient market hypothesis and arbitrage theory, the value of an equity is known by the market at any point in time given by its price, so if an equity pays a dividend, the adjusted price would be efficient since the holder receives no excess of the price instantly before payment as after including the dividend since that dividend information was already discounted so would otherwise produce an arbitrage. | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
When's the best time to sell the stock of a company that is being acquired/sold? | What's your basis? If you have just made a 50% gain, maybe you should cash out a portion and hold the rest. Don't be greedy, but don't pass up an opportunity either. | Share your insights or perspective on the financial matter presented in the input. |
Do you pay taxes on stock gains that are just returning to their original purchase price? | You don't generally pay capital gains taxes until you sell the stock. If you bought it in 2013 and the price goes up in 2014 but you just hold on to the stock, you won't have to pay any taxes on it. If you then sold it in 2015 for a profit, you'd have to pay capital gains taxes on the profit. Note that this excludes dividends. Dividends may complicate the matter somewhat. I'm also assuming you are in the U.S. or Canada, or a country like one of those two. It's possible some other country does taxes differently, though it'd surprise me. | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
Standard Deviation with Asset Prices? | James Roth provides a partial solution good for stock picking but let's speed up process a bit, already calculated historical standard deviations: Ibbotson, very good collection of research papers here, examples below Books | Share your insights or perspective on the financial matter presented in the input. |
Why trade futures if you have options | With options you pay for a premium which relates to the expected (so-called "implied" volatility). With futures, there is no assumption about the volatility of an underlying stock. In general, when trading options you trade the direction and future expected volatility of an underlying while futures are directional trades only. | Share your insights or perspective on the financial matter presented in the input. |
Do individual stocks have futures trading | As others have pointed out, they do in fact exist. But it may be worth pointing out a possible reason that they are not as popular as commodities futures. If I want exposure to the oil market (for example,) buying oil futures has a big advantage over buying oil. Namely, I don't actually need to store the oil; I can roll over my position rather than taking delivery. On the other hand, buying single stock futures does not have such a compelling advantage over buying the stock itself, so most people would simply do the latter. (Although stock futures might provide some other advantages in some very specialized situations.) | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
Little hazy on how the entire RSU's and etrade works | Is the remaining amount tax free? As in, if the amount shown (which I can sell) on etrade is $5000 then if I sell the entire shares will my bank account be increased by $5000? The stocks they sell are withholding. So let's say you had $7000 of stock and they sold $2000 for taxes. That leaves you with $5000. But the actual taxes paid might be more or less than $2000. They go in the same bucket as the rest of your withholding. If too much is withheld, you get a refund. Too little and you owe them. Way too little and you have to pay penalties. At the end of the year, you will show $7000 as income and $2000 as withheld for taxes from that transaction. You may also have a capital gain if the stock increases in price. They do not generally withhold on stock sales, as they don't necessarily know what was your gain and what was your loss. You usually have to handle that yourself. The main point that I wanted to make is that the sale is not tax free. It's just that you already had tax withheld. It may or may not be enough. | Share your insights or perspective on the financial matter presented in the input. |
Is it OK to use a credit card on zero-interest to pay some other credit cards with higher-interest? | I am sure everyone is different, but it has helped me a great deal. I have had several card balances go up and the interest on those per month was more than $200 in just interest combined. I transferred the balances over to 0% for 15 months – with a fee, so the upfront cost was about $300. However, over the next 15 months at 0% I'm saving over $200 each month. Now I have the money to pay everything off at 14 months. I will not be paying any interest after that, and I cut up all of my cards so I won't rack up the bills with interest on them anymore. Now, if I can't buy it with a debit card or cash, I don't get it. My cards went up so high after remodeling a home so they were justified. It wasn't because I didn't pay attention to what I could afford. My brother, on the other hand, has trouble using credit cards properly and this doesn't work for him. | Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering |
Why doesn't change in accounts receivable on balance sheet match cash flow statement? | I'm not an expert, but here is my best hypothesis. On Microsoft's (and most other company's) cash flow statements, they use the so-called "indirect method" of accounting for cash flow from operations. How that works, is they start with net income at the top, and then adjust it with line items for the various non-cash activities that contributed to net income. The key phrase is that these are accounting for the non-cash activities that contribute to net income. If the accounts receivable amount changes from something other than operating activity (e.g., if they have to write off some receivables because they won't be paid), the change didn't contribute to net income in the first place, so doesn't need to be reconciled on the cash flow statement. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
Is there anything I can do to prepare myself for the tax consequences of selling investments to buy a house? | If you need less than $125k for the downpayment, I recommend you convert your mutual fund shares to their ETF counterparts tax-free: Can I convert conventional Vanguard mutual fund shares to Vanguard ETFs? Shareholders of Vanguard stock index funds that offer Vanguard ETFs may convert their conventional shares to Vanguard ETFs of the same fund. This conversion is generally tax-free, although some brokerage firms may be unable to convert fractional shares, which could result in a modest taxable gain. (Four of our bond ETFs—Total Bond Market, Short-Term Bond, Intermediate-Term Bond, and Long-Term Bond—do not allow the conversion of bond index fund shares to bond ETF shares of the same fund; the other eight Vanguard bond ETFs allow conversions.) There is no fee for Vanguard Brokerage clients to convert conventional shares to Vanguard ETFs of the same fund. Other brokerage providers may charge a fee for this service. For more information, contact your brokerage firm, or call 866-499-8473. Once you convert from conventional shares to Vanguard ETFs, you cannot convert back to conventional shares. Also, conventional shares held through a 401(k) account cannot be converted to Vanguard ETFs. https://personal.vanguard.com/us/content/Funds/FundsVIPERWhatAreVIPERSharesJSP.jsp Withdraw the money you need as a margin loan, buy the house, get a second mortgage of $125k, take the proceeds from the second mortgage and pay back the margin loan. Even if you have short term credit funds, it'd still be wiser to lever up the house completely as long as you're not overpaying or in a bubble area, considering your ample personal investments and the combined rate of return of the house and the funds exceeding the mortgage interest rate. Also, mortgage interest is tax deductible while margin interest isn't, pushing the net return even higher. $125k Generally, I recommend this figure to you because the biggest S&P collapse since the recession took off about 50% from the top. If you borrow $125k on margin, and the total value of the funds drop 50%, you shouldn't suffer margin calls. I assumed that you were more or less invested in the S&P on average (as most modern "asset allocations" basically recommend a back-door S&P as a mix of credit assets, managed futures, and small caps average the S&P). Second mortgage Yes, you will have two loans that you're paying interest on. You've traded having less invested in securities & a capital gains tax bill for more liabilities, interest payments, interest deductions, more invested in securities, a higher combined rate of return. If you have $500k set aside in securities and want $500k in real estate, this is more than safe for you as you will most likely have a combined rate of return of ~5% on $500k with interest on $500k at ~3.5%. If you're in small cap value, you'll probably be grossing ~15% on $500k. You definitely need to secure your labor income with supplementary insurance. Start a new question if you need a model for that. Secure real estate with securities A local bank would be more likely to do this than a major one, but if you secure the house with the investment account with special provisions like giving them copies of your monthly statements, etc, you might even get a lower rate on your mortgage considering how over-secured the loan would be. You might even be able to wrap it up without a down payment in one loan if it's still legal. Mortgage regulations have changed a lot since the housing crash. | Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering |
Do I pay a zero % loan before another to clear both loans faster? | Wow, you guys get really cheap finance. here a mortage is 5.5 - 9% and car loans about 15 - 20%. Anyway back to the question. The rule is reduce the largest interest rate first ("the most expensive money"). For 0% loans, you should try to never pay it off, it's literally "free money" so just pay only the absolute minimum on 0% loans. Pass it to your estate, and try to get your kids to do the same. In fact if you have 11,000 and a $20,000 @ 0% loan and you have the option, you're better to put the 11,000 into a safe investment system that returns > 0% and just use the interest to pay off the $20k. The method of paying off the numerically smallest debt first, called "snowballing", is generally aimed at the general public, and for when you can't make much progress wekk to week. Thus it is best to get the lowest hanging fruit that shows progress, than to try and have years worth of hard discipline just to make a tiny progress. It's called snowballing, because after paying off that first debt, you keep your lifestyle the same and put the freed up money on as extra payments to the next target. Generally this is only worth while if (1) you have poor discipline, (2) the interest gap isn't too disparate (eg 5% and 25%, it is far better to pay off the 25%, (3) you don't go out and immediately renew the lower debt. Also as mentioned, snowballing is aimed at small regular payments. You can do it with a lump sum, but honestly for a lump sum you can get better return taking it off the most expensive interest rate first (as the discipline issue doesn't apply). Another consideration is put it off the most renewable finance. Paying off your car... so your car's paid off. If you have an emergency, redrawing on that asset means a new loan. But if you put it off the house (conditional on interest rates not being to dissimilar) it means you can often redraw some or all of the money if you have an emergency. This can often be better than paying down the car, and then having to pay application fees to get a new unsecured loan. Many modern banks actually use "mortgage offsetting" which allows them to do this - you can keep your lump sum in a standard (or even fixed term) and the value of it is deducted "as if" you'd paid it off your mortgage. So you get the benefit without the commitment. The bank is contracted for the length of the mortgage to a third party financier, so they really don't want you to change your end of the arrangement. And there is the hope you might spend it to ;) giving them a few more dollars. But this can be very helpful arragement, especially if you're financing stuff, because it keeps the mortgage costs down, but makes you look liquid for your investment borrowing. | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
Can you explain the mechanism of money inflation? | Assuming constant velocity, inflation is caused by the difference between the growth in the money supply and growth in real output. In other words, this means that the money supply growing faster than output is expanding causes inflation to arise. | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
Which USA Brokerage Firms can I transfer my India stocks to? | You might what to check out Interactive Brokers. If your India stock is NSE listed they might be able to do it since they support trading on that exchange. I would talk to a customer service rep there first. https://www.interactivebrokers.com/en/index.php?f=exchanges&p=asia | Share your insights or perspective on the financial matter presented in the input. |
How bad is it to have a lot of credit available but not used? | Unless you have a history of over-using credit (i.e. you've gotten yourself into debt trouble), then I think that the banker is giving you bad advice in telling you to get your own credit limit reduced. Having more credit available to you that is left unused will make your utilization ratio lower, which is generally better for your credit score, according to this article on CreditKarma.com. The "sweet spot" seems to be 1-20% utilization of your total credit. (But remember, this is only one factor in your credit score, and not even the biggest-- having a long history of on-time payments counts the most.) My own personal experience seems to bear this out. I have two major credit cards that I use. One card has a high credit limit (high for me anyway) and I use it for just about everything that I buy-- groceries, gas, durable goods, services, you name it. The other card has a limit that is about 1/3 of the first, and I use it for a few recurring bills and occasional purchases where they don't take the first card. I also have a couple of department store cards that I use rather infrequently (typically 1 purchase every 3 months or so). At the end of each month, when the respective statements post, each card has a balance that is 15% or less of the credit limit on that card. I pay off the entire balance on each card each month, and the cycle repeats. I have never been late on a payment, and my credit history for all of these cards goes back 10 years. My credit score is nearly as high as it can go. If having unused credit were a detriment, I would expect my score to be much lower. So, no, having "too much credit available" is not going to hurt you, unless you are not using it at all, or are tempted to abuse it (use too much). The key is to use common sense. Have a small number of cards, keep them active, spend within your means so you can pay off the balance in full after the statement posts, and never be late on your payments. That's all it takes to have good credit. | Share your insights or perspective on the financial matter presented in the input. |
What one bit of financial advice do you wish you could've given yourself five years ago? | Get an advanced degree. This should increase your earning power. Also learn how to use a computer, this should also tend to increase your earning power. | Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering |
Should I pay off my student loans or keep it in the bank? [duplicate] | Many years ago I heard a multi-level marketing pitch that pointed out how many doctors don't get out of debt until they are well into their 50's. The selling point was that you can get rich quick, as rich as a doctor, with nothing more then a bit of elbow grease. Of course the pitch failed to mention that most doctors, buy the things doctors buy, when they get that first big job. The big house, expensive cars nerf the income that they receive and they are probably stuck with years of student loan payments. I assume that you are one of the "lucky" ones that have graduated college with a well paying job. By lucky I mean you concentrated on obtaining a skill for which the marketplace has a need. Why not continue to live like a college student for a few more months and pay off all of your student loans ASAP? Get rid of them like you were purging the phone number of that high maintenance girl you dated during a short time of insanity. | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
Efficient International money transfer | Wiring is the best way to move large amounts of money from one country to another. I am sure Japanese banks will allow you to exchange your Japanese Yen into USD and wire it to Canada. I am not sure if they will be able to convert directly from JPY to CND and wire funds in CND. If you can open a USD bank account in Canada, that might make things easier. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
Do retailers ever stock goods just to make other goods sell better? | There's a concept in retail called a "loss leader", and essentially it means that a store will sell an item intentionally at a loss as a way of bringing in business in the hope that while consumers are in the store taking advantage of the discounted item, they'll make other purchases to make up for the loss and generate an overall profit. Many times it only makes sense to carry items that enhance the value of something else the store sells. Stores pay big money to study consumer behaviors and preferences in order to understand what items are natural fits for each other and the best ways to market them. A good example of what you're talking about is the fact that many grocery stores carry private label products that sell for higher margins, and they'll stock them alongside the name brands that cost much more. As a consequence (and since consumers often don't see a qualitative difference between store brands and name brands much of the time to rationalize spending more), the store's own brands sell better. I hope this helps. Good luck! | Share your insights or perspective on the financial matter presented in the input. |
Why does gold have value? | Most of the answers here reflect a misunderstanding of what gold actually is from a financial perspective. I'll answer your question by asking two questions, and I do challenge you to stop and think about what we mean when we say "cash" or "unit of exchange" because without understanding those, you will completely miss this answer. In 1971, the DXY was 110. For people who don't know, the DXY is the US Dollar Index - it weighs the strength of the US Dollar relative to other currencies. Hey look, it's a pretty graph of the DXY's history. In 1971, gold was $35 an ounce. The DXY is 97 today. Gold is $1170 an ounce today. Now the questions: If shares of Company A in 1971 were $10 a share, but now are $100 a share and some of this is because the company has grown, but some of it is because of inflation and the DXY losing value, what would the value of the company be if it was held in grams of gold and not dollars? Benjamin Graham, who influenced Warren Buffett, is a "supposed" critic of gold, yet what percent of his life were we not on a gold standard? In his day, the dollar was backed by gold - why would you buy gold if every dollar represented gold. Finally, consider how many US Dollars exist, and how few metric tonnes of gold exist (165,000). Even Paul Volcker admitted that a new gold standard would be impossible because the value of gold, if we did it today, would put gold in the $5000-$10000 range - which is absurd: To get on a gold standard technically now, an old fashioned gold standard, and you had to replace all the dollars out there in foreign hands with gold, God the price, you buy gold, because the price of gold would have to be enormous. So, you're all left hoping the Federal Reserve figures how to get us all out of this mess without causing trouble, otherwise, let me just kindly say, you WILL realize the value of gold then. As the old saying goes, "A fool and his money are soon parted." I could be wrong, but I'd say that those who've been buying gold since 1971 for their "cash holdings" (not index funds) aren't the suckers. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
Is UK house price spiral connected to debt based monetary system? | No. Rural Scotland has exactly the same monetary system, and not the same bubble. Monaco (the other example given) doesn't even have its own monetary system but uses the Euro. Look instead to the common factor: a lot of demand for limited real estate. Turning towards the personal finance part of it, we know from experience that housing bubbles may "burst" and housing prices may drop suddenly by ~30%, sometimes more. This is a financial risk if you must sell. Yet on the other hand, the fundamental force that keeps prices in London higher than average isn't going away. The long-term risk often is manageable. A 30% drop isn't so bad if you own a house for 30 years. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
Is it possible to quantify the probability of sudden big movements for a high-volume stock? | 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. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
What Happens to Bank Stocks If Country Defaults | The prices seem very low even considering the risk? The prices are low because of the risk. Nothing happens to the banks if the sovereign defaults. However, the sovereign debt holders - lose some or all the money they lent to that sovereign. Incidentally, many banks invest in the treasury bonds of various countries, especially those they're located in. They also invest in other companies that rely on the government, or the currency. If that dependency is too high - the bank may fail. If the dependency is not high, or non-existent - the bank will survive. If the bank fails - yes, your shares will be wiped out, that's what happens with bankrupt companies. If you considering investing in banks in a country that you think may default - research them and see how much investments they have that will be affected by that default. | Share your insights or perspective on the financial matter presented in the input. |
Are stories of turning a few thousands into millions by trading stocks real? | Warren Buffett pointed out that if you set 1 million monkeys to flipping coins, after ten flips, one monkey in about 1,000 (1,024) actually, would have a "perfect" track record of 10 heads. If you can double your money every three to five years (basically, the outer limit of what is humanly possible), you can turn $1,000 into $1 million in 30-50 years. But your chances of doing this are maybe those of that one in 1,000 monkeys. There are people that believe that if Warren Buffett were starting out today, "today's version" could not beat the historical version. One of the "believers" is Warren Buffett himself (if you read between the lines of his writings). What the promoters do is to use the benefit of hindsight to show that if someone had done such-and-such trades on such-and-such days, they would have turned a few thousand into a million in a few short years. That's "easy" in hindsight, but then challenge them to do it in real time! | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
Why don't banks give access to all your transaction activity? | 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? | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
Foreign Earned Income Exclusion - Service vs. Product? | 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. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
Why does gold have value? | Gold has very useful physical properties for some engineering applications. Even tiny amounts of gold can substantially improve products, so it can be worthwhile to pay high prices per ounce for gold. For example: Gold can be "beaten" or electroplated to produce very thin shiny coatings. Entire roofs (of famous buildings) have been covered with "gold leaf", at a cost that was small compared to the supporting structure. A very thin layer of electroplated gold provides better protection against corrosion than a much thicker layer of electroplated nickel. Even if gold costs thousands of times more per ounce than nickel, it is cheaper to use gold as an anti-corrosion layer than nickel (for use in military-grade naval electronics). A thin layer of electroplated gold greatly increases the electrical current-carrying capacity of a thin copper wire. | Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering |
When can you use existing real estate as collateral to buy more? | @victor has the most descriptive and basic idea on how this is done. The only thing I would add is that one benefit to real estate is that you can control how much the property is worth. By increasing rents and making the property one of the best in the neighborhood, you increase the value. As for the comment that this is the type of investing that caused the 1929 stock market crash, there are many other aspects that are overlooked. Taking equity out of real estate has been happening long before and after the depression. People do it all the time by taking out home equity loans, just not everyone uses it to purchase another investment. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
Assessing risk, and Identifying scams in Alternative Investments | I have personally invested $5,000 in a YieldStreet offering (a loan being used by a company looking to expand a ridesharing fleet), and would certainly recommend taking a closer look if they fit your investment goals and risk profile. (Here's a more detailed review I wrote on my website.) YieldStreet is among a growing crop of companies launched as a result of legislative and regulatory changes that began with the JOBS Act in 2012 (that's a summary from my website that I wrote after my own efforts to parse the new rules) but didn't fully go into effect until last year. Most of them are in Real Estate or Angel/Venture, so YieldStreet is clearly looking to carve out a niche by assembling a rather diverse collection of offerings (including Real Estate, but also other many other categories). Unlike angel/venture platforms (and more like the Real Estate platforms), YieldStreet only offers secured (asset-backed) investments, so in theory there's less risk of loss of principal (though in practice, these platforms haven't been through a serious stress test). So far I've stuck with relatively short-term investments on the debt crowdfunding platforms (including YieldStreet), and at least for the one I chose, it includes monthly payments of both principal and interest, so you're "taking money off the table" right away (though presumably then are faced with how to redeploy, which is another matter altogether!) My advice is to start small while you acclimate to the various platforms and investment options. I know I was overwhelmed when I first decided to try one out, and the way I got over that was to decide on the maximum I was willing to lose entirely, and then focus on finding the first opportunity that looked reasonable and would maximize what I could learn (in my case it was a $1,000 in a fix-and-flip loan deal via PeerStreet). | Share your insights or perspective on the financial matter presented in the input. |
Car finance, APR rates and per week in adverts; help understanding them | Taking the last case first, this works out exactly. (Note the Bank of England interest rate has nothing to do with the calculation.) The standard loan formula for an ordinary annuity can be used (as described by BobbyScon), but the periodic interest rate has to be calculated from an effective APR, not a nominal rate. For details, see APR in the EU and UK, where the definition is only valid for effective APR, as shown below. 2003 BMW 325i £7477 TYPICAL APR 12.9% 60 monthly payments £167.05 How does this work? See the section Calculating the Present Value of an Ordinary Annuity. The payment formula is derived from the sum of the payments, each discounted to present value. I.e. The example relates to the EU APR definition like so. Next, the second case doesn't make much sense (unless there is a downpayment). 2004 HONDA CIVIC 1.6 i-VTEC SE 5 door Hatchback £6,999 £113.15 per month "At APR 9.9% [as quoted in advert], 58 monthly payments" 58 monthly payments at 9.9% only amount to £5248.75 which is £1750.25 less than the price of the car. Finally, the first case is approximate. 2005 TOYOTA COROLLA 1.4 VVTi 5 door hatchback £7195 From £38 per week "16.1% APR typical, a 60 month payment, 260 weekly payments" A weekly payment of £38 would imply an APR of 14.3%. | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
How are the $1 salaries that CEOs sometimes take considered legal? | Taxable fringe benefits are included in taxable wages for the purpose of FLSA. So when those executives get to use company cars or company jets that value is "wage" even if it isn't salary. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
What to do with small dividends in brokerage account? | Don't sit on it, because the money does not work for you. Add more money to it and buy a stock or stocks of the company. | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
Principal 401(k) managed fund fees, wow. What can I do? | The expense fees are high, and unfortunate. I would stop short of calling it criminal, however. What you are paying for with your expenses is the management of the holdings in the fund. The managers of the fund are actively, continuously watching the performance of the holdings, buying and selling inside the fund in an attempt to beat the stock market indexes. Whether or not this is worth the expenses is debatable, but it is indeed possible for a managed fund to beat an index. Despite the relatively high expenses of these funds, the 401K is still likely your best investment vehicle for retirement. The money you put in is tax deductible immediately, your account grows tax deferred, and anything that your employer kicks in is free money. Since, in the short term, you have little choice, don't lose a lot of sleep over it. Just pick the best option you have, and occasionally suggest to your employer that you would appreciate different options in the future. If things don't change, and you have the option in the future to rollover into a cheaper IRA, feel free to take it. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
Why is early exercise generally not recommended for an in-the-money option? | The crucial insight is that the alternative to early exercise of an American call is not necessarily to hold it to expiry, but to sell it. And selling it, at its value, is always better than exercising it. Note that this holds only for options on assets that don't pay dividends. Here's the proof, using Put-Call-Parity. We know that at expiry T, we have (using a Call and a Put both struck at K): C(T) - P(T) = S(T) - K (if this is not clear to you, consider the case where S is less than, equal to, or greater than K at maturity, and go through each of them.) If the stock S doesn't pay any dividends (and there is no cost of carry etc.), we can replicate both sides now at time 0; we just buy one call, sell one put (that gives us the left hand side), buy the stock, and borrow money so that at time T we have to repay K (that gives us the right hand side). That means that now, we only need to borrow df * K, where df is the discount factor, and is less than one (assuming the good old pre-2009 world where interest rates are positive). Thus: C(0) - P(0) = S(0) - df * K. Rearranging gives: C(0) = S(0) - df * K + P(0). That's the value of the call, if we sell it (or hold it). However, if we exercise, we only get: C_ex = S(0) - K Now, we see that C(0) > C_ex, because we subtract less (df*K < K), and add P(0). | Share your insights or perspective on the financial matter presented in the input. |
Should I sell my stocks to reduce my debt? | Put yourself in this position - if you had no debts and no investments, would you borrow money at those rates to invest in the stock market? If no, then pay off the debts. If yes, then keep them. | Share your insights or perspective on the financial matter presented in the input. |
How do I get bill collectors who call about people I know to stop calling me? | If they really won't stop calling you, just waste their time. Usually the best thing I do to telemarketers (the ones that constantly call even through I've told them to stop) is to say "oh yes, I'm interested I'll just get a pen" - put them on hold and keep them on hold. Do it every time they call and soon they'll get the idea that you're a waste of time. | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
Non-qualified Savings Plan vs. 401(k) for Highly Compensated Employee | 401k plans are required to not discriminate against the non-HCE participants, and one way they achieve this is by limiting the percentage of wages that HCEs can contribute to the plan to the average annual percentage contribution by the non-HCE participants or 3% whichever is higher. If most non-HCE employees contribute only 3% (usually to capture the employer match but no more), then the HCEs are stuck with 3%. However, be aware that in companies that award year-end bonuses to all employees, many non-HCEs contribute part of their bonuses to their 401k plans, and so the average annual percentage can rise above 3% at the end of year. Some payroll offices have been known to ask all those who have not already maxed out their 401k contribution for the year (yes, it is possible to do this even while contributing only 3% if you are not just a HCE but a VHCE) whether they want to contribute the usual 3%, or a higher percentage, or to contribute the maximum possible under the nondiscrimination rules. So, you might be able to contribute more than 3% if the non-HCEs put in more money at the end of the year. With regard to NQSPs, you pretty much have their properties pegged correctly. That money is considered to be deferred compensation and so you pay taxes on it only when you receive it upon leaving employment. The company also gets to deduct it as a business expense when the money is paid out, and as you said, it is not money that is segregated as a 401k plan is. On the other hand, you have earned the money already: it is just that the company is "holding" it for you. Is it paying you interest on the money (accumulating in the NQSP, not paid out in cash or taxable income to you)? Would it be better to just take the money right now, pay taxes on it, and invest it yourself? Some deferred compensation plans work as follows. The deferred compensation is given to you as a loan in the year it is earned, and you pay only interest on the principal each year. Since the money is a loan, there is no tax of any kind due on the money when you receive it. Now you can invest the proceeds of this loan and hopefully earn enough to cover the interest payments due. (The interest you pay is deductible on Schedule A as an Investment Interest Expense). When employment ceases, you repay the loan to the company as a lump sum or in five or ten annual installments, whatever was agreed to, while the company pays you your deferred compensation less taxes withheld. The net effect is that you pay the company the taxes due on the money, and the company sends this on to the various tax authorities as money withheld from wages paid. The advantage is that you do not need to worry about what happens to your money if the company fails; you have received it up front. Yes, you have to pay the loan principal to the company but the company also owes you exactly that much money as unpaid wages. In the best of all worlds, things will proceed smoothly, but if not, it is better to be in this Mexican standoff rather than standing in line in bankruptcy court and hoping to get pennies on the dollar for your work. | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
After a stock dividend, how do you calculate holding periods for capital gains taxes? | Stock acquired through a (non-taxable) stock dividend has the same holding period as the stock on which the dividend was paid. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
Tax: 1099 paper form | You can print them on any IRS-approved paper, you don't have to use pre-printed forms. The IRS publishes specifications for paper that is approved for use for these kinds of forms (109*, W*, etc). Here's the reason why it is important: Even the slightest deviation can result in incorrect scanning, and may affect money amounts reported for employees. Note that some portions of these forms are in different color (1099-MISC copy A). This is important, and using incorrect color will affect the IRS OCR mechanisms. Forms for individuals are less complicated with regards to technical specifications, because individuals must file them, and as such any complication will unnecessarily burden the citizenry. All the 109*, W* etc forms are not legally required to be filed by all citizens. You're only required to file them if you chose to do business, or chose to employ others. As such, using professional software and special forms is a cost of doing your business, and not a tax as it would be had it been mandatory to everyone. Mistakes in individual forms due to OCR failure or something else will be noticed by the taxpayers (less/more refund, etc) or through the internal matching and cross-check. However, forms 109* and W* feed that matching and cross-check system and are considered source of truth by it, and as such their processing must be much more reliable and precise. | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
Borrowing 100k and paying it to someone then declaring bankruptcy | Note that in the UK at least this scam - not so dissimilar from what you propose - seems be perfectly legal behaviour: Evidence to date is that both of you can expect to walk away without much consequence. | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
How are credit unions initially financed | Estimated Start-Up and Operating Costs in Chartering a Credit Union notes in part: Given the significant costs involved, most groups seek grant money and non-member deposits (if pre-approved for the low-income designation) to help subsidize the pre-chartering costs and annual operating expenses. Thus, in forming the union there would be the money from members and possible grants to ensure completion of the chartering process which is how one starts a CU in the US. | Share your insights or perspective on the financial matter presented in the input. |
What is vested stock and yearly dividends? | Vesting As you may know a stock option is the right to acquire a given amount of stock at a given price. Actually acquiring the stock is referred to as exercising the option. Your company is offering you options over 200,000 shares but not all of those options can be exercised immediately. Initially you will only be able to acquire 25,000 shares; the other 175,000 have conditions attached, the condition in this case presumably being that you are still employed by the company at the specified time in the future. When the conditions attached to a stock option are satisfied that option is said to have vested - this simply means that the holder of the option can now exercise that option at any time they choose and thereby acquire the relevant shares. Dividends Arguably the primary purpose of most private companies is to make money for their owners (i.e. the shareholders) by selling goods and/or services at a profit. How does that money actually get to the shareholders? There are a few possible ways of which paying a dividend is one. Periodically (potentially annually but possibly more or less frequently or irregularly) the management of a company may look at how it is doing and decide that it can afford to pay so many cents per share as a dividend. Every shareholder would then receive that number of cents multiplied by the number of shares held. So for example in 4 years or so, after all your stock options have vested and assuming you have exercised them you will own 200,000 shares in your company. If the board declares a dividend of 10 cents per share you would receive $20,000. Depending on where you are and your exact circumstances you may or may not have to pay tax on this. Those are the basic concepts - as you might expect there are all kinds of variations and complications that can occur, but that's hopefully enough to get you started. | Share your insights or perspective on the financial matter presented in the input. |
How do historically low interest rates affect real estate prices? | Interest rates do generally affect house prices but other factors do too, especially the unemployment rate. However, everything else being equal, when interest rates drop, it makes the borrowing of money cheaper so tends to stimulate the economy and the housing market, increasing the demand for houses and generally causes house prices to increase (especially if the supply of new housing doesn't increase with the demand). When interest rates go up the opposite happens. Usually interest rates go down in order to stimulate a slowing economy and interest rates go up to slow down an overheated economy. Regarding your situation you are able to get a 30 year fixed rate at today’s interest rates (in Australia the longest fixed rate you can get is for 10 years and the rate is usually 1 or 2 percent higher than the standard variable rate. Most people here go for the variable rate or a fixed rate of between 1 to 3 years). This means that even if rates do go up in the future you won't be paying a higher rate, which is a positive for you. You are buying the house to live in so as long as you can keep making the repayments you should not be too worried if the price of the house drops sometime in the future, because if your house has dropped and you want to sell to buy another house to live in, then that house would have also dropped relative to yours (give or take). So your main worry is that rates will go up causing both house prices to fall and unemployment to rise, and you yourself losing your job and eventually your house. It is a risk, but what you need to consider is if you can manage that risk. Firstly, I believe rates won't be going up in the US for a number of years, and if and when they do start going up they will most probably start going up slowly. So you have some time on your side. Secondly, what can you do between now and when interest rates do start going up in a few years: Try to put more saving away to increase your safety net from 6 months to 12 months or more, or make extra repayments into your home loan so that you are ahead if things do go wrong. If you are worried that you could lose your job, what can you do to reduce your chances of losing your job or increasing your chances of getting a new job quickly if you do lose it? Improve your current skills, get new skills, become an invaluable employee, or look at possible opportunities to start your own business. Do your own research on the types of houses you are looking at buying, the more houses you look at the better prepared you will be when the right house at the right price comes along, and the less chance that you will be rushed into buying what might be an overpriced house. So to sum it up; do as much research as you can, have an understanding of what your risks are and how you are going to manage those risks. | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
Thrift Saving Plan (TSP) Share Price Charts | If you're looking to generate your own charts, you can get up-to-date TSP fund share prices in a Google Docs spreadsheet by "scraping" the data from the HTML of certain TSP webpages. You'll need to do this because the GoogleFinance function does not recognize "private" funds or collective trusts like those of the TSP. See this thread for tips: Bogleheads • View topic - GoogleFinance price quotes for TSP Funds | Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open. |
Canceling credit cards - insurance rate increase? | Your credit score can be part of the algorithm for setting your rates for auto insurance. It is one of many factors including sex, age, zip code, driving record, type of car... There are some states that are concerned about using credit scores, some sates have passed legislation regarding this issue | Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering |
What are the best software tools for personal finance? | Money Manager Ex PROS: CONS | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
Where I can find the exact time when a certain company's stock will be available in the secondary market? | Twitter is planning to go public on NYSE. You'll be able to start trading once the stock is listed for trading, which would be the day of the IPO. Note that since you're trading on the secondary market, you won't be able to buy at the IPO prices, whatever the time is. You're buying from someone who bought at IPO price. | Share your insights or perspective on the financial matter presented in the input. |
Buying insurance (extended warranty or guarantee) on everyday goods / appliances? | I politely decline. Insurance is there to protect me against catastrophic financial loss (huge medical bills, owing a mortgage on a house that burned down, etc.) not a way to game the system and pay for routine expenses or repairs. | Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering |
My friend wants to put my name down for a house he's buying. What risks would I be taking? | The risk is that you will owe the bank the principal amount of the mortgage. Based on your question it would be foolish for you to sign. Anyone who describes a mortgage as "something" obviously has no idea what they are doing and should never sign a mortgage which is a promise to pay hundreds of thousands of dollars. You would be doubly foolish to sign the mortgage because if you are guaranteeing the loan, you own nothing. So, for example, if your friend sold the house, pocketed the money, then left the country you would owe the full amount of the mortgage. Since you are not on the deed there is no way you can prevent this from happening. He does not need your approval to sell the house. So, essentially what your "friend" is doing is asking you to assume all the risk of the mortgage with none of the benefits, since he gets the house, not you. If a "girlfriend" is involved, that just increases the risk you will have a problem. Also, although it is not clear, it appears this is a second house for him. If so, that disqualifies him from any mortgage assistance or relief, so the risk is even higher. Basically, it would foolish in the extreme to co-sign the loan. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
Suitable Vanguard funds for a short-term goal (1-2 years) | 1-2 years is very short-term. If you know you will need the money in that timeframe and cannot risk losing money because of a stock market correction, you should stay away from equities (stocks). A short-term bond fund (like VBISX) will pay around 1%, maybe a bit more, and only has a small amount of risk. Money Market funds are practically risk-free (technically speaking they can lose money, but it's extremely rare) but rates of return are dismal. It's hard to get bigger returns without taking on more risk. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
Buying & Selling Call Options | You're correct. If you have no option position at execution then you carry no risk. Your risk is only based on the net number of options you're holding at execution. This is handled by your broker or clearinghouse. Pretend that you wrote 1000 options, (you're short the call) then you bought 1000 of the same option (bought to cover) ... you are now flat and have zero options exposure. Pretend you bought 1000 options (you're long the calls) then you sold 1000 of them (liquidated your long) ... you are now flat and have zero options exposure. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
Is there any reason not to put a 35% down payment on a car? | I suggest you to apply for a car loan in other banks like DCU or wells fargo, you might get the loan with not the best rate, but after a year you can refinance your loan with a better rate in a different bank since you are going to have a better credit as long as you make your payments in time. I bought a Jetta 2014 last year, my loan is from Wells Fargo. Like you, my credit was low before the loan because I didn't have too much credit history. They gave me the loan with a 8.9% of interest. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
Why should a company go public? | The reason to go public is to get money. Not to be snarky, but your question is like asking, "Why should a company try to sell its products, when if they just piled them up in a warehouse they wouldn't have to worry about shipping and customer complaints and collecting sales tax?" The answer, of course, is because they want the money. Sure, there are disadvantages to going public, like more regulation, required financial disclosures, and having to answer to stockholders. That's the price you pay for accepting money from people. They're not going to give you money for nothing. | Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited. |
Can written options be exercised against you prior to expiry when they become “in-the-money”? | Yes, if it's an American style option. American style options may be exercised at any time prior to expiration (even if they're not in-the-money). Generally, you are required to deliver or accept delivery of the underlying by the beginning of the next trading day. If you are short, you may be chosen by the clearinghouse to fulfill the exercise (a process called "assignment"). Because the clearinghouse is the counter-party to every options trade, you can be assigned even if the specific person who purchased the option you wrote didn't exercise, but someone else who holds a long position did. Similarly, you might not be assigned if that person did exercise. The clearinghouse randomly chooses a brokerage to fulfill an assignment, and the brokerage will randomly choose an individual account. If you're going to be writing options, especially using spreads, you need to have a plan ahead of time on what to do if one of your legs gets assigned. This is more likely to happen just before a dividend payment, if the payment is more than the remaining time value. | Share your insights or perspective on the financial matter presented in the input. |
Any difference between buying a few shares of expensive stock or a bunch of cheap stock | 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. | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
Why have U.S. bank interest rates been so low for the past few years? | I've wondered the same thing. And, after reading the above replies, I think there is a simpler explanation. It goes like this. When the bank goes to make a loan they need capital to do it. So, they can get it from the federal reserve, another bank, or us. Well, if the federal reserve will loan it to them for lets say 0.05%, what do you think they are going to be willing to pay us? Id say maybe 0.04%. Anyway, I could be wrong, but this makes sense to me. | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
Moving Coin Collection to Stapled Coin Pockets | I would be wary of having coins in containers with cardboard. Ideally you want the coins to be in an airtight envelope made of plastic to minimize any chance of oxidation or reaction with chemicals in the air. Cheap, retail coins like you would find in a Whitman collection are not generally going to hold value well. Sometimes you can sell a collection and break even if you have a nice complete set, but in general VF coins with common dates will not appreciate at all. Investment coins usually are high-priced items that sell for thousands each, not the sort thing you find in Whitman folders. In general, collectibles are bad investments in the US because IRS rules tax gains as ordinary income. So, unless you sell them under the table or have really low income, you lose a lot of your profit. If you enjoy collecting, focus on the fun of it, worrying about investment in coin collections is a joy killer. A Parting Anecdote... When I was a kid I painstakingly assembled a lot of BU rolls, because that was the hot thing back then. I wrote on them "DO NOT OPEN FOR 10 YEARS". You know how much a 1980 BU roll of Lincoln cents is worth now, 40 years later? $2.00 on eBay. Some days I spend more on lunch than the worth of my entire Lincoln cent collection. | Offer your thoughts or opinion on the input financial query or topic using your financial background. |
How will I pay for college? | There are some useful comments about the tradeoffs of the decisions in front of you. Intertwined with the financial choices, hopefully you can see a map opening up. Make a little chart if it helps. Benefit and Cost. If you're looking for financial options, you will have to also add more columns to that chart: Option and Cost. An example is the comment on making connections with rich kids. Trust fund babies are everywhere in this country. Did you know any rich kids while growing up? How were those rich kids you knew of back then... in your school... in your town? How did they treat you? Were you ever invited to their parties or gatherings? Now there's an opportunity for the privilege to pay a lot of money to sit in a classroom next to them? Even in the early days of American history with merit based millionaires... tycoons who made it rich by the seat of their pants. At fancy dinner parties and soirees, a new term emerged to put each other again out of reach: old money (the deserving) and new money (uncultured climbers). That's my bias. You'll have some of your own. What is important to YOU has to come through because these days, the price tag of any higher education implies a considerable piece of your life's timeline will be committed to... something. Make sure you get what you feel is worth that commitment. Take stock of what has been said here by the others, but put a value on those choices and seriously consider what you're willing to pay for... and what you're not. There is no formula for your success as there's been thousands of exceptions... ESID (Every Situation is Different). | Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering |
Re-financing/consolidating multiple student loans for medical school? | Actually, a few lenders now will offer a consolidation loan that will consolidate both Federal and private student loans. One example is Cedar Ed, http://cedaredlending.com/PrivateConsolidationLoan.htm | Share your insights or perspective on the financial matter presented in the input. |