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df6cf504eba5c7dfbf136ce2b8aab49a
|
Is there a general guideline for what percentage of a portfolio should be in gold?
|
[
{
"docid": "a39e6c7e315edaca02de2944834706e6",
"text": "I think most financial planners or advisors would allocate zero to a gold-only fund. That's probably the mainstream view. Metals investments have a lot of issues, more elaboration here: What would be the signs of a bubble in silver? Also consider that metals (and commodities, despite a recent drop) are on a big run-up and lots of random people are saying they're the thing to get in on. Usually this is a sign that you might want to wait a bit or at least buy gradually. The more mainstream way to go might be a commodities fund or all-asset fund. Some funds you could look at (just examples, not recommendations) might include several PIMCO funds including their commodity real return and all-asset; Hussman Strategic Total Return; diversified commodities index ETFs; stuff like that has a lot of the theoretical benefits of gold but isn't as dependent on gold specifically. Another idea for you might be international bonds (or stocks), if you feel US currency in particular is at risk. Oh, and REITs often come up as an inflation-resistant asset class. I personally use diversified funds rather than gold specifically, fwiw, mostly for the same reason I'd buy a fund instead of individual stocks. 10%-ish is probably about right to put into this kind of stuff, depending on your overall portfolio and goals. Pure commodities should probably be less than funds with some bonds, stocks, or REITs, because in principle commodities only track inflation over time, they don't make money. The only way you make money on them is rebalancing out of them some when there's a run up and back in when they're down. So a portfolio with mostly commodities would suck long term. Some people feel gold's virtue is tangibility rather than being a piece of paper, in an apocalypse-ish scenario, but if making that argument I think you need physical gold in your basement, not an ETF. Plus I'd argue for guns, ammo, and food over gold in that scenario. :-)",
"title": ""
},
{
"docid": "a45d86720144171e1b19179224fec645",
"text": "It depends on what your goals are, your age, how much debt you have, etc. Assuming -- and we all know what happens when you assume -- that your financial life is otherwise in order, the 5% to 10% range you're talking about isn't overinvesting. You won't have a lot of company; most people don't own any. One comment on this part: I have some gold (GLD), but not much ... Gold and GLD are not the same thing at all. Owning shares of the SPDR Gold Trust is not the same thing as owning gold coins or bars. You're achieving different ends by owning GLD shares as opposed to the physical yellow metal. GLD will follow the spot price of gold pretty closely, but it isn't the same thing as physical ownership.",
"title": ""
},
{
"docid": "fdc8b26879a2340e97a9b043f7e3f155",
"text": "My personal gold/metals target is 5.0% of my retirement portfolio. Right now I'm underweight because of the run up in gold/metals prices. (I haven't been selling, but as I add to retirement accounts, I haven't been buying gold so it is going below the 5% mark.) I arrived at this number after reading a lot of different sample portfolio allocations, and some books. Some people recommend what I consider crazy allocations: 25-50% in gold. From what I could figure out in terms of modern portfolio theory, holding some metal reduces your overall risk because it generally has a low correlation to equity markets. The problem with gold is that it is a lousy investment. It doesn't produce any income, and only has costs (storage, insurance, commissions to buy/sell, management of ETF if that's what you're using, etc). The only thing going for it is that it can be a hedge during tough times. In this case, when you rebalance, your gold will be high, you'll sell it, and buy the stocks that are down. (In theory -- assuming you stick to disciplined rebalancing.) So for me, 5% seemed to be enough to shave off a little overall risk without wasting too much expense on a hedge. (I don't go over this, and like I said, now I'm underweighted.)",
"title": ""
},
{
"docid": "4d7d32aa6bacabb609be5bda2008d0c4",
"text": "By mentioning GLD, I presume therefore you are referring to the SPRD Gold Exchange Traded Fund that is intended to mirror the price of gold without you having to personally hold bullion, or even gold certificates. While how much is a distinctly personal choice, there are seemingly (at least) three camps of people in the investment world. First would be traditional bond/fixed income and equity people. Gold would play no direct role in their portfolio, other than perhaps holding gold company shares in some other vehicle, but they would not hold much gold directly. Secondly, at the mid-range would be someone like yourself, that believes that is in and of itself a worthy investment and makes it a non-trivial, but not-overriding part of their portfolio. Your 5-10% range seems to fit in well here. Lastly, and to my taste, over-the-top, are the gold-gold-gold investors, that seem to believe it is the panacea for all market woes. I always suspect that investment gurus that are pushing this, however, have large positions that they are trying to run up so they can unload. Given all this, I am not aware of any general rule about gold, but anything less than 10% would seem like at least a not over-concentration in the one area. Once any one holding gets much beyond that, you should really examine why you believe that it should represent such a large part of your holdings. Good Luck",
"title": ""
},
{
"docid": "fce119d437797fae452a931d307b949c",
"text": "10% is way high unless you really dedicate time to managing your investments. Commodities should be a part of the speculative/aggressive portion of your portfolio, and you should be prepared to lose most or all of that portion of your portfolio. Metals aren't unique enough to justify a specific allocation -- they tend to perform well in a bad economic climate, and should be evaluated periodically. The fallacy in the arguments of gold/silver advocates is that metals have some sort of intrinsic value that protects you. I'm 32, and remember when silver was $3/oz, so I don't know how valid that assertion is. (Also recall the 25% price drop when the CBOE changed silver's margin requirements.)",
"title": ""
},
{
"docid": "701044a51a7f47011eb598f92c1ca560",
"text": "Gold's valuation is so stratospheric right now that I wonder if negative numbers (as in, you should short it) are acceptable in the short run. In the long run I'd say the answer is zero. The problem with gold is that its only major fundamental value is for making jewelry and the vast majority is just being hoarded in ways that can only be justified by the Greater Fool Theory. In the long run gold shouldn't return more than inflation because a pile of gold creates no new wealth like the capital that stocks are a claim on and doesn't allow others to create new wealth like money lent via bonds. It's also not an important and increasingly scarce resource for wealth creation in the global economy like oil and other more useful commodities are. I've halfway-thought about taking a short position in gold, though I haven't taken any position, short or long, in gold for the following reasons: Straight up short-selling of a gold ETF is too risky for me, given its potential for unlimited losses. Some other short strategy like an inverse ETF or put options is also risky, though less so, and ties up a lot of capital. While I strongly believe such an investment would be profitable, I think the things that will likely rise when the flight-to-safety is over and gold comes back to Earth (mainly stocks, especially in the more beaten-down sectors of the economy) will be equally profitable with less risk than taking one of these positions in gold.",
"title": ""
},
{
"docid": "0c8627953291d60451d67d6a78b00468",
"text": "\"The \"\"conventional wisdom\"\" is that you should have about 5% of your portfolio in gold. But that's an AVERAGE. Meaning that you might want to have 10% at some times (like now) and 0% in the 1980s. Right now, the price of gold has been rising, because of fears of \"\"easing\"\" Fed monetary policy (for the past decade), culminating in recent \"\"quantitative easing.\"\" In the 1980s, you should have had 0% in gold given the fall of gold in 1981 because of Paul Volcker's monetary tightening policies, and other reasons. Why did gold prices drop in 1981? And a word of caution: If you don't understand the impact of \"\"quantitative easing\"\" or \"\"Paul Volcker\"\" on gold prices, you probably shouldn't be buying it.\"",
"title": ""
}
] |
[
{
"docid": "f047a86a26ffe9decad612ab2b5ed4e0",
"text": "Note the above is only for shares. There are different rules for other assets like House, Jewellery, Mutual Funds, Debt Funds. Refer to the Income Tax guide for more details.",
"title": ""
},
{
"docid": "ce9537c51f2349ef3b2921eeeec8a658",
"text": "It's all about risk. These guidelines were all developed based on the risk characteristics of the various asset categories. Bonds are ultra-low-risk, large caps are low-risk (you don't see most big stocks like Coca-Cola going anywhere soon), foreign stocks are medium-risk (subject to additional political risk and currency risk, especially so in developing markets) and small-caps are higher risk (more to gain, but more likely to go out of business). Moreover, the risks of different asset classes tend to balance each other out some. When stocks fall, bonds typically rise (the recent credit crunch being a notable but temporary exception) as people flock to safety or as the Fed adjusts interest rates. When stocks soar, bonds don't look as attractive, and interest rates may rise (a bummer when you already own the bonds). Is the US economy stumbling with the dollar in the dumps, while the rest of the world passes us by? Your foreign holdings will be worth more in dollar terms. If you'd like to work alternative asset classes (real estate, gold and other commodities, etc) into your mix, consider their risk characteristics, and what will make them go up and down. A good asset allocation should limit the amount of 'down' that can happen all at once; the more conservative the allocation needs to be, the less 'down' is possible (at the expense of the 'up'). .... As for what risks you are willing to take, that will depend on your position in life, and what risks you are presently are exposed to (including: your job, how stable your company is and whether it could fold or do layoffs in a recession like this one, whether you're married, whether you have kids, where you live). For instance, if you're a realtor by trade, you should probably avoid investing too much in real estate or it'll be a double-whammy if the market crashes. A good financial advisor can discuss these matters with you in detail.",
"title": ""
},
{
"docid": "aa90a5bbfd6d0baf7ace26b24986c434",
"text": "\"The topic you are apparently describing is \"\"safe withdrawal rates\"\", more here. Please, note that the asset allocation is crucial decision with your rates. If you continue to keep a lot in cash, you cannot withdraw too much money \"\"to live and to travel\"\" because the expected return from cash is too low in the long run. In contrast, if you moved to more sensible decision like 30% bonds and 70% world portfolio -- the rates will me a lot different. As you are 30 years old, you could pessimist suppose to live next 100 years -- then your possible withdrawal rates would be much lower than let say over 50 years. Anyway besides deciding asset allocation, you need to estimate the time over which you need your assets. You have currently 24% in liquid cash and 12% in bonds but wait you use the word \"\"variety of funds\"\" with about 150k USD, what are they? Do you have any short-term bonds or TIPS as inflation hedge? Do you miss small and value? What is your sector allocation between small-med-large and value-blend-growth? If you are risk-averse, you could add some value small. Read the site, it does much better job than any question-answer site can do (the link above).\"",
"title": ""
},
{
"docid": "71e043e167ce5c8f12c06fbd1e32f7b6",
"text": "\"I was able to find a fairly decent index that trades very close to 1/10th the actual price of gold by the ounce. The difference may be accounted to the indexes operating cost, as it is very low, about 0.1%. The index is the ETFS Gold Trust index (SGOL). By using the SGOL index, along with a Standard Brokerage investment account, I was able to set up an investment that appropriately tracked my gold \"\"shares\"\" as 10x their weight in ounces, the share cost as 1/10th the value of a gold ounce at the time of purchase, and the original cost at time of purchase as the cost basis. There tends to be a 0.1% loss every time I enter a transaction, I'm assuming due to the index value difference against the actual spot value of the price of gold for any day, probably due to their operating costs. This solution should work pretty well, as this particular index closely follows the gold price, and should reflect an investment in gold over a long term very well. It is not 100% accurate, but it is accurate enough that you don't lose 2-3% every time you enter a new transaction, which would skew long-term results with regular purchases by a fair amount.\"",
"title": ""
},
{
"docid": "08cec8c13d6cc51c6f85f6b481c17691",
"text": "Owning physical gold (assuming coins): Owning gold through a fund:",
"title": ""
},
{
"docid": "b814e2e4f943f77864610939f302e619",
"text": "\"I find it interesting that you didn't include something like [Total Bond Market](http://stockcharts.com/freecharts/perf.html?VBMFX), or [Intermediate-Term Treasuries](http://stockcharts.com/freecharts/perf.html?VBIIX), in your graphic. If someone were to have just invested in the DJI or SP500, then they would have ignored the tenants of the Modern Portfolio Theory and not diversified adequately. I wouldn't have been able to stomach a portfolio of 100% stocks, commodities, or metals. My vote goes for: 1.) picking an asset allocation that reflects your tolerance for risk (a good starting point is \"\"age in bonds,\"\" i.e. if you're 30, then hold 30% in bonds); 2.) save as if you're not expecting annualized returns of %10 (for example) and save more; 3.) don't try to pick the next winner, instead broadly invest in the market and hold it. Maybe gold and silver are bubbles soon to burst -- I for one don't know. I don't give the \"\"notion in the investment community\"\" much weight -- as it always is, someday someone will be right, I just don't know who that someone is.\"",
"title": ""
},
{
"docid": "2865984a64db25a71c7b3f2c57f1afc5",
"text": "\"Your plan already answers your own question in the best possible way: If you want to be able to make the most possible profit from a large downward move in a stock (in this case, a stock that tracks gold), with a limited, defined risk if there is an upward move, the optimal strategy is to buy a put option. There are a few Exchange Traded Funds (ETFs) that track the price of gold. think of them as stocks that behave like gold, essentially. Two good examples that have options are GLD and IAU. (When you talk about gold, you'll hear a lot about futures. Forget them, for now. They do the same essential thing for your purposes, but introduce more complexity than you need.) The way to profit from a downward move without protection against an upward move is by shorting the stock. Shorting stock is like the opposite of buying it. You make the amount of money the stock goes down by, or lose the amount it goes up by. But, since stocks can go up by an infinite amount, your possible loss is unlimited. If you want to profit on a large downward move without an unlimited loss if you're wrong and it goes up, you need something that makes money as the stock drops, but can only lose so much if it goes up. (If you want to be guaranteed to lose nothing, your best investment option is buying US Treasuries, and you're technically still exposed to the risk that US defaults on its debt, although if you're a US resident, you'll likely have bigger problems than your portfolio in that situation.) Buying a put option has the exact asymmetrical exposure you want. You pay a limited premium to buy it, and at expiration you essentially make the full amount that the stock has declined below the strike price, less what you paid for the option. That last part is important - because you pay a premium for the option, if it's down just a little, you might still lose some or all of what you paid for it, which is what you give up in exchange for it limiting your maximum loss. But wait, you might say. When I buy an option, I can lose all of my money, cant I? Yes, you can. Here's the key to understanding the way options limit risk as compared to the corresponding way to get \"\"normal\"\" exposure through getting long, or in your case, short, the stock: If you use the number of options that represent the number of shares you would have bought, you will have much, much less total money at risk. If you spend the same \"\"bag 'o cash\"\" on options as you would have spent on stock, you will have exposure to way more shares, and have the same amount of money at risk as if you bought the stock, but will be much more likely to lose it. The first way limits the total money at risk for a similar level of exposure; the second way gets you exposure to a much larger amount of the stock for the same money, increasing your risk. So the best answer to your described need is already in the question: Buy a put. I'd probably look at GLD to buy it on, simply because it's generally a little more liquid than IAU. And if you're new to options, consider the following: \"\"Paper trade\"\" first. Either just keep track of fake buys and sells on a spreadsheet, or use one of the many online services where you can track investments - they don't know or care if they're real or not. Check out www.888options.com. They are an excellent learning resource that isn't trying to sell you anything - their only reason to exist is to promote options education. If you do put on a trade, don't forget that the most frustrating pitfall with buying options is this: You can be basically right, and still lose some or all of what you invest. This happens two ways, so think about them both before you trade: If the stock goes in the direction you think, but not enough to make back your premium, you can still lose. So you need to make sure you know how far down the stock has to be to make back your premium. At expiration, it's simple: You need it to be below the strike price by more than what you paid for the option. With options, timing is everything. If the stock goes down a ton, or even to zero - free gold! - but only after your option expires, you were essentially right, but lose all your money. So, while you don't want to buy an option that's longer than you need, since the premium is higher, if you're not sure if an expiration is long enough out, it isn't - you need the next one. EDIT to address update: (I'm not sure \"\"not long enough\"\" was the problem here, but...) If the question is just how to ensure there is a limited, defined amount you can lose (even if you want the possible loss to be much less than you can potentially make, the put strategy described already does that - if the stock you use is at $100, and you buy a put with a 100 strike for $5, you can make up to $95. (This occurs if the stock goes to zero, meaning you could buy it for nothing, and sell it for $100, netting $95 after the $5 you paid). But you can only lose $5. So the put strategy covers you. If the goal is to have no real risk of loss, there's no way to have any real gain above what's sometimes called the \"\"risk-free-rate\"\". For simplicity's sake, think of that as what you'd get from US treasuries, as mentioned above. If the goal is to make money whether the stock (or gold) goes either up or down, that's possible, but note that you still have (a fairly high) risk of loss, which occurs if it fails to move either up or down by enough. That strategy, in its most common form, is called a straddle, which basically means you buy a call and a put with the same strike price. Using the same $100 example, you could buy the 100-strike calls for $5, and the 100-strike puts for $5. Now you've spent $10 total, and you make money if the stock is up or down by more than $10 at expiration (over 110, or under 90). But if it's between 90 and 100, you lose money, as one of your options will be worthless, and the other is worth less than the $10 total you paid for them both.\"",
"title": ""
},
{
"docid": "100c16089b98c6da4bdec9e3d52ba91b",
"text": "\"The raw question is as follows: \"\"You will be recommending a purposed portfolio to an investment committee (my class). The committee runs a foundation that has an asset base of $4,000,000. The foundations' dual mandates are to (a) preserve capital and (b) to fund $200,000 worth of scholarships. The foundation has a third objective, which is to grow its asset base over time.\"\" The rest of the assignment lays out the format and headings for the sections of the presentation. Thanks, by the way - it's an 8 week accelerated course and I've been out sick for two weeks. I've been trying to teach myself this stuff, including the excel calculations for the past few weeks.\"",
"title": ""
},
{
"docid": "f5fb93b7a5cd0209d2b227983b37eb21",
"text": "Most people carry a diversity of stock, bond, and commodities in their portfolio. The ratio and types of these investments should be based on your goals and risk tolerance. I personally choose to manage mine through mutual funds which combine the three, but ETFs are also becoming popular. As for where you keep your portfolio, it depends on what you're investing for. If you're investing for retirement you are definitely best to keep as much of your investment as possible in 401k or IRAs (preferably Roth IRAs). Many advisers suggest contributing as much to your 401k as your company matches, then the rest to IRA, and if you over contribute for the IRA back to the 401k. You may choose to skip the 401k if you are not comfortable with the choices your company offers in it (such as only investing in company stock). If you are investing for a point closer than retirement and you still want the risk (and reward potential) of stock I would suggest investing in low tax mutual funds, or eating the tax and investing in regular mutual funds. If you are going to take money out before retirement the penalties of a 401k or IRA make it not worth doing. Technically a savings account isn't investing, but rather a place to store money.",
"title": ""
},
{
"docid": "54d0a04493a4b5b0306b714af1d5f04c",
"text": "\"I think Swenson's insight was that the traditional recommendation of 60% stocks plus 40% bonds has two serious flaws: 1) You are exposed to way too much risk by having a portfolio that is so strongly tied to US equities (especially in the way it has historically been recommend). 2) You have too little reward by investing so much of your portfolio in bonds. If you can mix a decent number of asset classes that all have equity-like returns, and those asset classes have a low correlation with each other, then you can achieve equity-like returns without the equity-like risk. This improvement can be explicitly measured in the Sharpe ratio of you portfolio. (The Vanguard Risk Factor looks pretty squishy and lame to me.) The book the \"\"The Ivy Portfolio\"\" does a great job at covering the Swenson model and explains how to reasonably replicate it yourself using low fee ETFs.\"",
"title": ""
},
{
"docid": "1ea028386d7b77f54bba0eb3c5e18b8c",
"text": "With gold at US$1300 or so, a gram is about $40. For your purposes, you have the choice between the GLD ETF, which represents a bit less than 1/10oz gold equivalent per share, or the physical metal itself. Either choice has a cost: the commission on the buy plus, eventually, the sale of the gold. There may be ongoing fees as well (fund fees, storage, etc.) GLD trades like a stock and you can enter limit orders or any other type of order the broker accepts.",
"title": ""
},
{
"docid": "159fd918e0c65f68e6529b8c7b2f5907",
"text": "I found a comparison of stock and bond returns. The relevant portion here is that bonds went up by 10% in 2007 and 20% in 2008 (32% compounded). Stocks were already recovering in 2009, going up almost 26%. You don't mention what you were hoping to get from your gold investment, but bonds gave a very good return for those two years.",
"title": ""
},
{
"docid": "2fa005e6b96c5bef7f326c418e9c9f03",
"text": "Putting 64% of a portfolio in gold and silver is pretty reckless from an investing standpoint. That being said, if he really did buy most of the stocks in 2002, he's probably made a good deal of money off these picks.",
"title": ""
},
{
"docid": "7e769761effd1d77533856624ea79940",
"text": "If you have 100% of your money in one security that is inherently more risky than splitting your money 50/50 between two securities, regardless of the purported riskiness of the two securities. The calculations people use to justify their particular breed of diversification may carry some assumptions related risk/reward calculations. But these particular justifications don't change the fact that spreading your money across different assets protects your money from value variances of the individual assets. Splitting your $100 between Apple and Microsoft stock is probably less valuable (less well diversified) than splitting your money between Apple and Whole Foods stock but either way you're carrying less risk than putting all $100 in to Apple stock regardless of the assumed rates of return for any of these companies stock specifically. Edit: I'm sure the downvotes are because I didn't make a big deal about correlation and measuring correlation and standard deviations of returns and detailed portfolio theory. Measuring efficacy and justifying your particular allocations (that generally uses data from the past to project the future) is all well and good. Fact of the matter is, if you have 100% of your money in stock that's more stock risk than 25% in cash, 25% in bonds and 50% in stock would be because now you're in different asset classes. You can measure to your hearts delight the effects of splitting your money between different specific companies, or different industries, or different market capitalizations, or different countries or different fund managers or different whatever-metrics and doing any of those things will reduce your exposure to those specific allocations. It may be worth pointing out that currently the hot recommendation is a plain vanilla market tracking S&P 500 index fund (that just buys some of each of the 500 largest US companies without any consideration given to risk correlation) over standard deviation calculating actively managed funds. If you ask me that speaks volumes of the true efficacy of hyper analyzing the purported correlations of various securities.",
"title": ""
},
{
"docid": "1e9cebde4465fbb20cb434e8b71958d4",
"text": "First, a margin account is required to trade options. If you buy a put, you have the right to deliver 100 shares at a fixed price, 50 can be yours, 50, you'll buy at the market. If you sell a put, you are obligated to buy the shares if put to you. All options are for 100 shares, I am unaware of any partial contract for fewer shares. Not sure what you mean by leveraging the position, can you spell it out more clearly?",
"title": ""
}
] |
fiqa
|
94cdb709264dd8748426012b156f5139
|
Is keeping old credit cards and opening new credit cards with high limits and never using an ideal way to boost credit scores?
|
[
{
"docid": "507f0484eeed35cce069afeba03b1ac3",
"text": "Problems with your plan (in no particular order) there is a limit, once they have decided that you have enough credit they won't offer any more. If the economy changes (like it did in 2008) they can reduce the limit on existing accounts. If you don't use them, they may decide to close them. Using existing cards will encourage the bank to increase the limit on that card. opening cards can make some lenders nervous. Having a new card close to when you are applying for a mortgage or a car loan can make them less likely to lend you the max. You have to decide: Are you trying to buildup your credit limit? or your credit score?",
"title": ""
},
{
"docid": "312d32a49042514a7405bb87a35c97c5",
"text": "I disagree with the reply. Your both impressions are correct. - Do not close old credit cards because they keep your credit rating high (fico score) - Also low utilization that credit cards report to credit rating companies, improves your rating.",
"title": ""
},
{
"docid": "4e12985a2b089ca2dbf9acd99f2efcad",
"text": "Your plan will work to increase your total credit capacity (good for your credit score) and reduce your utilization (also good). As mentioned, you will need to be careful to use these cards periodically or they will get closed, but it will work. The question is whether this will help you or not. In addition to credit capacity and utilization, your credit score looks at things like These factors may hurt you as you continue to open accounts. You can easily get to the stage where your score is not benefitting much from increased capacity and it is getting hurt a lot by pulls and low average age. BTW you are correct that closing accounts generally hurts your score. It probably reduces average age, may reduce maximum age, reduces your capacity, and increases your utilization.",
"title": ""
}
] |
[
{
"docid": "cafbe9188cfb9191ff583501456891b8",
"text": "The biggest risk is Credit Utilization rate. If you have a total of $10,000 in revolving credit (ie: credit card line) and you ever have more than 50% (or 33% to be conservative) on the card at any time then your credit score will be negatively impacted. This will be a negative impact even if you charge it on day one and pay it off in full on day 2. Doesn't make much sense but credit companies are playing the averages: on average they find that people who get close to maxing their credit limit are in some sort of financial trouble. You're better off to make small purchases each month, under $100, and pay them off right away. That will build a better credit history - and score.",
"title": ""
},
{
"docid": "ce31e7752ac62c2cb7cf8c6e0c236329",
"text": "Simply staying out of debt is not a good way of getting a good credit score. My aged aunt has never had a credit card, loan or mortgage, has always paid cash or cheque for everything, never failed to pay her utility bills on time. Her credit score is lousy because she has never had any debts to pay off so there is no credit history data for her. To the credit checking agencies she barely exists. To get a good score (UK) then get a few debts and pay them off on time.",
"title": ""
},
{
"docid": "06bf8bf93411127d8d15780505471b29",
"text": "I have found that between the Discover card and a Visa/Master Card a person has everything covered. In my case the Discover card had the best deal (cash back) and the Visa/Master Card took care of those times a vendor didn't take Discover. One big Box store (Costco) did trip us up, so we did end up getting an American Express card. But Costco is dropping that requirement in 2016. One advantage of only having a few cards is that the increase in your total credit line will be split among fewer cards. In your question the highest max limit on one card is $2500, what will you do if you have to take a flight at the last minute and the Airline ticket is more than that? If you need a higher limit, ask for one of your existing cards to raise it; don't go out and get another card. If you see that one of the companies that you already have a card with has a better card, you can ask them to convert your account to that better card. Yes higher total limit does help your utilization ratio portion of the score. But there is some opinion that they also look at the utilization ratio per card. So hitting one card to nearly the max can hurt your score. Three caveats about the number of cards:",
"title": ""
},
{
"docid": "02438e9bb394de18945773d7b7842e30",
"text": "The only drawback is if you spend more than you can with the new limit and end up having to pay interest if you can't pay the balance in full. Other than that, there are no drawbacks to getting a credit increase. On the flip side, it's actually good for you. It shows that the banks trust you with more credit, and it also decreases your credit utilization ratio (assuming you spend the same).",
"title": ""
},
{
"docid": "87fc1ee3130e6d1f7b2378deb7fb8c8c",
"text": "Credit scoring has changed recently and the answer to this question will have slightly changed. While most points made here are true: But now (as of July 2017) it is possible having a large available credit balance can negatively effect your credit score directly: ... VantageScore will now mark a borrower negatively for having excessively large credit card limits, on the theory that the person could run up a high credit card debt quickly. Those who have prime credit scores may be hurt the most, since they are most likely to have multiple cards open. But those who like to play the credit card rewards program points game could be affected as well. source",
"title": ""
},
{
"docid": "c04766bd3dd7726caf75ff1eeab53a63",
"text": "\"Your use of the term \"\"loan\"\" is confusing, what you're proposing is to open a new card and take advantage of the 0% APR by carrying a balance. The effects to your credit history / score will be the following:\"",
"title": ""
},
{
"docid": "71e65b915ad5bd6b5e9fba34bd64e114",
"text": "The whole point of a credit report and, by extension, a credit score, is to demonstrate (and judge) your ability to repay borrowed funds. Everything stems from that goal; available credit, payment history, collections, etc all serve to demonstrate whether or not you personally are a good investment for lenders to pursue. Revolving credit balances are tricky because they are more complicated than fixed loans (for the rest of this answer, I'll just talk about credit cards, though it also applies to lines of credit such as overdraft protection for checking accounts, HELOCs, and other such products). Having a large available balance relative to your income means that at any time you could suddenly drown yourself in debt. Having no credit cards means you don't have experience managing them (and personal finances are governed largely by behavior, meaning experience is invaluable). Having credit cards but carrying a high balance means you know how to borrow money, but not pay it back. Having credit cards but carrying no balance means you don't know how to borrow money (or you don't trust yourself to pay it back). Ideally, lenders will see a pattern of you borrowing a portion of the available credit, and then paying it down. Generally that means utilizing up to 30% of your available credit. Even if you maintain the balance in that range without paying it off completely, it at least shows that you have restraint, and are able to stop spending at a limit you personally set, rather than the limit the bank sets for you. So, to answer your question, 0% balance on your credit cards is bad because you might as well not have them. Use it, pay it off, rinse and repeat, and it will demonstrate your ability to exercise self control as well as your ability to repay your debts.",
"title": ""
},
{
"docid": "b7ebf0118a25197053642a73d8a221f2",
"text": "Credit Score is rather misleading, each provider of credit uses their own system to decide if they wish to lend to you. They will also not tell you how the combine all the factoring together. Closing unused account is good, as it reduced the risk of identity theft and you have less paperwork to deal with. It looks good if a company that knows you will agrees to give you more credit, as clearly they think you are a good risk. Having more total credit allowed on account is bad, as you may use it and not be able to pay all your bills. Using all your credit is bad, as it looks like you are not in control. Using a “pay day lender” is VERY bad, as only people that are out of control do so. Credit cards should be used for short term credit paying them off in full most months, but it is OK to take advantage of some interest free credit.",
"title": ""
},
{
"docid": "baa1e82b41268f3df7d3fc799c8edb6d",
"text": "Would opening a second credit card contribute in any meaningful way to my credit mix or no, since it's the same type of credit? Yes, multiple lines of credit help your credit score, even if they are all credit cards. There are experts on both sides of this argument though. For example, Fico says that you shouldn't open a new credit card just for the credit boost, while NerdWallet cautiously recommends it. My recommendation is that if you're disciplined with your credit spending, it will help a little. If yes, is it worth it to take the hit to my average account age sooner rather than later by opening a new credit card? If you want to build up your number of credit lines, do so well before you need to use your credit to take out a loan. Not only will your credit score take a hit from the average age dropping, but you'll also have a hard pull on your credit report. As Fixed Point points out, though, you will see a larger improvement to your credit score by adding another type of credit, such as a home loan, to your credit mix. If you are already limited your credit utilization to 10%-30% then you probably won't be able to reach your goal by just adding a credit card.",
"title": ""
},
{
"docid": "3c586acc7130c1efd832fbf1d1d35042",
"text": "Closing the card will be fine. The consequences are related to your available credit and actual/potential utilization. If you have less total credit, any credit you actually use will be a greater percentage of your total credit, manipulating your score downwards more greatly. The next consequence will be related to the age of your credit history, which is an average of your credit lines. This seems negligible and also beneficial for you, since your credit history is so young to begin with.",
"title": ""
},
{
"docid": "f00d60fd18e51707b25dbad4667ba28b",
"text": "See the accepted answer for this question. What effect will credit card churning for frequent flyer miles have on my credit score? This does not directly answer 'how often...' that you asked, but it states that the answerer opens 5-15 accounts per year. So the answer to your question is, as often as you want, as long as you manage your account ages. The reason for this is that there are two factors in opening a new account that affect your credit card score. One is average age of accounts. The other is credit inquiries. That answerer, with FICO in high 700s, sees about a 5% swing based on new cards and closing old ones. You'll have to manage average age of accounts. I assume this is done by keeping some older ones open to prop up the average, and by judiciously closing the churn accounts. Finally, if you choose to engage in churning, and you intend to apply for a large loan and want a good credit score, simply pause the account open/close part of the churn a couple of months ahead of time. Your score should recover from the temporary hits of the inquiries. The churning communities really do have how to guides which discuss the details of this. Key phrase: credit card churning.",
"title": ""
},
{
"docid": "60f197fcd24ac4a0004f929ef51fa4a2",
"text": "This strategy will have long lasting effects since negative items can persist for many years, making financing a home difficult, the primary source of household credit. It is also very risky. You can play hard, but then the creditor may choose you to be the one that they make an example out of by suing you for a judgement that allows them to empty your accounts and garnish your wages. If you have no record of late payments, or they are old and/or few, your credit score will quickly shoot up if you pay down to 10% of the balance, keep the cards, and maintain that balance rate. This strategy will have them begging you to take on more credit with offers of lower interest rates. The less credit you take on, the more they'll throw at you, and when it comes time to purchase a home, more home can be bought because your interest rates will be lower.",
"title": ""
},
{
"docid": "4e39f2aa66c02a22a9eb53c52ff636bd",
"text": "A credit balance can happen any time you have a store return, but paid the bill in full. It's no big deal. Why not just charge the next gas purchase or small grocery store purchase, to cycle it through? Yes - unused cards can get canceled by the bank, and that can hurt your credit score. In the US anyway. I'm guessing it's the same system or similar in Canada.",
"title": ""
},
{
"docid": "ca4efa920bc59cb71bee8163139124a8",
"text": "I think you are interpreting their recommended numbers incorrectly. They are not suggesting that you get 13-21 credit cards, they are saying that your score could get 13-21 points higher based on having a large number of credit cards and loans. Unfortunately, the exact formula for calculating your credit score is not known, so its hard to directly answer the question. But I wouldn't go opening 22+ credit cards just to get this part of the number higher!",
"title": ""
},
{
"docid": "01264d3bf1b37ab9fb671b8d57b01293",
"text": "I've read multiple times that the way to rebuild the credit score is to get a credit card and then have some minor charges on it every month and have them paid in full every month. Old negative events age and this disciplined activity rebuild the score to some not to horrible levels. Now it's true that it's hard to get reasonably good credit cards when your credit score is poor. Yet it's not necessary to have a good credit card for this case - such things as large credit limit are not needed. All that's needed is a long grace period so that there's no interest between the moment a charge is done and a moment the bill is paid in full at the end of the month. Yes, the card may have rather high interest and rather low credit limit, but it doesn't really matter. I've read once on MSN Money that people are offered credit even while they're in the middle of bankruptcy, so it's not impossible to get a credit card in the described situation. Goes without saying that a lot of discipline will be needed to have all this implemented.",
"title": ""
}
] |
fiqa
|
466f7d0fd6b8684306a911157e2581aa
|
I'm 20 and starting to build up for my mortgage downpayment, where should I put my money for optimal growth?
|
[
{
"docid": "4c05a709056f6da4dbcf85676d000157",
"text": "Good job. Assuming that you are also contributing to retirement, you are bound to be a wealthy person. I'm not really sure how Australia works as far as retirement, but I am pretty sure you are taking care of that too. Given your time frame (more than 5 years) I would consider investing at least a portion of the money. If I was you, I would tend to make that amount significant, say 75% in mutual funds, 25% in your high interest savings. The ratio you choose is up to you, but I would be heavier in the investment than savings side. As the time for home purchase approaches, you may want more in savings and less in investments. You may want to look at a mutual fund with a low beta. Beta is a measure of the price volatility. I did a google search on low beta funds, and came up with a number of good articles that explains this further. Having a fund with a low beta insulates you, a bit, from radical swings in the market allowing you to count more on the money being there when needed. One way to get to the proper ratio, is to contribute all new money to the mutual fund until it is in proper balance. This way you don't lower your interest rate for a month. Given your time frame, salary, and sense of responsibility you may be able to do the 100% down plan. Again, good work!",
"title": ""
},
{
"docid": "f9e8f42cad8fe877bf8d85961940ffd8",
"text": "The big question is whether you will be flexible about when you'll get that house. The overall best investment (in terms of yielding a good risk/return ratio and requiring little effort) is a broad index fund (mutual or ETF), especially if you're contributing continuously and thereby take advantage of cost averaging. But the downside is that you have some volatility: during an economic downturn, your investment may be worth only half of what it's worth when the economy is booming. And of course it's very bad to have that happening just when you want to get your house. Then again, chances are that house prices will also go down in such times. If you want to avoid ever having to see the value of your investment go down, then you're pretty much stuck with things like your high-interest savings account (which sounds like a very good fit for your requirements.",
"title": ""
},
{
"docid": "8bb0f3a31bb989b3f98d72cfb04cc62e",
"text": "You should never take advice from someone else in relation to a question like this. Who would you blame if things go wrong and you lose money or make less than your savings account. For this reason I will give you the same answer I gave to one of your previous similar questions: If you want higher returns you may have to take on more risk. From lowest returns (and usually lower risk) to higher returns (and usually higher risk), Bank savings accounts, term deposits, on-line savings accounts, offset accounts (if you have a mortgage), fixed interest eg. Bonds, property and stock markets. If you want potentially higher returns then you can go for derivatives like options or CFDs, FX or Futures. These usually have higher risks again but as with any investments some risks can be partly managed. What ever you decide to do, get yourself educated first. Don't put any money down unless you know what your potential risks are and have a risk management strategy in place, especially if it is from advice provided by someone else. The first rule before starting any new investment is to understand what your potential risks are and have a plane to manage and reduce those risks.",
"title": ""
},
{
"docid": "d24cb9f4769b32ce990e3c75882230d5",
"text": "The highest growth for an investment has historically been in stocks. Investing in mature companies that offer dividends is great for you since it is compound growth. Many oil and gas companies provide dividends.",
"title": ""
}
] |
[
{
"docid": "028fcc6ae27f514d32d83e49aaf40a33",
"text": "The only problem that I see is that by not giving the 20% right away, you might need to pay PMI for a few months. In addition, in the case of conventional loans, I heard that banks will not remove the PMI after reaching 80% LTV without doing an appraisal. In order to be removed automatically, you need to reach 78% LTV. Finally, I think you can get a better interest by giving 20% down, and you can get a conventional loan instead of a FHA loan, which offers the option to avoid the PMI altogether (on FHA, you have two PMIs: one upfront and one monthly, and the monthly one is for the life of the loan if you give less than 10%).",
"title": ""
},
{
"docid": "9bd0f3fe069b9d41b6a0d7cbd12c89bf",
"text": "I am currently in the process of purchasing a house. I am only putting 5% down. I see that some are saying that the traditional 20% down is the way to go. I am a first time homebuyer, and unfortunately we no longer live in the world where 20% down is mandatory, which is part of the reason why housing prices are so high. I feel it is more important that you are comfortable with what your monthly payments are as well as being informed on how interest rates can change how much you owe each month. Right now interest rates are pretty low, and it would almost be silly to put 20% down on your home. It might make more sense to put money in different vehicle right now, if you have extra, as the global economy will likely pick up and until it does, interest rates will likely stay low. Just my 2 cents worth. EDIT: I thought it would not be responsible of me not to mention that you should always have extra's saved for closing costs. They can be pricey, and if you are not informed of what they are, they can creep up on you.",
"title": ""
},
{
"docid": "ed893d39f25d0a5035f55fa5810fbbfe",
"text": "Couple of factors here to consider: 1) The savings vehicle 2) The investments Savings Vehicle: Roth IRAs allow you the flexibility to save for retirement and/or your house. Each person can save up to $5,500 in a Roth and you can withdraw your principal at anytime without penalty. (There is a special clause for first time home buyers; however, it limits the amount to $10k per person. Given your estimate of $750k and history of putting down 20%. It would require a bit more.) The only thing is that you can't touch the growth or interest. When you do max out your Roth IRA, it may make sense for you to open a brokerage account (401Ks often have multiple steps in order to convert or withdraw money for your down payment) Investments: Given your timeline (5-7 years) your investments would be more conservative. (More fixed income) While you should stay diversified (both fixed income and equity), the conservative portfolio will allow less fluctuation in your portfolio value while allowing some growth potential.",
"title": ""
},
{
"docid": "682598e4f8164d7fdfb67a3925b2324c",
"text": "The long term growth is not 6.5%, it's 10% give or take. But, that return comes with risk. A standard deviation of 14%. Does the 401(k) have a match? And are you getting the full match? If no match, or you already top it off, the 6.5% is a rate that I'd be happy to get on my money. So, I would pay it off faster. My highest rate debt is my 3.5% mortgage, which is 2.5% after tax. At 2.5%, I prefer to be a borrower, as that gap 2.5%-10% is pretty appealing, long term.",
"title": ""
},
{
"docid": "fe9b717b496e0c08bb2428b618d1502d",
"text": "If you already have the money, put the 20% down but here is another option: You can put whatever you want down...Let's say 10%. For the other 10%, take out a 2nd mortgage. This enables you to avoid PMI. The rate you will get on the second mortgage will be higher than the first but the combination of 2 mortgages may be less than 1 plus PMI. When you get to 20% equity you can refinance and consolidate to one lower rate mortgage without PMI.",
"title": ""
},
{
"docid": "c68d769428eb86677848174ed88fdd4a",
"text": "\"I think the basic question you're asking is whether you'd be better off putting the $20K into an IRA or similar investment, or if your best bet is to pay down your mortgage. The answer is...that depends. What you didn't share is what your mortgage balance is so that we can understand how using that money to pay down the mortgage would affect you. The lower your remaining balance on the mortgage, the more impact paying it down will affect your long-term finances. For example, if your remaining principal balance is more than $200k, paying down $20k in principal will not have as significant an effect as if you only have $100k principal balance and were paying down $20k of that. To me, one option is to put the $20k toward mortgage principal, then perhaps do a refinance on your remaining mortgage with the goal of getting a better interest rate. This would double the benefit to you. First, your mortgage payment would be lower by virtue of a lower principal balance (assuming you keep the same term period in your refinanced mortgage as you have now. In other words, if you have a 15-year now, your new mortgage should be 15 years also to see the best effect on your payment). Further, if you can obtain a lower interest rate on the new loan, now you have the dual benefit of a lower principal balance to pay down plus the reduced interest cost on that principal balance. This would put money into your pocket immediately, which I think is part of your goal, although the question does hinge on what you'd pay in points and fees for a refinance. You can invest, but with that comes risk, and right now may not be the ideal time to enter the markets given all of the uncertainties with the \"\"Brexit\"\" issue. By paying down your mortgage principal, even if you do nothing else, you can save yourself considerable interest in the long term which might be more beneficial than the return you'd get from the markets or an IRA at this point. I hope this helps. Good luck!\"",
"title": ""
},
{
"docid": "513293e3d919d4f98426df907777bc61",
"text": "I want to start investing money, as low risk as possible, but with a percentage growth of at least 4% over 10 - 15 years. ...I do have a mortgage, Then there's your answer. You get a risk-free return of the interest rate on your mortgage (I'm assuming it's more than 4%). Every bit you put toward your mortgage reduces the amount of interest you pay by the interest rate, helping you to pay it off faster. Then, once your mortgage is paid off, you can look at other investments that fit your risk tolerance and return requirements. That said, make sure you have enough emergency savings to reduce cash flow interruptions, and make sure you don't have any other debts to pay. I'm not saying that everyone with a mortgage should pay it off before other investments. You asked for a low-risk 4% investment, which paying your mortgage would accomplish. If you want more return (and more risk) then other investments would be appropriate. Other factors that might change your decision might be:",
"title": ""
},
{
"docid": "c124b0a7949c26904fa381882841a086",
"text": "You are correct that 20% has an impact on your interest rate, although it is not always hugely significant. You would have to do your own shopping around to find that information out. However 20% has an impact that I consider to be far more important than your monthly payment, and that is in your equity. If the DC market tanks, which I know it has not really done like much of the country but none of us have crystal balls to know if it will or not, then you will be more easily underwater the less you put down. Conversely putting 20% or more down makes you an easy sell to lenders [i]and[/i] means that you don't have to worry nearly so much about having to do a short sale in the future. I would never buy a house with less than 20% down personally and have lived well below my means to get there, but I am not you. With regards to mortgages, the cheapskate way that I found information that I needed was to get books from the library that explained the mortgage process to me. When it came time to select an actual broker I used my realtor's recommendation (because I trusted my realtor to actually have my interests at heart because he was an old family friend - you can't usually do that so I don't recommend it) and that of others I knew who had bought recently. I compared four lenders and competed them against each other to get the best terms. They will give you estimate sheets that help you weigh not only rates but costs of different fees such as the origination fee and discount points. Make sure to know what fees the lender controls and what fees (s)he doesn't so that you know which lines to actually compare. Beyond a lender make sure that before closing you have found a title company that you think is a good choice (your realtor or lender will try to pick one for you because that's the way the business is played but it is a racket - pick one who will give you the best deal on title), a settlment company (may be title company, lender, or other) that won't charge you an excessive amount, a survey company that you like if required in DC for your title insurance, and homeowner's insurance coverage that you think is a good deal. The time between contract and closing is short and nobody tells you to research all the closing costs that on a $500,000 place run to in excess of $10,000, but you should. Also know that your closing costs will be about 2% of the purchase price and plan accordingly. In general take some time to educate yourself on homebuying as well as neighborhoods and price ranges. Don't rush into this process or you will lose a lot of money fast.",
"title": ""
},
{
"docid": "5efb6240c4f3e22fb6f64f933cf1d4dc",
"text": "\"I put about that down on my place. I could have purchased it for cash, but since my investments were returning more interest than the loan was costing me (much easier to achieve now!), this was one of the safest possible ways of making \"\"leverage\"\" work for me. I could have put less down and increased the leverage, but tjis was what I felt most comfortable with. Definitely make enough of a down payment to avoid mortgage insurance. You may want to make enough of a down payment that the bank trusts you to handle your property insurance and taxes yourself rather than insisting on an escrow account and building that into the loan payments; I trust myself to mail the checks on time much more than I trust the bank. Beyond that it's very much a matter of personal preference and what else you might do with the money.\"",
"title": ""
},
{
"docid": "754593853a3d3ca40ec2b931011429f9",
"text": "I'm surprised nobody else has suggested this yet: before you start investing in stocks or bonds, buy a house. Not just any house, but the house you want to live in 20 years from now, in a place where you want to live 20 years from now - but you also have to be savvy about which part of the country or world you buy in. I'm also assuming that you are in the USA, although my suggestion tends to apply equally anywhere in the world. Why? Simple: as long as you own a house, you won't ever have to pay rent (you do have to pay taxes and maintenance, of course). You have a guaranteed return on investment, and the best part is: because it's not money you earn but money you don't have to spend, it's tax free. Even if the house loses value over time, you still come out ahead. And if you live abroad temporarily, you can rent out the house and add the rent to your savings (although that does make various things more complicated). You only asked for options, so that is mine. I'll add some caveats. OK, now here are the caveats:",
"title": ""
},
{
"docid": "a92073afad23a27fb936bf7bdc9d0f55",
"text": "Whenever you put less than 20% down, you are usually required to pay private mortgage insurance (PMI) to protect the lender in case you default on your loan. You pay this until you reach 20% equity in your home. Check out an amortization calculator to see how long that would take you. Most schedules have you paying more interest at the start of your loan and less principal. PMI gets you nothing - no interest or principal paid - it's throwing money away in a very real sense (more in this answer). Still, if you want to do it, make sure to add PMI to the cost per month. It is also possible to get two mortgages, one for your 20% down payment and one for the 80%, and avoid PMI. Lenders are fairly cautious about doing that right now given the housing crash, but you may be able to find one who will let you do the two mortgages. This will raise your monthly payment in its own way, of course. Also remember to factor in the costs of home ownership into your calculations. Check the county or city website to figure out the property tax on that home, divide by twelve, and add that number to your payment. Estimate your homeowners insurance (of course you get to drop renters insurance, so make sure to calculate that on the renting side of the costs) and divide the yearly cost by 12 and add that in. Most importantly, add 1-2% of the value of the house yearly for maintenance and repair costs to your budget. All those costs are going to eat away at your 3-400 a little bit. So you've got to save about $70 a month towards repairs, etc. for the case of every 10-50 years when you need a new roof and so on. Many experts suggest having the maintenance money in savings on top of your emergency fund from day one of ownership in case your water heater suddenly dies or your roof starts leaking. Make sure you've also estimated closing costs on this house, or that the seller will pay your costs. Otherwise you loose part of that from your down payment or other savings. Once you add up all those numbers you can figure out if buying is a good proposition. With the plan to stay put for five years, it sounds like it truly might be. I'm not arguing against it, just laying out all the factors for you. The NYT Rent Versus Buy calculator lays out most of these items in terms of renting or buying, and might help you make that decision. EDIT: As Tim noted in the comments below, real monthly cost should take into account deductions from mortgage interest and property tax paid. This calculator can help you figure that out. This question will be one to watch for answers on how to calculate cost and return on home buying, with the answer by mbhunter being an important qualification",
"title": ""
},
{
"docid": "d1fe91bd871e5aa41bb2604ae5b2023e",
"text": "\"Trying to determine what the best investment option is when buying a home is like predicting the stock market. Not likely to work out. Forget about the \"\"investment\"\" part of buying a home and look at the quality of life, monthly/annual financial burden, and what your goals are. Buy a home that you'll be happy living in and in an area you like. Buy a home with the plan being to remain in that home for at least 6 years. If you're planning on having kids, then buy a home that will accommodate that. If you're not planning on living in the same place at least 6 years, then buying might not be the best idea, and certainly might not be the best \"\"investment\"\". You're buying a home that will end up having emotional value to you. This isn't like buying a rental property or commercial real estate. Chances are you won't lose money in the long run, unless the market crashes again, but in that case everyone pretty much gets screwed so don't worry about it. We're not in a housing market like what existed in decades past. The idea of buying a home so that you'll make money off it when you sell it isn't really as reliable a practice as it once was. Take advantage of the ridiculously low interest rates, but note that if you wait, they're not likely to go up by an amount that will make a huge difference in the grand scheme of things. My family and I went through the exact same thought process you're going through right now. We close on our new house tomorrow. We battled over renting somewhere - we don't have a good rental market compared to buying here, buying something older for less money and fixing it up - we're HGTV junkies but we realized we just don't have the time or emotional capacity to deal with that scenario, or buying new/like new. There are benefits and drawbacks to all 3 options, and we spent a long time weighing them and eventually came to a conclusion that was best for us. Go talk to a realtor in your area. You're under no obligation to use them, but you can get a better feel for your options and what might best suit you by talking to a professional. For what it's worth, our realtor is a big fan of Pulte Homes in our area because of their home designs and quality. We know some people who have bought in that neighborhood and they're very happy. There are horror stories too, same as with any product you might buy.\"",
"title": ""
},
{
"docid": "e469606ed367da67077be8954d5324b4",
"text": "\"If you're looking for a well-rounded view into what it's like to actually own/manage real-estate investments, plus how you can scale things up & keep the management workload relatively low, have a look at the Bigger Pockets community. There are blogs, podcasts, & interviews there from both full-time & part-time real estate investors. It's been a great resource for me in my investments. More generally, your goal of \"\"retiring\"\" within 20 years is very attainable even without getting extravagant investment returns. A very underrated determinant in how quickly you build wealth is how much of your income you are contributing to investments. Have a look at this article: The Shockingly Simple Math Behind Early Retirement\"",
"title": ""
},
{
"docid": "ade1a70a1ee0761e9bad174726ff779e",
"text": "\"I've heard that the bank may agree to a \"\"one time adjustment\"\" to lower the payments on Mortgage #2 because of paying a very large payment. Is this something that really happens? It's to the banks advantage to reduce the payments in that situation. If they were willing to loan you money previously, they should still be willing. If they keep the payments the same, then you'll pay off the loan faster. Just playing with a spreadsheet, paying off a third of the mortgage amount would eliminate the back half of the payments or reduces payments by around two fifths (leaving off any escrow or insurance). If you can afford the payments, I'd lean towards leaving them at the current level and paying off the loan early. But you know your circumstances better than we do. If you are underfunded elsewhere, shore things up. Fully fund your 401k and IRA. Fill out your emergency fund. Buy that new appliance that you don't quite need yet but will soon. If you are paying PMI, you should reduce the principal down to the point where you no longer have to do so. That's usually more than 20% equity (or less than an 80% loan). There is an argument for investing the remainder in securities (stocks and bonds). If you itemize, you can deduct the interest on your mortgage. And then you can deduct other things, like local and state taxes. If you're getting a higher return from securities than you'd pay on the mortgage, it can be a good investment. Five or ten years from now, when your interest drops closer to the itemization threshold, you can cash out and pay off more of the mortgage than you could now. The problem is that this might not be the best time for that. The Buffett Indicator is currently higher than it was before the 2007-9 market crash. That suggests that stocks aren't the best place for a medium term investment right now. I'd pay down the mortgage. You know the return on that. No matter what happens with the market, it will save you on interest. I'd keep the payments where they are now unless they are straining your budget unduly. Pay off your thirty year mortgage in fifteen years.\"",
"title": ""
},
{
"docid": "ae20a73a57469e8a6781b4deec5cc182",
"text": "You're being too hard on yourself. You've managed to save quite a bit, which is more than most people ever do. You're in a wonderful position, actually -- you have savings and time! You don't mention how long you want/need to continue working, but I'll assume 20 years or so? You don't have to invest it all at once. Like Pete B says, index funds (just read what Mr. Buffett said in recent news: he'd tell his widow to invest in the S&P 500 Index and not Berkshire Hathaway!) should be a decent percentage. You can also pick a target fund from any of the major investment firms (fees are higher than an Index, but it will take care of any asset allocation decisions). Put some in each. Also look at retirement accounts to take advantage of tax-deferred or tax-free growth, but that's another question and country-specific. In any case, don't even blink when the market goes down. And it will go down. If you're still working, earning, and saving, it'll just be another opportunity to buy more at lower prices. As for the house, no reason you can't invest and save for a house. Invest some for the long term and set aside the rest for the house in 1-5 years. If you don't think you'll ever really buy the house, though, invest the majority of it for the long-term: I have a feeling from the tone of your question that you tend to put off the big financial decisions. So if you won't really buy the house, just admit it to yourself now!",
"title": ""
}
] |
fiqa
|
7ff6432d3ed0aa3774e6b2f88b107900
|
Nanny taxes and payroll service
|
[
{
"docid": "bd73b14f4979fbee1d6a372bb5666977",
"text": "For Federal Return, Schedule H and its Instructions are a great start. You are the nanny's employer, and are responsible for FICA (social security and medicare) withholding, and also paying the employer portion. You will offer her a W4 so she can tell you how much federal and state tax to withhold. You'll use Circular E the employer's tax guide to calculate withholding. In January, you'll give her a W-2, and file the information with your own tax return. For State, some of the above applies, but as I recall, in my state, I had to submit withholding quarterly separate from my return. As compared to Federal, where I adjusted my own withholding so at year end the tax paid was correct. Unemployment insurance also needs to be paid, I believe this is state. This issue is non-political - I told my friends at the IRS that (a) the disparity between state and federal to handle the nanny tax was confusing for those of us trying to comply, and (b) even though we are treated as an employer, a 'guide to the nanny tax' would be helpful, a single IRS doc that doesn't mix non-nanny type issues into the mix. In the end, if a service is cost effective, go for it, your time is valuable, and thi is something that only lasts a few years.",
"title": ""
},
{
"docid": "563f7f6f56b95f036aeeef527b3212e5",
"text": "Whether to employ a payroll service to handle the taxes (and possibly the payroll itself) is a matter that depends on how savvy you are with respect to your own taxes and with using computers in general. If you are comfortable using programs such as Excel, or Quicken, or TurboTax, or TaxAct etc, then taking care of payroll taxes on a nanny's wages all by yourself is not too hard. If you take a shoebox full of receipts and paystubs to your accountant each April to prepare your personal income tax returns and sign whatever the accountant puts in front of you as your tax return, then you do need to hire a payroll service. It will also cost you a bundle since there are no economies of scale to help you; there is only one employee to be paid.",
"title": ""
}
] |
[
{
"docid": "fa9290fe5300a24c04c6f8ab01f18f66",
"text": "Sounds you need to read up on S corp structures. I think this would benefit you if you generate income even after you physically stopped working which is incomes from membership fees, royalties % of customer revenue, middle man etc... Under the Scorp, you as the sole member must earn a wage that fair and at current market value. You pay social security and Medicare on this wage. The interesting thing here is that an Scorp can pay out earning dividends without having to pay payroll taxes but the catch is that you, as the sole employee must earn a fair wage. As for paying the other member you may want to look into 1099 contract work plus a finders fee. The 1099 hourly wage does not require you to pay Medicare and SS. The common fee I'm used to is 5% of gross invoice. Then you would pay her an hourly wage. The company then bills these hours multiplied by 2 or 3 (or whatever you think is fair) to the client. Deduct expenses from this and that's your profit. Example. Contractor brings Client A which is estimated as a 100 hour project with $100 cost in supplies and requires 2 hours of your time @ $40/hr. You quote 100 hours @ $50 to client, client agrees and gives you down payment. You then present the contract work to your contractor, they complete the work in 100 hours and bill you at $25. You pay your contractor 2500 plus the 5% ($250) and your company earns $2070 (5000 - 2500 - 100-80) And you'll earn $80 minus the payroll tax. Then at the end of the quarter or year or however you want to do earning payouts your LLC- Scorp will write you a check for $2070 or whatever earning % you want to take. This is then taxed at your income tax bracket. One thing to keep in mind is what is preventing this other person from becoming your competition? A partnership would be great motivation to try and bring in as much work under the LLC. But if you start shafting people then they'll just keep the work and cut you out.",
"title": ""
},
{
"docid": "c999d9b19f351dca287fcaade93b30dd",
"text": "\"The translation scheme is detailed in IRS Publication 15, \"\"Employer's Tax Guide\"\". For the 2010 version, the information is in Section 16 on Page 37. There are two ways that employers can calculate the withheld tax amount: wage bracket and percentage. Alternatively, they can also use one of the methods defined in IRS Publication 15-A. I'll assume the person making $60k/yr with 10 allowances is paid monthly ($5000/period) and married. Using the wage bracket method, the amount withheld for federal taxes would be $83 per pay period. Using the percentage method, it would be $81.23 per pay period. I don't recommend that you use this information to determine how to fill out your W-4. The IRS provides a special online calculator for that purpose, which I have always found quite accurate. Note: \"\"allowances\"\" are not the same as \"\"dependents\"\"; \"\"allowances\"\" are a more realistic estimation of your tax deductions, taking into consideration much more than just your dependents.\"",
"title": ""
},
{
"docid": "67b68ecf5c993aeea42bb178987d334d",
"text": "Yes, you are the proprietor of the business and your SSN is listed on Schedule C. The information on Schedule C is for your unincorporated business as a contractor; it is a sole proprietorship. You might choose to do this business under your own name e.g. Tim Taylor (getting paid with checks made out to Tim Taylor) or a modified name such as Tim the Tool Man Taylor (this is often referred to as DBA - Doing Business as), under a business name such as Tool Time etc. with business address being your home address or separate premises, and checking accounts to match etc. and all that is what the IRS wants to know about on Schedule C. Information about the company that paid you is not listed on Schedule C.",
"title": ""
},
{
"docid": "45315a7f2e7a30b391efa8918d80a94a",
"text": "\"We will bill our clients periodically and will get paid monthly. Who are \"\"we\"\"? If you're not employed - you're not the one doing the work or billing the client. Would IRS care about this or this should be something written in the policy of our company. For example: \"\"Every two months profits get divided 50/50\"\" They won't. S-Corp is a pass-through entity. We plan to use Schedule K when filing taxes for 2015. I've never filled a schedule K before, will the profit distributions be reflected on this form? Yes, that is what it is for. We might need extra help in 2015, so we plan to hire an additional employee (who will not be a shareholder). Will our tax liability go down by doing this? Down in what sense? Payroll is deductible, if that's what you mean. Are there certain other things that should be kept in mind to reduce the tax liability? Yes. Getting a proper tax adviser (EA/CPA licensed in your State) to explain to you what S-Corp is, how it works, how payroll works, how owner-shareholder is taxed etc etc.\"",
"title": ""
},
{
"docid": "60833091fb5f878a8610f7b5990ddb4e",
"text": "This is how a consulting engagement in India works. If you are registered for Service Tax and have a service tax number, no tax is deducted at source and you have to pay 12.36% to service tax department during filing (once a quarter). If you do not have Service tax number i.e. not registered for service tax, the company is liable to deduct 10% at source and give the same to Income Tax Dept. and give you a Form-16 at the end of the financial year. If you fall in 10% tax bracket, no further tax liability, if you are in 30%, 20% more needs to be paid to Income Tax Dept.(calculate for 20% tax bracket). The tax slabs given above are fine. If you fail to pay the remainder tax (if applicable) Income Tax Dept. will send you a demand notice, politely asking you to pay at the end of the FY. I would suggest you talk to a CA, as there are implications of advance tax (on your consulting income) to be paid once a quarter.",
"title": ""
},
{
"docid": "554322871514f45b7369eed7c2b5070f",
"text": "Using the http://calculators.ato.gov.au/scripts/asp/simpletaxcalc/main.asp calculator and noting all the caveats (Medicare etc) and assuming everything is proportionate you get: You earn: $110,000 less $28,647 tax = $81,353 She earns: $54,000 less $9,097 tax = $44,903 Total net: $126,256 You earn: $88,000 less $20,507 tax = $67,493 She earns: $72,000 less $14,947 tax = $57,053 Total net: $124,546 So, there is about $1,710 in it per annum or $33/week. Long day care will be setting you back $75-185/day so this is pretty small beans. This is all back of the envelope stuff and probably worth paying a few hundred dollars to an accountant to work it all out.",
"title": ""
},
{
"docid": "b7a3cbe87c7d49cdb8cc02b7f7fdec32",
"text": "\"You're getting paid by the job, not by the hour, so I don't see why you think the employer is obligated to pay you for the drive time. The only way that might be true, as far as I can see, is if he were avoiding paying you minimum wage by structuring your employment this way. It looks like to me you're over the minimum wage based on what you wrote. At maximum \"\"unpaid\"\" drive time (59 min each way) and maximum length of job (4 hours as you stated it), gives your minimum hourly rate of $8.83/hr. The federal minimum wage is currently $7.25/hr, so you're over that. A quick search online suggests that NV does have a higher minimum at $8.25/hr under some conditions, but you're still over that too. The fact that you're required to pick-up the helpers and that you have a company car at home probably does mean that you're \"\"on the clock\"\" from the moment that you leave your house, but, again, you're not actually being paid by the clock. As long as no other law is being broken (and it appears from your telling that there isn't), then the employer can set any policy for how to compute the compensation that he wants. Regarding taxes, the employer probably has no discretion there. You're making what you're making, and the employer needs to tax it in total. Since you're driving a company vehicle from home, I don't think that you're entitled to any reimbursement (vs. wages) that would not be taxed unless maybe you pay for gas yourself. The gas money, if applicable, should be reimbursable as a business expense and that generally would not be taxed.\"",
"title": ""
},
{
"docid": "b573d3167787931ca68ccd809c08eea9",
"text": "PSB taxed at higher rates. PSB is taxed at 39.5% in Ontario, as the article mentioned. But if you pay all the net income to yourself as salary, you expense it and zero it out on the corporate level. So who cares what tax rate it is if the taxable income is zero? No-one. Same goes for the US, by the way. Personal Service Corporations are taxed at flat 35% Federal tax rate. But if you pour all the income into your salary - its moot, because there's no net income to pay tax of. If it's too complicated to figure out, maybe it would be wise to hire a tax accountant to provide counsel to you before you make decisions about your business.",
"title": ""
},
{
"docid": "9c9b09427bf59ac4ea866460fe930c7e",
"text": "Very grey area. You can't pay them to run errands, mow the lawn, etc. I'd suggest that you would have to have self employment income (i.e. your own business) for you to justify the deduction. And then the work itself needs to be applicable to the business. I've commented here and elsewhere that I jumped on this when my daughter at age 12 started to have income from babysitting. I told her that in exchange for her taking the time to keep a notebook, listing the family paying her, the date, and amount paid, I'd make a deposit to a Roth IRA for her. I've approaches taxes each year in a way that would be audit-compliant, i.e. a paper trail that covers any and all deductions, donations, etc. In the real world, the IRS isn't likely to audit someone for that Roth deposit, as there's little for them to recover.",
"title": ""
},
{
"docid": "d50f90f0c864294278fa0691bbb3ef40",
"text": "You will most likely pay around 30%, between standard income tax and payroll taxes. That is a good place to start. If you live in a state/city with income taxes, add that to the mix.",
"title": ""
},
{
"docid": "9ae88354d918c5f09d1b21baec41180e",
"text": "\"Take a look at IRS Publication 15. This is your employer's \"\"bible\"\" for withholding the correct amount of taxes from your paycheck. Most payroll systems use what this publication defines as the \"\"Percentage Method\"\", because it requires less data to be entered into the system in order to correctly compute the amount of withholding. The computation method is as follows: Taxes are computed \"\"piecewise\"\"; dollar amounts up to A are taxed at X%, and then dollar amounts between A and B are taxed at Y%, so total tax for B dollars is A*X + (B-A)*Y. Here is the table of rates for income earned in 2012 on a daily basis by a person filing as Single: To use this table, multiply all the dollar amounts by the number of business days in the pay period (so don't count more than 5 days per week even if you work 6 or 7). Find the range in which your pay subject to withholding falls, subtract the \"\"more than\"\" amount from the range, multiply the remainder by the \"\"W/H Pct\"\" for that line, and add that amount to the \"\"W/H Base\"\" amount (which is the cumulative amount of all lower tax brackets). This is the amount that will be withheld from your paycheck if you file Single or Married Filing Separately in the 2012 TY. If you file Married Filing Jointly, the amounts defining the tax brackets are slightly different (there's a pretty substantial \"\"marriage advantage\"\" right now; withholding for a married person in average wage-earning range is half or less than a person filing Single.). In your particular example of $2500 biweekly (10 business days/pp), with no allowances and no pre-tax deductions: So, with zero allowances, your employer should be taking $451.70 out of your paycheck for federal withholding. Now, that doesn't include PA state taxes of 3.07% (on $2500 that's $76.75), plus other state and federal taxes like SS (4.2% on your gross income up to 106k), Medicare/Medicaid (1.45% on your entire gross income), and SUTA (.8% on the first $8000). But, you also don't get a refund on those when you fill out the 1040 (except if you claim deductions against state income tax, and in an exceptional case which requires you to have two jobs in one year, thus doubling up on SS and SUTA taxes beyond their wage bases). If you claim 3 allowances on your federal taxes, all other things being equal, your taxable wages are reduced by $438.45, leaving you with taxable income of $2061.55. Still in the 25% bracket, but the wages subject to that level are only $619.55, for taxes in the 25% bracket of $154.89, plus the withholding base of $187.20 equals total federal w/h of $342.09 per paycheck, a savings of about $110pp. Those allowances do not count towards other federal taxes, and I do not know if PA state taxes figure these in. It seems odd that you would owe that much in taxes with your withholding effectively maxed out, unless you have some other form of income that you're reporting such as investment gains, child support/alimony, etc. With nobody claiming you as a dependent and no dependents of your own, filing Single, and zero allowances on your W-4 resulting in the tax withholding above, a quick run of the 1040EZ form shows that the feds should owe YOU $1738.20. The absolute worst-case scenario of you being claimed as a dependent by someone else should still get you a refund of $800 if you had your employer withhold the max. The numbers should only have gotten better if you're married or have kids or other dependents, or have significant itemized deductions such as a home mortgage (on which the interest and any property taxes are deductible). If you itemize, remember that state income tax, if any, is also deductible. I would consult a tax professional and have him double-check all your numbers. Unless there's something significant you haven't told us, you should not have owed the gov't at the end of the year.\"",
"title": ""
},
{
"docid": "2f8b42376ba8f2b9e521913010a6afe2",
"text": "Payroll taxes are only paid on salary, so you will be paying SS Tax and Medicare only on the $60,000 you pay yourself. You will still pay income tax on the distribution, of course, but the payroll tax savings seem significant (~$13K according to the calculator below). While tinkering with a new web technology some time ago, I created this JsFiddle application. I can't swear to its correctness, but I'm pretty sure it's solid (use the UI in the bottom right quadrant of the screen): http://jsfiddle.net/psandler/NKAZd/",
"title": ""
},
{
"docid": "a3536cc618e291ed7fa8cd499d035587",
"text": "I'm not sure why you're confusing the two unrelated things. 1040ES is your estimated tax payments. 941 is your corporation's payroll tax report. They have nothing to do with each other. You being the corporation's employee is accidental, and can only help you to avoid 1040ES and use the W2 withholding instead - like any other employee. From the IRS standpoint you're not running a LLC - you're running a corporation, and you're that corporation's employee. While technically you're self-employed, from tax perspective - you're not (to the extent of your corporate salary, at least).",
"title": ""
},
{
"docid": "97cbde3c965690a53a5b344eaf7ebe19",
"text": "Forms 1099 and W2 are mutually exclusive. Employers file both, not the employees. 1099 is filed for contractors, W2 is filed for employees. These terms are defined in the tax code, and you may very well be employee, even though your employer pays you as a contractor and issues 1099. You may complain to the IRS if this is the case, and have them explain the difference to the employer (at the employer's expense, through fines and penalties). Employers usually do this to avoid providing benefits (and by the way also avoid paying payroll taxes). If you're working as a contractor, lets check your follow-up questions: where do i pay my taxes on my hourly that means does the IRS have a payment center for the tax i pay. If you're an independent contractor (1099), you're supposed to pay your own taxes on a quarterly basis using the form 1040-ES. Check this page for more information on your quarterly payments and follow the links. If you're a salaried employee elsewhere (i.e.: receive W2, from a different employer), then instead of doing the quarterly estimates you can adjust your salary withholding at that other place of work to cover for your additional income. To do that you submit an updated form W4 there, check with the payroll department on details. Is this a hobby tax No such thing, hobby income is taxed as ordinary income. The difference is that hobby cannot be at loss, while regular business activity can. If you're a contractor, it is likely that you're not working at loss, so it is irrelevant. what tax do i pay the city? does this require a sole proprietor license? This really depends on your local laws and the type of work you're doing and where you're doing it. Most likely, if you're working from your employer's office, you don't need any business license from the city (unless you have to be licensed to do the job). If you're working from home, you might need a license, check with the local government. These are very general answers to very general questions. You should seek a proper advice from a licensed tax adviser (EA/CPA licensed in your state) for your specific case.",
"title": ""
},
{
"docid": "e014d35b3f0ff08b6d7e46b48d579fb8",
"text": "Payroll is undeniably one of the most important part of any business and it very important that you have a timely payroll every month. To avoid the hassle of payroll processing, it is best to get the service outsourced. We,DHpayroll, will be more than happy to offer you our expert services.",
"title": ""
}
] |
fiqa
|
30fba713162f1a28d5811ec2a1cfcfd1
|
What choices should I consider for investing money that I will need in two years?
|
[
{
"docid": "ba82c700d659bd913917eb88bae37928",
"text": "Never invest money you need in the short term. As already suggested, park your money in CDs.",
"title": ""
},
{
"docid": "fe759125c34bd1657848291aa5f8babc",
"text": "\"Books such as \"\"The Pocket Idiot's Guide to Investing in Mutual Funds\"\" claim that money market funds and CDs are the most prudent things to invest in if you need the money within 5 years. More specifically:\"",
"title": ""
},
{
"docid": "2a4101d422ea1202cbc43ffd2a8abbf0",
"text": "Are you going to South Africa or from? (Looking on your profile for this info.) If you're going to South Africa, you could do worse than to buy five or six one-ounce krugerrands. Maybe wait until next year to buy a few; you may get a slightly better deal. Not only is it gold, it's minted by that country, so it's easier to liquidate should you need to. Plus, they go for a smaller premium in the US than some other forms of gold. As for the rest of the $100k, I don't know ... either park it in CD ladders or put it in something that benefits if the economy gets worse. (Cheery, ain't I? ;) )",
"title": ""
},
{
"docid": "1d51d9850577a2c4f2e9b8265ad15942",
"text": "If you ever need the money in three years, imagine that today is 2006 and you need the money in 2009. Keep it in savings accounts, money-markets, or CDs maturing at the right time.",
"title": ""
},
{
"docid": "f28edc15e301af581cc4338182d9b599",
"text": "Investing $100k into physical gold (bars or coins) is the most prudent option; given the state of economic turmoil worldwide. Take a look at the long term charts; they're pretty self explanatory. Gold has an upward trend for 100+ years. http://www.goldbuyguide.com/price/ A more high risk/high reward investment would be to buy $100k of physical silver. Silver has a similar track record and inherent benefits of gold. Yet, with a combination of factors that could make it even more bull than gold (ie- better liquidity, industrial demand). Beyond that, you may want to look at other commodities such as oil and agriculture. The point is, this is troubled times for worldwide economies. Times like this you want to invest in REAL things like commodities or companies that are actually producing essential materials.",
"title": ""
}
] |
[
{
"docid": "92147a4cb7713931354d4f210a5cf054",
"text": "\"2.47% is a really, really good rate, doubly so if it's a fixed rate, and quadruply so if the interest is tax-deductible. That's about as close to \"\"free money\"\" as you're ever going to get. Heck, depending on what inflation does over the next few years, it might even be cheaper than free. So if you have the risk tolerance for it, it's probably more effective to invest the money in the stock market than to accelerate your student loan payoff. You can even do better in the bond market (my go-to intermediate-term corporate bond fund is yielding nearly 4% right now.) Just remember the old banker's aphorism: Assets shrink. Liabilities never shrink. You can lose the money you've invested in stocks or bonds, and you'll still have to pay back the loan. And, when in doubt, you can usually assume you're underestimating your risks. If you're feeling up for it, I'd say: make sure you have a good emergency fund outside of your investment money - something you could live on for six months or so and pay your bills while looking for a job, and sock the rest into something like the Vanguard LifeStrategy Moderate Growth fund or a similar instrument (Vanguard's just my personal preference, since I like their style - and by style, I mean low fees - but definitely feel free to consider alternatives). You could also pad your retirement accounts and avoid taxes on any gains instead, but remember that it's easier to put money into those than take it out, so be sure to double-check the state of your emergency fund.\"",
"title": ""
},
{
"docid": "2b0f50c6befa43aa0f99833600320dd9",
"text": "\"First, you don't state where you are and this is a rather global site. There are people from Canada, US, and many other countries here so \"\"mutual funds\"\" that mean one thing to you may be a bit different for someone in a foreign country for one point. Thanks for stating that point in a tag. Second, mutual funds are merely a type of investment vehicle, there is something to be said for what is in the fund which could be an investment company, trust or a few other possibilities. Within North America there are money market mutual funds, bond mutual funds, stock mutual funds, mutual funds of other mutual funds and funds that are a combination of any and all of the former choices. Thus, something like a money market mutual fund would be low risk but quite likely low return as well. Short-term bond funds would bring up the risk a tick though this depends on how you handle the volatility of the fund's NAV changing. There is also something to be said for open-end, ETF and closed-end funds that are a few types to consider as well. Third, taxes are something not even mentioned here which could impact which kinds of funds make sense as some funds may invest in instruments with favorable tax-treatment. Aside from funds, I'd look at CDs and Treasuries would be my suggestion. With a rather short time frame, stocks could be quite dangerous to my mind. I'd only suggest stocks if you are investing for at least 5 years. In 2 years there is a lot that can happen with stocks where if you look at history there was a record of stocks going down about 1 in every 4 years on average. Something to consider is what kind of downside would you accept here? Are you OK if what you save gets cut in half? This is what can happen with some growth funds in the short-term which is what a 2 year time horizon looks like. If you do with a stock mutual fund, it would be a gamble to my mind. Don't forget that if the fund goes down 10% and then comes up 10%, you're still down 1% since the down will take more.\"",
"title": ""
},
{
"docid": "dd019320e6613b5bc253cc262b746579",
"text": "First, as Dheer mentioned above, there is no right answer as investment avenues for a person is dicteted by many subjective considerations. Given that below a few of my thoughts (strictly thoughts): 1) Have a plan for how much money you would need in next 5-7 years, one hint is, do you plan you buy a house, car, get married ... Try to project this requirement 2) Related to the above, if you have some idea on point 1, then it would be possible for you to determine how much you need to save now to achieve the above (possibly with a loan thrown in). It will also give you some indication as to where and how much of your current cash holding that you should invest now 3) From an investment perspective there are many instruments, some more risky some less. The exact mix of instruments that you should consider is based on many things, one among them is your risk apetite and fund requirement projections 4) Usually (not as a rule of thumb) the % of savings corresponding to your age should go into low risk investments and 100-the % into higher risk investment 5) You could talk to some professional invetment planners, all banks offer the service Hope this helps, I reiterate as Dheer did, there is truely no right answer for your question all the answers would be rather contextual.",
"title": ""
},
{
"docid": "ebffd8bf1e0ea4a10737467e7d7903a0",
"text": "A quick Excel calculation tells me that, if you are earning a guaranteed post-tax return of 12% in a liquid investment, then it doesn't matter which one you pick. According to the following Excel formula: You would be able to invest ₹2,124 now at 12% interest, and you could withdraw ₹100 every month for 24 months. Which means that the ₹100/month option and the ₹2100/biennium option are essentially the same. This, of course, is depending on that 12% guaranteed return. Where I come from, this type of investment is unheard of. If I was sure I'd still be using the same service two years from now, I would choose the biennial payment option. You asked in the comments how to change the formula to account for risk in the investment. Risk is a hard thing to quantify. However, if you are certain that you will be using this service in two years from now, you are essentially achieving 13% in a guaranteed return by pre-paying your fee. In my experience, a 13% guaranteed return is worth taking. Trying to achieve any more than that in an investment is simply a gamble. That having been said, at the amount we are talking about, each percent difference in return is only about ₹22. The biggest risk here is the fact that you might want to change services before your term is up. If these amounts are relatively small for you, then if there is any chance at all that you will want to drop the service before the 2 years is up, just pay the monthly fee.",
"title": ""
},
{
"docid": "532e53a0fb994835777206b028413f9e",
"text": "\"You should certainly look into investments. If you don't expect to need the money until retirement, then I'd put it in an IRA so you get the tax advantages. It makes sense to keep some money handy \"\"just in case\"\", but $23k is a very large amount of money for an emergency fund. Of course much depends on your life situation, but I'm hard pressed to think of an unexpected emergency that would come up that would require $23k. If you're seriously planning to go back to school, then you might want to put the money in a non-retirement fund investment. As I write this -- September 2015 -- the stock market is falling, so if you expect to need the money within the next few months, putting it in the stock market may be a mistake. But long term, the stock market has always gone up, so it will almost certainly recover sooner or later. The question is just when. Investing versus paying off debts is a difficult decision. What is the interest rate on the debt? If it's more than you're likely to make on an investment, then you should pay off the debt first. (My broker recently told me that over the last few decades, the stock market has averaged 7% annual growth, so I'm using that as my working number.) If the interest rate is low, some people still prefer to pay off the debt because the interest is certain while the return on an investment is uncertain, and they're unwilling to take the risk.\"",
"title": ""
},
{
"docid": "70d0648d0d891a395ad640a3a2e267a7",
"text": "First, keep about six months' expenses in immediately-available form (savings account or similar). Second, determine how long you expect to hold on to the rest of it. What's your timeframe for buying a house or starting a family? This determines what you should do with the rest of it. If you're buying a house next year, then a CD (Certificate of Deposit) is a reasonable option; low-ish interest reate, but something, probably roughly inflation level, and quite safe - and you can plan things so it's available when you need it for the down payment. If you've got 3-5 years before you want to touch this money, then invest it in something reasonably safe. You can find reasonable funds that have a fairly low risk profile - usually a combination of stock and bonds - with a few percent higher rate of return on average. Still could lose money, but won't be all that risky. If you've got over five years, then you should probably invest them in an ETF that tracks a large market sector - in the US I'd suggest VOO or similar (Vanguard's S&P 500 fund), I'm sure Australia has something similar which tracks the larger market. Risky, but over 5+ years unlikely to lose money, and will likely have a better rate of return than anything else (6% or higher is reasonable to expect). Five years is long enough that it's vanishingly unlikely to lose money over the time period, and fairly likely to make a good return. Accept the higher risk here for the greater return; and don't cringe when the market falls, as it will go up again. Then, when you get close to your target date, start pulling money out of it and into CDs or safer investments during up periods.",
"title": ""
},
{
"docid": "30feb5a4ba881b67248e3400ceb0ad70",
"text": "\"What a lovely position to find yourself in! There's a lot of doors open to you now that may not have opened naturally for another decade. If I were in your shoes (benefiting from the hindsight of being 35 now) at 21 I'd look to do the following two things before doing anything else: 1- Put 6 months worth of living expenses in to a savings account - a rainy day fund. 2- If you have a pension, I'd be contributing enough of my salary to get the company match. Then I'd top up that figure to 15% of gross salary into Stocks & Shares ISAs - with a view to them also being retirement funds. Now for what to do with the rest... Some thoughts first... House: - If you don't want to live in it just yet, I'd think twice about buying. You wouldn't want a house to limit your career mobility. Or prove to not fit your lifestyle within 2 years, costing you money to move on. Travel: - Spending it all on travel would be excessive. Impromptu travel tends to be more interesting on a lower budget. That is, meeting people backpacking and riding trains and buses. Putting a resonable amount in an account to act as a natural budget for this might be wise. Wealth Managers: \"\"approx. 12% gain over 6 years so far\"\" equates to about 1.9% annual return. Not even beat inflation over that period - so guessing they had it in ultra-safe \"\"cash\"\" (a guaranteed way to lose money over the long term). Give them the money to 'look after' again? I'd sooner do it myself with a selection of low-cost vehicles and equal or beat their return with far lower costs. DECISIONS: A) If you decided not to use the money for big purchases for at least 4-5 years, then you could look to invest it in equities. As you mentioned, a broad basket of high-yielding shares would allow you to get an income and give opportunity for capital growth. -- The yield income could be used for your travel costs. -- Over a few years, you could fill your ISA allowance and realise any capital gains to stay under the annual exemption. Over 4 years or so, it'd all be tax-free. B) If you do want to get a property sooner, then the best bet would to seek out the best interest rates. Current accounts, fixed rate accounts, etc are offering the best interest rates at the moment. Usual places like MoneySavingExpert and SavingsChampion would help you identify them. -- There's nothing wrong with sitting on this money for a couple of years whilst you fid your way with it. It mightn't earn much but you'd likely keep pace with inflation. And you definitely wouldn't lose it or risk it unnecessarily. C) If you wanted to diversify your investment, you could look to buy-to-let (as the other post suggested). This would require a 25% deposit and likely would cost 10% of rental income to have it managed for you. There's room for the property to rise in value and the rent should cover a mortgage. But it may come with the headache of poor tenants or periods of emptiness - so it's not the buy-and-forget that many people assume. With some effort though, it may provide the best route to making the most of the money. D) Some mixture of all of the above at different stages... Your money, your choices. And a valid choice would be to sit on the cash until you learn more about your options and feel the direction your heart is pointing you. Hope that helps. I'm happy to elaborate if you wish. Chris.\"",
"title": ""
},
{
"docid": "51ba00c23f92bc5cdada42a26cbd229f",
"text": "What you choose to invest in depends largely on your own goals and time horizon. You state that your time horizon is a few decades. Most studies have shown that the equity market as a whole has outperformed most other asset types (except perhaps property in some cases) over the long term. The reason that time horizon is important is that equities are quite volatile. Who knows whether your value will halve in the next year? But we hope that over the longer term, things come out in the wash, and tomorrow's market crash will recover, etc. However, you must realize that if your goals change, and you suddenly need your money after 2 years, it might be worth less in two years than you expect.",
"title": ""
},
{
"docid": "237e2795a81504168d57af2169cf34ef",
"text": "I would agree with the other answers about it being a bad idea to invest in stocks in the short term. However, do consider also long-term repairs. For example, you should be prepared to a repair happening in 20 years in addition to repairs happening in a couple of months. So, if it is at all possible for you to save a bit more, put 2% of the construction cost of a typical new house (just a house, not the land the house is standing on) aside every year into a long-term repair fund and invest it into stocks. I would recommend a low-cost index fund or passive ETF instead of manually picking stocks. When you have a long-term repair that requires large amounts of money but will be good for decades to come, you will take some money out of the long-term repair fund. Where I live, houses cost about 4000 EUR per square meter, but most of that is the land and building permit cost. The actual construction cost is about 2500 EUR per square meter. So, I would put away 50 EUR per square meter every year. So, for example, for a relatively small 50 square meter apartment, that would mean 2500 EUR per year. There are quite many repairs that are long-term repairs. For example, in apartment buildings, plumbing needs to be redone every 40 years or so. Given such a long time period, it makes sense to invest the money into stocks. So, my recommendation would be to have two repair funds: short-term repairs and long-term repairs. Only the long-term repair fund should be invested into stocks.",
"title": ""
},
{
"docid": "a84b09627540269a6bcb47aed748f4c1",
"text": "If you are going to be buying a house in 1-2 years, I would be putting my money into a short term holding area like a high interest (which isn't that high right now) or a CD (also low interest) because of your near-term need. I wouldn't use the Roth option for your down payment money. If you invest in something volatile (and stocks/mutual funds are very volatile in a 1-2 year term) I would consider it too risky for your need and time frame.",
"title": ""
},
{
"docid": "d365b4480c725511653ad90c95226c7f",
"text": "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.",
"title": ""
},
{
"docid": "9a02969f1527aa7d249d33a3e8cebb4e",
"text": "The stock market, as a whole, is extremely volatile. During any 3 year period, the market could go up or down. However, and this is the important point,the market as a whole has historically been a good long term investment. If you need the money in 5 years, then you want to put it in something less volatile (so there's less chance of losing it). If you need the money in 50 years, put it in the market; the massive growth over those 50 years will more than make up for any short term drops, and you will probably come out ahead. Once you get closer to retirement age, you want to take the money out of stocks and put it in something safer; essentially locking in your profit, and protecting yourself from the possibility of further loss. Something else to consider: everyone lost money in 2008. There were no safe investments (well, ok, there were a few... but not enough to talk about). Given that, why would you choose another investment over stocks? Taking a 50% loss after decades of 10% annual returns is still better than a 50% loss after decades of 5% growth (in fact, after 20 years of growth, it's still 250% better - and that ratio will only improve the longer you leave it in).",
"title": ""
},
{
"docid": "0adcaf91960b5299e36faa85f8a49618",
"text": "You'll likely see several more scary market events before your autumn years. Ahhh, everyone has an opinion on this so here is mine :) If you are constrained to picking canned mutual fund products then I would target something with decent yield for two points. The third is to keep some in cash for an 'event'. I would say 65/35 at this point so invest 65% and have some liquidity for an 'opportunity'. Because the next crisis is right around the corner. But stay invested.",
"title": ""
},
{
"docid": "0a05550158e54c1fac6708fe437e2345",
"text": "\"Everything that I'm saying presumes that you're young, and won't need your money back for 20+ years, and that you're going to invest additional money in the future. Your first investments should never be individual stocks. That is far too risky until you have a LOT more experience in the market. (Once you absolutely can't resist, keep it to under 5% of your total investments. That lets you experiment without damaging your returns too much.) Instead you would want to invest in one or more mutual funds of some sort, which spreads out your investment across MANY companies. With only $50, avoiding a trading commission is paramount. If you were in the US, I would recommend opening a free online brokerage account and then purchasing a no-load commission-free mutual fund. TD Ameritrade, for example, publishes a list of the funds that you can purchase without commission. The lists generally include the type of fund (index, growth, value, etc.) and its record of return. I don't know if Europe has the same kind of discount brokerages / mutual funds the US has, but I'd be a little surprised if it didn't. You may or may not be able to invest until you first scrape together a $500 minimum, but the brokerages often have special programs/accounts for people just starting out. It should be possible to ask. One more thing on picking a fund: most charge about a 1% annual expense ratio. (That means that a $100 investment that had a 100% gain after one year would net you $198 instead of $200, because 1% of the value of your asset ($200) is $2. The math is much more complicated, and depends on the value of your investment at every given point during the year, but that's the basic idea.) HOWEVER, there are index funds that track \"\"the market\"\" automatically, and they can have MUCH lower expense fees (0.05%, vs 1%) for the same quality of performance. Over 40 years, the expense ratio can have a surprisingly large impact on your net return, even 20% or more! You'll want to google separately about the right way to pick a low-expense index fund. Your online brokerage may also be able to help. Finally, ask friends or family what mutual funds they've invested in, how they chose those funds, and what their experience has been. The point is not to have them tell you what to do, but for you to learn from the mistakes and successes of other experienced investors with whom you can follow up.\"",
"title": ""
},
{
"docid": "58796a14b05b5c255a612d4720921fb1",
"text": "There are quite a few options. Suggest you put a mix of things and begin investing into Mutual Funds.",
"title": ""
}
] |
fiqa
|
4f64ee2da9c309989339a6f2b1a5d4a1
|
Does gold's value decrease over time due to the fact that it is being continuously mined?
|
[
{
"docid": "630bf7c271b0db68bc21431861cb1da8",
"text": "\"does it mean uncontrolled severe deflation/inflation is more likely to occur compared to \"\"normal\"\" currencies such as USD, EUR etc? Look at the chart referenced in the link in your question. It took approximately 50 years for annual production of gold to double from 500 tons to 1000 tons. It took approximately 40 years for annual production to double from 1000 tons to 2000 tons. Compare that to the production of US dollars by the Federal Reserve (see chart below obtained from here). US dollar production doubled in DAYS. Which one do you think will lead to uncontrolled inflation/deflation? Update: Why did I include a chart of the FED's balance sheet? Because this is the way newly printed money is introduced - the FED will purchase something from banks (mortgage-backed securities, US treasuries, etc.) with newly printed money. The banks can then loan this money to people who then deposit the money into other banks who loan those deposits to other people and so on. This is how the fractional reserve process expands the money supply. This is why I did not include a chart of the money supply since that is counting the same money multiple times. If I deposited 100 newly minted coins into a bank and that bank proceeded to loan out 80 of my coins where 80 are deposited into another bank who then proceeds to loan out 60 of the coins, and so on....the production of coins only changed by the initial 100 that I minted - not by the fractional reserve multiple. There are historical examples of inflation with gold and silver as duff has pointed out. None of them come close in magnitude to the inflation experienced with government fiat money.\"",
"title": ""
},
{
"docid": "a3441d94495464df9250686f3ee189cf",
"text": "As one can see here, the world population is growing. Assuming worldwide demand for gold is a function of population, the question you have to ask is whether gold mining outpaces population growth. Just eyeballing it, I'd say they're about even although annual production is far noisier. Keep in mind that gold extraction is not an easy process though. At the end of the day, gold is only worth what you can trade it for, just like any other store of value.",
"title": ""
},
{
"docid": "861a9d04974ce6c228e125c840a8f454",
"text": "Mining/discovery of gold can be inflationary -- the Spanish looting of Central America for a few hundred years or the gold rush in the 19th century US are examples of that phenomenon. The difference between printing currency and mining is that you have to ability to print money on demand, while mining is limited to whatever is available to extract at a given time. The rising price of gold may be contributing to increased production, as low-grade ore that wasn't economically viable to work with in the 1980's are now affordable.",
"title": ""
},
{
"docid": "a9a36dad5328565bc5ddca2e2b3bcdb6",
"text": "\"The relative value of Gold (or any other commodity) as measured against any given currency (such as the USD), is not a constant function either. If you have inflationary pressure, the \"\"value\"\" of an ounce of gold (or barrel of oil, etc) may \"\"double\"\", but it's really because the underlying comparator has lost \"\"half\"\" its value.\"",
"title": ""
},
{
"docid": "dc21709e61f35e1dabf585879d691d0b",
"text": "Contrary to Muro's answer which strangely shows a graph of the Fed's balance sheet and not the money supply, the supply of US dollars has never doubled in a few days. This graph from Wikipedia shows M2, which is the wider measure of money supply, to have doubled over approximately 10 years, http://en.wikipedia.org/wiki/File:Components_of_US_Money_supply.svg The answer to whether gold has a higher chance of experiencing big devaluation has to do with forces outside anyone's control, if a big new mine of gold is discovered that could affect prices, but also if the economy turns around it could lead investors to pull out of gold and back into the stock markets. The USD, on the other hand, is under control of the policy makers at the Fed who have a dual mandate to keep inflation and unemployment low. The Fed seems to have gotten better over the last 30 years at controlling inflation and the dollar has not experienced big inflation since the 70s. Inflation, as measured by Core CPI, has been maintained at less than 4% for the last 20 years and is currently coming off record low levels below 1%.",
"title": ""
},
{
"docid": "1ecf92a1eef74b790a80f226f77a7c9c",
"text": "The previous answers have raised very good points, but I believe one facet of this has been neglected. While it's true that the total accessible supply of gold keeps growing(although rather slowly as was mentioned earlier) the fact remains that gold, like oil, is a non-renewable natural resource. So, at some point, we are going to run out of gold to mine. Due to this fact, I believe gold will always be highly valued. Of course it can certainly always fluctuate in value. In fact, I expect in the reasonably near future to see a decline in the price of gold due to investors selling it en masse to re-enter the stock market when the economy has recovered more substantially.",
"title": ""
},
{
"docid": "cc37e16996cab5779c8b46ce87dd4202",
"text": "Does gold's value decrease over time due to the fact that it is being continuously mined? Remember that demand increases and decreases - we've had seven years or so of strong demand increase and the corresponding price increase suggests there is a lack of gold coming into the market rather than too much. Also, bear in mind that mining the stuff on any scale is hazardous and requires massive investment in infrastructure and time. Large mines frequently take seven to ten years to come on-stream - hardly an elastic enterprise.",
"title": ""
},
{
"docid": "206aa24b94ac02bb8cfe0c5fb19932a3",
"text": "There is another aspect too for the high prices of GOLD. After the current economical crisis people are no more investing in property and a big chunk of investment has been diverted to GOLD.",
"title": ""
},
{
"docid": "06d32a236f38332d9935e7c8dbab66f6",
"text": "\"Like anything else, the price/value of gold is driven by supply and demand. Mining adds about 2% a year to the supply. Then the question is, will the demand in a given year rise by more or less than 2%. ON AVERAGE, the answer is \"\"more.\"\" That may not be true in any given year, and was untrue for whole DECADES of the 1980s and 1990s, when the price of gold fell steadily. On the other hand, demand for gold has risen MUCH more than 2% a year in the 2000s, for reasons discussed by others. That is seen in the six-fold rise in price, from about $300 an ounce to $1800 an ounce over the past ten years.\"",
"title": ""
}
] |
[
{
"docid": "5f86975dd87e90730ed4af18e94a1174",
"text": "I think part of the confusion is due to the age of the term and how money has changed over time relative to being backed by precious metals vs using central banks etc. Historically: Because historically the coin itself was precious metal, if a change occurred between the 'face value' of the coin and value of the precious metal itself, the holder of the coin was less affected since they have the precious metal already in hand. They could always trade it based on the metal value instead of the face value. OTOH if you buy a note worth an the current price of ounce of gold, and the price of gold goes up, and then the holder wants to redeem the note, they end up with less than an ounce of gold. In the more modern age The main concern is the cost to borrow funds to put money into circulation, or the gain when it goes out of circulation. The big difference between the two is that bills tend stay in circulation until they wear out, have to be bought back and replaced. Coins on the other hand last longer, but have a tendency to drop out of circulation due to collectors (especially with 'collectible series' coins that the mint seems to love to issue lately). This means that bills issued tend to stay in circulation, while only a percentage of coins stays in circulation. So the net effect on the money supply is different for the two, and since modern 'seigniorage' is all about the cost to put money in circulation, it is different in the case of coins where some percentage will not remain circulating.",
"title": ""
},
{
"docid": "f416e822c8eb187414af66b992c6054d",
"text": "No, it doesn't matter how powerful the machines are that do the mining. The system balances it out (increases the difficulty) so that one block is mined every 10 minutes, regardless of whether there's 500 miners in the world or 50 million, it will always be around 10 minutes (sometimes 9 and sometimes 11 though). And one block used to be 50BTC, but every 4 years this halves and so in 100 years the supply increase will be almost 0, miners will still get the transaction fees though. This means bitcoin is limited to a supply of less than 21 million. Which creates the scarcity. There's possibly a problem though. Quantum computing might not increase the supply but it could potentially decrypt the encryption, but if that happens the whole internet and digital world will be in trouble and not just bitcoin.",
"title": ""
},
{
"docid": "9178447e3c6b7a4528522f3c1acb7cdc",
"text": "If that fraction is really small, then the amount of gold can be thought of as relatively constant. That fraction is very small. After all, people have been mining gold for thousands of years. So the cumulative results of gold mining have been building up the supply for quite some time. Meanwhile, owners of gold rarely destroy it. A little bit of gold is used in some industries as a consumable. This limited consumption of gold offsets some of the production that comes from mining. But truthfully this effect is minuscule. For the most part people either hoard it like its made of gold, or sell it (after all it is worth its weight in gold). If you're interested Wikipedia lists a few more factors that affect gold prices. (If you're not interested Wikipedia lists them anyway.)",
"title": ""
},
{
"docid": "78a404e558f1ea88df99f08429f60464",
"text": "It’s an investment and a currency which is also based no less than the value it takes to mine... so yeah you’re right if people who are involved in bitcoin decide it’s not worth the time to have a currency it will become worth less than it take to mine.. but it’s worth 102b do I don’t think it’s gonna happen.",
"title": ""
},
{
"docid": "c3c3f7d8b8ea34d9e2946cdc47094ef5",
"text": "What you are seeing is the effects of inflation. As money becomes less valuable it takes more of it to buy physical things, be they commodities, shares in a company's stock, and peoples time (salaries). Just about the only thing that doesn't track inflation to some degree is cash itself or money in an account since that is itself what is being devalued. So the point of all this is, buying anything (a house, gold, stocks) that doesn't depreciate (a car) is something of a hedge against inflation. However, don't be tricked (as many are) into thinking that house just made you a tidy sum just because it went up in value so much over x years. Remember 1) All the other houses and things you'd spend the money on are a lot more expensive now too; and 2) You put a lot more money into a house than the mortgage payment (taxes, insurance, maintenance, etc.) I'm with the others though. Don't get caught up in the gold bubble. Doing so now is just speculation and has a lot of risk associated with it.",
"title": ""
},
{
"docid": "6522950c19c9bdd002c6744ecb57c923",
"text": "Gold since the ancient time ( at least when it was founded) has kept its value. for example the french franc currency was considered valuable in the years 1400~ but in 1641 lost its value. However who owned Gold back then still got value. The advantage of having gold is you can convert it to cash easily in the world. it hedges against inflation: it is value rise when inflation happend. Gold has no income,no earnings. its not like a stock or a bond. its an alternative way to store value the Disadvantages of investing in Gold Gold doesnt return income , needs physical storage and insurance, Capital gains tax rates are higher on most gold investments. the best way to invest gold when there is inflation is expected. source",
"title": ""
},
{
"docid": "a05e4b7eb3186e433bee9ebc1234649c",
"text": "There is no such thing as intrinsic value. Gold has value because it is rare and has a market. If any of those things decline, the value plunges. The question of whether gold is overvalued or not is complicated and depends on a lot of factors. The key question in my mind is: Is gold more valuable in terms of US dollars because it is becoming more valuable, or because the value of US dollars, the prevailing medium of exchange, is declining?",
"title": ""
},
{
"docid": "9b1252f5c85ef9772c14c3b3d5c5aa05",
"text": "Not at the current price. Take a look at historical charts going back five years. When the meltdown occurred in 2008, gold price took a big dip due to deleveraging, etc. I would expect the same to happen again with the current crisis.",
"title": ""
},
{
"docid": "831c8f232d1346bee6ed25d4c736aa80",
"text": "It seems that you're interested in an asset which you can hold that would go up when the gold price went down. It seems like a good place to start would be an index fund, which invests in the general stock market. When the gold market falls, this would mainly affect gold mining companies. These do not make up a sizable portion of any index fund, which is invested broadly in the market. Unfortunately, in order to act on this, you would also have to believe that the stock market was a good investment. To test this theory, I looked at an ETF index fund which tracks the S&P 500, and compared it to an ETF which invests in gold. I found that the daily price movements of the stock market were positively correlated with the price of gold. This result was statistically significant. The weekly price movements of the stock market were also correlated with the price of gold. This result was also statistically significant. When the holding period was stretched to one month, there was still a positive relationship between the stock market's price moves and the price of gold. This result was not statistically significant. When the holding period was stretched to one year, there was a negative relationship between the price changes in the stock market and the price of gold. This result was not statistically significant, either.",
"title": ""
},
{
"docid": "f7eb02878e2ec6b0098d0bd28a1bb5d6",
"text": "Gold is not really an investment at all, because it doesn't generate an income. It's only worth money because people think it's worth money (it has some industrial uses, but most gold is used as a store of value and not for industrial purposes), not because of its income stream.",
"title": ""
},
{
"docid": "b4f88ffe15068a7dd8535b515b44ec41",
"text": "I own a gold mine and my cost of producing an ounce of gold is $600. Less than that, I lose money, anything over is profit. Today, at $1500, I sell futures to match my production for the next 2 years. I'm happy to lock in the profit. If gold goes to $3000, well, too bad, but if it drops to $500, I can still sell it for the $1500 as I mine it. I suppose I could also close out the contracts at a profit and still shut the mines down, but the point is illustrated.",
"title": ""
},
{
"docid": "88c1bea5105717ac6d901d758a6518b0",
"text": "Cute, but 100 years of market history will show you the fundamentals have persisted for a reason. Every industry in history has tried to pull this “but this is different” thing off (oil, gold, semiconductors) and they have ALL been brought to reality in time. There is no reason to think today is any different. There will be recessions again, there will be market crashes again, either tomorrow or 5 years from now. It always levels out.",
"title": ""
},
{
"docid": "6ba706c8c818d2b2b72005061275a4ff",
"text": "\"OK, reading between the lines here it looks like the services offered by your company are of an \"\"adult\"\" (possibly illegal?) nature and that this individual has actually paid you in full for the services rendered up to this point. The wrinkle here is that you say that you've been offered large cash \"\"gifts\"\" in return for unspecified future favours, but that your client hasn't provided a real Paypal account to do so. When you pressed him on it, he sent a fake email and invented a \"\"financial adviser\"\" to fob you off, then hasn't contacted you since. It's pretty clear that he hasn't got any intention of making these payments to you. What you're now proposing to do is to use his known banking details to collect money to cover those verbal promises. In pretty much every part of the world, that's a crime. Without a written agreement to use that payment method for those promises, he could easily call the police and have you arrested for theft of funds. The further wrinkle is that his actions (claiming to have made payment via paypal, forged email headers, etc) strongly suggest that this individual is involved in cyber-crime and may well have used a fake bank account to pay for your initial services. The bottom line here is that you need real legal advice, from an actual lawyer.\"",
"title": ""
},
{
"docid": "a7590aea80f2cd8829cf78274c86e97e",
"text": "In general you will take home more in the US than in Canada. There are so many variables that is is impossible to provide a comprehensive answer that will cover all bases: so here are a few hand-waving statements. Two example calculator web sites for Canada and the US (chosen somewhat at random through Google, show that making $50,000 of either currency for the upcoming tax year in Canada you would expect to pay about $9,100 and for the US $5,900. Missing there are the state taxes, however, which also vary wildly. The deductions, adjustment and credits in both countries can really add up, so if you have specific questions, you should consult a tax specialist. Similarly, both countries provide various tax sheltered investment structures that change the game somewhat over the long term.",
"title": ""
}
] |
fiqa
|
76ac02fcb568a8aae4b9900a12f8be08
|
How do I hedge properly against inflation and other currency risks?
|
[
{
"docid": "5d94ae385472b5e5bc693de99ac90847",
"text": "I apply what you term 'money' to the word 'commodity'. And I agree with littleadv, you are just selling us your perspective on (such things as) precious metals. What I want you to think about is these truths: When used as currency gold just has two values: utility value and currency value. I hold it is better to separate the two. There is not enough gold in the earth to represent the value in aggregate economies of the world. Trying to go back to the gold standard would only induce an unimaginable hyperinflation in gold. Recent years shows that gold does not retain value. See the linked chart.",
"title": ""
}
] |
[
{
"docid": "f24297fb61becba24d76ac71c8ec800e",
"text": "\"This is an old post I feel requires some more love for completeness. Though several responses have mentioned the inherent risks that currency speculation, leverage, and frequent trading of stocks or currencies bring about, more information, and possibly a combination of answers, is necessary to fully answer this question. My answer should probably not be the answer, just some additional information to help aid your (and others') decision(s). Firstly, as a retail investor, don't trade forex. Period. Major currency pairs arguably make up the most efficient market in the world, and as a layman, that puts you at a severe disadvantage. You mentioned you were a student—since you have something else to do other than trade currencies, implicitly you cannot spend all of your time researching, monitoring, and investigating the various (infinite) drivers of currency return. Since major financial institutions such as banks, broker-dealers, hedge-funds, brokerages, inter-dealer-brokers, mutual funds, ETF companies, etc..., do have highly intelligent people researching, monitoring, and investigating the various drivers of currency return at all times, you're unlikely to win against the opposing trader. Not impossible to win, just improbable; over time, that probability will rob you clean. Secondly, investing in individual businesses can be a worthwhile endeavor and, especially as a young student, one that could pay dividends (pun intended!) for a very long time. That being said, what I mentioned above also holds true for many large-capitalization equities—there are thousands, maybe millions, of very intelligent people who do nothing other than research a few individual stocks and are often paid quite handsomely to do so. As with forex, you will often be at a severe informational disadvantage when trading. So, view any purchase of a stock as a very long-term commitment—at least five years. And if you're going to invest in a stock, you must review the company's financial history—that means poring through 10-K/Q for several years (I typically examine a minimum ten years of financial statements) and reading the notes to the financial statements. Read the yearly MD&A (quarterly is usually too volatile to be useful for long term investors) – management discussion and analysis – but remember, management pays themselves with your money. I assure you: management will always place a cherry on top, even if that cherry does not exist. If you are a shareholder, any expense the company pays is partially an expense of yours—never forget that no matter how small a position, you have partial ownership of the business in which you're invested. Thirdly, I need to address the stark contrast and often (but not always!) deep conflict between the concepts of investment and speculation. According to Seth Klarman, written on page 21 in his famous Margin of Safety, \"\"both investments and speculations can be bought and sold. Both typically fluctuate in price and can thus appear to generate investment returns. But there is one critical difference: investments throw off cash flow for the benefit of the owners; speculations do not. The return to the owners of speculations depends exclusively on the vagaries of the resale market.\"\" This seems simple and it is; but do not underestimate the profound distinction Mr. Klarman makes here. (and ask yourself—will forex pay you cash flows while you have a position on?) A simple litmus test prior to purchasing a stock might help to differentiate between investment and speculation: at what price are you willing to sell, and why? I typically require the answer to be at least 50% higher than the current salable price (so that I have a margin of safety) and that I will never sell unless there is a material operating change, accounting fraud, or more generally, regime change within the industry in which my company operates. Furthermore, I then research what types of operating changes will alter my opinion and how severe they need to be prior to a liquidation. I then write this in a journal to keep myself honest. This is the personal aspect to investing, the kind of thing you learn only by doing yourself—and it takes a lifetime to master. You can try various methodologies (there are tons of books) but overall just be cautious. Money lost does not return on its own. I've just scratched the surface of a 200,000 page investing book you need to read if you'd like to do this professionally or as a hobbyist. If this seems like too much or you want to wait until you've more time to research, consider index investing strategies (I won't delve into these here). And because I'm an investment professional: please do not interpret anything you've read here as personal advice or as a solicitation to buy or sell any securities or types of securities, whatsoever. This has been provided for general informational purposes only. Contact a financial advisor to review your personal circumstances such as time horizon, risk tolerance, liquidity needs, and asset allocation strategies. Again, nothing written herein should be construed as individual advice.\"",
"title": ""
},
{
"docid": "4716c4aba4846bb7b7f17bbdd83f777e",
"text": "I will just try to come up with a totally made up example, that should explain the dynamics of the hedge. Consider this (completely made up) relationship between USD, EUR and Gold: Now lets say you are a european wanting to by 20 grams of Gold with EUR. Equally lets say some american by 20 grams of Gold with USD. Their investment will have the following values: See how the europeans return is -15.0% while the american only has a -9.4% return? Now lets consider that the european are aware that his currency may be against him with this investment, so he decides to hedge his currency. He now enters a currency-swap contract with another person who has the opposite view, locking in his EUR/USD at t2 to be the same as at t0. He now goes ahead and buys gold in USD, knowing that he needs to convert it to EUR in the end - but he has fixed his interestrate, so that doesn't worry him. Now let's take a look at the investment: See how the european now suddenly has the same return as the American of -9.4% instead of -15.0% ? It is hard in real life to create a perfect hedge, therefore you will most often see that the are not totally the same, as per Victors answer - but they do come rather close.",
"title": ""
},
{
"docid": "e92a5e3cfe7db5a782b9931710ff389d",
"text": "\"You might find some of the answers here helpful; the question is different, but has some similar concerns, such as a changing economic environment. What approach should I take to best protect my wealth against currency devaluation & poor growth prospects. I want to avoid selling off any more of my local index funds in a panic as I want to hold long term. Does my portfolio balance make sense? Good question; I can't even get US banks to answer questions like this, such as \"\"What happens if they try to nationalize all bank accounts like in the Soviet Union?\"\" Response: it'll never happen. The question was what if! I think that your portfolio carries a lot of risk, but also offsets what you're worried about. Outside of government confiscation of foreign accounts (if your foreign investments are held through a local brokerage), you should be good. What to do about government confiscation? Even the US government (in 1933) confiscated physical gold (and they made it illegal to own) - so even physical resources can be confiscated during hard times. Quite a large portion of my foreign investments have been bought at an expensive time when our currency is already around historic lows, which does concern me in the event that it strengthens in future. What strategy should I take in the future if/when my local currency starts the strengthen...do I hold my foreign investments through it and just trust in cost averaging long term, or try sell them off to avoid the devaluation? Are these foreign investments a hedge? If so, then you shouldn't worry if your currency does strengthen; they serve the purpose of hedging the local environment. If these investments are not a hedge, then timing will matter and you'll want to sell and buy your currency before it does strengthen. The risk on this latter point is that your timing will be wrong.\"",
"title": ""
},
{
"docid": "9ae6bb4df00454b020003c9348baf8aa",
"text": "QE2 will mean that there are about $500 billion dollars in existence which weren't there before. These dollars will all be competing with the existing dollars for real goods and services, so each dollar will be worth a little less, and prices will rise a little. This is inflation. You can probably expect 1.5%-2% annual inflation for the US dollar over the next several years (the market certainly does in the aggregate, anyway). This is in terms of US-based goods and services. QE2 will also reduce the amount of other currencies you can get for the same dollar amount. The extent to which this will occur is less clear, in part because other currencies are also considering quantitative easing. Your long-term savings should probably not be in cash anyway, because of the low returns; this will probably affect you far more than the impact of quantitative easing. As for your savings which do remain in cash, what you should do with them depends on how you plan to dispose of them. The value of a currency is usually pretty stable in terms of the local economy's output of goods and services - it's the value in international trade which tends to fluctuate wildly. If you keep your savings in the same currency you plan to spend them in, they should be able to maintain their value decently well in the intermediate term.",
"title": ""
},
{
"docid": "625c51b04a0f46376f261af653ae8fa1",
"text": "If you do not understand the volatility of the fx market, you need to stop trading it, immediately. There are many reasons that fx is riskier than other types of investing, and you bear those risks whether you understand them or not. Below are a number of reasons why fx trading has high levels of risk: 1) FX trades on the relative exchange rate between currencies. That means it is a zero-sum game. Over time, the global fx market cannot 'grow'. If the US economy doubles in size, and the European economy doubles in size, then the exchange rate between the USD and the EUR will be the same as it is today (in an extreme example, all else being equal, yes I know that value of currency /= value of total economy, but the general point stands). Compare that with the stock market - if the US economy doubles in size, then effectively the value of your stock investments will double in size. That means that stocks, bonds, etc. tied to real world economies generally increase when the global economy increases - it is a positive sum game, where many players can be winners. On the long term, on average, most people earn value, without needing to get into 'timing' of trades. This allows many people to consider long-term equity investing to be lower risk than 'day-trading'. With FX, because the value of a currency is in its relative position compared with another currency, 1 player is a winner, 1 player is a loser. By this token, most fx trading is necessarily short-term 'day-trading', which by itself carries inherent risk. 2) Fx markets are insanely efficient (I will lightly state that this is my opinion, but one that I am not alone in holding firmly). This means that public information about a currency [ie: economic news, political news, etc.] is nearly immediately acted upon by many, many people, so that the revised fx price of that currency will quickly adjust. The more efficient a market is, the harder it is to 'time a trade'. As an example, if you see on a news feed that the head of a central bank authority made an announcement about interest rates in that country [a common driver of fx prices], you have only moments to make a trade before the large institutional investors already factor it into their bid/ask prices. Keep in mind that the large fx players are dealing with millions and billions of dollars; markets can move very quickly because of this. Note that some currencies trade more frequently than others. The main currency 'pairs' are typically between USD and / or other G10 country-currencies [JPY, EUR, etc.]. As you get into currencies of smaller countries, trading of those currencies happens less frequently. This means that there may be some additional time before public information is 'priced in' to the market value of that currency, making that currency 'less efficient'. On the flip side, if something is infrequently traded, pricing can be more volatile, as a few relatively smaller trades can have a big impact on the market. 3) Uncertainty of political news. If you make an fx trade based on what you believe will happen after an expected political event, you are taking risk that the event actually happens. Politics and world events can be very hard to predict, and there is a high element of chance involved [see recent 'expected' election results across the world for evidence of this]. For something like the stock market, a particular industry may get hit every once in a while with unexpected news, but the fx market is inherently tied to politics in a way that may impact exchange rates multiple times a day. 4) Leveraging. It is very common for fx traders to borrow money to invest in fx. This creates additional risk because it amplifies the impact of your (positive or negative) returns. This applies to other investments as well, but I mention it because high degrees of debt leveraging is extremely common in FX. To answer your direct question: There are no single individual traders who spike fx prices - that is the impact you see of a very efficient market, with large value traders, reacting to frequent, surprising news. I reiterate: If you do not understand the risks associated with fx trade, I recommend that you stop this activity immediately, at least until you understand it better [and I would recommend personally that any amateur investor never get involved in fx at all, regardless of how informed you believe you are].",
"title": ""
},
{
"docid": "97d606e1bf5eedca0cde9f1fecfc9618",
"text": "\"This is basically martingale, which there is a lot of research on. Basically in bets that have positive expected value such as inflation hedged assets this works better over the long term, than bets that have negative expected value such as table games at casinos. But remember, whatever your analysis is: The market can stay irrational longer than you can stay solvent. Things that can disrupt your solvency are things such as options expiration, limitations of a company's ability to stay afloat, limitations in a company's ability to stay listed on an exchange, limitations on your borrowings and interest payments, a finite amount of capital you can ever acquire (which means there is a limited amount of times you can double down). Best to get out of the losers and free up capital for the winners. If your \"\"trade\"\" turned into an \"\"investment\"\", ditch it. Don't get married to positions.\"",
"title": ""
},
{
"docid": "8cbaac28f85c1a41795da8ba70e687a0",
"text": "Well, if you only own the option, you are only limited to loosing the premium. With futures, at least with the brokers I talked to, most of the time you need to sign a margin contract just to trade futures. I don't want to go into debt, and I don't think I would do too well to be fairly honest. I am a college student, and want to limit my risk, and so just trading the option would help me get access to the commodity markets without having to get margin like many brokers want me to do. I am not trying to do any hedging or anything (which I am aware you can do). All I want to do is do an inflation trade, and I believe commodities are the best way. To me honest, if I had my way I would just buy and hold, and that is the strategy I want to emulate closest, even though I know I can't hold it forever. Basically, I want to avoid debt, but still trade commodities.",
"title": ""
},
{
"docid": "7c8efa7e30d1a1a11545c2646d55c6bd",
"text": "\"If you are concerned about inflation, here are a couple of \"\"TIPS\"\". You can buy a mutual fund or ETF which adjusts for inflation. Here is one link which you may find useful: http://money.usnews.com/money/blogs/the-smarter-mutual-fund-investor/2010/12/02/etf-basics-how-to-fight-inflation\"",
"title": ""
},
{
"docid": "4eebea777d8fc8c1f31f729b64e7cd2b",
"text": "Now I remember why I don't read zero hedge. Allow me to summarize: 1) lots of people who write articles said so 2) Brazil concluded a currency deal with the Chinese government. Until China is willing to allow relatively free capital flows they just won't be able make it a major reserve currency. If political risk in all major reserve currencies is a problem, gold provides a better option than a country with an even more interventionist streak than the countries you're worried about. The final chart is just absurd. I'll leave it as an exercise to the readeea .",
"title": ""
},
{
"docid": "ff355ec9fab54d9fe94d3a6baa313515",
"text": "Let's make a few assumptions: You have several ways of achieving (almost) that, in ascending complexity: Note that each alternative will have a cost which can be small (forwards, futures) or large (CFDs, debit) and the hedge will never be perfect, but you can get close. You will also need to decide whether you hedge the unrealised P&L on the position and at what frequency.",
"title": ""
},
{
"docid": "26319fad3c7c2643b6c4d66d4084a2d5",
"text": "1) The risks are that you investing in financial markets and therefore should be prepared for volatility in the value of your holdings. 2) You should only ever invest in financial markets with capital that you can reasonably afford to put aside and not touch for 5-10 years (as an investor not a trader). Even then you should be prepared to write this capital off completely. No one can offer you a guarantee of what will happen in the future, only speculation from what has happened in the past. 3) Don't invest. It is simple. Keep your money in cash. However this is not without its risks. Interest rates rarely keep up with inflation so the spending power of cash investments quickly diminishes in real terms over time. So what to do? Extended your time horizon as you have mentioned to say 30 years, reinvest all dividends as these have been proven to make up the bulk of long term returns and drip feed your money into these markets over time. This will benefit you from what is known in as 'dollar cost averaging' and will negate the need for you to time the market.",
"title": ""
},
{
"docid": "6207d6f6b6c4c84fc02c0153c0fc89f6",
"text": "I would strongly recommend investing in assets and commodities. I personally believe fiat money is losing its value because of a rising inflation and the price of oil. The collapse of the euro should considerably affect the US currency and shake up other regions of the world in forex markets. In my opinion, safest investment these days are hard assets and commodities. Real estate, land, gold, silver(my favorite) and food could provide some lucrative benefits. GL mate!",
"title": ""
},
{
"docid": "6d9723d9c0973eba47a049d0c9b17649",
"text": "Different risks require different hedges. You won't find a single hedge that will protect you against any risk. The best way to think about this is who would benefit if those events occurred? Those are the people you want to invest in. So if a war broke out, who would benefit? Defense contractors. Security companies. You get the idea. You also need to think about if you really need to hedge against those things now or not. For example, I wouldn't bother to hedge against global warming or peak oil. It's not like one morning you're going to wake up, turn on CNNfn and see that the stock market is down 500 points because global warming or peak oil just hit. These are things that happen gradually and you can react to them gradually as they happen.",
"title": ""
},
{
"docid": "1e1a355598fe228c3a2011f9a52fdfd1",
"text": "\"I think it's apt to remind that there's no shortcuts, if someone thinks about doing FX fx: - negative sum game (big spread or commissions) - chaos theory description is apt - hard to understand costs (options are insurance and for every trade there is equivalent option position - so unless you understand how those are priced, there's a good chance you're getting a \"\"sh1tty deal\"\" as that Goldman guy famously said) - averaging can help if timing is bad but you could be just getting deeper into the \"\"deal\"\" I just mentioned and giving a smarter counterparty your money could backfire as it's the \"\"ammo\"\" they can use to defend their position. This doesn't apply to your small hedge/trade? Well that's what I thought not long ago too! That's why I mentioned chaos theory. If you can find a party to hedge with that is not hedging with someone who eventually ends up hedging with JPM/Goldman/name any \"\"0 losing days a year\"\" \"\"bank\"\".. Then you may have a point. And contrary to what many may still think, all of the above applies to everything you can think of that has to do with money. All the billions with 0-losing days need to come from somewhere and it's definitely not coming just from couple FX punters.\"",
"title": ""
},
{
"docid": "fb7d5856aacec43324d7bec156957748",
"text": "Evaluating the value of currencies is always difficult because you are usually at the mercy of a central bank that can print new currency on a whim. I am trying to diversify my currency holdings but it is difficult to open foreign bank accounts without actually being in the foreign country. Any ideas here? You don't indicate which currencies you own but I would stick with your diversified portfolio of currencies and add some physical assets as a hedge against the fiat currencies.",
"title": ""
}
] |
fiqa
|
81a2caffbc15778032f5da61c6a70ec6
|
Why does gold have value?
|
[
{
"docid": "029604fb1bc4681115e58f3ce904a708",
"text": "Gold's value starts with the fact that its supply is steady and by nature it's durable. In other words, the amount of gold traded each year (The Supply and Demand) is small relative to the existing total stock. This acting as a bit of a throttle on its value, as does the high cost of mining. Mines will have yields that control whether it's profitable to run them. A mine may have a $600/oz production cost, in which case it's clear they should run full speed now with gold at $1200, but if it were below $650 or so, it may not be worth it. It also has a history that goes back millennia, it's valued because it always was. John Maynard Keynes referred to gold as an archaic relic and I tend to agree. You are right, the topic is controversial. For short periods, gold will provide a decent hedge, but no better than other financial instruments. We are now in an odd time, where the stock market is generally flat to where it was 10 years ago, and both cash or most commodities were a better choice. Look at sufficiently long periods of time, and gold fails. In my history, I graduated college in 1984, and in the summer of 82 played in the commodities market. Gold peaked at $850 or so. Now it's $1200. 50% over 30 years is hardly a storehouse of value now, is it? Yet, I recall Aug 25, 1987 when the Dow peaked at 2750. No, I didn't call the top. But I did talk to a friend advising that I ignore the short term, at 25 with little invested, I only concerned myself with long term plans. The Dow crashed from there, but even today just over 18,000 the return has averaged 7.07% plus dividends. A lengthy tangent, but important to understand. A gold fan will be able to produce his own observation, citing that some percent of one's holding in gold, adjusted to maintain a balanced allocation would create more positive returns than I claim. For a large enough portfolio that's otherwise well diversified, this may be true, just not something I choose to invest in. Last - if you wish to buy gold, avoid the hard metal. GLD trades as 1/10 oz of gold and has a tiny commission as it trades like a stock. The buy/sell on a 1oz gold piece will cost you 4-6%. That's no way to invest. Update - 29 years after that lunch in 1987, the Dow was at 18448, a return of 6.78% CAGR plus dividends. Another 6 years since this question was asked and Gold hasn't moved, $1175, and 6 years' worth of fees, 2.4% if you buy the GLD ETF. From the '82 high of $850 to now (34 years), the return has a CAGR of .96%/yr or .56% after fees. To be fair, I picked a relative high, that $850. But I did the same choosing the pre-crash 2750 high on the Dow.",
"title": ""
},
{
"docid": "02de874aa4484ea8fc2860b128165f7c",
"text": "\"Because people are willing to trade for it. People are willing to trade for Gold because: The value of gold goes up because the demand for it goes up, while the supply has been basically static (or growing at a low static rate) for a long time. The demand is going up because people see it as a safe place to put their money. Another reason Gold's value in dollars goes up, is because the value of the item it's traded against (dollars, euros, yen, etc) goes down, while its own value stays roughly the same. You point out Gold is not as liquid as cash, but gold (both traded on an exchange, and held physically) is easily sold. There is always someone willing to trade you cash for gold. Compare this to some of the bank stocks during the first part of our current recession. People were not willing to give much of anything for your shares. As the (annoying, misleading) advertisements say, \"\"Gold has never been worth zero\"\".\"",
"title": ""
},
{
"docid": "4f8d919b698a86fb35522e60db89d06c",
"text": "A lot of people probably don't agree with him, but Warren Buffett has some great quotes on why he doesn't invest in gold: I will say this about gold. If you took all the gold in the world, it would roughly make a cube 67 feet on a side…Now for that same cube of gold, it would be worth at today’s market prices about $7 trillion dollars – that’s probably about a third of the value of all the stocks in the United States…For $7 trillion dollars…you could have all the farmland in the United States, you could have about seven Exxon Mobils, and you could have a trillion dollars of walking-around money…And if you offered me the choice of looking at some 67 foot cube of gold and looking at it all day, and you know me touching it and fondling it occasionally…Call me crazy, but I’ll take the farmland and the Exxon Mobils. And his classic quote: [Gold] gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.",
"title": ""
},
{
"docid": "3530792df52e52d0bf8c62ff035e4fc3",
"text": "I think the primary reason it is so pricey now is that it is an inflation hedge, and considering how shaky the economies and out of control the spending is in many countries right now, people are running to it as a safe harbor. The increased demand raises the price as it does with any asset. This brings us to the titular question. Why does gold have value? The same reason anything has value. There is someone out there who wants it enough to trade something else of value to get it. It is in the news so much because it is so high right now, which unfortunately is going to cause a lot of people to foolishly invest in it at likely the worst possible time.",
"title": ""
},
{
"docid": "b0e4bd48a4341838e9c01b29e8b6da44",
"text": "\"Gold has value because for the most of the history of mankind's use of money, Gold and Silver have repeatedly been chosen by free markets as the best form of money. Gold is durable, portable, homogeneous, fungible, divisible, rare, and recognizable. Until 1971, most of the world's currencies were backed by Gold. In 1971, the US government defaulted on its obligation to redeem US Dollars (by which most other currencies were backed) in Gold, as agreed to by the Bretton Woods agreement of 1944. We didn't choose to go off the Gold Standard, we had no choice - Foreign Central Banks were demanding redeption in Gold, and the US didn't have enough - we inflated too much. I think that the current swell of interest in Gold is due to the recent massive increase in the Federal Reserve's balance sheet, plus the fast growing National debt, plus a looming Social Security / Medicare crisis. People are looking for protection of their savings, and they wish to \"\"opt-out\"\" of the government bail-outs, government deficits, government run health-care, and government money printing. They are looking for a currency that doesn't have a counter-party. \"\"Gold is money and nothing else\"\" - JP Morgan \"\"In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves. This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard.\"\" - Alan Greenspan\"",
"title": ""
},
{
"docid": "5e5271f8049ed19205130dbe8eff245b",
"text": "\"Everything is worth what its purchaser will pay for it. --Publilius Syrus. Gold has value because people want to buy it. Electronics manufacturers like the fact that it's conductive. Jewellers like that its shiny. Glenn Beck likes that he's selling it and his audience will buy it. Proponents of gold claim that it has \"\"real\"\" value, as opposed to fiat currency (which has no commodity backing). Opponents of gold claim that all wealth is illusory, and that gold has no more inherent value than the paper we use now. I'm inclined to agree with the latter (money is only money because we agree that it is, and the underlying material is meaningless), however the issue is hotly debated.\"",
"title": ""
},
{
"docid": "e20d35dcd991462583b6f350778cbfaf",
"text": "To start with gold has value because it is scarce, durable, attractive and can be made into jewellery. But that does not explain its current value. In the current economic climate, it is difficult for many investors to get a positive return on conventional investments such as equities or bonds. I theorise that, in such conditions, investors decide to park their money in gold simply because there are few other good options. This in itself drives the price of gold up, making it a better investment and causing a speculative boom. As you will see here, here, and here the gold price is negatively correlated with stock market indices.",
"title": ""
},
{
"docid": "9ded3a7c1b081bb1aedfe9475c327af3",
"text": "I use to play marbles at school. Marbles were like gold the more you had the richer you were. They were a scarce commodity only a few in circulation. Once I secured a wealth of marbles I realized they were of little real value. They were only of illusory value. As long as we all were deceived into believe they had value they I was rich. Sure marble could be used to make marble floors ;) they were lovely to look at, and every one wanted them. Then one day, I discovered the emperor had no clothes. Wow, the day that everyone sees the true value of gold, what a stock market crash that will be. I tried to avoid gold as much as possible, but this is hard to do in todays stock market. My solace is that we will all be in the same golden (Titanic) boat, only I hope to limit my exposure as much as possible. Anyone want a gold watch for a slice of bread?",
"title": ""
},
{
"docid": "0709d8ba0e52a674eebf56cf4fc4cb0c",
"text": "\"It has semantic value (because we culturally believe gold is valuable). There is a very important point here. Gold and many other coin metals. This \"\"semantic value\"\" is enshrined in law through the special tax status of coin metals. You can buy a kilo of gold and not pay sales tax. You can't buy a kilo of iron or tin and do the same. This is the important part because investors shouldn't care about semantics. I read that the taxable status varies by state or nation, so you need to be very careful. It's possible to evade taxes without realizing it. It also doesn't necessarily exempt you from the form of gold. An ingot should be tax exempt. A collector's coin may or may not be, depending on your local laws and the difference between the value of the weight of the gold, and the value of the form of the coin.\"",
"title": ""
},
{
"docid": "8adfda019d784320770ca81ca7ff918d",
"text": "\"Why does the value of gold go up when gold itself doesn't produce anything? Why do people invest in gold? Your perception, that the value of gold goes up in the long run, is based on the price of gold measured in your favorite paper currency, for example the US Dollar. An increasing price of gold means that in the visible gold market, market participants are willing to exchange more paper currency units for the same amount of gold. There are many possible reasons for this: While HFT became extremely important for the short term price movements, I will continue with long term effects, excluding HFT. So when - as a simple thought experiment - the amount of available paper currency units (US $ or whatever) doubles, and the amount of goods and services in an economy stay the same, you can expect that the price of everything in this economy will double, including gold. You might perceive that the value of gold doubled. It did not. It stayed the same. The number of printed dollars doubled. The value of gold is still the same, its price doubled. Does the amount of paper currency units grow over time? Yes: https://research.stlouisfed.org/fred2/series/BASE/ In this answer my term \"\"paper currency units\"\" includes dollars that exist only as digits in bank accounts and \"\"printing currency\"\" includes creating those digits in bank accounts out of thin air. So the first answer: gold holds its value while the value of paper currency units shrinks over time. So gold enables you to pass wealth to the next generation (while hiding it from your government). That gold does not produce anything is not entirely true. For those of us mortals who have only a few ounces, it is true. But those who have tons can lease it out and earn interest. (in practice it is leased out multiple times, so multiple that gain. You might call this fraud, and rightfully so. But we are talking about tons of gold. Nobody who controls tons of physical gold goes to jail yet). Let's talk about Fear. You see, the perceived value of gold increases as more paper currency is printed. And markets price in expected future developments. So the value of gold rises, if a sufficient number of wealthy people fear the the government(s) will print too much paper currency. Second Answer: So the price of gold not only reflects the amount of paper currency, it is also a measurement of distrust in government(s). Now you might say something is wrong with my argument. The chart mentioned above shows that we have now (mid 2015) 5 times as much printed currency units than we had 2008. So the price of gold should be 5 times as high as 2008, assuming the amount of distrust in governments stayed the same. There must be more effects (or I might be completely wrong. You decide). But here is one more effect: As the price of gold is a measurement of distrust in governments (and especially the US government since the US Dollar is perceived as the reserve currency), the US government and associated organizations are extremely interested in low gold prices to prove trust. So people familiar with the topic believe that the price of gold (and silver) is massively manipulated to the downside using high frequency trading and shorts in the futures markets by US government and wall street banks to disprove distrust. And wall street banks gain huge amounts of paper currency units by manipulating the price, mostly to the downside. Others say that countries like china and russia are also interested in low gold prices because they want to buy as much physical gold as possible. Knowing of the value that is not reflected by the price at the moment. Is there one more source of distrust in governments? Yes. Since 1971, all paper currencies are debt. They receive their value by the trust that those with debt are willing and able to pay back their debt. If this trust is lost, the downward manipulation (if you think that such a thing exists) of the gold and silver prices in the futures markets might fail some day. If this is the case (some say when this is the case). you might see movements in gold and silver prices that bring them back to equilibrium with the amount of printed paper currencies. In times of the roman empire you got a good toga and a pair of handmade shoes for an ounce of gold. In our days, you get a nice suite and a good pair of shoes for an ounce of gold. In the mean time, the value of each paper currency in the history of each country went to zero and the US $ lost 98% of its initial value. As long as there is not enough distrust, more paper currency is made in equity markets and bond markets on average. (Be aware that you earn that currency only after you were able to sell at this price, not while you hold it) Gerd\"",
"title": ""
},
{
"docid": "cb068a39368323846339508ad7548568",
"text": "\"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.\"",
"title": ""
},
{
"docid": "94f18051e3c46aff0d139f67e81dc269",
"text": "\"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.\"",
"title": ""
},
{
"docid": "60abc7a7295934ebd9bde221cdeb023d",
"text": "\"Gold can be thought of to have value in one of two ways; (1) as a means and (2) as an end. Means takes the shape of currency. In this form, we value gold in the same way we value the dollar, it allows us to purchase things we want. As a medium of exchange, gold has no definitive value and is only assigned one during the process of an exchange. For example, I would be valuing one ingot of gold to be worth a dog if I traded a dog for one ingot of gold. The value of gold in this sense is subjective as each person decides for themselves what gold is worth during the transaction. Gold as an end is valued for its own sake. A good example of this is a jeweler who purchases gold directly because of the intrinsic property(s) gold possesses. This is closer to the \"\"true value\"\" of gold than using it as a means, but virtually no one in our society views gold in this manor because virtually no one can use gold in this manor. \"\"You know what I could use right now, a block of gold.\"\" - said no one ever. But even if you are one of the select few who value gold for its own sake, this is usually done because gold provides a function. For example, if people no longer want to ware jewelry, then a jeweler will likely have to find a new line of work where he would likely no longer view gold as valuable as an ends. To sum up, gold has a perceived value for most people and an \"\"intrinsic value\"\" to a select few (for the time being).\"",
"title": ""
}
] |
[
{
"docid": "98d2744aa08398bbbfb3bacfd6f5d240",
"text": "Of course. But then, paper also has utility. So do seashells and pinecones. There is no obvious reason why, even in a perfect world, we would go looking for a malleable, highly-conductive, corrosion-resistant metal as something to peg the value of our banknotes to. The argument in favor of a gold standard is not whether gold is intrinsically more valuable than paper or seal skins or anything else, it's that gold is fairly inelastic in terms of supply, so it limits the ability of central bankers to mess up the value of the currency through interventionist funny business. If you picked up a rock and started going around telling people that we should use it as money because it's highly malleable and conductive and can be used in computer parts, they would look at you like you're a crazy person. That's not why gold is/was/should be a currency. Gold was indisputably the perfect currency for thousands of years, because it was easy to identify, easy to handle, hard to falsify, and rare. Those were important characteristics when strangers had to carry physical money to different places without any ATMs, credit-cards, or paypal accounts. They are somewhat less critical today, but still... The one characteristic that might *still* argue in favor of a gold standard is rarity: Since the amount of gold in the world is somewhat fixed, forcing the currency supply to be restricted to the gold supply semi-prevents governments and central bankers from getting into too much mischief (or at least, that's the theory). I will leave it to others to argue over whether a return to the gold standard would be a good idea, but the argument has nothing to with the intrinsic utility of gold. I'm sure we can all agree that gold is a fine metal with many good qualities.",
"title": ""
},
{
"docid": "3f5008996d6dec474559349bc2d2a081",
"text": "I would imagine (correct me if I'm wrong) that one of the benefits of gold was it was very easy to detect counterfeiting. It had a known weight, easily identified color, and there were many easily accessible ways to verify that it was, in fact, gold. Paper money has been a relatively recent development, monetarily, and it seems like it has matured as methods of preventing false currency have likewise matured. EDIT: Ah, and there it is, in one of your comments further down. Cool.",
"title": ""
},
{
"docid": "eb407f054ab03cb8a94931ab2f94b3b9",
"text": "Yes and i told you that bitcoin could also be perceived as valuable too, like seashells did in the past. Personally, i think bitcoin has value because it is a giant money laundering scheme. All the big players are investing into it because they need to funnel their drug money.",
"title": ""
},
{
"docid": "d72158325951e5027d5bfbeec4c607cc",
"text": "\"Currencies such as the dollar, the Euro, and most others are no longer tied to gold in any way. They are just paper that is worth what it's worth because everyone agrees to accept it. Previously, currencies used to be commonly tied to gold reserves, and could theoretically be \"\"cashed in\"\" for gold, although not usually as much as the currency denomination (i.e., gold on the open market tended to sell for higher prices than what the government would give you for it).\"",
"title": ""
},
{
"docid": "476b54200809b4ea0520e9c0a3405378",
"text": "Mainly because I have it and you don't, I can make you do stuff for it because more of us perceive its value than bother about the paper you are holding. Picture if you will a moment in time, when the paper you are holding, represented the amount of gold you had at home, as time went by you spent all your gold and the amount the paper represented, became less and less and the amount of lunch you could buy with it became less and less. Today the day has arrived, that you have no gold left and what your paper represents is an empty coffer . . Move along . .people who can pay for their lunch are waiting and look, the paper they hold represents gold they have.",
"title": ""
},
{
"docid": "c578c93da22d50ffcb71f8e3c5627bdc",
"text": "\"> Value is entirely subjective to individuals. Nothing has \"\"intrinsic value\"\". Question: *Water, oxygen -- caveats to intrinsic value because they are that which is consumed by virtue of one's being alive and staying alive and are of limited supply?* Can we expand on \"\"value\"\" and how it operates on the barest of essentials to sustain life. To rephrase: [1] That the tripartite nature of the system of money--token (countable), vehicle (exchangeable), and repository (valuable)--depends on life existing ergo exist as conditions necessary for the creation of an economy but yet will be necessarily valued by the economy because of the projected increases in population, that is, future demand rising as function of the earthly supply means that the value of these goods can or cannot be projected and, more broadly, [2] how do economists evaluate the role of money in relation to timing, especially when it pertains to these unproduced or \"\"given\"\" yet essential goods and especially coupled with the knowledge that the population will continue to proliferate? Really, I'm not trying to undermine or debunk or be plain ridiculous; I'm curious as to how economic theory will (or has begun to) try to solve a \"\"singularity\"\" (threshold) problem that has yet to occur but no doubt will? Maybe it's an unfair question but even so, I'm sure someone on this thread might steer us towards a starting point. And I only ask because the economic breakdown by otherwiseyep and the discussion in the thread herein are, say, quite as substantial as they are clear.\"",
"title": ""
},
{
"docid": "de76dd8be879644dd6aff119fe53a486",
"text": "Money itself has no value. A gold bar is worth (fuzzy rushed math, could be totally wrong on this example figure) $423,768.67. So, a 1000 dollars, while worthless paper, are a token saying that you own %.2 of a gold bar in the federal reserve. If a billion dollars are printed, but no new gold is added to the treasury, then your dollar will devalue, and youll only have %.1 percent of that gold bar (again, made up math to describe a hypothetical). When dollars are introduced into the economy, but gold has not been introduced to back it up, things like the government just printing dollars or banks inventing money out of debt (see the housing bubble), then the dollar tokens devalue further. TL;DR: Inflation is the ratio of actual wealth in the Treasury to the amount of currency tokens the treasury has printed.",
"title": ""
},
{
"docid": "edf4fba292caeb83937280fef7ca1934",
"text": "\"The general argument put forward by gold lovers isn't that you get the same gold per dollar (or dollars per ounce of gold), but that you get the same consumable product per ounce of gold. In other words the claim is that the inflation-adjusted price of gold is more-or-less constant. See zerohedge.com link for a chart of gold in 2010 GBP all the way from 1265. (\"\"In 2010 GBP\"\" means its an inflation adjusted chart.) As you can see there is plenty of fluctuation in there, but it just so happens that gold is worth about the same now as it was in 1265. See caseyresearch.com link for a series of anecdotes of the buying power of gold and silver going back some 3000 years. What this means to you: If you think the stock market is volatile and want to de-risk your holdings for the next 2 years, gold is just as risky If you want to invest some wealth such that it will be worth more (in real terms) when you take it out in 40 years time than today, the stock market has historically given better returns than gold If you want to put money aside, and it to not lose value, for a few hundred years, then gold might be a sensible place to store your wealth (as per comment from @Michael Kjörling) It might be possible to use gold as a partial hedge against the stock market, as the two supposedly have very low correlation\"",
"title": ""
},
{
"docid": "af6fc06890c6a15e9c4c5206ac646982",
"text": "Since 2007 the world has seen a period of striking economic and financial volatility featuring the deepest recession since the 1930s despite this gold has performed strongly with its price roughly doubling since the global financial crisis began in mid-2007. 1. Gold and real interest rates: One of the factor that influences gold prices is real interest rate which is to some extent related to inflation. Since gold lacks a yield of its own, the opportunity cost of holding gold increases with a real interest rate increase and decreases with a fall in real interest rates. 2. Gold and the US dollar: The external value of the US dollar has been a significant influence on short-term gold price movements. The IMF estimated6 in 2008 that 40-50% of the moves in the gold price since 2002 were dollar-related, with a 1% change in the effective external value of the dollar leading to a more than 1% change in the gold price (Source). 3. Gold and financial stress: It is a significant and commonly observed influence on the short-term price of gold. In periods of financial stress gold demand may rise for a number of reasons: 4. Gold and political instability: It is another factor that can boost gold prices. Investor concerns about wars, civil conflicts and international tensions can boost demand for gold for similar reasons to those noted above for periods of financial stress. Gold‟s potential function as a „currency of last resort‟ in case of serious system collapse provides a particular incentive to hold it in case the political situation is especially severe. (Source) 5. Gold and official sector activity: The behaviour of central banks and other parts of the official sector can have an important impact on gold prices. One reason for this is that central banks are big holders of gold, possessing some 30,500 metric tons in 2010, which is approximately 15% of all above-ground gold stocks. As a result, central bank policies on gold sales and purchases can have significant effects, and these policies have been subject to considerable shifts over the decades. (Source) (Source of above graphs)",
"title": ""
},
{
"docid": "a05e4b7eb3186e433bee9ebc1234649c",
"text": "There is no such thing as intrinsic value. Gold has value because it is rare and has a market. If any of those things decline, the value plunges. The question of whether gold is overvalued or not is complicated and depends on a lot of factors. The key question in my mind is: Is gold more valuable in terms of US dollars because it is becoming more valuable, or because the value of US dollars, the prevailing medium of exchange, is declining?",
"title": ""
},
{
"docid": "6772c658a9ce2de9ba987109f7782764",
"text": "\"Gold may have some \"\"intrinsic value\"\" but it cannot be accurately determined by investors by any known valuation techniques. In fact, if you were to apply the dividend discount model of John Burr Williams - a variation of which is the basis of Discounted Cash Flow (DCF) analysis and the basis of most valuation techniques - gold would have zero intrinsic value because it produces no cash flow. Legendary focus investor Warren Buffett argues that investing in gold is pure speculation because of the reason mentioned above. As others have mentioned, gold prices are affected by supply and demand, but the bigger influence on the price of gold is how the economy is. Gold is seen as a store of value because, according to some, it does not \"\"lose value\"\" unlike paper currency during inflation. In inflationary times, demand increases so gold prices do go up, which is why gold behaves similar to a commodity but has far less uses. It is difficult to argue whether or not gold gains or loses value because we can't determine the intrinsic value of gold, and anyone who attempts to justify any given price is pulling blinders over your eyes. It is indisputable that, over history, gold represents wealth and that in the past century and the last decade, gold prices rise in inflationary conditions as people dump dollars for gold, and it has fallen when the purchasing power of currency increases. Many investors have talked about a \"\"gold bubble\"\" by arguing that gold prices are inflated because of inflation and the Fed's money policy and that once interest rates rise, the money supply will contract and gold will fall, but again, nobody can say with any reasonable accuracy what the fair value of gold at any given point is. This article on seeking alpha: http://seekingalpha.com/article/112794-the-intrinsic-value-of-gold gives a quick overview, but it is also vague because gold can't be accurately priced. I wouldn't say that gold has zero intrinsic value because gold is not a business so traditional models are inappropriate, but I would say that gold *certainly * doesn't have a value of $1,500 and it's propped so high only because of investor expectation. In conclusion, I do not believe you can accurately state whether gold is undervalued or overvalued - you must make judgments based on what you think about the future of the market and of monetary policy, but there are too many variables to be accurate consistently.\"",
"title": ""
},
{
"docid": "11dcc15ec506ffc8bc2c15e086f79915",
"text": "\"Gold has no \"\"intrinsic\"\" value. None whatsoever. This is because \"\"value\"\" is a subjective term. \"\"Intrinsic value\"\" makes just as much sense as a \"\"cat dog\"\" animal. \"\"Dog\"\" and \"\"cat\"\" are referring to two mutually exclusive animals, therefore a \"\"cat dog\"\" is a nonsensical term. Intrinsic Value: \"\"The actual value of a company or an asset based on an underlying perception of its true value ...\"\" Intrinsic value is perceived, which means it is worth whatever you, or a group of people, think it is. Intrinsic value has nothing, I repeat, absolutely nothing, to do with anything that exists in reality. The most obvious example of this is the purchase of a copy-right. You are assigning an intrinsic value to a copy-right by purchasing it. However, when you purchase a copy-right you are not buying ink on a page, you are purchasing an idea. Someone's imaginings that, for all intensive purposes, doesn't even exist in reality! By definition, things that do not exist do not have \"\"intrinsic\"\" properties - because things that don't exist, don't have any natural properties at all. \"\"Intrinsic\"\" according to Websters Dictionary: \"\"Belonging to the essential nature or constitution of a thing ... (the intrinsic brightness of a star).\"\" An intrinsic property of an object is something we know that exists because it is a natural property of that object. Suns emit light, we know this because we can measure the light coming from it. It is not subjective. \"\"Intrinsic Value\"\" is the OPPOSITE of \"\"Intrinsic\"\"\"",
"title": ""
},
{
"docid": "fec1087f096889c0e2f7d49d8e0c4ca4",
"text": "One possible downside is contribution limit. The 401K contribution limit is $18,000 for 2016, which is more than three times the limit for IRA contributions ($5,500).",
"title": ""
},
{
"docid": "4f852b2dde85d5a0bd328e9ec0f79c75",
"text": "Your last sentence is key. If you have multiple accounts, it's too easy to lose track over the years. I've seen too many people pass on and the spouse has a tough time tracking the accounts, often finding a prior spouse listed as beneficiary. In this case, your gut is right, simpler is better.",
"title": ""
}
] |
fiqa
|
8f880a2f8e2f923bd89319f39e000cec
|
Why does my car loan interest go up despite making payments on-time?
|
[
{
"docid": "228a966b42e8fb98215b502c9cd1a61a",
"text": "Interest is calculated daily. Doing the math: Between 6-17 and 7-25 are 38 days, 200.29 / 38 = 5.27 interest per day. Between 7-25 and 8-17 are 23 days. 120.02 / 23 = 5.22 interest per day. The minimal difference is because the principal has already gone down a little bit. So you should expect ~5.20 x number of days for the next interest number coming up; slowly decreasing as the remaining principal debt decreases. Note that this is equivalent of an annual interest rate of over 20 %, which is beyond acceptable. In the current economy, this is ridiculously high. I recommend trying to get a refinancing with another provider; you should be able to get it for a third of that.",
"title": ""
},
{
"docid": "a486ff999cb653fb447d21de2087218a",
"text": "The interest probably accrues daily, regardless of whether your payments are on time.",
"title": ""
}
] |
[
{
"docid": "8ac5cffbd419a4f21a5789c2b9dc010d",
"text": "Here is another way to look at it. Does this debt enable you to buy more car than you can really afford, or more car than you need? If so, it's bad debt. Let's say you don't have the price of a new car, but you can buy a used car with the cash you have. You will have to repair the car occasionally, but this is generally a lot less than the payments on a new car. The value of your time may make sitting around waiting while your car is repaired very expensive (if, like me, you can earn money in fine grained amounts anywhere between 0 and 80 hours a week, and you don't get paid when you're at the mechanic's) in which case it's possible to argue that buying the new car saves you money overall. Debt incurred to save money overall can be good: compare your interest payments to the money you save. If you're ahead, great - and the fun or joy or showoff potential of your new car is simply gravy. Now let's say you can afford a $10,000 car cash - there are new cars out there at this price - but you want a $30,000 car and you can afford the payments on it. If there was no such thing as borrowing you wouldn't be able to get the larger/flashier car, and some people suggest that this is bad debt because it is helping you to waste your money. You may be getting some benefit (such as being able to get to a job that's not served by public transit, or being able to buy a cheaper house that is further from your job, or saving time every day) from the first $10,000 of expense, but the remaining $20,000 is purely for fun or for showing off and shouldn't be spent. Certainly not by getting into debt. Well, that's a philosophical position, and it's one that may well lead to a secure retirement. Think about that and you may decide not to borrow and to buy the cheaper car. Finally, let's say the cash you have on hand is enough to pay for the car you want, and you're just trying to decide whether you should take their cheap loan or not. Generally, if you don't take the cheap loan you can push the price down. So before you decide that you can earn more interest elsewhere than you're paying here, make sure you're not paying $500 more for the car than you need to. Since your loan is from a bank rather than the car dealership, this may not apply. In addition to the money your cash could earn, consider also liquidity. If you need to repair something on your house, or deal with other emergency expenditures, and your money is all locked up in your car, you may have to borrow at a much higher rate (as much as 20% if you go to credit cards and can't get it paid off the same month) which will wipe out all this careful math about how you should just buy the car and not pay that 1.5% interest. More important than whether you borrow or not is not buying too much car. If the loan is letting you talk yourself into the more expensive car, I'd say it's a bad thing. Otherwise, it probably isn't.",
"title": ""
},
{
"docid": "de45ba78caece33cee1171e59931e8ce",
"text": "maybe everyone who has responded needs to look closer at the income base repayment plan for student loans. What this means is he payment does not even cover his interest rate so each month he makes his payment the loan grows, does not decrease. This is not a simple interest loan which is irritating because car dealerships do not even use a non-simple interest loan any longer. So, well your suggestions are well intended what is your suggestion now knowing that his monthly payments is not reducing his loan but actually his loan is growing exponentially each month. I also like the comment where the average student loan is $30,000, I would like to know in what state that is. That may work for a community college or a student who is reliant on parents to supplement their income so they can go to classes, however for someone who is working and going to school that person must opt out for night classes and online classes which definitely increases the cost of your classes. Right now the cost per credit hour is in the $550- 585 range.",
"title": ""
},
{
"docid": "4b27fe4787eb6e07ed71131bc7357766",
"text": "\"There are other good answers to the general point that the essence of what you're describing exists already, but I'd like to point out a separate flaw in your logic: Why add more complications so that \"\"should I call this principal or interest\"\" actually makes a difference? Why's the point (incentive) for this? The incentive is that using excess payments to credit payments due in the future rather than applying it to outstanding principal is more lucrative for the lender. Since it's more lucrative and there's no law against it most (all) lenders use it as the default setting.\"",
"title": ""
},
{
"docid": "042f8e55c75b6d2ffa8b5a61201fb7ec",
"text": "Well typically you're borrowing a shit ton of money for 30 years so yeah you're paying a lot in interest over that period. But your situation sounds especially bad, that's over a 10% constant assuming 80% LTV. What are you being quoted, like >9% interest?",
"title": ""
},
{
"docid": "5912fe013d03f8d669c32cb45c42b042",
"text": "I had a car loan through GMAC and extra money was applied to future payments. At one point, I received a statement telling me I had 15 months until my next payment was due because I had not marked extra payments as going to principal.",
"title": ""
},
{
"docid": "55c6a70dc07cee2d9521fb386f8a4a85",
"text": "\"they apply it to my next payment That's what my bank did with my auto loan. I got so far ahead that once I was able to skip a payment and use the money I would have sent the bank that month for something else. Still, though, I kept on paying extra, and eventually it was paid off faster than \"\"normal\"\". EDIT: what does your loan agreement say is supposed to happen to extra payments?\"",
"title": ""
},
{
"docid": "cf47890f17a70e7c12db0bdeeb0ffff5",
"text": "\"In addition to all the points made in other answers, in some jurisdictions (including the UK where I live) the consumer credit laws require the lender to allow the borrower to pay off the loan at any time. If the lender charges interest and the borrower pays off the loan early then the lender loses the interest that would have been paid during the rest of the loan period. However if the actual interest is baked into the sale price of an item and the loan to pay for it is nominally \"\"0%\"\" then the borrower still pays all the interest even if they pay off the loan immediately. If you think this game is being played then you can ask for a \"\"cash discount\"\" (or similar wording: I once had problems with a car salesman who thought I meant a suitcase full of used £20s), meaning you want to avoid paying the interest as you are not taking a loan.\"",
"title": ""
},
{
"docid": "77c9635ad1324e547c59fc9eeb3af439",
"text": "Depending on who you have the loan through and how they figure the interest charges (whether daily, monthly, bi-monthly, etc. normally monthly I would assume), your interest is probably figured either daily or once a month. Let's assume that it is figured daily, otherwise it wouldn't make sense to make bi-weekly payments. At 4% Annual Interest on a $150,000 home loan the interested added each day is about $16.44, but it doesn't stop there because it is compounding interest daily so the next day it becomes 4% of 150,0016.44 (which is negligibly larger amount) and they will tack on another $16.44. So what will happen is that the amount of interest you owe grows rather quickly, especially if you miss a monthly payment. Everyone knows that the faster you pay something off the less interest you pay, but not everyone knows the formula for compounding interest. a quick Google search rendered this site with a simple explanation Compound Interest Formula unfortunately this formula doesn't take into account the payments being made. The big thing with making your payments bi-weekly rather than a bigger payment once a month is that you pay off some of that principle right away and it won't collect interest for 14 more days. if the interest is only calculated once a month, make your full payment before the interest is calculated, the same goes for your credit cards.",
"title": ""
},
{
"docid": "8fb4ed771f66e236487e2f709666e10e",
"text": "Just call your credit union and ask if they will let you refinance at the lower rate. If they won't, then just increase your payment every month so that your car is paid off early (in 36 months instead of 60). You won't get the lower rate, but since your loan will be paid early, you'll be saving interest anyway.",
"title": ""
},
{
"docid": "a8749a180a0d266d8ec2a05865e9af19",
"text": "\"The real answer is to talk to the bank. In the case of the last car loan I got, the answer is \"\"no\"\". When I asked them about rates, they gave me a printed sheet that listed the loan rates they offered based on how old the car was, period. I forget the exact numbers but it was like: New car: 4%, 1 year old: 4.5%, 2-3 years old 5%, etc. I suspect that at most banks these days, it's not up to the loan officer to come up with what he considers reasonable terms for a loan based on whatever factors you may bring up and he agrees are relevant. The bank is going to have a set policy, under these conditions, this is the rate, and that's what you get. So if the bank includes the size of the down payment in their calculations, then yes, it will be relevant. If they don't, than it won't. The thing to do would be to ask your bank. If you're only borrowing $2000, and you've managed to save up $11,000, I'd guess you can pay off the $2,000 pretty quickly. So as Keshlam says, the interest rate probably isn't all that important. If you can pay it off in a year, then the difference between 5% and 1% is only $80. If you're buying a $13,000 car, I can't imagine you're going to agonize over $80. BTW I've bought two cars in the last few years with about half the cost in cash and putting the rest on my credit card. (One for me and one for my daughter.) Then I paid off the credit card in a couple of months. Sure, the interest rate on a credit card is much higher than a car loan, but as it was only for a few months, it made very little real difference, and it took zero effort to arrange the loan and gave me total flexibility in the repayment schedule. Credit card companies often offer convenience checks where you pay like 3% or so transaction fee and then 0% interest for a year or more, so it would just cost the 3% up front fee.\"",
"title": ""
},
{
"docid": "12846ee71ec9c5769954964fdc8c2f01",
"text": "\"Patience has never been my strong suit Unfortunately this is what you need to build up credit. The activities that increase your credit score are paying your bills on time and not using too much of the available credit that you do have. The rest (age of accounts, recent pulls, etc.) are short-term indicators that indicate changes in behavior that will make lenders pause and understand what the reasons behind the events are. Also keep in mind that your credit score shouldn't run your life. It should be a passive indicator of your financial habits - not something that you actively manipulate. Is there anything I can do to raise my score without having to take out a loan with interest? Pay your bills on time, and don't take out more credit than you need. You're already in the \"\"excellent\"\" category, so there's no reason to panic or try to manipulate it. Even if you temporarily dip below, if you need to make a big purchase (house), your loan-to-value and debt/income ratio will be much bigger factors in what interest rate you can get. As far as the BofA card goes, if you don't need it, cancel it. It might cause a temporary dip in your credit, but it will go away quickly, and you're better off not having credit cards that you don't need.\"",
"title": ""
},
{
"docid": "0d6eaeb4ba54c786c2800de434892ca9",
"text": "\"I'm going to give a simpler answer than some of the others, although somewhat more limited: the complicated loan parameters you describe benefit the lender. I'll focus on this part of your question: You should be able to pay back whenever; what's the point of an arbitrary timeline? Here \"\"you\"\" refers to the borrower. Sure, yes, it would be great for the borrower to be able to do whatever they want whenever they want, increasing or decreasing the loan balance by paying or not paying arbitrary amounts at their whim. But it doesn't benefit the lender to let the borrower do this. Adding various kinds of restrictions and extra conditions to the loan reduces the lender's uncertainty about when they'll be receiving money, and also gives them a greater range of legal recourse to get it sooner (since they can pursue the borrower right away if they violate any of the conditions, rather than having the wait until they die without having paid their debt). Then you say: And if you want, you can set a legal deadline. But the mere deadline in the contract doesn't affect how much interest is paid—the interest is only affected by how much money is borrowed and how long has passed. I think in many cases that is in fact how it works, or at least it is more how it works than you seem to think. For instance, you can take out a 30-year loan but pay it off in less than 30 years, and the amount you pay will be less if you pay it off sooner. However, in some cases the lender will charge you a penalty for doing so. The reason is the same as above: if you pay off the loan sooner, you are paying less interest, which is worse for the lender. Again, it would be nice for the borrower if they could just pay it off sooner with no penalty, but the lender has no reason to let them do so. I think there are in fact other explanations for these more complicated loan terms that do benefit the borrower. For instance, an amortization schedule with clearly defined monthly payments and proportions going to interest and principal also reduces the borrower's uncertainty, and makes them less likely to do risky things like skip lots of payments intending to make it up later. It gives them a clear number to budget from. But even aside from all that, I think the clearest answer to your question is what I said above: in general, it benefits the lender to attach conditions and parameters to loans in order to have many opportunities to penalize the borrower for making it hard for the lender to predict their cash flow.\"",
"title": ""
},
{
"docid": "4c0ad5c834bc207b3f756d7ce3c6ed65",
"text": "\"You won't be able to sell the car with a lien outstanding on it, and whoever the lender is, they're almost certain to have a lien on the car. You would have to pay the car off first and obtain a clear title, then you could sell it. When you took out the loan, did you not receive a copy of the finance contract? I can't imagine you would have taken on a loan without signing paperwork and receiving your own copy at the time. If the company you're dealing with is the lender, they are obligated by law to furnish you with a copy of the finance contract (all part of \"\"truth in lending\"\" laws) upon request. It sounds to me like they know they're charging you an illegally high (called \"\"usury\"\") interest rate, and if you have a copy of the contract then you would have proof of it. They'll do everything they can to prevent you from obtaining it, unless you have some help. I would start by filing a complaint with the Better Business Bureau, because if they want to keep their reputation intact then they'll have to respond to your complaint. I would also contact the state consumer protection bureau (and/or the attorney general's office) in your state and ask them to look into the matter, and I would see if there are any local consumer watchdogs (local television stations are a good source for this) who can contact the lender on your behalf. Knowing they have so many people looking into this could bring enough pressure for them to give you what you're asking for and be more cooperative with you. As has been pointed out, keep a good, detailed written record of all your contacts with the lender and, as also pointed out, start limiting your contacts to written letters (certified, return receipt requested) so that you have documentation of your efforts. Companies like this succeed only because they prey on the fact many people either don't know their rights or are too intimidated to assert them. Don't let these guys bully you, and don't take \"\"no\"\" for an answer until you get what you're after. Another option might be to talk to a credit union or a bank (if you have decent credit) about taking out a loan with them to pay off the car so you can get this finance company out of your life.\"",
"title": ""
},
{
"docid": "bc62090f22d1078f7f51c9926b2899ac",
"text": "There is a reason - your credit score. If you ever take out a mortgage, you might pay dearly for your behavior. The bank where you have the credit card reports the amount on the bill to the credit rating agencies. If you pay before the bill date, they will always report zero. You should wait at least till the day after the billing cycle ends, and then pay off (you don't need to have the paper bill in your hands - you can see online when the cycle closed). Depending on your other financial behavior, this will have between zero and significant effect, on the percentages you get offered for car loans, mortgages, etc.",
"title": ""
},
{
"docid": "736c6ffbfac68ce8ac555222faef9224",
"text": "I think this has to do with the fact that the interest is charged to your balance and grows everyday. As a result, the computer broke it down so that it can capitalize on that remaining balance. If your regular student loan payment was $500 a month at 5% interest, but your balance became $499, spreading out the $499, they can make more money off you. It might not be a lot, or in your case essentially 0, but it could be better than nothing.",
"title": ""
}
] |
fiqa
|
b103afc1c3e718e2d67204b6c31fd3ed
|
How do I figure out the market value of used books?
|
[
{
"docid": "64a9c4b0039ace289ff8cdba95b38b0c",
"text": "Half of original MSRP at Amazon is a good option for books that are in good condition. Another option would be to use eBay, specifically Half.com.",
"title": ""
},
{
"docid": "9cb67b41fee650936cc6c7cc95c0eed7",
"text": "Regarding the textbooks and technical books, it might be worth checking out sites like Chegg.com or other textbook rental websites. They might buy it from you directly versus trying to sell it on an ebay or amazon. For fiction or nonfiction, amazon and ebay can be tough, but probably worth a look. See what comparables are for your books or similar titles, and if it works, try selling a few. The big problem is that so many sellers are on Amazon these days, that major discounts are commonplace. I've bought hardback 1st editions for less than the cost of economy shipping, so the profit margin is dwindling at best if it's an unpopular or low demand book.",
"title": ""
},
{
"docid": "75c9253a244592dfd74e8e91698516a3",
"text": "Text Book values drop rather rapidly and fluctuate quite a bit based on when you are selling (January and August-September when semesters generally start) them. I generally sell my old text books on Amazon for 10-15% less than the peak price over the last 6 months or a year if that much data is available (I use camelcamelcamel.com to get historical data). They generally sell pretty quick so I would say it is a fair price.",
"title": ""
}
] |
[
{
"docid": "de3dd9ff566f4e4440c3035ea0f73ece",
"text": "\"For those on a budget, check if your local library has access to / or a copy of the \"\"Standard & Poor's Daily Stock Price Record\"\". Access to that or a similar service may be available as part of your library patronage. If not available it may be available at your metropolitan central library. Comprehensive stock pricing data which provides adjustments for splits, mergers, capital distributions and other relevant events is still a premium product. External link to New York Public Library blog post on subject: http://www.nypl.org/blog/2012/04/09/finding-historical-stock-prices\"",
"title": ""
},
{
"docid": "dfe42c873491ca1cefe0d3f986e96815",
"text": "\"I'm not an economist, but I understand the idea of value or \"\"price\"\" is purely \"\"what people agree it to be\"\". The quants and analysts I've worked with always talk about \"\"discovering the price\"\" - it's an unknown until someone says \"\"I will pay X\"\". Are my 2nd hand Nikes worth $20? Put em on ebay to find out. If someone buys them, then yes, 2nd hand Nikes are worth $20. If they don't sell then they're not worth $20. Obviously ebay is not the most efficient market out there. The exchanges attempt to be that with prices varying by fractions of cent in fractions of seconds (milliseconds). EDIT* Perhaps another way to look at it is \"\"What is the 'correct' value of a computer game, say 'Skyrim'?\"\" Your idea of the value of labour and production costs produces some figure. But in the real world, what actually happens? On release day the game is priced at, say, $60. And lots of people say \"\"I will pay $60\"\". Many people don't, but many people do. Months later, Steam has a sale and they suggest Skyrim is now worth $30. Lot's of people who didn't think it was worth $60 do think it is worth $30. The amount of labour that went into is hasn't changed. So what it the true or 'correct' value/price of the game? What is the correct value/price of *amything*? It is *what people will pay for it*.\"",
"title": ""
},
{
"docid": "ebb41def0224a718e83f9f53e5a8e812",
"text": "\"The textbook answer would be \"\"assets-liabilities+present discounted value of all future profit\"\". A&L is usually simple (if a company has an extra $1m in cash, it's worth $1m more; if it has an extra $1m in debt, it's worth $1m less). If a company with ~0 assets and $50k in profit has a $1m valuation, then that implies that whoever makes that valuation (wants to buy at that price) really believes one of two things - either the future profit will be significantly larger than $50k (say, it's rapidly growing); or the true worth of assets is much more - say, there's some IP/code/patents/people that have low book value but some other company would pay $1m just to get that. The point is that valuation is subjective since the key numbers in the calculations are not perfectly known by anyone who doesn't have a time machine, you can make estimates but the knowledge to make the estimates varies (some buyers/sellers have extra information), and they can be influenced by those buyers/sellers; e.g. for strategic acquisitions the value of company is significantly changed simply because someone claims they want to acquire it. And, $1m valuation for a company with $500m in profits isn't appropriate - it's appropriate only if the profits are expected to drop to zero within a couple years; a stagnant but stable company with $500m profits would be worth at least $5m and potentially much more.\"",
"title": ""
},
{
"docid": "35ff05e2d5c742c8cf523afc69864cb9",
"text": "Conservative = erring on the side of ascribing a higher EV to the business. Because if you're someone looking to acquire the business, for example, and let's say we're talking about a business that has debt which trades at a discount, it's more conservative to assume that the debt can't necessarily be restructured. To use an extreme example, as you're valuing the business, would it be conservative or aggressive to assume that the debt got magically wiped out altogether? So that's why I'm saying that it's more conservative to use the book value of the debt.",
"title": ""
},
{
"docid": "cdccd9264950fda9d11e48e23df2b0d9",
"text": "What if Kirtsaeng were only acting as a foreign agent of the purchaser? Seems like that would be an easy work around. Instead of selling the book, he could charge a service fee for making the purchase for someone else.",
"title": ""
},
{
"docid": "3ed36d63a9b925c315ab217b16467959",
"text": "Have you looked at what is in that book value? Are the assets easily liquidated to get that value or could there be trouble getting the fair market value as some assets may not be as easy to sell as you may think. The Motley Fool a few weeks ago noted a book value of $10 per share. I could wonder what is behind that which could be mispriced as some things may have fallen in value that aren't in updated financials yet. Another point from that link: After suffering through the last few months of constant cries from naysayers about the company’s impending bankruptcy, shareholders of Penn West Petroleum Ltd. (TSX:PWT)(NYSE:PWE) can finally look toward the future with a little optimism. Thus, I'd be inclined to double check what is on the company books.",
"title": ""
},
{
"docid": "487f70fefde2260535df8ddd74de4414",
"text": "NAV is how much is the stuff of the company worth divided by the number of shares. This total is also called book value. The market cap is share price times number of shares. For Amazon today people are willing to pay 290 a share for a company with a NAV of 22 a share. If of nav and price were equal the P/B (price to book ratio) would be 1, but for Amazon it is 13. Why? Because investors believe Amazon is worth a lot more than a money losing company with a NAV of 22.",
"title": ""
},
{
"docid": "59c4d3ea50aad7d39d3a7495aa8e3924",
"text": "Book value = sell all assets and liquidate company . Then it's the value of company on book. Price = the value at which it's share gets bought or sold between investors. If price to book value is less than one, it shows that an 100$ book value company is being traded at 99$ or below. At cheaper than actually theoretical price. Now say a company has a production plant . Situated at the most costliest real estate . Yet the company's valuation is based upon what it produces, how much orders it has etc while real estate value upon which plant is built stays in book while real investors don't take that into account (to an extend). A construction company might own a huge real estate inventory. However it might not be having enough cash flow to sustain monthly expense. In this scenario , for survival,i the company might have to sell its real estate at discount. And market investors are fox who could smell trouble and bring price way below the book value Hope it helps",
"title": ""
},
{
"docid": "9a52969d6de27e78057142e53b34db9c",
"text": "You're realizing the perils of using a DCF analysis. At best, you can use them to get a range of possible values and use them as a heuristic, but you'll probably find it difficult to generate a realistic estimate that is significantly different than where the price is already.",
"title": ""
},
{
"docid": "77eace4c4744e927720c62b309b3214e",
"text": "Certainly sounds worthwhile to get a CPA to help you with setting up the books properly and learning to maintain them, even if you do it yourself thereafter. What's your own time worth?",
"title": ""
},
{
"docid": "c019cab98369192a419c76fde2604a04",
"text": "\"I'm not sure what the situation is in Canada, but in the US, the IRS does not look kindly on people overvaluing donations of used goods. The rule is obviously abused quite a bit, but that doesn't mean it's legal! Different used books have different values, usually depending on supply and demand, and there are online databases that make it easy to check the value of a book using a barcode scanner. If you took a book to a used bookstore and they didn't want to buy it, that's because supply greatly exceeds demand... it might be last year's bestseller, for example. In this situation, donating the book to charity and claiming that the book is \"\"worth\"\" more than it's actually worth is really nothing more than cheating on your taxes. You may or may not get caught, but it's certainly not the intent of any tax code to give people a break on their taxes for donating worthless books to a charity which will inevitably just have to recycle or shred them.\"",
"title": ""
},
{
"docid": "f1b7f7147ecf4016b8209d50d31f589d",
"text": "I have sold a few items on ebay. The biggest issue I have with ebay is all of the fees. I am not sure how much has changed recently, but when I was selling stuff it felt like ebay and paypal took a large chunk of the money. I could be wrong, but it seemed like they were getting around 35% or more of my 'profits'. Of course, you then have the shipping fees on top of that, which will run a few bucks on common items. For items that sell for around $20 on ebay, I felt like I was ending up with about $5 in my pocket. I have used Amazon to sell used books, though I haven't done that for about a year or so. They had no fees for listing items, and the item remains listed for about 90 days. If it sells, they process the payment and can deposit it into your bank account or provide an Amazon gift certificate. I forget Amazon's fees, but I remember that it didn't seem to be as frustrating as the ebay/paypal price structure.",
"title": ""
},
{
"docid": "4b6f090327ec6cce7d14b1a6d77924e4",
"text": "Discrepancies between what the book value is reported as and what they'd fetch if sold on the open market. Legal disputes in court.",
"title": ""
},
{
"docid": "0fb6df68bbd3c28f9396ec52c362d2fa",
"text": "If you're willing to pay a fee, you can probably just get a commercial appraiser to give you a valuation. In Australia I think it's around $100-200.",
"title": ""
},
{
"docid": "02b8a662668832af66709dbeb39365ad",
"text": "To determine the value of one's life, instead of rating happiness from 1 to 10 every day in pink ink in a secret diary, use the concept of mercantile exchange to determine the value of your existence. First, offer your time for some initial price ($10) to some investors (Bob). Then, create an order book where anyone can make a bid or ask for your time. For example, Bob creates a sell order for 10 min of your time for $20. Mary creates a buy order for 10 min of your time for $20--Bob sells 10 min of your time to Mary for $20. Based on the supply and demand for your time, you could determine the value of your existence. Obviously, your time would no longer be yours, but it's interesting to consider nontheless and precisely equivalent to the process that determines stock price. (Ignoring the minutiae of order books and IPOs.)",
"title": ""
}
] |
fiqa
|
bc821cd342f1977a6739092329148a9e
|
Are precious metals/collectibles a viable emergency fund?
|
[
{
"docid": "bfde7f9b43df2af566599c0879099552",
"text": "\"If it were me, I would convert it to cash and keep it in a liquid account. The assumption that silver will increase in value is misguided. From 1985 to 2002, it was flat. It's gone up and been far more volatile since then, and there has been significant declines which could eat at the stability of an emergency fund. Precious metals are speculation, not investing. They do not create wealth. Investing is typically considered too volatile for an emergency fund, more so keeping the money in metals. Making it more difficult to get to, like keeping it in a separate account might also fight against frivolous or accidental spending. Also there tends to be high transaction costs when liquidating metals. I found the best way is to use eBay. After some further comments and clarification here I suspect you are dealing with something else. Namely, the \"\"white picket fence\"\". Again, this is supposition, but perhaps she envisions the two of you married and hosting a dinner party using the passed down silver. This could be a strong emotional bond, and as such it could trump the logical arguments. Keeping it as an emergency fund: foolish. You helping her keep it because you are planning a life together: smart.\"",
"title": ""
},
{
"docid": "c5f6eaba86351787a2d8128549b67dd8",
"text": "\"If you were asking if you should buy silver for an emergency fund, I'd say no. But, you already have it... Note: I wrote most of the below under the assumption that this is silver bullion coins/bars; it didn't occur to me till the end that it could be jewelry. Both of you have good arguments for your points of view. Breaking it down: Her points 1. A very good point. And while she may not be irresponsible, maybe the invisibility of it is good for her psychology? It's her's, so her comfort is important here. 2. Good. Make sure it's explicitly listed on the policy. 3. Bad. I think it will as well, at least the long run. But, this is not a good reason for an emergency fund -- the whole point of which is to be stable in case of emergencies. 4. Good. Identity theft is a concern, though unless her info is already \"\"out there\"\", it's insufficient for the emergency fund. And besides, she could keep cash. Your points 1. Iffy. On the one hand, you're right. On the other hand, Cyprus. It is good to remember that money in accounts is in someone else's control, not yours, as the Cypriots found out to their chagrin. And of course, it can't happen here, but that's what they thought too. There is value in having some hard assets physically in your control. Think of it as an EMERGENCY emergency fund. Cash works too, but precious metals are better for these mega-upheaval scenarios. Again, find out how having such an EMERGENCY fund would make her feel. Does having that give her some comfort? A gift from a family member of this much silver leads me to assume that her family might have a little bit of a prepper culture. If so, then even if she is not a prepper herself, she may derive some comfort from having it, just in case -- it'll be baked into her background. Definitely a topic to discuss with her. 2. Excellent point. This is precisely why you want your emergency fund in some form of cash. 3. Bad. You can walk into any pawn shop and sell it in a heartbeat. Or you can send it in to a company and have cash in days. 4. Bad. If you know a savings account that pays 3%-4%, please, please, please tell me where it is so I can get one. Fact is, all cash instruments pay negligible interest now, and all such savings are being eroded by inflation. 5. Maybe. There is value to looking at your net worth this way, but my experience has been that those that do take it way too far. I think there's more value at looking at allocation within a few broad \"\"buckets\"\" -- emergency fund, savings (car, house, college, etc), and retirement fund. If this is to be an EMERGENCY fund, as per point #1, then you should look at it as its own bucket (and maybe add a little cash too). Another thought to add: This is a gift from a family member -- they gave her a lot of silver. Of course it's your SO's now, and she can do whatever she wants with it, but how would the family member react if she did liquidate it? If that family member is a prepper, and gave her this with the emotional desire to see her prepped, they may be upset if she sold it. It just occurred to me this may be jewelry. Your SO may not have sentimental attachment to it, but what about the family member's sentiments? They may not like to see family silver they loving maintained and passed on casually discarded for mere cash by your SO. Another thing to discuss with her. Wrap up Generally, you are right about not keeping a 6 month emergency fund in silver. But there are other factors to consider here. There's also the fact that it's already bought -- the cost of buying (paying over market) has already been taken. Edit -- so it's silverware Ah, so it's silverware. Well, scratch everything, except how the family member feels about, which now looms large. This doesn't have much value as an emergency fund. Nor really as an investment. If you did keep it as an investment, think of it as an investment in collectibles/art, less so in precious metals. If no one will get upset, I'd say pick out the nicest set to keep for special occasions, and sell the rest. Find out first if it has collectible or historical value. It may be worth far more than the pure weight in silver. Ebay might be the way to go to sell it.\"",
"title": ""
},
{
"docid": "e81aa566018fd11d9e87cd86713783ee",
"text": "People normally hold precious metals as a protection against the whole system going down: massive inflation, lawlessness, etc. If our whole government and financial system broke completely and we returned to a barter economy, then holding silver would likely turn out to be a good thing. However, precious metals are not very good hedges against individual calamity, like losing your job. They are costly and inconvenient to sell and the price of these metals fluctuates wildly, so you could end up wanting to sell just when the metal isn't worth much. I'd say having some precious metal isn't unreasonable, but it should not make up a major portion of one's total net worth. If you want protection against normal problems, especially as a person of limited means, start with an emergency savings account and paying down debt. That way fixed costs will be less likely to turn an unfortunate turn of events into a personal catastrophe.",
"title": ""
}
] |
[
{
"docid": "2c367ceba9490ae54dce5a02b9fc2171",
"text": "\"You're talking about money in a savings account, and avoiding the risks posed by an ongoing crisis, and avoiding risk. If you are risk-averse, and likely to need your money in the short term, you should not put your money in the stock market, even in \"\"safe\"\" stocks like P&G/Coca-Cola/etc. Even these safe stocks are at risk of wild price swings in the short- to intermediate-term, especially in the event of international crises such as major European debt defaults and the like. These stocks are suitable for long-term growth objectives, but they are not as a replacement for a savings account. Coca-Cola lost a third of its value between 2007 and 2009. (It's recovered, and is currently doing better than ever.) P&G went from $74/share to $46/share. (It's partially recovered and back at $63). On the other hand, these stocks may indeed be suitable as long-term investments to protect you against local currency inflation. And yes, they even pay dividends. If you're after this investment, a good option is probably a sector-specific exchange-traded fund, such as a consumer-staples ETF. It will likely be more diversified and safer than anything you could come up with using a list of individual stocks. You can also investigate recommendations that show up when you search for a \"\"defensive ETF\"\". If you do not wish to buy the ETF directly, you can also look at listings of the ETF's holdings. Read the prospectus for an idea of the risks associated with these funds. You can buy these funds with any brokerage that gives you access to US stock exchanges.\"",
"title": ""
},
{
"docid": "ad53a673e51687e957147a328395e9c7",
"text": "\"There are exactly zero experts in the field of Personal Finance that would advise having an \"\"emergency fund\"\" (liquid assets available to meet sudden obligations like illness, car accident, AC breaks, etc.) that is sub $1,000. If you have less than $1k in liquid assets you either A. must live at home with your parents, B. very broke or C. being very irresponsible. I think an emergency fund of $10k is really the sweet spot. I can't imagine anyone reasonable funding the shit out of their 401k, IRA, etc. and having less than $1k cash.\"",
"title": ""
},
{
"docid": "f6b93d56422824ec67ede47fd8faf611",
"text": "Very interesting. I would like to expand beyond just precious metals and stocks, but I am not ready just to jump in just yet (I am a relatively young investor, but have been playing around with stocks for 4 years on and off). The problem I often find is that the stock market is often too overvalued to play Ben Graham type strategy/ PE/B, so I would like to expand my knowledge of investing so I can invest in any market and still find value. After reading Jim Rogers, I was really interested in commodities as an alternative to stocks, but I like to play really conservative (generally). Thank you for your insight. If you don't mind, I would like to add you as a friend, since you seem quite above average in the strategy department.",
"title": ""
},
{
"docid": "a82d6bb88b2c6a69e9ca89ed9c8692a7",
"text": "\"Generally speaking, so-called \"\"hard assets\"\" (namely gold or foreign currency), durable goods, or property that produces income is valuable in a situation where a nation's money supply is threatened. Gold is the universal hard asset. If you have access to a decent market, you can buy gold as bullion, coins and jewelry. Small amounts are valuable and easy to conceal. The problem with gold is that it is often marked up alot... I'm not sure how practical it is in a poor developing nation. A substitute would be a \"\"harder\"\" currency. The best choice depends on where you live. Candidates would be the US Dollar, Euro, Australian Dollar, Yen, etc. The right choice depends on you, the law in your jurisdiction, your means and other factors.\"",
"title": ""
},
{
"docid": "2a4101d422ea1202cbc43ffd2a8abbf0",
"text": "Are you going to South Africa or from? (Looking on your profile for this info.) If you're going to South Africa, you could do worse than to buy five or six one-ounce krugerrands. Maybe wait until next year to buy a few; you may get a slightly better deal. Not only is it gold, it's minted by that country, so it's easier to liquidate should you need to. Plus, they go for a smaller premium in the US than some other forms of gold. As for the rest of the $100k, I don't know ... either park it in CD ladders or put it in something that benefits if the economy gets worse. (Cheery, ain't I? ;) )",
"title": ""
},
{
"docid": "0e18a477fd77394ef56f7c56879824f1",
"text": "There is no right answer here, one has to make the choice himself. Its best to have an emergency fund before you start to commit funds to other reasons. The plan looks good. Keep following it and revise the plan often.",
"title": ""
},
{
"docid": "ccdfb95bba9a39dd154f1bfddbefe85b",
"text": "How much money do you have in your money market fund and what in your mind is the purpose of this money? If it is your six-months-of-living-expenses emergency fund, then you might want to consider bank CDs in addition to bond funds as an alternative to your money-market fund investment. Most (though not necessarily all, so be sure to check) bank CDs can be cashed in at any time with a penalty of three months of interest, and so unless you anticipate being laid off very soon, you might get a slightly better rate of interest, FDIC insurance (which mutual funds do not have), and with any luck you may never have to break a CD and lose the interest. Building a ladder of CDs with one maturing each month might be another way to reduce the risk of loss. On the other hand, bond mutual funds are a risky bet now because your investment will lose value if interest rate go up, and as JohnFx points out, interest rates have nowhere to go but up. Finally, the amount of the investment is something that you might want to consider before making changes. If you have $50K put away as your six-month fund, you are talking of $500 versus $350 per annum in changing to a riskier investment with a 1% yield from a safer investment with a 0.7% yield. Whether bragging rights at neighborhood parties are worth the trouble is something for you to decide.",
"title": ""
},
{
"docid": "b951581481716127c2df5bc1a90db315",
"text": "Emergency funds, car funds etc tend to have to be accessible quickly (which tends to rule out CDs unless you have the patience to work something like a monthly CD ladder, an I don't) and you'll want your principal protected. The latter pretty much rules out any proper investment (ETFs, mutual funds, stock market directly, Elbonian dirt futures etc). It's basically a risk-vs-return calculation. Not much risk, not much return but at least you're not losing from a nominal standpoint). Another consideration is that you normally aren't able to decide freely if and when you want to pull money out of an emergency fund. If it is an emergency, waiting three weeks to see if the stock market goes up a little further isn't an option so you might end up having to take a hit that would be irrelevant if you were investing long term but might hurt badly because you're left with no choice. I'd stick that sort of money into a money market account and either add to it if necessary to keep up with inflation or make sure that my non-retirement investments over and above these funds are performing well, as those will and should become a far bigger part of your wealth in the longer run.",
"title": ""
},
{
"docid": "282a19e1d7ad4b6cbbb606ae59f137c0",
"text": "\"I'm not a fan of using cash for \"\"emergency\"\" savings. Put it in a stable investment that you can liquidate fairly quickly if you have to. I'd rather use credit cards for a while and then pay them off with investment funds if I must. Meanwhile those investments earn a lot more than the 0.1 percent savings or money market accounts will. Investment grade bond funds, for example, should get you a yield of between 4-6% right now. If you want to take a longer term view put that money into a stock index fund like QQQ or DIA. There is the risk it will go down significantly in a recession but over time the return is 10%. (Currently a lot more than that!) In any event you can liquidate securities and get the money into your bank is less than a week. If you leave it in cash it basically earns nothing while you wait for that rainy day which many never come.\"",
"title": ""
},
{
"docid": "263e89f9838c5e3af00d6b60d70cb784",
"text": "As I tell all my clients... remember WHY you are investing in the first. Make a plan and stick to it. Find a strategy and perfect it. A profit is not a profit until you take it. the same goes with a loss. You never loose till you sell for less than what you paid. Stop jumping for one market to the next, find one strategy that works for you. Making money in the stock market is easy when you perfect your trading strategy. As for your questions: Precious metal... Buying or selling look for the trends and time frame for your desired holdings. Foreign investments... They have problem in their economy just as we do, if you know someone that specializes in that... good for you. Bonds and CD are not investments in my opinion... I look at them as parking lots for your cash. At this moment in time with the devaluation of the US dollar and inflation both killing any returns even the best bonds are giving out I see no point in them at this time. There are so many ways to easily and safely make money here in our stock market why look elsewhere. Find a strategy and perfect it, make a plan and stick to it. As for me I love Dividend Capturing and Dividend Stocks, some of these companies have been paying out dividends for decades. Some have been increasing their payouts to their investors since Kennedy was in office.",
"title": ""
},
{
"docid": "99132ead7c0318b28479f3d0e3cb6555",
"text": "A CD ladder is an ideal way to hold your emergency funds and eke out a few more percentage points of return. Buy CDs in denominations close to one month's expenses, and ladder 1 per month with 3, 6 or 12 month CDs (depending on your total cash allocation to emergency funds). By using a frequency that matches your available funds, in a best case scenario, you can perpetually roll over (or as your savings increase, extend to a longer frequency). If you have an emergency, you have a month's expenses in cash or cash coming in within a month.",
"title": ""
},
{
"docid": "bab6ea73a159b162acf0efe1a8be6b24",
"text": "\"The answer to your question depends very much on your definition of \"\"long-term\"\". Because let's make something clear: an investment horizon of three to six months is not long term. And you need to consider the length of time from when an \"\"emergency\"\" develops until you will need to tap into the money. Emergencies almost by definition are unplanned. When talking about investment risk, the real word that should be used is volatility. Stocks aren't inherently riskier than bonds issued by the same company. They are likely to be a more volatile instrument, however. This means that while stocks can easily gain 15-20 percent or more in a year if you are lucky (as a holder), they can also easily lose just as much (which is good if you are looking to buy, unless the loss is precipitated by significantly weaker fundamentals such as earning lookout). Most of the time stocks rebound and regain lost valuation, but this can take some time. If you have to sell during that period, then you lose money. The purpose of an emergency fund is generally to be liquid, easily accessible without penalties, stable in value, and provide a cushion against potentially large, unplanned expenses. If you live on your own, have good insurance, rent your home, don't have any major household (or other) items that might break and require immediate replacement or repair, then just looking at your emergency fund in terms of months of normal outlay makes sense. If you own your home, have dependents, lack insurance and have major possessions which you need, then you need to factor those risks into deciding how large an emergency fund you might need, and perhaps consider not just normal outlays but also some exceptional situations. What if the refrigerator and water heater breaks down at the same time that something breaks a few windows, for example? What if you also need to make an emergency trip near the same time because a relative becomes seriously ill? Notice that the purpose of the emergency fund is specifically not to generate significant interest or dividend income. Since it needs to be stable in value (not depreciate) and liquid, an emergency fund will tend towards lower-risk and thus lower-yield investments, the extreme being cash or the for many more practical option of a savings account. Account forms geared toward retirement savings tend to not be particularly liquid. Sure, you can usually swap out one investment vehicle for another, but you can't easily withdraw your money without significant penalties if at all. Bonds are generally more stable in value than stocks, which is a good thing for a longer-term portion of an emergency fund. Just make sure that you are able to withdraw the money with short notice without significant penalties, and pick bonds issued by stable companies (or a fund of investment-grade bonds). However, in the present investment climate, this means that you are looking at returns not significantly better than those of a high-yield savings account while taking on a certain amount of additional risk. Bonds today can easily have a place if you have to pick some form of investment vehicle, but if you have the option of keeping the cash in a high-yield savings account, that might actually be a better option. Any stock market investments should be seen as investments rather than a safety net. Hopefully they will grow over time, but it is perfectly possible that they will lose value. If what triggers your financial emergency is anything more than local, it is certainly possible to have that same trigger cause a decline in the stock market. Money that you need for regular expenses, even unplanned ones, should not be in investments. Thus, you first decide how large an emergency fund you need based on your particular situation. Then, you build up that amount of money in a savings vehicle rather than an investment vehicle. Once you have the emergency fund in savings, then by all means continue to put the same amount of money into investments instead. Just make sure to, if you tap into the emergency fund, replenish it as quickly as possible.\"",
"title": ""
},
{
"docid": "68307d5be9ffcdcde08545453139e73a",
"text": "\"Buying physical gold: bad idea; you take on liquidity risk. Putting all your money in a German bank account: bad idea; you still do not escape Euro risk. Putting all your money in USD: bad idea; we have terrible, terrible fiscal problems here at home and they're invisible right now because we're in an election year. The only artificially \"\"cheap\"\" thing that is well-managed in your part of the world is the Swiss Franc (CHF). They push it down artificially, but no government has the power to fight a market forever. They'll eventually run out of options and have to let the CHF rise in value.\"",
"title": ""
},
{
"docid": "f694ed0f5dd14110332cd21255788977",
"text": "From a budgeting perspective, the emergency fund is a category in which you've budgeted funds for the unexpected. These are things that weren't able to be predicted and budgeted for in advance, or things that exceeded the expected costs. For example you might budget $150 per month for car maintenance, and typically spend some of it while the rest builds up over time for unexpected repairs, so you have a few hundred available for that. But this month your transmission died and you have a $3,000 bill. You'll then fund most of this out of your emergency fund. This doesn't cover where to store that money though, which leads me to my next point. Emergencies are emergencies because they come without warning, without you having a chance to plan. Thefore the primary things you want in an emergency fund account are stability and quick access. You can structure investments to be whatever you think of as safe or stable but you don't want to be thinking about whether it's a good time to sell when you need the money right now. But the bigger problem is access. When you need the funds on a weekend, holiday, anytime outside of market hours, you're not going to be able to just sell some stocks and go to an ATM. This is the reason why it's recommended to have these funds in a checking or savings account usually. The reason I mentioned the budgeting side first is because I wanted to point out that if you're budgeting well, most of the unexpected expenses you have should have been expected in a sense; you can still plan for something without knowing when or if it will happen. So in the example of a car repair, ideally you're already budgeting for possible repairs, if you own a home you're budgeting for things that would go wrong, budgeting for speeding tickets, for surprise out of pocket medical costs, etc. These then become part of your normal budget: they aren't part of the emergency fund anymore. The bright side about budgeting for something unexpected is that you know what that money is for, and do you likely also know how quickly you'll need it. For example you know if you have unexpected medical costs that happen very quickly, you're not likely you need a bag of cash on a moment's notice. So those last two points lead to the fact that your actual emergency fund, the dollars that are for things you simply could not foresee, will be relatively small. A few thousand dollars or so in most cases. If you've got things structured like this, you'll be happy to have a few grand available at a moment's notice. The bulk of the money you would use for other surprise expenses (or things like 6 months of living expenses) is represented in other specific categories and you already know the timeframe in which you need it (probably enough time that it could be invested, risk to taste). In short: by expecting the unexpected, you can sidestep this issue and not worry so much about missed returns on the emergency fund.",
"title": ""
},
{
"docid": "a73a32e9c0c175cc10a1014387ee433f",
"text": "\"Your are mixing multiple questions with assertions which may or may not be true. So I'll take a stab at this, comment if it doesn't make sense to you. To answer the question in the title, you invest in an IRA because you want to save money to allow you to retire. The government provides you with tax incentives that make an IRA an excellent vehicle to do this. The rules regarding IRA tax treatment provide disincentives, through tax penalties, for withdrawing money before retirement. This topic is covered dozens of times, so search around for more detail. Regarding your desire to invest in items with high \"\"intrinsic\"\" value, I would argue that gold and silver are not good vehicles for doing this. Intrinsic value doesn't mean what you want it to mean in this context -- gold and silver are commodities, whose prices fluctuate dramatically. If you want to grow money for retirement over a long period, of time, you should be invested in diversified collection of investments, and precious metals should be a relatively small part of your portfolio.\"",
"title": ""
}
] |
fiqa
|
9fe328d07b58b4bf61a44fa3bbc5ec4a
|
Stocks vs. High-yield Bonds: Risk-Reward, Taxes?
|
[
{
"docid": "d41d8cd98f00b204e9800998ecf8427e",
"text": "",
"title": ""
},
{
"docid": "a49db2e2d205b37bb8e4240e6f249904",
"text": "When credit locks up, junk bond prices fall rapidly, and you see more defaults. The opportunity to make money with junk is to buy a diversified collection of them when the market declines. Look at the charts from some of the mutual funds or ETFs like PIMCO High Yield Instl (PHIYX), or Northeast Investors (NTHEX). Very volatile stuff. Keep in mind that junk bonds are not representative of the economy as a whole -- they cluster in certain industries. Retail and financials are big industry segments for junk. Also keep in mind that the market for these things is not as liquid as the stock market. If your investment choice is really a sector investment, you might be better served by investing in sector funds with stocks that trade every day versus bonds whose market price may be difficult to determine.",
"title": ""
}
] |
[
{
"docid": "564005dc162c72c98e107c637b036256",
"text": "For bonds bought at par (the face value of the bond, like buying a CD for $1000) the payment it makes is the same as yield. You pay $1000 and get say, $40 per year or 4%. If you buy it for more or less than that $1000, say $900, there's some math (not for me, I use a finance calculator) to tell you your return taking the growth to maturity into account, i.e. the extra $100 you get when you get the full $1000 back. Obviously, for bonds, you care about whether the comp[any or municipality will pay you back at all, and then you care about how much you'll make when then do. In that order. For stocks, the picture is abit different as some companies give no dividend but reinvest all profits, think Berkshire Hathaway. On the other hand, many people believe that the dividend is important, and choose to buy stocks that start with a nice yield, a $30 stock with a $1/yr dividend is 3.3% yield. Sounds like not much, but over time you expect the company to grow, increase in value and increase its dividend. 10 years hence you may have a $40 stock and the dividend has risen to $1.33. Now it's 4.4% of the original investment, and you sit on that gain as well.",
"title": ""
},
{
"docid": "f6ac2bcc59fee8f3220b9dbae3fc484a",
"text": "\"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?\"",
"title": ""
},
{
"docid": "9ed4fcf38b6b750eddd20aed017cac45",
"text": "\"The two are not incompatible. This is particularly true of Glaxo and Pfizer, two drug companies operating in roughly the same markets with similar products. Many \"\"good\"\" companies offer a combination of decent yields and growth. Glaxo and Pfizer are both among them. There is often (not always), a trade-off between high yield and high growth. All other things being equal, a company that pays out a larger percentage of its profits as dividends will exhibit lower growth. But a company may have a high yield because of a depressed price due to short term problems. When those problems are fixed, the company and stock grows again, giving you the best (or at least the better) of both worlds.\"",
"title": ""
},
{
"docid": "07840ca3531beffb6cc1cd5266218a0c",
"text": "\"In the US, dividends are presently taxed at the same rates as capital gains, however selling stock could lead to less tax owed for the same amount of cash raised, because you are getting a return of basis or can elect to engage in a \"\"loss harvesting\"\" strategy. So to reply to the title question specifically, there are more tax \"\"benefits\"\" to selling stock to raise income versus receiving dividends. You have precise control of the realization of gains. However, the reason dividends (or dividend funds) are used for retirement income is for matching cash flow to expenses and preventing a liquidity crunch. One feature of retirement is that you're not working to earn a salary, yet you still have daily living expenses. Dividends are stable and more predictable than capital gains, and generate cash generally quarterly. While companies can reduce or suspend their dividend, you can generally budget for your portfolio to put a reliable amount of cash in your pocket on schedule. If you rely on selling shares quarterly for retirement living expenses, what would you have done (or how much of the total position would you have needed to sell) in order to eat during a decline in the market such as in 2007-2008?\"",
"title": ""
},
{
"docid": "d6a0cddee37083f56a9630e1a143bc67",
"text": "This is subject to some amount of opinion, but I think that Treasury Inflation Protected Securities (TIPS) are closest to what you describe. These are issued by the US Treasury like a treasury bond, but the rate is adjusted for inflation. https://www.treasurydirect.gov/indiv/products/prod_tips_glance.htm I see your comment about taxes. TIPS are exempt from state and local taxes, but they are subject to federal tax on the income and on the growth of the principal.",
"title": ""
},
{
"docid": "67a8f8a83db55a5a110890deeebbdcf3",
"text": "\"You have a high risk tolerance? Then learn about exchange traded options, and futures. Or the variety of markets that governments have decided that people without high income are too stupid to invest in, not even kidding. It appears that a lot of this discussion about your risk profile and investing has centered around \"\"stocks\"\" and \"\"bonds\"\". The similarities being that they are assets issued by collections of humans (corporations), with risk profiles based on the collective decisions of those humans. That doesn't even scratch the surface of the different kinds of asset classes to invest in. Bonds? boring. Bond futures? craziness happening over there :) Also, there are potentially very favorable tax treatments for other asset classes. For instance, you mentioned your desire to hold an investment for over a year for tax reasons... well EVERY FUTURES TRADE gets that kind of tax treatment (partially), whether you hold it for one day or more, see the 60/40 rule. A rebuttal being that some of these asset classes should be left to professionals. Stocks are no different in that regards. Either educate yourself or stick with the managed 401k funds.\"",
"title": ""
},
{
"docid": "69d52c5b1de2ac2f383d5cc2b8f189c9",
"text": "Because stock markets don't always go up, sometimes they go down. Sometimes they go way down. Between 2007 and 2009 the S&P 500 lost over half its value. So if in 2007 you thought you had just enough to retire on, in 2009 you'd suddenly find you had only half of what you needed! Of course over the next few years, many of the stocks recovered value, but if you had retired in 2008 and depended on a 401k that consisted entirely of stocks, you'd have been forced to sell a bunch of stocks near the bottom of the market to cover your retirement living expenses. Bonds go up and down too, but usually not to the same extent as stocks, and ideally you aren't selling the bonds for your living expenses, just collecting the interest that's due you for the year. Of course, some companies and cities went bankrupt in the 2008 crisis too, and they stopped making interest payments. Another risk is that you may be forced to retire before you were actually planning to. As you age you are at increasing risk for medical problems that may force an early retirement. Many businesses coped with the 2008 recession by laying off their older workers who were earning higher salaries. It wasn't an easy environment for older workers to find jobs in, so many folks were forced into early retirement. Nothing is risk free, so you need to make an effort to understand what the risks are, and decide which ones you are comfortable with.",
"title": ""
},
{
"docid": "ac97477afe8baf421d2bcf1b23bf05dd",
"text": "You have a misunderstanding about what it is. Absent differential tax treatment buybacks and dividens are the exact same. period. You're saying it yourself, not buying back stock so they can pay out dividends. What the impetus might be is irrelevant. Dividends are a use of funds competing equally with investments or higher salary.",
"title": ""
},
{
"docid": "1de019cd6cceea000d667a6014036f01",
"text": "Series I Savings Bonds would be another option that have part of their return indexed to inflation though currently they are yielding 1.64% through April 30, 2016 though some may question how well is that 3% you quote as an inflation rate. From the first link: Series I savings bonds are a low-risk savings product. While you own them they earn interest and protect you from inflation. You may purchase electronic I bonds via TreasuryDirect or paper I bonds with your IRS tax refund. As a TreasuryDirect account holder, you can purchase, manage, and redeem I bonds directly from your web browser. TIPS vs I Bonds if you want to compare these products that are rather safe in terms of avoiding a nominal loss. This would be where a portion of the funds could go, not all of them at once.",
"title": ""
},
{
"docid": "cb1442dc3f4f3e60bf8c5d6bcbaed8b8",
"text": "\"My gut is to say that any time there seems to be easy money to be made, the opportunity would fade as everyone jumped on it. Let me ask you - why do you think these stocks are priced to yield 7-9%? The DVY yields 3.41% as of Aug 30,'12. The high yielding stocks you discovered may very well be hidden gems. Or they may need to reduce their dividends and subsequently drop in price. No, it's not 'safe.' If the stocks you choose drop by 20%, you'd lose 40% of your money, if you made the purchase on 50% margin. There's risk with any stock purchase, one can claim no stock is safe. Either way, your proposal juices the effect to creating twice the risk. Edit - After the conversation with Victor, let me add these thoughts. The \"\"Risk-Free\"\" rate is generally defined to be the 1yr tbill (and of course the risk of Gov default is not zero). There's the S&P 500 index which has a beta of 1 and is generally viewed as a decent index for comparison. You propose to use margin, so your risk, if done with an S&P index is twice that of the 1X S&P investor. However, you won't buy S&P but stocks with such a high yield I question their safety. You don't mention the stocks, so I can't quantify my answer, but it's tbill, S&P, 2X S&P, then you.\"",
"title": ""
},
{
"docid": "bffcf4ef1809546937edf2f201fc6711",
"text": "Distributions of interest from bonds are taxable as income by the Federal, state and municipal (if applicable) government. End of year fund distributions are subject to capital gains taxes as well. You can minimize taxation by: Note that the only bonds that are guaranteed safe are US Government obligations, as the US government has unlimited taxation powers and the ability to print money. Municipal obligations are generally safe, but there is a risk that municipal governments will default. You can also avoid taxation by not realizing gains. If you buy individual stocks or tax-efficient mutual funds, you will have minimal tax liability until you sell. Also, just wanted to point out that bonds do not equal safety and money markets do not pay sufficient interest to offset inflation, you need a diversified portfolio. Five year treasury notes are only paying 1.3% now, and bond prices drop when interest rates go up. Given the level of Federal spending and the wind-down of the war, its likely that rates will rise.",
"title": ""
},
{
"docid": "59e762b8f5ee752485d2454dd9fec47d",
"text": "You can buy and sell stocks, if you like. You'll have to pay taxes on any profits. And short-term is speculating, not investing, and has high risk",
"title": ""
},
{
"docid": "a634c15180a16af1d8b1f91c2d4ef48e",
"text": "Not sure how this has got this far with no obvious discussion about the huge tax advantages of share buy backs vs dividend paying. Companies face a very simple choice with excess capital - pay to shareholders in the form of a taxable dividend, invest in future growth where they expect to make more than $1 for every $1 invested, or buy back the equivalent amount of stock on the market, thus concentrating the value of each share the equivalent amount with no tax issues. Of these, dividends are often by far the worst choice. Virtually all sane shareholders would just rather the company put the capital to work or concentrate the value of their shares by taking many off the market rather than paying a taxable dividend.",
"title": ""
},
{
"docid": "c9a3c0c2284554ce69d0c8db28dcfdcc",
"text": "\"Remember that risk should correlate with returns, in an investment. This means that the more risk you take on, the more return you should be receiving, in an efficient marketplace. That's why putting your money in a savings account might earn you <1% interest right now, but putting money in the stock market averages ~7% returns over time. You should be very careful not to use the word 'interest' when you mean 'returns'. In your post, you are calling capital gains (the increase in value of owned property) 'interest'. This may be understating in your head the level of risk associated with property ownership. In the case of the bank, they are not in the business of home construction. Rather than take that risk themselves, they would rather finance many projects being done by construction companies that know the business. The bank has a high degree of certainty of getting its money back, because its mortgages are protected by the value of the property. Part of the benefit of an efficient marketplace is that risk gets 'bought' by individuals who want it. This means that people with a low-risk tolerance (such as banks, people on fixed incomes, seniors, etc.) can avoid risk, and people with a high risk tolerance (stock investors, young people with high income, etc.) can take on that risk for higher average returns. The bank's reasoning should remind you of the risk associated with property ownership: increases in value are not a sure thing. If you do not understand the risk of your investment, you cannot be certain that you are being well compensated for that risk. Note also that most countries place regulations on their banks that limit the amount of their funds that can be placed in 'higher risk' asset classes. Typically, this something along the lines of \"\"If someone places a deposit with your bank, you can only invest that deposit in a low-risk debt-based asset [ie: you can take money deposited by customer A and use it to finance a mortgage for customer B]\"\". This is done in an attempt to prevent collapse of the financial sector, if risky investments start failing.\"",
"title": ""
},
{
"docid": "a67e97c315357cc1ac6335a6f29b8e79",
"text": "\"There are tax free bonds in the United States. They are for things like public housing and other urban projects. They are tax free for everyone but only rich people buy them. Why? The issue is that the tax free nature of the bond is included in its yield. So rather than yielding say a 5% return, they figure that the owner is getting 20% off due to not paying taxes. As a result, they only give a 4% return but are as risky as a 5% return investment. Net result, only rich people invest in tax free bonds. \"\"Rich\"\" is defined here to mean people paying a 20% tax on long term investment returns. Or take the State and Local Tax (SALT) deduction, which has been in the news recently. Again, it is technically open to everyone. But there is also a standard deduction that is open to everyone. For the typical family, state and local taxes might be 5% of income. So for a family making $100k a year, that's $5k. The same family can take a $13k or so standard deduction instead of itemizing. So why would they take the smaller deduction? As a practical matter, two groups take the SALT deduction. People rich enough to pay more than $13k in state and local taxes and people who also take the mortgage interest deduction. So it helps a lot of people who are rich quite a bit. And it helps a few middle class people some. But if you are lower middle class with a $30k mortgage on a tiny house and paying 4% interest, then that's only $1200 a year. Add in property taxes of $3000 and SALT of $2.8k and that's only $7k. Even if the person gives $3k to charity, the $13k deduction is a lot better and requires less paperwork. Contrast that with someone who has $500k mortgage at 3.6% interest. That's $18k in interest alone. Add in a SALT of $7k and property taxes of $50k, and there's $75k of itemized deductions, much better than $13k. Now a $7k donation to charity is entirely deductible. And even after the mortgage interest deduction goes away, the other $64k remains.\"",
"title": ""
}
] |
fiqa
|
4a7e1d90869d5577765e154f6a26742e
|
Investments beyond RRSP and TFSA, in non-registered accounts?
|
[
{
"docid": "9e4e5154c4a2adf1d4ec1972f97af03c",
"text": "I quite like the Canadian Couch Potato which provides useful information targeted at investors in Canada. They specifically provide some model portfolios. Canadian Couch Potato generally suggests investing in indexed ETFs or mutual funds made up of four components. One ETF or mutual fund tracking Canadian bonds, another tracking Canadian stocks, a third tracking US stocks, and a fourth tracking international stocks. I personally add a REIT ETF (BMO Equal Weight REITs Index ETF, ZRE), but that may complicate things too much for your liking. Canadian Couch Potato specifically recommends the Tangerine Streetwise Portfolio if you are looking for something particularly easy, though the Management Expense Ratio is rather high for my liking. Anyway, the website provides specific suggestions, whether you are looking for a single mutual fund, multiple mutual funds, or prefer ETFs. From personal experience, Tangerine's offerings are very, very simple and far cheaper than the 2.5% you are quoting. I currently use TD's e-series funds and spend only a few minutes a year rebalancing. There are a number of good ETFs available if you want to lower your overhead further, though Canadians don't get quite the deals available in the U.S. Still, you shouldn't be paying anything remotely close to 2.5%. Also, beware of tax implications; the website has several articles that cover these in detail.",
"title": ""
},
{
"docid": "470a89e85ec159eb02808be2dc87f28e",
"text": "You haven't looked very far if you didn't find index tracking exchange-traded funds (ETFs) on the Toronto Stock Exchange. There are at least a half dozen major exchange-traded fund families that I'm aware of, including Canadian-listed offerings from some of the larger ETF providers from the U.S. The Toronto Stock Exchange (TSX) maintains a list of ETF providers that have products listed on the TSX.",
"title": ""
}
] |
[
{
"docid": "97910c0d3329b9a60f4607ab27d7c2a4",
"text": "You don't seem to have any particular question to be answered. Your understanding of RRSPs seems to be very good. Have you considered whether you might be better off putting your retirement savings into a TFSA instead? Both types can protect your growth from taxation (provided you reinvest the refund from the RRSP). The main way in which the RRSP is better than TFSA is that you can pay the tax on the contribution at a time when your income is lower, and thus have a lower marginal tax rate. Most people retire with a lower income than during their earning years, but it's a matter of tax brackets. If you think you'll be in the same bracket (same marginal tax rate) when you retire, then the TFSA and RRSP work out even in that regard. So in your case, the question you want to ask yourself is: when I retire, will I have an income (including CPP, OAS, pension payments, etc) that exceeds $45,282 worth of today's dollars? If so, your RRSP holds no advantage over the TFSA. In fact, the RRSP may even be worse, since the withdrawals count as income and reduce the amount of OAS and perhaps GIS payments that the government gives you - at least under current regulations. If you're unsure, I suggest you try this calculator from taxtips.ca that runs both scenarios and helps you see which one is more beneficial. It even factors in the OAS/GIS clawbacks.",
"title": ""
},
{
"docid": "d9c4775c8e83b672909f450949e6dca2",
"text": "You might consider calling the broker you invest with. At mine, you can see the room left to contribute each year in the TFSA. The CRA might just have old/bad data.",
"title": ""
},
{
"docid": "aa718696681523ba8b60263c70784ca7",
"text": "I don't believe from reading the responses above that Questrade is doing anything 'original' or 'different' much less 'bad'. In RRSPs you are not allowed to go into debt. So the costs of all trades must be covered. If there is not enough USD to pay the bill then enough CAD is converted to do so. What else would anyone expect? How margin accounts work depends on whether the broker sets up different accounts for different currencies. Some do, some don't. The whole point of using 'margin' is to buy securities when you don't have the cash to cover the cost. The result is a 'short' position in the cash. Short positions accrue interest expense which is added to the balance once a month. Every broker does this. If you buy a US stock in a USD account without the cash to cover it, you will end up with USD margin debt. If you buy US stock in an account that co-mingles both USD and CAD assets and cash, then there will be options during the trade asking if you want to settle in USD or CAD. If you settle in CAD then obviously the broker will convert the necessary CAD funds to pay for it. If you settle in US funds, but there is no USD cash in the account, then again, you have created a short position in USD.",
"title": ""
},
{
"docid": "907ee8efbd546f4e8397b7965b65f39d",
"text": "Eeeeeeh... No, you don't. In Canada, and pretty much any country with common sense they will rarely charge you for income made outside its borders. In the worst case scenario you're taxed on income deemed resulting from investment (stocks, bonds, etc.), but the general rule is... You don't pay taxes on income made abroad.",
"title": ""
},
{
"docid": "aeb176a02d712dd802fd6804e23b1081",
"text": "\"This page from the CRA website details the types of investments you can hold in a TFSA. You can hold individual shares, including ETFs, traded on any \"\"designated stock exchange\"\" in addition to the other types of investment you have listed. Here is a list of designated stock exchanges provided by the Department of Finance. As you can see, it includes pretty well every major stock exchange in the developed world. If your bank's TFSA only offers \"\"mutual funds, GICs and saving deposits\"\" then you need to open a TFSA with a different bank or a stock broking company with an execution only service that offers TFSA accounts. Almost all of the big banks will do this. I use Scotia iTrade, HSBC Invest Direct, and TD, though my TFSA's are all with HSBC currently. You will simply provide them with details of your bank account in order to facilitate money transfers/TFSA contributions. Since purchasing foreign shares involves changing your Canadian dollars into a foreign currency, one thing to watch out for when purchasing foreign shares is the potential for high foreign exchange spreads. They can be excessive in proportion to the investment being made. My experience is that HSBC offers by far the best spreads on FX, but you need to exchange a minimum of $10,000 in order to obtain a decent spread (typically between 0.25% and 0.5%). You may also wish to note that you can buy unhedged ETFs for the US and European markets on the Toronto exchange. This means you are paying next to nothing on the spread, though you obviously are still carrying the currency risk. For example, an unhedged S&P500 trades under the code ZSP (BMO unhedged) or XUS (iShares unhedged). In addition, it is important to consider that commissions for trades on foreign markets may be much higher than those on a Canadian exchange. This is not always the case. HSBC charge me a flat rate of $6.88 for both Toronto and New York trades, but for London they would charge up to 0.5% depending on the size of the trade. Some foreign exchanges carry additional trading costs. For example, London has a 0.5% stamp duty on purchases. EDIT One final thing worth mentioning is that, in my experience, holding US securities means that you will be required to register with the US tax authorities and with those US exchanges upon which you are trading. This just means fill out a number of different forms which will be provided by your stock broker. Exchange registrations can be done electronically, however US tax authority registration must be submitted in writing. Dividends you receive will be net of US withholding taxes. I am not aware of any capital gains reporting requirements to US authorities.\"",
"title": ""
},
{
"docid": "7ca2d2b8b76b64ae83c126adcee29378",
"text": "Depending on what state you live in in the United States, your Canadian brokerage may be able to sell products within the existing RRSP. I have an RRSP in Canada through TD Waterhouse and they infact just sent me a recent letter explaining that they are permitted to service my Canadian RRSP under the laws of Tennessee (where I live). The note went on to specifically state that they are not subject to the broker-dealer regulations of the US or the securities/regulations laws on the TN securities act. Furthermore, they state that Canadian RRSPs are not regulated under the securities laws of the US and the securities offered and sold to Canadian plans are exempt from registration with the SEC. When I call TD to do trades, I just ask for a Canada/US broker and that's who enters the sale for me. I declare my RRSP annually both to IRS under RRSP treaty and through FBAR reporting.",
"title": ""
},
{
"docid": "ab42ac4c2bed63438d52716bde6d5ff5",
"text": "\"A TFSA is a tax free savings account. It is a type of account where you can buy various investments like stocks, bonds, or funds (mutual, exchange traded, and money market). There are some other options but it's best to see what your bank or broker will allow. You probably specified the type of investment when you opened the account. You can look at your statements or maybe online to see what you're invested in. My guess is some kind of HISA (high interest savings account). This is kind of the default option for banks. The government created these accounts for a variety of reasons. The main stated reason was to encourage people to save. Obviously they also do things to get votes. There was an outcry after the change to a type of investment called \"\"investment trusts\"\". This could be seen as a consolation prize. These can be valuable to seniors for many reasons and they tend to vote more often. There was also an election promise to eliminate capital gains taxes in some fashion. It's not profitable for the government, in fact it supposedly cost the federal government $410 million in 2013. Banks make money by investing your deposit or by charging fees. You can see what every tax break 'costs' the government in lost revenue here http://www.fin.gc.ca/taxexp-depfisc/2013/taxexp1301-eng.asp#toc7\"",
"title": ""
},
{
"docid": "bec55c44ea141f5e27b7fa29ede776dd",
"text": "A questoin that I deal with almost every day. Like most investments it comes down to.....What is the purpose for this money? If it is truly a rainy day savings account that you may need in the short term, then fixed income investments like savings accounts, GIC's, Bonds, Bond funds and Fixed Income ETF's are ideal as they are taxed very inefficiently outside of any registered plan (therefore tax free in here). However if you have a plan in place that has all your short term needs covered elsewhere, I believe this is the place that you should be the most aggressive in your overall portfolio. If that mining stock goes up by 1000% wouldn't it be nice to put all of that gain in your pocket?",
"title": ""
},
{
"docid": "29bf60f160cfd49e16556707172aba39",
"text": "\"Your premise is false. When you withdraw money from a Tax Free Savings Account (TFSA), there is no tax due. Yes, you can read that again: withdrawals from a TFSA are tax free. They are labeled \"\"tax free\"\" for a good reason! After-tax money is deposited, and then from that point forward, no tax, no tax, no tax. :-) On a \"\"normal\"\", non-registered investment or savings account with no special treatment, your investment earnings will be taxed whenever gains are realized or income received (e.g. dividends or interest). You will necessarily have less in a normal non-registered investment or savings account compared to a TFSA, as long as the rate of return was positive, i.e. growing. Perhaps you were thinking not of comparing a regular investment account to a TFSA, but rather to a Registered Retirement Savings Plan (RRSP)? In the case of an RRSP, there is an up-front tax deduction, then earnings grow tax-deferred, and then on withdrawal, income tax is paid at regular rates. Even then, with RRSPs, if your marginal tax rate remains the same over time (not necessarily a reasonable assumption, but let's go with it) then you should still realize more after-tax income from your RRSP than from a normal non-registered investment or savings account. (Though, there's likely an exception case when most income came as qualified dividends and the capital itself hasn't appreciated.)\"",
"title": ""
},
{
"docid": "1611faea12bf19b2154ee123778d95d2",
"text": "\"HSBC, Hang Seng, and other HK banks had a series of special savings account offers when I lived in HK a few years ago. Some could be linked to the performance of your favorite stock or country's stock index. Interest rates were higher back then, around 6% one year. What they were effectively doing is taking the interest you would have earned and used it to place a bet on the stock or index in question. Technically, one way this can be done, for instance, is with call options and zero coupon bonds or notes. But there was nothing to strategize with once the account was set up, so the investor did not need to know how it worked behind the scenes... Looking at the deposit plus offering in particular, this one looks a little more dangerous than what I describe. See, now we are in an economy of low almost zero interest rates. So to boost the offered rate the bank is offering you an account where you guarantee the AUD/HKD rate for the bank in exchange for some extra interest. Effectively they sell AUD options (or want to cover their own AUD exposures) and you get some of that as extra interest. Problem is, if the AUD declines, then you lose money because the savings and interest will be converted to AUD at a contractual rate that you are agreeing to now when you take the deposit plus account. This risk of loss is also mentioned in the fine print. I wouldn't recommend this especially if the risks are not clear. If you read the fine print, you may determine you are better off with a multicurrency account, where you can change your HK$ into any currency you like and earn interest in that currency. None of these were \"\"leveraged\"\" forex accounts where you can bet on tiny fluctuations in currencies. Tiny being like 1% or 2% moves. Generally you should beware anything offering 50:1 or more leverage as a way to possibly lose all of your money quickly. Since you mentioned being a US citizen, you should learn about IRS form TD F 90-22.1 (which must be filed yearly if you have over $10,000 in foreign accounts) and google a little about the \"\"foreign account tax compliance act\"\", which shows a shift of the government towards more strict oversight of foreign accounts.\"",
"title": ""
},
{
"docid": "06e4704418d257227d647692a04fec2e",
"text": "If you are restricting yourself to Scotiabank (Both retail banking and iTrade), your choices are pretty limited. If you are exchanging more than CAD$25,000 to EUR without margin, you can call Scotiabank and ask for a quote with much lower spread than the published snapshots. The closest ETF that you are talking about is RWE.B on TSX, which is First Asset MSCI Europe Low Risk Weighted ETF (Unhedged). You will be exposed to huge equity market risk and you should do it only if you intend to hold it for 3-5 years. Another way of exchanging cash is without opening an account is through a currency exchange broker (search “toronto currency exchange” for relevant companies). First you send an email asking for a quote for the amount you wanted, then you send the CAD to them via cheque, and they would convert to EUR and deposit it to your EUR account at Scotiabank (retail banking). This method costs around 0.7% compared to 2.5% charged by Scotiabank. An example of these brokers is Interchange Currency Exchange in Toronto. If you are hedging more than 125000 EUR, the proper method is to open an account that supports trading Currency Futures on Globex (US CME group). You can long Euro/Canadian Dollar Futures on margin. The last method is to open an account at Interactive Brokers, put CAD in it, then borrow more CAD to buy EUR. This method costs a few dollars upon trading and the spread is negligible. You need to pay 2.25% per year margin interest through.",
"title": ""
},
{
"docid": "18119c60e17d718132faa1012fcc402c",
"text": "\"Not really, no. The assumption you're making—withdrawals from a corporation are subject to \"\"[ordinary] income tax\"\"—is simplistic. \"\"Income tax\"\" encompasses many taxes, some more benign than others, owing to credits and exemptions based on the kind of income. Moreover, the choices you listed as benefits in the sole-proprietor case—the RRSP, the TFSA, and capital gains treatment for non-registered investments—all remain open to the owner of a small corporation ... the RRSP to the extent that the owner has received salary to create contribution room. A corporation can even, at some expense, establish a defined benefit (DB) pension plan and exceed individual RRSP contribution limits. Yes, there is a more tax-efficient way for small business owners to benefit when it comes time to retirement. Here is an outline of two things I'm aware of: If your retirement withdrawals from your Canadian small business corporation would constitute withdrawal from the corporation's retained earnings (profits), i.e. income to the corporation that had already been subject to corporate income tax in prior years, then the corporation is able to declare such distributions as dividends and issue you a T5 slip (Statement of Investment Income) instead of a T4 slip (Statement of Remuneration Paid). Dividends received by Canadian residents from Canadian corporations benefit from the Dividend Tax Credit (DTC), which substantially increases the amount of income you can receive without incurring income tax. See TaxTips.ca - Non-eligible (small business) dividend tax credit (DTC). Quote: For a single individual with no income other than taxable Canadian dividends which are eligible for the small business dividend tax credit, in 2014 approximately $35,551 [...] could be earned before any federal* taxes were payable. * Provincial DTCs vary, and so combined federal/provincial maximums vary. See here. If you're wondering about \"\"non-eligible\"\" vs. \"\"eligible\"\": private small business corporation dividends are generally considered non-eligible for the best DTC benefit—but they get some benefit—while a large public corporation's dividends would generally be considered eligible. Eligible/non-eligible has to do with the corporation's own income tax rates; since Canadian small businesses already get a big tax break that large companies don't enjoy, the DTC for small businesses isn't as good as the DTC for public company dividends. Finally, even if there is hardly any same-year income tax advantage in taking dividends over salary from an active small business corporation (when you factor in both the income tax paid by the corporation and the individual), dividends still allow a business owner to smooth his income over time, which can result in a lower lifetime average tax rate. So you can use your business as a retained earnings piggy bank to spin off dividends that attract less tax than ordinary income. But! ... if you can convince somebody to buy your business from you, then you can benefit from the lifetime capital gains exemption of up to $800,000 on qualifying small business shares. i.e. you can receive up to $800K tax-free on the sale of your small business shares. This lifetime capital gains exemption is a big carrot—designed, I believe, to incentivize Canadian entrepreneurs to develop going-concern businesses that have value beyond their own time in the business. This means building things that would make your business worth buying, e.g. a valued brand or product, a customer base, intellectual property, etc. Of course, there are details and conditions with all of what I described, and I am not an accountant, so please consult a qualified, conflict-free professional if you need advice specific to your situation.\"",
"title": ""
},
{
"docid": "151ec6d3e24b890cc9732e88649dfd6e",
"text": "\"What you're describing makes sense. I'd probably call the non-liquid portion something besides my \"\"emergency fund\"\", but that's semantics mostly. If you have 3 months of \"\"very liquid\"\" cash in this emergency fund and you're comfortable that this amount is good for your situation, then I don't see why you can't have additional savings in more or less liquid vehicles. Whatever you set up, you'll want to think about how to tap it when you need it. You might have a CD ladder with one maturing every three months. That would give you access to these funds after your liquid funds dry up. (Or for a small/short term emergency, you'll be able to replenish the liquid fund with the next-maturing CD.) Or set up a T Bill ladder with the same structure. This might provide you with a tax advantage.\"",
"title": ""
},
{
"docid": "a61613930e868764aa3b86c7be05e08c",
"text": "I agree that best is subjective and will not give investment advice. However, the tax deductible part can be dealt with quite swiftly. If you need tax deductibility right now, at the expense of later, put it into an RSP account. If you don't need tax deductibility right now, put it into a TFSA. Assuming you have room in either of these vehicles, I would suggest using just an RSP or TFSA cash savings account for now at ING Direct. Three reasons: You get the immediate benefit of having put it somewhere, and in the case of the RSP, an immediate tax deductibility. You don't have to worry about rushing into a specific investment and can give yourself time to figure out your goals and portfolio composition. (Read about the Couch Potato portfolio for a starting point.) You can transfer your money from them for free and still keep it registered in whichever plan it is in. The last point is the most important for my suggestion. The ability to quickly park the cash in a registered account and to move it for free using the appropriate form at a later date. Most places have a sneaky transfer-out fee. ING may not be the only place that doesn't, but I haven't looked into many other places about this. You might find something else that works the same way. And please, don't ever use GIC and high return in the same sentence.",
"title": ""
},
{
"docid": "162c3be73cdea6ccf43e6834a2533223",
"text": "There is a tax treaty between Canada and the US that recognizes RRSPs as retirement accounts. You won't be taxed on the gains in your RRSP like you would be if it was in a TFSA. So you don't really have to do anything (except fill out a form for the IRS every year). The problem that usually arises is if you want to buy something else. I don't know of any Canadian brokerage that will sell products to a US resident. It's a question of where they're licensed. However the SEC has issued an exemption so you can try to argue with your broker to get a trade done. Link to SEC order With such a small amount in the account you may be paying fees or have it invested in funds with higher fees. You will have to do the math on whether or not you should just withdraw the money and invest in cheaper funds and accounts in the US. When you withdraw the money Canada will withhold a flat rate of 25% or in some circumstances 15%. For more info go to Serbinski (a cross border tax specialist).",
"title": ""
}
] |
fiqa
|
529d831a8312b153547b4c94a49e6bec
|
Must ETF companies match an investor's amount invested in an ETF?
|
[
{
"docid": "e68cfb5a28d39979c5839becde274e73",
"text": "\"First, it's an exaggeration to say \"\"every\"\" dollar. Traditional mutual funds, including money-market funds, keep a small fraction of their assets in cash for day-to-day transactions, maybe 1%. If you invest $1, they put that in the cash bucket and issue you a share. If you and 999 other people invest $100 each, not offset by people redeeming, they take the aggregated $100,000 and buy a bond or two. Conversely, if you redeem one share it comes out of cash, but if lots of people redeem they sell some bond(s) to cover those redemptions -- which works as long as the bond(s) can in fact be sold for close enough to their recorded value. And this doesn't mean they \"\"can't fail\"\". Even though they are (almost totally) invested in securities that are thought to be among the safest and most liquid available, in sufficiently extreme circumstances those investments can fall in market value, or they can become illiquid and unavailable to cover \"\"withdrawals\"\" (redemptions). ETFs are also fully invested, but the process is less direct. You don't just send money to the fund company. Instead: Thus as long as the underlyings for your ETF hold their value, which for a money market they are designed to, and the markets are open and the market maker firms are operating, your ETF shares are well backed. See https://en.wikipedia.org/wiki/Exchange-traded_fund for more.\"",
"title": ""
},
{
"docid": "446c12b0d6ce872ec6a585017050af10",
"text": "\"Does the bolded sentence apply for ETFs and ETF companies? No, the value of an ETF is determined by an exchange and thus the value of the share is whatever the trading price is. Thus, the price of an ETF may go up or down just like other securities. Money market funds can be a bit different as the mutual fund company will typically step in to avoid \"\"Breaking the Buck\"\" that could happen as a failure for that kind of fund. To wit, must ETF companies invest a dollar in the ETF for every dollar that an investor deposited in this aforesaid ETF? No, because an ETF is traded as shares on the market, unless you are using the creation/redemption mechanism for the ETF, you are buying and selling shares like most retail investors I'd suspect. If you are using the creation/redemption system then there are baskets of other securities that are being swapped either for shares in the ETF or from shares in the ETF.\"",
"title": ""
},
{
"docid": "4f8f5fa9a7144cf472c4d3c3c924557d",
"text": "\"The point here is actually about banks, or is in reference to banks. They expect you know how a savings account at a bank works, but not mutual funds, and so are trying to dispel an erroneous notion that you might have -- that the CBIC will insure your investment in the fund. Banks work by taking in deposits and lending that money out via mortgages. The mortgages can last up to 30 years, but the deposits are \"\"on demand\"\". Which means you can pull your money out at any time. See the problem? They're maintaining a fiction that that money is there, safe and sound in the bank vault, ready to be returned whenever you want it, when in fact it's been loaned out. And can't be called back quickly, either. They know only a little bit of that money will be \"\"demanded\"\" by depositors at any given time, so they keep a percentage called a \"\"reserve\"\" to satisfy that, er, demand. The rest, again, is loaned out. Gone. And usually that works out just fine. Except sometimes it doesn't, when people get scared they might not get their money back, and they all go to the bank at the same time to demand their on-demand deposits back. This is called a \"\"run on the bank\"\", and when that happens, the bank \"\"fails\"\". 'Cause it ain't got the money. What's failing, in fact, is the fiction that your money is there whenever you want it. And that's really bad, because when that happens to you at your bank, your friends the customers of other banks start worrying about their money, and run on their banks, which fail, which cause more people to worry and try to get their cash out, lather, rinse repeat, until the whole economy crashes. See -- The Great Depression. So, various governments introduced \"\"Deposit Insurance\"\", where the government will step in with the cash, so when you panic and pull all your money out of the bank, you can go home happy, cash in hand, and don't freak all your friends out. Therefore, the fear that your money might not really be there is assuaged, and it doesn't spread like a mental contagion. Everyone can comfortably go back to believing the fiction, and the economy goes back to merrily chugging along. Meanwhile, with mutual funds & ETFs, everyone understands the money you put in them is invested and not sitting in a gigantic vault, and so there's no need for government insurance to maintain the fiction. And that's the point they're trying to make. Poorly, I might add, where their wording is concerned.\"",
"title": ""
}
] |
[
{
"docid": "253c15553b75d266c1ef711891f4cf09",
"text": "Does me holding stock in the company make me an accredited investor with this company in particular? No. But maybe the site will let you trade it your shares to another accredited investor. Just ask, if the site operators have a securities lawyer they should be able to accomodate",
"title": ""
},
{
"docid": "0293c56e8290ecce3606fdb9ca285fe9",
"text": "http://www.efficientfrontier.com/ef/104/stupid.htm would have some data though a bit old about open-end funds vs an ETF that would be one point. Secondly, do you know that the Math on your ETF will always work out to whole numbers of shares or do you plan on using brokers that would allow fractional shares easily? This is a factor as $3,000 of an open-end fund will automatically go into fractional shares that isn't necessarily the case of an ETF where you have to specify a number of shares when you purchase as well as consider are you doing a market or limit order? These are a couple of things to keep in mind here. Lastly, what if the broker you use charges account maintenance fees for your account? In buying the mutual fund from the fund company directly, there may be a lower likelihood of having such fees. I don't know of any way to buy shares in the ETF directly without using a broker.",
"title": ""
},
{
"docid": "7f6a53aa69a54a982344454e7fb48230",
"text": "I think you understood much of what I say, in general. Unfortunately, I didn't follow Patches math. What I gleen from your summary is a 1% match to the 10% invested, but a .8% expense. The ETF VOO has a .05% annual fee, a bit better than SPY. A quick few calculations show that the 10% bonus does offset a long run of the .75% excess expense compared to external investing. After decades, the 401(k) appears to still be a bit ahead. Not the dramatic delta suggested in the prior answer, but enough to stay with the 401(k) in this situation. The tiny match still makes the difference. Edit - the question you linked to. The 401(k) had no match, and an awful 1.2% annual expense. This combination is deadly for the younger investor. Always an exception to offer - a 25% marginal rate earner close to retiring at 15%. The 401(k) deposit saves him 25, but can soon be withdrawn at 15, it's worth a a few years of that fee to make this happen. For the young person who is planning a quick exit from the company, same deal.",
"title": ""
},
{
"docid": "346a6c0d30585823d64d9a8c813b0b13",
"text": "\"You need a brokerage account to invest in ETFs (there are many different kinds of ETFs, not just one) and that usually means having some amount already deposited with them into the \"\"cash account\"\" in your name. Once the brokerage account is established, you can send whatever money from each paycheck to the brokerage and tell them to invest it in the ETF of your choice. There are no restrictions as to how much money you can send if you send them a check. If you want the money to be withheld from your paycheck, then of course, the limit is the amount of the take-home pay, and whether your employer offers such a service will affect the issue. If you are wanting to invest in ETFs through your employer's 401(k) plan (or 403(b) plan), there are lots of other considerations.\"",
"title": ""
},
{
"docid": "ed0ed68df5683cfbdc67e5ce8577bcd3",
"text": "Any ETF has expenses, including fees, and those are taken out of the assets of the fund as spelled out in the prospectus. Typically a fund has dividend income from its holdings, and it deducts the expenses from the that income, and only the net dividend is passed through to the ETF holder. In the case of QQQ, it certainly will have dividend income as it approximates a large stock index. The prospectus shows that it will adjust daily the reported Net Asset Value (NAV) to reflect accrued expenses, and the cash to pay them will come from the dividend cash. (If the dividend does not cover the expenses, the NAV will decline away from the modeled index.) Note that the NAV is not the ETF price found on the exchange, but is the underlying value. The price tends to track the NAV fairly closely, both because investors don't want to overpay for an ETF or get less than it is worth, and also because large institutions may buy or redeem a large block of shares (to profit) when the price is out of line. This will bring the price closer to that of the underlying asset (e.g. the NASDAQ 100 for QQQ) which is reflected by the NAV.",
"title": ""
},
{
"docid": "cb3d0cd50e3bf62b1ac4e80401593dd2",
"text": "There's really no right or wrong answer here because you'll be fine either way. If you've investing amounts in the low 5 figures you're likely just getting started, and if your asset allocation is not optimal it's not that big a deal because you have a long time horizon to adjust it, and the expense ratio differences here won't add up to that much. A third option is Vanguard ETFs, which have the expense ratio of Admiral Shares but have lower minimums (i.e. the cost of a single share, typically on the order of $100). However, they are a bit more advanced than mutual funds in that they trade on the market and require you to place orders rather than just specifying the amount you want to buy. A downside here is you might end up with a small amount of cash that you can't invest, since you can initially only buy whole numbers of ETFs shares. So what I'd recommend is buying roughly the correct number of ETFs shares you want except for your largest allocation, then use the rest of your cash on Admiral Shares of that (if possible). For example, let's say you have $15k to invest and you want to be 2/3 U.S. stock, 1/6 international stock, and 1/6 U.S. bond. I would buy as many shares of VXUS (international stock ETF) and BND (U.S. bond ETF) as you can get for $2500 each, then whatever is left over (~$10k) put into VTSAX (U.S. stock Admiral Shares mutual fund).",
"title": ""
},
{
"docid": "d3758f89694c049210e7beac9efa2c3a",
"text": "The trend in ETFs is total return: where the ETF automatically reinvests dividends. This philosophy is undoubtedly influenced by that trend. The rich and retired receive nearly all income from interest, dividends, and capital gains; therefore, one who receives income exclusively from dividends and capital gains must fund by withdrawing dividends and/or liquidating holdings. For a total return ETF, the situation is even more limiting: income can only be funded by liquidation. The expected profit is lost for the dividend as well as liquidating since the dividend can merely be converted back into securities new or pre-existing. In this regard, dividends and investments are equal. One who withdraws dividends and liquidates holdings should be careful not to liquidate faster than the rate of growth.",
"title": ""
},
{
"docid": "c519cfaf3da6ff9ece7787abb0f3bb97",
"text": "This is more than likely a thing about your financial institution and the exchanges where they trade shares. Some exchanges cannot/will not handle odd lot transactions. Most established brokerages have software and accounting systems that will deal in round lots with the exchanges, but can track your shares individually. Sometimes specific stocks cannot be purchased in odd lots due to circumstances specific to that stock (trading only on a specific exchange, for example). Most brokerages offer dollar-cost averaging programs, but may limit which stocks are eligible, due to odd lot and partial share purchases. Check with your brokerage to see if they can support odd lot and/or DCA purchases. You may find another similar ETF with similar holdings that has better trading conditions, or might consider an open-end mutual fund with similar objectives. Mutual funds allow partial share purchases (you have $100 to invest today, and they issue you 35.2 shares, for example).",
"title": ""
},
{
"docid": "3434f214ebf6ea235e1f6dc952df5914",
"text": "\"How does [FINRA's 5% markup policy] (http://www.investopedia.com/study-guide/series-55/commissions-and-trade-complaints/finra-5-markup-policy/) affect the expense/profit/value of an ETF/Mutual Fund? An extreme example to illustrate: If my fund buys 100 IBM @ 100, The fund would credit the broker $10,000 for those shares and the broker would give the fund 100 shares. Additionally there would be some sort of commission (say $10) paid on top of the transaction which would come out of the fund's expense ratio. But the broker is \"\"allowed\"\" to charge a 5% markup. So that means, that $100 price that I see could have hit the tape at $95 (assume 5% markup which is allowed). Thus, assuming that the day had zero volatility for IBM, when the fund gets priced at the end of the day, my 100 shares which \"\"cost\"\" 10,000 (plus $10) now has a market value of $9,500. Is that how it \"\"could\"\" work? That 500 isn't calculated as part of the expense of the fund is it? (how could it be, they don't know about the exact value of the markup).\"",
"title": ""
},
{
"docid": "ebd2083d3c4dfd4d089cf638a06602e2",
"text": "One thing I would add to @littleadv (buy an ETF instead of doing your own) answer would be ensure that the dividend yield matches. Expense ratios aren't the only thing that eat you with mutual funds: the managers can hold on to a large percentage of the dividends that the stocks normally pay (for instance, if by holding onto the same stocks, you would normally receive 3% a year in dividends, but by having a mutual fund, you only receive .75%, that's an additional cost to you). If you tried to match the DJIA on your own, you would have an advantage of receiving the dividend yields on the stocks paying dividends. The downsides: distributing your investments to match and the costs of actual purchases.",
"title": ""
},
{
"docid": "32778590fecaad9af44b55729a0b9ea3",
"text": "I have been careful here to cover both shares in companies and in ETFs (Exchange Traded Funds). Some information such as around corporate actions and AGMs is only applicable for company shares and not ETFs. The shares that you own are registered to you through the broker that you bought them via but are verified by independent fund administrators and brokerage reconciliation processes. This means that there is independent verification that the broker has those shares and that they are ring fenced as being yours. The important point in this is that the broker cannot sell them for their own profit or otherwise use them for their own benefit, such as for collateral against margin etc.. 1) Since the broker is keeping the shares for you they are still acting as an intermediary. In order to prove that you own the shares and have the right to sell them you need to transfer the registration to another broker in order to sell them through that broker. This typically, but not always, involves some kind of fee and the broker that you transfer to will need to be able to hold and deal in those shares. Not all brokers have access to all markets. 2) You can sell your shares through a different broker to the one you bought them through but you will need to transfer your ownership to the other broker and that broker will need to have access to that market. 3) You will normally, depending on your broker, get an email or other message on settlement which can be around two days after your purchase. You should also be able to see them in your online account UI before settlement. You usually don't get any messages from the issuing entity for the instrument until AGM time when you may get invited to the AGM if you hold enough stock. All other corporate actions should be handled for you by your broker. It is rare that settlement does not go through on well regulated markets, such as European, Hong Kong, Japanese, and US markets but this is more common on other markets. In particular I have seen quite a lot of trades reversed on the Istanbul market (XIST) recently. That is not to say that XIST is unsafe its just that I happen to have seen a few trades reversed recently.",
"title": ""
},
{
"docid": "0b4d041501b889e30080b61b2a31216c",
"text": "You could certainly look at the holdings of index funds and choose index funds that meet your qualifications. Funds allow you to see their holdings, and in most cases you can tell from the description whether certain companies would qualify for their fund or not based on that description - particularly if you have a small set of companies that would be problems. You could also pick a fund category that is industry-specific. I invest in part in a Healthcare-focused fund, for example. Pick a few industries that are relatively diverse from each other in terms of topics, but are still specific in terms of industry - a healthcare fund, a commodities fund, an REIT fund. Then you could be confident that they weren't investing in defense contractors or big banks or whatever you object to. However, if you don't feel like you know enough to filter on your own, and want the diversity from non-industry-specific funds, your best option is likely a 'socially screened' fund like VFTSX is likely your best option; given there are many similar funds in that area, you might simply pick the one that is most similar to you in philosophy.",
"title": ""
},
{
"docid": "8cb549009ae9d2f1a8976238da587253",
"text": "\"My knowledge relates to ETFs only. By definition, an ETF's total assets can increase or decrease based upon how many shares are issued or redeemed. If somebody sells shares back to the ETF provider (rather than somebody else on market) then the underlying assets need to be sold, and vice-versa for purchasing from the ETF provider. ETFs also allow redemptions too in addition to this. For an ETF, to determine its total assets, you need to you need to analyze the Total Shares on Issue multipled by the Net Asset Value. ETFs are required to report shares outstanding and NAV on a daily basis. \"\"Total assets\"\" is probably more a function of marketing rather than \"\"demand\"\" and this is why most funds report on a net-asset-value-per-share basis. Some sites report on \"\"Net Inflows\"\" is basically the net change in shares outstanding multiplied by the ETF price. If you want to see this plotted over time you can use a such as: http://www.etf.com/etfanalytics/etf-fund-flows-tool which allows you to see this as a \"\"net flows\"\" on a date range basis.\"",
"title": ""
},
{
"docid": "a6ee4e5de0eaac8cd605fe3bd7730482",
"text": "\"You seem to be assuming that ETFs must all work like the more traditional closed-end funds, where the market price per share tends—based on supply and demand—to significantly deviate from the underlying net asset value per share. The assumption is simplistic. What are traditionally referred to as closed-end funds (CEFs), where unit creation and redemption are very tightly controlled, have been around for a long time, and yes, they do often trade at a premium or discount to NAV because the quantity is inflexible. Yet, what is generally meant when the label \"\"ETF\"\" is used (despite CEFs also being both \"\"exchange-traded\"\" and \"\"funds\"\") are those securities which are not just exchange-traded, and funds, but also typically have two specific characteristics: (a) that they are based on some published index, and (b) that a mechanism exists for shares to be created or redeemed by large market participants. These characteristics facilitate efficient pricing through arbitrage. Essentially, when large market participants notice the price of an ETF diverging from the value of the shares held by the fund, new units of the ETF can get created or redeemed in bulk. The divergence quickly narrows as these participants buy or sell ETF units to capture the difference. So, the persistent premium (sometimes dear) or discount (sometimes deep) one can easily witness in the CEF universe tend not to occur with the typical ETF. Much of the time, prices for ETFs will tend to be very close to their net asset value. However, it isn't always the case, so proceed with some caution anyway. Both CEF and ETF providers generally publish information about their funds online. You will want to find out what is the underlying Net Asset Value (NAV) per share, and then you can determine if the market price trades at a premium or a discount to NAV. Assuming little difference in an ETF's price vs. its NAV, the more interesting question to ask about an ETF then becomes whether the NAV itself is a bargain, or not. That means you'll need to be more concerned with what stocks are in the index the fund tracks, and whether those stocks are a bargain, or not, at their current prices. i.e. The ETF is a basket, so look at each thing in the basket. Of course, most people buy ETFs because they don't want to do this kind of analysis and are happy with market average returns. Even so, sector-based ETFs are often used by traders to buy (or sell) entire sectors that may be undervalued (or overvalued).\"",
"title": ""
},
{
"docid": "b15d163a90235fed85ed81ab71d178ac",
"text": "\"Do I understand correctly, that we still can file as \"\"Married filing jointly\"\", just add Schedule C and Schedule SE for her? Yes. Business registration information letter she got once registered mentions that her due date for filing tax return is January 31, 2016. Does this prevent us from filing jointly (as far as I understand, I can't file my income before that date)? IRS sends no such letters. IRS also doesn't require any registration. Be careful, you might be a victim to a phishing attack here. In any case, sole proprietor files a regular individual tax return with the regular April 15th deadline. Do I understand correctly that we do not qualify as \"\"Family partnership\"\" (I do not participate in her business in any way other than giving her money for initial tools/materials purchase)? Yes. Do I understand correctly that she did not have to do regular estimated tax payments as business was not expected to generate income this year? You're asking or saying? How would we know what she expected? In any case, you can use your withholding (adjust the W4) to compensate.\"",
"title": ""
}
] |
fiqa
|
184420851abaf5e6ac4546dc9292339f
|
Does a falling dollar mean doom for real estate?
|
[
{
"docid": "580cf0af2025230d148068d848f9d37b",
"text": "A falling $AUD would be beneficial to exporters, and thus overall good for the economy. If the economy improves and exporters start growing profits, that means they will start to employ more people and employment will increase - and with higher employment, employees will become more confident to make purchases, including purchasing property. I feel the falling $AUD will be beneficial for the economy and the housing market. However, what you should consider is that with an improving economy and a rising property market, it will only be a matter of time before interest rates start rising. With a lower $AUD the RBA will be more confident in starting to increase interest rates. And increasing interest rates will have a dampening effect on the housing market. You are looking to buy a property to live in - so how long do you intend to live in and hold the property? I would assume at least for the medium to long term. If this is your intention then why are you getting cold feet? What you should be concerned about is that you do not overstretch on your borrowings! Make sure you allow a buffer of 2% to 3% above current interest rates so that if rates do go up you can still afford the repayments. And if you get a fixed rate - then you should allow the buffer in case variable rates are higher when your fixed period is over. Regarding the doomsayers telling you that property prices are going to crash - well they were saying that in 2008, then again in 2010, then again in 2012. I don't know about you but I have seen no crash. Sure when interest rates have gone up property prices have levelled off and maybe gone down by 10% to 15% in some areas, but as soon as interest rates start falling again property prices start increasing again. It's all part of the property cycle. I actually find it is a better time to buy when interest rates are higher and you can negotiate a better bargain and lower price. Then when interest rates start falling you benefit from lower repayments and increasing property prices. The only way there will be a property crash in Australia is if there was a dramatic economic downturn and unemployment rates rose to 10% or higher. But with good economic conditions, an increasing population and low supplies of newly build housing in Australia, I see no dramatic crashes in the foreseeable future. Yes we may get periods of weakness when interest rates increase, with falls up to 15% in some areas, but no crash of 40% plus. As I said above, these periods of weakness actually provide opportunities to buy properties at a bit of a discount. EDIT In your comments you say you intend to buy with a monthly mortgage repayment of $2500 in place of your current monthly rent of $1800. That means your loan amount would be somewhere around $550k to $600K. You also mention you would be taking on a 5 year fixed rate, and look to sell in about 2 years time if you can break even (I assume that is break even on the price you bought at). In 2 years you would have paid $16,800 more on your mortgage than you would have in rent. So here are the facts: A better strategy:",
"title": ""
}
] |
[
{
"docid": "6207d6f6b6c4c84fc02c0153c0fc89f6",
"text": "I would strongly recommend investing in assets and commodities. I personally believe fiat money is losing its value because of a rising inflation and the price of oil. The collapse of the euro should considerably affect the US currency and shake up other regions of the world in forex markets. In my opinion, safest investment these days are hard assets and commodities. Real estate, land, gold, silver(my favorite) and food could provide some lucrative benefits. GL mate!",
"title": ""
},
{
"docid": "df91c47eafc6397732ede7d8f2fe2602",
"text": "\"You are mixing issues here. And it's tough for members to answer without more detail, the current mortgage rate in your country, for one. It's also interesting to parse out your question. \"\"I wish to safely invest money. Should I invest in real estate.\"\" But then the text offers that it's not an investment, it's a home to live in. This is where the trouble is. And it effectively creates 2 questions to address. The real question - Buy vs Rent. I know you mentioned Euros. Fortunately, mortgages aren't going to be too different, lower/higher, and tax consequence, but all can be adjusted. The New York Times offered a beautiful infographing calculator Is It Better to Rent or Buy? For those not interested in viewing it, they run the math, and the simple punchline is this - The home/rent ratio can have an incredibly wide range. I've read real estate blogs that say the rent should be 2% of the home value. That's a 4 to 1 home/rent (per year). A neighbor rented his higher end home, and the ratio was over 25 to 1. i.e. the rent for the year was about 4% the value of the home. It's this range that makes the choice less than obvious. The second part of your question is how to stay safely invested if you fear your own currency will collapse. That quickly morphs into too speculative a question. Some will quickly say \"\"gold\"\" and others would point out that a stockpile of weapons, ammo, and food would be the best choice to survive that.\"",
"title": ""
},
{
"docid": "1ebda2a7bb0b077f8bc29ca0eb874729",
"text": "Yes, this phenomenon is well documented. A collapse of an economy's exchange rate is coincidented with a collapse in its equities market. The recent calamities in Turkey, etc during 2014 had similar results. Inflation is highly correlated to valuations, and a collapse of an exchange rate is highly inflationary, so a collapse of an exchange rate is highly correlated to a collapse in valuations.",
"title": ""
},
{
"docid": "9a8d7995d7303fd33d5e096f3635f99c",
"text": "\"There is a substantial likelihood over the next several years that the US Dollar will experience inflation. (You may have heard terms like \"\"Quantitative Easing.\"\") With inflation, the value of each dollar you have will go down. This also means that the value of each dollar you owe will go down as well. So, taking out a loan / issuing a bond at a very good rate, converting it into an asset that's a better way to store value (possibly including stock in a big stable company like MSFT) and then watching inflation reduce the (real) value of the loan faster than the interest piles up... that's like getting free money. Combine that with the tax-shelter games alluded to by everyone else, and it starts to look like a very profitable endeavour.\"",
"title": ""
},
{
"docid": "e0b589d58e89dc2487eaf6e429674240",
"text": "\"Americans are snapping, like crazy. And not only Americans, I know a lot of people from out of country are snapping as well, similarly to your Australian friend. The market is crazy hot. I'm not familiar with Cleveland, but I am familiar with Phoenix - the prices are up at least 20-30% from what they were a couple of years ago, and the trend is not changing. However, these are not something \"\"everyone\"\" can buy. It is very hard to get these properties financed. I found it impossible (as mentioned, I bought in Phoenix). That means you have to pay cash. Not everyone has tens or hundreds of thousands of dollars in cash available for a real estate investment. For many Americans, 30-60K needed to buy a property in these markets is an amount they cannot afford to invest, even if they have it at hand. Also, keep in mind that investing in rental property requires being able to support it - pay taxes and expenses even if it is not rented, pay to property managers, utility bills, gardeners and plumbers, insurance and property taxes - all these can amount to quite a lot. So its not just the initial investment. Many times \"\"advertised\"\" rents are not the actual rents paid. If he indeed has it rented at $900 - then its good. But if he was told \"\"hey, buy it and you'll be able to rent it out at $900\"\" - wouldn't count on that. I know many foreigners who fell in these traps. Do your market research and see what the costs are at these neighborhoods. Keep in mind, that these are distressed neighborhoods, with a lot of foreclosed houses and a lot of unemployment. It is likely that there are houses empty as people are moving out being out of job. It may be tough to find a renter, and the renters you find may not be able to pay the rent. But all that said - yes, those who can - are snapping.\"",
"title": ""
},
{
"docid": "9d7889c564e13973982ade3a7679300e",
"text": "What about the debt attached to more recently purchased properties, purchased at the price before the market gets flooded with baby-boomer homes? I'm not an expert in real estate finance, but it sounds like if that downward pressure on prices isn't slight, financial institutions will be taking that risk for anyone who defaults on a mortgage after their property loses a substantial amount of its value. It seems like immigration could play an important role in offsetting this and keeping the prices stable, but that's a politically unpredictable issue to say the least.",
"title": ""
},
{
"docid": "45c3cb28491d6b35f3219f442d3100a6",
"text": "\"These have the potential to become \"\"end-of-the-world\"\" scenarios, so I'll keep this very clear. If you start to feel that any particular investment may suddenly become worthless then it is wise to liquidate that asset and transfer your wealth somewhere else. If your wealth happens to be invested in cash then transferring that wealth into something else is still valid. Digging a hole in the ground isn't useful and running for the border probably won't be necessary. Consider countries that have suffered actual currency collapse and debt default. Take Zimbabwe, for example. Even as inflation went into the millions of percent, the Zimbabwe stock exchange soared as investors were prepared to spend ever-more of their devaluing currency to buy stable stocks in a small number of locally listed companies. Even if the Euro were to suffer a critical fall, European companies would probably be ok. If you didn't panic and dig caches in the back garden over the fall of dotcom, there is no need to panic over the decline of certain currencies. Just diversify your risk and buy non-cash (or euro) assets. Update: A few ideas re diversification: The problem for Greece isn't really a euro problem; it is local. Local property, local companies ... these can be affected by default because no-one believes in the entirety of the Greek economy, not just the currency it happens to be using - so diversification really means buying things that are outside Greece.\"",
"title": ""
},
{
"docid": "1372eca98843f33d82d53e28b69a5f0b",
"text": "\"No, it can really not. Look at Detroit, which has lost a million residents over the past few decades. There is plenty of real estate which will not go for anything like it was sold. Other markets are very risky, like Florida, where speculators drive too much of the price for it to be stable. You have to be sure to buy on the downturn. A lot of price drops in real estate are masked because sellers just don't sell, so you don't really know how low the price is if you absolutely had to sell. In general, in most of America, anyway, you can expect Real Estate to keep up with inflation, but not do much better than that. It is the rental income or the leverage (if you buy with a mortgage) that makes most of the returns. In urban markets that are getting an influx of people and industry, however, Real Estate can indeed outpace inflation, but the number of markets that do this are rare. Also, if you look at it strictly as an investment (as opposed to the question of \"\"Is it worth it to own my own home?\"\") there are a lot of additional costs that you have to recoup, from property taxes to bills, rental headaches etc. It's an investment like any other, and should be approached with the same due diligence.\"",
"title": ""
},
{
"docid": "1e758473b1265a4258993587b6d485ba",
"text": "It could be a a way to preserve the value of your money, but depends upon various factors. If a country defaults, and it leads to hyper-inflation, by definition that means that money loses its purchasing power. In even simpler terms, it cannot buy as much tomorrow as I could today. Therefore people can be incented to either hoard physical goods, or other non-perishable items. Real-estate may well be such an item. If you are resident in the country, you have to live somewhere. It is possible that a landlord might try to raise rent beyond what your job is willing to pay. Of course, in a house, you might have a similar situation with utilities like electricity... Assuming some kind of re-stabilization of the economy and currency, even with several more zeros on the end, it is conceivable that the house would subsequently sell for an appropriately inflation adjusted amount, as other in-demand physical goods may. Lots of variables. Good Luck.",
"title": ""
},
{
"docid": "62434a140f0cfd64e57c57b6ba1b6a0a",
"text": "\"I have a friend who had went on a seminar with FortuneBuilders (the company that has Than Merrill as CEO). He told me that one of the things taught in that seminar was how to find funding for the property that you want to flip. One of the things he mentioned was that there are so-called \"\"hard money\"\" lenders who are willing to lend you the money for the property in exchange for getting their name on the property title. Last time I checked it looked like here in Florida we had at least Bridgewell Capital and Fairview Commercial Lending that were in that business. These hard money lenders get their investment back when the house is sold. So there is some underlying expectation that the house can be sold with some profit (to reimburse both the lender and you for your work). That friend of mine did tell me that he had flipped a house once but that he did not receive the funding to that from a lender but from an in-law, however it was through a similar arrangement.\"",
"title": ""
},
{
"docid": "477ffe8483980b16ca4f7dc9fd326010",
"text": "\"If you do as you propose you are going to get burned. You need to sell, then start to rent. amongst other things. Since 2008, the economy never \"\"recovered,\"\" but was sort of stabilized temporarily like a fighter on the ropes. The economy is beginning to collapse again, and that collapse will accelerate around the Fall. The dollar too will also begin its delayed downward fall come Autumn. Just one example of what I speak: https://research.stlouisfed.org/fred2/series/CIVPART I would be happy to tell you more if you like, but I am already going to get pilloried for what I have already said. I do not sell anything, or push anything, but since you asked, and I follow this day in and day out, I thought that I would give you my very well informed answer. Take it for what it's worth. So let me know if you want more.\"",
"title": ""
},
{
"docid": "809ccbb5c07858622251eb8ac3250b5d",
"text": "High risk foreign debt is great until the bottom falls out of the market when the government default on debt or revalues currency. If you do this, you should be able to sustain near total losses of principal and interest.",
"title": ""
},
{
"docid": "cdacd159176e301372a26a6f8d7cb14d",
"text": "\"No, this is not solid advice. It's a prediction with very little factual basis, since US interest rates are kept just as low and debt levels are just as high as in the Eurozone. The USD may rise or fall against the EUR, stay the same or move back and forth. Nobody can say with any certainty. However, it is not nearly as risky as \"\"normal forex speculation\"\", since that is usually very short term and highly leveraged. You're unlikely to lose more than 20-30% of your capital by just buying and holding USD. Of course, the potential gains are also limited.\"",
"title": ""
},
{
"docid": "78b34ddb0cc670476868575472df6541",
"text": "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.",
"title": ""
},
{
"docid": "14dfd4204061a8a6f575f0f1353fff93",
"text": "In my experience, you don't need to endorse a check with a signature to deposit it into your account. You do if you are exchanging the check for cash. Businesses usually have a stamp with their account number on them. Once stamped, those checks are only able to be deposited into that account. Individuals can do the same. I have had issues depositing insurance and government checks in the past that had both my and my wife's name on them. Both of us had to endorse the check to be able to deposit them. I think this was some kind of fraud prevention scheme, so that later one of us couldn't claim they didn't know anything about the check.",
"title": ""
}
] |
fiqa
|
2448ba96e26b5ae03f48d70bd23e55ba
|
Should I buy a house or am I making silly assumptions that I can afford it?
|
[
{
"docid": "1eb13c9666e53791ca4cf6f61715f852",
"text": "\"The (interest bearing) mortgage of £300,000 would be SIX times your salary. That's a ratio that was found in Japan, and (I believe) was a main reason for their depressed economy of the past two decades. Even with an interest free loan of nearly £150,000, it would be a huge gamble for someone of your income. Essentially, you are gambling that 1) your income will \"\"grow\"\" into your mortgage, (and that's counting income from renting part of the property) or 2) the house will rise in value, thereby bailing you out. That was a gamble that many Americans took, and lost, in the past ten years. If you do this, you may be one of the \"\"lucky\"\" ones, you may not, but you are really taking your future in your hands. The American rule of thumb is that your mortgage should be no more than 2.5-3 times income, that is maybe up to £150,000. Perhaps £200,000 if £50,000 or so of that is interest free. But not to the numbers you're talking about.\"",
"title": ""
},
{
"docid": "1c2347a4ed4cd25bf7adcbdf7126f9d7",
"text": "The rules of thumb are there for a reason. In this case, they reflect good banking and common sense by the buyer. When we bought our house 15 years ago it cost 2.5 times our salary and we put 20% down, putting the mortgage at exactly 2X our income. My wife thought we were stretching ourselves, getting too big a house compared to our income. You are proposing buying a house valued at 7X your income. Granted, rates have dropped in these 15 years, so pushing 3X may be okay, the 26% rule still needs to be followed. You are proposing to put nearly 75% of your income to the mortgage? Right? The regular payment plus the 25K/yr saved to pay that interest free loan? Wow. You are over reaching by double, unless the rental market is so tight that you can actually rent two rooms out to cover over half the mortgage. Consider talking to a friendly local banker, he (or she) will likely give you the same advice we are. These ratios don't change too much by country, interest rate and mortgages aren't that different. I wish you well, welcome to SE.",
"title": ""
},
{
"docid": "6ade21fd3e683ecce1e0dc99e3e3f3fa",
"text": "\"Having convinced myself that there is no point of paying someone's else mortgage Somewhat rhetorical this many years later, but I expect some other kid forcefed the obsession with propping up the housing market might be repeating the nonsense about \"\"paying someone else's mortgage\"\" and read this. Will you be buying your own farm to grow your own food, or are you happy with people using the money you spend on food for a mortgage? How about clothes? Will you be weaving your own clothes because you don't want money you spend on clothes to pay someone else's mortgage? What's special about the money you pay for rent that you get annoyed at how someone else spends it? Don't get a mortgage just because you don't like the idea of how other people might spend the money that's no longer yours after you pay them with it. As an aside, at your age with your income and no debt, you could be sensibly investing a lot of money. If you did that for five years, you'd be in a much better position that you would be tying yourself to whatever current scheme the UK is using to desperately prop up house prices.\"",
"title": ""
},
{
"docid": "c20caa866e1e2694a2da247c5e9f80a9",
"text": "A common rule of thumb is the 28/36 ratio. It's described here. In your case, with a gross (?) salary of £50,000, that means that you should spend no more than 28% of it, or £1,167 per month on housing. You may be able to swing a bit more because you have no debts and a modest amount in your savings. The 36% part comes in as the amount you can spend servicing all your debt, including mortgage. In your case, based on a gross (?) salary of £50,000, that'd be £1,500 per month. Again, that is to cover your housing costs and any additional debt you are servicing. So, you need to figure out how much you could bring in through rent to make up the rest. As at least one other person has commented, the rule of thumb is that your mortgage should be no more than 2.5 - 3 times your income. I personally think you are not a good candidate for a mortgage of the size you are discussing. That said, I no longer live in England. If you could feel fairly secure getting someone to pay you enough in rent to bring down your total mortgage and loan repayment amounts to £1,500 or so a month, you may want to consider it. Remember, though, that it may not always be easy to find renters.",
"title": ""
},
{
"docid": "933d4d77ab71aaf0bdb5e1d198ab6f1b",
"text": "When I bought my own place, mortgage lenders worked on 3 x salary basis. Admittedly that was joint salary - eg you and spouse could sum your salaries. Relaxing this ratio is one of the reasons we are in the mess we are now. You are shrewd (my view) to realise that buying is better than renting. But you also should consider the short term likely movement in house prices. I think this could be down. If prices continue to fall, buying gets easier the longer you wait. When house prices do hit rock bottom, and you are sure they have, then you can afford to take a gamble. Lets face it, if prices are moving up, even if you lose your job and cannot pay, you can sell and you have potentially gained the increase in the period when it went up. Also remember that getting the mortgage is the easy bit. Paying in the longer term is the really hard part of the deal.",
"title": ""
}
] |
[
{
"docid": "3d352dd687331678cf1e9b26bddfc96b",
"text": "\"1) Don't buy a house as an investment. Buy a house because you've reached the point in your life where you don't expect to move in the next five years and you'd prefer to own a house (with its advantages/disadvantages) than to rent (with its advantages/disadvantages). Thinking of houses primarily as investments is what caused the housing bubble, crash, and Great Recession. 2) Before buying a house for cash, look at the available mortgage interest rates versus market rate of return. Owning the house outright is slightly lower stress, but using the house as the basis for a \"\"leveraged investment\"\" may be financially wiser. (I compromised; I paid 50% down and took a mortgage for the other 50%.) 3) 1 year is short-term. Your money doesn't belong in the market if you're going to need it in the short term. If you really intend to pull it back out that soon, I'd stick with CD/money-market kinds of instruments. 4) Remember that while a house is illiquid, it is possible to take out home equity loans... so money you put into a house isn't completely inaccessible. You just can't move elsewhere as easily.\"",
"title": ""
},
{
"docid": "dea708a4a3ed2acf96b85950993dd8b2",
"text": "\"It certainly seems like you are focusing on the emotional factors. That's your blind spot, and it's the surest path to a situation where your husband gets to say \"\"I told you so\"\". I recommend you steer straight into that blind spot, and focus your studies on the business aspects of buying and owning homes. You should be able to do spreadsheets 6 ways from Sunday, be able to recite every tax deduction you'll get as a homeowner, know the resale impacts of 1 bathroom vs 2, tell a dirty house from a broken house, etc. Everybody's got their favorites, mine are a bit dated but I like Robert Irwin and Robert Allen's books. For instance: a philosophy of Allen's that I really like: never sell. This avoids several problems, like the considerable costs of money, time and nerves of actually selling a house, stress about house prices, mistaking your house's equity for an ATM machine, and byzantine rules for capital gains tax mainly if you rent out the house, which vary dramatically by nation. In fact the whole area of taxes needs careful study. There's another side to the business of home ownership, and that's renting to others. There's a whole set of economics there - and that is a factor in what you buy. Now AirBNB adds a new wrinkle because there's some real money there. Come to understand that market well enough to gauge whether a duplex or triplex will be a money maker. Many regular folk like you have retired early and live off the rental income from their properties. JoeTaxpayer has an interesting way of looking at the finances of housing: if a house doesn't make sense as a a rental unit, maybe it doesn't make sense as a live-in either. So learn how to identify those fundamentals - the numbers. And get in the habit of evaluating houses. Work it regularly until it's second nature. Then, yes, you'll see houses you fall in love with, partly because the numbers work. It also helps to be handy. It really, really changes the economics if you can do your own quality work, because you don't need to spend any money on labor to convert a dirty house into a clean house. And lots of people do, and there's a whole SE just for that. There is a huge difference between going down to the local building supply and getting the water pipe you need, vs. having to call a plumber. And please deal with local businesses, please don't go to the Big Box stores, their service is abominable, they will cheerfully sell you a gadget salad of junk that doesn't work together, and I can't imagine a colder and less inviting scene to come up as a handy person.\"",
"title": ""
},
{
"docid": "33d099c8da7f15157ff66e6ab94e8a96",
"text": "My in-laws are pressuring me to buy a home. I don't really have much financial experience. In fact, I'm a nightmare with finances. I almost have my student loans payed off from school. My in-laws and husband are great with finances and with real-estate. My husband has a good job and $200k in savings. I have a good job too, and still have some debt from school. (approx $60k left of 180k). They say the house will be available in Jan or February for purchase, and that we should really try to buy it (prob $2-3 mil). My guess is they want to make it available to us off the market (which is a huge benefit in this area, there are really no houses available lately) . The problem is: I am uncomfortable because I don't have all of my loans payed off, I could divert money away from paying off the loans in order to save for a larger downpayment. I just got a bonus of $35k (after taxes) I don't think I'll have all of my loans payed off by January. Should I save my money for the downpayment or focus on my loans, should I go for the house? I don't know how to weigh these options against each other with such little experience.",
"title": ""
},
{
"docid": "c660aa77d34da2bf069924c305d831ea",
"text": "\"I am going to respond to a very thin sliver of what's going on. Skip ahead 4 years. When buying that house, is it better to have $48K in the bank but a $48K student loan, or to have neither? That $48K may very well be what it would take to put you over the 20% down payment threshhold thus avoiding PMI. Banks let you have a certain amount of non-mortgage debt before impacting your ability to borrow. It's the difference between the 28% for the mortgage, insurance and property tax, and the total 38% debt service. What I offer above is a bit counter-intuitive, and I only mention it as you said the house is a priority. I'm answering as if you asked \"\"how do I maximize my purchasing power if I wish to buy a house in the next few years?\"\"\"",
"title": ""
},
{
"docid": "4577731b949a0dece0a8ed46a0bc96d8",
"text": "\"I recently moved out from my parents place, after having built up sufficient funds, and gone through these questions myself. I live near Louisville, KY which has a significant effect on my income, cost of living, and cost of housing. Factor that into your decisions. To answer your questions in order: When do I know that I'm financially stable to move out? When you have enough money set aside for all projected expenses for 3-6 months and an emergency fund of 4-10K, depending on how large a safety net you want or need. Note that part of the reason for the emergency fund is as a buffer for the things you won't realize you need until you move out, such as pots or chairs. It also covers things being more expensive than anticipated. Should I wait until both my emergency fund is at least 6 months of pay and my loans in my parents' names is paid off (to free up money)? 6 months of pay is not a good measuring stick. Use months of expenses instead. In general, student loans are a small enough cost per month that you just need to factor them into your costs. When should I factor in the newer car investment? How much should I have set aside for the car? Do the car while you are living at home. This allows you to put more than the minimum payment down each month, and you can get ahead. That looks good on your credit, and allows refinancing later for a lower minimum payment when you move out. Finally, it gives you a \"\"sense\"\" of the monthly cost while you still have leeway to adjust things. Depending on new/used status of the car, set aside around 3-5K for a down payment. That gives you a decent rate, without too much haggling trouble. Should I get an apartment for a couple years before looking for my own house? Not unless you want the flexibility of an apartment. In general, living at home is cheaper. If you intend to eventually buy property in the same area, an apartment is throwing money away. If you want to move every few years, an apartment can, depending on the lease, give you that. How much should I set aside for either investment (apartment vs house)? 10-20K for a down payment, if you live around Louisville, KY. Be very choosy about the price of your house and this gives you the best of everything. The biggest mistake you can make is trying to get into a place too \"\"early\"\". Banks pay attention to the down payment for a good reason. It indicates commitment, care, and an ability to go the distance. In general, a mortgage is 30 years. You won't pay it off for a long time, so plan for that. Is there anything else I should be doing/taking advantage of with my money during this \"\"living at home\"\" period before I finally leave the nest? If there is something you want, now's the time to get it. You can make snap purchases on furniture/motorcycles/games and not hurt yourself. Take vacations, since there is room in the budget. If you've thought about moving to a different state for work, travel there for a weekend/week and see if you even like the place. Look for deals on things you'll need when you move out. Utensils, towels, brooms, furniture, and so forth can be bought cheaply, and you can get quality, but it takes time to find these deals. Pick up activities with monthly expenses. Boxing, dancing, gym memberships, hackerspaces and so forth become much more difficult to fit into the budget later. They also give you a better credit rating for a recurring expense, and allow you to get a \"\"feel\"\" for how things like a monthly utility bill will work. Finally, get involved in various investments. A 401k is only the start, so look at penny stocks, indexed funds, ETFs or other things to diversify with. Check out local businesses, or start something on the side. Experiment, and have fun.\"",
"title": ""
},
{
"docid": "60d54be3b63010282dc4e0772eaea452",
"text": "I would ignore the bank completely when they use gross income. Decide, based upon your current living situation, what your MAX limit on a monthly payment is. Then from that determine the size and cost of the house you can buy. My husband and I decided on a $2000 monthly payment max, but also agreed $1500 was more reasonable. When using those numbers in the calculators it is way less than when using gross income. When we used our gross pay the calculators all said we could afford double what we were looking for. Since they don't know what our take home pay is (after all the deductions including 401k, healthcare, etc), the estimates on gross income are way higher than what we can comfortably afford. Set a budget based on your current living situation and what you want your future to look like. Do you want to scrimp and coupon clip or would you rather live comfortably in a smaller home? Do the online calculators based on take home pay and on gross pay to get a sense of the range you could be looking at.",
"title": ""
},
{
"docid": "749960a13c58456820dd69d8e93bd7c4",
"text": "\"Whether or not you choose to buy is a complicated question. I will answer as \"\"what you should consider/think about\"\" as I don't think \"\"What should I do\"\" is on topic. First off, renting tends to look expensive compared to mortgages until you factor in the other costs that are included in your rent. Property taxes. These are a few grand a year even in the worst areas, and tend to be more. Find out what the taxes are ahead of time. Even though you can often deduct them (and your interest), you're giving up your standard deduction to do so - and with the low interest regime currently, unless your taxes are high you may not end up being better off deducting them. Home insurance. This depends on home and area, but is at least hundreds of dollars per year, and could easily run a thousand. So another hundred a month on your bill (and it's more than renter's insurance by quite a lot). Upkeep costs for the property. You've got a lot of up-front costs (buy a lawnmower, etc. types of things) plus a lot of ongoing costs (general repair, plumbing breaks, electrical breaks, whatnot). Sales commission, as Scott notes in comments. When you sell, you're paying about 6% commission; so you won't be above water, if housing prices stay flat, until you've paid off 6% of your loan value (plus closing costs, another couple of percent). You hit the 90% point on a 15 year about year 2, but on a 30 year you don't hit it until about year 5, so you might not be above water when you want to sell. Risk of decrease in value. Whenever you buy property, you take on the risk of losing value as well as the potential of gaining value. Don't assume that because prices are going up they will continue to; remember that a lot of investors are well aware of possible profits from rising prices and will be buying (and driving prices up) themselves. 2008 was a shock to a lot of people, even in areas where it seemed like prices should've still gone up; you never know what's going to happen. If you buy a house for 20% or so down, you have a bit of a safety net (if it drops 10-20% in value, you're still above water, though you do of course lose money), while if you buy it for 0% down and it drops 20% in value, you won't be able to sell (at all) for years. All that together means you should really take a hard look at the costs and benefits, make a realistic calculation including all actual costs, and then make a decision. I would not buy simply because it seems like a good idea to not pay rent. If you're unable to make any down payment, then you're also unable to deal with the risks in home ownership - not just decrease in value, but when your pipe bursts and ruins your basement, or when the roof needs a replacement because a tree falls on it. Yes, home insurance helps, but not always, and the deductible will still get you. Just to have some numbers: For my area, we pay about $8000 a year in property taxes on a $280k house ($200k mortgage), $1k a year in home insurance, so our escrow payment is about $750 a month. A 15 year for $200k is about $1400 a month, so $2200 or so total cost. We do live in a high property tax area, so someone in lower tax regimes would pay less - say 1800-1900 - but not that cheap. A 30 year would save you 500 or so a month, but you're still not all that much lower than rent.\"",
"title": ""
},
{
"docid": "2c4bc25e5ecf9f7dd4e2a49e2fe716ba",
"text": "\"To add to what other have stated, I recently just decided to purchase a home over renting some more, and I'll throw in some of my thoughts about my decision to buy. I closed a couple of weeks ago. Note that I live in Texas, and that I'm not knowledgeable in real estate other than what I learned from my experiences in the area when I am located. It depends on the market and location. You have to compare what renting will get you for the money vs what buying will get you. For me, buying seemed like a better deal overall when just comparing monthly payments. This is including insurance and taxes. You will need to stay at a house that you buy for at least 5-7 years. You first couple years of payments will go almost entirely towards interest. It takes a while to build up equity. If you can pay more towards a mortgage, do it. You need to have money in the bank already to close. The minimum down payment (at least in my area) is 3.5% for an FHA loan. If you put 20% down, you don't need to pay mortgage insurance, which is essentially throwing money away. You will also have add in closing costs. I ended up purchasing a new construction. My monthly payment went up from $1200 to $1600 (after taxes, insurance, etc.), but the house is bigger, newer, more energy efficient, much closer to my work, in a more expensive area, and in a market that is expected to go up in value. I had all of my closing costs (except for the deposit) taken care of by the lender and builder, so all of my closing costs I paid out of pocket went to the deposit (equity, or the \"\"bank\"\"). If I decide to move and need to sell, then I will get a lot (losing some to selling costs and interest) of the money I have put in to the house back out of it when I do sell, and I have the option to put that money towards another house. To sum it all up, I'm not paying a difference in monthly costs because I bought a house. I had my closing costs taking care of and just had to pay the deposit, which goes to equity. I will have to do maintenance myself, but I don't mind fixing what I can fix, and I have a builder's warranties on most things in the house. To really get a good idea of whether you should rent or buy, you need to talk to a Realtor and compare actual costs. It will be more expensive in the short term, but should save you money in the long term.\"",
"title": ""
},
{
"docid": "a5711d12602cfcbaf9d52c641416cb4d",
"text": "\"Fundamentals: Then remember that you want to put 20% or more down in cash, to avoid PMI, and recalculate with thatmajor chunk taken out of your savings. Many banks offer calculators on their websites that can help you run these numbers and figure out how much house a given mortgage can pay for. Remember that the old advice that you should buy the largest house you can afford, or the newer advice about \"\"starter homes\"\", are both questionable in the current market. =========================== Added: If you're willing to settle for a rule-of-thumb first-approximation ballpark estimate: Maximum mortgage payment: Rule of 28. Your monthly mortgage payment should not exceed 28 percent of your gross monthly income (your income before taxes are taken out). Maximum housing cost: Rule of 32. Your total housing payments (including the mortgage, homeowner’s insurance, and private mortgage insurance [PMI], association fees, and property taxes) should not exceed 32 percent of your gross monthly income. Maximum Total Debt Service: Rule of 40. Your total debt payments, including your housing payment, your auto loan or student loan payments, and minimum credit card payments should not exceed 40 percent of your gross monthly income. As I said, many banks offer web-based tools that will run these numbers for you. These are rules that the lending industy uses for a quick initial screen of an application. They do not guarantee that you in particular can afford that large a loan, just that it isn't so bad that they won't even look at it. Note that this is all in terms of mortgage paymennts, which means it's also affected by what interest rate you can get, how long a mortgage you're willing to take, and how much you can afford to pull out of your savings. Also, as noted, if you can't put 20% down from savings the bank will hit you for PMI. Standard reminder: Unless you explect to live in the same place for five years or more, buying a house is questionable financially. There is nothing wrong with renting; depending on local housing stock it may be cheaper. Houses come with ongoung costs and hassles rental -- even renting a house -- doesn't. Buy a house only when it makes sense both financially and in terms of what you actually need to make your life pleasant. Do not buy a house only because you think it's an investment; real estate can be a profitable business, but thinking of a house as simultaneously both your home and an investment is a good way to get yourself into trouble.\"",
"title": ""
},
{
"docid": "7319e7d344e18f21491dba0ebe7e93f6",
"text": "All of RonJohn's reasons to say no are extremely valid. There are also two more. First, the cost of a mortgage is not the only cost of owning a house. You have to pay taxes, utilities, repairs, maintenence, insurance. Those are almost always hundreds of dollars a month, and an unlucky break like a leaking roof can land you with a bill for many thousands of dollars. Second owning a house is a long term thing. If you find you have to sell in a year or two, the cost of making the sale can be many thousands of dollars, and wipe out all the 'savings' you made from owning rather than renting. I would suggest a different approach, although it depends very much on your circumstances and doesn't apply to everybody. If there is someone you know who has money to spare and is concerned for your welfare (your mention of a family that doesn't want you to work for 'academic reason' leads me to believe that might be the case) see if they are prepared to buy a house and rent it to you. I've known families do that when their children became students. This isn't necessarily charity. If rents are high compared to house prices, owning a house and renting it out can be very profitable, and half the battle with renting a house is finding a tenant who will pay rent and not damage the house. Presumably you would qualify. You could also find fellow-students who you know to share the rent cost.",
"title": ""
},
{
"docid": "cba49732a004bf70fd9e04cad1a15c98",
"text": "You'll have much more flexibility and peace of mind if your expenses are based on your current income and that income increases in the future. It's great that you aren't comfortable with spending more, you don't want to end up in the position you just removed yourself from. That said, you don't just ignore planned income altogether. Personally, my wife and I feel best knowing that I have the essentials covered with my income, and that her income primarily helps us put away more for retirement, home renovations, and vacations, because she likely won't work for a long while if we have kids. How you plan depends on your wife's career aspirations and prospects, if your wife has high income potential and you don't plan to buy until after she resumes work, then it may suit you to plan on her income too. You'll have to balance the certainty and amount of her income with your goals. If you're trying to make up ground on savings/retirement, then a less expensive house seems wise anyway. It's a much easier problem to decide what to do with excess funds than feeling trapped/stressed by a high mortgage payment.",
"title": ""
},
{
"docid": "33b302d80d4aec200d913ed4957c9d97",
"text": "If your debt will all be less than 25% gross (yes, I see you said take home) you are in great shape. I'd get the car and not worry. The well written mortgage is 20% down, with a housing payment (which of course includes prop tax and insurance, as noted by mhoran, below) under 28% and total debt under 36%. You are well within the limits, not even close. That's great.",
"title": ""
},
{
"docid": "5de97a1bc0bbdec7f2e311fbfba9d0bd",
"text": "\"Be careful that pride is not getting in the way of making a good decision. As it stands now what difference does it make to have 200K worth of debt and a 200K house or 225K of debt and a 250K house? Sure you would have a 25K higher net worth, but is that really important? Some may even argue that such an increase is not real as equity in primary residence might not be a good indication of wealth. While there is nothing wrong with sitting down with a banker, most are likely to see your scheme as dubious. Home improvements rarely have a 100% ROI and almost never have a 200% ROI, I'd say you'd be pretty lucky to get a 65% ROI. That is not to say they will deny you. The banks are in the business of lending money, and have the goal of taking as much of your hard earned paycheck as possible. They are always looking to \"\"sheer the sheep\"\". Why not take a more systematic approach to improving your home? Save up and pay cash as these don't seem to cause significant discomfort. With that size budget and some elbow grease you can probably get these all done in three years. So in three years you'll have about 192K in debt and a home worth 250K or more.\"",
"title": ""
},
{
"docid": "db30f9ff88078772375651cf85355306",
"text": "House as investment is not a good idea. Besides the obvious calculations don't forget the property tax, home maintenance costs and time, insurance costs, etc. There are a lot of hidden drains on the investment value of the house; most especially the time that you have to invest in maintaining it. On the other hand, if you plan on staying in the area, having children, pets or like do home improvements, landscaping, gardening, auto repair, wood/metal shopping then a house might be useful to you. Also consider the housing market where you are. This gets a bit more difficult to calculate but if you have a high-demand rental market then the house might make sense as an investment if you can rent it out for more than your monthly cost (including all of those factors above). But being a landlord is not for everyone. Again more of your time invested into the house, you have to be prepared to go months without renting it, you may have to deal with crazy people that will totally trash your house and threaten you if you complain, and you may need to part with some of the rent to a management company if you need their skills or time. It sounds like you are just not that interested right now. That's fine. Don't rush. Invest your money some other way (i.e.: the stock market). More than likely when you are ready for a house, or to bail your family out of trouble (if that's what you choose to do), you'll have even more assets to do either with.",
"title": ""
},
{
"docid": "5d14017cf9bb7bba44f247ba96217ce9",
"text": "The technical term of a recession is 2 successive quarters of negative GDP growth. As is the natural cycle, the curve will invert at some point in the future; maybe it's tomorrow or 5 years from now - but nobody knows for certain. One also shouldn't take any single indicator as the end all be all of indicators. For example, there are other spreads that indicate the health of credit in the global economy such as the TED spread and the LIBOR-OIS spread. If you take a peek at the TED spread (http://www.macrotrends.net/1447/ted-spread-historical-chart), it tells a much different story. The TED spread measures the health of the global banking system by tracking the rate at which banks lend to each other. A lower TED rate equals more trust and perceived creditworthiness of the borrower, which would be another bank. Lastly, you really can't rely on a single article or single indicator to come to the conclusion that the sky is falling. Even if we are on the precipice of a recession here in the US, nobody can tell predetermine the impact and depth of the recession. In my opinion, we are nearing the top of the credit cycle and should be expecting a bit of a cooling off in the near term 1-3 years. Outside of that, your guess is as good as mine.",
"title": ""
}
] |
fiqa
|
c9e0adf713c4d78b44c8e7d3a67a220f
|
What is a subsidy?
|
[
{
"docid": "b6156d8d24394a79802c07edf1d6a1e2",
"text": "Subsidy usually means gratuitous financial support. For example, if for whatever reason you live much below the living average paying utility services in full might be too expensive - you'll be out of money before you even think of buying food and basic clothes. Yet it's clear that once can't live in a city without utility services. So the government might have a program for subsidizing utility services for people with very low income - a person brings in proof of low income and once it is low enough government will step in and pay that person utility services in full or in part depending on actual income he proves. The same can be organized for anything government or some organization wishes to support for whatever reason. The key idea is someone gives you free money for spending on some specific purpose.",
"title": ""
},
{
"docid": "705b8bb17f02ce2119fe61d0704c5bf9",
"text": "subsidy - financial support. For example subsidized housing - when the government pays a part of your rent (usually for low income families). or subsidized student loan - when somebody else is paying interest on the money you borrowed while you are in school.",
"title": ""
},
{
"docid": "e67096d3a6a605ce4f1b98783b15ba06",
"text": "It means a government giving out money to encourage a particular product (or service) to be bought or sold. Some people will use the word more loosely to refer to any financial incentive, even if it's not coming from the government. Wikipedia has a list of examples that may be helpful: http://en.wikipedia.org/wiki/Subsidy A commonly-mentioned one is farm subsidies, where farmers are paid to produce certain crops.",
"title": ""
},
{
"docid": "a386d52e8820cd77a4acb592f43dbff4",
"text": "A subsidy is a payment made by a group (usually the state) to individuals or corporations in order to shift the balance if the rational economic decision for the individual would be detrimental to the group as a whole otherwise. For example, if there are different quality kinds of crops that can be planted, for example a GM maize that brings in high yields but can only be processed to High Fructose Corn Syrup or a naturally bred corn that brings lower yields but tastes well enough for direct consumption, then if demand for both exceeds supply, the economic choice for the individual farmer is to plant the former. If the claims that HFCS contribute to obesity are founded, then it is in the public interest to produce less of it, and more alternative foods. Given that a market rather than a planned economy is desired, this cannot be achieved by decree, but rather money is used as an incentive. In the long term, this investment may very well pay off through reduced health care costs, so it is a rational economic decision from the state's point of view. In a world where all actors make decisions that are fully in their self interest, in principle subsidies would not be needed as consumers would demand healthy rather than cheap foods, and market mechanisms would provide these.",
"title": ""
}
] |
[
{
"docid": "fb053d3e39dfbf1774ccd53577678890",
"text": "That's a completely false statement. You really should read something for yourself instead of parroting misinformation. Per the US Energy Information Administration's 2015 report, more than 50% of all subsidy money ($15 billion of just less than $30 billion) is for renewables while producing less than 15% of energy with solar accounting for a whopping 0.005% (rounded up). https://www.eia.gov/analysis/requests/subsidy/pdf/subsidy.pdf By contrast, liquid petroleum and coal received only ~$3.4 billion in subsidies produced 66% (rounded down) of energy. The moral of the story is: just because you want something to be true really badly doesn't mean it is.",
"title": ""
},
{
"docid": "b347516b80a7e2ce42a82256cc525709",
"text": "A Loan is an loan that gives some kind of benefit as an assurance to a loaning organization. So when you put in an application for a credit, you likewise advocate that in case that you can not pay, you've some form of benefit that will cover the default sum.",
"title": ""
},
{
"docid": "bfcb63dcc9f97588f55a8ede45e22a8a",
"text": "Well you would have to take into account 2 things. 1 the taxes and regulations that fossil fuel industries face relative to renewables. 2. subsidies as a percent of fossil fuel industry compared to subsidies as a percent of green energy companies. My hunch is that both of these points show that overall, the fossil fuel industry isn't benefiting from the government and renewable companies are benefiting",
"title": ""
},
{
"docid": "627d7f807f3b08ed69498324074acf85",
"text": "> It's still free money from US to build a system for THEM so they can sell the power back to us at a profit. Sure, because otherwise they can't make a profit and thus wouldn't build the system. That's the point in subsidises.",
"title": ""
},
{
"docid": "64c3f2132171b5273ef7d6135437d46b",
"text": "Investment in public infrastructure is different than subsidy to private companies. Comparison to the interstate system here is irrelevant. The state of Wisconsin is giving a company $230k per worker per year in tax breaks for jobs that will pay the workers $53k per year. There is no tax rate that can earn that investment back for the state. In fact, that state income tax rate on these salaries is 6.27%. Even considering all of the additional jobs that will be created for construction and as an effect of having a large employer in the area, this investment will never pay for itself in terms of taxes generated.",
"title": ""
},
{
"docid": "13ab33ce88815758683978479ee0009f",
"text": "\"Companies often provide cafeteria, or catering services, to employees tax-free at subsidized rates. I'll use \"\"cafeteria\"\" as an illustration. The IRS says that in order to avoid lunch being taxed as income, the employees must pay the \"\"direct costs\"\" of the lunch, food and labor. In addition to those costs, cafeterias add two more items to come up with the total tab; \"\"overhead,\"\" (the cost of renting the space), and of course, profit. The company can waive the last two, and charge employees only materials and labor. That's why subsidized cafeteria food can cost as little as half of what it would cost elsewhere.\"",
"title": ""
},
{
"docid": "6f8deb6271cb0f019346d6c648e11cd1",
"text": "I think increasing funding to public colleges are an -okay- thing to do. Certainly it is better than the current system which guarantees student loans to benefit the bankers. So, we're talking about two different kinds of subsidies: one directly for schools and one for bankers. While ideally, I'd like to see no government involvement whatsoever, I can compromise as long as bankers are bearing the full risk of their student loans. The student loan system is what is bubbling up tuition prices, very similar to what happened in housing.",
"title": ""
},
{
"docid": "fc7a6f35a0191b74ae0b4020a2121cee",
"text": "What subsidies are you talking about? From wikipedia: >>'The USPS has not directly received taxpayer-dollars since the early 1980s with the minor exception of subsidies for costs associated with the disabled and overseas voters' More like small businesses are grateful there is a service they don't have to pay excessive administrative taxes to use and are sad the greed in the US is going to wreck yet another piece. The value of privatization is such a horrible scam.",
"title": ""
},
{
"docid": "50bb518a10ebf19ab021cf0290cfa804",
"text": ">>The US remains wedded to its allegedly free market leanings despite revelations that JP Morgan, among others, receives $14 BILLION a year in government subsidies. I don't think you'd get much more argument from American taxpayers (big or small) that subsidies if/when they are justified should come with requirements to make sure the public interest is truly being served. What is less clear is that holding stock in businesses that the government has decided to subsidize means the government should control the pay of the parent company's execs. Disclaimer: I identify conservative with libertarian leanings and do not (to the best of my knowledge) own stock in any bank or bank-like entity",
"title": ""
},
{
"docid": "9d9e049493c96bcb0872c1bd9d8fdef8",
"text": "\"Similar, but actually quite different. A negative income tax on the first $20,000/year has a couple of problems this scheme doesn't: 1) Administration costs and legal complexity. Are we \"\"prebating\"\" or \"\"rebating\"\" the stipend? How is someone supposed to get along if they lose their job unexpectedly in a rebate-based system, can they get their income-tax withholdings back up to $20,000/year? How does the government register changes in income to know when to write someone a check? 2) With a negative tax up to a certain *fixed* level, there's effectively a changing level of subsidy depending how much of the per-capita income is the break-even tax level. If the per-capita income is $45,000/year (our current GDP per capita), then the subsidy level is almost 50%, and if it goes up to $60,000/year (our current mean household income), the subsidy level is then 33%. The system I described and steepk (IIRC) invented fixes the subsidy percentage in relation to the mean reported income (effectively fixing a *relative class level* as minimum) rather than a particular monetary amount (whose relative buying power versus inflation or other incomes can fluctuate wildly). We pick a subsidy level, say 1/3 (33.33333%). We then impose a flat income tax of that level plus a little bit more for administration costs (say, 35%). At the end of the year, everyone is taxed at that flat level, and the government scrapes its administration costs off the top and now has a big pot with 1/3 of everyone's income in it. This is divided into one portion for each taxpayer, and those portions into monthly or biweekly pieces. These pieces are sent out regularly as checks to the taxpayer, and *these checks are not taxed as income*. That last bit is what makes this so nice: it turns the tax progressive, in fact more progressive than our current system. After taxes and *after stipend*, only the rich will pay an *effective* tax rate asymptotically close to the real 35%. Most people without incomes many, many times the size of their stipends will be looking at an effective tax rate of less than 15%, including the tax-paying middle class and the professional upper-middle class who currently bitch so much about our tax rates being so confiscatory (which they *are*, for the abysmal level of social services we receive). Now, to get back to the big benefits of fixing the subsidy percentage. This means that the subsidy grows with mean income, effectively functioning as easy to run, fair, and direct wealth redistribution without the difficulty of trying to create efficient, productive WPA-style jobs or imposing market-distorting subsidies. It also means that we can allow things like automation to improve the productivity of our economy because *everyone* gets a share: if automating a certain job is truly more efficient than having a worker do it, the capitalist's income-gain from automation will push up the mean income, and therefore the basic income, further than the worker's lesser income and the capitalist's lesser profit would have.\"",
"title": ""
},
{
"docid": "b95d0ed144da13e2d4872f034f7d0151",
"text": "well, but to the best of my understanding we *do* subsidize the Koch Bros extremely heavily. my sense of things is that Soros is not popular with the powers that be, and left out of the subsidies, but please enlighten me if i am wrong. i am interested and curious. also cynical but thats another post. hah",
"title": ""
},
{
"docid": "7474c47838a44b167ea5ed7e98c7c088",
"text": "Yes, your assumptions are correct. The industry realizes that the equilibrium price of product A is $10. The government decides to increase the amount of people who can access product A. They do this by subsidizing $5 of the $10 dollar cost. However the industry reacts by increasing the cost of product A by the amount of the subsidy (so product A is now priced at $15), because the industry knows people already can afford paying $10. This is not exclusive to medicine, it is also happening with higher education. Here is a paper that examines the effect of government subsidization of college tuition. The study finds that as financial aid increased, there was a 102% correlation with the increase in the cost of tuition. http://www.nber.org/chapters/c13711.pdf",
"title": ""
},
{
"docid": "ba5851f5170c2bfd280aca1fcfd84f22",
"text": "A service provider that prevents competition by making it illegal to compete. Every other insurance program allows you to opt out. And i wouldnt consider it protection when they stick there dick into everyone elses business. Every gang or mafia claims to protect those it shakes down. Edit.. Just because you wear a brown shirt doesnt make you a righteous person.",
"title": ""
},
{
"docid": "c37656edd7d3463cbc010c541ef917f7",
"text": "Clearly the semantics of the discussion are of greater importance to you. Hospitals are not directly subsidized by the government. Medicare originated with two parts: Part A: Medicare Hospital Insurance (HI) which covers hospital / hospice costs and Part B: Supplementary Medical Insurance (SMI) which covers outpatient costs. Part C was added later by Clinton, which set up a system of selection of health insurance through private companies, and those private companies are then subsidized by the federal government.",
"title": ""
},
{
"docid": "54c2bdbd4b4d608641614b279fe26cdf",
"text": "Not really. There are rules against subsidizing markets that inflict injury on like industries among WTO nations. Bombardier is violating that rule by getting subsidies for commercial airliners. Boeing gets government loans for Department Of Defense contracts, but not for commercial jets. Canada has a bad habit of side stepping NAFTA and WTO guidelines and they're upset someone is finally calling them on it. If Canada wants to subsidize markets that fellow WTO nations do not participate in, fine. They have that opportunity. Bombardier was not that.",
"title": ""
}
] |
fiqa
|
5d5c914fd4fc72cc90d492cf63847f6d
|
Who sets the prices on government bonds?
|
[
{
"docid": "08279327cb374f26ca370c33cba6526b",
"text": "\"Who sets the prices? Effectively the market does, like basically all openly traded things. The Greek government could well have said \"\"5% is as high as we will go\"\". As a result, investors may not have chosen to buy the securities. The global bond market is highly liquid, and investors who have a choice could well then choose to go elsewhere. The reasons could well be varied, but primary among them would be that investors view Greek investments as more than 5% risky. If I can get 5% from a country that I deem less risky than from Greece, my choice is clear. Therefore to be compensated for loaning them my money, I am expecting a return of 7% because there is the possibility that they will default. As for not selling them at all, if they could avoid issuing bonds, most governments would. They may not have had much of a choice. If they just print more money, that does other potentially bad things to the economy. The government needs funds to operate, if they are not collecting enough in taxes, for example, and do not want to print money as I mentioned, then bonds are one other common way to raise cash. Notwithstanding that in your example you are referring to the interest rate, not the price, the principal is the same.\"",
"title": ""
}
] |
[
{
"docid": "e03ffaa92d15930d884ee78fd0f02558",
"text": "Those are the expected yields; they are not guaranteed. This was actually the bread and butter of Graham Newman, mispriced bonds. Graham's writings in the Buffett recommended edition of Securities Analysis are invaluable to bond valuation. The highest yielder now is a private subsidiary of Société Générale. A lack of financial statements availability and the fact that this is the US derivatives markets subsidiary are probably the cause of the higher rates. The cost is about a million USD to buy them. The rest will be similar cases, but Graham's approach could find a diamond; however, bonds are big ticket items, so one should expect to pay many hundreds of thousands of USD per trade.",
"title": ""
},
{
"docid": "d37196a48b37a2316c05a349ab0af9cf",
"text": "\"So how does one of these get set up exactly? If a private company wants to backstop their ability to repay bond obligations with public funds, doesn't an agreement like that have to go through something like a city council meeting before it's approved? If it does, and that happened in these cases, then the municipalities made a bad decision on an \"\"investment\"\" that included some level of risk, just like any other investment they make. If it doesn't work out, it shouldn't be a surprise who's on the hook for the payment.\"",
"title": ""
},
{
"docid": "44d10cf8dea72d350a41c0b3a9d9bb61",
"text": "\"It may seem weird but interest rates are set by a market. Risk is a very large component of the price that a saver will accept to deposit their money in a bank but not the only one. Essentially you are \"\"lending\"\" deposited cash to the bank that you put it in and they will lend it out at a certain risk to themselves and a certain risk to you. By diversifying who they lend to (corporations, home-buyers each other etc.) the banks mitigate a lot of the risk but lending to the bank is still a risky endeavour for the \"\"saver\"\" and the saver accepts a given interest rate for the amount of risk there is in having the money in that particular bank. The bank is also unable to diversify away all possible risk, but tries to do the best job it can. If a bank is seen to take bigger risks and therefore be in greater risk of failing (having a run on deposits) it must have a requisitely higher interest rates on deposits compared to a lower risk bank. \"\"Savers\"\" therefore \"\"shop around\"\" for the best interest rate for a given level of risk which sets the viable interest rate for that bank; any higher and the bank would not make a profit on the money that it lends out and so would not be viable as a business, any lower and savers would not deposit their money as the risk would be too high for the reward. Hence competition (or lack of it) will set the rate as a trade off between risk and return. Note that governments are also customers of the banking industry when they are issuing fixed income securities (bonds) and a good deal of the lending done by any bank is to various governments so the price that they borrow money at is a key determinant of what interest rate the bank can afford to give and are part of the competitive banking industry whether they want to be or not. Since governments in most (westernised) countries provide insurance for deposits the basic level of (perceived) risk for all of the banks in any given country is about the same. That these banks lend to each other on an incredibly regular basis (look into the overnight or repo money market if you want to see exactly how much, the rates that these banks pay to and receive from each other are governed by interbank lending rates called Libor and Euribor and are even more complicated than this answer) simply compounds this effect because it makes all of the banks reliant on each other and therefore they help each other to stay liquid (to some extent). Note that I haven't mentioned currency at all so far but this market in every country applies over a number of currencies. The way that this occurs is due to arbitrage; if I can put foreign money into a bank in a country at a rate that is higher than the rate in its native country after exchange costs and exchange rate risk I will convert all of my money to that currency and take the higher interest rate. For an ordinary individual's savings that is not really possible but remember that the large multinational banks can do exactly the same thing with billions of dollars of deposits and effectively get free money. This means that either the bank's interest rate will fall to a risk adjusted level or the exchange rate will move. Either of those moves will remove the potential for making money for nothing. In this case, therefore it is both the exchange rate risk (and costs) as well as the loan market in that country that set the interest rate in foreign currencies. Demand for loans in the foreign currency is not a major mover for the same reason. Companies importing from foreign entities need cash in foreign currencies to pay their bills and so will borrow money in other currencies to fulfil these operations which could come from deposits in the foreign currency if they were available at a lower interest rate than a loan in local currency plus the costs of exchange but the banks will be unwilling to loan to them for less than the highest return that they can get so will push up interest rates to their risk level in the same way that they did in the market before currencies were taken into account. Freedom of movement of foreign currencies, however, does move interest rates in foreign currencies as the banks want to be able to lend as much of currencies that are not freely deliverable as they can so will pay a premium for these currencies. Other political moves such as the government wanting to borrow large amounts of foreign currency etc. will also move the interest rate given for foreign currencies not just because loaning to the government is less risky but also because they sometimes pay a premium (in interest) for being able to borrow foreign currency which may balance this out. Speculation that a country may change its base interest rate will move short term rates, and can move long term rates if it is seen to be a part of a country's economic strategy. The theory behind this is deep and involved but the tl;dr answer would be the standard \"\"invisible hand\"\" response when anything market or arbitrage related is involved. references: I work in credit risk and got a colleague who is also a credit risk consultant and economist to look over it. Arbitrage theory and the repo markets are both fascinating so worth reading about!\"",
"title": ""
},
{
"docid": "ebe6ac0b79f9cec2027e75b7e1e713e5",
"text": "You’ve really got three or four questions going here… and it’s clear that a gap in understanding one component of how bonds work (pricing) is having a ripple effect across the other facets of your question. The reality is that everybody’s answers so far touch on various pieces of your general question, but maybe I can help by integrating. So, let’s start by nailing down what your actual questions are: 1. Why do mortgage rates (tend to) increase when the published treasury bond rate increases? I’m going to come back to this, because it requires a lot of building blocks. 2. What’s the math behind a bond yield increasing (price falling?) This gets complicated, fast. Especially when you start talking about selling the bond in the middle of its time period. Many people that trade in bonds use financial calculators, Excel, or pre-calculated tables to simplify or even just approximate the value of a bond. But here’s a simple example that shows the math. Let’s say we’ve got a bond that is issued by… Dell for $10,000. The company will pay it back in 5 years, and it is offering an 8% rate. Interest payments will only be paid annually. Remember that the amount Dell has promised to pay in interest is fixed for the life of the bond, and is called the ‘coupon’ rate. We can think about the way the payouts will be paid in the following table: As I’m sure you know, the value of a bond (its yield) comes from two sources: the interest payments, and the return of the principal. But, if you as an investor paid $14,000 for this bond, you would usually be wrong. You need to ‘discount’ those amounts to take into account the ‘time value of money’. This is why when you are dealing in bonds it is important to know the ‘coupon rate’ (what is Dell paying each period?). But it is also important to know your sellers’/buyers’ own personal discount rates. This will vary from person to person and institution to institution, but it is what actually sets the PRICE you would buy this bond for. There are three general cases for the discount rate (or the MARKET rate). First, where the market rate == the coupon rate. This is known as “par” in bond parlance. Second, where the market rate < the coupon rate. This is known as “premium” in bond parlance. Third, where the market rate > coupon rate. This is known as a ‘discount’ bond. But before we get into those in too much depth, how does discounting work? The idea behind discounting is that you need to account for the idea that a dollar today is not worth the same as a dollar tomorrow. (It’s usually worth ‘more’ tomorrow.) You discount a lump sum, like the return of the principal, differently than you do a series of equal cash flows, like the stream of $800 interest payments. The formula for discounting a lump sum is: Present Value=Future Value* (1/(1+interest rate))^((# of periods)) The formula for discounting a stream of equal payments is: Present Value=(Single Payment)* (〖1-(1+i)〗^((-n))/i) (i = interest rate and n = number of periods) **cite investopedia So let’s look at how this would look in pricing the pretend Dell bond as a par bond. First, we discount the return of the $10,000 principal as (10,000 * (1 / 1.08)^5). That equals $6,807.82. Next we discount the 5 equal payments of $800 as (800* (3.9902)). I just plugged and chugged but you can do that yourself. That equals $3,192.18. You may get slightly different numbers with rounding. So you add the two together, and it says that you would be willing to pay ($6,807.82 + $3,192.18) = $10,000. Surprise! When the bond is a par bond you’re basically being compensated for the time value of money with the interest payments. You purchase the bond at the ‘face value’, which is the principal that will be returned at the end. If you worked through the math for a 6% discount rate on an 8% coupon bond, you would see that it’s “premium”, because you would pay more than the principal that is returned to obtain the bond [10,842.87 vs 10,000]. Similarly, if you work through the math for a 10% discount rate on an 8% coupon bond, it’s a ‘discount’ bond because you will pay less than the principal that is returned for the bond [9,241.84 vs 10,000]. It’s easy to see how an investor could hold our imaginary Dell bond for one year, collect the first interest payment, and then sell the bond on to another investor. The mechanics of the calculations are the same, except that one less interest payment is available, and the principal will be returned one year sooner… so N=4 in both formulae. Still with me? Now that we’re on the same page about how a bond is priced, we can talk about “Yield To Maturity”, which is at the heart of your main question. Bond “yields” like the ones you can access on CNBC or Yahoo!Finance or wherever you may be looking are actually taking the reverse approach to this. In these cases the prices are ‘fixed’ in that the sellers have listed the bonds for sale, and specified the price. Since the coupon values are fixed already by whatever organization issued the bond, the rate of return can be imputed from those values. To do that, you just do a bit of algebra and swap “present value” and “future value” in our two equations. Let’s say that Dell has gone private, had an awesome year, and figured out how to make robot unicorns that do wonderful things for all mankind. You decide that now would be a great time to sell your bond after holding it for one year… and collecting that $800 interest payment. You think you’d like to sell it for $10,500. (Since the principal return is fixed (+10,000); the number of periods is fixed (4); and the interest payments are fixed ($800); but you’ve changed the price... something else has to adjust and that is the discount rate.) It’s kind of tricky to actually use those equations to solve for this by hand… you end up with two equations… one unknown, and set them equal. So, the easiest way to solve for this rate is actually in Excel, using the function =RATE(NPER, PMT, PV, FV). NPER = 4, PMT = 800, PV=-10500, and FV=10000. Hint to make sure that you catch the minus sign in front of the present value… buyer pays now for the positive return of 10,000 in the future. That shows 6.54% as the effective discount rate (or rate of return) for the investor. That is the same thing as the yield to maturity. It specifies the return that a bond investor would see if he or she purchased the bond today and held it to maturity. 3. What factors (in terms of supply and demand) drive changes in the bond market? I hope it’s clear now how the tradeoff works between yields going UP when prices go DOWN, and vice versa. It happens because the COUPON rate, the number of periods, and the return of principal for a bond are fixed. So when someone sells a bond in the middle of its term, the only things that can change are the price and corresponding yield/discount rate. Other commenters… including you… have touched on some of the reasons why the prices go up and down. Generally speaking, it’s because of the basics of supply and demand… higher level of bonds for sale to be purchased by same level of demand will mean prices go down. But it’s not ‘just because interest rates are going up and down’. It has a lot more to do with the expectations for 1) risk, 2) return and 3) future inflation. Sometimes it is action by the Fed, as Joe Taxpayer has pointed out. If they sell a lot of bonds, then the basics of higher supply for a set level of demand imply that the prices should go down. Prices going down on a bond imply that yields will go up. (I really hope that’s clear by now). This is a common monetary lever that the government uses to ‘remove money’ from the system, in that they receive payments from an investor up front when the investor buys the bond from the Fed, and then the Fed gradually return that cash back into the system over time. Sometimes it is due to uncertainty about the future. If investors at large believe that inflation is coming, then bonds become a less attractive investment, as the dollars received for future payments will be less valuable. This could lead to a sell-off in the bond markets, because investors want to cash out their bonds and transfer that capital to something that will preserve their value under inflation. Here again an increase in supply of bonds for sale will lead to decreased prices and higher yields. At the end of the day it is really hard to predict exactly which direction bond markets will be moving, and more importantly WHY. If you figure it out, move to New York or Chicago or London and work as a trader in the bond markets. You’ll make a killing, and if you’d like I will be glad to drive your cars for you. 4. How does the availability of money supply for banks drive changes in other lending rates? When any investment organization forms, it builds its portfolio to try to deliver a set return at the lowest risk possible. As a corollary to that, it tries to deliver the maximum return possible for a given level of risk. When we’re talking about a bank, DumbCoder’s answer is dead on. Banks have various options to choose from, and a 10-year T-bond is broadly seen as one of the least risky investments. Thus, it is a benchmark for other investments. 5. So… now, why do mortgage rates tend to increase when the published treasury bond yield rate increases? The traditional, residential 30-year mortgage is VERY similar to a bond investment. There is a long-term investment horizon, with fixed cash payments over the term of the note. But the principal is returned incrementally during the life of the loan. So, since mortgages are ‘more risky’ than the 10-year treasury bond, they will carry a certain premium that is tied to how much more risky an individual is as a borrower than the US government. And here it is… no one actually directly changes the interest rate on 10-year treasuries. Not even the Fed. The Fed sets a price constraint that it will sell bonds at during its periodic auctions. Buyers bid for those, and the resulting prices imply the yield rate. If the yield rate for current 10-year bonds increases, then banks take it as a sign that everyone in the investment community sees some sign of increased risk in the future. This might be from inflation. This might be from uncertain economic performance. But whatever it is, they operate with some rule of thumb that their 30-year mortgage rate for excellent credit borrowers will be the 10-year plus 1.5% or something. And they publish their rates.",
"title": ""
},
{
"docid": "4f27a728efa05f14ce56512f50cc4767",
"text": "The generic representative of interest rates is the 10 year treasury bond rate. (USA). As an approximation most other interest rates do tend to move up and down with the treasury rate, but with more or less sensitivity. Another prominently discussed interest rate is the short term loan rate established by the Federal Reserve for loans it makes to banks.",
"title": ""
},
{
"docid": "13ad0143a8523b975c7b299bed7ecf3c",
"text": "\"The rate of the bond is fixed. But there is a risk known as \"\"interest rate risk\"\". Basically, if you have a 2 percent bond and market rates are 4 percent, you'll have to offer your bond at a discount or nobody would buy it. So if you ever needed to sell it, you'd lose a bit of money.\"",
"title": ""
},
{
"docid": "aab39fc5fd7ac4fe676e73fe70b167da",
"text": "These are yields for the government bonds. EuroZone interest rates are much lower (10 times lower, in fact) than the UK (GBP zone) interest rates. The rates are set by the central banks.",
"title": ""
},
{
"docid": "3eb06ff7ab226eddd36864af44dba95c",
"text": "\"They could have printed 5.0T or 10.0T or 1000 quadrillion. It doesnt make any difference for the steps a Central Bank takes. They choose a figure based on balancing inflation vs interest rates. The legal powers Central Banks or IMF have do vary (i.e. to perform quantitative easing, purchasing company bonds, purchasing retail bank bonds) but they all follow that principle. Their tools are very limited and theyre legally obligated to seek certain targets like \"\"inflation between 0 to 2%\"\"\"",
"title": ""
},
{
"docid": "b0d570729d6309ccf9878653379d3654",
"text": "The literal answer to your question 'what determines the price of an ETF' is 'the market'; it is whatever price a buyer is willing to pay and a seller is willing to accept. But if the market price of an ETF share deviates significantly from its NAV, the per-share market value of the securities in its portfolio, then an Authorized Participant can make an arbitrage profit by a transaction (creation or redemption) that pushes the market price toward NAV. Thus as long as the markets are operating and the APs don't vanish in a puff of smoke we can expect price will track NAV. That reduces your question to: why does NAV = market value of the holdings underlying a bond ETF share decrease when the market interest rate rises? Let's consider an example. I'll use US Treasuries because they have very active markets, are treated as risk-free (although that can be debated), and excluding special cases like TIPS and strips are almost perfectly fungible. And I use round numbers for convenience. Let's assume the current market interest rate is 2% and 'Spindoctor 10-year Treasury Fund' opens for business with $100m invested (via APs) in 10-year T-notes with 2% coupon at par and 1m shares issued that are worth $100 each. Now assume the interest rate goes up to 3% (this is an example NOT A PREDICTION); no one wants to pay par for a 2% bond when they can get 3% elsewhere, so its value goes down to about 0.9 of par (not exactly due to the way the arithmetic works but close enough) and Spindoctor shares similarly slide to $90. At this price an investor gets slightly over 2% (coupon*face/basis) plus approximately 1% amortized capital gain (slightly less due to time value) per year so it's competitive with a 3% coupon at par. As you say new bonds are available that pay 3%. But our fund doesn't hold them; we hold old bonds with a face value of $100m but a market value of only $90m. If we sell those bonds now and buy 3% bonds to (try to) replace them, we only get $90m par value of 3% bonds, so now our fund is paying a competitive 3% but NAV is still only $90. At the other extreme, say we hold the 2% bonds to maturity, paying out only 2% interest but letting our NAV increase as the remaining term (duration) and thus discount of the bonds decreases -- assuming the market interest rate doesn't change again, which for 10 years is probably unrealistic (ignoring 2009-2016!). At the end of 10 years the 2% bonds are redeemed at par and our NAV is back to $100 -- but from the investor's point of view they've forgone $10 in interest they could have received from an alternative investment over those 10 years, which is effectively an additional investment, so the original share price of $90 was correct.",
"title": ""
},
{
"docid": "94f4b3bad0673cfc2d66983ab898f89d",
"text": "What you said is technically correct. But the implication OP might get from that statement is wrong. If the Fed buys bonds and nominal yields go down (Sometimes they might even go up if it meant the market expected the Fed's actions to cause more inflation), inflation expectations don't go down unless real yields as measured by TIPs stay still.",
"title": ""
},
{
"docid": "9883bc47d8fd12d8301ff1079d0e0bdc",
"text": "\"I think a lot of this goes to the short-sightedness of the government that was in place at the time of the first default. They caused it, and their attempt at cleaning things up just kicked the can down the road. If they would have added in a \"\"class action\"\" clause that most bonds now have, what they settled with a majority would apply to all bond-holders. What they did was the opposite: added in a clause in which the low-water mark was set by the deal that was least favourable for them. It was probably a misguided attempt at assuaging the markets with the consequences we now see...\"",
"title": ""
},
{
"docid": "2aa481ffa2d33951bfdbbab1ebf2c7cb",
"text": "Not really. You can have two bonds that have identical duration but vastly different convexity. Pensions and insurance portfolio managers are most common buyers as they're trying to deal with liability matching and high convexity allows them to create a barbell around their projected liabilities.",
"title": ""
},
{
"docid": "15e8bee2da522fc40bf064208134acbd",
"text": "yield on a Treasury bond increases This primarily happens when the government increases interest rates or there is too much money floating around and the government wants to suck out money from the economy, this is the first step not the other way around. The most recent case was Fed buying up bonds and hence releasing money in to the economy so companies and people start investing to push the economy on the growth path. Banks normally base their interest rates on the Treasury bonds, which they use as a reference rate because of the probability of 0 default. As mortgage is a long term investment, so they follow the long duration bonds issued by the Fed. They than put a premium on the money lent out for taking that extra risk. So when the governments are trying to suck out money, there is a dearth of free flowing money and hence you pay more premium to borrow because supply is less demand is more, demand will eventually decrease but not in the short run. Why do banks increase the rates they loan money at when people sell bonds? Not people per se, but primarily the central bank in a country i.e. Fed in US.",
"title": ""
},
{
"docid": "c8be50d70cfd1d6fccfbdcd413d166f0",
"text": "\"The Bank of Canada does not \"\"set\"\" the interest rates. They auction government debt, and then report what the average yield/interest rate was (rounded to 25 basis points). [The average yield of yesterday's auction of 3-month Treasury bills was 0.76%](http://www.bankofcanada.ca/rates/interest-rates/t-bill-yields/). I don't know why the news tries to interpret what the BOC \"\"is trying to say\"\". BOC isn't saying anything - just reporting what happened, with some filler words.\"",
"title": ""
},
{
"docid": "bb1cf8423107a911bd071f131354e0dc",
"text": "If you are looking for money to speculate in the capital markets, then your brokers will already lend to you at a MUCH more favorable rate than an outside party will. For instance, with $4,000 you could EASILY control $40,000 with many brokers, at a 1% interest rate. This is 10:1 leverage, much like how US banks operate... every dollar that you deposit with them, they speculate with 10x as much. Interactive Brokers will do this for you with your current credit score. They are very reputable and clear through Goldman Sachs, so although reputable is subjective in the investment banking world, you won't have to worry the federal government raiding them or anything. If you are investing in currencies than you can easily do 50:1 leverage as an American, or 100:1 as anyone else. This means with only $400 dollars you can control $40,000 account. If you are investing in the futures market, then there are many many ways to double and triple and quadruple your leverage at the lowest interests rates. Any contract you enter into is a loan from the market. You have to understand, that if you did happen to have $40,000 of your own money, then you could get $4,000,000 account size for speculating, at 1% interest. Again, these are QUICK ways to lose your money and owe a lot more! So I'd really advise against it. A margin call in the futures market can destroy you. I advise you to just think more efficiently until you come up with a way to earn that much money initially, and then speculate.",
"title": ""
}
] |
fiqa
|
cc23cc1f385b1c59ee881e94a6620e2f
|
What is the best credit card for someone with no credit history
|
[
{
"docid": "db39d960adc97bf1d05e0c089f4b5395",
"text": "If you've never had a credit card before a likely reason can be due to lack of credit history. You can apply for a department store card. Nordstroms, Macy's, Target will often grant a small line of credit even with no history. Target would be my first attempt as they have a wide selection of every day items, improving your usage on the card. If you've been denied due to too many applications, then you need to wait 18-24 months for the hard pulls to drop off your credit report before you apply again.",
"title": ""
},
{
"docid": "761f768d6cdb089c8bda6e11a9c686d1",
"text": "\"You have what is called in the biz a \"\"thin file\"\". Check with a Credit Union. They will get you a secured card or maybe a straight credit card. They usually will graduate you from a secured card to a real credit card in 12-18 months. Then you are on your way. You should also sign up for Creditkarma to get your credit report updated every week. They make their money on referring people to credit card companies so you might be able to kill two birds with one stone.\"",
"title": ""
},
{
"docid": "a2bca858601b7bc24a317dbaf20d6a38",
"text": "\"You have a lack of credit history. Lending is still tight since the recession and companies aren't as willing to take a gamble on people with no history. The secured credit card is the most direct route to building credit right now. I don't think you're going to be applicable for a department store card (pointless anyways and encourages wasteful spending) nor the gas card. Gas cards are credit cards, funded through a bank just like any ordinary credit card, only you are limited to gas purchases at a particular retailer. Although gas cards, department store cards and other limited usage types of credit cards have less requirements, in this post-financial crisis economy, credit is still stringent and a \"\"no history\"\" file is too risky for banks to take on. Having multiple hard inquiries won't help either. You do have a full-time job that pays well so the $500 deposit shouldn't be a problem for the secured credit card. After 6 months you'll get it back anyways. Just remember to pay off in full every month. After 6 months you'll be upgraded to a regular credit card and you will have established credit history.\"",
"title": ""
},
{
"docid": "3c558511abfc24150bb63b00c9f7161a",
"text": "Capital One's normal master card is known to approve people with limited or bad credit history. If not that look into a secured credit card. You put down a deposit of $200 or more and you get that much in credit, sometimes more.",
"title": ""
},
{
"docid": "0659a4bed498947c7ee0553fab7d390c",
"text": "Consider getting yourself a gas card. Use it for a year. Make your payments on time. Then reapply for a credit card.",
"title": ""
}
] |
[
{
"docid": "87d965cd8c97f1faa8784ca29206e209",
"text": "Because even if you won the lottery, without at least some credit history you will have trouble renting cars and hotel rooms. I learned about the importance, and limitations of credit history when, in the 90's, I switched from using credit cards to doing everything with a debit card and checks purely for convenience. Eventually, my unused credit cards were not renewed. At that point in my life I had saved a lot and had high liquidity. I even bought new autos every 5 years with cash. Then, last decade, I found it increasingly hard to rent cars and sometimes even a hotel rooms with a debit card even though I would say they could precharge whatever they thought necessary to cover any expenses I might run. I started investigating why and found out that hotels and car rentals saw having a credit card as a proxy for low risk that you would damage the car or hotel room and not pay. So then I researched credit cards, credit reports, and how they worked. They have nothing about any savings, investments, or bank accounts you have. I had no idea this was the case. And, since I hadn't had cards or bought anything on credit in over 10 years there were no records in my credit files. Old, closed accounts had fallen off after 10 years. So, I opened a couple of secured credit cards with the highest security deposit allowed. They unsecured after a year or so. Then, I added several rewards cards. I use them instead of a debit card and always pay in full and they provide some cash back so I save money compared to just using a debit card. After 4 years my credit score has gone to 800+ even though I have never carried any debt and use the cards as if they were debit cards. I was very foolish to have stopped using credit cards 20 years ago but just had no idea of the importance of an established credit history. And note that establishing a great credit history does not require that you borrow money or take out loans for anything. just get credit cards and pay them in full each month.",
"title": ""
},
{
"docid": "6d1f5c390d2fc95f58a1fcc9cdf0566a",
"text": "For those who are looking to improve credit for the sake of being able to obtain future credit on better terms, I think a rewards credit card is the best way to do that. I recommend that you only use as many cards as you need to gain the best rewards. I have one card that gives 6% back on grocery purchases, and I have another card that gives 4% back on [petrol] and 2% back on dining out. Both of those cards give only 1% back on all other purchases, so I use a third card that gives 1.5% back across the board for my other purchases. I pay all of the cards in full each month. If there was a card that didn't give me an advantage in making my purchases, I wouldn't own it. I'm generally frugal, so I know that there is no psychological disadvantage to paying with a card. You have to consider your own spending discipline when deciding whether paying with cards is an advantage for you. In the end, you should only use debt when you can pay low interest rates (or as in the case of the cards above, no interest at all). In the case of the low interest debt, it should be allowing you to make an investment that will pay you more by having it sooner than the cost of interest. You might need a car to get to work, but you probably don't need a new car. Borrow as little as you can and repay your loans as quickly as you can. Debt can be a tool for your advantage, but only if used wisely. Don't be lured in by the temptation of something new and shiny now that you can pay for later.",
"title": ""
},
{
"docid": "13205a84955e1cc9da6c599458da163d",
"text": "Department store cards will appear on your credit report and is often much easier to get approved for. All my friends that have applied for a Macy's card have always been approved. If you are new to the country, department store cards are a great way to build history. Target and Nordstroms are two other department stores to look at. Target is my first suggestion since they carry every day items and will be easy to consistently put charges on the card to build credit history.",
"title": ""
},
{
"docid": "c1f1bd2ee9a6d2caf9bfec545571ff8c",
"text": "I came to US as an international student several years ago, and I have also experienced the same situation like most of the international students in finding ways to build credit history. Below I list out some possible approaches you may want to consider: I. Get a student job at campus (recommended) I think the best way is to get a student job in university, say a teaching assistant or student helper. In this case, you can be provided with a social security number and start to build your own credit history. II. Get credit card You can also consider to apply for a credit card. There are indeed some financial institutions that can provide credit cards for international students with no or limited credit scores requirement, say Discover and Bank of America. However, it is relatively hard to get approved, simply because hey may put more restriction in other aspects. For example, you may be required to keep sufficient bank balance above several thousand dollars during a period of time, or you should prove that you have relatives with citizenship in US who can provide your financial aid if needed. III. Apply for a loan (recommended) Getting a loan product is another alternative to get out of this difficult situation, but most of people don’t realize that. There are some FinTech start-ups in United States that specifically focus on international students’ loan financing. One representative example is Westbon (Westbon ), an online lending company that specializes in providing car loan for international students with no SSN or credit history. I once used their loan product to finance a Honda Accord, and Westbon reported my loan transaction records to US credit bureau during my repayment process. Later when I officially got my SSN number, I found my credit history has been automatically synchronized and I don’t have to start from all over again. It never be an easy journey for international students to build credit history in United States. What approach you should make really depends on you own situation. I hope the information above can be useful and good luck for your credit journey!",
"title": ""
},
{
"docid": "f0f27d3d497769d2b2fda5a0d8869bff",
"text": "If you have no credit history but you have a job, buying an inexpensive used car should still be doable with only a marginally higher interest rate on the car. This can be offset with a cosigner, but it probably isn't that big of a deal if you purchase a car that you can pay off in under a year. The cost of insurance for a car is affected by your credit score in many locations, so regardless you should also consider selling your other car rather than maintaining and insuring it while it's not your primary mode of transportation. The main thing to consider is that the terms of the credit will not be advantageous, so you should pay the full balance on any credit cards each month to not incur high interest expenses. A credit card through a credit union is advantageous because you can often negotiate a lower rate after you've established the credit with them for a while (instead of closing the card and opening a new credit card account with a lower rate--this impacts your credit score negatively because the average age of open accounts is a significant part of the score. This advice is about the same except that it will take longer for negative marks like missed payments to be removed from your report, so expect 7 years to fully recover from the bad credit. Again, minimizing how long you have money borrowed for will be the biggest benefit. A note about cosigners: we discourage people from cosigning on other people's loans. It can turn out badly and hurt a relationship. If someone takes that risk and cosigns for you, make every payment on time and show them you appreciate what they have done for you.",
"title": ""
},
{
"docid": "2dd5be2dd8fe231b5ca85513873d09ec",
"text": "I would like to post a followup after almost a quarter. littleadv's advice was very good, and in retrospect exactly what I should have done to begin with. Qualifying for a secured credit card is no issue for people with blank credit history, or perhaps for anyone without any negative entries in their credit history. Perhaps, cash secured loans are only useful for those who really have so bad a credit history that they do not qualify for any other secured credit, but I am not sure. Right now, I have four cash secured credit cards and planning to maintain a 20% utilization ratio across all of them. Perhaps I should update this answer in 1.5 years!",
"title": ""
},
{
"docid": "4eaf0ece65e124c8ee239f8b0f7821d9",
"text": "I've seen credit cards that provide you your credit score for free, updated once a month and even charted over the last year. Unfortunately the bank I used to have this card with was bought and the purchasing bank discontinued the feature. Perhaps someone out there knows of some cards that still offer a feature like this?",
"title": ""
},
{
"docid": "63248a355bcd65af62550a6567c3f754",
"text": "My first thought is get a Capital One Secured Card. Use it for small things and pay it all off when you get paid. It will build your credit and after six months of solid use your credit limit can go up and you can be eligible for a better non-secured card (not that you need to get one). It's great for starting or rebuilding credit.",
"title": ""
},
{
"docid": "49136c4aa863e265570541bc1bcd0c3a",
"text": "K, welcome to Money.SE. You knew enough to add good tags to the question. Now, you should search on the dozens of questions with those tags to understand (in less than an hour) far more than that banker knows about credit and credit scores. My advice is first, never miss a payment. Ever. The advice your father passed on to you is nonsense, plain and simple. I'm just a few chapters shy of being able to write a book about the incorrect advice I'd heard bank people give their customers. The second bit of advice is that you don't need to pay interest to have credit cards show good payment history. i.e. if you choose to use credit cards, use them for the convenience, cash/rebates, tracking, and guarantees they can offer. Pay in full each bill. Last - use a free service, first, AnnualCreditReport.com to get a copy of your credit report, and then a service like Credit Karma for a simulated FICO score and advice on how to improve it. As member @Agop has commented, Discover (not just for cardholders) offers a look at your actual score, as do a number of other credit cards for members. (By the way, I wouldn't be inclined to discuss this with dad. Most people take offense that you'd believe strangers more than them. Most of the answers here are well documented with links to IRS, etc, and if not, quickly peer-reviewed. When I make a mistake, a top-rated member will correct me within a day, if not just minutes)",
"title": ""
},
{
"docid": "5c6e66187675209e5b49f55a3dded01b",
"text": "A bank or credit card agency can deny your application for pretty much any reason. That said, it's extremely unlikely they'd do so for a secured credit card. This is because the credit is secured. If your sister is to get a card with, say, a $1000 limit, she will have to provide $1000 in security. This means the banks risk practically nothing. That said, I have found one reference that claims you need a score of above 600 to qualify for a secured credit card, though this is hard to believe. Secured credit cards are a reasonable way of building your credit back up. Just about the only other way for her credit rating to improve is for her history of bad debt to fall off the credit report, but that's going to take quite some time. She should be working hard to provide positive credit history to replace the old negative history, assuming her credit rating is important to her. It may not be; it's only important if she plans on taking on debt in the future. Honestly, a credit rating of around 500 is so bad that I wouldn't even worry much about lowering it. It's already low enough as to make it all but impossible to qualify for (unsecured) credit or loans. A single denial is unlikely to significantly affect the score, except in the very short term. With two bankruptcies, I encourage credit counselling for your sister. There are a number of good books available, too. Credit counselling should go into detail on credit scores, unsecured credit, proper budgeting, and all that sort of useful information.",
"title": ""
},
{
"docid": "f3075b259cb4f23c55ecb99c138aff09",
"text": "Yes, it is a very good idea to start your credit history early. It sounds like you have a good understanding of the appropriate use of credit, as a substitute for cash rather than a supplement to income. As long as you keep your expenses under control and pay off your card each month, I see no problems with the idea. Try to find a card with no annual fees, a low interest rate if possible (which will be difficult at your age), and with some form of rewards such as cash back. Look for a reputable issuing bank, and keep the account open even after you get a new card down the road. Your credit score is positively correlated with having an account open for a long time, having a good credit usage to credit limit ratio, and having accounts in good standing and paid on time.",
"title": ""
},
{
"docid": "3dfae77394018b4ded73741d3303cda0",
"text": "\"Or here's a better idea: don't have a credit card at all. They offer no real benefits and plenty of dangers. Don't take my word for it, though: \"\"I tell every student class I get, high school students, university students, you know, they'd be better off if they never used credit cards\"\" - Warren Buffet (Net worth: $44 billion) Before anyone says anything about using credit cards \"\"wisely\"\" and getting the rewards points, I can save 15% on many kinds of large purchases ($100+) using cash. You won't find a reward system offering that level of incentive. Two recent examples of cash discounts: After I bought my house I needed a lawnmower and a my wife wanted a new vacuum cleaner. Went to Lowe's and found the ones we wanted. They were $600 combined. Found the manager, stuck five $100 bills in his hand and said \"\"this is what I have, and that is what I need.\"\" 16.6% saved. Bought my daugher a bed recently. Queen box spring and mattress were on sale for $300 but it didn't come with the rails, which they wanted $50 extra for. Went to the bank and got $320 in cash from the bank, walked in, set it in his hand and said, \"\"I need the bed box spring and rails, tax included.\"\" He replied, \"\"Sorry man, I can't. I'm already taking a loss on...\"\" Then he stopped mid sentence, looked down at the cash again and said \"\"Hold on. Let me ask my manager.\"\" Manager walks over, guy explains what I said, manager looks at the cash and says \"\"Make it happen\"\" 14.3 % saved. As for purchasing a home, it is a myth that you need a credit score to obtain a mortgage for a home. Lending institutions can do manual underwriting instead of just relying on your credit score. It is a little tougher to do and banks usually have stricter requirements, but based on the information the OP has given in this and other questions, I think he can easily meet them.\"",
"title": ""
},
{
"docid": "240af245a23939104871e35102887363",
"text": "Update: Here is a Google Docs spreadsheet that is actively maintained and editable. It contains a list of EMV credit cards. With a few exceptions (UN, existing BMO Diners Club cardholders, employees of the state of North Carolina), it still looks like the Travelex card is the best option for most people. Original answer: The premise of the question may now be outdated. I have found internet articles claiming 4 US banks will now issue Chip and PIN cards. Specifically: The Chase link is for their British Airways card, which multiple sources say is really Chip and Signature (leaving it there so no one else suggests it). The Citi link is to specific chip and PIN information. I could not find specific information for the other two. I have a question into my bank (US Bank) and will update when they get back to me. In looking into this, some of the chip and PIN links I followed ended up being chip and signature, so as always, be careful.",
"title": ""
},
{
"docid": "15c15857ff5c581f243a3b1e99ffd3f1",
"text": "If you have no credit score it is generally far easier and more affordable to establish credit the cheapest way possible, which is usually in the form of a small credit card (student card if you are a student, low credit line unsecured, or even secured if you need). Your local bank/credit union will usually be keen to offer you something to start out, but you can also apply online to some of the major credit card vendors. As always, look out for annual fees, etc. In general, trying to get a larger loan to establish credit will cost you a lot as you will not qualify for any legitimate 0% or ultra-low APR car loans - those are reserved for people with established and generally pretty good credit. I expect you'll find a car loan that will have a lower APR than you could get investing your money otherwise - especially if you do not have established excellent credit - to simply be a phantom (you won't find it), and even if you could it is more risky than it is worth. Furthermore, if establishing credit is important to you (such as for buying a house down the road), you can build an excellent credit score without ever having a car loan. So you don't have to buy a car on borrowed money just to hope to get approved for a house some day - it's just not a requirement. Finally, I urge you to make a decision on the best car for you in your situation, ignoring the credit score - especially if you are more than 3-5+ years away from buying a house. Everything else about buying a car is more important - the actual cost of the car, year, mileage, suitability for your needs, gas mileage, maintenance and insurance costs, etc. Then, at the very end of your decision making process, ensure that buying the car would not put you dangerously low on savings by squeezing your emergency fund. Decide if you really need a loan or as expensive of a car, considering the costs over the expected life of you owning the car (or at least the next 2-5 years). Never get trapped into just thinking about monthly payments, which hide the true cost of loans and buying beyond what you can afford to purchase today.",
"title": ""
},
{
"docid": "19bde1702c8c2197120ccd74d527b835",
"text": "While you're asking about a particular bank, I'll give my opinion of this in general. I think a $12,000 household income is pretty low to be given credit. The risk to the bank is certainly higher than if the income were at that $35,000 level. They can use this to differentiate what they offer for perks, and if they ever collateralize the debt of these cards, it's a clearly defined demographic.",
"title": ""
}
] |
fiqa
|
f03ed9d9a2a4a10aa901779aa0acb493
|
Relation between interest rates and currency for a nation
|
[
{
"docid": "9073fe66e32efa5077a99658e8e018e5",
"text": "What you are asking about is called Interest Rate Parity. Or for a longer explanation the article Interest Rate Parity at Wikipedia. If the US has a rate of say zero, and the rate in Elbonia is 10%, one believes that in a year the exchange rate will be shifted by 10%, i.e. it will take 1.1 unit of their currency to get the dollars one unit did prior. Else, you'd always profit from such FOREX trades. (Disclaimer - I am not claiming this to be true or false, just offering one theory that explains the rate difference effect on future exchange rates.",
"title": ""
},
{
"docid": "c49716a0538758168f596a785f54f5f0",
"text": "From Indian context, there are a number of factors that are influencing the economic condition and the exchange rate, interest rate etc. are reflection of the situation. I shall try and answer the question through the above Indian example. India is running a budget deficit of 4 odd % for last 6-7 years, which means that gov.in is spending more than their revenue collection, this money is not in the system, so the govt. has to print the money, either the direct 4% or the interest it has to pay on the money it borrows to cover the 4% (don't confuse this with US printing post 2008). After printing, the supply of INR is more compared to USD in the market (INR is current A/C convertible), value of INR w.r.t. USD falls (in simplistic terms). There is another impact of this printing, it increases the money supply in domestic market leading to inflation and overall price rise. To contain this price rise, Reserve Bank of India (RBI) increases the interest rates and increases Compulsory Reserve Ratio (CRR), thus trying to pull/lock-up money, so that overall money supply decreases, but there is a limit to which RBI can do this as overall growth rate keeps falling as money is more expensive to borrow to invest. The above (in simplistic term) how this is working. However, there are many factors in economy and the above should be treated as it is intended to, a simplistic view only.",
"title": ""
}
] |
[
{
"docid": "483a44043abcf489a5cbc05a12eb5d2d",
"text": "I've always understood inflation to be linked to individual currencies, although my only research into the subject was an intro economics course in undergrad and I don't recall seeing why that would be the case. I guess the basic principle is that currency traders are watching the printing presses and trading in exchange markets to the point that the exchange rates fall in relation to increases in money supply. There's probably something about the carry trade in there as well, but it's late and I took some medications, so someone else will have to carry that torch. I must admit I've not really paid attention to foreign currencies like HKD, but the proximity and political relationship with China probably greatly complicates your question, since part of the problem has been China's currency peg.",
"title": ""
},
{
"docid": "c4d799f952082cf6768813a8df4b3127",
"text": "The Swiss franc has appreciated quite a bit recently against the Euro as the European Central Bank (ECB) continues to print money to buy government bonds issues by Greek, Portugal, Spain and now Italy. Some euro holders have flocked to the Swiss franc in an effort to preserve the savings from the massive Euro money printing. This has increased the value of the Swiss franc. In response, the Swiss National Bank (SNB) has tried to intervene multiple times in the currency market to keep the value of the Swiss franc low. It does this by printing Swiss francs and using the newly printed francs to buy Euros. The SNB interventions have failed to suppress the Swiss franc and its value has continued to rise. The SNB has finally said they will print whatever it takes to maintain a desired peg to the Euro. This had the desired effect of driving down the value of the franc. Which effect will this have long term for the euro zone? It is now clear that all major central bankers are in a currency devaluation war in which they are all trying to outprint each other. The SNB was the last central bank to join the printing party. I think this will lead to major inflation in all currencies as we have not seen the end of money printing. Will this worsen the European financial crisis or is this not an important factor? I'm not sure this will have much affect on the ongoing European crisis since most of the European government debt is in euros. Should this announcement trigger any actions from common European people concerning their wealth? If a European is concerned with preserving their wealth I would think they would begin to start diverting some of their savings into a harder currency. Europeans have experienced rapidly depreciating currencies more than people on any other continent. I would think they would be the most experienced at preserving wealth from central bank shenanigans.",
"title": ""
},
{
"docid": "f223389ac294be1c02dff830429e81dd",
"text": "First question: Any, probably all, of the above. Second question: The risk is that the currency will become worth less, or even worthless. Most will resort to the printing press (inflation) which will tank the currency's purchasing power. A different currency will have the same problem, but possibly less so than yours. Real estate is a good deal. So are eggs, if you were to ask a Weimar Germany farmer. People will always need food and shelter.",
"title": ""
},
{
"docid": "3f97d35bd94c664205c2929914af3cc9",
"text": "Stocks, gold, commodities, and physical real estate will not be affected by currency changes, regardless of whether those changes are fast or slow. All bonds except those that are indexed to inflation will be demolished by sudden, unexpected devaluation. Notice: The above is true if devaluation is the only thing going on but this will not be the case. Unfortunately, if the currency devalued rapidly it would be because something else is happening in the economy or government. How these asset values are affected by that other thing would depend on what the other thing is. In other words, you must tell us what you think will cause devaluation, then we can guess how it might affect stock, real estate, and commodity prices.",
"title": ""
},
{
"docid": "8e8c1ebfbc151286159ad3e8e46305bc",
"text": "The Hong Kong Dollar is based on the US dollar. The Hong Kong central bank recognizes the US dollar as its reserve currency. That is, the Hong Kong central bank keeps US dollars as its main reserve. Not long ago the reserve currency of choice would have been gold. Central banks of each country would need to have enough gold to back up any currency they issued. Now central banks use the US dollar instead. This is what is meant when people mention the US dollar being the reserve currency for most countries. From wiki regarding the HK dollar: A bank can issue a Hong Kong dollar only if it has the equivalent exchange in US dollars on deposit. So you're assumption is correct: as the US Federal Reserve prints more money and that money finds its way to Hong Kong banks, the Hong Kong banks will be able to issue more Hong Kong dollars which will have an inflationary affect. What to do? If you look around enough on this site you'll find some suggestions. Here is one.",
"title": ""
},
{
"docid": "3440392865922705522359d6a305d0c9",
"text": "I concur with the answers above - the difference is about the risk. But in this particular case I find the interest level implausible. 11% interest on deposits in USD seems very speculative and unsustainable. You can't guarantee such return on investment unless you engage in drug trade or some other illegal activity. Or it is a Ponzi scheme. So I would suspect that the bank is having liquidity problems. Which bank is it, by the way? We had a similar case in Bulgaria with one bank offering abnormal interest on deposits in EUR and USD. It went bust - the small depositors were rescued by the local version of FDIC but the large ones were destroyed.",
"title": ""
},
{
"docid": "58eafc943a14f3c08e58f381165b935c",
"text": "Your hypothetical money market account parallel basically nails it. You understand exactly how the math works. IRR computes a rate at which your money market account would have to pay interest in order to match whatever investment you are comparing to. That said, there are two major complicating factors to consider: Your hypothetical account would have to not only pay interest, but also lend money, at exactly the IRR rate. In reality of course, it never happens this way. You may be able to lend (invest) at x, but to borrow you're going to have to pay y. IRR simplifies away that issue in order to give us a single number. That number can be very handy for comparison to other competing hypothetical investments, but it does not capture that fundamental issue of lending rate vs. borrowing rate. An IRR calculation assumes implicitly that all cash flows, outgoing and incoming, are known and fixed; that is, risk-free. It makes no allowance whatever for risk, and all investments have some level of risk. Two investments that compute to the same IRR might have hugely different risk around their cashflows, and so not be a close decision at all. To compare those investments, you might go to a measure like RAROC-- risk-adjusted return on capital. But that's much harder, and more subjective, because it requires some numerical measurement of risk.",
"title": ""
},
{
"docid": "d67d3a9f9940d33d75c8fbfa7f854d74",
"text": "The general idea is that if the statement wasn't true there would be an arbitrage opportunity. You'll probably want to do the math yourself to believe me. But theoretically you could borrow money in country A at their real interest rate, exchange it, then invest the money in the other country at Country B's interest rate. Generating a profit without any risk. There are a lot of assumptions that go along with the statement (like borrowing and lending have the same costs, but I'm sure that is assumed wherever you read that statement.)",
"title": ""
},
{
"docid": "e5416a1c34543f185d3e43efc655ef62",
"text": "As Sean pointed out they usually mean LIBOR or the FFR (or for other countries the equivalent risk free rate of interest). I will just like to add on to what everyone has said here and will like to explain how various interest rates you mentioned work out when the risk free rate moves: For brevity, let's denote the risk free rate by Rf, the savings account interest rate as Rs, a mortgage interest rate as Rmort, and a term deposit rate with the bank as Rterm. Savings account interest rate: When a central bank revises the overnight lending rate (or the prime rate, repo rate etc.), in some countries banks are not obliged to increase the savings account interest rate. Usually a downward revision will force them to lower it (because they net they will be paying out = Rf - Rs). On the other hand, if Rf goes up and if one of the banks increases the Rs then other banks may be forced to do so too under competitive pressure. In some countries the central bank has the authority to revise Rs without revising the overnight lending rate. Term deposits with the bank (or certificates of deposit): Usually movements in these rates are more in sync with Rf than Rs is. The chief difference is that savings account offer more liquidity than term deposits and hence banks can offer lower rates and still get deposits under them --consider the higher interest rate offered by the term deposit as a liquidity risk premium. Generally, interest rates paid by instruments of similar risk profile that offer similar liquidity will move in parallel (otherwise there can be arbitrage). Sometimes these rates can move to anticipate a future change in Rf. Mortgage loan rates or other interests that you pay to the bank: If the risk free rate goes up, banks will increase these rates to keep the net interest they earn over risk free (= Δr = Rmort - Rf) the same. If Rf drops and if banks are not obliged to decrease loan rates then they will only do so if one of the banks does it first. P.S:- Wherever I have said they will do so when one of the banks does it first, I am not referring to a recursion but merely to the competitive market theory. Under such a theory, the first one to cut down the profit margin usually has a strong business incentive to do so (e.g., gain market share, or eliminate competition by lowering profit margins etc.). Others are forced to follow the trend.",
"title": ""
},
{
"docid": "bff253c2835df67c70228c10c88ea019",
"text": "\"It is important to distinguish between cause and effect as well as the supply (saving) versus demand (borrowing) side of money to understand the relationship between interest rates, bond yields, and inflation. What is mean by \"\"interest rates\"\" is usually based on the officially published rates determined by the central bank and is referenced to the overnight lending rate for meeting reserve requirements. In practice, what the means is, (for example) in the United States the Federal Reserve will have periodic meetings to determine whether to leave this rate alone or to raise or lower the rate. The new rate is generally determined by their assessment of current and forecast national and global economic conditions and factors in the votes of the various Regional Federal Reserve Presidents. If the Fed anticipates economic weakness they will tend to lower and keep rates lower, while when the economy seems to be overheated the tendency will be to raise rates. Bond yields are also based on the expectation of future economic conditions, but as determined by market participants. At times the market will actually \"\"lead\"\" the Fed in bidding bond prices up or down, while at other times it will react after the Fed does. However, ignoring the varying time lag the two generally will track each other because they are really the same thing. The only difference is the participants which are collectively determining what the rates/yields are. The inverse relationship between interest rates and inflation is the main reason for fluctuating rates in the first place. The Fed will tend to raise rates to try to slow inflation, and lower rates when it feels inflation is too low and economic growth should be stimulated. Likewise, when the economy is doing poorly there is both little inflationary pressure (driving interest rates down both in terms of what savers can accept to keep ahead of inflation and at) and depressed levels of borrowing (reduced demand for money, driving down rates to try to balance supply and demand), and the opposite is true when the economy is booming. Bond yields are thus positively correlated to inflation because during periods of high inflation savers won't want to invest in bonds that don't provide them with an acceptable inflation adjusted yield. But high interest rates tend to have the effect or reining in inflation because it gets more costly for borrowers and thus puts a damper on new economic activity. So to summarize,\"",
"title": ""
},
{
"docid": "1df8591be32d4babf6b7a50426ebacda",
"text": "Yes - it's called the rate of inflation. The rate of return over the rate of inflation is called the real rate of return. So if a currency experiences a 2% rate of inflation, and your investment makes a 3% rate of return, your real rate of return is only 1%. One problem is that inflation is always backwards-looking, while investment returns are always forward-looking. There are ways to calculate an expected rate of inflation from foreign exchange futures and other market instruments, though. That said, when comparing investments, typically all investments are in the same currency, so the effect of inflation is the same, and inflation makes no difference in a comparative analysis. When comparing investments in different currencies, then the rate of inflation may become important.",
"title": ""
},
{
"docid": "7cff897020391a620928a2dc45c9594c",
"text": "Thanks. It has taken me some time to understand how all this works, and there are still many gray areas I want to understand further. The Fed interest rate is the rate charged by banks to loan to each other to balance overnight reserves but only using the reserves they hold at the Fed. That adds no new money to the system, but increases the money multiplier a little since perhaps more loans can be made. Basically one bank with excess reserves can loan to another bank that needs reserves. The Fed injects no money here, only sets the rate for banks to do this with each other. When the Fed buys securities that effectively adds that many more dollars into circulation, which then gets hit by the money multiplier, adding a lot of new liquidity. I think historically the latter tracks increases in the money supply much better than the former. I think the St. Louis Fed has records online for all this dating back to the 1940's or so.",
"title": ""
},
{
"docid": "cdf12a9cc260c7dc4e165c7bd53e1716",
"text": "This is very insightful, I think. As an open question, consider what *downside* a nation (or bank) has to acknowledging bitcoin or other cryptocurrencies. Obviously nations may lose some monetary control by endorsing bitcoin, but I don't know if there's much of a downside for banks considering bitcoin's easy conversion in to USD. If anything, I feel like most of the problems for banks surrounding cryptos would be regulatory.",
"title": ""
},
{
"docid": "6d8e93ad767c500b3ef79d69ebc32df0",
"text": "Basically, they all do. The relationship is much more dynamic with stocks but corporate financing costs increase, return requirements increase (risk free rate goes up). Same with real estate. Commodity demand is correlated with economic activity, which is correlated with interest rates, although not perfectly. The most important factor is, a higher risk free rate increases the discount rate, which reduces asset values",
"title": ""
},
{
"docid": "ac4977a4961a36d663225f022a72b039",
"text": "Not to be a jerk, since I'm learning about options myself, but I think you have a few things wrong about your tesla put postion. First, assuming it was itm or atm within a week of strike it would maybe be worth $12-15, I glanced at the 11/10 put strikes ~325 trades for $12.65 https://www.barchart.com/stocks/quotes/TSLA/options?expiration=2017-11-10 The closer it gets to expiry theta decay reduces put value significantly, the 325's that expire tomorrow are only worth $2.60. Expecting TSLA to drop from 325 to 50 a share by Jan has a .006% chance of occuring according to the current delta. It's a lottery ticket at best. _____ Lastly the $50 price is the expected share price at the date of expiry. The price you pay is 57c for the options. So in order to get to your 494k number TSLA would need to decline $50 dollars to a price of 275 a share. You wouldn't want to buy 50 dollar puts, just the 275 puts, provided it declines very quickly. EDIT: I was looking at the recent expiration to get an idea of atm or itm prices, since it's not like you would hold to expiration. Also the Jan has a 0.6% chance of hitting 50, not .006%. That said what I've noticed when things start to slide is that puts have a weird way of pricing themselves. For example when something gradually goes up all of the calls go up down the chain through time frames, but puts do not in the same fashion. Further out lower priced puts won't move nearly as much unless the company is basically headed for bankruptcy.",
"title": ""
}
] |
fiqa
|
36ce137cd444b05a800888c1d08cb949
|
Opportunity to buy Illinois bonds that can never default?
|
[
{
"docid": "fae63f941025620056514a2584d9274e",
"text": "\"Can't declare bankruptcy isn't the same as \"\"can't default\"\". Bankruptcy is a specific legal process for discharging or restructuring debts. If Illinois can't declare bankruptcy, that means it will still owe you the money for the bonds no matter what, but it doesn't guarantee that it will actually pay you what it owes. If Illinois should run out of money to pay what's due on its bonds, then it will default. Unlike the federal government, Illinois can't print money to make the payments.\"",
"title": ""
},
{
"docid": "a62c1a1a6e6730478c6baf65f0c70e36",
"text": "\"If Illinois cannot go bankruptcy This is missing a few, very important words, \"\"...under current law.\"\" The United States changed the law so as to allow Puerto Rico to go into a form of bankruptcy. So you cannot rely on a lack of legal support for bankruptcy to protect any bond investments you might make in Illinois. It is entirely possible for the federal government to add a law enabling a state to discharge its debts through a bankruptcy process. That's why the bonds have been downgraded. They are still fine now, but that could change at any time. I don't want to dive too deep into the politics on this stack, but I could quite easily see a bargain between US President Donald Trump and Democrats in Congress where he agreed to special privileges for pension debts owed to former employees in exchange for full discharge of all other debts. That would lead to a complete loss of value for the bonds that you are considering. There still seem to be other options now, but they seem to be getting closer and closer to that.\"",
"title": ""
},
{
"docid": "945ec7648a923bc792eb62d9376ed17d",
"text": "If you give money to a person or entity, and they don't have the ability to pay you back, it doesn't matter if they are legally required to pay you.",
"title": ""
},
{
"docid": "6627e09ac69b769280a54d790890ead1",
"text": "\"Sovereign immunity is the state's ultimate \"\"get out of bankruptcy free\"\" card. After all, the state has a hand in defining what bankruptcy even is in their state. Federal law is a framework, states customize it from there. The state's simplest tactic is to simply not pay you. And leave you scrambling to the courthouse for redress. Is that an automatic win? Not really, the State can plead sovereign immunity, e.g. Hans v. Louisiana, Alden v. Maine. You could try to pierce that sovereign immunity, essentially you'd be in Federal court trying to force the state into bankruptcy. This would pit State authority against Federal authority. The Feds are just as likely to come in on the state's side, and you lose. Best scenario, it's a knock-down drag-out all the way to the Supreme Court. You would have to be one heck of a creditor for the legal fees to be worth your trouble. States don't make a habit of this because if they did, no one would lend money to them, and this would be rather bad for the economy all around. So business and government work really hard to avert it. But it always stands as their \"\"nuclear option\"\". And you gotta know that when loaning money to States.\"",
"title": ""
}
] |
[
{
"docid": "478cdde040cedfb6e01af7f6e8296744",
"text": "I looked into the investopedia one (all their videos are mazing), but that detail just was not clear to me, it also makes be wonder, if a country issues bonds to finance itself, what happens at maturity when literally millions of them need to be paid? The income needs to have grown to that level or it defaults? Wouldn't all the countries default if that was the case, or are bonds being issued to being able to pay maturity of older bonds already? (I'm freaking myself out by realizing this)",
"title": ""
},
{
"docid": "e6d9456ced95d82d4b55a30dcd8ae546",
"text": "Russia has become more risky as an investment, thus investors, basically the market, wants to be paid more for investing in or owning those bonds. As yields go up, prices go down. So right now you can buy a low priced Russian bond with a high yield because the market views the risk involved as higher than risks involved in other similar securities.",
"title": ""
},
{
"docid": "09341e6010c64a265197ec01f49e1ee6",
"text": "As no one has mentioned them I will... The US Treasury issues at least two forms of bonds that tend to always pay some interest even when prevailing rates are zero or negative. The two that I know of are TIPS and I series bonds. Below are links to the descriptions of these bonds: http://www.treasurydirect.gov/indiv/research/indepth/tips/res_tips.htm http://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds.htm",
"title": ""
},
{
"docid": "32c99fe52d2e5eeb262512161d0e5709",
"text": "\"This is the best tl;dr I could make, [original](https://www.bloomberg.com/news/articles/2017-05-25/investors-say-it-s-time-to-price-climate-into-cities-bond-risks) reduced by 95%. (I'm a bot) ***** > Municipal defaults are rare: Moody&#039;s reports fewer than 100 defaults by municipal borrowers it rated between 1970 and 2014. > Kurt Forsgren, a managing director at S&P, said its municipal ratings remain &quot;Largely driven by financial performance.&quot; He said the company was looking for ways to account for climate change in ratings, including through a city&#039;s ability to access insurance. > Laskey, of Fitch, was skeptical that rating companies could or should account for climate risk in municipal ratings. ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/6ejcgp/rising_seas_may_wipe_out_these_jersey_towns_but/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ \"\"Version 1.65, ~133538 tl;drs so far.\"\") | [Theory](http://np.reddit.com/r/autotldr/comments/31bfht/theory_autotldr_concept/) | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr \"\"PM's and comments are monitored, constructive feedback is welcome.\"\") | *Top* *keywords*: **rated**^#1 **climate**^#2 **risk**^#3 **bond**^#4 **change**^#5\"",
"title": ""
},
{
"docid": "580b87fa9582f0ad27639ac85955d59a",
"text": "\"Looking at the list of bonds you listed, many of them are long dated. In short, in a rate rising environment (it's not like rates can go much lower in the foreseeable future), these bond prices will drop in general in addition to any company specific events occurred to these names, so be prepared for some paper losses. Just because a bond is rated highly by credit agencies like S&P or Moody's does not automatically mean their prices do not fluctuate. Yes, there is always a demand for highly rated bonds from pension funds, mutual funds, etc. because of their investment mandates. But I would suggest looking beyond credit ratings and yield, and look further into whether these bonds are secured/unsecured and if secured, by what. Keep in mind in recent financial crisis, prices of those CDOs/CLOs ended up plunging even though they were given AAA ratings by rating agencies because some were backed by housing properties that were over-valued and loans made to borrowers having difficulties to make repayments. Hence, these type of \"\"bonds\"\" have greater default risks and traded at huge discounts. Most of them are also callable, so you may not enjoy the seemingly high yield till their maturity date. Like others mentioned, buying bonds outright is usually a big ticket item. I would also suggest reviewing your cash liquidity and opportunity cost as oppose to investing in other asset classes and instruments.\"",
"title": ""
},
{
"docid": "c0d0368bdda605c51b53c580867697f1",
"text": "US or EU states are sovereigns which cannot go bankrupt. US states have defaulted in the 1840's, but in most of those cases creditors were eventually repaid in full. (I'm not 100% sure, but I believe that Indiana was an exception with regard to costs incurred building a canal system) The best modern example of a true near-default was New York City in the late 1970's. Although New York City isn't a state, the size and scope of its finances is greater than many US states. What happened then in a nutshell: Basically, a default of a major state or a city like NYC where creditors took major losses would rock the financial markets and make it difficult for all states to obtain both short and long term financing at reasonable rates. That's why these entities get bailed out -- if Greece or California really collapse, it will likely create a domino effect that will have wide reaching effects.",
"title": ""
},
{
"docid": "0b1bae7921e2964548e4bfb52f74808c",
"text": "\"All bonds carry a risk of default, which means that it's possible that you can lose your principal investment in addition to potentially not getting the interest payments that you expect. Bonds (in the US anyway) are graded, so you can manage this risk somewhat by taking higher quality bonds, i.e. in companies or governments that are considered more creditworthy. Regular bank savings (again specific to the US) are insured by FDIC, so even if your bank goes bust, the US Government is backing them up to some limit. That makes such accounts less risky. There's generally no insurance on a bond, even if it is issued by a government entity. If you do your homework on the bond rating system and choose bonds in a rating band where you're comfortable, this could be a good option for you. You'll find, however, that the bond market also \"\"knows\"\" that the interest rates are generally low, so be ware that higher interest issues are usually coming from less creditworthy (and therefore more risky) issuers. EDIT Here's some additional information based on the follow-up question in the comment. When you buy a bond you are actually making a loan to the issuer. They will pay you interest over the lifetime of the bond and then return your principal at the end of the term. (Verify this payment schedule - This is typical, but you should be sure that whatever you're buying works like this.) This is not an investment in the value of the issuer itself like you would be making if you bought stock. With stock you are taking an ownership share in the company. This might entitle you to dividends if the company pays them, but otherwise your investment value on a stock will be tied to the performance of the company. With the bond, the company might be in decline but the bond still a good investment so long as the company doesn't decline so much that they cannot pay their debts. Also, bonds can be issued by governments, but governments do not sell stock. (An \"\"ownership share of the government\"\" would not make sense.) This may be the so-called sovereign debt if issued by a sovereign government or it may be local (we call it municipal here in the US) debt issued by a subordinate level of government. Bonds are a little bit like stock in the sense that there's a secondary market for them. That means that if you get partway through the length of the bond and don't want to hold it, you can sell the bond to someone else. Of course, it will be harder to sell a bond later if the company becomes insolvent or if the interest rates go up between when you buy and when you sell. Depending on these market factors, you might end up with a capital gain or capital loss (meaning you get more or less than the principal that you put into the bond) at the time of a sale.\"",
"title": ""
},
{
"docid": "6e1d5d0f243389e114a65d8c5ecb0d2b",
"text": "Risk is reduced but isn't zero The default risk is still there, the issuer can go bankrupt, and you can still loose all or some of your money if restructuring happens. If the bond has a callable option, the issuer can retire them if conditions are favourable for the issuer, you can still loose some of your investment. Callable schedule should be in the bond issuer's prospectus while issuing the bond. If the issuer is in a different country, that brings along a lot of headaches of recovering your money if something goes bad i.e. forex rates can go up and down. YTM, when the bond was bought was greater than risk free rate(govt deposit rates) Has to be greater than the risk free rate, because of the extra risk you are taking. Reinvestment risk is less because of the short term involved(I am assuming 2-3 years at max), but you should also look at the coupon rate of your bond, if it isn't a zero-coupon bond, and how you invest that. would it be ideal to hold the bond till maturity irrespective of price change It always depends on the current conditions. You cannot be sure that everything is fine, so it pays to be vigilant. Check the health of the issuer, any adverse circumstances, and the overall economy as a whole. As you intend to hold till maturity you should be more concerned about the serviceability of the bond by the issuer on maturity and till then.",
"title": ""
},
{
"docid": "5ae24f7eb0621e7c87284229bddaaa9f",
"text": "The Barclay's 20+ Year Treasury Bond inception date was July 21, 2002. You aren't going to find treasury bond information going back to 1900 because Treasury Bills have only been issued since 1929. The U.S. Department of the Treasury will give you data back to 1990. There's a good article in the Globe and Mail which covers why you may want to buy bonds as part of your portfolio. The key is diversification. Historically, stocks have done better than bonds long-term, but when stocks fall, bonds tend to (though do not always) go up. If you are investing for 30 years, the risk of putting money into bonds is that you will not make as much money as if you had put the money into stocks. Historically (in the US or Canada), you'd have seen positive returns, just not as high as investing in the stock market. There are many investment strategies. I live in Canada and personally favour the one described in the Canadian Couch Potato, a passive index investment strategy where I invest my money in Canadian, U.S. and International equity (stock market mutual funds) and also in a Canadian bond fund. There are, of course, plenty of people who will tell you to take a radically different strategy with your investments.",
"title": ""
},
{
"docid": "62f3d7b741fce8fcb3f608bb101fc0c5",
"text": "\"All of the other answers here are accurate, but (I think) are missing the point as to the question, which rests on how Bonds work in the first place. The bond specifies a payback AMOUNT and DATE. Let's say it is $10,000 and one year from today. If you buy that today for $9900, your yield will be 1%. If you buy it today for $11,000, your yield will be less than 0% (please don't make me do the math - it's just under negative 1%). You might be willing to pay that 1% (rather than receive 1%) for the certainty that you will definitely get your money back. The combined actions of all the people who may be willing to pay a little more or a little less for the safety of a US Treasury Bond is what people call \"\"the Market.\"\" Market forces (generally, investor confidence) will drive the price up and down, which affects the yield. All the other stuff - coupons and inflation and whatnot - all of that only makes sense if you understand that you aren't buying a rate of return, you are buying a payback amount and date.\"",
"title": ""
},
{
"docid": "2aaca1bc531b6eef0e29db9a819bcf72",
"text": "Bonds can increase in price, if the demand is high and offer solid yield if the demand is low. For instance, Russian bond prices a year ago contracted big in price (ie: fell), but were paying 18% and made a solid buy. Now that the demand has risen, the price is up with the yield for those early investors the same, though newer investors are receiving less yield (about 9ish percent) and paying higher prices. I've rarely seen banks pay more variable interest than short term treasuries and the same holds true for long term CDs and long term treasuries. This isn't to say it's impossible, just rare. Also variable is different than a set term; if you buy a 10 year treasury at 18%, that means you get 18% for 10 years, even if interest rates fall four years later. Think about the people buying 30 year US treasuries during 1980-1985. Yowza. So if you have a very large amount of money you will store it in bonds as its much less likely that the US treasury will go bankrupt than your bank. Less likely? I don't know about your bank, but my bank doesn't owe $19 trillion.",
"title": ""
},
{
"docid": "82133eec33d53e68afd1aae5ca19f57c",
"text": "No, there isn't. There are a number of reasons that institutions buy these bonds but as an individual you're likely better off in a low-yield cash account. By contrast, there would be a reason to hold a low-yield (non-zero) bond rather than an alternative low-yield product.",
"title": ""
},
{
"docid": "b4ae774d48fa6d2cae21d71ed5c702bf",
"text": "\"A (very) simplified bond-pricing equation goes thus: Fair_Price: {Face_Value * (1 + Interest - Expected_Market_Return) ^ (Years_To_Maturity)} * P(Company_Will_Default_Before_Maturity) To reiterate, that is a very simplified model. But it allows us to demonstrate the 3 key factors that drive \"\"Fair\"\" Value: The interest relative to the current market rate. If your AAA bond yields 1%, but an equally-good AAA bond currently sells at 3% in the market, then the \"\"Equivalent\"\" value is the face value minus 2% (1% - 3%) for every year to maturity. Years to maturity. Because 1) is multiplied for every year to maturity, longer-dated bonds are more sensitive to changes in market rates. If your bond yields 2% less than market but matures in a year, then it's worth $98, but if it matures in 56 years, then it's only worth 0.98^56 = $32. Conversely, if your bond yields more than the market rate, then its' price will be greater than face value. The company might default on the debt. If a Bond has a \"\"Fair\"\" Value of $100, but you think there's a 50% chance that the company will default, then it's only worth $50. In fact, it can be worth even less because getting paid on a defaulted bond can often take time and/or money and/or lawyers. In your case, because your bond matures in 56 years but yields ~5% (well above the current market rate), for it to be below Face value implies a strong probability of default, or a strong belief that market returns will be above 5% over the next 56 years.\"",
"title": ""
},
{
"docid": "238acb579177dbbd1370975042f0620f",
"text": "Usually Bonds are used to raised capital when a lender doesn't want to take on sole risk of lending. If you are looking at raising anything below 10m bonds are not a option because the bank will just extend you a line of credit.",
"title": ""
},
{
"docid": "de4312884f19663ad7e0d0e07b86898f",
"text": "You're talking about floating rate loans. It's so that the bond is marked back to market every 90 days. Any more often would be a hassle to deal with for everyone involved, any less often and they would be significant variance from LIBOR vs. the loan's specific rate.",
"title": ""
}
] |
fiqa
|
9bd3d229abdfdc6456fbc92bee120108
|
Paying tax for freelance work while travelling
|
[
{
"docid": "5ffaa6dfe158bba9f5d5492710d8c72d",
"text": "Having freelanced myself in South America I could give you a sound advice BUT you would first need to answer some questions. 1) How long do you plan on being in South America? At the end of 2017 will you be back in Ireland or still being in South America? In other words was is your country of residence for tax purposes on Dec. 31 2017 ? That is the key element to consider. Link 2) In latin America you can freelance with a legal working permit BUT in all these countries more than 50% of the economy is under the table. In all these countries expatriate work under the table. The question you need to answer is then: Who will be your employer, a company or the owner of this company? Working undeclared in Latin America is very common, what are the risks? The legal risks depend on the country and their laws. In which country will you travel? How long will you stay there? You will have a tourist visa or a working visa? 3) An important detail, your health. Check how long you can be out of Ireland without loosing your social health benefits in Ireland? In my country, if I am abroad for more than 180 days, I loose my national health coverage. Evaluate the amount of days you will be out of Ireland and where you want to be on Dec. 31th. That could change a lot of things in your life.",
"title": ""
}
] |
[
{
"docid": "d268171091dd171b468c547cc8453f33",
"text": "You can receive funds from US Client as an individual. There is no legal requirement for you to have a company. If the transactions are large say more than 20 lacs in a year, its advisable to open a Private Ltd. Although its simple opening & Registering a company [A CA or a Laywer would get one at a nominal price of Rs 5000] you can do yourself. Whatever be the case, its advisable to have seperate accounts for this business / professional service transactions. Maintain proper records of the funds received. There are certain benefits you can claim, a CA can help you. Paying taxes in Advance is your responsibility and hence make sure you keep paying every quarter as advance tax. Related questions Indian citizen working from India as freelancer for U.S.-based company. How to report the income & pay tax in India? Freelancer in India working for Swiss Company Freelancing to UK company from India How do I account for money paid to colleagues out of my professional income?",
"title": ""
},
{
"docid": "081f555c38ac6fb2c9bc41996fc7ad5a",
"text": "\"Disclaimer: My answer is based on US tax law, but I assume Australian situation would be similar. The IRS would not be likely to believe your statement that \"\"I wouldn't have gone to the country if it wasn't for the conference.\"\" A two-week vacation, with a two-day conference in there, certainly looks like you threw in the conference in order to deduct vacation expenses. At the very least, you would need a good reason why this conference is necessary to your business. If you can give that reason, it would then depend on the specifics of Australian law. The vacation is clearly not just incidental to the trip. The registration for the conference is always claimable as a business expense.\"",
"title": ""
},
{
"docid": "8faf102c4cceb0254f9731411e2413c0",
"text": "If the firm treats you as an employee then they are treated as having a place of business in the UK and therefore are obliged to operate PAYE on your behalf - this rule has applied to EU States since 2010 and the non-EU EEA members, including Switzerland, since 2012. If you are not an employee then your main options are: An umbrella company would basically bill the client on your behalf and pay you net of taxes and NI. You potentially take home a bit less than you would being 100% independent but it's a lot less hassle and potentially makes sense for a small contract.",
"title": ""
},
{
"docid": "b7c17ae0a48b1b0c0783dd5e5b0f8db8",
"text": "\"You can report it as \"\"hobby\"\" income, and then you won't be paying self-employment taxes. You can also deduct the blog-related expenses from that income (subject to the 2% limit though). See this IRS pub on the \"\"hobby\"\" income.\"",
"title": ""
},
{
"docid": "c1f72824ef2b3072f154a0d2fa565ef4",
"text": "Depending on what software you use. It has to be reported as a foreign income and you can claim foreign tax paid as a foreign tax credit.",
"title": ""
},
{
"docid": "be8d414a0fd1c029f1c9ad663a449c4d",
"text": "I do NOT know the full answer but I know here are some important factors that you need to consider : Do you have a physical location in the United States? Are you working directly from Canada? With a office/business location in the United States your tax obligation to the US is much higher. Most likely you will owe some to the state in which your business is located in Payroll Tax : your employer will likely want to look into Payroll tax, because in most states the payroll tax threshold is very low, they will need to file payroll tax on their full-time, part-time employees, as well as contractor soon as the total amount in a fiscal year exceeds the threshold Related to No.1 do you have a social security number and are you legally entitled to working in the States as an individual. You will be receiving the appropriate forms and tax withholding info Related to No.3 if you don't have that already, you may want to look into how to obtain permissions to conduct business within the United States. Technically, you are a one person consulting service provider. You may need to register with a particular state to obtain the permit. The agency will also be able to provide you with ample tax documentations. Chances are you will really need to piece together multiple information from various sources to resolve this one as the situation is specific. To start, look into consulting service / contractor work permit and tax info for the state your client is located in. Work from state level up to kick start your research then research federal level, which can be more complex as it is technically international business service for Canada-US",
"title": ""
},
{
"docid": "8fe6f7a9cad2f4520ed898b0c39b47ba",
"text": "\"I assume your employer does standard withholding? Then what you need to do is figure what bracket that puts you in after you've done all your normal deductions. Let's say it's 25%. Then multiply your freelance income after business expenses, and that's your estimated tax, approximately. (Unless the income causes you to jump a bracket.) To that you have to add approximately 12-13% Social Security/Medicare for income between the $90K and $118,500. Filling out Form 1040SSE will give you a better estimate. But there is a \"\"safe harbor\"\" provision, in that if what you pay in estimated tax (and withholding) this year is at least as much as you owed last year, there's no penalty. I've always done mine this way, dividing last year's tax by 4, since my income is quite variable, and I've never been able to make sense of the worksheets on the 1040-ES.\"",
"title": ""
},
{
"docid": "3829f2bd93fbc08fcf8d58ebe3c01c34",
"text": "\"ITR1 or ITR2 needs to be filed. Declare the income through freelancing in the section \"\"income from other sources\"\"\"",
"title": ""
},
{
"docid": "2226740c96f085d39471c7c914edee3f",
"text": "If you are paid by foreigners then it is quite possible they don't file anything with the IRS. All of this income you are required to report as business income on schedule C. There are opportunities on schedule C to deduct expenses like your health insurance, travel, telephone calls, capital expenses like a new computer, etc... You will be charged both the employees and employers share of social security/medicare, around ~17% or so, and that will be added onto your 1040. You may still need a local business license to do the work locally, and may require a home business permit in some cities. In some places, cities subscribe to data services based on your IRS tax return.... and will find out a year or two later that someone is running an unlicensed business. This could result in a fine, or perhaps just a nice letter from the city attorneys office that it would be a good time to get the right licenses. Generally, tax treaties exist to avoid or limit double taxation. For instance, if you travel to Norway to give a report and are paid during this time, the treaty would explain whether that is taxable in Norway. You can usually get a credit for taxes paid to foreign countries against your US taxes, which helps avoid paying double taxes in the USA. If you were to go live in Norway for more than a year, the first $80,000/year or so is completely wiped off your US income. This does NOT apply if you live in the USA and are paid from Norway. If you have a bank account overseas with more than $10,000 of value in it at any time during the year, you owe the US Government a FinCEN Form 114 (FBAR). This is pretty important, there are some large fines for not doing it. It could occur if you needed an account to get paid in Norway and then send the money here... If the Norwegian company wires the money to you from their account or sends a check in US$, and you don't have a foreign bank account, then this would not apply.",
"title": ""
},
{
"docid": "96503ad0863d795ad2f0d81405f41c31",
"text": "75k is short of the 'highly compensated' category. Most US citizens in that pay range would consider paying someone to do their taxes as an unnecessary expense. Tax shelters usually don't come into play for this level of income. However, there are certain things which provide deductions. Some things that make it better to pay someone: Use the free online tax forms to sandbox your returns. If all you're concerned about is ensuring you pay your taxes correctly, this is the most cost efficient route. If you want to minimize your tax burden, consult with a CPA. Be sure to get one who is familiar with resident aliens from your country and the relevant tax treaties. The estimate you're looking at may be the withholding, of which you may be eligible for a refund for some part of that withholding. Tax treaties likely make sure that you get credit on each side for the money paid in the other. For example, as a US citizen, if I go to Europe and work and pay taxes there, I can deduct the taxes paid in Europe from my tax burden in the US. If I've already paid more to the EU than I would have paid on the same amount earned in the US, then my tax burden in the US is zero. By the same token, if I have not paid up to my US burden, then I owe the balance to the US. But this is way better than paying taxes to your home country and to the host country where you earned the money.",
"title": ""
},
{
"docid": "2b5c0f3ab5a837e85d550225adbb03c7",
"text": "I would say you can file your taxes on your own, but you will probably want the advice of an accountant if you need any supplies or tools for the side business that might be tax deductible. IIRC you don't have to tell your current employer for tax reasons (just check that your contract doesn't state you can't have a side job or business), but I believe you'll have to tell HMRC. At the end of the year you'll have to file a tax return and at that point in time you'll have to pay the tax on the additional earnings. These will be taxed at your highest tax rate and you might end up in a higher tax bracket, too. I'd put about 40% away for tax, that will put you on the safe side in case you end up in the high tax bracket; if not, you'll have a bit of money going spare after paying your taxes.",
"title": ""
},
{
"docid": "c11d1781a910fe53b160db6f0ac43cb5",
"text": "The IRS Guidance pertaining to the subject. In general the best I can say is your business expense may be deductible. But it depends on the circumstances and what it is you want to deduct. Travel Taxpayers who travel away from home on business may deduct related expenses, including the cost of reaching their destination, the cost of lodging and meals and other ordinary and necessary expenses. Taxpayers are considered “traveling away from home” if their duties require them to be away from home substantially longer than an ordinary day’s work and they need to sleep or rest to meet the demands of their work. The actual cost of meals and incidental expenses may be deducted or the taxpayer may use a standard meal allowance and reduced record keeping requirements. Regardless of the method used, meal deductions are generally limited to 50 percent as stated earlier. Only actual costs for lodging may be claimed as an expense and receipts must be kept for documentation. Expenses must be reasonable and appropriate; deductions for extravagant expenses are not allowable. More information is available in Publication 463, Travel, Entertainment, Gift, and Car Expenses. Entertainment Expenses for entertaining clients, customers or employees may be deducted if they are both ordinary and necessary and meet one of the following tests: Directly-related test: The main purpose of the entertainment activity is the conduct of business, business was actually conducted during the activity and the taxpayer had more than a general expectation of getting income or some other specific business benefit at some future time. Associated test: The entertainment was associated with the active conduct of the taxpayer’s trade or business and occurred directly before or after a substantial business discussion. Publication 463 provides more extensive explanation of these tests as well as other limitations and requirements for deducting entertainment expenses. Gifts Taxpayers may deduct some or all of the cost of gifts given in the course of their trade or business. In general, the deduction is limited to $25 for gifts given directly or indirectly to any one person during the tax year. More discussion of the rules and limitations can be found in Publication 463. If your LLC reimburses you for expenses outside of this guidance it should be treated as Income for tax purposes. Edit for Meal Expenses: Amount of standard meal allowance. The standard meal allowance is the federal M&IE rate. For travel in 2010, the rate for most small localities in the United States is $46 a day. Source IRS P463 Alternately you could reimburse at a per diem rate",
"title": ""
},
{
"docid": "f7dda4d298962e5676469e1351ccb15d",
"text": "\"Some of the 45,000 might be taxable. The question is how was the stipend determined. Was it based on the days away? The mile driven? The cities you worked in? The IRS has guidelines regarding what is taxable in IRS Pub 15 Per diem or other fixed allowance. You may reimburse your employees by travel days, miles, or some other fixed allowance under the applicable revenue procedure. In these cases, your employee is considered to have accounted to you if your reimbursement doesn't exceed rates established by the Federal Government. The 2015 standard mileage rate for auto expenses was 57.5 cents per mile. The rate for 2016 is 54 cents per mile. The government per diem rates for meals and lodging in the continental United States can be found by visiting the U.S. General Services Administration website at www.GSA.gov and entering \"\"per diem rates\"\" in the search box. Other than the amount of these expenses, your employees' business expenses must be substantiated (for example, the business purpose of the travel or the number of business miles driven). For information on substantiation methods, see Pub. 463. If the per diem or allowance paid exceeds the amounts substantiated, you must report the excess amount as wages. This excess amount is subject to income tax with-holding and payment of social security, Medicare, and FUTA taxes. Show the amount equal to the substantiated amount (for example, the nontaxable portion) in box 12 of Form W-2 using code “L\"\"\"",
"title": ""
},
{
"docid": "71bd8b7bb71148feb7f19174d08ae7fa",
"text": "\"When I have a question about my income taxes, the first place I look is generally the Giant Book of Income Tax Information, Publication 17 (officially called \"\"Your Federal Income Tax\"\"). This looks to be covered in Chapter 26 on \"\"Car Expenses and Other Employee Business Expenses\"\". It's possible that there's something in there that applies to you if you need to temporarily commute to a place that isn't your normal workplace for a legitimate business reason or other business-related travel. But for your normal commute from your home to your normal workplace it has this to say: Commuting expenses. You cannot deduct the costs of taking a bus, trolley, subway, or taxi, or of driving a car between your home and your main or regular place of work. These costs are personal commuting expenses. You cannot deduct commuting expenses no matter how far your home is from your regular place of work. You cannot deduct commuting expenses even if you work during the commuting trip.\"",
"title": ""
},
{
"docid": "62d4d02c96f3c835c9f5f8998ccd9e9d",
"text": "Technically, if you earn in US (being paid there, which means you have a work visa) and live in other country, you must pay taxes in both countries. International treaties try to decrease the double-taxation, and in this case, you may pay in your country the difference of what you have paid in US. ie. your Country is 20% and USA is 15%, you will pay 5%, and vice-versa. This works only with certain areas. You must know the tax legislation of both countries, and I recommend you seek for advisory. This site have all the basic information you need: http://www.irs.gov/Individuals/International-Taxpayers/Foreign-Earned-Income-Exclusion Good luck.",
"title": ""
}
] |
fiqa
|
00de32fd55d48a38a9f8beb4dd7c1cee
|
How to take advantage of record high household debt in Canada?
|
[
{
"docid": "5be0a104f173e9ba6adf44ea52192025",
"text": "Some ideas:",
"title": ""
}
] |
[
{
"docid": "556d779950d628f3bdb98b63bbbf4757",
"text": "If you can get a rate of savings that is higher than your debt, you save. If you can't then you pay off your debt. That makes the most of the money you have. Also to think about: what are you goals? Do you want to own a home, start a family, further your education, move to a new town? All of these you would need to save up for. If you can do these large transactions in cash you will be better off. If it were me I would do what I think is a parroting of Dave Ramsay's advice Congratulations by the way. It isn't easy to do what you have accomplished and you will lead a simpler life if you don't have to worry about money everyday.",
"title": ""
},
{
"docid": "3ada33136c3e39a4d2c087d8d89a4ef3",
"text": "If you are now in a better position to pay your debts, the wise move for your long-term credit is to consolidate any high-interest debt that remains and pay it off as quickly as possible. This may not be possible depending on your situation, but one way to get such consolidation loans is to have a parent with good credit cosign as guarantor on the consolidation loan. The only way your credit will recover is if you establish a good history of payments over the next seven years. Frankly I wouldn't cosign a loan with a family member who made the same decisions you have made, because I wouldn't want to put my own credit at risk, but I might loan the money directly, which would ease the pain for that family member, but it wouldn't help their credit going forward. This may not be a popular opinion, but without any details, it's hard for me to agree that any of your creditors are being greedy when they threaten a judgment. They loaned you the money in good faith, and now you are attempting to negotiate a change of terms. Are they greedy because the interest rates are too high? Maybe you were a bad risk when they loaned the money and the rates reflected the risk of losing some portion of the money. The fact that you are trying to discharge some portion of that debt vindicates any high rates charged.",
"title": ""
},
{
"docid": "c9e79c3970a82e9d968dd3eaf9229e54",
"text": "\"This is the kind of scenario addressed by Reddit's /r/personalfinance Prime Directive, or \"\"I have $X, what should I do with it?\"\" It follows a fairly linear flowchart for personal spending beginning with a budget and essential costs. The gist of the flowchart is to cover your most immediate costs and risks first, while also maximizing your benefits. It sounds like you would fall somewhere around steps 1 and 3. (Step 2 won't apply since this is not pretax income.) If you don't already have at least $1000 reserved in an emergency fund, that's a great place to start. After that, you'll want to use the rest to pay down your debt. Your credit card debt is very high interest and should be treated as a financial emergency. Besides the balance of your gift, you may want to throw whatever other funds you have saved beyond one month's expenses at this problem. As far as which card, since you have multiple debts you're faced with the classic choice of which payoff method to use: snowball (lowest balance first) or avalanche (highest interest rate first). Avalanche is more financially optimal but less immediately gratifying. Personally, since your 26% APR debt is so large and so high interest, I would recommend focusing every available penny on that card until it is paid off, and then never use it again. Again, per the flowchart, that means using everything left over after steps 0-2 are fulfilled.\"",
"title": ""
},
{
"docid": "a7f7384d35c387d2c34d790377bb93df",
"text": "\"This scheme doesn't work, because the combination of corporation tax, even the lower CCPC tax, plus the personal income tax doesn't give you a tax advantage, not on any realistic income I've ever worked it out on anyway. Prior to the 2014 tax year on lower incomes you could scrape a bit of an advantage but the 2013 budget changed the calculation for the tax credit on non-eligible dividends so there shouldn't be an advantage anymore. Moreover if you were to do it this way, by paying corporation tax instead of CPP you aren't eligible for CPP. If you sit with a calculator for long enough you may figure out a way of saving $200 or something small but it's a lot of paperwork for little if any benefit and you wouldn't get CPP. I understand the money multiplier effect described above, but the tax system is designed in a way that it makes more sense to take it as salary and put it in a tax deferred saving account, i.e. an RRSP - so there's no limit on the multiplier effect. Like I said, sit with a calculator - if you're earning a really large amount and are still under the small business limit it may make more sense to use a CCPC, but that is the case regardless of using it as a tax shelter because if you're earning a lot you're probably running a business of some size. The main benefit I think is that if you use a CCPC you can carry forward your losses, but you have to be aware of the definition of an \"\"allowable business investment loss\"\".\"",
"title": ""
},
{
"docid": "6f4bbf70788e0c7639aa06a94221cde8",
"text": "\"You have a few options, none of which are trade off free: Apply for a credit card, and live off of that. Here, of course, you will go into debt, and there are minimums to pay. But, it will tide you over. In any case, you are getting unsecured credit, so your rates will probably be very, very high. You don't want to build up a lot of 20% per annum debt. An alternative to this would be to go to any bank and ask for an unsecured loan. Having no income, it will be difficult, though not necessarily impossible, to secure some funds. When I was in between houses, once, for example, I was able to borrow $30,000 in unsecured debt (to help me construct my new house!), just based on my income. Grant you, I paid it 2 months later, in order to avoid the 10% / year interest, but the point is that unsecured debt does exist. Credit Cards are easier to get. Arrange for personal financing through your parents or other relatives. If your parents can send you remittances, the terms will most likely be more generous. They know your credit and your true ability to repay. Just because they send you money doesn't mean you have to live with them. As a parent, I have a stake in ensuring my children's success. If I think that tiding them over briefly is in their best interest and mine, you better be sure I'll do it. A variation on this is Microfinance - something like Kiva. Here, if you can write up a story compelling enough to get finance, there are people who might lend you money. Kiva is normally directed towards poorer countries and entrepeneurs - but local variations exist. UPDATE: Google-backed 'LendingClub.com is far more appropriate to this situation than Kiva. Same general idea, but that's the vendor. Find freelance, contract, or light employment. Your concern about employment is justified - you don't want to be in a position where you are unable to travel to an interview because Starbucks or McDonalds will fire you if you don't show up for a shift. (Then again, do you really care if McDonald's lets you go?) As such, you need to find income that is less bound by schedule. Freelance work, in particular, will give you that freedom - assuming you have a skill you can trade. Likewise, short term contract work is equally flexible - usually. Finally, it may be easiest just to get temporary pickup work in a service capacity. In any event, doing something will be better than doing nothing. Who knows, you might want to be a manager / owner of a McDonalds some day. Wouldn't hurt to say, \"\"I started at the bottom.\"\"\"",
"title": ""
},
{
"docid": "336c242807b2a76919c7656d1e3db6e5",
"text": "I see some merit in the other answers, which are all based on the snowball method. However, I would like to present an alternative approach which would be the optimal way in case you have perfect self-control. (Given your amount of debt, most likely you currently do not have perfect self-control, but we will come to that.) The first step is to think about what the minimum amount of emergency funds are that you need and to compare this number with your credit card limit. If your limits are such that your credit cards can still cover potential emergency expenses, use all of the 4000$ to repay the debt on the loan with the higher interest rate. Some answer wrote that Others may disagree as it is more efficient to pay down the 26%er. However, if you pay it all of within the year the difference only comes to $260. This is bad advice because you will probably not pay back the loan within one year. Where would you miraculously obtain 20 000$ for that? Thus, paying back the higher interest loan will save you more money than just 260$. Next, follow @Chris 's advice and refinance your debt under a lower rate. This is much more impactful than choosing the right loan to repay. Make sure to consult with different banks to get the best rate. Reducing your interest rate has utmost priority! From your accumulated debt we can probably infer that you do not have perfect self-control and will be able to minimize your spending/maximize your debt repayments. Thus, you need to incentivize yourself to follow such behavior. A powerful way to do this is to have a family member or very close friend monitor your purchase and saving behavior. If you cannot control yourself, someone else must. It should rather be a a person you trust than the banks you owe money.",
"title": ""
},
{
"docid": "6c8849a352fb9477a84f1711a4dafd30",
"text": "\"Two suggestions: I don't know if you have them in South Africa, but here we have some TV reality shows where a credit consultant visits a family that is deeply in debt and advises them on how to get out of it. The advice isn't very sophisticated, but it does show the personal impact on a family and what is likely to happen to them in the future. \"\"All Maxed Out\"\" is the name of the one I remember. \"\"Till Debt Us Do Part\"\" is another, which focusses on married couples and the stress debt puts on a marriage. If you can find a similar one, loan him a few episodes. Alternatively, how about getting him to a professional debt counsellor?\"",
"title": ""
},
{
"docid": "eef055196175fbe5e94619b63cc7600b",
"text": "\"My recommendation is to pay off your student loans as quickly as possible. It sounds like you're already doing this but don't incur any other large debts until you have this taken care of. I'd also recommend not buying a car, especially an expensive one, on credit or lease either. Back during the dotcom boom I and many friends bought or leased expensive cars only to lose them or struggle paying for them when the bottom dropped out. A car instantly depreciates and it's quite rare for them to ever gain value again. Stick with reliable, older, used cars that you can purchase for cash. If you do borrow for a car, shop around for the best deal and avoid 3+ year terms if at all possible. Don't lease unless you have a business structure where this might create a clear financial advantage. Avoid credit cards as much as possible although if you do plan to buy a house with a mortgage you'll need to maintain some credit history. If you have the discipline to keep your balance small and paid down you can use a credit card to build credit history. However, these things can quickly get out of hand and you'll wonder why you suddenly owe $10K, $20K or even more on them so be very careful with them. As for the house (speaking of US markets here), save up for at least a 20% down payment if you can. Based on what you said, this would be about $20-25K. This will give you a lot more flexibility to take advantage of deals that might come your way, even if you don't put it all into the house. \"\"Stretching\"\" to buy a house that's too expensive can quickly lead to financial ruin. As for house size, I recommend purchasing a 4 bedroom house even if you aren't planning on kids right away. It will resell better and you'll appreciate having the extra space for storage, home office, hobbies, etc. Also, life has a way of changing your plans for having kids and such.\"",
"title": ""
},
{
"docid": "cd09e8a1db0d28c7d37ad2059e0bdf28",
"text": "\"I would advise against \"\"wasting\"\" this rare opportunity on mundane things, like by paying off debts or buying toys - You can always pay those from your wages. Plus, you'll inevitably accumulate new debts over time, so debt repayment is an ongoing concern. This large pile of cash allows you to do things you can't ordinarily do, so use the opportunity to invest. Buy a house, then rent it out. Rent an apartment for yourself. The house rent will pay most (maybe all) of the mortgage, plus the mortgage interest is tax-deductible, so you get a lower tax bill. And houses appreciate over time, so that's an added bonus. When you get married, and start a family, you'll have a house ready for you, partially paid off with other people's money.\"",
"title": ""
},
{
"docid": "ab84c1c48204e90c8b1eeb4ce4868857",
"text": "It's very simple, line up your debt in the order of interest rate, tax adjusted, and start with the highest rate. Too simple? If knocking off the $7500 loan feels better to you than the fact that you are still paying 9% on $7500 (as part of the $20K) makes you feel bad, just pay off the $7500. I'd rather be ahead $210/yr. (A celebrity advocates the small wins promoting good feelings and encouragement. If that actually works for some, I won't criticize it here) If freeing up the $200/mo payment enables you to do something else that's beneficial, that's another story. I've written how $10,000 of student loan can keep you from qualifying for $30K or more of mortgage. In isolation, highest rate. With the rest of the picture, other advice might be more suitable. Welcome to Money.SE",
"title": ""
},
{
"docid": "4b65a7bc2e4502b2f706e84c5fc12f04",
"text": "\"As THEAO suggested, tracking spending is a great start. But how about this - Figure out the payment needed to get to zero debt in a reasonable time, 24 months, perhaps. If that's more than 15% of your income, maybe stretch a tiny bit to 30 months. If it's much less, send 15% to debt until it's paid, then flip the money to savings. From what's left, first budget the \"\"needs,\"\" rent, utilities, etc. Whatever you spend on food, try to cut back 10%. There is no budget for entertainment or clothes. The whole point is one must either live beneath their means, or increase their income. You've seen what can happen when the debt snowballs. In reality, with no debt to service and the savings growing, you'll find a way to prioritize spending. Some months you'll have to choose, dinner out, or a show. I agree with Keith's food bill, $300-$400/mo for 3 of us. Months with a holiday and large guest list throws that off, of course.\"",
"title": ""
},
{
"docid": "0933048f289c21eb3a5c4a85958f3908",
"text": "\"Understand your own risk tolerance and discipline. From Moneychimp we can see different market results - This is a 15 year span, containing what was arguably one of the most awful decades going. A full 10 year period with a negative return. Yet, the 15 year return was a 6.65% CAGR. You'd net 5.65% after long term cap gains. Your mortgage is likely costing ~4% or 3% after tax (This is not applicable to my Canadian friends, I understand you don't deduct interest). In my not so humble opinion, I'd pay off the highest rate debts first (unlike The David followers who are happy to pay off tens of thousands of dollars in 0% interest debt before the large 18% debt) and invest at the highest rate I'd get long term. The problem is knowing when to flip from one to the other. Here's food for thought - The David insists on his use of the 12% long term market return. The last 100 years have had an average 11.96% return, but you can't spend average, the CAGR, the real compound rate was 10.06%. Why would he recommend paying off a sub 3% loan while using 12% for his long term planning (All my David remarks are not applicable to Canadian members, you all probably know better than to listen to US entertainers)? I am retired, and put my money where my mouth is. The $200K I still owe on my mortgage is offset by over $400K in my 401(k). The money went in at 25%/28% pretax, has grown over these past 20 years, and comes out at 15% to pay my mortgage each month. No regrets. Anyone starting out now, and taking a 30 year mortgage, but putting the delta to a 15 year mortgage payment into their 401(k) is nearly certain to have far more in the retirement account 15 years hence than their remaining balance on the loan, even after taxes are considered. Even more if this money helps them to get the full matching, which too many miss. All that said, keep in mind, the market is likely to see a correction or two in the next 15 years, one of which may be painful. If that would keep you up at night, don't listen to me. If a fixed return of 4% seems more appealing than a 10% return with a 15% standard deviation, pay the mortgage first. Last - if you have a paid off house but no job, the town still wants its property tax, and the utilities still need to be paid. If you lose your job with $400K in your 401(k)/IRA but have a $200K mortgage, you have a lot of time to find a new job or sell the house with little pressure from the debt collectors. (To answer the question in advance - \"\"Joe, at what mortgage rate do you pay it off first?\"\" Good question. I'd deposit to my 401(k) to grab matching deposits first, and then if the mortgage was anywhere north of 6%, prioritize that. This would keep my chances at near 100% of coming out ahead.)\"",
"title": ""
},
{
"docid": "5334ecb10e7edc640226aeaf0b65475b",
"text": "\"I'm a little confused on the use of the property today. Is this place going to be a personal residence for you for now and become a rental later (after the mortgage is paid off)? It does make a difference. If you can buy the house and a 100% LTV loan would cost less than 125% of comparable rent ... then buy the house, put as little of your own cash into it as possible and stretch the terms as long as possible. Scott W is correct on a number of counts. The \"\"cost\"\" of the mortgage is the after tax cost of the payments and when that money is put to work in a well-managed portfolio, it should do better over the long haul. Don't try for big gains because doing so adds to the risk that you'll end up worse off. If you borrow money at an after-tax cost of 4% and make 6% after taxes ... you end up ahead and build wealth. A vast majority of the wealthiest people use this arbitrage to continue to build wealth. They have plenty of money to pay off mortgages, but choose not to. $200,000 at 2% is an extra $4000 per year. Compounded at a 7% rate ... it adds up to $180k after 20 years ... not exactly chump change. Money in an investment account is accessible when you need it. Money in home equity is not, has a zero rate of return (before inflation) and is not accessible except through another loan at the bank's whim. If you lose your job and your home is close to paid off but isn't yet, you could have a serious liquidity issue. NOW ... if a 100% mortgage would cost MORE than 125% of comparable rent, then there should be no deal. You are looking at a crappy investment. It is cheaper and better just to rent. I don't care if prices are going up right now. Prices move around. Just because Canada hasn't seen the value drops like in the US so far doesn't mean it can't happen in the future. If comparable rents don't validate the price with a good margin for profit for an investor, then prices are frothy and cannot be trusted and you should lower your monthly costs by renting rather than buying. That $350 per month you could save in \"\"rent\"\" adds up just as much as the $4000 per year in arbitrage. For rentals, you should only pull the trigger when you can do the purchase without leverage and STILL get a 10% CAP rate or higher (rate of return after taxes, insurance and other fixed costs). That way if the rental rates drop (and again that is quite possible), you would lose some of your profit but not all of it. If you leverage the property, there is a high probability that you could wind up losing money as rents fall and you have to cover the mortgage out of nonexistent cash flow. I know somebody is going to say, \"\"But John, 10% CAP on rental real estate? That's just not possible around here.\"\" That may be the case. It IS possible somewhere. I have clients buying property in Arizona, New Mexico, Alberta, Michigan and even California who are finding 10% CAP rate properties. They do exist. They just aren't everywhere. If you want to add leverage to the rental picture to improve the return, then do so understanding the risks. He who lives by the leverage sword, dies by the leverage sword. Down here in the US, the real estate market is littered with corpses of people who thought they could handle that leverage sword. It is a gory, ugly mess.\"",
"title": ""
},
{
"docid": "2f40189b9cd717786307791d9cf438e9",
"text": "\"I'd like to see a credible source for \"\"the highest\"\", but it's certainly fairly high. Household debt could be broadly categorized as debt for housing and debt for consumption. Housing prices seem very high compared to equivalent rental income. This is generating a great deal of debt. Keynes(?) said that \"\"if something cannot go on forever, it will stop.\"\" Just when it will stop, and whether it will stop suddenly or gradually is a matter of great interest. Obviously there are huge vested interests, including the large fraction of the population who already own property and do not wish to see it fall. Nobody really knows; my guess would be on a very-long-term plateau in nominal prices and decline in real prices. The Australian stock market is unlike the US: since it's a small country, a lot of the big companies are export-driven, either by directly exporting physical goods (miners, agriculture) or by FDI (property trusts, banks). So a local recession will hurt the stock market, but not across the board. A decline in the value of the Australian dollar would be very good news for some of these companies. Debt for consumption I think is the smaller fraction. Arguably it's driven by a wealth effect of Australia having had a reasonably good crisis with low unemployment and increasing international purchasing power. If this tops out, you'd expect to see reduced earnings for consumer discretionary companies.\"",
"title": ""
},
{
"docid": "51c97062f6e948df006f5fb2e8511fa4",
"text": "\"Some very general advice. Lifestyle borrowing is almost always a bad idea. You should limit your borrowing to where it is an investment decision or where it is necessary and avoid it when it is a lifestyle choice. For example, many people need to borrow to have a car/house/education or go without. Also, if you are unemployed for a long period of time and can't find work, charging up the credit cards seems very reasonable. However, for things like entertainment, travel, and other nice-to-haves can easily become a road to crushing debt. If you don't have the cash for these types of things, my suggestion is to put off the purchase until you do. Note: I am not including credit cards that you pay off in full at the end of the month or credit used as a convenience as \"\"borrowing\"\"\"",
"title": ""
}
] |
fiqa
|
1e4be5625fb00a9be587cb4ed32155e9
|
Is it worth buying real estate just to safely invest money?
|
[
{
"docid": "8235e95dbdf4a3ee49fa95b34de43948",
"text": "The main point to consider is that your payments toward your own home replace your rent. Any house or apartment you buy will have changes in value; the value is generally going slowly up, but there is a lot of noise, and you may be in a low phase at any time, and for a long time. So seeing it as an investment is not any better than buying share or funds, and it has a much worse liquidity (= you cannot as easily make it to cash when you want to), and not in parts either. However, if you buy for example a one-room apartment for 80000 with a 2% mortgage, and pay 2% interest = 1600 plus 1% principal = 800, for a total of 2400 per year = 200 per month, you are paying less than your current rent, plus you own it after 30 years. Even if it would be worth nothing after 30 years, you made a lot of money by paying half only every month, and it probably is not worthless. You need to be careful not to compare apples with oranges - if you buy a house for 200000 instead, your payments would be higher than your rent was, but you would be living in your house, not in a room. For most people, that is worth a lot. You need to put your own value to that; if you don't care to have a lot more space and freedom, the extra value is zero; if you like it, put a price to it. With current interest rates, it is probably a good idea for most people to buy a house that they can easily afford instead of paying rent. The usual rules should be considered - don't overstretch yourself, leave some security, etc. Generally, it is rather difficult to buy an affordable house instead of renting today and not saving a lot of money in the process, so I would say go for it.",
"title": ""
},
{
"docid": "0d5aab7d69f4d7dcc600f2e8dffe876e",
"text": "\"House prices do not go up. Land prices in countries with growing economies tend to go up. The price of the house on the land generally depreciates as it wears out. Houses require money; they are called money pits for a reason. You have to replace HVAC periodically, roofs, repairs, rot, foundation problems, leaks, electrical repair; and all of that just reduces the rate at which the house (not the land) loses value. To maintain value (of the house proper), you need to regularly rebuild parts of the house. People expect different things in Kitchens, bathrooms, dining rooms, doors, bedrooms today than they do in the past, and wear on flooring and fixtures accumulate over time. The price of land and is going to be highly determined by the current interest rates. Interest rates are currently near zero; if they go up by even a few percent, we can expect land prices to stop growing and start shrinking, even if the economy continues to grow. So the assumption that land+house prices go up is predicated on the last 35 years of constant rigorous economic growth mixed with interest rate decreases. This is a common illusion, that people assume the recent economic past is somehow the way things are \"\"naturally\"\". But we cannot decrease interest rates further, and rigorous economic growth is far from guaranteed. This is because people price land based on their carrying cost; the cost you have to spend out of your income to have ownership of it. And that is a function of interest rates. Throw in no longer expecting land values to constantly grow and second-order effects that boost land value also go away. Depending on the juristiction, a mortgage is a hugely leveraged investment. It is akin to taking 10,000$, borrowing 40,000$ and buying stock. If the stock goes up, you make almost 5x as much money; if it goes down, you lose 5x as much. And you owe a constant stream of money to service the debt on top of that. If you want to be risk free, work out how you'd deal with the value of your house dropping by 50% together with losing your job, getting a job paying half as much after a period of 6 months unemployment. The new job requires a 1.5 hour commute from your house. Interest rates going up to 12% and your mortgage is up for renewal (in 15 years - they climbed gradually over the time, say), optionally. That is a medium-bad situation (not a great depression scale problem), but is a realistic \"\"bad luck\"\" event that could happen to you. Not likely, but possible. Can you weather it? If so, the risk is within your bounds. Note that going bankrupt may be a reasonable plan to such a bit of bad luck. However, note that had you not purchased the house, you wouldn't be bankrupt in that situation. It is reasonably likely that house prices will, after you spend ~3% of the construction cost of the house per year, pay the mortgage on the land+house, grow at a rate sufficient to offset the cost of renting and generate an economically reasonable level of profit. It is not a risk-free investment. If someone tries to sell you a risk-free investment, they are almost certainly wrong.\"",
"title": ""
},
{
"docid": "73714a6fd3ad30dd3f5a834177aeddde",
"text": "People in the United States in the mid-2000's thought that real estate was safe. Then they discovered that when the bubble burst the value of their house dropped 10 to 50%. Then they realized that they couldn't sell, even if they had the cash to make the lender whole. Some lost their houses to foreclosure, others walked away and took massive hits to their wealth and credit scores. When it is hard or impossible to sell, that means you can't move to where the jobs are. While it is possible to make money in real estate, treating your house as an investment vehicle means that you are putting not only all your eggs into one basket; you are also living in the basket. In general you should assume that all investment involves risk. So if you are trying to avoid all chances of losing money then the safest form of investment is via your bank account and government bonds. Your national government has a program to insure bank accounts, you need to understand the rules for that program, including types of accounts and amounts. You should also look into your national programs for retirement accounts, to make sure you are investing for the long term. Many people invest via the stock market or the bond market. These investments are not guaranteed, though there may be some protection for fraud. The more specific your investments (individual companies) the more time you need to invest in research and tracking. Many investors do so via mutual funds or Exchange Traded Funds, this involves less of a time investment because you are paying the management comp nay for the fund to do that research for all their investors.",
"title": ""
},
{
"docid": "a47c65b0a06c138ef8250846a5a28aba",
"text": "There are two parts to this. Firstly, if you are also living in the property you have bought, then you should not consider it to be an investment. You need it to provide shelter, and the market value is irrelevant unless/until you decide to move. Of course, if your move is forced at a time not of your choosing then if the market value has dropped, you might lose out. No-one can accurately predict the housing market any more than they can predict interest rates on normal savings accounts, the movement of the stock market, etc. Secondly, if you just have a lump sum and you want to invest it safely, the bank is one of the safest places to keep it. It is protected / underwritten by EU law (assuming you are in the EU) up to €100,000. See for example here which is about the UK and Brexit in particular but mentions the EU blanket protection. The other things you could do with it - buy property, gold, art works, stocks and shares, whatever thing you think will be least likely to lose value over time - would not be protected in the same way.",
"title": ""
},
{
"docid": "df91c47eafc6397732ede7d8f2fe2602",
"text": "\"You are mixing issues here. And it's tough for members to answer without more detail, the current mortgage rate in your country, for one. It's also interesting to parse out your question. \"\"I wish to safely invest money. Should I invest in real estate.\"\" But then the text offers that it's not an investment, it's a home to live in. This is where the trouble is. And it effectively creates 2 questions to address. The real question - Buy vs Rent. I know you mentioned Euros. Fortunately, mortgages aren't going to be too different, lower/higher, and tax consequence, but all can be adjusted. The New York Times offered a beautiful infographing calculator Is It Better to Rent or Buy? For those not interested in viewing it, they run the math, and the simple punchline is this - The home/rent ratio can have an incredibly wide range. I've read real estate blogs that say the rent should be 2% of the home value. That's a 4 to 1 home/rent (per year). A neighbor rented his higher end home, and the ratio was over 25 to 1. i.e. the rent for the year was about 4% the value of the home. It's this range that makes the choice less than obvious. The second part of your question is how to stay safely invested if you fear your own currency will collapse. That quickly morphs into too speculative a question. Some will quickly say \"\"gold\"\" and others would point out that a stockpile of weapons, ammo, and food would be the best choice to survive that.\"",
"title": ""
},
{
"docid": "7238e6a38329958a49bf7b9e30ce6e74",
"text": "\"Neither you nor others have mentioned the costs of being a homeowner. First, there are monetary costs. If you own a house, you have to pay taxes. They will vary by jurisdiction, but are usually not zero. You also need insurance, which again comes with monthly rates. Then, once in a while, you'll be hit with unpleasant lump sum payments. In 30 years, the mortgage is over and you own the house - but by that time, it will probably need a new roof. That's in the price range of a new car. And over that time, you'll rack up several other repairs which your landlord covers when you rent. Another thing which feels less like an expense emotionally but ends up thinning your wallet is the cosmetic changes you make just because it's your own home. You wouldn't put marble floors in the bathroom if you rent, but you might be tempted to if you live in the house. It might be even worth it from a life satisfaction point of view, but we are talking finance right now, and that's a minus. And then there are the opportunity costs. A house binds you geographically. You may pass up on a nice job offer because your house is too far away, for example. Or you might experience liquidity problems, because a house is difficult to turn into money in a hurry. If you are able to do so, it is usually a much larger sum than you need, and you are paying the costs inherent in that large transaction. These are just examples, you can probably come up with more costs. Then, it is not sure how much money you can get of the house if you change your mind. Say you take this job at the other end of the country, or you become a parent of four and need more space. At the time you decide to sell, the market may have gone down due to the overall state of the economy, or to the house location's popularity, or your own house may have turned undesirable (what if you get a mold infestation which would only go away if you strip it to the concrete and rebuild?) You could let it to renters, but that's a hassle of its own. It takes time to find renters, it may be expensive (income tax, regulations like Energieausweis in Germany), it is risky (if they don't pay, you might not see money even if you sue them). Then there is the problem that prices reflect not some kind of \"\"true\"\" value, but the intersection of supply and demand. And the home market is not as efficient as in a first semester microeconomics textbook. The buyers of private homes deal in small volumes, have little knowledge in the market, pay intermediaries' cuts, and are emotionally attached to the idea of \"\"owning my own house\"\". This drives demand up and creates higher prices than if you had perfectly rational actors on both sides. People pay money for the feeling of being home owners, so those who forego spending on that feeling have more money to invest in something else. Owning something always causes expenses. You have to calculate the savings of having the house vs. the expenses of having it, before you can decide if it is a good deal or not. If you only calculate one side of the equation, you'll be badly mistaken.\"",
"title": ""
},
{
"docid": "adf501f484179c36384e962cf72178e6",
"text": "Investment is very uncertain, so I believe that unless you have loads of money, you should not play around with houses for the sole purpose of investing. Here are the questions which I would consider to judge the situation. Note that this is based on the current situation in The Netherlands Income: Your income is 1800 a month nett, which means your gross annual income should be somewhere below 28500. Allowed mortgage amount: Your maximum morgage amount is then roughly 135000 Is it expensive?: Given your maximum morgage, buying a 200k appartment would consume pretty much all your cash. There is some cost of buying the appartment, so basically if you buy it, you will not have much cash to decorate or deal with unforseen maintenance. If you are conservative, I would say that buying a 175k appartment is financially much more relaxing in your situation. What will be the monthly expense?: Monthly mortgage payments will be about 450~500. So your cashflow will suffer a bit. The amount you actually 'burn' on interest in the early months is about 180 nett (assuming an interest rate just below 2% and tax deductions). There will be additional costs (more heating, long term maintenance etc.) so overall the amount of money you burn will be close to the amount of money you burn on rent. Of course over time there will be less interest, so this should go down. Value change: The value may go up or down, in the very long term I would bet on it going up, but on the short or medium term it is quite uncertain. If you may live there for less than a decade, value change is more of a risk than a benefit. Break even point: As you mention that you will buy a house for 200k, I will assume it is not in the heart of a major city, and that renting it out may not be very attractive. However, I will also assume that it is not the middle of nowhere, and that it will only take a reasonable amount of time to sell the house. So if you want to move out, you will probably sell it at a reasonable price. In this case a rule of thumb is that living in an affordable house is usually a good idea when you live there for more than 5 years. (Is it likely that you will find a partner in this period of time, and will you live at your place then, or somewhere else?) Buying a 200k appartment would leave you completely cashless after you move in, something I would not recommend unless you can depend on your parents for instance to 'bridge the gap' when your cashflow dries up. From a monthly expense point of view you are probably going to be OK, as long as you survive the short run. And financially it only makes sense if you are going to live there for a while, and are fairly confident in your position in the labour market. I would personally recommend you to think hard on your family situation, and only buy a house if it leaves you with some cash in your pocket.",
"title": ""
},
{
"docid": "9e16929c4729303de3778f395776620d",
"text": "Consider looking into real estate investment trusts (REITs). Assuming that they are available for the area that you are considering they simplify the process of investing in this sector. Your money pooled with other investors and then invested in a broad range of properties. If you go this route make sure to only by REITs that are traded in the open market (liquidity and an honest current valuation). Even better I would consider a index fund of REITs for more diversification. Personally I do use a US based REIT index as a small part of my portfolio so as to get better diversification.",
"title": ""
},
{
"docid": "64d3ed9bdd8bc785d306c43ab39bcb18",
"text": "\"No one has addressed the fact that your loan interest and property taxes are \"\"deductible\"\" on your taxes? So, for the first 2/3 years of your loan, you will should be able to deduct each year's mortgage payment off your gross income. This in turn reduces the income bracket for your tax calculation.... I have saved 1000's a year this way, while seeing my home value climb, and have never lost a down payment. I would consider trying to use 1/2 your savings to buy a property that is desirable to live in and being able to take the yearly deduction off your taxes. As far as home insurance, most people I know have renter's insurance, and homeowner's insurance is not that steep. Chances are a year from now if you change your mind and wish to sell, unless you're in a severely deflated area, you will reclaim at minimum your down payment.\"",
"title": ""
}
] |
[
{
"docid": "562c42a443fff22c390f5e45bb7d2402",
"text": "\"Maybe a bit off topic, but I suggest reading \"\"Rich Dad Poor Dad\"\" by Robert Kiyosaki. An investment is something that puts money to your pocket. If your properties don't put money to your pocket (and this seems to be the case), then they're not an investment. Instead, they drain money from you pocket. Therefore you should instead turn these \"\"investments\"\" into real investments. Make everything to earn some money using them, not to earn money somewhere else to cover the loses they create. If that's not possible, get rid of them and find something that \"\"puts money into your pocket\"\".\"",
"title": ""
},
{
"docid": "8c986bdc7bd14f116c542f34eb2db587",
"text": "Real estate is never a low-risk investment. I'd keep your money in the bank, and make sure that you don't have more in any one bank than is guaranteed in the event of bank failure. If your bank account is in Greece, Italy, Spain, Portugal or Ireland, I'd consider moving it to Eurozone country that's in better shape, as there's just a slight possibility of one or more of those countries exiting the Eurozone in a disorderly fashion and forcibly converting bank accounts to a new and weak currency.",
"title": ""
},
{
"docid": "5dee09c7bcf1ccfe6b8a68518b9eddb0",
"text": "Being able to make small investments in very valuable real estate could make this a game changer. I want to invest in a skyscraper in the UAE, but I only have $10k. I can just use REAL tokens to buy a percentage of that property. At least, that's the way I understand this to work.",
"title": ""
},
{
"docid": "1780c956b6e79156a96d46a6b5e1ce97",
"text": "\"Remind him that, over the long-term, investing in safe-only assets may actually be more risky than investing in stocks. Over the long-term, stocks have always outperformed almost every other asset class, and they are a rather inflation-proof investment. Dollars are not \"\"safe\"\"; due to inflation, currency exchange, etc., they have some volatility just like everything else.\"",
"title": ""
},
{
"docid": "6f663ad4ec7451b19430e6e659f58d06",
"text": "\"So here are some of the risks of renting a property: Plus the \"\"normal\"\" risk of losing your job, health, etc., but those are going to be bad whether you had the rental or not, so those aren't really a factor. Can you beat the average gain of the S&P 500 over 10 years? Probably, but there's significant risk that something bad will happen that could cause the whole thing to come crashing down. How many months can you go without the rental income before you can't pay all three mortgages? Is that a risk you're willing to take for $5,000 per year or less? If the second home was paid for with cash, AND you could pay the first mortgage with your income, then you'd be in a much better situation to have a rental property. The fact that the property is significantly leveraged means that any unfortunate event could put you in a serious financial bind, and makes me say that you should sell the rental, get your first mortgage paid down as soon as possible, and start saving cash to buy rental property if that's what you want to invest in. I think we could go at least 24 months with no rental income Well that means that you have about $36k in an emergency fund, which makes me a little more comfortable with a rental, but that's still a LOT of debt spread across two houses. Another way to think about it: If you just had your main house with a $600k mortgage (and no HELOC), would you take out a $76k HELOC and buy the second house with a $200k mortgage?\"",
"title": ""
},
{
"docid": "61e08f0d238c2474a7eb648aac96c339",
"text": "\"TL;DR - go with something like Barry Ritholtz's All Century Portfolio: 20 percent total U.S stock market 5 percent U.S. REITs 5 percent U.S. small cap value 15 percent Pacific equities 15 percent European equities 10 percent U.S. TIPs 10 percent U.S. high yield corp bonds 20 percent U.S. total bond UK property market are absurdly high and will be crashing a lot very soon The price to rent ratio is certainly very high in the UK. According to this article, it takes 48 years of rent to pay for the same apartment in London. That sounds like a terrible deal to me. I have no idea about where prices will go in the future, but I wouldn't voluntarily buy in that market. I'm hesitant to invest in stocks for the fear of losing everything A stock index fund is a collection of stocks. For example the S&P 500 index fund is a collection of the largest 500 US public companies (Apple, Google, Shell, Ford, etc.). If you buy the S&P 500 index, the 500 largest US companies would have to go bankrupt for you to \"\"lose everything\"\" - there would have to be a zombie apocalypse. He's trying to get me to invest in Gold and Silver (but mostly silver), but I neither know anything about gold or silver, nor know anyone who takes this approach. This is what Jeremy Siegel said about gold in late 2013: \"\"I’m not enthusiastic about gold because I think gold is priced for either hyperinflation or the end of the world.\"\" Barry Ritholtz also speaks much wisdom about gold. In short, don't buy it and stop listening to your friend. Is buying a property now with the intention of selling it in a couple of years for profit (and repeat until I have substantial amount to invest in something big) a bad idea? If the home price does not appreciate, will this approach save you or lose you money? In other words, would it be profitable to substitute your rent payment for a mortgage payment? If not, you will be speculating, not investing. Here's an articles that discusses the difference between speculating and investing. I don't recommend speculating.\"",
"title": ""
},
{
"docid": "488a2e2da0765eb148803ded8cdeccfb",
"text": "Like @littleadv, I don't consider a mortgage on a primary residence to be a low-risk investment. It is an asset, but one that can be rather illiquid, depending on the nature of the real estate market in your area. There are enough additional costs associated with home-ownership (down-payment, insurance, repairs) relative to more traditional investments to argue against a primary residence being an investment. Your question didn't indicate when and where you bought your home, the type of home (single-family, townhouse, or condo) the nature of your mortgage (fixed-rate or adjustable rate), or your interest rate, but since you're in your mid-20s, I'm guessing you bought after the crash. If that's the case, your odds of making a profit if/when you sell your home are higher than they would be if you bought in the 2006/2007 time-frame. This is no guarantee of course. Given the amount of housing stock still available, housing prices could still fall further. While it is possible to lose money in all sorts of investments, the illiquid nature of real estate makes it a lot more difficult to limit your losses by selling. If preserving principal is your objective, money market funds and treasury inflation protected securities are better choices than your home. The diversification your financial advisor is suggesting is a way to manage risk. Not all investments perform the same way in a given economic climate. When stocks increase in value, bonds tend to decrease (and vice versa). Too much money in a single investment means you could be wiped out in a downturn.",
"title": ""
},
{
"docid": "cbc8773cb5a67bbf55cba1b513b1816b",
"text": "\"Due to the zero percent interest rate on the Euro right now you won't find any investment giving you 5% which isn't equivalent to gambling. One of the few investment forms which still promises gains without unreasonable risks right now seems to be real estate, because real estate prices in German urban areas (not so in rural areas!) are growing a lot recently. One reason for that is in fact the low interest rate, because it makes it very cheap right now to take a loan and buy a home. This increased demand is driving up the prices. Note that you don't need to buy a property yourself to invest in real estate (20k in one of the larger cities of Germany will get you... maybe a cardboard box below a bridge?). You can invest your money in a real estate fund (\"\"Immobilienfond\"\"). You then don't own a specific property, you own a tiny fraction of a whole bunch of different properties. This spreads out the risk and allows you to invest exactly as much money as you want. However, most real estate funds do not allow you to sell in the first two years and require that you announce your sale one year in advance, so it's not a very liquid asset. Also, it is still a risky investment. Raising real estate prices might hint to a bubble which might burst eventually. Financial analysts have different opinions about this. But fact is, when the European Central Bank starts to take interest again, then the demand for real estate property will drop and so will the prices. When you are not sure what to do, ask your bank for investment advise. German banks are usually trustworthy in this regard.\"",
"title": ""
},
{
"docid": "dd8e5ca4888ff871a3b76ce481bb3bd5",
"text": "\"First of all, bear in mind that there's no such thing as a risk-free investment. If you keep your money in the bank, you'll struggle to get a return that keeps up with inflation. The same is true for other \"\"safe\"\" investments like government bonds. Gold and silver are essentially completely speculative investments; over the years their price tends to vary quite wildly, so unless you really understand how those markets work you should steer well clear. They're certainly not low risk. Repeatedly buying a property to sell in a couple of years time is almost certainly a bad idea; you'll end up paying substantial transaction fees each time that would wipe out a lot of the possible profit, and of course there's always the risk that prices would go down not up. Buying a property to keep - and preferably live in - might be a decent option once you have a good deposit saved up. It's very hard to say where prices will go in future, on the one hand London prices are very high by historical standards, but on the other hand supply is likely to remain severely constrained for years to come. I tend to think of a house as something that I need one of for the rest of my life, and so in one sense not owning a house to live in is a gamble that house prices and rents won't go up substantially. If you own a house, you're insulated from changes in rent etc and even if prices crash at least you still have somewhere to live. However that argument only works really well if you expect to keep living in the same area under most circumstances - house prices might crash in your area but not elsewhere.\"",
"title": ""
},
{
"docid": "dc3d31cae4876d633c5f8674b48d8b89",
"text": "\"Is it safe? No in general. Are there any other safe \"\"paper\"\" ways to invest money let's say for 30 years and be sure nothing will happen to them and you will end your life without relying on pension? No. In these times only real properly gives you some sort of warranty in 5-30 years term. Land, buildings, production lines. Not necessary in US - lots of countries have 0 or fairly low property tax. Some gold, platinum, silver and other rare elements to diversify. - This is the only way you can be sure you will not suddenly loose everything.\"",
"title": ""
},
{
"docid": "3da4efe6540dfd85d329d83f22974972",
"text": "\"With no numbers offered, it's not like we can tell you if it's a wise purchase. -- JoeTaxpayer We can, however, talk about the qualitative tradeoffs of renting vs owning. The major drawback which you won't hear enough about is risk. You will be putting a very large portion of your net worth in what is effectively a single asset. This is somewhat risky. What happens if the regional economy takes a hit, and you get laid off? Chances are you won't be the only one, and the value of your house will take a hit at the same time, a double-whammy. If you need to sell and move away for a job in another town, you will be taking a financial hit - that is, if you can sell and still cover your mortgage. You will definitely not be able to walk away and find a new cheap apartment to scrimp on expenses for a little while. Buying a house is putting down roots. On the other hand, you will be free from the opposite risk: rising rents. Once you've purchased the house, and as long as you're living in it, you don't ever need to worry about a local economic boom and a bunch of people moving into town and making more money than you, pushing up rents. (The San Francisco Bay Area is an example of where that has happened. Gentrification has its malcontents.) Most of the rest is a numbers game. Don't get fooled into thinking that you're \"\"throwing away\"\" money on renting - if you really want to, you can save money yourself, and invest a sum approximately equal to your down payment in the stock market, in some diversified mutual funds, and you will earn returns on that at a rate similar to what you would get by building equity in your home. (You won't earn outsized housing-bubble-of-2007 returns, but you shouldn't expect those in the housing market of today anyway.) Also, if you own, you have broad discretion over what you can do with the property. But you have to take care of the maintenance and stuff too.\"",
"title": ""
},
{
"docid": "5757acae7e1624d29020368571f4543e",
"text": "I would suggest, both as an investor and as someone who has some experience with a family-run trust (not my own), that this is probably not something you should get involved with, unless the money is money you're not worried about - money that otherwise would turn into trips to the movies or something like that. If you're willing to treat it as such, then I'd say go for it. First off, this is not a short or medium term investment. This sort of thing will not be profitable right away, and it will take quite a few years to become profitable to the point that you could take money out of it - if ever. Your money will be effectively, if not actually, locked up for years, and be nearly entirely illiquid. Second, it's not necessarily a good investment even considering that. Real estate is something people tend to feel like it should be an amazing investment that just makes you money, and is better than risky things like the stock market; except it's really not. It's quite risky, vulnerable to things like the 2008 crash, but also to things like a local market being a bit down, or having several months with no renter. The amount your fund will have in it (at most $100x15/month) won't be enough to buy even one property for years ($1500/month means you're looking at what, 100-150 months before you have enough?), and as such won't have enough to buy multiple properties for even longer, which is where you reach some stability. Having a washing machine break down or a roof leak is a big deal when you only have one property to manage; having five or six properties spreads out the risk significantly. You won't get tax breaks from this, of course, and that's where the real issue is for you. You would be far better off putting your money in a Roth IRA (or a regular IRA, but based on your career choice and current income, I'd strongly consider a Roth). You'll get tax free growth, less risky than this fund AND probably faster growing - but regardless of both of those, tax free. That 15-25% that Uncle Sam is giving you back is a huge, huge deal, greater than any return a fund is going to give you (and if they promise that high, run far and fast). Finally, as someone who's watched a family trust work at managing itself - it's a huge, huge headache, and not something I'd recommend at least (unless it comes with money, in which case it's of course a different story). You won't agree on investments, inevitably, and you'll end up spending huge amounts of time trying to convince each other to go with your idea - and it will likely end up being fairly stagnant and conservative, because that's what everyone will be able to at least not object to. It might be something you all enjoy doing, in which case good luck - but definitely not my cup of tea.",
"title": ""
},
{
"docid": "31c83387a5c166a0bf0e8c3637a9e7db",
"text": "I'll add this to what the other answers said: if you are a renter now, and the real estate you want to buy is a house to live in, then it may be worth it - in a currency devaluation, rent may increase faster than your income. If you pay cash for the home, you also have the added benefit of considerably reducing your monthly housing costs. This makes you more resilient to whatever the future may throw at you - a lower paying job, for instance, or high inflation that eats away at the value of your income. If you get a mortgage, then make sure to get a fixed interest rate. In this case, it protects you somewhat from high inflation because your mortgage payment stays the same, while what you would have had to pay in rent keeps going up an up. In both cases there is also taxes and insurance, of course. And those would go up with inflation. Finally, do make sure to purchase sensibly. A good rule of thumb on how much you can afford to pay for a home is 2.5x - 3.5x your annual income. I do realize that there are some areas where it's common for people to buy homes at a far greater multiple, but that doesn't mean it's a sensible thing to do. Also: I'll second what @sheegaon said; if you're really worried about the euro collapsing, it might give you some peace of mind to move some money into UK Gilts or US Treasuries. Just keep in mind that currencies do move against each other, so you'd see the euro value of those investments fluctuate all the time.",
"title": ""
},
{
"docid": "8a01424e83595065e20e56380b974ff5",
"text": "\"I don't know much about New Zealand, but here are just some general thoughts on things to consider. The big difference between buying a house and investing in stocks or the like is that it is fairly easy to invest in a diversified array of stocks (via a mutual fund), but if you buy a house, you are investing in a single piece of property, so everything depends on what happens with that specific property. This in itself is a reason many people don't invest in real estate. Shares of a given company or mutual fund are fungible: if you buy into a mutual fund, you know you're getting the same thing everyone else in the fund is getting. But every piece of real estate is unique, so figuring out how much a property is worth is less of an exact science. Also, buying real estate means you have to maintain it and manage it (or pay someone else to do so). It's a lot more work to accurately assess the income potential of a property, and then maintain and manage the property over years, than it is to just buy some stocks and hold them. Another difficulty is, if and when you do decide to sell the property, doing so again involves work. With stocks you can pretty much sell them whenever you want (although you may take a loss). With a house you have to find someone willing to buy it, which can take time. So a big factor to consider is the amount of effort you're prepared to put into your investment. You mention that your parents could manage the property for you, but presumably you will still have to pay for maintenance and do some managing work yourself (at least discussing things with them and making decisions). Also, if you own the property for a long time your parents will eventually become too old to take care of it, at which point you'll have to rethink the management aspect. So that's sort of the psychological side of things. As for the financial, you don't mention selling the house at any point. If you never sell it, the only gain you get from it is the rent it brings in. So the main factor to consider when deciding whether to buy it as a rental is how much you can rent it for. This is going to be largely determined by where it is located. So from the perspective of making an investment the big question --- which you don't address in the info you provided --- is: how much can you rent this house for, and how much will you be able to rent it for in the future? There is no way to know this for sure, and the only way to get even a rough sense of it is to talk with someone who knows the local real estate market well (e.g., a broker, appraiser, or landlord). If the property is in an \"\"up-and-coming\"\" area (i.e., more people are going to move there in the future), rents could skyrocket; if it's in a backwater, rents could remain stagnant indefinitely. Basically, if you're going to buy a piece of real estate as a long-term investment, you need to know a lot about that property in order to make any kind of comparison with another investment vehicle like a mutual fund. If you already live in the area you may know some things already (like how much you might be able to rent it for). Even so, though, you should try to get some advice from trustworthy people who know the local real estate situation.\"",
"title": ""
},
{
"docid": "9183b4c1428a12698926e2e6ad9e4e91",
"text": "A possibility could be real estate brokerage firms such as Realogy or Prudential. Although a brokerage commission is linked to the sale prices it is more directly impacted by sales volume. If volume is maintained or goes up a real estate brokerage firm can actually profit rather handsomely in an up market or a down market. If sales volume does go up another option would be other service markets for real estate such as real estate information and marketing websites and sources i.e. http://www.trulia.com. Furthermore one can go and make a broad generalization such as since real estate no longer requires the same quantity of construction material other industries sensitive to the price of those commodities should technically have a lower cost of doing business. But be careful in the US much of the wealth an average american has is in their home. In this case this means that the economy as a whole takes a dive due to consumer uncertainty. In which case safe havens could benefit, may be things like Proctor & Gamble, gold, or treasuries. Side Note: You can always short builders or someone who loses if the housing market declines, this will make your investment higher as a result of the security going lower.",
"title": ""
}
] |
fiqa
|
9c62aadb71d5256fed4bcee1640ccce8
|
What is the pitfall of using the Smith maneuver
|
[
{
"docid": "661faa4d48f96d63ec1a4467fefc9842",
"text": "The catch is that you're doing a form of leveraged investing. In other words, you're gambling on the stock market using money that you've borrowed. While it's not as dangerous as say, getting money from a loan shark to play blackjack in Vegas, there is always the chance that markets can collapse and your investment's value will drop rapidly. The amount of risk really depends on what specific investments you choose and how diversified they are - if you buy only Canadian stocks then you're at risk of losing a lot if something happened to our economy. But if your Canadian equities only amount to 3.6% of your total (which is Canada's share of the world market), and you're holding stocks in many different countries then the diversification will reduce your overall risk. The reason I mention that is because many people using the Smith Maneuver are only buying Canadian high-yield dividend stocks, so that they can use the dividends to accelerate the Smith Maneuver process (use the dividends to pay down the mortgage, then borrow more and invest it). They prefer Canadian equities because of preferential tax treatment of the dividend income (in non-registered accounts). But if something happened to those Canadian companies, they stand to lose much of the investment value and suddenly they have the extra debt (the amount borrowed from a HELOC, or from a re-advanceable mortgage) without enough value in the investments to offset it. This could mean that they will not be able to pay off the mortgage by the time they retire!",
"title": ""
}
] |
[
{
"docid": "b7f83a97dfce677a8cbbe76aa56d822a",
"text": "> Smith earned $15 million in total compensation in 2016, including a $1.5-million base salary and $7.3 million in stock awards, according to the company’s securities filings. > As of Dec. 31, his pension was valued at $18.4 million, the filings showed. Smith is entitled to that pension “under any circumstances,” Gutzmer said.",
"title": ""
},
{
"docid": "d331a7d58dd50ed1858f361b6e640d57",
"text": "I will expand this to 401K's, 403B's, and the federal retirement program. There are 3 things to worry about when trading: The tax friendly retirement programs will remove the worry about taxes. Most will reduce or eliminate the concern about transaction fees. But some programs will limit the number of transactions per month. In the past few years the federal program has cracked down on people who were executing trades every day. While employees are able to execute trades without a fee, the costs related to each transaction were being absorbed into the cost of running the program. To keep the costs down they limited the number of transactions per month. Some private programs have limited the movement of money between some of the investment options.",
"title": ""
},
{
"docid": "64a0080a7faeef7c5d3b8afb1106f8f2",
"text": "\"If i do this, I would assume I have an equal probability to make a profit or a loss. The \"\"random walk\"\"/EMH theory that you are assuming is debatable. Among many arguments against EMH, one of the more relevant ones is that there are actually winning trading strategies (e.g. momentum models in trending markets) which invalidates EMH. Can I also assume that probabilistically speaking, a trader cannot do worst than random? Say, if I had to guess the roll of a dice, my chance of being correct can't be less than 16.667%. It's only true if the market is truly an independent stochastic process. As mentioned above, there are empirical evidences suggesting that it's not. is it right to say then that it's equally difficult to purposely make a loss then it is to purposely make a profit? The ability to profit is more than just being able to make a right call on which direction the market will be going. Even beginners can have a >50% chance of getting on the right side of the trades. It's the position management that kills most of the PnL.\"",
"title": ""
},
{
"docid": "23a1942c7b909c8c0a16d1cbf824842e",
"text": "If you plan to take profit at $1.00 then your profit will be $40. Then, if you set your stop at $0.88 then your loss if you get stopped will be $20. So your Reward : Risk = 2:1. Note, that this does not take into account brokerage in and out and any slippage from the price gapping past your stop loss.",
"title": ""
},
{
"docid": "96347bc9f864460e64c7d4b3f9adb866",
"text": "My understanding is that all ETF options are American style, meaning they can be exercised before expiration, and so you could do the staggered exercises as you described.",
"title": ""
},
{
"docid": "90cf653a01b6f9a034dc013a6e16605f",
"text": "\"value slip below vs \"\"equal a bank savings account’s safety\"\" There is no conflict. The first author states that money market funds may lose value, precisely due to duration risk. The second author states that money market funds is as safe as a bank account. Safety (in the sense of a bond/loan/credit) mostly about default risk. For example, people can say that \"\"a 30-year U.S. Treasury Bond is safe\"\" because the United States \"\"cannot default\"\" (as said in the Constitution/Amendments) and the S&P/Moody's credit rating is the top/special. Safety is about whether it can default, ex. experience a -100% return. Safety does not directly imply Riskiness. In the example of T-Bond, it is ultra safe, but it is also ultra risky. The volatility of 30-year T-Bond could be higher than S&P 500. Back to Money Market Funds. A Money Market Fund could hold deposits with a dozen of banks, or hold short term investment grade debt. Those instruments are safe as in there is minimal risk of default. But they do carry duration risk, because the average duration of the instrument the fund holds is not 0. A money market fund must maintain a weighted average maturity (WAM) of 60 days or less and not invest more than 5% in any one issuer, except for government securities and repurchase agreements. If you have $10,000,000, a Money Market Fund is definitely safer than a savings account. 1 Savings Account at one institution with amount exceeding CDIC/FDIC terms is less safe than a Money Market Fund (which holds instruments issued by 20 different Banks). Duration Risk Your Savings account doesn't lose money as a result of interest rate change because the rate is set by the bank daily and accumulated daily (though paid monthly). The pricing of short term bond is based on market expectation of the interest rates in the future. The most likely cause of Money Market Funds losing money is unexpected change in expectation of future interest rates. The drawdown (max loss) is usually limited in terms of percentage and time through examining historical returns. The rule of thumb is that if your hold a fund for 6 months, and that fund has a weighted average time to maturity of 6 months, you might lose money during the 6 months, but you are unlikely to lose money at the end of 6 months. This is not a definitive fact. Using GSY, MINT, and SHV as an example or short duration funds, the maximum loss in the past 3 years is 0.4%, and they always recover to the previous peak within 3 months. GSY had 1.3% per year return, somewhat similar to Savings accounts in the US.\"",
"title": ""
},
{
"docid": "32d1ae25d45bff448b385f3f172f87f3",
"text": "caveat: remember that complex derivatives can be very bad for your wealth (even if you FULLY understand them).",
"title": ""
},
{
"docid": "cab8a85705f3c03341cab69c7efa553e",
"text": "If you look at history, it shows that the more people predict corrections the less was the chance they came. That doesn't prove it stays so, though. 2017 is not any different than other years in the future: Independent of this, with less than ten years remaining until you need to draw from your money, it is a good idea to move away from high risk (and high gain); you will not have enough time to recover if it goes awry. There are different approaches, but you should slowly and continuously migrate your capital to less risky investments. Pick some good days and move 10% or 20% each time to low-risk, so that towards the end of the remaining time 90 or 100% are low or zero risk investments. Many investment banks and retirement funds offer dedicated funds for that, they are called 'Retirement 2020' or 'Retirement 2030'; they do exactly this 'slow and continuous moving over' for you; just pick the right one.",
"title": ""
},
{
"docid": "dbd6058d06909749851d84b6f20389a9",
"text": "You've asked for risks but neglected straight up costs. CD laddering will have some explicit and implicit costs:",
"title": ""
},
{
"docid": "388f355419ddadce6e0fac4adf5e8be1",
"text": "First I would be very careful using a short ETF. There could be some serious tracking error, especially if its levered. Second, when it comes to forex you are in the world of PIPS and high leverage. You would need to have significant capital to be able to hold out the swings as banks do their interventions. Plenty of people have been short waiting, and waiting, and waiting, unless you think you know something the market doesn't this seems like a pretty high risk strategy. I'd suggest buying options instead, but they will be expensive given the volatility.",
"title": ""
},
{
"docid": "9b4a5fff5ef3a98fcf333a137464c7af",
"text": "Deliberately breaking transactions into smaller units to avoid reporting requirements is called structuring and may attract the attention of the IRS and/or law enforcement agencies. I'm not sure what the specific laws are on structuring with respect to FBAR reporting requirements and/or electronic transfers (as opposed to cash transactions). However, there's been substantial recent publicity about cases where people had their assets seized simply because federal agents suspected they were trying to avoid reporting requirements (even if there was no hard evidence of this). It is safer not to risk it. Don't try to structure your transactions to avoid the reporting requirements.",
"title": ""
},
{
"docid": "69c794fa0948f77a425d8f76ed1e36ca",
"text": "This serves as very crucial for the new business manager who is not adept in prospecting the outcomes and for whom, the passages are new! A minor mistake on his part could plunge the whole new venture into the backlash mode which could be potentially dangerous!For More Info:- http://www.startupmentor.co.in/",
"title": ""
},
{
"docid": "e4a0495fedb4a5edad9a887d78543dc5",
"text": "\"Came across this very nice video which explains the \"\"Long Straddle\"\". Thought will share the link here: http://www.khanacademy.org/finance-economics/core-finance/v/long-straddle\"",
"title": ""
},
{
"docid": "22ae57c52676b06d852420a2c9538018",
"text": "There are several reasons it is not recommended to trade stocks pre- or post-market, meaning outside of RTH (regular trading hours). Since your question is not very detailed I have to assume you trade with a time horizon of at least more than a day, meaning you do not trade intra-day. If this is true, all of the above points are a non-issue for you and a different set of points becomes important. As a general rule, using (3) is the safest regardless of what and how you trade because you get price guarantee in trade for execution guarantee. In the case of mid to longer term trading (1 week+) any of those points is viable, depending on how you want to do things, what your style is and what is the most comfortable for you. A few remarks though: (2) are market orders, so if the open is quite the ride and you are in the back of the execution queue, you can get significant slippage. (1) may require (live) data of the post-market session, which is often not easy to come by for the entire US stock universe. Depending on your physical execution method (phone, fax, online), you may lack accurate information of the post-market. If you want to execute orders based on RTH and only want to do that after hours because of personal schedule constraints, this is not really important. Personally I would always recommend (3), independent of the use case because it allows you more control over your orders and their fills. TL;DR: If you are trading long-term it does not really matter. If you go down to the intra-day level of holding time, it becomes relevant.",
"title": ""
},
{
"docid": "e4623e9f341a2fa3d253b34079c687a3",
"text": "In common with many companies, Microsoft has been engaging in share buyback programmes, where it buys its own shares in the market and then cancels them. It's often a more tax-efficient way to distribute profits to the shareholders than paying a dividend. So there were more Microsoft shares in circulation in 1999 than there are now. See here for information.",
"title": ""
}
] |
fiqa
|
dcb572f21f7098a83f2f115dd98c2a93
|
Why does the stock market index get affected when a terrorist attack takes place?
|
[
{
"docid": "b3822687aed5e8f97cd11f47254d6a16",
"text": "\"There are more than a few different ways to consider why someone may have a transaction in the stock market: Employee stock options - If part of my compensation comes from having options that vest over time, I may well sell shares at various points because I don't want so much of my new worth tied up in one company stock. Thus, some transactions may happen from people cashing out stock options. Shorting stocks - This is where one would sell borrowed stock that then gets replaced later. Thus, one could reverse the traditional buy and sell order in which case the buy is done to close the position rather than open one. Convertible debt - Some companies may have debt that come with warrants or options that allow the holder to acquire shares at a specific price. This would be similar to 1 in some ways though the holder may be a mutual fund or company in some cases. There is also some people that may seek high-yield stocks and want an income stream from the stock while others may just want capital appreciation and like stocks that may not pay dividends(Berkshire Hathaway being the classic example here). Others may be traders believing the stock will move one way or another in the short-term and want to profit from that. So, thus the stock market isn't necessarily as simple as you state initially. A terrorist attack may impact stocks in a couple ways to consider: Liquidity - In the case of the attacks of 9/11, the stock market was closed for a number of days which meant people couldn't trade to convert shares to cash or cash to shares. Thus, some people may pull out of the market out of fear of their money being \"\"locked up\"\" when they need to access it. If someone is retired and expects to get $x/quarter from their stocks and it appears that that may be in jeopardy, it could cause one to shift their asset allocation. Future profits - Some companies may have costs to rebuild offices and other losses that could put a temporary dent in profits. If there is a company that makes widgets and the factory is attacked, the company may have to stop making widgets for a while which would impact earnings, no? There can also be the perception that an attack is \"\"just the beginning\"\" and one could extrapolate out more attacks that may affect broader areas. Sometimes what recently happens with the stock market is expected to continue that can be dangerous as some people may believe the market has to continue like the recent past as that is how they think the future will be.\"",
"title": ""
},
{
"docid": "b3867acb1c21ff31986b19e85a766421",
"text": "While JB King says some useful things, I think there is another fundamental reason why stock markets go down after disasters, either natural or man-made. There is a real impact on the markets - in the case of something like 9/11 due to closed airport, higher security costs, closer inspections on trade goods, tighter restrictions on visas, real payments for the rebuilding of destroyed buildings and insurance payouts for killed people, and eventually the cost of a war. But almost as important is the uncertainty and risk. Nobody knew what was going to happen in the days and weeks after an attack like that. Is there going to be another one a week later, or every week for the next year? Will air travel become essentially impractical? Will international trade be severely restricted? All those would have a huge, massive effect on the economy. You may argue that those things are very unlikely, even after something like 9/11. But even a small increase in the likelihood of a catastrophic economic crash is enough to start people selling. There is another thing that drives the market down. Even if most people are sure that there won't be a catastrophic economic crash, they know that other people think there might be and so will sell. That will drive the market down. If they know the market is going down, then sensible traders will start to sell, even if they think there is zero risk of a crash. This makes the effect worse. Eventually prices will drop so far that the people who don't think there is a crash will start to buy, so they can make a profit on the recovery. But that usually doesn't happen until there has been a substantial drop.",
"title": ""
}
] |
[
{
"docid": "6b0353eb5873769de175d7620734fdfe",
"text": "A stock's price does not move in a completely continuous fashion. It moves in discrete steps depending on who is buying/selling at given prices. I'm guessing that by opening bell the price for buying/selling a particular stock has changed based on information obtained overnight. A company's stock closes at $40. Overnight, news breaks that the company's top selling product has a massive defect. The next morning the market opens. Are there any buyers of the stock at $40? Probably not. The first trade of the stock takes place at $30 and is thus, not the same as the previous day's close.",
"title": ""
},
{
"docid": "08195dbfa4527437a69f5a81e359ea3e",
"text": "Yes, you've got it right. The change in price is less meaningful as the instrument is further from the price of the underlying. As the delta moves less, the gamma is much less. Gamma is to delta as acceleration is to speed. Speed is movement relative to X, and acceleration is rate of change in speed. Delta is movement relative to S, and gamma is the rate of change in delta. Delta changes quickly when it is around the money, which is another way of saying gamma is higher. Delta is the change of the option price relative to the change in stock price. If the strike price is near the market price, then the odds of being in or out of the money could appear to be changing very quickly - even going back and forth repeatedly. Gamma is the rate of change of the delta, so these sudden lurches in pricing are by definition the gamma. This is to some extent a little mundane and even obvious. But it's a useful heuristic for analyzing prices and movement, as well as for focusing analyst attention on different pricing aspects. You've got it right. If delta is constant (zero 'speed' for the change in price) then gamma is zero (zero 'acceleration').",
"title": ""
},
{
"docid": "f5f54af20589d8b843e3019749c8be70",
"text": "Theoretically, it could be daily, but depending upon the number of companies in the index, it could be anywhere between daily or once a month or so. Apart from that, there is a periodic index review that happens once every quarter. The methodology for each index is also different, and you need to be aware of it (we had positions on literally hundreds of indices, and I knew the methodology of almost each of them). If you have say, 2 billion dollars tracking a certain index, even a miniscule change in the composition would be substantial for you. But for certain others, you may just need to buy and sell $10k worth of stocks, and we would not even bother.",
"title": ""
},
{
"docid": "f09c3e77e04f0ac7490bda1d19836d71",
"text": "For example, if the Dow, S&P 500, NASDAQ are all down does that necessarily mean the Canadian stock will get negatively impacted? Or is it primarily impacted by the Canadian market? The TWMJF stock makes up a very small part of the Canadian market so it affects the overall market, but this doesn't mean that the overall market affects this stock. So then the answer is: no, the TWMJF stock price will not necessarily follow either US or Canadian market indexes. However, there can be major events which can affect the markets, including the stocks which make up the markets. TWMJF will probably be more sensitive to Canadian events than US events.",
"title": ""
},
{
"docid": "cd6d21819d04068e9eea9dada5e04ac5",
"text": "The opening price is derived from new information received. It reflects the current state of the market. Opening Price Deviation (from Investopedia): Investor expectation can be changed by corporate announcements or other events that make the news. Corporations typically make news-worthy announcements that may have an effect on the stock price after the market closes. Large-scale natural disasters or man-made disasters such as wars or terrorist attacks that take place in the afterhours may have similar effects on stock prices. When this happens, some investors may attempt to either buy or sell securities during the afterhours. Not all orders are executed during after-hours trading. The lack of liquidity and the resulting wide spreads make market orders unattractive to traders in after-hours trading. This results in a large amount of limit or stop orders being placed at a price that is different from the prior day’s closing price. Consequently, when the market opens the next day, a substantial disparity in supply and demand causes the open to veer away from the prior day’s close in the direction that corresponds to the effect of the announcement, news or event.",
"title": ""
},
{
"docid": "1e090411bf34d3e1a21c664640f3d881",
"text": "Graphs are nothing but a representation of data. Every time a trade is made, a point is plotted on the graph. After points are plotted, they are joined in order to represent the data in a graphical format. Think about it this way. 1.) Walmart shuts at 12 AM. 2.)Walmart is selling almonds at $10 a pound. 3.) Walmart says that the price is going to reduce to $9 effective tomorrow. 4.) You are inside the store buying almonds at 11:59 PM. 5.) Till you make your way up to the counter, it is already 12:01 AM, so the store is technically shut. 6.) However, they allow you to purchase the almonds since you were already in there. 7.) You purchase the almonds at $9 since the day has changed. 8.) So you have made a trade and it will reflect as a point on the graph. 9.) When those points are joined, the curves on the graph will be created. 10.) The data source is Walmart's system as it reflects the sale to you. ( In your case the NYSE exchange records this trade made). Buying a stock is just like buying almonds. There has to be a buyer. There has to be a seller. There has to be a price to which both agree. As soon as all these conditions are met, and the trade is made, it is reflected on the graph. The only difference between the graphs from 9 AM-4 PM, and 4 PM-9 AM is the time. The trade has happened regardless and NYSE(Or any other stock exchange) has recorded it! The graph is just made from that data. Cheers.",
"title": ""
},
{
"docid": "018634fe9681150c8817969ad44b3afd",
"text": "During the 12 plus hours the market was closed news can change investors opinion of the stock. When the market reopens that first trade could be much different than the last trade the day before.",
"title": ""
},
{
"docid": "9ffa2801a53684aa4778439927170236",
"text": "As others have pointed out, the value of Apple's stock and the NASDAQ are most likely highly correlated for a number of reasons, not least among them the fact that Apple is part of the NASDAQ. However, because numerous factors affect the entire market, or at least a significant subset of it, it makes sense to develop a strategy to remove all of these factors without resorting to use of an index. Using an index to remove the effect of these factors might be a good idea, but you run the risk of potentially introducing other factors that affect the index, but not Apple. I don't know what those would be, but it's a valid theoretical concern. In your question, you said you wanted to subtract them from each other, and only see an Apple curve moving around a horizontal line. The basic strategy I plan to use is similar but even simpler. Instead of graphing Apple's stock price, we can plot the difference between its stock price on business day t and business day t-1, which gives us this graph, which is essentially what you're looking for: While this is only the preliminaries, it should give you a basic idea of one procedure that's used extensively to do just what you're asking. I don't know of a website that will automatically give you such a metric, but you could download the price data and use Excel, Stata, etc. to analyze this. The reasoning behind this methodology builds heavily on time series econometrics, which for the sake of simplicity I won't go into in great detail, but I'll provide a brief explanation to satisfy the curious. In simple econometrics, most time series are approximated by a mathematical process comprised of several components: In the simplest case, the equations for a time series containing one or more of the above components are of the form that taking the first difference (the procedure I used above) will leave only the random component. However, if you want to pursue this rigorously, you would first perform a set of tests to determine if these components exist and if differencing is the best procedure to remove those that are present. Once you've reduced the series to its random component, you can use that component to examine how the process underlying the stock price has changed over the years. In my example, I highlighted Steve Jobs' death on the chart because it's one factor that may have led to the increased standard deviation/volatility of Apple's stock price. Although charts are somewhat subjective, it appears that the volatility was already increasing before his death, which could reflect other factors or the increasing expectation that he wouldn't be running the company in the near future, for whatever reason. My discussion of time series decomposition and the definitions of various components relies heavily on Walter Ender's text Applied Econometric Time Series. If you're interested, simple mathematical representations and a few relevant graphs are found on pages 1-3. Another related procedure would be to take the logarithm of the quotient of the current day's price and the previous day's price. In Apple's case, doing so yields this graph: This reduces the overall magnitude of the values and allows you to see potential outliers more clearly. This produces a similar effect to the difference taken above because the log of a quotient is the same as the difference of the logs The significant drop depicted during the year 2000 occurred between September 28th and September 29th, where the stock price dropped from 26.36 to 12.69. Apart from the general environment of the dot-com bubble bursting, I'm not sure why this occurred. Another excellent resource for time series econometrics is James Hamilton's book, Time Series Analysis. It's considered a classic in the field of econometrics, although similar to Enders' book, it's fairly advanced for most investors. I used Stata to generate the graphs above with data from Yahoo! Finance: There are a couple of nuances in this code related to how I defined the time series and the presence of weekends, but they don't affect the overall concept. For a robust analysis, I would make a few quick tweaks that would make the graphs less appealing without more work, but would allow for more accurate econometrics.",
"title": ""
},
{
"docid": "52ef53da2268a37f8563da3280b54011",
"text": "Many of the major indices retreated today because of this news. Why? How do the rising budget deficits and debt relate to the stock markets? The major reason for the market retreating is the uncertainty regarding the US Dollar. If the US credit rating drops that will have an inflationary effect on the currency (as it will push up the cost of US Treasuries and reduce confidence in the USD). If this continues the loss of USD confidence could bring an end to the USD as the world's reserve currency which could also create inflation (as world banks could reduce their USD reserves). This can make US assets appear overvalued. Why is there such a large emphasis on the S&P rating? S&P is a large trusted rating agency so the market will respond to their analysis much like how a bank would respond to any change in your rating by Transunion (Consumer Credit Bureau) Does this have any major implications for the US stock markets today, in the short term and in July? If you are a day-trader I'm sure it does. There will be minor fluctuations in the market as soon as news comes out (either of its extension or any expected delays in passing that extension). What happens when the debt ceiling is reached? Since the US is in a deficit spending situation it needs to borrow more to satisfy its existing obligations (in short it pays its debt with more debt). As a result, if the debt ceiling isn't raised then eventually the US will be unable to pay its existing obligations. We would be in a default situation which could have devastating affects on the value of the USD. How hard the hit will depend on how long the default situation lasts (the longer we go without an increased ceiling after the exhaustion point the more we default on). In reality, Congress will approve a raise, but they will drag it out to the last possible minute. They want to appear as if they are against it, but they understand the catastrophic effects of not doing so.",
"title": ""
},
{
"docid": "3f97d35bd94c664205c2929914af3cc9",
"text": "Stocks, gold, commodities, and physical real estate will not be affected by currency changes, regardless of whether those changes are fast or slow. All bonds except those that are indexed to inflation will be demolished by sudden, unexpected devaluation. Notice: The above is true if devaluation is the only thing going on but this will not be the case. Unfortunately, if the currency devalued rapidly it would be because something else is happening in the economy or government. How these asset values are affected by that other thing would depend on what the other thing is. In other words, you must tell us what you think will cause devaluation, then we can guess how it might affect stock, real estate, and commodity prices.",
"title": ""
},
{
"docid": "f10d6d6f9f9b10e95316e161f5f668cc",
"text": "The All Ords Index consists of the 500 largest companies by market capitalisation listed on the Australia Stock Exchange. Each stock in the All Ords. Index is given a weighting based on its market capitalisation. As the price of the stocks within the All Ords. Index change, so does the points on the index itself. The Index is more sensitive to changes in the larger capitalised stocks due to their larger weighting in the Index. Example: If a company has a weighting of 10% and its price goes up by 10%, and all other stocks in the Index don't go up or down, then this will cause the All Ords Index to go up by 1% (10% of 10%).",
"title": ""
},
{
"docid": "9a0db602af711368a0219b1c7845726c",
"text": "\"Stock price is set to the price with the highest transaction volume at any given time. The stock price you cited was only valid in the last transaction on a specific stock exchange. As such it is more of an \"\"historic\"\" value. Next trade will be done with the next biggest volume. Depending on the incoming bids and asks this could be higher or lower, but you can assume it will not be too far off if there is no crash underway. Simple example stock exchange:\"",
"title": ""
},
{
"docid": "b7c4a0d571de62eb3406e5bca11eef0d",
"text": "You can definitely affect the price - putting in a buy increases the demand for the stock, causing a permanent price move. Also if you hammer the market trying to execute too quickly you can hit offers that are out of the money and move the price temporarily before it stabilizes to its new equilibrium. True, as an individual investor your trades will be negligible in size and the effect will be nonexistent. But if you are a hedge fund putting in a buy for 5% of dtv, you can have a price impact. not 50%, but at least a handful of bps.",
"title": ""
},
{
"docid": "cb44aa9c88eed2b53e5cbd2e480982bf",
"text": "If you are in a position to have information that will impact the shares of a stock or index fund and you use that information for either personal gain or to mitigate the losses that you would have felt then it is insider trading. Even if in the end your quiet period passes with little or no movement of the stocks in question. It is the attempt to benefit from or the appearance of the attempt to benefit from inside information that creates the crime. This is the reason for the quiet periods to attempt to shield the majority of the companies employees from the appearance of impropriety, as well as any actual improprieties. With an index you are running a double edged sword because anything that is likely to cause APPLE to drop 10% is likely to give a bump to Motorola, Google, and its competitors. So you could end up in jail for Insider trading and lose your shirt on a poor decision to short a Tech ETF on knowledge that will cause Apple to take a hit. It is certainly going to be harder to find the trade but the SEC is good at looking around for activity that is inconsistent with normal trading patterns of individuals in a position to have knowledge with the type of market impact you are talking about.",
"title": ""
},
{
"docid": "2272a5d2f2b5c88cf72bfd3066ffabc1",
"text": "It will depend largely on your broker what type of stop and trailing stop orders they provide. Saying that, I have not come across any brokers yet that offer limit orders with trailing stop orders. Unlike a standard stop order where you can either make it a market stop order or a limit stop order, usually most brokers have trailing stop orders as market orders only, where you can either set the trailing stop to be a dollar value or percentage from the most recent high. Remember also, that trailing stop orders will be based on the intra-day highs and not the highest closing price. That means that if the share price spikes up during the day your trailing stop will move up, and if the price then spikes down you may be stopped out prematurely, after which the price might rally again. For this reason I try to base my trailing stops on the highest closing price by using standard stop loss orders and moving it up manually after the close of trade if the share price has closed at a new high. This takes a few minutes each evening (depending on how many stocks you have to check and adjust the stops for) but gives you more control. Using this method will also enable you to set limit orders attached to your stop loss triggers, and you won't have to keep your trailing too close to the last high price thus potentially causing you to get stopped out prematurely. Slightly off track but may be handy if you set profit targets, my broker has recently introduced Trailing Take Profit Orders. The way it works is, say you have a profit target of 50%, so you buy at $2 and want to take profits if the price reaches $3, you could set your Trailing Take Profit Trigger at say $3.10 or above and set a Trail by Amount of say $0.10. So if the price after hitting $3.10 falls to $3.00 you will be stopped out and collect your profits. If the price moves up to $3.30 and then falls to $3.20, you will be stopped out at $3.20 and make some extra profits. If the price continues going up the Trailing Take Profit will continue to move up always $0.10 below the highest price reached. I think this would be a very useful order if you were range trading where you could set the Trailing Take Profit trigger near recent resistance so you can get out if prices start reversing at or around the resistance, but continue profiting if the price breaks through the resistance.",
"title": ""
}
] |
fiqa
|
ff4d6adf2a8c1c1e3f2395ceeced6ab1
|
How can a person protect his savings against a country default?
|
[
{
"docid": "647740b4ae71f5a6f13b36593cb3f041",
"text": "The default of the country will affect the country obligations and what's tied to it. If you have treasury bonds, for example - they'll get hit. If you have cash currency - it will get hit. If you're invested in the stock market, however, it may plunge, but will recover, and in the long run you won't get hit. If you're invested in foreign countries (through foreign currency or foreign stocks that you hold), then the default of your local government may have less affect there, if at all. What you should not, in my humble opinion, be doing is digging holes in the ground or probably not exchange all your cash for gold (although it is considered a safe anchor in case of monetary crisis, so may be worth considering some diversifying your portfolio with some gold). Splitting between banks might not make any difference at all because the value won't change, unless you think that one of the banks will fail (then just close the account there). The bottom line is that the key is diversifying, and you don't have to be a seasoned investor for that. I'm sure there are mutual funds in Greece, just pick several different funds (from several different companies) that provide diversified investment, and put your money there.",
"title": ""
},
{
"docid": "45c3cb28491d6b35f3219f442d3100a6",
"text": "\"These have the potential to become \"\"end-of-the-world\"\" scenarios, so I'll keep this very clear. If you start to feel that any particular investment may suddenly become worthless then it is wise to liquidate that asset and transfer your wealth somewhere else. If your wealth happens to be invested in cash then transferring that wealth into something else is still valid. Digging a hole in the ground isn't useful and running for the border probably won't be necessary. Consider countries that have suffered actual currency collapse and debt default. Take Zimbabwe, for example. Even as inflation went into the millions of percent, the Zimbabwe stock exchange soared as investors were prepared to spend ever-more of their devaluing currency to buy stable stocks in a small number of locally listed companies. Even if the Euro were to suffer a critical fall, European companies would probably be ok. If you didn't panic and dig caches in the back garden over the fall of dotcom, there is no need to panic over the decline of certain currencies. Just diversify your risk and buy non-cash (or euro) assets. Update: A few ideas re diversification: The problem for Greece isn't really a euro problem; it is local. Local property, local companies ... these can be affected by default because no-one believes in the entirety of the Greek economy, not just the currency it happens to be using - so diversification really means buying things that are outside Greece.\"",
"title": ""
},
{
"docid": "25a38b50c7fa018f6d9168ae1325fc2f",
"text": "\"Since you are going to be experiencing a liquidity crisis that even owning physical gold wouldn't solve, may I suggest bitcoins? You will still be liquid and people anywhere will be able to trade it. This is different from precious metals, whereas even if you \"\"invested\"\" in gold you would waste considerable resources on storage, security and actually making it divisible for trade. You would be illiquid. Do note that the bitcoin currency is currently more volatile than a Greek government bond.\"",
"title": ""
}
] |
[
{
"docid": "2ebd49168456a4ffc4b7f3ccd5ef1f1a",
"text": "\"There's not nearly enough information here for anyone to give you good advice. Additionally, /r/personalfinance will probably be a bit more relevant and helpful for what you're asking. Aside from that, if you don't know what you're doing, stay out of currency trading and mutual funds. If you don't care about losing your money, go right ahead and play in some markets, but remember there are people paid millions of dollars/year who don't make consistent profit. What are the chances a novice with no training will perform well? My $.02, pay your debt, make a general theory about the economy a year from now (e.g. \"\"Things will be worse in Europe than they are now\"\") and then invest your money in an index fund that matches that goal (e.g. Some sort of Europe-Short investment vehicle). Reassess a year from now and don't stress about it.\"",
"title": ""
},
{
"docid": "c47466f7880e9e6b6d3a19c680ce234d",
"text": "Bank and most Credit Union deposit accounts (including CDs) are guaranteed by the Federal government by the FDIC and NCUA, respectively. Some state-chartered credit unions use private insurance, you'll want to be careful about storing lots of money in those institutions.",
"title": ""
},
{
"docid": "d701e65d752ded1d87e896f088aea506",
"text": "\"Somehow I just stumbled onto this thread... > You essentially robbed the person holding the debt (since you promised to pay it off). Depends on leverage, with fractional reserve lending. Banks are permitted to loan out 30x their actual assets, or more. If I have $1 but can loan out $30, and anything more than $1 gets paid back, I haven't lost any money. In addition, I can write off the amount defaulted, *and the government will pay me back* for certain types of loans. With student loans, since they are almost impossible to discharge, gov't will pursue the borrower for years and decades, and ultimately collect more interest. Here is an article on it: http://online.wsj.com/article/SB10001424052748704723104576061953842079760.html > According to Kantrowitz, the government stands to earn $2,010.44 more in interest from a $10,000 loan that defaulted than if it had been paid in full over a 20-year term, and $6,522.00 more than if it had been paid back in 10 years. Alan Collinge, founder of borrowers' rights advocacy Student Loan Justice, said the high recovery rates provide a \"\"perverted incentive\"\" for the government to allow loans to go into default. Kantrowitz estimates the recovery rate would need to fall to below 50% in order for default prevention efforts to become more lucrative than defaults themselves. Not to mention: http://studentloanjustice.org/defaults-making-money.html > So essentially, the Department is given a choice: Either do nothing and get nothing, or outlay cash with the knowledge that this outlay will realize a 22 percent return, ultimately (minus the governments cost of money and collection costs). From this perspective, it is clear that based solely on financial motivations, and without specific detailed knowledge of the loan (i.e. borrower characteristics, etc.), the chooser would clearly favor the default scenario, for not only the return, but perhaps the potential savings in subsidy payment as well, And don't forget the penalties accruing to the person defaulting; they will probably have to move out of the country in order to escape collection. And let's factor in the huge ROI the lender sees by creating an indentured servant class. Plus, the gov't will issue as much currency as it wants, to make *itself* whole. And how much of a loss IS the loss, when the whole of the loan amount went right back into the local economy, paying professors, janitors, landlords, grocery stores, etc.? And don't forget all THOSE taxes (income and sale) that the gov't collects. Government will collect ~30%-50% of the loan immediately as income and sales tax, plus a portion of it every time the money changes hands (I pay income tax, then use some of my after-tax money to pay you for a product or service, and you still have to pay tax on that money, and so on). So it's more complicated than having \"\"robbed the person holding the debt\"\". Banks at 30x leverage don't lose money as long as they get back 1/30th of the total amount lent out, including interest, fees, and penalties, before considering write-offs and government repayment. In fact, the point of over-leverage is so you CAN make loans that have risk attached. If you could only lend what you actually had, you would have to stay away from anything risky because it would be too easy to lose money. Having virtual $ to bet means you can serve market segments that have higher risk. This makes MORE money for the banks, that's why they do it. They are already playing with funny money, so they don't lose any even if you default and move to another country. And the money you \"\"spent\"\" has also made its way back to them in various amounts, such as your professor's mortgage payments, auto loan, etc. Your taking on debt already helped the bank get its OTHER loans repaid. So, roughly speaking, if you took out $90,000 and $3,000 of that made its way back to the bank through various means, they haven't lost any money, because it only cost them $3,000 actual dollars in the first place.\"",
"title": ""
},
{
"docid": "d996dffe8ff062a55256fe700838aff1",
"text": "\"Usually when the government defaults, the currency gets devalued. So as a debtor, that's a good thing -- your debt gets devalued. The \"\"catch\"\" is that your income and buying power is also devalued. So unless you happen to own the type of assets that become more valuable during those circumstances (real property, farms, utilities, certain industrial things, etc) you're looking at tough times ahead.\"",
"title": ""
},
{
"docid": "e7ef5250d5231352ccfe61ce9ffb9660",
"text": "\"Sovereigns cannot go bankrupt. Basically, when a sovereign government (this includes nations and US States, probably political subdivisions in other countries as well) becomes insolvent, they default. Sovereigns with the ability to issue new currency have the option to do so because it is politically expedient. Sovereigns in default will negotiate with creditor committees to reduce payments. Creditors with debt backed by the \"\"full faith and credit\"\" of the sovereign are generally first in line. Creditors with debt secured by revenue may be entitled to the underlying assets that provide the revenue. The value of your money in the bank in a deposit account may be at risk due to currency devaluation or bank failure. A default by a major country would likely lock up the credit markets, and you may see yourself in a situation where money market accounts actually fall in value.\"",
"title": ""
},
{
"docid": "0389ef13c4efdfebeb2cfe9c55344eb3",
"text": "\"This might not map well, because personal finance is not the global economy; but let's start by talking about this in terms of the cost of a loan vs the gain of an investment. If you can buy a house with a mortgage at 3%, but make 7% on average in the stock market... You should take as *looong* as possible to pay that off, and invest every penny you can spare in the markets. Heck, if you can take on even *more* debt at 3%, you should still do the same. Now imagine you have the power to literally print money, *but*, doing so is effectively a form of \"\"loan\"\" to yourself. We call the \"\"interest\"\" on that loan \"\"inflation\"\", and it comes out to roughly 2%, basically the same rate that US treasuries pay (they aren't strictly locked, but they rarely drift far apart). So, if you can print money at 1%, you should rationally print as much money as you possibly can to buy US treasuries at 2+%. But someone has to *take* that money off your hands - Pallets of money siting in a warehouse aren't worth any more than the paper they're made of. There we get into trade imbalances... Whether printing money costs you 0.1% or 10% or 1000% per year depends on whether your country is, on average, making or losing money on international trade (I'm glossing over a hell of a lot there, as full disclosure), and by how much. If you're printing money as fast as you can just to buy food to stay alive with zero exports, you're screwed; if your country exports $10 to the US (or equivalents) for every $1 you import, the rest of that is essentially \"\"invested\"\" in USD, in that you didn't need to print it yourself just to feed your people.\"",
"title": ""
},
{
"docid": "6e6eb756cc10517e78138928fe576fa8",
"text": "\"Depositum irregulare is a Latin phrase that simply means \"\"irregular deposit.\"\" It's a concept from ancient Roman contract law that has a very narrow scope and doesn't actually apply to your example. There are two distinct parts to this concept, one dealing with the notion of a deposit and the other with the notion of irregularity. I'll address them both in turn since they're both relevant to the tax issue. I also think that this is an example of the XY problem, since your proposed solution (\"\"give my money to a friend for safekeeping\"\") isn't the right solution to your actual problem (\"\"how can I keep my money safe\"\"). The currency issue is a complication, but it doesn't change the fact that what you're proposing probably isn't a good solution. The key word in my definition of depositum irregulare is \"\"contract\"\". You don't mention a legally binding contract between you and your friend; an oral contract doesn't qualify because in the event of a breach, it's difficult to enforce the agreement. Legally, there isn't any proof of an oral agreement, and emotionally, taking your friend to court might cost you your friendship. I'm not a lawyer, but I would guess that the absence of a contract implies that even though in the eyes of you and your friend, you're giving him the money for \"\"safekeeping,\"\" in the eyes of the law, you're simply giving it to him. In the US, you would owe gift taxes on these funds if they're higher than a certain amount. In other words, this isn't really a deposit. It's not like a security deposit, in which the money may be held as collateral in exchange for a service, e.g. not trashing your apartment, or a financial deposit, where the money is held in a regulated financial institution like a bank. This isn't a solution to the problem of keeping your money safe because the lack of a contract means you incur additional risk in the form of legal risk that isn't present in the context of actual deposits. Also, if you don't have an account in the right currency, but your friend does, how are you planning for him to store the money anyway? If you convert your money into his currency, you take on exchange rate risk (unless you hedge, which is another complication). If you don't convert it and simply leave it in his safe, house, car boot, etc. you're still taking on risk because the funds aren't insured in the event of loss. Furthermore, the money isn't necessarily \"\"safe\"\" with your friend even if you ignore all the risks above. Without a written contract, you have little recourse if a) your friend decides to spend the money and not return it, b) your friend runs into financial trouble and creditors make claim to his assets, or c) you get into financial trouble and creditors make claims to your assets. The idea of giving money to another individual for safekeeping during bankruptcy has been tested in US courts and ruled invalid. If you do decide to go ahead with a contract and you do want your money back from your friend eventually, you're in essence loaning him money, and this is a different situation with its own complications. Look at this question and this question before loaning money to a friend. Although this does apply to your situation, it's mostly irrelevant because the \"\"irregular\"\" part of the concept of \"\"irregular deposit\"\" is a standard feature of currencies and other legal tender. It's part of the fungibility of modern currencies and doesn't have anything to do with taxes if you're only giving your friend physical currency. If you're giving him property, other assets, etc. for \"\"safekeeping\"\" it's a different issue entirely, but it's still probably going to be considered a gift or a loan. You're basically correct about what depositum irregulare means, but I think you're overestimating its reach in modern law. In Roman times, it simply refers to a contract in which two parties made an agreement for the depositor to deposit money or goods with the depositee and \"\"withdraw\"\" equivalent money or goods sometime in the future. Although this is a feature of the modern deposit banking system, it's one small part alongside contract law, deposit insurance, etc. These other parts add complexity, but they also add security and risk mitigation. Your arrangement with your friend is much simpler, but also much riskier. And yes, there probably are taxes on what you're proposing because you're basically giving or loaning the money to your friend. Even if you say it's not a loan or a gift, the law may still see it that way. The absence of a contract makes this especially important, because you don't have anything speaking in your favor in the event of a legal dispute besides \"\"what you meant the money to be.\"\" Furthermore, the money isn't necessarily safe with your friend, and the absence of a contract exacerbates this issue. If you want to keep your money safe, keep it in an account that's covered by deposit insurance. If you don't have an account in that currency, either a) talk to a lawyer who specializes in situation like this and work out a contract, or b) open an account with that currency. As I've stated, I'm not a lawyer, so none of the above should be interpreted as legal advice. That being said, I'll reiterate again that the concept of depositum irregulare is a concept from ancient Roman law. Trying to apply it within a modern legal system without a contract is a potential recipe for disaster. If you need a legal solution to this problem (not that you do; I think what you're looking for is a bank), talk to a lawyer who understands modern law, since ancient Roman law isn't applicable to and won't pass muster in a modern-day court.\"",
"title": ""
},
{
"docid": "43cc3e1388828369619c2a9314438375",
"text": "Savings accounts have limitations in case a bank goes belly up and you have a higher amount in the account (more than the insured amount). Mostly big corporations or pension funds cannot rely on a bank to secure their cash but a government bond is secured (with some fine print) and hence they are willing to take negative interest rates.",
"title": ""
},
{
"docid": "301bfdde2a9a2b9e9e1161c2eb7aba16",
"text": "You can't both enforce saving and have access to the money -- from what you say, it's clear that if you can access the money you will spend it. Can you find an account that allows one withdrawal every six months but no more, which should help to cut down on the impulse buys but still let you get at your money in an emergency?",
"title": ""
},
{
"docid": "9bdaaccecc7a6d0050c1aae306971a78",
"text": "\"By protected you mean what exactly? In the US, generally you'd get a promissory note signed by B saying \"\"B promises to repay A such and such amount on such and such terms\"\". In case of default you can sue in a court of law, and the promissory note will be the evidence for your case. In case of B declaring bankruptcy, you'd submit the promissory note to the bankruptcy court to get in line with all the other creditors. Similarly in all the rest of the world, you make a contract, you enforce the contract in courts.\"",
"title": ""
},
{
"docid": "3e3d6a2ce2c219ca85fe488f106792ae",
"text": "\"While you have asked for general principles, I am going to seize onto a specific example you gave in order to illustrate the difficulties here: Argentina. Argentina's bonds are probably not safer than US treasuries. Argentina is presently in the business of seizing foreign oil businesses (Repsol YPF) while championing leftist causes. At the very least this indicates an elevated level of political risk: S&P, which affirmed Argentina's ratings five notches into junk territory at B, said policies such as those enacted since the country's October presidential election could also weaken Argentina's macroeconomic framework and external liquidity... \"\"Actions of this type continue to shorten the economic planning horizon in the country and contribute to Argentina's deteriorating economic and political links with the international community.\"\" -- \"\"S&P Lowers Argentina Outlook To Negative\"\". The Wall Street Journal, 23 April 2012 You're not going to be able to capture that sort of a risk with raw budget numbers. It's hard enough to figure out creditworthiness for a business; for an entire nation it's even harder. That's why credit-rating firms, as faulty as they may be, employ dozens of people to try and figure this sort of thing out. Additionally, there is a currency risk associated with buying bonds denominated in foreign currencies. It doesn't matter much if $nation repays all its bonds if they have so much inflation that the repayment is worth half of what it used to be (nor is it much help if your own nation's currency rises in value while your investment's value is stable elsewhere). Ultimately the value of a bond is \"\"how much money am I actually going to get back?\"\" and while operating a budget surplus isn't a bad sign in and of itself, it's hardly the complete picture. A fair accounting of the relative creditworthiness of any two nations needs to unite two massive fields of study: Macroeconomics and Politics. It is possible that the right sort of degree in economics, risk management, or a similar field of study could prepare you to know exactly what sort of research is necessary to make a meaningful analysis. :) Now, if you just want some commentary on which bonds are safe to buy, ask a credit-rating agency -- for example, read Standard and Poor's sovereign ratings - or find a mutual fund which may invest in international bonds at its own discretion and have someone else make the decisions.\"",
"title": ""
},
{
"docid": "1d0e9fb5f53f1cbe07f842216fc89322",
"text": "\"to answer the question in the title of your post... + convince your fellow Euro nations to accept austerity, + convince them to elect responsible governments, + demand transparency from your leaders, and... + make sure this never ever happens again. Alternatively, build a time machine and go back in time to either... + immigrate to another part of the world, + sabotage the corruption of the PIGS nations, + prevent the formation of a shared currency, or finally, + do something to ensure Germany didn't lose WWII, as letting them be in charge of everybody's money would appear to be a sound financial decision. That is how you negate the impact of the Euro collapsing. Now, on to the details of your question... I believe your initial assessment is correct. If one accountable nation were responsible for the solvency of its currency, it could be trusted indefinitely. As is the case with the Euro, as no one country is directly responsible for it, the less responsible governments are in a race to exploit it as much as possible. Remember, \"\"Spain no es Zimbabwe!\"\" I think Euro zone nations will be lucky if all that comes of this is the fall of the Euro. Wars between nations have been fought over less significant developments than what Greece, Italy and Spain have done to the financial stability of their Euro zone counterparts. Foreign gold trusts, possession of physical precious metals and precious metal ETFs (GLD is one stock ticker of such a fund, although I would look to a similar fund issued by a company with better physical gold audits) can hedge your currency risk. Check with local laws regarding physical possession of gold. In the USA when we left the gold standard for our currency, the government confiscated all privately owned precious metals and raided customer bank security boxes. Assess your own risk of that sort of thing happening.\"",
"title": ""
},
{
"docid": "ea4f6d41989081ee98b66fcdd1343613",
"text": "Quality of life, success and happiness are three factors that are self define by each individual. Most of the time all three factors go hand by hand with your ability to generate wealth and save. Actually, a recent study showed that there were more happy families with savings than with expensive products (car, jewelry and others). These 3 factors, will be very difficult to maintain after someone commit such action. First, because you will fear every interaction with the origin of the money. Second, because every individual has a notion of wrong doing. Third, for the reasons that Jaydles express. Also, most cards, will call you and stop the cards ability to give money, if they see an abusive pattern. Ether, skipping your country has some adverse psychological impact in the family and individual that most of the time 100K is not enough to motivate such change. Thanks for reading. Geo",
"title": ""
},
{
"docid": "44714eb2b7b27e40ad6de9cdbbec0533",
"text": "\"I'll try to give you some clues on how to find an answer to your question, rather than answering directly the question asked. Why not answer it directly? Well, I can, but it won't help you (or anyone else) much in two months when the rates change again. Generally, you won't find such in brick-and-mortar banks. You can save some time and only look at online banks. Examples: ING Direct (CapitalOne), CapitalOne, Amex FSB, E*Trade, Ally, etc. There are plenty. Go to their web sites, look for promotions, and compare. Sometimes you can find coupons/promotions which will yield more than the actual savings rate. For example, ING frequently have a $50 promotion for opening a new account. You need to understand that rates change frequently, and the highest rate account today may become barely average in a week. There are plenty of sites that offer various levels of comparison information. One of the most comprehensive ones (IMHO) is Bankrate.com. Another place to look is MoneyRates.com. These sites provide various comparisons, and you can also find some promotions advertised there. There are more similar sites. Also, search the Internet and you can find various blog posts with additional promotions – frequently banks give \"\"referral bonuses\"\" to provide incentive for clients to promote the banks. Do some due diligence on the results that appear promising. Not much. You won't find any savings account that would keep the value (purchasing power) of your money over the long term. Keeping money in savings accounts is a sure way to lose value because the inflation rate is much higher than even high-yield savings accounts. But, savings accounts are safe (insured by FDIC/NCUA up to the limit), and very convenient to keep short term savings – such as an emergency fund – that you cannot afford to lose to investments. Sometimes you'll get slightly better rates by locking up your money in a Certificate of Deposit (CD), but not significantly higher when the CD is short-term.\"",
"title": ""
},
{
"docid": "404f4c43c7313536978290ab8efe43b7",
"text": "Yes, the US dollar is the standard for all global trade - IMF driven And China has been going for that title for the past decade and this is a very smart and tactical way to do it If this goes through, gold & oil might become really good place to be. The US has been in a supply run and kept the price of oil low. Things are changing quick...",
"title": ""
}
] |
fiqa
|
d97ac382cc64c48761c4ce649bf19cd9
|
Should I invest in the world's strongest currency instead of my home currency?
|
[
{
"docid": "605eb7aa548de18d74c5f4e178dd3731",
"text": "First, currencies are not an investment; they are a medium of exchange; that is, you use currency to buy goods and services and/or investments. The goods and services you intend to buy in your retirement are presumably going to be bought in your country; to buy these you will need your country's currency. The investments you intend to buy now require the currency of whatever country they are located in. If you want to buy shares in Microsoft you need USD; if you want shares in BHP-Billiton you need AUD or GBP (It is traded on two exchanges), if you want property in Kuwait you need KWD and if you want bonds in your country you need IDR. When you sell these later to buy the goods and services you were saving for you need to convert from whatever currency you get for selling them into whatever currency you need to buy. When you invest you are taking on risk for which you expect to be compensated for - the higher the risk you take the better the returns had better be because there is always the chance that they will be negative, right down to losing it all if you are unlucky. There is no 100% safe investment; if you want to make sure you get full value for your money spend it all right now! If you invest overseas then, in addition to all the other investment risks, you are adding currency risk as well. That is, the risk that when you redeem your investments the overseas currency will have fallen relative you your currency. One of the best ways of mitigating risk is diversification; which allows the same return at a lower risk (or a higher return at the same risk). A pure equity portfolio is not diversified across asset classes (hopefully it is diversified across the equities). Equities are a high risk-high yield class; particularly in a developing economy like Indonesia. If you are very young with a decades long investment horizon this may be OK but even then, a diversified portfolio will probably offer better rewards at the same risk. Diversifying into local cash, bonds and property with a little foreign equities, bonds and property will serve you better than worrying about the strength of the IDR. Oh, and pay a professional for some real advice rather than listening to strangers on the internet.",
"title": ""
},
{
"docid": "a3041f3b2f3e082b53a5789066773d5b",
"text": "Currency speculation is a very risky investment strategy. But when you are looking for which currency to denote your savings in, looking at the unit value is quite pointless. What is important is how stable the currency is in the long term. You certainly don't want a currency which is prone to inflation, because it means any savings denoted in that currency constantly lose purchasing power. Rather look for a currency which has a very low inflation rate or is even deflating. Another important consideration is how easy it is to exchange between your local currency and the currency you want to own. A fortune in some exotic currency is worth nothing when no local bank will exchange it into your local currency. The big reserve currencies like US Dollar, Euro, Pound Sterling and Japanes yen are usually safe bets, but there are regional differences which can be easily converted and which can't. When the political relations between your country and the countries which manage these currencies is unstable, this might change over night. To avoid these problems, rather invest into a diverse portfolio of commodities and/or stocks. The value of these kinds of investments will automatically adjust to inflation rate, so you won't need to worry about currency fluctuation.",
"title": ""
},
{
"docid": "615d936fbe8731c2a40bba364141b151",
"text": "A currency that is strong right now is one that is expensive for you to buy. The perfect one would be a currency that is weak now but will get stronger; the worst currency is one that is strong today and gets weak. If a currency stays unchanged it doesn't matter whether it is weak or strong today as long as it doesn't get weaker / stronger. (While this advice is correct, it is useless for investing since you don't know which currencies will get weaker / stronger in the future). Investing in your own currency means less risk. Your local prices are usually not affected by currency change. If you safe for retirement and want to retire in a foreign country, you might consider in that country's currency.",
"title": ""
},
{
"docid": "2fb7b6d8a5c9f61e3a60aebdd6f41562",
"text": "The best thing is to diversify across multiple currencies. USD and EUR seem reliable. But not 100% reliable to keep all your investments in this types of currencies. Invest part of your savings in USD, part - in EUR, and part in your home country's currency. Apart from investing I recommend you to have certain sum in cash and certain on your bank account.",
"title": ""
}
] |
[
{
"docid": "d7541f07a95a913977a15cc8030734b8",
"text": "\"I still don't understand this \"\"analysis.\"\" Even when the US became the world's largest economy in 1880, the British Pound remained the reserve currency of choice until the 1950s, some seventy years later! Investors prefer stability and property rights and the US has both, especially when considering the alternatives, i.e. Euro tax takings on bank deposits in Cyprus. What about the yuan? China may have recently surpassed US economic power, but it is very likely in the midst of a massive credit bubble. China has also been fudging some of their numbers and in many cases, chooses not to keep economic records at all. The fact that many Chinese elites themselves are buying property in Vancouver and the US as a safe harbor also does not bode well for their systemic problems IMO. I'm sticking with the dollar for now.\"",
"title": ""
},
{
"docid": "e0f0da2c0e5a4bfa04bda19efad7eb01",
"text": "There are some ETF's on the Indian market that invest in broad indexes in other countries Here's an article discussing this Be aware that such investments carry an additional risk you do not have when investing in your local market, which is 'currency risk' If for example you invest in a ETF that represents the US S&P500 index, and the US dollar weakens relative to the indian rupee, you could see the value if your investment in the US market go down, even if the index itself is 'up' (but not as much as the change in currency values). A lot of investment advisors recommend that you have at least 75% of your investments in things which are denominated in your local currency (well technically, the same currency as your liabilities), and no more than 25% invested internationally. In large part the reason for this advice is to reduce your exposure to currency risk.",
"title": ""
},
{
"docid": "fe4513005bf90450c2695629c0f31560",
"text": "Taking into account that you are in Cyprus, a Euro country, you should not invest in USD as the USA and China are starting a currency war that will benefit the Euro. Meaning, if you buy USD today, they will be worth less in a couple of months. As for the way of investing your money. Look at it like a boat race, starting on the 1st of January and ending on the 31st of December each year. There are a lot of boats in the water. Some are small, some are big, some are whole fleets. Your objective is to choose the fastest boat at any time. If you invest all of your money in one small boat, that might sink before the end of the year, you are putting yourself at risk. Say: Startup Capital. If you invest all of your money in a medium sized boat, you still run the risk of it sinking. Say: Stock market stock. If you invest all of your money in a supertanker, the risk of it sinking is smaller, and the probability of it ending first in the race is also smaller. Say: a stock of a multinational. A fleet is limited by it's slowest boat, but it will surely reach the shore. Say: a fund. Now investing money is time consuming, and you may not have the money to create your own portfolio (your own fleet). So a fund should be your choice. However, there are a lot of funds out there, and not all funds perform the same. Most funds are compared with their index. A 3 star Morningstar rated fund is performing on par with it's index for a time period. A 4 or 5 star rated fund is doing better than it's index. Most funds fluctuate between ratings. A 4 star rated fund can be mismanaged and in a number of months become a 2 star rated fund. Or the other way around. But it's not just luck. Depending on the money you have available, your best bet is to buy a number of star rated, managed funds. There are a lot of factors to keep into account. Currency is one. Geography, Sector... Don't buy for less than 1.000€ in one fund, and don't buy more than 10 funds. Stay away from Gold, unless you want to speculate (short term). Stay away from the USD (for now). And if you can prevent it, don't put all your eggs in one basket.",
"title": ""
},
{
"docid": "b6f1845980e14e2a771a1640c2189af8",
"text": "\"A general principle in finance is that you shouldn't stick with an investment or situation just because it's how you're currently invested. You can ask yourself the following question to help you think it through: If, instead, I had enough GBP to buy 20000 CHF, would I think it was a good idea to do so? (I'm guessing the answer is probably \"\"no.\"\") This way of thinking assumes you can actually make the exchange without giving someone too big of a cut. With that much money on the line, be sure to shop around for a good exchange rate.\"",
"title": ""
},
{
"docid": "bf5b32f35f7abee59654d27bc3adecab",
"text": "There are legitimate multi currency mutual funds/efts. But I don't think their rate of return will produce the extra money you're looking for any faster than any other kind of investment with comparable risks. To make money fast, you have to accept nontrivial risk of losing money fast, which isn't what you seem to have in mind.",
"title": ""
},
{
"docid": "71973b471b6779c847e78549ccae7fb6",
"text": "Rather than screwing around with foreign currencies, hop over to Germany and open an account at the first branch of Deutsche or Commerzbank you see. If the euro really does disintegrate, you want to have your money in the strongest country of the lot. Edit: and what I meant to say is that if the euro implodes, you'll end up with deutschmarks, which, unlike the new IEP, will *not* need to devalue. (And in the meantime, you've still got euros, so you have no FX risk.)",
"title": ""
},
{
"docid": "3b449602794cc259348a97fddc5cf7f8",
"text": "From a purely financial standpoint, you should invest using whatever dollars get you the best rate. The general rule of thumb that I've come across is that if you are making another person/company change your money into another nation's currency, they will likely charge a higher exchange rate than you could get yourself. However, it really depends on your situation, how easy it is for you to exchange money, what your exchange rate is, and what your broker is charging you to exchange to USD (if on the off chance this is truly nothing, then stick with CAD). Don't worry about the strength of the USD to CAD too much because converting your money before you make purchases doesn't allow you to buy more shares. For the vast majority of people, trying to work with national currency exchange rates makes things unnecessarily complex.",
"title": ""
},
{
"docid": "3f8d64a7173e83e85807bda067af93aa",
"text": "If S&P crashes, these currencies will appreciate. Note that the above is speculation, not fact. There is definitely no guarantee that, say, the CHF/CAD currency pair is inversely linked to the performance of the US stock market when measured in USD, let alone to the performance of the US stock market as measured in CAD. How can a Canadian get exposure to a safe haven currency like CHF and JPY? I don't want a U.S. dollar denominated ETF. Three simple options come to mind, if you still want to pursue that: Have money in your bank account. Go to your bank, tell them that you want to buy some Swiss francs or Japanese yen. Walk out with a physical wad of cash. Put said wad of cash somewhere safe until needed. It is possible that the bank will tell you to come back later as they might not have the physical cash available at the branch office, but this isn't anything really unusual; it is often highly recommended for people who travel abroad to have some local cash on hand. Contact your bank and tell them that you want to open an account denominated in the foreign currency of your choice. They might ask some questions about why, there might be additional fees associated with it, and you'll probably have to pay an exchange fee when transferring money between it and your local-currency-denominated accounts, but lots of banks offer this service as a service for those of their customers that have lots of foreign currency transactions. If yours doesn't, then shop around. Shop around for money market funds that focus heavily or exclusively on the currency area you are interested in. Look for funds that have a native currency value appreciation as close as possible to 0%. Any value change that you see will then be tied directly to the exchange rate development of the relevant currency pair (for example, CHF/CAD). #1 and #3 are accessible to virtually anyone, no large sums of money needed (in principle). Fees involved in #2 may or may not make it a practical option for someone handling small amounts of money, but I can see no reason why it shouldn't be a possibility again in principle.",
"title": ""
},
{
"docid": "1f73dc803fba81d5dfb602b8038cccdb",
"text": "It can be zero or negative given the current market conditions. Any money parked with treasury bonds is 100% risk free. So if I have a large amount of USD, and need a safe place to keep, then in today's environment even the banks (large as well) are at risk. So if I park my money with some large bank and that bank goes bankrupt, my money is gone for good. After a long drawn bankruptcy procedure, I may get back all of it or some of it. Even if the bank does not go bankrupt, it may face liquidity crises and I may not be able to withdraw when I want. Hence it's safer to keep it in Treasury bonds even though I may not gain any interest, or even lose a small amount of money. At least it will be very safe. Today there are very few options for large investors (typically governments and institutional investors.) The Euro is facing uncertainty. The Yuan is still regulated. There is not enough gold to buy (or to store it.) Hence this leads towards the USD. The very fact that USD is safe in today's environment is reflected in the Treasury rates.",
"title": ""
},
{
"docid": "aaf385e8e4cec04116c0701d991180b7",
"text": "I think your approach of looking exclusively at USD deposits is a prudent one. Here are my responses to your questions. 1) It is highly unlikely that a USD deposit abroad be converted to local currency upon withdrawal. The reason for offering a deposit in a particular currency in the first place is that the bank wants to attract funds in this currency. 2) Interest rate is a function of various risks mostly supply and demand, central bank policy, perceived risk etc. In recent years low-interest rate policy as led by U.S., European and Japanese central banks has led particularly low yields in certain countries disregarding their level of risk, which can vary substantially (thus e.g. Eastern Europe has very low yields at the moment in spite of its perceived higher risk). Some countries offer depository insurance. 3) I would focus on banks which are among the largest in the country and boast good corporate governance i.e. their ownership is clean and transparent and they are true to their business purpose. Thus, ownership is key, then come financials. Country depository insurance, low external threat (low war risk) is also important. Most banks require a personal visit in order to open the account, thus I wouldn't split much further than 2-3 banks, assuming these are good quality.",
"title": ""
},
{
"docid": "584e97bf18950c72068556fa29320d5b",
"text": "You are not missing something basic. Putting money in the bank will cost you in terms of purchasing power. The same thing has been true in the US and other places for a long time now. The real interest rate is negative--there is too much aggregate wealth being saved compared to the number of profitable lending opportunities. That means any truly risk-free investment will not make as much money as you will lose to inflation. If the real interest rate appears to be positive in your home country it means one of the following is happening: Capital controls or other barriers are preventing foreigners from investing in your home country, keeping the interest rate there artificially high Expected inflation is not being measured very accurately in your home country Inflation is variable and unpredictable in your home country, so investors are demanding high interest rates to compensate for inflation risk. In other words, bank accounts are not risk-free in your home country. If you find any securities that are beating inflation, you can bet they are taking on risk. Investing in risky securities is fine, but just understand that it's not a substitute for a risk-free bank account. Part of every interest rate is compensation for the time-value-of-money and the rest is compensation for risk. At present, the global time-value-of-money is negative.",
"title": ""
},
{
"docid": "be5a343ff06889ca387adaed1aed3f15",
"text": "From an investor's standpoint, if the value of crude oil increases, economies that are oil dependent become more favourable (oil companies will be more profitable). Therefore, investors will find that country's currency more attractive in the foreign exchange market.",
"title": ""
},
{
"docid": "9b58296e546e1efce9613746b1a82bd7",
"text": "Yes. But the question is do you want to have gold? If you are going to buy gold anyway, and if you can get a good conversion rate between USD:gold, then why not? If you are looking to use your earnings on things that you cannot buy using gold, then I'd recommend you take USD instead. Have fun!",
"title": ""
},
{
"docid": "e27b4d067c78c5636685afe87425080c",
"text": "No. The long-term valuation of currencies has to do with Purchasing Power Parity. The long-term valuation of stocks has to do with revenues, expenses, market sizes, growth rates, and interest rates. In the short term, currency and stock prices change for many reasons, including interest rate changes, demand for goods and services, asset price changes, political fears, and momentum investing. In any given time window, a currency or stock might be: The Relative Strength Index tries to say whether a currency or stock has recently been rising or falling; it does not inherently say anything about whether the current value is high or low.",
"title": ""
},
{
"docid": "51876fb7fa8f2f1b1c5fc654650a5ef4",
"text": "The other obvious suggestion I guess is to buy cheap stocks and bonds (maybe in a dollar denominated fund). If the US dollar rises you'd then get both the fund's US gains plus currency gains. However, no guarantee the US dollar will rise or when. Perhaps a more prudent approach is to simply diversify. Buy both domestic and foreign stocks and bonds. Rebalance regularly.",
"title": ""
}
] |
fiqa
|
b56c0bfde6b70598f571fd5817595234
|
Can the Securities Investor Protection Corporation (SIPC) itself go bankrupt?
|
[
{
"docid": "a97a55ff1d603849bb7ca369e42394b4",
"text": "\"SIPC is a corporation - a legal entity separate from its owners. In the case of SIPC, it is funded through the fees paid by its members. All the US brokers are required to be members and to contribute to SIPC funds. Can it go bankrupt? Of course. Any legal entity can go bankrupt. A person can go bankrupt. A country can go bankrupt. And so can anything in between. However, looking at the history of things, there are certain assumptions that can be made. These are mere guesses, as there's no law about any of these things (to the best of my knowledge), but seeing how things were - we can try and guess that they will also be like this in the future. I would guess, that in case of a problem for the SIPC to meet its obligation, any of the following would happen (or combinations): Too big to fail - large insurance companies had been bailed out before by the governments since it was considered that their failure would be more destructive to the economy than the bailout. AIG as an example in the US. SIPC is in essence is an insurance company. So is Lloyd's of London. Breach of trust of the individual investors that can lead to a significant market crash. That's what happened in the US to Fannie Mae and Freddie Mac. They're now \"\"officially\"\" backed by the US government. If SIPC is incapable of meeting its obligation, I would definitely expect the US government to step in, even though there's no such obligation. Raising funds through charging other members. If the actuary calculations were incorrect, the insurance companies adjust them and raise premiums. That is what should happen in this case as well. While may not necessarily solve a cashflow issue, in the long term it will allow SIPC to balance, so that bridge loans (from the US government/Feds/public bonds) could be used in between. Not meeting obligations, i.e.: bankruptcy. That is an option, and insurance companies have gone bankrupt before. Not unheard of, but from the past experience - again, I'd expect the US government to step in. In general, I don't see any significant difference between SIPC in the US and a \"\"generic\"\" insurance coverage elsewhere. Except that in the US SIPC is mandatory, well regulated, and the coverage is uniform across brokerages, which is a benefit to the consumer.\"",
"title": ""
},
{
"docid": "2ef4857918552045209a4b65c1bdbf03",
"text": "Not sure if I follow your question completely. Re: What if some fraud takes place that's too big even for it to fund? SIPC does not fund anything. What it does is takes over the troubled brokerage firm, books / assets and returns the money faster. Refer to SIPC - What SIPC Covers... What it Does Not and more specifically SIPC - Why We Are Not the FDIC. SIPC is free for ordinary investors. To get the same from elsewhere one has to pay the premium. Edit: The event we are saying is a large brokrage firm, takes all of the Margin Money from Customer Accounts and loses it and also sell off all the stocks actually shown as being held in customer account ... that would be to big. While its not clear as to what exactly will happens, my guess is that the limits per customers will go down as initial payments. Subsequent payments will only be done after recover of funds from the bankrupt firm. What normally happens when a brokrage firm goes down is some of the money from customers account is diverted ... stocks are typically safe and not diverted. Hence the way SIPC works is that it will give the money back to customer faster to individuals. In absence of SIPC individual investors would have had to fight for themselves.",
"title": ""
}
] |
[
{
"docid": "69980f8b29a899f4299b650eabfd8e83",
"text": "Um, wut? It took a failure for the SIFI to be defined in the first place. It took the failure of Lehman and Bear Stearns for the US goverments to actively attempt precluding *any more failures* of what were yet-to-be-called, SIFI's. Is this really such a hard concept to grasp? Largely unforeseen failure first, further failure avoidance second.",
"title": ""
},
{
"docid": "24e7fcdfb6bcd46bf5f29fde5e5fd71d",
"text": "\"Of course, doing nothing would mean that Social Security won't be able to meet its full obligations two decades from now. But it's not going bankrupt. Bankrupt, as defined in Oxford English Dictionary: \"\"[U]nable to pay outstanding debts.\"\" Am I missing something?\"",
"title": ""
},
{
"docid": "9847099de65fe2eb86b26c98f0d179cb",
"text": "I don't know about the liquidation. The capital doesn't evaporate, its source just becomes the corporation itself. The corporation becomes the sole shareholder and acts at the behest of the board. The board then decides both board matters and shareholder matters. Once I talked that through, I realized no one would do this. If the board is in complete control, why clump the ownership together. The directors would be better served by clearly delineating their ownership interests by purchasing shares directly.",
"title": ""
},
{
"docid": "cd64e0364d2155994fb14edafa14b040",
"text": "You should ensure that your broker is a member of the Securities Investor Protection Corporation (SIPC). SIPC protects the cash and securities in your brokerage account much like the Federal Deposit Insurance Corporation (FDIC) protects bank deposits. Securities are protected with a limit of $500,000 USD. Cash is protected with a limit of $250,000 USD. It should be noted that SIPC does not protect investors against loss of value or bad advice. As far as having multiple brokerage accounts for security, I personally don’t think it’s necessary to have multiple accounts for that reason. Depending on account or transaction fees, it might not hurt to have multiple accounts. It can actually be beneficial to have multiple accounts so long as each account serves a purpose in your overall financial plan. For example, I have three brokerage accounts, each of which serves a specific purpose. One provides low cost stock and bond transactions, another provides superior market data, and the third provides low cost mutual fund transactions. If you’re worried about asset security, there are a few things you can do to protect yourself. I would recommend you begin by consulting a qualified financial advisor about your risk profile. You stated that a considerable portion of your total assets are in securities. Depending on your risk profile and the amount of your net worth held in securities, you might be better served by moving your money into lower risk asset classes. I’m not an attorney or a financial advisor. This is not legal advice or financial advice. You can and should consult your own attorney and financial advisor.",
"title": ""
},
{
"docid": "c7238a79b7b4178cf71c34c008b89d9d",
"text": "You can avoid companies that might go bankrupt by not buying the stock of companies with debt. Every quarter, a public company must file financials with the EDGAR system called a 10-Q. This filing includes unaudited financial statements and provides a continuing view of the company's financial position during the year. Any debt the company has acquired will appear on this filing and their annual report. If servicing the debt is costing the company a substantial fraction of their income, then the company is a bankruptcy risk.",
"title": ""
},
{
"docid": "e5c96d25cabfb16b086f42e029b0ba1a",
"text": "\"Not entirely. For a creditor to go after the \"\"parent company\"\" in one of these cases requires the courts to be willing to \"\"pierce the corporate veil\"\" (in legal parlance). Typically this is only done if the parent company set up the wholly-owned-subsidiary in order to perpetrate a fraud. In this case, the subsidiary has a totally legitimate function - to sequester risk. While you're right that the parent company may have to offer some form of credit guarantees to get the subsidiary to get a loan, often those guarantees still don't create nearly as much exposure for the parent company.\"",
"title": ""
},
{
"docid": "fea1f03de6ce51af347954ec5a54b9f5",
"text": "The S.E.C. is just a training camp for financial consultants hired by CEOs of multinational firms. Remember how many people were sent to jail after the financial collapse and the housing bubble? That's about how many you can expect to go to jail this time, too. The worst that will happen is minor fines dwarfed by the amount of money made in any illegal activity that may have occurred. It isn't so much that government has any real problem with white-collar financial crime per se; they just want to make sure they get a cut.",
"title": ""
},
{
"docid": "7f0b2035b9854c22bee04b280dbc32aa",
"text": "You should double-check what it means to be in [Chapter 11](http://en.wikipedia.org/wiki/Chapter_11,_Title_11,_United_States_Code) Yes, by filing for bankruptcy, the company gets some protection from creditors and some of their investment dries up, but it's the owners who take it on the nose first. Also, individuals can file for Chapter 11, too. It's not just corporations.",
"title": ""
},
{
"docid": "a7d9132f205e3cc966b4f2f0534c76c4",
"text": "Technically, of course. Almost any company can go bankrupt. One small note: a company goes bankrupt, not its stock. Its stock may become worthless in bankruptcy, but a stock disappearing or being delisted doesn't necessarily mean the company went bankrupt. Bankruptcy has implications for a company's debt as well, so it applies to more than just its stock. I don't know of any historical instances where this has happened, but presumably, the warning signs of bankruptcy would be evident enough that a few things could happen. Another company, e.g. another exchange, holding firm, etc. could buy out the exchange that's facing financial difficulty, and the companies traded on it would transfer to the new company that's formed. If another exchange bought out the struggling exchange, the shares of the latter could transfer to the former. This is an attractive option because exchanges possess a great deal of infrastructure already in place. Depending on the country, this could face regulatory scrutiny however. Other firms or governments could bail out the exchange if no one presented a buyout offer. The likelihood of this occurring depends on several factors, e.g. political will, the government(s) in question, etc. For a smaller exchange, the exchange could close all open positions at a set price. This is exactly what happened with the Hong Kong Mercantile Exchange (HKMex) that MSalters mentioned. When the exchange collapsed in May 2013, it closed all open positions for their price on the Thursday before the shutdown date. I don't know if a stock exchange would simply close all open positions at a set price, since equity technically exists in perpetuity regardless of the shutdown of an exchange, while many derivatives have an expiration date. Furthermore, this might not be a feasible option for a large exchange. For example, the Chicago Mercantile Exchange lists thousands of products and manages hundreds of millions of transactions, so closing all open positions could be a significant undertaking. If none of the above options were available, I presume companies listed on the exchange would actively move to other, more financially stable exchanges. These companies wouldn't simply go bankrupt. Contracts can always be listed on other exchanges as well. Considering the high level of mergers and acquisitions, both unsuccessful and successful, in the market for exchanges in recent years, I would assume that option 1 would be the most likely (see the NYSE Euronext/Deutsche Börse merger talks and the NYSE Euronext/ICE merger that's currently in progress), but for smaller exchanges, there is the recent historical precedent of the HKMex that speaks to #3. Also, the above answer really only applies to publicly traded stock exchanges, and not all stock exchanges are publicly-held entities. For example, the Shanghai Stock Exchange is a quasi-governmental organization, so I presume option 2 would apply because it already receives government backing. Its bankruptcy would mean something occurred for the government to withdraw its backing or that it became public, and a discussion of those events occurring in the future is pure speculation.",
"title": ""
},
{
"docid": "beb1fdddf8e9c18e2038837e823bed0d",
"text": "In the United States, the Securities Investor Protection Corporation protects the first $500,000 you have at a brokerage including up to $250,000 in cash. This means that if the firm holding your securities fails financially, you have some coverage. That insurance does not prevent your investment itself from losing money. Even traditionally save money market funds can potentially lose value in a situation called Breaking the buck. This means that the Net Asset Value of the fund falls below $1/share. Alas, during periods of market calamity, even traditionally safe stores of value are subject to increased risk.",
"title": ""
},
{
"docid": "a62c1a1a6e6730478c6baf65f0c70e36",
"text": "\"If Illinois cannot go bankruptcy This is missing a few, very important words, \"\"...under current law.\"\" The United States changed the law so as to allow Puerto Rico to go into a form of bankruptcy. So you cannot rely on a lack of legal support for bankruptcy to protect any bond investments you might make in Illinois. It is entirely possible for the federal government to add a law enabling a state to discharge its debts through a bankruptcy process. That's why the bonds have been downgraded. They are still fine now, but that could change at any time. I don't want to dive too deep into the politics on this stack, but I could quite easily see a bargain between US President Donald Trump and Democrats in Congress where he agreed to special privileges for pension debts owed to former employees in exchange for full discharge of all other debts. That would lead to a complete loss of value for the bonds that you are considering. There still seem to be other options now, but they seem to be getting closer and closer to that.\"",
"title": ""
},
{
"docid": "3732c03ce8f43f586a8a38188d3be293",
"text": "This sounds like a crazy idea, but in reality people don't make the wisest decisions when considering bankruptcy in Australia. My suggestion would be to get some advice from an insolvency specialist.",
"title": ""
},
{
"docid": "489e404056f757fa10948fe9ba49e6e7",
"text": "I know folks who have had two personal (chap. 7 both times) bankruptcies in the U.S., including one after the bankruptcy reforms of a few years ago. I did have the 10-year thing wrong, though. It's once every eight years for a chap. 7 liquidation, and once every six years for Chap. 13 restructuring.",
"title": ""
},
{
"docid": "691830ea6b7e3ffbb4cf2dd14adc9f17",
"text": "If it were possible to take a loan out for a SIPP investment in the future .. I would suggest having an equivalent invested amount already in an ISA .. simply to cover you in the event of a job loss including additional cash in a deposit account. Secondly .. to increase your chances of success with this strategy I would also suggest doing this when the odds are more in your favour during the bottoming out cycle of a market crash. Thirdly .. it depends on how knowledgeable you are about investment , I would suggest being invested globally & in many different sectors to take advantage of various price movements.",
"title": ""
},
{
"docid": "b215c30565d3c958d20c8f7396cc7cc7",
"text": "> Are you saying that OP was just unlucky because he didn't realize that forex wasn't covered under SIPC? Pretty much. Opening an investing account has tons of T&C. You're not going to read every single bit of it.",
"title": ""
}
] |
fiqa
|
d834c1c4bdc00b19b52efaf78128cea3
|
What forces cause a company to write down goodwill?
|
[
{
"docid": "7a01acf95a353dcd5c011f4163d3d225",
"text": "To understand the answer we first have to understand what Goodwill is. Goodwill in a companies balance sheet is an intangible asset that represents the extra value because of a strong brand name, good customer relations, good employee relations and any patents or proprietary technology. An article from The Economist explains this very well and actually talks about Time Warner directly - The goodwill, the bad and the ugly When one firm buys another, the target’s goodwill—essentially the premium paid over its book value—is added to the combined entity’s balance-sheet. Goodwill and other intangibles on the books of companies in the S&P 500 are valued at $2.6 trillion, or 10% of their total assets, according to analysts at Goldman Sachs. As the economy deteriorates and more firms trade down towards (or even below) their book value, empire-builders are having to mark down the value of assets they splashed out on in rosier times. A recently announced $25 billion goodwill charge is expected to push Time Warner into an operating loss for 2008, for instance. Michael Moran of Goldman Sachs thinks such hits could amount to $200 billion or more over the cycle. Investors have so far paid little attention to intangibles, but as write-downs proliferate they are likely to become increasingly wary of industries with a high ratio of goodwill to assets, such as health care, consumer goods and telecoms. How bad things get will depend on the beancounters. American firms used to be allowed to amortise goodwill over many years. Since 2002, when an accounting-rule change ended that practice, goodwill has had to be tested every year for impairment. In this stormy environment, with auditors keener than ever to avoid being seen to go easy on clients, companies are being told to mark down assets if there is any doubt about their value. The sanguine point out that this has no effect on cashflow, since such charges are non-cash items. Moreover, some investors take goodwill write-offs with a pinch of salt, preferring to look past such non-recurring costs and accept the higher “normalised” earnings numbers to which managers understandably cling. The largest companies are thus able to survive thumping blows that might otherwise floor them, such as the $99 billion loss that the newly formed but ill-conceived AOL Time Warner, as it then was, reported for 2002. But the impact can be all too real, as write-downs reduce overall book value and increase leverage ratios, a particular concern in these debt-averse times.",
"title": ""
}
] |
[
{
"docid": "0fabf85cd931ba89b9c27fcb7b04bb9b",
"text": "\"To my knowledge, there's no universal equation, so this could vary by individual/company. The equation I use (outside of sentiment measurement) is the below - which carries its own risks: This equations assumes two key points: Anything over 1.2 is considered oversold if those two conditions apply. The reason for the bear market is that that's the time stocks generally go on \"\"sale\"\" and if a company has a solid balance sheet, even in a downturn, while their profit may decrease some, a value over 1.2 could indicate the company is oversold. An example of this is Warren Buffett's investment in Wells Fargo in 2009 (around March) when WFC hit approximately 7-9 a share. Although the banking world was experiencing a crisis, Buffett saw that WFC still had a solid balance sheet, even with a decrease in profit. The missing logic with many investors was a decrease in profits - if you look at the per capita income figures, Americans lost some income, but not near enough to justify the stock falling 50%+ from its high when evaluating its business and balance sheet. The market quickly caught this too - within two months, WFC was almost at $30 a share. As an interesting side note on this, WFC now pays $1.20 dividend a year. A person who bought it at $7 a share is receiving a yield of 17%+ on their $7 a share investment. Still, this equation is not without its risks. A company may have a solid balance sheet, but end up borrowing more money while losing a ton of profit, which the investor finds out about ad-hoc (seen this happen several times). Suddenly, what \"\"appeared\"\" to be a good sale, turns into a person buying a penny with a dollar. This is why, to my knowledge, no universal equation applies, as if one did exist, every hedge fund, mutual fund, etc would be using it. One final note: with robotraders becoming more common, I'm not sure we'll see this type of opportunity again. 2009 offered some great deals, but a robotrader could easily be built with the above equation (or a similar one), meaning that as soon as we had that type of environment, all stocks fitting that scenario would be bought, pushing up their PEs. Some companies might be willing to take an \"\"all risk\"\" if they assess that this equation works for more than n% of companies (especially if that n% returns an m% that outweighs the loss). The only advantage that a small investor might have is that these large companies with robotraders are over-leveraged in bad investments and with a decline, they can't make the good investments until its too late. Remember, the equation ultimately assumes a person/company has free cash to use it (this was also a problem for many large investment firms in 2009 - they were over-leveraged in bad debt).\"",
"title": ""
},
{
"docid": "abddbd847efa0c61c2eeaf68bb22a483",
"text": "OK, looking at the balance sheet they have $42M in cash, but that is down from $325M in December. Meanwhile their debt has increased from $1.756B in December to $1.832B as of June so their net cash has dropped by $355M in only 6 months. It looks like they spent $329M (give or take) buying other companies in those 6 months. Otherwise their working capital (an important measure of the ability to run the business) looks OK at $230M. Looking at the income statement, they are making money: $70.6M in the last quarter on revenue of $226.7M, which is quite remarkable however they had an unusual item which increased earnings somewhat. Otherwise their earnings would have been about $39M, which is still pretty healthy. All in, the company itself looks healthy and on a bit of a buying binge, growing through acquisition. I don’t like the debt load but that is probably usual for the industry. When companies grow through acquisition they generally plan to reduce total employment because of redundancies because you sort of get economies of scale. This usually factors into the decision to buy the company: you increase revenues through the purchase and reduce costs by eliminating employees. This is typically how they “sell” an acquisition to investors. If I was to guess (and it would only be a guess) this company has a team which looks at the employees of the company it just bought and decides where to downsize. It may not downsize from the newly acquired company but from its own existing employees for a variety of reasons. So most likely that is what you were a victim of: it wasn’t because the company was struggling, or because you were necessarily not a good employee. It is a process, albeit sometimes unfair, and you were a victim of it. The layoff decisions are not always prudent and it can be hard to understand why a particular group was cut instead of another one. Management doesn’t always make the right call. The broadcast industry has been going through consolidation (companies buying companies) for some time now. Most likely management is hoping to “bulk up” to make it harder for another company to buy it and/or to get a better price when it is bought. So in summary, most likely they are doing this for reasons of greed, ie, they’ll make more money with fewer employees. Sorry about your situation.",
"title": ""
},
{
"docid": "fe6bc779bbc88c442ac003d44cff045a",
"text": "You guys seem to have forgotten the most important part of this equation ... i work for a bank and I can tell u this as a painful fact ... every business is governed by its paperwork ... articles bylaws operating agreements amendments and minutes .. if a companys paperwork says that the 51% owner can fire everyone and move to Alaska and that paperwork is proper (signed and binding) it is with minimal excavation law... case in point every company is different .. and it is formed and governed by its paperwork.",
"title": ""
},
{
"docid": "2a8a9a1bbaef5f80d1d041669c1399c3",
"text": "\"Can anyone explain why the analyst is writing off goodwill, please? I would have thought that the HP brand would be worth something for some years to come, that some section of the market will continue saying \"\"well, it's an HP laptop, it must be decent quality\"\" and \"\"you can rely on HP printers\"\" for the foreseeable future. Or is that something else?\"",
"title": ""
},
{
"docid": "d7757af949d34fb59fec0397d70582f1",
"text": "\"The difficulty is that you are thinking of a day as a natural unit of time. For some securities the inventory decisions are less than a minute, for others, it can be months. You could ask a similar question of \"\"why would a dealer hold cash?\"\" They are profit maximizing firms and, subject to a chosen risk level, will accept deals that are sufficiently profitable. Consider a stock that averages 1,000 shares per day, but for which there is an order for 10,000 shares. At a sufficient discount, the dealer would be crazy not to carry the order. You are also assuming all orders are idiosyncratic. Dividend reinvestment plans (DRIP) trigger planned purchases on a fixed day, usually by averaging them over a period such as 10 days. The dealer slowly accumulates a position leading up to the date whenever it appears a good discount is available and fills the DRIP orders out of their own account. The dealer tries to be careful not to disturb the market leading up to the date and allows the volume request to shift prices upward and then fills them.\"",
"title": ""
},
{
"docid": "e86e3e5d05fe804123b83e08af271ecb",
"text": "If this is a publicly traded company, I'd be thinking the shareholders should take a long hard look at this. This is a man who hates his employees more than he likes money. A spite-based decision is obviously going to be inferior to a money-based decision. And shareholders want money.",
"title": ""
},
{
"docid": "6f35493317b0fa9767a0827ede4a4505",
"text": "I appreciate it. I didn't operate under selling the asset year five but other than that I followed this example. I appreciate the help. These assignments are just poorly laid out. Financial management also plays on different calculation interactions so it is difficult for me to easily identify the intent at times. Thanks again.",
"title": ""
},
{
"docid": "4c3533a0299064bf878acac048095187",
"text": "The primary drivers of cash flow in a software firm is the productivity and skill of your employees. How is that reflected in a balance sheet? Well, take a company like Adobe or Salesforce, or even Microsoft. What would you be able to tell about each from their balance sheets? You can look at their cash level, and what else would matter?",
"title": ""
},
{
"docid": "8d2807c840985b9088a4bab68077ea99",
"text": "\"I heard today while listening to an accounting podcast that a balance sheet... can be used to determine if a company has enough money to pay its employees. The \"\"money\"\" that you're looking at is specifically cash on the balance sheet. The cash flows document mentioned is just a more-finance-related document that explains how we ended at cash on the balance sheet. ...even looking for a job This is critical, that i don't believe many people look at when searching for a job. Using the ratios listed below can (and many others), one can determine if the business they are applying for will be around in the next five years. Can someone provide me a pair of examples (one good)? My favorite example of a high cash company is Nintendo. Rolling at 570 Billion USD IN CASH ALONE is astonishing. Using the ratios we can see how well they are doing. Can someone provide me a pair of examples (one bad)? Tesla is a good example of the later on being cash poor. Walk me though how to understand such a document? *Note: This question is highly complex and will take months of reading to fully comprehend the components that make up the financial statements. I would recommend that this question be posted completely separate.\"",
"title": ""
},
{
"docid": "2b3c158f5defdeaf2d702e47a703246d",
"text": "Well it would appear that you had a wash sale that canceled out a loss position. Without seeing the entire report, I couldn't tell you exactly what was happening or how you triggered § 1091. But just from the excerpted images, it appears as though your purchase of stock was layered into multiple tranches - perhaps you acquired more of the stock in the 61-day period than you sold (possibly because of a prior holding). If in the 61-day period around the sale of stock (30 days before and 30 days after), you also acquire the same stock (including by contract or option), then it washes out your loss. If you held your stock for a while, then in a 61-day period bought more, and sold some, then any loss would be washed out by the acquisition. Of course it is also a wash sale if your purchase of the stock follows your sale, rather than precedes it. Your disallowed loss goes into the basis of your stock holding, so will be meaningful when you do have a true economic sale of that stock. From IRS Pub 550: A wash sale occurs when you sell or trade stock or securities at a loss and within 30 days before or after the sale you: Buy substantially identical stock or securities, Acquire substantially identical stock or securities in a fully taxable trade, Acquire a contract or option to buy substantially identical stock or securities, or Acquire substantially identical stock for your individual retirement account (IRA) or Roth IRA. If you sell stock and your spouse or a corporation you control buys substantially identical stock, you also have a wash sale. Looking at your excerpted account images, we can see a number of positions sold at a loss (sale proceeds less than basis) but each one is adjusted to a zero loss. I suspect the fuller picture of your account history and portfolio will show a more complicated and longer history with this particular stock. That is likely the source of the wash sale disallowed loss notations. You might be able to confirm that all the added numbers are appearing in your current basis in this stock (or were reflected upon your final exit from the stock).",
"title": ""
},
{
"docid": "17fa3756f29015c0cd0ca5a37ed40fd6",
"text": "The reason is because there's basically no incentive for anyone to not be unrealistically optimistic (aka lie). The management wants to show its being active so they aren't replaced. The IB trying to sell a company wants to make it look as good as possible. The bank providing a loan for the acquisition needs to make it look good for their risk committee, so they won't try to sour down the claims in the CIM too much. The acquired company would rather make more money than less. The only person who loses is the shareholder. It's an agency problem.",
"title": ""
},
{
"docid": "009fcc2fa640129a3c1b7c43fbab0ea5",
"text": "\"As you pointed out in reference to cost-cutting, fiduciary lawsuits come out when things go wrong. When directors successfully increase stock value, everyone including shareholders is happy. I'm not sure exactly where the best place is to look for such cases, but here's what my google-fu yielded: * [Example 1](http://www.nytimes.com/1993/11/25/business/the-media-business-excerpts-from-ruling-in-paramount-case.html): Paramount is sold to Viacom at a lower price than QVC's offer, shareholders sue. Paramount claims they were looking out for long-term but shareholders sued them for screwing them out of maximal share value. * [Example 2](http://www.professorbainbridge.com/professorbainbridgecom/2012/05/case-law-on-the-fiduciary-duty-of-directors-to-maximize-the-wealth-of-corporate-shareholders.html): Dodge v. Ford Motor Co, Ford had a majority share in his company and wanted to stop paying dividends to shareholders so he could expand his business. At trial Ford \"\"testified to his belief that the company made too much money and had an obligation to benefit the public and the firm’s workers and customers.\"\" The court disagreed, as his motor company was set up for profit, not charity. Ford was ordered to resume paying dividends. Interestingly I found many more lawsuits where corporations sacrificed long-term for short-term. It seems once incorporated this is where the internal incentives and pressures lead many managers, lawsuits are merely one of these pressures.\"",
"title": ""
},
{
"docid": "69ecd756d26ab41775af6aef6f9aa581",
"text": "P/E is the number of years it would take for the company to earn its share price. You take share price divided by annual earnings per share. You can take the current reported quarterly earnings per share times 4, you can take the sum of the past four actual quarters earnings per share or you can take some projected earnings per share. It has little to do with a company's actual finances apart from the earnings per share. It doesn't say much about the health of a company's balance sheet, and is definitely not an indicator for bankruptcy. It's mostly a measure of the market's assumptions of the company's ability to grow earnings or maintain it's current earnings growth. A share price of $40 trading for a P/E ratio of 10 means it will take the company 10 years to earn $40 per share, it means there's current annual earnings per share of $4. A different company may also be earning $4 per share but trade at 100 times earnings for a share price of $400. By this measure alone neither company is more or less healthy than the other. One just commands more faith in the future growth from the market. To circle back to your question regarding a negative P/E, a negative P/E ratio means the company is reporting negative earnings (running at a loss). Again, this may or may not indicate an imminent bankruptcy. Increasing balance sheet debt with decreasing revenue and or earnings and or balance sheet assets will be a better way to assess bankruptcy risk.",
"title": ""
},
{
"docid": "36a2251f0e3038728874ef6f3cf0ad31",
"text": "My grandfather owned a small business, and I asked him that very question. His answer was that year-end closeout is very time-consuming, both before and after EOY (end of year), and that they didn't want to do all that around Christmas and New Year.",
"title": ""
},
{
"docid": "9e9c9cec3c9de303788378a493ed49f9",
"text": "The 10-K language is very specific. And as someone that has worked w/ securities attorneys to write these things, I know it is worded like that for a reason. Regardless, to have that risk factor in there and not disclose executives leaving is really shoddy disclosure.",
"title": ""
}
] |
fiqa
|
f9bfa5d892dfb41f8e7dfb2799180eec
|
Is a fixed-price natural gas or electricity contract likely to save money?
|
[
{
"docid": "6caeee28e88fa3a9cd3c721fa8fe9df8",
"text": "In my area, the fixed prices are based on an average. My gas company will look at my previous months (six months if I remember correctly) payments and give me an average based on that amount. Then I am contracted for a year based on that average. If I lower my costs, I'm under contract and will not see the savings but if I go over for some reason, I will save money there. It really depends on how your utility companies work so I would check with them, look at your previous billing cycles and determine if the plan will possibly save you money. Of course some things can't be planned for such as the economic downturn like someone else mentioned.",
"title": ""
},
{
"docid": "2b35780cda789898ec37a6d9718bbd5f",
"text": "I can only speak to natural gas but I imagine the answer for electricity is the same. In general, yes, it is better to lock into a fixed price contract as in the long run, natural gas prices increase over time. However, if you locked (signed a fixed price contract) in prior to the economic downturn, most likely you were better off not doing so but the key is long-term. http://en.wikipedia.org/wiki/Natural_gas_prices However, do your research as fixed priced contracts vary considerably from company to company. http://www.energyshop.com/ I think it's a good time to sign a fixed-term contract right now as I don't see prices coming down much further with global economies are now recovering from the downturn. HTH",
"title": ""
},
{
"docid": "1d43ec87c2efba1b4b46326580734644",
"text": "\"I have some numbers to share that may help. I've been tracking my home's natural gas consumption in a spreadsheet for years. Much of that time I'd only been interested in the quantity used – to measure my home's efficiency after certain upgrades – but in 2006 I also started tracking the \"\"Gas Supply Charge\"\" costs from my local utility, Enbridge, in Ontario, Canada. My numbers are for the gas commodity only (i.e. excluding delivery and customer charges.) I've never been on a fixed-price contract, so the numbers are supposed to be reflective of market rates. However, the numbers do differ from real \"\"spot prices\"\" because Enbridge estimates gas costs up-front and then applies a \"\"gas cost adjustment\"\" at later dates if their estimate was wrong. Natural gas cost per cubic meter for Chris's home http://img686.imageshack.us/img686/6406/naturalgascosts3priorye.png Since 2006, natural gas prices have been generally falling. The last cost I have on file, from my November 2009 bill, is 12.9 cents per cubic meter – being ~20 cents gas supply rate, less gas cost adjustment of ~7 cents. My average cost over that nearly 4 year period, January 2006 through November 2009, was 38.4 cents per cubic meter. Considering the current 5-year fixed rate I found is about 29 cents per cubic meter, there is a substantial premium to locking in when compared to current market rates. However, one can see that during the last 4 years, market prices did substantially exceed that rate for quite some time. Furthermore, when I last looked at those 5-year fixed rates perhaps a year or more ago, I couldn't find a company charging less than 39 cents per cubic meter. So, contract rates have fallen as well. Consequently, if we are at a natural gas price low and the economy is to recover, I tend to agree with Cart's answer and suggest it could be a good time to consider a fixed-rate contract. But, do your own due diligence and read the fine print if you go for it. UPDATE: In the interest of full disclosure, shortly after I did my own research above, I signed up for my first ever fixed-rate natural gas contract. :-)\"",
"title": ""
},
{
"docid": "65f94da30a427513f22bf182ec06cc63",
"text": "\"The answer to this question will vary considerably by state and how utilities are regulated in your area. In New York, ESCOs (Energy Supply Companies) are almost always a ripoff for consumers versus the old-style regulated utility (in NY the utility supply markups are tightly regulated, but ESCOs are less regulated). You also need to really understand the marketplace rules for \"\"locking in\"\" a price. If you can lock in the July price for natural gas for a year, that rocks. There are other factors as well. But even then its a real bet, since weather and supply factors can have a dramatic effect on gas prices in the winter. IMO, the best bet is to run with the market rates and bank the efficiency improvements that you build into your home over time. Some utilities offer \"\"budget plans\"\" that smooth out your payments without interest -- I'd recommend that route if predictable bills are your goal.\"",
"title": ""
},
{
"docid": "ceb7d010ff8aba426f67c1921cd9e779",
"text": "I would argue: Because the company only offers you this if it can make money from it. What you are basically doing is betting against the company.",
"title": ""
}
] |
[
{
"docid": "6d247b072578c57f4a301eeeaf357a4b",
"text": "It's not mentioned in the article, but the state will invariably pay for infrastructure upgrades and maintenance around a project like this. The only way this pays off is if the tax revenue generated is enough to pay for any additional expenditure by the state. And the fact that Foxconn has a track record of not living up to its promises is what prevents this from being a no-brainer. We'll need to revisit the topic in 15 years when this deal has reached its conclusion to know if the gamble was worth it. The thing that is working to Foxconn's advantage here is that there were several states competing for this.",
"title": ""
},
{
"docid": "64bc39d668df90dfd1d51e53c0200cf6",
"text": "The real benefit to the environment will come as the grid is powered by more renwables. Tesla will charge when renwables are generating, store power in its big battery, and feed energy back to the grid during times of high demand or when renewable sources are down",
"title": ""
},
{
"docid": "6ab5057a6bbe10ed483b0dd26d3db538",
"text": "Are you assuming that net metering will continue forever? Eventually that will have to stop and you'll only receive the market generation rate (the price before all the markups in the submission's graph) for power exported to the grid which is unlikely to net you much profit.",
"title": ""
},
{
"docid": "84eb661ad5e87c2c1813d26e8f203a7e",
"text": "They're trying to, but ratepayers and state governments are fighting back, especially in progressive states. The big issue is the degree to which you can bank your summer power surplus to offset your winter deficit. You'd think that since you're generating power for the grid in summer you'd get equal credit for that to use in winter when the sun shines less, but power companies do their best to prevent this, so state governments have to mandate it.",
"title": ""
},
{
"docid": "5d18cc2b8115f7be369cef789d203106",
"text": "\"This is the best tl;dr I could make, [original](https://qz.com/1017457/there-is-a-point-at-which-it-will-make-economic-sense-to-defect-from-the-electrical-grid/) reduced by 79%. (I'm a bot) ***** > A new study by the consulting firm McKinsey modeled two scenarios: one in which homeowners leave the electrical grid entirely, and one in which they obtain most of their power through solar and battery storage but keep a backup connection to the grid. > As daily needs for many are supplied instead by solar and batteries, McKinsey predicts the electrical grid will be repurposed as an enormous, sophisticated backup. > Solar panels and battery prices are dropping fast-lithium-ion batteries have fallen from $1,000 to $230 per kilowatt-hour since 2010-as massive new solar and battery factories come online in China and the US. By 2020, Greentech Media projects, homes and businesses will have more battery storage for energy than utilities themselves. ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/6kchib/there_is_a_point_at_which_it_will_make_economic/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ \"\"Version 1.65, ~155595 tl;drs so far.\"\") | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr \"\"PM's and comments are monitored, constructive feedback is welcome.\"\") | *Top* *keywords*: **grid**^#1 **battery**^#2 **utility**^#3 **solar**^#4 **McKinsey**^#5\"",
"title": ""
},
{
"docid": "8a469385f7fa771b60b35a6ca66f7831",
"text": "The key is measuring. Like any project you need to evaluate a baseline, make a change, then re-evaluate. Otherwise you are blindly spending money to save, or worse, being manipulated by advertising. Like Chris W. Rea said before me, using a tool like a Kill-A-Watt to measure the effectiveness of what you are about to do is the most important step. For example, if you have an incandescent light bulb in a back part of your basement that you never turn on, it doesn't make much sense to replace that bulb with a $9 LED to save money. If you have an empty freezer in your basement, turn that thing off. Measure your power usage, then you can know for sure what is the most effective action. If you have a family like mine, the best of intentions still leave lights on all day or tvs on a screensaver all night. Invest in simple automation like motion sensing outlets or light switches to automatically turn off power. (It is my full time job to go around a turn off lights, and I want to retire) The biggest payback that I know of is insulation and caulking of your home to make the energy you do use more efficient. If you don't have enough insulation, that is a great place to start. Here is a calculator to estimate the payback of adding insulation. The US government has a cool website with a bunch of tips for saving energy.",
"title": ""
},
{
"docid": "b66b61ad11cadb30ca1d30f219290326",
"text": "UNG United States Natural Gas Fund Natural Gas USO United States Oil Fund West Texas Intermediate Crude Oil UGA United States Gasoline Fund Gasoline DBO PowerShares DB Oil Fund West Texas Intermediate Crude Oil UHN United States Heating Oil Fund Heating Oil I believe these are as close as you'd get. I'd avoid the double return flavors as they do not track well at all. Update - I understand James' issue. An unmanaged single commodity ETF (for which it's impractical to take delivery and store) is always going to lag the spot price rise over time. And therefore, the claims of the ETF issuer aside, these products will almost certain fail over time. As shown above, When my underlying asset rises 50%, and I see 24% return, I'm not happy. Gold doesn't have this effect as the ETF GLD just buys gold, you can't really do that with oil.",
"title": ""
},
{
"docid": "2f7c0fca2c76b98c7fd5ae754ab3ce50",
"text": "Well, you could get long kw/hr to effectively lock in your high rate, but not suffer from anymore shocks. You could also (and this is what I would do) get short and activate change through a legal pursuit. So, get short your light bill via kilowatt hour swaps, and hedge your downside with some longer-dated swaptions. I'm looking at the implied vol for these swaptions on my bloomberg -- it's looking surprisingly cheap. As far as position sizing, we're looking at some notionals of about $200/month. A pretty large sum. Look into getting leverage through total return swaps or repo financing. Does that help?",
"title": ""
},
{
"docid": "a9f6015acf220676c78c716f3c0cc596",
"text": "Last I checked, all business expenses in regards to * Office Supplies * Stationary * Phone service * Marketing are all tax deductible....so how does cutting those costs save money when you'll get that money back via the corporate tax code?",
"title": ""
},
{
"docid": "5a02fa5e98be35dd643239b46c53a8f5",
"text": "It's not like we have a lot of options. We have to stop climate change. Natural gas will be increasingly important, and yes it's a fossil fuel, but not nearly as bad as coal or a oil. Before looking for dealers look at Germany. If only they didn't substitute nuclear with renewables but substituted coal and oil with renewables, they'd have eliminated most fossil fuels.",
"title": ""
},
{
"docid": "b691d2a88102987a7892005486283bea",
"text": ">companies supplying the electricity For the most part, the transaction costs make trying to play EON, RWE, EDF, et al on the short term basis useless. Those companies are all so big and hedged that almost any pricing scenario isn't going to materially impact them. This isn't PGAE circa 2000.",
"title": ""
},
{
"docid": "46bf08c29e31aff2e14a975f99c6519c",
"text": "They will be metering their own electric , so yes that's a plus. And yes I looked at it the same way, free money. I wonder if uploaded a imugr link to the drawings of where they are placing the equipment would help people with determining the benefit.",
"title": ""
},
{
"docid": "e9cf9dd3dcd45697a09d165c0c5ed726",
"text": "Power Options is one such example of what you seek, not cheap, but one good trade will recover a year's fee. There's a lot you can do with the stock price alone as most options pricing will follow Black Scholes. Keep in mind, this is a niche, these questions, while interesting to me, generate little response here.",
"title": ""
},
{
"docid": "bc318b71525376c0e18cccb46902d65b",
"text": "Thanks for that great explanation. I figured you were referring to FAFSA but wanted to be sure. I'm just having my first so i'm trying to plan for the future but I probably won't be paying for college either, it seems like trade schools may be the better deal nowadays.",
"title": ""
},
{
"docid": "1f22df4ad20c173484ea9d80aa08c158",
"text": "Could you perhaps expand on your reasoning behind wanting to take a loan in the first place? Why would you even consider taking a loan for as much as £7,500 (or even much less) if you aren't planning on buying / investing in anything in particular, and you're not in a bad financial situation? If your account never drops below a hundred or two pounds, why would you need to loan money? Just get yourself a credit card, for those times when you might find yourself without money for a short while. But really, it sounds to me like you should be able to set aside a small sum of money every month and create your own savings buffer to cover these situations.",
"title": ""
}
] |
fiqa
|
5de777311920efea0d49a6f82d5a5d52
|
How are bonds affected by the Federal Funds Rate?
|
[
{
"docid": "020d22d766952e6008bf848df7c060d2",
"text": "\"I'll answer your question, but first a comment about your intended strategy. Buying government bonds in a retirement account is probably not a good idea. Government bonds (generally) are tax advantaged themselves, so they offer a lower interest rate than other types of bonds. At no tax or reduced tax, many people will accept the lower interest rate because their effective return may be similar or better depending, for example, on their own marginal tax rate. In a tax-advantaged retirement account, however, you'll be getting the lower interest without any additional benefit because that account itself is already tax-advantaged. (Buying bonds generally may be a good idea or not - I won't comment on that - but choose a different category of bonds.) For the general question about the relationship between the Fed rate and the bond rate, they are positively correlated. There's not direct causal relationship in the sense that the Fed is not setting the bond rate directly, but other interest bearing investment options are tied to the Fed rate and many of those interest-bearing options compete for the same investor dollars as the bonds that you're reviewing. That's at a whole market level. Individual bonds, however, may not be so tightly coupled since the creditworthiness of the issuing entity matters a lot too, so it could be that \"\"bond rates\"\" generally are going up but some specific bonds are going down based on something happening with the issuer, just like the stock market might be generally going up even as specific stocks are dropping. Also keep in mind that many bonds trade as securities on a secondary market much like stocks. So I've talked about the bond rate. The price of the bonds themselves on the secondary market generally move opposite to the rate. The reason is that, for example, if you buy a bond at less than face value, you're getting an effective interest rate that's higher because you get the same sized incremental payments of interest but put less money into the investment. And vice versa.\"",
"title": ""
},
{
"docid": "6e4bbd3e7d72c51119d1690928f018d4",
"text": "\"The federal funds rate is one of the risk-free short-term rates in the economy. We often think of fixed income securities as paying this rate plus some premia associated with risk. For a treasury security, we can think this way: (interest rate) = (fed funds rate) + (term premium) The term premium is a bit extra the bond pays because if you hold a long term bond, you are exposed to interest rate risk, which is the risk that rates will generally rise after you buy, making your bond worth less. The relation is more complex if people have expectations of future rate moves, but this is the general idea. Anyway, generally speaking, longer term bonds are exposed to more interest rate risk, so they pay more, on average. For a corporate bond, we think this way: (interest rate) = (fed funds rate) + (term premium) + (default premium) where the default premium is some extra that the bond must pay to compensate the holder for default risk, which is the risk that the bond defaults or loses value as the company's prospects fall. You can see that corporate and government bonds are affected the same way (approximately, this is all hand-waving) by changes in the fed funds rate. Now, that all refers to the rates on new bonds. After a bond is issued, its value falls if rates rise because new bonds are relatively more attractive. Its value rises if rates on new bonds falls. So if there is an unexpected rise in the fed funds rate and you are holding a bond, you will be sad, especially if it is a long term bond (doesn't matter if it's corporate or government). Ask yourself, though, whether an increase in fed funds will be unexpected at this point. If the increase was expected, it will already be priced in. Are you more of an expert than the folks on wall-street at predicting interest rate changes? If not, it might not make sense to make decisions based on your belief about where rates are going. Just saying. Brick points out that treasuries are tax advantaged. That is, you don't have to pay state income tax on them (but you do pay federal). If you live in a state where this is true, this may matter to you a little bit. They also pay unnaturally little because they are convenient for use as a cash substitute in transactions and margining (\"\"convenience yield\"\"). In general, treasuries just don't pay much. Young folk like you tend to buy corporate bonds instead, so they can make money on the default and term premia.\"",
"title": ""
}
] |
[
{
"docid": "94f4b3bad0673cfc2d66983ab898f89d",
"text": "What you said is technically correct. But the implication OP might get from that statement is wrong. If the Fed buys bonds and nominal yields go down (Sometimes they might even go up if it meant the market expected the Fed's actions to cause more inflation), inflation expectations don't go down unless real yields as measured by TIPs stay still.",
"title": ""
},
{
"docid": "aefe743b20c09ba211183e7b92a884ed",
"text": "Increasing rates from .75% to 1% is an attempt to control debt. The new 1% rate drives down demand for bonds based on the old .75% rate and drives down demand for stocks who have decrease profit because they pay more interest on debt. This is the federal reserves primary tool controling inflation. 1% is what the banks pay to borrow money, they base their lending rates on this 1% figure. If a person can guarantee a .75% return on money borrowed at 1%, they will opt to save and instead lend their money out at 1%.",
"title": ""
},
{
"docid": "233ea902448875e6343af9b6290c5305",
"text": "Investopedia has this note where you'd want the contrapositive point: The interest rate, commonly bandied about by the media, has a wide and varied impact upon the economy. When it is raised, the general effect is a lessening of the amount of money in circulation, which works to keep inflation low. It also makes borrowing money more expensive, which affects how consumers and businesses spend their money; this increases expenses for companies, lowering earnings somewhat for those with debt to pay. Finally, it tends to make the stock market a slightly less attractive place to investment. As for evidence, I'd question that anyone could really take out all the other possible economic influences to prove a direct co-relation between the Federal Funds rate and the stock market returns. For example, of the dozens of indices that are stock related, which ones would you want that evidence: Total market, large-cap, small-cap, value stocks, growth stocks, industrials, tech, utilities, REITs, etc. This is without considering other possible investment choices such as direct Real Estate holdings, compared to REITs that is, precious metals and collectibles that could also be used.",
"title": ""
},
{
"docid": "15259aee6b70c7887800c657f4024033",
"text": "I see that you're invested in a couple bond funds. You do not want to be invested in bonds when the Fed raises rates. When rates climb, the value of bond investments decline, and vice-versa. So that means you should sell bonds before a rate hike, and buy them before a rate drop.",
"title": ""
},
{
"docid": "48f0b8daf92c94325fe3993451500c40",
"text": "The United States Federal Reserve has decided that interest rates should be low. (They think it may help the economy. The details matter little here though.) It will enforce this low rate by buying Treasury bonds at this very low interest rate. (Bonds are future money, so this means they pay a lot of money up front, for very little interest in the future. The Fed will pay more than anyone who offers less money up front, so they can set the price as long as they're willing to buy.) At the end of the day, Treasury bonds pay nearly no interest. Since there's little money to be made with Treasuries, people who want better-than-zero returns will bid up the current-price of any other bonds or similar loan-like instruments to get what whatever rate of return that they can. There's really no more than one price for money; you can think of the price of those bonds as basically (Treasury rate + some modifier based on the risk) percent. I realize thinking about bond prices is weird and different than other prices (you're measuring future-money using present-money and it's easy to be confused) and assure you it ultimately makes sense :) Anyway. Your savings account money has to compete with everyone else willing to lend money to banks. Everyone-else lends money for peanuts, so you get peanuts on your savings account too. Your banking is probably worth more to your bank on account of your check-card payment processing fees (collected from the merchant) than from the money they make lending out your savings (notice how many places have promotional rates if you make your direct deposits or use your check card to make a purchase N times a month). In Europe, it's similar, except you've got a different central bank. If Europe's bank operated radically differently for an extended period of time, you'd expect to see a difference in the exchange rates which would ultimately make the returns from investing in those currencies pretty similar as well. Such a change may show up domestically as inflation in the country with the loose-money policy, and internationally as weakness against other currencies. There's really only one price for money around the entire world. Any difference boils down to a difference in (perceived) risk.",
"title": ""
},
{
"docid": "b45d931f0cfba1a028cae1a5bc8f4399",
"text": "Fundamentally interest rates reflect the time preference people place on money and the things money can buy. If I have a high time preference then I prefer money in my hand versus money promised to me at some date in the future. Thus, I will only loan my money to someone if they offer me an incentive which would be an amount of money to be received in the future that is larger than the amount of money I’m giving the debtor in the present (i.e. the interest rate). Many factors go into my time preference determination. My demand for cash (i.e. my cash balance), the credit rating of the borrower, the length of the loan, and my expectation of the change in currency value are just a few of the factors that affect what interest rate I will loan money. The first loan I make will have a lower interest rate than the last loan, ceteris paribus. This is because my supply of cash diminishes with each loan which makes my remaining cash more valuable and a higher interest rate will be needed to entice me to make additional loans. This is the theory behind why interest rates will rise when QE3 or QEinfinity ever stops. QE is where the Federal Reserve cartel prints new money to purchase bonds from cartel banks. If QE slows or ends the supply of money will stop increasing which will make cash more valuable and higher interest rates will be needed to entice creditors to loan money. Note that increasing the stock of money does not necessarily result in lower interest rates. As stated earlier, the change in value of the currency also affects the interest rate lenders are willing to accept. If the Federal Reserve cartel deposited $1 million everyday into every US citizen’s bank account it wouldn’t take long before lenders demanded very high interest rates as compensation for the decrease in the value of the currency. Does the Federal Reserve cartel affect interest rates? Yes, in two ways. First, as mentioned before, it prints new money that is loaned to the government. It either purchases the bonds directly or purchases the bonds from cartel banks which give them cash to purchase more government bonds. This keeps demand high for government bonds which lowers the yield on government bonds (yields move inverse to the price of the bond). The Federal Reserve cartel also can provide an unlimited amount of funds at the Federal Funds rate to the cartel member banks. Banks can borrow at this rate and then proceed to make loans at a higher rate and pocket the difference. Remember, however, that the Federal Reserve cartel is not the only market participant. Other bond holders, such as foreign governments and pension funds, buy and sell US bonds. At some point they could demand higher rates. The Federal Reserve cartel, which currently holds close to 17% of US public debt, could attempt to keep rates low by printing new money to buy all existing US bonds to prevent the yield on bonds from going up. At that point, however, holding US dollars becomes very dangerous as it is apparent the Federal Reserve cartel is just a money printing machine for the US government. That’s when most people begin to dump dollars en masse.",
"title": ""
},
{
"docid": "d9ff22fad222bb44d548c34d3f973584",
"text": "Yes, the interest rate on a Treasury does change as market rates change, through changes in the price. But once you purchase the instrument, the rate you get is locked in. The cashflows on a treasury are fixed. So if the market rate increase, the present value of those future cashflows decreases, so the price of the treasury decreases. If you buy the bond after this happens, you would pay a lower price for the same fixed cashflows, hence you will receive a higher rate. Note that once you purchase the treasury instrument, your returns are locked in and guaranteed, as others have mentioned. Also note that you should distinguish between Treasury Bills and Treasury Bonds, which you seem to use interchangeably. Straight from the horse's mouth, http://www.treasurydirect.gov/indiv/products/products.htm: Treasury Bills are short term securities with maturity up to a year, Treasury Notes are medium term securities with maturity between 1 and 10 years, and Treasury Bonds are anything over 10 years.",
"title": ""
},
{
"docid": "fa30e29f8506005c072899b81da89854",
"text": "Let's say today you buy the bond issued by StateX at 18$. Let's say tommorow morning the TV says that StateX is going towards default (if it happens it won't give you back not even the 18$ you invested). You (and others that bought the same bond like you) will get scared and try to sell the bond, but a potential buyer won't buy it for 18$ anymore they will risk maximum couple of bucks, therefor the price of your bond tomorrow is worth 2$ and not 18 anymore. Bond prices (even zero coupon ones) do fluctuate like shares, but with less turbolence (i.e. on the same period of time, ups and downs are smaller in percentage compared to shares) EDIT: Geo asked in the comment below what happens to the bond the FED rises the interest. It' very similar to what I explained above. Let's say today you buy the bond just issued by US treasury at 50$. Today the FED rewards money at 2%, and the bond you bought promised you a reward of 2% per year for 10 years (even if it's zero coupon, it will give you almost the same reward of one with coupons, the only difference is that it will give you all the money back at once, that is when the bond expires). Let's say tommorow morning the TV says that FED decided to rise the interest rates, and now on it lends money rewarding a wonderful 4% to investors. US treasury will also have to issue bonds at 4%. You can obviously keep your bond until expiration (and unless US goes default you will get back all your money until the last cent), but if you decide to sell your bond, you will find out that people won't be willing to pay 50$ anymore because on the market they can now buy the same type of bond (for the same period of time, 10 years) that give them 4% per year and not a poor 2% like yours. So people will be willing to pay maximum 40$ for your bond or less.",
"title": ""
},
{
"docid": "160c44a324bab3abc239fa3ebc2a53bf",
"text": "Yes, the Fed has made a point of buying up longer-term bonds to push down rates on that part of the curve. That's not an indication that they're having problems selling Treasuries, in fact far from it. But apparently there's no demand for Treasuries and Bloomberg is just making up lies to help get Obama reelected? >Investors are plowing into Treasuries (USB2YBC) at a record pace as the supply of the world’s safest securities dwindles, ensuring yields will stay low regardless of whether the Federal Reserve undertakes more stimulus to fight unemployment. Buyers bid $3.19 for each dollar of the $538 billion in notes and bonds sold this year, the most since the government began releasing the data in 1992 and on pace to beat the high of $3.04 in 2011. The net amount of Treasuries available will decline by 30 percent once proceeds from maturing securities are reinvested, according to data from CRT Capital Group LLC. http://www.bloomberg.com/news/2012-04-09/record-treasury-demand-keeps-yields-low-as-supply-shrinks.html",
"title": ""
},
{
"docid": "25fd54e7984e8a5af60b1f25acdb4347",
"text": "Look at this question here. In my answer there, I put a link to an Investopedia article about the bond prices. Keep in mind that speculating over a short term period is pretty dangerous, even with the Treasury notes, and the prices may be affected temporary but greatly by the ordeals like the latest Republican shenanigans in Washington.",
"title": ""
},
{
"docid": "387c129acc390a3c1a392d09e73a8b0f",
"text": "\"Of course Goldman Sacs sells the bonds to the fed without charging a commission. They are well known for their compassionate altruism. Just kidding! Of course they charge. The Federal Reserve Act specifies that the Federal Reserve buy and sell Treasury securities only in the \"\"open market.\"\" The Federal Reserve conducts its purchases through \"\"Primary Dealers\"\" - usually Goldman Sacs-these btw are older securities. The new ones such as the fed has been gobbling up lately are sold at auction. This supposedly supports the central banks independence in conducting monetary policy but still doesn't seem right. But then the fact that we have a central bank at all instead of the U.S. Treasury printing the money, doesn't seem quite right either now does it?\"",
"title": ""
},
{
"docid": "478cdde040cedfb6e01af7f6e8296744",
"text": "I looked into the investopedia one (all their videos are mazing), but that detail just was not clear to me, it also makes be wonder, if a country issues bonds to finance itself, what happens at maturity when literally millions of them need to be paid? The income needs to have grown to that level or it defaults? Wouldn't all the countries default if that was the case, or are bonds being issued to being able to pay maturity of older bonds already? (I'm freaking myself out by realizing this)",
"title": ""
},
{
"docid": "ececac6321b8ffaeba94cd84491d095d",
"text": "Public Securities Association Standard Prepayment Model is what the acronym psa stands for. My understanding is that it allows for adjustments in monthly pre-payment amounts, which will then affect the yield of the bond. Not really sure what the most important bond measure would be... but if I had to guess I'd say its the mechanical bond price/ bond yield relationship. Yields go down, prices go up and vice versa.",
"title": ""
},
{
"docid": "c480cc34018d4f6ac8d9e295e42efa98",
"text": "It is different this time. But I think the risk of asset prices rising is almost as equal as them falling. QE caused asset price inflation, but QE was only to calm/support the market. They're probably not going to stuff that QE money back into the central bank for a very long time either. Maybe, they'll just keep rolling over the bonds out to maturity, while relying on deficits to inflate away the assets at the Fed. https://youtu.be/o8LAUQwv77Q My bet is the main risks going forward are political risks, and continued modest inflation among things not measured by CPI.",
"title": ""
},
{
"docid": "bb27312cdf3703a383fa28960ac1908a",
"text": "This directly relates to the ideas behind the yield curve. For a detailed explanation of the yield curve, see the linked answer that Joe and I wrote; in short, the yield curve is a plot of the yield on Treasury securities against their maturities. If short-term Treasuries are paying higher yields than long-term debt, the yield curve has a negative slope. There are a lot of factors that could cause the yield curve to become negatively sloped, or at least less steep, but in this case, oil prices and the effective federal funds rate may have played a significant role. I'll quote from the section of the linked answer that describes the effect of oil prices first: a rise in oil prices may increase expectations of short-term inflation, so investors demand higher interest rates on short-term debt. Because long-term inflation expectations are governed more by fundamental macroeconomic factors than short-term swings in commodity prices, long-term expectations may not rise nearly as much as short term expectations, which leads to a yield curve that is becoming less steep or even negatively sloped. As the graph shows, oil prices increased dramatically, so this increase may have increased expectations of short-term inflation expectations substantially. The other answer describes an easing of monetary policy, e.g. a decrease in the effective federal funds rate (FFR), as a factor that could increase the slope of the yield curve. However, a tightening of monetary policy, e.g. an increase in the FFR, could decrease the slope of the yield curve because a higher FFR leads investors to demand a higher rate of return on shorter-term securities. Longer-term Treasuries aren't as affected by short-term monetary policy, so when short-term yields increase more than long-term yields, the yield curve becomes less steep and/or negatively sloped. The second graph shows the effective federal funds rate for the period in question, and once again, the increase is significant. Finally, look at a graph of inflation for the relevant period. Intuitively, the steady increase in inflation from 1975 onward may have increased investors expectations of short-term inflation, therefore increasing short-term yields more than long-term yields (as described above and in the other answer). These reasons aren't set in stone, and just looking at graphs isn't a substitute for an actual analysis of the data, but logically, it seems plausible that the positive shock to oil prices, increases in the effective federal funds rate, and increases in inflation and expectations of inflation contributed at least partially to the inversion of the yield curve. Keep in mind that these factors are all interconnected as well, so the situation is certainly more complex. If you approve of this answer, be sure to vote up the other answer about the yield curve too.",
"title": ""
}
] |
fiqa
|
700385f0bbcebee9a683678174df01b9
|
Ways to save for child's college education where one need not commit to set contributions? [duplicate]
|
[
{
"docid": "bd2b50466c2fb48a74a03351450603f0",
"text": "529 plans. They accumulate earnings over time and by the time your child goes to college you will be able to withdraw funds for college TAX FREE. The best part about 529s is that there are several different options you can choose from, and you aren't limited to the plans sponsored by your state, you can use whichever plan works best for you. For example, I live in South Carolina and use Utah's Educational Savings Plan because it has no minimum amount to open one up and it has low fees. Hope this helped. Good luck with your search!",
"title": ""
},
{
"docid": "0eaf00f256cf298387ca5d1c2a154aa4",
"text": "\"In my opinion, whichever plan or commodity system you use is just supplemental to a very simple thing: go to your bank's online account, set up a regular transfer (monthly in my case, maybe weekly for you depending on when you get your salary in your country/state) to a savings' account in your kid's name with a decent rate, and just watch it grow. Then adjust to salary fluctuations if needed. Also, prefer a tax-free savings account. Been working fine for me for my oldest who's now 4 yo. Started by saving only a little each month and increased as our financial pressure eased up a bit. For his sister, I already set up a similar thing and I will \"\"equalize\"\" both accounts with additional payments over time (Hmm, actually, maybe that's not fair and they just need to be \"\"equalized\"\" in that they both have the same amount for a given age... but that's another question). Another option, which I set up for my oldest but not for his sister was a child trust fund with an initial payment. We moved countries and I don't find a plan that I find similarly attractive here, and the other one is locked until 18 yo. But, as with all portfolios, it comes with a risk. Note that I don't live in the U.S. in the land of crazy college fees. Though I've studied myself in countries where fees were already a drag (and I'm being polite) for various fields (IT and music studies, anyone?), I have to say when I see fees for the big league universities and colleges in the U.S. I am kind of shocked. Doable, but good luck with that and with your loans.\"",
"title": ""
},
{
"docid": "576cccc84488349299efa67fd9a2de45",
"text": "529 is good. Though, I would avoid other kinds of investments in kids names and or setting up accounts that are too complex or difficult to use as college costs will come in may aspects starting application fees and travel expenses when looking for college as well as housing and allowance spending.",
"title": ""
},
{
"docid": "f3e50dd861f531211ef5db6eeca1998b",
"text": "Since this post was migrated from Parenting, my reply was in the context where it appeared to be misrepresenting facts to make a point. I've edited it to be more concise to my main point. In my opinion, the best way to save for your childs future is to get rid of as much of your own debt as possible. Starting today. For the average American, a car is 6-10%. Most people have at least a couple credit cards, ranging from 10-25% (no crap). College loans can be all over the map (5-15%) as can be signature (8-15%) or secured bank loans (4-8%). Try to stop living within your credit and live within your means. Yeah it will suck to not go to movies or shop for cute things at Kohl's, but only today. First, incur no more debt. Then, the easiest way I found to pay things off is to use your tax returns and reduce your cable service (both potentially $Ks per year) to pay off a big debt like a car or student loan. You just gave yourself an immediate raise of whatever your payment is. If you think long term (we're talking about long-term savings for a childs college) there are things you can do to pay off debt and save money without having to take up a 2nd job... but you have to think in terms of years, not months. Is this kind of thing pie in the sky? Yes and no, but it takes a plan and diligence. For example, we have no TV service (internet only service redirected an additional $100/mo to the wifes lone credit card) and we used '12 taxes to pay off the last 4k on the car. We did the same thing on our van last year. It takes willpower to not cheat, but that's only really necessary for the first year-ish... well before that point you'll be used to the Atkins Diet on your wallet and will have no desire to cheat. It doesn't really hurt your quality of life (do you really NEED 5 HBO channels?) and it sets everyone up for success down the line. The moral of the story is that by paying down your debt today, you're taking steps to reduce long haul expenditures. A stable household economy is a tremendous foundation for raising children and can set you up to be more able to deal with the costs of higher ed.",
"title": ""
}
] |
[
{
"docid": "39efca8110c7d497f195cadf2e5cc2fe",
"text": "I think you have a good start understanding the ESA. $2k limit per child per year. The other choice is a 529 account which has a much higher limit. You can deposit up to 5 years worth of gifting per child, or $65k per child from you and another $65k from your wife. Sounds great, right? The downside is the 529 typically has fewer investment options, and doesn't allow for individual stocks. The S&P fund in my 529 costs me nearly 1% per year, in the ESA, .1%. the ESA has to be used by age 30, the 529 can be held indefinitely.",
"title": ""
},
{
"docid": "10ac79d2ac6be5c20574e7d20547be22",
"text": "\"You have a few correlated questions here: Yes you can. There are only a few investment strategies that require a minimum contribution and those aren't ones that would get a blanket recommendation anyway. Investing in bonds or stocks is perfectly possible with limited funds. You're never too young to start. The power of interest means that the more time you give your money to grow, the larger your eventual gains will be (provided your investment is beating inflation). If your financial situation allows it, it makes sense to invest money you don't need immediately, which brings us to: This is the one you have to look at most. You're young but have a nice chunk of cash in a savings account. That money won't grow much and you could be losing purchasing power to inflation but on the other hand that money also isn't at risk. While there are dozens of investment options1 the two main ones to look at are: bonds: these are fixed income, which means they're fairly safe, but the downside is that you need to lock up your money for a long time to get a better interest rate than a savings account index funds that track the market: these are basically another form of stock where each share represents fractions of shares of other companies that are tracked on an index such as the S&P 500 or Nasdaq. These are much riskier and more volatile, which is why you should look at this as a long-term investment as well because given enough time these are expected to trend upwards. Look into index funds further to understand why. But this isn't so much about what you should invest in, but more about the fact that an investment, almost by definition, means putting money away for a long period of time. So the real question remains: how much can you afford to put away? For that you need to look at your individual situation and your plans for the future. Do you need that money to pay for expenses in the coming years? Do you want to save it up for college? Do you want to invest and leave it untouched to inspire you to keep saving? Do you want to save for retirement? (I'm not sure if you can start saving via IRAs and the like at your age but it's worth looking into.) Or do you want to spend it on a dream holiday or a car? There are arguments to be made for every one of those. Most people will tell you to keep such a \"\"low\"\" sum in a savings account as an emergency fund but that also depends on whether you have a safety net (i.e. parents) and how reliable they are. Most people will also tell you that your long-term money should be in the stock market in the form of a balanced portfolio of index funds. But I won't tell you what to do since you need to look at your own options and decide for yourself what makes sense for you. You're off to a great start if you're thinking about this at your age and I'd encourage you to take that interest further and look into educating yourself on the investments options and funds that are available to you and decide on a financial plan. Involving your parents in that is sensible, not in the least because your post-high school plans will be the most important variable in said plan. To recap my first point and answer your main question, if you've decided that you want to invest and you've established a specific budget, the size of that investment budget should not factor into what you invest it in. 1 - For the record: penny stocks are not an investment. They're an expensive form of gambling.\"",
"title": ""
},
{
"docid": "d457ed23d4d188203fae9f08792b9a22",
"text": "\"This is an old question, but a new product has popped up that provides an alternative answer. There is a website called stockpile.com that allows you to purchase \"\"stock gift certificates\"\" for others. These come in both electronic and traditional physical form. This meets my question's original criteria of a gift giver paying for stock without having any of the recipient's personal information and thus maintaining the gift's surprise. I should note a few things about this service: Despite these limitations I wanted to post it here so others were aware of it as an option. If no other alternative will work and this is what it takes to get a parent interested in teaching their child to invest, then it's well worth the costs.\"",
"title": ""
},
{
"docid": "fcf00c058fb795ee2b66e94a51bb9c79",
"text": "\"According to the FAFSA info here, they will count your nonretirement assets when figuring the EFC. The old Motley Fool forum question I mentioned in my comment suggests asking the school for a \"\"special circumstances adjustment to your FAFSA\"\". I don't know much about it, but googling finds many pages about it at different colleges. This would seem to be something you need to do individually with whatever school(s) your son winds up considering. Also, it is up to the school whether to have mercy on you and accept your request. Other than that, you should establish whatever retirement accounts you can and immediately begin contributing as much as possible. Given that the decision is likely to be complicated by your foreign income, you should seek professional advice from an accountant versed in such matters.\"",
"title": ""
},
{
"docid": "d9cb6f639cc02d9fa95f1f7e8dd31186",
"text": "Probably the biggest tax-deferment available to US workers is through employee-sponsored investment plans like the 401k. If you meet the income limits, you could also use a Traditional IRA if you do not have a 401k at work. But keep in mind that you are really just deferring taxes here. The US Government will eventually get their due. :) One way which you may find interesting is by using 529 plans, or other college investment plans, to save for your child's (or your) college expenses. Generally, contributions up to a certain amount are deductible on your state taxes, and are exempt from Federal and State taxes when used for qualifying education expenses. The state deduction can lower your taxes and help you save for college for your children, if that is a desire of yours.",
"title": ""
},
{
"docid": "5dcea2a043b2b89f705cdb34fec89fe2",
"text": "\"As soon as you specify FDIC you immediately eliminate what most people would call investing. The word you use in the title \"\"Parking\"\" is really appropriate. You want to preserve the value. Therefore bank or credit union deposits into either a high yield account or a Certificate of Deposit are the way to go. Because you are not planning on a lot of transactions you should also look at some of the online only banks, of course only those with FDIC coverage. The money may need to be available over the next 2-5 years to cover college tuition If needing it for college tuition is a high probability you could consider putting some of the money in your state's 529 plan. Many states give you a tax deduction for contributions. You need to check how much is the maximum you can contribute in a year. There may be a maximum for your state. Also gift tax provisions have to be considered. You will also want to understand what is the amount you will need to cover tuition and other eligible expenses. There is a big difference between living at home and going to a state school, and going out of state. The good news is that if you have gains and you use the money for permissible expenses, the gains are tax free. Most states have a plan that becomes more conservative as the child gets closer to college, therefore the chance of losses will be low. The plan is trying to avoid having a large drop in value just a the kid hits their late teens, exactly what you are looking for.\"",
"title": ""
},
{
"docid": "bb1a6886a0414d71c3b50c1163c6222c",
"text": "I think you have already outlined for yourself most of the pros and cons of each method of giving. It sounds to me like you have some desire to control how the money is spent, or at least reserve the right not to give it to a child who will waste it (according to your definition). If you set up an UTMA/UGMA account, or just give the money directly each year as a birthday gift, you are surrendering control of the money. It's a gift and is no longer yours to direct. If you set up a 529, you at least restrict the money to a particular, useful purpose. Moreover, if you retain ownership of the 529, you can take the money back, albeit with a tax penalty to yourself. If you do hold a 529 in your name, but for a child's benefit, there are a couple of things to consider with respect to future financial aid (this is from recent experience--my in-laws have 529s for our children, both of whom are currently in college). A 529 not owned by the student or the student's parent is not reported as an asset (of the child or the parent) on the Free Application for Federal Student Aid (FAFSA). However, once such a 529 is used to pay college expenses, the amount of those payments does get reported on the following year's FAFSA, and counts as untaxed income for the purposes of figuring the Expected Family Contribution (EFC). Untaxed income is assessed towards the EFC at 50%. In contrast, parental assets are assessed at around 7%, if I recall correctly, and student assets at around 35%. Student-owned 529s are assessed at the rate of parental assets, which is an advantage. If the amount you will set aside is less than the cost of one year of college, you can avoid the disadvantage of the untaxed income assessment by just using the entire 529 for the final year of school, since there will be no FAFSA for the following year. It occurs to me that there is one other way you can give to them that you did not mention, and may make you more comfortable in terms of encouraging some positive behavior. Namely, save the money in a self-owned account, then, when they are old enough to get a job that provides a W-2 showing declared, earned income, you can use the savings to fund a Traditional or Roth IRA for them, up to the limit allowed each year, until the money you set aside is exhausted. The Roth is a better long-term savings vehicle, but the Traditional would carry bigger penalties for early withdrawal and would therefore be less tempting to draw on.",
"title": ""
},
{
"docid": "d5fccfee4794940e96ad9d71100be6ab",
"text": "\"Several student loans are backed by government guarantee and this will allow you to get attractive rates. This may require them to consolidate the three classes of loans separately. Many commercial banks offer consolidation services, one example is Wachovia discussed at https://www.wellsfargo.com/student/private-loan-consolidation/ Other methods of \"\"consolidation\"\" are of course anything that pays off the original loan. If available, using a parent's home equity line of credit to pay of the loans and then paying back the parents can save money. An additional benefit of HELOC-style loans is that they are very flexible in their payment terms. For example you may pay $25 per year to keep the account open and then only be required to make interest payments. Links: https://origin.bankrate.com/finance/college-finance/faqs-on-student-loan-consolidation-1.aspx\"",
"title": ""
},
{
"docid": "c8a1f6e41f6870de191a8e56f1d19176",
"text": "You are faced with a dilemma. If you use a 529 plan to fund your education, the short timeline of a few years will limit your returns that are tax free. Most people who use a 529 plan either purchase years of tuition via lump sum, when the child is young; or they put aside money on a regular basis that will grow tax deferred/tax free. Some states do give a tax break when the contribution is made by a state taxpayer into a plan run by the state. The long term plans generally use a risk profile that starts off heavily weighted in stock when the child is young, and becomes more fixed income as the child reaches their high school years. The idea is to protect the fund from big losses when there is no time to recover. If you choose the plan with the least risk the issue is that the amount of gains that are being protected from federal tax is small. If you pick a more aggressive plan the risk is that the losses could be larger than the state tax savings. Look at some of the other tax breaks for tuition to see if you qualify Credits An education credit helps with the cost of higher education by reducing the amount of tax owed on your tax return. If the credit reduces your tax to less than zero, you may get a refund. There are two education credits available: the American Opportunity Tax Credit and the Lifetime Learning Credit. Who Can Claim an Education Credit? There are additional rules for each credit, but you must meet all three of the following for either credit: If you’re eligible to claim the lifetime learning credit and are also eligible to claim the American opportunity credit for the same student in the same year, you can choose to claim either credit, but not both. You can't claim the AOTC if you were a nonresident alien for any part of the tax year unless you elect to be treated as a resident alien for federal tax purposes. For more information about AOTC and foreign students, visit American Opportunity Tax Credit - Information for Foreign Students. Deductions Tuition and Fees Deduction You may be able to deduct qualified education expenses paid during the year for yourself, your spouse or your dependent. You cannot claim this deduction if your filing status is married filing separately or if another person can claim an exemption for you as a dependent on his or her tax return. The qualified expenses must be for higher education. The tuition and fees deduction can reduce the amount of your income subject to tax by up to $4,000. This deduction, reported on Form 8917, Tuition and Fees Deduction, is taken as an adjustment to income. This means you can claim this deduction even if you do not itemize deductions on Schedule A (Form 1040). This deduction may be beneficial to you if, for example, you cannot take the lifetime learning credit because your income is too high. You may be able to take one of the education credits for your education expenses instead of a tuition and fees deduction. You can choose the one that will give you the lower tax.",
"title": ""
},
{
"docid": "902175a618268269d197835f4027f20c",
"text": "\"Under current US tax code, you can receive $14K from an unlimited number of people with no tax consequence to them. Yes, the burden is on the giver. There's an exception to most rules. If I gift you a large sum and don't fill out the required paperwork, paying the tax due, the IRS can go after the recipient for their cut. \"\"Follow the money\"\" is still going to be applied. Even if over $14K, a tax isn't always due. Form 709 is required, and will allow a credit against one's lifetime gifting, currently $5.34M. In effect, the current limits mean that 99%+ of us will never worry about this limit, just file the paperwork. Last, the 529 College Savings accounts permit a 5 year look ahead, i.e. a parent can deposit $70K to jump start her child's account. Then no gift for next 4 years.\"",
"title": ""
},
{
"docid": "c79894c7fa372a0fc8b279eaf727db50",
"text": "\"In my opinion, you can't save too much for retirement. An extra $3120/yr invested at 8% for 30 years would give you $353K more at retirement. If your \"\"good amount in my 401k\"\" is a hint that you don't want us to go in that direction, then how about saving for the child's college education? 15 years' savings, again at 8% will return $85K, which feels like a low number even in today's dollars, 15 years of college inflation and it won't be much at all. Not sure why there's guilt around spending it. If one has no debt, good retirement savings level, and no pressing need to save for something else, enjoying one's money is an earned reward. Even so, if you want a riskless 'investment' just prepay the mortgage. You'll see an effective return of the mortgage rate, 4%(?) or so, vs the .001% banks are paying. Of course, this creates a monthly windfall once the mortgage is paid off, but it buys you time to make this ultimate decision. In the end, I'd respond that similar to Who can truly afford luxury cars?, one should produce a budget. I don't mean a set of constraints to limit spending in certain categories, but rather, a look back at where the money went last year and even the year before that. What will emerge are the things that are normal, the utility bills, tax bill, mortgage, etc, as well as the discretionary spending. If all your current saving is on track, the investment may be in experiences, not financial products.\"",
"title": ""
},
{
"docid": "98308db7064246b27f37cdf304800bf8",
"text": "There are two types of 529 programs. One where you put money aside each month. The one offered by your state may give you a tax break on you deposits. You can pick the one from any state, if you like their options better. During the next 18 years the focus the investment changes from risky to less risky to no risk. This happens automatically. The money can be used for tuition, room, board, books, fees. The 2nd type of 529 is also offered by a state but it is geared for a big lump sum payment when the child is young. This will cover full tuition and fees (not room and board, or books) at a state school. The deal is not as great if they child wants to go out of state, or you move, or they want to go to a private school. You don't lose everything, but you will have to make up the shortfall at the last minute. There are provisions for scholarship money. If you kid goes to West Point you haven't wasted the money in the 529. The money in either plan is ignored while calculating financial aid. Other options such as the Coverdell Education Savings account also exist. But they don't have the options and state tax breaks. Accounts in the child's name can impact the amount of financial aid offered, plus they could decide to spend the money on a car. The automatic investment shift for most of the state 529 plans does cover your question of how much risk to take. There are also ways to transfer the money to other siblings if one decides not to go to college. Keep in mind that the funds don't have to be spent as soon as they turn 18, they can wait a few years before enrolling in college.",
"title": ""
},
{
"docid": "2e808270f61e48530726c53dae641c17",
"text": "One big advantage that the 529 plan has is that most operate like a target date fund. As the child approaches college age the investment becomes more conservative. While you can do this by changing the mix of investments, you can't do it without capital gains taxes. Many of the issues you are concerned about are addressed: they are usable by other family members, they don't hurt financial aid offers, they address scholarships, they can be used for books or room and board. Many states also give you a tax break in the year of the contribution.",
"title": ""
},
{
"docid": "7e23806abc4aac758bb9c06fc926f314",
"text": "begin having them take community college courses while they are still in high school - this should be a better use of time than AP courses. if they continue and get an associates degree the credits should be transferrable anywhere take the associates degree to a state school and have them finish just their two years (4 semesters) at the state school. that should be an non-stressful and affordable approach that will give them a time/age-based advantage over their peers. so instead of playing with financial aid and retirement plan rules, this sort of goal can help you save, without creating inconsequential and unnecessary expectations for yourself or your family",
"title": ""
},
{
"docid": "f91f4a2c1fefc9609804c9797e792abd",
"text": "The British didn't choose to stay away, they were forced out (as was Sweden) by their fucked up policies and being unable to defend their peg against the (trading only at the time) euro currency. They lost a fuckload in the process and when it became apparent that those that understand market arbitrage wouldn't let up (what killed Mexico/Argentia Peso as well), they backed out.",
"title": ""
}
] |
fiqa
|
f6a6c6a54bca7a2cdb8661119ad25003
|
Variations of Dual momentum
|
[
{
"docid": "0e67e45b5854d2f1613136954e4faf30",
"text": "\"There's a few layers to the Momentum Theory discussed in that book. But speaking in general terms I can answer the following: Kind of. Assuming you understand that historically the Nasdaq has seen a little more volatility than the S&P. And, more importantly, that it tends to track the tech sector more than the general economy. Thus the pitfall is that it is heavily weighted towards (and often tracks) the performance of a few stocks including: Apple, Google (Alphabet), Microsoft, Amazon, Intel and Amgen. It could be argued this is counter intuitive to the general strategy you are trying to employ. This could be tougher to justify. The reason it is potentially not a great idea has less to do with the fact that gold has factors other than just risk on/off and inflation that affect its price (even though it does!); but more to do with the fact that it is harder to own gold and move in and out of positions efficiently than it is a bond index fund. For example, consider buying physical gold. To do so you have to spend some time evaluating the purchase, you are usually paying a slight premium above the spot price to purchase it, and you should usually also have some form of security or insurance for it. So, it has additional costs. Possibly worth it as part of a long-term investment strategy; if you believe gold will appreciate over a decade. But not so much if you are holding it for as little as a few weeks and constantly moving in and out of the position over the year. The same is true to some extent of investing in gold in the form of an ETF. At least a portion of \"\"their gold\"\" comes from paper or futures contracts which must be rolled every month. This creates a slight inefficiency. While possibly not a deal breaker, it would not be as attractive to someone trading on momentum versus fundamentals in my opinion. In the end though, I think all strategies are adaptable. And if you feel gold will be the big mover this year, and want to use it as your risk hedge, who am I or anyone else to tell you that you shouldn't.\"",
"title": ""
}
] |
[
{
"docid": "2aa481ffa2d33951bfdbbab1ebf2c7cb",
"text": "Not really. You can have two bonds that have identical duration but vastly different convexity. Pensions and insurance portfolio managers are most common buyers as they're trying to deal with liability matching and high convexity allows them to create a barbell around their projected liabilities.",
"title": ""
},
{
"docid": "b486f52ac222a212ce347c49cee3f862",
"text": "\"This is the best tl;dr I could make, [original](http://cep.lse.ac.uk/pubs/download/dp1503.pdf) reduced by 99%. (I'm a bot) ***** > Alternative risk outcomes All risk outcomes capture ex-post risk realizations rather than ex- ante risks. > 4.8 1.2 1.6 Figure 2: Positive Correlation Tests - Dynamics t+1 t+2 t+3 t+4 t+5 t+6 Displacement Probability in Year t+k t+7 t+8 Notes: Risk realization in t + 1 may fail to fully capture the unemployment risk faced by an individual as she is making her coverage choice at time t, which justifies using risk realizations for that individual further into the future. > 05 Individual-level model &beta;OLS =.082 &beta;2SLS =.245 0.05.1.15 Firm Displacement Risk in t.2 Notes: The Figure uses cross-sectional variation in displacement risk across firms as a risk shifter to estimate how UI coverage choices react to variation in risk that is not driven by individual moral hazard. ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/76t73y/lse_riskbased_selection_in_unemployment_insurance/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ \"\"Version 1.65, ~229382 tl;drs so far.\"\") | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr \"\"PM's and comments are monitored, constructive feedback is welcome.\"\") | *Top* *keywords*: **risk**^#1 **coverage**^#2 **individual**^#3 **work**^#4 **selection**^#5\"",
"title": ""
},
{
"docid": "1fec42beb84e2821dd90cd035446ea8d",
"text": "Something like cost = a × avg_spreadb + c × volatilityd × (order_size/avg_volume)e. Different brokers have different formulas, and different trading patterns will have different coefficients.",
"title": ""
},
{
"docid": "69e661b4e1154b9542f9d63bc5d62bbb",
"text": "So I did some queries on Google Scholar, and the term of art academics seem to use is target date fund. I notice divided opinions among academics on the matter. W. Pfau gave a nice set of citations of papers with which he disagrees, so I'll start with them. In 1969, Paul Sameulson published the paper Lifetime Portfolio Selection By Dynamic Stochaistic Programming, which found that there's no mathematical foundation for an age based risk tolerance. There seems to be a fundamental quibble relating to present value of future wages; if they are stable and uncorrelated with the market, one analysis suggests the optimal lifecycle investment should start at roughly 300 percent of your portfolio in stocks (via crazy borrowing). Other people point out that if your wages are correlated with stock returns, allocations to stock as low as 20 percent might be optimal. So theory isn't helping much. Perhaps with the advent of computers we can find some kind of empirical data. Robert Shiller authored a study on lifecycle funds when they were proposed for personal Social Security accounts. Lifecycle strategies fare poorly in his historical simulation: Moreover, with these life cycle portfolios, relatively little is contributed when the allocation to stocks is high, since earnings are relatively low in the younger years. Workers contribute only a little to stocks, and do not enjoy a strong effect of compounding, since the proceeds of the early investments are taken out of the stock market as time goes on. Basu and Drew follow up on that assertion with a set of lifecycle strategies and their contrarian counterparts: whereas a the lifecycle plan starts high stock exposure and trails off near retirement, the contrarian ones will invest in bonds and cash early in life and move to stocks after a few years. They show that contrarian strategies have higher average returns, even at the low 25th percentile of returns. It's only at the bottom 5 or 10 percent where this is reversed. One problem with these empirical studies is isolating the effect of the glide path from rebalancing. It could be that a simple fixed allocation works plenty fine, and that selling winners and doubling down on losers is the fundamental driver of returns. Schleef and Eisinger compare lifecycle strategy with a number of fixed asset allocation schemes in Monte Carlo simulations and conclude that a 70% equity, 30% long term corp bonds does as well as all of the lifecycle funds. Finally, the earlier W Pfau paper offers a Monte Carlo simulation similar to Schleef and Eisinger, and runs final portfolio values through a utility function designed to calculate diminishing returns to more money. This seems like a good point, as the risk of your portfolio isn't all or nothing, but your first dollar is more valuable than your millionth. Pfau finds that for some risk-aversion coefficients, lifecycles offer greater utility than portfolios with fixed allocations. And Pfau does note that applying their strategies to the historical record makes a strong recommendation for 100 percent stocks in all but 5 years from 1940-2011. So maybe the best retirement allocation is good old low cost S&P index funds!",
"title": ""
},
{
"docid": "5a471ff2224383dc5a4b1d140d6501ee",
"text": "The methodology for divisor changes is based on splits and composition changes. Dividends are ignored by the index. Side note - this is why, in my opinion, that any discussion of the Dow's change over a long term becomes meaningless. Ignoring even a 2% per year dividend has a significant impact over many decades. The divisor can be found at http://wsj.com/mdc/public/page/2_3022-djiahourly.html",
"title": ""
},
{
"docid": "61a0389e9614cc542b0d2148ce23e79e",
"text": "Here is a list of threads in other subreddits about the same content: * [An alternative entrepreneur principle. | The Dismal Science](https://www.reddit.com/r/Economics/comments/79fl0a/an_alternative_entrepreneur_principle_the_dismal/) on /r/Economics with 1 karma (created at 2017-10-29 17:13:29 by /u/The_man_who_sold) ---- ^^I ^^am ^^a ^^bot ^^[FAQ](https://www.reddit.com/r/DuplicatesBot/wiki/index)-[Code](https://github.com/PokestarFan/DuplicateBot)-[Bugs](https://www.reddit.com/r/DuplicatesBot/comments/6ypgmx/bugs_and_problems/)-[Suggestions](https://www.reddit.com/r/DuplicatesBot/comments/6ypg85/suggestion_for_duplicatesbot/)-[Block](https://www.reddit.com/r/DuplicatesBot/wiki/index#wiki_block_bot_from_tagging_on_your_posts) ^^Now ^^you ^^can ^^remove ^^the ^^comment ^^by ^^replying ^^delete!",
"title": ""
},
{
"docid": "fbef7be29da184e019befb83c4726298",
"text": "If we assume constant volatility, gamma increases as the stock gets closer to the strike price. Thus, delta is increasing at a faster rate as the stock reaches closer to ITM because gamma is the derivative of delta. As the stock gets deeper ITM, the gamma will slow down as delta reaches 1 or -1 (depends if a call or a put). Thus, the value of the option will change depending upon the level of the delta. I am ignoring volatility and time for this description. See this diagram from Investopedia: Gamma",
"title": ""
},
{
"docid": "f93ae4aa6cff425d08d6816d9cb7ee3f",
"text": "I understand that ITM have little time value, so they will have small time decay(theta), but why OTM has a lesser theta than ATM? The Time value represents uncertainty. That uncertainty decreases the farther away from ATM you get (in either direction). At-the-money, there is roughly a 50% chance that the option expires worthless. As you get deeper in-the-money, the change that is expires worthless decreases, so there is less uncertainty (there is more certainty that the option will pay off). As you go deeper OTM, the probability that the option expires worthless increases, so there is also less uncertainty. At the TTM decreases, the uncertainty (theta) decreases as well, since there is less time for the option to cross the strike from either direction. Similarly, as volatility decreases, theta decreases, since low-volatility stocks have a less change of crossing the strike.",
"title": ""
},
{
"docid": "a039e10d0c4d9d7534162540396437ee",
"text": "\"1. (a) \"\"Stephen Kinzer: The True Flag of American Empire #051\"\" by Guadalajara Geopolitics Institute, published on 14 June 2017: http://guadalajarageopolitics.com/2017/06/14/stephen-kinzer-true-flag-american-empire-051/ YouTube link: https://www.youtube.com/watch?v=qXSMHR-sN1s SoundCloud link: https://soundcloud.com/guadalajara-geopolitics/stephen-kinzer-the-true-flag-of-american-empire-051 Stephen Kinzer: http://stephenkinzer.com (b) Read https://www.reddit.com/r/worldpolitics/comments/6feg5x/putin_interview_did_russia_interfere_in_the/dihhtkq (c) \"\"The CIA's Holy War: No espionage operation or covert action was deemed too extreme by a CIA that saw only friends or enemies\"\" by Stephen Kinzer, published in the June 2016 issue of American History: http://watson.brown.edu/news/2016/cias-holy-war-written-stephen-kinzer PDF: [http://watson.brown.edu/files/watson/imce/news/2016/CIA's Holy Cold War Kinzer.pdf](http://watson.brown.edu/files/watson/imce/news/2016/CIA%27s%20Holy%20Cold%20War%20Kinzer.pdf) American History magazine: http://www.historynet.com/magazines/american-history-magazine (d) \"\"Covert Action: A Systems Approach\"\" by Kristen N. Wood, published December 2014: http://calhoun.nps.edu/bitstream/handle/10945/44692/14Dec_Wood_Kristen.pdf Source: http://hdl.handle.net/10945/44692 2. Read https://www.reddit.com/r/worldpolitics/comments/5b9bza/the_political_system_of_the_usa_is_characterised/d9mq22q Source: #1 at https://www.reddit.com/r/worldpolitics/comments/5bpc5x/an_update_for_my_readers_by_peter_levenda/d9q9006 Via: #26 at https://www.reddit.com/r/Missing411/comments/41oph0/supernatural_abductions_in_japanese_folklore_by/cz3we2z 3. \"\"Jasun Horsley, host of The Liminalist podcast, interviews Peter Levenda about 'The Individuation Chamber' (The Liminalist #11.5), published on 22 April 2015 -- their discussion includes 'Americanism and homogeneity, 'Star Trek' and colonialism, psychology disguised as politics, weaponizing Islam, Eisenhower and Dulles, the sorcerer's apprentice'\"\": #4a at https://www.reddit.com/r/worldpolitics/comments/5bpc5x/an_update_for_my_readers_by_peter_levenda/ddlcuvl Weaponizing religion (religion as a weapon), nuclear power/atomic power, atomic/nuclear bomb explosion: Start at 40:20 (40 minutes and 20 seconds) Source + Much More: #7c at https://www.reddit.com/r/worldpolitics/comments/5bpc5x/an_update_for_my_readers_by_peter_levenda/dfmc7kj Via: https://www.reddit.com/r/worldpolitics/comments/5bpc5x/an_update_for_my_readers_by_peter_levenda/d9q9006 Via: #26 at https://www.reddit.com/r/Missing411/comments/41oph0/supernatural_abductions_in_japanese_folklore_by/cz3we2z 4. Visit (a) https://www.reddit.com/r/worldpolitics/comments/6iho4e/a_house_armed_services_panel_intends_to_create_a/dj6bhas (b) https://www.reddit.com/r/worldpolitics/comments/6hfhh0/take_a_globe_spin_it_and_point_with_a_finger_to/dixva87 (c) https://www.reddit.com/r/worldpolitics/comments/6feg5x/putin_interview_did_russia_interfere_in_the/dihhtkq\"",
"title": ""
},
{
"docid": "8f10343a8acf5d0ed5592b93d1a308df",
"text": "It's ok if you haven't fleshed out the ideas yet. It's partially why I'm asking questions. Something you said seemed incorrect and it's better to verify than assume. I'll check out Friedman's video when I have time, though I've read up on him a bit and find some of his theories hold up and some don't. Can't be specific ATM though.",
"title": ""
},
{
"docid": "0044b61fb390a15d42caa49119414285",
"text": "I have had similar thoughts regarding alternative diversifiers for the reasons you mention, but for the most part they don't exist. Gold is often mentioned, but outside of 1972-1974 when the US went off the gold standard, it hasn't been very effective in the diversification role. Cash can help a little, but it also fails to effectively protect you in a bear market, as measured by portfolio drawdowns as well as std dev, relative to gov't bonds. There are alternative assets, reverse ETFs, etc which can fulfill a specific short term defensive role in your portfolio, but which can be very dangerous and are especially poor as a long term solution; while some people claim to use them for effective results, I haven't seen anything verifiable. I don't recommend them. Gov't bonds really do have a negative correlation to equities during periods in which equities underperform (timing is often slightly delayed), and that makes them more valuable than any other asset class as a diversifier. If you are concerned about rate increases, avoid LT gov't bond funds. Intermediate will work, but will take a few hits... short term bonds will be the safest. Personally I'm in Intermediates (30%), and willing to take the modest hit, in exchange for the overall portfolio protection they provide against an equity downturn. If the hit concerns you, Tips may provide some long term help, assuming inflation rises along with rates to some degree. I personally think Tips give up too much return when equity performance is strong, but it's a modest concern - Tips may suit you better than any other option. In general, I'm less concerned with a single asset class than with the long term performance of my total portfolio.",
"title": ""
},
{
"docid": "e445a0592214b800d5a666495d7d54d3",
"text": "It's called correlation. I found this: http://www.forexrazor.com/en-us/school/tabid/426/ID/437424/currency-pair-correlations it looks a good place to start Similar types of political economies will correlate together, opposite types won't. Also there are geographic correlations (climate, language etc)",
"title": ""
},
{
"docid": "9079ee498ba4f1d27f37c3bc2a997928",
"text": "Someone already mentioned that this is a risk-reversal, but as an aside, in the vol market (delta-hedged options) this is a fundamental skew trade. (buying calls, selling puts or vice versa). Initially vega neutral, the greek that this trade largely isolates is vanna (dvega/dspot or ddelta/dvol).",
"title": ""
},
{
"docid": "fdc4bec833f6668910eaae4a1fc0b2ba",
"text": "VXX VZX XVIZ and there are plenty others correlated to market volatility if you want the wildest hedge, use VXX, it is also the most liquid",
"title": ""
},
{
"docid": "5b9bddfbc13053744ab668020e549954",
"text": "Yes that is the case for the public company approach, but I was referring to the transaction approach: Firm A and Firm B both have $100 in EBITDA. Firm A has $50 in cash, Firm B has $100 in cash. Firm A sells for $500, Firm B sells for $600. If we didn't subtract cash before calculating the multiple: Firm A: 5x Firm B: 6x If we DO subtract cash before calculating the multiple: Firm A: 4.5x Firm B: 5x So yea, subtracting cash does skew the multiple.",
"title": ""
}
] |
fiqa
|
17aa99c2e50cf7a73463528f3d26a9b5
|
How do I bring money overseas?
|
[
{
"docid": "5985a7c041ca425986510e782c5f88bc",
"text": "\"This page from TripAdvisor may be of interest. Look at what fees are charged on your ATM cards and credit cards, and consider overpaying your credit card so you have a credit balance that you can draw on for cash \"\"advances\"\" from ATMs that will dispense in local currency. Depending on what fees your bank charges, you may get a better rate than the forex cash traders at the airport. Edit: Cards may not always have the best rate. I recently heard from a traveler who was able to use a locally but not globally dominant currency to buy cash of a major currency at a shopping mall (with competitive forex traders) at rates even better than the mid-market rates posted at xe.com and similar places; I don't think you'll have that experience going from Australia to Malaysia (but another traveler reading this might have a different pair). In my experience the card rates are slightly worse than those and the airport forex traders significantly worse.\"",
"title": ""
},
{
"docid": "b454bdd66734e04e3cd3b92bb4779f8f",
"text": "I'm an Australian who just got back from a trip to Malaysia for two weeks over the New Year, so this feels a bit like dejavu! I set up a 28 Degrees credit card (my first ever!) because of their low exchange rate and lack of fees on credit card transactions. People say it's the best card for travel and I was ready for it. However, since Malaysia is largely a cash economy (especially in the non-city areas), I found myself mostly just withdrawing money from my credit card and thus getting hit with a cash advance fee ($4) and instant application of the high interest rate (22%) on the money. Since I was there already and had no other alternatives, I made five withdrawals over the two weeks and ended up paying about $21 in fees. Not great! But last time I travelled I had a Commonwealth Bank Travel Money Card (not a great idea), and if I'd used that instead on this trip and given up fees for a higher exchange rate, I would have been charged an extra $60! Presumably my Commonwealth debit card would have been the same. This isn't even including mandatory ATM fees. If I've learned anything from this experience and these envelope calculations I'm doing now, it's these:",
"title": ""
}
] |
[
{
"docid": "5d5612af7d495b352eeb63110fcfde9a",
"text": "He can send you a check. This will move the burden of GBP->USD conversion to him (unless the GBP amount is preset, then you'll be the one to pay for conversion either way). You can then deposit the USD check in any Israeli bank (they'll charge commission for the deposit and the USD->ILS conversion). Another, and from my experience significantly cheaper, option would be to wire transfer directly to your account. If you have a USD account and he'll transfer USD out - it will be almost at no cost to you, if you don't have a USD account check with your bank how to open it, or pay for USD->ILS conversion.",
"title": ""
},
{
"docid": "4e6aa2924261e912bdbcdaa2d5fed67f",
"text": "\"First thing is that your English is pretty damn good. You should be proud. There are certainly adult native speakers, here in the US, that cannot write as well. I like your ambition, that you are looking to save money and improve yourself. I like that you want to move your funds into a more stable currency. What is really tough with your plan and situation is your salary. Here in the US banks will typically have minimum deposits that are high for you. I imagine the same is true in the EU. You may have to save up before you can deposit into an EU bank. To answer your question: Yes it is very wise to save money in different containers. My wife and I have one household savings account. Yet that is broken down by different categories (using a spreadsheet). A certain amount might be dedicated to vacation, emergency fund, or the purchase of a luxury item. We also have business and accounts and personal accounts. It goes even further. For spending we use the \"\"envelope system\"\". After our pay check is deposited, one of us goes to the bank and withdraws cash. Some goes into the grocery envelope, some in the entertainment envelope, and so on. So yes I think you have a good plan and I would really like to see a plan on how you can increase your income.\"",
"title": ""
},
{
"docid": "b107f95e9f5c4b948052d8f9812b1d38",
"text": "The Transfer of funds outside of Bangladesh is restricted. Any transfers required the permission of Bangladesh Bank [Central Bank]. So the only legal option is to apply for the permission and see if its granted. Western Union is a Money Transfer and typically is good for getting funds into Bangladesh, most expats in Bangladesh would use the service. It can unfortunately not be used other way round.",
"title": ""
},
{
"docid": "8f02485a9df69d2c5f96f91ea78db1b1",
"text": "\"I have heard that I can give 10k as a gift in cash for my aunt to take on the plane. Please don't, for her own safety. Don't know when was the last you've been to Russia, but that's not a place to walk around with $10K in cash in your pocket. For the rest, the 20k, I am not sure what is the best course of action. Would something like Western Union, Paypal or Bank Wire Transfer be the best course of action? Wire transfer would be the safest option. Would there be tax implications for me as well? Depends on where you are tax resident and where you are a citizen. Some countries have \"\"gift tax\"\", but most don't. If you're a US tax resident, then you're subject to US gift tax rules. Your gifts are taxable if they exceed $14K per year per person. So your $30K to your mom is taxable. But your $10K to your mom, $10K to your dad and $10K to your aunt is not. You cannot however control what they do with it.\"",
"title": ""
},
{
"docid": "bdeb757b60aa6f7d68a075db4b6f8edf",
"text": "Do an semi-online transfer. I had a similar situation where i had to transfer 5K USD to a commercial entity. You can request the publisher to give you their bank account details. You will need the SWIFT code of the bank( SWIFT code is a international code that each bank gets to transfer money) You will need bank account number, account name, bank address, address of the publisher. Then just walk into your bank with the above details. Note that you will have to visit a branch in your city that allows forex transfers. They will give you a set of forms to fill up. The above details will be needed to fill up these forms In addition to the above, you will be asked to fill up a purpose code maintained by RBI. This code is used by RBI to understand the reason why you are transferring the money. The bank will provide you with a sheet which will have these codes and explanation of these codes. Read through the codes and in case of any questions ask the bank officials to help Tip: If you have accounts with any private sector banks, please approach them. Public sector banks will give you tough time Hope this helps! Regards, Ravi",
"title": ""
},
{
"docid": "07a3309a18a2c1be2bdf75d191c98722",
"text": "If this is your money, and if you can - if asked - prove that you legally made it, there is no limit. You pay taxes on your income, so sending it into the world is tax free. Your citizenship is not relevant for that.",
"title": ""
},
{
"docid": "ea4890b3e7eff99fd2658e853e07baca",
"text": "\"The new information helps a little, but you're still stuck as far as doing exactly what you asked. The question that you really should be asking is \"\"How do I deposit money into my BofA checking account from Italy?\"\" If you can figure that out, then the whole part about your father's AmEx card really becomes irrelevant. He might get that money from a cash advance on his AmEx card or he might get it from somewhere else. I think there's some small chance that if you call BofA and ask the right question, they may give you an answer that will let you make this deposit. I tend to doubt it, but this would at least give you a chance. Other than that, you should probably look into some options based in Italy. For example, get the cash from your father and open a bank account in Italy. Maybe you can buy a pre-paid Visa card with the cash to use while you're there. Maybe use traveler's checks for the rest of your trip. Etc. What is available and what makes sense will still depend on a lot of details that we don't have (like how long you're staying and what type of entry visa you got when you entered Italy).\"",
"title": ""
},
{
"docid": "c11c09b85c443880b8d617752cb05e2a",
"text": "\"For some reason can't transfer it directly to his account overseas (something to do with security codes, authorized payees and expired cards). Don't become someone's financial intermediary. Find out exactly why he can't transfer the money himself, and then if you want to help him, solve that problem for him. Helping him fix his issue with his expired card, or whatever the real problem is, would be a good thing to do. Allowing him to involve you in the transaction, would be a bad thing to do. Possible problems which might be caused by becoming directly involved in the transaction: -The relative is being scammed themselves, and doesn't realize it / doesn't realize the risks, and either wants you to take the risk, or simply thinks there is no risk but needs administrative help. -The person contacting you is not the relative - perhaps they are faking that person's identity, and are using your trust to defraud you. -The person is committing some form of fraud, money laundering, or worse, and is directly trying to defraud you in order to keep their hands clean. -The transaction may be perfectly legal, but is considered taxable in one or more countries. By getting involved, you might face tax filing obligations, or even tax payment obligations. -The transaction may be perfectly legal and legitimate, but might accidentally get picked up as potential fraud by a financial monitoring system, causing the funds to be held, and your account to be flagged for further investigation, creating headaches for you until it becomes resolved. There are possibly other ways that this can go awry, but these are the biggest possibilities I can think of. The only possible 'good' outcome here is that everything goes smoothly, and it works exactly as well as if your relative's \"\"administrative problems\"\" were solved first, and the money went through his own account. Handwaving about why your account is needed and his is faulty is a big red flag. If it is truly just an administrative issue on his end, help him fix that issue instead.\"",
"title": ""
},
{
"docid": "0c2dfe34ea55af11139b3dade5f2cb38",
"text": "I assume the same criteria apply for this as your previous question. You want to physically transfer in excess of 50,000 USD multiple times a week and you want the transportation mechanism to be instant or very quick. I don't believe there is any option that won't raise serious red flags with the government entities you cross the boundaries of. Even a cheque, which a person in the comments of OP's question suggests, wouldn't be sufficient due to government regulation requiring banks to put holds on such large amounts.",
"title": ""
},
{
"docid": "c0568dee1a562b5ddf66be45c0d8fcde",
"text": "\"One option would be to physically ship the money from Israel to the US. I quickly ran the numbers for shipping different amounts of $100 bills (One pound equals 454 bills) using a popular shipping company. Here are the results: The \"\"sweet\"\" spot is $100,000. That would only cost you $76 to ship which is just 0.08% of the amount being transferred. Of course, the shipping company's website says international shipments of money are prohibited. Their website, however, let me categorize the shipment as \"\"money\"\". Strange.\"",
"title": ""
},
{
"docid": "8aa4745955d3eeaef5710f6980b26d55",
"text": "You could buy a money order with your cash, then mail the money order to Deutsche Bank Germany for deposit into your account. You could also buy a prepaid debit card (like a Visa/AMEX giftcard) with your cash. Then, open a new Paypal account and add this prepaid card. Finally, send money to yourself using the prepaid card as the funding source. You could use a money transfer service, like Western Union, to transfer the cash to a friend/family in Germany. Then ask them to deposit it for you at Deutsche Bank Germany.",
"title": ""
},
{
"docid": "481656d627aac6f23fffa2d95abc9adc",
"text": "Just tell your bank where you're going so they don't lock your account, and then take your Visa, and take enough cash to survive if something happens to your Visa account (sometimes banks lock them anyways out of idiocy). I usually take about 600 bucks cash for a week excursion (enough for food and a shack, or a mansion if you're in Asia). I figure, I'm carrying my passport which is worth thousands to criminals abroad around my neck. Why worry about carrying a little cash. As far as the Visa goes, just make sure your bank doesn't charge enormous fees for currency conversion. As far as carrying the local currency goes. I don't recommend it. Just figure out the conversion rate, and you'll save about 5% of your money from fees converting to and from. If you're going to Russia, do convert your currency first.",
"title": ""
},
{
"docid": "33da7c09e1a08fdf982f837b5ce5fe70",
"text": "Most Banks allow to make an international transfer. As the amounts is very small, there is no paperwork required. Have your dad walk into any Bank and request for a transfer. He should be knowing your Bank's SWIFT BIC, Name and Address and account number. Edit: Under the liberalised remittance scheme, any individual can transfer upto 1 million USD or eq. A CA certificate is required. Please get in touch with your bank in India for exact steps",
"title": ""
},
{
"docid": "800c5783f99b60b8c046861416bb28c6",
"text": "If you trust the other party, an international bank wire would be the quickest, easiest, and cheapest option. It is the standard way to pay for something overseas from the United States. Unfortunately, in most cases, they are not reversible. I don't believe Paypal is an option for an amount that large. Escrow companies do exist, but you would have to research those on a case by case basis to see if any fit the criteria for your transaction and the countries involved. I'll also add: If it were me, and there was no way to get references or verify the person's identity and intent to my satisfaction, then I would probably consider hopping on a plane. For that amount of money, I would verify the person and items are legitimate, in person, and then wire the money.",
"title": ""
},
{
"docid": "e445fbec7bd8b703081fde4dce9a5c7b",
"text": "Nationwide Flex Account lets you receive money internationally for free, but you have to pay to send it. It meets all your other criteria.",
"title": ""
}
] |
fiqa
|
2248ef6792731d4b65d36f21d49292ac
|
Should I invest in my house, when it's in my wife's name?
|
[
{
"docid": "4b00d105170bc88586f0b766974b7dbe",
"text": "The best answer to this question will depend on you and your wife. What is 'fair' for some may not be 'fair' for others. Some couples split expenses 50:50. Some split proportionately based on income. Some pool everything together. What works best for you will depend on your relative incomes, your financial goals, living standards, and most importantly, your personal beliefs. Here is a great question with various viewpoints: How to organize bank accounts with wife. It doesn't touch heavily on home ownership / pre-nuptial agreements, but might be a good starting point to getting you to think about your options. Consider providing another loan to your wife for additional investments in the home. It seems you are both comfortable with the realities of the pre-nuptial agreement; one of those realities seems to be that in the event of divorce you would lose access to the house. Loaning money has the benefit of allowing for the improvements to be done immediately, while clearly delineating what you have spent on the home from what she has spent on the home. However, this may not be 'fair', depending on how you both define the term. Have you discussed how expenses and savings would be split between you? Since there is no mortgage on the house, she has effectively contributed her pre-marital assets towards paying substantially all of your housing costs. It may be 'fair' for you to contribute to housing costs by at least splitting maintenance 50:50, or it may not be. Hopefully you talked about finances before you got married, and if not, now would be the best time to start. I personally would hate to have an 'uneasy' feeling about a relationship because I failed to openly communicate about finances.",
"title": ""
},
{
"docid": "a41d142cd350fe9e91d6300c38723bd1",
"text": "Have you talked with her about this? On the one hand you have a point. Given the prenuptial agreements why should you invest in something that you can never have interest in. However, you also live in the property. You did not go into the arrangements but presumably you should be contributing to the upkeep of the home as otherwise you would live there for free. Additionally you did not mention it but it sounds like the prenuptial does not cover your assets. In the event of divorce she, presumably, would own half of your 400K. Correct? The key here is a conversation. What is right for the two of you? While some might be very uncomfortable with the situation, as is, you two seem to be okay with it. Go from there, build on it. Come up with something that is equitable for both parties and your heirs.",
"title": ""
},
{
"docid": "fcde0c9bc541fa6e39fe1e997dadcc4c",
"text": "If you are concerned about it being inequitable due to the prenuptial agreement, discuss the idea of amending the prenuptial agreement to give you some consideration for your investments in the house. Prenuptial agreements often get amended over the course of a marriage. How do you proceed? It has to start with discussion. It's not an unreasonable concern given your legal separation of assets, so broach the subject and go from there. Perhaps you'll find there's a good reason for you to invest in the property even without having interest in it, who knows.",
"title": ""
},
{
"docid": "583cffbcbec14df4b5a6fb12db7fbfff",
"text": "\"The prenup complicates things. The traditional vow of a marriage is \"\"What's mine is yours, what's yours is mine\"\". With such a traditional marriage it doesn't matter too much which partner's name something is in, in the event of a divorce the assets of the couple would be considered as a whole and then split. But you have a prenup which is presumably intended to change this traditional arrangement (and may or may not actually be enforceable). I think you are as such right to be wary. I think your only way forward long term is to amend the prenup and/or the legal status of the house to recognize it as a shared asset that you will both be contributing to and that it's value should be split in some way in the event of a divorce. In exchange you should probably be contributing some or all of the cash pile you have from selling your house to the common pot. Another loan may seem like a good option in the short term but in the long term the appreciation on a house is likely to be worth more than any interest on the loan (assuming you are using an interest rate comparable to commercial mortgage deals), plus any interest may well end up being taxable.\"",
"title": ""
},
{
"docid": "f0e42866e18ab51395e88ba021614b7d",
"text": "I'm not going to speculate on the nature of your relationship with your wife, but the fact that you are worried about what would happen in the event of a divorce is a bit concerning. Presumably you married her with the intent of staying together forever, so what's the big deal if you spend 50k upgrading the house you live in, assuming you won't get divorced? Now, if you really are worried about something happening in the future, you might want to seek legal advice about the content of the prenup. I am guessing if the 400k were your assets before marriage, you have full claim to that amount in the event of a divorce*. If you document the loan, or make some agreement, I would think you would have claim to at least some of the house's appreciation due to the renovations if they were made with your money*. *obligatgory IANAL",
"title": ""
},
{
"docid": "5fb65a985b04ebc0e224cab352a24540",
"text": "\"It is my opinion that part of having a successful long-term relationship is being committed to the other person's success and well-being. This commitment is a form of investment in and of itself. The returns are typically non-monetary, so it's important to understand what money actually is. Money is a token people exchange for favors. If I go to a deli and ask for a sandwich. I give them tokens for the favor of having received a sandwich. The people at the deli then exchange those tokens for other favors, and that's the entire economy: people doing favors for other people in exchange for tokens that represent more favors. Sometimes being invested in your spouse is giving them a back rub when they've had a hard day. The investment pays off when you have a hard day and they give you a back rub. Sometimes being invested in your spouse is taking them to a masseuse for a professional massage. The investment pays off when they get two tickets to that thing you love. At the small scale it's easy to mostly ignore minor monetary discrepancies. At the large scale (which I think £50k is plenty large enough given your listed net worth) it becomes harder to tell if the opportunity cost will be worth making that investment. It pretty much comes down to: Will the quality-of-life improvements from that investment be better than the quality-of-life improvements you receive from investing that money elsewhere? As far as answering your actual question of: How should I proceed? There isn't a one-size fits all answer to this. It comes down to decisions you have to make, such as: * in theory it's easy to say that everyone should be able to trust their spouse, but in practice there are a lot of people who are very bad at handling money. It can be worthwhile in some instances to keep your spouse at an arms length from your finances for their own good, such as if your spouse has a gambling addiction. With all of that said, it sounds like you're living in a £1.5m house rent-free. How much of an opportunity cost is that to your wife? Has she been freely investing in your well-being with no explicit expectation of being repaid? This can be your chance to provide a return on her investment. If it were me, I'd make the investment in my spouse, and consider it \"\"rent\"\" while enjoying the improvements to my quality of life that come with it.\"",
"title": ""
}
] |
[
{
"docid": "c10ace4aedb72bf50cc35dc0869e866d",
"text": "\"I'm not an attorney or a tax advisor. The following is NOT to be considered advice, just general information. In the US, \"\"putting your name on the deed\"\" would mean making you a co-owner. Absent any other legal agreement between you (e.g. a contract stating each of you owns 50% of the house), both of you would then be considered to own 100% of the house, jointly and severally: In addition, the IRS would almost certainly interpret the creation of your ownership interest as a gift from your partner to you, making them liable for gift tax. The gift tax could be postponed by filing a gift tax return, which would reduce partner's lifetime combined gift/estate tax exemption. And if you sought to get rid of your ownership interest by giving it to your partner, it would again be a taxable gift, with the tax (or loss of estate tax exemption) accruing to you. However, it is likely that this is all moot because of the mortgage on the house. Any change to the deed would have to be approved by the mortgage holder and (if so approved) executed by a title company/registered closing agent or similar (depending on the laws of your state). In my similar case, the mortgage holder refused to add or remove any names from the deed unless I refinanced (at a higher rate, naturally) making the new partners jointly liable for the mortgage. We also had to pay an additional title fee to change the deed.\"",
"title": ""
},
{
"docid": "6f1757e12b8309837d76e792e3845e77",
"text": "\"I don't believe it makes a difference at the federal level -- if you file taxes jointly, gains, losses, and dividends appear on the joint tax account. If you file separately, I assume the tax implications only appear on the owner's tax return. Then the benefits might outweigh the costs, but only if you correctly predict market behavior and the behavior of your positions. For example, lets say you lose 30k in the market in one year, and your spouse makes 30k. If you're filing jointly, the loss washes out the gain, and you have no net taxes on the investment. If you're filing separately, you can claim 3k in loss (the remaining 27k in loss is banked to future tax years), but your spouse pays taxes on 30k in gain. Where things get more interesting is at the state level. I live in a \"\"community property state,\"\" where it doesn't matter whether you have separate accounts or not. If I use \"\"community money\"\" to purchase a stock and make a million bucks, that million bucks is shared by the two of us, whether the account is in my name our in our name. income during the marriage is considered community property. However property you bring into the marriage is not. And inheritances are not community property -- until co-mingled. Not sure how it works in other states. I grew up in what's called an \"\"equitable property state.\"\"\"",
"title": ""
},
{
"docid": "488a2e2da0765eb148803ded8cdeccfb",
"text": "Like @littleadv, I don't consider a mortgage on a primary residence to be a low-risk investment. It is an asset, but one that can be rather illiquid, depending on the nature of the real estate market in your area. There are enough additional costs associated with home-ownership (down-payment, insurance, repairs) relative to more traditional investments to argue against a primary residence being an investment. Your question didn't indicate when and where you bought your home, the type of home (single-family, townhouse, or condo) the nature of your mortgage (fixed-rate or adjustable rate), or your interest rate, but since you're in your mid-20s, I'm guessing you bought after the crash. If that's the case, your odds of making a profit if/when you sell your home are higher than they would be if you bought in the 2006/2007 time-frame. This is no guarantee of course. Given the amount of housing stock still available, housing prices could still fall further. While it is possible to lose money in all sorts of investments, the illiquid nature of real estate makes it a lot more difficult to limit your losses by selling. If preserving principal is your objective, money market funds and treasury inflation protected securities are better choices than your home. The diversification your financial advisor is suggesting is a way to manage risk. Not all investments perform the same way in a given economic climate. When stocks increase in value, bonds tend to decrease (and vice versa). Too much money in a single investment means you could be wiped out in a downturn.",
"title": ""
},
{
"docid": "2368a6a6d2c21902782f59fdc6929bff",
"text": "It's not your money. What does your wife think of this? You know, the withdrawal is subject to full tax at your marginal rate as well as a 10% penalty. That's quite a price to pay, don't do it.",
"title": ""
},
{
"docid": "419c9242f195bf26a718bf4e307dc73d",
"text": "You are thinking about this very well. With option one, you need to think about the 5 D's in the contract. What happens when one partner becomes disinterested, divorced (break up), does drugs (something illegal), dies or does not agree with decisions. One complication if you buy jointly, and decide to break up/move, on will the other partner be able to refinance? If not the leaving person will probably not be able to finance a new home as the banks are rarely willing to assume multiple mortgage risks for one person. (High income/large down payment not with standing.) I prefer the one person rents option to option one. The trouble with that is that it sounds like you are in better position to be the owner, and she has a higher emotional need to own. If she is really interested in building equity I would recommend a 15 year or shorter mortgage. Building equity in a 30 year is not realistic.",
"title": ""
},
{
"docid": "4fd9b92c9d79afce35eef887de01bad3",
"text": "Before doing anything else: you want a lawyer involved right from the beginning, to make sure that something reasonable happens with the house if one of you dies or leaves. Seriously, you'll both be safer and happier if it's all explicit. How much you should put on the house is not the right question. Houses don't sell instantly, and while you can access some of their stored value by borrowing against them that too can take some time to arrange. You need to have enough operating capital for normal finances, plus an emergency reserve to cover unexpectedly being out of work or sudden medical expenses. There are suggestions for how much that should be in answers to other questions. After that, the question is whether you should really be buying a house at all. It isn't always a better option than renting and (again as discussed in answers to other questions) there are ongoing costs in time and upkeep and taxes and insurance. If you're just thinking about the financials, it may be better to continue to rent and to invest the savings in the market. The time to buy a house is when you have the money and a reliable income, plan not to move for at least five years, really want the advantages of more elbow room and the freedom to alter the place to suit your needs (which will absorb more money)... As far as how much to put down vs. finance: you really want a down payment of at least 20%. Anything less than that, and the bank will insist you pay for mortgage insurance, which is a significant expense. Whether you want to pay more than that out of your savings depends on how low an interest rate you can get (this is a good time in that regard) versus how much return you are getting on your investments, combined with how long you want the mortgage to run and how large a mortgage payment you're comfortable committing to. If you've got a good investment plan in progress and can get a mortgage which charges a lower interest rate than your investments can reasonably be expected to pay you, putting less down and taking a larger mortgage is one of the safer forms of leveraged investing... IF you're comfortable with that. If the larger mortgage hanging over you is going to make you uncomfortable, this might not be a good answer for you. It's a judgement call. I waited until i'd been in out of school about 25 years before I was ready to buy a house. Since i'd been careful with my money over that time, I had enough in investments that I could have bought the house for cash. Or I could have gone the other way and financed 80% of it for maximum leverage. I decided that what I was comfortable with was financing 50%. You'll have to work thru the numbers and decide what you are comfortable with. But I say again, if buying shared property you need a lawyer involved. It may be absolutely the right thing to do ... but you want to make sure everything is fully spelled out... and you'll also want appropriate terms written into your wills. (Being married would carry some automatic assumptions about joint ownership and survivor rights... but even then it's safer to make it all explicit.) Edit: Yes, making a larger down payment may let you negotiate a lower interest rate on the loan. You'll have to find out what each bank is willing to offer you, or work with a mortgage broker who can explore those options for you.",
"title": ""
},
{
"docid": "aa381432a94c74fa8cc9b5ffd9ec4751",
"text": "Owning a stock via a fund and selling it short simultaneously should have the same net financial effect as not owning the stock. This should work both for your personal finances as well as the impact of (not) owning the shares has on the stock's price. To use an extreme example, suppose there are 4 million outstanding shares of Evil Oil Company. Suppose a group of concerned index fund investors owns 25% of the stock and sells short the same amount. They've borrowed someone else's 25% of the company and sold it to a third party. It should have the same effect as selling their own shares of the company, which they can't otherwise do. Now when 25% of the company's stock becomes available for purchase at market price, what happens to the stock? It falls, of course. Regarding how it affects your own finances, suppose the stock price rises and the investors have to return the shares to the lender. They buy 1 million shares at market price, pushing the stock price up, give them back, and then sell another million shares short, subsequently pushing the stock price back down. If enough people do this to effect the share price of a stock or asset class, the managers at the companies might be forced into behaving in a way that satisfies the investors. In your case, perhaps the company could issue a press release and fire the employee that tried to extort money from your wife's estate in order to win your investment business back. Okay, well maybe that's a stretch.",
"title": ""
},
{
"docid": "518790024d1d008884adf628880d51c1",
"text": "I personally think that you should do whatever you believe works best. I am not married but when I get married I would also want to do what you are doing with having a joint account for certain things but also still having seperate accounts. I find this is a good approach so that neither of you is dependent finanically on the other one. Also, if you want to buy a present for your wife you would do it with your own money and not the joint account money. I hope my answer helps.",
"title": ""
},
{
"docid": "ae20a73a57469e8a6781b4deec5cc182",
"text": "You're being too hard on yourself. You've managed to save quite a bit, which is more than most people ever do. You're in a wonderful position, actually -- you have savings and time! You don't mention how long you want/need to continue working, but I'll assume 20 years or so? You don't have to invest it all at once. Like Pete B says, index funds (just read what Mr. Buffett said in recent news: he'd tell his widow to invest in the S&P 500 Index and not Berkshire Hathaway!) should be a decent percentage. You can also pick a target fund from any of the major investment firms (fees are higher than an Index, but it will take care of any asset allocation decisions). Put some in each. Also look at retirement accounts to take advantage of tax-deferred or tax-free growth, but that's another question and country-specific. In any case, don't even blink when the market goes down. And it will go down. If you're still working, earning, and saving, it'll just be another opportunity to buy more at lower prices. As for the house, no reason you can't invest and save for a house. Invest some for the long term and set aside the rest for the house in 1-5 years. If you don't think you'll ever really buy the house, though, invest the majority of it for the long-term: I have a feeling from the tone of your question that you tend to put off the big financial decisions. So if you won't really buy the house, just admit it to yourself now!",
"title": ""
},
{
"docid": "98b07a3bada1706a14716f012eaff827",
"text": "\"Accounting for this properly is not a trivial matter, and you would be wise to pay a little extra to talk with a lawyer and/or CPA to ensure the precise wording. How best to structure such an arrangement will depend upon your particular jurisdiction, as this is not a federal matter - you need someone licensed to advise in your particular state at least. The law of real estate co-ownership (as defined on a deed) is not sufficient for the task you are asking of it - you need something more sophisticated. Family Partnership (we'll call it FP) is created (LLC, LLP, whatever). We'll say April + A-Husband gets 50%, and Sister gets 50% equity (how you should handle ownership with your husband is outside the scope of this answer, but you should probably talk it over with a lawyer and this will depend on your state!). A loan is taken out to buy the property, in this case with all partners personally guaranteeing the loan equally, but the loan is really being taken out by FP. The mortgage should probably show 100% ownership by FP, not by any of you individually - you will only be guaranteeing the loan, and your ownership is purely through the partnership. You and your husband put $20,000 into the partnership. The FP now lists a $20,000 liability to you, and a $20,000 asset in cash. FP buys the $320,000 house (increase assets) with a $300,000 mortgage (liability) and $20,000 cash (decrease assets). Equity in the partnership is $0 right now. The ownership at present is clear. You own 50% of $0, and your sister owns 50% of $0. Where'd your money go?! Simple - it's a liability of the partnership, so you and your husband are together owed $20,000 by the partnership before any equity exists. Everything balances nicely at this point. Note that you should account for paying closing costs the same as you considered the down payment - that money should be paid back to you before any is doled out as investment profit! Now, how do you handle mortgage payments? This actually isn't as hard as it sounds, thanks to the nature of a partnership and proper business accounting. With a good foundation the rest of the building proceeds quite cleanly. On month 1 your sister pays $1400 into the partnership, while you pay $645 into the partnership. FP will record an increase in assets (cash) of $1800, an increase in liability to your sister of $1400, and an increase in liability to you of $645. FP will then record a decrease in cash assets of $1800 to pay the mortgage, with a matching increase in cost account for the mortgage. No net change in equity, but your individual contributions are still preserved. Let's say that now after only 1 month you decide to sell the property - someone makes an offer you just can't refuse of $350,000 dollars (we'll pretend all the closing costs disappeared in buying and selling, but it should be clear how to account for those as I mention earlier). Now what happens? FP gets an increase in cash assets of $350,000, decreases the house asset ($320,000 - original purchase price), and pays off the mortgage - for simplicity let's pretend it's still $300,000 somehow. Now there's $50,000 in cash left in the partnership - who's money is it? By accounting for the house this way, the answer is easily determined. First all investments are paid back - so you get back $20,000 for the down payment, $645 for your mortgage payments so far, and your sister gets back $1400 for her mortgage payment. There is now $27,995 left, and by being equal partners you get to split it - 13,977 to you and your husband and the same amount to your sister (I'm keeping the extra dollar for my advice to talk to a lawyer/CPA). What About Getting To Live There? The fact is that your sister is getting a little something extra out of the deal - she get's the live there! How do you account for that? Well, you might just be calling it a gift. The problem is you aren't in any way, shape, or form putting that in writing, assigning it a value, nothing. Also, what do you do if you want to sell/cash out or at least get rid of the mortgage, as it will be showing up as a debt on your credit report and will effect your ability to secure financing of your own in the future if you decide to buy a house for your husband and yourself? Now this is the kind of stuff where families get in trouble. You are mixing personal lives and business arrangements, and some things are not written down (like the right to occupy the property) and this can really get messy. Would evicting your sister to sell the house before you all go bankrupt on a bad deal make future family gatherings tense? I'm betting it might. There should be a carefully worded lease probably from the partnership to your sister. That would help protect you from extra court costs in trying to determine who has the rights to occupy the property, especially if it's also written up as part of the partnership agreement...but now you are building the potential for eviction proceedings against your sister right into an investment deal? Ugh, what a potential nightmare! And done right, there should probably be some dollar value assigned to the right to live there and use the property. Unless you just want to really gift that to your sister, but this can be a kind of invisible and poorly quantified gift - and those don't usually work very well psychologically. And it also means she's going to be getting an awfully larger benefit from this \"\"investment\"\" than you and your husband - do you think that might cause animosity over dozens and dozens of writing out the check to pay for the property while not realizing any direct benefit while you pay to keep up your own living circumstances too? In short, you need a legal structure that can properly account for the fact that you are starting out in-equal contributors to your scheme, and ongoing contributions will be different over time too. What if she falls on hard times and you make a few of the mortgage payments? What if she wants to redo the bathroom and insists on paying for the whole thing herself or with her own loan, etc? With a properly documented partnership - or equivalent such business entity - these questions are easily resolved. They can be equitably handled by a court in event of family squabble, divorce, death, bankruptcy, emergency liquidation, early sale, refinance - you name it. No percentage of simple co-ownership recorded on a deed can do any of this for you. No math can provide you the proper protection that a properly organized business entity can. I would thus strongly advise you, your husband, and your sister to spend the comparatively tiny amount of extra money to get advice from a real estate/investment lawyer/CPA to get you set up right. Keep all receipts and you can pay a book keeper or the accountant to do end of the year taxes, and answer questions that will come up like how to properly account for things like depreciation on taxes. Your intuition that you should make sure things are formally written up in times when everyone is on good terms is extremely wise, so please follow it up with in-person paid consultation from an expert. And no matter what, this deal as presently structured has a really large built-in potential for heartache as you have three partners AND one of the partners is also renting the property partially from themselves while putting no money down? This has a great potential to be a train wreck, so please do look into what would happen if these went wrong into some more detail and write up in advance - in a legally binding way - what all parties rights and responsibilities are.\"",
"title": ""
},
{
"docid": "919c215dc649a8d23306318f5a6a9451",
"text": "Many partnership agreements include a shotgun clause: one person sets a price, the other can either buy at that price or sell at it. It's rather brutal. You can make offers that you know are less than the company is worth if you're sure the other person will have to take that money from you, say if you know they can't run the company without you. He has asked for $X to be bought out, and failing that he would like to keep owning his half and send his wife (who may very well be competent, but who among other things has a very ill husband to deal with) to take his place. If he can occasionally contribute to the overall vision, and she can do the day to day, then keeping things as they are may be the smart move. But if that's not possible, it doesn't mean you have to buy him out for twice what you think it's worth. In the absence of a partnership agreement, it's going to be hard to know what to do. But one approach might be to pretend there is a shotgun clause. Ask him, if he thinks half the company is worth $X, if he's willing to buy you out for that price and have his wife run it without you. He is likely to blurt out that it isn't worth that and she can't do that. And at that point, you'll actually be negotiating.",
"title": ""
},
{
"docid": "f22e594c021241f4b17a7979fa3d07c4",
"text": "The equity you have is an asset. Locked away until you sell, and sometimes pledged as a loan if you wish. The idea that it's dead money is nonsense, it's a pretty illiquid asset that has the potential for growth (at the rate of inflation or slightly higher, long term) and provides you an annual dividend in the form of free rent. In this country, most people who own homes have a disproportionate amount of their wealth in their house. This is more a testament to the poor saving rate than anything else. For me, a high equity position means that I can sell my home and buy a lesser sized house for cash. I am older and my own goal (with the mrs) is to have the house paid and college for the kid fully funded before we think of retiring. For others, it's cash they can use to rent after they retire. I hope that helped, there's nothing magic about this, just a lot of opinions.",
"title": ""
},
{
"docid": "92f2653684d88975ae329e1a54900c99",
"text": "I think your best course of action depends on the likely outcome of the divorce proceedings. The alimony/child support payments are controlled externally. I don't like to plan around things that I have no control over. In your shoes, I would probably avoid buying until things are settled down.",
"title": ""
},
{
"docid": "5de97a1bc0bbdec7f2e311fbfba9d0bd",
"text": "\"Be careful that pride is not getting in the way of making a good decision. As it stands now what difference does it make to have 200K worth of debt and a 200K house or 225K of debt and a 250K house? Sure you would have a 25K higher net worth, but is that really important? Some may even argue that such an increase is not real as equity in primary residence might not be a good indication of wealth. While there is nothing wrong with sitting down with a banker, most are likely to see your scheme as dubious. Home improvements rarely have a 100% ROI and almost never have a 200% ROI, I'd say you'd be pretty lucky to get a 65% ROI. That is not to say they will deny you. The banks are in the business of lending money, and have the goal of taking as much of your hard earned paycheck as possible. They are always looking to \"\"sheer the sheep\"\". Why not take a more systematic approach to improving your home? Save up and pay cash as these don't seem to cause significant discomfort. With that size budget and some elbow grease you can probably get these all done in three years. So in three years you'll have about 192K in debt and a home worth 250K or more.\"",
"title": ""
},
{
"docid": "3becf428add18f59ba38d20807e3f7d7",
"text": "Shop around for Gym January is a great time to look because that's when most people join and the gyms are competing for your business. Also, look beyond the monthly dues. Many gyms will give free personal training sessions when you sign up - a necessity if you are serious about getting in shape! My gym offered a one time fee for 3 years. It cost around $600 which comes out to under $17 a month. Not bad for a new modern state of the art gym.",
"title": ""
}
] |
fiqa
|
e5546400a617d146b92d37dd82e41f15
|
What is the risk-neutral probability?
|
[
{
"docid": "cccddce7245c2fc6e6ab69142941c94c",
"text": "\"You have actually asked several questions, so I think what I'll do is give you an intuition about risk-neutral pricing to get you started. Then I think the answer to many of your questions will become clear. Physical Probability There is some probability of every event out there actually occurring, including the price of a stock going up. That's what we call the physical probability. It's very intuitive, but not directly useful for finding the price of something because price is not the weighted average of future outcomes. For example, if you have a stock that is highly correlated with the market and has 50% chance of being worth $20 dollars tomorrow and a 50% chance of being worth $10, it's value today is not $15. It will be worth less, because it's a risky stock and must earn a premium. When you are dealing with physical probabilities, if you want to compute value you have to take the probability-weighted average of all the prices it could have tomorrow and then add in some kind of compensation for risk, which may be hard to compute. Risk-Neutral Probability Finance theory has shown that instead of computing values this way, we can embed risk-compensation into our probabilities. That is, we can create a new set up \"\"probabilities\"\" by adjusting the probability of good market outcomes downward and increasing the probability of bad market outcomes. This may sound crazy because these probabilities are no longer physical, but it has the desirable property that we then use this set of probabilities to price of every asset out there: all of them (equity, options, bonds, savings accounts, etc.). We call these adjusted probabilities that risk-neutral probabilities. When I say price I mean that you can multiply every outcome by its risk-neutral probability and discount at the risk-free rate to find its correct price. To be clear, we have changed the probability of the market going up and down, not our probability of a particular stock moving independent of the market. Because moves that are independent of the market do not affect prices, we don't have to adjust the probabilities of them happening in order to get risk-neutral probabilities. Anyway, the best way to think of risk-neutral probabilities is as a set of bogus probabilities that consistently give the correct price of every asset in the economy without having to add a risk premium. If we just take the risk-neutral probability-weighted average of all outcomes and discount at the risk-free rate, we get the price. Very handy if you have them. Risk-Neutral Pricing We can't get risk-neutral probabilities from research about how likely a stock is to actually go up or down. That would be the physical probability. Instead, we can figure out the risk-neutral probabilities from prices. If a stock has only two possible prices tomorrow, U and D, and the risk-neutral probability of U is q, then Price = [ Uq + D(1-q) ] / e^(rt) The exponential there is just discounting by the risk-free rate. This is the beginning of the equations you have mentioned. The main thing to remember is that q is not the physical probability, it's the risk-neutral one. I can't emphasize that enough. If you have prespecified what U and D can be, then there is only one unknown in that equation: q. That means you can look at the stock price and solve for the risk neutral probability of the stock going up. The reason this is useful is that you can same risk-neutral probability to price the associated option. In the case of the option you don't know its price today (yet) but you do know how much money it will be worth if the stock moves up or down. Use those values and the risk-neutral probability you computed from the stock to compute the option's price. That's what's going on here. To remember: the same risk-neutral probability measure prices everything out there. That is, if you choose an asset, multiply each possibly outcome by its risk-neutral probability, and discount at the risk-free rate, you get its price. In general we use prices of things we know to infer things about the risk-neutral probability measure in order to get prices we do not know.\"",
"title": ""
}
] |
[
{
"docid": "a82bece8a7b6c04dce89b387fe72c88e",
"text": "To get the probability of hitting a target price you need a little more math and an assumption about the expected return of your stock. First let's examine the parts of this expression. IV is the implied volatility of the option. That means it's the volatility of the underlying that is associated with the observed option price. As a practical matter, volatility is the standard deviation of returns, expressed in annualized terms. So if the monthly standard deviation is Y, then Y*SQRT(12) is the volatility. From the above you can see that IV*SQRT(DaysToExpire/356) de-annualizes the volatility to get back to a standard deviation. So you get an estimate of the expected standard deviation of the return between now and expiration. If you multiply this by the stock price, then you get what you have called X, which is the standard deviation of the dollars gained or lost between now and expiration. Denote the price change by A (so that the standard deviation of A is X). Note that we seek the expression for the probability of hitting a target level, Q, so mathematically we want 1 - Pr( A < Q - StockPrice) We do 1 minus the probability of being below this threshold because cumulative distribution functions always find the probability of being BELOW a threshold, not above. If you are using excel and assuming a mean of zero for returns, the probability of hitting or exceeding Q at expiration, then, is That's your answer for the probability of exceeding Q. Accuracy is in the eye of the beholder. You'd have to specify a criterion by which to judge it to know the answer. I'm sure more sophisticated methods exist that are more unbiased and have less error, but I think it's a fine first approximation.",
"title": ""
},
{
"docid": "53119f50382b91202397bc9c9433a5eb",
"text": "This doesn't make sense in an economic context. For justice to provide sufficient deterrent, it needs to be rational to avoid a crime. If your probability of being caught is comparatively lower, the punishment needs to be higher in order to remain a deterrent. Basically, P(get caught) * Punitive Cost > Profit",
"title": ""
},
{
"docid": "351f89bd9a41b943744b8ce95e967cdb",
"text": "Excellent, very sharp. No it will not be vega neutral exactly! If you think about it, what does a higher vol imply? That the delta of the option is higher than under BS model. Therefore, the vega should also be greater (simplistic explanation but generally accurate). So no, if you trade a 25-delta risky in equal size per leg, the vega will not be neutral. But, in reality, that is a very small portion of your risk. It plays a part, but in general the vanna position dominates by many many multiples. What do you do that you asked such a question, if you don't mind?",
"title": ""
},
{
"docid": "93ac5c7e87fbf813b47b44d966bcd307",
"text": "\"Yes, and the math that tells you when is called the Kelly Criterion. The Kelly Criterion is on its face about how much you should bet on a positive-sum game. Imagine you have a game where you flip a coin, and if heads you are given 3 times your bet, and if tails you lose your bet. Naively you'd think \"\"great, I should play, and bet every dollar I have!\"\" -- after all, it has a 50% average return on investment. You get back on average 1.5$ for every dollar you bet, so every dollar you don't bet is a 0.5$ loss. But if you do this and you play every day for 10 years, you'll almost always end up bankrupt. Funny that. On the other hand, if you bet nothing, you are losing out on a great investment. So under certain assumptions, you neither want to bet everything, nor do you want to bet nothing (assuming you can repeat the bet almost indefinitely). The question then becomes, what percentage of your bankroll should you bet? Kelly Criterion answers this question. The typical Kelly Criterion case is where we are making a bet with positive returns, not an insurance against loss; but with a bit of mathematical trickery, we can use it to determine how much you should spend on insuring against loss. An \"\"easy\"\" way to undertand the Kelly Criterion is that you want to maximize the logarithm of your worth in a given period. Such a maximization results in the largest long-term value in some sense. Let us give it a try in an insurance case. Suppose you have a 1 million dollar asset. It has a 1% chance per year of being destroyed by some random event (flood, fire, taxes, pitchforks). You can buy insurance against this for 2% of its value per year. It even covers pitchforks. On its face this looks like a bad deal. Your expected loss is only 1%, but the cost to hide the loss is 2%? If this is your only asset, then the loss makes your net worth 0. The log of zero is negative infinity. Under Kelly, any insurance (no matter how inefficient) is worth it. This is a bit of an extreme case, and we'll cover why it doesn't apply even when it seems like it does elsewhere. Now suppose you have 1 million dollars in other assets. In the insured case, we always end the year with 1.98 million dollars, regardless of if the disaster happens. In the non-insured case, 99% of the time we have 2 million dollars, and 1% of the time we have 1 million dollars. We want to maximize the expected log value of our worth. We have log(2 million - 20,000) (the insured case) vs 1% * log(1 million) + 99% * log(2 million). Or 13.7953 vs 14.49. The Kelly Criterion says insurance is worth it; note that you could \"\"afford\"\" to replace your home, but because it makes up so much of your net worth, Kelly says the \"\"hit it too painful\"\" and you should just pay for insurance. Now suppose you are worth 1 billion. We have log(1 billion - 20k) on the insured side, and 1%*log(999 million) + 99% * log(1 billion) on the uninsured side. The logs of each side are 21.42 vs 20.72. (Note that the base of the logarithm doesn't matter; so long as you use the same base on each side). According to Kelly, we have found a case where insurance isn't worth it. The Kelly Criterion roughly tells you \"\"if I took this bet every (period of time), would I be on average richer after (many repeats of this bet) than if I didn't take this bet?\"\" When the answer is \"\"no\"\", it implies self-insurance is more efficient than using external insurance. The answer is going to be sensitive to the profit margin of the insurance product you are buying, and the size of the asset relative to your total wealth. Now, the Kelly Criterion can easily be misapplied. Being worth financially zero in current assets can easily ignore non-financial assets (like your ability to work, or friends, or whatever). And it presumes repeat to infinity, and people tend not to live that long. But it is a good starting spot. Note that the option of bankruptcy can easily make insurance not \"\"worth it\"\" for people far poorer; this is one of the reasons why banks insist you have insurance on your proprety. You can use Kelly to calculate how much insurance you should purchase at a given profit margin for the insurance company given your net worth and the risk involved. This can be used in Finance to work out how much you should hedge your bets in an investment as well; in effect, it quantifies how having money makes it easier to make money.\"",
"title": ""
},
{
"docid": "ad95ac2efa8c6f348e8f9de9c1bdc83f",
"text": "Risk and return always go hand by hand.* Risk is a measure of expected return volatility. The best investment at this stage is a good, easy to understand but thorough book on finance. *Applies to efficient markets only.",
"title": ""
},
{
"docid": "52711cc145662d771c2d381f9909a103",
"text": "A number of ways exist to calculate the chances of a particular outcome. Options, for example, use current price, cost of money, and volatility among other factors to price the chance of an underlying asset reaching a certain price in a certain timeframe. A graphical forecast simply puts these calculations into a visual format. That said, it appears the image you offer shows the prediction as it existed in the past along with how the stock has done since. A disclaimer - The odds of a fair die being rolled to a given number are 1 in 6. It's a fact. With stocks, on the other hand, models try to simulate real life and many factors can't be accounted for.",
"title": ""
},
{
"docid": "1507aaef499b0cce4fb9076b9116d3d3",
"text": "How about looking into the market price of risk? Ive always wanted to know if risk is or should be priced the same across markets/asset classes/etc. Eh? Let me know what you figure out. Edit: I just realized you people probably consider it to be the Sharpe ratio. That's not what I meant. I meant in the sense of option pricing.",
"title": ""
},
{
"docid": "bf07ec9e09b72c3b44f4c116f1caed05",
"text": "Someone entering a casino with $15 could employ a very simple strategy and have a better-than-90% chance of walking out with $16. Unfortunately, the person would have a non-trivial chance (about one in 14) of walking out with $0. If after losing $15 the person withdrew $240 from the bank and tried to win $16, the person would have a better-than-90% chance of succeeding and ending up ahead (holding the original $15, plus the additional $240, plus $1) but would have at that point about a one in 14 chance from that point of losing the $240 along with the original $15. Measured from the starting point, you'd have about a 199 out of 200 chance of gaining $1, and a one out of 200 chance of losing $240. Market-timing bets are like that. You can arrange things so you have a significant chance of making a small profit, but at the risk of a large downside. If you haven't firmly decided exactly how much downside you are willing to accept, it's very easy to simultaneously believe you don't have much money at risk, but that you'll be able to win back anything you lose. The only way you can hope to win back anything you lose is by bringing a lot more money to the table, which will of course greatly increase your downside risk. The probability of making money for the person willing to accept $15 of downside risk to earn $1 is about 93%. The probability of making money for the person willing to accept $255 worth of risk is about 99.5%. It's easy to see that there are ways of playing which have a 99.5% chance of winning, and that there are ways of playing that only have a 15:1 downside risk. Unfortunately, the ways of playing that have the smaller risk don't have anything near a 99.9% chance of winning, and those that have a better chance of winning have a much larger downside risk.",
"title": ""
},
{
"docid": "770018f155276945e734c862080a7847",
"text": "\"A subsidy is a benefit. While you're right most of the time it is a crude \"\"transfer of wealth by the US government\"\" the formal intent of a subsidy is to assist so as to confer an advantage or mitigate a disadvantage. If as you say \"\"discounting the risk premium\"\" actively by the US government so as to confer, in the words of Ueda and Di Mauro, a \"\"funding cost advantage [to] SIFIs [of] around 60bp in 2007 and 80bp in 2009\"\" is not a subsidy, then what is it?\"",
"title": ""
},
{
"docid": "a8322b4c03d89bd5951593ec8cc1b48a",
"text": "I would say binomial tree, except your last sentence, > The probabilities of the various outcomes are unknown. causes issues with that. You could do a scenario analysis in which you compare values using different %chances of up vs. down.",
"title": ""
},
{
"docid": "c6d90f991f80e65e67aa8585a99deacf",
"text": "\"This is the best tl;dr I could make, [original](https://www.richmondfed.org/-/media/richmondfedorg/publications/research/working_papers/2017/pdf/wp17-12.pdf) reduced by 98%. (I'm a bot) ***** > 7 3 Local Dynamics The local dynamics of the simple search and matching model have been studied by Krause and Lubik. > In the previous literature, for example Mendes and Mendes and Bhattacharya and Bunzel, the backward dynamics are defined via the map g by rearranging to isolate &theta;t : \u0010 \u00111/&xi; &theta;t = a&theta;t+1 c&theta;t+1 + d = g. 11 Under risk aversion, the dynamics depend on the time path of output yt. > 4.2 Stability Properties We now study the dynamics of the backward map zt = f. We first establish the properties of the function f. We then study the stability properties of the steady state, where we distinguish between two broad areas of dynamics in the backward map, namely stable and unstable. ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/788alk/fed_global_dynamics_in_a_search_and_matching/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ \"\"Version 1.65, ~233564 tl;drs so far.\"\") | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr \"\"PM's and comments are monitored, constructive feedback is welcome.\"\") | *Top* *keywords*: **dynamic**^#1 **model**^#2 **0.1**^#3 **1**^#4 **map**^#5\"",
"title": ""
},
{
"docid": "d62b517174738aa290ba762275cecc45",
"text": "if I have a asset A with expected return of 100% and risk(measured by standard deviation) 1%, and asset B with expected return of 1% and risk 100%, would it be rational to put asset B into the portfolio ? No, because Modern Portfolio Theory would say that if there is another asset (B2) with the same (or higher) return but less risk (which you already have in asset A), you should invest in that. If those are the only two assets you can choose from, you would invest completely in Asset A. The point of diversification is that, so long as two assets aren't perfectly positively correlated (meaning that if one moves up the other always moves up), then losses in one asset will sometimes be offset by gains in another, reducing the overall risk.",
"title": ""
},
{
"docid": "7da3ed09c146ab37ff05f628df76df15",
"text": "Can you give more detail on the problem? If you can model it with a one step binomial tree, then the price is favourable as long as the chance to multiply is P(S^1 = 10 S^0 ) > 0.1. If you don't know the probabilities, then the usual go-to is to determine what probability space is that would lead to an expected profit (plus an error, and a cushion for risk aversion if the bet is sufficiently large).",
"title": ""
},
{
"docid": "59ee99fc3853372dbb802b2e295679f8",
"text": "Dummy example to explain this. Suppose your portfolio contained just two securities; a thirty year US government bond and a Tesla stock. Both of those position are currently valued at $1mm. The Tesla position however is very volatile with its daily volatility being about 5% (based on the standard deviation of its daily return) whole there bond's daily volatility is 1%. Then the Tesla position is 5/6 of your risk while being only 1/2 of the portfolio. Now if in month the Tesla stock tanks to half is values then. Then it's risk is half as much as before and so it's total contribution to risk has gone down.",
"title": ""
},
{
"docid": "fef760738b2b90f87c049bb8f0a1675f",
"text": "Consider the black-scholes-merton result. Notice that the expected value of the bond is its present value, discounted from the expiration date. The same is not applied to the price of the stock. The further in the future you go, the less value the bond carries because it's being discounted into oblivion. Now, looking at d1, as time tends towards infinity, so does d1. N(d1) is a probability. The higher d1, the higher the probability and vice versa, so as time increases, the probability for S trends to 100% while K is discounted away. Note that the math doesn't yet fully model reality, as extremely long dated options such as the European puts Buffett wrote were traded at ~1/2 the value the model said he should've. He still had to take a GAAP loss: http://www.berkshirehathaway.com/letters/2008ltr.pdf",
"title": ""
}
] |
fiqa
|
f3a74b8d506ffd6e1a5244a4eaef9bef
|
Moving from Google Finance to Yahoo Finance
|
[
{
"docid": "f1e2b2fb775eb50ea82359cd6eda94ad",
"text": "Perhaps you should use your own tracking software, such as GnuCash, Quicken, Mint, or even Excel. The latter would work given you say you're manually putting in your transactions. There's lots of pre-done spreadsheets for tracking investments if you look around. I'm hoping that a web search gets you help on migrating transaction data, but I've yet to run into any tools to do the export and import beyond a manual effort. Then again, I haven't checked for this lately. Not sure about your other questions, but I'd recommend you edit the question to only contain what you're asking about in the subject.",
"title": ""
}
] |
[
{
"docid": "fe41bd844ccdd880ae9b1f59abe82487",
"text": "\"Google Finance certainly has data for Tokyo Stock Exchange (called TYO on Google) listings. You could create a \"\"portfolio\"\" consisting of the stocks you care about and then visit it once per day (or write a script to do so).\"",
"title": ""
},
{
"docid": "202984fdfca72013590d80a373c28d40",
"text": "\"P/E is Price divided by Earnings Per Share (EPS). P/E TTM is Price divided by the actual EPS earned over the previous 12 months - hence \"\"Trailing Twelve Month\"\". In Forward P/E is the \"\"E\"\" is the average of analyst expectations for the next year in EPS. Now, as to what's being displayed. Yahoo shows EPS to be 1.34. 493.90/1.34 = P/E of 368.58 Google shows EPS to be 0.85. 493.40/0.85 = P/E of 580.47 (Prices as displayed, respectively) So, by the info that they are themselves displaying, it's Google, not Yahoo, that's displaying the wrong P/E. Note that the P/E it is showing is 5.80 -- a decimal misplacement from 580 Note that CNBC shows the Earnings as 0.85 as well, and correctly show the P/E as 580 http://data.cnbc.com/quotes/BP.L A quick use of a currency calculator reveals a possible reason why EPS is listed differently at yahoo. 0.85 pounds is 1.3318 dollars, currently. So, I think the Yahoo EPS listing is in dollars. A look at the last 4 quarters on CNBC makes that seem reasonable: http://data.cnbc.com/quotes/BP.L/tab/5 those add up to $1.40.\"",
"title": ""
},
{
"docid": "e50fbda863f078d02e1be7577f198d04",
"text": "http://www.euroinvestor.com/exchanges/nasdaq/macromedia-inc/41408/history will work as DumbCoder states, but didn't contain LEHMQ (Lehman Brother's holding company). You can use Yahoo for companies that have declared bankruptcy, such as Lehman Brothers: http://finance.yahoo.com/q/hp?s=LEHMQ&a=08&b=01&c=2008&d=08&e=30&f=2008&g=d but you have to know the symbol of the holding company.",
"title": ""
},
{
"docid": "14a425ef8cb11db564bada29217d8e6f",
"text": "First - Google's snapshot - Then - Yahoo - I took these snapshots because they will not exist on line after the market opens, and without this context, your question won't make sense. With the two snapshots you can see, Yahoo shows the after hours trades and not just the official market close for the day. The amount it's down is exactly tracked from the close shown on Google. Now you know.",
"title": ""
},
{
"docid": "42a3839e68b1f3ff5b97da306e838cce",
"text": "\"There are several reasons to pay for data instead of using Yahoo Finance, although these reasons don't necessarily apply to you if you're only planning to use the data for personal use. Yahoo will throttle you if you attempt to download too much data in a short time period. You can opt to use the Yahoo Query Language (YQL), which does provide another interface to their financial data apart from simply downloading the CSV files. Although the rate limit is higher for YQL, you may still run into it. An API that a paid data provider exposes will likely have higher thresholds. Although the reliability varies throughout the site, Yahoo Finance isn't considered the most reliable of sources. You can't beat free, of course, but at least for research purposes, the Center for Research in Security Prices (CRSP) at UChicago and Wharton is considered the gold standard. On the commercial side, data providers like eSignal, Bloomberg, Reuters also enjoy widespread popularity. Although both the output from YQL and Yahoo's current CSV output are fairly standard, they won't necessarily remain that way. A commercial API is basically a contract with the data provider that they won't change the format without significant prior notice, but it's reasonable to assume that if Yahoo wanted to, they could make minor changes to the format and break many commercial applications. A change in Yahoo's format would likely break many sites or applications too, but their terms of use do state that Yahoo \"\"may change, suspend, or discontinue any aspect of the Yahoo! Finance Modules at any time, including the availability of any Yahoo! Finance Modules. Yahoo! may also impose limits on certain features and services or restrict your access to parts or all of the Yahoo! Finance Modules or the Yahoo! Web site without notice or liability.\"\" If you're designing a commercial application, a paid provider will probably provide technical support for their API. According to Yahoo Finance's license terms, you can't use the data in a commercial application unless you specifically use their \"\"badges\"\" (whatever those are). See here. In this post, a Yahoo employee states: The Finance TOS is fairly specific. Redistribution of data is only allowed if you are using the badges the team has created. Otherwise, you can use YQL or whatever method to obtain data for personal use. The license itself states that you may not: sell, lease, or sublicense the Yahoo! Finance Modules or access thereto or derive income from the use or provision of the Yahoo! Finance Modules, whether for direct commercial or monetary gain or otherwise, without Yahoo!'s prior, express, written permission In short, for personal use, Yahoo Finance is more than adequate. For research or commercial purposes, a data provider is a better option. Furthermore, many commercial applications require more data than Yahoo provides, e.g. tick-by-tick data for equities, derivatives, futures, data on mergers, etc., which a paid data source will likely provide. Yahoo is also known for inaccuracies in its financial statements; I can't find any examples at the moment, but I had a professor who enjoyed pointing out flaws in the 10K's that he had come across. I've always assumed this is because the data were manually entered, although I would assume EDGAR has some method for automatic retrieval. If you want data that are guaranteed to be accurate, or at least have a support contract associated with them so you know who to bother if it isn't, you'll need to pay for it.\"",
"title": ""
},
{
"docid": "a6cbcbd8b3cddff05df38d1e7b8f0339",
"text": "I won't be able to model stock prices using this information. The pros aren't likely to use Google as much. Even the casual investor is likely to have his own habits. For example, I've come to like how Yahoo permits me to set up a portfolio and follow the stocks I want. And the information that interests me is there, laid out nicely, price, history, insider trades, news etc. But your effort probably still has some discovery value, as it will help you understand when interest in a company suddenly swells above normal. Nothing wrong with a good project like that. Just don't expect to extract too much market-beating success from it. The pros will eat your lunch, take your money, and not even say thanks. Welcome to Money.SE.",
"title": ""
},
{
"docid": "a70f3bb1503144ad1c52173d8d7638ba",
"text": "I can't give you a detailed answer because I'm away from the computer where I use kMyMoney, but IIRC to add investments you have to create new transactions on the 'brokerage account' linked to your investment account.",
"title": ""
},
{
"docid": "8f399907f2221e4bdc9aefb8c11cf52c",
"text": "This is from Google Finance right now.",
"title": ""
},
{
"docid": "3bf4513d6e76ed2e63e58c4b9760adbe",
"text": "On NASDAQ the ^ is used to denote other securities and / to denote warrents for the underlying company. Yahoo maybe using some other designators for same.",
"title": ""
},
{
"docid": "f9c64c3b2016141277efdf4e834774e1",
"text": "Google Finance gives you this information.",
"title": ""
},
{
"docid": "9f726f42e288957f12902d0dad5d50bf",
"text": "\"There is probably a better way, but you can do the following: (1) Right click on the right pointing arrow next to the \"\"1-20 of xx rows\"\" message at the bottom right of the table, and select \"\"Copy link location\"\" (2) Paste that into the location (3) At the end of the pasted text there is a \"\"&output=json\"\", delete that and everything after it. (4) hit enter What you get is a page that displays the set of securities returned by and in a very similar display to the \"\"stock screener\"\" without the UI elements to change your selections. You can bookmark this page.\"",
"title": ""
},
{
"docid": "420f4726f5eff4d17dbcf18d85d62d3b",
"text": "Google Finance and Yahoo Finance have been transitioning their API (data interface) over the last 3 months. They are currently unreliable. If you're just interested in historical price data, I would recommend either Quandl or Tiingo (I am not affiliated with either, but I use them as data sources). Both have the same historical data (open, close, high, low, dividends, etc.) on a daily closing for thousands of Ticker symbols. Each service requires you to register and get a unique token. For basic historical data, there is no charge. I've been using both for many months and the data quality has been excellent and API (at least for python) is very easy! If you have an inclination for python software development, you can read about the drama with Google and Yahoo finance at the pandas-datareader group at https://github.com/pydata/pandas-datareader.",
"title": ""
},
{
"docid": "7f3e8cac96486db24344d65596d6fff2",
"text": "Yahoo Finance has this now, the ticker is CL=F.",
"title": ""
},
{
"docid": "1ca4aa43255f1b1f575ff0e602651839",
"text": "\"Remember that in most news outlets journalists do not get to pick the titles of their articles. That's up to the editor. So even though the article was primarily about ETFs, the reporter made the mistake of including some tangential references to mutual funds. The editor then saw that the article talked about ETFs and mutual funds and -- knowing even less about the subject matter than the reporter, but recognizing that more readers' eyeballs would be attracted to a headline about mutual funds than to a headline about ETFs -- went with the \"\"shocking\"\" headline about the former. In any case, as you already pointed out, ETFs need to know their value throughout the day, as do the investors in that ETF. Even momentary outages of price sources can be disastrous. Although mutual funds do not generally make transactions throughout the day, and fund investors are not typically interested in the fund's NAV more than once per day, the fund managers don't just sit around all day doing nothing and then press a couple buttons before the market closes. They do watch their NAV very closely during the day and think very carefully about which buttons to press at the end of the day. If their source of stock price data goes offline, then they're impacted almost as severely as -- if less visibly than -- an ETF. Asking Yahoo for prices seems straightforward, but (1) you get what you pay for, and (2) these fund companies are built on massive automated infrastructures that expect to receive their data from a certain source in a certain way at a certain time. (And they pay a lot of money in order to be able to expect that.) It would be quite difficult to just feed in manual data, although in the end I suspect some of these companies did just that. Either they fell back to a secondary data supplier, or they manually constructed datasets for their programs to consume.\"",
"title": ""
},
{
"docid": "dc791ff7f4a2e648915913f2f2bc62ae",
"text": "Yup. What I wanted to know was where they are pulling it up from. Have casually used Google finance for personal investments, but they suck at corp actions. Not sure if they provide free APIs, but that would probably suck too! :D",
"title": ""
}
] |
fiqa
|
d46f6914ca4716ae7a80e04b12f8e69a
|
How do finance professionals procounce “CECL”?
|
[
{
"docid": "061e7f8c0908cf07f2829824c7c6e243",
"text": "\"According to the following links, it is commonly pronounced \"\"Cecil\"\". https://kaufmanrossin.com/blog/bank-ready-meet-cecil/ The proposed model introduces the concept of shifting from an incurred loss model to the current expected credit loss model commonly referred to as CECL (pronounced “Cecil”). http://www.gonzobanker.com/2016/02/cecl-the-blind-leading-the-blurry/ [...] and its name is CECL (Current Estimated Credit Losses, pronounced like the name “Cecil”). The name Cecil means “blind,” which is ironic, because FASB’s upcoming guidance will push FIs to clarify the future performance of their loan portfolios by using models to predict CECL of all loan portfolios. https://www.linkedin.com/pulse/operational-financial-impact-cecl-banks-nikhil-deshmukh Termed as Current Expected Credit Loss (CECL, or Cecil, as some call it), [...]\"",
"title": ""
}
] |
[
{
"docid": "7f9e3a993c0abf7fca0c5873bb9a45c1",
"text": "Yes it's a very specialized profession. Like extremely specialized. I've read in the WSJ a number of times that finance is unsurprisingly moving in a more intellectual direction, so i feel having this license in the long run may really pay off. Thank you for your two cents. I especially like the Board of Directors bit. I really don't know if that is a good reason to dedicate my life to becoming an actuary.",
"title": ""
},
{
"docid": "9f0aa52447ab80bd79438d8d2ebd4366",
"text": "I work in financial tech, and we've been working on regulatory projects non stop since the middle of last year. Not a single feature enhancement for traders has been implemented despite very high demand. The other (smaller) wing of the tech division has been working on electronic trading. As regulation and position transparency ramp up, voice spreads will fall and desks will have to rely on volume driven by electronic trading to make up revenue. The people driving this will be technology, and not the traders. So: if you want to get in on the finances money, brush up on your programming skills: C++, Java, python are the bare minimum.",
"title": ""
},
{
"docid": "8753871fa539a3cd8957b1bd8db5b58e",
"text": "So, you don't necessarily have to have your job be your life to work in finance. That's good to know, and makes sense, since surely there aren't enough Type A's to populate an entire, large, industry. Man, I don't understand how one could work 100 hours a week for more than maybe one week. It would seem like basic needs such as sleep would become difficult with that level of work.",
"title": ""
},
{
"docid": "bac26e6289d4d3b07230a31701149d43",
"text": "I think that MFin is best suited for more technical roles in banks (I assume when you say IB you mean sell/buy side M&A), HF, AM, and PM roles. I don't view PE, CF, or IB as technically challenging as most of the analysis is done on the areas outside of finance.",
"title": ""
},
{
"docid": "4d71ed4a3c2a4630d8ee5190254fae36",
"text": "\"Background: I live and work in a small city (250k) and want to work somewhere much larger (New York, London, Chicago, Sydney). Ideal job is something quantitative and related to programming/analytics in finance, though I have passed the CFA Level III Exam to show my interest in the field and currently work as a systems and database analyst (job title is \"\"Senior financial analyst\"\".) I have a Master's in mathematical finance but my work mostly relates to personal side projects. Questions: Short of packing up and moving, what is an effective way to network with people from these larger cities? Is there demand for quants and junior quants, or is there too much supply? Will I need to get a PhD to be relevant? Can I transfer my background or skills into another area of finance first to get the networking contacts?\"",
"title": ""
},
{
"docid": "6315b769b8a2a8cbad2ddccfdd115de1",
"text": "What is the best way to learn SQL for use in finance, namely FP&A? I've watched videos on YouTube but most of them focus on syntax. I do know that SQL is used in some type of DBMS like IBM / Oracle / Microsoft Excel. So, when job applications list SQL experience (like for FP&A Analyst positions), what DBMS are they referring to? Oracle? Microsoft Excel? Does it matter? If I learn the syntax, is that enough? I have searched for resources but again, they seem to be focusing on the syntax. https://www.reddit.com/r/SQL/wiki/index Can someone who works in FP&A please explain or recommend a MOOC or other sources that will show me how to use SQL just like you do on the job? Thanks.",
"title": ""
},
{
"docid": "2b91ea9ba00641d019c71d2986da2f19",
"text": "the financial information is generally filed via SEDAR (Canada) or SEC (US) before the conference call with the investment community. This can take before either before the market opens or after the market closes. The information is generally distribute to the various newswire service and company website at the same time the filing is made with SEDAR/SEC.",
"title": ""
},
{
"docid": "fdb0d925b58ea2b1b9af8fe85c545a4c",
"text": "E&P can be valid throug Net Present Value methods, on a field-by-field basis. As no field is ever-lasting, and there Are not an unlimited number of fields, perpetuity-formulaes Are shitty. FCFF on a per-field basis with WC and Capex, with a definite lifetime. Thank you for the compliment.",
"title": ""
},
{
"docid": "ca1e0012af250bc79f95ce5ee61324ad",
"text": "When you do finance problems the first thing you need to think about is how the interest is accrued. Is it monthly semi annually or yearly? Once you understand the period of time on the interest and payments it’ll help you understand these problems more. Also a good thing to memorize is converting from EAR to APR. and APR to EAR. You’ll use that a lot. Good luck!",
"title": ""
},
{
"docid": "89384df345b80235245368c544acceb1",
"text": "\"Try to appear interesting to the guy. Don't try and discuss finance, your views on current finance events, or anything of that nature. Listen a lot to what s/he has to say and - when you hear something that you know a lot about - talk about that, in your most articulate and interesting tone. The reason I say \"\"don't talk about finance\"\" is that - given your level of education and work experience - there's likely nothing you know that s/he doesn't, and it's even more likely that you're going to talk about something that you don't truly understand on a functional level. What's likely to happen in this case is that you're probably going to be forgotten as just another person who talks about entry-level finance. To reiterate: Just make sure you come off as interesting (\"\"memorable\"\"), and relaxed/easy going. It might help if you network over a drink or two...\"",
"title": ""
},
{
"docid": "0700971fbc357b77224692f5644dac4a",
"text": "The person you're talking to is probably someone in the company. They need to convey the message to their bank. So you need to explain it to them as if they were 3 year old kids. You may be used to SWIFT transactions because that's how you always get paid, but unless the UK firm regularly employes Russian freelancers, this is probably the first time ever they have heard of it. Similarly, someone in the local branch of their community bank has probably never heard of it before either. In Europe they use IBANs and SWIFTs are rather uncommon. Be patient, explain the issue and the solution in as many words as you can, and suggest them putting you on speaker at the bank so that you could talk directly to the person executing the transaction. If you do the same on your side and let the bankers talk directly to each other - that would probably be ideal.",
"title": ""
},
{
"docid": "8aab733e55ada36c6c0e039c24d391e5",
"text": "\"I'm with you here, I can't imagine who in IB would be \"\"financial modeling\"\" with Excel. Matlab, R, or even more general purpose languages like C are much more common. Even things like cookie-cutter monte carlo simulations or many-step binomial trees are a pain with excel.\"",
"title": ""
},
{
"docid": "8b2553ca379034c58a9b65547529cb50",
"text": "\"Amount is the closest single word. \"\"Amount in dollars\"\" would be the easiest way to specify information you are requesting. \"\"Amount and currency\"\" if you ware in an area using multiple currencies. An accountant might be able to give you a more technical term, but it would be accountancy jargon. Amount due, credit amount, debit amount, amount deposited, amount credited, amount withdrawn, or amount included. If you're writing instructions and want to specify that the person following the instructions needs to indicate the currency, you'll probably have to simply state that requirement. Based on US centric thinking, inside the US, money is dollars, dollars is money. For US citizens outside the country, we would always tack on the currency. 100 dollars, or 100 Euro. There is a segment of Americans who do not understand geography, and that other countries exist, and that they use different currencies, might not realize that other countries have currencies named dollars, and that USD means US Dollars. So for U.S. citizens, be specific and clear. Bottom line, if this is written for US residents, and they need to specify the currency, you need to explicitly require them to \"\"List the amount and currency.\"\"\"",
"title": ""
},
{
"docid": "48b8c97f3504a8f579cdae8344d47681",
"text": "\"According to Wikipedia: In the finance industry, something done on a secular basis is done on a long-term basis, not a temporary or cyclical one, with a time frame of \"\"10–50 years or more\"\" Source\"",
"title": ""
},
{
"docid": "5e773d0aa02456d51473a32d0d58d4c3",
"text": "I think you can solve the problem of different wordings by having a lookup with a table of all the different ways companies spell the same words that returns a standard format that you use. That way you only need to update the table every time you come across a new company and you wont have to type it out all the time.",
"title": ""
}
] |
fiqa
|
f1d1bec5bc754f6bb18f7f5f6d343f14
|
Specifically, what does the Google Finance average volume indicate?
|
[
{
"docid": "e231de6f5c1fe41d56d47d4a08108166",
"text": "I hovered over the label for trading volume and the following message popped up: Volume / average volume Volume is the number of shares traded on the latest trading day. The average volume is measured over 30 days.",
"title": ""
}
] |
[
{
"docid": "5b00300f2a333c26c62eefd7a6367917",
"text": "When you look at the charts in Google Finance, they put the news on the right hand side. The time stamp for each news item is indicated with a letter in the chart. This often shows what news the market is reacting to. In your example: Clicking on the letter F leads to this Reuters story: http://www.reuters.com/article/2011/02/04/usa-housing-s-idUSWAT01486120110204",
"title": ""
},
{
"docid": "85f152040d50f0973d1afa6b3af5da2d",
"text": "Price, whether related to a stock or ETF, has little to do with anything. The fund or company has a total value and the value is distributed among the number of units or shares. Vanguard's S&P ETF has a unit price of $196 and Schwab's S&P mutual fund has a unit price of $35, it's essentially just a matter of the fund's total assets divided by number of units outstanding. Vanguard's VOO has assets of about $250 billion and Schwab's SWPPX has assets of about $25 billion. Additionally, Apple has a share price of $100, Google has a share price of $800, that doesn't mean Google is more valuable than Apple. Apple's market capitalization is about $630 billion while Google's is about $560 billion. Or on the extreme a single share of Berkshire's Class A stock is $216,000, and Berkshire's market cap is just $360 billion. It's all just a matter of value divided by shares/units.",
"title": ""
},
{
"docid": "909417d8d10021a49861245cd34381e3",
"text": "\"Not to detract from the other answers at all (which are each excellent and useful in their own right), but here's my interpretation of the ideas: Equity is the answer to the question \"\"Where is the value of the company coming from?\"\" This might include owner stakes, shareholder stock investments, or outside investments. In the current moment, it can also be defined as \"\"Equity = X + Current Income - Current Expenses\"\" (I'll come back to X). This fits into the standard accounting model of \"\"Assets - Liabilities = Value (Equity)\"\", where Assets includes not only bank accounts, but also warehouse inventory, raw materials, etc.; Liabilities are debts, loans, shortfalls in inventory, etc. Both are abstract categories, whereas Income and Expense are hard dollar amounts. At the end of the year when the books balance, they should all equal out. Equity up until this point has been an abstract concept, and it's not an account in the traditional (gnucash) sense. However, it's common practice for businesses to close the books once a year, and to consolidate outstanding balances. When this happens, Equity ceases to be abstract and becomes a hard value: \"\"How much is the company worth at this moment?\"\", which has a definite, numeric value. When the books are opened fresh for a new business year, the Current Income and Current Expense amounts are zeroed out. In this situation, in order for the big equation to equal out: Assets - Liabilities = X + Income - Expeneses the previous net value of the company must be accounted for. This is where X comes in, the starting (previous year's) equity. This allows the Assets and Liabilities to be non-zero, while the (current) Income and Expenses are both still zeroed out. The account which represents X in gnucash is called \"\"Equity\"\", and encompasses not only initial investments, but also the net increase & decreases from previous years. While the name would more accurately be called \"\"Starting Equity\"\", the only problem caused by the naming convention is the confusion of the concept Equity (X + Income - Expenses) with the account X, named \"\"Equity\"\".\"",
"title": ""
},
{
"docid": "957c5899a0d1a893be298c8bffe79a4d",
"text": "It's got to be a bad chunk of data on Google. Yahoo finance does not show that anomaly for 1988, nor does the chart from Home Depot's investor relations site:",
"title": ""
},
{
"docid": "dc791ff7f4a2e648915913f2f2bc62ae",
"text": "Yup. What I wanted to know was where they are pulling it up from. Have casually used Google finance for personal investments, but they suck at corp actions. Not sure if they provide free APIs, but that would probably suck too! :D",
"title": ""
},
{
"docid": "8f399907f2221e4bdc9aefb8c11cf52c",
"text": "This is from Google Finance right now.",
"title": ""
},
{
"docid": "7c7e2492482cabf5a89816370180c36c",
"text": "The only recommendation I have is to try the stock screener from Google Finance : https://www.google.com/finance?ei=oJz9VenXD8OxmAHR263YBg#stockscreener",
"title": ""
},
{
"docid": "5af9686e550690d467ae3b41d118daf3",
"text": "I get CapIQ and Bloomberg, and I definitely prefer Bloomberg just because of the completeness of information. There's nowhere else that you can get a full financial statement breakdown and then seconds later have a debt distribution schedule and then with another couple keystrokes get a complete credit ratings history and have that only be scratching the surface of the info available. CapIQ is sometimes better than Bloomberg for street consensus estimates going out more than a year or two but I don't find myself using it that much.",
"title": ""
},
{
"docid": "a60cdd7569bda934edfc2d24ddf50a4a",
"text": "What is the average daily volume traded? It looks like this stock may have a liquidity problem. If that is the case I would not buy this stock at all as you may have the same problem when you try to sell it. Generally try to stay away from illiquid stocks, if your order size is more than 10% of the average daily volume traded, then don't buy it. I usually stay away from stocks with an average daily volume of less than 100,000.",
"title": ""
},
{
"docid": "fb60f1c81d5d9f3a858a3dbb56eb72af",
"text": "Alphabet has about 40% on shore or 60%. I know it is 60/40 but forget which way. So way, way more than they really need. What Apple does is borrow against the offshore money when needed, Apple now has over $90b in debt and Google less than $4b. So Google would not have any problem.",
"title": ""
},
{
"docid": "5c90ee4ba274fd55bd125b0bc0623285",
"text": "On closer look, it appears that Google Finance relies on the last released 10-k statement (filing date 10/30/2013), but outstanding shares as of last 10-Q statement. Using these forms, you get ($37,037M / 5.989B ) = $6.18 EPS. I think this is good to note, as you can manually calculate a more up to date EPS value than what the majority of investors out there are relying on.",
"title": ""
},
{
"docid": "7a4af6d5d949050b38d46a09f9238888",
"text": "And the kind folk at Yahoo Finance came to the same conclusion. Keep in mind, book value for a company is like looking at my book value, all assets and liabilities, which is certainly important, but it ignores my earnings. BAC (Bank of America) has a book value of $20, but trades at $8. Some High Tech companies have negative book values, but are turning an ongoing profit, and trade for real money.",
"title": ""
},
{
"docid": "8399543fe9b611cc89a88cecf78f9c74",
"text": "It's been awhile since my last finance course, so school me here: What is the market cap of a company actually supposed to represent? I get that it's the stock price X the # of shares, but what is that actually representing? Revenues? PV of all future revenues? PV of future cash flows? In any case, good write up. Valuation of tech stocks is quite the gambit, and you've done a good job of dissecting it for a layman.",
"title": ""
},
{
"docid": "593f6298656a2b96117729003a4e30dd",
"text": "You bought 1 share of Google at $67.05 while it has a current trading price of $1204.11. Now, if you bought a widget for under $70 and it currently sells for over $1200 that is quite the increase, no? Be careful of what prices you enter into a portfolio tool as some people may be able to use options to have a strike price different than the current trading price by a sizable difference. Take the gain of $1122.06 on an initial cost of $82.05 for seeing where the 1367% is coming. User error on the portfolio will lead to misleading statistics I think as you meant to put in something else, right?",
"title": ""
},
{
"docid": "7a20efbbbed8b0fbcf9f7f16b49f52e5",
"text": "Part A solution: Assume no turnover in A.: Average Balance * Annual Interest - Average Balance * Annual Cost of funds + Annual Fee = Profit from A Profit From A = Average Balance * Interest Rate - Cost of Funds * Average Balance + Annual Fee So for B here is the sneaky thing, the Average Balance is 1/12 of the Volume... That makes it really simple... Volume * InterChange - Average Balance * Cost of Funds + Annual Fee = Profit From A Volume = 12 x Average Balance So: 12 x Average Balance * Interchange (0.015) - Average Balance * Cost of Funds (0.04) + Annual Fee (Say 50)= Profit From A (260) 0.18* Average Balance - 0.04 * Average Balance = 210 Average Balance = 210/.14 Annual turnover = 12* Average Balance Come @ me bro :p",
"title": ""
}
] |
fiqa
|
399fa7381d7cf6b187504b82492668f2
|
What time period is used by yahoo finance to calculate beta
|
[
{
"docid": "72fd6e652e8b3d14b6257d864896e856",
"text": "Citing the Yahoo Finance Help page, Beta: The Beta used is Beta of Equity. Beta is the monthly price change of a particular company relative to the monthly price change of the S&P500. The time period for Beta is 3 years (36 months) when available. Regarding customised time periods, I do not think so.",
"title": ""
}
] |
[
{
"docid": "5070df72e782e7506f474de8de546a33",
"text": "This is a useful metric in that it gives you a trust factor on how reliable the beta is for future expectations It is akin to velocity and acceleration First and second order derivatives of distance / time. Erratic acceleration implies the velocity is less trustworthy Same idea for beta",
"title": ""
},
{
"docid": "682b9e5c188daf75f671e05c6215d32c",
"text": "In regards to your title, it's based on product. Rates based products had a late 2016 early 2017 run. It's now summer time and the fed is acting as expected. Clients have already positioned themselves going into the slow season. Distressed bonds and HY loans are still moving. After the latest fed increase and the yield curve flattening, HY loans took a hit. Par loans were trading at a discount. The market has moved back to paying a premium. However, HY bonds have been slowing down since June. New issue has dropped off, and equities have slowed as well. It's summer time. I wouldn't say that traders have it tough as the tittle suggests, it's just that it was a very active first quarter and now volatility has subsided. It's just the quiet season.",
"title": ""
},
{
"docid": "af49ec901f6c1437fa997bf88b1346ad",
"text": "\"Calculating beta is finding the correlation between the dependent variable, MSCI world benchmark, and the independent variable, your companies. If you know how to run liner regression models, run each company as the independent variable with the dependent MSCI. You can use Excel to gather this result (Y = MSCI price change at closing hour while X = company stock price closing prince). Running the regression will give you the Beta (and alpha when doing portfolios); which (from linear algebra) is the \"\"m\"\" in y = mx + b\"",
"title": ""
},
{
"docid": "481b8423ba7e31615b1775bafe7d3029",
"text": "I looked at this a little more closely but the answer Victor provided is essentially correct. The key to look at in the google finance graph is the red labled SMA(###d) would indicate the period units are d=days. If you change the time axis of the graph it will shift to SMA(###m) for period in minutes or SMA(###w) for period in weeks. Hope this clears things up!",
"title": ""
},
{
"docid": "f4b69c1b4dee246e67fb913d8f2d7439",
"text": "Identify the market and time period. Use the [capital asset pricing model](http://en.wikipedia.org/wiki/Capital_asset_pricing_model) to determine the market beta(http://en.wikipedia.org/wiki/Beta_(finance) for your given stock and interpret the results (if your stock plots above the security market line, it means you are getting higher return for your risk, with consideration of the affects of market risk). Maybe give a more detailed question? You might simply need to compute a modified [Sharpe Ratio](http://en.wikipedia.org/wiki/Sharpe_ratio) using the market (during the time you've decided is the recession) as the risk free rate. Tough to give a good answer to such a general/non-specific question. EDIT: link formatting - can't get the beta page to link because of '( )' in url",
"title": ""
},
{
"docid": "26e829b6a7db54e5cf3756d79e49b8d8",
"text": "Should be noted that pacoverflow's answer is wrong. Yahoo back-adjusts all the previous (not current or future) values based on a cumulative adjustment factor. So if there's a dividend ex-date on December 19, Yahoo adjusts all the PREVIOUS (December 18 and prior) prices with a factor which is: 1 - dividend / Dec18Close",
"title": ""
},
{
"docid": "0be66ae4d5867a95e9bfae09448c360a",
"text": "\"Probably the best way to investigate this is to look at an example. First, as the commenters above have already said, the log-return from one period is log(price at time t/price at time t-1) which is approximately equal to the percentage change in the price from time t-1 to time t, provided that this percentage change is not big compared to the size of the price. (Note that you have to use the natural log, ie. log to the base e -- ln button on a calculator -- here.) The main use of the log-return is that is a proxy for the percentage change in the price, which turns out to be mathematically convenient, for various reasons which have mostly already been mentioned in the comments. But you already know this; your actual question is about the average log-return over a period of time. What does this indicate about the stock? The answer is: if the stock price is not changing very much, then the average log-return is about equal to the average percentage change in the price, and is very easy and quick to calculate. But if the stock price is very volatile, then the average log-return can be wildly different to the average percentage change in the price. Here is an example: the closing prices for Pitchfork Oil from last week's trading are: 10, 5, 12, 5, 10, 2, 15. The percentage changes are: -0.5, 1.4, -0.58, 1, -0.8, 6.5 (where -0.5 means -50%, etc.) The average percentage change is 1.17, or 117%. On the other hand, the log-returns for the same period are -0.69, 0.88, -0.88, 0.69, -1.6, 2, and the average log-return is about 0.068. If we used this as a proxy for the average percentage change in the price over the whole seven days, we would get 6.8% instead of 117%, which is wildly wrong. The reason why it is wrong is because the price fluctuated so much. On the other hand, the closing prices for United Marshmallow over the same period are 10, 11, 12, 11, 12, 13, 15. The average percentage change from day to day is 0.073, and the average log-return is 0.068, so in this case the log-return is very close to the percentage change. And it has the advantage of being computable from just the first and last prices, because the properties of logarithms imply that it simplifies to (log(15)-log(10))/6. Notice that this is exactly the same as for Pitchfork Oil. So one reason why you might be interested in the average log-return is that it gives a very quick way to estimate the average return, if the stock price is not changing very much. Another, more subtle reason, is that it actually behaves better than the percentage return. When the price of Pitchfork jumps from 5 to 12 and then crashes back to 5 again, the percentage changes are +140% and -58%, for an average of +82%. That sounds good, but if you had bought it at 5, and then sold it at 5, you would actually have made 0% on your money. The log-returns for the same period do not have this disturbing property, because they do add up to 0%. What's the real difference in this example? Well, if you had bought $1 worth of Pitchfork on Tuesday, when it was 5, and sold it on Wednesday, when it was 12, you would have made a profit of $1.40. If you had then bought another $1 on Wednesday and sold it on Thursday, you would have made a loss of $0.58. Overall, your profit would have been $0.82. This is what the average percentage return is calculating. On the other hand, if you had been a long-term investor who had bought on Tuesday and hung on until Thursday, then quoting an \"\"average return\"\" of 82% is highly misleading, because it in no way corresponds to the return of 0% which you actually got! The moral is that it may be better to look at the log-returns if you are a buy-and-hold type of investor, because log-returns cancel out when prices fluctuate, whereas percentage changes in price do not. But the flip-side of this is that your average log-return over a period of time does not give you much information about what the prices have been doing, since it is just (log(final price) - log(initial price))/number of periods. Since it is so easy to calculate from the initial and final prices themselves, you commonly won't see it in the financial pages, as far as I know. Finally, to answer your question: \"\"Does knowing this single piece of information indicate something about the stock?\"\", I would say: not really. From the point of view of this one indicator, Pitchfork Oil and United Marshmallow look like identical investments, when they are clearly not. Knowing the average log-return is exactly the same as knowing the ratio between the final and initial prices.\"",
"title": ""
},
{
"docid": "2649f29b989d8e7f895fca5b3d7d7194",
"text": "\"At the bottom of Yahoo! Finance's S & P 500 quote Quotes are real-time for NASDAQ, NYSE, and NYSE MKT. See also delay times for other exchanges. All information provided \"\"as is\"\" for informational purposes only, not intended for trading purposes or advice. Neither Yahoo! nor any of independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. By accessing the Yahoo! site, you agree not to redistribute the information found therein. Fundamental company data provided by Capital IQ. Historical chart data and daily updates provided by Commodity Systems, Inc. (CSI). International historical chart data, daily updates, fund summary, fund performance, dividend data and Morningstar Index data provided by Morningstar, Inc. Orderbook quotes are provided by BATS Exchange. US Financials data provided by Edgar Online and all other Financials provided by Capital IQ. International historical chart data, daily updates, fundAnalyst estimates data provided by Thomson Financial Network. All data povided by Thomson Financial Network is based solely upon research information provided by third party analysts. Yahoo! has not reviewed, and in no way endorses the validity of such data. Yahoo! and ThomsonFN shall not be liable for any actions taken in reliance thereon. Thus, yes there is a DB being accessed that there is likely an agreement between Yahoo! and the providers.\"",
"title": ""
},
{
"docid": "cf5b1097c9ea854253309777ec41f2ae",
"text": "If you do not need it for a day or a week or something like that, an easy thing to do to get the beta of a security is to use wolframalpha. Here is a sample query: BETA for AAPL Calculating beta is an important metric, but it is not a be all end all, as there are ways to hedge the beta of your portfolio. So relying on beta is only useful if it is done in conjunction with something else. A high beta security just means that overall the security acts as the market does with some multiplier effect. For a secure portfolio you want beta as close to zero as possible for capital preservation while trying to find ways to exploit alpha.",
"title": ""
},
{
"docid": "9764ba3afd9210806de741e49eaf845a",
"text": "\"Google Docs spreadsheets have a function for filling in stock and fund prices. You can use that data to graph (fund1 / fund2) over some time period. Syntax: =GoogleFinance(\"\"symbol\"\", \"\"attribute\"\", \"\"start_date\"\", \"\"num_days|end_date\"\", \"\"interval\"\") where: This analysis won’t include dividends or distributions. Yahoo provides adjusted data, if you want to include that.\"",
"title": ""
},
{
"docid": "8f70e124bf017400421257713171e9b1",
"text": "\"Beta is the correct answer. It is THE measure of the risk relationship of a stock with the broad market. R squared is incorrect unless you mean something very odd by \"\"co-efficiency.\"\" A stock that goes up each time the market goes down has very low co-efficiency (negative risk as you have defined it) but very high R squared. A stock that goes the same direction as the market but twice as far (with a lot of noise) has a very low R squared but contains a lot of market risk. A stock that always goes in the same direction as the market but only a 100th as far is very safe but has a very high R squared. You can calculate beta using \"\"slope\"\" in excel or doing a regression, but the easiest thing is just to look up the beta in yahoo finance or elsewhere. You don't need to calculate it for yourself normally.\"",
"title": ""
},
{
"docid": "7f3e8cac96486db24344d65596d6fff2",
"text": "Yahoo Finance has this now, the ticker is CL=F.",
"title": ""
},
{
"docid": "502a5d7377b87fe0f66fffc821dd291c",
"text": "The Money Chimp site lets you choose two points in time to see the return. i.e. you give it the time (two dates) and it tells you the return. One can create a spreadsheet to look at multiple time periods and answer your question that way, but I've not seen it laid out that way in advance. For what it's worth, I am halfway to my retirement number. I can tell you, for example that at X%, I hit my number in Y years. 8.73% gets me 8/25/17 (kid off to college) 3.68% gets me 8/25/21 (kid graduates), so in a sense, we're after the same type of info. With the long term return being in the 10% range, you're going to get 3 years or so as average, but with a skewed bellish curve when run over time.",
"title": ""
},
{
"docid": "427040f8683b2a11bdd39178e27642de",
"text": "My level of analysis is not quite that advanced. Can you share what that would show and why that particular measure is the one to use? I've run regression on prices between the two. VIX prices have no correlation to the s&p500 prices. Shouldn't true volatility result in the prices (more people putting options on the VIX during the bad times and driving that price up) correlate to the selloff that occurs within the S&P500 during recessions and other events that would cause significant or minor volatility? My r2 showed no significance within a measurement of regression within Excel. But, *gasp* I could be wrong, but would love to learn more about better ways of measurement :)",
"title": ""
},
{
"docid": "6869e51ad55dcef0b71c420f217c259e",
"text": "\"Would still be affected by energy prices, labor, weather, and any other input they don't have full control over. Labor and weather can never be controlled. Other users of beef may have a derivative hedge. A derivative hedge would likely provide more direct (maybe short term) protection than a vertical integration hedge. With a financial hedge all of the secondary risk factors are \"\"incorporated\"\" while with vertical integration you are still left with the risk of each and every input to the final product that you do not control. Vertical integration is done for a lot of reasons and it doesn't always result in lower than market costs, especially over any given period.\"",
"title": ""
}
] |
fiqa
|
9be6c22410f9ca43650b854fb944cb8a
|
Legal Financing
|
[
{
"docid": "7bc7eac7b3bba24f24fc2fa0cd9e165a",
"text": "Find a lawyer or law firm who wants to represent you and talk to them.",
"title": ""
}
] |
[
{
"docid": "2dbf368768764be2d269986232ac2534",
"text": "Sorry, I was thinking of PCs. which are professional corporations. LLPs are limited partnerships. If he has partners, an LLP might be suitable. Again, talk to a lawyer and accountant to see what is best for your friend.",
"title": ""
},
{
"docid": "03a783452b4908e9fcc071843916546c",
"text": "Depending on the specific bond, here is the official info. http://www.wilmingtontrust.com/gmbondholders/index.html Bottom line, it won't be determined for a while yet, as the filing with the Bankruptcy Court still has lots of blanks.",
"title": ""
},
{
"docid": "bc86e5c2e5f05a875a6661be66ed5bcb",
"text": "Sometimes invested capital is expected to earn interest, I've seen this be a stipulation in LLC operating agreements and Corporate bylaws. I thought this arrangement looks a little less than fair. BTW I'm a college freshman, though I do the finances for my parents' regulatory compliance and governance consulting company. Anyhow, that's just my two cents.",
"title": ""
},
{
"docid": "cdede2d6ab1995907a3815ae89f6983d",
"text": "it sounds like you don't have experience in this, and neither does your *investor*; which is a recipe for disaster (pun intended). Your first order of business is to check whether your investor is an *Accredited Investor* (google to see what it means), if s/he's not, **walk away**. If s/he's an accredited investor, find a lawyer who can help you navigate this process, however these are the issues: * lawyers are expensive, and lawyers who have experience in these type of transactions are even more expensive * you actually need 2 lawyers, one for you and one for the investor * if neither of you have experience, there will be a lot more billable hours from the lawyers..... In principle this can go 3 ways: 1. The investors give you a loan, you pay them interests on a periodic basis, and then also principal. Items to be negotiated: interest rates, repayment schedule, collateral, personal guarantees. Highly unlikely this is what the investors wants. 2. The Investors get equity. items to be negotiated: your compensation, % of ownership, how profits are divided, how profits are paid; who gets to decide what. 3. A combination of 1 and 2 above, a *Convertible Note*. There's a lot more, too much for a Reddit post. There's not an easy ELI5.",
"title": ""
},
{
"docid": "a3ead6164c50ccbd9cdb1398b9d611c2",
"text": "I don't know if this is exactly what you're looking for but Seedrs sorta fits what you're looking for. Private companies can raise money through funding rounds on Seedrs website. It wouldn't necessarily be local companies though. I've only recently found it myself so not sure if it has a uk or European slant to it. Personally I think it's a very interesting concept, private equity through crowd funding.",
"title": ""
},
{
"docid": "ff8f7a486adf61b296339b15fb9d2700",
"text": "Thanks for that, it did help. I think my issue is I don't work in finance itself, I'm a lawyer, and 'capital' generally has a very specific meaning in English company law, where it refers exclusively to shareholder capital. I realise capital in finance terms includes both debt and equity investment.",
"title": ""
},
{
"docid": "73b60936102e9fb09b25d90ebf69c27a",
"text": "Thanks for the response - ok so maybe the funds could be partially crowd-sourced and partially funded by an accredited investor? Also yes - having an experienced adviser and a plan in place to replace existing directors sound like good plot devices. There doesn't really have to be a limitation to banks, the idea comes from the protagonists being upset with the status quo of banking practices (foreclosures, fees, investing in weapons/warzones etc.) what would you suggest?",
"title": ""
},
{
"docid": "64c8523399599ed83c91cf32321369d1",
"text": "Thanks for the tip, I know of one or two privately backed incubators I can approach but have already reached out to local government for access to their funding streams. I just want to make sure I cover all of my bases and seek as much of the available capital as I can. Is there a good way to approach/meet private investors?",
"title": ""
},
{
"docid": "43edc39c145d3f08bc65729cd44c8faa",
"text": "Yes this would be the same as when a corporation sells bonds. If it is the same as you describe. A product page would make it possible to give you a definitive answer. Also I strongly advice against taking out this type of loan if not for investment",
"title": ""
},
{
"docid": "0c0799dfc1e51a71540e0aa8aa6cb460",
"text": "Some qualitative factors to consider when deciding whether to finance with equity vs debt (for a publicly traded company): 1) The case for equity: Is the stock trading high relative to what management believes is its intrinsic value? If so, raising equity may be attractive since management would be raising a lot of $$$, but the downside is you give up future earnings since you are diluting current ownership 2) The case for debt: What is the expected return for the project in which the raised capital will be utilized for? Is its expected return higher than the interest payments (in % terms)? If so raising debt would be more attractive than raising equity since current ownership would not be diluted That's all I can think of off the top of my head right now, I'm sure there are a few more qualitative factors to consider but I think these two are the most intuitive",
"title": ""
},
{
"docid": "6ba706c8c818d2b2b72005061275a4ff",
"text": "\"OK, reading between the lines here it looks like the services offered by your company are of an \"\"adult\"\" (possibly illegal?) nature and that this individual has actually paid you in full for the services rendered up to this point. The wrinkle here is that you say that you've been offered large cash \"\"gifts\"\" in return for unspecified future favours, but that your client hasn't provided a real Paypal account to do so. When you pressed him on it, he sent a fake email and invented a \"\"financial adviser\"\" to fob you off, then hasn't contacted you since. It's pretty clear that he hasn't got any intention of making these payments to you. What you're now proposing to do is to use his known banking details to collect money to cover those verbal promises. In pretty much every part of the world, that's a crime. Without a written agreement to use that payment method for those promises, he could easily call the police and have you arrested for theft of funds. The further wrinkle is that his actions (claiming to have made payment via paypal, forged email headers, etc) strongly suggest that this individual is involved in cyber-crime and may well have used a fake bank account to pay for your initial services. The bottom line here is that you need real legal advice, from an actual lawyer.\"",
"title": ""
},
{
"docid": "11a8caec7b9b9cee3197785a617e2402",
"text": "You don't need a finance degree, no, but what you do need is evidence. Mind linking some of your sources? Can you flesh it out in detail for us? If not, why are you crusading for a cause you have no domain knowledge of?",
"title": ""
},
{
"docid": "b303d03f0f9654a0cf1ce8ea80c29772",
"text": "For providing financing assistance to the clients, Invoice Finance and Factoring Services are provided by some recognized professional financial services providers in London. They can help in improving cash flows and credit control. Before applying for loans, a business has to undergo the lengthy processes and legal formalities. To simplify these procedures, Forfaiting Financial Services in London are provided to many organizations.",
"title": ""
},
{
"docid": "2fd09b10078171bba36eadd0d1d691d9",
"text": "\"Charging interest by non financial institutions is allowable. There is only one definition of illegal or criminal interest and this is regarding loan sharks. Section 347 of the Canadian Criminal Code makes it illegal to charge more than 60% annually. The biggest debate was whether or not \"\"pay day\"\" loan companies were breaking the law. The recent bill C-26 amends this section to exempt \"\"pay day\"\" loans from this definition.\"",
"title": ""
},
{
"docid": "b91395d788e717adcd6d557049113cfa",
"text": "He did not go into specifics but he said that a usual case would probably be around $10 to $20 million. And that they make the deal in a matter of days. The deal usually closes after extensive due diligence between them and another law firm.",
"title": ""
}
] |
fiqa
|
c95ff98c62b2cfb69367942ccbcc3595
|
UK: Personal finance book for a twenty-something
|
[
{
"docid": "b677b2d0d99879a1ad3cf2e40d13b37a",
"text": "Try this as a starter - my eBook served up as a blog (http://www.sspf.co.uk/blog/001/). Then read as much as possible about investing. Once you have money set aside for emergencies, then make some steps towards investing. I'd guide you towards low-fee 'tracker-style' funds to provide a bedrock to long-term investing. Your post suggests it will be investing over the long-term (ie. 5-10 years or more), perhaps even to middle-age/retirement? Read as much as you can about the types of investments: unit trusts, investment trusts, ETFs; fixed-interest (bonds/corporate bonds), equities (IPOs/shares/dividends), property (mortgages, buy-to-let, off-plan). Be conservative and start with simple products. If you don't understand enough to describe it to me in a lift in 60 seconds, stay away from it and learn more about it. Many of the items you think are good long-term investments will be available within any pension plans you encounter, so the learning has a double benefit. Work a plan. Learn all the time. Keep your day-to-day life quite conservative and be more risky in your long-term investing. And ask for advice on things here, from friends who aren't skint and professionals for specific tasks (IFAs, financial planners, personal finance coaches, accountants, mortgage brokers). The fact you're being proactive tells me you've the tools to do well. Best wishes to you.",
"title": ""
},
{
"docid": "d5b20e52a87063de073192df82373049",
"text": "Public sector and private industry retirement plans, taxation and estate planning would be the most substantial differences between the two countries. The concepts for accumulating wealth are the same, and if you are doing anything particularly lucrative with an above average amount of risk, the aforementioned differences are not very relevant, for a twenty something.",
"title": ""
},
{
"docid": "a43fa9b65ec8de1dcc44ad2e934b5d6b",
"text": "I would always recommend the intelligent investor by Benjamin Graham the mentor of warren buffet once you have a basic knowledge ie what is a share bond guilt etc In terms of pure investment the UK is fairly similar the major difference is the simpler tax structure, ISA allowance and the more generous CGT regime.",
"title": ""
},
{
"docid": "66ffc7bcaf7543e8dc2c1a71e4e07187",
"text": "I will definitely recommend the following books The above books will open lot of eyes to exactly know what you are doing with your personal finances in a day to day basis.These books will surely be in the top of my list which I will be giving away to my kins in my later stage. The concepts are universally the same, feel free to skip the chapters which were US based. I live in UK and I read most of the above books in late twenties, it surely made lot of changes and also drastically improved my personal finance acumen. I wish I have read these books in my early twenties.",
"title": ""
},
{
"docid": "db1ccbc57a778e7a93f06a6a95ab0dde",
"text": "\"Consultant, I commend you for thinking about your financial future at such an early age. Warren Buffet, arguably the most successful investor ever lived, and the best known student of Ben Graham has a very simple advice for non-professional investors: \"\"Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard’s.)\"\" This quote is from his 2013 letter to shareholders. Source: http://www.berkshirehathaway.com/letters/2013ltr.pdf Buffet's annual letters to shareholders are the wealth of useful and practical wisdom for building one's financial future. The logic behind his advice is that most investors cannot consistently pick stock \"\"winners\"\", additionally, they are not able to predict timing of the market; hence, one has to simply stay in the market, and win over in the long run.\"",
"title": ""
},
{
"docid": "2a802bbb4b1d55bf32ecbac3f41fdc5f",
"text": "As you are in UK, you should think in terms of Tax Free (interest and accumulated capital gains) ISA type investments for the long term AND/OR open a SIPP (Self Invested Pension Plan) account where you get back the tax you have paid on the money you deposit for your old age. Pensions are the best bet for money you do not need at present while ISAs are suitable for short term 5 years plus or longer.",
"title": ""
}
] |
[
{
"docid": "7ab5e1c25f0ae028667ac6fd6f605c2b",
"text": "Those are some very broad questions and I don't think I can answer them completely, but I will add what I can. Barron's Finance and Investment Handbook is the best reference book I have found. It provides a basic description/definition for every type of investment available. It covers stocks, preferred stocks, various forms of bonds as well as mortgage pools and other exotic instruments. It has a comprehensive dictionary of finance terms as well. I would definitely recommend getting it. The question about how people invest today is a huge one. There are people who simply put a monthly amount into a mutual fund and simply do that until retirement on one side and professional day traders who move in and out of stocks or commodities on a daily basis on the other.",
"title": ""
},
{
"docid": "4f90fcf8c3bab693c51c6dbe1ed7a141",
"text": "\"First and foremost you must remember that they are people (something I don't think you have trouble with, but others might). When dealing with increasingly desperate financial struggles, it's not uncommon to allow financial trouble to define you, or for others to see you only as \"\"poor\"\". Money is a human creation. It's not real, like fire or water, and \"\"money problems\"\" is a misnomer. Whatever problems they have, money is only one symptom. Often, dealing with those deeper human problems, such as lack of confidence, depression, fear or behavioral issues, is the key to correcting \"\"downstream\"\" problems like poor money management. Not that learning how to manage money isn't important, but it doesn't sound like that is the primary issue in this case. Westerners tend to view money trouble as distinct from other problems. The answer to money troubles is often understood to be \"\"more money\"\" or \"\"smarter money\"\" - earn more or spend better. It helps to step back and look beyond finances. What's going in their lives? How does that make them feel? Do they feel unimportant or valueless? How's their family life? Do they have good emotional support, or are they running \"\"on empty\"\", trying to fill the emptiness with other things (like games, for example). (Simply telling them to stop purchasing games, for example, without finding a better replacement just perpetuates the feelings of shame, valuelessness and emptiness.) Discovering the deeper elements of your friends' situation is much more complicated than giving them money or paying for a financial counselor (neither of which are bad things), but it may make a tremendous difference not just in your friends' bank account, but in their lives as well. My wife and I have experienced all of this first-hand, so I know the predicament you are in. We've even had people in tough financial situations live in our home with us. In all the situations in which we've been close enough to understand context, money wasn't the primary issue. It's always been something else, more often than not family, but not always. I've found the book When Helping Hurts helpful for gaining some perspective, though it's not a perfect match (since it deals more with poverty on a grand scale). You may still find it helpful in terms of general principles, but, ultimately, each situation is going to be unique and no one-size-fits-all strategy exists to solve all problems. In the end, building a deeper relationship is the best path toward finding a long-term solution.\"",
"title": ""
},
{
"docid": "a5962b3b7eac619b9f8797580b9e859f",
"text": "The 20x number is drawn directly from the assumption that it should be easy to get more than 4% average return on investment. After lots of historical studies, Monte Carlo simulations, and the like there was a consensus that saving more didn't significantly increase the odds of achieving at least the desired yearly income sustainably. (That's the same calculations the insurance firms use as the starting point for writing annuities.) There are also some assumptions about inflation and its interaction with the market built into this rule-of-thumb. Note that this is 20x what you want as post-retirement income, not necessarily 20x your current income. I have a moderately frugal lifestyle, And my budget confirms that my actual spending -- even in years when I allow myself a splurge -- is well below my current income, with the excess going into the investments. To sustain my lifestyle, I need that lower number plus any taxes that'll be due on it plus whatever I want to allocate as average emergency reserve... and theoretically I should be able to base the 20x on that lower number. When I run estimates (Quicken has a tool for this, so does my credit union, I presume others are widely available), they tend to confirm this. I'm still using the higher number for planning, though. I don't feel any need to retire early (though I have issues with my current manager), and I have no objection at all to being able to afford better toys on occasion. Or to leaving a legacy to friends, relatives, and/or charity. But it's nice to know exactly when I could punt the day job if I wanted to.",
"title": ""
},
{
"docid": "8cc2389786fff79f3147cc8c27172e0e",
"text": "Personal loans are typically more expensive (have higher interest) than mortgages, because they are not backed by an immovable asset. So you should reconsider the decision to not want a mortgage; it would be cheaper. Aside from that, once you get a personal loan, you are free to do with it whatever you want; this includes sending it to your parents, buying something, gambling it away in Vegas, or take out cash and burn it. So, yes, you can. Sending money from the UK to other EU countries should be easy and simple, once it is in your account, your bank can help you to make the transfer. I assume you understand that if your parents walk away with the money, you are left holding the bag. You are taking the full risk, and you will have to pay it back.",
"title": ""
},
{
"docid": "b016ad4e91e887d07872457741a50b2c",
"text": "Can anyone recommend a good textbook that covers Fannie Mae and Freddie Mac, or more broadly the US home mortgage market? A basic search seems to mostly turn up books that aim to make an ideological point rather than attempt to provide an actual explanation. I have a basic financial knowledge including a basic understanding of derivatives at the level of say the textbook by Hull, but know very little about the US mortgage market specifically. I don't mind technical detail, and am not afraid of math. I don't mind if the book is broader, as long as it includes a reasonably in depth look at these GSEs and their role. This seems to be a pretty basic piece of knowledge for many financial professionals, so I assume there must be at least one standard textbook on this that I just haven't been able to find. EDIT: I'm looking for something post 2008 of course.",
"title": ""
},
{
"docid": "6ab0591bd0e809fae8e650352223ec80",
"text": "I'm going to be a bit off topic and recommend 'The Only Investment Book You'll Ever Need' by Andrew Tobias. It doesn't start with describe the workings of the stock market. Instead, it starts with making sure you have a budget and have your basic finances in order BEFORE going into the stock market. This may not sound like what you are looking for, but it really is a valuable book to read, even if you think you are all set up in that department.",
"title": ""
},
{
"docid": "198cba582cbd5efbc4acd1da63d19d23",
"text": "You could try looking for a UK implementation of http://www.yodlee.com/ : Google tells me that http://www.lovemoney.com/ ( http://www.yodlee.com/2010_1_20.html ) is one such service. I use ANZ money manager - an Australian implementation of Yodlee and find it very useful. I wouldn't use Yodlee directly though (http://money-watch.co.uk/7197/uk-pfm-tool-review-yodlee-moneycenter) those T&Cs don't sound great.",
"title": ""
},
{
"docid": "2cf6037c68fe46a7914b798417e10e48",
"text": "Something that introduces the vocabulary and treats the reader like an intelligent individual? It's a bit overkill for 'retirement', but Yale has a free online course in Financial Markets. It's very light on math, but does a good job establishing jargon and its history. It covers most of the things you'd buy or sell in financial markets, and is presented by Nobel Prize winner Robert Schiller. This particular series was filmed in 2007, so it also offers a good historical perspective of the start of the subprime collapse. There's a number of high profile guest speakers as well. I would encourage you to think critically about their speeches though. If you research what's happened to them after that lecture, it's quite entertaining: one IPO'd a 'private equity' firm that underperformed the market as a whole, another hedge fund manager bought an airline with a partner firm that was arrested for running a ponzi scheme six months later. The reading list in the syllabus make a pretty good introduction to the field, but keep in mind they're for institutional investors not your 401(k).",
"title": ""
},
{
"docid": "1cbc480e84ae4fc8dad1b073d8efd72d",
"text": "\"I've recommended this book a few times on this site, and I'm going to do it again. Get a Financial Life: Personal Finance in Your Twenties and Thirties by Beth Kobliner Most of the personal finance advice books and blogs I have found focus too much on investing, or are more about \"\"lifestyle\"\" than finances, and left me unimpressed. I like this book because it covers most of the major personal finance topics (budgets, rainy-day fund, insurance, retirement, and non-retirement investment). I have not found another book that covers the topics as concisely as this one. It is no-nonsense, very light reading. Even if you are not a book person, you can finish it in a weekend. It is really geared for the young person starting their career. Not the most current book (pre real-estate boom), but the advice is still sound. Keep in mind that is is starting point, not the ultimate answer to all financial questions.\"",
"title": ""
},
{
"docid": "463fa73a0da279bb43beb2b3d9493116",
"text": "\"So you are off to a really good start. Congratulations on being debt free and having a nice income. Being an IT contractor can be financially rewarding, but also have some risks to it much like investing. With your disposable income I would not shy away from investing in further training through sites like PluralSite or CodeSchool to improve weak skills. They are not terribly expensive for a person in your situation. If you were loaded down with debt and payments, the story would be different. Having an emergency fund will help you be a good IT contractor as it adds stability to your life. I would keep £10K or so in a boring savings account. Think of it not as an investment, but as insurance against life's woes. Having such a fund allows you to go after a high paying job you might fail at, or invest with impunity. I would encourage you to take an intermediary step: Moving out on your own. I would encourage renting before buying even if it is just a room in someone else's home. I would try to be out of the house in less than 3 months. Being on your own helps you mature in ways that can only be accomplished by being on your own. It will also reduce the culture shock of buying your own home or entering into an adult relationship. I would put a minimum of £300/month in growth stock mutual funds. Keeping this around 15% of your income is a good metric. If available you may want to put this in tax favored retirement accounts. (Sorry but I am woefully ignorant of UK retirement savings). This becomes your retire at 60 fund. (Starting now, you can retire well before 68.) For now stick to an index fund, and once it gets to 25K, you may want to look to diversify. For the rest of your disposable income I'd invest in something safe and secure. The amount of your disposable income will change, presumably, as you will have additional expenses for rent and food. This will become your buy a house fund. This is something that should be safe and secure. Something like a bond fund, money market, dividend producing stocks, or preferred stocks. I am currently doing something like this and have 50% in a savings account, 25% in a \"\"Blue chip index fund\"\", and 25% in a preferred stock fund. This way you have some decent stability of principle while also having some ability to grow. Once you have that built up to about 12K and you feel comfortable you can start shopping for a house. You may want to be at the high end of your area, so you should try and save at least 10%; or, you may want to be really weird and save the whole thing and buy your house for cash. If you are still single you may want to rent a room or two so your home can generate income. Here in the US there can be other ways to generate income from your property. One example is a home that has a separate area (and room) to park a boat. A boat owner will pay some decent money to have a place to park their boat and there is very little impact to the owner. Be creative and perhaps find a way where a potential property could also produce income. Good luck, check back in with progress and further questions! Edit: After some reading, ISA seem like a really good deal.\"",
"title": ""
},
{
"docid": "cb01b43af8a14be26c06ee2123239bbd",
"text": "I'm surprised no one has picked up on this, but the student loan is an exception to the rule. It's inflation bound (for now), you only have to pay it back as a percentage of your salary if you earn over £15k (11% on any amount over that I believe), you don't have to pay it if you lose your job, and it doesn't affect your ability to get credit (except that your repayments will be taken into account). My advice, which is slightly different to the above, is: if you have any shares that have lost more than 10% since you bought them and aren't currently recovering, sell them and pay off your debts with those. The rest is down to you - are they making more than 10% a year? If they are, don't sell them. If your dividends are covering your payments, carry on as you are. Otherwise it's down to you.",
"title": ""
},
{
"docid": "6ade21fd3e683ecce1e0dc99e3e3f3fa",
"text": "\"Having convinced myself that there is no point of paying someone's else mortgage Somewhat rhetorical this many years later, but I expect some other kid forcefed the obsession with propping up the housing market might be repeating the nonsense about \"\"paying someone else's mortgage\"\" and read this. Will you be buying your own farm to grow your own food, or are you happy with people using the money you spend on food for a mortgage? How about clothes? Will you be weaving your own clothes because you don't want money you spend on clothes to pay someone else's mortgage? What's special about the money you pay for rent that you get annoyed at how someone else spends it? Don't get a mortgage just because you don't like the idea of how other people might spend the money that's no longer yours after you pay them with it. As an aside, at your age with your income and no debt, you could be sensibly investing a lot of money. If you did that for five years, you'd be in a much better position that you would be tying yourself to whatever current scheme the UK is using to desperately prop up house prices.\"",
"title": ""
},
{
"docid": "732b1d87850d18987f69ce516b933752",
"text": "\"This Stack Exchange site is a nice place to find answers and ask questions. Good start! Moving away from the recursive answer... Simply distilling personal finance down to \"\"I have money, I'll need money in the future, what do I do\"\", an easily digestible book with how-to, multi-step guidelines is \"\"I Will Teach You To Be Rich\"\". The author talks about setting up the accounts you should have, making sure all your bills are paid automatically, saving on the big things and tips to increase your take home pay. That link goes to a compilation page on the blog with many of the most fundamental articles. However, \"\"The World’s Easiest Guide To Understanding Retirement Accounts\"\" is a particularly key article. While all the information is on the free blog, the book is well organized and concise. The Simple Dollar is a nice blog with frugal living tips, lifestyle assessments, financial thoughts and reader questions. The author also reviews about a book a week. Investing - hoping to get better returns than savings can provide while minimizing risk. This thread is an excellent list of books to learn about investing. I highly recommend \"\"The Bogleheads' Guide to Investing\"\" and \"\"The Only Investment Guide You'll Ever Need\"\". The world of investment vehicles is huge but it doesn't have to be complicated once you ignore all the fads and risky stuff. Index mutual funds are the place to start (and maybe end). Asset allocation and diversification are themes to guide you. The books on that list will teach you.\"",
"title": ""
},
{
"docid": "f43694d6b791a3c2cd5acf2302cdeffa",
"text": "Investopedia does have tutorials about investments in different asset classes. Have you read them ? If you had heard of CFA, you can read their material if you can get hold of it or register for CFA. Their material is quite extensive and primarily designed for newbies. This is one helluva book and advice coming from persons who have showed and proved their tricks. And the good part is loads of advice in one single volume. And what they would suggest is probably opposite of what you would be doing in a hedge fund. And you can always trust google to fish out resources at the click of a button.",
"title": ""
},
{
"docid": "b272698e1679609d91d03ae6740f5359",
"text": "I started my career over 10 years ago and I work in the financial sector. As a young person from a working class family with no rich uncles, I would prioritize my investments like this: It seems to be pretty popular on here to recommend trading individual stocks, granted you've read a book on it. I would thoroughly recommend against this, for a number of reasons. Odds are you will underestimate the risks you're taking, waste time at your job, stress yourself out, and fail to beat a passive index fund. It's seriously not worth it. Some additional out-of-the box ideas for building wealth: Self-serving bias is pervasive in the financial world so be careful about what others tell you about what they know (including me). Good luck.",
"title": ""
}
] |
fiqa
|
4b0a7e891fd1dc0c49f9f3aecae15a11
|
Calculate Finance Rate, Interest Amount when we have below line Fees
|
[
{
"docid": "f7907f479ca9dea88aa294511fa079ce",
"text": "The equation for the payment is This board does not support Latex (the number formatting code) so the above is an image, the code is M is the payment calculated, n is the number of months or periods to pay off, and i is the rate per period. You can see that with i appearing 3 times in this equation, it's not possible to isolate to the form i=.... so a calculator will 'guess,' and use, say, 10%. It then raises or lowers the rate until the result is within the calculator's tolerance. I've observed that unlike other calculations, when you hit the button to calculate, a noticeable time lag occurs. I hope I haven't read too much into your question, it seemed to me this was what you asked.",
"title": ""
}
] |
[
{
"docid": "c7cf50b1d08c74636ecff24bf8c02aa3",
"text": "These are the steps I'd follow: $200 today times (1.04)^10 = Cost in year 10. The 6 deposits of $20 will be one time value calculation with a resulting year 7 final value. You then must apply 10% for 3 years (1.1)^3 to get the 10th year result. You now have the shortfall. Divide that by the same (1.1)^3 to shift the present value to start of year 7. (this step might confuse you?) You are left with a problem needing 3 same deposits, a known rate, and desired FV. Solve from there. (Also, welcome from quant.SE. This site doesn't support LATEX, so I edited the image above.)",
"title": ""
},
{
"docid": "f339181a8d572823cf74602bb8c2ac95",
"text": "The number you are trying to calculate is called the Internal Rate of Return (IRR). Google Spreadsheets (and excel) both have an XIRR function that can do this for you fairly simply. Setup a spreadsheet with 1 column for dates, 1 column for investment. Mark your investments as negative numbers (payment to invest). All investments will be negative. Mark your last row with today's date and today's valuation (positive). All withdrawals will be positive, so you are pretending to withdrawal your entire account for the purpose of calculation. Do not record dividends or other interim returns unless you are actually withdrawing money. The XIRR function will calculate your internal rate of return with irregularly timed investments. Links: Article explaining XIRR function (sample spreadsheet in google docs to modify)",
"title": ""
},
{
"docid": "1679ed0311b0aed45606aa58c7616453",
"text": "You can get really nerdy with the EV calc, but I would just add that it's important to deduct any non-operating, non-consolidated assets in addition to the minority interest adjustment - e.g. unconsolidated subsidiaries, excess real estate, excess working capital, etc.",
"title": ""
},
{
"docid": "3d5a8298c41dbfe1d3ded257f82ae06b",
"text": "The Finance functions in spreadsheet software will calculate this for you. The basic functions are for Rate, Payment, PV (present value), FV (Future value), and NPER, the number of periods. The single calculation faces a couple issues, dealing with inflation, and with a changing deposit. If you plan to save for 30 years, and today are saving $500/mo, for example, in ten years I hope the deposits have risen as well. I suggest you use a spreadsheet, a full sheet, to let you adjust for this. Last, there's a strange effect that happens. Precision without accuracy. See the results for 30-40 years of compounding today's deposit given a return of 6%, 7%, up to 10% or so. Your forecast will be as weak as the variable with the greatest range. And there's more than one, return, inflation, percent you'll increase deposits, all unknown, and really unknowable. The best advice I can offer is to save till it hurts, plan for the return to be at the lower end of the range, and every so often, re-evaluate where you stand. Better to turn 40, and see you are on track to retire early, than to plan on too high a return, and at 60 realize you missed it, badly. As far as the spreadsheet goes, this is for the Google Sheets - Type this into a cell =nper(0.01,-100,0,1000,0) It represents 1% interest per month, a payment (deposit) of $100, a starting value of $0, a goal of $1000, and interest added at month end. For whatever reason, a starting balance must be entered as a negative number, for example - =nper(0.01,-100,-500,1000,0) Will return 4.675, the number of months to get you from $500 to $1000 with a $100/mo deposit and 1%/mo return. Someone smarter than I (Chris Degnen comes to mind) can explain why the starting balance needs to be entered this way. But it does show the correct result. As confirmed by my TI BA-35 financial calculator, which doesn't need $500 to be negative.",
"title": ""
},
{
"docid": "e579c480f632018d2e79008cd1ccaa4b",
"text": "Line one shows your 1M, a return with a given rate, and year end withdrawal starting at 25,000. So Line 2 starts with that balance, applies the rate again, and shows the higher withdrawal, by 3%/yr. In Column one, I show the cumulative effect of the 3% inflation, and the last number in this column is the final balance (903K) but divided by the cumulative inflation. To summarize - if you simply get the return of inflation, and start by spending just that amount, you'll find that after 20 years, you have half your real value. The 1.029 is a trial and error method, as I don't know how a finance calculator would handle such a payment flow. I can load the sheet somewhere if you'd like. Note: This is not exactly what the OP was looking for. If the concept is useful, I'll let it stand. If not, downvotes are welcome and I'll delete.",
"title": ""
},
{
"docid": "ceb0296f8c154f411ec59378a46403a7",
"text": "This depends on the loan calculation methodology. If it is on reducing balance then yes. Else not much difference",
"title": ""
},
{
"docid": "1bbb638563f38eb0be7fee88e2c1c70a",
"text": "The 1.140924% is calculated by taking 13.69%/12 = 1.140924%. Dividing this number by 100 gives you the answer 1.140924 / 100 = .01140924. When dealing with decimals it's important to remember the relationship between a decimal and a percent. 1% = .01 To return .01 to a percent you must multiple that number by 100. So .01 x 100 = 1% In order to get a decimal from a percent, which is what is used in calculations, you must divide by 100. So, here if we are trying to calculate how much interest you are paying each month we can do this: 9800 * .1369 = $1341.62 (interest you will pay that year IF the principal balance never changed) 1341.62 / 12 = ~111.81 Now, month two 9578.34 * .1369 = 1311.274746 1311.274746 / 12 = 109.28 In order to get your monthly payments (which won't change) for the life of the loan, you can use this formula: Monthly payment = r(PV) / (1-(1+r)^-n) Where: r= Interest Rate (remember if calculating monthly to do .1369/12) PV= Present Value of loan n=time of loan ( in your case 36 since we are talking monthly and 12*3 = 36) from here we get: [(.1369/12)*9800]/(1-(1+.1369/12)^-36) = $333.467 when rounding is $333.47 As far as actual applied interest rate, I'm not even sure what that number is, but I would like to know once you figure out, since the interest rate you're being charged is most definitely 13.69%.",
"title": ""
},
{
"docid": "418c1aba4dd73fbeabded92cc00ddb0c",
"text": "The question is valid, you just need to work backwards. After how much money-time will the lower expense offset the one time fee? Lower expenses will win given the right sum of money and right duration for the investment.",
"title": ""
},
{
"docid": "9a569aa1c64b6688f4f27726484078a5",
"text": "For this, the internal rate of return is preferred. In short, all cash flows need to be discounted to the present and set equal to 0 so that an implied rate of return can be calculated. You could try to work this out by hand, but it's practically hopeless because of solving for roots of the implied rate of return which are most likely complex. It's better to use a spreadsheet with this capability such as OpenOffice's Calc. The average return on equity is 9%, so anything higher than that is a rational choice. Example Using this simple tool, the formula variables can easily be input. For instance, the first year has a presumed cash inflow of $2,460 because the insurance has a 30% discount from $8,200 that is assumed to be otherwise paid, a cash inflow of $40,000 to finance the sprinklers, a cash outflow of $40,000 to fund the sprinklers, a $400 outflow for inspection, and an outflow in the amount of the first year's interest on the loan. This should be repeated for each year. They can be input undiscounted, as they are, for each year, and the calculator will do the rest.",
"title": ""
},
{
"docid": "4864753b99d7a96b7700b749d5cb8693",
"text": "The solution to this problem is somewhat like grading on a curve. Use the consumption ratio multiplied by the attendance (which is also a ratio, out of 100 days) to calculate how much each person owes. This will leave you short. Then add together all of the shares in a category, determine the % increase required to get to the actual cost of that category, and increase all the shares by that %.",
"title": ""
},
{
"docid": "01f802919d3d8a84192800cb0bda9181",
"text": "A lease payment is composed of an interest portion (borrowed money) and depreciation amount (purchase - residual). The Monthly payment is then Monthly Interest Cost + Monthly Depreciation Cost The Money Factor is used to estimate the amount of interest due in a single month of a lease so you can figure out the monthly payment. If you are borrowing $100,000 then over the entire loan of repayment from a balance of $100,000 to a balance of $0, the average amount you owed was $50,000 (1/2 of principal). You are repaying this loan monthly (1/12 of a year) and percents are expressed as decimals (1/100). 6 * 1/2 (for principal) * 1/12 (for monthly) * 1/100 (to convert percentage from 6% to .06) = 6 * 1/2400. 2400 is the product of 3 consecutive conversion (1/2 * 1/12 * 1/100) to convert from an interest rate to a money factor. 6/2400 = Money factor of 0.0025 which can be multiplied against the total amount being borrowed to know what the monthly interest would roughly equal. Some Money Factor info: https://www.alphaleasing.com/resources/articles/MoneyFactor.asp",
"title": ""
},
{
"docid": "ce67213c02975c72d0ddd432803db58a",
"text": "1: Low fees means: a Total Expense Ratio of less than 0,5%. One detail you may also want to pay attention to whether the fund reinvests returns (Thesaurierender Fonds) which is basically good for investing, but if it's also a foreign-based fund then taxes get complicated, see http://www.finanztip.de/indexfonds-etf/thesaurierende-fonds/",
"title": ""
},
{
"docid": "452f27da8e2c009b017c0b881ec4cf77",
"text": "I have answered your question in detail here https://stackoverflow.com/questions/12396422/apr-calculation-formula The annuity formula in FDIC document is at first finding PVIFAD present value annuity due factor and multiplying it with annuity payment and then dividing it by an interest factor of (1+i) to reduce the annuity to an ordinary annuity with end of period payments They could have simply used PVIFA and multiplying it with annuity payment to find the present value of an ordinary annuity In any case, you should not follow the directions in FDIC document to find interest rate at which the present value of annuity equals the loan amount. The method they are employing is commonly used by Finance Professors to teach their students how to find internal rate of return. The method is prone to lengthy trial and error attempts without having any way of knowing what rate to use as an initial guess to kick off the interest rate calculations So this is what I would suggest if you are not short on time and would like to get yourself familiar with numerical methods or iterative techniques to find internal rate of return There are way too many methods at disposal when it comes to finding interest rates some of which include All of the above methods use a seed value as a guess rate to start the iterative calculations and if results from successive calculations tend to converge within a certain absolute Error bound, we assume that one of the rates have been found as there may be as many rates as the order of the polynomial in this case 36 There are however some other methods that help find all rates by making use of Eigenvalues, but for this you would need a lengthy discourse of Linear Algebra One of the methods that I have come across which was published in the US in 1969 (the year I was born :) ) is called the Jenkins Traub method named after the two individuals who worked jointly on finding a solution to all roots of a polynomial discarding any previous work on the same subject I been trying to go over the Jenkins Traub algorithm but am having difficulty understanding the complex nature of the calculations required to find all roots of the polynomial In summary you would be better of reading up on this site about the Newton Raphson method to find IRR",
"title": ""
},
{
"docid": "b26146f4690f6340fd7e29cdd4f8fd28",
"text": "Here's the purely mathematical answer for which fees hurt more. You say taking the money out has an immediate cost of $60,000. We need to calculate the present value of the future fees and compare it against that number. Let's assume that the investment will grow at the same rate either with or without the broker. That's actually a bit generous to the broker, since they're probably investing it in funds that in turn charge unjustifiable fees. We can calculate the present cost of the fees by calculating the difference between: As it turns out, this number doesn't depend on how much we should expect to get as investment returns. Doing the math, the fees cost: 220000 - 220000 * (1-0.015)^40 = $99809 That is, the cost of the fees is comparable to paying nearly $100,000 right now. Nearly half the investment! If there are no other options, I strongly recommend taking the one-time hit and investing elsewhere, preferably in low-cost index funds. Details of the derivation. For simplicity, assume that both fees and growth compound continuously. (The growth does compound continuously. We don't know about the fees, but in any case the distinction isn't very significant.) Fees occur at a (continuous) rate of rf = ln((1-0.015)^4) (which is negative), and growth occurs at rate rg. The OPs current principal is P, and the present value of the fees over time is F. We therefore have the equation P e^((rg+rf)t) = (P-F) e^(rg t) Solving for F, we notice that the e^rg*t components cancel, and we obtain F = P - P e^(rf t) = P - P e^(ln((1-0.015)^4) t) = P - P (1-0.015)^(4t)",
"title": ""
},
{
"docid": "50c29401d0ad5c19a05ba7f906e56cbe",
"text": "I was typing up a long response and lost it to a backspace.. so, I apologize but I don't intend on rewriting it all. You'll have to use a method called bootstrapping to get the forward rates. Essentially you're looking at the spot rate today, and the forward rates, then filling in what must be the rate to make them equal out in the end. Sorry I'm not more help!",
"title": ""
}
] |
fiqa
|
1e8b5f9bb9a8104afeed90ebb0ccea69
|
Any Ubiquitous Finance App That is on Mac, iOS and Windows?
|
[
{
"docid": "e7c1db1307ddf6bb11778febb7ef6e67",
"text": "Mint.com is a web app with an iPhone (and Android) app. Also, You Need A Budget appears to support all three.",
"title": ""
},
{
"docid": "1127979e7b69eab8ac1e423496d73c8e",
"text": "\"As I have said before on this site, I personally use Moneydance. They have Mac, Linux and Windows support, and recently added an iOS mobile version that syncs with the desktop. I have only used the Mac \"\"desktop\"\" version, and it seems to function well, but have not tried the other platforms, nor the iOS version. I have no company affiliation, but am a (mostly) happy user. :-)\"",
"title": ""
},
{
"docid": "52e161aec330831a69433a984d0b89ae",
"text": "You can try SplashMoney. It works on many platforms, including iPhone, iPod and Mac, but also Palm OS, Android, Blackberry and windows. I've been using it —since more than two years now— with my old Palm OS PDA and it works great. As I work mainly with Linux, I've tested very few times its synchronization with its desktop companion running on windows.",
"title": ""
},
{
"docid": "9ae8bb9c6037940703df953381b830ee",
"text": "I have been using bearsofts money app, both in mac and iOS. I think only down side with this apps is you need to buy them separately. http://ibearmoney.com/money-mac.html",
"title": ""
}
] |
[
{
"docid": "ab62b3029d79d7184624730299ea3d70",
"text": "I have been using http://moneydance.com/ for several years now. Works pretty well for me. Another one is http://www.iggsoftware.com/ibank/ I have not used it other than a five minute play session. Looks more mac-ish than Moneydance, but that's all I know.",
"title": ""
},
{
"docid": "03e9557aeedc4a1650f7eba55a9cf3b6",
"text": "I work for a fund management company and we get our news through two different service providers Bloomberg and Thomson One. They don't actually source the news though they just feed news from other providers Professional solutions (costs ranging from $300-1500+ USD/month/user) Bloomberg is available as a windows install or via Bloomberg Anywhere which offers bimometric access via browser. Bloomberg is superb and their customer support is excellent but they aren't cheap. If you're looking for a free amateur solution for stock news I'd take a look at There are dozens of other tools people can use for day trading that usually provide news and real time prices at a cost but I don't have any direct experience with them",
"title": ""
},
{
"docid": "addd6d0058b349d933d1b3d1f50e168e",
"text": "Here is a list to Yahoo! Finance API. Not sure how much longer this will be support though: https://code.google.com/p/yahoo-finance-managed/wiki/YahooFinanceAPIs",
"title": ""
},
{
"docid": "457c5bf12f90218237dd69a0c2508da6",
"text": "\"Moneydance is a commercial application that is cross-platform. Written in Java, they run and are supported on Windows, Mac and Linux. They integrate with many financial institutions and for those that it cannot, you can import a locally downloaded file. I have used it for several years on my Mac, but have no company affiliation. I'm not sure if by saying \"\"Unix\"\" software you meant FOSS of some kind, but good luck in any case.\"",
"title": ""
},
{
"docid": "1ce26b7bf8249861b734fb8c1e184fc4",
"text": "Plaid is exactly what you are looking for! It's docs are easy to understand, and you can sign up to their API and use their free tier to get started. An example request to connect a user to Plaid and retrieve their transactions data (in JSON):",
"title": ""
},
{
"docid": "987be59025ba34d16ca1979d31c5d0a0",
"text": "\"Unfortunately I don't think any of the online personal finance applications will do what you're asking. Most (if not all) online person finance software uses a combination of partnerships with the banks themselves and \"\"screen scraping\"\" to import your data. This simplifies things for the user but is typically limited to whenever the service was activated. Online personal finance software is still relatively young and doesn't offer the depth available in a desktop application (yet). If you are unwilling to part with historical data you spent years accumulating you are better off with a desktop application. Online Personal Finance Software Pros Cons Desktop Personal Finance Software Pros Cons In my humble opinion the personal finance software industry really needs a hybrid approach. A desktop application that is synchronized with a website. Offering the stability and tools of a desktop application with the availability of a web application.\"",
"title": ""
},
{
"docid": "de1433f15a5657ab6d10c2427bdd38b9",
"text": "As @littleadv and @DumbCoder point out in their comments above, Bloomberg Terminal is expensive for individual investors. If you are looking for a free solution I would recommend Yahoo and Google Finance. On the other side, if you need more financial metrics regarding historic statements and consensus estimates, you should look at the iPad solution from Worldcap, which is not free, but significantly cheaper then Bloomberg and Reuters. Disclosure: I am affiliated with WorldCap.",
"title": ""
},
{
"docid": "80cd38443246f7d211761deb6020b2fc",
"text": "\"I've just recently launched an open source wealth management platform - wealthbot.io ... \"\"Webo\"\" is mostly targeted at RIA's to help the manage multiple portfolios, etc. Take a look at the demo at demo.wealthbot.io, you'll also find links to github, etc. there. It's a rather involved project, but if you are looking for use cases of rebalancing, portfolio accounting, custodian integration, tax loss harvesting, and many other features available at some of the popular robo-advisors, you might find it interesting.\"",
"title": ""
},
{
"docid": "9e6f5a82008f9330d2061b78d7cbadd5",
"text": "I spent a while looking for something similar a few weeks back and ended up getting frustrated and asking to borrow a friend's Bloombterg. I wish you the best of luck finding something, but I wasn't able to. S&P and Morningstar have some stuff on their site, but I wasn't able to make use of it. Edit: Also, Bloomberg allows shared terminals. Depending on how much you think as a firm, these questions might come up, it might be worth the 20k / year",
"title": ""
},
{
"docid": "20dc26fdf817c8a9093762d1cb56b384",
"text": "\"Quicken for Mac will track stocks and mutual funds and allows you to set the \"\"home\"\" currency.\"",
"title": ""
},
{
"docid": "f560d0543b1e788b8411f60aa7523c2b",
"text": "Got a degree in finance and I'll talk about simple ways to really improve your learning experience: excel will be your best friend. Get comfortable with it. Learn; pivot tables, formulas, formatting, and macros. Learn to type at a decent speed. Many students still type slow. It will hinder you Current events is the best way to stay informed. Always be reading up on business information. Pretty much twice a day. Join a free stock market game and track how you do. Get on it twice a week and make trades frequent based on what you think. I can elaborate more if you have any more questions !",
"title": ""
},
{
"docid": "3b97c12e43ff897b685f9465d1f85e67",
"text": "I had the same problem and was looking for a software that would give me easy access to historical financial statements of a company, preferably in a chart. So that I could easily compare earnings per share or other data between competitors. Have a look at Stockdance this might be what you are looking for. Reuters Terminal is way out of my league (price and complexity) and Yahoo and Google Finance just don't offer the features I want, especially on financials. Stockdance offers a sort of stock selection check list on which you can define your own criterion’s. Hence it makes no investment suggestions but let's you implement your own investing strategy.",
"title": ""
},
{
"docid": "830ab9fb4caf0738837905aa1d8a5b57",
"text": "I generally concur with your sentiments. mint.com has 'hack me' written all over it. I know of two major open source tools for accounting: GNUCash and LedgerSMB. I use GNUCash, which comes close to meeting your needs: The 2.4 series introduced SQL DB support; mysql, postgres and sqlite are all supported. I migrated to sqlite to see how the schema looked and ran, the conclusion was that it runs fine but writing direct sql queries is probably beyond me. I may move it to postgres in the future, just so I can write some decent reports. Note that while it uses HTML for reporting, there is no no web frontend. It still requires a client, and is not multi-user safe. But it's probably about the closest to what you what that still falls under the heading of 'personal finance'. A fork of SQL Ledger, this is postgreSQL only but does have a web frontend. All the open source finance webapps I've found are designed for small to medium busineses. I believe it should meet your needs, though I've never used it. It might be overkill and difficult to use for your limited purposes though. I know one or two people in the regional LUG use LedgerSMB, but I really don't need invoicing and paystubs.",
"title": ""
},
{
"docid": "c83ab56176a53cc349d933f86728f74c",
"text": "\"I use Google Finance too. The only thing I have problem with is dividend info which it wouldn't automatically add to my portfolio. At the same time, I think that's a lot to ask for a free web site tool. So when dividend comes, I manually \"\"deposit\"\" the dividend payment by updating the cash amount. If the dividend comes in share form, I do a BUY at price 0 for that particular stock. If you only have 5 stocks, this additional effort is not bad at all. I also use the Hong Kong version of it so perhaps there maybe an implementation difference across country versions. Hope this helps. CF\"",
"title": ""
},
{
"docid": "b1030124273a3360c65ff22e029e7470",
"text": "I've been budgeting with MS Money since 2004 and was pretty disappointed to hear it's being discontinued. Budgeting is actually a stress-relieving hobby for me, and I can be a bit of a control-freak when it comes to finances, so I decided to start early looking for a replacement rather than waiting until MS Money can no longer download transactions. Here are the pros and cons of the ones I've tried (updated 10/2010): You Need A Budget Pro (YNAB) - Based on the old envelopes system, YNAB has you allot money from each paycheck to a specific budget category (envelope). It encourages you to live on last money's income, and if you have trouble with overspending, that can be a great plan. Personally, I'm a big believer in the envelope concept, so that's the biggest pro I found. Also, it's a downloaded software, so once I've bought it (for about $50) it's mine, without forced upgrades as far as I've seen. The big con for me was that it does not automatically download transactions. I would have to sign on to each institution's website and manually download to the program. Also, coming from Money, I'm used to having features that YNAB doesn't offer, like the ability to store information about my accounts. Overall, it's forward-thinking and a good budgeting system, but will take some extra time to download transactions and isn't really a comprehensive management tool for all my financial needs. You can try it out with their free trial. Mint - This is a free online program. The free part was a major pro. It also looks pretty, if that's important to you. Updating is automatic, once you've got it all set up, so that's a pro. Mint's budgeting tools are so-so. Basically, you choose a category and tell it your limit. It yells at you (by text or email) when you cross the line, but doesn't seem to offer any other incentive to stay on budget. When I first looked at Mint, it did not connect with my credit union, but it currently connects to all my banks and all but one of my student loan institutions. Another recent improvement is that Mint now allows you to manually add transactions, including pending checks and cash transactions. The cons for me are that it does not give me a good end-of-the-month report, doesn't allow me to enter details of my paychecks, and doesn't give me any cash-flow forecasting. Overall, Mint is a good casual, retrospective, free online tool, but doesn't allow for much planning ahead. Mvelopes - Here's another online option, but this one is subscription-based. Again, we find the old envelopes system, which I think is smart, so that's a pro for me. It's online, so it downloads transactions automatically, but also allows you to manually add transactions, so another pro. The big con on this one is the cost. Depending on how you far ahead you choose to pay (quarterly, yearly or biannually), you're paying $7.60 to $12 per month. They do offer a free trial for 14 days (plus another 14 days offered when you try to cancel). Another con is that they don't provide meaningful reports. Overall, a good concept, but not worth the cost for me. Quicken - I hadn't tried Quicken earlier because they don't offer a free trial, but after the last few fell short, I landed with Quicken 2009. Pro for Quicken, as an MS Money user is that it is remarkably similar in format and options. The registers and reports are nearly identical. One frustration I'd had with Money was that it was ridiculously slow at start-up, and after a year or so of entering data, Quicken is dragging. Con for Quicken, again as an MS Money user, is that it's budgeting is not as detailed as I would like. Also, it does not download transactions smoothly now that my banks all ask security questions as part of sign-in. I have to sign in to my bank's website and manually download. Quicken 2011 is out now, but I haven't tried it yet. Hopefully they've solved the problem of security questions. Quicken 2011 promises an improved cash-flow forecast, which sounds promising, and was a feature of MS Money that I have very much missed. Haven't decided yet if it's worth the $50 to upgrade to 2011.",
"title": ""
}
] |
fiqa
|
f1f2b66c33b01356936eb4ae6b6304b4
|
US Dollar Index: a) where are long term charts; also b) is it available on Google Finance by any chance?
|
[
{
"docid": "9a75ef672f18664183b4a36f7caf546b",
"text": "a) the quick answer to your correlation is quantitative easing. basically the central bank has been devaluing the US dollar, making the prices of all goods increase (including stocks.) the stock market appear to have recovered from 2009 lows but its mainly an illusion. anyway the QE packages are very known when the correlation is not there, that means other meaningful things are happening such as better corporate earnings and real growth. b) the thinkorswim platform has charts for dollar futures, symbol /dx",
"title": ""
}
] |
[
{
"docid": "432563b151d2e6afcfa8c7f9f577f54b",
"text": "I use and recommend barchart.com. Again you have to register but it's free. Although it's a US system it has a full listing of UK stocks and ETFs under International > London. The big advantage of barchart.com is that you can do advanced technical screening with Stochastics and RS, new highs and lows, moving averages etc. You're not stuck with just fundamentals, which in my opinion belong to a previous era. Even if you don't share that opinion you'd still find barchart.com useful for UK stocks.",
"title": ""
},
{
"docid": "3ffd7588e47bdcfbf842058ec577af8f",
"text": "\"Answering this question is weird, because it is not really precise in what you mean. Do you want all stocks in the US? Do you want a selection of stocks according to parameters? Do you just want a cool looking graph? However, your possible misuse of the word derivative piqued my interest. Your reference to gold and silver seems to indicate that you do not know what a derivative actually is. Or what it would do in a portfolio. The straightforward way to \"\"see\"\" an efficient frontier is to do the following. For a set of stocks (in this case six \"\"randomly\"\" selected ones): library(quantmod) library(fPortfolio) library(PerformanceAnalytics) getSymbols(c(\"\"STZ\"\", \"\"RAI\"\", \"\"AMZN\"\", \"\"MSFT\"\", \"\"TWX\"\", \"\"RHT\"\"), from = \"\"2012-06-01\"\", to = \"\"2017-06-01\"\") returns <- NULL tickerlist <- c(\"\"STZ\"\", \"\"RAI\"\", \"\"AMZN\"\", \"\"MSFT\"\", \"\"TWX\"\", \"\"RHT\"\") for (ticker in tickerlist){ returns <- cbind(returns, monthlyReturn(Ad(eval(as.symbol(ticker))))) } colnames(returns) <- tickerlist returns <- as.timeSeries(returns) frontier <- portfolioFrontier(returns) png(\"\"frontier.png\"\", width = 800, height = 600) plot(frontier, which = \"\"all\"\") dev.off() minvariancePortfolio(returns, constraints = \"\"LongOnly\"\") Portfolio Weights: STZ RAI AMZN MSFT TWX RHT 0.1140 0.3912 0.0000 0.1421 0.1476 0.2051 Covariance Risk Budgets: STZ RAI AMZN MSFT TWX RHT 0.1140 0.3912 0.0000 0.1421 0.1476 0.2051 Target Returns and Risks: mean Cov CVaR VaR 0.0232 0.0354 0.0455 0.0360 https://imgur.com/QIxDdEI The minimum variance portfolio of these six assets has a mean return is 0.0232 and variance is 0.0360. AMZN does not get any weight in the portfolio. It kind of means that the other assets span it and it does not provide any additional diversification benefit. Let us add two ETFs that track gold and silver to the mix, and see how little difference it makes: getSymbols(c(\"\"GLD\"\", \"\"SLV\"\"), from = \"\"2012-06-01\"\", to = \"\"2017-06-01\"\") returns <- NULL tickerlist <- c(\"\"STZ\"\", \"\"RAI\"\", \"\"AMZN\"\", \"\"MSFT\"\", \"\"TWX\"\", \"\"RHT\"\", \"\"GLD\"\", \"\"SLV\"\") for (ticker in tickerlist){ returns <- cbind(returns, monthlyReturn(Ad(eval(as.symbol(ticker))))) } colnames(returns) <- tickerlist returns <- as.timeSeries(returns) frontier <- portfolioFrontier(returns) png(\"\"weights.png\"\", width = 800, height = 600) weightsPlot(frontier) dev.off() # Optimal weights out <- minvariancePortfolio(returns, constraints = \"\"LongOnly\"\") wghts <- getWeights(out) portret1 <- returns%*%wghts portret1 <- cbind(monthprc, portret1)[,3] colnames(portret1) <- \"\"Optimal portfolio\"\" # Equal weights wghts <- rep(1/8, 8) portret2 <- returns%*%wghts portret2 <- cbind(monthprc, portret2)[,3] colnames(portret2) <- \"\"Equal weights portfolio\"\" png(\"\"performance_both.png\"\", width = 800, height = 600) par(mfrow=c(2,2)) chart.CumReturns(portret1, ylim = c(0, 2)) chart.CumReturns(portret2, ylim = c(0, 2)) chart.Drawdown(portret1, main = \"\"Drawdown\"\", ylim = c(-0.06, 0)) chart.Drawdown(portret2, main = \"\"Drawdown\"\", ylim = c(-0.06, 0)) dev.off() https://imgur.com/sBHGz7s Adding gold changes the minimum variance mean return to 0.0116 and the variance stays about the same 0.0332. You can see how the weights change at different return and variance profiles in the picture. The takeaway is that adding gold decreases the return but does not do a lot for the risk of the portfolio. You also notice that silver does not get included in the minimum variance efficient portfolio (and neither does AMZN). https://imgur.com/rXPbXau We can also compare the optimal weights to an equally weighted portfolio and see that the latter would have performed better but had much larger drawdowns. Which is because it has a higher volatility, which might be undesirable. --- Everything below here is false, but illustrative. So what about the derivative part? Let us assume you bought an out of the money call option with a strike of 50 on MSFT at the beginning of the time series and held it to the end. We need to decide on the the annualized cost-of-carry rate, the annualized rate of interest, the time to maturity is measured in years, the annualized volatility of the underlying security is proxied by the historical volatility. library(fOptions) monthprc <- Ad(MSFT)[endpoints(MSFT, \"\"months\"\")] T <- length(monthprc) # 60 months, 5 years vol <- sd(returns$MSFT)*sqrt(12) # annualized volatility optprc <- matrix(NA, 60, 1) for (t in 1:60) { s <- as.numeric(monthprc[t]) optval <- GBSOption(TypeFlag = \"\"c\"\", S = s, X = 50, Time = (T - t) / 12, r = 0.001, b = 0.001, sigma = vol) optprc[t] <- optval@price } monthprc <- cbind(monthprc, optprc) colnames(monthprc) <- c(\"\"MSFT\"\", \"\"MSFTCall50\"\") MSFTCall50rets <- monthlyReturn(monthprc[,2]) colnames(MSFTCall50rets) <- \"\"MSFTCall50rets\"\" returns <- merge(returns, MSFTCall50rets) wghts <- rep(1/9, 9) portret3 <- returns%*%wghts portret3 <- cbind(monthprc, portret3)[,3] colnames(portret3) <- \"\"Equal weights derivative portfolio\"\" png(\"\"performance_deriv.png\"\", width = 800, height = 600) par(mfrow=c(2,2)) chart.CumReturns(portret2, ylim = c(0, 4.5)) chart.CumReturns(portret3, ylim = c(0, 4.5)) chart.Drawdown(portret2, main = \"\"Drawdown\"\", ylim = c(-0.09, 0)) chart.Drawdown(portret3, main = \"\"Drawdown\"\", ylim = c(-0.09, 0)) dev.off() https://imgur.com/SZ1xrYx Even though we have a massively profitable instrument in the derivative. The portfolio analysis does not include it because of the high volatility. However, if we just use equal weighting and essentially take a massive position in the out of the money call (which would not be possible in real life), we get huge drawdowns and volatility, but the returns are almost two fold. But nobody will sell you a five year call. Others can correct any mistakes or misunderstandings in the above. It hopefully gives a starting point. Read more at: https://en.wikipedia.org/wiki/Modern_portfolio_theory https://en.wikipedia.org/wiki/Option_(finance) The imgur album: https://imgur.com/a/LoBEY\"",
"title": ""
},
{
"docid": "8c755610386012c509020b65c42c3891",
"text": "\"Yes, there is a very good Return vs Risk graph put out at riskgrades.com. Look at it soon, because it will be unavailable after 6-30-11. The RA (return analysis) graph is what I think you are looking for. The first graph shown is an \"\"Average Return\"\", which I was told was for a 3 year period. Three period returns of 3, 6 and 12 months, are also available. You can specify the ticker symbols of funds or stocks you want a display of. For funds, the return includes price and distributions (total return), but only price movement for stocks - per site webmaster. I've used the graphs for a few years, since Forbes identified it as a \"\"Best of the Web\"\" site. Initially, I found numerous problems with some of the data and was able to work with the webmaster to correct them. Lately though, they have NOT been correcting problems that I bring to their attention. For example, try the symbols MUTHX, EDITX, AWSHX and you'll see that the Risk Grades on the graphs are seriously in error, and compress the graph results and cause overwriting and poor readability. If anyone knows of a similar product, I'd like to know about it. Thanks, George\"",
"title": ""
},
{
"docid": "ee13d447ca63a0e4424994931d061598",
"text": "https://www.hussmanfunds.com/wmc/wmc171009m.png >The following charts will provide a sense of where the U.S. equity market currently stands. The first chart shows our margin-adjusted CAPE, which as noted above has a correlation of about -0.89 with actual subsequent market returns across U.S. market cycles since the 1920’s. https://www.hussmanfunds.com/wmc/wmc171009.htm It will turn, downside potential is historic.",
"title": ""
},
{
"docid": "96ffe6a551593b9b69ec6a68d6a2175b",
"text": "You may refer to project http://jstock.sourceforge.net. It is open source and released under GPL. It is fetching data from Yahoo! Finance, include delayed current price and historical price.",
"title": ""
},
{
"docid": "3aeef25d59c01d9382647746f9d7cada",
"text": "\"I would make this a comment but I am not allowed apparently. Unless your continent blows up, you'll never lost all your money. Google \"\"EUR USD\"\" if you want news stories or graphs on this topic. If you're rooting for your 10k USD (but not your neighbors), you want that graph to trend downward.\"",
"title": ""
},
{
"docid": "55f332da2bc6737a330b520c90586811",
"text": "The portion of a stock movement not correlated with stocks in general is called Alpha. I don't know of any online tools to graph alpha. Keep in mind that a company like Apple is so huge right now that any properly weighted index will have to correlate with it to some degree.",
"title": ""
},
{
"docid": "477ff98da46062514eaec62de026fd63",
"text": "Center for Research in Security Prices would be my suggestion for where to go for US stock price history. Major Asset Classes 1926 - 2011 - JVL Associates, LLC has a PDF with some of the classes you list from the data dating back as far as 1926. There is also the averages stated on a Bogleheads article that has some reference links that may also be useful. Four Pillars of Investing's Chapter 1 also has some historical return information in it that may be of help.",
"title": ""
},
{
"docid": "3befa06aff1f9bdd4c44321420a6f7d0",
"text": "Options - yes we can :) Options tickers on Yahoo! Finance will be displayed as per new options symbology announced by OCC. The basic parts of new option symbol are: Root symbol + Expiration Year(yy)+ Expiration Month(mm)+ Expiration Day(dd) + Call/Put Indicator (C or P) + Strike price Ex.: AAPL January 19 2013, Put 615 would be AAPL130119P00615000 http://finance.yahoo.com/q?s=AAPL130119P00615000&ql=1 Futures - yes as well (: Ex.: 6A.M12.E would be 6AM12.CME using Yahoo Finance symbology. (simple as that, try it out) Get your major futures symbols from here: http://quotes.ino.com/exchanges/exchange.html?e=CME",
"title": ""
},
{
"docid": "6f8f4f0e86dfd43dd70b7d48f6ee9d1f",
"text": "A number of places. First, fast and cheap, you can probably get this from EODData.com, as part of a historical index price download -- they have good customer service in my experience and will likely confirm it for you before you buy. Any number of other providers can get it for you too. Likely Capital IQ, Bloomberg, and other professional solutions. I checked a number of free sites, and Market Watch was the only that had a longer history than a few months.",
"title": ""
},
{
"docid": "2011683a7282591b7487b02e7d336fa2",
"text": "I think it depends where you live in the world, but I guess the most common would be: Major Equity Indices I would say major currency exchange rate: And have a look at the Libors for USD and EUR. I guess the intent of the question is more to see how implicated you are in the daily market analysis, not really to see if you managed to learn everything by heart in the morning.",
"title": ""
},
{
"docid": "dc791ff7f4a2e648915913f2f2bc62ae",
"text": "Yup. What I wanted to know was where they are pulling it up from. Have casually used Google finance for personal investments, but they suck at corp actions. Not sure if they provide free APIs, but that would probably suck too! :D",
"title": ""
},
{
"docid": "105d56c81f6e2fbc365e6571b8b8d301",
"text": "you could try [FRED](http://research.stlouisfed.org/fred2/graph/?g=HO7), or maybe try the CME and ICE's websites for some decent data.. haven't looked just suggestions - pretty sure the symbol for the Libor futures is EM, you could approximate from that so long as it's not a doctoral thesis",
"title": ""
},
{
"docid": "e5488cb152533b6023509b909b183eec",
"text": "If you're interested in slower scale changes, one option is to use indexes that value a common commodity in different currencies such as the Big Mac Index. If a Big Mac costs more in AUD but stays the same in USD, then AUD have gone up.",
"title": ""
},
{
"docid": "21f7f766f152e5ee0c687d0465e8f0be",
"text": "\"It's required by law. 12 USC 1759 (b) requires that membership in a credit union be limited to one or more groups with a \"\"common bond\"\", or to people within a particular geographic area. For lots more gory details on how this is interpreted and enforced, you can read the manual given to credit unions by the National Credit Union Administration, which is their regulatory agency.\"",
"title": ""
}
] |
fiqa
|
7460c6b71d0f14e0acb2c1883bf99349
|
What is the value in using the “split transaction” feature present in some personal finance management tools?
|
[
{
"docid": "23364edf63997b4d8e4a60c3cec083d8",
"text": "\"Split transactions are indispensable to anybody interested in accurately tracking their spending. If I go to the big-box pharmacy down the road to pick up a prescription and then also grab a loaf of bread and a jug of milk while there, then I'd want to enter the transaction into my software as: I desire entering precise data into the software so that I can rely on the reports it produces. Often, I don't need an exact amount and estimated category totals would have been fine, e.g. to inform budgeting, or compare to a prior period. However, in other cases, the expenses I'm tracking must be tracked accurately because I'd be using the total to claim an income tax deduction (or credit). Consider how Internet access might be commingled on the same bill with the home's cable TV service. One is a reasonable business expense and deduction for the work-at-home web developer, whereas the other is a personal non-deductible expense. Were split transaction capability not available, the somewhat unattractive alternatives are: Ignore the category difference and, say, categorize the entire transaction as the larger or more important category. But, this deliberately introduces error in the tracked data, rendering it useless for cases where the category totals need to be accurate, or, Split the transaction manually. This doesn't introduce error into the tracked data, but suffers another problem: It makes a lot of work. First, one would need to manually enter two (or more) top-level transactions instead of the single one with sub-amounts. Perhaps not that much more work than if a split were entered. Worse is when it comes time to reconcile: Now there are two (or more) transactions in the register, but the credit card statement has only one. Reconciling would require manually adding up those transactions from the register just to confirm the amount on the statement is correct. Major pain! I'd place split transaction capability near the top of the list of \"\"must have\"\" features for any finance management software.\"",
"title": ""
}
] |
[
{
"docid": "0eadff1bdec0fa49ee8e33f7037d3e4f",
"text": "\"The S&P 500 is an index. This refers to a specific collection of securities which is held in perfect proportion. The dollar value of an index is scaled arbitrarily and is based off of an arbitrary starting price. (Side note: this is why an index never has a \"\"split\"\"). Lets look at what assumptions are included in the pricing of an index: All securities are held in perfect proportion. This means that if you invest $100 in the index you will receive 0.2746 shares of IBM, 0.000478 shares of General Motors, etc. Also, if a security is added/dropped from the list, you are immediately rebalancing the remaining money. Zero commissions are charged. When the index is calculated, they are using the current price (last trade) of the underlying securities, they are not actually purchasing them. Therefore it assumes that securities may be purchased without commission or other liquidity costs. Also closely related is the following. The current price has full liquidity. If the last quoted price is $20 for a security, the index assumes that you can purchase an arbitrary amount of the security at that price with a counterparty that is willing to trade. Dividends are distributed immediately. If you own 500 equities, and most distributed dividends quarterly, this means you will receive on average 4 dividends per day. Management is free. All equities can be purchased with zero research and administrative costs. There is no gains tax. Trading required by the assumptions above would change your holdings constantly and you are exempt from short-term or long-term capital gains taxes. Each one of these assumptions is, of course, invalid. And the fund which endeavors to track the index must make several decisions in how to closely track the index while avoiding the problems (costs) caused by the assumptions. These are shortcuts or \"\"approximations\"\". Each shortcut leads to performance which does not exactly match the index. Management fees. Fees are charged to the investor as load, annual fees and/or redemptions. Securities are purchased at real prices. If Facebook were removed from the S&P 500 overnight tonight, the fund would sell its shares at the price buyers are bidding the next market day at 09:30. This could be significantly different than the price today, which the index records. Securities are purchased in blocks. Rather than buying 0.000478 shares of General Motors each time someone invests a dollar, they wait for a few people and then buy a full share or a round lot. Securities are substituted. With lots of analysis, it may be determined that two stocks move in tandem. The fund may purchase two shares of General Motors rather than one of General Motors and Ford. This halves transaction costs. Debt is used. As part of substitution, equities may be replaced by options. Option pricing shows that ownership of options is equivalent to holding an amount of debt. Other forms of leverage may also be employed to achieve desired market exposure. See also: beta. Dividends are bundled. VFINX, the largest S&P 500 tracking fund, pays dividends quarterly rather than immediately as earned. The dividend money which is not paid to you is either deployed to buy other securities or put into a sinking fund for payment. There are many reasons why you can't get the actual performance quoted in an index. And for other more exotic indices, like VIX the volatility index, even more so. The best you can do is work with someone that has a good reputation and measure their performance.\"",
"title": ""
},
{
"docid": "8e54f391924671d1e00e469749b7206a",
"text": "Most businesses have some sort of software to manage their client data. Most of these various software and/or services are industry specific. Black Diamond seems to be a client management tool targeting investment advisers. From the black diamond site Reach an unparalleled level of productivity and transform your client conversations. You don't need one of these unless you're a professional investment adviser with so many clients you can't track them yourself or need more robust reporting or statement generation tools. For your purposes most regular brokers, Fidelity, Schwab, Vanguard, TD, etc, have more than enough tools for the retail level investor. They have news feeds, security analysis papers, historical data, stock screeners, etc. You, a regular retail investor doesn't need to buy special software, your broker will generally provide these things as part of the service.",
"title": ""
},
{
"docid": "f23b2797867eb8b76bf95504624c9fbc",
"text": "\"A Bloomberg terminal connected to Excel provides the value correcting splits, dividends, etc. Problem is it cost around $25,000. Another one which is free and I think that takes care of corporate action is \"\"quandl.com\"\". See an example here.\"",
"title": ""
},
{
"docid": "b32304b701b8d58dafd682346da54418",
"text": "The short answer is that there are no great personal finance programs out there any more. In the past, I found Microsoft Money to be slick and feature rich but unfortunately it has been discontinued a few years ago. Your choices now are Quicken and Mint along with the several open-source programs that have been listed by others. In the past, I found the open source programs to be both clunky and not feature-complete for my every day use. It's possible they have improved significantly since I had last looked at them. The biggest limitation I saw with them is weakness of integration with financial service providers (banks, credit card companies, brokerage accounts, etc.) Let's start with Mint. Mint is a web-based tool (owned by the same company as Quicken) whose main feature is its ability to connect to nearly every financial institution you're likely to use. Mint aggregates that data for you and presents it on the homepage. This makes it very easy to see your net worth and changes to it over time, spending trends, track your progress on budgets and long-term goals, etc. Mint allows you to do all of this with little or no data entry. It has support for your investments but does not allow for deep analysis of them. Quicken is a desktop program. It is extremely feature rich in terms of supporting different types of accounts, transactions, reports, reconciliation, etc. One could use Quicken to do everything that I just described about Mint, but the power of Quicken is in its more manual features. For example, while Mint is centred on showing you your status, Quicken allows you to enter transactions in real-time (as you're writing a check, initiating a transfer, etc) and later reconciles them with data from your financial institutions. Link Mint, Quicken has good integration with financial companies so you can generally get away with as little or as much data entry as you want. For example, you can manually enter large checks and transfers (and later match to automatically-downloaded data) but allow small entries like credit card purchases to download automatically. Bottom line, if you're just looking to keep track of where you are at, try Mint. It's very simple and free. If you need more power and want to manage your finances on a more transactional level, try Quicken (though I believe they do not have a trial version, I don't understand why). The learning curve is steep although probably gentler than that of GnuCash. Last note on why Mint.com is free: it's the usual ad-supported model, plus Mint sells aggregated consumer behaviour reports to other institutions (since Mint has everyone's transactions, it can identify consumer trends). If you're not comfortable with that, or with the idea of giving a website passwords to all your financial accounts, you will find Quicken easier to accept. Hope this helps.",
"title": ""
},
{
"docid": "adbd26a148ea4692bd89917533e0a3ab",
"text": "\"First of all, it's quite common-place in GnuCash (and in accounting in general, I believe) to have \"\"accounts\"\" that represent concepts or ideas rather than actual accounts at some institution. For example, my personal GnuCash book has a plethora of expense accounts, just made up by me to categorize my spending, but all of the transactions are really just entries in my checking account. As to your actual question, I'd probably do this by tracking such savings as \"\"negative expenses,\"\" using an expense account and entering negative numbers. You could track grocery savings in your grocery expense account, or if you want to easily analyze the savings data, for example seeing savings over a certain time period, you would probably want a separate Grocery Savings expense account. EDIT: Regarding putting that money aside, here's an idea: Let's say you bought a $20 item that was on sale for $15. You could have a single transaction in GnuCash that includes four splits, one for each of the following actions: decrease your checking account by $20, increase your expense account by $20, decrease your \"\"discount savings\"\" expense account by $5, and increase your savings account (where you're putting that money aside) by $5.\"",
"title": ""
},
{
"docid": "1ca480847c8abfafbf8136bc97e2d5e0",
"text": "I would investigate mint.com further. Plenty of people have written off using them because Intuit purchased them, but that seems like cutting of your nose to spite your face. I think mint.com is worth it for its Trends functionality alone, not to mention its automatic categorization of your purchases, reminders when bills are due, notifications of increased credit card interest rates, and overdraft notices. I don't think mint.com schedules bills & deposits, but it tracks stocks & mutual fund investments and compares your portfolio returns against Dow Jones, S&P 500, or NASDAQ if you wish. I'm not sure I see the advantage of manual transaction entry, but you can add cash or check transactions manually. As I mentioned earlier, automated categorization is a great feature. In addition, you can tag certain transactions as reimbursable or tax-related. If the primary feature you're interested in is stock quotes, maybe something like Yahoo Finance or Google Finance will be enough.",
"title": ""
},
{
"docid": "c77a68279487ce6f60e828bd58592174",
"text": "> “Any time you split a portfolio up — whether it be a credit portfolio or a trading book portfolio — you lose the benefits of diversification that allow you to reduce the capital you hold against it,” said Mr Austen. > Just to amplify this a little. Banks like diversification but you can only diversify within a reporting entity. At the moment, most banks have a single EU wide reporting entity so thay are free to combine trade and credit exposures. With a mandated split, they will be forced to split the pot between the UK and the EU entities as each must look healthy.",
"title": ""
},
{
"docid": "a94a1e65b2db8127bd4c8dec7cc095b6",
"text": "The reason to do a stock split is to get the price of the stock down to an affordable range. If your stock costs $100,000 per share, you are seriously cutting in to the number of people who can afford to buy it. I can think of two reasons NOT to do a stock split. The biggest is, Why bother? If your stock is trading at a reasonable price, why change anything? It takes time and effort, which equals money, to do a stock split. If this serves no purpose, you're just wasting that effort. The other reason is that you don't want to drive your stock price down too low. Low prices are normally associated with highly speculative start-up companies, and so can give a wrong impression of your company. Also, low prices make it difficult for the price to reflect small changes. If your stock is trading at $10.00, a 1/2 of 1% change is 5 cents. But if it's trading at $1.50, a 1/2 of 1% change is a fraction of a penny. Does it go up by that penny or not? You've turned a smooth scale into a series of hurdles.",
"title": ""
},
{
"docid": "74a1089bb1d601ec2114c0ed79ffc620",
"text": "I still don't see the point of this software; rebalancing frequently is a waste of money (through fees). If you invest in index funds, you don't have to rebalance at all--effectively, the fund is doing it for you, and since they can generally trade more efficiently than individual investors can, that's a win. The Coverdell ESA is a great example. There's a maximum contribution amount, just as there are for almost any tax-exempt account. A decent financial adviser could help you plan how much to contribute to which accounts, at what time, and when you can/should start to withdraw from them.",
"title": ""
},
{
"docid": "3bbda03f837541c501058d5c2e9831a5",
"text": "Given your needs, GNUcash will do swimmingly. I've used it for the past 3 years and while it's a gradual learning process, it's been able to resolve most stuff I've thrown at it. Schedule bills and deposits in the calendar view so I can keep an eye on cash flow. GNUcash has scheduled payments and receipts and reconcilation, should you need them. I prefer to keep enough float to cover monthly expenses in accounts rather than monitor potential shortfalls. Track all my stock and mutual fund investments across numerous accounts. It pulls stock, mutual and bond quotes from lots of places, domestic and foreign. It can also pull transaction data from your brokers, if they support that. I manually enter all my transactions so I can keep control of them. I just reconcile what I entered into Quicken based on the statements sent to me. I do not use Quicken's bill pay There's a reconciliation mode, but I don't use it personally. The purpose of reconcilation is less about catching bank errors and more about agreeing on the truth so that you don't incur bank fees. When I was doing this by hand I found I had a terrible data entry error rate, but on the other hand, the bayesian importer likes to mark gasoline purchases from the local grocery store as groceries rather than gas. I categorize all my expenditures for help come tax time. GNUcash has accounts, and you can mark expense accounts as tax related. It also generates certain tax forms for you if you need that. Not sure what all you're categorizing that's helpful at tax time though. I use numerous reports including. Net Worth tracking, Cash not is retirement funds and total retirement savings. Tons of reports, and the newest version supports SQL backends if you prefer that vs their reports.",
"title": ""
},
{
"docid": "d0635c74f875d15a57b2671500a2f318",
"text": "Most corporations have a limit on the number of shares that they can issue, which is written into their corporate charter. They usually sell a number that is fewer than the maximum authorized number so that they have a reserve for secondary offerings, employee incentives, etc. In a scrip dividend, the company is distributing authorized shares that were not previously issued. This reduces the number of shares that it has to sell in the future to raise capital, so it reduces the assets of the company. In a split, every share (including the authorized shares that haven't been distributed) are divided. This results in more total shares (which then trade at a price that's roughly proportional to the split), but it does not reduce the assets of the company.",
"title": ""
},
{
"docid": "6f35493317b0fa9767a0827ede4a4505",
"text": "I appreciate it. I didn't operate under selling the asset year five but other than that I followed this example. I appreciate the help. These assignments are just poorly laid out. Financial management also plays on different calculation interactions so it is difficult for me to easily identify the intent at times. Thanks again.",
"title": ""
},
{
"docid": "6c73d4e4bfea0767338957eb4d31e95b",
"text": "In theory*, if a company has 1m shares at $10 and does a 10 for 1 split, then the day after it has 10m shares at $1 (assuming no market move). So both the price and the number of share change, keeping the total value of the company unchanged. Regarding your BIS, I suspect that the new number of shares has not been reported yet because it's an ETF (the number of shares in issue changes everyday due to in/out flows). Your TWX example is not ideal either because there was a spin off on the same day as the stock split so you need to separate the two effects. * Some studies have documented a positive stock split effect - one of the suggested reasons is that the stock becomes more liquid after the split. But other studies have rejected that conclusion, so you can probably safely consider that on average it will not have a material effect.",
"title": ""
},
{
"docid": "bbe8039b3fc01785c7082c1a3f785444",
"text": "In older days the merchants and their merchant banks[or service providers] would take funds in their currency. Say in this case USD. When the charge hits the issuer bank, the merchant and merchant bank gets there USD and were happy. The user would get charged in local currency Shekel in this case. The rate applied by his bank [and card provider, Visa/Master also take a cut] is the standard shelf rate to individuals. When business growing and banking becoming more sophisticated, lots of Merchant Banks and Merchants have created a new business, if you offer Shekel to all users then you have lots of Shekel that you can convert into USD. So in this model, the Merchant makes some more profit from Fx spread, the Merchant Bank makes good money in Fx. Your Bank [and card network] loose out. You stand to gain because you potentially get a better rate. All this theory is good. But the rates are moving and its quite difficult to find out if the rates offered directly by EI AI would be better than those offered by your bank. I have no experience in this example, but I have tried this with large shops, buy 2 items one charge in GBP and other in local currency around 2-3 times spread over a year. The difference in rate was close to identical, at times better or worse in range of .02%",
"title": ""
},
{
"docid": "1d63cd0299ab297fd07d4a648063b2e1",
"text": "\"If it could, it seems yet to be proven. Long Term Capital Management was founded by a bunch of math whizzes and they seem to have missed something. I'd never suggest that something has no value, but similar to the concept that \"\"if time travel were possible, why hasn't anyone come back from the future to tell us\"\" I'd suggest that if there were a real advantage to what you suggest, someone would be making money from it already. In my opinion, the math is simple, little more than a four function calculator is needed.\"",
"title": ""
}
] |
fiqa
|
f64b8af6aba9a560172e2c309d3ada7f
|
Comprehensive tutorial on double-entry personal finance?
|
[
{
"docid": "e52aff18a6f46e89b86f19eb3757f850",
"text": "I had to implement a simplistic double-entry accounting system, and compiled a list of resources. Some of them are more helpful than others, but I'll share them all with you. Hope this helps! Simplifying accounting principles for computer scientists: http://martin.kleppmann.com/2011/03/07/accounting-for-computer-scientists.html See this excellent article on how Debits and Credits work: http://accountinginfo.com/study/je/je-01.htm See this article for an example Chart of Accounts with lots of helpful descriptions: http://www.netmba.com/accounting/fin/accounts/chart/ Excellent PDF by Martin Fowler on Accounting Patterns using an event-drive system: http://www.martinfowler.com/apsupp/accounting.pdf Additional useful resources by Martin Fowler: http://martinfowler.com/articles.html#ap Ideas on using Domain-Driven-Design (DDD): https://stackoverflow.com/questions/5482929/how-to-use-object-oriented-programming-with-hibernate Double Entry Accounting in Relational Databases: http://homepages.tcp.co.uk/~m-wigley/gc_wp_ded.html Double Entry Accounting in Rails: http://www.cuppadev.co.uk/dev/double-entry-accounting-in-rails/ Joda-Money: http://joda-money.sourceforge.net/ Joda-Money Notes: http://joda-money.svn.sourceforge.net/viewvc/joda-money/JodaMoney/trunk/Notes.txt?revision=75&view=markup Blog entry with good comments: http://www.jroller.com/scolebourne/entry/joda_money Related Blog Entry: http://www.jroller.com/scolebourne/entry/serialization_shared_delegates JMoney: http://jmoney.sourceforge.net/wiki/index.php/Main_Page JMoney QIF Plugin: http://jmoney.sourceforge.net/wiki/index.php/Qif_plug-in Ledger on GitHub: https://github.com/jwiegley/ledger/tree/master/src/ Implementing Money class in Java: http://www.objectivelogic.com/resources/Java%20and%20Monetary%20Data/Java%20and%20Monetary%20Data.pdf Martin Fowler's implementation in Patterns of Enterprise Application Architecture page 489, View partial content in Google Books: http://books.google.com/books?id=FyWZt5DdvFkC&printsec=frontcover&dq=Patterns+of+Enterprise+Application+Architecture&source=bl&ots=eEFp4xYydA&sig=96x5ER64m5ryiLnWOgGMKgAsDnw&hl=en&ei=Kr_wTP6UFJCynweEpajyCg&sa=X&oi=book_result&ct=result&resnum=7&ved=0CEQQ6AEwBg#v=onepage&q&f=false XML based API for an accounting service, might get some ideas from it: http://www.objacct.com/Platform.aspx",
"title": ""
},
{
"docid": "e714ca3f65ef959e2f5a651731a8f4bf",
"text": "The GnuCash tutorial has some basics on double entry accounting: http://www.gnucash.org/docs/v1.8/C/gnucash-guide/basics_accounting1.html#basics_accountingdouble2",
"title": ""
},
{
"docid": "742a76e96743cccda75cd5ef46bd8722",
"text": "I found this book to be pretty decent: It is a workbook, and full of little exercises.",
"title": ""
}
] |
[
{
"docid": "463fa73a0da279bb43beb2b3d9493116",
"text": "\"So you are off to a really good start. Congratulations on being debt free and having a nice income. Being an IT contractor can be financially rewarding, but also have some risks to it much like investing. With your disposable income I would not shy away from investing in further training through sites like PluralSite or CodeSchool to improve weak skills. They are not terribly expensive for a person in your situation. If you were loaded down with debt and payments, the story would be different. Having an emergency fund will help you be a good IT contractor as it adds stability to your life. I would keep £10K or so in a boring savings account. Think of it not as an investment, but as insurance against life's woes. Having such a fund allows you to go after a high paying job you might fail at, or invest with impunity. I would encourage you to take an intermediary step: Moving out on your own. I would encourage renting before buying even if it is just a room in someone else's home. I would try to be out of the house in less than 3 months. Being on your own helps you mature in ways that can only be accomplished by being on your own. It will also reduce the culture shock of buying your own home or entering into an adult relationship. I would put a minimum of £300/month in growth stock mutual funds. Keeping this around 15% of your income is a good metric. If available you may want to put this in tax favored retirement accounts. (Sorry but I am woefully ignorant of UK retirement savings). This becomes your retire at 60 fund. (Starting now, you can retire well before 68.) For now stick to an index fund, and once it gets to 25K, you may want to look to diversify. For the rest of your disposable income I'd invest in something safe and secure. The amount of your disposable income will change, presumably, as you will have additional expenses for rent and food. This will become your buy a house fund. This is something that should be safe and secure. Something like a bond fund, money market, dividend producing stocks, or preferred stocks. I am currently doing something like this and have 50% in a savings account, 25% in a \"\"Blue chip index fund\"\", and 25% in a preferred stock fund. This way you have some decent stability of principle while also having some ability to grow. Once you have that built up to about 12K and you feel comfortable you can start shopping for a house. You may want to be at the high end of your area, so you should try and save at least 10%; or, you may want to be really weird and save the whole thing and buy your house for cash. If you are still single you may want to rent a room or two so your home can generate income. Here in the US there can be other ways to generate income from your property. One example is a home that has a separate area (and room) to park a boat. A boat owner will pay some decent money to have a place to park their boat and there is very little impact to the owner. Be creative and perhaps find a way where a potential property could also produce income. Good luck, check back in with progress and further questions! Edit: After some reading, ISA seem like a really good deal.\"",
"title": ""
},
{
"docid": "0a7f714f0a3b50be1430a11363a34698",
"text": "Aswath Damodaran's [Investment Valuation 3rd edition](http://www.amazon.com/Investment-Valuation-Techniques-Determining-University/dp/1118130731/ref=sr_1_12?ie=UTF8&qid=1339995852&sr=8-12&keywords=aswath+damodaran) (or save money and go with a used copy of the [2nd edition](http://www.amazon.com/gp/offer-listing/0471414905/ref=dp_olp_used?ie=UTF8&condition=used)) He's a professor at Stern School of Business. His [website](http://pages.stern.nyu.edu/~adamodar/) and [blog](http://aswathdamodaran.blogspot.com/) are good resources as well. [Here is his support page](http://pages.stern.nyu.edu/~adamodar/New_Home_Page/Inv3ed.htm) for his Investment Valuation text. It includes chapter summaries, slides, ect. If you're interested in buying the text you can get an idea of what's in it by checking that site out.",
"title": ""
},
{
"docid": "46bc1213fb52a6c9ecdc1047f6d59daa",
"text": "For double entry bookkeeping, personal or small business, GnuCash is very good. Exists for Mac Os.",
"title": ""
},
{
"docid": "045b03d3530b3e3f6265ebefedc303b3",
"text": "\"Remember where they said \"\"Life, liberty and the pursuit of happiness? That is the essence of this problem. You have freedom including freedom to mess up. On the practical side, it's a matter of structuring your money so it's not available to you for impulse buying, and make it automatic. Have you fully funded your key necessities? You should have an 8-month emergency fund in reserve, in a different savings account. Are you fully maxing out your 401K, 403B, Roth IRA and the like? This single act is so powerful that you're crazy not to - every $1 you save will multiply to $10-100 in retirement. I know a guy who tours the country in an RV with pop-outs and tows a Jeep. He was career Air Force, so clearly not a millionaire; he saved. Money seems so trite to the young, but Seriously. THIS. Have auto-deposits into savings or an investment account. Carry a credit card you are reluctant to use for impulse buys. Make your weekly ATM withdrawal for a fixed amount of cash, and spend only that. When your $100 has to make it through Friday, you think twice about that impulse buy. What about online purchases? Those are a nightmare to manage. If you spend $40 online, reduce your ATM cash withdrawal by $40 the next week, is the best I can think of. Keep in mind, many of these systems are designed to be hard to resist. That's what 1-click ordering is about; they want you to not think about the bill. That's what the \"\"discount codes\"\" are about; those are a fake artifice. Actually they have marked up the regular price so they are only \"\"discounting\"\" to the fair price. You gotta see the scam, unsubscribe and/or tune out. They are preying on you. Get angry about that! Very good people to follow regularly are Suze Orman or Dave Ramsey, depending on your tastes. As for the ontological... freedom is a hard problem. Once food and shelter needs are met, then what? How does a free person deny his own freedom to structure his activities for a loftier goal? Sadly, most people pitching solutions are scammers - churches, gurus, etc. - after your money or your mind. So anyone who is making an effort to get seen by you and promise to help you is probably not a good guy. Though, Napoleon Hill managed to pry some remarkable knowledge from Andrew Carnegie in his book \"\"Think and Grow Rich\"\". Tony Robbins is brilliant, but he lets his staff sell expensive seminars and kit, which make him look like just another shyster. Don't buy that stuff, you don't need it and he doesn't need you to buy it.\"",
"title": ""
},
{
"docid": "18fdf9e3dfc67a60abdd1702ae7f00b6",
"text": "Start at Investopedia. Get basic clarification on all financial terms and in some cases in detail. But get a book. One recommendation would be Hull. It is a basic book, but quite informative. Likewise you can get loads of material targeted at programmers. Wilmott's Forum is a fine place to find coders as well as finance guys.",
"title": ""
},
{
"docid": "a816d89279fc582023e15c450eb92628",
"text": "\"There's plenty of advice out there about how to set up a budget or track your expenses or \"\"pay yourself first\"\". This is all great advice but sometimes the hardest part is just getting in the right frugal mindset. Here's a couple tricks on how I did it. Put yourself through a \"\"budget fire drill\"\" If you've never set a budget for yourself, you don't necessarily need to do that here... just live as though you had lost your job and savings through some imaginary catastrophe and live on the bare minimum for at least a month. Treat every dollar as though you only had a few left. Clip coupons, stop dining out, eat rice and beans, bike or car pool to work... whatever means possible to cut costs. If you're really into it, you can cancel your cable/Netflix/wine of the month bills and see how much you really miss them. This exercise will get you used to resisting impulse buys and train you to live through an actual financial disaster. There's also a bit of a game element here in that you can shoot for a \"\"high score\"\"... the difference between the monthly expenditures for your fire drill and the previous month. Understand the power of compound interest. Sit down with Excel and run some numbers for how your net worth will change long term if you saved more and paid down debt sooner. It will give you some realistic sense of the power of compound interest in terms that relate to your specific situation. Start simple... pick your top 10 recent non-essential purchases and calculate how much that would be worth if you had invested that money in the stock market earning 8% over the next thirty years. Then visualize your present self sneaking up to your future self and stealing that much money right out of your own wallet. When I did that, it really resonated with me and made me think about how every dollar I spent on something non-essential was a kick to the crotch of poor old future me.\"",
"title": ""
},
{
"docid": "f43694d6b791a3c2cd5acf2302cdeffa",
"text": "Investopedia does have tutorials about investments in different asset classes. Have you read them ? If you had heard of CFA, you can read their material if you can get hold of it or register for CFA. Their material is quite extensive and primarily designed for newbies. This is one helluva book and advice coming from persons who have showed and proved their tricks. And the good part is loads of advice in one single volume. And what they would suggest is probably opposite of what you would be doing in a hedge fund. And you can always trust google to fish out resources at the click of a button.",
"title": ""
},
{
"docid": "9e6f5a82008f9330d2061b78d7cbadd5",
"text": "I spent a while looking for something similar a few weeks back and ended up getting frustrated and asking to borrow a friend's Bloombterg. I wish you the best of luck finding something, but I wasn't able to. S&P and Morningstar have some stuff on their site, but I wasn't able to make use of it. Edit: Also, Bloomberg allows shared terminals. Depending on how much you think as a firm, these questions might come up, it might be worth the 20k / year",
"title": ""
},
{
"docid": "7375b487322935638688af71c2a9a918",
"text": "\"The statement \"\"Finance is something all adults need to deal with but almost nobody learns in school.\"\" hurts me. However I have to disagree, as a finance student, I feel like everyone around me is sound in finance and competition in the finance market is so stiff that I have a hard time even finding a paid internship right now. I think its all about perspective from your circumstances, but back to the question. Personally, I feel that there is no one-size-fits-all financial planning rules. It is very subjective and is absolutely up to an individual regarding his financial goals. The number 1 rule I have of my own is - Do not ever spend what I do not have. Your reflected point is \"\"Always pay off your credit card at the end of each month.\"\", to which I ask, why not spend out of your savings? plan your grocery monies, necessary monthly expenditures, before spending on your \"\"wants\"\" should you have any leftovers. That way, you would not even have to pay credit every month because you don't owe any. Secondly, when you can get the above in check, then you start thinking about saving for the rainy days (i.e. Emergency fund). This is absolutely according to each individual's circumstance and could be regarded as say - 6 months * monthly income. Start saving a portion of your monthly income until you have set up a strong emergency fund you think you will require. After you have done than, and only after, should you start thinking about investments. Personally, health > wealth any time you ask. I always advise my friends/family to secure a minimum health insurance before venturing into investments for returns. You can choose not to and start investing straight away, but should any adverse health conditions hit you, all your returns would be wiped out into paying for treatments unless you are earning disgusting amounts in investment returns. This risk increases when you are handling the bills of your family. When you stick your money into an index ETF, the most powerful tool as a retail investor would be dollar-cost-averaging and I strongly recommend you read up on it. Also, because I am not from the western part of the world, I do not have the cultural mindset that I have to move out and get into a world of debt to live on my own when I reached 18. I have to say I could not be more glad that the culture does not exist in Asian countries. I find that there is absolutely nothing wrong with living with your parents and I still am at age 24. The pressure that culture puts on teenagers is uncalled for and there are no obvious benefits to it, only unmanageable mortgage/rent payments arise from it with the entry level pay that a normal 18 year old could get.\"",
"title": ""
},
{
"docid": "d3da0cd1c67d1c4cc43b2d6c2096f217",
"text": "Not sure why you're posting in r/finance; did you meant to post in /r/PersonalFinances ? Or /r/financialindependence ? Anyway, I'll play. There are 3 ways you can go about it, make it 4: 1. Commercial: find yourself a job/career that you'd do it for free. I once met a guy who was in your similar situation and he had a hot dog stand in the hearth of the financial district of a large US city; he did it for the fun and to be social. He'd be there only when the Stock Market was open and if the weather was good. You could also develop a more challenging career for the satisfaction of it: writer, artists, craftsman.... You could go back to school, or take an online class, or do an online degree for the pure satisfaction of it all 2. Start a company. Similar to #1 above, but this this 100% entrepreneurial. It could be just yourself, or enlist the help of the wife; full time or part time. This again, follow your passion; since you're set financially it should not that difficult to break even. With time you could grow and hire people, but that increase the complexity and you might find yourself managing the business and not actually getting the satisfaction of doing what you had set to do. 3. Volunteer: find a non profit whose mission aligns with your values, and volunteer there; 1 or a couple of organizations; if you're up to it with time you could climb up the ranks ... 4. Mentoring: there are a lot of people who dream about being in your situation. I am sure it was not luck but hard work as well. You could become a blogger, write a book (in your name or anonymously); or mentor directly someone, reddit and a web site is a good marketing start. If you have enough money (accredited investor) you could become an angel investor, or join an angel consortium to help people with your background to make something out of themselves. 5. A combination of 2 or more from the above.",
"title": ""
},
{
"docid": "a363af68e58e52989a953606175bb805",
"text": "\"I think this question is perfectly on topic, and probably has been asked and answered many times. However, I cannot help myself. Here are some basics however: Personal Finance is not only about math. As a guy who \"\"took vector calculus just for fun\"\", I have learned that superior math skills do not translate into superior net worth. Personal finance is about 50% behavior. Take a look at the housing crisis, car loans, or payday lenders and you will understand that the desire to be accepted by others often trumps the math surrounding a transaction. Outline your goals What is it that you want in life? A pile of money or to retire early? What does your business look like? How much cash will you need? Do you want to own a ton of rental properties? How does all this happen (set intermediate goals). Then get on a budget A budget is a plan to spend your money in advance. Stick to it. From there you can see how much money you have to implement various goals. Are your goals to aggressive? This is really important as people have a tendency to spend more money then they have. Often times when people receive a bonus at work, they spend that one bonus on two or three times over. A budget will prevent this from happening. Get an Emergency Fund Without an emergency fund, you be subject to the financial whims of people involved in your own life and that of the broader marketplace. Once you have one, you are free to invest with impunity and have less stress in a world that deals out plenty. Bad things will happen to you financially, protect against them. The best first investments are simple: Invest in yourself. Find a way to make a very healthy income with upward mobility. Also get out and stay out of debt. These things are not sexy, but they pay off in the long run. The next best investment is also simple: Index funds. These become the bench mark for all other investments. If you do not stand a good chance of beating the S&P 500 index fund, why bother? Just dump the money in the fund and sleep well at night.\"",
"title": ""
},
{
"docid": "86d74c5991c11c86aa22cd43a0a6a4f4",
"text": "\"Asset = Equity + (Income - Expense) + Liability Everything could be cancelled out in double entry accounting. By your logic, if the owner contributes capital as asset, Equity is \"\"very similar\"\" to Asset. You will end up cancelling everything, i.e. 0 = 0. You do not understate liability by cancelling them with asset. Say you have $10000 debtors and $10000 creditors. You do not say Net Debtors = $0 on the balance sheet. You are challenging the fundamental concepts of accounting. Certain accounts are contra accounts. For example, Accumulated Depreciation is Contra-Asset. Retained Loss and Unrealized Revaluation Loss is Contra-Equity.\"",
"title": ""
},
{
"docid": "cf879d817b1a282b62a24a5bf1dc6ed0",
"text": "\"I'm another programmer, I guess we all just like complicated things, or got here via stackoverflow. Obligatory tedious but accurate point: Investing is not personal finance, in fact it's maybe one of the less important parts of it. See this answer: Where to start with personal finance? Obligatory warning for software developer type minds: getting into investing because it's complicated and therefore fun is a really awful idea from a financial perspective. Or see behavioral finance research on how analytical/professional/creative type people are often terrible at investing, while even-tempered practical people are better. The thing with investing is that inaction is better than action, tried and true is better than creative, and simple is better than complicated. So if you're like me and many programmers and like creative, complicated action - not good for the wallet. You've been warned. That said. :-) Stuff I read In general I hate reading too much financial information because I think it makes me take ill-advised actions. The actions I most need to take have to do with my career and my spending patterns. So I try to focus on reading about software development, for example. Or I answer questions on this site, which at least might help someone out, and I enjoy writing. For basic financial news and research, I prefer Morningstar.com, especially if you get the premium version. The writing has more depth, it's often from qualified financial analysts, and with the paid version you get data and analysis on thousands of funds and stocks, instead of a small number as with Motley Fool newsletters. I don't follow Morningstar regularly anymore, instead I use it for research when I need to pick funds in a 401k or whatever. Another caveat on Morningstar is that the \"\"star ratings\"\" on funds are dumb. Look at the Analyst Picks and the analyst writeups instead. I just flipped through my RSS reader and I have 20-30 finance-related blogs in there collecting unread posts. It looks like the only one I regularly read is http://alephblog.com/ which is sort of random. But I find David Merkel very thoughtful and interesting. He's also a conservative without being a partisan hack, and posts frequently. I read the weekly market comment at http://hussmanfunds.com/ as well. Most weeks it says the market is overvalued, so that's predictable, but the interesting part is the rationale and the other ideas he talks about. I read a lot of software-related blogs and there's some bleed into finance, especially from the VC world; blogs like http://www.avc.com/ or http://bhorowitz.com/ or whatever. Anyway I spend most of my reading time on career-related stuff and I think this is also the correct decision from a financial perspective. If you were a doctor, you'd be better off reading about doctoring, too. I read finance-related books fairly often, I guess there are other threads listing ideas on that front. I prefer books about principles rather than a barrage of daily financial news and questionable ideas. Other than that, I keep up with headlines, just reading the paper every day including business-related topics is good enough. If there's some big event in the financial markets, it'll show up in the regular paper. Take a class I initially learned about finance by reading a pile of books and alongside that taking the CFP course and the first CFA course. Both are probably equivalent to about a college semester worth of work, but you can plow through them in a couple months each if you focus. You can just do the class (and take the exam if you like), without having to go on and actually get the work experience and the certifications. I didn't go on to do that. This sounds like a crazy thing to do, and it kind of is, but I think it's also sort of crazy to expect to be competent on a topic without taking some courses or otherwise getting pretty deep into the material. If you're a normal person and don't have time to take finance courses, you're likely better off either keeping it super-simple, or else outsourcing if you can find the right advisor: What exactly can a financial advisor do for me, and is it worth the money? When it's inevitably complex (e.g. as you approach retirement) then an advisor is best. My mom is retiring soon and I found her a professional, for example. I like having a lot of knowledge myself, because it's just the only way I could feel comfortable. So for sure I understand other people wanting to have it too. But what I'd share from the other side is that once you have it, the conclusion is that you don't have enough knowledge (or time) to do anything fancy anyway, and that the simple answers are fine. Check out http://www.amazon.com/Smart-Simple-Financial-Strategies-People/dp/0743269942 Investing for fun isn't investing for profit Many people recommend Motley Fool (I see two on this question already!). The site isn't evil, but the problem (in my opinion) is that it promotes an attitude toward and a style of investing that isn't objectively justifiable for practical reasons. Essentially I don't think optimizing for making money and optimizing for having fun coexist very well. If investing is your chosen hobby rather than fishing or knitting, then Motley Fool can be fun with their tone and discussion forums, but other people in forums are just going to make you go wrong money-wise; see behavioral finance research again. Talking to others isn't compatible with ice in your decision-making veins. Also, Motley Fool tends to pervasively make it sound like active investing is easier than it is. There's a reason the Chartered Financial Analyst curriculum is a few reams of paper plus 4 years of work experience, rather than reading blogs. Practical investing (\"\"just buy the target date fund\"\") can be super easy, but once you go beyond that, it's not. I don't really agree with the \"\"anyone can do it and it's not work!\"\" premise, any more than I think that about lawyering or doctoring or computer programming. After 15 years I'm a programming expert; after some courses and a lot of reading, I'm not someone who could professionally run an actively-managed portfolio. I think most of us need to have the fun part separate from the serious cash part. Maybe literally distinct accounts that you keep at separate brokerages. Or just do something else for fun, besides investing. Morningstar has this problem too, and finance.yahoo.com, and Bloomberg, I mean, they are all interested in making you think about investing a lot more than you ought to. They all have an incentive to convince you that the latest headlines make a difference, when they don't. Bottom line, I don't think personal finance changes very quickly; the details of specific mutual funds change, and there's always some new twist in the tax code, but the big picture is pretty stable. I think going in-depth (say, read the Chartered Financial Analyst curriculum materials) would teach you a lot more than reading blogs frequently. The most important things to work on are income (career) and spending (to maximize income minus spending). That's where time investment will pay off. I know it's annoying to argue the premise of the question rather than answering, but I did try to mention a couple things to read somewhere in there ;-)\"",
"title": ""
},
{
"docid": "bd0c4d866faf69c94a07dac1b192fd45",
"text": "Anyone able to recommend a good resource on computing discounted cash flows? I'm looking for something that will walk me through calculating DCFs working from the balance sheet, income statement, etc. Textbook or online resources both work!",
"title": ""
},
{
"docid": "bc07ec18c9fb03eee7559c16f4f7175e",
"text": "Strictly speaking the terms arise from double entry book keeping terminology, and don't exactly relate to their common English usage, which is part of the confusion. All double entry book keeping operations consist of a (debit, credit) tuple performed on two different books (ledgers). The actual arithmetic operation performed by a debit or a credit depends on the book keeping classification of the ledger it is performed on. Liability accounts behave the way you would expect - a debit is subtraction, and a credit is addition. Asset accounts are the other way around, a debit is an addition, and a credit is a subtraction. The confusion when dealing with banks, partly comes from this classification, since while your deposit account is your asset, it is the bank's liability. So when you deposit 100 cash at the bank, it will perform the operation (debit cash account (an asset), credit deposit account). Each ledger account will have 100 added to it. Similarly when you withdraw cash, the operation is (credit cash, debit deposit). However the operation that your accountant will perform on your own books, is the opposite, since the cash was your asset, and now the deposit account is. For those studying math, it may also help to know that double entry book keeping is one of the earliest known examples of a single error detection/correction algorithm.",
"title": ""
}
] |
fiqa
|
28869cf469dccf7b45ed93b8f1cc8b30
|
How to finance my trading strategy in foreign exchange trading?
|
[
{
"docid": "84b5b8c8ef42cad5494a1aef39fc1fab",
"text": "\"how can I get started knowing that my strategy opportunities are limited and that my capital is low, but the success rate is relatively high? A margin account can help you \"\"leverage\"\" a small amount of capital to make decent profits. Beware, it can also wipe out your capital very quickly. Forex trading is already high-risk. Leveraged Forex trading can be downright speculative. I'm curious how you arrived at the 96% success ratio. As Jason R has pointed out, 1-2 trades a year for 7 years would only give you 7-14 trades. In order to get a success rate of 96% you would have had to successful exploit this \"\"irregularity\"\" at 24 out of 25 times. I recommend you proceed cautiously. Make the transition from a paper trader to a profit-seeking trader slowly. Use a low leverage ratio until you can make several more successful trades and then slowly increase your leverage as you gain confidence. Again, be very careful with leverage: it can either greatly increase or decrease the relatively small amount of capital you have.\"",
"title": ""
}
] |
[
{
"docid": "3df65e68c8633ccfc01a4496253623f3",
"text": "How can I calculate my currency risk exposure? You own securities that are priced in dollars, so your currency risk is the amount (all else being equal) that your portfolio drops if the dollar depreciates relative to the Euro between now and the time that you plan to cash out your investments. Not all stocks, though, have a high correlation relative to the dollar. Many US companies (e.g. Apple) do a lot of business in foreign countries and do not necessarily move in line with the Dollar. Calculate the correlation (using Excel or other statistical programs) between the returns of your portfolio and the change in FX rate between the Dollar and Euro to see how well your portfolio correlated with that FX rate. That would tell you how much risk you need to mitigate. how can I hedge against it? There are various Currency ETFs that will track the USD/EUR exchange rate, so one option could be to buy some of those to offset your currency risk calculated above. Note that ETFs do have fees associated with them, although they should be fairly small (one I looked at had a 0.4% fee, which isn't terrible but isn't nothing). Also note that there are ETFs that employ currency risk mitigation internally - including one on the Nasdaq 100 . Note that this is NOT a recommendation for this ETF - just letting you know about alternative products that MIGHT meet your needs.",
"title": ""
},
{
"docid": "febf4114d614ef8371b4a237f32ce7e9",
"text": "\"I'm smart enough to know that the answer to your questions is 'no'. There is no arbitrage scenario where you can trade currencies and be guaranteed a return. If there were, the thousands of PhD's and quants at hedge funds like DEShaw and Bridgewater would have already figured it out. You're basically trying to come up with a scenario that is risk free yet yields you better than market interest rates. Impossible. I'm not smart enough to know why, but my guess is that your statement \"\"I only need $2k margin\"\" is incorrect. You only need $2k as capital, but you are 'borrowing' on margin the other 98k and you'll need to pay interest on that borrowed amount, every day. You also run the risk of your investment turning sour and the trading firm requiring a higher margin.\"",
"title": ""
},
{
"docid": "27acb3a29321704c83bb98fb0365ae59",
"text": "It ought to be possible to buy a foreign exchange future (aka forex future / FX future). Businesses use these futures to make sure their exchange rate is predictable: if they put a bunch of money into manufacturing things that'll be ready a year later, it helps to know that the currency exchange rate shifts won't wipe out all their profits. If you're willing to take on some of that risk, and if things go your way, you can make money. They are essentially contracts between two private parties to pay each other a certain amount of money based on the movement of the currencies, so the Chinese government doesn't actually need to be involved and no renminbi need to change hands, you can just trade the contracts. Note that the exchange rate is currently fixed by the Chinese government, so you're going to be subject to enhanced levels of political risk, and they may not be as widely available or readily tradable as other foreign exchange futures, so check with a broker before opening your account. I couldn't find them on my personal Etrade account, but a quick Google search reveals CME Group offering some. There are probably others. Foreign exchange futures are an advanced investing tool and carry risk. Be sure you understand the risk, in particular how much money you can end up on the hook for if things don't go your way. Also remember, futures expire: you're not just betting on the rate changing, but you're betting on it changing within a certain amount of time.",
"title": ""
},
{
"docid": "83d9ae6ad60870a09c431cbe4c9498a1",
"text": "\"I suggest that you're really asking questions surrounding three topics: (1) what allocation hedges your risks but also allows for upside? (2) How do you time your purchases so you're not getting hammered by exchange rates? (3) How do you know if you're doing ok? Allocations Your questions concerning allocation are really \"\"what if\"\" questions, as DoubleVu points out. Only you can really answer those. I would suggest building an excel sheet and thinking through the scenarios of at least 3 what-ifs. A) What if you keep your current allocations and anything in local currency gets cut in half in value? Could you live with that? B) What if you allocate more to \"\"stable economies\"\" and your economy recovers... so stable items grow at 5% per year, but your local investments grow 50% for the next 3 years? Could you live with that missed opportunity? C) What if you allocate more to \"\"stable economies\"\" and they grow at 5%... while SA continues a gradual slide? Remember that slow or flat growth in a stable currency is the same as higher returns in a declining currency. I would trust your own insights as a local, but I would recommend thinking more about how this plays out for your current investments. Timing You bring up concerns about \"\"timing\"\" of buying expensive foreign currencies... you can't time the market. If you knew how to do this with forex trading, you wouldn't be here :). Read up on dollar cost averaging. For most people, and most companies with international exposure, it may not beat the market in the short term, but it nets out positive in the long term. Rebalancing For you there will be two questions to ask regularly: is the allocation still correct as political and international issues play out? Have any returns or losses thrown your planned allocation out of alignment? Put your investment goals in writing, and revisit it at least once a year to evaluate whether any adjustments would be wise to make. And of course, I am not a registered financial professional, especially not in SA, so I obviously recommend taking what I say with a large dose of salt.\"",
"title": ""
},
{
"docid": "18e0d4fcfddabe3813084cf1370d791f",
"text": "\"Without knowing what you are trying to achieve - make a bit of pocket money, become financially independent, invest for retirement, learn trading to become a trader - I'll give you a few thoughts ... The difficulty you will have trading with $400-600 is that brokerage will be a high proportion of your \"\"profits\"\". I'm not sure of the US (assuming US rather than AU, NZ, etc) rates for online brokers, but UK online brokers are the order of £6-10 / trade. Having a quick read suggests that the trading is similar $6-10/trade. With doing day trades you will be killed by the brokerage. I'm not sure what percent of profitable trades you have, but if it is 50% (e.g.), you will need to make twice the brokerage fees value on each profitable trade before you are actually making a profit. There can be an emotional effect that trips you up. You will find that trading with your own real money is very different to trading with fake money. Read up about it, this brief blog shows some personal thoughts from someone I read from time to time. With a $10 brokerage, I would suggest the following Another option, which I wouldn't recommend is to leverage your money, by trading CDFs or other derivatives that allow you to trade on a margin. Further to that, learn about trading/investing Plus other investment types I have written about earlier.\"",
"title": ""
},
{
"docid": "15c5d78ccb8d6d61e0703f8875d028f5",
"text": "\"Yes, of course there have been studies on this. This is no more than a question about whether the options are properly priced. (If properly priced, then your strategy will not make money on average before transaction costs and will lose once transaction costs are included. If you could make money using your strategy, on average, then the market should - and generally will - make an adjustment in the option price to compensate.) The most famous studies on this were conducted by Black and Scholes and then by Merton. This work won the Nobel Prize in 1995. Although the Black-Scholes (or Black-Scholes-Merton) equation is so well known now that people may forget it, they didn't just sit down one day and write and equation that they thought was cool. They actually derived the equation based on market factors. Beyond this \"\"pioneering\"\" work, you've got at least two branches of study. Academics have continued to study option pricing, including but not limited to revisions to the original Black-Scholes model, and hedge funds / large trading house have \"\"quants\"\" looking at this stuff all of the time. The former, you could look up if you want. The latter will never see the light of day because it's proprietary. If you want specific references, I think that any textbook for a quantitative finance class would be a fine place to start. I wouldn't be surprised if you actually find your strategy as part of a homework problem. This is not to say, by the way, that I don't think you can make money with this type of trade, but your strategy will need to include more information than you've outlined here. Choosing which information and getting your hands on it in a timely manner will be the key.\"",
"title": ""
},
{
"docid": "21053ffb4e4417f8b9aa2e3a8d20fed8",
"text": "\"Google \"\"forex broker\"\" and find one of the thousands that allows you to trade on Gold futures. Then use one of them to short Gold... just watch your leverage. I would certainly wait before you're shorting gold. Why tie up capital in a bubble that you think will burst in the next few years. Wait for the price to increase and monitor for actual signs of the bubble bursting. Right now with the Euro possibly collapsing shorting gold probably isn't your best bet.\"",
"title": ""
},
{
"docid": "ed60840adabb35f50fbe3ecac6904235",
"text": "\"What you're looking for are either FX Forwards or FX Futures. These products are traded differently but they are basically the same thing -- agreements to deliver currency at a defined exchange rate at a future time. Almost every large venue or bank will transact forwards, when the counterparty (you or your broker) has sufficient trust and credit for the settlement risk, but the typical duration is less than a year though some will do a single-digit multi-year forward on a custom basis. Then again, all forwards are considered custom contracts. You'll also need to know that forwards are done on currency pairs, so you'll need to pick the currency to pair your NOK against. Most likely you'll want EUR/NOK simply for the larger liquidity of that pair over other possible pairs. A quote on a forward will usually just be known by the standard currency pair ticker with a settlement date different from spot. E.g. \"\"EUR/NOK 12M\"\" for the 12 month settlement. Futures, on the other hand, are exchange traded and more standardized. The vast majority through the CME (Chicago Mercantile Exchange). Your broker will need access to one of these exchanges and you simply need to \"\"qualify\"\" for futures trading (process depends on your broker). Futures generally have highest liquidity for the next \"\"IMM\"\" expiration (quarterly expiration on well known standard dates), but I believe they're defined for more years out than forwards. At one FX desk I've knowledge of, they had 6 years worth of quarterly expirations in their system at any one time. Futures are generally known by a ticker composed of a \"\"globex\"\" or \"\"cme\"\" code for the currency concatenated with another code representing the expiration. For example, \"\"NOKH6\"\" is 'NOK' for Norwegian Krone, 'H' for March, and '6' for the nearest future date's year that ends in '6' (i.e. 2016). Note that you'll be legally liable to deliver the contracted size of Krone if you hold through expiration! So the common trade is to hold the future, and net out just before expiration when the price more accurately reflects the current spot market.\"",
"title": ""
},
{
"docid": "5df958f055f89850c898e58a57842222",
"text": "\"When you say \"\"major\"\", I take it you're an undergrad? If so, how many years left do you have in your program? I ask because it might be worthwhile to major in math in lieu of - or in addition to - finance. It's unlikely that an undergraduate major in a business school will give you the technical skill-set necessary to do what you want. Also, if you want to do prop trading, learn as much statistics/econometrics as you can handle. As for masters programs, I'm not really sure. MFE programs seem more aimed towards people working on the sell-side, e.g. as derivatives quants. EDIT: I accidentally some grammar.\"",
"title": ""
},
{
"docid": "924c06ef4114ce9a9f421443152b2e88",
"text": "\"As previously answered, the solution is margin. It works like this: You deposit e.g. 1'000 USD at your trading company. They give you a margin of e.g. 1:100, so you are allowed to trade with 100'000 USD. Let's say you buy 5'000 pieces of a stock at $20 USD (fully using your 100'000 limit), and the price changes to $20.50 . Your profit is 5000* $0.50 = $2'500. Fast money? If you are lucky. Let's say before the price went up to 20.50, it had a slight dip down to $19.80. Your loss was 5000* $0.2 = 1'000$. Wait! You had just 1000 to begin with: You'll find an email saying \"\"margin call\"\" or \"\"termination notice\"\": Your shares have been sold at $19.80 and you are out of business. The broker willingly gives you this credit, since he can be sure he won't loose a cent. Of course you pay interest for the money you are trading with, but it's only for minutes. So to answer your question: You don't care when you have \"\"your money\"\" back, the trading company will always be there to give you more as long as you have deposit left. (I thought no one should get margin explained without the warning why it is a horrible idea to full use the ridiculous high margins some broker offer. 1:10 might or might not be fine, but 1:100 is harakiri.)\"",
"title": ""
},
{
"docid": "b9584a6f6554b2d2367ec417532961f0",
"text": "e.g. a European company has to pay 1 million USD exactly one year from now While that is theoretically possible, that is not a very common case. Mostly likely if they had to make a 1 million USD payment a year from now and they had the cash on hand they would be able to just make the payment today. A more common scenario for currency forwards is for investment hedging. Say that European company wants to buy into a mutual fund of some sort, say FUSEX. That is a USD based mutual fund. You can't buy into it directly with Euros. So if the company wants to buy into the fund they would need to convert their Euros to to USD. But now they have an extra risk parameter. They are not just exposed to the fluctuations of the fund, they are also exposed to the fluctuations of the currency market. Perhaps that fund will make a killing, but the exchange rate will tank and they will lose all their gains. By creating a forward to hedge their currency exposure risk they do not face this risk (flip side: if the exchange rate rises in a favorable rate they also don't get that benefit, unless they use an FX Option, but that is generally more expensive and complicated).",
"title": ""
},
{
"docid": "3cbc214faddb2d0d98baf6b90d4f198b",
"text": "You find a broker who handles futures accounts. Search on the word Forex and you'll find a number of companies happy to take your money. I trust you understand how futures work, the contract values, margin requirements, etc? You just don't have an account yet, right?",
"title": ""
},
{
"docid": "d62e3a39316e279e4ee8a1655d33359f",
"text": "\"If you don't use leverage you can't lose more than you invested because you \"\"play\"\" with your own money. But even with leverage when you reach a certain limit (maintenance margin) you will receive a margin call from your broker to add more funds to your account. If you don't comply with this (meaning you don't add funds) the broker will liquidate some of the assets (in this case the currency) and it will restore the balance of the account to meet with his/her maintenance margin. At least, this is valid for assets like stocks and derivatives. Hope it helps! Edit: I should mention that\"",
"title": ""
},
{
"docid": "78bb47fd959da4d5ff70d18bba75043b",
"text": "If you're already in Australia you can just put your money in a savings account. The type of trade you're describing is called a carry trade, it makes money on the interest rate difference but gives you exposure to risk that the exchange rates change. You can, of course, leverage your money to get an even greater return at a higher risk. What you do is *borrow* USD, convert to AUD, and put in an Australian bank. In FX lingo this would be long AUDUSD.",
"title": ""
},
{
"docid": "43a9b92312ba34413f5070c89cd8da50",
"text": "I live in europe but have been paid in usd for the last few years and the best strategy I've found is to average in and average out. i.e. if you are going in August then buy some Euro every few weeks until you go. At least this way you mitigate the risk involved somewhat.",
"title": ""
}
] |
fiqa
|
b88fcfffc8aa5174a5d52ee94d77d720
|
How can I raise finance to build a home for my family
|
[
{
"docid": "a201a3ed2c8235b382b7505053b28484",
"text": "As I see it, there are 2 potential solutions - Joining with another person or 2, and buying a house with multiple bedrooms. I am in the US, and I've seen immigrants living in tight accommodations that would seem unacceptable to most of us. But, with the combined incomes, they were able to buy the house and quickly pay for it, and then buy another. $800/mo is about $5/hr. Below US minimum wage. Use your skills to take on additional work on line. A virtual assistant position can increase your income quite a bit. Keep in mind, as someone on the other side of the world, my advice may not be practical for you, these are just my thoughts.",
"title": ""
},
{
"docid": "085fb1e85e0a97532ea34dd8a70a5703",
"text": "Wanting save enough money to purchase a home is an issue that a lot of people face, regardless of where they live. The most simple answer is to save, save, save. Create a budget so that you are able to track every dollar. After you do so for a few weeks, then you will be able to see exactly how your money is being spent and where you can cut costs. If you need to, pick up a second or third job in your spare time. Then you can contribute your salary from that to your savings. If possible, consider moving in with friends or family - paying them rent of course, but it might be cheaper than renting on your own (you might also consider exchanging house work for rent). Times might be lean when you are saving, but you should remind yourself of what the ultimate goal is. I am unfamiliar with the government policies in Pakistan, but perhaps there is some kind of housing relief program where you can relocate to temporarily? Your situation is unfortunate and I sympathize with you. Best of luck!",
"title": ""
}
] |
[
{
"docid": "6a29624539cee4872470d0de9f470bde",
"text": "what are my options for raising the funds? Assuming you have decent credit, you can either mortgage your home or apply for a land loan in order to purchase the land. Since both your home and the land have value, either one can act as collateral in case you default on your loan. Land loans tend to have a higher interest rate and down payment, however. This is because banks see land loans as a riskier investment since it's easier for you to walk away from an empty plot of land than your own home.",
"title": ""
},
{
"docid": "c660aa77d34da2bf069924c305d831ea",
"text": "\"I am going to respond to a very thin sliver of what's going on. Skip ahead 4 years. When buying that house, is it better to have $48K in the bank but a $48K student loan, or to have neither? That $48K may very well be what it would take to put you over the 20% down payment threshhold thus avoiding PMI. Banks let you have a certain amount of non-mortgage debt before impacting your ability to borrow. It's the difference between the 28% for the mortgage, insurance and property tax, and the total 38% debt service. What I offer above is a bit counter-intuitive, and I only mention it as you said the house is a priority. I'm answering as if you asked \"\"how do I maximize my purchasing power if I wish to buy a house in the next few years?\"\"\"",
"title": ""
},
{
"docid": "e5a007945c390861e9406985c87a12ef",
"text": "\"If you want to have your wife stay home with kids, you'll have to make a plan to get there. As you point out, your situation right now won't support this. Create a budget that will work for you with a single income -- a \"\"zero based\"\" budget, not a budget based on your current expense structure. Figure out what you can afford on just your income for housing, church, food, transport, etc. Or apply the same idea on the assumption that she will keep working -- budget based on a second income plus child care expenses. Then you can decide what you have to change in order for that to work: maybe it means selling your house, renting, relocating, selling a car, finding a better or second job, etc. Then decide what you need to do in order to make these changes.\"",
"title": ""
},
{
"docid": "f15da4fc5bbe65bb08533dbd53f32f8a",
"text": "Let's think like a real estate developer. First you need to check with the zoning commission the restrictions for the area. Let's say that the plot is actually suitable for 10 homes. You buy the land. You also need to finance the build itself. If you don't have enough cash you need to acquire financing from banks and perhaps from other sources as well, because banks won't loan you the entire amount. Next you need to divide the plot into 10 pieces, making sure that each piece has driveway access to the street and plan access to utilities (water/sewer/electricity/broadband/phone lines). Plan the size and position of each house. Get building approval. This is a process that can take some time, especially if they have follow-up questions. Get a builder to build the houses, including ground work and preparation for utilities. Get approval for the finished houses. A building inspector will check that the houses follow the permission and all laws and regulations that apply. This step can entail time and added cost. Get a real estate agent to sell the new homes. Often, the selling process starts in the planning phase and early buyers are able to influence both the layout of the house and the finish. Your cost estimate included a profit of 140k for each house. From that a builder needs to subtract financing costs, real estate agent costs, any costs that you forgot to factor in, budget overdrafts, contingency costs, and salaries for your staff and yourself. I estimate the project time to 1.5-2 years. So, we have an $8M project with a gross profit of $1.4M (not including all costs). Net profit probably just a few hundred thousand. Or less. Real estate developers with local knowledge would be able to make a much more accurate estimate on both time and cost. My guess is that they have, and since the plot hasn't sold in a while, either the price is at the upper end of what makes a profitable project or there are other restrictions that limit the number/size of homes that can be built on it.",
"title": ""
},
{
"docid": "7319e7d344e18f21491dba0ebe7e93f6",
"text": "All of RonJohn's reasons to say no are extremely valid. There are also two more. First, the cost of a mortgage is not the only cost of owning a house. You have to pay taxes, utilities, repairs, maintenence, insurance. Those are almost always hundreds of dollars a month, and an unlucky break like a leaking roof can land you with a bill for many thousands of dollars. Second owning a house is a long term thing. If you find you have to sell in a year or two, the cost of making the sale can be many thousands of dollars, and wipe out all the 'savings' you made from owning rather than renting. I would suggest a different approach, although it depends very much on your circumstances and doesn't apply to everybody. If there is someone you know who has money to spare and is concerned for your welfare (your mention of a family that doesn't want you to work for 'academic reason' leads me to believe that might be the case) see if they are prepared to buy a house and rent it to you. I've known families do that when their children became students. This isn't necessarily charity. If rents are high compared to house prices, owning a house and renting it out can be very profitable, and half the battle with renting a house is finding a tenant who will pay rent and not damage the house. Presumably you would qualify. You could also find fellow-students who you know to share the rent cost.",
"title": ""
},
{
"docid": "4d2dca01d9cfa77aa73046505321e972",
"text": "\"I see two important things missing from your ongoing costs: maintenance and equipment. I also don't see the one-time costs of buying and moving. Maintenance involves doing some boring math like \"\"roofs go every 20 years or so and a new roof would cost $20k, so I need $1000 a year in the roof fund. Furnaces go every 20 years and cost $5k, so I need $250 a year in the furnace fund.\"\" etc etc. Use your own local numbers for both how long things last and how much they cost to replace. One rule of thumb is a percentage of the house (not house and land) price each year keeping in mind that while roof, furnace, carpet, stove, toilets etc all need to get replaced eventually, not everything does - the walls for example cost a lot to build but don't wear out - and not all at a 20 year pace. Some is more often, some is less often. I've heard 5% but think that's too high. Try 3% maybe? So if you paid $200,000 for a $100,000 house sitting on $100,000 of land, you put $3000 a year or about $250 a month into a repair fund. Then ignore it until something needs to be repaired. When that happens, fund the repair from the savings. If you're lucky, there will always be enough in there. If the house is kind of old and on its last legs, you might need to start with a 10 or 20k infusion into that repair fund. Equipment means a lawnmower and trimmer, a snow shovel, tools for fixing things (screwdriver, hammer, glue, pliers, that sort of thing.) Maybe tools for gardening or other hobbies that house-owners are likely to have. You might need to prune back some trees or bushes if nothing else. Eventually you get tools for your tools such as a doo-dad for sharpening your lawnmower. Well, lots of doo-dads for sharpening lots of things. One time expenses include moving, new curtains, appliances if they don't come with the house, possibly new furniture if you would otherwise have a lot of empty rooms, paint and painting equipment, and your housewarming party. There are also closing costs associated with buying a house, and you might need to give deposits for some of your utilities, or pay to have something (eg internet) installed. Be sure to research these since you have to pay them right when you have the least money, as you move in.\"",
"title": ""
},
{
"docid": "d109ba7495454717aab7dc067c750e66",
"text": "You are doing great! Congratulations. Check out the Dave Ramsey Baby Steps. He has advice for exactly your situation. The book Financial Peace covers the topic in detail. You have an Emergency Fund which is Step 3. Step 4 is investing 15% for retirement in 401k and similar. Step 5 is funding college if you have children. In Step 6, he advises putting any extra money towards the principle on your home. Owning your own home outright is a better goal than investing the money at a higher interest versus your mortgage interest rate. After your are completely debt free, then you can invest and give generously which is Step 7. Answering your question, push your emergency fund to 6 months, bump your retirement saving to 15% and put any extra money to your mortgage.",
"title": ""
},
{
"docid": "20e166df2c93571c305e04030bb03ede",
"text": "Do you want a house? Sounds like you do. Did you think about what it will take to own a run a house? I am betting you have. Buying a home shouldn't be about an investment in anything other than you happiness and you sure seem conscientious and ready. Your worries are good ones, but don't forget about unemployment insurance, that as responsible people you can get another job. Do you have a life insurance policy? If you really really can't afford your payments, you can try to sell the house because you should have plenty of equity per your plans. Furthermore, chances are you will earn more in your paychecks over your lifetime. Think about what features you want, shop the market hard, take time and buy a house on reason rather than love. Don't you dare love the house until you buy it.",
"title": ""
},
{
"docid": "c17aff7f263c74b9a7f8eb3c8981ca68",
"text": "Owing money to family members can create serious problems. Taking out a purchase-money mortgage to pay your sister for her share is the best way to avoid future friction and, possibly, outright alienation.",
"title": ""
},
{
"docid": "a4eb3d31cd5e64d96f676f08010b2ed5",
"text": "Your question has an interesting mix of issues. ASAP and 3-4 years doesn't feel like the same thing. ASAP results in bad decisions made in haste. Four years of living very frugally can create a nice down payment on a house. A car is only an investment for Uber drivers and those who are directly financially benefitting from a car's use. For everyone else, it's a necessary expense. What I'd focus on is the decision of buying a plot of land. Unless this is a very common way to do it in your country, I don't recommend that order. Having land and then trying to finance the building of a house has far more complexity than most people need in their lives. In my opinion, the better way is to save the 20% down, and buy a new or existing home you can afford. In the end, spending is a matter of priority. If you truly want to get out in the least time, I'd save every dime I can and start looking for a house that your income can support.",
"title": ""
},
{
"docid": "2c42f2eb5810f7b396be829f8e997dfd",
"text": "\"Outside of broadly hedging interest rate risk as I mentioned in my other answer, there may be a way that you could do what you are asking more directly: You may be able to commit to purchasing a house/condo in a pre-construction phase, where your bank may be willing to lock in a mortgage for you at today's rates. The mortgage wouldn't actually be required until you take ownership from the builder, but the rates would be set in advance. Some caveats for this approach: (1) You would need to know the house/condo you want to move into in advance, and you would be committing to that move today. (2) The bank may not be willing to commit to rates that far in advance. (3) Construction would likely take far less than 5 years, unless you are buying a condo (which is the reason I mention condos specifically). (4) You are also committing to the price you are paying for your property. This hedges you somewhat against price fluctuation in your future area, but because you currently own property, you are already somewhat hedged against property price fluctuation, meaning this is taking on additional risk. The 'savings' associated with this plan as they relate to your original question (which are really just hedging against interest rate fluctuations) are far outweighed by the external pros and cons associated with buying property in advance like this. By that I mean - if it was something else you were already considering, this might be a (small) tick in the \"\"Pro\"\" column, but otherwise is far too committal / complex to be considered for interest rate hedging on its own.\"",
"title": ""
},
{
"docid": "1112b5f5bd959c156ff76598295e31ec",
"text": "Debt will ruin any plans. I guess that the interest on the credit cards is about $450 a month or about $5,500 per year and the school loans is about $6,000 a year. Get a an Excel spread sheet going and start tracking your expensed. Learn to make a amortization spread sheet for all debts, and any future debts that you are thinking about. If you want a family soon plan on one income for a period of time. If you buy a house plan on paying it off while you are working. Then the house payment becomes spendable money during retirement. A cheaper house can be upgraded in the right neighborhood with an excellent appreciation in value. Money put into excellent collectibles and kept for 20 years or more is private and off the radar income no taxes when sold. STUDY STUDY LEARN LEARN",
"title": ""
},
{
"docid": "51798e3f0e96fef8b3bc3866488c1144",
"text": "There is no simple, legally reasonable, way for her to build equity by helping out with your mortgage, without her having a claim to your mortgage. The only 'equitable' thing she can do is rent from you. If you want her to be building equity, have her start and fund a brokerage account for herself. If you have an affinity for real estate, have her buy REITs in said investment account.",
"title": ""
},
{
"docid": "72e1fd007f923746e2d8f8db270d784b",
"text": "\"Your actual question is a bit confusing, but parts of it are answerable. If your parents give you cash to buy a home, you use it for a cash sale, and you then repay them, then if they don't charge you interest (above and beyond any they may pay - treat their loan as entirely separate from yours.) that amount of not-charged interest is considered a gift. You can look up these rates here, on the IRS website, called \"\"Applicable Federal Rates\"\"; currently it's around 2.30% APR. If the interest is that much, the interest isn't a gift, but part of a loan - though your parents will have to file some paperwork and you will also. Search for more information about \"\"Intra-Family Loans\"\" for full details - and talk to a real estate lawyer. Separately, if your parents are the primary/only signors on the mortgage, and are thus effectively the property owner, there are two separate issues. First, you're welcome to pay off the mortgage while you live there, and no tax issues exist (then) in terms of gift, though it's still owned in your parents' name - so you don't get the house, they'd have to gift that to you separately, though they can do that in stages to avoid gift tax ($14k worth of equity per year, or whatever the current year's annual limit is, per parent and per you/wife if applicable). H&R Block discusses the concept of Equitable Ownership, which determines who is able to take the property tax and mortgage interest deductions on the house. Tax Almanac goes into a bit more detail on the subject. Ultimately, another issue for a real estate attorney probably (or at least a CPA or tax attorney): you need to be very careful if you're going to try and get the tax deductions (which would be probably far more than the savings of a half percent of interest rate or whatnot). In general, there are a lot of options for exactly how you structure the purchase, payments, and equity, and you should talk to a professional to find out exactly the right way to structure it. This mortgage info site has some good tips for several different ways to structure things, just as an example. I would in particular suggest you pay attention to deductability of mortgage interest and property taxes, as those two can be a huge amount of tax savings and you can lose that very easily if you're not careful.\"",
"title": ""
},
{
"docid": "1e06a2786f1164414a9e785519945f77",
"text": "This solution obviously wouldn't work for everyone, and is contingent on the circumstances of your parents' finances with regards to their house, but... Have you considered buying your parents' house? This way your parents' desire for you to get a house as an investment would be satisfied, they wouldn't have to worry about losing their home, and you might even be able to work out a financing/rent deal that is beneficial to everyone involved. There are definitely fewer costs going this route anyway, for instance, your parents won't have any marketing costs associated with selling the house and could pass this savings along to you. Also, having lived in the house for a large part of your life you will also know what you are getting in to.",
"title": ""
}
] |
fiqa
|
42fad0205238ad1b909ee701d65daa78
|
How exactly could we rank or value how “rich” a company brand is?
|
[
{
"docid": "c4bef758a078cff5aded80dbc6fc24be",
"text": "\"Matt explains the study numbers in his answer, but those are the valuation of the brand, not the value of the company or how \"\"rich\"\" the company is. Presuming that you're asking the value of the company, the usual way for a publicly traded company to be valued is by the market capitalization (1). Market capitalization is a fairly simple measure, basically the total value of all the shares of stock in that company. You can find the market cap for any publicly traded company on any of the usual finance sites like Google Finance or Yahoo Finance. If by rich you mean the total value of assets (assets being all property, including cash, real property, equipment, and licenses) a company owns, that information is included in a publicly traded company's quarterly SEC filing and investor releases, but isn't usually listed on the popular finance sites. An example can be seen at Duke Energy's Investor Relation Site (the same information can be found for all companies on EDGAR, the SEC's search tool). If you open the most recent 8-K (quarterly filing), and go to page 8, you can see that they have $33B+ in assets, and a high level breakdown of those. Note that the numbers are given in millions of dollars For a privately held company this information may or may not be available and you'd have to track it down if it is available. I picked Duke Energy because it's the first thing that popped into my mind. I have no affiliation with Duke, and I don't directly own any of their stock.\"",
"title": ""
},
{
"docid": "033566480a7889d7b49fa6c1be4e8964",
"text": "Those rankings in particular that you cite are compiled by Millward Brown and the methodology is explained like this:",
"title": ""
}
] |
[
{
"docid": "7260e33a94f0592cc40cc223803db899",
"text": "There are books on the subject of valuing stocks. P/E ratio has nothing directly to do with the value of a company. It may be an indication that the stock is undervalued or overvalued, but does not indicate the value itself. The direct value of company is what it would fetch if it was liquidated. For example, if you bought a dry cleaner and sold all of the equipment and receivables, how much would you get? To value a living company, you can treat it like a bond. For example, assume the company generates $1 million in profit every year and has a liquidation value of $2 million. Given the risk profile of the business, let's say we would like to make 8% on average per year, then the value of the business is approximately $1/0.08 + $2 = $14.5 million to us. To someone who expects to make more or less the value might be different. If the company has growth potential, you can adjust this figure by estimating the estimated income at different percentage chances of growth and decline, a growth curve so to speak. The value is then the net area under this curve. Of course, if you do this for NYSE and most NASDAQ stocks you will find that they have a capitalization way over these amounts. That is because they are being used as a store of wealth. People are buying the stocks just as a way to store money, not necessarily make a profit. It's kind of like buying land. Even though the land may never give you a penny of profit, you know you can always sell it and get your money back. Because of this, it is difficult to value high-profile equities. You are dealing with human psychology, not pennies and dollars.",
"title": ""
},
{
"docid": "980e48c749e05c0432b46adffc11cd8a",
"text": "Imagine a poorly run store in the middle of downtown Manhattan. It has been in the family for a 100 years but the current generation is incompetent regarding running a business. The store is worthless because it is losing money, but the land it is sitting on is worth millions. So yes an asset of the company can be worth more than the entire company. What one would pay for the rights to the land, vs the entire company are not equal.",
"title": ""
},
{
"docid": "f0e0b70df962940d8af2bec90788bd0e",
"text": "Thanks for your comment! I don't understand what you mean by 'thinking their funny... in the graph...?' I also didn't set out to influence you, it is statistics from sproutsocial with I elaborated on. I understand your cynicism of bad products, but how will people find out about your good product? It's about marketing, not sales. I 100% agree with your grandfatherThe whole point of the article is to encourage businesses and brands to storytell instead of sell. Thanks again for your time",
"title": ""
},
{
"docid": "b7fc09add0c812c4af7371d7048650c5",
"text": "First read mhoran's answer, Then this - If the company sold nothing but refrigerators, and had 40% market share, that's $4M/yr in sales. If they have a 30% profit margin, $1.2M in profit each year. A P/E of 10 would give a stock value totaling $12M, more than the market size. The numbers are related, of course, but one isn't the maximum of the other.",
"title": ""
},
{
"docid": "26649346a2d0ba89ae36ddea84112e49",
"text": "There is plenty of research that shows that companies that have a portfolio of brands within the same category have superior financial returns. The reason is that even for dish soap there are different types of people who want different products. One of the more successful brands for P&G over the past decade has been Gain detergent. It is a mega-brand that competes with tide for people who love scent. The brand has been so successful that there are now dish soaps and other products with the Gain name. There are typically performance differences between the brands. For example trade off performance against a certain type of stain for more scent.",
"title": ""
},
{
"docid": "11dcc15ec506ffc8bc2c15e086f79915",
"text": "\"Gold has no \"\"intrinsic\"\" value. None whatsoever. This is because \"\"value\"\" is a subjective term. \"\"Intrinsic value\"\" makes just as much sense as a \"\"cat dog\"\" animal. \"\"Dog\"\" and \"\"cat\"\" are referring to two mutually exclusive animals, therefore a \"\"cat dog\"\" is a nonsensical term. Intrinsic Value: \"\"The actual value of a company or an asset based on an underlying perception of its true value ...\"\" Intrinsic value is perceived, which means it is worth whatever you, or a group of people, think it is. Intrinsic value has nothing, I repeat, absolutely nothing, to do with anything that exists in reality. The most obvious example of this is the purchase of a copy-right. You are assigning an intrinsic value to a copy-right by purchasing it. However, when you purchase a copy-right you are not buying ink on a page, you are purchasing an idea. Someone's imaginings that, for all intensive purposes, doesn't even exist in reality! By definition, things that do not exist do not have \"\"intrinsic\"\" properties - because things that don't exist, don't have any natural properties at all. \"\"Intrinsic\"\" according to Websters Dictionary: \"\"Belonging to the essential nature or constitution of a thing ... (the intrinsic brightness of a star).\"\" An intrinsic property of an object is something we know that exists because it is a natural property of that object. Suns emit light, we know this because we can measure the light coming from it. It is not subjective. \"\"Intrinsic Value\"\" is the OPPOSITE of \"\"Intrinsic\"\"\"",
"title": ""
},
{
"docid": "552f44e64b9f67c9e7c4b5d142cdcc24",
"text": "In addition to the answer by Craig Banach: Sometimes brands are owned by publicly traded companies which have a very diverse product portfolio. In case of Microsoft their stock price and dividend will not be controlled solely by that one product they make but also by their many other products (plus a billion other factors which can influence a stock price). So when you want to bet specifically on the success of Windows Phone then betting on the Microsoft Corporation as a whole might not achieve that goal. However, you can also try to find companies whose success depends indirectly on the success of the product. That can be suppliers (someone who makes a specific part which is only used for Windows phones), companies which make Windows Phone specific accessories or software developers who make applications which specifically target the Windows Phone ecosystem. When the product portfolio of these companies is far narrower than that of Microsoft they might be more dependent on the success of Windows Phone than Microsoft themselves. But as always, keep in mind that the success of their products is not the only factor which decides the stock value of a company. The stock market is far more complex than that.",
"title": ""
},
{
"docid": "9d187095455d82be7223c40a491cbdf8",
"text": "There seems to be a disconnect between brands and channels in which brands advertise. While I see and agree the point of the article, it treats all media channels as equal, where there are clear differences between them and as an extension the level of confidence given to a brand as a result. The author does focuses on the millennials as a target group that is less receptive to advertising, but neglects to take into account the sheer volume of advertising that is around us - compared to ten or even twenty years ago - the increase has been exponential. Today it’s almost impossible to even go to even a family without having it sponsored by your local dentist, real estate agent and pizza chain. The fact that millennial are performing more due diligence is not just a reflection on the group as a whole, but speaks volumes of the sheer quantity of (many low quality) options of media and advertising we come across on a daily basis.",
"title": ""
},
{
"docid": "6c2622abaa663cd18125ec94aca901e7",
"text": "\"A company's valuation includes its assets, in addition to projected earnings. Aside from the obvious issue that \"\"projected earnings\"\" can be wildly inaccurate or speculative (as in the case of startups and fast-moving industries like technology), a company's assets are not necessarily tied to the market the company is in. For the sake of illustration, say the government were to ban fast food tomorrow, and the market for that were to go all the way to zero. McDonald's would still have almost 30 billion dollars worth of real estate holdings that would surely make the company worth something, even though it would have to stop selling its products. Similarly, Apple is sitting on approximately $200 billion dollars in cash and securities in overseas subsidiaries. Even if they never make another cent selling iPhones and such, the company is still worth a lot because of those holdings. \"\"Corporate raiders\"\" back in the 70's and 80's made massive personal fortunes exploiting this disconnect in undervalued companies that had more assets than their market cap, by getting enough ownership to liquidate the company's assets. Oliver Stone even made a movie about the phenomenon. So yes, it's certainly possible for a company to be worth more than the size of the market for its products.\"",
"title": ""
},
{
"docid": "4c3aa8b3c97abdd8808c9bee7f1154ce",
"text": "You are not seeing what I aim to explore. Firstly, I am looking into whether or not CEO-charisma has any influence on consumers in their decision making process. Secondly I want to see if their decision making process will differ between industries of certainty and industries of uncertainty. That is why I chose a stable industry (bottled water) and an uncertain industry (computers). In this survey I am using the Conger-Kanungo scale, which only has been used on internal analysis of the organisation so far. I want to see if the scale can be adapted to the external environment with the same results. Edit: I just saw your second point. It does not matter who the CEO of Coke or Pepsi is. I took a hypothetical approach to reduce any bias in the survey.",
"title": ""
},
{
"docid": "37bf7229d625595c8ad96f6ebdc4c443",
"text": "The idea here is to get an idea of how to value each business and thus normalize how highly prized is each dollar that a company makes. While some companies may make millions and others make billions, how does one put these in proper context? One way is to consider a dollar in earnings for the company. How does a dollar in earnings for Google compare to a dollar for Coca-cola for example? Some companies may be valued much higher than others and this is a way to see that as share price alone can be rather misleading since some companies can have millions of shares outstanding and split the shares to keep the share price in a certain range. Thus the idea isn't that an investor is paying for a dollar of earnings but rather how is that perceived as some companies may not have earnings and yet still be traded as start-ups and other companies may be running at a loss and thus the P/E isn't even meaningful in this case. Assuming everything but the P/E is the same, the lower P/E would represent a greater value in a sense, yes. However, earnings growth rate can account for higher P/Es for some companies as if a company is expected to grow at 40% for a few years it may have a higher P/E than a company growing earnings at 5% for example.",
"title": ""
},
{
"docid": "81f69093cc5875623a9e76b0a556d927",
"text": "You seem to think that rich people have money just lying around. They don't, inflation takes care of that. All money is in circulation, it's invested in companies. Who buy products from other companies with that money, and they buy products from other companies... etc. All of them employ people. All of them produce something worthwhile.",
"title": ""
},
{
"docid": "95635c3ea0d814203cd7a5da0d74fbea",
"text": "\"What does your comment have to do with my comment? You say \"\"Apple only designs stuff\"\" as if that has some bearing on their net worth. Right now Apple's stock is worth about as much as *Google and Microsoft combined*, and they're sitting on about 60B in *cash*. They are *extremely* wealthy. They could do absolutely nothing for a very very long time and still stay in business.\"",
"title": ""
},
{
"docid": "7a4af6d5d949050b38d46a09f9238888",
"text": "And the kind folk at Yahoo Finance came to the same conclusion. Keep in mind, book value for a company is like looking at my book value, all assets and liabilities, which is certainly important, but it ignores my earnings. BAC (Bank of America) has a book value of $20, but trades at $8. Some High Tech companies have negative book values, but are turning an ongoing profit, and trade for real money.",
"title": ""
},
{
"docid": "9c63f165b43dadcc2c11026b1236126f",
"text": "I definitely see the value from a business standpoint just not as a consumer. I don't really feel like the prices are better than anywhere else. They do have really great employees and I'm sure there's a group of people who go there for that, and I'm are that ties in to them paying a reasonable wage. It will be really interesting to see where they are in 10 years",
"title": ""
}
] |
fiqa
|
bea9490ad4bb2451a53b1835b4c2eabc
|
How to compute real return including expense ratio
|
[
{
"docid": "6d9657c607586b37a6adb1bcd2413064",
"text": "Returns reported by mutual funds to shareholders, google, etc. are computed after all the funds' costs, including Therefore the returns you see on google finance are the returns you would actually have gotten.",
"title": ""
}
] |
[
{
"docid": "eb3b91a7d2eadc3537f0d83721756f61",
"text": "The main question is, how much money you want to make? With every transaction, you should calculate the real price as the price plus costs. For example, if you but 10 GreatCorp stock of £100 each, and the transaction cost is £20 , then the real cost of buying a single share is in fact buying price of stock + broker costs / amount bought, or £104 in this case. Now you want to make a profit so calculate your desired profit margin. You want to receive a sales price of buying price + profit margin + broker costs / amount bought. Suppose that you'd like 5%, then you'll need the price per stock of my example to increase to 100 + 5% + £40 / 10 = £109. So you it only becomes worth while if you feel confident that GreatCorp's stock will rise to that level. Read the yearly balance of that company to see if they don't have any debt, and are profitable. Look at their dividend earning history. Study the stock's candle graphs of the last ten years or so, to find out if there's no seasonal effects, and if the stock performs well overall. Get to know the company well. You should only buy GreatCorp shares after doing your homework. But what about switching to another stock of LovelyInc? Actually it doesn't matter, since it's best to separate transactions. Sell your GreatCorp's stock when it has reached the desired profit margin or if it seems it is underperforming. Cut your losses! Make the calculations for LovelyCorp's shares without reference to GreatCorp's, and decide like that if it's worth while to buy.",
"title": ""
},
{
"docid": "5d4190e4e9d5d39e206d1e79faa6f863",
"text": "The expense ratio is 0.17% so doesnt that mean that for every 10K I keep in the money market fund I lose $17/year? Not really. The expense ratio is taken before distributions are paid which applies to all mutual funds. Should I care about this? In this case not really. If it was a taxable account, then other options may be more tax-efficient that is worth noting. The key with money market funds is that the expense ratio often represents how much money the administrators will take before paying out the rest. So, if your money market fund bought investments that paid .25% then you'd likely see .08% as that is what is left over after the .17% is taken in the dividends. If at the start of the year, the funds NAV is $1, and at the end of the year, the funds NAV is still $1, I havent lost anything right? Right. Wikipedia has a good article on money market funds. Keep in mind that most money market funds are run as one of a number of funds from a fund family that may have to take a little less profit on the money market funds when rates are low.",
"title": ""
},
{
"docid": "efd4b64f0df8d52bb3ae8de8403429c4",
"text": "Research Affiliates expects a 10-year real return of about 1.3% on REITs. See the graph on Barry Ritholtz's blog. Here's a screenshot from the Research Affiliates website that shows how they calculated this expected return:",
"title": ""
},
{
"docid": "07a921214f64cac481e46f2455f46acd",
"text": "It is a good enough approximation. With a single event you can do it your way and get a better result, but imagine that the $300 are spread over a certain period with $10 contribution each time? Then recalculating and compounding will be a lot of work to do. The original ROI formula is averaging the ROI by definition, so why bother with precise calculations of averages that are imprecise by definition, when you can just adjust the average without losing the level of precision? 11.4 and 11.3 aren't significantly different, its immaterial.",
"title": ""
},
{
"docid": "83ee753bf0e789e557df6966e4cfcbc9",
"text": "You could take these definitions from MSCI as an example of how to proceed. They calculate price indices (PR) and total return indices (including dividends). For performance benchmarks the net total return (NR) indices are usually the most relevant. In your example the gross total return (TR) is 25%. From the MSCI Index Defintions page :- The MSCI Price Indexes measure the price performance of markets without including dividends. On any given day, the price return of an index captures the sum of its constituents’ free float-weighted market capitalization returns. The MSCI Total Return Indexes measure the price performance of markets with the income from constituent dividend payments. The MSCI Daily Total Return (DTR) Methodology reinvests an index constituent’s dividends at the close of trading on the day the security is quoted ex-dividend (the ex-date). Two variants of MSCI Total Return Indices are calculated: With Gross Dividends: Gross total return indexes reinvest as much as possible of a company’s dividend distributions. The reinvested amount is equal to the total dividend amount distributed to persons residing in the country of the dividend-paying company. Gross total return indexes do not, however, include any tax credits. With Net Dividends: Net total return indexes reinvest dividends after the deduction of withholding taxes, using (for international indexes) a tax rate applicable to non-resident institutional investors who do not benefit from double taxation treaties.",
"title": ""
},
{
"docid": "f2957071718c3125aae989498d051224",
"text": "I was emailing back and forth with a manager in a different department on how real returns are being calculated, and he said that the industry standard is 1 + real returns*(1+inflation) - fees, and to not use my formula because it can double count inflation, making fees lower. However, real returns are not observable in the future, and I do not why he uses that formula. The returns were used in an Excel spreadsheet. What are your thoughts about this?",
"title": ""
},
{
"docid": "193fcf22ed5e553406178908183e95ff",
"text": "To figure this out, you need to know the price per share then vs the price per share now. Google Finance will show you historical prices. For GOOG, the closing price on January 5, 2015 was $513.87. The price on December 31, 2015 was $758.88. Return on Investment (ROI) is calculated with this formula: ROI = (Proceeds from Investment - Cost of Investment) / Cost of Investment Using this formula, your return on investment would be 47.7%. Since the time period was one year, this number is already an annualized return. If the time period was different than one year, you would normally convert it to an annualized rate of return in order to compare it to other investments.",
"title": ""
},
{
"docid": "f432e4202cba51201a47e1b5b6731005",
"text": "Should you care? From Vanguard: The long-term impact of investment costs on portfolio balances Assuming a starting balance of $100,000 and a yearly return of 6%, which is reinvested Check out this chart, reflecting the impact of relatively small expense ratios on your 30 year return: All else being equal you should very much care about expense ratios. You end up with a significantly smaller amount if your pre-expense return is the same. A 0.75% difference in ER compounds to 20% over 30 years. If so, how should I take them into consideration when comparing funds? I'm in the U.S. if that matters. If they track the same index, cheaper is better. The cases where higher expense ratios might be better are if you believe that index will outperform the market by enough to recoup the cost of the ER. There is significant research that most funds do not do this.",
"title": ""
},
{
"docid": "9a569aa1c64b6688f4f27726484078a5",
"text": "For this, the internal rate of return is preferred. In short, all cash flows need to be discounted to the present and set equal to 0 so that an implied rate of return can be calculated. You could try to work this out by hand, but it's practically hopeless because of solving for roots of the implied rate of return which are most likely complex. It's better to use a spreadsheet with this capability such as OpenOffice's Calc. The average return on equity is 9%, so anything higher than that is a rational choice. Example Using this simple tool, the formula variables can easily be input. For instance, the first year has a presumed cash inflow of $2,460 because the insurance has a 30% discount from $8,200 that is assumed to be otherwise paid, a cash inflow of $40,000 to finance the sprinklers, a cash outflow of $40,000 to fund the sprinklers, a $400 outflow for inspection, and an outflow in the amount of the first year's interest on the loan. This should be repeated for each year. They can be input undiscounted, as they are, for each year, and the calculator will do the rest.",
"title": ""
},
{
"docid": "7a1af1f518ca2fda333f2639837459d9",
"text": "PE ratio is the current share price divided by the prior 4 quarters earnings per share. Any stock quote site will report it. You can also compute it yourself. All you need is an income statement and a current stock quote.",
"title": ""
},
{
"docid": "a7ac74f7905d5fbd9326fa140ce341c1",
"text": "A couple ideas: Use excel - it has an IRR (internal rate of return) that can handle a table of inputs as you describe, along with dates deposited to give you a precise number. Go simple - track total deposits over the year, assume half of that was present in January. So, for example, your account started the year with $10k, ended with $15k, but you deposited $4k over the year. It should be clear the return (gain) is $1k, right? But it's not 10%, as you added during the year. I'd divide $1k/$12k for an 8.3% return. Not knowing how your deposits were structured, the true number lies between the 10% and 6.7% as extremes. You'll find as you get older and have a higher balance, this fast method gaining accuracy, as your deposits are a tinier fraction of your account and likely spread out pretty smoothly over the year anyway.",
"title": ""
},
{
"docid": "e6f8c74a0902a1fa88280961a409867b",
"text": "This link does it ok: http://investexcel.net/1979/calculate-historical-volatility-excel/ Basically, you calculate percentage return by doing stock price now / stock price before. You're not calculating the rate of return hence no subtraction of 100%. The standard is to do this on a daily basis: stock price today / stock price yesterday. The most important and most misunderstood part is that you now have to analyze the data geometrically not arithmetically. To easily do this, convert all percentage returns with the natural log, ln(). Next, you take the standard deviation of all of those results, and apply exp(). This answers the title of your question. For convenience's sake, it's best to annualize since volatility (implied or statistical) is now almost always quoted annualized. There are ~240 trading days each year. You multiply your stdev() result by (240 / # of trading days per return) ^ 0.5, so if you're doing this for daily returns, multiply the stdev() result by 240^0.5; if you were doing it weekly, you'd want to multiply by (240 / ~5)^0.5; etc. This is your number for sigma. This answers the intent of your question. For black-scholes, you do not convert anything back with exp(); BS is already set up for geometric analysis, so you need to stay there. The reason why analysis is done geometrically is because the distribution of stock returns is assumed to be lognormal (even though it's really more like logLaplace).",
"title": ""
},
{
"docid": "5b5c6f5d4b26bd4c954cdb1558e22cf8",
"text": "\"I could not figure out a good way to make XIRR work since it does not support arrays. However, I think the following should work for you: Insert a column at D and call it \"\"ratio\"\" (to be used to calculate your answer in column E). Use the following equation for D3: =1+(C3-B3-C2)/C2 Drag that down to fill in the column. Set E3 to: =(PRODUCT(D$3:D3)-1)*365/(A3-A$2) Drag that down to fill in the column. Column E is now your annual rate of return.\"",
"title": ""
},
{
"docid": "1f25fc1100906dad3d175ba50a5c3a5c",
"text": "TWRR = (2012Q4 x 2013Q1 x 2013Q2) ^ (1/3) = ?? (1.1 * .809 * 1.29) ^ (1/3) = 1.047 or 4.7% return. No imaginary numbers needed. But. Your second line there is wrong $15,750 - $15,000 - $4,000 ? The $15K already contains the $4k, why did you subtract it again? This a homework problem?",
"title": ""
},
{
"docid": "c5158b4448a8dd6770b62826b77c8ee1",
"text": "In order to calculate the ratio you are looking for, just divide total debt by the market capitalization of the stock. Both values can be found on the link you provided. The market capitalization is the market value of equity.",
"title": ""
}
] |
fiqa
|
1357fef74df3c83c984cb158efa50267
|
Can I use balance transfer to buy car?
|
[
{
"docid": "461658a1722265a3036c4ce70e5d284a",
"text": "\"It really depends on the exact wording of that zero rate offer. Some specifically state they are to be used for paying other debt. Others will have wording such as \"\"pay other debt or write yourself a check to pay for that next vacation, or new furniture.\"\" Sorry, it's back on you to check this out in advance.\"",
"title": ""
},
{
"docid": "d48785f98d580c2f0bba55a4e048f87c",
"text": "\"You do not say what country you are in. This is an answer for readers in the UK. Most normal balance transfer deals are only for paying off other credit cards. However there are \"\"money transfer\"\" deals that will pay the money direct to your bank account. The deals aren't as good as balance transfer deals but they are often a competitive option compared to other types of borrowing. Another option depending on how much you need to borrow and your regular spending habits is to get a card with a \"\"0% for purchases\"\" deal and use that card for your regular shopping, then put the money you would have spent on your regular shopping towards the car.\"",
"title": ""
}
] |
[
{
"docid": "e286a4b4698d26d497f4deb62bf8b825",
"text": "The implied intent is that balance transfers are for your balances, not someone else's. However, I bet it would be not only allowed but also encouraged. Why? Because the goal of a teaser rate is to get you to borrow. Typically there is a balance transfer fee that allows the offering company to break even. In the unlikely event that a person does pay off the balance in the specified time frame the account and is then closed, then nothing really lost. Its hard to find past articles I've read as all the search engines are trying to get me to enroll in a balance transfer. However, about 75% of 0% balance xfers result in converting to a interest being accrued. If you are familiar with the amount of household credit card debt we carry, as a nation, that figure is very believable. To answer your question, I would assume they would allow it. However I would call and check and get their answer in writing. Why? Because if they change their mind or the representative tells you incorrectly, and they find out, they will convert your 0% credit card to an 18% or higher interest rate for violating the terms. Same as if a payment was missed. From the credit card company's perspective they would be really smart to allow you to do this. The likelihood that your family member will pay the bill beyond two months is close to zero. The likelihood that a payment will be missed or late allowing them to convert to a higher rate is very high. This then might lead to you being overextended which would mean just more interest rates and fees. Credit card company wins! I would not be surprised if they beg you to follow through on your plan. From your perspective it would be a really dumb idea, but as you said you knew that. Faced with the same situation I would just pay off one or more of the debts for the family member if I thought it would actually help them. I would also require them to have some financial accountability. Its funny that once you require financial accountability for handouts, most of those seeking a donation go elsewhere.",
"title": ""
},
{
"docid": "92a61455d9f49c80b5be72ef8cd10f71",
"text": "As far as ease of sale transaction goes you'll want to pay off the loan and have the title in your name and in your hand at the time of sale. Selling a car private party is difficult enough, the last thing you want is some administrivia clouding your deal. How you go about paying the remaining balance on the car is really up to you. If you can make that happen on a CC without paying an additional fee, that sounds like a good option.",
"title": ""
},
{
"docid": "dc5fd5eeb9a1417fa39f3985391b0af7",
"text": "NEVER combine the negotiations for trade-in of an old car and purchase of a new one (and/or financing), if you can avoid doing so. Dealers are very good at trading off one against the other to increase their total profit, and it's harder for you to walk away when you have to discard the whole thing. These are separate transactions, each of which can be done with other parties. Treat them as such.",
"title": ""
},
{
"docid": "9e750f0e4742820944816ee5fc7cc817",
"text": "Break the transactions into parts. Go to your bank or credit union and get a loan commitment. When applying for loan get the maximum amount they will let you borrow assuming that you will no longer own the first car. Take the car to a dealer and get a written estimate for selling the car. Pick one that gives you an estimate that is good for a week or ten days. You now know a data point for the trade-in value. Finally go to the dealer where you will buy the replacement car. Negotiate the price, tell them you don't need financing and you will not be trading in the car. Get all you can regarding rebates and other special incentives. Once you have a solid in writing commitment, then ask about financing and trade in. If they beat the numbers you have regarding interest rate and trade-in value accept those parts of the deal. But don't let them change anything else. If you keep the bank financing the dealer will usually give you a couple of days to get a check. If you decide to ell the car to the first dealer do so as soon as you pick up the replacement car. If you try to start with the dealer you are buying the car from they will keep adjusting the rate, length of loan, trade-in value, and price until you have no idea if you are getting a good deal.",
"title": ""
},
{
"docid": "556dfadb5cf3e316cfebe3430444715d",
"text": "Instead of going to the dealership and not knowing if you will be able to get a loan or what the interest rate might be, go to a local credit union or bank first, before you go car shopping, and talk to them about what you would need for your loan. If you can get approval for a loan first, then you will know how much you can spend, and when it comes time for negotiation with the dealer, he won't be able to confuse you by changing the loan terms during the process. As far as the dealer is concerned, it would be a cash transaction. That having been said, I can't recommend taking a car loan. I, of course, don't know you or your situation, but there are lots of good reasons for buying a less expensive car and doing what you can to pay cash for it. Should you choose to go ahead with the loan, I would suggest that you get the shortest loan length that you can afford, and aim to pay it off early.",
"title": ""
},
{
"docid": "9dde985625769ca6e58e3689b8cde07a",
"text": "This is what your car loan would look like if you paid it off in 14 months at the existing 2.94% rate: You'll pay a total of about $277 in interest. If you do a balance transfer of the $10,000 at 3% it'll cost you $300 up front, and your payment on the remaining $5,000 will be $363.74 to pay it off in the 14 month period. Your total monthly payment will be $1,099.45; $5,000 amortized at 2.94% for 14 months plus $10,300 divided by 14. ($363.74 + 735.71). Your interest will be about $392, $300 from the balance transfer and $92 from the remaining $5,000 on the car loan at 2.94%. Even if your lender doesn't credit your additional payment to principal and instead simply credits future payments, you'd still be done in 15 months with a total interest expense of about $447. So this additional administration and additional loan will save you maybe about $55 over 14 or 15 months.",
"title": ""
},
{
"docid": "790cb8a8e310745b97e5b73b7f104b2b",
"text": "See what the contract says about transfers or subleases. A lease is a credit agreement, so the lessor may not allow transfers. You probably ought to talk to an accountant about this. You can probably recognize most of the costs associated with the car without re-financing it in another lease.",
"title": ""
},
{
"docid": "28a5ebedc1fc73c4189e58ac6d0ede89",
"text": "There is no need to get an auto loan just to try and affect your credit score. It is possible to have a score over 800 without any sort of auto loan. If you can afford to pay for the vehicle up front that is the better option. Even with special financing incentives it is better to pay up front if you can. Yes it is possible to use the funds to make more if you finance with a silly low interest rate, however it's also possible to lose a job or have some other financial disaster happen and need that money for something else making it more difficult to make the payment. It may be just me but I find the peace of mind not having the payment to be worth a lot.",
"title": ""
},
{
"docid": "9874f6737c29c6ccdcf50be800ba0095",
"text": "You need to do the maths exactly. The cost of buying a car in cash and using a loan is not the same. The dealership will often get paid a significant amount of money if you get a loan through them. On the other hand, they may have a hold over you if you need their loan (no cash, and the bank won't give you money). One strategy is that while you discuss the price with the dealer, you indicate that you are going to get a loan through them. And then when you've got the best price for the car, that's when you tell them it's cash. Remember that the car dealer will do what's best for their finances without any consideration of what's good for you, so you are perfectly in your rights to do the same to them.",
"title": ""
},
{
"docid": "25e6d4e27407fb2a0e74fb8633fc6e3b",
"text": "Why would you trade a lower interest rate over a higher one? I wouldn't use the mortgage to pay off the car. Also, you should have loan/lease payoff on your auto insurance, which if the car is totaled means your loan would be paid by insurance. I don't think you'd be able to take advantage of that if your car payments become one with the mortgage. Finally not all mortgage interest may be deductible. Also, I can't think of any way you'd be able to use the car loan to pay off the mortgage. You wouldn't be able to borrow more than the car is worth, and for a new car it loses quite a bit of value immediately.",
"title": ""
},
{
"docid": "9e814218015e61c473d66135a4cfd495",
"text": "I agree with the deposit part. But if you are buying a new car, the loan term should meet the warranty term. Assuming you know you won't exceed the mileage limits, it's a car with only maintainence costs and the repayment cost at that point.",
"title": ""
},
{
"docid": "a5fd677f5148dd5e154d02cf4ee19ad1",
"text": "Dude- my background is in banking specifically dealing with these scenarios. Take my advice-look for a balance transfer offer-credit card at 0%. Your cost of capital is your good credit, this is your leverage. Why pay 4.74% when you can pay 0%. Find a credit card company with a balance transfer option for 0%. Pay no interest, and own the car outright. Places to start; check the mail, or check your bank, or check local credit unions. Some credit unions are very relaxed for membership, and ask if they have zero percent balance transfers. Good Luck!",
"title": ""
},
{
"docid": "135246342e574893cdb60e72c6d50bf5",
"text": "\"Numbers: Estimate you still owe around 37000 (48500 - 4750, 5% interest, 618 per month payment). Initial price, down payment, payments made - none of these mean anything. Ask your lender, \"\"What is the payoff of the current loan?\"\" Next, sell or trade the current vehicle. Compare to the amount owed. Any shortfall has to be repaid, out of pocket, or in some cases added to the price of the new car and included in the principal of the new loan. You cannot calculate how much you still owe the way you have, because it totally ignores interest. Advice on practicality: Don't do this. You will be upside down even worse on the new car from the instant you drive off the lot. Sell the current vehicle, find a way to pay the difference - one that doesn't involve financing. Cut your losses on the upside down vehicle. Then purchase a new vehicle. I'm in the \"\"Pay cash for gently used\"\" school, YMMV. Another option is to go to your bank. Refinance your car now to get a lower interest rate. Pay as much of the principal as you can. Keep that car until it is paid off. Then you will not be upside down. If you're asking how to use the estimator on the webpage. Put the payoff in the downpayment as a negative and the trade in value in the trade in spot. Expect the payment to go up significantly. Another opinion that might be practical advice. Nothing we say here will convince your financially responsible spouse that this is a good idea.\"",
"title": ""
},
{
"docid": "dc69d3f6e641e3921c55c1180b6158e7",
"text": "\"Following up on @petebelford's answer: If you can find a less expensive loan, you can refinance the car and reduce the total interest you pay that way. Or, if your loan permits it (not all do; talk to the bank which holds the loan and,/or read the paperwork you didn't look at), you may be able to make additional payments to reduce the principal of the loan, which will reduce the amount and duration of the loan and could significantly reduce the total interest paid ... at the cost of requiring you pay more each month, or pay an additional sum up front. Returning the car is not an option. A new car loses a large portion of its value the moment you drive it off the dealer's lot and it ceases to be a \"\"new\"\" car. You can't return it. You can sell it as a recent model used car, but you will lose money on the deal so even if you use that to pay down the loan you will still owe the bank money. Given the pain involved that way, you might as well keep the car and just try to refinance or pay it off. Next time, read and understand all the paperwork before signing. (If you had decided this was a mistake within 3 days of buying, you might have been able to take advantage of \"\"cooling down period\"\" laws to cancel the contract, if such laws exist in your area. A month later is much too late.)\"",
"title": ""
},
{
"docid": "4ac06d29174fb08de0840360fe7e7576",
"text": "If you leave your employer at age 55 or older, you can withdraw with no penalty. Mandatory 20% withholding, but no penalty. You reconcile in April, and may get it all back. If you are sub 55, the option is a Sec 72t withdrawal. The author of the article got it right. I am a fan of his.",
"title": ""
}
] |
fiqa
|
4e7d05d33159ade25c35154d0e528c43
|
How to accurately calculate Apple's EPS
|
[
{
"docid": "5c90ee4ba274fd55bd125b0bc0623285",
"text": "On closer look, it appears that Google Finance relies on the last released 10-k statement (filing date 10/30/2013), but outstanding shares as of last 10-Q statement. Using these forms, you get ($37,037M / 5.989B ) = $6.18 EPS. I think this is good to note, as you can manually calculate a more up to date EPS value than what the majority of investors out there are relying on.",
"title": ""
}
] |
[
{
"docid": "a8ee07f460a8a1fe9480e40afe4f4815",
"text": "Profit after tax can have multiple interpretations, but a common one is the EPS (Earnings Per Share). This is frequently reported as a TTM number (Trailing Twelve Months), or in the UK as a fiscal year number. Coincidentally, it is relatively easy to find the total amount of dividends paid out in that same time frame. That means calculating div cover is as simple as: EPS divided by total dividend. (EPS / Div). It's relatively easy to build a Google Docs spreadsheet that pulls both values from the cloud using the GOOGLEFINANCE() function. I suspect the same is true of most spreadsheet apps. With a proper setup, you can just fill down along a column of tickers to get the div cover for a number of companies at once.",
"title": ""
},
{
"docid": "3d9a087db7ac36a435de1783db63916d",
"text": "\"What you are seeking is termed \"\"Alpha\"\", the mispricing in the market. Specifically, Alpha is the price error when compared to the market return and beta of the stock. Modern portfolio theory suggests that a portfolio with good Alpha will maximize profits for a given risk tolerance. The efficient market hypotheses suggests that Alpha is always zero. The EMH also suggests that taxes, human effort and information propagation delays don't exist (i.e. it is wrong). For someone who is right, the best specific answer to your question is presented Ben Graham's book \"\"The Intelligent Investor\"\" (starting on page 280). And even still, that book is better summarized by Warren Buffet (see Berkshire Hathaway Letters to Shareholders). In a great disservice to the geniuses above it can be summarized much further: closely follow the company to estimate its true earnings potential... and ignore the prices the market is quoting. ADDENDUM: And when you have earnings potential, calculate value with: NPV = sum(each income piece/(1+cost of capital)^time) Update: See http://finance.fortune.cnn.com/2014/02/24/warren-buffett-berkshire-letter/ \"\"When Charlie Munger and I buy stocks...\"\" for these same ideas right from the horse's mouth\"",
"title": ""
},
{
"docid": "237d225e0da24ae0ac9d26ba666568d8",
"text": "i will not calculate it for you but just calculate the discounted cash flow (by dividing with 1.1 / 1.1^2 / 1.1^3 ...)of each single exercise as stated and deduct the 12.000 of the above sum. in the end compare which has the highest npv",
"title": ""
},
{
"docid": "0f3adf4b5a6d10cd96ff4f1b65cca73f",
"text": "P/E can use various estimates in its calculation as one could speculate about future P/E rations and thus could determine a future valuation if one is prepared to say that the P/E should be X for a company. Course it is worth noting that if a company isn't generating positive earnings this can be a less than useful tool, e.g. Amazon in the 1990s lost money every quarter and thus would have had a N/A for a P/E. PEG would use P/E and earnings growth as a way to see if a stock is overvalued based on projected growth. If a company has a high P/E but has a high earnings growth rate then that may prove to be worth it. By using the growth rate, one can get a better idea of the context to that figure. Another way to gain context on P/E would be to look at industry averages that would often be found on Yahoo! Finance and other sites.",
"title": ""
},
{
"docid": "0b2b5a994cca7939cf4143da8b2514a0",
"text": "\"I had both closing price and adjusted price of Apple showing the same amount after \"\"download data\"\" csv file was opened in excel. https://finance.yahoo.com/quote/AAPL/history?period1=1463599361&period2=1495135361&interval=div%7Csplit&filter=split&frequency=1d Its frustrating. My last option was to get the dividends history of the stock and add back to the adjusted price to compute the total return for a select stock for the period.\"",
"title": ""
},
{
"docid": "511fd9fcdff5d9b942b80d3da0ec8b73",
"text": "\"To add to @keshlam's answer slightly a stock's price is made up of several components: the only one of these that is known even remotely accurately at any time is the book value on the day that the accounts are prepared. Even completed cashflows after the books have been prepared contain some slight unknowns as they may be reversed if stock is returned, for example, or reduced by unforeseen costs. Future cashflows are based on (amongst other things) how many sales you expect to make in the future for all time. Exercise for the reader: how many iPhone 22s will apple sell in 2029? Even known future cashflows have some risk attached to them; customers may not pay for goods, a supplier may go into liquidation and so need to change its invoicing strategy etc.. Estimating the risk on future cashflows is highly subjective and depends greatly on what the analyst expects the exact economic state of the world will be in the future. Investors have the choice of investing in a risk free instrument (this is usually taken as being modelled by the 10 year US treasury bond) that is guaranteed to give them a return. To invest in anything riskier than the risk free instrument they must be paid a premium over the risk free return that they would get from that. The risk premium is related to how likely they think it is that they will not receive a return higher than that rate. Calculation of that premium is highly subjective; if I know the management of the company well I will be inclined to think that the investment is far less risky (or perhaps riskier...) than someone who does not, for example. Since none of the factors that go into a share price are accurately measurable and many are subjective there is no \"\"right\"\" share price at any time, let alone at time of IPO. Each investor will estimate these values differently and so value the shares differently and their trading, based on their ever changing estimates, will move the share price to an indeterminable level. In comments to @keshlam's answer you ask if there is enough information to work out the share price if a company buys out the company before IPO. Dividing the price that this other company paid by the relative ownership structure of the firm would give you an idea of what that company thought that the company was worth at that moment in time and can be used as a surrogate for market price but it will not and cannot accurately represent the market price as other investors will value the firm differently by estimating the criteria above differently and so will move the share price based on their valuation.\"",
"title": ""
},
{
"docid": "9ffa2801a53684aa4778439927170236",
"text": "As others have pointed out, the value of Apple's stock and the NASDAQ are most likely highly correlated for a number of reasons, not least among them the fact that Apple is part of the NASDAQ. However, because numerous factors affect the entire market, or at least a significant subset of it, it makes sense to develop a strategy to remove all of these factors without resorting to use of an index. Using an index to remove the effect of these factors might be a good idea, but you run the risk of potentially introducing other factors that affect the index, but not Apple. I don't know what those would be, but it's a valid theoretical concern. In your question, you said you wanted to subtract them from each other, and only see an Apple curve moving around a horizontal line. The basic strategy I plan to use is similar but even simpler. Instead of graphing Apple's stock price, we can plot the difference between its stock price on business day t and business day t-1, which gives us this graph, which is essentially what you're looking for: While this is only the preliminaries, it should give you a basic idea of one procedure that's used extensively to do just what you're asking. I don't know of a website that will automatically give you such a metric, but you could download the price data and use Excel, Stata, etc. to analyze this. The reasoning behind this methodology builds heavily on time series econometrics, which for the sake of simplicity I won't go into in great detail, but I'll provide a brief explanation to satisfy the curious. In simple econometrics, most time series are approximated by a mathematical process comprised of several components: In the simplest case, the equations for a time series containing one or more of the above components are of the form that taking the first difference (the procedure I used above) will leave only the random component. However, if you want to pursue this rigorously, you would first perform a set of tests to determine if these components exist and if differencing is the best procedure to remove those that are present. Once you've reduced the series to its random component, you can use that component to examine how the process underlying the stock price has changed over the years. In my example, I highlighted Steve Jobs' death on the chart because it's one factor that may have led to the increased standard deviation/volatility of Apple's stock price. Although charts are somewhat subjective, it appears that the volatility was already increasing before his death, which could reflect other factors or the increasing expectation that he wouldn't be running the company in the near future, for whatever reason. My discussion of time series decomposition and the definitions of various components relies heavily on Walter Ender's text Applied Econometric Time Series. If you're interested, simple mathematical representations and a few relevant graphs are found on pages 1-3. Another related procedure would be to take the logarithm of the quotient of the current day's price and the previous day's price. In Apple's case, doing so yields this graph: This reduces the overall magnitude of the values and allows you to see potential outliers more clearly. This produces a similar effect to the difference taken above because the log of a quotient is the same as the difference of the logs The significant drop depicted during the year 2000 occurred between September 28th and September 29th, where the stock price dropped from 26.36 to 12.69. Apart from the general environment of the dot-com bubble bursting, I'm not sure why this occurred. Another excellent resource for time series econometrics is James Hamilton's book, Time Series Analysis. It's considered a classic in the field of econometrics, although similar to Enders' book, it's fairly advanced for most investors. I used Stata to generate the graphs above with data from Yahoo! Finance: There are a couple of nuances in this code related to how I defined the time series and the presence of weekends, but they don't affect the overall concept. For a robust analysis, I would make a few quick tweaks that would make the graphs less appealing without more work, but would allow for more accurate econometrics.",
"title": ""
},
{
"docid": "28b4a52c78c6630c2d2de10107e6b9eb",
"text": "I'm not sure i understand the strategy of going upmarket so fast. If this is right it will be a 25% increase which is a lot. Apple isn't hurting for profits and most of their growth is in services, which depend on a large install base. Premium is fine, but going luxury seems counter-productive.",
"title": ""
},
{
"docid": "6d710ce4d7a4275036f7b4a3cce5a07e",
"text": "\"The best place to start looking is the companies \"\"Balance Sheet\"\" (B/S). This would show you the total shares \"\"outstanding.\"\" The quarterly B/S's arent audited but a good starting point. To use in any quant method, You also need to look a growth the outstanding shares number. Company can issue shares to any employee without making a filing. Also, YOU will NEVER know exactly the total number because of stock options that are issued to employees that are out of the money arent account for. Some companies account for these, some dont. You should also explore the concepts of \"\"fully dilute\"\" shares and \"\"basis\"\" shares. These concepts will throw-off your calc if the company has convertible bonds.\"",
"title": ""
},
{
"docid": "f23b2797867eb8b76bf95504624c9fbc",
"text": "\"A Bloomberg terminal connected to Excel provides the value correcting splits, dividends, etc. Problem is it cost around $25,000. Another one which is free and I think that takes care of corporate action is \"\"quandl.com\"\". See an example here.\"",
"title": ""
},
{
"docid": "550a87849ede22f46d68fc8a9722b6d3",
"text": "\"You asked 3 questions here. It's best to keep them separate as these are pretty distinct, different answers, and each might already have a good detailed answer and so might be subject to \"\"closed as duplicate of...\"\" That said, I'll address the JAGLX question (1). It's not an apples to apples comparison. This is a Life Sciences fund, i.e. a very specialized fund, investing in one narrow sector of the market. If you study market returns over time, it's easy to find sectors that have had a decade or even two that have beat the S&P by a wide margin. The 5 year comparison makes this pretty clear. For sake of comparison, Apple had twice the return of JAGLX during the past 5 years. The advisor charging 2% who was heavy in Apple might look brilliant, but the returns are not positively correlated to the expense involved. A 10 or 20 year lookback will always uncover funds or individual stocks that beat the indexes, but the law of averages suggests that the next 10 or 20 years will still appear random.\"",
"title": ""
},
{
"docid": "f4ea07c1d545d71f26856ad9d46c4ed8",
"text": "Outside of software that can calculate the returns: You could calculate your possible returns on that leap spread as you ordinarily would, then place the return results of that and the return results for the covered call position side by side for any given price level of the stock you calculate, and net them out. (Netting out the dollar amounts, not percentage returns.) Not a great answer, but there ya go. Software like OptionVue is expensive",
"title": ""
},
{
"docid": "420682ca10f90e896ec85db9f666cf3a",
"text": "Not quite. The EPS is noted as ttm, which means trailing twelve months --- so the earnings are taken from known values over the previous year. The number you quote as the dividend is actually the Forward Annual Dividend Rate, which is an estimate of the future year's dividends. This means that PFE is paying out more in the coming year (per share) than it made in the previous year (per share).",
"title": ""
},
{
"docid": "07a921214f64cac481e46f2455f46acd",
"text": "It is a good enough approximation. With a single event you can do it your way and get a better result, but imagine that the $300 are spread over a certain period with $10 contribution each time? Then recalculating and compounding will be a lot of work to do. The original ROI formula is averaging the ROI by definition, so why bother with precise calculations of averages that are imprecise by definition, when you can just adjust the average without losing the level of precision? 11.4 and 11.3 aren't significantly different, its immaterial.",
"title": ""
},
{
"docid": "fba69109c372ce3a7f882968dd7b3e36",
"text": "Note that your link shows the shares as of March 31, 2016 while http://uniselect.com/content/files/Press-release/Press-Release-Q1-2016-Final.pdf notes a 2-for-1 stock split so thus you have to double the shares to get the proper number is what you are missing. The stock split occurred in May and thus is after the deadline that you quoted.",
"title": ""
}
] |
fiqa
|
bb5ab3cf1cd1fcef16c564e63c9a6f76
|
Titles, Financing and Insurance. How do they work?
|
[
{
"docid": "88fe24cde05bf585956540896d85f314",
"text": "There is nothing illegal about a vehicle being in one person's name and someone else using it. An illegal straw purchase usually applies to something where, for example, the purchaser is trying to avoid a background check (as with firearms) or is trying to hide assets, so they use someone else to make the purchase on their behalf to shield real ownership. As for insurance, there's no requirement for you to own a vehicle in order to buy insurance so that you can drive someone else's vehicle. In other words, you can buy liability coverage that applies to any vehicle you're operating. The long and short of it here is that you're not doing anything illegal or otherwise improper,but I give you credit for having the good morals for wanting to make sure you're doing the right thing.",
"title": ""
}
] |
[
{
"docid": "2f4bc315f09f7f8e774ac7636da8583a",
"text": "\"One way to look at insurance is that it replaces an unpredictable expenses with a predictable fees. That is, you pay a set monthly amount (\"\"premium\"\") instead of the sudden costs associated with a collision or other covered event. Insurance works as a business, which means they intend to make a substantial profit for providing that service. They put a lot of effort in to measuring probabilities, and carefully set the premiums to get make a steady profit*. The odds are in their favor. You have to ask yourself: if X happened tomorrow, how would I feel about the financial impact? Also, how much will it cost me to buy insurance to cover X? If you have a lot of savings, plenty of available credit, a bright financial future, and you take the bus to work anyway, then totaling your car may not be a big deal, money wise. Skip the insurance. If you have no savings, plenty of debt, little prospects for that improving, and you depend on your car to get to work just so you can pay what you already owe, then totaling your car would probably be a big problem for you. Stick with insurance. There is a middle ground. You can adjust your deductible. Raise it as high as you can comfortably handle. You cover the small stuff out of pocket, and save the insurance for the big ticket items. *Insurance companies also invest the money they take as premiums, until they pay out a claim. That's not relevant to this discussion, though.\"",
"title": ""
},
{
"docid": "98745389a9c404c24dae73985ec90c7c",
"text": "Generally, no. A mortgage is a lien against the property, which allows the bank to exercise certain options, primarily Power of Sale (Force you to sell the property) and outright seizure. In order to do this, title needs to be clear, which it isn't if you have half title. However, if you have a sales agreement, you can buy your brother's half, and then mortgage the entire property. This happens all the time. When you buy a house from someone, you get pre-approved for that house, which, at the time, you have no title to. Through some black magic lawyering and handwaving, this is all sorted out at closing time.",
"title": ""
},
{
"docid": "1b45c7e6a0aa16d13a1411268ae1350b",
"text": "An auto title loans are typically utilized by those that wish to obtain a funding with bad credit rating or no credit in any way. An auto-mobile title lending frequently called a vehicle title lending or merely title funding as well as pink slip funding’s. You merely should have a vehicle that is paid off or nearly paid off and also you could make use of the auto title as security to obtain the cash money you require, enabling you to continue driving your vehicle while paying your loan. Get Auto Car Title Loans Torrance CA and nearby cities Provide Car Title Loans, Auto Title Loans, Mobile Home Title Loans, RV/Motor Home Title Loans, Big Rigs Truck Title Loans, Motor Cycle Title Loans, Online Title Loans Near me, Bad Credit Loans, Personal Loans, Quick cash Loans Contact Us: Get Auto Car Title Loans Torrance CA 1148 W Clarion Dr, Torrance, CA 90502 Phone : 424-306-1531 Email : [email protected] http://getautotitleloans.com/car-and-auto-title-loans-torrance-ca",
"title": ""
},
{
"docid": "52fc427159b58caa5be7a0b7f7f92bb0",
"text": "Credit scores, or at least components of them, can sometimes factor into how much you pay for car insurance. Source: Consumer Reports: How a Credit Score Increases your Premium",
"title": ""
},
{
"docid": "a3efdae079a71be2801384b71cb0c248",
"text": "TL;DR: Only term is pure insurance and is the cheapest. The rest are mixtures of insurance and savings/investment. Typically the mixtures are not as efficient as doing it yourself, except that there can be tax advantages as well as the ability to borrow from your policy in some cases.",
"title": ""
},
{
"docid": "5a8c4854be19e35e58b3c48e6c3c73c5",
"text": "In the case of a vehicle with a lien, there is a specific place on the title to have a lien holder listed, and the holder of the lien will also hold the title until the lien is cleared. Usually this means you have to pay off the loan when you purchase the vehicle. If that loan is held by a bank, meet the seller at the bank and pay the loan directly with them and have them send the title directly to you when the loan is paid. This usually involves writing up a bill of sale to give to the bank when paying the loan. The only thing you're trying to avoid here is paying cash to the seller--who then keeps the cash without paying the lien holder--who then keeps the title and repossesses the motorcycle. Don't pay the seller if they don't have the title ready to sign over to you.",
"title": ""
},
{
"docid": "30f16531b7454d3d187e72c0f44fc93f",
"text": "\"—they will pull your credit report and perform a \"\"hard inquiry\"\" on your file. This means the inquiry will be noted in your credit report and count against you, slightly. This is perfectly normal. Just don't apply too many times too soon or it can begin to add up. They will want proof of your income by asking for recent pay stubs. With this information, your income and your credit profile, they will determine the maximum amount of credit they will lend you and at what interest rate. The better your credit profile, the more money they can lend and the lower the rate. —that you want financed (the price of the car minus your down payment) that is the amount you can apply for and in that case the only factors they will determine are 1) whether or not you will be approved and 2) at what interest rate you will be approved. While interest rates generally follow the direction of the prime rate as dictated by the federal reserve, there are market fluctuations and variances from one lending institution to the next. Further, different institutions will have different criteria in terms of the amount of credit they deem you worthy of. —you know the price of the car. Now determine how much you want to put down and take the difference to a bank or credit union. Or, work directly with the dealer. Dealers often give special deals if you finance through them. A common scenario is: 1) A person goes to the car dealer 2) test drives 3) negotiates the purchase price 4) the salesman works the numbers to determine your monthly payment through their own bank. Pay attention during that last process. This is also where they can gain leverage in the deal and make money through the interest rate by offering longer loan terms to maximize their returns on your loan. It's not necessarily a bad thing, it's just how they have to make their money in the deal. It's good to know so you can form your own analysis of the deal and make sure they don't completely bankrupt you. —is that you can comfortable afford your monthly payment. The car dealers don't really know how much you can afford. They will try to determine to the best they can but only you really know. Don't take more than you can afford. be conservative about it. For example: Think you can only afford $300 a month? Budget it even lower and make yourself only afford $225 a month.\"",
"title": ""
},
{
"docid": "ebabd902716bbf0983b8ae1099f85512",
"text": "\"Okay, definitive answer for this particular company (Toyota Finance) is (somewhat surprisingly, and glad I asked) it must be fully insured at all times, including liability, even if being stored. I asked at a dealership and they answered \"\"just fire and theft (of course)\"\" but I ended up calling their finance department and the answer was the opposite. So there you go. Thanks for the answers (and for trying to talk me out of wasting money).\"",
"title": ""
},
{
"docid": "9d332653860a7508927301669b5da3c8",
"text": "You don't have to use an agent (broker, as you call it), but it is strongly advised. In some counties lawyers are required, in some not. Check your local requirements. Similarly the escrow companies that usually deal with recording and disbursing of money. You will probably not be able to get a title insurance without using an escrow service (I'm guessing here, but it makes sense to me). You will not be able to secure financing through a bank or a mortgage broker without an escrow company, and it might be hard without an agent. Agents required by law to know all the details of the process, and they can guide you through what to do and what to look into. They have experience reading and understanding the inspection reports, they know what to demand from the seller (disclosures, information, etc), they know how and from where to get the HOA docs and disclosures, and can help you negotiate the price knowing the market information (comparable sales, comparable listings, list vs sales statistics, etc). It is hard to do all that alone, but if you do - you should definitely get a discount over the market price of the property of about 5% (the agents' fees are up to 5% mostly). I bought several properties in California and in other states, and I wouldn't do it without an agent on my side. But if you trust the other side entirely and willing to take the risk of missing a step and having problems later with title, mortgage, insurance or resale, then you can definitely save some money and do it without an agent, and there are people doing that.",
"title": ""
},
{
"docid": "e17ffc2a0f6e9a51037f2a78ea0f3f8a",
"text": "Title agencies perform several things: Research the title for defects. You may not know what you're looking at, unless you're a real-estate professional, but some titles have strings attached to them (like, conditions for resale, usage, changes, etc). Research title issues (like misrepresentation of ownership, misrepresentation of the actual property titled, misrepresentation of conditions). Again, not being a professional in the domain, you might not understand the text you're looking at. Research liens. Those are usually have to be recorded (i.e.: the title company won't necessarily find a lien if it wasn't recorded with the county). Cover your a$$. And the bank's. They provide title insurance that guarantees your money back if they missed something they were supposed to find. The title insurance is usually required for a mortgaged transaction. While I understand why you would think you can do it, most people cannot. Even if they think they can - they cannot. In many areas this research cannot be done online, for example in California - you have to go to the county recorder office to look things up (for legal reasons, in CA counties are not allowed to provide access to certain information without verification of who's accessing). It may be worth your while to pay someone to do it, even if you can do it yourself, because your time is more valuable. Also, keep in mind that while you may trust your abilities - your bank won't. So you may be able to do your own due diligence - but the bank needs to do its own. Specifically to Detroit - the city is bankrupt. Every $100K counts for them. I'm surprised they only charge $6 per search, but that is probably limited by the State law.",
"title": ""
},
{
"docid": "e49810044068601d5e562c156a09e65c",
"text": "\"The best solution is to \"\"buy\"\" the car and get your own loan (like @ChrisInEdmonton answered). That being said, my credit union let me add my spouse to a title while I still had a loan for a title filing fee. You may ask the bank that holds the title if they have a provision for adding someone to the title without changing the loan. Total cost to me was an afternoon at the bank and something like $20 or $40 (it's been a while).\"",
"title": ""
},
{
"docid": "be816d3b043c56037b73e0fd3e97e7a6",
"text": "There are two scenarios that I see. You have a mortgage on the property. Generally the insurance company sends the funds to the lender, who then releases the funds to you as you make the repairs. They do it this way because if you never make the repairs the value of the collateral is decreased, and the lender wants to protect their investment. There is no mortgage. You will get the funds directly, and the insurance company will not force you to make the repairs especially if the repairs are cosmetic in nature. In either case if you don't fix the cause of the leak, and make repairs to the site around the leak, you will run into a problem in the future if the leak continues, or the rot and mold continues to spread. If you file a future claim they are likely to ask for proof of the original repair. If you didn't make it, they are likely to deny the second claim. They will say the cause is the original incident and if you had made the repair, the second incident wouldn't have happened. They are likely to drop you at that point. If you try to sell the house you will have to disclose the original leak, and the potential buyers will want you to make the repairs. Any mold or rot spotted by the home inspector will be a big issue for them. It is also likely to be an item that they will be advised to demand that you get a legitimate company to make the repair before the deal can move forward, and won't negotiate a lower price or a credit for $x so they can get the repair done. Some will just cancel the deal based on the inspection report.",
"title": ""
},
{
"docid": "06ff1a68b432456d3375a7be0a7c84fa",
"text": "When I bought the house I had my lawyer educate me about everything on the forms that seemed at all unclear, since this was my first time thru the process. On of the pieces of advice that he gave was that title insurance had almost no value in this state unless you had reason to believe the title might be defective but wanted to buy the property anyway. In fact I did get it anyway, as an impulse purchase -- but I'm fully aware that it was a bad bet. Especially since I had the savings to be able to self-insure, which is always the better answer if you can afford to risk the worst case scenario. Also: Ask the seller whether they bought title insurance. Often, it is transferrable at least once.",
"title": ""
},
{
"docid": "3eec08f53ddb437a4e142b74fbd3492f",
"text": "Is your name on the title at all? You may have (slightly) more leverage in that case, but co-signing any loans is not a good idea, even for a friend or relative. As this article notes: Generally, co-signing refers to financing, not ownership. If the primary accountholder fails to make payments on the loan or the retail installment sales contract (a type of auto financing dealers sell), the co-signer is responsible for those payments, or their credit will suffer. Even if the co-signer makes the payments, they’re still not the owner if their name isn’t on the title. The Consumer Finance Protection Bureau (CFPB) notes: If you co-sign a loan, you are legally obligated to repay the loan in full. Co-signing a loan does not mean serving as a character reference for someone else. When you co-sign, you promise to pay the loan yourself. It means that you risk having to repay any missed payments immediately. If the borrower defaults on the loan, the creditor can use the same collection methods against you that can be used against the borrower such as demanding that you repay the entire loan yourself, suing you, and garnishing your wages or bank accounts after a judgment. Your credit score(s) may be impacted by any late payments or defaults. Co-signing an auto loan does not mean you have any right to the vehicle, it just means that you have agreed to become obligated to repay the amount of the loan. So make sure you can afford to pay this debt if the borrower cannot. Per this article and this loan.com article, options to remove your name from co-signing include: If you're name isn't on the title, you'll have to convince your ex-boyfriend and the bank to have you removed as the co-signer, but from your brief description above, it doesn't seem that your ex is going to be cooperative. Unfortunately, as the co-signer and guarantor of the loan, you're legally responsible for making the payments if he doesn't. Not making the payments could ruin your credit as well. One final option to consider is bankruptcy. Bankruptcy is a drastic option, and you'll have to weigh whether the disruption to your credit and financial life will be worth it versus repaying the balance of that auto loan. Per this post: Another not so pretty option is bankruptcy. This is an extreme route, and in some instances may not even guarantee a name-removal from the loan. Your best bet is to contact a lawyer or other source of legal help to review your options on how to proceed with this issue.",
"title": ""
},
{
"docid": "93b4633bc4b31002b95efa381173b0bd",
"text": "Ordinarily a cosigner does not appear on the car's title (thus, no ownership at all in the vehicle), but they are guaranteeing payment of the loan if the primary borrower does not make the payment. You have essentially two options: Stop making payments for him. If he does not make them, the car will be repossessed and the default will appear on both his and your credit. You will have a credit ding to live with, but he will to and he won't have the car. Continue to make payments if he does not, to preserve your credit, and sue him for the money you have paid. In your suit you could request repayment of the money or have him sign over the title (ownership) to you, if you would be happy with either option. I suspect that he will object to both, so the judge is going to have to decide if he finds your case has merit. If you go with option 1 and he picks up the payments so the car isn't repossessed, you can then still take option 2 to recover the money you have paid. Be prepared to provide documentation to the court of the payments you have made (bank statements showing the out-go, or other form of evidence you made the payment - the finance company's statements aren't going to show who made them).",
"title": ""
}
] |
fiqa
|
7372b0d958c76372422edcf464dbb5c1
|
Is there a law or regulation that governs the maximum allowable interest amount that can be charged on credit cards or in agreements where credit is extended?
|
[
{
"docid": "6c2be61b4dd39f764447cdfd9a1e2526",
"text": "The word you're looking for is usury - the crime of lending money at rates above an amount set by law.",
"title": ""
},
{
"docid": "15fd5a238ccc43822493b9417a03bef2",
"text": "In Canada section 347 of the Canadian Criminal Code makes it illegal to charge more than 60% annually. Since most Canadian credit card annual interest fee is below this they are within that legal limit. However this is limited only to the rate and not necessarily a cap on the absolute interest charges.",
"title": ""
},
{
"docid": "298f97b87a3217ca3f460febf647f8ea",
"text": "In the U.S., each state has its own local usury law. This website has a separate page for each state summarizing the local usury law and provides a reference to the local statute. The rules aren't simple: some set absolute limits, some appear to be pegged to something like the Prime Rate, some states don't have a general usury limit, the rules don't apply to certain loans because of the type of loan or lender, etc. There are US Federal laws dealing with usury, primarily in the context of racketeering -- the RICO Act lets the Feds go after racketeers that violate local usury laws beyond certain parameters.",
"title": ""
},
{
"docid": "5613ca427dabaf93781b5960043945ed",
"text": "\"In the US, usury is complicated and depends on the type of account, the bank charter and the where the bank makes credit decisions. Most major US credit cards are issued by entities in Utah, South Dakota and Delaware. None of these states have usury limits. Many states have usury limits. In New York, for example a loan may not exceed 16% interest, if the institution is supervised by the State. Credit card issuers are usually chartered as \"\"National Associations\"\" (ie Federally chartered banks regulated by the Comptroller of the Currency). There is no Federal usury statute, and Federally chartered banks are allowed to \"\"export\"\" many of the regulations of the state where credit decisions are made. Small states like South Dakota basically design their banking regulations to meet the needs of the banks, which are major employers.\"",
"title": ""
},
{
"docid": "2d1106c71509b39ca1325195f7c06a42",
"text": "What are those maximums, and do all countries have them? Usury, lending money for any interest at all, used to be anti-biblical: it wasn't a Christian thing to do, and so in Christian countries it was Jews who did it (Jews who were money-lenders). Asking for interest on loans is still anti-Koranic: so Islamic banks don't lend money for interest. Instead of your getting a mortgage from the bank to buy a house, the bank will buy the house, which you then buy from bank on a rent-to-own basis. Further details:",
"title": ""
},
{
"docid": "55a4f389f97a24cc60821597a105d24a",
"text": "In the EU, you might be looking for Directive 2000/35/EC (Late Payment Directive). There was a statutory rate, 7% above the European Central Bank main rate. However, this Directive was recently repealed by Directive 2011/7/EU, which sets the statutory rate at ECB + 8%. (Under EU regulations, Directives must be turned into laws by national governments, which often takes several months. So in some EU countries the local laws may still reflect the old Directive. Also, the UK doesn't participate in the Euro, and doesn't follow the ECB rate)",
"title": ""
}
] |
[
{
"docid": "48571487f645277a8ba23153aef55d3a",
"text": "\"I'm not sure if the rules in Canada and the US are the same. I'm as amazed as you are by the amounts of debts people have, but I can see how this credit can be extended. Generally, with good credit history and above average pay - it is not unheard of to get about $100K credit limit with a bunch of credit cards. What you do with that after that depends on your own ability to manage your finances and discipline. Good credit history is defined by paying your credit cards on time with at least minimum payment amount (which is way lower than the actual statement amount). Above average pay is $60K+. So you can easily have tons of debt, yet be considered \"\"low risk\"\" with good credit history. And that's the most lucrative market for the credit card issuers - people who do not default, but also have debt and pay interest.\"",
"title": ""
},
{
"docid": "d145cb58025d07fff4622110a9142fbb",
"text": "Just to put in one more possibility: my credit card can have a positive balance, in which case I earn interest. If more money is due, it will automatically take that from the connected checking account. If that goes into negative, of course I have to pay interest. I chose (argued with the bank in order to get) only a small credit allowance. However, I'll be able to access credit allowance + positive balance. That allows me within a day or so to make larger amounts accessible, while the possible immediate damage by credit card fraud is limited at other times. Actually, the credit card pays more interest than the checkign account. Nevertheless, I don't keep high balance there because the risk of fraud is much higher for the credit card.",
"title": ""
},
{
"docid": "2fd09b10078171bba36eadd0d1d691d9",
"text": "\"Charging interest by non financial institutions is allowable. There is only one definition of illegal or criminal interest and this is regarding loan sharks. Section 347 of the Canadian Criminal Code makes it illegal to charge more than 60% annually. The biggest debate was whether or not \"\"pay day\"\" loan companies were breaking the law. The recent bill C-26 amends this section to exempt \"\"pay day\"\" loans from this definition.\"",
"title": ""
},
{
"docid": "c7b257f2709405b41df0a6ea0a3eacf7",
"text": "Yes. it is possible, I have seen many times banks permitting overdrawing and later charging a high courtesy fees. Of course in many countries this is not permitted. In one of my account, I am running negative balance as the bank has charged its commission which is not due.",
"title": ""
},
{
"docid": "12e3eca26acd6ac18e2b9214cc243715",
"text": "a typical debit card is subject to several limits:",
"title": ""
},
{
"docid": "334bff4f28f783af0492485b984f5c1e",
"text": "I'm in the US, and I can't speak for all credit cards, but I have done this in the past. I've paid extra on my credit card, and had a positive balance on my credit card account. The purchases made after paying extra were applied to the balance, and if there was money left over on the statement closing date, I didn't owe anything that month. Of course, I didn't incur any interest charges, but I never pay interest anyway, as I always pay my statement in full each month and never take a cash advance on my credit card. You could call your credit card company and ask them what will happen, or if you are feeling adventurous, you could just send them some extra money and see what happens. Most likely, they will just apply it to your account and give you a positive balance.",
"title": ""
},
{
"docid": "ba5b7274a04a768d3faedd8fe82590a8",
"text": "I've got a card that I've had for about 25 years now. The only time they charged me interest I showed it was their goof (the automatic payment failed because of their mistake) and they haven't cancelled it. No annual fee, a bit of cash back. The only cards I've ever had an issuer close are ones I didn't use.",
"title": ""
},
{
"docid": "9b57b79376f59df43a6a51ee2b861ac6",
"text": "A credit card is essentially a contract where they will loan you money in an on demand basis. It is not a contract for you to loan them money. The money that you have overpaid is generally treated as if it is a payment for a charge that you have made that has not been processed yet. The bank can not treat that money as a deposit and thus leverage it make money them selves. You can open an account and get a debit card. This would allow you to accrue interest for your deposit while using your money. But if you find one willing to pay you 25% interest please share with the rest of us :)",
"title": ""
},
{
"docid": "c4fe26e16c35821b744bb322c63f1807",
"text": "\"The interest rate is determined by your 401(k) provider and your plan document. Of course you may be able to influence this, depending on your relationship with the provider. I'm very certain that prime+1% is not the only rate that is possible. However, your provider is constrained by IRC 4975(d), which states that the loan must be made \"\"at a reasonable rate of interest.\"\" The definition of \"\"reasonable rate of interest\"\" would probably need to go to court and I do not know if it has. The IRS probably has internal guidelines that determine who gets thrown to the dogs but they would not make those public because it takes away their discretion. Because of the threat of getting pounded by the IRS, I think you will have a hard time getting a provider to allow super high or super low interest rate loans. Note: I am not a lawyer.\"",
"title": ""
},
{
"docid": "cec404b25b1a09b02f312007d5d907d9",
"text": "\"I'm not sure that OP was asking if he/she personally should have more available credit, so I will answer the other interpretation: should that particular card have a higher limit? The answer is \"\"no.\"\" The range varies vastly by issuer. Starting limits vary widely from issuer to issuer even with identical credit histories. Some issuers never automatically increase the limit, some periodically conduct account reviews to determine if an increase is warranted. Some like to see higher spending habits each month. Personally, my cards range from $500 to $25000, and the high and low extremes are the same age. You can search for tips on how often to request increases for your particular card, or what kind of spending habits the issuer prefers. An important note: You do not need to carry a balance to make the issuer happy. You never need to pay a cent in credit card interest.\"",
"title": ""
},
{
"docid": "013e7bbdcf2f60f8c14ed6aeb7d90a95",
"text": "\"This is most likely protecting Square's relationship with Visa/Mastercard/AMEX/etc. Credit card companies typically charge their customers a much higher interest rate with no grace period on cash advances (withdrawals made from an ATM using a credit card). If you use Square to generate something that looks like a \"\"merchandise transaction\"\" but instead just hand over a wad of banknotes, you're forcing the credit card company to apply their cheaper \"\"purchases\"\" interest rate on the transaction, plus award any applicable cashback offers†, etc. Square would absolutely profit off of this, but since it would result in less revenue for the partner credit card companies, that would quickly sour the relationship and could even result in them terminating their agreements with Square altogether. † This is the kind of activity they are trying to prevent: 1. Bill yourself $5,000 for \"\"merchandise\"\", but instead give yourself cash. 2. Earn 1.5% cashback ($75). 3. Use $4,925 of the cash and a $75 statement credit to pay your credit card statement. 4. Pocket the difference. 5. Repeat. Note, the fees involved probably negate any potential gain shown in this example, but I'm sure with enough creative thinking someone would figure out a way to game the system if it wasn't expressly forbidden in the terms of service\"",
"title": ""
},
{
"docid": "29d14308ca1707942c0fe3a844c420fe",
"text": "I did just what you suggest. The card company honored the charge, they told me the temporary number was solely for the purpose of assigning a number to one vendor/business. So even though I set a low limit, the number was still active and the card company paid the request. Small price to pay, but it didn't go as I wished. For this purpose, I've used Visa/Mastercard gift cards. They are often on sale for face value and no additional fees.",
"title": ""
},
{
"docid": "40f9e55d3cf2caa66995bade903e3711",
"text": "Contrary to what many people think, credit card companies pass nearly all fraud costs via purchased goods onto the merchant who sells them. As a result, they stand a very high chance of getting the money from a fraudulent purchase of a specific purchased item back, as they just chargeback the merchant who has to stomach the cost. This is not the case for cash transactions obviously, where as soon as the money leaves the ATM fraudulently it is as good as gone. As a result, the risk profile of the two types of transaction is wildly different, and the credit limits of each reflect this.",
"title": ""
},
{
"docid": "478adaae85ab5fdaad5bde665aeb4c65",
"text": "The minimum amount is set by the merchant services provider based on the kind of business, its location and the history. It mostly has nothing to do with you personally. However, the minimum amount differs based on the kind of credit cards being used. For example, foreign credit cards will require signatures on much lower amounts than domestic. In my local Safeway (NoCal analog of Ralph's) the limit for domestic credit cards is set at $50. If your credit limit is $5000, you might think that its a 1% of your limit. But if your limit is $50000 or $500 - it will still be $50. You cannot deduce anything about a specific person's credit situation based on whether or not they are required to sign the receipt. It has no affect on the decision.",
"title": ""
},
{
"docid": "2f8f990af90faba58a954153cb31db3a",
"text": "\"There are some loan types where your minimum payment may be less than the interest due in the current period; this is not true of credit cards in the US. Separately, if you have a minimum payment amount due of less than the interest due in the period, the net interest amount would just become principal anyway so differentiating it isn't meaningful. With credit cards in the US, the general minimum calculation is 1% of the principal outstanding plus all interest accrued in the period plus any fees. Any overpayment is applied to the principal outstanding, because this is a revolving line of credit and unpaid interest or fees appear as a charge just like your coffee and also begin to accrue interest. The issue arises if you have multiple interest rates. Maybe you did a balance transfer at a discounted interest rate; does that balance get credited before the balance carried at the standard rate? You'll have to call your lender. While there is a regulation in place requiring payment to credit the highest rate balance first the banks still have latitude on how the payment is literally applied; explained below. When there IS an amortization schedule, the issue is not \"\"principal or interest\"\" the issue is principle, or the next payment on the amortization schedule. If the monthly payment on your car loan is $200, but you send $250, the bank will use the additional $50 to credit the next payment due. When you get your statement next month (it's usually monthly) it will indicate an amount due of $150. When you've prepaid more than an entire payment, the next payment is just farther in to the future. You need to talk to your lender about \"\"unscheduled\"\" principal payments because the process will vary by lender and by specific loan. Call your lender. You are a customer, you have a contract, they will explain this stuff to you. There is no harm that can possibly come from learning the nuances of your agreement with them. Regarding the nuance to the payment regulation: A federal credit card reform law enacted in May 2009 requires that credit card companies must apply your entire payment, minus the required minimum payment amount, to the highest interest rate balance on your card. Some credit card issuers are aggressive here and apply the non-interest portion of the minimum payment to the lowest interest rate first. You'll need to call your bank and ask them.\"",
"title": ""
}
] |
fiqa
|
e0b014ae6fa89fce44e4f31e49a3ba9a
|
Am I liable for an auto accident if I'm a cosigner but not on the title, registration, or insurance policy?
|
[
{
"docid": "c43bf8198551d6607907f3ceef5ccb46",
"text": "You can be sued if some random stranger that you never had any interaction with gets in an accident. There is really no barrier to people suing you if they get it in their head that they want to. Winning that lawsuit is another matter entirely. Whether you would be held liable and lose the lawsuit depends on whether someone can convince a court that you are partially responsible for a financial loss. Not sure how anyone could possibly successfully argue that in this situation.",
"title": ""
},
{
"docid": "9b1152fdf8f30f8d0a612bb1a60bffda",
"text": "I am sure that laws differ from state to state. My brother and I had to take over my dads finances due to his health. He had a vehicle that had a loan on it. We refinanced the vehicle and it was in our name. One of our family members needed a vehicle and offered to take over the payment. Our attorney advised us to be on the insurance policy with them and make sure if was paid correctly. We are in Indiana. I know it is hard to discuss finances with family members. However, if you co-signed the loan I think it would be wise to either have your name added to the insurance policy or at least have your brother show proof it has been paid. If you are not comfortable with that it may be a good idea to make sure the bank has your correct address and ask if they would notify you if insurance has lapsed. If your on the loan and there is no insurance at the very least if the vehicle was damaged you would still be responsible to pay the loan.",
"title": ""
},
{
"docid": "5c7bcbcad56ca8d6bf751bb0c689da17",
"text": "It might be possible to sue you successfully if someone brought evidence that your brother was absolutely totally unsuitable to drive a car because of some character flaw, and without your financial help he wouldn't have been able to afford a car. So helping a brother to buy a car, if that brother is a drinking alcoholic, or has only a faked driver's license and you know it, that could get you into trouble. A not unsimilar situation: A rental car company could probably be sued successfully if they rented a car to someone who they knew (or maybe should have known) was disqualified from driving and that person caused an accident.",
"title": ""
}
] |
[
{
"docid": "1a9a715a99e75fda4a54ce531c8a5a61",
"text": "'If i co-sign that makes me 100% liable if for any reason you can't or won't pay. Also this shows up on a credit report just like it's my debt. This limits the amount i can borrow for any reason. I don't want to take on your debt, that's your business and i don't want to make it mine'.",
"title": ""
},
{
"docid": "79febff37005fe840f1be5912c0f914c",
"text": "\"You say Also I have been the only one with an income in our household for last 15 years, so for most of our marriage any debts have been in my name. She has a credit card (opened in 1999) that she has not used for years and she is also a secondary card holder on an American Express card and a MasterCard that are both in my name (she has not used the cards as we try to keep them only for emergencies). This would seem to indicate that the dealer is correct. Your wife has no credit history. You say that you paid off her student loans some years back. If \"\"some years\"\" was more than seven, then they have dropped off her credit report. If that's the most recent credit activity, then she effectively has none. Even if you get past that, note that she also doesn't have any income, which makes her a lousy co-signer. There's no real circumstance where you couldn't pay for the car but she could based on the historical data. She would have to get a job first. Since they had no information on her whatsoever, they probably didn't even get to that.\"",
"title": ""
},
{
"docid": "58d6c18a52088f40b5002b373f456cae",
"text": "If you leave without having met all the obligations in the contract they could sue you for the money. The size of the company may mean that they are experienced in collecting their debts. The insurance they made you pay for, may pay them back if they meet all the requirements in the policy. That means that you will have to read the terms of the policy to see if the insurance company will come after you for the losses. It is likely that your skipping out early while owing money will be attached to your credit history without your SSN.",
"title": ""
},
{
"docid": "500a2e4390c95d1355fd370b677acfd3",
"text": "Possession is 9/10 of the law, and any agreement between you and your grandfather is covered under the uniform commercial code covering contracts. As long as your fulfilling your obligation of making payments, the contract stands as originally agreed upon between you and the lender. In short, the car is yours until you miss payments, sell it, or it gets totalled. The fact that your upside down on value to debt isn't that big of a deal as long as you have insurance that is covering what is owed.",
"title": ""
},
{
"docid": "2a144d63955b35b8c135bb698e0e8128",
"text": "Regarding auto insurance, you have to look at the different parts. In the United Sates most states do require a level of specific coverage for all drivers. That is to make sure that if you are at fault there is money available to pay the victims. That payment may be for damage to their car or other property, but it also covers medical costs. Many policies also cover you if the other driver doesn't have insurance. The policy that covers the loss of the vehicle is required if you have a loan or are leasing the car. Somebody else owns it while there is a loan, so they can and do require you to pay to protect the vehicle. If there i no loan you don't have to have that portion of a policy. Other parts such as towing, roadside assistance, and rental cars replacement may be required by the insurance standards for your state, or might be almost impossible to drop because all insurance companies include it to stay competitive with their competition. Dropping the non-required parts of the coverage is acceptable when you don't have a loan. Some people do drop it to save money. But that does mean you are self insuring. If you can afford to self insure a new car, great. The interesting thing is that some people have more than enough assets to self inure the non-required part of auto insurance. But then they realize that they do need to up their umbrella liability insurance. This is to protect them from somebody deciding that their resources make them a tempting target when they are involved in a collision.",
"title": ""
},
{
"docid": "f6d6d867df18c46705aed93236a501c2",
"text": "\"In terms of how to make your decision, here are some considerations. Comprehensive insurance often covers other perils besides collision, including fire, theft, hail or other weather damage, additional liability coverage etc. It may be worth looking at your specific policy to see what is covered. No matter what you do, make sure you have some form of personal liability coverage in case you are sued (doesn't necessarily need to be through the auto policy). While it can make financial sense to drop comprehensive coverage once you can afford to self-insure against collision, this will only be the case if you are certain that you can set aside dedicated savings that you would only need to dip in to in the case of a collision or other major loss. For example, if you only have $5-$10,000 in the bank, and you happen to lose your job, and then the next month you happen to be hit in an accident and the car is totaled, could you afford to replace the car out of pocket? I would recommend looking at dropping comprehensive insurance as similar to a \"\"DNR\"\" (do not resuscitate) order for your car, i.e. under no circumstances would you choose repair the car were it totaled or damaged. For example, if your car's exterior were badly damaged in a hail storm (but still ran fine), would you pay $500 or more to repair it, or would you simply get a new car? Ultimately, this is going to be a judgement call based on how much financial risk you want to take on. Personally, I would continue to pay the extra $300 per year for now in order to insure a $6-8,000 asset (5% of the asset value) However, in the next few years the resale value of your car will continue to decline. If in a few years the car were worth $1,500, I would probably not pay the same $300 a year (or 20% of the asset's value). When you should make that choice depends on how many more years of service you expect to get from the car, which is a very localized question. Hope that helps!\"",
"title": ""
},
{
"docid": "512d7c4e1f8831007a9b824440f78073",
"text": "Only if (or to put it even more bluntly, when) they default. If your friend / brother / daughter / whoever needs a cosigner on a loan, it means that people whose job it is to figure out whether or not that loan is a good idea have decided that it isn't. By co-signing, you're saying that you think you know better than the professionals. If / when the borrower defaults, the lender won't pursue them for the loan if you can pay it. You're just as responsible for the loan payments as the original borrower, and given that you were a useful co-signer, probably much more likely to be able to come up with the money. The lender has no reason to go after the original borrower, and won't. If you can't pay, the lender comes after both of you. To put it another way: Don't think of cosigning as helping them get a loan. Think of it as taking out a loan and re-loaning it to them.",
"title": ""
},
{
"docid": "4c0ad5c834bc207b3f756d7ce3c6ed65",
"text": "\"You won't be able to sell the car with a lien outstanding on it, and whoever the lender is, they're almost certain to have a lien on the car. You would have to pay the car off first and obtain a clear title, then you could sell it. When you took out the loan, did you not receive a copy of the finance contract? I can't imagine you would have taken on a loan without signing paperwork and receiving your own copy at the time. If the company you're dealing with is the lender, they are obligated by law to furnish you with a copy of the finance contract (all part of \"\"truth in lending\"\" laws) upon request. It sounds to me like they know they're charging you an illegally high (called \"\"usury\"\") interest rate, and if you have a copy of the contract then you would have proof of it. They'll do everything they can to prevent you from obtaining it, unless you have some help. I would start by filing a complaint with the Better Business Bureau, because if they want to keep their reputation intact then they'll have to respond to your complaint. I would also contact the state consumer protection bureau (and/or the attorney general's office) in your state and ask them to look into the matter, and I would see if there are any local consumer watchdogs (local television stations are a good source for this) who can contact the lender on your behalf. Knowing they have so many people looking into this could bring enough pressure for them to give you what you're asking for and be more cooperative with you. As has been pointed out, keep a good, detailed written record of all your contacts with the lender and, as also pointed out, start limiting your contacts to written letters (certified, return receipt requested) so that you have documentation of your efforts. Companies like this succeed only because they prey on the fact many people either don't know their rights or are too intimidated to assert them. Don't let these guys bully you, and don't take \"\"no\"\" for an answer until you get what you're after. Another option might be to talk to a credit union or a bank (if you have decent credit) about taking out a loan with them to pay off the car so you can get this finance company out of your life.\"",
"title": ""
},
{
"docid": "f3dd78e6bce8c60aef62179c00fa8a76",
"text": "I'm a little confused by your question to be honest. It sounds like you haven't sold it to him, but you have a verbal arrangement for him to use the car like it's his. I'm going to assume that's the case for this answer. This is incredibly risky. If you've got the car on credit and he stops paying, or you guys break up... you will be liable for continuing to make payments! If the loan is in your name, it's your responsibility. Edited. The credit is yours. If he decides to stop paying, you're a little stuck.",
"title": ""
},
{
"docid": "23e4a87d43219cca0d6b24be9ba1747d",
"text": "If this happened, first you would be breaking the law for driving without insurance. Second, my uninsured motorists insurance would cover it. Third, your personal net worth is not zero. You are the owner of all those corporations which happen to own those assets. I could sue you and you would have to liquidate your stakes in those corporations. Your example is just saying someone doesn't have any assets if all their cash is tied up in stocks (equity ownership of corporations). If you're argument held true in court, no one could sue anyone successfully, because everyone would just put all their money in equities before a lawsuit.",
"title": ""
},
{
"docid": "fbe3c32df23d6bab65850a0504a96d0d",
"text": "Very generally speaking if you have a loan, in which something is used as collateral, the leader will likely require you to insure that collateral. In your case that would be a car. Yes certainly a lender will require you to insure the vehicle that they finance (Toyota or otherwise). Of course, if you purchase a vehicle for cash (which is advisable anyway), then the insurance option is somewhat yours. Some states may require that a certain amount of coverage is carried on a registered vehicle. However, you may be able to drop the collision, rental car, and other options from your policy saving you some money. So you buy a new car for cash ($25K or so) and store the thing. What happens if the car suffers damage during storage? Are you willing to save a few dollars to have the loss of an asset? You will have to insure the thing in some way and I bet if you buy the proper policy the amount save will be very minimal. Sure you could drop the road side assistance, rental car, and some other options, during your storage time but that probably will not amount to a lot of money.",
"title": ""
},
{
"docid": "a53ede8e34ef2dfe0235c51a616f4410",
"text": "Co-signing is not the same as owning. If your elderly lady didn't make any payments on the loan, and isn't on the ownership of the car, and there was no agreement that you would pay her anything, then you do not owe either her or her daughter any money. Also the loan is not affecting the daughter's credit, and the mother's credit is irrelevant (since she is dead). However you should be aware that the finance company will want to know about the demise of the mother, since they can no longer make a claim against her if you default. I would start by approaching the loan company, telling them about the mother's death, and asking to refinance in your name only. If you've really been keeping up the payments well this could be OK with them. If not I would find someone else who is prepared to co-sign a new loan with you, and still refinance. Then just tell the daughter that the loan her mother co-signed for has been discharged, and there is nothing for her to worry about.",
"title": ""
},
{
"docid": "0a0ad0deb270b252db9bdeb58f22d331",
"text": "\"Title insurance protects you from losing rights to your property in case of a court decision. Let's look at an example I recently found in local newspapers. One old woman sold her apartment to person A. The deed was attested by a notary public who verified that indeed in was that old woman putting her signature on the deed. Then person A sold the apartment to person B, etc, then after several deals some unfortunate Buyer bought that apartment. The deal looked allright, so he's got a mortgage to pay for the apartment. Later it turned out that the old lady died three months before she \"\"sold\"\" the apartment and the notary public was corrupt. Old lady's heirs filed a lawsuit and the deal was void. So the ultimate Buyer lost all rights to the apartment although he purchased it legally. This is the case when title insurance kicks in. You need one if there's a chance for a deal to be deemed void.\"",
"title": ""
},
{
"docid": "fd279259b01d20f763a01c8e1039cfca",
"text": "You may not have considered this, and it will depend on your local laws, but if someone causes you damage, you can sue them for the damages. In your case, two drivers forced you to be involved in an accident, which made your premiums go up, which is a real damage for which they might be responsible.",
"title": ""
},
{
"docid": "d487a8502eeadadc305ab93aaad0c5fb",
"text": "\"this is a bit unusual, but not unheard of. i have known more than one car whose owner was not its driver. besides the obvious risk that the legal owner of the car will repossess it, this seems fairly safe. your insurance should cover any financial liability that you incur during an accident. even if the car is repossessed by the owner, you are only out the registration fees. i would suggest you avoid looking this gift horse in the grill. her father on the other hand might be in for some drama and financial mess if he has a falling-out with his \"\"friend\"\". this arrangement reminds me of divorces where one spouse owns the car, but the other drives it and pays the loan. usually, when the relationship goes south, one spouse is forced to sell the car at a loss.\"",
"title": ""
}
] |
fiqa
|
a1cd6770f2b21c0fcff02a8fcaaaa3e0
|
Why are big companies like Apple or Google not included in the Dow Jones Industrial Average (DJIA) index?
|
[
{
"docid": "af672aedb7785e513c71cc16b4144691",
"text": "That is a pretty exclusive club and for the most part they are not interested in highly volatile companies like Apple and Google. Sure, IBM is part of the DJIA, but that is about as stalwart as you can get these days. The typical profile for a DJIA stock would be one that pays fairly predictable dividends, has been around since money was invented, and are not going anywhere unless the apocalypse really happens this year. In summary, DJIA is the boring reliable company index.",
"title": ""
},
{
"docid": "2d4ea113bce589e1648c170a6a81c74a",
"text": "Traditionally, the Dow Jones Industrial Average (DJIA) was only comprised of stocks that were traded on the New York Stock exchange. Neither Apple (AAPL) nor Google (GOOG) are traded on the New York Stock Exchange but instead are traded on NASDAQ. All NASDAQ tickers are four characters long and all NYSE tickers are only three or less characters long (e.g. IBM or T (AT&T)). However in 1999, MSFT became the first NASDAQ stock to be included in the DJIA. Given that AAPL now has the largest market capitalization of any company in U.S. history, I think it is likely if they retain that position, that they would eventually be let into the DOW club too, perhaps, ironically, even supplanting Microsoft.",
"title": ""
},
{
"docid": "3e363c6bd754da752d1092b160f4188f",
"text": "\"In addition to the answers provided above, the weight the Dow uses to determine the index is not the market capitalization of the company involved. That means that companies like Google and Apple with very high share prices and no particular inclination to split could adversely effect the Dow, turning it into essentially the \"\"Apple and Google and then some other companies\"\" Industrial Average. The highest share price Dow company right now, IIRC, is IBM. Both Google and Apple would have three times the influence on the Index as IBM does now.\"",
"title": ""
},
{
"docid": "bddbceba5540cf233b6ac80b6426420c",
"text": "\"The Dow Jones Industrial Average (DJIA) is a Price-weighted index. That means that the index is calculated by adding up the prices of the constituent stocks and dividing by a constant, the \"\"Dow divisor\"\". (The value of the Dow divisor is adjusted from time to time to maintain continuity when there are splits or changes in the roster.) This has the curious effect of giving a member of the index influence proportional to its share price. That is, if a stock costing $100 per share goes up by 1%, that will change the index by 10 times as much as if a stock costing $10 per share goes up by the same 1%. Now look at the price of Google. It's currently trading at just a whisker under $700 per share. Most of the other stocks in the index trade somewhere between $30 and $150, so if Google were included in the index it would contribute between 5 and 20 times the weight of any other stock in the index. That means that relatively small blips in Google's price would completely dominate the index on any given day. Until June of 2014, Apple was in the same boat, with its stock trading at about $700 per share. At that time, Apple split its stock 7:1, and after that its stock price was a little under $100 per share. So, post-split Apple might be a candidate to be included in the Dow the next time they change up the components of the index. Since the Dow is fixed at 30 stocks, and since they try to keep a balance between different sectors, this probably wouldn't happen until they drop another technology company from the lineup for some reason. (Correction: Apple is in the DJIA and has been for a little over a year now. Mea culpa.) The Dow's price-weighting is unusual as stock indices go. Most indices are weighted by market capitalization. That means the influence of a single company is proportional to its total value. This causes large companies like Apple to have a lot of influence on those indices, but since market capitalization isn't as arbitrary as stock price, most people see that as ok. Also, notice that I said \"\"company\"\" and not \"\"stock\"\". When a company has multiple classes of share (as Google does), market-cap-weighted indices include all of the share classes, while the Dow has no provision for such situations, which is another, albeit less important, reason why Google isn't in the Dow. (Keep this in mind the next time someone offers you a bar bet on how many stocks are in the S&P 500. The answer is (currently) 505!) Finally, you might be wondering why the Dow uses such an odd weighting in its calculations. The answer is that the Dow averages go back to 1896, when Charles Dow used to calculate the averages by hand. If your only tools are a pencil and paper, then a price-weighted index with only 30 stocks in it is a lot easier to calculate than a market-cap-weighted index with hundreds of constituents. About the Dow Jones Averages. Dow constituents and prices Apple's stock price chart. The split in 2014 is marked. (Note that prices before the split are retroactively adjusted to show a continuous curve.)\"",
"title": ""
}
] |
[
{
"docid": "2a123a5257336278656f89e22c3cdeb3",
"text": "\"I don't understand what the D, to the right of APPLE INC, means. This means the graph below is for the \"\"D\"\". There is selection at top and you can change this to Minutes [5,20,60,etc], Day, Week [W], Month [M] I'm not understanding how it can say BATS when in actuality AAPL is listed on the NASDAQ. Do all exchanges have info on every stock even from other exchanges and just give them to end-users at a delayed rate? BATS is an exchange. A stock can be listed on multiple exchange. I am not sure if AAPL is also listed on BATS. However looks like BATS has agreement with major stock exchanges to trade their data and supplies this to trading.com\"",
"title": ""
},
{
"docid": "0083a0071bdbada470fe2420ca35fc63",
"text": "Who offered who what? You're pretending industries are fungible. They aren't. Apple and Microsoft are not related to the MIC or big oil. Energy is a demonstrated input in every other sector in the world. Why not include (for example) agriculture in your math? It's 100% dependent on energy costs. You're isolating individual industries as if they exist outside of the greater supply/manufacturing chain and pretending that they can be swapped for one another based on the single metric of market size. Apples and oranges. Except in this case the world runs on oranges.",
"title": ""
},
{
"docid": "85763044dbc21fd7039232b4874772f8",
"text": "I think there is a huge difference to what Google does with intangible assets as compared to a company such as Facebook. Facebook floated and as people thought it was highly overvalued the share price plummeted. Google on the other hand has many years of relatively stable growth and share price in a market that is generally pretty well informed. So I disagree.",
"title": ""
},
{
"docid": "2711c8be100161340c52250019460655",
"text": "This is kind of a silly article and it mostly misses the point. First, Google and others essentially have in-house investment banking departments that are vetting, valuing, negotiating, and sealing these deals. These M&A guys are mostly former bankers. So while they may not be using investment banks, they are certainly using bankers. Google has $60B in cash and does dozens and dozens of acquisitions each year. It's not surprising they find it appealing to move the banking function in-house. Second, certain tech companies like Google and Facebook and Zynga have unique corporate structures where the CEO / founders retain majority voting control of their companies. This means guys like Zuckerberg, Page, Brin, Pincus et al control over 50% of all voting shares and they cannot be ousted by the board of directors, nor can they be overruled on any matter via a proxy battle. This gives these founders far reaching control over M&A and thus you see deals like the $19B cash + stock WhatsApp acquisition (and Instagram); both of these deals were reportedly driven by Zuckerberg himself who not only initiated and vetted the deals, but determined the price. Most CEOs do not have this kind of latitude. Third, within Silicon Valley, the network is very small and tight and everybody knows each other. The CEOs, founders, VCs, etc...they all know each other and they know who to call when they are looking to acquire. It's not like Zuck needs a banker to tell him to check out Snapchat...",
"title": ""
},
{
"docid": "c08b0bf1974bb73aa8c964c2cd2b0a0c",
"text": "\"An index is just a mathematical calculation based on stock prices. Anyone can create such a calculation and (given a little effort) publish it based on publicly available data. The question of \"\"open source\"\" is simply whether or not the calculator chooses to publish the calculation used. Given how easy an index is to create, the issue is not the \"\"open source\"\" nature or otherwise, but its credibility and usefulness.\"",
"title": ""
},
{
"docid": "c0c0d39f8df8c4b635315554a55d549e",
"text": "\"Sure, it doesn't, but realistically they can't/shouldn't do anything about it in their index funds, because then they're just another stock picker, trying to gauge which companies are going to do best. Their funds not all being indexes is what I was getting at with my original question. How much leeway do they have in their definitions of other funds? IE, if they had a dividend fund that included all large cap dividend paying stocks above 3% yield, they couldn't take out Shell just because of climate risk without fundamentally changing what the fund is. But if it's just \"\"income fund\"\" then they can do whatever in that space.\"",
"title": ""
},
{
"docid": "b3e1a4b97603fedc629801d38219ad30",
"text": ">I distinctly remember in dot-com crash it was only Internet stocks that were clearly overvalued. You remember someone had this opinion. Did you ever check the facts? The [S&P 500](http://finance.yahoo.com/q/bc?s=%5EGSPC+Basic+Chart&t=my) is the average of the 500 largest corporations of the USA, and it grew steadily through the 1990s, falling after 2000. Now look at [Apple](http://finance.yahoo.com/q/bc?s=AAPL+Basic+Chart&t=my) for an example of a tech stock that didn't follow that trend.",
"title": ""
},
{
"docid": "0cc8c705118c1a33d31241664c06f9e3",
"text": "I would think there would be heavy overlap between companies that do well and market cap. You're not going to get to largest market cap without being well managed, or at least in the top percentile. After all, in a normal distribution, the badly managed firms go out of business or never get large.",
"title": ""
},
{
"docid": "90a8fed539dd11762ca3dad3daa1514b",
"text": "If a stock that makes up a big part of the Dow Jones Industrial Average decided to issue a huge number of additional shares, that will make the index go up. At least this is what should happen, since an index is basically a sum of the market cap of the contributing companies. No, indices can have various weightings. The DJIA is a price-weighted index not market-cap weighted. An alternative weighting besides market-cap and price is equal weighting. From Dow Jones: Dow Jones Industrial Average™. Introduced in May 1896, the index, also referred to as The Dow®, is a price-weighted measure of 30 U.S. blue-chip companies. Thus, I can wonder what in the new shares makes the index go up? If a stock is split, the Dow divisor is adjusted as one could easily see how the current Dow value isn't equal to the sum or the share prices of the members of the index. In other cases, there may be a dilution of earnings but that doesn't necessarily affect the stock price directly as there may be options exercised or secondary offerings made. SO if the index, goes up, will the ETF DIA also go up automatically although no additional buying has happened in the ETF itself? If the index rises and the ETF doesn't proportionally, then there is an arbitrage opportunity for someone to buy the DIA shares that can be redeemed for the underlying stocks that are worth more in this case. Look at the Creation and Redemption Unit process that exists for ETFs.",
"title": ""
},
{
"docid": "85f152040d50f0973d1afa6b3af5da2d",
"text": "Price, whether related to a stock or ETF, has little to do with anything. The fund or company has a total value and the value is distributed among the number of units or shares. Vanguard's S&P ETF has a unit price of $196 and Schwab's S&P mutual fund has a unit price of $35, it's essentially just a matter of the fund's total assets divided by number of units outstanding. Vanguard's VOO has assets of about $250 billion and Schwab's SWPPX has assets of about $25 billion. Additionally, Apple has a share price of $100, Google has a share price of $800, that doesn't mean Google is more valuable than Apple. Apple's market capitalization is about $630 billion while Google's is about $560 billion. Or on the extreme a single share of Berkshire's Class A stock is $216,000, and Berkshire's market cap is just $360 billion. It's all just a matter of value divided by shares/units.",
"title": ""
},
{
"docid": "9c5b03f667eddcfa2883b3dd0acafb4e",
"text": "As of this moment the DOW 30 is up 6.92% Year-to-date. Of the 30 stocks in the index 6 are in negative territory for the year. And of the 6 in negative territory 3 are farther below 0 than the average is above 0. The investors in those 3 stocks (Boeing, Goldman Sachs and Nike) would look at this year so far as a disaster. Individual stocks can move in opposite directions from the index.",
"title": ""
},
{
"docid": "6c2622abaa663cd18125ec94aca901e7",
"text": "\"A company's valuation includes its assets, in addition to projected earnings. Aside from the obvious issue that \"\"projected earnings\"\" can be wildly inaccurate or speculative (as in the case of startups and fast-moving industries like technology), a company's assets are not necessarily tied to the market the company is in. For the sake of illustration, say the government were to ban fast food tomorrow, and the market for that were to go all the way to zero. McDonald's would still have almost 30 billion dollars worth of real estate holdings that would surely make the company worth something, even though it would have to stop selling its products. Similarly, Apple is sitting on approximately $200 billion dollars in cash and securities in overseas subsidiaries. Even if they never make another cent selling iPhones and such, the company is still worth a lot because of those holdings. \"\"Corporate raiders\"\" back in the 70's and 80's made massive personal fortunes exploiting this disconnect in undervalued companies that had more assets than their market cap, by getting enough ownership to liquidate the company's assets. Oliver Stone even made a movie about the phenomenon. So yes, it's certainly possible for a company to be worth more than the size of the market for its products.\"",
"title": ""
},
{
"docid": "bc178227e412f8cff2a9802dbed9468a",
"text": "\"Because Google recently decided that they will not provide Maps for free to partners who use the data, and Apple was the largest Maps user. Cutting the Apple created Maps app that used Google data and forcing Google to release their own app basically means Google goes from cashing checks from Apple to having to create and support an app all on their own dime. Also, do you want to guess why Apple Maps w/ Google data didn't have features like Turn by Turn Navigation? If you guessed \"\"Google didn't allow Apple to have it\"\", you guess right. Apple had to do it not only to try and reach feature parity, but to prevent themselves from having to pay their biggest competitor to use Maps data.\"",
"title": ""
},
{
"docid": "3ae22710c80a01cf0fa6319f8862dcff",
"text": "Apparent data-feed issues coming out of NASDAQ in the after hours market. Look at MSFT, AMZN, AAPL, heck even Sears. Funny thing though, is that you see traces of irregular prices during the active session around 10:20am on stocks like GOOG.",
"title": ""
},
{
"docid": "e6bf0329cade75454187b0320816ddc2",
"text": "\"One part of the equation that I don't think you are considering is the loss in value of the car. What will this 30K car be worth in 84 months or even 60 months? This is dependent upon condition, but probably in the neighborhood of $8 to $10K. If one is comfortable with that level of financial loss, I doubt they are concerned with the investment value of 27K over the loan of 30K @.9%. I also think it sets a bad precedent. Many, and I used to be among them, consider a car payment a necessary evil. Once you have one, it is a difficult habit to break. Psychologically you feel richer when you drive a paid for car. Will that advantage of positive thinking lead to higher earnings? Its possible. The old testament book of proverbs gives many sound words of advice. And you probably know this but it says: \"\"...the borrower is slave to the lender\"\". In my own experience, I feel there is a transformation that is beyond physical to being debt free.\"",
"title": ""
}
] |
fiqa
|
3615a3838842760bfb2bdb8c21ac24de
|
Why does ExxonMobil's balance sheet show more liabilities than assets?
|
[
{
"docid": "0001a99248286aede16dc861286d4b70",
"text": "\"You are reading the balance sheet wrong. Everything Joe says is completely correct, but more fundamentally you have missed out on a huge pile of assets. \"\"Current assets\"\" is only short term assets. You have omitted more than $300B in long-term assets, primarily plant and equipment. The balance sheet explicitly says: Net tangible Assets (i.e. surplus of assets over liabilities) $174B\"",
"title": ""
},
{
"docid": "3b311bdc60d1cdf8a447130188248035",
"text": "Exxon Mobil is one of the most profitable corporations in the world. Their annual earnings are typically in the $10s of billions of dollars. They have revenues in the hundreds of billions of dollars per year. They also return $10+ billion dollars to their stockholders each year in dividends and stock purchases. That's with $300bn market capitalization - meaning they return 3% of their total market cap each year to their shareholders, aside from any movement in the stock itself. On the other hand, their total current liabilities are around $175bn. That's what, six months' revenue? Who'd you rather lend to, Exxon, or ... anyone else? AAPL and GOOG maybe better risks, but not by much. Almost every other company on the planet is a more dangerous risk. Judging them solely by Assets is silly - they don't exactly sit on the oil they extract. They take it out of the ground and sell it to people.",
"title": ""
},
{
"docid": "0aeb0bb4b3bbbee25c09f14be0a80f01",
"text": "Even assuming you were reading the balance sheet correctly it means nothing. What banks mostly care about is cash flow. Do they have enough extra money to make the payments on whatever they borrow? I have never had a credit card company ask me about assets--they don't care. They care about income with which to pay the credit card bill. Have a solid record of paying your bills and enough income to pay back what you are trying to borrow and you'll have an excellent credit rating no matter what your net worth. Whether you are one person or a megacorporation makes no difference.",
"title": ""
},
{
"docid": "7605e83f5aa84676d7d8568635dc2ec0",
"text": "I believe you are missing knowledge of how to conduct a ratio analysis. Understanding liquidity ratios, specifically the quick or acid-test ratio will be of interest and help your understanding. http://www.investopedia.com/terms/a/acidtest.asp Help with conducting a ratio analysis. http://www.demonstratingvalue.org/resources/financial-ratio-analysis Finally, after working through the definitions, this website will be of use. https://www.stock-analysis-on.net/NYSE/Company/Exxon-Mobil-Corp/Ratios/Liquidity",
"title": ""
}
] |
[
{
"docid": "9d77881dc3d8a425eeea4703c169e0b3",
"text": "\"First, don't use Yahoo's mangling of the XBRL data to do financial analysis. Get it from the horse's mouth: http://www.sec.gov/edgar/searchedgar/companysearch.html Search for Facebook, select the latest 10-Q, and look at the income statement on pg. 6 (helpfully linked in the table of contents). This is what humans do. When you do this, you see that Yahoo omitted FB's (admittedly trivial) interest expense. I've seen much worse errors. If you're trying to scrape Yahoo... well do what you must. You'll do better getting the XBRL data straight from EDGAR and mangling it yourself, but there's a learning curve, and if you're trying to compare lots of companies there's a problem of mapping everybody to a common chart of accounts. Second, assuming you're not using FCF as a valuation metric (which has got some problems)... you don't want to exclude interest expense from the calculation of free cash flow. This becomes significant for heavily indebted firms. You might as well just start from net income and adjust from there... which, as it happens, is exactly the approach taken by the normal \"\"indirect\"\" form of the statement of cash flows. That's what this statement is for. Essentially you want to take cash flow from operations and subtract capital expenditures (from the cash flow from investments section). It's not an encouraging sign that Yahoo's lines on the cash flow statement don't sum to the totals. As far as definitions go... working capital is not assets - liabilities, it is current assets - current liabilities. Furthermore, you want to calculate changes in working capital, i.e. the difference in net current assets from the previous quarter. What you're doing here is subtracting the company's accumulated equity capital from a single quarter's operating results, which is why you're getting an insane result that in no way resembles what appears in the statement of cash flows. Also you seem to be using the numbers for the wrong quarter - 2014q4 instead of 2015q3. I can't figure out where you're getting your depreciation number from, but the statement of cash flows shows they booked $486M in depreciation for 2015q3; your number is high. FB doesn't have negative FCF.\"",
"title": ""
},
{
"docid": "a8db9d4bebfe39ff8ac28bc484923060",
"text": "... can someone explain to me why vanguard of all companies would be asking for this? If they're a company based on broad index funds, then whether or not exxon or Chevron or whoever else has climate change risk is irrelevant to that model, right?",
"title": ""
},
{
"docid": "df123f82aa26686436f8d9f3a76a9d24",
"text": "I've worked on numerous restructurings in the o&g space. I assure you that bankruptcy is not a magical process of wiping away debt. It's been extremely common over the last 3 years in the energy industry. It'd be far more aggressive to say that a business is valued at $5 billion when in reality they have $5 billion in debt that traded at pennies on the dollar.",
"title": ""
},
{
"docid": "8e67b6911d14a79d53b0b47b4fdd2ac1",
"text": "\"Accounts track value: at any given time, a given account will have a given value. The type of account indicates what the value represents. Roughly: On a balance sheet (a listing of accounts and their values at a given point in time), there is typically only one equity account, representing net worth, I don't know much about GNUCash, though. Income and expenses accounts do not go on the balance sheet, but to find out more, either someone else or the GNUCash manual will have to describe how they work in detail. Equity is more similar to a liability than to assets. The equation Assets = Equity + Liabilities should always hold; you can think of assets as being \"\"what my stuff is worth\"\" and equity and liabilities together as being \"\"who owns it.\"\" The part other people own is liability, and the part you own is equity. See balance sheet, accounting equation, and double-entry bookkeeping for more information. (A corporate balance sheet might actually have more than one equity entry. The purpose of the breakdown is to show how much of their net worth came from investors and how much was earned. That's only relevant if you're trying to assess how a company has performed to date; it's not important for a family's finances.)\"",
"title": ""
},
{
"docid": "45f35b560e5830650226f8294f064459",
"text": "\"IANAL (or an accountant), but there is a useful notion of \"\"technical insolvency\"\" which you it sounds like you probably meet, and which is a distinct concept from actual insolvency. Couple of choice quotes from that link: If a company (or person) is technically insolvent that merely means that it has a negative net asset value; its liabilities are greater than its assets. The significance of technical insolvency depends on circumstances: it may be an indicator of serious problems that may lead to actual insolvency, or it may be perfectly acceptable. ... A technically insolvent company is free to keep trading as long as the directors reasonably believe that the company will be able to pay its debts, and, again, as long as an upaid creditor does not use the courts to force a liquidation. which is basically what @keshlam's comment on your question is saying.\"",
"title": ""
},
{
"docid": "74a6a11df8141bf6906945103103b30f",
"text": "Right, I understand minority interest but it is typically reported as a positive under liabilities instead of a negative. For example, when you are calculating the enterprise value of a company, you add back in the minority interest. Enterprise Value= Market Share +Pref Equity + Min Interest+ Total Debt - Cash and ST Equivalents. EV is used to quantify the total price of a company's worth. If you have negative Min Interest on your books, that will make your EV less than it should be, creating an incorrect valuation. This just doesn't make any sense to me. Does it mean that the subsidiary that they had a stake in had a negative earning?",
"title": ""
},
{
"docid": "695e0970638ca4d8e1098729232d4bfb",
"text": "Expense accounts are closed into equity. Same with revenue. So an increase in an expense means lower equity (lower retained earnings since there is more expense). Ergo, decrease equity and increase a liability. Increase a liability since it was accrued, which is usually used specifically to refer to things that kind of just happen in the background. Aka the firm most likely didn't pay cash for that right then and there so increase a payable.",
"title": ""
},
{
"docid": "9dce0b157b2a2d90afcda05c20b8bd8a",
"text": "I mean isn't it implied that cash flows increase by the amount of the benefit of the investment each year? I'm a little shaky on cash flows tbh. My scope may be limited compared to yours I've never taken a financial management class but just from financial accounting knowledge since I recently finished that, it seems like cash flows would be increased if revenues are increased. Unless the revenue increase is for some reason solely in the form of accounts receivable or some asset other than cash.",
"title": ""
},
{
"docid": "62a306f2983f3b6fa7523495c2e9051e",
"text": "At the heart of this issue is an accounting disagreement that BIS has with current accounting standards. So basically, foreign investors want to invest in lucrative American Dollar investment products but they don't want to have to buy American Dollars in order to do so because of foreign exchange risk (the risk that by the time your investment is realized, any gains are adversely effected by the change in currency values). So instead, they trade in a series of (currency) swaps that allow them to mitigate that foreign exchange risk. In doing so, they are only required by current accounting standards to record such transactions at fair value = 0, thus skipping over the balance sheet and only hitting the footnotes. BIS believes these transactions should be recorded at gross values and on the balance sheet as opposed to the footnotes. The debt is hidden insofar as global dollar debt is calculated using liabilities on balance sheets and not the footnotes. That being said, in no way are these transactions truly hidden as (1) any good analyst values footnotes as much as the financial statements themselves and (2) exposure isn't really the same as debt. TL:DR BIS (as reputable as they are) wants to change currently accepted accounting standards and screaming $14 TRILLION DOLLARS is their way of doing it.",
"title": ""
},
{
"docid": "499d8adf4782925193c55e97dde77c6a",
"text": "Enron did a wide range of dodgy financial accounting, using tricks to severely mis-represent their financial situation. They then used these doctored accounts to fool lenders and stock-buyers that the company had more money, and fewer debts or problems, than it really had. Eventually they ran out of money and went bankrupt, leaving the lenders and stock-buyers with nothing.",
"title": ""
},
{
"docid": "b622bc6d4c5c0e320f76c82c2ef0411a",
"text": "\"SEC filings do not contain this information, generally. You can find intangible assets on balance sheets, but not as detailed as writing down every asset separately, only aggregated at some level (may be as detailed as specifying \"\"patents\"\" as a separate line, although even that I wouldn't count on). Companies may hold different rights to different patents in different countries, patents are being granted and expired constantly, and unless this is a pharma industry or a startup - each single patent doesn't have a critical bearing on the company performance.\"",
"title": ""
},
{
"docid": "f1816281f79c09983869981674d6ff07",
"text": "Dividends and interest are counted under operations for the purpose of this tweet. This is pretty much entirely a non-story. I'm not sure exactly how they're dividing it up, but it looks like they're only counting stock appreciation as capital gains and counting things revenue from sales (from their subsidiaries as well) under operating income. This is just from a quick glance over their statement of earning, but that's what it looks like to me.",
"title": ""
},
{
"docid": "a0262e62400a430bc8aa3b783e8b4e84",
"text": "Maybe his accountant not taking care of things meant that there was a miscommunication about his debts. He could've had outstanding loans, back taxes, etc and he didn't have a clear enough picture about what his cash balance would be after his transaction.",
"title": ""
},
{
"docid": "32b1e6c084e4e271c2554fefe8f4e5d9",
"text": "I upvoted you as I think your story is important to tell. However, commodities and futures accounts have never been protected under SIPC. The use of your money to pay debts sounds illegal or perhaps it was legal under a document you signed when you opened your account. Bankruptcy was not a way to screw you over. The bigger point is that bankruptcy is a way to restructure debts and is beneficial in the long run to the benefits of society. While we often look at people or corporations who have to file bankruptcy as being irresponsible (and what I am about to say may reflect negatively on you, for that I apologize) the people or corporations who lent to a bankrupt entity should be scorned just as much. Right now, the EU is going through a period where we are hoping bankruptcy is off the table. Increasingly though, the only way to do that is to try and paper over debts that will never be repaid for a long enough time period for growth to resume. But the question remains, what if growth never comes back. This is why restructuring and bankruptcy is the only option for Greece and likely Italy, Portugal, Spain and Ireland.",
"title": ""
},
{
"docid": "e5048e4d9632df7eaba7dfc268e86f37",
"text": "\"Hi, accounting major here! A lot of people mentioned both tax advantages and \"\"cheap\"\" money (money you can borrow at a low interest rate). Another reason businesses do this is to reward investors. Generally people with stock in a company want to see some of its operations financed with debt, instead of all of it financed from investors' money or profit. This way the company can grow more and still pay better dividends to its investors. However, you don't want too much debt either. It's a balance, and a way to see how much debt vs equity a company has is called a leverage ratio (leverage=debt). Hope this helps!\"",
"title": ""
}
] |
fiqa
|
8d76bc8246104dc53621575f5edf0214
|
Financial implications of purchasing a first home?
|
[
{
"docid": "5ca0c78419f78426e0ab28fd31691ec3",
"text": "Congrats! Make sure you nail down NOW what happens to the house should you eventually separate. I know lots of unmarried couples who have stayed together for decades and look likely to do so for life; I've also seen some marriages break up that I wouldn't have expected to. Better to have this discussion NOW. Beyond that: Main immediate implications are that you have new costs (taxes, utilities, maintenance) and new tax issues (mortgage interest and property tax deductability) and you're going to have to figure out how to allocate those between you (if there is a between; not sure whether unmarried couples can file jointly these days).",
"title": ""
}
] |
[
{
"docid": "5744b01b567c29e20c49561da9ab4613",
"text": "Awesome info, this is what I was looking for. I live in FL so i will look into LLC laws. Is there a difference in obtaining loans for multi-unit properties, or any special requirements? This would be my first purchase so I'm trying to decide if I should start with a multi-unit or a large home. I read something about a first time home buyers and the FHA allowing one to put down less of an initial investment. Im assuming this is if you are actually going to be living in the home or property? Would it make sense to have separate entities for specific types of units? For example One separate corporation per multi-unit property, but have multiple single family homes under another single entity? Thanks for the help. *quick add-on, would you know how long the corporation would have had to exist before being able to obtain a loan? For example, would XYZ, LLC. have to have been around for 3 years prior to the loan, or could i just incorporate the month before going to the bank?",
"title": ""
},
{
"docid": "455e162cab382ba74e9f038ced8896a8",
"text": "My primary concerns. There seems to still be a fair bit of distressed property (forclosures etc) on the market at current, which might well keep prices down for the next year or so that it takes to finish flushing that stuff out of the market. The gist I get from most experts/pundits is that There will be good deals around for while to come still I'd advise you wait. Go ahead and do the math to figure out what total you WOULD be paying would be, and charge yourself that much a mohth for rent in your current place, pocketing the difference in a savings account. You'll be able to get a feeling for what it's like to live with that kind of house payment, and if you can do it sans any room-mate (something you can't always count on) If you can manage it, then you have a much more realistic idea of what you can afford, AND you'll have saved up a bunch of money to help with a down-payment in the process. If for example your Mortgage plus taxes and insurance ends up running around say $1450 a month, plus another $150 for the HOA, well then, that's charging yourself $1600 a month for your 'rent' which means $1000 per month going into the bank, in two years that's nearly the same as what you have now in the $401K, and you'd have a really good idea if you can afford that much per month in housing costs. If you are bound and determined to do this now, then here's a few other things to consider. You might to shop around a bit to see how typical those HOA fees are. Yeah you don't have the expense and hassle of needing to mow the lawn, paint the place etc but still, 150 a month translates to around another 1.5 mortgage payments a year. You might be able to get around PMI by splitting the mortgage into two pieces and doing a 'purchase money second' of around 15-20% and 75-70% of the value for the main mortgage. That way the LoanToValue on your primary loan is under 80%, which could be worthwhile even if the interest rate on that second loan is a little higher (at least it's deductible, paying PMI is just money lost to you) although trying to do any kind of creative financing these days is a lot trickier",
"title": ""
},
{
"docid": "450c8ae1359a23cf337b1a1817dd9c03",
"text": "What options do I have? Realistically? Get a regular full time job. Work at it for a year or so and then see about buying a house. That said, I recently purchased a decent home. I am self-employed and my income is highly erratic. Due to how my clients pay me, my business might go a couple months with absolutely no deposits. However, I've been at this for quite a few years. So, even though my business income is erratic, I pay myself regularly once a month. In order to close the deal with the mortgage company I had to provide 5 years worth of statements on my business AND my personal bank accounts. Also I had about a 30% down payment. This gave the bank enough info to realize that I could absolutely make the payments and we closed the deal. I'd say that if you have little to no actual financial history, don't have a solid personal income and don't have much of a down payment then you probably have no business buying a house at this point. The first time something goes wrong (water heater, ac, etc) you'll be in a world of trouble.",
"title": ""
},
{
"docid": "1523b155b7a65d32aa8df6599e2e5fd1",
"text": "I'd keep the risk inside the well-funded retirement accounts. Outside those accounts, I'd save to have a proper emergency fund, not based on today's expenses, but on expenses post house. The rest, I'd save toward the downpayment. 20% down, with a reserve for the spending that comes with a home purchase. It's my opinion that 3-5 years isn't enough to put this money at risk.",
"title": ""
},
{
"docid": "b509ef7590b593609fa926e7c92f2d42",
"text": "This may effect how much, or under what terms a bank is willing to loan us I don't think this is likely, an investment is an investment whether it is money in a savings account or a loan. However, talk to your bank. Is it worth getting something by a lawyer? Definitely, you need a lawyer and so do your parents. There is a general presumption at law that arrangements between family members are not meant to be contracts. You definitely want this to be a contract and engaging lawyers will make sure that it is. You also definitely want this to be a proper mortgage so that you get first call on the property should your parents die or go bankrupt. In addition, a lawyer will be able to advise you of the pitfalls that you haven't seen. If both of my parents were to pass away before the money is returned, would that document be enough to ensure that the loan is returned promptly? No, see above. Tax implications: Will this count as taxable income for me? And if so, presumably my parents can still count it as a tax deduction? Definitely, however the ATO is very keen that these sorts of arrangements do not result in tax minimisation. Your parents will get a deduction at the rate charged; you will pay tax on the greater of the rate charged or a fair commercial rate i.e. what your parents would be paying a bank. For example, if the going bank mortgage rate is 5.5% and you charged 2% they get the deduction for 2%, you pay tax as though they had paid 5.5%. Property prices collapse, and my parents aren't able to make their repayments, bank forecloses on the place and sells it, but not even enough to cover the outstanding loan, meaning my parents no longer have our money. (I could of course double down and pay their monthly repayments for them in this case). First, property prices collapsing have no impact on whether your parents can pay the loan. If they can it doesn't matter what the property is worth. If they can't then it will be sold as quickly as possible for an amount that covers (as far as possible) the first mortgagee's indebtedness. It is only in reading this far that I realise that there will still be a bank as first mortgagee. This massively increases the risk profile. Any other risks I have missed? Yes, among others: Any mitigations for any identified risks? Talk to a lawyer. Talk to an accountant. Talk to an insurance professional. Anything I flagged as a risk that is not actually an issue? No Assuming you would advise doing this, what fraction of savings would you recommend keeping as a rainy day fund that can be accessed immediately? I wouldn't, 100%.",
"title": ""
},
{
"docid": "9005a342e2f904ef62c7d337719a6f9a",
"text": "\"This is not a full answer and I have no personal finance experience. But I have a personal story as I did this. As Vicky stated Another point: there are various schemes available to help first time buyers. By signing up for this, you would exclude yourself from any of those schemes in the future. I did this for my dad when I was 16 or so. I am in Canada and lost $5,000 first time buyers tax rebate. As long as many other bonuses like using your rsps for your first home. I also am having a fair amount of trouble getting a credit card, because even though I am only a part member of the mortgage they expect you to be able to cover the whole thing. So when the banks look at my income of say $3000 a month they say \"\"3000 - rent(500) - mortgage(3000)\"\" You make $-500 a month. I then explain that I do not actually pay the mortage so it is not coming out of my paycheck. They do not care. I am responsible for full payments and they consider it used.\"",
"title": ""
},
{
"docid": "5b290e20dbb771f105b217af25c83024",
"text": "You and your husband are fronting all the money upfront. I'm guessing this will cost you around 67,000 once closing costs and fees are included. So obviously you would be hundred percent owners at the beginning. You'll then pay 31% of the mortgage and have your sister pay the remaining 69%. This puts your total investment at the end at 67k + 74.4k + 31% of interest accrued, and your sisters total investment at 165.6k+69% of interest accrued. If you hold the full length of the mortgage, your sister will have invested much more than you( assuming 30 year fixed rate, and 3.75%, she'd pay 116.6k in interest as opposed to your 49.6k) She will have spent 282.2k and y'all will have spent 191k. However if you sell early, your percentage could be much higher. These calculations don't take into account the opportunity cost of fronting all the cash. It could be earning you more in the stock market or in a different investment property. Liability also could be an issue in the case of her not being able to pay. The bank can still come after you for the whole amount. Lastly and most importantly, this also doesn't include the fact that she will be living there and y'all will not. What kind of rent would she be paying to live in a similar home? If it is more than 1400, you will basically be subsidizing her living, as well as tying up funds, and increasing your risk exposure. If it is more than 1400, she shouldn't be any percent owner.",
"title": ""
},
{
"docid": "fc10bfbcdf1afbd969f4378266520529",
"text": "First, some general advice that I think you should consider A good rule of thumb on home buying is to wait to buy until you expect to live in the same place for at least 5 years. This period of time is meant to reduce the impact of closing costs, which can be 1-5% of your total buying & selling price. If you bought and sold in the same year, for example, then you might need to pay over 5% of the value of your home to realtors & lawyers! This means that for many people, it is unwise to buy a home expecting it to be your 'starter' home, if you already are thinking about what your next (presumably bigger) home will look like. If you buy a townhouse expecting to sell it in 3 years to buy a house, you are partially gambling on the chance that increases in your townhome's value will offset the closing costs & mortgage interest paid. Increases in home value are not a sure thing. In many areas, the total costs of home ownership are about equivalent to the total costs of renting, when you factor in maintenance. I notice you don't even mention renting as an option - make sure you at least consider it, before deciding to buy! Also, don't buy a house expecting your life situation to 'make up the difference' in your budget. If you're expecting your girlfriend to move in with you in a year, that implies that you aren't living together now, and maybe haven't talked about it. Even if she says now that she would move in within a year, there's no guarantee that things work out that way. Taking on a mortgage is a commitment that you need to take on yourself; no one else will be liable for the payments. As for whether a townhouse or a detached house helps you meet your needs better, don't get caught up in terminology. There are few differences between houses & townhomes that are universal. Stereotypically townhomes are cheaper, smaller, noisier, and have condo associations with monthly fees to pay for maintenance on joint property. But that is something that differs on a case-by-case basis. Don't get tricked into buying a 1,100 sq ft house with a restrictive HOA, instead of a 1,400 sq ft free-hold townhouse, just because townhouses have a certain reputation. The only true difference between a house and a townhouse is that 1 or both of your walls are shared with a neighbor. Everything else is flexible.",
"title": ""
},
{
"docid": "7a16e7a60d19912d82df48675bb490c6",
"text": "\"I second DJClayworth's suggestion to wait and save a larger down-payment. I'll also add: It looks like you neglected to consider CMHC insurance in your calculation. When you buy your first home with less than 20% down, the bank will require you to insure the mortgage. CMHC insurance protects the bank if you default – it does not protect you. But such insurance does make a bank feel better about lending money to people it otherwise wouldn't take a chance on. The kicker is you would be responsible for paying the CMHC insurance that's protecting the bank. The premium is usually added on to the amount borrowed, since a buyer requiring CMHC insurance doesn't, by definition, have enough money up front. The standard CMHC premium for a mortgage with 5% down, or as they would say a \"\"95% Loan-to-Value ratio\"\" is 2.75%. Refer to CMHC's table of premiums here. So, if you had a down-payment of $17,000 to borrow a remaining $323,000 from the bank to buy a $340,000 property, the money you owe the bank would be $331,883 due to the added 2.75% CMHC insurance premium. This added $8883, plus interest, obviously makes the case for buying less compelling. Then, are there other closing costs that haven't been fully considered? One more thing I ought to mention: Have you considered saving a larger down-payment by using an RRSP? There's a significant advantage doing it that way: You can save pre-tax dollars for your down-payment. When it comes time to buy, you'd take advantage of the Home Buyer's Plan (HBP) and get a tax-free loan of your own money from your RRSP. You'd have 15 years to put the money back into your RRSP. Last, after saving a larger downpayment, if you're lucky you may find houses not as expensive when you're ready to buy. I acknowledge this is a speculative statement, and there's a chance houses may actually be more expensive, but there is mounting evidence and opinion that real estate is currently over-valued in Canada. Read here, here, and here.\"",
"title": ""
},
{
"docid": "a405c923ef9d9630e97eaa6925869c1a",
"text": "My experience with owning a home is that its like putting down roots and can be like an anchor holding you to an area. Before considering whether you can financially own a home consider some of the other implications. Once you own it you are stuck for awhile and cannot quickly move away like you can with renting. So if a better job opportunity comes up or your employer moves you to another office across town that doubles your commute time, you'll be regretting the home purchase as it will be a barrier to moving to a more convenient location. I, along with my fiancée and two children, are being forced to move out of my parents home ASAP. Do not rush buying a home. Take your time and find what you want. I made the mistake once of buying a home thinking I could take on some DIY remodeling to correct some features I wasn't fond of. Life intervenes and finding extra time for DIY house updates doesn't come easy, especially with children. Speaking of children, consider the school district when buying a home too. Often times homes in good school districts cost more. If you don't consider the school district now, then you may be faced with a difficult decision when the kids start school. IF you are confident you won't want to move anytime soon and can find a house you like and want to jump into home ownership there are some programs that can help first time buyers, but they can require some effort on your part. FHA has a first time buyer program with a 3.5% down payment. You will need to search for a lender that offers FHA loans and work with them. FHA covers this program by charging mortgage insurance every month that's part of your house payment. Fannie Mae has the HomeReady program where first time home buyers can purchase a foreclosed home from their inventory for as little as 3% down and possibly get up to 3% from the seller to apply toward closing costs. Private mortgage insurance (PMI) is required with this program too. Their inventory of homes can be found on the https://www.homepath.com/ website. There is also NACA, which requires attending workshops and creating a detailed plan to prove you're ready for homeownership. This might be a good option if they have workshops in your area and you want to talk with someone in person. https://www.naca.com/about/",
"title": ""
},
{
"docid": "97fd99a51984de3474ad8e5da3acae09",
"text": "Buying a house may save you money compared with renting, depending on the area and specifics of the transaction (including the purchase price, interest rates, comparable rent, etc.). In addition, buying a house may provide you with intangibles that fit your lifestyle goals (permanence in a community, ability to renovate, pride of ownership, etc.). These factors have been discussed in other answers here and in other questions. However there is one other way I think potential home buyers should consider the financial impact of home ownership: Buying a house provides you with a natural 'hedge' against possible future changes in your cost of living. Assume the following: If these two items are true, then buying a home allows you to guarantee today that your monthly living expenses will be mostly* fixed, as long as you live in that community. In 2 years, if there is an explosion of new residents in your community and housing costs skyrocket - doesn't affect you, your mortgage payment [or if you paid cash, the lack of mortgage payment] is fixed. In 3 years, if there are 20 new apartment buildings built beside you and housing costs plummet - doesn't affect you, your mortgage payment is fixed. If you know that you want to live in a particular place 20 years from now, then buying a house in that area today may be a way of ensuring that you can afford to live there in the future. *Remember that while your mortgage payment will be fixed, other costs of home ownership will be variable. See below. You may or may not save money compared with rent over the period you live in your house, but by putting your money into a house, you have protected yourself against catastrophic rent increases. What is the cost of hedging yourself against this risk? (A) The known costs of ownership [closing costs on purchase, mortgage interest, property tax, condo fees, home insurance, etc.]; (B) The unknown costs of ownership [annual and periodic maintenance, closing costs on a future sale, etc.]; (C) The potential earnings lost on your down payment / mortgage principal payments [whether it is low-risk interest or higher risk equity]; (D) You may have reduced savings for a long period of time which would limit your ability to cover emergencies (such as medical costs, unexpected unemployment, etc.) (E) You may have a reduced ability to look for a better job based on being locked into a particular location (though I have assumed above that you want to live in a particular community for an extended period of time, that desire may change); and (F) You can't reap the benefits of a rental market that decreases in real dollars, if that happens in your market over time. In short, purchasing a home should be a lifestyle-motivated decision. It financially reduces some the fluctuation in your long-term living costs, with the trade-off of committed principal dollars and additional ownership risks including limited mobility.",
"title": ""
},
{
"docid": "0bcbb94c232d3c08232b50344bfc12be",
"text": "The £500 are an expense associated with the loan, just like interest. You should have an expense account where you can put such financing expenses (or should create a new one). Again, treat it the same way you'll treat interest charges in future statements.",
"title": ""
},
{
"docid": "48868ffe482149e6978a8f1257960eff",
"text": "The calculations you suggest have some issues, but I think they are not necessary to answer the question: It sounds like you are buying the house either way. So the question really is simply whether to pay toward your house first or your loan first. In that case, the answer is simple: pay whichever has the highest interest rate first. Make the minimum payment on the other until the first is paid off. Remember this and make it your mantra for the rest of your life. If you have any debts (such as credit cards) that charge a rate higher than the two options you have presented, do them first. Now, be careful as you compute the interest rates. Most likely you can deduct interest on your mortgage, so its effective interest rate is lower [it is (1-T)*R instead of R, where T is your marginal tax rate]. For a while, the cost of mortgage insurance will make your effective mortgage rate artificially high, but it sounds like you intend to get to that 20% hurdle pretty fast, so my guess is that this is not a big factor. Congratulations on your bonus and good luck with your new home.",
"title": ""
},
{
"docid": "18cb1c1a05f67853bb594568740c7fa2",
"text": "\"No magic answers here. Housing is a market, and the conditions in each local market vary. I think impact on cash flow is the best way to evaluate housing prices. In general, I consider a \"\"cheap\"\" home to cost 20% or less of your income, \"\"affordable\"\" between 20-30% and \"\"not affordable\"\" over 30%. When you start comparing rent vs. buy, there are other factors that you need to think about: Renting is an easy transaction. You're comparing prices in a market that is usually pretty stable, and your risk and liability is low. The \"\"cost\"\" of the low risk is that you have virtually no prospects of recouping any value out of the cash that you are laying out for your home. Buying is more complex. You're buying a house, building equity and probably making money due to appreciation. You need to be vigilant about expenses and circumstances that affect the value of your home as an investment. If you live in a high-tax state like New York, an extra $1,200 in property taxes saps over $16,000 of buying (borrowing) power from a future purchaser of your home. If your HOA or condo association is run by a pack of idiots, you're going to end up paying through the nose for their mistakes. Another consideration is your tastes. If you tend to live above your means, you're not going to be able to afford necessary maintenance on the house that you paid too much for.\"",
"title": ""
},
{
"docid": "e58a8128222084751b0288d74167d85e",
"text": "In general you must charge HST on and after July 1, 2010. However, in the case of delivered sales, you must charge HST if the transfer of goods will happen on or after July 1,2010. Example: A person comes into my hypothetical store on June 29, 2010 and buys a couch. They opt to have it delivered by my truck on July 2, 2010. I should charge HST on this purchase, not GST/PST. References:",
"title": ""
}
] |
fiqa
|
61355164a466c00fe520f54c6a34c7c4
|
Calculate price to earning and price to sale value for given dataset
|
[
{
"docid": "174e7774435b2f45ec3b37e9755dac8b",
"text": "Too calculate these values, information contained in the company's financial statements (income, balance, or cashflow) will be needed along with the price. Google finance does not maintain this information for BME. You will need to find another source for this information or analyze another another symbol's financial section (BAC for example).",
"title": ""
}
] |
[
{
"docid": "daeeb14027f41c5f88d2279f2b4837d5",
"text": "nice work! really enjoyed looking through your website. do you see any possible application of Machine Learning (specifically tensorflow) to this? I was thinking about building a trading bot that uses data from various APIs as a strategy just as an experiment but I'm wondering what your insights are.",
"title": ""
},
{
"docid": "9a52969d6de27e78057142e53b34db9c",
"text": "You're realizing the perils of using a DCF analysis. At best, you can use them to get a range of possible values and use them as a heuristic, but you'll probably find it difficult to generate a realistic estimate that is significantly different than where the price is already.",
"title": ""
},
{
"docid": "f4ea07c1d545d71f26856ad9d46c4ed8",
"text": "Outside of software that can calculate the returns: You could calculate your possible returns on that leap spread as you ordinarily would, then place the return results of that and the return results for the covered call position side by side for any given price level of the stock you calculate, and net them out. (Netting out the dollar amounts, not percentage returns.) Not a great answer, but there ya go. Software like OptionVue is expensive",
"title": ""
},
{
"docid": "41372fce8481716fd887860e6d3e94db",
"text": "The three places you want to focus on are the income statement, the balance sheet, and cash flow statement. The standard measure for multiple of income is the P/E or price earnings ratio For the balance sheet, the debt to equity or debt to capital (debt+equity) ratio. For cash generation, price to cash flow, or price to free cash flow. (The lower the better, all other things being equal, for all three ratios.)",
"title": ""
},
{
"docid": "593f6298656a2b96117729003a4e30dd",
"text": "You bought 1 share of Google at $67.05 while it has a current trading price of $1204.11. Now, if you bought a widget for under $70 and it currently sells for over $1200 that is quite the increase, no? Be careful of what prices you enter into a portfolio tool as some people may be able to use options to have a strike price different than the current trading price by a sizable difference. Take the gain of $1122.06 on an initial cost of $82.05 for seeing where the 1367% is coming. User error on the portfolio will lead to misleading statistics I think as you meant to put in something else, right?",
"title": ""
},
{
"docid": "67fe7636e0ee67c732c363fae29c6bef",
"text": "That is true. You will not be able to reconstruct the value of the index from the data returned with this script. I initially wrote this script because I wanted data for a lot of stocks and I wanted to perform PCA on the stocks currently included in the index.",
"title": ""
},
{
"docid": "c091e3281e221f90416b841dccd337be",
"text": "Ok maybe I should have went into further detail but I'm not interested in a single point estimate to compare the different options. I want to look at the comparable NPVs for the two different options for a range of exit points (sell property / exit lease and sell equity shares). I want to graph the present values of each (y-axis being the PVs and x-axis being the exit date) and look at the 'cross-over' point where one option becomes better than the other (i'm taking into account all of the up front costs of the real estate purchase which will be a bit different in the first years). i'm also looking to do the same for multiple real estate and equity scenarios, in all likelihood generate a distribution of cross-over points. this is all theoretical, i'm not really going to take the results to heart. merely an exercise and i'm tangling with the discount rates at the moment.",
"title": ""
},
{
"docid": "ec3d2ef054779dcb4a3ca4667c2cdb52",
"text": "( t2 / t1 ) - 1 Where t2 is the value today, t1 is the value 12 months ago. Be sure to include dividend payments, if there were any, to t2. That will give you total return over 12 months.",
"title": ""
},
{
"docid": "35a4bbdf656a4b0e349eb5bf63dd1e6d",
"text": "\"Treat each position or partial position as a separate LOT. Each time you open a position, a new lot of shares is created. If you sell the whole position, then the lot is closed. Done. But if you sell a partial quantity, you need to create a new lot. Split the original lot into two. The quantities in each are the amount sold, and the amount remaining. If you were to then buy a few more shares, create a third lot. If you then sell the entire position, you'll be closing out all the remaining lots. This allows you to track each buy/sell pairing. For each lot, simply calculate return based on cost and proceeds. You can't derive an annualized number for ALL the lots as a group, because there's no common timeframe that they share. If you wish to calculate your return over time on the whole series of trades, consider using TWIRR. It treats these positions, plus the cash they represent, as a whole portfolio. See my post in this thread: How can I calculate a \"\"running\"\" return using XIRR in a spreadsheet?\"",
"title": ""
},
{
"docid": "6f5601bc847b9b759754505aebe97c44",
"text": "Unfortunately I believe there is not a good answer to this because it's not a well posed problem. It sounds like you are looking for a theoretically sound criteria to decide whether to sell or hold. Such a criteria would take the form of calculating the cost of continuing to hold a stock and comparing it to the transactions cost of replacing it in your portfolio. However, your criteria for stock selection doesn't take this form. You appear to have some ad hoc rules defining whether you want the stock in your portfolio that provide no way to calculate a cost of having something in your portfolio you don't want or failing to have something you do want. Criteria for optimally rebalancing a portfolio can't really be more quantitative than the rules that define the portfolio.",
"title": ""
},
{
"docid": "7b8658a97c1892504d56a0ec070df7d3",
"text": "If you have two other assets whose payoffs tomorrow are known and whose prices today are known, you can value it. Let's say you can observe a risk-free bond and a stock. Using those, you can calculate the state prices/risk-neutral probabilities. NOTE: You do not need to know the true probabilities. The value of your asset is then the state-price weighted sum of future payoffs.",
"title": ""
},
{
"docid": "04b7de29b81964c51f8be69e5e3d5cfe",
"text": "\"I don't have a formula for anything like this, but it is important to note that the \"\"current value\"\" of any asset is really theoretical until you actually sell it. For example, let's consider a house. You can get an appraisal done on your house, where your home is inspected, and the sales of similar houses in your area are compared. However, this value is only theoretical. If you found yourself in a situation where you absolutely had to sell your house in one week, you would most likely have to settle for much less than the appraised value. The same hold true for collectibles. If I have something rare that I need cash for immediately, I can take it to a pawn shop and get cash. However, if I take my time and locate a genuinely interested collector, I can get more for it. This is comparable to someone who holds a significant percentage of shares in a publicly held corporation. If the current market value of your shares is $10 million, but you absolutely need to sell your entire stake today, you aren't going to get $10 million. But if you take your time selling a little at a time, you are more likely to get much closer to this $10 million number. A \"\"motivated seller\"\" means that the price will drop.\"",
"title": ""
},
{
"docid": "31be2354e66b8c8d907fe6f1052f9a87",
"text": "Yes, exactly. VaR is just a single tailed confidence interval. To go from model to strategy, you need to design some kind of indicator (i.e. when to buy and when to short or stay out). In practice, this will look like a large matrix with values ranging from -1 to 1 (corresponding to shorting and holding respectively) for each security and each day (or hour, or minute, or tick, etc.), which you then just multiply with the matrix of the stock returns. The resulting matrix will be your daily returns for each stock, you can then just row sum for daily returns of a portfolio, or calculate a cumulative product for cumulative returns. A simple example of an indicator would be something like a value of 1 when the price of the stock is below the 30 day moving average, and 0 otherwise. You can use a battery of econometric models to design these indicators, but the rest of the strategy design is essentially the same, and it's *relatively* easy to build a one-size-fits-all back-testing code. I'll try to edit this post later and link a blog that goes through some of the code. Edit: [Here](http://www.signalplot.com/simple-machine-learning-model-trade-spy/) is a post that discusses implementing a simple ML strategy. You can ignore most of the content but if you go through the github, you'll see how the ML model is implemented as a strategy. An even easier example can be found from [the github connected to this post](http://www.signalplot.com/how-to-measure-the-performance-of-a-trading-strategy/), where the author is just using a totally arbitrary signal. As you can see, deriving a signal can be a ton of work, but once you have, actually simulating the strategy can be done in just a few lines of code. Hopefully the author won't mind me linking his page here, but I find his coding style to be very clean and good for educational purposes.",
"title": ""
},
{
"docid": "ce932128386e9ac1e3bdbe0c347a0ad7",
"text": "If annualized rate of return is what you are looking for, using a tool would make it a lot easier. In the post I've also explained how to use the spreadsheet. Hope this helps.",
"title": ""
},
{
"docid": "7af4f32798568d7e60f0dbc247e02a37",
"text": "The price-earnings ratio is calculated as the market value per share divided by the earnings per share over the past 12 months. In your example, you state that the company earned $0.35 over the past quarter. That is insufficient to calculate the price-earnings ratio, and probably why the PE is just given as 20. So, if you have transcribed the formula correctly, the calculation given the numbers in your example would be: 0.35 * 4 * 20 = $28.00 As to CVRR, I'm not sure your PE is correct. According to Yahoo, the PE for CVRR is 3.92 at the time of writing, not 10.54. Using the formula above, this would lead to: 2.3 * 4 * 3.92 = $36.06 That stock has a 52-week high of $35.98, so $36.06 is not laughably unrealistic. I'm more than a little dubious of the validity of that formula, however, and urge you not to base your investing decisions on it.",
"title": ""
}
] |
fiqa
|
fe548ab8a5b11895710317d87ef900d6
|
NYSE & NASDAQ: Mkt Cap: $1 billion+
|
[
{
"docid": "d6614c80a1bfd3d9994c53dd2e02b2ba",
"text": "Try Google Finance Screener ; you will be able to filter for NASDAQ and NYSE exchanges.",
"title": ""
}
] |
[
{
"docid": "fca73e29b05038112a00f43c8a4f49ef",
"text": "You are right: if the combined value of all outstanding GOOG shares was $495B, and the combined value of all GOOGL shares was $495B, then yes, Alphabet would have a market cap of at least $990B (where I say at least only because I myself don't know that there aren't other issues that should be in the count as well). The respective values of the total outstanding GOOG and GOOGL shares are significantly less than that at present though. Using numbers I just grabbed for those tickers from Google Finance (of course), they currently stand thus:",
"title": ""
},
{
"docid": "06dc44ec6dd66aab8e5af5fb3f406ed7",
"text": "There's a case to be made that companies below a certain market cap have more potential than the higher ones. Consider, Apple cannot grow 100 fold from its current value. At $700B or so in value, that would be a $70T goal, just about the value of all the combined wealth in the entire US. At some point, the laws of large numbers take over, and exponential growth starts to flatten out. On the flip side, Apple may have as good or better chance to rise 10% over the next 6-12 months as a random small cap stock.",
"title": ""
},
{
"docid": "37c41674cbb1ba864f913bcb17ba5cf5",
"text": "\"EDIT: It was System Disruption or Malfunctions August 24, 2015 2:12 PM EDT Pursuant to Rule 11890(b) NASDAQ, on its own motion, in conjunction with BATS, and FINRA has determined to cancel all trades in security Blackrock Capital Investment. (Nasdaq: BKCC) at or below $5.86 that were executed in NASDAQ between 09:38:00 and 09:46:00 ET. This decision cannot be appealed. NASDAQ will be canceling trades on the participants behalf. A person on Reddit claimed that he was the buyer. He used Robinhood, a $0 commission broker and start-up. The canceled trades are reflected on CTA/UTP and the current charts will differ from the one posted below. It is an undesired effect of the 5-minute Trading Halt. It is not \"\"within 1 hour of opening, BKCC traded between $0.97 and $9.5\"\". Those trades only occurred for a few seconds on two occasions. One possible reason is that when the trading halt ended, there was a lot of Market Order to sell accumulated. Refer to the following chart, where each candle represents a 10 second period. As you can see, the low prices did not \"\"sustain\"\" for hours. And the published halts.\"",
"title": ""
},
{
"docid": "ea53f26fcd0dbb82c5c79e8ebe2c3638",
"text": "I think Infochimps has what you are looking for: NYSE and NASDAQ.",
"title": ""
},
{
"docid": "a8c371e758fe5e0eb141b70578ba7536",
"text": "\"You cannot determine this solely by the ticker length. However, there are some conventions that may help steer you there. Nasdaq has 2-4 base letters BATS has 4 base letters NYSE equity securities have 1-4 base letters. NYSE Mkt (formerly Amex) have 1-4 base letters. NYSE Arca has 4 base letters OTC has 4 base letters. Security types other than equities may have additional letters added, and each exchange (and data vendors) have different conventions for how this is handled. So if you see \"\"T\"\" for a US-listed security it would be only be either NASDAQ, NYSE or NYSE Mkt. If you see \"\"ANET\"\" then you cannot tell which exchange it is listed on. (In this case, ANET Arista Networks is actually a NYSE stock). For some non-equity security types, such as hybrids, and debt instruments, some exchanges add \"\"P\"\" to the end for \"\"preferreds\"\" (Nasdaq and OTC) and NYSE/NYSE Mkt have a variety of methods (including not adding anything) to the ticker. Examples include NYSE:TFG, NYSEMkt:IPB, Nasdaaq: AGNCP, Nasdaq:OXLCN. It all becomes rather confusing given the changes in conventions over the years. Essentially, you require data that provides you with ticker, listing location and security type. The exchanges allocate security tickers in conjunction with the SEC so there are no overlaps. eg. The same ticker cannot represent two different securities. However, tickers can be re-used. For example, the ticker AB has been used by the following companies:\"",
"title": ""
},
{
"docid": "5ee820eda84b17c1564e86100cc24e34",
"text": "Securities change in prices. You can buy ten 10'000 share of a stock for $1 each one day on release and sell it for $40 each if you're lucky in the future for a gross profit of 40*10000 = 400'0000",
"title": ""
},
{
"docid": "b81aca34c8417c4c10d3634f75262bc5",
"text": "Your 1099-B report for ADNT on the fractional shares of cash should answer this question for you. The one I am looking at shows ADNT .8 shares were sold for $36.16 which would equal a sale price of $45.20 per share, and a cost basis of $37.27 for the .8 shares or $46.59 per share.",
"title": ""
},
{
"docid": "cf39c3a9e8e02af032360611ed716696",
"text": "You're only counting one year. Let's say 30 years of data, minutewise, for 2,000 stocks, and 50 characters per data line. That's 1.5TB of data. Since the market has grown, that's an overestimate - 30 years ago there weren't 2,000 stocks in the NYSE - but it still gives us ballpark of roughly 1 TB. Not an easy download.",
"title": ""
},
{
"docid": "6fbcaaa231a65f94f3d123c19f7591cb",
"text": "\"It's easy to own many of the larger UK stocks. Companies like British Petroleum, Glaxo, and Royal Dutch Shell, list what they call ADRs (American Depositary Receipts) on the U.S. stock exchanges. That is, they will deposit local shares with Bank of NY Mellon, JP Morgan Chase, or Citicorp (the three banks that do this type of business), and the banks will turn around and issue ADRs equivalent to the number of shares on deposit. This is not true with \"\"small cap\"\" companies. In those cases, a broker like Schwab may occasionally help you, usually not. But you might have difficulty trading U.S. small cap companies as well.\"",
"title": ""
},
{
"docid": "548619a630faece1dba4884501db7316",
"text": "I should have been clearer but my point was that the NYSE seems to be blaming third party vendors for reporting invalid test data but their own website reported the same data so it seems like there might be another issue. Edit: Found the full comment. It seems that NASDAQ distributed the test data and other parties including the NYSE incorrectly displayed it. I can (barely) understand some third parties incorrectly reporting this data but it seems really bizarre that NYSE wouldn't know how to handle this.",
"title": ""
},
{
"docid": "254d3c4ab5e81ae4cf2edfc3312627fe",
"text": "Listing on NYSE has more associated overhead costs than listing on NASDAQ. In the case of young technology companies, this makes NASDAQ a more attractive option. Perhaps the most important factor is that NYSE requires that a company has an independent compensation committee and an independent nominating committee while NASDAQ requires only that executive compensation and nominating decisions are made by a majority of independent directors. No self-respecting, would-be-instant-billionare tech entreprenuer is going to want some independent committee lording it over their pay packet. Additionally, listing on NYSE requires a company have stated guidance for corporate governance while NASDAQ imposes no such requirement. Similarly, NYSE requires a company have an internal audit team while NASDAQ imposes no such requirement. Fees on NYSE are also a bit higher than NASDAQ, but the difference is not significant. A good rundown of the pros/cons: http://www.investopedia.com/ask/answers/062215/what-are-advantages-and-disadvantages-listing-nasdaq-versus-other-stock-exchanges.asp",
"title": ""
},
{
"docid": "458a5ee0d5fd74e8e9e32d5dd0a46556",
"text": "\"You are comparing two things that are not comparable. The \"\"market size\"\" would be the total annual revenue in one market, in this year. The \"\"market caps\"\" of a company is the number of shares multiplied by the share price. This should be equal to the total profit that the company is going to make through its life time, taking into account that you would get interest on an investment, so future profits have to be counted less accordingly. So if the \"\"market size\"\" is ten million dollars, and a company has four million revenue in that market with one million profit, and everyone thinks that company will continue making that profit for the next fifty years, then surely one million a year for the next 50 years is worth more than ten million. That's if the market stands still. If the \"\"market size\"\" is ten million, and we expect that market size to double for the next three years, then the market size is still ten million, but a company having a 40% share of a market growing at that speed is going to be worth a lot more!\"",
"title": ""
},
{
"docid": "e2720d73d578cb862d19d32313a83aac",
"text": "One share costs the 202 $. You need to invest 3000 $ total at a minimum, meaning you have to buy some 14.9 shares at minimum. You should not worry about the exact number of shares, they are just to keep track, and you can buy every decimal part of them too. For example, if you invest now 5000 $, you will get 24.7525 shares. Next year, if they are for example worth 220 $ per share, you have a value of 24.7525 * 220 = 5445.55 $ It depends on the offering company, but that (a certain fixed amount per paycheck) is a typical way to invest (and a good way - you implictly take advantage of prices changing a bit - you buy more shares when the price is down and less when it's up). Probably you can make it an automated deduction from your checking account, or you send it every week/month/whenever. Good plan!",
"title": ""
},
{
"docid": "ab781496800a13ed176c6fd1c5a90fde",
"text": "\"I bought 1000 shares of Apple, when it was $5. And yet, while the purchase was smart, the sales were the dumbest of my life. \"\"You can't go wrong taking a profit\"\" \"\"When a stock doubles sell half and let it ride\"\", etc. It doubled, I sold half, a $5000 gain. Then it split, and kept going up. Long story short, I took gains of just under $50,000 as it rose, and had 100 shares left for the 7 to 1 split. The 700 shares are worth $79,000. But, if I simply let it ride, 1000 shares split to 14,000. $1.4M. I suppose turning $5,000 into $130K is cause for celebration, but it will stay with me as the lost $1.3M opportunity. Look at the chart and tell me the value of selling stocks at their 52 week high. Yet, if you chart stocks heading into the dotcom bubble, you'll see a history of $100 stocks crashing to single digits. But none of them sported a P/E of 12.\"",
"title": ""
},
{
"docid": "2649f29b989d8e7f895fca5b3d7d7194",
"text": "\"At the bottom of Yahoo! Finance's S & P 500 quote Quotes are real-time for NASDAQ, NYSE, and NYSE MKT. See also delay times for other exchanges. All information provided \"\"as is\"\" for informational purposes only, not intended for trading purposes or advice. Neither Yahoo! nor any of independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. By accessing the Yahoo! site, you agree not to redistribute the information found therein. Fundamental company data provided by Capital IQ. Historical chart data and daily updates provided by Commodity Systems, Inc. (CSI). International historical chart data, daily updates, fund summary, fund performance, dividend data and Morningstar Index data provided by Morningstar, Inc. Orderbook quotes are provided by BATS Exchange. US Financials data provided by Edgar Online and all other Financials provided by Capital IQ. International historical chart data, daily updates, fundAnalyst estimates data provided by Thomson Financial Network. All data povided by Thomson Financial Network is based solely upon research information provided by third party analysts. Yahoo! has not reviewed, and in no way endorses the validity of such data. Yahoo! and ThomsonFN shall not be liable for any actions taken in reliance thereon. Thus, yes there is a DB being accessed that there is likely an agreement between Yahoo! and the providers.\"",
"title": ""
}
] |
fiqa
|
5dfaefb947352a94d7a32e2a55612dae
|
Will a Barclaycard Visa help me in building up credit score?
|
[
{
"docid": "8a8b5d1cc34bebe4d47588994d14e37b",
"text": "Payment history is probably the most significant contributor to your credit score. Having a solid history of making, at least the minimum, payments on time will have a positive impact on your credit score. Whether or not this specific transaction means anything to that equation is up for debate. If you have no credit lines now and 0% for 18 months on a computer makes sense to you, then yes, making this purchase this way and paying on time will have a positive impact on your credit score. Paying interest doesn't help your credit score. Repay this computer before the 18 month period ends, then be sure to pay your balance in full every month thereafter.",
"title": ""
}
] |
[
{
"docid": "720826f9bcda8f43ce64a55e6a773523",
"text": "I plan to stay debt free, but I appreciate the non-debt-related advantages of having a good credit score. If you plan to stay debt-free, then opening up more cards will not significantly change your credit score. You seem to want to be going from a good score to a great score, which adding cards alone will not do. Also, I highly doubt it will significantly affect any of the five things you mention. If you had a bad credit score, then I could see some effect on renting an apartment, getting a job (where trust with money is a component of the job), etc., but don't try to game the system for some number. You won't magically get cheaper cell phone rates, lower insurance premiums, etc.",
"title": ""
},
{
"docid": "b6f9d20330413449160f7a9aee60bbfa",
"text": "If you can set up automatic payments (like direct debits in the UK) and you can be disciplined enough to not spend the money on something else then this can be a good way of building/improving your credit rating. Banks / Lenders like it when they see you have previously taken, and repaid, credit. This can help you get better finance deals etc. in the future. Update: as noted in the comments France had a different financial system and people do not have credit ratings, so this point isn't valid in France",
"title": ""
},
{
"docid": "39aa9172cca72e1bd3023423e442c419",
"text": "Not only should you do this, you should tell your friends to do it too. Especially if a parent comes in to the bank with the child, banks fall over themselves to provide a card to someone whose only income is allowance. Really. Later, if you're 21 and your car broke and you don't get paid for another 11 days, NOBODY will lend you the money (or those money mart places that charge 300% a year will) to fix it. Never mind score (and yes for sure having a good score will be a result, and a good one) just having the card for emergencies makes all the difference to your early twenties. My kids have several friends who now can't get credit cards (some are students, some are underemployed) and end up missing paid days of work due to car troubles they can't pay to fix, or using those payday lenders, or other things that keep you poor. Get one while you can. Using it sensibly means you will have a great credit score in a decade or so, but just plain having it is worth more than you can know if you're not 18 yet.",
"title": ""
},
{
"docid": "07f3d7d55faa849cd46667f837f89792",
"text": "First, you need to be aware that the credit score reported by Mint is Equifax Credit Score. Equifax Credit Score, like FICO, Vantagescore, and others, is based on a proprietary formula that is not publicly available. Every score is calculated with a different formula, and can vary from each other widely. Lenders almost exclusively only use FICO scores, so the score number you have is likely different than the score lenders will use. Second, understand that the advice you see from places like Mint and Credit Karma will almost always tell you that you don't have enough credit card accounts. The reason for this is that they make their money by referring customers to credit card applications. They have a financial interest in telling you that you need more credit cards. Finally, realize that credit score is just a number, and is only useful for a limited number of things. Higher is better to a point, and after that, you get no benefit from increasing your score. My advice to you is this: Don't stress out about your credit score, especially a free score reported by Credit Karma or Mint. If you really have a desire to find out your score, you can pay FICO to get your actual score, but it's not cheap. You can also sometimes get your FICO score by applying for a loan and asking the lender. I last saw my FICO scores (there were three, one from each credit bureau) when I applied for a mortgage a couple of years ago, and the mortgage rep gave them to me for free. But honestly, knowing your score doesn't do much for you, as the best way to increase it is to simply make your payments on time and wait. Don't give in to bad conventional advice from places that are funded by the financial services industry. The thing that makes your credit score go up is a long history of paying your bills on time. Despite what you commonly read about credit scores, I'm not convinced that you can radically boost your scores by having lots of open credit card accounts. At the time I applied for my last mortgage, I only had 2 open credit cards (still true), and the oldest open account was about 1.5 years old. The average of my 3 scores was just over 800. But I've been paying my bills on time for at least 20 years now. Only get credit cards that you actually want, and close the ones you don't want.",
"title": ""
},
{
"docid": "ca4efa920bc59cb71bee8163139124a8",
"text": "I think you are interpreting their recommended numbers incorrectly. They are not suggesting that you get 13-21 credit cards, they are saying that your score could get 13-21 points higher based on having a large number of credit cards and loans. Unfortunately, the exact formula for calculating your credit score is not known, so its hard to directly answer the question. But I wouldn't go opening 22+ credit cards just to get this part of the number higher!",
"title": ""
},
{
"docid": "4e137c5118857ce78a598f8de95d17a1",
"text": "\"It appears that you already know this, but FICO credit scores (as controlled by Fair Isaac Corporation) are the real official credit scores, and FICO takes a cut on their production no matter which of the 3 major credit bureaus calculates the official score (all using slightly different methods). Be careful when obtaining a score for making a big decision that it is a FICO score, because relatively few lenders will lend based on a non-FICO score. That said, some non-FICO scores are easy to obtain and can be roughly translated to an approximation of your score. Barclays US/ Juniper Bank credit cards offer a free Transunion \"\"TransRisk\"\"(TM) score. The TransRisk score is a 900 point scale, while the FICO score is an 850 point scale. This is a simple ratio and you can calculate your approximate FICO score by the formula:\"",
"title": ""
},
{
"docid": "13a0e39315b53b0fd86165869dc586b9",
"text": "The length of time you have established credit does improve your credit score in the long run. As long as you can avoid paying interest, you might see if you can get a card with cash back rewards. I have one from Citi that sends me a $50 check every so often when I have enough rewards built up.",
"title": ""
},
{
"docid": "6aad61ddbccad0f0214ba83c1748470d",
"text": "IIRC it's not a FICO score, as mentioned here, too. That said, apart from borrowing money to optimise your credit score as a hobby, my understanding is that once you're above a FICO score of 750, it pretty much doesn't matter how close to 800 you get.",
"title": ""
},
{
"docid": "3cc6c9116769ff348070c66a1ed49129",
"text": "\"A credit card is a way to borrow money. That's all. Sometimes the loans are very small - $5 - and sometimes they are larger. You can have a credit card with a company (bank or whatever) that you have no other relationship with. They're not a property of a bank account, they are their own thing. The card you describe sounds exactly like a debit card here, and you can treat your Canadian debit card like your French credit card - you pay for things directly from your bank account, assuming the money is in there. In Canada, many small stores take debit but not credit, so do be sure to get a debit card and not only a credit card. Now as to your specific concerns. You aren't going to \"\"forget to make a wire.\"\" You're going to get a bill - perhaps a paper one, perhaps an email - and it will say \"\"here is everything you charged on your credit card this month\"\" along with a date, which will be perhaps 21 days from the statement date, not the date you used the card. Pay the entire balance (not just the minimum payment) by that date and you'll pay no interest. The bill date will be a specific date each month (eg the 23rd) so you can set yourself a reminder to check and pay your bill once a month. Building a credit history has value if you want to borrow a larger amount of money to buy a car or a house, or to start a business. Unlike the US, it doesn't really have an impact on things like getting a job. If you use your card for groceries, you use it enough, no worries. In 5 years it is nice to look back and see \"\"never paid late; mostly paid the entire amount each month; never went over limit; never went into collections\"\" and so on. In my experience you can tell they like you because they keep raising your limit without you asking them to. If you want to buy a $2500 item and your credit limit is $1500 you could prepay $1000 onto the credit card and then use it. Or you could tell the vendor you'd rather use your debit card. Or you could pay $1500 on the credit card and then rest with your debit card. Lots of options. In my experience once you get up to that kind of money they'd rather not use a credit card because of the merchant fees they pay.\"",
"title": ""
},
{
"docid": "deaa83b849c38055661efd74493c55d2",
"text": "I would say you are typical. The way people are able to build their available credit, then subsequently build their average balances is buy building their credit score. According to FICO your credit score is made up as follows: Given that you had no history, and only new credit you are pretty much lacking in all areas. What the typical person does, is get a card, pay on it for 6 months and assuming good history will either get an automatic bump; or, they can request a credit limit increase. Credit score has nothing to do with wealth or income. So even if you had 100K in the bank you would likely still be facing the same issue. The bank that holds the money might make an exception. It is very easy to see how a college student can build to 2000 or more. They start out with a $200 balance to a department store and in about 6 months they get a real CC with a 500 balance and one to a second department store. Given at least a decent payment history, that limit could easily increase above 2500 and there could be more then one card open. Along the lines of what littleadv says, the companies even welcome some late payments. The fees are more lucrative and they can bump the interest rate. All is good as long as the payments are made. Getting students and children involved with credit cards is a goal of the industry. They can obtain an emotional attachment that goes beyond good business reasoning.",
"title": ""
},
{
"docid": "953b47450cda011d6803d18a238445f0",
"text": "When you start living in US, it doesn't actually matter what was your Credit history in another country. Your Credit History in US is tied to your SSN (Social Security Number), which will be awarded once you are in the country legally and apply for it. Getting an SSN also doesn't guarantee you nothing and you have to build your credit history slowly. Opening a Checking or Savings account will not help you in building a credit history. You need to have some type of Credit Account (credit card, car loan, mortgage etc.) linked to your SSN to start building your credit history. When you are new to US, you probably won't find any bank that will give you a Credit Card as you have no Credit history. One alternative is to apply for a secured credit card. A secured credit card is one you get by putting money or paying money to a bank and open a Credit Card against that money, thereby the bank can be secure that they won't lose any money. Once you have that, you can use that to build up your credit history slowly and once you have a good credit history and score, apply for regular Credit Card or apply for a car loan, mortgage etc. When I came to US 8 years ago, my Credit History was nothing, even though I had pretty good balance and credit history back in my country. I applied for secured credit card by paying $500 to a bank ( which got acquired by CapitalOne ), got it approved and used it for everything, for three years. I applied for other cards in the mean time but got rejected every time. Finally got approved for a regular credit card after three years and in one year added a mortgage and car loan, which helped me to get a decent score now. And Yes, a good Credit Score is important and essential for renting an apartment, leasing a car, getting a Credit Card etc. but normally your employer can always arrange for an apartment given your situation or you need to share apartment with someone else. You can rent a car without and credit score, but need a valid US / International Drivers license and a Credit Card :-) Best option will be to open a secured credit card and start building your credit. When your wife and family arrives, they also will be assigned individual SSN and can start building their credit history themselves. Please keep in mind that Credit Score and Credit History is always individual here...",
"title": ""
},
{
"docid": "7a973884516a9b20614aa458246f2d06",
"text": "No, it will have no negative impact on getting a mortgage. You are building up a history with regular payments and are not carrying a balance on the card each month. Your ability to get a mortgage will ultimately be based on other things. Money Saving Expert has a good guide on what will affect your credit score. A further discussion on the topic that backs up that what a mortgage company is interested in is affordability and a stable history. They really don't care about utilisation ratios. (Though might be spooked by almost maxed out cards - sign of poor spending control, or large unused limits - too easy to go into bad debt.)",
"title": ""
},
{
"docid": "eb7a7cd5bd0ca3f03ebe2c68702097f3",
"text": "\"In the other question, the OP had posted a screenshot (circa 2010) from Transunion with suggestions on how to improve the OP's credit score. One of these suggestions was to obtain \"\"retail revolving accounts.\"\" By this, they are referring to credit accounts from a particular retail store. Stores have been offering credit accounts for many years, and today, this usually takes the form of a store credit card. The credit card does not have the Visa or MasterCard logo on it, and is only valid at that particular store. (For example, Target has their own credit card that only works at Target stores.) The \"\"revolving\"\" part simply means that it is an open account that you can continue to make new charges and pay off, as opposed to a fixed retail financing loan (such as you might get at a high-end furniture store, where you obtain a loan for a single piece of furniture, and when it is paid off, the account is closed). The formula for credit scores are proprietary secrets. However, I haven't read anything that indicates that a store credit card helps your credit score more than a standard credit card. I suspect that Transunion was offering this tip in an attempt to give the consumer more ideas of how to add credit cards to their account that the consumer might not have thought of. But it is possible that buried deep in the credit score formula, there is something in there that gives you a higher score if you have a store credit card. As an aside, the OP in the other question had a credit score of 766 and was trying to make it higher. In my opinion, this is pointless. Remember that the financial services industry has an incentive to sell you as much debt as possible, and so all of their advice will point to you getting more credit accounts and getting more in debt.\"",
"title": ""
},
{
"docid": "4f7d7b47297fe882b41f5d99354d601a",
"text": "\"Credit Unions have long advocated their services based on the fact that they consider your \"\"character.\"\" Unfortunately, they are then at a loss to explain how they determine the value of your character, other than to say that you're buddies & play pool together so they'll give you a loan. Your Credit History / Score is as accurate a representation of your character in business dealings as can be meaningfully quantified. It tracks your ability to effectively use and manage debt, and your propensity to pay it back responsibly or default on obligations. While it isn't perfect, it is certainly one of the best means currently available for determining someone's trustworthiness when it comes to financial matters.\"",
"title": ""
},
{
"docid": "a84d165a29bb7733e13a2f080d5e5d4b",
"text": "FICO is a financial services company, whose customers are financial services companies. Their products are for the benefit of their customers, not consumers. The purpose of the credit score system is two-fold. First, the credit score is intended to make it easy for lending institutions (FICO's customers) to assess the risk of loans that they make. This is probably based on science, although the FICO studies and even the FICO score formula are proprietary secrets. The second purpose of the credit score is to incentivize consumers into borrowing money. And they have done a great job of that. If you think you might need a loan in the future, perhaps a mortgage or a car loan, you need a credit score. And the only way to get a credit score is to start borrowing money now that you don't need. Yes, someone with a good income and a long history of paying utility bills on time would be a great credit risk for a mortgage. However, that person will have no credit score, and therefore be declared by FICO as a bad credit risk. On the other hand, someone with a low income, who struggles, but succeeds, to make the minimum payment on their credit card, would have a better credit score. The advice offered to the first person is start borrowing money now, even though you don't need it. I'm not anti-credit card. I use a credit card responsibly, paying it off in full every month. I use it for the convenience. I don't worry at all about my credit score, but I've been told it is great. However, there are some people that cannot use a credit card responsibly. The temptation is too great. Perhaps they are like problem gamblers, I don't know. But FICO and the financial services industry have created a system that makes a credit card a necessity in many ways. These are the people that get hurt in the current system.",
"title": ""
}
] |
fiqa
|
fe4fd4dd6151dbc6b16548690aa55166
|
Can I use an HSA to pay financed payments for LASIK?
|
[
{
"docid": "198015a41448f5904fb55b3dd5dd4d6a",
"text": "From HSA Resources - I understand that I can reimburse myself from my HSA for qualified medical expenses that I pay out-of-pocket but is there a time limit? Do I need to reimburse myself in the same year? You have your entire lifetime to reimburse yourself. As long as you had your HSA established at the time the expense was incurred, you save the receipt and it was not otherwise reimbursed, you can reimburse yourself for the expense from your HSA even years later. The important thing not asked or mentioned above is that the HSA must be in place before the expense occurred. In your case, should the LASIK procedure be before the HSA is established, it's not an eligible expense.",
"title": ""
}
] |
[
{
"docid": "383ddd8c2d009ad12d29822101fc0526",
"text": "If you have enough medical expenses to empty your HSA tax free, that is certainly an option. However, you have another option. You could roll your HSA funds over to a different HSA that has better investment options. Doing this has a huge advantage over any other taxable account or retirement account: it will grow tax free, and you will be able to withdraw tax free at anytime, as long as you accumulate enough medical expenses to cover your gains. If you don't have a lot of money in your HSA now, it might not be worth the effort to maintain an HSA and continue to track your medical expenses. But if you have enough in there to invest, moving it to an investable HSA is probably a better option than simply moving it to a taxable account.",
"title": ""
},
{
"docid": "a581c549bb700c5bff6688f89e87356e",
"text": "\"Note that even if you are limited to the HSAs your employer provides, you can still set up your own HSA with whatever trustee you want and periodically transfer the funds from your employer sponsored HSA to your own HSA: according to IRS pub 969 \"\"Contributions to an HSA\"\" section: Rollovers A rollover contribution is not included in your income, is not deductible, and does not reduce your contribution limit. Archer MSAs and other HSAs. You can roll over amounts from Archer MSAs and other HSAs into an HSA. You do not have to be an eligible individual to make a rollover contribution from your existing HSA to a new HSA. Rollover contributions do not need to be in cash. Rollovers are not subject to the annual contribution limits. You must roll over the amount within 60 days after the date of receipt. You can make only one rollover contribution to an HSA during a 1-year period. Note. If you instruct the trustee of your HSA to transfer funds directly to the trustee of another HSA, the transfer is not considered a rollover. There is no limit on the number of these transfers. Do not include the amount transferred in income, deduct it as a contribution, or include it as a distribution on Form 8889. (italics mine) There may be minimums, opening, closing costs, etc. or whatever depending on each plan, but that's not limited by the IRS. So if you transfer the money yourself, you can only do it once per year, but there are no limits to when or how many times you can instruct the old HSA trustee to transfer funds directly to the new trustee. I also talked to the IRS today and they confirmed that you can have multiple HSA accounts as long as your total contributions don't exceed the yearly maximum (and from the quote above, transfers don't count as contributions).\"",
"title": ""
},
{
"docid": "ecbb430ddfcedf05f360e137448ae3c5",
"text": "You can use it for medical expenses even if you don't have a high deductible policy. It can cover prescriptions, copays, deductibles, co-insurance, dentist, orthodontics... As long as it is being used for an approved medical expense there is no tax or penalty. Yes it doesn't save you on the monthly service charges but it does allow you to cut your medical expenses for a while.",
"title": ""
},
{
"docid": "cbe3a03af5d76667f495282e9f00ae5c",
"text": "The big difference for me under the High deductible plan has been that instead of paying the co-pay, now I am now responsible for the negotiated rate until I reach the deductible limit. The HSA is only a way to funnel medical payments through a tax free account the insurance company and the doctor don't care about the HSA. If we go out-of-network, then I am responsible for the full rate, but they only count the negotiated rate as a credit against the out of pocket/deductible. This big difference makes it very important to pick a doctor in-network. For your example: I would have paid $50 under the PPO, but $200 under the high deducible plan. If I go out-of-network I would have to pay whatever the doctor want me to pay, but the insurance company would only credit me $200 against my deductible. I can pull the extra $350 from the HSA. It is hard to get good pricing information from some doctors, but the price difference for me has been so large that in-network is the only way to go. For prescriptions the high deductible plan has been worse, because we pay the full price with no discounts for the medicine, until we reach the plan deductible. That makes the cost of the prescriptions as much as 10x's more expensive. In fact the annual cost of our prescriptions all but guarantees that we hit the deductible each year.",
"title": ""
},
{
"docid": "ff67b6b4ab69f38708bc1cb49026d245",
"text": "You can designate one or more beneficiaries for your HSA account who will get the money when you die. Some states require consent from your spouse (if you're married) if they are not the beneficiary. The funds maybe taxable to the beneficiary. If you don't designate any beneficiaries, by default the money will go into your estate and be handled the same as other assets. The funds may be taxable by the estate. If you had any medical expenses before you died, it might be possible to pay them from the HSA. When looking around for information about this I would start with the IRS publications which are the authoritative source of this information. Other articles you read are usually just summarizations of this information and can sometimes be incomplete or incorrect. http://www.irs.gov/publications/p969/ar02.html#en_US_2014_publink1000204096",
"title": ""
},
{
"docid": "9388ab4bb06b6e09d8408b2e366b9bfa",
"text": "While this question Can I get a rebate after using my HSA? mentions Health savings account the answer is still applicable. Go to the website for the plan administrator. They will either have a form to put the money back into the account, or they will have a contact number. In the past when I had an FSA I did this. In one case I remember the doctor told us the bill would be X, but when they submitted the claim to the insurance the final bill was less than X so the doctor's office sent us the extra back. I was able to return the money back to the FSA administrator following their procedure. Your situation is not unusual, accidental transactions happen all the time.",
"title": ""
},
{
"docid": "7fe27cd851551c394c120c5aaf7b114b",
"text": "Yes, absolutely. The HSA, when used for medical expenses, allows you to essentially pay for your medical expenses tax free. Even if you don't have extra room in your budget, you can fund the HSA as you incur medical expenses, then withdraw money to pay the expenses, and you'll see an immediate tax benefit at tax time. However, let's say that you have plenty of room in your budget and you don't have a lot of medical expenses. You already contribute the maximum to your 401(k) or IRA, and you want to do more. The HSA acts like a retirement account in this case, allowing you to contribute before-tax money and let it grow untaxed. The HSA does have a huge benefit that no other retirement account has. If you choose not to reimburse yourself for medical expenses, but you keep track of the unreimbursed expenses you incur, then you can reimburse yourself for these expenses at any point in the future completely tax free. Essentially, your contributions are treated like a traditional IRA, but your withdrawals are treated like a Roth IRA, and can be done at any age. If you don't acquire enough medical expenses, you can still withdraw whatever is left at age 65 and those withdrawals will be taxed like a traditional IRA. The HSA provides for tax-free contributions and growth if used for medical expenses, and tax-deferred growth if withdrawn after age 65 without medical expenses.",
"title": ""
},
{
"docid": "2388e586f1afa11a9a0696737e0808a9",
"text": "If you know you will have a big bill, like braces. and you fully expect to hit the deductible then it can make sense. The deductible can trip some people up, because if they put too much into the limited purpose FSA and don't hit the deductible for the regular insurance policy, they can't get to all the money in the FSA. Because you have the ability to spend the potential money in the FSA before all the money has been contributed, it can allow you to make that payment for the braces in January. I did this the first year we had the HSA. I knew I needed to pay a dental bill early in the year. But the HSA would only have a few hundred dollars at that time, so I used the limited purpose FSA to be able to make that payment. This could also work if you spent a lot of money in the previous year. Because you have the ability to adjust how much money goes into the HSA each each pay period, this idea does keep the option open to fully fund the HSA if your finances improve. Regarding the deductible. The law limits what you can use the limited purpose FSA for: dental and vision only. There is an exception. If you hit the deductible for the high deductible insurance policy, then you can use the funds in the limited purpose FSA for ANY medical reason. When I did this a few years ago, I needed to send extensive paperwork to the company holding the funds before they would release the funds for dental. Once I sent them proof that I had met the deductible, then any medical expense after that date could use the FSA with minimal paperwork. If you fully fund the FSA beyond the cost of the braces, and then have a light year medical expense wise, you might not be able to spend all money in the FSA by the deadline. Regarding state taxes. I saw no difference in my states (Virginia) treatment of the funds. The state taxable income number was exactly the same as the federal taxable income number. It did not treat the money in the FSA differently than the money in the HSA.",
"title": ""
},
{
"docid": "1d6f0faf2adfc80f6b2f81af07236421",
"text": "The limits on an HSA are low enough that there's no real danger of overfunding it. The limits max out at (as of 2011, for an individual) at just over $3000 per year. Sometime in the next few years, you will have more than $3000 in health care expenses. It might be something like a car accident, acid reflux, a weird mole that the doctor wants to check out, a broken toe, a few nasty cavities that need to be filled, an expensive antibiotic, or something else entirely. Or, it might be something less dramatic, getting eaten away by copays and contact lenses. When that happens, you want the peace of mind that you can pay for your deductible plus any other expenses. Keep in mind that even a $5000 deductible can cost you more than $5000 out-of-pocket; either because of non-insured expenses, or simply an illness that straddles multiple calendar years. Besides, it's not like your HSA money is going anywhere; even if you never touch it, it's just a savings account that you can't touch until you turn 65. And if you do truly have an emergency, you can get at it if you have to. Even if your HSA is filled with several years' worth of deductibles, it's still a way to shield thousands of dollars a year from taxes, with luck moving them into lower-tax years 40 years from now. And it's a way that doesn't involve income limits or mandatory withdrawals.",
"title": ""
},
{
"docid": "977fee73e0cc40404b59e9fb59babf92",
"text": "I am currently switching careers and health insurance plans. I am interested in not rolling over and simply a withdrawal of my previous HSA account. What type of penalty would that be and who would I need to contact? The insurance company or the bank where the HSA is held?",
"title": ""
},
{
"docid": "743927f8d0169b21133e551371dd0ba0",
"text": "Here are the advantages to the HDHP/HSA option over the PPO option, some of which you've already mentioned: Lower premiums, saving $240 annually. Your employer is contributing $1500 to your HSA. As you mentioned, this covers your deductible if you need it, and if you don't, the $1500 is yours to keep inside your HSA. The ability to contribute more to your HSA. You will be able to contribute additional funds to your HSA and take a tax deduction. Besides the medical expenses applied to your deductible, HSA funds can be spent on medical expenses that are not covered by your insurance, such as dental, vision, chiropractic, etc. Anything left in your HSA at age 65 can be withdrawn just like with a traditional IRA, with tax due (but no penalty) on anything not spent on medical expenses. With the information that you've provided about your two options, I can't think of any scenario where you'd be better off with the PPO. However, you definitely want to look at all the rest of the details to ensure that it is indeed the same coverage between the two options. If you find differences, I wrote an answer on another question that walks you through comparing insurance options under different scenarios.",
"title": ""
},
{
"docid": "de59b4fddc4e69c4c035c760c1f86309",
"text": "This is referred to as an HSA Mistaken Distribution. An HSA mistaken distribution occurs when you take a distribution and later find out that it is not for a qualified medical expense. For example, this could occur if you accidentally pay for a restaurant dinner with your HSA debit card. It can also occur if you take a distribution to pay for a medical expense, but then are later reimbursed by insurance. This is discussed in the instructions for IRS forms 1099-SA and 5498-SA. (Note: these forms are submitted by the HSA bank, not the consumer, so the instructions are addressed to them.) HSA mistaken distributions. If amounts were distributed during the year from an HSA because of a mistake of fact due to reasonable cause, the account beneficiary may repay the mistaken distribution no later than April 15 following the first year the account beneficiary knew or should have known the distribution was a mistake. For example, the account beneficiary reasonably, but mistakenly, believed that an expense was a qualified medical expense and was reimbursed for that expense from the HSA. The account beneficiary then repays the mistaken distribution to the HSA. You have until April 15 in the year following the refund to repay the HSA and avoid the extra tax and penalty that should be paid if you were to keep the distribution that was not ultimately used for medical expenses. When you send the money to the HSA bank, you need to explicitly tell them that it is a mistaken distribution repayment, so that they can report it to the IRS correctly and it will not affect your contribution limits.",
"title": ""
},
{
"docid": "3611f0cf679453771729193f9c0d55b5",
"text": "\"As others have mentioned, you avoid \"\"payroll taxes\"\" (Medicaid, Social Security, etc) by using pre-tax money rather than post-tax money. However, there is one benefit to getting your own privately held one: you can choose the service provider. A previous employer's HSA charged $4/month, and did not allow me to invest in any funds unless I had over $4k in my account. However, a single year's maximum contribution is less than $4k, so it was stuck in a money market account perpetually. The tax saving probably is larger than both your monthly fees and your investment gains, but the HSA provider's rules are another (fairly-opaque) consideration.\"",
"title": ""
},
{
"docid": "6e39fe07dfeadb4e84115f0978785d46",
"text": "When you take any money out of an HSA, you'll get a 1099-SA. HSAs work a little differently than a 401(k). With a 401(k), you aren't supposed to take any money out until retirement. HSAs, however, are spending accounts. I take money out of my HSA every year. As long as you spend the money you take out of your HSA on qualified medical expenses, there are no taxes or penalties due. The bank that holds your HSA doesn't know or care what you spend the money on; they will certainly allow you to empty your HSA account. Anything you take out will be reported to the IRS (and to you) on a 1099-SA. At tax time, along with your tax return, you send in a form 8889, on which you report to the IRS what you took out of HSA, and you also certify how much of that money was spent on medical expenses. If any of it was spent on something else, taxes and penalties are due.",
"title": ""
},
{
"docid": "49f2eb68845aafe0cfeda952031ae99d",
"text": "There are a whole host of types of filings. Some of them are only relevant to companies that are publicly traded, and other types are general to just registered corps in general. ... and many more: http://reportstream.io/explore/has-form Overall, reading SEC filings is hard, and for some, the explanations of those filings is worth paying for. Source: I am currently trying to build a product that solves this problem.",
"title": ""
}
] |
fiqa
|
3cd71b95568b9882286b69c7b018903a
|
Effective interest rate for mortgage loan
|
[
{
"docid": "224a2b8fb722f75d47bbb68da882e4f8",
"text": "With the $2000 downpayment and interest rate of 11.5% nominal compounded monthly the monthly payments would be $970.49 As you state, that is a monthly rate of 0.9583% Edit With the new information, taking the standard loan equation where Let Now setting s = 98000, with d = 990.291 solve for r",
"title": ""
}
] |
[
{
"docid": "f0c1c22c175e08050343c097cc6c768a",
"text": "\"The likely reason the mortgage is \"\"tricky to get\"\" is the adviser is probably recommending an interest-only mortgage in which there is no repayment of principle before maturity. That would allow you to deduct the amount of the interest expense from your taxable income. Your investment grows compound tax deferred and the principal invested (the mortgage balance) is completely tax free since it never qualifies as income for tax purposes. Example ideal scenario: Refinance $100,000 on a 5/1 ARM-interest only at 3%. Invest the $100,000 at 6%. Each year you effectively pay taxes on only the gains greater than interest. If you reinvest the profits it looks something like: Net Profit: $12,309 Effective Tax Rate: 13.21%\"",
"title": ""
},
{
"docid": "ea56c922a812f0329b4a95d41ca33caa",
"text": "There's often a legal basis to answer this question. For instance, Austria (guessing from your profile) currently uses a 4% Statutory interest rate. You'll need to dig up not just the actual but also the historical rates. Note that you'll want the non-commercial interest rate - some countries differentiate between loans to businesses and loans to individuals.",
"title": ""
},
{
"docid": "77f2fb35a2beff9e1f1c485393fb6fd7",
"text": "\"Hey guys I have a quick question about a financial accounting problem although I think it's not really an \"\"accounting\"\" problem but just a bond problem. Here it goes GSB Corporation issued semiannual coupon bonds with a face value of $110,000 several years ago. The annual coupon rate is 8%, with two coupons due each year, six months apart. The historical market interest rate was 10% compounded semiannually when GSB Corporation issued the bonds, equal to an effective interest rate of 10.25% [= (1.05 × 1.05) – 1]. GSB Corporation accounts for these bonds using amortized cost measurement based on the historical market interest rate. The current market interest rate at the beginning of the current year on these bonds was 6% compounded semiannually, for an effective interest rate of 6.09% [= (1.03 × 1.03) – 1]. The market interest rate remained at this level throughout the current year. The bonds had a book value of $100,000 at the beginning of the current year. When the firm made the payment at the end of the first six months of the current year, the accountant debited a liability for the exact amount of cash paid. Compute the amount of interest expense on these bonds for the last six months of the life of the bonds, assuming all bonds remain outstanding until the retirement date. My question is why would they give me the effective interest rate for both the historical and current rate? The problem states that the firm accounts for the bond using historical interest which is 10% semiannual and the coupon payments are 4400 twice per year. I was just wondering if I should just do the (Beginning Balance (which is 100000 in this case) x 1.05)-4400=Ending Balance so on and so forth until I get to the 110000 maturity value. I got an answer of 5474.97 and was wondering if that's the correct approach or not.\"",
"title": ""
},
{
"docid": "9870fc6c5cb390e8cbeca543fbef2f65",
"text": "Mortgage rates generally consist of two factors: The risk premium is relatively constant for a particular individual / house combination, so most of the changes in your mortgage rate will be associated with changes in the price of money in the world economy at large. Interest rates in the overall economy are usually tied to an interest rate called the Federal Funds rate. The Federal Reserve manipulates the federal funds rate by buying and/or selling bonds until the rate is something they like. So you can usually expect your interest rate to rise or fall depending on the policies of the Federal Reserve. You can predict this in a couple of ways: The way they have described their plans recently indicates that will keep interest rates low for an extended period of time - probably through 2014 or so - and they hope to keep inflation around 2%. Unless inflation is significantly more than 2% between now and then, they are extremely unlikely to change that plan. As such, you should probably not expect mortgage interest rates in general to change more than infinitesimally small amounts until 2014ish. Worry more about your credit score.",
"title": ""
},
{
"docid": "69785cfa56e360777df4467d5a7e57aa",
"text": "Well, if you can get a loan for 3.8% and reliably invest for 7% returns, then you should borrow as much as you possibly can - the whole employment/existing loan situation doesn't even enter into it! But as they say, if something is too good to be true, it probably isn't (true). The 7-8% return are not guaranteed at all, but the 3.8% interest is. And while we're at it, 3.8% for an unsecured loan sounds pretty damn low, I would be really doubtful about that. I mean, why would the bank do that if they could instead invest the money for 7-8%?",
"title": ""
},
{
"docid": "8c47ad741b9b74cdefbfc9275a90146a",
"text": "\"For scoring purposes, having a DTI between 1-19% is ideal. From Credit Karma: That being said, depending on the loan type you looking at receiving (FHA, VA, Conventional, etc), there are certain max DTIs that you want to stay away from. As a rule, for VA, you want to try to stay away from 41% DTI. Exceptions are made for people with sufficient funds in the bank (3-9 months) to go to higher DTIs. If you keep a 19% utilization overall, that will get you a higher score but it will also show that you have a monthly payment on a particular revolving credit account. While the difference between 729 and 745 seems like a lot of points, there are rules as to how the interest rates are determined. So you will find that many banks have the same or similar rates due to recent legislation in Dodd-Frank. In the days of subprime mortgages, this was not the case. Adjustable rate mortgages did not necessarily go away, the servicer just has to make sure that the buyer can weather the full amount once it reaches maturity, not the lower amount. That is what got a lot of people in trouble. From \"\"how interest rates are set\"\": Before quoting you an interest rate, the loan officer will add on how much he and his branch want to earn. The branch or company sets a policy on how little that can be (the minimum amount the loan officer adds on to his cost) but does not want to overcharge borrowers either (so they set a maximum the loan officer can charge) Between that minimum and maximum, the loan officer has a great deal of flexibility. For example, say the loan officer decides he and his branch are going to earn one point. When you call and ask for a rate quote, he will add one point to the cost of the loan and quote you that rate. According to the rate sheet above, seven percent will cost you zero points. Six and three-quarters percent will cost you one point. In our example, at 7.125% the loan officer and branch would earn one point and have some money left over. This could be used to pay some of the fees (processing, documents, etc), which is how you get a \"\"no fees -no points\"\" mortgage. You just pay a higher interest rate. Where this scoring helps you is in credit card interest rates and auto loan and personal loan rates, which have different rate structures. My personal opinion is to avoid the use of the credit cards. Playing games to try to maximize your score in this situation won't help you when you are talking about 20 points potentially. If you were at the bottom level and were trying to meet a minimum score to qualify, then I would recommend you try to game this scoring system. Take the extra money you would put on a credit card and save it for housing expenses. Taking the Dave Ramsey approach, you should have at least $1000 in emergency funds as most problems you encounter will be less than $1000. That advice rings true.\"",
"title": ""
},
{
"docid": "1c2347a4ed4cd25bf7adcbdf7126f9d7",
"text": "The rules of thumb are there for a reason. In this case, they reflect good banking and common sense by the buyer. When we bought our house 15 years ago it cost 2.5 times our salary and we put 20% down, putting the mortgage at exactly 2X our income. My wife thought we were stretching ourselves, getting too big a house compared to our income. You are proposing buying a house valued at 7X your income. Granted, rates have dropped in these 15 years, so pushing 3X may be okay, the 26% rule still needs to be followed. You are proposing to put nearly 75% of your income to the mortgage? Right? The regular payment plus the 25K/yr saved to pay that interest free loan? Wow. You are over reaching by double, unless the rental market is so tight that you can actually rent two rooms out to cover over half the mortgage. Consider talking to a friendly local banker, he (or she) will likely give you the same advice we are. These ratios don't change too much by country, interest rate and mortgages aren't that different. I wish you well, welcome to SE.",
"title": ""
},
{
"docid": "08fb6d65d0231a99af8117233afd3ed3",
"text": "As mentioned, the main advantage of a 15-year loan compared to a 30-year loan is that the 15-year loan should come at a discounted rate. All things equal, the main advantage of the 30-year loan is that the payment is lower. A completely different argument from what you are hearing is that if you can get a low interest rate, you should get the longest loan possible. It seem unlikely that interest rates are going to get much lower than they are and it's far more likely that they will get higher. In 15 years, if interest rates are back up around 6% or more (where they were when I bought my first home) and you are 15 years into a 30 year mortgage, you'll being enjoying an interest rate that no one can get. You need to keep in mind that as the loan is paid off, you will earn exactly 0% on the principal you've paid. If for some reason the value of the home drops, you lose that portion of the principal. The only way you can get access to that capital is to sell the house. You (generally) can't sell part of the house to send a kid to college. You can take out another mortgage but it is going to be at the current going rate which is likely higher than current rates. Another thing to consider that over the course of 30 years, inflation is going to make a fixed payment cheaper over time. Let's say you make $60K and you have a monthly payment of $1000 or 20% of your annual income. In 15 years at a 1% annualized wage growth rate, it will be 17% of your income. If you get a few raises or inflation jumps up, it will be a lot more than that. For example, at a 2% annualized growth rate, it's only 15% of your income after 15 years. In places where long-term fixed rates are not available, shorter mortgages are common because of the risk of higher rates later. It's also more common to pay them off early for the same reason. Taking on a higher payment to pay off the loan early only really only helps you if you can get through the entire payment and 15 years is still a long way off. Then if you lose your job then, you only have to worry about taxes and upkeep but that means you can still lose the home. If you instead take the extra money and keep a rainy day fund, you'll have access to that money if you hit a rough patch. If you put all of your extra cash in the house, you'll be forced to sell if you need that capital and it may not be at the best time. You might not even be able to pay off the loan at the current market value. My father took out a 30 year loan and followed the advice of an older coworker to 'buy as much house as possible because inflation will pay for it'. By the end of the loan, he was paying something like $250 a month and the house was worth upwards of $200K. That is, his mortgage payment was less than the payment on a cheap car. It was an insignificant cost compared to his income and he had been able to invest enough to retire in comfort. Of course when he bought it, inflation was above 10% so it's bit different today but the same concepts still apply, just different numbers. I personally would not take anything less than a 30 year loan at current rates unless I planned to retire in 15 years.",
"title": ""
},
{
"docid": "d6b8944581bb291c1e2b63f38afbdb03",
"text": "\"Yes, the \"\"effective\"\" and \"\"market\"\" rates are interchangeable. The present value formula will help make it possible to determine the effective interest rate. Since the bond's par value, duration, and par interest rate is known, the coupon payment can be extracted. Now, knowing the price the bond sold in the market, the duration, and the coupon payment, the effective market interest rate can be extracted. This involves solving large polynomials. A less accurate way of determining the interest rate is using a yield shorthand. To extract the market interest rate with good precision and acceptable accuracy, the annual coupon derived can be divided by the market price of the bond.\"",
"title": ""
},
{
"docid": "b03915b188d6fcb35d4155487adbc78c",
"text": "In the US, our standard fixed rate mortgages would show no difference. My payment is calculated to be due on the 1st of each month. When I first got a mortgage, I was intrigued by this question, and experimented. I paid early, on the 15th, 2 weeks early, and looked at my next statement. It matched the amortization, exactly. Mortgages at the time were over 12%, so I'd imagine having seen the benefit of that 1/2% for the early payment. Next I paid on the last day before penalty, in effect, 2 weeks late. I expected to see extra interest accrue, again, just a bit, but enough to see when compared to the amortization table. Again, no difference, the next statement showed the same value to the penny.",
"title": ""
},
{
"docid": "5112988b5497852ace1cbc38ea624643",
"text": "Your calculations are correct if you use the same mortgage rate for both the 15 and 30 year mortgages. However, generally when you apply for a 15 year mortgage the interest rate is significantly less than the 30 year rate. The rate is lower for a number of reasons but mainly there is less risk for the bank on a 15 year payoff plan.",
"title": ""
},
{
"docid": "59b95e58c37fdc1cfd69882241584d5b",
"text": "The key question is whether this number includes taxes and insurance. When you get a mortgage in the U.S., the bank wants to be sure that you are paying your property taxes and that you have homeowners insurance. The mortgage is guaranteed by a lien on the house -- if you don't pay, the bank can take your house -- and the bank doesn't want to find out that your house burned down and you didn't bother to get insurance so now they have nothing. So for most mortgages, the bank collects money from the borrower for the taxes and insurance, and then they pay these things. This can also be convenient for the borrower as you are then paying a fixed amount every month rather than being hit with sizeable tax and insurance bills two or three times a year. So to run the numbers: As others point out, mortgage rates in the US today are running 3% to 4%. I just found something that said the average rate today is 3.6%. At that rate, your actual mortgage payment should be about $1,364. Say $1,400 as we're taking approximate numbers. So if the $2,000 per month does NOT include taxes and insurance, it's a bad deal. If it does, then not so bad. You don't say where you live. But in my home town, property taxes on a $300,000 house would be about $4,500 per year. Insurance is probably another $1000 a year. And if you have to get PMI, add another 1/2% to 3/4%, or $1500 to $2250 per year. Add those up and divide by 12 and you get about $600. Note my numbers here are all highly approximate, will vary widely depending on where the house is, so this is just a general ballpark. $1400 + $600 = $2000, just what you were quoted. So if the number is PITI -- principle, interest, taxes, and insurance -- it's about what I'd expect.",
"title": ""
},
{
"docid": "c844bfce550445f3758e75c9421f48ad",
"text": "If the APR is an effective rate. If the APR is a nominal rate compounded monthly, first convert it to an effective rate.",
"title": ""
},
{
"docid": "a81f6d01bbf7f9836f6b5bbd2aa93e7b",
"text": "\"add the interest for the next 5 payments and divide that by how much you paid on the principal during that time Let's see - on a $200K 6% loan, the first 5 months is $4869. Principal reduction is $1127. I get 4.32 or 432%. But this is nonsense, you divide the interest over the mortgage balance, and get 6%. You only get those crazy numbers by dividing meaningless ratios. The fact that early on in a mortgage most of the payment goes to interest is a simple fact of the the 30 year nature of amortizing. You are in control, just add extra principal to the payment, if you wish. This idea sounds like the Money Merge Account peddled by UFirst. It's a scam if ever there was one. I wrote about it extensively on my site and have links to others as well. Once you get to this page, the first link is for a free spreadsheet to download, it beats MMA every time and shows how prepaying works, no smoke, no mirrors. The second link is a 65 page PDF that compiles nearly all my writing on this topic as I was one of the finance bloggers doing what I could to expose this scam. I admit it became a crusade, I went as far as buying key word ads on google to attract the search for \"\"money merge account\"\" only to help those looking to buy it find the truth. In the end, I spent a few hundred dollars but saved every visitor the $3500 loss of this program. No agent who dialoged with me in public could answer my questions in full, as they fell back on \"\"you need to believe in it.\"\" I have no issue with faith-based religion, it actually stands to reason, but mortgages are numbers and there's order to them. If you want my $3500, you should know how your system works. Not one does, or they would know it was a scam. Nassim Taleb, author of \"\"The Black Swan\"\" offered up a wonderful quote, \"\"if you see fraud, and do not say 'fraud,' you are a fraud.\"\" The site you link to isn't selling a product, but a fraudulent idea. What's most disturbing to me is that the math to disprove his assertion is not complex, not beyond grade school arithmetic. Update 2015 - The linked \"\"rule of thumb\"\" is still there. Still wrong of course. Another scam selling software to do this is now promoted by a spin off of UFirst, called Worth Unlimited. Same scam, new name.\"",
"title": ""
},
{
"docid": "c841acd1c29310d633242b8d2bf418ca",
"text": "For a short term loan, the interest is closer to straight line, e.g. A $10K loan at 10% for 3 years will have approximately $1500 in interest. (The exact number is $1616, not too far off). You will save 2.41% on the rate, so you'll the extra payment you'll send to the mortgage will save you about 10000*35*(2.41/12)/2 or about $350 over the 3 year period.",
"title": ""
}
] |
fiqa
|
3276fd984ab6bcf6a4a5c55f20794adf
|
How to calculate the price of a bond based with a yield to Maturity, term and annual interest?
|
[
{
"docid": "b692f4e4eeeb8f983144d9d77026b05b",
"text": "\"Like all financial investments, the value of a bond is the present value of expected future cash flows. The Yield to Maturity is the annualized return you get on your initial investment, which is equivalent to the discount rate you'd use to discount future cash flows. So if you discount all future cashflows at 6% annually*, you can calculate the price of the bond: So the price of a $1,000 bond (which is how bond prices are typically quoted) would be $1,097.12. The current yield is just the current coupon payment divided by the current price, which is 70/1,097.12 or 6.38% Question 3 makes no sense, since the yield to maturity would be the same if you bought the bond at market price Question 4 talks about a \"\"sale\"\" date which makes me think that it assumes you sold the bond on the coupon date, but you'd have to know the sale price to calculate the rate of return.\"",
"title": ""
},
{
"docid": "c792b0ad91138ee36099aef622b3d59c",
"text": "\"The answer to almost all questions of this type is to draw a diagram. This will show you in graphical fashion the timing of all payments out and payments received. Then, if all these payments are brought to the same date and set equal to each other (using the desired rate of return), the equation to be solved is generated. In this case, taking the start of the bond's life as the point of reference, the various amounts are: Pay out = X Received = a series of 15 annual payments of $70, the first coming in 1 year. This can be brought to the reference date using the formula for the present value of an ordinary annuity. PLUS Received = A single payment of $1000, made 15 years in the future. This can be brought to the reference date using the simple interest formula. Set the pay-out equal to the present value of the payments received and solve for X I am unaware of the difference, if any, between \"\"current rate\"\" and \"\"rate to maturity\"\" Finding the rate for such a series of payments would start out the same as above, but solving the resulting equation for the interest rate would be a daunting task...\"",
"title": ""
}
] |
[
{
"docid": "aaf2f42c69d1a1d80b68a0ebd347b608",
"text": "The reason the market value is low is because the market does not believe that the company or country will pay. Another reason for it to go down is lack of liquidity in the market. However if you believe that the conditions would improve by the time bond matures, and you don't need money right now, then you can wait for maturity and get the maturity value.",
"title": ""
},
{
"docid": "e828549280181c063bfeaabae924c767",
"text": "\"Compounding is just the notion that the current period's growth (or loss) becomes the next period's principal. So, applied to stocks, your beginning value, plus growth (or loss) in value, plus any dividends, becomes the beginning value for the next period. Your value is compounded as you measure the performance of the investment over time. Dividends do not participate in the compounding unless you reinvest them. Compound interest is just the principle of compounding applied to an amount owed, either by you, or to you. You have a balance with which a certain percentage is calculated each period and is added to the balance. The new balance is used to calculate the next period's interest, which again adds to the balance, etc. Obviously, it's better to be on the receiving end of a compound interest calculation than on the paying end. Interest bearing investments, like bonds, pay simple interest. Like stock dividends, you would have to invest the interest in something else in order to get a compounding effect. When using a basic calculator tool for stocks, you would include the expected average annual growth rate plus the expected annual dividend rate as your \"\"interest\"\" rate. For bonds you would use the coupon rate plus the expected rate of return on whatever you put the interest into as the \"\"interest\"\" rate. Factoring in risk, you would just have to pick a different rate for a simple calculator, or use a more complex tool that allows for more variables over time. Believe it or not, this is where you would start seeing all that calculus homework pay off!\"",
"title": ""
},
{
"docid": "3c54acf90c8b30c09d6c9550bc7ab692",
"text": "Usually the market. I'm a company issuing a 5-year bond with 5% coupon payments. It goes on the market to whoever is willing to pay the most for it. The prices that those investors pay implies what the required yield is. For instance, if they're willing to pay exactly face value for the bond, then that shows they have a required return of (in this case) 5%. Paying more or less for the bond implies a require rate less than or greater than 5%, with the exact amounts derivable with basic algebra. The same principle can be applied to any other asset.",
"title": ""
},
{
"docid": "6102ca35a6adf578632c2b0f37dadc2f",
"text": "\"Below I will try to explain two most common Binomial Option Pricing Models (BOPM) used. First of all, BOPM splits time to expiry into N equal sub-periods and assumes that in each period the underlying security price may rise or fall by a known proportion, so the value of an option in any sub-period is a function of its possible values in the following sub period. Therefore the current value of an option is found by working backwards from expiry date through sub-periods to current time. There is not enough information in the question from your textbook so we may assume that what you are asked to do is to find a value of a call option using just a Single Period BOPM. Here are two ways of doing this: First of all let's summarize your information: Current Share Price (Vs) = $70 Strike or exercise price (X) = $60 Risk-free rate (r) = 5.5% or 0.055 Time to maturity (t) = 12 months Downward movement in share price for the period (d) = $65 / $70 = 0.928571429 Upward movement in share price for the period (u) = 1/d = 1/0.928571429 = 1.076923077 \"\"u\"\" can be translated to $ multiplying by Vs => 1.076923077 * $70 = $75.38 which is the maximum probable share price in 12 months time. If you need more clarification here - the minimum and maximum future share prices are calculated from stocks past volatility which is a measure of risk. But because your textbook question does not seem to be asking this - you probably don't have to bother too much about it yet. Intrinsic Value: Just in case someone reading this is unclear - the Value of an option on maturity is the difference between the exercise (strike) price and the value of a share at the time of the option maturity. This is also called an intrinsic value. Note that American Option can be exercised prior to it's maturity in this case the intrinsic value it simply the diference between strike price and the underlying share price at the time of an exercise. But the Value of an option at period 0 (also called option price) is a price you would normally pay in order to buy it. So, say, with a strike of $60 and Share Price of $70 the intrinsic value is $10, whereas if Share Price was $50 the intrinsic value would be $0. The option price or the value of a call option in both cases would be fixed. So we also need to find intrinsic option values when price falls to the lowest probable and rises to the maximum probable (Vcd and Vcu respectively) (Vcd) = $65-$60 = $5 (remember if Strike was $70 then Vcd would be $0 because nobody would exercise an option that is out of the money) (Vcu) = $75.38-$60 = $15.38 1. Setting up a hedge ratio: h = Vs*(u-d)/(Vcu-Vcd) h = 70*(1.076923077-0.928571429)/(15.38-5) = 1 That means we have to write (sell) 1 option for each share purchased in order to hedge the risks. You can make a simple calculation to check this, but I'm not going to go into too much detail here as the equestion is not about hedging. Because this position is risk-free in equilibrium it should pay a risk-free rate (5.5%). Then, the formula to price an option (Vc) using the hedging approach is: (Vs-hVc)(e^(rt))=(Vsu-hVcu) Where (Vc) is the value of the call option, (h) is the hedge ratio, (Vs) - Current Share Price, (Vsu) - highest probable share price, (r) - risk-free rate, (t) - time in years, (Vcu) - value of a call option on maturity at the highest probable share price. Therefore solving for (Vc): (70-1*Vc)(e^(0.055*(12/12))) = (75.38-1*15.38) => (70-Vc)*1.056540615 = 60 => 70-Vc = 60/1.056540615 => Vc = 70 - (60/1.056540615) Which is similar to the formula given in your textbook, so I must assume that using 1+r would be simply a very close approximation of the formula above. Then it is easy to find that Vc = 13.2108911402 ~ $13.21 2. Risk-neutral valuation: Another way to calculate (Vc) is using a risk-neutral approach. We first introduce a variable (p) which is a risk-neutral probability of an increase in share price. p = (e^(r*t)-d)/(u-d) so in your case: p = (1.056540615-0.928571429)/(1.076923077-0.928571429) = 0.862607107 Therefore using (p) the (Vc) would be equal: Vc = [pVcu+(1-p)Vcd]/(e^(rt)) => Vc = [(0.862607107*15.38)+(0.137392893*5)]/1.056540615 => Vc = 13.2071229185 ~ $13.21 As you can see it is very close to the hedging approach. I hope this answers your questions. Also bear in mind that there is much more to the option pricing than this. The most important topics to cover are: Multi-period BOPM Accounting for Dividends Black-Scholes-Merton Option Pricing Model\"",
"title": ""
},
{
"docid": "d0c4460f43692954b0a086c354365cad",
"text": "what do you mean exactly? Do you have a future target price and projected future dividend payments and you want the present value (time discounted price) of those? Edit: The DCF formula is difficult to use for stocks because the future price is unknown. It is more applicable to fixed-income instruments like coupon bonds. You could use it but you need to predict / speculate a future price for the stock. You are better off using the standard stock analysis stuff: Learn Stock Basics - How To Read A Stock Table/Quote The P/E ratio and the Dividend yield are the two most important. The good P/E ratio for a mature company would be around 20. For smaller and growing companies, a higher P/E ratio is acceptable. The dividend yield is important because it tells you how much your shares grow even if the stock price stays unchanged for the year. HTH",
"title": ""
},
{
"docid": "7be43a53ea4e13f8bec3d739b75d6b2e",
"text": "A bond has a duration that can be easily calculated. It's the time weighted average of all the payments you'll receive and helpful to understand the effect a change in rates will have on that instrument. The duration of a stock, on the other hand, is a forced construct to then use in other equations to help calculate, say, the summation of a dividend stream. I can calculate the duration of a bond and come up with an answer that's not up for discussion or dispute. The duration of a stock, on the other hand, isn't such a number. Will J&J last 50 more years? Will Apple? Who knows?",
"title": ""
},
{
"docid": "6657c05898ceb7473983e062b054aa66",
"text": "\"Thanks! Do you know how to calculate the coefficients from this part?: \"\"The difference between the one-year rate and the spread coefficients represents the response to a change in the one-year rate. As a result, the coefficient on the one-year rate and the difference in the coefficients on the one-year rate and spread should be positive if community banks, on average, are asset sensitive and negative if they are liability sensitive. The coefficient on the spread should be positive because an increase in long-term rates should increase net interest income for both asset-sensitive and liability-sensitive banks.\"\" The one-year treasury yield is 1.38% and the ten-year rate is 2.30%. I would greatly appreciate it if you have the time!\"",
"title": ""
},
{
"docid": "e768a08c0ab799ca0b2022ed60642360",
"text": "But it also can't be 1.46%, because that would imply that a 30Y US Treasury bond only yields 2.78%, which is nonsensically low. The rates are displayed as of Today. As the footnote suggests these are to be read with Maturities. A Treasury with 1 year Maturity is at 1.162% and a Treasury with 30Y Maturity is at 2.78%. Generally Bonds with longer maturity terms give better yields than bonds of shorter duration. This indicates the belief that in long term the outlook is positive.",
"title": ""
},
{
"docid": "2e959870c0aeb1d4a8e82a765275f23b",
"text": "Hi guys, I have a difficult university finance question that’s really been stressing me out.... “The amount borrowed is $300 million and the term of the debt credit facility is six years from today The facility requires minimum loan repayments of $9 million in each financial year except for the first year. The nominal rate for this form of debt is 5%. This intestest rate is compounded monthly and is fixed from the date the facility was initiated. Assume that a debt repayment of $10 million is payed on 31 August 2018 and $9million on April 30 2019. Following on monthly repayments of $9 million at the end of each month from May 31 2019 to June 30 2021. Given this information determine the outstanding value of the debt credit facility on the maturity date.” Can anyone help me out with the answer? I’ve been wracking my brain trying to decide if I treat it as a bond or a bill. Thanks in advance,",
"title": ""
},
{
"docid": "3f8851d458841a55b140337c80cb1702",
"text": "\"The first thing that it is important to note here is that the examples you have given are not individual bond prices. This is what is called the \"\"generic\"\" bond price data, in effect a idealised bond with the indicated maturity period. You can see individual bond prices on the UK Debt Management Office website. The meaning of the various attributes (price, yield, coupon) remains the same, but there may be no such bond to trade in the market. So let's take the example of an actual UK Gilt, say the \"\"4.25% Treasury Gilt 2019\"\". The UK Debt Management Office currently lists this bond as having a maturity date of 07-Mar-2019 and a price of GBP 116.27. This means that you will pay 116.27 to purchase a bond with a nominal value of GBP 100.00. Here, the \"\"nominal price\"\" is the price that HM Treasury will buy the bond back on the maturity date. Note that the title of the bond indicates a \"\"nominal\"\" yield of 4.25%. This is called the coupon, so here the coupon is 4.25%. In other words, the treasury will pay GBP 4.25 annually for each bond with a nominal value of GBP 100.00. Since you will now be paying a price of GBP 116.27 to purchase this bond in the market today, this means that you will be paying 116.27 to earn the nominal annual interest of 4.25. This equates to a 3.656% yield, where 3.656% = 4.25/116.27. It is very important to understand that the yield is not the whole story. In particular, since the bond has a nominal value of GBP100, this means that as the maturity date approaches the market price of the bond will approach the nominal price of 100. In this case, this means that you will witness a loss of capital over the period that you hold the bond. If you hold the bond until maturity, then you will lose GBP 16.27 for each nominal GBP100 bond you hold. When this capital loss is netted off the interest recieved, you get what is called the gross redemption yield. In this case, the gross redemption yield is given as approximately 0.75% per annum. NB. The data table you have included clearly has errors in the pricing of the 3 month, 6 month, and 12 month generics.\"",
"title": ""
},
{
"docid": "eeaaa8a25d877e0bee9104edeae47c39",
"text": "The periodic rate (here, the interest charged per month), as you would enter into a finance calculator is 9.05%. Multiply by 12 to get 108.6% or calculate APR at 182.8%. Either way it's far more than 68%. If the $1680 were paid after 365 days, it would be simple interest of 68%. For the fact that payment are made along the way, the numbers change. Edit - A finance calculator has 5 buttons to cover the calculations: N = number of periods or payments %i = the interest per period PV = present value PMT = Payment per period FV= Future value In your example, you've given us the number of periods, 12, present value, $1000, future value, 0, and payment, $140. The calculator tells me this is a monthly rate of 9%. As Dilip noted, you can compound as you wish, depending on what you are looking for, but the 9% isn't an opinion, it's the math. TI BA-35 Solar. Discontinued, but available on eBay. Worth every cent. Per mhoran's comment, I'll add the spreadsheet version. I literally copied and pasted his text into a open cell, and after entering the cell shows, which I rounded to 9.05%. Note, the $1000 is negative, it starts as an amount owed. And for Dilip - 1.0905^12 = 2.8281 or 182.8% effective rate. If I am the loanshark lending this money, charging 9% per month, my $1000 investment returns $2828 by the end of the year, assuming, of course, that the payment is reinvested immediately. The 108 >> 182 seems disturbing, but for lower numbers, even 12% per year, the monthly compounding only results in 12.68%",
"title": ""
},
{
"docid": "acbff6d144a04d785c94ea5caaf1cfd1",
"text": "The calculation can be made on the basis that the loan is equal to the sum of the repayments discounted to present value. (For more information see Calculating the Present Value of an Ordinary Annuity.) With Deriving the loan formula from the simple discount summation. As you can see, this is the same as the loan formula given here. In the UK and Europe APR is usually quoted as the effective interest rate while in the US it is quoted as a nominal rate. (Also, in the US the effective APR is usually called the annual percentage yield, APY, not APR.) Using the effective interest rate finds the expected answer. The total repayment is £30.78 * n = £1108.08 Using a nominal interest rate does not give the expected answer.",
"title": ""
},
{
"docid": "a3a017b56fcc49c55ed45b58ee128b7e",
"text": "\"When we calculate the realized yield of a bond, we assume the coupons are invested at an interest rate. I assume it is some kind of vehicle that guarantees a return, thinking it is government bond, savings account or something. Investing in a benchmark bond index might be risky though for this \"\"interest rate\"\".\"",
"title": ""
},
{
"docid": "9c93201d984cd5be6fbaefd0e5f237c8",
"text": "\"Of course it can. This is a time value of money calculation. If I knew the maturity date, or current yield to maturity I'd be able to calculate the other number and advise how much rates need to rise to cause the value to drop from 18 to 17. For a 10 year bond, a rise today of .1% will cause the bond to drop about 1% in value. This is a back of napkin calculation, finance calculators offer precision. edit - when I calculate present value with 34 years to go, and 5.832% yield to maturity, I get $14.55. At 5.932, the value drops to $14.09, a drop of 3.1%. Edit - Geo asked me to show calculations. Here it goes - A) The simplest way to calculate present value for a zero coupon bond is to take the rate 5.832%, convert it to 1.05832 and divide into the face value, $100. I offer this as the \"\"four function calculator\"\" approach, so one enters $100 divided by 1.05832 and repeat for the number of years left. A bit of precision is lost if there's a fractional year involved, but it's close. The bid/ask will be wider than this error introduced. B) Next - If you've never read my open declaration of love for my Texas Instruments BA-35 calculator, here it is, again. One enters N=34 (for the years) FV = 100, Rate = 5.832, and then CPT PV. It will give the result, $14.56. C) Here is how to do it in Excel - The numbers in lines 1-3 are self evident, the equation in cell B4 is =-PV(B3/100,B1,0,B2) - please note there are tiny differences in the way to calculate in excel vs a calculator. Excel wants the rate to be .05832, so I divided by 100 in the equation cell. That's the best 3 ways I know to calculate present value. Geo, if you've not noticed, the time value of money is near and dear to me. It comes into play for bonds, mortgages, and many aspect of investing. The equations get more complex if there are payments each year, but both the BA-35 and excel are up to it.\"",
"title": ""
},
{
"docid": "5aac882d0fd51a8aa74372c90ee294ab",
"text": "Adding a couple more assumptions, I'd compute about $18.23 would be that pay out in 2018. This is computed by taking the Current Portfolio's Holdings par values and dividing by the outstanding shares(92987/5100 for those wanting specific figures used). Now, for those assumptions: Something to keep in mind is that bonds can valued higher than their face value if the coupon is higher than other issues given the same risk. If you have 2 bonds maturing in 3 years of the same face value and same risk categories though one is paying 5% and the other is paying 10% then it may be that the 5% sells at a discount to bring the yield up some while the other sells at a premium to bring the yield down. Thus, you could have bonds worth more before they mature that will eventually lose this capital appreciation.",
"title": ""
}
] |
fiqa
|
8549e05cceedeb390719f634be79ecd5
|
How can I compare the performance of a high dividend funds with other funds and or an index
|
[
{
"docid": "86065a94b974b282b797961feefbdebc",
"text": "Vanguard (and probably other mutual fund brokers as well) offers easy-to-read performance charts that show the total change in value of a $10K investment over time. This includes the fair market value of the fund plus any distributions (i.e. dividends) paid out. On Vanguard's site they also make a point to show the impact of fees in the chart, since their low fees are their big selling point. Some reasons why a dividend is preferable to selling shares: no loss of voting power, no transaction costs, dividends may have better tax consequences for you than capital gains. NOTE: If your fund is underperforming the benchmark, it is not due to the payment of dividends. Funds do not pay their own dividends; they only forward to shareholders the dividends paid out by the companies in which they invest. So the fair market value of the fund should always reflect the fair market value of the companies it holds, and those companies' shares are the ones that are fluctuating when they pay dividends. If your fund is underperforming its benchmark, then that is either because it is not tracking the benchmark closely enough or because it is charging high fees. The fact that the underperformance you're seeing appears to be in the amount of dividends paid is a coincidence. Check out this example Vanguard performance chart for an S&P500 index fund. Notice how if you add the S&P500 index benchmark to the plot you can't even see the difference between the two -- the fund is designed to track the benchmark exactly. So when IBM (or whoever) pays out a dividend, the index goes down in value and the fund goes down in value.",
"title": ""
}
] |
[
{
"docid": "ba932ab7edd82cd583be7d0ce813cdbc",
"text": "The most significant capability that an investor must have is the knowledge on the way to look for the high dividend stocks. Through accumulating good information relating to towards the stocks that you are finding is the better way of getting the perfect and profitable investments. It is really important to learn what makes a particular stock better and superior compared to other. Traders are essential to start a complete analysis and investigation before getting their money on any business projects. Obviously, investors certainly want to have an investment that could guarantee an effective expense for a very reasonable cost the moment of getting it. The chances of crucial to invest in a market that you might be aware and qualified about. So, creating a comparison and compare in one business to a different is totally essential so as to find the high dividend stock.",
"title": ""
},
{
"docid": "61a3236acf34529cae6bfa96e07ccccb",
"text": "\"As Dheer pointed out, the top ten mega-cap corporations account for a huge part (20%) of your \"\"S&P 500\"\" portfolio when weighted proportionally. This is one of the reasons why I have personally avoided the index-fund/etf craze -- I don't really need another mechanism to buy ExxonMobil, IBM and Wal-Mart on my behalf. I like the equal-weight concept -- if I'm investing in a broad sector (Large Cap companies), I want diversification across the entire sector and avoid concentration. The downside to this approach is that there will be more portfolio turnover (and expense), since you're holding more shares of the lower tranches of the index where companies are more apt to churn. (ie. #500 on the index gets replaced by an up and comer). So you're likely to have a higher expense ratio, which matters to many folks.\"",
"title": ""
},
{
"docid": "0c504887992c7acc59ad707ecd200e98",
"text": "I use the following method. For each stock I hold long term, I have an individual table which records dates, purchases, sales, returns of cash, dividends, and way at the bottom, current value of the holding. Since I am not taking the income, and reinvesting across the portfolio, and XIRR won't take that into account, I build an additional column where I 'gross up' the future value up to today() of that dividend by the portfolio average yield at the date the dividend is received. The grossing up formula is divi*(1+portfolio average return%)^((today-dividend date-suitable delay to reinvest)/365.25) This is equivalent to a complex XMIRR computation but much simpler, and produces very accurate views of return. The 'weighted combined' XIRR calculated across all holdings then agrees very nearly with the overall portfolio XIRR. I have done this for very along time. TR1933 Yes, 1933 is my year of birth and still re investing divis!",
"title": ""
},
{
"docid": "20e5cfc13dc16a19aef4dc3ba03eba08",
"text": "\"Let me start by giving you a snippet of a report that will floor you. Beat the market? Investors lag the market by so much that many call the industry a scam. This is the 2015 year end data from a report titled Quantitive Analysis of Investor Behavior by a firm, Dalbar. It boggles the mind that the disparity could be this bad. A mix of stocks and bonds over 30 years should average 8.5% or so. Take out fees, and even 7.5% would be the result I expect. The average investor return was less than half of this. Jack Bogle, founder of Vanguard, and considered the father of the index fund, was ridiculed. A pamphlet I got from Vanguard decades ago quoted fund managers as saying that \"\"indexing is a path to mediocrity.\"\" Fortunately, I was a numbers guy, read all I could that Jack wrote and got most of that 10.35%, less .05, down to .02% over the years. To answer the question: psychology. People are easily scammed as they want to believe they can beat the market. Or that they'll somehow find a fund that does it for them. I'm tempted to say ignorance or some other hint at lack of intelligence, but that would be unfair to the professionals, all of which were scammed by Madoff. Individual funds may not be scams, but investors are partly to blame, buy high, sell low, and you get the results above, I dare say, an investor claiming to use index funds might not fare much better than the 3.66% 30 year return above, if they follow that path, buying high, selling low. Edit - I am adding this line to be clear - My conclusion, if any, is that the huge disparity cannot be attributed to management, a 6.7% lag from the S&P return to what the average investor sees likely comes from bad trading. To the comments by Dave, we have a manager that consistently beats the market over any 2-3 year period. You have been with him 30 years and are clearly smiling about your relationship and investing decision. Yet, he still has flows in and out. People buy at the top when reading how good he is, and selling right after a 30% drop even when he actually beat by dropping just 22%. By getting in and out, he has a set of clients with a 30 year record of 6% returns, while you have just over 11%. This paragraph speaks to the behavior of the investor, not managed vs indexed.\"",
"title": ""
},
{
"docid": "402212bfb569a8f87f74352254c9928e",
"text": "Yahoo's primary business isn't providing mutual fund performance data. They aim to be convenient, but often leave something to be desired in terms of completeness. Try Morningstar instead. Their mission is investment research. Here's a link to Morningstar's data for the fund you specified. If you scroll down, you'll see:",
"title": ""
},
{
"docid": "afdd5a936be2a9b0e538321fa88b1cd4",
"text": "There are multiple ETFs which inversely track the common indices, though many of these are leveraged. For example, SDS tracks approximately -200% of the S&P 500. (Note: due to how these are structured, they are only suitable for very short term investments) You can also consider using Put options for the various indices as well. For example, you could buy a Put for the SPY out a year or so to give you some fairly cheap insurance (assuming it's a small part of your portfolio). One other option is to invest against the market volatility. As the market makes sudden swings, the volatility goes up; this tends to be true more when it falls than when it rises. One way of invesing in market volatility is to trade options against the VIX.",
"title": ""
},
{
"docid": "6f10be87bc77e678b37429357387cd12",
"text": "During the course of the year, the S&P individual stocks will have some dividends. Not every last stock but a good number of them. Enough that the average dividend for the S&P has been about 2% recently. So if the S&P index goes up, say 10%, an S&P fund should go up closer to 12%. For a fund holder, you'd normally see a declared dividend and cap gain distribution toward the end of each year. When you hold shares in a 401(k), dividends are reinvested into the fund, usually with no involvement from the members.",
"title": ""
},
{
"docid": "ff6a6b8b9211bde03bed2c76076b87f7",
"text": "Usually when a company is performing well both its share price and its dividends will increase over the medium to long term. Similarly, if the company is performing badly both the share price and dividends will fall over time. If you want to invest in higher dividend stocks over the medium term, you should look for companies that are performing well fundamentally and technically. Choose companies that are increasing earnings and dividends year after year and with earnings per share greater than dividends per share. Choose companies with share prices increasing over time (uptrending). Then once you have purchased your portfolio of high dividend stocks place a trailing stop loss on them. For a timeframe of 1 to 3 years I would choose a trailing stop loss of 20%. This means that if the share price continues going up you keep benefiting from the dividends and increasing share price, but if the share price drops by 20% below the recent high, then you get automatically taken out of that stock, leaving your emotions out of it. This will ensure your capital is protected over your investment timeframe and that you will profit from both capital growth and rising dividends from your portfolio.",
"title": ""
},
{
"docid": "7cd5e8af0b5545ab3beca350d62578d0",
"text": "Yes an index is by definition any arbitrary selection. In general, to measure performance there are 2 ways: By absolute return - meaning you want a positive return at all times ie. 10% is good. -1% is bad. By relative return - this means beating the benchmark. For example, if the benchmark returns -20% and your portfolio returns -10%, then it has delivered +10% relative returns as compared to the benchmark.",
"title": ""
},
{
"docid": "2b6cde81fdb549260eac7262ff180761",
"text": "The idea of an index is that it is representative of the market (or a specific market segment) as a whole, so it will move as the market does. Thus, past performance is not really relevant, unless you want to bank on relative differences between different countries' economies. But that's not the point. By far the most important aspect when choosing index funds is the ongoing cost, usually expressed as Total Expense Ratio (TER), which tells you how much of your investment will be eaten up by trading fees and to pay the funds' operating costs (and profits). This is where index funds beat traditional actively managed funds - it should be below 0.5% The next question is how buying and selling the funds works and what costs it incurs. Do you have to open a dedicated account or can you use a brokerage account at your bank? Is there an account management fee? Do you have to buy the funds at a markup (can you get a discount on it)? Are there flat trading fees? Is there a minimum investment? What lot sizes are possible? Can you set up a monthly payment plan? Can you automatically reinvest dividends/coupons? Then of course you have to decide which index, i.e. which market you want to buy into. My answer in the other question apparently didn't make it clear, but I was talking only about stock indices. You should generally stick to broad, established indices like the MSCI World, S&P 500, Euro Stoxx, or in Australia the All Ordinaries. Among those, it makes some sense to just choose your home country's main index, because that eliminates currency risk and is also often cheaper. Alternatively, you might want to use the opportunity to diversify internationally so that if your country's economy tanks, you won't lose your job and see your investment take a dive. Finally, you should of course choose a well-established, reputable issuer. But this isn't really a business for startups (neither shady nor disruptively consumer-friendly) anyway.",
"title": ""
},
{
"docid": "03d41dcf56859ae93fbc012bda231e5a",
"text": "As has been pointed out, one isn't cheaper than the other. One may have a lower price per share than the other, but that's not the same thing. Let's pretend that the total market valuation of all the stocks within the index was $10,000,000. (Look, I said let's pretend.) You want to invest $1,000. For the time being, let's also pretend that your purchasing 0.01% of all the stock won't affect prices anywhere. One company splits the index into 10,000 parts worth $1,000 each. The other splits the same index into 10,000,000 parts worth $1 each. Both track the underlying index perfectly. If you invest $1,000 with the first company, you get one part; if you invest $1,000 with the second, you get 1,000 parts. Ignoring spreads, transaction fees and the like, immediately after the purchase, both are worth exactly $1,000 to you. Now, suppose the index goes up 2%. The first company's shares of the index (of which you would have exactly one) are now worth $1,020 each, and the second company's shares of the index (of which you would have exactly 1,000) are worth $1.02 each. In each case, you now have index shares valued at $1,020 for a 2% increase ($1,020 / $1,000 = 1.02 = 102% of your original investment). As you can see, there is no reason to look at the price per share unless you have to buy in terms of whole shares, which is common in the stock market but not necessarily common at all in mutual funds. Because in this case, both funds track the same underlying index, there is no real reason to purchase one rather than the other because you believe they will perform differently. In an ideal world, the two will perform exactly equally. The way to compare the price of mutual funds is to look at the expense ratio. The lower the expense ratio is, the cheaper the fund is, and the less of your money is being eroded every day in fees. Unless you have some very good reason to do differently, that is how you should compare the price of any investment vehicles that track the same underlying commodity (in this case, the S&P 500).",
"title": ""
},
{
"docid": "c1492fef953735b5f6997e04a1d5492e",
"text": "\"The professional financial advisors do have tools which will take a general description of a portfolio and run monte-carlo simulations based on the stock market's historical behavior. After about 100 simulation passes they can give a statistical statement about the probable returns, the risk involved in that strategy, and their confidence in these numbers. Note that they do not just use the historical data or individual stocks. There's no way to guarantee that the same historical accidents would have occurred that made one company more successful than another, or that they will again. \"\"Past performance is no guarantee of future results\"\"... but general trends and patterns can be roughly modelled. Which makes that a good fit for those of us buying index funds, less good for those who want to play at a greater level of detail in the hope of doing better. But that's sorta the point; to beat market rate of return with the same kind of statistical confidence takes a lot more work.\"",
"title": ""
},
{
"docid": "7bcf0083707f1a4c04be84f0c391d5a5",
"text": "Sorry for the late reply. Nonetheless the Dow has the same pros as any other index but what sticks out to me is that all of the stocks are extremely popular with private investors. In my experience it helps to compare stock development of competitors in terms of popularity.",
"title": ""
},
{
"docid": "7cda4e508cbccdc13fb6c2499982293b",
"text": "You are correct about the first two questions. At the time it was last measured those were the percent invested in the Basic Materials sector for the ETF and its benchmark. Note, this ETF will be significantly different from its benchmark as it is an equal-weight index rather than the more common capitalization-weighted index. Meaning that this ETF could have materially different performance from its benchmark. The third column is the average sector weights of all the ETFs in Morningstar's Large Blend category. These are ETFs that generally invest in a broad collection of large U.S. stocks and (weighted?) average of all of them will be generally fairly close to the benchmark.",
"title": ""
},
{
"docid": "745af972c291ab920e3b2690a6d0ef9d",
"text": "Yes, it depends on the fund it's trying to mirror. The ETF for the S&P that's best known (in my opinion) is SPY and you see the breakdown of its holdings. Clearly, it's not an equal weighted index.",
"title": ""
}
] |
fiqa
|
5b8fa6d74cb4120302bd3c8b2170e413
|
Biggest stock price gain vs. biggest mkt cap gain
|
[
{
"docid": "04a2a79a70e0db2bef7ab9d57b6563bb",
"text": "\"When you look at those results you'll see that it lists the actual market cap for the stocks. The ones on the biggest price move are usually close the the $1B capitalization cut-off that they use. (The don't report anything with less than $1B in capitalization on these lists.) The ones on the biggest market cap are much larger companies. So, the answer is that a 40% change in price on a company that has $1B capitalization will be a $400M change in market cap. A 4% change on a company with $100B capitalization will be a $4B change in market cap. The one that moved 40% will make the \"\"price\"\" list but not the market cap list and vice versa.\"",
"title": ""
}
] |
[
{
"docid": "fca73e29b05038112a00f43c8a4f49ef",
"text": "You are right: if the combined value of all outstanding GOOG shares was $495B, and the combined value of all GOOGL shares was $495B, then yes, Alphabet would have a market cap of at least $990B (where I say at least only because I myself don't know that there aren't other issues that should be in the count as well). The respective values of the total outstanding GOOG and GOOGL shares are significantly less than that at present though. Using numbers I just grabbed for those tickers from Google Finance (of course), they currently stand thus:",
"title": ""
},
{
"docid": "871395ecfbafbbcb330ce375e66550b0",
"text": "\"Kind of matters because your definition of \"\"cost\"\" is solely based on a hindsight view of market movement. Lack of gain is not cost except from an inflationary perspective, versus actual value loss of entering near a top. On a long time scale, yes, the market will probably go up and value will return - but telling someone that now is the perfect time to enter is entirely debatable. Momentum is not fundamental and could reverse tomorrow for all you know.\"",
"title": ""
},
{
"docid": "ee5c8dd03dbbb88e869d9288e03091f7",
"text": "\"At any given moment, one can tally the numbers used for NAV. It's math, and little more. The Market Cap, which as you understand is a result of share value. Share value (stock price) is what the market will pay today for the shares. It's not only based on NAV today, but on future expectations. And expectations aren't the same for each of us. Which is why there are always sellers for the buyers of a stock, and vice-versa. From your question, we agree that NAV can be measured, it's the result of adding up things that are all known. (For now, let's ignore things such as \"\"goodwill.\"\") Rarely is a stock price simply equal to the NAV divided by the number of shares. Often, it's quite higher. The simplest way to look at it is that the stock price not only reflects the NAV, but investors' expectations looking into the future. If you look for two companies with identical NAV per share but quite different share prices, you'll see that the companies differ in that one might be a high growth company, the other, a solid one but with a market that's not in such a growth mode.\"",
"title": ""
},
{
"docid": "4d14c004981443285c0e14072fc0a322",
"text": "The biggest benefit to having a larger portfolio is relatively reduced transaction costs. If you buy a $830 share of Google at a broker with a $10 commission, the commission is 1.2% of your buy price. If you then sell it for $860, that's another 1.1% gone to commission. Another way to look at it is, of your $30 ($860 - $830) gain you've given up $20 to transaction costs, or 66.67% of the proceeds of your trade went to transaction costs. Now assume you traded 10 shares of Google. Your buy was $8,300 and you sold for $8,600. Your gain is $300 and you spent the same $20 to transact the buy and sell. Now you've only given up 6% of your proceeds ($20 divided by your $300 gain). You could also scale this up to 100 shares or even 1,000 shares. Generally, dividend reinvestment are done with no transaction cost. So you periodically get to bolster your position without losing more to transaction costs. For retail investors transaction costs can be meaningful. When you're wielding a $5,000,000 pot of money you can make your trades on a larger scale giving up relatively less to transaction costs.",
"title": ""
},
{
"docid": "35d17466538d7ee9d31e8ea996238f46",
"text": "Your three options are: Options 2 and 3 are obviously identical (other than transaction costs), so if you want to keep the stock, go for option 1, otherwise, go for option 3 since you have the same effect as option 2 with no transaction costs. The loss will likely also offset some of the other short term gains you mentioned.",
"title": ""
},
{
"docid": "88ec8414da1e0a42a4da03f9edf304eb",
"text": "\"For MCD, the 47¢ is a regular dividend on preferred stock (see SEC filing here). Common stock holders are not eligible for this amount, so you need to exclude this amount. For KMB, there was a spin-off of Halyard Health. From their IR page on the spin-off: Kimberly-Clark will distribute one share of Halyard common stock for every eight shares of Kimberly-Clark common stock you own as of the close of business on the record date. The deal closed on 2014-11-03. At the time HYH was worth $37.97 per share, so with a 1:8 ratio this is worth about $4.75. Assuming you were able to sell your HYH shares at this price, the \"\"dividend\"\" in the data is something you want to keep. With all the different types of corporate actions, this data is extremely hard to keep clean. It looks like the Quandl source is lacking here, so you may need to consider looking at other vendors.\"",
"title": ""
},
{
"docid": "96e142303cb6650812333485d62f01ca",
"text": "Out of the money options often have the biggest changes in value, when the stock moves upward. This person could also gain, by the implied (underlying) volatility of the stock rising if it moves erratically to either side. Still seems to be a very risky game, given only 4 days to expiry.",
"title": ""
},
{
"docid": "ddebe31d71f26aa6b26955c1a29cd63a",
"text": "One difference is the bid/ask spread will cost you more in a lower cost stock than a higher cost one. Say you have two highly liquid stocks with tiny spreads: If you wanted to buy say $2,000 of stock: Now imagine these are almost identical ETFs tracking the S&P 500 index and extrapolate this to a trade of $2,000,000 and you can see there's some cost savings in the higher priced stock. As a practical example, recently a popular S&P 500 ETF (Vanguard's VOO) did a reverse split to help investors minimize this oft-missed cost.",
"title": ""
},
{
"docid": "ba35bb7a4512b50fd8ff9c4c03c3af8d",
"text": "You don't see Buying and Selling. You see Bid and Ask. Best Bid--Highest Price someone is willing to pay to buy a stock. Best Ask - Lowest price someone is willing to accept to sell a stock. As for your second question, if you can look up Accumulation/Distribution Algorithm and Iceberg Order, you will get basic idea.",
"title": ""
},
{
"docid": "b1192c57a240d42fb0b50336f1dd4282",
"text": "\"The market capitalization of a stock is the number of shares outstanding (of each stock class), times the price of last trade (of each stock class). In a liquid market (where there are lots of buyers and sellers at all price points), this represents the price that is between what people are bidding for the stock and what people are asking for the stock. If you offer any small amount more than the last price, there will be a seller, and if you ask any small amount less than the last price, there will be a buyer, at least for a small amount of stock. Thus, in a liquid market, everyone who owns the stock doesn't want to sell at least some of their stock for a bit less than the last trade price, and everyone who doesn't have the stock doesn't want to buy some of the stock for a bit more than the last trade price. With those assumptions, and a low-friction trading environment, we can say that the last trade value is a good midpoint of what people think one share is worth. If we then multiply it by the number of shares, we get an approximation of what the company is worth. In no way, shape or form does it not mean that there is 32 billion more invested in the company, or even used to purchase stock. There are situations where a 32 billion market cap swing could mean 32 billion more money was invested in the company: the company issues a pile of new shares, and takes in the resulting money. People are completely neutral about this gathering in of cash in exchange for dilluting shares. So the share price remains unchanged, the company gains 32 billion dollars, and there are now more shares outstanding. Now, in some sense, there is zero dollars currently invested in a stock; when you buy a stock, you no longer have the money, and the money goes to the person who no longer has the stock. The issue here is the use of the continuous tense of \"\"invested in\"\"; the investment was made at some point, but the money doesn't really stay in this continuous state of being. Unless you consider the investment liquid, and the option to take money out being implicit, it being a continuous action doesn't make much sense. Sometimes the money is invested in the company, when the company causes stocks to come into being and sells them. The owners of stocks has invested money in stocks in that they spent that money to buy the stocks, but the total sum of money ever spent on stocks for a given company is not really a useful value. The market capitalization is an approximation, which under the efficient market hypothesis (that markets find the correct price for things nearly instantly) is reasonably accurate, of the value the company has collectively to its shareholders. The efficient market hypothesis isn't accurate, but it is an acceptable rule of thumb. Now, this value -- market capitalization -- is arguably not the total value of a company: other stakeholders include bond holders, labour, management, various contract counter-parties, government and customers. Some companies are structured so that almost all value is captured not by the stock owners, but by contract counter-parties (this is sometimes used for hiding assets or debts). But for most large publically traded companies, it (in theory) shouldn't be far off.\"",
"title": ""
},
{
"docid": "ef598db00822ea62dc1ec99fb6904b32",
"text": "Thanks. Just to clarify I am looking for a more value-neutral answer in terms of things like Sharpe ratios. I think it's an oversimplification to say that on average you lose money because of put options - even if they expire uselessly 90% of the time, they still have some expected payoff that kicks in 10% of the time, and if the price is less than the expected payoff you will earn money in the long term by investing in put options (I am sure you know this as a PhD student I just wanted to get it out there.)I guess more formally my question would be are there studies on whether options prices correspond well to the diversification benefits they offer from an MPT point of view.",
"title": ""
},
{
"docid": "6b0fa8c314404e4ce8dd329fb6961701",
"text": "Assuming the data you're referring to is this line: the difference might be related to the different exchanges on which the stock trades. FINRA could be listing the reported volume from one exchange, while the NASDAQ data might be listing the volume on all exchanges. This is an important distinction because AAV is a Canadian company that is listed on the Toronto Stock Exchange and the NYSE. The Q at the end of the line stands for NASDAQ, according to FINRA's codebook for those data. My guess is that the FINRA data is only reporting the volume for the NASDAQ exchange and not the total volume for all exchanges (Toronto, NASDAQ, NYSE, etc.) while the data straight from NASDAQ, oddly enough, is reporting the total volume. However, FINRA could also face reporting discrepancies, since it's a regulatory body and therefore might not have the most up-to-date volume data that the various exchanges can access. I don't know if it's related or not, but looking at the NASDAQ historical data, it looks like the volume on March 6, the day you're asking about, was much lower than the volume in most of the days immediately before or after it. For all I know, something might have happened that day concerning that particular stock or the market as a whole. I don't remember anything in particular, but you never know.",
"title": ""
},
{
"docid": "0cc8c705118c1a33d31241664c06f9e3",
"text": "I would think there would be heavy overlap between companies that do well and market cap. You're not going to get to largest market cap without being well managed, or at least in the top percentile. After all, in a normal distribution, the badly managed firms go out of business or never get large.",
"title": ""
},
{
"docid": "757ae34017097661e6373b817280c474",
"text": "In market cap weighted index there is fairly heavy concentration in the largest stocks. The top 10 stocks typically account for about 20% of the S&P 500 index. In Equal Weight this bias towards large caps is removed. The Market Cap method would be good when large stocks drive the markets. However if the markets are getting driven by Mid Caps and Small caps, the equal weight wins. Historically most big companies start out small and grow big fast in a short span of time. Thus if we were to do Market cap one would have purchased smaller number of shares of the said company as its cap/weight would have been small and when it becomes big we would have purchased the shares at a higher price. However if we were to do equal weight, then as the company grows big one would have more share at a cheaper price and would result in better returns. There is a nice article on this, also gives the comparision of the returns over a period of 10 years, where equal weight index has done good. It does not mean that it would continue. http://www.investopedia.com/articles/exchangetradedfunds/08/index-debate.asp#axzz1RRDCnFre",
"title": ""
},
{
"docid": "f619457d2ac508e86957b06260510702",
"text": "\"This is a really interesting question and something a lot of work is being done to understand. I'm going to look at the closely related question \"\"Do non market-cap etf weighting methods consistently outperform once you take into account their investment biases?\"\" Let's use revenue weighting as a reason why investment biases are so important. In revenue weighting, you would own almost no fast-growing tech companies as they generally have little revenue. This sounds great if we are talking about say Pets.com in the late 90s but you also would miss most of the rise of Google. To believe in these ETFs consistently outperform (adjusted for risk) you would have to have a strong reason to believe that earnings, sales, or dividends are a better predictor of company value than market value. Market analysts include the above three metrics and many more when pricing stocks so out-performance using only one of the above metrics seems unlikely. There is one caveat to this and that is value and small cap stocks have been shown to give slightly better risk-adjusted returns in the very long run (see Fama/French) and many of these alternative weighting methods will have a value or small cap bias. First, it is unclear if this out-performance will continue now that it is more widely known. Second, even if you believe this will continue you can more easily and cheaply get this bias though value/small-cap etfs than these weighting schemes. In the end, the only thing that is perfectly clear is that higher fee investments will generally under-perform.\"",
"title": ""
}
] |
fiqa
|
93fe2e8cc0d69a4e28254b22a5b1d568
|
Am I entitled to get a maintenance loan?
|
[
{
"docid": "c0db27213851577a1005e953be0e24a6",
"text": "According to GOV.UK, you can only apply for Student Finance if: Since you don't fulfill the criterion 2 and 3, you are technically not eligible for Student Finance. Since you have received information from Student Finance England that you can apply for the maintenance loan, you should either write to them or call them again, to confirm the information given to you.",
"title": ""
},
{
"docid": "2d359b016cb994f284817a4a7993af99",
"text": "I think you're eligible for the tuition fee loan but not the maintenance loan. I think that SFE were suggesting that you'd be eligible under point 4 here 4: People with the right of permanent residence in the UK If you satisfy all the conditions under this category, you will be eligible for full Student Support. To be eligible: (a) you have the right of permanent residence in the UK; and (b) you are ordinarily resident in England on the first day of the first academic year of your course; and (c) you were ordinarily resident in the UK and Islands for three years before the first day of the first academic year of the course; and (d) if your three-year residence in the UK and Islands was at any time mainly for the purpose of receiving full-time education, you must have been ordinarily resident in the UK or elsewhere in the EEA and/or Switzerland immediately prior to the three-year period of ordinary residence in the UK and Islands. It does not matter if you were in the EEA and/or Switzerland mainly in order to receive full-time education during this earlier period. Point (b) would be the reason for asking you to prove you were in England on 1 September, but since you were under three years old when you left the UK, you wouldn't satisfy point (c). You should be eligible for the tuition fee loan under point 2 2: EU nationals, and family If you satisfy all the conditions under this category only, you are eligible only for a loan to pay your tuition fees. To be eligible: (a) on the first day of the first academic year of the course, you must be: a UK national; or a non-UK EU national who is in the UK as a self-sufficient person or as a student; the relevant family member of such a person above; and (b) you must have been ordinarily resident in the EEA and/or Switzerland for three years before the first day of the first academic year of the course; and (c) the main purpose for your residence in the EEA and/or Switzerland must not have been to receive full-time education during any part of the three year period.",
"title": ""
}
] |
[
{
"docid": "2df7a1cf3ca314dbb9aa09b8944a2b57",
"text": "I went here: Consumer Loan Law. It seems that a consumer loan is anything other than a business loan or mortgage. However, in California it seems to include a mortgage. It's a bit weird to see that a HEL can be considered a consumer loan even if it is the primary or the only loan on a property. Getting a HEL can be a great low cost way to (re)finance a property as they tend to have low or no closing costs and lower interest rates.",
"title": ""
},
{
"docid": "ce37deb1b4b12f1c4a2d3fed25722ad9",
"text": "I just wanted to add one factor to the other answers. The cost of maintenance etc. is not a fraction of the cost of financing - it is more likely a fraction of the value of the house, and a function of its age. If you say you need to replace a roof every 25 years, and that costs $10,000 (depends on the size of the house, obviously), then you need to set aside $400 a year for roof repair. Other costs (painting, flooring, kitchen, bathrooms, water heaters, heating, AC, yard upkeep etc) can be roughly estimated in the same way. A rule of thumb is 1% of the value of the house per year to cover all big-ticket maintenance. If you pay 4% mortgage, that would increase the reserve by 25%; but if interest rates rise, the fraction may be smaller (I remember paying over 10% mortgage...). In general, whether keeping a property for long term rental income (with the potential for appreciation - but prices can go up and down) is a good idea will largely depend on your ability to predict future costs and value. If you have a variable mortgage, that will be harder to do.",
"title": ""
},
{
"docid": "83b726abb06b3facfd6be7b430d842bc",
"text": "Good! The article says it was some kind of collateral protection insurance that customers were signed up for despite it being unrequired for the loan. The accusations is that WF racketeered about 800,000 loans by bundling in this bunk insurance cost as part of the loan structure. I'm glad you're not caught up in it.",
"title": ""
},
{
"docid": "9b1152fdf8f30f8d0a612bb1a60bffda",
"text": "I am sure that laws differ from state to state. My brother and I had to take over my dads finances due to his health. He had a vehicle that had a loan on it. We refinanced the vehicle and it was in our name. One of our family members needed a vehicle and offered to take over the payment. Our attorney advised us to be on the insurance policy with them and make sure if was paid correctly. We are in Indiana. I know it is hard to discuss finances with family members. However, if you co-signed the loan I think it would be wise to either have your name added to the insurance policy or at least have your brother show proof it has been paid. If you are not comfortable with that it may be a good idea to make sure the bank has your correct address and ask if they would notify you if insurance has lapsed. If your on the loan and there is no insurance at the very least if the vehicle was damaged you would still be responsible to pay the loan.",
"title": ""
},
{
"docid": "540a1e14b496ef9c668fa2682afccea2",
"text": "I do not meet your qualifications but this is what I would do: 1) Save an amount that can replace your bike and accessories if it is stolen. Don't touch it for anything but that. 2) Compute an average monthly cost for maintenance items, double that for a couple of months until you have the account built up, then budget that amount every month. If your bike/headlight/front tire, get stolen or broken beyond repair, take it out of the first account. Then your savings priority should be to rebuild that account. I would be a bit alarmed if you have to keep hitting this account for legitimate reasons. When a tire goes flat, or other normal wear and tear item occurs, take it out of the second account. This account should fluctuate regularly, and it is normal. During certain months you may want to increase this amount (more glass on the street because of outdoor events means more flat tires). The same kind of thing holds true for a car. Putting numbers to some figures would help. I think the most alarming thing about your post is that a theft is somewhat ordinary. Yikes!",
"title": ""
},
{
"docid": "887b6da259f747c3ebaa6117d49b4758",
"text": "Not sure if it is the same in the States as it is here in the UK (or possibly even depends on the lender) but if you have any amount outstanding on the loan then you wouldn't own the vehicle, the loan company would. This often offers extra protection if something goes wrong with the vehicle - a loan company talking to the manufacturer to get it resolved carries more weight than an individual. The laon company will have an army of lawyers (should it get that far) and a lot more resources to deal with anything, they may also throw in a courtesy car etc.",
"title": ""
},
{
"docid": "b5b05e3e291a14083a384f415bdd26de",
"text": "\"Your CHMC insurance is payable to the lender not to you if you default. So technically you get nothing from it. However the likelihood is that you could not have got this loan, or got it only at an extremely high interest rate, without this insurance. The Canadian government has a page on CHMC, including a link to a page called \"\"What's in it for you?\"\".\"",
"title": ""
},
{
"docid": "34b2428bf53b21abce48b864d147ab59",
"text": "Many factors really. No loans but my HOA is $240 per month. Car is $292. I keep having my bikes stolen (mine twice and girlfriend's once within the past 4 months). I hit a pothole and tore a hole in my oil pan last week, AC broke a few months ago in my condo. I just can't get ahead but I'm hopeful.",
"title": ""
},
{
"docid": "b228fd9c49d849a76e562c6128b35a42",
"text": "The key here is that you are defacto running your own company no matter if you acknowledge it or not. In the end these questions have the goal of deciding if you can and will repay the loan. Presumably you filed taxes on your income. These can be shown to the loan officer as proof you have the ability to repay your loan. Running your freelancing as a business has advantages of being able to deduct normal expenses for running the business from your revenue. I am not sure how business cards improves your credit worthiness as they can be had for $10 in about an hour.",
"title": ""
},
{
"docid": "ff3f6edb095adc5d4fef8ade880d29de",
"text": "Are you interested in refurbishing your rented home here in Singapore? If you are struggling with financial difficulties, you can apply for a renovation loan offered by banks. Most banks in Singapore offer renovation loans and home loans only to those who own a property. It is very hard to find a renovation loan for a rented home. **Home loans for renovation** You can take a home loan for your rented property and top up your home loan to finance your renovation project. If you already have a home loan, all you need to do is ask your bank representative to add extra financing to your [home loan](https://www.bankbazaar.sg/home-loan.html) for renovation purpose. Applying for a home loan for a rented property is simple. You can use an online loan calculator and compare home loans provided for a rented property. According to your repayment capacity and financial requirements, you can choose a home loan and use it for renovation. Make sure you have a good credit score while applying so that your home loan gets approved easily. **Personal loans for renovation** If you are not able to find too many home loans or renovation loans for rented property, you need not worry. Have you considered taking a personal loan to make awesome home improvement measures? That’s right; you can apply for a personal loan and use the funds to renovate your abode. The best thing about a personal loan is that a lender does not enquire about the purpose for your loan application. So, you can use your personal loan for any of your needs. *Eligibility criteria for personal loans* The general criteria to be qualified for a personal loan in Singapore are: The applicant should be 21 to 65 years old. The applicant should be a Singaporean or a permanent resident or a foreigner. The minimum income requirement for a Singaporean or PR is generally S$20,000 p.a. and S$40,000 p.a. for a foreigner. **When are personal loans ideal for renovation?** There are a few situations when a personal loan is the best option for renovating your rented property: Many banks give personal loans with attractive promotions such as interest-free loan for a certain period. You can take this loan and even repay the full amount before the zero-interest period expires. This will help you save efficiently on your renovation project. The minimum income required to secure a home loan is generally higher than the income requirement for a personal loan. Hence, a personal loan is a better option. A home loan generally gives a higher sum of money than a personal loan. This high amount is suitable for a construction project but will be excessive for renovation work. Therefore, it makes more sense to apply for a personal loan to give the perfect makeover to the kitchenette in your home. The approval process for a home loan is typically very lengthy. Personal loan applications get approved within 24 hours by most banks in Singapore. So now you can apply for a personal loan without any tension and remodel your balcony to have a party at home sweet home! Personal loan rates are generally lower than home loan rates. You can refurbish your living space by paying your loan at an interest rate not more than 4%. Now, you would have got a fair idea about how to finance your remodelling work. Always remember to enquire about every loan’s terms and conditions. Never sign any loan contract without being absolutely clear about the loan’s features.",
"title": ""
},
{
"docid": "fbe3c32df23d6bab65850a0504a96d0d",
"text": "Very generally speaking if you have a loan, in which something is used as collateral, the leader will likely require you to insure that collateral. In your case that would be a car. Yes certainly a lender will require you to insure the vehicle that they finance (Toyota or otherwise). Of course, if you purchase a vehicle for cash (which is advisable anyway), then the insurance option is somewhat yours. Some states may require that a certain amount of coverage is carried on a registered vehicle. However, you may be able to drop the collision, rental car, and other options from your policy saving you some money. So you buy a new car for cash ($25K or so) and store the thing. What happens if the car suffers damage during storage? Are you willing to save a few dollars to have the loss of an asset? You will have to insure the thing in some way and I bet if you buy the proper policy the amount save will be very minimal. Sure you could drop the road side assistance, rental car, and some other options, during your storage time but that probably will not amount to a lot of money.",
"title": ""
},
{
"docid": "08196dee65ad564e99103b126fed405a",
"text": "Yes you will need an emergency fund for the rental. Besides appliances, or a roof, that might need to be replaced, you will also have to protect against being unable to rent the unit. Another risk is that you may have a tenant damage the unit. While you can get the money through the courts it may take months or longer. You can't wait for the money before you repair the unit. Keeping the rental unit funds separate from the rest of your funds will allow you to make sure you are adequately protecting yourself.",
"title": ""
},
{
"docid": "84da15fcc9d360379289e1a748504713",
"text": "The loan is very likely to be syndicated, yes. I only state 7-10 because all of our loans to this point have been 7 year terms. And in many ways, this loan is just one of those loans, multiplied out in a modular sense.",
"title": ""
},
{
"docid": "4c8dc8cbfd95b961f3ef5a7719eb7907",
"text": "My credentials: I used to work on mortgages, about 5 years ago. I wasn't a loan officer (the salesman) or mortgage processor (the grunt who does the real work), but I reviewed their work fairly closely. So I'm not an absolute authority, but I have first-hand knowledge. Contrary to the accepted answer, yes the bank is obligated to offer you a loan - if you meet their qualifications. This may sound odd, and as though it's forcing a bank to give money when it doesn't want to, but there is good reason. Back in the 1950's through 1980's, banks tended to deny loans to African Americans who were able to buy nicer homes because the loan officer didn't quite 'feel' like they were capable of paying off an expensive house, even if they had the exact same history and income as a white person who did get approved. After several rounds of trying to fix this problem, the government finally decreed that the bank must have a set, written criteria by which it will approve or decline loans, and the interest rates provided. It can change that criteria, but those changes must apply to all new customers. Banks are allowed a bit of discretion to approve loans that they may normally decline, but must have a written reason (usually it's due to some relationship with the customer's business (this condition adds a lot of extra rules), or that customer has a massive family and all 11 other siblings have gotten loans from the same loan officer - random rare stuff that can be easily documented if/when the government asks). The bank has no discretion to decline a loan at will - I've seen 98-year-olds sign a 30-year mortgage, and the bank was overjoyed because it showed that they didn't discriminate against the elderly. The customer could be a crackhead, and the bank can't turn them down if their paperwork, credit, and income is good. The most the loan officer could do is process the loan slowly and hope the crackhead gets arrested before the bank spends any more money. The regulations for employees new to the workforce are a bit less wonderful, but the bank will want 30+ days of income history (30 days, NOT 4 weeks) if you have it. BUT, if you are a fresh new employee, they can do the loan using your written and signed job offer as proof of income. However, I discourage you from using this method to buy a house. You are much, much better off renting for a while and learning the local area before you shop for a house. It's too easy to buy a house without knowing the city, then discover that you have a hideously slow drive to work and are in the worst part of town. And, you may not like the company as much, or you may not be a good fit. It's not uncommon to leave a company within a year or two. You don't want a house that anchors you to one place while you need the freedom to explore career options. And consider this: banks love selling mortgages, but they hate holding them. They want to collect that $10,000 closing fee, they couldn't care less about the 4% interest trickling in over 30 years. Once they sign the mortgage, they try to sell it to investors who want to buy high-grade debt within a month. That sale gives them all the money back, so they can use it to sell another mortgage and collect another $10,000. If the bank has its way, it has offloaded your mortgage before you send the first payment to them. As a result, it's a horrible idea to buy a house unless you expect to live there at least 5 or 10 years, because the closing costs are so high.",
"title": ""
},
{
"docid": "132988cfee7571ec7007c1abf1738e69",
"text": "\"Without knowing the details of your financial situation, I can only offer general advice. It might be worth having a financial counselor look at your finances and offer some custom advice. You might be able to find someone that will do this for free by asking at your local church. I would advise you not to try to get another loan, and certainly not to start charging things to a credit card. You are correct when you called it a \"\"nightmare.\"\" You are currently struggling with your finances, and getting further into debt will not help. It would only be a very short-term fix and have long-lasting consequences. What you need to do is look at the income that you have and prioritize your spending. For example, your list of basic needs includes: If you have other things that you are spending money on, such as medical debt or other old debt that you are trying to pay off, those are not as important as funding your basic needs above. If there is anything you can do to reduce the cost of the basic needs, do it. For example, finding a cheaper place to live or a place closer to your job might save you money. Perhaps accepting nutrition assistance from a local food bank or the Salvation Army is an option for you. Now, about your car: Your transportation to your job is very much one of your basic needs, as it will enable you to pay for your other needs. If you can use public transportation until you can get a working car again, or you can find someone that will give you a ride, that will solve this problem. If not, you'll need to get a working car. You definitely don't want to take out another loan for a car, as you are already having trouble paying the first loan. I'm guessing that it will be less expensive to get the engine repaired than it will be to buy a new car at this point. But that is just a guess. You'll need to find out how much it will cost to fix the car, and see if you can swing it by perhaps eliminating expenses that aren't necessary, even for a short time. For example, if you are paying installments on medical debt, you might have to skip a payment to fix your car. It's not ideal, but if you are short on cash, it is a better option than losing your job or taking out even more debt for your car. Alternatively, buying another, functional car, if it costs less than fixing your current car, is an option. If you don't have the money to pay your current car loan payments, you'll lose your current car. Just to be clear, many of these options will mess up your credit score. However, borrowing more, in an attempt to save your credit score, will probably only put off the inevitable, as it will make paying everything off that much harder. If you don't have enough income to pay your debts, you might be better off to just take the credit score ding, get back on your feet, and then work to eliminate the debt once you've got your basic needs covered. Sorry to hear about your situation. Again, this advice is just general, and might not all apply to your financial details. I recommend talking to the pastor of a local church and see if they have someone that can sit down with you and discuss your options.\"",
"title": ""
}
] |
fiqa
|
f5ceab1fee3987b7b1a218e3df244864
|
Possible pro-rated division of asset strategies without a prenup?
|
[
{
"docid": "be5bf2ec0a57e5f315ad4e2f1ba5a891",
"text": "\"Absent a pre-nup, it's a case of \"\"lawyer vs lawyer,\"\" you can't count on protecting what you came into the marriage with. In theory, what you propose sounds fair, but the reality of divorce is that everything is fair game. much depends on each spouse's earnings and impact of child-raising. For example, a woman who gives up time in a career may go after more than half, as she may be X years behind in her career path due to the choices made to stay home with the kids. I think each divorce is unique, not cookie cutter.\"",
"title": ""
}
] |
[
{
"docid": "af0b1df1287ed9403409abff8d5d9e1c",
"text": "Wow! First, congratulations! You are both making great money. You should be able to reach your goals. Are we on the right track ? Are we doing any mistakes which we could have avoided ? Please advice if there is something that we should focus more into ! I would prioritize as follows: Get on the same page. My first red flag is that you are listing your assets separately. You and your wife own property together and are raising your daughter together. The first thing is to both be on the same page with your combined income and assets. This is critical. Set specific goals for the future. Dreaming and big-picture life planning will be the foundation for building a detailed plan for reaching your goals. You will see more progress with more sacrifice. If you both are not equally excited about the goals, you will not both be equally willing to sacrifice lifestyle now. You have the income now to be able to set yourselves up to do whatever you want in 10 years, if you can agree on what you want. Hire a financial planner you trust. Interview people, ask someone who is where you want to be in 10 years. You need someone with experience that can guide you through these questions and understands how to manage your income stream. Start saving for retirement in tax-advantaged accounts. This should be as much as 10%-15% of your income combined, so $30k-$45k per year. You need to start diversifying your investments. Real estate is great, but I would never recommend it as this large a percentage of net worth. Start saving for your child's education. Hard to say what you need here, since I don't know your goals. A financial planner should assist you with this. Get rid of your debt. Out of your $2.1M of rental real estate and land, you have $1.4M of debt. It will be difficult to start a business with that much additional debt. It will also put stress on your retirement that you don't need. You are taking on lots of risk here. I would sell all but maybe one of the properties and let it cash flow. This will free up cash to start investing for retirement or future business too. Buy more rental in the future with cash only. You have plenty of income to do it this way, and you will be setting yourself up for a great future. At this point you can continue to pile funds into any/all your investments, with the goal of using the funds to start a business or to live on. If all your investments are tied up in real estate, you wont have anything to draw on if needed for a business opportunity. You need to weigh this out in your goal and planning. What should we do to prepare for a comfortable retirement and safety You cannot plan for or see all scenarios. However, good planning will give you more options and more choices. Investing driven by fear will set you up for failure. Spend less than you make. Be patient. Be generous. Cheers!",
"title": ""
},
{
"docid": "0d43b31026ce05779c40b8f90373cf9c",
"text": "I think your getting at the fact that 50% of marriages end in divorce, but I don't think that means it's 50/50 for every relationship. I haven't seen the numbers but I'd bet there's trends related to wealth, prior home life, etc.",
"title": ""
},
{
"docid": "a452388558c5efe9cfa6b7e1088836e9",
"text": "\"Give me your money. I will invest it as I see fit. A year later I will return the capital to you, plus half of any profits or losses. This means that if your capital under my management ends up turning a profit, I will keep half of those profits, but if I lose you money, I will cover half those losses. Think about incentives. If you wanted an investment where your losses were only half as bad, but your gains were only half as good, then you could just invest half your assets in a risk-free investment. So if you want this hypothetical instrument because you want a different risk profile, you don't actually need anything new to get it. And what does the fund manager get out of this arrangement? She doesn't get anything you don't: she just gets half your gains, most of which she needs to set aside to be able to pay half your losses. The discrepancy between the gains and losses she gets to keep, which is exactly equal to your gain or loss. She could just invest her own money to get the same thing. But wait -- the fund manager didn't need to provide any capital. She got to play with your money (for free!) and keep half the profits. Not a bad deal, for her, perhaps... Here's the problem: No one cares about your thousands of dollars. The costs of dealing with you: accounting for your share, talking to you on the phone, legal expenses when you get angry, the paperwork when you need to make a withdrawal for some dental work, mailing statements and so on will exceed the returns that could be earned with your thousands of dollars. And then the SEC would probably get involved with all kinds of regulations so you, with your humble means and limited experience, isn't constantly getting screwed over by the big fund. Complying with the SEC is going to cost the fund manager something. The fund manager would have to charge a small \"\"administrative fee\"\" to make it worthwhile. And that's called a mutual fund. But if you have millions of free capital willing to give out, people take notice. Is there an instrument where a bunch of people give a manager capital for free, and then the investors and the manager share in the gains and losses? Yes, hedge funds! And this is why only the rich and powerful can participate in them: only they have enough capital to make this arrangement beneficial for the fund manager.\"",
"title": ""
},
{
"docid": "671a7c03188d20ca748faab01b5e0b28",
"text": "Asset protection is broad subject. In your examples it is certainly possible to have accounts that exist undisclosed from a spouse and legally inaccessible by said spouse. In the US, balances in 401k retirement accounts are exempt from forfeitures in bankruptcy. The only trick to secret stashes is that it involves you having any wealth in the first place, that you don't need to access. It is more worth it, for most people, to use all of their access to wealth to get out of debt, earn claims to property, and save for retirement. This takes up all of their earnings, making hidden wealth of any significant portion to be an impractical pipe dream. But with trust laws, corporate laws, and marriage property laws being different in practically every jurisdiction, there is plenty of flexibility to construct the form of your secret wealth. Cryptocurrency makes it much easier, at the expense of net asset value volatility.",
"title": ""
},
{
"docid": "c6afc08aa2ccb47a510e4af39c642a8d",
"text": "Fidelity recently had an article on their website about deferred annuities (variable and fixed) that don't have the contribution limitations of an IRA, are a tax-deferred investment, and can be turned into a future income stream. I just started investigating this for myself. DISCLAIMER: I'm not a financial professional, and would suggest that you consult with a fee-only planner and tax advisor before making any decision.",
"title": ""
},
{
"docid": "f0e42866e18ab51395e88ba021614b7d",
"text": "I'm not going to speculate on the nature of your relationship with your wife, but the fact that you are worried about what would happen in the event of a divorce is a bit concerning. Presumably you married her with the intent of staying together forever, so what's the big deal if you spend 50k upgrading the house you live in, assuming you won't get divorced? Now, if you really are worried about something happening in the future, you might want to seek legal advice about the content of the prenup. I am guessing if the 400k were your assets before marriage, you have full claim to that amount in the event of a divorce*. If you document the loan, or make some agreement, I would think you would have claim to at least some of the house's appreciation due to the renovations if they were made with your money*. *obligatgory IANAL",
"title": ""
},
{
"docid": "a2c8cb46019e0553b262d0e0e3d9557d",
"text": "\"You are not allowed to take a retirement account and move it into the beneficiary's name, an inherited IRA is titled as \"\"Deceased Name for the benefit of Beneficiary name\"\". Breaking the correct titling makes the entire account non-retirement and tax is due on the funds that were not yet taxed. If I am mistaken and titling remained correct, RMDs are not avoidable, they are taken based on your Wife's life expectancy from a table in Pub 590, and the divisor is reduced by one each year. Page 86 is \"\"table 1\"\" and provides the divisor to use. For example, at age 50, your wife's divisor is 34.2 (or 2.924%). Each year it decrements by 1, you do not go back to the table each year. It sounds like the seller's recommendation bordered on misconduct, and the firm behind him can be made to release you from this and refund the likely high fees he took from you. Without more details, it's tough to say. I wish you well. The only beneficiary that just takes possession into his/her own account is the surviving spouse. Others have to do what I first described.\"",
"title": ""
},
{
"docid": "363c2829224280e5295cefae7404911e",
"text": "In the US, illegal. Giving free investment advice (opinions) is really hard to get arrested for. Might lose you a friend, but nothing that would get cross-wise with the Securities and Exchange Commission. That said, I would never put those opinions in writing.",
"title": ""
},
{
"docid": "e968810a7e746ad9c1f0ec0096e1adf5",
"text": "\"For one thing fund managers, even fund management companies, own less money than their clients put together. On the whole they simply cannot underwrite 50% of the potential losses of the funds they manage, and an offer to do so would be completely unsecured. Warren Buffet owns about 1/3 of Berkshire Hathaway, so I suppose maybe he could do it if he wanted to, and I won't guess why he prefers his own business model (investing in the fund he manages, or used to manage) over the one you propose for him (keeping his money in something so secure he could use it to cover arbitrary losses on B-H). Buffett and his investors have always felt that he has sufficient incentive to see B-H do well, and it's not clear that your scheme would provide him any useful further incentive. You say that the details are immaterial. Supposing instead of 50% it was 0.0001%, one part in a million. Then it would be completely plausible for a fund manager to offer this: \"\"invest 50 million, lose it all, and I'll buy dinner to apologise\"\". But would you be as attracted to it as you would be to 50%? Then the details are material. Actually a fund manager could do it by taking your money, putting 50% into the fund and 50% into a cash account. If you make money on the fund, you only make half as much as if you'd been fully invested, so half your profit has been \"\"taken\"\" when you get back the fund value + cash. If you lose money on the fund, pay you back 50% of your losses using the cash. Worst case scenario[*], the fund is completely wiped out but you still get back 50% of your initial investment. The combined fund+cash investment vehicle has covered exactly half your losses and it subtracts exactly half your profit. The manager has offered the terms you asked for (-50% leverage) but still doesn't have skin the game. Your proposed terms do not provide the incentive you expect. Why don't fund managers offer this? Because with a few exceptions 50% is an absurd amount for an investment fund to keep in cash, and nobody would buy it. If you want to use cash for that level of inverse leverage you call the bank, open an account, and keep the interest for yourself. You don't expect your managed fund to do it. Furthermore, supposing the manager did invest 100% of your subscription in the fund and cover the risk with their own capital, that means the only place they actually make any profit is the return on a risk that they take with their capital on the fund's wins/losses. You've given them no incentive to invest your money as well as their own: they might as well just put their capital in the fund and let you keep your money. They're better off without you since there's less paperwork, and they can invest whatever they like instead of carefully matching whatever money you send them. If you think they can make better picks than you, and you want them to do so on your behalf, then you need to pay them for the privilege. Riding their coattails for free is not a service they have any reason to offer you. It turns out that you cannot force someone to expose themselves to a particular risk other than by agreeing that they will expose themselves to that risk and then closely monitoring their investment portfolio. Otherwise they can find ways to insure/hedge the risk they're required to take on. If it's on their books but cancelled by something else then they aren't really exposed. So to provide incentive what we normally want is what Buffett does, which is for the fund manager to be invested in the fund to keep them keen, and to draw a salary in return for letting you in[**]. Their investment cannot precisely match yours because the fund manager's capital doesn't precisely match your capital. It doesn't cover your losses because it's in the same fund, so if your money vanishes the fund manager loses too and has nothing to cover you with. But it does provide the incentive. [*] All right, I admit it, worst case scenario there's a total banking collapse, end of civilization as we know it, and the cash account defaults. But then even in your proposed scheme it's possible that whatever assets the fund manager was using as security could fail to materialise. [**] So why, you might ask, do individual fund managers get bonuses in return for meeting fixed targets instead of only being part-paid in shares in their own fund whose value they can then maximise? I honestly don't know, but I suspect \"\"lots of reasons\"\". Probably the psychology of rewarding them for performance in a way that compares with other executive posts or professions they might take up instead of fund management. Probably the benefit to the fund itself, which wants to attract more clients, of beating certain benchmarks. Probably other things including, frankly, human error in setting their compensation packages.\"",
"title": ""
},
{
"docid": "285b348c6ae5fc496027cc017783fe17",
"text": "Yes. It's called executive hedging, and it's a lot more common than most people know. As long as it's properly disclosed and the decision is based on publicly available information, there's technically nothing wrong with it. Krispy Kreme, Enron, MCI, and ImClone are the most notable companies that had executives do it on a large scale, but almost every company has or had executives execute a complex form of hedging known as a prepaid variable forward (PVF). In a PVF, the executive gives his shares to an investment bank in exchange for a percentage of cash up front. The bank then uses the executive shares to hedge in both directions for them. This provides a proxy that technically isn't the executive that needs to disclose. There's talk about it needing to be more public at the SEC right now. http://www.sec.gov/news/statement/020915-ps-claa.html",
"title": ""
},
{
"docid": "d618f155ef12b1224a787c896d6999c1",
"text": "This is not what you normally get told, including by partners who were there at the time. What IPO were you referring to? Andersen Consulting / Accenture's IPO was some time after the split. Edit: spun off? It wasn't what you'd call a friendly split",
"title": ""
},
{
"docid": "cd7909dfb416a7ee1c38b72553366581",
"text": "That is not an effective strategy for hiding assets. If you own any stake in those corporations, the attorney can target that ownership interest. If you don't have any ownership interest in those companies, then you're just like any other American dealing with other companies - no one expects to get a judgment against their adversary's apartment complex.",
"title": ""
},
{
"docid": "1569f93563ab208396b84015c60d687d",
"text": "* Absolutely agree with /u/IsAnAlpaca * You /must/ not agree to this without seeing his balance sheet. * That means assets and liabilities, but also ask for the last 12 months' cash flow * Inability or unwillingness to provide any of those things is a HUGE no-go red flag.",
"title": ""
},
{
"docid": "919c215dc649a8d23306318f5a6a9451",
"text": "Many partnership agreements include a shotgun clause: one person sets a price, the other can either buy at that price or sell at it. It's rather brutal. You can make offers that you know are less than the company is worth if you're sure the other person will have to take that money from you, say if you know they can't run the company without you. He has asked for $X to be bought out, and failing that he would like to keep owning his half and send his wife (who may very well be competent, but who among other things has a very ill husband to deal with) to take his place. If he can occasionally contribute to the overall vision, and she can do the day to day, then keeping things as they are may be the smart move. But if that's not possible, it doesn't mean you have to buy him out for twice what you think it's worth. In the absence of a partnership agreement, it's going to be hard to know what to do. But one approach might be to pretend there is a shotgun clause. Ask him, if he thinks half the company is worth $X, if he's willing to buy you out for that price and have his wife run it without you. He is likely to blurt out that it isn't worth that and she can't do that. And at that point, you'll actually be negotiating.",
"title": ""
},
{
"docid": "5a471ff2224383dc5a4b1d140d6501ee",
"text": "The methodology for divisor changes is based on splits and composition changes. Dividends are ignored by the index. Side note - this is why, in my opinion, that any discussion of the Dow's change over a long term becomes meaningless. Ignoring even a 2% per year dividend has a significant impact over many decades. The divisor can be found at http://wsj.com/mdc/public/page/2_3022-djiahourly.html",
"title": ""
}
] |
fiqa
|
de7dbbebb351fc9463ebcb645fa14307
|
Reinvesting earnings increases the book value of equity?
|
[
{
"docid": "2b143acbcb0db499f15b967cf333ea82",
"text": "The book value is Total Assets minus Total Liabilities and so if you increase the Total Assets without changing the Total Liabilities the difference gets bigger and thus higher. Consider if a company had total assets of $4 and total liabilities of $3 so the book value is $1. Now, if the company adds $2 to the assets, then the difference would be 4+2-3=6-3=3 and last time I checked 3 is greater than 1. On definitions, here are a couple of links to clarify that side of things. From Investopedia: Equity = Assets - Liabilities From Ready Ratios: Shareholders Equity = Total Assets – Total Liabilities OR Shareholders Equity = Share Capital + Retained Earnings – Treasury Shares Depending on what the reinvestment bought, there could be several possible outcomes. If the company bought assets that appreciated in value then that would increase the equity. If the company used that money to increase sales by expanding the marketing department then the future calculations could be a bit trickier and depend on what assumptions one wants to make really. If you need an example of the latter, imagine playing a game where I get to make up the rules and change them at will. Do you think you'd win at some point? It would depend on how I want the game to go and thus isn't something that you could definitively say one way or the other.",
"title": ""
}
] |
[
{
"docid": "c242c3c619edd67a2cb3f91a7f5277db",
"text": "However what actually appears to happen is that the 100k is invested into the company to fund some growth plan. So is it actually the case that E's company is worth 400k only AFTER the transaction? Is the 100k added to the balance sheet as cash and would the other 300k be listed as an IP asset? The investor gets 25% of the shares of the company and pays $100k for them, so Owner's Equity increases by $100k, and the company gets $100k more in cash. The $400k number is an implicit calculation: if 25% of the company is worth $100k, 100% of the company is worth $400k. It's not on the books: the investor is just commenting that they feel that they are being over-charged.",
"title": ""
},
{
"docid": "3fb7e228563796fa46d65b6918fe1cd1",
"text": "I have heard that people say the greater earning means greater intrinsic value of the company. Then, the stock price is largely based on the intrinsic value. So increasing intrinsic value due to increasing earning will lead to increasing stock price. Does this make sense ? Yes though it may be worth dissecting portions here. As a company generates earnings, it has various choices for what it can do with that money. It can distribute some to shareholders in the form of dividends or re-invest to generate more earnings. What you're discussing in the first part is those earnings that could be used to increase the perceived value of the company. However, there can be more than a few interpretations of how to compute a company's intrinsic value and this is how one can have opinions ranging from companies being overvalued to undervalued overall. Of Mines, Forests, and Impatience would be an article giving examples that make things a bit more complex. Consider how would you evaluate a mine, a forest or a farm where each gives a different structure to the cash flow? This could be useful in running the numbers here.",
"title": ""
},
{
"docid": "7aec2e5d1480a09c5e8c8671d32c6e8d",
"text": "\"A bit strange but okay. The way I would think about this is again that you need to determine for what purpose you're computing this, in much the same way you would if you were to build out the model. The IPO valuation is not going to be relevant to the accretion/dilution analysis unless you're trying to determine whether the transaction was net accretive at exit. But that's a weird analysis to do. For longer holding periods like that you're more likely to look at IRR, not EPS. EPS is something investors look at over the short to medium term to get a sense of whether the company is making good acquisition decisions. And to do that short-to-medium term analysis, they look at earnings. Damodaran would say this is a shitty way of looking at things and that you should probably be looking at some measure of ROIC instead, and I tend to agree, but I don't get paid to think like an investor, I get paid to sell shit to them (if only in indirect fashion). The short answer to your question is that no, you should not incorporate what you are calling liquidation value when determining accretion/dilution, but only because the market typically computes accretion/dilution on a 3-year basis tops. I've never put together a book or seen a press release in my admittedly short time in finance that says \"\"the transaction is estimated to be X% accretive within 4 years\"\" - that just seems like an absurd timeline. Final point is just that from an accounting perspective, a gain on a sale of an asset is not going to get booked in either EBITDA or OCF, so just mechanically there's no way for the IPO value to flow into your accretion/dilution analysis there, even if you are looking at EBITDA/shares. You could figure the gain on sale into some kind of adjusted EBITDA/shares version of EPS, but this is neither something I've ever seen nor something that really makes sense in the context of using EPS as a standardized metric across the market. Typically we take OUT non-recurring shit in EPS, we don't add it in. Adding something like this in would be much more appropriate to measuring the success of an acquisition/investing vehicle like a private equity fund, not a standalone operating company that reports operational earnings in addition to cash flow from investing. And as I suggest above, that's an analysis for which the IRR metric is more ideally situated. And just a semantic thing - we typically wouldn't call the exit value a \"\"liquidation value\"\". That term is usually reserved for dissolution of a corporate entity and selling off its physical or intangible assets in piecemeal fashion (i.e. not accounting for operational synergies across the business). IPO value is actually just going to be a measure of market value of equity.\"",
"title": ""
},
{
"docid": "c8b5c6c2466ff3fa1b44e11fd7d270ef",
"text": "No, I think you are misunderstanding the Math. Stock splits are a way to control relatively where the price per share can be for a company as companies can split or reverse split shares which would be similar to taking dimes and giving 2 nickels for each dime, each is 10 cents but the number of coins has varied. This doesn't create any additional value since it is still 10 cents whether it is 1 dime or 2 nickels. Share repurchase programs though are done to prevent dilution as executives and those with incentive-stock options may get shares in the company that increase the number of outstanding shares that would be something to note.",
"title": ""
},
{
"docid": "35ff05e2d5c742c8cf523afc69864cb9",
"text": "Conservative = erring on the side of ascribing a higher EV to the business. Because if you're someone looking to acquire the business, for example, and let's say we're talking about a business that has debt which trades at a discount, it's more conservative to assume that the debt can't necessarily be restructured. To use an extreme example, as you're valuing the business, would it be conservative or aggressive to assume that the debt got magically wiped out altogether? So that's why I'm saying that it's more conservative to use the book value of the debt.",
"title": ""
},
{
"docid": "695e0970638ca4d8e1098729232d4bfb",
"text": "Expense accounts are closed into equity. Same with revenue. So an increase in an expense means lower equity (lower retained earnings since there is more expense). Ergo, decrease equity and increase a liability. Increase a liability since it was accrued, which is usually used specifically to refer to things that kind of just happen in the background. Aka the firm most likely didn't pay cash for that right then and there so increase a payable.",
"title": ""
},
{
"docid": "7a4af6d5d949050b38d46a09f9238888",
"text": "And the kind folk at Yahoo Finance came to the same conclusion. Keep in mind, book value for a company is like looking at my book value, all assets and liabilities, which is certainly important, but it ignores my earnings. BAC (Bank of America) has a book value of $20, but trades at $8. Some High Tech companies have negative book values, but are turning an ongoing profit, and trade for real money.",
"title": ""
},
{
"docid": "fe9092bd89d9397b81899948937ce3bc",
"text": "Shareholder's Equity consists of two main things: The initial capitalization of the company (when the shares were first sold, plus extra share issues) and retained earnings, which is the amount of money the company has made over and above capitalization, which has not been re-distributed back to shareholders. So yes, it is the firm's total equity financing-- the initial capitalization is the equity that was put into the company when it was founded plus subsequent increases in equity due to share issues, and retained earnings is the increase in equity that has occurred since then which has not yet been re-distributed to shareholders (though it belongs to them, as the residual claimants). Both accounts are credited when they increase, because they represent an increase in cash, that is debited, so in order to make credits = debits they must be credits. (It doesn't mean that the company has that much cash on hand, as the cash will likely be re-invested). Shareholder's Equity is neither an asset nor a liability: it is used to purchase assets and to reduce liabilities, and is simply a measure of assets minus liabilities that is necessary to make the accounting equation balance: Since the book value of stocks doesn't change that often (because it represents the price the company sold it for, not the current value on the stock market, and would therefore only change when there were new share issues), almost all changes in total assets or in total liabilities are reflected in Retained Earnings.",
"title": ""
},
{
"docid": "eb8297b5ca140c0fb70085814539e5a3",
"text": "The Gordon equation does not use inflation-adjusted numbers. It uses nominal returns/dividends and growth rates. It really says nothing anyone would not already know. Everyone knows that your total return equals the sum of the income return plus capital gains. Gordon simply assumes (perfectly validly) that capital gains will be driven by the growth of earnings, and that the dividends paid will likewise increase at the same rate. So he used the 'dividend growth rate' as a proxy for the 'earnings growth rate' or 'capital gains rate'. You cannot use inflation-removed estimates of equity rates of return because those returns do not change with inflation. If anything they move in opposite directions. Eg in the 1970's inflation the high market rates caused people to discount equity values at larger rates --- driving their values down -- creating losses.",
"title": ""
},
{
"docid": "289270da721e0e136ede814135c932bf",
"text": "\"Re. question 2 If I buy 20 shares every year, how do I get proper IRR? ... (I would have multiple purchase dates) Use the money-weighted return calculation: http://en.wikipedia.org/wiki/Rate_of_return#Internal_rate_of_return where t is the fraction of the time period and Ct is the cash flow at that time period. For the treatment of dividends, if they are reinvested then there should not be an external cash flow for the dividend. They are included in the final value and the return is termed \"\"total return\"\". If the dividends are taken in cash, the return based on the final value is \"\"net return\"\". The money-weighted return for question 2, with reinvested dividends, can be found by solving for r, the rate for the whole 431 day period, in the NPV summation. Now annualising And in Excel\"",
"title": ""
},
{
"docid": "f2d553234eb9a1a22c924dadffeb7dbb",
"text": "There are not always capital-efficient ways for a company to reinvest its own profits. This is why dividends exist. Imagine a company will reinvest 80% of its profits into a project with a huge projected return, but the other 20% of the company's profits cannot be reinvested efficiently because there are zero projects in which to reinvest the profits into that would return a better profit than what the company's shareholders could make by reinvesting those profits in their own way (ie: a benchmark market index like an S&P 500 index fund). Since the shareholders could make a better return with this than the company could with any company project, it would be irresponsible (technically maybe even illegal) for the company to reinvest that 20% of the profits. This reason for companies sometimes paying out profits to shareholders in the form of dividends is a market-efficient part of the economic system, and it really is great. If a CEO/CFO/anyone is paying out so much profit from a company that it is irresponsible to the company's investors, then that would also technically be illegal since the company is evading efficient project that would benefit its shareholders more than they could benefit themselves elsewhere in the market. (These legalities with shareholder laws are not explicitly put into action very often, but their effects are always there) It's also worth noting payout/plowback strategy is very important for the strategy and financing of a company, particularly for public investments.",
"title": ""
},
{
"docid": "46209eafc0c865103c6e95b81c4e4564",
"text": "I've spent enough time researching this question where I feel comfortable enough providing an answer. I'll start with the high level fundamentals and work my way down to the specific question that I had. So point #5 is really the starting point for my answer. We want to find companies that are investing their money. A good company should be reinvesting most of its excess assets so that it can make more money off of them. If a company has too much working capital, then it is not being efficiently reinvested. That explains why excess working capital can have a negative impact on Return on Capital. But what about the fact that current liabilities in excess of current assets has a positive impact on the Return on Capital calculation? That is a problem, period. If current liabilities exceed current assets then the company may have a hard time meeting their short term financial obligations. This could mean borrowing more money, or it could mean something worse - like bankruptcy. If the company borrows money, then it will have to repay it in the future at higher costs. This approach could be fine if the company can invest money at a rate of return exceeding the cost of their debt, but to favor debt in the Return on Capital calculation is wrong. That scenario would skew the metric. The company has to overcome this debt. Anyways, this is my understanding, as the amateur investor. My credibility is not even comparable to Greenblatt's credibility, so I have no business calling any part of his calculation wrong. But, in defense of my explanation, Greenblatt doesn't get into these gritty details so I don't know that he allowed current liabilities in excess of current assets to have a positive impact on his Return on Capital calculation.",
"title": ""
},
{
"docid": "95bd051eec913747fac08c2007034758",
"text": "\"Dividends can also be automatically reinvested in your stock holding through a DRIP plan (see the wikipedia link for further details, wiki_DRIP). Rather than receiving the dividend money, you \"\"buy\"\" additional stock shares your with dividend money. The value in the DRIP strategy is twofold. 1) your number of shares increases without paying transaction fees, 2) you increase the value of your holding by increasing number of shares. In the end, the RIO can be quite substantial due to the law of compounding interest (though here in the form of dividends). Talk with your broker (brokerage service provider) to enroll your dividend receiving stocks in a DRIP.\"",
"title": ""
},
{
"docid": "bc8a62eba2e7e399e1295a6c80f1ee90",
"text": "\"Since doodle77 handled arbitrage, I'll take goodwill. Goodwill is an accounting term that acts much like a \"\"plug\"\" account: you add/subtract to it the amount that makes everything balance. In the case of goodwill, it generally only applies to mergers & acquisitions. The theory (and justification) is this: firms buy other firms at prices other than the market price (usually higher), and it is assumed that this is because the acquirer values its acquisition more than other people do. But whether you use historical prices or market prices when you add (subtract) assets and liabilities to to (from) your balance sheet, this will never add up, because you paid more (less) than the assets are worth in the market, so more (less) cash flowed out than assets flowed in. The difference goes into the goodwill account, so firms with a large goodwill account are ones that have made lots of acquisitions.\"",
"title": ""
},
{
"docid": "1adf6bf3b115f70cb8d77a0be6e30f97",
"text": "\"Yes - this is exactly what it means. No losses (negative earnings). With today's accounting methods, you might want to determine whether you view earnings including or excluding extraordinary items. For example, a company might take a once-off charge to its earnings when revising the value of a major asset. This would show in the \"\"including\"\" but not in the \"\"excluding\"\" figure. The book actually has a nice discussion in Chapter 12 \"\"Things to Consider About Per-Share Earnings\"\" which considers several additional variables to consider here too. Note that this earnings metric is different from \"\"Stock Selection for the Defensive Investor\"\" which requires 10 years. PS - My edition (4th edition hardback) doesn't have 386 pages so your reference isn't correct for that edition. I found it on page 209 in Chapter 15 \"\"Stock Selection for the Enterprising Investor\"\".\"",
"title": ""
}
] |
fiqa
|
80686480703ff2e7189134b5ce5350b0
|
Are the AARP benefits and discounts worth the yearly membership cost?
|
[
{
"docid": "6f076dd3187018636d45d0f17fa3d758",
"text": "\"Note: this answer was provided when the question was only about Life Insurance, therefore it does not address any other \"\"benefits\"\" Term Life Insurance is very easy to evaluate, once you have determined how much you need and for how long. For significant amounts of coverage they may require a physical to be performed. The price quotes will be for two levels of health, so you can compare costs from many companies quite easily. You have several sources in no particular order: employer, independent company, 3rd party like AARP, AAA, or via you bank or credit union. Note that the 3rd party will be getting a cut of the premium. Also some choices offered from the employer or 3rd party may be limited in size or duration. The independent companies will be able to have terms that extend for 10 years or more. So view the insurance offered by AARP as just another option that has to be compared to all your other options.\"",
"title": ""
},
{
"docid": "4abd220e2e701da0dd7a47df87939235",
"text": "It depends on you. If you're not an aggressive shopper and travel , you'll recoup your membership fee in hotel savings with one or two stays. Hilton brands, for example, give you a 10% discount. AARP discounts can sometimes be combined with other offers as well. From an insurance point of view, you should always shop around, but sometimes group plans like AARP's have underwriting standards that work to your advantage.",
"title": ""
}
] |
[
{
"docid": "d4349c26f0d1b7638e5d334c9d495060",
"text": "\"Buy term and invest the difference is certainly the standard recommendation, and for good reason. When you start looking at some sample numbers the \"\"buy term and invest the difference\"\" strategy starts to look very good. Here are the rates I found (27 yr old in Texas with good health, non-smoker, etc): $200k term life: $21/month $200k whole life: $177/month If you were to invest the difference in a retirement account for 40 years, assuming a 7% rate of return (many retirement planning estimates use 10%) you would have $411,859 at the end of that period. (If you use 10% that figure jumps to over $994k.) Needless to say, $400k in a retirement account is better than a $200k death benefit. Especially since you can't get the death benefit AND the cash value. Certainly one big difficulty is making sure you invest that difference. The best way to handle that is to set up a direct deposit that goes straight from your paycheck to the retirement account before it even touches your bank account. The next best thing would be an automatic transfer from your bank account. You may wonder 'What if I can no longer afford to invest that money?' First off, take a second and third look at your finances before you start eating into that. But if financial crisis comes and you truly can't afford to fund your own life insurance / retirement account then perhaps it will be a good thing you're not locked into a life insurance policy that forces you to pay those premiums. That extra freedom is another benefit of the \"\"buy term and invest the difference\"\" strategy. It is great that you are asking this question now while you are young. Because it is much easier to put this strategy into play now while you are young. As far as using a cash value policy to help diversify your portfolio: I am no expert in how to allocate long term investments after maxing out my IRA and 401k. (My IRA maxes out at $5k/year, another $5k for my wife's, another $16.5k for my 401k.) Before I maxed that out I would have my house paid for and kid's education saved for. And by then it would make sense to pay a financial adviser to help you manage all those investments. They would be the one to ask about using a cash value policy similar to @lux lux's description. I believe you should NEVER PUT YOUR MONEY INTO SOMETHING YOU DON'T UNDERSTAND. Cash value policies are complex and I don't fully understand them. I should add that of course my calculations are subject to the standard disclaimer that those investment returns aren't guaranteed. As with any financial decision you must be willing to accept some level of risk and the question is not whether to accept risk, but how much is acceptable. That's why I used 7% in my calculation instead of just 10%. I wanted to demonstrate that you could still beat out whole life if you wanted to reduce your risk and/or if the stock market performs poorly.\"",
"title": ""
},
{
"docid": "a11b5b0f914084e7fe0ca39051dd3794",
"text": "Here's a different take: Look through the lists of companies that offer shareholder perks. Here's one from Hargreaves Lansdown. See if you can find one that you already spend money with with a low required shareholding where the perks would actually be usable. Note that in your case, being curious about the whole thing and based in London, you don't have to rule out the AGM-based perks, unlike me. My reason for this is simple: with 3 out of 4 of the companies we bought shares in directly (all for the perks), we've made several times the dividend in savings on money we would have spent anyway (either with the company in which we bought shares or a direct competitor). This means that you can actually make back the purchase price plus dealing fee quite quickly (probably in 2/4 in our case), and you still have the shares. We've found that pub/restaurant/hotel brands work well if you use them or their equivalents anyway. Caveats: It's more enjoyable than holding a handful of shares in a company you don't care about, and if you want to read the annual reports you can relate this to your own experience, which might interest you given your obvious curiosity.",
"title": ""
},
{
"docid": "be08d0c6a4da19a79000124e82331b20",
"text": "\"Let's not trade insults. I understand defined benefit plans better than you think. Of course offering a lump-sum payout NOW is better for the company. If you think of the lifetime value of the pension, then yeah, it's \"\"worse\"\" for the recipient... but exactly like lottery winners, this is just a question of my personal discount rate. Maybe I want/need that money now, and value it more now than I would in 10/20/30 years. So it's a question for each individual to decide.\"",
"title": ""
},
{
"docid": "fb78091094c61cbf35643c978ba23f06",
"text": "I am in the process of writing an article about how to maximize one's Social Security benefits, or at least, how to start the analysis. This chart, from my friends at the Social Security office shows the advantage of waiting to take your benefit. In your case, you are getting $1525 at age 62. Now, if you wait 4 years, the benefit jumps to $2033 or $508/mo more. You would get no benefit for 4 years and draw down savings by $73,200, but would get $6,096/yr more from 64 on. Put it off until 70, and you'd have $2684/mo. At some point, your husband should apply for a spousal benefit (age 66 for him is what I suggest) and collect that for 4 years before moving to his own benefit if it's higher than that. Keep in mind, your generous pensions are likely to push you into having your social security benefit taxed, and my plan, above will give you time to draw down the 401(k) to help avoid or at least reduce this.",
"title": ""
},
{
"docid": "22259b6d72da91a9fe3224dbeb616a0b",
"text": "Just to make this a little less vauge, I will base everything on the Mercedes Benz American Express (MB AMEX) card, which is the closest to a $100 annual fee I found on American Express's website. The benefits of a card with an annual fee generally are worth the cost if (and only if) you spend enough money on the card, and avoid paying interest to offset the benefit. Using the MB AMEX card as a reference, it offers 5X points for Mercedes Benz purchases, 3X points at gas stations, 2X points at restaurants, and 1X points everywhere else. Even if we only make purchases at the 1X rate, it only takes charging $10,000 to the card in a year in order to make up the difference. Not too hard to do on a card someone uses as their main method of payment. Every dollar spent at the higher rates only makes that easier. There are a number of other benefits as well. After spending $5,000 on the card in a year, you receive a $500 gift card towards the purchase of a Mercedes Benz car. For anyone on the market for a Mercedes Benz, the card pays for itself multiple times with just this benefit.",
"title": ""
},
{
"docid": "743927f8d0169b21133e551371dd0ba0",
"text": "Here are the advantages to the HDHP/HSA option over the PPO option, some of which you've already mentioned: Lower premiums, saving $240 annually. Your employer is contributing $1500 to your HSA. As you mentioned, this covers your deductible if you need it, and if you don't, the $1500 is yours to keep inside your HSA. The ability to contribute more to your HSA. You will be able to contribute additional funds to your HSA and take a tax deduction. Besides the medical expenses applied to your deductible, HSA funds can be spent on medical expenses that are not covered by your insurance, such as dental, vision, chiropractic, etc. Anything left in your HSA at age 65 can be withdrawn just like with a traditional IRA, with tax due (but no penalty) on anything not spent on medical expenses. With the information that you've provided about your two options, I can't think of any scenario where you'd be better off with the PPO. However, you definitely want to look at all the rest of the details to ensure that it is indeed the same coverage between the two options. If you find differences, I wrote an answer on another question that walks you through comparing insurance options under different scenarios.",
"title": ""
},
{
"docid": "b1eea7c8c7a4e954533912a071fb2bc8",
"text": "Absolutely! Just because a spouse doesn't have a taxable income, doesn't mean they aren't providing real, tangible benefit to the family economy with an important job. As tragic as it is to consider losing your spouse, are you truly in a position to replace everything they do you for you? Knowing what they do for you and appreciating the effort your spouse gives is important, but don't sell short the dollar amount of what they provide. Your life insurance policy should be to keep you whole. Without your spouse, you will need childcare. You might need domestic services to the home. What about a nanny or similar service? Would $50K cover that until your child is an adult? There are a number of added expenses in the short and long term that would occur if a spouse died. How much for a funeral? Obviously you know the amount and term depends on the age of your kid. But I think you should really try to account for the number of daily hours you spouse puts in, and try to attach a cost to those hours. Then buy insurance for them just as you would for a wage earning. For example, buy a policy that is 10x the annual cost for services it would take to compensate for your spouse. Your tolerance for risk and cost can adjust it up and down from there.",
"title": ""
},
{
"docid": "47fb206796060129179e6e6c7802f250",
"text": "At sixty, you are in a different generation, where at least early on loyalty was rewarded. I sit between the x and y generations, and never have I ever felt a sense of loyalty FROM an employer. We all know the score, they'll fire me in a heartbeat if it helps the quarterly numbers, and I'll bail if I can get a better deal elsewhere. I only stick it out if the deal is good, or I don't want to have to explain a short tenure on.my resume. I'm not gonna tough it out with a struggling company if they can't give me my market value, because I know they'll kick me to the curb if I'm in need. There really is no loyalty anywhere in the system anymore, unless your a sucker. Loyalty MUST go both ways, and employers are the ones who gave up on it.",
"title": ""
},
{
"docid": "2a0f844f3c5963ada5a2a178660340fb",
"text": "The big benefit of a health savings account is the savings aspect. HSAs let you save up and invest money for your health care expenses. You don't just pay for medical care with pretax dollars - you get to invest those pretax dollars (possibly until you've retired). If you can afford to put money in the plan now, this can be a pretty good deal, especially if you're in a high tax bracket and expect to remain there after retirement. There are a lot of obnoxious limitations and restrictions, and there's political risk to worry about between now and when you spend the money (mostly uncertainty about what the heck the health insurance system will look like after the fight over ObamaCare and its possible repeal.)",
"title": ""
},
{
"docid": "2150ae34d8f282844275dc3f72c68517",
"text": "I'm guessing it depends on how much you'd be paying for membership. If you save more than the membership costs you and you actually use the products you buy and they don't get thrown away, then it's worth it. I'm not a member of a warehouse club but I do have a membership for another wholesale outlet, so I know a little bit about buying in bulk. You need to take the same approach to buying goods wholesale as you would in an ordinary outlet, and do a few more things besides. Things like writing a list and sticking to it, making that list logically, so that you minimise the amount of time you spend walking around the shop. The less you see, the less you are likely to buy. Don't be taken in by offers, it's only a bargain if it's something you would have bought anyway. Don't shop on an empty stomach or with you children. And with bulk buying, you have to stick to things with long dates, unless your family gets through something at a phenomenal rate. Things like pet food are good, sugar too if you do a lot of home baking, that kind of thing. Toilet paper and kitchen roll are great to buy in bulk if you have the storage space and toothbrushes are good too. You'll always need them, always need to replace them, they don't take up much space and don't have a use by. The rules differ from family to family. Look at what your family uses and how much time it takes to get through something. That's the best place to start.",
"title": ""
},
{
"docid": "de92e1a4ea311ce09e08ae3cb8f0d17f",
"text": "Is it worth saving HSA funds until retirement? Yes Are there pros and cons from a tax perspective? Mostly pros. This has all of the benefits of an IRA, but if you use it for medical expenses then you get to use the money tax free on the other side. Retirement seems to be the time you are most likely to need money for medical expenses. So why wouldn't you want to start saving tax free to cover those expenses? The cons are similar to other tax advantaged retirement accounts. If you withdraw before retirement time for non-medical purposes, you will pay penalties, but if you withdraw at retirement time, you will pay the same taxes you would pay on an IRA. I should note that I put my money where my mouth is and I max out my contribution to my HSA every year.",
"title": ""
},
{
"docid": "2bff6cd7047ca4577a71b8922e71219c",
"text": "First let's define some terms. Your accrued benefit is a monthly benefit payable at your normal retirement age (usually 65). It is usually a life-only benefit but may have a number of years guaranteed or may have a survivor piece. It is defined by a plan formula (ie, it is a defined benefit). A lump sum is how much that accrued benefit is worth right now. Lump sums are based on applicable interest rates and mortality tables specified by the IRS (interest rates are released monthly, mortality annually). Your plan can either use the same interest rates for a whole year, or they can use new ones each month. Affecting your lump sum is whether your accrued benefit is payable now (immediately, you are age 65), or later (deferred, you are now age 30). For example, instead of being paid an annuity assume you are paid just one payment of $1,000 on your 65th birthday. The lump sum of that for a 65 year old would be $1,000 since there would be no interest discount, and no chance of dying before payment. For a 30 year old, at 4% interest the lump sum would be about $237 (including mortality discount). At age 36 the lump sum is $246. So the lump sum will get bigger just because you get older. Very important is the interest discount. At age 30 in the example, 2% interest would produce a $467 lump sum. And at 6% $122. The bigger the rate, the smaller the lump sum because interest helps an amount now grow bigger in the future. To complicate things, since 2008 the IRS bases lump sums on 3 different interest rates. The monthy annuity payments made within 5 years of the lump sum date use the 1st rate, past 5 and within 20 years use the 2nd rate, and past that use the 3rd rate. Since you are age 30, all of your monthly annuity payments would be made after 20 years, so that makes it simple since we'll only have to look at the 3rd rate. When you reach age 45 the 2nd rate will kick in. Here is the table of interest rates published by the IRS: http://www.irs.gov/Retirement-Plans/Minimum-Present-Value-Segment-Rates You'll find your rates above on the 2013 line for Aug-12. That means your lump sum is being made in 2013 and it is being based on the month August 2012. Most likely your plan will use the same rates for its entire plan year. But what is your plan year? If it is the calendar year, then you would have a 5 month lookback for the rates. But if is a September to August plan year with a 1 month lookback, the rates would have changed between August and September. Your August lump sum would be based on 4.52%, your September on would be based on 5.58% (see the All line for Aug-13). For comparison, a 30 year old with a $100 annuity payable at age 65 would have a lump sum value of $3,011 at 4.52%, but a lump sum value of $1,931 at 5.58%. The change in your accrued benefit by month will obviously have some impact on the lump sum value, but not as much as the change in interest rates if there is one. The amount they actually contribute to the plan has nothing to do with the value of the lump sum though.",
"title": ""
},
{
"docid": "9582508ff18f868305f5e696269c7552",
"text": "\"Assuming the numbers work out roughly the same (and you can frankly whip up a spreadsheet to prove that out), a defined benefit scheme that pays out an amount equal to an annuitized return from a 401(k) is better. The reason is not monetary - it is that the same return is being had at less risk. Put another way, if your defined benefit was guaranteed to be $100/month, and your 401(k) had a contribution that eventually gets to a lump sum that, if annuitized for the same life expectancy gave you $100/month, the DB is better because there is less chance that you won't see the money. Or, put even simpler, which is more likely? That New York goes Bankrupt and is relieved of all pension obligations, or, the stock market underperforms expectations. Neither can be ruled out, but assuming even the same benefit, lower risk is better. Now, the complication in your scenario is that your new job pays better. As such, it is possible that you might be able to accumulate more savings in your 401(k) than you might in the DB scheme. Then again, even with the opportunity to do so, there is no guarantee that you will. As such, even modelling it out really isn't going to dismiss the key variables. As such, can I suggest a different approach? Which job is going to make you happier now? Part of that may be money, part of that may be what you are actually doing. But you should focus on that question. The marginal consideration of retirement is really moot - in theory, an IRA contribution can be made that would equalize your 401(k), negating it from the equation. Grant you, there is very slightly different tax treatment, and the phaseout limits differ, but at the salary ranges you are looking at, you could, in theory, make decisions that would have the same retirement outcome in any event. The real question is then not, \"\"What is the effect in 20 years?\"\" but rather, which makes you happier now?\"",
"title": ""
},
{
"docid": "25c73c24fa91cd5756013eee21f7adfb",
"text": "I'm not the guy you're responding to, but you asked a good question. There's a dearth of data, but [about 1% is the estimate.] (http://www.businessinsurance.com/article/20110814/NEWS03/308149986#) Either way, having increased young adults on an insurance plan is a good thing. Socially, this demographic is exceptionally stinging from the Great Recession and I think the ability to give young adults health insurance (and thus the freedom to start developing a career without worrying about health coverage) outweighs the nominal additional premium costs. Fiscally, having young adults in a group plan decreases the risk profile of that plan since young adults don't incur the same expenses that a 45 or 50 year old would.",
"title": ""
},
{
"docid": "96786e170859c0e9de4bd09ea45139af",
"text": "I'm normally a fan of trying to put all the relevant info in an answer when possible, but this one's tough to do in one page. Here's the best way, by far to learn the basics: The OIC (Options Industry Council) has a great, free website to teach investors at all levels about options. You can set up a learning path that will remember which lessons you've done, etc. And they're really, truly not trying to sell you anything; their purpose is to promote the understanding and use of options.",
"title": ""
}
] |
fiqa
|
114135080368cbd2b6f657eeae8875b1
|
Online sites for real time bond prices
|
[
{
"docid": "af78c4c4186788dd4ac2f120b3c02a17",
"text": "Bonds are extremely illiquid and have traditionally traded in bulk. This has changed in recent years, but bonds used to be traded all by humans not too long ago. Currently, price data is all proprietary. Prices are reported to the usual data terminals such as Bloomberg, Reuters, etc, but brokers may also have price gathering tools and of course their own internal trade history. Bonds are so illiquid that comparable bonds are usually referenced for a bond's price history. This can be done because non-junk bonds are typically well-rated and consistent across ratings.",
"title": ""
},
{
"docid": "3c37c24f30645f6131887178f02722dc",
"text": "FINRA lets you view recent trades, but as stated in the other answer bonds are illiquid and often do not trade frequently. Therefore recent trades prices are only a rough estimate of the current price that would be accepted. http://finra-markets.morningstar.com/BondCenter/Default.jsp",
"title": ""
}
] |
[
{
"docid": "29a1399a292d5cc55b09dfc576ba97f1",
"text": "Bond information is much tougher to get. Try to find access to a Bloomberg terminal. Maybe you have a broker that can do the research for you, maybe your local university has one in their business school, maybe you know someone that works for a bank/financial institution or some other type of news outlet. Part of the reason for the difference in ease of access to information is that bond markets are dominated by institutional investors. A $100 million bond issues might be 90% owned by 10-20 investors (banks, insurance co's, mutual funds, etc.) that will hold the bonds to maturity and the bonds might trade a few times a month/year. On the other hand a similar equity offering may have several hundred or thousand owners with daily trading, especially if it's included in an active stock index. That being said, you can get some information on Fidelity's website if you have an account, but I think their junk data is limited. Good luck with the hunt.",
"title": ""
},
{
"docid": "ec01e6ad07bd6f63d716dde54886fb4c",
"text": "\"My broker (thinkorswim) offers this from the platform's trade tab. I believe this feature isn't crippled in the PaperMoney version which is effectively a \"\"free online service.\"\"\"",
"title": ""
},
{
"docid": "ff7f871a450e24d96f85664029365357",
"text": "Investopedia has one and so does marketwatch I've always used marketwatch, and I have a few current competitions going on if you want me to send the link They recently remodeled the website so it works on mobile and not as well on desktop Don't know anything about the investopedia one though",
"title": ""
},
{
"docid": "a6cf13ea4d096712e382bab3746657bf",
"text": "\"BestInvest is a UK site looking at that URL, base on the \"\"co.uk\"\" ending. Yahoo! Finance that you use is a US-based site unless you add something else to the URL. UK & Ireland Yahoo! Finance is different from where you were as there is something to be said for where are you looking. If I was looking for a quarter dollar there are Canadian and American coins that meet this so there is something to be said for a higher level of categorization being done. \"\"EUN.L\"\" would likely denote the \"\"London\"\" exchange as tickers are exchange-specific you do realize, right?\"",
"title": ""
},
{
"docid": "2379e2f1e6f178d08404ad68f7796fef",
"text": "http://www.moneysupermarket.com/shares/CompareSharesForm.asp lists many. I found the Interactive Investor website to be excruciatingly bad. I switched to TD Waterhouse and found the website good but the telephone service a bit abrupt. I often use the data presented on SelfTrade but don't have an account there.",
"title": ""
},
{
"docid": "5bfedbdd63f74534043d2d59fcef16b4",
"text": "Like others have said, mutual funds don't have an intraday NAV, but their ETF equivalents do. Use something like Yahoo Finance and search for the ETF.IV. For example VOO.IV. This will give you not the ETF price (which may be at a premium or discount), but the value of the underlying securities updated every 15 seconds.",
"title": ""
},
{
"docid": "4d6381ad358c1cb678364f7bbd7fdd3e",
"text": "Never trust a single source to give you a fair price, especially if they are not in competition, moreso if they know that's the case. I would want to get a quote from at least one other broker in terms of what they feel they can sell the bonds for. (and let them know they are not the only one you are getting a quote from) To start with you need information, such as when is the last time a bond like the ones you have traded and what did it sell for. Also sources for where you can sell the bonds and more info on the entire subject. SIFMA (The Securities Industry and Financial Markets Association) has a pretty helpful website called InvestingInBonds.com. I find it has a wealth of information, and is relatively free of bias. On the Municipal Markets at a Glance page you can get history for various bonds if you have the CUSIP (pronounced 'que-sip') numbers for the bonds. If these bonds are as good as the advisor is telling you they are, then they should be selling for a premium, and the recent sales history would reflect that. I'd find one or two other potential sellers, and get prices from each of them, compare that against recent history and go with whichever one seems to be offering you the best deal. In terms of choosing someone, and how to go about selling bonds, the same website has some excellent information and guidance on buying and selling bonds and How to Choose an Investment Professional which includes how to check up on them to see if they have ever faced disciplinary action, etc.. I would also consider any gains you might have to declare if you sell these for more than face value, and if that would be taxable etc. I would also question your 'too safe' judgement. Just because something is 'safe' I would not necessarily throw it out. You need to look at the return relative to the risk, and if you are not investing in a tax sheltered account, the affect of taxes on your net return. If these are earning a really good return, for fairly low risk, they might be worth keeping, especially if in today's market you need to take substantially more risk to get a comparable return. Taking more risk to get nearly the same return isn't very wise, since an aspect of the risk is perhaps not getting any return, or losing money. In a volatile market there can be a substantial benefit to having a lower risk 'foundation' that you build upon with more risky investments, in order to provide some risk diversity in your portfolio. You might want to consider for example how these bonds have done over the last 13 years, compared to a similar investment in the type of 'less safe' vehicles you are considering. Perhaps you'd be better off just holding these to maturity instead of gambling on something with a lot more risk that could go south on you.",
"title": ""
},
{
"docid": "f23a77c2c5432db5c7cf786f6e890560",
"text": "I find this site to be really poor for the virtual play portion, especially the options league. After you place a trade, you can't tell what you actually traded. The columns for Exp and type are blank. I have had better luck with OptionsXpress virtual trader. Although they have recently changed their criteria for a non funded accounts and will only keep them active for 90 days. I know the cboe has a paper trading platform but I haven't tried it out yet.",
"title": ""
},
{
"docid": "76e622fc225406dbd70fb144752364dc",
"text": "\"You could use any of various financial APIs (e.g., Yahoo finance) to get prices of some reference stock and bond index funds. That would be a reasonable approximation to market performance over a given time span. As for inflation data, just googling \"\"monthly inflation data\"\" gave me two pages with numbers that seem to agree and go back to 1914. If you want to double-check their numbers you could go to the source at the BLS. As for whether any existing analysis exists, I'm not sure exactly what you mean. I don't think you need to do much analysis to show that stock returns are different over different time periods.\"",
"title": ""
},
{
"docid": "e4f5c6d61371d33e986f4fce659ed7ff",
"text": "The duration of a bond tells you the sensitivity of its price to its yield. There are various ways of defining it (see here for example), and it would have been preferable to have a more precise statement of the type of duration we should assume in answering this question. However, my best guess (given that the duration is stated without units) is that this is a modified duration. This is defined as the percentage decrease in the bond price for a 1% increase in the yield. So, change in price = -price x duration (as %) x change in yield (in %) For your duration of 5, this means that the bond price decreases by a relative 5% for every 1% absolute increase in its yield. Using the actual yield change in your question, 0.18%, we find: change in price = -1015 x 5% x (4.87 - 4.69) = -9.135 So the new price will be 1015 - 9.135 = £1005.865",
"title": ""
},
{
"docid": "5819b1b16bb5a329fb87dea149f8148b",
"text": "Goldprice.org has different currencies and historical data. I think silverprice.org also has historical data.",
"title": ""
},
{
"docid": "9d2c4d22186c5ed898b4a500810a60ed",
"text": "In my graduate thesis I explored the liquidity changes in the bond markets. Part of my research led me to also identifying an opportunity for blockchain to play a role in measuring it, something mathematically impossible but increasingly necessary in fixed Income. Definitely interested",
"title": ""
},
{
"docid": "db80ee9cc1f82f76ee6adc6bc300bb4f",
"text": "\"Yes, Interactive Brokers is a good source for live data feeds and they have an API which is used to programmatically access the feeds, you will have to pay for data feeds from the individual data sources though. The stock exchanges have a very high price for their data and this has stifled innovation in the financial sector for several decades in the united states. But at the same time, it has inflated the value and mystique of \"\"quants\"\" doing simple algorithms \"\"that execute within milliseconds\"\" for banks and funds. Also RIZM has live feeds, it is a younger service than other exchanges but helps people tap into any online broker's feeds and let you trade your custom algorithms that way, that is their goal.\"",
"title": ""
},
{
"docid": "ce74473919d8ee1c40037ea199392734",
"text": "An alternative to paying thousands of dollars for historical prices by the minute: Subscribe to real time data for as low as USD$1.5/month from your broker, then browse the chart.",
"title": ""
},
{
"docid": "7463e6b01c2f38e523cd6ba482a29b8a",
"text": "\"A couple of distinctions. First, if you were to \"\"invest in real estate\"\" were you planning to buy a home to live in, or buy a home to rent out to someone else? Buying a home as a primary residence really isn't \"\"investing in real estate\"\" per se. It's buying a place to live rather than renting one. Unless you rent a room out or get a multi-family unit, your primary residence won't be income-producing. It will be income-draining, for the most part. I speak as a homeowner. Second, if you are buying to rent out to someone else, buying a single home is quite a bit different than buying an REIT. The home is a lot less liquid, the transaction costs are higher, and all of your eggs are in one basket. Having said that, though, if you buy one right and do your homework it can set you on the road for a very comfortable retirement.\"",
"title": ""
}
] |
fiqa
|
109744268287dc4f3f7240c7aa146e6a
|
Mortgage loan and move money to US
|
[
{
"docid": "5712bdc7208402f56051e2fd71d54a61",
"text": "Let me restate question for clarity. Facts: Question: Are there any taxes for this transaction? Answer: (Added improvements provided by Eric) Generally No. Generally, it is not considered income until you sell and the sale price is greater than the purchase price. But with currency differences, there is an additional complication, section 988 rules apply. It could result in ordinary income or loss.",
"title": ""
}
] |
[
{
"docid": "b528f2b68ccc47dd8e86323231c148b1",
"text": "\"No. This is too much for most individuals, even some small to medium businesses. When you sell that investment, and take the cheque into the foreign bank and wire it back to the USA in US dollars, you will definitely obtain the final value of the investment, converted to US$. Thats what you wanted, right? You'll get that. If you also hedge, unless you have a situation where it is a perfect hedge, then you are gambling on what the currencies will do. A perfect hedge is unusual for what most individuals are involved in. It looks something like this: you know ForeignCorp is going to pay you 10 million quatloos on Dec 31. So you go to a bank (probably a foreign bank, I've found they have lower limits for this kind of transaction and more customizable than what you might create trading futures contracts), and tell them, \"\"I have this contract for a 10 million quatloo receivable on Dec 31, I'd like to arrange a FX forward contract and lock in a rate for this in US$/quatloo.\"\" They may have a credit check or a deposit for such an arrangement, because as the rates change either the bank will owe you money or you will owe the bank money. If they quote you 0.05 US$/quatloo, then you know that when you hand the cheque over to the bank your contract payment will be worth US$500,000. The forward rate may differ from the current rate, thats how the bank accounts for risk and includes a profit. Even with a perfect hedge, you should be able to see the potential for trouble. If the bank doesnt quite trust you, and hey, banks arent known for trust, then as the quatloo strengthens relative to the US$, they may suspect that you will walk away from the deal. This risk can be reduced by including terms in the contract requiring you to pay the bank some quatloos as that happens. If the quatloo falls you would get this money credited back to your account. This is also how futures contracts work; there it is called \"\"mark to market accounting\"\". Trouble lurks here. Some people, seeing how they are down money on the hedge, cancel it. It is a classic mistake because it undoes the protection that one was trying to achieve. Often the rate will move back, and the hedger is left with less money than they would have had doing nothing, even though they bought a perfect hedge.\"",
"title": ""
},
{
"docid": "97d71f0aa71ee30780c8ca0195c66503",
"text": "To transfer US$30,000 from the USA to Europe, ask your European banker for the SWIFT transfer instructions. Typically in the USA the sending bank needs a SWIFT code and an account number, the name and address of the recipient, and the amount to transfer. A change of currency can be made as part of the transfer. The typical fee to do this is under US$100 and the time, under 2 days. But you should ask (or have the sender ask) the bank in the USA about the fees. In addition to the fee the bank may try to make a profit on the change of currency. This might be 1-2%. If you were going to do this many times, one way to go about it is to open an account at Interactive Brokers, which does business in various countries. They have a foreign exchange facility whereby you can deposit various currencies into your account, and they stay in that currency. You can then trade the currencies at market rates when you wish. They are also a stock broker and you can also trade on the various exchanges in different countries. I would say, though, they they mostly want customers already experienced with trading. I do not know if they will allow someone other than you to pay money into your account. Trading companies based in the USA do not like to be in the position of collecting on cheques owed to you, that is more the business of banks. Large banks in the USA with physical locations charge monthly fees of $10/mo or more that might be waived if you leave money on deposit. Online banks have significantly lower fees. All US banks are required to follow US anti-terrorist and anti-crime regulations and will tend to expect a USA address and identity documents to open an account with normal customers. A good international bank in Europe can also do many of these same sorts of things for you. I've had an account with Fortis. They were ok, there were no monthly fees but there were fees for transactions. In some countries I understand the post even runs a bank. Paypal can be a possibility, but fees can be high ~3% for transfers, and even higher commissions for currency change. On the other hand, it is probably one of the easiest and fastest ways to move amounts of $1000 or less, provided both people have paypal accounts.",
"title": ""
},
{
"docid": "2afdb7895ff858324e1611105b470a98",
"text": "\"Bad plan. This seems like a recipe for having your money taken away from you by CBP. Let me explain the biases which make it so. US banking is reliable enough for the common citizen, that everyone simply uses banks. To elaborate, Americans who are unbanked either can't produce simple identity paperwork; or they got an account but then got blacklisted for overdrawing it. These are problems of the poor, not millionaires. Outside of determined \"\"off the grid\"\" folks with political reasons to not be in the banking and credit systsm, anyone with money uses the banking system. Who's not a criminal, anyway. We also have strong laws against money laundering: turning cash (of questionable origin) into \"\"sanitized\"\" cash on deposit in a bank. The most obvious trick is deposit $5000/day for 200 days. Nope, that's Structuring: yeah, we have a word for that. A guy with $1 million cash, it is presumed he has no choice: he can't convert it into a bank deposit, as in this problem - note where she says she can't launder it. If it's normal for people in your country to haul around cash, due to a defective banking system, you're not the only one with that problem, and nearby there'll be a country with a good banking system who understands your situation. Deposit it there. Then retain a US lawyer who specializes in this, and follow his advice about moving the money to the US via funds transfer. Even then, you may have some explaining to do; but far less than with cash. (And keep in mind for those politically motivated off-the-financial-grid types, they're a bit crazy but definitely not stupid, live a cash life everyday, and know the law better than anybody. They would definitely consider using banks and funds transfers for the border crossing proper, because of Customs. Then they'll turn it into cash domestically and close the accounts.)\"",
"title": ""
},
{
"docid": "76def0924a473ee8754ddbcfa1ab06b3",
"text": "If possible, I would open a Canadian bank account with a bank such as TD Canada Trust. You can then have your payments wired into that account without incurring costs on receipt. They also allow access to their US ATM network via TD Bank without additional costs. So you could use the American Affiliate to pull the funds out via a US teller while only bearing the cost of currency conversion. If that option can't work then the best route would be to choose a US bank account that doesn't charge for incoming wire transfers and request that the money be wired to your account (you'll still get charged the conversion rate when the wire is in CAD and the account is in USD).",
"title": ""
},
{
"docid": "303f9e3c17e772c2531668aa10c2dfe7",
"text": "There is a fourth option - pay those taxes. Depending on the amounts, it might be the easiest way - if you make 34.49 in interest, and pay 6 $ in taxes on it, and be done, that might not be worth any other effort. If the expected taxable amount is significant, moving (most of it) to index funds or other simply switching existing investments to ‘reinvest’ instead of ‘pay out in cash’ would be the best approach. Again, some smaller amounts in savings or checkings accounts are probably not worth any effort. Transferring the money to the US doesn’t save you taxes, as any interest would still be taxable. You have a risk to lose on the conversion back and forth (and a potential to gain - the exchange rate could go either way!), so if you are sure you go back, it’s not a good idea to move the money.",
"title": ""
},
{
"docid": "8257d17b4fce98bacecffd5f57a491f1",
"text": "\"I've considered simply moving my funds to an Australian bank to \"\"lock-in\"\" the current rate, but I worry that this will put me at risk of a substantial loss (due to exchange rates, transfer fees, etc) when I move my funds back into the US in 6 months. Why move funds back? If you want to lock in current exchange rates, figure out how much money you are likely to spend in Australia for the next six months. Move just enough funds to cover that to an Australian bank. Leave the remainder in the United States (US), as your future expenses will be in US dollars. So long as you don't find some major, unanticipated purchase, this covers you. You have enough money for the next six months with no exchange rate worries. At the end of the six months, if you fall slightly short, cover with your credit card as you are doing now. You'll take a loss, but on a small amount of money. If you have a slight excess and you were right about the exchange rate, you'll make a little profit at the end. If you were wrong, you'll take a small loss. The key here is that you should be able to budget for your six months. You can lock in current exchange rates just for that amount of money. Moving all your funds to Australia is a gamble. You can certainly do that if you want, but rather than gambling, it may be better to take the sure thing. You know you need six months expenses, so just move that. You will definitely be spending six months money in Australia, so you are immune to exchange rate fluctuations for that period. The remainder of your money can stay in the US, as that's where you plan to spend it. However, recent political events back in the States have me (and, I'm sure, every currency speculator and foreign investor) worried that this advantage will not last for much longer. If currency speculators expect exchange rates to fall, then they'd have already bid down the rates. I.e. they'd keep speculating until the rates did fall. So the speculators expect the current rates are correct, otherwise they'd move them. Donald Trump's state goal is to increase exports relative to imports. If he's successful, this could cause the US dollar to fall to make exports cheaper and imports more expensive. However, if his policies fail, then the opposite is likely to happen. Most of his announced trade policies are more likely to increase the value of the dollar than to decrease it. In particular, that is the likely result of increased tariffs. If you are worried about Trump failing, then you should worry about a strong dollar. That's more in line with actual speculation since the election. I don't know that I'd make a strong bet in either direction. Hedging makes more sense to me, as it simply locks in the current situation, which you apparently find favorable. Not hedging at all might produce some profit if the dollar goes up. Gambling all your funds might produce some profit if the dollar goes down. The middle path of hedging just what you're spending is the safest if least likely to produce profit. My recommendation is to hedge the six months expenses and enjoy your time abroad. Why worry about political events that you can't control? Enjoy your working (studying) vacation.\"",
"title": ""
},
{
"docid": "081d5ca1f1657f10952f8c55d28b9dd3",
"text": "We've been in this situation for about 10 years now. We don't have to send money back to Canada very often, but when we do, we typically just write a US$ check/cheque and send it to a relative back home to cash for us. We've found that the Canadian banks are much more familiar with US currency than vice versa, and typically have better exchange rates than many of the other options. That said, we haven't done an exhaustive search for the best deal. If you haven't left Canada yet, you might consider opening up a US funds account at the same bank as your Canadian funds account if the bank will allow you to transfer money between the accounts. I haven't priced out that option, so I don't know what the exchange rate would look like there. Also, you didn't ask about this, but if you have any RRSP accounts in Canada, make sure they're with a broker that is licensed to accept trades from US-based customers. Otherwise, you won't be able to move your money around to different investments within the RRSP. Once you're resident in the US, you will no longer be able to open any new accounts in Canada, but you will be able to maintain the ones you already have.",
"title": ""
},
{
"docid": "c75297b62f73553ec352cda7a9fff1b6",
"text": "\"I've done exactly what you say at one of my brokers. With the restriction that I have to deposit the money in the \"\"right\"\" way, and I don't do it too often. The broker is meant to be a trading firm and not a currency exchange house after all. I usually do the exchange the opposite of you, so I do USD -> GBP, but that shouldn't make any difference. I put \"\"right\"\" in quotes not to indicate there is anything illegal going on, but to indicate the broker does put restrictions on transferring out for some forms of deposits. So the key is to not ACH the money in, nor send a check, nor bill pay it, but rather to wire it in. A wire deposit with them has no holds and no time limits on withdrawal locations. My US bank originates a wire, I trade at spot in the opposite direction of you (USD -> GBP), wait 2 days for the trade to settle, then wire the money out to my UK bank. Commissions and fees for this process are low. All told, I pay about $20 USD per xfer and get spot rates, though it does take approx 3 trading days for the whole process (assuming you don't try to wait for a target rate but rather take market rate.)\"",
"title": ""
},
{
"docid": "cfb8a430ecf3e6b9bf29161f2f231924",
"text": "\"Question is, what do we need to do as far as the IRS is concerned? I mean we'll get the money from them and pay it back less than two months later. You're probably worried about the gift tax. Since you're a couple, the maximum exclusion amount is calculated like this: The reason the Pg multiplier stands separate is that gift splitting does require form 709 filed even if no tax is due, unless they actually write separate checks for their respective portions. So the math shows that you and your wife can get at least $28K from anyone without the need of gift tax to be paid or gift tax return to be filed. You can get up to $56K from your parents, but the gift splitting may need to be documented on form 709. Since you're in fact talking about a loan you're going to repay, you'll need to document it (with a note and everything), and document the repayment. If interest is being paid - your parents must declare it on their tax return for the year, obviously. In this case, if the loan is properly documented, repaid and the interest is declared, the IRS won't even bother claiming it was a gift. Even if there's no real interest, it shouldn't be an issue (the IRS might assign some \"\"deemed\"\" interest at their rates that would be considered a gift, but assuming no other gift transactions between you exist for the year the amount would be miniscule and way below the $14K exclusion level). Of course, as with any tax concern, you get here what you paid for. For a proper advice talk to a tax adviser (EA/CPA) licensed in your State.\"",
"title": ""
},
{
"docid": "457d622371d738723f400eaa2f67c280",
"text": "frostbank.com is the closest thing I've found, so accepting this (my own) answer :) EDIT: editing from my comment earlier: frostbank.com has free incoming international wires, so that's a partial solution. I confirmed this works by depositing $1 (no min deposit requirement) and wiring $100 from a non-US bank. Worked great, no fees, and ACH'd it to my main back, no problems/fees. No outgoing international wires, alas.",
"title": ""
},
{
"docid": "4e4d147b2b4432f5dcf87c40276ab22f",
"text": "\"Several options are available. She may ask the US bank to issue a debit card (VISA most probably) to her account, and mail this card to Russia. I think this can be done without much problems, though sending anything by mail may be unreliable. After this she just withdraws the money from local ATM. Some withdrawal fee may apply, which may be rather big if the sum of money is big. In big banks (Alfa-bank, Citibank Russia, etc.) are ATMs that allow you to withdraw dollars, and it is better to use one of them to avoid unfavorable exchange rate. She may ask the US bank to transfer the money to her Russian account. I assume the currency on the US bank account is US Dollars. She needs an US dollar account in any Russian bank (this is no problem at all). She should find out from that bank the transfer parameters (реквизиты) for transfering US dollars to her account. This should include, among other info, a \"\"Bank correspondent\"\", and a SWIFT code (or may be two SWIFT codes). After this, she should contact her US bank and find out how can she request the money to be transferred to her Russian bank, providing these transfer parameters. I can think of two problems that may be here. First, the bank may refuse to transfer money without her herself coming to the bank to confirm her identity. (How do they know that a person writing or calling them is she indeed?) However, I guess there should be some workaround for this. Second, with current US sanctions against Russia, the bank may just refuse the transfer or will have do some additional investigations. However, I have heard that bank transfers from US to private persons to Russia are not blocked. Probably it is good to find this out in advance. In addition, the US bank will most probably charge some standard fee for foreign transfer. After this, she should wait for a couple of days, maybe up to week for the money to appear on Russian account. I have done this once some four years ago, and had no problems, though at that time I was in the US, so I just came to the bank myself. The bank employee to whom I talked obviously was unsure whether the transfer parameters were enough (obviously this was a very unusual situation for her), but she took the information from me, and I guess just passed it on to someone more knowledgable. The fee was something about $40. Another option that I might think of is her US bank issuing and mailing her a check for the whole sum, and she trying to cash it here in Russia. This is possible, but very few banks do cash checks here (Citibank Russia is among those that do). The bank will also charge a fee, and it will be comparable to transfer fee. Plus mailing anything is not quite reliable here. She would also have to consider whether she need to pay Russian taxes on this sum. If the sum is big and passes through a bank, I guess Russian tax police may find this out through and question her. If it is withdrawn from a VISA card, I think it will not be noticed, but even in this case she might be required to file a tax herself.\"",
"title": ""
},
{
"docid": "2a6fc6409486bd64dced6e09bdc81cf5",
"text": "From Chase FAQ it looks like this is a regular ACH transfer. ACH transactions can be reversed under certain conditions. I haven't been able to find some authoritative link on this, so I suggest this (thenest.com budgeting blog) instead: Allowed Reasons You can have ACH transactions reversed for one of three reasons under the rules: wrong money amount, wrong account or duplicated transactions. For example, if your mortgage bill is for $756.00, but your lender's website messes up and you're charged $856.00, the transaction is reversible it because it's the wrong dollar amount. If the website charges you $756.00 twice, the second duplicated transaction is reversible. Reversal Procedures You might have to bring a mistake to the originator's attention to get it fixed. Only the originator -- the person or company taking or sending money -- can ask for a reversal. For example, if you have a transaction for a wrong dollar amount from your lender's website, the originator is the lender. An originator is supposed to send the reversal within 24 hours of the error's discovery and within five banking days of the original transaction. When a reversal is required because of a wrong amount or wrong account, the originator must send a correcting entry with the right information. Bank's Responsibility A bank should honor an ACH reversal, even if it means debiting a customer's account again because of a correcting transaction. However, the bank doesn't have to debit your account if you closed it or the new transaction would overdraw it. Your bank does have to tell you if a correcting entry is going to take money out of your account, but the bank doesn't need your permission to do it.",
"title": ""
},
{
"docid": "bd6817e4cdc5230ba683aa08909bea15",
"text": "I would certainly hope to make the transfer by wire - the prospect of popping cross the border with several million dollars in the trunk seems... ill fated. I suppose I'm asking what sort of taxes, duties, fees, limits, &c. would apply Taxes - None. It is your money, and you can transfer it as you wish. You pay taxes on the income, not on the fact of having money. Reporting - yes, there's going to be reporting. You'll report the origin of the money, and whether all the applicable taxes have been paid. This is for the government to avoid money laundering. But you're going to pay all the taxes, so for transfer - you'll just need to report (and maybe, for such an amount, actually show the tax returns to the bank). Fees - shop around. Fees differ, like any other product/service costs on the marketplace.",
"title": ""
},
{
"docid": "88c461ef9c397b80086de1ac45b49a68",
"text": "I'm not sure I understand what you're trying to say, but in general its pretty simple: She goes to the UK bank and requests a wire transfer, providing your details as a recipient. You then go to your bank, fill the necessary forms for the money-laundaring regulations, you probably also need to pay the taxes on the money to the IRS, and then you have it. If you have 1 million dollars (or is it pounds?), I'm sure you can afford spending several hundreds for a tax attorney to make sure your liabilities are reduced to minimum.",
"title": ""
},
{
"docid": "14c5d648e9c36963ce54c11facfab02d",
"text": "You didn't specify where in the world you account is - ScotiaBank operates in many countries. However, for large amounts where there is a currency conversion involved, you are almost guaranteed to be better off going to a specialist currency broker or payments firm, rather than using a direct method with your bank (such as a wire transfer). Based on my assumption that your account is in Canada, one provider who I have personally used with success in transferwise, but the best place to compare where is the best venue for you is https://www.fxcompared.com In the off chance that this is an account with Scotiabank in the United States, any domestic payment method such as a domestic wire transfer should do the job perfectly well. The fees don't matter for larger amounts as they are a single fee versus a percentage fee like you see with currency conversions.",
"title": ""
}
] |
fiqa
|
7960c459abe19c1aedb20406d88afca7
|
Using multiple bank accounts
|
[
{
"docid": "b2bfe73bca613298ce22c988da3d6a9f",
"text": "There is nothing conceptually wrong with it. If you like it that way, go ahead. The only thing to watch out for is bank policies that effectively penalize having many small accounts. For instance, some banks charge you a fee for checking accounts with a balance below a certain minimum, but will waive the fees for accounts with a higher balance. You may be able to avoid such fees by judicious management of your funds (or by switching to a different bank), but it's something to be aware of. (The interest rates on savings accounts also often vary with the balance, making many small balances less efficient than one big balance. However, right now, at least in the US, interest rates on savings accounts are so low that the difference here is likely to be minimal.)",
"title": ""
},
{
"docid": "0c4ff7b7c5d61828a76f1e9edafbbe34",
"text": "\"I live near historic Concord, Massachusetts, and frequently drive past Walden Pond. I'm reminded of Henry David Thoreau's words, \"\"Simplify, simplify, simplify.\"\" In my opinion, fewer is better. 2 checkbooks? I don't see how that makes budgeting any easier. The normal set of expenses are easily kept as one bucket, one account. The savings 2&3 accounts can also be combined and tracked if you really want to think of them as separate accounts. Now, when you talk about 'Retirement' that can be in tax-wise retirement accounts, e.g. 401(k), IRA, etc. or post tax regular brokerage accounts. In our situation, the Schwab non-retirement account was able to handle emergency (as money market funds) along with vacation/rainy day, etc, in CDs of different maturities. As an old person, I remember CDs at 10% or higher, so leaving money in lower interest accounts wasn't good. Cash would go to CDs at 1-5 year maturities to maximize interest, but keep money maturing every 6-9 months. Even with the goal of simplifying, my wife and I each have a 401(k), an IRA, and a Roth IRA, I also have an inherited Roth, and I manage my teen's Roth and brokerage accounts. That's 9 accounts right there. No way to reduce it. To wrap it up, I'd go back to the first 4 you listed, and use the #4 checking attached to the broker account to be the emergency fund. Now you're at 3. Any higher granularity can be done with a spreadsheet. Think of it this way - the day you see the house you love, will you not be so willing to give up that year's vacation?\"",
"title": ""
}
] |
[
{
"docid": "5f63fe075eedd9c54fad6c6362c1bb86",
"text": "Usually problems like what you're running into mean that the megabank hasn't finished digesting acquisitions, or they cannot meet some state regulatory issue with the main system. Bank of America is/was like this for a few years -- tellers had access to separate Fleet Bank, BankSouth and BoA systems, but you as customer got stuck when doing seemingly routine transactions. You're probably in a situation where your older accounts are in System A, and the newer ones are in recently acquired System B. You should be able to avoid this problem by opening new accounts at Citibank, or just getting another bank. If you have a good rapport with a branch manager, explain the situation and see if they can do anything. FWIW, Unless you're spending alot of time in Manhattan or travel overseas often, there aren't many advantages to having a Citibank account these days.",
"title": ""
},
{
"docid": "7c28f5c19dd0acae5429e650ad60cfcb",
"text": "\"There are some banks that offer \"\"pot\"\" accounts like this (off the top of my head I think Intelligent Finance does, although they call them \"\"jars\"\"). The other option for charity specifically would be a CAF account: https://www.cafonline.org/my-personal-giving/plan-your-giving/individual-charity-account.aspx\"",
"title": ""
},
{
"docid": "da0a33e57f0f0404070c71c19c000933",
"text": "\"First, there are not necessarily two accounts involved. Usually the receiving party can take the check to the bank on which it is drawn and receive cash. In this case, there is only one bank, it can look to see that the account on which the check is drawn has sufficient funds, and make an (essentially irrevocable) decision to pay the bearer. (Essentially irrevocable precisely because the bearer did not necessarily have to present account information.) The more usual case is that the receiving party deposits the check into an account at their own bank. The receiving party's bank then (directly or indirectly - in the US via the Federal Reserve) presents the check to the paying party's bank. At that point if the there are insufficient funds, the check \"\"bounces\"\" and the receiving party's account will be debited. The receiving party's bank knows that account number because, in this case, the receiving party is a customer of the bank. This is why funds from check deposits are typically not available for immediate withdrawal.\"",
"title": ""
},
{
"docid": "67a4a8453d48b174f08d7b9138ed40e9",
"text": "\"When I was younger I had a problem with Washington Mutual. Someone had deposited a check in to my account then ran my account negative with a \"\"dupe\"\" of my debit card. WaMu tied up my account for three months while they investigated because it wasn't simply a debit card fraud issue, this was check fraud (so they claimed). At the time all the money I had in the world was in that account and the ordeal was extremely disruptive to my life. Since the, I never spend on my debit card(s) and I keep more than one checking account to disperse the risk and avoid disruption in the event anything ever happens again. Now one of the accounts contains just enough money (plus a small buffer) to pay my general monthly expenses and the other is my actual checking account. There's no harm in having more than one checking account and if you think it will enhance your finances, do it. Though, there's no reason to get a business account unless you've actually formed a business.\"",
"title": ""
},
{
"docid": "ecb895c7bb53ff9d68dcb55d71197e94",
"text": "\"All of these answers are great but I wanted to add one piece of advice from someone who has been married 8 years and been in various financial \"\"situations.\"\" Have one of you (whoever the two of you feel is more organized and more financially responsible) be solely in charge of paying the monthly bills, but keep a spreadsheet or some other tracking mechanism so that the other can monitor this as well. That way if you guys ever decide to switch roles there won't be much of a learning curve. Also, don't do three bank accounts. One or two is enough, more than that starts becoming more difficult to keep track of and if you have any sort of monthly fees on the accounts it also wastes money. My wife and I each have our own account and we get money for each other if necessary. She handles paying the bills but keeps a monthly spreadsheet that has all pertinent info. We have a number and color coding system to determine which paycheck (1st or 2nd of the month) the bill is paid in and whether it has been paid, not paid, or past due (green, yellow, red). Hopefully you don't ever have to see the red color :P\"",
"title": ""
},
{
"docid": "35ee4b7c4719cf7e46e5e2aee3ce8112",
"text": "The thing is that you only need one entry, not two. That's the beauty of double entry - since you have double entry system, every transaction will create two entries. So you don't need to create two transactions, you only need one. So you got a $30 gift. You credit Income:Gifts and on the other side Assets:Checking. Your general ledger entry (Menu->Tools->General Ledger) will look like this: You end up with balances: Which represent your total income and your current balance. Similarly with expense for food: GL will look like this: Balances: And you keep track of totals properly.",
"title": ""
},
{
"docid": "0c48f8aa85131df31be74b8f18f3c5fd",
"text": "The SWIFT format has multiple place holders. The Beneficiary Bank and Account can be specified using Local Sort Codes [ABA number in this example]. However you would still need to specify the Correspondent Bank and its BIC.",
"title": ""
},
{
"docid": "8018eefd837fd80fcc3c6bd9a4cb2eb5",
"text": "\"JoeTaxpayer's answer mentions using a third \"\"house\"\" account. In my comment on his answer, I mentioned that you could simply use a bookkeeping account to track this instead of the overhead of an extra real bank account. Here's the detail of what I think will work for you. If you use a tool like gnucash (probably also possible in quicken, or if you use paper tracking, etc), create an account called \"\"Shared Expenses\"\". Create two sub accounts under that called \"\"his\"\" and \"\"hers\"\". (I'm assuming you'll have your other accounts tracked in the software as well.) I haven't fully tested this approach, so you may have to tweak it a little bit to get exactly what you want. When she pays the rent, record two transactions: When you pay the electric bill, record two transactions: Then you can see at a glance whether the balances on \"\"his\"\" and \"\"hers\"\" match.\"",
"title": ""
},
{
"docid": "c339c34a9bac65524b033ec28d1827c2",
"text": "It should be in the name(s) of whomever puts money in the account. When filing your taxes there will be a question or space to mark the percentage of income in each others name. If you're just looking for small amounts of income splitting, then it's legal for the higher earning spouse to pay household expenses and then the lower earning spouse can save all or some of his/her income. Whether or not to have 2 accounts or not has more to do with estate planning and minimizing account fees if applicable. It can also help in a small way for asset allocation if that's based on family assets and also, minimizing commissions.",
"title": ""
},
{
"docid": "7e6ce529c96e20905f0789621c8fcfea",
"text": "The easiest options appear to be to open an account with one of the large multinational banks like Citi. They have options such as opening two separate checking accounts, one in each currency, and Citi in particular has an international account that appears to make mutli-currency personal banking easier. All of the options have minimum balance requirements or fees for conversion, but if you need quick access this seems to be the best bet. Even if this is a one-time event and you don't need the account, a bank like Citi may be able to help you cash the check and get access to the funds quicker than a national or local bank. http://www.citibank.com/ipb-global/homepage/newsite/content/english/multi_cap_bank_depo.htm Alternatively if you know anyone with a US bank account you can deposit it with them and take the cash withdrawal from their account, assuming they agree, the check isn't too large, etc.",
"title": ""
},
{
"docid": "0ad76bb6af7557b982b08bf7afcc9498",
"text": "\"I'm not aware of banks offering savings account for specific reasons, other than certain accounts for college funds, as the number of reasons someone might want to open a savings account is almost infinite. What I did was open 3 savings accounts with the same bank (I could have opened more, but I didn't need more). Each account is labeled with a nickname for it's specific purpose: Vacation, Emergencies, and Annual fees. This way, I can make automated deposits to each one based on my monthly budgets and track them independently. Most E-Banks offer this type of setup (CapitalOne even advertises it as a \"\"feature\"\") and the interest rate will likely be better than a standard brick-and-mortar bank.\"",
"title": ""
},
{
"docid": "8c9f527a4656e983d5cff2f0a7cea0c2",
"text": "A technique that is working pretty well for me: Hide the money from myself: I have two bank accounts at different banks. Let's call them A and B. I asked my employer to send my salary into account A. Furthermore I have configured an automatic transfer of money from account A to account B on the first of each month. I only use account B for all my expenses (rent, credit card, food, etc) and I check its statement quite often. Since the monthly transfer is only 80% of my salary I save money each month in account A. I don't have a credit card attached to the savings account and I almost never look at its statement. Since that money is out of sight, I do not think much about it and I do not think that I could spend it. I know it is a cheap trick, but it works pretty well for me.",
"title": ""
},
{
"docid": "aaa8aad4c12291860d68cfacd8f7b6ed",
"text": "I found out there is something called CDARS that allows a person to open a multi-million dollar certificate of deposit account with a single financial institution, who provides FDIC coverage for the entire account. This financial institution spreads the person's money across multiple banks, so that each bank holds less than $250K and can provide the standard FDIC coverage. The account holder doesn't have to worry about any of those details as the main financial institution handles everything. From the account holder's perspective, he/she just has a single account with the main financial institution.",
"title": ""
},
{
"docid": "a5a8f00d13d6121c63e2703247e507dc",
"text": "\"Bookkeeping and double-entry accounting is really designed for tracking the finances of a single entity. It sounds like you're trying to use it to keep multiple entities' information, which may somewhat work but isn't really going to be the easiest to understand. Here's a few approaches: In this approach, the books are entirely from your perspective. So, if you're holding onto money that \"\"really\"\" belongs to your kids, then what you've done is you're taking a loan from them. This means that you should record it as a liability on your books. If you received $300, of which $100 was actually yours, $100 belongs to Kid #1 (and thus is a loan from him), and $100 belongs to Kid #2 (and thus is a loan from her), you'd record it just that way. Note that you only received $100 of income, since that's the only money that's \"\"yours\"\", and the other $200 you're only holding on behalf of your kids. When you give the money to your kids or spend it on their behalf, then you debit the liability accordingly and credit the Petty Cash or other account you spent it from. If you wanted to do this in excruciating detail, then your kids could each have their own set of books, in which they would see a transfer from their own Income:Garage Sale account into their Assets:Held by Parents account. For this, you just apportion each of your asset accounts into subaccounts tracking how much money each of you has in it. This lets you treat the whole family as one single entity, sharing in the income, expenses, etc. It lets you see the whole pool of money as being the family's, but also lets you track internally some value of assets for each person. Whenever you spend money you need to record which subaccount it came from, and it could be more challenging if you actually need to record income or expenses separately per person (for some sort of tax reasons, say) unless you also break up each Income and Expense account per person as well. (In which case, it may be easier just to have each person keep their entirely separate set of books.) I don't see a whole lot of advantages, but I'll mention it because you suggested using equity accounts. Equity is designed for tracking how much \"\"capital\"\" each \"\"investor\"\" contributes to the entity, and for tracking a household it can be hard for that to make a lot of sense, though I suppose it can be done. From a math perspective, Equity is treated exactly like Liabilities in the accounting equation, so you could end up using it a lot like in my Approach #1, where Equity represents how much you owe each of the kids. But in that case, I'd find it simpler to just go ahead and treat them as Liabilities. But if it makes you feel better to just use the word Equity rather than Liability, to represent that the kids are \"\"investing\"\" in the household or the like, go right ahead. If you're going to look at the books from your perspective and the kids as investing in it, the transaction would look like this: And it's really all handled in the same way an Approach #1. If on the other hand, you really want the books to represent \"\"the family\"\", then you'd need to have the family's books really look more like a partnership. This is getting a bit out of my league, but I'd imagine it'd be something like this: That is to say, the family make the sale, and has the money, and the \"\"shareholders\"\" could see it as such, but don't have any obvious direct claim to the money since there hasn't been a distribution to them yet. Any assets would just be assumed to be split three ways, if it's an equal partnership. Then, when being spent, the entity would have an Expense transaction of \"\"Dividend\"\" or the like, where it distributes the money to the shareholders so that they could do something with it. Alternatively, you'd just have the capital be contributed, And then any \"\"income\"\" would have to be handled on the individual books of the \"\"investors\"\" involved, as it would represent that they make the money, and then contributed it to the \"\"family books\"\". This approach seems much more complicated than I'd want to do myself, though.\"",
"title": ""
},
{
"docid": "8151494626fa89a0c52f6bc89f2d4c98",
"text": "Yes. Although I imagine the risk is small, you can remove the risk by splitting your money amongst multiple accounts at different banks so that none of the account totals exceed the FDIC Insurance limit. There are several banks or financial institutions that deposit money in multiple banks to double or triple the effective insurance limit (Fidelity has an account like this, for example)",
"title": ""
}
] |
fiqa
|
84e3047d1a4c36a496832f723e1e34eb
|
How do annual risks translate into long-term risks?
|
[
{
"docid": "1e77c8b4df0b2547a309756256605859",
"text": "\"The short answer is the annualised volatility over twenty years should be pretty much the same as the annualised volatility over five years. For independent, identically distributed returns the volatility scales proportionally. So for any number of monthly returns T, setting the annualization factor m = 12 annualises the volatility. It should be the same for all time scales. However, note the discussion here: https://quant.stackexchange.com/a/7496/7178 Scaling volatility [like this] only is mathematically correct when the underlying price model is driven by Geometric Brownian motion which implies that prices are log normally distributed and returns are normally distributed. Particularly the comment: \"\"its a well known fact that volatility is overestimated when scaled over long periods of time without a change of model to estimate such \"\"long-term\"\" volatility.\"\" Now, a demonstration. I have modelled 12,000 monthly returns with mean = 3% and standard deviation = 2, so the annualised volatility should be Sqrt(12) * 2 = 6.9282. Calculating annualised volatility for return sequences of various lengths (3, 6, 12, 60 months etc.) reveals an inaccuracy for shorter sequences. The five-year sequence average got closest to the theoretically expected figure (6.9282), and, as the commenter noted \"\"volatility is [slightly] overestimated when scaled over long periods of time\"\". Annualised volatility for varying return sequence lengths Edit re. comment Reinvesting returns does not affect the volatility much. For instance, comparing some data I have handy, the Dow Jones Industrial Average Capital Returns (CR) versus Net Returns (NR). The return differences are somewhat smoothed, 0.1% each month, 0.25% every third month. More erratic dividend reinvestment would increase the volatility.\"",
"title": ""
}
] |
[
{
"docid": "be8cc9df94ea427b68eba92216842cbc",
"text": "I find the higher estimates a bit unbelievable. A big part of my job is liability valuation and small assumption changes can have a huge impact on results. They may be right (future) dollar value wise but the proper way to think about this stuff is in present value terms. This could actually be a really interesting study - you all just gave me a great idea for a potential masters thesis :)",
"title": ""
},
{
"docid": "d1791a006cbced74f19d94ae64a7dc2e",
"text": "Since near-term at-the-money (ATM) options are generally the most liquid, the listed implied vol for a stock is usually pretty close to the nearest ATM volatility, but there's not a set convention that I'm aware of. Also note that for most stocks, vol skew (the difference in vol between away-from-the-money and at-the-money options) is relatively small, correct me if I'm wrong, IV is the markets assessment that the stock is about 70% likely (1 Standard Deviation) to move (in either direction) by that percent over the next year. Not exactly. It's an annualized standard deviation of the anticipated movements over the time period of the option that it's implied from. Implied vol for near-term options can be higher or lower than longer-term options, depending on if the market believes that there will be more uncertainty in the short-term. Also, it's the bounds of the expected movement in that time period. so if a stock is at $100 with an implied vol of 30% for 1-year term options, then the market thinks that the stock will be somewhere between $70 and $130 after 1 year. If you look at the implied vol for a 6-month term option, half of that vol is the range of expected movement in 6 months.",
"title": ""
},
{
"docid": "da9bcd80c4b84b951d5e8c1372a1ed05",
"text": "\"This article is written by an idiot!! Risk ≠ failure, risk = possibility of failure Reward (return) should be commensurate with risk and this is why long-shot propositions should be worthwhile. An example of this could be something like the following; an investment with a 95% chance of success should return about 5% on the investment (1 in 20 risk of loss, 1/20th return on investment for taking the risk) while a long-shot investment with a 5% chance of success should be paying a 2000% return (1 in 20 will succeed but they will pay 20 times the investment if they do). An investment with a 0% chance of return (that you are suckered into due to \"\"opacity\"\") is not an investment, it is being robbed and it should be illegal. WTF is opacity? Lying?\"",
"title": ""
},
{
"docid": "bdf902963e79c6b5e308997b48edab0a",
"text": "I can think of a few simple and quick techniques for timing the market over the long term, and they can be used individually or in combination with each other. There are also some additional techniques to give early warning of possible turns in the market. The first is using a Moving Average (MA) as an indication of when to sell. Simply if the price closes below the MA it is time to sell. Obviously if the period you are looking at is long term you would probably use a weekly or even monthly chart and use a relatively large period MA such as a 50 week or 100 week moving average. The longer the period the more the MA will lag behind the price but the less false signals and whipsawing there will be. As we are looking long term (5 years +) I would use a weekly chart with a 100 week Exponential MA. The second technique is using a Rate Of Change (ROC) Indicator, which is a momentum indicator. The idea for timing the markets in the long term is to buy when the indicator crosses above the zero line and sell when it crosses below the zero line. For long term investing I would use a 13 week EMA of the 52 week ROC (the EMA smooths out the ROC indicator to reduce the chance of false signals). The beauty of these two indicators is they can be used effectively together. Below are examples of using these two indicators in combination on the S&P500 and the Australian S&P ASX200 over the past 20 years. S&P500 1995 to 2015 ASX200 1995 to 2015 If I was investing in an ETF tracking one of these indexes I would use these two indicators together by using the MA as an early warning system and maybe tighten any stop losses I have so that if the market takes a sudden turn downward the majority of my profits would be protected. I would then use the ROC Indicator to sell out completely out of the ETF when it crosses below zero or to buy back in when the ROC moves back above zero. As you can see in both charts the two indicators would have kept you out of the market during the worst of the downfalls in 2000 and 2008 for the S&P500 and 2008 for the ASX200. If there is a false signal that gets you out of the market you can quite easily get back in if the indicator goes back above zero. Using these indicators you would have gotten into the market 3 times and out of it twice for the S&P500 over a 20 year period. For the ASX200 you would have gone in 6 times and out 5 times, also over a 20 year period. For individual shares I would use the ROC indicator over the main index the shares belong to, to give an indication of when to be buying individual stocks and when to tighten stop losses and stay on the sidelines. My philosophy is to buy rising stocks in a rising market and sell falling stocks in a falling market. So if the ROC indicator is above zero I would be looking to buy fundamentally healthy stocks that are up-trending and place a 20% trailing stop loss on them. If I get stopped out of one stock then I would look to replace it with another as long as the ROC is still above zero. If the ROC indicator crosses below zero I would tighten my trailing stop losses to 5% and not buy any new stocks once I get stopped out. Some additional indicators I would use for individual stock would be trend lines and using the MACD as a momentum indicator. These two indicators can give you further early warning that the stock may be about to reverse from its current trend, so you can tighten your stop loss even if the ROC is still above zero. Here is an example chart to explain: GEM.AX 3 Year Weekly Chart Basically if the price closes below the trend line it may be time to close out the position or at the very least tighten up your trailing stop loss to 5%. If the price breaks below an established uptrend line it may well be the end of the uptrend. The definition of an uptrend is higher highs and higher lows. As GEM has broken below the uptrend line and has maid a lower low, all that is needed to confirm the uptrend is over is a lower high. But months before the price broke below the uptrend line, the MACD momentum indicator was showing bearish divergence between it and the price. In early September 2014 the price made a higher high but the MACD made a lower high. This is called a bearish divergence and is an early warning signal that the momentum in the uptrend is weakening and the trend could be reversing soon. Notice I said could and not would. In this situation I would reduce my trailing stop to 10% and keep a watchful eye on this stock over the coming months. There are many other indicators that could be used as signals or as early warnings, but I thought I would talk about some of my favourites and ones I use on a daily and weekly basis. If you were to employ any of these techniques into your investing or trading it may take a little while to learn about them properly and to implement them into your trading plan, but once you have done that you would only need to spend 1 to 2 hours per week managing your portfolio if trading long-term or about 1 hour per nigh (after market close) if trading more medium term.",
"title": ""
},
{
"docid": "8b4d4b2faa01a03c992d0834a7b6d2f1",
"text": "Stock index funds are likely, but not certainly, to be a good long-term investment. In countries other than the USA, there have been 30+ year periods where stocks either underperformed compared to bonds, or even lost value in absolute terms. This suggests that it may be an overgeneralization to assume that they always do well in the long term. Furthermore, it may suggest that they are persistently overvalued for the risk, and perhaps due for a long-term correction. (If everybody assumes they're safe, the equity risk premium is likely to be eaten up.) Putting all of your money into them would, for most people, be taking an unnecessary risk. You should cover some other asset classes too. If stocks do very well, a portfolio with some allocation to more stable assets will still do fairly well. If they crash, a portfolio with less risky assets will have a better chance of being at least adequate.",
"title": ""
},
{
"docid": "7294853a49f545ac4cd90e8e3e97f261",
"text": "What is the importance or benefit of the assumption that high-risk is preferable for younger people/investors instead of older people? Law of averages most high risk investments [stocks for examples, including Mutual funds]. Take any stock market [some have data for nearly 100 years] on a 15 year or 30 years horizon, the year on year growth is around 15 to 18 percentage. Again depends on which country, market etc ... Equally important every stock market in the same 15 year of 30 year time, if you take specific 3 year window, it would have lost 50% or more value. As one cannot predict for future, someone who is 55 years, if he catches wrong cycle, he will lose 50%. A young person even if he catches the cycle and loses 50%, he can sit tight as it will on 30 years average wipe out that loss.",
"title": ""
},
{
"docid": "6133f6d083b06457fb1454a44b740a51",
"text": "These scenarios discuss the period to 2025. They assess the deep uncertainty that is paralysing decision-taking. They identify the roots of this as the failure of the social model on which the West has operated since the 1920s. Related and pending problems imply that this situation is not recoverable without major change: for example, pensions shortfalls are greater in real terms that entire expenditure on World War II, and health care and age support will treble that. Due to the prolonged recession, competition will impact complex industries earlier than expected. Social responses which seek job protection, the maintenance of welfare and also support in old age will tear at the social fabric of the industrial world. There are ways to meet this, implying a major change in approach, and a characteristic way in which to fail to respond to it in time, creating a dangerous and unstable world. The need for such change will alter the social and commercial environment very considerably. The absence of such change will alter it even more. The summary is available [here](http://www.chforum.org/scenario2012/paper-4-6.shtml) or at the foot of the link given in the header. The much richer paper is [here](http://www.chforum.org/scenario2012/paper-4-1.shtml). These scenarios are the latest in a series in a project that dates back to 1995. Over a hundred people participated from every continent, over a six month period. The working documents are available on the web.",
"title": ""
},
{
"docid": "b09a51e84be825a7bd9b5dd31aee855c",
"text": "\"Some thoughts on your questions in order, Duration: You might want to look at the longest-dated option (often a \"\"LEAP\"\"), for a couple reasons. One is that transaction costs (spread plus commission, especially spread) are killer on options, so a longer option means fewer transactions, since you don't have to keep rolling the option. Two is that any fundamentals-based views on stocks might tend to require 3-5 years to (relatively) reliably work out, so if you're a fundamental investor, a 3-6 month option isn't great. Over 3-6 months, momentum, short-term news, short squeezes, etc. can often dominate fundamentals in determining the price. One exception is if you just want to hedge a short-term event, such as a pending announcement on drug approval or something, and then you would buy the shortest option that still expires after the event; but options are usually super-expensive when they span an event like this. Strike: Strike price on a long option can be thought of as a tradeoff between the max loss and minimizing \"\"insurance costs.\"\" That is, if you buy a deeply in-the-money put or call, the time value will be minimal and thus you aren't paying so much for \"\"insurance,\"\" but you may have 1/3 or 1/2 of the value of the underlying tied up in the option and subject to loss. If you buy a put or call \"\"at the money,\"\" then you might have only say 10% of the value of the underlying tied up in the option and subject to loss, but almost the whole 10% may be time value (insurance cost), so you are losing 10% if the underlying stock price stays flat. I think of the deep in-the-money options as similar to buying stocks on margin (but the \"\"implied\"\" interest costs may be less than consumer margin borrowing rates, and for long options you can't get a margin call). The at-the-money options are more like buying insurance, and it's expensive. The commissions and spreads add significant cost, on top of the natural time value cost of the option. The annual costs would generally exceed the long-run average return on a diversified stock fund, which is daunting. Undervalued/overvalued options, pt. 1: First thing is to be sure the options prices on a given underlying make sense at all; there are things that \"\"should\"\" hold, for example a synthetic long or short should match up to an actual long or short. These kinds of rules can break, for example on LinkedIn (LNKD) after its IPO, when shorting was not permitted, the synthetic long was quite a bit cheaper than a real long. Usually though this happens because the arbitrage is not practical. For example on LNKD, the shares to short weren't really available, so people doing synthetic shorts with options were driving up the price of the synthetic short and down the price of the synthetic long. If you did actually want to be long the stock, then the synthetic long was a great deal. However, a riskless arbitrage (buy synthetic long, short the stock) was not possible, and that's why the prices were messed up. Another basic relationship that should hold is put-call parity: http://en.wikipedia.org/wiki/Put%E2%80%93call_parity Undervalued/overvalued options, pt. 2: Assuming the relationship to the underlying is sane (synthetic positions equivalent to actual positions) then the valuation of the option could focus on volatility. That is, the time value of the option implies the stock will move a certain amount. If the time value is high and you think the stock won't move much, you might short the option, while if the time value is low and you think the stock will move a lot, you might buy the option. You can get implied volatility from your broker perhaps, or Morningstar.com for example has a bunch of data on option prices and the implied components of the price model. I don't know how useful this really is though. The spreads on options are so wide that making money on predicting volatility better than the market is pretty darn hard. That is, the spread probably exceeds the amount of the mispricing. The price of the underlying is more important to the value of an option than the assumed volatility. How many contracts: Each contract is 100 shares, so you just match that up. If you want to hedge 100 shares, buy one contract. To get the notional value of the underlying multiply by 100. So say you buy a call for $30, and the stock is trading at $100, then you have a call on 100 shares which are currently priced at $10,000 and the option will cost $30*100=3,000. You are leveraged about 3 to 1. (This points to an issue with options for individual investors, which is that one contract is a pretty large notional value relative to most portfolios.)\"",
"title": ""
},
{
"docid": "2a690f0a2e0c41400119b5338b63d3b4",
"text": "There's probably a risk committee and an investment committee where several high level executives analyze and discuss the investments they will do and which risk level to take. Is all based on numbers and evidence, but in the end people decide how much risk to take. Then there Risk Management I suppose supervises the risk and that they don't go over the threshold (measured by VAR or whatever)",
"title": ""
},
{
"docid": "4fe71dad8b6df9ac042bb484b3097c02",
"text": "I use two measures to define investment risk: What's the longest period of time over which this investment has had negative returns? What's the worst-case fall in the value of this investment (peak to trough)? I find that the former works best for long-term investments, like retirement. As a concrete example, I have most of my retirement money in equity, since the Sensex has had zero returns over as long as a decade. Since my investment time-frame is longer, equity is risk-free, by this measure. For short-term investments, like money put aside to buy a car next year, the second measure works better. For this purpose, I might choose a debt fund that isn't the safest, and has had a worst-case 8% loss over the past decade. I can afford that loss, putting in more money from my pocket to buy the car, if needed. So, I might choose this fund for this purpose, taking a slight risk to earn higher return. In any case, how much money I need for a car can only be a rough guess, so having 8% less than originally planned may turn out to be enough. Or it may turn out that the entire amount originally planned for is insufficient, in which case a further 8% shortfall may not be a big deal. These two measures I've defined are simple to explain and understand, unlike academic stuff like beta, standard deviation, information ratio or other mumbo-jumbo. And they are simple to apply to a practical problem, as I've illustrated with the two examples above. On the other hand, if someone tells me that the standard deviation of a mutual fund is 15%, I'll have no idea what that means, or how to apply that to my financial situation. All this suffers from the problem of being limited to historical data, and the future may not be like the past. But that affects any risk statistic, and you can't do better unless you have a time machine.",
"title": ""
},
{
"docid": "b8c85057fde0b41a9ce1c46371684b2b",
"text": "First, you need to understand how modern insurance companies operate. On the front end, they write contracts with customers, collecting up front premiums, and promising to pay out to cover future losses. Efficient premiums cover exactly what's paid out; if you charge too much customers leave for competition, and if you charge too little the company goes under, or at least loses money. Large armies of people are employed to accurately guess future risks, hopefully to the point of certainty you have in human mortality. So over time, they will pay back those premiums. And there's a constant stream of new premiums coming in to replace money going out. So there's this effective pool of money they can use to buffer against large losses with; it's called float. And when the pool of money remains relatively constant, they can invest it longer term than the people who comprise the underlying risk. Large insurance companies like Berkshire Hathaway function in this manner; it's where Warren Buffet finds capital to invest while hiding from Wall St in Nebraska. The way these companies profit is by making sure the equation works: Profits = Premiums - Payouts + Return on float Payouts could be just payments for insured risk. But they could also be for the whole life insurance you're running across from time to time. These contracts offer the insured the chance to invest their money with the people who invest the float. And as long as the return on float is greater than the return they're offering, it's still profitable for the company. Since this guarantees suboptimal returns for you, it's usually a good idea to buy term insurance (much cheaper) and invest the difference yourself.",
"title": ""
},
{
"docid": "a397374dd48ae8d665e435d60a48fd6d",
"text": "The obvious risk is that you might buy at a time when the market is particularly high. Of course, you won't know that is the case until afterwards. A common way to reduce that risk is dollar cost averaging, where you buy gradually over a period of time.",
"title": ""
},
{
"docid": "83cdc3f29e96ce627f0bb5369a48319f",
"text": "I don't think you can always assume a 12-month time horizon. Sometimes, the analyst's comments might provide some color on what kind of a time horizon they're thinking of, but it might be quite vague.",
"title": ""
},
{
"docid": "759a233a96806f93816c5a6d2e5187e1",
"text": "That's not true - insurance companies can manage that risk and look to Re-insure that risk with very large pools of risk capital through reinsurance. Government agencies traditionally have not looked to buy insurance but are now starting to insure such catastrophic risks. I believe the NFIP has some sort of excess risk cover such that if losses are greater than $500 million, then it triggers a payout from large private insurers.",
"title": ""
},
{
"docid": "5d7736255f034e29a930b7eab8d3047c",
"text": "\"Forecasts of stock market direction are not reliable, so you shouldn't be putting much weight on them. Long term, you can expect to do better in stocks, but obtaining this better expected return has the danger of \"\"buying in\"\" to the market at a particularly bad moment, leading to a substantially lower return. So mitigate that risk while moving in a big piece of cash by \"\"dollar cost averaging\"\". An example would be to divide your cash hoard (conceptually) into say six pieces, and invest each piece in the index fund two months apart. After a year you will have invested the whole sum at about the average of the index for the year.\"",
"title": ""
}
] |
fiqa
|
500db42e87b807f1239ca3ef6ea17ec4
|
Should I make partial pre-payments on an actuarial loan?
|
[
{
"docid": "e4cedc51774d191c5a4e61a8c741e1fc",
"text": "The contract is not very clear. As much as I can understand it will still help if you make part prepayments. In an Rule 78 or Actuarial method, the schedule is drawn up front and the break-up of interest and principal for each month is calculated ahead. At the beginning both the reducing balance method as well as Actuarial method will give the same schedule. However in Actuarial method, if you make part prepayments, they get applied to the future principals, the interest are ignored. However the future interests are not reduced. Example: Say your schedule looks something like this; Monthly Payments say 100; Month | Principal | Interest 1 | 10 | 90 2 | 20 | 80 3 | 30 | 70 4 | 40 | 60 5 | 50 | 50 6 | 60 | 40 7 | 70 | 30 8 | 80 | 20 9 | 90 | 10 So lets say you have made 3 payments of 100, in the 4th month if you make 150 [in addition to 100], it would get applied to the principal of 4th, 5th and 6th month. So essentially you would save interest of 4th, 5th and 5th month. It would also reduce the total payments to 6. i.e. you will only have 7th, 8th, 9th due. The next payment you make of 100 will get applied to row 7. The disadvantage of this method over reducing balance is that the interest calculated for rows 7,8,9 don't change compared to reducing balance. However if you prepay in full, the unearned interest is calculated and returned as per the Actuarial Tables.",
"title": ""
}
] |
[
{
"docid": "f7aef2095e5f82842bc4a94843166f5c",
"text": "IMO this means one of two things: the bank thinks that 3 months from now, the interest rates it plans to offer will be lower than 1%; after 180 days, it will go up again. the bank needs more short-term cash than mid-term cash right now, so it offers you a better deal. In either case, it is unlikely that your 90 day intrest rate will be available 90 days from now, and most likely it will be below 1% unless the bank yet again needs short-term cash from its customers. With those proposed rates, I would go for half in 90 days and half in 270 days. Disclaimer: am no economist, just spent a lot of time the past year fretting over the same kind of questions. Feel free to tell me where I'm wrong if you think I am.",
"title": ""
},
{
"docid": "ba2ffd3d9a2721b4e06f7c2d830e42d3",
"text": "\"I was afraid of this. If you are using 12 P/Y and 12 C/Y, then your interest rate should not be divided by 12. Also, you should use \"\"END\"\" as this means monthly payments are made at the end of the month - a usual default.\"",
"title": ""
},
{
"docid": "5979df35b8e180bdb36a688c8a683794",
"text": "You might try to refinance some of those loans. It sounds like you are serious about minimizing interest expense, if you think you will be able to pay those loans in full within five years you might also try a loan that is fixed for five years before becoming variable. If you do not think you can repay the loans in full before that time, you should probably stick with the fixed rates that you have. It may even be profitable to refinance those loans through another lender at the exact same fixed rate because it gets around their repayment tricks that effectively increase your interest on those two smaller loans.",
"title": ""
},
{
"docid": "f444e19e15905a907e5f45af7cec3f3a",
"text": "If you wait to pay it off until you are required to in order to avoid interest (the end of the 'grace period'), then you are receiving what's known as a 'float' - basically, you have some money earlier than you would otherwise. Banks and other companies profit substantially from floats (such as when banks take your deposited check and put a seven day hold on it) by investing that money in money-making activities and not allowing you to use it until later. As an individual, particularly if you're not a frequent investor, you typically benefit less than a bank would from a float, since you have less options for investing that money with a short turnaround. Technically speaking it's sort of like you're getting a constant advance on your paycheck 21-40 days; so in that sense, you benefit because you get to have that stuff (television, food, whatever you're buying on credit) a month or so before you have to pay for it, and you get a month or so's benefit from it. So, yes, you get a small benefit from paying your bill when it's due and not prepaying. Whether that benefit is worth the potential downsides (forgetting to pay and accruing interest) depends on your habits.",
"title": ""
},
{
"docid": "64bf683b2cb764773bfa0664236dc782",
"text": "Others have suggested paying off the student loan, mostly for the satisfaction of one less payment, but I suggest you do the math on how much interest you would save by paying early on each of the loans: When you do the calculations I think you'll see why paying toward the debt with the highest interest rate is almost always the best advice. Whether you can refinance the mortgage to a lower rate is a separate question, but the above calculation would still apply, just with different amortization schedules.",
"title": ""
},
{
"docid": "5abecd3e58ef5ed1cc150d972ef193b5",
"text": "I would recommend that you take out a loan large enough to cover both your Capex requirements AND give yourself a cash buffer. Depending on the simulation and how aggressive you want/need to be (are you competing against other teams?), you may just want to leverage as much as you can and use high amounts of cash for all expenses and projects.",
"title": ""
},
{
"docid": "baa03a0acecbb06148485f6ff194f9ca",
"text": "If the best they can do is 1/8th of a percent for a 15 year term, you are best served by taking the 30 year term. Pay it down sooner if you can, but it's nice to have the flexibility if you have a month where things are tight.",
"title": ""
},
{
"docid": "1bea3d52dd8f05cf5b4cfdeeec0e3641",
"text": "\"We payed off our Mortgage early...at first in small extra payments to principal, and finally a lump sum. Each extra payment to principal reduced the balance, and reduced every payment going forward. I have, somewhere, an excel spreadsheet where I tracked this... - =CUMIPMT((interestRate/12),term,pymtNumber,balance,balance,0) computed the interest payment due - =currentPrincipal + CUMIPRINTresultAbove computed the monthly principal payment Occasionally I would update the month-ending Principal balance against what the mortgage company told me. It was usually off by a little. My mortgage company required me to specifically contact them for a payoff amount before I wrote the final check. I've never heard of a mortgage where prepayment of all expected interest following the original schedule is required. I would guess it is against federal (US) law. Lets think about that for a moment... out of \"\"interest\"\", I recently computed that for our 30 year loan at 6-5/8% on about 145, we payed a total of 106000 in interest. That include a refi to 4-7/8 10-years in to a 15-year loan, and paying it off 20 years after the original loan was granted. As far as not paying all the theoretical interest due... - If they get a fixed dollar amount of service interest back, there's no incentive to me to pay on-time. I owe the same amount if I pay it today or if I pay it 6 months late, after I gambled the mortgage money and finally won. (yea, I know they could write the mortgage to penalize me for paying late, but I'm ignoring that) - if you were requried to pay off all the interest that might accrue, how could you ever sell your home, or refinance, for that matter? When I refi'd, the new holder payed the old holder 98,000. If the original holder had required prepayment of all the interest that would be accrued to the original schedule, the new mortgage would've been 200k. It would just never be a good deal to buy a home if mortgages worked under that term. I have had a car loan that worked differently -- they pre-computed the total interest due and then divided it over the term of the loan equally. I could pay off early and they stopped collecting interest.\"",
"title": ""
},
{
"docid": "54100a57d47534dc11922682d2510962",
"text": "In the prior PMI discussions here, it's been stated that the bank is not obligated to remove PMI until the mortgage's natural amortization puts the debt at 78% LTV. So, paying in advance like this will not automatically remove the PMI. Nor will a lump sum payment be certain to move the next payment ahead a year. If it's entered as a principal prepayment, the next month's payment is still due. In the world of coupon books, if you sent in a year's payments, you'd not benefit from the interest saved, in one year you'd owe what the amortization table tells you. There's no free lunch when it comes to mortgages or finance in general. This is why we usually caution that one should not be cash poor the day after buying a house. Best to save 30%, put down 20%, and have a cushion after the closing.",
"title": ""
},
{
"docid": "ef33069fb68f76ccd86278fb8354543c",
"text": "\"The rate difference between your student loans and the historical yearly average growth in the S&P500 isn't large enough for me to play the \"\"pay minimums and invest the rest\"\" strategy. If your loans were 2%, I might think about it. However, the 4% loans are guaranteed and mandatory expenses; discharging them even in bankruptcy is unlikely. The quicker you pay them off, the sooner you won't have them hanging over your head in case of a \"\"financial setback\"\" (job loss, large expense uncovered by insurance, etc). (One good reason to pay the minimums, though, is to build up a $1K emergency fund. When your debts are paid, then you can increase its size.)\"",
"title": ""
},
{
"docid": "04b4ff02bbc92036b7ca504387576ca4",
"text": "It's not uncommon to have a small penalty if you pre-pay the mortgage in a short time. After all, making the loan isn't free for the bank. But as Nathan says, if a bank is planning to try very hard to stop you from giving them money, there is probably a reason. Try to convince your wife: there is nothing inherently wrong with debt. Like anything, too much can be bad for you, but when debt is deployed wisely -- that is almost always, when it is used to finance a capital asset (an asset that produces value) -- it can be a very good thing.",
"title": ""
},
{
"docid": "ff342f85b4a36275b6e87fb4bcd0db82",
"text": "Mostly to play devil's advocate, I will recommend something different than everybody else. If you can pay off the entire $3,000 balance and are torn between saving that money somewhere that will earn a return and paying it off now to be debt-free, why not a little of both? What if you pay half now and then save the other half and make a big payment at the end. Essentially that becomes two $1,500 payments: one now, one right before the 0% due date. To me, the half up-front significantly reduces the risk, but leaves some cash available to grow.",
"title": ""
},
{
"docid": "ebadaee85f439ee26fd00453824ae25f",
"text": "\"Tricky question. Many car leasing companies like to quote payments by the week or twice a month to make the car sound cheaper to carry. If the lease or loan is calculated such that interest accrues monthly \"\"not in advance\"\" then any payments made prior to the date on which the interest is calculated will reduce the balance and therefore the interest. However, many loans and leases are calculated at the beginning for the whole life of the agreement. In that case, splitting each payment in half doesn't do anything to reduce the interest built in to the payments because the interest is calculated \"\"in advance\"\"\"",
"title": ""
},
{
"docid": "205ee66f682f0c4c21792a31c0241a1e",
"text": "Varying the amount to reflect income during the quarter is entirely legitimate -- consider someone like a salesman whose income is partly driven by commissions, and who therefore can't predict the total. The payments are quarterly precisely so you can base them on actual results. Having said that, I suspect that as long as you show Good Intent they won't quibble if your estimate is off by a few percent. And they'll never complain if you overpay. So it may not be worth the effort to change the payment amount for that last quarter unless the income is very different.",
"title": ""
},
{
"docid": "64067f26ccf64651adeee0503b9cdc36",
"text": "This depends in part on the bank holding your loan and the loan agreement. Some loans will accept partial payments and apply them immediately; some will not accept partial payments at all, and some will accept the payment but hold the funds until the payment is at least your complete payment. You should check your loan agreement to find out how the payment will be processed, as well as how it will be applied. It also is relevant how interest is calculated and accrued; if your interest is a daily rate, then you may save some money this way, but if it's a monthly rate then you wouldn't necessarily. Either way you wouldn't really save very much money; in your particular case you'd be saving $0.15 per month (.025/24 = .001 semimonthly interest rate, $150 paid halfway through the month means you pay .001*150 less interest). Is that $0.15 worth it? Up to you I guess. If you're paying that for 5 year loan, you'll end up ahead $9 at the end of it. Finally, there is a kind of program often offered to new mortgage holders where you pay every two weeks (like your paycheck) and thus 'pay down your mortgage faster by saving on interest', which is true, but it's because you make 26 half payments per year instead of 12 full (or 24 half) payments, not primarily because of particular savings on interest due to timing (and of course the program offerer has to make money somewhere!). Paying an extra 8.33% each year is certainly a good way to pay off your loan faster, but it's not primarily due to the frequency of those payments.",
"title": ""
}
] |
fiqa
|
f679a58b02bb7f58f9b19e6a6c6f6de4
|
moving family deposits away from Greece (possibly in UK)
|
[
{
"docid": "a13a3d909a8a8d15a3b73e158a461de0",
"text": "I can't comment about your tax liability in Greece. You will have to pay tax on interest in the UK. If you are earning massive amounts of interest, unlikely with the current interest policies from Merv, then you might be bumped up a tier. The receiving bank may ask for proof of the source of the funds, particularly if it is a fair chunk of change.",
"title": ""
},
{
"docid": "9ee43db088ef43126ad6e5f9efd1aec9",
"text": "\"I think you can do it as long as those money don't come from illegal activities (money laundering, etc). The only taxes you should pay are on the interest generated by those money while sitting in the UK bank account. Since I suppose you already paid taxes on those money in Greece while you were earning those money. About being audited, in my own experience banks don't ask you much where your money are coming from when you bring money to them, they are very willing to help, and happy. (It's a differnte story when you ask to borrow money). When I opened a bank account in US I did not even have an SSN, but they didn't care much they just took my passport and used the passport number for registering the account. Obviously on the interest generated by the money in the US bank account I had to pay taxes, but it was easy because I simply let the IRS via the bank to withdarw the 27% on the interest generated (not on the capital deposited). I didn't put a huge amount of money there I had to live there for 1 year or some more. Maybe if i deposited a huge amount of money someone would have come to ask me how did I make all those money, but those money were legally generated by me working in Italy before so I didn't have anything to be afraid about. BTW: in Italy I was thinking to move money to a German bank in Germany. The risk of default is a nightmare, something of completly new now in UE compared to the past where each state had its own currency. According to Muro history says that in case of default it happened that some government prevented people from withdrawing money form bank accounts: \"\"Yes, historically governments have shut down banks to prevent people from withdrawing their money in times of crisis. See Argentina circa 2001 or US during Great Depression. The government prevented people from withdrawing their money and people could do nothing while their money rapidly lost value.\"\" but in case Greece prevents people from withdrwaing money, those money are still in EURO, so i'm wondering what would be the effect. I mean would it be fair that a Greek guy can not withdraw is EURO money whilest an Italian guy can withdraw the same currency money in Italy?!\"",
"title": ""
}
] |
[
{
"docid": "22eb978738fd1c98a3ff89e48dc890fb",
"text": "One way of looking at this (just expanding on my comment on Dheer's answer): If the funds were in EUR in Germany already and not in the UK, would you be choosing to move them to the UK (or a GBP denominated bank account) and engage in currency speculation, betting that the pound will improve? If you would... great, that's effectively exactly what you're doing: leave the money in GBP and hope the gamble pays off. But if you wouldn't do that, well you probably shouldn't be leaving the funds in GBP just because they originated there; bring them back to Germany and do whatever you'd do with them there.",
"title": ""
},
{
"docid": "5717dc64a0a7d6b53568555d1bbece24",
"text": "Citizens of India who are not residents to India (have NRI status) are not entitled to have ordinary savings accounts in India. If you have such accounts (e.g. left them behind to support your family while you are abroad), they need to be converted to NRO (NonResident Ordinary) accounts as soon as possible. Your bank will have forms for completion of this process. Any interest that these accounts earn will be taxable income to you in India, and possibly in the U.K. too, though tax treaties (or Double Taxation Avoidance Agreements) generally allow you to claim credit for taxes paid to other countries. Now, with regard to your question, NRIs are entitled to make deposits into NRO accounts as well as NRE (NonResident External) accounts. The differences are that money deposited into an NRE account, though converted to Indian Rupees, can be converted back very easily to foreign currency if need be. However, the re-conversion is at the exchange rate then in effect, and you may well lose that 10% interest earned because of a change in exchange rate. Devaluation of the Indian Rupee as occurred several times in the past 70 years. Once upon a time, it was essentially impossible to take money in an NRO account and convert it to foreign currency, but under the new recently introduced schemes, money in an NRO account can also be converted to foreign currencies, but it needs certification by a CA, and various forms to be filled out, and thus is more hassle. interest earned by the money in an NRE account is not taxable income in India, but is taxable income in the U.K. There is no taxable event (neither in U.K. nor in India) when you change an ordinary savings account held in India into an NRO account, or when you deposit money from abroad into an NRE or NRO account in an Indian bank. What is taxable is the interest that you receive from the Indian bank. In the case of an NRO account, what is deposited into your NRO account is the interest earned less the (Indian) income tax (usually 20%) deducted at the source (TDS) and sent to the Income Tax Authority on your behalf. In the case of an NRE account, the full amount of interest earned is deposited into the NRE account -- no TDS whatsoever. It is your responsibility to declare these amounts to the U.K. income tax authority (HM Revenue?) and pay any taxes due. Finally, you say that you recently moved to the U.K. for a job. If this is a temporary job and you might be back in India very soon, all the above might not be applicable to you since you would not be classified as an NRI at all.",
"title": ""
},
{
"docid": "a84f16ada81922d72884f228646ce307",
"text": "I spoke to HMRC and they said #1 is not allowable but #2 is. They suggested using either their published exchange rates or I could use another source. I suggested the Bank of England spot rates and that was deemed reasonable and allowable.",
"title": ""
},
{
"docid": "3eb8a9c983ff88ae23bb3a03f78f8179",
"text": "Greek bank deposits are backed by the Greek government and by the European Central Bank. So in order to lose money under the insurance limits of 100k euros the ECB would need to fail in which case deposit insurance would be the least of most peoples worries. On the other hand I have no idea how easy or hard it is to get to money from a failed bank in Greece. In the US FDIC insurance will usually have your money available in a couple of days. If there isn't a compelling reason to keep the money in a Greek bank I wouldn't do it.",
"title": ""
},
{
"docid": "f2d5a66526ac8393e16c0a106c845b43",
"text": "Have you tried TransferWise. They offer nice cross currency transfers with really low rates.",
"title": ""
},
{
"docid": "88c461ef9c397b80086de1ac45b49a68",
"text": "I'm not sure I understand what you're trying to say, but in general its pretty simple: She goes to the UK bank and requests a wire transfer, providing your details as a recipient. You then go to your bank, fill the necessary forms for the money-laundaring regulations, you probably also need to pay the taxes on the money to the IRS, and then you have it. If you have 1 million dollars (or is it pounds?), I'm sure you can afford spending several hundreds for a tax attorney to make sure your liabilities are reduced to minimum.",
"title": ""
},
{
"docid": "371c1e838f63884778df632c1758dce0",
"text": "Considering the historical political instability of your nation, real property may have higher risk than normal. In times of political strife, real estate plummets, precisely when the money's needed. At worst, the property may be seized by the next government. Also, keeping the money within the country is even more risky because bank accounts are normally looted by either the entering gov't or exiting one. The safest long run strategy with the most potential for your family is to get the money out into various stable nations with good history of protecting foreign investors such as Switzerland, the United States, and Hong Kong. Once out, the highest expected return can be expected from internationally diversified equities; however, it should be known that the value will be very variant year to year.",
"title": ""
},
{
"docid": "93bd1971ca0c84f2a6edc1cea926be7d",
"text": "Don't worry. The Cyprus situation could only occur because those banks were paying interest rates well above EU market rates, and the government did not tax them at all. Even the one-time 6.75% tax discussed is comparable to e.g. Germany and the Netherlands, if you average over the last 5 years. The simple solution is to just spread your money over multiple banks, with assets at each bank staying below EUR 100.000. There are more than 100 banks large enough that they'll come under ECB supervision this year; you'd be able to squirrel away over 10 million there. (Each branch of the Dutch Rabobank is insured individually, so you could even save 14 million there alone, and they're collectively AAA-rated.) Additionally, those savings will then be backed by more than 10 governments, many of which are still AAA-rated. Once you have to worry about those limits, you should really talk to an independent advisor. Investing in AAA government bonds is also pretty safe. The examples given by littleadv all involve known risky bonds. E.g. Argentina was on a credit watch, and paying 16% interest rates.",
"title": ""
},
{
"docid": "c22ddc6666d604975f4b2b01bdbd3979",
"text": "Given that we live in a world rife with geopolitical risks such as Brexit and potential EU breakup, would you say it's advisable to keep some of cash savings in a foreign currency? Probably not. Primarily because you don't know what will happen in the fallout of these sorts of political shifts. You don't know what will happen to banking treaties between the various countries involved. If you can manage to place funds on deposit in a foreign bank/country in a currency other than your home currency and maintain the deposit insurance in that country and not spend too much exchanging your currency then there probably isn't a downside other than liquidity loss. If you're thinking I'll just wire some whatever currency to some bank in some foreign country in which you have no residency or citizenship consideration without considering deposit insurance just so you might protect some of your money from a possible future event I think you should stay away.",
"title": ""
},
{
"docid": "9fd148c6144907a4ce883f384e211046",
"text": "But Greece is in the EU - therefore the one-armed drug addict has the means to get money from his relatives. Because most of the relatives have an alcohol problem (Spain, Portugal, Italy, France) they turn to their hard-working but slightly naive neighbours (Austria,Germany,Netherlands) for money. They believe that they´ll have to pay for just one last dose of crack cocaine and then the Greeks will kick the habit.",
"title": ""
},
{
"docid": "273ef3ca22682b8150cbe34e9946a2fb",
"text": "The safest financial decisions that you can make in Greece involve getting your money out of Greece. That said, it depends. If the economy is going to implode and you'll be out of the job with devalued savings -- you'll be bankrupt anyway. You didn't mention enough about your situation for anyone to really answer the question. In a high-inflation environment, *if*you have the assets to weather the storm, holding debt on real property and durable goods is a good thing. The key considerations are: If you have the means, times of crisis are great opportunities.",
"title": ""
},
{
"docid": "4fe71042dfbec2d2fe3574a3963d9112",
"text": "I would move some or all of the money. With £30K savings, you have a 20% deposit, whereas you can get a much better mortgage rate with a 40 or 50% deposit. That's true no matter how good/bad your credit rating, and it's possible that with a bad credit rating you may not even be able to get a mortgage with a small deposit. Also, you will almost certainly save significantly more by paying less mortgage interest compared to the interest rates on your savings in the Netherlands. Shop around for a cheap option to transfer money. I had a quick look at Transferwise (no affiliation, they just happen to have a convenient calculator on their website), and the all-in cost for a large one-way transfer seems to be about 0.5%. I think you'll more than make that back in terms of savings on your mortgage. If you intend to move back to the Netherlands at some point, then you are taking some exchange rate risk by moving your savings to the UK - you don't know if it'll be better or worse when you want to transfer money back. But I guess it won't be that soon if you want to buy a house, so I think the risk is probably worthwhile. (I calculated the cost of the transfer by converting €100k into GBP, and then converting the resulting amount back again. That left €99k, so a two-way transfer cost 1% and from that I deduced that a one-way transfer costs roughly 0.5%)",
"title": ""
},
{
"docid": "a316b4e61c79499efab27a0de2c74573",
"text": "I am going to clone an answer from another question that I wrote ;) and refer you to an article in the Wall Street Journal that I read this morning, What's at Stake in the Greek Vote, summarizing the likely outcome of the situation if a Euro exit looks likely after the election: ... we will see a full-fledged bank run. Greek banks would collapse ... The market exchange-rate would likely be two or three drachmas to the euro, which would double or triple the Greek price of imported goods within a few days. Prices of assets, including real-estate assets, would crumble. Those who moved their deposits abroad would be able to buy these assets cheaply, leading to a significant, regressive redistribution of Greek wealth. In short, you'd lose about two-thirds of your savings unless you were storing them somewhere safe from the conversion. The article also predicts difficulty importing goods (other nations will demand to be paid in euro, not drachma) leading to disruption of trade and various supply shortages.",
"title": ""
},
{
"docid": "47a26543206f7468bb70e67639da2474",
"text": "No you will have no problems. It's been fourteen years since I've lived in the UK and I've had no trouble with my UK bank accounts in that time. They have happily mailed me statements and new cards abroad for all that time, and I've deposited cheques by mailing them to the branch. Online banking takes care of almost everything else. The only thing I wasn't able to do from abroad was open a new account, because of anti money-laundering regulations. Even that may be possible if you presented the right kind of ID when you opened the original account - mine predated the regulations. Most UK banks will also offer 'offshore' banking for non-residents in which interest is not deducted at source.",
"title": ""
},
{
"docid": "a409e9ac055ad2bcb8612e19efcef9a2",
"text": "It sounds like you are in great shape, congratulations! Things I would think about in your position: Consider putting 20% down instead of 30% and find a great house that has a key missing modernization, like a kitchen. Then replace the kitchen, which if done right can instantly add that 10% (or more) right back in equity... or stick to your plan... You have earned the luxury of taking your time and doing what's right for you. Think real carefully about location. Here are some ideas based on my experience.",
"title": ""
}
] |
fiqa
|
126330b7dde26018f40680a91429c0d6
|
Strange values in ARM.L price data 1998-2000 from Yahoo
|
[
{
"docid": "fd1c51438c9aaf8e14aa77f9887fc3c7",
"text": "This is just a shot in the dark but it could be intermarket data. If the stock is interlisted and traded on another market exchange that day then the Yahoo Finance data feed might have picked up the data from another market. You'd have to ask Yahoo to explain and they'd have to check their data.",
"title": ""
}
] |
[
{
"docid": "2649f29b989d8e7f895fca5b3d7d7194",
"text": "\"At the bottom of Yahoo! Finance's S & P 500 quote Quotes are real-time for NASDAQ, NYSE, and NYSE MKT. See also delay times for other exchanges. All information provided \"\"as is\"\" for informational purposes only, not intended for trading purposes or advice. Neither Yahoo! nor any of independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. By accessing the Yahoo! site, you agree not to redistribute the information found therein. Fundamental company data provided by Capital IQ. Historical chart data and daily updates provided by Commodity Systems, Inc. (CSI). International historical chart data, daily updates, fund summary, fund performance, dividend data and Morningstar Index data provided by Morningstar, Inc. Orderbook quotes are provided by BATS Exchange. US Financials data provided by Edgar Online and all other Financials provided by Capital IQ. International historical chart data, daily updates, fundAnalyst estimates data provided by Thomson Financial Network. All data povided by Thomson Financial Network is based solely upon research information provided by third party analysts. Yahoo! has not reviewed, and in no way endorses the validity of such data. Yahoo! and ThomsonFN shall not be liable for any actions taken in reliance thereon. Thus, yes there is a DB being accessed that there is likely an agreement between Yahoo! and the providers.\"",
"title": ""
},
{
"docid": "5ff0d2b58a0072ba0922d31010282b2d",
"text": "There are companies who sell data gleaned in aggregate from credit card providers to show how much of what category of product is sold online or offline, but that data is not cheap. 1010data is one such data aggregator we are talking to right now. Haven’t seen pricing yet but I expect 6 figures to access the data",
"title": ""
},
{
"docid": "f70265ed3e89fe16f52b76e56bffb18d",
"text": "It is because 17th was Friday, 18th-19th were weekends and 20th was a holiday on the Toronto Stock Exchange (Family Day). Just to confirm you could have picked up another stock trading on TMX and observed the price movements.",
"title": ""
},
{
"docid": "756e78426f383d7d85ced0fe4ffce165",
"text": "The 15% Alibaba stake was invested in way before Mayer's came on board. It's worth $51.75B right now. Yahoo Japan is an autonomous company, that Yahoo has a 36% stake in, spun off well before Mayer's came on board and that stake is conservatively worth$10B. Yahoo market cap is only $49B right now. If anything, Marissa Mayers tenure just killed off the core value of Yahoo itself to the level that it's a liability and it's asset portfolio is the only thing holding it aloft.",
"title": ""
},
{
"docid": "6d2bbe8026eb8335cb86b52eee7df766",
"text": "\"For the S&P and many other indices (but not the DJIA) the index \"\"price\"\" is just a unitless number that is the result of a complicated formula. It's not a dollar value. So when you divide said number by the earnings/share of the sector, you're again getting just a unitless number that is incomparable to standard P-E ratios. In fact, now that I think about, it kinda makes sense that each sector would have a similar value for the number that you're computing, since each sector's index formula is presumably written to make all the index \"\"price\"\"s look similar to consumers.\"",
"title": ""
},
{
"docid": "f4f42a26d035479427867cc4eb653fc4",
"text": "Two reasons why I think that's irrelevant: First, if it was on 3/31/2012 (two other sources say it was actually 4/3/2012), why the big jump two trading days later? Second, the stock popped up from $3.10 to $4.11, then over the next several trading days fell right back to $3.12. If this were about the intrinsic value of the company, I'd expect the stock to retain some value.",
"title": ""
},
{
"docid": "9d9cfa352ce07f9aa89d06d2a710373e",
"text": "I don't see it in any of the exchange feeds I've gone through, including the SIPs. Not sure if there's something wrong with Nasdaq Last Sale (I don't have that feed) but it should be putting out the exact same data as ITCH.",
"title": ""
},
{
"docid": "3ae22710c80a01cf0fa6319f8862dcff",
"text": "Apparent data-feed issues coming out of NASDAQ in the after hours market. Look at MSFT, AMZN, AAPL, heck even Sears. Funny thing though, is that you see traces of irregular prices during the active session around 10:20am on stocks like GOOG.",
"title": ""
},
{
"docid": "51b119949722b2a428b636acee721e2d",
"text": "Look at the 'as of'. Google's as of is 11:27 whil Yahoo's is 11:19. Given the shape of the Google curve, it looks to me that Yahoo's may well drop that much in the next 8 minutes. In fact, looking at it now, Yahoo's algorithm showed it as about 30 at 11:24, before going back up again some. It may not have been identical to Google's, but it was certainly close.",
"title": ""
},
{
"docid": "1ca4aa43255f1b1f575ff0e602651839",
"text": "\"Remember that in most news outlets journalists do not get to pick the titles of their articles. That's up to the editor. So even though the article was primarily about ETFs, the reporter made the mistake of including some tangential references to mutual funds. The editor then saw that the article talked about ETFs and mutual funds and -- knowing even less about the subject matter than the reporter, but recognizing that more readers' eyeballs would be attracted to a headline about mutual funds than to a headline about ETFs -- went with the \"\"shocking\"\" headline about the former. In any case, as you already pointed out, ETFs need to know their value throughout the day, as do the investors in that ETF. Even momentary outages of price sources can be disastrous. Although mutual funds do not generally make transactions throughout the day, and fund investors are not typically interested in the fund's NAV more than once per day, the fund managers don't just sit around all day doing nothing and then press a couple buttons before the market closes. They do watch their NAV very closely during the day and think very carefully about which buttons to press at the end of the day. If their source of stock price data goes offline, then they're impacted almost as severely as -- if less visibly than -- an ETF. Asking Yahoo for prices seems straightforward, but (1) you get what you pay for, and (2) these fund companies are built on massive automated infrastructures that expect to receive their data from a certain source in a certain way at a certain time. (And they pay a lot of money in order to be able to expect that.) It would be quite difficult to just feed in manual data, although in the end I suspect some of these companies did just that. Either they fell back to a secondary data supplier, or they manually constructed datasets for their programs to consume.\"",
"title": ""
},
{
"docid": "ff68b09fef2ab83c41d8cf7759d12c2c",
"text": "The point of that question is to test if the user can connect shares and stock price. However, that being said yeah, you're right. Probably gives off the impression that it's a bit elementary. I'll look into changing it asap.",
"title": ""
},
{
"docid": "6f8f4f0e86dfd43dd70b7d48f6ee9d1f",
"text": "A number of places. First, fast and cheap, you can probably get this from EODData.com, as part of a historical index price download -- they have good customer service in my experience and will likely confirm it for you before you buy. Any number of other providers can get it for you too. Likely Capital IQ, Bloomberg, and other professional solutions. I checked a number of free sites, and Market Watch was the only that had a longer history than a few months.",
"title": ""
},
{
"docid": "ea4549ecee88d0ebf51be242700a3fa2",
"text": "Am I missing something or is the author? EUP5 USP5 SUP5 PUS5 EDIT: Its not just currency pairs either, 5DEL; EU5L; 5UKL; EU5S; 5DES. Unless I misunderstood something, the authors worst nightmare has already arrived in Europe.",
"title": ""
},
{
"docid": "57fb897c059fe117bf76781c5306adb8",
"text": "\"Thanks for the response. I am using WRDS database and we are currently filtering through various variables like operating income, free cash flow etc. Main issue right now is that the database seems to only go up to 2015...is there a similar database that has 2016 info? filtering out the \"\"recent equity issuance or M&A activity exceeding 10% of total assets\"\" is another story, namely, how can I identify M&A activity? I suppose we can filter it with algorithm stating if company's equity suddenly jumps 10% or more, it get's flagged\"",
"title": ""
},
{
"docid": "79d5438b0c557a93e7157a96506906bf",
"text": "I work on a buy-side firm, so I know how these small data issues can drive us crazy. Hope my answer below can help you: Reason for price difference: 1. Vendor and data source Basically, data providers such as Google and Yahoo redistribute EOD data by aggregating data from their vendors. Although the raw data is taken from the same exchanges, different vendors tend to collect them through different trading platforms. For example, Yahoo, is getting stock data from Hemscott (which was acquired by Morningstar), which is not the most accurate source of EOD stocks. Google gets data from Deutsche Börse. To make the process more complicated, each vendor can choose to get EOD data from another EOD data provider or the exchange itself, or they can produce their own open, high, low, close and volume from the actual trade tick-data, and these data may come from any exchanges. 2. Price Adjustment For equities data, the re-distributor usually adjusts the raw data by applying certain customized procedures. This includes adjustment for corporate actions, such as dividends and splits. For futures data, rolling is required, and back-ward and for-warding rolling can be chosen. Different adjustment methods can lead to different price display. 3. Extended trading hours Along with the growth of electronic trading, many market tends to trade during extended hours, such as pre-open and post-close trading periods. Futures and FX markets even trade around the clock. This leads to another freedom in price reporting: whether to include the price movement during the extended trading hours. Conclusion To cross-verify the true price, we should always check the price from the Exchange where the asset is actually traded. Given the convenience of getting EOD data nowadays, this task should be easy to achieve. In fact, for professional traders and investors alike, they will never reply price on free providers such as Yahoo and Google, they will most likely choose Bloomberg, Reuters, etc. However, for personal use, Yahoo and Google should both be good choices, and the difference is small enough to ignore.",
"title": ""
}
] |
fiqa
|
6bf952ffb92611db1eea36be0ca9a497
|
How to calculate the closing price percentage change for a stock?
|
[
{
"docid": "25fc959e1028b1ec366771661e75cb64",
"text": "The previous day's close on Thursday 10th October was 5,000.00 The close on Friday 11th October is 5,025.92 So the gain on Friday was 25.92 (5025.92 - 5000) or 0.52% (25.92/5000 x 100%). No mystery!",
"title": ""
}
] |
[
{
"docid": "2c600e5d7c6579a79832cc6565ae570f",
"text": "\"Edited: Pub 550 says 30 days before or after so the example is ok - but still a gain by average share basis. On sale your basis is likely defaulted to \"\"average price\"\" (in the example 9.67 so there was a gain selling at 10), but can be named shares at your election to your brokerage, and supported by record keeping. A Pub 550 wash might be buy 2000 @ 10 with basis 20000, sell 1000 @9 (nominally a loss of 1000 for now and remaining basis 10000), buy 1000 @ 8 within 30 days. Because of the wash sale rule the basis is 10000+8000 paid + 1000 disallowed loss from wash sale with a final position of 2000 shares at 19000 basis. I think I have the link at the example: http://www.irs.gov/publications/p550/ch04.html#en_US_2014_publink100010601\"",
"title": ""
},
{
"docid": "a8121c431651f7b2b2fdc9de6f5f909e",
"text": "Try to find the P/E ratio of the Company and then Multiply it with last E.P.S, this calculation gives the Fundamental Value of the share, anything higher than this Value is not acceptable and Vice versa.",
"title": ""
},
{
"docid": "9443fc7e998ed1319ccfc06ef4babaf3",
"text": "\"The question mentions a trailing stop. A trailing stop is a type of stop loss order. It allows you to protect your profit on the stock, while \"\"keeping you in the stock\"\". A trailing stop is specified as a percentage of market price e.g. you might want to set a trailing stop at 5%, or 10% below the market price. A trailing stop goes up along with the market price, but if the market price drops it doesn't move down too. The idea is that it is there to \"\"catch\"\" your profit, if the market suddenly moves quickly against you. There is a nice explanation of how that works in the section titled Trailing Stops here. (The URL for the page, \"\"Tailing Stops\"\" is misleading, and a typo, I suspect.)\"",
"title": ""
},
{
"docid": "73143af4a4f1f0f7a3f85b82cb901a9f",
"text": "\"Their algorithm may be different (and proprietary), but how I would to it is to assume that daily changes in the stock are distributed normally (meaning the probability distribution is a \"\"bell curve\"\" - the green area in your chart). I would then calculate the average and standard deviation (volatility) of historical returns to determine the center and width of the bell curve (calibrating it to expected returns and implied volaility based on option prices), then use standard formulas for lognormal distributions to calculate the probability of the price exceeding the strike price. So there are many assumptions involved, and in the end it's just a probability, so there's no way to know if it's right or wrong - either the stock will cross the strike or it won't.\"",
"title": ""
},
{
"docid": "b0f869c36cbaef461e171d52dc5b2204",
"text": "What you're referring to is the yield. The issue with these sorts of calculations is that the dividend isn't guaranteed until it's declared. It may have paid the quarterly dividend like clockwork for the last decade, that does not guarantee it will pay this quarter. Regarding question number 2. Yield is generally an after the fact calculation. Dividends are paid out of current or retained earnings. If the company becomes hot and the stock price doubles, but earnings are relatively similar, the dividend will not be doubled to maintain the prior yield; the yield will instead be halved because the dividend per share was made more expensive to attain due to the increased share price. As for the calculation, obviously your yield will likely vary from the yield published on services like Google and Yahoo finance. The variation is strictly based on the price you paid for the share. Dividend per share is a declared amount. Assuming a $10 share paying a quarterly dividend of $0.25 your yield is: Now figure that you paid $8.75 for the share. Now the way dividends are allocated to shareholders depends on dates published when the dividend is declared. The day you purchase the share, the day your transaction clears etc are all vital to being paid a particular dividend. Here's a link to the SEC with related information: https://www.sec.gov/answers/dividen.htm I suppose it goes without saying but, historical dividend payments should not be your sole evaluation criteria. Personally, I would be extremely wary of a company paying a 40% dividend ($1 quarterly dividend on a $10 stock), it's very possible that in your example bar corp is a more sound investment. Additionally, this has really nothing to do with P/E (price/earnings) ratios.",
"title": ""
},
{
"docid": "cf0a0630c49827832045707c9e6dd2bf",
"text": "\"What you are looking for is an indicator called the \"\"Rate of Change (Price)\"\". It provides a rolling % change in the price over the period you have chosen. Below is an example showing a price chart over the last 6 months with a 100 day Rate of Change indicator below the price chart.\"",
"title": ""
},
{
"docid": "e9149538d610725a2eac924e1aea37af",
"text": "As I write this, the NASDAQ Composite is at 2790.00, down 6.14 points from yesterday. To calculate the percentage, you take 6.14 and divide by yesterday's close of 2796.14 to yield 0.22%. In your example, if SPY drops from 133.68 to 133.32, you use the difference of -0.36 and divide by the original, i.e. -0.36/133.68 = -0.27%. SPY is an ETF which you can invest in that tracks the S&P 500 index. Ideally, the index would have dropped the same percentage as SPY, but the points would be different (~10x higher). To answer your question about how one qualifies a point, it completely depends on the index being discussed. For example, the S&P 500 is a market-capitalization weighted index of the common stock of 500 large-cap US public companies. It is as if you owned every share of each of the 500 companies, then divide by some large constant to create a number that's easily understood mentally (i.e. 1330). The NASDAQ Composite used the same methodology but includes practically all stocks listed on the NASDAQ. Meanwhile, the Dow Jones Industrial Average is a price-weighted index of 30 large-cap companies. It's final value is modified using a divisor known as the Dow Divisor, which accounts for stock splits and similar events that have occurred since a stock has joined the index. Thus, points when referring to an index do not typically represent dollars. Rather, they serve as a quantitative measure of how the market is doing based on the performance of the index constituents. ETFs like SPY add a layer of abstraction by creating an investible vehicle that ideally tracks the value of the underlying index directly. Finally, neither price nor index value is related to volume. Volume is a raw measurement of the total number of shares traded for a given stock or the aggregate for a given exchange. Hope this helps!",
"title": ""
},
{
"docid": "f89cf25648c78c059f612da6c62af257",
"text": "Simple, there is no magic price adjustment after sales - why do you expect the stock price to change? The listed price of a stock is what someone was willing to pay for it in the last deal that was concluded. If any amount of stock changes ownership, this might have the effect that other people are willing to buy it for a higher price - or not. It is solely in the next buyer's decision what he is willing to pay. Example: if you think Apple stocks are worth 500$ a piece, and I buy a million of them, you might still think they are worth 500$. Or you might see this as a reason that they are worth 505$ now.",
"title": ""
},
{
"docid": "41d16faa39889d7deb9d94d194aa8873",
"text": "It helps to put the numbers in terms of an asset. Say a bottle of wine costs 10 dollars, but the price rises to 20 dollars a year later. The price has risen 100%, and your dollars have lost value. Whereas your ten used to be worth 100% of the price of bottle of wine, they now are worth 50% of the risen price of a bottle of wine so they've lost around 50% of their value. Divide the old price by the new inflated price to measure proportionally how much the old price is of the new price. 10 divided by 20 is 1/2 or .50 or 50%. You can then subtract the old price from the new in proportional terms to find how much value you've lost. 1 minus 1/2 or 1.00 minus .50 or 100% minus 50%.",
"title": ""
},
{
"docid": "4453c3be094df6db2bceddd7bde5d4fc",
"text": "With your numbers, look at it this way - You borrowed $50. When the stock is $100, you are at 50% margin. What's most important, is that there's margin interest charged, so the amount owed will increase regardless of the stock price. When calculating your return or loss, the interest has to be accounted for or your numbers will be wrong. For a small investor, margin rates can run high, and often, will offset much of your potential gain. What good is a $100 gain if you paid $125 in margin interest?",
"title": ""
},
{
"docid": "1e090411bf34d3e1a21c664640f3d881",
"text": "Graphs are nothing but a representation of data. Every time a trade is made, a point is plotted on the graph. After points are plotted, they are joined in order to represent the data in a graphical format. Think about it this way. 1.) Walmart shuts at 12 AM. 2.)Walmart is selling almonds at $10 a pound. 3.) Walmart says that the price is going to reduce to $9 effective tomorrow. 4.) You are inside the store buying almonds at 11:59 PM. 5.) Till you make your way up to the counter, it is already 12:01 AM, so the store is technically shut. 6.) However, they allow you to purchase the almonds since you were already in there. 7.) You purchase the almonds at $9 since the day has changed. 8.) So you have made a trade and it will reflect as a point on the graph. 9.) When those points are joined, the curves on the graph will be created. 10.) The data source is Walmart's system as it reflects the sale to you. ( In your case the NYSE exchange records this trade made). Buying a stock is just like buying almonds. There has to be a buyer. There has to be a seller. There has to be a price to which both agree. As soon as all these conditions are met, and the trade is made, it is reflected on the graph. The only difference between the graphs from 9 AM-4 PM, and 4 PM-9 AM is the time. The trade has happened regardless and NYSE(Or any other stock exchange) has recorded it! The graph is just made from that data. Cheers.",
"title": ""
},
{
"docid": "63d965f32d4308863997d8eb23a05539",
"text": "If one wants to have a bound on the loss percentages that are acceptable, this is would be a way to enforce that. For example, suppose someone wants to have a 5% stop-loss but doesn't want this to be worse than 10% as if the stock goes down more than 10% then the sell shouldn't happen. Thus, if the stock opened in a gap down 15% one day, this triggers the stop-loss and would exit at too low of a price as the gap was quite high as I wonder how familiar are you with how much a stock's price could change that makes the prices not be as continuous as one would think. At least this would be my thinking on a volatile stock where one may want to try to limit losses if the stock does fall within a specific range.",
"title": ""
},
{
"docid": "7af4f32798568d7e60f0dbc247e02a37",
"text": "The price-earnings ratio is calculated as the market value per share divided by the earnings per share over the past 12 months. In your example, you state that the company earned $0.35 over the past quarter. That is insufficient to calculate the price-earnings ratio, and probably why the PE is just given as 20. So, if you have transcribed the formula correctly, the calculation given the numbers in your example would be: 0.35 * 4 * 20 = $28.00 As to CVRR, I'm not sure your PE is correct. According to Yahoo, the PE for CVRR is 3.92 at the time of writing, not 10.54. Using the formula above, this would lead to: 2.3 * 4 * 3.92 = $36.06 That stock has a 52-week high of $35.98, so $36.06 is not laughably unrealistic. I'm more than a little dubious of the validity of that formula, however, and urge you not to base your investing decisions on it.",
"title": ""
},
{
"docid": "1cd39845c4506ace1ae07aecdfa65a9c",
"text": "Opening - is the price at which the first trade gets executed at the start of the trading day (or trading period). High - is the highest price the stock is traded at during the day (or trading period). Low - is the lowest price the stock is traded at during the day (or trading period). Closing - is the price at which the last trade gets executed at the end of the trading day (or trading period). Volume - is the amount of shares that get traded during the trading day (or trading period). For example, if you bought 1000 shares during the day and another 9 people also bought 1000 shares each, then the trading volume for the day would be 10 x 1000 = 10,000.",
"title": ""
},
{
"docid": "f535a0d7cc0538b79c889db8e26ef801",
"text": "Stock price = Earning per share * P/E Ratio. Most of the time you will see in a listing the Stock price and the P/E ration. The calculation of the EPS is left as an exercise for the student Investor.",
"title": ""
}
] |
fiqa
|
95c77b8275d36794faf6145efc65ad2c
|
How do I buy bundled insurance policies?
|
[
{
"docid": "a2f0b4e0345db20d3607499f4a1ebc64",
"text": "You have 3 companies now that you work with. I would start there. Ask one of them to show you what would happen if you bought the other two policies from them. This may not be something that they will show via the quotes generated on the web page. So you would be better off talking to a person who can generate a quote with that additional information. Make sure that you are comparing exact matches for the limits and options for the policies. Once you have done that with the first then do the same for the other two. I would have to dig into my policy bills for life insurance, but I do know that the bills for the home and auto insurance do show exactly how much I am saving by having multiple polices.",
"title": ""
}
] |
[
{
"docid": "0d1e91dd9b70da76f6ad1b4bb1a86ab0",
"text": "Personally I solve this by saving enough liquid capital (aka checking and savings) to cover pretty much everything for six months. But this is a bad habit. A better approach is to use budget tracking software to make virtual savings accounts and place payments every paycheck into them, in step with your budget. The biggest challenge you'll likely face is the initial implementation; if you're saving up for a semi-annual car insurance premium and you've got two months left, that's gonna make things difficult. In the best case scenario you already have a savings account, which you reapportion among your various lumpy expenses. This does mean you need to plan when it is you will actually buy that shiny new Macbook Pro, and stick to it for a number of months. Much more difficult than buying on credit. Especially since these retailers hate dealing in cash.",
"title": ""
},
{
"docid": "aa1fd4c1ea9ab614af95103a1847a75c",
"text": "Disclosure: I am working for an aggregation startup business called Brokerchooser, that is matching the needs of clients to the right online broker. FxPro and similar brokers are rather CFD/FX brokers. If you want to trade stocks you have to find a broker who is registered member of an exchange like LSE. Long list: http://www.londonstockexchange.com/exchange/traders-and-brokers/membership/member-firm-directory/member-firm-directory-search.html From the brokers we have tested at Brokerchooser.com I would suggest:",
"title": ""
},
{
"docid": "2fad58094dff5fc338f65e7c6a7e0b9c",
"text": "This depends on the jurisdiction, but such companies are typically subject to regulations (and audits) that require them to keep the customers' accumulated premiums very strictly separated from the company's own assets, liabilities and expenses. Additionally, they are typically only allowed to invest the capital in very safe things like government bonds. So, unless something truly catastrophic happens (like the US government defaulting on its bonds) or people in the company break the regulations (which would invovle all kinds of serious crimes and require complicity or complete failure of the auditors), your premiums and the contractual obligation to you would still be there, and would be absorbed by a different insurance company that takes over the defunct company's business. Realistically, what all this means is that insurance companies never go bankrupt; if they do badly, they are typically bought up by a competitor long before things get that bad.",
"title": ""
},
{
"docid": "fa2988eabe7f775dbbabdcf23c5e69e3",
"text": "\"Traditional insurance agent guy here. There is no right answer in my opinion because your individual needs cannot be generalized. There are a variety of factors that influence the price charged to you including but not limited to your past claims history, geographic location, credit profile, and the carrier's book of business itself. This is just a small sampling, in reality their pricing calculations may be far more complicated. The point is there is no one-size-fits all carrier. My agency works with 15 different carriers. Sometimes we can offer the best combination of coverage and cost to a prospective client that beats their existing coverage; other times we are nowhere close to being competitive. The most important thing you can do is find a person/site/company you can trust and one that does not take advantage of you. Insurance policies are complex and \"\"getting the best deal\"\" may oftentimes mean lessening coverage without realizing it. So I would recommend using whatever service channel (online, phone, local agent) that's most convenient and consultative for you. And otherwise, shop around once every year or two to make sure you're still getting the most for your money.\"",
"title": ""
},
{
"docid": "5a8fb59d672228ef0294113ad9e05b3d",
"text": "\"Insurance is bought for peace of mind and to divert disaster. Diverting disaster is a good/great thing. If your house burned down, if someone hit your car, or some other devastating event (think medical) happened that required a more allocation than you could afford the series of issues may snowball and cause you to lose a far greater amount of money than the initial incident. This could be in the form of losing work time, losing a job, having to buy transportation quickly paying a premium, having to incur high rate debt and so on. For the middle income and lower classes medical, house, and medical insurance certainly falls into these categories. Also why a lot of states have buyout options on auto insurance (some will let you drive without insurance by proving bonding up to 250K. Now the other insurance as I have alluded to is for peace of mind mainly. This is your laptop insurance, vacation insurance and so on. The premise of these insurances is that no matter what happens you can get back to \"\"even\"\" by paying just a little extra. However what other answers have failed to clarify is the idea of insurance. It is an agreement that you will pay a company money right now. And then if a certain set of events happen, you follow their guidelines, they are still in business, they still have the same protocols, and so on that you will get some benefit when something \"\"disadvantageous\"\" happens to you. We buy insurance because we think we can snap our fingers and life will be back to normal. For bigger things like medical, home, and auto there are more regulations but I could get 1000 comments on people getting screwed over by their insurance companies. For smaller things, almost all insurance is outsourced to a 3rd party not affiliated legally with a business. Therefore if the costs are too high they can simply go under, and if the costs are low they continue helping the consumer (that doesn't need help). So we buy insurance divert catastrophe or because we have fallen for the insurance sales pitch. And an easy way to get around the sales pitch - as the person selling you the insurance if you can have their name and info and they will be personally liable if the insurance company fails their end of the bargain.\"",
"title": ""
},
{
"docid": "fc0e09fc1b6e0a85014e9fdbe99facf9",
"text": "\"Short answer: Yes. Longer answer: There may or may not be a medical exam, or a physical, as with a life insurance policy. But your medical history is considered in the underwriting process. Disclosure: I once worked as a financial advisor, and held an insurance license for life, annuity and long-term care. It has been 8 years since I left that line of work. There are some \"\"knock-out\"\" questions that the salesperson is encouraged/required to ask just to see if there would be anything obvious that would disqualify you. The only one I can remember from that list is COPD. If you have that as a diagnosis in your personal medical history, the instruction to the salesperson is to not waste anybody's time. There were several other conditions, all with very long technical names. If you're not disqualified by the no-brainer knock-out questions, your medical history will likely be included in the underwriting process. Not every serious illness is an automatic disqualifier, including cancer. It may cause your premiums to be a little higher, as the underwriters will take a closer look and increase your risk profile due to the history. There may be some group policies where underwriting is limited or not required at all. As with all group insurance policies, the healthy members in the group are paying more in premiums than they otherwise would, in order to \"\"subsidize\"\" the premiums of the less healthy members. It's almost always cheaper to get your own personal policy unless you know you wouldn't qualify for it. Then, the group policy might be your only chance for some coverage. Age 60-62 is statistically the best time to purchase LTCI. On average, if you make it to 62, you have a very high chance of making it to 90. (These were the numbers available to me 8 years ago when I was in the business.) After 62, the prices go up a lot faster with each year of age. I can't answer with anything helpful about your spouse's specific situation. It would be good to talk to a licensed insurance broker about it (not a salesman from a specific company). The broker is not necessarily bound to disclose personal details you might have shared with them. The company salesman would be obligated to disclose it to their company.\"",
"title": ""
},
{
"docid": "cd9b76c3ca143af260f9aa3290c8779a",
"text": "\"These policies are usually called dread disease policies or critical illness insurance, and they normally aren't a good deal. Furthermore, with the passage of the Affordable Care Act, such policies may become less common or disappear entirely. These policies aren't a great deal because of the effects of adverse selection and asymmetric information, two closely related concepts in the economics of insurance. When you purchase an insurance policy, the insurance company charges you a premium based on your average risk level or the average risk level of your risk pool, e.g. you and your fellow employees, if you get insurance through your employer. For health insurance, this average risk level is the average probability that you'll incur healthcare costs. The insurer's actuaries calculate this probability from numerous factors, like your age, sex, current health, socioeconomic status, etc. Asymmetric information exists when you know more about this probability than the insurance company does. For example, you may look like a relatively low-risk individual on paper, but little does the insurance company know, BASE jumping is one of your hobbies. Because you know about your hobby and the insurance company doesn't, you secretly know that your risk of incurring healthcare expenses is much higher than the insurance company expects. If the insurance company knew this, they would like to charge you a much higher premium, if they could. However, they can't, because a) they don't know about your hobby, and b) the premium may be decided for the entire group/risk pool, so they can't increase it simply because a few individuals in the group have higher risk levels. Adverse selection occurs when individuals with higher risk levels are more likely to buy insurance. You may decide that because of your dangerous hobby, you do want to take advantage of your employer's healthcare plan. Unfortunately for the insurance company, they can't adjust their price accordingly. Adverse selection is a major factor in insurance markets, so I didn't go into much detail here (too much detail is probably off-topic anyway). I can point you towards more resources on the topic if you're interested. However, the situation is different when you purchase a dread disease policy. By expressing interest in such a specific policy, e.g. a cancer insurance policy, you signal to the insurance company that you feel you have a higher risk of facing that disease. In your case, you're signaling to the insurance company that your family probably has a history of cancer or that you have habits that make you more susceptible to it, and your premiums will be higher to compensate the insurance company for bearing this additional risk. Since the insurance company already has a rough estimate of your chances of developing that illness, they may already know that you have a higher chance of facing it. However, when you express interest in a disease-specific policy, this signals the existence of asymmetric information (your family history or other habits), and the insurer assumes you know something they don't that elevates your risk level of that specific disease. Since these policies are optional policies often sold as riders to existing policies, the insurance company has more flexibility in pricing them. They can charge you a higher premium because you've signaled to the insurer that you have a significantly above-average risk of contracting a specific disease*. Also, the insurer can do a much better job of estimating the expected costs of insuring you since they need only focus on data surrounding one disease. The policy will be priced accordingly, i.e. in such a way that isn't necessarily beneficial to you. Furthermore, most dread disease policies aren't guaranteed renewable, which means that even if you are willing to keep paying the premiums, the insurance company doesn't have to keep insuring you. As your risk of developing the specific disease grows, e.g. with age, it may pass the point where insuring you is no longer an acceptable risk. The company expects you to develop the illness with the next few renewal cycles, so they decide not to renew your policy. The end result? The insurance company has the premiums you've paid previously, but you no longer have coverage for that illness, and ex post, you've suffered a net loss with no reduction of risk for the foreseeable future. Dread disease policies are changing under the Affordable Care Act. According to healthcare.gov Starting in 2014, ... all new health insurance plans sold to individuals and small businesses, and plans purchased in the new Affordable Insurance Exchanges, must include a range of essential health benefits. The essential health benefits include quite a few areas of coverage; since this applies to policies offered on the state insurance exchanges and those offered outside of it, dread disease policies wouldn't seem to qualify. For more information, you can read the linked page on healthcare.gov or see Section 1302, subsection b), titled \"\"Essential Health Benefits Requirements\"\" in the law itself (p87). I imagine more details will be available on a state-by-state basis through 2014 and into 2015. One legal source (see the discussion on p24) states that: whatever else the ACA does with excepted benefit policies, including specific disease and fixed dollar indemnity policies, it does explicitly provide that such policies do not count as minimum essential coverage for purposes of the ACA This seems pretty straightforward; a dread disease (or \"\"specific disease\"\" policy, as it's referred to in the article), won't count towards the minimum essential requirements. This may not be an issue for you, but for others, it's important to understand that you'll still need to pay the penalty if you only purchase one of these policies. The ACA spells this out in Section 5000(f) (see p316, which states that \"\"excepted benefit policies\"\" are excluded and defines them using the definition in the Public Health Service Act (PHSA). **The PSHA specifically includes \"\"Coverage only for a specified disease or illness\"\" in their definition of \"\"excepted benefit policies\"\" (see section 2791(b), paragraph 3A on p82, so it's probably a safe bet that such policies won't count towards the minimum. Also, as Rick pointed out in the comments, the Affordable Care Act also forbids lifetime limits on most insurance plans, so assuming you find an insurance policy with adequate coverage for the specific disease you're worried about, such a plan should cover the related expenses without a lifetime limit. Deductibles, annual limits, and other factors may complicate this somewhat. In the section about lifetime limits (Sec. 2711, p2), the Affordable Care Act states that: A group health plan and a health insurance issuer offering group or individual health insurance coverage may not establish ... lifetime limits on the dollar value of benefits for any participant or beneficiary. However, the law states in the next paragraph that the preceding statement should not be construed to prevent a group health plan or health insurance coverage from placing annual or lifetime per beneficiary limits on specific covered benefits that are not essential health benefits under section 1302(b) of the Patient Protection and Affordable Care Act, to the extent that such limits are otherwise permitted under Federal or State law The section also contains similarly vague caveats about annual limits, so the actual details and limits may vary once individual states finalize their policies. The law is intentionally vague because the vast majority of the law's implementation is left up to individual states. Furthermore, certain parts of the law specify actions involving the Secretary of Health and Human Services, so these may require further codification in the future too. You should still read the fine print of any insurance policy you buy and evaluate it as you would any contract (see the next section). Since a dread disease policy probably isn't a good idea, you'll probably want to evaluate the healthcare plans offered by your employer or individual plans offered in your area (if your employer doesn't offer coverage). I've tried to include the basic points offered in these articles to give you or future visitors some idea of where to start. These points may change once the Affordable Care Act is implemented, so I'll try to keep them as general as possible. Services - Above and beyond the minimum essential requirements, what services does the plan offer? Are these services a good match for you and/or your family, or do they add unnecessary cost to the premium with little or no benefit? For example, my health insurance plan offers basic dental coverage with a small co-pay, so I don't need a separate dental plan, even though my employer offers one. Choice - What doctors, clinics, hospitals, etc. are preferred providers under your plan? Do you need a referral from your primary care doctor to see a specialist, or can you find one on your own? Are the preferred providers convenient for you? In my first year of college (about five years ago), my student health insurance only covered a few hospitals that were in the suburbs and somewhat difficult for me to reach. This is something to keep in mind, depending on where you live. Costs - This is a major one, obviously. Deductibles, copays, maximum cost limits over a year or your lifetime, out-of-network costs, etc. are all variables to consider. There are other factors, but since I don't have a family, other members of the site can provide more detailed information about what to look for in family policies. In place of a dread disease policy, you're likely better off purchasing a comprehensive health insurance policy, perhaps a catastrophic coverage policy with a high deductible that will kick in once you've exhausted your standard insurance policy. However, this may be a moot point since the passage of the Affordable Care Act may significantly reduce the availability of such policies anyway.\"",
"title": ""
},
{
"docid": "418e72db8fd3fcb8b6ea9c7cd9579030",
"text": "\"This is going to vary from insurer to insurer, and likely year to year. Typically an insurer will set what it calls the guaranteed rate of return for whole life policies and will allow you to take loans against the cash value of your policy at some adjustment to that rate. Also typically you pay the interest back to yourself less some small administrative fee. Some insurers have whole life policies called something along the lines of an \"\"accelerated cash value\"\" policy or a \"\"high early cash value\"\" policy, stick to these ones. The commission structure is less favorable to the agent/broker but much more of your premium is recognized as cash value earlier. The benefit (for lack of a better word) to taking a loan against your own cash value over taking a loan from a bank is the severely reduced process. There's no underwriting for your loan like there would be from a bank. If you're laid off maybe you can't get a loan from a bank but you can scoop some money out of your policy on a loan basis or alternatively you can just surrender the policy and take the accrued cash value. Many people will poo-poo the value of whole life, but fact of the matter is your underwriting status can change in the course of your life and it's possible that in the future you won't be able to buy any life insurance. There's nothing wrong with having something permanent to supplement your larger term policies. Personally, I view diversification as having money in a lot of different places. This strategy is probably not as efficient as it could, but I don't like the idea of having all my eggs in one basket. I have cash in a lock box at home, cash savings, CDs, a personal loan portfolio, bitcoins, index funds, individual stocks, commodity etfs, and bond funds spread in traditional 401(k), ROTH IRA and regular taxable accounts spread out to 6 different institutions. I don't personally own any whole life, but I'll probably buy a small policy before my next 6-month birthday; I might as well put some money there too. All of this is to say, do not put all of your money in a whole life policy, and do not buy all of your life insurance needs via whole life.\"",
"title": ""
},
{
"docid": "c730a794b925cb372bb786761aaee5ff",
"text": "There is such a thing as a buy-write, which is buying a stock and writing a (covered) call simultaneously. But as far as I know brokers charge two commissions, one stock trade and one options trade so you're not going to save on commissions.",
"title": ""
},
{
"docid": "a7d82cccee4da724a6800ad82c18e73c",
"text": "For example, it is not allowed to buy flood insurance at peak flood season and then cancel it when it is over. They are not offering this right now. So it would be interesting to see if they offer this and how they offer this. For example, you can insure your camera for a week when you are going on vacation. They call it on-demand insurance. They segment Trov is targeting consumer electronics. More often people don't take insurance in this segment as the insurance cost is high and benefits low. However if going on vacation, most are afraid of loosing / damaging equipments. Generally although we are afraid, most often nothing happens. It is this segment; you make the insurance cheap and easy to buy and create a new segment. Insurance fraud detection is an important part of insurance process such that insurance companies allocate a lot of resources to detect improper insurance claims. The website does not mention how they process claims. Although it looks easy, they may have a more stringent process. For example what is stopping me from buying an insurance after event; i.e. break my phone Monday, buy insurance on Monday and make a claim on Tuesday saying the phone broke on Tuesday.",
"title": ""
},
{
"docid": "fceae85b48ddff092e9d08092eecabbd",
"text": "You need to see that prospectus. I just met with some potential new clients today that wanted me to take a look at their investments. Turns out they had two separate annuities. One was a variable annuity with Allianz. The other was with some company named Midland Insurance (can't remember the whole name). Turns out the Allianz VA has a 10 year surrender contract and the Midland has a 14 year contract. 14 years!!! They are currently in year 7 and if they need any money (I'm hoping they at least have a 10% free withdrawal) they will pay 6% surrender on the Allianz and a 15% surrender on the other. Ironically enough, they guy who sold this to them is now in jail. No joke.",
"title": ""
},
{
"docid": "b97679e455babf6f40d25eba1bd3ad0c",
"text": "The issuer of the service contract is making money. DO NOT buy these contracts. Self insure over your life time 40/60 years and you will save money.",
"title": ""
},
{
"docid": "1370c5e19e8cb80afba418a4da199a96",
"text": "Not to pick your words apart, but I'm used to the word laddering as used with CDs or bonds, where one buys a new say, 7 year duration each year with old money coming due and, in effect, is always earning the longer term rate, while still having new funds available each year. So. The article you link suggests that there's money to be saved by not taking a long term policy on all the insurance you buy. They split $250K 30 year / $1M 20 year. The money saved by going short on the bigger policy is (they say) $11K. It's an interesting idea. Will you use the $11K saved to buy a new $1M 10 year policy in 20 years, or will you not need the insurance? There are situations where insurance needs drop, e.g. 20 years into my marriage, college fully funded as are retirement accounts. I am semi-retired and if I passed, there's enough money. There are also situations where the need runs longer. The concept in the article works for the former type of circumstance.",
"title": ""
},
{
"docid": "ccd605b3bc6a3e996150716450fc9cee",
"text": "\"(Note: out of my depth here, but in case this helps...) While not a direct answer to your question, I'll point out that in the inverse situation - a U.S. investor who wants to buy individual stocks of companies headquartered outside US - you would buy ADRs, which are $-denominated \"\"wrapper\"\" stocks. They can be listed with one or multiple brokerages. One alternative I'd offer the person in my example would be, \"\"Are you really sure you want to directly buy individual stocks?\"\" One less targeted approach available in the US is to buy ETFs targeted for a given country (or region). Maybe there's something similar there in Asia that would eliminate the (somewhat) higher fees associated with trading foreign stocks.\"",
"title": ""
},
{
"docid": "e7949ba4d3c415a4fd358bc2b44ce02d",
"text": "I've had many home loans, and all have been sold to a big bank. They have certain rules about how much insurance you need to have, but I've never had one buy insurance on my behalf - they always send letters telling me I need to increase the insurance. They do say that if I don't get enough insurance, they will do it for me, but this has never been necessary.",
"title": ""
}
] |
fiqa
|
4d41c81d0f6503ce1529c0485afb7ebe
|
Strategy to pay off car loan before selling the car
|
[
{
"docid": "92a61455d9f49c80b5be72ef8cd10f71",
"text": "As far as ease of sale transaction goes you'll want to pay off the loan and have the title in your name and in your hand at the time of sale. Selling a car private party is difficult enough, the last thing you want is some administrivia clouding your deal. How you go about paying the remaining balance on the car is really up to you. If you can make that happen on a CC without paying an additional fee, that sounds like a good option.",
"title": ""
}
] |
[
{
"docid": "4e5fd662a672e4645120d38ef17e20f9",
"text": "The main benefit of paying off the loan early is that it's not on your mind, you don't have to worry about missing a payment and incurring the full interest due at that point. Your loan may not be set up that way, but most 0% interest loans are set up so that there is interest that's accruing, but you don't pay it so long as all your payments are on time, oftentimes they're structured so that one late payment causes all of that deferred interest to be due. If you put the money in the bank you'd make a small amount of interest and also not have to worry about funds availability for your car payment. If you use the money for some other purpose, you're at greater risk of something going wrong in the next 21 months that causes you to miss a payment and being hit with a lot of interest (if applicable to your loan). If you already have an emergency fund (at least 3-6 months of expenses) then I would pay the loan off now so you don't have to think about it. If you don't have an emergency fund, then I'd bank the money and keep making payments, and pay it off entirely when you have funds in excess of your emergency fund to do so.",
"title": ""
},
{
"docid": "8d8e2e72905068e2d95e805edefdab87",
"text": "\"Having just gone through selling a car, I can tell you that CarMax will most likely not be the best solution. I recently sold my '09 Pontiac Vibe which had a KBB and Edmonds value (private party sale) of around $6k. Trade-in value was around $4,800. I took it to the local CarMax for a quote, and they came back with $3,500. Refinancing is tricky. Banks have a set limit on how old a car they will finance. Many won't even offer financing if the vehicle has over 100k miles. We looked at refinancing our other car, and even getting the APR down over a point we would only have saved $15/mo or so. Banks typically offer much higher interest rates for used non-dealership cars and refinancing than they do for new cars, or even used cars purchased from a dealership. Assuming you have 2-3 years left on your loan, I don't think that refinancing would save you enough to be worth considering. CarMax sells cars in 1 of 2 ways. They are also up front with you about the process. They do not reference KBB or Edmonds or any other valuation tool other than their own internal system. They either take the car, spruce it up a bit, then resell it on their lot, or they sell it at auction. If they determine your car will be sold at auction, then they will offer you a rock bottom price. The determining factors that come into play include age of the car, mileage, and of course overall condition. If you Mini is still in good shape and doesn't have a lot of miles, then they may try to resell it on their lot, for which they could offer you closer to personal-sale price than trade-in. How many 2007's are for sale in your area? How much are they selling for? I did sell them a truck back in 2005 and received $200 more than KBB valued it for, but it was in great shape, only a couple of years old, relatively low mileage, and it was in high demand. God bless the South and their love for trucks! I ended up selling my Pontiac to another local car dealership. They offered me $5,300 (after negotiating, leaving the dealership, then negotiating more over the phone). It took me a day and a half and really very little effort. I have several friends that have gone through the same thing with selling cars, and all have had similar luck going to other dealerships, where prices can be negotiated, rather than CarMax. CarMax has no incentive to \"\"settle\"\" or forgive your loan. If you really want to pay it off, save up what you believe the difference will be, then shop your car around the local dealerships and get prices for your Mini. Remember that dealers have to turn a profit, so be reasonable with your negotiation. If you can find comparable vehicles in your area listed for $X,000 then knock $1,500 off that price and tell the dealerships that's what you want.\"",
"title": ""
},
{
"docid": "238c47763010d660a605d51c8190b59a",
"text": "Assuming that partial payments are held (without interest) until enough money has accumulated to make at least a full payment, and assuming that overpayments are applied toward principal, a strategy of making three $ 96.00 payments per month will shorten your amortization period by less than one month. These calculations assume that the interest rate is 12.5 percent APR, compounded monthly (with an APY of 13.2416 percent). Instead of 71 payments of $ 285.56 plus a final payment of $ 285.38, you would make the equivalent of 71 payments of $ 288.00 plus a final payment of $ 28.10. If you make one $ 96.00 payment every ten days, you will make an average of 36.5… partial payments per year, instead of 36 partial payments per year. This will speed up your loan amortization by about another month-and-a-half over the course of the 72 month loan. One month of shortening is due to the extra principal payments, and the other half-month is due to interest savings. To a second approximation, this strategy is similar to paying $ 292.00 per month for 69 months plus a final payment of $ 195.38. In other words, this strategy will probably involve about 212 payments of $ 96.00 each, possibly with a small 213th payment.",
"title": ""
},
{
"docid": "fe53fc578ef231eb4f000c990378512f",
"text": "You have a good start (estimated max amount you will pay, estimated max down payment, and term) Now go to your bank/credit union and apply for the loan. Get a commitment. They will give you a letter, you may have to ask for it. The letter will say the maximum amount you can pay for the car. This max includes their money and your down payment. The dealer doesn't have to know how much is loan. You also know from the loan commitment exactly how much your monthly payment will be in the worst case. If you have a car you want to trade in, get an written estimate that is good for a week or so. This lets you know how much you can get from selling the car. Now visit the dealer and tell them you don't need a loan, and won't be trading in a car. Don't show them the letter. After all the details of the purchase are concluded, including any rebates and specials, then bring up financing and trade-in. If they can't beat the deal from your bank and the written estimate for the car you are selling, then the deal is done. Now show them the letter and discuss how much down they need today. Then go to the bank for the rest of the money. If they do have a better loan deal or trade in then go with the dealer offer, and keep the letter in your pocket. If you go to the dealer first they will confuse you because they will see the price, interest rate, length of loan, and trade in as one big ball of mud. They will pick the settings that make you happy enough, yet still make them the most money.",
"title": ""
},
{
"docid": "3b18376c746ec672517b49eeb64ac570",
"text": "\"It's not a bad strategy. I'd rather owe money at 4% interest than at 6-7%. However, there is something to consider. Consolidating debt into a new loan can backfire. When you have money borrowed at 7%, you want to get that paid off as quickly as possible. Once you have that converted to 4%, if you think, \"\"Now I can take my time paying off this debt,\"\" then you aren't really better off. In fact, if you take too long paying off the new loan, you might end up paying more interest than if you had kept the high interest loan and paid it as soon as possible. Don't lose your drive to get out of debt after you refinance. As far as how the student loans affect your debt-to-income ratio, I'm not sure; however, if they do count (I think they do), your ratio will not really be going up by taking out the new loan, since you are using the money to pay other debt. Make sure the new lender knows this, so they take that into consideration when making their decision. Overall, I like your strategy: pay off what you can right away (the car loan and the highest interest student loans) and reduce the interest on the rest. Just make sure that you continue to pay down that debt as quick as you can.\"",
"title": ""
},
{
"docid": "1fcdc5d9cd3b7f6107c1f75848119357",
"text": "\"There's two scenarios: the loan accrues interest on the remaining balance, or the total interest was computed ahead of time and your payments were averaged over x years so your payments are always the same. The second scenarios is better for the bank, so guess what you probably have... In the first scenario, I would pay it off to avoid paying interest. (Unless there is a compelling reason to keep the cash available for something else, and you don't mind paying interest) In the second case, you're going to pay \"\"interest over x years\"\" as computed when you bought the car no matter how quickly you pay it off, so take your time. (If you pay it earlier, it's like paying interest that would not have actually accrued, since you're paying it off faster than necessary) If you pay it off, I'm not sure if it would \"\"close\"\" the account, your credit history might show the account as being paid, which is a good thing.\"",
"title": ""
},
{
"docid": "18d2a4d236f1778fbd6a809e214fd3c8",
"text": "I don't disagree with the current answers, but I feel like no one really answered your question directly. Seems to me like what you were asking is when to trade in your car in relation to when/whether your loan is paid off? Assuming you are committed to trading your car in (and not selling it privately as has been suggested), whether the car is paid off should have no impact on what you get for a trade-in. The car is worth what it's worth, and what you owe on it should not affect the transaction.",
"title": ""
},
{
"docid": "78b784464b371298238b7268183212f8",
"text": "Do you need the car? It depends on what your goals are. You're going to keep losing money on the car via means of the debt (which I assume you can't pay off without selling the car) and depreciation. If it was me, I would sell the car. But if you like it and you can afford it, then keep it.",
"title": ""
},
{
"docid": "12bb7a7f585f4dd6444a5401f52d0b89",
"text": "If the car loan has 0% interest for 5 years, then paying off the student loan is cheaper. No matter when you pay off the car, you will pay the exact same amount (as long as its within 5 years). You could spend $20,000 right now to pay off the car loan or slowly spend $20,000 over the next 5 years. The gross amount paid for the car loan does not change. On the contrary, the longer you wait to pay off the student loans, the more you will end up paying for them. So why not get the student loans out of the way before they rack up more interest and pay the car loan over time? Update: I forgot to add, as Ben Miller said, congratulations on paying off the $40,000!",
"title": ""
},
{
"docid": "dc69d3f6e641e3921c55c1180b6158e7",
"text": "\"Following up on @petebelford's answer: If you can find a less expensive loan, you can refinance the car and reduce the total interest you pay that way. Or, if your loan permits it (not all do; talk to the bank which holds the loan and,/or read the paperwork you didn't look at), you may be able to make additional payments to reduce the principal of the loan, which will reduce the amount and duration of the loan and could significantly reduce the total interest paid ... at the cost of requiring you pay more each month, or pay an additional sum up front. Returning the car is not an option. A new car loses a large portion of its value the moment you drive it off the dealer's lot and it ceases to be a \"\"new\"\" car. You can't return it. You can sell it as a recent model used car, but you will lose money on the deal so even if you use that to pay down the loan you will still owe the bank money. Given the pain involved that way, you might as well keep the car and just try to refinance or pay it off. Next time, read and understand all the paperwork before signing. (If you had decided this was a mistake within 3 days of buying, you might have been able to take advantage of \"\"cooling down period\"\" laws to cancel the contract, if such laws exist in your area. A month later is much too late.)\"",
"title": ""
},
{
"docid": "e3a794578c9ef2130d3f3bb40b9b97aa",
"text": "Everybody on the car title will need to participate in the selling process. The person who is buying the car will need everybody to sign the paperwork so that nobody months later tries to say they never agreed to sell the car. The money will have to be sent to the lender to pay off the rest of the loan. If the money isn't enough to pay off the loan everybody will have to decide how the extra money will be sent to the lender. This will have to be done as part of the selling process because the lender doesn't want you to sell the car and keep the cash. Once the car is gone so is the collateral and they can't take it back if you miss payments. If the cousin is too far away to participate in the selling of the car, you may need the buyer and the lender to tell you how to proceeded. If you are selling at a dealership they will know what documents and signatures will be needed, the bank will also know what to do. If the loan is almost paid off it may be easier to pay the loan first, and then get the title without the lenders name before trying to sell it.",
"title": ""
},
{
"docid": "29c366b66bc9ac78b881ee6be8d430e3",
"text": "That interest rate (13%) is steep, and the balloon payment will have him paying more interest longer. Investing the difference is a risky proposition because past performance of an investment is no guarantee of future performance. Is taking that risk worth netting 2%? Not for me, but you must answer that last question for yourself. To your edit: How disruptive would losing the car and/or getting negative marks on your credit be? If you can quantify that in dollars then you have your answer.",
"title": ""
},
{
"docid": "927daf0565187ad69e532a058862b42f",
"text": "The optimal down payment is 0% IF your interest rate is also 0%. As the interest rate increases, so does the likelihood of the better option being to pay for the car outright. Note that this is probably a binary choice. In other words, depending on the rate you will pay, you should either put 0% down, or 100% down. The interesting question is what formula should you use to determine which way to go? Obviously if you can invest at a higher return than the rate you pay on the car, you would still want to put 0% down. The same goes for inflation, and you can add these two numbers together. For example, if you estimate 2% inflation plus 1% guaranteed investment, then as long as the rate on your car is less than 3%, you would want to minimize the amount you put down. The key here is you must actually invest it. Other possible reasons to minimize the down payment would be if you have other loans with higher rates- then obviously use that money to pay down those loans before the car loan. All that being said, some dealers will give you cash back if you pay for the car outright. If you have this option, do the math and see where it lands. Most likely taking the cash back is going to be more attractive so you don't even have to hedge inflation at all. Tip: Make sure to negotiate the price of the car before you tell them how you are going to pay for it. (And during this process you can hint that you'll pay cash for it.)",
"title": ""
},
{
"docid": "d39986d50b0e63031806e14e0e0c04a4",
"text": "\"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.\"",
"title": ""
},
{
"docid": "1c42f580bbe721965a6f98e30226dc44",
"text": "The other answers have offered some great advice, but here is an alternative that hasn't been mentioned yet. I'm assuming that you have an adequately-sized emergency fund in savings, and that your cars are your only non-mortgage debt. Since you still have car debt, you probably don't have anything saved for buying a new car when your current cars are at the end-of-life. Consider paying off your car loans early, then begin saving for your next car. Having cash in the bank for a car is very freeing, and it changes your mindset when it comes time to purchase a car, as it is easy to waste a lot of money on something that depreciates rapidly when you aren't paying for it immediately. This approach might be counterintuitive if your car loan interest rate is less than your mortgage rate, but you will probably need another car before you need another house, and paying cash for a car is worth doing.",
"title": ""
}
] |
fiqa
|
31693422e51885880f7ea60d159c71e1
|
2 UAN Numbers allotted to my PAN Number
|
[
{
"docid": "3678b742fd3a27128f1892b65ae88e6e",
"text": "Option 1: You can write to [email protected] giving the details of both the UAN's. This will be able to merge both these under the current EPF. Option 2: You can request a transfer of EPF from old EPF [under different UAN] to the current EPF. This can be done by submitting the required form. Your company should be able to assist you with the paperwork. Alternatively if you are registered online with EPFO India, you can submit the request online. Once submitted, the system will identify that a duplicate UAN has been issued and automatically merge the accounts.",
"title": ""
}
] |
[
{
"docid": "7808731f1acf8a2c4ca4c9c99cd6c65a",
"text": "Ratutogel99.com, We are not the the first but we are the CHAMPION Hy Guys, bagi kamu-kamu yang hobbynya main togel saatnya bergabung bersama kami di situs ratutogel99.com. Mengapa? Karena ratutogel99 adalah situs togel terbaru yang terus bersaing untuk memberikan pelayanan yang terbaik untuk anda. Dengan memberikan promo2 heboh dan potongan persen yang besar. Kami menyediakan berbagai pasaran seperti Togel SINGAPORE, Togel HONGKONG, Togel SYDNEY, Togel NAGOYA (JAPAN), Togel GOLDCOAST (AUSTRALIA), Togel NETHERLANDS (BELANDA). dan kami juga menyediakan berbagai macam hadiah dan discount yang menarik. Deposit Rp.10.000 sampai Rp.25.000 @bonus Rp.3000 Bonus new member di atas Rp.50.000 @bonus 10% Maximal Bonus untuk new member Rp.200.000,- Minimal deposit : Rp 10.000,- Minimal withdraw : Rp 25.000,- Minimum bet togel : Rp 1.000,- discount 2D 29% , 3D 59% , 4D 65% support bank : BCA , BNI , MANDIRI , BRI. Cs 24 jam. PIN BB : D89C309A WA : +855312265587 LINE : ratutogel99 WECHAT : ratutogel99 Percayakan bettingan anda kepada kami. Moto Kami : We are not the first but are the champion. CEKIOUT !!!! http://ratutogel99.com/",
"title": ""
},
{
"docid": "c58d8109f38a882700f6f634e64d05f6",
"text": "There is a possibility of misuse. Hence it should be shared judiciously. Sharing it with large / trusted organization reduces the risk as there would be right process / controls in place. Broadly these days PAN and other details are shared for quite a few transactions, say applying for a Credit Card, Opening Bank Account, Taking a Phone connection etc. In most of the cases the application is filled out and processed by 3rd party rather than the service provider directly. Creating Fake Employee records is a possibility so is the misuse to create a fake Bank account in your name and transact in that account. Since one cannot totally avoid sharing PAN details to multiple parties... It helps to stay vigilant by monitoring the Form 26AS from the Govt website. Any large cash transactions / additional salary / or other noteworthy transactions are shown here. It would also help to monitor your CIBIL reports that show all the Credit Card and other details under your name.",
"title": ""
},
{
"docid": "3d1e1dcc1720a7572a82eaa13e92c8cb",
"text": "\"Your employer can require a W8-BEN or W-9 if you are a contractor, and in some special cases. I believe this bank managing your stock options can as well; it's to prove you don't have \"\"foreign status\"\". See the IRS's W-9 instructions for details.\"",
"title": ""
},
{
"docid": "e95ef223d4891aa56df722d26a6ad4a9",
"text": "Oh please. Now the political effluvium of the PRC is news. The CPC is using an outdated measure of rural daily earnings to define poverty which is ridiculous in modern Chinese cities which are comparatively expensive. All you need to know is that inequality is soaring in Chinese cities. And the ability of the urban poor to afford basic necessities - despite having incomes that exceed the poverty minimum - has collapsed. You can't simultaneously have inflation and an inflexible poverty line and achieve a meaningful measure of poverty.",
"title": ""
},
{
"docid": "b505f32724b6c6439754066ecf6fba7c",
"text": "Edit3: Regarding the usefulness of the bare number itself, it is not useful unless, for example, an employer uses that average in the computation of how many options the employer grants to the employee as part of the compensation paid. One of my employers used just such an average. What is far more common is to use two or more moving averages, of different periods, plotted on a chart. My original response continues below... Assuming there are 252 trading days a year, the following chart does what you have done but with a moving average: AAPL on Stockcharts.com Edit: BTW, I looked up the number of Federal holidays, there are 9. The average year has 365.2422 days. 365.2422 × 5/7 = 260.8873. Subtract 9 and you get 251.8873 trading days in the average year. So 252 is a better number for the SMA than 250 if you want to average a year. Edit2: Here is the same chart with more than one average included: AAPL chart w/indicators",
"title": ""
},
{
"docid": "7c4fb00e6b3071eec30e978b68f7d54e",
"text": "Maybe you should consider setting up a Taxpayer Identification Number (TIN) for your business dealings as a landlord and consider providing that instead of your SSN for this type of thing. I am assuming (if this is legitimate) they want it so they can send you a 1099 as they might be obligated to do if they are claiming the rent as a business expense. Also, I'd suggest having the tenant tell their employer to contact you directly. There is no need for the tenant in this situation to also get your SSN/TIN.",
"title": ""
},
{
"docid": "4478136b0fb1680b61b170be6e8bfb0f",
"text": "Restricting the discussion only to Internet hacking: In Option 2 or Option 3, you have to realize that the funds are credited to a specific Registered Bank Account. So the max damage an hacker can do is liquidate your holding. In Option 2, the Banking Internet Login and the Broker Internet Login will be different, For example HDFC Bank and HDFC Securities. In Option 3, if you choose your Bank, then it will be the same Login. If you choose a Non-Bank as provider then there is a different login. The risk is no different to investing in shares. In the end its up to an individual, there is nothing that stops you from opening multiple accounts in option 2 and option 3 and buying the stocks worth particular value. From an overall risk point of view; Option 2 seems best suited as the units are held in a Demat from by a Depository.",
"title": ""
},
{
"docid": "ce98c234306e5b450314f6d30b23a592",
"text": "Setting up an entity that is partially foreign owned is not that difficult. It takes an additional 1-1.5 months in total, and in this particular case, you guys would be formed as a Joint Venture. It will cost a bit more (about 3-5000). If you're serious about owning a part of a business in China, you should carefully examine what he means by 'more complicated'. From my point of view, I have set up my own WOFE in China, and examined the possibilities of a JV and even considered using a friend to set up the company under their personal name as a domestic company (which is what your supervisor is doing), any difference between the three are not really a big deal anymore, and comes down to the competency of the agencies you are using and the business partner themselves. It cost me 11,000 for a WOFE including the agency and government registration fees (only Chinese speaking). You should also consider the other shareholders who may be part of this venture as well. If there are other shareholders, and you are not providing further tangible contribution, you will end up replaced and penniless (unless of course you trust them too...), because they are actually paying money to be part of the business and you are not. They will not part with equity for you. I'm not a lawyer, but think you should not rely on any promises other than what it says on a company registration paper. Good luck!",
"title": ""
},
{
"docid": "2b1a2d17c700fb9dcfea6f4ef1dbb125",
"text": "I work in IT for eBay/PayPal. Many, if not all, got exited today. Real quick and ninja-esque. HR is really being a dick to them too. Several have personal phone numbers that were assigned to their corporate phones, and they're being told they can't have them back.",
"title": ""
},
{
"docid": "b8196b546ce56d3e8f33d88e27da513d",
"text": "Preparation & processing an application for obtaining Code Number / sub -code number to the newly establishment & Branch office in various part of states for extending the benefit of ESI Scheme to employees employed in that regions. We would process an online application to obtain TIC of newly joined employees within 10 days from the date of joining and data for the same shall be provided by you in time. We would be retrieving the Individual Insurance No.s & maintain their contributions in the devised ESIC Register to be maintained. Monthly Payment Challans to be computed online and same shall be forwarded to you for payment on or before 21st of every month. To ensure payment before due date, data shall be provided in time. Preparation and compilation of Half Yearly Returns and Annual Returns would be our responsibility in cases where manual challan is prepared. All the Payments and Returns would be filed within the stipulated time and the adherence would be monitored by us. Guidelines to the Insured Persons (I.P.) pertaining to the Benefits under the ESIC Act, 1948 and provision of Information related to Insurance Medical Practitioner(Imp's) and Hospitals through ESIC. We would be liasoning on behalf of the establishment with the Regional Office & Branch Office for ensuring smooth functioning. We would also be attending the periodical Inspections and hearings on behalf of the establishment. The Responsibility of the Assessment would be limited for the period which would be coverable under our service tenure. We will keep the Company posted on all Amendments & Development of the Act.",
"title": ""
},
{
"docid": "173e861ea1f6c04d3eda62745223c3ff",
"text": "Hello Ms./Mr. , My name is someguy82 and I'm a fellow alumnus of xxxxxx University - class of 20xx. I hope you don't mind, but I got your email address through the alumni network at xxxxxx University. I am interested in hearing about how you have progressed in your professional life since xxxxxx University/current role/etc. I would love to know more about your current work in financial services/investments/etc. I am sure that you must have a very busy schedule, so I can assure you I won't take up more of your time than you are willing or able to give. If you're free I can meet you for coffee/lunch near your work/building. I hope to hear from you soon! Kind Regards, someguy82",
"title": ""
},
{
"docid": "b976a4e8ad6d19afe38dbcd68dd0e15d",
"text": "Some Canadian banks (RBC for instance), will accept the format No spaces, no slashes. Transit number must be five digits, if it's not add a 0 to the front. Just had a situation where the European-based system would not accept anything but an IBAN, so I called my bank and that's what they confirmed. I know this is super late, but thought I would leave it here for future generations to discover. Edit: See comments for an example.",
"title": ""
},
{
"docid": "1853626fb52451da253d4584c6a00fad",
"text": "\"I sent myself an Tangerine email money transfer. They sent me an email which took me to a website. After I entered the secret answer, they asked me for the destination bank account's details. They asked me to enter the transit number once, the institution number once, and the account number twice. They also showed a bold warning message: \"\"Please ensure that the details of your Canadian Bank Account (account number and bank information) are entered correctly.\"\" Asking for the account number twice isn't a perfect safeguard, but it's better than nothing. In some countries, bank account numbers include a \"\"check digit\"\" for typo prevention, but I was unable to find any evidence online that this is true in Canada. Tangerine's system isn't 100% mistake-proof, but it's good enough that I think I'm going to use it.\"",
"title": ""
},
{
"docid": "645e83e8696b475e9bdfbcbe6a1891af",
"text": "No, because of regulations Paypal is different in India to most countries and you cannot actually spend paypal balance. You will need to verify your PAN number and connect a bank account, although this should be very quick",
"title": ""
},
{
"docid": "55bb65d0b678ef4788f3d6625191a078",
"text": "\"What can I do to help him out, but at the same time protect myself from any potential scams? Find out why he can't do this himself. Whether your relative is being sincere or not, if he owns both accounts then he should be able to transfer money between them by himself. If you can find a way to solve that issue without involving your bank account, so much the better. Don't settle for \"\"something about authorized payees and expired cards.\"\" Get details, write them down. If possible, get documents. Then go to a bank or financial adviser you can trust and run those details by them to see what they have to say. Even if there's no scam, if what he's trying to do is illegal (even if he doesn't realize it himself) then you want to know before you get involved. You say you're willing to deal with \"\"other issues\"\" separately, but keep in mind that, even if there's no external scam here, those \"\"other issues\"\" could include hefty fees, censures on your own account, or jail time. Ask yourself: Does it make sense that this relative has an account overseas? I don't have any overseas accounts, because I don't do business in other countries. Is your relative a dual-citizen? Does he travel a lot? What country is the overseas account in? How long has he had this account? What bank is it with? Where the money is going is just as important as how it gets there (ie: through your account.) Arguably more so. Keep in mind that many scammers tell their marks not to share what's going on with anyone else. (Because doing so increases the odds of someone telling them to snap out of it.) It's entirely possible he's being scammed himself and just not telling you the whole story because the 419er is telling him to keep it quiet. (Check out that link for more details on common scams that your relative may be unwittingly part of, btw.) Get as many details as possible about what he's doing and why. If he's communicating with anyone else regarding this transfer, find out who. If there are emails, ask his permission to read them and watch for anything suspicious (ie: people who can't spell their own name consistently, constant pressure to act quickly, etc.)\"",
"title": ""
}
] |
fiqa
|
4ac2d9c9ac84b2a266081ddfd649bcd4
|
Will refinancing my auto loan hurt my mortgage approval or help it?
|
[
{
"docid": "bc39ebc96f26ede3ea62f4829612c593",
"text": "\"Generally it is not recommended that you do anything potentially short-term deleterious to your credit during the process of seeking a mortgage loan - such as opening a new account, closing old accounts, running up balances, or otherwise applying for any kind of loan (people often get carried away and apply for loans to cover furniture and appliances for the new home they haven't bought yet). You are usually OK to do things that have at least a short-term positive effect, like paying down debt. But refinancing - which would require applying for a non-home loan - is exactly the sort of hard-pull that can drop your credit rating. It is not generally advised. The exception to this is would be if you have an especially unusual situation with an existing loan (like your car), that is causing a deal-breaking situation with your home loan. This would for example be having a car payment so high that it violates maximum Debt-to-Income ratios (DTI). If your monthly debt payments are more than 43% of your monthly income, for instance, you will generally be unable to obtain a \"\"qualified mortgage\"\", and over 28-36% will disqualify you from some lenders and low-cost mortgage options. The reason this is unusual is that you would have to have a bizarrely terrible existing loan, which could somehow be refinanced without increasing your debt while simultaneously providing a monthly savings so dramatic that it would shift your DTI from \"\"unacceptable\"\" to \"\"acceptable\"\". It's possible, but most simple consumer loan refis just don't give that kind of savings. In most cases you should just \"\"sit tight\"\" and avoid any new loans or refinances while you seek a home purchase. If you want to be sure, you'll need to figure out your DTI ratio (which I recommend anyway) and see where you would be before and after a car refinance. If this would produce a big swing, maybe talk with some mortgage loan professionals who are familiar with lending criteria and ask for their opinion as to whether the change would be worth it. 9 times out of 10, you should wait until after your loan is closed and the home is yours before you try to refinance your car. However I would only warn you that if you think your house + car payment is too much for you to comfortably afford, I'd strongly recommend you seriously reconsider your budget, current car ownership, and house purchasing plans. You might find that after the house purchase the car refi isn't available either, or fine print means it wouldn't provide the savings you thought it would. Don't buy now hoping an uncertain cost-saving measure will work out later.\"",
"title": ""
}
] |
[
{
"docid": "1907a57fe43b6cf6cbaa2ac2986d6ec0",
"text": "If you're a bit into the loan, then they're probably hoping that you'll take longer to pay off the loan. Is there a fee for refinancing the loan? If so, be sure to take that into account. A smart way to approach it (assuming that the fees are low or zero) would be to continue making the same payment you had been before the refinance. Then you'll end your loan ahead of schedule. (This assumes that there's no prepayment penalty.)",
"title": ""
},
{
"docid": "6a5c235f65fc1356e1a56bb1815957f7",
"text": "\"a link to this article grabbed my Interest as I was browsing the site for something totally unrelated to finance. Your question is not silly - I'm not a financial expert, but I've been in your situation several times with Carmax Auto Finance (CAF) in particular. A lot of people probably thought you don't understand how financing works - but your Car Loan set up is EXACTLY how CAF Financing works, which I've used several times. Just some background info to anyone else reading this - unlike most other Simple Interest Car Financing, with CAF, they calculate per-diem based on your principal balance, and recalculate it every time you make a payment, regardless of when your actual due date was. But here's what makes CAF financing particularly fair - when you do make a payment, your per-diem since your last payment accrued X dollars, and that's your interest portion that is subtracted first from your payment (and obviously per-diem goes down faster the more you pay in a payment), and then EVerything else, including Any extra payments you make - goes to Principal. You do not have to specify that the extra payment(S) are principal only. If your payment amount per month is $500 and you give them 11 payments of $500 - the first $500 will have a small portion go to interest accrued since the last payment - depending on the per-diem that was recalculated, and then EVERYTHING ELSE goes to principal and STILL PUSHES YOUR NEXT DUE DATE (I prefer to break up extra payments as precisely the amount due per month, so that my intention is clear - pay the extra as a payment for the next month, and the one after that, etc, and keep pushing my next due date). That last point of pushing your next due date is the key - not all car financing companies do that. A lot of them will let you pay to principal yes, but you're still due next month. With CAF, you can have your cake, and eat it too. I worked for them in College - I know their financing system in and out, and I've always financed with them for that very reason. So, back to the question - should you keep the loan alive, albeit for a small amount. My unprofessional answer is yes! Car loans are very powerful in your credit report because they are installment accounts (same as Mortgages, and other accounts that you pay down to 0 and the loan is closed). Credit cards, are revolving accounts, and don't offer as much bang for your money - unless you are savvy in manipulating your card balances - take it up one month, take it down to 0 the next month, etc. I play those games a lot - but I always find mortgage and auto loans make the best impact. I do exactly what you do myself - I pay off the car down to about $500 (I actually make several small payments each equal to the agreed upon Monthly payment because their system automatically treats that as a payment for the next month due, and the one after that, etc - on top of paying it all to principal as I mentioned). DO NOT leave a dollar, as another reader mentioned - they have a \"\"good will\"\" threshold, I can't remember how much - probably $50, for which they will consider the account paid off, and close it out. So, if your concern is throwing away free money but you still want the account alive, your \"\"sweet spot\"\" where you can be sure the loan is not closed, is probably around $100. BUT....something else important to consider if you decide to go with that strategy of keeping the account alive (which I recommend). In my case, CAF will adjust down your next payment due, if it's less than the principal left. SO, let's say your regular payment is $400 and you only leave a $100, your next payment due is $100 (and it will go up a few cents each month because of the small per-diem), and that is exactly what CAF will report to the credit bureaus as your monthly obligation - which sucks because now your awesome car payment history looks like you've only been paying $100 every month - so, leave something close to one month's payment (yes, the interest accrued will be higher - but I'm not a penny-pincher when the reward is worth it - if you left $400 for 1.5 years at 10% APR - that equates to about $50 interest for that entire time - well worth it in my books. Sorry for rambling a lot, I suck myself into these debates all the time :)\"",
"title": ""
},
{
"docid": "61afca1ab51dceb80e7ed827b9f2c474",
"text": "For a $350 monthly payment, she is currently paying $200 monthly in interest. You say that no bank will refinance her, but that is not true, I'm sure many banks are happy to refinance her to the value of the car. She should start that process. You'll find that your suggestion to pay $5000 down on the current loan is pretty similar to what she would need to bring to a bank to refinance (maybe as much as $7000 to refinance). After that she would be paying a much lower amount in interest, and she could still retire the loan a year or two (but she would be paying even less in interest). The advantage to borrowing from her emergency fund is that she retires the loan 14 months earlier. The problem is that you are prioritizing the least amount paid, and she is prioritizing an emergency fund. Emergency funds are also very important. You might have better success if you prioritize paying back the emergency fund in your plan. If she puts $7000 down to refinance, assume a 3 year loan at 4.5% with a $150 monthly payment. Instead of paying down the remaining $5000 quickly what if she put the extra $200/month toward paying back her emergency fund? It would take the same 3 years to fully pay it back without impacting the rest of her budget at all. If she has extra room in her budget, she could pay back that emergency fund even faster. Many of us who prioritize minimizing interest paid and maximizing interest earned already have a robust emergency fund. Your girlfriend isn't wrong to value that. Unexpected emergencies can cause much more interest to be paid if there is no way to deal with them. (That's how paycheck and title lenders capture their customers.) Talk to her about what emergencies she might need the money for, and make a plan to replenish the fund, and you're much more likely to have her buy in.",
"title": ""
},
{
"docid": "f7c3764a2d481ea96cc97e9e0968a1dd",
"text": "\"Yes, it is possible for you to refinance your existing auto loan, and so long as you can get the loan on more favorable terms (e.g.: lower interest rate), it is absolutely a smart thing to do. In fact, you would be well advised to do so as soon as possible if the car was a new car, if you refinance a NEW car soon enough you will likely still be able to get new car interest rates. Even if it is a pre-owned vehicle you shouldn't wait too long, since your car will only depreciate in value. You will almost certainly get more favorable terms from any bank or credit union directly then you would when you go through the dealership, because the dealership is allowed to mark-up your interest rate several percentage points as profit for themselves. Your best bet would be to go to a local credit union, their rates tend to be most competitive since they are \"\"owned\"\" by their members.\"",
"title": ""
},
{
"docid": "afcc0a968d643cff64bd0cfd4ba171b7",
"text": "I don't know what rates are available to you now, but yes, if you can refinance your car at a better rate with no hidden fees, you might save some money in interest. However, there are a couple of watchouts: Your original loan was a 6 year loan, and you have 5 years remaining. If you refinance your car with a new 6 year loan, you will be paying on your car for 7 years total, and you will end up paying more interest even though your interest rate might have gone down. Make sure that your new loan, in addition to having a lower rate than the old loan, does not have a longer term than what you have remaining on the original loan. Make sure there aren't any hidden fees or closing costs with the new loan. If there are, you might be paying your interest savings back to the bank in fees. If your goal is to save money in interest, consider paying off your loan early. Scrape together extra money every month and send it in, making sure that it is applied to the principal of your loan. This will shorten your loan and save you money on interest, and can be much more significant than refinancing. After your loan is paid off, continue saving the amount you were spending on your car payment, so you can pay cash for your next car and save even more.",
"title": ""
},
{
"docid": "1e3057c1fc6c4cd285ff605bf4f2e8ef",
"text": "Yes. I've spoken to mortgage officers from various banks who will do conventional loans with anything as low as 3.5% down, however there are many more restrictions (e.g., normally you can borrow funds from a parent or relative for a down payment, in this case that was prohibited). If you are already pre-approved, then your approval letter should state the specifics you need to adhere to. If you would like to modify that (e.g. put a smaller amount down), then you could still get the loan, but your pre-approval won't be valid. I would recommend speaking with your lender (and perhaps with a few others as well) about the new home you are looking at.",
"title": ""
},
{
"docid": "b8b1294c9216a410a61241b8b9dd9eae",
"text": "Your current loan is for a new car. Your refinanced loan would probably be for a used car. They have different underwriting standards and used car loan rates are usually higher because of the higher risks associated with the loans. (People with better credit will tend to buy new cars.) This doesn't mean that you can't come out ahead after refinancing but you'll probably have to do a bit of searching. I think you should take a step back though. 5% isn't that much money and five years is a long time. Nobody can predict the future but my experience tells me that the **** is going to hit the fan at least once over any five year period, and it's going to be a really big dump at least once over any ten year period. Do you have savings to cover it or would you have to take a credit card advance at a much higher interest rate? Are you even sure that's an option - a lot of people who planned to use their credit card advances as emergency savings found their credit limits slashed before they could act. I understand the desire to reduce what you pay in interest but BTDT and now I don't hesitate to give savings priority when I have some excess cash. There's no one size fits all answer but should have at least one or two months of income saved up before you start considering anything like loan prepayments.",
"title": ""
},
{
"docid": "8cd2b0cad322b4f13659c8aa60ac7af7",
"text": "There are a few things you should keep in mind when getting another vehicle: DON'T use dealership financing. Get an idea of the price range you're looking for, and go to your local bank or find a local credit union and get a pre-approval for a loan amount (that will also let you know what kind of interest rates you'll get). Your credit score is high enough that you shouldn't have any problems securing a decent APR. Check your financing institution's rules on financing beyond the vehicle's value. The CU that refinanced my car noted that between 100% and 120% of the vehicle's value means an additional 2% APR for the life of the loan. Value between 120% and 130% incurred an additional 3% APR. Your goal here is to have the total amount of the loan less than or equal to the value of the car through the sale / trade-in of your current vehicle, and paying off whatever's left out of pocket (either as a down-payment, or simply paying off the existing loan). If you can't manage that, then you're looking at immediately being upside-down on the new vehicle, with a potential APR penalty.",
"title": ""
},
{
"docid": "ef7053fffebc96b8ba633d6201f49f4d",
"text": "Before we were married my wife financed a car at a terrible rate. I think it was around 20%. When trying to refinance it the remaining loan was much larger than the value of the car, so no one was interested in refinancing. I was able to do a balance transfer to a credit card around 10%. This did take on a bit of risk, which almost came up when the car was totaled in an accident. Fortunately the remaining balance was now less than the value of the car, otherwise I would have been stuck with a credit card payment and no vehicle.",
"title": ""
},
{
"docid": "8fb4ed771f66e236487e2f709666e10e",
"text": "Just call your credit union and ask if they will let you refinance at the lower rate. If they won't, then just increase your payment every month so that your car is paid off early (in 36 months instead of 60). You won't get the lower rate, but since your loan will be paid early, you'll be saving interest anyway.",
"title": ""
},
{
"docid": "adeb62f3873388115cae70ccf26f77c7",
"text": "Used car dealers will sometimes deliberately issue high-interest-rate subprime loans to folks who have poor credit. But taking that kind of risk on a mortgage, when you aren't also taking profit out of the sale, really isn't of interest to anyone who cares about making a profit. There might be a nonprofit our there which does so, but I don't know of one. Fix your credit before trying to borrow.",
"title": ""
},
{
"docid": "d3a08d8fa1c0f462a8c672b0a120b634",
"text": "My car loan, much to my disappointment, was through Wells Fargo. I went to my credit union and refinanced (with a .1% increase of interest) and I feel a lot better about my payments. In reality, it pays for itself because my credit union is customer-owned, and my dividends offset the extra cost. :)",
"title": ""
},
{
"docid": "d102521380188ac82074b1f3dd94efda",
"text": "There is a 3rd option: take the cash back offer, but get the money from a auto loan from your bank or credit union. The loan will only be for. $22,500 which can still be a better deal than option B. Of course the monthly payment can make it harder to qualify for the mortgage. Using the MS Excel goal seek tool and the pmt() function: will make the total payment equal to 24K. Both numbers are well above the rates charged by my credit union so option C would be cheaper than option B.",
"title": ""
},
{
"docid": "1dbbd5514b243927ca57f2e225547cd7",
"text": "Anytime you borrow money at that rate, you are getting ripped off. One way to rectify this situation is to pay the car off as soon as possible. You can probably get a second job that makes $1000 per month. If so you will be done in 4 months. Do that and you will pay less than $300 in interest. It is a small price to pay for an important lesson. While you can save some money refinancing, working and paying the loan off is, in my opinion a better option. Even if you can get the rate down to 12%, you are still giving too much money to banks.",
"title": ""
},
{
"docid": "69496aa2e2eeda0c08710e7a8b1f73bc",
"text": "what you aim to do is a great idea and it will work in your favor for a number of reasons. First, paying down your loan early will save you lots in interest, no brainer. Second, keeping the account open will improve your credit score by 1) increases the number of installment trade lines you have open, 2)adds to your positive payment history and 3) varies your credit mix. If your paid your car off you will see a DROP in your credit score because now you have one less trade line. To address other issues as far as credit scoring, it does not matter(much) for your score if you have a $1000 car loan or a $100,000 car loan. what matters is whether or not you pay on time, and what your balance is compared to the original loan amount. So the quicker you pay DOWN the loans or mortgages the better. Pay them down, not off! As far how the extra payments will report, one of two things will happen. Either they will report every month paid as agreed (most likely), or they wont report anything for a few years until your next payment is due(unlikely, this wont hurt you but wont help you either). Someone posted they would lower the amount you paid every month on your report and thus lower your score. This is not true. even if they reported you paid $1/ month the scoring calculations do not care. All they care is whether or not you're on time, and in your case you would be months AHEAD of time(even though your report cant reflect this fact either) HOWEVER, if you are applying for a mortgage the lower monthly payment WOULD affect you in the sense that now you qualify for a BIGGER loan because now your debt to income ratio has improved. People will argue to just pay it off and be debt free, however being debt free does NOT help your credit. And being that you own a home and a car you see the benefits of good credit. You can have a million dollars in the bank but you will be denied a loan if you have NO or bad credit. Nothing wrong with living on cash, I've done it for years, but good luck trying to rent a car, or getting the best insurance rates, and ANYTHING in life with poor credit. Yeah it sucks but you have to play the game. I would not pay down do $1 though because like someone else said they may just close the account. Pay it down to 10 or 20 percent and you will see the most impact on your credit and invest the rest of your cash elsewhere.",
"title": ""
}
] |
fiqa
|
9a7ac4d4707df8c25ebe5de08290ba48
|
Are the “debt reduction” company useful?
|
[
{
"docid": "e44c5d2b7d58ef5deec63a6f93095785",
"text": "\"From what I understand, they basically hold on to your money while you stop paying your debt. They keep it in an account and negotiate on your behalf. The longer you go without paying, the less the debt collector is willing to take and at some point, they will settle. So they take the money you've been putting into their \"\"account\"\" and pay it down. Repeat the process for all your accounts. I basically did this, without using a service. I had $17,000 on one card and they bumped the interest rate to 29%, and I had lost my job. I didn't pay it for 7 months. I just planned on filing bankruptcy. They finally called me up and said, if you can pay $250 a month, until it's paid off, we will drop the interest to 0% and forgive all your late fees. I did that, and five years later it was paid off. Similar situation happened on my other cards. It seems once they realize you can't pay, is when they're willing to give you a break. It'd be nice they just never jacked up your rate to 30% though. So, forget the service, just do it yourself. Call them up and ask, and if they don't budge, don't pay it. Of course your credit will be shot. But I'm back in the 700s, so anything is possible over time.\"",
"title": ""
},
{
"docid": "7477a59bf676d005a08d35b199b330ef",
"text": "They don't do anything you can't do yourself and they charge you money for it. And of course the only way they manage to negotiate the debt down is by not paying it for a while in the first place, have it referred to collections and then negotiating with the collectors. At that time, your credit rating (if you care about that at all) will have suffered a lot more damaged than it is from a few late payments. I would address the issue as to why you end up paying late first - it sounds to me like you're cutting the time left to pay to the bone and this turned around and bit you in the you-know-where. In case you are able to pay but not organised enough to do it on time, find a way to remind yourself to pay the bill a few days early for peace of mind. That won't do anything about the 28% interest but those might serve as an additional motivation to pay the debt off faster. Once you're back to showing regular on-time payments on your credit record, you might want to investigate transferring the balance to a cheaper card or negotiate the interest down (or both). If you genuinely can't pay after you've taken care of the essentials (food, shelter, transportation) then you don't need a third party to stop paying the credit card bill, you can do that yourself.",
"title": ""
},
{
"docid": "11bc291a6e553d3a51470c29ada8385f",
"text": "No. Not in the Uk anyway, they are just an extra person/company that you have to pay.",
"title": ""
},
{
"docid": "e4c7c7e4432f99f72a9e2e20c4db20a8",
"text": "They are a complete waste of money, see my answer here for more details.",
"title": ""
},
{
"docid": "1ed60b63f93fe6c94fab32f08fc2179c",
"text": "Many of the services are scams, and those that are not are just doing something you can do yourself - as Jack points out.",
"title": ""
}
] |
[
{
"docid": "6f5d5938b69abf99b4c65d4e08c8b232",
"text": "\"My sister had a similar problem and went to an actual lawyer, not a \"\"credit repair agency\"\". The lawyers settled her debt for a lot less than she owed, and she also got a bonus: one of the creditors called her repeatedly, even after her lawyers had told them not to. The lawyers ended up getting her an extra $40,000. Combined with the debt settlement, she actually came out ahead. Of course, her credit score went down, but it recovered in a couple of years.\"",
"title": ""
},
{
"docid": "b13ce3e4a1c377d4ab7c7c98c30d3ebf",
"text": "Government purchases of mortgages simply transfers the debt burden from households to the sovereign. Taxes pay sovereign debt (65% of whom are homeowners anyway). No debt has been restructured -- it's now paid via taxes instead of monthly mortgage payments -- and those paying include persons who responsibly avoided housing speculation. The U.S. has a debt-to-GDP ratio just shy of the critical point of 90%. Purchasing $10 trillion in mortgage debt (about a year of GDP) would put the U.S. on an inexorable path towards insolvency and inflation. There are all sorts of other risks (loss of a risk-free asset, moral hazard, nationalization of the housing industry, etc.) but this should make the point clear that it's not a good idea. There are only three ways to reduce debt: 1) default, 2) restructure, or 3) lower the real debt burden by de-valuing currency in which the debt is denominated.",
"title": ""
},
{
"docid": "4092581e5dfc9f3941908358653b8cde",
"text": "With a credit card debt at 17%, you should basically not eat in order to pay the balance off. This should be gone within the month. That being said, I would have a hard time reducing my contributions below the 4%, but would certainly do it to the 4%. However, I would also deliver pizzas on nights and weekends and work all available overtime. Coincidentally the pizza place by my home is hiring delivery drivers however, they did not disclose how much they typically make. Only that they make min wage plus tips. Make sure you stop borrowing first, then try to have this knocked out in 4 weeks or less.",
"title": ""
},
{
"docid": "29fdf38ff4ab2c12206a69cea90ea65b",
"text": "\"good vs \"\"bad\"\" debt in the context of that post. At least in the UK this can be a good tactic to reduce the cost of credit card debt. Some things to consider\"",
"title": ""
},
{
"docid": "169ac6df5e472cb69b5b5f4d218b4e72",
"text": "No, the more conservative approach is to use the market value of debt (at least assuming its trading at a discount). A company wouldn't necessarily have to come to an agreement with creditors, they would just default on their obligations. In which case the company may file for bankruptcy protection, which allows for a variety of scenarios to play out (both consensual and not). As for when debt trades at a premium, we're talking about two different factors that effect bond prices. Credit risk and interest rate risk. But yes, a company does have a higher financial obligation if interest rates decline. They're stuck paying 8% in an environment where they could refinance for 6%. If they refinance, then creditors more than likely aren't going to take less than par. If they don't refinance, then they have the opportunity cost of essentially overpaying on their cost of debt.",
"title": ""
},
{
"docid": "e56efa286b4d3236f6c2808242ed7543",
"text": "The desire to be debt free is smart; but I think the purpose of a large group is motivation and peer pressure. Getting out of debt faster isn't going to work mathmatically. (I can't reason a scenario where the group's collective power doesn't favor one individual in the group over another.) All of the following conditions must be met: If any single thing fails, or if anybody changes their mind about how they feel about paying another person's debt, this plan will breakdown quickly and get very ugly. Please notice most of those items are emotions, which cannot be planned nor controlled. Bottom line: Don't do it. The risks are too high compared to the average reward. If your family could pull it off, a better plan would be to sell a reality show about the magical family who never fights and always puts the good of the others before themselves. Everybody do a debt snowball individually but have an email group, weekly group call, regular family meeting, group chat session or dinner event where you encourage each other, talk about the success, failures and openly discuss everybody's situation. This is called a support group and they can be more effective than doing it on your own. Go around the table and This will require humility, patience and grace from the participating family. It will rely on similar peer pressure to succeed as a single group, without all of the very real pitfalls and very real consequences of a individual failing in a big group.",
"title": ""
},
{
"docid": "b7d475ac985236303a07bffee976baea",
"text": "Of course your situation is very hurtful at a personal level, and I sympathize. I just don't get your point about being driven further into debt? It would seem that with a lower credit score you are prevented from taking on more debt. That can absolutely be hurtful especially to someone who runs a business that relies on short term credit. As for why they do this, they do it to reduce their risk - they don't want to lend more money, they are afraid that you will lose your job and default. Of course it is not as personal as I am writing it, not for you (they don't target you personally - they target your credit profile) and not for them (it is a matter of how the market views the debt and how much they can trade on such debt, not what they want to do personally). As for the TARP bailouts not releasing enough credit - this is reality. Goverment always thinks it can influence the situation more than it actually can. In order to unfreeze credit there needs to be a growing economy that makes the risk look acceptable. No amount of Goverment nudging will really change that more than marginally. By the way, legislation like this (forcing credit card companies to not raise their rates) can lead to credit restrictions. By artifically forcing the rates down the risk has to be ballanced somewhere - so it will be ballanced by lowering credit lines or by other means. Like any price control, if you restrict the price, it causes shortages. Intrest rates are the price of credit.",
"title": ""
},
{
"docid": "3732c03ce8f43f586a8a38188d3be293",
"text": "This sounds like a crazy idea, but in reality people don't make the wisest decisions when considering bankruptcy in Australia. My suggestion would be to get some advice from an insolvency specialist.",
"title": ""
},
{
"docid": "3ee55c34d9b94fe8f4aa0d6df9705a70",
"text": "Yes. Using debt appropriately is a huge part of what's called optimal capital structure theory in the finance world. Debt is generally cheaper than equity financing due to the tax deductibility of interest and using it appropriately can really juice the profitability of a business as long as the rate of return on equity in the business exceeds the interest rate on the debt.",
"title": ""
},
{
"docid": "872d37b659b196edc2b87bc5f87f3ac7",
"text": "It won't hurt your credit rating. I wouldn't worry about it. The company can certainly pursue debt collections across borders but unless its a massive sum.. they will write it off. Now.. what the right thing to do is to take care of it... 1. for karma's sake and 2. so you don't make a bad name for foreigners.",
"title": ""
},
{
"docid": "e3e14562a61fcaed88af1212ad4326d7",
"text": "Short-term, getting a balance transfer will help. It'll reduce the interest you pay. You can also reduce the interest you pay on your cars if you are able to consolidate your debt into a personal loan. To your question about debt consolidation companies, as far as I know, that's all they do. However, long-term, there's only two ways to stay on top of debt: increase your income, or reduce your spending. Basically, if you can't or won't get a raise or a job that pays more (or a second job), you need to cut back on your spending. You might need to do something radical, like move somewhere with cheaper rent (as long as increased travel costs doesn't offset the saving). But you'll be much better off in the long run if you step back and take a look at your situation now, and make adjustments accordingly.",
"title": ""
},
{
"docid": "092ebff750d235f27572a4b7eb192fd2",
"text": "\"A simple response is that it's a good political/strategic move. Ford have effectively said, \"\"We know we still have debt, but we think the long term future is so good we can go back to paying dividends.\"\" It builds investor confidence and attracts new money. It can also be seen as a way of Ford indicating that they believe the type of debt (regardless of the amount) is okay for them to carry.\"",
"title": ""
},
{
"docid": "d090dd085d2a07d824cdcc6e0db439e3",
"text": "No. Unless you are ten Bill Gates rolled into one man, you can not possibly hope to make a dent in the 14 trillion debt. Even if you were and paid off whole debt in one payment, budget deficits would restore it to old glory in a short time. If you have some extra money, I'd advise to either choose a charity and donate to somebody who needs your help directly or if you are so inclined, support a campaign of a financially conservative politician (only if you are sure he is a financial conservative and doesn't just tell this to get elected - I have no idea how you could do it :).",
"title": ""
},
{
"docid": "59f650ab89664f2869c7fc1035ed48a4",
"text": "In finance you are taught that debt financing is cheaper than equity financing. Also to improve your credit rating, showing that you can carry debt responsibly and pay it off without a hitch sends dog whistle that the corporation is operating well.",
"title": ""
},
{
"docid": "a1f8e1e935ad365e016e2e6468cf4797",
"text": "Adding assets (equity) and liabilities (debt) never gives you anything useful. The value of a company is its assets (including equity) minus its liabilities (including debt). However this is a purely theoretical calculation. In the real world things are much more complicated, and this isn't going to give you a good idea of much a company's shares are worth in the real world",
"title": ""
}
] |
fiqa
|
b9249f78f2e10312a67d190e101058c2
|
Annuities question - Equations of value
|
[
{
"docid": "c7cf50b1d08c74636ecff24bf8c02aa3",
"text": "These are the steps I'd follow: $200 today times (1.04)^10 = Cost in year 10. The 6 deposits of $20 will be one time value calculation with a resulting year 7 final value. You then must apply 10% for 3 years (1.1)^3 to get the 10th year result. You now have the shortfall. Divide that by the same (1.1)^3 to shift the present value to start of year 7. (this step might confuse you?) You are left with a problem needing 3 same deposits, a known rate, and desired FV. Solve from there. (Also, welcome from quant.SE. This site doesn't support LATEX, so I edited the image above.)",
"title": ""
},
{
"docid": "abdd072491ef76018f5ae6da88ba5c38",
"text": "The solution is x = 8.92. This assumes that Chuck's six years of deposits start from today, so that the first deposit accumulates 10 years of gain, i.e. 20*(1 + 0.1)^10. The second deposit gains nine years' interest: 20*(1 + 0.1)^9 and so on ... If you want to do this calculation using the formula for an annuity due, i.e. http://www.financeformulas.net/Future-Value-of-Annuity-Due.html where (formula by induction) you have to bear in mind this is for the whole time span (k = 1 to n), so for just the first six years you need to calculate for all ten years then subtract another annuity calculation for the last four years. So the full calculation is: As you can see it's not very neat, because the standard formula is for a whole time span. You could make it a little tidier by using a formula for k = m to n instead, i.e. So the calculation becomes which can be done with simple arithmetic (and doesn't actually need a solver).",
"title": ""
}
] |
[
{
"docid": "09848b9331b52609b3aa51f93f586f3a",
"text": "There is always some fine print, read it. I doubt there is any product out there that can guarantee an 8% return. As a counter example - a 70 yr old can get 6% in a fixed immediate annuity. On death, the original premium is retained by the insurance company. Whenever I read the prospectus of a VA, I find the actual math betrays a salesman who misrepresented the product. I'd be really curious to read the details for this one.",
"title": ""
},
{
"docid": "9dee813e8d2ce9340ec2beb8f7d87dfc",
"text": "\"An annuity is a product. In simple terms, you hand over a lump sum of cash and receive an agreed annual income until you die. The underlying investment required to reach that income level is not your concern, it's the provider's worry. So there is a huge mount of security to the retiree in having an annuity. It is worth pointing out that with simple annuities where one gives a lump sum of money to (typically) an insurance company, the annuity payments cease upon the death of the annuitant. If any part of the lump sum is still left, that money belongs to the company, not to the heirs of the deceased. Fancier versions of annuities cover the spouse of the annuitant as well (joint and survivor annuity) or guarantee a certain number of payments (e.g. 10-year certain) regardless of when the annuitant dies (payments for the remaining certain term go to the residual beneficiary) etc. How much of an annuity payment the company offers for a fixed lump sum of £X depends on what type of annuity is chosen; usually simple annuities give the maximum bang for the buck. Also, different companies may offer slightly different rates. So, why should one choose to buy an annuity instead of keeping the lump sum in a bank or in fixed deposits (CDs in US parlance), or invested in the stock market or the bond market, etc., and making periodic withdrawals from these assets at a \"\"safe rate of withdrawal\"\"? Safe rates of withdrawal are often touted as 4% per annum in the US, though there are newer studies saying that a smaller rate should be used. Well, safe rates of withdrawal are designed to ensure that the retiree does not use up all the money and is left destitute just when medical bills and other costs are likely to be peaking. Indeed, if all the money were kept in a sock at home (no growth at all), a 4% per annum withdrawal rate will last the retiree for 25 years. With some growth of the lump sum in an investment, somewhat larger withdrawals might be taken in good years, but that 4% is needed even when the investments have declined in value because of economic conditions beyond one's control. So, there are good things and bad things that can happen if one chooses to not buy an annuity. On the other hand, with an annuity, the payments will continue till death and so the retiree feels safer, as Chris mentioned. There is also the serenity in not having to worry how the investments are doing; that's the company's business. A down side, of course, is that the payments are fixed and if inflation is raging, the retiree still gets the same amount. If extra cash is needed one year for unavoidable expenses, the annuity will not provide it, whereas the lump sum (whether kept in a sock or invested) can be drawn on for the extra expense. Another down side is that any money remaining is gone, with nothing left for the heirs. On the plus side, the annuity payments are usually larger than those that the retiree will get via the safe rate of withdrawal method from the lump sum. This is because the insurance company is applying the laws of large numbers: many annuitants will not survive past their life expectancy, and their leftover monies are pure profit to the insurance company, often more than enough (when invested properly by the company) to pay those old codgers who continue to live past their life expectancy. Personally, I wouldn't want to buy an annuity with all my money, but getting an annuity with part of the money is worthwhile. Important: The annuity discussed in this answer is what is sometimes called a single-premium or an immediate annuity. It is purchased at the time of retirement with a single (large) lump sum payment. This is not the kind of annuity that is described in JAGAnalyst's answer which requires payment of (much smaller) premiums over many years. Search this forum for variable annuity to learn about these types of annuities.\"",
"title": ""
},
{
"docid": "85000bed497e6334aa780dbb0d8bbd83",
"text": "Annuities, like life insurance, are sold rather than bought. Once upon a time, IRAs inherited from a non-spouse required the beneficiary to (a) take all the money out within 5 years, or (b) choose to receive the value of the IRA at the time of the IRA owner's death in equal installments over the expected lifetime of the beneficiary. If the latter option was chosen, the IRA custodian issued the fixed-term annuity in return for the IRA assets. If the IRA was invested in (say) 15000 shares of IBM stock, that stock would then belong to the IRA custodian who was obligated to pay $x per year to the beneficiary for the next 23 years (say). There was no investment any more that could be transferred to another broker, or be sold and the proceeds invested in Facebook stock (say). Nor was the custodian under any obligation to do anything except pay $x per year to the beneficiary for the 23 years. Financial planners loved to get at this money under the old IRA rules by suggesting that if all the IRA money were taken out and invested in stocks or mutual funds through their company, the company would pay a guaranteed $y per year, would pay more than $y in each year that the investments did well, would continue payment until the beneficiary died (or till the death of the beneficiary or beneficiary's spouse - whoever died later), and would return the entire sum invested (less payouts already made, of course) in case of premature death. $y typically would be a little larger than $x too, because it factored in some earnings of the investment over the years. So what was not to like? Of course, the commissions earned by the planner and the lousy mutual funds and the huge surrender charges were always glossed over.",
"title": ""
},
{
"docid": "481708893828cf324c2970066f90a2ed",
"text": "The general concept is that your money will grow at an accelerating rate because you start getting interest paid on your returns in addition to the original investment. As a simple example, assume you invest $100 and get 10% interest per year paid annually. -At the end of the first year you have your $100 + $10 interest for a total of $110. -So you start the second year with $110 and so 10% would be $11 for a total of $121. -The third year you start with $121 so 10% would be $12.10 for a total of $133.10 See how the amount it goes up each year increases? If we were talking a higher initial amount or a larger number of years that can really add up. That is essence is compound interest. Most of the complicated looking formulas you see out there for compound interest are just shortcuts so you don't have to iteratively go through the above exercise a bunch of times to find out how much you would have after some number of years. This formula tells you how much you would have(A) after a certain number of years(t) at a given interest rate(r) assuming they pay interest n times per year, for example you would use 12 for n if it paid interest monthly instead of yearly. P represents the amount you started out with. If you keep investing monthly (as shown in your example) instead of just depositing it and letting it sit, you have to use a more complicated formula. Finance people refer to this as calculating the future value of an annuity. That formula looks like this: A = PMT [((1 + r)N - 1) / r] x (1+r) A : Is the amount you would have at the end of the time period. N : The number of compounding periods (months if you get interest calculated monthly) PMT : The total amount you are putting in each period (N) r: Just like before, the interest rate you are getting paid. Be sure to adjust this to a monthly number if N represents months (divide APR by 12)* *Most interest rates are quoted as APR, which is the annualized interest rate not counting compounding. Don't confuse this with APY, which has compounding built into it and is not appropriate for use in this formula. Inserting your example: r (monthly interest rate) = 15% APR / 12 = .0125 n = 30 years * 12 months/year = 360 months A = $150 x [((1 + .0125)360 - 1) / .0125] x (1+.0125) A = $1,051,473.09 (rounded)",
"title": ""
},
{
"docid": "24968d889f8165acac29fd0adf07240e",
"text": "\"The extent that you would have problems would depend on if the annuity is considered Qualified or Non-Qualified. If the annuity is qualified that means that the money that was put into it has never been taxed and a rollover to an IRA is simple. The possible issues here are tax issues and a CPA is likely the best person to answer this question. Two other things to consider in such an event is the loss of any 'living benefit' or 'death benefit'. Variable annuities have been through quite the evolution in the last 15 years. Death benefits have been around longer than living benefits but both are usually based on some derrivitive of a 'high water' mark of the variable sub accounts. You might want to ask Hartford the question \"\"...how will my living or death benefits be affected if I roll this over\"\".\"",
"title": ""
},
{
"docid": "9f38bd0a46bf85a3c29ba74acc1ff4e3",
"text": "\"Sometimes an assumptions is so fundamentally flawed that it essentially destroys the relevance and validity of any modelling outputs. \"\"Obviously, we're assuming the company can pay it back\"\" Is one of those assumptions. The person gets a notes stating that they will get $525 'IN ONE YEAR' You need to divide $525/(1+Cost of Capital)^n n being the number of periods to find out what the note will be worth today. Google 'Present Value of an Annuity' to deal with debt that is more complex than you have $500 now and give me $525 in a year...\"",
"title": ""
},
{
"docid": "f33e67e30613c29876555d2a8cce0588",
"text": "\"An index annuity is almost the same as Indexed Universal Life, except the equity-index annuity is an investment with a guaranteed minimum return, with sometimes a higher return that is a function of the gain in the stock market, but is not associated with a life insurance policy. After a time, you can convert the EIA to a lifetime income (the annuity part) or just cash it out. They often are very complicated, but are constructed by combining bonds with index options (puts) just like indexed universal life. Unfortunately these tend to have high fees and/or commissions, and high (early) surrender charges, which can make them a poor investment. Of course you could just \"\"roll your own\"\" by buying bonds and puts FINRAS bulletin on EIAs, pdf warning. Here's a description of one of these securities: pdf.\"",
"title": ""
},
{
"docid": "25c349cec0a4b8347e29078653079818",
"text": "Let's break this into two parts, the future value of the initial deposit, and the future value of the payments: D(1 + i)n For the future value of the payments A((1+i)n-1) / i) Adding those two formulas together will give you the amount of money that should be in your account at the end. Remember to make the appropriate adjustments to interest rate and the number of payments. Divide the interest rate by the number of periods in a year (four for quarterly, twelve for monthly), and multiply the number of periods (p) by the same number. Of course the monthly deposit amount will need to be in the same terms. See also: Annuity (finance theory) - Wikipedia",
"title": ""
},
{
"docid": "77f2fb35a2beff9e1f1c485393fb6fd7",
"text": "\"Hey guys I have a quick question about a financial accounting problem although I think it's not really an \"\"accounting\"\" problem but just a bond problem. Here it goes GSB Corporation issued semiannual coupon bonds with a face value of $110,000 several years ago. The annual coupon rate is 8%, with two coupons due each year, six months apart. The historical market interest rate was 10% compounded semiannually when GSB Corporation issued the bonds, equal to an effective interest rate of 10.25% [= (1.05 × 1.05) – 1]. GSB Corporation accounts for these bonds using amortized cost measurement based on the historical market interest rate. The current market interest rate at the beginning of the current year on these bonds was 6% compounded semiannually, for an effective interest rate of 6.09% [= (1.03 × 1.03) – 1]. The market interest rate remained at this level throughout the current year. The bonds had a book value of $100,000 at the beginning of the current year. When the firm made the payment at the end of the first six months of the current year, the accountant debited a liability for the exact amount of cash paid. Compute the amount of interest expense on these bonds for the last six months of the life of the bonds, assuming all bonds remain outstanding until the retirement date. My question is why would they give me the effective interest rate for both the historical and current rate? The problem states that the firm accounts for the bond using historical interest which is 10% semiannual and the coupon payments are 4400 twice per year. I was just wondering if I should just do the (Beginning Balance (which is 100000 in this case) x 1.05)-4400=Ending Balance so on and so forth until I get to the 110000 maturity value. I got an answer of 5474.97 and was wondering if that's the correct approach or not.\"",
"title": ""
},
{
"docid": "c883abf8ed36a71a6c5a99486ff7e32f",
"text": "\"Be very careful about terminology when talking about annuities. You used the phrase \"\"4% return\"\" in your question. What exactly do you mean by that? An annuity that pays out 4% of its principle is not giving you a \"\"4% return\"\" in the sense of ROI, because most of that was your money to begin with. But to achieve a true 4% return in the current environment where interest rates are at historic lows on anything safe (10 year UK Gilts at 0.91%) would make me very nervous about what the insurance company is investing my annuity in.\"",
"title": ""
},
{
"docid": "2bff6cd7047ca4577a71b8922e71219c",
"text": "First let's define some terms. Your accrued benefit is a monthly benefit payable at your normal retirement age (usually 65). It is usually a life-only benefit but may have a number of years guaranteed or may have a survivor piece. It is defined by a plan formula (ie, it is a defined benefit). A lump sum is how much that accrued benefit is worth right now. Lump sums are based on applicable interest rates and mortality tables specified by the IRS (interest rates are released monthly, mortality annually). Your plan can either use the same interest rates for a whole year, or they can use new ones each month. Affecting your lump sum is whether your accrued benefit is payable now (immediately, you are age 65), or later (deferred, you are now age 30). For example, instead of being paid an annuity assume you are paid just one payment of $1,000 on your 65th birthday. The lump sum of that for a 65 year old would be $1,000 since there would be no interest discount, and no chance of dying before payment. For a 30 year old, at 4% interest the lump sum would be about $237 (including mortality discount). At age 36 the lump sum is $246. So the lump sum will get bigger just because you get older. Very important is the interest discount. At age 30 in the example, 2% interest would produce a $467 lump sum. And at 6% $122. The bigger the rate, the smaller the lump sum because interest helps an amount now grow bigger in the future. To complicate things, since 2008 the IRS bases lump sums on 3 different interest rates. The monthy annuity payments made within 5 years of the lump sum date use the 1st rate, past 5 and within 20 years use the 2nd rate, and past that use the 3rd rate. Since you are age 30, all of your monthly annuity payments would be made after 20 years, so that makes it simple since we'll only have to look at the 3rd rate. When you reach age 45 the 2nd rate will kick in. Here is the table of interest rates published by the IRS: http://www.irs.gov/Retirement-Plans/Minimum-Present-Value-Segment-Rates You'll find your rates above on the 2013 line for Aug-12. That means your lump sum is being made in 2013 and it is being based on the month August 2012. Most likely your plan will use the same rates for its entire plan year. But what is your plan year? If it is the calendar year, then you would have a 5 month lookback for the rates. But if is a September to August plan year with a 1 month lookback, the rates would have changed between August and September. Your August lump sum would be based on 4.52%, your September on would be based on 5.58% (see the All line for Aug-13). For comparison, a 30 year old with a $100 annuity payable at age 65 would have a lump sum value of $3,011 at 4.52%, but a lump sum value of $1,931 at 5.58%. The change in your accrued benefit by month will obviously have some impact on the lump sum value, but not as much as the change in interest rates if there is one. The amount they actually contribute to the plan has nothing to do with the value of the lump sum though.",
"title": ""
},
{
"docid": "0a476021c07a157a45dea1b455012954",
"text": "Beware of surrender charges also Surrender Charges Many annuities will impose a surrender charge if the annuity is cashed in before a specific period of time. That period may run anywhere from 1 to 12 years. A typical surrender charge is one that starts at 7% in the first year of the contract, and declines by 1% per year thereafter until it reaches zero. The charge is made against the value of the investment when the annuity is surrendered, and its purpose (other than simply to make money for the insurance company) is to discourage a short-term investment by the purchaser. For that reason, an annuity should always be considered a long-term investment. In the typical fixed annuity, though, this charge will not apply provided no more than 10% of the investment is withdrawn per year. source: http://www.fool.com/retirement/annuities/annuities02.htm If you've held it for 10 years as you claim, you may not owe any or much in surrender charges, but you definitely want to know what the situation is before you make a move.",
"title": ""
},
{
"docid": "fdb012344bb1443fc5a22c7647a6ca73",
"text": "\"There is no equation. Only data that would help you come to the decision that's right for you. Assuming the 401(k) is invested in a stock fund of one sort or another, the choice is nearly the same as if you had $5K cash to either invest or pay debt. Since stock returns are not fixed, but are a random distribution that somewhat resembles a bell curve, median about 10%, standard deviation about 14%. It's the age old question of \"\"getting a guaranteed X% (paying the debt) or a shot at 8-10% or so in the market.\"\" This come up frequently in the decision to pre-pay mortgages at 4-5% versus invest. Many people will take the guaranteed 4% return vs the risk that comes with the market. For your decision, the 401(k) loan, note that the loan is due if you separate from the company for whatever reason. This adds an additional layer of risk and another data point to the mix. For your exact numbers, the savings is barely $50. I'd probably not do it. If the cards were 18%, I'd lean toward the loan, but only if I knew I could raise the cash to pay it back to not default.\"",
"title": ""
},
{
"docid": "84285f1c7b71bb6ca3ea25892aa61c50",
"text": "With the formula you are using you assume that the issued bond (bond A) is a perpetual. Given the provided information, you can't really do more than this, it's only an approximation. The difference could be explained by the repayment of the principal (which is not the case with a perpetual). I guess the author has calculated the bond value with principal repayment. You can get more insight in the calculation from the excel provided at this website: http://breakingdownfinance.com/finance-topics/bond-valuation/fixed-rate-bond-valuation/",
"title": ""
},
{
"docid": "fceae85b48ddff092e9d08092eecabbd",
"text": "You need to see that prospectus. I just met with some potential new clients today that wanted me to take a look at their investments. Turns out they had two separate annuities. One was a variable annuity with Allianz. The other was with some company named Midland Insurance (can't remember the whole name). Turns out the Allianz VA has a 10 year surrender contract and the Midland has a 14 year contract. 14 years!!! They are currently in year 7 and if they need any money (I'm hoping they at least have a 10% free withdrawal) they will pay 6% surrender on the Allianz and a 15% surrender on the other. Ironically enough, they guy who sold this to them is now in jail. No joke.",
"title": ""
}
] |
fiqa
|
89b8e3679c04ec6761b3c726b831050d
|
Want to buy expensive product online. Credit line on credit cards not big enough. How do “Preferred Account” programs work?
|
[
{
"docid": "6cc03efaaaeec43bd92ddad59c02ba53",
"text": "\"First and foremost - make sure where you are purchasing the product is a reputable organization. Secondly (coming from a biased computer geek) - be aware that Apple is a content trap. Now on to my answer to your question... How do \"\"Preferred Account\"\" programs work? They're \"\"Preferred\"\" because they tend to bring in more money to the lender. It may say No payments for 6 months but the fine print may have you being charged interest during those 6 months, meaning your new shiny computer will be costing more than the sticker price. The good side is that you don't have to send in any actual payments for 6 months, but be aware that you'll probably be paying more than advertised. What are the different ways I can do it? Your listed options 1 & 2 are both good ways to pay for your new computer. Yes, option 1 will charge you sales tax, but are you sure paying online excludes sales tax? Some states mandate it. Option 2 is a viable option too - probably your best option. 1st - there is possibly no sales tax with purchases made online, although there may be a delivery charge. 2nd - you're not committing to an additional monthly bill, you are essentially paying with cash, just directly from your bank account. No interest charge! 3rd - that little Visa logo is your friend. Purchases made through Visa & MasterCard (whether it's a credit or debit card) normally have an auto-extended warranty feature (you may want to verify with Visa before taking my word on it). Typically they double any manufacture's warranty. Lastly - you can always set up a PayPal account and link it to your bank account. Assuming the site you plan on purchasing the computer from accepts PayPal.\"",
"title": ""
},
{
"docid": "9f4c44d93e9656e5590d50d88174d087",
"text": "\"The preferred accounts are designed to hope you do one of several things: Pay one day late. Then charge you all the deferred interest. Many people think If they put $X a month aside, then pay just before the 6 months, 12 moths or no-payment before 2014 period ends then I will be able to afford the computer, carpet, or furniture. The interest rate they will charge you if you are late will be buried in the fine print. But expect it to be very high. Pay on time, but now that you have a card with their logo on it. So now you feel that you should buy the accessories from them. They hope that you become a long time customer. They want to make money on your next computer also. Their \"\"Bill Me Later\"\" option on that site as essentially the same as the preferred account. In the end you will have another line of credit. They will do a credit check. The impact, both positive and negative, on your credit picture is discussed in other questions. Because two of the three options you mentioned in your question (cash, debit card) imply that you have enough cash to buy the computer today, there is no reason to get another credit card to finance the purchase. The delayed payment with the preferred account, will save you about 10 dollars (2000 * 1% interest * 0.5 years). The choice of store might save you more money, though with Apple there are fewer places to get legitimate discounts. Here are your options: How to get the limit increased: You can ask for a temporary increase in the credit limit, or you can ask for a permanent one. Some credit cards can do this online, others require you to talk to them. If they are going to agree to this, it can be done in a few minutes. Some individuals on this site have even been able to send the check to the credit card company before completing the purchase, thus \"\"increasing\"\" their credit limit. YMMV. I have no idea if it works. A good reason to use the existing credit card, instead of the debit card is if the credit card is a rewards card. The extra money or points can be very nice. Just make sure you pay it back before the bill is due. In fact you can send the money to the credit card company the same day the computer arrives in the mail. Having the transaction on the credit card can also get you purchase protection, and some cards automatically extend the warranty.\"",
"title": ""
}
] |
[
{
"docid": "c6810de46ac8d987ed495b03c9fc5dce",
"text": "I have had my card blocked at home only rarely. One occasion comes to mind - I had bought something fairly large online late at night. No sooner had I clicked Purchase than my phone rang - the bank was asking had I actually just spent [$amount] at [$online store]? I said yes and that was that. A little later I made another purchase late at night on a different card. It went through, but when I tried to use the card the next day for something small in a store, it was declined. Embarrassed, I used a different card then called the bank. They said they had put the card on hold because of the online purchase for a large amount, even though they had let the purchase go through. They hadn't called me because it was late at night, and they hadn't given themselves any reasonable mechanisms to compensate for that (like calling me the next morning, emailing me, or the like) they'd just blocked the card. We had what you might call a frank and open exchange of views on the matter. Not all banks use the same strategies or software. I suggest: Far and away the simplest thing is just to have more than one card so that these declines are a momentary hiccup you might forget by the time you and your Rolex are out of the store.",
"title": ""
},
{
"docid": "1eb37df8d834d9a541269b26ec8971da",
"text": "\"Some features to be aware of are: How you prioritize these features will depend on your specific circumstances. For instance, if your credit score is poor, you may have to choose among cards you can get with that score, and not have much choice on other dimensions. If you frequently travel abroad, a low or zero foreign transaction fee may be important; if you never do, it probably doesn't matter. If you always pay the balance in full, interest rate is less important than it is if you carry a balance. If you frequently travel by air, an airline card may be useful to you; if you don't, you may prefer some other kind of rewards, or cash back. Cards differ along numerous dimensions, especially in the \"\"extra benefits\"\" area, which is often the most difficult area to assess, because in many cases you can't get a full description of these extra benefits until after you get the card. A lot of the choice depends on your personal preferences (e.g., whether you want airline miles, rewards points of some sort, or cash back). Lower fees and interest rates are always better, but it's up to you to decide if a higher fee of some sort outweighs the accompanying benefits (e.g., a better rewards rate). A useful site for finding good offers is NerdWallet.\"",
"title": ""
},
{
"docid": "d0037b6404e2ca86c87d38625211d3cb",
"text": "They have a minimum to discourage applications for that particular card. Every application costs them money because they have to pay the credit agencies to pull the applicant's credit history. So one way they save money and reduce their cost of business is to discourage people from applying if they're not creditworthy enough for that product. Credit card companies tailor their products into different income/credit brackets. Those who have less creditworthiness would be better suited for a different product than what you're referring, similar to those with greater creditworthiness.",
"title": ""
},
{
"docid": "a3fce490685e386e16b16c2e938b82cf",
"text": "Great question. First, my recommendation would be for you to get a card that does not have a yearly fee. There are many credit cards out there that provide cash back on your purchases or points to redeem for gift cards or other items. Be sure to cancel the credit card that you have now so you don't forget about that yearly fee. Canceling will have a temporary impact on your credit score if the credit card is your longest held line of credit. Second, it is recommended not to use more than 20% of all the available credit, staying above that line can affect your credit score. I think that is what you are hearing about running up large balances on your credit card. If you are worried about staying below the 20% line, you can always request a larger line of credit. Just keep paying it off each month though and you will be fine. You already have a history of credit if you have begun paying off your student loans.",
"title": ""
},
{
"docid": "7dcbbcc78bd1561999720f4fd276ad02",
"text": "Yeah I have credit cards now but his credit line got me jumped up from maybe a 200 to a 650 in a few months or a year or so. My bad I figured I posted it in the wrong sub! So if he cancels it, will this cause me to lose points? Considering the credit line is about 20K?",
"title": ""
},
{
"docid": "3f3d31bed042d43531acf79a60aae8d0",
"text": "\"Until the CARD act, credit card rules required that merchants had no minimum purchase requirement to use a card. New rules permit a minimum but it must be clearly posted. Update - Stores can now refuse small credit card charges is an excellent article which clarifies the rules. It appears that these rules apply to credit, not debit cards. So to be clear - the minimum do not apply to the OP as he referenced using a debit card. \"\"Superiority\"\"? Hm. I'd be a bit embarrassed to charge such small amounts. Although when cash in my wallet is very low, I may have little choice. Note, and disclaimer, I am 48, 30 years ago when I started using cards, there were no POS machines. Credit card transactions had a big device that got a card imprint and the merchant looked up to see if your card was stolen in a big book they got weekly/monthly. Times have changed, and debit cards may be faster, especially if with cash you give the cashier $5.37 for a $2.37 transaction, but the guy entered $5 already. This often takes a manager to clear up.\"",
"title": ""
},
{
"docid": "a2bca858601b7bc24a317dbaf20d6a38",
"text": "\"You have a lack of credit history. Lending is still tight since the recession and companies aren't as willing to take a gamble on people with no history. The secured credit card is the most direct route to building credit right now. I don't think you're going to be applicable for a department store card (pointless anyways and encourages wasteful spending) nor the gas card. Gas cards are credit cards, funded through a bank just like any ordinary credit card, only you are limited to gas purchases at a particular retailer. Although gas cards, department store cards and other limited usage types of credit cards have less requirements, in this post-financial crisis economy, credit is still stringent and a \"\"no history\"\" file is too risky for banks to take on. Having multiple hard inquiries won't help either. You do have a full-time job that pays well so the $500 deposit shouldn't be a problem for the secured credit card. After 6 months you'll get it back anyways. Just remember to pay off in full every month. After 6 months you'll be upgraded to a regular credit card and you will have established credit history.\"",
"title": ""
},
{
"docid": "28349274456d5728c148fd4f35165880",
"text": "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.",
"title": ""
},
{
"docid": "288aee3cde90d68f08dfb90dda778a6b",
"text": "\"You are correct. Credit card companies charge the merchant for every transaction. But the merchant isn't necessarily going to give you discount for paying in cash. The idea is that by providing more payment options, they increase sales, covering the cost of the transaction fee. That said, some merchants require a minimum purchase for using a credit card, though this may be against the policies of some issuers in the U.S. (I have no idea about India.) Also correct. They hope that you'll carry a balance so that they can charge you interest on it. Some credit cards are setup to charge as many fees as they possibly can. These are typically those low limit cards that are marketed as \"\"good\"\" ways to build up your credit. Most are basically scams, in the fact that the fees are outrageous. Update regarding minimum purchases: Apparently, Visa is allowing minimum purchase requirements in the U.S. of $10 or less. However, it seems that MasterCard still does not allow them, for the most part. Moral of the story: research the credit card issuers' policies. A further update regarding minimum purchases: In the US, merchants will be allowed to require a minimum purchase of up to $10 for credit card transactions. (I am guessing that prompted the Visa rule change mentioned above.) More detail can be found here in this answer, along with a link to the text of the bill itself.\"",
"title": ""
},
{
"docid": "b324d756f11286a3f2de6da4a67af60b",
"text": "\"In the UK, using a credit card adds a layer of protection for consumers. If something goes wrong or you bought something that was actually a scam, if you inform the credit card company with the necessary documents they will typically clear the balance for that purchase (essentially the burden of 'debt' is passed to them and they themselves will have to chase up the necessary people). Section 75 of the Consumer Credit Act I personally use my credit card when buying anything one would consider as \"\"consumer spending\"\" (tvs, furniture ect). I then pay off the credit card immediately. This gives me the normal benefits of the credit card (if you get cashback or points) PLUS the additional consumer credit protection on all my purchases. This, in my opinion is the most effective way of using your credit card.\"",
"title": ""
},
{
"docid": "a89bd74e7a3d5b571288ebb11b2dacc4",
"text": "\"I completely agree with @littleadv in favor of using the credit card and dispute resolution process, but I believe there are more important details here related to consumer protection. Since 1968, US citizens are protected from credit card fraud, limiting the out-of-pocket loss to $50 if your card is lost, stolen, or otherwise used without your permission. That means the bank can't make you pay more than $50 if you report unauthorized activity--and, nicely, many credit cards these days go ahead and waive the $50 too, so you might not have to pay anything (other than the necessary time and phone calls). Of course, many banks offer a $50 cap or no fees at all for fraudulent charges--my bank once happily resolved some bad charges for me at no loss to me--but banks are under no obligation to shield debit card customers from fraud. If you read the fine print on your debit card account agreement you may find some vague promises to resolve your dispute, but probably nothing saying you cannot be held liable (the bank is not going to lose money on you if they are unable to reverse the charges!). Now a personal story: I once had my credit card used to buy $3,000 in stereo equipment, at a store I had never heard of in a state I have never visited. The bank notified me of the surprising charges, and I was immediately able to begin the fraud report--but it took months of calls before the case was accepted and the charges reversed. So, yes, there was no money out of my pocket, but I was completely unable to use the credit card, and every month they kept on piling on more finance fees and late-payment charges and such, and I would have to call them again and explain again that the charges were disputed... Finally, after about 8 months in total, they accepted the fraud report and reversed all the charges. Lastly, I want to mention one more important tool for preventing or limiting loss from online purchases: \"\"disposable\"\", one-time-use credit card numbers. At least a few credit card providers (Citibank, Bank of America, Discover) offer you the option, on their websites, to generate a credit card number that charges your account, but under the limits you specify, including a maximum amount and expiration date. With one of these disposable numbers, you can pay for a single purchase and be confident that, even if the number were stolen in-transit or the merchant a fraud, they don't have your actual credit card number, and they can never charge you again. I have not yet seen this option for debit card customers, but there must be some banks that offer it, since it saves them a lot of time and trouble in pursuing defrauders. So, in short: If you pay with a credit card number you will not ever have to pay more than $50 for fraudulent charges. Even better, you may be able to use a disposable/one-time-use credit card number to further limit the chances that your credit is misused. Here's to happy--and safe--consumering!\"",
"title": ""
},
{
"docid": "074fefb0d464c1ed76289e41089e5ff8",
"text": "\"What you have is usually called a pre-paid credit card. You pay some money (Indian Rupees) to the credit card company, and then you can use the card to pay for purchases etc in foreign (non-Indian) currencies upto the remaining balance on the card. If a proposed charge exceeds the remaining balance, the transaction will be declined when you try to use the card. There might be multiple ways that the card is set up, e.g. it might be restricted to charge purchases denominated in US dollars alone, or you might be able to use it anywhere in the world (except India). The balance on the card might be denominated in INR, or in US$, say. In the latter case, the exchange rate at which your INR payment was converted into the $US balance is fixed and agreed to at the time of the original payment: you paid INR 70K (say) and the balance was set to US$ 1000 even though the exchange rate on the open market would have given you a few more US dollars. In the former case with the balance denominated in INR, a charge of US$ 100, say, would be converted to INR at a fixed agreed-upon rate, or at the current exchange rate that the Visa or MasterCard network is using, plus (typically) a 3% fee currency exchange fee, and your balance in INR will decrease accordingly. With all that as prologue, if you made a purchase from Walmart USA and later returned it for a credit, it should increase your credit card balance appropriately. You may be whacked with currency conversion fees along the way depending on how your card is set up, but with a US$-denominated card, a credit of US$100 should increase your card balance by US$100. So, that $US 100 can be spent on something else instead. In short, the card is your \"\"bank\"\" account. You cannot spend more than the remaining balance on the card just like you cannot withdraw more money from your bank account than you have in the account, and you can recharge your card by making more INR payments into it so as to increase the available balance. But it is like a current account in that you are unlikely to earn interest on the balance the way you do with a savings account. So what if you are back in India and have no further use of this card? Can you get your balance back as cash or deposit into your regular bank account? Call the Customer Help line, or read the card agreement you signed.\"",
"title": ""
},
{
"docid": "39bcb0e40e9aeb3a52b16e3a23dae31e",
"text": "\"Retail purchases are purchases made at retail, i.e.: as a consumer/individual customer. That would include any \"\"standard\"\" individual expenditure, but may exclude wholesale sales or purchases from merchants who identify themselves as service providers to businesses. Specifics of these limitations really depend on your card issuer, and you should inquire with the customer service at what are their specific eligibility requirements. As an example, here in the US many cards give high cash-back for gasoline purchases, but only at \"\"retail\"\" locations. That excludes wholesale/club sellers like Costco, for example.\"",
"title": ""
},
{
"docid": "2f1ba347564bf022cb2ff4282dfce309",
"text": "As long as you can be trusted with a Credit Card i find that if you have a setup that uses three accounts: 1. your Credit Card, 2. 2. a high interest internet account (most of these accounts don’t have fees), 3. a savings account. The Method that works for me is: 1st i calculate my fixed monthly bills i.e Rent and utilities and then transfer it into my high interest account. for the month whenever i make a purchase i transfer the money into the high interest account ( this way I can keep a running balance of what money I have left to spend in the month. Then when the Credit Card bill comes I transfer the money out of the high interest account across to pay off the Credit Card ( this way you generate interest on the money which you would have spent throughout the month and still maintain $0 of interest from the Credit Card) over a year you can generate at least enough money in interest to go out for dinner on one of free flights!",
"title": ""
},
{
"docid": "44af6e62a7fd75f9cf9513658df55b90",
"text": "Trick question dude. Can't be done. Sorry to tell you. I've been hit with this. Credit card companies do not make money on these customers. Why does Amex have an annual fee on all cards and an abnormally large transaction fee for merchants? Because they don't allow you to carry a balance (On traditional cards). Meaning they don't make money on interest, like the customers in question here.",
"title": ""
}
] |
fiqa
|
322de9b9b26edaaa351b6af3cb2c855e
|
Priced out of London property market. What are my accommodation investment options?
|
[
{
"docid": "d640aff8397e2ffdf5af9c49f1b3aa27",
"text": "Be radical! (I assume you are not working for a city bank getting paid “city wages” – e.g. you are one of the 99% of people in London or more “normal” income.) House prices and rents in London and anywhere within reasonable commuting distances are now so high that couples in reasonable jobs often have to rent rooms in shared houses (HMOs). This is due to so many people wishing to live/work in London and there not being enough new homes built. If you are looking at buying a property to rent out, you need the rent to be about double the interest payments on the mortgage – otherwise you will not be able to afford repairs, or cope when interest rates increase – (you could also get a tax bill that is more the your profit). Finding such a property is very hard in London, as the prices of homes have gone up a lot more in London then rents have. There are still some flats where the rent will cover the landlord’s costs, but not many. (Any landlord that brought more than a few years ago, is making a very nice profit in London, as the rents have gone up a lot since they brought – but are you willing to bet your life on the rents going up even more?) Moving a short distance out of London, does not help much. So look at somewhere like Manchester or Birmingham",
"title": ""
},
{
"docid": "60aa7183387ee773269ce2401430e4b0",
"text": "Real Estate is all local. In the United States, I can show you houses so high the rent on them is less than 1/3% of their value per month, eg. $1M House renting for less than $3500. I can also find 3 unit buildings (for say $200K) that rent for $3000/mo total rents. I might want to live in that house, but buy the triplex to rent out. You need to find what makes sense, and not buy out of impulse. A house to live in and a house to invest have two different sets of criteria. They may overlap, but if the strict Price/Rent were universal, there would be no variation. If you clarify your goal, the answers will be far more valuable.",
"title": ""
},
{
"docid": "b68c9e7304d736d1aa6ba5855c8f9e52",
"text": "NB - I live in Surrey and bought my house in January 2014. If you don't have a very social life, it does pay to stay outside London. Places outside London are cheap and you will get a better deal in relation to houses or flats as compared to London. I feel very priced out of the market regarding London mortgages I will strongly question you logic behind this ? Why only London ? Why not live in the commuter belt outside London. Good places to reside, good schools, nice neighbourhood and away from the hustle and bustle of London. Many of my colleagues commute from Cambridge and Oxford daily into Central London and they laugh at people who want to buy a house in London, just for the sake of buying a house. It seems that the housing market is generally in a bubble due to being distorted by the finance market London house market is different from the rest of UK. People from overseas tend to invest in London property market, so it is always inflated. Even the property tax hasn't deterred many. I could look into buying somewhere and renting it out You are trying to join the same people, because of whom you have been put out of the housing market. I strictly question this logic unless your mortgage is less than the rent you pay and what rent you get. Buy a roof over your head first, then think of profiting from property.",
"title": ""
}
] |
[
{
"docid": "a62f37b34eba5991155bb33948b3dbf5",
"text": "It might some but I'd wager it pushes the short-term rental pricing down (like hotels) while pushing the long-term rental and housing market prices up. If landlords can make way more in short-term rentals they are going to do that and limit the supply of long-term. The tourism sector may have increased revenue but by what extent I don't know. I'd wager that exploding rent and housing prices will negate any benefits for most residents and may end up costing them much more. This is why I think you should only be able to do it on your primary residence. Unless you want to be regulated like a hotel because if you have short-term rentals that you don't reside in, that is effectively what you are. Not being regulated the same as a hotel at that point only gives you an unfair loophole advantage to other short-term rentals.",
"title": ""
},
{
"docid": "47cea5f4c2bd6ef611d52e55975e7338",
"text": "I have done something similar to this myself. What you are suggesting is a sound theory and it works. The issues are (which is why it's the reason not everyone does it) : The initial cost is great, many people in their 20s or 30s cannot afford their own home, let alone buy second properties. The time to build up a portfolio is very long term and is best for a pension investment. it's often not best for diversification - you've heard not putting all your eggs in one basket? With property deposits, you need to put a lot of eggs in to make it work and this can leave you vulnerable. there can be lots of work involved. Renovating is a huge pain and cost and you've already mentioned tennants not paying! unlike a bank account or bonds/shares etc. You cannot get to your savings/investments quickly if you need to (or find an opportunity) But after considering these and deciding the plunge is worth it, I would say go for it, be a good landlord, with good quality property and you'll have a great nest egg. If you try just one and see how it goes, with population increase, in a safe (respectable) location, the value of the investment should continue to rise (which it doesn't in a bank) and you can expect a 5%+ rental return (very hard to find in cash account!) Hope it goes well!",
"title": ""
},
{
"docid": "61e08f0d238c2474a7eb648aac96c339",
"text": "\"TL;DR - go with something like Barry Ritholtz's All Century Portfolio: 20 percent total U.S stock market 5 percent U.S. REITs 5 percent U.S. small cap value 15 percent Pacific equities 15 percent European equities 10 percent U.S. TIPs 10 percent U.S. high yield corp bonds 20 percent U.S. total bond UK property market are absurdly high and will be crashing a lot very soon The price to rent ratio is certainly very high in the UK. According to this article, it takes 48 years of rent to pay for the same apartment in London. That sounds like a terrible deal to me. I have no idea about where prices will go in the future, but I wouldn't voluntarily buy in that market. I'm hesitant to invest in stocks for the fear of losing everything A stock index fund is a collection of stocks. For example the S&P 500 index fund is a collection of the largest 500 US public companies (Apple, Google, Shell, Ford, etc.). If you buy the S&P 500 index, the 500 largest US companies would have to go bankrupt for you to \"\"lose everything\"\" - there would have to be a zombie apocalypse. He's trying to get me to invest in Gold and Silver (but mostly silver), but I neither know anything about gold or silver, nor know anyone who takes this approach. This is what Jeremy Siegel said about gold in late 2013: \"\"I’m not enthusiastic about gold because I think gold is priced for either hyperinflation or the end of the world.\"\" Barry Ritholtz also speaks much wisdom about gold. In short, don't buy it and stop listening to your friend. Is buying a property now with the intention of selling it in a couple of years for profit (and repeat until I have substantial amount to invest in something big) a bad idea? If the home price does not appreciate, will this approach save you or lose you money? In other words, would it be profitable to substitute your rent payment for a mortgage payment? If not, you will be speculating, not investing. Here's an articles that discusses the difference between speculating and investing. I don't recommend speculating.\"",
"title": ""
},
{
"docid": "570adb7b6e52bfc95319ab740e704f12",
"text": "How about a slightly different approach. Invest in a duplex or trip/quadplex. Live in one unit, rent out the rest. Chances are you'll end up either paying nothing in total, or even making money as your tenants pay your bills for you. Depends a lot on your area and your willingness to deal with the crap of tenants, but have a look into it. You'll be surprised what you can buy in your area and the types of people you might end up living with you...",
"title": ""
},
{
"docid": "5a7975f7b904e476239cf8f0dc1eb4de",
"text": "\"If I buy property when the market is in a downtrend the property loses value, but I would lose money on rent anyway. So, as long I'm viewing the property as housing expense I would be ok. This is a bit too rough an analysis. It all depends on the numbers you plug in. Let's say you live in the Boston area, and you buy a house during a downtrend at $550k. Two years later, you need to sell it, and the best you can get is $480k. You are down $70k and you are also out two years' of property taxes, maintenance, insurance, mortgage interest maybe, etc. Say that's another $10k a year, so you are down $70k + $20k = $90k. It's probably more than that, but let's go with it... In those same two years, you could have been living in a fairly nice apartment for $2,000/mo. In that scenario, you are out $2k * 24 months = $48k--and that's it. It's a difference of $90k - $48k = $42k in two years. That's sizable. If I wanted to sell and upgrade to a larger property, the larger property would also be cheaper in the downtrend. Yes, the general rule is: if you have to spend your money on a purchase, it's best to buy when things are low, so you maximize your value. However, if the market is in an uptrend, selling the property would gain me more than what I paid, but larger houses would also have increased in price. But it may not scale. When you jump to a much larger (more expensive) house, you can think of it as buying 1.5 houses. That extra 0.5 of a house is a new purchase, and if you buy when prices are high (relative to other economic indicators, like salaries and rents), you are not doing as well as when you buy when they are low. Do both of these scenarios negate the pro/cons of buying in either market? I don't think so. I think, in general, buying \"\"more house\"\" (either going from an apartment to a house or from a small house to a bigger house) when housing is cheaper is favorable. Houses are goods like anything else, and when supply is high (after overproduction of them) and demand is low (during bad economic times), deals can be found relative to other times when the opposite applies, or during housing bubbles. The other point is, as with any trend, you only know the future of the trend...after it passes. You don't know if you are buying at anything close to the bottom of a trend, though you can certainly see it is lower than it once was. In terms of practical matters, if you are going to buy when it's up, you hope you sell when it's up, too. This graph of historical inflation-adjusted housing prices is helpful to that point: let me just say that if I bought in the latest boom, I sure hope I sold during that boom, too!\"",
"title": ""
},
{
"docid": "20da5e3454724a069f2da9ac07b7cca3",
"text": "The Motley Fool suggested a good rule of thumb in one of their articles that may be able to help you determine if the market is overheating. Determine the entire cost of rent for a piece of property. So if rent is $300/month, total cost over a year is $3600. Compare that to the cost of buying a similar piece of property by dividing the property price by the rent per year. So if a similar property is $90,000, the ratio would be $90,000/$3600 = 25. If the ratio is < 20, you should consider buying a place. If its > 20, there's a good chance that the market is overheated. This method is clearly not foolproof, but it helps quantify the irrationality of some individuals who think that buying a place is always better than renting. Additionally, Alex B helped me with two additional sources of information for this: Real Estate is local, all the articles here refer to the US housing market. Bankrate says purchase price / annual rate in the US has a long term average of 16.0. Fool says Purchase Price/Monthly Rent: 150 is good buy, 200 starts to get expensive This answer is copy pasted from a similar question (not the same so I did not vote to merge) linked here..",
"title": ""
},
{
"docid": "826957611902dd98805eec54b63208a0",
"text": "\"From April 2017 the plan is that there is now also going to be a \"\"Lifetime ISA\"\" (in addition to the Help to Buy ISA). Assuming those plans do not change, they government will give 25% after each year until you are 50, and the maximum you can put in per year will be £4000. Catches: You can only take the money out for certain \"\"life events\"\", currently: Buying a house below £450000 anywhere in the country (not just London). Passing 60 years of age. If you take it out before or for another reason, you lose the government bonus plus 5%, ie. it currently looks like you will be left with 95% of the total of the money you paid in. You cannot use the bonus payments from this one together with bonus payments from a Help to Buy ISA to buy a home. However you can transfer an existing Help to Buy ISA into this one come 2017. While you are not asking about pensions, it is worth mentioning for other readers that while 25% interest per year sounds great, if you use it for pension purposes, consider that this is after tax, so if you pay mostly 20% tax on your income the difference is not that big (and if your employer matches your contributions up to a point, then it may not be worth it). If you pay a significant amount of tax at 40% or higher, then it may not make sense for pension purposes. Tax bands and the \"\"rates\"\" on this ISA may change, of course. On the other hand, if you intend to use the money for a house/flat purchase in 2 or more years' time, then it would seem like a good option. For you specifically: This \"\"only\"\" covers £4000 per year, ie. not the full amount you talked about, but it is likely a good idea for you to spread things out anyway. That way, if one thing turns out to be not as good as other alternatives it has less impact - it is less likely that all your schemes will turn out to be bad luck. Within the M25 the £450000 limit may restrict you to a small house or flat in 5-10 years time. Again, prices may stall as they seem barely sustainable now. But it is hard to predict (measures like this may help push them upwards :) ). On the plus side, you could then still use the money for pension although I have a hard time seeing governments not adjusting this sort of account between now and your 60th birthday. Like pension funds, there is an element of luck/gambling involved and I think a good strategy is to spread things if you can.\"",
"title": ""
},
{
"docid": "d0255b03e9b26ac7886bc7db1ca7075a",
"text": "\"I agree with Joe Taxpayer that a lot of details are missing to really evaluate it as an investment... for context, I own a few investment properties including a 'small' 10+ unit apartment complex. My answer might be more than you really want/need, (it kind of turned into Real Estate Investing 101), but to be fair you're really asking 3 different questions here: your headline asks \"\"how effective are Condo/Hotel developments as investments?\"\" An answer to that is... sometimes, very. These are a way for you-the investor-to get higher rents per sq. ft. as an owner, and for the hotel to limit its risks and access additional development funding. By your description, it sounds like this particular company is taking a substantial cut of rents. I don't know this property segment specifically, but I can give you my insight for longer-term apartment rentals... the numbers are the same at heart. The other two questions you're implying are \"\"How effective is THIS condo/hotel development?\"\" and \"\"Should you buy into it?\"\" If you have the funds and the financial wherewithal to honestly consider this, then I am sure that you don't need your hand held for the investment pros/cons warnings of the last question. But let me give you some of my insight as far as the way to evaluate an investment property, and a few other questions you might ask yourself before you make the decision to buy or perhaps to invest somewhere else. The finance side of real estate can be simple, or complicated. It sounds like you have a good start evaluating it, but here's what I would do: Start with figuring out how much revenue you will actually 'see': Gross Potential Income: 365 days x Average Rent for the Room = GPI (minus) Vacancy... you'll have to figure this out... you'll actually do the math as (Vacancy Rate %) x GPI (equals) Effective Potential Income = EPI Then find out how much you will actually pocket at the end of the day as operating income: Take EPI (minus) Operating expenses ... Utilities ... Maintenace ... HOA ... Marketing if you do this yourself (minus) Management Expenses ... 40% of EPI ... any other 'fees' they may charge if you manage it yourself. ... Extra tax help? (minus) Debt Service ... Mortgage payment ... include Insurances (property, PMI, etc) == Net Operating Income (NOI) Now NOI (minus) Taxes == Net Income Net Income (add back) Depreciation (add back) sometimes Mortgage Interest == After-tax Cash Flows There are two \"\"quickie\"\" numbers real estate investors can spout off. One is the NOI, the other is the Cap Rate. In order to answer \"\"How effective is THIS development?\"\" you'll have to run the numbers yourself and decide. The NOI will be based on any assumptions you choose to make for vacancy rates, actual revenue from hotel room bookings, etc. But it will show you how much you should bring in before taxes each year. If you divide the NOI by the asking price of your unit (and then multiply by 100), you'll get the \"\"Cap Rate\"\". This is a rough estimate of the rate of return you can expect for your unit... if you buy in. If you come back and say \"\"well I found out it has a XX% cap rate\"\", we won't really be qualified to help you out. Well established mega investment properties (think shopping centers, office buildings, etc.) can be as low as 3-5 cap rates, and as high as 10-12. The more risky the property, the higher your return should be. But if it's something you like, and the chance to make a 6% return feels right, then that's your choice. Or if you have something like a 15% cap rate... that's not necessarily outstanding given the level of risk (uncertain vacancies) involved in a hotel. Some other questions you should ask yourself include: How much competition is there in the area for short-term lodging? This could drive vacancies up or down... and rents up or down as well How 'liquid' will the property (room) be as an asset? If you can just break even on operating expense, then it might still make sense as an investment if you think that it might appreciate in value AND you would be able to sell the unit to someone else. How much experience does this property management company have... (a) in general, (b) running hotels, and (c) running these kinds of condo-hotel combination projects? I would be especially interested in what exactly you're getting in return for paying them 40% of every booking. Seasonality? This will play into Joe Taxpayer's question about Vacancy Rates. Your profile says you're from TX... which hints that you probably aren't looking at a condo on ski slopes or anything, but if you're looking at something that's a spring break-esque destination, then you might still have a great run of high o during March/April/May/June, but be nearly empty during October/November/December. I hope that helps. There is plenty of room to make a more \"\"exact\"\" model of what your cash flows might look like, but that will be based on assumptions and research you're probably not making at this time.\"",
"title": ""
},
{
"docid": "466a1871498eb91d7f62f46feb6fa2e8",
"text": "The other thing to remember is seasonality. Just because monthly rent is $900/month doesn't guarantee that you'll bring in $900/month. Plenty of university towns have peak demand during the months of Aug/Sept when students are moving in, but you have to beg//plead//give discounted rent to keep units full during 'off-season' times. Assuming vacancy during 3 months/year, your average monthly rent is only $675. ($900 * 9 / 12) This may change the economics of your investment.",
"title": ""
},
{
"docid": "20ae132d01516ae7c708aed732a616e1",
"text": "Surely the yield should be Yield = (Rent - Costs) / Downpayment ? As you want the yield relative to your capital not to the property value. As for the opportunity cost part you could look at the risk free rate of return you could obtain, either through government bonds or bank accounts with some sort of government guarantee (not sure what practical terms are for this in Finland). The management fee is almost 30% of your rent, what does this cover? Is it possible to manage the property yourself, as this would give you a much larger cushion between rent and expenses.",
"title": ""
},
{
"docid": "9b390ab2b8987ad3f27153fc997b8bea",
"text": "This is a bit of an open-ended answer as certain assumptions must be covered. Hope it helps though. My concern is that you have 1 year of university left - is there a chance that this money will be needed to fund this year of uni? And might it be needed for the period between uni and starting your first job? If the answer is 'yes' to either of these, keep any money you have as liquid as possible - ie. cash in an instant access Cash ISA. If the answer is 'no', let's move on... Are you likely to touch this money in the next 5 years? I'm thinking house & flat deposits - whether you rent or buy, cars, etc, etc. If yes, again keep it liquid in a Cash ISA but this time, perhaps look to get a slightly better interest rate by fixing for a 1 year or 2 year at a time. Something like MoneySavingExpert will show you best buy Cash ISAs. If this money is not going to be touched for more than 5 years, then things like bonds and equities come into play. Ultimately your appetite for risk determines your options. If you are uncomfortable with swings in value, then fixed-income products with fixed-term (ie. buy a bond, hold the bond, when the bond finishes, you get your money back plus the yield [interest]) may suit you better than equity-based investments. Equity-based means alot of things - stocks in just one company, an index tracker of a well-known stock market (eg. FTSE100 tracker), actively managed growth funds, passive ETFs of high-dividend stocks... And each of these has different volatility (price swings) and long-term performance - as well as different charges and risks. The only way to understand this is to learn. So that's my ultimate advice. Learn about bonds. Learn about equities. Learn about gilts, corporate bonds, bond funds, index trackers, ETFs, dividends, active v passive management. In the meantime, keep the money in a Cash ISA - where £1 stays £1 plus interest. Once you want to lock the money away into a long-term investment, then you can look at Stocks ISAs to protect the investment against taxation. You may also put just enough into a pension get the company 'match' for contributions. It's not uncommon to split your long-term saving between the two routes. Then come back and ask where to go next... but chances are you'll know yourself by then - because you self-educated. If you want an alternative to the US-based generic advice, check out my Simple Steps concept here (sspf.co.uk/seven-simple-steps) and my free posts on this framework at sspf.co.uk/blog. I also host a free weekly podcast at sspf.co.uk/podcast (also on iTunes, Miro, Mixcloud, and others...) They were designed to offer exactly that kind of guidance to the UK for free.",
"title": ""
},
{
"docid": "865a5ea962ecbf23aa7d29e646c44738",
"text": "\"I think the real answer to your question here is diversification. You have some fear of having your money in the market, and rightfully so, having all your money in one stock, or even one type of mutual fund is risky as all get out, and you could lose a lot of your money in such a stock-market based undiversified investment. However, the same logic works in your rental property. If you lose your tennant, and are unable to find a new one right away, or if you have some very rare problem that insurance doesn't cover, your property could become very much not a \"\"break even\"\" investment very quickly. In reality, there isn't any single investment you can make that has no risk. Your assets need to be balanced between many different market-investments, that includes bonds, US stocks, European stocks, cash, etc. Also investing in mutual funds instead of individual stocks greatly reduces your risk. Another thing to consider is the benefits of paying down debt. While investments have a risk of not performing, if you pay off a loan with interest payments, you definitely will save the money you would have paid in interest. To be specific, I'd recommend the following plan -\"",
"title": ""
},
{
"docid": "de2f8020f2afe5a02fa537ebb9f85250",
"text": "\"To be completely honest, I think that a target of 10-15% is very high and if there were an easy way to attain it, everyone would do it. If you want to have such a high return, you'll always have the risk of losing the same amount of money. Option 1 I personally think that you can make the highest return if you invest in real estate, and actively manage your property(s). If you do this well with short term rental and/or Airbnb I think you can make healthy returns BUT it will cost a lot of time and effort which may diminish its appeal. Think about talking to your estate agent to find renters, or always ensuring your AirBnB place is in good nick so you get a high rating and keep getting good customers. If you're looking for \"\"passive\"\" income, I don't think this is a good choice. Also make sure you take note of karancan's point of costs. No matter what you plan for, your costs will always be higher than you think. Think about water damage, a tenant that breaks things/doesn't take care of stuff etc. Option 2 I think taking a loan is unnecessarily risky if you're in good financial shape (as it seems), unless you're gonna buy a house with a mortgage and live in it. Option 3 I think your best option is to buy bonds and shares. You can follow karancan's 100 minus your age rule, which seems very reasonable (personally I invest all my money in shares because that's how my father brought me up, but it's really a matter of taste. Both can be risky though bonds are usually safer). I think I should note that you cannot expect a return of 10% or more because, as everyone always says, if there were a way to guarantee it, everyone would do it. You say you don't have any idea how this works so I'd go to my bank and ask them. You probably have access to private banking so that should mean someone will be able to sit you down and talk you through. Also look at other banks that have better rates and/or pretend you're leaving your bank to negotiate a better deal. If I were you I'd invest in blue chips (big international companies listed on the main indeces (DAX, FTSE 100, Dow Jones)), or (passively managed) mutual funds/ETFs that track these indeces. Just remember to diversify by country and industry a bit. Note: i would not buy the vehicles/plans that my bank (no matter what they promise, and they promise a lot) suggest because if you do that then the bank always takes a cut off your money. TlDr, dont expect to make 10-15% on a passive investment and do what a lot of others do: shares and bonds. Also make sure you get a lot of peoples opinions :)\"",
"title": ""
},
{
"docid": "f34b5a00e27f0cd229ddb1bd5f026e18",
"text": "I am also from Malaysia and I just purchase a property around Klang Valley area. Property market is just like share market. You will never know when is the highest peak point and when is the lowest peak point. Yes. Not only you, but everyone of us. What I would say that, just buy according to your need and your financial status. If you feel that you need a comfortable place to stay rather than renting a room, and buying that property will not burden your financial status too much, why not go for it? The best time to purchase property is perhaps last year when world economic is down turn. But thing is over and can never go back. Since all of us don't have a crystal ball to tell the future, why not just act according to your heart and common sense (Buy according to need) ;)",
"title": ""
},
{
"docid": "05a2138741e77745d300937c6e2e859a",
"text": "\"I assume you've no debt - if you do then pay that off. I'd be tempted to put the money into property. If you look at property prices over the past 20 years or so, you can see returns can be very good. I bought a house in 1998 and sold it in 2003 for about 110% of the purchase price. Disclaimer, past performance is no guarantee of future returns! It's a fairly low risk option, property prices appear to be rising currently and it's always good to get your foot on the housing ladder as quickly as you can as prices can rise to the stage where even those earning quite a good salary cannot afford to buy. Of course you don't have to live in the house, a rental income can be very handy without tying you down too much. There are plenty of places in the UK where £60k will buy you a reasonable property with a rental income of £400-£500, it doens't have to be near where you live currently. Just to put a few more figures in - if you get a house for £50k and rent it for £400 a month (perfectly feasible where I live) then that's very close to a 10% return year on year. Plus any gains made by the price of the house. The main downside is you won't have easy access to the money and you will have to look after a tenant if you decide to rent it out. Also if you do buy a property make sure it is in a good state of repair, you don't want to have to pay for a new roof for example in a couple of years time. Ideally you would then sell the house around the time property prices peak and buy another when they bottom out again. Not easy to judge though! I'd review the Trust Fund against others if you decide to keep it there as 12% over 6 years isn't great, although the stock market has been depressed so it may compare favouribly. Keep some \"\"rainy day\"\" money spare if you can.\"",
"title": ""
}
] |
fiqa
|
e4d55dbbf78f0183656f3587b42a9c54
|
What drives the value of a stock? [duplicate]
|
[
{
"docid": "8a1da1decc09e1158d46e7961ff60b4c",
"text": "For XOM if you were lucky enough to purchase on 20 Jan 16, at 73.18/share and sold on 15 July at 94.95 you would achieve a 29% return in six months. Awesome. You'd also get a dividend payment or two adding another percentage point per to your returns. The one year chart for FB shows it increasing from ~95/share to ~129. Yet no dividend was paid. However, the 35.7% YTD for 2016 should make anyone happy. Both of these require excellent timing, and those kind of returns are unsustainable over the long haul. Many people simply hold stocks. Having the dividend is a nice bonus to some growth. Why to people buy stocks? For profit. Sometimes dividend payers offer the best option, sometimes not.",
"title": ""
}
] |
[
{
"docid": "34bbcb90aefee6b1b90f85ab10a1b6d5",
"text": "While there are many very good and detailed answers to this question, there is one key term from finance that none of them used and that is Net Present Value. While this is a term generally associate with debt and assets, it also can be applied to the valuation models of a company's share price. The price of the share of a stock in a company represents the Net Present Value of all future cash flows of that company divided by the total number of shares outstanding. This is also the reason behind why the payment of dividends will cause the share price valuation to be less than its valuation if the company did not pay a dividend. That/those future outflows are factored into the NPV calculation, actually performed or implied, and results in a current valuation that is less than it would have been had that capital been retained. Unlike with a fixed income security, or even a variable rate debenture, it is difficult to predict what the future cashflows of a company will be, and how investors chose to value things as intangible as brand recognition, market penetration, and executive competence are often far more subjective that using 10 year libor rates to plug into a present value calculation for a floating rate bond of similar tenor. Opinion enters into the calculus and this is why you end up having a greater degree of price variance than you see in the fixed income markets. You have had situations where companies such as Amazon.com, Google, and Facebook had highly valued shares before they they ever posted a profit. That is because the analysis of the value of their intellectual properties or business models would, overtime provide a future value that was equivalent to their stock price at that time.",
"title": ""
},
{
"docid": "0f467cbe27dbe7e76823d12fcb70efe9",
"text": "The price of a shares reflects the expected future returns of that company. If it does not someone will notice and buy until it does. Look at this chart http://www.finanzen.net/chart/Arcandor (click on max), that's a former DAX company, so one of the largest german companys. Now it's bankrupt. Why do you think you are the only one who is going to notice? There are millions of people and even more computers, some a going to be smarter than you. Of course that does not happen to everyone but who knows. Is Volkswagen going to survive the current crisis? Probably. Is it coming back to former glory in the next half year? Who knows? Here comes the obvious solution: Don't buy single stocks, spread it out over many companies, some will shine, some will plument and you get the average. Oh that's an index, how convinent. Now if there were a way to save on all these transaction costs you're incurring...",
"title": ""
},
{
"docid": "bddbceba5540cf233b6ac80b6426420c",
"text": "\"The Dow Jones Industrial Average (DJIA) is a Price-weighted index. That means that the index is calculated by adding up the prices of the constituent stocks and dividing by a constant, the \"\"Dow divisor\"\". (The value of the Dow divisor is adjusted from time to time to maintain continuity when there are splits or changes in the roster.) This has the curious effect of giving a member of the index influence proportional to its share price. That is, if a stock costing $100 per share goes up by 1%, that will change the index by 10 times as much as if a stock costing $10 per share goes up by the same 1%. Now look at the price of Google. It's currently trading at just a whisker under $700 per share. Most of the other stocks in the index trade somewhere between $30 and $150, so if Google were included in the index it would contribute between 5 and 20 times the weight of any other stock in the index. That means that relatively small blips in Google's price would completely dominate the index on any given day. Until June of 2014, Apple was in the same boat, with its stock trading at about $700 per share. At that time, Apple split its stock 7:1, and after that its stock price was a little under $100 per share. So, post-split Apple might be a candidate to be included in the Dow the next time they change up the components of the index. Since the Dow is fixed at 30 stocks, and since they try to keep a balance between different sectors, this probably wouldn't happen until they drop another technology company from the lineup for some reason. (Correction: Apple is in the DJIA and has been for a little over a year now. Mea culpa.) The Dow's price-weighting is unusual as stock indices go. Most indices are weighted by market capitalization. That means the influence of a single company is proportional to its total value. This causes large companies like Apple to have a lot of influence on those indices, but since market capitalization isn't as arbitrary as stock price, most people see that as ok. Also, notice that I said \"\"company\"\" and not \"\"stock\"\". When a company has multiple classes of share (as Google does), market-cap-weighted indices include all of the share classes, while the Dow has no provision for such situations, which is another, albeit less important, reason why Google isn't in the Dow. (Keep this in mind the next time someone offers you a bar bet on how many stocks are in the S&P 500. The answer is (currently) 505!) Finally, you might be wondering why the Dow uses such an odd weighting in its calculations. The answer is that the Dow averages go back to 1896, when Charles Dow used to calculate the averages by hand. If your only tools are a pencil and paper, then a price-weighted index with only 30 stocks in it is a lot easier to calculate than a market-cap-weighted index with hundreds of constituents. About the Dow Jones Averages. Dow constituents and prices Apple's stock price chart. The split in 2014 is marked. (Note that prices before the split are retroactively adjusted to show a continuous curve.)\"",
"title": ""
},
{
"docid": "0d133fdf8af7ed7e81a929aefa9fb736",
"text": "The company gets it worth from how well it performs. For example if you buy company A for $50 a share and it beats its expected earnings, its price will raise and lets say after a year or two it can be worth around $70 or maybe more.This is where you can sell it and make more money than dividends.",
"title": ""
},
{
"docid": "3d468a0e6187ebb28e046806b9f0ccf5",
"text": "\"Your explanation is nearly perfect and not \"\"hand wavy\"\" at all. Stock prices reflect the collective wisdom of all participating investors. Investors value stocks based on how much value they expect the stock to produce now and in the future. So, the stability of the stock prices is a reflection of the accuracy of the investors predictions. Investor naivity can be seen as a sequence of increasingly sophisticated stock pricing strategies: If investors were able to predict the future perfectly, then all stock prices would rise at the same constant rate. In theory, if a particular investor is able to \"\"beat the market\"\", it is because they are better at predicting the future profits of companies (or they are lucky, or they are better at predicting the irrational behavior of other investors......)\"",
"title": ""
},
{
"docid": "05516c497d6f1837c83f65431ab6d7ab",
"text": "There are multiple factors at play that drive stock price movements, but one that can be visualized is that stocks can be priced relative to other (similar stocks). When one stock price goes up without fundamental changes (i.e. daily market noise/movements), it becomes slightly more expensive relative to it's peers. Opportunists will sell the now slightly more expensive stock, while others may buying the slightly cheaper (relatively) peer stock. Imagine millions of transactions like this happening throughout each hour, downward selling pressure on a stock that rises too fast in value relative to it's peers or the market, and upward buying pressure on stocks that are relatively cheaper than it's peers. It pushes two stocks towards an equilibrium that is directionally the same. Another way to think of it is lets say tomorrow there is $10B in net new dollars moved into buy orders for stocks that comes from net selling of bonds (this is also partly why bonds/stocks are generally inversely related). That money goes to buys stocks ABC, XYZ, EFG. As the price of those goes up with more buying pressure, stocks JKL, MNO, PQR are relatively a tad cheaper, so some money starts to flow into there. Repeat until you get a large majority of the stocks that buyers are willing to buy and you can see why stocks move in the same direction a lot of times.",
"title": ""
},
{
"docid": "8f5425400aa00739f218859eaffbd248",
"text": "\"The argument you are making here is similar to the problem I have with the stronger forms of the efficient market hypothesis. That is if the market already has incorporated all of the information about the correct prices, then there's no reason to question any prices and then the prices never change. However, the mechanism through which the market incorporates this information is via the actors buying an selling based on what they see as the market being incorrect. The most basic concept of this problem (I think) starts with the idea that every investor is passive and they simply buy the market as one basket. So every paycheck, the index fund buys some more stock in the market in a completely static way. This means the demand for each stock is the same. No one is paying attention to the actual companies' performance so a poor performer's stock price never moves. The same for the high performer. The only thing moving prices is demand but that's always up at a more or less constant rate. This is a topic that has a lot of discussion lately in financial circles. Here are two articles about this topic but I'm not convinced the author is completely serious hence the \"\"worst-case scenario\"\" title. These are interesting reads but again, take this with a grain of salt. You should follow the links in the articles because they give a more nuanced understanding of each potential issue. One thing that's important is that the reality is nothing like what I outline above. One of the links in these articles that is interesting is the one that talks about how we now have more indexes than stocks on the US markets. The writer points to this as a problem in the first article, but think for a moment why that is. There are many different types of strategies that active managers follow in how they determine what goes in a fund based on different stock metrics. If a stocks P/E ratio drops below a critical level, for example, a number of indexes are going to sell it. Some might buy it. It's up to the investors (you and me) to pick which of these strategies we believe in. Another thing to consider is that active managers are losing their clients to the passive funds. They have a vested interest in attacking passive management.\"",
"title": ""
},
{
"docid": "55765f7687c9396197d73e17d5c30658",
"text": "Since I'm missing the shortest and simplest answer, I'll add it: A car also doesn't offer dividends, yet it's still worth money. A $100 bill doesn't offer dividends, yet people are willing to offer services, or goods, or other currencies, to own that $100 bill. It's the same with a stock. If other people are willing to buy it off you for a price X, it's worth at least close to price X to you. In theory the price X depends on the value of the assets of the company, including unknown values like expected future profits or losses. Speaking from experience as a trader, in practice it's very often really just price X because others pay price X.",
"title": ""
},
{
"docid": "d1d17cab7820e2dde13a9add87fa3ebb",
"text": "Analysts normally (oxymoron here) gauge their targets on where the stock is currently and more importantly where it has been. Except for in the case of say a Dryships where it was a hundred dollar stock and is now in the single digits, it is safe to assume that Apple for instance was well over $ 700 and is now at $500, and that a price guidance of $ 580 is not that remarkable and a not so difficult level to strike. Kind of like a meteorologist; fifty percent chance of rain. Analysts and weathermen.Hard to lose your job when your never really wrong. Mr Zip, Over and outta here",
"title": ""
},
{
"docid": "b0d570729d6309ccf9878653379d3654",
"text": "The literal answer to your question 'what determines the price of an ETF' is 'the market'; it is whatever price a buyer is willing to pay and a seller is willing to accept. But if the market price of an ETF share deviates significantly from its NAV, the per-share market value of the securities in its portfolio, then an Authorized Participant can make an arbitrage profit by a transaction (creation or redemption) that pushes the market price toward NAV. Thus as long as the markets are operating and the APs don't vanish in a puff of smoke we can expect price will track NAV. That reduces your question to: why does NAV = market value of the holdings underlying a bond ETF share decrease when the market interest rate rises? Let's consider an example. I'll use US Treasuries because they have very active markets, are treated as risk-free (although that can be debated), and excluding special cases like TIPS and strips are almost perfectly fungible. And I use round numbers for convenience. Let's assume the current market interest rate is 2% and 'Spindoctor 10-year Treasury Fund' opens for business with $100m invested (via APs) in 10-year T-notes with 2% coupon at par and 1m shares issued that are worth $100 each. Now assume the interest rate goes up to 3% (this is an example NOT A PREDICTION); no one wants to pay par for a 2% bond when they can get 3% elsewhere, so its value goes down to about 0.9 of par (not exactly due to the way the arithmetic works but close enough) and Spindoctor shares similarly slide to $90. At this price an investor gets slightly over 2% (coupon*face/basis) plus approximately 1% amortized capital gain (slightly less due to time value) per year so it's competitive with a 3% coupon at par. As you say new bonds are available that pay 3%. But our fund doesn't hold them; we hold old bonds with a face value of $100m but a market value of only $90m. If we sell those bonds now and buy 3% bonds to (try to) replace them, we only get $90m par value of 3% bonds, so now our fund is paying a competitive 3% but NAV is still only $90. At the other extreme, say we hold the 2% bonds to maturity, paying out only 2% interest but letting our NAV increase as the remaining term (duration) and thus discount of the bonds decreases -- assuming the market interest rate doesn't change again, which for 10 years is probably unrealistic (ignoring 2009-2016!). At the end of 10 years the 2% bonds are redeemed at par and our NAV is back to $100 -- but from the investor's point of view they've forgone $10 in interest they could have received from an alternative investment over those 10 years, which is effectively an additional investment, so the original share price of $90 was correct.",
"title": ""
},
{
"docid": "1920b12c965b6e8b83ad3c79708f019b",
"text": "Companies pay their employees in stocks and stock options, so they have an incentive towards increasing a company's share price. There are many elements that go into a stock's price. For example, if you hold a stock for eternity you should be indifferent if the expected present value of all its future dividends (i.e. earnings) equals the price you paid for it. Also, buy-back policies and voting rights determine stock price as well. The theory is that since shareholders want return on their investments they would promote company executives in such a way that their incentives are aligned to increase the share price.",
"title": ""
},
{
"docid": "afc87e138f5ad7836364c72b04e864f2",
"text": "News about a company is not the only thing that affects its stock's price. There is also supply and demand. That, of course, is influenced by news, but it is not the only actor. An insider, with a large position in their company's stock, may want to diversify his overall portfolio and thus need to sell a large amount of stock. That may be significant enough to increase supply and likely reduce the stock's price somewhat. That brings me to another influence on stock price: perception. Executives, and other insiders with large positions in their company's stock, have to be careful about how and when they sell some of that stock as to not worry the markets. Many investors watch insider selling to gauge the health of the company. Which brings me to another important point. There are many things that may be considered news which is material to a certain company and its stock. It is not just quarterly filings, earnings reports and such. There is also news related to competitors, news about the economy or a certain sector, news about some weather event that affects a major supplier, news about a major earthquake that will impact the economy of a nation which can then have knock-on effects to other economies, etc... There are also a lot of investors with varying needs which will influence supply and demand. An institutional investor, needing to diversify, may reduce their position in a stock and thus increase supply enough that it impacts the stock's price. Meanwhile, individual investors will make their transactions at varying times during the day. In the aggregate, that may have significant impacts on supply and demand. The overall point being that there are a lot of inputs and a lot of actors in a complicated system. Even if you focus just on news, there are many things that fall into that category. News does not come out at regular intervals and it does not necessarily spread evenly. That alone could make for a highly variable environment.",
"title": ""
},
{
"docid": "eb0b832c419be0fca81b784603de9143",
"text": "Earnings per share are not directly correlated to share price. NV Energy, the company you cited as an example, is an electric utility. The growth patterns and characteristics of utilities are well-defined, so generally speaking the value of the stock is driven by the quality of the company's cash flow. A utility with a good history of dividend increases, a dividend that is appropriate given the company's fiscal condition, (ie. A dividend that is not more than 80% of earnings) and a good outlook will be priced competitively. For other types of companies cash flow or even profits do not matter -- the prospects of future earnings matter. If a growth stock (say Netflix as an example) misses its growth projections for a quarter, the stock value will be punished.",
"title": ""
},
{
"docid": "306e4dbc38dd9989c1d6bd8e12f8a6bc",
"text": "\"What you need to do is go to yahoo finance and look at different stock's P/E ratios. You'll quickly see that the stocks can be sorted by this number. It would be an interesting exercise to get an idea of why P/E isn't a fixed number, how certain industries cluster around a certain number, but even this isn't precise. But, it will give you an idea as to why your question has no answer. \"\"Annual earnings are $1. What is the share price?\"\" \"\"Question has no answer\"\"\"",
"title": ""
},
{
"docid": "3d9a087db7ac36a435de1783db63916d",
"text": "\"What you are seeking is termed \"\"Alpha\"\", the mispricing in the market. Specifically, Alpha is the price error when compared to the market return and beta of the stock. Modern portfolio theory suggests that a portfolio with good Alpha will maximize profits for a given risk tolerance. The efficient market hypotheses suggests that Alpha is always zero. The EMH also suggests that taxes, human effort and information propagation delays don't exist (i.e. it is wrong). For someone who is right, the best specific answer to your question is presented Ben Graham's book \"\"The Intelligent Investor\"\" (starting on page 280). And even still, that book is better summarized by Warren Buffet (see Berkshire Hathaway Letters to Shareholders). In a great disservice to the geniuses above it can be summarized much further: closely follow the company to estimate its true earnings potential... and ignore the prices the market is quoting. ADDENDUM: And when you have earnings potential, calculate value with: NPV = sum(each income piece/(1+cost of capital)^time) Update: See http://finance.fortune.cnn.com/2014/02/24/warren-buffett-berkshire-letter/ \"\"When Charlie Munger and I buy stocks...\"\" for these same ideas right from the horse's mouth\"",
"title": ""
}
] |
fiqa
|
198cd7e5b10ed8adfddf1c5ff06f0bb7
|
Construction loan for new house replacing existing mortgaged house?
|
[
{
"docid": "441cb33517b78809ab0bb9a2dcf44c46",
"text": "So let's assume some values to better explain this. For simplicity, all of these are in thousands: So in this example, you're going to destroy $250 in value, pay off the existing $150 loan and have to invest $300 in to build the new house and this example doesn't have enough equity to cover it. You typically can't get a loan for much more than the (anticipated) property value. Basically, you need to get a construction loan to cover paying off the existing loan plus whatever you want to spend to pay for the new house minus whatever you're planning to contribute from savings. This new loan will need to be for less than the new total market value. The only way this will work out this way is if you bring significant cash to closing, or you owe less than the lot value on the current property. Note, that this is in effect a simplification. You can spend less building a house than it's worth when you're done with it, etc., but this is the basic way it would work - or NOT work in most cases.",
"title": ""
},
{
"docid": "d43fcc68268ff0da832453bd4ae2fc5f",
"text": "\"Presumably the existing house has some value. If you demolish the existing house, you are destroying that value. If the value of the new house is significantly more than the value of the old house, like if you're talking about replacing a small, run-down old house worth $50,000 with a big new mansion worth $10,000,000, then the value of the old house that is destroyed might just get lost in the rounding errors for all practical purposes. But otherwise, I don't see how you would do this without bringing cash to the table basically equal to what you still owe on the old house. Presumably the new house is worth more than the old, so the value of the property when you're done will be more than it was before. But will the value of the property be more than the old mortgage plus the new mortgage? Unless the old mortgage was almost paid off, or you bring a bunch of cash, the answer is almost certainly \"\"no\"\". Note that from the lienholder's point of view, you are not \"\"temporarily\"\" reducing the value of the property. You are permanently reducing it. The bank that makes the new loan will have a lien on the new house. I don't know what the law says about this, but you would have to either, (a) deliberately destroy property that someone else has a lien on while giving them no compensation, or (b) give two banks a lien on the same property. I wouldn't think either option would be legal. Normally when people tear down a building to put up a new building, it's because the value of the old building is so low as to be negligible compared to the value of the new building. Either the old building is run-down and getting it into decent shape would cost more than tearing it down and putting up a new building, or at least there is some benefit -- real or perceived -- to the new building that makes this worth it.\"",
"title": ""
}
] |
[
{
"docid": "97a18181ea7766c38540dd8c3eadfd38",
"text": "Just as a renter doesn't care what the landlord's mortgage is, the buyer of a house shouldn't care what the seller paid, what the current mortgage is, or any other details of the seller's finances. Two identical houses may be worth $400K. One still has a $450K loan, the other is mortgage free. You would qualify for the same value mortgage on both houses. All you and your bank should care about is that the present mortgage is paid or forgiven by the current mortgage holder so your bank can have first lien, and you get a clean title. To answer the question clearly, yes, it's common for a house with a mortgage to be sold, mortgage paid off, and new mortgage put in place. The profit or loss of the homeowner is not your concern.",
"title": ""
},
{
"docid": "1ce16917eb1b24ba0bc42750a62d3cad",
"text": "\"This is the best tl;dr I could make, [original](http://www.news.com.au/finance/economy/australian-economy/issuing-new-loans-against-unrealised-capital-gains-has-created-an-australian-house-of-cards/news-story/853e540ce0a8ed95d5881a730b6ed2c9) reduced by 87%. (I'm a bot) ***** > THE Australian mortgage market has &quot;Ballooned&quot; due to banks issuing new loans against unrealised capital gains of existing investment properties, creating a $1.7 trillion &quot;House of cards&quot;, a new report warns. > The report describes the system as a &quot;Classic mortgage Ponzi finance model&quot;, with newly purchased properties often generating net rental income losses, adversely impacting upon cash flows. > Melbourne&#039;s median house price has risen by 12.7 per cent over the past year to $695,500, with Brisbane up 3 per cent to $488,757, Adelaide 5.2 per cent to $430,109, Hobart 13.6 per cent to $383,438 and Canberra 12.9 per cent to $575,173. ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/6z9ea1/issuing_new_loans_against_unrealised_capital/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ \"\"Version 1.65, ~207582 tl;drs so far.\"\") | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr \"\"PM's and comments are monitored, constructive feedback is welcome.\"\") | *Top* *keywords*: **property**^#1 **per**^#2 **cent**^#3 **report**^#4 **market**^#5\"",
"title": ""
},
{
"docid": "250a7730477a33972e154998d713b752",
"text": "You're in the same situation I'm in (bought new house, didn't sell old house, now renting out old house). Assuming that everything is stable, right now I'd do something besides pay down your new mortgage. If you pay down the mortgage at your old house, that mortgage payment will go away faster than if you paid down the one on the new house. Then, things start to get fun. You then have a lot more free cash flow available to do whatever you like. I'd tend to do that before searching for other investments. Then, once you have the free cash flow, you can look for other investments (probably a wise risk) or retire the mortgage on your residence earlier.",
"title": ""
},
{
"docid": "6a30438a8e0fe678ad8874732fadef31",
"text": "In short, your scenario could work in theory, but is not realistic... Generally speaking, you can borrow up to some percentage of the value of the property, usually 80-90% though it can vary based on many factors. So if your property currently has a value of $100k, you could theoretically borrow a total of $80-90k against it. So how much you can get at any given time depends on the current value as compared to how much you owe. A simple way to ballpark it would be to use this formula: (CurrentValue * PercentageAllowed) - CurrentMortgageBalance = EquityAvailable. If your available equity allowed you to borrow what you wanted, and you then applied it to additions/renovations, your base property value would (hopefully) increase. However as other people mentioned, you very rarely get a value increase that is near what you put into the improvements, and it is not uncommon for improvements to have no significant impact on the overall value. Just because you like something about your improvements doesn't mean the market will agree. Just for the sake of argument though, lets say you find the magic combination of improvements that increases the property value in line with their cost. If such a feat were accomplished, your $40k improvement on a $100k property would mean it is now worth $140k. Let us further stipulate that your $40k loan to fund the improvements put you at a 90% loan to value ratio. So prior to starting the improvements you owed $90k on a $100k property. After completing the work you would owe $90k on what is now a $140k property, putting you at a loan to value ratio of ~64%. Meaning you theoretically have 26% equity available to borrow against to get back to the 90% level, or roughly $36k. Note that this is 10% less than the increase in the property value. Meaning that you are in the realm of diminishing returns and each iteration through this process would net you less working capital. The real picture is actually a fair amount worse than outlined in the above ideal scenario as we have yet to account for any of the costs involved in obtaining the financing or the decreases in your credit score which would likely accompany such a pattern. Each time you go back to the bank asking for more money, they are going to charge you for new appraisals and all of the other fees that come out at closing. Also each time you ask them for more money they are going to rerun your credit, and see the additional inquires and associated debt stacking up, which in turn drops your score, which prompts the banks to offer higher interest rates and/or charge higher fees... Also, when a bank loans against a property that is already securing another debt, they are generally putting themselves at the back of the line in terms of their claim on the property in case of default. In my experience it is very rare to find a lender that is willing to put themselves third in line, much less any farther back. Generally if you were to ask for such a loan, the bank would insist that the prior commitments be paid off before they would lend to you. Meaning the bank that you ask for the $36k noted above would likely respond by saying they will loan you $70k provided that $40k of it goes directly to paying off the previous equity line.",
"title": ""
},
{
"docid": "623dfa0df8931700ed0fa255c994972d",
"text": "\"This seems to be a very emotional thing for people and there are a lot of conflicting answers. I agree with JoeTaxpayer in general but I think it's worth coming at it from a slightly different angle. You are in Canada and you don't get to deduct anything for your mortgage interest like in the US, so that simplifies things a bit. The next thing to consider is that in an amortized mortgage, the later payments include increasingly more principal. This matters because the extra payments you make earlier in the loan have much more impact on reducing your interest than those made at the end of the loan. Why does that matter? Let's say for example, your loan was for $100K and you will end up getting $150K for the sale after all the transaction costs. Consider two scenarios: If you do the math, you'll see that the total is the same in both scenarios. Nominally, $50K of equity is worth the same as $50K in the bank. \"\"But wait!\"\" you protest, \"\"what about the interest on the loan?\"\" For sure, you likely won't get 2.89% on money in a bank account in this environment. But there's a big difference between money in the bank and equity in your house: you can't withdraw part of your equity. You either have to sell the house (which takes time) or you have to take out a loan against your equity which is likely going to be more expensive than your current loan. This is the basic reasoning behind the advice to have a certain period of time covered. 4 months isn't terrible but you could have more of a cushion. Consider things like upcoming maintenance or improvements on the house. Are you going to need a new roof before you move? New driveway or landscape improvements? Having enough cash to make a down-payment on your next home can be a huge advantage because you can make a non-contingent offer which will often be accepted at a lower value than a contingent offer. By putting this money into your home equity, you essentially make it inaccessible and there's an opportunity cost to that. You will also earn exact 0% on that equity. The only benefit you get is to reduce a loan which is charging you a tiny rate that you are unlikely to get again any time soon. I would take that extra cash and build more cushion. I would also put as much money into any tax sheltered investments as you can. You should expect to earn more than 2.89% on your long-term investments. You really aren't in debt as far as the house goes as long as you are not underwater on the loan: the net value of that asset is positive on your balance sheet. Yes you need to keep making payments but a big account balance covers that. In fact if you hit on hard times and you've put all your extra cash into equity, you might ironically not being able to make your payments and lose the home. One thing I just realized is that since you are in Canada, you probably don't have a fixed-rate on your mortgage. A variable-rate loan does make the calculation different. If you are concerned that rates may spike significantly, I think you still want to increase your cushion but whether you want to increase long-term investments depends on your risk tolerance.\"",
"title": ""
},
{
"docid": "b93a5d77409254fa60210ce84930525a",
"text": "\"The first red-flag here is that an appraisal was not performed on an as-is basis - and if it could not be done, you should be told why. Getting an appraisal on an after-improvement basis only makes sense if you are proposing to perform such improvements and want that factored in as a basis of the loan. It seems very bizarre to me that a mortgage lender would do this without any explanation at all. The only way this makes sense is if the lender is only offering you a loan with specific underwriting guidelines on house quality (common with for instance VA-loans and how they require the roof be of a certain maximum age - among dozens of other requirements, and many loan products have their own standards). This should have been disclosed to you during the process, but one can certainly never assume anyone will do their job properly - or it may have only mentioned in some small print as part of pounds of paper products you may have been offered or made to sign already. The bank criteria is \"\"reasonable\"\" to the extent that generally mortgage companies are allowed to set underwriting criteria about the current condition of the house. It doesn't need to be reasonable to you personally, or any of us - it's to protect lender profits by aiding their risk models. Your plans and preferences don't even factor in to their guidelines. Not all criteria are on a a sliding scale, so it doesn't necessarily matter how well you meet their other standards. You are of course correct that paying for thousands of dollars in improvements on a house you don't own is lunacy, and the fact that this was suggested may on it's own suggest you should cut your losses now and seek out a different lender. Given the lender being uncooperative, the only reason to stick with it seems to be the sunk cost of the appraisal you've already paid for. I'd suggest you specifically ask them why they did not perform an as-is appraisal, and listen to the answer (if you can get one). You can try to contact the appraiser directly as well with this question, and ask if you can have the appraisal strictly as-is without having a new appraisal. They might be helpful, they might not. As for taking the appraisal with you to a new bank, you might be able to do this - or you might not. It is strictly up to each lender to set criteria for appraisals they accept, but I've certainly known of people re-using an appraisal done sufficiently recently in this way. It's a possibility that you will need to write off the $800 as an \"\"education expense\"\", but it's certainly worth trying to see if you can salvage it and take it with you - you'll just have to ask each potential lender, as I've heard it go both ways. It's not a crazy or super-rare request - lenders backing out based on appraisal results should be absolutely normal to anyone in the finance business. To do this, you can just state plainly the situation. You paid for an appraisal and the previous lender fell through, and so you would like to know if they would be able to accept that and provide you with a loan without having to buy a whole new appraisal. This would also be a good time to talk about condition requirements, in that you want a loan on an as-is basic for a house that is inhabitable but needs cosmetic repair, and you plan to do this in cash on your own time after the purchase closes. Some lenders will be happy to do this at below 75%-80% LTV, and some absolutely do not want to make this type of loan because the house isn't in perfect condition and that's just what their lending criteria is right now. Based on description alone, I don't think you really should need to go into alternate plans like buy cash and then get a home equity loan to get cash out, special rehab packages, etc. So I'd encourage you to try a more straight-forward option of a different lender, as well as trying to get a straight answer on their odd choice of appraisal order that you paid for, before trying anything more exotic or totally changing your purchase/finance plans.\"",
"title": ""
},
{
"docid": "7e907d422e9d3d798ba1f276f896040e",
"text": "\"Assumption - you live in a country like Australia, which has \"\"recourse\"\" mortgages. If you buy the apartment and take out a mortgage, the bank doesn't care too much if your apartment gets built or not. If the construction fails, you still owe the bank the money.\"",
"title": ""
},
{
"docid": "f9ea72f98104d3270a942ed21b839709",
"text": "You could consider turning your current place into a Rental Property. This is more easily done with a fixed rate loan, and you said you have an ARM. The way it would work: If you can charge enough rent to cover your current mortgage plus the interest-difference on your new mortgage, then the income from your rental property can effectively lower the interest rate on your new home. By keeping your current low rate, month-after-month, you'll pay the market rate on your new home, but you'll also receive rental income from your previous home to offset the increased cost. Granted, a lot of your value will be locked up in equity in your former home, and not be easily accessible (except through a HELOC or similar), but if you can afford it, it is a good possibility.",
"title": ""
},
{
"docid": "c805b4bd5c0bdcc9a481645e470d3ae8",
"text": "You're effectively looking for a mortgage for a new self-build house. At the beginning, you should be able to get a mortgage based on the value of the land only. They may be willing to lend more as the build progresses. Try to find a company that specializes in this sort of mortgage.",
"title": ""
},
{
"docid": "3110b4b6766a0e1dac9a4b4944d29138",
"text": "\"Construction loans are typically short term that then get rolled into conventional mortgages at the end of the construction period. Since the actual construction loan is short term, you cannot combine it with a long-term land loan as well. You could do the two separate loans up front to buy the land and finance the construction, then at the end roll both into a conventional mortgage to close out the land and construction loans. This option will only work if you do all three through the same lender. Trying to engage various lenders will require a whole new refinance process, which I very much doubt you would want to go through. These are sometimes called combo loans, since they aggregate several different loan products in one \"\"transaction.\"\" Not a lot of places do land loans, so I would suggest first find a lender that will give you a land loan and set an appoint with a loan representative. Explain what you are trying to do and see what they can offer you. You might have better luck with credit unions as well instead of traditional banks.\"",
"title": ""
},
{
"docid": "7f398ad2294afdfaf8c2e0f39a65b251",
"text": "The underlying investment is usually somewhat independent of your mortgage, since it encompasses a bundle of mortgages, and not only yours. It works similarly to a fund. When, you pay off the old mortgage while re-financing, the fund receives the outstanding debt in from of cash, which can be used to buy new mortgages.",
"title": ""
},
{
"docid": "b22c2489d586e3c1cfc01bb3f21219c3",
"text": "If you intend to flip this property, you might consider either a construction loan or private money. A construction loan allows you to borrow from a bank against the value of the finished house a little at a time. As each stage of the construction/repairs are completed, the bank releases more funds to you. Interest accrues during the construction, but no payments need to be made until the construction/repairs are complete. Private money works in a similar manner, but the full amount can be released to you at once so you can get the repairs done more quickly. The interest rate will be higher. If you are flipping, then this higher interest rate is simply a cost of doing business. Since it's a private loan, you ca structure the deal any way you want. Perhaps accruing interest until the property is sold and then paying it back as a single balloon payment on sale of the property. To find private money, contact a mortgage broker and tell them what you have in mind. If you're intending to keep the property for yourself, private money is still an option. Once the repairs are complete, have the bank reassess the property value and refinance based on the new amount. Pay back the private loan with equity pulled from the house and all the shiny new repairs.",
"title": ""
},
{
"docid": "e5d0aae8c372fa841d206c133d72eb68",
"text": "The cleanest way to accomplish this is to make the purchase of your new house contingent on the sale of your old one. Your offer should include that contingency and a date by which your house needs to sell to settle the contract. There will also likely be a clause that lets the seller cancel the contract within a period of time (like 24-48 hours) if another offer is received. This gives you (the buyer) at least an opportunity to either sell the house or come up with financing to complete the deal. For example, suppose you make an offer to buy a house for $300,000 contingent on the sale of your house, which the seller accepts. In the meantime, the seller gets an offer of $275,000 in cash (no contingency). The seller has to notify you of the offer and give you some time to make good on your offer, either by selling your house or obtaining $300,000 in financing. If you cannot, the seller can accept the cash offer. This is just a hypothetical example; the offer can have whatever clauses you agree to, but since sale contingencies benefit the buyer, the seller will generally want some compensation for that benefit, e.g. a larger offer or some other clause that benefits them. Or do I find a house to buy first, set a closing date far out and then use that time to sell my current one? Most sellers will not want to set a closing date very far out. Contingency clauses are far more common. In short, yes it's possible, and any competent realtor should be able to handle it. It also may mean that you have to either make a higher offer to compensate for the contingency and to dissuade the seller from entertaining other offers, or sell your home for less than you'd like to get the cash sooner. You can weigh those costs against the cost of financing the new house until yours sells.",
"title": ""
},
{
"docid": "928f578d51d5e2b352fe5022b90e524e",
"text": "If they own the old house outright, they can mortgage it to you. In many jurisdictions this relieves you of the obligation to chase for payment, and of any worry that you won't get paid, because a transfer of ownership to the new owner cannot be registered until any charge against a property (ie. a mortgage) has been discharged. The cost of to your friends of setting up the mortgage will be less than the opulent interest they are offering you, and you will both have peace of mind. Even if the sale of the old house falls through, you will still be its mortgagee and still assured of repayment on any future sale (or even inheritance). Complications arise if the first property is mortgaged. Although second mortgages are possible (and rank behind first mortgages in priority of repayment) the first mortgagee generally has a veto on the creation of second mortgages.",
"title": ""
},
{
"docid": "7ded606c0cebdfa826fce881e5532323",
"text": "\"To some extent, I suppose, most people are okay with paying Some taxes. But, as they teach in Intro to Economics, \"\"Decisions are made on the margin\"\". Few are honestly expecting to get away with paying no taxes at all. They are instead concerned about how much they spend on taxes, and how effectively. The classic defense of taxes says \"\"Roads and national defense and education and fire safety are all important.\"\" This is not really the problem that people have with taxes. People have problems with gigantic ongoing infrastructure boondoggles that cost many times what they were projected to cost (a la Boston's Big Dig) while the city streets aren't properly paved. People don't have big problems with a city-run garbage service; they have problems with the garbagemen who get six-figure salaries plus a guaranteed union-protected job for life and a defined-benefit pension plan which they don't contribute a penny to (and likewise for their health plans). People don't have a big problem with paying for schools; they have a big problem with paying more than twice the national average for schools and still ending up with miserable schools (New Jersey). People have a problem when the government issues bonds, invests the money in the stock market for the public employee pension plan, projects a 10% annual return, contractually guarantees it to the employees, and then puts the taxpayers on the hook when the Dow ends up at 11,000 instead of ~25,000 (California). And people have a problem with the attitude that when they don't pay taxes they're basically stealing that money, or that tax cuts are morally equivalent to a handout, and the insinuation that they're terrible people for trying to keep some of their money from the government.\"",
"title": ""
}
] |
fiqa
|
b0c021b551f0e5b3cc31690d12184ef5
|
Efficient International money transfer
|
[
{
"docid": "4dbccce9bfdb3d5448498fda524912d6",
"text": "Typical wire transfers are not with 4-5%; but it all depends on the bank that does the transfer. You can chose to send ('wire') the money in source currency or in US $; the former, the target bank in the US does the conversion (so pick one that adds no or little spread); the latter, the sending bank does the conversion (so ask about their fees/spreads). I have multiple times transferred money across the ocean (though not from Japan), and never paid more than 0.3% + ~40 $ flat. It should be possible to get te same range. Note that if you look around for current offers, you might be easily able to even make some money on it - some US banks are eager for new money, and offer 200+$ bonus if you open an account and bring (significant =15k$+) new money to them.",
"title": ""
},
{
"docid": "c393b2a11daf7865f68881dbb8913a11",
"text": "Wiring is the best way to move large amounts of money from one country to another. I am sure Japanese banks will allow you to exchange your Japanese Yen into USD and wire it to Canada. I am not sure if they will be able to convert directly from JPY to CND and wire funds in CND. If you can open a USD bank account in Canada, that might make things easier.",
"title": ""
}
] |
[
{
"docid": "08921e6ff179ad1d23307d2cf828f157",
"text": "\"This is not a problem. SWIFT does not need the Beneficiary Account Currency. The settlement account [or the Instruction amount] is of interest to the Banks. As I understand your agreement with client is they pay you \"\"X\"\" EUR. That is what would be specified on the SWIFT along with your details as beneficiary [Account Number etc]. Once the funds are received by your bank in Turkey, they will get EUR. When they apply these funds to your account in USD, they will convert using the standard rates. Unless you are a large customer and have special instructions [like do not credit if funds are received in NON-USD or give me a special rate or Call me and ask me what I want to do etc]. It typically takes 3-5 days for an international wire depending on the countries and currencies involved. Wait for few more days and then if not received, you have to ask your Client to mention to his Bank that Beneficiary is claiming non-receipt of funds. The Bank that initiated the transfer can track the wire not the your bank which is supposed to receive the funds.\"",
"title": ""
},
{
"docid": "2059fc80a2f76d37f6cc93401c2bd359",
"text": "Generally in a SWIFT transaction, there are 4 Banks involved [at times 2 or 3 or at times even 6]. The 4 Banks are Sender [Originator of Payment]; Sender's correspondent, Receiver's Correspondent, Receiver [Or beneficiary Bank] All these 4 Banks charge for making a transfer. In SHA; the charges of Sender and Senders correspondent are levied to Customer [who initiates the payment] and the Receivers Correspondent and Receiver charges are to beneficiary. In OUR all the charges of 4 Banks are to the Customer and in BEN all the charges of 4 Banks are to the Beneficiary. Or am I wrong to assume that transaction costs would be covered by that 15USD and in reality the 15USD are on top of transaction costs? As explained above it is incorrect assumption. In this case, the charges will be more. So best is go with SHA. This gives a better view of charges. On a EUR to USD transactions, there would typically be only 3 Banks in the chain. And depending on the Bank, it could also be just 2 Banks involved.",
"title": ""
},
{
"docid": "ff8c228fa00407ba410e26d425901054",
"text": "\"For the purposes of report generation, I would recommend that you present the data in the currency of the user's home country. You could present another indicator, if needed, to indicate that a specific transaction was denominated in a foreign currency, where the amount represents the value of the foreign-denominated transaction in the user's home country Currency. For example: Airfare from USA to London: $1,000.00 Taxi from airport to hotel: $100.00 (in £) In terms of your database design, I would recommend not storing the data in any one denomination or reference currency. This would require you to do many more conversions between currencies that is likely to be necessary, and will create additional complexity where in some cases, you will need to do multiple conversions per transaction in and out of your reference currency. I think it will be easier for you to store multiple currencies as themselves, and not in a separate reference currency. I would recommend storing several pieces of information separately for each transaction: This way, you can create a calculated Amount for each transaction that is not in the user's \"\"home\"\" currency, whereas you would need to calculate this for all transactions if you used a universal reference currency. You could also get data from an external source if the user has forgotten the conversion rate. Remember that there are always fees and variations in the exchange rate that a user will get for their home country's currency, even if they change money at the same place at two different times on the same day. As a result, I would recommend building in a simple form that allows a user to enter how much they exchanged and how much they got back to calculate the exchange rate. So for example, let's say I have $ 200.00 USD and I exchanged $ 100.00 USD for £ 60.00, and there was a £ 3.00 fee for the exchange. The exchange rate would be 0.6, and when the user enters a currency conversion, your site could create three separate transactions such as: USD Converted to £: $100.00 £ Received from Exchange: £ 60.00 Exchange Fee: £ 3.00 So if the user exchanged currency and then ran a balance report by Currency, you could either show them that they now have $ 100.00 USD and £ 57.00, or you could alternatively choose to show the £ 57.00 that they have as $95.00 USD instead. If you were showing them a transaction report, you could also show the fee denominated in dollars as well. I would recommend storing your balances and transactions in their own currencies, as you will run into some very interesting problems otherwise. For example, let's say you used a reference currency tied to the dollar. So one day I exchange $ 100.00 USD for £ 60.00. In this system I would still have 100 of my reference currency. However, if the next day, the exchange rate falls and $ 1.00 USD is only worth £ 0.55, and I change my £ 60.00 back into USD, I will get approxiamately $ 109.09 USD back for my £ 60.00. If I then go and buy something for $ 100.00 USD, the balance of the reference currency would be at 0, but I will still have $ 9.09 USD in my pocket as a result of the fluctuating currency values! That is why I'd recommend storing currencies as themselves, and only showing them in another currency for convenience using calculations done \"\"on the fly\"\" at report runtime. Best of luck with your site!\"",
"title": ""
},
{
"docid": "5587d59254ae75427a684740897fd2d4",
"text": "Depending what country you are from, there may be better alternatives to transfer money internationally. Opening a bank account is complicated, costs money, and international bank transfers are remarkably expensive.",
"title": ""
},
{
"docid": "116c17b0185831018526406ebd813464",
"text": "The right answer to this question really depends on the size of the transfer. For larger transfers ($10k and up) the exchange rate is the dominant factor, and you will get the best rates from Interactive Brokers (IB) as noted by Paul above, or OANDA (listed by user6714). Under $10k, CurrencyFair is probably your best bet; while the rates are not quite as good as IB or OANDA, they are much better than the banks, and the transaction fees are less. If you don't need to exchange the currency immediately, you can put in your own bids and potentially get better rates from other CurrencyFair users. Below $1000, XE Trade (also listed by user6714) has exchange rates that are almost as good, but also offers EFT transfers in and out, which will save you wire transfer fees from your bank to send or receive money to/from your currency broker. The bank wire transfer fees in the US can be $10-$30 (outgoing wires on the higher end) so for smaller transfers this is a significant consideration you need to look into; if you are receiving money in US, ING Direct and many brokerage accounts don't charge for incoming wires - but unless you have a commercial bank account with high balances, expect to spend $10-$20 minimum for outgoing. European wire transfer fees are minimal or zero in most cases, making CurrencyFair more appealing if the money stays in Europe. Below $100, it's rarely worth the effort to use any of the above services; use PayPal or MoneyBookers, whatever is easiest. Update: As of December 2013, CurrencyFair is temporarily suspending operations for US residents: Following our initial assessment of regulatory changes in the United States, including changes arising from the Dodd-Frank Act, CurrencyFair will temporarily withdraw services for US residents while we consider these requirements and how they impact our business model. This was a difficult and very regretful decision but we are confident we will be able to resume services in the future. The exact date of re-activation has not yet been determined and may take some time. We appreciate your patience and will continue communicating our status and expected return.",
"title": ""
},
{
"docid": "9e7ade037d44f4b9595d38d7ea099389",
"text": "The website http://currencyfair.com/ provides a service which gives you both a decent exchange rate (about 1% off from mid-market rate) and a moderately low fee for the transfer: 4 USD for outgoing ACH in the US, 10 USD for same-day US wire. For the reverse (sending money from the US to EU) the fees are: 3 EUR for an ACH, 8 EUR for a same-day EUR wire. It has been online for quite a while, so I assume its legit, but I'd do a transfer for a smaller sum first, to see if there are any problems, and then a second transfer for the whole sum.",
"title": ""
},
{
"docid": "8e0683a8583aa27b8e29bce069b34820",
"text": "It is not ! Of course you can transfer your monies to your account in another country. Its a different story if you were doing it for someone else and if the the money was not legitimate - then it would shade off into money laundering.",
"title": ""
},
{
"docid": "311332c16f52022baed996f2c7cdfc26",
"text": "You could use paypal to transfer money. You can pay with paypal and your UK contact could transfer the money to his bank account through paypal. I just received money this way from the US and paid 9 EUR for this. Receiving the funds is as quickly as clicking a button on the paypal site. Transfering it (without costs) took 1-3 days). It is by far the easiest way. If you are uncomfortable using paypal, the other option would be through your own bank account, where you would transfer using IBAN/SWIFT. The SWIFT bank account is usually the IBAN code plus a branch code. Often it is difficult to find the branch code, in that case you can use the IBAN+XXX. In the latter things might be delayed, but I actually haven't noticed the delay yet, since international transfer always seem to take between 1 and 10 days. The international transfering of money costs, except if it is within the EU region. The way to transfer money through Internet banking differs, from bank to bank. They keywords you need to look for are: SEPA, SWIFT, IBAN or international transfer.",
"title": ""
},
{
"docid": "eb9a03241f0728bbb281cd981a8ef674",
"text": "Depending on how tech savvy your client is you could potentially use bitcoin. There is some take of indian regulators stopping bitcoin exchanges, meaning it might be hard to get your money out in your local country but the lack of fees to transfer and not getting killed on the exchange rate every time has a huge impact, especially if your individual transaction sizes are not huge.",
"title": ""
},
{
"docid": "9fea2316fbdf92a6a9f2072df1000cf8",
"text": "\"I am not sure about transferwise and how they work, but generally when I had to transfer money across countries, I ended up using a foreign currency/transfer company who needed the destination account details i.e. a GBP account in the UK in your case, and money from the source account. Basically that means your father would need to open an EUR account, probably in an EU country (is this an option?) but may be in the UK is fine too depending on transfer fees. And a GBP account in the UK, perhaps see if there is a better business account than HSBC around, I have used them as well as Santander before. The only FX transaction done in this straightforward set up is the one performed by the specialised company (there are a few) - and their spread (difference between interbank i.e. \"\"official\"\" and your price) is likely to be around 1.0 - 1.5%. The other expenses are transfer fees to the FX company account, say a flat fee of $25 for the SWIFT payment. The full amount less the spread above then goes to your UK GBP account. There are still the running costs of both EUR and GBP accounts of course, but here the advice would be just to shop around for offers/free banking periods etc. Point being, given the saving in FX conversion, it might still be a better overall deal than just letting HSBC deal with it all.\"",
"title": ""
},
{
"docid": "658753afb2ce69e32d23b16aa02a4b7e",
"text": "If I understand TransferWise’s Supported Countries page correctly, you could use their service. I believe it should be cheaper than having the bank convert. I've been very happy with the service and use it regularly.",
"title": ""
},
{
"docid": "bb7552c1ff46cd7722042c55aa395f87",
"text": "RoyalBank provides a no fee transfer service (no fee in the sense that there is no per transfer fee aside from the spread). There is monthly fee if you keep less than 1500 or so on the american side. http://www.rbcroyalbank.com/usbanking/cross-border-transfer.html",
"title": ""
},
{
"docid": "bd6817e4cdc5230ba683aa08909bea15",
"text": "I would certainly hope to make the transfer by wire - the prospect of popping cross the border with several million dollars in the trunk seems... ill fated. I suppose I'm asking what sort of taxes, duties, fees, limits, &c. would apply Taxes - None. It is your money, and you can transfer it as you wish. You pay taxes on the income, not on the fact of having money. Reporting - yes, there's going to be reporting. You'll report the origin of the money, and whether all the applicable taxes have been paid. This is for the government to avoid money laundering. But you're going to pay all the taxes, so for transfer - you'll just need to report (and maybe, for such an amount, actually show the tax returns to the bank). Fees - shop around. Fees differ, like any other product/service costs on the marketplace.",
"title": ""
},
{
"docid": "3a3ace553b8d5770299f9fc3f60b1b86",
"text": "I've done this for many years, and my method has always been to get a bank draft from my Canadian bank and mail it to my UK bank. The bank draft costs $7.50 flat fee and the mail a couple of dollars more. That's obviously quite a lot to pay on $100, so I do this only every six months or so and make the regular payments out of my UK account. It ends up being only a couple of percent in transaction costs, and the exchange rate is the bank rate.",
"title": ""
},
{
"docid": "5eef390d48857296621a5fd38aab8005",
"text": "Several possibilities come to mind: Several online currency-exchange brokers (such as xe.com and HiFx) offer very good exchange rates and no wire transfer fees (beyond what your own bank might charge you). Get French and American accounts at banks that are part of the Global ATM alliance: BNP Paribas in France and Bank of America in the USA. This will eliminate the ATM fee. Get an account at a bank that has branches in both countries. I've used HSBC for this purpose.",
"title": ""
}
] |
fiqa
|
02d9e8acb2820b38b294ca4fc6cf71ac
|
What are some sources of information on dividend schedules and amounts?
|
[
{
"docid": "6efc06d196afec374bb60ee6e801f6e6",
"text": "I second the Yahoo! Finance key stats suggestion, but I like Morningstar even better: http://quote.morningstar.com/stock/s.aspx?t=roic They show projected yield, based on the most recent dividend; the declared and ex-dividend dates, and the declared amount; and a table of the last handful of dividend payments. Back to Yahoo, if you want to see the whole dividend history, select Historical Prices, and from there, select Dividends Only. http://finance.yahoo.com/q/hp?s=ROIC&a=10&b=3&c=2009&d=00&e=4&f=2012&g=v",
"title": ""
},
{
"docid": "28fd1acdbc2eb2164ba1402e0d88a13a",
"text": "There are dividend newsletters that aggregate dividend information for interested investors. Other than specialized publications, the best sources for info are, in my opinion:",
"title": ""
},
{
"docid": "16b63e18f2e95db3e1bdd38ff0c20108",
"text": "You can use Yahoo! Finance to pull this information in my use. It is listed under Key Statistics -> Dividends & Splits. For example here is Exxon Mobile (XOM): Dividend Payout Information",
"title": ""
},
{
"docid": "f546a579450b87a61ba2b7d0f2569303",
"text": "\"I have 3 favorite sites that I use. http://www.nasdaq.com/symbol/mcd/dividend-history - lists the entire history of dividends and what dates they were paid so you can predict when future dividends will be paid. http://www.dividend.com/dividend-stocks/services/restaurants/mcd-mcdonalds/ - this site lists key stats like dividend yield, and number of years dividend has increased. If the next dividend is announced, it shows the number of days until the ex-dividend date, the next ex-div and payment date and amount. If you just want to research good dividend stocks to get into, I would highly recommend the site seekingalpha.com. Spend some time reading the articles on that site under the dividends section. Make sure you read the comments on each article to make sure the author is not way off base. Finally, my favorite tool for researching good dividend stocks is the CCC Lists produced by Seeking Alpha's David Fish. It is a giant spreadsheet of stocks that have been increasing dividends every year for 5+, 10+, or 25+ years. The link to that spreadsheet is here: http://dripinvesting.org/tools/tools.asp under \"\"U.S. Dividend Champions\"\".\"",
"title": ""
},
{
"docid": "d65e2d5329fa3d2f3b1c4b2a853847b7",
"text": "\"Yahoo Finance is definitely a good one, and its ultimately the source of the data that a lot of other places use (like the iOS Stocks app), because of their famous API. Another good dividend website is Dividata.com. It's a fairly simple website, free to use, which provides tons of dividend-specific info, including the highest-yield stocks, the upcoming ex-div dates, and the highest-rated stocks based on their 3-metric rating system. It's a great place to find new stocks to investigate, although you obviously don't want to stop there. It also shows dividend payment histories and \"\"years paying,\"\" so you can quickly get an idea of which stocks are long-established and which may just be flashes in the pan. For example: Lastly, I've got a couple of iOS apps that really help me with dividend investing: Compounder is a single-stock compound interest calculator, which automatically looks up a stock's info and calculates a simulated return for a given number of years, and Dividender allows you to input your entire portfolio and then calculates its growth over time as a whole. The former is great for researching potential stocks, running scenarios, and deciding how much to invest, while the latter is great for tracking your portfolio and making plans regarding your investments overall.\"",
"title": ""
}
] |
[
{
"docid": "16b0f346130714809d8295fe35c92f4d",
"text": "\"Dividend-paying securities generally have predictable cash flows. A telecom, electric or gas utility is a great example. They collect a fairly predictable amount of money and sells goods at a fairly predictable or even regulated markup. It is easy for these companies to pay a consistent dividend since the business is \"\"sticky\"\" and insulated by cyclical factors. More cyclic investments like the Dow Jones Industrial Average, Gold, etc are more exposed to the crests and troughs of the economy. They swing with the economy, although not always on the same cycle. The DJIA is a basket of 30 large industrial stocks. Gold is a commodity that spikes when people are faced with uncertainty. The \"\"Alpha\"\" and \"\"Beta\"\" of a stock will give you some idea of the general behavior of a stock against the entire market, when the market is trending up and down respectively.\"",
"title": ""
},
{
"docid": "4ed058f7de8d238c01c3ce90f9ae86b7",
"text": "\"Someone (I forget who) did a study on classifying total return by the dividend profiles. In descending order by category, the results were as follows: 1) Growing dividends. These tend to be moderate yielders, say 2%-3% a year in today's markets. Because their dividends are starting from a low level, the growth of dividends is much higher than stocks in the next category. 2) \"\"Flat\"\" dividends. These tend to be higher yielders, 5% and up, but growing not at all, like interest on bonds, or very slowly (less than 2%-3% a year). 3) No dividends. A \"\"neutral\"\" posture. 4) Dividend cutters. Just \"\"bad news.\"\"\"",
"title": ""
},
{
"docid": "d80b33775084481e3cce09445f2b3a83",
"text": "I don't think that you will be able to find a list of every owner for a given stock. There are probably very few people who would know this. One source would be whoever sends out the shareholder meeting mailers. I suspect that the company itself would know this, the exchange to a lesser extent, and possibly the brokerage houses to a even lesser extent. Consider these resources:",
"title": ""
},
{
"docid": "d424b29f29d724e29c526bee6f6ce5bf",
"text": "The yield on Div Data is showing 20% ((3.77/Current Price)*100)) because that only accounts for last years dividend. If you look at the left column, the 52 week dividend yield is the same as google(1.6%). This is calculated taking an average of n number of years. The data is slightly off as one of those sites would have used an extra year.",
"title": ""
},
{
"docid": "add0a2e26607e3e2f5a0795ea12c2485",
"text": "I also prefer to crunch the numbers myself. Here are some resources:",
"title": ""
},
{
"docid": "1aa6e57fcc88ff4c8206e366d19db581",
"text": "As mentioned, dividends are a way of returning value to shareholders. It is a conduit of profit as companies don't legitimately control upward appreciation in their share prices. If you can't wrap your head around the risk to the reward, then this simply means you partially fit the description for a greater investment risk profile, so you need to put down Warren Buffett's books and Rich Dad Poor Dad and get an investment book that fits your risk profile.",
"title": ""
},
{
"docid": "f2b2cd5d67aa4c7040942dcefbcbc302",
"text": "The biggest issue with Yahoo Finance is the recent change to the API in May. The data is good quality, includes both dividend/split adjusted and raw prices, but it's much more difficult to pull the data with packages like R quantmod than before. Google is fine as well, but there are some missing data points and you can't unadjust the prices (or is it that they're all unadjusted and you can't get adjusted? I can't recall). I use Google at home, when I can't pull from Bloomberg directly and when I'm not too concerned with accuracy. Quandl seems quite good but I haven't tried them. There's also a newer website called www.alphavantage.co, I haven't tried them yet either but their data seems to be pretty good quality from what I've heard.",
"title": ""
},
{
"docid": "46651b3b3476d6ee2c361efaaa80b1bb",
"text": "It's difficult to compile free information because the large providers are not yet permitted to provide bulk data downloads by their sources. As better advertising revenue arrangements that mimic youtube become more prevalent, this will assuredly change, based upon the trend. The data is available at money.msn.com. Here's an example for ASX:TSE. You can compare that to shares outstanding here. They've been improving the site incrementally over time and have recently added extensive non-US data. Non-US listings weren't available until about 5 years ago. I haven't used their screener for some years because I've built my own custom tools, but I will tell you that with a little PHP knowledge, you can build a custom screener with just a few pages of code; besides, it wouldn't surprise me if their screener has increased in power. It may have the filter you seek already conveniently prepared. Based upon the trend, one day bulk data downloads will be available much like how they are for US equities on finviz.com. To do your part to hasten that wonderful day, I recommend turning off your adblocker on money.msn and clicking on a worthy advertisement. With enough revenue, a data provider may finally be seduced into entering into better arrangements. I'd much rather prefer downloading in bulk unadulterated than maintain a custom screener. money.msn has been my go to site for mult-year financials for more than a decade. They even provide limited 10-year data which also has been expanded slowly over the years.",
"title": ""
},
{
"docid": "0f8ff70696e06a1a1df44938f4de14eb",
"text": "If you have access, factset and bloomberg have this. However, these aren't standardized due to non-existent reporting regulations, therefore each company may choose to categorize regions differently. This makes it difficult to work with a large universe, and you'll probably end up doing a large portion manually anyways.",
"title": ""
},
{
"docid": "4f86a8a4bb3fa8d170e7d2cb5f67b104",
"text": "Thanks for your thorough reply. Basically, I found a case study in one of my old finance workbooks from school and am trying to complete it. So it's not entirely complicated in the sense of a full LBO or merger model. That being said, the information that they provide is Year 1 EBITDA for TargetCo and BuyerCo and a Pro-Forma EBITDA for the consolidated company @ Year 1 and Year 4 (expected IPO). I was able to get the Pre-Money and Post-Money values and the Liquidation values (year 4 IPO), as well as the number of shares. I can use EBITDA to get EPS (ebitda/share in this case) for both consolidated and stand-alone @ Year 1, but can only get EPS for consolidated for all other years. Given the information provided. One of the questions I have is do I do anything with my liquidation values for an accretion/dilution analysis or is it all EPS?",
"title": ""
},
{
"docid": "04870e2e53ff714d4ec85e6dec4a22ee",
"text": "One big difference: Interest is contracted. They can change the rate in the future but for any given time period you know what you're going to get. Dividends are based on how the company did, there is no agreed-upon amount.",
"title": ""
},
{
"docid": "2136538e1c183dd41f933085eadd0b7f",
"text": "\"The mathematics site, WolframAlpha, provides such data. Here is a link to historic p/e data for Apple. You can chart other companies simply by typing \"\"p/e code\"\" into the search box. For example, \"\"p/e XOM\"\" will give you historic p/e data for Exxon. A drop-down list box allows you to select a reporting period : 2 years, 5 years, 10 years, all data. Below the chart you can read the minimum, maximum, and average p/e for the reporting period in addition to the dates on which the minimum and maximum were applicable.\"",
"title": ""
},
{
"docid": "ebd7b8b4d4c3a2ee667131466eae36f4",
"text": "I second @DumbCoder, every company seems to have its own way of displaying the next dividend date and the actual dividend. I keep track of this information and try my best to make it available for free through my little iphone web app here http://divies.nazabe.com",
"title": ""
},
{
"docid": "34e4ff8c31dc911644bb906c3fa47495",
"text": "No - there are additional factors involved. Note that the shares on issue of a company can change for various reasons (such as conversion/redemption of convertible securities, vesting of restricted employee shares, conversion of employee options, employee stock purchase programs, share placements, buybacks, mergers, rights issues etc.) so it is always worthwhile checking SEC announcements for the company if you want an exact figure. There may also be multiple classes of shares and preferred securities that have different levels of dividends present. For PFG, they filed a 10Q on 22 April 2015 and noted they had 294,385,885 shares outstanding of their common stock. They also noted for the three months ended March 31 2014 that dividends were paid to both common stockholders and preferred stockholders and that there were Series A preferred stock (3 million) and Series B preferred stock (10 million), plus a statement: In February 2015, our Board of Directors authorized a share repurchase program of up to $150.0 million of our outstanding common stock. Shares repurchased under these programs are accounted for as treasury stock, carried at cost and reflected as a reduction to stockholders’ equity. Therefore the exact amount of dividend paid out will not be known until the next quarterly report which will state the exact amount of dividend paid out to common and preferred shareholders for the quarter.",
"title": ""
},
{
"docid": "8e99da3dcb69407b14e31d57a876e9de",
"text": "\"Yea. Almost every form I fill out wants to know \"\"Employer Name\"\". They don't even bother checking \"\"Are you Self Employed\"\". Of course, I end up writing \"\"Self Employed\"\" in employer name field anyway. In the United States, it is even harder because EVERY state has their own labor and employment laws. You are a freelancer but what if you need to travel to a client site in a different state. Bam, you gotta file taxes for that state as well even if you made like a few hundred bucks. Too much red tape and it is really hard to change.\"",
"title": ""
}
] |
fiqa
|
03d306d7ad974d0c92ee7d1177079aa5
|
Overnight charges for brokers holding stocks?
|
[
{
"docid": "35b8026c69f4757eea3e2ab494b55195",
"text": "If you are trading CFDs, which are usually traded on margin, you will usually be charged an overnight financing fee for long positions held overnight and you will receive an overnight financing credit for short positions held overnight. Most CFD brokers will have their overnight financing rates set at + or - 2.5% or 3% from the country's official interest rates. So if your country's official interest rate is 5% and your broker uses + or - 2.5%, you will get a 2.5% credit for any short positions held overnight and pay 7.5% fee for any long positions held overnight. In Australia the official interest rate is 2.5%, so I get 0% for short positions and pay 5% for long positions held overnight. If you are looking to hold positions open long term (especially long positions) you might think twice before using CFDs to trade as you may end up paying quite a bit in interest over a long period of time. These financing fees are charged because you are borrowing the funds to open your positions, If you buy shares directly you would not be charged such overnight financing fees.",
"title": ""
}
] |
[
{
"docid": "c0b1aab11f4c933674933f8bcf85508c",
"text": "The commission is per trade, there is likely a different commission based on the type of security you're trading, stock, options, bonds, over the internet, on the phone, etc. It's not likely that they charge an account maintenance fee, but without knowing what kind of account you have it's hard to say. What you may be referring to is a fund expense ratio. Most (all...) mutual funds and exchange traded funds will charge some sort of expense costs to you, this is usually expressed as a percent of your holdings. An index fund like Vanguard's S&P 500 index, ticker VOO, has a small 0.05% expense ratio. Most brokers will have a set of funds that you can trade with no commission, though there will still be an expense fee charged by the fund. Read over the E*Trade fee schedule carefully.",
"title": ""
},
{
"docid": "be31b0d0a6d96cd68b06fdd5cbdf2958",
"text": "This is great. Thanks! So, just assuming a fund happened to average out to libor plus 50 for a given year, would applying that rate to the notional value of the index swaps provide a reasonable estimate of the drag an ETF investor would experience due to the cost associated with the index swaps? For instance, applying this to the hypothetical I linked to in the original question, they assumed fund assets of $100M with 2x leverage achieved through $85M of S&P500 stocks, $25M of S&P500 futures, and a notional value of the S&P500 swaps at $90M. So the true costs to an ETF investor would be: expense ratio + commissions on the $85M of S&P500 holdings + costs associated with $25M of futures contracts + costs associated with the $90M of swaps? And the costs associated with the $90M of swaps might be roughly libor plus 50?",
"title": ""
},
{
"docid": "6910613137c444c85fb4e476e25872dc",
"text": "I have heard of this, but then the broker is short the shares if they weren't selling them out of inventory, so they still want to accumulate the shares or a hedge before EOD most likely - In that case it may not be the client themselves, but that demand is hitting the market at some point if there isn't sufficient selling volume. Whether or not the broker ends up getting all of them below VWAP is a cost of marketing for them, how they expect to reliably get real size below vwap is my question.",
"title": ""
},
{
"docid": "395657af29d1c2a678d29b213625d460",
"text": "Enjoy the free trades as long as they last, and take advantage of it since this is no longer functionally a tax on your potential profits. On a side note, RobinHood and others in the past have roped customers in with low-to-zero fee trades before changing the business paradigm completely or ceasing operations. All brokers could be charging LESS fees than they do, but they get charged fees by the exchanges, and will eventually pass this down to the customer in some way or go bankrupt.",
"title": ""
},
{
"docid": "9adf292a5fb58e5fed098aa9bcd6d516",
"text": "Retail brokers and are generally not members of exchanges and would generally not be members of exchanges unless they are directly routing orders to those exchanges. Most retail brokers charging $7 are considered discount brokers and such brokers route order to Market Makers (who are members of the exchanges). All brokers and market makers must be members of FINRA and must pay FINRA registration and licensing fees. Discount brokers also have operational costs which include the cost of their facilities, technology, clearing fees, regulation and human capital. Market makers will have the same costs but the cost of technology is probably much higher. Discount brokers will also have market data fees which they will have to pay to the exchanges for the right to show customer real time quotes. Some of their fees can be offset through payment for order flow (POF) where market makers pay routing brokers a small fee for sending orders to them for execution. The practice of POF has actually allowed retail brokers to keep their costs lower but to to shrinking margins and spread market makers POF has significantly declined over the years. Markets makers generally do not pass along Exchange access fees which are capped at $.003 (not .0035) to routing brokers. Also note that The SEC and FINRA charges transactions fees. SEC fee for sales are generally passed along to customers and noted on trade confirms. FINRA TAF is born by the market makers and often subtracted from POF paid to routing firms. Other (full service brokers) charging higher commissions are charging for the added value of their brokers providing advice and expertise in helping investors with investment strategies. They will generally also have the same fees associated with membership of all the exchanges as they are also market makers subject to some of the list of cost mentioned above. One point of note is that Market Making technology is quite sophisticates and very expensive. It has driven most of wholesale market makers of the 90s into consolidation. Retail routing firm's save a significant amount of money for not having to operate such a system (as well as worry about the regulatory headaches associated with running such a system). This allows them to provide much lower commissions that the (full service) or bulge bracket brokers.",
"title": ""
},
{
"docid": "bd8f289f8bc150d0df3b116492dff3df",
"text": ">A lot can happen to a stock's price in 1 hour A lot happens to the stock price in one hour because lot of trading takes place in one hour, not because of material news. If 30 days seems excessive, make the rule that the stock should be held for 1 day. Point is, 1 hour seems convenient to small investors because it facilitates day trading and 30 days seems excessive for the same reason. What is good for the goose is good for the gander. I abhor HFT and think the advantage unfair but am opposed to banning it for pecuniary reasons. Such is life in a capitalist economy. We pay the price for our freedoms.",
"title": ""
},
{
"docid": "c8f4fabdc9a643077c75d688ca57939a",
"text": "According to Publication 590, broker's commissions for stock transactions within an IRA cannot be paid in addition to the IRA contribution(s), but they are deductible as part of the contribution, or add to the basis if you are making a nondeductible contribution to a Traditional IRA. (Top of Page 10, and Page 12, column 1, in the 2012 edition of Pub 590). On the other hand, trustees' administrative fees can be paid from outside the IRA if they are billed separately, and are even deductible as a Miscellaneous Deduction on Schedule A of your income tax return (subject to the 2% of AGI threshold). A long time ago, when my IRA account balances were much smaller, I used to get a bill from my IRA custodian for a $20 annual administrative fee which I paid separately (but never got to deduct due to the 2% threshold). My custodian also allowed the option of doing nothing in which case the $20 would be collected from (and thus reduce) the amount of money in my IRA. Note that this does not apply to the expenses charged by the mutual funds that you might have in your IRA; these expenses are treated the same as brokerage commissions and must be paid from within the IRA.",
"title": ""
},
{
"docid": "dc7555754acdc44099d4e3b5c47bde52",
"text": "\"All discount brokers offer a commission structure that is based on the average kind of order that their target audience will make. Different brokers advertise to different target audiences. They could all have a lot lower commissions than they do. The maximum commission price for the order ticket is set at $99 by the industry securities regulators. When discount brokers came along and started offering $2 - $9.99 trades, it was simply because these new companies could be competitive in a place where incumbents were overcharging. The same exists with Robinhood. The market landscape and costs have changed over the last decade with regulation NMS, and other brokerage firms never needed to update drastically because they could continue making a lot on commissions with nobody questioning it. The conclusion being that other brokers can also charge a lot less, despite their other overhead costs. Robinhood, like other brokerage firms (and anyone else trading directly with the exchanges), are paid by the exchanges for adding liquidity. Not only are many trades placed with no commission for the broker, they actually earn money for placing the trade. If Robinhood was doing you any favors, they would be paying you. But nobody questions free commissions so they don't. Robinhood, like other brokerage firms, sells your trading data to the highest bidder. This is called \"\"payment for order flow\"\", these subscribers see your order on the internet in route to the exhange, and before your order gets to the exchange, the subscriber sends a different order to the exchange so they either get filled before you do (analogous to front running, but different enough to not be illegal) or they alter the price of the thing you wanted to buy or sell so that you have to get a worse price. These subscribers have faster computers and faster internet access than other market participants, so are able to do this so quickly. They are also burning a lot of venture capital like all startups. You shouldn't place too much faith in the idea they are making [enough] money. They also have plans to earn interest off of balances in a variety of ways and offer more options at a price (like margin accounts).\"",
"title": ""
},
{
"docid": "35c459b8792369297e41681430c55724",
"text": "Mutual funds are collections of investments that other people pay to join. It would be simpler to calculate the value of all these investments at one time each day, and then to deem that any purchases or sales happen at that price. The fund diversifies rather than magnifies risk, looking to hold rather than enjoy a quick turnaround. Nobody really needs hourly updated price information for an investment they intend to hold for decades. They quote their prices on a daily basis and you take the daily price. This makes sense for a vehicle that is a balanced collection of many different assets, most of which will have varying prices over the course a day. That makes pricing complicated. This primer explains mutual fund pricing and the requirements of the Investment Company Act of 1940, which mandates daily price reporting. It also illustrates the complexity: How does the fund pricing process work? Mutual fund pricing is an intensive process that takes place in a short time frame at the end of the day. Generally, a fund’s pricing process begins at the close of the New York Stock Exchange, normally 4 p.m. Eastern time. The fund’s accounting agent, which may be an affiliated entity such as the fund’s adviser, or a third-party servicer such as the fund’s administrator or custodian bank, is usually responsible for calculating the share price. The accounting agent obtains prices for the fund’s securities from pricing services and directly from brokers. Pricing services collect securities prices from exchanges, brokers, and other sources and then transmit them to the fund’s accounting agent. Fund accounting agents internally validate the prices received by subjecting them to various control procedures. For example, depending on the nature and extent of its holdings, a fund may use one or more pricing services to ensure accuracy. Note that under Rule 22c-1 forward pricing, fund shareholders receive the next daily price, not the last daily price. Forward pricing makes sense if you want shareholders to get the most accurate sale or purchase price, but not if you want purchasers and sellers to be able to make precise calculations about gains and losses (how can you be precise if the price won't be known until after you buy or sell?).",
"title": ""
},
{
"docid": "3434f214ebf6ea235e1f6dc952df5914",
"text": "\"How does [FINRA's 5% markup policy] (http://www.investopedia.com/study-guide/series-55/commissions-and-trade-complaints/finra-5-markup-policy/) affect the expense/profit/value of an ETF/Mutual Fund? An extreme example to illustrate: If my fund buys 100 IBM @ 100, The fund would credit the broker $10,000 for those shares and the broker would give the fund 100 shares. Additionally there would be some sort of commission (say $10) paid on top of the transaction which would come out of the fund's expense ratio. But the broker is \"\"allowed\"\" to charge a 5% markup. So that means, that $100 price that I see could have hit the tape at $95 (assume 5% markup which is allowed). Thus, assuming that the day had zero volatility for IBM, when the fund gets priced at the end of the day, my 100 shares which \"\"cost\"\" 10,000 (plus $10) now has a market value of $9,500. Is that how it \"\"could\"\" work? That 500 isn't calculated as part of the expense of the fund is it? (how could it be, they don't know about the exact value of the markup).\"",
"title": ""
},
{
"docid": "8767fd8487c7fbf1fe4d78d52a38411b",
"text": "\"My broker offers the following types of sell orders: I have a strategy to sell-half of my position once the accrued value has doubled. I take into account market price, dividends, and taxes (Both LTgain and taxes on dividends). Once the market price exceeds the magic trigger price by 10%, I enter a \"\"trailing stop %\"\" order at 10%. Ideally what happens is that the stock keeps going up, and the trailing stop % keeps following it, and that goes on long enough that accrued dividends end up paying for the stock. What happens in reality is that the stock goes up some, goes down some, then the order gets cancelled because the company announces dividends or something dumb like that. THEN I get into trouble trying to figure out how to re-enter the order, maintaining the unrealized gain in the history of the trailing stop order. I screwed up and entered the wrong type of order once and sold stock I didn't want to. Lets look at an example. a number of years ago, I bought some JNJ -- a hundred shares at 62.18. - Accumulated dividends are 2127.75 - My spreadsheet tells me the \"\"double price\"\" is 104.54, and double + 10% is 116.16. - So a while ago, JNJ exceeded 118.23, and I entered a Trailing Stop 10% order to sell 50 shares of JNJ. The activation price was 106.41. - since then, the price has gone up and down... it reached a high of 126.07, setting the activation price at 113.45. - Then, JNJ announced a dividend, and my broker cancelled the trailing stop order. I've re-entered a \"\"Stop market\"\" order at 113.45. I've also entered an alert for $126.07 -- if the alert gets triggered, I'll cancel the Market Stop and enter a new trailing stop.\"",
"title": ""
},
{
"docid": "93c0dd8ea161a1275c9113b1fd75a006",
"text": "2 things may happen. Either your positions are closed by the broker and the loss or profit is credited to your account. Else it is carried over to the next day and you pay interest on the stocks lent to you. What happens will be decided by the agreement signed between you and your broker.",
"title": ""
},
{
"docid": "95c2adec4356b3c197307f57a31ce4a5",
"text": "Brokerage firms must settle funds promptly, but there's no explicit definition for this in U.S. federal law. See for example, this article on settling trades in three days. Wikipedia also has a good write-up on T+3. It is common practice, however. It takes approximately three days for the funds to be available to me, in my Canadian brokerage account. That said, the software itself prevents me from using funds which are not available, and I'm rather surprised yours does not. You want to be careful not to be labelled a pattern day trader, if that is not your intention. Others can better fill you in on the consequences of this. I believe it will not apply to you unless you are using a margin account. All but certainly, the terms of service that you agreed to with this brokerage will specify the conditions under which they can lock you out of your account, and when they can charge interest. If they are selling your stock at times you have not authorised (via explicit instruction or via a stop-loss order), you should file a complaint with the S.E.C. and with sufficient documentation. You will need to ensure your cancel-stop-loss order actually went through, though, and the stock was sold anyway. It could simply be that it takes a full business day to cancel such an order.",
"title": ""
},
{
"docid": "8b8ddc850fe99c878acf046cdcaa9c0d",
"text": "\"I'll answer this question: \"\"Why do intraday traders close their position at then end of day while most gains can be done overnight (buy just before the market close and sell just after it opens). Is this observation true for other companies or is it specific to apple ?\"\" Intraday traders often trade shares of a company using intraday leverage provided by their firm. For every $5000 dollars they actually have, they may be trading with $100,000, 20:1 leverage as an example. Since a stock can also decrease in value, substantially, while the markets are closed, intraday traders are not allowed to keep their highly leveraged positions opened. Probabilities fail in a random walk scenario, and only one failure can bankrupt you and the firm.\"",
"title": ""
},
{
"docid": "65cf9a90015e47167757486425ce4587",
"text": "\"Oftentimes, the lender (the owner of the security) is not explicitly involved in the lending transaction. Let's say the broker is holding a long-term position of 1MM shares from Client A. It is common for Client A's agreement with Broker A to include a clause that allows the broker to lend out the 1MM shares for its own profit (\"\"rehypothecation\"\"). Client A may be compensated for this in some form (e.g. baked into their financing rates), but they do not receive any compensation that is directly tied to lending activities. You also have securities lending agents that lend securities for an explicit fee. For example, the borrower's broker may not have sufficient inventory, in which case they would need to find a third-party lending agent. This happens both on-demand as well as for a fixed-terms (typically a large basket of securities). SLB (securities lending and borrowing) is a business in its own right. I'm not sure I follow your follow-up question but oftentimes there is no restriction that prevents the broker from lending out shares \"\"for a very short time\"\". Unless there is a transaction-based fee though, the number of times you lend shares does not affect \"\"pocketing the interest\"\" since interest accrues as a function of time.\"",
"title": ""
}
] |
fiqa
|
6ec04768f4cfcf43d044486b15fa82fe
|
What resources can I use to try and find out the name of the manager for a given fund?
|
[
{
"docid": "ce9728af04a4323265db53597886dff5",
"text": "\"Yahoo Finance: http://finance.yahoo.com/q/pr?s=VFINX+Profile Under \"\"Management Information\"\"\"",
"title": ""
},
{
"docid": "ecf51c613d27aef311ab2aa2a9c16077",
"text": "The fund prospectus is a good place to start.",
"title": ""
}
] |
[
{
"docid": "9a71e54c51a33edaa86448edea5040c1",
"text": "Your link is pointing to managed funds where the fees are higher, you should look at their exchange traded funds; you will note that the management fees are much lower and better reflect the index fund strategy.",
"title": ""
},
{
"docid": "c86c54bd1492322b09e5ca4a7d6c2b9e",
"text": "\"You can see all the (millions) of trades per day for a US stock only if you purchase that data from the individual exchanges (NYSE, NASDAQ, ARCA, ...), from a commercial market data aggregator (Bloomberg, Axioma, ...), or from the Consolidated Tape Association. In none of that data will you ever find identifying information for the traders. What you are recalling regarding the names of \"\"people from the company\"\" trading company stock is related to SEC regulations stating that people with significant ownership of company stock and/or controlling positions on the company board of directors must publicize (most of) their trades in that stock. That information can usually be found on the company's investor relations website, or through the SEC website.\"",
"title": ""
},
{
"docid": "a0562393c7da826282faa99246a978d7",
"text": "You didn't identify the fund but here is the most obvious way: Some of the stocks they owned could had dividends. Therefore they would have had to pass them on to the investors. If the fund sold shares of stocks, they could have capital gains. They would have sold stocks to pay investors who sold shares. They also could have sold shares of stock to lock in gains, or to get out of positions they no longer wanted. Therefore a fund could have dividends, and capital gains, but not have an increase in value for the year. Some investors look at how tax efficient a fund is, before investing.",
"title": ""
},
{
"docid": "3ac2bcd3dbc3e67598efa988acae9373",
"text": "Why would you bet it’s Sun Capital Partners? OP said it’s a firm that specializes in buying software companies. Sun is a generalist investor. Tech-specific funds include, but are not limited to: Vista, Thoma Bravo, Insight Venture Partners, JMI Equity, etc.",
"title": ""
},
{
"docid": "96aefa42c9120412e688d4e47ccabd3c",
"text": "Street name is not what you think it is in the question. The broker is the owner in street name. There is no external secondary owner information. I don't know if there is available independent verification, but if the broker is in the US and they go out of business suddenly, you can make a claim to the SIPC.",
"title": ""
},
{
"docid": "c1402c618145c984650ff00198caab0f",
"text": "Remember that unless you participate in the actual fund that these individuals offer to the public, you will not get the same returns they will. If you instead do something like, look at what Warren Buffet's fund bought/sold yesterday (or even 60 minutes ago), and buy/sell it yourself, you will face 2 obstacles to achieving their returns: 1) The timing difference will mean that the value of the stock purchased by Warren Buffet will be different for your purchase and for his purchase. Because these investors often buy large swathes of stock at once, this may create large variances for 2 reasons: (a) simply buying a large volume of a stock will naturally increase the price, as the lowest sell orders are taken up, and fewer willing sellers remain; and (b) many people (including institutional investors) may be watching what someone like Warren Buffet does, and will want to follow suit, chasing the same pricing problem. 2) You cannot buy multiple stocks as efficiently as a fund can. If Warren Buffet's fund holds, say, 50 stocks, and he trades 1 stock per day [I have absolutely no idea about what diversification exists within his fund], his per-share transaction costs will be quite low, due to share volume. Whereas for you to follow him, you would need 50 transactions upfront, + 1 per day. This may appear to be a small cost, but it could be substantial. Imagine if you wanted to invest 50k using this method - that's $1k for each of 50 companies. A $5 transaction fee would equal 1% of the value of each company invested [$5 to buy, and $5 to sell]. How does that 1% compare to the management fee charged by the actual fund available to you? In short, if you feel that a particular investor has a sound strategy, I suggest that you consider investing with them directly, instead of attempting to recreate their portfolio.",
"title": ""
},
{
"docid": "5bfedbdd63f74534043d2d59fcef16b4",
"text": "Like others have said, mutual funds don't have an intraday NAV, but their ETF equivalents do. Use something like Yahoo Finance and search for the ETF.IV. For example VOO.IV. This will give you not the ETF price (which may be at a premium or discount), but the value of the underlying securities updated every 15 seconds.",
"title": ""
},
{
"docid": "4f56dc0dde85854100d177a5e5998e66",
"text": "\"Determine which fund company issues the fund. In this case, a search reveals the fund name to be Vanguard Dividend Growth Fund from Vanguard Funds. Locate information for the fund on the fund company's web site. Here is the overview page for VDIGX. In the fund information, look for information about distributions. In the case of VDIGX, the fourth tab to the right of \"\"Overview\"\" is \"\"Distributions\"\". See here. At the top: Distributions for this fund are scheduled Semi-Annually The actual distribution history should give you some clues as to when. Failing that, ask your broker or the fund company directly. On \"\"distribution\"\" vs. \"\"dividend\"\": When a mutual fund spins off periodic cash, it is generally not called a \"\"dividend\"\", but rather a \"\"distribution\"\". The terminology is different because a distribution can be made up of more than one kind of payout. Dividends are just one kind. Capital gains, interest, and return of capital are other kinds of cash that can be distributed. While cash is cash, the nature of each varies for tax purposes and so they are classified differently.\"",
"title": ""
},
{
"docid": "668e10003575f88b6ce719c0d39a32af",
"text": "I want to mention I've found 2 options for more powerful tools that can be used to manage asset allocation: Advantages/Disadvantages: Vanguard Morningstar X-ray I hope this helps others struggling with asset allocation.",
"title": ""
},
{
"docid": "ef9d348bbe5f1714fae78ad0a3deefa4",
"text": "Given that a mutual fund manager knows, at the end of the day, precisely how many shares/units/whatever of each investment (stock, equity, etc.) they own, plus their bank balance, It is calculating this given. There are multiple orders that a fund manager requests for execution, some get settled [i.e. get converted into trade], the shares itself don't get into account immediately, but next day or 2 days later depending on the exchange. Similarly he would have sold quite a few shares and that would still show shares in his account. The bank balance itself will not show the funds to pay as the fund manager has purchased something ... or the funds received as the fund manager has sold something. So in general they roughly know the value ... but they don't exactly know the value and would have to factor the above variables. That's not a simple task when you are talking about multiple trades across multiple shares.",
"title": ""
},
{
"docid": "e151f96ccd054770a6a4f945657f69ae",
"text": "Well, what I would do would be to read every journalist's article on the subject, every academic paper, and the appropriate chapters from the CFA curriculum. I'd write down everyone's name (authors and those mentioned) and then email call them for advice. I'd try to find out who those players are, what their specific philosophies are, and then find someone i thought was really smart, had an investment philosophy that I agreed with, wasn't a dick, and then I would call them. By the way, Warren Buffett went to Columbia to learn specifically under Ben Graham. Prior to graduation, Buffett said he'd like to work at Graham Newman for free, such was the value of the education. Benjamin Graham told him (Warren), he wasn't worth that much. You or I literally have nothing to offer these guys that they can't get somewhere else (smarts, hard work, etc) for better. I'd be humble, attentive, and humble (did I say that already). There's an intellectual honesty that comes with admitting you don't know anything (but are willing to learn) that is very much important. That's what I would do. Did any of that help?",
"title": ""
},
{
"docid": "e8050a204949864b98ceb2a99091d727",
"text": "Hey Sheehan, I believe Schwab provides this info. None of the online free portfolio managers I know of gives you this info. The now defunct MS Money used to have this. The best thing to do is to use a spreadsheet. Or you could use the one I use. http://www.moneycone.com/did-you-beat-the-market-mr-investor/ . (disclaimer: that's my blog)",
"title": ""
},
{
"docid": "a5e5dbb140511e66e895c62be614c8e3",
"text": "\"If you want the answer from the horse's mouth, go to the website of the ETF or mutual find, and the expense ratio will be listed there, both on the \"\"Important Information\"\" part of the front page, as well as in the .pdf file that you click on to download the Prospectus. Oh wait, you don't want to go the fund's website at all, just to a query site where you type in something like VFINX. hit SEARCH, and out pops the expense ratio for the Vanguard S&P 500 Index Fund? Well, have you considered MorningStar?\"",
"title": ""
},
{
"docid": "6aa7994d1eb6dfbbd1f75c1cafa06219",
"text": "A general mutual fund's exact holdings are not known on a day-to-day basis, and so technical tools must work with inexact data. Furthermore, the mutual fund shares' NAV depends on lots of different shares that it holds, and the results of the kinds of analyses that one can do for a single stock must be commingled to produce something analogous for the fund's NAV. In other words, there is plenty of shooting in the dark going on. That being said, there are plenty of people who claim to do such analyses and will gladly sell you their results (actually, Buy, Hold, Sell recommendations) for whole fund families (e.g. Vanguard) in the form of a monthly or weekly Newsletter delivered by US Mail (in the old days) or electronically (nowadays). Some people who subscribe to such newsletters swear by them, while others swear at them and don't renew their subscriptions; YMMV.",
"title": ""
},
{
"docid": "d80b33775084481e3cce09445f2b3a83",
"text": "I don't think that you will be able to find a list of every owner for a given stock. There are probably very few people who would know this. One source would be whoever sends out the shareholder meeting mailers. I suspect that the company itself would know this, the exchange to a lesser extent, and possibly the brokerage houses to a even lesser extent. Consider these resources:",
"title": ""
}
] |
fiqa
|
e7fad579ec9f83aac432d70d6e1980b3
|
Non-EU student, living in Germany, working for a Swiss company - taxes?
|
[
{
"docid": "f05fb26a8310550af2f484a24017dcea",
"text": "\"I'll assume that you would work as a regular (part-time) employee. In this case, you are technically a Grenzgänger. You will need a specific kind of Swiss permit (\"\"Grenzgängerbewilligung\"\") allowing you to work in Switzerland. Your employer typically takes care of this - they have more experience than you. You being non-EU might make matters a bit more complicated. Your employer will withhold 4.5% of your gross income as source taxes (\"\"Quellensteuer\"\"). When you do your tax declaration, your entire income will be taxed in Germany, since this is where you live. This will happen after your first year of work. Be prepared for a large tax bill (or think of this as an interest-free loan from Germany to you). However, due to the Doppelbesteuerungsabkommen (DBA), the 4.5% you already paid to Switzerland will be deducted from the taxes you are due in Germany. Judging from my experience, the tax authorities in Germany are not fluent in the DBA - particularly in areas far away from the Swiss border. I had to gently remind them to deduct the source taxes, explicitly referring to the DBA. The bill was revised without problems, but I strongly recommend making sure that your source taxes are correctly deducted from your German tax liability. Once your local German tax office understands your situation, you will be asked to make quarterly prepayments, which will be calculated in a way to minimize your later overall tax liability. Budget for these. You didn't ask, but I'll tell you anyway: social security will normally be handled by Switzerland as the country of employment - not the country of residence. Your employer will automatically deduct old age, unemployment and accident insurance and contribute to a pension plan, all in Switzerland. However... ... if you do a lot of your work in Germany (>25%), which certainly applies if you plan on mostly working remotely, your social security will be handled by your country of residence. This is a major pain for your employer, because now your Swiss employer needs to understand the German social security system, how much and to whom to co-pay and so forth. This is a major area of study, and your employer may not want to spend all this effort. My employer has looked at this and requires anyone living outside of Switzerland to limit working from home to less than 25%, because by extension, they would some day also need to do the same for employees living in France, Italy, Austria... or even the UK. They don't want to dig through half the EU states' social security regulations. Therefore, you would not be able to work remotely from Germany for my employer. This is actually a fairly recent development that only entered in force at the beginning of 2015 (before that, this was all a bit of a gray area). Your prospective employer may not be aware of all details. So you will need to think about whether you actively want to point them at this (possibly ruining your plans of working remotely), or not (and possibly getting major problems and post-payments years later). Finally, I think you can choose whether you want to have your health insurance in Switzerland or in Germany (unless your Swiss obligation to be insured is waived because of your part-time status). Some Swiss health insurers offer plans where they cooperate with German health insurers, so you can go to German doctors just like a German resident. Source: I have been a Grenzgänger from Germany into Switzerland off and on for over ten years now. I can't say anything about whether your German visa restricts you from working in Switzerland. You may want to ask about this at Expatriates.SE, but I'd much rather ask your local German authorities than random strangers on the internet.\"",
"title": ""
},
{
"docid": "ad545957f5af34e852059d84dd928377",
"text": "\"Finally, I got response from finance center: \"\"It doesn't matter where do you study, what does matter is where you live. So, once you live in Germany, you pay taxes in Germany. And it doesn't matter who you work for.\"\" So, there are two options to pay taxes: it's paid by an employer or an employee: If I would work for Swiss company, I need to show how much money I make every month (or year) to Finance Center.\"",
"title": ""
}
] |
[
{
"docid": "866b5c9cc2f9d0044adca9577f629247",
"text": "\"You'll need to read carefully the German laws on tax residency, in many European (and other) tax laws the loss of residency due to absence is conditioned on acquiring residency elsewhere. But in general, it is possible to use treaties and statuses so that you end up not being resident anywhere, but it doesn't mean that the income is no longer taxed. Generally every country taxes income sourced to it unless an exclusion applies, so if you can no longer apply the treaty due to not being a resident - you'll need to look for general exclusions in the tax law. I don't know how Germany taxes scholarships under the general rules, you'll have to check it. It is possible that they're not taxed. Many people try to raise the argument of \"\"I'm not a resident\"\" to avoid income taxes altogether on earnings on their work - this would not work. But with a special kind of income like scholarship, which may be exempt under the law, it may. Keep in mind, that the treaty has \"\"who is or was immediately before visiting a Contracting State a resident of the other Contracting State\"\" language in some relevant cases, so you may still apply it in the US even if no longer resident in Germany.\"",
"title": ""
},
{
"docid": "47fbaf740dacac037b1f7a8f5dfa294b",
"text": "This answer is assuming you're in the US, which apparently you're not. I doubt that the rules in the EU are significantly different, but I don't know for sure. In case of an IRS control, is it ok to say that I regularly connect remotely to work from home although in the work contract it says I must work at client's office? No. Are there any other ways I can prove that this deduction is valid? No. You can't prove something is valid when its not. You can only deduct home office expense if it is used exclusively for your business, and your bedroom obviously is not.",
"title": ""
},
{
"docid": "6930ffd3459df51d2e594465b3b8a9f1",
"text": "There's nothing wrong with your reasoning except that you expect the tax laws to make perfect sense. More often than not they don't. I suggest getting in touch with a professional tax preparer (preferably with a CPA or EA designation), who will be able to understand the issue, including the relevant portions of the French-US tax treaty, and explain it to you. You will probably also need to do some reporting in France, so get a professional advice from a French tax professional as well. So, in my tax return, can I say that I had no US revenue at all during this whole year? I doubt it.",
"title": ""
},
{
"docid": "6bd9d272d2c1f443beb8f7f2851e50c7",
"text": "\"(Selling apps is AFAIK business, not freelancing - unless the type of app you produce is considered a freelancing subject. The tax office will give you a questionnaire and then decide). As Einzelunternehmer, you can receive the payments for the apps to the same account where your wages go. However, there are lots of online accounts that do not cost fees, so consider to receive them on a separate account so you have the business and private kind of separate (for small Einzelunternehmer, there is no legal separation between business and private money - you have full liability with your private money for the business). The local chamber of commerce can tell you everything about setting up such a business, ask them (you'll probably have to become a member there anyways). They have information as well on VAT (Umsatzsteuer, USt) which you need to declare unless you get an exemption (probably possible), and about Gewerbesteuer (the income tax of the business) etc. For the tax, you have \"\"subforms\"\" for the income tax e.g. for wages and for business income, so you just submit both with the main form. You'll get an appropriate tax number when registering the business. Social security/insurance: as long as the app selling is only a side business, the social insurance payments for your main job completely cover the side job as well. You need to make sure that your employment contract is compatible with the app business, though. A quick search indicates that there is a tax treaty between Germany and the Ukraine, Wikipedia says there are no contracts about social insurance in effect (yet).\"",
"title": ""
},
{
"docid": "dedd7c79745b9a261780a16dd3d00d32",
"text": "\"Yeah but a lot of people wont see it that way. Most will read the headline Burger King to avoid US taxes and then wonder why BK isnt pulling their weight when they do business inside the US. Look at what happened when Walgreens tried this [Source](http://crooksandliars.com/2014/08/walgreens-wont-leave-usa-avoid-taxes) It didnt go over so well. Made them look unAmerican. I hate using that word but that is what it looks like.\"\"the bulletin reported that Walgreens has decided not to “invert” the company’s nationality to become a Swiss company\"\" I have no idea if this will happen to BK.\"",
"title": ""
},
{
"docid": "cc041b18ffe6b806ba4fbcb0c963b9b0",
"text": "\"The IRS taxes worldwide income of its citizens and green card holders. Generally, for those Americans genuinely living/working overseas the IRS takes the somewhat reasonable position of being in \"\"2nd place\"\" tax-wise. That is, you are expected to pay taxes in the country you are living in, and these taxes can reduce the tax you would have owed in the USA. Unfortunately, all of this has to be documented and tax returns are still required every year. Your European friends may find this quite surprising as I've heard, for instance, that France will not tax you if you go live and work in Germany. A foreign company operating in a foreign country under foreign law is not typically required to give you a W-2, 1099, or any of the forms you are used to. Indeed, you should be paying taxes in the place where you live and work, which is probably somewhat different than the USA. Keep all these records as they may be useful for your USA taxes as well. You are required to total up what you were paid in Euros and convert them to US$. This will go on the income section of a 1040. You should be paying taxes in the EU country where you live. You can also total those up and convert to US$. This may be useful for a foreign tax credit. If you are living in the EU long term, like over 330 days/year or you have your home and family there, then you might qualify for a very large exemption from your income for US tax purposes, called the Foreign Earned Income Exclusion. This is explained in IRS Publication 54. The purpose of this is primarily to avoid double taxation. FBAR is a serious thing. In past years, the FBAR form went to a Financial Crimes unit in Detroit, not the regular IRS address. Also, getting an extension to file taxes does not extend the deadline for the FBAR. Some rich people have paid multi-million dollar fines over FBAR and not paying taxes on foreign accounts. I've heard you can get a $10,000 FBAR penalty for inadvertent, non-willful violations so be sure to send those in and it goes up from there to $250k or half the value of the account, whichever is more. You also need to know about whether you need to do FATCA reporting with your 1040. There are indeed, a lot of obnoxious things you need to know about that came into existence over the years and are still on the law books -- because of the perpetual 'arms race' between the government and would be cheaters, non-payers and their advisors. http://www.irs.gov/publications/p54/ http://americansabroad.org/\"",
"title": ""
},
{
"docid": "f358501a7f9abf6f372a1afd9f0f7be5",
"text": "except that most companies are small companies and most business owners end up as families at some point. I'm starting a business abroad and will be taxed at 35% in the USA even if I don't live there. There's ways to get around it, but I'm not sure exactly how to do it yet nor am I making enough money yet to justify the up front expense of doing this",
"title": ""
},
{
"docid": "8faf102c4cceb0254f9731411e2413c0",
"text": "If the firm treats you as an employee then they are treated as having a place of business in the UK and therefore are obliged to operate PAYE on your behalf - this rule has applied to EU States since 2010 and the non-EU EEA members, including Switzerland, since 2012. If you are not an employee then your main options are: An umbrella company would basically bill the client on your behalf and pay you net of taxes and NI. You potentially take home a bit less than you would being 100% independent but it's a lot less hassle and potentially makes sense for a small contract.",
"title": ""
},
{
"docid": "7b0a4c725928d63b3690d12d6b444b02",
"text": "\"They did not do a corporate inversion. They mostly avoid paying taxes to European countries through setups that use two Irish companies, one Dutch (or Swiss, or Luxembourgian) and a Cayman Islands \"\"European\"\" headquarters office. They are still domiciled in the US and pay US taxes.\"",
"title": ""
},
{
"docid": "b71efbb3f5044251b6e0a556fed686ed",
"text": "\"If you haven't been a US resident (not citizen, different rules apply) at the time you sold the stock in Europe but it was inside the same tax year that you moved to the US, you might want to have a look at the \"\"Dual Status\"\" part in IRS publication 519.\"",
"title": ""
},
{
"docid": "1c63acd0b8f3d76f9dd620dc9995123e",
"text": "There are just too many variables here... Will you legally be considered a permanent resident from the moment you move? Will you work from home as a contractor or as an employee? Those are not questions you can answer yourself, they really depend on your circumstances and how the tax authorities will look at them. I strongly encourage you to speak to an advisor. Very generally spoken, at your place of residence you pay taxes for your worldwide income, at the place of your work base (which is not clear if this really would be Turkey) you pay taxes on the income generated there. If it's one and the same country, it's simple. If not, then theoretically you pay twice. However, most countries have double taxation treaties to avoid just that. This usually works so that the taxes paid abroad (in Turkey) would be deducted from your tax debt at your place of residence. But you might want to read the treaty to be sure how this would be in your specific case (all treaties are publicly available), and you should really consider speaking to a professional.",
"title": ""
},
{
"docid": "e316d41336ca3bda6eb126bcc4115790",
"text": "\"Can I use the foreign earned income exclusion in my situation? Only partially, since the days you spent in the US should be excluded. You'll have to prorate your exclusion limit, and only apply it to the income earned while not in the US. If not, how should I go about this to avoid being doubly taxed for 2014? The amounts you cannot exclude are taxable in the US, and you can use a portion of your Norwegian tax to offset the US tax liability. Use form 1116 for that. Form 1116 with form 2555 on the same return will require some arithmetic exercises, but there are worksheets for that in the instructions. In addition, US-Norwegian treaty may come into play, so check that out. It may help you reduce the tax liability in the US or claim credit on the US taxes in Norway. It seems that Norway has a bilateral tax treaty with the US, that, if I'm reading it correctly, seems to indicate that \"\"visiting researchers to universities\"\" (which really seems like I would qualify as) should not be taxed by either country for the duration of their stay. The relevant portion of the treaty is Article 16. Article 16(2)(b) allows you $5000 exemption for up to a year stay in the US for your salary from the Norwegian school. You will still be taxed in Norway. To claim the treaty benefit you need to attach form 8833 to your tax return, and deduct the appropriate amount on line 21 of your form 1040. However, since you're a US citizen, that article doesn't apply to you (See the \"\"savings clause\"\" in the Article 22). I didn't even give a thought to state taxes; those should only apply to income sourced from the state I lived in, right (AKA $0)? I don't know what State you were in, so hard to say, but yes - the State you were in is the one to tax you. Note that the tax treaty between Norway and the US is between Norway and the Federal government, and doesn't apply to States. So the income you earned while in the US will be taxable by the State you were at, and you'll need to file a \"\"non-resident\"\" return there (if that State has income taxes - not all do).\"",
"title": ""
},
{
"docid": "d96a217cfd999cfcfdccb979a8068a15",
"text": "\"Q) Will I have to submit the accounts for the Swiss Business even though Im not on the payroll - and the business makes hardly any profit each year. I can of course get our accounts each year - BUT - they will be in Swiss German! You will have to submit on your income from the business. The term \"\"partnership\"\" refers to a specific business entity type in the U.S. I'm not sure if you're using it the same way. In a partnership in the U.S. you pay income tax on your share of the partnership's income whether or not you actually receive income in your personal account. There's not enough information here to know if that applies in your case. (In the U.S., the partnership itself does not pay income tax - It is a \"\"disregarded entity\"\" for tax purposes, with the tax liability passed through to the partners as individuals.) Q) Will I need to have this translated!? Is there any format/procedure to this!? Will it have to be translated by my Swiss accountants? - and if so - which parts of the documentation need to be translated!? As regards language, you will file a tax return on a U.S. form presumably in English. You will not have to submit your account information on any other form, so the fact that your documentation is in German does not matter. The only exception that comes to mind is that you could potentially get audited (just like anyone else filing taxes in the U.S.) in which case you might need to produce your documentation. That situation is rare enough that I wouldn't worry about it though. I'm not sure if they'd take it in German or force you to get a translation. I was told that if I sell the business (and property) after I aquire a greencard - that I will be liable to 15% tax of the profit I'd made. I also understand that any tax paid (on selling) in Switzerland will be deducted from the 15%!? Q) Is this correct!? The long-term capital gains rate is 15% for most people. (At very high incomes it is 20%.) It sounds like you would qualify for long-term (held for greater than 1 year) capital gains in this case, although the details might matter. There is a foreign tax credit, but I'm not completely sure if it would apply in this case. (If forced to guess, I would say that it does.) If you search for \"\"foreign tax credit\"\" and \"\"IRS\"\" you should get to the information that you need pretty quickly. I will effectively have ALL the paperwork for this - as we'll need to do the same in Switzerland. But again, it will be in Swiss German. Q) Would this be a problem if its presented in Swiss German!? Even in this case you will not need to submit any of your paperwork to the IRS, unless you get audited. See earlier comments.\"",
"title": ""
},
{
"docid": "328d9ea0fda297f04389a4d04d3ab323",
"text": "It is unlikely that UK tax will be due on the money -- see here: Foreign students usually don’t pay UK tax on foreign income or gains, as long as they’re used for course fees or living costs But if the UK doesn't tax you on the money then double-taxation agreements probably won't apply, and so any Italian tax due will be payable.",
"title": ""
},
{
"docid": "ca9f15b971066c655c369646ad1c9047",
"text": "Some companies have banks and brokerages that are completely separate systems. So you could be actually running ACH transactions between two different banking entities. Bank of America used to have significant latency between BoA accounts, because they ran into delays integrating Fleet, BankSouth and BoA systems.",
"title": ""
}
] |
fiqa
|
1a2697b78ff2a6d7cc0ab8d40f9a38f5
|
How to start investing/thinking about money as a young person?
|
[
{
"docid": "198bb468a2b916a466c48eaab959c272",
"text": "\"There are books like, \"\"The Millionaire Mind\"\" that could be of interest when it comes to basics like living below your means, investing what you save, etc. that while it is common sense, it is uncommonly done in the world. Something to consider is how actively do you want your money management to be? Is it something to spend hours on each week or a few hours a year tops? You have lots of choices and decisions to make. I would suggest keeping part of your savings as an emergency fund just in case something happens. As for another part, this is where you could invest in a few different options and see what happens. There would be a couple of different methods I could see for breaking into finance that I'd imagine: IT of a finance company - In this case you'd likely be working on customizations for what the bank, insurance or other kind of financial firm requires. This could be somewhat boring as you are basically a part of the backbone that keeps the company going but not really able to take much of the glory when the company makes a lot of money. Brains of a hedge fund - In this case, you may have to know some trading algorithms and handle updating the code so that the trading activities can be done by a computer with lightning speed. Harder to crack into since these would be the secretive people to find and join in a way.\"",
"title": ""
},
{
"docid": "d41d8cd98f00b204e9800998ecf8427e",
"text": "",
"title": ""
},
{
"docid": "7a20f3ccb8348112ffffc201f808ff68",
"text": "\"I think \"\"Rich Dad Poor Dad\"\" is a good read for understanding the basics of personal finance in a non-technical format before actually starting investing.\"",
"title": ""
}
] |
[
{
"docid": "1328d512f1bbce05712bbb70484c3909",
"text": "The standard advice is to have 3-6 months worth of expenses saved up in a highly liquid savings or money market account. After you have that saved you could look to start investing. I would recommend reading the bogleheads investment wiki (https://www.bogleheads.org/wiki/Getting_started). Even if you aren't planning on following the bogle head's way of passive investing it will give you a lot of good info on options available to you to start investing.",
"title": ""
},
{
"docid": "7375b487322935638688af71c2a9a918",
"text": "\"The statement \"\"Finance is something all adults need to deal with but almost nobody learns in school.\"\" hurts me. However I have to disagree, as a finance student, I feel like everyone around me is sound in finance and competition in the finance market is so stiff that I have a hard time even finding a paid internship right now. I think its all about perspective from your circumstances, but back to the question. Personally, I feel that there is no one-size-fits-all financial planning rules. It is very subjective and is absolutely up to an individual regarding his financial goals. The number 1 rule I have of my own is - Do not ever spend what I do not have. Your reflected point is \"\"Always pay off your credit card at the end of each month.\"\", to which I ask, why not spend out of your savings? plan your grocery monies, necessary monthly expenditures, before spending on your \"\"wants\"\" should you have any leftovers. That way, you would not even have to pay credit every month because you don't owe any. Secondly, when you can get the above in check, then you start thinking about saving for the rainy days (i.e. Emergency fund). This is absolutely according to each individual's circumstance and could be regarded as say - 6 months * monthly income. Start saving a portion of your monthly income until you have set up a strong emergency fund you think you will require. After you have done than, and only after, should you start thinking about investments. Personally, health > wealth any time you ask. I always advise my friends/family to secure a minimum health insurance before venturing into investments for returns. You can choose not to and start investing straight away, but should any adverse health conditions hit you, all your returns would be wiped out into paying for treatments unless you are earning disgusting amounts in investment returns. This risk increases when you are handling the bills of your family. When you stick your money into an index ETF, the most powerful tool as a retail investor would be dollar-cost-averaging and I strongly recommend you read up on it. Also, because I am not from the western part of the world, I do not have the cultural mindset that I have to move out and get into a world of debt to live on my own when I reached 18. I have to say I could not be more glad that the culture does not exist in Asian countries. I find that there is absolutely nothing wrong with living with your parents and I still am at age 24. The pressure that culture puts on teenagers is uncalled for and there are no obvious benefits to it, only unmanageable mortgage/rent payments arise from it with the entry level pay that a normal 18 year old could get.\"",
"title": ""
},
{
"docid": "4acb25e5b3c6f679fac607e6eabfdf5e",
"text": "\"Before anything else, read up on the basics of economics. After that, there a few things you need to ask yourself before you even think about investing in anything: If you have an answer to those questions: Once you answered those questions I could make a simple first suggestion: Confident in handling it yourself and low maintenance with uncertain horizon: look up an online bank that offers ETFs such as IWDA (accumulation (dividend is not payed but reinvested) or income(dividend is payed out)) and maybe a few more specific ones then buy and hold for at least 5 years. Confident and high maintenance with long horizon: maybe stock picking but you'll probably never be able to beat the market unless you invest 10's of hours in research per week. However this will also cost a bit and given your initial amount not advisable to do. Be sure that you also have a VERY close look at the prospectus of an investment (especially if you go with a (retail) bank and they \"\"recommend\"\" you certain actively traded funds). They tend to charge you quite a bit (yearly management fees of 2-3% (which is A LOT if you are eying maybe 7%-8% yearly) aren't unheard of). ETF's such IWDA only have for example a yearly cost of 0.20%. Personally I have one portfolio (of many) only consisting of that ETF (so IWDA) and one global small cap. It's one of the best and most consistant ones to date. In the end, the amount you start with doesn't really matter so much as long as it's enough to buy at least a few shares of what you have in mind. If you can then increase your portfolio over time and keep the expenses in check, compounding interest should do the rest.\"",
"title": ""
},
{
"docid": "19a399279fa3d682c76b0f1cb8422a2e",
"text": "IMO almost any sensible decision is better than parking money in a retirement account, when you are young. Some better choices: 1) Invest in yourself, your skills, your education. Grad school is one option within that. 2) Start a small business, build a customer base. 3) Travel, adventure, see the world. Meet and talk to lots of different people. Note that all my advice revolves around investing in YOURSELF, growing your skills and/or your experiences. This is worth FAR more to you than a few percent a year. Take big risks when you are young. You will need maybe $1m+ (valued at today's money) to retire comfortably. How will you get there? Most people can only achieve that by taking bigger risks, and investing in themselves.",
"title": ""
},
{
"docid": "1c5bd2ce8b907fb18c884646da71f621",
"text": "sell drugs? (joking) In all seriousness though, your options to legally invest this money are limited, which leaves you to extra-legal options..... which many young people engage, different kind of candy I guess. Ok so you cannot invest into stocks, to day trade. Because you're not an adult. You can put the money in a bank, but the interest rate on that amount of money is in the realm of ~0.1%. You can use the money to seed another legal business venture, say another kind of better candy. My advice is to get a parental unit to put the cash into a mutual fund, in your name... then hand that over to you when you turn 18.",
"title": ""
},
{
"docid": "57fce3ae5e1905a229985d4408016bf3",
"text": "\"It includes whatever you want to do with your investment. At least initially, it's not so much a matter of calculating numbers as of introspective soul-searching. Identifying your investment objectives means asking yourself, \"\"Why do I want to invest?\"\" Then you gradually ask yourself more and more specific questions to narrow down your goals. (For instance, if your answer is something very general like \"\"To make money\"\", then you may start to ask yourself, \"\"How much money do I want?\"\", \"\"What will I want to use that money for?\"\", \"\"When will I want to use that money?\"\", etc.) Of course, not all objectives are realistic, so identifying objectives can also involve whittling down plans that are too grandiose. One thing that can be helpful is to first identify your financial objectives: that is, money you want to be able to have, and things you want to do with that money. Investment (in the sense of purchasing investment vehicles likes stocks or bonds) is only one way of achieving financial goals; other ways include working for a paycheck, starting your own business, etc. Once you identify your financial goals, you have a number of options for how to get that money, and you should consider how well suited each strategy is for each goal. For instance, for a financial goal like paying relatively small short-term expenses (e.g., your electric bill), investing would probably not be the first choice for how to do that, because: a) there may be easier ways to achieve that goal (e.g., ask for a raise, eat out less); and b) the kinds of investment that could achieve that goal may not be the best use of your money (e.g., because they have lower returns).\"",
"title": ""
},
{
"docid": "41bf5cbee4234ed07d164d694903290a",
"text": "\"My basic rule I tell everyone who will listen is to always live like you're a college student - if you could make it on $20k a year, when you get your first \"\"real\"\" job at $40k (eg), put all the rest into savings to start (401(k), IRA, etc). Gradually increase your lifestyle expenses after you hit major savings goals (3+ month emergency fund, house down payment, etc). Any time you get a raise, start by socking it all into your employer's 401(k) or similar. And repeat the above advice.\"",
"title": ""
},
{
"docid": "10ac79d2ac6be5c20574e7d20547be22",
"text": "\"You have a few correlated questions here: Yes you can. There are only a few investment strategies that require a minimum contribution and those aren't ones that would get a blanket recommendation anyway. Investing in bonds or stocks is perfectly possible with limited funds. You're never too young to start. The power of interest means that the more time you give your money to grow, the larger your eventual gains will be (provided your investment is beating inflation). If your financial situation allows it, it makes sense to invest money you don't need immediately, which brings us to: This is the one you have to look at most. You're young but have a nice chunk of cash in a savings account. That money won't grow much and you could be losing purchasing power to inflation but on the other hand that money also isn't at risk. While there are dozens of investment options1 the two main ones to look at are: bonds: these are fixed income, which means they're fairly safe, but the downside is that you need to lock up your money for a long time to get a better interest rate than a savings account index funds that track the market: these are basically another form of stock where each share represents fractions of shares of other companies that are tracked on an index such as the S&P 500 or Nasdaq. These are much riskier and more volatile, which is why you should look at this as a long-term investment as well because given enough time these are expected to trend upwards. Look into index funds further to understand why. But this isn't so much about what you should invest in, but more about the fact that an investment, almost by definition, means putting money away for a long period of time. So the real question remains: how much can you afford to put away? For that you need to look at your individual situation and your plans for the future. Do you need that money to pay for expenses in the coming years? Do you want to save it up for college? Do you want to invest and leave it untouched to inspire you to keep saving? Do you want to save for retirement? (I'm not sure if you can start saving via IRAs and the like at your age but it's worth looking into.) Or do you want to spend it on a dream holiday or a car? There are arguments to be made for every one of those. Most people will tell you to keep such a \"\"low\"\" sum in a savings account as an emergency fund but that also depends on whether you have a safety net (i.e. parents) and how reliable they are. Most people will also tell you that your long-term money should be in the stock market in the form of a balanced portfolio of index funds. But I won't tell you what to do since you need to look at your own options and decide for yourself what makes sense for you. You're off to a great start if you're thinking about this at your age and I'd encourage you to take that interest further and look into educating yourself on the investments options and funds that are available to you and decide on a financial plan. Involving your parents in that is sensible, not in the least because your post-high school plans will be the most important variable in said plan. To recap my first point and answer your main question, if you've decided that you want to invest and you've established a specific budget, the size of that investment budget should not factor into what you invest it in. 1 - For the record: penny stocks are not an investment. They're an expensive form of gambling.\"",
"title": ""
},
{
"docid": "8e1d0b430b37edba8ebb7bd4beea39ae",
"text": "First of all I recommend reading this short e-book that is aimed at young investors. The book is written for American investors but they same rules apply with different terms (e.g. the equivalent tax-free savings wrappers are called ISAs in the UK). If you don't anticipate needing the money any time soon then your best bet is likely a stocks and share ISA in an aggressive portfolio of assets. You are probably better off with an even more aggressive asset allocation than the one in the book, e.g. 0-15% bond funds 85-100% equity funds. In the long term, this will generate the most income. For an up-to-date table of brokers I recommend Monevator. If you are planning to use the money as a deposit on a mortgage then your best bet might be a Help to Buy ISA, you'll have to shop around for the best deals. If you would rather have something more liquid that you can draw into to cover expenses while at school, you can either go for a more conservative ISA (100% bond funds or even a cash ISA) or try to find a savings account with a comparable interest rate.",
"title": ""
},
{
"docid": "4ca0852fdce161b965d5715975eb9a33",
"text": "\"As foundational material, read \"\"The Intelligent Investor\"\" by Benjamin Graham. It will help prepare you to digest and critically evaluate other investing advice as you form your strategy.\"",
"title": ""
},
{
"docid": "7366cb823333bf38dfaed036b84e535e",
"text": "Great question and great of you to be paying attention to this. Right now having the ability to save $2K per year might seem very out of reach. However with the right career path and by paying attention to personal finance saving 2K per month will become possible sooner than you may think. As a student you are already investing in your future, by building your greatest wealth building tool: your income. Right now concentrate on that. If you have extra money throw it in a boring old savings account and don't touch it other than emergencies. An emergency is defined as something that will preclude you from completing your education. It is not paying for the latest xbox game/skateboard/once in a lifetime trip. An important precursor to investing is having an emergency fund that sits in a boring old savings account earning almost nothing. Think of it as an insurance policy that prevents you from liquidating your investments in case of and emergency. Emergencies often come during economic downturns. If you have to liquidate your investment to cover these times then you will lock in negative returns. Once you are done with school, moved into a place of your own, and have your first job you will have a nice start on your emergency fund. Then you can start investing. Doing it in the right order you will be amazed how quickly your savings can accumulate. I'd be shooting for that 2 million by the time you are 40, not 65.",
"title": ""
},
{
"docid": "b272698e1679609d91d03ae6740f5359",
"text": "I started my career over 10 years ago and I work in the financial sector. As a young person from a working class family with no rich uncles, I would prioritize my investments like this: It seems to be pretty popular on here to recommend trading individual stocks, granted you've read a book on it. I would thoroughly recommend against this, for a number of reasons. Odds are you will underestimate the risks you're taking, waste time at your job, stress yourself out, and fail to beat a passive index fund. It's seriously not worth it. Some additional out-of-the box ideas for building wealth: Self-serving bias is pervasive in the financial world so be careful about what others tell you about what they know (including me). Good luck.",
"title": ""
},
{
"docid": "e67ccb30c3a5db2fe0d4415199808c70",
"text": "You should invest in that with the best possible outcome. Right now that is in yourself. Your greatest wealth building tool, at this point, is your future income. As such anything you can do to increase your earnings potential. For some that might mean getting an engineering degree, for others it might mean starting a small business. For some it is both obtaining a college degree and learning about business. A secondary thing to learn about would be personal finance. I would hold off on stocks, at this time, until you get your first real job and you have an emergency fund in place. Penny stocks are worthless, forget about them. Bonds have their place, but not at this point in your life. Saving up for college and obtaining a quality education, debt free, should be your top priority. Saving up for emergencies is a secondary priority, but only after you have more than enough money to fund your college education. You can start thinking about retirement, but you need a career to help fund your savings plan. Put that off until you have such a career. Investing in stocks, at this juncture, is a bit foolish. Start a career first. Any job you take now should be seen as a step towards a larger goal and should not define who you are.",
"title": ""
},
{
"docid": "a8fa04eaae270a59d75c5b36c12e036b",
"text": "\"Between \"\"fresh out of college\"\" and \"\"I have no debts, and a support system in place which because of which I can take higher risks.\"\" I would put every penny I could afford in the riskiest investment platform I was willing to. Holding onto money in a bank account is likely to cost you %1-%2 a year depending on what interest rates are and what inflation looks like. Money invested in a market could loose it all for you or you could become an overnight millionaire. Loosing it all would suck but you are young you will bounce back. Losing it slowly to inflation is just silly when you are young. If there is something you know you have to do in the next few years start to save for it but otherwise use the fact that you are young and have a safety net to try to make money.\"",
"title": ""
},
{
"docid": "1805ce71824f0d9e5274a06566cfe5f8",
"text": "\"I don't think you should mix the two notions. Not starting out with at least. It takes so much money, time and expertise to invest for income that, starting out at least, you should view it as a goal, not a starting point. Save your money in the lowest cost investments you can find. If you are like me, you can't pick a stock from a bond, so put your money into a target retirement fund. Let the experts manage the risk and portfolio. Start early and save often! At only 35 you have lots of time. Perhaps you are really into finance, in which case you might somebody manage your own portfolio. Great, but for now, let an expert do the heavy lifting. You are an app developer. Your best bet to increase your income stream with via your knowledge and expertise. While you are still so young, you should use labor to make money, and then save that money for retirement. I am going to make an assumption that where you are will software development means you can become a great developer long before you can become a great financier. Play to your strengths. I am also afraid you are over estimating how comfortable you are with risk. Any \"\"investment\"\" that has the kinds of returns you are looking for is going to be wildly risky. I would say those types of opportunities are more \"\"speculation\"\" rather than \"\"investments.\"\" There isn't necessarily anything wrong with speculations, but know the difference in risk. Are you really willing to gamble your retirement?\"",
"title": ""
}
] |
fiqa
|
27253fa8c490e4169293c75b960b659c
|
Should I take a personal loan for my postgraduate studies?
|
[
{
"docid": "b5c16b0ba57bfd6826ff48f0d965725e",
"text": "If you are eligible for FEE-HELP then this is by far the cheapest way of financing higher education in Australia.",
"title": ""
},
{
"docid": "89f1ade5a5d1facb184bb496ca30acfd",
"text": "I would not take this personal loan. Let's look closer at your options. Currently, you are paying $1100 a month in rent, and you have all the money saved up that you need to be able to pay cash for school. That's a good position to be in. You are proposing to take out a loan and buy an apartment. Between your new mortgage and your new personal loan payment, you'll be paying $1500 a month, and that is before you pay for the extra expenses involved in owning, such as property taxes, insurance, etc. Yes, you'll be gaining some equity in an apartment, but in the short term over the next two years, you'll be spending more money, and in the first two years of a 30 year mortgage, almost all of your payment is interest anyway. In two years from now, you'll have a master's degree and hopefully be able to make more income. Will you want to get a new job? Will you be moving to a new city? Maybe, maybe not. By refraining from purchasing the apartment now, you are able to save up more cash over the next two years and you won't have an apartment tying you down. With the money you save by not taking the personal loan, you'll have enough cash for a down payment for an apartment wherever your new master's degree takes you.",
"title": ""
},
{
"docid": "57f49375edc6630c93e584cdd1b96b07",
"text": "As mentioned in the comments, there are costs associated with owning & living in an apartment. First you have to pay maintenance charges on a monthly basis and perhaps also property tax. Find out the overall outgoings when you live in that apartment & add the EMI payments to the bank, it should not be way higher than your current rent. As an advantage you are getting an asset when you buy an apartment & rent is a complete loss, ast least financial terms. So, real estate is in general a good idea over paying rent. As for the loan part, personal loans are by far the most expensive of loans as they are in general unsecured loans (but do check with your bank). One way is to try and get a student loan, which should be cheaper. If you can borrow from family that is the best option, you could return the money with perhaps bank fixed deposit rates, it is better to pay family interest than bank. If none of the options are workable, then personal loan is something you need to look at with a clear goal to pay it off as soon as possible and try to take it in stages, as an when you require it and if possible avoid taking all the 15,000/- at once.",
"title": ""
},
{
"docid": "f167e9195270c46a1c2ae9acdf9247e6",
"text": "I would delay purchase of a condo or apartment until you have at a minimum, 6 months of living expenses including mortgage set aside in other investments that could be liquidated. If you lost your source of income though disability or layoff or an unexpected termination of a grant, you need to have that cushion or a significant other whose salary can sustain payments. You could lose a lot if you either cannot make the payments and/or the value to the apartment dips greatly. Many folks in the recent housing bubble and Great Recession learned this the hard way. Many lost their entire investment by not being able to make payments AND seeing their house lose 1/3 of its value.",
"title": ""
}
] |
[
{
"docid": "83266596284f73cb8a10197cbc46f3f0",
"text": "Fantastic question to be asking at the age of 22! A very wise man suggested to me the following with regard to your net income I've purposely not included saving a sum of money for a house deposit, as this is very much cultural and lots of EU countries have a low rate of home ownership. On the education versus entrepreneur question. I don't think these are mutually exclusive. I am a big advocate of education (I have a B.Eng) but have following working in the real world for a number of years have started an IT business in data analytics. My business partner and I saw a gap in the market and have exploited it. I continue to educate myself now in short courses on running business, data analytics and investment. My business partner did things the otherway around, starting the company first, then getting an M.Sc. Other posters have suggested that investing your money personally is a bad idea. I think it is a very good idea to take control of your own destiny and choose how you will invest your money. I would say similarly that giving your money to someone else who will sometimes lose you money and will charge you for the privilege is a bad idea. Also putting your money in a box under your bed or in the bank and receive interest that is less than inflation are bad ideas. You need to choose where to invest your money otherwise you will gain no advantage from the savings and inflation will erode your buying power. I would suggest that you educate yourself in the investment options that are available to you and those that suit you personality and life circumstances. Here are some notes on learning about stock market trading/investing if you choose to take that direction along with some books for self learning.",
"title": ""
},
{
"docid": "3dd66282abc2576d2df51f5815fca851",
"text": "\"You are not \"\"the economy\"\". The economy is just the aggregate of what is going on with everyone else. You should make the decision based on your own situation now and projected into the future as best you can. Loan rates ARE at historical lows, so it is a great time to take a loan if you actually need one for some reason. However, I wouldn't go looking for a loan just because the rates are low for the same reason it doesn't make sense to buy maternity clothes if you are a single guy just because they are on sale.\"",
"title": ""
},
{
"docid": "cb01b43af8a14be26c06ee2123239bbd",
"text": "I'm surprised no one has picked up on this, but the student loan is an exception to the rule. It's inflation bound (for now), you only have to pay it back as a percentage of your salary if you earn over £15k (11% on any amount over that I believe), you don't have to pay it if you lose your job, and it doesn't affect your ability to get credit (except that your repayments will be taken into account). My advice, which is slightly different to the above, is: if you have any shares that have lost more than 10% since you bought them and aren't currently recovering, sell them and pay off your debts with those. The rest is down to you - are they making more than 10% a year? If they are, don't sell them. If your dividends are covering your payments, carry on as you are. Otherwise it's down to you.",
"title": ""
},
{
"docid": "64f70c6501c986eba6ec4638f27efbcb",
"text": "\"While I haven't experienced being \"\"grad student poor\"\" myself (I went to grad school at night and worked full-time), I would shoot for 10-20% per month ($150-$300). This depends of course on how much you currently have in savings. If it isn't much, you might want to attempt a higher savings percentage (30-40%). If you can move to a less-expensive place, do that as soon as you can. It's your largest expense; any place you can spend less on than $900 creates instance savings without having to sacrifice what you categorize as living expenses.\"",
"title": ""
},
{
"docid": "c138391e73776ca0eda4e01fa2c3c5ac",
"text": "\"No you should not borrow money at 44.9%. I would recommend not borrowing money except for a home with a healthy deposit (called down payment outside UK). in December 2016, i had financial crisis So that was like 12 days ago. You make it sound like the crisis was a total random event, that you did nothing to cause it. Financial crises are rarely without fault. Common causes are failure to understand risk, borrowing too much, insuring too little, improper maintenance, improper reserves, improper planning, etc... Taking a good step or two back and really understanding the cause of your financial crisis and how it could be avoided in the future is very useful. Talk to someone who is actually wealthy about how you could have behaved differently to avoid the \"\"crisis\"\". There are some small set of crises that are no fault of your own. However in those cases the recipe to recovery is patience. Attempting to recover in 12 days is a recipe for further disaster. Your willingness to consider borrowing at 44% suggests this crisis was self-inflicted. It also indicates you need a whole lot more education in personal finance. This is reinforced by your insatiable desire for a high credit score. Credit score is no indication of wealth, and is meaningless until you desire to borrow money. From what I read, you should not be borrowing money. When the time comes for you to buy a home with a mortgage, its fairly easy to have a high enough credit score to borrow at a good rate. You get there by paying your bills on time and having a sufficient deposit. Don't chase a high credit score at the expense of building real wealth.\"",
"title": ""
},
{
"docid": "20dea3b2e4cbbd789235606ea60ee020",
"text": "At your age, the only place you are going to get a loan is from relatives. If you can't... Go to next year's conference. Missing it this year might feel like a disaster, but it really, really isn't.",
"title": ""
},
{
"docid": "fe73ab1c09979528e333f386a0bfffa7",
"text": "most of the people who lurk in money.se will probably tell you to spend as little as possible on a car, but that is a really personal decision. since you live with your parents, you can probably afford to waste a lot of money on a car. on the other hand, you already have a large income so you don't really have the normal graduate excuses for deferring student loans and retirement savings. for the sake of other people in a less comfortable position, here is a more general algorithm for making the decision:",
"title": ""
},
{
"docid": "183c98ad45a853091bb8f205000035a3",
"text": "You should pay for school with cash. If you take out a loan, you are not really saving money; you are borrowing money. I do not think you will come out ahead borrowing a down payment at student loan rates.",
"title": ""
},
{
"docid": "32c41f3ceddd2b15e339c306af49cfd8",
"text": "In USA, if you take a personal loan, you will probably get rates between 8-19%. It is better that you take a loan in India, as home loan rates are about 10.25%(10.15% is the lowest offered by SBI). This might not be part of the answer, but it is safer to hold USD than Indian rupees as India is inflating so much that the value of the rupee is always going lower(See 1970 when you could buy 1 dollar for 7 rupees). There might be price fluctuations where the rupee gains against the dollar, but in the long run, I think the dollar has much more value(Just a personal opinion). And since you are taking a home loan, I am assuming it will be somewhere between 10-20 years. So, you would actually save a lot more on the depreciating rupee, than you would pay interest. Yes, if you can get a home loan in USA at around 4%, it would definitely be worth considering, but I doubt they will do that since they would not know the actual value of the property. Coming to answer your question, getting a personal loan for 75k without keeping any security is highly unlikely. What you can do since you have a good credit score, is get a line of credit for 20-25k as a backup, and use that money to pay your EMI only when absolutely required. That way, you build your credit in the United States, and have a backup for around 2 years in India in case you fail to pay up. Moreover, Line of credits charge you interest only on the amount, you use. Cheers!",
"title": ""
},
{
"docid": "c0613c4e8eee7e2e09fa10276b13c66a",
"text": "It depends. If cost of tuition + income forgone during studying years is less than your lifelong discounted incremental cash flows you receive thanks to your education, then it is not worth it. If your studies are, say, 150K, and you forego another 60K/y during 4 years of university, you will need to make roughly 39K ***more*** per year until you retire than you otherwise would have, or more, for your degree to be worth it. I don't see that as very realistic scenario for 90% of the people who get degrees. Obviously cheaper/more expensive degrees, different discount rate assumptions, and different salaries before/during/after university are different from person to person. That's why everyone has to make their own calculation and then decide whether or not to make such a risky investment in themselves.",
"title": ""
},
{
"docid": "69100a1275675a01cd3378b1156f262a",
"text": "Does that justify the purpose? That is for individual Banks to decide. No bank would pay for daily expenditure if you are saying primary salary you are spending on eduction. So your declaration is right. You are looking at funding your eduction via loan and you are earning enough for living and paying of the loan. I noticed that a lot of lenders do not lend to applicants whose purpose is to finance the tuition for post-secondary education This could be because the lenders have seen larger percentage defaults when people opt for such loans. It could be due to mix of factors like the the drag this would cause to an individual who may not benefit enough in terms of higher salary to repay the loan, or moves out of country getting a better job. If it is education loan, have you looked at getting scholarships or student loans.",
"title": ""
},
{
"docid": "1f22df4ad20c173484ea9d80aa08c158",
"text": "Could you perhaps expand on your reasoning behind wanting to take a loan in the first place? Why would you even consider taking a loan for as much as £7,500 (or even much less) if you aren't planning on buying / investing in anything in particular, and you're not in a bad financial situation? If your account never drops below a hundred or two pounds, why would you need to loan money? Just get yourself a credit card, for those times when you might find yourself without money for a short while. But really, it sounds to me like you should be able to set aside a small sum of money every month and create your own savings buffer to cover these situations.",
"title": ""
},
{
"docid": "0a650c6cb599a5da5b1517644cefd71c",
"text": "It's not a question with a single right answer. Other answers have addressed some aspects, my case may provide some guidance as to one way of looking at some of the issues. When I had student loans, the interest rate was RPI¹ and I could get more than that as the return on a savings account. At the time I could get a whole year's worth of loan at the start of the year, save it, and draw from the savings, partly because I had a little working capital saved already. Importantly in my case, the loans were use-it-or-lose-it: if I didn't take the loan out by about halfway through each academic year, it was no longer available to me. The difference in interest rates was probably similar to what you can get with a careful choice of savings account and 0% on the loan (I did this in the 90s when interest rates were higher). Over a four year degree the interest I earned this way added up to no more than about £100, which went someway towards offsetting the fact I would be paying interest after graduation. If you can clear the loan before you pay any interest it would give you a return, but a small one that could easily be eroded by rate changes or errors on your part (like not keeping on top of the paperwork). It still may be beneficial to take out the loans depending on your capital needs -- in my case it made buying a house after graduating much easier, as we still had money for the deposit (downpayment) and student loan rates were much lower than mortgage rates (100% mortgages were also available then, but expensive). ¹ RPI stands for retail price index, a measure of inflation.",
"title": ""
},
{
"docid": "41fdc304172ec2f72ca589e47eb4acf4",
"text": "I think most people have already answered this one pretty well. (It's usually worth it, as long as you pay it off before the interest kicks in, and you don't get hit with any fees.) I just wanted to add one thing that no one else has pointed out: Applying for the loan usually counts as a hard pull on your credit history. It also changes your Debt-to-income ratio (DTI). This can negatively impact your credit score. Usually, the credit score impact for these (relatively) small loans isn't that much. And your score will rebound over time. However, if it makes your score drop below a certain threshold, (e.g. FICO dips below 700), it could trip you up if you are also applying for other sources of credit in the immediate future. Not a big deal, but it is something to keep in mind.",
"title": ""
},
{
"docid": "a29b0792cd39ac89b4fa096127c4a585",
"text": "When is the right time to buy a new/emerging technology? When it's trading at a discount that allows you to make your money back and then some. The way you presented it, it is of course impossible to say. You have to look at exactly how much cheaper and efficient it will be, and how long that will take. Time too has a cost, and being invested has opportunity cost, so the returns must not only arrive in expected quantity but also arrive on time. Since you tagged this investing, you should look at the financial forecasts of the business, likely future price trajectories, growth opportunity and so on, and buy if you expect a return commensurate with the risk, and if the risk is tolerable to you. If you are new to investment, I would say avoid Musk, there's too much hype and speculation and their valuations are off the charts. You can't make any sensible analysis with so much emotion running wild. Find a more obscure, boring company that has a sound business plan and a good product you think is worth a try. If you read about it on mainstream news every day you can be sure it's sucker bait. Also, my impression that these panels are actually really expensive and have a snowball's chance in Arizona (heh) in a free market. Recently the market has been manipulated through green energy subsidies of a government with a strong environmentalist voter base. This has recently changed, in case you haven't heard. So the future of solar panels is looking a bit uncertain. I am thinking about buying solar panels for my roof. That's not an investment question, it's a shopping question. Do you actually need a new roof? If no, I'd say don't bother. Last I checked the payoff is very small and it takes over a decade to break even, unless you live in a desert next to the Mexican border. Many places never break even. Electricity is cheap in the United States. If you need a new roof anyway, I suppose look at the difference. If it's about the same you might as well, although it's guaranteed to be more hassle for you with the panels. Waiting makes no sense if you need a new roof, because who knows how long that will take and you need a roof now. If a solar roof appeals to you and you would enjoy having one for the price available, go ahead and get one. Don't do it for the money because there's just too much uncertainty there, and it doesn't scale at all. If you do end up making money, good for you, but that's just a small, unexpected bonus on top of the utility of the product itself.",
"title": ""
}
] |
fiqa
|
65dd5e789c703233544d31b3301fde55
|
Term loan overpayment options: applied to principal, or…?
|
[
{
"docid": "964ef441a36a8f3558d245c82db5bc45",
"text": "It may have been the standard practice for a long time, and indeed it still is the common practice for my credit union to apply all excess payment directly to the principal. At the risk of sounding a little cynical, I will suggest that there is a profit motive in the move to not applying excess payments to principal unless directly instructed to do so. Interest accrued isn't reduced until the principal is reduced, so it benefits the creditor to both have the money in advance and to not apply it to the principal. You should probably move forward with the expectation that all of your creditors are adversarial even if only in a passive-aggressive manner.",
"title": ""
}
] |
[
{
"docid": "f469de3a87578e7a61a6c7eb70775a2b",
"text": "No, it means that each year (Annual Payment Rate) you are accruing interest at 29.8%. If your principal is $10,000, that means you are gaining $3,000 of debt per year in addition to this, excluding payments you make/interest on interest.",
"title": ""
},
{
"docid": "1ad8afd66a346863ad67ec813bbba710",
"text": "The mortgage I got last year through Wells Fargo explicitly indicates in its terms that excess payment will be considered against future payments (i.e., pay $500 extra in January and you owe $500 less in February) unless indicated otherwise. It goes on to state that with electronic payments you do not get to specify where excess payment goes, so excess payment made electronically always goes toward future payments. If you want to make excess payments toward principal, you must actually send them a check and your payment stub, with the appropriate box ticked. This won't be very different for other major banks, I wouldn't imagine.",
"title": ""
},
{
"docid": "34bacfa3796d76042aaafb7401387d75",
"text": "\"The \"\"Actual Applied Rate\"\" of 7.5% is the total amount of interest charged over the life of the loan, $2,204.82, divided by the loan amount divided by three years. This amount is lower than the actual interest rate of 13.69% because interest charges are based on loan principle which reduces over the life of the loan.\"",
"title": ""
},
{
"docid": "6a32ab6bf72d834302a6fca7bae388b3",
"text": "\"So with any debt, be it a loan or a bond or anything else, you have two parts, the principal and the interest. The interest payment is calculated by applying the interest % to the principal. Most bonds are \"\"bullet bonds\"\" which means that the principle remains completely outstanding for the life of the bond and thus your interest payments are constant throughout the life of the bond (usually paid semi-annually). Typically part of the purpose of these is to be indefinitely refinanced, so you never really pay the principal back, though it is theoretically due at expiration. What you are thinking of when you say a loan from a bank is an amortizing loan. With these you pay an increasing amount of the principal each period calculated such that your payments are all exactly the same (including the final payment). Bonds, just like bank loans, can be bullet, partially amortizing (you pay some of the principle but still have a smaller lump sum at the end) and fully amortizing. One really common bullet structure is \"\"5 non-call 3,\"\" which means you aren't allowed to pay the principle down for the first three years even if you want to! This is to protect investors who spend time and resources investing in you!\"",
"title": ""
},
{
"docid": "02e05f5235a7d8057f0aed641c5c7262",
"text": "You may need to specifically state that your extra payments should go towards principal, and should not be considered early payments of future months.",
"title": ""
},
{
"docid": "8500623441de74685beaa0c4c6b26782",
"text": "Yes, for a credit card, payments in excess of the minimum will go toward principal. This is not always the case with a mortgage, where prepayments of extra principal need to be explicitly stated.",
"title": ""
},
{
"docid": "c7b257f2709405b41df0a6ea0a3eacf7",
"text": "Yes. it is possible, I have seen many times banks permitting overdrawing and later charging a high courtesy fees. Of course in many countries this is not permitted. In one of my account, I am running negative balance as the bank has charged its commission which is not due.",
"title": ""
},
{
"docid": "347811f50c265db95041d70d0b4ce06c",
"text": "\"Another option would be to not refinance but also not pay any extra each month but to continue as you are making the existing payments and just put the \"\"extra\"\" you would have paid aside in an investment of some type (something you are comfortable with) This as the added benefit of not tying up this extra money in your house should you need it in the next few years for something else. You would then have the option in 2 or 3 years of continuing on this path or closing the investment and paying off the remaining principal in one lump sum. If nothing else that big payment would be a really fun check to write.\"",
"title": ""
},
{
"docid": "1bea3d52dd8f05cf5b4cfdeeec0e3641",
"text": "\"We payed off our Mortgage early...at first in small extra payments to principal, and finally a lump sum. Each extra payment to principal reduced the balance, and reduced every payment going forward. I have, somewhere, an excel spreadsheet where I tracked this... - =CUMIPMT((interestRate/12),term,pymtNumber,balance,balance,0) computed the interest payment due - =currentPrincipal + CUMIPRINTresultAbove computed the monthly principal payment Occasionally I would update the month-ending Principal balance against what the mortgage company told me. It was usually off by a little. My mortgage company required me to specifically contact them for a payoff amount before I wrote the final check. I've never heard of a mortgage where prepayment of all expected interest following the original schedule is required. I would guess it is against federal (US) law. Lets think about that for a moment... out of \"\"interest\"\", I recently computed that for our 30 year loan at 6-5/8% on about 145, we payed a total of 106000 in interest. That include a refi to 4-7/8 10-years in to a 15-year loan, and paying it off 20 years after the original loan was granted. As far as not paying all the theoretical interest due... - If they get a fixed dollar amount of service interest back, there's no incentive to me to pay on-time. I owe the same amount if I pay it today or if I pay it 6 months late, after I gambled the mortgage money and finally won. (yea, I know they could write the mortgage to penalize me for paying late, but I'm ignoring that) - if you were requried to pay off all the interest that might accrue, how could you ever sell your home, or refinance, for that matter? When I refi'd, the new holder payed the old holder 98,000. If the original holder had required prepayment of all the interest that would be accrued to the original schedule, the new mortgage would've been 200k. It would just never be a good deal to buy a home if mortgages worked under that term. I have had a car loan that worked differently -- they pre-computed the total interest due and then divided it over the term of the loan equally. I could pay off early and they stopped collecting interest.\"",
"title": ""
},
{
"docid": "8f97b75233d5e51b71eab583f15aa38f",
"text": "\"The monthly bill should reduce as required by Loan A no longer requiring payment. This will occur only when Loan A is fully payed off, not before. If you're going to do this, make sure you tell them that any extra money is principal reduction, and not \"\"prepayment\"\" Lets say you do pay off loan A, and you continue to pay $11 a month. If you specify \"\"principle reduction\"\" for the $1 extra, they must reduce the loan balance by $1. If you do not specify, or you specify \"\"prepayment\"\", they \"\"may\"\" apply $0.20 to principal reduction and $0.80 to interest.\"",
"title": ""
},
{
"docid": "6b996e352bd15885b1fe99402e082c5d",
"text": "Maybe one of my issues is that I have a 5 year model with a terminal value. The repayment of debt principal is outside this time frame so I don't assume any repayment. If you're valuing a company share price though you don't model all debt repayments.",
"title": ""
},
{
"docid": "2c0081f11b746bf57c7e9a1076671560",
"text": "Basically, what you describe exists in many countries - not in the USA though. In Europe, people have checking accounts with allowed overdraft, typically three month net salaries. You can just this money any day as you like, and pay it back - completely or partially - any day as you like. Interest is calculated for each day on the amount used that day; and the collateral is 'future income', predicted / expected from previous income. In the USA, credit cards have taken its place, with stricter different rules and limitations. In addition, many of the extra rules in loans were invented to take advantage of the ignorance or situation of the borrower to make even more money. For example, applying extra payments to future due payments instead of to the principal makes that principal produce more interest while the extra payments just sit around.",
"title": ""
},
{
"docid": "b3415a1c53a9d79df08c7fa642104a2f",
"text": "Simply put, for a mortgage, interest is charged only on the balance as well. Think of it this way - on a $100K 6% loan, on day one, 1/2% is $500, and the payment is just under $600, so barely $100 goes to principal. But the last payment of $600 is nearly all principal. By the way, you are welcome to make extra principal payments along with the payment due each month. An extra $244 in this example, paid each and every month, will drop the term to just 15 years. Think about that, 40% higher payment, all attacking the principal, and you cut the term by 1/2 the time.",
"title": ""
},
{
"docid": "c81c62b53c37a1d56b8be95b51b757ae",
"text": "So the principle is true. Assuming that you get paid bi-weekly, you end up getting three paychecks two months during the year. Typically that is in January and July/August. So if things were different, and your mortgage was setup so you paid half a monthly payment each paycheck, then you would wind up making one full extra payment per year. Making that extra payment, most often, reduces the mortgage by 7 years on a 30 year note. While true, many of these companies charge exorbitant fees for the right for you to do so, so the principal reduction is not commensurate with what you are paying. You can simply do this yourself without paying fees. On those extra pay days, pay half a payment to principal only, and no fee, no fuss. This is pretty easy to do with most mortgage companies as they have online payments and it is just a matter of filling out a web form. For me this does not even cost a stamp as they pull from my checking account at another bank.",
"title": ""
},
{
"docid": "5912fe013d03f8d669c32cb45c42b042",
"text": "I had a car loan through GMAC and extra money was applied to future payments. At one point, I received a statement telling me I had 15 months until my next payment was due because I had not marked extra payments as going to principal.",
"title": ""
}
] |
fiqa
|
d9fee9967835540d580f3c4d29928bde
|
Calculate a weekly payment on a loan when payment is a month away
|
[
{
"docid": "15457f6e3728fd7f9ee203c28a946c37",
"text": "Using the standard loan formula with 21% APR nominal, compounded weekly. Calculate an adjusted loan start value by adding 31 - 7 = 24 extra days of daily interest (by converting the nominal compounded weekly rate to a daily rate). For details see Converting between compounding frequencies Applying the standard formula r (pv)/(1 - (1 + r)^-n) = 189.80 So every weekly payment will be 189.80 Alternatively Directly arriving at the same result by using the loan formula described here, The extension x is 31 - 7 = 24 daily fractions of an average week (where 7 daily fractions of an average week equal one average week). As before, the weekly payment will be 189.80 Both methods are effectively the same calculation.",
"title": ""
},
{
"docid": "b2ca60e1f757516b41e9fd67b5707998",
"text": "At time = 0, no interest has accrued. That's normal. And the first payment is due after a month, when there's a month's interest and a bit of principal due. Note - I missed weekly payments. You'd have to account for this manually, add a month's interest, then calculate based on weekly payments.",
"title": ""
},
{
"docid": "d8daa76dbdb645d5b8cf76a415051d09",
"text": "\"You'd have to look at the terms of the loan to be sure, but if the interest compounds weekly then you'd have to calculate the effect of 3 compounding periods, then compute for weekly payments. The balance after 3 weeks would be: Using Excel's PMT function for that principal balance, I get a weekly payment of $189.48. If the interest doesn't compound, the principal balance will be about $8888.37 and the weekly payment would be $189.85. Note, however, that the terms of the loan could be completely customized, so you'd need to be sure that the payment and the amortization schedule make sense to you before you agree to the loan. Since the interest is very high, I suspect this is a \"\"no credit needed\"\" car loan which are notorious for unfavorable (to the borrower) terms.\"",
"title": ""
}
] |
[
{
"docid": "557a6cad91cdbb47585518cd2448d807",
"text": "If they short the contract, that means, in 5 months, they will owe if the price goes up (receive if the price goes down) the difference between the price they sold the future at, and the 3-month Eurodollar interbank rate, times the value of the contract, times 5. If they're long, they receive if the price goes up (owe if the price goes down), but otherwise unchanged. Cash settlement means they don't actually need to make/receive a three month loan to settle the future, if they held it to expiration - they just pay or receive the difference. This way, there's no credit risk beyond the clearinghouse. The final settlement price of an expiring three-month Eurodollar futures (GE) contract is equal to 100 minus the three-month Eurodollar interbank time deposit rate.",
"title": ""
},
{
"docid": "798cff6a3a52fef325e5808244302d46",
"text": "Reading Great Lakes' page How Payments Are Applied, I think you are probably correct about how the payments are applied: Interest first, minimum on each loan next, then any extra is applied to the highest interest loan. If I were you, I would make one payment a month, and I would make that payment as large as I possibly could. Trying to make more than one payment in a month is too complicated (and you aren't sure exactly how those payments get credited), and saving up for a big payment every few months is pointless and will cost you interest.",
"title": ""
},
{
"docid": "4bd07322012f097a21bf63a11cc85067",
"text": "Since the compounding period and payment period differs (Compounded Daily vs Paid Monthly), you need to find the effective interest rate for one payment period (month). This means that each month you pay 0.33387092772% of the outstanding principal as interest. Then use this formula to find the number of months: Where PV = 21750, Pmt = 220, i = 0.0033387092772 That gives 120 Months. Depending on the day count convention, (30/360 or 30.416/365 or Actual/Actual), the answer may differ slightly. Using Financial Calculator gives extremely similar answer. The total cash paid in the entire course of the loan is 120 x $220 = $26,400",
"title": ""
},
{
"docid": "354869e879f074d72e1abac7d1351121",
"text": "A payment of $224 at 7.2% interest will pay off a $33000 mortgage in 30 years. Unfortunately, I'm on cold medicine so guessing was the only way I got to the answer, but I guessed right on the first try :). However, if you like algebra: The following formula is used to calculate the fixed monthly payment (P) required to fully amortize a loan of L dollars over a term of n months at a monthly interest rate of c. [If the quoted rate is 6%, for example, c is .06/12 or .005]. P = L[c(1 + c)n]/[(1 + c)n - 1]",
"title": ""
},
{
"docid": "b394fb12247f8f51b41e8ffda1d19a02",
"text": "You need the Present Value, not Future Value formula for this. The loan amount or 1000 is paid/received now (not in the future). The formula is $ PMT = PV (r/n)(1+r/n)^{nt} / [(1+r/n)^{nt} - 1] $ See for example http://www.calculatorsoup.com/calculators/financial/loan-calculator.php With PV = 1000, r=0.07, n=12, t=3 we get PMT = 30.877 per month",
"title": ""
},
{
"docid": "224a2b8fb722f75d47bbb68da882e4f8",
"text": "With the $2000 downpayment and interest rate of 11.5% nominal compounded monthly the monthly payments would be $970.49 As you state, that is a monthly rate of 0.9583% Edit With the new information, taking the standard loan equation where Let Now setting s = 98000, with d = 990.291 solve for r",
"title": ""
},
{
"docid": "3ebe277b33ff978605066cd87d13683e",
"text": "\"I feel that getting money sooner than later is always advantageous. If I offered you the choice between getting: Which option would you take? I would take the last option. And for the same reason, from a purely-numbers point of view, I would argue that getting paid biweekly is preferable (assuming the the annual salary is pro-rated fairly, and barring any compulsive spending habits). Your calculations suggest to me that they are trying to answer the question, \"\"Looking at a single year or month (or some other fixed amount of time) in a vacuum, is there any financial benefit to being paid bi-weekly over monthly?\"\". The analysis seems to be focusing on comparing the two pay schedules on a month-by-month basis, noting when one is paid bi-weekly, some months you get paid more times than the other. However, one could also compare the two pay schedules on a fortnight-by-fortnight basis, and note that when one is paid monthly, many fortnights you don't get paid at all, and some you get paid a lot. Or one could compare the two pay schedules on an hour-by-hour basis, too. But in the long run, the money adds up to be the same amount. I prefer getting it as soon as I can.\"",
"title": ""
},
{
"docid": "f595b1e50b0683b20aa07a69001c969c",
"text": "\"One way to think of the typical fixed rate mortgage, is that you can calculate the balance at the end of the month. Add a month's interest (rate times balance, then divide by 12) then subtract your payment. The principal is now a bit less, and there's a snowball effect that continues to drop the principal more each month. Even though some might object to my use of the word \"\"compounding,\"\" a prepayment has that effect. e.g. you have a 5% mortgage, and pay $100 extra principal. If you did nothing else, 5% compounded over 28 years is about 4X. So, if you did this early on, it would reduce the last payment by about $400. Obviously, there are calculators and spreadsheets that can give the exact numbers. I don't know the rules for car loans, but one would actually expect them to work similarly, and no, you are not crazy to expect that. Just the opposite.\"",
"title": ""
},
{
"docid": "1f44a13c0f9aa05b0b154df9f73321d6",
"text": "The formula you need is: M = (r * PV) / (1 - ((1+r)^(-n))) M = monthly payment ($350) r = interest per period (7.56% / 12) = 0.63% n = number of periods (36 months) PV = present value, or here, your max loan amount given M Therefore: $350 = (0.63% * PV) / (1 - ((1+0.63%)^(-36))) The denominator on the right ends up equal to ~ 0.2025 when you do the math in your calculator. Carry that over to the by multiplying both sides of the equation by 0.2025 This results in $70.82 = 0.63% * PV Divide $70.82 by 0.63% to get PV = $11,242 (roughly). Hope this helps explain it algebraically!!",
"title": ""
},
{
"docid": "8fe95ac44f4d7345a6a9bf5df235d0e2",
"text": "One option is to try to get a month ahead on your mortgage payments. Rather than using the current month's rent to pay the current month's mortgage payments, try to use the previous month's rent to pay the current month's mortgage payments. This should allow you to pay on time rather than late but not unacceptably late.",
"title": ""
},
{
"docid": "0728c771610b8d73857743160db5d244",
"text": "This is of course using 'new math'. Namely, if I lend you $100 and you keep it for a month, I've lent you $100. In fact, if I loan you $100 for a year I've loaned you $100. But if I lend you $100 overnight, you pay me back in the morning, I lend you $100 overnight, you pay me back in the morning and we repeat that for a month, I've supposedly lent you $3,000. That's some interesting math for sure.",
"title": ""
},
{
"docid": "fb27c66a35cc55960c02af798c2cf7b9",
"text": "\"You'd have to check the terms of your contract. On most installment loans, I think, they calculate interest monthly, not daily. That is, if you make 3 payments of $96 over the course of the month instead of one payment of $288 at the end of the month (but before the due date), it makes absolutely zero difference to their interest calculation. They just total up your payments for the month. That's how my mortgage works and how some past loans I've had worked. All you'd accomplish is to cost yourself some time, postage if you're mailing payments, and waste the bank's time processing multiple payments. If the loan allows you to make pre-payments -- which I think most loans today do -- then what DOES work is to make an extra payment or an overpayment. If you have a few hundred extra dollars, make an extra payment. This reduces your principle and reduces the amount of interest you pay every month for the remainder of the loan. And if you're paying $1 less in interest, then that extra dollar goes against principle, which further reduces the amount you pay in interest the next month. This snowballs and can save you a lot in the long run. Better still, instead of paying $288 each month, pay, say, $300. Then every month you're nibbling away at the principle faster and faster. For example, I calculate that if you're paying $288 per month, you'll pay the loan off in 72 months and pay a total of $6062 in interest. Pay $300 per month and you'll pay it off in 67 months with a total of $6031 interest. Okay, not a huge deal. Pay $350 per month and you pay it off in 55 months with $5449 interest. (I just did quick calculations with a spreadsheet, not accurate to the penny, but close enough for comparison.) PS This is different from \"\"revolving credit\"\", like credit cards, where interest is calculated on the \"\"average daily balance\"\". With a credit card, making multiple payments would indeed reduce your interest. But not by much. If you pay $100 every 10 days instead of $300 at the end, then you're saving the interest on 20 days x $100 + 10 days x $100, so 12.5% = 0.03% per day, so 0.03% x ($2000+$1000) = 90 cents. If you're mailing your payments, the postage is 49 cents x 2 extra payments = 98 cents. You're losing 8 cents per month by doing this.\"",
"title": ""
},
{
"docid": "f0938f9cb1ddcfe644e0c4bc217a2a3b",
"text": "Not that I doubted everyone's assumption but I wanted to see the math so I did some spreadsheet hacking. I assumed a monthly payments for 30 years which left us with total payments of 483.89. I then assumed we'd pay an extra $200/month in one of two scenarios. Scenario 1 we just paid that $200 directly to the lender. In scenario 2 we set the extra $200 aside every month until we were able to pay off the $10k at 7%. I assumed that the minimum payments were allocated proportionately and the overpayments were allocated evenly. That meant we paid off loan 5 at about month 77, loan 4 in month 88, loan 3 in month 120, loan 2 in month 165, and loan 1 in month 170. Getting over to scenario 2 where we pay $483.89 to lender and save $200 separately. In month 48 we've saved $9600 relative to the principle remaining in loan 3 of $9547. We pay that off and we're left with loan 1,2,4,5 with a combined principle of about $60930. At this point we are now going to make payments of 683.89 instead of saving towards principle. Now our weighted average interest rate is 6.800% instead of 6.824%. We can calculate the number of payments left given a principle of 60930, interest of 6.8%, and payment of 683.89 to be 124.4 months left for a total of 172.4 months Conclusion: Scenario 1 pays off the debt 3 months sooner with the same monthly expenditure as scenario 2.",
"title": ""
},
{
"docid": "b3666af20f9bb3570574b277a7faccb3",
"text": "Unless you are getting the loan from a loan shark, it is the most common case that each payment is applied to the interest accrued to date and the rest is applied towards reducing the principal. So, assuming that fortnightly means 26 equally-spaced payments during the year, the interest accrued at the end of the first fortnight is $660,000 x (0.0575/26) = $1459.62 and so the principal is reduced by $2299.61 - $1459.62 = $839.99 For the next payment, the principal still owing at the beginning of that fortnight will be $660,000-$839.99 = $659,160.01 and the interest accrued will be $659,160.01 x (0.0575/26) = $1457.76 and so slightly more of the principal will be reduced than the $839.99 of the previous payment. Lather, rinse, repeat until the loan is paid off which should occur at the end of 17.5 years (or after 455 biweekly payments). If the loan rate changes during this time (since you say that this is a variable-rate loan), the numbers quoted above will change too. And no, it is not the case that just %5.75 of the $2300 is interest, and the rest comes off the principle (sic)? Interest is computed on the principal amount still owed ($660,000 for starters and then decreasing fortnightly). not the loan payment amount. Edit After playing around with a spreadsheet a bit, I found that if payments are made every two weeks (14 days apart) rather than 26 equally spaced payments in one year as I used above, interest accrues at the rate of 5.75 x (14/365)% for the 14 days rather than at the rate of (5.75/26)% for the time between payments as I used above each 14 days, $2299.56 is paid as the biweekly mortgage payment instead of the $2299.61 stated by the OP, then 455 payments (slightly less than 17.5 calendar years when leap years are taken into account) will pay off the loan. In fact, that 455-th payment should be reduced by 65 cents. In view of rounding of fractional cents and the like, I doubt that it would be possible to have the last equal payment reduce the balance to exactly 0.",
"title": ""
},
{
"docid": "0b94911436e766d7e927bbe443605fb5",
"text": "tl;dr: Be patient, money is probably sitting somewhere, and it will eventually be credited back to your account. I had a similar problem about 10 years ago. I sent an international wire transfer, from my own bank account in Germany to my bank account in Central America. I had done this before, and there had been no issues, but in this case, even though all the information was correct, the bank rejected the wire because it was above $10K, and in that case, the bank needs written proof from the owner of the receiving account (me) , and so didn't know where the funds were coming from. I had to call the local Sparkasse bank in Germany, as well as an intermediary bank in London to sort it all out, and in total, had to wait about 3-4 weeks to get the money back in my Sparkasse bank account. At one point I thought I may never see that money back, especially since there was an intermediary bank to deal with, but it all worked out in the end.",
"title": ""
}
] |
fiqa
|
c54d3eb4ddc709997fa36255328dcf8a
|
How can I get a mortgage I can't afford?
|
[
{
"docid": "830023386cce5d5933accccde88f990d",
"text": "Honestly I would look for a house you can afford and one that is below the maximum amount of what they are willing to lend you. The reason is owning a house is not a quick loan that you can pay off in a year or two (unless you're rich then I would question why are you even bothering with a loan). This is a long term commitment; can you honestly say your job will provide the money for the mortgage, the upkeep and remodeling of the house (even if it's the perfect house you will want to change something, make the bathroom bigger, put in a pool table etc.. etc..), living expenses and any hiccups life throws at you? Like most of us, that answer will be no. Always have money and supplies for that rainy day, for those lean days. For that mortgage payment. And if nothing happens you can always use the money to pay the mortgage off faster or take a vacation.",
"title": ""
},
{
"docid": "5487351b3c652a93891101150248deb6",
"text": "You might also want to talk directly to a bank. If your credit report is clean, they may have some discretion in making the loan. Note - the 'normal' fully qualified loan has two thresholds, 28% (of monthly income) for housing costs, 36% for all debt servicing. A personal, disclosed loan from a friend/family which is not secured against the house, would count as part of the other debt, as would a credit card. While I don't recommend using a credit card for this purpose, the debt fits in that 28-36 gap. As Kevin points out below, not all paths are equally advisable. Nor are rules of thumb always true. Not having the OP's full details, income, assets, price of house, etc, this is just a list of things to consider. The use of a 401(k) loan in the US can be a great idea for some, bad mistake for others. This format doesn't make it easy to go into great detail, and I'm sure the 401(k) loan issue has been asked and answered in other questions. With respect to Kevin, if he wrote 'usually', I'd agree, but never say 'never.'",
"title": ""
},
{
"docid": "fe42f4891bb8abe1c35dea12d56d0e78",
"text": "Save up a bigger downpayment. The lender's requirement is going to be based on how much you finance, not the price of the house.",
"title": ""
},
{
"docid": "fae978c812a104583716ba6b0d6ed86d",
"text": "If you can't afford it don't buy it, the next perfect house is just around the corner. The more time you spend researching and looking at houses, the increased chance you will find the perfect house you can afford. Also, here in Australia, we (the banks as well) factor in an interest rate rise of 2% above current rates to see if repayments can still be afforded at this increased rate.",
"title": ""
},
{
"docid": "bb3a4f5bd551b3e660505e120d2dad09",
"text": "You can ask the buyer to lower the price by the amount you are approved for and negation transferring the amount to him via a escrow..",
"title": ""
}
] |
[
{
"docid": "6933bbfd0b40ce34f74b37a9feceb427",
"text": "The problem comes when the borrower cannot afford his home. If a borrower buys more home than they can afford, as long as he can sell the house for more than he owes, he's not in a disastrous situation. He can sell the house, pay off the mortgage, and choose more affordable housing instead. If he is upside-down on his home, he doesn't have that option. He's stuck in his home. If he sells it, he will have to come up with extra money to pay off the mortgage (which he doesn't have, because he is in a home he can't afford). It used to be commonplace for banks to issue mortgages for 100% of the value of the home. As long as the home keeps appreciating, everybody is happy. But if the house drops in value and the homeowner finds himself unable to make house payments, both the homeowner and the bank are at risk. Recent regulations in the U.S. have made no-down-payment mortgages less common.",
"title": ""
},
{
"docid": "03c1690b83249edd54f7e6a09e48bd72",
"text": "\"That \"\"something\"\" you are signing means you are liable for the mortgage payments - yes, all of them - if he can't or won't pay at any point. The limit on what the bank will lend him based on his salary is there for a reason - they don't expect him to be able to keep up repayments if they lend him more (or more precisely, there's a big risk that he won't). Don't forget that even if he swears up and down to you that he can afford them, interest rates can rise; this is a 25 or 30 year commitment you would be making. Interest rates are at a historic low and the only way from here is up; in my living memory rates have been 12% or even 15%. As a very rough rule of thumb, for every £100k borrowed, every additional 1% on the interest rates costs an additional £100 on your monthly payment. Also, the \"\"Transitional Arrangement\"\" is not without its own fees and the bank won't let him simply take you off the mortgage unless they are convinced he can keep up the repayments on his own, which they clearly aren't. Also thanks to @Kat for the additional good point that being on the hook for your friend's mortgage will prevent you from being able to get a mortgage yourself while the liability still exists, or at least severely limit your options. No matter how many times you protest \"\"but I'm not paying any money for that!\"\" - it won't help. Another point: there are various schemes available to help first time buyers. By signing up for this, you would exclude yourself from any of those schemes in the future.\"",
"title": ""
},
{
"docid": "a5711d12602cfcbaf9d52c641416cb4d",
"text": "\"Fundamentals: Then remember that you want to put 20% or more down in cash, to avoid PMI, and recalculate with thatmajor chunk taken out of your savings. Many banks offer calculators on their websites that can help you run these numbers and figure out how much house a given mortgage can pay for. Remember that the old advice that you should buy the largest house you can afford, or the newer advice about \"\"starter homes\"\", are both questionable in the current market. =========================== Added: If you're willing to settle for a rule-of-thumb first-approximation ballpark estimate: Maximum mortgage payment: Rule of 28. Your monthly mortgage payment should not exceed 28 percent of your gross monthly income (your income before taxes are taken out). Maximum housing cost: Rule of 32. Your total housing payments (including the mortgage, homeowner’s insurance, and private mortgage insurance [PMI], association fees, and property taxes) should not exceed 32 percent of your gross monthly income. Maximum Total Debt Service: Rule of 40. Your total debt payments, including your housing payment, your auto loan or student loan payments, and minimum credit card payments should not exceed 40 percent of your gross monthly income. As I said, many banks offer web-based tools that will run these numbers for you. These are rules that the lending industy uses for a quick initial screen of an application. They do not guarantee that you in particular can afford that large a loan, just that it isn't so bad that they won't even look at it. Note that this is all in terms of mortgage paymennts, which means it's also affected by what interest rate you can get, how long a mortgage you're willing to take, and how much you can afford to pull out of your savings. Also, as noted, if you can't put 20% down from savings the bank will hit you for PMI. Standard reminder: Unless you explect to live in the same place for five years or more, buying a house is questionable financially. There is nothing wrong with renting; depending on local housing stock it may be cheaper. Houses come with ongoung costs and hassles rental -- even renting a house -- doesn't. Buy a house only when it makes sense both financially and in terms of what you actually need to make your life pleasant. Do not buy a house only because you think it's an investment; real estate can be a profitable business, but thinking of a house as simultaneously both your home and an investment is a good way to get yourself into trouble.\"",
"title": ""
},
{
"docid": "63f5076c8a243b8546772a1205a51082",
"text": "If I was bank, I certainly wouldn't give a **30 year** mortgage to a **57 year old** with a property which is worth less than the mortgage! And I don't see why a bank should. I get that it sucks for him to have a 6.35% interest mortgage, but that situation sucks for the bank as well. I wouldn't offer a lower interest to someone in that sort of situation.",
"title": ""
},
{
"docid": "8f200ee7a5a6d36978324a23b4718750",
"text": "You cannot do this as per the reasons mentioned by others above, mainly foreign banks cannot hold mortgages over properties in other countries. If this was possible to do, don't you think many others would be applying overseas for mortgages and loans. And even if it was possible the overseas bank would give you a comparative rate to compete with the rates already offered in Australia (to compensate with the extra risks). If you cannot afford to purchase a property at record low rates of below 5% in Australia, then you may want to re-think your strategy.",
"title": ""
},
{
"docid": "a5d1d152614dde74cea6e8431471e43b",
"text": "\"You can make a contingent offer: \"\"I will buy this house if I sell my own.\"\" In a highly competitive environment, contingent offers tend to be ignored. (Another commentator described such a contingency clause as synonymous with \"\"Please Reject Me\"\".) You can get a bridge loan: you borrow money for a short term, at punishingly high interest. If your house doesn't sell, you're fscked. You pay for two mortgages (or even buy the other house for cash). If you can afford this, congratulations on, you know, being super-rich. Or you can do what I am doing: selling one house and then living at my mom's until I buy another one. (You will have to stay at your own mom's house; my mom's house will be full, of course.) Edit: A commentator with the disturbingly Kafkaesque name of \"\"R.\"\" made the not-unreasonable suggestion that you buy both and rent out one or the other. Consider this possibility, but remember: On the other hand, if the stars align, you might not want to extricate yourself. If the tenant is paying the mortgage and a little more, you have an appreciating asset, and one you can borrow against. With a little work and a little judicious use of leverage, doing this over and over, you can accumulate a string of income-producing rental properties.\"",
"title": ""
},
{
"docid": "6a29624539cee4872470d0de9f470bde",
"text": "what are my options for raising the funds? Assuming you have decent credit, you can either mortgage your home or apply for a land loan in order to purchase the land. Since both your home and the land have value, either one can act as collateral in case you default on your loan. Land loans tend to have a higher interest rate and down payment, however. This is because banks see land loans as a riskier investment since it's easier for you to walk away from an empty plot of land than your own home.",
"title": ""
},
{
"docid": "8fe95ac44f4d7345a6a9bf5df235d0e2",
"text": "One option is to try to get a month ahead on your mortgage payments. Rather than using the current month's rent to pay the current month's mortgage payments, try to use the previous month's rent to pay the current month's mortgage payments. This should allow you to pay on time rather than late but not unacceptably late.",
"title": ""
},
{
"docid": "9a063c0e3d308e707580d58ac1b53af9",
"text": "\"Short answer: don't do it. Unless you know something that the bank doesn't, it's safe to assume that banks are a lot better at assessing risk than you are. If they think he can't afford it, odds are he can't afford it regardless of what he might say to the contrary. In this case, the best answer may be \"\"sorry for your luck;\"\" you could recommend that he comes up with a larger down payment to reduce his monthly payment (or that he find a way to get some extra income) rather than getting you to cosign. Please also see this article by Dave Ramsey on why you should never cosign loans.\"",
"title": ""
},
{
"docid": "63d4ae49051ee9037c47e3161cb81f3a",
"text": "I am sorry for your troubles, but impressed with your problem solving skills. Keep going, things will get better. Your best hope is to find a place that does manual underwriting. If they do computer generated stuff, then you will be kicked for sure. If you can show 20% down, and have some savings, and have some history of paying bills, then you might be approved. Here in Florida, RP Funding still does manual underwriting. Another one that is mentioned is Church Hill mortgage. Also you might check with local credit unions. Of course your best bet to be approved is to be open and state upfront the challenges. You have to find someone that has the ability to think, has the ability to see passed the challenges, and has the authority to do so.",
"title": ""
},
{
"docid": "7ff537afc756ea72fee1fd2d668c3fc0",
"text": "\"I doubt you will get an answer equal to \"\"You can't save when you have debt\"\". Because most mortgages are for decades, very few people would be able to save for retirement if they had to wait to be mortgage free. The difficulty in saving occurs when the interest rate is very high (18% or more) and the interest is not deductible. Such as with credit cards. The minimum payment for your mortgage is 30% of your income. If that doesn't include taxes and homeowners insurance in the 30%, then for the United States that would be considered too large. While the general plan to pay down the mortgage is a good idea, make sure that you are able to handle the minimum payments before starting to increase the payments. Try the minimum for a year or two before getting aggressive The calculation is based on the interest rate of the mortgage, the interest rate of the savings account, and the potential tax deduction of the mortgage and the tax rate on the earned interest. Putting extra money into a mortgage, but missing out on matching retirement money would also have to be figured into the calculation. Make sure you do save for retirement , kids education, and emergencies. Unless your country has a complex system where the money can flow in and out of the mortgage, then once you put extra money into the mortgage you can't get it back when the car dies. The nice thing about putting extra money into a mortgage is that you can do it either in an organized way, or only when you feel comfortable. So it is not urgent for you to commit to a plan immediately. One thing to avoid is a plan that charges you a fee to add extra money, or charges a fee to switch to a bi-weekly mortgage. While your ideas is good, these plans should never cost any money to start, and may be a scam if a 3rd party gets between you and the lender.\"",
"title": ""
},
{
"docid": "9d49fecd9c88546d2b3fd701e7d5f498",
"text": "\"Short answer: It depends :) It should generally be cheaper to get a loan directly from a bank, but often a mortgage broker can find you deals that you might not be able to get with a local bank. If you are refinancing, the cheapest option of all is usually to go through the bank that holds your existing mortgage. As for how mortgage brokers make their money, there are two ways. The first is on the \"\"front end\"\" through fees (origination fees especially) that go directly to them. The second and less obvious is on the \"\"back end\"\". This is where they make money by giving you a loan at a slightly higher rate than the lender was willing to give you. So, let's say they find a lender that will give you a loan at 5.25%. They offer that loan to you at 5.5% and pocket the extra .25% when the bank takes it over.\"",
"title": ""
},
{
"docid": "8d422c12af9dd3cdf0b821af637c0fe7",
"text": "Your only option might be finding a seller-financed property with a motivated seller who is willing to take the risk of loaning you money. However, be prepared to pay a hefty rate on that loan if you can even pull it off.",
"title": ""
},
{
"docid": "a9e31264f9315abe930f2a44710544f2",
"text": "\"There are a few of ways to do this: Ask the seller if they will hold a Vendor Take-Back Mortgage or VTB. They essentially hold a second mortgage on the property for a shorter amortization (1 - 5 years) with a higher interest rate than the bank-held mortgage. The upside for the seller is he makes a little money on the second mortgage. The downsides for the seller are that he doesn't get the entire purchase price of the property up-front, and that if the buyer goes bankrupt, the vendor will be second in line behind the bank to get any money from the property when it's sold for amounts owing. Look for a seller that is willing to put together a lease-to-own deal. The buyer and seller agree to a purchase price set 5 years in the future. A monthly rent is calculated such that paying it for 5 years equals a 20% down payment. At the 5 year mark you decide if you want to buy or not. If you do not, the deal is nulled. If you do, the rent you paid is counted as the down payment for the property and the sale moves forward. Find a private lender for the down payment. This is known as a \"\"hard money\"\" lender for a reason: they know you can't get it anywhere else. Expect to pay higher rates than a VTB. Ask your mortgage broker and your real estate agent about these options.\"",
"title": ""
},
{
"docid": "0d7882c298cb26a09da949ad3a233ca7",
"text": "\"Its definitely not a stupid question. The average American has absolutely no idea how this process works. I know this might be annoying, but I'm answering without 100% certainty. The Fed would increase the money supply by buying back government bonds. This increased demand for bonds would raise their price and therefore lower the interest return that they deliver. Since U.S. treasury bonds are considered to be the very safest possible investment, their rate is the \"\"risk free\"\" rate upon which all other rates are based. So if the government buys billions of these bonds, that much money ends up in the hands of whoever sold them. These sellers are the large financial organizations that hold all of our money (banks and large investment vehicles). Now, since bond rates are lower, they have an incentive to put that money somewhere else. It goes into stocks and investment in business ventures. I'm less certain about how this turns into inflation that consumers will recognize. The short answer is that there is only a finite number of goods and services for us to buy. If the amount of money increases and there are still the same number of goods and services, the prices will increase slightly. Your question about printing money to pay off debts is too complex for me to answer. I know that the inflation dynamic does play a role. It makes debts easier to pay off in the future than they seem right now. However, causing massive inflation to pay off debts brings a lot of other problems.\"",
"title": ""
}
] |
fiqa
|
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